/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131001.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, October 1, 2013, Vol. 17, No. 272 Headlines A123 SYSTEMS: Robbins Geller Files Securities Class Action ADOC HOLDINGS: Wants Exclusivity Extended Until Jan. 31 AGFEED INDUSTRIES: Committees See No Need to Investigate Fraud AMERICAN AIRLINES: U.S. Rebuffs Data Request in Antitrust Suit AMERITYRE CORPORATION: Incurs $1.1-Mil. Net Loss in Fiscal 2013 ANCHOR BANCORP: Completes $175 Million Recapitalization ANCHOR BANCORP: Pre-Pack Plan Declared Effective Sept. 27 APERION COMMUNITIES: Facing Conversion; Creditors' Meeting Moved APERION COMMUNITIES: Files List of Top 12 Unsecured Creditors ARI-RC 6: 12 Debtors Have Until Oct. 7 to File Schedules ASPEN GROUP: Sells $2 Million Convertible Debenture ATLANTIC & PACIFIC: NY State Court Rules in Employee Suit AUGUST WILSON CENTER: Dollar Bank Files $7MM Foreclosure Petition BEAR VALLEY: Kanter Loses Appeal in Moorefield Dispute BROWN SHOE: Good Performance Prompts Moody's to Lift CFR to B1 CAESARS ENTERTAINMENT: Fitch Says Refinance Terms Negative CAPABILITY RANCH: Court Confirms Reorganization Plan CBS I: Nov. 13 Hearing on Confirmation of Plan CAESARS ENTERTAINMENT: Offering 10 Million Shares of Common Stock CENGAGE LEARNING: Judge Drain to Mediate Plan Among Creditors CHINA NATURAL: Director Quits Over Disagreement CODA HOLDINGS: Sets Nov. 1 Hearing to Confirm Liquidating Plan CONEXANT SYSTEMS: To Pay Professionals to Complete Prepack CSN HOUSTON: Astros Say Comcast "Improperly" Filed Involuntary D & L ENERGY: Proposes Nov. 13 Auction for All Assets D & L ENERGY: Can Continue Using HNB Cash Collateral Until Nov. 20 DETROIT, MI: Wants State Court Covered by Automatic Stay DETROIT, MI: NLC Supports White House Grants to Spur Recovery DIGIRATI TECHNOLOGIES: Proposes Plan of Reorganization DYNAMIC PRECISION: S&P Assigns 'B' CCR & Rates $330MM Facility 'B' DYNAVOX INC: Delays Form 10-K for Fiscal 2013 EASTON-BELL SPORTS: Moody's Affirms 'B2' Corp. Credit Rating EL POLLO: S&P Affirms 'B-' CCR & Rates $190MM Sr. Facility 'B' EQUIPMENT ACQUISITION: Bank Fails to Recoup Losses From Insurer EXIDE TECHNOLOGIES: Battery Maker Needs $10 Million Lead Swap Deal FAIRWAY GROUP: Moody's Assigns B3 CFR & Rates $315MM Loans B2 FCC HOLDINGS: Moody's Cuts Senior Unsecured Notes Rating to Ca FGA CAPITAL: S&P Affirms 'B' Shortterm Counterparty Credit Rating FRAZER/EXTON DEVELOPMENT: Court Won't Reopen Case, Reimpose Stay FREESEAS INC: Hanover Assigns Rights Under Settlement Agreement FRESH & EASY: Grocery Chain Files Chapter 11 to Sell to Yucaipa FRIENDFINDER NETWORKS: Guccione Collection Sues in Bankr. Court FRONTIER AIRLINES: Pilots Negotiations Jeopardize Sale Talks GANNETT CO: Moody's Keeps Ratings Over $250MM Senior Notes Upsize GATEHOUSE MEDIA: Cancels Unused Portion of 2007 Credit Facility GLW EQUIPMENT: Cash Collateral Hearing Continued to Oct. 10 GLW EQUIPMENT: Can Employ Ravich Meyer as Bankruptcy Counsel GLYECO INC: Appoints Alicia Williams as CFO GORDON PROPERTIES: Opposes Bid to Convert Case to Ch. 7 GREEN EARTH: Incurs $6.59-Million Net Loss in Fiscal 2013 GTEC INC: Case Summary & 20 Largest Unsecured Creditors HAMPTON LAKE: Oct. 15 Hearing on Confirmation of Amended Plan HAMPTON ROADS: Thomas Dix Appointed Chief Financial Officer HANOVER INSURANCE: Fitch Affirms 'BB' Subordinated Debt Rating HAWAII OUTDOOR: Oct. 21 Further Cash Collateral Hearing Set HOUSTON REGIONAL: Involuntary Chapter 11 Case Summary HOYT TRANSPORTATION: Selling 18 Buses in Private Sale HUNTERSVILLE PLAZA: Case Summary & 7 Unsecured Creditors IDERA PHARMACEUTICALS: Priced Common Stock & Warrants Offerings ICEWEB INC: To Issue 25 Million Shares Under 2012 Equity Plan J.C. PENNEY: Share Offering Prices at a Discount J.C. PENNEY: Moody's Says Shares Offer No Impact on 'Caa1' CFR JERRY'S NUGGET: US Bank Says Court Should Deny Confirmation JERRY'S NUGGET: 3rd Amended Plan Offers to Pay USB From Exit Loan JERRY'S NUGGET: Court Continues Hearing on Trustee Bid to Nov. 6 JOSEPH DELGRECO: DLA Piper Skirts $17MM Suit in 2nd Circuit JOURNAL REGISTER: Wants Exclusivity Period Extended to Dec. 30 K-V PHARMACEUTICAL: Silver Point Had 11% Equity Stake at Sept. 16 KELOWNA PACIFIC: CN to Start Service on 75% of Rail Network KEY ENERGY: S&P Revises Outlook to Stable & Affirms 'BB-' CCR KEYWELL LLC: Scrap Titanium Supplier Files for Quick Sale KSL MEDIA: Sec. 341(a) Meeting Scheduled for Oct. 8 KSL MEDIA: Employs Landau Gottfried as Bankruptcy Counsel KSL MEDIA: Files Schedules of Assets and Liabilities KSL MEDIA: Files Amended List of Largest Unsecured Creditors LAGUNA BRISAS: Hearing on CW Capital Claim Continued Until Nov. 8 LAGUNA BRISAS: Plan Outline Hearing Continued Until Nov. 8 LAGUNA BRISAS: Receiver May Use Cash Collateral Until Oct. 31 LAGUNA BRISAS: Taps CBRE Inc. as Real Estate Professionals LANDAUER HEALTHCARE: Unsecureds Settle with Company, Quadrant LAUSELL INC: Addresses Reyes Family's Plan Confirmation Concerns LAUSELL INC: Court Approves Cash Collateral Access Until Oct. 15 LCI HOLDING: Court Extends Exclusive Plan Filing Pd. Thru Feb. 28 LDK SOLAR: Has Forbearance with Noteholders Until Oct. 27 LEHMAN BROTHERS: To Distribute $11.4BB to Creditors on Oct. 3 LIBERACE FOUNDATION: Hearing on Plan Outline Reset Until Oct. 30 LILY GROUP: Coal Mine Developer Files in Indiana LONE PINE: Files Prepack in Canada, Chapter 15 in U.S. LONGVIEW POWER: Working on Balance Sheet Fix as Cash Fight Looms MARKET STREET: Voluntary Chapter 11 Case Summary MAXCOM TELECOMUNICACIONES: 44.7% of A Shares Validly Tendered MCS AMS: S&P Assigns Preliminary 'B' Corp. Credit Rating MEDICINE HAT: Enters Receivership, Owes $475K to Creditors MERCANTILE BANCORP: Ex-Execs Settle SEC Claims Surrounding Loss MOROCO VENTURES: 5th Cir. Affirms Judgment in Martin v. Grehn MSD PERFORMANCE: Committee Objects to Cash Collateral Motion MSD PERFORMANCE: Original Par Lenders Want Exclusivity Terminated MSD PERFORMANCE: Committee Balks at Proposed Bid Procedures MSD PERFORMANCE: Resists Lenders' Efforts to File Alternate Plan NESBITT PORTLAND: Hilton Objects Again To Ch. 11 Plan NET ELEMENT: Contributes Interests in Online Businesses to T1T NRG DUNKIRK: S&P Removes Revenue Bonds Rating From Watch Negative O&G LEASING: Motion for Valuation of Secured Claim Dismissed ORMET CORP: Needs Time to Close Sale; Seeks Exclusivity Extension POINT CENTER: Trustee Taps Diamond McCarthy as Litigation Counsel RESIDENTIAL CAPITAL: Examiner Discharged From Duties RESIDENTIAL CAPITAL: Court Approves FGIC Settlement RESIDENTIAL CAPITAL: Balks at Claims vs. Non-Obligor Entities RESIDENTIAL CAPITAL: Disputes Syncora's Claim No. 7170 RESIDENTIAL CAPITAL: Objects to WVIMB'S $7.5-Mil. Fraud Claim SCOOTER STORE: Gets Permission to Begin Selling Inventory SEDONA DEVELOPMENT: Post-Confirmation Status Hearing Continued SEGA BIOFUELS: Gets OK to Employ McCallar as Bankr. Counsel SEGA BIOFUELS: Section 341(a) Meeting Adjourned to Oct. 21 SHAMROCK-HOSTMARK: Plan Outline Hearing Continued Until Oct. 23 SMITHFIELD FOODS: S&P Lowers Corp. Credit Rating to 'BB-' SOUNDVIEW ELITE: 6 Cayman Mutual Funds File Ch. 11 in New York STACKPOLE INTERNATIONAL: S&P Assigns 'B+' Corporate Credit Rating THOMAS JEFFERSON: S&P Lowers Rating on 2008A & 2008B Bonds to 'B+' TOMSTEN INC: Taps Quasimodo Advertising as Marketing Consultant TRIMAS CORP: S&P Rates $650 Million Senior Secured Facilities 'BB' TURBOCOMBUSTOR TECHNOLOGIES: Moody's Gives B2 Corp. Family Rating TWN INVESTMENT: Oct. 15 Hearing on East West's Stay Relief Bid * Moody's Notes Recovery of U.S. Homebuilding Sector * Defaults Can Grow Quickly When Credit Market Turns, Moody's Says * Bankruptcy Court Lacks Jurisdiction to Decide Property Ownership * Trust-Fund Interest Claim Survives Chapter 13 Plan * Large Companies With Insolvent Balance Sheets ********* A123 SYSTEMS: Robbins Geller Files Securities Class Action ---------------------------------------------------------- Robbins Geller Rudman & Dowd LLP on Sept. 27 disclosed that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of A123 Systems, Inc. securities during the period between February 28, 2011 and October 16, 2012. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from September 27, 2013. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com View a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/a123/ Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges certain officers and directors of the former A123 with violations of the Securities Exchange Act of 1934. Its largest customer was Fisker Automotive, Inc., which, like A123, received hundreds of millions of dollars in U.S. Department of Energy funding to design and mass produce plug-in electric vehicles. The complaint alleges that defendants issued materially false and misleading statements regarding the Company's financial performance and future prospects, including failing to disclose that: (i) by February 2011, Fisker was in default on production milestones in its DOE funding agreement, threatening Fisker's DOE funding and ability to pay A123; (ii) by June 2011, the DOE had cut off disbursements to Fisker; (iii) by the fall of 2011, Fisker had run out of cash and was refusing to accepting batteries from A123; (iv) A123's $20.5 million investment in Fisker's preferred stock was materially impaired; (v) the carrying value of A123's long-term grant receivable was overstated; (vi) the carrying value of accounts receivable due A123 from Fisker was overstated; and (vii) as a result, A123 was not on track to achieve the financial results the market had been led to expect during the Class Period. As the market learned between November 2011 and October 16, 2012 that Fisker was rejecting prior orders for batteries, that A123 was downgrading earnings guidance and taking an impairment charge on its Fisker investment, that the Company's forecast of incurring significant net losses and negative operating cash flows had raised substantial doubt regarding the Company's ability to continue as a going concern, and finally that A123 had filed for bankruptcy, the price of its stock declined from a Class Period high of $9.48 per share on February 28, 2011 to pennies per share. Plaintiff seeks to recover damages on behalf of all purchasers of A123 securities during the Class Period. The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Robbins Geller -- http://www.rgrdlaw.com-- represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in nine offices, the firm represents hundreds of public and multi- employer pension funds with combined assets under management in excess of $2 trillion. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designed, developed, manufactured and sold advanced rechargeable lithium-ion batteries and battery systems and provided research and development services to government agencies and commercial customers. A123 was the recipient of a $249 million federal grant from the Obama administration. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Brown Rudnick LLP and Saul Ewing LLP serve as counsel to the Official Committee of Unsecured Creditors. Prior to the bankruptcy filing, A123 had an agreement to sell an 80% stake in the business to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. When it filed for bankruptcy, the Debtors presented a deal to sell all assets to Johnson Controls Inc., subject to higher and better offers. At the auction in December 2012, most of the assets ended up being sold for $256.6 million to Wanxiang. The deal received approval from the Committee on Foreign Investment in the U.S. on Jan. 29, 2013. A123 Systems was renamed B456 Systems Inc., following the sale. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. In May 2013, the Delaware bankruptcy court confirmed the liquidation plan for A123 Systems Inc. The Plan repays all secured creditors in full with some money left over for unsecured creditors. Holders of $143.8 million in subordinated notes are projected to recoup 36.3 percent. If B456 Systems Inc., the company's new name, reduces claims to amounts the company believes correct, the recovery on the subordinated notes could increase to 62.9 percent, according to the disclosure statement. General unsecured creditors, who previously were said to have $124 million in claims, would have roughly the same recovery. ADOC HOLDINGS: Wants Exclusivity Extended Until Jan. 31 ------------------------------------------------------- Adoc Holdings, Inc., formerly Coda Holdings, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive time period during which the Debtors may solicit acceptances of a Chapter 11 Plan to and including Jan. 31, 2014. On Sept. 24, 2013, the Court entered an order approving the disclosure Statement for the Debtors' Plan of Liquidation. A hearing on the confirmation of the Second Amended Plan is scheduled on Nov. 1, 2013, at 11:00 a.m. The Debtors' initial exclusive solicitation period is set to expire on or about Oct. 28, 2013, a few days before the confirmation hearing. The Debtors tell the Court that: * they have made substantial progress in the cases to date. * this is the Debtors' first requested extension. * the requested three-month extension of exclusive solicitation period will not prejudice the legitimate interests of creditors and other parties-in-interest, and will afford them a meaningful opportunity to pursue a consensual Chapter 11 plan. As reported in the TCR on Sept. 27, 2013, according to the Disclosure Statement, the central component of the Plan is the establishment of the liquidation trust to liquidate the Debtors' assets, including, without limitation, certain causes of action. The Plan is a product of extensive arms'-length negotiations between the Debtors, creditors committee and the secured parties to maximize recoveries to the Debtor's creditors and provides for a fair allocation of the Debtor' remaining assets as a consequence of the sale transaction with the purchaser. The Plan effectuates the goal by implementing the RSA and term sheet, which embodies the global settlement agreement negotiated by and among the Debtors, creditors committee and secured parties. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CODA_HOLDINGS_2ds.pdf About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- made an electric auto that was a commercial failure. The company marketed the Coda Sedan, which sold only 100 copies. It was an electrically powered version of the Hafei Saibao, made in China. After bankruptcy, Los Angeles- based Coda intends to concentrate on making stationery electric- storage systems. CODA Holdings, Inc., Coda Energy LLC and three other affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-11153) on May 1, 2013, to enable the Company to complete a sale, confirm a plan, and emerge from bankruptcy in a stronger position to execute its new business plan. The Company expects the sale process to take 45 days to complete. FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide DIP financing to enable the Company's energy storage business to remain fully operational during the restructuring process. The consortium, or its designee, will also as stalking horse bidder to acquire the Company post-bankruptcy. In addition, the Company will seek to monetize value of its existing automotive business assets. CODA disclosed assets of $10 million to $50 million and liabilities of less than $100 million. Coda Automotive Inc., disclosed $24,950,641 in assets and $95,859,413 in liabilities as of the Chapter 11 filing. The Debtors have incurred prepetition a significant amount of secured indebtedness: secured notes of with principal in the amount of $59.1 million; term loans in the principal amount of $12.6 million; and a bridge loan with $665,000 outstanding. FCO and other bridge loan lenders have "enhanced priority" over other secured noteholders that did not participate in the bridge loans, pursuant to the intercreditor agreement. Jeffrey M. Schlerf, Esq., John H. Strock, Esq., and L. John Bird, Esq., at Fox Rothschild LLP are the proposed counsel for the Debtors. CODA's legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its chief restructuring officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC's legal advisor. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe represents the Debtors in their restructuring efforts. The Committee tapped Brown Rudnick as its counsel and Deloitte Financial Advisory Services LLP as its financial advisor. AGFEED INDUSTRIES: Committees See No Need to Investigate Fraud -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AgFeed Industries Inc. and the official committees representing creditors and shareholders are unanimously against the idea of appointing an examiner to investigate what the U.S. Trustee called a "massive fraud" in the company's Chinese operations. AgFeed is a hog producer in the U.S. and China that filed for Chapter 11 protection in mid-July. According to papers filed this month by the Justice Department's bankruptcy watchdog, managers of the unit in China created multiple sets of accounting books while reporting fictitious sales and receivables. According to the report this month, AgFeed completed the sale of the U.S. operations to three buyers for $79.5 million, including $53.4 million in cash. The company has two buyers under contract to purchase operations in China for $50.5 million. There will be a hearing on Oct. 10 for approval of auction and sale procedures regarding the Chinese business. Opposing the appointment of an examiner, the creditors' committee said the second sale "may" generate sufficient funds so unsecured creditors are fully paid, "with excess proceeds for the equity holders." The shareholders' committee, too, is opposed to an examiner, saying it's premature. The report notes that the company and the committees point to a provision in the contract with the Chinese buyers where they have the right to terminate if there is an examiner appointed with "expanded powers." Consequently, they are concerned that the buyers may back out if the court calls for an investigation. The buyers are Good Charm International Development Ltd. and Ningbo Tech-Bank Co. The hearing for appointment of an examiner is set for Sept. 30. About AgFeed Industries AgFeed Industries, Inc., and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013, with a deal to sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million, absent higher and better offers. The Debtors estimated assets of at least $100 million and debts of at least $50 million. Keith A. Maib signed the petition as chief restructuring officer. Hon. Brendan Linehan Shannon presides over the case. Donald J. Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors Inc. acts as the Debtors' financial advisor. The Debtors' claims and noticing agent is BMC Group, Inc. The U.S. Trustee has appointed a five-member official committee of unsecured creditors to the Chapter 11 cases. The Creditors' Committee tapped Lowenstein Sandler as lead bankruptcy counsel and Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as the Creditors' Committee's financial advisor. A three-member official committee of equity security holders was also appointed to the Chapter 11 cases. The Equity Committee tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as co-counsel. AMERICAN AIRLINES: U.S. Rebuffs Data Request in Antitrust Suit -------------------------------------------------------------- Joseph Checkler, writing for The Wall Street Journal, reported that the Justice Department said it is allowed to withhold information about whom it interviewed in its analysis of AMR Corp.'s merger with US Airways Group Inc., information the airlines are seeking in their fight against a federal suit to block the deal. According to the report, in a filing on Sept. 28, the Justice Department said U.S. Supreme Court precedent protects the government from a "naked, general, demand" for the facts the airlines want. Such information could "necessarily reveal the opinions and mental processes of counsel, and therefore is improper," the government said in the filing with U.S. District Court in Washington, D.C. US Airways and AMR, the parent of American Airlines, said they wanted a court order forcing the Justice Department to turn over information about third parties that were interviewed, including their names and what they said, the report related. The carriers want the information, which they described as routine, to determine how the department reached it decision to block the merger. Lawyers for the airlines said in their filing that the Justice Department "has tried this tactic before" in antitrust cases and lost each time, the report further related. The airlines cited three cases, including a 1999 suit against AMR and subsidiary American Eagle that accused the airlines of "predatory" pricing against low-cost carriers, the report said. AMR won that case, the report noted. 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 bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. The plan confirmation order means that if AMR and US Airways win the Justice Department lawsuit or settle with the government, the merger plan can go into effect. The antitrust suit is U.S. v. US Airways Group Inc., 13-cv-1236, U.S. District Court, District of Columbia (Washington). 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) AMERITYRE CORPORATION: Incurs $1.1-Mil. Net Loss in Fiscal 2013 --------------------------------------------------------------- Amerityre Corporation filed with the U.S. Securities and Exchange Commission on Sept. 27, 2013, its annual report on Form 10-K for the fiscal year ended June 30, 2013. HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company's recurring losses from operations. The Company reported a net loss of $1.1 million on $3.6 million of total net revenues in fiscal 2013, compared with a net loss of $1.2 million on $4.4 million of total net revenues in fiscal 2012. "The decrease in the net loss is primarily due to the decreases in selling, general and administrative expenses. The net loss also includes a $43,702 loss on the disposal of assets relating to the disposition of fixed assets from fiscal 2007." The Company's balance sheet at June 30, 2013, showed $2.3 million in total assets, $1.3 million in total liabilities, and stockholders' equity of $1.0 million. A copy of the Form 10-K is available at http://is.gd/9MzbJr Boulder City, Nevada-based Amerityre engages in the research and development, manufacturing and sale of polyurethane tires. ANCHOR BANCORP: Completes $175 Million Recapitalization ------------------------------------------------------- Anchor BanCorp Wisconsin Inc. has completed its previously announced $175 million recapitalization. "We have been aggressively working for four years to get to this point, and we're proud that the recapitalization effort is now complete, positioning AnchorBank for a full return to profitability and growth," said Chris Bauer, president & CEO for AnchorBank. Mr. Bauer came out of retirement in 2009 to lead the recapitalization effort, which included reorganizing and recruiting a new senior management team. "Anchor BanCorp's pre-packaged reorganization, from beginning to end, was completed in less than 60 days. That in itself is a testament to the strength of our plan, and overwhelming support for our return to health, which will have extremely positive impact on the Wisconsin economy," Mr. Bauer said. With the recapitalization complete, AnchorBank's capital levels now exceed the thresholds for a "well capitalized" bank under applicable regulatory guidelines and are among the highest capital ratios of banks in Wisconsin. "We are excited about the many opportunities this recapitalization will represent for AnchorBank, its customers, its employees, and the communities we serve," said Mr. Bauer. "With the recapitalization complete, AnchorBank now has many great things on the horizon. With over 700 employees and 55 offices, we can now continue this positive momentum in our local communities and around the State of Wisconsin. We look forward to being one of Wisconsin's premier financial institutions." Sandler O'Neill + Partners, L.P.' served as financial advisor and placement agent and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Anchor in connection with the recapitalization. About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought protection under Chapter 11 of the Bankruptcy Code (Case No. 13- 14003, Bankr. W.D. Wis.) on Aug. 12, 2013, to implement a "pre- packaged" plan of reorganization in order to facilitate the restructuring of the Company and the recapitalization of AnchorBank, fsb, a wholly-owned subsidiary of the Company. As of March 31, 2013, the Debtor listed total assets of $2,367,583,000 and total liabilities of $2,427,447,000. Chief Judge Robert D. Martin oversees the Chapter 11 case. The Debtor is represented by Kerkman Dunn Sweet DeMarb as lead bankruptcy counsel and Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel. CohnReznick LLP serves as the Debtor's financial advisor. Anchor BanCorp is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. In connection with the Plan, the Company has entered into definitive stock purchase agreements with institutional and other private investors as part of a $175 million recapitalization of the institution. No new investor will own in excess of 9.9 percent of the common equity of the recapitalized Holding Company. The reorganization filing includes only Anchor BanCorp, the holding company for the Bank, allowing the Bank to remain outside of bankruptcy and to continue normal operations. The Bank operates 55 offices throughout Wisconsin. Operations at the Bank will continue as usual throughout the reorganization process. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ANCHOR BANCORP: Pre-Pack Plan Declared Effective Sept. 27 --------------------------------------------------------- The pre-packaged plan of reorganization of Anchor BanCorp Wisconsin Inc. became effective on Sept. 27, 2013. The following is a summary of the transactions consummated on or before the Effective Date pursuant to the Plan confirmed by the Bankruptcy Court on Aug. 30, 2013. Delaware Conversion Pursuant to the Plan of Reorganization, on Sept. 25, 2013, the Company (i) converted from a Wisconsin corporation to a Delaware corporation in accordance with Section 265 of the Delaware General Corporation Law and (ii) filed a Certificate of Incorporation with the Secretary of State of the State of Delaware, to, among other things, declassify the Board of Directors of the Company, increase the number of authorized shares of common stock of the Company and adopt certain restrictions on acquisitions and dispositions of securities of the Company. The Amended Charter provides for (i) 2,000,000,000 shares of authorized common stock, par value $0.01 per share, and (ii) 1,000,000 shares of authorized preferred stock, par value $0.01 per share. Private Placements In connection with the Plan of Reorganization, on Aug. 12, 2013, the Company entered into stock purchase agreements with certain institutional and other private investors and directors and officers of the Company for the purchase and sale of 1,750,000,000 shares of the Company's Common Stock at a purchase price of $0.10 per share. The closing of the Private Placements occurred on the Effective Date. Pursuant to the terms and subject to the conditions of the Stock Purchase Agreements, the Company issued and sold the Common Stock to (i) certain Investors such that, after giving effect to the transactions contemplated in the Plan of Reorganization, each Investor owns up to 9.9 percent of the Common Stock issued by the Company pursuant to the Private Placements and the Treasury Issuance, for an aggregate purchase price of $87,780,000, (ii) certain other Investors such that, after giving effect to the transactions contemplated in the Plan of Reorganization, each Investor owns up to 4.9 percent of the Common Stock issued by the Company pursuant to the Private Placements and the Treasury Issuance, for an aggregate purchase price of $83,720,000, and (iii) certain directors and officers of the Company for an aggregate purchase price of $3,500,000. The Company received gross proceeds of $175,000,000 as a result of the Private Placements. TARP Exchange On Jan. 30, 2009, pursuant to the Treasury's Capital Purchase Program, the Company issued and sold to the Treasury 110,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B of the Company with an aggregate liquidation preference of $110,000,000. In addition, the Company issued to the Treasury a warrant to purchase up to 7,399,103 shares of the Company's common stock, par value $0.10 per share, at an initial per share exercise price of $2.23. Pursuant to the Plan of Reorganization, the Company, on the Effective Date and immediately following the consummation of the Private Placements, (i) exchanged the TARP Preferred Stock for 60,000,000 shares of Common Stock and (ii) cancelled the TARP Warrant in its entirety. Cancellation of Legacy Common Stock As of July 31, 2013, the Company had 21,247,225 shares of Legacy Common Stock issued and outstanding. On the Effective Date, immediately following the consummation of the TARP Exchange, all shares of the oustanding Legacy Common Stock were cancelled for no consideration pursuant to the Plan of Reorganization. In connection with the cancellation of the Legacy Common Stock pursuant to the Plan of Reorganization, the Rights Agreement, dated as of Nov. 5, 2010, by and between the Company and American Stock Transfer & Trust Company, LLC, was terminated on the Effective Date in accordance with its terms. Senior Debt Settlement The Company was a party to the Amended and Restated Credit Agreement, dated as of June 9, 2008, among the Company, the lenders from time to time a party thereto, and U.S. Bank National Association, as administrative agent for the Lenders. As of June 30, 2013, the aggregate amount of obligations under the Credit Agreement was approximately $183,000,000. On the Effective Date, pursuant to the Plan of Reorganization, the Company satisfied all of its obligations under the Credit Agreement by a cash payment to the Lenders of $49,000,000. All Other Claims Unaffected All other claims were unaffected by, and were or will be paid in full under, the Plan of Reorganization. Treasury Secondary Sales On the Effective Date, following the effectiveness of the Plan of Reorganization, the Treasury sold to certain institutional investors all of the shares of Common Stock delivered to the Treasury in connection with the Treasury Issuance at a purchase price equal to $0.10 per share under the securities purchase agreements, dated as of Sept 19, 2013, among the Treasury, the Secondary Investor and (with respect to certain provisions) the Company. In connection with the Secondary Treasury Sales, the Company entered into secondary sale purchaser agreements with the Secondary Investors pursuant to which the Company made certain representations and warranties to the Investor and provided rights to the Secondary Investors similar to the rights provided to Investors under the Stock Purchase Agreements. In connection with the Secondary Treasury Sales, the Treasury received gross proceeds of $6,000,000 and ceased to be a stockholder of the Company. Deregistration under the Securities Exchange Act Anchor BanCorp filed a Form 15 with the U.S. Securities and Exchange Commission to deregister its common stock under the Securities Exchange Act of 1934, as amended. As of Sept. 27, 2013, there were 59 holders of record of the common shares. Additional information is available for free at: http://is.gd/0bNMdy About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought protection under Chapter 11 of the Bankruptcy Code on Aug. 12, 2013 (Case No. 13-14003, Bankr. W.D. Wis.) to implement a "pre-packaged" plan of reorganization in order to facilitate the restructuring of the Company and the recapitalization of AnchorBank, fsb, a wholly-owned subsidiary of the Company. As of March 31, 2013, the Debtor listed total assets of $2,367,583,000 and total liabilities of $2,427,447,000. Chief Judge Robert D. Martin oversees the Chapter 11 case. The Debtor is represented by Kerkman Dunn Sweet DeMarb as lead bankruptcy counsel and Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel. CohnReznick LLP serves as the Debtor's financial advisor. Anchor BanCorp is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. In connection with the Plan, the Company has entered into definitive stock purchase agreements with institutional and other private investors as part of a $175 million recapitalization of the institution. No new investor will own in excess of 9.9 percent of the common equity of the recapitalized Holding Company. The reorganization filing includes only Anchor BanCorp, the holding company for the Bank, allowing the Bank to remain outside of bankruptcy and to continue normal operations. The Bank operates 55 offices throughout Wisconsin. Operations at the Bank will continue as usual throughout the reorganization process. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. APERION COMMUNITIES: Facing Conversion; Creditors' Meeting Moved ---------------------------------------------------------------- The meeting of creditors under 11 U.S.C. Sec. 341(a) in the chapter 11 cases of Aperion Communities LLLP has been adjourned to a date yet to be set. The first meeting of creditors was held Aug. 22. At that meeting, Daniel Bray, the Debtor's representative, was found not to be in possession of necessary knowledge to provide competent testimony regarding the Debtor's financial history and condition. That meeting has been adjourned pending the agreed attendance of another representative of the Debtor to appear and provide testimony as the Debtor's authorized representative. Failure to do so will result in the U.S. Trustee motion to convert the case to Chapter 7. Those that attended the Aug. 22 meeting include Johnson Bank and Arizona Business Bank. Aperion Communities LLLP filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 13-12040) on July 15, 2013. Adam E. Hauf, Esq., at The Forakis Law Firm PLC, serves as counsel. The Debtor estimated at least $10 million in assets and $1 million to $10 million in liabilities in its schedules. APERION COMMUNITIES: Files List of Top 12 Unsecured Creditors ------------------------------------------------------------- Aperion Communities LLP submitted to the Bankruptcy Court a list that identifies its top 12 unsecured creditors. The three largest unsecured creditors are: Entity Claim Amount ------ ------------ Johnson Bank $27,990,593 3131 East Camelback Road Phoenix, AZ 85016 IMH Special Assets NT 161, LLC $6,449,026 C/O Snell & Wilmer One Arizona Center, 400 E Van Buren Phoenix, AZ 85004-2202 IMH Special Assets NT 168, LLC $2,164,193 C/O SNELL & WILMER One Arizona Center, 400 E. Van Buren Phoenix, AZ 85004-2202 A copy of the creditors' list is available for free at: http://bankrupt.com/misc/APERION_COMMUNITIES_creditorslist.pdf Aperion Communities LLP filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 13-12040) on July 15, 2013. Adam E. Hauf, Esq., at The Forakis Law Firm PLC, serves as the Debtor's counsel. The Debtor estimated at least $10 million in assets and $1 million to $10 million in liabilities in its schedules. ARI-RC 6: 12 Debtors Have Until Oct. 7 to File Schedules -------------------------------------------------------- The U.S. Bankruptcy Court Central District of California extended until Oct. 7, 2013, the deadline by which 12 debtor affiliates of ARI-RC 6, LLC, to file their schedules of assets and liabilities and statements of financial affairs. Each of the 12 Debtors is a tenant in common holding a percentage interest in the undivided whole of the improved property located at 1525 and 535 Ranch Conejo Boulevard, in Thousand Oaks, California. According to Daniel H. Reiss, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los Angeles, California, the three tranches of Debtors presents a challenge in properly recording what portions of claims to unsecured creditors are prepetition and which portions are postpetition because the bankruptcy filing dates of the Debtors cover a period of July 15, 2013, to Sept. 9, 2013. The Debtors sought the extension for the specific purpose of allowing bills for September to be received and analyzed for calculating the third-waive Debtors' unsecured claims, Mr. Reiss stated. About ARI-RC ARI-RC 6, LLC, and four related entities -- ARI-RC 14, LLC, ARI-RC 12, LLC, ARI-RC 21, LLC, ARI-RC 23, LLC -- filed voluntary petitions under Chapter 11 on July 15, 2013. Kenneth Greene signed the petitions as president. ARI-RC 3, LLC, and nine affiliates filed for Chapter 11 protection on Aug. 1, 2013. ARI-RC 11 and three more affiliates subsequently filed their own Chapter 11 cases on Aug. 2, 2013. The petitions were signed by R. Frederick Hodder, Jr. and Monroe Sawhill Hodder, trustees. The Debtors own tenant in common (TIC) interests in two commercial buildings commonly known as Rancho Conejo I and II, located at 1525 and 1535 Rancho Conejo Boulevard, in Thousand Oaks, California. The Debtors and 16 related TIC Investors, who have not filed for bankruptcy, are passive investors with varying percentage ownership interests in the Property. The Debtors' cases are jointly administered under the lead case of ARI-RC 6, Case No. 13-14692, in the U.S. Bankruptcy Court for the Central District of California. The Debtors estimated assets and debts at $10 million to $50 million at the time of the filings. Judge Alan M. Ahart presides over the cases. Daniel H. Reiss, Esq. -- DHR@LNBYB.COM -- at Levene, Neale, Bender, Yoo & Brill L.L.P. counsel for Debtors ASPEN GROUP: Sells $2 Million Convertible Debenture --------------------------------------------------- Aspen Group, Inc., sold a $2,240,000 Original Issue Discount Secured Convertible Debenture and 6,736,842 warrants in a private placement offering to Hillair Capital Investments L.P. for gross proceeds of $2 million. The Debenture pays 8 percent interest per annum, payable monthly on the first day of each calendar month beginning on Nov. 1, 2013, and are convertible into shares of the Company's common stock at $0.3325 per share at any time at the option of the holder. The Company is required to redeem 25 percent of the Debentures on Nov. 1, 2014, and Jan. 1, 2015, and the remaining 50 percent on April 1, 2015. In lieu of a cash Periodic Redemption payment, the Company may elect to pay all or part of a Periodic Redemption in shares of common stock based on a conversion price equal to the lesser of: (i) the Conversion Price; and (ii) 90 percent of the average of the 20-day volume weighted average prices during the period ending on the third trading day immediately prior to the Company providing the required notice to the holder. Any time after the six-month anniversary of the investment, the Company may redeem the outstanding Debenture for 120 percent of the outstanding principal amount on the Debenture. The Company's right to pay interest or a Periodic Redemption in common stock or to redeem the outstanding Debenture is subject to the Company meeting certain equity conditions. The warrants (i) are exercisable over a five-year period at the Conversion Price and (ii) have cashless exercise rights in the event that the Company does not have an effective registration statement covering the shares underlying the warrants within 90 days of the closing date. The Debenture is secured by all of the assets of the Company and Aspen University Inc., which is junior to JP Morgan Chase's first lien under the Subsidiary's existing line of credit. Additionally, the Subsidiary guaranteed the repayment of the Debenture and Mr. Michael Mathews, the Company's Chairman of the Board and Chief Executive Officer, subordinated his rights to payments under his outstanding notes to those of the Debenture holder. In connection with the offering, the Company paid Laidlaw & Company (UK) Ltd. a placement agent fee of $200,000, and issued them a total of 1,347,368 warrants with identical terms as the warrants issued to the investor. The net proceeds to the Company were approximately $1.7 million. On Sept. 25, 2013, in connection with the offering, Mr. Michael Mathews, the Company's chairman of the Board and chief executive officer, extended the due dates of his three outstanding notes to April 2, 2015. Prior to the amendments, the outstanding notes had expirations dates of Dec. 31, 2013, and Aug. 31, 2014. About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88 percent of the Company's degree-seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company reported a net loss of $6.01 million on $2.68 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.13 million on $2.34 million of revenues during the prior year. The Company's balance sheet at July 31, 2013, showed $3.77 million in total assets, $3.96 million in total liabilities and a $194,085 total stockholders' deficiency. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the transition period ending April 30, 2013. The independent auditors noted that the Company has a net loss allocable to common stockholders and net cash used in operating activities for the four months ended April 30, 2013, of $1,402,982 and $918,941, respectively, and has an accumulated deficit of $12,740,086 at April 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. ATLANTIC & PACIFIC: NY State Court Rules in Employee Suit --------------------------------------------------------- SOLOMON MOHAMMED, Plaintiff, v. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., THE FOOD EMPORIUM and DAN WODZENSKI, Defendant, 115608/10 (NY Sup.), sues for discrimination and termination in violation of the city and state Human Rights Laws. The plaintiff moves for a default judgment against one of the defendants while that defendant cross-moves to dismiss. Plaintiff claims he was employed by both A&P and The Food Emporium. In a Sept. 23 slip opinion available at http://is.gd/u8FuOOfrom Leagle.com, Judge Louis B. York of the Supreme Court of New York County denied plaintiff's motion for default judgment against defendant Wodzenski; and granted Wodzenski's cross-motion but only to the extent of granting defendant 20 days from the service of the Order to answer the Complaint, and the plaintiff has 20 days to Reply. Attorney for the Plaintiff: Mark L. Lubelsky, Esq. 123 West 18th Street 8th Floor New York, NY 10011 Tel: (212) 242-7480 Attorneys for the Defendants: Douglas P. Catalano, Esq. Neil G. Sparber, Esq. FULBRIGHT & JAWORSKY, LLP 666 Fifth Avenue New York, NY 10103 Tel: (212) 313-3000 About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. Before filing for bankruptcy in 2010, A&P operated 429 stores in eight states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, served as counsel to the Debtors. Kurtzman Carson Consultants LLC acted as the claims and notice agent. Lazard Freres & Co. LLC served as the financial advisor. Huron Consulting Group served as management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. The Bankruptcy Court entered an order Feb. 27, 2012, confirming a First Amended Joint Plan of Reorganization filed Feb. 17, 2012. A&P consummated its financial restructuring and emerged from Chapter 11 as a privately held company in March 2012. A&P sold or closed stores during the bankruptcy proceedings. It emerged from bankruptcy with 320 supermarkets. Among others, A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. Mount Kellett Capital Management LP, The Yucaipa Companies LLC and investment funds managed by Goldman Sachs Asset Management, L.P., provided $490 million in debt and equity financing to sponsor A&P's reorganization plan and complete its balance sheet restructuring. JP Morgan and Credit Suisse arranged a $645 million exit financing facility. AUGUST WILSON CENTER: Dollar Bank Files $7MM Foreclosure Petition ----------------------------------------------------------------- Chron.com reports that a US$7 million foreclosure petition has been filed against Pittsburgh's August Wilson Center for African American Culture. Pittsburgh Tribune-Review reported that Dollar Bank filed its petition in Allegheny County Court on Sept. 26 and asked for expedited appointment of a receiver, according to Chron.com. The report notes that Dollar Bank claims the center is $7.06 million in default of its mortgage, and is asking that the Center be placed in receivership. The report relates that the Wilson Center opened in 2009, but ended fiscal 2013 with a $1.8 million deficit. The report says that the Sheriff's Office says no date has been set for a foreclosure auction. Wilson was born in Pittsburgh, and a New York city theatre is named after the Pulitzer-prize winning playwright. BEAR VALLEY: Kanter Loses Appeal in Moorefield Dispute ------------------------------------------------------ MOOREFIELD CONSTRUCTION, INC., Plaintiff, Cross-defendant and Respondent, v. GARY KANTER, Defendant, Cross-complainant and Appellant; RONEN ARMONY, Cross-defendant and Respondent, No. G047550 (Calif. App.), is an appeal following a motion for judgment on the pleadings by cross-defendants Moorefield Construction, Inc. and Ronen Armony on Gary Kanter's cross- complaint. Mr. Kanter's first argument on appeal is that evidence necessary to prove his cause of action for fraud was excluded by the trial court based on Bank of America, etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258 (Pendergrass), which was recently overturned by Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169 (Riverisland). Pendergrass held that parol evidence of fraud "must tend to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing." (Pendergrass, supra, 4 Cal.2d at p. 263.) Riverisland overruled Pendergrass: "[W]e conclude that Pendergrass was an aberration. It purported to follow [Code of Civil Procedure] section 1856 [citation], but its restriction on the fraud exception was inconsistent with the terms of the statute, and with settled case law as well." (Riverisland, supra, 55 Cal.4th at p. 1182.) In a ruling issued Tuesday, the Court of Appeals of California, Fourth District, Division Three, found that Mr. Kanter, who acted as his own attorney below, failed to establish an adequate record as to which specific items of evidence were admitted and excluded, which precludes meaningful review. Further, even if he had done so, his fraud cause of action was doomed to failure due to the lack of evidence of actual misrepresentations and reasonable reliance. Mr. Kanter also argues that the court wrongfully denied his motion to dismiss filed with the clerk in the middle of trial. The Appeals Court, however, held that Mr. Kanter is incorrect, because a motion to dismiss may only be filed with the clerk before trial commences. He never made such a motion to dismiss before the court. The Appeals Court, therefore, affirmed. Mr. Kanter, through Bear Valley Family Limited Partnership, owned real property in Victorville. In 2008, Moorefield Construction, a contractor, entered into three construction contracts with Bear Valley to develop these properties. Two of the three contracts involved parcels referred to as "pad 4" and "pad 6," while the other contract was for general site work. The contract price was $1,027,694. On July 20, 2011, the still unpaid Moorefield Construction sued Mr. Kanter personally for breach of the October 2009 guarantee. The single cause of action alleged that Mr. Kanter had failed to pay the $473,648.66 (representing the principal and agreed-upon interest) under the terms of the guarantee. Mr. Kanter, representing himself, filed an answer in January 2012. On Feb. 23, 2012, Mr. Kanter filed a cross-complaint against Moorefield Construction and Armony, alleging fraud, breach of contract, conspiracy, and breach of fiduciary duty. The only fraud specifically alleged was that Armony and Moorefield Construction represented that they were going to remove Mr. Kanter from his obligations under the guarantee agreement. Mr. Kanter alleged that a string of e-mails between the parties formed an agreement under which Moorefield Construction and Armony agreed to remove Mr. Kanter from his role as guarantee, but instead they signed the Moorefield/Armony agreement which kept Mr. Kanter as guarantee if Armony defaulted. He also alleged these same essential facts constituted a breach of contract, a conspiracy, and breach of fiduciary duty. A copy of the Court of Appeals' Sept. 24, 2013 opinion is available at http://is.gd/riMHJYfrom Leagle.com. About Bear Valley Family Based in Costa Mesa, California, Bear Valley Family Limited Partnership filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17893) on June 2, 2011. The Law Office of Christopher P. Walker, P.C., in Anaheim Hills, Calif., served as the Debtor's general bankruptcy counsel. Judge Robert N. Kwan presided over the case. The Debtor scheduled assets of $14,006,000 and liabilities of $7,353,409. H. Mark Mersel, Esq., and Sheri Kanesaka, Esq., at Bryan Cave LLP, in Irvine, Calif., represented secured creditor Armed Forces Bank, N.A., successor by merger to Bank Midwest, N.A. Brent H. Blakely, Esq., and Courtney Stuart Alban, Esq., at Blakely Law Group, in Hollywood, Calif., represented Ronen Armony as counsel. Ronen Armony claims to be the real party-in-interest in the Debtor's case. As reported by the Troubled Company Reporter on Jan. 31, 2012, the Bankruptcy Court dismissed the Chapter 11 case at the behest of Mr. Armony. BROWN SHOE: Good Performance Prompts Moody's to Lift CFR to B1 -------------------------------------------------------------- Moody's Investors Service upgraded Brown Shoe Company, Inc.'s Corporate Family Rating to B1 from B2 and Probability of Default Rating to B1-PD from B2-PD. Concurrently, Moody's affirmed the company's senior unsecured notes rating of B3 and upgraded the Speculative Grade Liquidity ("SGL") rating to SGL-1 from SGL-2. The ratings outlook is stable. The CFR upgrade to B1 reflects the meaningful improvement in Brown Shoe's operations as a result of 2011-2013 turnaround efforts, as well as debt repayment. Brown Shoe's profit margins expanded after actions including the closure of a number of underperforming Famous Footwear stores, the sale of the AND1, Avia and Nevados brands and exit from several license agreements, supply chain rationalization, successful marketing campaigns, and optimization of inventory management. The company's improved credit metrics, including LTM leverage of 4.8 times debt/EBITDA (down over 1.0 time since year-end 2011), have brought Brown Shoe's metrics in- line with levels appropriate for the B1 rating category. Moody's expects the company to maintain leverage below 5.0 times in the near to medium term. The upgrade of the SGL rating to SGL-1 is supported by ample availability under the $530 million revolving credit facility following the repayment of nearly all borrowings, as well as expectations for positive free cash flow and significant cash balances in the next 12-18 months. Rating actions: Issuer: Brown Shoe Company, Inc. Corporate Family Rating, upgraded to B1 from B2; Probability of Default Rating, upgraded to B1-PD from B2-PD; $200 million senior unsecured notes due 2019, affirmed at B3 (LGD5, 76% from LGD5, 77%); Speculative Grade Liquidity Rating, upgraded to SGL-1 from SGL-2 Rating Rationale: Brown Shoe's B1 Corporate Family Rating is constrained primarily by the company's moderately high lease-adjusted leverage in the context of low margins, narrow product focus, and the sensitivity to shifts in fashion and consumer discretionary spending characteristic of a specialty apparel retailer. Nonetheless, the rating considers favorably Brown Shoe's improved credit metrics as a result of its recent portfolio realignment and turnaround initiatives. Moreover, the CFR is supported by the company's recognized brands, national footprint and meaningful global presence, very good liquidity, and balanced financial policies. The stable outlook reflects Moody's expectations for modest revenue growth and sustained or improved profit margins. The outlook also incorporates the expectation that the company will maintain a very good liquidity profile. Ratings could be lowered if recent positive trends in revenues and EBITDA reverse, financial policy becomes more aggressive or if the company's liquidity profile erodes. Quantitatively, ratings could be lowered if Moody's comes to expect leverage to remain above 5.0 times for an extended period. Ratings could be upgraded if the company sustains sales growth while achieving meaningful operating margin expansion. Quantitatively, the ratings could be upgraded if the company maintains debt/EBITDA around 4.0 times. An upgrade would also require maintenance of a very good liquidity profile and balanced financial policies, including the absence of significant debt- financed acquisitions or shareholder-friendly activities. The principal methodology used in this rating was the Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in St. Louis, Missouri, Brown Shoe Company, Inc. is a retailer (two-thirds of sales) and a wholesaler (one-third of sales) of footwear. Its retail chains include about 1,059 Famous Footwear stores nationwide, a banner focused on moderately priced footwear targeting families, as well as over 200 specialty retail stores mostly consisting of Naturalizer stores in the US, Canada, and China. Through its wholesale divisions, Brown Shoe designs and markets footwear brands including Naturalizer, Dr. Scholl's, LifeStride, Sam Edelman, Via Spiga, Franco Sarto, Vince, Fergie, Carlos and Ryka. Revenues for the last twelve months ended August 3, 2013, were approximately $2.6 billion, with the Famous Footwear retail chain generating over half of total sales. CAESARS ENTERTAINMENT: Fitch Says Refinance Terms Negative ---------------------------------------------------------- Caesars Entertainment Corp.'s (Caesars; the parent, CEC) PropCo refinancing terms as reported by Bloomberg and other media outlets is a slight negative for the ratings of Caesars Entertainment Resorts Properties, LLC (CERP), according to Fitch Ratings. Per Bloomberg, CERP's first lien note par amount will increase to $1.0 billion-$1.5 billion from the original $500 million amount originally announced while the first lien term loan would decline to $2.0 billion-$2.5 billion from $3.0 billion. The reported pricing on the first and second lien notes is also slightly higher than Fitch originally modeled. Factoring in the reported pricing and the shift towards more expensive notes, Fitch revised the interest expense for CERP upwards by $24 million assuming the high end of the first lien notes issuance range. This is a credit negative relative to our prior base case estimates, but we still expect positive free cash flow (FCF) in 2014 of around $40 million-$50 million and more than $100 million in FCF by 2016 at CERP. CERP's FCF profile remains commensurate with its 'B-' issuer default rating (IDR) and Stable Outlook. However, the FCF buffer is somewhat diminished and provides less cushion against potential disruptions related to Caesars Entertainment Operating Company (CEOC). These could include change in lease terms related to the Octavius Tower and Project Linq (assets being leased to CEOC by CERP), change in terms of the shared service agreement between CERP and CEOC, and other issues relating to a potential default at CEOC. There are no implications on CERP debt's recovery prospects in an event of default since the par amount of first lien and second lien debt will remain the same as before. On Sept. 25, CEC announced it would issue 10.0 million shares plus a 1.5 million underwriter option, which could raise up to $241 million of gross proceeds based on its pricing date of Sept 25. We view this as a slight credit positive for CEOC, as it provides the parent additional liquidity to fund cash burn at CEOC. However, we still forecast a liquidity crunch at CEOC around 2015 based on CEOC's negative FCF as well as other uses of cash such as debt maturities. Options to forestall or avert a liquidity crunch past 2015 include additional first-lien issuance (has a $1.15 billion accordion option) and/or additional asset sales. CAPABILITY RANCH: Court Confirms Reorganization Plan ---------------------------------------------------- On Sept. 27, 2013, the U.S. Bankruptcy Court for the District of Nevada confirmed Capability Ranch, LLC's First Amended Plan dated June 17, 2013, as amended by the Amendment to Debtor's First Amended Plan of Reorganization dated June 19, 2013. Classes 1, 2, 3, 4 and 7 voted to accept the Plan. Classes 5 and 6 are unimpaired under the Plan and are conclusively deemed to accept the Plan pursuant to Section 1126(c) of the Bankruptcy Code. Class 8 submitted votes accepting the Plan after the ballot deadline. As reported in the TCR on Jul 9, 2013, Judge Bruce A. Markell conditionally approved the Debtor's Amended Disclosure Statement on June 20, 2013. The Disclosure Statement outlines the classification and treatment of 9 classes of claims and interests against and in the Debtor. Claim Classes 1 to 4 are claims of American AgCredit. Class 1 Claim -- due in 5 years, will be paid with 3.83% interest per annum while Class 2 Claim -- due in 10 years, will be paid with a 3.63% interest per annum. Claim Classes 3 and 4 will be paid within 30 days of the Effective Date, with a 5.75% interest per annum. Class 5 Other Secured Claims and Class 6 Priority Unsecured claims will be paid in full in cash. The Debtor will pay a $3,000 monthly payment on account of all Class 7 Allowed General Unsecured Claims, estimated to total $160,890, until all Class 7 Claims are paid in full. Class 8 Related Party Secured Claims, estimated to total $76,529,917, will retain their liens, with all sums due and payable on June 30, 2033. Holders of Class 9 Equity Securities in the Debtor will retain all their legal interests. Copies of the Disclosure Statement and Amendments to the Plan are available for free at: http://bankrupt.com/misc/CAPABILITYRANCH_DSJune17.PDF http://bankrupt.com/misc/CAPABILITYRANCH_AmendmenttoDSJune19.PDF About Capability Ranch Las Vegas-based Capability Ranch, LLC, fdba Monroe Property Company, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 12-21121) on Sept. 21, 2012. Bankruptcy Judge Bruce A. Markell originally oversaw the case. The Hon. Laurel E. Davis later assumed the case. David A. Colvin, Esq. at Marquis Aurbach Coffing represents the Debtor as counsel. Capability Ranch disclosed $50,253,785 in assets and $88,476,018 in liabilities as of Chapter 11 filing. The Debtor said it owns property on 40060 Paws Up Road in Greenough, Montana. The property is a 37,000-acre luxury Montana ranch and Montana resort. According to http://www.pawsup.com/,The Resort at Paws Up has 28 luxury vacation homes and 24 luxury camping tents. The resort offers horseback riding, fly fishing, and spa treatments. CBS I: Nov. 13 Hearing on Confirmation of Plan ---------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing on Nov. 13, 2013, at 9:30 a.m., to consider confirmation of CBS I LLC's Plan of Reorganization. According to the Third Amended Disclosure Statement filed by Zachariah Larson, Esq., at Larson & Zirzow, LLC, the Plan included the terms of the agreement reached between the Debtor and U.S. Bank, National Association, as to the treatment of the U.S. Bank claim well as the Debtor's counsel Marquis Aurbach Coffing's first interim application for compensation and the Debtor's special counsel Flangas McMillan's first interim application for compensation. Under the Plan, the confirmation funds will be used to fund the Plan and will be distributed or applied in the manner necessary to provide all required confirmation funds for distribution pursuant to the Plan, satisfy the costs, expenses, required payments and entitlements outlined on the Effective Date and provide the Debtor with working capital and funding for operations and Plan needs. A copy of the Third Amended Disclosure Statement is available for free at http://bankrupt.com/misc/CBS_I_3ds.pdf About CBS I, LLC CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Company is a limited liability company whose sole asset consists of 71,546 square feet of gross rentable building area on a site containing 206,474 net square feet or 4.74 acres, located at 10100 West Charleston Boulevard, in Las Vegas, Nevada. The Debtor is owned by Jeff Susa (25%), Breslin Family Trust (25%), M&J Corrigan Family Trust (25%) and S&L Corrigan Family Trust (25%). The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. Dimitri P. Dalacas, Esq., at Flangas McMillan Law Group, in Las Vegas, represents the Debtor as special counsel. Under the Plan filed in the Debtor's case, holders of other general unsecured claims will receive payment of 100% of their claims to be paid in six months after entry of the confirmation order with simple interest at a rate of 3%. CAESARS ENTERTAINMENT: Offering 10 Million Shares of Common Stock ----------------------------------------------------------------- Caesars Entertainment Corporation priced its previously announced underwritten public offering of 10 million shares of common stock. Caesars has granted the underwriter of the offering an option to purchase up to 1.5 million additional shares of its common stock. The offering is expected to be consummated on or about Oct. 1, 2013, subject to certain customary closing conditions. Caesars and its financial sponsors, affiliates of TPG Capital LP and Apollo Global Management, LLC, have agreed to a lock-up for a period of 60 days after the date of the prospectus supplement for the offering. The offering is subject to market and other customary conditions, and there can be no assurance as to whether or when the offering may be completed. Credit Suisse Securities (USA) LLC is acting as the sole underwriter for the offering. CMBS Refinancing Transactions On Sept. 17, 2013, Caesars said it had begun a refinancing process for outstanding mortgage loans and mezzanine loans for certain of the subsidiaries of Caesars and that the Existing CMBS Borrowers launched an offer to repurchase for cash (i) 100 percent of the aggregate principal amount of mortgage loans at a price of $0.99 per $1.00 of principal plus accrued and unpaid interest and (ii) 100 percent of the aggregate principal amount of mezzanine loans at a price of $0.90 per $1.00 of principal plus accrued and unpaid interest. The consummation of the CMBS Repurchase is conditioned upon the acceptance by lenders holding at least 65 percent of the outstanding aggregate principal amount of the mortgage loans and 85 percent of the outstanding aggregate principal amount of the mezzanine loans. On Sept. 25, 2013, Caesars announced that the Existing CMBS Borrowers have received sufficient acceptances by lenders of mortgage loans and mezzanine loans to satisfy the minimum lender acceptance condition for the CMBS Repurchase. In connection with these transactions, on Sept. 18, 2013, certain subsidiaries of Caesars launched the syndication of $3,269.5 million of new senior secured credit facilities, consisting of a $3,000 million term loan facility and a $269.5 million revolving credit facility, to finance the CMBS Repurchase and refinance the $450 million senior secured credit facility entered into by Octavius Linq Holding Co., LLC, an indirect subsidiary of Caesars. Additionally, on Sept. 24, 2013, the New Borrowers launched an offer, through a private placement, of $500 million aggregate principal amount of first-priority senior secured notes due 2020 and $1,350 million aggregate principal amount of second-priority senior secured notes due 2021 to finance the CMBS Repurchase and Octavius/Linq Repayment. The First Lien Notes and the Second Lien Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside of the United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act. The CMBS Repurchase, the New Financing and the related transactions are subject to required regulatory approvals, market conditions and negotiated agreements with prospective investors. There can be no assurance that any of these transactions will occur as described or at all. In particular, there can be no assurance that Caesars and the New Borrowers will be able to negotiate the definitive documentation for the New Financing or that the terms of the New Financing will be acceptable to Caesars and the New Borrowers. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company incurred a net loss of $1.49 billion on $8.58 billion of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $666.70 million on $8.57 billion of net revenues during the prior year. As of June 30, 2013, the Company had $26.84 billion in total assets, $27.58 billion in total liabilities and a $738.1 million total deficit. * * * Caesars Entertainment carries a 'CCC' long-term issuer default rating, with negative outlook, from Fitch and a 'Caa1' corporate family rating with negative outlook from Moody's Investors Service. As reported in the TCR on Feb. 5, 2013, Moody's Investors Service lowered the Speculative Grade Liquidity rating of Caesars Entertainment Corporation to SGL-3 from SGL-2, reflecting declining revolver availability and Moody's concerns that Caesars' earnings and cash flow will remain under pressure causing the company's negative cash flow to worsen. In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+' from 'B-'. "The downgrade reflects weaker-than-expected operating performance in the first quarter, and our view that Caesars' capital structure may be unsustainable over the next two years based on our EBITDA forecast for the company," said Standard & Poor's credit analyst Melissa Long. CENGAGE LEARNING: Judge Drain to Mediate Plan Among Creditors ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bankruptcy judge in Brooklyn, New York, tapped a bankruptcy judge in White Plains, New York, to serve as mediator to craft a compromise between secured and unsecured creditors of Cengage Learning Inc. The second-largest college textbook publisher in the U.S. was originally scheduled for a hearing Sept. 27 on approval of disclosure materials explaining a Chapter 11 plan. According to the report instead, the hearing may decide when the plan comes to court for approval. Cengage previously said it would file a revised plan and disclosure materials by Oct. 11. Cengage issued a report saying that "market performance through August is materially below expectations." The causes, according to the company, might be declines in enrollment or "increased rental penetration," meaning students who rent rather than buy books. U.S. Bankruptcy Judge Elizabeth Stong, who presides over the Cengage reorganization begun in July, formally ratified the selection of U.S. Bankruptcy Judge Robert Drain to serve as mediator. Judge Drain is charged with bringing the warring factions together in agreement on every contentious issue in the case. The report notes that among other disputes, the unsecured creditors' committee says secured lenders don't have valid liens on 15,500 copyrights. The creditor groups also disagree on the value of the reorganized company and how it should be divided. In addition, the company itself initiated a lawsuit against the lenders contending their secured claims don't reach $274 million in cash drawn from a revolving credit in March. 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. CHINA NATURAL: Director Quits Over Disagreement ----------------------------------------------- Xiang Dong (Donald) Yang provided China Natural Gas, Inc., a written notice dated Sept. 18, 2013, of his decision to resign from the Company's board of directors, effective immediately. The resignation letter cited differences and disagreements with management as the bases for Mr. Yang's resignation. Management of the Company substantially disagrees with Mr. Yang's characterization of the circumstances representing these differences and disagreements. A copy of the Resignation Letter is available for free at: http://is.gd/K3Id9v About China Natural Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural Gas, Inc., was incorporated in the State of Delaware on March 31, 1999. The Company through its wholly owned subsidiaries and variable interest entity, Xi';an Xilan Natural Gas Co., Ltd., and subsidiaries of its VIE, which are located in Hong Kong, Shaanxi Province, Henan Province and Hubei Province in the People's Republic of China ("PRC"), engages in sales and distribution of natural gas and gasoline to commercial, industrial and residential customers through fueling stations and pipelines, construction of pipeline networks, installation of natural gas fittings and parts for end-users, and conversions of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at 0ptmobile conversion sites. On Feb. 8, 2013, an involuntary petition for bankruptcy was filed against the Company by three of the Company's creditors, Abax Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr. S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they have debts totaling $42,218,956.88 as a result of the Company's failure to make payments on the 5% Guaranteed Senior Notes issued in 2008. The Company says it intends to oppose the motion. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in Washington, D.C., represents the Petitioners as counsel. CODA HOLDINGS: Sets Nov. 1 Hearing to Confirm Liquidating Plan -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Coda Holdings Inc., which made electric cars before selling its assets, set a confirmation hearing on Nov. 1 for the bankruptcy judge in Delaware to approve a liquidating Chapter 11 plan. According to report, the plan was facilitated by a settlement under which the creditors' committee permitted the sale of the non-auto business to an insider group including an affiliate of Fortress Investment Group LLC. The sale, completed in June, was said to be worth $25 million, although the buyer paid only $1.7 million in cash. The remainder represented the loan financing the Chapter 11 case and pre-bankruptcy secured debt. The report notes that the settlement enabled the company to draw down $1.9 million remaining on the loan financing the Chapter 11 case begun May 1. When the sale was completed, Los Angeles-based Coda changed its name to Adoc Holdings Inc. From cash remaining after higher-priority claims are paid, the first $500,000 goes to unsecured creditors. The report relates that additional cash will be split, with unsecured creditors receiving one-third and the purchasers two- thirds. The noteholders' deficiency claims won't share in the portion for unsecured creditors. There's a companion sharing arrangement for proceeds from lawsuits. Unsecured claims are shown in the disclosure statement approved on Sept. 24 as totaling around $23 million. A Fortress affiliate is a holder of $15.8 million of the notes to be exchanged for ownership and was one of the providers of bankruptcy financing. Coda sold only 100 Coda Sedans, an electrically powered version of the Hafei Saibao, made in China. The buyers didn't acquire the car business, and will concentrate on making stationary electric storage systems. About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- made an electric auto that was a commercial failure. The company marketed the Coda Sedan, which sold only 100 copies. It was an electrically powered version of the Hafei Saibao, made in China. After bankruptcy, Los Angeles- based Coda intends to concentrate on making stationery electric- storage systems. CODA Holdings, Inc., Coda Energy LLC and three other affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-11153) on May 1, 2013, to enable the Company to complete a sale, confirm a plan, and emerge from bankruptcy in a stronger position to execute its new business plan. The Company expects the sale process to take 45 days to complete. FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide DIP financing to enable the Company's energy storage business to remain fully operational during the restructuring process. The consortium, or its designee, will also as stalking horse bidder to acquire the Company post-bankruptcy. In addition, the Company will seek to monetize value of its existing automotive business assets. CODA disclosed assets of $10 million to $50 million and liabilities of less than $100 million. Coda Automotive Inc., disclosed $24,950,641 in assets and $95,859,413 in liabilities as of the Chapter 11 filing. The Debtors have incurred prepetition a significant amount of secured indebtedness: secured notes of with principal in the amount of $59.1 million; term loans in the principal amount of $12.6 million; and a bridge loan with $665,000 outstanding. FCO and other bridge loan lenders have "enhanced priority" over other secured noteholders that did not participate in the bridge loans, pursuant to the intercreditor agreement. Jeffrey M. Schlerf, Esq., John H. Strock, Esq., and L. John Bird, Esq., at Fox Rothschild LLP are the proposed counsel for the Debtors. CODA's legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its chief restructuring officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC's legal advisor. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe represents the Debtors in their restructuring efforts. The Committee tapped Brown Rudnick as its counsel and Deloitte Financial Advisory Services LLP as its financial advisor. CONEXANT SYSTEMS: To Pay Professionals to Complete Prepack ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Conexant Systems Inc., a designer of semiconductor chipsets, will pay professionals as much as unsecured creditors to complete a prepackaged reorganization that sold the company to a unit of Soros Fund Management LLC. According to the report, the company filed under Chapter 11 in late February, having already worked out a plan for the Soros unit to acquire the business in exchange for debt. A bankruptcy judge in Delaware signed a confirmation order in early June approving the plan. To obviate unsecured-creditor opposition, the pot for them was increased to $2.9 million from $2 million. As it turned out, $2.9 million is approximately the total fees approved for the Newport Beach, California-based company's chief bankruptcy lawyers and financial professionals. The report notes that although much of the work was done before the official Chapter 11 filing, lawyers from Kirkland & Ellis LLP are being paid $1.5 million with the court's approval. Alvarez & Marsal North America LLC, the company's financial adviser, received a $1.4 million fee award. The report relates that to improve unsecured creditors' recovery, secured lenders waived their $114.5 million deficiency claim, increasing the payout for unsecured creditors to 9 percent from 6 percent. Soros held $195.5 million in 11.25 percent senior secured notes. In exchange, Soros took all the new stock plus a $76 million unsecured note issued by the reorganized holding company, for a predicted 41 percent recovery. QP SFM Capital Holdings Ltd. is the Soros unit involved in the transaction. About Conexant Systems Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10367) on Feb. 28, 2013, with an agreement for a balance sheet restructuring with equity sponsors and sole secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC. Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP serve as legal counsel and Alvarez & Marsal acts as restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld LLP and Pepper Hamilton LLP serve as legal counsel and Blackstone Advisory Partners L.P. as restructuring advisor to the secured lender. BMC Group Inc. is the claims and notice agent. CSN HOUSTON: Astros Say Comcast "Improperly" Filed Involuntary -------------------------------------------------------------- The Houston Astros on Sept. 27 released the following statement regarding the network: "Comcast has improperly filed an involuntary bankruptcy petition in an attempt to prevent the Astros from terminating the Media Rights Agreement between the Astros and Houston Regional Sports Network. HRSN failed to pay the Astros media rights fees in July, August and September, and we have invested additional money in order to keep the network viable through our season." "Despite not receiving our media rights fees, our objective has not changed. We will continue to work toward obtaining full carriage so that all of our fans are able to watch the Astros games while making sure that the Astros are able to compete for championships." According to a Wall Street Journal report, the network, CSN Houston, which features the games of Major League Baseball's Houston Astros and the National Basketball Association's Houston Rockets, has been unable to reach distribution deals with several major media companies that provide pay television to the local market. The network's owners, which include Comcast, the media conglomerate that also owns NBCUniversal, had been seeking monthly fees of nearly $3.40 from each basic-cable and satellite subscriber, the report related. However, television providers, led by AT&T, have argued that the demand for the network's programming was too small to justify such a fee. As a result, the network has been available in less than half of the pay-television households in its market. In a statement issued on the evening of Sept. 27, CSN Houston said, "In order to resolve structural issues affecting CSN Houston's partnership, affiliates of Comcast/NBCUniversal have filed for involuntary bankruptcy protection in the Southern District of Texas. This action is necessary to preserve CSN Houston's ability to provide its valuable programming and reaffirms Comcast/NBCUniversal's commitment to serving the region and its fans." The stalled negotiations between pay-TV providers and CSN Houston have become a flashpoint in the mounting debate over whether all consumers should have to shoulder the costs of the skyrocketing sports-rights fees that are helping to drive up monthly cable and satellite-television bills, the report further related. About CSN Houston Comcast SportsNet Houston (CSN Houston) is an American regional sports network that operates as an affiliate of Comcast SportsNet and serves Texas, Louisiana, Arkansas, Oklahoma, and New Mexico. It is the exclusive home of the NBA's Houston Rockets and the MLB's Houston Astros. It is majority owned by the Astros and Rockets, and is operated through the NBC Sports Group unit of NBCUniversal. D & L ENERGY: Proposes Nov. 13 Auction for All Assets ----------------------------------------------------- D & L Energy, Inc., and Petroflow, Inc., ask the U.S. Bankruptcy Court for the Northern District of Ohio to (a) approve bidding procedures in connection with the sale of substantially all of the Debtors' assets; (b) to schedule an auction and a hearing to consider the sale to the successful bidders; (c) approve the procedures to provide notice of assumption and assignment of contracts and leases; and (d) granting other related relief. The hearing on the sales procedures motion is scheduled for Oct. 15, 2013, at 9:30 a.m. The Debtors contemplate the following schedule for the auction and sale hearing: Nov. 13, 2013, at 10:00 a.m. -- Date of Auction Sale Nov. 19, 2013, at 10:00 a.m. -- Date of Sale Hearing Persons desiring to object to the sale motion must file a written objection with the Bankruptcy Court no later than Nov. 8, 2013, at 5:00 p.m. The Debtors propose to file the cure claim notice to parties to the executory contracts or unexpired leases that are or may be assumed and assigned on or before Nov. 1, 2013. Any objection to a scheduled cure amount will be filed on or before Nov. 12, 2013, at 5:00 p.m. Proposed Bid Procedures 1. All bids will be in writing and must be delivered to the Debtor's financial advisor, Mark D. Kozel, SS&G Parkland Consulting, LLC, 32125 Solon Road, Solon, Ohio 44139, so as to be received by or before 5:00 p.m. on Nov. 1, 2013. 2. The Debtors, in consultation with the Committee, will have the right to reject any and all bids in its reasonable discretion. 3. Within 24 hours of the conclusion of the Auction, the Debtors, in consultation with the Committee, will determine and announce the highest and best bid or bids submitted at the Auction constituting the superior bid (the "Prevailing Bid(s). 4. Within 24 hours following the announcement of the Prevailing Bid(s), unless and to the extent otherwise agreed by the Debtors, in consultation with the Committee, the Successful Bidder(s) will complete and execute an asset purchase agreement substantially in the form of the Proposed APA, and in form and substance reasonably acceptable to the Debtors memorializing, among other things, the amount of the Prevailing Bid. 5. All of the Assets shall be transferred "as is." 6. The Debtors will have the right to designate one or more Stalking Horse Purchaser(s) with respect to the proposed Sale of the Assets on terms and conditions acceptable to the Debtors in consultation with the Committee, including, but not limited to, reasonable overbid protection, reasonable expense reimbursement and/or breakup fee, and/or any other customary buyer protection. A copy of the proposed bid procedures is available at: http://bankrupt.com/misc/D&L.proposedbidprocedures.pdf About D & L Energy D & L Energy, Inc., based in Youngstown, Ohio, was formed by David DeChristofaro, Ben Lupo, and James Beshara in 1986 to be a conventional oil and gas well operator and producer, primarily targeting oil and gas reserves in the Clinton Sandstone formation throughout Northeast Ohio and Northwest Pennsylvania. D&L currently has three (3) shareholders, Ben Lupo (80.76% shareholder), Susan Faith (15% shareholder), and Holly Serensky Lupo (4.24% shareholder). Nicholas C. Paparodis is the acting CEO and President of D&L. Kathy Kaniclides is the acting Secretary and Treasurer of D&L. Currently, Serensky Lupo is the sole director of D&L. Petroflow, Inc., is an Ohio corporation which is a wholly owned subsidiary of D&L. Originally intended to operate as the "drilling arm" of D&L, Petroflow ceased all operations prior to the filing of these bankruptcy matters. Petroflow has no current income, no bank accounts, and no employees. Paparodis is the president, CEO and sole director of Petroflow. D&L and Petroflow filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods oversees the case. Brian T. Angeloni, Esq., Kathryn A. Belfance, Esq., Steven Heimberger, Esq., and Todd A. Mazzola, Esq., at Roderick Linton Belfance, LLP, serve as the Debtors' counsel, and Walter Haverfield, LLP, is the environmental counsel. SS&G Parkland Consulting, LLC, serves as financial advisor and investment banker. In its amended schedules, the Debtor disclosed $41,015,677 in assets and $6,187,217 in liabilities as of the Chapter 11 filing. Daniel M. McDermott, U.S. Trustee for Region 9, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. Sherri Lynn Dahl, Esq., and Peter R. Morrison, Esq., at Squire Sanders (US) LLP, represent the Creditors Committee as counsel. BBP Partners LLC serves as its financial advisors. D & L ENERGY: Can Continue Using HNB Cash Collateral Until Nov. 20 ------------------------------------------------------------------ In a third interim order dated Sept. 17, 2013, the U.S. Bankruptcy Court for the Northern District of Ohio authorized D & Energy, Inc., et al., to continue using cash collateral of secured lender Huntington National Bank until 12:00 a.m. on Nov. 20, 2013. The Court finds that at this time, the value of Debtors' assets appears to substantially exceed the Debtors' liabilities and as such, there is a sufficient equity cushion available to satisfy/adequately protect HNB's secured interests. As further adequate protection of HNB's secured interest, Debtors' will continue to make all postpetition payments, as they become due, to HNB with respect to the March 9, 2011 Term Loan, account ending in 2349, which was in the initial amount of $13,000. A Final Hearing on the Cash Collateral Motion is set for Tuesday, Nov. 19, 2013, at 9:30 a.m. Any party in interest who wishes to object must file a written objection no later than Nov. 8, 2013. About D & L Energy D & L Energy, Inc., based in Youngstown, Ohio, was formed by David DeChristofaro, Ben Lupo, and James Beshara in 1986 to be a conventional oil and gas well operator and producer, primarily targeting oil and gas reserves in the Clinton Sandstone formation throughout Northeast Ohio and Northwest Pennsylvania. D&L currently has three (3) shareholders, Ben Lupo (80.76% shareholder), Susan Faith (15% shareholder), and Holly Serensky Lupo (4.24% shareholder). Nicholas C. Paparodis is the acting CEO and President of D&L. Kathy Kaniclides is the acting Secretary and Treasurer of D&L. Currently, Serensky Lupo is the sole director of D&L. Petroflow, Inc., is an Ohio corporation which is a wholly owned subsidiary of D&L. Originally intended to operate as the "drilling arm" of D&L, Petroflow ceased all operations prior to the filing of these bankruptcy matters. Petroflow has no current income, no bank accounts, and no employees. Paparodis is the president, CEO and sole director of Petroflow. D&L and Petroflow filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods oversees the case. Brian T. Angeloni, Esq., Kathryn A. Belfance, Esq., Steven Heimberger, Esq., and Todd A. Mazzola, Esq., at Roderick Linton Belfance, LLP, serve as the Debtors' counsel, and Walter Haverfield, LLP, is the environmental counsel. SS&G Parkland Consulting, LLC, serves as financial advisor and investment banker. In its amended schedules, the Debtor disclosed $41,015,677 in assets and $6,187,217 in liabilities as of the Chapter 11 filing. Daniel M. McDermott, U.S. Trustee for Region 9, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. Sherri Lynn Dahl, Esq., and Peter R. Morrison, Esq., at Squire Sanders (US) LLP, represent the Creditors Committee as counsel. BBP Partners LLC serves as its financial advisors. DETROIT, MI: Wants State Court Covered by Automatic Stay -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Detroit wants the bankruptcy judge to extend Chapter 9 protection to the state's 36th district court covering the city and succeeded in blocking an accident victim from collecting a $2 million judgment. According to the report, in papers filed with the bankruptcy court Sept. 25, Detroit explained how the state district court is a separate entity, although the city is obligated by state law to pay the court's operating expenses and other liabilities. Consequently, the court isn't automatically covered by the stay of lawsuits arising when Detroit sought protection in Chapter 9 municipal bankruptcy. The report notes that the city explained how the district court was saddled with a $5.5 million back-pay award currently on appeal. Detroit wants the bankruptcy judge to expand the so-called automatic stay to cover the district court, thus barring the appeal from going forward and blocking the plaintiffs from collecting a judgment. If the appeal goes forward, Detroit could be forced to pay the award when other liabilities are frozen, the city said. The report also relates that Bankruptcy Judge Steven W. Rhodes barred accident victim Michael Beydoun from collecting a $2 million judgment he won against the city before bankruptcy. He was injured by a police car. The report relays that Mr. Beydoun's lawyer wanted Judge Rhodes to allow collection of the judgment. He said the city's bankruptcy was filed in bad faith expressly to block collection of the judgment. Judge Rhodes disagreed, saying that permitting collection would cause "significant potential harm to other creditors." It would be "fundamentally unfair," the judge said, for Mr. Beydoun to collect his judgment when other creditors are barred from suing. Judge Rhodes will hold hearings beginning Oct. 16 and 23 on the question of whether Detroit is eligible for bankruptcy. 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. Detroit 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. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. DETROIT, MI: NLC Supports White House Grants to Spur Recovery ------------------------------------------------------------- The following statement is from Clarence Anthony, Executive Director of the National League of Cities on the White House announcing funding for Detroit: "[Fri]day's White House announcement about federal grants and private money aimed at boosting public safety, neighborhood revitalization, and public transportation will hopefully help Detroit begin the long road to recovery. It is a good example of what is possible when all levels of the intergovernmental partnership -- federal, state, and local -- come together to find creative solutions that will assist in accelerating innovation and building a foundation for future growth for families and children. "It is important to note that these federal resources are not a bailout, but are funds that were already available to Detroit that are being repurposed or made available at a quicker rate. There is nothing to indicate that this will alter the course of the bankruptcy proceeding and prevent the difficult decisions that lie ahead. "We applaud the partners who came together to make today's announcement possible." The National League of Cities is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans. 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. Detroit 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. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. DIGIRATI TECHNOLOGIES: Proposes Plan of Reorganization ------------------------------------------------------ Digerati Technologies, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, a proposed Plan of Reorganization and accompanying Disclosure Statement. The Plan contemplates the creation of a grantor trust and the sale of Dishon Disposal Inc. and Hurley Enterprises, Inc. Dishon is a waste disposal facility, focusing on solid and liquid wastes from oil field and drilling processes. Hurley is also an oil field support services company that functions as a drilling site service company, with multiple service and rental lines of revenue. Under the Plan, the stock of Hurley and Dishon will be transferred to the Hurley/Dishon Trust subject to existing liens and will remain property of the estate until sold and will not vest in the Reorganized Debtor. Pursuant to bankruptcy court consent, the Trustee of the Hurley/Dishon will sell the stock or assets of Hurley and Dishon. The Plan also provides for the treatment of these claims: (1) Allowed Non-Tax Administrative Claims will be paid in Cash in full from the Net Sales Proceeds on the later of 30 days after the Closing Date or the date such Claim becomes an Allowed Administrative Claim; (2) Allowed Administrative Tax Claims resulting from the sale of Hurley or Dishon will be paid in full from the relevant sales proceeds; (3) Allowed Priority Claims will be paid in cash in full on the later of 30 days from the Confirmation Date or when allowed to the extent cash is available; otherwise, from the Net Sales Proceeds, along with simple interest at a rate of 5% after payment in full of Class 1 or Class 2 Allowed Claim, as applicable; (4) Allowed Class 1 Secured Claim of Terry Dishon will be paid in full on the Closing Date from the Net Sales Proceeds of the Dishon Sale; (5) Allowed Class 2 Secured Claims of Hurley Fairview LLC and Sheyenne Hurley will be paid in full on the Closing Date from the Net Sales Proceeds of the Hurley Sale; (6) Holders of Allowed Class 3 General Unsecured Claims of $1,000 or Less will be paid in full within 30 days of the Confirmation Date, to the extent cash is available; otherwise to be paid from the Net Sale Proceeds of either Dishon or Hurley, whichever occurs first, after payment in full of Class 1 or 2 in full as applicable and the Allowed Priority Claims, along with simple interest at a rate of 5%; (7) Holders of Allowed Class 4 General Unsecured Claims in Excess of $1,000 will be paid in full, with simple interest at a rate of 5%, from the Net Sale Proceeds of either Dishon or Hurley, whichever occurs first, after payment in full of Class 1 or 2 in full as applicable, Allowed Priority Claims, and Class 3 claims; (8) Allowed Class 5 Subordinated Unsecured Claims Arising Out of Disputed Rights to Preferred Series "A" Interests will receive, after Classes 1-4 are paid in accordance with the Plan, pro-rata shares of the Suiplus Net Sales Proceeds in exchange for any claim to any rights arising out of the Preferred Series "A" Interests; (9) Class 6 any and all Super voting rights that may have arisen out of the disputed rights to Preferred Series "E" Interests of Oleum Capital, LLC, will be rescinded and receive no distribution under the Plan; (10) Allowed Class 7 Equity Interests of Digerati Common Stock will retain their common stock in the Reorganized Debtor. Further, after payments set forth in the Plan, Reorganized Debtor, on behalf of Class 7 will receive Class 5% of the remaining Surplus Net Sales Proceeds; (11) Class 8 Options and Warrants Issued by Digerati prior to the Filing Date shall be canceled. The Reorganized Debtor will continue its normal business operations after the confirmation date. Arthur L. Smith and Antonio Estrada will continue to serve as director and officer of the Reorganized Debtor. A full-text copy of the Debtor's Disclosure Statement, dated Sept. 27, 2013, is available for free at: http://bankrupt.com/misc/DIGERATI_DSSept27.PDF About Digerati Technologies Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013. Digerati -- http://www.digerati-inc.com-- is a diversified holding company which owns operating subsidiaries in the oil field services and the cloud communications industry. Digerati and its subsidiaries maintain Texas Offices in San Antonio and Houston. The Debtor has no independent operations apart from its subsidiaries. The Debtor's subsidiaries include Shift 8 Networks, a cloud communication service, Hurley Enterprises, Inc., and Dishon Disposal, Inc., both oil field services companies. The Debtor disclosed $60 million in assets and $62.5 million in liabilities as of May 29, 2013. Bankruptcy Judge Jeff Bohm oversees the case. Deirdre Carey Brown, Esq., Annie E. Catmull, Esq., Melissa Anne Haselden, Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, at Hoover Slovacek, LLP, in Houston, represent the Debtor as counsel. The Debtor tapped Gilbert A. Herrera and Herrera Partners as the investment banker. Rhode Holdings, LLC, is seeking the transfer of venue of Digerati's Chapter 11 case to the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division. DYNAMIC PRECISION: S&P Assigns 'B' CCR & Rates $330MM Facility 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Dynamic Precision Group Inc. (DPG). The outlook is stable. At the same time, S&P assigned its 'B' issue rating and '3' recovery rating to the proposed $330 million secured credit facility, which consists of a $260 million revolver and a $70 million term loan and will be issued by DPG's direct subsidiary, TurboCombustor Technology Inc. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of payment default. "Our ratings on DPG reflect our expectation that leverage (debt to EBITDA) will remain high after the proposed transaction closes," said credit analyst Tatiana Kleiman. "Although we expect revenues and earnings growth to be solid over the next few years due to strength in the commercial aerospace market, new programs, the contribution from acquisitions, and increasing margins, any material improvement in DPG's credit ratios will likely be offset by further mostly debt-financed acquisitions. We assess the company's business risk profile as "weak," reflecting its position as a provider of parts for aircraft engines and industrial gas turbines, some barriers to entry, and limited customer and geographic diversity. We assess the company's financial risk profile as "highly leveraged" based on its high leverage (pro forma for the acquisition, DPG's debt to EBITDA is about 4.5x), "adequate" liquidity, and financial sponsor ownership." The company, which is majority owned by private equity firm The Carlyle Group, plans to use the proceeds from the term loan and an approximately $20 million equity infusion from Carlyle to fund the acquisition of Unison from General Electric Co. (GE) and refinance existing debt. Pro forma debt to EBITDA for fiscal-year 2014 will be about 4.5x-5.5x and funds from operations (FFO) to debt will be 11.5%-13.5%. Although DPG's credit measures will likely improve modestly over the next 12 months due to growing earnings and some debt repayment from free cash flows, S&P do not expect the company to sustain that improvement due to the likelihood of further debt- financed acquisitions. However, S&P also do not expect leverage to increase much from current levels as a result of the acquisitions. Carlyle formed DPG in December 2011 as a holding company to acquire precision engine component manufacturers. Since inception, they have purchased TurboCombuster Technology (December 2011) and Paradigm Precision Holdings (January 2013), both of which included additional equity from Carlyle, management, and other co-investors. In September 2013, DPG announced the purchase of Unison from GE, which the company expects will close in fourth- quarter 2013. Operating under the name Paradigm Precision, DPG specializes in fabricating gas turbine engine parts serving the commercial aerospace market (49% of pro forma sales for the Unison acquisition); military aerospace (30%); industrial gas turbine (11%); business jet and general aviation (6%); and the marine, rotary wing, and unmanned aerial vehicle (4%) end markets. The commercial aerospace market is currently in a cyclical upturn, and the major aircraft and engine manufacturers are increasing production significantly to work down huge order backlogs. The company's customer base is highly concentrated, as is common for an aerospace supplier. The three largest customers (and the leading aircraft engine manufacturers)--GE, Rolls Royce, and Pratt & Whitney--account for almost 75% of the combined company's sales. Pro forma for the Unison acquisition, the company will operate 18 facilities, including 12 domestically in the U.S., and six international operations spanning Canada, U.K., Hungary, Mexico, and Tunisia. DPG competes in the global market for "hot section" aerospace and industrial gas turbine engine components, such as casings, frames, rings, and combustion liners. Although the company has a number of competitors that are of similar size or smaller, none has the same range of capabilities. Barriers to entry are not steep given the "build-to-print" nature of the business, which allows customers to retain the rights to the product design. However, given the complexity and critical nature associated with engine manufacturing, customers are typically less likely to switch suppliers once they have an established relationship and track record of successful execution and performance. In addition, 85% of the company's aerospace work is under long-term agreements, which provides near- and long-term revenue visibility but can also limit the company's ability to gain new work on existing engines. Program diversity is fairly good and DPG has positions on most of the major engines for commercial aircraft. The top three programs are the GE-90 (11% of pro forma 2013 revenues), GEnx (9%), and AE2100 (7%). The company does not get significant revenues from the CFM-56, which is by far the highest production rate engine that powers the popular Boeing 737 and Airbus A320 families, but expects to have a stronger position on the LEAP engine, which will replace the CFM-56 on the A320 NEO and 737 MAX. Production of the LEAP engine should start to ramp up in 2015 and 2016. S&P expects pro forma EBITDA margins to initially deteriorate to around 12.5% from 16% due to much lower margins at Unison. Historically, high management turnover under GE's ownership weakened operating efficiency and increased late deliveries at Unison, which DPG is working to correct. These efforts and higher volumes should improve margins over the next few years, but the profitability of future acquisitions could constrain this improvement. Excluding the impact of acquisitions, organic margins should improve to more than 15% by 2014. Standard & Poor's rating outlook on DPG is stable. Revenues and earnings should improve due to strong aerospace market conditions, combined with acquisition contributions and cost-reduction efforts, which should translate into steadily improving credit ratios, absent further large debt-financed acquisitions. S&P do not expect to raise the ratings due to the company's ownership by financial sponsors and S&P's belief that debt to EBITDA will likely not remain less than 5x due to the likelihood of further debt-financed acquisitions or, less likely, dividends, as per S&P's criteria on financial sponsor-owned companies. However, S&P may raise the ratings if it feels subsequent acquisitions increase the company's diversity and improve its competitive position such that S&P revises its business risk assessment to "fair" from "weak." S&P is also unlikely to lower the ratings in the next year, but could do so if earnings do not improve as expected or material debt-financed acquisitions increase debt to EBITDA to more than 6x or reduce FFO to debt to less than 10%. DYNAVOX INC: Delays Form 10-K for Fiscal 2013 --------------------------------------------- DynaVox Inc. notified the U.S. Securities and Exchange Commission that it will be delayed in filing its annual report on Form 10-K for the period ended June 28, 2013. The Company has been in default under its 2008 Credit Facility, as amended, since April 2013. DynaVox Inc. has, since then, engaged in ongoing discussions with the lenders and hired an international firm providing financial advisory and strategy consulting services to advise the Company on strategic alternatives, including identifying and evaluating potential business combination transactions and refinancing structures. As a result, DynaVox Inc.'s staff and resources have been substantially committed to the renegotiation of its debt and the search for strategic alternatives. This has had an adverse impact on the Company's ability to timely complete its Annual Report. About DynaVox Inc. DynaVox Inc. (OTC: DVOX) is a holding Company with its headquarters in Pittsburgh, Pennsylvania, whose primary operating entities are DynaVox Systems LLC and Mayer-Johnson LLC. DynaVox provides speech generating devices and symbol-adapted special education software to assist individuals in overcoming their speech, language and learning challenges. The Company reported a net loss of $6.7 million on $51.1 million of net sales for the thirty-nine weeks ended March 29, 2013, compared with a net loss of $13.3 million on $73.4 million of net sales for the thirty-nine weeks ended March 30, 2012. The Company's balance sheet at March 29, 2013, showed $52.3 million in total assets, $37.2 million in total liabilities, and stockholders' equity of $15.1 million. The Company said in its quarterly report for the period ended March 29, 2013, "We are in default under our credit agreement and our lenders have the right to accelerate our obligations at any time, which raises substantial doubt about our ability to continue as a going concern." Bankruptcy Warning "In the event of an acceleration of our obligations and our failure to pay the amount that would then become due, the holders of the 2008 Credit Facility could seek to foreclose on our assets, as a result of which we would likely need to seek protection under the provisions of the U.S. Bankruptcy Code," the Company said in its quarterly report for the period ended March 29, 2013. EASTON-BELL SPORTS: Moody's Affirms 'B2' Corp. Credit Rating ------------------------------------------------------------ Moody's Investors Service downgraded Easton-Bell Sports, Inc.'s speculative grade liquidity rating to SGL 3 from SGL 2 because of Moody's expectation of modest free cash flow and the potential for diminished revolver capacity if revolver borrowings are used to repay the $145 million Holdco notes in the next couple of years. The change in the outlook to negative from stable reflects the risk that the company's earnings will continue to moderate driving leverage above 7 times, one of the thresholds set for a possible downgrade. The May 2016 expiration date of the $250 million ABL facility will accelerate to July 2015 if the $145 million of Holdco notes aren't repaid by July 2015. Similarly, the December 2016 maturity of the $350 million secured notes will accelerate to October 2015 if the Holdco notes aren't repaid or refinanced by August 28, 2015 with debt maturing at least 91 days after the maturity date of the secured notes. The scheduled maturity date of the Holdco notes is December 2015. "Absent a potential sale by its private equity owners, Fenway Partners, we think the company will look to repay the Holdco notes with revolver borrowings no later than June 2015 and then refinance the secured notes when the prepayment penalties are substantially lower," said Kevin Cassidy, Senior Credit Officer, at Moody's Investors Service. Ratings affirmed: Corporate Family Rating at B2; Probability of Default Rating at B2-PD; $350 million senior secured notes due December 2016 at B2 (LGD4, 51% from 69%); Rating downgraded: Speculative Grade Liquidity Rating to SGL 3 from SGL 2 Ratings Rationale: Easton-Bell's B2 Corporate Family Rating reflects its small scale with revenue of roughly $800 million, high leverage with debt/EBITDA around 6.7 times, exposure to high raw material prices, highly competitive market segments, and earnings volatility. Supporting the B2 rating is Easton-Bell's product innovation, strong brand names and market position, and its diverse distribution network with limited concentration with any one customer. The negative outlook reflects the risk that the company's operating performance will continue to decline driving debt/EBITDA above 7 times, one of the thresholds set for a possible downgrade. The rating could be downgraded if the company's operating performance continues to weaken and leverage is sustained above 7 times. Failure to refinance the secured notes and Holdco notes well before their maturity date will pressure the speculative grade liquidity rating and ultimately the Corporate Family Rating as well. An upgrade is not likely in the near term given the negative outlook. Over the longer term, the rating could be upgraded if earnings and credit metrics improve and the company refinances/repays the secured notes and Holdco notes. To illustrate the metrics needed for an upgrade, debt/EBITDA, which is currently around 6.7 times, would need to approach 4.5 times and EBITA margins, which are presently around 8%, would need to move toward double digits. The principal methodologies used in this rating were Global Consumer Durables published in October 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Van Nuys, California, Easton-Bell Sports, Inc. is a designer, developer and marketer of branded equipment that enhances athletic performance and protection and related accessories for numerous athletic and recreational activities. The company's proprietary brands include Easton, Bell, Giro and Riddell. Revenue for the twelve months ended June 30, 2013, approximated $800 million. EL POLLO: S&P Affirms 'B-' CCR & Rates $190MM Sr. Facility 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' corporate credit rating on Costa Mesa, Calif.-based El Pollo Loco Inc. The outlook is stable. At the same time, S&P assigned a 'B' issue-level rating with a '2' recovery rating to the proposed $190 million senior secured credit facility. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery of principal in the event of a payment default. S&P also assigned a 'CCC' issue-level rating and '6' recovery rating to the company's new second-lien term loan. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery of principal in the event of a payment default. El Pollo Loco is refinancing its senior secured facility and second-lien debt to reduce interest costs, extend maturities, and fund other expenses related to the transaction. "The rating on El Pollo Loco Inc. reflects Standard & Poor's Ratings Services' assessment that the company's business risk profile will remain "vulnerable" and the financial risk profile will remain "highly leveraged" in the coming year" said credit analyst Diya Iyer. The outlook is stable, reflecting S&P's expectation for limited improvement in credit protection measures in the coming year. S&P could raise its rating if sales increase more than 15% and gross margin expands 400 bps above our expectations due to continued strong operational execution. This would result in a 30% increase in EBITDA, with leverage in the low-5x and interest coverage over 2x. S&P would also consider a higher rating if the company continues to address its capital structure, for instance reducing or eliminating its second-lien debt. S&P would consider lowering its rating if profitability falls below its expectations in the coming year because of sales pressure or higher costs associated with store expansion. This would lead to EBITDA declining 15%, with gross margin declining more than 100 bps. It would also lead to a decline in liquidity to fund operating requirements including interest expense and capital expenditure, with coverage falling below 1x and leverage increasing to more than 7x in the next year. EQUIPMENT ACQUISITION: Bank Fails to Recoup Losses From Insurer --------------------------------------------------------------- Minnesota District Judge Susan Richard Nelson ruled on cross motions for summary judgment filed in a declaratory judgment action between a bank and its insurer. The insurer, BancInsure, Inc., seeks a declaration that Highland Bank's loss is not covered under the Financial Institution Bond that BancInsure issued to Highland Bank. Highland Bank has counterclaimed for breach of contract, a declaratory judgment that it is entitled to coverage, and breach of good faith and fair dealing. In her ruling, Judge Nelson granted BancInsure's Motion for Summary Judgment and denied Highland Bank's Motion for Summary Judgment. The losses indirectly stemmed from the collapse of Equipment Acquisition Resources, Inc. On May 16, 2005, EAR entered into an equipment lease agreement with First Premier Capital, LLC, under which First Premier was to provide manufacturing equipment to EAR. In 2006, First Premier approached Highland Bank on EAR's behalf, seeking to borrow $3 million to finance the equipment lease. In September 2009, EAR stopped making its lease payments. Highland Bank investigated the default and learned, among other things, that the leased equipment did not actually exist, and the equipment purportedly purchased was pledged to multiple lenders. Highland Bank also discovered that the guaranty provided by Donna Malone, EAR's principal, was likely forged. EAR filed for Chapter 11 bankruptcy in October that year. The case is, BancInsure, Inc., an Oklahoma corporation, Plaintiff and Counter-Defendant, v. Highland Bank, a Minnesota banking corporation, Defendant and Counter-Claimant, Case No. 11-cv-2497 (SRN/JSM) (D. Minn.). A copy of Judge Nelson's Sept. 23, 2013 Memorandum Opinion and Order is available at http://is.gd/k1LIYr from Leagle.com. Joseph A. Nilan, Esq., and Mark J. Johnson, Esq., at Gregerson, Rosow, Johnson & Nilan, Ltd., 650 Third Avenue South, Suite 1600, Minneapolis, Minnesota 55402, argue for Plaintiff and Counter- Defendant. Patrick H. O'Neill, Jr., Esq., Eric M. Laine, Esq., and Stephen M. Warner, Esq., at O'Neill & Murphy, 332 Minnesota Street, Suite W2600, Saint Paul, Minnesota 55101, argue for Defendant and Counter-Claimant. About Equipment Acquisition Palatine, Illinois-based Equipment Acquisition Resources, Inc., operated in the semiconductor equipment sales and servicing industry. It was designed to operate as a refurbisher of special machinery, a manufacturer of high-end technology parts, and a process developer for the manufacture of high-technology parts. The bulk of EAR's stated revenue derived from refurbishing and selling high-tech machinery; it was set up to purchase high-tech equipment near the end of its useful life at prices that were low relative to the cost of new units, and then refurbish using a propriety process the equipment for sale to end-users at substantial gross margins. EaR engaged in a massive fraud from 2005 to 2009. That fraud included, but was not limited to, selling semiconductor equipment at inflated prices, leasing the equipment back, misrepresenting the value of the equipment, and pledging certain pieces of equipment multiple times to various creditors to secure financing. It owned 2,000 pieces of semiconductor manufacturing equipment. First Premier Capital LLC, claiming to be owed $20 million, alleged that the scheme has cost creditors up to $175 million. EAR filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 09-39937) on Oct. 23, 2009. Barry A. Chatz, Esq., at Arnstein & Lehr LLP, served as the Company's counsel. The Company estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities in its petition. Unsecured creditors were owed about $102 million. EXIDE TECHNOLOGIES: Battery Maker Needs $10 Million Lead Swap Deal ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that where most bankrupt companies try to evade, avoid or minimize liability on swaps, Exide Technologies wants the judge to approve $10 million in swaps allowing the producer of lead acid batteries to hedge the price of the principal raw material. According to the report, Exide is also seeking a first extension of its exclusive right to propose a Chapter 11 reorganization plan. An increase in the price of lead was among the factors leading to Exide's bankruptcy filing in June. To prevent a repeat, the company filed papers arranging an Oct. 16 hearing for court approval to hedge 10,000 metric tons of lead each month with JPMorgan Chase Bank NA. The report notes that if approved by the court, the maximum exposure would be $10 million, to rank alongside liability on the revolving credit financing bankruptcy. Exide said that lead represents 46 percent of the cost of goods sold. Although Exide says the swap is an ordinary course agreement not requiring court authorization, the bank won't sign onto the hedge without assent from the judge. The report relates that at the same Oct. 16 hearing, Exide for the first time will ask the court for an extension until May 31 of its exclusive right to propose a plan. The company said it hopes creditors won't object. As evidence of progress in bankruptcy, Exide pointed to how it agreed with creditors to propose a "comprehensive business plan" by March 10, followed by a plan before May 31 and approval of disclosure materials by July 24. 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 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. FAIRWAY GROUP: Moody's Assigns B3 CFR & Rates $315MM Loans B2 ------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a Caa1-PD probability of default rating to Fairway Group Acquisition Company. Moody's also assigned a B2 rating to the Fairway's $274 million senior secured term loan and $40 million senior secured revolving credit facility. Additionally, Moody's assigned Fairway an SGL-2 speculative grade liquidity rating. Rating Rationale: The ratings reflect Fairway's small scale, geographic concentration, weak credit metrics, aggressive growth strategy and Moody's expectation that cash flow will continue to be strained as the company continues to open new stores. However, the proceeds from the company's recent initial public offering have boosted its cash balance, improving its liquidity and providing a source of financing for new store openings. Moody's estimates debt to EBITDA (with Moody's standard adjustments) to be about 7.5 times and EBITA to interest to be about 1.1 times at fiscal year-end March 31, 2014. On a run rate basis (giving full year credit to recently opened stores) Moody's estimates leverage and interest coverage to be about 6.9 times and about 1.2 times respectively at March 31, 2014. Credit metrics are expected to improve in the next 12-18 months as new stores mature and increase their EBITDA contribution. However, this improvement will be partially offset by a high level of pre-opening expenses related to new store openings. Ratings also reflect Fairway's very good market presence, attractive market niche, name recognition, strong brand equity, and good liquidity. The following ratings are assigned: Corporate Family Rating at B3 Probability of default rating at Caa1-PD $40 million senior secured revolving credit facility maturing 2017 at B2 (LGD2, 29%) $274 million senior secured term loan maturing 2018 at B2 (LGD2, 29%) Speculative Grade Liquidity rating at SGL-2 The ratings outlook is stable and incorporates Moody's expectation that same store sales growth will remain positive and credit metrics will demonstrate improvement as new stores mature. The outlook also assumes no deterioration in liquidity. Ratings could be upgraded if the company's liquidity remains good, financial policies remain benign and same store sales growth remains positive. Quantitatively ratings could be upgraded if the company demonstrates the ability to achieve and maintain debt/EBITDA below 6.0 times and maintain EBITA/interest above 1.75 times. Ratings could be downgraded if liquidity or same store sales growth deteriorates or financial policies become aggressive. Ratings could also be downgraded if debt/EBITDA does not demonstrate a sustained improvement from current level or EBITA/interest is sustained below 1.25 times. Fairway is a publicly traded grocery store operator with 14 grocery stores expected by October 2013 and 3 wine stores in New York, New Jersey and Connecticut. The company is majority owned by Sterling Investment Partners and had revenues totaling $693 million for the LTM period ending June 30, 2013. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. FCC HOLDINGS: Moody's Cuts Senior Unsecured Notes Rating to Ca -------------------------------------------------------------- Moody's Investors Service downgraded the rating on Senior Unsecured Notes co-issued by FCC Holdings, LLC ("First Capital") and FCC Holdings Finance Subsidiary, Inc. to Ca from Caa3. Moody's also affirmed First Capital's Caa1 Corporate Family Rating. The outlook is negative. Ratings Rationale: The Senior Notes rating downgrade reflects the increased probability that First Capital will breach the Senior Notes' Tangible Net Worth ("TNW") covenant. At present the company has a limited cushion against the TNW covenant and the covenant is scheduled to step up at year-end 2013 and 2014. First Capital's profitability has improved versus 2011 and 2012 when it had to take sizeable provisions, but is still likely insufficient for the company to meet the stepped-up TNW covenant levels in 2013 and again in 2014. First Capital's CFR reflects the following considerations: While the company's refinancing of its bank debt facilities due 2013 has reduced near-term liquidity concerns, First Capital's dependence on short-term bilateral debt facilities still makes it vulnerable to refinancing risk in the intermediate term. Furthermore, the increased probability of the TNW covenant breach has emerged as a significant rating consideration, but the CFR recognizes the solid position of secured debt holders and their prospects for a reasonable recovery should a default occur. Finally, First Capital's CFR reflects the company's limited franchise positioning in the mid-market lending space, its significant reliance on secured funding and relatively high leverage. Moody's increased the notching between the CFR and the Senior Notes rating from two to three notches. The increased notching reflects the combination of a higher probability of default on the TNW covenant as well as the weaker recovery expectations on Senior Notes versus the company's bank and securitization facilities which have specific assets pledged against the debt. The negative rating outlook reflects the uncertainty regarding whether a covenant breach will be cured by the company's owners through an injection of capital. The TNW covenant has a 30 day cure period post quarter-end. FCC's equity owners are well- capitalized and have contributed equity to cure covenant breaches in the past, but the company does not have a formal guarantee of support. Ratings could improve if the company renegotiates its debt facility covenants to ensure a bigger cushion against the TNW covenant or obtains a guarantee of support from their equity owners. Ratings could go down if First Capital experiences an event of default on its Senior Notes. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. First Capital is a commercial finance company headquartered in New York, NY. FGA CAPITAL: S&P Affirms 'B' Shortterm Counterparty Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB+/B' long- and short-term counterparty credit ratings on Italy- based FGA Capital SpA (FGA). The outlook is negative. The affirmation follows the renewal of Fiat SpA and Credit Agricole SA's (CASA) 50/50 auto financing joint venture (JV) in FGA, ahead of the December 2014 maturity of the former agreement. The JV has been extended to December 2021 and for three-year periods thereafter, with a three-year notice period for termination. S&P understands that, as part of the agreement, the terms and conditions of funding support provided by CASA have also been revised. S&P also understands that CASA remains strongly committed to providing funding support to FGA, through unsecured lines and secured funding, in the context of the updated agreement. At the end of June 2013, CASA provided about EUR6.9 billion of funding, amounting to about 48.5% of FGA's total liabilities. S&P notes that FGA's remaining funding structure is well diversified, comprising securitizations (about 17% of its total liabilities), bond issues (about 10%), and other banking lines (about 17%) at end-June 2013. Owing to its wholesale funding structure, S&P's funding and liquidity ratios for FGA compare unfavorably with most of its peers. S&P's assessment of FGA's funding as average and liquidity as adequate is largely based on its view that FGA will likely continue to benefit significantly from strong ongoing funding support from CASA through Credit Agricole Consumer Finance (CACF). S&P also considers that FGA benefits from the stability provided by the long-term renewal of the JV, as well as the three-year notice period for termination of the agreement. However, S&P maintains its view of the company's weak business position, which continues to reflect its view of its monoline business model and an ongoing decline in Fiat's new car sales in Europe. S&P continues to incorporate one notch of uplift for group support in the rating on FGA. This reflects S&P's view that FGA is a moderately strategic subsidiary of CASA and our expectation that CASA would provide extraordinary financial support if needed. S&P believes car financing through JVs with auto manufacturers is a key strategic focus for CASA. CACF has other joint ventures with Ford in Northern Europe and in China with a local manufacturer. The negative outlook on FGA reflects the possibility that S&P could lower the ratings if it anticipates that one of the following conditions is likely to occur: -- The economic or operating conditions in which FGA operates deteriorate further and its capital position weakens--either because of higher economic risk or because of higher-than- expected pressures on the bank's profitability; -- Lower-than-expected earnings retention weakens FGA's capitalization so that S&P's projected risk-adjusted capital ratio is unlikely to remain sustainably above 10%, even if the economic and operating environment does not become tougher; or -- S&P perceives that the CASA group's commitment to support FGA diminishes, which, in S&P's view, could negatively affect FGA's funding and business position, among other factors. S&P do not currently expect to revise the outlook on FGA to stable. However, S&P could do so if it was to expect an easing in the downside risks to the economic and operating environment in Italy and to S&P's assessment of the company's capital. FRAZER/EXTON DEVELOPMENT: Court Won't Reopen Case, Reimpose Stay ---------------------------------------------------------------- Bankruptcy Judge Jean K. Fitzsimon denied the request of debtors Frazer/Exton Development, L.P., and Whiteland Village, Ltd. to reopen their Chapter 11 bankruptcy cases and reimpose the automatic stay in connection with foreclosure action. The Debtors seek to reopen their bankruptcy cases to obtain relief from a settlement agreement with Sovereign Bank, N.A., their largest creditor, and their confirmed plan of reorganization which resulted from the settlement. The Debtors contend that the Settlement Agreement is the product of discovery misconduct or fraud by Sovereign because, in responding to the Debtors' document requests in their bankruptcy cases. Sovereign only searched and produced documents from one out of three of its sources of electronically stored information. The Debtors' request for reimposition of the stay has to do with a pre-petition mortgage foreclosure action which Sovereign filed against the Debtors in state court. The Debtors seek to have the stay reimposed with regard to the Foreclosure Action to prevent Sovereign from moving fonward therein while the Debtors pursue relief from the Order, seek to have the Settlement Agreement modified and/or rescinded, and subsequently move to modify their Plan. Sovereign opposed the Debtors' request. Sovereign provided the Debtors with up to $23 million in loans in 2007 to finance the "payment of clean-up costs associated with the environmental remediation of the proposed site of "Whiteland Village," a 100 acre, continuing care retirement community, which the Debtors planned to develop. That loan was later increased to $29 million. According to Judge Fitzsimon, the Debtors' Motion will be denied because no purpose would be served by reopening the Debtors' bankruptcy cases. The Debtors are not legally entitled to pursue a motion under Fed.R.Civ.P. Rule 60(b)(3) because the one year deadline for filing such a motion has expired and the doctrine of equitable tolling would be inapplicable based on the Debtors' failure to diligently exercise their rights. Moreover, the Debtors would not be entitled to pursue an independent action under Rule 60(d)(1) because, as a matter of law, they cannot satisfy the standard required for such an action. A copy of the Court's Sept. 26, 2013 Memorandum Opinion is available at http://is.gd/WP7jvyfrom Leagle.com. About Frazer/Exton Development Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P., owns real property in Chester County. Whiteland Village Ltd. obtained various approvals and permits for the development of the real property as a continued care retirement community. Whiteland Village Ltd. and Frazer/Exton Development, L.P., filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11-14041) on May 19, 2011. The case was initially assigned to Judge Stephen Raslavich but was transferred to Judge Jean K. FitzSimon. On Feb. 2, 2012, the Court confirmed the Debtors' Second Amended Plan of Reorganization, which provided that lender Sovereign's secured claim would be treated in accordance with the terms of a Settlement Agreement. In May 2012, the Court entered the Final Decree closing the Debtors' bankruptcy case. FREESEAS INC: Hanover Assigns Rights Under Settlement Agreement --------------------------------------------------------------- FreeSeas Inc. has entered into an assignment and amendment agreement with Deutsche Bank Nederland N.V., a Magna Group affiliate fund Hanover Holdings I, LLC, Crede CG III, Ltd., a wholly-owned subsidiary of Crede Capital Group, and various wholly-owned subsidiaries of the Company. Mr. Ion G. Varouxakis, chairman, president and chief executive officer of the Company made the following comments: "We are pleased to enter into the Assignment, which will remove, immediately upon appropriate court approval, approximately $30 million of debt from our balance sheet. Since our last announcement on July 5, 2013, we have completed our last trade debt swap into equity of about $5.8 million and our equity line. Based on our improved capital structure and debt free vessels, we will now be able to expedite our plans to pursue opportunities for growth, instead of waiting months for Deutsche Bank to be repaid, capitalizing on the current low market values for vessels and improved shipping market conditions. We have greatly appreciated Magna Group's contribution, who was instrumental in structuring and executing a series of transactions including the Settlement Agreement, optimally positioning us in the market." On July 5, 2013, the Company entered into a Debt Purchase and Settlement Agreement with Deutsche Bank, Hanover and the various wholly-owned subsidiaries of the Company. Pursuant to the terms of the Settlement Agreement, Hanover agreed to purchase USD$10,500,000 of outstanding indebtedness owed by the Company to Deutsche Bank in accordance with the terms thereof. Upon payment in full of the purchase price to Deutsche Bank for such purchased indebtedness in accordance with the terms of the Settlement Agreement, the remaining outstanding indebtedness of FreeSeas and its subsidiaries to Deutsche Bank will be forgiven, and the mortgages granted to Deutsche Bank on both of its two security vessels discharged and the Company would own these two vessels free and clear of all those liens granted to Deutsche Bank. Pursuant to the Assignment, Hanover assigned all of its rights and obligations under the Settlement Agreement and an escrow agreement to Crede in accordance with the terms thereof. Crede paid Hanover $3,624,345 in the aggregate, $2,624,345 of which represented the amount deposited in escrow by Hanover and fees and other expenses incurred by Hanover. In addition, the escrow agreement was amended and pursuant thereto Crede deposited an additional $8,002,400 into escrow, following which the entire aggregate amount held in escrow pursuant to the escrow agreement was $10,542,057, which represented the entire purchase price of the purchased indebtedness plus fees and expenses incurred by Deutsche Bank. That entire amount would be released from escrow to Deutsche Bank upon the receipt of the court approval described in the Settlement Agreement, and the debt forgiveness, mortgage discharge, and owning the two vessels free and clear of all liens granted to Deutsche Bank would occur concurrently with that release. In addition, the Company, in partial consideration for Hanover's cancellation of certain covenants, issued to Hanover 2,000,000 shares of common stock and granted customary piggy-back registration rights for such shares, together with a demand registration right commencing 120 days after Sept. 25, 2013. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. FRESH & EASY: Grocery Chain Files Chapter 11 to Sell to Yucaipa --------------------------------------------------------------- Fresh & Easy Neighborhood Market Inc., the U.S. grocery chain of British retail giant Tesco PLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. 13-12569) on Sept. 30, 2013, in Wilmington, to pursue a sale of its stores to an affiliate of Yucaipa Cos. In its Chapter 11 petition, Fresh & Easy estimated $100 million to $500 million in assets and more than $500 million in debts. The Yucaipa affiliate is buing about 150 of Fresh & Easy's 167 grocery stores. Fresh & Easy proposes to hold an auction Nov. 11 to test Yucaipa's offer. According to Bloomberg News' Steven Church and Phil Milford, under the proposed deal, a Tesco affiliate would loan the Yucaipa affiliate $120 million to help fund the takeover. Tesco would get warrants to buy as much as 10 percent of the equity in the reorganized supermarket chain. Should Yucaipa win a proposed court-sanctioned auction, a Tesco unit would retain 22.5 percent of the equity in the reorganized chain. Jacqueline Palank, writing for The Wall Street Journal, reports that Tesco decided to exit the U.S. grocery market after watching Fresh & Easy struggle for several years. Founded in 2006 to sell healthy food at affordable prices, Fresh & Easy quickly grew to operate 200 stores in Arizona, California and Nevada by 2012. Tesco invested more than $610 million in the business in its first two years to help fund its rapid growth. According to WSJ, Fresh & Easy's early growth was thwarted, however, by the economic downturn and real estate crisis, which particularly hit hard in the area of the country where it operates. As a result, the company has incurred annual operating losses each year since 2006, requiring Tesco to funnel more debt and equity to the company to support its operations. Last year, Tesco began exploring options for Fresh & Easy before settling on a sale. Fresh & Easy owes more than $738 million to Tesco on various intercompany loans, making Tesco the company's largest single creditor. Bloomberg notes that under the U.S. Bankruptcy Code, Tesco can cancel unwanted leases easier than outside of court protection and hold an auction for Fresh & Easy's assets. FRIENDFINDER NETWORKS: Guccione Collection Sues in Bankr. Court --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FriendFinder Networks Inc., the operator of adult social networking websites, was sued in bankruptcy court Sept. 25 by Guccione Collection LLC, a company formed to own property that once belonged to Bob Guccione, the former owner of Penthouse Magazine. According to the report, FriendFinder, which now owns the Penthouse brand, demanded that Guccione Collection cease using images it owns. Guccione Collection responded by starting a lawsuit in Bankruptcy Court in Delaware, where FriendFinder is undergoing reorganization. The report notes Guccione Collection contends the images shown on its website were owned by Bob Guccione individually and were never property of Penthouse. About FriendFinder Networks FriendFinder Networks (formerly Penthouse Media Group) owns and operates a variety of social networking Web sites, including FriendFinder.com, AdultFriendFinder.com, Amigos.com, and AsiaFriendFinder.com. In total, its Web sites are offered in 12 languages to users in some 170 countries. The company also publishes the venerable adult magazine PENTHOUSE, and produces adult video content and related images. The Company is based in Boca Raton, Florida. FriendFinder Networks reported a net loss of $49.44 million in 2012, a net loss of $31.14 million in 2011, and a net loss of $43.15 million in 2010. FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. FriendFinder filed together with the Chapter 11 petition a proposed plan with details on the reorganization worked out before bankruptcy with about 80 percent of first- and second-lien lenders. Holders of the $234.3 million in 14 percent first-lien notes will be paid in full with an equal amount of new notes. Holders $330.8 million on two issues of second-lien notes will become the new owners. Unsecured creditors are to be paid in full. FRONTIER AIRLINES: Pilots Negotiations Jeopardize Sale Talks ------------------------------------------------------------ Jack Nicas and Mike Spector, writing for The Wall Street Journal, reported that the long-awaited sale of Frontier Airlines is in jeopardy because of stalled negotiations between its pilots and the prospective buyer, Indigo Partners LLC, according to two people familiar with the investment firm's thinking. The WSJ report related that Indigo and Frontier's parent company, Republic Airways Holdings Inc., are not expected to reach a deal by Sept. 30, when Indigo's exclusivity period is set to expire, according to one of these people. Republic has been trying for almost two years to off load Frontier, a Denver-based airline that carried 5.1 million passengers in the first half of this year, according to the report. Earlier this summer, Republic entered into exclusive talks with Indigo, the investment firm of former America West Airlines Chief Executive Bill Franke, and the two sides have made significant progress toward a transaction, these people said, the report further related. But stalled negotiations with Frontier pilots are now endangering the deal, they said. In 2011, Frontier agreed to give its pilots an equity stake in the company or a $7.2 million cash settlement in exchange for cuts to their pay and benefits, according to regulatory filings, the report noted. Indigo would like to terminate or reduce promised equity stakes for Frontier's pilots and flight attendants, these people and another person familiar with the talks said. About Frontier Airlines Based in Denver, Colorado, Frontier Airlines -- http://www.frontierairlines.com/-- is the second-largest jet service carrier at Denver International Airport. Frontier Airlines Holdings Inc. and its affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represented the Debtors in their restructuring efforts. Togul, Segal & Segal LLP was the Debtors' Conflicts Counsel, Faegre & Benson LLP was the Debtors' Special Counsel, and Kekst and Company was the Debtors' Communications Advisors. In June 2009, Republic Airways Holdings offered to acquire the Debtors' assets for $108 million. In July 2009, Southwest Airlines countered with a $113.6 million bid. In August 2009, Republic won the bidding, paying $109 million and assuming about $1 billion of debt and aircraft-lease obligations. In September 2009, the Bankruptcy Court confirmed the Company's Plan of Reorganization which was premised on the Republic deal. Republic closed the deal in October 2009. Frontier Airlines became a wholly owned subsidiary of Indianapolis-based Republic. GANNETT CO: Moody's Keeps Ratings Over $250MM Senior Notes Upsize ----------------------------------------------------------------- Moody's Investors Service says that the $250 million increase in Gannett, Co., Inc.'s senior notes offering to $1.25 billion from $1 billion has no immediate impact on ratings of the company. Proceeds from the offering being upsized will be used to finance the Belo acquisition and for general corporate purposes. All other ratings remain unchanged and the outlook remains negative. The last rating action was on September 26, 2013, when $1 billion senior notes were rated Ba1 and the Speculative Grade Liquidity Rating was changed to SGL -- 1 from SGL -- 2. All other credit ratings were affirmed. Gannett Co, Inc., headquartered in McLean, VA, is a diversified local newspaper/publisher (61% LTM 6/30/13 reported revenue pro forma for the Belo acquisition) and broadcast operator (27% of revenue) that also has ownership interests in a number of digital ventures (12% of revenue) including a 52.9% stake in CareerBuilder, which is fully consolidated in Gannett's financial statements. Gannett announced on June 13 that it was acquiring Belo for approximately $2.2 billion (including debt assumed) in an all-cash transaction that the company expects to close by the end of 2013. Revenue for the LTM 6/30/13 period pro forma for the Belo acquisition was approximately $6.1 billion. GATEHOUSE MEDIA: Cancels Unused Portion of 2007 Credit Facility --------------------------------------------------------------- GateHouse Media, Inc., notified Cortland Products Corp, as administrative agent, that effective Sept. 27, 2013, it would be exercising its right to terminate the unused revolving credit portion of the Credit Agreement dated as of Feb. 27, 2007, as amended. In connection with that termination, the Company will be required to pay $25,277 on the date of termination. Reissues Q2 Financial Statements The Company reissued its unaudited condensed consolidated financial statements for the second quarter ended June 30, 2013, which financial statements appear in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2013, filed with the SEC on Aug. 1, 2013, to include a subsequent event footnote. The Company has not made any other retrospective revisions to the financial statements that appear in the 10-Q. A copy of the Revised Form 10-Q is available at: http://is.gd/G7yKDX E&Y Amends Report Ernst & Young LLP, the Company's independent registered public accounting firm, reissued its report with respect to the Company's consolidated financial statements for the year ended Dec. 30, 2012, which report appears in the Company's annual report on Form 10-K for the year ended Dec. 30, 2012, filed with the SEC on March 7, 2013, to (i) include a going concern uncertainty paragraph, (ii) give retrospective treatment to a discontinued operation and (iii) include a subsequent event footnote. In their report, Ernst & Young noted that the Company entered into an agreement with the lenders under its 2007 credit facility to restructure the terms of the credit facility. Among other matters, the restructuring agreement requires the Company to file a voluntary petition seeking to reorganize under Chapter 11 of the U.S. bankruptcy code, which would constitute an event of default under the terms of the Company's 2007 credit facility. These conditions raise substantial doubt about its ability to continue as a going concern. A copy of the Reissued Report is available for free at http://is.gd/LepTkU Management and Advisory Agreement GateHouse, on Aug. 27, 2013, entered into a management and advisory agreement with Local Media Group Holdings, LLC. The Management Agreement was entered into in connection with an agreement under which Newcastle Investment Corp. has agreed to purchase all of the capital stock of Dow Jones Local Media Group, Inc. Pursuant to the Management Agreement, the Company manages the business conducted by LMG and its subsidiaries, as well as the day-to-day operations of LMG and its subsidiaries. Under the terms of the Management Agreement, the Company will receive the following compensation: (i) from Aug. 27, 2013, until the closing under the SPA, a monthly fee of $40,000; and (ii) for the period following the Acquisition Date, an annual management fee of $1,100,000. The Annual Fee will be adjusted each year, up to a maximum annual fee of $1,210,000. In addition to the Annual Fee, the Company will also be entitled to receive annual incentive compensation in connection with the Company's management of the assets and businesses of LMG based on 12.5 percent of the EBITDA of LMG in excess of budget. The Management Agreement is in effect until the second anniversary of the Acquisition Date, and automatically renews for additional consecutive two-year periods unless terminated by either party at least 30 days prior to a renewal date. If the Management Agreement is terminated prior to a renewal period by LMG LLC, the Company is entitled to receive a termination fee equal to the sum of (i) the average of the Annual Fee for the previous three full years (or the lesser number of years if fewer than three full years have elapsed); and (ii) all accrued but unpaid incentive compensation. The Management Agreement contains other customary termination provisions. VIE Determination On Sept. 25, 2013, the Company determined that LMG LLC is a variable interest entity with the Company having control as a primary beneficiary. As a result of such determination, as of Sept. 3, 2013, the Company is required to consolidate the results of the LMG LLC with the Company's results. Accordingly, the Company will therefore consolidate LMG LLC's financial results with the Company's financial statements as a VIE pursuant to U.S. GAAP. The Company does not have any equity interest in LMG LLC. A copy of the Management Agreement is available for free at: http://is.gd/S3Ospl About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of June 30, 2013, the Company had $433.70 million in total assets, $1.28 billion in total liabilities and a $848.85 million total stockholders' deficit. GLW EQUIPMENT: Cash Collateral Hearing Continued to Oct. 10 ----------------------------------------------------------- The hearing on the request of GLW Equipment Leasing, LLC, for authorization to use cash collateral from Sept. 25, 2013, through December 31, 2013; and to grant adequate protection, has been continued for Oct. 10, 2013, at 9:30 a.m. at Courtroom 2C, 2nd floor, 316 North Robert Street, St. Paul. The hearing was originally set for Sept. 25. The Debtor projects that it can operate in the ordinary course through December 31, 2013 with use of cash collateral and without additional post petition financing. The Debtor has a need to use cash collateral through December 31, 2013, to pay operating expenses in the amounts identified in the Budget. If the Debtor is not permitted to use cash collateral in the amounts and for the purposes set forth in the Budget from September 25, 2013 through December 31, 2013 the Debtor cannot continue to operate. The Debtor is a Minnesota limited liability company formed to own and manage a truck and trailer equipment lease portfolio. As of the Petition Date, the total debt incurred, owing and secured by the Equipment is $17,888,993. The Equipment Debt was first incurred by the three members of the Debtor -- Warren Cadwallader, Lee Cadwallader and Gale Werner. The Debtor proposes, as adequate protection for the Equipment Lenders, to grant (i) replacement liens in the Equipment Lenders respective collateral; and to (ii) report and account for the cash proceeds from use of the Equipment. As additional adequate protection, the Debtor proposes, on or before the 27th day of each calendar month commencing September 27, to make interest payments at the rate of 3-1/2% per annum and principal reduction payments to each Equipment Lender. The interests of the Equipment Lenders are adequately protected by the replacement liens and monthly cash payments. The Debtor notes that prior to the hearing on the Cash Collateral Motion, it may enter into a stipulation with one or all of the Equipment Lenders concerning use of cash collateral, adequate protection and other related matters. In the event the Debtor enters into any such stipulation, the Debtor will seek approval of the stipulation without further notice of hearing pursuant to Bankruptcy Rule 4001(d)(4). GLW Equipment Leasing, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-44202) in Minneapolis, Minnesota, on Aug. 27, 2013. Warren Cadwallader signed the petition as president. The Debtor estimated at least $10 million in assets and liabilities. Michael F. McGrath, Esq. -- mfmcgrath@ravichmeyer.com -- Will R. Tansey, Esq., and Michael D. Howard, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey, P.A., Minneapolis, MN, serves as the Debtor's counsel. Judge Katherine A. Constantine presides over the case. GLW EQUIPMENT: Can Employ Ravich Meyer as Bankruptcy Counsel ------------------------------------------------------------ GLW Equipment Leasing, LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Ravich Meyer Kirkman McGrath Nauman & Tansey, P.A. as cousel. Attorneys for the Debtor can be reached at: Michael F. McGrath, Esq. Will R. Tansey, Esq. Michael D. Howard, Esq. RAVICH MEYER KIRKMAN McGRATH NAUMAN & TANSEY, P.A. 4545 IDS Center 80 South Eighth Street Minneapolis, MN 55402 Tel: (612) 332-8511 Fax: (612) 332-8302 GLW Equipment Leasing, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-44202) in Minneapolis, Minnesota, on Aug. 27, 2013. Warren Cadwallader signed the petition as president. The Debtor estimated at least $10 million in assets and liabilities. Judge Katherine A. Constantine presides over the case. GLYECO INC: Appoints Alicia Williams as CFO ------------------------------------------- The Board of Directors of GlyEco, Inc., appointed Alicia Williams to be the chief financial officer of the Company, effective Sept. 20, 2013. Ms. Williams, 36, has served as the Company's interim principal financial officer since January. As Secretary, Controller and VP of Internal Operations, she has managed the financial and accounting processes of the Company since 2008. She holds an extensive accounting background, including receiving a Bachelor of Science in Management Information Systems & Accounting, and she is licensed to practice law in the State of Arizona. From October 2008 until the date Global Recycling Technologies, Ltd., a Delaware corporation and privately held operating subsidiary, merged with and into the Company, Ms. Williams served as the director of internal operations of Global Recycling. Upon the consummation of the merger of Global Recycling with and into the Company, Ms. Williams became the controller and VP of internal operations of the Company. Ms. Williams was also appointed by the Company's Board of Directors to be the secretary of the Company on Nov. 30, 2011. From August 2004 until she joined the Global Recycling, Ms. Williams was a full-time law student or part-time law clerk. From March 2000 to August 2004, Ms. Williams served as a senior systems analyst/data lead at Intel Corporation in Chandler, Arizona. Ms. Williams holds a law degree (J.D.) from the University of Southern California Gould School of Law in Los Angeles, California (December 2007). About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Glyeco disclosed a net loss of $1.86 million on $1.26 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $592,171 on $824,289 of net sales for the year ended Dec. 31, 2011. The Company's balance sheet at March 31, 2013, showed $9.16 million in total assets, $2.63 million in total liabilities and $6.53 million in total stockholders' equity. Jorgensen & Co., in Lehi, UT, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has not yet achieved profitable operations and is dependent on its ability to raise capital from stockholders or other sources and other factors to sustain operations. These factors, among other matters, raise substantial doubt that the Company will be able to continue as a going concern. GORDON PROPERTIES: Opposes Bid to Convert Case to Ch. 7 ------------------------------------------------------- Gordon Properties, LLC, opposes the motion of creditor Stites & Harbison, PLLC, to covert the Chapter 11 case to one under Chapter 7, arguing that the Creditor's allegations that (i) there is substantial or continuing loss to or diminution of the estate, and (ii) there is absence of a reasonable likelihood of rehabilitation are neither true and there is no basis for conversion of the case. According to the Debtor's counsel, Donald F. King, Esq., at Odin Feldman & Pittleman PC, in Reston, Virginia, the Creditor failed to acknowledge that the value of the Debtor's assets has not decreased. At the time of the filing of its case, the Debtor was solvent, notwithstanding that it did not have sufficient cash flow to pay the claims being asserted against it at that time, Mr. King relates. The Debtor's solvency has not changed, even when the subordinated loans are considered, he tells the Court. Consequently, the value of the Debtor's estate has not diminished, and the Debtor is capable of paying the allowed claims of its creditors, Mr. King adds. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, to deny the Creditor's Motion. About Gordon Properties Alexandria, Va.-based Gordon Properties, LLC, owns 40 condominium units in a high-rise apartment building with both residential and commercial units and two commercial units adjacent to the high- rise building. Gordon Properties' ownership of these condos represents about a 20% interest in the Forty Six Hundred Condominium project -- http://foa4600.org/-- in Alexandria. Gordon Properties also owns one of the adjacent commercial units, a restaurant. Gordon Properties sought Chapter 11 protection (Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is represented by Donald F. King, Esq., at Odin, Feldman & Pittleman PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in assets and $1,546,344 in liabilities. Condominium Services filed its chapter 11 petition (Bankr. E.D. Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the condominium association, with a disputed claim of $436,802.00. The association filed a proof of claim asserting a claim of $453,533.12. A second proof of claim was filed by the Internal Revenue Service for $1,955.45. According to its schedules, if both claims are allowed, it has a net deficit of about $426,900. CSI is wholly owned by Gordon Properties. In February 2012, Judge Mayer denied the motion of the association to substantively consolidate the chapter 11 bankruptcy cases of Gordon Properties and Condominium Services, Inc., the condominium management company. Gordon Properties and CSI opposed the motion. The two cases were previously administratively consolidated. Stephen E. Leach has been appointed as examiner in the Debtor's case. Leach Travell Britt, PC, represents the examiner as counsel. GREEN EARTH: Incurs $6.59-Million Net Loss in Fiscal 2013 --------------------------------------------------------- Green Earth Technologies, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $6.59 million on $8.03 million of net sales for the year ended June 30, 2013, as compared with a net loss of $11.26 million on $7.38 million of net sales during the prior year. The Company's balance sheet at June 30, 2013, showed $9.45 million in total assets, $22.91 million in total liabilities and a $13.45 million total stockholders' deficit. Friedman LLP, in East Hanover, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company's losses, negative cash flows from operations, working capital deficit, related party note currently in default and its ability to pay its outstanding liabilities through fiscal 2014 raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/vzOMDv About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. GTEC INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: GTEC Inc. 5950 Carmichael Place, Suite 200 Montgomery, AL 36117 MONTGOMERY, AL Case No.: 13-32550 Chapter 11 Petition Date: September 27,2013 Court: U.S. Bankruptcy Court Middle District of Alabama (Montgomery) Judge: Dwight H. Williams Jr. Debtor's Counsel: James L. Day Memory & Day P.O. Box 4054 Montgomery, AL 36103-4054 334-834-8000 Fax: 334-834-8001 E-mail: jlday@memorylegal.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bowen Ballard, authorized individual. A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/almb13-32550.pdf HAMPTON LAKE: Oct. 15 Hearing on Confirmation of Amended Plan ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina, according to Hampton Lake LLC's case docket, continued until Oct. 15, 2013, at 9 a.m., the hearing to consider the Amendment to Chapter 11 Plan filed by the Debtor in September. As reported in the Troubled Company Reporter on June 27, 2013, the Court has determined that the Disclosure Statement filed by the Debtor contains adequate information, and accordingly approved the Disclosure Statement on June 24. With this development, the Debtors were authorized to distribute the Plan documents and corresponding ballot forms to creditors by Aug. 12, 2013. Creditors eligible to vote were given until Sept. 9, 2013 to cast their ballots on the Plan. The Court previously set the hearing on Sept. 17, 2013, to consider confirmation of the Plan. Shortly before the Court entered the Disclosure Statement Order, the Debtor submitted an amendment to the Disclosure Statement and the Plan dated June 17, 2013. Among other things, the amendments refer to: (1) Clarification on the Debtor's history as it pertains to failure to make scheduled payments to Charter Note Holders in November 2009 and the corresponding forbearance agreement it negotiated on those payments; (2) Clarification on the transfer and release of the Debtor to the Official Committee of Unsecured Creditors all rights to administer the unsecured, non-priority claims against the estate; (3) Clarification that the Creditors Committee will continue to exist on and after the effective date of confirmation until all unsecured non-priority claims have been administered; and (4) A revised feasibility budget as exhibit. A full-text copy of the Amendments and other clarifications, dated June 17, 2013, to the Disclosure Statement and Plan is available for free at: http://bankrupt.com/misc/HAMPTONLAKE_DSAmdmentJune17.PDF About Hampton Lake Hampton Lake, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 13-02482) in Charleston, South Carolina, on April 29, 2013. G. William McCarthy, Jr., Esq. and Daniel J. Reynolds, Jr., Esq., at McCarthy Law Firm, LLC, serve as counsel to the Debtor. The Debtor operates the Hampton Lake Subdivision in Bluffton, South Carolina. The Debtor disclosed $23.4 million in total assets and $48.4 million in liabilities in its schedules. The Debtor has a Chapter 11 plan that contemplates selling the remaining 235 lots over the next three years to generate cash covering payments to creditors under the plan. The plan calls for paying about 88.5 percent of the first-lien debt by selling out the project in the next three years. The noteholders are slated for an 8.75 percent recovery. The Court will convene a hearing on Sept. 17, 2013, to consider confirmation of the Plan. The Court approved the Disclosure Statement on June 24, 2013. The Office Committee of Unsecured Creditors is represented by J. Ronald Jones, Jr., Esq., at Clawson And Staubes, LLC, as counsel. HAMPTON ROADS: Thomas Dix Appointed Chief Financial Officer ----------------------------------------------------------- Thomas B. Dix III has been appointed executive vice president, chief financial officer and treasurer of Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank. In this position, Mr. Dix will report to Douglas J. Glenn, president and chief executive officer of the Company and chief executive officer of BHR, and will be responsible for directing the financial functions of the holding company and its subsidiaries, including accounting, tax, treasury, financial planning, investor relations and vendor management. Mr. Glenn said, "We conducted a thorough search process with the assistance of Heidrick & Struggles and determined that Thom was the most qualified candidate to lead our finance function. Since his appointment to the Interim CFO role in April, Thom has consistently demonstrated the range and depth of skills and judgment required of a strong CFO. The Board and I have great confidence that he will sustain the progress we have been making in Finance." Mr. Dix has served as senior vice president, treasurer and interim chief financial officer since April 2013. He was appointed senior vice president and treasurer of the Company and BHR in May 2011. He also served as corporate secretary of the Company and BHR from October 2011 to April 2013. Previously, he served as senior vice president and credit risk manager of the Company, senior vice president and chief lending officer of Shore Bank and vice president, Commercial Banking for BHR. Before joining BHR in April 2009, Mr. Dix held positions in credit, asset-based lending, branch management and commercial lending with Mercantile Peninsula Bank/PNC Bank and its predecessor institutions from 2001 to 2009. Dix earned a BA in economics from the University of Virginia. In connection with his appointment, Mr. Dix's annual base salary will be increased to $250,000. In addition, Mr. Dix is eligible to participate in all of the plans and arrangements that are generally available to all of the Company's salaried employees. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at June 30, 2013, showed $2 billion in total assets, $1.82 billion in total liabilities and $179.23 million in total shareholders' equity. HANOVER INSURANCE: Fitch Affirms 'BB' Subordinated Debt Rating -------------------------------------------------------------- Fitch Ratings has affirmed the 'A-' Insurer Financial Strength (IFS) rating of The Hanover Insurance Company, the principal operating subsidiary of The Hanover Insurance Group (NYSE: THG). Fitch has also affirmed the following ratings for THG: -- Issuer Default Rating (IDR) at 'BBB'; -- Senior unsecured notes at 'BBB-'. The Rating Outlook is Stable. (A full rating list follows at the end of this press release.) Key Rating Drivers THG's ratings reflect adequate operating subsidiary capitalization, and Fitch's belief that THG's operating subsidiaries internal capital formation is likely to marginally improve over the intermediate term. GAAP operating leverage (net premium written to shareholders' equity, excluding unrealized gains on fixed income securities) was 1.97x and net leverage was 5.15x at June 30, 2013. Operating leverage has increased significantly over the last three years nearer to maximum sector credit factor guidelines for the current rating level due largely to acquisitions and limited growth in shareholders' equity. The score for U.S. subsidiaries on Fitch's Prism capital model was 'adequate' at year-end 2012 and the financial leverage ratio (FLR) was 28.6% at June 30, 2013. Profitability declined over the last three years primarily due to above average catastrophe related losses. THG's calendar-year combined ratio averaged 103.5% for 2010 - 2012 with an average 8.1 points in catastrophe losses. For the first six months of 2013, THG reported a calendar-year combined ratio of 97.6%, with 3.7 points in catastrophe losses. The underwriting gain for six months improved to $53 million, from an underwriting loss of $21 million for the first six months of 2012. THG's annualized GAAP net income return on equity improved to 10.2%, compared to 2.4% for the full year 2012. GAAP operating EBIT coverage improved to 5.1x for six months 2013. Parent company cash and investments was $212 million, net of unsettled transactions at June 30, 2012. THG's future profit potential is buoyed by a hardening premium rate environment across most U.S. property/casualty market segments. Recently, THG has experienced an improving price environment in commercial lines overall and has increased rates in auto, especially commercial auto, in response to higher loss trends. A more balanced U.S. risk appetite and shifts in the company's geographic mix from traditional northeast markets and from a product perspective towards more specialty commercial lines also positions the company for improved profitability over the intermediate term. Rating Sensitivities Key ratings triggers that could lead to a downgrade include: a material and sustained deterioration in the Prism score and/or material increases in GAAP operating leverage from current levels; GAAP operating EBIT coverage below 5x combined with maintenance of parent company cash and investments less than 2x annual interest expense; a material deterioration in underwriting or operating performance relative to peers; and a material deterioration in THG's reserve adequacy. Key ratings triggers that could lead to an upgrade include underwriting results and consolidated profitability sustained at levels comparable to higher rated peer companies and industry averages; improvement in the Prism score to 'strong'; and maintenance of the run-rate holding company financial leverage ratio below 25%. Fitch affirms the following ratings with a Stable Outlook: The Hanover Insurance Group -- IDR at 'BBB'; -- 7.5% senior notes due 2020 'BBB-'; -- 6.375% senior unsecured notes due 2021 at 'BBB-'; -- 7.625% senior unsecured notes due 2025 at 'BBB-'; -- 8.207% junior subordinated debentures due 2027 at 'BB'; -- 6.35% subordinated debentures due March 30, 2053 'BB'. The Hanover Insurance Company Citizens Insurance Company of America -- IFS at 'A-'. HAWAII OUTDOOR: Oct. 21 Further Cash Collateral Hearing Set ----------------------------------------------------------- A further cash collateral hearing has been scheduled for Oct. 21, 2013, at 9:30 a.m. in Honolulu, in the Chapter 11 case of Hawaii Outdoor Tours, Inc. David C. Farmer, the Chapter 11 Trustee of Hawaii Outdoor, is still in need of cash collateral and is working on a 10th cash collateral stipulation. The Trustee notes that he contemplates filing a sale motion and may request to expedite the matter. About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Naniloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Naniloa 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 mortar 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. Ramon J. Ferrer, Esq., represents the Debtor as 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. Timothy J. Hogan, Esq., represents David C. Farmer, the Chapter 11 Trustee, as counsel. Christopher J. Muzzi, Esq., at Tsugawa Biehl Lau & Muzzi, LLLC, represents the Official Committee of Unsecured Creditors as counsel. HOUSTON REGIONAL: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Houston Regional Sports Network, L.P. 1201 San Jancinto, Suite 200 Houston, TX 77002 HARRIS, TX Case Number: 13-35998 Involuntary Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Marvin Isgur Petitioners' counsel: Vincent P Slusher DLA Piper (US) LLP 1717 Main Suite 4600 Dallas, TX 75201 Tel: 214-743-4572 Fax: 972-813-6267 E-mail: vince.slusher@dlapiper.com Alleged creditors who signed the involuntary petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ National Digital Services rendered $10,517 Television Center, LLC 4100 E. Dry Creek Road, Centennial, CO 80122 Comcast Sports Management Services Fees $1,251,573 Services, LLC One Comcast Center, Philidelphia, PA 19103 Houston SportsNet Finance Money Loaned $100,000,000 LLC One Comcast Center, 1701 JFK Blvd. Philidelphia, PA 19103 Comcast SportsNet Services Rendered $43,129 California, LLC 4450 East Commerce Way Sacramento, CA 95834 HOYT TRANSPORTATION: Selling 18 Buses in Private Sale ----------------------------------------------------- Hoyt Transportation Corp., in a second motion filed September 13, asked the U.S. Bankruptcy Court for the Eastern District of New York to approve two private bus sale to independent third parties. The Debtor sought additional authorization to sell 18 buses from its remaining fleet of some 200 school buses via two private sale for a total amount of $188,000. Penny Transportation proposed to buy 15 buses for $177,500; while C&C Inc., will buy three buses for $10,500. According to the Debtor, none of the buses are subject to the purchase money notes held by Sovereign Bank. The buses in the sale are wholly unencumbered and the proceeds will be held in deposit in the Debtor's operating accounts. As reported in the Troubled Company Reporter on Sept. 4, 2013, the Hon. Nancy Hershey Lord, in August, authorized the Debtor to sell buses. On July 25, the Debtor sought approval of three private sales of schools buses to: 1. Quality Bus Service LLC (40 buses) for $1,112,500; 2. Jofaz Transportation, Inc. (38 buses) for $1,092,000; and 3. Agostino Vona (20 buses) for $750,000. The Court also ordered that, to the extent that certain of the buses to be sold are subject to liens of Sovereign Bank, N.A., the Debtor is authorized to satisfy the respective liens of Sovereign Bank, N.A. from the proceeds of the sales of the encumbered buses, such liens totaling $1,585,979 based upon the updated pay-off schedule. About Hoyt Transportation Brooklyn, New York-based Hoyt Transportation Corp. filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44299) on July 13, 2013, estimating at least $10 million in assets and liabilities. The Debtor is represented by Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP. Brooklyn-based Hoyt specializes in transportation for children with disabilities. Hoyt operated 350 buses until the contract with the Department of Education expired. HUNTERSVILLE PLAZA: Case Summary & 7 Unsecured Creditors -------------------------------------------------------- Debtor: Huntersville Plaza Phase Two, LLC 9009-B Perimeter Woods Drive Charlotte, NC, 28216 MECKLENBURG, NC Type of Business: Single Asset Real Estate Case No.: 13-32085 Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court Western District of North Carolina (Charlotte) Judge: Laura T. Beyer Debtor's Counsel: James H. Henderson JAMES H. HENDERSON, P.C. 1201 Harding Place Charlotte, NC 28204-2248 Tel: 704.333.3444 Fax: 704.333.5003 Email: henderson@title11.com Total Assets: $2.64 million Total Liabilities: $2.22 million The petition was signed by Richard W. Davis, manager. A copy of the Debtor's list of seven unsecured creditors is available for free at http://bankrupt.com/misc/ncwb13-32085.pdf IDERA PHARMACEUTICALS: Priced Common Stock & Warrants Offerings --------------------------------------------------------------- Idera Pharmaceuticals, Inc., priced an underwritten public offering of 13,727,251 shares of common stock for a public offering price of $1.55 per share, and pre-funded warrants to purchase up to an aggregate of 4,175,975 shares of common stock at the per share public offering price for the common stock less the $0.01 per share exercise price for each that pre-funded warrant. The gross proceeds to Idera from this offering are expected to be approximately $27.7 million, before deducting the underwriting discounts and commissions and other estimated offering expenses payable by Idera and excluding the proceeds, if any, from the exercise of the pre-funded warrants. The offering is expected to close on or about Sept. 30, 2013, subject to customary closing conditions. Idera anticipates using the net proceeds from the offering to fund its planned Phase 1/2 clinical trials of IMO-8400 intended to evaluate its use in certain genetically defined forms of B-cell lymphomas, to fund its planned Phase 1 clinical trial of IMO-9200 and for working capital and other general corporate purposes. Piper Jaffray & Co. is acting as sole manager for the offering. About Idera Pharmaceuticals Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a clinical stage biotechnology company engaged in the discovery and development of novel synthetic DNA- and RNA-based drug candidates that are designed to modulate immune responses mediated through Toll-like Receptors, or TLRs. The Company has two drug candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a TLR7, TLR8, and TLR9 antagonist, in clinical development for the treatment of autoimmune and inflammatory diseases. In the auditors' report on the consolidated financial statements for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston, Mass., expressed substantial doubt about Idera's ability to continue as a going concern, citing recurring losses and negative cash flows from operations and the necessity to raise additional capital or alternative means of financial support, or both, prior to Dec. 31, 2013, in order to continue to fund its operations. The Company reported a net loss of $19.2 million on $51,000 of revenue in 2012, compared with a net loss of $23.8 million on $53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of reimbursement by licensees of costs associated with patent maintenance. The Company's balance sheet at March 31, 2013, showed $6.81 million in total assets, $4.10 million in total liabilities, $5.92 million in series D redeemable convertible preferred stock, and a $3.21 million total stockholders' deficit. ICEWEB INC: To Issue 25 Million Shares Under 2012 Equity Plan ------------------------------------------------------------- The Board of Directors of IceWEB, Inc., approved an Amendment No. 2 to the Company's 2012 Equity Compensation Plan to increase the total shares under the Plan from 80,000,000 common shares to 105,000,000 common shares. A copy of the Amended Plan is available for free at http://is.gd/H98inf The Company registed with the U.S. Securities and Exchange Commission 25 million shares of common stock issuable under the 2012 Equity Compensation Plan (as amended) for a proposed maximum aggregate offering price of $662,500. A copy of the Form S-8 is available for free at http://is.gd/ZTXzX1 About IceWEB Sterling, Va.-based IceWEB, Inc., manufactures and markets purpose-built appliances, network and cloud-attached storage solutions and delivers on-line cloud computing application services. The Company's customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). D'Arelli Pruzansky, P.A., in Boca Raton, Florida, expressed substantial doubt about IceWEB's ability to continue as a going concern. The independent auditors noted that the Company had net losses of $6,485,048 for the year ended Sept. 30, 2012. The Company reported a net loss of $6.5 million on $2.6 million of sales in fiscal 2012, compared with a net loss of $4.7 million on $2.7 million of sales in fiscal 2011. The Company's balance sheet at June 30, 2013, showed $1 million in total assets, $2.74 million in total liabilities and a $1.73 million total stockholders' deficit. J.C. PENNEY: Share Offering Prices at a Discount ------------------------------------------------ Nathalie Tadena, writing for The Wall Street Journal, reported that J.C. Penney Co.'s offering of 84 million shares, which would raise about $810.6 million, priced at a 7.4% discount to the retailer's closing price on Sept. 26. The shares fell 5.5% to $9.89 in premarket trading on Sept. 27, still higher than the offering price of $9.65, according to the WSJ report. Penney unveiled plans on Sept. 26 to raise as much as $1 billion, intending to use the funds for general corporate purposes, the report related. The department-store chain is seeing some improvement in sales but is still facing concerns from creditors, who worry that the retailer's road ahead is uncertain, the report said. The company is working to overcome a year and a half under former Chief Executive Ron Johnson, who cut back discounts and did away with some popular house brands without first testing the moves, which drove away shoppers and sent the company into the red, the report further related. Myron "Mike" Ullman, who returned to the helm of Penney in the spring, has brought back formerly banished coupons and promotions, and is stocking more of the house brands that the retailer was known for, including the apparel labels Worthington and St. John's Bay, the report added. He also is trying to rework the chain's home departments after a revamp planned by Mr. Johnson failed to catch on. About J.C. Penney Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. * * * The Company carries Moody's Investors Service's B3 Corporate Family Rating with negative outlook. Early in March 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Penney to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue- level rating on the company's unsecured debt to 'CCC+' from 'B-' and maintained its '3' recovery rating on this debt, indicating S&P's expectation of meaningful (50% to 70%) recovery for debtholders in the event of a payment default. "The downgrade reflects the performance erosion that has accelerated throughout the previous year and seems likely to persist over the next 12 months," explained Standard & Poor's credit analyst David Kuntz. At the same time, Fitch Ratings downgraded the Company's Issuer Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative. The rating downgrades reflect Fitch's concerns that there is a lack of visibility in terms of the Company's ability to stabilize its business in 2013 and beyond after a precipitous decline in revenues leading to negative EBITDA of $270 million in 2012. Penney, Fitch said, will need to tap into additional funding to cover a projected FCF shortfall of $1.3 billion to $1.5 billion in 2013, which could begin to strain its existing sources of liquidity. J.C. PENNEY: Moody's Says Shares Offer No Impact on 'Caa1' CFR -------------------------------------------------------------- Moody's Investors Service stated that J.C. Penney Company, Inc.'s recent sale of up to 84 million shares at $9.65 per share in a secondary offering has no current impact on JCP's Caa1 Corporate Family Rating, Speculative Grade Liquidity rating of SGL-3, and negative outlook. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada, and EMEA published in June 2009. J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. It also operates a website, www.jcp.com. Revenues are over $12 billion. JERRY'S NUGGET: US Bank Says Court Should Deny Confirmation ----------------------------------------------------------- U.S. Bank National Association objects to the confirmation of Jerry's Nugget, Inc.'s and Spartan Gaming LLC's Second Amended Joint Plan of Reorganization, filed Aug. 20, 2013. U.S. Bank, which holds valid perfected liens against substantially all of JNI's real and personal property, says the Plan: (a) improperly proposes to pay holders of lower ranking Allowed Claims from the proceeds of U.S. Bank's collateral before U.S. Bank is paid in full; (b) improperly deprives U.S. Bank of a vote on the Plan by deeming the USB Claim unimpaired although under the Plan there is a real risk that U.S. Bank will not be paid in full; and (c) inadequately protects U.S. Bank's interests in the "Disputed Portion of the USB Claim." U.S. Bank relates that on Aug. 1, 2013, the Debtors objected to the USB Claim. The Debtors sought to reduce the USB Claim by eliminating pre- and post-petition default interest and by reducing the allowed amount of the fees incurred by U.S. Bank's professionals in an undetermined amount. Under the Plan, U.S. Bank's secured claim is thus bifurcated into an "Undisputed Portion of the USB Claim" -- consisting of the principal loan amount plus unpaid pre- and post-petition interest at the non-default rate, and a "Disputed Portion of the USB Claim" -- consisting of all default rate pre- and post-petition interest and all fees and expenses incurred by U.S. Bank, which are owed under the USB Loan Documents. U.S. Bank explains that despite designating its claim as unimpaired, the Plan proposes to pay only the Undisputed Portion of the USB Claim on the Effective Date (presumably simultaneously with the closing of the refinance to be secured by the USB Collateral as proposed under the Plan), while establishing a capped Reserve Account from the refinance proceeds to eventually pay the difference between the Allowed USB Claim and the Undisputed Portion of the USB Claim. U.S. Bank's Objection to the Plan is primarily focused on three issues: (1) the Debtors cannot pay any other holders of Allowed Claims from the proceeds of the refinance to which the USB Liens attach unless and until the USB Claim is paid in its full allowed amount; (2) the Plan improperly deprives U.S. Bank of a vote on the Plan by deeming the USB Claim unimpaired although under the Plan there is a real risk that U.S. Bank will not be paid in full; and (3) the Debtors' proposed funding of the Reserve Account with only a portion of the refinance proceeds is insufficient. Accordingly, U.S. Bank says the Court should deny confirmation. U.S. Bank also objects to the Debtors' Witness and Exhibit List for the confirmation hearing on the Debtors' Second Amended Joint Plan of Reorganization filed Sept. 13, 2013. A copy of U.S. Bank's objection is available at http://bankrupt.com/misc/jerry'snugget.doc505.pdf About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Jerry's Nugget, owned by the Stamis family, has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon, Esq., at Gordon Silver represent the Debtors. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, Jerry's Nugget disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. The Debtors' Plan generally provides for the repayment of claims against the Debtors as: (i) Allowed Secured Claims will be paid in full with interest; (ii) Allowed Priority Claims will be paid in full with interests; (iii) Allowed Administrative Convenience Claims will be paid in full; and (iv) Allowed General Unsecured Claims will be paid their pro rata portion of $2,500,000, which will be funded by Debtors' ongoing operations and the $400,000 or greater contribution from the Stamis Trusts. Existing Equity Securities in JNI and Spartan Gaming will be canceled and 100 percent of the Reorganized Debtors' stock and membership issued to the Stamis Trusts. The Bankruptcy Court approved on June 28, 2013, the amended disclosure statement describing the Debtors' Joint Plan. The law firm of Dorsey & Whitney represents US Bank; Morris Law Group and H3 Law represent CRE; The Schwartz Law Firm represent The George Stamis Family Trust, George Stamis and Effie Stamis. JERRY'S NUGGET: 3rd Amended Plan Offers to Pay USB From Exit Loan ----------------------------------------------------------------- Jerry's Nugget, Inc., and Spartan Gaming LLC filed with the U.S. Bankruptcy Court for the District of Nevada on Sept. 23, 2013, a Third Amended Plan Joint Plan of Reorganization. On the Substantial Consummation Date, Reorganized JNI will issue 100% of its shares to the Stamis Trusts, such that each of the Stamis Trusts will equally own 50% of the total shares of Reorganized JNI. On the Effective Date, Reorganized Spartan Gaming will issue 100% of its membership interests to the Stamis Trusts, such that each of the Stamis Trusts will equally own 50% of Reorganized Spartan Gaming. The proceeds after paying the costs relating to the closing of the Exit Loan will be utilized as follows: (i) to pay the Allowed Administrative Claims; (ii) to pay the Allowed USB Claim, however, to the extent the USB Claim is not an Allowed Claim on the Effective Date, the differential between the asserted USB Claim and the Undisputed Portion of the USB Claim will be deposited in the Reserve Account until the asserted USB Claim becomes an Allowed Claim by Final Order of the Bankruptcy Court, and then, the funds held in the Reserve Account will be Distributed in accordance with Section 4.1.2(b) of the Plan; (iii) to pay the 10% distribution to Holders of Allowed Class 8 Claims that elect Option A in accordance with Section 4.8.1 of the Plan (expressly including the Allowed CRE Class 8 Claim); and (iv) to the extent that there are additional proceeds of the Exit Loan after tendering the foregoing Distributions, such remaining proceeds will be used to satisfy Reorganized Debtors' obligations under this Plan, including without limitation, to make the Distributions provided in Sections 4.2, 4.4, 4.5, 4.6, 4.7, 4.8.2(b), and 4.9 of the Plan. USB Claim Under the Plan terms, on the Effective Date, Reorganized JNI will pay to USB, in Cash, the Undisputed Portion of the USB Claim free and clear of the Liens in favor of USB, including the USB Deed of Trust and any cash collateral held by USB. The difference between the Allowed USB Claim and the Undisputed Portion of the USB Claim paid in accordance with the previous paragraph will be paid by Reorganized JNI, in Cash from the Reserve Account, on later of: (a) the Effective Date; and (b) entry of a Final Order of the Bankruptcy Court determining the total Allowed USB Claim, including any amounts due to USB pursuant to Sections 1124(2)(c), 1124(2)(d), and/or 506(b) of the Bankruptcy Code. The USB Claim in Class 1 is Unimpaired under the Plan and, therefore, the Holder of the Class 1 Claim is not entitled to vote. General Unsecured Claims Except to the extent that a Holder of an Allowed General Unsecured Claim in Class 8 agrees to less favorable treatment, each Creditor with an Allowed Claim in Class 8 will be paid Distributions, at its election, in accordance with either Option A or Option B. Option A Under Option A, each holder of an Allowed General Unsecured Claim that elects Option A will receive a Cash payment equal to 10% of his/her/its Allowed General Unsecured Claim in full and final satisfaction of such Allowed General Unsecured Claim. Option B Under Option B, any Holder of an Allowed General Unsecured Claim that elects Option B will be paid its Pro Rata share of $4,000, on the first Business Day of February, March, April, May, June and July of each year after the Effective Date, which payments will continue until the earlier of the date that: (i) all Allowed General Unsecured Claims have been repaid in full; or (ii) Jan. 1, 2022. Beginning on Feb. 1, 2022, and on the first (1st) Business Day of each February, March, April, May, June, and July of each year thereafter, each Holder of an Allowed General Unsecured Claim will be paid its Pro Rata share of $5,000, which payments will continue until the earlier of the date that: (i) all Allowed General Unsecured Claims have been repaid in full; and (ii) the total aggregate payments to Class 8 Claimants on account of their Allowed Class 8 Claims equals $520,000. On each of the distribution dates set forth above, all Creditors with Allowed General Unsecured Claims that were not, on the immediately preceding distribution date, Allowed Claims, will receive a istribution of sufficient Cash to bring them into a Pro Rata position vis-a-vis all other Creditors with Allowed General Unsecured Claims. Equity Securities in JNI and Spartan Gaming On the Substantial Consummation Date, all Class 11 Equity Securities in JNI and all Class 12 Equity Securities in Spartan Gaming will be cancelled. A copy of the Third Amended Plan is available at: http://bankrupt.com/misc/jerry'snugget.doc524.pdf About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Jerry's Nugget, owned by the Stamis family, has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon, Esq., at Gordon Silver represent the Debtors. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, Jerry's Nugget disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. The law firm of Dorsey & Whitney represents US Bank; Morris Law Group and H3 Law represent CRE; The Schwartz Law Firm represent The George Stamis Family Trust, George Stamis and Effie Stamis. JERRY'S NUGGET: Court Continues Hearing on Trustee Bid to Nov. 6 ---------------------------------------------------------------- On Sept. 23, 2013, the U.S. Bankruptcy Court for the District of Nevada approved the stipulation by U.S. Bank, and Debtors Jerry's Nugget, Inc., and Spartan Gaming LLC continuing the hearing regarding USB's motion for the entry of an order appointing a Trustee, or in the alternative, appointing an examiner, in the Debtors' cases to Nov. 6, 2013, at 9:30 a.m. About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Jerry's Nugget, owned by the Stamis family, has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon, Esq., at Gordon Silver represent the Debtors. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, Jerry's Nugget disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. The law firm of Dorsey & Whitney represents US Bank; Morris Law Group and H3 Law represent CRE; The Schwartz Law Firm represent The George Stamis Family Trust, George Stamis and Effie Stamis. JOSEPH DELGRECO: DLA Piper Skirts $17MM Suit in 2nd Circuit ----------------------------------------------------------- Law360 reported that the Second Circuit on Sept. 25 threw out a $17 million malpractice suit over DLA Piper's handling of a licensing and loan deal for a now-bankrupt furniture company, affirming a lower court decision. According to the report, a three-judge panel from the appeals court said DLA Piper did not commit malpractice by failing to ensure that furniture company Joseph DelGreco & Co. made a $767 interest payment to a Taiwanese supplier. DelGreco filed for bankruptcy after the loan agreement and a linked deal to license furniture designs broke down, the report related. Based in New York, Joseph DelGreco & Company Inc. filed for Chapter 11 Protection (Bankr. Case No. 09-16041) on Oct. 8, 2009. Joel Martin Shafferman, Esq., at Shafferman & Feldman, LLP, represents the company. The Debtor estimated assets of less than $50,000 and debts of between $1 million and $10 million. JOURNAL REGISTER: Wants Exclusivity Period Extended to Dec. 30 -------------------------------------------------------------- Pulp Finish 1 Company, fka Journal Register Company, et al., filed a fourth motion seeking extension of their plan filing exclusive period. The Debtors want their exclusive plan filing period extended through Dec. 30, 2013, and their exclusive period for acceptance of plan solicitation be extended through Feb. 28, 2014. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- was the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. JRC was managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal was subject to higher and better offers. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. The Official Committee of Unsecured Creditors appointed in the case has retained Lowenstein Sandler PC as counsel and FTI Consulting, Inc. as financial advisor. The Journal Register bankruptcy has been renamed Pulp Finish I Co., after the estate sold the newspaper business to lender and owner Alden Global Capital Ltd., mostly in exchange for $114.15 million in secured debt and $6 million cash. After debts with higher priority are paid, what's left from the cash and a $630,000 tax refund represents most of unsecured creditors' recovery. There were no bids to compete with Alden's offer. Alden paid off financing for the bankruptcy and assumed up to $22.8 million in liabilities, thus taking care of most trade suppliers who otherwise would have ended up as unsecured creditors. In addition, the lenders waived their deficiency claims, so recoveries by unsecured creditors won't be diluted. On July 2, 2013, the Debtors filed a Joint Plan of Liquidation. The Court approved adequacy of the Disclosure Statement on Aug. 29. Voting deadline on the Plan is Oct. 1 at :00 p.m. ET. The hearing to consider confirmation of the Plan is currently scheduled for Oct. 8. K-V PHARMACEUTICAL: Silver Point Had 11% Equity Stake at Sept. 16 ----------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Silver Point Capital, L.P., Edward A. Mule, and Robert J. O'Shea disclosed that as of Sept. 16, 2013, they beneficially owned 1,715,721 shares of common stock of K-V Pharmaceutical Company representing 11 percent based on 15,625,000 shares outstanding, as disclosed in the Company's Form 8-K filed on Sept. 5, 2013. A copy of the regulatory filing is available for free at http://is.gd/tnUOQ9 About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five members to serve in the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, represent the Creditors Committee. Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group. K-V Pharmaceutical's plan of reorganization became effective on Sept. 16, 2013. KELOWNA PACIFIC: CN to Start Service on 75% of Rail Network ----------------------------------------------------------- Canadian National Railway Company on Sept. 26 announced plans to start freight service on approximately 75% of the rail network operated by bankrupt short-line Kelowna Pacific Railway Ltd. in southern British Columbia after reaching trustee, customer and labor agreements that support resumption of operations. KPR, which leased its network from CN in 1999, entered receivership on July 5, 2013, and halted operations. CN last week reached mutually satisfactory agreements with the line's trustee to take it out of the bankruptcy process, Tolko Industries Ltd., the main customer on the line, and the Teamsters Canada Rail Conference and TCRC-Maintenance of Way Employees Division. The TCRC and TCRC-MWED represent approximately 35 locomotive engineers, conductors and track maintenance workers employed by the insolvent B.C. short-line railway. Jim Vena, CN executive vice-president and chief operating officer, said: "I'm pleased to say that the parties were able to come together to assemble the right business and labor conditions to justify the resumption of rail traffic on the major portion of the KPR as well as a sizeable capital investment required to protect rail service in the region. We are targeting the resumption of operations as soon as we can ensure the track is brought back to a standard to ensure safe train operations." CN will resume operations on 97 miles, or approximately 75%, of the network KPR operated running from Campbell Creek, B.C., located approximately 10 miles east of Kamloops, to Vernon, Lumby Junction and Lumby, B.C. CN will discontinue track KPR operated between Lumby Junction and Kelowna, B.C., because of insufficient freight traffic. The 60- day discontinuance process under the Canada Transportation Act was set to start last week. About Canadian National Railway Company CN is a true backbone of the economy, transporting approximately C$250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid- America. CN - Canadian National Railway Company, along with its operating railway subsidiaries -- serves the cities and ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth, Minn./Superior, Wis., and Jackson, Miss., with connections to all points in North America. About Kelowna Pacific Railway Kelowna Pacific Railway was a short-line railroad, formerly a Canadian National Railway line, leased by Knighthawk Rail. KEY ENERGY: S&P Revises Outlook to Stable & Affirms 'BB-' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Houston-based Key Energy Services Inc. to stable from positive. At the same time, S&P affirmed its ratings on the company, including the 'BB-' corporate credit rating. The revised outlook reflects S&P's view that an upgrade over the next 12 months is less likely than previously expected, primarily reflecting Key's ongoing exposure to the highly volatile and difficult onshore North American market. Much of the exploration and production (E&P) industry, Key's customer base, remains zautious about capital spending levels over the next several quarters because of protracted oversupply conditions, particularly in North American markets. Although S&P believes market conditions in the oilfield services industry will remain sluggish through the remainder of 2013, S&P believes industry conditions will gradually improve in 2014 as market demand remains solid and as oversupply is worked down next year, which should result in the company maintaining solid credit measures during this time period. "The stable outlook reflects our expectation for demand and pricing for Key's businesses to gradually improve over the next 12 months and for credit protection measures to remain consistent with our expectations at the current rating level, including leverage close to the 3x area through the end of 2013," said Standard & Poor's credit analyst Mark Salierno. S&P would consider an upgrade if Key can continue to diversify internationally and achieve scale and if market conditions substantially improve in the difficult onshore North American markets, such that Key could maintain leverage generally less than 3x and comfortably less than 3.75x during periods of weaker market conditions. Alternatively, S&P could consider a lower rating if market conditions significantly decline such that Key's ability to maintain solid financial measures is tested by either softening market conditions or a more aggressive financial policy. This includes capital spending meaningfully in excess of operating cash flow, causing debt leverage to exceed 4x without a near-term debt reduction plan. At current debt levels, S&P estimates that it would take a greater than 25% fall from current EBITDA to approach our downgrade trigger of 4x debt leverage. One scenario under which this could occur would be for gross margins to fall more than 400 basis points from current levels as sales remain relatively flat over the next one to two years. KEYWELL LLC: Scrap Titanium Supplier Files for Quick Sale --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Keywell LLC, a supplier of scrap titanium and stainless steel, filed a petition for Chapter 11 reorganization (Bankr. N.D. Ill. Case No. 13-37603) on Sept. 24 in Chicago to sell most of the business to Cronimet Holdings Inc., unless a better offer turns up at auction. According to the report, Keywell has 9 processing and recycling facilities that typically generated $330 million in annual revenue from selling 140,000 tons of scrap a year. For the first eight months of 2013, sales of 73,000 tons of scrap generated revenue of $142 million. Financial problems resulted from "historic lows in demand, volume and price," the Chicago-based company said in a court filing. The report notes that Keywell this year was forced to pay off $30.3 million owing on a revolving credit with Bank of America NA, as the result of default for failure to produce audited financial statements for 2012. The company now owes about $10.5 million on credits that took on first-lien status when the revolving credit was repaid. In addition to liabilities secured by equipment and machinery, Keywell owes $28 million to trade suppliers. The report discloses that assets include $5.5 million cash, $5.3 million in accounts receivable and $16 million in book value of property, plant and equipment. Court papers filed so far don't show how much Cronimet is offering to pay. KSL MEDIA: Sec. 341(a) Meeting Scheduled for Oct. 8 --------------------------------------------------- Peter Anderson, U.S. Trustee for Region 16, will hold a meeting of creditors of KSL Media, Inc., and its debtor affiliates pursuant to Section 341(a) of the Bankruptcy Code on Oct. 8, 2013, at 1:00 p.m., at Room 105, at 21051 Warner Center Lane, in Woodland Hills, California. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. The meeting may be continued and concluded at a later date specified in a notice filed with the U.S. Bankruptcy Court Central District of California (San Fernando Valley). About KSL Media One of the largest independent media-buying firms in the United States, KSL Media Inc., and two affiliates filed for Chapter 11 protection on Sept. 11, 2013, in Central California, driven to bankruptcy after losing a major account and claiming it was the victim of an alleged multimillion-dollar embezzlement scheme it blamed on its former controller. According to the bankruptcy declaration from current controller Janet Miller-Allen, the company's former controller Geoffrey Charness is the subject of an FBI investigation connected to an alleged scheme to dump $140 million from the company's accounts. The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before Judge Alan M. Ahart. The Debtors are represented by Rodger M. Landau, Esq., and Monica Rieder, Esq., at LANDAU GOTTFRIED & BERGER, LLP, in Los Angeles, California. The Debtors' accountant is GROBSTEIN TEEPLE FINANCIAL ADVISORY SERVICES LLP. The Debtors listed estimated assets of $10,000,001 to $50,000,000 and estimated debts of $50,000,001 to $100,000,000. KSL MEDIA: Employs Landau Gottfried as Bankruptcy Counsel --------------------------------------------------------- KSL Media, Inc., et al., seek authority from U.S. Bankruptcy Court Central District of California, San Fernando Valley Division, to employ Landau Gottfried & Berger LLP, as general bankruptcy counsel, effective as of Sept. 11, 2013. The attorneys who will be primarily responsible for the representation are Rodger M. Landau, Esq., to be paid $565 per hour; Jon L.R. Dalberg, Esq., to be paid $530 per hour; Monica Rieder, Esq., to be paid $440 per hour; and Robert G. Wilson, Esq., at $530 per hour. Where appropriate, LGB will utilize the services of LGB lawyers, whose hourly rates range from $330 to $565. Law clerk and paralegal time is billed at $160 to $225 per hour. Mr. Landau, the managing partner of Landau Gottfried & Berger, LLP, in Los Angeles, California, assures the Court that it 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. Prior to the Petition Date, the firm received multiple retainer deposits from the Debtors totaling $875,000. As of the Petition Date, the amount of the retainer remaining in LGB's client trust account was $367,079. About KSL Media One of the largest independent media-buying firms in the United States, KSL Media Inc., and two affiliates filed for Chapter 11 protection on Sept. 11, 2013, in Central California, driven to bankruptcy after losing a major account and claiming it was the victim of an alleged multimillion-dollar embezzlement scheme it blamed on its former controller. According to the bankruptcy declaration from current controller Janet Miller-Allen, the company's former controller Geoffrey Charness is the subject of an FBI investigation connected to an alleged scheme to dump $140 million from the company's accounts. The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before Judge Alan M. Ahart. The Debtors are represented by Rodger M. Landau, Esq., and Monica Rieder, Esq., at LANDAU GOTTFRIED & BERGER, LLP, in Los Angeles, California. The Debtors' accountant is GROBSTEIN TEEPLE FINANCIAL ADVISORY SERVICES LLP. The Debtors listed estimated assets of $10,000,001 to $50,000,000 and estimated debts of $50,000,001 to $100,000,000. KSL MEDIA: Files Schedules of Assets and Liabilities ---------------------------------------------------- KSL Media, Inc., delivered to the U.S. Bankruptcy Court Central District of California its schedules of assets and liabilities disclosing the following: Assets Liabilities ----------- ----------- A. Real Property $0 B. Personal Property 34,652,932 C. Property Claimed as Exempt N/A D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims 70,486 F. Creditors Holding Unsecured Nonpriority Claims 64,875,738 ----------- ----------- Total $34,652,932 $64,946,225 Full-text copies of the Schedules are available for free at: http://bankrupt.com/misc/KSLMEDIAsal0925.pdf About KSL Media One of the largest independent media-buying firms in the United States, KSL Media Inc., and two affiliates filed for Chapter 11 protection on Sept. 11, 2013, in Central California, driven to bankruptcy after losing a major account and claiming it was the victim of an alleged multimillion-dollar embezzlement scheme it blamed on its former controller. According to the bankruptcy declaration from current controller Janet Miller-Allen, the company's former controller Geoffrey Charness is the subject of an FBI investigation connected to an alleged scheme to dump $140 million from the company's accounts. The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before Judge Alan M. Ahart. The Debtors are represented by Rodger M. Landau, Esq., and Monica Rieder, Esq., at LANDAU GOTTFRIED & BERGER, LLP, in Los Angeles, California. The Debtors' accountant is GROBSTEIN TEEPLE FINANCIAL ADVISORY SERVICES LLP. The Debtors listed estimated assets of $10,000,001 to $50,000,000 and estimated debts of $50,000,001 to $100,000,000. KSL MEDIA: Files Amended List of Largest Unsecured Creditors ------------------------------------------------------------ KSL Media, Inc., and its debtor affiliates amended the list of creditors holding the 20 largest unsecured claims according to the Debtors' current books and records. A full-text copy of the Amended List, dated Sept. 25, 2013, is available for free at: http://bankrupt.com/misc/KSLMEDIAlist0925.pdf About KSL Media One of the largest independent media-buying firms in the United States, KSL Media Inc., and two affiliates filed for Chapter 11 protection on Sept. 11, 2013, in Central California, driven to bankruptcy after losing a major account and claiming it was the victim of an alleged multimillion-dollar embezzlement scheme it blamed on its former controller. According to the bankruptcy declaration from current controller Janet Miller-Allen, the company's former controller Geoffrey Charness is the subject of an FBI investigation connected to an alleged scheme to dump $140 million from the company's accounts. The lead case is Case No. 13-15929 (Bankr. C.D. Calif.) before Judge Alan M. Ahart. The Debtors are represented by Rodger M. Landau, Esq., and Monica Rieder, Esq., at LANDAU GOTTFRIED & BERGER, LLP, in Los Angeles, California. The Debtors' accountant is GROBSTEIN TEEPLE FINANCIAL ADVISORY SERVICES LLP. The Debtors listed estimated assets of $10,000,001 to $50,000,000 and estimated debts of $50,000,001 to $100,000,000. LAGUNA BRISAS: Hearing on CW Capital Claim Continued Until Nov. 8 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California continued until Nov. 8, 2013, at 10 a.m., the hearing to consider disallowing portions of claim of CW Capital Asset Management against Laguna Brisas, LLC. In a separate docket entry, at the hearing, the Court will also consider the motion to use cash collateral to pay allowed fees of special counsel. About Laguna Beach Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LAGUNA BRISAS: Plan Outline Hearing Continued Until Nov. 8 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California continued until Nov. 8, 2013, at 10 a.m., the hearing to consider the adequacy of information in the Third Amended Disclosure Statement describing Laguna Brisas LLC's Third Amended Chapter 11 Plan. As reported in the Troubled Company Reporter on July 17, 2013, the Debtor filed on July 12, 2013, a Third Amended (Blacklined) Disclosure Statement describing the Debtor's Third Amended Chapter 11 Plan. The Debtor will fund the Plan from the income it receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver upon turnover of the Debtor's to the Debtor by the Receiver by the Effective Date. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Under the Third Amended Plan, unless the Court rules otherwise to the Debtor's objection to allowance of Wells Fargo Bank's Class 1 claim, the Debtor will reinstate the loan by curing any arrears after applying all post-petition payments received by this claimholder with equal monthly payments starting on the Effective Date and continuing through May 1, 2016, plus make all remaining payments pursuant to the loan documents including the final payoff on May 1, 2016, plus make all remaining payments pursuant to the loan documents including the final payoff on May 1, 2016. Unsecured Claims in Class 5A, with a total claims amount of $260,000, will be paid in full over 34 months from the Effective Date without interest unless this Class does not vote in favor of the confirmation of the Plan, in which case it will receive interest but be paid over the earlier of 120 months after the Effective Date or the months required to satisfy all these claims in full. Unsecured Claims, convenience class, with a total claim amount of $21,000 will be paid in full on the Effective Date. The Debtor's owners will retain their ownership interest in the Debtor. A copy of the Third Amended (Blacklined) Disclosure Statement is available at http://bankrupt.com/misc/lagunabrisas.doc404.pdf About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LAGUNA BRISAS: Receiver May Use Cash Collateral Until Oct. 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation authorizing Byron Chapman, the receiver for Laguna Brisas, LLC, to use of cash collateral for limited purpose until Oct. 31, 2013. As reported in the Troubled Company Reporter on Sept. 12, 2013, the receiver may use up to $50,000 in cash collateral for purchasing and installing new, flat-screed televisions as required by Best Western International, Inc., which the Debtor is a member. On Aug. 29, the Debtor provided the receiver with an opportunity to purchase televisions that the Debtor assets would comply with the BW rules as a cost savings of approximately $10,000, and would remain compliant with the BW rules for seven years. Wells Fargo Bank, N.A., Mehrdad Elie, Kay Nam Kim and the receiver consent to use of cash collateral to purchase and install new, commercial grade televisions. Pursuant to the stipulation, all of the terms and conditions set forth in the second interim stipulation and the cash collateral budget attached to the eighth interim stipulation will continue to remain in full force and effect. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LAGUNA BRISAS: Taps CBRE Inc. as Real Estate Professionals ---------------------------------------------------------- Laguna Brisas, LLC, in an amended application, asks the U.S. Bankruptcy Court for the Central District of California approve employment of real estate professionals, Rod Apodaca and Bob Kaplan of CBRE, Inc., regarding the sale of real property of the estate -- 1600 South Coast Highway, Laguna Beach, California. CBRE seeks compensation in the form of a real estate commission, under the terms of a purchase agreement regarding the property, an agreement that provides for a commission of 2% of the purchase price to be paid to the professional upon close of excrow for the transaction. The Debtor reserves the right to refinance or restructure the debt secured by the hotel, in which case CBRE requires a break up fee of $50,000. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LANDAUER HEALTHCARE: Unsecureds Settle with Company, Quadrant ------------------------------------------------------------- Marie Beaudette, writing for DBR Small Cap, reported that unsecured creditors of home medical supply company Landauer Metropolitan Inc. are backing the company's bankruptcy sale to Quadrant Management Inc. after they reached a deal with the company and its proposed buyer that would pay the unsecured creditors $2.5 million. About Landauer Healthcare Holdings Home medical equipment provider Landauer Healthcare Holdings, Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12098) on Aug. 16, 2013, with a deal to sell all assets to Quadrant Management Inc. for $22 million, absent higher and better offers. The Company has 32 operating locations, with 50% of inventory concentrated in Mount Vernon, New York; Great Neck, New York; Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer, which derives revenues by reimbursement from insurers, Medicare and Medicaid, reported net revenues of $128.5 million in fiscal year ended March 31, 2013. Landauer estimated assets and debt of at least $50 million. Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H. Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A. Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea, Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks Advisory Group serves as the Debtor's financial advisors, and Epiq Systems as claims and notice agent. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases. The Committee retained Landis Rath & Cobb LLP as counsel. LAUSELL INC: Addresses Reyes Family's Plan Confirmation Concerns ---------------------------------------------------------------- Lausell Inc., replied to the objection filed by Carmen Ana Reyes, Ligia Catalina Reyes and Ernesto Reyes (the Reyes Family) to the confirmation of the Debtor's Plan. The Reyes Family, in their objection, stated that, among other things: a) the Debtor impermissibly allows some equally placed equity holders to receive or retain some value in the going concern of the business without allowing equity holders the right to vote to accept or reject the Plan; b) the Debtor's Plan attempts to impermissibly gerrymander a consensual plan as to avoid an absolute Priority Rule analysis; c) the Plan seeks to sell substantially all of the Debtor's assets to insiders without any marketing; and d) the Plan continues to seek the release or discharge of third parties. The Debtor, through Charles A. Cuprill-Hernandez, Esq. at Charles A. Cuprill, P.S.C., in its reply, explained that, among other things: 1. the Plan does not discriminate against equally situated equity holders; 2. the Debtor has not engaged in gerrymandering, the Debtor simply negotiated with the banks only in order that they can vote their unsecured claim without any dividend so as to maximize the payoff to the remaining unsecured creditors; 3. there is no prohibition against a private sale or against a sale to insiders; and 4. As set forth in the Debtor's supplement to First Amended Plan, the release by holders of claims and equity interests originally contained in Article IX, Section 9.6(b) of the Plan was modified to limit its scope to the permissible releases of the Bankruptcy Code within the scope of Section 1141 of the Bankruptcy Code, excluding therefrom what could be considered third party releases. About Lausell Inc. Lausell, Inc., filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case No. 12-02918) on April 17, 2012, in Old San Juan, Puerto Rico. Lausell, also known as Aluminio Del Caribe, is a manufacturer of windows and doors. Bankruptcy Judge Mildred Caban Flores oversees the case. Charles Alfred Cuprill, Esq., at Charles A. Curpill, P.S.C. Law Offices, in San Juan, Puerto Rico, serves as counsel to the Debtor. The Bayamon, Puerto Rico-based company disclosed $34,059,950 in assets and liabilities of $24,489,414 in its amended schedules. On Aug. 23, the Court approved the Disclosure Statement, allowing the Debtor to begin solicitation of Plan votes. Lausell Inc.'s Disclosure Statement dated June 3, 2013, reveals that holders of allowed general unsecured claims (Class 6) in Lausell Inc. are impaired and will recover 2% of their claim amount. Payment of the Class 6 Claims will come from the $50,000 carve-out to be reserved from the proceeds of the sale of the Debtor's assets to La Re. La Re, as Purchaser, will provide a Cash payment to fund the Plan sufficient to (i) settle in full the secured claims of First Bank Puerto Rico and Citibank, N.A., for $5,600,000, in Cash; (ii) and will assume certain of Debtor's debts for $3,080,489, including the claim of Puerto Rico Industrial Development Co. (Class 2). LAUSELL INC: Court Approves Cash Collateral Access Until Oct. 15 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico approved a stipulation authorizing Lausell Inc.'s use of cash collateral in the amount of $2,987,018 until Oct. 15, 2013, to ensure a continued and ongoing operation. The stipulation, entered among the Debtor and Firstbank Puerto Rico, as lender and administrative agent for the syndicated loan issued to the Debtor in conjunction with Citibank N.A., provides that the banks consent to the limited use of cash collateral. Firstbank Puerto Rico and Citibank, N.A. are the Debtor's main secured creditors. The banks are owed approximately $12,557,592 plus accrued interest and late charges. As adequate protection from any diminution in value of the banks' collateral, the Debtor will grant the banks replacement liens in all assets and collateral acquired by the Debtor on or after the Petition Date, a superpriority administrative expense claim status. The debtor will make interest payments of $1,034 to cover interest becoming due during the term of stipulation. As additional adequate protection, upon the consummation of any sale of substantially all or any of the Debtor's assets, the proceeds of the sale will be paid immediately and indefeasibly to the Bank for their benefit at the closing of the sale in that amount up to the outstanding balance of the loans, plus any interest or charges that may have accrued. According to the parties, no carve outs for the U.S. Trustee fees or professional fees are contemplated. About Lausell Inc. Lausell, Inc., filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case No. 12-02918) on April 17, 2012, in Old San Juan, Puerto Rico. Lausell, also known as Aluminio Del Caribe, is a manufacturer of windows and doors. Bankruptcy Judge Mildred Caban Flores oversees the case. Charles Alfred Cuprill, Esq., at Charles A. Curpill, P.S.C. Law Offices, in San Juan, Puerto Rico, serves as counsel to the Debtor. The Bayamon, Puerto Rico-based company disclosed $34,059,950 in assets and liabilities of $24,489,414 in its amended schedules. On Aug. 23, the Court approved the Disclosure Statement, allowing the Debtor to begin solicitation of Plan votes. Lausell Inc.'s Disclosure Statement dated June 3, 2013, reveals that holders of allowed general unsecured claims (Class 6) in Lausell Inc. are impaired and will recover 2% of their claim amount. Payment of the Class 6 Claims will come from the $50,000 carve-out to be reserved from the proceeds of the sale of the Debtor's assets to La Re. La Re, as Purchaser, will provide a Cash payment to fund the Plan sufficient to (i) settle in full the secured claims of First Bank Puerto Rico and Citibank, N.A., for $5,600,000, in Cash; (ii) and will assume certain of Debtor's debts for $3,080,489, including the claim of Puerto Rico Industrial Development Co. (Class 2). LCI HOLDING: Court Extends Exclusive Plan Filing Pd. Thru Feb. 28 ----------------------------------------------------------------- The Honorable Kevin Gross granted the request of ICL Holding Company, Inc., f/k/a LCI Holding Company, Inc., and its debtor affiliates for an extension of their exclusive plan filing period through Feb. 28, 2014, and a corresponding extension of their exclusive right to solicit acceptance of that plan through April 29, 2014. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. The Debtors are represented by Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware; Kenneth S. Ziman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; and Felicia Gerber Perlman, Esq., and Matthew N. Kriegel, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LDK SOLAR: Has Forbearance with Noteholders Until Oct. 27 --------------------------------------------------------- LDK Solar Co., Ltd., has entered into a 30-day forbearance arrangement with holders of a majority of the aggregate principal amount of its US$-Settled 10 Percent Senior Notes due 2014. The forbearance arrangement, which expires on Oct. 27, 2013, relates to the interest payment due under the Notes on Aug. 28, 2013. That interest payment remains unpaid. LDK Solar is hopeful that the forbearance arrangement is the first step in achieving a consensual solution to its obligations under the Notes. It is LDK Solar's intention to find a consensual solution as soon as possible. As reported previously, LDK Solar has engaged Jefferies LLC as a financial advisor for strategic advice in connection with the Notes and LDK Solar's other offshore obligations. Holders of LDK Solar's offshore debt obligations may contact Augusto King at aking@Jefferies.com, or Steven Strom at sstrom@Jefferies.com, Lyndon Norley at lyndon.norley@Jefferies.com, or Richard Klein at rklein@Jefferies.com with any questions. Sidley Austin is acting as counsel to LDK Solar, led by Thomas Albrecht at talbrecht@sidley.com, and Timothy Li at htli@sidley.com. LDK Solar understands that Ropes & Gray LLP is acting as counsel to a group of noteholders, led by Daniel Anderson (daniel.anderson@ropesgray.com) and Paul Boltz (paul.boltz@ropesgray.com). About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi- Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. LDK Solar Co disclosed a net loss of $1.05 billion on $862.88 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $608.95 million on $2.15 billion of net sales for the year ended Dec. 31, 2011. The Company's balance sheet at June 30, 2013, showed US$4.37 billion in total assets, US$4.79 billion in total liabilities, US$382.84 million in redeemable non- controlling interests, and a US$794.58 million total deficit. KPMG, in Hong Kong, China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Group has a net working capital deficit and a deficit in total equity as of Dec. 31, 2012, and is restricted from incurring additional indebtedness as it has not met a financial covenant ratio as defined in the indenture governing the RMB-denominated US$-settled senior notes. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LEHMAN BROTHERS: To Distribute $11.4BB to Creditors on Oct. 3 ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lehman Brothers Holdings Inc. discloses details of the fourth distribution of $11.4 billion to be made on Oct. 3 to creditors with approved claims under the Chapter 11 plan implemented in March 2012. According to the report, for senior unsecured creditors of the Lehman holding company, the October distribution will be 5.74 percent, bringing the total recovery so far to 20.22 percent. General unsecured creditors of the holding company will have received 19.26 percent, given the 5.37 percent to be handed out in October. The report notes that for general unsecured creditors of Lehman Commercial Paper Inc., the next distribution is 9.96 percent, raising their total recovery to 49.96 percent. At Lehman Brothers Special Financing Inc., general unsecured creditors will have received 27.77 percent after the 3.19 percent October distribution. The fifth distribution will occur in early April, Lehman said. The report relates that the original distribution to general unsecured creditors of the holding company was 5.66 percent in April 2012. Later distributions are made possible by liquidation of additional assets and resolution of disputed claims allowing cash to be released from reserves. The October distribution includes $276 million in catch-up payments to creditors whose claims were resolved. The report relays that distributions aren't made to creditors with claims in dispute. Instead, money is held in reserve in the event the claim is later approved. 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. LIBERACE FOUNDATION: Hearing on Plan Outline Reset Until Oct. 30 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada rescheduled to Oct. 30, 2013, at 9:30 a.m., the hearing to consider the adequacy of information in the Disclosure Statement explaining Liberace Foundation For The Creative and Performing Arts' Liquidating Plan of Reorganization. The hearing on the Debtor's objection to Claim No. 2 filed by CWCapital Asset will also be continued to Oct. 30. In this relation, the Debtor entered into a stipulation with creditor US Bank, National Association, as trustee, successor-in- interest to Bank of America, NA, as trustee, successor-by-merger to LaSalle Bank National Association, as trustee, for the Registered Holders of Bear Stearns Commercial Mortgage Securities, Commercial Mortgage CWCapital Asset Management LLC, solely in its capacity as special servicer, rescheduling the Sept. 25 hearing for 30 days or as soon as the matter can be heard. As reported by the Troubled Company Reporter on Aug. 19, 2013, the Plan provides that on May 10, the Debtor received Court authorization to sell its property located at 1775 East Tropicana Avenue, Las Vegas, Nevada. Shortly thereafter the Debtor sold the property for the purchase price of $2,300,000. The undisputed portion of the Disputed Claim of US Bank in Class 1 was paid out of the Property sale proceeds upon closing. The disputed portion will be paid out of the remaining Property sale proceeds pursuant to the agreement of the parties or a court order determining the Allowed amount of the disputed portion. The total estimated amount of the General Unsecured Claims in Class 2 asserted against the Debtor is $38,655.25. Class 2 Claims will be paid in full in Cash, from the funds held in the Debtor's Nevada Trust account, on the Effective Date. The Liberace Revocable Trust, the Equity Interest Holder in Class 3 will be retaining its equity interests, and thus, is unimpaired by the Plan. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/liberacefoundation.doc134.pdf Nedda Ghandi, Esq., at Ghandi Law Offices, in Las Vegas, Nevada, represents the Debtor. Hamid R. Rafatjoo, Esq., at Venable LLP, in Los Angeles, California, and Jon T. Pearson, Esq., at Ballad Spahr LLP, in Las Vegas, Nevada, represent U.S. Bank. About Liberace Foundation Founded in 1976, the Liberace Foundation for the Creative and Performing Arts -- http://www.liberace.org/-- helps students in Southern Nevada pursue careers in the performing and creative arts through scholarship assistance and artistic exposure. The foundation has awarded more than 2,700 students with scholarships. It owns the Liberace Museum Collection at 1775 E. Tropicana, in Las Vegas. The Liberace Museum, which has exhibited the jewelry, pianos, garish gowns and other artifacts owned by the great pianist and showman, was opened in 1979. The property is valued at $13 million. The secured creditor, U.S. Bank N.A., is owed $1.269 million. Liberace Foundation filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-22004) in Las Vegas on Oct. 24, 2012, estimating $10 million to $50 million in both assets and liabilities. Bankruptcy Judge Mike K. Nakagawa presides over the case. The Ghandi Law Offices serves as the Debtor's counsel. Brownstein Hyatt Farber Schreck, LLP serves as special counsel. The petition was signed by Anna Nateece, business manager. No committee has been appointed or designated by the U.S. Trustee. LILY GROUP: Coal Mine Developer Files in Indiana ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lily Group Inc., the developer of an open-pit coal mine in Green County, Indiana, filed a petition for Chapter 11 reorganization (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23 in Terre Haute, listing assets and debt both exceeding $10 million. According to the report, the company has mineral rights on 2,800 acres, according to its website. Lily said it has all necessary permits. The primary lender is Platinum Partners Credit Opportunities Master Fund LP. The report notes that to finance the reorganization, Lily arranged a $2.5 million credit with Reich Brothers LLC. LONE PINE: Files Prepack in Canada, Chapter 15 in U.S. ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lone Pine Resources Inc., an independent oil and gas exploration and production company, filed a petition for bankruptcy reorganization in Alberta on Sept. 15 and simultaneously submitted a petition in Delaware for protection from creditors in the U.S. under Chapter 15. According to the report, Calgary-based Lone Pine worked out an agreement before bankruptcy with holders of 75 percent of the $195 million in senior notes. Assuming the arrangement comes to fruition, noteholders will get 100 percent ownership of the new common stock in a plan under Canada's Companies' Creditors Arrangement Act. The existing $180 million secured bank credit would be repaid in full with proceeds from a new asset-backed loan. The report notes that the reorganized company is to be additionally financed with $100 million in preferred stock to be bought by some of the noteholders. The preferred stock would be convertible into 75 percent of the common equity. Lone Pine defaulted on the senior notes by missing a payment in August. The 10.375 percent senior unsecured notes last traded on Sept. 24 for 52 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes sold for 85 cents on June 3. The report relates that although the company's operations are entirely within Canada, there are some assets in the U.S., thus necessitating a Chapter 15 filing. Unlike Chapter 11 reorganizations, Chapter 15 relief isn't automatic. Lone Pine therefore filed papers so the U.S. judge can temporarily halt creditor actions. Assuming the judge eventually rules that Canada is home to the so-called foreign main bankruptcy proceeding, creditor suits and actions will be halted permanently. The report relays that eventually, securing Chapter 15 relief means the Canadian court will review and approve a reorganization plan and distributions to creditors. Disputes must be hashed out in the court in Alberta. The U.S. court can assist the Canadian court. Lone Pine had an initial public stock offering at $13 a share in May 2011, raising $195 million. The stock lost 3.5 percent in the first day's trading, never to surpass the offering price. The case is In re Lone Pine Resources Inc., 13-bk-12487, U.S. Bankruptcy Court, District of Delaware (Wilmington). Calgary, Canada-based Lone Pine Resources Inc. is an independent oil and gas exploration, development and production company with operations in Canada. The Company's reserves, producing properties and exploration prospects are located in the provinces of Alberta, British Columbia and Quebec, and in the Northwest Territories. The Company is incorporated under the laws of the State of Delaware. LONGVIEW POWER: Working on Balance Sheet Fix as Cash Fight Looms ---------------------------------------------------------------- Peg Brickley, writing for Daily Bankruptcy Review, reported that Longview Power LLC is plowing ahead with plans to fix its plant and its balance sheet as it prepares to battle contractors over cash, Kirkland & Ellis LLP's Ray Schrock told a bankruptcy judge on Sept. 25. "The company greatly needed the breathing spell afforded by Chapter 11," Mr. Schrock said at a hearing before Judge Brendan Shannon, who is overseeing the West Virginia power plant's Chapter 11 proceeding, the report related. According to the report, the Aug. 30 bankruptcy petition froze action against Longview involving a fight over who's to blame for the plant's operational troubles. Talks with secured lenders have begun, and the company last week recovered from the latest in the series of unplanned outages that have plagued the operation, Mr. Schrock said, the report further related. Once the boiler tube leaks are repaired, "after that it's a simple -- or maybe not so simple -- matter of fixing the balance sheet," Mr. Schrock said, the report added. About Longview Power Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. The company has engaged Lazard Ltd as its investment banker and Alvarez & Marsal North America LLC as its restructuring advisor. Longview is represented by Kirkland & Ellis LLP, as primary restructuring counsel, and Dentons US LLP for all issues related to company's pending arbitration proceedings. MARKET STREET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Market Street Vagabond Inc. 740 E Wilson Ave Glendale, CA 91206 Los Angeles, CA Case No.: 13-33883 Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Mark J Leonardo Law Office of Mark J Leonardo 25019 Pacific Coast Highway Malibu, CA 90265 Tel: 310-456-7373 Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,001 to to $1 million The petition was signed by Saad Zaman, president. The Debtor did not file its list of largest unsecured creditors when it filed its petition. MAXCOM TELECOMUNICACIONES: 44.7% of A Shares Validly Tendered ------------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V., announced that the simultaneous U.S. and Mexican tender offers by Banco Invex S.A., Institucion de Banca Multiple, Invex Grupo Financiero, a banking institution organized and existing under the laws of the United Mexican States, as Trustee for the Trust 1387 on behalf of Ventura Capital Privado, S.A. de C.V., to purchase for cash all of Maxcom's outstanding Series A common stock, including those shares represented by ordinary participation certificates and American Depositary Shares, expired at 12:00 midnight, New York City time on Thursday, Sept. 26, 2013. Based on the preliminary count by the depositaries for the tender offers, Securities representing approximately 353,129,264 shares of Maxcom's Series A common stock, or approximately 44.69 percent of the total outstanding and subject to the Offers Series A Common Stock (including 20,181 ADSs) were tendered prior to the expiration. The Purchaser has informed Maxcom that all conditions to the tender offers have been satisfied and the Purchasers have accepted for payment all Securities validly tendered and not withdrawn prior to the expiration of the tender offers. 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. 13-11839) 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. MCS AMS: S&P Assigns Preliminary 'B' Corp. Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned a preliminary 'B' corporate credit rating to Plano, Texas-based MCS AMS Sub-Holdings LLC. The outlook is stable. At the same time, S&P assigned a preliminary 'B' issue rating to MCS AMS Sub-Holdings' senior secured credit facilities, which include a $20 million revolver due 2018 and a $340 million term loan due 2019. The preliminary recovery rating is '3', which indicates S&P's expectation of a meaningful recovery (50% to 70%) for creditors in the event of a payment default or bankruptcy. "The preliminary ratings on MCS AMS reflect our assessment of its narrow business focus within a niche industry and customer concentration," said Standard & Poor's credit analyst Michael Audino. "In addition, it competes in a sector with low barriers to entry, given the low level of capital expenditure requirements, and weak industry fundamentals brought about by declining foreclosure activity. The company also has a small customer base and a limited ability to meaningfully diversify, given the concentrated nature of the mortgage industry." The preliminary ratings also reflect Standard & Poor's view that the company's financial risk profile will remain "aggressive" for the next two years, based primarily on weak credit ratios and S&P's view its financial policy will be aggressive and that liquidity will remain "adequate." The stable outlook reflects S&P's view that MCS AMS should be able to maintain credit measures near current pro forma levels over the next year, despite weak conditions in the mortgage field services industry. "We believe the company's good market position, ability to win new business from new and existing customers, and cost savings opportunities will partially offset the industry conditions," said Mr. Audino. MEDICINE HAT: Enters Receivership, Owes $475K to Creditors ---------------------------------------------------------- Alex Mccuaig at Medicine Hat News reports that the Medicine Hat Coast Hotel is in receivership following the insolvency of the three numbered companies which owned the hotel. According to the report, the hotel's 2013 city tax assessment valued the business at $2.9 million. The report notes that of the six secured creditors for the hotel's assets, only Jaycap Financial's US$4.7 million is currently listed, with unknown secured amounts owing to BMW Canada, Mercedes-Benz Financial, Resmor Trust, Royal Bank, Company Capital and Canada Revenue. The report relates that the City of Medicine Hat is the largest unsecured creditor with more than US$214,000 owed in back taxes (believed to date back to 2012) and utilities. Medicine Hat News discloses that the hotel has a total of more than US$475,000 owed to unsecured creditors. MERCANTILE BANCORP: Ex-Execs Settle SEC Claims Surrounding Loss --------------------------------------------------------------- Law360 reported that bankrupt Mercantile Bancorp Inc. and two of its former executives on Sept. 24 settled charges made by the U.S. Securities and Exchange Commission that they withheld a $5 million probable loan loss and misrepresented the company's financials in 2010. According to the report, the Illinois-based bank holding company's former CEO Ted Awerkamp and Chief Financial Officer Michael McGrath allegedly failed to disclose losses that stemmed from a borrower in a shared national credit loan that was unable to contribute the necessary funding for a large residential real estate development. The case is United States Securities and Exchange Commission v. Mercantile Bancorp, Inc. et al., Case No. 3:13-cv-03341 (C.D. Ill.) before Judge Richard Mills. The case was filed on Sept. 24, 2013. 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 attorneys for the Debtor. A three-member official committee of unsecured creditors was appointed by the U.S. Trustee. An official committee of trust preferred securities holders was also appointed by the U.S. Trustee. The TruPS Committee is represented by Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadelphia, Pennsylvania; David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joseph Serino Jr., P.C., Esq., and John P. Del Monaco, Esq., at Kirkland & Ellis LLP, in New York. MOROCO VENTURES: 5th Cir. Affirms Judgment in Martin v. Grehn ------------------------------------------------------------- The U.S. Court of Appeals for the Fifth Circuit affirmed the district court's grant of summary judgment in favor of Charles Grehn, Reliant Financial Incorporated, Edward Bravenec, the law office of McKnight and Bravenec, and 1216 West Avenue Incorporated concerning property Rowland Martin lost during his bankruptcy proceedings. In December 2005, Mr. Martin filed for Chapter 13 protection, listing a property at 1216 West Avenue in San Antonio, TX, as an asset. Several months later, Mr. Martin filed for Chapter 11 bankruptcy for his wholly-owned company, Moroco Ventures, L.L.C. He listed the West Avenue property again on his schedule of assets. The property was subject to liens. One of those liens was a mortgage note that the original grantees assigned to Reliant Financial, Inc. in 2004. In May 2004, Reliant transferred this note on a servicing-retained basis to Bernhardt Properties I, Ltd. This transfer was recorded in the real property records of Bexar County, TX, that July. Meanwhile, Reliant authorized Aegis Mortgage Corporation as its subservicing agent to take all necessary actions to collect payments on the loan. The law firm of McKnight and Bravenec, attorneys to Mr. Martin, held another lien on the property for unpaid legal fees. Mr. Martin took out this second lien in May 2005. By December of that year, loan collection efforts failed and Mr. Martin and Moroco filed for bankruptcy. Aegis filed a motion to lift the automatic bankruptcy stay in May 2006. A hearing was held on Aegis's unopposed motion and the stay was lifted. Aegis and Mr. Martin entered into an agreement on July 31, 2006 for Mr. Martin to resume payments on the mortgage. Aegis filed a notice of stay termination asserting that Mr. Martin had "failed to tender the August 1, 2006 post-petition payment." The stay was lifted. At this point, the law firm of McKnight and Bravenec filed suit to stop Aegis's foreclosure. They asserted that the parties had entered into an agreement allowing them to purchase the first mortgage. They paid off the first lien, and foreclosed on the property on Oct. 3, 2006. Ten days later, Mr. Martin filed a third party petition against both the Bravenec firm and Reliant for wrongful foreclosure. On October 30, 2006, the Bexar County district court denied Mr. Martin's application for a temporary restraining order and injunction and held that the foreclosure sale was valid on October 30, 2006. The court proceedings, both state and federal, were dismissed. Mr. Martin did not appeal. Over four years later, on Oct. 4, 2010, Mr. Martin filed suit in federal district court against Reliant (and Charles Grehn, its owner) and Edward Bravenec (as well as his law office, and a company of his called 1216 West Ave, Inc.) with a laundry list of claims making the same basic point: the sale was wrong and the property should be returned to him. Specifically, Mr. Martin alleged that the defendants: 1) committed fraud, 2) breached a fiduciary duty, 3) violated the Fair Debt Collection Practices Act ("FDCPA") and "federal common law wrongful appropriation," 4) violated due process under 42 U.S.C. Sec. 1983, 5) violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C Sec. 1961 ("RICO") (originally couched as violations of the Clayton and the Sherman Acts), and 6) negligently inflicted emotional distress. They did so, Mr. Martin contended, in the following manner: 1) Reliant's agent defrauded him and the bankruptcy court by pretending to be a creditor with standing to enforce the lien note when Reliant had no such standing; 2) Mr. Martin's former lawyers tricked him into signing a second mortgage to pay off his debts to them in violation of their fiduciary duties; 3) Reliant made false representations concerning the legal status of his debt by pretending to have standing in violation of the FDCPA; 4) the defendants "avail[ed]" themselves of a "quid pro quo relationship" that lawyer McKnight had with the bankruptcy court judge to somehow hide the fact that a suit in trespass to try title had been filed by the law firm against Reliant; 5) the defendants engaged in a conspiracy to collect unlawful debts in violation of RICO; and 6) these actions left Mr. Martin "sorely grieved" at the loss of his "homestead" such that he "suffered mental anguish and emotional distress." After a series of motions, the district court granted summary judgment for the defendants and against Mr. Martin on all claims. Mr. Martin appealed. The case is, ROWLAND J. MARTIN, JR., Successor in Interest to Moroco Ventures L.L.C., Plaintiff-Appellant, v. CHARLES GREHN; RELIANT FINANCIAL INCORPORATED; EDWARD BRAVENEC, Esq.; THE LAW OFFICE OF McKNIGHT AND BRAVENEC; 1216 WEST AVENUE INCORPORATED, Defendants-Appellees, No. 13-50070 (5th Cir.). A copy of the Fifth Circuit's Sept. 25, 2013 decision is available at http://is.gd/ipQ8uKfrom Leagle.com. MSD PERFORMANCE: Committee Objects to Cash Collateral Motion ------------------------------------------------------------ The Official Committee of Unsecured Creditors of debtors MSD Performance, Inc., et al., objects to the motion of the Debtors for authorization to use cash collateral of the prepetition lenders to enable the Debtors to fund operations and to pay for expenses identified in a budget. According to the Committee, such proposed expenses in the Budget include, but are not limited to, adequate protection payments of the full debt service to the prepetition lenders and uncapped attorney's fees for the successor agent, employee payroll and other benefits, commissions, taxes, expenses related to the Debtors' business operations, and capped fees related to the Debtors' restructuring costs. The Committee explains that it is not opposed in principle to the Debtor's request for use of cash collateral. It points out, however, certain provisions of the interim order are unduly prejudicial to the interest of unsecured creditors and therefore, must be stricken or modified. Moreover, the Committee says the Prepetition Lenders have not provided a reasonable basis for the court to grant the terms and protections sought in the Motion. Specifically, among others, the Committee says: * The prepetition lenders' interest in the cash collateral is adequately protected by the Debtors granting them a replacement lien on prepetition collateral in which the Prepetition Lenders hold valid, perfected and unavoidable liens. To grant anything more will only enhance the possibly "undersecured" Prepetition Lenders' position at the expense of the estates and the unsecured creditors, placing the Prepetition Lenders in an enhanced position of control over all of the assets and the estates in the context of any subsequent sale. * The proposed Objection Deadline of 60 days from the formation of the Committee is insufficient for the Committee and its professionals to properly investigate liens, and any estate actions or claims under the Bankruptcy Code or applicable non- bankruptcy law. Moreover, the Committee says the Debtors have not yet filed their Schedules of Assets and Liabilities and Statements of Financial Affairs, nor has the Committee received a full set of all Prepetition documents, such that the Committee has no way of knowing the extent of the Debtors' assets or alleged secured liabilities. * Further improperly limiting the Committee's exercise of its fiduciary duties, the Interim Order caps the Committee's professionals' fees to investigate Prepetition Lender claims and liens at $25,000. The Committee requests that the Final Order provide for the allocation of at least $65,000 towards the investigation of the nature, extent, validity, perfection, and enforceability of the Prepetition Lenders' Prepetition Liens, as well as the Prepetition Lenders conduct. * The Interim Order limits the Committee's ability to assert any Objection by first requiring the Committee to obtain an order granting it standing to assert such an Objection within sixty (60) days of its formation. The Committee submits that section 11.1 of the Interim Order be amended in the Final Order to grant the Committee automatic standing to file a complaint challenging the Prepetition Lenders' liens and/or obligations owed thereto. * There is insufficient carve out for the fees and expenses of the professionals retained by the Committee. The Committee objects to the Final Order unless and until the effective "cap" on Committee professional fees is removed and the amount of fees budgeted for the Committee's professionals are increased to a level commensurate with the likely scope of work required in these cases. * Paragraph 11.5 of the Interim Order provides a broad release in favor of the Prepetition Lenders and the Successor Agent as well as certain unidentified third parties. The Committee says that: (i) the scope of the release encompasses unidentified third parties, (ii) such broad third party releases are appropriate in the context of a plan of reorganization; not at the outset of a case, and (iii) the scope of the release appears to give the Prepetition Lenders and the Successor Agent a release in capacities other than as "agent" and "lender." Even if a release could be granted outside of a plan, according to the Committee, there is no showing that the Prepetition Lenders and the Successor Agent have met the high standards for granting such a release under applicable Third Circuit Law. * Paragraphs 2 and 3.1 of the Interim Order reserve unto the Debtors and the Prepetition Lenders the sole authority to extend the Budget time period covering the use of Cash Collateral and allows amendments to the Budget without further Order of this Court or consent of the Committee. The Committee should be included in this process and absent agreement, the Court should rule on any further extensions of Cash Collateral. Accordingly, absent the modifications the Committee is seeking in its objection, the Court must deny the Motion on a final basis. About MSD Performance MSD Performance, Inc., headquartered in El Paso, Texas, operates in the power sports enthusiast and professional racer markets where the company maintains leading market share positions across all of its product categories under the MSD Ignition(R), Racepak(R) and Powerteq(R) brands. The company's facilities encompass over 220,000 square feet in six buildings, five of which are located across the U.S. and one in Shanghai, China. MSD Performance and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12286) on Sept. 6, 2013. Ron Turcotte signed the petitions as CEO. The Debtors estimated assets of at least $50 million and debts of at least $100 million. The Debtors' restructuring counsel is Jones Day. Their investment banker is SSG Advisors, LLC. The Debtors are also represented by Richards Layton and Finger, as local counsel. Logan & Co. is the claims and notice agent. MSD PERFORMANCE: Original Par Lenders Want Exclusivity Terminated ----------------------------------------------------------------- Madison Capital Funding LLC, Golub Capital Partners IV, L.P., Golub Capital Partners V, L.P., Golub Capital Partners VI, L.P., Golub Capital Partners 2007-2 Ltd., Golub International Loan Ltd. I, OFSI Fund III, Ltd., and CIFC Funding 2006-I, Ltd. (collectively, the "Original Par Lenders"), ask the U.S. Bankruptcy Court for the District of Delaware to terminate MSD Performance, Inc., et al.'s exclusivity period. According to the Original Par Lenders, the Debtors have refused to pursue a reorganization, and instead have designed a sale path that will fail to maximize the value of the Original Par Lenders' secured claims and will preclude confirmation of a Chapter 11 plan due to resulting administrative insolvency. If this relief is granted, the Original Par Lenders say they intend to file and pursue a plan of reorganization that will be in the best interest of the stakeholders. The Original Par Lenders hold 41% of the outstanding debt under the Senior Prepetition Facility. Holders of the majority of the debt under the Senior Prepetition Facility, affiliate entities Z Capital MSD, L.L.C., and Z Capital Special Situations Fund II, L.P. (collectively, "Z Capital") hold 59% of the outstanding debt under the Senior Prepetition Facility. Z Capital was not an original Senior Lender, but became a Senior Lender when it began purchasing outstanding debt under the Senior Prepetition Facility. About MSD Performance MSD Performance, Inc., headquartered in El Paso, Texas, operates in the power sports enthusiast and professional racer markets where the company maintains leading market share positions across all of its product categories under the MSD Ignition(R), Racepak(R) and Powerteq(R) brands. The company's facilities encompass over 220,000 square feet in six buildings, five of which are located across the U.S. and one in Shanghai, China. MSD Performance and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12286) on Sept. 6, 2013. Ron Turcotte signed the petitions as CEO. The Debtors estimated assets of at least $50 million and debts of at least $100 million. The Debtors' restructuring counsel is Jones Day. Their investment banker is SSG Advisors, LLC. The Debtors are also represented by Richards Layton and Finger, as local counsel. Logan & Co. is the claims and notice agent. MSD PERFORMANCE: Committee Balks at Proposed Bid Procedures ----------------------------------------------------------- The Official Committee of Unsecured Creditors of MSD Performance, Inc., et al., objects to the approval of the proposed bidding procedures relating to the sale of substantially all of the Debtors' assets. The Committee says that in general, it is supportive of any sale process that maximizes value for the Debtors' unsecured creditors. However, according to the Committee, the proposed, open-ended sale process provides little, if any, assurance that the value created by an Asset Sale will inure to the benefit of the Committee's constituency. "The Debtors do not have a stalking horse to establish a floor price and negotiated terms for the contemplated transaction. Compounding these concerns, the Debtors expect significant administrative tax liability upon the closing of the Asset Sale that likely will render these estates administratively insolvent, will deeply subordinate unsecured claims and mandate immediate conversion to Chapter 7. Additionally, according to the Committee, even if the fairness of the process is improved so that it is clear that the sale can provide benefits to unsecured creditors, the Bid Procedures and the proposed APA must be modified to incorporate several key changes including, requiring Potential Bidders to specify the amount of unsecured obligations they will assume in order to be a Qualified Bidder, and alternatively, permitting the Debtors to propose and support a plan of reorganization. The Committee relates that it is also willing to agree to a one week adjournment of the hearing on approval of Bid Procedures in order to enable a further resolution of the Committee's issues. Bid Procedures As reported in the TCR on Sept 18, 2013, the Debtors seek authority from the Court to sell substantially all of their assets and approve procedures governing the sale of the assets. The Debtors have no standing offer for their assets but they believe that an auction process will provide an opportunity for interested bidders to formally bid for the assets or to offer to fund a Chapter 11 plan that would pay the Prepetition Lenders in full. Indeed, absent a competitive auction process that generates a significant purchase price for the assets, there is a strong possibility that a sale may be followed by a conversion of the Debtors' Chapter 11 cases to Chapter 7, Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, explained. Nonetheless, the Debtors have determined that pursuing a sale transaction will provide all interested parties with sufficient opportunity to participate in a sale process and is the best means to maximize the value of the Debtors' estates, Mr. Shapiro added. Any Potential Bidder that wishes to participate in the bidding process for the Assets must submit their bid to the Debtors no later than Nov. 18, 2013. If the Debtors receive two or more Qualified Bids, the Debtors propose to hold an auction on Nov. 21, at 10:00 a.m., (Eastern Daylight Time) at the offices of Richards, Layton & Finger. A hearing on the motion is scheduled for Oct. 1, 2013, at 9:30 a.m. Objections are due Sept. 24. About MSD Performance MSD Performance, Inc., headquartered in El Paso, Texas, operates in the power sports enthusiast and professional racer markets where the company maintains leading market share positions across all of its product categories under the MSD Ignition(R), Racepak(R) and Powerteq(R) brands. The company's facilities encompass over 220,000 square feet in six buildings, five of which are located across the U.S. and one in Shanghai, China. MSD Performance and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12286) on Sept. 6, 2013. Ron Turcotte signed the petitions as CEO. The Debtors estimated assets of at least $50 million and debts of at least $100 million. The Debtors' restructuring counsel is Jones Day. Their investment banker is SSG Advisors, LLC. The Debtors are also represented by Richards Layton and Finger, as local counsel. Logan & Co. is the claims and notice agent. MSD PERFORMANCE: Resists Lenders' Efforts to File Alternate Plan ---------------------------------------------------------------- Law360 reported that bankrupt high-performance auto parts maker MSD Performance Inc., pushed back late on Sept. 24 against a move by senior secured creditors to file their own Chapter 11 debt restructuring plan as an alternative to the going-concern sale that is the debtors' goal. According to the report, MSD Performance laid out its argument against a request by a group of lenders led by Madison Capital Funding LLC -- which control about 40 percent of MSD's pre- petition secured debt -- to terminate the debtors' ability to exclusively file a Chapter 11 plan. About MSD Performance MSD Performance, Inc., headquartered in El Paso, Texas, operates in the power sports enthusiast and professional racer markets where the company maintains leading market share positions across all of its product categories under the MSD Ignition(R), Racepak(R) and Powerteq(R) brands. The company's facilities encompass over 220,000 square feet in six buildings, five of which are located across the U.S. and one in Shanghai, China. MSD Performance and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case NO. 13-12286) on Sept. 6, 2013. Ron Turcotte signed the petitions as CEO. The Debtors estimated assets of at least $50 million and debts of at least $100 million. The Debtors' restructuring counsel is Jones Day. Their investment banker is SSG Advisors, LLC. The Debtors are also represented by Richards Layton and Finger, as local counsel. Logan & Co. is the claims and notice agent. NESBITT PORTLAND: Hilton Objects Again To Ch. 11 Plan ----------------------------------------------------- Law360 reported that two Hilton Worldwide Inc. affiliates on Sept. 24 objected to an amended Chapter 11 reorganization plan filed last week in California bankruptcy court by a collective of Embassy Suites hotel operators, arguing the plan would wrongly require them to alter their standard agreements to suit secured lender U.S. Bank NA. The objectors are HLT Existing Franchise Holding LLC and Embassy Suites Franchise LLC. About Nesbitt Portland Property et al. Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight hotels, seven of which are operated as Embassy Suites brand hotels. The eighth hotel, located in El Paso, Texas, was previously operated as an Embassy Suites hotel, but lost its franchise agreement. The eight hotels were pledged by the Debtors as collateral for the loans with U.S. Bank. According to http://www.wcghotels.com/Santa Monica-based Windsor Capital owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed Chapter 11 petitions (Bankr. C.D. Cal. Lead Case No. 12-12883) on July 31, 2012, in Santa Barbara, California. The debtor-entities are Nesbitt Portland Property LLC; Nesbitt Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and Nesbitt Blue Ash Property LLC. Bankruptcy Judge Robin Riblet presides over the cases. The Jonathan Gura, Esq., and Peter Susi, Esq., at Susi & Gura, PC; and Joseph M. Sholder, Esq., at Griffith & Thornburgh LLP, represent the Debtor as counsel. Alvarez & Marsal North American, LLC, serves as financial advisors. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer, are represented in the case by David Weinstein, Esq., and Lawrence P. Gottesman, Esq., at Bryan Cave LLP. On Sept. 5, 2012, the Debtors filed with the Court their schedules of assets and liabilities. Nesbitt Portland scheduled $29.4 million in assets and $192.3 million in liabilities. Nesbitt Portland's hotel property is valued at $27.19 million, and secures a $191.9 million debt to U.S. Bank. NET ELEMENT: Contributes Interests in Online Businesses to T1T -------------------------------------------------------------- Net Element International, Inc., entered into a Contribution Agreement with T1T Lab, LLC, and T1T Group, LLC, pursuant to which, on Sept. 25, 2013, the Company contributed to T1T Lab all of its membership and participation interests in its subsidiaries Openfilm, LLC, Motorsport, LLC, Splinex, LLC, LegalGuru, LLC, and MUSIC 1 LLC (aka OOO Music1). The Disposed Subsidiaries constitute all of the Company's interests in online media businesses and operations. Following the transactions effectuated pursuant to the Contribution Agreement, the Company currently indirectly owns a minority interest in the Disposed Subsidiaries through its 10 percent membership interest in T1T Lab. As a result of the Company's contribution of the Disposed Subsidiaries, the Company now has only one reportable business segment, consisting of mobile commerce and payment processing. The Company disposed its entertainment assets in order to focus its business operations on mobile payments, transactional services and related technologies and to reduce the significant expenses associated with developing and maintaining the entertainment assets. Pursuant to the Contribution Agreement, the Company contributed to T1T Lab all of its membership and participation interests in the Disposed Subsidiaries and agreed to make an initial capital contribution to T1T Lab in the amount of $1,259,000, payable in full or in installments when requested by T1T Lab but in no event later than within the 12-month period after Sept. 25, 2013 (unless such period is mutually extended in writing by the Company and T1T Group). Subject to T1T Lab's prior written approval, a portion of the Company's initial capital contribution may be made in the form of future services provided by the Company, with the value of those services to be agreed upon in writing between the Company and T1T Group prior to providing such services. The amount of the Company's initial capital contribution is a negotiated amount required for T1T Lab to acquire the Disposed Subsidiaries. In exchange for those contributions, the Company was issued a 10 percent membership interest in T1T Lab and T1T Lab assumed $2,162,158 in liabilities (including $2,000,000 owed by the Company to K 1 Holding Limited pursuant to a promissory note dated May 13, 2013) related to the Disposed Subsidiaries. In addition, all intercompany loans payable by the Disposed Subsidiaries to the Company, on the one hand, and by the Company to the Disposed Subsidiaries, on the other hand, were forgiven by the Company and by T1T Lab. Total intercompany loans forgiven by the Company (net of the total intercompany loans forgiven by the Disposed Subsidiaries) was approximately $9,864,602. Those intercompany loans forgiveness did not have an impact of the profit and loss of the Company. Pursuant to the Contribution Agreement, T1T Group agreed to contribute to T1T Lab from time to time when requested by T1T Lab those services or cash as determined by T1T Group in its sole and absolute discretion in order to manage and operate the Disposed Subsidiaries and their respective businesses. In exchange for those contributions, T1T Group was issued a 90 percent membership interest in T1T Lab. The Contribution Agreement requires T1T Lab's operating agreement to provide that, among other things, (i) the sole and exclusive management rights of T1T Lab (including with respect to the Disposed Subsidiaries and their respective businesses) are vested in T1T Group, (ii) the Company and T1T Group, as the members of T1T Lab, will have an obligation to make additional capital contributions to T1T Lab in proportion to their respective ownership interests in T1T Lab (10 percent by the Company and 90 percent by T1T Group) when and if such additional capital contributions are requested by T1T Lab and (iii) the failure to timely make those additional capital contributions to T1T Lab by either member will result in pro rata dilution of such member's ownership interest in T1T Lab. T1T Group is wholly-owned by Enerfund, LLC, (which is wholly-owned by Mike Zoi, a director and majority stockholder of the Company). About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media Web sites in the film, auto racing and emerging music talent markets. Following the 2011 results, Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. The Company's balance sheet at June 30, 2012, showed $3.22 million in total assets, $7.69 million in total liabilities, and a $4.46 million total stockholders' deficit. NRG DUNKIRK: S&P Removes Revenue Bonds Rating From Watch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services corrected its 'BB+' ratings on NRG Energy Inc. affiliate NRG Dunkirk Power's $58.5 million 5.875% tax exempt revenue bonds series 2009 due 2042 (obligor: NRG Dunkirk Power), by removing them from CreditWatch with negative implications. The outlook is stable. Ratings List NRG Energy Inc. Corporate Credit Rating BB-/Stable Ratings Removed from CreditWatch To From Chautauqua Cnty Indl Dev Agy NRG Dunkirk Power (Obligor) Senior Secured BB+ BB+/Watch Neg Recovery Rating 1 1 O&G LEASING: Motion for Valuation of Secured Claim Dismissed ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Mississippi approved an agreed order dismissing as moot O&G Leasing, LLC, et al.'s motion for valuation of secured claim. The stipulation was entered between the Debtor and First Security Bank, as trustee, who filed a response to the Debtors' motion. The Debtors has advised the Court that the issues raised in the motion are now moot. About O&G Leasing Jackson, Mississippi-based O&G Leasing, LLC, was formed in 2006 to acquire and construct land drilling rigs that it would lease to its wholy-owned subsidiary, Performance Drilling Company, LLC. Performance was formed to provide contract drilling services for tArkLaTex (Arkansas, Louisiana and Eastern Texas) region, as well as Alabama, Florida, Mississippi and Oklahoma. O&G Leasing filed for Chapter 11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-01851) on May 21, 2010. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Performance filed a separate petition for Chapter 11 relief (Bankr. S.D. Miss. Case No. 10-01852) on May 21, 2010. Performance estimated assets and debts of between $1 million and $10 million in its petition. The Debtors retained McCraney, Montagnet, Quin & Noble, PLLC as their bankruptcy counsel and Young Williams, P.A., as corporate counsel. Young Williams was replaced by Bradley Arant Boult Cummings, LLP, as corporate counsel effective March 8, 2012, but remained engaged as special counsel on litigation matters. BMC Group, Inc., serves as the Debtors' solicitation and voting agent. The U.S Bankruptcy Court for the Southern District of Mississippi confirmed on April 22, 2013, O&G Leasing, LLC, et al.'s Second Amended Plan of Reorganization filed Jan. 8, 2013, the Plan Supplement filed Feb. 5, 2013, and the Immaterial Modifications to the Second Amended Plan filed April 11, 2013. ORMET CORP: Needs Time to Close Sale; Seeks Exclusivity Extension ----------------------------------------------------------------- Ormet Corp. and its debtor-affiliates seek an extension of their exclusive periods to file a Chapter 11 plan and solicit votes on that plan. The Debtors ask the Court to extend the plan exclusivity period to February 20, 2014, and the solicitation period to April 22, 2014. The Debtors' request will be considered at a hearing for Oct. 17 at 11:30 a.m. Objections to the extension bid are due Oct. 10. The deadline is currently set for October 23. According to the Debtors, in the seven months since the Petition Date, they have made great strides in achieving their objective of value maximization. On June 6, 2013, the Court authorized the Debtors to sell substantially all of their assets to Smelter Acquisition LLC. Closing on the sale, however, is subject to the satisfaction of certain conditions precedent as set forth in the Asset Purchase Agreement. Included among the conditions is the Debtors' ability to secure a satisfactory arrangement upon which the Buyer would be able to purchase its electricity needs at the aluminum smelter in Hannibal, Ohio. The Debtors have pursued regulatory action before the Public Utilities Commission of Ohio and anticipate a final decision on their request in the coming weeks. Due to the time required to complete this regulatory process, to date, the Debtors have been unable to close upon the sale or finalize the terms of a plan. The Debtors said the proposed extension of the Exclusive Periods will add certainty and stability as the Debtors finalize the sale of the assets and transition to the post-sale wind down of the estates. To date, the Debtors have focused their efforts on transitioning into bankruptcy and pursuing the sale process, including the regulatory process before the Public Utilities Commission of Ohio, as necessitated by the circumstances of these cases. As a result, the Debtors have not yet analyzed in significant detail all issues related to a potential plan filing. Additionally, the ability to formulate any plan requires the Debtors (and other parties in interest) to know the outcome of the sale, which has not yet occurred. Bob Matyi, writing for Platts.com, notes that Smelter Acquisition LLC, owned by Wayzata Investment Partners, is buying the assets for $282 million. As reported by the Troubled Company Reporter, with no competing bids, Wayzata acquired the business in exchange for $130 million in secured debt plus the loan financing bankruptcy. In connection with its restructuring, Ormet received aggregate commitments of $90 million of DIP Financing, consisting of $30 million in Term DIP financing from Wayzata and a $60 million DIP facility from Wells Fargo, which replaced its $60 million pre-petition revolver with Ormet. According to Platts, the the deal has been held up over electricity power cost uncertainty involving Ormet's flagship operation, the 260,000 mt/year Hannibal smelter in southeastern Ohio. Ormet's efforts to secure lower power costs for Hannibal have been affected. The Platts report notes that on Thursday, Ohio regulators are expected to decide on Ormet's application to set Hannibal's power rate at $45.99/MWh for the rest of 2013 and whether or not to allow the company to purchase less expensive power off the wholesale market starting in January. The report relates American Electric Power is opposing the request for exclusivity extension. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Affiliates that separately filed Chapter 11 petitions are Ormet Primary Aluminum Corporation; Ormet Aluminum Mill Products Corporation; Specialty Blanks Holding Corporation; and Ormet Railroad Corporation. Ormet is represented in the case by Morris, Nichols, Arsht & Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B. Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq., Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. An official committee of unsecured creditors was appointed in the case in March 2013. The Committee is represented by Rafael X. Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S. Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein Sandler LLP. POINT CENTER: Trustee Taps Diamond McCarthy as Litigation Counsel ----------------------------------------------------------------- Howard Grobstein, the chapter 11 trustee of Point Center Financial, Inc., asks the U.S. Bankruptcy Court for permission to employ Diamond McCarthy LLP as special litigation counsel. To carry out his duties, the trustee requested Diamond McCarthy evaluate potential litigation claims for substantive consolidation, among other things, and then to commence litigation to preserve and recover certain property of the estate. Kathy Bazoian Phelps and Howard B. Grobstein attest that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Professional Rates ------------ ----- Kathy Bazoian Phelps $595/hour Michael Yoder $350/hour Benjamin Garry $260/hour Melody Shabpareh $190/hour Proposed Special Counsel for Ch11 Trustee Kathy Bazoian Phelps, Esq. DIAMOND MCCARTHY LLP 1999 Avenue of the Stars, 11th Floor Los Angeles, CA 90067-4402 Tel: (310) 651-2997 Fax: (713) 333-2199 E-mail: kphelps@diamondmccarthy.com About Point Center Point Center Financial, Inc., a hard money lender, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-11495) in Santa Ana, California, on Feb. 19, 2013. The Debtor disclosed $109,257,545 in assets and $54,566,116 in liabilities as of the Chapter 11 filing. The Company claims to have a long track record of success in originating and servicing loans from hundreds of investors. Unfortunately, due to the historic collapse of the economy beginning in about 2007, the Debtor, no different than many other similar enterprises in real estate, has fallen on hard times. From a high of about 130 performing loans with a total combined face value of over $450 million in 2006, only 8 loans are now performing. There were a total of only four foreclosed properties ("REOs") as of 2006. In comparison, between 2007 and 2012, there were 60 foreclosure sales. The result left the Debtor saddled with large secured liabilities to PMB, which has a blanket lien on all of the Debtor's assets in excess of $9 million, secured by the Debtor's primary asset of loan servicing and management fees received from secured loans and properties that have been taken back through foreclosure. The MA Creditors are represented by Mary L. Fickel, Esq., at Fickel & Davis. The Official Committee of Unsecured Creditors is represented by Marshack Hays LLP. RESIDENTIAL CAPITAL: Examiner Discharged From Duties ---------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York entered an order dated Sept. 24, 2013, terminating the appointment of retired Judge Arthur Gonzalez as the Chapter 11 examiner of Residential Capital, LLC, and its debtor affiliates. The Examiner and his professionals are discharged from any further obligations, duties, commitments and responsibilities effective as of Sept. 24, 2013. The Examiner and his Professionals are also relieved from any duty to respond, object or move for a protective order in response to any formal or informal discovery requests issued by any party, including but not limited to any subpoenas, requests for production of documents, requests for admissions, interrogatories, requests for testimony, letters rogatory, or any other discovery of any kind related to the Chapter 11 Cases, the Examiner Investigation and/or the Examiner Report. Judge Glenn also authorized the Examiner and his Professionals to transfer the Document Depository to the Debtors, who will preserve the Document Depository from the date of the transfer until further Court order. 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: Court Approves FGIC Settlement --------------------------------------------------- Judge Martin Glenn signed an order dated Sept. 20, 2013, approving a settlement agreement among Residential Capital LLC, Financial Guaranty Insurance Company, The Bank of New York Mellon, The Bank of New York Mellon Trust Company, N.A., Law Debenture Trust Company of New York, U.S. Bank National Association and Wells Fargo Bank, N.A., each solely in their respective capacities as trustees, indenture trustees or separate trustees, and certain Institutional Investors, dated May 23, 2013. Pursuant to the Settlement Agreement, and subject to the occurrence of the effective date of the Debtors' Chapter 11 Plan, FGIC Claims will be allowed as general unsecured claims against each of Residential Capital, LLC, GMAC Mortgage, LLC and Residential Funding Company, LLC, in the aggregate amount of $596.5 million, which amount: (i) is equal to the sum of (x) $343.2 million, the amount of claims FGIC has paid under the Policies that remain unreimbursed and (y) $253.3 million, the sum of all of the Payment Amounts; and (ii) will be allocated among Residential Capital, LLC, GMAC Mortgage, LLC and Residential Funding Company, LLC pro rata based on which of the Debtors would be obligated to reimburse FGIC for those payments under the Governing Agreements. If the Plan Support Agreement is terminated or the chapter 11 plan does not go effective, in addition to the FGIC Allowed Claims, FGIC reserves all rights to assert general unsecured claims against each of ResCap, GMAC, and RFC with all claims by FGIC against each entity capped in each case at the amount of $596.5 million. The FGIC Allowed Claims will be treated in accordance with the Plan Support Agreement and the chapter 11 plan, or, if the agreement is terminated or the chapter 11 plan does not go effective, the FGIC Allowed Claims will be treated pari passu with other unsecured claims allowed against ResCap, GMAC, and RFC. The Settlement Agreement is not, and will not be construed as, a settlement, termination, release, discharge or waiver of any claims FGIC may have against non-Debtor affiliates of ResCap, including Ally Financial, Inc., or the Representatives of those non-Debtor affiliates. Judge Glenn, in a memorandum opinion and order dated Sept. 13, stated that: "Absent the Settlement Agreement, the Debtors would face complex and lengthy litigation with FGIC and the FGIC Trustees over the validity, amount and possible subordination of their asserted claims. This litigation would be fact-intensive and would include relatively novel legal issues, making the potential outcome uncertain. In addition, the Debtors have experienced tremendous attrition among their employees who worked on the securitizations at issue and this would hinder the Debtors' efforts to offer meaningful live testimony in support of the Debtors' defenses." A full-text copy of the Sept. 20 Order is available for free at http://bankrupt.com/misc/RESCAPfgicord0920.pdf 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: Balks at Claims vs. Non-Obligor Entities ------------------------------------------------------------- Residential Capital LLC and its affiliates object to, and ask the Court to disallow and expunge, 28 proofs of claim filed by UMB Bank, N.A., in its capacity as Indenture Trustee with respect to certain 9.625% Junior Secured Guaranteed Notes Due 2015 issued by Residential Capital, LLC. The claims were filed against 28 Debtor entities that are not issuers, guarantors or pledgors of the Junior Secured Notes and, as a result, have no liability to the Indenture Trustee or to the beneficial holders of the Junior Secured Notes and neither the Indenture Trustee nor the Beneficial Holders have valid claims at these entities. A hearing on the claims objection is scheduled for Nov. 19, 2013 at 10:00 p.m. (ET). Objections are due Oct. 21. The Debtors are represented by Gary S. Lee, Esq., Lorenzo Marinuzzi, Esq., Norman S. Rosenbaum, Esq., and Jennifer L. Marines, Esq., at MORRISON & FOERSTER LLP, in New York. 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: Disputes Syncora's Claim No. 7170 ------------------------------------------------------ Residential Capital LLC and its affiliates object to, and ask the Court to disallow and expunge the Second Amended Proof of Claim Number 7170 filed by Syncora Guarantee Inc. f/k/a XL Capital Assurance Inc., against Debtors GMAC Mortgage, LLC, and Residential Funding Company, with respect to (1) Bear Stearns Second Lien Trust 2007-SV1; (2) Suntrust Acquisition Closed-End Second Trust, Series 2007-1; and (3) RALI Series 2006-QO4 Trust. The Debtors move to disallow and expunge the Second Amended Proof of Claim arguing that (i) the claim amendment is untimely, and (ii) even if amendment is permitted, the Second Amended Proof of Claim lacks merit on its face. Claim No. 7170 asserts more than $200 million of claims against GMACM resting on a novel and previously unarticulated theory: that a servicer can be held liable for the full extent of the losses arising from the sponsor's breaches of loan representations and warranties, if the servicer does not provide notice to the trustee of those breaches. A hearing on the claims objection is scheduled for Nov. 7, 2013 at 2:00 p.m. (ET). Responses are due Oct. 15. The Debtors are also represented by J. Alexander Lawrence, Esq., Kayvan B. Sadeghi, Esq., and Alexandra Steinberg Barrage, Esq., at MORRISON & FOERSTER LLP, in New York. 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: Objects to WVIMB'S $7.5-Mil. Fraud Claim ------------------------------------------------------------- Residential Capital LLC and its affiliates object to, and ask the Court to disallow and expunge, Claim No. 3818 filed by the West Virginia Investment Management Board on the ground that the claim is not enforceable against the Debtors because it is without merit. WVIMB's claim asserts no less than $7.5 million based on the fraud and negligent misrepresentation claims it asserted against the Debtors in its complaint resulting from the 2007 housing market collapse. According to Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, the law does not allow an investor who knowingly made such a risky, contrarian "bet" to shift its losses through a fraud suit, and WVIMB's attempt to do so should be rejected. A hearing on the claims objection is scheduled for Nov. 7, 2013 at 2:00 p.m. (ET). Responses are due Oct. 10. The Debtors are also represented by Joel C. Haims, Esq., and James J. Beha II, Esq., at MORRISON & FOERSTER LLP, in New York. 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). SCOOTER STORE: Gets Permission to Begin Selling Inventory --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Scooter Store Inc., a supplier of power wheelchairs and scooters, received bankruptcy court permission Sept. 25 to sell off inventory with limited supervision. According to the report, although the company had a going-concern buyer lined up, it was compelled to begin liquidating because it lost the right to reimbursement from Medicare. The judge gave Scooter Store permission to sell assets for less than $25,000 without notice. For sales of $25,000 to $500,000, assets could be sold with notice to prescribed parties, as long as no one objects. The report notes that were the business sold while operating, there might have been some recovery for unsecured creditors in view of a settlement between the official creditors' committee and lender Sun Capital Partners Inc., a 66.8 percent shareholder and holder of $40 million on third-lien debt. The company filed for Chapter 11 reorganization in April. It has 57 distribution centers in 41 states. The report discloses that the U.S. Justice Department searched the company's offices in February. There was a civil investigation into "billing and reimbursement procedures," according to a court filing. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SEDONA DEVELOPMENT: Post-Confirmation Status Hearing Continued -------------------------------------------------------------- According to minutes of hearing held on Sept. 17, 2013, the Bankruptcy Court continued until Dec. 17, at 10 a.m., the post confirmation status hearing in the Chapter 11 cases of Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC. Chris Graver, on behalf of the Debtor, noted that the case is substantially consummated and believes a motion to close the case will be filed shortly. The Court said the hearing may be vacated upon the entry of an order closing the case. As reported in the Troubled Company Reporter on May 1, 2013, Judge Eddward P. Ballinger confirmed the Joint Plan of Reorganization proposed by the Debtors together with Specialty Mortgage Corp., as loan servicer. The Debtors and Specialty Mortgage originally filed competing plans. After the effective date of the Plan, all rights of the Debtors will be deemed transferred to the entity known as Villa Renaissance LLC. The Plan provides for the following: * All transfers of real property will be subject to existing real property tax claims. With respect to all real property transferred under the Plan, including all property and interests as to Parcel A to be transferred to the Reorganized Debtor, all tax obligations owed to Yavapai County, which are due and owing as of Dec. 31, 2013, will be paid within 10 days after the Effective Date. * Any claims resulting from rejection of leases modified by a stipulation with General Electric Capital Corporation and Colonial Pacific Leasing Corporation will be treated as an administrative claim. * Specialty will purchase the William Scotsman modular units currently used as the "Clubhouse" buildings for $66,000. Specialty will also purchase the Scotsman modular units currently used as the VOA Operations-Housekeeping UNits for $54,700. In full satisfaction of any claim of William Scotsman, the Debtor will pay $19,129. * $250,000 will be set aside to fund completion and refurbishment of the Villas Spa Units. A full-text copy of the Plan Confirmation Order dated April 23, 2013, is available for free at: http://bankrupt.com/misc/SEDONAplanord0423.pdf About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-16711) on May 27, 2010. The Club at Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Es., at Polsinelli Shughart PC, in Phoenix, Ariz., assist the Debtors in their restructuring efforts. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona disclosed $29,171,168 in assets and $121,679,994 in liabilities. Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona on June 17, 2011, a second amended joint disclosure statement in support of their second amended joint pan of reorganization. The Debtors' disclosure statement was approved on June 28, 2011. SEGA BIOFUELS: Gets OK to Employ McCallar as Bankr. Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Georgia, Waycross Division, authorized SEGA Biofuels, LLC, to employ C. James McCallar, Jr., Esq., and Tiffany E. Caron, Esq., of McCallar Law Firm as counsel. As reported in the Troubled Company Reporter on Sept. 24, 2013, Mr. Callar will be paid $450 per hour, while Ms. Caron will be paid $350 per hour for their services. Sega Biofuels LLC, the owner of a wood-pellet plant in Nahunta, Georgia, filed a petition for Chapter 11 protection (Bankr. S.D. Ga. 13-50694) on Sept. 11 in Waycross, Georgia. The Company listed assets worth $10.6 million and debt totaling $13.7 million. SEGA BIOFUELS: Section 341(a) Meeting Adjourned to Oct. 21 ---------------------------------------------------------- The meeting of creditors in the bankruptcy case of SEGA Biofuels, LLC, has been adjourned to Oct. 21, 2013, at 1:00 p.m., at Waycross Courthouse. 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. Sega Biofuels LLC, the owner of a wood-pellet plant in Nahunta, Georgia, filed a petition for Chapter 11 protection (Bankr. S.D. Ga. 13-50694) on Sept. 11 in Waycross, Georgia. The Company listed assets worth $10.6 million and debt totaling $13.7 million. SHAMROCK-HOSTMARK: Plan Outline Hearing Continued Until Oct. 23 --------------------------------------------------------------- The Bankruptcy Court continued until Oct. 23, 2013, at 10 a.m., the hearing to consider the adequacy of information in the Disclosure Statement explaining Shamrock-Hostmark Princeton Hotel, LLC's Chapter 11 Plan. As reported in the Troubled Company Reporter on May 1, 2013, according to the Disclosure Statement, the Debtors intend to emerge from bankruptcy by restructuring their debts and ownership through an equity commitment from the venture. The Debtors' interests and properties will vest 100 percent in the Venture, which will be comprised of equity investor HCK2 Capital Ventures, LLC and Shamrock-Hostmark Hotel Fund, L.P. and which will repay lender's secured claims over seven years pursuant to modified loan terms. Payments to creditors will be funded from the equity contribution. In another docket entry, the Court continued until Oct. 23, 2013, at 10 a.m., the hearing to determine value of claim secured by a lien. About Shamrock-Hostmark Schaumburg, Ill.-based Shamrock-Hostmark Princeton Hotel, LLC, filed for Chapter 11 protection (Bank. N.D. Ill. Case No. 12-25860) on June 27, 2012. William Gingrich signed the petition as vice president-CFO, of Hostmark Hospitality Group. Shamrock- Hostmark Princeton Hotel disclosed $522,413 in assets and $15,457,812 in liabilities as of the Chapter 11 filing. Judge Jacqueline P. Cox presides over the case. Shamrock-Hostmark Andover and four affiliates are units of investment fund Shamrock-Hostmark Hotel Fund that own hotels. Shamrock-Hostmark Princeton owns the DoubleTree by Hilton Hotel Princeton located in Princeton, New Jersey. Shamrock-Hostmark Texas owns Crowne Plaza Hotel in San Antonio, Texas. Shamrock- Hostmark Palm owns Embassy Suites Palm Desert in Palm Desert, Calif. Shamrock-Hostmark Andover owns the Wyndham Boston Andover in Andover, Mass. Shamrock-Hostmark Tampa owns the DoubleTree by Hilton Hotel Tampa Airport - Westshore in Tampa, Florida. Brian A. Audette, Esq., David J. Gold, Esq., David M. Neff, Esq., and Eric E. Walker, Esq., at Perkins Coie LLP, in Chicago, Illinois, represent the Debtor as counsel. SMITHFIELD FOODS: S&P Lowers Corp. Credit Rating to 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Smithfield, Va.-based Smithfield Foods Inc. to 'BB-' from 'BB'. The outlook is stable. S&P also lowered the rating on Smithfield's senior unsecured debt to 'BB-' from 'BB'. This debt comprises $1 billion 6.625% senior notes due 2022, and $500 million 7.75% senior notes due 2017. The recovery rating remains '3', indicating S&P's expectation of meaningful recovery (50%-70%) in the event of a payment default. S&P has removed all of its ratings on Smithfield from CreditWatch, where they were placed with negative implications on May 29, 2013, following Shuanghui International Holdings Ltd.'s announcement that it would buy Smithfield for about $7.1 billion, including Smithfield's outstanding debt. The 'BB-' ratings on Sun Merger Sub Inc.'s (original issuer) $400 million senior unsecured note due 2021 and $500 million senior unsecured notes due 2018 remain unchanged with a recovery rating of '3'. This debt became a senior unsecured debt obligation of Smithfield Foods, Inc. following Sun Merger's merger with and into Smithfield, substantially concurrent with the close of the Shuanghui acquisition. "The downgrade reflects S&P's opinion that Smithfield's increased debt levels following its acquisition by Shuanghui results in a weaker credit profile for the company," said Standard & Poor's credit analyst Chris Johnson. The stable outlook reflects Standard & Poor's expectation that Smithfield will maintain adequate liquidity, improve EBITDA as hog production earnings rebound, and deleverage to closer to 4x or below over the next year. SOUNDVIEW ELITE: 6 Cayman Mutual Funds File Ch. 11 in New York -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that six mutual funds originally created by Citco Group of Cos. filed petitions for Chapter 11 protection on Sept. 24 in Manhattan to avoid undergoing bankruptcy liquidation in the Cayman Islands, where they are incorporated. According to the report, SoundView Elite Ltd. and two similarly named funds were the target of a winding-up petitions in the Cayman Islands filed in August by Citco, which had sold its interest in the funds' manager years before. An investor, who was removed from the funds' board in June, filed a different winding- up petition in August, aimed at three funds created later to hold illiquid assets. The report notes that the funds said in a court filing that their total cash assets of about $20 million are held in the U.S., where the funds are managed. Court papers list the funds' total assets as $52.8 million, against debt totaling $28 million. The first-filed case is In re SoundView Elite Ltd., 13-bk-13098, U.S. Bankruptcy Court, Southern District of New York (Manhattan). STACKPOLE INTERNATIONAL: S&P Assigns 'B+' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' long- term corporate credit rating and stable outlook to auto parts suppliers Stackpole International EP Holding Ltd., Stackpole International Global Holding Co., and Stackpole International PM Holding Ltd. (collectively, Stackpole International). At the same time, Standard & Poor's assigned its 'B+' issue-level rating (the same as the corporate credit rating on the three companies) and '4' recovery rating to the proposed US$360 million senior secured notes to be co-issued by Stackpole International Engineered Products Inc., Stackpole International Intermediate Co. S.A., and Stackpole International Powder Metal ULC. Each is a subsidiary of the rated entities. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in a default scenario. The ratings on Stackpole International reflect S&P's assessment of the credit profile of all three companies on a consolidated basis. As the proposed US$360 million secured notes and the proposed US$70 million revolving credit facility are jointly and severally guaranteed by the three companies, and by their material U.S. and Canadian subsidiaries, and secured (equally and ratably) by the consolidated assets of these entities, S&P has assessed the credit profile of all on a consolidated basis. "Our ratings on sponsor-owned Stackpole International also reflect our view of the company's business risk profile as weak, based on the company's relatively limited size and diversity, as well as the auto parts industry's volatile demand, intense competition, and constant pricing pressure," said Standard & Poor's credit analyst Jamie Koutsoukis. "We deem the company to have an aggressive financial risk profile, highlighted by our expectation that its adjusted debt leverage will be about 4.9x at year-end 2013 following its refinancing and its acquisition by Crestview Partners, and that its funds from operations to debt will be in the mid-teens," Ms. Koutsoukis added. These concerns are partially mitigated by Stackpole International's leading positions in the niche oil pump and powder metal parts industry, where the company's products are used mostly in long-lived vehicle powertrains and their specialized nature somewhat shields the company from the commodity pressures experienced by many other automotive parts makers. Stackpole International's business is divided into two main divisions--engineered products (oil pumps for automotive engines and transmissions) and powdered metal (manufacturing of high-end components for automotive powertrains)-- each accounting for about 50% of total revenues. In terms of market share, the company holds the leading and second-leading positions, for oil pump and powdered metal parts, respectively, in North America. Stackpole International is considered a midsize player, with more than C$430 million in 2012 sales. The stable outlook reflects S&P's view that Stackpole International will generate positive free operating cash flow (FOCF) in the 12 months ahead and keep EBITDA margins consistent with 2012 levels, given the somewhat favorable trend for vehicle production in North America. S&P could lower the ratings if FOCF generation turns negative for consecutive quarters or debt leverage exceeds 5x over an extended period. S&P considers an upgrade unlikely in the near term, given the company's private equity ownership and its product, market, and geographic concentrations. THOMAS JEFFERSON: S&P Lowers Rating on 2008A & 2008B Bonds to 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term rating to 'B+' from 'BB' on the California Statewide Communities Development Authority's series 2008A tax-exempt revenue bonds and series 2008B taxable revenue bonds issued for Thomas Jefferson School of Law (TJSL). The outlook is negative. "The rating action reflects our view of TJSL's covenant violations in fiscal 2012 and anticipated covenant violations in fiscal 2013," said Standard & Poor's credit analyst Carlotta Mills. The school failed to meet two covenants (unrestricted resources to debt and to operating revenue) in fiscal 2012 and does not anticipate doing so until 2015 and 2017, respectively. The rating further reflects S&P's view of TJSL's high level of debt, diminishing operating surpluses, erosion of cash, and decline in enrollment. The negative outlook reflects S&P's anticipation that during the next year the bondholders should decide whether to grant a waiver of the covenant violations on the bonds. TOMSTEN INC: Taps Quasimodo Advertising as Marketing Consultant --------------------------------------------------------------- Tomsten, Inc., dba Archiver's, sought and obtained permission from the U.S. Bankruptcy Court for the District of Minnesota to employ Quasimodo Advertising as marketing consultant. Quasimodo will provided services including research targeted at understanding Archiver's customers' opinions of its Memory Lab; and crafting creative content for use in Archiver's marketing campaigns. Quasimodo estimates that the proposed services will require approximately 187 hours to complete. The firm will be paid a flat fee of $22,000. Gary Bingner -- gary@quasiland.com -- president and creative director of Quasimodo, assures the Court that his firm is a "disinterested" person as that term is defined in 11 U.S.C. Section 101(13), and does not hold or represent any interest adverse to the Debtor with respect to the matters upon which it is to be engaged. About Tomsten, Inc. Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. Steven M. Rubin and the law firm of Leonard Street and Deinard serve as the Debtor's corporate counsel. M Squared Group, Inc., is the Debtor's marketing consultant while Lighthouse Management Group, Inc., is the Debtor's financial consultant. Baker Tilly Virchow Krause, LLP, serve as tax accountant to the Debtor. The Official Unsecured Creditors' Committee is represented by Jay Jaffe, Esq., at Faegre Baker Daniels LLP. CBIZ Accounting, Tax and Advisory of New York, LLC, serves as the Committee's financial advisor. TRIMAS CORP: S&P Rates $650 Million Senior Secured Facilities 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it has assigned its 'BB' issue-level rating and '2' recovery rating to Bloomfield Hills, Mich.-based TriMas Co. LLC's proposed $650 million senior secured credit facilities. TriMas Co. LLC is a wholly owned subsidiary of TriMas Corp. (Trimas; BB-/Stable/--), which plans to use the proceeds from the facilities to repay the existing term loan B with an upsized revolver and extend maturities by one year. The corporate credit rating on TriMas Corp. is not affected by the refinancing of the $650 million credit facilities. The recovery rating on the proposed first-lien credit facilities is '2', indicating S&P's expectation of substantial (70%-90%) recovery in the event of a default. The rating on TriMas reflects S&P's view of its "fair" business risk profile and "aggressive" financial risk profile. The company has maintained good credit ratios due to steady free cash flow generation and continued focus on debt reduction. TriMas' operating performance should continue to benefit from demand in some of the company's global industrial markets in 2013 and 2014 and expected improvement in productivity and efficiency. The company's focus on cost containment and working capital investment should lead to EBITDA margin improvement from the 14% level as of June 30, 2013, which was somewhat lower than the average of 16% over the past three years. S&P expects revenue growth in the mid- to high-single-digit range in 2013 and modest improvement in EBITDA margin. This could likely result in the company maintaining adjusted leverage of about 3x. S&P also expects that TriMas will maintain its credit measures while it expands through acquisitions. The outlook is stable. S&P expects TriMas to perform well this year, considering global industrial conditions, and S&P's rating assumes revenue growth in the mid- to high-single-digit range in fiscal 2013 and 2014, along with steady margin performance. S&P also expects TriMas to use some of its consistent free cash flow, supplemented by recent equity offering, on acquisitions to complement organic growth. S&P's expectation is that Trimas' near term leverage will be maintained at 3.0x-4.0x. RATINGS LIST TriMas Corp. Corporate Credit Rating BB- /Stable/-- New Ratings TriMas Co. LLC $475 mil. revolving credit facility due 2018 BB Recovery rating 2 $175 mil. term loan due 2018 BB Recovery rating 2 TURBOCOMBUSTOR TECHNOLOGIES: Moody's Gives B2 Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service has assigned initial ratings to TurboCombustor Technologies, Inc., including a Corporate Family Rating of B2. Concurrently, a B2 rating has been assigned to the planned first lien bank credit facility of TCT, the proceeds of which will refinance existing debt and help fund the pending acquisition of assets and equity interests of eight facilities across three sites from Unison Engine Components. The rating outlook is stable. The following ratings were assigned (subject to review of final documentation): Corporate Family Rating, B2 Probability of Default Rating, B2-PD $70 million first lien revolver due 2018, B2, LGD4, 50% $260 million first lien term loan due 2020, B2, LGD4, 50% Rating Outlook: Stable Rating Rationale: The B2 CFR broadly reflects the company's small scale and moderately high financial leverage (debt/EBITDA in the mid-5x range on a Moody's-adjusted basis), which are somewhat mitigated by the perceived favorable intermediate-term demand outlook for its aircraft engine components/assemblies. The company's limited performance track record on a combined basis incorporating both recently completed and the pending acquisition also serves as a tempering rating consideration. In January 2013, the company more than doubled in size with the acquisition of Paradigm Precision Holdings, LLC. Further, uneven operational results of the to-be- acquired Unison assets complicates forward visibility, as well. Execution on operational initiatives to achieve margin synergies will be required but the scope of operational revisions planned seems achievable. The combined entity will have good diversification across aircraft models. The added range of content and production capabilities that come from Unison should favor planned marketing initiatives, providing additional revenue opportunities. But TCT's effort to build on its "Paradigm Precision" brand name and grow prominence as a supplier will take time in the competitive aircraft parts manufacturing market. The rating outlook is stable reflecting adequate liquidity and free cash flow generation, as expected. The credit facility will have a maintenance covenant test that applies only when the revolver is utilized 25% or more, and planned debt amortization will be low. Nonetheless, the magnitude of capital projects planned is not overly ambitious. With the favorable demand setting and assuming good success toward realization of synergies, a free cash flow-to-debt ratio in the mid- to high-single digit percentage range seems likely and helps prospects for debt reduction. Upward rating momentum would depend on an expectation of debt-to- EBITDA closer to the 4x range with free cash flow-to-debt above 10% in conjunction with a good liquidity profile. Downward rating pressure would be prompted by expectations of debt-to-EBITDA at 6x or higher, low free cash flow and/or a weaker liquidity profile. The principal methodology used in this rating was the Global Aerospace and Defense Industry Methodology published in June 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. TurboCombustor Technologies, Inc. is a subsidiary of Dynamic Precision Group, Inc. Dynamic Precision Group, Inc. is majority- owned by entities of The Carlyle Group. TWN INVESTMENT: Oct. 15 Hearing on East West's Stay Relief Bid -------------------------------------------------------------- In the Chapter 11 case of TWN Investment Group, LLC, the U.S. Bankruptcy Court for the Northern District of California will convene a hearing on Oct. 15, 2013, at 10 a.m., to consider creditor East West Bank's motion for relief from stay with respect to these properties -- 969, 979, 989, and 999 Story Road, San Jose, California. EWB has a filed claim in the amount of $47,389,057. EWB's appraisal indicates that the property has a value of $33,800,000 retail and $27,700,000 bulk sale. According to Curtis C. Jung, Esq., at Jung & Yuen, LLP, on behalf of EWB, the bank is entitled to relief of stay because, among other things: 1. there is no "equity cushion" in the property sufficient to adequately protect EWB and its interest in the property; 2. the property is not necessary for an effective reorganization; and 3. the Debtor's payments are not a bar to relief under Section 362(d)(2) of the Bankruptcy Code. About TWN Investment Group TWN Investment Group, LLC, filed a Chapter 11 petition in its home-town in San, Jose California (Bankr. N.D. Calif. Case No. 13-50821) on Feb. 13, 2013. The Company disclosed assets of $58.2 million and liabilities of $53.4 million in its schedules. The Company owns partially developed real estate located at 909- 9999 Story Road, in San Jose. The property is the company's sole assets and secures a $48.1 million debt to East West Bank. The Debtor is represented by Charles B. Greene, Esq., at the Law Offices of Charles B. Greene, in San Jose. Rene Lastreto II, Esq., at Lang Richert & Patch, represents the Committee. * Moody's Notes Recovery of U.S. Homebuilding Sector ---------------------------------------------------- Companies involved in the initial stages of home construction will be the first to benefit from continued growth in the US homebuilding industry, Moody's Investors Service says in a new special comment, "Housing Recovery and Increased Repair and Remodeling Work Fuel Growing Optimism." While the housing recovery will ultimately benefit the entire sector, Moody's notes that companies that manufacture and provide varying services for the initial construction stages will benefit sooner. The report highlights rated companies USG, Ply Gem Industries, Owens Corning's insulation segment and Masco's installation business as likely to show early improvement. With consumers now spending more on home renovation, Moody's is optimistic about a more robust near-term recovery in the repair and remodeling segment as contractors expect remodeling activity to continue to increase through 2013. Remodeling activity over the near term will be focused on non- discretionary expenditures and higher-return projects, particularly for homeowners positioning homes for resale, says the rating agency. That means companies such as Building Materials Corporation of America and Owens Corning's roofing division, which both manufacture products for roof repair, as well as Masco's decorative architectural products segment, will benefit from steady demand. Commercial construction will continue to lag residential construction, but increased billings suggest that a commercial construction recovery is in sight, says Moody's. Finally, liquidity profiles for Moody's-rated building products companies have generally improved, says the rating agency. Refinancing and extending maturities has improved financial flexibility, while springing covenants under revolvers and "covenant-lite" term loans allow companies to focus on improving operations and investing in future growth, says Moody's. * Defaults Can Grow Quickly When Credit Market Turns, Moody's Says ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, says that Moody's Investors Service said in a report that although corporate defaults are few and the list of distressed companies is short, the picture could change quickly "when credit markets do weaken materially." According to the report, there are now 148 names on Moody's list of low-rated companies, the fewest in six months. A company qualifies for the list if it has a B3 or lower rating alongside a negative outlook. The report notes that although issuers aren't falling into the low-rated category, downgrades of junk-rated companies exceeded upgrades for six consecutive months and 11 months in the past year, Moody's said. The report relates that similarly, the list of companies being reviewed for downgrade has been longer than the list of potential junk upgrades since April 2012. When the credit markets turn less generous, the picture can change quickly. In the first quarter of 2009, 73 companies joined the ranks of the low-rated. In the following quarter, the list grew by another 63. For the time being, Moody's sees no increase in defaults. The rating company predicts the junk default rate will end the year at 2.6 percent, down from 2.8 percent in August. * Bankruptcy Court Lacks Jurisdiction to Decide Property Ownership ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to the U.S. Bankruptcy Appellate Panel in San Francisco, the bankruptcy court had no jurisdiction to decide whether the bankrupt estate actually owned property sold by the trustee. According to the report, the trustee for an individual in Chapter 7 held an auction and sold a malpractice claim asserted by the bankrupt. The bankrupt was contending at the time that the claim arose after bankruptcy and wasn't property of the estate. The trustee sold whatever interest the estate had in the claim, without any warranties or representations. The report notes that after the sale, the buyer sued the individual in bankruptcy court seeking a declaration that the estate owned the malpractice claim. The bankruptcy judge ruled on the merits of ownership. On appeal, the appellate panel reversed, holding there was no jurisdiction. The appellate panel's decision contains a comprehensive analysis of every conceivable statutory basis for jurisdiction. The report relates that the opinion began by ruling that there was no jurisdiction under Section 1334(e) of the Judiciary Code because jurisdiction over property of the estate ends once the property is sold. The report discloses that on the broader basis of "related to" jurisdiction under Section 1334(b), the panel said the outcome of the suit could have "no conceivable effect" on the bankrupt estate, no matter how the lawsuit ended up. If the estate had been the owner, it wouldn't be affected because the claim was sold already. If the bankrupt owned the claim because it arose after bankruptcy, there likewise would be no effect on the estate. The panel's Sept. 23 opinion won't be officially published. The case is Stokes v. Duncan (In re Stokes), 13-01097, U.S. Bankruptcy Appellate Panel for the Ninth Circuit (San Francisco). * Trust-Fund Interest Claim Survives Chapter 13 Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to the U.S. Bankruptcy Appellate Panel in Boston, a claim of the Internal Revenue Service for interest related to trust-fund taxes isn't discharged in a Chapter 13 plan. According to the report, an individual in Chapter 13 made all payments under a five year Chapter 13 plan, including full payment of a $96,500 priority claim by the IRS representing civil penalties for failure to pay trust-fund taxes. In the proof of claim, the IRS didn't seek interest. After plan payments were completed and the debtor received a discharge, the IRS began dunning the bankrupt for interest. The report notes that the bankruptcy judge found the tax agency in violation of the discharge injunction. On appeal, the IRS won. Writing for the three-judge appellate panel, U.S. Bankruptcy Judge J. Michael Deasy parsed several provisions of the Bankruptcy Code in concluding that the interest claim wasn't discharged. He pointed out that Section 1328(a)(2) of the code discharges debts "provided for in the plan." The report discloses that under Section 502(b)(2), the IRS is barred from claiming post-petition interest. Because the post- petition interest claim wasn't dealt with in the plan, it wasn't wiped out, Deasy ruled. The case is U.S. v. Monahan (In re Monahan), 12-0084, First U.S. Circuit Bankruptcy Appellate Panel (Boston). * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE OU1 GR 126.4 (13.6) (13.3) ABSOLUTE SOFTWRE ABT CN 126.4 (13.6) (13.3) ABSOLUTE SOFTWRE ALSWF US 126.4 (13.6) (13.3) ACCELERON PHARMA XLRN US 48.4 (19.9) 6.2 ADVANCED EMISSIO OXQ1 GR 87.0 (42.3) (18.0) ADVANCED EMISSIO ADES US 87.0 (42.3) (18.0) ADVENT SOFTWARE AXQ GR 824.6 (114.8) (202.7) ADVENT SOFTWARE ADVS US 824.6 (114.8) (202.7) AIR CANADA-CL A AIDIF US 9,238.0 (3,470.0) (452.0) AIR CANADA-CL A AC/A CN 9,238.0 (3,470.0) (452.0) AIR CANADA-CL B AIDEF US 9,238.0 (3,470.0) (452.0) AIR CANADA-CL B AC/B CN 9,238.0 (3,470.0) (452.0) AK STEEL HLDG AKS US 3,772.7 (181.0) 473.3 AK STEEL HLDG AKS* MM 3,772.7 (181.0) 473.3 ALLIANCE HEALTHC AIQ US 528.2 (131.1) 64.8 AMC NETWORKS-A 9AC GR 2,460.3 (680.1) 735.0 AMC NETWORKS-A AMCX US 2,460.3 (680.1) 735.0 AMER AXLE & MFG AXL US 3,008.7 (101.6) 345.2 AMER AXLE & MFG AYA GR 3,008.7 (101.6) 345.2 AMR CORP ACP GR 26,216.0 (8,216.0) (1,034.0) AMR CORP AAMRQ* MM 26,216.0 (8,216.0) (1,034.0) AMR CORP AAMRQ US 26,216.0 (8,216.0) (1,034.0) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ANGIE'S LIST INC ANGI US 111.8 (11.9) (9.4) ANGIE'S LIST INC 8AL GR 111.8 (11.9) (9.4) ANGIE'S LIST INC 8AL TH 111.8 (11.9) (9.4) ARRAY BIOPHARMA AR2 TH 136.0 (21.9) 70.7 ARRAY BIOPHARMA AR2 GR 136.0 (21.9) 70.7 ARRAY BIOPHARMA ARRY US 136.0 (21.9) 70.7 AUTOZONE INC AZ5 TH 6,783.0 (1,532.3) (657.7) AUTOZONE INC AZ5 GR 6,783.0 (1,532.3) (657.7) AUTOZONE INC AZO US 6,783.0 (1,532.3) (657.7) BENEFITFOCUS INC BNFT US 54.8 (43.9) (3.6) BENEFITFOCUS INC BTF GR 54.8 (43.9) (3.6) BERRY PLASTICS G BP0 GR 5,045.0 (251.0) 550.0 BERRY PLASTICS G BERY US 5,045.0 (251.0) 550.0 BIOCRYST PHARM BCRX US 39.9 (9.0) 21.6 BIOCRYST PHARM BO1 GR 39.9 (9.0) 21.6 BIOCRYST PHARM BO1 TH 39.9 (9.0) 21.6 BOSTON PIZZA R-U BPZZF US 156.7 (108.0) (4.2) BOSTON PIZZA R-U BPF-U CN 156.7 (108.0) (4.2) BROOKLINE BANCRP BRKL US 5,150.5 (8.5) - BROOKLINE BANCRP BB3 GR 5,150.5 (8.5) - BRP INC/CA-SUB V BRPIF US 1,768.0 (496.6) (21.8) BRP INC/CA-SUB V B15A GR 1,768.0 (496.6) (21.8) BRP INC/CA-SUB V DOO CN 1,768.0 (496.6) (21.8) BUILDERS FIRSTSO B1F GR 505.5 (8.5) 188.3 BUILDERS FIRSTSO BLDR US 505.5 (8.5) 188.3 CABLEVISION SY-A CVC US 7,588.1 (5,565.5) (14.0) CABLEVISION SY-A CVY GR 7,588.1 (5,565.5) (14.0) CAESARS ENTERTAI C08 GR 26,844.8 (738.1) 833.8 CAESARS ENTERTAI CZR US 26,844.8 (738.1) 833.8 CALLIDUS SOFTWAR CALD US 123.1 (2.2) 2.8 CALLIDUS SOFTWAR CSQ GR 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) CHOICE HOTELS CZH GR 562.7 (520.0) 75.1 CHOICE HOTELS CHH US 562.7 (520.0) 75.1 CIENA CORP CIE1 TH 1,727.4 (83.2) 763.4 CIENA CORP CIE1 GR 1,727.4 (83.2) 763.4 CIENA CORP CIEN TE 1,727.4 (83.2) 763.4 CIENA CORP CIEN US 1,727.4 (83.2) 763.4 COMVERSE INC CNSI US 844.8 (9.4) (6.1) COMVERSE INC CM1 GR 844.8 (9.4) (6.1) CONATUS PHARMACE CNAT US 5.3 (2.5) 1.0 DELTA AIR LI DAL* MM 45,772.0 (1,184.0) (5,880.0) DELTA AIR LI DAL US 45,772.0 (1,184.0) (5,880.0) DELTA AIR LI OYC GR 45,772.0 (1,184.0) (5,880.0) DIAMOND RESORTS DRII US 1,073.5 (81.3) 682.4 DIAMOND RESORTS D0M GR 1,073.5 (81.3) 682.4 DIRECTV DIG1 GR 20,921.0 (5,688.0) 622.0 DIRECTV DTV US 20,921.0 (5,688.0) 622.0 DIRECTV DTV CI 20,921.0 (5,688.0) 622.0 DOMINO'S PIZZA DPZ US 468.8 (1,328.8) 73.7 DOMINO'S PIZZA EZV GR 468.8 (1,328.8) 73.7 DOMINO'S PIZZA EZV TH 468.8 (1,328.8) 73.7 DUN & BRADSTREET DB5 GR 1,838.5 (1,188.4) (174.3) DUN & BRADSTREET DNB US 1,838.5 (1,188.4) (174.3) DUN & BRADSTREET DB5 TH 1,838.5 (1,188.4) (174.3) DYAX CORP DYAX US 70.7 (37.0) 43.0 DYAX CORP DY8 GR 70.7 (37.0) 43.0 EASTMAN KODAK CO KODN GR 3,815.0 (3,153.0) (785.0) EASTMAN KODAK CO EKOD US 3,815.0 (3,153.0) (785.0) EVERYWARE GLOBAL EVRY US 340.7 (53.6) 134.8 FAIRPOINT COMMUN FRP US 1,606.4 (400.5) 19.6 FERRELLGAS-LP FEG GR 1,356.0 (86.6) (21.3) FERRELLGAS-LP FGP US 1,356.0 (86.6) (21.3) FIFTH & PACIFIC FNP US 846.2 (213.7) (64.6) FIFTH & PACIFIC LIZ GR 846.2 (213.7) (64.6) FIREEYE INC F9E GR 139.5 (45.0) (13.1) FIREEYE INC FEYE US 139.5 (45.0) (13.1) FOREST OIL CORP FOL GR 1,913.7 (67.4) (129.4) 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 FREESCALE SEMICO 1FS GR 3,129.0 (4,583.0) 1,235.0 GENCORP INC GCY TH 1,411.1 (366.9) 27.9 GENCORP INC GCY GR 1,411.1 (366.9) 27.9 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 6GB GR 576.5 (37.0) 286.9 GLOBAL BRASS & C BRSS US 576.5 (37.0) 286.9 GOLD RESERVE INC GRZ CN 23.7 (0.1) (17.3) GOLD RESERVE INC GDRZF US 23.7 (0.1) (17.3) GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HCA HOLDINGS INC 2BH GR 27,934.0 (7,485.0) 1,771.0 HCA HOLDINGS INC 2BH TH 27,934.0 (7,485.0) 1,771.0 HCA HOLDINGS INC HCA US 27,934.0 (7,485.0) 1,771.0 HD SUPPLY HOLDIN HDS US 6,587.0 (753.0) 1,281.0 HD SUPPLY HOLDIN 5HD GR 6,587.0 (753.0) 1,281.0 HOVNANIAN ENT-A HOV US 1,664.1 (467.2) 950.2 HOVNANIAN ENT-A HO3 GR 1,664.1 (467.2) 950.2 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) IMMUNE PHARMACEU IMNP TQ 1.0 (16.2) (8.9) INCYTE CORP INCY US 334.2 (27.8) 210.4 INCYTE CORP ICY GR 334.2 (27.8) 210.4 INCYTE CORP ICY TH 334.2 (27.8) 210.4 INFOR US INC LWSN US 6,202.6 (476.4) (417.5) INSYS THERAPEUTI NPR1 GR 22.2 (63.5) (70.0) INSYS THERAPEUTI INSY US 22.2 (63.5) (70.0) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU 1JE GR 1,505.7 (215.4) (97.4) 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 6,072.0 (861.0) 613.0 L BRANDS INC LTD TH 6,072.0 (861.0) 613.0 L BRANDS INC LTD GR 6,072.0 (861.0) 613.0 LIN MEDIA LLC L2M TH 1,221.8 (63.5) (97.2) LIN MEDIA LLC LIN US 1,221.8 (63.5) (97.2) LIN MEDIA LLC L2M GR 1,221.8 (63.5) (97.2) LIPOCINE INC LPCN US 0.0 (0.0) (0.0) LORILLARD INC LLV GR 3,335.0 (1,855.0) 1,587.0 LORILLARD INC LLV TH 3,335.0 (1,855.0) 1,587.0 LORILLARD INC LO US 3,335.0 (1,855.0) 1,587.0 MANNKIND CORP MNKD US 212.4 (152.4) (234.6) MANNKIND CORP NNF1 GR 212.4 (152.4) (234.6) MANNKIND CORP NNF1 TH 212.4 (152.4) (234.6) MARRIOTT INTL-A MAQ GR 6,377.0 (1,493.0) (1,063.0) MARRIOTT INTL-A MAR US 6,377.0 (1,493.0) (1,063.0) MARRIOTT INTL-A MAQ TH 6,377.0 (1,493.0) (1,063.0) MARRONE BIO INNO MBII US 25.6 (47.8) (12.8) MDC PARTNERS-A MDCA US 1,389.4 (16.6) (204.5) MDC PARTNERS-A MD7A GR 1,389.4 (16.6) (204.5) MDC PARTNERS-A MDZ/A CN 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 MERITOR INC AID1 GR 2,477.0 (1,059.0) 278.0 MERRIMACK PHARMA MACK US 107.3 (58.3) 28.2 MONEYGRAM INTERN MGI US 5,075.8 (148.2) 30.1 MORGANS HOTEL GR M1U GR 580.7 (163.7) 9.9 MORGANS HOTEL GR MHGC US 580.7 (163.7) 9.9 MPG OFFICE TRUST MPG US 1,280.0 (437.3) - NANOSTRING TECHN NSTG US 30.5 (2.0) 10.9 NATIONAL CINEMED NCMI US 952.5 (224.6) 128.8 NATIONAL CINEMED XWM GR 952.5 (224.6) 128.8 NAVISTAR INTL IHR TH 8,241.0 (3,933.0) 1,329.0 NAVISTAR INTL IHR GR 8,241.0 (3,933.0) 1,329.0 NAVISTAR INTL NAV US 8,241.0 (3,933.0) 1,329.0 NEKTAR THERAPEUT NKTR US 412.8 (40.5) 144.1 NEKTAR THERAPEUT ITH GR 412.8 (40.5) 144.1 NYMOX PHARMACEUT NY2 GR 1.4 (6.9) (2.7) NYMOX PHARMACEUT NYMX US 1.4 (6.9) (2.7) NYMOX PHARMACEUT NY2 TH 1.4 (6.9) (2.7) ODYSSEY MARINE OMEX US 29.2 (5.6) (16.0) OMEROS CORP OMER US 23.1 (12.3) 10.4 OMEROS CORP 3O8 GR 23.1 (12.3) 10.4 OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) OPHTHTECH CORP OPHT US 40.2 (7.3) 34.3 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDL GR 401.4 (1.3) 46.7 PDL BIOPHARMA IN PDL TH 401.4 (1.3) 46.7 PDL BIOPHARMA IN PDLI US 401.4 (1.3) 46.7 PHILIP MORRIS IN 4I1 GR 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN 4I1 TH 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PM1EUR EU 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PM FP 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PM1 TE 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PM1CHF EU 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PMI SW 37,140.0 (3,929.0) 2,049.0 PHILIP MORRIS IN PM US 37,140.0 (3,929.0) 2,049.0 PHILIP MRS-BDR PHMO34 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 1,102.0 (70.2) 194.4 PLY GEM HOLDINGS PG6 GR 1,102.0 (70.2) 194.4 PROTALEX INC PRTX US 2.5 (8.5) (2.4) 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 QUINTILES TRANSN QTS GR 2,426.7 (1,322.3) 217.5 REGAL ENTERTAI-A RGC US 2,608.4 (697.9) (21.2) REGAL ENTERTAI-A RETA GR 2,608.4 (697.9) (21.2) RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTPATH INC PRM US 208.0 (91.7) 3.6 REVLON INC-A RVL1 GR 1,269.7 (632.4) 180.6 REVLON INC-A REV US 1,269.7 (632.4) 180.6 RINGCENTRAL IN-A RNG US 48.5 (20.7) (22.8) RITE AID CORP RTA GR 7,169.0 (2,317.9) 1,943.6 RITE AID CORP RAD US 7,169.0 (2,317.9) 1,943.6 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,925.8 (294.4) 503.5 SALLY BEAUTY HOL S7V GR 1,925.8 (294.4) 503.5 SILVER SPRING NE 9SI GR 506.9 (86.7) 69.5 SILVER SPRING NE SSNI US 506.9 (86.7) 69.5 SILVER SPRING NE 9SI TH 506.9 (86.7) 69.5 SUNESIS PHARMAC RYIN TH 50.6 (5.8) 15.3 SUNESIS PHARMAC RYIN GR 50.6 (5.8) 15.3 SUNESIS PHARMAC SNSS US 50.6 (5.8) 15.3 SUNGAME CORP SGMZ US 0.2 (2.0) (2.0) SUPERVALU INC SVU US 4,691.0 (1,084.0) 2.0 SUPERVALU INC SVU* MM 4,691.0 (1,084.0) 2.0 SUPERVALU INC SJ1 GR 4,691.0 (1,084.0) 2.0 SUPERVALU INC SJ1 TH 4,691.0 (1,084.0) 2.0 TAUBMAN CENTERS TCO US 3,369.8 (191.4) - TAUBMAN CENTERS TU8 GR 3,369.8 (191.4) - THRESHOLD PHARMA NZW1 GR 104.5 (25.2) 80.0 THRESHOLD PHARMA THLD US 104.5 (25.2) 80.0 TOWN SPORTS INTE CLUB US 414.5 (43.7) (14.3) TOWN SPORTS INTE T3D GR 414.5 (43.7) (14.3) TROVAGENE INC-U TROVU US 9.6 (2.5) 7.1 ULTRA PETROLEUM UPM GR 2,062.9 (441.1) (266.6) ULTRA PETROLEUM UPL US 2,062.9 (441.1) (266.6) UNISYS CORP UIS US 2,275.8 (1,536.0) 412.2 UNISYS CORP UIS1 SW 2,275.8 (1,536.0) 412.2 UNISYS CORP UISCHF EU 2,275.8 (1,536.0) 412.2 UNISYS CORP UISEUR EU 2,275.8 (1,536.0) 412.2 UNISYS CORP USY1 TH 2,275.8 (1,536.0) 412.2 UNISYS CORP USY1 GR 2,275.8 (1,536.0) 412.2 VECTOR GROUP LTD VGR US 1,069.5 (129.5) 384.8 VECTOR GROUP LTD VGR GR 1,069.5 (129.5) 384.8 VENOCO INC VQ US 695.2 (258.7) (39.2) VERISIGN INC VRS GR 2,524.8 (273.9) 312.7 VERISIGN INC VRSN US 2,524.8 (273.9) 312.7 VERISIGN INC VRS TH 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) WEIGHT WATCHERS WW6 GR 1,310.8 (1,561.1) (84.7) WEST CORP WT2 GR 3,462.1 (819.5) 338.0 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 XOMA CORP XOMA GR 76.9 (16.9) 46.5 XOMA CORP XOMA TH 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 ***