/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130725.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 25, 2013, Vol. 17, No. 204 Headlines 250 AZ: Court Says Chiquita Center Worth $40 Million 250 AZ: Exit Plan to Pay Unsecured Creditors in 10 Years ADVANCE COMPUTER: Court Denies Motion to Dismiss Chapter 11 Case ADVANCED COMPUTER: Creditor Wants Disqualification Motion Denied AMERICAN AIRLINES: Ad Hoc Committee Files Statement of Support AMERICAN AIRLINES: Announces Early Tender Results AMERICANWEST BANCORPORATION: Disclosure Statement Approved ATLAS RESOURCE: Moody's Assigns 'Caa1' Rating to $250MM Notes AURA SYSTEMS: Incurs $3-Mil. Net Loss in First Quarter BEALL CORPORATION: Settles With Bank, Sets Sept. 5 Confirmation BERNARD L. MADOFF: Picard Has No Right to 1st Recovery, NY AG Says BIG M: Porzio to Receive $190,000 Flat Fee for Legal Services BOARDRIDERS SA: Moody's Lowers Rating on Senior Notes to 'B3' CAPITOL BANCORP: Files Amended Joint Liquidating Plan CARMIKE CINEMAS: S&P Affirms 'B' Corp. Credit Rating CAROLINA BEER: S&P Affirms 'B-' CCR & Revises Outlook to Stable CDW CORP: $190MM Sr. Term Loan Expansion Gets Moody's Ba3 Rating COMMUNITY TOWERS: Says CIBC Should Litigate Claims Dispute COOPER-BOOTH: Has Authority to Employ SSG as Investment Bankers COOPER-BOOTH: Has Final Authority to Use Cash Collateral CORNERSTONE HOMES: New York Homebuilder's Prepack Plan Approved DAVIS HEALTH: Moody's Confirms 'B2' Rating & Negative Outlook DEALER COMPUTER: Moody's Lowers Corp. Family Rating to 'B3' DEEP MARINE: Insurers Can't Invoke Indemnification in BHP Deal DETROIT, MI: Police, Fire Pensions Fail to Delay Bankruptcy DETROIT, MI: Euro Banks Exposed to Chapter 9 Bankruptcy DETROIT, MI: Bankruptcy Raises Constitutional Issues DETROIT, MI: Fitch Notes Implications of Ch. 11 Filing on GO Bonds DIAMOND RESORTS: S&P Revises Outlook to Positive & Affirms B- CCR DRYSHIPS INC: Ocean Rig Enters Into Skyros Deal with Total E&P EASTMAN KODAK: BNY Mellon Seeks Estimation of Claims EASTMAN KODAK: Proposes to Assume Over 1,700 Contracts EASTMAN KODAK: Proposes to Assume and Assign 36 Contracts to RED EDISON MISSION: Court Denies R. Klossing's Motion to Lift Stay EDISON MISSION: Powerton Lease Decision Deadline Moved to Sept. 30 EDISON MISSION: Wins OK for JPMorgan as Fin'l Co-Advisor EDISON MISSION: Court Denies Lindblad Motion for Relief from Stay EDISON MISSION: Tyche Appeals Order Denying Lift Stay Motion EMERITO ESTRADA: Hires Alexis Fuentes as Counsel EXIDE TECHNOLOGIES: Committee Taps Lowenstein Sandler as Counsel EXIDE TECHNOLOGIES: Panel Retains Zolfo Cooper as Fin'l Advisors EXIDE TECHNOLOGIES: Panel Hiring Morris Nichols as Co-Counsel EXIDE TECHNOLOGIES: $500-Mil. DIP Financing Gets Court Approval EXTENDED STAY: Deutsche Bank, Goldman and JPMorgan for IPO FISHER ISLAND: Appeal From Fee Orders Dismissed as Untimely FOOT LOCKER: Moody's Changes Outlook on 'Ba2' CFR to Positive GENERAL CERAMICS: Ch. 11 Buyer Targets Insurers for Cleanup Costs GIBSON BRANDS: S&P Assigns 'B' Rating to $200MM Sr. Secured Notes HARBINGER GROUP: Unresolved Civil Actions Bring Uncertainty HI-WAY EQUIPMENT: Has Final OK for UpShot as Claims Agent HIGHWAY TECHNOLOGIES: Sec. 341 Meeting Continued Sine Die HIGHWAY TECHNOLOGIES: Can Employ Pachulski & Imperial Capital HIGHWAY TECHNOLOGIES: Court Approves Hilco as Sales Agent HIGHWAY TECHNOLOGIES: Panel Can Employ Gavin/Solmonese as Advisor HOSTESS BRANDS: Environmental Concerns Depress Asset Sales HOSTESS BRANDS: Can Auction Remaining Assets, Judge Says IGPS CO: Bankruptcy Court Approves Sale to Joint Venture IGPS CO: Committee Taps Emerald Capital as Financial Advisors INNER CITY: Files Settlement Agreement Under Seal INNER CITY: May Assume and Assign Arbitron Pacts to YMF Media JEFFERSON COUNTY: Monarch Acquires Portion of Fundamental Claims KEHE DISTRIBUTORS: S&P Assigns 'B+' CCR; Outlook Stable KEYSTONE AUTOMOTIVE: Moody's Assigns 'B3' Rating to Sr. Term Loan KEYSTONE AUTOMOTIVE: S&P Assigns Prelim. 'B' CCR; Outlook Stable KINGSBURY CORP: Hearing on Plan Outline Continued to Aug. 21 KODIAK OIL: Senior Notes Issuance Gets Moody's 'B3' Rating KODIAK OIL: S&P Rates $400MM Sr. Unsecured Notes Due 2022 'B' LAURENTIAN ENERGY: Moody's Keeps 'Ba2' Rating on $45MM Bonds LEHMAN BROTHERS: Files Updated Cash Flow Estimates in N.Y. Court LEHMAN BROTHERS: U.S. Bank Objects to Request for Stay Extension LEHMAN BROTHERS: Gibson, et al., Final Fee Applications Okayed LEHMAN BROTHERS: Andorra Banc Settles Claim Dispute LEHMAN BROTHERS: Settles Oracle's $7.2-Mil. Claim LEHMAN BROTHERS: RFWSD Pre-Inclusion Agreements Assumed LEHMAN BROTHERS: Trustee, CSP Ink Deal to Settle $14.6-Mil. Claim LIBERTY MEDICAL: Aug. 14 Bar Date Set for Equity Holders LIBERTY MEDICAL: RSR Consulting's Rosenfeld Approved as CRO LIFE CARE ST. JOHNS: July 25 Hearing on Use of Cash Collateral LIGHTSQUARED INC: Proposes Dec. 16 Plan Approval Hearing LSB INDUSTRIES: Moody's Assigns Ba3 Rating to New Senior Notes LONGVIEW FIBRE: S&P Withdraws 'B+' Corp. Credit & Sr. Note Ratings MAXCOM TELECOMUNICACIONES: Files Voluntary Chapter 11 Petition MAXCOM TELECOMUNICACIONES: Case Summary & 30 Top Unsec. Creditors MERCANTILE BANCORP: U.S. Trustee Appoints 3-Member Creditors Panel MERCANTILE BANCORP: Hires DLA Piper as Counsel METHOD ART: Court Enters Final Decree Closing Case MF GLOBAL: Corzine Executives Ask Court to Toss Suit MUD KING: NOV Wants Case Dismissed, Says Case Filed in Bad Faith MUD KING: Can Employ Marian Ladner as Special Counsel MUD KING: Can Employ O'Connor & Associates as Tax Consultants MUTUAL BENEFITS: Court Denies Bid to Supplement Record on Appeal NATIONAL ENVELOPE: Global Settlement Approved by Judge NNN PARKWAY: Lender Wants to Foreclose on Georgia Property NORSE ENERGY: To Sell New York Gas Leases in August NORTEL NETWORKS: Counsel Withdraws Appearance NORTEL NETWORKS: Long-Term Disabled Workers Entitled to Severance NORTEL NETWORKS: Hain Capital, Solus & TRC Buy Claims NORTH AMERICAN ENERGY: Moody's Changes Ratings Outlook to Stable NORTHERN BEEF: Files for Bankruptcy in South Dakota OVERSEAS SHIPHOLDING: Sonar Credit and DACA Buy Claims PACIFIC THOMAS: Amends Disclosure Statement to Address Objections PATRIOT COAL: Investors Slam Execs' Bid to Ditch Fraud Suit PENSON WORLDWIDE: Seeks Court Approval of ADR Procedures PENSON WORLDWIDE: Arbco Chapter 7 Trustee Wants Stay Lifted PENSON WORLDWIDE: Asks Court to Further Extend Exclusive Periods PITT PENN: Chapter 11 Trustee Wants Pavia as Litigation Counsel PMC MARKETING: Office Park's Summary Judgment Bid Denied PROCTOR HOSPITAL: S&P Cuts Rating on IL's Refunding Bonds to 'BB-' READER'S DIGEST: DEMG Files Liquidation Plan SPORTSMAN'S LINK: 11th Cir. Upholds Order vs Owner in Legal Suit SUN MERGER: $100MM Loan Increase No Impact on Moody's Ratings TALLGRASS ENERGY: Decision on CCAA Application Deferred to July 26 TATA CHEMICALS: Moody's Assigns First-Time Ba3 Corp Family Rating TATA CHEMICALS: S&P Assigns 'B+' Corp. Credit Rating TAYLOR, MI: Moody's Affirms 'Ba1' Rating on $31MM GO Debt TERRACE COMMUNITY: S&P Cuts Rating on FL 2007 Bond Rating to 'BB+' TOYS 'R' US: Fitch Assigns 'BB-' Rating on New $985MM Term Loan TOYS 'R' US: Proposed $985-Bil. Revolver Gets Moody's B3 Rating TOYS 'R' US: S&P Assigns 'B+' Rating to $985MM Term Loan Due 2019 U.S. SECURITY: Poor Performance Prompts Moody's to Cut CFR to B2 VAIL LAKE: Sec. 341 Creditors' Meeting Continued to July 27 VAIL LAKE: Cooley LLP on Board as General Bankruptcy Counsel VAIL LAKE: Hires E3's Hebrank as Chief Restructuring Officer WEST AIRPORT: Sec. 341 Creditors' Meeting Set for Aug. 9 WORLDCOM INC: Second Circuit Reverses Ruling on Communications Tax * Fitch: FDIC Loss-Sharing Expiration Little Threat to U.S. Banks * Moody's Sees 3.2% Increase in Corporate Defaults by November * Moody's: Slow Economic Growth Keeps Industry Outlooks Unchanged * Canadian Insurers' Int'l. Operations Weaken Credit Profile * Corporate-Default Rate to Increase as QE Ends * Detroit Post-Bankruptcy Debt Trades Show Improved Recovery Bets * Michigan Municipalities' Bond Sales Slow Most Since April * Recent Small-Dollar & Individual Chapter 11 Filings ********* 250 AZ: Court Says Chiquita Center Worth $40 Million ---------------------------------------------------- The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona determined that the "as is" value of 250 AZ, LLC's property consisting of, among other things, a 29-story office building located at 250 East Fifth Street, Cincinnati, Ohio, commonly known as the Chiquita Center, which is subject to a ground lease with Columbia Development Corporation, and related personal property is $40 million. The Court also approved a motion to exclude testimony of expert witness Thomas G. Rooney. The motion was filed by U.S. Bank National Association, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee, successor to Wells Fargo Bank, N.A., as Trustee, for the registered holders of COBALT CMBS Commercial Mortgage Trust 2006-C1, Commercial Mortgage Pass-Through Certificates, Series 2006-C1, by and through CWCapital Asset Management LLC, solely in its capacity as special servicer. In a separate order, the Court denied the Debtor's motion to reconsider the value of the Chiquita Center. The Chiquita Center, which is subject to CWC's security interest, was built by the Debtor's predecessor in interest on property subject to a long- term ground lease. CWC's appraiser valued the Chiquita Center on an "as is" basis at approximately $45 million. CWC's appraiser's "stabilized" value was $63 million, with stabilization projected to occur in 2017. The Debtor's appraiser valued the Chiquita Center at $31 million on an "as is" basis and at approximately $60 million when stabilized. U.S. Bank objected to the motion for reconsideration, saying the Debtor's request for reconsideration is improper. Lori L. Winkelman, Esq., at Quarles & Brady LLP; and Keith C. Owens, Esq., at Venable LLP, represent U.S. Bank as counsel. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., at Breen Olson & Trenton, LLP as counsel. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 250 AZ: Exit Plan to Pay Unsecured Creditors in 10 Years -------------------------------------------------------- 250 AZ, LLC, submitted to the U.S. Bankruptcy Court for the District of Arizona a Disclosure Statement explaining a proposed Plan of Reorganization dated July 5, 2013. According to the Disclosure Statement, the Debtor proposes a 10-year or 120-month plan. The Debtor's Plan recognizes the reality of the market and the need to restructure debt on the Debtor's rental properties, make the capital improvements required, establish attractive marketing programs, and provide for attractive tenant improvements and competitive leasing commissions. The Plan is paying the allowed secured claim of the first mortgage holder on each rental property and on the development parcels. The personal property of 250 AZ LLC primarily consists of furniture fixtures and equipment located at the Chiquita Center. The personal property is secured collateral for the first mortgage holder. Under the Plan, in addition to the payments of the allowed secured claims to the secured creditors, the Debtor will pay to unsecured creditors in Class 15 a pro rata share of the funds paid to that class. The Debtor is paying a minimum of $100,000 to the Class 15 general unsecured creditors per year over the ten-year period of the Plan. Those creditors would receive nothing in a liquidation. Additionally the Class 15 general unsecured creditors would receive an additional $250,000 per year for the years six through 10 provided the gross revenues for those years exceeded $11,000,000. The Debtor will fund its plan of reorganization from ongoing business operations, rents, property development, and sale or lease of land and buildings and from equity capital until sufficient disposable income can be generated. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/250_AZ_ds.pdf About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., at Breen Olson & Trenton, LLP as counsel. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. ADVANCE COMPUTER: Court Denies Motion to Dismiss Chapter 11 Case ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico, according to Advanced Computer Technology (ACT), Inc.'s case docket, has denied Abraham Colon's motion to dismiss the Debtor's Chapter 11 case for lack of jurisdiction. On June 12, 2013, Mr. Colon, an unsecured creditor, filed a motion to dismiss, without submitting to the jurisdiction of the court, for the purpose of preserving all rights and the Debtor's patrimony. Mr. Colon noted that the Debtor failed to pay any rent on its premises; the Debtor has failed to present a plan of reorganization; and when the Debtor has discontinued most of its employees it has discontinued the core of its business. About Advanced Computer San Juan, Puerto Rico-based Advanced Computer Technology, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-04454) in Old San Juan on June 6, 2012. The Debtor, an information system consulting firm, disclosed $10.34 million in assets and $6.176 million in liabilities in its schedules. It said software and licenses rights are worth $6.30 million. The value of its 100% ownership of Sprinter Solutions, Inc., is unknown. The Debtor's only shareholder is Investigacion Y Programas, S.A. Its president is Jaime Romano and its secretary and chief executive officer is Osvaldo Karuzic, none of whom hold any shares in the Debtor. Bankruptcy Judge Brian K. Tester presides over the case. Charles Alfred Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices, in San Juan, P.R., serves as the Debtor's counsel. William Santiago-Satre, Esq., at De Diego Law Offices, in Carolina, P.R., represents Banco Bilbao Vizcaya Argentaria Puerto Rico as counsel. ADVANCED COMPUTER: Creditor Wants Disqualification Motion Denied ---------------------------------------------------------------- Unsecured creditor Abraham Colon -- through Edilberto Berrios Perez, pro se, both without submitting to the jurisdiction of the Court, and demanding the unconstitutional condition doctrine -- oppose Advanced Computer Technology (ACT), Inc.'s motion for disqualification of attorney Edilberto Berrios Perez, Esq., who represents Mr. Colon in the Debtor's case. Mr. Colon is an ex- employee of the Debtor. According to Mr. Colon, B&L, of which attorney Mr. Berrios Perez is a part, only handled very few things for ACT in the years 2003 and 2004 and form 2007 through January 2011. B&L and Mr. Berrios Perez acted sporadically as counsel for ACT, and only on very specific matters that have concluded, none of which relates to the issues that the motion to dismiss -- that Mr. Colon filed -- presents. The Court has required B&L and attorneys Mr. Berrios-Perez, Esq., Fernando Longo Qui�ones, Esq., and Roberto Berrios Falcon, Esq., to reply to the Debtor's motion. The Debtor moved for the immediate disqualification of counsel, prohibition for counsel to represent any other party in the case, and for quashing of motion to dismiss. The Debtor noted that B&L previously represented the Debtor as of the year 2003, among other matters, such as consulting services related to the WIC Program of the Department of Health of the Commonwealth of Puerto Rico and Financial and Security Agreements related to Gomez Holdings, Inc. Due to conflicts of interests arising from an attorney-client relationship, B&L must be immediately disqualified from representing GHI, Mr. Colon and any other party in the bankruptcy case and related proceedings to prevent continuing and undue prejudice to the Debtor. About Advanced Computer San Juan, Puerto Rico-based Advanced Computer Technology, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-04454) in Old San Juan on June 6, 2012. The Debtor, an information system consulting firm, disclosed $10.34 million in assets and $6.176 million in liabilities in its schedules. It said software and licenses rights are worth $6.30 million. The value of its 100% ownership of Sprinter Solutions, Inc., is unknown. The Debtor's only shareholder is Investigacion Y Programas, S.A. Its president is Jaime Romano and its secretary and chief executive officer is Osvaldo Karuzic, none of whom hold any shares in the Debtor. Bankruptcy Judge Brian K. Tester presides over the case. Charles Alfred Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices, in San Juan, P.R., serves as the Debtor's counsel. William Santiago-Satre, Esq., at De Diego Law Offices, in Carolina, P.R., represents Banco Bilbao Vizcaya Argentaria Puerto Rico as counsel. AMERICAN AIRLINES: Ad Hoc Committee Files Statement of Support -------------------------------------------------------------- BankruptcyData reported that AMR's ad hoc committee filed with the U.S. Bankruptcy Court a statement in support of the Debtors' motion for entry of an order establishing maximum amount of disputed claims to be utilized for determining disputed claims reserve under Debtors' Second Amended Joint Chapter 11 Plan and approving certain procedures in connection with disputed claims reserve. The committee states, "The Ad Hoc Committee has worked collaboratively with the Debtors and the UCC to pursue a path that will quickly and efficiently maximize the value of the Debtors' estates for all stakeholders. To that end, by the Motion, the Debtors seek an order permitting them to establish the Disputed Claims Reserve utilizing an aggregate maximum amount of $331 million of Disputed Claims, which amount is substantially higher than the Debtors' high-end estimate of actual claims realization. Without such relief, given the inflated amounts in which the Disputed Claims are being asserted, distribution of billions of dollars of value to holders of Allowed Single-Dip General Unsecured Claims and prepetition AMR common stock would be materially delayed, possibly for years. In fact, parties who have asserted inflated claims may be motivated to use such holdup of distributions as leverage to extract higher than justified allowed claims....The Ad Hoc Committee notes, however, that by the Debtors' estimates, the proposed Disputed Claims Reserve Amount is exceedingly conservative and would provide for a reserve that is approximately three times the amount of the Debtors' high-end estimate of allowable Disputed Claims. Thus, the Ad Hoc Committee believes that the requested relief strikes a balance sufficient to protect the legitimate rights and interests of all the stakeholders in these cases. Accordingly, the Ad Hoc Committee supports the Motion." 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: Announces Early Tender Results ------------------------------------------------- American Airlines, Inc., the principal operating subsidiary of AMR Corporation, on July 24 announced early tender results and changes with respect to its previously announced tender offers to purchase for cash any and all of its 8.625% Class A Pass Through Certificates, Series 2011-2, its 10.375% Class A Pass Through Certificates, Series 2009-1, and its 13.0% 2009-2 Secured Notes due 2016. The tender offers are made pursuant to and are subject to the terms and conditions described in the Offer to Purchase dated as of June 26, 2013 and related Letter of Transmittal dated as of June 26, 2013. American on July 24 announced the following: 1. American has waived the Minimum Tender and Instruction Condition as described in the Offer to Purchase with respect to each tender offer. 2. American has extended the Expiration Date for each tender offer to 11:59 p.m. EDT, on Aug. 6, 2013 (Expiration Date). The Expiration Date for each tender offer was previously 5:00 p.m. EDT, on Aug. 2, 2013. 3. The aggregate amount of each class of Securities that was validly tendered and not withdrawn as of 5:00 p.m. EDT, on July 12, 2013 (Early Tender Date) is set forth in the table below. CUSIP Number Title of Security Original Aggregate Face/ Principal Amount Current Aggregate Pool Balance/ Principal Amount Outstanding 02377VAA0 8.625% Class A Pass Through Certificates, Series 2011--2 $725,694,000 023763AA3 10.375% Class A Pass Through Certificates, Series 2009-1 $520,110,000 023771R75 13.0% 2009--2 Secured Notes due 2016 $276,400,000 (1) Amortization Factor (2) Original Aggregate Face/Principal Amount Tendered Current Aggregate Pool Balance/ Principal Amount Tendered Percentage of Current Aggregate Pool Balance/Principal Amount Outstanding (1) Tendered $660,371,609 91.00% $240,677,000 $408,013,786 78.44% $113,487,000 $159,036,999 57.54% $29,558,000 (1) As of the Early Tender Date. Reflects principal repayments or distributions, as the case may be, made prior to the Early Tender Date (including the distribution made on July 2, 2013 with respect to the 2009-1 Certificates) on each class of Securities but does not reflect any scheduled repayments after the Early Tender Date. Prior to the Expiration Date, a principal repayment is expected to be made on August 1, 2013 with respect to the outstanding principal amount of the 2009-2 Notes. Payment with respect to Securities accepted for purchase pursuant to a tender offer will be made, however, only on outstanding pool balances or principal amounts (as applicable) of the Securities as of the applicable settlement date. (2) As of the Early Tender Date. Such amortization factor would change in the event of any principal repayment or principal distribution on any class of Securities after the Early Tender Date. As of 5:00 p.m. EDT, on July 23, 2013, 26.48% of the aggregate outstanding pool balance or principal amount (as applicable) of the Securities, on a combined basis, had been tendered and not validly withdrawn. Holders of Securities who validly tender their Securities after the Early Tender Date and on or before the Expiration Date will be eligible to receive only the tender offer consideration described in the Offer to Purchase, which amount does not include the early tender payment of $65 per $1,000 outstanding pool balance or principal amount (as applicable) with respect to any Securities that were validly tendered and not validly withdrawn by the Early Tender Date and accepted for purchase. Except as described herein, other terms of the tender offers remain unchanged. Holders of Securities should read carefully and in their entirety the Offer to Purchase and Letter of Transmittal before deciding whether to tender. No further action is required to be taken by holders who have already tendered Securities. American's obligation in connection with any tender offer to accept for purchase, and to pay for, any Securities that are validly tendered and not validly withdrawn pursuant to such tender offer remains subject to and conditioned upon, among other things, the satisfaction or, where applicable, its waiver or amendment, in each case as determined by American in its sole discretion, of the following conditions: (1) approval from the United States Bankruptcy Court for the Southern District of New York for the tender offers shall not have been stayed, reversed, modified or vacated; (2) American shall have issued new debt financing subsequent to the date hereof in an amount, and on terms and conditions, satisfactory to American in its sole and absolute discretion; and (3) certain general conditions, as further described in the Offer to Purchase. Each tender offer can be modified or terminated without affecting the terms or conditions of any other tender offer. American previously announced on July 11, 2013 the waiver of the Second Circuit Decision Condition described in the Offer to Purchase with respect to each tender offer. American has retained Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC to serve as the Dealer Managers for the tender offers. American also has retained D.F. King & Co., Inc. to serve as the Tender Agent and Information Agent. Copies of the Offer to Purchase and Letter of Transmittal can be obtained by contacting the Information Agent at (800) 290-6429. Questions regarding the tender offers should be directed to Deutsche Bank Securities Inc. at (866) 627-0391 (toll-free) or (212) 250-2955 (collect) and Morgan Stanley & Co. LLC at (800) 624-1808 (toll-free) or (212) 761-1057 (collect). You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the tender offers. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 AMERICANWEST BANCORPORATION: Disclosure Statement Approved ---------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved HoldCo Advisors' Third Amended Disclosure Statement related to the Second Amended Chapter 11 Plan of Reorganization proposed for AmericanWest Bancorporation and dated June 11, 2013. The Court scheduled an August 20, 2013 hearing to consider the Plan. As previously reported, "Holdco's Plan provides for the reorganization of the Debtor and for Holders of certain Allowed Claims to receive equity in the Reorganized Debtor, with the option for each Holder of TOPrS Unsecured Claims and General Unsecured Claims to receive instead a 'cash out' right of payment and/or a security that results in cash from certain of the Debtor's assets, including Cash held by the Reorganized Debtor as of the Effective Date. The Plan Proponent believes the Plan will maximize the value of the Estate. In order to effectuate the Distributions, the Plan provides that all of the assets of the Debtor's Estate (including Causes of Action not expressly released under the Plan) shall vest in the Reorganized Debtor. The New Board shall be appointed as of the Effective Date and shall be responsible for implementing the Plan." About AmericanWest Bancorporation Headquartered in Spokane, Washington, AmericanWest Bancorporation (OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding company whose principal subsidiary was AmericanWest Bank, which included Far West Bank in Utah operating as an integrated division of AmericanWest Bank. AmericanWest Bank was a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. AmericanWest Bancorporation filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The banking subsidiary was not included in the Chapter 11 filing. Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster LLP, also serves as counsel. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. AmericanWest Bancorporation's estimates exclude its banking unit's assets and debts. In its Form 10-Q filed with the Securities and Exchange Commission before the Petition Date, AmericanWest Bancorporation reported consolidated assets -- including its bank unit's -- of $1.536 billion and consolidated debts of $1.538 billion as of Sept. 30, 2010. In December 2010, AmericanWest completed the sale of all outstanding shares of AmericanWest Bank to a wholly owned subsidiary of SKBHC Holdings LLC, in a transaction approved by the U.S. Bankruptcy Court. The bank subsidiary was sold to SKBHC Holdings Inc. for $6.5 million cash. ATLAS RESOURCE: Moody's Assigns 'Caa1' Rating to $250MM Notes ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Atlas Resource Escrow Corporation's proposed $250 million senior unsecured notes due 2021. Alas Resource Escrow Corporation is a newly formed, wholly-owned subsidiary of Atlas Resource Partners, L. P. established in connection with ARP's proposed acquisition of certain assets from EP Energy E&P Company, L.P. Atlas Energy Holdings Operating Company, LLC's B2 Corporate Family rating and the other ratings of Atlas Energy Holdings are unaffected by this rating action. Atlas Energy Holdings' rating outlook is stable. The proceeds from the proposed notes offering will be used to partially fund the acquisition of 466 billion cubic feet of proved natural gas reserves from EP Energy for $733 million. However, until the EP Energy acquisition closes, the proceeds from the notes offering will be deposited into an escrow account, and will be subject to mandatory redemption in the event that the EP Energy acquisition does not close. Once the EP Energy acquisition closes, then Atlas Energy Holdings and Atlas Resource Finance Corporation (the co-issuer) will assume the obligations of the notes, which will also be guaranteed by ARP. "Atlas Energy Holdings Operating Company's proposed bond offering will improve the company's liquidity profile," commented Gretchen French, Moody's Vice President. "Our underlying views on Atlas Energy Holdings reflected in our June 14 rating action remain unchanged." Rating assignments: $250 Million Senior Unsecured Notes due in 2021, Rated Caa1 (LGD 5, 82%) Moody's current ratings for Atlas Energy Holdings Operating Company, LLC are: Corporate Family Rating of B2 Probability of Default Rating of B2-PD $275 Million Senior Unsecured Notes due in 2021, Rated Caa1 (LGD 5, 82%) Speculative Grade Liquidity rating of SGL-3 Ratings Rationale: Atlas Energy Holdings' Caa1 rated senior unsecured notes reflect both the overall probability of default of Atlas Energy Holdings, to which Moody's assigns a Probability of Default Rating of B2-PD, and a loss given default of LGD 5 (82%). The senior notes are guaranteed by essentially all material domestic subsidiaries as well as the issuer's direct parent on a senior unsecured basis and are accordingly subordinated to the senior secured credit facility's potential priority claim to the company's assets. The size of the potential senior secured claims relative to the unsecured notes outstanding results in the senior notes being notched two ratings below the B2 Corporate Family Rating under Moody's Loss Given Default Methodology. Atlas Energy Holdings' B2 Corporate Family Rating reflects its long-lived reserve base, its large and diverse drilling inventory, the benefits of its partnership management business and a conservative financial leverage profile relative to peers. However, the B2 Corporate Family Rating is restrained by the company's natural gas weighted production base, which has constrained cash margins. The Corporate Family Rating also reflects the company's limited track record with its current asset base due to an aggressive acquisition-led growth strategy. In addition, the rating its restrained by the risks inherent in its MLP corporate finance model, which increases event risk and has resulted in a heavy distribution burden relative to cash flow generation to date. However, the B2 rating recognizes management's meaningful use of equity financing for reasonably priced acquisitions and active hedging program. Atlas Energy Holdings' SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity through mid-2014, driven by its high dividend payout, aggressive pace of acquisitions, and the need to frequently access the capital markets to finance growth. Moody's views ARP's partnership management business as an enhancement to liquidity, providing monthly fees to manage wells and providing up front funding for its PUD drilling program. Atlas Energy Holdings' liquidity profile also benefits from the flexibility in its capital program and its active hedging program. Atlas has a $1 billion revolving credit facility, with committed bank financing supporting a $835 million borrowing base, due 2018, in connection with the EP Energy acquisition. The credit revolving facility is secured by mortgages on its oil and gas properties and security interests in substantially all of its assets. Moody's estimates roughly $600 million of availability under the revolver pro-forma for the EP Energy acquisition and proposed bond offering. Moody's expects that ARP will remain within its covenant compliance metrics which includes Debt/EBITDA of less than 4.50x (stepping down to 4.25x starting in the third quarter of 2013, and 4.00x starting in the second quarter of 2014). Alternative liquidity is limited, given that substantially all of the company's oil and gas assets are pledged as security under its revolver. The outlook is stable based on Moody's expectation that Atlas Energy Holdings maintains an adequate liquidity profile and continues to finance acquisitions with a meaningful equity component. Moody's could upgrade the ratings if the company is able to demonstrate a track record of improved cash margins while maintaining a conservatively leveraged financial profile (debt/production less than $30,000 boe/d) and improving cash flow coverage of distributions. Moody's could downgrade the ratings if leverage increased (debt/production above $40,000 boe/d) or if distribution coverage weakened below 1.1x for a sustained period. The principal methodology used in this rating was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Atlas Energy Holdings Operating Company, LLC is a wholly-owned subsidiary of Atlas Resource Partners, L.P., which is headquartered in Pittsburgh, Pennsylvania. AURA SYSTEMS: Incurs $3-Mil. Net Loss in First Quarter ------------------------------------------------------ Aura Systems, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.0 million on $808,526 of revenue for the three months ended May 31, 2013, compared with a net loss of $3.1 million on $767,568 of revenue for the three months ended May 31, 2012. The Company's balance sheet at May 31, 2013, showed $2.9 million in total assets, $25.2 million in total liabilities, and a stockholders' deficit of $22.3 million. The Company said that as a result of its losses from operations, there is substantial doubt about the Company' ability to continue as a going concern. As reported in the TCR on June 18, 2013, Kabani & Company, Inc., in Los Angeles, California, 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 historically incurred substantial losses from operations, and the Company may not have sufficient working capital or outside financing available to meet its planned operating activities over the next 12 months. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at http://is.gd/VMad0Y El Segundo, Calif.-based Aura Systems, Inc., designs, assembles and sells the AuraGen(R), its patented mobile power generator that uses a prime mover such as the engine of a vehicle to generate power. BEALL CORPORATION: Settles With Bank, Sets Sept. 5 Confirmation --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Beall Corp., which sold its business in January to Wabash National Corp., has arranged a Sept. 5 confirmation hearing for approval of a liquidating Chapter 11 plan. According to the report, Wabash, based in Lafayette, Indiana, paid $15.1 million. Secured lender Key Bank NA was owed $13.4 million. Although most of the net sale proceeds were paid to the bank, the lender hadn't been paid in full. Beall was holding $2 million after the sale. The bank demanded a turnover, which resulted in a settlement where the bank received $1.3 million and the company retained the remainder. The report notes that the disclosure statement approved by the bankruptcy court on July 19 doesn't predict how much unsecured creditors will receive on their claims ranging from $8 million to $20 million. In addition to its portion of sale proceeds, Beall expects to receive $1.3 million from affiliates. About Beall Corporation Portland, Oregon-based Beall Corporation, a manufacturer of lightweight, efficient, and durable tanker trucks, trailers and related products, filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least $10 million in assets and liabilities. Founded in 1905, Beall has four factories and nine sale branches across the U.S. The Debtor has 285 employees, with an average weekly payroll of $300,000. Judge Elizabeth L. Perris presides over the case. Albert N. Kennedy, Esq. at Tonkon Torp LLP represents the Debtor in its restructuring effort. The Debtor disclosed, in an amended schedules $14,015,232 in assets and $29,187,325 in liabilities as of the Chapter 11 filing. Wabash National Corporation on Feb. 4 successfully closed on its acquisition of certain assets of Beall's tank and trailer business for $15 million. Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed six members to the official committee of unsecured creditors. Ball Janik LLP represents the Committee. BERNARD L. MADOFF: Picard Has No Right to 1st Recovery, NY AG Says ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities LLC has no right under the U.S. Bankruptcy Code or the Securities Investor Protection Act to collect a judgment first from the sponsors of a so-called feeder fund, according to New York Attorney General Eric Schneiderman. According to the report, atty. Schneiderman filed his brief on July 19 explaining why a New York district judge was correct by ruling in April that the attorney general can complete a $410 million settlement with feeder fund manager J. Ezra Merkin. The report notes that Madoff trustee Irving Picard, who has his own $560 million lawsuit against Mr. Merkin, argues on appeal to the U.S. Court of Appeals in Manhattan that the undisputed facts show the Judge Schneiderman settlement will preclude Merkin from having enough money left to pay a judgment when he obtains one. In addition to contending Mr. Picard has no right to the first judgment, Judge Schneiderman and feeder fund investors explained in their brief last week why they are settling claims that "Picard does not own and could not bring." The report relates that Mr. Picard is arguing to the Second Circuit appeals court in New York that SIPA takes precedence when a broker like Madoff goes bankrupt. Judge Schneiderman and Mr. Picard agreed to hold up completion of most of the settlement until the appeal is decided. Mr. Picard will file his last brief on Aug. 7. The appeal will be argued during the week of Oct. 7. In mid-April, U.S. District Judge Jed Rakoff threw out Mr. Picard's lawsuit designed to halt settlement of the lawsuit the attorney general began against Merkin in state court in April 2009. Judge Rakoff found that Mr. Picard waited too long and had no right to halt the settlement because no property of the bankrupt estate was involved to invoke the so-called automatic stay. Describing Mr. Merkin as running Madoff's third-largest feeder fund, Mr. Picard contends that Merkin either knew or should have know Madoff was conducting a fraud. Mr. Picard says that the Judge Schneiderman settlement is the "chief obstacle" to his recovery of $560 million for Madoff customers. The appeal in the circuit court is Picard v. Schneiderman, 13-1785, U.S. Court of Appeals for the Second Circuit (Manhattan). The dispute with Schneiderman in district Court is Picard v. Schneiderman, 12-cv-06733, U.S. District Court, Southern District New York (Manhattan). The lawsuit with Schneiderman in bankruptcy court is Picard v. Schneiderman, 12-01778, U.S. Bankruptcy Court, Southern District of New York (Manhattan). 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.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid 53 percent of customers' claims totaling $17.3 billion. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Mr. Picard is holding more than $4.7 billion he can't distribute on account of outstanding appeals and disputes, such as the issue of interest on customers' claims. The largest holdback, almost $2.8 billion, results from disputed claims. BIG M: Porzio to Receive $190,000 Flat Fee for Legal Services ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey, in an amended order, authorized Big M, Inc., to employ Porsio, Bromberg, & Newman P.C. as special litigation counsel effective as of April 1, 2013, to represent the Debtor with respect to insurance claims and litigation arising from or out of Superstorm Sandy. Porzio will be paid a flat fee of $190,000 for legal services rendered in connection with the claim against Westport through the start of the trial. Porzio will be paid an additional flat fee of $50,000 for legal services rendered if the litigation proceeds to trial. Porzio will also receive a success fee of 20% of any recovery in excess of $2.249 million and 25 percent of any such recovery in excess of $3.750 million. As reported by the Troubled Company Reporter on June 3, 2013, Porzio offered two fee options for its retention: the first, a contingent fee arrangement, and the second, a flat fee arrangement. The contingent fee arrangement is: (a) 31% on the first $750,000 recovered; (b) 37% on the next $350,000 recovered; (c) 40% on any recovery in excess of $1.1 million. The flat fee arrangement is $190,000 for services performed through the start date of trial, plus an additional $50,000 for trying the case. The pretrial portion of the flat fee is to be paid in 12 equal monthly installments with the first installment to be paid on May 10, 2013. The flat fee payment is to be accelerated upon any settlement or resolution of the claim, or upon the entry of and Order confirming a Chapter 11 plan. To best of the Debtor's knowledge, Porzio does not have an interest adverse to the estate with respect to the insurance litigation. About Big M Totowa, New Jersey-based Big M, Inc., owner of Mandee, Annie sez, and Afazxe Stores, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-10233) on Jan. 6, 2013 with Salus Capital Partners, LLC, funding the Chapter 11 effort. The Mandee brand is a juniors fashion retailer with 84 stores in Illinois and along the East Coast. Annie sez is a discount department-store retailer for women with 35 stores. Afaze is 10-store jewelry and accessory chain. Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, in Roseland, serves as counsel to the Debtor. PricewaterhouseCoopers LLP has been tapped to serve as financial advisor. GRL Capital Advisors LLC's Glenn R. Langberg has been hired to serve as chief restructuring officer. The Debtor disclosed $21,384,430 in assets and $21,374,057 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors has tapped Cooley LLP as its counsel, and CBIZ Accounting, Tax and Advisory of New York, LLC and CBIZ Mergers & Acquisitions Group as its financial advisor. BOARDRIDERS SA: Moody's Lowers Rating on Senior Notes to 'B3' ------------------------------------------------------------- Moody's Investor Service downgraded Boardriders S.A's (a wholly owned subsidiary of Quiksilver, Inc.) senior unsecured notes to B3 from B2. All other ratings, including Quiksilver's B3 Corporate Family Rating, were affirmed. The downgrade of the unsecured notes issued by Boardriders S.A. notes reflects the recent closing of Quiksilver's offering of $280 million senior secured notes due 2018. As a result of the issuance of the 2018 notes, there is now a meaningful amount of additional secured debt in Quiksilver's capital structure. The following ratings were affirmed: Quiksilver Inc. Corporate Family Rating at B3 Probability of Default Rating as B3-PD $400 million senior unsecured notes due 2015 at Caa2 (LGD 5, 83%) * * Ratings for this debt instrument are expected to be withdrawn upon redemption of these notes The following ratings were affirmed and LGD assessments amended: Quiksilver, Inc. and QS Wholesale, Inc. $280 million senior secured notes due 2018 at B2 (LGD 3, 40% from LGD 3, 39%)) $225 million senior unsecured notes due 2020 at Caa2 (LGD 6, 90% from LGD 5, 89%) The following ratings were downgraded Boardriders S.A. EUR 200 million notes due 2017 from B2 (LGD 3, 42%) to B3 (LGD 3, 44%) Ratings Rationale: Quiksilver's B3 Corporate Family Rating reflects the company's high debt burden with debt/EBITDA in the high six times range and interest coverage below one time. The ratings also reflect the company's weak execution, as evidenced by its low absolute profit margins. The ratings consider the company's ownership of three highly recognized brands in the action lifestyle sector, and the company's global presence, with more than 60% of its revenues generated outside the US. While Moody's believes results will begin to stabilize in the next couple of quarters as the company's cost saving initiatives begin to take hold, credit metrics are expected to remain weak for an extended period of time. The company's overall liquidity profile is good, with access to a $230 million asset-based revolver and no meaningful debt maturities until 2017. The stable outlook considers Moody's expectations that while the company's current metrics will remain weak, over time Moody's expects benefits from improved inventory management and cost saving initiatives to enable the company to make progress improving operating margins over the next 12 to 18 months. The stable outlook also considers the company's good overall liquidity. Ratings could be upgraded if the company were to be successful over time executing its profit improvement plan, which would be evidenced by operating margins showing meaningful improvement from current levels. Quantitatively, ratings could be upgraded if debt/EBITDA was sustained below 5 times and interest coverage was sustained above 1.75 times. Ratings could be lowered if the company was unable to make meaningful progress improving operating margins over the next year, indicating that cost savings initiatives are not being achieved or that its brands faced greater challenges in the market. There is limited capacity for the company to experience any meaningful erosion to the company's current good liquidity profile. Quantitatively ratings could be downgraded if interest coverage remained below one times or if debt/EBITDA were expected to remain above 6 times by the end of the company's 2014 fiscal year. Headquartered in Huntington Beach, California, Quiksilver Inc. distributes apparel, footwear, and accessories in more than 90 countries under brands that include Quiksilver, Roxy and DC. LTM revenues are near $2.0 billion. The principal methodology used in this rating was the Global Apparel 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. CAPITOL BANCORP: Files Amended Joint Liquidating Plan ----------------------------------------------------- Capitol Bancorp Ltd. and Financial Commerce Corporation amended their Joint Liquidating Plan, which supersedes two previously- filed liquidation plans. According to the Plan, "The Debtors are presently unable to estimate a recovery for any of the Classes of Claims and Equity Security Interests of Capitol. The extent of such recovery, if any, will be dependent on the results of the Sale Process and/or Reorganization. To the extent the Sale Process and/or Reorganization results in Proceeds or other value, which any Bank Regulators may, to the extent of their authority, have the power to restrict and permit the Debtors to distribute in furtherance of this Plan, such distribution(s), if any, shall be made upon completion of the Sale Process and liquidation of any remaining assets of the Debtors' Estates pursuant to the provisions of the Liquidating Trust (assuming no Reorganization) or forthwith upon the closing effecting the Reorganization, and in the following order of priorities: (i) pro rata to pay Administrative Creditors; (ii) pro rata to pay Priority Creditors; (iii) pro rata to pay General Unsecured Creditors, Allowed Senior Note Claims and Allowed Trust Preferred Securities Claims; provided, however, that Holders of Allowed Trust Preferred Securities Claims shall be deemed to have contributed any and all pro rata distributions to which they would otherwise be entitled to the payment of Allowed Senior Note Claims until such time, if any, as Holders of Allowed Senior Note Claims have been paid in full." To fund the Plan, the Debtors will commence a competitive sale process to sell and convey each of their remaining non-debtor subsidiary banks, individually or in groups. At any time prior to, or during, the Sale Process, the Debtors may convert from a liquidation to a Reorganization, provided, however, that each of the following conditions is satisfied: (1) the Debtors' then remaining subsidiary banks are "adequately capitalized;" (2) the Debtors have received a non-contingent commitment for financing sufficient to enable payment of all Allowed Administrative and Priority Claims and recapitalization of remaining subsidiary banks such that they are projected to be "adequately capitalized" for a period of at least 12 months after the Effective Date; and (3) the Debtors serve written notice on all Holders of Claims and Equity Security Interests of the conversion to a Reorganization and evidencing the satisfaction of the conditions. In the event of a Reorganization, equity in the Reorganized Debtors will be distributed: (1) first, to the new Equity Investors providing the funds for the Reorganization to the extent of the value of that investment, (2) second, to Holders of Allowed Senior Note Claims to the extent of the value of their Claims, and (3) third, to the extent Holders of Allowed Senior Note Claims have been paid in full, to the Holders of Allowed Trust Preferred Securities Claims to the extent of the value of their Claims. In the event of a Reorganization, in lieu of distributing equity to Holders of Allowed General Unsecured Claims, the Debtors, at their option, may distribute cash to Holders of Allowed General Unsecured Claims equivalent in value to what they would receive in a distribution of equity. A full-text copy of the Amended Plan dated July 17, 2013, is available for free at: http://bankrupt.com/misc/CAPITOLBANCORPplan0717.pdf Phillip D. Torrence, Esq., E. Todd Sable, Esq., Joseph R. Sgroi, Esq., and Lawrence A. Lichtman, Esq., at HONIGMAN MILLER SCHWARTZ AND COHN LLP, in Detroit, Michigan, filed the Amended Plan on behalf of the Debtors. 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. CARMIKE CINEMAS: S&P Affirms 'B' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on U.S. movie exhibitor Carmike Cinemas Inc. The outlook is stable. "We assess Carmike's business risk profile as "weak." The company's theaters are primarily located in small to midsize markets in the Southeast and Midwest, where film preferences tend to be narrower, leading to lower utilization. Many of its venues do not have a large number of screens, which would provide a wider selection of film and show times. Also, many theaters lack stadium seating, a feature popular with moviegoers. We view Carmike's theaters as less modern than those of other leading chains, leaving the company more prone to attendance deterioration if faced with new competition. We view Carmike's financial risk profile as "highly leveraged," reflecting its high debt leverage and its aggressive capital spending and acquisition plans. We assess Carmike's management and governance as "fair", S&P said. "Over the last few quarters, the company has outperformed the domestic box office, partly resulting from the closure of underperforming theaters. We expect the number of unprofitable theaters (which has decreased over the last few years) to remain flat or even increase, based on our expectation that attendance per screen will continue to decline for the foreseeable future. The acquisition of theaters from Rave Cinemas and Cinemark Holdings Inc. increases diversity, but we still expect Carmike's results to remain volatile. Longer term, we see increasing pressure on theater attendance from proliferating entertainment alternatives, and studios releasing films to premium video-on- demand platforms within the traditional theatrical window," S&P added. S&P will continue to reassess the rating and outlook on Carmike as the company deploys the equity issuance proceeds. S&P could raise the rating if Carmike's operating performance continues to improve and the company's expansion plans are successful, resulting in an improved EBITDA margin, consistently positive discretionary cash flow, and increased sources of liquidity. These results, coupled with the company maintaining peak leverage below 5x, despite volatile box-office performance and secular pressures on attendance, would likely lead to an upgrade. S&P could also raise the rating if the company's management publically commits to maintain leverage at a lower level by moderating Carmike's financial policies. S&P could lower the rating if Carmike cannot maintain adequate liquidity because of box-office volatility and aggressive financial policy decisions. S&P could also lower the rating if sources do not exceed expected uses by at least 1.2x, or if the EBITDA margin of compliance, with its net first-lien leverage covenant, falls below 20%, and leverage increases above 6x on a sustained basis. S&P could also consider a downgrade if it expects discretionary cash flow to turn negative as a result of attendance declines, higher capital spending, and a resumption of regular annual dividends to shareholders in the $5 million to $10 million range. CAROLINA BEER: S&P Affirms 'B-' CCR & Revises Outlook to Stable --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Mooresville, N.C.-based Carolina Beer & Beverage Holdings LLC. S&P has revised the outlook to stable from positive. At the same time, S&P affirmed its 'B-' issue-level rating on Carolina Beverage Group LLC's now proposed $130 million senior secured notes due 2018, issued under Rule 144A without registration rights. The recovery rating remains '4', indicating S&P's expectation for average (30% to 50%) recovery in the event of a payment default. 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. S&P expects the company to use the proceeds from the upsized offering to refinance existing debt, to fund an approximately $68 million distribution to equity holders, including the repurchase of minority shareholdings, to repurchase shares from minority holders, and to pay transaction fees and expenses. At the close of the transaction, S&P estimates Carolina will have about $140 million in total debt outstanding. The ratings on Carolina reflects S&P's opinion that the company's business risk profile is "vulnerable" and financial risk profile is "highly leveraged." Key credit factors in S&P's business risk assessment include the company's narrow business focus; small size; and customer, geographic, and manufacturing concentration, as well as the risks associated with pursuing a rapid growth policy. S&P believes 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. S&P views Carolina's financial risk profile as highly leveraged. It is S&P's opinion that the company's financial policy is now very aggressive, reflecting its controlling ownership by a financial sponsor and its relatively high level of debt, including the proposed debt financed shareholder distribution. (Carolina is a private company and does not publish financial statements publicly.) For the 12 months ended March 31, 2013, S&P estimates the pro forma ratio of adjusted total debt to EBITDA is close to 6x and funds from operations to total debt is less than 12%. "We expect credit measures will remain near current levels, including total debt to EBITDA of close to 6x," said Standard & Poor's credit analyst Jean Stout. "We could lower the rating if the company's liquidity becomes constrained or credit ratios weaken significantly. Although less likely within the next one to two years, S&P could raise the rating 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 closer to 4x." CDW CORP: $190MM Sr. Term Loan Expansion Gets Moody's Ba3 Rating ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed CDW Corporation's $190M senior secured term loan accordion to be issued by its wholly-owned subsidiary CDW LLC. The proceeds will be used to refinance existing high coupon notes. CDW's ratings remain on review for upgrade following the company's initial public offering of its stock, which netted lower than expected proceeds. Rating Actions Senior Secured Term Loan - Assigned Ba3, LGD3-32% Ratings Rationale: Moody's review will assess the prospects for additional reduction of the company's debt and ongoing interest expense savings in helping the company grow its free cash flow. As well, the review will also address the potential future shareholder return initiatives which may affect further debt reduction. The review is expected to be completed by September 2013. In the event of the review concluding positively, CDW's corporate family rating would be upgraded by no more than one notch. What Could Change the Rating - Up Ratings could be upgraded if CDW's revenue and operating margins improve to a higher sustainable range (operating margins in mid to upper single digits) implying increased market share, continued favorable shift in product mix and/or a lower cost structure. An upgrade could also occur upon debt reduction following the IPO and further deleveraging, such that total adjusted debt to EBITDA leverage is expected to be sustained below 4.5x. What Could Change the Rating - Down Ratings could be downgraded if CDW experienced loss of customers/market share or pricing pressures due to increasing competition or a weak economic environment led to margin erosion and impaired interest coverage, reduced free cash flow generation and financial leverage sustained above 7x total adjusted debt to EBITDA. The principal methodology used in this rating was 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. COMMUNITY TOWERS: Says CIBC Should Litigate Claims Dispute ---------------------------------------------------------- Community Towers I, LLC, and its debtor-affiliates submitted an opposition to the motion to dismiss the Debtors' claim objections for want of prosecution filed by CIBC, Inc. The Debtors contend that CIBC seeks to obtain a windfall advantage by not having to actually litigate their claim in requesting the Court to simply dismiss the claims objection. CIBC is the holder of a first deed of trust on the Debtors' two building, 305,000 square foot office complex located at 111 West Saint John Street and 111 North Market Street, San Jose, California commonly known as the Community Towers On October 5, 2012, the Debtors filed objections to Claim Nos. 4, 5, 6 and 7 filed by CIBC. Subsequently, the Court entered an order that clarified that because a hearing on an objection to claim requires 30 days' notice, the Court would consider CIBC's claim in the context of plan confirmation but would not issue a final ruling on the allowability of such claim at the hearing on confirmation of the Debtors' Joint Plan of Reorganization, dated March 27, 2012, as modified, August 31, 2012. The Court held a two-day evidentiary hearing on confirmation of the Plan, on October 15 and 16, 2012. The only evidence in the record of the confirmation hearing on the value of the Debtors' property was an appraisal made by Donn Byrne of Colliers International, who opined that the property had a fair market value of $41 million as of October 31, 2011. Mr. Byrne has completed an updated appraisal which states, inter alia, Mr. Byrne's opinion that the Property was worth $46 million as of February 28, 2013. On January 25, 2013, the Court entered its order denying confirmation the Plan. Among other things, the confirmation denial order discusses in depth CIBC's claim and the Debtors' arguments why the claim is overstated. Ultimately, the Court found that CIBC is not entitled to default interest on its claim in the bankruptcy cases, and it estimated such claim at $37,234,279. On February 19, 2013, CIBC filed its second motion for stay relief requesting that the Court lift the automatic stay pursuant to 11 U.S.C. Sec. 362(d)(1) and 362(d)(3) so that it may "proceed with its rights and remedies as a secured creditor of the Debtors." After a hearing on March 5, 2013, the Court entered its order conditionally granting CIBC's second motion for stay relief increasing the adequate protection payments to be paid by the Debtors to CIBC and providing, inter alia, that the automatic stay provided under 11 U.S.C. Sec. 362(a) will be lifted if the Debtors fail to pay CIBC all amounts allowed in connection with its secured claims in the bankruptcy cases, by September 1, 2013. According to the Debtors, since the confirmation hearing, they have continued to operate their businesses and make adequate protection payments to CIBC required under the Conditional Stay Order (including full interest payments at the contract rate), while increasing the profitability of the business. The value of the property has increased significantly based upon the increase in occupancy by the Debtors' operations as well as continually improving market conditions. The Debtors also have committed extensive time to searching out alternate lenders for the property as well as potential buyers and investors. The Debtors have communicated several refinance opportunities directly to CIBC outside of counsel in an effort to reach a resolution without an according response. Moreover, the Debtors have been working diligently with existing and new counsel to complete an amended plan of reorganization that the Debtors believe will satisfy all requirements to be confirmable even if the Debtors do not sell or refinance the Subject Property. The Debtors, however, will require additional time beyond the Sept. 1, 2013 deadline set forth in the conditional stay order, to complete the plan confirmation process. Consequently, they will be filing a motion to request that the Court extend the automatic stay beyond such deadline. In opposing the motion to dismiss the Debtors' claim objections, the Debtors cited these reasons: a. The Motion Establishes No Basis For The Relief Requested Therein. The Debtors have not failed to appear at any hearing during the bankruptcy cases, much less any hearing on the Claims Objection, nor have they shown any indifference to proceeding b. Applicable Standards. CIBC's Motion fails to provide any applicable standard to dismiss the Claims Objection. There is no threat to the Court's management and control of its docket. In addition, the Debtors have compelling reasons for not noticing and litigating the Claims Objection at this time. They are focused on reorganizing for the benefit of the estates and all creditors, and litigating the Claims Objection immediately would be unnecessary and potentially a wasteful misuse of the estates' resources. c. Risk Of Prejudice Falls Solely on The Debtors. CIBC cannot demonstrate any prejudice it has suffered or will suffer because the Claims Objection has not already been finally determined CIBC only contends that it is prejudiced because its claim will not be determined by the Sept. 1, 2013 date established in the conditional stay order. The Debtors will be filing a motion to extend the automatic stay and the Sept. 1, 2013 deadline. In addition, there is no risk to CIBC for any alleged delay caused by the Debtors. The Debtors have made adequate protection payments to CIBC since August 2012 which amounts were increased in March 2013, and, moreover, the Subject Property continues to appreciate in value. Attorneys for the Debtors can be reached at: John Walshe Murray, Esq. Robert A. Franklin, Esq. Thomas T. Hwang, Esq. DORSEY & WHITNEY LLP 305 Lytton Avenue Palo Alto, CA 94301 Tel: (650) 857-1717 Fax: (650) 857-1288 E-mail: murray.john@dorsey.com franklin.robert@dorsey.com hwang.thomas@dorsey.com About Community Towers I Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N.D. Calif. Lead Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. Community Towers I disclosed $51,939,720 in assets and $39,479,784 in liabilities as of the Chapter 11 filing. In March 2013, the Court denied confirmation of the Debtors' Joint Chapter 11 Plan. Creditor CIBC Inc., voted against the Joint Plan and opposed confirmation contending that the Joint Plan: (1) improperly includes a third party release in violation of Section 524; (2) violates Section 1129(a)(11) because it is not feasible; and (3) is not fair and equitable to CIBC because the interest rate proposed to be paid is inadequate to compensate CIBC for the risk inherent in its loan to Debtors. The Debtors employed John Walshe Murray, Esq., at Dorsey & Whitney LLP as counsel, in substitution for Murray & Murray, A Professional Corporation. COOPER-BOOTH: Has Authority to Employ SSG as Investment Bankers --------------------------------------------------------------- Cooper-Booth Wholesale Company, L.P., and its debtor affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ SSG Advisors, LLC, as investment bankers. 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: Has Final Authority to Use Cash Collateral -------------------------------------------------------- Cooper-Booth Wholesale Company, L.P., and its debtor affiliates obtained final authority from Judge Magdeline D. Coleman of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to use Cash Collateral of PNC Bank, National Association, and PNC Equipment Finance and Zurich American Insurance Company to pay only approved expenses from July 10, 2013, until the termination date, which will be the earlier of Aug. 31, 2013, or the date upon which an event of default occurs. As adequate protection, the Banks are granted replacement liens on and security interests in all of the Debtors' property and an administrative expense claim pursuant to Section 503(b)(1) of the Bankruptcy Code. Zurich is also granted the same forms of adequate protection as the Banks. A full-text copy of the Final Cash Collateral Order with accompanying Budget is available for free at: http://bankrupt.com/misc/COOPERBOOTHcashcol0711.pdf Aris J. Karalis, Esq., Robert W. Seltzer, Esq., Dustin G. Kreider, Esq., at Maschmeyer Karalis P.C., in Philadelphia, Pennsylvania, represent the Debtors. Claudia Z. Springer, Esq., Derek J. Baker, Esq., Brian M. Schenker, Esq., at Reed Smith LLP, in Philadelphia, Pennsylvania, represent the Banks. Mort Branzburg, Esq., and Richard Beck, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadelphia, Pennsylvania, represent the Official Committee of Unsecured Creditors. Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, in Philadelphia, Pensylvania, represents Zurich. 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. CORNERSTONE HOMES: New York Homebuilder's Prepack Plan Approved --------------------------------------------------------------- Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that Cornerstone Homes Inc., won court approval of its pre-packaged reorganization plan that was accepted by more than 94 percent of unsecured creditors before filing for bankruptcy, according to a docket entry on the company's bankruptcy case website. According to the report, the company listed $18.6 million in assets and $36.2 million in debt in its bankruptcy petition. Unsecured noteholders, owed about $14.5 million, were the only class of creditors entitled to vote on the restructuring plan, as all other creditors will receive full payment. The report says that the noteholders will get a $1 million note with interest of a one year U.S. Treasury Bill plus 2 percent, to be paid within 10 years. The company intends to liquidate most or all of its properties during the 10 year period "so as to achieve maximum recovery for the creditors while avoiding a deleterious effect on the housing market." The report discloses that about 620 properties are pledged as collateral for lenders and the proceeds from any sale will go to repay them. The more than 100 unencumbered properties will likely be liquidated as well with proceeds going to fund distributions under the plan. About Cornerstone Homes Cornerstone Homes Inc., a homebuilder from Corning, New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-21103) on July 15, 2013, in Rochester alongside a reorganization plan already accepted by 96 percent of unsecured creditors' claims. The Debtor disclosed assets of $18,561,028 and liabilities of $36,248,526. Judge Paul R. Warren presides over the case. David L. Rasmussen, Esq., at Davidson Fink, LLP, serves as the Debtor's counsel. DAVIS HEALTH: Moody's Confirms 'B2' Rating & Negative Outlook ------------------------------------------------------------- Moody's Investors Service has confirmed the B2 long-term rating assigned to Davis Health System (WV). This action affects approximately $14.4 million of outstanding debt. The system is removed from under review for downgrade and the outlook is negative. Ratings Rationale: The confirmation of the B2 rating reflects improvement in Davis' liquidity position through interim FY 2013 following a steep drop at FYE 2012 due to operational disruptions from the system's new health IT system. The negative outlook is based on continued operating losses in FY 2013 that are well below budget, inpatient admission declines and the service area's weak demographics generating Davis's high reliance on government payers that negatively position future profitability. Strengths - Medicare designated sole community provider and only acute care hospital in Randolph County, WV with leading 70% market share (according to management-provided figures); market position is protected by State certificate of need law. - System froze defined benefit plan in FY 2006; as of December 31, 2012 the plan was terminated and substantially paid off with about $35,000 liability remaining as of FYE 2012. - Workforce is non-unionized. Challenges - Poor controls in place to prevent operational disruption with implementation of health IT during FY 2012; negative operating margins through five months FY 2013. - High dependence on government payers (Medicare (46%) and Medicaid (17%) combined represent 63% of gross revenues in FY 2012) with notable self-pay population (8% self-pay). - Weak service area demographics characterized by flat population growth and lower income levels and property values compared to state and national averages. - Admissions declines in FY 2012 and interim FY 2013 following multiple years of admissions variability despite protection from CON and sole community provider status. Outlook The negative rating outlook reflects the sizable operating loss in FY 2012 and the continuation of losses through five months of FY 2013, weak debt service coverage measures, and continued low liquidity position. There is also uncertainty about whether the hospital can improve performance given a history of volatility and a challenging payer mix and service area demographics. What could change the rating - UP? Growth and stability in inpatient and outpatient volume trends; ability to sustain improved performance for multiple years; substantial growth in liquidity and improved debt coverage measures. What could change the rating - DOWN? A decline or no improvement in operating performance; inability to meet debt covenants under terms of construction loan; decline in liquidity and debt coverage levels; an additional, significant debt issuance; loss in market share. The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. DEALER COMPUTER: Moody's Lowers Corp. Family Rating to 'B3' ----------------------------------------------------------- Moody's Investors Service lowered Dealer Computer Services, Inc. (dba Reynolds & Reynolds Company) corporate family rating to B3 from Ba2, and lowered the probability of default rating to B3-PD from Ba2-PD, due to a significant increase in debt. As part of the rating action, Moody's assigned a Ba3 rating to its proposed $2,325 billion first lien term credit facilities and a Caa1 rating to Reynolds' proposed $1,100 million second lien term loan. The company's ultimate parent will also raise $900 million through a PIK note, which Moody's does not rate. The rating outlook is stable. Rating actions: Corporate Family Rating downgraded to B3 from Ba2 Probability of Default downgraded to B3-PD from Ba3-PD First Lien Revolving Credit Facility Ba3, LGD-2, 22% First Lien Term Loans -- Ba3, LGD2, 22% Second Lien Term Loan -- Caa1, LGD4, 66% Outlook is stable Ratings Rationale: As part of a broader recapitalization of the company's balance sheet and capital payout to shareholders, Reynolds' controlling shareholder the Brockman trust (Spanish Steps) is selling over 20% ownership in the company to Centre College. The proposed transaction will increase Reynolds' debt by over $3.4 billion, including the $900 million PIK debt at the parent holding company. The high financial leverage, with adjusted debt to EBITDA expected to exceed 8.0 times at closing (about 6.5 times at the operating company level), and reduced interest coverage associated with the company's recapitalization expose the company to much greater interest rate risk and considerably reduced flexibility. Although the company has a leading position in providing auto dealership management software and counts on significant recurring revenue streams, the mature nature of its business leads to modest opportunities to delever through revenue and EBITDA growth. Therefore, rising interest rates may drain the company's cash generating capacity and its ability to delever through debt paydowns. Moreover, while the $900 million parent PIK note preserves the company's liquidity in the near term, Moody's believes that Reynolds will most likely pay out that note through additional debt raises at the rated entity. Moody's expects Reynolds to have good liquidity over the next twelve months, in large part due to expected free cash flow generation in the $280 million range. Moody's expects the company to maintain at least $100 million of cash and generate strong free cash flow. The company will have a $25 million revolving credit facility, which Moody's expects to be undrawn. The Ba3 rating on the proposed first lien senior secured credit facilities 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, 22%). The rating reflects the first priority lien on all property and assets. The Caa1 rating on the proposed second lien senior secured term loan reflects its second priority lien on all property and assets. Further, the term loans benefit from upstream guarantees of the borrower's present and future direct and indirect domestic subsidiaries. The stable rating outlook reflects the company's leading dealership management systems market share, the good revenue visibility and recurring nature of its software maintenance business and the importance of automotive services and DMS to the day-to-day operations of the automotive dealership industry. Ratings could be upgraded if Reynolds generates organic revenue growth, especially from the successful expansion of its products outside its traditional DMS business, expands margins, and maintains total adjusted debt to EBITDA to under 6.5 times (including the parent holdco PIK note and incorporating Moody's standard adjustments). Ratings could be lowered if customer and/or market share losses or interest rate swings result in revenue contraction, margin erosion, or lower free cash flow on a sustained basis. Total adjusted debt to EBITDA remaining above 8.0x (including the parent holdco PIK note) could also result in downward rating pressure. The principal methodology used in this rating was Global Business & Consumer Service Industry 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. The Reynolds and Reynolds Company, headquartered in Dayton, Ohio, is an automotive dealership computer services and forms management company. DEEP MARINE: Insurers Can't Invoke Indemnification in BHP Deal -------------------------------------------------------------- In the appellate case GLENN DUVAL, Plaintiff, v. NORTHERN ASSURANCE COMPANY OF AMERICA; MARKEL AMERICAN INSURANCE COMPANY, Defendants-Third Party Plaintiffs-Appellants, v. B H P BILLITON PETROLEUM DEEPWATER, INCORPORATED, Third Party Defendant-Appellee, Case No. 12-31102, the U.S. Court of Appeals for the Fifth Circuit concluded that defense, indemnification, and insurance obligations under a master services agreement run between the two parties involved in that agreement and are not enforceable by the third- party insurers. BHP Billiton Petroleum Deepwater, Inc., an energy exploration company, and Deep Marine Technology, Inc., a former oilfield service company, were parties to a 2006 Master Services Agreement where Deep Marine provided construction support vessels to BHP. Glen Duval is an employee of Wood Group/Deepwater Specialists, Inc. (another BHP contractor) who claims to have sustained injuries during an operation involving Deep Marine and BHP. In April 2008, Mr. Duval filed a negligence lawsuit against Deep Marine. Thereafter, Deep Marine sought defense, additional insured status and indemnity from BHP under the MSA. On Dec. 4, 2009, Deep Marine filed for Chapter 11 bankruptcy in the Southern District of Texas and the Duval suit was automatically stayed. In September 2010, the Bankruptcy Court allowed the Duval suit to proceed but enjoined Duval from any recovery against Deep Marine. The district court reopened the case and on Jan. 4, 2012, Duval amended his complaint to name Northern Assurance Company of America and Markel American Insurance Company (Underwriters), the protection and indemnity insurers of Deep Marine, as additional defendants. On Feb. 7, 2012, the Underwriters filed a third-party complaint against BHP, seeking to be full protected and indemnified by BHP in accordance with the MSA. The Underwriters and BHP filed cross- motions for summary judgment, each disputing whether the Underwriters could enforce BHP's contractual insurance, defense, and indemnity obligations to Deep Marine after Deep Marine's bankruptcy discharge. The district court granted BHP's motion for summary judgment, denied the Underwriters' motion for summary judgment, and dismissed the action with prejudice. The Underwriters timely appealed. On review, the Fifth Circuit affirmed the district court ruling. The Fifth Circuit's July 5, 2013 Order is available at http://is.gd/duaGIZfrom Leagle.com. About Deep Marine Headquartered in Houston, Texas, Deep Marine Technology Inc. -- http://www.deepmarinetech.com/-- was an independent subsea service provider to the Offshore Oil and Gas Industry. Deep Marine Holdings, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. S.D. Tex. Case No. 09-39314) on Dec. 4, 2009. Affiliates Deep Marine Technology Inc., Deep Marine 1, LLC, Deep Marine 2, LLC, Deep Marine 3, LLC, and Deep 4 Marine, LLC, also sought bankruptcy protection. The Debtors were represented by Bracewell & Guiliani, L.L.P. In its schedules, DMTI scheduled $91,060,850 in assets and $64,091,137 in debts. Deep Marine won approval of its Chapter 11 plan on June 2, 2010. The Plan confirmation included sale of the Company's four vessels to four buyers for a total of $94.8 million. Before the auction in May 2010, Oceaneering International Inc. was under contract to buy all four for $74.5 million. The other buyers are Seacor Marine LLC, Otto Marine Ltd. and Ezram LLC. The Plan provided for the creation of a liquidating trust and basically provides for a distribution of sale proceeds according to the priorities outlined in bankruptcy law. John Bittner was appointed as Liquidating Trustee. DETROIT, MI: Police, Fire Pensions Fail to Delay Bankruptcy ----------------------------------------------------------- Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that that Detroit's police and fire pensions lost a bid to delay the city's $18 billion bankruptcy when a federal judge ruled he has authority over the filing and will hold a hearing to determine how much protection the city gets as the case moves forward. U.S. Bankruptcy Judge Steven W. Rhodes on July 22 in Detroit set a hearing for July 24, granting the city's request for a quick court date to confirm protections granted when a municipality files under Chapter 9 of the U.S. Bankruptcy Code. According to the report, under the Code, the city and its officials are entitled to halt most court proceedings against them during the bankruptcy case. Judge Rhodes agreed to consider the city's request to extend the protection to unspecified "state entities." Pension officials are trying to use state court cases to force Governor Rick Snyder, a Republican, to withdraw his authorization for the bankruptcy filing, claiming he violated Michigan's constitution. The report notes that pension officials cited the July 19 ruling of Circuit Court Judge Rosemarie E. Aquilina in Lansing, who criticized Gov. Snyder for "overreaching" when he authorized Detroit's emergency manager to rush the city into bankruptcy court. The July 18 Chapter 9 filing came minutes before Judge Aquilina could rule on a bid by city workers and their pension funds to block the federal case. The report discloses that emergency manager Kevyn Orr had asked the court to hold a hearing today to confirm the city's right to remain in bankruptcy, which would protect Detroit and its officials from state-court and other legal actions during the Chapter 9 case. The pension systems argue that Orr's bankruptcy plan will cut pensions that are protected by Michigan's constitution. Should Mr. Orr push for such a reduction, Rhodes would need to decide whether Chapter 9 of the U.S. Bankruptcy code trumps state law, a state constitutional provision, both, or neither. A hearing scheduled for July 22 in Lansing on a related challenge was postponed until next week. Lawsuits BankruptcyData reported that the City of Detroit's retirees, workers and pension funds have filed three separate lawsuits in Michigan State Court, one of which is supported by the union of United Auto Workers. According to the BData report, the suits relate to the constitutionality of emergency manager Kevyn Orr's ability to access and reduce $3.5 billion in unfunded pension liabilities in his efforts to restructure the City's more than $18 billion debt load via the Chapter 9 filing. The U.S. Bankruptcy Court has maintained that it has the authority to halt the proceedings, and Orr is seeking a Bankruptcy Court order taking control of the three suits, the BData report said. The Bankruptcy Court scheduled a July 24, 2013 hearing on this matter; and Ingham County, Michigan Circuit Court Judge Rosemarie Aquilina also adjourned until July 29, 2013 her proceedings related to the same suits. At the Circuit Court adjournment hearing, Judge Aquilina reaffirmed her opinion that the suits should continue to be heard in State, not Bankruptcy Court -- asserting, "I don't think the constitution should be made of Swiss cheese. Once we erode it with one hole, there will be others," the report related. As previously reported, Judge Aquilina had issued a declaratory judgment asserting that the Chapter 9 filing was unconstitutional on the grounds that it would diminish or impair accrued pension benefits." Separately, the Bankruptcy Court also issued an administrative order governing media and public conduct, courtroom procedure and decorum for the proceeding. Among other directives, the order warns, "No conversations or disruptive gestures are permitted in the Courtroom...The United States Marshall and his Deputies shall be responsible for maintaining order and decorum in the Courtroom, overflow viewing areas, media room and the Courthouse. All orders given by the Marshal or his deputies shall be deemed orders of this Court and must be complied with immediately." California Cases Erin Coe of BankruptcyLaw360 reported that the California municipal bankruptcies of Stockton and San Bernardino will provide guideposts for Detroit as it navigates the eligibility process in its Chapter 9 case, but the Michigan city's ability to establish that it's eligible as a debtor is complicated by a state judge's finding last week that its bankruptcy petition was unconstitutional, according to experts. Jones Day Attorneys Abigail Rubenstein of BankruptcyLaw360 reported that the pressure is on for lawyers at Jones Day who will be shepherding the city of Detroit through its historic bankruptcy, but the firm is no stranger to large, complex restructurings, so it will have plenty of experience to draw on while helming the largest-ever Chapter 9 case. According to the report, if the embattled city manages to emerge from its bankruptcy financially sound, much of the credit will go to the Cleveland-based global law firm, whose bankruptcy clients have included the likes of Chrysler LLC, Dana Corp. and Hostess Brands. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Debtor is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. DETROIT, MI: Euro Banks Exposed to Chapter 9 Bankruptcy ------------------------------------------------------- The Wall Street Journal's David Enrich and Dow Jones Newswires' John Letzing report that Detroit's broken finances are intersecting with the troubled European banking industry, causing further distress for both the Motor City and its European lenders. According to the report, European banks bought a total of about $1 billion of the Detroit bonds, according to industry officials familiar with the transactions. According to the WSJ report, Detroit turned to UBS AG for help in 2005 to sell more than $1.4 billion of bonds, known as "certificates of participation," for the city. Detroit at that time was trying to find a way to replenish its depleted pension funds for municipal workers and its police and fire departments. The report relates a government agency in Munich charged with unwinding a nationalized German bank's assets is holding Detroit debt with a face value of about $200 million, according to a spokesman for the agency, FMS Wertmanagement. A nationalized Franco-Belgian lender, Dexia SA, is holding another large chunk, according to people familiar with the matter. The report also says UBS and Bank of America Corp.'s investment- banking unit have agreed to accept less than what they are owed under a hedging transaction that accompanied the bond deal and that had become a heavy weight around Detroit's neck. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection Thursday, July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. DETROIT, MI: Bankruptcy Raises Constitutional Issues ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Detroit's municipal bankruptcy that began July 18, the largest on record, will begin with a precedent-setting dispute about the limits of state and federal judicial power under the U.S. Constitution. According to the report, the city's Emergency Manager Kevyn Orr hurriedly received permission to file from Michigan Governor Rick Snyder for fear a state court judge would enjoin officials from filing. Within hours after bankruptcy, the state judge entered injunctions both directing the governor to withdraw the bankruptcy and enjoining the prosecution of the bankruptcy. The report notes that the state judge was acting at the request of pension funds and retirees who sued to block reductions in pension benefits. Detroit responded late in the day on July 19 by filing papers asking the bankruptcy judge in Detroit to enjoin the suits in state court and expand the so-called automatic stay to protect the governor and the state treasurer from being sued. Ordinarily, state courts lose power when a company files bankruptcy. In the case of a municipality, the issues aren't so clear in view of the U.S. Constitution. The report relates that because of powers reserved to the states in the Constitution, Chapter 9 confers fewer powers on bankruptcy courts than in typical corporate or individual bankruptcies. For example, the bankruptcy judge has no power to compel a municipality to sell property or decide how revenue is raised or spent. Likewise, states have power to decide when municipalities can file bankruptcy. Indeed, some states don't allow municipal bankruptcy. The power of the state court to halt bankruptcy might have been more clear were the injunction made before Detroit's Chapter 9 filing. Coming as it did after Detroit was in bankruptcy, the ability of the state court to require termination of the bankruptcy is less clear. The report discloses that Chapter 9 mandates a procedure where the bankruptcy judge decides if a municipality is eligible for bankruptcy. Detroit could be a case where a state court will at least attempt after the fact to decide if bankruptcy was properly filed. Traditional limitations on bankruptcy courts' powers over state courts also come into play. The typical view is that bankruptcy courts have power to enjoin parties to lawsuits while there is no power to enjoin the state court or the state judge. Detroit won't ask for a federal bailout, and holders of bonds can expect to be affected, the governor said. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Debtor is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. DETROIT, MI: Fitch Notes Implications of Ch. 11 Filing on GO Bonds ------------------------------------------------------------------ The recent proposal by the city of Detroit's emergency manager (EM) to group unlimited tax general obligation (ULTGO) and limited tax general obligation (LTGO) bonds together, as well as with employee benefit payments, as a single class of creditor is at odds with Fitch Ratings' prior expectations. If it is confirmed in bankruptcy, it will lead the agency to rethink the distinctions made between tax-supported ratings within Michigan and perhaps nationally. Currently Fitch rates ULTGOs and LTGOs either on par or, in some cases, where there appears to be a limited level of financial flexibility for the LTGOs, one notch apart. This distinction reflects Fitch's belief that an incremental margin of safety exists where there is the ability - and the legal obligation - to raise taxes for the specific purpose of repaying debt. This incremental strength is particularly pronounced if the property tax levy for the ULTGO bonds is separate and distinct from the entity's general tax levy, thereby limiting direct competition from other spending needs for general budget resources, which is the case for Detroit's ULTGOs. The EM's proposal does not recognize the voted, dedicated tax supporting the ULTGOs as a 'special revenue' as defined by Chapter 9 of the U.S. Bankruptcy Code, although the bankruptcy judge might; thus it is too early to reach any conclusions. The state of Michigan has implicitly supported the EM's view that there is no priority of payment for ULTGOs, LTGOs, or pension obligation bonds, let alone pension or even OPEB unfunded liabilities, the last generally offering more flexibility than pensions to adjust benefits and therefore spending. The strong oversight offered by Michigan's Act 436 and its predecessor emergency manager laws therefore appears to be offset by the weak support for bondholders in Detroit's case. Fitch's ratings of Michigan municipalities recognize this oversight but as in all local government ratings, do not assume the state will provide financial resources to avert a default. So far there has not been enough evidence from bankruptcy court actions that either confirms or refutes the notion that a property tax levied specifically for debt service on GO bonds and properly established through state statute is a 'special revenue'. However, the possibility that a bankruptcy judge might consider the bonds to be secured by special revenues could incentivize an entity to make payments. Fitch's distinction is made on the basis that outside of bankruptcy there is, as described above, some incremental flexibility to raise revenue specifically to pay debt service. Assuming the case is permitted to proceed, the bankruptcy judge's legal opinion might differ from the EM's, opining that property taxes for ULTGO bonds are indeed special revenue, or that the voted tax, which has consistently been levied, must be either used for its agreed-upon purpose or rebated to taxpayers. Fitch considers this to be a landmark bankruptcy case given the paucity of such cases and the city's size and historical prominence in the U.S. economy. Fitch's rating on Detroit's COPs is currently lower, at 'D', than the other tax-supported bonds at 'C' simply because the payment date on the COPs came up first. The 'C' rating indicates the expectation that the GO bonds will not be repaid in full and on time. DIAMOND RESORTS: S&P Revises Outlook to Positive & Affirms B- CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based timeshare company Diamond Resorts Parent LLC to positive from stable. At the same time, S&P affirmed all ratings on the company, including the 'B-' corporate credit rating. The outlook revision to positive reflects the expected repayment of high-cost debt following the company's IPO, and S&P's belief that Diamond may improve EBITDA coverage of interest expense to the mid-1x area and S&P's measure of lease-adjusted debt to EBITDA to below 7x in 2013, thresholds S&P believes is in line with a one notch higher rating on Diamond. S&P's measure of debt includes securitized debt and debt balances associated with the company's conduit and other receivables facilities, and S&P's measures of interest expense includes securitization interest expense. Diamond completed its IPO on July 19, 2013, generating $178 million in net proceeds (not counting the underwriters' overallotment). The company plans to use the proceeds to reduce high-cost debt balances, including $58 million outstanding under the Pacific Monarch Resorts Inc. (PMR) acquisition loan and approximately $50 million under the Tempus acquisition loan. The company used both loans to finance the acquisition of timeshare resort operations emerging from bankruptcy. Diamond also plans to use $48 million of the IPO proceeds to buy PMR Service Companies, which provides management services to resorts added to Diamond's network following the company's acquisition of PMR in May 2012. Diamond will also use $10 million of the proceeds to repurchase common stock warrants and may use up to $50 million to purchase a portion of the company's senior secured notes due 2018 from holders who accept the company's planned offer to repurchase them. S&P has not factored any senior secured notes repurchases into its expectation for credit measures. The positive outlook reflects S&P's belief that Diamond may improve EBITDA coverage of interest expense to the mid-1x area and debt to EBITDA to below 7x in 2013, thresholds S&P believes is in line with a one notch higher rating on Diamond. S&P would consider raising the corporate credit rating one notch to 'B' in this scenario, provided that Diamond's ongoing acquisition integrations translate into improved profitability and Diamond's liquidity profile remains adequate. An outlook revision to stable or a downgrade could result from a decline in EBITDA or deterioration in access to external liquidity sources over the intermediate term. DRYSHIPS INC: Ocean Rig Enters Into Skyros Deal with Total E&P -------------------------------------------------------------- DryShips Inc., an international provider of marine transportation services for drybulk and petroleum cargoes, and through its majority owned subsidiary, Ocean Rig UDW Inc., of offshore deepwater drilling services, on July 23 disclosed that Ocean Rig: -- Has signed definitive documentation with Total E&P Angola, following the previously announced Letter of Award, for its ultra deepwater drillship "Ocean Rig Skyros." The contract is for 5 wells or a minimum of 275 days for drilling offshore West Africa, with an estimated backlog of approximately $190 million, and is expected to commence upon delivery of the drillship from the shipyard, in October 2013. -- Has received a Letter of Award for its ultra deepwater drillship "Ocean Rig Skyros," from a major oil company. The Letter of Award is for a 6 year contract for drilling offshore West Africa, with an estimated backlog of approximately $1.3 billion. The Letter of Award is subject to completion of definitive documentation and receipt of regulatory approvals. The contract is expected to commence in direct continuation of the previous contract before the first quarter of 2015. As a result of this LOA, as of July 23, Ocean Rig's total contracted backlog (including LOAs) stands at about $6.1 billion, primarily with investment grade or strong counterparties. About DryShips Inc. Headquartered in Athens, Greece, DryShips Inc. (NASDAQ: DRYS) is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW Inc., DryShips owns and operates 10 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drillships, 3 of which remain to be delivered to Ocean Rig during 2013 and 1 is scheduled for delivery during 2015. DryShips owns a fleet of 46 drybulk carriers (including newbuildings), comprising of 12 Capesize, 28 Panamax, 2 Supramax and 4 Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of about 5.1 million tons, and 10 tankers, comprising 4 Suezmax and 6 Aframax, with a combined deadweight tonnage of over 1.3 million tons. The Company reported a net loss of US$288.6 million on US$1.210 billion of revenues in 2012, compared with a net loss of US$47.3 million on US$1.078 billion of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed US$8.878 billion in total assets, US$5.010 billion in total liabilities, and shareholders' equity of US$3.868 billion. Going Concern Doubt Ernst & Young (Hellas), in Athens, Greece, expressed substantial doubt about DryShips Inc.'s ability to continue as a going concern, citing the Company's working capital deficit of US$670 million at Dec. 31, 2012, and in addition, the non- compliance by the shipping segment with certain covenants of its loan agreements with banks. As of Dec. 31, 2012, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. In addition, as of Dec. 31, 2012, the shipping segment was in breach of certain financial covenants, mainly the interest coverage ratio, contained in the Company's loan agreements relating to US$769,098,000 of the Company's debt. As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to US$941,339,000 as current at Dec. 31, 2012. EASTMAN KODAK: BNY Mellon Seeks Estimation of Claims ---------------------------------------------------- The Bank of New York Mellon asked U.S. Bankruptcy Judge Allan Gropper to temporarily allow each of its pre-bankruptcy claims in the amount of $2,000 for purposes of voting on Eastman Kodak Co.'s Chapter 11 reorganization plan. The bank oversees the trusts, which were formed to hold the assets of the Kodak employees' investment plan and retirement plan sponsored by the company, and another pension plan sponsored by its subsidiary, Qualex Inc. BNY Mellon's claims stemmed from a trust agreement it entered into with Qualex, and two separate trust agreements with Kodak. The claims were filed against the companies as "unliquidated and contingent." A court hearing is scheduled for August 20. Objections are due by August 9. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. EASTMAN KODAK: Proposes to Assume Over 1,700 Contracts ------------------------------------------------------ Eastman Kodak Co. proposed to take over more than 1,700 contracts as part of its Chapter 11 reorganization plan. A list of the contracts is available for free at http://is.gd/R6ejAO The company proposed to pay a total of $12,342,606 to cure the defaults under the contracts. The deadline for filing objections to the assumption of the contracts or the proposed cure amounts is July 29. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. EASTMAN KODAK: Proposes to Assume and Assign 36 Contracts to RED ---------------------------------------------------------------- Eastman Kodak Co. said it will assume and assign 36 contracts to RED-Rochester LLC as part of the sale of its utility operations at Eastman Business Park to the energy firm. The deadline for filing objections to the proposed cure amounts under the contracts is July 29. The contracts are listed at http://is.gd/ZOA5iA Kodak sold its utility operations at Eastman Business Park, a 1,200-acre technology and industrial complex located in Rochester New York, for $8.5 million. U.S. Bankruptcy Judge Allan Gropper approved the sale on January 18, 2013. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. EDISON MISSION: Court Denies R. Klossing's Motion to Lift Stay -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois denied the motion of Ronald Klossing for relief from the automatic stay in order to permit Movant to pursue his case against the Debtor to the extent of his insurance coverage. The Movant's claim involves a personal injury cause of action against Edison Energy, et al. On Aug. 20, 2011, the Movant fell into an open manhole owned and maintained by the Debtor that was hidden by vegetation. The Movant's claim is to be satisfied with proceeds coming only from the insurance carrier. Movant waives any excess claim he may have against the assets of the Debtor. 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. EDISON MISSION: Powerton Lease Decision Deadline Moved to Sept. 30 ------------------------------------------------------------------ On July 17, 2013, the U.S. Bankruptcy Court for the Northern District of Illinois entered an amended order extending the time by which Edison Mission Energy, et al., must assume or reject the Powerton and Joliet Facility Leases and related agreements, through Sept. 30, 2013, in accordance with the Modified Extension Term Sheet. A copy of the Modified Extension Term Sheet is available at: http://bankrupt.com/misc/edisonmission.doc1020.pdf 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. EDISON MISSION: Wins OK for JPMorgan as Fin'l Co-Advisor -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Edison Mission Energy, et al., to employ J.P. Morgan Securities, LLC, as the Debtors' financial co-advisor effective as of Feb. 17, 2013, the date of the order, to explore a potential sale of the business. As reported in the July 9, 2013, J.P. Morgan will work side-by- side with Perella Weinberg Partners to ensure that value and stakeholder recoveries are maximized. Perella and J.P. Morgan will coordinate the services they are providing to the Debtors to ensure that there is no unnecessary duplication of services by either firm during the pendency of these Chapter 11 cases. J.P. Morgan will, among other things: a. assist the Debtors in preparing a memorandum (based entirely on information supplied by the Debtors) for distribution to potential purchasers, describing the assets, their business, and financial condition; b. assist the Debtors in identifying and contacting potential purchasers to ascertain their interest in a transaction; c. advise and assist the Debtors in their negotiation of the financial aspects of a transaction; and d. appear and testify in court proceedings related to any Section 363 bankruptcy sale process in connection with obtaining court approval of a transaction. J.P. Morgan will be paid a progressive fee with respect to each transaction payable upon the closing of a transaction, in an amount equal to the percentage of cumulative consideration, only to be received for transactions that are successfully completed, as set forth below: i. 0.9500 percent and 0.5625 percent for consideration of $0 and $500 million, respectively; ii. 0.5625 percent and 0.4575 percent for consideration of $500 million and $750 million, respectively; iii. 0.4575 percent and 0.4000 percent for consideration of $750 million and $1 billion, respectively; iv. 0.4000 percent and 0.3875 percent for consideration of $1 billion and $1.25 billion, respectively; v. 0.3875 percent and 0.3750 percent for consideration of $1.25 billion and $1.75 billion, respectively; vi. 0.3750 percent and 0.3450 percent for consideration of $1.75 billion and $2.25 billion, respectively; vii. 0.3450 percent and 0.3250 percent for consideration of $2.25 billion and $3.25 billion, respectively; viii. 0.3250 percent and 0.3100 percent for consideration of $3.25 billion and $3.5 billion, respectively; ix. 0.3100 percent and 0.3000 percent for consideration of $3.5 billion and $3.75 billion respectively; and x. 0.3000 percent for consideration above $3.75 billion. The Transaction Fee will be equal to $2 million if the coal-fired generation assets are the only assets sold. If, in lieu of a transaction, the Debtors complete an alternative transaction involving the assets with the assistance of J.P. Morgan, J.P. Morgan and the Debtors will negotiate in good faith regarding the appropriate form and amount of compensation for J.P. Morgan, taking into account, among other things, the results obtained and the custom and practice among investment bankers acting in similar transactions. If the Debtors receive any payment from another person (including any payment as reimbursement of expenses) following or in connection with the termination, abandonment, or failure to occur of any proposed transaction, then the Debtors will pay to J.P. Morgan a fee in an amount equal to 25 percent of the break-up fee. In no event will any break-up fee portion exceed the amount of the Transaction Fee that would have been payable to J.P. Morgan if the transaction had been consummated. 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. EDISON MISSION: Court Denies Lindblad Motion for Relief from Stay ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois denied the motion of Lindblad Construction Company of Joliet, Inc., for relief from the automatic stay. Lindblad filed the motion for relief from the automatic stay to allow it to prosecute its cross-claim for contribution against Debtor Midwest Generation, LLC, solely to the extent of insurance coverage, relative to litigation filed in the Circuit Court of Cook County captioned, Cesario v. Antartic Mechanical Services, Inc., case number 2009 L 014452. According to papers filed with the Court, Lindblad is not seeking recovery from Midwest Generation personally or from any assets of the bankruptcy estate, including any deductible or self insured retention relating to Midwest Generation's insurance coverage. Instead, Lindblad seeks a modification of the automatic stay solely for the purposes of allowing it to proceed against Midwest Generation in the Cesario case to the extent there is insurance coverage. By way of background, on Sept. 20, 2011, Alan Cesario filed suit against Midwest Generation in the Cesario case, alleging claims for negligence on a construction project in Chicago, Illinois, which allegedly caused Alan Cesario's personal injury on Oct. 26, 2009. On June 15, 2012, Lindblad filed a cross-claim for contribution against Midwest Generation. Lindblad was a contractor for work being done at the Midwest Generation Crawford Generating Station. Cesario was an employee of Advantage Ironworking Systems, a subcontractor on the Midwest Generation Crawford Generating Station coal hopper project. 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. EDISON MISSION: Tyche Appeals Order Denying Lift Stay Motion ------------------------------------------------------------ Tyche Power Partners LLC has appealed to the United States District Court for the Northern District of Illinois from the following order of the Bankruptcy Court: Order on Tyche Power Partners' motion for relief from the automatic stay (Dkt. No. 737 in the Bankruptcy Case) and the motion to dismiss, or in the alternative, for abstention and relief from the automatic stay (Dkt. No. 14 in the Adversary Proceeding)(Dkt. No. 1013 in the Bankruptcy Case and Dkt. No. 30 in the Adversary Proceeding). The Bankruptcy Court's July 15, 2013 Order denied Tyche Power's motion to dismiss/abstain as well as the motion to lift the automatic stay. A copy of the Order is available at: http://bankrupt.com/misc/edisonmission.doc1013.pdf A copy of the Statement of Issues on Appeal and Designation of Items to be Included in the Record on Appeal of Tyche Power Partners LLC is available at: http://bankrupt.com/misc/edisonmission.doc1026.pdf 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. EMERITO ESTRADA: Hires Alexis Fuentes as Counsel ------------------------------------------------ Emerito Estrada Rivera Isuzu De PR Inc. sought and obtained approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Alexis Fuentes-Hernandez, Esq., as counsel. The Debtor engaged Mr. Fuentes-Hernandez, as its counsel on the basis of a $13,000 retainer, which has been advanced by the Debtor's principals, against which the counsel will bill on the basis of $250 per hour, plus expenses, for work performed or to be performed by him. Mr. Fuentes-Hernandez attests that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, serves as counsel. The Debtor's sole asset is a real property worth $16.5 million. It has $8.68 million in liabilities, of which $8.1 million is secured. EXIDE TECHNOLOGIES: Committee Taps Lowenstein Sandler as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Exide Technologies asks the U.S. Bankruptcy Court for permission to retain Lowenstein Sandler LLP as counsel. The firm's rates are: Professional Hourly Rates ------------ ------------ Partners of the Firm $500 to $985 Senior Counsel and Counsel $385 to $685 Associates $275 to $480 Paralegals and Assistants $160 to $270 The Committee believes the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. EXIDE TECHNOLOGIES: Panel Retains Zolfo Cooper as Fin'l Advisors ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Exide Technologies asks the U.S. Bankruptcy Court for permission to retain Zolfo Cooper, LLC as bankruptcy consultants and financial advisors. The firm will, among other things, provide these services: a. assist counsel to the Committee in support of the financial elements of various Court pleadings filed throughout the chapter 11 case; b. monitor the Debtor's cash flow and operating performance; and c. analyze and comment on operating and cash flow projections, business plans, operating results, financial statements, other documents and information provided by the Debtor/Debtor's professionals, and other information and data pursuant to the Committee's request. Zolfo Cooper charges based on actual hours expended to perform its services at standard hourly rates established for each employee, as adjusted semi-annually. The billing rates for professionals who may be assigned to this engagement in effect as of January 1, 2013, are as follows: Professional Rates ------------ ----- Managing Directors $800 - $895 Professional Staff $265 - $780 Support Personnel $55 - $310 The Committee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. EXIDE TECHNOLOGIES: Panel Hiring Morris Nichols as Co-Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Exide Technologies asks the U.S. Bankruptcy Court for permission to retain Morris, Nichols, Arsht & Tunnell LLP as co counsel. The firm will, among other things, provide these services: a) advise the Committee with respect to its rights, duties, and powers in this case; b) assist and advise the Committee in its consultations with the Debtor relative to the administration of this case; and c) assist the Committee in analyzing the claims of the Debtor's creditors in negotiating with such creditors. The firm's rates are: Professional Rates ------------ ----- Partners $515 to $820 Associates $285 to $510 Paraprofessionals $225 to $285 Case Clerks $140 The Committee believes the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. EXIDE TECHNOLOGIES: $500-Mil. DIP Financing Gets Court Approval --------------------------------------------------------------- Exide Technologies on July 24 disclosed that it has received final Bankruptcy Court approval of its $500 million debtor-in-possession (DIP) financing provided by JPM Chase and a group of lenders to whom the DIP financing was syndicated. On June 10, Exide Technologies filed a voluntary petition for reorganization pursuant to U.S. federal restructuring laws in the District of Delaware. On June 11, 2013, the Court granted interim approval of access of up to $395 million of the DIP financing facility. The final approval provides the Company with access to the remaining $105 million which, along with the previously released funds under the DIP financing, provides the Company with liquidity to maintain its operations, pay employees and purchase goods and services. "We are very pleased to have arranged financing that is sufficient to enable us to continue operations uninterrupted while we proceed with our restructuring," said James R. Bolch, Exide's President and Chief Executive Officer. "We are grateful for the support of our lenders and the confidence they have displayed in Exide by meeting our funding needs." Peg Brickley writing for Dow Jones' DBR Small Cap reported that Exide reached a deal with its official creditors committee to ease court approval of a $500 million bankruptcy loan but still faces opposition from regulators who say the deal is a danger to the public. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. Robert A. DeAngelis, the U.S. Trustee for Region 3, appointed seven creditors to serve in the Official Committee of Unsecured Creditors in the Debtor's case. EXTENDED STAY: Deutsche Bank, Goldman and JPMorgan for IPO ---------------------------------------------------------- The Wall Street Journal's Craig Karmin and Mike Spector report that Extended Stay America Inc. on Monday filed plans to sell shares to the public, and has enlisted Deutsche Bank AG, Goldman Sachs Group Inc., and J.P. Morgan Chase & Co. to work on the offering. The number of shares to be offered and the price range for the offering haven't been determined, the company said Monday. People familiar with the matter told The Wall Street Journal late Sunday the IPO could come sometime toward the end of this year. WSJ relates a person familiar with the hotel company said it has equity valued between $3 billion and $4 billion. Proceeds from the IPO will go toward retiring some of the company's $3.6 billion in debt, the people familiar with the plans said. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-13764) on June 15, 2009. Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. FISHER ISLAND: Appeal From Fee Orders Dismissed as Untimely ----------------------------------------------------------- At the behest of James S. Feltman, the Court-appointed examiner in the involuntary Chapter 11 cases of Fisher Island Investments, Inc., Mutual Benefits Offshore Fund, Ltd., and Little Rest Twelve, Inc., Bankruptcy Judge A. Jay Cristol dismissed as untimely the appeal taken by the petitioning creditors from the Court's fee orders. The Petitioning Creditors -- 19 SHC, Corp, 601/1700 NBC LLC, Solby+Westbrae Partners, Ajna Brands, Inc., Axafina, Inc., and Oxana Adler LLM -- filed Involuntary Chapter 11 Petitions in the Bankruptcy Court against each of the Alleged Debtors on March 17, 2011. The filing of the involuntary petitions by the Petitioning Creditors has spawned over two years of contentious litigation between and among the two groups of Alleged Debtors and the Petitioning Creditors. Given the extreme complexities of these cases and the seriousness of the allegations involved, the Court proposed, and the parties agreed and supported, the appointment of a chapter 11 examiner. In accordance with the Court's directives, the Examiner and his professionals, among other things, investigated and examined certain matters relating to ownership and financial affairs of the Alleged Debtors, including the claims of the Petitioning Creditors. The Examiner set forth his findings and conclusions in a Report of Examiner that was filed with the Court more than 18 months ago. Although the Court has allowed the fees and expenses of the Examiner and his professionals, the Examiner and his professionals have been compensated for only approximately 33.3% of the allowed fees and expenses. On October 5, 2012, after notice and a hearing, the Court entered an Order Directing Payment of Fees and Expenses of Examiner and Examiner's Professionals, which directed that on or before November 1, 2012 (i) the Redmond Alleged Debtors, jointly and severally, pay to Greenberg Traurig's trust account the sum of $113,917.01;5 (ii) the Zeltser Alleged Debtors, jointly and severally, pay to Greenberg Traurig's trust account the sum of $363,917.01; and (iii) the Petitioning Creditors, jointly and severally, pay to Greenberg Traurig's trust account the sum of $363,917.01. Neither the Petitioning Creditors nor the Zeltser Alleged Debtors have complied with the Fee Order. The Fee Order is a "final" order from which an appeal may be taken. On October 15, 2012, the Petitioning Creditors filed Notices of Appeal of the Fee Order. The Fee Order has not been stayed pending appeal and the appeal has been fully briefed before the District Court. As a result of the Petitioning Creditors' (and the Zeltser Alleged Debtors') continued failure to comply with the terms of the Fee Order, the Examiner filed a Motion for Order to Show Cause Why Final Judgment and Sanctions Should Not be Entered. After notice and a hearing at which the Petitioning Creditors actively participated, on March 8, 2013 the Court entered an Order Directing Petitioning Creditors and Zeltser Alleged Debtors to Show Cause Why Final Judgment and Sanctions Should Not be Entered Against Them.9 The Court conducted the show cause hearing on March 12, 2013. The Petitioning Creditors actively participated in the show cause hearing. On May 15, 2013, the Court issued, among others, the following orders and final judgments in connection with the Show Cause Motion: "a) Memorandum Opinion and Order Entering Final Judgment Against Each of the Petitioning Creditors, Jointly and Severally; and b) Final Judgment against the Petitioning Creditors." The Petitioning Creditors filed Notices of Appeal of the Petitioning Creditor Orders and Judgments on June 11, 2013 -- 27 days after their entry and 13 days after the appeal deadline. A copy of the Court's July 12, 2013 Memorandum Opinion and Order is available at http://is.gd/nwwGKufrom Leagle.com. About Fisher Island Investments Solby+Westbrae Partners; 19 SHC Corp.; Ajna Brands Inc.; 601/1700 NBC LLC; Axafina Inc.; and Oxana Adler, LLM, filed an involuntary Chapter 11 petition against Miami Beach, Florida-based Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047) on March 17, 2011. On the same date, involuntary Chapter 11 petitions were also filed against the Company's affiliates, Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061). Judge A. Jay Cristol presides over the case. The case was previously assigned to Judge Laurel M. Isicoff. Petitioning creditors are represented by Craig A. Pugatch, Esq., and George L. Zinkler, Esq., at Rice Pugatch Robinson & Schiller, P.A., 101 NE 3 Ave. Suite 1800, Fort Lauderdale FL 33301. John F. O'Sullivan, Esq., at Hogan Lovells US LLP, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,, and Terrance A. Dee, Esq., at DiBello, Lopez & Castillo, P.A., represent Alleged Debtor Fisher Island Investments, Inc., as counsel. Donald F. Walton, the U.S. Trustee for Region 21, appointed James S. Feltman as an examiner in the involuntary cases. Greenberg Traurig, P.A., serves as counsel for the examiner while Leshaw Law, P.A., is the co-counsel. FOOT LOCKER: Moody's Changes Outlook on 'Ba2' CFR to Positive ------------------------------------------------------------- Moody's Investors Service changed Foot Locker Inc.'s ratings outlook to positive from stable. Concurrently, Moody's affirmed all of Foot Locker's ratings including the Ba2 Corporate Family Rating, the Ba2-PD Probability of Default rating, and its Ba3 senior unsecured notes rating. The company's Speculative Grade Liquidity rating of SGL-1 was also affirmed. The outlook revision to positive reflects Moody's expectation that Foot Locker's credit metrics and operating performance will continue to improve over the next 12-18 months. For the past several years, Foot Locker has surpassed its expected operating performance. The positive outlook also considers consistently positive same store sales growth and expanding operating margins that are expected to continue to contribute improvement in credit metrics. Notably, Moody's anticipates the company's lease adjusted debt leverage to be around 3.8 times for fiscal 2013 (ending February 2014) versus 4.5 times in fiscal 2012. Furthermore, Foot Locker's European operations have proved resilient in the midst of difficult macroeconomic conditions. Given the company's track record of exceeding its long term financial goals, Moody's expects Foot Locker to continue to grow its sales and EBITDA, and make good progress toward its new financial targets. "Should Foot Locker maintain positive same store sales momentum and meaningfully improve profitability, such that debt leverage is sustained below 4.0 times, the company's Corporate Family rating could be upgraded to Ba1," commented Tiina Siilaberg, Assistant Vice President at Moody's. The following rating actions were taken: Corporate Family Rating, affirmed at Ba2; Probability of Default Rating, affirmed at Ba2-PD; $132 million Senior Unsecured Notes, affirmed at Ba3 (LGD4, 65%); Speculative Grade Liquidity Rating, affirmed at SGL-1. Ratings Rationale: Foot Locker's Ba2 Corporate Family rating is supported by its moderate debt leverage with debt/EBITDA expected to be at 3.8x in fiscal 2013 (ending February 2014), very good liquidity, a well- recognized brand name, meaningful scale and geographic diversification. Constraining the rating are Foot Locker's exposure to Europe (roughly a fifth of its sales) where macroeconomic concerns persist, its significant fashion risk as a specialty retailer, the seasonality of its operations and high vendor concentration and management's practice of returning cash to shareholders through dividends and share repurchases. As a result of the company's narrow focus on athletic footwear and apparel, Foot Locker is susceptible to changing fashion trends and its earnings and cash flow from operations are heavily reliant on the fourth quarter holiday selling season through the spring basketball season. The company's lack of supplier diversification raises its susceptibility to unfavorable changes in vendor terms. The positive outlook reflects Moody's expectation for a continued upward trajectory in same store sales with sustained margin improvement. The positive outlook also anticipates that the company will maintain a very good liquidity profile despite its shareholder friendly policies. Ratings could be upgraded if the company is able to show sustained improvement in EBIT margins and continue its trend of positive comparable store sales growth. Specifically, an upgrade will require Moody's adjusted debt/EBITDA below 4.0 times and EBITA/interest expense above 3.5 times for a sustained period while maintaining very good liquidity. In view of the positive outlook, ratings are unlikely to be downgraded in the near term. The outlook could revert back to stable if same store sales turn negative or EBIT margins decline. Material negative variances in earnings or the fundamental operating environment combined with a significant deterioration in liquidity could lead to a ratings downgrade, as could more aggressive financial policies such as debt-financed share repurchases or acquisitions. Specifically, ratings could be downgraded if debt/EBITDA is sustained above 5.5 times. The principal methodology used in rating Foot Locker, Inc. 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. Foot Locker, Inc. is a specialty athletic retailer operating about 3,300 stores in 23 countries in North America, Europe, and Australia as well as through its direct-to-customer websites and catalogs. Banners include Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports, CCS and Eastbay. Revenues for the last twelve months ended May 4, 2013 were approximately $6.2 billion. GENERAL CERAMICS: Ch. 11 Buyer Targets Insurers for Cleanup Costs ----------------------------------------------------------------- Martin Bricketto of BankruptcyLaw360 reported that Haskell Properties LLC has revived claims against insurers including Hartford Accident and Indemnity Co. for the cost of cleaning up a contaminated site in New Jersey, arguing that the carriers are liable based on policies covering the bankrupt company from which Haskell acquired the parcel. According to the report, Haskell last year launched a near- identical suit in federal court against even more insurers allegedly tied to the property that General Ceramics Inc. once owned at 16 First Avenue in Haskell, N.J., but the case was dismissed in May. General Ceramics Inc., a New Jersey-based subsidiary of Tokuyama Corp., a Japanese chemical maker, filed for chapter 11 protection in 1999. Tokuyama bought the U.S. electronics parts maker in 1989, but the unit has suffered from a drop in orders from the U.S. defense industry. GIBSON BRANDS: S&P Assigns 'B' Rating to $200MM Sr. Secured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Nashville, Tenn.-based Gibson Brands Inc. The outlook is stable. "At the same time, we assigned our 'B' issue-level rating to Gibson's proposed $200 million senior secured notes due 2018. The recovery rating is '4', indicating our expectation for average (30% to 50%) recovery for lenders in the event of a payment default. The ratings on the proposed notes are subject to a review of final documentation. We understand that Gibson will use the net proceeds from the notes offering to repay existing debt balances, including those used to fund the recently completed acquisition of Japan-based TEAC Corp. The company will also have a $75 million asset-based revolving credit facility (ABL, unrated) in its pro forma capital structure, undrawn at close," S&P said. The ratings on Gibson reflect S&P's view that the company's financial risk profile is "highly leveraged" and that the business risk profile is "vulnerable." Key credit factors in Gibson's business risk profile include its narrow business focus, customer concentration, the discretionary nature of its products, the highly competitive musical instruments industry in which it operates, and possible integration risk of its recent acquisitions. Additionally, S&P considered the company's good market positions, its well-recognized brand names, and the geographic diversity of its sales. Pro forma for the refinancing and the recently completed acquisition of a controlling interest of TEAC in May 2013 (which are fully consolidated in S&P's credit metrics), it estimates that credit measures as of the 12 months ended March 31, 2013, have weakened. Pro forma for this transaction, Gibson's estimated ratio of adjusted debt to EBITDA is about 5.8x for the 12 months ended March 31, 2013, as compared with 3.7x before this refinancing and recent acquisitions. The pro forma ratio is above the indicative leverage ratio for a highly leveraged financial risk profile of greater than 5x. S&P also estimates that the pro forma ratio of adjusted funds from operations to total debt is about 12%, which is in near S&P's indicative ratio of 12% or less for a highly leveraged financial risk profile. "We believe Gibson's credit metrics will improve but remain highly leveraged because of the weak economy, particularly in Europe and Japan, and continuing margin pressure from high input costs," said Standard & Poor's credit analyst Stephanie Harter. "We also believe that the company will maintain adequate liquidity, effectively integrate its recent acquisitions, and reduce leverage slightly over the next 12 months with EBITDA growth from recent acquisitions." HARBINGER GROUP: Unresolved Civil Actions Bring Uncertainty ----------------------------------------------------------- Moody's says SEC's failure to approve Falcone's settlement continues the uncertainty for Harbinger Group Moody's said Harbinger Group's announcement on July 18 that the Securities and Exchange Commission voted not to approve the previously disclosed agreement in principle between the enforcement staff of the SEC and the HCP Parties (Harbinger Capital and Philip Falcone, but not Harbinger Group) regarding the settlement of two civil actions continues the uncertainty associated with this investigation. Had the commission approved the agreement, it would have been positive for Harbinger Group (HRG), but still not enough to alter its B2 Corporate Family Rating or stable outlook. Located in New York City, Harbinger Group is a holding company whose principal focus is to acquire or enter into combinations with businesses in diverse segments. The company's two operating subsidiaries are Spectrum Brands (B1) and F&G Insurance (Ba1). Harbinger Group also has a 74.5% total equity interest in a limited partnership (EXCO Partnership), which it acquired in March 2013, that owns EXCO Resources' (B1) conventional oil and natural gas assets in West Texas. The company generated approximately $80 million in revenue (dividends received) for the twelve months ending March 31, 2013. Revenues pro forma for the EXCO partnership will be around $120 million. The principal methodologies used in rating Harbinger Group was Moody's Global Packaged Goods Industry methodology published in December 2012, Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011, Global Independent Exploration and Production Industry Methodology published in December 2011 and Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. HI-WAY EQUIPMENT: Has Final OK for UpShot as Claims Agent --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized, on a final basis, Hi-Way Equipment Company LLC to employ UpShot Services LLC as noticing, claims and balloting agent. Hi-Way Equipment Company LLC filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-41498) on April 1, 2013. Charles W. Reeves, Jr., signed the petition as chief restructuring officer. Gardere Wynne Sewell, LLP, in Dallas, Texas, serves as the Debtor's counsel. The Debtor estimated assets and debts of at least $10 million. Shannon, Gracey, Ratliff & Miller represents the Official Committee of Unsecured Creditors as counsel. Hi-Way Equipment has been providing rental and sales of equipment since 1948. In 2008, Hi-Way Equipment acquired Equipment Support Services, Inc. As part of that acquisition, Hi-Way Equipment expanded to become a dealer of Case and Case IH equipment through CNH America LLC. With the acquisition of ESS, Hi-Way Equipment acquired ESS' subsidiaries: CDI Equipment, Ltd., Carruth-Doggett Industries Partners Acquisition, LLC, Future Equipment Holdings, LLC, Future Equipment Partners, LLC, Equipment Support Services, Inc., ESS Acquisition LLC, Carruth-Doggett Industries Holdings Acquisition, LLC, and Southern Power Acquisition, Inc. In 2011, Hi-Way Equipment merged with the Subsidiaries and Hi-Way Equipment was the sole surviving entity. Hi-Way Equipment serves as the non-exclusive dealer of Case and Case IH equipment in numerous counties across Texas. HIGHWAY TECHNOLOGIES: Sec. 341 Meeting Continued Sine Die --------------------------------------------------------- The U.S. Trustee has yet to set a date for a continued meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 cases of Highway Technologies Inc. and affiliate HTS Acquisition Inc. Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to 13-11326) on May 22 to conduct an orderly liquidation. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Debtors. Imperial Capital, LLC, serves as financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hillman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. HIGHWAY TECHNOLOGIES: Can Employ Pachulski & Imperial Capital ------------------------------------------------------------- Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought and obtained approval from the Bankruptcy Court to employ Pachulski Stang Ziehl & Jones LLP as their bankruptcy counsel and Imperial Capital, LLC, as financial advisor. The principal attorneys and paralegals at PSZ&J designated to represent the Debtors are: Personnel Hourly Rate --------- ----------- Richard M. Pachulski $995 Debra I. Grassgreen $875 Bruce Grohsgal $750 Maria A. Bove $645 John W. Lucas $555 Kathleen F. Finlayson $295 Kati L. Suk $235 PSZ&J received payments totaling $375,000 during the year prior to the Petition Date in connection with its prepetition representation of the Debtors. Imperial will, among other things, provide analysis of the Debtors' operations, provide financial valuation, assist in developing a restructuring plan, and assist in any asset sales. Imperial will receive a monthly advisory fee of $150,000 per month for the first 2 months and $100,000 per month thereafter. In the event of a restructuring, Imperial will earn a restructuring fee equal to 5 percent of the aggregate of all consideration received by the Debtors. In the event of a sale of the assets, Imperial will be entitled to a sale transaction fee under these terms: * If the Company files a notice pursuant to a sale procedures motion to approve an intact branch sale within 45 days of the Petition Date, the company will be charged 7.5% on the gross proceeds, which amount will be payable at the applicable closing. In exchange for Imperial working with Hilco Industrial, LLC to finalize any branch sale, Imperial and Hilco will split the transaction fee. * If the Company files a notice pursuant to a sale procedures motion to approve a bulk sale within 45 days of the Petition Date, Hilco will be entitled to charge an industry standard buyer's premium of 15 percent for machinery and equipment that is sold. In exchange for Imperial working with Hilco to finalize any such sale, Imperial will be entitled to 25 percent of the buyer's premium collected by Hilco. To the best of the Debtor's knowledge, Imperial and PSZ&J do not hold or represent any interest adverse to the Debtors' estates and is a "disinterested person" as that phrase is defined in Sec. 101(14) of the Bankruptcy Code. About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to 13-11326) on May 22 to conduct an orderly liquidation. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Debtors. Imperial Capital, LLC, serves as financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hillman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. HIGHWAY TECHNOLOGIES: Court Approves Hilco as Sales Agent --------------------------------------------------------- Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought and obtained approval from the U.S. Bankruptcy Court to employ Hilco Industrial, LLC as exclusive sales and marketing agent. Ian S. Fredericks attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to 13-11326) on May 22 to conduct an orderly liquidation. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Debtors. Imperial Capital, LLC, serves as financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hillman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. HIGHWAY TECHNOLOGIES: Panel Can Employ Gavin/Solmonese as Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought and obtained approval from the U.S. Bankruptcy Court to retain Gavin/Solmonese LLC as its financial advisor. About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to 13-11326) on May 22 to conduct an orderly liquidation. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Debtors. Imperial Capital, LLC, serves as financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hillman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. HOSTESS BRANDS: Environmental Concerns Depress Asset Sales ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hostess Brands Inc. will sell the remaining real estate, machinery, equipment and trucks for $58.3 million unless a better offers turns up at an Aug. 16 hearing. According to the report, after the bakery workers' union called a strike and forced Hostess to liquidate in November, the former producer of Wonder bread sold most of the assets to five different buyers for a total of $860 million. Hackman Capital Corp. signed a contract to buy all of the remaining assets "as is" for $58.3 million. The report notes the bankruptcy court in White Plains, New York, approved the auction and sale procedures on July 19. The property being sold is at 140 locations in 34 states. Hostess said the so-far unsold assets should have a combined value of about $70 million, assuming there were no environmental impairment. From 404 offers that were received for some or all of the assets, $60.2 million represents combined bids for everything from several prospective buyers. The report discloses that some of the individual offers have conditions, making them less attractive to Hostess than the Hackman offer, which has none. Hackman will pay cash. Hostess said that the lack of records about potential environmental impairment makes some buyers reluctant to make unconditional offers. Competing bids are due Aug. 8. There will be a preliminary auction on Aug. 15, followed by the final auction on Aug. 16 and an Aug. 21 hearing for approval of sale. The report notes that Hackman is no novice at bankruptcy sales. It paid $8.53 million for the non-operating plant in Devens, Massachusetts, that belonged to solar panel maker Evergreen Solar Inc. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands sold its businesses and most of the plants to five different buyers for an aggregate of $860 million. Hostess still has some plants, depots and other facilities the buyers didn't acquire. After Hostess sold most of the assets, the company changed its name to Old HB Inc. HOSTESS BRANDS: Can Auction Remaining Assets, Judge Says -------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that the company formerly known as Hostess Brands Inc. won approval from a New York bankruptcy judge Friday to unload at auction the remainder of its assets, including tens of millions of dollars worth of real estate, machinery and trucks. According to the report, U.S. Bankruptcy Judge Robert D. Drain signed off on the defunct wholesale baker's plan to hold an auction Aug. 16 for the scraps left over after Hostess sold off the last of its major assets in April. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands sold its businesses and most of the plants to five different buyers for an aggregate of $860 million. Hostess still has some plants, depots and other facilities the buyers didn't acquire. The bankruptcy estate has changed its name to Old HB Inc. IGPS CO: Bankruptcy Court Approves Sale to Joint Venture -------------------------------------------------------- Peg Brickley writing for Dow Jones' DBR Small Cap reports that pallet provider iGPS Co. won court approval Tuesday to sell itself to a buyout group that paid $28 million for the right to bid $150 million worth of top-ranking, but defaulted, loans at a bankruptcy auction. iGPS Co. has argued that while roughly $750 million had been invested in the company, $39 million was now all the market would bear. The contention was opposed by the U.S. trustee and iGPS' founder and former chief executive officer, arguing that the $36 million auction floor is too low for a debtor they say could have more than $500 million in assets. About iGPS Co. iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a group led by Balmoral Funds LLC, absent higher and better offers. iGPS Company -- http://www.igps.net-- is the first and only plastic pallet pooling rental and leasing company in the U.S. It offers plastic pallets with embedded radio frequency identification (RFID) tags. Founded in 2006, the company is headquartered in Orlando, Florida, and has a sales and innovation center in Bentonville, Arkansas. The Debtor estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. According to the board resolution authorizing the bankruptcy, Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA VIII iGPS Blocker, LLC, owns 12.27%. IGPS CO: Committee Taps Emerald Capital as Financial Advisors ------------------------------------------------------------- The Official Committee of Unsecured Creditors of iGPS Company LLC asks the U.S. Bankruptcy Court for authority to retain Emerald Capital Advisors as financial advisors. The firm will, among other things: a. review and analyze the Debtor's operations, financial conditions, business plan, strategy, and operating forecasts; b. assist the Committee in evaluating any proposed debtor-in- possession financing; and c. assist In the determination of an appropriate capital structure for the Company. The professional and other personnel within ECA will undertake the engagement at agreed to hourly rates and ECA will be reimbursed for necessary expenses. The firm's hourly rates are: Professional Rates ------------ ----- John P. Madden $600 Joseph Scopo $400 ECA Associates $300 ECA Analysts $200 The panel attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About iGPS Co. iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a group led by Balmoral Funds LLC, absent higher and better offers. iGPS Company -- http://www.igps.net-- is the first and only plastic pallet pooling rental and leasing company in the U.S. It offers plastic pallets with embedded radio frequency identification (RFID) tags. Founded in 2006, the company is headquartered in Orlando, Florida, and has a sales and innovation center in Bentonville, Arkansas. The Debtor estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. According to the board resolution authorizing the bankruptcy, Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA VIII iGPS Blocker, LLC, owns 12.27%. INNER CITY: Files Settlement Agreement Under Seal ------------------------------------------------- Inner City Media sought and obtained authorization to file a settlement agreement under seal pursuant to Section 107(b) of the Bankruptcy Code. The order provides that only these parties are authorized to access the document, referred to as the "Amendment Agreement": (a) the Debtors and their counsel, (b) the parties to the Amendment Agreement and their counsel, and (c) the United States Trustee for the Southern District of New York. Parties who are granted access to the Amendment Agreement will agree to keep such document confidential. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. 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 Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INNER CITY: May Assume and Assign Arbitron Pacts to YMF Media ------------------------------------------------------------- Inner City Media and its affiliates won approval from the Bankruptcy Court to assume agreements between the Debtors and Arbitron Inc. and (b) assignment the agreements to YMF Media LLC. YMF will cure all defaults under the agreements, which shall include the payment by YMF of all amounts due to Arbitron under the agreements. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. 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 Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. JEFFERSON COUNTY: Monarch Acquires Portion of Fundamental Claims ---------------------------------------------------------------- Fundamental Partners II LP sold pieces of its claims filed in the Chapter 9 case of Jefferson County, Alabama, to entities affiliated with Monarch Alternative Capital LP, according to court documents filed July 18 in the county's case. New York-based Fundamental filed two claims each for $67,910,420 on account of 2003-B-7 Warrants plus accrued but unpaid interest. Terms of the deal were not disclosed. Monarch Entity Portion of Claim Acquired -------------- ------------------------- P-Monarch Recovery LTD 2.40% or $1,627,000 P-Monarch Recovery LTD 2.40% or $1,627,000 Monarch Capital Master Partners II LP 0.37% or $252,500 Oakford MF Limited 0.91% or $615,500 Oakford MF Limited 0.91% or $615,500 Monarch Opportunities Master Fund Ltd. 5.31% or $3,607,000 Monarch Opportunities Master Fund Ltd. 5.31% or $3,607,000 Monarch Debt Recovery Master Fund Ltd. 9.70% or $6,585,000 Monarch Debt Recovery Master Fund Ltd. 9.70% or $6,585,000 Monarch Capital Master Partners II-A LP 6.30% or $4,277,500 Monarch Capital Master Partners II-A LP 6.30% or $4,277,500 Monarch Capital Master Partners II-A LP 6.30% or $4,277,500 Monarch Alternative Solutions Master Fund LP 0.79% or $535,500 Monarch Alternative Solutions Master Fund LP 0.79% or $535,500 Fundamental may be reached at: Fundamental Partners II LP 745 Fifth Avenue, 30th Floor New York, NY 10151 Attn: Jonathan Stern Tel: 212-205-5006 The Monarch entities may be reached at: Monarch Alternative Capital LP 535 Madison Ave., Floor 26 New York, NY 10022 Attn: Michael Gillin Tel: 212-554-1743 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. On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt adjustment. Pursuant to the Plan, sewer bondholders will receive 65 percent in cash. If they elect to waive claims against JPMorgan and bond insurers, they receive 80 percent in cash. Bondholders supporting the plan already agreed to waive claims and receive the larger recovery. Existing sewer bonds will be canceled in exchange for payments under the plan. The county will fund plan distributions by selling new sewer bonds calculated to generate $1.96 billion to cover the $1.84 billion earmarked for existing sewer bondholders. JPMorgan has agreed to waive $842 million of the sewer debt and a $657 million swap debt, resulting in an 88 percent overall write off by JPMorgan. To finance the new sewer bonds, there will be 7.4 percent in rate increases for sewer customers in each of the first four years. In later years, rate increases will be 3.5 percent. KEHE DISTRIBUTORS: S&P Assigns 'B+' CCR; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B+' corporate credit rating to KeHE Distributors Holdings LLC. The outlook is stable. KeHE Distributors Holdings is the parent company of KeHE Distributors LLC and KeHE Finance Corp., which are coissuers of the proposed $200 million second-lien notes due 2021. S&P assigned a 'B' issue-level rating a '5' recovery rating to the proposed notes, the proceeds of which the company will use to refinance borrowings under its existing revolving credit facility, repay subordinated debt, and redeem preferred stock held primarily by Prudential Capital and its affiliates. The '5' recovery rating reflects S&P's expectation for modest (10%-30%) recovery in the event of a payment default. "The rating on KeHE Distributors Holdings LLC (KeHE) reflects our assessment of a "weak" business risk profile and an "aggressive" financial risk profile," said credit analyst Ana Lai. "The business risk profile reflects KeHE's small scale, niche focus in the highly competitive wholesale grocery distribution industry, and some customer concentration. The positive growth prospects of the specialty segment of food retailing, including the natural & organic (N&O) segments, somewhat offset these risks." The stable outlook reflects S&P's view that good growth prospects and the company's niche market position will support KeHE's operating results in the next year. S&P expects the positive fundamentals of the specialty segment of grocery wholesale distribution and revenue from new customers to drive healthy sales and profit growth. As a result, S&P expects credit protection measures to improve modestly. S&P could lower the rating if operating performance trends below its expectations due to significant customer attrition or greater profitability pressure due to competition or shift to lower margin products. This could occur if total debt to EBITDA approaches 5x, which could result from a 100-basis-point (bp) decline in gross margin with a 2% revenue growth. A lower rating could also result from more aggressive financial policy to fund acquisition or shareholder returns with debt. A higher rating is not a near term consideration given S&P's expectations, but could result from performance that is significantly better than expected such that total debt to EBITDA approaches the 3x area. This could occur if revenue increases 3% while gross margin improves 100-bps. KEYSTONE AUTOMOTIVE: Moody's Assigns 'B3' Rating to Sr. Term Loan ----------------------------------------------------------------- Moody's Investors Service assigned ratings to Keystone Automotive Operations, Inc. - Corporate Family and Probability of Default ratings at B3 and B3-PD, respectively. In a related action Moody's assigned a B3 rating to the proposed $235 million first lien senior secured term-loan and a Caa2 rating to the proposed $100 million second lien senior secured term loan. The proceeds from the term loans are expected to be used to refinance the company's existing debt, pay a special dividend to the company's shareholders, and pay related transaction fees and expenses. Keystone's rating outlook is stable. Ratings Assigned: Corporate Family Rating, B3; Probability of Default, B3-PD; B3 (LGD4, 52%), to the $235 million first lien senior secured term loan due 2019; Caa2 (LGD6, 90%), to the $100 million second lien senior secured term loan due 2020; The $75 million asset based revolving credit facility is not rated. Ratings Rationale: The B3 Corporate Family Rating reflects Keystone's high leverage, modest size, and cyclical product markets. Following the proposed balance sheet recapitalization and special dividend, Keystone's pro forma Debt/EBITDA leverage is estimated to be 5.8x for the LTM period ending March 31, 2013 (inclusive of Moody's standard adjustments). This risk is further exacerbated by the company's modest size in the automotive aftermarket for specialty equipment and accessories. While Moody's estimates that Keystone maintains a leading market position, the industry is highly fragmented and, due to the largely discretionary nature of its product, is disproportionately impacted by economic downturns. These industry characteristics contributed to Keystone's financial restructuring completed early 2011. Supporting Keystone's ratings are its leading market position within the industry and strong profit margins following the financial restructuring with an EBITA margin of 8.7% for the LTM period ending March 31, 2013. The stable outlook incorporates Moody's view that Keystone's profit margins and sustainable market position should support free cash flow generation over the intermediate-term. These attributes are expected to drive debt reduction and improving debt/EBITDA leverage. Keystone is anticipated to have an adequate liquidity profile over the next twelve months supported by revolver availability and free cash flow generation. Pro forma for the close of the recapitalization, the $75 million asset based revolving credit facility is expected to have a moderate amount of availability, subject to borrowing base restrictions. Keystone also is anticipated to generate positive free cash flow over the next twelve months supported by the company's strong profit margins and modest capital expenditure requirements. The term loans are not expected to have financial covenants while the asset based revolving credit facility has a springing fixed charge covenant that is applicable if availability is below certain levels. Alternative liquidity is limited as essentially all of the company's domestic assets secure the asset based revolver and the secured term loans. Future events that have the potential to drive Keystone's outlook or ratings higher include: sustained operating performance including EBITA margins (as adjusted by Moody's) of over 8%, EBITA/Interest approaching 3x, and Debt/EBITDA approaching 4.5x. Future events that have the potential to drive Keystone's outlook or ratings lower include a material deterioration in EBITA margins, credit metrics, or the liquidity profile. 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. Keystone Automotive Operations, Inc., headquartered in Exeter, Pennsylvania, is a wholesale distributor and retailer of automotive and recreational vehicle aftermarket accessories and equipment, operating in all regions of the United States and parts of Canada. Keystone sells and distributes specialty vehicle products, such as light truck/SUV accessories, car accessories and trim items, specialty wheels, tires and suspension parts, high performance products, and specialty RV products to a fragmented base of approximately 20,000 customers. Net sales in 2012 were approximately $635 million. Keystone is majority owned by affiliates of Platinum Equity. KEYSTONE AUTOMOTIVE: S&P Assigns Prelim. 'B' CCR; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Exeter, Pa.-based Keystone Automotive Operations Inc. (Keystone), a distributor and marketer of specialty aftermarket equipment and accessories. The outlook is stable. "At the same time, we assigned a preliminary 'B' issue-level rating and a preliminary '4' recovery rating to the company's proposed $235 million first-lien term loan. The '4' recovery rating indicates our expectation that lenders would receive average (30%-50%) recovery in the event of a payment default. We also assigned a preliminary 'CCC+' issue-level rating and a preliminary '6' recovery rating to the company's proposed $100 million second-lien term loan. The '6' recovery rating indicates our expectation that lenders would receive negligible (0%-10%) recovery in the event of a payment default," S&P said. The preliminary ratings will depend on S&P's receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary ratings should not be construed as evidence of final ratings. If S&P do not receive final documentation within a reasonable time, or if final documentation departs from the materials it reviewed, it reserves the right to withdraw or revise its ratings. "The preliminary ratings on Keystone reflect our view of the company's "highly leveraged" financial risk profile and "weak" business risk profile," said credit analyst Robyn Shapiro. The stable outlook reflects S&P's expectation that Keystone's leverage, pro forma for the transaction, will be 6x or less over the next 12 months. The financial risk assessment also reflects S&P's expectation for some positive free cash flow in 2013, mostly due to increased sales and modest capital expenditures. The "highly leveraged" financial risk profile reflects the company's substantial debt burden and ownership by a financial sponsor. Private equity firm Platinum Equity owns a majority interest in Keystone, and S&P believes the company's financial policy will remain aggressive given the potential that it will distribute additional dividends to shareholders in the future, rather than reduce debt. S&P expects Keystone's credit metrics to improve marginally over the intermediate term, based on its assumption for gradual EBITDA improvements and our belief that management will approach growth prudently. The "weak" business risk assessment reflects the discretionary auto aftermarket business' cyclical nature. Keystone distributes products designed to improve the performance, functionality, and appearance of both on-road and off-road cars and trucks. These types of purchases depend significantly on trends in GDP, unemployment, new vehicle sales, and construction activity. The absence of repair and maintenance parts within the company's product range makes Keystone especially susceptible to downturns, as demonstrated in late 2008 and 2009. These concerns are only partially offset by Keystone's market position as the largest wholesale distributor of specialty auto aftermarket parts in the U.S. However, S&P views this industry as highly fragmented and competitive. Keystone's business risk profile considers the company's limited geographic diversity compared to some of its similarly rated peers, and S&P expects this to be the case in the foreseeable future. Many customers are small, independent retailers that S&P views as more vulnerable to market cycles compared to big-box rivals. However, the company benefits from a relatively broad customer base. Profitability is weaker compared to some rated aftermarket auto supplier peers, but EBITDA margins have recovered since the U.S. recession. S&P's economists currently forecast U.S. GDP growing modestly in 2013 and 2014. S&P expects construction demand to experience a rebound, increasing Keystone's sales of truck and towing accessories. S&P expects unemployment to remain high, at about 8% for both years. S&P's base-case scenario assumptions for Keystone's operating performance over the next two years include: -- Revenue growth in the mid-single digits; -- An adjusted EBITDA margin in the high-single-digit percent range over the next 12-18 months related to increased sales and efficiencies; -- Positive free operating cash flow (FOCF) in 2013, given S&P's assumptions of modest capital expenditure requirements to support the distribution business. S&P expects similar cash flow generation in 2014 based on its projected margin improvements; -- No meaningful acquisitions over the next 12-18 months; and -- No debt reduction beyond the company's required annual amortization of the first-lien term loan. The stable rating outlook reflects S&P's expectation that Keystone's leverage, pro forma for the transaction, would be about 6x at year-end 2013. S&P also assumes the company will continue to generate low, but still positive, FOCF over the next 12 months and subsequent years. S&P could lower the ratings if weaker-than-expected operating performance led to adjusted leverage of well above 6x or prospects for negative FOCF. This could occur if EBITDA margins underperform S&P's base case in 2014. S&P could also lower the ratings if it anticipates a decrease in liquidity, which could occur if the company increases borrowings under its ABL facility to fund acquisitions or additional dividends. S&P considers an upgrade unlikely in the next year because it believes the company's financial risk profile will remain "highly leveraged" under its financial sponsors. KINGSBURY CORP: Hearing on Plan Outline Continued to Aug. 21 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Hampshire continued the hearing on the adequacy of the disclosure statement for Kingsbury Corporation, et al.'s Plan of Liquidation from July 18, 2013, to Aug. 21, 2013, at 1:30 p.m. As reported in the May 7, 2013 edition of The Troubled Company Reporter, KMTC, f/k/a Kingsbury Corporation, Donson Group, Ltd., and Ventura Industries, LLC, proposed a liquidating plan, which provides for the sale of Kingsbury's real estate located at 80 Laurel Street, Keene, New Hampshire. Secured claims will be paid in full from the sale proceeds, or holders of secured claims will retain their liens in the real estate and their allowed secured claims will be satisfied from the real estate proceeds. General unsecured claims will be paid in full, while interests will be cancelled and holders of interests will take nothing under the Plan. A full-text copy of the Disclosure Statement dated April 22, 2013, is available for free at: http://bankrupt.com/misc/KINGSBURYCORPds0422.pdf About Kingsbury Corp. Kingsbury Corp. -- http://www.kingsburycorp.com/-- makes and assembles machine systems. Kingsbury and affiliate Ventura Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11-13687) on Sept. 30, 2011. Maire B. Corcoran, Esq., Robert J. Keach, Esq., Jessica A. Lewis, Esq., and Jennifer Rood, Esq., at Berstein, Shur, Sawyer & Nelson, serve as counsel to the Debtors. Donnelly Penman & Partners serves as its investment banker. In its schedules, the Debtor disclosed $10,134,679 in assets, and $24,534,973 in liabilities as of the petition date. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to serve on the Official Committee of Unsecured Creditors. Steven C. Reingold, Esq., at Jager Smith P.C., represents the Official Committee of Unsecured Creditors as counsel. KODIAK OIL: Senior Notes Issuance Gets Moody's 'B3' Rating ---------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Kodiak Oil & Gas Corp.'s senior unsecured notes due 2022. Note proceeds will be used to repay a portion of the borrowings outstanding under Kodiak's first lien credit agreement, which has been expanded to accommodate the funding of a $660 million acquisition of additional properties in the Williston Basin. On July 12, Kodiak closed on an acquisition of 42,000 net acres in the Bakken/Three Forks, whose June 2013 production averaged 5,600 Boe per day. The outlook is stable. "While the acquisition of additional producing and undeveloped leasehold acreage in the Bakken/Three Forks will further propel production upside, the all-debt financing of these acquired properties at a cost per flowing barrel in excess of $100,000 perpetuates a level of debt leverage which is high for the company's rating," commented Andrew Brooks, Moody's Vice President. "However, with oil comprising over 85% of its production, Kodiak's expanded presence in the Bakken/Three Forks places it in a strong position to convert high oil prices and rapid growth into high cash margins and increasing cash flow for a reduction in debt leverage." Ratings assigned: Senior Unsecured Notes Rating, assigned B3, LGD5 (73%) Ratings Rationale: The B3 rating on the proposed $300 million of senior notes reflects both the overall probability of default of Kodiak, to which Moody's assigns a PDR of B2, and a loss given default of LGD5 (73%). Kodiak's senior unsecured notes are subordinate to its $1.1 billion secured revolving credit facility's potential priority claim to the company's assets. The size of the potential claims relative to Kodiak's outstanding senior unsecured notes results in the notes being rated one-notch below the B2 Corporate Family Rating (CFR) under Moody's Loss Given Default Methodology. Kodiak's B2 CFR reflects its emergence as a rapidly growing moderately-sized oil producer in the prolific Bakken Shale, its high quality asset base extensively weighted to crude oil and the generous cash margins that its oil production enjoys. Well completion setbacks experienced early in 2012 appear to have been successfully remediated. The rating is restrained by Kodiak's high debt leverage, which at March 31 exceeded $75,000 per Boe of average daily production, pro forma for the acquisition. Based on the company's 2013 guidance of 29,000 -- 31,000 Boe per day of production (prior to the acquisition), however, debt on production should drop to a level approaching $60,000 per Boe on a pro forma basis by year end. While Kodiak continues to outspend internally generated cash during this growth phase, relative leverage measures are likely to improve with increasing production. Kodiak produced for sale 21.7 mBoe per day of hydrocarbons in 2013's first quarter, with crude oil comprising 88% of its salable production. The company expects a fourth quarter 2013 exit rate of 38 -- 40 mBoe per day (before the July property acquisition). At December 31, 2012, Kodiak's proved reserves totaled 94.8 million Boe (85% oil, 46% proved developed) reflecting a 138% increase over year-end 2011 levels. Its 54% Proved Undeveloped Reserves (PUDs) provide substantial drilling upside, and with Bakken costs moderating and infrastructure bottlenecks subsiding, Moody's expects a continuation of strong cash margins with a leveraged full-cycle ratio exceeding the 2x achieved at March 31. Moody's expects Kodiak to have adequate liquidity through mid- 2014, as reflected by its SGL-3 Speculative Grade Liquidity rating. Following the July 12 closing of its Williston acreage acquisition, Kodiak had $976 million borrowed under its secured borrowing base revolving credit facility, whose borrowing base was increased from $650 million to $1.1 billion to enable the funding of the acquisition. Kodiak's funds from operations and revolving credit availability should sufficiently cover 2013's $775 million capital spending budget. The stable outlook reflects Moody's view that Kodiak's production will grow to a sustainable level approaching 30 mBoe per day in 2013 with negative free cash flow diminishing over the next several years. An upgrade could be considered if Kodiak reduces financial leverage below $40,000 per Boe of average daily production while attaining sustained production in excess of 35 mBoe per day and maintaining a leveraged full-cycle ratio above 2.25x. A downgrade could be considered if Kodiak re-encounters well completion issues that result in stagnating production, should relative debt leverage measures remain at elevated levels or should it's leveraged full-cycle ratio drop below 1.5x. The principal methodology used in this rating was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Kodiak Oil & Gas is an independent exploration and production company headquartered in Denver, Colorado. KODIAK OIL: S&P Rates $400MM Sr. Unsecured Notes Due 2022 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' issue- level rating (one notch lower than the corporate credit rating) to Denver-based Kodiak Oil & Gas' proposed $400 million senior unsecured notes due 2022. The senior unsecured recovery rating is '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The 'B+' corporate credit rating and stable rating outlook on Kodiak are unaffected. The exploration and production company intends to use proceeds to refinance borrowings under its credit facility. The ratings on Kodiak Oil & Gas reflects S&P's view of its "aggressive" financial risk profile, "weak" business risk profile, and "adequate" liquidity assessment. These assessments reflect the company's relatively small asset base and production levels, lack of geographical diversification, and high spending levels in excess of projected operating cash flows. In addition, S&P's assessment also includes the company's significant exposure to strong crude oil prices, a favorable cost structure, and a solid resource play acreage position. Ratings List Kodiak Oil & Gas Corporate credit rating B+/Stable/-- Rating Assigned Kodiak Oil & Gas $400 mil. sr. unsecured nts. due 2022 B Recovery rating 5 LAURENTIAN ENERGY: Moody's Keeps 'Ba2' Rating on $45MM Bonds ------------------------------------------------------------ Moody's Investors Service is maintaining its Ba2 ratings on Laurentian Energy Authority I, LLC's (LEA) $44.8 million in outstanding cogeneration revenue bonds series 2005A and 2005B. The bond proceeds funded the modification of existing coal-fired facilities to accommodate biomass cogeneration of electric capacity, energy and steam production. The outlook is negative. Rating Rationale The Ba2 rating reflects relative predictable revenue stream provided under a long-term power purchase agreement (PPA) with an investment grade offtaker and take-or-pay Steam Sales Agreements (SSAs) with two Minnesota public utilities; relative importance of the steam to the host cities; and above average liquidity for municipal infrastructure financings. The rating is tempered by contractual imperfections leading to weak financial performance; the lack of rate covenants; short-term biomass supply contracts with suppliers of unknown credit quality; and single asset risk. Strengths: - Long-term offtake agreement with NSP for capacity and energy payments - Above average liquidity for a project financing - Regulatory importance to the offtaker - Importance of project to steam off-takers - Demonstrated history of meeting biomass content under the PPA Weaknesses: - Contractual imperfections leading to weak financial performance - Short operating history as biomass generating unit - Lack of a rate covenant with no distribution test - Punitive penalty regime under the PPA - Substantially above market price for power - Potential for future environmental challenges Outlook The negative outlook reflects continued weak financial performance. However, the outlook is likely to be stabilized following MPUC approval of the amended PPA. What Could Make the Rating Go - UP Given the negative outlook, the rating is unlikely to be upgraded in the next twelve months. Beyond the next twelve months, the rating could face upward rating momentum should the project's proposed amendment be approved by the MPUC and the project's expected cash flow improvement materialize resulting in consistent DSCRs that are above 1.1x. What Could Make the Rating Go - DOWN The rating could face downward pressure if the MPUC fails to approve the executed amendment between NSP and LEA; if the DSCR remains below 1.0x; or if the project faces penalties for failing to meet biomass component of at least 75%. Operational challenges arise that result in lower than committed energy production and subsequent revenue reduction received by the authority could also result in negative rating pressure. The principal methodology used in this rating was Power Generation Projects published in December 2012. LEHMAN BROTHERS: Files Updated Cash Flow Estimates in N.Y. Court ---------------------------------------------------------------- Lehman Brothers Holdings Inc. filed on July 23 in U.S. Bankruptcy Court for the Southern District of New York cash flow estimates for itself and its controlled affiliates for the period beginning January 1, 2013 through their estimated end of activities. Total cash from operations for the period subsequent to the commencement of their bankruptcy cases is now estimated to be approximately $80.6 billion, reflecting a $15.8 billion increase from the cash flow estimates filed with the court in July 2012. The increase is primarily due to the inclusion of recovery estimates for receipts from certain non-controlled affiliates which had been excluded from prior estimates (as settlements were not finalized at the earlier reporting date); increases in the estimated value of certain assets; and positive execution results. The cash flow estimates and related filings, including recent balance sheets, the chapter 11 plan and disclosure statement, can be found at www.lehman-docket.com in the "Key Documents" section. The Company has established an email address, which can also be found in the filing referenced above, to receive questions regarding financial disclosures. The Company will continue to review questions and, where appropriate, post responses. 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 (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. 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, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. 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: U.S. Bank Objects to Request for Stay Extension ---------------------------------------------------------------- U.S. Bank N.A. is blocking efforts by Lehman Brothers Holdings Inc. to get another six-month stay on 15 lawsuits, which was set to expire on July 20. Lehman filed a motion last month to extend the stay to Jan. 20, 2014, saying the six-month extension would allow the company to settle the lawsuits. One of them is a lawsuit lodged by Lehman's special financing unit against U.S. Bank. In a court filing, U.S. Bank said another extension of the stay would "adversely " affect the rights of the bank and other parties involved in the lawsuits. "The waiting game created by the stay overwhelmingly favors the debtors, which are winding down their businesses and have no pressures to make profits or returns to meet the demands of investors, clients, holders or retirees," U.S. Bank said. U.S. Bank serves as trustee or administrative agent in various transactions, some of which involve swap and derivative contracts with Lehman. The proposed extension also drew flak from First Trust Strategic High Income Fund II and from insurance companies including Nationwide Life Insurance Co. and Ameritas Life Insurance Corp. Nationwide Life said Lehman is pursuing "an indefinite stay strategy to pursue settlement discussions while the table of negotiations is tilted to its benefit." First Trust and the insurance firms are all defendants in one of the 15 lawsuits styled Lehman Brothers Special Financing, Inc. v. Bank of America National Association, Adv. Proc. No. 10-03547. Lehman was first granted an extension of stay by the bankruptcy court on October 20, 2010. The court imposed a nine-month stay on more than 50 lawsuits filed by the company and its subsidiaries to recover over $3 billion. The stay has been extended several times since then. Lehman said the stay has allowed the company to engage in a so- called "alternative dispute resolution" program to end disputes which could have resulted in costly litigations, and to continue to make substantial progress in resolving the lawsuits. As of June 21, the ADR program has yielded more than $1.543 billion for the Lehman estate, according to court papers. U.S. Bank N.A. is represented by: Craig M. Price, Esq. CHAPMAN AND CUTLER LLP 330 Madison Avenue, 34th Floor New York, NY 10017-5010 Tel: (212) 655-6000 Email: cprice@chapman.com Ameritas Life Insurance Corp. is represented by: Michael S. Etkin, Esq. LOWENSTEIN SANDLER LLP 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 262-6700 Fax: (212) 262-7402 First Trust Strategic is represented by: Laura Appleby CHAPMAN AND CUTLER LLP 1270 Avenue of the Americas, 30th Fl. New York, NY 10020 Tel: (212) 655-6000 Email: appleby@chapman.com Nationwide Life Insurance Co. is represented by: Michael S. Etkin LOWENSTEIN SANDLER LLP 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 262-6700 Fax: (212) 262-7402 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: Gibson, et al., Final Fee Applications Okayed -------------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved the final fee applications of Gibson Dunn & Crutcher LLP, McKenna Long & Aldridge and SNR Denton US LLP. The court approved the payment of $5,625,946 in fees and reimbursement of $5,825 in work-related expenses to McKenna Long & Aldridge, and the payment of $2,572,621 in fees to SNR Denton US LLP. The fee applications cover the period September 15, 2008, to March 6, 2012. The court also approved the payment of $4,796,132 in fees to Gibson Dunn & Crutcher for services it provided during the period September 1, 2009 to March 6, 2012. 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: Andorra Banc Settles Claim Dispute --------------------------------------------------- Lehman Brothers Holdings Inc. and Andorra Banc Agricol REIG S.A. signed an agreement to end their dispute over the validity of Andorra's claim. In November 2009, Andorra filed proof of claim number 63849 against LBHI. LBHI objected to the Claim and asked the Court to disallow and expunge, among other things, all portions of the Claim that relate to the security identified by ISIN XS0229269856, whether liquidated, unliquidated, or undetermined. Under the deal, all portions of Claim No. 63849 that relate to a security identified by the International Securities Identification Number XS0229269856 will be disallowed with prejudice. A copy of the agreement is available for free at http://is.gd/sGPTzV The security was issued by Lehman Brothers Holdings plc, a non- debtor subsidiary of the holdings company. Andorra had said the security was fully guaranteed and payable by the Lehman parent. LBHI is represented by Garrett A. Fail, Esq. -- garrett.fail@weil.com -- at WEIL, GOTSHAL & MANGES LLP, in New York. Andorra is represented by Michael Savetsky, Esq., and Michael S. Etkin, Esq., at LOWENSTEIN SANDLER PC, in New York. 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: Settles Oracle's $7.2-Mil. Claim ------------------------------------------------- Lehman Brothers Holdings Inc. received the green light to settle Oracle America Inc.'s $7.2 million claim. Under the agreement, Oracle can assert an administrative expense claim against the company in the amount of $2,549. The agreement is available for free at http://is.gd/4jj3v1 The $7.2 million claim stemmed from the companies' software license agreement, which was rejected under the terms of Lehman's Chapter 11 plan. 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 was set for 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 Pre-Inclusion Agreements Assumed ------------------------------------------------------- Judge James Peck approved an agreement calling for the withdrawal of claims filed by Roaring Fork Water and Sanitation District against a subsidiary of Lehman Brothers Holdings Inc. 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. A full-text copy of the agreement is available for free at http://is.gd/MxtaDX 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 was set for 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: Trustee, CSP Ink Deal to Settle $14.6-Mil. Claim ----------------------------------------------------------------- The trustee of Lehman Brothers Holdings Inc.'s brokerage signed an agreement to settle the claim of CSP II USIS Holdings L.P. Under the deal, CSP can assert a general unsecured claim against the brokerage for $14,269,699, down from the $14,629,908 it originally wanted. The agreement is available for free at http://is.gd/oxh43j Hughes Hubbard & Reed LLP, the trustee's legal counsel, will present the agreement to Judge James Peck for signature on July 17. CSP II USIS Holdings L.P. is represented by: Joon Hong, Esq. Victor Ludwig, Esq. RICHARDS KIBBE & ORBE LLP One World Financial Center New York, NY 10281-1003 Tel: (212) 530-1800 Fax: (212) 530-1801 Email: jhong@rkollp.com vludwig@rkollp.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 was set for 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. LIBERTY MEDICAL: Aug. 14 Bar Date Set for Equity Holders -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a stipulation between ATLS Acquisition, LLC, et al., and the official committee of unsecured creditors to modify the order (a) fixing the last date for filing proofs of claim against ATLS Acquisition, LLC, et al.,; (b) fixing the last date for filing proofs of claim by government units; (c) fixing the last date for filing requests for allowance of Section 503(b)(9) expense claims. The stipulation provides that any entity or individual holding an equity interest in any of the Debtors that wishes to assert claims must file proofs of claim by Aug. 14, 2013, at 5 p.m. The General Claims Bar Date in the case expired May 20, 2013, while governmental entities have until Aug. 14 to file proofs of claim. About Liberty Medical Entities that own diabetics supply provider Liberty Medical led by ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than three months after a management buy-out and amid a notice by the lender who financed the transaction that it's exercising an option to acquire the business. Liberty has been in business for 22 years serving the needs of both type 1 and type 2 diabetic patients. Liberty is a mail order provider of diabetes testing supplies. In addition to diabetes testing supplies, the Debtors also sell insulin pumps and insulin pump supplies, ostomy, catheter and CPAP supplies and operate a large mail order pharmacy. Liberty operates in seven different locations and has 1,684 employees. The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst & Young LLP to provide investment banking advice; and Epiq Bankruptcy Solutions, LLC, as claims and noticing agent for the Clerk of the Bankruptcy Court. An official committee of unsecured creditors has been appointed in the case and consists of LifeScan, Inc., Abbott Laboratories, and Teva Pharmaceuticals USA, Inc. They are represented by: Joseph H. Huston Jr., Esq. Maria Aprile Sawczuk, Esq. Camille C. Bent, Esq. STEVENS & LEE P.C. 1105 N. Market St., Suite 700 Wilmington, DE 19801 Tel: 302-425-3310 Fax: 610-371-7972 E-mail: jhh/masa@stevesless.com - and - Bruce Buechler, Esq. S. Jason Teele, Esq. Nicole Stefanelli, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Ave. Roseland, NJ 07068 Tel: 973-597-2500 Fax: 973-597-2400 The Committee has tapped Mesirow Financial Consulting, LLC, as financial advisors. LIBERTY MEDICAL: RSR Consulting's Rosenfeld Approved as CRO ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized ATLS Acquisition, LLC, et al., to employ RSR Consulting LLC to provide a chief restructuring officer; and appoint Robert Rosenfeld as CRO. The firm will, among other things: a) provide services with respect to the Debtors' complex Chapter 11 restructuring activities; b) provide operational and financial restructuring support in connection with the Debtors' business operations; and c) provide services in managing and advising on various ongoing litigation cases. The hourly rates of the firm's personnel are: Managing Director and Directors $325 - $375 Managers & Consultants $225 - $295 To the best of the Debtors' knowledge, RSR holds no interest adverse to the Debtors, their creditors, or in any party-in- interest. About Liberty Medical Entities that own diabetics supply provider Liberty Medical led by ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than three months after a management buy-out and amid a notice by the lender who financed the transaction that it's exercising an option to acquire the business. Liberty has been in business for 22 years serving the needs of both type 1 and type 2 diabetic patients. Liberty is a mail order provider of diabetes testing supplies. In addition to diabetes testing supplies, the Debtors also sell insulin pumps and insulin pump supplies, ostomy, catheter and CPAP supplies and operate a large mail order pharmacy. Liberty operates in seven different locations and has 1,684 employees. The Debtors have tapped Greenberg Traurig, LLP as counsel; Ernst & Young LLP to provide investment banking advice; and Epiq Bankruptcy Solutions, LLC, as claims and noticing agent for the Clerk of the Bankruptcy Court. The official committee of unsecured creditors appointed in the case is represented by Joseph H. Huston Jr., Esq., Maria Aprile Sawczuk, Esq., and Camille C. Bent, Esq., at Stevens & Lee P.C.; and Bruce Buechler, Esq., S. Jason Teele, Esq., and Nicole Stefanelli, Esq., at Lowenstein Sandler LLP, as counsel. The Committee has tapped Mesirow Financial Consulting, LLC, as financial advisors. LIFE CARE ST. JOHNS: July 25 Hearing on Use of Cash Collateral -------------------------------------------------------------- Life Care St. Johns, Inc., on July 12 obtained interim approval from the U.S. Bankruptcy Court for the Middle District of Florida to use cash collateral. Another hearing to consider further use of cash collateral is slated for July 25 at 1:30 p.m. Use of cash collateral will be in accordance with the terms agreed between the Debtor and Wells Fargo Bank, National Association, as bond trustee. As adequate protection, the bond trustee will receive rollover liens and replacement liens. The Debtors is authorized to use funds in excess of the statutory requirements in the Debtor's R&R and ORF funds. Life Care St. Johns, Inc., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04158) on July 3, 2013. Bruce Jones signed the petition as CEO. Judge Jerry A. Funk presides over the case. The Debtor estimated assets of at least $10 million and debts of at least $50 million. Stutsman Thames & Markey, P.A., serves as the Debtor's counsel. Navigant Capital Advisors, LLC, acts as the Debtor's financial advisor. American Legal Claim Services, LLC, serves as claims and noticing agent. LIGHTSQUARED INC: Proposes Dec. 16 Plan Approval Hearing -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloom berg News, reports that LightSquared Inc., having lost the exclusive right one week ago to submit a reorganization, is proposing that the bankruptcy judge establish Sept. 3 as the deadline for filing competing Chapter 11 plans. According to the report, LightSquared's exclusive right to propose a reorganization plan ran out on July 15, not long after Dish Networks Corp. made a $2 billion cash offer to buy the business. Expecting multiple plans will be filed, LightSquared arranged a hearing July 23 where the bankruptcy judge in New York will establish a schedule related to plan approval. The report notes that LightSquared committed to filing a generic disclosure statement to be used in connection with all plans that are proposed. The major parties will be given a "substantially final draft" on Aug. 26, in time to comment before the final version is filed Sept. 3. The company wants all plans filed by Sept. 3, along with supplemental materials prepared by the proponents to explain the competing plans. The report relates that LightSquared suggests there be an Oct. 3 hearing for approval of disclosure materials and a Dec. 16 confirmation hearing to select which plan should be approved. The report says that because there probably will be sales accompanying some or all of the plans, LightSquared wants sale proposals submitted by Sept. 20 so the lead bidder for an auction can be selected at the disclosure hearing. The auction should take place Dec. 12, LightSquared says. An ad hoc group of secured lenders previously accused LightSquared of "continuing to stall these cases for the benefit of the debtors' majority shareholder" Harbinger Capital Partners LLC. The report discloses that the lenders say the Dish offer would be sufficient to pay secured creditors in full. LightSquared has been authorized to hire Jefferies Group LLC to arrange financing paying off the company's debt in full. Full payment would enable Philip Falcone's Harbinger to retain ownership. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LSB INDUSTRIES: Moody's Assigns Ba3 Rating to New Senior Notes -------------------------------------------------------------- Moody's Investors Service assigned a first time Ba3 Corporate Family Rating to LSB Industries, Inc. and a Ba3 rating to the company's proposed guaranteed senior unsecured notes due 2021. Proceeds from the new debt offering will be used to repay certain existing debt, pre-fund planned capacity expansion projects and pay expenses. Moody's also assigned a Speculative Grade Liquidity assessment of SGL-2. The rating outlook is stable. LSB Industries, Inc. is a publicly traded company (NYSE: LXU). "While LSB is in an attractive industry that is expected to generate elevated margins going forward, operational issues over the past 18 months negatively impact its credit profile," stated John Rogers a Senior Vice President at Moody's. "Credit metrics are expected to improve significantly going forward; however, it will have to demonstrate a track record of improved operational effectiveness at all of its chemical facilities prior to getting an upgrade" Ratings assigned: LSB Industries Inc. Corporate Family Rating at Ba3 Probability of Default Rating at Ba3-PD Guaranteed senior unsecured notes due 2021 at Ba3 (LGD4, 59%) Ratings Rationale: LSB's Ba3 CFR reflects the company's elevated leverage (March 31, 2013 Debt to EBITDA is 4.8x, pro forma for the proposed debt financing, including Moody's standard analytical adjustments), modest size (revenues of roughly $720 million), limited product diversity and its advantaged cost position due to low natural gas prices in the US. The Ba3 rating also reflects recent operational issues that have affected production at each of its three chemical production facilities over the past 18 months, a limited operating history for ammonia production at its Pryor facility, as well as, the effective control of the company by The Golsen Group, who own 17% of the outstanding shares. LSB is a producer of nitrogen fertilizers, nitric acid, ammonium nitrate and climate control equipment. On an LTM basis as of March 31, 2013, the climate control business accounted for roughly 40% of sales and 30% of EBITDA. However, on a normalized basis this business should account for only about 30% of sales and less than 15% of EBITDA. The rating is supported by the robust conditions in the nitrogen fertilizer market and favorable long-term demand trends for agricultural chemicals. Additionally, LSB has leading market share positions in its climate control business (40% in water source and geothermal heat pumps and 30% in hydronic fan coils). The HVAC segment is anticipating higher revenues in the next few years as growth accelerates in commercial, institutional and multi-family construction markets. Over the past 18 months, the company's chemical business has experienced unplanned downtime at three of its facilities (its fourth facility is a nitric acid plant that is operated on a contract basis at the customer's site). These outages caused a substantial amount of downtime in 2012, and through May of 2013, which reduced EBITDA by over $100 million. The company has received $65 million of insurance proceeds and expects to receive substantially more prior to the end of 2013. The company plans to build a new nitric acid unit to replace the one that was destroyed in 2012 and build a small ammonia plant (375 thousand short tons), which will improve its vertical integration and eliminate the need to purchase ammonia for the El Dorado plant. These project are expected to cost an additional $350-400 million and add significantly to earnings in 2015 and 2016. LSB should be able to complete these projects with proceeds from the new notes and without additional insurance proceeds, providing that they operate above 80% of capacity. The Ba3 ratings on LSB's senior unsecured notes reflects their status as the vast majority of the outstanding debt in the capital structure. The notes are subordinate to an ABL revolving credit facility which is secured on a first-priority basis by a lien on the accounts receivable, inventory and certain other assets excluding the property, plant and equipment. There is also a secured debt at other subsidiaries of $39.5 million, which have a first priority lien on certain fixed assets. If the company incurs any additional secured debt (>$20 million), it would result in a downgrade of the notes. LSB's SGL-2 reflects good liquidity, supported by cash balances, an undrawn $100 million asset-backed revolving credit facility (ABL) due 2018, and expectations it will be able to generate roughly $100 million in cash flow from operations each year over the next two years. The company is expected to maintain at least $200 million in cash through the first half of 2014. The stable outlook reflects Moody's expectation that LSB will be able to reliably operate its existing chemical facilities and execute its planned investments over the next 18 months. Moody's would not consider upgrading the ratings until planned investments are completed and the company has demonstrated that the operational changes implemented allow the company to operate with minimal downtime. An upgrade would be contingent on company raising and maintaining EBITDA to over $200 million and reducing leverage toward 3.0x. The rating could be lowered, if the company continues to incur significant downtime at its chemical facilities such that Debt/EBITDA remains above 4.0x in 2014. The principal methodology used in rating LSB Industries, Inc. was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, is a producer of commodity chemicals that are derived from ammonia (nitrogen fertilizers, nitric acid and ammonium nitrate) and a manufacturer of climate control equipment. The company had revenues of $720 million for the twelve months ending March 31, 2013. LONGVIEW FIBRE: S&P Withdraws 'B+' Corp. Credit & Sr. Note Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it withdrew its ratings on Longview, Wash.-based Longview Fibre Paper and Packaging Inc., including the 'B+' corporate credit rating and senior secured note rating. This action follows the completion of the acquisition of the company by KapStone Paper and Packaging Corp. (unrated). As part of the acquisition, the redemption of Longview Fibre's existing $480 million senior secured notes is expected to take place over the next 30 days. MAXCOM TELECOMUNICACIONES: Files Voluntary Chapter 11 Petition -------------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V. on July 24 disclosed that it commenced voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware on July 23, 2013 to implement its previously announced recapitalization and debt restructuring. Under the Chapter 11 plan of reorganization, Maxcom will complete a comprehensive recapitalization and debt restructuring that is expected to significantly reduce Maxcom's debt service expense and position Maxcom for growth with a US$45 million capital infusion. As of the voting deadline of July 23, 2013, over 98 percent in amount and over 93 percent in number of the holders of 11% Senior Notes due 2014 that cast ballots voted to accept the Plan. These preliminary results exceeds the amount required for the court to approve the Plan, subject to final review and tabulation by GCG, Inc., Maxcom's proposed notice, claims, and balloting agent. The restructuring is not expected to adversely affect Maxcom's customers, employees, or vendors. Throughout the restructuring, Maxcom intends to continue business as usual. All telecommunications services will continue without change or interruption, and employees and vendors will be paid in the normal course of business. The Company expects to complete its restructuring, which is subject to U.S. Bankruptcy Court approval and the conditions set forth in the recapitalization agreement and the restructuring and support agreement, within approximately 60 days and anticipates emerging from Chapter 11 by early fall. Previously Announced Recapitalization and Debt Restructuring Maxcom, private equity firm Ventura Capital Privado, S.A. de C.V., an ad hoc group holding an aggregate amount of approximately US$86 million of Maxcom's Senior Notes, and certain of its current equity holders have reached agreement on the terms of the restructuring and support agreement, recapitalization agreement, and agreements to tender. Pursuant to the recapitalization agreement, Ventura and certain related parties have agreed to make a capital contribution of US$45.0 million dollars and conduct a tender offer to acquire for cash, at a price equal to Ps.$2.90 (two pesos and 90/100) per CPO, up to 100% (one hundred percent) of the issued and outstanding shares of Maxcom, subject to the terms of the recapitalization agreement. The Purchasers' obligation to consummate the tender offer and make the capital contribution is subject to a number of conditions, including: receiving legal and regulatory approvals from the Mexican Banking and Securities Commission (Comision Nacional Bancaria y de Valores), the Mexican Ministry of Communications and Transportation (Secretaria de Comunicaciones y Transportes), and the Mexican Antitrust Commission (Comision Federal de Competencia); the absence of certain material adverse effects; the entry of an acceptable bankruptcy court confirmation order consistent with the terms of the restructuring and support agreement and the recapitalization agreement; and such order becoming final. Pursuant to the terms of the Plan that have been agreed to by Maxcom, the Purchasers, and the Ad Hoc Group, all classes of creditors are unimpaired and will be paid in full under the Plan, except for the Senior Notes claims, which will receive (1) the step-up senior notes (which include the capitalized interest amount for unpaid interest accrued on the Senior Notes from (and including) April 15, 2013 through (and excluding) June 15, 2013, at the rate of 11% per annum), (2) cash in the amount of unpaid interest accrued on the Senior Notes (A) from (and including) December 15, 2012 through (and excluding) April 15, 2013, at the rate of 11% per annum, and (B) from (and including) June 15, 2013 through (and excluding) the effective date of the Plan at the rate of 6% per annum, and (3) rights to purchase equity that is unsubscribed by the Company's current equity holders pursuant to the terms of the Plan. The step-up senior notes will: (a) be issued in an aggregate principal amount of US$200 million, minus the amount of Senior Notes held in treasury by the Company, plus the capitalized interest amount; (b) bear interest (i) from the date of issuance until June 14, 2016, at the annual rate of 6% per annum, (ii) from June 15, 2016 until June 14, 2018, at the annual rate of 7% per annum, and (iii) from June 15, 2018 until the maturity date, at the annual rate of 8% per annum; (c) have a maturity date of June 15, 2020; (d) be secured by the same collateral that currently secures the Senior Notes; and (e) be unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by all of Maxcom's direct and indirect subsidiaries, excluding Fundacion Maxcom, A.C. As previously announced, the Company has engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y Rios, S.C. as its financial advisor and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and potential Chapter 11 case. The Ad Hoc Group has retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. At the time, the company said it would use the 30- day grace period to negotiate a restructuring to be carried out through a Chapter 11 filing in the U.S. MAXCOM TELECOMUNICACIONES: Case Summary & 30 Top Unsec. Creditors ----------------------------------------------------------------- Debtor-affiliates filing separate Chapter 11 petitions: Debtor Name Case Number ----------- ----------- Maxcom Telecomunicaciones, S.A.B. de C.V. 13-11839 Guillermo Gonzalez Camarena 2000 Centro Ciudad, Santa Fe, Mexico, D.F. Sierra USA Communications, Inc. 13-11837 Maxcom U.S.A., Inc. 13-11838 Telscape de Mexico, S.A. de C.V. 13-11840 Outsourcing Operadora de Personal, S.A. de C.V. 13-11841 Corporativo en Telecomunicaciones, S.A. de C.V. 13-11842 Telereunion, S.A. de C.V. 13-11843 Maxcom Servicios Administrativos, S.A. de C.V. 13-11844 Celmax Movil, S.A. de C.V. 13-11845 Maxcom SF, S.A. de C.V. 13-11846 Asesores Telcoop, S.A. de C.V. 13-11847 Servicios MSF, S.A. de C.V. 13-11848 Maxcom TV, S.A. de C.V. 13-11849 TECBTC Estrategias de Promocion, S.A. de C.V. 13-11850 Sierra Comunicaciones Globales, S.A. de C.V. 13-11851 Nature of Business: The Company is an integrated telecommunication services operator providing widespread voice and data services to residential and small- and medium-sized business customers in four metropolitan markets in Mexico and selected service in other markets. Chapter 11 Petition Date: July 23, 2013 Court: U.S. Bankruptcy Court District of Delaware Judge: The Honorable Peter J. Walsh Debtors' Counsel: Laura Davis Jones Jones, Esq. Timothy P. Cairns, Esq. Peter J. Keane, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 Email: ljones@pszjlaw.com tcairns@pszjlaw.com pkeane@pszjlaw.com - and - Marc Kieselstein, P.C., Esq. Adam Paul, Esq. Daniel R. Hodgman, Esq. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: marc.kieselstein@kirkland.com adam.paul@kirkland.com daniel.hodgman@kirkland.com Debtors' Mexican Counsel: Santamarina y Steta, S.C. Debtors' Financial Advisor: Lazard Freres & Co. LLC Debtors' Mexican Financial Advisor: Alfaro, Davila y Rios, S.C. Debtors' Claim & Notice Agent and Administrative Agent: GCG, Inc. Counsel to ad hoc group of holders of Debtors' 11% senior notes due 2014: David B. Stratton, Esq. Evelyn J. Meltzer, Esq. John H. Schanne II, Esq. PEPPER HAMILTON LLP Hercules Plaza, Suite 5100 1313 N. Market Street P.O. Box 1709 Wilmington, DE 19899-1709 Telephone: (302) 777-6500 Facsimile: (302) 421-8390 E-mail: strattond@pepperlaw.com meltzere@pepperlaw.com schannej@pepperlaw.com - and - Emily A. Bussigel, Esq. Lisa M. Schweitzer, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, NY 10006 Telephone: 212-225-2000 Facsimile: 212-225-3999 E-mail: lschweitzer@cgsh.com ebussigel@cgsh.com Counsel to Ventura Capital Privado, S.A. de C.V.: G. Alexander Bongartz, Esq. Luc A. Despins, Esq. PAUL HASTINGS LLP 75 East 55th Street New York, NY 10022 Tel: 212-318-6000 Fax: 212-319-4090 E-mail: alexbongartz@paulhastings.com lucdespins@paulhastings.com - and - Marc J. Carmel, Esq. PAUL HASTINGS LLP 191 N. Wacker Drive, 13th Floor Chicago, IL 60606 Tel: 312-499-6000 Fax: 312-499-6100 E-mail: marccarmel@paulhastings.com - and - MORRIS NICHOLS ARSHT & TUNNEL LLP Robert J. Dehney, Esq. Daniel B. Butz, Esq. 1201 North Market Street, 18th Floor PO Box 1347 Wilmington, DE 19899-1347 Tel: 302-658-9200 Fax: 302-658-3989 Total Assets as of May 29, 2013: $11,113,564,360 Total Liabilities as of May 29, 2013: $402,278,543 The petition was signed by Gonzalo Alarcon Iturbide, the Debtors' general counsel. A list of the Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Amount of Claim ------ --------------- --------------- Radiomovil Dipsa Litigation $17,950,801.79 S.A. de C.V. Lago Zurich 245 Edif Telcel Ampliacion Granada 11529 Ciudad de Mexico D.F. Mexico Tel: (55) 2581-3863 Fax: (55) 2581-3864 Email: rchavarr@mail.telcel.com Autoarrendadora Integral Trade Claim $1,053,241.84 S.A. de C.V. Negra Modelo 4A Col. Industrial Alce Blanco 53370 Naucalpan de Juarez, MEX Mexico Tel: (55) 5322-4482 Fax: (55) 5322-4460 Email: amendoza@gruposumma.com.mx Pegaso PCS S.A. de C.V. Trade Claim $1,052,970.35 Prolongacion Paseo De La Reforma 1200 Piso 14, Col Cruz Manca 5349 Mexico, D.F. Mexico Tel: (55) 1616-8143 Fax: (55) 1616-5000 Email: pedro.sanjuan@telefonica.com Tp-Link Technologies Trade Claim $709,815.60 de Mexico Iglesia 2 Tone F 201, Tizapan San Angel 1090 Ciudad de Mexico, D.F. Mexico Tel: (55) 2062-0193 Fax: N/A Email: carlos.pedroza@tp-link.com Telefonos De Mexico Trade Claim $497,486.25 S.A.B. de C.V. Attn: Victor Manuel Pacheco Dirso Parque Via 198, Col. Cuauhtemoc 6500 Ciudad de Mexico, D.F. Mexico Tel: (55) 5140-0692 Fax: (55) 5553-28900 Email: cvaron@telmex.com Iusacell S.A. de C.V. Trade Claim $487,686.11 Montes Urales 460, Col. Vista Hermosa 11000 Mexico D.F. Mexico Tel: (55) 5109-5259 Fax: (55) 5109-5772 Email: aruelas@iusacell.com.mx Latino Communications Trade Claim $402,074.80 Corporation 5221 N. O'Connor Blvd, Suite 850 Irving TX 75039 Tel: 0181-8254-30014 Fax: 97-2444-4554 Email: ljimenez@latcomm.net Metro Net S.A. de C.V. Trade Claim $386,739.79 Michoacan 22, Col. Hipodromo 12200 Ciudad de Mexico, D.F. Mexico Tel: (55) 5063-8100 Fax: (55) 5574-8122 Email: guillermo.zarate@redit.com Operbes S.A. de C.V. Trade Claim $381,110.76 A.V. Vasco de Quiroga 2000 Col. Santa Fe 1210 Ciudad de Mexico, D.F. Mexico Tel: (55) 4000-2968 Fax: N/A Email: jcyanezb@bestel.com.mx Shenzhen Guanri Telecom-Tech Trade Claim $339,356.34 3F Building R3-B High Tech 518057 Shenzhen China Tel: (86) 755-2652-0873 Fax: (86) 0755-2652-0885 Email: jeny_tangjw@hotmail.com Hi-Fun de Mexico Trade Claim $277,986.50 S de R.L. de C.V. Tlaxcala 25, Col. Roma Sur 6760 Ciudad de Mexico, D.F. Mexico Tel: (55) 5109-1508 Fax: N/A Email: rogerunidengmail.com Operadora Unefon Trade Claim $268,330.59 S.A. de C.V. Montes Urales 460 Lomas Dc Chapultepec 11000 Ciudad de Mexico, D.F. Mexico Tel: (55) 5109-5259 Fax: N/A Email: aruelas@iusacell.com.mx 3M Mexico S.A. de C.V. Trade Claim $251,387.54 Email: framirezacosta@mmm.com Ensambladora Telefonica Trade Claim $229,296.16 Email: msegura@intelmex.com.mx Conductores Monterrey Trade Claim $217,983.95 S.A. de C.V. Email: jesus.rodriguez@viakon.com Alcatel-Lucent Mexico Trade Claim $217,092.15 S.A. de C.V. Email: e.velazquez@alcatel-lucent.com Tatung Technology Trade Claim $211,800.00 Incorporation Email: cecile_hsieh@tti.tv Soluciones de Vanguardia Trade Claim $207,597.05 S.A. de C.V. Email: rdelgadosolvan.com.mx Microsoft Licensing GP Trade Claim $187,313.74 Email: abacuc@microsoft.com Microsoft Mexico Trade Claim $183,078.02 S de R.L. de C.V. Email: palmazan@microsoft.com Criteria de Mexico Trade Claim $162,423.48 S.A. de C.V. Email: flecumberri@criteria.com.mx Grupo Corgra S.A. de C.V. Trade Claim $150,063.23 Sistemes Integrats Cortes I Trade Claim $149,287.03 Email: emanuel.millan@sicamexico.com.mx JAG Telecom S.A. de C.V. Trade Claim $142,213.68 Email: camachosuagmail.com Gestion de Tecnologia Trade Claim $131,135.50 Especializada Email: marlon.torres@getecsa.com.mx Soporte Y Capacitacion Trade Claim $119,480.00 S.A. de C.V. Email: mregaladosycnet.com.mx ASPE Vigilancia Trade Claim $116,390.90 Y Proteccion Patrim Email: aspe_seguridad.privadahotmail.com Fox Sports Mexico Trade Claim $115,000.00 Distribution LLC NEC de Mexico S.A. de C.V. Trade Claim $113,440.21 Email: fcolin@nec.com.mx Fox Latin American Trade Claim $101,027.37 Channel Inc. Email: diana.delgadofox.com MERCANTILE BANCORP: U.S. Trustee Appoints 3-Member Creditors Panel ------------------------------------------------------------------ Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of Mercantile Bancorp. The Creditors Committee members are: 1. Trapeza Capital Management, LLC as Collateral Manager for Trapeza CDO XIII, Ltd., Attn: Carolyn Thagard 441 Vine Street, Suite 1300, Cincinnati, OH 45202, Tel: 205-877-9765 2. Wilmington Trust Company as Indenture Trustee for Mercantile Bancorp Capital Trust I Attn: Steven Cimalore & Geoffrey Lewis Rodney Square North 1100 N. Market Street, Wilmington, DE 19890 Tel: 302-636-6058 Fax: 302-651-4149 3. US Capital Funding V Ltd., c/o Stone Castle Advisors LLC, Attn: Jim Brennan 152 West 57th Street, 35th Floor New York, NY 10019 Tel: 212-354-6500 Fax: 212-354-6565 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. at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch, Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are proposed attorneys for the Debtor. MERCANTILE BANCORP: Hires DLA Piper as Counsel ---------------------------------------------- Mercantile Bancorp asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ DLA Piper LLP as counsel, nunc pro tunc to the Petition Date. DLA Piper intends to (a) charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered, and (b) seek reimbursement of actual and necessary out-of-pocket expenses. The firm's hourly rates are: Professional Rates ------------ ----- Richard A. Chesley $965 Kimberly D. Newmarch $785 Michael P. Reed $785 Stuart M. Brown $765 Jeffrey L. Hare $755 Lidore A. DeRose $655 Beth K. McAuley $655 James R. Irving $600 Aaron M. Paushter $565 Carolyn B. Fox $240 Kimberly D. Newmarch, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stuart M. Brown, Esq. DLA PIPER LLP 919 North Market Street, Suite 1500 Wilmington, DE 19801 Tel: (302) 468-5700 Fax: (302) 394-2341 E-mail: stuart.brown@dlapiper.com - and - Richard A. Chesley, Esq. Kimberly D. Newmarch, Esq. Aaron M. Paushter, Esq. DLA PIPER LLP (US) 203 N. LaSalle Street, Suite 1900 Chicago, IL 60601 Tel: (312) 368-4000 Fax: (312) 236-7516 E-mail: richard.chesley@dlapiper.com kim.newmarch@dlapiper.com aaron.paushter@dlapiper.com 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. at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch, Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the proposed attorneys for the Debtor. METHOD ART: Court Enters Final Decree Closing Case -------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada has entered a final decree closing the Chapter 11 case of Method Art Corporation. The case was terminated June 14, according to information on the court docket. On May 17, 2013, the Debtor won approval, on a final basis, of its disclosure statement and obtained confirmation of its Plan of Reorganization. The Plan filed on Jan. 6, 2013. The Debtor had advised the Court that the Debtor's Plan has been substantially consummated. On May 17, the Court also ordered that the Plan's proposed post- confirmation sale of property at 940 Columbia Avenue, Riverside, California, is approved, and the Debtor may complete the sale of the property to 940 Columbia, LLC for $5,660,002, or any other agreed upon buyer at a price accepted by the Debtor, without further Court order. About Method Art Method Art Corporation filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-50745) in its home-town in Reno, Nevada, on April 1, 2012. The Debtor disclosed $14.5 million in assets and $11.7 million in debts in its schedules. The Debtor owns six properties in Nevada and California. The properties have a fair market value of $13,600,000 and secure debt totaling $10,480,000. Judge Bruce T. Beesley presides over the case. The petition was signed by Brynn Miner, who has the role of director, president, secretary and treasurer. Kevin A. Darby, Esq., at Darby Law Practice, Ltd. is the general counsel for the Debtor. MF GLOBAL: Corzine Executives Ask Court to Toss Suit ---------------------------------------------------- Jacqueline Palank writing for Dow Jones' DBR Small Cap reports that Jon S. Corzine is asking the bankruptcy court to throw out a lawsuit accusing him and two other former MF Global Holdings Ltd. executives of being responsible for the brokerage's collapse. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MUD KING: NOV Wants Case Dismissed, Says Case Filed in Bad Faith ---------------------------------------------------------------- National Oilwell Varco, L.P., asks the U.S. Bankruptcy Court for the Southern District of Texas to dismiss the Chapter 11 case of Mud King Products, Inc., or in the alternative, appoint a Chapter 11 Trustee. According to papers filed with the Court, Mud King spent years stealing blueprints from NOV and its predecessor entities and using them to make and sell knock-off parts. "When Mud King was finally caught red-handed and sued by NOV last fall, it threw up one obstacle after another to delay the litigation and protect the bad actors, one of whom is a director and equity holder. On the eve of its corporate representative deposition, Mud King not only filed for bankruptcy to avoid the deposition and stay the Litigation, but it passed a resolution indemnifying the same bad actors against costs and damages arising from NOV's suit. At the time it filed its petition, Mud King was solvent, current on its debts, and sitting on sizable retained earnings. According to NOV, Mud King is abusing the bankruptcy process to gain a tactical litigation advantage over NOV. "Mud King is not a financially troubled company needing debt restructuring. Mud King is a company run by crooks in need of new management and a new, legal business model. "Mud King's Chapter 11 case should be dismissed for cause as a bad-faith filing as demonstrated by the illegal activities prompting NOV's suit, its dilatory litigation tactics related to that suit, the eve-of-bankruptcy indemnification of defendant employees, its attempt to force a valuation of NOV's claim without due process, and, most significantly, the fact that Mud King is solvent and not any danger of imminent closure. In the alternative, a Chapter 11 trustee should be appointed as Mud King's current management cannot fulfill the fiduciary duties of a debtor-in-possession." In its response to NOV's motion to dismiss, or in the alternation, to appoint a Chapter 11 Trustee, Mud King Products says it filed the instant case in good faith and continues to fulfill its fiduciary obligations as a debtor in possession. According to the Debtor, no valid basis exists for dismissal or appointment of a trustee. "This is simply another litigation tactic by NOV to continue its pattern of vexatious litigation in order effectively kill the Debtor's business." According to papers filed with the Court, NOV alleges that it learned in August 2012 that one of its employees was providing NOV drawings of mud pump component parts to a Mud King employee. "Because Mud King had already been selling these same parts for over a decade and such parts had been widely produced by manufacturers other than NOV, it is not clear whether any benefit could be derived from such drawings. NOV's employee was allegedly paid $900 for the drawings. NOV filed suit in Harris County District court in September 2012 seeking, among other things, a temporary restraining order ("NOV Litigation"). Mud King attended mediation with NOV which resulted in an Unopposed Temporary Injunction Order requiring that Mud King not use NOV's drawings and fully protecting NOV's interests ("TI"). The NOV Litigation was subsequently removed to Federal District Court where Judge Nancy Atlas adopted the TI, which continues in full force and effect as the Second Amended Unopposed Preliminary Injunction Order (Document #87 in the NOV Litigation). According to the Debtor, the TI as entered by the state court and as affirmed by Judge Atlas focuses on Mud King's use of the drawings and does not prohibit Mud King from continuing its established business with regard to the mud pump parts. Judge Atlas recognized that Mud King had sold and distributed such parts for years, along with other distributors and manufacturers. Thus, preserving NOV's status quo prior to the time the drawings were obtained by Mud King does NOT necessitate a blanket prohibition on the sale or manufacture of such common parts. Claims at Zero The Debtor filed with the Court on July 12 a response to NOV's objection to the Debtor's motion to estimate claim of NOV for purposes of allowance, distribution and voting pursuant to 11 U.S.C. Section 502(c). The Debtor cited the following: 1. An estimation proceeding will not deprive NOV of adequate discovery. According to Mud King, NOV should first be required to meet its own threshold burden of proving the entitlement to trade secret protection and the existence of recoverable damages, as well as all the elements of its other causes of action, prior to being allowed to drain the Debtor's resources through protracted and unnecessary discovery. 2. NOV's objection fails to set forth any right to relief apart from the Injunctive Relief already mandated by Judge Atlas in the Preliminary Injunction. According to Mud King, what is glaringly absent from NOV's objection is any assertion that NOV has been damaged financially through the use of drawings that relate to mud pump parts that have been manufactured and sold by numerous other companies with NOV's knowledge for years. There is nothing in the possession of Mud King that can be obtained through discovery that will prove that NOV's drawings of such widely distributed mud pump parts, some of which are 30 years old or older, constitute trade secrets, nor is any additional discovery necessary to determine the small profit that Mud King made in parts stemming from the disputed drawings. Neither has NOV ever asserted any specific monetary damage in this lawsuit. Thus, Mud King asks that the court estimate NOV's claim at zero for distribution and voting purposes and grant such other and further relief as is just and proper. About Mud King Products Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D. Tex. Case No. 13-32101) on April 5, 2013. The petition was signed by Erich Mundinger as vice president. The Debtor disclosed $18,959,158 in assets and $3,351,216 in liabilities as of the Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden, Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at Hoover Slovacek, LLP, represent the Debtor in its restructuring effort. Judge Karen K. Brown presides over the case. The U.S. Trustee was unable to appoint an official committee of unsecured creditor. MUD KING: Can Employ Marian Ladner as Special Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas authorized Mud King Products, Inc., to employ Marian Ladner, Esq., and Ladner and Associates PC as special counsel for the limited purposes of assisting the Debtor with compliance with required international and US regulatory and trade issues, including US Customs and Border Protection import compliance requirements and other other necessary related representation which may be required. The hourly rates of the Firm are as follows: Marian Ladner, Esq. $635 Brian T. Moffatt, Esq. $550 Thomas Scott III, Esq. $475 Victoria Matthews, Esq. $325 Marsha Nelson $300 Additionally, the Debtor is required to remit to the Firm a retainer in the amount of $20,000 in connection with this representation. Fees and expenses owed to the Firm will be billed in accordance with the Firm's usual billing practices and will not be billed against the Retainer. Once the Firms' services are completed or terminated, any unpaid invoices will be deducted from the Retainer and the balance, if any returned to the Debtor. To the best of the Debtor's knowledge, the Firm and its employees are "disinterested persons" as that term is defined by 11 U.S.C. Sec. 101(14) and as required by Sec. 327(a) of the Code. About Mud King Products Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D. Tex. Case No. 13-32101) on April 5, 2013. The petition was signed by Erich Mundinger as vice president. The Debtor disclosed $18,959,158 in assets and $3,351,216 in liabilities as of the Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden, Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at Hoover Slovacek, LLP, represent the Debtor in its restructuring effort. Judge Karen K. Brown presides over the case. The U.S. Trustee was unable to appoint an official committee of unsecured creditor. MUD KING: Can Employ O'Connor & Associates as Tax Consultants ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas authorized Mud King Products, Inc., to employ O'Connor & Associates as tax consultantss, nunc pro tunc to May 7, 2013, for the limited purpose of protesting the property tax valuation assessed on the industrial lease space, located at 5390 Greens Road, Houston, Texas 77032, for which Mud King is responsible. As reported in the TCR on July 17, 2013, the Debtor has been advised by O'Connor that it will not be charged for expenses. About Mud King Products Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D. Tex. Case No. 13-32101) on April 5, 2013. The petition was signed by Erich Mundinger as vice president. The Debtor disclosed $18,959,158 in assets and $3,351,216 in liabilities as of the Chapter 11 filing. Annie E Catmull, Esq., Melissa Anne Haselden, Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, Esq., at Hoover Slovacek, LLP, represent the Debtor in its restructuring effort. Judge Karen K. Brown presides over the case. The U.S. Trustee was unable to appoint an official committee of unsecured creditor. MUTUAL BENEFITS: Court Denies Bid to Supplement Record on Appeal ---------------------------------------------------------------- Bankruptcy Judge A. Jay Cristol denied the Motion to Supplement Record on Appeal filed by attorneys Sternik & Zeltser and DiBello, Lopez & Castillo, P.A. The attorneys, who purported to represent the Alleged Debtor, Mutual Benefits Offshore Fund, Ltd., previously filed a Notice of Appeal from the Bankruptcy Court's Final Judgment entered on April 25, 2013, in which the Court adjudicated the threshold issue of ownership in favor of the Redmond Group (as that term has been used throughout these proceedings). The Zeltser Group, through its Motion, seeks to supplement the record on appeal with certain items that were never filed with the clerk of court. A copy of the Court's July 12, 2013 Order is available at http://is.gd/rHpIDofrom Leagle.com. About Fisher Island Investments Solby+Westbrae Partners; 19 SHC Corp.; Ajna Brands Inc.; 601/1700 NBC LLC; Axafina Inc.; and Oxana Adler, LLM, filed an involuntary Chapter 11 petition against Miami Beach, Florida-based Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047) on March 17, 2011. On the same date, involuntary Chapter 11 petitions were also filed against the Company's affiliates, Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061). Judge A. Jay Cristol presides over the case. The case was previously assigned to Judge Laurel M. Isicoff. Petitioning creditors are represented by Craig A. Pugatch, Esq., and George L. Zinkler, Esq., at Rice Pugatch Robinson & Schiller, P.A., 101 NE 3 Ave. Suite 1800, Fort Lauderdale FL 33301. John F. O'Sullivan, Esq., at Hogan Lovells US LLP, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,, and Terrance A. Dee, Esq., at DiBello, Lopez & Castillo, P.A., represent Alleged Debtor Fisher Island Investments, Inc., as counsel. Donald F. Walton, the U.S. Trustee for Region 21, appointed James S. Feltman as an examiner in the involuntary cases. Greenberg Traurig, P.A., serves as counsel for the examiner while Leshaw Law, P.A., is the co-counsel. NATIONAL ENVELOPE: Global Settlement Approved by Judge ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that National Envelope overcame opposition from the U.S. Trustee and won court approval on July 19 for a global settlement permitting a sale of the company without objection from the official unsecured creditors' committee. The settlement ensures some recovery for unsecured creditors. According to the report, formally named NE Opco Inc., the company also won final approval for $67.5 million in bankruptcy financing being supplied by Salus Capital Partners LLC. The report notes that the settlement will create a trust for unsecured creditors funded with $250,000 over 10 weeks. If a sale pays off the $67.5 million of bankruptcy financing, the creditors' trust will receive another $500,000. From the first $4 million surplus after repaying bankruptcy financing, secured lenders will receive 75 percent, with the other 25 percent for unsecured creditors. Secured lenders will give 3 percent of additional sale proceeds to unsecured creditors, all in return for the committee's agreement to withhold objection to a sale. The settlement creates a separate $790,000 fund to be used in winding down the Chapter 11 case. The report relates that the U.S. Trustee unsuccessfully argued that a settlement shouldn't be approved and claims waived until after the company describes what the claims might be. The Justice Department's bankruptcy watchdog said that releases of that sort should only be given as part of a Chapter 11 plan. The report says that the company responded by saying that "each layer of the debtors' debt and capital structure" was consenting to the settlement. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NNN PARKWAY: Lender Wants to Foreclose on Georgia Property ---------------------------------------------------------- WBCMT 2007-C31 Amberpark Office Limited Partnership is asking the U.S. Bankruptcy Court for the Central District of California for an order granting relief from the automatic stay with respect to NNN Parkway 400 26 LLC's property located 11720 and 11800 Amber Park Drive in Alpharetta, Georgia. WBCMT, assignee of holder of deed of trust, explains that, among other things: -- WBCMT's interest in the collateral is not adequately protected; and -- the bankruptcy case was filed in bad faith. As reported by the Troubled Company Reporter on July 18, 2013, WBCMT has asked that the Court to dismiss the chapter 11 case of the Debtor. 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. 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. NORSE ENERGY: To Sell New York Gas Leases in August --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Norse Energy Corp. USA, the holder of oil and gas leases on 130,000 acres in central and western New York, is proposing to sell the assets with bids due from potential buyers by Aug. 21. Katy Stech writing for Dow Jones' DBR Small Cap reports that battling a group of upstate New York property owners over natural- gas-drilling rights, officials at Norse Energy argued that the wording of their roughly 1,400 lease agreements gives them the power to extend the life of those leases because they couldn't have anticipated the state's ban on drilling. According to the Bloomberg report, there will be a hearing on July 25 for the bankruptcy judge to approve sale procedures. Norse wants a sale approval hearing on Sept. 24. One or more purchasers may end up buying the leases. The secured lender will have the ability to pay for the assets with debt rather than cash. The Bloomberg report notes that the bankruptcy court extended the company's exclusive right to propose a Chapter 11 plan until Oct. 22. Norse said the New York governor issued an executive order in December 2010 putting a moratorium on hydraulic fracturing. In January 2011, the company sent landowners a letter declaring a so- called force majeure and explaining why it would be unable to commence drilling. About Norse Energy Norse Energy Corp. ASA's U.S. subsidiary holding company, Norse Energy Holdings, Inc., filed a voluntary petition for Chapter 11 bankruptcy protection (Bankr. W.D.N.Y. Case No. 12-13695) on Dec. 7, 2012, estimating less than $50,000 in assets and less than $100,000 in liabilities. The Debtor is represented by Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, New York. Judge Carl L. Bucki presides over the case. The Company has a significant land position of 130,000 net acres in New York State with certified 2C contingent resources of 951 MMBOE as of June 30, 2012. NORTEL NETWORKS: Counsel Withdraws Appearance --------------------------------------------- Nortel Networks Inc., et al., notified the U.S. Bankruptcy Court for the District of Delaware that the appearance of Kerrin Klein, Esq., of Cleary Gottlieb Steen & Hamilton LLP is withdrawn as counsel for the Debtors. The Debtors continue to be represented by James L. Bromley, Esq., and Lisa M. Schweitzer, Esq., at CLEARY GOTTLIEB STEEN & HAMILTON LLP, in Wilmington, Delaware, and Ann C. Cordo, Esq., Eric D. Schwartz, Esq., Derek C. Abbott, Esq., and Tamara K. Minott, Esq., at MORRIS, NICHOLS, ARSHT & TUNNELL LLP, in Wilmington, Delaware. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. Judge Gross and the court in Canada scheduled trials in 2014 on how to divide proceeds among creditors in the U.S., Canada, and Europe. NORTEL NETWORKS: Long-Term Disabled Workers Entitled to Severance ----------------------------------------------------------------- Bankruptcy Judge Kevin Gross granted the motions filed by certain long-term disabled individuals generally stylized as "Nortel US Employee, Motion Compelling Debtors to Admit My Claim for Severance as Valid per Nortel Networks Severance Allowance Plan and Issue Payment; the Motion Compelling Debtors to Issue Payment for Severance Per Nortel Networks Severance Allowance Plan Upon Debtors Planned Termination of My Employment on June 30, 2013 by Mark R. Janis, a Nortel U.S. LTD Employee" filed on June 3, 2013; and all Joinders to the Janis Motion. The so-called LTD Employees argue that they are entitled to receive severance pay from Nortel because they meet all the criteria in the Debtors' Severance Plans. The Debtors responded that Nortel's historical practice has always been to deny LTD Employees any severance unless they returned to active status at work and were subsequently terminated. Judge Gross held, however, that the Severance Plan's treatment of LTD Employees is "at best ambiguous and, at worst, non-existent." Additionally, Judge Gross said, all other documentation indicated that the LTD Employees would be beneficiaries under the Severance Plan. "In light of this ambiguity and the reliance that LTD Employees placed on these documents, it would be unjust for the Court to hold that the LTD Employees are not covered by the Severance Plan. Therefore, this Court finds that the LTD Employees are covered under the Severance Plans and should receive an allowed general unsecured claim to represent their interest in severance pay," Judge Gross said. A copy of Judge Gross' July 16, 2013 Memorandum Opinion is available at http://is.gd/mwqWhHfrom Leagle.com. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. U.S., U.K. and Canada creditors of Nortel Networks were engaged in mediation. Mediation, however, failed, leaving courts in the U.S. and Canada with the chore of deciding how to divide $9 billion generated from the liquidation of assets among creditors in the U.S., Canada and Europe. NORTEL NETWORKS: Hain Capital, Solus & TRC Buy Claims ----------------------------------------------------- Several claims filed in the U.S. bankruptcy cases of Nortel Networks Inc. have changed hands, according to court documednts filed this month in Nortel's Chapter 11 case: Transferor Transferee Amount of Claim ---------- ---------- --------------- Daniel G. Ray Hain Capital Holdings Not disclosed Oral Sezer Hain Capital Holdings Not disclosed Continuous Computing TRC Master Fund LLC $41,000 Corporation Tavares, Antonio Fair Harbor Capital $33,508 Cesar LLC Heinrich, Christopher Solus Recovery Fund II $7,404 Master LP Email:compliance@soluslp.com Hain Capital Holdings Solus Recovery Fund II $47,343 LLC Master LP Walker, Judith F Solus Recovery Fund II $24,700 Master LP Reeves, Rita Solus Recovery Fund II $26,774 Master LP Robinson, Robert J. Solus Recovery Fund II $66,000 III Master LP Reinke, Karl Solus Recovery Fund II $29,720 Master LP Kreiger, Jerry L. Solus Recovery Fund II $172,300 Master LP Weiss, Howard Eric Solus Recovery Fund II $31,536 Master LP Theresa North Hain Capital Holdings Not disclosed Bobbie Lambert Hain Capital Holdings Not disclosed Christal Kemp Hain Capital Holdings Not disclosed Timothy Hamill Hain Capital Holdings Not disclosed Terrence S. Campbell Hain Capital Holdings Not disclosed Donald S. Alderman Hain Capital Holdings Not disclosed Vincent Baumann Hain Capital Holdings Not disclosed Scott Clark Hain Capital Holdings Not disclosed John E. Garrison Hain Capital Holdings Not disclosed Linda F. Cooper Hain Capital Holdings Not disclosed Wanda R. Grammer Hain Capital Holdings Not disclosed James Broom Hain Capital Holdings Not disclosed Paul Dickerson Jr. Hain Capital Holdings Not disclosed Paul A. Parsons Hain Capital Holdings Not disclosed Keith Johnson Hain Capital Holdings Not disclosed Katina Joyner Hain Capital Holdings Not disclosed About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. U.S., U.K. and Canada creditors of Nortel Networks were engaged in mediation. Mediation, however, failed, leaving courts in the U.S. and Canada with the chore of deciding how to divide $9 billion generated from the liquidation of assets among creditors in the U.S., Canada and Europe. NORTH AMERICAN ENERGY: Moody's Changes Ratings Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed North American Energy Partner's (NAEP) B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating (PDR), and Caa1 senior unsecured notes rating. The outlook was changed to stable from negative. The Speculative Grade Liquidity rating of SGL-3 was affirmed. "The change in outlook to stable reflects NAEP's improved liquidity and leverage with the sale of its piling division," said Terry Marshall, Moody's Senior Vice President. "However, the sale increases NAEP's concentration in the Canadian oil sands, a sector in which NAEP's anticipated work flow can change suddenly as its customers adjust their annual budgets." Downgrades: Issuer: North American Energy Partners, Inc. Senior Unsecured Regular Bond/Debenture Apr 7, 2017, Downgraded to a range of LGD4, 65 % from a range of LGD4, 63 % Outlook Actions: Issuer: North American Energy Partners, Inc. Outlook, Changed To Stable from Negative Affirmations: Issuer: North American Energy Partners, Inc. Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Corporate Family Rating, Affirmed B3 Senior Unsecured Regular Bond/Debenture Apr 7, 2017, Affirmed Caa1 Ratings Rationale: The B3 Corporate Family Rating reflects NAEP's high concentration in the Canadian oil sands sector and reliance on a few customers that have the ability to unexpectedly defer and change the scope of work performed by NAEP leading to sudden declines in revenue and cash flow. The B3 rating is supported by the company's low leverage as measured by debt to EBITDA and long-standing customer relationships as a reliable service provider in the oil sands mining sector. The SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity. Pro forma for the closing of the July 2013 piling asset sale, Moody's expects NAEP to have CAD82 million available, after CAD3 million in letters of credit, under its CAD85 million revolving credit facility due October 2014. Moody's expects CAD40 million of negative free cash flow through to June 30, 2013 to be funded with equipment sales. NAEP should be in compliance with its three financial covenants through this period. The company has access to modest alternate liquidity through the sale of underutilized or old equipment. The CAD225 million senior unsecured notes are rated Caa1, one notch below the CFR, reflecting the priority ranking of the company's secured CAD85 million revolving credit facility. The stable outlook reflects Moody's expectation that leverage will remain below 4x and that margins will improve over the next few years. The rating could be raised if it appears that NAEP is able to increase its diversification away from oil sands mining and diversify its customer base while maintaining debt to EBITDA below 4x. The rating could be downgraded if it appears that debt to EBITDA is likely to rise towards 5x or if liquidity is constrained and will be insufficient to meet the company's anticipated needs over the succeeding 12 to 15 month period. The principal methodology used in this rating was Global Oilfield Services published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. North American Energy Partners Inc. (NAEP), headquartered in Edmonton, Alberta, primarily serves the Canadian oil sands sector by providing services such as overburden removal, tailings management, site reclamation, clearing and site preparation. NORTHERN BEEF: Files for Bankruptcy in South Dakota --------------------------------------------------- Northern Beef Packers LP, which operates a beef processing facility that opened in October 2012, sought bankruptcy protection from creditors (Bankr. D.S.D. Case No. 13-bk-10118). Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that the company, based in Aberdeen, South Dakota, listed debt of as much as $50 million and assets of as much as $100 million in Chapter 11 documents filed July 19 in U.S. Bankruptcy Court in its home town. Northern Beef Packers, originally envisioned in 2007, faced a "few setbacks," including flooding rains and the global recession, and began production on Oct. 17, 2012, according to its website. The report notes that the company fired 108 of its 420 employees in April because of a working capital shortfall, the website of the Mitchell, South Dakota, newspaper Daily Republic reported July 22. Northern Beef Packers owes its 20 largest unsecured creditors about $8.1 million, court papers show. The company doesn't expect that any funds will be available to distribute to unsecured creditors after any exempt property is excluded and administrative expenses are paid. OVERSEAS SHIPHOLDING: Sonar Credit and DACA Buy Claims ------------------------------------------------------ Two claims filed against Overseas Shipholding Group Inc. changed hands, according to court documents filed July 16 and 17 in the Debtor's case: Transferor Transferee Amount of Claim ---------- ---------- --------------- LSI Logistics LLC DACA VI LLC $3,881 City Fire Equipment Co Sonar Credit Partners II LLC $5,598 About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. PACIFIC THOMAS: Amends Disclosure Statement to Address Objections ----------------------------------------------------------------- Pacific Thomas Corporation amended the disclosure statement explaining its Plan of Reorganization to address objections raised by two of its secured creditors. The two secured creditors, Private Mortgage Fund LLC and Summit Bank, complained that the previous version of the Disclosure Statement did not contain "adequate information" as required by the Bankruptcy Code. Specifically, Private Mortgage complained that the prior Disclosure Statement provides insufficient -- and in some cases downright misleading -- information regarding, among other things, the nature of the PTC's and its insiders' relationship with Pacific Thomas Ventures, the events leading to PTC's bankruptcy, PTC's previous efforts to retain refinancing loans, the true nature of the security interests held on the real property commonly known as 2783 East 12th Street, 2801 East 12th Street, and 1111 29th Avenue, in Oakland, California, and the Debtor's operations. Summit Bank pointed out that an examination of a conditional commitment letter mentioned in the previous Disclosure Statement showed that the Plan cannot be confirmed based on a purported loan from Thorofare Capital. The current version of the Disclosure Statement, dated July 11, 2013, proposes a restructuring plan with a refinance or sale within 60 months. The Debtor seeks to accomplish payments under the Plan by restructuring notes secured by real property of the estate held by Summit Bank, Bank of the West, Jacol, and Private Mortgage, by restructuring notes secured by personal property and real property of the estate, by restructuring liens levied by the real estate taxing authorities, and by a full payoff off all secured and general unsecured creditors within sixty months. The secured creditors as well as the general unsecured creditors of the estate will be paid the present value of their claim at a market interest rate over a 60-month period through net income generated from the Pacific Thomas Properties and/or through a refinance or sale of the Pacific Thomas Properties. The Effective Date of the proposed Plan is projected to be September 31, 2013. The first payment due under the plan based upon the projected Effective Date is September 31. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/PACIFICTHOMASds0711.pdf Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the Northern District of California - Oakland Division, scheduled the hearing to consider approval of the Amended Disclosure Statement for Aug. 15, 2013, at 10:30 AM. Last day to file objections is Aug. 8. Anne-Leith Matlock, Esq., at Matlock Law Group, P.C., in Walnut Creek, California, represents the Debtor. Scott E. Gizer, Esq. -- sgizer@earlysullivan.com -- Mary C.G. Kaufman, Esq. -- mkaufman@earlysullivan.com -- at Early Sullivan Wright Gizer & McRae LLP, in Los Angeles, California, represent Private Mortgage. Eric A. Nyberg, Esq. -- e.nyberg@kornfieldlaw.com -- and Chris D. Kuhner, Esq. -- c.kuhner@kornfieldlaw.com -- at Kornfield, Nyberg, Bendes & Kuhner, P.C., in Oakland, California, represent Summit Bank. About Pacific Thomas Corp. Walnut Creek, California, Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C., serves as general counsel. The petition was signed by Jill V. Worsley, COO, secretary. Kyle Everett was named Chapter 11 Trustee of the Debtor. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PATRIOT COAL: Investors Slam Execs' Bid to Ditch Fraud Suit ----------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that shareholders suing two former Patriot Coal Corp. executives urged a Missouri federal judge to keep the putative class action alive, saying they properly alleged that the brass knew of the now-bankrupt company's lousy financial condition when it implemented a $45 million cleanup of selenium discharges. According to the report, the shareholders argued that U.S. District Judge Stephen N. Limbaugh Jr. should reject the executives' motion to dismiss the suit, which was based on the argument that the shareholders did not adequately allege scienter. The suit was launched in September, the report said. The case is Espinoza v. Whiting et al., Case No. 4:12-cv-01711 (E.D. Mo.). About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PENSON WORLDWIDE: Seeks Court Approval of ADR Procedures -------------------------------------------------------- Penson Worldwide, Inc., and its affiliated debtors seek the Court's authority to implement alternative dispute resolution procedures to facilitate the efficient resolution of the unliquidated, complex or litigation claims, referred to as Designated Claims, filed against them. The Debtors seek to resolve claims and distribute the proceeds from the liquidation of their assets pursuant to the Plan as efficiently and expeditiously as possible. Therefore, the Debtors have begun their claims reconciliation efforts, and although there have only been approximately 400 proofs of claim filed in the Chapter 11 cases, of these, approximately 150 proofs of claim are either unliquidated, have what the Debtors believe to be an excessive and/or unsubstantiated claim amount, present complex issues of law and/or fact, or some combination (or all) of the foregoing. These disputed claims, if left unresolved, will undermine the Debtors' ability to distribute meaningful value to their creditors in an acceptable timeframe, says counsel for the Debtors, Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP. According to Mr. Enos, the proposed ADR Procedures provide a structure that will (a) promote direct settlement discussions and allow claimants the opportunity to fully development and support their claims; and (b) absent a settlement as a result of direct discussions between the parties, promote resolution of the Designated Claims through mediation or arbitration with the assistance of a neutral outside party. The proposed ADR Procedures are modeled after similar procedures approved in a number of large and complex chapter 11 cases. The Debtors have consulted with the Committee with respect to the ADR Procedures, and the Committee supports the relief requested. Penson is also represented by Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., Ashley E. Markow, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Arbco Chapter 7 Trustee Wants Stay Lifted ----------------------------------------------------------- Richard O'Connell, as Chapter 7 trustee for the New York bankruptcy estate of Arbco Capital Management LLP, asks the U.S. Bankruptcy Court for the District of Delaware to vacate the automatic stay to permit the New York Bankruptcy Court to fix his claim against one of the Debtors, Penson Financial Services, Inc., in connection with a pre-petition adversary proceeding (O'Connell v. Penson Financial Service Inc., Adv. Pro. No. 09-01519), currently pending in the United States Bankruptcy Court for the Southern District of New York (Case No. 07-13283). The NY Trustee has asserted a claim for more than $10 million, arising out of litigation relating to Penson's prior involvement with Arbco and its affiliates. Penson allegedly received a total sum of at least $10,927,500 from Arbco and its affiliates within the two year period prior to the commencement of bankruptcy proceedings. Early on, Penson moved immediately to dismiss the complaint and thereafter moved to withdraw the reference to the District Court. The motion to withdraw the reference was denied pursuant to decision dated July 12, 2012. Consequently, a Second Amended Complaint was filed, and on September 27, 2012, Penson renewed its motion to dismiss the Second Amended Complaint. Scott J. Leonhardt, Esq. at The Rosner Law Group LLC, asserts that denial of stay relief imposes undue hardship on the NY Trustee. Notably, he says, the administration of the Arbco bankruptcy cannot be completed until the claim against Penson is fully liquidated. This may take significantly more time if the parties start anew in Delaware rather than proceeding to conclusion in New York, he notes. Additionally, the costs to the Arbco estate will be higher as the NY Trustee may be required to retain two sets of attorneys to deal with litigation in both states. In a very real sense, the inability to complete the matter in New York could exhaust all available assets at the NY Trustee's disposal, Mr. Leonhardt contends. "[W]hile it is difficult to predict the outcome of decisions in litigated matters, the consensus appears that one or more of the NY Trustee's claims will survive. Thus, there is a reasonable likelihood of some success, further warranting stay relief," Mr. Leonhardt asserts. Mr. O'Connell filed his request along with a companion motion to shorten notice period by one day. On July 11, 2013, the Court entered an order Shortening Notice Period. A hearing on the motion will be held on July 31, 2013, at 10:00 a.m. (EST) before the Honorable Peter J. Walsh at the United States Bankruptcy Court for the District of Delaware. Objections to the Motion must be filed on or before July 25, 2013, at 10:00 a.m. (Eastern Time). Frederick B. Rosner, Esq., and Scott J. Leonhardt, Esq. at The Rosner Law Group LLC, and Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP also represent Mr. O'Connell. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Asks Court to Further Extend Exclusive Periods ---------------------------------------------------------------- Penson Worldwide, Inc., and its affiliated debtors asks the Court to enter an order further extending the periods within which only they may file a Chapter 11 plan and solicit acceptances of the Plan by 60 days. By order dated June 7, 2013, the Court approved the Debtors' Third Amended Disclosure Statement with respect to their Joint Liquidation Plan as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Debtors are in the process of soliciting acceptances of the Plan, and the hearing to consider confirmation of the Plan is currently scheduled for July 31, 2013, at 10:00 a.m. (prevailing Eastern Time). Unless extended, the Debtors' Plan Period and Solicitation Period will expire on July 12, 2013, and September 9, 2013, respectively. The Debtors seek to extend the Plan Period and Solicitation Period through and including September 10, 2013, and November 8, 2013, respectively, without prejudice to their right to seek further extensions of the Exclusive Periods, as may be appropriate under the circumstances. This is the Debtors' second request to extend the Exclusive Periods. Although the Debtors believe that the Plan will be confirmed in the near future, the Debtors are seeking to extend the Exclusive Periods out of an abundance of caution. To the extent any issues arise with respect to confirmation of the Plan, the extension of the Exclusive Periods will promote an orderly environment within which the relevant parties can work out a consensual resolution of those issues, Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, relates. The Debtors are also represented by Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., Ashley E. Markow, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PITT PENN: Chapter 11 Trustee Wants Pavia as Litigation Counsel --------------------------------------------------------------- Norman Pernick, the Chapter 11 trustee for Pitt Penn Holdings Co., et al., asks the U.S. Bankruptcy Court for the District of Delaware, in a supplemental application, to modify the retention of Pavia & Harcourt LLP as special litigation counsel. The trustee explains that modification of P&H's employment as special litigation counsel to the Debtor is needed to provide that P&H is being retained as special litigation counsel of the trustee. P&H will, among other things: -- continue prosecuting the adversary proceedings the Debtor is currently involved with; and -- take over prosecution of additional matters the Debtor previously brought and which share many of the same factual and legal issues as the litigation matters. As reported by the Troubled Company Reporter on July 17, 2013, the Debtors related that it had filed a Chapter 11 Plan while Omtammot LLC have proposed competing plans of reorganization. These competing Plans and litigation from the Omtammot Plan and other issues between the Debtor and Omtammot cause the cases to progress at a pace which prompted the Court to issue an oral show cause order as to why the cases must not be converted to cases under Chapter 7 of the Bankruptcy Code. Cole Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy counsel for the Debtors, and P&H will make every effort to minimize duplication of their work. To the best of the Chapter 11 trustee's knowledge, P&H has not provided services to the Debtor's creditors, equity security holders, or other parties in interest, or their respective attorneys, in any matter relating to the Debtors or their estates. About Pitt Penn and Industrial Enterprises Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each filed voluntary petitions for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11475 and 09-11476) on April 30, 2009. Industrial Enterprises of America, Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009. EMC Packaging, Inc., filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide Industries, LLC, and Today's Way Manufacturing LLC, each filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11587 and 09-11586) on May 6, 2009. PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of IEAM. The cases are jointly administered under Case No. 09-11475. Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington, Del., represents the Debtors as counsel. In its petition, Industrial Enterprises disclosed total assets of $50,476,697 and total debts of $17,853,997. Industrial Enterprises originally operated as a holding company with four wholly owned subsidiaries, PPH, EMC, Unifide, and Today's Way. PPH, through its wholly owned subsidiary, PPO, was a leading manufacturer, marketer and seller of automotive chemicals and additives. EMC's original business consisted of converting hydrofluorocarbon gases R134a and R152a into branded private label refrigerant and propellant products. Unifide was a leading marketer and seller of automotive chemicals and additives. Today's Way manufactured and packaged the products which were sold by Unifide. Norman L. Pernick was appointed as the chapter 11 trustee for the Debtors. The trustee tapped Cole, Schotz, Meisel, Forman & leonard, P.A., as counsel, and CohnReznick LLP as his exclusive financial advisor. PMC MARKETING: Office Park's Summary Judgment Bid Denied -------------------------------------------------------- Bankruptcy Judge Brian K. Tester denied the defendant's Motion for Summary Judgment in the lawsuit, Noreen Wiscovitch Rentas, as Chapter 7 Trustee of PMC Marketing Corp., Plaintiff vs Office Park Inc., et al., Defendants, Adv. No. 12-0075 (Bankr. P.R.). PMC Marketing Corp. filed a voluntary Chapter 11 bankruptcy petition on March 18, 2009 (Bankr. P.R., Case No. 09-02048). The case was converted into a Chapter 7 proceeding on May 21, 2010. The adversary complaint was filed by the Chapter 7 Trustee on March 2, 2012 to recover funds to the estate from the Defendant. The Defendant asserted that its executory contract was assumed by the Debtor in October 2009, and the alleged payment of $35,000 was not paid by the Debtor to it and was within 90 days of the Chapter 7 case conversion. Judge Tester held that the Plaintiff presented sufficient evidence to demonstrate that there are genuine issues of material facts in dispute for a trial. The Bankruptcy Court's July 5, 2013 Opinion and Order is available at http://is.gd/OyCLEGfrom Leagle.com. The Chapter 11 Trustee's contact information is: Noreen Wiscovitch-Rentas PMB 136 400 Calaf Street San Juan, PR 00918 E-mail: noreen@nwr-law.com Phone: (787)946-0132 PROCTOR HOSPITAL: S&P Cuts Rating on IL's Refunding Bonds to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term rating to 'BB-' from 'BB+' on the Illinois Health Facilities Authority's $22.5 million series 2006A fixed-rate revenue refunding bonds issued for Proctor Hospital. The outlook is negative. "The rating action reflects our view of the hospital's considerable drop in cash as a result of additional spending required for its electronic health records (EHR) installation, which in turn resulted in an increase in receivables and operating losses in fiscal 2012," said Standard & Poor's credit analyst Avanti Paul. The 'BB-' rating further reflects S&P's view of Proctor's: -- Small, competitive service area; -- High reliance on the top 10 physician admitters; -- Operating losses in fiscal 2012 that have continued in fiscal 2013 to date; -- Covenant violations for the hospital's privately placed debt although the hospital has received waivers; -- Cash decline resulting from unanticipated spending related to the EHR installation and consequent growth in receivables; -- Moderately high debt levels; and -- High average age of plant. The negative outlook reflects S&P's view of the hospital's balance sheet deterioration and operating losses, primarily resulting from the hospital's EHR installation in 2012, and volume softness in fiscal 2013 to date. READER'S DIGEST: DEMG Files Liquidation Plan -------------------------------------------- Reader's Digest's affiliate, Direct Entertainment Media Group, Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a plan of liquidation and accompanying disclosure statement. DEMG is a non-operating subsidiary of RDA Holding having sold certain of its assets and ceased all operations in July 2012. Prior to July 2012, DEMG's primary business included the sale of the Ab Circle Pro and certain other direct marketed products. After the sale of the Ab Circle Pro, DEMG decided to file its Chapter 11 case to liquidate its liabilities and maximize its remaining assets, rather than try and reorganize or rehabilitate any ongoing business. Accordingly, DEMG has decided to wind up its business and affairs and proposes the DEMG Plan to effectuate a wind up of its affairs leading ultimately to DEMG's dissolution as a corporation under applicable law. DEMG proposes its plan of liquidation to maximize distributions to its creditors. The DEMG Plan implements several consensual settlement agreements negotiated among DEMG, the Reorganization Plan Debtors, the Official Committee of Unsecured Creditors, the United States Federal Trade Commission, and DEMG's major stakeholders, including Wells Fargo Principal Lending, LLC, and an ad hoc committee comprised of holders of more than two-thirds of the Debtors' Floating Rate Senior Secured Notes due 2017. These agreements provide for, among other things: (a) the allowance of a general unsecured claim in favor of DEMG against Reader's Digest in the amount of $7,290,327; (b) an advance from Reader's Digest, if needed, in an amount up to $50,000 to defray the costs of implementing and administering the DEMG Plan and the wind down of DEMG's affairs; and (c) the waiver by the Reorganization Plan Debtors of any and all claims against DEMG based upon the payment by the Reorganization Plan Debtors of DEMG's allocable share of the costs of administering the Chapter 11 Cases incurred prior to the Reorganization Plan Effective Date. Substantially all of DEMG's assets are subject to valid and perfected liens held by the DIP Lenders, 2012 Senior Credit Agreement Lenders and the Senior Noteholders, which require payment in full prior to distributions to holders of unsecured claims against DEMG. The Reorganization Plan provides that those liens will be released on the Reorganization Plan Effective Date. DEMG's principal asset is its $7,290,327 claim against RDA, with respect to which DEMG is expected to receive a cash distribution of approximately $250,000. That distribution would be subject to the liens of the DIP Lenders, Senior Lenders and Senior Noteholders and would not be available for distribution to DEMG's unsecured creditors. Moreover, while the Senior Noteholders have a substantial unsecured claim against DEMG, they have also agreed to waive their distribution on account of their Pro Rata share of cash otherwise distributable to general unsecured creditors of DEMG. While a portion of the cash distribution to be received by DEMG under the Reorganization Plan may be consumed to pay higher priority administrative claims before payments can be made to DEMG's general unsecured creditors, the Parent Advance provides additional assurance that most, if not all, of the anticipated $250,000 distribution will be available for distribution to holders of Allowed General Unsecured Claims against DEMG. The DEMG Plan provides for monetization of DEMG's limited remaining property interests and the distribution of the proceeds to holders of Allowed Claims, including the distribution of all Available Cash to holders of Allowed General Unsecured Claims. The Available Cash will be held in a segregated non-interest bearing account maintained by Reader's Digest as Disbursing Agent. Reasonable expenses incurred by Reader's Digest, as Disbursing Agent, will be reimbursed by the Liquidating Debtor. DEMG believes that Confirmation of the DEMG Plan, will maximize distributions to creditors and that any alternative plan or move to convert the DEMG Case to a case under chapter 7 of the Bankruptcy Code or dismissal of the DEMG Case could result in significant delays, litigation and additional costs. DEMG asks the Court to approve the Disclosure Statement as having adequate information pursuant to Section 1125 of the Bankruptcy Code. DEMG also asks the Court to approve procedures governing the solicitation and confirmation of its Liquidation Plan. A hearing on DEMG's request will be on Aug. 21, 2013 at 10:00 a.m. (Eastern Time). Objections are due Aug. 16. A full-text copy of the Liquidation Plan, dated July 17, 2013, is available for free at http://bankrupt.com/misc/DEMGds0717.pdf Barry N. Seidel, Esq., Katie L. Weinstein, Esq., and Evan J. Zucker, Esq., at DICKSTEIN SHAPIRO LLP, in New York, and Joseph H. Smolinsky, Esq., Marcia L. Goldstein, Esq., and Matthew P. Goren, Esq., at WEIL, GOTSHAL & MANGES LLP, in New York, represent DEMG. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013, with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. The plan in the new Chapter 11 case provides that holders of allowed general unsecured claims in such sub-class will receive their pro rata share of the GUC distribution; holders of allowed general unsecured claims of Reader's Digest will also receive their pro rata share of the RDA GUC distribution and the senior noteholder deficiency claims in such sub-class will be deemed waived solely for purposes of participating in the GUC distribution and the RDA GUC distribution. The Official Committee of Unsecured Creditors is represented by Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped Alvarez & Marsal North America, LLC, as financial advisors. SPORTSMAN'S LINK: 11th Cir. Upholds Order vs Owner in Legal Suit ---------------------------------------------------------------- The U.S. Court of Appeals for the Eleventh Circuit upheld a district court's grant of summary judgment in favor of attorneys in a legal malpractice lawsuit brought by the owner of Sportsman's Link Inc., Sohail Abdulla. Mr. Abdulla initially contended that his attorney, Scott Klosinski and the law firms of Klosinski Overstreet, LLP, and Johnston, Wilkin & Williams committed legal malpractice and breached their fiduciary duties to him by advising him to sign a personal guaranty for his business and by allowing default judgment to be entered against him while he was out of the country. In a July 10, 2013 Order available at http://is.gd/sidIv3from Leagle.com, the Eleventh Circuit sided with the district court's previous finding and concluded that Mr. Abdulla has not shown that any alleged wrongdoing by his attorneys proximately caused his damages. The appeals case is SOHAIL M. ABDULLA, Plaintiff-Appellant, v. SCOTT J. KLOSINSKI, KLOSINSKI OVERSTREET, LLP, JOHNSTON, WILKIN & WILLIAMS, Defendants-Appellees, THE ESTATE OF WILLIAM J. WILLIAMS, Defendant, Case No. 12-15448 (11th Cir.). About Sportsman's Link Sportsman's Link Inc., an Augusta, Georgia-based manufacturer and seller of fishing and hunting equipment, and firearms, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No. 07-10454) on March 13, 2007, estimating $1 million to $100 million in both assets and debts. On Oct. 9, 2007, the Debtor filed a Chapter 11 Plan and Disclosure Statement. On June 18, 2008, Georgia Bank and Trust Company of Augusta sought relief from the automatic stay. On July 22, 2008, the case was converted to Chapter 7; Edward J. Coleman was appointed as Chapter 7 trustee; and GB&T's Motion for Relief from Stay was granted. SUN MERGER: $100MM Loan Increase No Impact on Moody's Ratings ------------------------------------------------------------- In an Issuer Comment, Moody's Investors Service stated that last week's $100 million increase to Sun Merger Sub, Inc.'s note offering to $900 million from $800 million does not affect the ratings of Sun Merger or Smithfield Foods, Inc. Proceeds from the offering will partially fund the pending $7.1 billion leveraged acquisition of Smithfield by Shuanghui International Holdings Limited, the parent of Sun Merger. The new notes will be issued in two tranches of 5-year 5.250% senior notes and 8-year 5.875% senior notes and will become direct obligations of Smithfield through the merger of Sun Merger into Smithfield. Shuanghui will not guarantee any new or existing debt at Smithfield. Moody's Issuer Comment, "Increase in Sun Merger's note offering to $900 million does not affect ratings." Sun Merger Sub, Inc. (B1 Corporate Family Rating) is a wholly owned subsidiary of Shuanghui International Holdings, Inc. and was formed solely for the purpose of acquiring Smithfield. Shuanghui, based in the Cayman Islands, is an investment holding company that controls the largest poultry producer in China (Henan Shuanghui Investment & Development Co., Ltd). Shuanghui, currently an important Smithfield export customer, intends to operate Smithfield as a wholly-owned independent operating subsidiary. Smithfield Foods, Inc. (Ba3 Corporate Family Rating, under review for downgrade), headquartered in Smithfield, Virginia, is the world's largest pork producer and processor. Sales for the fiscal year ended April 28, 2013 were approximately $13.2 billion. TALLGRASS ENERGY: Decision on CCAA Application Deferred to July 26 ------------------------------------------------------------------ Tallgrass Energy Corp. disclosed that, the Company's application for protection under the CCAA was heard on July 24 by the Alberta Court of Queen's Bench and the Court has reserved its decision in respect of the Company's CCAA application and the competing application of the secured creditors to appoint a receiver until Friday, July 26, 2013 at 3:00 p.m. The interim stay of proceedings obtained from its creditors on July 17, 2013 was further extended until Friday July 26, 2013 pursuant to an order of the Court granted on July 24. The Interim Stay has been put in place by the Court in order to allow the Company to stabilize its affairs. 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 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. The Interim Stay stays creditors and others from enforcing rights against TEC. TEC will issue a further press release on or before July 26, 2013 which will provide an update on its application for protection under the CCAA. 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. 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. TATA CHEMICALS: Moody's Assigns First-Time Ba3 Corp Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 Corporate Family Rating to Tata Chemicals North America Inc. Moody's also assigned a Ba3 rating to the firm's $315 million term loan B due 2020 and Ba3 rating to the $25 million revolving credit facility due 2018. Proceeds from the term loan will be used to refinance the existing credit facility and meet transaction costs and expenses. The revolver is not expected to be drawn at closing. A speculative grade liquidity rating of SGL-2 was also assigned. The ratings are subject to a final review of documentation and the closing of the financing with the terms and structure described to Moody's. The outlook is stable. The following summarizes the ratings activity: Tata Chemicals North America, Inc. Ratings assigned: Corporate Family Rating -- Ba3 Probability of Default Rating -- Ba3-PD $315 mm Sr secured term loan B due 2020- Ba3 (LGD4, 59%) $25 mm Sr secured revolving credit facility due 2018 -- Ba3 (LGD4, 59%) Speculative Grade Liquidity - SGL-2 Ratings outlook -- Stable Ratings Rationale: TCNA's Ba3 CFR reflects the company's high margins, reasonable leverage and strong cash flow from operations. EBITDA margins for the past four years have been in the low 30% range, while the company has produced consistent amounts of positive cash flow from operations. The ratings are supported by TCNA's market share in the soda ash business, and synergies with its parent, Tata Chemicals Limited, which is also a producer of soda ash. The low cost production capabilities, compared to synthetic soda ash producers, as a result of the long-lived trona reserves at its Green River Basin mine, and significant barriers to entry based on permitting and high capital requirements to start a new mine also support the ratings. The company's long lasting customer relationships with leading North American consumers of soda ash and joint ventures with two large customers that support ongoing relationships are also favorable to steady ongoing earnings. The ratings are constrained by the company's relatively modest size (approximately $500 million in revenues) when compared to its peers within the chemicals space, its single commodity product line, customer concentration (almost 50% of revenues from the top two customers, although the ANSAC business represent sales to many international customers), and single production site risk. TCNA is a holding company that is reliant on its operating subsidiaries for cash flow to service its debt. Moody's assumes that the company will retain sufficient cash balances to service its debt during periods when the cash flow from its subsidiaries' operations decline or experience volatility. All of TCNA's soda ash operations are contained in its 75% owned indirect subsidiary, Tata Chemicals (Soda Ash) Partners (TCSAP), and two joint ventures in which TCSAP participates. TCNA fully consolidates the operating results of TCNA, and as a result, when calculating credit metrics, Moody's adjusts for the minority interest to more accurately reflect the profits and cash flows of TCSAP available to service TCNA's debt. Leverage is estimated to be 4.2x as of March 31, 2013, after Moody's standard analytical adjustments which add $119 million to debt for unfunded pension liabilities and operating leases as well as adjust EBITDA for earnings attributable to the 25% minority interest in TCSAP Holdings held by Owens-Illinois. The outlook is stable. There is limited upside to the rating because of TCNA's small size. The holding company structure of the entity limits the rating because it is reliant on dividends from the operating company (TCSAP), while TCSAP provides no guarantee TCNA's debt. Moody's would consider an upgrade if leverage falls toward 3.0x (as adjusted using Moody's standard analytical adjustments and considering the minority interest held in TCSAP). The ratings could be downgraded if TCNA's leverage ratio were to rise above 4.5x, or if there was a change in the dividend arrangement that supports interest payments and earnings at TCNA. The SGL-2 rating reflects the company's good liquidity, which is supported by its cash balances, revolving credit facility and cash flow generation. Cash balances were approximately $74 million as of March 31, 2013. The company has produced positive cash flow from operations for the past four years and benefits from low maintenance capital expenditure requirements ($13-15 million per year). Moody's expects the company to generate positive cash flow from operations during 2014-2015. Secondary liquidity is provided by the proposed $25 million five year cash flow revolver, which will be undrawn at close and fully available. The revolving credit facility will not contain financial covenants. The principal methodology used in this rating was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Tata Chemicals North America Inc. (TCNA) is a holding company which owns 75% of the operating entity, Tata Chemicals Soda Ash Partnership (TCSAP) - the remaining 25% of TCSAP is owned by Owens-Illinois Inc. (Ba2, stable), which is the world's largest manufacturer of glass containers. TCSAP is a natural soda ash producer with mines located at Green River Basin in Wyoming, which has one of the world's largest, purest, and most economically recoverable trona ore deposits that is readily convertible to soda ash. TCSAP has 2.54 million metric tons of annual production capacity. TCNA reported revenues of $492 million for the fiscal year ended March 31, 2013. TATA CHEMICALS: S&P Assigns 'B+' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B+' corporate credit rating to Tata Chemicals North America Inc. The outlook is stable. At the same time, S&P assigned a 'BB' issue-level rating and '1' recovery rating to TCNA's proposed $25 million senior secured revolving credit facility maturing in 2018 and $315 million senior secured term loan maturing in 2020, based on preliminary terms and conditions. The '1' recovery rating indicates S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. The company plans to use the term loan proceeds and cash on hand to refinance existing debt and fund transaction fees and expenses. S&P expects the new $25 million revolving credit facility will be undrawn at close of the transaction. "The ratings on TCNA reflect our assessment of the company's business risk profile as vulnerable and financial risk profile as aggressive," said Standard & Poor's credit analyst Daniel Krauss. TCNA's stand-alone credit profile is 'b'. S&P's ratings factors in one notch of uplift for its assessment of support from parent Tata Chemicals Ltd. (TCL). With annual revenues of about $500 million, TCNA is a leading North American producer of natural soda ash in the Green River Basin of Wyoming. Soda ash is a key raw material used to make a variety of products, including glass, which represents over half of global soda ash demand, as well as baking soda and powdered detergent. The outlook is stable. S&P expects that the cost advantage for natural soda ash producers should continue over at least the next few years, allowing TCNA to continue to generate solid EBITDA margins. S&P assumes that the parent company will remain supportive of credit quality and, therefore, S&P has not factored into its analysis any additional large dividends or debt-funded acquisitions. Based on S&P's scenario forecasts, it expects the company will generate modest free cash flow and maintain adequate liquidity over the next year. S&P could raise the ratings by one notch if EBITDA margins improved by 200 basis points or more from S&P's expectations, coupled with modest revenue growth. In this scenario, S&P would expect debt to EBITDA to consistently be below 4x. S&P could also consider a modest upgrade if cash flow generation is more robust than it expects, allowing the company to reduce debt and maintain an FFO-to-total-debt ratio consistently above 20%. The ratings could come under pressure if the downside risks to S&P's forecast were to materialize, such as a significant disruption to the operating site, a substantial reduction in demand for soda ash, or the company encountering difficulties sourcing key raw materials. Based on S&P's downside scenario, it could consider a one-notch downgrade if revenues fell by 15%, coupled with a drop in EBITDA margins of 200 basis points or more from S&P's current expectations. At this point, S&P would expect that debt to EBITDA would increase to above 5x. Although unlikely given S&P's current assessment of TCNA's relationship to its parent, S&P could lower the ratings if it no longer viewed TCNA as having strategic importance to TCL. TAYLOR, MI: Moody's Affirms 'Ba1' Rating on $31MM GO Debt --------------------------------------------------------- Moody's Investors Service has affirmed the City of Taylor's (MI) Ba1 general obligation (GO) rating. The city has $116.2 million of GO debt, of which $31.2 million is Moody's rated. The outlook remains negative. Ratings Rationale: The city's outstanding General Obligation (GO) limited tax debt is secured by the city's general obligation limited tax pledge subject to constitutional, statutory, and charter tax rate limitations. Affirmation of the Ba1 rating reflects the city's distressed financial position that is expected to improve, large tax base, and average debt burden. The negative outlook is based on continuing financial challenges facing the city including the need to eliminate a large deficit General Fund balance and the city's vulnerability to any future revenue declines or expenditure pressures. Strengths - Recent expenditure reductions, which management reports will lead to an operating surplus for 2013 - Large tax base Challenges - Significant declines in the tax base, which has led to declining revenues - Underperforming Brownfield TIF district requiring General Fund support for debt service - Limited financial flexibility - Above average unfunded pension obligations Outlook The continuation of the negative outlook reflects ongoing financial challenges facing the city including the need to eliminate a large deficit General Fund balance and the city's vulnerability to any future revenue declines or expenditure pressures. What Could Move the Rating Up (Removal of negative outlook?) - Return to structurally balanced financial operations resulting in significant improvement in General Fund balance position and liquidity - Stabilization and increase in tax base valuations What Could Move the Rating Down? - Continued deterioration of General Fund reserve levels - Higher than anticipated General Fund support of debt service expenses - Material increase in debt burden and / or pension liabilities The principal methodology used in this rating was General Obligation Bonds Issued by US Local Governments published in April 2013. TERRACE COMMUNITY: S&P Cuts Rating on FL 2007 Bond Rating to 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its long-term rating to 'BB+' from 'BBB-' on Hillsborough County Industrial Development Authority, Fla.'s series 2007A and 2007B tax-exempt and taxable revenue bonds, issued for Terrace Community Middle School (TCMS) and secured by a net revenue pledge of the school. The outlook is stable. "The downgrade reflects our view of the school's inadequate debt service coverage, deficit operating performance, and moderately weak liquidity," said Standard & Poor's credit analyst Carolyn McLean. "The school's strong demand, stable enrollment, and its consistently very strong academic performance coupled with successful charter renewals slightly offset these rating weaknesses." TCMS first opened in 1998 in a strip mall with 160 students in grades five through seven; grade eight was added the next year under a three-year charter with the Hillsborough County School District. As of academic year 2012-2013, the school had 660 students in grades 6-8 and plans to remain at that level for the next few years. TOYS 'R' US: Fitch Assigns 'BB-' Rating on New $985MM Term Loan --------------------------------------------------------------- Fitch Ratings has assigned a 'BB-/RR1' rating to Toys 'R' Us Property Co. I, LLC's (PropCo I) new $985 million unsecured term loan facility due 2019. The proceeds are intended to refinance PropCo I's $950 million of 10.75% senior unsecured notes due 2017. The proposed unsecured term loan facility benefits from a negative pledge on all PropCo I real estate assets (343 properties as May 4, 2013) and has essentially similar negative covenants to the unsecured notes being refinanced. In addition, the term loan contains certain mandatory prepayment features including excess cash flow sweep, repayment of loans if asset sales exceed certain threshold and de minimis amortization. The refinancing of PropCo I notes will likely save Toys 'R' Us, Inc.'s (Toys) annual interest expense of up to $40 million. Given the current market conditions, the company could also refinance its secured notes issued under the Toys 'R' Us Property Co. II, LLC (PropCo II) at more favorable rates to save further interest expense when these notes become callable in December 2013. Fitch has also affirmed the Issuer Default Ratings (IDR) for Toys and its various subsidiary entities at 'B-'. The Rating Outlook is Stable. A full list of rating actions follows at the end of this release. Key Rating Drivers Toys' current rating reflects Toys weak comparable store sales (comps) trend in 2012 and first quarter 2013 and continued secular and competitive pressures expected in the next 12-24 months. Fitch expects the company will generate limited free cash flow (FCF) over the next two to three years, though its liquidity position is comfortable to support operations and there are no significant debt maturities before 2016. Toys' sales are under increasing pressure with comps declining by 8.4% and 5.8% for the domestic and international segments in first quarter 2013, versus negative 3.5% and 5%, respectively, for fiscal 2012. Top-line weakness continues to be driven primarily by weakness in the entertainment (approximately 12% of domestic and 11% of international sales) and juvenile categories (approximately 37% of domestic and 21% of international sales). Fitch expects the entertainment category, which is going through structural changes, will continue to face headwinds, while the juvenile category is being hurt by a decline in birth rates over the past few years. In addition, Toys faces intensified pricing competition from both discounter and online retailers. The company's multi-channel strategy and series of product and service initiatives implemented during 2012 holiday season have had limited impact on alleviating the top-line pressure. Fitch believes that it will be expensive and difficult for Toys to compete on pricing and retain its market share without sacrificing margins given its heavy cost structure. As a result, Fitch expects limited benefit from these initiatives on the company's top line and profitability in the near term. As a result of weaker-than-expected sales and margin performance in first quarter 2013, leverage (adjusted debt/EBITDAR) crept up to 6.8x as of May 4, 2013, and could increase further to the low- to mid-7.0x range given continued weak sales outlook over the next 24 months. Fitch expects that Toys' EBITDA could decline to the low-$700 million level, assuming comps decline at 4%-5% at domestic and international segments and modest gross margin compression in 2013. Selling, general, and administrative (SG&A) expenses is expected to remain relatively flat despite sales deceleration. Coverage (operating EBITDAR/gross interest expense plus rents) is expected to be in the range of 1.3x - 1.4x. Toys' FCF generation has been pressured by the weakening EBITDA trend and been adversely affected by Toys' lack of efficiency in inventory control. Toys generated $250 million in FCF in 2012, although working capital remained a modest use of cash after causing significant cash drain in the prior two years. Toys would need to be working capital neutral to enable the company to generate modest FCF of $70 million-$80 million. Fitch estimates that breakeven EBITDA is around $650 million assuming annual interest expense (reflecting smaller balance under the new European debt structure and pro forma for the savings from the proposed refinancing of PropCo I notes) of $390 million - $400 million, capital expenditures of $250 million and neutral working capital. Toys has adequate liquidity, with $470 million of cash and $1.15 billion of availability under its various revolvers as of May 4, 2013. Under the Fitch current assumptions for EBITDA and neutral working capital, Toys should have up to $700 million availability under its domestic ABL revolver even during the peak working capital season. Recovery Analysis and Considerations The ratings on the specific securities reflect Fitch's recovery analysis using a going concern approach. This analysis is used to determine expected recoveries in a distressed scenario to each of the company's debt issues and loans. Below is a summary organizational structure (details are provided at the end of the press release) for the purpose of the recovery analysis: Toys 'R' Us, Inc. (HoldCo) (I) Toys 'R' Us-Delaware, Inc. (Toys-Delaware) is a subsidiary of HoldCo. (a) Toys 'R' Us Canada (Toys-Canada) is a subsidiary of Toys- Delaware. (b) Toys 'R' Us Property Co. II, LLC is a subsidiary of Toys- Delaware. (II) Toys 'R' Us Property Co. I, LLC is a subsidiary of HoldCo. Consolidated Stressed EBITDA In estimating Toys' EV for recovery purposes, Fitch has used a going-concern approach. Toys' debt is at three types of entities: operating companies (OpCo); property companies (PropCo); and the holding company (HoldCo), as described below. OpCo Debt At the OpCo levels - Toys-Delaware, Toys-Canada, and other international operating companies - latest 12 months (LTM) EBITDA is stressed at 15%. Fitch has assigned a 5.5x multiple to the stressed EBITDA, which is consistent with the low end of the 10- year valuation for the public space and Fitch's average distressed multiple across the retail portfolio. The stressed EV is adjusted for 10% administrative claims. Toys-Canada: Toys has a $1.85 billion asset-based revolving credit facility (ABL revolver) with Toys-Delaware as the lead borrower, and this contains a $200 million sub-facility in favor of Canadian borrowers. Any assets of the Canadian borrower and its subsidiaries secure only the Canadian liabilities. The $200 million sub-facility is more than adequately covered by the EV calculated based on stressed EBITDA at the Canadian subsidiary. Therefore, the fully recovered sub-facility is reflected in the recovery of the consolidated $1.85 billion revolver discussed below. The residual value is applied toward debt at Toys-Delaware. Toys-Delaware: In allocating the stressed EV (which includes the recovery on the Canadian sub-facility and equity residual value from Canada but no residual value from PropCo II at this point) at Toys-Delaware across the various tranches of debt, Fitch ascribes a higher priority to the ABL revolver, due to its first lien tangible security package over the term loans and 7.375% senior secured notes. The $1.85 billion revolver is secured by a first lien on inventory and receivables of Toys-Delaware and its domestic subsidiaries. In allocating an appropriate recovery, Fitch has considered the liquidation value of domestic inventory and receivables assumed at seasonal peak (at end of the third quarter), corresponding to peak borrowings of $1.725 billion ($1.85 billion minus the $125 million in minimum excess availability). Fitch assumes peak domestic inventory levels of $2.25 billion and receivables of $85 million, for recovery purposes and has applied liquidation values of 75% and 80%, respectively. This liquidation value of $1.6 billion is applied toward the secured revolver, in addition to the approximately $200 million recovered on the Canadian sub-facility. As a result, the facility is fully recovered and is therefore rated 'BB-/RR1'. The recovery value of the debt structure below the first lien revolver comprises two components: (1) excess liquidation value at the Toys-Delaware level (liquidation value after the full recovery of ABL revolver) and (2) equity residual value from Canada. The component (1) is fully applied toward the senior secured term loans and 7.375% secured notes, while the component (2) is applied across the capital structure (excluding the fully recovered revolver). This results in recovery prospects of 11%-30% for the term loans and the secured notes, which are therefore rated 'CCC+/RR5'. The term loans due 2016 and 2018, and the senior secured notes due 2016, are secured by a first lien on intellectual property rights and a second lien on the ABL revolver collateral. The 8.75% debentures due Sept. 1, 2021, have poor recovery prospects and are therefore rated 'CCC/RR6'. PropCo Debt At the PropCo levels - Toys 'R' Us Property Co. I, LLC; Toys 'R' Us Property Co. II, LLC; and other international PropCos - LTM net operating income (NOI) is stressed at 20%. PropCo I and PropCo II are set up as bankruptcy-remote entities with a 20-year master lease through 2029 covering all the properties, which requires Toys-Delaware to pay all costs and expenses related to leasing these properties from these two entities. The ratings on the PropCo debt reflect a distressed capitalization rate of 12% applied to the NOI of the properties to determine a going-concern valuation. The stressed rates reflect downtime and capital costs that would need to be incurred to re- tenant the space. Applying these assumptions to the $725 million 8.50% senior secured notes at PropCo II and the proposed $985 million senior unsecured term loan facility at PropCo I results in recovery well in excess of 90%. Therefore, these facilities are rated 'BB-/RR1'. The PropCo II notes are secured by 126 properties. Fitch typically limits the recovery rating on unsecured debt at 'RR2' or two notches above the IDR level (under its criteria 'Recovery Ratings and Notching Criteria for Non-financial Corporate Issuers dated Nov. 13, 2012). However, in the few instances where the recovery waterfall suggests an 'RR1' rating and such a recovery rating is supported by the structural and legal characteristics of the debt, unsecured debt may qualify for an 'RR1' rating. The PropCo I unsecured term loan facility benefits from a negative pledge on all PropCo I real estate assets (343 properties as May 4, 2013). In addition, the rating also benefits from the structural consideration that Toys 'R' Us has limited capacity to secure debt using real estate given that there is a limitation on principal property of domestic subsidiaries at 10% of consolidated net tangible assets under the $400 million of 7.375% notes due 2018 issued by Toys 'R' Us, Inc. (HoldCo). Toys 'R' Us, Inc. - HoldCo Debt The $450 million 10.375% unsecured notes due Aug. 15, 2017, and the $400 million 7.375% unsecured notes due Oct. 15, 2018, benefit from the residual value at PropCo I, currently estimated at approximately $300 million based on the proposed $985 million of principal amount under the new term loan facility. There is no residual value ascribed from Toys-Delaware or other operating subsidiaries. This results in average recovery prospects of 31%- 50% and the bonds are therefore rated 'B-/RR4'. However, if the PropCo I term loan facility is larger, to the extent where recovery is less than $255 million or 30% of the notes outstanding at HoldCo, the HoldCo notes would be downgraded by a notch. RATING SENSITIVITIES A negative rating action could result if: -- If comps trends in the U.S. and international businesses continue to be in the negative 4%-5% range beyond 2013, which could indicate market share losses and cause leverage to increase meaningfully and/or lead to tightened liquidity over the next two years, particularly during its peak working capital season; -- Weakening EBITDA is not adequate to support fixed obligations or continued lack of efficiency in managing working capital. A positive rating action could result if: -- There is sustainable improvement in the business as a result of the company's new product and service initiatives which help drive improved store and online traffic, and curb share losses. The company would need to improve EBITDA to the $1.1 billion range and leverage to the high 5.0x range. -- In addition, management will need to prove their ability to manage working capital effectively over the next two years to ensure FCF generation. Fitch affirms Toys ratings as follows: Toys 'R' Us, Inc. (HoldCo) -- IDR at 'B-'; -- Senior unsecured notes at 'B-/RR4'. Toys 'R' Us - Delaware, Inc. is a subsidiary of HoldCo -- IDR at 'B-'; -- Secured revolver at 'BB-/RR1'; -- Secured term loans at 'CCC+/RR5'; -- Senior secured notes at 'CCC+/RR5'; -- Senior unsecured notes at 'CCC/RR6'. Toys 'R' Us Property Co. II, LLC is subsidiary of Toys 'R' Us - Delaware, Inc. -- IDR at 'B-'; -- Senior secured notes at 'BB-/RR1'. Toys 'R' Us Property Co. I, LLC is a subsidiary of HoldCo -- IDR at 'B-'; -- New senior unsecured term Loan facility assigned 'BB-/RR1'; -- Senior unsecured notes rated at 'BB-/RR1' will be withdrawn upon the closing of the proposed refinancing transaction. The Rating Outlook is Stable. TOYS 'R' US: Proposed $985-Bil. Revolver Gets Moody's B3 Rating --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed $985 billion senior unsecured credit facility to be issued by Toys 'R" Us Property Co. I, LLC ("Propco I"). All other ratings, including the B2 Corporate Family Rating of Toys "R" Us, Inc., as well as the stable outlook, are unchanged. New rating assigned: $985 billion senior unsecured credit facility due 2019 at B3 (LGD5,77%) Rating to be withdrawn following full redemption: $950M senior unsecured notes due 2017 at B3 (LGD5,77%) Ratings Rationale: "The proposed new facility is a credit positive for the company as it will meaningfully reduce interest costs, and also adds two years to the maturity, both of which enhance Toys' already good liquidity profile," stated Moody's Vice President Charlie O'Shea. "While the proposed new facility remains unsecured, the structure remains favorable, with negative pledges on a pool of properties, a reasonable advance rate, and lease assignments." Toys "R" Us, Inc.'s B2 Corporate Family Rating acknowledges the company's weak credit metrics, with debt/EBITDA at the May 2013 FYE high at around 6.7 times, retained cash flow/net debt of around 9%, and EBITA/interest hovering at around 1 time. Ratings also consider Toys' excellent market position as the world's largest dedicated toy retailer, the favorable placing of its solid Babies "R" Us brand and concept, good liquidity, and balanced financial policy. In addition, ratings acknowledge that Toys is presently operating without a permanent CEO. The stable outlook reflects Moody's opinion that the company is well-positioned within the B2 rating category due to its solid competitive profile. Ratings could be upgraded if debt/EBITDA is sustained below 5.75 times, RCF/net debt approached 11%, and EBITA/interest approached 1.5 times. Ratings could be downgraded if debt/EBITDA approached 7 times or if EBITA/interest fell below 1 time. 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. Toys "R" Us is the world's largest dedicated retailer of toys, with annual revenues of around $14 billion. The company was taken private in an LBO transaction in July 2005 by affiliates of Kohlberg, Kravis, Roberts & Co., Vornado Realty Trust, and Bain Capital, each of which still owns around 33%, with the remainder now owned by management. It also operates the Babies "R" Us concept. TOYS 'R' US: S&P Assigns 'B+' Rating to $985MM Term Loan Due 2019 ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' issue-level rating and '2' recovery rating to Toys "R" Us Property Co. I LLC's new $985 million term loan due 2019. Toys "R" Us Property Co. I LLC (a bankruptcy remote special purpose entity with ownership of 343 properties) will issue the term loan. These properties are leased to Toys R Us-Delaware Inc. (US Opco) through a 20-year triple net master lease agreement. The term loan is not secured but benefits from a negative pledge on the properties held by US Propco. The company will use proceeds of the proposed term loan to refinance the existing $950 million 10.75% notes due 2017. S&P affirmed all of its ratings on Toys "R" Us, including the 'B' corporate credit rating. The outlook is stable. "The ratings on Wayne, N.J.-based Toys "R" Us Inc. reflect Standard & Poor's Ratings Services' expectation that Toys' business risk profile will remain "weak". We based this on the intense competition in the toy retailing sector, especially from mass merchants and discounters such as Wal-Mart Stores Inc., Amazon.com, and Target Corp.," said credit analyst Ana Lai. "Moreover, the business is extremely seasonal and depends on "hot" products. Despite a slow economic recovery in the U.S. and continued weakness in the video game category, Toys' operating results should remain adequate because of its successful merchandising strategy and cost-control initiatives. Additionally, there should be a positive effect from its store conversion program. We believe that the continued integration of the toy and juvenile businesses and a focus on operational enhancements will continue to support operating results in 2013. We also view the company's financial risk as "highly leveraged", which we based on forecasted credit ratios that incorporate the company's substantial debt burden." The stable rating outlook on Toys "R" Us Inc. reflects S&P's expectation that good execution of its merchandising strategy, growth of its e-commerce channel, and store conversion strategy will continue to support Toys' operating results in 2013, despite softness in sales and competitive pressure. S&P expects Toys to achieve relatively stable results in the important fourth quarter. S&P could lower the ratings if poor sales lead to weaker-than- expected operating results due to competitive pressure, poor execution due to management turnover, or weak consumer spending, resulting in thinner operating margin such that debt leverage exceeds 7.5x. For example, this could happen if sales decline by about 5% while gross margin contracts by 50 bps in 2013. A more aggressive financial policy to fund any shareholder returns such that debt increases by $1.0 billion based on S&P's forecasted EBITDA, could also drive a downgrade. Although unlikely in the next year, S&P could raise the ratings if debt leverage drops to the mid-5x area. This could occur if sales grow by 2% or gross margin increases by 100 bps, resulting in EBITDA growth of about 25%. Another scenario could be that debt decreases by $1.5 billion based on S&P's forecasted EBITDA. However, this is unlikely to happen in the next year. U.S. SECURITY: Poor Performance Prompts Moody's to Cut CFR to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded U.S. Security Associates Holdings, Inc.'s corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD and senior secured credit facility instrument ratings to B1 from Ba3. The ratings outlook remains negative. Ratings Rationale: The downgrade to B2 CFR reflects Moody's expectations for financial performance below levels that Moody's had initially anticipated following the February 2012 Andrews International acquisition. Anticipated debt to EBITDA in the mid-6 times range (after Moody's standard adjustments but not including pro forma synergies for acquired businesses) is high for the B2 rating category. The risk of further market share losses and resulting declines in operating profit also weighs on the rating. U.S. Security's recession-resistant end market demand characteristics, flexible cost structure, and minimal capital spending requirements are positive rating factors. The rating is also supported an adequate liquidity profile once the proposed financial covenant amendment closes. The negative ratings outlook reflects Moody's concerns that intense competition could lead to further contract losses. A downgrade could occur if market share losses lead Moody's to expect further diminishment of profits or liquidity. The ratings outlook could be stabilized if market share losses abate and financial performance improves, leading Moody's to anticipate debt to EBITDA to decline towards 6 times and interest coverage to increase towards 2 times, while liquidity remains at least adequate. It is unlikely that Moody's would upgrade the rating in the near term; however, the CFR could be raised if Moody's comes to expect organic revenue growth, debt to EBITDA to be sustained below 5 times, free cash flow to debt above 5%, and good liquidity. An upgrade would also require a commitment to conservative financial policies. Downgrades: Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Senior Secured Bank Credit Facility, Downgraded to B1 (LGD3, 37%) from Ba3 (LGD3, 38%) 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. US Security is a provider of uniformed security guards in North America owned by affiliates of Goldman Sachs Capital Partners. VAIL LAKE: Sec. 341 Creditors' Meeting Continued to July 27 ----------------------------------------------------------- A meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of Vail Lake Rancho California, LLC et al., has been continued to July 27, 2013, at 1:00 p.m. The meeting will be held 402 W. Broadway, Emerald Plaza Building, Suite 660, according to a notice posted by Mary Testerman Duvoisin on behalf of the United States Trustee. About Vail Lake Vail Lake Rancho California, LLC and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. VAIL LAKE: Cooley LLP on Board as General Bankruptcy Counsel ------------------------------------------------------------ Vail Lake Rancho California, LLC, and its affiliates ask the U.S. Bankruptcy Court for permission to employ Cooley LLP as general bankruptcy counsel. The firm's hourly rates are: Professional Hourly Rates ------------ ------------ Partners $625 to $1,160 Associates and Special Counsel $335 to $730 Paralegals $135 to $350 The primary attorneys contemplated to represent the Debtors in these cases and their hourly billing rates are: Professional Rates ------------ ----- Ali M.M. Mojdehi $840 Janet D. Gertz $660 Brian W. Byun $530 Allison M. Rego $360 Ali M.M. Mojdehi, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Proposed counsel for the Debtors can be reached at: Ali M. M. Mojdehi, Esq. Janet D. Gertz, Esq. COOLEY LLP 4401 Eastgate Mall San Diego, CA 92121 Tel: (858) 550-6000 Fax: (858) 550-6420 E-mail: amojdehi@cooley.com jgertz@cooley.com About Vail Lake Vail Lake Rancho California, LLC and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. VAIL LAKE: Hires E3's Hebrank as Chief Restructuring Officer ------------------------------------------------------------ Vail Lake Rancho California LLC and its affiliates ask the U.S. Bankruptcy Court for authority to employ Thomas C. Hebrank and E3 Realty Advisors, Inc., with E3'S Hebrank serving as the Debtors' chief restructuring officer. Mr. Hebrank will, among other things, provide these services: a. provide overall leadership in the Chapter 11 reorganization process, including working with wide range of stakeholders, together with existing management; b. prepare, analyze and monitor historical, current and projected financial affairs, including assisting with preparation of the petition, statement of financial affairs, schedules and other regular reports required by the Court and the United States Trustee; and c. assist the Debtors in communications and negotiations with various parties in interest, including creditors, employees, vendors, and customers. To address and handle the above responsibilities on behalf of the Debtors, the CRO may be assisted by additional personnel at E3, all of whom have a wide range of skills and abilities related to this type of assignment. The firm's rates are: Professional Hourly Rates ------------ ------------ Mr. Hebrank $275 Managing Director $235 Director $200 Associate Director $150 Accountant $100 Administrative $75 Mr. Hebrank -- thebrank@ethreeadvisors.com -- attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Vail Lake Vail Lake Rancho California, LLC and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. Thomas C. Hebrank at E3 Realty Advisors, Inc., serves as the Debtors' chief restructuring officer. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. WEST AIRPORT: Sec. 341 Creditors' Meeting Set for Aug. 9 -------------------------------------------------------- The U.S. Trustee will convene a meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of West Airport Palms Business Park, LLC on Aug. 22, 2013, at 1:30 p.m. The meeting will be held at 51 SW First Ave Room 1021, Miami. The deadline to file a complaint to determine dischargeability of certain debts is Oct. 8, 2013. Proofs of claim are due by Nov. 7, 2013. West Airport Palms Business Park, LLC filed a Chapter 11 petition (Bankr. D. Fla. Case No. 13-25728) on July 2, 2013 in Miami, Florida, James Schwitalla, Esq. in Miami, Florida serves as counsel to the Debtor. The Debtor estimated up to $14,440,419 in assets and up to $9,284,422 in liabilities. WORLDCOM INC: Second Circuit Reverses Ruling on Communications Tax ------------------------------------------------------------------ Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports the Second Circuit of Appeals ruled that WorldCom Inc. is required to pay a 3 percent federal excise tax on dial-up Internet services it purchased from local telephone companies. According to the report, a three-judge panel of U.S. circuit judges Robert A Katzmann and Amalya L. Kearse and U.S. District Judge Jed S. Rakoff, sitting by designation, reversed the decision of the district court, stemming from an Internal Revenue Service appeal of a ruling in the telecommunications company's bankruptcy, according to a 35-page opinion filed July 22. The report notes that the appeals court found that the acquisition by WorldCom in the late 1990s of Internet services it provided through central office- based remote access, or Cobra, constituted a local telephone service and therefore made it subject to the taxes and that it isn't entitled to a refund it sought for taxes it had already paid. The report relates that the IRS filed a $16.3 million claim in the bankruptcy case after the court had approved its restructuring plan, for taxes relating to the purchase of the Cobra services. WorldCom objected to the claim and asserted that it should receive a refund of $38.3 million in taxes it had already paid according to court documents. The report says that the appeals court ruled that WorldCom's Cobra services met two factors that would make it subject to the communications tax. The court said it met the first criteria because it "provided direct 'connectivity' to a local telephone system" and it was "a service provided by individual local telephone companies." The report discloses that the court found Cobra met the other component saying in the opinion "the 'privilege of telephonic quality communication' element of local telephone service covers any service that makes use of the traditional telephone network for communication, regardless of the form of the communication or whether the service also uses non-telephonic technology to accomplish that communication." WorldCom filed for bankruptcy in July 2002, making it the largest in U.S. history at the time, after revealing an $11 billion accounting fraud. The reorganization handed ownership to creditors. The appeal is In re WorldCom Inc., 12-803, U.S. Court of Appeals for the Second Circuit (New York). About WorldCom Inc. WorldCom, Inc., a Clinton, Mississippi-based global communications company, filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, WorldCom disclosed $103,803,000,000 in assets and $45,897,000,000 in debts. The Debtors were represented by Weil, Gotshal & Manges LLP. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the Company formally emerged from U.S. Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. * Fitch: FDIC Loss-Sharing Expiration Little Threat to U.S. Banks ----------------------------------------------------------------- An expected pick-up in expirations of FDIC Loss-Share Agreements (LSAs) with U.S. banks is unlikely to have a significant impact on capital, asset quality and earnings for affected institutions, according to a new analysis by Fitch Ratings. LSAs serve to limit the cost of bank failures by offering partial loan loss protection from the FDIC for banks that acquire failed institutions. A majority of current LSAs were entered into at the height of the financial crisis as bank failures surged. Under the LSAs, the FDIC absorbs a portion of loan losses (80% to 95%) for a stated period of time -- typically 10 years for single- family mortgages and five years for commercial assets. Such agreements on commercial assets are now close to expiration. Assets covered under the LSAs have historically been assigned a 20% risk weighting for capital purposes. With loss-sharing expiring in the medium term, the risk weighting of these commercial assets will increase to 100%. For some high-volatility commercial real estate loans under Basel III, the risk weighting can be up to 150%. Despite the increased risk weights, our analysis indicates that the impact to Tier 1 capital would be immaterial, as the expiring commercial assets typically represent a nominal portion of total loan portfolios at their respective institutions. "We note that asset quality for these loans continues to be weak, with nonperforming assets (NPAs), as a percentage of the covered portfolio, averaging around 11%. However, NPAs, as a percentage of the total portfolio drop significantly, pointing to limited exposure," Fitch says. Institutions with loss-share agreements have the ability to completely write-off affected assets, due to modest levels of earnings. However, institutions would have almost no reason to write-off these assets subsequent to loss-share expiration, as any recoveries on commercial assets experienced within a three-year period would have to be shared with the FDIC. From an earnings perspective, we expect the continuation of some noise in net interest margins as these assets will continue to accrete into income. However, volatility arising from valuation adjustments on the FDIC indemnification assets may be more muted, possibly resulting in a net positive impact on income. * Moody's Sees 3.2% Increase in Corporate Defaults by November -------------------------------------------------------------- The US speculative-grade default rate remained steady in the second quarter, but should edge up following recent market volatility, Moody's Investors Service says in the latest edition of its quarterly US Default Monitor. Nonetheless, it will remain well below its late-2009 cyclical peak above 14% and historical average of 4.5%. "Recent market volatility produced a sharp rise in yields and spreads over Treasuries for US speculative-grade debt," says Senior Vice President, Lenny Ajzenman. "But we expect only a slight increase in the default rate, to 3.2% by November from 2.9% at the end of the June, before it retreats to 2.6% by end-June next year." High-yield bond issuance declined sharply in June amid concerns that the Fed will trim its bond-buying program later this year. Although a sustained lack of market access over a prolonged period could lead to a pronounced rise in the default rate, Ajzenman says, Moody's has not seen evidence of this. A reduction in market volatility should therefore see issuers heading back to the capital markets in the coming months. In the second quarter 10 US non-financial corporate families defaulted on a total of more than $3 billion of debt, while in the first quarter nine defaults represented more than $8 billion of debt. Of the most recent quarter's defaults, none were for more than $800 million of debt, compared with four in the prior quarter. Half of the second quarter's defaults were bankruptcies, Ajzenman says. The largest was Exide Technologies, Inc., with more than $700 million of debt. Other bankruptcies included GMX Resources Inc., OnCure Holdings Inc., Orchard Supply Hardware Corp. and Rotech Healthcare Inc. American Petroleum Tankers Parent LLC completed the only distressed exchange in the quarter, converting more than $400 million of sponsor PIK debt to equity in connection with a refinancing of its capital structure. Three of the second quarter's 10 defaults occurred in the healthcare sector. Others were dispersed across sectors, including chemicals, energy, gaming and business services. In contrast, the first quarter saw four defaults in the media sector, which remains the sector with the highest one-year default rate forecast. * Moody's: Slow Economic Growth Keeps Industry Outlooks Unchanged ----------------------------------------------------------------- Continued slow economic growth in developed countries and slowing growth in key emerging markets will keep most non-financial sectors range-bound over the next 12-18 months, Moody's Investors Service says in a new report, "Worldwide Struggle for Economic Growth Locks in Stable Trend for Industry Outlooks." For the first time, since Moody's began tracking outlooks for business conditions among non-financial corporate industries, the rating agency saw no net changes in its roster of positive, stable and negative industry outlooks during the second quarter of 2013. "With supply-related investments tempered by economic uncertainty and relatively high unemployment and low income growth suppressing demand, there is little impetus for change," says Managing Director Mark Gray, the report's co-author. "During the second quarter, we changed our industry outlooks for just two sectors among the 57 we track worldwide, while about two-thirds of all non-financial corporate sector outlooks remained stable." Moody's changed its outlook for the US Lodging and Cruise industry to positive from stable in the most recent quarter. But this reflects the sector's reluctance to build new hotel rooms, even as hotel-room occupancies modestly rise, rather than any marked improvement in business conditions, Gray says. Conversely, Moody's outlook for the European Tobacco industry went to stable from positive, given slowing profits amid tight consumer spending and a growing challenge from e-cigarettes. "The roster of positive and negative industry outlooks demonstrates offsetting trends with no macroeconomic correction on the horizon," Gray says. "Our outlook for the US Newspaper sector, for example, will continue to be negative as the industry struggles with the ever-increasing digitization of information, but that very phenomenon contributes to the growth we see in the US Wireless sector." Meanwhile, the beneficial trends seen in some industries will continue to positively affect others. The shale revolution is advantageous oil and natural gas producers, which in turn boosts demand for pipeline and transportation. Similarly, the continuing recovery of the US housing sector will keep growth strong in the Consumer Durables and US Homebuilding sectors. "In general, the stability we have seen since mid-2012 reflects a period of economic stasis, rather than comfort," Gray says. "Still, today's apparent calm continues to indicate a certain macroeconomic foreboding, even as European jitters ease and the US housing market continues to spearhead the recovery there." * Canadian Insurers' Int'l. Operations Weaken Credit Profile ------------------------------------------------------------ Canadian life insurers have sought international growth as their domestic market matures but higher risk from foreign operations has weakened their credit profiles, says Moody's Investors Service in its new credit focus "Peer Comparison: The Three Major Canadian Life Insurers' International Operations Dilute their Credit Profiles." Canadian life insurers' international operations outside North America are riskier than domestic operations and therefore dilute these companies' strong credit profiles. A weaker operating environment - common in the international regions where Canadian life insurers are present - will negatively affect an insurer's overall credit profile, as the structural strength of the insurance industry and contractual agreements increasingly come into focus, says Moody's. "The Canadian life insurance industry is very mature, which means that the insurers must look to other markets in order to grow," said a Moody's analyst and author of the report David Beattie. "The three major Canadian life insurers have very different exposures, depending on the focus and scale of their international operations." Moody's credit focus examines the international operations of the three largest Canadian life insurers; Manulife Financial Corporation (MFC), Great West Lifeco (GWO) and Sun Life Financial (SLF), and notes that contribution to earnings by each insurer's international operations varies greatly. MFC received 33%, or CAD 963 million, of its core earnings from its Asia division in 2012, while GWO core European operations generated 21%, or CAD 410 million of operating net income, and SLF is significantly less reliant on international operations, with only 8%, or CAD 129 million of operating net income from SLF Asia, says Moody's. * Corporate-Default Rate to Increase as QE Ends ----------------------------------------------- Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that corporate defaults will rise as the Federal Reserve considers curtailing stimulus measures, according to a survey by the International Association of Credit Portfolio Managers. According to the report, the 12-month credit default outlook index, in which negative numbers indicate an expectation of higher defaults, moved to minus 35.6 in June from negative 7.6 in March, according to the survey, released July 18. IACPM's 87 members include banks, insurance companies and asset managers in 17 countries. Respondents said that a rise in defaults, which are already extremely low, would be a return to more "normal conditions." The report notes that investors are looking for indications as to when the Federal Reserve will begin scaling back its monthly bond purchases, known as quantitative easing, which has provided a boost to credit markets. The Fed has been buying $40 billion in mortgage-backed securities and $45 billion of Treasuries every month since September to spur economic growth. The report relates that Fed Chairman Ben S. Bernanke said in testimony on July 17 to the House Financial Services Committee that the central bank's purchases "are by no means on a preset course." The trailing 12-month global speculative-grade default rate rose to 2.8 percent at the end of the second-quarter, from 2.5 percent in the prior period, according to a July 11 Moody's Investors Service report. The rating firm expects that to rise to 3.2 percent by the end of the year. * Detroit Post-Bankruptcy Debt Trades Show Improved Recovery Bets ----------------------------------------------------------------- Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that Detroit's bankruptcy has led some investors to bet that Emergency Financial Manager Kevyn Orr's plan to give bondholders less than 20 cents on the dollar won't hold up in court. Some city limited-tax bonds maturing in April 2020 traded July 19 at an average price of 74 cents on the dollar, up from 68 cents earlier in the week, data compiled by Bloomberg show. The debt, insured by Ambac Assurance Corp., was one of at least 10 series of Detroit general obligations that traded at a higher price after Mr. Orr sought court protection from creditors on July 18. The report notes that the price fluctuation reflects the unprecedented nature of Detroit's Chapter 9 filing. Stockton, California, previously the biggest U.S. city to seek protection, doesn't have general obligations. While bondholders were repaid about 96 cents on the dollar after municipal defaults during the Great Depression, today's investors should expect a 50 percent recovery rate, similar to company debt, Moody's Investors Service said in May. The report discloses that at least 37 series of general-obligation bonds traded the day after the filing, according to data compiled by Bloomberg. The average price rose only in about one of every four trades, indicating that more buyers wanted extra yield to own the city's debt after Mr. Orr's filing. * Michigan Municipalities' Bond Sales Slow Most Since April ----------------------------------------------------------- Michael Bathon, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reports that Michigan municipalities are set to borrow the least in three months as Detroit's bankruptcy shakes investor confidence, exacerbating the steepest borrowing slowdown this year among the 10 most populous states. Governments in the state, including school and water districts and the city of Portage west of Detroit, plan to offer about $13 million of debt this week. According to the report, it's the least since April for a non- holiday week and about 10 percent of the same period of 2012, data compiled by Bloomberg show. The move by Detroit, which Republican Governor Rick Snyder backed, is clouding investors' view of Michigan even as the state's economy is strengthening, leaving it poised for higher credit ratings. Debt sold in the state is trailing the $3.7 trillion municipal market by the most in two years, Barclays Plc data show. The report notes that bonds of Michigan and its localities have lost 3.6 percent this year, surpassing the 3.4 percent decline for all munis, the first time the state has trailed the market since 2011, Barclays data show. Investors are focusing on Detroit's approach to what is typically considered the safest form of muni debt, which municipalities use to finance roads and schools. In a June restructuring proposal, Detroit Emergency Financial Manager Kevyn Orr tried to persuade holders of $369 million of unlimited general obligations to accept less than 20 cents on the dollar. The report relates that the debt is supposed to have the full backing of taxpayers. After Illinois and California, Michigan general obligations offer the most extra yield above top-rated munis among the 17 states tracked by Bloomberg. Yields on Michigan general obligations maturing in 10 years are 0.32 percentage point above an index of benchmark munis. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re David Gray Bankr. N.D. Ala. Case No. 13-82038 Chapter 11 Petition filed July 10, 2013 In re Mars Hill Missionary Baptist Church Bankr. N.D. Ala. Case No. 13-41269 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/alnb13-41269.pdf represented by: Harvey B. Campbell, Jr., Esq. Campbell and Campbell, PC E-mail: hbcampbell@prodigy.net In re 511-513 Union Avenue, LLC Bankr. C.D. Cal. Case No. 13-27831 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/cacb13-27831.pdf represented by: Jerome Bennett Friedman, Esq. FRIEDMAN LAW GROUP, P.C. E-mail: jfriedman@jbflawfirm.com In re Siang Tan Bankr. C.D. Cal. Case No. 13-15880 Chapter 11 Petition filed July 10, 2013 In re Victor Anastasia Bankr. C.D. Cal. Case No. 13-27701 Chapter 11 Petition filed July 10, 2013 In re George Smith Bankr. S.D. Cal. Case No. 13-7051 Chapter 11 Petition filed July 10, 2013 In re 3811 Kenny Drive Realty Assoc. LLC Bankr. M.D. Fla. Case No. 13-09016 Chapter 11 Petition filed July 10, 2013 Filed pro se In re Steven Dillman Bankr. N.D. Ind. Case No. 13-12087 Chapter 11 Petition filed July 10, 2013 In re F & P, LLC Bankr. D. Mass. Case No. 13-41767 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/mab13-41767.pdf represented by: James P. Ehrhard, Esq. Ehrhard & Associates, P.C. E-mail: ehrhard@ehrhardlaw.com In re Inverness Homes Inc. Bankr. N.D. Miss. Case No. 13-12826 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/msnb13-12826.pdf represented by: J. Walter Newman, IV, Esq. Newman & Newman E-mail: wnewman95@msn.com In re William & Williams Properties LLC Bankr. D.N.J. Case No. 13-25089 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/njb13-25089.pdf represented by: Michael S. Kopelman, Esq. Kopelman & Kopelman LLP E-mail: kopelaw@yahoo.com In re Casimiro Almendral Bankr. E.D.N.Y. Case No. 13-73574 Chapter 11 Petition filed July 10, 2013 In re Miller Davis, Inc. Bankr. M.D.N.C. Case No. 13-50862 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/ncmb13-50862.pdf represented by: Brian Hayes, Esq. E-mail: bphafd@fspa.net In re My Place, Inc. Bankr. W.D.N.C. Case No. 13-10460 Chapter 11 Petition filed July 10, 2013 See http://bankrupt.com/misc/ncwb13-10460.pdf represented by: D. Rodney Kight, Jr., Esq. Kight Law Office PC E-mail: info@kightlaw.com In re Monica Grimm Bankr. W.D. Wash. Case No. 13-16333 Chapter 11 Petition filed July 10, 2013 In re Guillermo Morales Bankr. C.D. Cal. Case No. 13-27892 Chapter 11 Petition filed July 12, 2013 In re Benge Donaldson Bankr. N.D. Fla. Case No. 13-40438 Chapter 11 Petition filed July 12, 2013 In re Dominique Quevillon Bankr. S.D. Fla. Case No. 13-26460 Chapter 11 Petition filed July 12, 2013 In re Tru-Bamboo LLC Bankr. S.D. Fla. Case No. 13-26489 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/flsb13-26489p.pdf See http://bankrupt.com/misc/flsb13-26489c.pdf represented by: David A. Carter, Esq. DAVID A. CARTER, P.A. E-mail: dacpa@bellsouth.net In re CJC Cold Storage, LLC Bankr. N.D. Ga. Case No. 13-41996 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/ganb13-41996.pdf represented by: Michael D. Robl, Esq. THE SPEARS & ROBL LAW FIRM, LLC E-mail: mdrobl@tsrlaw.com In re Settlers' Housing Service, Inc. Bankr. N.D. Ill. Case No. 13-28022 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/ilnb13-28022.pdf represented by: Ariane Holtschlag, Esq. LAW OFFICE OF WILLIAM J. FACTOR, LTD. E-mail: aholtschlag@wfactorlaw.com In re Adrian Kornman Bankr. E.D. La. Case No. 13-11938 Chapter 11 Petition filed July 13, 2013 In re Gladstone Dainty Bankr. D. Md. Case No. 13-21911 Chapter 11 Petition filed July 12, 2013 In re Theodore H. Hawley Catherine A. Hawley Bankr. D. Mass. Case No. 13-41800 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/mab13-41800.pdf represented by: James P. Ehrhard, Esq. EHRHARD & ASSOCIATES, P.C. E-mail: ehrhard@ehrhardlaw.com In re Jacquie Chadler Bankr. D. Nev. Case No. 13-51396 Chapter 11 Petition filed July 12, 2013 In re Calm Development, Inc. Bankr. D.N.J. Case No. 13-25272 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/njb13-25272.pdf represented by: Louis A. Capazzi, Jr., Esq. LAW OFFICE OF LOUIS A. CAPAZZI, JR. In re Bronx Shepherds Restoration Crop. Bankr. S.D.N.Y. Case No. 13-12295 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/nysb13-12295.pdf represented by: Arlene Gordon-Oliver, Esq. ARLENE GORDON-OLIVER, P.C. E-mail: ago@gordonoliverlaw.com In re Karen Vedad Bankr. S.D.N.Y. Case No. 13-12297 Chapter 11 Petition filed July 12, 2013 In re Edgewater RV Resort & Marina, LLC Bankr. D. Ore. Case No. 13-62673 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/orb13-62673.pdf represented by: Loren S. Scott, Esq. THE SCOTT LAW GROUP E-mail: ecf@scott-law-group.com In re Jeffrey Steinberg Bankr. E.D. Pa. Case No. 13-16133 Chapter 11 Petition filed July 12, 2013 In re Natalie Steinberg Bankr. E.D. Pa. Case No. 13-16133 Chapter 11 Petition filed July 12, 2013 In re Jose De La Mora-Sanchez Bankr. D.P.R. Case No. 13-5732 Chapter 11 Petition filed July 12, 2013 In re Adam Nash Bankr. M.D. Tenn. Case No. 13-6066 Chapter 11 Petition filed July 12, 2013 In re Willard Nash Bankr. M.D. Tenn. Case No. 13-6062 Chapter 11 Petition filed July 12, 2013 In re Auction Driver Solutions, LLC Bankr. N.D. Tex. Case No. 13-33530 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/txnb13-33530.pdf represented by: Eric A. Liepins, Esq. Eric A. Liepins, P.C. E-mail: eric@ealpc.com In re Dunwell Corporation Bankr. N.D. Tex. Case No. 13-33531 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/txnb13-33531.pdf represented by: Arthur I. Ungerman, Esq. E-mail: arthur@arthurungerman.com In re Ravenscrest Trust Bankr. W.D. Wash. Case No. 13-44572 Chapter 11 Petition filed July 12, 2013 See http://bankrupt.com/misc/wawb13-44572.pdf Filed pro se In re Naomi Kornman Bankr. E.D. La. Case No. 13-11938 Chapter 11 Petition filed July 13, 2013 In re Jennifer Wilson Bankr. N.D. Cal. Case No. 13-11374 Chapter 11 Petition filed July 14, 2013 In re Denver Structures, LLC Bankr. D. Colo. Case No. 13-22052 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/cob13-22052p.pdf See http://bankrupt.com/misc/cob13-22052c.pdf represented by: Jeffrey S. Brinen, Esq. E-mail: jsb@kutnerlaw.com In re Front Avenue Properties, LLC Bankr. D. Conn. Case No. 13-31358 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/ctb13-31358.pdf represented by: Douglas J. Lewis, Esq. EVANS & LEWIS E-mail: lewisdouglas74@yahoo.com In re Michael Torpey Bankr. M.D. Fla. Case No. 13-04315 Chapter 11 Petition filed July 15, 2013 In re Nelida Cartagena Bankr. M.D. Fla. Case No. 13-09235 Chapter 11 Petition filed July 15, 2013 In re The Rack of Tampa, Inc. Bankr. M.D. Fla. Case No. 13-09244 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/flmb13-09244.pdf represented by: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. E-mail: Buddy@tampaesq.com In re Barn Guru, L.L.C. Bankr. N.D. Ga. Case No. 13-65429 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/ganb13-65429.pdf represented by: Michael C. Famiglietti, Esq. FAMIGLIETTI LAW FIRM E-mail: lexres@bellsouth.net In re A.Alphabet Academy, Inc. Bankr. W.D. Ky. Case No. 13-32815 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/kywb13-32815.pdf represented by: David M. Cantor, Esq. SEILLER WATERMAN, LLC E-mail: cantor@derbycitylaw.com In re MWM & Sons, Inc. Bankr. D. Md. Case No. 13-22061 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/mdb13-22061p.pdf See http://bankrupt.com/misc/mdb13-22061c.pdf represented by: John Douglas Burns, Esq. THE BURNS LAWFIRM, LLC E-mail: jburns@burnsbankruptcyfirm.com In re Robert Canner Bankr. E.D. Mich. Case No. 13-53591 Chapter 11 Petition filed July 15, 2013 In re 255 Long Beach Road Corp. Bankr. E.D.N.Y. Case No. 13-73708 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/nyeb13-73708.pdf represented by: Narissa A. Joseph, Esq. LAW OFFICE OF NARISSA JOSEPH E-mail: njosephlaw@aol.com In re Maine Management aka Trustee Charmaine Prater-McCullum Trustee for Fernando A. Colon Trustee Charmaine Prater Colon Trustee for S. Chiquetta Woods Trustee Charmaine Prater Ezengiva Bankr. E.D. Pa. Case No. 13-16182 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/paeb13-16182.pdf Filed as Pro Se In re James Boroughs Bankr. W.D. Tenn. Case No. 13-11803 Chapter 11 Petition filed July 15, 2013 In re GCKMAT, LLC Bankr. E.D. Va. Case No. 13-51133 Chapter 11 Petition filed July 15, 2013 See http://bankrupt.com/misc/vaeb13-51133.pdf represented by: Karen M. Crowley, Esq. CROWLEY, LIBERATORE, RYAN & BROGAN, P.C. E-mail: kcrowley@clrbfirm.com In re Roberto Ruggeri Bankr. C.D. Cal. Case No. 13-14718 Chapter 11 Petition filed July 16, 2013 In re Baby Couture, Inc. Bankr. N.D. Cal. Case No. 13-31613 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/canb13-31613p.pdf See http://bankrupt.com/misc/canb13-31613c.pdf represented by: Iain A. Macdonald, Esq. Macdonald Fernandez LLP E-mail: iain@macfern.com In re Konstantin Kupfer Bankr. N.D. Cal. Case No. 13-31611 Chapter 11 Petition filed July 16, 2013 In re Kupfer Jewelry, Inc. Bankr. N.D. Cal. Case No. 13-31612 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/canb13-31612p.pdf See http://bankrupt.com/misc/canb13-31612c.pdf represented by: Iain A. Macdonald, Esq. Macdonald Fernandez LLP E-mail: iain@macfern.com In re Scott Geurin Bankr. N.D. Cal. Case No. 13-53804 Chapter 11 Petition filed July 16, 2013 In re Cindy Magee Bankr. S.D. Cal. Case No. 13-7233 Chapter 11 Petition filed July 16, 2013 In re Russell Maytag Bankr. D. Colo. Case No. 13-22101 Chapter 11 Petition filed July 16, 2013 In re Hope Outreach Ministry, Inc. aka H.O.P.E. Outreach Ministry, Inc. Bankr. S.D. Fla. Case No. 13-26710 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/flsb13-26710.pdf Filed pro se In re Phoenix Landscape Maintenance, Inc. Bankr. S.D. Fla. Case No. 13-26658 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/flsb13-26658.pdf represented by: Joseph Rodowicz, Esq. E-mail: bankruptcy@rodowiczlaw.com In re Tunisia LLC Bankr. S.D. Fla. Case No. 13-26660 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/flsb13-26660.pdf represented by: Joseph Rodowicz, Esq. E-mail: bankruptcy@rodowiczlaw.com In re Elkhorn Ambulance Service, Inc. Bankr. E.D. Ky. Case No. 13-70429 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/kyeb13-70429.pdf represented by: Noah R. Friend, Esq. Friend & Hunt, Attorneys at Law E-mail: nrfriend@friendandhunt.com In re Sweet Potato Kids, Inc. Bankr. D. Md. Case No. 13-22100 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/mdb13-22100.pdf represented by: Anika Griffith, Esq. Trye,Butler, Mayo, Griffith E-mail: agriffith@tbmglaw.com In re Fulton Fish Market Bankr. E.D.N.Y. Case No. 13-44334 Chapter 11 Petition filed July 16, 2013 In re Mervin Sakowitz, M.D. Bankr. E.D.N.Y. Case No. 13-73717 Chapter 11 Petition filed July 16, 2013 See http://bankrupt.com/misc/nyeb13-73717.pdf represented by: Harold Seligman, Esq. Long & Tuminello E-mail: hseligman@msn.com In re Keith Waldrop Bankr. E.D. Va. Case No. 13-33837 Chapter 11 Petition filed July 16, 2013 In re John Gehlen Bankr. E.D. Wash. Case No. 13-2827 Chapter 11 Petition filed July 16, 2013 In re Ronnie Piper Bankr. C.D. Cal. Case No. 13-28205 Chapter 11 Petition filed July 17, 2013 In re Evagelia Glarentzos Bankr. S.D. Fla. Case No. 13-26847 Chapter 11 Petition filed July 17, 2013 In re Creative Wood Concepts, Inc. Bankr. N.D. Ill. Case No. 13-28546 Chapter 11 Petition filed July 17, 2013 See http://bankrupt.com/misc/ilnb13-28546.pdf represented by: William J. Factor, Esq. THE LAW OFFICE OF WILLIAM J. FACTOR, LTD. E-mail: wfactor@wfactorlaw.com In re Lanphear Tool Works, Inc. dba LTW, Inc. Bankr. W.D. Mich. Case No. 13-05730 Chapter 11 Petition filed July 17, 2013 See http://bankrupt.com/misc/miwb13-05730.pdf represented by: Steven L. Rayman, Esq. RAYMAN & KNIGHT E-mail: courtmail@raymanstone.com In re Carmine Vento Bankr. D. Nev. Case No. 13-16186 Chapter 11 Petition filed July 17, 2013 In re Immigrant Liquors, Inc. Bankr. S.D.N.Y. Case No. 13-23196 Chapter 11 Petition filed July 17, 2013 See http://bankrupt.com/misc/nysb13-23196.pdf represented by: Steven D. Hamburg, Esq. E-mail: kshamburg@optonline.net In re Darla Shedron-Easley Bankr. D. Utah Case No. 13-28100 Chapter 11 Petition filed July 17, 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, Valerie Udtuhan, 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 ***