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/raid1/www/Hosts/bankrupt/TCR_Public/130813.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 13, 2013, Vol. 17, No. 223 Headlines ADVANCED COMPUTER: Aug. 20 Hearing on Motion to Dismiss Case AIRTRONIC USA: Amended Plan Confirmation Hearing Set for Oct. 2 ALL SERVICES: Wins Confirmation of Chapter 11 Plan ALLISON TRANSMISSION: Fitch Affirms 'BB-' Issuer Default Ratings AMERICAN AIRLINES: AE Pilots Want More Details About Merger AMERICAN AIRLINES: Max for Disputed Claims Allowed AMERICAN AIRLINES: Unsecured Creditors Support Chapter 11 Plan AMERICAN AIRLINES: Defends $20MM Severance for Chief Executive AMERICAN INT'L: Nuveen Funds Sue Executives for Securities Fraud ANACOR PHARMACEUTICALS: Incurs $14.1 Million Net Loss in Q2 ANTIOCH COMPANY: Court Denies Lee Morgan's Summary Judgment Bid ARCAPITA BANK: Inks Settlement Re: Payment of Linklaters Invoices ARCAPITA BANK: Can Give Consent to Sale of 3PD Holding to XPO ARCHDIOCESE OF MILWAUKEE: Judge Orders Release of Cemetery Docs BERNARD L. MADOFF: Ex-Employees Seek Two-Month Trial Delay BERNARD L. MADOFF: Trustee Urges 2nd Circ. to Block $410MM Deal BROADCAST INTERNATIONAL: Extends Maturity of Notes to Oct. 31 CAPMARK FINANCIAL: Reports $46.9MM Income in 6-Mos. Ended June 30 CENGAGE LEARNING: Creditors' Committee Taps Arent Fox as Counsel CINCINNATI BELL: Moody's Cuts CFR to B2 & Rates $400MM Loan Ba3 CINCINNATI BELL: S&P Assigns 'BB-' Rating to $400MM Term Loan B COASTAL CONDOS: Has Interim OK to Employ Rogero as Special Counsel COLLEGE BOOK: Aug. 27 Hearing on Trustee's Case Conversion Motion CONCHO RESOURCES: Reports $84.7 Million Net Income in Q2 CONNAUGHT GROUP: Resolves WARN Class Action COOPER-BOOTH: Seeks Extension to File Restructuring Plan CUMULUS MEDIA: Stock Issue No Impact on Moody's 'B2' CFR DC DEVELOPMENT: Stay Lifted to Set Off Club Escrow Account DELPHI CORP: Insurers Score Victory in Coverage Dispute DETROIT, MI: Manager Hopes for a Clean Balance Sheet in 14 Months DETROIT, MI: Financial Woes Hurt Borrowing by Its Neighbors DETROIT, MI: Grand Plans by Presidents Failed in Bankrupt City DETROIT, MI: Duggan, Napolean to Face Off in Mayoral Election DETROIT, MI: RDPMA to Fight Precedent-Setting Pension Case DETROIT, MI: Retiree Associations Continue to Fight for Interests DEWEY & LEBOEUF: Barclays Hit With Another Suit Over Capital Loans DEWEY & LEBOEUF: Trustee Sues BofA, Shook Hardy, MetLife DVORKIN HOLDINGS: Status Hearing Continued to November 18 EASTERN HILLS: Wins Interim Approval to Use Cash Collateral EASTMAN KODAK: Ricoh Breached IP in Alliance Gone Awry, Judge Says EASTMAN KODAK: Ohio Objects to Proposed Enviro Deal With NY EASTMAN KODAK: Inks Deal on Amended Environmental Settlement ECO BUILDING: Amends December 31 Quarter Form 10-Q ECOTALITY INC: Mulls Bankruptcy Filing; Hires FTI Consulting ELBIT VISION: Amends 2012 Annual Report ENERGY SERVICES: Obtains $3 Million From Units Sale ENESCO GROUP: Count VI of Ch.7 Trustee's Suit v. Gov't Dismissed EVERGREEN OIL: Gets OK to Use Cash Collateral Until Sept. 6 EVERGREEN OIL: Timec Co. Balks as Confirmation of 3rd Amended Plan EVERGREEN OIL: Has Until Oct. 5 to Decide on Unexpired Leases EVERGREEN OIL: Rochester Wong Approved as Employment Counsel EXCEL MARITIME: Christiana Trust Named Member of Creditors' Panel EXCEL MARITIME: Creditors' Panel Wants End of Exclusivity Period EXCEL MARITIME: Sells 2 Vessels for $43.2MM to Credit Suisse EXCO RESOURCES: Moody's Rates $300MM Sr. Secured Term Loan 'Ba3' EXIDE TECHNOLOGIES: Sec. 341 Meeting Continued to Aug. 14 EXIDE TECHNOLOGIES: Lowenstein Sandler Okayed as Committee Counsel EXIDE TECHNOLOGIES: Panel Can Hire Morris Nichols as Co-Counsel EXIDE TECHNOLOGIES: Panel Can Hire Zolfo Cooper as Fin'l Advisors EXPLO SYSTEMS: Explosives Company Files Chapter 11 in Louisiana FIBERTOWER CORPORATION: Seeks Further Extension of Exclusivity FIELD FAMILY: Hearing on Disclosure Statement Continued to Aug. 14 FREDDIE MAC: Posts $5 Billion Profit in Q2 Ended June GB HERNDON: Court Disallows Portion of Polsinelli Fee Request GGW BRANDS: Bankruptcy Court OKs $28MM Deal With Wynn GORDIAN MEDICAL: Seeks Court Nod to Obtain $4MM in DIP Financing HAWAII OUTDOOR: Aug. 26 Hearing on Continued Cash Collateral Use HIGHWAY TECHNOLOGIES: Aug. 14 Hearing on DIP Loan Extension HIGHWAY TECHNOLOGIES: Panel May Hire Richards Layton as Counsel HIGHWAY TECHNOLOGIES: Lenders to Fund Unsecured Creditors Trust HIGHWAY TECHNOLOGY: Creditors Refute Trustee's Settlement Qualms ICP STRATEGIC: Bankruptcies to Center in Cayman Islands INDYMAC BANCORP: Ex-CEO Asks 9th Circ. to Reverse $80MM Ruling INTRAOP MEDICAL: Court Clears to Auction Its Assets in September IPC INTERNATIONAL: Plans Strategic Sale in Ch. 11 ISOTONER CORP: S&P Retains 'B' CCR on Plans to Increase Debt JEH COMPANY: Can Continue Using Frost Bank Cash Until Aug. 1 JEH COMPANY: Has Approval to Hire Griffith Jay as Counsel JEH COMPANY: Can Employ Waters Vollmering as Tax Accountant JEMSEK CLINIC: Bid to Compel Blue Cross to Produce Docs Rejected KNIGHT INDUSTRIES: 7th Circ. Affirms Dismissal of $34MM BofA Suit LAND SECURITIES: Hires Colliers International as Brokerage Firm LEHMAN BROTHERS: Credit Agricole Loses Bid to Move $34MM Suit LEHMAN BROTHERS: UBS Agrees to Pay $120MM in Investor MDL LEHMAN BROTHERS: California Nonprofit Battles Over Soured Deal LMI AEROSPACE: S&P Revises Outlook to Negative & Affirms 'B+' CCR LOMBARD FLATS: Court Holds Creditor in Contempt MAXCOM TELECOMMUNICACIONES: No Creditors' Committee Appointed MAXCOM TELECOMMUNICACIONES: Seeks to Employ Kirkland as Counsel MAXCOM TELECOMMUNICACIONES: Taps Pachulski as Local Del. Counsel MAXCOM TELECOMUNICACIONES: Gets Approval for $45M Recapitalization MCJUNKIN RED: Moody's Expects Credit Metrics to Remain Strong MEDICAL CARD: Moody's Raises Debt Rating & CFR to B3; IFS to Ba3 MERCANTILE BANCORP: Auction Date Set for Sept. 12 MILESTONE SCIENTIFIC: Posts $74,000 Net Income in 2nd Quarter MMRGLOBAL INC: Amends First Quarter Form 10-Q NATIVE WHOLESALE: Conversion Motion Hearing Moved to Aug. 19 NEW ENGLAND COMPOUNDING: Ch. 11 Trustee Seeks Mediation NEW RIVER DRY DOCK: Florida Judge Won't Vacate Contempt Order ORCHARD SUPPLY: Lowe's Store Acquisition Plan Awaits Court Nod ORCHARD SUPPLY: Nine Additional Stores to Begin Closing Sales OTTAWA BUS: Newbys Liable to Webster Capital Debt PARADISE HOSPITALITY: Conversion Hearing Continued to Sept. 10 PATRIOT COAL: Reaches Consensual Agreement with UMWA on CBAs PATRIOT COAL: Vote on UMWA Settlement Scheduled for Aug. 16 PATRIOT COAL: Agrees With DIP Lenders on Revised Deal POWER VENTURES: Facebook Awarded $39K for Discovery, Legal Costs RAM OF EASTERN: Hires Howard Stallings as Real Estate Counsel RESIDENTIAL CAPITAL: Borrower Class Says $57M Set-Aside Not Enough RESIDENTIAL CAPITAL: Disclosure Statement Objections Filed RESIDENTIAL CAPITAL: Freddie Mac Balks at Settlement With FGIC RESIDENTIAL CAPITAL: Seeks Exclusivity Period Extension ROCK-TENN COMPANY: Moody's Changes Outlook on Ba1 CFR to Positive ROGERS BANCSHARES: Has Court Permission to Auction Shares ROTECH HEALTHCARE: Equity Holders Object to Chapter 11 Plan ROTECH HEALTHCARE: Employs GA Keen as Real Estate Advisor ROTHSTEIN ROSENFELDT: Ch.11 Trustee's Suit Against Gov't Barred RURAL/METRO: Section 341(a) Meeting Scheduled for Sept. 12 S. WHITE TRANSPORTATION: Acceptance's Lien Survived Confirmation SAGINAW COUNTY: Calls Off Planned $60MM Bond Sale SCHOOL SPECIALTY: Creditors Out to Nix 'Make-Whole' Interest SELECT TREE: Sec. 341 Creditors' Meeting Continued to Nov. 18 SIONIX CORP: Board Approves Change of Accounting Firm SOUTHERN FILM: Section 341(a) Meeting Slated for Aug. 29 SOUTHERN MONTANA: Restructuring Plan Likely to be Confirmed SPECTRUM BRANDS: S&P Raises CCR to 'B+' & Rates $1.1BB Loan 'BB' TITAN ENERGY: Amends First Quarter Form 10-Q TM REAL ESTATE: Can Employ Fox Rothschild as Bankruptcy Counsel TOURO INFIRMARY: S&P Raises Rating on 2 Bonds From 'BB+' TPO HESS: 1st Amended Joint Liquidation Plan Declared Effective TRIBUNE CO: Litigation Trustee Amends Two Complaints Over 2007 LBO TRINITY COAL: Delays Auction of Mine Operations TRINITY COAL: Judge Clears Co. to Pursue Restructuring Plan VS FOX: U.S. Trustee Seeks Chapter 7 Conversion of Cases WARREN RESOURCES: Moody's Withdraws CFR and Sr. Notes Rating WILLBROS GROUP: Moody's Assigns 'B3' CFR Following Refinancing WILLBROS GROUP: S&P Revises Outlook to Stable & Affirms 'B-' CCR WL HOMES: 3rd Cir. Says Wachovia Security Interest Enforceable WL HOMES: Wachovia Wins $10MM Bank Account * Moody's Notes Rise of Spec-Grade Corp. Default Rate in July * Indiana Senator to Push for Municipal Bankruptcy Law * Mortgage Delinquencies Hit Five-Year Low * Ex-Paralegal Sues Bankruptcy Firm Over Wrongful Termination * Obama Fraud Task Force Takes on the Big Banks * Court: Wells Fargo Must Face Mortgage Modification Suits * SEC Seeks Admission of Wrongdoing from JPMorgan * Wells Fargo Wins Trial over Securities-Lending Losses * SAC Business Plan Goes to Judge * Failure Tally Hits 18 as Regulators Close Wisconsin Bank * Huron Financial Outlines Technology Turnaround Strategy * Large Companies With Insolvent Balance Sheets ********* ADVANCED COMPUTER: Aug. 20 Hearing on Motion to Dismiss Case ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico will convene a hearing on Aug. 20, 2013, at 10:30 a.m., to consider: -- Advanced Computer Technology (ACT), Inc.'s request to deny former creditor Abraham Colon's motion to dismiss its case; and -- Berrios & Longo Law Offices' motion to dismiss its case. On July 10, Mr. Colon filed a second motion to dismiss, pro se. As reported in the Troubled Company Reporter on July 25, 2013, the Court denied Mr. Colon's first motion to dismiss the Debtor's case for lack of jurisdiction. The Debtor, in its request to deny the motion to dismiss, stated that Mr. Colon's prepetition claim has been paid in full, and Mr. Colon is no longer a creditor in the bankruptcy case. Therefore, he has no standing to continue to seek dismissal of the case. On July 19, 2013, a third party, the Debtor's parent company or affiliate IPSA, paid Mr. Colon $1,180 in full payment of his prepetition claim. B&L, in its motion to dismiss, stated that, among other things: 1. ACT has not paid all postpetition taxes. 2. ACT, its management, accountants and professionals have incurred in open breach of the duties of the DIP. 3. ACT has made unauthorized use of cash collateral. Jose E. Rivera filed a joinder to B&L's motion to dismiss, and unfair discrimination. 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. AIRTRONIC USA: Amended Plan Confirmation Hearing Set for Oct. 2 --------------------------------------------------------------- Global Digital Solutions on Aug. 12 disclosed that it has filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission to register GDSI's shares of common stock. The filing also provides details of GDSI's planned merger with Airtronic USA, Inc. "Filing this registration statement is a significant step in the maturity of GDSI as we pursue the previously announced merger with Airtronic and continue implementing our global growth strategy," said Richard J. Sullivan, who will become Chairman and CEO of GDSI after the acquisition with Airtronic is completed. "The Form 10 provides useful information to shareholders and potential investors and is an important first step toward our goal of listing GDSI on a national market such as NASDAQ or the American Stock Exchange." On or about August 13, 2012, GDSI and Airtronic disclosed that they had signed a letter of intent to enter into good faith discussions involving a potential strategic combination in which Airtronic would be acquired by GDSI. The companies signed a merger agreement on or about October 22, 2012 and are working together to file an Amended Plan of Reorganization for confirmation at a hearing scheduled on October 2, 2013. If confirmed, the Plan will allow Airtronic to emerge from chapter 11 bankruptcy with adequate working capital. About Global Digital Solutions, Inc. Global Digital Solutions (pinksheets:GDSI) -- http://www.gdsi.co -- is refocusing its business strategy on providing small arms manufacturing, knowledge-based and culturally attuned social consulting combined with complementary security and technology- related solutions in unsettled areas. About Airtronic USA, Inc. Airtronic -- http://www.Airtronic.net-- is an electro-mechanical engineering design and manufacturing company. The company provides small arms and small arms spare parts to the U.S. Department of Defense, foreign militaries, and the law enforcement market. The company also manufactures medical, avionics, and telecommunications original equipment. The company's products include grenade launchers, rocket propelled grenade launchers, grenade launcher guns, flex machine guns, grenade machine guns, rifles, and magazines. Founded in 1990, the company is based in Elk Grove Village, Illinois. On May 16, 2012, the voluntary petition of Airtronic, Inc. for liquidation under Chapter 7 was converted to chapter 11 reorganization. The company had filed for chapter 7 bankruptcy on March 13, 2012. ALL SERVICES: Wins Confirmation of Chapter 11 Plan -------------------------------------------------- Bankruptcy Judge Frank L. Kurtz granted final approval of the second disclosure statement and confirmed the Chapter 11 Plan of Reorganization of All Services, Inc. The only class of claims which was impaired under the Plan was Class 4 Unsecured Creditors. The Debtor has properly filed the Report of Balloting, indicating that 100% both as to amount and number of claims in Class 4 have accepted the Plan. The Plan has been accepted in writing by the creditors and equity security holders whose acceptance is required by law. A copy of the Court's August 1, 2013 Findings of Fact & Conclusions of Law is available at http://is.gd/m0M1L3from Leagle.com. All Services, Inc., filed a Chapter 11 petition (Bankr. E.D. Wash. Case No. 12-05110) on Dec. 3, 2012, listing under $1 million in both assets and debts. A copy of the petition is available at http://bankrupt.com/misc/waeb12-05110.pdf Roger William Bailey, Esq. -- roger.bailey.attorney@gmail.com -- at Bailey & Busey LLC, serves as the Debtor's counsel. ALLISON TRANSMISSION: Fitch Affirms 'BB-' Issuer Default Ratings ---------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings for Allison Transmission Holdings, Inc. (ALSN) and its subsidiary Allison Transmission, Inc. (ATI) at 'BB-'. In addition, Fitch has affirmed the 'BB' ratings on ATI's secured term loans and secured revolving credit facility, and the 'B+' rating on ATI's senior unsecured notes. A full list of the rating actions is included at the end of this release. Fitch's ratings apply to $2.3 billion in secured term loans, a $400 million secured revolving credit facility and $471 million in senior unsecured notes. The Rating Outlooks for ALSN and ATI are Stable. Rating Issues The ratings for ALSN and ATI reflect the automatic transmission manufacturer's strong competitive position as a global supplier to the commercial vehicle, industrial and military end markets. ALSN enjoys a very strong market position in North America, with nearly all school busses and the majority of motorhomes and Class 6 and 7 trucks manufactured with the company's transmissions in 2012. About half of the Class 8 straight trucks sold in North America in 2012 were manufactured with the company's transmissions, as well. Unlike most Tier 1 suppliers, ALSN has a brand name that commands a price premium from end users. However, ALSN has a significantly smaller market position outside North America as commercial vehicles in most global markets continue to be manufactured with manual transmissions. Nonetheless, global acceptance of fully automatic transmissions is growing in certain applications, such as busses and emergency vehicles. This has been particularly true in emerging markets like China and India, where ALSN has positioned itself to take advantage of opportunities for growth. A combination of premium pricing and manufacturing cost control has led to a consistently strong margin performance and free cash flow (FCF) generation, which remained positive even during the downturn of 2008 and 2009. Leverage remains moderately high, however, as a result of substantial bank borrowings incurred with the company's 2007 leveraged buy-out. Since that time, ALSN has been focused on using FCF to reduce debt, including a $212 million decline in the 12 months ended June 30, 2013. Relatively low pension obligations, a strong liquidity position and manageable near-term debt obligations are other credit positives. Credit concerns include the highly cyclical nature of the global commercial vehicle and industrial end markets, volatile raw material costs, relatively little global diversification, moderately high leverage and a concentrated maturity schedule. However, on the last point, Fitch notes that over the past year, ALSN has removed its near-term refinancing risk by shifting all of its B-1 term loan obligations due in 2014 to its B-2 and B-3 term loans. As a result, ALSN has no significant debt maturities until 2017, when the majority of the $1.2 billion B-2 term loan comes due. The commercial concerns regarding ALSN's business are mitigated somewhat by the company's strong FCF performance and its increasing penetration into emerging markets. Also, ALSN primarily supplies the vocational truck market, which is less cyclical than the manual transmission-dominated linehaul truck market. Nonetheless, a broad-based global downturn in commercial vehicle and industrial production could pressure ALSN's margins and FCF significantly. ALSN's concentrated ownership structure, with The Carlyle Group (Carlyle) and Onex Corporation (Onex) each holding a 40.5% stake in the company, is also a modest credit concern. ALSN's credit profile is characterized by strong margins and FCF generation but relatively high leverage. Fitch-calculated leverage (debt/Fitch-calculated EBITDA) in the 12 months ended June 30, 2013, was 4.8x, with $2.8 billion in debt and last 12 months (LTM) Fitch-calculated EBITDA of $590 million. The calculated EBITDA margin of 30.2% was down from 33.1% in the 12 months ended June 30, 2012 but remained very strong for a capital goods manufacturer. Fitch expects leverage to decline to the mid-4x range by year-end 2013, assuming the company does not prepay any portion of its term loans (other than required amortization payments). However, Fitch notes that the company has the financial flexibility to reduce leverage further in the intermediate term if it chooses to do so. The company's liquidity position at the end of the second quarter of 2013 was more than sufficient to meet its near-term cash obligations and included $227 million in cash and cash equivalents and $375 million in availability on its $400 million secured revolving credit facility (after accounting for $25 million in letters of credit). On Aug. 8, 2013, ALSN announced that Carlyle and Onex planned to sell a total of 23.805 million shares in a secondary offering that is expected to close on Aug. 12, 2013. When the share sale is completed, the selling shareholders' ownership stake will decline to approximately 70%. In conjunction with the secondary offering, ALSN plans to repurchase 4.7 million of the shares for $100 million. Although the share repurchase will temporarily reduce ALSN's liquidity, the company's substantial cash position at June 30, 2013, combined with its FCF generating potential, should provide it with more-than-sufficient liquidity to meet its near-term cash needs following the transaction. Importantly, Fitch does not expect the share repurchase to result in any meaningful incremental long-term borrowing by the company. ALSN has been focused on reducing debt over the past several years, with debt (including short-term debt) declining from $4 billion at year-end 2008 to $2.8 billion at June 30, 2013. The figure at June 30, 2013, was down $212 million from the level at June 30, 2012, as the company prepaid a portion of its term loans in the latter half of 2012. ALSN has the flexibility to further reduce its debt through optional prepayments on its secured term loans or early redemption of all or a portion of its 7.125% senior unsecured notes, and Fitch expects that the company will take advantage of opportunities to further reduce its debt over the intermediate term. Fitch expects FCF to remain solid over the intermediate term and FCF margins to remain strong by industry standards. LTM FCF was $293 million at June 30, 2013, leading to a strong 15% FCF margin. Funds flow from operations (FFO) was $421 million in the LTM period, with working capital providing another $15 million in cash. LTM capital spending was $87 million, equal to 4.5% of revenue, which was down from the LTM period ended June 30, 2012, largely due to the completion of the company's India plant expansion, as well as some spending curtailments due to the weak commercial vehicle market. The company has guided to full-year 2013 capital spending in the range $75 million to $85 million. Fitch notes that ALSN doubled its dividend in the second quarter of 2013, which will increase the payout to an estimated $87 million annually (before the effect of any share repurchases). However, the higher dividend has been factored into Fitch's forecasts for future FCF. ALSN's credit agreement includes a financial covenant that requires the company to maintain a senior secured leverage ratio below 5.50x. The actual senior secured leverage ratio, which is calculated net of cash, was well below the limit at 3.50x as of June 30, 2013. According to the facility's terms, a senior secured leverage ratio at or below 3.50x suspends certain provisions requiring excess cash flow (as defined in the agreement) to be applied to term loan reduction. Fitch does not expect the senior secured leverage ratio covenant to constrain the company or lead to any credit risk over the intermediate term. ALSN's pension obligations are relatively modest, with an underfunded status of only $14 million as of year-end 2012. The company's U.S. hourly pension plan was closed to new entrants in 2008, and benefits for U.S. hourly employees who retired prior to Oct. 2, 2011, are covered under General Motors Company's (GM) hourly plan. Fitch does not currently view ALSN's pension obligations as a meaningful credit risk. The secured revolver and term loans that comprise ATI's credit facility are rated one notch above ATI's IDR at 'BB', reflecting their collateral coverage, which includes virtually all of ATI's assets. Fitch notes that property, plant, and equipment and intangible assets (including ALSN's intellectual property) comprised $2.2 billion of the $4.9 billion in assets on ALSN's consolidated balance sheet at June 30, 2013. With the secured credit facility accounting for over 85% of the debt in ALSN's consolidated capital structure (assuming a fully-drawn revolver), ATI's senior unsecured notes are rated one notch below ATI's IDR at 'B+'. Rating Sensitivities Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- A meaningful reduction in leverage; -- Increased global revenue diversification; -- Continued strong margin performance; -- Ongoing positive FCF generation, especially in a weakened demand environment. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- A sharp decline in commercial vehicle production, especially in North America; -- A significant increase in debt, particularly to support shareholder-friendly activities; -- A merger or acquisition that results in higher leverage over an extended period of time; -- A competitive entry into the market that results in a significant market share loss. Fitch has affirmed the following ratings with a Stable Outlook: Allison Transmission Holdings, Inc. -- IDR at 'BB-'. Allison Transmission, Inc. -- IDR at 'BB-'; -- Senior secured revolving credit facility at 'BB'; -- Senior secured term loan B-2 at 'BB'; -- Senior secured term loan B-3 at 'BB'; -- Senior unsecured notes at 'B+'. AMERICAN AIRLINES: AE Pilots Want More Details About Merger ----------------------------------------------------------- Joseph Checkler writing for Daily Bankruptcy Review reports that the pilots of AMR Corp.'s American Eagle unit say they want more information about what their fate will be when AMR's merger with US Airways Group Inc. is finalized. 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. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. 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. 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: Max for Disputed Claims Allowed -------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved AMR's motion for entry of an order establishing a 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 the disputed claims reserve. As previously reported, "The Debtors seek to establish the Disputed Claims Reserve utilizing an aggregate maximum amount of $331 million of Disputed Claims (as it may be adjusted as further provided in this Motion, the 'Disputed Claims Reserve Amount'). This amount provides for a cushion of approximately $220 million over and above the Debtors' estimate of a reasonable high-end ultimate aggregate Allowed amount of Disputed Claims and includes (i) a reserve for Single-Dip General Unsecured Claims that may have been erroneously disallowed and (ii) a reserve for rejection damages arising from the prospective rejection of executory contracts and unexpired leases, which the Debtors do not expect to be material. This cushion will more than amply allow for unforeseen contingencies in the claims resolution process. Indeed, as stated, there is a cushion of approximately $220 million above the Debtors' good-faith, high-end estimate." 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. As reported by the TCR on Aug. 6, 2013, AMR Corporation and US Airways Group, Inc., received clearance from the European Commission for their proposed merger. 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: Unsecured Creditors Support Chapter 11 Plan -------------------------------------------------------------- Law360 reported that creditors of AMR Corp. on August 8 threw their support behind the airline's reorganization plan, which hinges on an $11 billion merger with US Airways Group Inc., saying it resolves complex issues and provides substantial benefits for creditors and existing shareholders. Law360 said the official committee of unsecured creditors said in a court filing that U.S. Bankruptcy Judge Sean H. Lane should overrule the objections to the plan, which have come from U.S. Trustee Tracy Hope Davis, Cantor Fitzgerald & Co. and the U.S. Airline Pilots Association, among others. 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: Defends $20MM Severance for Chief Executive -------------------------------------------------------------- Katy Stech, writing for Daily Bankruptcy Review, reported that against criticism from the U.S. government's executive-bonus watchdog, attorneys for American Airlines's parent company defended the $20 million severance payment promised to departing Chief Executive Tom Horton, arguing the bill would be paid once the company merges with US Airways Group Inc. 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. As reported by the TCR on Aug. 6, 2013, AMR Corporation and US Airways Group, Inc., received clearance from the European Commission for their proposed merger. 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 INT'L: Nuveen Funds Sue Executives for Securities Fraud ---------------------------------------------------------------- Andrew Harris at Bloomberg News reports that 25 Nuveen Investments Inc. funds sued American International Group Inc. (AIG), claiming the company and executives committed securities fraud leading to the U.S. financial crisis that intensified in 2008. Also named as defendants in a 237-page complaint in federal court in Chicago were former Chief Executive Officer Martin J. Sullivan, ex-Chief Financial Officer Steven Bensinger and Joseph Cassano, who led the AIG Financial Products unit, Bloomberg relates. "Plaintiffs suffered tens of billions of dollars in losses, at least, based on false and materially misleading statements that AIG, certain of its executives, directors, underwriters and outside auditor made," according to the complaint obtained by Bloomberg. According to the report, the funds accused the company, Sullivan and others of violating Illinois and federal securities laws, common law fraud and unjust enrichment. They asked for unspecified money damages. Nuveen Investments is based in Chicago. Among funds suing the insurer are the Dow 30 Enhanced Premium and Income Fund, the Nuveen Equity Premium Opportunity Fund (JSN) and the Nuveen Large Cap Value Fund, the report discloses. Each bought AIG securities at allegedly inflated prices that fell "when the truth was disclosed," according to the complaint. About AIG With corporate headquarters in New York, American International Group, Inc., is an international insurance company, serving customers in more than 130 countries. AIG companies serve commercial, institutional and individual customers through property-casualty networks of any insurer. In addition, AIG companies are providers of life insurance and retirement services. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. ANACOR PHARMACEUTICALS: Incurs $14.1 Million Net Loss in Q2 ----------------------------------------------------------- Anacor Pharmaceuticals reported a net loss of $14.09 million on $3.42 million of total revenues for the three months ended June 30, 2013, as compared with a net loss of $14.84 million on $2.56 million of total revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $29.17 million on $5.13 million of revenues, as compared with a net loss of $29.16 million on $4.97 million of total revenues for the same period a year ago. The Company's selected balance sheet data at June 30, 2013, showed $56.97 million in total assets and $2.45 million in total stockholders' equity. "We had a busy second quarter as we finalized preparations for our NDA for tavaborole, which was submitted on July 26th. This is an exciting time at Anacor as we begin to reap the benefits of the investments that we've made in drug development over the last decade and plan the commercialization of our later stage products," said David Perry, chief executive officer of Anacor Pharmaceuticals. A copy of the press release is available for free at: http://is.gd/l1tRSJ About Anacor Palo Alto, Calif.-based Anacor Pharmaceuticals (NASDAQ: ANAC) is a biopharmaceutical company focused on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. Anacor has discovered eight compounds that are currently in development. Its two lead product candidates are topically administered dermatologic compounds- tavaborole, an antifungal for the treatment of onychomycosis, and AN2728, an anti-inflammatory PDE-4 inhibitor for the treatment of atopic dermatitis and psoriasis. The Company's balance sheet at March 31, 2013, showed $37.4 million in total assets, $45.4 million in total liabilities, and a stockholders' deficit of $8.0 million. "Since inception, the Company has generated an accumulated deficit as of March 31, 2013, of approximately $230.3 million, and will require substantial additional capital to fund research and development activities, including clinical trials for its development programs and preclinical activities for its product candidates." As reported in the TCR on March 2, 2013, Ernst & Young LLP, in Redwood City, California, expressed substantial doubt about Anacor's ability to continue as a going concern, citing the Company's recurring losses from operations and its need for additional capital. ANTIOCH COMPANY: Court Denies Lee Morgan's Summary Judgment Bid --------------------------------------------------------------- In the civil action, THE ANTIOCH COMPANY LITIGATION TRUST, W. TIMOTHY MILLER, TRUSTEE, Plaintiff, v. LEE MORGAN, et al., Defendants, Case No. 3:10-cv-156 (S.D. Ohio), District Judge Timothy S. Black denied Lee Morgan's motion for partial summary judgment on Count Four; and granted Asha Moran's motion for partial summary judgment on Count Four, as there is no genuine dispute as to any material fact relating to Asha Moran's role, and she is entitled to judgment as a matter of law. Lee Morgan and Asha Morgan Moran move for summary judgment on the Plaintiff's breach of fiduciary duty claim with respect to the so- calld Levimo Transaction. The Plaintiff alleges that the Board failed to address a conflict of interest whereby Levimo, LLC, whose members are Lee and Vicki Morgan, purchased two of the Antioch Company's St. Cloud, Minnesota properties at their appraised value ($26 million) and leased them back to Antioch. Lee and Vicki Morgan personally made a $5 million down payment and pledged the bulk of their personal assets as collateral to finance the remainder of the $26 million purchase price. The Plaintiff takes issue with the Board's prudence in positioning Levimo to be the owner-lessor of the St. Cloud Properties. Morgan and Moran argue that summary judgment against the Plaintiff is proper because: (1) they played no role in the Antioch Board of Directors' decision making process and abstained from the Board's vote with respect to the sale and leaseback transaction; (2) the sale and leaseback transaction was fair to Antioch; and (3) Antioch expressly waived breach of fiduciary duty claims arising from the lease and induced Morgan and Moran to enter into the Sale-Leaseback Transaction. The Plaintiff maintains that the motion for summary judgment should be denied because Morgan and Moran breached their fiduciary duties as officers and directors of Antioch by using their influence as CEO and President of Creative Memories, respectively, to induce the Board to enter into the Sale-Leaseback Transaction on terms that improperly favored the Morgan family. Plaintiff further alleges that Morgan and Moran then benefited from the family's position as landlord, both by being enriched by the rents and various late fees paid to them and by using their position to try to control Antioch's future. Additionally, the Plaintiff alleges that during efforts to sell Antioch or recapitalize its debt, Morgan used his status as Antioch's landlord to pressure the Board to grant his family periods of exclusivity and give his proposals preference over third parties. A copy of the Court's Aug. 2 Order is available at http://is.gd/zgwJNwfrom Leagle.com. McDermott Will & Emery LLP, Interested Party, is represented in the lawsuit by by Charles Joseph Faruki, Esq., and Jeffrey S. Sharkey, Esq., at Faruki Ireland & Cox PLL. Brian P. Muething, Esq., Danielle Marie D'Addesa, Esq., David Thomas Bules, Esq., and Michael L. Scheier, Esq., at Keating Muething & Klekamp, represent appellants Lee Morgan; Asha Morgan Moran; Chandra Attiken; Marty Moran; Lee Morgan, GDOT 1; Lee Morgan, GDOT Trust 2; Lee Morgan, GDOT Trust 3; Lee Morgan, Pourover Trust 1; and Lee Morgan, Pourover Trust 2. The Antioch Company Litigation Trust Company is represented by Beth A. Silvers, Esq., and Marcia Voorhis Andrew, Esq., at Taft Stettinius & Hollister. Antioch Company Litigation Trust, W. Timothy Miller, Trustee, Plaintiff, is also represented by Beth A. Silvers, Esq., Emily Creditt McNicholas, Esq., and Marcia Voorhis Andrew, Esq., at Taft Stettinius & Hollister. Defendants Nancy Blair and Wayne Alan Luce are represented by Terence Leslie Fague, Esq., and Daniel Jerome Gentry, Esq., at Coolidge Wall Co., L.P.A. Defendants Malte Von Matthiessen, Dennis Sanan, Ben Carlson and Jeanine McLaughlin are represented by Jennifer L. Maffett, Esq., Scott Allen King, Esq., and Thomas Allen Knoth, Esq., at Thompson Hine. Defendant Candlewood Partners, LLC, represented by Kimberly A. Brennan, Esq., and Michael Nelson Schaeffer, Esq., at Kemp Schaeffer Rowe & Lardiere; and Robert R. Kracht, Esq., at McCarthy, Lebit, Crystal & Liffman Co., L.P.A. Robert Alan Klingler & Brian Joseph Butler represent Defendants Steve Bevelhymer, Karen Felix, Kimberly Lipson-Wilson, Barry Hoskins, and G. Robert Morris. Defendant Houlihan, Lokey, Howard & Zukin, Inc., is represented by Richard Alan Chesley, Esq., at DLA Piper LLP. Defendant James Northrup is represented by R. Daniel Prentiss, Esq., at R. Daniel Prentiss, P.C. About The Antioch Company St. Cloud, Minn.-based scrapbook company The Antioch Company and six affiliates filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case No. 13-41898) in Minneapolis on April 16, 2013. Antioch disclosed $10 million to $50 million in both assets and debts. The affiliates that separate filed for Chapter 11 are Antioch International-Canada LLC, Antioch International LLC, zeBlooms LLC, Antioch Framers Supply LLC, Antioch International-New Zealand LLC, and Creative Memories Puerto Rico, LLC. Founded in 1926, Antioch and its affiliates make up one of the world's preeminent suppliers of scrapbooks, related accessories, and photo solutions for memory preservation through the direct sales channel. The Debtors also go by business names Creative Memories, Antioch, Agenda, Antioch Publishing, Cottage Arts, Frame of Mind and Webway. Antioch has 200 employees and currently has operations through the Debtor companies and foreign subsidiaries in the United States, Canada, Japan, Australia, and New Zealand. In 2012, the Company's net revenue was approximately $93.8 million and it had a net loss of $3.7 million. Antioch previously sought bankruptcy protection in 2008 (Bankr. S.D. Ohio Case No. 08-35741). In the 2013 case, the U.S. Trustee appointed a seven-member creditors committee. ARCAPITA BANK: Inks Settlement Re: Payment of Linklaters Invoices ----------------------------------------------------------------- On Aug. 8, 2013, the U.S. Bankruptcy Court for the Southern District of New York approved a stipulation and agreed order entered into by and among the Official Committee of Unsecured Creditors of Arcapita Bank B.S.C.(c), et al., the Debtors, and Linklaters LLP, and the Eurolog Affiliates which settles all issues related to the payment of the Linklaters Invoices (incurred in connection with the Eurolog IPO) without litigation. Pursuant to the Stipulation and Order, the Debtors are authorized and directed to pay the Settlement Amount of GBP1,521,656.89 on the Effective Date to Linklaters, which represents the balance due to Linklaters under the Engagement Letter taking into account (a) a 17% reduction in outstanding fees under the Fee Motion and (b) a 100% reduction in Linklaters? expenses of GBP178,290.76 sought in the Fee Motion. The Settlement Amount will be an Allowed Administrative Expense Claim upon entry of this Stipulation and Order. The Debtors and the Committee agree to release and waive any claim against Linklaters on account of the Prepetition Transfers. Further, Linklaters agrees to waive any claim against the Debtors, the Reorganized Debtors, and each of the EuroLog Affiliates and any affiliates of the EuroLog Affiliates for fees, expenses, and VAT incurred by Linklaters due and owing under the Engagement Letter through the date of this Order. Linklaters agrees to waive its right to any additional payments that may be due under the Linklaters Fee Order. Also, within ten (10) business days following entry of the Stipulation and Order, the Debtors will use their best efforts to enter into the Reimbursement Agreement, which will be in form and substance acceptable to the Committee, which will obligate certain owners of the EuroLog Assets to reimburse the Settlement Amount to the Debtors; provided, however, that the Debtors? obligation to pay the Settlement Amount to Linklaters as an Allowed Administrative Expense Claim will be absolute and not conditioned upon the Reimbursement Agreement in any way. As reported in the TCR on March 22, 2013, the Debtors seek to provide approximately $10.2 million in funding to certain non- Debtor affiliates. Specifically, the Debtors request the Court to confirm their authority to lend certain amount to their non-Debtor EuroLog Affiliates in accordance with Section 363(c) of the Bankruptcy Code. The Company said that as an investment bank, funding investments in portfolio companies fits squarely within the Debtors' ordinary course of business, and that even if the Court disagrees, there is ample support to loan the funds needed to pay the IPO Fees pursuant to Section 363(b) of the Bankruptcy Code because doing so constitutes a sound exercise of business judgment. The EuroLog Affiliates own and operate a variety of warehousing assets located throughout Europe, which assets consist of (1) 46 warehouse properties with a gross leasable area of approx. 15 million square feet that are located in seven countries across Europe; (2) six undeveloped real estate parcels located in four countries that are suitable for development of approximately 6.6 million square feet of additional leasable area; and (3) a group of real estate asset management companies with nearly 70 employees in eight offices. According to papers filed with the Court, even though the EuroLog IPO was not completed after launch, each of the IPO Professionals provided valuable services that inured to the benefit of the Debtors' estates. Arcapita says that without their efforts, the EuroLog Affiliates would not have been able to file the Intention to Float and would not have even had the opportunity to launch the EuroLog IPO. The fact that the EuroLog IPO was not completed does not in any way detract from the quality and importance of the services rendered, Arcapita said. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCAPITA BANK: Can Give Consent to Sale of 3PD Holding to XPO ------------------------------------------------------------- On Aug. 8, 2013, the U.S. Bankruptcy Court for the Southern District of New York authorized Arcapita Bank B.S.C.(c), et al., to provide such consents as are necessary or appropriate to facilitate the sale by their indirect non-debtor subsidiary, Logistics Holding Company Limited, of Logistics Holding?s equity interest in 3PD Holding, Inc., to XPO Logistics, Inc., in a deal valued at $365 million. As reported in the TCR on July 22, through the intermediate holding companies, the Debtors collectively hold a beneficial interest of approximately 13% in 3PD and, hence, will receive approximately 13% of the net proceeds of the Sale in addition to other management and financing fees. According to papers filed with the Court, on July 12, 2013, non- Debtor 3PD, with the support of its shareholders, entered into a definitive agreement to sell all outstanding 3PD common stock to XPO Logistics for $365 million. Because the Sale will likely not close prior to the effective date of the Debtors' Chapter 11 plan, the Sale would, by default, be subject to the Plan provisions governing the disposition of the Debtors' investments. According to the Debtors, if required to be implemented with respect to 3PD, the Disposition Procedures would require a duplication of the marketing efforts, additional delay, and administrative burdens. Moreover, implementation of the Disposition Procedures may constitute a breach of the Purchase Agreement by Logistics Holdings. In order to avoid disrupting the Sale, the Debtors are seeking to simplify the process and consummate the Sale based on the process that has already taken place and pursuant to a Court order, and are therefore seeking to exempt the Sale from the Disposition Procedures. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCHDIOCESE OF MILWAUKEE: Judge Orders Release of Cemetery Docs --------------------------------------------------------------- Annysa Johnson, writing for the Milwaukee Wisconsin Journal Sentinel, reported that the Archdiocese of Milwaukee must release to its bankruptcy creditors documents that could show whether a federal judge, who sided with the church on a key issue involving its cemeteries, might have had a conflict of interest that should have been disclosed, U.S. Bankruptcy Judge Susan V. Kelley ruled. According to the report, Kelley issued the ruling after a brief hearing, stressing that it was not a commentary on U.S. District Judge Rudolph T. Randa's July 29 ruling or whether he should have recused himself from the case. "This should not in any way, shape or form be construed as a ruling on the appropriateness of Judge Randa's recusal or nonrecusal, or whether he has a financial interest or not" in the archdiocese's cemetery litigation, Kelley said, the report related. Randa ruled that forcing the church to use even some of the more than $50 million it set aside in a trust for the perpetual care of cemeteries to pay its bankruptcy debts -- primarily sex abuse settlements -- would substantially burden its free exercise of religion under the First Amendment and a 1993 law aimed at protecting religious freedom, the report further related. Randa's ruling, which overturned an earlier decision by Kelley, was a key victory for the archdiocese in that it eliminated one of the last major assets available for a settlement with sex abuse victims who filed claims in the bankruptcy, the report said. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) BERNARD L. MADOFF: Ex-Employees Seek Two-Month Trial Delay ---------------------------------------------------------- Patricia Hurtado at Bloomberg News reports that five former employees of Bernard Madoff, scheduled to go on trial in October for allegedly helping the convicted con man carry off the largest Ponzi scheme in U.S. history, are seeking a two-month postponement. Bloomberg relates that U.S. District Judge Laura Taylor Swain in Manhattan set an Oct. 7 trial date for the fraud case against Daniel Bonventre, Annette Bongiorno, Joann Crupi, Jerome O'Hara and George Perez. The defendants, who have all pleaded not guilty, are charged with crimes including conspiracy, fraud and falsifying records. According to the report, Mr. Perez's lawyer, Larry Krantz, said in a letter August 7 that a revised indictment filed by the government on July 29 "contains a wholesale re-writing" of the previous one and includes additional allegations. Mr. Krantz said he was making the request on behalf of all five defendants, Bloomberg relays. "They present an entirely different spin on many of the core facts and introduce a wealth of entirely new allegations," Bloomberg quotes Mr. Krantz as saying. "We also seek a 60-day adjournment of the trial date, so that we have adequate time for trial preparation." Federal prosecutors have obtained guilty pleas from Madoff and his brother Peter Madoff, who helped him run the firm for four decades, and seven former employees. Bernard Madoff is serving a 150-year sentence in federal prison in North Carolina while Peter Madoff was sentenced to 10 years in prison. The case is U.S. v. O'Hara, 10-cr-00228, U.S. District 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. BERNARD L. MADOFF: Trustee Urges 2nd Circ. to Block $410MM Deal --------------------------------------------------------------- Law360 reported that the bankruptcy trustee of Bernard L. Madoff's investment firm on August 7 again railed at the $410 million settlement between New York state and Madoff feeder fund manager J. Ezra Merkin, telling the Second Circuit the deal makes an end run around the liquidation process. According to the report, Irving Picard told the appeals court that the bankruptcy code and the Securities Investor Protection Act prevent interference with his recovery action by any other actions that will cause immediate economic harm to the Madoff estate and relate to the same issues. 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. BROADCAST INTERNATIONAL: Extends Maturity of Notes to Oct. 31 ------------------------------------------------------------- Broadcast International, Inc., entered into an amendment to the Note and Warrant Purchase and Security Agreement and Senior Secured Convertible Notes with nine individuals and six companies. The principal amount of the Senior Secured Convertible Notes aggregate $3,450,000 and were originally due July 13, 2013. The Amendment extends the Maturity Date of the Senior Notes from July 13, 2013, to Oct. 31, 2013. On Aug. 8, 2013, the Company entered into a Conversion Agreement with one of its directors to convert his rights under an Accounts Receivable Purchase Agreement with the Company into a convertible note. In that connection the individual had the right to receive $750,000 from the sale of accounts receivable and converted that right into a promissory note with a principal amount of $750,000 bearing interest at the rate of 12 percent per annum with all principal and accrued interest due and payable on Oct. 31, 2013. The note is convertible into common stock of the Company at the rate of $.25 per share at the option of the note holder. About Broadcast International Based in Salt Lake City, Broadcast International, Inc., installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. The Company reported net income of $1.30 million in 2011, compared with a net loss of $18.66 million in 2010. The Company's balance sheet at March 31, 2013, showed $2.64 million in total assets, $9.07 million in total liabilities, and a $6.43 million total stockholders' deficit. CAPMARK FINANCIAL: Reports $46.9MM Income in 6-Mos. Ended June 30 ----------------------------------------------------------------- Capmark Financial Group Inc. on Aug. 12 issued its Quarterly Report as of and for the three and six months ended June 30, 2013. The Company reported consolidated net income of $46.9 million and $45.2 million for the three and six months ended June 30, 2013, respectively. The Company also reported consolidated total assets of $1.6 billion, consolidated total liabilities of $0.9 billion, and stockholders' equity of $0.7 billion as of June 30, 2013. Highlights for the second quarter were: -- The Company realized total proceeds of $210 million from the monetization of loan and REO assets. -- The Company achieved consolidated net gains on loans, investments and real estate of $56 million, partially offset by $14 million of noninterest expense. The net gains included a $14 million gain on shares in a collateralized debt obligation that were redeemed. -- The Company paid a cash distribution of $2.50 per share on June 21, 2013 to shareholders of record on June 17, 2013, bringing aggregate distributions to shareholders since emergence from bankruptcy to $21.50 per share. -- The Company paid an additional $2 million and $4 million under the settlement agreement with the Japanese lenders and the Crystal Ball Holding of Bermuda settlement agreement, respectively. The settlement agreements and the Company's obligations thereunder were terminated. -- The Company continued to reduce its staffing levels and office locations commensurate with the reduction in assets. The Company reduced its staff from 90 employees at year end to 54 at June 30, 2013. The Company reduced its five office locations at December 31, 2012 to three by the end of the second quarter. Consolidated Balance Sheet The Company had consolidated total assets of $1.6 billion and $2.9 billion as of June 30, 2013 and December 31, 2012, respectively, primarily comprised of a portfolio of loans, real estate, real estate-related assets and cash and cash equivalents. Assets totaling $0.7 billion and $1.4 billion were held at Capmark Bank and $153.5 million and $253.5 million were associated with discontinued operations as of June 30, 2013 and December 31, 2012, respectively. The Company had consolidated total liabilities of $0.9 billion and $1.5 billion as of June 30, 2013 and December 31, 2012, respectively. Capmark Bank had liabilities of $0.6 billion and $1.0 billion and liabilities of $79.2 million and $114.7 million were associated with discontinued operations as of June 30, 2013 and December 31, 2012, respectively. Capmark Bank's liabilities were primarily comprised of Federal Deposit Insurance Corporation ("FDIC")-insured deposit liabilities as of June 30, 2013 and December 31, 2012. Total stockholders' equity was $0.7 billion as of June 30, 2013 as compared to $1.3 billion as of December 31, 2012. The reduction was primarily due to the $701.7 million of cash distributions to holders of the Company's common stock in the six months ended June 30, 2013. Consolidated Results of Operations The Company had income from continuing operations before income taxes of $51.4 million in the three months ended June 30, 2013, primarily due to $60.4 million of noninterest income partially offset by $13.5 million of noninterest expense. Noninterest income of $60.4 million primarily included $36.2 million of realized gains on the disposition of real estate investments, $14.2 million of realized gain on the redemption of an interest in a collateralized debt obligation, $3.0 million of recapture of losses from the application of the lower of cost or fair value to loans held for sale and $2.9 million of realized gains on full or partial dispositions of loans held for sale. Noninterest expense of $13.5 million included $6.6 million of compensation and benefits costs and $5.9 million of professional fees, of which $3.5 million were associated with litigation and bankruptcy related matters. Interest expense of $1.7 million primarily included $8.6 million of contractual interest expense from deposit liabilities at Capmark Bank offset by $7.2 million from the accretion of the fresh start accounting premium for the deposit liabilities. The Company had income from continuing operations before income taxes of $53.1 million in the six months ended June 30, 2013, primarily due to $70.7 million of noninterest income and $18.5 million of interest income on loans held for sale and investment securities available for sale. The $70.7 million of noninterest income and $18.5 million of interest income was partially offset by $32.4 million of noninterest expense and $3.7 million of interest expense. Noninterest income of $70.7 million primarily included $36.4 million of realized gains on the dispositions of real estate investments, $14.2 million of realized gain on the redemption of an interest in a collateralized debt obligation and $15.0 million of realized gains on full or partial dispositions of loans held for sale. Interest income in the six months ended June 30, 2013 included the recognition of $5.5 million of previously deferred interest on loans held for sale. The $32.4 million of noninterest expense included $15.4 million of compensation and benefits costs and $11.6 million of professional fees, of which $6.0 million were associated with litigation and bankruptcy related matters. The $3.7 million of interest expense primarily included $18.8 million of contractual interest expense from deposit liabilities at Capmark Bank offset by $15.7 million from the accretion of the fresh start accounting premium for the deposit liabilities. Liquidity As of June 30, 2013, the Company's continuing operations had $852.7 million in total cash and cash equivalents (including restricted cash), of which $690.6 million was held by Capmark Bank and $162.2 million was held by its other subsidiaries. Cash from consolidated VIEs is from entities that are no longer owned by the Company but continue to be recognized on the Company's balance sheet because derecognition criteria under GAAP have not been met. On August 2, 2013, the Company received $6.4 million of cash from the reserves for disputed administrative and priority claims. This cash release was due to the resolution of administrative and priority claims. The Company's primary sources of liquidity are expected to be (1) principal and interest payments on loans, (2) proceeds from the sale of loans, including discounted payoffs received in connection with loan workout efforts, (3) distributions received from equity investments, (4) proceeds from the sale of real estate and (5) sales of other assets in its portfolio. Capmark Bank has cash and cash equivalents in excess of all of its remaining deposit liabilities and other liabilities as well as its expected operating expenses over the next 12 months. On October 2, 2009, Capmark Bank consented to cease and desist orders (the "C&D Orders") with the FDIC and the Utah Department of Financial Institutions ("UDFI"). Capmark Bank is prohibited under the C&D Orders from declaring or paying dividends or making any other form of payment representing a reduction in capital to Capmark Financial Group Inc. without the prior written consent or non- objection of the FDIC and the UDFI. The Company expects to generate sufficient liquidity to meet its needs for cash in its Non-Capmark Bank operations over the next 12 months, including paying its operating expenses. The Company also expects that Capmark Bank has sufficient liquidity to meet its needs for cash for the next 12 months, including paying its operating expenses and interest and princi pal due on maturing deposit liabilities and other liabilities. Capmark Bank's remaining deposits mature prior to August 31, 2013. The Company paid a cash distribution of $2.50 per share on June 21, 2013 to shareholders of record on June 17, 2013. The Company will consider making additional distributions to shareholders of cash in excess of working capital needs and expects to make a distribution in the third quarter of 2013; however, the specific timing and amount of any distribution have not been determined. Capmark Bank distributed $157.1 million, $4.9 million and $34.7 million in cash to Capmark Financial Group Inc. in February, May and August 2013, respectively. Other Pursuant to the Company's Third Amended Joint Plan of Capmark Financial Group Inc. and certain of its subsidiaries and affiliates, on the effective date of the Plan the Company established a reserve for disputed general unsecured claims which consisted of: (i) $39.0 million of cash, (ii) $54.1 million of its secured notes, and (iii) 5.5 million shares of the Company's common stock. Pursuant to the Plan, semi-annual supplemental distributions from the GUC Reserve have been made since the Plan's effective date. In July and August 2013, as part of the supplemental distribution required under the Plan, approximately $56 million in cash and 1.8 million shares of the Company's common stock from the GUC Reserve became available for distribution to the holders of allowed general unsecured claims in accordance with the Plan. As of the date of this report, the GUC Reserve consisted of approximately $71 million of cash and 1.9 million shares of the Company's common stock, net of any amounts withheld for expected tax payments. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- provided financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On Oct. 25, 2009, Capmark Financial and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Capmark's financial advisors were Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel were Dewey & LeBoeuf LLP, and Richards, Layton & Finger, P.A. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP served as tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, served as claims and notice agent. The Official Committee of Unsecured Creditors tapped Kramer Levin Naftalis & Frankel LLP as its counsel and JR Myriad 1LLC as its commercial real estate business advisors. The Committee also retained Cutler Pickering Hale and Dorr LLP as its attorneys for the special purpose of providing legal services in connection with Federal Deposit Insurance Corporation matters. Protech Holdings C LLC, an affiliate of Capmark, filed for Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). Protech estimated assets and debts in excess of $1 billion as of the filing date. Since filing for Chapter 11, Capmark completed three sales to generate more than $1 billion in cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. In April 2011, Greenline Ventures LLC completed the acquisition of the New Markets Tax Credit division of Capmark Financial Group Inc. Since inception of the NMTC program, Capmark's NMTC division has closed over $1.1 billion of NMTC investment funds and financed over $2.5 billion of projects and businesses in low income communities nationwide. Capmark won confirmation of its reorganization plan in August 2011 allowing it to distribute about $4 billion of stock, cash and new debt to unsecured creditors and streamline operations around its flagship bank. Unsecured creditors were to receive $900 million in cash, $1.25 billion in secured notes and 100 million shares in reorganized Capmark, now a bank holding company. The plan was declared effective in October. Also in October 2011, Capmark closed the sale of its low-income housing tax credit asset portfolio to Hunt Cos. Inc., a national real estate services company. El Paso, Texas-based Hunt was the successful bidder in the auction of the assets, paying $102.4 million. CENGAGE LEARNING: Creditors' Committee Taps Arent Fox as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Cengage Learning, Inc., et al., seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York to retain Arent Fox LLP as bankruptcy attorneys, nunc pro tunc to July 10, 2013. Arent Fox will be paid the following hourly rates: Partners $550 - $940 Of Counsel $540 - $850 Associates $305 - $585 Paraprofessionals $165 - $300 The firm will also be reimbursed for any necessary out-of-pocket expenses. Andrew I. Silfen, Esq. -- andrew.silfen@arentfox.com -- a partner at Arent Fox LLP, in New York, discloses that his firm does not hold or represent any interest adverse to the Committee with respect to the matters for which it is being retained and is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code (as modified by Section 1103(b) of the Bankruptcy Code). He also assures the Court that neither Arent Fox nor its professionals have any connection with the Debtors, their estates, or creditors. The Creditors' Committee also proposes to retain Leah M. Eisenberg, Esq. -- leah.eisenberg@arentfox.com -- and Robert M. Hirsh, Esq. -- robert.hirsh@arentfox.com -- at Arent Fox LLP, in New York; and Mark B. Joachim, Esq. -- mark.joachim@arentfox.com - - at Arent Fox LLP, in Washington, D.C. About Cengage Learning Stamford, Connecticut-based Cengage Learning -- http://www.cengage.com/-- provides innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. Cengage Learning's brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South Western and Wadsworth, among others. Apax Partners LLP bought Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion transaction. The acquisition was funded in part with $5.6 billion in new debt financing. Cengage Learning Inc. filed a petition for Chapter 11 reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2, 2013, in Brooklyn, New York, after signing an agreement where holders of $2 billion in first-lien debt agree to support a reorganization plan. The plan will eliminate more than $4 billion of $5.8 billion in debt. First-lien lenders who signed the so-called plan-support agreement include funds affiliated with BlackRock Inc., Franklin Mutual Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second- lien creditors and holders of unsecured notes aren't part of the agreement. The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard Freres & CO. LLC as financial advisor, Alvarez & Marsal North America, LLC, as restructuring advisor, and Donlin, Recano & Company, Inc., as claims and notice agent. A nine-member official committee of unsecured creditors has been appointed in the Debtors' Chapter 11 cases. CINCINNATI BELL: Moody's Cuts CFR to B2 & Rates $400MM Loan Ba3 --------------------------------------------------------------- Moody's Investors Service downgraded several ratings of Cincinnati Bell Inc., including the company's corporate family rating to B2 from B1, the company's probability of default rating to B2-PD from B1-PD, and CBB's senior unsecured rating to B3 from B1. Moody's also affirmed the company's speculative grade liquidity rating of SGL-3, indicating an adequate liquidity position. The outlook is stable. Moody's has assigned a Ba3 rating to the proposed $400 million Term Loan B due 2020 and has downgraded the rating on the amended credit facility to Ba3 from Ba1. The proceeds from the term loan are expected to be used to repay existing unsecured debt. The downgrade reflects Moody's expectation that EBITDA declines are likely to be larger and persist longer than Moody's earlier estimates and that potentially higher interest rates will reduce the value of the company's 69% ownership stake in CyrusOne Inc., a data center REIT. The rating assigned to the new term loan reflects a one notch override to the modeled output because Moody's believes that the percentage of secured debt in the capital structure will increase over time. Moody's believes that the erosion of the wireless business will accelerate due to increasingly aggressive competitive challenges and that the growth of fiber based services, while healthy, will be insufficient to offset this pressure. And, while the company has committed to use the proceeds from the monetization of its ownership interest in CyrusOne Inc. to reduce debt, uncertainty surrounding the timing and amount of debt reduction increases the likelihood that leverage (Debt to EBITDA) will remain elevated through 2015. Moody's has taken the following rating actions: Issuer: Cincinnati Bell Inc. Corporate Family Rating -- B2, from B1 Probability of Default Rating -- B2-PD, from B1-PD Speculative Grade Liquidity Rating -- SGL-3, affirmed Outlook -- Stable, from Negative Senior Secured Notes -- Ba3 (LGD-2, 23%) from Ba1 (LGD-1, 8%) Senior Unsecured Notes -- B3 (LGD-4, 69%) from B1 (LGD-4, 57%) Senior Subordinated Notes -- Caa1 (LGD-6, 92%) from B3 (LGD-6, 90%) Convertible Preferred Stock -- Caa1 (LGD-6, 98%) from B3 (LGD-6, 97%) $200 Million Revolving Credit Facility due 2017 -- Ba3 (LGD-2, 23%) from Ba1 (LGD-1, 8%) New $400 Million Term Loan B due 2020 -- Assigned Ba3 (LGD-2, 23%) Issuer: Cincinnati Bell Telephone Company Outlook -- Stable, from Negative Senior Unsecured Notes -- Ba2 (LGD-1, 1%) from Ba1 (LGD-1, 2%) Ratings Rationale: The B2 Corporate Family Rating reflects Cincinnati Bell's legacy position as an incumbent local telecommunications provider with a still large market share offset by relatively high leverage. CBB is significantly increasing the amount of capital is invests in its wireline network in an attempt to reinvent itself as a fiber based service provider. However, these new fiber based products (i.e. video) have much lower margins than the legacy products (i.e. switched voice) that are being lost. At the same time, its wireless business is eroding and the company has recognized that it doesn't have the scale or resources to compete in this segment. CBB's stake in CyrusOne Inc. presents it with the opportunity to reduce debt after restrictions on the sale of its 69% ownership position in the data center provider expire in January 2014. The company has committed to use the proceeds from this monetization (which will likely occur in steps over several years) to reduce its large debt load. The stable rating outlook is based on Moody's expectations that CBB will begin monetizing its CyrusOne investment in the middle of 2014 and use the proceeds to steadily reduce debt. Consequently, after peaking at over 6.0 times in early 2014, leverage is expected to begin trending down as debt reduction outpaces earnings and cash flow declines. CBB's rating would come under renewed pressure if CBB's liquidity position weakens materially, if debt reduction is delayed beyond 2014 or if earnings decline more than expected. Specifically, if leverage was likely to remain at or above 6.0 times for an extended period of time CBB's rating would likely be downgraded. Larger than expected proceeds from the sale of CyrusOne (and/or the sale of the wireless business) that lead to leverage declining to below 4.0 times could lead to positive ratings momentum if CBB can demonstrate that its strategy is likely to produce consistent meaningfully positive free cash flow. The principal methodology used in this rating was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CINCINNATI BELL: S&P Assigns 'BB-' Rating to $400MM Term Loan B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '1' recovery rating to Cincinnati Bell Inc.'s (CBI) proposed $400 million term loan B due 2020. The '1' recovery ating indicates S&P's expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. "At the same time, we have revised our recovery ratings on CBI's senior unsecured notes because we have augmented our default valuation with an estimation of the value of CBI's remaining equity interests in its former datacenter operations at the time of simulated default. We are revising our recovery rating on CBI's existing senior unsecured debt to a '3' from a '4'. The 'B' issue-level rating on the notes is unchanged. The '3' recovery rating indicates our expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. Recovery ratings on the company's existing subordinated debt remain unchanged," S&P said. S&P expects that CBI will use proceeds from the term loan to refinance higher coupon senior notes, including its 8.25% senior notes due 2017. Following the proposed transaction, S&P expects total adjusted debt leverage to remain relatively unchanged, at about 6.2x (pro forma for the IPO of data center CyrusOne in January 2013) for the 12 months ended June 30, 2013. S&P expects senior secured debt leverage to increase to about 1.7x on a reported basis. In conjunction with the term loan issuance, the company is seeking amendments to its credit agreement, including a loosening of its maximum senior secured leverage ratio to 3x from 1.75x, as well as modifications to its maximum total leverage ratio. In addition, the company is seeking greater flexibility to pay dividends, repurchase stock or make other restricted payments using future CyrusOne stock sale proceeds. S&P continues to believe that the primary use of CyrusOne sale proceeds will be for debt repayment. The borrower under the proposed senior secured term loan is CBI. The credit facilities are guaranteed by all existing and future subsidiaries, excluding certain subsidiaries such as CBI's wholly owned incumbent local exchange carrier (ILEC) subsidiary Cincinnati Bell Telephone Co., as well as the receivables financing facility at wholly owned subsidiary Cincinnati Bell Funding LLC. In addition, the credit facility is structurally junior to obligations at these subsidiaries, including unsecured obligations. The corporate credit rating on Cincinnati Bell is 'B' and the outlook is stable. For the corporate credit rating rationale, see the summary analysis on Cincinnati Bell published on May 21, 2013, on RatingsDirect. RATINGS LIST Cincinnati Bell Inc. Corporate Credit Rating B/Stable/-- New Rating Cincinnati Bell Inc. $400 Mil. Term Loan B Due 2020 BB- Recovery Rating 1 Recovery Rating Revised To From Cincinnati Bell Inc. Senior Unsecured B B Recovery Rating 3 4 COASTAL CONDOS: Has Interim OK to Employ Rogero as Special Counsel ------------------------------------------------------------------ The Hon. A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida, in an interim order, authorized Coastal Condos, LLC, to employ David M. Rogero, P.A. as special counsel. The firm will advise and represent the Debtor generally with respect to its general business matters, including, without limitation, evictions and other landlord tenant disputes. The Court will hold a hearing Sept. 3, at 3 p.m. to consider final approval of the request. About Coastal Condos Coastal Condos filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-20729) on May 8, 2013. The Debtor owns and manages 72 condominiums at 7601 East Treasure Drive, Miami Beach, FL 33141. Judge A. Jay Cristol presides over the case. David R. Softness, Esq., at David R. Softness, P.A., in Miami, Florida, represents the Debtor as counsel. Coastal Condos was the target of a $15.8 million foreclosure lawsuit filed by North Bay Village-based First Equitable Realty III in May 2012. Coastal Condos owns 72 condo units at Grandview Palace in North Bay Village, Florida, valued at $10.8 million. Personal property is valued at $389,000. Assets total $11.2 million and liabilities total $16.6 million. It says that no creditors are holding secured claims. Coastal Condos first sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 12-07146) on May 25, 2012. The case was dismissed May 6, 2013. Until further notice, the U.S. Trustee will not appoint a committee of creditors in the Debtor's case. COLLEGE BOOK: Aug. 27 Hearing on Trustee's Case Conversion Motion ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee will convene a hearing on Aug. 27, 2013, at 9 a.m. to consider the motion to convert the Chapter 11 case of College Book Rental Company, LLC to one under Chapter 7 of the Bankruptcy Code. Robert H. Waldschmidt, the Chapter 11 trustee in the Debtor's bankruptcy case, requests for the conversion of the case. As reported in the Troubled Company Reporter on July 26, 2013, the Court authorized the Debtor to sell certain assets to CBR Funding, LLC. According to the Debtor, no other party has made a competitive bid for those assets, such that CBR Funding was the only bidder, and the objections of McGraw-Hill Companies and the other publishers are not well-founded and overruled. The purchaser, pursuant to an asset purchase agreement, agreed to acquire the assets for $4,500,000 consisting of (i) $4,100,000 in the form of a credit bid and (ii) the assumed liabilities. About College Book Four creditors filed an involuntary Chapter 11 bankruptcy petition against Murray, Kentucky-based College Book Rental Company, LLC (Bankr. M.D. Ky. Case No. 12-09130) in Nashville on Oct. 4, 2012. Bankruptcy Judge Marian F. Harrison oversees the case. The petitioning creditors are represented by Joseph A. Kelly, Esq., at Frost Brown Todd LLC. The petitioning creditors are David Griffin, allegedly owed $15 million for money loaned; Commonwealth Economics, allegedly owed $15,000 for unpaid services provided; John Wittman, allegedly owed $158 for unpaid services provided; and CTI Communications, allegedly owed $21,793 for unpaid services provided. The owners of College Book Rental consented to the Chapter 11 case and the appointment of a Chapter 11 trustee to run CBR. CBR is co-owned by Chuck Jones of Murray and David Griffin of Nashville, Tenn. An agreed order for relief under Chapter 11 was entered on Oct. 15, 2012. Robert H. Waldschmidt was appointed as trustee the next day. The Trustee employed Robert H. Waldschmidt, Esq. at Howell & Fisher, PLLC as his counsel. The Debtor disclosed $17,913,543 in assets and $25,322,442 in liabilities as of the Chapter 11 filing. CONCHO RESOURCES: Reports $84.7 Million Net Income in Q2 -------------------------------------------------------- Concho Resources Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $84.70 million on $562.78 million of total operating revenues for the three months ended June 30, 2013, as compared with net income of $319.29 million on $403.16 million of total operating revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported net income of $114.79 million on $1.03 billion of total operating revenues, as compared with net income of $350.41 million on $876.94 million of total operating revenues for the same period a year ago. As of June 30, 2013, the Company had $9.24 billion in total assets, $5.64 billion in total liabilities and $3.59 billion in total stockholders' equity. "Our performance during the second quarter of 2013 was exceptional and highlights the quality of our assets across the resource-rich Delaware and Midland Basins," commented Tim Leach, Concho's chairman, CEO and president. "Our Delaware Basin asset is now our largest producing core area, a milestone that took just a little over two years to achieve. Production from our horizontal Delaware Basin grew 37% over the previous quarter driven by our industry-leading well results in both the northern and southern Delaware Basin. We have also drilled some of the industry's best horizontal wells in our core Wolfberry position in the Midland Basin and will expand that activity through the rest of the year." A copy of the Form 10-Q is available for free at: http://is.gd/wggi0g About Concho Resources Inc. Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho?s website at www.concho.com. * * * As reported by the TCR on May 22, 2013, Moody's Investors Service upgraded Concho Resources Inc.'s Corporate Family Rating to Ba2 from Ba3. "The upgrade to Ba2 reflects Concho Resources' strong cash margins, relatively high proportion of oil in the production mix, and continued growth in production and reserves," said Arvinder Saluja, Moody's Assistant Vice President-Analyst. Concho Resources Inc. carries a BB+ corporate credit rating from Standard & Poor's. CONNAUGHT GROUP: Resolves WARN Class Action ------------------------------------------- Law360 reported that high-end fashion retailer Connaught Group Ltd. reached a deal with a class of former workers who claimed they were not given adequate notice under the Worker Adjustment and Retraining Notification Act that they would lose their jobs when the company went bankrupt last year. According to the report, the liquidating trustee for Connaught, which obtained court approval of its liquidation plan in October, has agreed to place $675,000 in a trust for the former employees to resolve the dispute. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. The Connaught Group disclosed $50,644,694 in assets and $61,303,340 in liabilities. Limited Editions for Her LLC disclosed $3,339,174 in assets and $15,888,714 in liabilities. Limited Editions for Her of Nevada LLC disclosed $979,926 in assets and $12,395,949 in liabilities. Limited Editions for Her of Branson LLC disclosed $3,339,174 in assets and $15,888,714 in liabilities. WDR Retail Corp. disclosed $0 in assets and $12,395,949 in liabilities. Connaught Group Limited was the 100% shareholder of each of LEFH Nevada, LEFH Branson, LEFH, and WDR. On Oct. 10, 2012, the Bankruptcy Court confirmed the Debtors' Chapter 11 plan, which would pay unsecured creditors as much as 64%. Unsecured claims were projected to total as much as $20 million. A joint venture between Royal Spirit Group and Tom James Co. acquired the Debtors' business in April for $20 million in cash and assumed the lease for the Debtors' Manhattan headquarters. Royal Spirit, a non-insider with the largest claim, waived a $5.4 million claim. Secured claims were paid when the sale was completed. COOPER-BOOTH: Seeks Extension to File Restructuring Plan -------------------------------------------------------- Marie Beaudette, writing for DBR Small Cap, reported that convenience-store supplier Cooper-Booth Wholesale Co. is seeking to keep exclusive control over its Chapter 11 case for another 120 days as it continues to negotiate the terms of a Chapter 11 restructuring plan with its creditors. 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 disclosed $58,216,784 in assets and $35,054,482 in liabilities as of the Chapter 11 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. CUMULUS MEDIA: Stock Issue No Impact on Moody's 'B2' CFR -------------------------------------------------------- Moody's said Cumulus Media Inc. recently announced plans to issue $77.2 million of new Series B preferred stock (initial 12% coupon) to refinance existing Series A preferred stock (14% coupon, scheduled to increase on September 16, 2013 to 17% plus the increase in 90-day LIBOR over the last 2 years). Although, the reduction in coupon will result in annual savings of roughly $3.8 million relative to the rate that would have gone into effect in September, there is no immediate impact to the B2 corporate family rating or stable outlook. Headquartered in Atlanta, GA, Cumulus Media Inc. is the largest pure-play radio broadcaster in the U.S. with approximately 520 stations (including under LMAs) in 108 markets and nationwide radio networks serving over 5,000 affiliates. Cumulus is publicly traded with Crestview Radio Investors, LLC owning an estimated 27.5% interest adjusted for the exercise of penny warrants. The Dickey family owns 8.2% with Canyon Capital Advisors LLC owning roughly 11% of common shares, and the remainder being widely held. Net revenues pro forma for acquisitions and divestitures totaled approximately $1.1 billion for LTM June 30, 2013. DC DEVELOPMENT: Stay Lifted to Set Off Club Escrow Account ---------------------------------------------------------- The Hon. Wendelin I. Lipp of the U.S. Bankruptcy Court for the District of Maryland approved a stipulation and consent order entered among D.C. Development, LLC, et al., and Branch Banking and Trust Company, providing that: 1. The automatic stay in effect is terminated in respect of a club escrow account so as to permit BB&T to exercise its setoff rights against the account, which will reduce the amount owed by the estate by $58,719, and to close the account. 2. To the extent new and valid claims are made by members for the return of their deposits, it will be BB&T's responsibility, and not the Debtor's or its co-debtors', to satisfy the claims up to the amount paid by the member and deposited into the account; if such occurs, the amount owed by the Debtor or its co-debtors will be increased by the amount refunded by BB&T. The Debtors related that prior to the commencement of the case, the Debtor opened and maintained an escrow account with BB&T, pursuant to the terms of a Deposit Agreement for Membership Deposits dated July 10, 2004, as modified by the Modification of Deposit Agreement for Membership Deposits dated Feb. 12, 2007. The Debtor deposited funds into the account paid by members of the "Clubs at Wisp" to assist in the funding of certain club recreational facilities at the Wisp Resort. About Wisp Resort et al. Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, operated a ski resort and real estate development companies located in Garrett County, Maryland generally known as Wisp Resort. The Wisp Resort comprises approximately 2,200 acres of master planned and fully entitled land, 32 ski trails covering 132 acres of skiable terrain with 12 lifts and two highly-rated golf courses. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011, after defaulting on nearly $30 million in loans from BB&T Corp. to build the golf course community. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged James A. Vidmar, Esq. at Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. SSG Capital Advisors, LLC, serves as exclusive investment banker to the Debtors. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. In December 2012, the Bankruptcy Court approved the sale of the Wisp resort to EPT Ski Properties, a unit of EPR Properties, for $23.5 million. The judge also approved the sale of a golf course and other land to National Land Partners for $6.1 million. In January 2013, Bankruptcy Judge Wendelin I. Lipp gave his stamp of approval on a stipulation and consent order modifying a previous ruling that allowed D.C. Development to sell a property in McHenry, Maryland, and disburse sales commission. MVB Bank and Logan/Frazee/Yudelevit are counterparties to the stipulation. DC Development sold the 181 Kendall Camp Circle property free and clear of liens, claims, encumbrances and interest, for $485,000. DELPHI CORP: Insurers Score Victory in Coverage Dispute ------------------------------------------------------- District Judge Paul A. Engelmayer for the Southern District of New York affirmed an order by Bankruptcy Judge Robert D. Drain in the Chapter 11 case of Delphi Corporation, now known as DPH Holdings Corp., granting summary judgment in favor of insurance carriers, ACE American Insurance Company and Pacific Employers Insurance Company, and against regulators the State of Michigan Workers' Compensation Insurance Agency and the State of Michigan Funds Administration, related to an insurance coverage dispute. The appeal, arising out of an adversary bankruptcy proceeding, involves the scope of workers' compensation coverage purchased from insurance carriers by Delphi. The dispute pits state regulators in Michigan, who argue for broad-ranging coverage, against the carriers, who argue that the coverage they agreed to provide was narrow. Because Michigan law provides that the state's workers' compensation fund will provide workers compensation to employees when an employer cannot do so, this litigation ultimately affects who is responsible for paying workers compensation benefits to various employees of the debtor, but it does not affect whether some entity has that responsibility. On October 16, 2012, after argument, Judge Drain issued a decision from the bench holding that, on the basis of their plain language, the insurance policies excluded all Delphi workplaces in Michigan from their coverage, and covered only Delphi subsidiaries in Michigan. A written order was issued Nov. 1, 2012. A copy of the District Court's Aug. 1 Opinion and Order is available at http://is.gd/Rj6nAjfrom Leagle.com. The case is STATE OF MICHIGAN WORKERS' COMPENSATION INSURANCE AGENCY and STATE OF MICHIGAN FUNDS ADMINISTRATION, Defendants- Appellants, v. ACE AMERICAN INSURANCE COMPANY and PACIFIC EMPLOYERS INSURANCE COMPANY, Plaintiffs-Appellees, No. 12 Civ. 9292 (PAE) (S.D.N.Y.). DPH Holdings Corp. is represented by Albert L. Hogan, III, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP (IL). The State of Michigan Workers' Compensation Insurance Agency and the State of Michigan Funds Administration are represented by Melanie L. Cyganowski, Esq., at Otterbourg, Steindler, Houston & Rosen. Ace American Insurance Company and Pacific Employers Insurance Company are represented by Anton Metlitsky, Esq., and Jonathan D. Hacker, Esq., at O'Melveny & Myers, LLP; and William C. Heuer, Esq., at Duane Morris, LLP. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DETROIT, MI: Manager Hopes for a Clean Balance Sheet in 14 Months ----------------------------------------------------------------- Reuters reports that Detroit's emergency manager voiced confidence on August 7 that the city could emerge from bankruptcy before his term expires in October 2014 and possibly without having to borrow more money. Even so, Kevyn Orr, the bankruptcy expert who was appointed in March to a post that gives him almost unlimited power over Detroit's finances, warned that the path back to financial health will not be painless for Detroit's creditors, Reuters relates. According to the report, Mr. Orr said if the city wins court approval to proceed with the Chapter 9 bankruptcy filing it made last month, virtually all of the city's creditors will have payments on their bonds reduced. "We may need a little bit of cash, or we may be able to stay cash- flow free-and-clear without borrowing anything for the purposes of the bankruptcy," Orr told Reuters in a wide-ranging interview. "The schedule we're on, we should be able to get this done in 14 months, so I don't anticipate a need for me to stay on," Reuters quotes Mr. Orr as saying. Reuters notes that Detroit's bankruptcy has marked a new low for a city formerly renowned as the cradle of the U.S. auto industry and central to America's role as the "arsenal of democracy" in World War Two. The city's population has fallen from its peak of 1.8 million people in 1950 to around 700,000 as manufacturing jobs moved elsewhere along with the white population. Financial mismanagement and political corruption have made things worse, the report adds. 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: Financial Woes Hurt Borrowing by Its Neighbors ----------------------------------------------------------- Mary Williams Walsh, writing for The New York Times' DealBook, reported that the Detroit Effect has rippled all the way to Wall Street. According to the report, two weeks after Detroit declared bankruptcy, cities, counties and other local governments in Michigan are getting a cold shoulder in the municipal bond market. The judgment has been swift and brutal, the report said. Borrowing costs are up around the state, in some cases drastically. Saginaw County became the latest casualty when it said it was delaying a $60 million bond sale, the report related. It had hoped to put the proceeds into its pension fund. It was the third postponed bond sale in Michigan since Detroit dropped its bombshell on July 18, the report said. The city of Battle Creek said it would postpone a $16 million deal scheduled for August because of concerns that investors would demand interest rates that were too high, the report added. Genesee County also withdrew a $54 million bond sale from the market for the same reason. Detroit's bankruptcy, the largest ever by a municipality, has raised fundamental concerns about the safety and security of municipal bonds, certainly in Michigan but potentially elsewhere in the country, too, according to the report. The municipal bond market appears to be sending Michigan's cities a message that no matter how well rated they are, they are going to have to postpone their plans and projects or pay more for them. 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: Grand Plans by Presidents Failed in Bankrupt City -------------------------------------------------------------- Michael A. Fletcher, writing for The New York Post, reported that during the Nixon years, Detroit's business elite laid plans for the glittering Renaissance Center retail and office complex. The Ford and Carter administrations brought the People Mover, an elevated rail loop around downtown that hardly anybody rides today. Other presidential administrations introduced enterprize zone tax breaks and empowerment zone development grants, the report related. President Obama promised to save the Motor City by saving the auto industry. But none of it worked, the report said. Rather than becoming a showplace for the transformational power of urban policy, Detroit is remarkable mostly as a burial ground for good intentions -- of both Democrats and Republicans. Last month, Detroit became the largest city in U.S. history to file for bankruptcy, sobering evidence that decades of government and private-sector intervention was no match for decades of residential and business flight that eroded the city's once ample tax base, the report noted. "It is as if the tide is going out and I take a fire hydrant and pump as much water on the beach as possible," Charles Ballard, a Michigan State University economist, told the newspaper. "No matter how long I pump, there is still going to be more sand showing." 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: Duggan, Napolean to Face Off in Mayoral Election ------------------------------------------------------------- Matthew Dolan, writing for Daily Bankruptcy Review, reported that a former hospital executive who staged a write-in campaign for mayor of Detroit appears to have won the most votes in a primary contest Tuesday, beating a well-known county sheriff who had the backing of labor unions, according to preliminary results. 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: RDPMA to Fight Precedent-Setting Pension Case ---------------------------------------------------------- A new organization has formed to fight for the pension and tax treatment of retired Detroit Police Department (DPD) personnel. Within 2 weeks, the Retired Detroit Police Members Association (RDPMA) has attracted nearly 300 members. The main concern with Detroit's Chapter 9 that put RDPMA's incorporation on the fast track is ensuring equal representation for all police department personnel. "Another organization representing DPD personnel and Detroit fire fighters retained the same counsel as the Detroit Retired City Employees Association. This is a conflict as unlike the retired City of Detroit general employees, the police department retirees do not have social security benefits as supplemental income and are not eligible for Medicare," says co-founder Brenda Goss Andrews, president of the new association. Ms. Andrews states, "While the imminent threat of Detroit's bankruptcy accelerated the formation of our group, there have been many events--nationally and locally-- that led to the forming of RDPMA. One example is the 2011 major rewriting of Michigan's tax code and the subsequent income tax on pension benefits of retirees under the age of 65." Strobl & Sharp attorney, Lynn Brimer, legal counsel for RDPMA, explains, "It is not unusual in bankruptcy proceedings for the members of a creditors committee to have separate and distinct interests. I believe it is critical for the police retirees to have RDPMA at the table. RDPMA is not affiliated with retirees in the general retirement system. If benefits are reduced through the Detroit Chapter 9, general retirees will still have a safety net in social security and Medicare." "Detroit is nationally significant because there is no precedent where the bankruptcy court has issued an opinion with respect to the authority of a municipality to reduce pension and retiree benefits for police and firefighters. Prior cases have reached negotiated settlements between the municipalities and the retirees," emphasizes Ms. Brimer. "If there is a judicial determination in Detroit, the door swings open for other municipalities to reduce retiree pensions as well," says Ms. Brimer. "While the goal is to negotiate a settlement, the general fear is that Detroit officials say the underfunding of the pension funds is so significant and therefore unsecured pensions constitute such a large portion of Detroit's debt that a settlement will not be possible," says Ms. Brimer. RDPMA plans to collaborate with all retiree groups and hopes that everyone can work together to craft the best resolution for all retirees and the City of Detroit. "We want to work side-by-side with the other organizations," says Ms. Andrews. "In good faith we put our lives on the line, made personal sacrifices and made financial decisions based on our constitutionally promised pension benefits. Our pensions should not be cut at all," declares Ms. Andrews. About RDPMA The nonprofit Retired Detroit Police Members Association (RDPMA) formed on July 23, 2013. The non-union group represents retired Detroit police department (DPD) personnel and the surviving spouses of deceased DPD personnel. The organization's sole mission is to advocate for the members of the RDPMA concerning the preservation, protection and enhancement of their pensions, health care, and other benefits, in the public square and in judicial proceedings, including any bankruptcy actions that may affect their rights to continue to receive their full benefits. For more information go to www.rdpma.org. 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: Retiree Associations Continue to Fight for Interests ----------------------------------------------------------------- Two associations representing retired Detroit city employees and retired Detroit police and fire fighters remain committed to advocating for retiree interests in Detroit's bankruptcy proceedings. The Retired Detroit Police and Fire Fighters Association (RDPFFA) and the Detroit Retired City Employees Association (DRCEA) have served the interests of thousands of Detroit retirees for decades and continue to do so during Detroit's bankruptcy proceedings, according to Brian O'Keefe, a founding partner of Lippitt O'Keefe. "The City of Detroit's Chapter 9 bankruptcy petition clearly represents a threat to the retirement benefits earned by thousands of retired city employees," notes Mr. O'Keefe. "These two associations are dedicated to representing those interests, as they have for decades." Background Information Both associations have been intricately involved in the pre- bankruptcy filing and bankruptcy proceedings relative to the City of Detroit and Emergency Financial Manager (EFM). Prior to the city's Chapter 9 filing, the associations attended, with counsel, multiple presentations by the EFM and his staff. Since the city's filing, the associations, through counsel, have filed appearances, filed a joint response to the city's Motion to Appoint a Retiree Committee and presented arguments at an August 2nd hearing. The associations are committed to representing retiree interests as they have since their inception. Lippitt O'Keefe, PLLC serves as general counsel for both associations and along with Silverman & Morris, P.L.L.C. represent the associations in connection with the bankruptcy case. RDPFFA -- The predecessor of the RDPFFA -- http://www.rdpffa.org -- was founded in 1946 and became known as the RDPFFA in 1970. Membership of the RDPFFA is approximately 6,500, which is approximately 80 percent of eligible retirees. The RDPFFA maintains a staffed office at 2525 E. 14 Mile Road in Sterling Heights, Mich., and is recognized as the representative association for all Detroit police and fire retirees (and their widows/widowers) nationwide. The RDPFFA utilizes the services of lobbyists in Lansing, has advanced the interests of its members through litigation, maintains a website -- http://www.RDPFFA.com -- holds monthly informational meetings and publishes a quarterly news magazine. The association has an elected board of directors and officers and is headed by President Don Taylor, a former police officer and union steward. A retiree representative and a member of the RDPFFA, also sit on the board of the Police and Fire Retirement System of the City of Detroit (DPFRS). DRCEA - The DRCEA -- http://www.drcea.org-- was founded in 1960 and over the past 53 years has played an active role in improving and protecting retiree pensions and benefits. The DRCEA maintains a watch on the city administration, mayor, city council and GRS board of trustees, continually monitoring actions that may affect pension or retirement benefits. In 1971, DRCEA's importance in city government was recognized when the mayor appointed a retiree to the board of trustees of the General Retirement System. In 1974, the Detroit City Charter required that the retiree representative on the General Retirement System board of trustees be elected by retirees. The association became the acknowledged organization representing civilian retiree interest in legislative and budget matters. Today, there are approximately 12,100 City of Detroit retirees of whom approximately 65 percent are dues-paying members of the DRCEA. In addition to those dues-paying members, it has always been available to assist all retirees with retirement-related issues, regardless of whether they are members of the DRCEA. The DRCEA is and has always been a volunteer-based association and all services provided by directors and officers are done in the spirit of services and not compensation. Shirley V. Lightsey, a former manager of the Detroit Water and Sewer Department, volunteers her time to serve as the elected president of the DRCEA. The DRCEA has an operational structure that includes a pension liaison, a political action committee and a medical benefit committee. The DRCEA keeps in contact with its membership and retiree constituency through mailings, newsletters, meetings, its website and other sponsored events. 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. DEWEY & LEBOEUF: Barclays Hit With Another Suit Over Capital Loans ------------------------------------------------------------------ Law360 reported that another former Dewey & LeBeouf LLP partner sued Barclays Bank PLC in New York federal court claiming he was ripped off by the loan program used to finance capital contributions at the now defunct firm. According to the report, Geoffrey H. Coll, a securities litigator now with Schiff Hardin LLP, alleges the U.K.-based bank has been hounding him for the last year to repay a $189,000 loan under the program that was never properly documented and is far beyond what he actually owed the firm for his capital contribution. The case is Coll v. Barclays Bank PLC, Case No. 1:13-cv-05523 (S.D.N.Y.), before Judge Thomas P. Griesa. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DEWEY & LEBOEUF: Trustee Sues BofA, Shook Hardy, MetLife -------------------------------------------------------- Law360 reported that the trustee overseeing the liquidation of Dewey & LeBoeuf LLP launched a dozen lawsuits against Bank of America Corp., Metropolitan Life Insurance Co. and a group of law firms, including Shook Hardy & Bacon LLP, seeking to recover what he says were fraudulent transfers. According to the report, trustee Alan M. Jacobs is demanding $3.9 million from BofA and between $19,000 and $500,000 from each of the other defendants, which include Allen & Overy LLP and Keightley & Ashner LLP. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DVORKIN HOLDINGS: Status Hearing Continued to November 18 --------------------------------------------------------- A continued Status hearing in the Chapter 11 case of Dvorkin Holdings, LLC?s bankruptcy case will be held on Nov. 18, 2013, at 10:30 a.m. About Dvorkin Holdings Dvorkin Holdings, LLC, a holding company that has interests in 40 non-debtor entities, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor disclosed $69,894,843 in assets and $9,296,750 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Archer Bay, P.A., in Lisle, Ill., serves as counsel to the Debtor. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. The Bankruptcy Court in October 2012 granted the request of Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois, to appoint Gus Paloian as the Chapter 11 Trustee. Seyfarth Shaw, LLP, represents the Chapter 11 Trustee as counsel. Carpenter Lipps & Leland LLP represents the Chapter 11 Trustee as conflicts counsel. EASTERN HILLS: Wins Interim Approval to Use Cash Collateral ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, in an interim order, authorized Eastern Hills Country Club's use of cash collateral in which secured creditors assert an interest, pending a final order authorizing the use of cash collateral. As reported in the Troubled Company Reporter on July 4, 2013, the Department of the Treasury, Internal Revenue Service, the State of Texas and VGM Financial Services, 1111 W. San Marnan, Waterloo, IA 50701, have filed security interests granting liens, under agreement or statute, on inventory, accounts receivable and proceeds. If the IRS liens are valid, the State and VGM will not have any rights in the cash collateral because the amount of cash collateral is less than the debt owed to the IRS. The Debtor would use the cash collateral to pay operating expenses. As adequate protection from any diminution in value of the lenders' collateral, the Debtor will grant the secured parties replacement liens in the property of the Debtor. The secured creditors' continuing replacement liens will have the same degree of validity, perfection and priority as the liens had on the Petition Date in the case. Richard W. Ward, Esq., represented the Debtor; Jay W. Hurst, Esq., represented the Texas Comptroller of Public Accounts; and Adam L. Flick, Esq., represented the Internal Revenue Service. About Eastern Hills Eastern Hills Country Club filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-33123) in Dallas on June 21, 2013. The Debtor estimated at least $10 million in assets and less than $1 million in liabilities. The petition was signed by David Harvey as president. Judge Stacey G. Jernigan presides over the case. Richard W. Ward, Esq., serves as the Debtor's counsel. According to Web site, http://www.easternhillscc.com,the Eastern Hills Country Club in Garland Texas, was established in 1954 and boasts a Ralph Plummer designed 18-hole golf course, 5,000 sq. foot putting green, practice facility, and driving range. The golf course has been home of the Texas Womens Open since 2011. EASTMAN KODAK: Ricoh Breached IP in Alliance Gone Awry, Judge Says ------------------------------------------------------------------ Law360 reported that a New York federal judge granted summary judgment for bankrupt Eastman Kodak Co. against Ricoh Co. Ltd. in their row over a "comprehensive alliance" gone awry, ruling that Ricoh owes additional royalty payments under a patent license agreement for printers. According to the report, U.S. District Judge Denise Cote agreed with Kodak's argument that Ricoh subsidiary Pentax Corp. had breached its patent licensing agreement with the photography equipment company. The two companies had agreed to collaborate on a joint project called ImageLink, the report said. The case is Eastman Kodak Company v. Ricoh Company, Ltd., Case No. 1:12-cv-03109 (S.D.N.Y.), before Judge Denise L. Cote. 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: Ohio Objects to Proposed Enviro Deal With NY ----------------------------------------------------------- Law360 reported that a bankruptcy settlement with New York regulators proposed by Eastman Kodak Co. would illegally protect company leaders from liability for environmental harm, the state of Ohio told a New York bankruptcy court. According to the report, Kodak proposed a settlement revised to say that the company is liable for the cost of environmental cleanups relating to an $8.5 million industrial complex it is selling, addressing the demands of the New York Department of Environmental Conservation. But the Ohio Environmental Protection Agency raised concerns over another Kodak facility, the report noted. 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: Inks Deal on Amended Environmental Settlement ------------------------------------------------------------ Jacqueline Palank, writing for Daily Bankruptcy Review, reported that Eastman Kodak Co. says a settlement in which it will put up millions of dollars to resolve environmental liabilities at its corporate headquarters is back on track after the federal government questioned the deal. 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. ECO BUILDING: Amends December 31 Quarter Form 10-Q -------------------------------------------------- Eco Building Products, Inc., has amended its quarterly report on Form 10-Q for the period ended Dec. 31, 2012. As restated, the Company reported a net loss of $3.97 million on $1.36 million of total revenue for the three months ended Dec. 31, 2012. The Company originally reported a net loss of $3.70 million on $1.36 million of total revenue for the period. The Company's amended balance sheet at Dec. 31, 2012, showed $3.31 million in total assets, $10.78 million in total liabilities and a $7.46 million total stockholders' deficit. The Company previously reported $5.03 million in total assets, $10.88 million in total liabilities and a $5.85 million total stockholders' deficit. A copy of the amended Form 10-Q is available for free at: http://is.gd/4pxcvn About Eco Building Vista, Calif.-based Eco Building Products is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against mold, rot, decay, termites and fire. Sam Kan & Company, in Alameda, Calif., expressed substantial doubt about Eco's ability to continue as a going concern following the fiscal 2012 financial results. The independent auditors noted that the Company has generated minimal operating revenues, losses from operations, significant cash used in operating activities and its viability is dependent upon its ability to obtain future financing and successful operations. For the nine months ended March 31, 2013, the Company incurred a net loss of $9.03 million on $4.14 million of total revenue, as compared with a net loss of $3.68 million on $2.08 million of total revenue for the nine months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $3.19 million in total assets, $11.85 million in total liabilities and a $8.66 million total stockholders' deficit. ECOTALITY INC: Mulls Bankruptcy Filing; Hires FTI Consulting ------------------------------------------------------------ Reuters reports that Ecotality Inc, a maker of chargers for electric cars, said it may need to file for bankruptcy after failing to increase sales. According to Reuters, Ecotality, which operates under three businesses -- Blink, Minit-Charger and eTec Labs -- said it was exploring options for a restructuring, including a sale, and had retained FTI Consulting as an adviser. Reuters notes that if Ecotality files for bankruptcy, it will join a long list of U.S. alternative-energy companies that have fallen by the wayside. The report recounts U.S. green car startup Coda Holdings Inc filed for Chapter 11 bankruptcy protection in May after selling just 100 of its all-electric sedans. ELBIT VISION: Amends 2012 Annual Report --------------------------------------- Elbit Vision Systems Ltd. has amended its annual report on Form 20-F for the year ended Dec. 31, 2012, initially filed with the U.S. Securities and Exchange Commission on April 29, 2013, to revise the report of the independent registered public accounting firm which was erroneously filed undated. The Report is amended by way of inclusion of the appropriate date. No other changes to the Report are being made. A copy of the amended Form 10-K is available for free at http://is.gd/B9e1qu About Elbit Vision Based in Caesarea, Israel, Elbit Vision Systems Ltd. (OTC BB: EVSNF.OB) offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. The Company reported income of US$824,000 in 2012, as compared with income of US$1.08 million in 2011. As of March 31, 2013, the Company had $3.58 million in total assets, US$3.92 million in total liabilities and a US$332,000 shareholders' deficiency. ENERGY SERVICES: Obtains $3 Million From Units Sale --------------------------------------------------- Energy Services of America Corp. issued 121 units, (with each unit consisting of one share of 6.0 percent Convertible Cumulative Perpetual Preferred Stock, Series A and 2,500 shares of common stock) to certain directors, executive officers and accredited investors for an aggregate purchase price of $3 million and net proceeds of approximately $3 million. In addition, on Aug. 6, 2013, the Company issued 56 shares of Series A Preferred Stock to Marshall T. Reynolds, the Chairman of the Board of Directors of the Company, in exchange for Mr. Reynolds agreement to cancel and forgive the Company's obligation under a promissory note held by Mr. Reynolds in the aggregate amount of $1,409,383. Mr. Reynolds did not receive any shares of common stock in connection with the exchange of the promissory note. The Company filed a Certificate of Designations on August 6 with the Secretary of State of the State of Delaware. The Certificate of Designations authorizes the issuance of 240 shares of 6.0 percent Convertible Cumulative Perpetual Preferred Stock, Series A. The Series A Preferred Stock has a liquidation preference of $25,000 per share of Series A Preferred Stock, plus an amount equal to any accrued but unpaid dividends, whether or not declared, thereon to and including the date of that liquidation. The Series A Preferred Stock will accrue cumulative dividends equal to 6.0 percent per year, which dividend is required to be paid prior to any dividends on the common stock. The Company may redeem the Series A Preferred Stock at a redemption price of $25,000 per share plus accrued and unpaid dividends, whether or not declared, thereon to and including the date of redemption. All redemptions must be on a pro rata basis. A copy of the Form 8-K is available for free at: http://is.gd/z5iTdb About Energy Services Huntington, West Virginia-based Energy Services of America Corporation provides contracting services to America's energy providers, primarily the gas and electricity providers. The Company reported a net loss of $48.5 million on $157.7 million of revenue in fiscal 2012, compared with a net loss of $5.3 million on $143.4 million of revenue in fiscal 2011. The Company's balance sheet at March 31, 2013, showed $50.19 million in total assets, $45.69 million in total liabilities and $4.50 million in total stockholders' equity. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Energy Services' ability to continue as a going concern following the annual report for the year ended Sept. 30 ,2012. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a forbearance arrangement with its lenders as a result of continued noncompliance with certain debt covenants. ENESCO GROUP: Count VI of Ch.7 Trustee's Suit v. Gov't Dismissed ---------------------------------------------------------------- Bankruptcy Judge A. Benjamin Goldgar granted the motion of the United States of America to dismiss Count VI of the amended adversary complaint of David R. Brown, chapter 7 trustee of Enesco Group, Inc. Count VI is dismissed for lack of subject matter jurisdiction. Mr. Brown has leave to file a supplemental amended complaint. The Internal Revenue Service and the IRS Commissioner are dismissed as parties. In Count VI, Brown asks the court to determine under section 505(a)(1) of the Bankruptcy Code, 11 U.S.C. Sec. 505(a)(1), that the estate is entitled to a refund of wrongfully imposed federal tax penalties. The United States moves to dismiss Count VI for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), Fed. R. Civ. P. 12(b)(1) (made applicable by Fed. R. Bankr. P. 7012(b)). Alternatively, the United States requests judgment on the pleadings on Count VI pursuant to Rule 12(c), Fed. R. Civ. P. 12(c) (made applicable by Fed. R. Bankr. P. 7012(b)). According to Judge Goldgar, at first blush, subject matter jurisdiction would seem to be secure. Because Mr. Brown wants to recover tax penalties for the benefit of Enesco's creditors, the claim is "related to" the Enesco bankruptcy case. 28 U.S.C. Sec. 1334(b) (granting subject matter jurisdiction over proceedings "related to cases under title 11"). But Section 505(a)(2)(B) of the Code limits the jurisdiction otherwise granted to bankruptcy courts in Section 1334(b), declaring that a bankruptcy court may not determine the estate's right to a tax refund unless certain prerequisites are met. 11 U.S.C. Sec. 505(a)(2)(B). As the United States correctly contends, Mr. Brown has failed to allege that he has met those prerequisites. The case is, ENESCO GROUP, INC., et al., Plaintiff, v. LEONARD A. CAMPANARO, et al., Defendants, Nos. 07 B 565, 11 A 402 (Bankr. N.D. Ill.). A copy of the Court's Aug. 8, 2013 Memorandum Opinion is available at http://is.gd/JoDOwMfrom Leagle.com. About Enesco Group Based in Itasca, Illinois, Enesco Group, Inc. -- http://www.enesco.com/-- was a producer of giftware, and home and garden decor products. Enesco's product lines included some of the world's most recognizable brands, including Disney, Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane, Border Fine Arts, among others. Enesco distributed products to a wide array of specialty gift retailers, home decor boutiques and direct mail retailers, as well as mass-market chains. The company served markets operating in Europe, particularly in the United Kingdom and France, as well in the Asia Pacific in Australia and Hong Kong. The company also has Latin-American operations in Mexico. Enesco Group and its two affiliates, Enesco International Ltd. and Gregg Manufacturing, Inc., filed for chapter 11 protection on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565). Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors. Epiq Bankruptcy Solutions, LLC, served as the Debtors' claims and noticing agent. Brad Berish, Esq., at Adelman & Gettleman, Ltd., and Nancy A. Peterman, Esq., at Greenberg Traurig LLP, represented the Official Committee of Unsecured Creditors as bankruptcy counsel. In its schedules, Enesco disclosed total assets of $61,879,068 and total debts of $231,510,180. In August 2008, Judge Goldgar converted the chapter 11 case of Enesco Group and its affiliates to a chapter 7 liquidation proceeding at the behest of the U.S. Trustee for Region 11. David R. Brown was named the chapter 7 trustee to oversee the Debtors' liquidation. EVERGREEN OIL: Gets OK to Use Cash Collateral Until Sept. 6 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation authorizing Evergreen Oil, Inc., et al., to: a) enter into amendment number one to the DIP loan agreement with prepetition secured creditor, Guggenheim Private Debt Fund Note Issuer, LLC; and b) use cash collateral until Sept. 6, 2013, unless terminated earlier pursuant to the terms of the DIP Loan Agreement and the DIP order. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. David L. Neale, Esq. at Levene, Neale, Bender, Yoo & Brill L.L.P. represents the Debtors as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. Evergreen Oil Inc., disclosed $83,739,748 in assets and $89,302,759 in liabilities as of the Chapter 11 filing. The Debtors has filed a bankruptcy-exit plan that entails distributing sale proceeds and other assets in the order of priority called for in bankruptcy law. The secured lender with first call on proceeds is Guggenheim Corporate Funding LLC, as agent, owed $66.2 million. Unsecured creditors have no guaranteed recovery. The papers say they will receive what's left, if anything, after creditors with higher priority are paid, including Guggenheim. The Official Committee of Unsecured Creditors tapped Mirman Bubman & Nahmias LLC as general bankruptcy counsel. EVERGREEN OIL: Timec Co. Balks as Confirmation of 3rd Amended Plan ------------------------------------------------------------------ Secured creditor and mechanics lienholder Timec Co. Inc., asks the Bankruptcy Court to deny confirmation of the Third Amended Joint Plan of Reorganization dated July 29, 2013, filed by Evergreen Oil, Inc. and Evergreen Environmental Holdings, Inc. TIMEC explains that the Debtors have not proposed the Plan in good faith. The Debtors are proposing a Plan which chooses to ignore TIMEC's lien. The Debtors are fully aware that if the Plan, as proposed, is confirmed it will effectively and completely prevent TIMEC from recovering on its mechanics lien, even if it is later determined to be valid and superior to a portion of the Prepetition Secured Lenders' stipulated $66,000,000 claim. Additionally, TIMEC contends the Plan attempts to infringe on TIMEC's state law rights by failing to set aside sufficient funds to pay TIMEC the full amount of its mechanics lien claim if the claim becomes allowed, and if TIMEC's seniority over a portion of the Prepetition Secured Lenders' stipulated, first priority claim is proven. Robert J. Stemler, Esq. -- robert.stemler@kyl.com -- represents the TIMEC Co. Inc. The Plan The Debtors proposed the Third Amended Plan for the resolution of outstanding claims against and interests in the Debtors. The Plan will establish a reserve or reserves to ensure payment of any claims in accordance with the terms of the Plan that arose in whole or in part prior to the Effective Date but that are allowed and payable after the Effective Date. The Debtors will establish the creditor fund which will consist of the cash necessary to make payments required to be made on the Effective Date, and will be obtained from the proceeds and the cash recovered by the estates with respect to retained claims, but excluding proceeds related to insurance claim and avoidance actions. Copies of the Plan are available for free at http://bankrupt.com/misc/EVERGREEN_OIL_plan3.pdf http://bankrupt.com/misc/EVERGREENOIL_plan.pdf An Aug. 14 confirmation hearing at 10 a.m. has been set. In a separate filing, the Court entered an order extending until Aug. 5, the voting deadline and to limit notice with respect to the Third Amended Plan. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. David L. Neale, Esq. at Levene, Neale, Bender, Yoo & Brill L.L.P. represents the Debtors as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. Evergreen Oil Inc., disclosed $83,739,748 in assets and $89,302,759 in liabilities as of the Chapter 11 filing. The Debtors have filed a bankruptcy-exit plan that entails distributing sale proceeds and other assets in the order of priority called for in bankruptcy law. The secured lender with first call on proceeds is Guggenheim Corporate Funding LLC, as agent, owed $66.2 million. Unsecured creditors have no guaranteed recovery. The papers say they will receive what's left, if anything, after creditors with higher priority are paid, including Guggenheim. The Official Committee of Unsecured Creditors tapped Mirman Bubman & Nahmias LLC as general bankruptcy counsel. EVERGREEN OIL: Has Until Oct. 5 to Decide on Unexpired Leases ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended until Oct. 5, 2013, the deadline for Evergreen Oil, Inc. and Evergreen Environmental Holdings, Inc., to assume unexpired non-residential real property leases. The Debtors, in their motion, stated that they had a Second Amended Joint Plan of Reorganization dated July 11, 2013, which proposes, among other things, to sell the Evergreen Stock, free and clear of all claims, liens and encumbrances, to Safety-Kleen Systems, Inc. or a qualified overbidder to effectuate a sale of EOI's business as a going concern, and to use the proceeds of such sale to repay EOI's creditors. The Second Amended Disclosure Statement was approved by the Court at a hearing held on July 11. An Aug. 14, confirmation hearing has been set. The Debtors anticipate that the leases will ultimately be assumed and assigned to the purchaser of the Evergreen Stock through the Plan. On July 22, the Court approved the stipulation extending the deadline by which EOI is required to assume unexpired non- residential real property leases, as deadline may relate to the premises located at 2415 Campus Drive, Suite 225, Irvine, California. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. David L. Neale, Esq. at Levene, Neale, Bender, Yoo & Brill L.L.P. represents the Debtors as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. Evergreen Oil Inc., disclosed $83,739,748 in assets and $89,302,759 in liabilities as of the Chapter 11 filing. The Debtors have filed a bankruptcy-exit plan that entails distributing sale proceeds and other assets in the order of priority called for in bankruptcy law. The secured lender with first call on proceeds is Guggenheim Corporate Funding LLC, as agent, owed $66.2 million. Unsecured creditors have no guaranteed recovery. The papers say they will receive what's left, if anything, after creditors with higher priority are paid, including Guggenheim. The Official Committee of Unsecured Creditors tapped Mirman Bubman & Nahmias LLC as general bankruptcy counsel. EVERGREEN OIL: Rochester Wong Approved as Employment Counsel ------------------------------------------------------------ The Bankruptcy Court authorized Evergreen Oil, Inc., and Evergreen Environmental Holdings, Inc. to employ Rochester, Wong & Shepard, A Professional Corporation, as special labor and employment counsel. As reported in the Troubled Company Reporter on July 16, 2013, since 1999, RWS has represented EOI in connection with its labor and employment issues and disputes. EOI seeks to employ RWS as its special labor and employment counsel so that RWS may continue to represent EOI: a. in connection with its labor and employment issues and disputes; b. in labor and employment matters which may arise or become an issue in connection with the sale transaction contemplated by the Plan; and c. in any other labor and employment matters which may arise during the pendency of EOI's Chapter 11 case and for which EOI may request RWS's assistance. William R. Shepard, Esq., will be the attorney at RWS primarily responsible for the representation of EOI. Mr. Shepard's hourly billing rate is normally $345; however, RWS has agreed that Mr. Shepard's hourly rate will be $305 in connection with RWS's representation of EOI in the case. Mr. Shepard assures the Court that RWS is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. David L. Neale, Esq. at Levene, Neale, Bender, Yoo & Brill L.L.P. represents the Debtors as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. Evergreen Oil Inc., disclosed $83,739,748 in assets and $89,302,759 in liabilities as of the Chapter 11 filing. The Debtors have filed a bankruptcy-exit plan that entails distributing sale proceeds and other assets in the order of priority called for in bankruptcy law. The secured lender with first call on proceeds is Guggenheim Corporate Funding LLC, as agent, owed $66.2 million. Unsecured creditors have no guaranteed recovery. The papers say they will receive what's left, if anything, after creditors with higher priority are paid, including Guggenheim. The Official Committee of Unsecured Creditors tapped Mirman Bubman & Nahmias LLC as general bankruptcy counsel. EXCEL MARITIME: Christiana Trust Named Member of Creditors' Panel ----------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, replaced Deutsche Bank Trust Company Americas with Chistiana Trust as member of the official committee of unsecured creditors in the Chapter 11 cases of Excel Maritime Carriers LTD., et al. The Committee members are: 1. Zazove Associates, LLC 235 Montgomery Street, Suite 440 San Francisco, California 94104 Attn: Nicholas Brown, CFA Telephone: (847) 239-7100 2. Christiana Trust, A Divistion of Wilmington Savings Fund Society, FSB 500 Delaware Avenue, 11th Floor Wilmington, Delaware 19899 Attn: Patrick J. Healy, Director of Global Bankruptcy & Restructuring Services Telephone: (302) 888-7420 3. Fidelity Investments 82 Devonshire Street, V13H Boston, Massachusetts 02109 Attn: Nate Van Duzer, Managing Director Telephone: (617) 392-8129 4. Silverback Asset Management, LLC 1414 Raleigh Road, Suite 250 Chapel Hill, North Carolina 27517 Attn: Jason Ham, Analyst Telephone: (919) 969-9300 5. Kayne Anderson Capital Advisors, L.P. 1800 Avenue of the Stars Los Angeles, California 90403 Attn: Eri Nosaka, Research Analyst Telephone: (310) 284-6461 About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-bk- 23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. EXCEL MARITIME: Creditors' Panel Wants End of Exclusivity Period ---------------------------------------------------------------- The Official Committee of Unsecured Creditors asks the U.S. Bankruptcy Court for the Southern District of New York to end the exclusivity period granted to Excel Maritime Carriers LTD., et al., to allow other interested parties to propose their reorganization plans for the Debtors. The Creditors' Committee complains that the Debtors' prepackaged plan only benefits the secured lenders and controlling shareholders. The prepackaged plan would give ownership of the company to secured lenders owed $771 million, although the lenders will allow current owner Gabriel Panayotides to maintain control least initially and buy the company back later. The Committee is opposed to the aspect of the plan where the current owner can retain an interest while unsecured creditors receive "nominal to no distribution." As previously reported by The Troubled Company Reporter, the Committee has hinted that a group of holders of convertible notes will be submitting a competing plan to reorganize the Debtors. The Committee said in court papers that "certain" holders of convertible notes are working on a competing plan to "infuse capital" including no commitment for a "specific management team." The creditors said the competing plan will "comply with applicable bankruptcy law," in contrast to the company plan they find defective. The Creditors' Committee proposes to retain as bankruptcy counsel Michael S. Stamer, Esq. -- mstamer@akingump.com -- Sean E. O'Donnell, Esq. -- sodonnell@akingump.com -- and Sunish Gulati, Esq. -- sgulati@akingump.com -- at AKIN GUMP STRAUSS HAUER & FELD LLP, in New York; and Sarah Link Schultz, Esq. -- sschultz@akingump.com -- at AKIN GUMP STRAUSS HAUER & FELD LLP, in Dallas, Texas. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-bk- 23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. EXCEL MARITIME: Sells 2 Vessels for $43.2MM to Credit Suisse ------------------------------------------------------------ Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of Excel Maritime Carrier LTD., et al.'s two vessels, the M/V Mairouli and the M/V July M, for $43.2 million to Credit Suisse, as the stalking horse bidder.. The Stalking Horse Bidder credit bid approximately $43.2 million, comprising all of the Debtors' indebtedness to it. As previously reported by The Troubled Company Reporter, prior to commencement of the Chapter 11 cases, the Debtors began negotiating with Credit Suisse to restructure and settle the obligations under the Odell/Minta Facility, including possibly via an agreed foreclosure proceeding or the Debtors' formal abandonment of the vessels to Credit Suisse, pursuant to Section 554 of the Bankruptcy Code. The Debtors and Credit Suisse ultimately reached an agreement whereby the Company will sell 100% of its stock ownership of Odell and Minta, pursuant to a sale under section 363 of the Bankruptcy Code. In short, Credit Suisse has agreed to credit bid, pursuant to Section 363(k) of the Bankruptcy Code, up to the maximum amount of its secured claim against the vessels securing the Odell/Minta Facility. The transaction will be effectuated by a transfer by Excel Maritime Carriers of the shares in Odell and Minta, with Credit Suisse directing the stock to Blueberry Shipping. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-bk- 23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. EXCO RESOURCES: Moody's Rates $300MM Sr. Secured Term Loan 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to EXCO Resources, Inc's $300 million senior secured term loan, and affirmed its B1 Corporate Family Rating and B3 senior unsecured notes rating. The outlook is stable. "While XCO's July acquisition of producing and undeveloped oil and gas properties in the Haynesville and Eagle Ford shale formations is a leveraging transaction, we are of the view that XCO's leverage metrics will accommodate the increased debt levels the transaction represents within the parameters of its B1 CFR," commented Andrew Brooks, Moody's Vice President. "The acquired producing assets will augment existing cash flow, which is in decline, and Eagle Ford adds modest oil exposure, contributing an element of diversity to an asset base that has struggled to generate economic returns given the company's near total exposure to natural gas." Ratings assigned: Senior secured term loan, rated Ba3 LGD3, 35 % Ratings affirmed: Probability of Default Rating, Affirmed B1-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Corporate Family Rating, Affirmed B1 Senior Unsecured Regular Bond/Debenture Sep 15, 2018, Affirmed B3 LGD5, 88 % from a range of LGD5, 83 % Ratings Rationale: The Ba3 rating on the proposed $300 million senior secured term loan reflects its position in the capital structure, parri pasu with over $1.6 billion of other secured debt and senior to $750 million of unsecured notes. In addition to the proposed term loan, XCO has a $1.6 billion secured borrowing base revolving credit (which includes the $300 million term loan sub-limit) and a $400 million one-year acquisition bridge facility. In July, XCO closed on an approximate $1.0 billion acquisition of producing and undeveloped properties in the Eagle Ford and core Haynesville shale formations from Chesapeake Energy Corporation (CHK, Ba2 stable). Approximately $680 million of the purchase price was allocated to the Eagle Ford, whose May 2013 production averaged a net 6,100 barrels of oil equivalent (Boe) per day, with the balance of the purchase price allocated to the Haynesville, whose net production was averaging 114 mmcfe per day. An amended and expanded $1.6 billion secured borrowing base revolving credit facility ($474 million was outstanding at June 30) together with the proposed term loan and $400 million acquisition bridge comprise the acquisition financing package. Moody's expects the acquisition bridge to be repaid with the net proceeds of the probable sale of XCO's 50% owned Haynesville gathering system -- TGGT Holdings, LLC, and the $131 million contribution from Kohlberg Kravis Roberts & Co, L.P. (KKR) for a 50% stake in certain of the Eagle Ford undeveloped acreage. XCO has also entered into a joint venture agreement with KKR providing for the financing of the development of this undeveloped acreage, which will likely require XCO to incur additional ongoing indebtedness in order to acquire from KKR the production developed under the terms of this agreement. Moody's is concerned that the KKR repurchase arrangement could pressure the company's liquidity. XCO has reduced outstanding debt by 28% to $1.3 billion at June 30 from year-end 2012 levels, largely through the sale proceeds derived from its February 2013 partnership formed with Harbinger Group Inc. (HRG, B2 stable) into which it contributed conventional, non-shale assets whose production approximated 100 mmcfe per day. Pro forma for the HRG partnership (in which XCO holds a 24.5% limited partner interest and 50% of the general partner), debt on production on a second quarter run-rate basis equated to approximately $19,400 per Boe of average daily production. As a result of the acquisition's debt financing, exacerbated by continuing production declines in the Haynesville, Moody's expects XCO's relative debt leverage to again increase, rising to a level exceeding $25,000 on production. This is a level Moody's has previously cited as one which could prompt a possible negative rating action. However, to the extent that the Eagle Ford acquisition will likely add higher margin oil production, cash flow and margins should exhibit some modest improvement. Moreover, Moody's believes that debt leverage will likely not be sustained at this higher level presuming the acquisition begins to yield its expected production increases, and further presuming XCO maintains ongoing spending discipline. In Moody's view, XCO's B1 CFR will accommodate the increased leverage this acquisition represents without detracting from that rating. The rating outlook is stable reflecting the actions XCO has undertaken to align its spending with lower cash flow, and based on presumed stability in its outstanding debt levels. A ratings downgrade could be considered if liquidity falls below $200 million. Moody's is concerned that the KKR Eagle Ford production repurchase arrangement could strain the company's liquidity. Additionally, a downgrade could occur if leverage approaches and is sustained above $14 of debt per Boe of proved developed reserves, or $25,000 per Boe of average daily production. This would be likely should the company undertake a sizable debt- financed acquisition. A rating upgrade in the near term is unlikely. However, should XCO restore a growth trajectory to its reserves and production while reducing debt leverage to $8 per Boe of proved developed reserves and $15,000 per Boe of average daily production, and increase its cash margins sufficient to sustain a 1.5x leveraged full-cycle ratio, an upgrade could be considered. EXCO Resources, Inc. is an independent exploration and production company headquartered in Dallas, Texas. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. EXIDE TECHNOLOGIES: Sec. 341 Meeting Continued to Aug. 14 --------------------------------------------------------- The U.S. Trustee for Region 3 continued until Aug. 14, 2013, at 3 p.m., the meeting of creditors pursuant to 11 U.S.C. Sec. 341 in the case of Exide Technologies. The meeting will be held at Room 5209, 844 King Street, Room 2112, in Wilmington, Delaware. 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. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. EXIDE TECHNOLOGIES: Lowenstein Sandler Okayed as Committee Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Exide Technologies to retain Lowenstein Sandler LLP as its counsel. As reported in the Troubled Company Reporter on July 25, 2013, 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. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. EXIDE TECHNOLOGIES: Panel Can Hire Morris Nichols as Co-Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Exide Technologies to retain Morris, Nichols, Arsht & Tunnel LLP as its co-counsel. As reported in the Troubled Company Reporter on July 25, 2013, 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. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. EXIDE TECHNOLOGIES: Panel Can Hire Zolfo Cooper as Fin'l Advisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Exide Technologies to retain Zolfo Cooper LLC as its bankruptcy consultants and financial advisors. As reported in the Troubled Company Reporter on July 25, 2013, 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. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. EXPLO SYSTEMS: Explosives Company Files Chapter 11 in Louisiana --------------------------------------------------------------- Explo Systems, Inc., filed for bankruptcy on Aug. 12 in U.S. District Court in Shreveport, Louisiana. Vickie Welborn, writing for Shreveport Times, reports that the bankruptcy filing was made late afternoon on Monday -- hours before company officials were to appear in Webster Parish Court to answer an eviction notice from the Louisiana Army National Guard. That hearing Friday morning will be canceled because the future of the explosives company now falls in the hands of the federal bankruptcy court. The report relates LANG in June filed suit against Explo seeking to have it removed from the property because of nonpayment of more than $1.4 million in delinquent rent and expenses related to an October explosion that rocked the surrounding area and sent some Doyline residents away from their homes for more than a week. The report also notes that last week, the Bureau of Alcohol, Tobacco, Firearms and Explosives revoked Explo's permit to handle explosives. The ATF stated in its notice dated Aug. 5 that Explo violated the federal Safe Explosives Act. The report also recounts that on June 10, six company officials were indicted on charges related to the improper storage of explosives materials on its site at Camp Minden. The document further states Explo violated the law and regulations on Nov. 27 by failing to store the material as required. In its petition, the Company said it owes its top 20 creditors almost $3 million. FIBERTOWER CORPORATION: Seeks Further Extension of Exclusivity -------------------------------------------------------------- Fibertower Network Services Corp., et al., ask the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to further extend their exclusive period to file a Chapter 11 plan until Oct. 28, 2013, and exclusive period to solicit acceptances of that plan until Dec. 26. According to Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York, the Debtors require the additional time because, although the Debtors anticipate filing a Chapter 11 plan in advance of the proposed deadlines, the Debtors need the additional time to negotiate and finalize the terms of any plan with their first lien secured creditor constituency -- i.e., the 2016 Noteholders. The Debtors have also filed a Bridge Order Motion asking the Court to extend their Exclusivity Periods until the time that the Court rules on the merits of the Exclusivity Motion. Jonathan I. Levine, Esq., at ANDREWS KURTH LLP, in New York; and Michelle V. Larson, Esq., at ANDREWS KURTH LLP, Dallas, Texas, also represent the Debtors. About FiberTower Corporation FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. In May 2013, FiberTower sought and obtained Court authority to sell their telecommunications equipment and employ American Communications, LLC, as telecommunications equipment reseller. According to the Debtors, the telecommunications equipment, which was a part of their backhaul business, is no longer necessary in the conduct of their business. They, however, believe that the equipment may have resale value that would benefit their estates. In February 2013, FiberTower filed with the Court a motion to sell assets that are primarily utilized by the Debtors to provide wireless backhaul services in the State of Ohio to Cellco Partnership (dba Verizon Wireless) free and clear for $1.5 million. Verizon Wireless will also pay the pre-closing, monthly operating costs incurred by the Debtors in connection with operating the business in an amount not to exceed $258,000 per month and a monthly fee of $20,000 for certain transition services relating to the assets following the closing. FIELD FAMILY: Hearing on Disclosure Statement Continued to Aug. 14 ------------------------------------------------------------------ The hearing to consider the approval of the explanatory statement for Field Family Associates, LLC?s Chapter 11 Plan of Reorganization has been continued to Aug. 14, 2013, at 1:30 p.m. As reported in the TCR on July 10, 2013, he Plan, which was filed on June 27, 2013, contemplates the reorganization of the Debtor and the satisfaction of all outstanding Claims against the Debtor over time. The Plan will be funded from cash on hand, cash from future operations, and a loan in the approximate amount of $2 million from LaGuardia Express LLC, an affiliate of the Debtor. All Claims will be satisfied by cash payments or the issuance of cash flow notes to be issued by the Debtor. Existing LLC interests in the Debtor will be preserved in the Reorganized Debtor. Pursuant to the Plan: -- Holders of priority tax claims estimated at $452,069 (Class 1), secured tax claims estimated at $111,796 (Class 2), and general unsecured claims estimated at $809,253 (Class 5) will receive the same treatment. They will receive amortized quarterly payments equal to their allowed claims over a four-year period with interest at the rate of 1% per annum, with the firm payment made on the Effective Date. -- Wells Fargo, as trustee (Class 3), which has an estimated claim of $31,328,991 (claim of $39,501,576 less $8,172,584 defeasance fee of $8,172,587), will receive a: (i) a restructuring fee of 0.5 percent of the principal amount of $30,930,650, (ii) interest-only payments from the Effective Date to the date which is 18 months after the Effective Date, which will accrue at a fixed rate of 5.5% per annum, (iii) at the option of the Debtor, full by payment in cash on the Effective Date of (i) principal in the amount of $30,930,650; (ii) accrued and unpaid interest owed on the Note at the default rate provided in the Note through the Effective Date; and (iii) any amounts for late fees, attorney's fees, and other reasonable fees. The Debtor believes that the Plan will be acceptable to Wells Fargo. -- Holders of "affiliate unsecured claims" (Class 6) will receive, on the Effective Date, a cash flow note which will accrue interest at 1% per annum but provide for no payments from the Debtor until the repayment in full of all amounts due to all of the Debtor's other creditors holding claims on the Effective Date. -- Holders of interests (Class 7) are unimpaired. A copy of the disclosure statement is available at: http://bankrupt.com/misc/fieldfamily.doc229.pdf The disclosure statement was submitted by Lawrence G. McMichael, Esq., Peter C. Hughes, Esq., and Catherine Pappas, Esq., at Dilworth Paxson LLP, counsel for the Debtor. About Field Family Five creditors filed an involuntary Chapter 11 bankruptcy petition against King of Prussia, Pa.-based Field Family Associates, LLC (Bankr. E.D. Pa. Case No. 12-16331) on July 2, 2012. On Sept. 6, 2012, a sixth creditor filed a Joinder in the involuntary Chapter 11 Petition. The Court entered an order for relief on Sept. 12, 2012. The Debtor owns and operates a 216-room hotel located at 144-10 135th Steet, in Jamaica, New York. Judge Stephen Raslavich presides over the case. Catherine G. Pappas, Esq., Lawrence G. McMichael, Esq., and Peter C. Hughes, Esq., at Dilworth Paxson LLP, in Philadelphia, Pa., represent the Alleged Debtor as counsel. Ashely M. Chan, Esq., at Hangley Aronchick Segal & Pudlin, in Philadelphia, Pa., represents the petitioning creditors as counsel. The U.S. Trustee appointed a three-member creditors committee. Hangley Aronchick Segal Pudline & Schiller represents the Committee. FREDDIE MAC: Posts $5 Billion Profit in Q2 Ended June ----------------------------------------------------- The Associated Press reports that Freddie Mac earned $5 billion from April through June, the seventh straight profitable quarter for the mortgage investor. The news agency say the second-quarter gain reported on August 7 compares with net income of $3 billion in the same period last year. Freddie said its earnings were largely because of increased profits from investments made to hedge against rising interest rates. That helped offset losses on mortgages during the quarter, according to AP. AP says Freddie, based in McLean, Va., will pay a dividend of $4.4 billion to the United States Treasury next month and is requesting no additional aid. AP notes that the government rescued Freddie and its larger sibling, Fannie Mae, during the financial crisis in 2008. Together, they received loans of about $187 billion. A housing recovery that began last year has made both profitable again. Combined, they have paid back roughly $136 billion of their government loans. Those payments are helping to make this year's federal budget deficit the smallest since President Obama took office. Once the second-quarter dividend is paid, Freddie will have repaid $41.4 billion of the roughly $71.3 billion it received from taxpayers, AP reports. About Freddie Mac Based in McLean, Virginia, the Federal Home Loan Mortgage Corporation, known as Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and the Federal Housing Finance Agency acting as conservator to continue operating its business. GB HERNDON: Court Disallows Portion of Polsinelli Fee Request ------------------------------------------------------------- Polsinelli Shughart PC, special counsel to GB Herndon and Associates, Inc., when the case was still in Chapter 11, will take home $164,055.28 in fees and $6,987.19 in expenses, for a total of $171,042.47. Bankruptcy Judge S. Martin Teel, Jr., rejected more than half of the amount Polsinelli originally requested. The firm sought an award of $345,785.83 in fees and reimbursement of $9,175.10 in expenses. In contrast to Polsinelli, the debtor's bankruptcy counsel, Richard Gins, sought and was awarded only $35,995.00 in fees plus costs and expenses of $175.00. Polsinelli was employed to represent the debtor with respect to (1) the sole adversary proceeding in the case, a civil action that was removed from the Superior Court of the District of Columbia, and (2) a motion for relief from the automatic stay to permit foreclosure against the debtor's principal asset (a motion, which at one point, might have been affected by the liability issues being addressed in the adversary proceeding). The adversary proceeding was relatively straightforward, and the issue of liability was disposed of by way of partial summary judgment well before the hearing on the motion for relief from the automatic stay. Polsinelli played a minor role with respect to that motion for relief from the automatic stay, with Gins being the attorney arguing against the motion at the hearing on the motion. Polsinelli was also representing the two guarantors of the debtor's mortgage indebtedness, and often its billings relate to work done for the benefit of those two guarantors, and not for the benefit of the bankruptcy estate. Premier Bank, Inc. objected to the application. Premier Bank, Inc. is the successor in interest to Adams National Bank. A copy of Judge Teel's Aug. 2, 2013 Memorandum Decision is available at http://is.gd/3W75Kdfrom Leagle.com. GB Herndon and Associates, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No. 10-00945) on Sept. 24, 2010. The case was converted to a case under Chapter 7 of the Bankruptcy Code on Nov. 3, 2011. GGW BRANDS: Bankruptcy Court OKs $28MM Deal With Wynn ----------------------------------------------------- Law360 reported that a federal bankruptcy judge approved a settlement agreement between casino magnate Stephen A. Wynn and the bankruptcy trustee of the California company behind the "Girls Gone Wild" video series, reducing Wynn's claims against the company to $28 million. According to the report, U.S. Bankruptcy Judge Sandra R. Klein's approval comes two weeks after creditors in the bankruptcy railed against the settlement, which reduces Wynn's claims against GGW Brands LLC, arguing that it unfairly favors Wynn and neglects at least $8.7 million in claims owed to other creditors. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. GGW Marketing, LLC, GGW Brands' affiliate, filed a voluntary Chapter 11 petition on May 22, 2013, before the United States Bankruptcy Court Central District Of California (Los Angeles). The case is assigned Case No.: 13-23452. Martin R. Barash, Esq., and Matthew Heyn, Esq., at Klee, Tuchin, Bogdanoff and Stern, LLP, in Los Angeles, California, represent GGW Marketing. GORDIAN MEDICAL: Seeks Court Nod to Obtain $4MM in DIP Financing ---------------------------------------------------------------- On Aug. 19, 2013, at 2:00 p.m., Gordian Medical, Inc., through counsel, will move the U.S. Bankruptcy Court for the Central District of California for the entry of an order authorizing the Debtor to obtain secured postpetition indebtedness from its President, Gerald DelSignore, in the amount of up to $4 million to fund the payment of the Debtor?s costs of operations. The DIP Note will bear interest at the rate of 5% per annum. The default rate will be 7%. The interest will accrue and be payable with the principal of the Promissory Note. The Maturity Date of the Loan will be on Feb. 1, 2014. The Obligations of the Debtor under the DIP Note and the DIP Financing Order, (i) pursuant to Section 364(c)(1) of the Bankruptcy Code, will at all times constitute allowed superpriority claims, and (ii) pursuant to Section 364 (c)(2) of the Bankruptcy Code, will be secured by perfected first priority liens on and security interests in the DIP Collateral. The Motion was submitted by: Samuel R. Maizel, Esq. Scotta E. McFarland, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., 13th Floor Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: (310) 201-0760 E-mail: smaizel@pszjlaw.com smcfarland@pszjlaw.com Attorneys for Gordian Medical, Inc. About Gordian Medical Gordian Medical, Inc., dba American Medical Technologies, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-12339) in Santa Ana, California, on Feb. 24, 2012, after Medicare refunds were halted. Irvine, California-based Gordian Medical provides supplies and services to treat serious wounds. The Debtor has active relationships with and serves patients in more than 4,000 nursing facilities in 49 states with the heaviest concentration of the nursing homes being in the south and southeast sections of the United States. In its schedules, the Debtor disclosed $37,877,279 in assets and $7,585,271 in liabilities as of the Petition Date. Judge Mark S. Wallace oversees the case. Pachulski Stang Ziehl & Jones LLP serves as the Debtor's counsel. Fulbright & Jaworski LLP serves as the Debtor?s special regulatory counsel. Loeb & Loeb LLP serves as the Debtor?s special tax counsel. GlassRatner Advisory & Capital Group LLC serves as the Debtor's financial advisor. The U.S. Trustee appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by Landau Gottfried & Berger LLP. HAWAII OUTDOOR: Aug. 26 Hearing on Continued Cash Collateral Use ---------------------------------------------------------------- The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii, in an eighth interim order, authorized David C. Farmer, Chapter 11 trustee for Hawaii Outdoor Tours, Inc., to use cash collateral until Aug. 26, 2013, to continue operating the property located at 93 Banyan Drive, Hilo, Hawaii, which includes the hotel known as Naniloa Volcanoes Resort and a nine-hole golf course known as the Naniloa Volcanoes Gold Club. The Court will hold another hearing on Aug. 26, at 9:30 a.m., on the Debtor's continued use of cash collateral. As adequate protection from any diminution in value of the lender's collateral, the Debtor granted First Citizens Bank a replacement lien against all property of the Debtor, a superpriority administrative claims status, subject to carve out on certain expenses. Timothy J. Hogan, Esq., represents the Chapter 11 trustee. About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi & Verbrugge acts as bankruptcy counsel. In its schedules, the Debtor disclosed $52,492,891 in assets and $11,756,697 in liabilities. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents secured creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. HIGHWAY TECHNOLOGIES: Aug. 14 Hearing on DIP Loan Extension ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a final hearing on Aug. 14, 2013, at 3 p.m. to consider a stipulation approving a modified budget and extending the DIP loan maturity date. The stipulation entered among Highway Technologies, Inc., the DIP Lenders, the prepetition agent, and the Official Committee of Unsecured Creditors provides for: i) the modified loan budget not to exceed $2,000,000; and ii) the extension of the maturity date from July 31, until Aug. 14, pending entry of a final DIP order, and to Sept. 6, upon entry of the final DIP order. As reported in the Troubled Company Reporter, Judge Kevin J. Carey on May 24 granted interim approval of the DIP financing, thus allowing the Debtors to access $2 million pending final approval. The Debtor has requested to borrow $3 million to fund the liquidation of their assets in an orderly fashion. The DIP facility is being provided by Oak Hill Special Opportunities Fund, L.P., Oak Hill Special Opportunities Fund (Management), LP and Wynnchurch Capital Partners II, L.P., which are a subset of the prepetition lenders. The DIP facility consists of a multi-draw term loan facility in an aggregate principal amount of up to $3 million. The DIP lenders will receive a DIP fee equal to 3% of the DIP loans. The DIP loans will bear interest at 10% per annum, with the interest rising to 12% in the event of default. As of the Petition Date, the aggregate amount of principal and accrued interest owed under the prepetition loan documents to the prepetition lenders is $67,109,035, which does not include fees and expenses. A copy of the terms is available for free at: http://bankrupt.com/misc/HIGHWAYTECHNOLOGIES_financing.pdf 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, 2013, to conduct an orderly liquidation. Richard M. Pachuiski, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, 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. Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. Gavin/Solmonese LLC serves as its financial advisor. HIGHWAY TECHNOLOGIES: Panel May Hire Richards Layton as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Highway Technologies, Inc. to retain Richards Layton & Finger, P.A. as its bankruptcy counsel. As reported in the Troubled Company Reporter on July 30, 2013, the firm attests it is a "disinterested person" as that 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, 2013, to conduct an orderly liquidation. Richard M. Pachuiski, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, 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. Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. Gavin/Solmonese LLC serves as its financial advisor. HIGHWAY TECHNOLOGIES: Lenders to Fund Unsecured Creditors Trust --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Highway Technologies, Inc., et al., on July 19 filed papers with the Bankruptcy Court disclosing the terms of a settlement between the lenders: (a) Ableco Finance LLC, in its capacity as administrative and collateral agent under the Debtors' Financing Agreement dated as of Feb. 15, 2007; (b) the lenders identified as signatories to the prepetition financing agreement; (c) Oak Hill Special Opportunities Fund, L.P., Oak Hill Special Opportunities (Management) Fund, L.P. and Wynnchurch Capital Partners II, L.P., (collectively, the DIP Lenders) in their capacity as postpetition lenders, which approved on May 24, 2013; (d) Oak Hill Special Opportunities Fund, L.P., Oak Hill Special Opportunities Fund (management), L.P., Oak Hill Advisors L.P., Oak Hill Capital Management, LLC, Wynnchurch Capital Ltd., and Wynnchurch Capital Partners II, L.P., in their capacities as shareholders, officers or directors of the Debtors or HTS Holdings, Inc.; and the Committee. The Committee relates that the settlement was the result of negotiations and provides avenue for the maximization of value for all constituencies. The stipulation also provides for significant recoveries to unsecured creditors and payments to the estates, all while allowing the Debtors to focus on marketing and selling their assets. Specifically, the settlement provides for: 1. the prepetition lenders to contribute to a trust, for the benefit of general unsecured creditors 80 percent of the net recoveries from the sale of the Debtors' rolling stock; 2. a sharing arrangement with respect to recoveries from certain potential litigation; 3. provides for $500,000 cash to the estates in exchange for a release granted to the sponsors; 4. provides for a significant increased budget for the Committee's prefessional fees and expenses from $225,000 to $425,000 -- to allow, among other things, an investigation of possible causes of action; 5. resolves the objection to the DIP motion and conversion motion; and 6. provides mutual releases. A copy of stipulation is available for free at http://bankrupt.com/misc/HIGHWAYTECHNOLOGIES_settlement.pdf The U.S. Trustee's Office has objected to the proposed global settlement, as reported in the Troubled Company Reporter on Aug. 8, 2013. The U.S. Trustee argues that the accord turns the Bankruptcy Code "on its head" by allowing unsecured creditors to get their money before more senior claimants are paid in full. The proposed settlement resolves the unsecured creditors committee's concerns about the Debtors' $3 million post-petition loan. 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, 2013, to conduct an orderly liquidation. Richard M. Pachuiski, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, 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. Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. Gavin/Solmonese LLC serves as its financial advisor. HIGHWAY TECHNOLOGY: Creditors Refute Trustee's Settlement Qualms ---------------------------------------------------------------- Law360 reported that the creditors committee in Highway Technologies Inc.'s Chapter 11 proceedings said that the U.S. Trustee had "missed the mark" when it took issue with a proposed settlement among creditors, arguing the bankruptcy watchdog had overstated concerns about administrative and priority creditors not being paid enough. According to the report, the official committee of unsecured creditors told the Delaware bankruptcy court that the likelihood of Highway Technologies' case being administratively insolvent is slim, even after the effects of the proposed settlement are factored in. 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, 2013, to conduct an orderly liquidation. Richard M. Pachuiski at Pachulski Stang Ziehl & Jones LLP serves as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, 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. Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. ICP STRATEGIC: Bankruptcies to Center in Cayman Islands ------------------------------------------------------- Law360 reported that a New York bankruptcy judge said the Cayman Islands insolvency proceedings of two hedge funds formerly managed by investment adviser Thomas Priore -- who last year settled allegations that he and his firm ICP Asset Management LLP defrauded mortgage-backed securities investors -- will be designated as the foreign main bankruptcy case. According to the report, U.S. Bankruptcy Judge Robert E. Gerber formally recognized the Cayman Islands liquidations proceedings for ICP Strategic Credit Income Master Fund Ltd. and ICP Strategic Credit Income Fund Ltd. as the foreign main proceedings. ICP Strategic Credit Income Fund Ltd. and ICP Structured Credit Income Fund Ltd. filed petitions under Chapter 15 of the Bankruptcy Code on June 28, 2013, before Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York (Manhattan), Case No. 13-12116. The Debtors' Chapter 15 counsel is William T. Reid, IV, Esq., at REID COLLINS & TSAI LLP. INDYMAC BANCORP: Ex-CEO Asks 9th Circ. to Reverse $80MM Ruling -------------------------------------------------------------- Law360 reported that IndyMac Bancorp. Inc.'s former chairman and chief executive told the Ninth Circuit that a federal district court misinterpreted the terms of $80 million in directors & officers policy in allowing insurance companies to avoid covering the costs of litigation launched by federal securities regulators. According to the report, in a brief filed before the Ninth Circuit, Michael Perry argued that the lower court was incorrect when it found that insurers are not required to cover the cost settling litigation launched by the U.S. Securities and Exchange Commission. About Indymac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection (Bankr. C.D. Calif., Case No. 08-21752) on July 31, 2008. Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INTRAOP MEDICAL: Court Clears to Auction Its Assets in September ---------------------------------------------------------------- Marie Beaudette, writing for DBR Small Cap, reported that a bankruptcy judge said IntraOp Medical Corp. can auction its assets next month, with a $15 million offer from Firsthand Technology Value Fund kicking off bidding. As previously reported by The Troubled Company Reporter, the Debtor's plan to put its assets on the auction block faced opposition from the federal government's bankruptcy watchdog, who said some of the proposed bidding rules will "chill the bidding" for the company's assets. About IntraOp Medical Headquartered in Sunnyvale, California, IntraOp Medical Corp. (OTC BB: IOPM) -- http://www.intraopmedical.com/-- develops, manufactures, markets, distributes and services Mobetron, a proprietary mobile electron-beam cancer treatment system designed for use in intraoperative electron-beam radiation therapy, or IOERT. IntraOp Medical Corp. filed a petition for Chapter 11 protection (Bankr. N.D. Cal. Case No. 13-bk-53791) on July 15 in San Jose, California. Revenue for the September 2012 fiscal year was $13.2 million. The IntraOp device delivers radiation during surgery to cancerous tissue while shielding healthy tissue. IPC INTERNATIONAL: Plans Strategic Sale in Ch. 11 ------------------------------------------------- Law360 reported that IPC International Corp., a leading provider of shopping center security services, sought protection in Delaware bankruptcy court as the company plans a stalking-horse sale to industry rival Universal Protection Services LLC. According to the report, Illinois-based IPC, along with parent Security Networks Holdings Corp., filed for Chapter 11 in the face of a tightening American economy, an unsuccessful U.K. operation that drained liquidity, and insurance liability issues, according to a declaration by Chief Financial Officer Scott M. Strong. ISOTONER CORP: S&P Retains 'B' CCR on Plans to Increase Debt ------------------------------------------------------------ Standard & Poor's Ratings Services said its issue-level and recovery ratings on totes Isotoner Corp.'s senior secured credit facilities are not immediately affected by the company's plans to issue incremental debt from these credit facilities. S&P expects the proceeds to partially fund a dividend to its shareholders. "We estimate leverage will increase from the higher debt levels and pro forma leverage will rise to about 6x, compared with about 4.7x prior to the transaction. We believe the company will reduce debt through required amortization and annual excess cash flow payments but that credit metrics will remain in line with the indicative ratios for "highly leveraged" financial risk profile, including leverage above 5x, over the next year. We also expect liquidity to remain adequate over the next year but could consider a negative rating action if liquidity becomes constrained and covenant cushion decreases to below 10%," S&P said. Standard & Poor's corporate credit rating on totes Isotoner remains unchanged at 'B', with a stable outlook. RATINGS LIST totes Isotoner Corp. Corporate credit rating B/Stable/-- Senior secured first-lien B Recovery rating 4 Senior secured second-lien CCC+ Recovery rating 6 JEH COMPANY: Can Continue Using Frost Bank Cash Until Aug. 1 ------------------------------------------------------------ On Aug. 1, 2013, the U.S. Bankruptcy Court for the Northern District of Texas entered a third agreed interim order authorizing JEH Company to continue using cash collateral of Frost Bank until Aug. 1, 2013. Debtor is not authorized to sue cash collateral to pay any lease or secured adequate protection payments pursuant to the Order. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities as of the Petition Date. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities as of the Petition Date. JEH COMPANY: Has Approval to Hire Griffith Jay as Counsel --------------------------------------------------------- JEH Company and its debtor-affiliates sought and obtained approval from the Bankruptcy Court to employ Griffith, Jay & Michel, L.L.P., as counsel. GJM will, among other things, advise the Debtors generally with respect to general and restructuring matters, and will advise the Debtors with respect to matters that generally arise in this matter or an ordinary chapter 11 case. In connection with this engagement, JEHCO tendered the payment of $60,000 as a retainer. Debtor JEH Stallion Station, Inc., tendered a retainer of $10,000. The hourly billing rates for attorneys at GJM range from $150 to $350 for attorneys. The attorneys primarily responsible for this bankruptcy matter will be Mark J. Petrocchi, Esq. His hourly rate is $350. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. JEH COMPANY: Can Employ Waters Vollmering as Tax Accountant ----------------------------------------------------------- JEH Company et al., ask the U.S. Bankruptcy Court for permission to employ Waters, Vollmering & Associates, L.L.P. as tax accountant and financial advisor. The Debtors request authority to pay Waters $8,000 for the 2012 tax return preparation and $165 per hour for any other services to be provided. Gil Vollmering -- gvollmering@wva-cpa.com -- attests that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Counsel for the Debtors can be reached at: Mark J. Petrocchi, Esq. GRIFFITH, JAY & MICHEL, LLP 2200 Forest Park Blvd. Fort Worth, TX 76110 Tel: (817) 926-2500 Fax: (817) 926-2505 E-mail: mpetrocchi@lawgjm.com About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. JEMSEK CLINIC: Bid to Compel Blue Cross to Produce Docs Rejected ---------------------------------------------------------------- Bankruptcy Judge J. Craig Whitley denied the motion filed by Joseph Gregory Jemsek, M.D., to compel Blue Cross and Blue Shield of North Carolina to reproduce all 262,000+ documents that have thus far been produced by BCBSNC in the course of discovery in the action, BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA, Plaintiff, Counterclaim Defendant Counterclaim, Plaintiff, v. JEMSEK CLINIC, P.A. AND JOSEPH JEMSEK, M.D. an individual, Defendants, Counterclaim Plaintiffs Counterclaim Defendants, Adv. Proc. No. 07-3006 (Bankr. W.D.N.C.), Consolidated with No. 07-03008. The Jemsek Defendants have asked for discovery after the period expired that could have, and should have, been requested in their initial requests. According to Judge Craig, the Defendants essentially ask the Court to save them from their own prior decisions. Even if this were not so, there has been no showing that reproduction of documents and accompanying metadata would be likely to contain sufficiently meaningful information pertaining to their two remaining counterclaims to justify the gross expenditure of time and money that would be required on the part of BCBSNC. This is essentially a proposal to undertake an eleventh hour fishing expedition in hopes to netting something more to support their theories. Finally, BCBSNC has properly withheld the enumerated documents in its privilege log under its claims of work product and/or attorney-client privilege. A copy of the Court's Aug. 2, 2013 Memorandum Opinion is available at http://is.gd/4sHKG7from Leagle.com. Jemsek Clinic, P.A., dba Jemsek Specialty Clinic, Lyme and Related Diseases, PLLC, fka Jemsek Clinic, PLLC -- http://www.jemsekclinic.com/-- operates a center for the practice of internal medicine and infectious diseases in Huntersville, N.C. The center specializes in general infectious disease diagnosis and treatment, with a primary focus on HIV/AIDS and Lyme Disease. The debtor sought chapter 11 protection (Bankr. W.D.N.C. Case No. 06-31766) on Oct. 25, 2006, and is represented by Travis W. Moon, Esq., at Hamilton Fay Moon Stephens Steele & Martin, PLLC, in Charlotte, N.C. At the time of the filing, the Debtor estimated its assets and debts at less than $10 million. KNIGHT INDUSTRIES: 7th Circ. Affirms Dismissal of $34MM BofA Suit ----------------------------------------------------------------- Law360 reported that the Seventh Circuit on August 8 affirmed the dismissal of a suit brought by Bank of America NA against Knight Industries and its subsidiaries accusing the company's executives of looting the firm before it went bankrupt, costing BofA approximately $34 million. BofA brought suit in 2011, saying Knight's officers and directors abused their positions by paying benefits to themselves and diverting assets and opportunities for the indebted companies into other companies owned or controlled by the defendants, according to Law360. LAND SECURITIES: Hires Colliers International as Brokerage Firm --------------------------------------------------------------- Land Securities Investors, Ltd. asks the U.S. Bankruptcy Court for permission to employ Colliers International as a brokerage firm to lease and/or sell the Debtor's real property located at 8351-8357 N. Rampart Range Rd., Littleton, CO 80125. Jason F. Kinsey attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Land Securities Land Securities Investors, Ltd., LSI Retail II, LLC, and Conifer Town Center, LLC, sought Chapter 11 protection (Bankr. D. Colo. Case Nos. 13-11167, 13-1113, and 13-11135) in Denver on Jan. 29, 2013. Land Securities disclosed $46,978,954.37 in total assets and $29,616,097.77 in total liabilities. The Debtors are real estate developers and investors. The Office of the U.S. Trustee for Region 19 said that it was unable to appoint an official committee of unsecured creditors. LEHMAN BROTHERS: Credit Agricole Loses Bid to Move $34MM Suit ------------------------------------------------------------- Law360 reported that A New York federal judge on Thursday refused Credit Agricole Corporate and Investment Bank's bid to move a lawsuit brought by Lehman Brothers Holdings Inc. over $34 million in swap transactions out of bankruptcy court, finding that interpreting the bankruptcy code is at the heart of the dispute. According to the report, U.S. District Judge Laura Taylor Swain ruled that Lehman's adversary complaint relates to a disputed question about the effect of the bankruptcy code on the rights of Lehman and Credit Agricole under a swap agreement. 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: UBS Agrees to Pay $120MM in Investor MDL --------------------------------------------------------- Law360 reported that after five years of litigation, UBS Financial Services Inc. has agreed to pay $120 million cash to settle its part of an investor class action against former officials and auditors of Lehman Brothers Holdings Inc. in multidistrict litigation over the bankrupt company's securities offerings. The notice of the tentative settlement comes after U.S. District Judge Lewis A. Kaplan in January denied Ernst & Young LLP and UBS' motion to dismiss the certification bid of two classes pursuing claims against the accounting firm and the investment bank, according to the report. 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: California Nonprofit Battles Over Soured Deal -------------------------------------------------------------- Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported that a nonprofit retirement-home foundation affiliated with the United Church of Christ is seeking bankruptcy court approval to sue Lehman Brothers Holdings Inc. over soured interest rate swaps. 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. LMI AEROSPACE: S&P Revises Outlook to Negative & Affirms 'B+' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its rating outlook on LMI Aerospace Inc. to negative from stable. At the same time, S&P affirmed the 'B+' corporate credit rating on LMI and the 'B+' issue-level rating on the company's $350 million secured first-lien credit facility (composed of a $125 million revolver and a $225 million term loan), which has a recovery rating of '3' that indicates meaningful recovery (50%-70%) in a payment default scenario. On Aug. 8, 2013, LMI announced a significant reduction in its 2013 earnings guidance, which will likely result in credit ratios that are much worse than S&P previously expected. The company will also be seeking to amend its covenant levels on the total leverage and the interest coverage ratios to allow for more headroom, given the recent earnings decline. "The rating on LMI reflects our expectations that the company's credit ratios will remain weak over the next 12 months due to decreased demand across its business segments," said Standard & Poor's credit analyst Tatiana Kleiman. "We assess LMI's business risk profile as "weak," as defined in our criteria. Our assessment reflects the company's position as a Tier II aerostructures supplier to the cyclical and competitive commercial aerospace market, its relatively good customer and program diversity, and its efficient operations. We assess LMI's financial risk profile as "aggressive," based on its moderately high debt leverage, its limited free cash flow for the next year because of high capital expenditures and working capital investment, and its adequate "liquidity." The outlook is negative. S&P had expected LMI's credit measures to improve as the company realized a full year of earning and cash flows from the acquisition of Valent Aerostructures LLC. This improvement has not materialized to the extent S&P had expected due to adverse conditions, including setbacks in demand, some operational issues, and cost increases. "LMI's credit quality may be at risk should such conditions persist, preventing improvement in credit metrics," said Ms. Kleiman. S&P could lower the rating if continued weakness in demand or other adverse developments cause debt to EBITDA to remain above 5x and FFO to debt of less than 12% on an extended basis. S&P could revise the outlook to stable if LMI's cash flow and debt reduction is greater than S&P expects, resulting in debt to EBITDA of less than 4x and FFO to debt consistently higher than 15%. LOMBARD FLATS: Court Holds Creditor in Contempt ----------------------------------------------- The reorganized debtor, Lombard Flats, LLC, has moved for an order of contempt against Cheuk Tin Yan, a creditor, and his attorney for obtaining a $960,299 judgment against the Debtor after confirmation of a Chapter 11 plan. In subsequent submissions the debtor has indicated that it will not press for money damages if the offending judgment is vacated. At a hearing on June 14, 2013, the parties agreed to submit the matter for decision on the basis of the current record without an adversary proceeding. In an Aug. 5, 2013, Memorandum Decision available at http://is.gd/AgeteAfrom Leagle.com, Bankruptcy Judge Dennis Montali granted Lombard Flats' motion, declared the judgment void, and directed that the creditor take steps to vacate the judgment within 30 days. If that is accomplished the matter will be closed; if not, the debtor will be entitled to seek appropriate contempt remedies. Lombard Flats LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 09-32219) on Aug. 3, 2009, and obtained an order confirming its plan on July 19, 2010. The court entered a final decree on May 23, 2011, and the case was closed on June 3, 2011. MAXCOM TELECOMMUNICACIONES: No Creditors' Committee Appointed ------------------------------------------------------------- Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the U.S. Bankruptcy Court for the District of Delaware that an unsecured creditors' committee has not been appointed in the Chapter 11 cases of Maxcom Telecomunicaciones, S.A.B. de C.V., et al., because the U.S. Trustee did not receive any response to the communication service for on the committee. 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. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13- bk-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. 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. MAXCOM TELECOMMUNICACIONES: Seeks to Employ Kirkland as Counsel --------------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as attorneys to be paid the following hourly rates: Partners $655 - $1,150 Of Counsel $450 - $1,150 Associates $430 - $790 Paraprofessionals $150 - $335 The firm will also be reimbursed for any necessary out-of-pocket expenses. Marc Kieselstein, P.C., Esq. -- marc.kieselstein@kirkland.com -- a partner at Kirkland & Ellis LLP, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Mr. Kieselstein, however, discloses that on April 22, 2013, the Debtors paid $150,000 to K&E as a classic retainer. In addition, the Debtors paid subsequent classic retainers for $100,000 on May 28, 2013, and $50,000 on July 19, 2013. Adam Paul, Esq. -- adam.paul@kirkland.com -- and Daniel R. Hodgman, Esq. -- daniel.hodgman@kirkland.com -- at Kirkland & Ellis LLP, are also expected to take primary roles in providing services to the Debtors. A hearing on the employment application will be held on Aug. 19, 2013, at 9:30 a.m. (prevailing Eastern Time). Objections are due Aug. 12. 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. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13- bk-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. 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. MAXCOM TELECOMMUNICACIONES: Taps Pachulski as Local Del. Counsel ---------------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. The principal attorneys and paralegals presently designated to represent the Debtors and their current standard hourly rates are: Laura Davis Jones, Esq. -- ljones@pszjlaw.com $975 Timothy P. Cairns, Esq. -- tcairns@pszjlaw.com $575 Peter J. Keane, Esq. -- pkeane@pszjlaw.com $425 Lynzy McGee, paralegal $295 The firm will also be reimbursed for any necessary out-of-pocket expenses. Ms. Jones assures the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Ms. Jones, however, discloses that her firm has received payments from the Debtors during the year prior to the Petition Date in the amount of $93,195. A hearing on the employment application will be held on Aug. 19, 2013, at 9:30 a.m. (prevailing Eastern Time). Objections are due Aug. 12. 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. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13- bk-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. 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. MAXCOM TELECOMUNICACIONES: Gets Approval for $45M Recapitalization ------------------------------------------------------------------ Patrick Fitzgerald writing for Daily Bankruptcy Review reports that Mexico's Maxcom Telecomunicaciones S.A.B. won U.S. court approval of its recapitalization agreement with investors led by private equity firm Ventura Capital Privado S.A., a key element in the telecommunications company's restructuring under bankruptcy protection. 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. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13- bk-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. 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. MCJUNKIN RED: Moody's Expects Credit Metrics to Remain Strong ------------------------------------------------------------- McJunkin Red Man Corporation's (MRC Global, Inc.) first half 2013 operating results have been weak due to reduced spending levels in the upstream sector and in the transmission segment of the midstream sector along with lower line pipe and oil country tubular goods (OCTG) prices in the US. Moody's is expecting these trends to continue in the second half and to result in the company's adjusted EBITDA declining by a significant amount in 2013. However, Moody's still expects the company's credit metrics to remain relatively strong for its rating due to the debt reduction and refinancing activities pursued over the past 18 months. McJunkin Red Man Corporation (MRC Global, Inc.) is a global distributor of pipes, valves, and fittings (PVF) and related products and services to the energy industry across each of the upstream (exploration, production and extraction of underground oil and gas), midstream (gathering and transmission of oil and gas, gas utilities, and the storage and distribution of oil and gas) and downstream (crude oil refining, petrochemical processing and general industrial) sectors. The company operates out of approximately 240 branch locations, 130 third party pipe yards, 24 valve automation service centers and 13 distribution centers located in the principal industrial, hydrocarbon producing and refining areas throughout the United States, Canada, Europe, Asia and Australia. The company is headquartered in Houston, Texas and generated revenues of approximately $5.3 billion for the 12 month period ending June 30, 2013. On October 4, 2012, Moody's upgraded McJunkin Red's corporate family and probability of default rating to B1 from B2 and assigned a speculative grade liquidity rating of SGL-2. Moody's also assigned a B2 rating to the company's proposed $750 million term loan B. MEDICAL CARD: Moody's Raises Debt Rating & CFR to B3; IFS to Ba3 ---------------------------------------------------------------- Moody's Investors Service has upgraded the senior secured debt rating and corporate family rating of Medical Card System, Inc. to B3 from Caa3, following the release of its 2011 and 2012 audited GAAP financial statements. Moody's also upgraded the insurance financial strength (IFS) rating of the company's operating subsidiary, MCS Advantage, Inc. to Ba3 from B3. The outlook on the ratings is stable. Ratings Rationale: Moody's said that the upgrade reflects the unqualified audit report from the company's auditors as well as the validation of results for both 2011 and 2012. "The corroboration of the GAAP financial results with the previously reported statutory results and the finalization of a waiver agreement with lenders have resolved the financial and operational concerns associated with the company since the end of 2011, said Steve Zaharuk, Moody's Senior Vice President. Zaharuk added, "With the resolution of these issues, which prompted the previous rating downgrades, the ratings have been returned to a level that reflects the company's underlying business and financial profile." Commenting on MCS's weak credit profile, the rating agency pointed to the relatively small size of MCS and its geographic concentration with 100% of its revenues being generated in Puerto Rico, the company's high concentration of business in Medicare Advantage, and its low consolidated risk-based capital (RBC) ratio. In particular, while the company exceeded the RBC requirement established in Puerto Rico for 2012 (the consolidated RBC ratio for its regulated entities was 120% over the minimum required level using the transitional target established by the Commissioner of Insurance), the absolute RBC ratio at 96% CAL was relatively low. Zaharuk commented, "The concern with the Medicare Advantage business is the expected continued reimbursement reductions as a result of provisions contained in the Affordable Care Act, which could reduce membership and earnings going forward." Additionally, Moody's noted that although recent trends in the company's membership and earnings appear to be improving, profitability remains relatively weak. The rating agency stated that, while lessened to some degree, there are continuing concerns regarding an ongoing federal investigation of the company. While no charges have been made against the company, the concern is that this could result in the federal authorities placing operational constraints and/or assessing fines/penalties, which would have negative financial implications for the company. The rating agency added that the company reported that an internal investigation ordered by an independent committee of the board of directors found no evidence that MCS acted willfully or recklessly in connection with the activities subject to the federal investigation, and that no accrual was made in the audited financial statements. Moody's stated that MCS's ratings could be upgraded if: 1) EBITDA margins are sustained above 3%, 2) annual medical membership continues to grow by at least 2%, 3) the consolidated RBC ratio improves to 125% CAL and 4) the debt to EBITDA ratio is sustained below 3x. Conversely, the ratings could be downgraded if: 1) EBITDA margins fall below 1%, 2) medical membership decreases by 20% or more, or 3) there is an adverse development with respect to the federal investigation. The principal methodology used in rating Medical Card System was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. The following ratings were upgraded with a stable outlook: Medical Card System, Inc. -- senior secured debt rating to B3 from Caa3; corporate family rating to B3 from Caa3; MCS Advantage, Inc. -- insurance financial strength rating to Ba3 from B3. Medical Card System, Inc. is headquartered in San Juan, Puerto Rico. For 2012 MCS reported total revenues approximately $1.4 billion and a net gain of approximately $11.5 million. Medicare Advantage membership as of December 31, 2012 was 113,436 members (including Medicare Part D stand alone membership) compared to 112,640 members at December 31, 2011. Moody's insurance financial strength ratings are opinions about the ability of insurance companies to punctually pay senior policyholder claims and obligations. MERCANTILE BANCORP: Auction Date Set for Sept. 12 ------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Mercantile Bancorp's motion for bid procedures in connection with the sale of all of the Debtor's shares in Mercantile Bank and the related trademark for Mercantile Bank's "M" logo and approval of a $668,310 break-up fee and $250,000 as expense reimbursement. The deadline to submit the bid would be September 10, 2013; and an auction, if necessary, would be conducted on September 12, 2013. A September 16, 2013 sale hearing will follow. 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. MILESTONE SCIENTIFIC: Posts $74,000 Net Income in 2nd Quarter ------------------------------------------------------------- Milestone Scientific Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income applicable to common stockholders of $74,009 on $2.27 million of product sales for the three months ended June 30, 2013, as compared with a net loss applicable to common stockholders of $164,541 on $2.32 million of product sales for the same period during the prior year. For the six months ended June 30, 2013, the Company recorded net income applicable to common stockholdres of $224,754 on $4.76 million of product sales, as compared with a net loss applicable to common stockholders of $519,722 on $4.24 million of product sales for the same period a year ago. As of June 30, 2013, the Company had $5.63 million in total assets, $2.97 million in total liabilities and $2.66 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/nc7aRp About Milestone Scientific Livingston, N.J.-based Milestone Scientific Inc. is engaged in pioneering proprietary, innovative, computer-controlled injection technologies and solutions for the medical and dental markets. As reported in the TCR on March 22, 2013, Holtz Rubenstein Reminick LLP, in New York, N.Y., expressed substantial doubt about Milestone Scientific's ability to continue as a going concern, citing the Company's recurring losses from operations since inception. MMRGLOBAL INC: Amends First Quarter Form 10-Q --------------------------------------------- MMRGlobal, Inc., has amended its quarterly report on Form 10-Q for the period ended March 31, 2013, for the sole purpose of furnishing a corrected copy of Exhibit 10.1 to the Form 10-Q, reflecting changes to the confidential treatment request by MMRGlobal of certain items contained therein. No other changes have been made to the Form 10-Q. A copy of the amended Form 10-Q is available for free at http://is.gd/RWxOqN About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. The Company's balance sheet at March 31, 2013, showed $2.25 million in total assets, $9.04 million in total liabilities and a $6.79 million total stockholders' deficit. MMRGlobal incurred a net loss of $5.90 million in 2012, as compared with a net loss of $8.88 million in 2011. Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2012, and 2011, that raise substantial doubt about the Company's ability to continue as a going concern. NATIVE WHOLESALE: Conversion Motion Hearing Moved to Aug. 19 ------------------------------------------------------------ The hearing to consider the U.S. Trustee's motion to convert the Chapter 11 case of Native Wholesale Supply into a Chapter 7 proceeding has been further adjourned to Aug. 19, 2013, at 10:00 a.m. As previously reported on The Troubled Company Reporter, Tracy Hope Davis, the U.S. Trustee for Region 2, the U.S. Trustee for Region 2, the Debtor (1) has an inability to perform the statutory duties of a debtor-in-possession and to comply with the requirements of the Chapter 11 Operating Guidelines; and (2) has failed to file monthly financial reports for February and March 2013. The Aug. 6 edition of the TCR also reported that the states of California, Idaho, New Mexico, New York and Oklahoma filed a statement in partial support of the U.S. Trustee's motion. The States assert that it would be inappropriate to dismiss the case at this stage of the proceedings; rather, if the case does not remain in Chapter 11, only conversion is in the best interest of creditors and the estate. About Native Wholesale Supply Company Native Wholesale Supply Company is engaged in the business of importing cigarettes and other tobacco products from Canada and selling them to third parties within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the Debtor as counsel. The Company disclosed $30,022,315 in assets and $70,590,564 in liabilities as of the Chapter 11 filing. The States of California, New Mexico, Oklahoma and Idaho have appeared in the case and are represented by Garry M. Graber, Esq., at Hodgson Russ LLP. No trustee, examiner or creditors' committee has been appointed in the case. NEW ENGLAND COMPOUNDING: Ch. 11 Trustee Seeks Mediation ------------------------------------------------------- Stephanie Gleason, writing for DBR Small Cap, reported that the Chapter 11 trustee overseeing the bankruptcy of New England Compounding Pharmacy Inc. filed a plan to mediate with health-care providers and compounding pharmacy executives who may also bear responsibility for the deadly meningitis outbreak that brought down the company. New England Compounding Pharmacy Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012, after a meningitis outbreak linked to an injectable steroid, methylprednisolone acetate ("MPA"), manufactured by NECC, killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts. The Debtor owns and operates the New England Compounding Center is located in Framingham, Mass. In October 2012, the company recalled all its products, not just those associated with the outbreak. NEW RIVER DRY DOCK: Florida Judge Won't Vacate Contempt Order ------------------------------------------------------------- In the Chapter 11 case of New River Dry Dock, Inc., Bankruptcy Judge John K. Olson denied Christopher Denison's "Emergency Motion to Vacate Writ of Bodily Attachment and Order Adjudging Christopher "Kit" Denison in Contempt." The Contempt Order arose out of the motion by Marina Mile Shipyard, Inc., seeking sought to compel Mr. Denison and his company Marine Realty, Inc., to make payments previously ordered by the Court. In an Agreed Order entered June 8, 2010, Mr. Denison and Marine Realty were ordered to pay to Shipyard's predecessor in interest a total of $45,000 by September 22, 2010, with the first payment of $7,500 due by July 15, 2010, later extended at the request of Mr. Denison and Marine Realty to September 22, 2010. Mr. Denison and Marine Realty had agreed to the amount and timing of these payments. Nonetheless, the only payments made on account of these agreed amounts was $25,981.41, from sequestered funds pursuant to Order. A copy of the Court's Aug. 5, 2013 Order is available at http://is.gd/EqeTwkfrom Leagle.com. In November 2012, the United States Court of Appeals for the Eleventh Circuit upheld a lower court order that required Mr. Denison and Marine Realty to disgorge $490,000 in commissions that they received after brokering the sale of New River Dry Dock's marina property. As reported by the Troubled Company Reporter on Nov. 20, 2012, the bankruptcy court had granted summary judgment in favor of Marina Mile Shipyard, one of the creditors of the bankruptcy estate. The district court affirmed the decision, prompting Mr. Denison to elevate the matter to the Eleventh Circuit. In 2006, New River Dry Dock, whose primary asset was a marina, filed a petition for Chapter 11 bankruptcy. The debtor decided to hire the Realtors as a real estate agent to sell the marina, and submitted an application to the bankruptcy court for the approval of the Realtors' employment. As part of the application, Mr. Denison, one of the Realtors, submitted an unsworn declaration, in which he attested that neither he nor Marine Realty held or represented an interest adverse to the debtor, and that both were "disinterested persons" within the meaning of 11 U.S.C. Sec. 101(14). For their services, the Realtors were to receive a commission equal to 4% of the gross sale price. In October 2006, the bankruptcy court approved the application for the Realtors' employment and the proposed commission. As part of his efforts to sell the marina, Mr. Denison contacted Steve Israel, an investor with whom Mr. Denison had a prior business relationship, and suggested that Mr. Israel submit a "stalking horse" bid on the property. Mr. Israel eventually agreed to submit a stalking horse bid of $12.25 million, far below the marina's officially appraised value, and partnered with another investor, Fred Scott, to provide most of the funds to purchase the marina. There were no higher bids, and Mr. Denison ultimately acted as a broker in the court-approved sale of the marina for $12.25 million to SPVEF-SKID, LLC, a joint venture company formed by Messrs. Scott and Israel for the purchase of the marina. The sale closed in June 2007. Sometime after the bankruptcy court's approval of the Realtors' employment, but before the closing, Messrs. Scott and Israel offered Mr. Denison the opportunity to manage the marina after the closing, or to acquire an ownership interest in the marina. Mr. Denison never refused the buyers' offers to be involved in managing or owning the marina, and the buyers expected that Mr. Denison would be involved after the closing. Additionally, Mr. Denison performed numerous tasks on the buyers' behalf before the closing, such as preparing capital expenditure schedules, obtaining insurance on the marina, and meeting with prospective contractors and tenants. Shortly after closing, Mr. Scott sent an e-mail to Messrs. Denison, Israel, and Israel's attorney, stating, in part: "I want to personally thank you all for getting to the point we are at today. A lot of hard work by all got us ownership of a valuable asset at a below market price . . . ." Two or three months later, Denison formalized an agreement to manage the marina and bought an ownership interest in it. At no point prior to the closing did the Realtors disclose to the bankruptcy court Mr. Denison's discussions with the buyers about his intended post-closing involvement with the buyers and the marina. The Realtors also failed to disclose to the bankruptcy court that Mr. Denison paid $37,500 from his commission on the sale to cover half of a "finder's fee" owed by the buyers to a third party. Mr. Denison never disclosed to the court that he had a business relationship with one of the buyers prior to being employed by the debtor. Furthermore, under their contract with the debtor, the Realtors were to receive a 4% commission amounting to $490,000. However, the Realtors actually received a $535,000 payment, and admit that they were overpaid by $45,000. After the sale of the marina, the bankruptcy court confirmed New River Dry Dock's reorganization plan, which included a release by the debtor and creditors of claims against professionals arising out of the bankruptcy case. Two years later, Marina Mile Shipyard, Inc., the largest unsecured creditor of the debtor, alerted the bankruptcy court about Mr. Denison's relationship with the buyers of the marina, Messrs. Israel and Scott. The bankruptcy court sua sponte ordered the Realtors to show cause why they should not disgorge their commission fee. MMS also filed a separate motion seeking the disgorgement of the Realtors' commission fees. A lengthy litigation ensued between the Realtors and MMS over the commission fees, and both parties filed motions for summary judgment on the issue of disgorgement. The bankruptcy court ordered the Realtors to repay, in installments, the $45,000 (with interest) that the Realtors received in excess of their authorized commission on the sale of the marina. Although the Realtors never objected to this order, and do not challenge it on appeal, they failed to comply with that order and repay the $45,000 to the bankruptcy plan administrator. MMS then filed an emergency motion to sequester $25,981.41 of commissions that Marine Realty received from an unrelated real estate transaction. The bankruptcy court granted MMS's motion and ordered the sequestration of the Realtors' commission funds. Mr. Denison filed a notice of exemption from garnishment under Fla. Stat. Sec. 222.12 and requested a hearing on the matter. The bankruptcy court, however, ultimately struck Mr. Denison's notice of exemption and request for a hearing. The bankruptcy court also granted MMS's motion for summary judgment on the issue of disgorgement. The bankruptcy court concluded that Mr. Denison had an interest adverse to the estate while employed by the estate, in light of Mr. Denison's undisclosed pre-closing relationship with the buyers. The bankruptcy court ordered the Realtors to disgorge their $490,000 commission. On appeal, Mr. Denison said the bankruptcy court erred in ordering a disgorgement of fees because the Chapter 11 plan released all claims against professionals arising from the bankruptcy case. The Eleventh Circuit disagreed, holding that the bankruptcy court initially reviewed and approved Mr. Denison's fee without knowledge that he had an interest adverse to the estate. Once the court learned this fact, it had the authority to revisit Mr. Denison's fee award. About New River Dry Dock Based in Fort Lauderdale, Florida, New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. The Bankruptcy Court confirmed New River Dry Dock's Chapter 11 Liquidation Plan in October 2007. ORCHARD SUPPLY: Lowe's Store Acquisition Plan Awaits Court Nod -------------------------------------------------------------- Lowe's Companies, Inc., the world's second largest home improvement retailer, on Aug. 12 announced further progress in its plans to acquire the majority of assets of Orchard Supply Hardware, including 72 stores, for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners, subject to Bankruptcy Court approval. Lowe's has been advised by Orchard that no additional bids were received by the deadline of August 9, 2013. The transaction will be presented to the Bankruptcy Court for approval on August 20, 2013, and Lowe's anticipates completing the acquisition by the end of August. Lowe's plans to have Orchard operate as a separate, standalone business, retaining its brand under the leadership of Orchard's current management team. Lowe's plans to acquire the locations most complementary to its current strategy and store footprint. Once completed, the acquisition will enable Lowe's to expand its presence in California and reach a new customer base through the addition of Orchard's smaller-format stores in densely populated areas. Orchard's neighborhood hardware and garden stores offer a product selection focused on paint, repair and backyard categories in approximately 36,000 square feet of selling space, compared to 113,000 square feet of selling space for an average Lowe's home improvement store. Lowe's currently operates 110 stores in California. Robert A. Niblock, Chairman, President and CEO of Lowe's, said, "We are very pleased to be moving forward with the acquisition process. Strategically, the transaction will provide Lowe's with an attractive opportunity to increase our store footprint in California, where we are currently underpenetrated, through a neighborhood store format that is complementary to our strengths in big-box retail. Orchard's hardware and garden stores have a loyal customer base and are situated in high-density, prime locations that are difficult for larger format retailers to enter. We see significant potential for Orchard as a standalone business within Lowe's portfolio, and we look forward to the opportunity to participate more fully in California's economic recovery." As announced on June 17, 2013, Lowe's entered into a purchase agreement with Orchard that would serve as the "stalking-horse bid" in a Bankruptcy Court-supervised auction under Section 363 of the U.S. Bankruptcy Code. Interested bidders were required to file initial bids with the Court by August 9, 2013. Orchard initiated Chapter 11 proceedings on June 17, 2013 in the U.S. Bankruptcy Court for the District of Delaware. Based in San Jose, California, Orchard reported annual revenue of $657 million for fiscal 2012. Goldman Sachs is acting as financial advisor to Lowe's, while Hunton & Williams LLP is acting as legal advisor. With fiscal year 2012 sales of $50.5 billion, Lowe's Companies, Inc. -- http://www.Lowes.com-- is a FORTUNE(R) 100 company that serves approximately 15 million customers a week at more than 1,750 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest home improvement retailer in the world. No Other Bidders Saabira Chaudhuri, writing for Daily Bankruptcy Review, reported that Lowe's Co. said Orchard Supply Hardware received no additional acquisition offers by Friday's deadline, clearing the way for Lowe's to buy the hardware chain and increase its store footprint in California. Bidding Procedures Objections BankruptcyData reported that multiple parties -- including Fairview Shopping Center, Fortus Property Group, The Krausz Companies, Cortland Products, the ad hoc committee of certain senior secured term loan lenders, Kimco Realty, Bundy Plaza, The City and County of San Francisco (CCSF) and South County Professional Park -- filed with the U.S. Bankruptcy Court separate objections to Orchard Supply Hardware Stores' motion for an order (I)(a) approving and authorizing bidding procedures in connection with the sale of substantially all the assets; (b) approving the stalking horse bid protections; (c) approving the sale support agreement; (d) scheduling the related auction and hearing to consider approval of the sale; (e) approving procedures related to the assumption and assignment of certain executory contracts and unexpired leases; (f) approving the form and manner of notice thereof and (g) granting related relief. According to the report, CCSF, a municipal corporation and party to a ground lease with one or more of the Debtors, asserts, "The Cure Notice provides that the cure amount for the Ground Lease is $2,069.21. The actual amount currently past due is $2,151.74. In addition, the Debtors are in default of their obligation under section 5.04 of the Ground Lease to provide quarterly and annual gross revenue statements to CCSF. Debtors have failed to provide the required statements for the lease year beginning May 1, 2004 and all subsequent lease years. Depending upon the information contained in the gross revenue statements, the Debtors may be liable to CCSF for additional rent and therefore may be liable for a larger cure amount than the Debtors' previously stated. In order to calculate properly the cure amount due to CCSF, the Debtors must provide the previously withheld gross revenue statements to CCSF. This information is necessary for CCSF to determine whether it is owed any additional cure amounts in the form of unpaid additional rent. The proposed Sale Order provides that 'after the payment of the relevant cure amounts by the Purchaser, neither the Debtors nor the Purchasers shall have any further liabilities to the Contract Counter Parties other than the Purchaser's obligation under the Executory Contracts and Leases that accrue and become due and payable on or after the Closing Date.' This provision of the proposed Sale Order would foreclose CCSF from collecting any unpaid obligations arising between the date upon which the cure amount was calculated and the as yet unknown Closing Date. This is in violation of section 365(d) (3) of the Bankruptcy Code and otherwise inappropriate and improper. The Sale Order must provide that all amounts due and owing during the period from the date upon which the cure amount was calculated through the Closing Date will be paid as and when due by the Debtors." About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a restructuring of the company's balance sheet and a sale of its assets for $205 million in cash to Lowe's Companies, Inc., absent higher and better offers. In addition to the $205 million cash, Lowe's has agreed to assume payables owed to nearly all of Orchard's supplier partners. Bankruptcy Judge Christopher S. Sontchi oversees the case. Michael W. Fox signed the petitions as senior vice president and general counsel. The Debtors disclosed total assets of $441,028,000 and total debts of $480,144,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. ORCHARD SUPPLY: Nine Additional Stores to Begin Closing Sales ------------------------------------------------------------- Orchard Supply Hardware Stores on Aug. 12 disclosed that, after completing a Court-approved marketing process, it intends to proceed toward completing the previously announced acquisition agreement with Lowe's Companies, Inc., pending approval by the United States Bankruptcy Court for the District of Delaware. Lowe's was named on June 17, 2013, as the stalking horse bidder in Orchard's Court-supervised auction process under Section 363 of the Bankruptcy Code. In order to be considered under the bidding procedures approved by the Bankruptcy Court, any competing bidders would have needed to submit qualifying bids before 4:00 p.m. Eastern Time on Friday, August 9, 2013. Orchard engaged in discussions with a number of potential buyers but did not receive any qualifying bids in advance of this deadline. Accordingly, the auction previously scheduled for August 14, 2013 will not be held. Orchard will now move forward to have the sale to Lowe's approved by the Bankruptcy Court on August 20, 2013, and completed by the end of August. "We are thrilled to be moving toward completing the sale to Lowe's and we believe this agreement is the best outcome for our associates, customers, suppliers, creditors and other business partners," said Mark Baker, Orchard President and Chief Executive Officer. "Lowe's submitted a bid at the start of the sale process which we believe reflects their understanding of our value proposition, our unique market opportunity and how our businesses complement one another. We look forward to continuing to execute on our repositioning and growth strategy with their ongoing support and believe this acquisition will lead to a very bright future for Orchard." As announced on June 17, 2013, Lowe's will acquire the majority of Orchard's assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Under the terms of the agreement, Orchard will operate as a separate, standalone business at the completion of the sale process, retaining its brand, management team and associates. The Company also will benefit from the financial stability of its new corporate parent, which, combined, with the benefits of its balance sheet restructuring, will allow Orchard to continue its repositioning and growth strategy. As part of its ongoing Chapter 11 process, Orchard on Aug. 12 identified nine additional stores that will begin store closing sales on August 15, 2013. In addition to the 17 stores that are being closed as part of the Chapter 11 process, two stores have closed in the normal course of business since June 17, 2013. The Company expects to continue operating its remaining 72 stores at the completion of the sale process. Orchard is advised in this financial restructuring by Moelis & Company, FTI Consulting and DLA Piper. About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a restructuring of the company's balance sheet and a sale of its assets for $205 million in cash to Lowe's Companies, Inc., absent higher and better offers. In addition to the $205 million cash, Lowe's has agreed to assume payables owed to nearly all of Orchard's supplier partners. Bankruptcy Judge Christopher S. Sontchi oversees the case. Michael W. Fox signed the petitions as senior vice president and general counsel. The Debtors disclosed total assets of $441,028,000 and total debts of $480,144,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. OTTAWA BUS: Newbys Liable to Webster Capital Debt ------------------------------------------------- Kansas District Judge Eric F. Melgren granted the motion of Webster Capital Finance, Inc. f/k/a Center Capital Corporation, for summary judgment, seeking to enforce personal loan guaranties against Daniel Newby and Thomacine Newby. On Nov. 22, 2010, Ottawa Bus Service, Inc., filed a voluntary petition for bankruptcy relief under Chapter 11. Webster Capital sued the Newbys, asserting that the Defendants improperly refused to honor their Continuing Guaranties upon Ottawa Bus's default and bankruptcy. Webster Capital alleges that it is entitled to damages in a total amount of $425,834.69, less any and all Plan payments made in Ottawa Bus's bankruptcy after May 3, 2013. The case is WEBSTER CAPITAL FINANCE, INC., f/k/a CENTER CAPITAL CORPORATION, Plaintiff, v. DANIEL NEWBY, et. al., Defendant, Case No. 12-2290-EFM (D. Kan.). A copy of the Court's Aug. 2, 2013 Memorandum and Order is available at http://is.gd/gHmxd1from Leagle.com. Olathe, Kansas-based Ottawa Bus Service, Inc., dba Crossroad Tours, filed for Chapter 11 bankruptcy (Bankr. D. Kan. Case No. 10-24011) on Nov. 22, 2010. Timothy E. Keck, Esq., at Arnold & Keck, served as the Debtor's counsel. In its petition, the Debtor estimated under $50,000 in assets and under $10 million in debts. PARADISE HOSPITALITY: Conversion Hearing Continued to Sept. 10 -------------------------------------------------------------- The Bankruptcy Court continued until Sept. 10, 2013, at 10:30 a.m., the hearing to consider a motion to convert the Chapter 11 case of Paradise Hospitality, Inc., to one under Chapter 7 of the Bankruptcy Code. The previous hearing was scheduled for Aug. 6. As reported in the Troubled Company Reporter on Aug. 6, 2013, the Debtor opposed the motion of RREF WB Acquisitions, LLC, to convert the Debtor's case. According to the Debtor, although it has not been able yet to sell its Shopping Center as RREF would prefer, the Debtor stands at the ready to afford the alternative treatment provided by the confirmed Plan. Further, the Debtor has in fact commenced distributions under the Plan, has assumed management of substantially all of the property dealt with by the plan, and had transferred substantially all of the property proposed by the Plan to be transferred. The Debtor said, "The only obstacle is the sale of the Shopping Center. However, since the Plan expressly provides an alternative treatment, the Reorganized Debtor has also complied with this last requirement since it need only transfer this Property as the Plan expressly provides." Pursuant to the confirmed Plan, RREF is to be paid from the proceeds of the sale of the Shopping Center. Alternatively, if the Debtor does not sell the shopping center, RREF is entitled to exercise its rights under State law after providing a new notice of default. Moreover, according to the Debtor, it is not in the best interests of creditors to convert the case to Chapter 7 as all of the creditors, except for RREF and possibly taxing authorities, stand to get nothing if the case is converted to Chapter 7. RREF's Motion to Convert was reported in the TCR on July 22, 2013. RREF argues that cause exists to convert the case because the Debtor has failed to substantially consummate its First Amended Chapter 11 Plan and is in material default of the Plan. Specifically, RREF cited, the Plan requires the reorganized debtor to sell its retail shopping center, the principal collateral securing the repayment of one of the reorganized debtor's two structured secured debts to RREF no later than 60 days after the Plan Effective Date. "That deadline has not passed, yet the reorganized debtor has not only not sold the shopping center but it has rejected at least one hard offer from a buyer to purchase the shopping center at an amount substantially above RREF's debt amount," RREF said. About Paradise Hospitality Based in Fullerton, California, Paradise Hospitality, Inc., owns a hotel located in Toledo, Ohio and a retail shopping center in El Dorado, Arkansas. The Debtor manages and operates the Hotel. Haydn Cutler company currently manages the Retail Center. The Company filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 11-24847) on Oct. 26, 2011, about three weeks after it lost the right to use the Crowne Plaza for its hotel. For now, the hotel has been renamed Plaza Hotel Downtown Toledo. Judge Erithe A. Smith presides over the case. Giovanni Orantes, Esq., at Orantes Law Firm, P.C., in Los Angeles, represents the Debtor as counsel. The Debtor disclosed $15,628,687 in assets and $21,430,333 in liabilities as of the Chapter 11 filing. The petition was signed by the Debtor's president, Dae In Kim, a Korean businessman who lives in southern California. PATRIOT COAL: Reaches Consensual Agreement with UMWA on CBAs ------------------------------------------------------------ Patriot Coal Corporation on Aug. 12 disclosed that its signatory subsidiaries have reached a consensual agreement with the United Mine Workers of America regarding their collective bargaining agreements and the provision of healthcare benefits for UMWA- represented retirees. "This represents the successful conclusion of a difficult negotiation in which both the UMWA leadership and Patriot management have invested many long days. Both parties want to preserve jobs and protect healthcare benefits for retirees by keeping Patriot on track for reorganization -- and not liquidation," said Patriot President and Chief Executive Officer Bennett K. Hatfield. "We appreciate the cooperation of the UMWA leadership and the sacrifices of all of our employees and retirees as we work to restore Patriot to viability." The UMWA will be reviewing the terms of the agreement with its membership this week as it prepares for a ratification vote. The Company will also be filing a motion with the Bankruptcy Court in St. Louis seeking authorization to enter into this agreement. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PATRIOT COAL: Vote on UMWA Settlement Scheduled for Aug. 16 ----------------------------------------------------------- The United Mine Workers of America on Aug. 12 disclosed that the union has reached a settlement with bankrupt Patriot Coal on new terms and conditions of employment that makes significant improvements over what federal Bankruptcy Judge Kathy Surratt- States ordered on May 29, and what Patriot implemented on July 1. "After several weeks of nearly around-the-clock negotiations, I believe we have reached something that can be taken to the membership for ratification," UMWA International President Cecil E. Roberts said. "We have been able to restore, or at least improve upon, many of the most drastic changes that the Judge ordered, including in the area of wages, health care benefits, paid time off, pensions, and more. In addition, we have negotiated a mechanism that will allow retiree health care benefits to continue." The vote will take place on Friday, Aug. 16. Some 1,800 active or laid-off members in West Virginia and Kentucky are eligible to vote. The union will not release details of the settlement until after those members have had a chance to hear its terms. Protest vs. Peabody After reaching a tentative settlement with Patriot Coal, thousands of active and retired members of the United Mine Workers of America (UMWA), along with labor and community supporters, will protest in front of Peabody Energy headquarters on today, August 13. Who: Mine workers and supporters, including: * UMWA Secretary Treasurer Dan Kane * American Federation of Teachers (AFT) President Randi Weingarten What: Rally and protest about Peabody's ongoing responsibility for health care for retired mines and their families When: Tuesday, August 13th 10 am (Central Time) Where: Kiener Plaza (across from Peabody Energy headquarters) 701 Market Street, Downtown St. Louis "We have reached a tentative settlement with Patriot Coal which will lessen the impact of severe cutbacks on active and retired miners, but as we've said all along, Patriot really is bankrupt and just does not have sufficient resources to pay for the contractual promises made to retired miners and their families by Peabody and Arch," said UMWA President Cecil Roberts. "We're back at Peabody because that's where this problem started. Executives at Peabody Energy created Patriot, they failed to give it enough assets to meet its obligations, and we're not going to sit idly by and let miners and their families pay the price." On July 30, more than 3,000 mine workers and supporters protested outside the headquarters of Arch Coal in Creve Coeur, Mo. Ten people were arrested in an act of civil disobedience. Arch Coal created Magnum Coal in 2005, loading up the new company with health care and retirement obligations. Patriot acquired Magnum in 2008. "Our bargaining team worked day and night to recover all we could from Patriot, but this fight is not over," UMWA Secretary Treasurer Dan Kane said. "Retired miners and their families are being shortchanged, even though Arch and Peabody are still profitable companies. It's just plain wrong to use a corporate shell game to deny workers the benefits they rightfully earned during a lifetime of labor in the coal mines. We're going to stay on this case until justice is done." UMWA members at Patriot will vote on the tentative agreement on Friday, August 16, with some 1,800 active or laid-off members in West Virginia and Kentucky eligible to vote. The union will not release details of the settlement until after those members have had a chance to hear its terms. The union is continuing its fight for retired miners and their families in the courts, in Congress and through community action. * A lawsuit on behalf of UMWA members, filed in West Virginia, charges that Peabody and Arch violated the federal Employment Retirement Income Security Act (ERISA) by scheming to eliminate contractually-guaranteed lifetime health care benefits for retirees. * The union is working with a bipartisan group of more than 20 U.S. representatives and senators from California, Indiana, Illinois, Kentucky, Massachusetts, Missouri, Ohio, Oklahoma, Pennsylvania, Virginia and West Virginia on legislation that will provide significant help to retired miners and widows whose health care is threatened. * UMWA members are conducting an ongoing public education and advertising campaign about issues facing active and retired mine workers and their families. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PATRIOT COAL: Agrees With DIP Lenders on Revised Deal ----------------------------------------------------- Law360 reported that Patriot Coal Corp. on Wednesday said it has reached a deal with its debtor-in-possession lenders to ease up on minimum earnings thresholds in order to avoid default, in light of the falling price and demand for metallurgical coal. According to the report, the St. Louis-based mining company told a Missouri bankruptcy court that it and the DIP lenders have come to an agreement on an amendment to a deal first floated on July 30, when it admitted that the company's third quarter earnings would likely fall short of levels required. 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 serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. 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. POWER VENTURES: Facebook Awarded $39K for Discovery, Legal Costs ---------------------------------------------------------------- In the lawsuit, FACEBOOK, INC., Plaintiff, v. POWER VENTURES, INC., et al., Defendants, Case No. 08-cv-05780-LHK (N.D. Calif.), Magistrate Judge Joseph C. Spero granted Facebook's request for fees and costs against the defendants in the amount of $39,796.73. The amount reflects the combined total of: (1) the costs of the videographer and court reporter services ($5,128.73); (2) the costs of the expedited, certified translations of untimely produced 74.6 gigabytes of data and Power's deposition ($660.00); and (3) attorneys' fees associated with the work of attorneys and paralegals to prepare for and undertake the renewed Fed.R.Civ.P. Rule 30(b)(6) deposition of Steven Suraj Vachani ($38,008.00). A copy of the Court's Aug. 7, 2013 Order is available at http://is.gd/pBx5mQfrom Leagle.com. Power Ventures, Inc., filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-32488) on Aug. 27, 2012, listing under $1 million in both assets and debts. The Debtor is represented by the Law Offices of Aleksandr A. Volkov -- volkoff@usa.net -- A copy of the Debtor's petition is available at http://bankrupt.com/misc/canb12-32488.pdf RAM OF EASTERN: Hires Howard Stallings as Real Estate Counsel ------------------------------------------------------------- RAM of Eastern North Carolina, LLC asks the U.S. Bankruptcy Court for permission to employ Howard, Stallings, From & Hutson, P.A. of New Bern, North Carolina, as special counsel. The Law Firm will be retained to assist the Debtor with the contracts, leases, and real estate transactions related to real estate development. The Debtor has chosen the Law Firm because it is experienced in these matters and is well qualified to perform the work required in this case. The Law Firm has assisted the Debtor in the past with real estate transactions. The Law Firm will charge at the hourly rate of $260 for its services. The Law Firm is currently owed around $1,098.79 in pre-Petition fees and understands that this claim will be paid pursuant to the Debtor's confirmed Plan of Reorganization along with the other general unsecured creditors. Beth F. Atkins, Esq. -- batkins@hsfh.com -- attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. In March, the Law Firm incurred post-Petition fees of $1,035.50 while assisting the Debtor with lease renewal terms with one of the Debtor's tenants. About RAM of Eastern North Carolina RAM of Eastern North Carolina, LLC, formerly Grantham Crossing, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-01125) in Wilson, North Carolina, on Feb. 21, 2013. The Debtor, which owns commercial and residential rental properties in Craven and Carteret Counties, North Carolina, disclosed $11.7 million in total assets and $7.70 million in total liabilities in its schedules. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as bankruptcy counsel to the Debtor. RESIDENTIAL CAPITAL: Borrower Class Says $57M Set-Aside Not Enough ------------------------------------------------------------------ Law360 reported that A class of residential mortgage borrowers on August 8 attacked Residential Capital LLC's Chapter 11 plan, saying it improperly aims to keep them from suing nondebtor entities and that the $57.6 million set aside for borrower claims isn't enough. In an objection to ResCap's disclosure statement, which is scheduled to be considered by U.S. Bankruptcy Judge Martin Glenn on Aug. 21, the borrowers said they planned to challenge the plan itself when the time comes, according to the report. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Disclosure Statement Objections Filed ---------------------------------------------------------- Karen Gullo & Joel Rosenblatt, writing for Bloomberg News, reported that Residential Capital LLC's disclosure statement for its reorganization was opposed by the U.S. Trustee, which oversees bankruptcy cases for the government. According to the report, the trustee said in a filing in U.S. Bankruptcy Court in Manhattan that the statement doesn't adequately describe the plan. Also, provisions of the plan contained in the disclosure statement include impermissible payments for the reimbursement of legal expenses of certain creditors, the trustee said. Unless the provisions at issue are removed, the plan "is not confirmable and neither the plan nor the disclosure statement may be approved," the trustee said in the filing, the report related. Last month, the bankrupt mortgage company filed a reorganization plan estimating unsecured creditors will recover about 36 percent of what they are owed, while debts backed by collateral will be paid in full. In the disclosure statement written to help creditors decide how to vote on the plan, the New York-based company provided recovery estimates for unsecured creditors owed $2.15 billion and junior secured noteholders owed $2.22 billion. Other Objections BankruptcyData reported that other parties -- including the Federal Home Loan Mortgage Corporation, the Federal Housing Finance Agency, the Pension Benefit Guaranty Corporation, Amherst Advisory & Management and the ad hoc group of junior secured noteholders -- filed with the U.S. Bankruptcy Court separate objections to Residential Capital's Joint Chapter 11 Plan of Reorganization. The noteholders state, "The Disclosure Statement, in its current form, fails to provide full and fair disclosure regarding critical aspects of the Global Settlement and Plan. It should not be approved by this Court until it is amended to remedy the deficiencies discussed herein. Confirmation of the Plan is predicated on the satisfaction of three key conditions: (i) resolution (by judgment or compromise) of the pending litigation prior to confirmation between the Plan Proponents and the JSNs regarding the JSNs' secured status and entitlement to post- petition interest; (ii) approval of the Global Settlement; and (iii) approval of, and issuance to Ally, of the Debtor Releases and the Third Party Releases in exchange for the Ally Contribution. The Disclosure Statement, in its current form, does not fully and fairly address any of these issues." The ad hoc group of junior secured noteholders filed with the Court a motion to file its objection under seal. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Freddie Mac Balks at Settlement With FGIC -------------------------------------------------------------- Joseph Checkler writing for Daily Bankruptcy Review reports that Freddie Mac says Residential Capital LLC's $596.5 million mortgage-backed securities settlement with the Financial Guaranty Insurance Co. would unfairly harm investors involved in FGIC's separate rehabilitation proceeding. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Seeks Exclusivity Period Extension ------------------------------------------------------- BankruptcyData reported that Residential Capital filed with the U.S. Bankruptcy Court a motion to extend the exclusive period during which the Company can file can file a Chapter 11 plan and solicit acceptances thereof through and including November 14, 2013 and January 14, 2014, respectively. BankruptcyData said the motion explains, "The Debtors have made remarkable progress toward confirmation of a Chapter 11 plan, and are prepared to drive that process to conclusion. Mr. Kruger, the Debtors and their advisors believe that it is appropriate under the unique facts of these cases to further extend exclusivity to allow the Debtors and the Creditors' Committee to prosecute the Plan through confirmation without the potential distraction of competing plans. Accordingly, the Debtors believe that a final extension of the Exclusive Periods is warranted and is in the best interests of these estates." About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). ROCK-TENN COMPANY: Moody's Changes Outlook on Ba1 CFR to Positive ----------------------------------------------------------------- Moody's Investor Service changed Rock-Tenn Company's outlook to positive from stable and raised the Speculative Grade Liquidity (SGL) rating to SGL-1 from SGL-2. Moody's also affirmed the company's Ba1 Corporate Family Rating, Ba1 senior unsecured rating and Ba1-PD Probability of Default Rating. The change in Rock- Tenn's outlook primarily recognizes the company's improving operating and financial performance and Moody's expectation of continued debt reduction. Issuer: Rock-Tenn Company Upgrades: Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Outlook Actions: Outlook, Changed To Positive from Stable Affirmations: Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 $350M 4.45% Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 $400M 4.9% Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 $350M 3.5% Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 $350M 4% Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 Rating Rationale: Rock-Tenn's Ba1 corporate family rating reflects the company's leading market position in corrugated and consumer packaging, improved operating and financial performance from the integration of the Smurfit-Stone Container Corporation acquisition and Rock- Tenn's excellent liquidity. Reduced debt, improved pricing, synergies and operational improvements have helped the company strengthen its credit protection metrics. The ratings are supported by Moody's expectation that Rock-Tenn will realize further synergies and operational improvements and will continue to reduce debt over the next 12-18 months. Partially offsetting these strengths are the highly competitive nature of the paper packaging industry and Moody's expectation that the company may pursue debt financed acquisitions that temporarily increase leverage. Rock-Tenn's SGL-1 liquidity rating indicates excellent liquidity supported by $42 million of cash (net of restricted cash), about $1.5 billion of aggregate availability (as of June 2013) through a $1.475 billion revolving credit facility that matures in September 2017 and a $700 million receivables based revolving loan that matures in December 2015 and Moody's expectations of approximately $500 million of free cash flow over the next four quarters. The company has debt maturities of $54 million over the next year and Moody's expects Rock-Tenn will remain in compliance with its financial covenants over the near term. The positive rating outlook primarily reflects Moody's expectation that Rock-Tenn will continue to improve its operating and financial performance, generating leverage metrics that will be strong for its rating. An upgrade will be considered if Moody's assessment of sustainable (RCF-CapEx)/Adjusted Debt is above 12% and adjusted debt to EBITDA below 3 times. Moody's would also require assurance that the financial policies of the new CEO will not pressure the company's leverage or liquidity with excessive dividend payouts, share buybacks or debt-financed acquisitions. A downgrade might be associated with deterioration in market demand or pricing. Should Moody's expectations of normalized (RCF-CapEx)/Adjusted Debt decline below 7% or total adjusted debt to EBITDA exceed 4 times, a downgrade would be considered. The principal methodology used in this rating was the Global Paper and Forest Products Industry Methodology published in September 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. Headquartered in Norcross, Georgia, Rock-Tenn Company is a leading North American integrated manufacturer of corrugated and consumer packaging with LTM June 2013 sales of $9.4 billion. ROGERS BANCSHARES: Has Court Permission to Auction Shares --------------------------------------------------------- Stephanie Gleason, writing for DBR Small Cap, reported that Rogers Bancshares Inc., the holding company for Arkansas-based Metropolitan National Bank, received bankruptcy-court approval to sell its shares at auction, with bidding kicked off by a $16 million offer from a Ford Financial Fund II LP affiliate. Rogers filed for Chapter 11 relief (Bankr. E.D. Ark. Case No. 13- bk-13838) on July 5 in Little Rock. Rogers owes $41.3 million on three issues of junior subordinated debentures and $39.6 million on four issues of preferred stock, as reported by the TCR on July 10, 2013. ROTECH HEALTHCARE: Equity Holders Object to Chapter 11 Plan ----------------------------------------------------------- Law360 reported that equity holders of Rotech Healthcare Inc. tore into the medical equipment provider's Chapter 11 plan, saying the proposed reorganization discriminates against shareholders and was not developed in good faith. According to the report, filed in Delaware bankruptcy court by the official committee of equity security holders, the objection claims shareholders are being squeezed out under the plan being pushed by, and for the benefit of, Rotech's second-lien noteholders. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Employs GA Keen as Real Estate Advisor --------------------------------------------------------- Rotech Healthcare Inc. and its debtor affiliates sought and obtained authority from Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware to employ GA Keen Realty Advisors, LLC, as real estate advisor. Mark P. Naughton assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTHSTEIN ROSENFELDT: Ch.11 Trustee's Suit Against Gov't Barred --------------------------------------------------------------- District Judge Robin S. Rosenbaum held that the Bankruptcy Court properly found that Herbert Stettin, the Chapter 11 Trustee for Rothstein Rosenfeldt Adler P.A., is precluded from bringing an independent fraudulent-transfer action against the U.S. Government outside of the ancillary proceedings to criminal forfeiture. In 2009, Scott Rothstein pled guilty to RICO violations, money laundering, and other crimes associated with an elaborate Ponzi scheme in a criminal case before the Honorable James I. Cohn. As a result of the collapse of the Ponzi scheme, Mr. Rothstein's law firm, Rothstein Rosenfeldt Adler, was placed into involuntary bankruptcy proceedings before the Honorable Raymond B. Ray in the Bankruptcy Court. Mr. Stettin was appointed Chapter 11 Trustee of the RRA estate. On May 29, 2009, prior to the collapse of the Ponzi scheme, Mr. Rothstein transferred $301,000 from an RRA bank account to fund the purchase of a home for Joseph and Jody Alu in Fort Lauderdale, Florida. Joseph Alu was the personal bodyguard of Mr. Rothstein's wife, Kim Rothstein. This $301,000 was secured with a promissory note and mortgage on the property. However, the note and mortgage were executed not in favor of RRA, from which the funds nominally flowed, but rather, in favor of Fifth Court Financial LLC, an entity created at the time of the transfer whose ultimate ownership rested with Mr. Rothstein. During ancillary proceedings to the criminal forfeiture before Judge Cohn, the Chapter 11 Trustee asserted an interest in assets forfeited by the Government, including both the RRA account from which the $301,000 was initially transferred and Fifth Court. Judge Cohn's Final Order of Forfeiture excluded the RRA account from forfeiture to the United States. However, Fifth Court and all assets held by or owed to it were forfeited to the United States. The Chapter 11 Trustee appealed the Final Order of Forfeiture and related rulings to the Eleventh Circuit Court of Appeals. The Eleventh Circuit vacated and remanded the District Court's decision. The Eleventh Circuit vacated the forfeiture of RRA bank accounts containing commingled proceeds of Rothstein's crime and untainted funds, finding that the District Court instead should have applied the applicable substitute-property provisions of criminal-forfeiture law. Because the Government proceeded with forfeiture in personam, as opposed to in rem, however, the Eleventh Circuit explained that, in pursuing substitute assets, the Government may seek to forfeit only a property interest held individually by Mr. Rothstein, such as his shareholder's interest in RRA, and, thus, its bank accounts. But, the court cautioned, should the Government wish to proceed in this manner, the District Court may, at most, order Mr. Rothstein to assign his interest to the Government, subject to any claims that third parties might have. Then the Government, standing in Mr. Rothstein's shoes, may appear in the bankruptcy proceedings and state a claim to Mr. Rothstein's share of law-firm assets that survive bankruptcy. Significantly, the District Court may not directly award Mr. Rothstein's financial share of RRA's firm to the Government because the Court does not have in rem jurisdiction over that interest since the Government elected to proceed against Mr. Rothstein in personam on the forfeiture. In addition, with regard to Fifth Court and other properties that the Chapter 11 Trustee alleged had been purchased with funds from the RRA bank accounts, the Eleventh Circuit remanded the matter to the District Court to make factual findings about whether, in fact, the properties were bought using RRA bank-account funds. The court noted that "[i]f the funds used to acquire the other properties came from one or more RRA bank accounts, the Chapter 11 Trustee prevails as a matter of law since the funds consisted of proceeds commingled with legitimate RRA funds and, as such, were not forfeitable as proceeds." The present case, however, stems from the Chapter 11 Trustee's separate adversary complaint in Bankruptcy Court concerning the funds transferred from the RRA account and ultimately secured by a note and mortgage in favor of Fifth Court -- funds subject to additional proceedings on remand in the ancillary forfeiture matter. In Bankruptcy Court, the Chapter 11 Trustee alleged that the transfer from the RRA account was fraudulent, seeking to avoid and recover the transfer under Bankruptcy Code 11 U.S.C. Sec. 548(a)(1)(A) and Sec. 726.105(1)(1), Fla. Stat. In addition, the Chapter 11 Trustee asserted that the note and mortgage in favor of Fifth Court were invalid and unenforceable because Fifth Court did not provide consideration for the mortgage. During the course of the proceedings, the Alus interpled funds with the Bankruptcy Court to fully satisfy and discharge the mortgage on their home. Thus, the issue before the Bankruptcy Court was essentially whether the interpled funds were owed to the United States, as successor in interest to Fifth Court, or to the Trustee and the RRA estate. The Bankruptcy Court entered summary judgment in favor of the United States, finding that the Chapter 11 Trustee had attempted to assert rights that could be properly asserted only through ancillary proceedings to criminal forfeiture. The Chapter 11 Trustee appeals that judgment. According to Judge Rosenbaum, the Chapter 11 Trustee participated in the ancillary forfeiture proceedings and successfully appealed the resulting decision. The implications on the bankruptcy proceedings of the Eleventh Circuit's remand of the forfeiture proceedings will not be clear until Judge Cohn has the opportunity to determine whether Fifth Court was properly forfeited. Because of the intervening Eleventh Circuit decision remanding the matter to the District Court for additional ancillary forfeiture proceedings, the Chapter 11 Trustee's bankruptcy claim regarding Fifth Court is not ripe at this time. Accordingly, the appeal must be dismissed. The case, HERBERT STETTIN, Appellant, v. UNITED STATES OF AMERICA, as successor in interest to FIFTH COURT FINANCIAL, LLC, Appellee, Case No. 12-62193-CIV (S.D. Fla.). A copy of the Court's Aug. 6, 2013 Opinion and Order is available at http://is.gd/1FcG8hfrom Leagle.com. Herbert Stettin is represented by Paul A. Avron, Esq., Isaac Meyer Marcushamer, Esq., and Paul Steven Singerman, Esq., at Berger Singerman LLP. United States of America successor to Fifth Court Financial LLC, Appellee, is represented by Evelyn Baltodano-Sheehan, United States Attorney's Office; and Maureen Donlan, United States Attorney's Office. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. RRA won approval of an amended liquidating Chapter 11 plan pursuant to the Court's July 17, 2013 confirmation order. The revised plan, filed in May, is centered around a $72.4 million settlement payment from TD Bank NA. RURAL/METRO: Section 341(a) Meeting Scheduled for Sept. 12 ---------------------------------------------------------- A meeting of creditors in the bankruptcy case of Rural/Metro Corporation, et al., will be held on Sept. 12, 2013, at 1:00 p.m. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com-- is a national provider of 911- emergency and non-emergency interfacility ambulance services and private fire protection services, operating in 21 states and nearly 700 communities. Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District of Delaware. The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq., Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' local Delaware counsel. Alvarez & Marsal Healthcare Industry Group, LLC, and FTI Consulting, Inc., are the Debtors' financial advisors, while Lazard Freres & Co. L.L.C. is their investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims and noticing agent. S. WHITE TRANSPORTATION: Acceptance's Lien Survived Confirmation ---------------------------------------------------------------- The United States Court of Appeals, Fifth Circuit, affirmed a lower court ruling that a lien on S. White Transportation, Inc.'s principal asset held by Acceptance Loan Co. survived confirmation of a Chapter 11 bankruptcy reorganization plan. S. White appealed the district court decision. The appellate case is ACCEPTANCE LOAN COMPANY, INCORPORATED, Appellee, v. S. WHITE TRANSPORTATION, INCORPORATED, Appellant, No. 12-60648 (5th Cir.). A copy of the Fifth Circuit's Aug. 5 decision, penned by Circuit Judge Edith Brown Clement, is available at http://is.gd/wnznWxfrom Leagle.com. S. White Transportation, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 10-51137) on May 17, 2010. A plan was confirmed in the Debtor's case on Dec. 21, 2010. SAGINAW COUNTY: Calls Off Planned $60MM Bond Sale ------------------------------------------------- Law360 reported that Michigan's Saginaw County has called off a planned $60 million bond offering that was scheduled for August 8, in an indication that Detroit's unprecedented Chapter 9 case is having reverberating effects on the municipal bond market across the state. The Saginaw offering's underwriter, Cincinnati-based Fifth Third Bank, confirmed that the planned bond sale was off, fueling speculation that potential investors have been spooked by Detroit emergency financial manager Kevyn Orr's warning that some Detroit debt holders could see just pennies on the dollar in terms of recovery, the report said. SCHOOL SPECIALTY: Creditors Out to Nix 'Make-Whole' Interest ------------------------------------------------------------ Law360 reported that creditors of reorganized School Specialty Inc. sought to force private equity lender Bayside Finance LLC to accept payment in full on a $23.7 million "make-whole" penalty, contending the firm has refused repayment in order to keep receiving interest while the matter is under appeal. According to the report, replying to Bayside's objection, School Specialty's official committee of unsecured creditors -- which in April lost its challenge of the make-whole claim -- urged a Delaware bankruptcy judge to order the firm to take full payment. About School Specialty Based in Greenville, Wisconsin, School Specialty is a supplier of educational products for kindergarten through 12th grade. Revenue in 2012 was $731.9 million through sales to 70% of the country's 130,000 schools. School Specialty and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead Case No. 13-10125) on Jan. 28, 2013. The petition estimated assets of $494.5 million and debt of $394.6 million. The Debtors are represented by lawyers at Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. Alvarez & Marsal North America LLC is the restructuring advisor and Perella Weinberg Partners LP is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The ABL Lenders are represented by lawyers at Goldberg Kohn and Richards, Layton and Finger, P.A. The Ad Hoc DIP Lenders led by U.S. Bank are represented by lawyers at Stroock & Stroock & Lavan LLP, and Duane Morris LLP. The lending consortium consists of some of the holders of School Specialty Inc.'s 3.75% Convertible Subordinated Notes Due 2026. The Official Committee of Unsecured Creditors appointed in the case is represented by lawyers at Brown Rudnick LLP and Venable LLP. Bayside is represented by Pepper Hamilton LLP and Akin Gump Strauss Hauer & Feld LLP. School Specialty in April 2013 decided to reorganize rather than sell. The company filed a so-called dual track plan that called for selling the business at auction on May 8 or reorganizing while giving stock to lenders and unsecured creditors. The company later served a notice that the auction was canceled and the plan would proceed by swapping debt for stock to be owned by lenders, noteholders, and unsecured creditors. SELECT TREE: Sec. 341 Creditors' Meeting Continued to Nov. 18 ------------------------------------------------------------- The U.S. Trustee continued the meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of Select Tree Farms, Inc. on Nov. 18, 2013, at 2:00 p.m. The meeting will be held at J Buffalo UST - Olympic Towers. Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms scheduled $11,450,989 in assets and $5,959,983 in liabilities. The petition was signed by George A. Schichtel, president. The Debtor's owner, George A. Schichtel and Debra G. Schichtel, filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y. Case No. 12-10670). Ms. Schichtel suffered a stroke around October 2012 and became comatose and was intubated. She passed away Nov. 14, 2012. Judge Carl L. Bucki presides over the case. William F. Savino, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP, serve as the Debtors' counsel. NextPoint LLC serves as the Debtors' financial advisor. Garry M. Graber, Esq., and Steven W. Wells, Esq., at Hodgson Russ LLP, represent Evans Bank, N.A., the primary secured creditor. SIONIX CORP: Board Approves Change of Accounting Firm ----------------------------------------------------- Sionix Corporation has amended its report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 24, 2013, to reflect the approval by the Company's Board of Directors of the Change in the Company's certifying accountant. On July 18, 2013, Sionix notified Kabani & Company, Inc., Certified Public Accountants, that it was dismissed as the Company's independent registered public accounting firm. The reports of Kabani on the Company's financial statements as of and for the years ended Sept. 30, 2012, and 2011 contained explanatory paragraphs which noted that there was substantial doubt as to the Company's ability to continue as a going concern because the Company had suffered recurring losses and negative cash flow from operations. The Company engaged Rothstein Kass as its independent registered public accounting firm for the Company's fiscal year ended Sept. 30, 2013. The Company determined it was advisable to change to Rothstein Kass, a Dallas, Texas based accounting firm, in connection with the previous relocation of the Company's executive offices to Texas. About Sionix Corp. Los Angeles, Calif.-based Sionix Corporation designs, develops, markets and sells cost-effective water management and treatment solutions intended for use in the oil and gas, agriculture, disaster relief, and municipal (both potable and wastewater) markets. Sionix incurred a net loss of $5.76 million for the year ended Sept. 30, 2012, compared with a net loss of $6.30 million during the prior year. The Company's balance sheet at March 31, 2013, showed $1.01 million in total assets, $8.95 million in total liabilities and a $7.93 million total stockholders' deficit. Kabani & Company, Inc., in Los Angeles, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred cumulative losses of $37,560,000. In addition, the company has had negative cash flow from operations for the years ended Sept. 30, 2012, of $2,568,383. These factors raise substantial doubt about the Company's ability to continue as a going concern. SOUTHERN FILM: Section 341(a) Meeting Slated for Aug. 29 -------------------------------------------------------- A meeting of creditors in the bankruptcy case of Southern Film Extruders, Inc., will be held on Aug. 29, 2013, at 10:00 a.m. at Creditors Mtg Room, Greensboro. Creditors have until Nov. 27, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Southern Film Southern Film Extruders, Inc., filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-11026) on Aug. 4, 2013. John L. Barnes, Jr., signed the petition as vice president. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Charles M. Ivey, III, Esq., at IVEY, MCCLELLAN, GATTON, & TALCOTT, LLP, represents the Debtor as counsel. SOUTHERN MONTANA: Restructuring Plan Likely to be Confirmed ----------------------------------------------------------- Law360 reported that Southern Montana Electric Generation & Transmission Cooperative Inc. will not have to convert its Chapter 11 plan into a Chapter 7 liquidation, because its restructuring plan is likely to be confirmed, a Montana bankruptcy judge ruled August 7. The creditors committee in June filed to move Southern Montana Electric Generation & Transmission Cooperative Inc. from Chapter 11 reorganization into a Chapter 7 liquidation, just after the power company closed a deal with its primary remaining customer, netting it payments of $2.5 million and $1.4 million for May and June, Law360 said. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana, represents the Unsecured Creditors' Committee as counsel. SPECTRUM BRANDS: S&P Raises CCR to 'B+' & Rates $1.1BB Loan 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Madison, Wis.-based Spectrum Brands Inc. to 'B+' from 'B'. The outlook is stable. At the same time, S&P assigned a 'BB' issue rating and '1' recovery rating to the proposed senior secured term loan, which includes a four-year $700 million tranche and a six-year $400 million tranche. The '1' recovery rating indicates S&P's expectation of very high recovery (90% to 100%) for senior secured lenders in the event of a payment default. In addition, S&P raised the issue ratings on the existing senior secured debt -- including the existing senior secured term loan due 2019 -- to 'BB' from 'B', and revised the recovery rating to '1' from '3'. S&P will withdraw the issue rating on the 9.5% senior secured notes upon full repayment of the notes. S&P also raised the issue rating on the senior unsecured notes -- including the 6.75% $300 million notes, the 6.375% $520 million notes, and the 6.625% $570 million notes -- to 'B' from 'B-'. The recovery rating remains '5', indicating S&P's expectation for modest recovery (10% to 30%) for senior unsecured noteholders in the event of a payment default. The upgrade of Spectrum Brands reflects the company's continued debt reduction, the solid performance from recently acquired hardware and home improvement group (HHI) of Stanley Black & Decker Inc., and the estimated $50 million of interest expense savings from the proposed refinancing. "We now forecast cumulative free cash flow of between $550 million and $600 million during 2013 and 2014," said Standard & Poor's credit analyst Brian Milligan. "We continue to believe the company will direct a significant portion of free cash flow towards accelerated debt reduction." The stable outlook reflects S&P's expectation for adjusted EBITDA growth of about 15% and debt reduction of more than $250 million to reduce leverage to the low-4x area during fiscal 2014. TITAN ENERGY: Amends First Quarter Form 10-Q -------------------------------------------- Titan Energy Worldwide, Inc., filed an amendment to its quarterly report on Form 10-Q for the period ended March 31, 2013, to revise Footnote 1 - Going Concern and the Liquidity and Capital Resources included in Management Discussion and Analysis, as originally filed with the U.S. Securities and Exchange Commission on May 22, 2013. Not conforming to the Regulation S-X Rule 8-03, the Company's interim financial statements included in the Quarterly Report have not been reviewed by an independent public accountant with professional standards for conducting those reviews. The review was not completed due to the cost and availability of cash required to pay past due fees owed to the Company's independent accountant. The Company believes this is a temporary situation and will request the independent public accountants to complete the review when the Company's liquidity position improves and the Company has completed a payment arrangement. Upon the completion of the review of the Company's condensed sonsolidated financial statements for the period ended March 31, 2013, the Company will file a further amendment to the Form 10-Q. A copy of the amended Form 10-Q is available for free at: http://is.gd/q0BstA About Titan Energy New Hudson, Mich.-based Titan Energy Worldwide, Inc., is a provider of onsite power generation, energy management and energy efficiency products and services. Titan Energy disclosed a net loss of $1.43 million on $19.15 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.43 million on $14.06 million of net sales for the year ended Dec. 31, 2011. As of June 30, 2013, the Company had $5.76 million in total assets, $9.48 million in total liabilities and a $3.71 million total stockholders' deficit. Going Concern The Company believes it will be profitable for the year 2013 and is in the process of restructuring its balance sheet. However the Company said that until it is successful in completing these items, the accumulated deficit and the notes that are in default raise substantial doubt as to the Company's ability to continue as a going concern. Management has taken these steps that it believes will be sufficient to provide the Company with the ability to continue its operations: "Management has entered into an agreement with Forefront Capital to raise up to $5 million on a best efforts basis. While there is no guarantee that these efforts will result in any new capital for the Company, these potential funds would have a significant impact on the Company's ability to restructure its debt and improve its cash flow. Management has been successful in having the majority of the Convertible Notes extend their due date to July 1, 2014. These extensions were achieved to allow the Company the time to complete its restructuring of the balance sheets. These note holders will convert their notes and accrued interest into equity if the item above is successful. Management will continue to take steps to expand and increase its service sales and work order flow. Service sales account for the highest margins of any business segment and the quickest turnaround in terms of customer payments. Management will seek to either restructure or replace its existing factoring agreement with either an asset based or bank line of credit before the end of the year 2013. Management believes the company is eligible for a lower cost lending facility and that this could save the Company up to $300,000 a year in interest and fees." The Company's interim financial statements for the period ended June 30, 2013, have not been reviewed by an independent public accountant with professional standards for conducting those reviews, as established by generally accepted auditing standards, as may be modified or supplemented by the Securities and Exchange Commission. The review was not completed due to the cost and availability of cash required to pay past due fees owed to the Company's independent accountant. TM REAL ESTATE: Can Employ Fox Rothschild as Bankruptcy Counsel --------------------------------------------------------------- TM Real Estate Holding LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Fox Rothschild LLP as general bankruptcy counsel. The firm, will among other things, provide these services: a. assisting, advising and representing the Debtors and Debtorsin-Possession in the administration of their bankruptcy estates; b. assisting, advising and representing the Debtors and Debtorsin-Possession in analyzing their assets and liabilities and investigating the extent and validity of alleged liens; and c. attending meetings and negotiating with the representatives of the Debtors' lenders, lessors, creditors and other parties in interest. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Proposed attorneys for the Debtor can be reached at: Yann Geron, Esq. Kathleen Aiello, Esq. FOX ROTHSCHILD, LLP 100 Park Avenue, 15th Floor New York, NY 10017 Tel: (212) 878-7900 Fax: (212) 692-0940 E-mail: ygeron@foxrothschild.com kaiello@foxrothschild.com TM Real Estate Holding LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44046) on June 28, 2013. Judge Carla E. Craig presides over the case. The Debtor scheduled assets of $10,900,000 and liabilities of $10,497,264. The petition was signed by John Noce, manager. TOURO INFIRMARY: S&P Raises Rating on 2 Bonds From 'BB+' -------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term rating to 'BBB' from 'BB+' on Louisiana Public Facilities Authority's series 1993 and 1999 bonds, issued for Touro Infirmary. The outlook is stable. "The rating upgrade reflects our view of Touro's improving financial position due to its robust fiscal 2012 operating margin and the corresponding improvement in balance sheet metrics, which were supported by a substantial and higher-than-budgeted increase in Medicaid Upper Payment Limit funding," said Standard & Poor's credit analyst Karl Propst. "It also reflects our opinion of the system affiliation agreement signed with Children's Hospital in New Orleans, under which Touro has received financial support for its capital spending needs as well as other benefits," continued Mr. Propst. Children's debt is rated AA-/Stable. Specifically, the 'BBB' rating reflects S&P's opinion of: -- Touro's growing patient volumes and third consecutive year of operating profitability, which is supported by a significant increase in supplemental Upper Payment Limit (UPL) funding; -- Solid maximum annual debt service (MADS) coverage of 5.1x (3.8x on an operating lease-adjusted basis) as of fiscal year end 2012 and management's expectation of much higher MADS at fiscal year end 2013 based on the additional UPL; and -- Improved balance sheet, highlighted by moderating leverage and increases in days' cash and in cash to long-term debt metrics. On Dec. 31, 2012, Touro had $72.6 million of long-term debt outstanding. TPO HESS: 1st Amended Joint Liquidation Plan Declared Effective --------------------------------------------------------------- TPO Hess Holdings, Inc., et al., notified the U.S. Bankruptcy Court for the District of Delaware that the Effective Date of First Amended Joint Plan of Liquidation occurred on Aug. 5, 2013. On July 24, the Court issued an order authorizing the sale of substantially all of the Debtors' assets to Bang Printing of Ohio Inc., the highest and best bidder, pursuant to an asset purchase agreement dated May 17, 2013. The Court also confirmed the Debtors' Amended Plan. As reported in the Troubled Company Reporter on June 28, 2013, the Debtors' Prepackaged Plan provides for the distribution of proceeds of a sale of substantially all of the Debtors' assets. The Debtors believe that their secured lenders are the only parties that are impaired, and who are entitled to a distribution under the Plan. As reported in the TCR on May 23, 2013, the prepackaged plan will be financed by a sale of the business for $19.3 million to Bang Printing of Ohio Inc. A copy of the Prepackaged Plan is available for free at http://bankrupt.com/misc/TPOHESS_plan.pdf About TPO Hess Commercial and educational printer TPO Hess Holdings Inc., D.B. Hess Co., The Press of Ohio and other affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11327) on May 22, 2013, to seek approval of a liquidation plan that contemplates the sale of the business to Bang Printing of Ohio Inc., absent higher and better offers. D.B. Hess was founded 1797 in Woodstock, Illinois. D.B. Hess and its affiliates are now leading provider of print, related services, and technology. Hess ranks among the top 50 U.S. printers and has become one of the industry's most respected low- to-medium volume producers of commercial and educational materials. Hess Holdings, the ultimate parent, was formed after Wellspring Capital Management LLC and certain co-investors acquired D.B. Hess and The Press of Ohio in 2006. The proposed purchaser, Bang Printing Of Ohio, Inc., is represented by Leonard, Street and Deinard. Pauline K. Morgan, Esq. at Young Conaway Stargatt & Taylor, LLP, and Paul Weiss Rifkind Wharton Garrison, LLP, represent the Debtors as counsel, Epiq Bankruptcy Solutions as claims and noticing agent, and Houlihan Lokey as financial advisor. Holders of $74 million in second-lien notes had already unanimously accepted the plan where they would receive $1.5 million, or a 2 percent recovery. First-lien debt of $11.9 million is to be paid in full. Unsecured creditors with $20 million in claims didn't vote on the plan because they are to receive nothing. TRIBUNE CO: Litigation Trustee Amends Two Complaints Over 2007 LBO ------------------------------------------------------------------ On August 1, 2013, Marc S. Kirschner, Litigation Trustee to the Tribune Litigation Trust, amended two complaints that were originally drafted and filed by the Tribune Committee of Unsecured Creditors seeking to undo some of the billion of damages caused by the failed leveraged buyout of the Tribune Company in 2007. The immensely leveraged transaction piled debt upon an already struggling Tribune -- one of America's most venerable media companies -- resulting in massive job cuts and huge losses for Tribune's creditors. Less than a year after the closing of the LBO, Tribune filed for bankruptcy. The amended complaints, part of a multi-district litigation currently consolidated before Judge Richard J. Sullivan in the United States District Court for the Southern District of New York, contain a thorough overhaul of the factual allegations set forth in the prior complaints and reflect the significant development of the factual record since the complaints were originally filed by the Committee. The Two Complaints The complaint captioned Kirschner v. FitzSimons seeks to hold responsible the directors, controlling shareholders and officers of Tribune who arranged and consented to the disastrous LBO, Sam Zell and his Equity Group Investments vehicles that arranged, financed, and benefitted from the buyout, the shareholders who were cashed out using debt incurred by Tribune, and the advisors that blessed the doomed transaction. As one of Tribune's directors and representative of its largest shareholder put it: "what the Trusts saw [leading up to the LBO] was a four-star black-diamond run headed straight downhill . . . we wanted off the ski slope." A representative of Tribune's second largest shareholder, on the day that the LBO was approved, remarked that "God understands, but may not forgive us for what we are bout do do to good Olde TRB. [sic]" The FitzSimons complaint now includes thirty six counts alleging breaches of fiduciary duties, intentional fraudulent transfers, preference and other avoidance claims, equitable subordination and disallowance, professional malpractice, fraud, insider trading, and breach of contract. The complaint captioned Kirschner v. Citigroup, on the other hand, is targeted at the banks who advised Tribune to burden itself with enormous amounts of debt used to fund the buyout despite their own deep concerns that the company would no longer be solvent. One of Citigroup's Managing Directors remarked internally just a week before the LBO's approval that she was "still extremely uncomfortable with Zell. . . . Declining ebitda is scary. Until yesterday I did not know that Q1 cash flow was down 20 from last year. . . . I'm very concerned." Despite those serious reservations, Citi recommended that the LBO go forward. . The Citigroup complaint charges Merrill Lynch and Citigroup with aiding and abetting breaches of fiduciary duties, professional malpractice, and seeks to avoid and recover the fees paid to them as fraudulent transfers under the Bankruptcy Code. The Litigation Trustee has stated that "the amended complaints contain overwhelming evidence that Tribune's management and Board of directors, acting at the behest of its largest shareholders and Sam Zell, and with the complicity of its many advisers, engaged in a massive scheme intentionally to hinder, delay and defraud Tribune's creditors." The Litigation Trustee is represented by Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Friedman Kaplan Seiler & Adelman LLP, and Akin Gump Strauss Hauer & Feld LLP. To read the First Amended Complaint, please click here. To read the Fifth Amended Complaint, please click here. For further information relating to the FitzSimons action, or the recent amendment to that complaint, please contact David Zensky, of Akin Gump Strauss Hauer & Feld LLP, at 212- 872-1075 or dzensky@akingump.com For further information relating to the Citigroup action, or the recent amendment to that complaint, please contact Robert Lack, of Friedman Kaplan Seiler & Adelman LLP, at 973-877-6408 or rlack@fklaw.com The amended complaints and more information about the Tribune Litigation Trust can be found at http://www.tribunetrustlitigation.com About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TRINITY COAL: Delays Auction of Mine Operations ----------------------------------------------- Law360 reported that a Kentucky bankruptcy judge approved a bid by Trinity Coal Corp. to hold off on a planned auction for its mining operations in West Virginia and Kentucky, while the company engages in discussions with its parent about a possible $103 million restructuring plan. According to the report, U.S. Bankruptcy Judge Tracey N. Wise ordered the maturity date under Trinity's debtor-in-possession credit agreement to be pushed back until the end of November, and authorized the miner to borrow an additional $7 million from the revolving DIP lenders. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as local counsel to the Official Committee of Unsecured Creditors. TRINITY COAL: Judge Clears Co. to Pursue Restructuring Plan ----------------------------------------------------------- Katy Stech, writing for DBR Small Cap, reported that a bankruptcy judge allowed struggling Trinity Coal Corp. to halt the bankruptcy auction process for its Appalachian coal mining operations so that executives and the company's owners have time to negotiate a $103 million debt-repayment deal instead. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as local counsel to the Official Committee of Unsecured Creditors. VS FOX: U.S. Trustee Seeks Chapter 7 Conversion of Cases -------------------------------------------------------- David L. Miller, the Chapter 11 trustee of VS Fox Ridge, LLC, et al., seeks conversion of each of the Debtors' Chapter 11 bankruptcy cases into proceedings under Chapter 7. The Trustee believes the conversion of the cases is in the best interest of the estates and their creditors as he already has sold the vast majority of the Debtors' assets and thus, there is little to no additional positive revenue that can be generated for either estate. While there may be additional assets that can generate cash for the Estates (through litigation or sale), those assets can be liquidated just as easily under Chapter 7, the Trustee says. By contrast, charges and costs, including, in particular, administrative costs, which includes the cost of preparing and filing monthly Chapter 11 operating reports, will continue to accrue, the Trustee points out. Likewise, the Trustee says, there is no reasonable chance of "rehabilitation" of either of the Debtors in these Bankruptcy Cases because the Trustee has sold substantially all of the Debtors' assets, and the Debtors have no continuing business operations. The Court will convene a hearing on Aug. 19, 2013, at 10:00 a.m. to consider the U.S. Trustee's request. Michael R. Johnson, Esq., and David H. Leigh, Esq., of Ray Quinney & Nebeker P.C., serve as counsel for the Chapter 11 trustee. About VS Fox Ridge VS Fox Ridge, LLC, filed a Chapter 11 petition (Bankr. D. Utah Case No. 12-28001) in Salt Lake City on June 20, 2012. Alpine, Utah-based VS Fox Ridge scheduled $95,600,103 in assets and $27,814,802 in liabilities. Equity owners Stephen and Victoria Christensen simultaneously sought Chapter 11 protection (Case No. 12-28010). Ray Quinney & Nebeker P.C. serves as general bankruptcy and litigation counsel for David L. Miller, the duly appointed trustee of the jointly-administered Chapter 11 bankruptcy estates of VS Fox Ridge, LLC, and Stephen Lamar Christensen and Victoria Ann Christensen. Judge Joel T. Marker presides over the case. The petition was signed by Stephen Christensen, manager. WARREN RESOURCES: Moody's Withdraws CFR and Sr. Notes Rating ------------------------------------------------------------ Moody's Investors Service withdrew all ratings assigned to Warren Resources, Inc. and its proposed $200 million senior notes due 2021. The senior notes offering was not completed. Ratings withdrawn: Issuer: Warren Resources, Inc. B3 Corporate Family Rating B3-PD Probability of Default Rating SGL-2 Speculative Grade Liquidity Rating Caa1, LGD4, 65% Senior Unsecured Regular Bond/Debenture Rating outlook withdrawn WILLBROS GROUP: Moody's Assigns 'B3' CFR Following Refinancing -------------------------------------------------------------- Moody's assigns B3 Corporate Family Rating, B3-PD Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating to Willbros Group, Inc. following successful refinancing of its term loan and revolving credit facility. Simultaneously, Moody's withdrew the B3 CFR and B3-PD PDR, and SGL-3 Speculative Grade Liquidity Rating at Willbros United States Holdings. The rating assignments reflect the change in the contemplated borrower under the term loan to Willbros Group, Inc. from Willbros United States Holdings. All other ratings remain unchanged. Ratings Rationale: Willbros' B3 corporate family rating reflects its small size, poor margins, weak short-term backlog, exposure to highly competitive and cyclical end markets and track record of inconsistent project execution. The company continues to struggle to generate consistent profitability and has very weak EBITA margins due to the competitive nature of the engineering and construction industry, periodic execution and productivity issues and its inability to effectively execute its growth strategy. Willbros rating is supported by its moderate leverage, segment diversity, and exposure to end markets with positive long-term prospects and the significantly improved debt maturity and liquidity profile that is expected to result from the proposed refinancing. The company will be extending its closest debt maturity by four years and significantly improving its liquidity position. The principal methodology used in this rating was the Global Construction Industry Methodology published in November 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. Willbros United States Holdings, Inc. is a wholly-owned subsidiary of publicly traded Willbros Group, Inc and is headquartered in Houston, Texas. The company provides engineering and construction (E&C) services to the oil, gas and power industries primarily in North America. Willbros reports its results in three segments: Oil & Gas (63% of revenues; 27% of backlog) is focused on the U.S. market and specializes in pipelines and associated facilities and provides maintenance and turnaround services for refineries; Utility T&D (26%; 57%) provides end-to-end infrastructure construction services, primarily for the electric and natural gas utility end-markets; and Canada (11%; 16%) provides E&C services to the oil sands industry. Willbros' revenue for the 12 months ending March 31, 2013 was $2.1 billion and its backlog totaled $2.0 billion, of which $880 million was expected to be realized over the next twelve months. Approximately 80% of Willbros' backlog is in the US and 20% in Canada. WILLBROS GROUP: S&P Revises Outlook to Stable & Affirms 'B-' CCR ---------------------------------------------------------------- Standard & Poor's Rating Services revised its rating outlook on Willbros Group Inc. to stable from negative. At the same time, S&P affirmed the ratings on the company, including the 'B-' corporate credit rating. "The outlook revision reflects the company's recent refinancing, alleviating pressure from previously upcoming debt maturities," said Standard & Poor's credit analyst Robyn Shapiro. "We also expect that improving operating performance will enable the company to generate moderate free cash flow." The rating on Willbros reflects our assessment of the company's "highly leveraged" financial risk profile and "vulnerable" business risk profile. Willbros provides engineering, construction, turnaround, maintenance, life-cycle extension, facilities development, and operations services to industry and government entities globally in the oil, gas, power, refining, and petrochemical industries. The rating incorporates the inherent cyclicality of the engineering and construction services sector in which Willbros participates. The operating losses associated with certain of the company's current and previous projects illustrate the inherent risks associated with the sector. Specifically, these risks include the sector's competitive nature, the economic and political risks in Willbros' upstream markets, and the potential for cost overruns in the execution of fixed-price contracts. Still, S&P believes that the company's long-term operating performance could benefit from fundamentals supporting increased activity in some of its end markets. The outlook is stable. Despite previous execution challenges, S&P expects that Willbros' improving operating performance will enable the company to generate moderate free cash flow in 2013. S&P could raise the rating during the next 12 months if the company continues to generate and sustain positive free cash flow. S&P would expect the company to maintain adequate liquidity, including at least 15% headroom under financial covenants, and to continue maintaining leverage at less than 5x. S&P could lower the rating if Willbros' operating performance declines, causing liquidity to deteriorate due to ongoing cash outflows and covenant headroom to decrease to less than 10%. This could result from any unexpected execution challenges and project losses. WL HOMES: 3rd Cir. Says Wachovia Security Interest Enforceable -------------------------------------------------------------- The U.S. Court of Appeals for the Third Circuit affirmed decisions by the bankruptcy court and district court holding that Wachovia Bank, National Association, had an enforceable security interest in the bank account of JLH Insurance Corporation, a wholly owned subsidiary of WL Homes LLC. In 2007, Wachovia extended a loan to WL Homes. In exchange, WL Homes granted Wachovia a security interest in the $10 million bank account of JLH. WL Homes eventually filed a bankruptcy petition and Wachovia sought a declaration in U.S. Bankruptcy Court for the District of Delaware that it had an enforceable security interest in the JLH bank account. The Bankruptcy Court granted Wachovia's motion for summary judgment, holding that Wachovia had a valid security interest in the account because JLH had consented to the pledge and, in the alternative, because WL Homes had use and control of the JLH account. The Chapter 7 trustee appointed to represent both WL Homes and JLH appealed. The District Court affirmed the grant of summary judgment on the basis of consent but reversed the use and control holding. Both parties appeal the decision of the District Court. The case before the Third Circuit are, WACHOVIA BANK NATIONAL ASSOCIATION, v. WL HOMES LLC; JLH INSURANCE CORPORATION; GEORGE L. MILLER George L. Miller; JLH Insurance Corporation, Appellants. In re: WL HOMES, LLC, Debtor; and WACHOVIA BANK NATIONAL ASSOCIATION, Appellant, v. WL HOMES LLC; JLH INSURANCE CORPORATION; GEORGE L. MILLER, Nos. 12-3414, 12-3493 (3rd Cir.). A copy of the Third Circuit's decision dated Aug. 8, 2013, is available at http://is.gd/qIt8Cjfrom Leagle.com. WL Homes and JLH are represented by: Steven M. Coren, Esq. Brian L. Watson, Esq. KAUFMAN, COREN & RESS, P.C. Two Commerce Square, Suite 3900 2001 Market Street Philadelphia, PA 19103-2713 Tel: 215-735-8700 E-mail: scoren@kcr-law.com bwatson@kcr-law.com Wachovia, now Wells Fargo following the banks' merger, is represented by: Francis A. Monaco, Jr., Esq. Thomas M. Horan, Esq. WOMBLE CARLYLE SANDRIDGE & RICE, LLP 222 Delaware Avenue, 15th Floor Wilmington, DE 19801 - and - James D. Whooley, Esq. MILBANK, TWEED, HADLEY & MCCLOY, LLP 601 S. Figueroa Street, 30th Floor Los Angeles, CA 90017 Tel: 213-892-4429 E-mail: jwhooley@milbank.com About WL Homes Irvine, California-based WL Homes LLC -- dba John Laing Homes, John Laing Homes Luxury, Laing Urban, Laing Luxury Homes, and John Laing Urban -- was one of metro Denver's largest homebuilders. It built under the John Laing brand primarily in Colorado, California, Arizona, and Texas. John Laing began as a builder in the United Kingdom and came to the U.S. market in 1984. The company was sold to Dubai-based Emaar Properties in 2006 for $1.05 billion. Emaar invested $613 million in the company, but eventually stopped funding. John Laing had a work force of 1,100 in 2006, but cut employees to about 90 by the first week of February 2009. John Laing has 105 real estate developments across the country. It also builds luxury and custom homes. WL Homes and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09- 10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. Ashby & Geddes represents the Official Committee of Unsecured Creditors. In its bankruptcy petition, WL Homes estimated assets of more than $1 billion, and debts between $500 million and $1 billion. As reported in the TCR on June 10, 2009, the Bankruptcy Court converted WL Homes LLC and its debtor affiliates' Chapter 11 cases to cases under Chapter 7 liquidation, at the request of the official committee of unsecured creditors. WL HOMES: Wachovia Wins $10MM Bank Account ------------------------------------------ Law360 reported that Wachovia Bank NA won dibs on the $10 million bank account of an insurance company, when the Third Circuit ruled the insurer's bankrupt parent had control of the account at the time it posted the money as collateral on a Wachovia-underwritten loan. According to the report, Wachovia had sued WL Homes LLC's Chapter 7 bankruptcy trustee for the account, held by the home builder's subsidiary JLH Insurance. About WL Homes Irvine, California-based WL Homes LLC -- dba John Laing Homes, John Laing Homes Luxury, Laing Urban, Laing Luxury Homes, and John Laing Urban -- is one of metro Denver's largest homebuilders. It builds under the John Laing brand primarily in Colorado, California, Arizona, and Texas. John Laing began as a builder in the United Kingdom and came to the U.S. market in 1984. The company was sold to Dubai-based Emaar Properties in 2006 for $1.05 billion. Emaar invested $613 million in the company, but eventually stopped funding. John Laing had a work force of 1,100 in 2006, but cut employees to about 90 by the first week of February 2009. John Laing has 105 real estate developments across the country. It also builds luxury and custom homes. WL Homes and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09- 10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. Ashby & Geddes represents the Official Committee of Unsecured Creditors. In its bankruptcy petition, WL Homes estimated assets of more than $1 billion, and debts between $500 million and $1 billion. As reported in the TCR on June 10, 2009, the Bankruptcy Court converted WL Homes LLC and its debtor affiliates' Chapter 11 cases to cases under Chapter 7 liquidation, at the request of the official committee of unsecured creditors. * Moody's Notes Rise of Spec-Grade Corp. Default Rate in July ------------------------------------------------------------- Moody's trailing 12-month global speculative-grade default rate came in at 2.9% in July, up slightly from 2.8% in June, Moody's Investors Service says in its monthly default report. The latest global reading exactly matches the rating agency's year-ago forecast. "Corporate default rates have been holding steady at historically low rates, ranging between 2% and 3% for most of the past two and a half years," notes Albert Metz, Managing Director of Credit Policy Research. Four Moody's-rated corporate debt issuers defaulted last month, and for the year to date the number is 43, with 24 from the US, 13 from Europe and the remainder from Latin America. In the US, the speculative-grade default rate finished July at 2.8%, down from 2.9% in June. Last year, the US default rate was 3.4% at end-July. In Europe, the rate held steady at 3.4% from June to July. A year ago, the European rate was also 3.4%. Based on its forecasting model, Moody's now expects the global speculative-grade default rate to finish 2013 at 3.0%, and to arrive at 2.5% in July 2014. Across industries over the coming year, Moody's continues to expect default rates to be highest in the Media: Advertising, Printing & Publishing sector in the US, and the Hotel, Gaming & Leisure sector in Europe. By dollar volume, the global speculative-grade bond default rate came in at 1.9% in July, up from 1.8% in June. At this time last year, the rate was 2.0%. In the US, the dollar-weighted speculative-grade bond default rate held steady at 1.5% from June to July. The comparable rate was 1.7% in July 2012. In Europe, the dollar-weighted speculative-grade bond default rate finished July at 3.2%, up slightly from June's revised rate of 3.1%. The European rate stood at 3.5% at the end of July last year. Moody's global distressed index edged lower in July, to 8.8% from 9.1% in June. A year ago, the index stood at 18.3%. In the leveraged-loan market, two Moody's-rated issuers defaulted in July, both from the US. Moody's trailing 12-month US leveraged loan default rate finished July at 2.5%, up from 2.3% in June. A year ago, the loan default rate stood at 2.5%. * Indiana Senator to Push for Municipal Bankruptcy Law ------------------------------------------------------ Associated Press reports that a northwestern Indiana lawmaker said he will push a measure next year that would change state law to allow local governments to file for bankruptcy like Detroit did in July. AP relates that Republican Sen. Ed Charbonneau of Valparaiso said it's time for Indiana to set up a process to make bankruptcy an option for distressed local governments when all other choices have been exhausted. Federal bankruptcy laws allow municipal governments to seek Chapter 9 bankruptcy protection only if their state authorizes it, the report noted. Only 28 states allow local government bankruptcies under various conditions, the report notes. According to the AP, The Times in Munster reported that a dozen states, including Michigan, allow municipal bankruptcies when state remedies have been unsuccessful. Other states allow local bankruptcies even if local officials don't seek state help. Between 1980 and 2012, just 262 of the 55,000 local governments that can issue debt filed for bankruptcy, AP reports citing the Pew Charitable Trusts. But Mr. Charbonneau said he believes Detroit's bankruptcy shows the need to have measures in place, AP adds. * Mortgage Delinquencies Hit Five-Year Low ------------------------------------------ Nick Timiraos, writing for The Wall Street Journal, reported that the share of homeowners behind on their mortgage payments or facing foreclosure fell to a five-year low during the second quarter, though they are still well north of historical levels, according to a survey released Aug. 8. According to the report, the Mortgage Bankers Association said 5.9% of mortgages on one-to-four-unit homes were 90 days or longer past due or in the foreclosure process at the end of the June, representing around 2.8 million households, down from a peak of 4.5 million. The second-quarter figure was down from 7.3% one year earlier and a high of 9.7% in late 2009. "At a national level, all of the indicators are good. The numbers are down where they should be down," said Jay Brinkmann, the chief economist for the Mortgage Bankers Association, the news agency said. Before the housing boom, seriously delinquent rates averaged around 2.5%. The data show that for many of the hardest-hit parts of the country, fears of a large overhang of potential foreclosures -- a so-called "shadow inventory" -- haven't materialized and aren't likely to do so, said Mr. Brinkmann, the report further related. Delinquencies and foreclosures have returned closer to their pre- crisis levels in states such as California and Arizona that don't require mortgage companies to take back homes by appearing before a judge, the report said. * Ex-Paralegal Sues Bankruptcy Firm Over Wrongful Termination ------------------------------------------------------------- Law360 reported that a former paralegal hit Simon Resnik & Hayes LLP with a wrongful termination lawsuit, alleging the California bankruptcy law firm forced her to work through lunch, didn't pay her overtime and ultimately fired her when she objected to its policies. The firm fired Carla Muskrath on Feb. 8, after the paralegal complained about being denied a 30-minute lunch period and not receiving overtime payments, according to the complaint filed in California Superior Court in Los Angeles County, the report related. * Obama Fraud Task Force Takes on the Big Banks ----------------------------------------------- Greg Farrell, Phil Mattingly & Karen Gullo, writing for Bloomberg News, reported that the criminal investigation of JPMorgan Chase & Co.'s mortgage-backed securities practice is evidence a U.S. Justice Department task force set up to investigate causes of the financial crisis is finally getting some traction against banks blamed for ruining the economy. According to the report, the probe, disclosed in the bank's quarterly filing, is the latest enforcement effort to emerge from the Residential Mortgage Backed Securities Working Group. It was set up last year on orders of President Barack Obama to coordinate prosecutions of fraudulent underwriting activity by banks that contributed to the financial crisis. The JPMorgan probe, which is also looking at possible civil violations, grew out of the working group's efforts, said Lauren Horwood, a spokeswoman for U.S. Attorney Benjamin Wagner in Sacramento, who is leading the investigation and is a member of the group's parent, the Financial Fraud Enforcement Task Force, the report related. "Over the last year and a half, the RMBS Working Group members have been aggressively investigating multiple cases across the country and the public is only beginning to see the results," Associate Attorney General Tony West, the No. 3 ranking official at the Justice Department, said in an e-mail, the report further related. The JPMorgan Chase investigation, which may not lead to criminal charges, follows parallel civil lawsuits filed earlier this week by the U.S. Securities and Exchange Commission and the U.S. Attorney Office in Charlotte, North Carolina, the report said. U.S. officials claim Bank of America Corp. failed to disclose risks embedded in $850 million in mortgage-backed securities issued in 2008. * Court: Wells Fargo Must Face Mortgage Modification Suits ---------------------------------------------------------- Andrew Harris, writing for Bloomberg News, reported that Wells Fargo & Co. must face lawsuits by home loan borrowers over claims the bank refused to offer them permanent mortgage modifications for which they assert they qualified, a U.S. appeals court ruled. According to the report, the federal government's 2009 Home Affordable Modification Program requires the bank to offer permanent adjustments to homeowners who met the terms of a trial- period modification, a three-judge panel of the U.S. Court of Appeals in San Francisco ruled. "The program seems to have created more litigation than it has happy homeowners," the judges said in an Aug. 9 decision. Reversing a lower-court dismissal of two separate lawsuits, the panel rejected the conclusion Wells Fargo was only bound if it had actually offered the borrowers a fully-executed copy of a modification agreement, the report said. The terms of the trial period plan "cannot convert a purported agreement setting forth clear obligations into a decision left to the unfettered discretion of the loan servicer," the panel said, the report related. The cases are Corvello v. Wells Fargo Bank NA, 11-16234 and Lucia v. Wells Fargo Bank NA, 11-16242, U.S. Court of Appeals for the Ninth Circuit (San Francisco). * SEC Seeks Admission of Wrongdoing from JPMorgan ------------------------------------------------- Dina ElBoghdady and Danielle Douglas, writing for The Washington Post, reported that the SEC has routinely used boilerplate language that allows defendants to pay fines without acknowledging liability, a policy that has been criticized by some judges. According to the report, the Securities and Exchange Commission is negotiating a settlement with JPMorgan Chase in which the bank would be required to admit wrongdoing in its handling of a multibillion-dollar trading loss initiated by one of its traders, a person familiar with the matter said. If the SEC gets its way, the deal would apply a standard recently unveiled by SEC Chairman Mary Jo White that demands an admission of misconduct in certain types of civil settlements, the report related. The agency has routinely used boilerplate language that allows defendants to pay fines without acknowledging liability, a policy that has been criticized by some judges. Even before White made the announcement in June, the SEC was eyeing cases that the new policy might be applied to, and the case of the JPMorgan trader, known as the "London Whale," was among them, the report said. A deal is not imminent, said the person familiar with the matter, who asked not to be named because the person is not authorized to speak. * Wells Fargo Wins Trial over Securities-Lending Losses ------------------------------------------------------- Andrew Harris & Beth Hawkins, writing for Bloomberg News, reported that Wells Fargo & Co. was cleared by a jury of claims it misrepresented a securities-lending program to Blue Cross Blue Shield of Minnesota and other institutional investors and a demand it pay for $8.2 million of losses. According to the report, a federal court jury in St. Paul, Minnesota, on Aug. 8 returned a verdict rejecting allegations in the plaintiffs' 2011 lawsuit that the bank marketed a risky program as safe, leading to losses the bank blamed on the financial crisis alone. "The verdict validates that Wells Fargo was focused at all times on serving our clients' interests," the lender said in a post- verdict statement, the report related. Wells Fargo sought "to achieve the best results for all participants in the securities lending program during extremely difficult economic conditions." Plaintiffs' lawyer Michael V. Ciresi declined to comment, the report said. The case is one of at least five filed in Minnesota against Wells Fargo over the securities-lending program, which was based in the state, according to the report. Under the program, Wells Fargo held its clients' securities in custodial accounts and made temporary loans of the instruments to brokers. The brokers used the securities to support trading activities such as short sales and option contracts. The Minnesota case is Blue Cross Blue Shield of Minnesota v. Wells Fargo Bank, 11-cv-02529, U.S. District Court, District of Minnesota (St. Paul). * SAC Business Plan Goes to Judge --------------------------------- Jenny Strasburg, writing for The Wall Street Journal, reported that SAC Capital Advisors LP and prosecutors asked a federal judge to approve an agreement that would allow the hedge-fund giant to maintain business operations but restrict its ability to move assets elsewhere while facing criminal insider-trading charges, according to filings related to the case. The terms proposed by SAC and the Manhattan U.S. Attorney's Office would require the firm to maintain at least 85% of the "aggregate value" of assets owned by the firm's "entity defendants" as of July 1, in exchange for its continuing ability to engage in lawful operations, according to the filings, the report related. If the assets fell below the specified level in a given month, it would be required to "replenish" them within five days after the end of that month, according to the filings, the report added. The filings -- a protective order and related application -- were signed by prosecutors and lawyers for SAC Capital and submitted for approval by U.S. District Judge Richard Sullivan, the report related. It was unclear whether the judge had approved the agreement, the report said. * Failure Tally Hits 18 as Regulators Close Wisconsin Bank ---------------------------------------------------------- Nathalie Tadena, writing for DBR Small Cap, reported that regulators on Aug. 9 closed a small bank in Wisconsin, bringing the nationwide tally of bank failures to 18 for the year. * Huron Financial Outlines Technology Turnaround Strategy --------------------------------------------------------- Recently, Standard & Poor's announced that companies in the media, entertainment and high-tech industries are the highest ranked for credit downgrades -- in part because of the volatility of the sector. To address the instability in the technology sector, Huron Financial experts Ray Anderson and Stuart Walker created a framework for situational analysis, turnaround strategies, and tactics to aid businesses. "Technological change and shifting customer preferences occur rapidly," said Ray Anderson, managing director, Huron Financial. "Therefore organizational change in technology companies must be swift and pointed." Huron Financial's framework offers a two-pronged approach: Situational analysis: Identify the root causes of distress and build a strategy to increase probability of short-term survival and long-term viability. It is critical to pinpoint the product's position in the technology life cycle and assess competition. Remember, turnarounds are rarely linear, and strategy and tactics must evolve as the process progresses. Strategy & Tactics: Effective turnaround plans focus on people, tactics and timelines. Several tried and true strategies exist, including: * Niche Strategy: Focus on core products and customers. Sell or eliminate non-core activities. * Harvest Strategy: Maximize cash flow in the short term by avoiding additional investment in the business, greatly reducing operating expenses, and raising prices. * Leapfrog Strategy: Sell the business or place all bets on products in the ascendant phase of the technology life cycle. "In the past, cell phones replaced landlines; today, apps take the place of consumer software; and tomorrow, it is all but assured that streaming video will dominate cable television," said Stuart Walker, senior director, Huron Financial. "Disruptive innovations are inherent to the technology industry, which is why focusing on the remaining ?useful life' of products is one of the most important and difficult aspects of turnaround." To read the full article, "Technology Turnarounds: Where Moore's Law Meets Less Cash Flow," visit http://is.gd/flYSPe If you are interested in speaking with Ray Anderson or Stuart Walker or another one Huron Financial's experts, please contact: Jennifer Frost Hennagir Telephone: 312-880-3260 E-mail: jfrost-hennagir@huronconsultinggroup.com Jenna Nichols Telephone: 312-880-5693 E-mail: jnichols@huronconsultinggroup.com About Huron Financial Huron Financial provides financial advisory, restructuring and turnaround, interim management, valuation, forensic and litigation, and operational improvement consulting services to companies in transition, boards of directors and investors and lenders. Its consultants provide senior level involvement and extensive industry experience to drive results. Its experienced leadership, management depth and flexible staffing model allow us to efficiently lead projects ranging from middle market to large company assignments. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 120.5 (14.1) (11.1) ACASTI PHARMA IN APO CN 3.3 (1.8) 2.3 ADVANCED EMISSIO ADES US 92.5 (39.8) (11.0) ADVENT SOFTWARE ADVS US 824.6 (114.8) (202.7) AK STEEL HLDG AKS US 3,772.7 (181.0) 473.3 ALLIANCE HEALTHC AIQ US 528.2 (131.1) 64.8 AMC NETWORKS-A AMCX US 2,460.3 (680.1) 735.0 AMER AXLE & MFG AXL US 3,008.7 (101.6) 345.2 AMR CORP AAMRQ US 26,216.0 (8,216.0) (1,034.0) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ANACOR PHARMACEU ANAC US 37.4 (8.0) 9.5 ANGIE'S LIST INC ANGI US 111.8 (11.9) (9.4) ARRAY BIOPHARMA ARRY US 107.4 (52.4) 40.0 AUTOZONE INC AZO US 6,783.0 (1,532.3) (657.7) BERRY PLASTICS G BERY US 5,045.0 (251.0) 550.0 BIOCRYST PHARM BCRX US 46.9 (2.8) 24.1 BOSTON PIZZA R-U BPF-U CN 156.7 (108.0) (4.2) BRP INC/CA-SUB V DOO CN 1,768.0 (496.6) (21.8) BUILDERS FIRSTSO BLDR US 505.5 (8.5) 188.3 CABLEVISION SY-A CVC US 7,588.1 (5,565.5) (14.0) CAESARS ENTERTAI CZR US 26,844.8 (738.1) 833.8 CALLIDUS SOFTWAR CALD US 123.1 (2.2) 2.8 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CC MEDIA-A CCMO US 15,296.5 (8,289.2) 1,259.4 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHIMERIX INC CMRX US 26.3 (2.1) 15.9 CHOICE HOTELS CHH US 562.7 (520.0) 75.1 CIENA CORP CIEN US 1,693.3 (97.9) 744.0 CINCINNATI BELL CBB US 2,151.5 (727.8) (93.4) DELTA AIR LI DAL US 45,772.0 (1,184.0) (5,880.0) DENDREON CORP DNDN US 576.9 (100.5) 246.8 DEX MEDIA INC DXM US 2,658.8 (17.7) (13.5) DIAMOND RESORTS DRII US 1,053.8 (99.1) 674.4 DIRECTV DTV US 20,921.0 (5,688.0) 622.0 DOMINO'S PIZZA DPZ US 468.8 (1,328.8) 73.7 DUN & BRADSTREET DNB US 1,902.0 (1,097.0) (194.9) DYAX CORP DYAX US 70.7 (37.0) 43.0 ESPERION THERAPE ESPR US 5.3 (5.0) 2.4 EVERYWARE GLOBAL EVRY US 340.7 (53.6) 134.8 FAIRPOINT COMMUN FRP US 1,606.4 (400.5) 19.6 FAIRWAY GROUP HO FWM US 338.5 (1.2) 5.8 FERRELLGAS-LP FGP US 1,440.6 (29.0) 9.9 FIFTH & PACIFIC FNP US 846.2 (213.7) (64.6) FOREST OIL CORP FST US 1,913.7 (67.4) (129.4) FREESCALE SEMICO FSL US 3,129.0 (4,583.0) 1,235.0 GENCORP INC GY US 1,411.1 (366.9) 27.9 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GLOBAL BRASS & C BRSS US 576.5 (37.0) 286.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GDRZF US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HALOGEN SOFTWARE HGN CN 22.8 (46.2) (9.4) HCA HOLDINGS INC HCA US 27,934.0 (7,485.0) 1,771.0 HD SUPPLY HOLDIN HDS US 6,459.0 (1,720.0) 1,199.0 HOVNANIAN ENT-A HOV US 1,618.9 (478.5) 929.3 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) INCYTE CORP INCY US 334.2 (27.8) 210.4 INFOR US INC LWSN US 6,202.6 (476.4) (417.5) INSYS THERAPEUTI INSY US 22.2 (63.5) (70.0) INVIVO THERAPEUT NVIV US 13.8 (14.3) (15.3) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,505.7 (215.4) (97.4) JUST ENERGY GROU JE CN 1,505.7 (215.4) (97.4) L BRANDS INC LTD US 5,776.0 (994.0) 634.0 LIN MEDIA LLC LIN US 1,221.8 (63.5) (97.2) LORILLARD INC LO US 3,335.0 (1,855.0) 1,587.0 MANNKIND CORP MNKD US 215.2 (146.8) (231.9) MARRIOTT INTL-A MAR US 6,377.0 (1,493.0) (1,063.0) MARRONE BIO INNO MBII US 17.8 (45.1) (21.6) MDC PARTNERS-A MDZ/A CN 1,389.4 (16.6) (204.5) MDC PARTNERS-A MDCA US 1,389.4 (16.6) (204.5) MEDIA GENERAL-A MEG US 739.6 (206.4) 30.6 MERITOR INC MTOR US 2,477.0 (1,059.0) 278.0 MERRIMACK PHARMA MACK US 127.3 (32.1) 58.4 MONEYGRAM INTERN MGI US 5,075.8 (148.2) 30.1 MORGANS HOTEL GR MHGC US 580.7 (163.7) 9.9 MPG OFFICE TRUST MPG US 1,450.5 (530.6) - NATIONAL CINEMED NCMI US 831.0 (308.8) 122.2 NAVISTAR INTL NAV US 8,723.0 (3,638.0) 1,562.0 NEKTAR THERAPEUT NKTR US 412.8 (40.5) 144.1 NPS PHARM INC NPSP US 188.5 (4.2) 133.4 NYMOX PHARMACEUT NYMX US 1.8 (7.4) (1.9) ODYSSEY MARINE OMEX US 28.0 (7.1) (15.5) OMEROS CORP OMER US 17.7 (15.9) 5.2 OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) ORGANOVO HOLDING ONVO US 16.7 (5.3) (6.2) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 401.4 (1.3) 216.3 PHILIP MORRIS IN PM US 37,140.0 (3,929.0) 2,049.0 PHILIP MRS-BDR PHMO11B BZ 37,140.0 (3,929.0) 2,049.0 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLY GEM HOLDINGS PGEM US 906.1 (343.4) 132.2 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 474.4 (42.0) 99.0 QUINTILES TRANSN Q US 2,426.7 (1,322.3) 217.5 REGAL ENTERTAI-A RGC US 2,451.8 (706.2) 117.1 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTPATH INC PRM US 208.0 (91.7) 3.6 REVLON INC-A REV US 1,269.7 (632.4) 180.6 RITE AID CORP RAD US 6,945.4 (2,357.5) 1,822.5 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,892.1 (280.5) 523.4 SEQUENOM INC SQNM US 192.8 (6.4) 88.3 SILVER SPRING NE SSNI US 506.9 (86.7) 69.5 SUNESIS PHARMAC SNSS US 50.6 (5.8) 15.3 SUNGAME CORP SGMZ US 0.1 (1.3) (1.4) SUPERVALU INC SVU US 4,691.0 (1,084.0) 2.0 TAUBMAN CENTERS TCO US 3,369.8 (191.4) - THRESHOLD PHARMA THLD US 104.5 (25.2) 80.0 TOWN SPORTS INTE CLUB US 414.5 (43.7) (14.3) ULTRA PETROLEUM UPL US 2,062.9 (441.1) (266.6) UNISYS CORP UIS US 2,275.8 (1,536.0) 412.2 VECTOR GROUP LTD VGR US 1,069.5 (129.5) 384.8 VENOCO INC VQ US 695.2 (258.7) (39.2) VERISIGN INC VRSN US 2,524.8 (273.9) 312.7 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VISKASE COS I VKSC US 334.7 (3.4) 113.5 WEIGHT WATCHERS WTW US 1,310.8 (1,561.1) (84.7) WEST CORP WSTC US 3,462.1 (819.5) 338.0 WESTMORELAND COA WLB US 933.6 (281.6) (11.1) XERIUM TECHNOLOG XRM US 600.8 (35.1) 123.8 XOMA CORP XOMA US 76.9 (16.9) 46.5 YRC WORLDWIDE IN YRCW US 2,172.5 (641.5) 105.5 ********* 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 ***