/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131002.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 2, 2013, Vol. 17, No. 273 Headlines 30DC INC: Delays Form 10-K for Fiscal 2013 91 LLC: Voluntary Chapter 11 Case Summary ABERDEEN LAND: Aberdeen CDD and US Bank Ask Court for Stay Relief AGFEED USA: Can Access Farm Credit's Cash Collateral Until Jan. 10 AGFEED USA: Nov. 12 General Bar Date for Filing of Proofs of Claim AGFEED USA: Equity Committee Can Retain EG as Co-Counsel AGFEED USA: AgFeed Industries Can Employ L&W as Special Counsel AMERICAN AIRLINES: U.S. Challenges Theories on Document Turnover AMERICAN AIRLINES: Bondholders Seek Rehearing on Make-Whole Appeal AMERICAN AIRLINES: US Airways Flight Attendants to Push for Merger AMERICAN MEDIA: Inks Exchange Agreement with Note Holders ANCHOR BANCORP: Ch. 11 Plan Declared Effective ARCAPITA BANK: Eyes New Investments after First Gulf Chapter 11 ATLANTIC COAST: James Hogan Named Director & Interim CFO AVIATION SERVICES: Files for Chapter 11 Protection in Guam BELLE FOODS: Rouses Markets Acquires Six Stores in Alabama BERNARD L. MADOFF: Picard Won't Distribute $1.38BB Pending Appeal BG MEDICINE: Fails to Comply with NASDAQ's $1 Bid Price Rule BILL BARRETT: S&P Lowers CCR to 'B+' on Slower Oil Growth BRODY MINING: Section 341(a) Meeting Set on November 4 BURLINGTON COAT: S&P Puts 'B-' CCR on CreditWatch Positive CAESARS ENTERTAINMENT: Relocated Ferris Wheel to Frame Debt Talks CAPITOL BANCORP: Panel Sues to Block Purchase of D&O Insurance CAPITOL BANCORP: Oct. 16 Hearing on Adequacy of Plan Outline CAPITOL BANCORP: Seeks Estimation of Certain Shareholders' Claims CNH INDUSTRIAL: Moody's Assigns 'Ba1' CFR; Outlook Stable COLOREP INC: Industrial Printer Still Has No Buyer COMPETITIVE TECHNOLOGIES: ASC Recap Had 9% Stake at Sept. 16 COMPLETE LANDSCAPING: Case Summary & 20 Top Unsecured Creditors COUNTRYWIDE FINANCIAL: Whistle-Blower Says U.S. Talks Spurred Suit CUMULUS MEDIA: To Sell $100 Million of Class A Shares DAVIS IRON: Case Summary & 20 Largest Unsecured Creditors DETROIT, MI: Fitch Lowers ULTGOs, LTGOs Bonds Rating to 'D' DEWEY & LEBOEUF: 450 Ex-Partners Sued for $1.6MM Over Broken Lease DOGWOOD PROPERTIES: Court Approves Disclosure Statement EAST END: Court Confirms Plan, Amalgamated Wins Auction EASTMAN KODAK: $63-Mil. in Fees for 200+ Attorneys ENERGY FUTURE: Second-Lien Notes Rally Before Coupon Payment EVERGREEN INTERNATIONAL: Moody's Withdraws All Ratings FAMILY FOUR: Case Summary & 7 Unsecured Creditors FIRST SECURITY: Completes $5 Million Rights Offering FLORIDA GAMING: Shareholders Invited to Join Equity Committee FOOD CORPORATION: Voluntary Chapter 11 Case Summary FR UTILITY: S&P Assigns 'B' CCR & Rates $185MM Loan 'B+' FRESH & EASY: Files Bankruptcy to Finish Burkle Sale FRESH & EASY: Meeting to Form Creditors' Panel Set for Oct. 9 FURNITURE BRANDS: KPS Capital Has $280 Million Rival Proposal GATEHOUSE MEDIA: Mulls Six-Week Sojourn in Chapter 11 GATEHOUSE MEDIA: Moody's Cuts PDR to D-PD Over Bankruptcy Filing GELTECH SOLUTIONS: Incurs $5.2 Million in Fiscal 2013 GENERAL MOTORS: Old GM Cuts Nova Scotia Debt Claims to $1.55B GFI COMMERCIAL: Bankruptcy Court Orders on Meyer Fees Upheld GROEB FARMS: Files Voluntary Chapter 11 Bankruptcy Petition HAWKEYE ENTERTAINMENT: Case Summary & 9 Top Unsecured Creditors HERITAGE INT'L: Case Summary & 14 Largest Unsecured Creditors HI-LO SALES: Voluntary Chapter 11 Case Summary HOUSTON REGIONAL: Creditors Seek to Force Bankruptcy JACKSONVILLE BANCORP: Appoints New Directors to Board Committees JJC INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors JOHN CARRIS: FINRA Seeks Cease-and-Desist Order Over Fraud JS HOLDINGS: Voluntary Chapter 11 Case Summary KEYWELL LLC: Titanium-Scrap Supplier Sets Dec. 2 Auction LANDAUER HEALTHCARE: Creditors Squeeze More From Buyer Quadrant LEVEL 3 COMMUNICATIONS: Fitch Affirms 'B' Issuer Default Rating LINC USA: S&P Withdraws 'B-' CCR on Lack of Sufficient Information LIGHTSQUARED LP: Dish Network Sued Over $1-Bil. Debt Purchases LIGHTSQUARED INC: Court OKs Expense Reimbursement for LBAC, MAST LIGHTSQUARED INC: Has Agreement With Lenders on Auction Process LILY GROUP: Section 341(a) Meeting Scheduled for Nov. 1 LIME ENERGY: Promotes Adam Procell to President and COO MEDICURE INC: Incurs C$2.6 Million Net Loss in Fiscal 2013 MIDSTATES PETROLEUM: S&P Affirms 'B' CCR & Revises Outlook MIDVALE PARK: Voluntary Chapter 11 Case Summary MORGANS HOTEL: Issues 439,309 Common Shares to NorthStar Capital MOTORS LIQUIDATION: To Settle Nova Scotia Litigation MPG OFFICE: Merger Agreement "Outside Date" Extended to Oct. 15 MSD PERFORMANCE: Unsecured Creditors Target Cash-Collateral Motion MSD PERFORMANCE: Panel Opposes Fast Sale of Racing-Parts Business NET TALK.COM: Taps Zachary Salum as New Accountants NEOMEDIA TECHNOLOGIES: Stockholders Reject Reverse Stock Split NESBITT PORTLAND: 2 Hilton Units Still Oppose Second Amended Plan NESBITT PORTLAND: Can Employ Jones Lang as Real Estate Broker NEW CENTURY FIN'L: Bid for Borrowers Committee Denied NEW YORK OPERA: Expected to File for Bankruptcy NORTHCORE TECHNOLOGIES: Begins Trading on NEX Exchange NUVERRA ENVIRONMENTAL: Wolf Haldenstein Files Class Action OCLARO INC: Grant Thornton Raises Going Concern Doubt OLYMPIC HOLDINGS: Chapter 11 Case Dismissed ORCHARD SUPPLY: Seeks Extension of Lease Decision Deadline ORMET CORP: Seeks Longer Exclusivity as Sale Not Completed OVERSEAS SHIPHOLDING: OSG Gets Court OK to Revise BP Contract OVERSEAS SHIPHOLDING: Can Hire Venable as Litigation Counsel OXFORD BUILDING: Driveway Maintenance & DDR Suits Remanded PACIFIC RUBIALES: Petrominerales Acquisition Credit Neutral PANACHE CUISINE: Payment of Belair PACA Claim Blocked PARADE PLACE: Case Summary & 20 Largest Unsecured Creditors PATRIOT COAL: Panel Can Retain H5 to Provide Expert Search Svcs. PATRIOT COAL: Peabody, Arch Dodge Coal Miners' Suit Over Spinoff PATRIOT COAL: Judge Tosses Union's Suit over Retiree Benefits PATRIOT CORP: Peabody Must Produce Requested Documents by Oct. 31 PATRIOT CORP: Court Okays Settlement Agreement with ACE Companies PENSACOLA BEACH: Has Bankruptcy Case Dismissed PENSON WORLDWIDE: Court Dismisses GTP1's Chapter 11 Case PENTON BUSINESS: S&P Hikes 1st Lien Credit Facility to 'B+' PENTON OPERATING: Moody's Revises First Lien Debt Rating to 'B1' PETTERS COMPANY: Fallout Continues Five Years Later PLC SYSTEMS: Barry Honig Held 6.7% Equity Stake at Sept. 23 PLY GEM HOLDINGS: Presented at Zelman Housing Summit PMI GROUP: Emerges From Bankruptcy Protection PONTIKI COAL: Excel Issues WARN Notices to Mining Complex Workers PPL MONTANA: S&P Affirms 'BB+' Rating & Revises Outlook to Stable PRESIDENTIAL REALTY: Bank Takes Possession of Hato Rey Property PRIME PROPERTIES: Files Ch. 11 Plan and Disclosure Statement PROGRESSIVE SOLUTIONS: S&P Assigns 'B' CCR; Outlook Stable PROVIDENT FINANCING: Fitch Affirms BB+ Capital Securities Rating PROXYMED INC: Dist. Ct. Denies Kelly's Bid to Dismiss NHB Suit QUEBECOR WORLD: Trustee May Recoup $115,000 Against Binswanger RDC PROPERTIES: Case Summary & 5 Unsecured Creditors RESIDENTIAL CAPITAL: Proposes $2MM Bonus for Restructuring Officer RITE AID: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable ROSEVILLE SENIOR: Voluntary Chapter 11 Case Summary ROTECH HEALTHCARE: Emerges From Bankruptcy Owned by Noteholders SARKIS INVESTMENTS: Court OKs Baker Hostetler as General Counsel SHARP ELECTRONICS: S&P Affirms & Withdraws 'B+' Rating SYNCREON GROUP: Moody's Assigns 'B2' CFR; Outlook Negative ST. JOSEPH HEALTH: Fitch Keeps 'CCC' Bond Rating on Watch Positive STOCKTON, CA: Discloses Some Details on Debt-Adjustment Plan SYNCREON GROUP: S&P Rates $625MM Seenior Secured Facility 'B' T.C. CUISINE: Voluntary Chapter 11 Case Summary TPF II LC: S&P Rates $370MM Senior Secured Facilities 'BB-' TRIMAS CORP: Moody's Hikes CFR to 'Ba2'; Outlook Stable UNITED REFINING: S&P Raises Rating on 10.5% Secured Notes to 'BB-' UNITED RENTALS: Good Performance Cues Moody's to Lift CFR to B1 UTILITY SERVICES: $215MM Sr. Debt Facility Gets Moody's B3 Rating VV HOSPITALITY: Case Summary & 16 Largest Unsecured Creditors WILLIAM LYON: Rising Profits Prompt Moody's to Raise CFR to B3 * Moody's: Gov't Payment Delays Could Weaken Defense Contractors * Joel Zweibel, Retired O'Melveny Bankruptcy Lawyer, Dies at 78 * Chapter 13 Plan Can Be Binding on Trustee * State Turnover Order Doesn't Terminate Exempt Status * Judicial Estoppel Doesn't Bar Undisclosed Lawsuit * Canada Bankruptcies Increase 3.7% in July From June * Bankruptcy Court to Limp Along Initially, Chief Judge Says * Upcoming Meetings, Conferences and Seminars ********* 30DC INC: Delays Form 10-K for Fiscal 2013 ------------------------------------------ 30DC, Inc., was unable without unreasonable effort and expense to prepare its accounting records and schedules in sufficient time to allow its accountants to complete their review of the Company's financial statements for the period ended June 30, 2013, before the required filing date for the subject annual report on Form 10-K. The Company intends to file the subject Annual Report on Form 10-K on or before the thirtieth calendar day following the prescribed due date. About 30DC Inc. New York-based 30DC, Inc., provides Internet marketing services and related training to help Internet companies in operating their businesses. It operates in two divisions, 30 Day Challenge and Immediate Edge. 30DC's annual report for the fiscal year ended June 30, 2012, shows net income of $32,207 on $2.91 million of total revenue as compared with a net loss of $1.44 million on $1.89 million of total revenue the year before. As of Sept. 30, 2012, the Company had $2.25 million in total assets, $2.41 million in total liabilities and a $166,465 total stockholders' deficiency. Marcum LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has a working capital deficit and stockholders' deficiency as of June 30, 2012. 91 LLC: Voluntary Chapter 11 Case Summary ----------------------------------------- Debtor: 91 LLC 2929 East Camelback Road, Suite 118 Phoenix, AZ 85016 Case No.: 13-51535 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Debtor's Counsel: Scott M. Charmoy, Esq. CHARMOY & CHARMOY 1261 Post Road P.O. Box 804 Fairfield, CT 06824 Tel: (203) 255-8100 Fax: 203-255-8101 Email: scottcharmoy@charmoy.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by Michael Peloquin, manager. The Debtor did not file its list of largest unsecured creditors when it filed its petition. ABERDEEN LAND: Aberdeen CDD and US Bank Ask Court for Stay Relief ----------------------------------------------------------------- Aberdeen Community Development District (the "CDD") and U.S. Bank National Association, as trustee under that certain Master Trust dated as of Oct. 1, 2005, by and between Aberdeen Community Development District and the Trustee, ask the U.S. Bankruptcy Court for the Middle District of Florida for relief from the automatic stay to allow them to proceed with all rights and remedies, including but not limited to rescheduling a foreclosure sale on the single asset real estate owned by Aberdeen II, LLC. As grounds for cause, Movants submit that this bankruptcy case was filed in bad faith under the factors considered by the Eleventh Circuit in In re Phoenix Piccadilly, Ltd., 849 F.2d 1393, 1394 (11th Cir. 1988). The preliminary hearing on the Joint Motion for Relief from Automatic Stay is scheduled for Oct. 21, 2013, at 1:30 p.m. According to papers filed with the Court, the Debtor's Property is subject to special assessments levied by the CDD pursuant to chapters 170, 190, and 197, Fla. Stat. for the construction and development of infrastructure and improvements related to the Property and surrounding community, including but not limited to operation and maintenance assessments to fund the CDD. Based on information derived from the Debtor's schedules, as of the Petition Date, the CDD Liens secure debts exceeding $23.7 million. The Movants relate that on or around Dec. 3, 2010, the CDD commenced actions to foreclose the CDD Liens on the Property in the Circuit Court for the Seventeenth Judicial Circuit in and for St. Johns County, Florida Actions"). Foreclosure sales of the Property were scheduled in the Foreclosure Actions for July 2, 2013 (the "Foreclosure Sales"), one day after the Petition Date. According to the Movants, the Debtor filed the Bankruptcy Petition not only to avoid the Foreclosure Sales, but also to use financing obtained with a security interest on the CDD's collateral to pay an equity contribution to Aberdeen Portfolio, LLC (in full, plus post-petition interest) and a mortgage lien (held by BBX Capital Asset Management, LLC, which lien could have been released prior to the Debtor's assumption) that were both obtained without consideration and for the sole purpose of artificially creating an accepting impaired class to cramdown the treatment of the CDD lien. A copy of the Motion is available at: http://bankrupt.com/misc/aberdeen.doc.59.pdf About Aberdeen Land II Aberdeen Land II, LLC, doing business as Aberdeen, owns a 1,316-acre master- planned community near Jacksonville, Florida. The project is designed for 1,623 single-family homes and 395 multi-family units. More than 1,000 units have been sold, leaving Aberdeen with 856 undeveloped lots and 28.1 acres zoned for commercial or residential use. Aberdeen filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04103) on July 1, 2013, in Jacksonville, Florida. The Debtor has tapped Genovese Joblove & Battista, P.A., as counsel, Kapila & Company as accountant, Kellerhals Ferguson Fletcher Kroblin, PLLC, as special counsel, and Fishkind & Associates as expert consultants. Aberdeen owes $24 million in bonds that financed the project and more than $20 million to secured lenders with mortgages on the property. In its amended schedules, the Debtor disclosed $41,165,861 in assets and $31,189,704 in liabilities as of the petition date. AGFEED USA: Can Access Farm Credit's Cash Collateral Until Jan. 10 ------------------------------------------------------------------ Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware approved the second amendment to the final order authorizing AgFeed USA, LLC, et al., to use cash collateral of Lenders Farm Credit Services of America, PCA, and Farm Credit Services of America, FLCA. The Debtors' authority to use Cash Collateral will automatically expired on the earlier of (i) Jan. 10, 2014, at 11:59 p.m., or (ii) regardless of whether the Debtors have expended the entire amount set forth in the Budget, the failure by the Debtors to comply with any provision of the Final Order as amended by the First Amendment to Final Order, or the occurrence of any Event of Default. The previously agreed sale milestones are revised to provide that on or before Sept. 13, 2013, (i) the Debtors will have closed the sale transaction pursuant to the Successful Bid and will have paid to the Prepetition Lenders all available cash over $5,000,000 (the "Pay Down Amount"), but in no event will the Pay Down Amount be less than $48 million; (ii) the Debtors will have obtained a Second Amendment to Final Order that provides for a payment of Lenders' claims in full on or before Dec. 20, 2013. A full-text copy of the Second Amendment to Final Order, dated Sept. 13, 2013, is available for free at: http://bankrupt.com/misc/AGFEEDUSA_cash coll_order.pdf A full-text copy of the Final Order, dated Aug. 1, 2013, is available for free at: http://bankrupt.com/misc/AGFEEDUSA.doc104.pdf 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. AGFEED USA: Nov. 12 General Bar Date for Filing of Proofs of Claim ------------------------------------------------------------------ Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware has established Nov. 12, 2013, at 4:00 p.m. as the General Bar Date for the filing of Proofs of Claim against AgFeed USA, LLC, et al. The General Bar Date also applies to Claims arising under section 503(b)(9) of the Bankruptcy Code. The Governmental Bar Date is Jan. 13, 2014, at 4:00 p.m. The Bar Date for any Entity holding a Rejection Damages Claim arising from the rejection of an executory contract or unexpired lease pursuant to an order entered prior to the confirmation of a Chapter 11 Plan will be the later of either (i) the General Bar Date, (ii) 4:00 p.m. on the date that is 30 days after entry of an order approving the rejection of an executory contract or unexpired lease pursuant to which the Entity asserting the Rejection Damages Claim is a party, or (iii) such other date at the Court may establish. 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. AGFEED USA: Equity Committee Can Retain EG as Co-Counsel -------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware has granted the Official Committee of Equity Security Holders of AgFeed USA, LLC, et al., permission to employ and retain Elliott Greenleaf as co-counsel to the Equity Committee, nunc pro tunc to Aug. 23, 2013. As reported in the TCR on Sept. 18, 2013, EG professionals who will take a primary role in representing the Equity Committee and their hourly rates are: Rafael X. Zahralddin-Aravena, Esq. rxza@elliottgreenleaf.com $610 Shelley A. Kinsella, Esq. sak@elliottgreenleaf.com $450 Eric M. Sutty, Esq. ems@elliottgreenleaf.com $450 Jonathan M. Stemerman, Esq. jms@elliottgreenleaf.com $375 Aurelia X. Lyles $225 Sandra I. Collazo, Esq. $225 Ian D. Densmore, Esq. $225 Jennifer L. Ford, Esq. $225 The firm will also be reimbursed for any necessary out-of-pocket expenses. Mr. Zahralddin-Aravena, a shareholder, director and chair of the bankruptcy department of the Wilmington Office in the firm of Elliott Greenleaf, in Wilmington, Delaware, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Equity Committee's. 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. AGFEED USA: AgFeed Industries Can Employ L&W as Special Counsel --------------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware has authorized AgFeed Industries, Inc., to employ Latham & Watkins LLP as the Debtor's special counsel, nunc pro tunc to the Petition Date. The hearing to consider the Application solely as it relates to the proposed retention of L&W to represent the individual defendants in the Securities Class Action will be continued to Sept. 30, 2013, at 10:00 a.m. L&W will provide these services: (a) continuing representation of the Debtor, as well as the individuals who did not receive Wells Calls in the SEC Investigation; b) assisting the individuals receiving Wells Calls in the SEC Investigation in connection with the transition to separate counsel; and (c) continuing representation of the Debtor in the Securities Class Action. As reported in the TCR on Sept. 4, 2013, the firm's rates are: Billing Category Range of Hourly Rates ---------------- --------------------- Partners $830-$1200 Senior Counsel $820-$1020 Associate $395-$825 Paralegal & Analyst $170-$615 Project Assistant $190-245 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. Challenges Theories on Document Turnover ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports AMR Corp. and US Airways Group Inc. have no right to demand information from interviews conducted before the U.S. Justice Department sued to bar the two airlines from merging, the government said in court papers filed late last week. The airlines said they are entitled to factual information the government developed in deciding not to challenge prior airline mergers. The airlines also want facts the government learned in pre-lawsuit interviews in the process of deciding whether there would be so much concentration as to constitute a violation of antitrust law. According to the report, with regard to prior mergers, the Justice Department said that "no court has ever ordered similar disclosures by federal antitrust enforcement officials." The government likewise contended there's no difference between "factual analyses" and "legal analyses." Both categories, the U.S. said, are protected from disclosure "because they were prepared in the course of an active investigation focusing on specific events." Demands for facts learned in interviews have "been directly rejected in recent antitrust enforcement actions," the government said in its filing. The U.S. pointed to a decision by the federal appeals court in Washington as having ruled that "parties cannot request facts contained in witness interview notes instead of the notes or memoranda themselves." The report notes that the document dispute will be decided by former Washington Superior Court Judge Richard A. Levie, who was appointed by the district judge to serve as special master. His rulings will be final unless he decides they are of sufficient gravity for review by the judge presiding over the antitrust suit. The antitrust trial begins in late November. If they win, the two airlines will be free to merge under the Chapter 11 plan for AMR, the parent of American Airlines. The bankruptcy judge is scheduled to sign a confirmation order this week formally approving AMR's plan. The report relates that AMR's plan can't be implemented unless the antitrust suit is defeated. AMR's stock has been rising following a three-day plunge after the government sued. From $5.81 a share just before the suit, the stock dropped to $2.57 in three days' trading. It has risen since then, closing on Sept. 27 at $4.37, up 2 cents in over-the-counter trading. Trading for 40 cents in October, the stock rose to $1.30 before the merger was announced in February and marked a post bankruptcy high of $6.85 on May 16. 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) AMERICAN AIRLINES: Bondholders Seek Rehearing on Make-Whole Appeal ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. has two more hurdles to surmount before being assured of the right to pay the remainder of $1.2 billion in aircraft bonds without a "make-whole" premium coming due if the debt was repaid before maturity. According to the report, last week the bondholders filed papers asking all active judges on the U.S. Court of Appeals in Manhattan to review a decision by a three-judge panel of the court on Sept. 12 that concluded the make-whole isn't owed when the parent of American Airlines emerges from bankruptcy reorganization. To keep aircraft standing as collateral for the bondholders, AMR was required to promise under Section 1110(a) of the Bankruptcy Code to perform "all obligations" under the loan documents. The three- judge panel combined Section 1110(a) and language in the loan documents to conclude that the make whole isn't owed. The report notes that in last week's papers, the bondholders contended the panel misread Section 1110(a). They said the case is entitled to reexamination by a full court, known as an en banc re-argument, because it "involves a question of exceptional importance to the aircraft financing industry." They contended that aircraft loans will be more costly and less available unless the panel's opinion is reversed. The New York appeals court is noted for being reluctant to allow en banc rehearings. There's no set period within which the appeals court decides whether to allow argument again. All judges on the circuit court will be given the bondholders' papers in deciding if rehearing is justified. The report relates that if the appeals court won't allow another argument, the bondholders have the right to ask the U.S. Supreme Court to allow an appeal. The loans being paid early call for interest at rates of 8.6 percent to 13 percent. AMR has said replacement debt would bear interest comparable to the 4 percent to 4.75 percent other major airlines recently negotiated. The report discloses that with the bankruptcy court's permission, AMR conducted a tender offer in which holders of 26.7 percent of the bonds involved in the appeal agreed by the August deadline to take more than par, although less than that would have been owed were the make-whole enforceable. The appeal is U.S. Bank Trust NA v. AMR Corp., 13-1204, U.S. Court of Appeals for the Second Circuit (Manhattan). 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) AMERICAN AIRLINES: US Airways Flight Attendants to Push for Merger ------------------------------------------------------------------ US Airways Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA), continue to advocate for the vast opportunities created by a US Airways/American Airlines merger as the Texas Attorney General formally withdrew from the Department of Justice lawsuit seeking to block what will become the world's largest airline. Roger Holmin, AFA President at US Airways, made the following statement: "Tuesday's move by the Texas Attorney General recognizes what constituents in the state and across the nation have been saying: the US Airways/American merger is right for our country and it is right for US Airways and American Airlines workers. "We are grateful for the support of Texas State Senator Wendy Davis who has continued to fight for Flight Attendants and other employees through this process. Additionally, we are thankful for the backing of several key members of the Texas congressional delegation as well as prominent mayors across the state of Texas for continuing to support a merger that provides the opportunity for good jobs. "A US Airways/American merger would simply put the new American on par with other airlines, creating real competition in the process and real opportunities for workers. Communities served by the merged airline will gain access to greater service across a massive network of routes. Without a strong competitor like the merged US Airways and American, current mega-carriers will only expand their market dominance. "In this lawsuit, DOJ risks destroying the only merger that has a chance of competing against carriers large and small in order to protect consumers. AFA will continue to push back against any strategy that leaves our American and American Eagle colleagues in limbo, languishing in bankruptcy. "This combination is the first merger that includes the key role of employees. It signals job security and contract improvement opportunities for the combined Flight Attendant workforce. This provides a positive outlook for airline workers for the first time in over a decade." The Association of Flight Attendants ? http://www.afacwa.org-- is the world's largest Flight Attendant union. Focused 100 percent on Flight Attendant issues, AFA has been the leader in advancing the Flight Attendant profession for 68 years. Serving as the voice for Flight Attendants in the workplace, in the aviation industry, in the media and on Capitol Hill, AFA has transformed the Flight Attendant profession by raising wages, benefits and working conditions. Nearly 60,000 Flight Attendants come together to form AFA, part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. AMERICAN MEDIA: Inks Exchange Agreement with Note Holders --------------------------------------------------------- American Media, Inc., entered into an exchange agreement with holders of approximately $94.3 million aggregate principal amount of the Company's existing 13 1/2 percent second lien notes. These holders will exchange their existing second lien notes for a new series of 10 percent second lien notes with a payment-in-kind feature. As a result, AMI is expected to save approximately $12 million per year in cash interest payments over the next three years, and AMI has agreed to use this savings to repurchase its first lien bonds. In addition, the holders have agreed to support certain additional exchange transactions in the future, under certain circumstances. David J. Pecker, chairman, president and CEO of AMI, said, "This exchange will reduce total debt and allow us to further invest in digital opportunities and rapidly growing media products, including Shape, Men's Fitness and our new book publishing venture. It will also increase AMI's financial flexibility." Mr. Pecker further commented: "This is a watershed event for AMI. Some of our largest bondholders are recognizing the long-term strategic plan of management, and this transaction improves our liquidity, assists in future investments and provides a path to unlock value for all stakeholders. We are pleased by the confidence investors have in AMI and believe their decision to approach us on this significant transaction underscores the extraordinary momentum of our business." The exchange agreement is expected to close next week and is subject to customary closing conditions. There can be no assurance that these transactions will occur. Additional information is available for free at: http://is.gd/FQeaCx About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media incurred a net loss of $55.54 million on $348.52 million of total operating revenues for the fiscal year ended March 31, 2013, as compared with net income of $22.29 million on $386.61 million of total operating revenues for the fiscal year ended March 31, 2012. The Company's balance sheet at June 30, 2013, showed $593.16 million in total assets, $667.12 million in total liabilities, $3 million in redeemable noncontrolling interest and a $76.95 million total stockholders' deficit. * * * As reported by the TCR on Jan. 22, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Boca Raton, Fla.- based American Media Inc. to 'CCC+ ' from 'B-'. "The downgrade conveys our expectation that continued declines in circulation and advertising revenues will outweigh the company's cost reductions, resulting in deteriorating operating performance, rising debt leverage, and thinning discretionary cash flow," said Standard & Poor's credit analyst Hal Diamond. ANCHOR BANCORP: Ch. 11 Plan Declared Effective ---------------------------------------------- BankruptcyData reported that Anchor BanCorp Wisconsin's Prepackaged Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on August 30, 2013. "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," comments Chris Bauer, president & C.E.O. for AnchorBank. Bauer came out of retirement in 2009 to lead the recapitalization effort, which included reorganizing and recruiting a new senior management team. According to documents filed with the Court, "Pursuant to the Plan, the Company will discharge its senior secured credit facility with approximately $183 million in outstanding obligations for a cash payment of $49 million. In addition, the Company's TARP preferred securities with an aggregate liquidation preference and deferred dividends of approximately $139 million will be cancelled in exchange for new common equity that will represent approximately 3.3% of the pro forma equity of the reorganized Company. New equity investors will represent in the aggregate approximately 96.7% of the pro forma equity of the reorganized Company. As of July 31, 2013, the Company had 21,247,225 shares of common stock issued and outstanding, all of which will be cancelled for no consideration pursuant to the Plan of Reorganization." Also pursuant to the Plan, the Company converted from a Wisconsin corporation to a Delaware corporation in accordance with Section 265 of the Delaware General Corporation Law. In connection with Plan effectiveness, James Smessaert, Leonard Rush and Duane Morris each resigned as members of the board and all committees thereof. 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. ARCAPITA BANK: Eyes New Investments after First Gulf Chapter 11 --------------------------------------------------------------- David French, writing for Reuters, reported that Bahrain-based Arcapita is aiming to build a new asset management firm with a debut local deal in the logistics, education or healthcare sector as the company recovers from the first Chapter 11 bankruptcy process undertaken by a Gulf Arab entity. According to the report, the Islamic investment firm emerged from Chapter 11 on Sept. 17 after seeking court protection in March 2012 under hedge fund pressure ahead of the repayment of a $1.1 billion Islamic loan. Under the court-approved restructuring plan, Arcapita is to be split into two entities: one which will hold the existing company assets as they are sold down to pay creditors, with a second in charge of the process' management, the report related. It is the latter which is hoping to rebuild itself going forward, said Atif Abdulmalik, chief executive of Arcapita, with the entity aiming to raise $100 million of new equity from original Arcapita investors by January to help fund dealmaking, the report added. "Our name still carries credibility and integrity as we kept on facing our investors and shareholders even during the darkest days of Chapter 11, telling them that what happened has happened but we're not going to let you lose here," Abdulmalik told Reuters in an interview in Dubai. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf The effective date of the Debtors' Second Amended Joint Plan of Reorganization, dated as of June 11, 2013, occurred on Sept. 17, 2013, according to papers filed with the U.S. Bankruptcy Court for the Southern District of New York on Sept. 17, 2013. ATLANTIC COAST: James Hogan Named Director & Interim CFO -------------------------------------------------------- The Board of Directors of Atlantic Coast Financial Corporation appointed James D. Hogan, 68, as a director of the Company and its wholly owned subsidiary, Atlantic Coast Bank, in the class of directors with a term expiring at the Company's 2015 Annual Meeting of Stockholders. Additionally, on Sept. 25, 2013, the Board of Directors appointed Mr. Hogan as the Company's interim chief financial officer. Each of Mr. Hogan's appointment as a director and interim CFO is contingent upon receipt of regulatory non-objection from the Office of the Comptroller of the Currency and the Federal Reserve Bank of Atlanta. Prior to joining the Company, Mr. Hogan served as executive vice president and chief financial officer of Customers Bancorp, Inc. from October 2012 to August 2013, and as Customers Bank's executive vice president and director of Enterprise Risk Management from June 2010 to October 2012. From May 2005 to June 2010, he was retired and did some private consulting. From April 2001 to May 2005, Mr. Hogan was chief financial officer and executive vice president of Sovereign Bancorp, Inc. Prior to Sovereign, he was executive vice president and corporate controller of Firstar Bancorp (now US Bancorp) from October 1987 through April 2001. Mr. Hogan passed the CPA examination in 1970 and kept an active license as a Certified Public Accountant through 2005. From 1970 through 1976 he was a bank audit specialist with Coopers and Lybrand and was the Controller of The Idaho First National Bank (West One Bank) from 1976 through 1987. Mr. Hogan graduated from Miami University in 1970 with a B.S. in Accounting. Mr. Hogan will receive an annual base salary of $150,000 as well as reimbursement for his temporary living expenses in Jacksonville, Florida. As of Sept. 27, 2013, Mr. Hogan held no securities in the Company. About Atlantic Coast Jacksonville, Florida-based Atlantic Coast Financial Corporation is the holding company for Atlantic Coast Bank, a federally chartered and insured stock savings bank. It is a community- oriented financial institution serving northeastern Florida and southeastern Georgia markets through 12 locations, with a focus on the Jacksonville metropolitan area. The Company reported a net loss of $6.66 million on $33.50 million of total interest and dividend income for the year ended Dec. 31, 2012, as compared with a net loss of $10.28 million on $38.28 million of total interest and dividend income in 2011. The Company's balance sheet at June 30, 2013, showed $742.19 million in total assets, $711.02 million in total liabilities and $31.16 million in total stockholders' equity. McGladrey LLP, in Jacksonville, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations that have adversely impacted capital at Atlantic Coast Bank. The failure to comply with the regulatory consent order may result in Atlantic Coast Bank being deemed undercapitalized for purposes of the consent order and additional corrective actions being imposed that could adversely impact the Company's operations. This raises substantial doubt about the Company's ability to continue as a going concern. AVIATION SERVICES: Files for Chapter 11 Protection in Guam ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Freedom Air, serving Guam, Tinian, Rota, and Saipan, filed a petition for Chapter 11 protection on Sept. 27 in Guam, listing assets and debt both less than $10 million. According to the report, the airline has been in existence for 30 years. On two occasions in the past 20 years, aircraft were destroyed on the ground in typhoons. Service to Samoa was discontinued five years ago. The case is In re Aviation Services Ltd., 13-00113, U.S. Bankruptcy Court, District of Guam. BELLE FOODS: Rouses Markets Acquires Six Stores in Alabama ---------------------------------------------------------- Rouses Markets, one of the largest independent grocers in the South, is bringing its famous andouille, boudin, boiled crawfish and other Gulf Coast favorites to Alabama. In the next few weeks, the family-owned and operated company will take ownership of six former Belle Foods stores from Associated Wholesale Grocers, Inc. (AWG), a retail-owner cooperative of which Rouses Markets is a member. AWG and its group of grocers and operators submitted the winning bid last week at the Belle Foods bankruptcy auction in Birmingham. This is Rouses Markets' first expansion into Alabama. The company currently operates 38 stores in Louisiana and Mississippi. Three new stores in Louisiana were also recently announced. The Alabama stores are located in Mobile, Gulf Shores, Spanish Fort, Saraland and Theodore. Rouses Markets won't take possession until after the transfer to AWG is complete. "The stores will already be closed when we take ownership," said Donny Rouse, managing partner of Rouses Markets, and third-generation owner. "We're going to keep them closed while they undergo multimillion- dollar remodeling. We'll be adding in-store sausage kitchens, seafood boiling rooms and other features we're famous for." The exact reopening dates for the stores will depend on construction times. Tommy Delaune, President of Tommy's Seafood in Chalmette, said Rouses Markets' expansion into Alabama is good news for everyone. "Fishermen across the Gulf Coast are excited about this. They know what it means for them and the economy. Rouses' support keeps our Gulf Coast fishermen working." Rouses Markets was set to begin interviewing current Belle Foods employees on Oct. 1, and Mr. Rouse says he hopes everyone applies to join the Rouses' family. "The right team members, with the right training, make all of the difference in a customer's shopping experience," said Mr. Rouse. "I know people will appreciate the level of training we offer, and the commitment we make to our team members and community." Current Belle Foods employees interested in joining Rouses can also apply online at http://www.rouses.com/and e-mail human.resources@rouses.com About Rouses Markets Rouses Markets -- http://www.rouses.com-- was founded in 1960. Owned and operated by a second and third generation of the Rouse family, the Louisiana-based company has 38 locations in two states, and employs over 5,400 team members. New ground-up locations were recently announced in Lafayette, Baton Rouge and Gretna, Louisiana. Rouses Markets has been consistently voted best supermarket and best place to work. BERNARD L. MADOFF: Picard Won't Distribute $1.38BB Pending Appeal ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports customers of Bernard L. Madoff Investment Securities Inc. won't be getting $1.38 billion held aside because several creditors appealed from a ruling this month that claims can't be inflated to reflect how long someone invested in Madoff's Ponzi scheme. The report recounts that the federal appeals court in Manhattan ruled in August 2011 in the Madoff liquidation that fictitious account statements issued to customers must be disregarded in calculating claims. At the time, the appeals court didn't rule on whether claims could be increased to reflect the time-value of money. U.S. Bankruptcy Judge Burton R. Lifland handed down a decision on Sept. 10 in favor of the trustee and saying the statute allows customers to claim only cash they invested, without an interest component. According to the report, several customers filed appeals last week. Those appeals precluded Madoff trustee Irving Picard from distributing the $1.38 billion held aside in case the courts allow interest on claims. The report notes that theoretically, Mr. Picard could distribute the money because the customers didn't obtain a stay pending appeal. As a practical matter, Mr. Picard hasn't been making distributions underlying issues on appeal. If Mr. Picard loses on appeal, he would have to try to recover money he distributed to creditors. Mr. Picard's spokeswoman Amanda Remus confirmed that the trustee won't make a distribution of the $1.38 billion until the appeal is finally concluded. The report relates that in total, Mr. Picard is holding back $4.5 billion on account of various appeals and issues still in litigation. Final court rulings have allowed him to distribute $4.76 billion from the $9.5 billion he collected. Customers are also in line to receive $2.2 billion forfeit to the U.S. government. The special master has yet to make a recommendation to a federal district judge about the ground rules for distributing the $2.2 billion. The bankruptcy judge is letting the customers take a direct appeal to the U.S. Court of Appeals on the interest issue. The appeals court must agree to accelerate the appeal, however. From recoveries in lawsuits coupled with money advanced by the Securities Investor Protection Corp., Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BG MEDICINE: Fails to Comply with NASDAQ's $1 Bid Price Rule ------------------------------------------------------------ BG Medicine, Inc., received written notice from the Listing Qualifications Department of The NASDAQ Stock Market LLC notifying the Company that for the preceding 30 consecutive business days, the Company's common stock did not maintain a minimum closing bid price of $1.00 per share as required by NASDAQ Listing Rule 5450(a)(1). The notice has no immediate effect on the listing or trading of the Company's common stock and the common stock will continue to trade on The NASDAQ Global Market under the symbol "BGMD" at this time. In accordance with NASDAQ Listing Rule 5810(c)(3)(C), the Company has a grace period of 180 calendar days, or until March 24, 2014, to regain compliance with NASDAQ Listing Rule 5450(a)(1). Compliance can be achieved automatically and without further action if the closing bid price of the Company's stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period. If the Company does not achieve compliance with the Minimum Bid Price Requirement by March 24, 2014, NASDAQ will notify the Company that its common stock will be subject to delisting. If the Company receives a notice of delisting, the Company would then be entitled to appeal the NASDAQ Staff's determination to a NASDAQ Listing Qualifications Panel and request a hearing. The Company is currently considering available options to resolve the listing deficiency and to regain compliance. There can be no assurance that the Company will be able to regain compliance with The NASDAQ Global Market listing requirements. Alternatively, if at that time the Company is in compliance with the continued listing requirements for market value of publicly held shares and all other initial listing standards for the NASDAQ Capital Market other than the Minimum Bid Price Requirement, the Company could apply to transfer the listing of its common stock to The NASDAQ Capital Market and thereby receive an additional grace period to gain compliance with the Minimum Bid Price Requirement. As previously disclosed on May 17, 2013, the Company received a letter from NASDAQ notifying the Company that for the preceding 30 consecutive business days, the Company's Market Value of Listed Securities had closed below the minimum $50,000,000 requirement for continued listing on The NASDAQ Global Market, as required by NASDAQ Listing Rule 5450(b)(2)(A). The Market Value of Listed Securities Deficiency serves as an additional basis for delisting the Company's common stock from NASDAQ, in addition to the Minimum Bid Price Deficiency. The Company is currently considering available options to resolve these listing deficiencies and to regain compliance. About BG Medicine Waltham, Mass.-based BG Medicine is a diagnostics company focused on the development and commercialization of novel cardiovascular diagnostic tests to address significant unmet medical needs, improve patient outcomes and contain healthcare costs. The Company is currently commercializing two diagnostic tests, the first of which is the BGM Galectin-3 test, a novel assay for measuring galectin-3 levels in blood plasma or serum for use as an aid in assessing the prognosis of patients diagnosed with heart failure. The Company's second diagnostic test is the CardioSCORE test, which is designed to identify individuals at high risk for near-term, significant cardiovascular events, such as heart attack and stroke. In its annual report for the period ended Dec. 31, 2012, the Company said: "We expect to incur further losses in the commercialization of our cardiovascular diagnostic test and the operations of our business and have been dependent on funding our operations through the issuance and sale of equity securities. These circumstances may raise substantial doubt about our ability to continue as a going concern." BG Medicine reported a net loss of $23.8 million in 2012, compared with a net loss of $17.6 million in 2011. The Company's balance sheet at June 30, 2013, showed $18.32 million in total assets, $14.32 million in total liabilities and $3.99 million in stockholders' equity. BILL BARRETT: S&P Lowers CCR to 'B+' on Slower Oil Growth --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Denver-based Bill Barrett Corp. to 'B+' from 'BB-'. The outlook is stable. At the same time, S&P lowered the issue-level rating on Bill Barrett's senior unsecured debt to 'B' (one notch below the corporate credit rating) from 'B+'. The recovery rating on this debt remains '5', indicating S&P's expectations for modest (10% to 30%) recovery for creditors in the event of a default. The downgrade reflects S&P's revised expectations for BBG's oil production growth and profitability for the remainder of 2013 and 2014. Although BBG is essentially spending 100% of its capital on oil projects, results have come in below expectations in the Uinta Basin and the ramp up of activity has been slower than expected in the D-J Basin, leading S&P to revise downward its oil production estimates for 2013 and 2014. S&P now expects that oil production will grow 30% in 2013, compared with its earlier projections of 50%-55%, and S&P is expecting a similar growth rate in 2014. As a result of lower oil volumes, S&P has lowered its expectations for profitability improvement next year. S&P now expects leverage will approach 4x at the end of 2014, which is above the appropriate level for a 'BB-' rating given Bill Barrett's "weak" business risk profile. "The stable outlook reflects our view that BBG will continue to expand its oil production and reserves, while maintaining leverage at about 4x," said Standard & Poor's credit analyst Carin Dehne- Kiley. S&P could lower its rating if it expects leverage to exceed 4.5x for a sustained period, which would most likely be due to capital spending exceeding S&P's estimates or a large debt-financed acquisition. S&P also assumes potential asset sales will not materially reduce leverage over a sustained period. While S&P considers an upgrade unlikely near term, it would consider raising the rating if BBG were able to increase its scale, improve unhedged profitability and maintain leverage below 3.5x. BRODY MINING: Section 341(a) Meeting Set on November 4 ------------------------------------------------------ A meeting of creditors in the bankruptcy case of Brody Mining, LLC, and Patriot Ventures, LLC, will be held on Nov. 4, 2013, at 10:00 a.m. at U.S. Trustee Meeting Room, Suite 6.365A. Creditors have until Oct. 24, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Brody Mining, LLC, and Patriot Ventures, LLC, filed Chapter 11 petitions (Bankr. E.D. Mo. Case Nos. 13-48727 and 13-48728) on Sept. 23, 2013. The petitions were signed by Jacquelyn A. Jones, secretary. Bryan Cave, LLP, serves as the Debtors' counsel. Blackstone Advisory Partners, L.P., acts as the Debtors' financial advisor. AP Services, LLC, is the Debtors' restructuring advisor. GCG, INC., serves as the Debtors' claims, notice, and administrative agent. Ernst & Young, LLP, is the Debtors' independent auditors. BURLINGTON COAT: S&P Puts 'B-' CCR on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B-' corporate credit rating and all other ratings on Burlington, N.J.- based Burlington Coat Factory Warehouse Corp. on CreditWatch with positive implications. "The CreditWatch placement follows our view that Burlington Stores Inc., (the parent of Burlington Coat Factory Warehouse Corp., Burlington Holdings LLC, and Burlington Finance Inc.) is likely to complete an IPO shortly. According the company's S-1 filing on Sept. 27, 2013, the company would use approximately $170.6 million of the proceeds to repay the senior notes due 2018 issued by Burlington Holdings LLC and Burlington Holdings Finance Inc.," said credit analyst David Kuntz. "We forecast that this debt reduction coupled with performance gains during the second half of 2013 would strengthen the company's credit protection measures. Pro forma the transaction, S&P expects leverage to be below 6.0x, interest coverage to be in the low-2.0x area, and funds from operations to total debt in the low teens." S&P expects to resolve the CreditWatch listing once the IPO is completed. Before resolving the CreditWatch, S&P will assess the final capital structure following the IPO and account for potential changes to the company's use of proceeds. CAESARS ENTERTAINMENT: Relocated Ferris Wheel to Frame Debt Talks ----------------------------------------------------------------- Michael Bathon at Bloomberg News reports Caesars Entertainment Corp. may be bolstering its negotiating position in a potential debt restructuring by relocating a giant Ferris wheel on paper. The largest owner of U.S. casinos, which is controlled by Apollo Global Management LLC and TPG Capital, is borrowing as much as $4.92 billion to refinance mortgage debt and a loan linked to a Las Vegas luxury tower and 550-foot (168-meter) observation wheel. According to the report, as part of that transaction, the properties would shift from a unit that Moody's Investors Service said has an unsustainable debt load to a higher-rated division. That may disadvantage creditors of Caesars Entertainment Operating Co. by cleaving assets from the unit, which Moody's predicts may attempt to restructure its $18 billion of obligations within two years. The parent company has been chipping away at its debt load since taking on a total of almost $24 billion after a 2008 leveraged buyout. The report notes that shifting the assets "does improve the coercive position of the company," said Chris Snow, a New York- based analyst at debt-research firm Credit Sights Inc. As part of a transaction aimed at repaying more than $4 billion of mortgage debt maturing in 2015, Caesars is shifting ownership of properties including the High Roller wheel to Caesars Entertainment Resort Properties as it refinances a $450 million secured loan linked to the assets, according to a Sept. 18 regulatory filing. That may remove about $74 million in potential annual earnings from the operating unit. The report relates that the company's bonds have plunged more than 10 percent since it disclosed the transaction on Sept. 17, the biggest drop among distressed borrowers tracked by the Bank of America Merrill Lynch U.S. Distressed High Yield index. The report says the company's $3.31 billion of 10 percent, second- lien notes due in 2018 declined to 52.25 cents on the dollar on Sept. 27 before ending the week at 54 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That compares with an average trading level of 63 cents over the past year. With both bondholders and Caesars probably motivated to avoid bankruptcy, the falling prices may boost the company's power to influence the terms of an alternative restructuring, Mr. Snow said. 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. CAPITOL BANCORP: Panel Sues to Block Purchase of D&O Insurance -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Capitol Bancorp Ltd., et al., initiated an adversary proceeding against the Debtors, asking the Court to: i. enjoin the Debtors from transferring any assets of their estates, without Court authorization, for the purpose of purchasing any directors and officers liability insurance policy; ii. enter a mandatory injunction requiring the Debtors to take any steps necessary to recover assets of the estate already transferred without Court authorization for the purpose of purchasing any directors and officers liability insurance policy; and iii. grant the Committee other relief as the Court deems just and equitable. The Committee noted that, among other things, although the Debtor's estates only possess approximately $1.15 million in cash, the Debtors entered into a transaction to spend $1.06 million to purchase D&O liability insurance and a banker's bond without seeking authorization from the Court. Upon information and belief, the Debtors paid approximately $900,000 for the D&O Policy and approximately $160,000 for the Banker's Bond, for a combined price of $1,060,000. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP, represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. Prepetition, the Debtor arranged a reorganization plan that was accepted by the requisite majorities of creditors and equity holders in all classes. Problems arose when affiliates of Valstone Partners LLC declined to proceed with a tentative agreement to fund the reorganization by paying $50 million for common and preferred stock while buying $207 million in face amount of defaulted commercial and residential mortgages. CAPITOL BANCORP: Oct. 16 Hearing on Adequacy of Plan Outline ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation adjourning until Oct. 16, 2013, at 10:30 a.m., the hearing for final approval of the Disclosure Statement and confirmation of Capitol Bancorp Ltd., et al.'s Chapter 11 Plan. The stipulation entered between the Debtors and the Official Committee of Unsecured Creditors, also provides for the extension of the deadline for (i) the Committee and (ii) each of the individual members of the Committee, Manufacturers and Traders Trust Company, as trustee, an affiliate of a member of the Committee, and the ad hoc group of senior noteholders, to file and serve any objections. Objections, if any, are due Oct. 1, 2013. The extended objection deadline will apply only to the Committee and the individual creditors. As reported in the Troubled Company Reporter, citing BankruptcyData, on Sept. 26, 2013, G3 Properties lodged an objection to the Amended Joint Liquidating Plan and related Disclosure Statement for Capitol Bancorp. According to the objection, "The Plan improperly proposes to permanently enjoin the Investors from continuing the State Court Litigation. In addition, the Plan contains exculpation, release and indemnification provisions which, in their current form, violate the Bankruptcy Code and should therefore be revised in order to narrow their scope. Finally, the Plan fails to provide adequate information that would permit creditors, including the Investors, to make an informed decision with respect to the Plan and the consequences thereof." As reported in the July 25, 2013 edition of the TCR, Capitol Bancorp's Joint Liquidating Plan that is premised on the Debtors commencing a competitive sale process to sell and convey each of their remaining non-debtor subsidiary banks, individually or in groups. At any time prior to, or during, the sale process, the Debtors may convert from a liquidation to a reorganization. A full-text copy of the Amended Plan dated July 17, 2013, is available for free at: http://bankrupt.com/misc/CAPITOLBANCORPplan0717.pdf About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP, represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. Prepetition, the Debtor arranged a reorganization plan that was accepted by the requisite majorities of creditors and equity holders in all classes. Problems arose when affiliates of Valstone Partners LLC declined to proceed with a tentative agreement to fund the reorganization by paying $50 million for common and preferred stock while buying $207 million in face amount of defaulted commercial and residential mortgages. CAPITOL BANCORP: Seeks Estimation of Certain Shareholders' Claims ----------------------------------------------------------------- E. Todd Sable, Esq., at Honigman Miller Schwartz and Cohn LLP, on behalf of Capitol Bancorp Ltd., et al., ask the U.S. Bankruptcy Court for the Eastern District of Michigan (1) to estimate claims of certain shareholders of Capitol Development Bancorp Limited VIII for purposes of temporary allowance for voting on the Amended Joint Liquidating Plan of Capitol Bancorp Ltd. and Financial Commerce Corporation; and (2) to strike the plan ballot cast "derivatively" on behalf of Capitol Development Bancorp Limited VIII. The Debtors request that the Court grant the estimation motion and enter an order: (i) estimating and temporarily allowing, in the amount of $1 each, for purposes of voting on the Plan only, the claims of each of the Plaintiffs in the G3 Properties Action, with the exception of CDBL VIII, who may have otherwise timely and properly cast ballots on the Plan; (ii) striking the Plan ballot cast on behalf of CDBL VIII "derivatively" by the other Plaintiffs in the G3 Properties Action and ordering that such ballot will not be taken into account with respect to tabulation of ballots on the Plan or confirmation of the Plan; and (iii) granting such further and other relief as is appropriate in the circumstances. In essence, the plaintiffs, which are shareholders of CDBL VIII, have alleged in a multi-count Third Amended Complaint in the G3 Properties Action that the individual defendants caused a purportedly unauthorized transfer of $6,000,000 to be made from CDBL VIII to CBC without requisite approval of all shareholders of CDBL VIII. The plaintiffs in the G3 Properties Action are: a) G3 Properties, LLC, a Michigan limited liability company; b) Steven Samuel Glander; c) John Iannucci Family Trust Dtd. 10/17/2000, John Iannucci, Trustee; d) Angelo Iannucci; e) The Kenneth A. & Debbie A. Kefalas Family Trust Dtd. 5/31/2006, Kenneth A. & Debbie A. Kefalas, Trustees; f) Benjamin W. Post, Jr; g) Seifman Family Trust Dtd. 5/12/1994, Bill and Sara Seifman, Trustees; h) Henry B. Soloway 1991 Irrevocable Family Trust Dtd. 1/22/91, Albert L. Bardier, Trustee; and i) Capitol Development Bancorp Limited VIII ("CDBL VIII"), a Michigan corporation, is a nominal Plaintiff, in that the other Plaintiffs have asserted certain claims "derivatively" on its behalf. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP, represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. Prepetition, the Debtor arranged a reorganization plan that was accepted by the requisite majorities of creditors and equity holders in all classes. Problems arose when affiliates of Valstone Partners LLC declined to proceed with a tentative agreement to fund the reorganization by paying $50 million for common and preferred stock while buying $207 million in face amount of defaulted commercial and residential mortgages. CNH INDUSTRIAL: Moody's Assigns 'Ba1' CFR; Outlook Stable --------------------------------------------------------- Moody's Investors Service assigned a Ba1 Corporate Family Rating and a Ba1-PD Probability of Default Rating to CNH Industrial NV. CNH Industrial is the successor of Fiat Industrial S.p.A and CNH Global N.V. following the merger of Fiat Industrial and CNH Global with and into CNH Industrial. As a result of the transaction Moody's withdrew the Ba1 CFR, Ba1-PD PDR and Not-Prime short-term ratings of Fiat Industrial, as well as the Ba2 CFR, Ba2-PD PDR and SGL-3 Speculative Grade Liquidity ratings of CNH Global. The following rating actions were taken for entities that had been subsidiaries of CNH Global and Fiat Industrial, but are now subsidiaries of CNH Industrial: Case New Holland Inc. (a holding company): senior unsecured debt to Ba1 from Ba2 based on guarantee from CNH Industrial and various operating subsidiaries. CNH America LLC (an operating company): senior unsecured debt to Ba1 from Ba2 based on guarantee from CNH Industrial. CNH Capital LLC (a holding company): senior unsecured debt to Ba1 from Ba2 based on support agreement from CNH Industrial and guarantees from its operating subsidiaries. Fiat Industrial Finance Europe S.A. (a funding conduit): affirmed at Ba2 based on guarantee from CNH Industrial. Fiat Industrial Finance North America, Inc. (a funding conduit): affirmed at (P)Ba2 based on guarantee from CNH Industrial. The outlook for all ratings is stable. CNH Industrial's pro-forma 2012 revenues were EURO 25 billion with the following segment distribution: agricultural equipment - 45%; trucks - 33%; construction equipment - 11%; and powertrain - 11%. The company's financial services operations had a total managed portfolio of retail and wholesale receivables of approximately EURO 18.5billion. Ratings Rationale: The Ba1 CFR of CNH Industrial reflects the favorable long-term demand fundamentals in the global farm equipment market, the company's increasingly competitive position in this sector, and the broad global footprint of its farm equipment business. The farm equipment business has also made considerable progress in improving its operations efficiencies and return measures, and strengthening its dealer system. However, these strong fundamentals are tempered by weakness in the European truck market and the introduction of the Euro V emission standards in the Brazilian truck market. CNH's construction equipment markets have bottomed out following the unprecedented downturn of 2009/2010. The company has significantly reduced construction equipment production capacity, breakeven performance was generated during 2012, and Moody's expects that demand will gradually improve. Consequently, the construction equipment operations will represent less of a drag on overall performance than in the past. The upgrade of Case New Holland Inc., CNH America LLC, and CNH Capital LLC's senior unsecured debt to Ba1 (equivalent with the Ba1 CFR of CNH Industrial) reflects: improving performance of the farm equipment operations; downstream guarantees from the ultimate holding company parent, CNH Industrial; the status of CNH America as an operating company; and upstream guarantees provided by various operating subsidiaries in the case of Case New Holland Inc. and CNH Capital. The debt of Fiat Industrial Finance Europe S.A. and Fiat Industrial Finance North America, Inc. benefit only from the downstream guarantee from its holding company parent -- CNH Industrial; the notes do not have upstream guarantees from any operating subsidiaries. Consequently, the notes are rated Ba2 (one notch below the Ba1 CFR). As of June 30, 2013, the principal liquidity sources available to CNH Industrial consist of approximately EUR3.7 billion in cash & cash equivalents (thereof around EUR0.5 billion cash restricted for ABS transactions), undrawn long-term revolving credit facilities of EUR1.6 billion (with a comfortable headroom under its financial covenants) as well as good operating cash flow generation. These sources should provide good coverage for the major liquidity requirements that could arise during the next twelve months. These requirements include short-term bank and other debt maturities of around EUR3.9 billion as well as capital expenditures and potential dividend payments. The majority of CNH's liquidity requirements arise from the ongoing funding needs of its financial service operations. Although the financial service operation remains heavily dependent on the ABS market to fund retail and wholesale originations, it has made considerable progress in strengthening its liquidity profile and funding flexibility by accessing the unsecured debt market and of the establishing multi-year committed ABS funding conduits. A critical factor in ongoing assessment of CNH Industrial will be the company's commitment to maintaining prudent underwriting standards and liquidity support for its financial service operations. At this juncture, Moody's rating does not assume that CNH Industrial will be required to support Fiat S.p.A.'s (Ba3/Negative) liabilities outstanding at the time of the demerger as a consequence of the existing joint liability pursuant of the Article 2506-quarter of the Civil Code. In case of a further deterioration of Fiat S.p.A.'s credit profile however, this joint liability, which has already been reduced considerably by the progressive expiration of the debt outstanding at the time of the demerger, could weigh negatively on Fiat Industrial's ratings. For the twelve months June, 2013 the pro-forma performance of CNH Industrial reflected the following metrics (essentially the same metrics of those of the now-dissolved Fiat Industrial): EBITA margin - 6.8%; EBIT/interest - 2.9x; and, debt/EBITDA - 3.0x. The stable outlook reflects the favorable demand fundamentals and strong competitive position in CNH Industrial's farm equipment sector, balanced against the operating challenges and margin pressure posed by the truck and construction equipment sectors. The stable outlook also anticipates that the company will maintain a prudent liquidity profile. An upgrade of the ratings could be considered if CNH Industrial can maintain its positive momentum in the farm equipment sector and if restructuring initiatives can moderate the margin pressure caused by the weakness in the truck sector. Metrics that could support a higher rating include: EBITA margins approximating 8%; EBIT/interest expense of 4.0x; and debt/EBITDA below 3.0x. Downward rating pressure could arise if the company is unable to sustain the recent improvements in the group's operating and credit metrics. This would be evidenced by: EBITA margins that below 6%; EBIT/interest expense approximating 2.5x; and debt/EBITDA above 3.5x. The principal methodology used in this rating was the Global Heavy Manufacturing Rating Methodology published in November 2009, The Rating Relationship Between Industrial Companies And Their Captive Finance Subsidiaries Methodology published in May 2012, and the Finance Company Global Rating Methodology published in March 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. COLOREP INC: Industrial Printer Still Has No Buyer -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Colorep Inc., filed a petition for Chapter 11 protection in July in Los Angeles and arranged for an auction in September. With no offers by the Sept. 18 deadline for preliminary bids, the auction was canceled. According to the report, the company said in a court filing that it's in talks with two potential buyers, Fuller Smith Capital Management LLC and Meserole LLC. Meserole is the secured lender owed $17 million, according to a prior court filing. It also received court approval in August to finance the bankruptcy exercise. At the end of August, Meserole gave Fuller Smith the role of agent on the bankruptcy financing and transferred its interest in the loan itself to an affiliate of Fuller Smith. The report notes that Meserole retained a limited partnership interest in the loan, according to a court filing. Colorep licenses a fabric-dyeing process known as AirDye. Subsidiary Transprint USA Inc. also filed in Chapter 11. It produces transfer-printing paper. Colorep Inc., an industrial printer from Harrisonburg, Virginia, filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 13-27689) on July 10, 2013, in Los Angeles, owing $17 million to secured lender Meserole LLC. The company licenses a fabric-dyeing process known as AirDye. Colorep's subsidiary Transprint USA Inc. also filed in Chapter 11. Transprint produces transfer-printing paper. Stutman, Treister & Glatt, P.C. represents Colorep as reorganization counsel while Stubbs, Alderton & Markiles LLP serves as special corporate counsel. Meserole, LLC, is represented by Frank T. Pepler, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US). COMPETITIVE TECHNOLOGIES: ASC Recap Had 9% Stake at Sept. 16 ------------------------------------------------------------ In a Schedule 13G filed with the U.S. Securities and Exchange Commission, ASC Recap LLC disclosed that as of Sept. 16, 2013, it beneficially owned 1,618,235 shares of common stock of Competitive Technologies, Inc., representing 9.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/FzvLsJ About Competitive Technologies Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX: CTTC) -- http://www.competitivetech.net/-- was established in 1968. The Company provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. Sales of the Company's Calmare(R) pain therapy medical device continue to be the major source of revenue for the Company. Competitive Technologies incurred a net loss of $3 million on $546,139 of gross profit from product sales in 2012, as compared with a net loss of $3.59 million on $1.86 million of gross profit from product sales in 2011. As of June 30, 2013, the Company had $4.47 million in total assets, $9.78 million in total liabilities and a $5.31 million total shareholders' deficit. Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman McCann P.C.), in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that at Dec. 31, 2012, the Company has incurred operating losses since fiscal year 2006. These conditions raise substantial doubt about the Company's ability to continue as a going concern. COMPLETE LANDSCAPING: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Complete Landscaping Systems, Inc. 1727 E 2nd St Wichita, KS 67214 Case No.: 13-12530 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court District of Kansas (Wichita) Judge: Hon. Dale L. Somers Debtor's Counsel: David P Eron, Esq. ERON LAW, P.A. 229 E. William, Suite 100 Wichita, KS 67202 Tel: 316-262-5500 Fax: 316-262-5559 Email: david@eronlaw.net Total Assets: $1.46 million Total Liabilities: $6.14 million The petition was signed by Laura Ackerman, authorized individual. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ksb13-12530.pdf COUNTRYWIDE FINANCIAL: Whistle-Blower Says U.S. Talks Spurred Suit ------------------------------------------------------------------ Patricia Hurtado, writing for Bloomberg News, reported that a former official at Bank of America Corp.'s Countrywide unit said he went to federal authorities and filed a whistle-blower lawsuit after learning the government might settle with the lender. According to the report, Edward O'Donnell, who now works for Fannie Mae, said he contacted the office of Manhattan U.S. Attorney Preet Bharara in February 2012 after reading in news accounts that the Justice Department was considering settling with large U.S. banks accused of selling bad mortgages to government- sponsored enterprises, or GSEs. In a complaint filed that month under the False Claims Act and unsealed eight months later, O'Donnell alleged that Countrywide Financial Corp. issued defective mortgages under its "High Speed Swim Lane" program, or HSSL, and then sold them to Fannie Mae and Freddie Mac, the report recalled. The U.S. later joined the suit and the trial, which began Sept. 24 in federal court in New York. "The government didn't have any information about the HSSL and the fact that loans had been sold to the GSEs and others such as Fannie Mae and Freddie Mac that clearly didn't qualify as quality investment grade," O'Donnell testified on Sept. 28, the report related. "They weren't aware of it, so no one had been held accountable." The U.S. alleges that under the HSSL program, Countrywide boosted profits by "benching" underwriters and replacing them with inexperienced "loan specialists" who were forced to meet quotas and ignore quality control, the report said. The case is U.S. v. Countrywide Financial Corp., 1:12-cv-01422, U.S. District Court, Southern District of New York (Manhattan). About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. CUMULUS MEDIA: To Sell $100 Million of Class A Shares ----------------------------------------------------- Cumulus Media Inc. intends to offer up to $100 million of its Class A common stock, par value $0.01 per share. The Company intends to use the net proceeds from the sale of the Class A common stock for general corporate purposes, which may include, among other things, repayment of debt, capital expenditures, the financing of possible business expansions and acquisitions, increasing the Company's working capital and the financing of ongoing operating expenses and overhead. The Company's Class A common stock is listed on the NASDAQ Global Select Market under the symbol "CMLS." The last reported sale price of the Company's Class A common stock on Sept. 27, 2013, was $5.35 per share. A copy of the Form S-3 is available for free at: http://is.gd/gr4B6N About Cumulus Media Founded in 1998, Atlanta, Georgia-based Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest operator of radio stations, currently serving 110 metro markets with more than 525 stations. In the third quarter of 2011, Cumulus Media purchased Citadel Broadcasting, adding more than 200 stations and increasing its reach in 7 of the Top 10 US metros. Cumulus also acquired the Citadel/ABC Radio Network, which serves 4,000+ radio stations and 121 million listeners, in the transaction Cumulus Media said in its annual report for the year ended Dec. 31, 2011, that lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) in 2011 after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting operated radio stations in Missouri and Texas. As of June 30, 2013, the Company had $3.69 billion in total assets, $3.35 billion in total liabilities, $72.87 million in total redeemable preferred stock, and $262.92 million in total stockholders' equity. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." As reported by the TCR on April 3, 2013, Moody's Investors Service downgraded Cumulus Media, Inc.'s Corporate Family Rating to B2 from B1 and Probability of Default Rating to B2-PD from B1-PD. The downgrades reflect Moody's view that the pace of debt repayment and delevering will be slower than expected. Although EBITDA for 4Q2012 reflects growth over the same period in the prior year, results fell short of Moody's expectations. DAVIS IRON: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Davis Iron Works Operations, Ltd. aka Davis Iron Works, Inc. dba Davis Steel Services 224 North Hewitt Drive Hewitt, TX 76643 Case No.: 13-60878 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Western District of Texas (Waco) Judge: Hon. Ronald B. King Debtor's Counsel: David C. Alford, Esq. PAKIS, GIOTES, PAGE & BURLESON 400 Austin Ave., Ste. 400 P. O. Box 58 Waco, TX 76703-0058 Tel: 254-297-7300 Fax: 254-297-7301 Email: alford@pakislaw.com Total Assets: $2.84 million Total Liabilities: $3.28 million The petition was signed by Joe Ed Williams, president of Davis Iron Works, Inc., GP. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb13-60878.pdf DETROIT, MI: Fitch Lowers ULTGOs, LTGOs Bonds Rating to 'D' ----------------------------------------------------------- Fitch Ratings has downgraded to 'D' from 'C' the following Detroit, Michigan ratings: -- Approximately $411 million unlimited tax general obligation (ULTGO) bonds; -- Approximately $202.8 million limited tax general obligation (LTGO) bonds. The 'D' rating indicates failure to make payment of principal and/or interest under the contractual terms of the rated obligation. Fitch takes this action in response to the city's publicly announced intention to default on the scheduled interest payments on limited and unlimited tax general obligation bonds due on Oct. 1, 2013. DEWEY & LEBOEUF: 450 Ex-Partners Sued for $1.6MM Over Broken Lease ------------------------------------------------------------------ Law360 reported that a landlord hit 450 former partners of now- defunct Dewey & LeBoeuf LLP with a lawsuit in New York state court on Sept. 25, claiming a 1989 lease for the firm's Manhattan office makes the partners personally liable for default on at least $1.6 million in unpaid rent. According to the report, the lawsuit, brought by 1301 Properties Owners LP, says the lease was signed with Dewey as the successor- in-interest to Dewey Ballantine Bushby Palmer & Wood, and that it was last amended in 2008 and set to expire in 2020. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DOGWOOD PROPERTIES: Court Approves Disclosure Statement ------------------------------------------------------- Judge Jennie D. Latta of the U.S. Bankruptcy Court for the Western District of Tennessee approved the second amended disclosure statement explaining Dogwood Properties, G.P.'s Amended Chapter 11 Plan and scheduled a pretrial conference on confirmation of the Plan for Dec. 4, 2013, at 10:00 a.m. Nov. 23 is the last day for filing written objections to the Plan and for filing written acceptances of rejections of the Plan. The deadline for Independent Bank; RREF RB Acquisitions, LLC; Merchants & Farmers Bank; Renasant Bank; and Orion Federal Credit Union to file elections by Section 1111(b) of the Bankruptcy Code is extended through Oct. 23. According to the Second Amended Disclosure Statement, the Plan provides that the Debtor continue operating under existing management. The Plan provides that claims will be paid from future operations and the collection of rents. The Plan provides for the payment of claims. Certain Secured Creditors have indicated that they may make an election to be treated as fully secured pursuant to Section 1111(b)(2) of the Bankruptcy Code. The Plan provides for two alternative treatments for these classes, one that assumes that the election is not made and one assuming the election is made. The Tennessee Department of Revenue filed a priority claim relating to Dogwood Properties, LLC, and the Debtor is reviewing the claim to determine if it is disputed. The Debtor is currently not aware of any other material claims which it disputes or intends to dispute. Brad Rainey, individually, will remain the president of the Debtor. The Debtor's property will be managed by Reed & Associates and members of the Debtor's staff. A copy of the Second Amended Disclosure Statement is available for free at http://bankrupt.com/misc/DOGWOOD_PROPERTIES_2ds.pdf About Dogwood Dogwood Properties, G.P., owns and operates 110 single-family rental homes, all located in Shelby and DeSoto counties in Tennessee. The total value of its real estate holdings is estimated to be $9,985,000. Dogwood has nine secured lenders who are owed a total of approximately $14,486,000. Dogwood Properties filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21712) on Feb. 16, 2013. Judge Jennie D. Latta presides over the case. Russell W. Savory, Esq. at Gotten, Wilson, Savory & Beard, PLLC, serves as the Debtor's counsel. EAST END: Court Confirms Plan, Amalgamated Wins Auction ------------------------------------------------------- Judge Robert E. Grossman of the U.S. Bankruptcy Court for the Eastern District of New York on Sept. 27, 2013, confirmed East End Development, LLC's Third Amended Chapter 11 Plan of Reorganization as modified. Judge Grossman also approved the results of the auction sale where Amalgamated Bank is the successful bidder. As previously reported by The Troubled Company Reporter, the Plan proposes a 84% to 100% recovery for the Amalgamated Secured Claim; 100% recovery for Allowed Mechanic's Liens; 100% recovery for Allowed Priority Claims; 5% to 100% recovery for General Unsecured Claims; and 0% recovery for Equity Interests. A copy of Third Amended Plan Modified at July 3, 2014, is available for free at: http://bankrupt.com/misc/EASTEND_ModPlanJul3.PDF About East End Development East End Development, LLC, the owner of a 90% completed condominium in Sag Harbor, New York, filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-76181) in Central Islip, New York, on Oct. 12, 2012. Tracy L. Klestadt, Esq., at Klestadt & Winters LLP, in New York, N.Y., represents the Debtor in its restructuring efforts. Edifice Real Estate Partners, LLC serves as its construction consultant. The Debtor disclosed $27,300,207 in assets and $35,344,416 in liabilities in its schedules. John E. Westerman, Esq., and Mike M. Hennessey, Esq., at Westerman Ball Ederer Miller & Sharfstein, LLP, in Uniondale, N.Y., represents lender Amalgamated Bank as counsel. EASTMAN KODAK: $63-Mil. in Fees for 200+ Attorneys -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co.'s 19-month bankruptcy reorganization costs more than $63 million, or about $3.3 million a month, for more than 200 attorneys. According to the report, Sullivan & Cromwell LLP, chief bankruptcy counsel for Rochester, New York-based Kodak, filed papers last week seeking final approval of fees covering the photography pioneer's Chapter 11 case, which began in January 2012 and concluded this month. Partners devoted 25,500 hours to the case, at a total cost of $25.9 million. Associates billed almost 54,000 hours, for $33.7 million in time charges. The New York-based firm's top rate was $1,150 an hour. A partner admitted to practice nine years ago was included among those charging the highest rate. Associates don't come cheap either. The firm charges $550 an hour for a lawyer admitted to the bar two years ago. The report notes that a non partner with seven years' experience billed at $875 an hour. In total, about 215 S&C lawyers billed time to Kodak, including 62 partners, 130 associates and 22 lawyers known as counsel. Combining partners and associates, S&C's average hourly rate was almost $750. A hearing to approve the fees is set for Nov. 19. Beginning in November, the Justice Department's Chapter 11 watchdogs, known as U.S. Trustees, will require law firms in bankruptcy cases to reveal what they collect in non-bankruptcy engagements, so the court can compare the charges. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August 20, 2013. Kodak and its affiliated debtors officially emerged from bankruptcy protection on Sept. 3, 2013. Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek Smith became members of Kodak's new board of directors as of Sept. 3, 2013. Existing directors James V. Continenza, William G. Parrett and Antonio M. Perez will continue their service as members of the new board. ENERGY FUTURE: Second-Lien Notes Rally Before Coupon Payment ------------------------------------------------------------ Michael Bathon at Bloomberg News reports that Energy Future Holdings Corp.'s second-lien notes have rallied by the most in four months during the past three days, signaling that traders expect the electricity provider headed toward a pre-negotiated bankruptcy will make a $46 million payment due Oct. 1. According to the report, the power generator's $1.23 billion of 15 percent bonds due in April 2021 have climbed 3.75 cents since Sept. 25 to 22.25 cents on the dollar as of 2:57 p.m. Sept. 30 in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The payment "could be a catalyst for the long-awaited restructuring," CreditSights Inc. analysts Andy DeVries and Charles Johnston wrote in a note dated Sept. 29. "At this point, near-term loan and bond prices are being driven by behind-the- scenes negotiations that we are not privy to." Texas's largest electricity provider, formerly known as TXU Corp., has struggled since a record 2007 leveraged buyout left it with more than $40 billion of debt in a gamble natural gas prices would rise. Prices plunged 70 percent from a July 2008 high. The report notes that creditors are working on a prearranged bankruptcy plan to reduce debt at the company, which was taken private by KKR & Co., TPG Capital and Goldman Sachs Capital Partners for $48 billion. Lenders turned down an initial proposal advanced by the company, according to an April 15 regulatory filing. The electricity provider has to make $270 million of coupon payments Nov. 1. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Restructuring Talks With Creditors In April 2013, Energy Future Holdings Corp., Energy Future Competitive Holdings Company, Texas Competitive Electric Holdings Company LLC, and Energy Future Intermediate Holding Company LLC confirmed in a regulatory filing that they are in restructuring talks with certain unaffiliated holders of first lien senior secured claims concerning the Companies' capital structure. The Companies expect to continue to explore all available restructuring alternatives to facilitate the creation of sustainable capital structures for the Companies and to otherwise attempt to address the Creditors' concerns with the Restructuring Proposal and Sponsor Proposal. The Companies have retained Kirkland & Ellis LLP and Evercore Partners to advise the Companies with respect to the potential changes to the Companies' capital structure and to assist in the evaluation and implementation of other potential restructuring options. The Creditors have retained Paul, Weiss, Rifkind, Wharton & Garrison LLP and Millstein & Co., L.P. to advise the Creditors and to assist in the Creditors' evaluation of potential restructuring options involving the Companies. According to a Wall Street Journal report, people familiar with the matter said Apollo Global Management LLC, Oaktree Capital Management, Centerbridge Partners and GSO Capital Partners, the credit arm of buyout firm Blackstone Group LP, all hold large chunks of Energy Future Holdings' senior debt. Many of these firms belong to a group being advised by Jim Millstein, a restructuring expert who helped the U.S. government revamp American International Group Inc. According to the Journal, people familiar with Apollo's thinking said Apollo recently enlisted investment bank Moelis & Co. for additional advice to ensure it gets as much attention as possible on the case given its large debt holdings. EVERGREEN INTERNATIONAL: Moody's Withdraws All Ratings ------------------------------------------------------ Moody's Investors Service has withdrawn all of its ratings assigned to Evergreen International Aviation, Inc. The following ratings have been withdrawn: the Ca Corporate Family rating, the Ca-PD Probability of Default rating, the Caa2 first lien senior secured rating, the Ca second lien senior secured rating and the negative outlook. Upon the restatement of the company's credit agreements earlier this year, the requirement for it to be rated was removed. Moody's has withdrawn the rating for its own business reasons. FAMILY FOUR: Case Summary & 7 Unsecured Creditors ------------------------------------------------- Debtor: Family Four Partners, Ltd. 116 E. Front Street Tyler, TX 75702 Case No.: 13-60772 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Eastern District of Texas (Tyler) Debtor's Counsel: Ty Beard 100 Independence Place, Suite 101 Tyler, TX 75703 Tel: 903-509-4900 Fax: 903-509-4908 Email: admin@beardandharris.com Total Assets: $1.6 million Total Liabilities: $1.04 million The petition was signed by David M. Fender, partner. A list of the Debtor's 7 largest unsecured creditors is available for free at http://bankrupt.com/misc/txeb13-60772.pdf FIRST SECURITY: Completes $5 Million Rights Offering ---------------------------------------------------- First Security Group, Inc., the bank holding company for FSGBank, N.A., completed the previously announced rights offering, which expired at 5:00 p.m. Eastern Time on Sept. 20, 2013. The Company received gross proceeds of approximately $5 million from the rights offering and issued 3,329,234 shares of Company common stock in connection with the rights offering. The rights offering was for shareholders of record as of April 10, 2013, who were provided the right to purchase two shares of Company common stock for every share owned as of the record date, as well as the opportunity to request additional shares of Company common stock, if available. The subscription price was $1.50 per share. The Company intends to use the net proceeds from the rights offering to supplement the capital of FSGBank. Raymond James & Associates, Inc., acted as dealer manager for the Company in the rights offering. About First Security Group First Security Group, Inc., is a bank holding company headquartered in Chattanooga, Tennessee, with $1.2 billion in assets as of Sept. 30, 2010. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A., has 37 full- service banking offices, including the headquarters, along the interstate corridors of eastern and middle Tennessee and northern Georgia and 325 full-time equivalent employees. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has recently incurred substantial losses. The Company is also operating under formal supervisory agreements with the Federal Reserve Bank of Atlanta and the Office of the Comptroller of the Currency and is not in compliance with all provisions of the Agreements. Failure to achieve all of the Agreements' requirements may lead to additional regulatory actions. The Company reported a net loss of $23.06 million in 2011, a net loss of $44.34 million in 2010, and a net loss of $33.45 million in 2009. As of June 30, 2013, the Company had $1.06 billion in total assets, $979.99 million in total liabilities and $86.65 million in total shareholders' equity. FLORIDA GAMING: Shareholders Invited to Join Equity Committee ------------------------------------------------------------- Following a request made by Abraham, Fruchter & Twersky, LLP the Office of the United States Trustee has invited shareholders of Florida Gaming Corporation to express their interest in serving on a committee of equity security holders in connection with Florida Gaming's recent bankruptcy filing in the United States Bankruptcy Court for the Southern District of Florida, Case No. 13-29598-RAM. Under Chapter 11 of the Bankruptcy Code, the U.S. Trustee may appoint an Equity Committee to participate in the bankruptcy proceedings and to represent the interests of all shareholders. Equity Committee membership affords interested shareholders an additional opportunity to participate in the reorganization process. An official Equity Committee is authorized by the Bankruptcy Code, subject to Bankruptcy Court approval, to select and employ an attorney and other necessary professionals. The fees of such professionals, with Bankruptcy Court approval, may be paid from available assets, if any, of the bankruptcy estate. Furthermore, actual expenses of Equity Committee members may be reimbursed from available assets. If you are a shareholder of Florida Gaming common or preferred stock and would like to express your interest in serving on an Equity Committee you must contact the U.S. Trustee at Suite 1204, 51 SW First Avenue, Miami, Florida 33130, no later than October 4, 2013. If you would like to discuss this matter, or if you have any questions concerning your legal rights, please contact: Jeffrey S. Abraham or Philip T. Taylor of Abraham, Fruchter & Twersky, LLP toll free at (800) 440-8986, or via e-mail at info@aftlaw.com or ptaylor@aftlaw.com Abraham, Fruchter & Twersky, LLP has extensive experience representing shareholders' interests and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company disclosed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Florida Gaming previously negotiated a sale of virtually all its assets to casino operator Silvermark LLC for $115 million in cash and $14 million in assumed liabilities. A provision in the financing agreement required Florida Gaming to make an additional payment to the lender -- ABC Funding -- if the assets are sold to third party. Jefferies LLC was hired to determine that amount, about $26.8 million, and valued the company at more than $180 million. Luis Salazar, Esq., Esq., at Salazar Jackson in Miami, represents Florida Gaming. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. FOOD CORPORATION: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Food Corporation International 12510 North Freeway Houston, TX 77060 Case No.: 13-36092 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Hon. Letitia Z. Paul Debtor's Counsel: Perry N Bass, Esq. Attorney at Law P O Box 52163 Houston, TX 77052 Tel: 713-839-7440 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors when it filed its petition. FR UTILITY: S&P Assigns 'B' CCR & Rates $185MM Loan 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Richmond, Va.-based FR Utility Services LLC (USL). The outlook is stable. At the same time, S&P also assigned 'B+' issue ratings and '2' recovery ratings to the company's proposed $30 million revolver and $185 million first-lien term loan. A '2' recovery rating indicates substantial recovery (70%-90%) in the event of a payment default. All ratings are subject to the transaction's close and a review of final documentation. The ratings on USL reflect S&P's assessment of the company's business risk profile as "weak" and financial risk profile as "highly leveraged." The business profile is supported by EBITDA margins of 19%-24% as a regional provider of outsourced services to electrical utilities for the maintenance of transmission, distribution, and substation infrastructure. The highly leveraged financial profile reflects the company's meaningful debt burden and ownership by a financial sponsor. S&P expects First Reserve will use the proceeds of the term loan, along with equity, to fund the acquisition of CWW, Booth, and Coastal to form USL. S&P expects the revolving credit facility will remain undrawn at closing. Pro forma for the transaction, S&P expects the company to generate positive free cash flow, with debt to EBITDA of about 4.8x (including S&P's adjustments, mainly for operating leases) for the year ended 2013. "We expect USL's credit metrics to improve modestly over the intermediate term, given our assumptions that EBITDA will improve gradually and that management will approach growth prudently," said credit analyst Nishit Madlani. The "weak" business risk profile reflects USL's position in the highly fragmented and competitive utility services industry and its limited scale and lack of geographic and end-market diversity compared to many larger peers. The company focuses primarily on providing services to only electric utilities, and its operations are concentrated in the mid-Atlantic U.S. S&P's business risk profile assessment incorporates the somewhat favorable outlook on USL's end-markets, supported by the ongoing shift over the long term by utilities toward outsourced services for electrical infrastructure construction and ongoing maintenance. S&P's base-case assumes low double-digit revenue growth in 2014, with a steady improvement in 2015 (meaningfully higher than S&P's estimates for U.S. GDP growth) based on USL's current backlog, projected maintenance spending (by electric utilities) related to aging infrastructure, and regulatory actions. Also, the company's EBITDA margins (19%-24%) are significantly higher than those for most rated entities in the engineering and construction industry and S&P expects this to continue at least over the next two to three years. S&P assumes that USL's pricing on its contracts will remain fairly steady with customers (electric utilities) that are likely to increase rates charged to consumers following capital investments related to upgrades, improvements, and new construction. In S&P's view, the company's performance should improve over the long term due to investments required to maintain, upgrade, and replace aging U.S. infrastructure, as well as increased work outsourcing by utility customers. S&P expects the company to grow through modestly sized acquisitions, but potentially larger acquisitions, which may be funded by debt, are risks to S&P's base-case forecasts. The company's cash flows benefit from the recurring maintenance work under master service agreements (MSAs) or MSA-type contracts. S&P expects more than 40% of USL's contracts to remain fixed price by structure. In general, for rated entities within the engineering and construction industry, S&P views fixed-price ontracts as more risky than cost-reimbursable work because of the possibility of cost overruns. For USL, the risk of high variability in results is somewhat mitigated by the fact that its fixed-price contracts have shorter durations (four to five months) and, therefore, the risk of wage inflation (because labor costs are the highest component of its cost structure) is relatively less compared with its larger peers. USL's operating subsidiaries have executed well on recent work to achieve favorable margins compared with industry peers, but any slowdown in utility spending, a sharp rise in wage inflation, and integration risks related to potential acquisitions will likely pose substantial risks to cash flow generation, given its limited scale and diversity. S&P views the company's financial risk profile as "highly leveraged" given that it is owned by a financial sponsor. S&P estimates leverage will remain around 4.5x-5.0x over the next two years, with free operating cash flow to total debt in the low- single digits. However, S&P's assessment incorporates the view (consistent with its criteria on companies owned by financial sponsors) that under the current ownership structure, financial policies will remain aggressive and we believe the risk of re- leveraging may preclude debt to EBITDA from remaining less than 5x on a sustained basis. S&P's stable rating outlook reflects its belief that USL will achieve positive free cash flow over the next 12 months, given the relatively favorable long-term trends in the electric utility maintenance outsourcing markets and its track record of above- average EBITDA margins. However, S&P could lower its rating if free operating cash flow generation were to become negative or if S&P believed that debt to EBITDA would trend higher than 6.0x on a sustained basis. This could occur from an unexpected decline in its maintenance business or missteps with any acquisitions. S&P considers an upgrade unlikely because it believes the company's financial risk profile will remain highly leveraged under its financial sponsors based on the company's high debt burden relative to its size and S&P's general view of financial sponsors' appetite for financial risk. FRESH & EASY: Files Bankruptcy to Finish Burkle Sale ---------------------------------------------------- Michael Bathon at Bloomberg News reports that Tesco Plc's Fresh & Easy Neighborhood Market Inc. filed for bankruptcy so it can sell itself at auction with an affiliate of billionaire Ron Burkle's Yucaipa Cos. as the lead bidder. Fresh & Easy Sept. 30 listed debt of as much as $1 billion and assets of as much as $500 million in a filing in U.S. Bankruptcy Court in Wilmington, Delaware. According to the report, Fresh & Easy blamed its failure on the economic downturn that began in 2008, especially falling real estate prices in California, Nevada and Arizona. To build the chain quickly in 2006 and 2007, the height of the U.S. real estate boom, Tesco spent $610 million. "Many of Fresh & Easy's leases are substantially above market, relative to its competitors," Fresh & Easy Chief Financial Officer James Dibbo said in an affidavit filed in court Sept. 30. "The effect of the real estate market was especially pronounced." The report notes that the company said it owes $738 million to Cheshunt, England based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, Dibbo said. Dumping Fresh & Easy after about six years cut profit by 1.2 billion pounds, Tesco said it April when it announced it was exiting the U.S. 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. Under the proposed deal, a Tesco affiliate would lend the Yucaipa affiliate $120 million to help fund the takeover. The report relates that 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. Yucaipa has agreed to take over about 150 of the markets where the company produces meals under the Fresh & Easy brand. The company employs more than 4,000 people. The report discloses that Fresh & Easy operates 167 stores in the Western U.S., 142 of which involve leases. The company also owns 61 store properties that aren't being operated and leases 36 nonoperating locations. The case is In re Fresh & Easy Neighborhood Market Inc., 13-bk- 12569, U.S. Bankruptcy Court, District of Delaware (Wilmington). FRESH & EASY: Meeting to Form Creditors' Panel Set for Oct. 9 ------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on October 9, 2013, at 10:30 a.m. in the bankruptcy case of Fresh & Easy Neighborhood Market Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. FURNITURE BRANDS: KPS Capital Has $280 Million Rival Proposal ------------------------------------------------------------- Michael Bathon at Bloomberg News reports that KPS Capital Partners LP has a $280 million purchase proposal for Furniture Brands International Inc., maker of the Broyhill, Lane and Thomasville home-furnishing lines, making it superior to an offer from Oaktree Capital Management LP, creditors said in a court filing. According to the report, the official unsecured creditors committee objected to the furniture maker's request for approval of Oaktree's so-called stalking-horse offer, which was improved from its initial bid to $260 million, and the financing that goes along with it, according to court papers filed Sept. 30 in U.S. Bankruptcy Court in Wilmington, Delaware. The creditors argue the KPS proposal brings in "significantly more value" with a $20 million higher purchase price, better terms than Oaktree's and reduced interest, fees and expenses associated with its replacement bankruptcy financing. "In short, KPS's stalking-horse proposal is vastly superior to Oaktree's revised proposal in all material respects," the creditors committee said in court documents. The report notes that both acquisition proposals include the Lane furniture brand, which Oaktree excluded in its first offer. Oaktree's latest offer contains price adjustments related to Lane that the KPS offer doesn't, the creditors claim. Procedures that would govern the sale process, including the bid deadline and an auction, as well as final approval of the bankruptcy financing are scheduled for a court hearing tomorrow. The KPS proposals to purchase the assets and provide bankruptcy financing haven't been filed with the court yet. The documents should be "filed shortly," the creditors said in court papers. About Furniture Brands Furniture Brands International (NYSE:FBN) -- http://www.furniturebrands.com-- engages in the designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/ independent retailers and mass merchant stores. Furniture Brands serves its customers through some of the best known and most respected brands in the furniture industry, including Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. On Sept. 9, 2013, Furniture Brands International, Inc. and 18 affiliated companies sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12329). Attorneys at Paul Hastings LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal North America, LLC, is the restructuring advisors. Miller Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc. dba Epiq Bankruptcy Solutions is the claims and notice agent. Furniture Brands' balance sheet at June 29, 2013, showed $546.73 million in total assets against $550.13 million in total liabilities. The company has an official creditor's committee with seven members. The creditors' panel includes the Pension Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers. GATEHOUSE MEDIA: Mulls Six-Week Sojourn in Chapter 11 ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that newspaper publisher GateHouse Media Inc. intends on being in bankruptcy reorganization no more than six weeks. The owner of 404 community publications began a prepackaged Chapter 11 on Sept. 27 after receiving no votes against the reorganization plan. At a hearing, GateHouse will propose that the bankruptcy judge in Delaware schedule a confirmation hearing on Nov. 6 for approval of the plan. According to the report, approving the plan is a two-step process. The judge must first determine that disclosure materials used before bankruptcy to solicit votes contained adequate information. Then, she will move on to the issue of whether the plan complies with bankruptcy law. The report discloses that disclosure materials given to creditors showed the stock option as representing a recovery of 36 percent to 48.5 percent, based on the estimated range for the reorganized company's enterprise value. General unsecured creditors owed $15 million will be paid in full. 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. GATEHOUSE MEDIA: Moody's Cuts PDR to D-PD Over Bankruptcy Filing ---------------------------------------------------------------- Moody's Investors Service downgraded GateHouse Media Operating, Inc.'s probability of default rating to D-PD from Ca-PD following the announcement that the company filed a prepackaged petition for relief under Chapter 11 of the U.S. Bankruptcy Code on September 27, 2013. The corporate family rating and senior secured term loan rating were affirmed at Ca. Subsequent to these actions, Moody's will withdraw the ratings of the company because of its bankruptcy filing. Issuer: GateHouse Media Operating, Inc. Probability of Default Rating, Downgraded to D-PD from Ca-PD Corporate Family Rating affirmed at Ca Senior secured term loan B -- affirmed at Ca (LGD4, 64%) Senior secured term loan C -- affirmed at Ca (LGD4, 64%) Senior secured delayed draw term loan -- affirmed at Ca (LGD4, 64%) Outlook changed to stable from negative Ratings Rationale: The downgrade of the PDR reflects the company's bankruptcy filing on September 27, 2013. The principal methodology used in this rating was Global Publishing Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. With its headquarters in Fairport, New York, GateHouse Media Operating, Inc. is one of the largest publishers of locally based print and online media (newspaper and related publications) as measured by the number of daily publications. Fortress Investment Group LLC and its affiliates beneficially own approximately 39.6% of outstanding common stock. The company recorded sales of approximately $478 million for the twelve month period ended June 30, 2013. GateHouse publishes 77 daily newspapers, 235 weekly newspapers, 91 shoppers, and six yellow page directories in addition to operating over 343 locally focused websites. GELTECH SOLUTIONS: Incurs $5.2 Million in Fiscal 2013 ----------------------------------------------------- GelTech Solutions, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $5.22 million on $526,010 of sales for the year ended June 30, 2013, as compared with a net loss of $7.13 million on $419,577 of sales for the year ended June 30, 2012. As of June 30, 2013, the Company had $968,081 in total assets, $3.23 million in total liabilities and a $2.27 million total stockholders' deficit. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has a net loss and net cash used in operating activities in 2013 of $5,221,747 and $4,195,655, respectively, and has a working capital deficit, accumulated deficit and stockholders' deficit of $556,140, $28,021,633 and $2,270,386, respectively, at June 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/sL30hu About GelTech Jupiter, Fla.-based GelTech Solutions. Inc., is a Delaware corporation organized in 2006. The Company markets four products: (1) FireIce(R), a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil2O(R) 'Dust Control', its new application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues; (3) Soil2O(R), a product which reduces the use of water and is primarily marketed to golf courses, commercial landscapers and the agriculture market; and (4) FireIce(R) Home Defense Unit, a system for applying FireIce(R) to structures to protect them from wildfires. GENERAL MOTORS: Old GM Cuts Nova Scotia Debt Claims to $1.55B ------------------------------------------------------------- Ben Moshinsky, writing for Bloomberg News, reported that Motors Liquidation Co., a trust for creditors of General Motors Co.'s old assets, cut $2.67 billion in claims to $1.55 billion in an out-of- court agreement. Terms of the settlement reached on Sept. 27 include the reduction of a $1.61 billion claim from Green Hunt Wedlake Inc. to $477 million, as well as a distribution of some General Motors stock to holders of debt issued by a Canadian unit in 2003, according to a filing with the U.S. Securities and Exchange Commission, the report related. The noteholders will be allowed a $1.07 billion unsecured claim. Motors Liquidation creditors began court-ordered mediation in June with hedge funds that held the notes issued by General Motors Nova Scotia Finance Co., the report further related. A trust sued the funds on behalf of creditors in March 2012, questioning their right to the $2.67 billion in claims. The agreement requires court approval, the report added. The Nova Scotia notes at issue were 8.375 percent notes due in 2015 and 8.875 percent notes due in 2023. General Motors Co. was raised to investment grade for the first time in eight years last week, the report further related. Moody's Investors Service upgraded Detroit-based GM to Baa3 from Ba1 on Sept. 23, citing new models for the U.S. market, strength in China and what it calculates as $31 billion of cash, including credit facilities. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. General Motors Corp. and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. GFI COMMERCIAL: Bankruptcy Court Orders on Meyer Fees Upheld ------------------------------------------------------------ CLASS B LIMITED PARTNER COMMITTEE, Appellant, v. MEYERS LAW GROUP, P.C. and MERLE C. MEYERS, Appellees, Case No. C 12-04214 SI (N.D. Calif.), is an appeal by the Class B Limited Partner Committee from three orders entered by the Hon. Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California: (1) Order Granting Motion for Orders Approving Distribution of Assets, Approving Actions of Liquidators, Approving Payments of Fees and Expenses, and Closing the Case; (2) Order Approving First and Final Application of Meyers Law Group, P.C. for Allowance of Compensation and Expenses as Former Counsel for Liquidator and Class B Limited Partner Committee; and (3) Order Denying Committee's Motion to Disallow Fees and to Require Disgorgement by Meyers Law Group, P.C. This Court has jurisdiction under 28 U.S.C. Sec 158(a). The Class B Committee's appeal of the three bankruptcy court orders presents three issues: (1) whether Meyers' firms must disgorge previously paid fees and forego presently outstanding unpaid fees if the Court finds that there was an unwaived conflict of interest; (2) whether the fees in this case are excessive; and (3) whether Meyers is entitled to collect fees for defending the fee awards. On review, District Judge Susan Illston affirmed the bankruptcy court's orders in an Aug. 29, 2013 Order available at http://is.gd/hUsHKAfrom Leagle.com. The District Court found no abuse of discretion when the bankruptcy court entered the corresponding orders. GFI Commercial Mortgage, L.P. was a partnership that owned commercial mortgages and issued bonds based on those mortgages. GFI filed for chapter 11 bankruptcy on Sept. 30, 1996. Two years later, the bankruptcy court issued an order confirming the debtor's second amended plan of reorganization. John Sampson serves as liquidator under the Plan. The Class B Partners are the remaining stakeholders in the Reorganized Debtor and the only interested parties in the distribution of the Reorganized Debtor's assets after its debt had been paid in full. The Class B Committee represents the common interests of the Class B Partners. The Committee retained Goldberg, Stinnett, Meyers & Davis in July 1998. Mr. Merle C. Meyers was a member of the Goldberg Firm and served as the Committee's primary counsel. To save costs, Mr. Meyers and the Goldberg Firm were simultaneously engaged to represent the Liquidator. Class B Limited Partner Committee is represented by David Clarke Sugar, Esq. -- csugar@mlg-pc.com , Kathy Quon Bryant, Esq. -- kquonbryant@mlg-pc.com and Merle Cooper Meyers, Esq., -- mmeyers@mlg-pc.com of Meyers Law Group, PC; as well as John G. Warner, Esq., of Law Office of John G. Warner. GFI Commercial Mortgage, LLP is represented by David Clarke Sugar, Esq., Kathy Quon Bryant, Esq., and Merle Cooper Meyers, Esq., of Meyers Law Group, PC; Robert A. Greenfield, Esq., of Stutman Treister & Glatt; and Robert E. Izmirian, Esq. of Buchalter Nemer Fields and Younger & William McGrane, McGrane LLP. John F. Sampson is represented by David Clarke Sugar, Esq., Kathy Quon Bryant, Esq., and Merle Cooper Meyers, Esq., of Meyers Law Group, PC; Elizabeth Berke-Dreyfuss, Esq., Michael D. Cooper, Esq., and Jeffrey Cliff Wurms Esq., of Wendel Rosen Black & Dean LLP; and Katherine Dolores Ray, Esq., of Goldberg, Stinnett, Davis & Linchey. The U.S. Trustee is represented in the action by Minnie Loo, Esq. of the U.S. Dept of Justice, Office of US Trustee and Stephen Lawrence Johnson, Esq., of the U.S. Attorney's Office. GROEB FARMS: Files Voluntary Chapter 11 Bankruptcy Petition ----------------------------------------------------------- Groeb Farms, Inc., a global leader in honey processing and best- in-class producer of food ingredients, industrial sweeteners and food service products, on Oct. 1 disclosed that it has reached an agreement with its lender, a private equity firm, to recapitalize the company and invest additional capital into the business. The transaction will be consummated through a plan of reorganization which was filed on Oct. 1 along with the company's voluntary Chapter 11 bankruptcy petition with the United States Bankruptcy Court for the Eastern District of Michigan. Upon confirmation of the proposed Plan, the company's debt will be restructured, and the company's capitalization will be dramatically improved. The Plan already has the support of the company's major constituents, including its pre-petition lender and certain of its subordinated debt holders. The company expects to emerge from bankruptcy within 90 days, in a stronger, financially sound position. The private equity pre-petition lender will financially support the company through the reorganization process. This lender was identified through an extensive marketing process conducted by Houlihan Lokey, an international investment banking firm. Groeb Farms CEO Rolf Richter commented, "First and foremost, we want to indicate how pleased we are to be able to recapitalize the company. We also want to assure customers, vendors, employees and all other stakeholders that the company will continue normal business operations during the reorganization process, which is expected to last approximately 90 days. This is a very desirable outcome for Groeb Farms. It allows us to restructure with strong financing in place. The bankruptcy is based on a prepackaged reorganization that releases the company from its legacy liabilities, allowing us to emerge as a strong, well-capitalized company, under new ownership, with a continued commitment to world class products and services, customer satisfaction and supply chain integrity." In conjunction with its filing, the company is seeking approval of its debtor-in-possession (DIP) financing. The DIP financing provides ample capital to successfully execute the Plan. It also provides greater liquidity such that the company expects to be able to satisfy all future customary obligations associated with the normal course of business, including employee wages and benefits and payment of post-petition obligations to vendors. About Groeb Farms Headquartered in Onsted, Mich., Groeb Farms is one of the largest honey packers in the nation. For more than 30 years, the company has provided the finest, top quality, wholesome and safe honey and related food products to industrial and retail customers as well as the American consumer. HAWKEYE ENTERTAINMENT: Case Summary & 9 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Hawkeye Entertainment, LLC 14242 Ventura Boulevard # 300 Sherman Oaks, CA 91423 Case No.: 13-16307 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Maureen Tighe Debtor's Counsel: Sandford Frey, Esq. 633 W Fifth St, 51st Fl Los Angeles, CA 90071 Tel: 213-614-1944 Email: Sfrey@cmkllp.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by Adi McAbian, member. A list of the Debtor's 9 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb13-16307.pdf HERITAGE INT'L: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Heritage International Christian Church 5312 West North Avenue Chicago, IL 60639 Case No.: 13-38553 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Janet S. Baer Debtor's Counsel: Michelle G Novick, Esq. ARNSTEIN & LEHR LLP 120 South Riverside Plaza, Suite 1200 Chicago, IL 60606 Tel: 312-876-7899 Fax: 312-876-7349 Email: mgnovick@arnstein.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by Dwight Gunn, president and CEO. A list of the Debtor's 14 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-38553.pdf HI-LO SALES: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Hi-Lo Sales, Inc. aka Hi Low Sales, Inc. dba Hi-Lo Homes dba Hi-Lo Homes, Inc. PO Box 2340 Elsa, TX 78543 Case No.: 13-70505 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Hon. Richard S. Schmidt Debtor's Counsel: Antonio Villeda, Esq. Attorney at Law 5414 N 10th St McAllen, TX 78504 Tel: 956-631-9100 Email: avilleda@mybusinesslawyer.com Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million The petition was signed by Victor Hernandez, president. The Debtor did not file a list of its largest unsecured creditors when it filed its petition. HOUSTON REGIONAL: Creditors Seek to Force Bankruptcy ---------------------------------------------------- Michael Bathon at Bloomberg News reports that creditors of Houston Regional Sports Network LP, which televises games of Major League Baseball's Astros and the National Basketball Association's Rockets, are seeking to force the broadcaster into bankruptcy. Affiliates of Comcast Corp. filed an involuntary Chapter 11 petition for the network on Sept. 27, claiming that they are owed more than $100 million, court papers show. Comcast, which owns NBCUniversal, is willing to buy the assets of the network, which have "significant value," according to partially redacted court filings. The broadcaster is a joint venture of affiliates of the Astros, Rockets and Philadelphia-based Comcast, the largest U.S. cable company. Comcast is asking the court to appoint a Chapter 11 trustee to take control of the company and oust management, with which it has reached a "debilitating deadlock" over the direction of the network, according court documents. "As a result of the impasse among the parties, the network is now insolvent." "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," the baseball team said in a statement on its website Sept. 27. The report notes that the network didn't pay the Astros media rights fees in July, August and September, according to the statement. Comcast said it "would be prepared to make a bid to acquire either the network (under a plan of reorganization) or substantially all of its assets." The report relates that Comcast said a transaction, closed by the end of the calendar year and based on the network's indebtedness, would probably pay all creditor claims and administrative expenses in full and "a material distribution to equity holders." The company said it's willing to provide financing to help fund operations during the bankruptcy. The petitioning creditors are affiliates of Comcast, and each holds a claim not subject to dispute. The report discloses that creditors can file an involuntary bankruptcy against a company if they can prove that their claims aren't in dispute as to liability or amount and that the company hasn't been paying its debts as they come due. If a company has more than 12 creditors, at least three creditors are usually required to seek to push the company into bankruptcy. The case is In re Houston Regional Sports Network LP, 13-35998, U.S. Bankruptcy Court, Southern District of Texas (Houston). JACKSONVILLE BANCORP: Appoints New Directors to Board Committees ---------------------------------------------------------------- The board of directors of Jacksonville Bancorp, Inc., previously appointed three new independent directors to the Board, John A. Delaney, William R. Klich and Terrie G. Spiro, filling three of the vacancies on the Board. At the time of their appointment, the new directors had not yet been named to serve on any committees of the Board. On Sept. 26, 2013, the Board appointed the new directors to committees of the Board as follows: (i) Mr. Delaney was appointed to the Audit Committee, the Organization and Compensation Committee, the Nominating and Corporate Governance Committee (Chairman) and the Executive Committee; (ii) Mr. Klich was appointed to the Organization and Compensation Committee and the Executive Committee; and (iii) Ms. Spiro was appointed to the Audit Committee and the Organization and Compensation Committee. About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999, and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. Jacksonville Bancorp disclosed a net loss of $43.04 million in 2012, a net loss of $24.05 million in 2011 and a $11.44 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $520.89 million in total assets, $487.47 million in total liabilities and $33.42 million in total shareholders' equity. "Both Bancorp and the Bank must meet regulatory capital requirements and maintain sufficient capital and liquidity and our regulators may modify and adjust such requirements in the future. The Bank's Board of Directors has agreed to a Memorandum of Understanding (the "2012 MoU") with the FDIC and the OFR for the Bank to maintain a total risk-based capital ratio of 12.00% and a Tier 1 leverage ratio of 8.00%. As of December 31, 2012, the Bank was well capitalized for regulatory purposes and met the capital requirements of the 2012 MoU. If noncompliance or other events cause the Bank to become subject to formal enforcement action, the FDIC could determine that the Bank is no longer "adequately capitalized" for regulatory purposes. Failure to remain adequately capitalized for regulatory purposes could affect customer confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to make distributions on our trust preferred securities, and our business, results of operation, liquidity and financial condition, generally," according to the Company's annual report for the year ended Dec. 31, 2012. JJC INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: JJC Industrial Services, Inc. Las Violetas 3C Vega Alta, PR 00692 Case No.: 13-08040 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Hon. Brian K. Tester Debtor's Counsel: Antonio I Hernandez Santiago, Esq. Antonio I Hernandez Santiago Law Office PO BOX 8509 San Juan, PR 00910-0509 Tel: 787 250-0575 Email: ahernandezlaw@yahoo.com Total Assets: $1.68 million Total Liabilities: $948,386 The petition was signed by Jorge Castro Rodriguez, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb13-08040.pdf JOHN CARRIS: FINRA Seeks Cease-and-Desist Order Over Fraud ---------------------------------------------------------- The Financial Industry Regulatory Authority (FINRA) on Sept. 30 disclosed that it has filed for a Temporary Cease-and-Desist Order against John Carris Investments, LLC (JCI) and its CEO, George Carris, to immediately halt solicitations of its customers to purchase Fibrocell Science, Inc. stock without making proper disclosures. FINRA alleges that during May 2013, JCI fraudulently solicited its customers to buy Fibrocell stock, without disclosing that during the same time period, Carris and another firm principal were selling their shares. FINRA also issued an amended complaint against JCI, Carris, and five other firm principals alleging additional fraudulent activity and securities violations. In the complaint, FINRA alleges that while JCI acted as a placement agent for Fibrocell, Carris and the firm artificially inflated the price of Fibrocell stock by engaging in pre-arranged trading and by making unauthorized purchases of Fibrocell stock in customers' accounts. FINRA also alleges that Carris and JCI fraudulently sold stock and notes in its parent company, Invictus Capital, Inc., by not disclosing its poor financial condition. In the complaint, FINRA states that JCI and Carris misled Invictus investors by paying dividends to Invictus' early investors with funds that were, in fact, generated by new sales of Invictus securities. JCI and Carris did not have any reasonable grounds to expect economic gains for Invictus investors. As of March 2013, Invictus Capital had defaulted on $2 million of Invictus notes sold to earlier John Carris Investments customers, did not have funds to repay them, and has stated that it may be required to use proceeds from its ongoing offering to make repayments. JCI continues to solicit new investments in Invictus -- an investment that FINRA alleges is wholly unsuitable. In addition, FINRA alleges that JCI issued false documentation that failed to reflect the firm's payments for Carris' personal expenses (such as tattoos, pet care and a motorcycle), and failed to remit hundreds of thousands of dollars in employee payroll taxes to the United States Treasury. Under FINRA rules, the individuals and firms named in a complaint can file a response and request a hearing before a FINRA disciplinary panel. Possible sanctions include a fine, an order to pay restitution, censure, suspension or bar from the securities industry. The issuance of a disciplinary complaint represents FINRA's initiation of a formal proceeding, in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2012, members of the public used this service to conduct about 14.6 million reviews of broker or firm records. Investors can access BrokerCheck at http://www.finra.org/brokercheckor by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. FINRA, the Financial Industry Regulatory Authority, -- http://www.finra.org-- is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complimentary compliance and technology-based services. FINRA touches virtually every aspect of the securities business -- from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. About John Carris Investments John Carris Investments -- http://johncarrisinvestments.com-- is a privately held, full service investment banking firm dedicated to providing its institutional and private clients with a wide range of investment opportunities. JS HOLDINGS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: JS Holdings, LLC 2150 N. Powder Horn Dr. Tucson, AZ 85749 Case No.: 13-17052 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Hon. Brenda Moody Whinery Debtor's Counsel: Alan R. Solot, Esq. 2701 E. Speedway STE 203 Tucson, AZ 85716 Tel: 520-299-1465 Email: arsolot@gmail.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by Jean Schoonmaker, managing member. The Debtor did not submit its list of largest unsecured creditors when it filed the petition. KEYWELL LLC: Titanium-Scrap Supplier Sets Dec. 2 Auction -------------------------------------------------------- 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 on Sept. 24 and submitted papers two days later to the bankruptcy court in Chicago proposing a sale of most of the business to Cronimet Holdings Inc., unless a better offer turns up at auction on Dec. 2. According to the report, Cronimet is offering $12.5 million in cash plus a portion of cash flow over four years from part of the business. There will be a hearing on Oct. 16 for court approval of auction and sale procedures. Keywell proposes that competing bids be due initially by Nov. 20, followed by the auction on Dec. 2 and a sale-approval hearing Dec. 4. Chicago-based Keywell has nine processing and recycling facilities that previously 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. The report relates that bankruptcy resulted from "historic lows in demand, volume and price," the company said in a court filing. After paying off a $30.3 million revolving credit earlier this year, Keywell now owes about $10.5 million on loans that rose to first-lien status. In addition to liabilities secured by equipment and machinery, Keywell owes $28 million to trade suppliers. Assets include $5.5 million in cash, $5.3 million in accounts receivable and $16 million in book value of property, plant and equipment. The case is In re Keywell LLC, 13-bk-37603, U.S. Bankruptcy Court, Northern District of Illinois (Chicago). LANDAUER HEALTHCARE: Creditors Squeeze More From Buyer Quadrant --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the creditors' committee for Landauer-Metropolitan Inc. negotiated another settlement, further increasing the distribution to unsecured creditors who had stood to recover nothing because the business is worth less than secured debt. According to the report, Landauer filed under Chapter 11 with plans for a quick sale where the first bid of $22 million would come from competitor Quadrant Management Inc. The committee negotiated a settlement in which the lenders agreed to carve out $750,000 from sale proceeds exclusively for unsecured creditors. If an auction were to raise the price above $23.5 million, unsecured creditors could get even more. The report notes that meanwhile, Quadrant acquired all of the $29 million in secured debt and was primed to make an offer to buy the business in exchange for debt. Since it appeared there would be no competing bidder, $750,000 appeared to be the maximum recovery for unsecured creditors. The committee investigated the validity of the secured claim and negotiated a second settlement, this time with Quadrant in its dual role as lender and buyer. The settlement comes up for hearing on Oct. 22 in U.S. Bankruptcy Court in Delaware. The new settlement creates a trust for unsecured creditors funded with $2.5 million supplied by Quadrant in three installments of $500,000 each by mid-December. A final $1 million will be paid in equal installments in September 2014 and 2015. The report relates that Quadrant agreed to waive its deficiency claim, thus not diluting the unsecured creditors' recovery. In addition, Quadrant isn't acquiring lawsuits and is providing $100,000 to fund litigation for the benefit of unsecured creditors. Originally, Quadrant was to buy the business through a sale before promulgation of a plan. The report discloses that Landauer will now attempt to complete the transaction by filing and securing court approval of a Chapter 11 reorganization. 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. LEVEL 3 COMMUNICATIONS: Fitch Affirms 'B' Issuer Default Rating --------------------------------------------------------------- Fitch Ratings has affirmed the 'B' Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary Level 3 Financing, Inc. (Level 3 Financing). In addition Fitch has affirmed specific issue and recovery ratings assigned to LVLT and Level 3 Financing as outlined at the end of this release. The Rating Outlook remains Positive. LVLT had approximately $8.5 billion of debt outstanding on June 30, 2013. Key Rating Drivers -- LVLT's credit profile continues to strengthen in line with Fitch's expectations. Fitch foresees LVLT leverage will approach 5.3x by the end of 2013 and 4.9x by year end 2014 as the company continues its progress to achieving its 3x to 5x net leverage target. -- The company is poised to generate sustainable levels of free cash flow (FCF - defined as cash flow from operations less capital expenditures and dividends). Fitch anticipates LVLT FCF generation during 2014 will approximate 4% of consolidated revenues. -- LVLT's revenue mix transformation is proceeding. LVLT's operating strategies are aimed at shifting its revenue and customer focus to become a predominantly enterprise-focused entity. -- The operating leverage inherent within LVLT's business model positions the company to expand both gross and EBITDA margins. The Positive Rating Outlook reflects Fitch's belief that LVLT will continue capitalizing on operating synergies captured to date (related to the Global Crossing acquisition) and expand operating margins, which in turn will position the company to generate sustainable levels of positive FCF and strengthen its credit profile during the remainder of 2013 and into 2014. LVLT's leverage has declined to 5.4x as of the latest 12 months (LTM) period ended June 30, 2013, which compares favorably with company's leverage of 5.85x as of Dec. 31, 2012 and 6.54x as of June 30, 2012. Fitch foresees LVLT leverage will move toward 5.3x by the end of 2013 and below 5x as of year-end 2014 as the company continues its progress to achieving its 3x to 5x net leverage target. Positive rating actions will likely occur as the company demonstrates that it can consistently generate positive free cash flow and maintain leverage below 5.5x. Equal consideration will be given to the company's ability to capitalize on operating cost synergies achieved to date while maintaining positive operational momentum. Evidence of positive operating momentum includes stable to expanding gross margins and revenue growth within the company Core Network Services segment. Fitch believes the company's ability to grow high margin CNS revenues coupled with the strong operating leverage inherent in its operating profile will enable the company to generate consistent levels of free cash flow. The company reported a $109 million free cash flow deficit during the LTM period ended June 30, 2013, which compares favorably to the $165 million FCF deficit reported during the year ended Dec. 31, 2012. Fitch expects that LVLT will generate a nominal amount of positive free cash flow during 2013 and that FCF generation will approximate 4% of consolidated revenues during 2014. Overall, Fitch's ratings incorporate LVLT's highly levered balance sheet, its weaker competitive position and lack of scale relative to larger and better capitalized market participants. The ratings for LVLT reflect the company's strong metropolitan network facilities position relative to alternative carriers, as well as the diversity of its customer base and service offering, and a relatively stable pricing environment for a significant portion of LVLT's service portfolio. Based largely on LVLT's strategy to invest in metropolitan facilities and carry more communications traffic on its network, the company derives strong operating leverage from its cost structure and network, enabling it to enhance margins. Additionally, Fitch expects that the company can further strengthen its operating leverage by continuing to shift its revenue and customer focus to become a predominantly enterprise- focused entity. Fitch believes that LVLT's liquidity position is adequate given the rating and is primarily supported by cash carried on its balance sheet, which as of June 30, 2013 totaled approximately $596 million. The company does not maintain a revolver and relies on capital market access to replenish cash reserves, which limits the company's financial flexibility in Fitch's opinion. LVLT does not have any significant maturities scheduled during the remainder of 2013 or into 2014. LVLT's next scheduled maturity is not until 2015 when approximately $775 million of debt is scheduled to mature or convert into equity. Rating Sensitivities What Could Trigger a Positive Rating Action -- Consolidated leverage maintained at 5.5x or lower; -- Consistent generation of positive free cash flow; -- Positive operating momentum characterized by consistent core network services revenue growth and gross margin expansion. What Could Trigger a Negative Rating Action -- Weakening of LVLT's operating profile, as signaled by deteriorating margins and revenue erosion brought on by difficult economic conditions or competitive pressure. -- Discretionary management decisions including but not limited to execution of merger and acquisition activity that increases leverage beyond 6.5x in the absence of a credible de-leveraging plan. Fitch has affirmed the following ratings with a Positive Outlook: LVLT: -- IDR at 'B'; -- Senior unsecured notes at 'B-/RR5'. Level 3 Financing, Inc.: -- IDR at 'B'; -- Senior secured term loan at 'BB/RR1'; -- Senior unsecured notes at 'BB-/RR2'. LINC USA: S&P Withdraws 'B-' CCR on Lack of Sufficient Information ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it withdrew its 'B-' corporate credit rating on Linc USA GP and its 'B-' issue-level rating on Linc Energy Finance (USA) Inc. Linc USA is a Houston- based exploration company with operations in the Gulf Coast, Wyoming, and Alaska. S&P withdrew its ratings on the company due to lack of sufficient information to perform its surveillance of its published ratings. LIGHTSQUARED LP: Dish Network Sued Over $1-Bil. Debt Purchases -------------------------------------------------------------- The Shareholders Foundation, Inc. on Sept. 30 disclosed that an investor who currently holds shares of DISH Network Corp (DISH) filed a lawsuit against Dish Network's Chairman Charlie Ergen over $1 billion debt purchases. Investors who purchased a significant amount of shares of DISH Network Corp (DISH) and currently hold any of those DISH shares, have certain options and should contact the Shareholders Foundation, Inc. by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554. The plaintiff alleges that the lawsuit was filed because of the complete failure of DISH Network's Board of Directors to withstand the domineering influence of Dish's controlling shareholder Ergen. The plaintiff says that in April 2013, Ergen completed the purchase of more than $1 billion of debt of a bankrupt wireless network company, LightSquared, L.P., which owns such spectrum licenses. Then in May, 2013, Ergen launched a personal $2 billion bid for LightSquared's spectrum assets. The plaintiff claims that the bid that directly competed with DISH Network's clear interests in bidding for these same assets. On July 23, 2013, DISH Network Corp submitted a competing $2.2 billion bid for LightSquared's assets as part of a reorganization plan that LightSquared's secured lenders, including Ergen, submitted for approval in the LightSquared bankruptcy. The plaintiff claims that if approved, DISH Network's bid ensures that Ergen will receive hundreds of millions of dollars in personal profit on his $1 billion debt purchases. On July 25, 2013, Gary Howard, an eight-year veteran of the board of directors of DISH Network, who is reported to have been a member of the quickly disbanded Special Committee that was created in connection with DISH Network's possible bid for LightSquared's spectrum assets, resigned. The plaintiff says that Mr. Howard's resignation occurred so abruptly that DISH Network was at risk of being delisted from NASDAQ for failure to comply with minimum listing requirements. On August 6, 2013, LightSquared's principal shareholder, Harbinger Capital Partners, filed a lawsuit against Dish Network Chairman and other seeking more than $2 billion in punitive and compensatory damages for an alleged fraudulent scheme to assume control of LightSquared and its valuable wireless spectrum. Those who are current long-term investors in shares of DISH Network Corp (DISH) have certain options and should contact the Shareholders Foundation, Inc. The Shareholders Foundation, Inc. is a professional portfolio legal monitoring and settlement claim filing service, which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. LIGHTSQUARED INC: Court OKs Expense Reimbursement for LBAC, MAST ---------------------------------------------------------------- U.S. Bankruptcy Judge Shelley Chapman ordered LightSquared LP to reimburse L-Band Acquisition, LLC up to $2 million for expenses it incurred in connection with the negotiation and documentation of its proposal to purchase the company's so-called "LP" assets. LightSquared's obligation to pay L-Band is entitled to administrative expense status under the Bankruptcy Code, and will not be subordinate to any other administrative expense claim against the company, according to Judge Chapman's order issued last week. L-Band, a subsidiary of Dish Network Corp., has offered to purchase the assets for $2.22 billion. Its offer will serve as the stalking horse bid at an auction to be conducted in December in accordance with the bid process proposed by a group of LightSquared's lenders. The bid process, which is subject to court approval, is part of the Chapter 11 plan proposed by the lenders for LightSquared LP and its nine affiliates. LightSquared Inc., the holding company largely owned by Philip Falcone and his investment company Harbinger Capital Partners LLC, is not included in the plan. MASTAC Fees Meanwhile, the fees and expenses incurred in connection with the stalking horse bid from MAST Spectrum Acquisition Co. LLC will also be allowed as administrative expenses, according to Judge Chapman's order. Mast Spectrum has proposed to purchase the wireless spectrum assets of One Dot Six Corp., a LightSquared subsidiary, as part of the Chapter 11 plan proposed by U.S. Bank N.A. and Mast Capital Management LLC. Most of the One Dot Six assets included in the sale block were posted as collateral under a $279 million credit agreement, and a debtor-in-possession credit agreement where Mast Capital and U.S. Bank served as lender and administrative, respectively. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Has Agreement With Lenders on Auction Process --------------------------------------------------------------- Michael Bathon at Bloomberg News reports that LightSquared Inc., Philip Falcone's bankrupt wireless spectrum company, resolved a dispute with lenders on bidding procedures that the company had said could have foiled a $2 billion offer for its assets. According to the report, the auction procedures will be submitted for formal court approval, Matthew S. Barr, an attorney for LightSquared, told U.S. Judge Shelley Chapman in Manhattan on Sept. 30. Under the agreement, an independent committee will oversee the auction. The lenders, who hold $1.4 billion of $1.7 billion in debt of LightSquared's LP unit, had objected to a plan that it said would have given Falcone's investment company, Harbinger Capital Partners LLC, too much power to choose the winning bid. The group said Harbinger opposed any sale of LightSquared assets. "This playing field is as level as it gets," Chapman said at the hearing. The plan sends a "message to the marketplace" that potential bidders have a chance to win the auction, the judge said. The report notes that the company is seeking to sell its wireless spectrum assets under court protection and has a $2.22 billion offer from a unit of Charlie Ergen's Dish Network Corp. Lawsuit According to the report, the company has sought to halt a lawsuit that Harbinger brought against the GPS industry, saying the case overlaps with issues raised in the bankruptcy. LightSquared asked the court to keep the lawsuit from going forward for 60 days as it might "distract key LightSquared officers and employees from the restructuring efforts at a critical stage." Lenders had criticized the suit. The case was filed in August in U.S. District Court against Deere & Co., Garmin International Inc., Trimble Navigation Ltd., the U.S. GPS Industry Council and the Coalition to Save Our GPS. The report relates that the defendants were accused of fraudulently failing to disclose that they had designed their GPS devices to use certain portions of LightSquared's spectrum, "a fact that ultimately delayed approval for LightSquared's network and led to LightSquared filing for bankruptcy," the company said. LightSquared had invested about $1.9 billion to build a business based on "material misrepresentations and omissions" made by the defendants, according to the lawsuit. A lawsuit that accused Falcone and Harbinger of misleading investors about the firm's stake in LightSquared was narrowed by a U.S. judge as well on Sept. 30. U.S. District Judge Alison Nathan in Manhattan dismissed all or part of seven of the nine counts in the lawsuit. She gave the plaintiffs one more chance to amend the complaint to address her rulings. According to the report, the investors claimed Harbinger acquired an interest in LightSquared, formerly known as SkyTerra Communications Inc., without adequately warning investors of the risks. Harbinger eventually owned 60 percent of LightSquared, which was developing a high-speed wireless broadband network before it filed for bankruptcy last year. The original suit was filed in February 2012 by Lili Schad, of Wallkill, New York, who said she invested $4 million with Harbinger. The report discloses that Ms. Schad, who is seeking to represent a class of Harbinger investors, said she wasn't told LightSquared's plan to build the network faced obstacles from U.S. regulators. The investor case is Schad v. Harbinger Capital Partners LLC, 12- cv-01244, U.S. District Court, Southern District of New York (Manhattan). About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LILY GROUP: Section 341(a) Meeting Scheduled for Nov. 1 ------------------------------------------------------- A meeting of creditors in the bankruptcy case of Lily Group, Inc., will be held on Nov. 1, 2013, at 10:00 a.m. EDT at Rm 110 U.S. Courthouse, Terre Haute. 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. Lily Group, Inc., filed a Chapter 11 Petition (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23, 2013. The petition was signed by P. Rick Risinger as CEO. The Debtor estimated assets and debts of at least $10 million. Judge Frank J. Otte presides over the case. Tucker, Hester, Baker & Krebs, LLC, serves as the Debtor's counsel. LIME ENERGY: Promotes Adam Procell to President and COO ------------------------------------------------------- Lime Energy Co. promoted Adam Procell to president and chief operating officer. He will report to John O'Rourke, Lime's chief executive officer. Mr. Procell joined Lime Energy in 2009 and has served the company as a divisional president and as vice president of Sales and Marketing. He led the development of Lime's Utility Programs business, which provides cost-effective energy efficiency resources for utility clients through programs serving their small and mid-sized business customers. Following the sale of their ESCO business unit earlier this year, Lime announced their intent to focus on their Utility Programs business. "This promotion is acknowledgement of the fact that Adam has been instrumental in building our utility programs business and positioning us as a leader in the small business direct install market," said John O'Rourke, Lime Energy's CEO. Mr. Procell is a veteran of the energy efficiency industry, with over 25 years of experience in energy efficiency, renewable energy and sustainability. He previously spent 12 years with AECOM Technology Corporation (ACM: NYSE), where he most recently served as the National Director of Energy Efficiency & Carbon Management. Mr. Procell served as the Chairman of the National Association of Energy Services Companies (NAESCO), and he has been active in working with public officials to develop regulations and legislation for a clean energy future. Mr. Procell received his BS in Interdisciplinary Engineering and Management from Clarkson University in Potsdam, NY. About Lime Energy Headquartered in Huntersville, North Carolina, Lime Energy Co. -- http://www.lime-energy.com-- is engaged in planning and delivering clean energy solutions that assist its clients in their energy efficiency and renewable energy goals. The Company's solutions include energy efficient lighting upgrades, energy efficient mechanical and electrical retrofit and upgrade services, water conservation, building weatherization, on-site generation and renewable energy project development and implementation. The Company provides energy solutions across a range of facilities, from high-rise office buildings, distribution facilities, manufacturing plants, retail sites, multi-tenant residential buildings, mixed use complexes, hospitals, colleges and universities, government sites to small, single tenant facilities. The Company's balance sheet at June 30, 2013, showed $32.64 million in total assets, $31.68 million in total liabilities and $952,000 in total stockholders' equity. MEDICURE INC: Incurs C$2.6 Million Net Loss in Fiscal 2013 ---------------------------------------------------------- Medicure Inc. reported a net loss of C$2.57 million on C$2.60 million of net product sales for the year ended May 31, 2013, as compared with net income of C$23.38 million on C$4.79 million of net product sales for the year ended May 31, 2012. The change in net (loss) income relative to fiscal 2012 is primarily as a result of the gain on settlement of debt in fiscal 2012, which totalled C$23.9 million, the C$1.9 million sale of unfinished product in fiscal 2012 and higher research and development expenses in fiscal 2013. Net loss for the three months ended May 31, 2013, was C$706,000 compared to net loss of C$975,000 for same quarter of the previous fiscal year and $1.1 million for the previous quarter. The decrease in the net loss is primarily a result of higher sales in the quarter ended May 31, 2013. As of May 31, 2013, the Company had C$3.42 million in total assets, $7.75 million in total liabilities and a C$4.32 million total deficiency. At May 31, 2013, the Company had cash totalling C$127,000 compared to C$1.1 million as of May 31, 2012. The decrease in cash is primarily due to inventory manufacturing purchases made during fiscal 2013 and the increased net loss. Ernst & Young LLP, in Winnipeg, Canada, issued a "going concern" qualification on the consolidated financial statements for the year ended May 31, 2013. The independent auditors noted that Medicure Inc. has experienced losses and has accumulated a deficit of $125,877,356 since incorporation and a working capital deficiency of $2,065,539 as at May 31, 2013, that raises substantial doubt about its ability to continue as a going concern. A copy of the Report is available for free at: http://is.gd/Yoe0af About Medicure Inc. Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX: MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical company engaged in the research, development and commercialization of human therapeutics. The Company has rights to the commercial product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the United States and its territories (Puerto Rico, U.S. Virgin Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa receptor antagonist, is used for the treatment of acute coronary syndrome (ACS) including unstable angina, which is characterized by chest pain when one is at rest, and non-Q-wave myocardial infarction. MIDSTATES PETROLEUM: S&P Affirms 'B' CCR & Revises Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit and 'B-' senior unsecured debt ratings on Midstates Petroleum Co. Inc., and revised the outlook to stable from positive. "The outlook revision to stable reflects weaker-than-expected financial measures in 2013, including weaker-than-anticipated liquidity," said Standard & Poor's credit analyst Paul Harvey. The stable outlook reflects S&P's revised debt to EBITDA forecast of 4.5x in 2013 and 3.5x to 4x in 2014, versus S&P's prior expectations of year-end 2013 debt to EBITDA of around 4x and 3x to 3.5x in 2014 (these calculations reflect a 50% debt treatment of convertible preferred stock). In addition, the company's compliance with financial covenants has been difficult due to the debt incurred with the Panther Energy LLC acquisition and the subsequent delay in realizing production gains from the acquired properties. As a result, S&P expects that Midstates will seek amendments to the financial covenants under its credit facility to maintain adequate liquidity. Although operating performance has improved recently, financial measures, and potentially liquidity, are likely to remain below what S&P had expected for an upgrade. The stable outlook reflects S&P's expectation that Midstates' operational performance will trend below 4x debt leverage in 2014, and that its operating performance will continue to improve as it develops the reserves and increases production from its Mississippi Lime (Eagle) and Anadarko Basin (Panther) acquisitions. In addition, the outlook takes into account S&P's view that the company will not require further covenant amendments in 2014 and that its liquidity will improve. S&P could lower the rating if debt leverage exceeds 4.75x or liquidity falls below $50 million with no near-term solution. Both of these scenarios would likely follow weak drilling results combined with a prolonged period of realized crude oil prices below $65 per barrel. In addition, S&P could lower the ratings if Midstates were to issue dividends or share repurchases. An upgrade is possible if Midstates can lower debt leverage to under 3.5x on a sustained basis, while successfully executing its growth strategy such that its proved developed reserve life exceeds 4.5 years. This could occur over the next 12 to 18 months, if Midstates is able to continue to successfully develop its reserves and production. At the same time, Midstates would need to sustain production around 30,000 barrels per day while the price of crude oil continues to exceed $90 per barrel and more closely align operating cash flows and capital spending. MIDVALE PARK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 6701 S. Midvale Park, L.L.C. 625 N. Treat Avenue Tucson, AZ 85716 Case No.: 13-17083 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Hon. Eileen W. Hollowell Debtor's Counsel: Michael W. McGrath, Esq. MESCH CLARK & RORTHSCHILD 259 North Meyer Avenue Tucson, AZ 85701-1090 Tel: 520-624-8886 Fax: 520-798-1037 Email: ecfbk@mcrazlaw.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by James Romanoski, manager. The Debtor did not submit its list of largest unsecured creditors when it filed its petition. MORGANS HOTEL: Issues 439,309 Common Shares to NorthStar Capital ---------------------------------------------------------------- Morgans Hotel Group Co. issued 439,309 shares of common stock, par value $0.01 per share, to NorthStar Capital Investment Corp., in exchange for 439,309 non-managing member units in Morgans Group LLC. The Non-Managing Member Units were tendered to the Company for redemption in accordance with the terms and provisions of the Amended and Restated Limited Liability Company Agreement of Morgans Group LLC, as amended. The Common Stock was issued in a private transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company incurred a net loss attributable to common stockholders of $66.81 million in 2012, a net loss attributable to common stockholders of $95.34 million in 2011, and a net loss attributable to common stockholders of $89.96 million in 2010. The Company's balance sheet at June 30, 2013, showed $580.67 million in total assets, $744.32 million in total liabilities, $6.04 million in redeemable noncontrolling interest and a $169.70 million total stockholders' deficit. MOTORS LIQUIDATION: To Settle Nova Scotia Litigation ---------------------------------------------------- The Motors Liquidation Company GUC Trust previously announced, on June 27, 2013, the commencement of a court-ordered mediation process in the ongoing litigation to disallow, equitably subordinate or reduce certain claims filed in the bankruptcy cases of Motors Liquidation Company and its affiliates by or on behalf of the holders of the 8.375 percent guaranteed notes due Dec. 7, 2015, and the 8.875 percent guaranteed notes due July 10, 2023, in each case issued in 2003 by General Motors Nova Scotia Finance Company. On Sept. 26, 2013, the parties to the Nova Scotia Mediation entered into a proposed settlement agreement relating to the Nova Scotia Litigation, the principal terms of which include: (i) the allowance of a $1.073 billion general unsecured claim against the MLC estate in favor of the holders of the Nova Scotia Notes, based upon MLC's guarantee of the Nova Scotia Notes; (ii) the reduction of the approximately $1.608 billion claim filed by Green Hunt Wedlake, Inc., as trustee for General Motors Nova Scotia Finance Company to $477 million, and the allowance of that claim as so reduced as a general unsecured claim against the MLC estate; (iii) the payment by General Motors of Canada Limited of $50 million in cash to the Nova Scotia Trustee, to be applied in part to pay certain fees and expenses of certain parties to the Nova Scotia Mediation in the amount of $17.5 million (plus any additional amounts owed by General Motors Nova Scotia Finance Company to the Canadian Office of Superintendent of Bankruptcy pursuant to applicable bankruptcy laws in Canada), with the remainder to be distributed to the holders of the Nova Scotia Notes allocated as follows: approximately 57.43 percent to the 2015 Notes and approximately 42.57 percent to the 2023 Notes; and (iv) various releases from liability by all past, present and future holders of Nova Scotia Notes and the other parties to the Settlement Agreement. The Settlement Agreement requires the GUC Trust to make the following distributions in accordance with the terms of the Amended and Restated Motors Liquidation Company GUC Trust Agreement, dated as of June 11, 2012, as subsequently amended, on an accelerated basis: (i) a special distribution of common stock of General Motors Company, warrants to purchase GM Common Stock and units of beneficial interest in the GUC Trust, pursuant to Sections 5.3 and 5.8 of the GUC Trust Agreement, to the holders of record of the Nova Scotia Notes as of a date following the expiration of the Settlement Appeals Periods, as the beneficial holders of the allowed portions of the Guarantee Claim and the Wind-Up Claim, on account of such claims; and (ii) a special distribution of excess distributable assets of the GUC Trust, pursuant to Sections 5.4 and 5.8 of the GUC Trust Agreement, to all holders of record of the GUC Trust Units (including the GUC Trust Units distributed in the Initial Distribution) as of a record date to be set after the date of the Initial Distribution. The Initial Distribution will consist of, in the aggregate, (a) 6,174,015 shares of GM Common Stock, (b) 5,612,741 warrants to acquire GM Common Stock at an exercise price of $10.00, expiring July 10, 2016, (c) 5,612,741 warrants to acquire GM Common Stock at an exercise price of $18.33, expiring July 10, 2019, and (d) 1,550,000 GUC Trust Units. In addition, in the event that any assets become available for distribution to holders of general unsecured claims against the MLC estate in respect of the legal action styled as Official Committee of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A. et al. (Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009)), those distributions will be made to the holders of the Nova Scotia Notes as of the Noteholder Record Date, as the beneficial holders of the allowed portions of the Guarantee Claim and the Wind-Up Claim. The Settlement Agreement also requires, on or before Sept. 27, 2013, the GUC Trust to file a motion with the Bankruptcy Court for the Southern District of New York, and the Nova Scotia Trustee to file a motion with the Supreme Court of Nova Scotia, in each case seeking the approval by that court of the Settlement Agreement. The Settlement Agreement is subject to, among other things, the receipt of those court approvals, and the terms of the Settlement Agreement are not binding on the GUC Trust or the other parties until such court approvals are obtained and until the applicable deadlines for appeal have expired. A copy of the Settlement Agreement is available for free at: http://is.gd/jy3A0O About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. MPG OFFICE: Merger Agreement "Outside Date" Extended to Oct. 15 --------------------------------------------------------------- Pursuant to the terms of the Agreement and Plan of Merger, dated as of April 24, 2013, by and among MPG Office Trust, Inc., Brookfield DTLA Holdings LLC and certain of their affiliates, the Company and Brookfield DTLA jointly agreed to extend the Outside Date (as defined in the Merger Agreement) until Oct. 15, 2013. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. As of June 30, 2013, the Company had $1.28 billion in total assets, $1.71 billion in total liabilities and a $437.26 million total deficit. In its Form 10-K filing with the Securities and Exchange Commission for the fiscal year ended Dec. 31, 2012, the Company said it is working to address challenges to its liquidity position, particularly debt maturities, leasing costs and capital expenditures. The Company said, "We do not currently have committed sources of cash adequate to fund all of our potential needs, including our 2013 debt maturities. If we are unable to raise additional capital or sell assets, we may face challenges in repaying, extending or refinancing our existing debt on favorable terms or at all, and we may be forced to give back assets to the relevant mortgage lenders. While we believe that access to future sources of significant cash will be challenging, we believe that we will have access to some of the liquidity sources identified above and that those sources will be sufficient to meet our near- term liquidity needs." On March 11, 2013, the Company entered into an agreement to sell US Bank Tower and the Westlawn off-site parking garage. The transaction is expected to close June 28, 2013, subject to customary closing conditions. The net proceeds from the transaction are expected to be roughly $103 million, a portion of which may potentially be used to make loan re-balancing payments on the Company's upcoming 2013 debt maturities at KPMG Tower and 777 Tower. Roughly $898 million of the company's debt matures in 2013. "Our ability to access the capital markets to raise capital is highly uncertain. Our substantial indebtedness may prevent us from being able to raise debt financing on acceptable terms or at all. We believe we are unlikely to be able to raise equity capital in the capital markets," the Company said. "Future sources of significant cash are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. In addition, our inability to secure adequate sources of liquidity could lead to our eventual insolvency," the Company added. MSD PERFORMANCE: Unsecured Creditors Target Cash-Collateral Motion ------------------------------------------------------------------ Law360 reported that unsecured creditors of bankrupt MSD Performance Inc. objected on Sept. 27 to the auto parts maker's bid to continue using cash collateral to fund its Chapter 11 case, saying that certain provisions in the interim order benefit secured lenders at their expense and should be removed. According to the report, the official committee of unsecured lenders took aim at adequate protection clauses contained in the interim cash-collateral order, asserting that the provisions are "unduly prejudicial" to their interests and must be stricken or modified from any final order. 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: Panel Opposes Fast Sale of Racing-Parts Business ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the MSD Performance Inc. official unsecured creditors' committee joined with minority secured creditors in opposing a quick sale of the business with no buyer under contract. The Debtors was scheduled to ask the bankruptcy judge in Delaware to approve auction and sale procedures at a hearing Oct. 1. According to the report, MSD filed for Chapter 11 protection with plans to sell quickly. According to the committee, there is no need for speed because the company has positive cash flow. In papers filed last week, the committee said a sale will likely give rise to tax liability required by law to be paid in full before creditors are entitled distribution. As a result, the creditors say the bankrupt company will be administratively insolvent, meaning there won't be enough cash to pay claims arising during the course of the bankruptcy. The report notes that a sale at this juncture, according to the committee, will "mandate an immediate conversion" to liquidation in Chapter 7. The committee wants the judge to allow a "more measured, orderly" sale process that could produce a transaction not creating a large tax liability. A minority of senior secured lenders are similarly opposed to a quick sale advocated by Z Capital Partners LLC, which acquired 59 percent of the senior debt. Holders of the remaining 41 percent in senior debt explained in a court filing last week how they are prepared to propose a genuine reorganization plan worth $78 million for the lenders. They didn't disclose details of the proposal. The report relates that the minority lenders include funds affiliated with Madison Capital Partners and Golub Capital Partners LLC. At the Oct. 1 hearing, the Committee was slated to ask the judge for authority to file a reorganization plan. MSD wants the judge to require bids by Nov. 18 in advance of an auction on Nov. 21. Before bankruptcy, there were talks about a sale to Z Capital, according to a court filing. The report discloses that MSD said a sale "may be followed" by a conversion of the Chapter 11 case to Chapter 7, where a trustee would complete the liquidation. 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. NET TALK.COM: Taps Zachary Salum as New Accountants --------------------------------------------------- Nettalk.Com Inc. engaged Zachary Salum Auditors P.A., as its independent registered public accounting firm, to audit the Company's financial statements. The decision to engage Zachary Salum Auditors P.A was approved by the Company's Board of Directors at a Board meeting called for that purpose. The Company dismissed its independent certifying accountant Thomas, Howell, Ferguson, CPA. The Company's Board of Directors approved the dismissal on Sept. 23, 2013. There were no disputes or disagreements between Thomas, Howell, Ferguson, CPA's and the Company during the previous fiscal year. Except for the provision of a "Going Concern" opinion, the reports of Thomas, Howell, Ferguson, CPA's on the Company's financial statements for the year ended Dec. 31, 2012, did not contain an adverse opinion or disclaimer of opinion, and those reports were not qualified, or modified as to audit scope or accounting principle. During the year ended Dec. 31, 2012, and through the Dismissal Date, the Company has not had any disagreements with Thomas, Howell, Ferguson, CPA's on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures. The Company's financial statements for Dec. 31, 2011, were audited by Meeks International, Inc. About Net Talk.com Based in Miami, Fla., Net Talk.com, Inc., is a telephone company, that provides, sells and supplies commercial and residential telecommunication services, including services utilizing voice over internet protocol technology, session initiation protocol technology, wireless fidelity technology, wireless maximum technology, marine satellite services technology and other similar type technologies. Net Talk.com incurred a net loss of $14.71 million on $5.79 million of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $26.17 million on $2.72 million of total revenue for the year ended Sept. 30, 2011. For the three months ended Dec. 31, 2011, the Company reported a net loss of $3.44 million on $1.29 million of total revenue. As of Dec. 31, 2012, the Company had $5.64 million in total assets, $22.87 million in total liabilities, $6.37 million in redeemable preferred stock, and a $23.60 million total stockholders' deficit. Thomas Howell Ferguson P. A., in Tallahassee, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred significant recurring losses from operations its total liabilities exceeds its total assets, and is dependent on outside sources of funding for continuation of its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. On May 26, 2011, the Company's Board of Directors approved a change in the Company's fiscal year end from September 30, to December 31, effective Dec. 31, 2011. Bankruptcy Warning "We have not sustained profits and our losses could continue. Without sufficient additional capital to apply to repay our indebtedness, we may be required to significantly scale back our operations, significantly reduce our headcount, seek protection under the provisions of the U.S. Bankruptcy Code, and/or discontinue many of our activities which could negatively affect our business and prospects. Our current capital raising efforts may not be successful in raising additional capital on favorable terms, or at all," the Company said in its annual report for the year ended Dec. 31, 2012. NEOMEDIA TECHNOLOGIES: Stockholders Reject Reverse Stock Split -------------------------------------------------------------- NeoMedia Technologies, Inc., commenced its annual meeting of stockholders, with the meeting concluding on Sept. 23, 2013, after a recess. At the Meeting, six proposals were submitted for a vote. The stockholders elected Laura A. Marriott, George G. O'Leary, Sarah Fay and Peter Mannetti as directors for terms until the next succeeding annual meeting of stockholders or until that director's successor will have been duly elected and qualified. The stockholders approved, on a non-binding basis, the compensation of the Company's named executive officers and selected "every three years" as the desired frequency of future advisory votes on the compensation of the Company's named executive officers. In light of the results, the Company has decided to set the frequency of future advisory votes on the compensation of the Company's named executive officers at every three years going forward. The stockholders ratified StarkSchenkein, LLP, as the Company's independent registered accounting firm. Regarding a vote to amend the Company's Certificate of Incorporation to effect a reverse stock split of the Company's outstanding Common Stock at a ratio of 1-for-1,700 while keeping the amount of authorized shares of Common Stock set at 5,000,000,000, the stockholders did not submit enough affirmative votes to approve the amendment of the Company's Certificate of Incorporation. With regards to a vote to amend the Company's Certificate of Incorporation to increase its authorized Common Stock from 5,000,000,000 to 500,000,000,000 shares, the stockholders did not submit enough affirmative votes to approve the amendment of the Company's Certificate of Incorporation. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NeoMedia reported a net loss of $19.38 million in 2012 and a net loss of $849,000 in 2011. As of June 30, 2013, the Company had $5.79 million in total assets, $92.13 million in total liabilities, all current, $4.81 million in series C convertible preferred stock, $348,000 in series D convertible preferred stock, and a $91.51 million total shareholders' deficit. NESBITT PORTLAND: 2 Hilton Units Still Oppose Second Amended Plan ----------------------------------------------------------------- HLT Existing Franchise Holding, LLC and Embassy Suites Franchise LLC, both affiliates of Hilton Worldwide, Inc., filed a further formal objection to the Second Amended Consensual Joint Plan of Reorganization of Nesbitt Portland Property, LLC, et al., proposed by the Debtors and their secured lender. The Hilton affiliates previously objected to the older version of the Debtors' Plan. HTL and Embassy Suites have standard license agreements with the Debtors. The Licensor complains that the Debtors try to paint them as the unreasonable franchisor that will not work with them when, in fact, the opposite is true. The Licensor relates that its position has been simple and fair -- that in connection with any plan, any new licensee (including Secured Lender) must comply with Licensor's current licensing requirements, including paying all applicable fees and executing any required documents. But, the Licensor cites, the Secured Lender has insisted that it get special treatment not available for any other prospective licensee to obtain an Embassy Suites license and contrary to the terms and conditions of Licensor's current license agreements, standards and procedures. "The Second Amended Plan remains fatally flawed," says the Licensorn. It no longer seeks to assume and assign any of the license agreements, the Licensor relates, but it still seeks to compel the Licensor to take certain acts, forbear from other acts, and alter its procedures by imposing certain terms for any new franchise agreement for the hotels -- all of which would accrue to the Secured Lenders's benefit if it obtains title to any of the Debtors' hotels through a credit bid. Thus, the Licensor asks the Court to deny confirmation of the Plan unless it is modified to address the Licensor's concerns. Creditors HLT Existing Franchise Holding, LLC and Embassy Suites Franchise LLC are represented by: PERKINS COIE LLP David M. Neff, Esq. Eric E. Walker, Esq. 131 S. Dearborn Street, Suite Chicago, IL 60603-5559 Tel: (312)324-8400 Fax: (312)324-9400 E-mail: dneff@perkinscoie.com ewalker@perkinscoie.com - and - PERKINS COIE LLP Jeffrey S. Goodfried, Esq. 1888 Century Park East, Suite 1700 Los Angeles, CA 90067 Tel: (310)788-9900 Fax: (310)788-3399 E-mail: JGoodfried@perkinscoie.com 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. NESBITT PORTLAND: Can Employ Jones Lang as Real Estate Broker ------------------------------------------------------------- Nesbitt Portland Property, LLC, et al., obtained authority from the U.S. Bankruptcy Court for the Central District of California to employ Jones Lang Lasalle Americas, Inc. as real estate broker, nunc pro tunc to July 2, 2013. Jones Lang will be helping out the Debtors in the marketing and disposition of their Hotels and the sale of the Hotels to either a single purchaser or to multiple purchasers. Jones Lang will be paid a Transaction Fee payable by the applicable Debtor or Debtors from the sale proceeds. The firm will also be reimbursed for all direct out-of-pocket costs and expenses. 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. NEW CENTURY FIN'L: Bid for Borrowers Committee Denied ----------------------------------------------------- Law360 reported that a Delaware bankruptcy judge refused on Sept. 26 to allow a borrowers committee to be formed in the New Century Financial Corp. bankruptcy case, ruling that the request from individual mortgage borrowers comes too late in the proceedings, six years after the company filed for Chapter 11 protection. According to the report, U.S. Bankruptcy Judge Kevin J. Carey ruled that this deep into the case, a borrowers committee wouldn't be able to serve the same purpose typically rendered by other common bodies in bankruptcy cases such as unsecured creditors and equity holders. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- was a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company was among firms hit by the collapse of the subprime mortgage business industry in 2006. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they disclosed total assets of $36,276,815 and total debts of $102,503,950. The Company sold its assets in transactions approved by the Bankruptcy Court. The Bankruptcy Court confirmed the Second Amended Joint Chapter 11 Plan of Liquidation of the Debtors and the Official Committee of Unsecured Creditors on July 15, 2008, which became effective on Aug. 1, 2008. An appeal was taken and, on July 16, 2009, District Judge Sue Robinson issued a Memorandum Opinion reversing the Confirmation Order. On July 27, 2009, the Bankruptcy Court entered an Order Granting Motion of the Trustee for an Order Preserving the Status Quo Including Maintenance of Alan M. Jacobs as Liquidating Trustee, Plan Administrator and Sole Officer and Director of the Debtors, Pending Entry of a Final Order Consistent with the District Court's Memorandum Opinion. On Nov. 20, 2009, the Court entered an Order confirming the Modified Second Amended Joint Chapter 11 Plan of Liquidation. The Modified Plan adopted, ratified and confirmed the New Century Liquidating Trust Agreement, dated as of Aug. 1, 2008, which created the New Century Liquidating Trust and appointed Alan M. Jacobs as Liquidating Trustee of New Century Liquidating Trust and Plan Administrator of New Century Warehouse Corporation. NEW YORK OPERA: Expected to File for Bankruptcy ----------------------------------------------- Michael Bathon at Bloomberg News reports that the New York City Opera, created 70 years ago as the "people's opera," expects to file for bankruptcy protection Oct. 2 and either liquidate in court or be sold to another institution, its lawyer said. According to the report, the nonprofit organization, which this year produced "Anna Nicole," about the late tabloid celebrity, failed to reach its fundraising goal of $7 million, the lawyer, Kenneth Rosen of Lowenstein Sandler LLP, said in phone interview. "There have been many, many generous donors -- a lot of people appreciate what the New York City Opera does, and it does a wonderful thing," said Mr. Rosen, who has worked with the opera for two years. "But right now we don't have the $7 million that we need to go forward with the season." The report notes that the opera company last week posted an "urgent" notice on its website seeking donations to help raise $20 million, including the $7 million it said it needed by Sept. 30 for the current season. Just $291,952 was pledged by 2,027 people in an online Kickstarter campaign as of Sept. 30. "The opera has obviously been trying to avoid this," Rosen said. "Over the past several years, it has been doing everything conceivable to reduce overhead, reduce expenses," including moving from Lincoln Center to City Center. The report relates that the company said in a statement on its website that if the fundraising effort failed, it would suspend the rest of its 2013-2014 season. New York City Opera co-produced "Anna Nicole" with Brooklyn Academy of Music. The remaining productions for this season are Johann Christian Bach's "Endimione," Bela Bartok's "Bluebeard's Castle" and Wolfgang Amadeus Mozart's "The Marriage of Figaro," according to the website. The report discloses that George Steel, the artistic director and general manager since 2009, wrote in a mass e-mail on Sept. 26 that the opera "is on the verge of canceling its season and filing for bankruptcy." The company was once dubbed "the people's opera" by Mayor Fiorello LaGuardia, and was a breeding ground for young talent that included Beverly Sills and Placido Domingo. In 2011- 12, the last year for which results are available, ticket sales were $1.1 million, down 87 percent from 2005-06. NORTHCORE TECHNOLOGIES: Begins Trading on NEX Exchange ------------------------------------------------------ Effective at market opening on Sept. 30, 2013, the shares of Northcore Technologies Inc. will begin trading on the NEX exchange under the trading symbol "NTI.H" following the delisting of its shares on the TSX exchange at market closing on Friday, Sept. 27, 2013. About NEX NEX listed companies are relieved of the pressure of a delisting deadline, are more visible as potential takeover targets or investment opportunities and can continue to trade within the prestigious TMX Group of stock exchanges. NEX companies are subject to the same disclosure standards as all Canadian public companies and must maintain good standing with all relevant Canadian securities commissions. In addition, surveillance standards of NEX companies remain unchanged - they continue to be overseen by the same independent service that monitors TSX Venture Exchange and Toronto Stock Exchange companies. NEX listed companies continue to maintain a relationship within the TMX Group, smoothing the transition to active listed status on TSX Venture Exchange when and if the opportunity arises. Trading on the NEX open auction market takes place on the same fully electronic system as TSX Venture Exchange, and is governed by identical trading rules. Proposed Bio-Diesel Intellectual Property Purchase from Cielo The proposed Cielo transaction was initially considered a Change of Business by the TSX and is now considered to be a Reverse Takeover under the TSXV Policy 5.2 and therefore Northcore must fulfill all the filing requirements in Policy 5.2. Northcore will be required to request a trading halt which will remain until the reinstatement conditions in Policy 5.2 are satisfied. Also, Northcore will be required to meet the Initial Listing Requirements of the TSXV upon completion of the transaction. As a result, Northcore is not proceeding with the Cielo transaction at this time and intends to seek other potential transactions, which does not preclude future discussions with Cielo should it be of interest to both parties. Chris Bulger, current Chairman of Northcore, is assuming the duties of Northcore's CEO following the resignation of Don Allan, who is focused on his role as CEO of Cielo. About Northcore Technologies Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50 percent of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a loss and comprehensive loss of C$3.93 million in 2011, compared with a loss and comprehensive loss of C$3.03 million in 2010. The Company's balance sheet at June 30, 2013, showed C$2.52 million in total assets, C$1.36 million in total liabilities and C$1.16 million in total stockholders' equity. NUVERRA ENVIRONMENTAL: Wolf Haldenstein Files Class Action ---------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP on Sept. 27 disclosed that a class action lawsuit has been filed in the United States District Court, District of Arizona, on behalf of all persons who purchased or otherwise acquired shares of the common stock of Nuverra Environmental Solutions, Inc. between November 11, 2011 and August 23, 2013, inclusive, against the Company and certain of the Company's officers and directors, alleging securities fraud pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 [15 U.S.C. 78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. 240.10b-5]. The litigation is styled Monroe v. Nuverra Environmental Solutions, Inc, et al. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at http://www.whafh.com The Complaint alleges that during the Class Period, Nuverra engaged in a fraudulent scheme to artificially inflate the Company's stock price by disseminating materially false and misleading statements, and failing to disclose material information regarding the Company's true financial scorecard and operations, thereby damaging Plaintiff and other similarly situated investors. In particular, the Company misrepresented or failed to disclose that (i) it was overleveraged and experiencing a liquidity crisis; (ii) it was experiencing a significant decline in its operational results, especially in the Eagle Ford Shale area; (iii) its default risk materially increased because of its poor financial performance; and (iv) Defendants therefore lacked a reasonable basis for their positive statements about the Company during the Class Period. On July 30, 2013, the Company issued a press release announcing its preliminary financial results for the quarter ended June 30, 2013 and, in particular, that its earnings before interest, taxes, depreciation, and amortization ("EBITDA") were, in fact, significantly lower than previously projected. On this news, the price of Nuverra common stock dropped precipitously from a closing of $3.49 per share on July 29, 2013 to a closing of $3.04 per share on July 30, 2013, for a sharp decrease of approximately 13%. Less than one month later, on August 23, 2013, it was reported in the news that the Company's financial outlook had been severely impaired by, among other things, a series of ill-advised acquisitions. On this news, the price of Nuverra common stock declined another 11.76%, closing at $2.40 per share on August 26, 2013. In ignorance of the false and misleading nature of the statements described in the Complaint, and the deceptive and manipulative devices and contrivances employed by said Defendants, Plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of Nuverra common stock. Had Plaintiff and the other members of the Class known the truth, they would not have purchased said common stock, or would not have purchased them at the inflated prices that were paid. If you purchased NES common stock during the Class Period, you may request that the Court appoint you as lead plaintiff by November 4, 2013. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wolf Haldenstein, or other counsel of your choice, to serve as your counsel in this action. Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has approximately 70 attorneys in various practice areas; and offices in Chicago, New York City, and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi- district and consolidated litigation. If you wish to discuss this action or have any questions, please contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at (800) 575-0735 (Gregory M. Nespole, Esq.), via e-mail at classmember@whafh.com or visit our website at http://www.whafh.com All e-mail correspondence should make reference to "Nuverra". OCLARO INC: Grant Thornton Raises Going Concern Doubt ----------------------------------------------------- Oclaro, Inc., 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 29, 2013. Grant Thornton LLP, in San Francisco, California, expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company's recurring operating losses and negative cash flows from operations. The Company reported a net loss of $122.7 million on $586.0 million of revenues in fiscal 2013, compared with a net loss of $66.5 million on $385.4 million of revenues in fiscal 2012. Operating loss was $124.8 million for fiscal 2013, compared with an operating loss $63.8 million in fiscal 2012. "Revenues for the year ended June 29, 2013, increased by $200.6 million, or 52 percent, compared to the year ended June 30, 2012. The increase was primarily due to the inclusion of revenues in fiscal year 2013 generated through the acquisition of Opnext on July 23, 2012." The Company's balance sheet at June 29, 2013, showed $449.9 million in total assets, $295.8 million in total liabilities, and stockholders' equity of $154.1 million. A copy of the Form 10-K is available at http://is.gd/UU3tUr San Jose, California-based Oclaro, Inc. (NASDAQ: OCLR) is one of the largest providers of optical components, modules and subsystems for the optical communications market. The Company has research and development (R&D) and chip fabrication facilities in the U.S., U.K., Italy, Korea and Japan. It has in-house and contract manufacturing sites in China, Malaysia and Thailand, with design, sales and service organizations in most of the major regions around the world. OLYMPIC HOLDINGS: Chapter 11 Case Dismissed ------------------------------------------- Judge Thomas B. Donovan of the U.S. Bankruptcy Court Central District of California dismissed the Chapter 11 case of Olympic Holdings, LLC, with a 180-day bar to refilling. Judgment with applicable interest is entered against the Debtor and in favor of the U.S. Trustee in the amount of $1,950 for unpaid U.S. Trustee quarterly fees. As previously reported by The Troubled Company Reporter, the Debtor's settlement agreement with secured creditor JP Morgan Chase Bank, N.A., on JPMC's first priority lien on the Debtor's real property has resolved all of the issues the Debtor had with its creditors and there is no further reason to attempt to get a Plan of Reorganization confirmed. By the settlement, the Debtor has entered into an agreed upon Loan Modification with JPMC which results in a cure of the obligation to JPMC and a final resolution of all pending issues between the parties. As part of the settlement, the Debtor has agreed that JMPC will have relief from stay in rem for two years. The Debtor is represented by M. Jonathan Hayes, Esq., Matthew D. Resnik, Esq., Roksana D. Moradi, Esq., and Carolyn M. Afari, Esq., at SIMON RESNIK HAYES LLP, in Sherman Oaks, California. About Olympic Holdings Beverly Hills, California-based Olympic Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-32707) on June 29, 2012, in Los Angeles. The Debtor estimated assets and liabilities at $10 million to $50 million. Affiliates of the Debtor that filed separate Chapter 11 petitions in the same Court are Wooton Group, LLC (Case No. 12-31323, filed June 19, 2012) and Golden Oak Partners, LLC (Case No. 12-33650 filed July 9, 2012). M. Jonathan Hayes, Esq. at Simon Resnik Hayes LLP represents the Debtor as counsel. The Debtor is a California Limited Liability Company formed in 1996 which owns and manages real property. This is a single asset case. The Debtor owns property comprised of three (3) continguous, multi-tenant industrial/warehouse buildings located at 4851 S. Alameda Street, in Los Angeles, California. ORCHARD SUPPLY: Seeks Extension of Lease Decision Deadline ---------------------------------------------------------- OSH 1 Liquidating Corporation, f/k/a Orchard Supply Hardware Stores Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the time for them to assume or reject any unexpired lease of non-residential property through and including Jan. 13, 2014. The Debtors state: "In this case, cause exists to extend the 120- day period to assume or reject the Real Property Leases. In light of the fact that the Debtors are continuing to operate GOB Sales at the Debtors' remaining lease locations and, in parallel, continue to market the rights under such leases, it would not be prudent for the Debtors to make any determinations concerning the assumption or rejection of the Real Property Leases until such time as the GOB Sales have been completed and they are certain as to the ultimate disposition of their remaining assets, including the Real Property Leases. Although the Debtors believe that most, if not all, of the Real Property Leases will ultimately be rejected, because the GOB Sales continue, the Debtors need to extend the time to assume or reject the Real Property Leases until there is certainty respecting each Real Property Lease." A hearing on the extension motion is scheduled for Oct. 21, 2013, at 11:00 a.m. EDT. About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a restructuring of the company's balance sheet and a sale of its assets for $205 million in cash to Lowe's Companies, Inc., absent higher and better offers. In addition to the $205 million cash, Lowe's has agreed to assume payables owed to nearly all of Orchard's supplier partners. Bankruptcy Judge Christopher S. Sontchi oversees the case. Michael W. Fox signed the petitions as senior vice president and general counsel. The Debtors disclosed total assets of $441,028,000 and total debts of $480,144,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors appointed in case has retained Pachulski Stang Ziehl & Jones LLP as counsel, and Alvarez & Marsal as financial advisors. Lowe's Cos. completed the $205 million acquisition of 72 of Orchard Supply's 91 stores. The Company changed its name to OSH 1 Liquidating Corporation and reduced the size and simplified the structure of the Board of Directors effective as of Aug. 20, 2013. ORMET CORP: Seeks Longer Exclusivity as Sale Not Completed ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that that although Ormet Corp. received approval in June to sell the business to lender and part owner Wayzata Investment Partners LLC mostly in exchange for debt, the company has been unable to complete the sale for lack of a new agreement with Ohio Power Co. to supply electricity for the smelter in Hannibal, Ohio. According to the report, consequently, the aluminum producer needs an expansion of the exclusive right to propose a plan in the Chapter 11 reorganization begun in February. Ormet said it can't formulate a plan until the sale is completed. There will be a hearing on Oct. 17 where Ormet will seek a four-month expansion of exclusive plan-filing rights until Feb. 20. The sale approval was facilitated by a settlement in which Wayzata will give a $2 million note to a trust for unsecured creditors. The report notes that the note will mature in six years and pay 5 percent cash interest. Wayzata will participate in proceeds from the note as a result of its deficiency claims. The unsecured creditors' trust will also have warrants for 2.5 percent of the stock exercisable at a price equal to the secured debt owing to Wayzata, including loans for the Chapter 11 case. The creditors will have warrants for another 2 percent equal to twice the Wayzata debt. Wayzata will acquire the business in exchange for $130 million of the $139.5 million in secured debt it holds. Wayzata has been financing the Chapter 11 case. 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. OVERSEAS SHIPHOLDING: OSG Gets Court OK to Revise BP Contract ------------------------------------------------------------- Debtor OSG Lightering LLC sought and obtained authority from the Bankruptcy Court to (i) terminate an existing Agreement to Share Profits and Losses from the Sale of Marine Fuel Offshore by Ship to Ship Transfer with BP Products North America Inc., and (ii) enter into a new and revised services agreement with BP Products. The Debtor is also authorized to abandon the Davits and Fenders in accordance with the terms of the revised agreement. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. OVERSEAS SHIPHOLDING: Can Hire Venable as Litigation Counsel ------------------------------------------------------------ The Honorable Peter J. Walsh granted Overseas Shipholding Group, Inc., et al., permission to employ Venable LLP, as of July 29, 2013, to serve as their non-ordinary course professional special litigation counsel. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. OXFORD BUILDING: Driveway Maintenance & DDR Suits Remanded ---------------------------------------------------------- District Judge Virginia M. Hernandez Covington in Tampa, Florida, remanded to the Circuit Court of the Sixth Judicial Circuit, in and for Pinellas County, Florida, the lawsuit, DRIVEWAY MAINTENANCE, INC., a Florida corporation, Plaintiff, v. DDR SOUTHEAST CLEARWATER DEVELOPMENT, LLC, a Delaware limited liability company, and the unknown assigns, successors in interest, trustees, or any other party claiming by, through, under, or against the foregoing, Defendant; and DDR SOUTHEAST CLEARWATER DEVELOPMENT, LLC, a Delaware limited liability company, Third-Party Plaintiff, v. CONTROL BUILDING SERVICES, INC., CONTROL EQUITY GROUP, INC., EDWARD TUREN and NEAL TUREN, Third-Party Defendants, Case No. 8:13-cv-1751-T-33TGW (M.D. Fla.). Driveway Maintenance Inc. and DDR Southeast Clearwater Development LLC filed separate Motions to Remand. The Defendants removed the complaint to the District Court under 28 U.S.C. Sections 1452(a) and 1334(b), saying the action is related to the Chapter 11 proceedings of Oxford Building Services Inc. A copy of the Court's Sept. 25, 2013 Order is available at http://is.gd/aUu1AKfrom Leagle.com. About Oxford Building Oxford Building Services, Inc., Oxford Property Services, Inc., and Origin PR LLC sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 13-13821) on Feb. 26, 2013, in Newark, New Jersey. Oxford is a national organization providing a full spectrum of facility maintenance, housekeeping, janitorial and security services for office building real estate investment trusts ("REITs"), retail and entertainment REITs, national retailers and chain stores. Oxford also optimizes the facility maintenance process for companies with multi-unit facility management needs through the use of software, vendor management tools, statistical modeling and analysis, paperless invoicing and a transaction/call center. Oxford Building, the lead debtor, is the sole member of Origin and owns 100% of the outstanding stock of OPS. Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as counsel to the Debtors. Oxford Property estimated assets and debts of $10 million to $50 million. Oxford Building estimated at least $1 million in assets and liabilities. PACIFIC RUBIALES: Petrominerales Acquisition Credit Neutral ----------------------------------------------------------- Fitch Ratings expects Pacific Rubiales Energy Corp.'s (Pacific Rubiales) intended acquisition of Petrominerales Ltd to be credit neutral. The transaction is believed to marginally increase the company's leverage and somewhat increase its production diversification. Fitch currently rates Pacific Rubiales' foreign and local currency Issuer Default Ratings (IDRs) at 'BB+'; Outlook Stable. On Sept. 29, 2013, Pacific Rubiales entered into an agreement to acquire all outstanding common shares of Petrominerales. The total purchase price of approximately USD1.5 billion includes a USD908 million cash payment and Pacific Rubiales assumption of USD622 million of debt. The company expects to finance the acquisition using cash on hand and short-term financing from its committed credit lines. As a result of this, Pacific Rubiales leverage could increase to approximately 1.2 times (x) on a pro forma basis and given effect to the incremental debt from approximately 0.7x as of year-end 2012. Following the acquisition, the company intends to divest some of Petrominerales asset, especially some investments in pipelines in Colombia, to raise approximately USD400 million of cash and reduce debt related to the acquisition. The company stated its intention to maintain a consolidated leverage below 1.0x in the medium term, which Fitch sees in line with the assigned rating category. PANACHE CUISINE: Payment of Belair PACA Claim Blocked ----------------------------------------------------- Sovereign Bank succeeded in blocking the motion of Belair Produce, Inc., Del Monte Foods, Inc., and Charles Goldstein, Chapter 7 Trustee of Panache Cuisine LLC, to pay the PACA claims as to Belair. Belair and Del Monte are suppliers of wholesale quantities of perishable agricultural commodities and are licensed as dealers under the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. Sec. 499a, et seq. Belair claimed to have supplied Panache with produce impressed by a floating trust pursuant to the PACA trust provisions of 7 U.S.C. Sec. 499e(c)(2), in the unpaid amount of $461,214.23. The amount claimed by Del Monte totaled $13,755.33. Sovereign is the holder of a secured claim against the debtor based upon a prepetition loan in the principal amount of $500,000. A copy of Bankruptcy Judge James F. Schneider's Sept. 23, 2013 Memorandum Opinion is available at http://is.gd/yzow1rfrom Leagle.com. Panache Cuisine, LLC, filed for Chapter 7 bankruptcy (Bankr. D. Md. Case No. 13-17027) on April 23, 2013. Panache Cuisine was a Baltimore, Maryland-based, 100% woman-owned, USDA/FDA, and U.S. Military approved fresh foods manufacturing company specializing in chef prepared 'Gourmet to Go' cuisine such as Artisan Sandwiches, Entree Salads, Exquisite Entrees, Snacks & Sides, Breakfast and Desserts. It sold both label/retail packaged and bulk-packed products for 'drop off catering'/event fulfillment, and customized boxed lunches/meals. Its product line featured close to 200 fresh items serving a broad range of tastes and price points including certain certified kosher products. Its products were featured in many retail venues, ranging from four star resorts and hotels, coffee retailers, collegiate retail dining, corporate dining, airline, and national railway segments throughout the East Coast. Panache operated out of a plant and warehouse located at 1215 East Fort Avenue, Baltimore, pursuant to a sublease from Phillips Foods, Inc. Jennifer E. Stack signed the petition as Chief Operating Officer on behalf of the debtor. On the petition date, Charles R. Goldstein was appointed interim Chapter 7 Trustee, and later accepted the appointment as permanent Trustee. On Aug. 6, 2013, the Chapter 7 Trustee filed a motion to sell property of the debtor free and clear of liens to Phillips Foods, the debtor's landlord. On Aug. 13, the Court entered an order approved the sale to Phillips Food in the amount of $84,000, and capped the landlord's administrative rent claim in the amount of $166,789.75. The Chapter 7 Trustee held proceeds from the court- approved sales and other funds in the approximate amount of $90,000. The Chapter 7 Trustee may be reached at: Charles R. Goldstein PROTIVITI INC. 1 E. Pratt St., Suite #800 Baltimore, US Tel: (410) 454-6830 E-mail: charles.goldstein@protiviti.com Counsel to the Debtor is: Ronald J Drescher, Esq. DRESCHER & ASSOCIATES, P.A. 4 Reservoir Circle, Suite 107 Baltimore, MD 21208 E-mail: rondrescher@drescherlaw.com Counsel to the Chapter 7 Trustee is: Karen H. Moore, Esq. LAW OFFICE OF LORI SIMPSON, LLC 1400 South Charles Street, 3rd Floor Baltimore, MD 21230 Tel: 410-779-5382 Fax : 410-385-1514 E-mail: kmoore@lsimpsonlaw.com Counsel to Belair Produce Co.: Louis W Diess, III, Esq Kate Ellis, Esq MCCARRON & DIESS 4530 Wisconsin Avenue, N.W., Suite 301 Washington, D.C. 20016 E-mail: smccarron@mccarronlaw.com ldiess@mccarronlaw.com kellis@mccarronlaw.com Counsel to Sovereign Bank: Lisa Bittle Tancredi, Esq. GEBHARDT & SMITH LLP One South Street, Suite 2200 Baltimore, MD 21202-3281 E-mail: lisa.tancredi@gebsmith.com PARADE PLACE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Parade Place, LLC 3145 Coney Island Avenue Brooklyn, NY 11235 NEW YORK, NY Case No.: 13-13160 Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Judge Martin Glenn Debtor's Counsel: Arnold Mitchell Greene Robinson Brog Leinwand Greene Genovese & Gluck, P.C. 875 Third Avenue 9th Floor New York, NY 10022 Tel: (212) 603-6300 Fax: (212) 956-2164 Email: amg@robinsonbrog.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Saadia Shapiro, managing member. A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nysb13-13160_243033.pdf PATRIOT COAL: Panel Can Retain H5 to Provide Expert Search Svcs. ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri authorized the Official Committee of Unsecured Creditors of Patriot Coal Corporation, et al., to retain H5 to provide expert search and data management services, at a rate not to exceed $385 per hour. The retention of H5 will be subject to the same terms and limitations as those applicable to "Ordinary Course Professionals" retained by the Debtors under the Order Authorizing the Debtors to Employ Ordinary Course Professionals, Nunc Pro Tunc to the Petition Date. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri as contemplated by the terms of Patriot's Debtor-in- Possession financing. The Disclosure Statement is expected to be filed on or before Oct. 2, 2013, and the approval hearing is currently scheduled for Nov. 6, 2013. PATRIOT COAL: Peabody, Arch Dodge Coal Miners' Suit Over Spinoff ---------------------------------------------------------------- Law360 reported that a West Virginia federal judge on Sept. 27 dismissed a lawsuit by retired coal miners accusing Peabody Energy Corp. and Arch Coal Inc. of trying to avoid retirement liabilities by spinning off the miners' pension plans to now-bankrupt Patriot Coal Corp., saying the Employee Retirement and Income Securities Act doesn't protect a pension fund's financial stability. According to the report, U.S. District Judge Joseph Goodwin rejected the coal miners' interpretation of ERISA, saying the statute only guards the individual rights of employees to obtain benefits. The case is Lowe et al v. Peabody Holding Company, LLC et al., Case No. 2:12-cv-06925 (S.D.W.Va.) before Judge Joseph R. Goodwin. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corporation on Sept. 6, 2013, filed a bare-bones reorganization plan and promised to provide details in disclosure materials by Oct. 2. The plan in general terms said creditors will be paid with new stock and debt. Patriot previously said it was talking with Knighthead Capital Management LLC and Aurelius Capital Management LP about a rights offering to supply some of the financing to emerge from bankruptcy. PATRIOT COAL: Judge Tosses Union's Suit over Retiree Benefits ------------------------------------------------------------- Marie Beaudette, writing for Daily Bankruptcy Review, reported that a federal judge has dismissed a lawsuit filed by a union representing mine workers that claimed retiree benefits were unfairly jeopardized by Patriot Coal Corp.'s bankruptcy filing last year. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corporation on Sept. 6, 2013, filed a bare-bones reorganization plan and promised to provide details in disclosure materials by Oct. 2. The plan in general terms said creditors will be paid with new stock and debt. Patriot previously said it was talking with Knighthead Capital Management LLC and Aurelius Capital Management LP about a rights offering to supply some of the financing to emerge from bankruptcy. PATRIOT CORP: Peabody Must Produce Requested Documents by Oct. 31 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri has granted in part the Joint Motion of Patriot Coal Corporation, et al., and the Official Committee of Unsecured Creditors to compel production of documents by Peabody Energy Corporation. The Court further ordered that: 1. All documents requested must be produced on or before Oct. 31, 2013, by rolling production; 2. There will be a telephonic status hearing on Oct. 8, 2013, at 9:00 a.m. and there will be a status hearing on Oct. 22, 2013, at 9:00 a.m.; 3. At these status hearings Peabody is to report the number of documents, paper and electronic, that have been reviewed and the number of documents, paper and electronic, that have been produced as of that date; and 4. Peabody may continue to use its Relativity Assisted Review and attorney review to determine the documents to be produced. A copy of the Order is available at: http://bankrupt.com/misc/patriotcoal.doc4716.pdf About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri as contemplated by the terms of Patriot's Debtor-in- Possession financing. The Disclosure Statement is expected to be filed on or before Oct. 2, 2013, and the approval hearing is currently scheduled for Nov. 6, 2013. PATRIOT CORP: Court Okays Settlement Agreement with ACE Companies ----------------------------------------------------------------- On Sept. 27, 2013, the U.S. Bankruptcy Court for the Eastern District of Missouri approved the settlement agreement entered into on Sept. 20, 2013, between Patriot Coal Corporation, Heritage Coal Company LLC and Pine Ridge Coal Company, LLC and ACE American Insurance Company, Pacific Employers Insurance Company, Century Indemnity Company and Indemnity Insurance Company. As reported in the TCR on Sept. 12, 2013, beginning in 2008, 362 plaintiffs brought actions qgainst the Plaintiff Debtors in the Circuit Court of Boone County, West Virginia, each making substantially similar allegations and claims that the Plaintiff Debtors' mining operations near the Underlying Plaintiffs' residences in Seth and Prenter, Boone County, West Virginia resulted in (i) damage to the water supply near the Underlying Plaintiffs' residences and (ii) bodily harm to the Underlying Plaintiffs. On July 10, 2009, the Plaintiff Debtors filed a third-party complaint against, among others, the ACE Companies, one of the Plaintiff Debtors' insurers seeking coverage for the Boone County Well Water Litigation. The Boone County Well Water Litigation was settled as between the Underlying Plaintiffs and the Plaintiff Debtors, and such settlement was approved by the West Virginia Circuit Court on Nov. 17, 2011. On June 11, 2013, the Parties participated in a mediation session to explore a potential negotiated resolution of the Boone County Insurance Coverage Action. On that same date, the Parties agreed to the terms of the Settlement, which is intended to resolve all claims underlying the Boone County Insurance Coverage Action. A copy of the Order Approving the Settlement Agreement is available at http://bankrupt.com/misc/patriotcoal.doc4719.pdf About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri as contemplated by the terms of Patriot's Debtor-in- Possession financing. The Disclosure Statement is expected to be filed on or before Oct. 2, 2013, and the approval hearing is currently scheduled for Nov. 6, 2013. PENSACOLA BEACH: Has Bankruptcy Case Dismissed ---------------------------------------------- Counsel to Pensacola Beach, LLC, at a hearing on other matters in its case, made an oral motion to dismiss the Debtor's bankruptcy case voluntarily. Accordingly, in a Sept. 26 ruling, Judge William S. Shulman granted the Debtor's dismissal request with a one-year injunction from filing a Chapter 11 petition in any bankruptcy court. The Debtor is not prohibited from filing a Chapter 7 petition, the judge clarified. As previously reported by The Troubled Company Reporter on Aug. 26, 2013, American Fidelity Life Insurance Company sought dismissal of Pensacola Beach, LLC's Chapter 11 case and asked the Bankruptcy Court t0 prohibit the Debtor from filing for protection under the Bankruptcy Code for two years. Among other things, American Fidelity asserted that the case was filed in bad faith. In a Sept. 23, 2013 filing, American Fidelity submitted to the Court a first supplement to its Motion to Dismiss to update and confirm that cause still exists to dismiss the case. Among other things, American Fidelity asserts that the Debtor continued to abuse the judicial process by attempting to take actions that benefit David Brannen versus paying legitimate creditors. About Pensacola Beach Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge William S. Shulman oversees the case. Sherry F. Chancellor, Esq., at The Law Office of Sherry F. Chancellor, serves as the Debtor's counsel. The Debtor also tapped Mark J. Proctor and Travis P. Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell, Rafferty and Proctor, P.A., as attorneys in regard to the British Petroleum/Deep Water Horizon Oil Spill claims. In its petition, Pensacola Beach estimated $10 million to $50 million in both assets and debts. The petition was signed by David Brannen, managing member. In its schedules, the Debtor disclosed $22,523,252 in assets and $16,655,337 in liabilities. PENSON WORLDWIDE: Court Dismisses GTP1's Chapter 11 Case -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered on Sept. 20, 2013, an order granting the motion of Penson Technologies, LLC, and GHP1, Inc., dismissing the Chapter 11 case of GHP1. The right of GHP1 to file a future petition for relief under Chapter 7 or 11 of the Bankruptcy Code is preserves to the fullest extent allowed by, among other sections, section 349 of the Bankruptcy Code. Following dismissal of GHP1's Chapter 11 case, it will not be held liable for any claim that has been filed or asserted against any other Debtor in the Chapter 11 cases. As reported in the TCR on Sept. 20, 2013, PTL, as successor-in- interest to debtors other than GHP1, and GHP1 ask the Delaware bankruptcy court to (i) dismiss the Chapter 11 case of GHP1, Case No. 12-10070, and (ii) modify the caption of the jointly administered cases to remove GHP1 as a debtor in the cases. Counsel to the Debtors, Ryan M. Bartley, Esq., of Young Conaway Stargatt & Taylor LLP, relates that GHP1 has no liquid assets and its illiquid assets are not expected to yield any material value. On the other hand, he reveals, several claims have been asserted against GHP1, including a purported priority tax claim by the Wisconsin Department of Revenue for $137,000. Since GHP1 does not have any assets of any material value, it does not anticipate that it will be able to make distributions to satisfy claims of any of its creditors -- either under a Chapter 11 plan or a Chapter 7 liquidation. About Penson Worldwide Plano, Texas-based Penson Worldwide, Inc., and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13- 10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The Company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the Company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the Company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The Company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. Penson Worldwide's Fifth Amended Joint Liquidation Plan became effective and the Company emerged from Chapter 11 protection on Aug. 15, 2013. The Court confirmed the Plan on July 31, 2013. PENTON BUSINESS: S&P Hikes 1st Lien Credit Facility to 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services said that Penton Business Media Holdings Inc. has changed the terms of its proposed refinancing. The credit facility will now consist of a five-year $50 million revolving credit facility ($20 million drawn at closing), a $460 million first-lien term loan, and a $205 million second-lien term loan. S&P is revising its recovery rating on the company's first-lien credit facility to '2', indicating its expectation for substantial (70% to 90%) recovery for first-lien lenders in the event of a payment default, from '3' (50% to 70% recovery expectation). S&P is subsequently raising the issue-level rating on this debt to 'B+' from 'B', in accordance with its notching criteria. The issue-level and recovery ratings on the second-lien term loan are unchanged. Under the new proposed structure, pro forma lease- adjusted interest coverage is 2.6x, compared with 2.8x under the original structure, because of the increased amount of second-lien debt. The amount of debt outstanding is essentially the same. S&P views the company's business risk profile as "weak" because of its exposure to the declining print industry. The "highly leveraged" financial risk profile reflects the company's high lease-adjusted leverage of about 6x. RATINGS LIST Penton Business Media Holdings Inc. Penton Media Inc. Penton Business Media Inc. Corporate Credit Rating B/Stable/-- Upgraded; Recovery Rating Revised To From Penton Media Inc. Penton Business Media Inc. $50M revolver B+ B Recovery Rating 2 3 $460M first-lien term loan B+ B Recovery Rating 2 3 PENTON OPERATING: Moody's Revises First Lien Debt Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service changed the rating on the proposed first lien debt to be issued by subsidiaries of Penton Operating Holdings, Inc. to B1 from B2. The rating assigned to proposed second lien term loan is affirmed at Caa2. The Caa1 corporate family rating and Caa1-PD probability of default rating of Penton Business Media Holdings, Inc. remain on review for upgrade following the proposed debt refinancing. Upon closing of the transaction and review of final documentation, Moody's expects to raise the CFR to B3 from Caa1 and change the outlook to stable. The change in the first lien rating reflects additional debt cushion below the first lien facility due to the decrease in size of the proposed first lien term loan to $460 million from $520 million and the increase in size of the second lien term loan to $205 million from $150 million. The $50 million revolver size is unchanged but the revolver is expected to be partially drawn at closing to, among other things, fund the reduction in the amount of aggregate term loan borrowings. The first and second lien ratings for the proposed transaction are based on an expected B3 CFR after the closing of the refinancing. While the change in deal structure will lead to higher interest expense, Penton is still expected to maintain good free cash flow levels. The Caa1 ratings on the existing revolver and term loan were unchanged. Moody's expects to withdraw the existing instrument ratings upon completion of the transaction. If the proposed transaction is unsuccessful, the CFR would likely be confirmed at the Caa1 level. The debt will be jointly borrowed by two subsidiaries of the company, Penton Media, Inc. and Penton Business Media, Inc. Moody's will withdraw all existing ratings at Penton Business Media Holdings, Inc. and move the corporate family rating and the probability of default rating to the new Guarantor, Penton Operating Holdings, Inc. at the close of the proposed transaction. The following ratings remain on review for upgrade: Issuer Penton Business Media Holdings, Inc. Corporate Family Rating, Caa1 Probability of Default Rating, Caa1-PD The following ratings were upgraded: Issuer Penton Business Media, Inc. New $50 million revolver maturing 2018, to B1 (LGD3-32%) from B2 (LGD3-37%) New $460 million (downsized from $520 million) 1st lien term loan maturing 2019, to B1 (LGD3-32%) from B2 (LGD3-37%) The following ratings were affirmed: Issuer Penton Business Media, Inc. New $205 million (upsized from $150 million) 2nd lien term loan maturing in 2020 Caa2 (to LGD5-84% from LGD5-87%) Penton Business Media, Inc. outlook stable Ratings Rationale: The potential upgrade of the corporate family rating to B3 reflects Penton's improvement in operating performance, two recent acquisitions, and the resolution of the company's upcoming debt maturity upon the successful completion of the transaction. The rating is also supported by the company's improved business mix between print and digital content and the company's strong position in the niche verticals that it operates in. However, these positives are offset by Penton's high leverage and its cyclical business profile. Print revenues which have declined in the mid to high single digit percentage range, still account for around 50% of the company's total revenue. However, due to the lower margins of the Print business this segment accounts for a smaller amount of overall EBITDA. Following the refinancing and the full integration of Aviation Week, Moody's expects Penton's leverage to decline to approximately 5.5x (Moody's adjusted) by year end 2014 through cost synergies, modest revenue growth, and the increase in business revenue mix coming from its higher margin Event and Digital business lines compared to Print. In addition to the leverage improvement from EBITDA growth, Moody's expects Penton to generate approximately $50 million of free cash flow each year which may be used to fund future acquisitions. Moody's anticipates that Penton will have good liquidity in the 12 months following the proposed refinancing, supported by strong free cash flow and a partially drawn $50 million revolver ($20 million expected to be drawn at closing). The term loans are expected to have no financial covenants, except for a springing net leverage test on the revolver. The ratings for the proposed debt instruments reflect the expected probability of default of Penton following the closing of the refinancing, to which Moody's expects to assigns a PDR of B3-PD, the average family loss given default assessment and the composition of the debt instruments in the capital structure. The proposed 1st lien credit facilities are rated B1 (LGD3, 32%), two notches above the CFR given the loss absorption from the Caa2 (LGD5, 84%) rated 2nd lien debt. The principal methodology used in this rating was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Penton Business Media, Inc., headquartered in New York, NY, is a diversified business-to-business media company providing print, trade show and digital products and services. Penton filed for Chapter 11 bankruptcy protection in February 2010. Revenue for the twelve months ended June 30, 2013 was $316 million. PETTERS COMPANY: Fallout Continues Five Years Later --------------------------------------------------- Jacqueline Palank, writing for The Wall Street Journal, reported that five years after Ponzi-scheme operator Tom Petters's arrest, the recipients of his largesse are still paying for his crimes. According to the report, a Minnesota volunteer organization, one of nearly 400 businesses, individuals and nonprofits that faced lawsuits demanding the return of the money they received from Mr. Petters and his business empire, reached a settlement that will see it return $5,000 of the $57,500 it received. The amount of money at stake isn't much, especially compared with the more than $3.6 billion Mr. Petters was convicted of stealing from investors but the deal shows that the fallout continues from a Federal Bureau of Investigation agents' raid of Mr. Petters's Minnesota offices, which exposed a massive fraud and turned lives upside down, the report related. The Star Tribune looked back at the fateful day of Sept. 24, 2008, which prompted complex bankruptcy proceedings, hundreds of lawsuits and several prison sentences. That includes the 50-year sentence that Mr. Petters will ask a judge to shorten at a hearing next month. Five of Mr. Petters's associates have received, in total, about 30 years in prison, while a sixth got a year of home detention, the report said. Two more have yet to be sentenced, although at least one -- fundraiser Frank Vennes Jr. -- is pleading for less than the maximum 15-year sentence he faces. About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PLC SYSTEMS: Barry Honig Held 6.7% Equity Stake at Sept. 23 ----------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Barry Honig disclosed that as of Sept. 23, 2013, he beneficially owned 10,833,334 shares of common stock of PLC Systems Inc. representing 6.7 percent of the shares outstanding. Mr. Honig previously reported beneficial ownership of 6,469,467 common shares or 9.9 percent equity stake as of Feb. 22, 2013. A copy of the regulatory filing is available for free at http://is.gd/htHfJX About PLC Systems Milford, Massachusetts-based PLC Systems Inc. is a medical device company specializing in innovative technologies for the cardiac and vascular markets. The Company's key strategic growth initiative is its newest marketable product, RenalGuard(R). RenalGuard is designed to reduce the potentially toxic effects that contrast media can have on the kidneys when it is administered to patients during certain medical imaging procedures. PLC Systems disclosed a net loss of $8.38 million on $1.08 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $5.75 million on $671,000 of revenue in 2011. The Company's balance sheet at June 30, 2013, showed $2.27 million in total assets, $12 million in total liabilities and a $9.73 million stockholders' deficit. McGladrey LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has sustained recurring net losses and negative cash flows from continuing operations, which raises substantial doubt about its ability to continue as a going concern. PLY GEM HOLDINGS: Presented at Zelman Housing Summit ---------------------------------------------------- Ply Gem Holdings, Inc., participated in meetings with various investment professionals during the Zelman Housing Summit on Sept. 26th and 27th, 2013. The investor materials that were used during the meetings can be accessed under the "Presentations" header of the "Investor Relations" section of the Company's Web site at www.plygem.com. About Ply Gem Based in Cary, North Carolina, Ply Gem Holdings Inc. is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets. Ply Gem Holdings incurred a net loss of $39.05 million in 2012, as compared with a net loss of $84.50 million in 2011. The Company's balance sheet at June 29, 2013, showed $1.10 billion in total assets, $1.17 billion in total liabilities and a $70.18 million total stockholders' deficit. * * * In May 2010, Standard & Poor's Ratings Services raised its (unsolicited) corporate credit rating on Ply Gem to 'B-' from 'CCC+'. "The ratings upgrade reflects our expectation that the company's credit measures are likely to improve modestly over the next several quarters to levels that we would consider more in line with the 'B-' corporate credit rating," said Standard & Poor's credit analyst Tobias Crabtree. PMI GROUP: Emerges From Bankruptcy Protection --------------------------------------------- The PMI Group, Inc. disclosed that it has successfully emerged from bankruptcy protection effective October 1, 2013. TPG filed its chapter 11 plan of reorganization on April 30, 2013 (as amended on June 3, 2013 and September 26, 2013, the "Plan"), and the Plan was confirmed by order of the United States Bankruptcy Court for the District of Delaware dated July 25, 2013. Pursuant to the Plan, distributions of cash or cash and stock in reorganized TPG, as applicable, will be forthcoming to claimants that held valid and allowed claims as of 5:00 p.m., EDT, on October 1, 2013. "Throughout the reorganization process, the company's executives, board and professional advisors, along with its creditors' committee and its advisors, worked effectively together to unlock tens of millions of dollars of value and substantially improve recoveries for creditors," said David W. Prager, TPG's Chief Executive Officer. "Tuesday's milestone marks the successful culmination of these efforts." TPG was advised by its restructuring advisors at Goldin Associates, LLC and its attorneys at Young Conaway Stargatt & Taylor, LLP and Sullivan & Cromwell LLP. The Creditors' Committee for TPG was advised by its attorneys at Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP and its financial advisors at Peter J. Solomon Company. TPG's bankruptcy filings, including the Plan and Confirmation Order, can be found at http://www.kccllc.net/PMI About The PMI Group The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. The Official Committee of Unsecured Creditors appointed in the case retained Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company serves as the Committee's financial advisor. The U.S. Bankruptcy Court approved the Plan of Reorganization and related disclosure statement of PMI Group on July 25, 2013. PONTIKI COAL: Excel Issues WARN Notices to Mining Complex Workers ----------------------------------------------------------------- Alliance Resource Partners, L.P. on Sept. 27 disclosed that its subsidiary, Excel Mining, LLC, issued Worker Adjustment and Retraining Notification (WARN) Act notices to all employees at the Pontiki mining complex in Martin County, Kentucky. ARLP currently plans to continue operations at the Pontiki complex until early December to fulfill commitments under existing sales contracts at which time the mine is expected to cease production. "For over 36 years, the Pontiki mining complex has operated safely and profitably -- providing quality jobs for our hardworking people and meeting the needs of customers," said Joseph W. Craft III, President and Chief Executive Officer. "When Pontiki resumed production last year, we knew the market outlook was uncertain but were hopeful that conditions would improve. Unfortunately, market conditions remain weak, and we have been unable to secure new coal sales commitments for Pontiki coal beyond the existing 2013 contracts. While we are deeply saddened by the impact of this decision on our employees, their families and their communities, we have no choice but to take this unfortunate but necessary step to begin the process of winding down production operations at Pontiki." ARLP continues to execute on its growth projects in the Illinois Basin and Northern Appalachia, and management is currently evaluating options to provide employment opportunities to Pontiki personnel at other ARLP operations in those regions. Information sessions will be scheduled in the near future to allow Pontiki employees to learn more about these opportunities. Following a closure order by the Mine Safety and Health Administration with respect to the Pontiki coal preparation plant and associated surface facilities, the Pontiki mining complex was temporarily idled on August 29, 2012 and resumed operations on November 25, 2012. Due to that temporary idling of the mine, ARLP recorded in 2012 approximately $26.6 million of related losses and charges, including a $19.0 million non-cash asset impairment charge. ARLP does not currently expect the closure of the Pontiki mine to have a material impact on its 2013 financial results. The Pontiki mining complex is owned by Pontiki Coal, LLC and operated by Excel, both wholly-owned subsidiaries of ARLP. The Pontiki mining complex currently employs approximately 142 workers and has generated 2013 year-to-date coal sales and production volumes of approximately 613,000 tons and 634,000 tons, respectively. About Alliance Resource Partners, L.P. ARLP is a diversified producer and marketer of coal to major United States utilities and industrial users. ARLP, the nation's first publicly traded master limited partnership involved in the production and marketing of coal, is currently the third largest coal producer in the eastern United States with mining operations in the Illinois Basin, Northern Appalachian and Central Appalachian coal producing regions. ARLP operates eleven mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP is also constructing a new mine in southern Indiana and is purchasing and funding development of reserves, constructing surface facilities and making equity investments in a new mining complex in southern Illinois. In addition, ARLP operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. PPL MONTANA: S&P Affirms 'BB+' Rating & Revises Outlook to Stable ----------------------------------------------------------------- PPL Montana LLC has reached an agreement to sell its hydroelectric facilities to NorthWestern Energy for $900 million in cash, subject to certain adjustments. The company will also pay $271 million to terminate a sale-leaseback arrangement for an interest in the Colstrip coal-fired facility. S&P expects PPL Corp. to apply estimated net proceeds of about $623 million for debt reduction at supply affiliate PPL Energy Supply LLC. S&P is revising the rating outlook on PPL Montana's $338 million pass- through certificates (outstanding: about $90 million) due 2020 to stable from negative and affirming our 'BB+' rating on the certificates. On Sept. 30, 2013, S&P revised the rating outlook on PPL Montana LLC's $338 million pass-through certificates (outstanding: about $90 million) due 2020 to stable from negative and affirmed its 'BB+' issue-level rating on the certificates. On Sept. 26, 2013, PPL Corp. announced that affiliate PPL Montana LLC has reached an agreement to sell its hydroelectric facilities to NorthWestern Energy for $900 million in cash, subject to certain adjustments. The agreement includes 11 Montana hydroelectric power plants with 633 megawatts of generating capacity and the Hebgen Lake Reservoir. The sale is expected to close in the second half of 2014, subject to Federal Energy Regulatory Commission (FERC) and Montana Public Service Commission approval. The agreement does not include PPL Montana's interest in the Colstrip facility or its J.E. Corette coal-fired facility located near Billings. The Colstrip plant is jointly owned by PPL Montana and five other companies, including NorthWestern Energy. PPL Montana previously announced that it plans to mothball the Corette plant in April 2015. "We had revised the outlook to negative in July 2013 due to concerns about progressively weaker market fundamentals for PPL Montana that had started affecting its cash flows in the first quarter of 2013. We expected financial measures to deteriorate significantly by 2015. With the sale, and expected debt pay down by year-end 2013, those concerns are no longer relevant," said Standard & Poor's credit analyst Aneesh Prabhu. PRESIDENTIAL REALTY: Bank Takes Possession of Hato Rey Property --------------------------------------------------------------- As previously reported, a judgment of foreclosure was granted against PDL, Inc. & Associates, Limited Co-Partnership against Presidential Realty Corporation's Hato Rey property in Puerto Rico. On Sept. 23, 2013, U.S. Bank National Association, as trustee, as successor-in-interest to Bank of America, National Association, as trustee for the Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1998-C1, acting by and through Berkadia Commercial Mortgage LLC in its capacity as special servicer pursuant to the pooling and servicing agreement dated Oct. 11, 1998, took possession of the Hato Rey property pursuant to the foreclosure judgment. The Company has been advised that the sale price was less than the amount of the judgment. The Company has reported the Hato Rey property since March 31, 2012, as a discontinued operation. The claims brought in the foreclosure action against PDL, Inc., the Company, Lester Cohen and F.D. Rich Company of Puerto Rico, Inc., with liability among them to be allocated 1 percent, 45 percent, 9 percent and 45 percent, respectively, under the terms of certain guarantees issued by them in connection with the mortgage loans, for alleged physical waste to the Property and, the costs of certain repairs to the property of not less than $1,100,000 and the reasonable legal costs and expenses in connection with the enforcement of the loan documents remain outstanding. The lender has not asserted any claims against the Company other than those asserted under the guarantees. The Company believes that the likelihood that the Company will be held liable for the claims asserted under the guarantees is remote. About Presidential Realty Headquartered in White Plains, New York, Presidential Realty Corporation, a real estate investment trust, is engaged principally in the ownership of income-producing real estate and in the holding of notes and mortgages secured by real estate or interests in real estate. On Jan. 20, 2011, Presidential stockholders approved a plan of liquidation, which provides for the sale of all of the Company's assets over time and the distribution of the net proceeds of sale to the stockholders after satisfaction of the Company's liabilities. Following the 2011 results, Holtz, Rubenstein Reminick LLP, in Melville, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency. The Company reported a net loss of $6.16 million in 2011, compared with a net loss of $2.57 million in 2010. The Company's balance sheet at June 30, 2013, showed $15.83 million in total assets, $20.33 million in total liabilities and a $4.49 million total deficit. PRIME PROPERTIES: Files Ch. 11 Plan and Disclosure Statement ------------------------------------------------------------ Prime Properties of New York, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of New York a plan of reorganization and accompanying disclosure statement providing for the payment of all administrative claims and priority claims in full upon confirmation. The Plan also offers to pay general unsecured creditors 100% of their claims, from a fund that will be established by the Debtor for the purpose of implementing the Plan. The Debtor expects to satisfy the claim asserted by FTBK Investor II, LLC, as prepetition lender, by litigating in the Court to determine the true amount of the allowed secured claim that will be treated under the Plan. This will be accomplished by either refinancing the mortgage or selling the real property located at 300 Tenth Street and 304 Tenth Street, in Brooklyn, New York, and paying off the secured debt once the Court has determined the amount that is owed to the Lender. A full-text copy of the Disclosure Statement dated Sept. 18, 2013, is available for free at http://bankrupt.com/misc/PRIMEds0918.pdf M. David Graubard, Esq., at Kera & Graubard, in New York, represents the Debtors. Prime Properties of New York, Inc., filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44020) on June 28, 2013. M. David Graubard, Esq. at New York, NY, serves as counsel to the Debtor. The Debtor estimated up to $12,000,000 in assets and up to $8,500,000 in liabilities. An affiliate, 234 8th St. Corp., sought Chapter 11 protection (Case No. 13-42244) on the March 14, 2013. PROGRESSIVE SOLUTIONS: S&P Assigns 'B' CCR; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to pharmacy benefit manager (PBM) Progressive Solutions LLC. The combined company will be headquartered in Memphis, Tenn. The outlook is stable. At the same time, S&P assigned the company's proposed $540 million first-lien credit facility (consisting of a $50 million revolver and $490 million term loan) its 'B' issue-level rating with a recovery rating of '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. S&P also assigned the company's proposed $160 million second-lien term loan its 'CCC+' issue-level rating and '6' recovery rating, indicating its expectation for negligible (0%-10%) recovery in the event of payment default. "Our ratings on Progressive Solutions reflect the company's "highly leveraged" financial risk profile, with pro forma leverage of more than 6.5x and our expectation that the leverage will remain more than 5x during the next two years," said credit analyst Shannan Murphy. "The rating also reflects our assessment of Progressive Solutions' business risk profile as "weak", reflecting the company's narrow business focus and relatively small addressable market -- factors that we believe are only partially offset by the combined company's leading position among PBMs focused on workers' compensation." The stable rating outlook on Progressive Solutions reflects S&P's expectation that high-single-digit revenue growth and about 200 bps of EBITDA margin expansion will still result in leverage in the mid-5x range and FFO to total debt in high-single digits at the end of 2014, consistent with a highly leveraged financial risk profile. S&P could consider a downgrade in the unlikely event that cash flows fall meaningfully short of its expectations, resulting in FFO to total debt in the low-single digits. S&P believes this could happen if Progressive experienced a 10% revenue decline coupled with about 100 bps of margin contraction (versus S&P's current expectation of around 200 bps of margin expansion), which would likely be consistent with the loss of a major customer. While S&P expects Progressive to generate steady EBITDA growth, S&P views an upgrade as unlikely based on its expectation that sponsor ownership will shape a financial policy that uses excess debt capacity to reward shareholders or grow the company, rather than to permanently reduce leverage. Although unlikely, S&P could consider a higher rating if the company were able to reduce leverage below 5x while sustaining FFO to total debt above 12%. In S&P's view, this could occur if the company grows revenue in the low-double-digit range over the next two years and expands EBITDA margins to about 11.5%. An equally important factor would be S&P's assessment that the company's financial policy would be consistent with the maintenance of those credit measures on an ongoing basis. PROVIDENT FINANCING: Fitch Affirms BB+ Capital Securities Rating ---------------------------------------------------------------- Fitch Ratings has affirmed Unum Group Inc.'s (NYSE:UNM) holding company ratings, including the senior debt rating at 'BBB', as well as the Insurer Financial Strength (IFS) ratings of all domestic operating subsidiaries at 'A'. The Rating Outlook is Stable. Key Rating Drivers The rating rationale includes UNM's overall operating performance, which has remained strong despite continued adverse global economic conditions; conservative investment portfolio; solid capital and liquidity at both the insurance subsidiary and holding company levels; the company's leadership position in the U.S. employee benefits market; and increased diversification. Offsetting these positives are Unum U.K.'s somewhat weak recent results and continued challenges UNM faces in managing its run-off long-term care book of business, particularly in the current low interest rate environment. The Stable Outlook reflects Fitch's belief that while UNM's premium growth and operating margins continue to be challenged by the weak economic environment and competitive market conditions, the company's overall profitability will continue to support the current rating. Operating margins in UNM's U.S. disability business have held up better than Fitch's expectations, and they have been favorable relative to the company's peers. While Unum U.K. results have shown deterioration, particularly within the group life segment, the company has taken steps to improve results going forward, including implementing significant rate increases and claims management improvements while reducing its focus on the large-case market. Unum U.K. also entered into a 50% coinsurance arrangement effective Jan. 1, 2013 designed to reduce earnings volatility and capital requirements. The company reported pretax operating earnings within this unit of $64.8 million in the first half 2013, down modestly from $68.8 million for the same period in 2012. During the first half of 2013, UNM repurchased $194 million of its shares, down from $300 million for the same period in 2012. Fitch's expectation is that further share repurchases will be funded through operating earnings to mitigate the impact on financial leverage and the capitalization of the operating subsidiaries. Further, Fitch generally views measured stock repurchase as a more prudent use of capital than acquisitions or premium growth in a soft rate environment. UNM's financial leverage was 24% at June 30, 2013. Fitch considers the company's debt service capacity to be strong for the rating level, with GAAP earnings-based interest coverage of 9.5x in 2013. Holding company liquidity totaled $597 million at June 30, 2013, down from $805 million at year-end 2012. UNM's risk-based capital of its U.S. insurance subsidiaries was estimated at 398% at June 30, 2013, which is at the high end of management's near- to intermediate-term target of 375%-400%. Rating Sensitivities Key rating triggers that could lead to an upgrade include: -- Improved general economic conditions including growth in employment, salaries and disposable income which enable UNM to achieve its long-term target of 5%-7% annual earnings growth on its core operations; -- GAAP earnings-based interest coverage over 12x and statutory maximum allowable dividend coverage of interest expense over 5x; -- U.S. risk-based capital ratio above 400% and run-rate financial leverage below 20%. Key rating triggers that could lead to a downgrade include: -- Deterioration in financial results that includes an increase in the U.S. group disability benefit ratio over 87%; GAAP earnings-based interest coverage falling below 8x and statutory maximum allowable dividend interest expense coverage falling below 3x; --Any additional reserve strengthening charges in the near term; -- Holding company cash falling below management's target of approximately 1x fixed charges (interest expense plus common stock dividend), or roughly $290 million; -- U.S. risk-based capital ratio below 350% and financial leverage above 25%. Fitch affirms the following ratings with a Stable Outlook: Unum Group Inc. -- Issuer Default Rating (IDR) at 'BBB+'; -- 7.125% senior notes due Sept. 30, 2016 at 'BBB'; -- 7% senior notes due July 15, 2018 at 'BBB'; -- 5.625% senior notes due Sept. 15, 2020 at 'BBB'; -- 7.25% senior notes due March 15, 2028 at 'BBB'; -- 6.75% senior notes due Dec. 15, 2028 at 'BBB'; -- 7.375% senior notes due June 15, 2032 at 'BBB' -- 5.75% senior notes due Aug. 15, 2042 at 'BBB'. Provident Financing Trust I -- 7.405% junior subordinated capital securities at 'BB+'. UnumProvident Finance Company plc, -- 6.85% senior notes due Nov. 15, 2015 at 'BBB'. Unum Group members: Unum Life Insurance Company of America Provident Life & Accident Insurance Company Provident Life and Casualty Insurance Company The Paul Revere Life Insurance Company The Paul Revere Variable Annuity Insurance Company First Unum Life Insurance Company Colonial Life & Accident Insurance Company -- IFS at 'A'. PROXYMED INC: Dist. Ct. Denies Kelly's Bid to Dismiss NHB Suit -------------------------------------------------------------- In the action styled, NHB ASSIGNMENTS LLC, LIQUIDATING TRUSTEE, ON BEHALF OF THE LIQUIDATING TRUST, Plaintiff, v. GENERAL ATLANTIC LLC and BRADEN KELLY, Defendants, Civ. No. 12-1020-SLR (D. Del.), District Judge Sue Robinson: -- denied Mr. Kelly's motion to dismiss for lack of jurisdiction as moot; and -- granted the plaintiff's motion for leave to file an third amended complaint. NHB Assignments LLC is the liquidating trustee of the ProxyMed, Inc. liquidating trust. It filed the action in December 2010 in U.S. Bankruptcy Court for the District of Delaware, alleging that General Atlantic LLC and Mr. Kelly breached their fiduciary duties to ProxyMed, formerly the subject of a chapter 11 bankruptcy case. The District Court further ordered that if if either defendant contests the court's personal and/or subject matter jurisdiction, the defendant will file a motion to dismiss raising those issues on or before October 2, 2013. A copy of the District Court's Aug. 29, 2013 Memorandum Order is available at http://is.gd/KDjxm5from Leagle.com. NHB Assignments LLC is represented by Norman M. Monhait, Esq. -- nmonhait@rmgglaw.com -- of Rosenthal, Monhait & Goddess, P.A.; Jeffrey A. Klafter, Esq. and Rachel Berlin of Klafter Olsen & Lesser LLP, at Two International Drive, Suite 350 in Rye Brook, NY 10573. Braden Kelly is represented by Gregory V. Varallo, Esq. -- varallo@rlf.com -- of Richards, Layton & Finger, PA and Laura C. Bower, Esq. -- lbower@paulweiss.com -- of Paul Weiss Rifkind Wharton & Garrison LLP. QUEBECOR WORLD: Trustee May Recoup $115,000 Against Binswanger -------------------------------------------------------------- Bankruptcy Judge Sean H. Lane granted the motion for summary judgment filed by Eugene I. Davis, as Litigation Trustee for the Quebecor World Litigation Trust, in the adversary proceeding he filed against Binswanger Corporate Services, Inc. The Trustee seeks to avoid and recover a single alleged preferential transfer totaling $109,500 made by the Debtors to Binswanger during the 90- day preference period before the Debtors filed their Chapter 11 case, plus prejudgment interest in the amount of $15,763.20. Binswanger opposes the motion. The case is, Eugene I Davis, as Litigation Trustee for the Quebecor World Litigation Trust, Plaintiff, v. Binswanger Corporate Services, Inc. dba Binswanger, Defendant, Adv. Proc. No. 10-01250 (Bankr. S.D.N.Y.). A copy of the Court's Sept. 25, 2013 Memorandum of Decision is available at http://is.gd/w5xwEXfrom Leagle.com. Thomas D. Bielli, Esq., at O'Kelly Ernst & Bielli, LLC, represents Binswanger Corporate Services, Inc. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI was the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. On June 30, 2009, Judge Peck and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. On July 21, 2009, Quebecor World Inc. and its affiliated debtors and debtors-in-possession emerged from protection under the Companies' Creditors Arrangement Act in Canada and Chapter 11 of the U.S. Bankruptcy Code. Quebecor World emerged from bankruptcy as "World Color Press Inc." RDC PROPERTIES: Case Summary & 5 Unsecured Creditors ---------------------------------------------------- Debtor: RDC Properties, LLC P.O. Box 388 Edgefield, SC 29824 Case No.: 13-11824 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Southern District of Georgia (Augusta) Debtor's Counsel: James C. Overstreet, Jr., Esq. KLOSINSKI OVERSTREET, LLP #7 George C. Wilson Ct. Augusta, GA 30909 Tel: 706-863-2255 Fax: 706-863-5885 Email: jco@klosinski.com Total Assets: $9.36 million Total Liabilities: $8.71 million The petition was signed by Bettis C. Rainsford, manager. A list of the Debtor's 5 largest unsecured creditors is available for free at http://bankrupt.com/misc/gasb-13-11824.pdf RESIDENTIAL CAPITAL: Proposes $2MM Bonus for Restructuring Officer ------------------------------------------------------------------ Michael Bathon at Bloomberg News reports that Residential Capital LLC, the defunct mortgage lender, asked a judge for permission to pay its chief restructuring officer a $2 million bonus should the company win final court approval of its bankruptcy reorganization plan. According to the report, Lewis Kruger, who was hired in February to help negotiate a plan of reorganization, would collect the "success fee" should the plan be implemented, according to documents filed Sept. 27 in U.S. Bankruptcy Court in Manhattan. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities 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. ResCap, based in New York, has been settling disputes with creditors as it prepares for a hearing in November 2013 where it will ask a judge to approve a plan to distribute billions of dollars to creditors. Under the plan, unsecured creditors would get are covery of 36 percent on their claims, while debts backed by collateral will be paid in full. The plan is based on a $2.1 billion settlement with ResCap's parent, Ally Financial Inc., and creditors, including mortgage bond investors who blame both companies for their losses. 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). RITE AID: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its ratings on Rite Aid Corp., including the corporate credit rating, which S&P raised to 'B' from 'B-'. The outlook is stable. "The upgrade reflects Rite Aid's improving earnings and modest, but ongoing debt reduction. We believe Rite Aid can sustain its profitability in fiscal 2014 despite our expectations for meaningful gross margin erosion in the second half of fiscal 2014 (ending February 2014) due to lower benefit from fewer generic drug introductions and continued reimbursement rate pressure," said credit analyst Ana Lai. "We also believe improving free cash flow generation will enable Rite Aid to gradually reduce its debt burden and maintain debt leverage below 7.0x in the next year." The stable outlook reflects S&P's expectations for the company to sustain improved profitability in the next year while maintaining debt leverage below 7.0x due to modest debt reduction. S&P could consider a lower rating if competitive pressures or poor store strategy execution causes lower than expected sales or greater profit declines such that debt leverage returns to above 7.0x on a sustained basis. A lower rating can also result from wider than expected gross margin contraction from reimbursement rate pressure. S&P could consider a lower rating if sales are flat while gross margin narrows by 80 bps. S&P could consider a higher rating if Rite Aid continues to make progress in improving its store operations through store remodels and improving comparable-store sales, resulting in sustained growth in profitability, so that it narrows its gap with its peers and continued debt reduction such that debt leverage approaches 5.0x. This could occur if sales increased by about 4% while gross margin increases 90 bps. ROSEVILLE SENIOR: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Roseville Senior Living Properties, LLC 2050 Center Avenue Suite 640 Fort Lee, NJ 07024 BERGEN, NJ Case No.: 13-31198 Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Honorable Donald H. Steckroth Debtor's Counsel: Walter J. Greenhalgh Duane Morris, LLP One Riverfront Plaza 1037 Raymond Blvd., Suite 1800 Newark, NJ 07102 Tel: 973-424-2000 Fax: 973-424-2001 Email: wjgreenhalgh@duanemorris.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Edrel, managing director, Meecorp Capital Markets, Inc. The Debtor did not file its list of largest unsecured creditors when it filed its petition. ROTECH HEALTHCARE: Emerges From Bankruptcy Owned by Noteholders --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Rotech Healthcare Inc., the third-largest U.S. provider of home respiratory equipment and services, on Sept. 27 implemented the reorganization plan approved when a bankruptcy judge in Delaware signed a confirmation order on Aug. 29. According to the report, confirmation was simplified because the bankruptcy judge had disbanded the shareholders' committee and ruled that Rotech was insolvent. The conclusion on insolvency meant shareholders weren't entitled to anything. Largely negotiated before the Chapter 11 filing in April, the plan had an estimated recovery of 28 percent to 47 percent for holders of $290 million in 10.5 percent second-lien notes who assumed ownership. Unsecured creditors received a recovery estimated to range from 12 percent to 25 percent. Rotech had been in bankruptcy before. The report notes that the second-lien notes last traded on Sept. 17 for 48.5 cents on the dollar, down 7 percent from where they traded on Aug. 2, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Rotech entered bankruptcy with about 420 centers in almost all states, usually in rural areas. Rotech reported a $61.1 million net loss in 2012 on net revenue of $462.2 million. The operating loss for the year was $700,000. The net loss in 2011 was $16.2 million. The balance sheet as of Sept. 30 had assets of $256 million and liabilities of $512 million. The Plan BankruptcyData reported that Rotech Healthcare's Second Amended Joint Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on August 29, 2013. As a result of the bankruptcy, Rotech Healthcare substantially deleveraged its balance sheet, reduced its outstanding debt by more than $300 million and reduced its annual cash interest expense from $60 million to less than $20 million. Steven P. Alsene, Rotech Healthcare's president and chief executive officer, remarks, "Today marks a new beginning for Rotech with the financial restructuring behind us, we have the increased financial flexibility, which we believe will allow us to compete aggressively in today's home medical equipment market." According to the documents filed with the Court , "Under the Plan, the Company anticipates: (i) each holder of an Allowed First Lien Claim shall receive Cash in an amount equal to the Allowed amount of its First Lien Claim; (ii) each holder of an Allowed Second Lien Notes Claim shall receive (x) its pro rata share of 100% of the common equity of the reorganized Company, subject to dilution by the equity interests issued under the Management Equity Incentive Program (thereby eliminating in excess of $300 million of secured debt), and (y) the right to participate in the New Second Lien Term Loan; (iii) all the Company's outstanding shares will be cancelled and extinguished, and no holder of an Equity Interest in Rotech shall receive a distribution on account thereof; and (iv) trade creditors and vendors who agree to maintain or reinstate payment terms as existing prior to the Commencement Date shall be paid in full upon the effective date of the Plan. Other unsecured claims will be paid their Pro Rata Share of $1,500,000 and except as otherwise set forth in the Plan." About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is represented by Bayard, P.A. as Delaware counsel. Rotech on Aug. 29 disclosed that the Bankruptcy Court has approved the Second Amended Joint Plan of Reorganization, along with $358 million of exit financing commitments received from Wells Fargo and certain existing holders of the 10.5% Senior Second Lien Secured Notes. The reorganization plan was confirmed at a court hearing in Delaware and was supported by the Statutory Committee of Unsecured Creditors. Creditors entitled to vote overwhelmingly voted in favor of the reorganization plan. Under the reorganization plan, the Company's existing common stock will be cancelled and substantially all of the new common stock of reorganized Rotech will be distributed to holders of the 10.5% Senior Second Lien Secured Notes. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. SARKIS INVESTMENTS: Court OKs Baker Hostetler as General Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California granted Sakris Investments Company LLC permission to hire Baker & Hostetler, LLP, as its general counsel nunc pro tunc to July 29, 2013. The firm will be paid for its services according to its standard hourly rates which range from $125 to $650 per hour, and will be reimbursed for actual and necessary out-of-pocket expenses. Sarkis Investments Company, LLC, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-29180) on July 29, 2013. Pamela Muir signed the petition as manager. The Debtor estimated assets and debts of at least $10 million. Ashley M. McDow, Esq., at Baker & Hostetler, LLP, serves as the Debtor's counsel. SHARP ELECTRONICS: S&P Affirms & Withdraws 'B+' Rating ------------------------------------------------------ Standard & Poor's Ratings Services said it had affirmed its 'B+' long-term and 'B' short-term corporate credit and commercial paper program ratings on Sharp Electronics Corp., a U.S.-based subsidiary of Japan-headquartered Sharp Corp. (B+/Negative/B). S&P then withdrew the ratings on Sharp Electronics at Sharp Corp.'s request. The outlook on our corporate credit rating on Sharp Electronics was negative at the time of the withdrawal. SYNCREON GROUP: Moody's Assigns 'B2' CFR; Outlook Negative ---------------------------------------------------------- Moody's Investors Service assigned B2 CFR and B2-PD PDR to syncreon Group Holdings B.V. and withdrew the B2 CFR and B2-PD PDR of syncreon Holdings. Moody's also assigned ratings to the proposed debt issuance of syncreon Group B.V.: Ba3 to the $525 million secured term loan to $100 million secured revolving credit facility, and a Caa1 to the $225 million senior unsecured notes. The outlook is negative. Proceeds of the new debt offerings will be used to: repay the company's $400 million of existing debt, fund a $425 million distribution to existing owners, and provide liquidity. Ratings Rationale: The B2 CFR reflects syncreon's ability to achieve solid returns and operating margins that are superior to those typical of many of the company's competitors in the global supply chain logistics sector. This is due primarily to the company's ability to enter into contracts that involve more value-added activities than is typical among conventional logistics companies. In recent years, syncreon has generated operating margins in excess of 10%, as compared to industry peers that have reported low- to mid-single digit operating margins. The proposed transaction, including the debt-funded distribution to shareholders, will significantly increase the company's pro- forma leverage (as measured by debt/EBITDA) from 4.8 times to approximately 7.0 times. However, this increase in leverage should be mitigated by several factors. Most importantly, the all-in interest rate associated with the new debt will be significantly lower than that of the debt that will be repaid. Consequently, the pro forma level of EBITA/interest should not weaken materially from the current level of 1.7 times. In addition, syncreon will continue to benefit from strong margins, a highly competitive position in the logistics market, and a capable management team. These mitigants should enable the company to steadily reduce leverage. However, the expected reductions in leverage will require syncreon to maintain its high margins as it attempts to expand its penetration of existing customers. The negative outlook reflects syncreon's aggressive financial strategy as evidenced by the current $425 million distributions to shareholders, which comes less than twelve months after a $100 million distribution completed during November of 2012. syncreon's liquidity position is viewed as good over the coming 12 month period. The company is expected to have adequate cash reserves on hand (approximately $70 million), with negative free cash flow anticipated over that period. The company has ample access to a $100 million borrowing based revolving credit facility. This facility is expected to be undrawn on close of the refinancing transactions. As the company operates under an asset- light business model, capital expenditure requirements are expected to be manageable, and will not likely require material external funding going forward. However, the company's internal cash sources could be challenged if operating margins deteriorate and are not restored. In that case, Moody' believes that the company could begin to make use of drawings under the credit facility to make up for cash shortfalls. Also, while it is expected that the company will be in-compliance with financial covenants over the near term, the maintenance of comfortable headroom to compliance levels will be contingent upon the company's ability to grow and maintain its operating margins during this period. Moreover, liquidity could become constrained if a substantial amount of cash or the revolvers were employed for large acquisitions. Ratings could be revised downward if the company fails to meet its operating plans, possibly through failure to execute deleveraging strategy, or if it aggressively pursues large levered acquisitions that prove difficult to integrate, resulting in deteriorating profitability or weaker credit metrics. Specifically, a downgrade could be warranted if operating margins were to fall below 8%, if EBIT to Interest were sustained below 1.2 times, or if Debt to EBITDA exceeded 5.5 times. A weakened liquidity condition, possibly characterized by increased reliance on use of the credit facility to make up for cash shortfalls or tightness to prescribed financial covenants, could also result in a ratings downgrade. Since debt is not likely to be reduced materially over the next few years as the company is expected to continue to grow through acquisitions while expanding into new markets, ratings are not expected to be upgraded over the near term. However, over the longer term, operating improvements or de-leveraging that would result in Debt to EBITDA of less than 4 times and EBIT to Interest of over 2 times along with positive free cash flow generation to bolster liquidity would be factors that could lead to upward rating consideration. syncreon's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) Moody's projections of the company's performance over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of syncreon's core industry and syncreon's ratings are believed to be comparable to those of other issuers of similar credit risk. syncreon Holdings, an Irish public limited company with operational headquarters in Auburn Hills, MI, is provider of logistics and supply chains solutions. The principal methodology used in this rating was the Global Surface Transportation and Logistics Companies Industry Methodology published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ST. JOSEPH HEALTH: Fitch Keeps 'CCC' Bond Rating on Watch Positive ------------------------------------------------------------------ Fitch Ratings has maintained the Rating Watch Positive on the following bonds, currently rated 'CCC' by Fitch, issued by the Rhode Island Health and Educational Building Corporation on behalf of St. Joseph Health Services of Rhode Island (SJHS): -- $16.5 million, series 1999. Security The bonds are secured by a pledge of SJHS gross receipts, real estate, and debt service reserve fund. Key Rating Drivers Rating Watch Positive: The continuation of Rating Watch Positive reflects the recently signed asset purchase agreement between SJHS and Prospect Medical Holdings (PMH), a for-profit California healthcare company that owns and operates several facilities in California and Texas. As a part of the agreement, the bonds will be redeemed by St. Joseph Health Services of Rhode Island upon finalization of the joint venture. Fitch expects the joint-venture to be finalized between both organizations and sanctioned by the state over the next 6 months. Weak Financial Profile: SJHS' financial profile continues to be characterized by operating losses, extremely low liquidity, and inadequate debt service coverage. However, debt service payments continue to be paid on time. Weak Service Area Characteristics: Located in North Providence, Rhode Island, SJHS' service area is challenged by high unemployment, stagnant population growth, and below-average wealth indicators. Light Debt Burden: SJHS has a relatively light debt burden as maximum annual debt service (MADS; $2.1 million) represented 1.5% of total annualized revenues through the June 2013 interim period (nine months; unaudited). Rating Sensitivity Expected Debt Redemption: Fitch would view positively the completed joint-venture agreement between SJHS and PMH as the bonds are expected to be redeemed in full. Credit Profile SJHS is located in Rhode Island. The organization operates a 359- bed acute care general hospital and integrated network of primary care and specialty clinics. In fiscal 2012, SJHS had $153.5 million in total revenue. SJHS covenants only to disclose annual audited financial information to EMMA. The fiscal 2012 audit (Sept. 30 year end) was not released until March 2013 and SJHS was in compliance with bond covenants. SJHS has a very conservative debt profile with 100% fixed rate bonds and no outstanding swaps. STOCKTON, CA: Discloses Some Details on Debt-Adjustment Plan ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that that Stockton, California, published the outline of a proposed debt-adjustment plan to serve as the foundation for further negotiations with creditors. The plan is on the calendar for ratification by the city council at a meeting Oct. 3. According to the report, the plan contains an offer to bondholder Franklin Resources Inc. and a settlement with Assured Guaranty Corp., which insured $164.7 million in bonds. Details of the Assured Guaranty settlement won't be disclosed until this week. The plan gives residents the option of accepting a $28 million sales tax increase or taking $11 million in reduction of city services. Although the city will continue payments to the state's retirement system, Stockton will end subsidies for retirees' health care. Retirees would receive $5 million, equal to about 1 percent of the lost benefits. The report notes that other unsecured creditors would be offered the same recovery. The bankruptcy judge determined in June that Stockton is eligible for the Chapter 9 municipal bankruptcy. Some creditors are contending that leaving pensions intact while forcing other creditors to accept less is a fatal defect in the plan. At the time, the judge said the good faith question and treatment of pensions would be an issue when the plan comes up for approval later. About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. SYNCREON GROUP: S&P Rates $625MM Seenior Secured Facility 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'B' corporate credit rating to syncreon Group Holdings B.V. The outlook is stable. At the same time, S&P assigned its 'B' issue- level rating and '4' recovery rating to the company's proposed $625 million senior secured credit facility. The '4' recovery rating indicates S&P's expectation for an average (30%-50%) recovery in a default scenario. S&P also assigned its 'CCC+' issue-level rating and '6' recovery rating to the company's proposed $225 million senior unsecured notes. The '6' recovery rating indicates S&P's expectation for a negligible (0%-10%) recovery in a default scenario. The company's subsidiaries syncreon Group B.V. and syncreon Global Finance (US) Inc, will be the borrowers under the proposed credit facility and notes. S&P also lowered its ratings on the company's subsidiary syncreon Holdings Ltd., including the corporate credit rating to 'B' from 'B+', and removed the ratings from CreditWatch, where they were placed with negative implications on Sept. 18, 2013. The outlook on the long-term corporate credit rating is stable. "The rating on syncreon Group Holdings B.V. reflects our assessment of the company's 'weak' business risk profile as a global specialized contract logistics and supply chain provider, and its 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst Carol Hom. S&P expects the company's revenues to increase by about 5% in 2013, reflecting moderate growth in its end markets--specifically in the technology and automotive industries. S&P also expects that the company's credit measures, which are somewhat weaker than its expectations for the rating, will gradually improve over the next 12-18 months through a combination of debt reduction and some margin expansion and will likely remain higher than 6x total debt to EBITDA over that period. S&P believes the company's cash balance and adequate availability under its revolver support its "adequate" liquidity. "The downgrade of syncreon Holdings Ltd. reflects our view that although the leverage on the company's existing debt is not overly aggressive, management has demonstrated a willingness to increase leverage beyond our expectations for a 'B+' rating," said Ms. Hom. S&P views the company's financial policy as "very aggressive." The company recently announced that Centerbridge Partners L.P. will take a substantial minority stake in syncreon Holdings Ltd. Upon the transaction's closing, S&P will withdraw all ratings associated with syncreon Holdings Ltd. The outlook is stable. "Pro forma for the transaction, we expect syncreon Group Holdings B.V.'s credit metrics to be weaker than our expectations for the rating," said Ms. Hom. "However, we believe that the credit metrics will gradually improve over the next 12-18 months through a combination of debt reduction and some profit expansion and that leverage will likely remain higher than 6x debt to EBITDA during that period." S&P could lower the rating if a worse-than-expected market downturn or loss of contracts with key customers causes the company's revenue and margins to contract by more than 10% and 100 basis points, respectively. S&P could also lower the rating if additional debt hurts the company's liquidity or causes meaningful deterioration of its credit measures. This could occur if debt to EBITDA does not improve from its pro forma leverage at transaction's closing. S&P could raise the rating one notch if stronger-than-expected growth in the company's end markets and a more conservative financial policy causes leverage to improve to 5x or less for an extended period and if S&P don't expect a subsequent reversal of credit metrics. syncreon does not release its financial results publicly. T.C. CUISINE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: T.C. Cuisine, LLC dba Osaka West 804 N HWY 190 Covington, LA 70433 St. Tammany, LA Tel: (985) 871-8199 Case No.: 13-12670 Chapter 11 Petition Date: September 27, 2013 Court: U.S. Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Cynthia Etheridge Daniels Butler Mordock, PLC 8220 Maple Street New Orleans, LA 70118 Tel: (225) 333-6761 Email: cynthiaedaniels@yahoo.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Theodore Chau, manager and member. The Debtor did not file its list of largest unsecured creditors when it filed its petition. TPF II LC: S&P Rates $370MM Senior Secured Facilities 'BB-' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' debt rating and '1' recovery rating to TPF II LC LLC's (TPF II) $370 million senior secured credit facilities: a $350 million term loan B tranche due 2019 and $20 million senior secured working capital facility due 2018. The rating reflects S&P's review and assessment of final documents and legal opinions. The outlook is stable. The 'BB-' rating for TPF II's portfolio of three merchant peaking power plants in Illinois and Ohio reflects a high debt leverage that relies on merchant peaking energy revenues, which are inherently volatile, but also relies favorably on PJM Interconnection capacity market revenues that are much less risky than energy revenues. Revenues from capacity and ancillary services provide generally about 80% to 85% of revenue (depending on the future year), making the credit story mostly a view of long-term PJM capacity markets. The plants have limited geographic diversity--Crete with 328 megawatts (MW) and Lincoln with 656 MW are located south of Chicago in the PJM-ComEd zone. and the 850 MW Rolling Hills is located in the PJM-AEP zone in southeast Ohio. Each plant earns the same base PJM regional transmission organization (RTO) zone capacity price. Given the reliance on capacity revenues, availabilities need to be high. NAES Corp. operates Crete and Lincoln, and TPF Operations operates the larger Rolling Hills plant. The plants' strong operational record will likely continue, in S&P's view, given that they use proven technology. S&P also views NEAS's operating track record as above average. Crete and Lincoln use the GE 7EA machine while Rolling Hills employs the Siemens 501FD2 technology introduced in 2001. S&P notes that the Siemens technology has reported some issues on some units but these have not occurred at the Rolling Hills units. Service agreements with GE and Siemens and a major maintenance reserve filled on a forward 18-month look- ahead basis further mitigate operations and maintenance (O&M) performance and cost risk. The stable outlook reflects S&P's view that cash flows will be stable over the next several years based on most revenue coming from capacity payments that are known through mid-2017 and based on proven plant performance assumptions. Furthermore, S&P thinks it likely that the plants will show very low capacity factors, further mitigating operation risk. An improvement in the rating would require a track record of sound operational performance, continued comfort that quarterly covenants would not be tripped, and lower debt at maturity in S&P's base case -- below around $50/kW -- that would come from energy revenues that well exceed S&P's expectations or capacity prices from mid-2017 onward well above $90/kW-month. Developments that could result in a rating downgrade would be operational problems that materially reduce availability, much lower-than-expected energy revenue from Rolling Hills, or debt at maturity of 2018 -- generally around the $100/kW mark. TRIMAS CORP: Moody's Hikes CFR to 'Ba2'; Outlook Stable ------------------------------------------------------- Moody's upgraded TriMas' Corporation's Corporate Family Rating and Probability of Default Rating to Ba2 and Ba2-PD, respectively. Moody's also assigned a Ba2 to TriMas Corporation's new senior secured facility issued by its subsidiary TriMas Company LLC, comprising a $475 million revolver and $175 million term loan. Moody's affirmed TriMas' SGL rating at SGL-2. The Stable outlook reflects Moody's expectation that the diversified manufacturer will continue to grow while conservatively managing its balance sheet. Ratings Rationale: The Ba2 CFR reflects TriMas' balance sheet improvement and expectation for ongoing balance sheet focus; the company's healthy degree of product and end-market diversification, and expectation of continued improvement in the company's credit metrics. The ratings are constrained by the cyclicality of the company's operating performance demonstrated by the sharp decline in revenues and profitability during the 2009 economic downturn, as well as its limited geographic diversification. The $650 million senior secured bank credit facilities are issued by TriMas Company LLC and are guaranteed by TriMas Corporation. The credit facilities represent the entirety of the company's funded debt structure and as a result are rated consistent with the CFR at the Ba2 rating level. The bank credit facilities are comprised of a $475 million Senior Secured Revolving Credit Facility due 2018 and a $175 million Term Loan A due 2018. Moody's does not rate the company's $105 million accounts receivable securitization program. The company's SGL-2 liquidity rating reflects Moody's view that the company will maintain good liquidity over the rating horizon. TriMas is expected to draw on its revolver pro forma for the refinancing and make modest use of its $475 million Senior Secured Revolver due October 2018. Pro forma for the transaction, TriMas is expected to have approximately $240 million of revolver availability and approximately $47 million available under its $105 million accounts receivable facility. Additionally, Moody's expects that TriMas' free cash flow generation of approximately $50 million per annum should support its good liquidity profile. TriMas Corporation Upgrades: Corporate Family Rating: Ba2 from Ba3 Probability of Default: Ba2-PD from Ba3-PD Affirmations: Speculative Grade Liquidity: SGL-2 Issuer: TriMas Company LLC Assignments: $475 Million Senior Secured Revolver: Ba2 LGD 3 45% $175 Million Senior Secured Term Loan: Ba2 LGD 3 45% Withdrawals: $250 Million Revolver: Ba3 LGD 3 44% to be withdrawn $200 Million Term Loan A: Ba3 LGD 3 44% to be withdrawn $200 Million Term Loan B: Ba3 LGD 3 44% to be withdrawn The Rating Outlook is Stable, reflecting Moody's expectation of credit metric improvement across TriMas' various segments along with conservative balance sheet management. To be considered for a higher rating or positive outlook, the company should demonstrate sustained organic revenue growth, improving margins, sustainable debt to EBITDA below 2.0 times, and EBITA to interest coverage over 6.0 times, also on a sustainable basis. Moreover, the company's size and business scale in its product segments along with improved segment diversity that was anticipated to result in lower cyclicality could help support positive ratings traction. The composition of the company's capital structure and its covenants allow for material acquisitions that could adversely affect its credit metrics over the short term or longer depending on their execution. As a result, a capital structure more consistent with a higher rating would also be considered in a ratings upgrade. The rating could be downgraded if the company's leverage (debt to EBITDA) was to increase to over 3.5 times, or if its free cash flow to debt was anticipated to be below 7.5%, both on a sustained basis. Increased business cyclicality could also cause downward pressure. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TriMas is a diversified industrial manufacturer engaged in five business segments: packaging, energy, aerospace & defense, engineered components and Cequent, a segment that manufactures custom-engineered towing and trailering products. The company is headquartered in Bloomfield Hills, Michigan. Revenues through the LTM period ending June 30, 2013 totaled approximately $1.35 billion. UNITED REFINING: S&P Raises Rating on 10.5% Secured Notes to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its issue-level rating on United Refining Co.'s 10.5% senior secured notes due 2018 to 'BB-' from 'B+'. At the same time, S&P revised its recovery rating on the notes to '2' from '3'. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery if a payment default occurs. The 'B+' corporate credit rating on United Refining Co. is unchanged, and the outlook is stable. "The stable outlook reflects our expectation that refining conditions, in particular WTI-based crack spreads, will remain favorable for United Refining Co. during the next 12 to 18 months given its exposure to WTI-based crudes," said Standard & Poor's credit analyst Michael Grande. S&P could lower the rating if industry conditions weakened materially or if the company had unplanned downtime. For the current rating, S&P expects total debt to EBITDA to remain less than 4x. Given United's position as a single-asset refiner, S&P views higher ratings as unlikely. However, S&P could consider it if the company improved its business risk profile by increasing the size and diversity of its refining assets or diversifies its cash flow into more stable sources such as logistics assets. UNITED RENTALS: Good Performance Cues Moody's to Lift CFR to B1 --------------------------------------------------------------- Moody's Investors Service upgraded United Rentals (North America), Inc.'s Corporate Family Rating to B1 from B2 and its Probability of Default Rating to B1-PD from B2-PD. Moody's also upgraded the company's senior secured notes rating to Ba2 from Ba3, its senior unsecured debt rating to B2 from B3, and its senior subordinated notes rating to B3 from Caa1. The company's SGL-3 Speculative Grade Liquidity Rating was affirmed at SGL-3 to reflect the expectation that United Rentals will maintain an adequate liquidity profile over the next 12 to 18 months. The ratings outlook was changed to stable from positive. Ratings Rationale: United Rentals' upgrade reflects the improvement of the company's credit quality due to recent performance and the expectation for continued revenue growth combined with further improvement in its operating margins, EBITDA margins, leverage, and interest coverage. The stronger results have been driven by the improved demand environment and the successful integration of the operations of RSC Holdings acquired in April 2012. The B1 CFR benefits from United Rentals' very large size relative to its competitors and related economies of scale, product breadth, diversified customer base, and market position. The rating upgrade reflects the improvement in leverage from 4.6 times as of December 31, 2012 to 3.9 times as of June 30, 2013 (on a Moody's adjusted basis) and Moody's expectation for leverage to decline further to the mid-3 times area over the next 12 to 18 months. Moody's expectations for lower leverage are consistent with the company's plan to operate in its stated target leverage range of 2.5 to 3.5 times since it is currently near the high end of this range (based on United Rentals' calculation of adjusted EBITDA which is lower than Moody's adjusted levels). Positive attributes are weighed against a large capital investment program which increases its rental base at the expense of weaker short term cash flows. The rating is also hindered by its cyclical business including non-residential construction, continued uncertainties in the sustainability of rental demand, and historical willingness to allocate capital towards stock repurchases. The company's SGL-3 rating reflects its adequate liquidity profile including its cash on the balance sheet, manageable near-term debt maturities and revolver availability under its $1.9 billion ABL credit facility due 2016. Upgrades: Issuer: RSC Equipment Rental, Inc. 10.25% Senior Notes due 2019, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) Issuer: RSC Holdings III, LLC 8.25% Senior Notes due 2021, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) Issuer: United Rentals (North America), Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD 9.25% Senior Notes due 2019, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) 6.125% Senior Notes due 2023, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) 8.375% Senior Subordinated Notes due 2020, Upgraded to B3 (LGD6, 93%) from Caa1 (LGD6, 93%) Issuer: UR Financing Escrow Corporation 5.75% Senior Secured Notes due 2018, Upgraded to Ba2 (LGD2, 24%) from Ba3 (LGD2, 24%) 7.375% Senior Notes due 2020, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) 7.625% Senior Notes due 2022, Upgraded to B2 (LGD4, 64%) from B3 (LGD4, 63%) Affirmations: Issuer: United Rentals (North America), Inc. Speculative Grade Liquidity Rating, Affirmed SGL-3 Outlook Actions: Issuer: United Rentals (North America), Inc. Outlook, Changed To Stable From Positive Note: All of the notes were either originally issued by, or assumed by, United Rentals (North America), Inc. subsequent to the original issuance including those issued by RSC. United Rentals' stable ratings outlook reflects the expectation for modest improvement in its credit metrics balanced against the cyclical business risks and high leverage. The ratings outlook or rating could be adversely affected if debt to EBITDA were expected to increase above 4.0 times, EBIT to interest decreased below 1.25 times, or the company's liquidity profile weakened. Ratings could also be adversely impacted if sales and margins contracted thereby resulting in a lower return on its expanded fleet. The ratings could be upgraded or outlook changed if the company were expected to experience positive free cash flow to debt after net capital expenditures and other uses so as to allow for continued deleveraging -- specifically, debt to EBITDA below 3.25 times and EBIT to interest above 1.75 times on a Moody's adjusted basis, all on a sustained basis. Positive traction could be limited by future return of cash to shareholders via stock repurchases depending on its impact on leverage. Reductions in leverage would be considered in light of the company's target leverage ratio, and its projected overall cash generating ability. The principal methodology used in this rating was the Global Equipment and Automobile Rental Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. United Rentals, headquartered in Stamford, CT, is an equipment rental company with a fleet of approximately 400,000 units and over 800 rental locations across the US and Canada. The company operates in two business segments. Its General Rentals segment provides construction, industrial and homeowner equipment while its Trench Safety, Power & HVAC segment provides equipment for underground construction, temporary power, climate control and disaster recovery. While the primary source of revenue is from renting equipment, the company also sells equipment and related parts and services. LTM revenue for the period ending June 30, 2013 was approximately $4.8 billion. UTILITY SERVICES: $215MM Sr. Debt Facility Gets Moody's B3 Rating ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and Caa1-PD probability of default rating to Utility Services Associates (USA). In addition, Moody's assigned a B3 rating to the company's proposed $215 million first lien senior secured credit facilities. The credit facilities will include a $30 million senior secured revolving credit facility and a $185 million senior secured first lien term loan. The proceeds from the term loan will be used by First Reserve to complete the acquisition of C.W. Wright Construction, Booth & Associates and Coastal Power and Electric to form Utility Services Associates. A stable rating outlook was assigned. The following ratings were assigned in this rating action: Corporate Family Rating B3; Probability of Default Rating Caa1-PD; $30 million senior secured revolving credit facility B3 (LGD3, 36%); $185 million senior secured first lien term loan B3 (LGD3, 36%); Ratings Rationale: The B3 corporate family rating reflects USA's small scale, volatile margins, high customer concentration and lack of geographic and end-market diversification. The company is focused on providing installation, repair and maintenance services to electric utilities and is reliant on unpredictable storm related work for about 10% of its revenues. USA's margins have been volatile historically and dependent on the mix of business and the magnitude of higher margin storm restoration related revenues. In addition, its operations are concentrated in the Mid-Atlantic and Southeastern US. The company has little exposure to other end- markets and geographic regions. USA's ratings are supported by its modest leverage, ample interest coverage, the recurring nature of the repair and maintenance services it provides and it's above average industry margins. The company's rating also benefits from its ability to provide a full range of services including engineering, transmission, substation, distribution and storm restoration services to utility customers and the favorable industry dynamics due to the aging of power lines and other transmission infrastructure, and the trend towards outsourcing of maintenance work by electric utilities. Moody's expects USA to generate revenue of only about $180 million over the next 12 months. The company's operating results should continue to be supported by its strong customer relationships, history of timely and effective project execution and the recurring nature of its business, which includes master service agreements (MSA's) and blanket contracts with long-term utility customers. This should enable the company to generate positive free cash flow and gradually pay down its debt. The company has completed only one acquisition in the past ten years, but may become more active in pursuing bolt-on acquisitions, which could limit its pace of deleveraging. Assuming the company does not pursue acquisitions in the short term, then its adjusted leverage ratio (Debt/EBITDA) is likely to decline to about 4.5x from 5.0x and its interest coverage (EBITA/Interest Expense) should rise to about 3.0x from 2.5x. USA's pro forma liquidity should be adequate since the company has no plans to draw on the $30 million revolver and will have no near-term debt maturities. USA's credit metrics are strong for the company's rating category, but are offset by USA's small scale, customer concentration and lack of geographic and end-market diversification. USA has a relatively small revenue and EBITA base and limited geographic and end market diversity versus higher rated companies in the engineering & construction sector. The company also has a high customer concentration, with approximately 60% of sales generated by its top five customers. Moody's expects USA to report revenue of only about $170 million in 2013, which compares to annual revenues ranging from $2 billion to $28 billion for higher rated E&C companies. The company also has limited geographic diversification and derives 100% of its sales in the Mid-Atlantic and Southeastern US. In addition, USA is primarily focused on providing services to electric utilities and has no exposure to any other sector. This compares to broader diversification for the majority of the higher rated E&C peers. The lack of scale and geographic diversity reduces the company's operational and financial flexibility. Larger and more diversified companies can better cope with periods of weakness and more efficiently utilize their resources, which helps to reduce the volatility of earnings through the economic cycle. USA also provides storm restoration services, which accounts for approximately 10% of revenue and can vary significantly each year since the occurrence of destructive storms is volatile and unpredictable. The stable outlook presumes the company's operating results will modestly improve over the next 12 to 18 months and result in gradually improved credit metrics. It also assumes the company will carefully balance its leverage with its growth strategy. The ratings could experience upward pressure if the company increases its scale and geographic diversification while maintaining its strong margins, generates positive free cash flow and reduces its leverage ratio below 4.0x. Negative rating pressure could develop if deteriorating operating results, debt financed acquisitions or shareholder dividends result in funds from operations (CF from operations before working capital changes) declining below 10% of outstanding debt or the leverage ratio rising above 6.0x. A significant reduction in borrowing availability or liquidity could also result in a downgrade. The principal methodology used in rating Utility Services Associates was the Global Construction Industry Methodology published in November 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Chesterfield, Virginia, Utility Services Associates (USA) is a domestically focused provider of design and engineering services, storm restoration services and the installation, maintenance and repair of transmission, substation and distribution infrastructure to electric utilities. The company generated revenue of approximately $172M for the trailing 12-month period ended June 30, 2013. First Reserve is the majority owner of Utility Services Associates. VV HOSPITALITY: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: VV Hospitality, LLC 4900 Circle 75 Parkway SE Atlanta, GA 30339 Case No.: 13-71481 Chapter 11 Petition Date: September 30, 2013 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: J. Carole Thompson Hord SCHREEDER, WHEELER & FLINT, LLP 1100 Peachtree Street, NE, Suite 800 Atlanta, GA 30309-4516 Tel: (404) 954-9858 Email: chord@swfllp.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The petition was signed by Vinod Patel, member. A list of the Debtor's 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/ganb13-71481.pdf WILLIAM LYON: Rising Profits Prompt Moody's to Raise CFR to B3 -------------------------------------------------------------- Moody's Investors Service raised William Lyon's corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, and the rating on $325 million of 8.5% senior unsecured notes due 2020 to B3 from Caa2. The speculative grade liquidity rating is affirmed at SGL-3. The rating outlook is stable. The ratings upgrade reflects William Lyon's improving profitability and financial performance, the recent initial public offering that raised $163 million and increased the company's equity base, and the resulting reduction in the homebuilding debt to capitalization ratio to 54% in Q2 2013 from 72% in Q1 2013. Additionally, the upgrade reflects out favorable outlook for the homebuilding industry and for the company's intermediate term performance. The elimination of a rating differential between the corporate family rating and senior unsecured notes results from the reduced amount of secured debt in the company's capital structure that is senior to the senior unsecured notes. The following rating actions were taken: Corporate family rating, upgraded to B3 from Caa1; Probability of default rating, upgraded to B3-PD from Caa1-PD; $325 million 8.5% senior unsecured notes due 2020, upgraded to B3, LGD4-57% from Caa2, LGD4-61%; Speculative grade liquidity rating, affirmed at SGL-3; Stable outlook. Ratings Rationale: The B3 corporate family rating reflects William Lyon's relatively small size, scale and business diversity and the expected land investments that will keep cash flow from operations negative and pressure liquidity over the intermediate term. At the same time, the rating recognizes the marked improvement in many of the company's credit metrics, including debt leverage, gross margins, interest coverage, and return on assets, and Moody's view that William Lyon will continue strengthening its operating base going forward. The recent equity raise that expanded the company's net worth also supports the rating. The company has a clean balance sheet since emerging from bankruptcy, with little to no recourse joint venture debt or specific performance lot option contracts. The SGL-3 speculative grade liquidity assessment reflects the company's adequate liquidity, supported by a $206 million cash balance at June 30, 2013, $100 million available under the recently established senior unsecured revolving credit facility due 2016, and lack of significant debt maturities until 2020. At the same time, negative cash flow generation and financial maintenance covenants in the company's revolving credit facility, including debt leverage, tangible net worth, and interest coverage or liquidity, constrain its liquidity position. The stable outlook reflects Moody's expectation that William Lyon Homes' credit metrics will continue to improve consistently. Increased scale and diversity, healthy top line growth, growing net income generation, gross margins above 20%, and maintenance of debt leverage below 50% along with sufficient liquidity may lead to a positive rating action. Net worth deterioration or a rise in debt leading to debt leverage rising above 60%, significant negative cash flow generation, or a weakening in liquidity could pressure the ratings. The principal methodology used in this rating was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. William Lyon Homes, established in 1956 and headquartered in Newport Beach, California, designs, builds, and sells single family detached and attached homes in California, Arizona. Nevada, and Colorado (under the Village Homes brand). Consolidated revenue and net income for the twelve months ended June 30, 2013 were approximately $415 million and $3 million, respectively. * Moody's: Gov't Payment Delays Could Weaken Defense Contractors ---------------------------------------------------------------- Defense contractors are only marginally better prepared to withstand US government payment disruptions now than they were during the last debt-ceiling crisis, despite having had a taste of sequestration, Moody's Investors Service says in a new report. The liquidity of Moody's-rated defense contractors has improved only slightly in the meantime. "Any delay in government payments would quickly weaken defense contractors' liquidity," says Vice President -- Senior Analyst, Bruce Herskovics in "Liquidity Profiles Only Slightly Improved from Previous Debt-Ceiling Crisis." "Although diversification away from declining US military sales and higher backstop liquidity arrangements have modestly improved companies' liquidity profiles, the risks remain elevated, particularly in the event of a government shutdown wherein no payments are made for a protracted period." Moody's measures the vulnerability of defense contractors to disruptions in government payments via its Defense Contractor Liquidity Index, which it developed during the last debt-ceiling crisis. The index is based on calculations of a company's current sources of liquidity relative to estimated annual US government- related revenue. The new report provides a list of companies' scores. The companies that are most vulnerable to payment disruptions are generally mid- to low-tier contractors with elevated leverage, as well as some investment-grade firms with very large US government revenue streams, notes Senior Vice President Russell Solomon. "Our index shows that four out of five Caa-rated companies and four out of 21 investment-grade issuers would struggle to withstand anything more than a short-lived cessation of collections under US government billings." Liquidity for certain prime defense contractors and a mix of smaller services companies has shown the most improvement since 2011, according to Moody's. Though still heavily dependent on the US government, Boeing Co. and General Dynamics Corp., for example, have both benefited from increased diversification into the commercial aerospace sector, and in addition have retained higher levels of cash. Rockwell Collins Inc., Raytheon Co., L-3 Communications Corp., Scitor Corp., ManTech International Corp. and Triumph Group Inc. also all have improved liquidity scores. Contractors more exposed, and that have shown index score declines since 2011, include Lockheed Martin Corp., TASC, Inc. and Alliant Techsystems Inc. * Joel Zweibel, Retired O'Melveny Bankruptcy Lawyer, Dies at 78 --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Joel Zweibel, one of the country's leading bankruptcy lawyers until his retirement in 2003, died at home on Sept. 24 at age 78. He joined O'Melveny & Myers LLP in 1990 to found the firm's east coast bankruptcy practice. Born in the Bronx, New York, Zweibel died of prostate cancer, according to firm spokeswoman Piper Hall. According to the report, Zweibel was among the leading bankruptcy practitioners of his generation, along with Leonard Rosen, Michael Crames, Robert Rosenberg and Harvey Miller. Where Crames and Miller were perennially counsel for major bankrupt companies, Zweibel typically represented bank lenders and creditors' committees. A graduate of Yale Law School, Zweibel was recruited for 'Melveny by Warren Christopher, former U.S. Secretary of State. Some of Zweibel's more noteworthy engagements included Macy's, Braniff, Texaco, and Eastern Airlines. Zweibel was the department head at Kaye Scholer LLP and Kramer Levin Naftalis & Frankel LLP before joining O'Melveny. * Chapter 13 Plan Can Be Binding on Trustee -------------------------------------------- Bill Rochelle, the U.S. Court of Appeals in Atlanta ruled last week the bankruptcy columnist for Bloomberg News, reports that a confirmed Chapter 13 plan is binding on the trustee, even though the trustee isn't listed in Section 1327(a) of the Bankruptcy Code as one of the parties bound by a plan. The case is Hope v. Acorn Financial Inc., 12-10709, U.S. Court of Appeals for the 11th Circuit (Atlanta). * State Turnover Order Doesn't Terminate Exempt Status ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports even though a judgment creditor obtained a state court order directing a broker to turn over retirement accounts in satisfaction of a judgment, the accounts remained exempt because the bankrupt individual filed for Chapter 7 protection before the broker turned the accounts over to the lender, a Chicago district judge ruled on Sept. 25. According to the report, there was no Illinois case describing the effect of a turnover order in a situation where the broker had not complied by delivering the funds to a judgment creditor. U.S. District Judge John W. Darrah likened the order to a check not paid before bankruptcy. Because the property hadn't been turned over, the retirement accounts remained property of the state. The bankrupt was thus entitled to use Section 522(f) of the Bankruptcy Code to void the judicial lien and maintain the exempt status of the account, Judge Darrah ruled. The case is Entertainment Events Inc. v. Quade (In re Quade), 13-00124, U.S. District Court, Northern District of Illinois (Chicago). * Judicial Estoppel Doesn't Bar Undisclosed Lawsuit --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports U.S. District Judge Joan Humphrey Lefkow in Chicago ruled on Sept. 26 that an individual bankrupt who hadn't disclosed the existence of a race-discrimination lawsuit was nonetheless allowed to continue the suit. The case is Comein v. City Country Club Hills, 11-5766, U.S. District Court, Northern District of Illinois (Chicago). * Canada Bankruptcies Increase 3.7% in July From June ----------------------------------------------------- Michael Bathon at Bloomberg News reports that the Canadian bankruptcy superintendent said that the country's bankruptcies rose 3.7 percent in July from the previous month to 6,049. According to the report, bankruptcies climbed 3 percent from a year earlier, the superintendent said in a report Sept. 30 in Ottawa. The report notes that filings fell 2.5 percent in Ontario, about 8 percent in British Columbia and 22 percent in Alberta from the same time a year prior. Bankruptcies rose more than 15 percent in Quebec, about 11 percent in Newfoundland and more than 25 percent in New Brunswick, from the year-earlier period. * Bankruptcy Court to Limp Along Initially, Chief Judge Says ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports bankruptcy courts will continue to operate for a "short period of time" following a government shut down, according to Chief U.S. Bankruptcy Judge Cecelia G. Morris for the Southern District of New York, covering Manhattan and surrounding counties. According to the report, federal courts can continue to operate in a "quasinormal" status for perhaps 10 days, using revenue from remaining court fees, Morris said in an interview. Bankruptcy judges and life-tenured federal district judges are deemed "essential" and will be paid initially, she said. If the shutdown continues until the end of October, Judge Morris said the Administrative Office of the U.S. Courts will request that the Treasury Department deem federal judges and bankruptcy judges as essential so they can continue to be paid, along with their staff and certain office personnel. The report notes that although judges may be paid in the short run, the news isn't so good for court personnel who won't be paid. The courts will make arrangement for U.S. Marshals to provide security and personnel from the General Services Administration to operate the courthouses, although they and court clerks won't be paid unless they are deemed essential. Judge Morris said that even a threat not to pay court personnel reflects a "total lack of respect for the bankruptcy clerks' offices and government employees in general." The report relates that bankruptcy court staff were responsible, she said, for developing and maintaining the electronic case- filing system used in all federal courts. Fees from the electronic filing system pay a significant portion of the entire federal courts' budget for maintenance of the electronic system, according to Judge Morris. Other bankruptcy fees such as filing fees and claim trading fees make up the bulk of the reserves held by the judiciary, Judge Morris said. The report discloses that when the federal government shut down in the 1990s, personnel were paid retroactively. There is no assurance that will occur this time, Judge Morris said, because a bill from Congress is required to pay non-essential employees. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 20th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***