/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131115.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 15, 2013, Vol. 17, No. 317 Headlines 1701 COMMERCE: Nov. 26 Hearing on Full-Payment Plan AFA INVESTMENT: Gets OK to Hire ASK as Avoidance Action Counsel ALITALIA SPA: Board to Consider Future With Air France ALVARION(R) LTD: Tel Aviv Court OKs Payment to Silicon Valley AMERICAN AIRLINES: Seeking Nov. 25 Approval of Antitrust Deal AMERICAN AIRLINES: Merger Sets Up Land Grab at Major Airports AMERICAN AIRLINES: Merger Critics Have a Long Shot in Court AMERICAN HOME: Barclays Loses Bid To Ax Trustee's Contract Suit APPVION INC: Moody's Hikes CFR to 'B1' & Rates $250MM Notes 'B2' APPVION INC: S&P Affirms 'B' CCR & Rates $250MM Notes 'CCC+' ARMORWORKS ENTERPRISES: Spars With Official Over Sale ASR CONSTRUCTORS: U.S. Trustee Balks at John Mannerino Employment BATE LAND: Bankruptcy ADM Asks Add'l Information on Plan Payments BATE LAND: BLC Balks at Debtor's "Dirt for Debt" Plan BEATS ELECTRONICS: S&P Affirms 'B+' CCR & Rates $300MM Debt 'BB' BENTLEY PREMIER: Hiersche Hayward Wants $13,000 Retainer Approved BENTLEY PREMIER: New Normandy Homeowners Assoc. Directors Sought BERNARD L. MADOFF: Victims' Suits Hinge on Allen Stanford Case BERNARD L. MADOFF: Trustee's Win Has Banks Seeking Quick Appeal BJ'S WHOLESALE: Upsized 1st Lien Debt No Effect on S&P's Ratings BONANZA CREEK: Moody's Rates New $150MM Sr. Unsecured Notes 'B3' BONANZA CREEK: S&P Keeps B- Unsec. Note Rating Over $200MM Add-on BRAND ENERGY: S&P Ratings Off Watch Negative on Debt Refinancing BUFFALO PARK DEVELOPMENT: To Sell Assets, Won't Reorganize BULLSEYE MERGERSUB: Moody's Gives B2 CFR & Rates $1525MM Notes B1 CAPITOL BANCORP: Settlement With FDIC Gets Court Approval CENGAGE LEARNING: Revamps Bankruptcy-Exit Plan Ahead of Hearing CENVEO INC: Moody's Slashes CFR to 'Caa1' & Loan Rating to 'B2' CHEROKEE SIMEON: Court Rejects Creditor's Bid for Sanctions CHINA JO-JO: Gets 180-Day NASDAQ Listing Compliance Extension COCOPAH NURSERIES: Second Amended Plan Declared Effective COLUSA MUSHROOM: Committee's Laywer Not Entitled to Indemnity COOPER-BOOTH: Wants More Exclusivity, Cites Prospective Buyer CUE & LOPEZ: Charles A. Cuprill Approved as Bankruptcy Counsel CUE & LOPEZ: Carrasquillo Approved as Financial Consultant CULLMAN REGIONAL: Fitch Affirms 'BB+' Rating on $65.1MM Bonds DARA BIOSCIENCES: Gets 180-Day NASDAQ Listing Compliance Extension DEAN FOODS: Fitch Assigns 'BB'- IDR & Unsecured Notes Ratings DESIGNER FURNITURE: Case Summary & 20 Largest Unsecured Creditors DETROIT, MI: State Board Approves 30-Year Belle Isle Lease DEVONSHIRE PGA: Alvarez & Marsal Approved to Provide CRO DEVONSHIRE PGA: Epiq Bankruptcy Okayed as Administrative Advisor DEVONSHIRE PGA: Files Amended Schedules of Assets & Liabilities DEVONSHIRE PGA: May Assume Restructuring Deal With Lender ELP West EASTMAN KODAK: Posts Adjusted Loss after Bankruptcy Exit EDISON MISSION: NRG Acquisition Expected to Close in 1st Qtr. 2014 E.W. SCRIPPS: Moody's Assigns Ba2 CFR & Rates First Lien Debt Ba2 EDISON MISSION: Chevron Appeals Second Loss on Kern River Venture EARL SIMMONS: Rapper DMX's Bankruptcy Dismissed for Third Time EIG INVESTORS: Moody's Revises First Lien Debt Rating to 'B2' EL CENTRO MOTORS: Court Closes Chapter 11 Reorganization Case EASTMAN KODAK: September Net Loss at $18 Million EMERITO ESTRADA: May Employ Albert Tamarez as Accountant EMPRESAS INTEREX: Agreement on Use of Cash Approved EXTENDED STAY: US Bank's Claims Tossed From $100M Guaranty Row FAIRMONT GENERAL: Sills Cummis Approved as Committee's Counsel FLINTKOTE COMPANY: Wants More Exclusivity as Plan Order on Appeal FRESH & EASY: Parent Tesco Received $213.8 Million FRIENDFINDER NETWORKS: Creditor Quy Dong Objects to Disclosures FRIENDFINDER NETWORKS: Files Schedules of Assets and Liabilities FRIENDFINDER NETWORKS: PMGI Holdings Files Schedules of Assets FRIENDFINDER NETWORKS: Files T-3 for Qualification of New Notes FURNITURE BRANDS: Direct Fee Review Okayed to Examine Legal Bills GASCO ENERGY: Posts Net Loss of $3.1 Mil. in Third Quarter GGW BRANDS: Lawyers Prepare to Sell Girls Gone Wild Brand GLOBAL AVIATION: Lenders Providing a $52 Million Loan GMX RESOURCES: Files Cash Collateral Budget Thru Jan. 31 HARVEST NATURAL: Receives Notices of Defaults on VSM Agreements HEADWATERS INC: Moody's Says Consent Agenda Has No Impact on CFR HILLTOP FARMS: Final Decree Closing Chapter 11 Reorganization Case IAC/INTERACTIVECORP: Moody's Rates $500MM Unsecured Notes 'Ba1' IAC/INTERACTIVECORP: S&P Rates New $500MM Sr. Unsecured Notes BB+ INTERCARE HEALTH: $2.3MM IRS Claim Entitled to Unsecured Priority INTERNAP NETWORK: Moody's Rates $350MM Secured Credit Notes 'B3' INTRAWEST RESORTS: Moody's Assigns B2 CFR & Rates $55MM Notes B2 INTRAWEST RESORTS: S&P Assigns Prelim. 'B' Corp. Credit Rating KHATI BROTHERS: Voluntary Chapter 11 Case Summary LANDMARK MEDICAL: Judge's Ruling on Company Sale Pushed Back LEE ENTERPRISES: Debt Reduced 2 Years Ahead of Plan LEVEL 3 FINANCING: Fitch Rates $300MM Sr. Notes at 'BB-/RR2' LEVEL 3 FINANCING: Moody's Rates New $300MM Sr. Secured Notes 'B3' LEVEL 3 FINANCING: S&P Rates $300MM Floating Rate Sr. Notes 'CCC+' LONE PINE: Enters Commitment Letter for New Financing MDC PARTNERS: Moody's Retains Ratings After $100MM Notes Add-on MDC PARTNERS: S&P Keeps B- Unsec. Notes Rating Over $100MM Add-on MERGE HEALTHCARE: S&P Cuts CCR to CCC on Poss. Covenant Violation METRO AFFILIATES: Wins First Skirmish With Labor Unions METRO AFFILIATES: Court Issues Order for Delivery of DOE Payments METRO AFFILIATES: Can Employ Kurtzman as Claims & Noticing Agent METRO AFFILIATES: Schedules Filing Date Extended to Dec. 18 METRO AFFILIATES: Has Interim OK to Pay Insurance Obligations MF GLOBAL: Judge Denies Corzine Bid to Dismiss Shareholder Suit MI PUEBLO: Seeks to Borrow $1.9 Million From Founder MINCO GOLD: Gets NYSE MKT Listing Non-Compliance Notice MSD PERFORMANCE: Blank Rome Approved as Creditors' Panel Counsel MSD PERFORMANCE: Carl Marks Okayed as Committee's Fin'l. Advisors MURRAY ENERGY: Moody's Rates New $1.02-Bil. Secured Term Loan 'B1' NATURAL MOLECULAR: Sec. 341(a) Creditors' Meeting Set for Nov. 27 NATURAL MOLECULAR: Bankruptcy Filing Hit GenMark's 3Q Revenue NEW SPECTRUM HEIGHTS: Case Summary & 3 Largest Unsecured Creditors NORTHERN BEEF: Ad Hoc Panel's Motion to Amend DIP Orders Denied NIRVANIX INC: Dell Financial Wants to Reposses Leased Computers OCWEN FINANCIAL: S&P Raises Issuer Credit Rating to 'B+ ONCURE HOLDINGS: Exclusive Plan Filing Period Extended Thu Jan. 13 ORE HOLDINGS: Approves Steel Partners Debt-for-Equity Exchange ORMET CORP: Steelworkers Urge Ohio Governor to Reopen Smelter PATRIOT COAL: Selling Western Kentucky Coal Interests to Alliance PATRIOT COAL: Court Approves Entry Into Settlement With Arch Coal PATRIOT COAL: Court Approves Peabody Settlement PATRIOT COAL: Court Approves Amendments to VFA and MOU with UMWA PATRIOT COAL: Secures Consents for Conversion of Credit Facility PEREGRINE FINANCIAL: Broker Sues US Bank Over $200-Mil. Theft PHYSIOTHERAPY ASSOCIATES: Moody's Cuts PDR to 'D' on Ch. 11 Filing PITTSBURGH CORNING: Insurer's Bid to Nix Plan Orders Denied QUALITY HOME: S&P Hikes CCR to 'B-' on Proposed Financing REEVES DEVELOPMENT: Plan Outline Hearing Continued to Nov. 14 RESERVOIR EXPLORATION: Liquidating Plan Incorporates Parent Deal RESERVOIR EXPLORATION: Files Schedules of Assets and Liabilities RESERVOIR EXPLORATION: Taps Munsch Hardt as Bankruptcy Counsel RESERVOIR EXPLORATION: Hires Lain Faulkner to Provide CRO RESERVOIR EXPLORATION: Section 341(a) Meeting Set on Dec. 13 RESIDENTIAL CAPITAL: Settles 10-Year-Old Homeowners' Action REVSTONE INDUSTRIES: Boston Finance Opposes Exclusivity Request ROYAL IMTECH: Financiers Agree to Extend Covenant Holiday SCIENTIFIC GAMES: S&P Rates $2.6BB Secured Credit Facility 'BB-' SCOOTER STORE: Wants Exclusivity in Plan Filing Thru Feb. 9 SCOOTER STORE: Says Liquidation Is Near Completion SEVEN COUNTIES: Has Interim Access to Cash Collateral Until Apr. l SIMPLY WHEELZ: Has Interim Approval of $14.8-Mil. DIP Loan SIMPLY WHEELZ: Employs Capstone Advisory as Financial Advisor SIMPLY WHEELZ: Has Interim Authority to Pay Critical Vendors SIMPLY WHEELZ: Has Interim Authority to Assume Important Contracts SOUTHGOBI RESOURCES: Restates Financials for 2011 and 2012 T-L CONYERS: Can Access Cole Taylor's Cash Collateral Until Dec. 1 T-L CONYERS: Court Wants Bankruptcy Exit Plan Revised TERVITA CORP: Moody's Cuts CFR to 'Caa1' & Notes Rating to 'B3' TWIN CITY BAPTIST: Objection to TD Bank's Claims Sustained VELOCITY EXPRESS: Asks Court to Dismiss Chapter 11 Cases VELTI INC: T-Mobile, Sprint Dominate Unsecured Committee WESTERN FUNDING: Panel May Hire Schwartzer & McPherson as Counsel WESTERN REFINING: Moody's Rates Proposed $550MM Term Loan 'B1' ZACKY FARMS: Plan Confirmation Hearing Continued Until Dec. 10 * CFPB Chief Concedes Need for Balance in Auto-Loan Oversight * Stern Rights Can't Be Waived, Fifth Circuit Rules * PwC to Host Webcast "Companies in Distress" on November 19 * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 ********* 1701 COMMERCE: Nov. 26 Hearing on Full-Payment Plan --------------------------------------------------- 1701 Commerce LLC will seek confirmation of its Plan of Reorganization at a hearing scheduled for Nov. 26, 2013, at 1:30 p.m. (prevailing Central Time). Bankruptcy Judge D. Michael Lynn on Oct. 31, 2013, entered an order approving the explanatory disclosure statement. The Debtor is not required to solicit votes on the Plan since all classes of creditors are unimpaired by the Plan. While creditors are not entitled to vote on the Plan, they may still file objections to confirmation of the Plan. Objections to confirmation are due Nov. 22, 2013 at 4:00 p.m. The Debtor has sold its primary assets -- its hotel property -- and is holding $4 million in cash. The Debtor initially signed a deal to sell its Sheraton-branded hotel in Fort Worth to a subsidiary of Dallas-based Prism Hotels & Resorts but Prism was unable to complete the purchase. In July, the Debtor completed the sale of the property to an affiliate of Presidio Hotel Fort Worth, L.P. The Plan proposes to pay the holders of all allowed claims, 100% of the amount of their allowed claims, plus interest accrued since the Petition Date. General unsecured claims total $2.978 million. Holders of general unsecured claims will be paid in full plus postpetition interest calculated on the Federal Post-Judgment Interest Rate. Holders of equity interests in the Debtor will retain their interests. A copy of the Disclosure Statement dated Oct. 16, 2013, is available for free at: http://bankrupt.com/misc/1701_Commerce_Plan_Outline.pdf The effective date of the Plan is expected to be on or before Dec. 30, 2013. About 1701 Commerce 1701 Commerce LLC, owner and operator of a full service "Sheraton Hotel" located at 1701 Commerce, Fort Worth, Texas, filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 12-41748) on March 26, 2012. The Debtor also was the former operator of a Shula's steakhouse at the Hotel. 1701 Commerce was previously named Presidio Ft. Worth Hotel LLC, but changed its name to 1701 Commerce, prior to the bankruptcy filing date to reduce and minimize any potential confusion relating to an entity named Presidio Fort Worth Hotel LP, an unrelated and unaffiliated partnership that was the former owner of the hotel property owned by the Debtor. 1701 Commerce is a Nevada limited liability company whose members are Vestin Realty Mortgage I, Inc., Vestin Mortgage Realty II, Inc., and Vestin Fund III, LLC. 1701 Commerce LLC's operations are managed by Richfield Hospitality Group, an independent management company that is not affiliated with the Debtor or any of its members. Judge D. Michael Lynn presides over the bankruptcy case. The Debtor disclosed $71,842,322 in assets and $44,936,697 in liabilities. AFA INVESTMENT: Gets OK to Hire ASK as Avoidance Action Counsel --------------------------------------------------------------- Judge Mary Walrath authorized AFA Investment, Inc., et al., to employ ASK LLP as avoidance action counsel nunc pro tunc to October 2, 2013. As reported in the Oct. 17, 2013 edition of The Troubled Company Reporter, ASK LLP is expected to (a) prepare Preference Reports; (b) prepare Age Comparison Reports; (c) analyze 20-day 11 U.S.C. Sec. 563(b)(9) claims; (d) send pre-suit demand letters; and (e) file and prosecute Avoidance Actions. ASK LLP's contingency fee structure will depend on on whether the collection is obtained through pre-suit demand letters (20%); collections achieved post-suit but before judgment (25%) or collections that occur post-judgment (30%). About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings (BLBT) affected sales. Judge Mary Walrath presides over the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias S. Keller, Esq., at Jones Day, in San Francisco; and Jeffrey B. Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta, Georgia, represent the Debtors. FTI Consulting Inc. serves as the Debtors' financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, the Debtors' books and records on a consolidated basis, reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' cases. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July 2012. In October 2012, the Bankruptcy Court denied a settlement that would have released Yucaipa Cos., the owner and junior lender to AFA Foods, from claims and lawsuits the creditors might otherwise bring, in exchange for cash to pay unsecured creditors' claims under a liquidating Chapter 11 plan. Under the deal, Yucaipa would receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million would be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits would be divided roughly 50-50. ALITALIA SPA: Board to Consider Future With Air France ------------------------------------------------------ Daniel Michaels, writing for The Wall Street Journal, reported that Alitalia's board meets late on Nov. 13 to consider two alternate futures for the struggling Italian airline: Keep Air France-KLM SA remaining as its biggest investor and calling the shots, or leave the French-Dutch carrier behind. Both options are painful. According to the report, the board meeting is critical because it comes one day before a deadline that Alitalia's shareholders set for themselves to pony up cash for a planned EUR300 million capital increase they approved in principle on Oct. 14 to avoid bankruptcy. In a sign of Alitalia's predicament, the board could postpone its Thursday deadline for commitments to the capital increase, according to a person familiar with the situation, the report related. The move would offer more time to negotiate with Air France-KLM and other shareholders. Top executives at Air France-KLM have said they won't invest the EUR75 million needed to preserve its 25% stake if Alitalia fails to agree on a radical makeover that includes cutting flights and slashing its workforce, the report further related. Air France- KLM has also demanded that Italian banks agree to restructure Alitalia's debt of nearly EUR1 billion. The creditors have rejected that idea. Alitalia Chief Executive Gabriele Del Torchio is expected nevertheless to pitch his board members from Air France-KLM on a revised restructuring plan, the report said. About Alitalia Alitalia-Compagnia Aerea Italiana has navigated its way through a successful restructuring. After filing for bankruptcy protection in 2008, Alitalia found additional investors, acquired rival airline Air One, and re-emerged as Italy's leading airline in early 2009. Operating a fleet of about 150 aircraft, the airline now serves more than 75 national and international destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice, Naples, and Catania. Alitalia extends its network as a member of the SkyTeam code-sharing and marketing alliance, which also includes Air France, Delta Air Lines, and KLM. An Italian investor group owns a majority of the company, while Air France- KLM owns 25%. ALVARION(R) LTD: Tel Aviv Court OKs Payment to Silicon Valley ------------------------------------------------------------- Alvarion(R) Ltd. (in receivership) disclosed that the District Court of Tel Aviv -- Yaffo held a hearing regarding the creditors' plan of settlement which was submitted to the Court on November 6, 2013. Under the plan, the Company's creditors will receive NIS 12.2 million of the proceeds from the sale of the Company's assets as stipulated in the asset sale agreement and will be issued Company shares constituting 15% of the Company's share capital. The proposed creditors' plan of settlement is subject to certain conditions, including approval by a creditors' meeting and the continued listing of the Company on NASDAQ and the Tel Aviv Stock Exchange after January 13, 2014. In order to meet this condition and remain listed, the Company must emerge from bankruptcy proceedings and demonstrate compliance with all applicable requirements for initial listing on NASDAQ by that date. At a preliminary hearing held on November 11, 2013, the Court approved payment to Silicon Valley Bank, a secured lender, as well as advance payments to the Company's employees. The court has scheduled another hearing to further discuss the proposed creditors' plan of settlement for December 2, 2013. AMERICAN AIRLINES: Seeking Nov. 25 Approval of Antitrust Deal ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. and US Airways Group Inc. settled with the U.S. Justice Department and will be allowed to merge by shedding 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. According to the report, to resolve the government's antitrust complaint, the two airlines will give up two gates at each of O'Hare International in Chicago, Los Angeles International, Boston's Logan International Airport and Love Field in Dallas. The government says the settlement is more beneficial for the flying public than a victory at trial otherwise scheduled to begin Nov. 25. The "proposed remedy will deliver benefits to consumers that could not be obtained by enjoining the merger," the Justice Department said in a court filing. As part of the deal, AMR's American Airlines Inc. must permanently transfer to Southwest Airlines Co. the 10 slots Southwest is currently leasing from AMR at LaGuardia. A slot is the right to take off or land at a congested airport. It takes two slots to operate a round-trip flight. The settlement will be incorporated into a judgment for entry by the district judge in Washington before whom the antitrust suit is pending. The government is required to give the public 60 days' notice to object before the judgment is entered. AMR is asking the bankruptcy judge in New York to hold a hearing on Nov. 25 for approval of the settlement. AMR said in the court filing that it intends to "move expeditiously to consummate the plan" and merge with U.S. Airways. The bankruptcy court formally approved AMR's plan in October. It couldn't be implemented until the antitrust suit was resolved. AMR shares rose 26 percent on Nov. 12, closing at $12 in over-the- counter trading. The stock rose about the same percentage on Nov. 4 when Bloomberg reported there there were settlement talks. After a three-day drop in August immediately after the U.S. Justice Department sued to bar the merger, the stock has risen almost fivefold in price. Buying AMR stock at the right time brought handsome profit. It was selling for about 40 cents in October 2012, rising to $1.30 before the merger was announced in February. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Merger Sets Up Land Grab at Major Airports ------------------------------------------------------------- Jack Nicas, writing for The Wall Street Journal, reported that the government's antitrust settlement with AMR Corp. and US Airways Group Inc. sets up what may be the last big land grab at major airports for some time, as the planned merger cements a new structure for the industry after a decade of bankruptcies and consolidation. According to the report, discounters Southwest Airlines Co., JetBlue Airways Corp. and Spirit Airlines Inc. have said they are considering bids for bundles of slots that the new American Airlines will divest at Reagan National Airport and LaGuardia Airport -- an opportunity for footholds at crowded airports that likely won't come around again soon. Those new entrants are expected to increase competition on well-traveled routes from Washington and New York to destinations like Chicago, Dallas and Florida. The new competition will be counterbalanced by the new American's likely service cuts to smaller airports, necessitated by the divestments, the report related. Cities heavily served by American and US Airways today from Washington and New York, such as Raleigh, N.C., Nashville, Tenn., and Louisville, Ky., could see cutbacks, the report added. Meanwhile, cities with just a handful of flights a month to Washington and New York might lose that nonstop service altogether, such as Indianapolis, Burlington, Vt., and Kansas City, Mo., according to a Wall Street Journal analysis. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. 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: Merger Critics Have a Long Shot in Court ----------------------------------------------------------- Brent Kendall, writing for The Wall Street Journal, reported that critics of the merger between AMR Corp. and US Airways Group Inc. have one more chance at exacting additional concessions -- but it's a long shot. According to the report, the 1974 Tunney Act requires that any Department of Justice antitrust settlement go before a federal judge to determine if the deal is in the public interest. Antitrust lawyers say it is highly unlikely that U.S. District Judge Colleen Kollar-Kotelly will reject the terms of the Nov. 12 settlement, but critics of deal say she could scrutinize the agreement closely, the report related. "In this particular case, it might be of real concern to the court that DOJ has compromised a very strong case with concessions that a lot of people are thinking may be inadequate," says Cleveland State University law professor Christopher Sagers, the report cited. Prof. Sagers testified against the deal in a February congressional hearing. The Tunney Act was adopted in the wake of concerns that President Richard Nixon improperly ordered the Justice Department to back away from a government antitrust case against International Telephone & Telegraph Corp., the report further related. Judges sometimes convene hearings to question the parties about their settlements, but antitrust lawyers have difficulty pointing to any instance in which a judge has demanded substantial changes to an agreement, the report said. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. 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 HOME: Barclays Loses Bid To Ax Trustee's Contract Suit --------------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge refused on Nov. 8 to toss a suit alleging Barclays Bank PLC had violated a swaps agreement with mortgage lender American Home Mortgage Holdings Inc., allowing AHM's trustee to proceed with a complaint that also seeks to eliminate more than $45 million in claims filed by the bank. According to the report, in a 34-page opinion, U.S. Bankruptcy Judge Christopher S. Sontchi found the trustee had brought plausible claims that Barclays had breached its contract by not returning excess collateral it held under the swaps agreement. About American Home Defunct subprime mortgage lender American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- based in Melville, New York, and seven affiliates filed for Chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as counsel. The Creditors Committee also retained Hennigan, Bennett & Dorman LLP, as special conflicts counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000 and total liabilities of $19,330,191,000. AHM filed a de-consolidated plan of liquidation on Aug. 15, 2008. The plan was confirmed in February 2009. The plan was implemented in November 2010. APPVION INC: Moody's Hikes CFR to 'B1' & Rates $250MM Notes 'B2' ---------------------------------------------------------------- Moody's Investors Service upgraded Appvion Inc.'s corporate family rating (CFR) to B1 from B2, probability of default rating (PDR) to B1-PD from B2-PD, first-lien term loan to Ba2 from Ba3 and speculative grade liquidity rating to SGL-2 from SGL-3. A B2 rating was assigned to the proposed $250 million second lien senior secured notes due 2020. The upgrade reflects expectations of lower leverage and improved financial performance and recognizes the company's decreased borrowing costs and improved debt maturity profile as a result of the company's proposed financing. The rating outlook is stable. Upgrades: Issuer: Appvion, Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Senior Secured Bank Credit Facility Jun 28, 2019, Upgraded to Ba2 (LGD2, 25%) from Ba3 (LGD2, 27%) Assignments: Issuer: Appvion, Inc. Senior Secured Regular Bond/Debenture, Assigned B2 (LGD5, 70%) Outlook Actions: Issuer: Appvion, Inc. Outlook, Changed To Stable From Positive Appvion intends to use the proceeds from the proposed $250 million second lien senior secured notes to repay its existing $162 million second lien notes (currently rated B3) due 2015 and $32 million of subordinated notes (currently rated Caa1) due 2014 and cover redemption fees and expenses. The proposed $250 million senior secured notes due 2020 will have a second priority lien on substantially all assets and will be guaranteed by Appvion and all its material subsidiaries. The B2 rating on the proposed $250 million senior secured notes incorporates the note holders' position behind the Ba2 rated $335 million first-lien term loan due 2019. The rating on the company's existing $162 million second lien notes and $32 million subordinated notes will be withdrawn following their repayment. All the ratings are subject to the conclusion of the proposed transaction and Moody's review of final documentation. Ratings Rationale: Appvion's B1 CFR reflects the company's leading global market position in several specialty paper niches, its improving product diversity and the company's strong and stable margins. The rating is tempered by the secular contraction in the demand for the company's carbonless paper business, the cash flow obligations of its employee stock ownership plan and the company's exposure to potential contingencies associated with environmental issues. Over the mid-term, the growth of the company's thermal paper and microencapsulating businesses are expected to offset the decline in the company's carbonless paper business. Appvion's speculative grade liquidity rating of SGL-2 reflects the company's good liquidity position. As of the quarter ended September 30, 2013, Appvion had approximately $7 million of cash and roughly $67 million of borrowing capacity under its $100 million revolving credit facility due 2018 (after $20 million of drawings and $13 million of letters of credit usage). Moody's estimates $25 million of free cash flow over the next year. After the refinancing, Appvion will not have any scheduled debt maturities till its $335 million term loan comes due in 2019. Covenant issues are not expected over the near term. Most of the company's assets are encumbered. The stable outlook reflects Moody's expectations of improved financial performance, supported by higher earnings due to full implementation of the company's paper supply contract, lower interest costs and growth from the company's thermal paper and encapsys business. An upgrade may be warranted if the company is able to sustain adjusted debt to EBITDA below 4 times and (RCF- CapEx)/TD above 7%. The rating might be downgraded if normalized debt to EBITDA remains above 5 times and (RCF-CapEx)/TD below 3%), most likely due to an inability to replace declining carbonless paper volumes with either new or existing products, a significant escalation in anticipated environmental costs or a deterioration in liquidity. Appvion headquartered in Appleton, Wisconsin, manufactures specialty coated paper products, including thermal papers (50% of revenues), carbonless papers (44%), as well as a microencapsulating business (6% ). Appvion has four manufacturing sites, two of which are located in Wisconsin, one in Pennsylvania and one in Ohio. In 2001, the company was acquired by its employees through an employee stock ownership plan (ESOP). LTM sales ending September 2013 were $821 million. APPVION INC: S&P Affirms 'B' CCR & Rates $250MM Notes 'CCC+' ------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its ratings, including its 'B' corporate credit rating, on Wisconsin-based Appvion Inc. "We also revised the outlook to stable from positive. At the same time, we assigned a 'CCC+' issue-level rating and '6' recovery rating to the company's proposed $250 million second-lien senior secured notes due 2020." "The affirmation reflects our assessment of Appvion's "adequate" liquidity position following the anticipated refinancing of its 2014 and 2015 debt maturities. The outlook revision incorporates our view that EBITDA growth over the next 12 months will be weaker than previously expected given challenged carbonless paper end markets. We expect this to result in debt to EBITDA above 5x over the next several quarters, a level we view to be consistent with the rating." "The stable outlook reflects our view that decreasing sales in Appvion's carbonless paper segment will weigh on EBITDA improvement from cost savings such that leverage will remain above 5x over the next several quarters," said Standard & Poor's credit analyst Tobias Crabtree. "We would upgrade Appvion if it appeared likely that leverage would drop and remain between 4x and 5x EBITDA. This could occur if 2014 EBITDA exceeded our forecast by 15% and the company allocated excess free cash flow to prepay debt." "We would consider a negative rating action on Appvion if liquidity became constrained. This could occur if decreasing sales in its carbonless segment are not offset by sales growth in its thermal segment and businesswide margin improvement, forcing the company to draw down its revolving credit facility to fund capital expenditures, interest payments, and employee stock ownership repurchases. Alternatively, liquidity could become constrained over the next 12 months to 18 months if the company is not able to successfully refinance its 2014 and 2015 debt maturities as contemplated in the proposed transaction." ARMORWORKS ENTERPRISES: Spars With Official Over Sale ----------------------------------------------------- Katy Stech, writing for DBR Small Cap, reported that executives at defense contractor ArmorWorks are fighting with the legal professional who was put in charge by a bankruptcy judge to sell the 120-worker Arizona company, which has made armor for aircraft and vehicles for the U.S. military. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency, Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. The Plan filed in the Debtors' cases would resolve the ongoing dispute with C Squared by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ASR CONSTRUCTORS: U.S. Trustee Balks at John Mannerino Employment ----------------------------------------------------------------- Peter C. Anderson, the United States Trustee for Region 16, objects to ASR Constructors, Inc.'s application to employ the Law Office of John D. Mannerino as corporate counsel, effective Sept. 20, 2013. Everett L. Green, Esq., Trial Attorney for the U.S. Trustee, says John D. Mannerino seeks the automatic payment of a $3,900 monthly flat fee and medical reimbursements without further hearing or Court order. Counsel will be paid without regards to the amount of time expended or number of hours worked. And nothing in the Employment Application obligates Corporate Counsel to return unearned fees to the estate. "Corporate Counsel has not satisfied its burden of proving that an automatic monthly flat fee is reasonable," asserts Mr. Green. He adds that Corporate Counsel appears to request an advance payment retainer -- where a debtor pre-pays for expected services. Because payment is dependent only upon the passage of time rather than any benefit to the estate, the proposed compensation circumvents the Code's mandate that professionals should receive compensation only for "actual, necessary services," argues Mr. Green. The Trial Attorney further contends that Corporate Counsel seeks compensation under Section 328, which restricts the Court's review of compensation. The Court could not conduct a Section 330 benefit-to-the-estate inquiry if the Court approves compensation under Section 328, he says. The hearing on the matter is set for November 19, 2013, at 2:00 p.m., at Courtroom 303, 3420 Twelfth St., in Riverside, CA 92501. ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 13-25794) on Sept. 20, 2013. The petition was signed by Alan Regotti as president. The Debtor estimated assets and debts of at least $10 million. Judge Mark D. Houle presides over the case. James C Bastian, Jr., Esq., at Shulman Hodges & Bastian, LLP, serves as the Debtor's counsel. BATE LAND: Bankruptcy ADM Asks Add'l Information on Plan Payments ----------------------------------------------------------------- Marjorie K. Lynch, Bankruptcy Administrator for the Eastern District of North Carolina, filed this response to Bate Land & Timber, LLC's Plan of Reorganization and Disclosure Statement. The Bankruptcy Administrator relates: "To the extent the Debtor is delinquent in payment of Quarterly Fees and/or the filing of Monthly Reports, the Bankruptcy Administrator objects to confirmation until such time as Debtor is compliant with these requirements. "The Debtor bears the burden of proving Plan feasibility. In order to prove feasibility of the plan as proposed, the Debtors should be prepared to provide evidence at the confirmation hearing regarding his monthly income, monthly expenditures, and the Debtor's monthly obligations under the Plan. Such evidence should support Debtor's contention that they are able to make payments under the plan as proposed. The Debtor proposes a full payout Plan that includes satisfying the claims of the taxing authorities pursuant to statute within five years from the date of the petition, Deere & Company within six years at 5.75% per annum, Northen Blue ($14,143) within a year, and all other general unsecured creditors ($90,575) also within a year. The Debtor asserts that it will make Plan payments through continued operations. The Debtor fails to include any specific information about their business, the timber management income, whether they intend to sell certain tracts in order to fund the Plan. The Bankruptcy Administrator requests additional information regarding the Debtor's ability to make Plan payments prior to the date set for hearing. "The Bankruptcy Administrator supports BLC [Bate Land Company, LLC]'s concerns with regard to the nature of these [Deere & Company and Northen Blue, LLP's] claims and the timing of said transactions. As stated in the Plan, the timing of the tractor purchase and execution of the promissory note and deed of trust, two weeks before the filing may represent bad faith. The Debtor's execution of the promissory note in favor of Northen Blue, dated July 18, 2013, eight days prior to the Debtor's filing, may also be indicative of bad faith. The Bankruptcy Administrator needs additional information supporting these claims. "The Debtor proposes to pay unsecured creditors 100% of what they are owed within one (1) year, thereby satisfying 11 U.S.C. Section 1129(a)(7). The Debtors should be prepared to explain their proposed liquidation analysis and provide evidence at the confirmation hearing to support the values attributed to their assets and respective business operations. The Bankruptcy Administrator is unclear of the source of income for the proposed Plan payments. As reported in the TCR on Sept. 10, 2013, Judge Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina, Wilmington Division, conditionally approved the disclosure statement explaining Bate Land & Timber, LLC's Plan of Reorganization. The Plan proposes to sell all of the Debtor's real property valued at $47,032,125, and personal property valued at $6,445,499. Proceeds from the asset sales will fund the Plan. The liens secured by the Debtor's property will attach to the net proceeds of the sale remaining after payment costs of sale and all reasonable and ordinary closing costs. A full-text copy of the Plan, dated Aug. 30, 2013, is available for free at http://bankrupt.com/misc/BATELANDds0830.pdf About Bate Land & Timber Willotte, North Carolina-based Bate Land & Timber, LLC, sought protection under Chapter 11 of the Bankruptcy Code on July 25, 2013 (Case No. 13-04665, E.D.N.C.). Judge Stephani W. Humrickhouse oversees the Chapter 11 case. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $100,001 to $500,000. The petition was signed by Brad Cheers, manager. The Plan filed in the case proposes to sell all of the Debtor's real property valued at $47,032,125, and personal property valued at $6,445,499. Proceeds from the asset sales will fund the Plan. The liens secured by the Debtor's property will attach to the net proceeds of the sale remaining after payment costs of sale and all reasonable and ordinary closing costs. The Bankruptcy Administrator for the Eastern District of North Carolina was unable to organize and recommend the appointment of a committee of creditors holding unsecured claims against the Debtor. BATE LAND: BLC Balks at Debtor's "Dirt for Debt" Plan ----------------------------------------------------- Bate Land Company, LLC, objects to the confirmation of Bate Land & Timber, LLC's Plan of Reorganization dated Aug. 30, 2013. BLC notes that the Debtor lists assets worth $53.5 million and liabilities of $74.2 million although $74 million of that total liability is listed as an unsecured, contingent and disputed claim of Bank of America. BLC points out that although not listed on Schedule D, the Debtor also owes BLC $13 million as a result of a purchase money promissory note and deeds of trust. BLC says its claim comprises 99% of the total claim amounts in this bankruptcy. "According to the Debtor's Plan, it alleges that it satisfied BLC's claim through the transfer of two tracts of land in Pamlico County on July 25, 2013. In essence, the Debtor contends it completed its own "dirt for debt" plan before it even filed bankruptcy and without the acceptance of the transfer by BLC. BLC's acceptance of the deed conveying the property is currently pending before the Court," BLC tells the Court. "The claim of Deere {Deere & Company] will be satisfied with payments over a period of six years. The remaining claims in the case will be satisfied through payments over a period of one year. The Debtor fails to specify the source of payment for those claims in the Plan or its Disclosure Statement." BLC says the Debtor's Plan cannot be confirmed because it fails to meet the substantive requirements for confirmation as set forth in 11 U.S.C. Section 1129. In support of its objection, BLC asserts: 1. The Plan has not been proposed in good faith and is in violation of Section 1129(a)(3) of the Bankruptcy Code. "The Debtor has acted in bad faith not only in the filing of this Plan, but in filing this case." 2. The "Dirt for Debt" Plan proposed by the Debtor does not comply with the fair and equitable requirements of Section 1129(b) of the Bankruptcy Code. "In this case, BLC will present evidence that the current values of the Broad Creek and Smith Creek tracts are far lower than BLC's $12,936,254.65 claim. BLC's evidence will establish that part of the reason for this decline is the value and diminished quality of the timber on the Broad Creek and Smith Creek tracts as a result of Debtor's timber cutting on these and other tracts, and its failure to properly reseed the timber tracts following any timbering." The Plan As reported in the TCR on Sept. 10, 2013, Judge Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina, Wilmington Division, conditionally approved the disclosure statement explaining Bate Land & Timber, LLC's Plan of Reorganization. The Plan proposes to sell all of the Debtor's real property valued at $47,032,125, and personal property valued at $6,445,499. Proceeds from the asset sales will fund the Plan. The liens secured by the Debtor's property will attach to the net proceeds of the sale remaining after payment costs of sale and all reasonable and ordinary closing costs. A full-text copy of the Plan, dated Aug. 30, 2013, is available for free at http://bankrupt.com/misc/BATELANDds0830.pdf About Bate Land & Timber Willotte, North Carolina-based Bate Land & Timber, LLC, sought protection under Chapter 11 of the Bankruptcy Code on July 25, 2013 (Case No. 13-04665, E.D.N.C.). Judge Stephani W. Humrickhouse oversees the Chapter 11 case. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $100,001 to $500,000. The petition was signed by Brad Cheers, manager. The Plan filed in the case proposes to sell all of the Debtor's real property valued at $47,032,125, and personal property valued at $6,445,499. Proceeds from the asset sales will fund the Plan. The liens secured by the Debtor's property will attach to the net proceeds of the sale remaining after payment costs of sale and all reasonable and ordinary closing costs. The Bankruptcy Administrator for the Eastern District of North Carolina was unable to organize and recommend the appointment of a committee of creditors holding unsecured claims against the Debtor. BEATS ELECTRONICS: S&P Affirms 'B+' CCR & Rates $300MM Debt 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Santa Monica, Calif.-based Beats Electronics LLC to positive from stable and affirmed the 'B+' corporate credit rating. "At the same time, we assigned our 'BB' issue-level rating (two notches above the corporate credit rating) to Beats' new $300 million senior secured credit facility, consisting of a $75 million revolving credit facility maturing 2018 and $225 million term loan maturing 2018. The recovery rating on this facility is '1', reflecting our expectations for very high recovery (90% to 100%) in the event of a payment default." "Proceeds from the term loan, in addition to a minority investment from The Carlyle Group and balance sheet cash, were used to refinance its existing interim term loan, purchase HTC Corp.'s remaining ownership, and fund a dividend to its owners. Pro forma for the transaction, as of Sept. 30, 2013, we estimate Beats had about $250 million of adjusted debt outstanding." "The outlook revision to positive reflects our belief that the company will continue to generate positive free cash flow from double-digit revenue growth over the next 12 to 18 months," said Standard & Poor's credit analyst Stephanie Harter. "In addition, our concern regarding the near-term maturity of its prior interim term loan facility and uncertainty about a future recapitalization have been resolved under the new senior secured credit agreement and related new minority investment by Carlyle." "Our 'B+' corporate credit rating on Beats reflects our assessment of the company's "significant" financial risk profile and "weak" business risk profile. The company's financial risk profile primarily reflects our opinion of the company's aggressive financial policies, as evidenced by its recent dividend payout. Although we believe pro forma debt leverage will be below 2x (including our standard adjustments for operating leases), which is stronger than indicative ratios for the "significant" descriptor, we believe future leveraged shareholder distributions are possible, and the company's rapid growth could result in some volatility to credit measures if not sustained." "However, our financial risk assessment also recognizes the possibility of future debt repayment beyond fiscal 2013, based on projected annual free cash flows that could result in about $30 million of debt repayment in the next 12 to 18 months if Beats continues its rapid growth." The outlook is positive, reflecting our opinion that the company will sustain adequate liquidity, including covenant cushion of at least 15%, and continue to increase sales and EBITDA, resulting in leverage remaining at or below 2x through fiscal year-end 2014. "We would consider an upgrade if Beats is able to generate and sustain positive free cash flow, as well as leverage at 2x or below." "We could revise the outlook to stable if the company does not improve earnings and free cash flows as anticipated and debt leverage exceeds 4x. For this to occur, we believe sales growth would have to flatten and adjusted EBITDA decline over 35%, potentially from large unsold inventories getting significantly discounted in response to an unforeseen fall-off in demand for the company's products." BENTLEY PREMIER: Hiersche Hayward Wants $13,000 Retainer Approved ----------------------------------------------------------------- Hiersche, Hayward, Drakeley & Urbach, P.C. filed a second supplement to Bentley Premier Builders LLC's application for an order authorizing the firm's employment as the Debtor's attorneys. Hiersche Hayward asked the Court to approve $13,000 as a postpetition retainer and allow HHDU to keep the $13,000 in its IOLTA trust account until further Court order. Hiersche Hayward also disclosed that, among other things: 1. HHDU erroneously disclosed that it received $39,500 from the Debtor during the one year preceding the commencement of the bankruptcy case. HHDU actually received $62,258 from the Debtor during the one year preceding the commencement of the case. 2. The Debtor could not obtain a hearing on its application for temporary injunction to enjoin foreclosures on many of its properties in state court. 3. In the state court suit, HHDU represented Sandy W. Golgart in defending a conversion claim asserted by Phil Pourchot. Ms. Golgart and Mr. Pourchot are equity owners of the Debtor and are involved in litigation between themselves over issues involving the Debtor. The claim was for less than $20,000 actual damages and exemplary damages and was not supported by the evidence. HHDU also represented Ms. Golgart on a defamation claim against Mr. Pourchot. Nothing in HHDU's prepetition representation of Ms. Golgart was adverse to Bentley. 4. HHDU investigated Phillip Pourchot's claims made against Ms. Golgart and found no evidence to support them. Ms. Golgart made no claims against Bentley. There was no conflict. As reported in the TCR on Aug. 27, 2013, the firm's Gerald P. Urbach, Esq., and Jason M. Katz, Esq., are expected to provide legal services on matters involving financial restructuring and insolvency issues, including exploration of possible non- bankruptcy restructuring alternatives, as well as preparation of the requisite petitions, pleadings, exhibits, lists and schedules in connection with the commencement of the Chapter 11 case. HHDU has advised that the representation of the Debtor will involve fees and expenses of more than $13,000 and the firm expects to be paid for future fees and expenses out of the Debtor's operations, after appropriate Court order. To the best of the Debtor's knowledge, HHDU does not have any connection with, or any interest adverse to, the Debtor, its creditors, or any other party-in-interest or their respective attorneys and accountants, or the U.S. Trustee for the Eastern District of Texas. Accordingly, HHDU and its professionals are "disinterested persons" as the term is defined under Sec. 101(14) of the Bankruptcy Code. About Bentley Premier Bentley Premier Builders, LLC, is a Texas limited liability company in the business of real estate development and building custom houses. It filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. Judge Brenda Rhoades presides over the case. Gerald P. Urbach, Esq., and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach, P.C., in Addison, Texas, serve as counsel. The Debtor disclosed $35,793,857 in assets and $30,428,782 in liabilities as of the Chapter 11 filing. BENTLEY PREMIER: New Normandy Homeowners Assoc. Directors Sought ---------------------------------------------------------------- Jason R. Searcy, the Chapter 11 trustee for Bentley Premier Builders, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Texas to remove existing directors and appoint new directors to the Normandy Estates Homeowners Association. The present board of directors of the HOA consists of Sandy W. Golgart and Phil Pourchot. Ms. Golgart and Mr. Pourchot are the equity owners of the Debtor and are involved in litigation between themselves over issues involving the Debtor. Accordingly, the Chapter 11 trustee argued, the existing board of directors can not be effective in overseeing the day-to-day operations of the HOA, creating the threat of harm to the property owners. The Chapter 11 trustee believes it is in the best interests of the Debtor's estates to remove the current HOA directors and appoint new directors to operate the affairs of the HOA efficiently. The Chapter 11 trustee proposes the appointment of three new directors: 1) Janice Cumberland; 2) David McGough; and 3) the manager hired by the Chapter 11 trustee to manage the Debtor's business affairs. The Chapter 11 trustee has filed a motion with the Court to employ Marc Powell as the business manager. If approved, Mr. Powell would serve as the third member of the board and as its chairman. If Mr. Powell's employment is not approved, whoever, is employed to act as the business manager would be so appointed. About Bentley Premier Bentley Premier Builders, LLC, is a Texas limited liability company in the business of real estate development and building custom houses. It filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. Judge Brenda Rhoades presides over the case. Gerald P. Urbach, Esq., and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach, P.C., in Addison, Texas, serve as counsel. The Debtor disclosed $35,793,857 in assets and $30,428,782 in liabilities as of the Chapter 11 filing. BERNARD L. MADOFF: Victims' Suits Hinge on Allen Stanford Case -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Supreme Court's decision in a case involving R. Allen Stanford's Ponzi scheme may determine whether investors defrauded by Bernard Madoff can sue feeder-fund managers and banks that allegedly turned a blind eye to fraud. According to the report, on Oct. 7, the first day of the new term, the Supreme Court heard arguments in Chadbourne & Parke LLP v. Troice. The case came to the high court from the U.S. Court of Appeals in New Orleans, which had ruled that investors in Stanford's fraud weren't barred from suing by the 1998 Securities Litigation Uniform Standards Act, or SLUSA. The justices several times asked questions showing an awareness that their ruling in Troice will affect Madoff cases working their way up the appellate ladder in which judges said the ability to sue was curtailed by SLUSA. Generally, SLUSA bars suits on behalf of a class brought under state law "in connection with the purchase or sale" of securities traded on national exchanges. Stanford's investors bought certificates of deposit in an offshore bank while being told the money would be invested in securities. As in Madoff's fraud, no stocks were ever bought. The defendants argued last month that the mere promise to buy securities was sufficient to satisfy the "in connection with" test, thus requiring dismissal of the suit under SLUSA. The defrauded Stanford investors contend the certificates of deposit weren't "covered securities," allowing their suit to stand regardless of how Stanford promised to spend their money. The U.S. government asked the justices to reverse the Court of Appeals, for fear that narrowing the meaning of "in connection with" securities transactions might restrain the ability of the Securities and Exchange Commission to enforce securities laws containing identical language. Several justices asked how SLUSA could apply when no securities were ever purchased, the identical situation with Madoff. "There has been no purchase or sale here," Justice Antonin Scalia said. In September, the U.S. Court of Appeals in New York invoked SLUSA and upheld dismissal of a lawsuit against JPMorgan Chase & Co. and Bank of New York Mellon Corp. filed by investors in feeder funds that in turn invested with Bernard L. Madoff Investment Securities Inc. The investors contend the two banks were aware of Madoff's fraud and should be held liable because they continued providing him with banking services. The district court dismissed the suits under SLUSA, and the appeals court affirmed. Irving Picard, the trustee unwinding Madoff's investment firm, has lawsuits in Manhattan federal court against feeder funds and their managers. U.S. District Judge Jed Rakoff is yet to decide whether he will dismiss those suits under SLUSA, although, while sitting by designation in the appeals court, he wrote an opinion upholding the dismissal of suits against the banks. A win by victims of the Stanford fraud in the Supreme Court won't automatically revive the Madoff suits. The lawyer for Stanford victims said Madoff was giving investors an interest in fictitious stocks, while the Stanford investors were purchasing certificates of deposit, outside the reach of SLUSA. "I don't think the Madoff situation is particularly different from this one," a lawyer for the U.S. told the justices. In Troice, the lawyer for the investors said the case presented a metaphysical question because "everything is in connection with everything else." He said the Supreme Court must draw a line somewhere. Where that line is drawn may determine whether Madoff victims' lawsuits are revived. The Supreme Court usually needs several weeks or months to craft an opinion in an important case like Troice. The Supreme Court case is Chadbourne & Parke LLP v. Troice, 12-79, U.S. Supreme Court (Washington). The Madoff appeal in the circuit court is Trezziova v. Kohn (In re Herald, Primeo, and Thema), 12-156, U.S. Court of Appeals for the Second Circuit. The SLUSA case before Rakoff in the Madoff case is In re Bernard L. Madoff Investment Securities LLC, 12-mc-00115, U.S. District Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid 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. About Stanford Group The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management served more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The case in district court was Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington). The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. BERNARD L. MADOFF: Trustee's Win Has Banks Seeking Quick Appeal --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Credit Suisse AG, Barclays Plc and 17 other foreign banks urge U.S. District Judge Jed Rakoff to let them immediately appeal his Oct. 29 opinion giving the trustee unwinding Bernard Madoff's firm the right to sue them as feeder-fund customers. According to the report, although Judge Rakoff more often than not ruled against the Madoff trustee, Irving Picard, in other cases, his October ruling allows suits to go ahead against investors who gave their money to feeder funds that in turn invested with Madoff. Judge Rakoff said Picard isn't required to obtain a judgment first against the feeder funds before he can sue the banks. Judge Rakoff interpreted bankruptcy law to mean that Picard can sue feeder-fund customers even if the time limit has lapsed for suing the funds themselves. The banks on Nov. 12 asked Judge Rakoff to authorize an immediate challenge to the U.S. Court of Appeals in Manhattan. Otherwise, the lawsuits would go back to bankruptcy court where the banks couldn't appeal until after the suits were finished and a judgment entered requiring the return of money to Picard. An immediate appeal is needed because Judge Rakoff's ruling was the "first decision of any court holding that a trustee need not bring a timely claim against a subsequent transferee," the banks said. They also pointed to Judge Rakoff's recognition that the governing statute is ambiguous. The banks based their request on a statute that permits an immediate appeal if the matter "involves a controlling issue of law" where there is "substantial ground for difference of opinion." Picard will oppose an immediate appeal, Amanda Remus, a spokeswoman for the trustee, said in an e-mailed statement. 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. BJ'S WHOLESALE: Upsized 1st Lien Debt No Effect on S&P's Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services said that the upsize of BJ's Wholesale Club Inc.'s first-lien term loan has no effect on its corporate credit rating, issue-level and recovery ratings, or outlook on the company. BJ's is upsizing its first-lien term loan to $1.5 billion from $1.45 billion, and reducing its $650 million second-lien term loan to $600 million. "Although recovery prospects for the first-lien term loan lenders diminish somewhat because of the facility upsize, the recovery rating on that debt instrument remains '4', reflecting our expectation for average (30%-50%) recovery of principal in the event of a payment default. The recovery rating on the company's second-lien term loan remains '6', indicating that lenders will achieve negligible (0%-10%) recovery of principal in the event of a payment default." The proposed first-lien term loan upsize will enable the company to modestly lower its interest expense but has no meaningful impact on its credit ratios. "Pro forma for the transaction, we calculate total debt-to-EBITDA ratio of about 8.8x and EBITDA coverage of interest is thin at about 1.7x at Aug. 3, 2013." RATINGS LIST Ratings Unchanged BJ's Wholesale Club Inc. Corporate Credit Rating B-/Stable $1.5 bil. 1st-lien term loan B- Recovery Rating 4 $650 mil. 2nd-lien term loan CCC Recovery Rating 6 BONANZA CREEK: Moody's Rates New $150MM Sr. Unsecured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Bonanza Creek Energy, Inc.'s (BCEI) proposed offering of $150 million senior unsecured notes. The B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating (PDR) and stable outlook are not affected by this action. The notes will be an add on to the company's 6.75% senior unsecured notes due 2021 and will be part of the same series of debt securities. Proceeds of this debt offering will be used to repay outstanding borrowings under the company's revolving credit facility and for general corporate purposes. Ratings assigned: Senior Unsecured Notes Rating, B3, LGD-4 (68%) "The notes offering will provide the capital to further fund the rapid pace of development of BCEI's roughly 31,700 net acres in Colorado's Wattenberg Field," noted Andrew Brooks, Moody's Vice President. "The high liquids content from Wattenberg production yields attractive cash margins and provides substantial growth opportunities for Bonanza Creek. Relative debt leverage metrics are expected to remain at a levels that are appropriate for the B2 CFR." Ratings Rationale: The B2 CFR reflects BCEI's relatively small size in terms of production and reserves, while acknowledging the significant growth opportunities embedded in the company's acreage. The rating also reflects the company's strong cash margins from the high liquids content of its production both in its Rocky Mountain and Mid-Continent acreage, while factoring in the significant capital that is needed to further capitalize on the oil potential of its Wattenberg holdings. BCEI expects to outspend cash flow in 2014 and beyond, debt financing future deficits as it continues to grow production. While Moody's expects debt levels to increase, relative debt leverage should remain at modest levels. The company operates 99% of its proved reserves, providing a high degree of operational control, and affording it the flexibility to manage down its spending should market conditions pressure it to do so. BCEI's SGL-3 rating reflects Moody's view of adequate liquidity through 2014. The company will use the proceeds of its add on notes offering to pay down outstanding borrowings under its revolving credit facility, which approximated $68.5 million as of November 11. Moody's expects the company's 2014 capital spending program to generate cash flow deficit , which will be partially funded by add on note proceeds and the full availability under its revolving credit facility. The $600 million committed revolving credit facility provides for a $330 million borrowing base, and permits the issuance of up to $200 million of unsecured notes without a reduction in its borrowing base. The revolver is scheduled to mature in September 2017, and is secured by all assets. It requires the company to maintain a current ratio of at least 1x and a leverage ratio (debt/EBITDAX) of less than 4x. Moody's does not foresee any covenant issues through 2014. The B3 rating on the proposed $150 million of senior unsecured notes reflects both the overall probability of default of BCEI, to which Moody's has assigned a PDR of B2-PD, and a Loss Given Default of LGD4 (68%). The size of the potential senior secured claims relative to the senior unsecured notes results in the senior notes being rated one notch below the B2 CFR under Moody's Loss Given Default Methodology. The rating outlook is stable, reflecting Moody's expectation that BCEI will make relatively modest use of leverage to fund its growth, maintaining debt to average daily production under $30,000 per Boe. An upgrade would be considered should BCEI grow production approaching 30,000 Boe per day while holding debt to average daily production below $25,000 per Boe. The rating could be downgraded if the company's drilling program in the Wattenberg fails to produce substantially higher results in 2014, or should debt leverage increase to over $30,000 per Boe of average daily production on a sustained basis. Bonanza Creek Energy, Inc. is an independent E&P company headquartered in Denver, Colorado. BONANZA CREEK: S&P Keeps B- Unsec. Note Rating Over $200MM Add-on ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B-' issue-level rating (one notch lower than the corporate credit rating) on Denver-based Bonanza Creek Energy Inc.'s senior unsecured notes due 2021 is unchanged following the company's proposed $200 million add-on. "The recovery rating on these notes is '5', indicating our expectation of modest (10% to 30%) recovery for unsecured noteholders in the event of a payment default. The 'B' corporate credit rating remains unchanged. The outlook is stable." "We expect proceeds from the proposed note add-on to be used to repay outstanding borrowings on the company's credit facility and for general corporate purposes." "The ratings on Bonanza Creek Energy Inc. reflect our assessment of the company's 'vulnerable' business risk, 'aggressive' financial risk profile, and 'adequate' liquidity," said Standard & Poor's credit analyst Susan Ding. "These assessments reflect Bonanza's small asset base and production levels, lack of geographical diversification, aggressive growth strategy, limited operating track record, spending levels in excess of projected operating cash flows, and participation in the highly cyclical and capital intensive oil and gas industry." The ratings also reflect the company's significant exposure to favorable crude oil prices, low cost structure, growth potential, high operatorship of its properties, and solid financial measures. Ratings List Bonanza Creek Energy Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged $500 mil. sr unsecd nts due 2021* B- Recovery Rating 5 *Includes the $200 mil. add-on BRAND ENERGY: S&P Ratings Off Watch Negative on Debt Refinancing ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Kennesaw, Ga.-based Brand Energy & Infrastructure Services (Brand) and removed all ratings from CreditWatch with negative implications. This follows Brand's announced debt financing related to the company's intended merger with Harsco Corp.'s infrastructure business and our assessment of the combined businesses' strategy, growth, profitability, and cash flow prospects. The rating outlook is stable. "We had initially placed the ratings on CreditWatch with negative implications on Sept. 20, 2013, following the company's announcement regarding the proposed acquisition, to reflect the potential for significant deterioration in Brand's credit metrics. Following the planned debt refinancing related to the intended merger, we expect Brand's credit metrics will worsen compared to our prior expectations but remain consistent with a 'B' rating over the next two years." "In addition to the affirmation and removal of the ratings from CreditWatch, we also assigned 'B' issue-level and '3' recovery ratings to the proposed $300 million revolving credit facility and $1,225 million senior secured term loan. A '3' recovery rating indicates our expectation of meaningful (50%-70%) recovery. For our analysis, we assume the acquisition closes with more than $1,725 million in funded debt, including some unsecured debt." "We will withdraw our existing 'B' issue-level and '3' recovery ratings on Brand's $75 million revolving credit facility and $775 million first-lien term loan, and our 'CCC+' issue-level and '6' recovery ratings on its $300 million second-lien term loan." "The ratings on Brand reflect our assessment of its business risk profile as "weak" and its financial risk profile as "highly leveraged." Brand's "highly leveraged" financial risk assessment is based on debt to EBITDA of about 6.5x for 2013 (including our adjustments, mainly for operating leases), with weak free operating cash flow (FOCF) prospects relative to its debt burden. "We expect gradual improvement in 2014, although these metrics will likely remain at the lower end of our expectations for the rating," said credit analyst Nishit Madlani. For the rating, we expect a ratio of adjusted debt to EBITDA of about 6x or less and FOCF to total debt in the low-single-digit area. "Debt leverage should improve toward 6x or less over the next 12- 18 months, assuming industry activity picks up to historical levels, which we believe is likely due to aging infrastructure and increased environmental regulation in its end-markets because customers generally can delay maintenance work only temporarily." "We expect low, but positive, free cash flow generation prospects over the next few years. We believe there is some downside risk related to sustained FOCF generation from higher capital intensity for Brand following the intended merger, with more risks tied to managing working capital outflows related to Harsco's infrastructure operations. Also, the meaningful debt and related interest payments will likely limit Brand's ability to generate consistent FOCF/debt of more than 5%." "We assume financial policies will remain aggressive, limiting any meaningful debt reduction, given Brand's sponsor ownership. We assume that Brand would pursue small tuck-in acquisitions (up to $50 million in purchase price) with cost-synergy opportunities related to the expansion of service offerings across a larger customer base within its end-markets." "Our business risk assessment incorporates Brand's dependence on the cyclical energy sector--particularly refineries and Canadian oil sands and, to a lesser extent, utilities and large industrial customers for a majority of its revenue. The proposed integration nearly doubles Brand's exposure to the infrastructure-related end- market (at about 19% of revenue on a combined basis), which is more project-focused and less recurrent with higher EBITDA margins, but has lower revenue visibility. In our view, this end- market has better profit margin potential from the typically higher rental equipment mix, but we do not assume any meaningful synergies from better utilization following the intended merger because projects are more customized and infrastructure equipment is less portable relative to other end-markets." "We expect Brand to remain one of the largest providers of work access (i.e., scaffolding) and specialty services (including insulation and coatings), given its improved geographic diversity following the integration and expansion across end-markets, mostly from higher customer spending and some share gains. Although some of its end-markets are cyclical, maintenance services (about 65% of revenues) tend to be more resilient to recessions. Maintenance work, along with long-term customer relationships, a high contract renewal rate, and a high variable cost profile, should allow Brand to cut costs and provide some stability to earnings and cash flows. Also, the risk of cost-overruns is not meaningful since the majority of Brand's contracts will likely be cost-reimbursable." "We expect demand for maintenance services in Brand's energy and industrial markets to grow modestly, at least in line with U.S. GDP (about 73% of sales are in the Americas), and for pricing to remain competitive." "We assume that revenue will grow at about a mid-single-digit rate for the remainder of 2013 and 2014, mainly as a result of business wins in its petrochemical end-markets and the slow economic recovery driving low growth in its refining- and oil sands-related end-markets." "We assume that EBITDA margins in 2013 and 2014 for the combined entity will remain somewhat lower than Brand's recent stand-alone EBITDA margins. In our view, Brand (in its stand-alone operations) will likely sustain improvements in EBITDA margins on slow demand recovery in its end-markets, given its recent ability to mitigate pricing pressures. However, we expect Harsco's infrastructure operations will be a drag on Brand's earnings over the next few quarters because it is still in the early stages of a recovery following its restructuring (reduced exposure to unprofitable operations in Western Europe and equipment downsizing to improve utilization) in recent years." "As the combined entity, Brand could take advantage of existing customer relationships and broaden its capabilities to service key customers globally. This could improve diversity and likely lead to consistent EBITDA margins in the 10%-12% range over the next two years through better asset utilization (especially in the specialized industrial services segment) and lower direct corporate and global procurement costs. We incorporate ongoing pricing pressure in our estimates, but also assume marginal improvement through contracts which have higher labor margins and which allow Brand to pass on higher labor rates to the customers." "The stable rating outlook reflects our expectation that leverage should improve toward 6x over the next 12 months, with positive FOCF, assuming industry activity picks up to historical levels, which is likely because customers generally can delay maintenance work only temporarily." "We could consider a downgrade if it appears likely that FOCF would remain negative over a sustained period amid weaker earnings and higher-than-expected investments in working capital. This would likely coincide with extended periods in which leverage stays more than 6.5x because of pressure on EBITDA margins for the combined entity. A downgrade also could occur if Brand's liquidity profile deteriorates on end-markets that are weaker than we expect for a prolonged period, leading to customers delaying maintenance work over the near term, or if Brand loses maintenance projects altogether." "An upgrade is unlikely over the next 12 months given our expectation that the company's financial risk profile will remain "highly leveraged." Significant factors for any positive rating action on the company would include a track record of low-double- digit EBITDA margins over the next year or so, with FOCF/debt sustainably approaching 5% or higher and leverage remaining at about 5x or less." BUFFALO PARK DEVELOPMENT: To Sell Assets, Won't Reorganize ---------------------------------------------------------- Buffalo Park Development Properties, Inc., intends to proceed with a sale of its water companies pursuant to 11 U.S.C. Sec. 363 and will not be proceeding with a plan of reorganization, according to a court filing by its owners. Owners of Buffalo Park -- Ronald P. Lewis and Carol J. Lewis -- have filed a Chapter 11 restructuring plan. The Lewises intend to restructure their debts and obligations and continue to operate in the ordinary course of business. According to the Disclosure Statement, the rental income from the Lewises' properties and their disposable income, together with the restructuring of the mortgages and other secured debts, will generate sufficient funds to pay on a pro-rata basis a portion of the Lewises' unsecured debts. A copy of the Disclosure Statement explaining the Lewises' proposed Chapter 11 plan dated Oct. 16, 2013, is available for free at: http://bankrupt.com/misc/Buffalo_Park_Lewis_Plan_Outline.pdf About Buffalo Park Development Properties Buffalo Park Development Properties, Inc., filed a Chapter 11 petition (Bankr. D. Colo. Case No. 13-17669) on May 7, 2013. Ronald P. Lewis signed the petition as owner and CEO. Buffalo Park disclosed $20,777,601 assets and $11,294,567 liabilities in its schedules. Robert Padjen, Esq., at Laufer and Padjen LLC serves as counsel to Buffalo Park. Judge Elizabeth E. Brown presides over the case. Formed in 1964, Buffalo Park is a real estate development, construction, management and sales business. It has developed and sold numerous subdivisions and currently has several land developments in progress. Buffalo Park owns and operates community water companies that require a licensed water works operator and owns a commercial business center. Owners of Buffalo Park -- Ronald P. Lewis and Carol J. Lewis -- filed for protection under Chapter 11 of the Bankruptcy Code on March 21, 2012. The Lewises have been investing in, developing and managing real property for over 60 years. The Bankruptcy Court granted joint administration of the two estates on July 18, 2013. BULLSEYE MERGERSUB: Moody's Gives B2 CFR & Rates $1525MM Notes B1 ----------------------------------------------------------------- Moody's Investors Service assigned Bullseye MergerSub, Inc. (Brand Energy & Infrastructure) B2 Corporate Family Rating, B2-PD Probability of Default Rating, and B1 ratings to the proposed $1,525 million senior secured credit facilities (including $300 million revolving credit facility). The ratings outlook is stable. The proceeds from the $1,225 million term loan will be used, along with other unsecured borrowings and $775 million of equity, to acquire Brand Energy and Infrastructure Services, Inc. and Harsco's infrastructure segment (together "Brand") by Clayton, Dubilier & Rice. The total transaction (including fees and expenses) is expected to be valued at $2,500 million and Moody's estimates the combined purchase multiple (excluding fees and expenses) to be approximately 7.4 times EBITDA (PF 2013). Bullseye MergerSub, Inc. is the initial borrower under the term loan. Concurrently with the close of the transaction and as the survivor of the contemplated merger Brand Energy and Infrastructure Services, Inc. ("Brand" a subsidiary of Brand Energy, Inc.) will become the borrower and Moody's will transfer all ratings to Brand. The following ratings were assigned (LGD point estimates are subject to change and all ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation): Corporate Family Rating, assigned B2; Probability of Default Rating, assigned B2-PD; $300 million first lien revolving credit facility due 2018, assigned B1 (LGD3, 35%); $1,225 million first lien term loan due 2020, assigned B1 (LGD3, 35%); The ratings outlook is stable. Ratings Rationale: The B2 Corporate Family Rating reflects Brand's high debt leverage at 5.8 times at the close of the transaction and expected aggressive balance sheet management. The rating also considers limited free cash flow generation as compared to debt levels with free cash flow to debt of between 4-5% over the next 12-18 months. Interest coverage is anticipated to be around 2 times which is in line with a B2 rating category. Additionally, the B2 Corporate Family Rating considers the historically weak performance of Harsco's infrastructure division. At the same time, the rating benefits from the size -- close to $3 billion of revenues -- and scale -- significant international presence - of the combined entity. Moreover, recurring revenue stream (65% of revenues are tied to maintenance), good liquidity profile, end market diversity, and positive industry dynamics provide support to the company's ratings. The stable outlook reflects expected improvement in credit metrics and positive trends in the company's end markets. The ratings could be downgraded if debt leverage climbs above 6 times, free cash flow generation turns negative, and EBITDA- CAPEX/interest expense weakens below 1.5 times, all on a sustained basis. The ratings could be upgraded if debt leverage declines below 4.5 times, interest coverage increases above 2.2 times, and free cash flow to debt rises to 8%, all on a sustained basis. Brand Energy & Infrastructure Services, Inc., headquartered in Kennesaw, GA, is the largest multi-craft specialty services company in North America and provides services globally as well. It's services include specialized industrial services and infrastructure services supporting the refining, chemical, construction and power industries. Clayton Dubilier & Rice, through affiliated funds, will be the majority owner of Brand and Harsco is expected to own around 29%. Pro forma revenues for 2013 are expected to be around $3 billion. CAPITOL BANCORP: Settlement With FDIC Gets Court Approval --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Capitol Bancorp Ltd., a bank holding company in Lansing, Michigan, got bankruptcy court approval on Nov. 12 for a settlement with the Federal Deposit Insurance Corp. that allows an auction to proceed with Wilbur Ross's Talmer Bancorp Inc. as the presumptive purchaser. According to the report, the settlement resolved the FDIC's so- called cross-guarantee claims. From the sale, the FDIC will get 85 percent of net proceeds, with Capitol retaining 15 percent. Unless outbid, Talmer will pay $4.5 million for four banks and pay the cost to cure breaches of contracts. Talmer will also inject $90 million of capital into the banks and establish an escrow account with $2.5 million to pay professional fees. Talmer wouldn't proceed with the purchase absent freedom from the cross-guarantee claims, which arose when sister banks failed and were taken over by regulators. The auction for the four banks is to be Nov. 18. A hearing for sale approval is on the Nov. 19 calendar. Absent a sale, Capitol said, the FDIC would take over the banks. In one month this year, four different Capitol bank subsidiaries were taken over. BankruptcyData reports that Capitol Bancorp said, "First and foremost, the Settlement will result in the waiver of the Cross- Guaranty Liability with respect to the sales of the Banks, thus facilitating those sales consistent with the Plan. Moreover, pursuant to the Settlement, 15 percent of the proceeds from each sale will go to the Debtors' estates for distribution in accordance with the Plan (or, if the Plan is not confirmed, the Bankruptcy Code and applicable law). Because the FDIC contends that it has no obligation to waive the Cross-Guaranty Liability or share any portion of the net proceeds of the sales of the Banks with the Debtors' estates, 15 percent of such proceeds is considerably beneficial to the estates." 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. CENGAGE LEARNING: Revamps Bankruptcy-Exit Plan Ahead of Hearing --------------------------------------------------------------- Stephanie Gleason, writing for Daily Bankruptcy Review, reported that Cengage Learning Inc. filed a revamped bankruptcy-exit plan six hours before the start of a key Nov. 12 morning hearing, changing the way potential payouts for unsecured creditors are protected and causing a bankruptcy judge to delay an initial review of the textbook maker's blueprint. According to the report, the latest version of Cengage's plan, filed on Nov. 12 at 2:14 a.m., establishes an escrow account holding $111.9 million in cash and equity, a set-aside until a battle over a group of assets -- including a pool of cash and a valuable trove of copyrights -- can be resolved. About Cengage Learning Stamford, Connecticut-based Cengage Learning -- http://www.cengage.com/-- provides innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. Cengage Learning's brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South Western and Wadsworth, among others. Apax Partners LLP bought Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion transaction. The acquisition was funded in part with $5.6 billion in new debt financing. Cengage Learning Inc. filed a petition for Chapter 11 reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2, 2013, in Brooklyn, New York, after signing an agreement where holders of $2 billion in first-lien debt agree to support a reorganization plan. The plan will eliminate more than $4 billion of $5.8 billion in debt. First-lien lenders who signed the so-called plan-support agreement include funds affiliated with BlackRock Inc., Franklin Mutual Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second- lien creditors and holders of unsecured notes aren't part of the agreement. The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard Freres & CO. LLC as financial advisor, Alvarez & Marsal North America, LLC, as restructuring advisor, and Donlin, Recano & Company, Inc., as claims and notice agent. The Debtors filed a Joint Plan of Reorganization and Disclosure Statement dated Oct. 3, 2013, which provides that the Debtors took extreme care to advance and protect the interest of unsecured creditors -- including seeking to protect four primary sources of potential recoveries for unsecured creditors and providing them with appropriate time to conduct diligence, and discuss their conclusions on, among other things, the value of those sources of potential recoveries. CENVEO INC: Moody's Slashes CFR to 'Caa1' & Loan Rating to 'B2' --------------------------------------------------------------- Moody's Investors Service downgraded Cenveo, Inc.'s corporate family rating (CFR) to Caa1 from B3, and probability of default rating (PDR) to Caa1-PD from B3-PD. At the same time, Moody's downgraded the company's senior secured term loan to B2 from Ba3, its senior secured second lien notes to Caa1 from B3 and its senior unsecured notes to Caa3 from Caa2. Moody's affirmed Cenveo's speculative grade liquidity (SGL) rating at SGL-3 (adequate liquidity). The outlook is now stable. The action concludes a review initiated on August 26, 2013. The ratings downgrades result from Moody's opinion that Cenveo's capital structure may not be sustainable. Moody's anticipates Debt-to-EBITDA leverage remaining in the 6x range for the foreseeable future as revenues decline organically and some debt is repaid from modest free cash flow. Since the enterprise valuation is uncertain and the 6x EBITDA multiple may roughly correspond with a potential enterprise multiple, it is not clear at this juncture whether Cenveo will be able to refinance its debts without a distressed exchange. Cenveo is in the midst of a protracted business restructuring with myriad execution risks and an uncertain outcome. The recent National Envelope acquisition continues the company's transformation such that envelope converting now represents nearly 50% of pro forma revenues, with commercial printing's contribution declining towards 30%. However, envelope converting faces secular pressures which echo those of commercial print and the two industries' pricing and volume trends are highly correlated. Accordingly, it remains to be seen whether the change in revenue composition will be beneficial. Since, pro forma for recent and pending acquisition and divestiture activity, Cenveo will generate modest levels of free cash flow and does not face maturing debts until early 2017, the company has adequate liquidity and has time to substantiate its cash flow self-sustainability and enterprise value, the outlook is stable. Cenveo Corporation is a wholly-owned subsidiary of Cenveo, Inc. (Cenveo), a publicly traded holding company. While all debt instruments are issued by Cenveo Corporation, since Cenveo Inc. guarantees all of Cenveo Corporation's debt and financial statements are issued only by Cenveo Inc., Moody's maintains corporate-level ratings and the associated outlook at Cenveo Inc. The following summarizes Cenveo's ratings and rating actions: Issuer: Cenveo, Inc. Corporate Family Rating: Downgraded to Caa1 from B3 Probability of Default Rating: Downgraded to Caa1-PD from B3-PD Speculative Grade Liquidity Rating: Affirmed at SGL-3 Outlook: Changed To Stable From Under Review Issuer: Cenveo Corporation Senior Secured Bank Credit Facility Apr 16, 2020: Downgraded to B2 (LGD2, 26%) from Ba3 (LGD2, 23%) Senior Secured Regular Bond/Debenture Feb 1, 2018: Downgraded to Caa1 (LGD4, 55%) from B3 (LGD4, 54%) Senior Unsecured Regular Bond/Debenture May 15, 2017: Downgraded to Caa3 (LGD5, 85%) from Caa2 (LGD5, 85%) Rating Rationale: Cenveo's Caa1 corporate family rating stems primarily from uncertainty that its capital structure is sustainable. With estimated 2014/2015 pro forma leverage of Debt-to-EBITDA in the low-to-mid 6x range and with enterprise valuations being uncertain and potentially being at similar multiples, refinancing without a distressed exchange is questionable, especially as both envelope converting and commercial printing are in secular decline. Cenveo is involved in a protracted business and asset portfolio restructuring aimed at diversifying away from legacy commercial printing activities, the outcome of which is uncertain. The rating benefits from the company's ability to generate free cash flow and from an absence of near term debt maturities, both of which provide time to complete the business restructuring and preclude a potential financial restructuring. Rating Outlook: The outlook is stable because Cenveo has time to continue its business restructuring initiatives and because leverage and coverage are expected to be relatively stable through 2014/2015. What Could Change the Rating - Up: Should it be clear that the company is cash flow self-sustainable and it is likely they'll be able to refinance their debts, positive ratings actions would be likely. What Could Change the Rating - Down: Cenveo's ratings could be downgraded if liquidity and refinance issues arise in advance of the company's cash flow self- sufficiency being proven. Company Profile: Headquartered in Stamford, Connecticut, Cenveo Corporation, a wholly-owned subsidiary of Cenveo, Inc. (Cenveo, a publicly traded holding company), with estimated annual pro forma revenues of about $2.0 billion, is involved in envelope converting (about 50% of revenue, pro forma for the recent National Envelope acquisition), commercial printing and related activities (about 30% of pro forma revenues), labels (about 15% of pro forma revenues) and packaging (~5% of pro forma revenues). CHEROKEE SIMEON: Court Rejects Creditor's Bid for Sanctions ----------------------------------------------------------- Bankruptcy Judge Kevin Gross denied the request of creditor EFG- Campus Bay LLC to (i) find that Cherokee Simeon Venture I, LLC, filed for Chapter 11 bankruptcy in "bad faith"; and (ii) to impose sanctions. The judge said the request is both procedurally and substantively deficient. Judge Gross noted that EFG-Campus Bay never filed a motion. The creditor alleges the Debtor filed its bankruptcy petition in bad faith and that it, EFG-Campus Bay, is entitled to at least $558,590.03, stating that it has incurred $412,612.41 in legal fees and costs from the Chapter 11 case and $143,853.78 in consequential damages. A copy of Judge Gross' November 12, 2013 Memorandum Opinion is available at http://is.gd/ZDWDl2from Leagle.com. About Cherokee Simeon Cherokee Simeon Venture, I, LLC, is an AstraZeneca Plc affiliate that owns a contaminated former acid-factory site in Richmond, California. Cherokee Simeon sought Chapter 11 protection (Bankr. D. Del. Case No. 12-12913) on Oct. 23, 2012. Cherokee Simeon disclosed $33,600,000 in assets and $17,954,851 in debts in its schedules. Rafael Xavier Zahralddin-Aravena, Esq., at Elliott Greenleaf, represents the Debtor. On May 31, 2013, the Bankruptcy Court dismissed the Debtor's chapter 11 case. CHINA JO-JO: Gets 180-Day NASDAQ Listing Compliance Extension ------------------------------------------------------------- China Jo-Jo Drugstores, Inc. on Nov. 12 disclosed that on November 6, 2013, it received notification from NASDAQ granting the Company an additional 180-day period, or until May 5, 2014, to remain listed on the NASDAQ Capital Market and to regain compliance with NASDAQ's minimum $1.00 bid price per share rule. Under NASDAQ Listing Rules, the Company was granted this extension because it met the continued listing requirement for market value of publicly held shares and all other applicable NASDAQ listing requirements, except the bid price requirement. The Company provided written notice to NASDAQ of its intention to cure the bid price deficiency during the second compliance period by affecting a reverse stock split, if necessary. The Company will regain compliance with the minimum bid requirement if at any time prior to May 5, 2014, the bid price for the Company's common stock closes at $1.00 per share or above for a minimum of 10 consecutive business days. If the Company does not regain compliance by the end of this extension period, it will receive notification from NASDAQ that its shares are subject to delisting. At that point, the Company may then appeal the delisting determination to a NASDAQ Hearings Panel. About China Jo-Jo Drugstores, Inc. China Jo-Jo Drugstores, Inc., through its subsidiaries and contractually controlled affiliates, is a retailer and wholesale distributor of pharmaceutical and other healthcare products in the People's Republic of China. As of September 30, 2013, the Company had 51 retail pharmacies throughout Zhejiang Province and Shanghai. COCOPAH NURSERIES: Second Amended Plan Declared Effective --------------------------------------------------------- Cocopah Nurseries of Arizona, Inc., et al., have notified the U.S. Bankruptcy Court for the District of Arizona that the Effective Date of the Debtors' Second Amended Plan of Reorganization occurred on Nov. 1, 2013. On Oct. 15, 2013, the Bankruptcy Court entered an order confirming the Debtors' Second Amended Plan of Reorganization. A copy of the Confirmation Order is available at: http://bankrupt.com/misc/COCOPAHNURSERIES_plan_order-1.pdf About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COLUSA MUSHROOM: Committee's Laywer Not Entitled to Indemnity ------------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky denied the request of David Chandler, former counsel for the Official Creditors' Committee in the 2005 chapter 11 case of Colusa Mushroom, Inc., for reimbursement of his legal expenses related to his defense of a professional negligence lawsuit. In 2011, Mr. Chandler was sued in state court for professional negligence by four of the five members of the Creditors' Committee in their individual capacities. They alleged Mr. Chandler was negligent in failing to make sure that the security interest was properly perfected. The lawsuit was ultimately dismissed, but Mr. Chandler incurred $5,000.00 in legal expenses due to the deductible in his malpractice insurance. In the guise of a fee application, Mr. Chandler seeks indemnity from the bankruptcy estate for this expense. He cites no statute or case in support of his application. The Chapter 7 trustee for Colusa Mushroom, Jeffry Locke, objects. "The court finds that Chandler has not met his burden of showing that his legal expenses defending himself from suit by members of the Creditors Committee advanced the interests of the unsecured creditors in the case. Moreover, the expenses were not in any way beneficial toward completion of the case. Accordingly, Chandler will not be indemnified for them from the bankruptcy estate," Judge Jaroslovsky said in a November 11, 2013 Memorandum available at http://is.gd/6dRo3wfrom Leagle.com. "The court cannot help noting that while Chandler did not have a legal duty to make sure that the estate's note was properly perfected, he was in a position to do so and, had he done just a little more than was legally required of him, he might well have saved the estate and his constituency from significant losses. While his failure to save the estate's bacon is not culpable, the court finds no injustice in requiring Chandler to bear the expenses related to his insurance deductible. The court accordingly doubts that it would allow the expense even if Chandler had cited some authority in support of its allowance." Colusa Mushroom, Inc., filed its Chapter 11 petition (Bankr. N.D. Calif. Case No. 05-12180) on August 22, 2005. Its plan of reorganization was confirmed June 29, 2006. Pursuant to the plan, the debtor's business was to be sold to Premier Mushrooms, LP. The debtor's estate was to receive a note for approximately $1.3 million secured by the assets sold to Premier. The note was given, but the security interest not perfected. The case was reopened on March 31, 2011, and converted to Chapter 7 on July 14, 2011. COOPER-BOOTH: Wants More Exclusivity, Cites Prospective Buyer ------------------------------------------------------------- Cooper-Booth Wholesale Company, L.P. and its debtor affiliates ask the court to further extend their exclusive period to file a plan or plans for an additional 60 days to Jan. 16, 2014, and the exclusive period to solicit acceptances or rejections by 60 days to March 17, 2014. The Debtors believe that if exclusivity is extended, they will be able to pursue negotiations with their creditors regarding a consensual plan or plans. The Debtors say they have signed an indication of interest with a prospect. They have devoted substantial time in assisting the prospect perform due diligence which is ongoing. Counsel to the Debtors, Robert W. Seitzer, Esq., at Maschmeyer Karalis P.C., in Philadelphia, avers that the conclusion of the ongoing due diligence with the prospect is necessary in order for the Debtors and prospect to be able to determine if they will be able to proceed with a transaction that will allow the Debtors to file a plan or plans. JCG Foods LLC, which asserts claims on account of more than $650,000 of poultry products delivered to the Debtors within 20 days preceding the Petition Date, says the Debtors have, for many months, promised to pay 11 U.S.C. Sec. 503(b)(9) expenses upon the anticipated confirmation of the Debtors' plans in January 2014. JCG says that a central tenant of the Court's Oct. 16, 2013 procedures order regarding Section 503(b)(9) expenses required the Debtors to file their Chapter 11 plan on or before Nov. 30, 2013, and have such plan confirmed by Jan. 31, 2014, at which time Section 503(b)(9) administrative expenses would be paid. "[The] Debtors' current Motion to extend their exclusivity period, although not directed solely at Section 503(b)(9) claimants, will have the effect of causing further delay in the payment of Section 503(b)(9) expenses and/or requiring additional unnecessary litigation costs, by requiring Section 503(b)(9) claimants to either seek payment of their claims or wait until well into 2014 to be paid -- an especially distasteful and unfair situation, as other administrative creditors continue to be paid contemporaneously as they incur their administrative claims," JCG says. Counsel to JCG can be reached at: MONTGOMERY, McCRACKEN, WALKER & RHOADS, LLP Joseph O'Neil, Jr., Esq. 123 S. Broad Street Philadelphia, PA 19109 Tel: (215) 772-1500 About Cooper-Booth Wholesale Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized the Company's bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. Serving the mid-Atlantic region, Cooper is one of the top 20 convenience store wholesalers in the country. Cooper supplies cigarettes, snacks, beverages and other food items from Hershey's, Lellogg's, Bic, and Mars to convenience stores. Cooper has been in the wholesale distribution business since 1865 when the Booth Tobacco Company was incorporated in Lancaster, Pennsylvania. The Company has been family owned and operated for three generations. Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Executive Sounding Board Associates, Inc., is the financial advisor. SSG Advisors, LLC, serves as investment bankers. Blank Rome LLP represents the Debtor in negotiations with federal agencies concerning the seizure warrant. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed three members to the Official Unsecured Creditors' Committee in the Chapter 11 case. Cooper Booth disclosed $58,216,784 in assets and $35,054,482 in liabilities as of the Chapter 11 filing. As of the Petition Date, the Debtors' total consolidated funded senior debt obligations were approximately $10.7 million and consisted of, among other things, $7.72 million owing on a revolving line of credit facility, $2.83 million owing on a line of credit for the purchase of equipment, and $166,000 due on a corporate VISA Card. PNC Bank asserts that a letter of credit facility is secured by all personal property owned by Wholesale. Unsecured trade payables totaled $22.8 million as of May 21, 2013. CUE & LOPEZ: Charles A. Cuprill Approved as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico authorized Cue & Lopez Construction, Inc., to employ Charles A. Cuprill, P.S.C., Law Offices as its counsel. As reported in the Troubled Company Reporter on Oct. 21, 2013, the Debtor has provided the firm a $15,000 retainer, against which the law firm will bill on the basis of $350 per hour, plus expenses, for work performed or to be performed by Charles A. Cuprill-Hernandez, Esq.; $225 per hour for any senior associate; $150 per hour for junior associates; and $85 per hour for paralegals. San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 4, 2013 (Case No. 13-08297, Bankr. D.P.R.). The case is assigned to Judge Brian K. Tester. The Debtor is represented by Charles Alfred Cuprill, Esq., at CHARLES A CURPILL, PSC LAW OFFICE, in San Juan, Puerto Rico. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its accountant. The Debtor discloses assets of $12.65 million and liabilities of $16.66 million. The Chapter 11 petition was signed by by Frank F. Cue Garcia, president. CUE & LOPEZ: Carrasquillo Approved as Financial Consultant ---------------------------------------------------------- Cue & Lopez Construction, Inc., obtained permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ CPA Luis R. Carrasquillo & Co., P.S.C., as accountant to assist the Debtor's management in the financial restructuring of its affairs by providing advice in strategic planning and the preparation of the Debtor's plan of reorganization, disclosure statement and business plan, and participating in negotiations with creditors. As reported in the Troubled Company Reporter on Oct. 21, 2013, the Debtor retained Carrasquillo on the basis of a $10,000 advance retainer, against which the firm will bill as per the hourly billing rates. CPA Luis R. Carrasquillo Ruiz, a partner at the firm, will be paid $160 per hour. San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 4, 2013 (Case No. 13-08297, Bankr. D.P.R.). The case is assigned to Judge Brian K. Tester. The Debtor is represented by Charles Alfred Cuprill, Esq., at CHARLES A CURPILL, PSC LAW OFFICE, in San Juan, Puerto Rico. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its accountant. The Debtor discloses assets of $12.65 million and liabilities of $16.66 million. The Chapter 11 petition was signed by by Frank F. Cue Garcia, president. CULLMAN REGIONAL: Fitch Affirms 'BB+' Rating on $65.1MM Bonds ------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on the following Health Care Authority of Cullman County bonds issued on behalf of Cullman Regional Medical Center (CRMC): -- $65.1 million revenue bonds, series 2009A. The Rating Outlook is Stable. Security: The bonds are supported by a pledge of revenues, mortgage, and debt service reserve. Key Rating Drivers: Improved Operating Performance: The affirmation and outlook reflect CRMC's improved performance in fiscal 2013 (June 30 year- end) and through the three-month interim period ended Sept. 30, 2013, which was expected. CRMC produced a much improved 9.1% operating EBITDA margin in fiscal 2013, ahead of the 5.4% generated in fiscal 2012. Healthy Liquidity: CRMC's work to reduce its accounts receivable (A/R) and improve its cash flow resulted in better unrestricted liquidity levels, which equaled $37.7 million at Sept. 30 2013. This equated to 150.1 days of cash on hand (DCOH), a 6.6x cushion ratio and 57.6% cash to debt. Fitch expects a stable balance sheet via sustained cash flow and continued receivables management. Strong Market Position: CRMC's designation as a Sole Community Hospital (SCH) reflects its solid market position as the only acute care provider in Cullman County, and allows for strong payor contracts and enhanced Medicare reimbursement. Significant Leverage: CRMC remains very leveraged with MADS equating to a high 6.2% of fiscal 2013 revenues. As calculated by Fitch, CRMC's coverage of maximum annual debt service (MADS) by EBITDA was a light 1.8x in fiscal 2013. No additional debt is expected. Rating Sensitivities: Sustained Operating Performance: CRMC is budgeting for steady performance in 2014, with near breakeven operating results. Steady cash flow coupled with manageable capital needs should preserve liquidity, and reduce CRMC's debt burden over the longer term. Upward rating movement would require that CRMC further strengthen its liquidity, sustain improved operating results and reduce its leverage metrics to levels more commensurate with the 'BBB' category. Credit Profile: CRMC is an acute care general hospital with 145 licensed beds (115 beds in service), located in Cullman, AL, which is 50 miles north of Birmingham. CRMC is designated as a Level III trauma center and the only provider of interventional cardiology services through an affiliation agreement with University of Alabama Medical System at Birmingham (UAB) between Birmingham and Huntsville. Total revenues were $90.1 million in fiscal 2013. The hospital covenants to disclose quarterly unaudited (within 60 days) and annual audited financial statements (within 120 days) including management discussion and analysis by to the Municipal Securities Rulemaking Board's EMMA System. Fitch believes that CRMC disclosure practices are very good. Operating Improvements: CRMC was successful in meaningful expense reductions in fiscal 2013, reducing total expenses by 3%, against a 1% increase in total revenues. As a result, CRMC reduced its operating loss to 1.1% (against a 5.2% loss in 2012) and has narrowed that loss further to 0.7% through the three-month interim period ended Sept. 30, 2013. Much of the improvement resulted from cost reductions, but also from improved reimbursement from managed care providers and Medicare as a result of CRMC's market position and sole provider status. Good Market Position: CRMC maintained leading market position in 2013, with over 80% share of clinical volumes within its primary service area, identified as the 13 contiguous zip codes surrounding the hospital (approximately 35 mile radius). Fitch remains concerned about the generally unfavorable demographic and economic indicators of the service area, and the impact on bad debt and Medicaid levels, which remain somewhat high (7.1% and 9.9% of fiscal 2013 gross patient revenues). However, CRMC's market position has allowed it to negotiate with payors, providers and suppliers from a position of strength, and makes CRMC an appealing partner within the region. Significant Leverage: Fitch's primary concern is CRMC's leverage, which remains high. Debt to EBITDA and debt to capitalization were 6.2x and 60.3%, respectively, for fiscal 2013, and unfavorable to Fitch's below 'BBB' category medians of 5.7x and 59.6%. Still, no additional debt is expected, and steady operating cash flow should allow for debt moderation over the longer term. DARA BIOSCIENCES: Gets 180-Day NASDAQ Listing Compliance Extension ------------------------------------------------------------------ DARA BioSciences, Inc. on Nov. 12 disclosed that the NASDAQ Listing Qualifications Staff has granted the company's request for an additional 180-day period in which to regain compliance with the minimum $1.00 bid price per share requirement. The NASDAQ Listing Qualifications Staff's determination to grant the additional 180-day compliance period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the NASDAQ Capital Market, with the exception of the bid price requirement, and the Company's written notice of its intention to cure the deficiency during the additional 180-day compliance period by effecting a reverse stock split, if necessary. About DARA BioSciences, Inc. Headquartered in Raleigh, North Carolina, DARA BioSciences Inc. -- http://www.darabio.com-- is an oncology supportive care pharmaceutical company dedicated to providing healthcare professionals a synergistic portfolio of medicines to help cancer patients adhere to their therapy and manage side effects arising from their cancer treatments. DEAN FOODS: Fitch Assigns 'BB'- IDR & Unsecured Notes Ratings ------------------------------------------------------------- Dean Foods Co. (Dean-NYSE:DF) announced the commencement of a cash tender offer for up to $400 million combined aggregate principal amount of its 9.75% senior unsecured notes due Dec. 15, 2018 and 7% senior unsecured notes due June 1, 2016. The firm simultaneously announced that its Board of Directors has adopted a new dividend policy and an increase in its share authorization program. At Sept. 30, 2013, Dean had approximately $1 billion of total debt and $361 million of cash. Dean's current ratings can be found at the end of this release. Cash Tender Offer: The tender offer will be funded with existing cash and borrowings under Dean's undrawn $750 million secured revolver that expires on July 2, 2018. Holders of the notes are eligible to receive a total consideration that includes an early tender premium of $30 per $1,000 principal amount of notes if tendered and accepted on Nov. 26, 2013. The tender offer expires on Dec. 10, 2013, unless extended. Dividends and Share Repurchases: In addition to the tender offer and a corresponding consent solicitation with respect to the 2018 notes, Dean adopted a new dividend policy and increased its share repurchase authorization to $300 million. The firm expects to begin paying a $0.07 per share quarterly dividend the first quarter of 2014 while share buybacks will be opportunistic. Based on shares outstanding at Sept. 30, 2013, dividend payments will total roughly $27 million but should be mainly offset by interest savings associated with up to $400 million of debt reduction. No Immediate Rating Implications: Fitch views further debt reduction positively given Dean's low margins, volatile operating earnings, and limited diversification. However, the transaction is neutral to ratings due to Dean's currently weak operating performance and continued fundamental challenges faced by the fluid milk industry which has excess capacity and is experiencing volume pressures. During the first nine months of 2013, net sales from continuing operations fell 1.4% to $2.2 billion. The decline was due to lower volumes that were only partially offset by the pass-through of higher dairy commodity costs. Gross margin declined to 21% from 23.2% and operating margin fell to 1.5% from 3.3% during the comparable nine-month period of 2012. Dean continues to make progress rationalizing its business, as the firm has closed seven of up to 12 plants targeted by the middle of 2014. However, the benefit of reduced distribution and SG&A savings is lagging current volume declines. For the latest 12 months (LTM) period ended Sept. 30, 2013, total debt-to-operating EBITDA was approximately 2.5x. Fitch estimates that Dean would have $700 million-$800 million of debt if it redeems all $400 million of its notes, resulting in pro forma total debt-to-operating EBITDA of between 1.7x and 2.0x. Ratings reflect Fitch's view that Dean can generate $400 million - $450 million of EBITDA on a normalized basis. Prior to the initiation of its common dividend, Fitch expected the firm to generate an average free cash flow (FCF) of about $100 million annually beginning in 2014. Dean expects to generate $391 million - $400 million of adjusted EBITDA and $100 million of adjusted FCF in 2013. Dean's current ratings are as follows: Dean Foods Company (Parent) -- Issuer Default Rating (IDR) 'BB-'; -- Secured bank credit facility 'BB+'; -- 7.0% senior unsecured notes due June 1, 2016 'BB-'; -- 9.75% senior unsecured notes due Dec. 15, 2018 'BB-'. Dean Holding Company (Operating Subsidiary) -- IDR 'BB-'; -- 6.9% senior unsecured notes due Oct. 15, 2017 'BB-'. The Rating Outlook is Stable. DESIGNER FURNITURE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Designer Furniture Warehouse, LLC aka DFW aka DFW Furniture 2541 Westbelt Drive Columbus, OH 43228 Case No.: 13-59015 Chapter 11 Petition Date: November 13, 2013 Court: United States Bankruptcy Court Southern District of Ohio (Columbus) Judge: Hon. Kathryn Preston Debtor's Counsel: Matthew Fisher, Esq. ALLEN, KUEHNLE STOVALL & NEUMAN LLP 17 South High Street, Suite 1220 Columbus, OH 43215 Tel: (614) 221-8500 Fax: (614) 221-5988 Email: fisher@aksnlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Charles L. Kidder, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ohsb13-59015.pdf DETROIT, MI: State Board Approves 30-Year Belle Isle Lease ---------------------------------------------------------- Reuters reported that a Michigan emergency loan board on Nov. 12 approved a plan for the state of Michigan to lease Belle Isle park from Detroit for 30 years, with possible extensions up to 60 years, rejecting a competing plan from Detroit's city council that would have limited the initial lease period to 10 years. According to the report, the three-member panel, which was appointed by Michigan Governor Rick Snyder, unanimously approved the lease, which is for 30 years with two optional 15-year renewals. The state also has said it will spend up to $20 million to improve facilities on the island park in the Detroit River in the first 18 to 36 months of its management, which will begin in 90 days. Michigan Governor Rick Snyder, Detroit Emergency Manager Kevyn Orr and other state officials signed the agreement last month over objections from the Detroit City Council, which had proposed a lease of 10 years, with two 10-year renewals, the report related. The state said it hopes to finance the improvements through grants, bonds and private donations, and the longer lease will be helpful in seeking funding for the upgrades to the island's public facilities, it said, the report further related. "One of the key terms involved with this was the financing terms and the time involved as was stated," said Bill Nowling, Orr's spokesman, the report cited. "We think that 30 years is important to get all the financing in place so that we can get the improvements in place over time. Ten years is just too short of a time to do that." About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. DEVONSHIRE PGA: Alvarez & Marsal Approved to Provide CRO -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Devonshire PGA Holdings, LLC, et al., to employ Alvarez & Marsal Healthcare Industry Group, LLC to provide the Debtors a chief restructuring officer and certain additional personnel; and designate Paul Rundell as chief restructuring officer. As reported in the Troubled Company Reporter on Oct. 11, 2013, Mr. Rundell and the Additional Personnel are expected to: (a) perform a financial review of the company, including but not limited to a review and assessment of financial information provided by the company to its creditors, including without limitation its short and long-term projected cash flows and operating performance; (b) assist the company's engaged professionals in developing for the managers' review possible restructuring plans in strategic alternatives for maximizing the enterprise value of the company's various business lines; and (c) perform other services as requested or directed by the managers or the owner managers on the managers' behalf or other company personnel as authorized by the responsible representatives, and agreed by Alvarez & Marsal that is not duplicative of work others are performing for the company. Mr. Rundell will serve as the principal contact with the company's creditors with respect to the company's financial and operational matters. Alvarez & Marsal will be paid at these hourly rates: Managing Director $650-$850 Director $450-$650 Associate/Consultant $350-$450 Analyst $250-$350 Mr. Rundell, managing director at Alvarez & Marsal, will charge $650 per hour and will have primary responsibility for overseeing the services to be rendered to the company under the engagement letter. Alvarez & Marsal will charge normal and customary rates, with 20% discount on fees and with a cap on monthly fees of $100,000. Alvarez & Marsal will also be reimbursed for reasonable out-of- pocket expenses incurred. Alvarez & Marsal received $75,000 as a retainer in connection with the preparation and filing of the Chapter 11 cases. In the 90 days prior to the petition date, Alvarez & Marsal received retainers and payments totaling $75,000 in the aggregate for services performed for the Debtors. Alvarez & Marsal applied these funds to amounts due for services rendered and expenses incurred prior to the petition date, leaving a remaining retainer balance of $9,063.71, which will continue to remain outstanding through the Chapter 11 cases. Mr. Rundell assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Devonshire PGA Holdings Operators of assisted living facilities, led by Devonshire PGA Holdings LLC, sought Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware on Sept. 19, 2013. Chatsworth PGA Properties (Bankr. D. Del. Case No. 13-12457) has estimated liabilities of between $100 million and $500 million, and assets of up to $10 million. Chatsworth PGA Properties provides assisted living services for the elderly. It also offers nursing and dementia care. Devonshire PGA Holdings LLC (Case No. 13-12460), the owner of an assisted-living facility in Florida, and based in Palm Beach Gardens, estimated under $50,000 in assets and up to $50 million in debts. Another entity, Devonshire at PGA National LLC, estimated more than $100 million in both assets and debt. The Debtors are represented by M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, as counsel. Epiq Bankruptcy Solutions, LLC, serves as claims agent, and as administrative advisor for the Debtors. Alvarez & Marsal Healthcare Industry Group, LLC, serves as restructuring advisors, and Alvarez's Paul Rundell serves as Chief Restructuring Officer. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. DEVONSHIRE PGA: Epiq Bankruptcy Okayed as Administrative Advisor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized Devonshire PGA Holdings, LLC, et al., to employ Epiq Bankruptcy Solutions, LLC, as administrative advisor. As reported in the Troubled Company Reporter on Oct. 11, 2013, Kathryn Mailloux attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will, among other things, provide these services: a. assisting with, among other things, solicitation, balloting and tabulation and calculation of votes, as well as preparing any appropriate reports, as required in furtherance of confirmation of plan(s) of reorganization; b. generating an official ballot certification and testifying, if necessary, in support of the ballot tabulations results; and c. gathering data in conjunction with the preparation, and assisting with the preparation of the Debtors' schedules of assets and liabilities and statement of financial affairs. Epiq will receive a $15,000 retainer that maybe held by the firm as security for the company's payment obligations under the agreement. About Devonshire PGA Holdings Operators of assisted living facilities, led by Devonshire PGA Holdings LLC, sought Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware on Sept. 19, 2013. Chatsworth PGA Properties (Bankr. D. Del. Case No. 13-12457) has estimated liabilities of between $100 million and $500 million, and assets of up to $10 million. Chatsworth PGA Properties provides assisted living services for the elderly. It also offers nursing and dementia care. Devonshire PGA Holdings LLC (Case No. 13-12460), the owner of an assisted-living facility in Florida, and based in Palm Beach Gardens, estimated under $50,000 in assets and up to $50 million in debts. Another entity, Devonshire at PGA National LLC, estimated more than $100 million in both assets and debt. The Debtors are represented by M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, as counsel. Epiq Bankruptcy Solutions, LLC, serves as claims agent, and as administrative advisor for the Debtors. Alvarez & Marsal Healthcare Industry Group, LLC, serves as restructuring advisors, and Alvarez's Paul Rundell serves as Chief Restructuring Officer. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. DEVONSHIRE PGA: Files Amended Schedules of Assets & Liabilities --------------------------------------------------------------- Devonshire PGA Holdings, LLC, filed with the Bankruptcy Court amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $4,984 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $81,338 ----------- ----------- TOTAL $4,984 $81,338 In its original schedules, the Debtor disclosed $4,984 in assets and $3,171,158 in liabilities. Copies of the schedules are available for free at: http://bankrupt.com/misc/DEVONSHIRE_PGA_sal.pdf http://bankrupt.com/misc/DEVONSHIRE_PGA_sal_amended.pdf About Devonshire PGA Holdings Operators of assisted living facilities, led by Devonshire PGA Holdings LLC, sought Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware on Sept. 19, 2013. Chatsworth PGA Properties (Bankr. D. Del. Case No. 13-12457) has estimated liabilities of between $100 million and $500 million, and assets of up to $10 million. Chatsworth PGA Properties provides assisted living services for the elderly. It also offers nursing and dementia care. Devonshire PGA Holdings LLC (Case No. 13-12460), the owner of an assisted-living facility in Florida, and based in Palm Beach Gardens, estimated under $50,000 in assets and up to $50 million in debts. Another entity, Devonshire at PGA National LLC, estimated more than $100 million in both assets and debt. The Debtors are represented by M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, as counsel. Epiq Bankruptcy Solutions, LLC, serves as claims agent, and as administrative advisor for the Debtors. Alvarez & Marsal Healthcare Industry Group, LLC, serves as restructuring advisors, and Alvarez's Paul Rundell serves as Chief Restructuring Officer. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. DEVONSHIRE PGA: May Assume Restructuring Deal With Lender ELP West ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Devonshire PGA Holdings, LLC, et al., to assume the restructuring, lockup and plan support agreement, dated as of Sept. 17, 2013, entered among the Debtors and ELP West Palm, LLC as senior lender. As reported in the Troubled Company Reporter on Oct. 8, 2013, the Debtors' counsel, M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, stated, "The RSA is the lynchpin of the Debtors' consensual restructuring. The RSA is the result of negotiations between the Debtors and the only parties entitled to vote on the Joint Chapter 11 Plan of Reorganization of Devonshire PGA Holdings, LLC and its Subsidiaries, ELP, the senior creditor of the Operating Debtors and HJSI Devonshire II, LLC, the holder of the secured claim against Holdings and the sole member of Holdings as a result of a foreclosure sale on September 12, 2013. The RSA serves as the roadmap for the Debtors' efficient, expeditious, and successful emergence from chapter 11. The RSA has been made possible by the Debtors' and their primary stakeholders' collective realization that the company is in need of a comprehensive restructuring and a chapter 11 without a consensual deal risks erosion of the value of the estates." Pursuant to the Plan, which incorporates the terms of the RSA, the only classes entitled to vote thereon are ELP and HJSI-II. All of each Debtors' other valid creditors will be paid in full. According to Mr. Cleary, both the Debtors and their secured lenders feared that a free-fall into bankruptcy would disrupt the expectations of the Debtors' residents and hamper the prospects for a successful reorganization. Instead, the Parties negotiated the RSA because it maximizes the opportunity to capture the value of the Debtors' business with minimal disruption to the Debtors' residents and creditors, Mr. Cleary tells the Court. The collective goal of the Parties is that the Debtors can effectuate a financial restructuring with virtually no impact on day-to-day operations. A full-text copy of the Agreement is available for free at: http://bankrupt.com/misc/DEVONSHIRErsa0917.pdf About Devonshire PGA Holdings Operators of assisted living facilities, led by Devonshire PGA Holdings LLC, sought Chapter 11 bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware on Sept. 19, 2013. Chatsworth PGA Properties (Bankr. D. Del. Case No. 13-12457) has estimated liabilities of between $100 million and $500 million, and assets of up to $10 million. Chatsworth PGA Properties provides assisted living services for the elderly. It also offers nursing and dementia care. Devonshire PGA Holdings LLC (Case No. 13-12460), the owner of an assisted-living facility in Florida, and based in Palm Beach Gardens, estimated under $50,000 in assets and up to $50 million in debts. Another entity, Devonshire at PGA National LLC, estimated more than $100 million in both assets and debt. The Debtors are represented by M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, as counsel. Epiq Bankruptcy Solutions, LLC, serves as claims agent, and as administrative advisor for the Debtors. Alvarez & Marsal Healthcare Industry Group, LLC, serves as restructuring advisors, and Alvarez's Paul Rundell serves as Chief Restructuring Officer. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. EASTMAN KODAK: Posts Adjusted Loss after Bankruptcy Exit -------------------------------------------------------- Reuters reported that Eastman Kodak Co, the once mighty photography pioneer that emerged from bankruptcy protection in September, reported a quarterly loss of $155 million after stripping off reorganization items and discontinued operations. According to the report, Kodak said it adopted fresh-start accounting and provided separate figures for the month, which was a loss of $18 million. The company, which invented the digital camera, reported revenue of $563 million and a profit of $1.99 billion for the third quarter, the report said. Kodak said it had $839 million in cash and debt of $679 million as of Sept. 30, the report added. The company is focusing on commercial products such as high-speed digital printing technology and printing on flexible packaging for consumer goods, the report noted. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak had 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. EDISON MISSION: NRG Acquisition Expected to Close in 1st Qtr. 2014 ------------------------------------------------------------------ NRG Energy, Inc. on Nov. 12 disclosed that on October 18, 2013, the Company entered into an agreement with Edison Mission Energy, certain of its owners and other stakeholders to acquire substantially all of EME's assets for $2,635 million, including $1,063 million of cash on hand. Upon closing, this transaction would add approximately 8,000 MW of generation assets, including 1,600 MW of long-term, fully contracted assets eligible for future drop down to NRG Yield. The transaction is subject to various approvals, including the approval of the United States Bankruptcy Court for the Northern District of Illinois. Assuming all conditions are met, the transaction is expected to close in the first quarter of 2014. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors other than Camino Energy Company are represented by David R. Seligman, Esq., at Kirkland & Ellis LLP; and James H.M. Sprayragen, Esq., at Kirkland & Ellis LLP. Counsel to Debtor Camino Energy Company is David A. Agay, Esq., at McDonald Hopkins LLC. Perella Weinberg Partners is acting as the Debtors' financial advisor and McKinsey & Company Recovery and Transformation Services is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at Perkins Coie LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. E.W. SCRIPPS: Moody's Assigns Ba2 CFR & Rates First Lien Debt Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 Corporate Family Rating (CFR) and a Ba2-PD Probability of Default Rating (PDR) to The E.W. Scripps Company. Moody's also assigned Ba2 to the company's proposed 1st lien credit facilities consisting of a $75 million senior secured revolver and a $200 million senior secured term loan. Most of the proceeds from the new facility are expected to fund the refinancing of $184.2 million of existing debt and transaction related fees. An SGL-1 Speculative Grade Liquidity (SGL) Rating was also assigned and the rating outlook is stable. Assignments: Issuer: The E.W. Scripps Company Corporate Family Rating: Assigned Ba2 Probability of Default Rating: Assigned Ba2-PD NEW $75 million 1st Lien Senior Secured Revolver: Assigned Ba2, LGD3 -- 40% NEW $200 million 1st Lien Senior Secured Term Loan: Assigned Ba2, LGD3 -- 40% Speculative Grade Liquidity Rating: SGL -- 1 Outlook Actions: Issuer: The E.W. Scripps Company Outlook is Stable Ratings Rationale: The Ba2 Corporate Family Rating reflects E.W. Scripps' moderately high debt-to-EBITDA of 3.2x (two year average including Moody's standard adjustments, 1.2x net debt-to-EBITDA) and a minimum of low double digit percentage free cash flow-to-debt ratios pro forma for the proposed refinancing. Good revenue growth for television operations and improving segment EBITDA margins support debt ratings and offset declines in ad revenues for newspaper operations with segment EBITDA margins below its publishing peers. Television operations account for more than 50% of revenues and more than 80% of segment EBITDA, over two consecutive years, with above average annual volatility due to significant political advertising demand in election years. Although most of the company's television stations rank #3 or lower in their markets with a concentration of ABC affiliations, debt ratings are supported by their geographic diversification across 13 locations, primarily in the 40 largest U.S. markets. In addition, the company's local news programs capture leading ratings with eight markets being recently ranked #1 or #2 for news. Newspaper operations consist of community publications in 13 mid-sized markets, and, similar to its peers, newspaper revenues have suffered from secular declines in print advertising demand contributing to segment EBITDA margins of less than 7% and limiting free cash flow contributions. Moody's believes the company will need to focus on further cost reductions to compensate for expected declines in print advertising demand which will be challenging given management's strategy to invest in the development of digital products (certain unallocated expenses related to online and mobile initiatives are currently segregated to shared services). Risks related to the potential for newspaper operations to suffer extended periods of declining EBITDA and uncertain free cash flow generation are partially mitigated by the company's history of divesting or shutting down underperforming newspapers. The company is controlled by family members of E.W. Scripps and the ratings are supported by management's adherence to good financial policies including moderate leverage and strong liquidity. Unrestricted cash balances exceed $200 million and consolidated free cash flow generation exceeds 10% of debt balances. In addition to acceptable leverage, Moody's believes strong liquidity is important to the rating to provide a cushion in the event of an acceleration in declining newspaper ad demand and to support the company's production of original non-scripted television programming as well as meaningful investments in digital strategies including the development of roughly 100 digital sales staff to be hired over the course of 2013. The stable outlook reflects Moody's expectation that core, non- political television advertising revenues will grow in the low single digit percentage range over the next 12 months supplemented by significant increases in political revenues in the second half of 2014. The outlook also incorporates low to mid single-digit percentage declines in newspaper revenues reflecting secular weakness in print ad demand. Moody's expects combined television and newspaper revenues to decrease by 9% to 11% in FY2013 followed by a rebound in 2014 due largely to election year demand for television political advertising. The outlook also reflects Moody's expectation that 2-year average debt-to-EBITDA leverage will increase by up to 0.3x turns at FYE2014 reflecting the rolling off of record level political revenues in the second half of 2012, which Moody's believes will not be matched in 2014. Despite the potential for additional share buybacks, Moody's expects E.W. Scripps to maintain strong liquidity over the next 12 months which provides flexibility to execute management's broadcasting and newspaper operating strategies, invest in television programming and digital products, and manage unforeseen capital needs. The outlook does not incorporate debt financed acquisitions nor other leveraging events, consistent with management's track record of maintaining moderate gross leverage and strong liquidity. Ratings could be downgraded if operating weakness in one or more markets, debt funded acquisitions, or cash distributions lead to 2-year average debt-to-EBITDA ratios being sustained above 3.75x (including Moody's standard adjustments) or 2-year average free cash flow-to-debt ratios falling below the mid single digit percentage range. Ratings could also be downgraded if negative trends in newspaper operations lead Moody's to believe that segment EBITDA margins will fall below 3% with an adverse impact on segment free cash flow. Failure to maintain at least good liquidity to absorb a cyclical downturn in advertising demand could also result in a downgrade. The company's newspaper exposure and concentration of ABC affiliated stations constrain ratings; however, ratings could be upgraded if Moody's is assured that financial policies will remain prudent to support continued investments in programming and digital products including sustaining 2-year average debt-to-EBITDA ratios comfortably below 3.0x (including Moody's standard adjustments) and minimum 2-year average free cash flow-to-debt ratios in the mid double digit percentage range. Moody's would also need to be assured that newspapers operations will be stable with expectations for consistent segment EBITDA generation and positive segment free cash flow. Headquartered in Cincinnati, OH and founded in 1878, The E.W. Scripps Company owns broadcasting (83% of segment EBITDA for LTM September 2013) and newspaper (17% of segment EBITDA) operations consisting of 19 television stations (10 ABC affiliates, 3 NBC, one independent, and 5 Azteca) covering 13% of U.S. households and 13 daily community newspapers. Operations also include the Scripps Howard News Service in Washington, D.C. and United Media which provides the syndication of select news features and comics. The company is publicly traded with the Scripps family controlling effectively all voting rights and 44% economic interest with remaining shares being widely held. Revenues totaled $856 million for the 12 months ended September 30, 2013. EDISON MISSION: Chevron Appeals Second Loss on Kern River Venture ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Chevron Corp. must achieve victories in federal district court to keep alive hope of buying out the 50 percent ownership of two co-generation plants held by subsidiaries of bankrupt independent power producer Edison Mission Energy. According to the report, through subsidiaries, Chevron and EME each hold 50 percent joint venture interests in plants in the Kern River oil field near Bakersfield, California, producing electricity and steam Chevron uses to increase oil output from the wells. On Nov. 12, Chevron filed a second appeal from decisions made by the bankruptcy judge in Chicago in favor of EME. Last year, EME rejected Chevron's offer to buy out EME's interest in the two plants and four others for $82.5 million. Chevron argued that EME's bankruptcy filing in December was an event of default entitling it to purchase EME's interest in the two plants for half of book value, about $42.5 million. Chevron's first loss occurred in January when the bankruptcy judge found no reason to modify the so-called automatic stay to permit termination of EME interests in the projects. Chevron's appeal is outstanding before a U.S. district judge. EME then turned to the process known as assumption of an executory contract. The procedure culminated on Nov. 6 when the bankruptcy judge signed an order giving EME permission to perform and be bound by the unfinished joint venture as though there were no bankruptcy. On Nov. 12, Chevron appealed the Nov. 6 order. Along the way, U.S. Bankruptcy Judge Jacqueline P. Cox wrote an opinion in September rejecting Chevron's arguments and allowing EME to continue the contracts. In her opinion, she said they are profitable and have thrown off millions of income for the joint venture partners. Chevron's new appeal may raise the sometimes tricky question of whether a bankrupt can assume a partnership agreement, Mr. Rochelle said. EME's $1.2 billion in 7 percent senior unsecured notes maturing in 2017 traded at 12:38 p.m. on Nov. 12 for 75 cents on the dollar, up 43 percent from immediately before bankruptcy, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors other than Camino Energy Company are represented by David R. Seligman, Esq., at Kirkland & Ellis LLP; and James H.M. Sprayragen, Esq., at Kirkland & Ellis LLP. Counsel to Debtor Camino Energy Company is David A. Agay, Esq., at McDonald Hopkins LLC. Perella Weinberg Partners is acting as the Debtors' financial advisor and McKinsey & Company Recovery and Transformation Services is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at Perkins Coie LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. EARL SIMMONS: Rapper DMX's Bankruptcy Dismissed for Third Time -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that rapper Earl Simmons, known on stage as DMX or Dark Man X, had his third bankruptcy dismissed on Nov. 12, just like the two that preceded. According to the report, Simmons filed for Chapter 11 protection in July, owing more than $1.3 million in child support. The U.S. Trustee implored U.S. Bankruptcy Judge Robert Drain to dismiss the new reorganization attempt, reciting how Simmons didn't show up at his required meeting of creditors, didn't have proof of insurance, didn't turn over tax returns, and made inconsistent representations about his income and assets. Judge Drain, in White Plains, New York, said Simmons failed "to comply with numerous basic requirements" in the new bankruptcy and also in his prior cases. The judge barred Simmons from filing for bankruptcy for 18 months. Judge Drain said Simmons didn't object to dismissal. Simmons's official lists of assets and debt showed property with a value of $1.4 million and liabilities totaling $2.3 million. He listed a home in Mt. Kisco, New York, with a $434,000 mortgage. Official lists filed later show no owned real estate. About DMX DMX, whose real name is Earl Simmons, is known for the late '90s hit "Party Up (Up in Here)" and has also appeared in such movies as "Romeo Must Die," the report noted. He filed for bankruptcy on July 29, 2013 (Bankr. S.D.N.Y. Case No. 13-23254) to address debts including more than $1.2 million in child-support obligations. Mr. Simmons had been in bankruptcy twice before. In the latest case, Simmons's official lists of assets and debt show property with a value of $1.4 million and liabilities totaling $2.3 million. At the outset, he listed a home in Mt. Kisco, New York, with a $434,000 mortgage. The official lists filed later show no owned real estate. EIG INVESTORS: Moody's Revises First Lien Debt Rating to 'B2' ------------------------------------------------------------- Moody's Investors Service affirmed EIG Investors Corp.'s B2 corporate family rating (CFR) and revised its Probability of Default rating to B3-PD, from B2-PD, and the rating for its first lien credit facilities to B2, from B1. The downward rating adjustments reflect revised changes to EIG's pro forma capital structure. EIG plans to repay $315 million of second lien term loans using the net proceeds from a new $150 million add-on first lien term loan and a portion of the proceeds from the initial public offering (IPO) of common stock by its parent, the Endurance International Group, Inc. Moody's maintained EIG's stable ratings outlook and its SGL-3 speculative grade liquidity rating. The Caa1 rating for the second lien credit facility will be withdrawn upon full repayment of the loans. The reduction in debt under the proposed transactions is slightly higher than the amount the company previously indicated after the completion of the IPO. Moody's now expects EIG's leverage (total debt, including up to $126 million of deferred consideration for acquisitions, to 2013 estimated cash flow from operations plus interest expense, excluding certain non-recurring expenses) to reduce to 6.0x, compared to the 6.3x it had previously expected. As part of the amendment to its credit agreement, EIG plans to upsize its revolving credit facility by $40 million to $125 million and reduce the pricing on its first lien term loans. If successful, EIG's liquidity will be augmented by at least $8 million in annual interest expense savings and increased revolver capacity. Ratings Rationale: The affirmation of EIG's B2 CFR reflects Moody's expectations that EIG's leverage, while likely to trend down through EBITDA growth, will remain high near 5x by the end of 2014. The B2 CFR additionally reflects EIG's aggressive financial policies and the intensely competitive domain name and web hosting services industry. Although the industry has very good revenue growth prospects, it is characterized by low barriers to entry, modest pricing power for basic products, and low attach rates for add-on services that result in low average revenue per subscriber (ARPS). The B2 CFR is supported by EIG's enhanced scale, which has primarily resulted from acquisitions, and its leading market position in the U.S. web hosting market through its multiple brands. The rating is further supported by EIG's predictable revenues derived from a highly diversified customer base with low revenue attrition rates, and Moody's expectations that EIG should generate free cash flow of about 10% of total adjusted debt in 2014. In accordance with its Loss Given Default methodology, Moody's downgraded the rating for EIG's first lien credit facility to reflect the elimination of junior debt in the capital structure. The SGL-3 rating reflects Moody's expectations that EIG will maintain adequate liquidity over the next 12 to 15 months. Moody's could upgrade EIG's ratings if the company maintains good organic revenue growth and demonstrates commitment to balanced financial policies. EIG's ratings could be raised if Moody's believes that the company could sustain free cash flow in the high single digit percentages of total debt and leverage below 5x (total debt/Cash flow from operations plus interest expense, Moody's adjusted). Conversely, Moody's could downgrade EIG's ratings if free cash flow falls short of expectations due to operational challenges, increase in customer churn rates, weak organic subscriber growth, or challenges in business execution. Specifically, EIG's ratings could be downgraded the company is unlikely to maintain leverage (total debt/Cash flow from operations plus Interest Expense, Moody's adjusted) below 6.5x and free cash flow falls below 5% of total debt for a protracted period of time. Moody's has taken the following ratings actions: Issuer: EIG Investors Corp. Corporate Family Rating -- B2, Affirmed Probability of Default Rating -- Downgraded to B3-PD, from B2-PD $125 million (to be upsized from $85 million) senior secured revolving credit facility due 2019 -- Downgraded to B2, LGD3 (35%), from B1, LGD3 (40%) $1,034 million (to be upsized from $884 million) senior secured 1st lien term loan facility due 2019 -- Downgraded to B2, LGD3 (35%), from B1, LGD3 (40%) $315 million senior secured 2nd lien term loan facility due 2020 -- To be withdrawn, Caa1, LGD6 (91%). Speculative Grade Liquidity Rating -- SGL-3, Affirmed Outlook: Stable Headquartered in Burlington, MA, EIG is a leading provider of web hosting and other online services primarily to small and medium size businesses. Private equity firms Warburg Pincus and Goldman Sachs Capital Partners own majority interest in the Endurance International Group, Inc. EL CENTRO MOTORS: Court Closes Chapter 11 Reorganization Case ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California entered a final decree closing the Chapter 11 case of El Centro Motors effective Oct. 7, 2013. As reported in the Troubled Company Reporter on Sept. 23, 2013, Martin J. Brill, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., on behalf of the Reorganized Debtor, explained that pursuant to the Plan, among other things: -- the CVB refinanced loan has closed, the New Value Investment has been made, and the Nesselhauf Settlement Payment has been made; -- the Reorganized Debtor has received Plan Funds, and has made the initial distribution; and -- the Plan has taken effect and the Reorganized Debtor has resolved any outstanding claim disputes. As reported in the TCR, Judge Peter Bowie confirmed on June 19, 2013, the Second Amended Reorganization Plan of the Debtor after finding that the Plan satisfied the confirmation requirements under Section 1129 of the Bankruptcy Code. The Modified Plan disclosed that on May 3, 2013, the Debtor, Dealer Computer Services, Inc., and Community Valley Bank, among other parties, conducted a mediation of their disputes related to the Debtor's Plan. The mediation resulted in a settlement of disputes, which results in modifications to the treatment of Class 4 and 5 claims under the Plan. A full-text copy of the Modified Second Amended Plan dated May 30, 2013, is available for free at: http://bankrupt.com/misc/ELCENTROMOTORS_2ndAmdPlanFeb28.PDF Martin J. Brill, Esq., and Krikor J. Meshfejian, Esq., at LEVENE, NEALE, BENDER, YOO & BRILL L.L.P., in Los Angeles, California, represent the Debtor. About El Centro Motors El Centro Motors, dba Mighty Auto Parts, operates a Ford-Lincoln automobile dealership in El Centro, California. It filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-03860) on March 21, 2012, estimating $10 million to $50 million in assets and debts. Chief Judge Peter W. Bowie presides over the case. The prior owner of the dealership operated the business since 1932. The business is presently owned by Dennis Nesselhauf and Robert Valdes. The Debtor claims that its assets, which include the property constituting the dealership in El Centro, and new and used vehicles, have a value of $14 million. The Debtor owes Ford Motor Credit Company $4.3 million on a term-loan secured by a first priority deed of trust against the El Centro property, 380,000 on a revolving credit line, and $6 million on a flooring line of credit used to purchase vehicle inventory. The Debtor also owes $1.03 million to Community Valley Bank, which loan is secured by a second priority deed of trust against the property. In addition to $3.95 million arbitration award owed to Dealer Computer Systems, Inc., the Debtor owes $3 million in unsecured debt. According to a court filing, the dealership generally operated at a profit, until it suffered the same economic setbacks suffered by dealerships across the country. In 2007, the Debtor suffered an $806,000 loss; in 2008, it had a $4.5 million loss, and in 2009, it suffered a $957,000 loss. Dealer Computer Services, which provided the dealer management system, obtained in November 2001, an arbitration award in the amount of $3.95 million, following a breach of contract lawsuit it filed against the Debtor. DCS has commenced collection efforts attempting to levy the Debtor's bank accounts and place liens on its assets. The Debtor filed for bankruptcy to preserve and maximize the Debtor's estate for the benefit of creditors, to provide the Debtor a reprieve from highly disruptive and financially detrimental collection efforts, and to provide the Debtor an opportunity to reorganize its financial affairs in as efficient a manner as possible. The Debtor disclosed at least $8,332,571 in total assets and $19,624,057 liabilities as of the Chapter 11 filing. EASTMAN KODAK: September Net Loss at $18 Million ------------------------------------------------ Eastman Kodak Company on Nov. 12 reported net income for the third quarter of $1.99 billion (combining net income for the period July 1, 2013, through Aug. 31, 2013, of the "predecessor" company of $2.01 billion, and net loss for the period Sept. 1, 2013, through Sept. 30, 2013, of the "successor" company of $18 million). Excluding reorganization items and discontinued operations, the net loss for the third quarter of 2013 was $155 million. Third-quarter Operational EBITDA was $30 million, excluding the recognition of $27 million in non-cash inventory and deferred revenue adjustments from fresh-start accounting. Effective September 1, 2013, Kodak adopted fresh-start accounting upon its emergence from bankruptcy. As of Sept. 30, the company's financial position reflected approximately $839 million of cash and cash equivalents and debt of $679 million (a reduction of $1.44 billion from Dec. 31, 2012). During the quarter, selling, general & administrative expenses declined to $93 million from $148 million in the prior-year quarter. "We are pleased with our progress on earnings this quarter, with Operational EBITDA on track with expectations. Further, our customers are telling us they are impressed with our technologies, and increasingly ready to adopt and apply our solutions to help grow their businesses," said Kodak Chief Executive Officer Antonio M. Perez. "Our strengths in imaging for business markets, including packaging, functional printing, graphic communications and professional services, position us well to move forward on our strategy with increasing momentum." Kodak Reporting Structure Kodak offers high-quality, cost-effective products and services to the commercial imaging industry. The company's portfolio of products and services meets two distinct needs for its customers: transforming large printing markets with digital offset, digital print and hybrid solutions; and commercializing new solutions for high-growth markets that build on the company's developed technologies and proprietary intellectual property. Kodak operates the Commercial Imaging portfolio as two business segments: Graphics, Entertainment & Commercial Films (GECF) and Digital Printing & Enterprise (DP&E). Graphics, Entertainment & Commercial Films (GECF): The GECF segment consists of the Graphics and Entertainment Imaging & Commercial Films groups, as well as Kodak's intellectual property and brand licensing activities. 3Q13 vs. 3Q12 discussion - The decrease in the GECF segment net sales for the third quarter was primarily due to lower demand for digital plates within Graphics, and lower demand for motion picture film within Entertainment Imaging & Commercial Films. Also contributing to the decline was unfavorable price/mix within Graphics due to industry pricing pressures. Partially offsetting these declines was favorable product price/mix within Entertainment Imaging & Commercial Films due to pricing actions impacting the current-year quarter. The change in the GECF segment gross profit for the third quarter was primarily driven by the Entertainment Imaging & Commercial Films pricing actions, and strong manufacturing productivity and other cost improvements in Graphics. Partially offsetting these improvements was unfavorable product price/mix within Graphics due to industry pricing pressures. Inventory revaluation due to fresh- start accounting had a $12 million negative impact on segment gross profit in the quarter. In the Graphics business, a large number of customers continued to convert to KODAK SONORA Process Free Plates, which provide cost savings and production efficiencies. SONORA Plates also enable printers to improve their sustainability profile by eliminating the use of processing chemistry. Digital Printing & Enterprise (DP&E): The DP&E segment consists of four product/service groups, Digital Printing Solutions, Packaging and Functional Printing, Enterprise Services and Solutions, and Consumer Inkjet Systems. 3Q13 vs. 3Q12 discussion - The decrease in net sales for the DP&E segment for the third quarter was primarily attributable to volume declines within Consumer Inkjet Systems, driven by the discontinuance of printer sales, and lower sales of ink to the existing installed base of printers. Partially offsetting these declines were volume improvements within Digital Printing driven by a larger number of placements of commercial inkjet components. In the DP&E segment, customers around the world continued to invest in KODAK PROSPER Solutions, including the U.K.'s largest order to date for PROSPER S30 Imprinting Systems. The increase in the DP&E segment gross profit for the third quarter was primarily due to favorable price/mix within Consumer Inkjet Systems due to a greater proportion of consumer ink sales, and within Digital Printing due to favorable mix due to higher component placements in the current-year period. Partially offsetting these improvements were increased cost of goods sold within Consumer Inkjet Systems due to the revaluation of inventory related to fresh-start accounting. Inventory revaluation due to fresh-start accounting had a $14 million negative impact on segment gross profit in the quarter. 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 had 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. EMERITO ESTRADA: May Employ Albert Tamarez as Accountant -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico authorized Emerito Estrada Rivera Isuzu De P.R., Inc. to employ Albert Tamarez Vasquez, CPA as its accountant. The Court sided with the position of Guy G. Gebhardt, the Acting U.S. Trustee for Region 21, regarding the Debtor's application for post facto approval of the employment. The U.S. Trustee had argued the Debtor failed to show the existence of extraordinary circumstances which would warrant the retroactive approval to June 14, 2013. The Court said the effective date will be the date of filing the application. As reported in the Troubled Company Reporter on Oct. 14, 2013, the firm will be paid for its services based on these terms: a) $150 per hour of service rendered by Albert Tamarez Vasquez, CPA; b) $100 per hour of services rendered by CPA supervisor; and c) $65 per hour of service rendered by staff accountant. About Emerito Estrada Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, serves as counsel. Albert Tamarez Vasquez, CPA serves as its accountant. The Debtor says its sole asset is a real property is worth $16.5 million. It has $8.68 million in liabilities, of which $8.1 million is secured. The Debtor disclosed $23,860,000 in assets and $16,285,186 in liabilities as of the Chapter 11 filing. EMPRESAS INTEREX: Agreement on Use of Cash Approved --------------------------------------------------- U.S. Bankruptcy Judge Mildred Caban Flores, in Puerto Rico, approved the "joint motion to inform agreement" as to the use of the cash collateral filed between the Debtor and PR Asset Portfolio 2013-1 International LLC. PRAPI earlier conveyed opposition to the use of its cash collateral. It said the Debtor should instead turn over cash collateral to PRAPI. PRAPI asserts the rent being collected by the Debtor on a monthly basis since the filing of the case constitute PRAPI's cash collateral. About Empresas Interex Inc. San Juan, Puerto Rico-based Empresas Interex Inc. is engaged in the development, construction, and lease of real estate. One of the Debtor's construction project is known as Ciudad Atlantis at Hato Bajo Ward, Arecibo, Puerto Rico. Empresas Interex filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 11-10475) on Dec. 7, 2011. Bankruptcy Judge Mildred Caban Flores presides over the case. The company disclosed $11,412,500 in assets and $9,335,561 in liabilities. The Debtor is represented by Charles A. Cuprill P.S.C. Law Offices. EXTENDED STAY: US Bank's Claims Tossed From $100M Guaranty Row -------------------------------------------------------------- Law360 reported that a New York state judge on Nov. 8 granted a motion from Light stone Holdings LLC and others to dismiss "newly minted" fraud allegations brought by U.S. Bank National Association in a long-running dispute over a $100 million guaranty connected with the purchase of formerly bankrupt Extended Stay Hotels LLC. According to the report, in February, a New York appeals court restored U.S. Bank's claims against Light stone over a guaranty the real estate company allegedly owes in connection with a $4.1 billion loan contract for its purchase of Extended Stay. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-13764) on June 15, 2009. Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. FAIRMONT GENERAL: Sills Cummis Approved as Committee's Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., obtained approval from the U.S. Bankruptcy Court for the Northern District of West Virginia to retain Sills Cummis & Gross P.C. as counsel, nunc pro tunc to Sept. 23, 2013. As reported in the Troubled Company Reporter on Oct. 9, 2013, Sills Cummis will be paid at these hourly rates: Andrew H. Sherman $573.75 Boris I. Mankovetskiy $487.90 Lucas F. Hammonds $335.75 Members $395-$775 Associates and of Counsel $275-$695 Paralegals $195-$295 According to the TCR report, Sills Cummis had advised the Committee that the hourly rates for other attorneys and paraprofessionals at the firm will be discounted by 15%. Sills Cummis will also be reimbursed for reasonable out-of-pocket expenses incurred. Payment of Sills Cummis' fees and expenses for its services as attorneys for the Committee will be capped at $75,000 per month, with payment of any allowed fees and expenses in excess of $75,000 per month deferred until confirmation of a plan, conversion or dismissal of these cases. About Fairmont General Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10 million and $50 million in both assets and debts. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. The Committee's local counsel can be reached at: Janet Smith Holbrook, Esq. HUDDLESTON BOLEN LLP 611 Third Avenue P.O. Box 2185 Huntington, WV 25722 Tel: (304)-691-8330 E-mail: jholbrook@huddlestonbolen.com FLINTKOTE COMPANY: Wants More Exclusivity as Plan Order on Appeal ----------------------------------------------------------------- The Flintkote Company and Flintkote Mines Limited filed a 26th motion for an order extending their exclusive periods in which to file a Chapter 11 plan and solicit votes thereon. The Debtors want the filing deadline extended by an additional five months through April 30, 2014, and the solicitation period through June 30, 2014. The Debtors, the Official Committee of Asbestos Personal Injury Claimants, and the legal representative of future asbestos claimants have proposed a plan for the Debtors. In December 2012, the bankruptcy court entered an order confirming the Plan. In January 2013, Imperial Tobacco Canada Limited and certain of its wholly owned subsidiaries, including Genstar Corporation, filed a notice of appeal from the confirmation order, and such appeal is currently pending before the District Court as Case No. 13-00227. The Plan has been accepted by all classes of creditors and claimants, including 95% of the holders of asbestos personal injury claims against the Debtors. The Debtors say that terminating exclusivity will not result in a "better" plan or speedier confirmation, but will only result in a potential ambiguity in the unlikely event that the confirmation order is not upheld on appeal as to whether the Debtors adequately preserved exclusivity throughout the appeal period -- which would not further the central goals of Chapter 11. About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. When Flintkote Company filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. The Debtors' Chapter 11 cases have been re-assigned to Judge Mary F. Walrath in line with the retirement of former Bankruptcy Judge Judith Fitzgerald. FRESH & EASY: Parent Tesco Received $213.8 Million -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when Fresh & Easy Neighborhood Market Inc. filed official lists of assets and debt at the end of last week, the supermarket owner handed creditors information to launch an investigation of the parent Tesco Plc. According to the report, in disclosing pre-bankruptcy payments to so-called insiders, Fresh & Easy listed $213.8 million going to Tesco in the last year before bankruptcy. The largest component was $188.7 million in principal and interest payments on loans. In addition, Tesco, the U.K.'s largest retailer, received $15.1 million in "other payments." The official schedules show that seven company officers received a total of about $6 million in wages and benefits in the year preceding bankruptcy. Although creditors may investigate, payments to owners, officers, and directors aren't necessarily recoverable, unless the payments came late and might be viewed as so-called preferences. Tesco has several defenses, such as the "ordinary course of business defense" that can be raised if payments on debt were made on time. The business goes up for auction on Nov. 19, with the first bid from Ron Burkle's Yucaipa Cos. A hearing to approve the sale will take place Nov. 21. If Yucaipa ends up as the buyer, a Tesco affiliate will lend Yucaipa $120 million and receive warrants to buy as much as 10 percent of the equity in the reorganized supermarket chain. Tesco also keeps 22.5 percent of the equity in the reorganized business. Yucaipa will continue to operate about 150 markets plus a production facility in Riverside, California. Fresh & Easy began bankruptcy at the end of September with 167 stores in the Western U.S. It also owned 61 non-operating locations and leased 36 non- operating stores. About Fresh & Easy Neighborhood Market Inc. Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy 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, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. FRIENDFINDER NETWORKS: Creditor Quy Dong Objects to Disclosures --------------------------------------------------------------- Creditor Quy Dong objects to the Amended Disclosure Statement filed by FriendFinder Networks Inc., et al., in support of the Debtors' Amended Joint Chapter 11 Plan of Reorganization dated Oct. 21, 2013. Dong is a former employee of Debtors Friendfinder Networks, Inc., and Various Inc. On May 28, 2013, Dong filed an action against Debtors alleging causes of action under California and federal employment law in Santa Clara County, California Superior Court, which action Debtors removed to the United States District Court, Northern District of California, on June 28, 2013. On Sept. 17, 2013, Debtors filed for bankruptcy, staying the Action. Dong, who holds a general unsecured claim (Class 5), objects to three sets of provisions in the Disclosure Statement: 1. Claims Estimation Procedures: "First, because Debtors seek to cap Claims through the estimation procedures, the procedures on their face do not comply with Bankruptcy Code Section 1129(a)(1), and therefore approval of the Disclosure Statement should be denied as to those procedures. Second, the Disclosure Statement lacks adequate information regarding the procedures." 2. Release, Discharge, Injunction, and Exculpation. "Debtors provide that on the Effective Date, all Claims that arose before the Effective Date and the prosecution thereof against Debtors are released, discharged, enjoined and Debtors are exculpated, in exchange for the consideration provided under the Plan. While the injunction contains an exception for the right of a Holder of a Disputed Claim to establish its Claim in response to an objection Filed by the Debtors, the release, discharge and exculpation provisions do not contain similar exceptions. Moreover, the injunction exception is too narrow. All four provisions should contain an exception for Disputed Claims. Namely, any Disputed Claim that subsequently becomes an Allowed Claim should not be released, discharged, enjoined, and Debtors discharged, enjoined, and Debtors should not be exculpated." 3. Retention of Jurisdiction. "Debtors should clarify that the Bankruptcy Court does not have exclusive jurisdiction to determine and liquidate Claims insofar as a Holder of a Disputed Claim against Debtors obtains relief from the automatic stay to prosecute such claim in another forum or to the extent the Bankruptcy Court lacks the jurisdiction authority to determine such claim and the other party has not consented to such jurisdiction (see Stern v. Marshall, 131 S. Ct. 2594 (U.S. 2011)). The Plan On Oct. 21, 2013, the Debtors filed an Amended Joint Chapter 11 Plan of Reorganization and Amended Disclosure Statement. On Nov. 1, 2013, the Debtors filed a Second Amended Joint Chapter 11 Plan of Reorganization and an Amended Disclosure Statement. A copy of the Second Amended Joint Chapter 11 Plan is available at http://bankrupt.com/misc/friendfinder.doc257.pdf A copy of the Amended Disclosure Statement with respect to the Second Amended Joint Chapter 11 Plan is available at: http://bankrupt.com/misc/friendfinder.doc258.pdf About FriendFinder Networks FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. On Sept. 21, 2013, the Debtors filed a plan of reorganization containing details on a reorganization worked out with about 80 percent of first and second-lien lenders before the Sept. 17 Chapter 11 filing. Under the Plan, holders of the $234.3 million in 14 percent first-lien notes will receive accrued interest plus an equal amount in new 14 percent first-lien notes to mature in five years. Excess cash will be used in part to pay down principal on the notes before maturity. Holders of $330.8 million in two issues of second-lien notes are to receive all the new equity. U.S. Bankruptcy Judge Christopher Sontchi approved the company's disclosure statement, a description of the reorganization plan, at a hearing on Nov. 5 in Wilmington, Delaware. FriendFinder will seek court approval of its reorganization plan to exit bankruptcy at a hearing scheduled for Dec. 16. Objections to the plan have to be filed by Dec. 9. FRIENDFINDER NETWORKS: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- FriendFinder Networks Inc. filed with the U.S. Bankruptcy Court for the District of Delaware Southern District of Indiana its schedules of assets and liabilities, disclosing: Assets Liabilities ------------ --------------- A. Real Property B. Personal Property $893,878.00 C. Property Claimed as Exempt D. Creditors Holding $565,124,665.18 Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured $29,775.29 Non-priority Claims UNKNOWN ------------ --------------- Total $893,878.00 $565,154,440.47 PLUS UNKNOWN A copy of the SAL is available at: http://bankrupt.com/misc/friendfinder.sal.doc186.pdf About FriendFinder Networks FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. On Sept. 21, 2013, the Debtors filed a plan of reorganization containing details on a reorganization worked out with about 80 percent of first and second-lien lenders before the Sept. 17 Chapter 11 filing. Under the Plan, holders of the $234.3 million in 14 percent first-lien notes will receive accrued interest plus an equal amount in new 14 percent first-lien notes to mature in five years. Excess cash will be used in part to pay down principal on the notes before maturity. Holders of $330.8 million in two issues of second-lien notes are to receive all the new equity. U.S. Bankruptcy Judge Christopher Sontchi approved the company's disclosure statement, a description of the reorganization plan, at a hearing on Nov. 5 in Wilmington, Delaware. FriendFinder will seek court approval of its reorganization plan to exit bankruptcy at a hearing scheduled for Dec. 16. Objections to the plan have to be filed by Dec. 9. FRIENDFINDER NETWORKS: PMGI Holdings Files Schedules of Assets --------------------------------------------------------------- PMGI Holdings Inc. filed with the U.S. Bankruptcy Court for the District of Delaware Southern District of Indiana its schedules of assets and liabilities, disclosing: Assets Liabilities ------------ ----------- A. Real Property B. Personal Property $426,039.00 C. Property Claimed as Exempt D. Creditors Holding $0.00 Secured Claims UNKNOWN E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims ------------ ----------- Total $426,039.00 $0.00 UNKNOWN A copy of the schedules is available at: http://bankrupt.com/misc/friendfinder.sal.doc203.pdf About FriendFinder Networks FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. On Sept. 21, 2013, the Debtors filed a plan of reorganization containing details on a reorganization worked out with about 80 percent of first and second-lien lenders before the Sept. 17 Chapter 11 filing. Under the Plan, holders of the $234.3 million in 14 percent first-lien notes will receive accrued interest plus an equal amount in new 14 percent first-lien notes to mature in five years. Excess cash will be used in part to pay down principal on the notes before maturity. Holders of $330.8 million in two issues of second-lien notes are to receive all the new equity. U.S. Bankruptcy Judge Christopher Sontchi approved the company's disclosure statement, a description of the reorganization plan, at a hearing on Nov. 5 in Wilmington, Delaware. FriendFinder will seek court approval of its reorganization plan to exit bankruptcy at a hearing scheduled for Dec. 16. Objections to the plan have to be filed by Dec. 9. FRIENDFINDER NETWORKS: Files T-3 for Qualification of New Notes --------------------------------------------------------------- FriendFinder Networks Inc., and Interactive Network, Inc., filed with the U.S. Securities and Exchange Commission on Nov. 8, 2013, an initial application on Form T-3 for qualification of the Applicants' 14.0% Senior Secured Notes due 2018 in the aggregate principal amount of $234,286,908.16, plus any additional principal issuable as interest payable on the existing 14.0% Senior Secured Notes due 2013. The approximate date of the proposed public offering will be as soon as practicable after confirmation of the Plan of Reorganization. As disclosed in the Form T-3 filing, as of the date of the Application, the Applicants have outstanding three series of notes: 14.0% Senior Secured Notes due 2013, 14.0% Cash Pay Secured Notes due 2013 and 11.5% Convertible Non-Cash Pay Secured Notes due 2014, all of which were issued by the Applicants and guaranteed by all of the Applicants' United States subsidiaries. FriendFinder Networks Inc. (the "Company") has filed with the Bankruptcy Court a proposed plan of reorganization that would result in the exchange of the Existing Notes for new common stock and a new series of 14.0% Senior Secured Notes due to be issued by the reorganized Company and INI to holders of allowed claims in the Chapter 11 cases arising from or relating to the Existing Notes. As the New Notes are proposed to be issued by the Applicants and new common stock are proposed to be offered by the Company under the Plan of Reorganization entirely in exchange for the Note Claim Holders' Allowed Note Claims, the issuance of the New Notes is exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 1145(a) of Chapter 11 of Title 11 of the United States Bankruptcy Code. No Note Claim Holder of the outstanding securities has made or will be requested to make any cash payment to the Company for the exchange. A copy of the Form T-3 is available at http://is.gd/HJC6h2 As reported in the TCR on Nov. 7, 2013, FriendFinder Networks Inc. won court approval to seek creditors' votes on its restructuring plan, which would turn the company over to noteholders. U.S. Bankruptcy Judge Christopher Sontchi approved the company's disclosure statement, a description of the reorganization plan, at a hearing on Nov. 5 in Wilmington, Delaware. FriendFinder will seek court approval of its reorganization plan to exit bankruptcy at a hearing scheduled for Dec. 16. Objections to the plan have to be filed by Dec. 9. The restructuring would cut about $300 million in debt and reduce annual interest expenses by about $50 million, according to a statement. The reorganized company's estimated enterprise value was between $257.8 million and $285.4 million as of Aug. 31, according to the disclosure statement. The reorganization plan is supported by about 78 percent of the holders of 11.5 percent non-cash paying second-lien notes and about 80 percent of the holders of 14 percent senior secured first-lien notes, court papers show. The second-lien noteholders, owed about $330.8 million, would exchange debt for all of reorganized FriendFinder's equity. The first-lien noteholders, owed about $234.3 million, would get cash and new notes. Current shareholders would receive nothing, according to court documents. About FriendFinder Networks FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. On Sept. 21, 2013, the Debtors filed a plan of reorganization containing details on a reorganization worked out with about 80 percent of first and second-lien lenders before the Sept. 17 Chapter 11 filing. Under the Plan, holders of the $234.3 million in 14 percent first-lien notes will receive accrued interest plus an equal amount in new 14 percent first-lien notes to mature in five years. Excess cash will be used in part to pay down principal on the notes before maturity. Holders of $330.8 million in two issues of second-lien notes are to receive all the new equity. FURNITURE BRANDS: Direct Fee Review Okayed to Examine Legal Bills ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Furniture Brands International, Inc., et al., to appoint Direct Fee Review LLC as fee examiner. Direct Fee Review will, among other things: 1. review interim fee application requests and final fee applications filed by each applicants in the Chapter 11 cases; 2. during the course of application, consult, as it deems appropriate, with each applicant concerning the application; and 3. serve a final report on counsel for the Debtors, counsel for the Committee, the office of the U.S. Trustee and each applicant whose fees and expenses are addressed in the final report. 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. GASCO ENERGY: Posts Net Loss of $3.1 Mil. in Third Quarter ---------------------------------------------------------- Gasco Energy, Inc. on Nov. 12 reported financial and operating results for the third quarter ended September 30, 2013. Q3-13 Financial Results Oil and gas sales for the third quarter ended Sept. 30, 2013 were $2.5 million, as compared to $1.8 million for the same period in 2012. Natural gas sales comprised 79% of total oil and gas sales for Q3-13. The 38% year-over-year increase in oil and gas sales is primarily attributed to a 57% increase in the average price received for the Company's natural gas volumes, offset in part by an 11% decrease in equivalent production volumes. Gasco's average realized natural gas price was $4.40 per thousand cubic feet of natural gas (Mcf) for Q3-13, as compared to $2.81 per Mcf in the prior-year period. Gasco currently does not hedge its natural gas volumes. The average realized oil price for Q3-13 was $89.57 per barrel, as compared to $83.14 per barrel for the prior-year period. Gasco currently does not hedge its crude oil volumes. For Q3-13, Gasco reported a net loss of $3.1 million, or $0.02 per basic and diluted share, as compared to a net loss of $3.2 million, or $0.02 per basic and diluted share in Q3-12. As of September 30, 2013, Gasco's total assets were $51.3 million, its stockholders' equity was $10.0 million, and cash and cash equivalents were $2.0 million. Net cash provided by operating activities during Q3-13 was $96,000, as compared to net cash provided by operating activities of $1.2 million in the comparable 2012 reporting period. Net cash used in investing activities during Q3-13 was $118,000, as compared to $768,000 in the prior-year period. Q3-13 Production Estimated cumulative net production for Q3-13 was 483.4 million cubic feet of natural gas equivalent (MMcfe), as compared to 542.1 MMcfe in the prior-year period. Included in the Q3-13 equivalent calculation are production volumes of 5,882 barrels of liquid hydrocarbons, as compared to the prior-year period production volumes of 4,304 barrels of liquid hydrocarbons. Net production changes are attributed to normal production declines in existing wells, which were partially offset by new producing wells and recompletions and workovers of existing wells. Nine-Month 2013 Period Note Regarding Uinta Basin Joint Venture During Q1-12, Gasco conveyed a 50% interest in certain of its Uinta Basin properties to its joint venture partner concurrent with the March 22, 2012 closing of the transaction. Due to the late first quarter 2012 closing date of the 50% interest conveyance, operational and financial results for the nine-month period ended September 30, 2013 are generally comparable to the prior nine-month period. Oil and gas sales for the nine-month period of 2013 were $7.2 million, as compared to $6.6 million for the same period in 2012. The 10% increase in oil and gas sales during the nine-month period of 2013, as compared to the prior-year period, is primarily attributed to a 57% increase in prices received for natural gas volumes, offset in part by a 26% decline in equivalent production. The average prices received for the nine-month period ending September 30, 2013 were $4.13 per Mcf and $84.02 per barrel of oil, as compared to $2.63 per Mcf and $84.84 per barrel in the same period of 2012. For the nine-month period of 2013, Gasco reported a net loss of $7.8 million, or $0.05 per share, as compared to a net loss of $13.4 million, or $0.08 per share in the prior-year period. Included in the nine-month period of 2013 results are a non-cash gain of $0.8 million attributed to derivatives and $1.0 million non-cash loss related to an impairment of the carrying value of the Company's inventory. During June 2012, the Company settled its remaining commodity hedge contract, and the Company currently does not have any commodity hedges in place. Net cash provided by operating activities for the nine-month period of 2013 was $0.4 million as compared to net cash used in operating activities of $2.2 million for the same period in 2012. The Company invested approximately $1.3 million during the first nine months of 2013 in oil and gas activities. Net cash provided by investing activities during the nine-month period of 2012 included $19.2 million in cash proceeds from the sale of certain of the Company's Uinta Basin assets as part of the previously announced Uinta Basin joint venture. Outlook Due to the extended decline in natural gas prices in recent years resulting primarily from excess domestic production, Gasco has not been able to recover its exploration and development costs as anticipated. As such, there is substantial doubt regarding the Company's ability to generate sufficient cash flows from operations to fund its ongoing operations, and the Company currently anticipates that cash on hand, available cash under the credit facility described below and forecasted cash flows from operations will only be sufficient to fund cash requirements for working capital through February 2014. This expectation has been revised from Gasco's previous estimate included in the Form 10-Q for the quarter ended June 30, 2013 due to the completion of the October 2013 transaction discussed below, the implementation of cost savings measures and cash management strategies. This estimate is based on various assumptions, including those related to future natural gas and oil prices, production results and the effectiveness of the Company's cash management strategy discussed below, some or all of which may not prove to be correct and may result in the Company's inability to meet cash requirements prior to the end of February 2014. As a result of these factors, there is substantial doubt about the Company's ability to continue as a going concern. Restructuring Transactions Gasco has been seeking to restructure or refinance its debt or sell assets to improve the Company's liquidity position since mid- year 2012. During this period, Gasco operated without a credit facility, was delisted from the NYSE MKT LLC, and defaulted under Gasco's 5.5% Convertible Senior Notes due 2015. The Company and Stephens Inc., Gasco's financial advisor, conducted a process to evaluate various strategic alternatives. As previously announced, the restructuring agreements resulting from this process involved an investment in the Company by Markham LLC and Orogen Energy, Inc. On October 17, 2013, these investors acquired the $45,168,000 aggregate principal amount of Gasco's 2015 Notes and accrued interest thereon, all 182,065 outstanding Series C convertible preferred shares and common shares owned by the holders of the 2015 Notes. Then on October 18, 2013, the investors exchanged the 2015 Notes, accrued interest and Series C Stock for 393,550,372 shares of the Company's common stock and 50,000 shares of the newly-created Series D convertible preferred stock. As a result of the Restructuring Transactions, the new investors now have fully-diluted control of approximately 97.9% of the equity of the Company. In addition, the Company recorded a derivative instruments liability of $71,000 to cover the potential put of warrants of the Company to it. The new Series D Stock is convertible into 7,295,744,128 shares of common stock and is redeemable October 19, 2014 at the option of the holders for $100 per share plus accrued and unpaid dividends of 10% per annum. Because the Company does not currently have a sufficient number of authorized and unreserved common shares to permit the full conversion of the Series D Stock, Gasco's Board of Directors has approved and adopted an amendment to its charter to increase the number of common shares and has recommended to the stockholders that they approve the charter amendment by written consent. The written consent approving the charter amendment was subsequently executed by Markham and Orogen on October 23, 2013, but the charter amendment is not yet effective pending the completion of required SEC filings. In addition to the exchange of debt and securities for the new common and preferred shares, Markham and Orogen have established a 120-day, $5 million senior secured credit facility to fund the Company's working capital and capital expenditure requirements. For extending the credit facility, Gasco also issued to Markham and Orogen a total of 250,000 shares of Gasco common stock. Following the closing of the Restructuring Transactions, the size of Gasco's Board of Directors was set at three members effective immediately and Gasco accepted the resignations of Richard J. Burgess, Charles B. Crowell, Steven D. Furbush and John A. Schmit as directors. Richard S. Langdon remains a director and interim President and Chief Executive Officer of the Company. G. Wade Stubblefield was appointed to the Board of Directors of the Company upon the closing and the Company intends to add L. Edward Parker as a director upon compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended, and making required SEC filings. Teleconference Call Management will not host a third quarter 2013 financial and operating results conference call. About Gasco Energy Denver-based Gasco Energy, Inc. -- http://www.gascoenergy.com/-- is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California's San Joaquin Basin. Gasco's principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Gasco focuses its drilling efforts in the Riverbend Project located in the Uinta Basin of northeastern Utah, targeting the oil-bearing Green River Formation and the natural gas-prone Wasatch, Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations. In its auditors' report on the consolidated financial statements for the year ended Dec. 31, 2012, KPMG LLP, in Denver, Colorado, expressed substantial doubt about Gasco Energy's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. The Company reported a net loss of $22.2 million on $8.9 million of revenues in 2012, compared with a net loss of $7.3 million on $18.3 million of revenues in 2011. As of June 30, 2013, the Company had $53.16 million in total assets, $40.05 million in total liabilities and $13.10 million in total stockholders' equity. Bankruptcy Warning To continue as a going concern, the Company said it must generate sufficient operating cash flows, secure additional capital or otherwise pursue a strategic restructuring, refinancing or other transaction to provide it with additional liquidity. The Company's ability to do so will depend on numerous factors, some of which are beyond its control. For example, the urgency of the Company's liquidity situation may require it to pursue such a transaction at an inopportune time when the Company has little or no negotiating leverage. "The Company has engaged Stephens, Inc., a financial advisor, to assist it in evaluating potential strategic alternatives, including a sale of the Company or all of its assets. It is possible these strategic alternatives will require the Company to make a pre-packaged, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code. If the Company is unable to generate sufficient operating cash flows, secure additional capital or otherwise restructure or refinance the business before September 30, 2013, it will not have adequate liquidity to fund its operations and meet its obligations (including its debt payment obligations), the Company will not be able to continue as a going concern, and could potentially be forced to seek relief through a filing under Chapter 11 of the U.S. Bankruptcy Code. In addition, the Company is in default on its outstanding 2015 Notes under the Indenture, which could result in the filing of an involuntary petition for bankruptcy against the Company," the Company said in the quarterly report for the period ended June 30, 2013. GGW BRANDS: Lawyers Prepare to Sell Girls Gone Wild Brand --------------------------------------------------------- Katy Stech, writing for The Wall Street Journal, reported that 16 years after the company's founding by Joe Francis, a team of bankruptcy professionals put in charge of Girls Gone Wild's holding company by a federal judge have begun to look for buyers for the soft-core pornography business. The Los Angeles company, which made a name for itself by catching impaired co-eds on spring break, distributes its porn through pay-per-view channels, DVDs and the Internet. According to the report, the attorneys, under direction of the company's Chapter 11 trustee and former Federal Bureau of Investigation agent R. Todd Neilson, have already approached officials at adult film-giant Vivid Entertainment, though executive Bill Asher told The Journal's Bankruptcy Beat that he's not interested for now. Attorneys have said in court papers that they plan to market the brand to bidders who might eventually compete at a bankruptcy auction. Lawyers haven't put a price on the Girls Gone Wild franchise yet, the report related. Mr. Francis said earlier this year that the Girls Gone Wild brand is worth more than $80 million, though court papers show that its holding company posted a profit of a little more than $500,000 on $2.4 million in sales since its February bankruptcy filing. Girls Gone Wild, made famous in a humble era of low-budget, late- night infomercials in the late 1990s, has a loyal subscriber base, according to Mr. Francis, the report related. In an interview earlier this year, Mr. Francis said that free porn that competes with Girls Gone Wild is "crap" and puts viruses and tracking software on visitors' computers. The effort to sell the Girls Gone Wild brand has angered the founder, and he hasn't been shy in sharing his thoughts with the trustee and his attorneys, the report further related. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. GGW Marketing, LLC, GGW Brands' affiliate, filed a voluntary Chapter 11 petition on May 22, 2013, before the United States Bankruptcy Court Central District Of California (Los Angeles). The case is assigned Case No.: 13-23452. Martin R. Barash, Esq., and Matthew Heyn, Esq., at Klee, Tuchin, Bogdanoff and Stern, LLP, in Los Angeles, California, represent GGW Marketing. GLOBAL AVIATION: Lenders Providing a $52 Million Loan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Global Aviation Holdings Inc., which returned to bankruptcy court nine months after emerging from Chapter 11, will finance the new bankruptcy with a $52 million loan from existing first-lien lenders owed $39 million. According to the report, on Nov. 13 in bankruptcy court in Delaware there will be a hearing for interim approval of $36 million of the new loan, where pre-bankruptcy debt will be converted to a post-bankruptcy obligation. In total, Global has $165.2 million in secured debt. In addition to the first-lien obligation, second-lien creditors are owed $85 million. There is $41.2 million owing on a third lien. Second- and third-lien debt resulted from the prior bankruptcy. Holders of that debt own about 66 percent of the stock, Global said in a court filing. As a result of the prior bankruptcy, unions control 25 percent of the stock. Global defaulted on the first-lien debt in May. Cerberus Business Finance LLC is agent for the first-lien lenders. The airline said it received three non-binding offers to buy some or all of the business or refinance first-lien debt. None could be implemented without protection from bankruptcy court, Global said. About Global Aviation Holdings Global Aviation Holdings Inc. -- http://www.glah.com-- is the parent company of North American Airlines and World Airways. North American Airlines, founded in 1989, operates passenger charter flights using B767-300ER aircraft. Founded in 1948, World Airways -- http://www.woa.com-- operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. The parent of World Airways Inc. and North American Airlines Inc. implemented the prior Chapter 11 reorganization in February. The new case is In re Global Aviation Holdings Inc., 13-12945, U.S. Bankruptcy Court, District of Delaware (Wilmington). The prior case was In re Global Aviation Holdings Inc., 12-bk-40783, U.S. Bankruptcy Court, Eastern District New York (Brooklyn). Peachtree City, Georgia-based Global blamed the new bankruptcy on decreased flying for the government that reduced revenue for the first nine months of this year to $354 million from $486 million in the same period of 2012. The new petition shows assets and debt both exceeding $500 million. In the first bankruptcy, Global listed $589.8 million in assets and debt of $493.2 million. GMX RESOURCES: Files Cash Collateral Budget Thru Jan. 31 -------------------------------------------------------- GMX Resources Inc., et al., filed with the U.S. Bankruptcy Court Western District of Oklahoma an approved budget for use of cash collateral until Jan. 31, 2014. A copy of the approved budget is available for free at http://bankrupt.com/misc/GMXRESOURCES_ApprovedBudget.pdf GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. GMX filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. GMX listed assets for $281.1 million and liabilities totaling $458.5 million. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. David A. Zdunkewicz, Esq., at Andrews Kurth LLP, represents the Debtors as counsel. Looper Reed is substituted as counsel for the Official Committee of Unsecured Creditors in place of Winston & Strawn LLP, effective as of April 25, 2013. The Committee tapped Conway MacKenzie, Inc., as financial advisor. HARVEST NATURAL: Receives Notices of Defaults on VSM Agreements --------------------------------------------------------------- Harvest Natural Resources on Nov. 12 reported 2013 third quarter earnings and provided an operational update. Harvest reported third quarter net income of $2.0 million, or $0.05 per diluted share, compared to net income of $5.8 million, or $0.15 per diluted share, for the same period last year. The third quarter results included exploration expenses of $1.5 million, or $0.04 per diluted share, an impairment charge on the Company's Colombia asset of $2.3 million, or $0.06 per diluted share, and an unrealized loss on derivatives of $6.6 million, or $0.17 per share. After adding back the charges for exploration expense, impairment and unrealized losses on derivatives, net income would have been $12.4 million, or $0.32 per diluted share. Petrodelta had net income during the third quarter of $96.6 million, $30.9 million net to Harvest's 32 percent interest, under International Financial Reporting Standards (IFRS). After adjustments to Petrodelta's IFRS earnings, primarily to conform to accounting principles generally accepted in the United States (GAAP), Harvest's 32 percent share of Petrodelta's earnings was $20.6 million, compared to $16.2 million for the same period last year. Highlights for the third quarter of 2013 include: Venezuela -- Negotiations continue with Pluspetrol Venezuela S.A. to acquire the outstanding shares of Harvest through a transaction in which Pluspetrol would retain Harvest's net 32 percent interest in Petrodelta while Harvest's non-Venezuelan assets would be contributed to a new company that would be spun off to the Company's stockholders -- During the third quarter of 2013, Petrodelta drilled and completed four wells and sold approximately 3.8 million barrels of oil (MMBO) for a daily average of approximately 41,726 barrels of oil per day (BOPD), an increase of 9 percent over the same period in 2012 -- Petrodelta's current production rate is approximately 44,000 BOPD and the 2013 expected average production rate is 40,400 BOPD with capital expenditures projected at $210.0 million -- Four development wells were drilled during the period, two in the El Salto field, one in the Isleno field and one in the Temblador field Gabon -- Negotiation of definitive agreements continue with Vitol S.A. to acquire Harvest's 66.67% interest in the Dussafu PSC for $137.0 million in cash -- Acquisition of a 1,260 square kilometer 3D seismic survey commenced in October 2013 and the first high quality seismic products are expected to be available during the second quarter of 2014 -- Geoscience, reservoir engineering and economic studies have been progressed, and a field development plan is progressing Indonesia -- Land access and acquisition, environmental studies, and tender prequalification and procurement are on-going -- Continued work on an exploration program targeting the Pliocene and Miocene targets James A. Edmiston, President and Chief Executive Officer of Harvest Natural Resources stated, "The two previously announced potential transactions, taken together, accurately reflect the strategic direction of the Company. In the near term, the Board and Management will remain primarily focused on a sale of the asset base of the Company in whole or in parts and a return of the proceeds to its shareholders." Mr. Edmiston continued, "While we cannot assure the shareholders that either of these potential transactions will reach closure, we believe the quality of the asset base continues to attract interest from the industry." Venezuela During the three months ended September 30, 2013, Petrodelta sold approximately 3.8 MMBO for a daily average of 41,726 BOPD, an increase of nine percent over the same period in 2012 and nine percent over the previous quarter. Petrodelta also sold 0.6 billion cubic feet of natural gas for a daily average of 6.5 million cubic feet per day. P etrodelta's current production rate is approximately 44,000 BOPD. During the third quarter of 2013, Petrodelta drilled and completed four development wells, two in the El Salto field, one in the Isleno field and one in the Temblador field. Currently, Petrodelta is operating five drilling rigs and one workover rig. A sixth drilling rig is rigging up. Infrastructure enhancement projects in the El Salto and Temblador fields continue. The average sale price for crude oil produced during the quarter was approximately $93.43 per barrel. In September 2013, the Company announced that it had entered into exclusive negotiations with Pluspetrol Venezuela S.A. (Pluspetrol) to sell the outstanding shares of Harvest through a transaction in which Pluspetrol would retain Harvest's net 32 percent interest in Petrodelta while Harvest's non-Venezuelan assets would be contributed to a new company that would be spun off to the Company's stockholders. The total consideration would be approximately $373 million, before taking into account repayment of the Company's long-term debt, payment of costs and other obligations, and customary working capital adjustments. The assets to be spun off would primarily include the Company's interests in Gabon and Indonesia. While the Company's obligation to negotiate exclusively with Pluspetrol has expired, it is continuing to discuss with Pluspetrol on a non-exclusive basis entering into a definitive agreement that would entail this transaction or one similarly structured. Exploration and Other Activities Dussafu Project - Gabon (Dussafu PSC) Operational activities during the three months ended September 30, 2013 included continuation of planning for a cluster field development. Geoscience, reservoir engineering and economic studies have been progressed, and a field development plan is progressing Acquisition of a 1,260 square kilometer 3D seismic survey commenced in October 2013, and the first high quality seismic products are expected to be available during the second quarter of 2014. The survey will provide the first 3D coverage over the outboard, where significant pre-salt prospectivity has been recognized on 2D data. The pre-salt is currently the focus of deep water exploration activity offshore Gabon. The new 3D seismic data will also enhance the placement of future development wells in the Ruche and Tortue development program. On September 27, 2013, HNR Global Holding B.V., an indirect wholly-owned subsidiary of the Company, entered into exclusive negotiations with Vitol S.A. to sell Harvest Dussafu B.V., which holds the Company's 66.67% interest in the Dussafu PSC, for $137.0 million in cash. Net proceeds from the sale are estimated to be approximately $121.8 million after deductions for $3.5 million in transaction related costs and $11.7 million in taxes. Budong-Budong PSC - Indonesia Operational activities during the three months ended September 30, 2013 included continued work on an exploration program targeting the Pliocene and Miocene targets encountered in the previous two wells. Land access and acquisition; environmental studies; construction and upgrades to access roads, bridges, and well site; permitting; and tender prequalification and procurement are on- going. Colombia Harvest received notices of default from the Company's partners for failing to comply with certain terms of the farmout agreements for Block VSM 14 and Block VSM 15. Also approvals from the government of the Republic of Colombia in connection with the Company's interest remain pending. The Company is discussing this situation with its partners to see how it may be able to cure these defaults and reform the agreements. Unless the Company is successful at doing so, its partners may terminate the farmout agreements, and Harvest would relinquish its interests in the Blocks. After evaluating these circumstances, the Company determined that it was appropriate to fully impair the costs associated with these interests, and the Company recorded an impairment charge of $2.3 million during the three months ended September 30, 2013. About Harvest Natural Resources Houston-based Harvest Natural Resources, Inc., is an independent energy company engaged in the acquisition, exploration, development, production and disposition of oil and natural gas properties since 1989, when it was incorporated under Delaware law. The Company has acquired and developed significant interests in the Bolivarian Republic of Venezuela. The Company's Venezuelan interests are owned through Harvest-Vinccler Dutch Holding, B.V., a Dutch private company with limited liability. The Company's ownership of Harvest Holding is through HNR Energia, B.V., in which the Company has a direct controlling interest. Through HNR Energia, the Company indirectly owns 80 percent of Harvest Holding and the Company's partner, Oil & Gas Technology Consultants (Netherlands) Cooperatie U.A., a controlled affiliate of Venezolana de Inversiones y Construcciones Clerico, C.A. ("Vinccler"), indirectly owns the remaining 20 percent interest of Harvest Holding. The Company does not have a business relationship with Vinccler outside of Venezuela. Harvest Holding owns, indirectly through wholly owned subsidiaries, 40 percent of Petrodelta, S.A. As the Company indirectly owns 80 percent of Harvest Holding, it indirectly owns a net 32 percent interest in Petrodelta, S.A., and Vinccler indirectly owns eight percent. HEADWATERS INC: Moody's Says Consent Agenda Has No Impact on CFR ---------------------------------------------------------------- Moody's Investors Service said that Headwaters, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating will likely not change following the company's recent announcement that it has commenced a solicitation of consents from the holders of its Senior Secured Notes due 2019 to loosen the leverage ratio for the incurrence of additional lien obligations. Headwaters, Inc., headquartered in South Jordan, Utah, is a domestic provider of diversified products predominately for the repair and remodeling, new home and heavy construction end markets. It also provides energy technology and related services for the oil industry. Revenues for the 12 months through September 30, 2013 totaled about $703 million. HILLTOP FARMS: Final Decree Closing Chapter 11 Reorganization Case ------------------------------------------------------------------ The Hon. Charles L. Nail, Jr. of the U.S. Bankruptcy Court for the District of South Dakota entered on Nov. 5 a final decree closing the Chapter 11 case of Hilltop Farms, LLC. As reported in the Troubled Company Reporter on Oct. 28, 2013, the Debtor explained that, among other things: 1. the Court entered its post-confirmation order on Aug. 21, 2013; 2. consummation of the Plan is complete. 3. there are no holders of claims or interests which have not been surrendered or released in accordance with the provisions of the Plan; and 4. it does not waive any of its rights afforded by Section 1127 of the Bankruptcy Code. Judge Charles L. Nail, Jr. issued a final order on Aug. 21, 2013, confirming Hilltop Farms's Modified Plan of Reorganization, with clarifications entered on the record and incorporated in the Plan. The modifications noted include the incorporation of settlement agreements with First Bank & Trust and CNH Capital America, LLC. The Confirmed Plan provides that the Debtor will pay $98.11 per month to the priority creditor; $47,243 per month to impaired secured creditors under Claim Classes 1 through 3; and an estimated $835 per month to unsecured creditors under Claim Class 8 for the first year of the Plan, for a total of approximately $48,177 per month. This plan version notes an increase in monthly payments to impaired secured creditors of about $6,400. The previous plan version only provides $40,827 per month to impaired secured creditors. Moreover, the Confirmed Plan specifies that the parties acknowledge that the indebtedness due to CNH Capital America is oversecured. CNH will be paid attorney's fees and costs totaling $1,500. In addition to the attorney's costs, the creditor will be paid $2,220 per month. The Confirmed Plan also provides that the Debtor will pay $43,241 per month starting Oct. 1, 2013, to First Bank & Trust; and Hilltop Dairy, LLP, will pay $33,466 per month starting Sept. 17, 2013. A full-text copy of the Plan dated Aug. 9, 2013, as confirmed, is available for free at: http://bankrupt.com/misc/HILLTOPFARMS_PlanConfrmed.PDF About Hilltop Farms Elkton, South Dakota-based Hilltop Farms, LLC, owns properties in Brookings County, South Dakota. It filed a Chapter 11 petition (Bankr. D.S.D. Case No. 12-40768) on Nov. 2, 2012, in Sioux Falls, South Dakota. It disclosed assets of $13.1 million and $13.5 million in liabilities as of Nov. 2, 2012. Laura L. Kulm Ask, Esq., at Gerry & Kulm Ask, Prof LLC, serves as counsel to the Debtor. Judge Charles L. Nail, Jr., presides over the case. Daniel M. McDermott, U.S. Trustee for Region 12, was unable to form an official committee of unsecured creditors in the Debtor's case. IAC/INTERACTIVECORP: Moody's Rates $500MM Unsecured Notes 'Ba1' --------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to IAC/InterActiveCorp's proposed $500 million senior unsecured notes due 2018. As part of this rating action, Moody's also affirmed IAC's Corporate Family Rating (CFR) at Ba1, Probability of Default Rating (PDR) at Ba1-PD and Speculative Grade Liquidity Rating at SGL-1. The stable rating outlook is maintained. New issue proceeds will be used to increase cash balances and for general corporate purposes, which may include working capital, acquisitions and share purchases. Pro forma for the incremental debt, Moody's expects IAC's leverage to increase to about 2.4x total debt to EBITDA from about 1.5x (as of September 30, 2013) on a Moody's adjusted basis. Despite the increase in leverage, the CFR remains unchanged since pro forma leverage is below Moody's 3x downgrade trigger and Moody's projects leverage to decline to the 2x level by the end of 2014 via EBITDA expansion. Moody's expects IAC's leverage to remain near this level thereafter, barring a large debt-financed acquisition or stock buyback. Though Moody's anticipates higher revenue volatility and brief periods of sluggish growth, Moody's believes the secular growth trends sustaining IAC's higher margin Search & Applications and Match businesses will remain intact over the foreseeable future (albeit at somewhat lower levels). The additional debt, however, will reduce the company's financial flexibility within the Ba1 rating category until EBITDA expansion materializes. To the extent IAC delays deleveraging or incurs additional debt such that Moody's expects total debt to EBITDA will be sustained above 3x (Moody's adjusted), ratings would likely experience downward pressure. Rating Assigned: $500 Million Senior Unsecured Notes due 2018 -- Ba1 (LGD-4, 52%) Ratings Affirmed: Corporate Family Rating -- Ba1 Probability of Default Rating -- Ba1-PD $500 Million Senior Unsecured Notes due 2022 -- Ba1 LGD assessment revised to (LGD-4, 52%) $80 Million 5% Liberty Bonds due 2035 -- Baa3, LGD assessment revised to (LGD-2, 24%) Speculative Grade Liquidity Rating -- SGL-1 The assigned rating is subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to Moody's. Ratings Rationale: The Ba1 CFR recognizes IAC's solid operating performance driven by a proven business model that has demonstrated increased website traffic via better search engine analytics, marketing and advertising, improved traffic monetization (from B2C downloadable applications, and B2B customized browser-based applications), strong subscriber growth, a disciplined acquisition/investment strategy and rationalization of underperforming portfolio media assets. The Ba1 rating is supported by IAC's position as one of the largest global Internet and digital media companies with online properties that have established brand names and reasonably long operating histories. Moody's expects IAC to benefit from the secular growth in online advertising spending and consumer Internet usage, as traditional print media, entertainment and leisure content increasingly migrate to digital and mobile computing platforms. The rating reflects IAC's low capital intensity, strong free cash flow generation and modest leverage. Moody's expects annual free cash flow in the range of $200 to $300 million (after dividends) and financial leverage in the 2x-3x range (1.5x as of September 30, 2013) as measured by total debt to EBITDA (Moody's adjusted) over the next 12-18 months. Moody's believes the company will maintain very good liquidity supported by a sizable net cash position and a $300 million undrawn revolver, which provide the flexibility to pursue strategic growth objectives. The Ba1 CFR also incorporates the inherent risk that Internet businesses could experience a potential decline in website traffic due to rapidly changing technology and industry standards. Alternative means of content delivery as well as changes in consumer engagement may also contribute to the risk of rapid obsolescence or waning relevance of traditional portal Internet sites. Low entry barriers can produce periods of intense competition. The rating is constrained by IAC's dependence on the partnership with Google and potential changes to Google's search algorithms that could hurt IAC's listings placements. It also reflects the concentrated earnings profile (derived primarily from Search & Applications and Match), resulting in a large exposure to digital advertising revenue which could become more cyclical in future years. The rating is constrained by continuing operating losses (albeit shrinking) in the Local, Media and Other segments in aggregate. IAC's historically aggressive financial policies (with regard to share purchases) combined with the large voting ownership stake of Mr. Barry Diller heightens event risk. At the same time, industry risks (i.e., low switching costs, obsolescence, exposure to consumer sentiment) could lead to increased acquisition activity to defend market share or expand into new markets given the rapid evolution of digital advertising, e-commerce and mobile computing. Given the strength of its current business model, Moody's expects IAC to maintain a prudent acquisition strategy. Rating Outlook: The stable rating outlook reflects Moody's expectations that IAC will continue to maintain and potentially grow its market position in the Search & Applications and Match segments, and experience a reasonable amount of subscriber churn in its Internet portfolio. The outlook incorporates expectations that IAC will continue to maintain a consolidated EBITDA margin of at least 14% (Moody's adjusted), generate positive free cash flow, maintain a sizeable cash balance and sustain a conservative capital structure as it pursues strategic growth objectives. What Could Change the Rating - UP: IAC's Ba1 rating could be upgraded if the company maintains its leading market share in Match, improves its number four position in Search & Applications and expands diversification of its business by increasing the scale of its Local and Media properties. Moody's could also consider an upgrade to the extent Moody's expects IAC to: (i) demonstrate margin expansion with increasing revenue that is in line or ahead of market growth; (ii) minimize operating losses in the Local, Media and Other segments; and (iii) maintain a net cash position with Moody's adjusted debt to EBITDA sustained below 2x. An important consideration for an upgrade would be adherence to conservative financial policies with regard to share purchases and dividends. What Could Change the Rating - DOWN: Ratings could be downgraded if IAC's competitive position weakens materially as evidenced by revenue declines of 5% or more, adjusted EBITDA margins below 12%, rising traffic acquisition costs or increasing customer churn. Downward pressure could also materialize if financial leverage as measured by Moody's adjusted debt to EBITDA is sustained over 3x or IAC's liquidity position were to deteriorate significantly due to lower free cash flow generation, higher share purchases or increased acquisition activity. IAC/InterActiveCorp is a leading media and online company that owns more than 150 Internet-based brands and products with more than a billion monthly visits across more than 100 countries including: Ask.com (search engine), About.com (online content and reference library). Match.com (online dating and personals), HomeAdvisor (local), Vimeo.com (media) and several other consumer- related applications and portals. Revenue was approximately $3.1 billion for the twelve months ended September 30, 2013. IAC/INTERACTIVECORP: S&P Rates New $500MM Sr. Unsecured Notes BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned IAC/InterActiveCorp.'s proposed $500 million senior unsecured notes due 2018 an issue- level rating of 'BB+', with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery for noteholders in the event of a payment default. The 'BB+' issue-level rating is at the same level as the 'BB+' corporate credit rating on the company. The company will use proceeds from the transaction for general corporate purposes, including acquisitions and share buybacks. "Pro forma for the debt issuance, lease-adjusted leverage increases to 2.1x, up from 1.3x for the 12 months ended Sept. 30, 2013. Under our base-case scenario, we expect leverage to decrease to 2x by the end of 2013 and then to below 2x in 2014, aided by EBITDA growth" "The stable rating outlook reflects our expectation that the company's operating performance will remain healthy, with revenue and EBITDA growth approaching a double-digit percent rate in 2014." "We expect growth at the Search & Application and Match segments will be a key input, and that the company will maintain debt leverage below 2x in the longer term." "We view the company's business risk profile as "fair," reflecting the company's good competitive position and profitability. We view the company's financial risk profile as "intermediate," because of its low debt leverage, good conversion of EBITDA into discretionary cash flow, and strong liquidity, despite ongoing share repurchase and dividends. RATINGS LIST IAC/InterActiveCorp. Corporate Credit Rating BB+/Stable/-- New Rating IAC/InterActiveCorp. Senior Unsecured $500M notes due 2018 BB+ Recovery Rating 3 INTERCARE HEALTH: $2.3MM IRS Claim Entitled to Unsecured Priority ----------------------------------------------------------------- Bankruptcy Judge Peter H. Carroll in Los Angeles, Calif., denied Intercare Health Systems, Inc.'s motion and allow Claim # 1-3 filed by the United States Department of Treasury - Internal Revenue Service as an unsecured priority claim in the amount of $2,322,545.20 pursuant to 11 U.S.C. Sec. 507(a)(8)(D). The IRS's amended claim filed May 14, 2013, arose in Intercare's 2002 bankruptcy. The claim asserts unemployment tax liabilities for the years ending December 31, 2000, December 31, 2001, and December 31, 2002, and employment tax liabilities for the periods ending December 31, 2000, March 31, 2001, June 30, 2001, June 30, 2002, September 30, 2002 and December 31, 2002. Intercare objects to the priority sought by the IRS, asserting that the three-year period provided in Sec. 507(a)(8)(D) expired prior to the petition date. Intercare was a debtor in a prior Chapter 11 bankruptcy commenced December 27, 2002 (Case No. 02-46385, Bankr. C.D. Calif.). On January 21, 2005, Intercare filed a First Amended Joint Chapter 11 Plan of Reorganization in the first case. In that Plan, Intercare listed the IRS as the holder of a tax claim entitled to priority under Sec. 507(a)(8) in the amount of $8,724,180. On May 6, 2005, an Amended Order Confirming First Amended Joint Chapter 11 Plan of Reorganization was entered in the First Case which re-vested the bankruptcy estate in the reorganized debtor subject to the terms of the confirmed plan. Intercare defaulted on its payment obligations to the IRS a couple of times, and the government agency restructured the payments. On September 5, 2007, a final decree was entered in Intercare's First Case. The case was closed on November 30, 2007. One year later, Intercare failed to make a plan payment due on November 14, 2008. Thereafter, Intercare ceased making payments. On January 26, 2009, the IRS sent a Notice of Default. Intercare Health Systems, Inc. -- fka National Psychiatric Services, Inc.; dba City of Angels Medical Center, dba Ingelside Hospital, and dba Ingleside Medical -- commenced its second chapter 11 case (Case No. 09-29121, Bankr. C.D. Calif.) on July 24, 2009. On November 14, 2012, an order was entered confirming the Amended Joint Plan of Reorganization filed by Intercare and the Official Committee of Unsecured Creditors. Under the Plan, the IRS was listed as the holder of a tax claim entitled to priority under Sec. 507(a)(8) in the amount of $2,237,853. A copy of Judge Carroll's Nov. 12, 2013 Memorandum Decision is available at http://is.gd/rxaQvWfrom Leagle.com. Michael S. Kogan, Esq. -- mkogan@ecjlaw.com -- at Ervin Cohen & Jessup LLP, served as counsel to the Debtor in the 2009 case. In the 2009 petition, the Debtor estimated $10 million to $50 million in both assets and debts. The petition was signed by Ronald L. Durkin, CRO, the company's chief restructuring officer. INTERNAP NETWORK: Moody's Rates $350MM Secured Credit Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a first time B3 corporate family rating (CFR) and B3-PD probability of default rating (PDR) for Internap Network Services Corporation. Moody's also assigned B3 (LGD3-46%) ratings to the company's $350 million senior secured credit facilities which consist of a $300 million term loan due 2019 and $50 million revolver due 2018. The company plans to use the proceeds to refinance existing debt and to fund the $145 million acquisition of hosting provider iWeb. In addition, Moody's has assigned a Speculative Grade Liquidity rating of SGL-2, reflecting Internap's expected high cash balance and undrawn $50 million revolver at close which will more than cover the company's expected cash burn over the next 4 to 6 quarters. The ratings are contingent upon Moody's review of final documentation and no material change in the terms and conditions of the debt as advised to Moody's. The rating outlook is stable. Issuer: Internap Network Services Corporation Assignments: Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured Term Loan due 2019, Assigned B3, LGD3 -46% Senior Secured Revolver due 2018, Assigned B3, LGD3 -46% Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook, Stable Ratings Rationale: Internap's B3 CFR reflects its small scale, high leverage and consistent negative free cash flow as a result of its high capital intensity. The rating also incorporates Moody's concerns that the company derives approximately half of its revenue from its lower margin partner data center business and its IP services business which faces continual price pressure and represents somewhat of a commodity-like service. These limiting factors are offset by Internap's stable base of contracted recurring revenues within its company controlled datacenter business and its established reputation as a high quality provider in the fast growing collocation, managed services and cloud segments. Internap has made progress in growing its managed services and cloud offerings by introducing proprietary platforms and high quality services which differentiate the company from competitors. Moody's expects this market segment to experience strong growth in the next several years as companies become more comfortable outsourcing their computing needs to providers like Internap. The recent acquisition of iWeb should allow Internap to expand its customer reach into the SMB market from its current focus on enterprise customers. However, the increased investment into the managed services and cloud computing business will expose Internap to competition from large and well capitalized providers like Amazon, IBM, Rackspace, AT&T and others. The ratings for the debt instruments reflect both the overall probability of default of Internap, to which Moody's assigns a PDR of B3-PD, the average family loss given default assessment and the composition of the debt instruments in the capital structure. Despite the all-bank debt capital structure, Moody's has assigned a family level average expected loss assumption of 50% due to the high mix of non-facilities based revenues inherent in Internap's business. Moody's believes that this business mix would lead to a below average recovery upon default compared to a traditional asset heavy telecom operator. The proposed $300 million senior secured term loan and $50 million senior secured revolver are rated B3 (LGD3, 46%), in line with the CFR. Internap's speculative grade liquidity rating of SGL-2 reflects Moody's expectation that Internap will maintain good liquidity over the next twelve months. Moody's estimates that Internap will have approximately $50 million of cash on hand and an undrawn $50 million revolver at the close of the transaction. Moody's expects the company to remain cash flow negative over the next 12-18 months given the company's high capital intensity. The stable outlook reflects Moody's view that Internap will continue to grow revenue in the mid single digit percentage range while improving its EBITDA margin towards 30%. Moody's could consider a rating upgrade if free cash flow approaches 5% of debt and leverage were to trend towards 4x (both on a Moody's adjusted basis). Downward rating pressure could develop if liquidity becomes strained or Moody's adjusted leverage increases above 6.5x. Headquartered in Atlanta, Georgia, Internap Network Services Corporation ("Internap") is a publicly traded provider of data center and internet protocol services. The company generated $279 million in revenue for the last twelve month ended September 30, 2013. INTRAWEST RESORTS: Moody's Assigns B2 CFR & Rates $55MM Notes B2 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Intrawest Resorts Holdings, Inc. At the same time, Moody's assigned a B2 rating to the company's proposed $540 million 1st lien term loan due 2020 and $55 million letter of credit facility expiring in 2018. In addition, Moody's assigned a Ba2 rating to the company's proposed $25 million super priority 1st lien revolving credit facility expiring in 2018. Proceeds from the 1st lien term loan, together with $50 million of proceeds from a separate, sponsor owned entity funded on a standalone basis (Abercrombie & Kent), as well as roughly $10 million of balance sheet cash, are expected to be used to refinance existing debt and pay prepayment, transaction and financing related fees and expenses. The rating outlook is stable. According to Moody's Analyst Brian Silver, "Intrawest's solid market position in the North American ski industry is offset by the company's high initial leverage and ongoing susceptibility to varying skier visitation levels, which are largely driven by difficult to predict economic and weather conditions." The following ratings have been assigned (subject to the review of final documentation): B2 Corporate Family Rating; B2-PD Probability of Default Rating; Ba2 (LGD1, 1%) to the proposed $25 million 1st lien super priority revolving credit facility due 2018; B2 (LGD3, 46%) to the proposed $540 million 1st lien term loan due 2020; and B2 (LGD3, 46%) to the proposed $55 million 1st lien LC facility due 2018. The outlook is stable. Ratings Rationale: Intrawest's B2 Corporate Family Rating ("CFR") reflects its high pro-forma financial leverage (approximately 5.9 times debt-to- EBITDA at June 30, 2013, including Moody's standard analytical adjustments), small size in terms of revenues relative to rated lodging & cruise industry peers and the high degree of seasonality inherent in its operations. Moreover, Intrawest's ski resort EBITDA margins are considerably lower than some public industry peers, such as Vail Resorts and Whistler Blackcomb. The rating also incorporates the ski industry's sensitivity to both discretionary consumer spending patterns and snow conditions. However, Intrawest has a solid market position in North America as evidenced by its ownership interest in seven mountain resorts, including what are understood to be three of the top ten in the US and two of the top three in Canada in terms of skier visits. Positive rating consideration is given to the long-term stable fundamentals of the ski resort industry in part due to high barriers of entry, as well as Intrawest's geographically diverse ski resort operations. The Ba2 rating on the proposed $25 million 1st lien revolving credit facility reflects its super priority status on all collateral and guarantees ahead of the other first lien facilities. The B2 rating on the other proposed 1st lien credit facilities, including the $540 million 1st lien term loan and $55 million 1st lien LC facility, reflects their priority security interest behind the revolver in substantially all assets of Intrawest Resorts Holdings and subsidiary guarantors. The 1st lien credit facilities will be guaranteed by Intrawest US Holdings, Inc. and benefit from the support provided by the company's unsecured 3rd party debt and other unsecured non-debt obligations of the company. Moody's used a 50% mean family-level LGD recovery estimate due to the presence of 1st lien and unsecured 3rd party debt in the proposed capital structure. As a result, the company's PDR is in line with the CFR at B2-PD. The stable outlook reflects Moody's expectation that visitation trends will remain healthy, assuming normalized snow conditions, and that revenues and earnings will grow moderately during the next 12 -- 18 months. The outlook also assumes that consumer spending will not materially weaken. The ratings could be upgraded if the company is able to improve profitability such that debt-to-EBITDA is sustained below 5.0 times and EBIT-to-interest approaches 2.0 times. In addition, Moody's would expect a more robust liquidity profile prior to any upward rating consideration. Alternatively, the ratings could be downgraded if the company does not meet expectations and debt-to- EBITDA and EBIT-to-interest are sustained above 6.5 times and/or approach 1.0 times, respectively. The ratings could also be downgraded if liquidity weakens and there is reliance on the revolver to meet cash needs or if the company becomes more aggressive on the financial policy front, primarily related to future acquisition activity and/or real estate development. Intrawest Resorts Holdings, Inc. (ITW or Intrawest), headquartered in Denver, Colorado, is one of North America's premier mountain resort and adventure companies. ITW operates three reportable segments through its subsidiaries including Mountain (66% of FY13 revenues), Adventure (22%), and Real Estate (12%). The Mountain segment includes six ski resorts in the US and Canada including; Steamboat and Winter Park in Colorado, Stratton in Vermont, Snowshoe in West Virginia, Tremblant in Quebec, and Blue Mountain in Ontario (50% ownership). ITW also has a 15% ownership interest in Mammoth Mountain in California. The company also owns Canadian Mountain Holidays (CMH), a heli-skiing operator and aviation business, as well as a comprehensive set of real estate businesses. Real estate includes the management, marketing and sales of vacation club properties through Intrawest Resort Club Group (IRCG), management of condo/hotel properties through Intrawest Hospitality Management (IHM), and sales and marketing of residential real estate through Playground. Intrawest is owned by Fortress Investment Group and was taken private via LBO in 2006. During the twelve month period ended June 30, 2013 (FY13) the company generated nearly $525 million in revenues. INTRAWEST RESORTS: S&P Assigns Prelim. 'B' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned Denver-based mountain resort operator and real estate manager and developer Intrawest Resort Holdings Inc. a preliminary 'B' corporate credit rating. The rating outlook is stable. "In addition, we assigned Intrawest's proposed $25 million super-priority revolver due 2018 our preliminary 'BB-' issue-level rating, with a preliminary recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. "We also assigned Intrawest's proposed $540 million first-lien term loan due 2020 and $55 million letter of credit facility due 2018 our preliminary 'B+' issue-level rating, with a preliminary recovery rating of '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default." "At the same time, we placed our ratings on Intrawest Cayman L.P., including our 'B-' corporate credit rating, on CreditWatch with positive implications, reflecting the expected improvement in the capital structure of primary subsidiary Intrawest Resorts Holdings Inc. upon the completion of the proposed refinancing. After raising our ratings on Intrawest Cayman L.P. by one notch, we will withdraw them, as the entity will no longer have rated debt outstanding." "The company will use proceeds from the new term loan, along with cash on hand and a one-time distribution from affiliate company Abercrombie & Kent (A&K), to refinance existing secured debt at Intrawest Cayman L.P. and to pay for fees and expenses." "Further, concurrent with the proposed refinancing, affiliates of Intrawest's majority owner Fortress Investment Group will exchange about $1.1 billion of a total $1.4 billion (as of June 30, 2013) in principal and accrued interest of subordinated debt at Intrawest Cayman L.P., for additional equity units in Intrawest Cayman L.P. "Provisions of the proposed additional equity units allow for a stated preferred return that is to be paid out before any return to existing common equity units. Nevertheless, we do not view the additional equity units as debt-like, given there is no stated maturity and it is our understanding that almost all of the additional equity units will be allocated to current holders of Intrawest Cayman L.P.'s common equity in roughly the same proportion as the common equity holdings." KHATI BROTHERS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Khati Brothers Investments, Inc. dba Roadway Auto Towing P.O. Box 462707 Escondido, CA 92046 Case No.: 13-11051 Chapter 11 Petition Date: November 13, 2013 Court: United States Bankruptcy Court Southern District of California (San Diego) Debtor's Counsel: David L. Speckman, Esq. SPECKMAN & ASSOCIATES 1350 Columbia Street, Suite 503 San Diego, CA 92101 Tel: (619) 696-5151 Email: speckmanandassociates@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Frank Khati, vice president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. LANDMARK MEDICAL: Judge's Ruling on Company Sale Pushed Back ------------------------------------------------------------ SF Gate News reports that a Rhode Island judge's ruling on a request to finalize the sale of Landmark Medical Center in Woonsocket to a for-profit California hospital chain has been pushed back. Superior Court Judge Michael Silverstein was expected to issue a ruling Wednesday on a petition that seeks to close the sale of financially troubled Landmark to Prime Healthcare Services, according to SF Gate News. The report relates that Landmark spokesman Bill Fischer said the hearing has been rescheduled for Nov. 15. Landmark has been in receivership since 2008, and previous purchase agreements have fallen through, the report notes. The report relates that the parties say they want to close no later than Dec. 31, but prefer to do so by Nov. 30. Blue Cross Blue Shield of Rhode Island has filed a limited objection related to $3 million it claims it's owed as a creditor, the report relays. LEE ENTERPRISES: Debt Reduced 2 Years Ahead of Plan --------------------------------------------------- Thomson Reuters ONE reported that Lee Enterprises, Incorporated, a major provider of local news, information and advertising in 50 markets, reported on Nov. 11 that for its fourth fiscal quarter ended September 29, 2013, digital revenue continued to increase, operating expenses continued to decrease and debt has been reduced to a level two years ahead of its reorganization plan. Because of period accounting, year-over-year comparisons are distorted. The 2012 quarter and fiscal year included an additional week of business activity, which added both revenue and cash costs in comparison with the 2013 periods. Also, the 2013 quarter includes a non-cash impairment charge of $1.94 per diluted common share. As a result, Lee reported a preliminary(2) loss of $1.71 per diluted common share, compared with a loss of 6 cents in 2012. Excluding unusual matters, adjusted earnings per diluted common share(1) totaled 25 cents for the 2013 quarter, compared with 7 cents a year ago. "Aggressive digital and subscription revenue and business transformation initiatives have enabled Lee to continue delivering strong, improving cash flow and rapid debt reduction," said Mary Junck, chairman and chief executive officer. "Our unmatched local news, information and advertising continue to drive huge print and digital audiences of all ages, adding to our optimism for continued success in 2014." She also noted: -- Adjusted EBITDA(1) increased to $173.7 million in 2013, the fifth consecutive year of strong, stable performance. -- Total digital revenue, including advertising, marketing services, subscriptions and digital businesses, totaled $19.8 million in the quarter, up 4.3% compared with the quarter a year ago, which included the extra week of operations. On a comparable 13-week basis, total digital revenue increased 9.5% compared with the quarter a year ago. -- Mobile advertising revenue increased 65.1%, to $1.5 million in the 2013 quarter. -- Operating expenses, excluding depreciation, amortization and unusual matters, decreased 9.8% for the quarter and 5.2% for the year. On a comparable 13-week basis, operating expenses, excluding depreciation, amortization and unusual matters, decreased 4.0% compared with the quarter a year ago. -- Debt was reduced by $26.0 million for the quarter and $98.4 million for the fiscal year to a balance of $847.5 million, achieving the target level in Lee's reorganization plan two years early. -- Increases from branded editions resulted in a 7.4% increase in Sunday circulation for the six months ended September 2013, compared to the prior year period. Daily circulation decreased 3.5%. -- Digital audiences continued to grow. Mobile, tablet, desktop and app page views increased 9.4% in September 2013 compared with a year ago to 209.1 million, and monthly unique visitors increased 2.7% to 23.2 million. -- Pension liabilities, net of plan assets, totaled $30.6 million as of September 29, 2013, a $38.1 million improvement from September 30, 2012, due to strong asset returns and an increase in discount rates used to measure the liabilities. Contributions to pension plans are expected to total $1.4 million in 2014, a 77% reduction from 2013, increasing cash available for debt reduction in fiscal year 2014. A full-text copy of the Reuters article is available at: http://is.gd/cfgPDM About Lee Enterprises Lee Enterprises, Incorporated, headquartered in Davenport, Iowa, publishes the St. Louis Post Dispatch and the Arizona Daily Star along with more than 40 other daily newspapers and about 300 weekly newspapers and specialty publications in 23 states. Revenue for the 12 months ended December 2010 was $780 million. The Company has 6,200 employees, with 4,650 working full-time. Lee Enterprises and certain of its affiliates filed for Chapter 11 (Bankr. D. Del. Lead Case No. 11-13918) on Dec. 12, 2011, with a prepackaged plan of reorganization. The Debtor selected Sidley Austin LLP as its general reorganization and bankruptcy counsel, and Young Conaway Stargatt & Taylor LLP as co-counsel; The Blackstone Group as Financial and Asset Management Consultant; and The Debtor disclosed total assets of $1.15 billion and total liabilities of $1.25 billion at Sept. 25, 2011. Deutsche Bank Trust Company Americas, as DIP Agent and Prepetition Agent, is represented in the Debtors' cases by Sandeep "Sandy" Qusba, Esq., and Terry Sanders, Esq., at Simpson Thacher & Bartlett LLP. Certain Holders of Prepetition Credit Agreement Claims, Goldman Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master Funding Ltd, Mudrick Distressed Opportunity Fund Global, LP and Blackwell Partners, LLC have committed to acquire up to a maximum amount of $166.25 million of loans under a New Second Lien Term Loan Facility pursuant to the Reorganization Plan. This commitment also includes the potential payment of up to $10 million as backstop cash to Reorganized Lee Enterprises to acquire the loans. The Initial Backstop Lenders are represented by Matthew S. Barr, Esq., and Brian Kinney, Esq., at Milbank, Tweed, Hadley & McCloy LLP. On Jan. 23, 2012, Lee Enterprises, et al., won confirmation of a second version of their prepackaged Chapter 11 reorganization plan. Lee Enterprises declared the prepackaged plan effective on Jan. 30. LEVEL 3 FINANCING: Fitch Rates $300MM Sr. Notes at 'BB-/RR2' ----------------------------------------------------------- Fitch Ratings has assigned a 'BB-/RR2' rating to Level 3 Financing, Inc.'s issuance of $300 million floating rate senior notes due 2018. Level 3 Financing is a wholly owned subsidiary of Level 3 Communications, Inc. (LVLT). The Issuer Default Rating (IDR) for both LVLT and Level 3 Financing is 'B' with a Positive Rating Outlook. LVLT had approximately $8.5 billion of debt outstanding on Sept. 30, 2013. Proceeds from the senior note offering are expected to be used to refinance the company's existing equivalent sized floating rate senior notes due 2015. The senior notes will be guaranteed by LVLT and other operating subsidiaries including Level 3 LLC (a direct wholly owned subsidiary of Level 3 Financing, Inc.) in a manner similar to the existing senior notes issued by Level 3 Financing. The new notes will rank pari passu with Level 3 Financing's existing senior unsecured indebtedness. Outside of the extended maturity date, LVLT's credit profile has not substantially changed. 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 Sept. 30, 2013, totaled approximately $507 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. Key Rating Drivers: -- LVLT's credit profile continues to strengthen in line with Fitch's expectations. Fitch foresees LVLT leverage will approximate 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 5.3x as of the latest 12 months (LTM) period ended Sept. 30, 2013, which compares favorably with company's leverage of 5.85x as of Dec. 31, 2012 and 6.10x as of Sept. 30, 2012. Fitch foresees LVLT's leverage will move below 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 FCF 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 FCF. The company reported a $42 million FCF deficit during the LTM period ended Sept. 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 FCF 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. Rating Sensitivities: What Could Trigger a Positive Rating Action -- Consolidated leverage maintained at 5.5x or lower; -- Consistent generation of positive FCF; -- 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 deleveraging plan. LEVEL 3 FINANCING: Moody's Rates New $300MM Sr. Secured Notes 'B3' ------------------------------------------------------------------ Moody's Investors Service rated Level 3 Financing, Inc.'s new $300 million senior unsecured notes B3. Financing is a wholly-owned subsidiary of Level 3 Communications, Inc., the guarantor of the facilities. Level 3's corporate family and probability of default ratings remain unchanged at B3 and B3-PD, respectively, and its speculative grade liquidity rating remains unchanged at SGL-1 (very good liquidity). In addition, the ratings outlook remains stable. Proceeds from the new issue will be used to repay a similar amount of the company's senior unsecured floating rate notes that mature February 2015. As sources and uses are approximately equal and the new issue is the same class of debt as that being fully repaid (i.e. senior unsecured in the name of Financing, Inc., guaranteed by Level 3), the new notes are rated at the same level as the debt they replace and there is no ratings impact. The following summarizes rating action as well as Level 3's ratings: Assignments: Issuer: Level 3 Financing, Inc. Senior Unsecured Regular Bond/Debenture, B3 (LGD4, 58%) Issuer: Level 3 Communications, Inc. Corporate Family Rating, unchanged at B3 Probability of Default Rating, unchanged at B3-PD Speculative Grade Liquidity Rating, unchanged at SGL-1 Outlook, unchanged at Stable Senior Unsecured Bond/Debenture, unchanged at Caa2 (LGD6, 92%) Issuer: Level 3 Financing, Inc. Senior Secured Bank Credit Facility, unchanged at Ba3 (LGD2, 10%) Senior Unsecured Regular Bond/Debenture (including debts issued by Level 3 Escrow, Inc. that have been assumed by Level 3 Financing, Inc.), unchanged at B3 (LGD4, 58%) Ratings Rationale: Level 3's B3 CFR is based on the company's limited ability to generate free cash flow over the next 12-to-18 months and the lack of visibility with respect to current and future activity levels. Level 3 has a reasonable business proposition as a facilities- based provider of optical, Internet protocol telecommunications infrastructure and services, however, owing to excess long-haul transport capacity, margins are relatively weak. Moody's does not expect supply and demand balance to change and therefore expect stable margins going forward. With no quantity or price metrics disclosed by the company or its competitors, visibility of current and future activity is very limited, a credit negative. The rating is also based on the expectation that there is sufficient liquidity to continue to fund investments in synergy-related initiatives, and that the company's improving credit profile facilitates repayment and/or roll-over of 2015 and 2016 debt maturities. Rating Outlook: The stable ratings outlook is premised on the expectation that Level 3 will be modestly cash flow positive (on a sustained basis). What Could Change the Rating - Up: In the event that Debt/EBITDA declines towards 5.0x and (RCF- CapEx)/Debt advances beyond 5% (in both cases, inclusive of Moody's adjustments and on a sustainable basis), positive ratings actions may be warranted. What Could Change the Rating - Down: Whether the result of execution mis-steps or adverse industry conditions, should it appear that the company is not cash flow self-sufficient, or in the event of significant debt-financed acquisition activity, negative ratings activity may be considered. Corporate Profile: Headquartered in Broomfield, Colorado, Level 3 Communications, Inc. (Level 3) is a publicly traded international communications company with one of the world's largest long-haul communications and optical Internet backbones. Level 3's annual revenue is approximately $6.4 billion and annual (Moody's adjusted) EBITDA is $1.7 billion. Approximately 62% of revenue is generated in North America, 14% in Europe, 12% in Latin America, while the remaining 12% of revenue is generated through other sources. LEVEL 3 FINANCING: S&P Rates $300MM Floating Rate Sr. Notes 'CCC+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating and '6' recovery rating to Level 3 Financing Inc.'s $300 floating rate senior notes due 2018. Level 3 Financing is a subsidiary of Broomfield, Colo.-based Level 3 Communications Inc. "The '6' recovery rating reflects our expectation of negligible (0% to 10%) recovery for noteholders in the event of a default." The notes will be sold under Rule 144A with registration rights and proceeds will refinance the $300 million floating rate senior notes due 2015. "Other ratings on Level 3 Communications and subsidiaries, including the 'B' corporate credit rating, are unchanged. The outlook is stable. Level 3 Communications, a global telecommunications provider, reported approximately $8.6 billion of outstanding debt at Sept. 30, 2013. RATINGS LIST Level 3 Communications Inc. Corporate Credit Rating B/Stable/-- New Rating Level 3 Financing Inc. Senior Unsecured $300 mil. floating rate senior notes due 2018 CCC+ Recovery Rating 6 LONE PINE: Enters Commitment Letter for New Financing ----------------------------------------------------- Lone Pine Resources Inc. on Nov. 12 provided an update regarding its restructuring plan and related court proceedings. Execution of Commitment Letter On Nov. 11, 2013, Lone Pine entered into a commitment letter with a syndicate of lenders to provide for a new senior secured credit facility (the "New ABL") to be effective upon completion of the Company's proposed restructuring under the Companies' Creditors Arrangement Act (the "CCAA") that was previously announced on September 25, 2013. Funding of the New ABL, which remains subject to the negotiation and execution of definitive documentation, is conditional on, among other things, completion of the proposed restructuring as previously announced by the Company. It is estimated that the available borrowing base of the New ABL will be $130 million at the time of closing. As part of the proposed restructuring, Lone Pine expects that proceeds from a new US$100 million preferred equity investment to be made by eligible affected creditors, together with a portion of the borrowings available under the New ABL, will be used to repay all secured indebtedness under the Company's existing secured credit facility. Lone Pine intends to seek approval of the commitment letter in respect of the New ABL from the Alberta Court of Queen's Bench in its proceedings under the CCAA. Automatic Extension of Stay Period In connection with Lone Pine's execution of a commitment letter for the New ABL, the stay of proceedings against Lone Pine, certain of its affiliates, and its directors and officers under the CCAA that was initially put in place by the Canadian Court on September 25, 2013 has been automatically extended to and including November 29, 2013. Lone Pine intends to propose a plan of compromise and arrangement in accordance with the restructuring terms previously announced, which will provide for, among other things, the cancellation of all outstanding shares of the Company's common stock, the conversion of US$195 million of 10.375% senior notes plus accrued but unpaid interest into new common shares and a new US$100 million preferred share offering to eligible affected creditors. Lone Pine anticipates filing a proposed plan on or before Nov. 29, 2013, unless otherwise extended. In connection with the CCAA proceedings, on Oct. 9, 2013, the Canadian Court approved a claims procedure order and established an initial claims bar date of Nov. 13, 2013. On Nov. 8, 2013, the Canadian Court granted an order extending the claims bar date from Nov. 13, 2013 to Nov. 27, 2013. About Lone Pine Resources Calgary, Canada-based Lone Pine Resources Inc. is an independent oil and gas exploration, development and production company with operations in Canada. The Company's reserves, producing properties and exploration prospects are located in the provinces of Alberta, British Columbia and Quebec, and in the Northwest Territories. The Company is incorporated under the laws of the State of Delaware. Lone Pine entered bankruptcy protection in Canada on Sept. 25, 2013, under the Companies' Creditors Arrangement Act and received an initial protection order from an Alberta court the same day. Lone Pine Resources simultaneously filed for Chapter 15 protection in Delaware in the United States (Bankr. D. Del. Case No. 13- 12487) to seek recognition of the CCAA proceedings. Lone Pine, LPR Canada and all other subsidiaries of the Company are parties to the CCAA and Chapter 15 proceedings. Lone Pine is being advised by RBC Capital Markets, Bennett Jones LLP, Vinson & Elkins LLP and Richards Layton & Finger P.A. in connection with the restructuring, with Wachtell, Lipton, Rosen & Katz LLP providing independent advice to the Company's board of directors. The Supporting Noteholders are being advised by Goodmans LLP and Stroock & Stroock & Lavan LLP. MDC PARTNERS: Moody's Retains Ratings After $100MM Notes Add-on --------------------------------------------------------------- Moody's Investors Service says MDC Partners Inc. ratings remain unchanged following the announced $100 million add-on to the existing 6.75% senior unsecured notes due 2020 which will increase the note issue to $650 million. The B3 rating on the senior unsecured notes and B2 corporate family rating will remain unchanged. The outlook remains Stable. While the $100 million increase raises the total debt to EBITDA ratio to 6.6x, the company has benefited from strong performance over the last five quarters aided by new business wins and improved operating efficiency. Moody's anticipates that revenue and EBITDA will continue to increase over the rating horizon. MDC and its competitors in the advertising industry will remain sensitive to declines in ad spending, however. The add-on is the third time MDC has raised its debt levels since December of 2012. After minimal acquisition activity since the first quarter of 2012, Moody's anticipates modest sized acquisitions going forward. Moody's also expects MDC to target returning 25% of management defined free cash flow to shareholders. MDC intends to use the proceeds from the add-on notes for general corporate purposes, which could include a redemption of stock appreciation rights for cash as announced on their Q3 2013 earnings call, new acquisitions, deferred acquisition payments, or for additional working capital. MDC PARTNERS: S&P Keeps B- Unsec. Notes Rating Over $100MM Add-on ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its issue-level rating on New York-based advertising holding company MDC Partners Inc.'s unsecured notes due 2020 remains 'B-' following the company's proposal for a $100 million add-on. "The recovery rating on this debt remains '5', indicating our expectation for modest (10% to 30%) recovery for noteholders in the event of a payment default. The company plans to use proceeds for general corporate purposes." "Under our base-case scenario, we expect leverage (including our adjustments for operating leases, earn-outs, and put obligations) could remain above 5x through 2014." "As a result, over the next 12 months, we expect to continue to characterize the company's financial risk profile as "highly leveraged," which includes leverage above 5x, based on our criteria." Elevated financial risk, together with continued economic uncertainty and our assessment of the company's business risk profile as "fair," are key considerations in the 'B' corporate credit rating. Our management and governance assessment is "fair." "Pro forma for the note offering, lease-adjusted debt (including deferred acquisition consideration and put obligations) to EBITDA (before noncash stock compensation, including affiliate distributions and adjustments for deferred acquisition consideration, but after minority interest) was high, at roughly 6.2x as of Sept. 30, 2013. However, debt to EBITDA is down from 8.2x in 2012 as a result of EBITDA growth over the last 12 months." "Our rating outlook is stable, reflecting our expectation that MDC will generate positive discretionary cash flow of roughly $75 million to $100 million in 2014, and that leverage will begin to decrease as EBITDA grows and talent-related spending subsides." "We could raise the rating over the long term if leverage drops to below 4x on a sustained basis, compliance with financial covenants remains above 20%, and the company maintains adequate liquidity and establishes a less aggressive financial policy. We believe the company could achieve these measures in 2015, assuming stronger economic trends and barring a continuation of aggressive debt-financed acquisition activity." "We expect such a scenario would entail continued mid- to high- single-digit percent organic revenue growth and a steady reduction in deferred acquisition-related liabilities." "Conversely, although less likely in our view, we could lower the rating if the company does not continue to generate sustainable positive discretionary cash flow, or if covenant headroom falls below 15% with an expectation of further narrowing, stemming from operating weakness and acquisition or earn-out-related payments." RATINGS LIST MDC Partners Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged MDC Partners Inc. Senior Unsecured $650M* notes due 2020 B- Recovery Rating 5 *Following $100M add-on. MERGE HEALTHCARE: S&P Cuts CCR to CCC on Poss. Covenant Violation ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Chicago-based Merge Healthcare Inc. to 'CCC' from 'B'. The outlook is developing. "At the same time, we lowered our issue-level rating on the company's $270 million senior secured credit facilities, consisting of a $250 million first-lien term loan due 2019 and a $20 million revolving credit facility due 2018, to 'CCC' from 'B+' and revised the recovery rating to '3' from '2'. The '3' recovery rating indicates our expectation for meaningful (50% to 70%) recovery in the event of payment default." "The downgrade to 'CCC' reflects our view that deteriorating operating performance may result in a covenant violation within the next 12 months unless the company amends its covenant schedules or performance improves materially over this period," said Standard & Poor's credit analyst Andrew Chang. "Stronger quarters will drop off the covenant calculation during the December and March quarters, and the covenant steps down in June 2014," added Mr. Chang. The ratings reflect Merge's "vulnerable" business risk profile based on its deteriorating operating performance, continued weak end-market demand, narrow market focus in the health care IT industry, and recent management and board turnover. This is a revision from our previous assessment of "weak." The company has a "highly leveraged" financial risk profile in our assessment, reflecting leverage in the 6x area as of September 2013, and we assess its liquidity as "less than adequate," reflecting the constrained covenant headroom. Merge is a health care IT imaging solutions provider that develops software solutions to automate health care data and diagnostic workflow. Its key products include radiology- and cardiology- related imaging solutions, computer-aided detection for original equipment manufacturers, and solutions to create interoperability between images and electronic health care records. METRO AFFILIATES: Wins First Skirmish With Labor Unions ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that school School bus operator Atlantic Express Transportation Corp. won a skirmish with labor unions four days after its Nov. 4 Chapter 11 filing. According to the report, the fourth-largest school-bus operator in the U.S. explained how the unions exercised rights under the companies' contracts with the New York City Department of Education by persuading the DOE to withhold almost $1.8 million for services provided in September. The withholding was based on the union's contention that the company unilaterally declared an impasse and instituted new contract terms improperly. The DOE told the bankruptcy judge in Manhattan that there were only allegations of improper actions by the company and no rulings to trigger withholding. Consequently, U.S. Bankruptcy Judge Sean Lane signed an order on Nov. 8 telling the department to turn the $1.8 million over to Staten Island, New York-based Atlantic and not make withholdings in future months. The judge is allowing the DOE to withhold almost $2.8 million in November and December to make up for overcharges in the prior school year. Judge Lane will hold another hearing on Dec. 2 to decide whether to halt a lawsuit the unions filed in state court seeking to force compliance with expired contracts. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, first sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. METRO AFFILIATES: Court Issues Order for Delivery of DOE Payments ----------------------------------------------------------------- At the behest of Metro Affiliates, Inc., et al., Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York issued an order enforcing the automatic stay pursuant to Section 362(a) of the Bankruptcy Code. Debtors Amboy Bus Company, Atlantic Queens Bus Corp., and Atlantic Escorts, Inc., sought an enforcement of the automatic stay or, alternatively, obtain an injunction under Section 105(a), in order to: (i) compel the New York City Department of Education to deliver to the Atlantic Debtors payments wrongfully withheld by the DOE from amounts that were due to the Atlantic Debtors on or around October 10, 2013; (ii) prevent the DOE from withholding additional sums from the payments that will be due to the Atlantic Debtors on or around November 10, 2013, and on or around the 10th of each month thereafter; and (iii) stop Local 1181/1061, Amalgamated Transit Union, AFL-CIO, from continuing, with respect to amounts owed to the Atlantic Debtors, an Article 78 proceeding that seeks to require the DOE to withhold amounts due to New York City busing contractors, including the Atlantic Debtors, and to pay those amounts to the Union instead. According to Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, the Atlantic Debtors' survival will be virtually impossible unless the Atlantic Debtors receive all amounts due to them from the DOE. The Atlantic Debtors rely on their monthly income from the DOE to pay their workers, pay for fuel, vehicle insurance, and other operating costs, and to obtain additional necessary liquidity from their lenders. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, previously sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. METRO AFFILIATES: Can Employ Kurtzman as Claims & Noticing Agent ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Metro Affiliates, Inc., et al., to employ Kurtzman Carson Consultants, LLC, as the claims and noticing agent. KCC's consulting services and rates are as follows: Clerical $40 to $60 Project Specialist $80 to $140 Technology/Programming Consultant $100 to $200 Consultant $125 to $200 Senior Consultant $225 to $275 Senior Managing Consultant $295 The firm will also be reimbursed for any necessary out-of-pocket expenses. KCC received $25,000 from the Debtors before the Petition Date as security for the Debtors' payment of obligations under the KCC engagement agreement. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, first sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. METRO AFFILIATES: Schedules Filing Date Extended to Dec. 18 ----------------------------------------------------------- Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York extended until Dec. 18, 2013, the time within which Metro Affiliates, Inc., et al., must file their schedules of assets and liabilities and statements of financial affairs. The Debtors sought extension of their Schedules filing deadline because preparing and finalizing the Schedules and Statements as soon as possible would unnecessarily distract key management and professionals from their efforts to stabilize the Debtors' business operations in the wake of the Chapter 11 filing and their nascent reorganization efforts, including the preservation of creditor and employee relationships. The Debtors assured the Court that creditors and other parties-in-interest will not be prejudiced by the proposed extension of the filing deadline because, even under the extended deadline, the Schedules and Statements would be filed in advance of any claims bar date. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, first sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. METRO AFFILIATES: Has Interim OK to Pay Insurance Obligations ------------------------------------------------------------- Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York gave Metro Affiliates, Inc., et al., interim authority to pay maintain their prepetition insurance policies. The Court also authorized the Debtors to pay prepetition obligations outstanding on account of the Debtors' insurance policies on an interim basis not to exceed an aggregate cap of $1.5 million. Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, relates that the Debtors maintain workers' compensation programs and various insurance programs for liabilities and losses related to, among other things, breach of officers' and directors' duties, general liabilities, umbrella liability, automobile liability, property damage and excess liability. Ms. Beckerman asserts that it is essential that the Debtors maintain their insurance policies as termination of coverage could lead to the violation of applicable law and certain of the Debtors' important contracts, would place additional strain on the Debtors' customers and employees who benefit from the policies, and could subject the Debtors to enormous loss in value caused by accidents, casualty, natural disaster or other unforeseen events during the ordinary course of their business. A hearing to consider entry of a final order will be held on Dec. 2, 2013, at 11:00 a.m. (EST). Objections are due Nov. 22. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, previously sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. MF GLOBAL: Judge Denies Corzine Bid to Dismiss Shareholder Suit --------------------------------------------------------------- Joseph Checkler, writing for Daily Bankruptcy Review, reported that a federal judge on Nov. 12 shot down Jon S. Corzine's bid to dismiss a shareholder lawsuit against him and other former MF Global Holdings Ltd. executives, saying the company told investors it was fine despite "dire signs of mounting crisis." According to the report, in a strongly worded 105-page opinion filed in U.S. District Court in Manhattan, Judge Victor Marrero said the arguments by Mr. Corzine and the other executives amounted to a claim that "stuff happens," or that the company's sudden implosion was the "fateful work of supernatural forces." Judge Marrero's ruling means shareholders, led by the Virginia Retirement System, can continue going after Mr. Corzine, the former MF Global chairman and chief executive, as well as former Chief Operating Officer Bradley I. Abelow, former Chief Financial Officer Henri J. Steenkamp and other former executives, the report said. Also named in the suit, which was filed last year and combines several class actions, are banks and underwriters that worked with MF Global, including units of Goldman Sachs Group Inc., J.P. Morgan Chase & Co., and Citigroup Inc. The suit accuses Mr. Corzine of misleading investors about the risky bets on European sovereign debt the company made, leading to its Oct. 31, 2011, bankruptcy filing, the report said. In seeking dismissal last year, lawyers for Mr. Corzine called the lawsuit "jumbled" and said investors weren't misled. A spokesman for Mr. Corzine didn't immediately respond to a request for comment. While Judge Marrero's decision merely says the suit can continue, he wrote that if the plaintiffs couldn't "make out a plausible claim here, they could not make it anywhere," a riff on the Frank Sinatra song from the film "New York, New York," the report further related. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MI PUEBLO: Seeks to Borrow $1.9 Million From Founder ---------------------------------------------------- Marie Beaudette, writing for DBR Small Cap, reported that California grocery chain Mi Pueblo is seeking to borrow $1.9 million from founder and Chief Executive Juvenal Chavez to keep it afloat while it restructures under Chapter 11 bankruptcy protection. About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MINCO GOLD: Gets NYSE MKT Listing Non-Compliance Notice ------------------------------------------------------- Minco Gold Corporation on Nov. 12 disclosed that it has received notice from the NYSE MKT LLC that if the Company does not adequately address the low selling price of the Company's stock within a reasonable amount of time to the satisfaction of the Exchange, the Company will not satisfy the continued listing standards of the Exchange set forth in Section 1003(f)(v) of the NYSE MKT Company Guide. The Company has not yet determined what action it will take in response to this notice. There can be no assurance that the Company will be able to achieve compliance with the Exchange's continued listing standards within the required time frame. If the Company is not able to regain compliance with the continued listing standards within a reasonable time after the date of the notice, the Company may be subject to delisting procedures as set forth in the Company Guide. About Minco Gold Minco Gold Corporation -- http://www.mincomining.ca-- is a Canadian mining company involved in the direct acquisition and development of high-grade, advanced stage gold properties. The Company owns a 51% equity interest in the Changkeng Gold Project through Guangdong Mingzhong Mining Co., Ltd., the operating company for the Project. The Company also owns a 100% interest in the Longnan projects with 10 exploration permits, located in Gansu Province, China; as well as 13 million shares (approx. 22.00%) of Minco Silver Corporation. MSD PERFORMANCE: Blank Rome Approved as Creditors' Panel Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of MSD Performance, Inc. and its debtor-affiliates obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Blank Rome LLP as counsel, nunc pro tunc to Sept. 17, 2013. As reported in the Troubled Company Reporter on Oct. 25, 2013, Blank Rome will be paid at these hourly rates: Bonnie Glantz Fatell $815 Michael B. Schaedle $635 Josef W. Mintz $375 Partners and Counsel $390-$940 Associates $250-$565 Paralegals $100-$355 Blank Rome will also be reimbursed for reasonable out-of-pocket expenses incurred. 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. The Official Committee of Unsecured Creditors appointed in the case retained Blank Rome LLP as counsel, and Carl Marks Advisory Group LLC as financial advisors. MSD PERFORMANCE: Carl Marks Okayed as Committee's Fin'l. Advisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors of MSD Performance, Inc. and its debtor-affiliates to retain Carl Marks Advisory Group LLC as financial advisors, nunc pro tunc to Sept. 18, 2013. As reported in Troubled Company Reporter on Oct. 25, 2013, the Debtors will pay Carl Marks for its services, a fixed monthly fee "Monthly Advisory fee" at the rate of $50,000 per monthly period beginning Sept. 18, 2013, and for each subsequent monthly period thereafter in which financial advisory services are to be provided. In addition, Carl Marks will also be paid a success fee, which will be earned in full and due upon the substantial consummation of a Chapter 11 plan of reorganization, liquidation or otherwise in the Debtors' Chapter 11 cases, or a sale of substantially all of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code. According to the TCR report, the success fee will be in an amount equal $50,000 in the case where a Plan or 363 Sale is expressly supported by the Committee plus an additional $50,000 earned to be paid as an administrative expense. Carl Marks will also be reimbursed for reasonable out-of-pocket expenses incurred. 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. The Official Committee of Unsecured Creditors appointed in the case retained Blank Rome LLP as counsel, and Carl Marks Advisory Group LLC as financial advisors. MURRAY ENERGY: Moody's Rates New $1.02-Bil. Secured Term Loan 'B1' ------------------------------------------------------------------ Moody's Investors Service affirmed all ratings on Murray Energy Corporation, including the B3 Corporate Family Rating ("CFR"), and assigned new ratings to proposed debt to fund the company's acquisition of certain mining and transportation assets from CONSOL Energy, Inc. for cash consideration of $850 million and the assumption of $2.2 billion in legacy liabilities. The rating outlook is stable. "The rating affirmation balances the clear positive impact on Murray Energy's business profile with the integration risks of a transformational acquisition and the financial risks created by taking on incremental debt and substantive legacy liabilities," said Ben Nelson, Moody's Assistant Vice President and lead analyst for Murray Energy Corporation. Actions: Issuer: Murray Energy Corporation Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD $1020 million Senior Secured Term Loan due 2019, Assigned B1 (LGD2 28%) $400 million Second Lien Senior Secured Term Loan due 2020, Assigned Caa1 (LGD4 69%) $350 million Second Lien Senior Secured Notes due 2021, Affirmed Caa1 (LGD4 69%) Outlook, Stable Rating Rationale: The assigned ratings are subject to Moody's review of the final terms and conditions of the proposed acquisition and financing transactions expected to close in the fourth quarter of 2013. The rating on the existing senior secured term loan is expected to be withdrawn following repayment at closing. Murray Energy intends to raise $1.6 billion of new debt including an undrawn $200 million asset-based revolving credit facility, $1 billion first lien senior secured term loan, and $400 million second lien senior secured term loan. Proceeds will fund the $850 million cash consideration to CONSOL, refinance an existing $350 million term loan, put cash on the balance sheet, and pay transaction-related fees and expenses. The existing $350 million Senior Secured Notes due 2019 will remain in place following a successful consent solicitation and rank pari passu with the new second lien term loan. Moody's estimates pro-forma adjusted leverage in the low 4 times (Debt/EBITDA) excluding planned operating synergies and the high 3 times including expected operating synergies. This represents a modest deleveraging compared to pre-acquisition leverage in the low 4 times. Moody's calculations include adjustments for the capitalization of operating leases and proportionate debt treatment of the UMWA's 1974 Plan using a multiple approach of cash contributions that results an attributed amount well below the company's estimated withdrawal liability at the next contract expiration in 2016. The acquisition sets the stage for positive rating momentum if the company can successfully integrate the acquired assets, manage cash outlays for the acquired legacy liabilities, and demonstrate an ability to generate free cash flow. The acquired assets fit the company's strategy of mining high-heat coals to sell to scrubbed base-load power plants. Adding five new mining complexes reduces the current concern about the operational concentration of the existing assets, and the location of the mines in the northern panhandle of West Virginia near the company's existing three mines in Ohio will provide blending opportunities that could enhance profitability. The increased scale will make the company the largest thermal coal producer in the Northern Appalachia coal basin. On a combined basis, Moody's views favorably the company's market leadership in Northern Appalachia, operational diversity, solid contract positions, low-cost longwall mines, low-cost barge and truck transportation to power plants served, and good liquidity. These factors could support a rating higher than the B3 CFR if the company is able to address its near-term challenges and improve its buffer against its longer-term challenges. Near-term challenges include integrating an acquisition of transformational size and scale, achieving planned operational synergies, and maintaining or reducing cash costs at the acquired mines through the change in ownership. Longer-term challenges include withstanding what Moody's continues to expect will be a difficult environment in the coal industry, harmonizing an acquired workforce that is heavily unionized with an existing workforce that is largely non-union, and avoiding unexpected cash outlays related to the acquired legacy liabilities. Murray Energy will assume the acquired subsidiaries' obligations related to post-retirement benefits, workers' compensation, pneumoconiosis ("black lung"), long-term disability, and the UMWA's 1974 Plan, an industry-wide defined benefit plan that is currently underfunded. The expected cash outlays to fund these liabilities are significant relative to Murray's expected cash flow generation. Moody's expects sufficient EBITDA to cover $120-130 million of cash interest expense, modest cash taxes, and $200-250 million of maintenance capital spending. Free cash generation is likely to remain limited in the near-term as the company completes the integration of the CONSOL assets. The extent to which free cash flow will turn positive in the intermediate term will depend on the company's ability to achieve operational synergies, maintain or reduce cash costs at the acquired mines, and avoid unexpected cash outlays related to the acquired legacy liabilities. Nearly $200 million of cash at closing and undrawn $200 million asset- based revolving credit facility provide good back-up liquidity to cover any unforeseen shortfalls, though Moody's does not expect any usage over the next four quarters due to the elevated cash balances. The stable outlook assumes that funds from operations will exceed maintenance capital requirements and the company will maintain a good liquidity position. Moody's could upgrade the rating with several quarters of successful operations, evidence that the company is on track to achieve planned operational synergies, and expectations for funds from operations to remain well in excess of maintenance capital spending. Increased clarity regarding the company's plans to handle obligations under the 1974 UMWA Pension Plan would also be helpful in considering a positive action. Conversely, Moody's could downgrade the rating in response to a material adverse operational event or expectations for a substantive deterioration in liquidity including deterioration in internal cash flow generation. Murray Energy Corporation is a privately-owned thermal coal mining company founded and controlled by its current chairman, president and chief executive officer, Robert E. Murray, in 1988. Headquartered in St. Clairsville, Ohio, the company generated revenue of $1.3 billion in 2012 and pro-forma for the acquisition, should generate revenue in excess of $3 billion in 2013. NATURAL MOLECULAR: Sec. 341(a) Creditors' Meeting Set for Nov. 27 ----------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Natural Molecular Testing Corp. will be held on November 27, 2013, 10:00 a.m., at US Courthouse, Room 4107. 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. Natural Molecular Testing Corp., which provides molecular diagnostic-testing services, including testing for sexually transmitted diseases and screening and counseling about cystic fibrosis, filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-19298) on Oct. 21, 2013, in Seattle. Hacker & Willig, Inc., P.S., serves as its bankruptcy counsel. The closely held company said assets are worth more than $100 million while debt is less than $50 million. NATURAL MOLECULAR: Bankruptcy Filing Hit GenMark's 3Q Revenue ------------------------------------------------------------- GenMark Diagnostics, Inc., a provider of automated, multiplex molecular diagnostic testing systems, on Nov. 12 reported financial results for the quarter ended September 30, 2013. Revenues for the quarter ended September 30, 2013 were $4.6 million compared with $5.3 million during the third quarter of 2012. The 12% year-over-year decrease in total revenue was attributable to a lack of purchases from Natural Molecular Testing Corporation (NMTC) during the current quarter, offset by significant growth from other customers. NMTC accounted for 66% of total revenues in the quarter ended September 30, 2012 and 26% of total revenues in the quarter ended June 30, 2013. NMTC did not make any purchases in the third quarter of 2013. Reagent revenues for the third quarter declined 22% year-over-year to $4.0 million from $5.1 million. Instrument and other revenues increased by 314% year-over-year to $651,000 from $158,000, due mainly to sales of XT-8 instruments. The Company placed 41 new analyzers during the current quarter to support its base business and removed 50 analyzers from NMTC, the majority of which were placed in 2012, bringing its total installed base to 375, all in end-user laboratories within the U.S. market. "Our base business, which excludes NMTC, demonstrated impressive revenue growth on both a year-over-year and sequential basis, growing by 159% in the third quarter of 2013 compared with the third quarter of 2012, and growing approximately 21% quarter-over- quarter ahead of the flu season. We believe the significant growth of our base business confirms the increasing implementation of our eSensor technology across a growing customer base and validates its unique value proposition in advance of releasing our sample-to-answer NexGen system," stated GenMark's President & CEO Hany Massarany. "On October 2nd, we filed a law suit against NMTC seeking the collection of past due amounts from earlier product sales and for damages resulting from unsatisfied contract purchase commitments. On October 21, NMTC filed a voluntary petition in the United States Bankruptcy Court seeking relief under Chapter 11. As a result, this quarter we have made appropriate adjustments to our financial statements to account for NMTC's bankruptcy filing." Gross profit for the quarter ended September 30, 2013 was $0.5 million, or 11% of revenue, compared with a gross profit of $2.2 million, or 42% of revenue for the same period in 2012. During the current quarter, the Company reserved $0.9 million of inventory made for NMTC and impaired $0.3 million of manufacturing equipment procured to support NMTC's previous purchasing volumes. On a non-GAAP basis, which excludes the effect of NMTC related adjustments during the current quarter, gross profit for the quarter ended September 30, 2013 was $1.7 million, or 36% of revenue. Operating expenses increased $4.3 million to $12.8 million during the third quarter of 2013 compared with the third quarter of 2012. Sales and Marketing expenses increased $3.4 million year-over-year mainly due to a one-time increase in the Company's allowance for doubtful accounts reserve of $2.5 million related to NMTC and continued expansion of the Company's U.S. sales force ahead of the launch of its NexGen system. Research and Development expenses increased $0.9 million due to Company's NexGen platform and assay development activities. On a non-GAAP basis, operating expenses for the third quarter of 2013 were $10.3 million. Loss per share was $0.30 for the third quarter of 2013, compared with a loss per share of $0.20 in the third quarter of 2012. The loss per share in the current quarter included a one-time realized gain of $1.4 million from the sale of preferred stock in a private company that was acquired by a third party in July 2013, as well as $3.6 million in reserves and one-time write-offs due to NMTC. On a non-GAAP as adjusted basis, which excludes the effects of this one-time gain and NMTC related adjustments during the current quarter, the Company's loss per share for the third quarter of 2013 was $0.24. The Company ended the third quarter of 2013 with $112.5 million in cash and investments. The Company intends to continue utilizing its cash balances to invest in new product and menu development, mainly the development of its NexGen platform and related test menu, and for infrastructure improvements and general corporate purposes. "Based on prolonged reimbursement challenges and the recently published CMS rates for the new pharmacogenomics (PGX) test codes, we expect the emerging PGX sector to experience additional downward pressure in the near term. Consequently, we are adjusting our 2013 revenue guidance to approximately $27 million and now expect more modest PGX purchasing patterns in 2014. Despite these short term headwinds, we remain very optimistic about our future," added Mr. Massarany. "Our NexGen development efforts remain on schedule and we continue to be confident that we will bring to market the most competitively differentiated sample- to-answer system. We're on track to complete its development in the second quarter of 2014, and as a result of the excellent progress made by our R&D organization, last week our Board of Directors approved the funding for two additional assay development teams to accelerate our NexGen menu expansion beyond our initial five panels. This week in Phoenix, we will show an advanced prototype of our NexGen system at the Association of Molecular Pathology meeting. This will be the first time future NexGen customers will have an opportunity to review the system and, based on early indications, we expect an excellent response." Year-To-Date 2013 Revenue for the first nine months of 2013 was $21.0 million, compared to $11.0 million for the prior year period, an increase of 90%. Reagent revenue for the first nine months of 2013 was $20.0 million, compared to $10.4 million for the prior year period, and instrument and other revenue for the first nine months of 2013 was $1.5 million compared to $0.5 million for the prior year period. The Company's base business grew by 173% for the nine months ended September 30, 2013 over the previous year. Gross profit for the nine months ended September 30, 2013 was $8.6 million, or 41% of revenue, compared with a gross profit of $4.1 million, or 38% of revenue for the same period in 2012. During the current period, the Company reserved $1.2 million of inventory made for NMTC and impaired $0.3 million of manufacturing equipment procured to support NMTC's previous purchasing volumes. On a non-GAAP basis, gross profit for the nine months ended September 30, 2013 was $10.1 million, or 48% of revenue. Operating expenses increased $11.7 million to $33.2 million during the first nine months of 2013 compared with the first nine months of 2012. Sales and Marketing expenses increased $5.6 million year-over-year mainly due to an increase in the Company's allowance for doubtful accounts reserve of $2.7 million related to NMTC, and additional sales personnel costs. Research and Development expenses increased $6.3 million due to the Company's NexGen platform and assay development activities. On a non-GAAP basis, operating expenses for the nine months ended September 30, 2013 were $30.5 million. Net loss for the first nine months of 2013 was $23.0 million, or $0.69 loss per share, compared to net loss of $17.4 million, or $0.71 loss per share, for the prior year period. The loss per share included a one-time realized gain of $1.4 million from the sale of preferred stock in a private company that was acquired by a third party in July 2013, as well as $4.2 million in reserves and one-time write-offs due to NMTC. On a non-GAAP as adjusted basis, the loss per share for the nine months ended September 30, 2013 was $0.60. About Genmark Diagnostics GenMark Diagnostics -- http://www.genmarkdx.com-- is a provider of automated, multiplex molecular diagnostic testing systems that detect and measure DNA and RNA targets to diagnose disease and optimize patient treatment. Utilizing GenMark's proprietary eSensor(R) detection technology, GenMark's eSensor(R) XT-8 system is designed to support a broad range of molecular diagnostic tests with a compact, easy-to-use workstation and self-contained, disposable test cartridges. GenMark currently markets four tests that are FDA cleared for IVD use: Cystic Fibrosis Genotyping Test, Respiratory Viral Panel, Thrombophilia Risk Test, and Warfarin Sensitivity Test. A number of other tests, including HCV Genotyping, 2C19 Genotyping, and 3A4/3A5 Genotyping are available for research use only. About Natural Molecular Testing Corp. Natural Molecular Testing Corp., which provides molecular diagnostic-testing services, including testing for sexually transmitted diseases and screening and counseling about cystic fibrosis, filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-19298) on Oct. 21, 2013, in Seattle. The closely held company said assets are worth more than $100 million while debt is less than $50 million. NEW SPECTRUM HEIGHTS: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: New Spectrum Heights Inc 14269 Seventh Street Victorville, CA 92395 Case No.: 13-28536 Chapter 11 Petition Date: November 13, 2013 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Hon. Mark S. Wallace Debtor's Counsel: Robert P Goe, Esq. GOE & FORSYTHE, LLP 18101 Von Karman, Ste 510 Irvine, CA 92612 Tel: 949-798-2460 Fax: 949-955-9437 Email: kmurphy@goeforlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,001 to $1 million A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb13-28536.pdf NORTHERN BEEF: Ad Hoc Panel's Motion to Amend DIP Orders Denied --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Dakota has denied the motion of the Ad Hoc Committee of EB-5 Investors for an order amending the Court's Sept. 26, 2013 Final DIP Financing Order regarding the right of creditors to pursue, separately or collectively, derivative claims under Chapter 5 of the Bankruptcy Code against White Oak Global Advisors, LLC, on behalf of the bankruptcy estate, citing, among others, that the Ad Hoc Committee's motion to amend is not the appropriate mechanism for seeking such relief. As related in the Motion to Amend, the DIP Funding Orders authorize a release by the Debtor and the Official Trade Committee of all their claims against White Oak, including Chapter 5 avoidance actions. The DIP Funding Orders also establish a deadline for creditors to, inter alia, file objections to the White Oak claim and to file "complaints respecting ... the validity, extent, priority, avoidability or enforceability" of White Oak's claims. The DIP Funding Orders set such deadline at 90-days after the date that White Oak filed its proof of claim, or Dec. 13, 2013. A copy of the Ad Hoc Committee's Motion is available at: http://bankrupt.com/misc/northernbeef.doc462.pdf As reported in the TCR on Oct. 11, 2013, the U.S. Bankruptcy Court for the District of South Dakota has granted Northern Beef Packers Limited Parnership's final request for authority to obtain secured credit of up to $2,250,000.00 from White Oak Global Advisors, LLC, on the terms and conditions and for the purposes set forth in the motion, the revised stipulation, and the amended budget, except as follows: (1) Paragraph J.(15) of the revised stipulation titled "Limitation on Objections to [Pre-petition] Indebtedness." is modified to provide "... shall have until 90 days after Agent files its proof of claim (collectively, the "Objection Deadline") within which ...."; (2) No provision in the motion or the revised stipulation may alter the terms or application of 11 U.S.C. Sections 507 or 510; and (3) Debtor's use of the authorized funds will not, absent an order from this Court, deviate from the amended budget. About Northern Beef Packers Limited Partnership Northern Beef Packers Limited Partnership, which operates a beef processing facility that opened in October 2012, filed for Chapter 11 relief (Bankr. D.S.D. Case No. 13-10118) on July 19, 2013. Karl Wagner signed the petition as chief financial officer. Judge Charles L. Nail, Jr., presides over the case. The Debtor estimated assets of at least $50 million and debts of at least $10 million. James M. Cremer, Esq., at Bantz, Gosch, & Cremer, L.L.C., serves at the Debtor's counsel. Steven H. Silton, Esq., at Cozen O'Connor serves as co-counsel. Lincoln Partners Advisors LLC serves as financial advisors. The U.S. Trustee has appointed five members to the Official Committee of Unsecured Creditors in the case. Robbins, Salomon & Patt, Ltd. serves as it lead counsel. Patrick T. Dougherty serves as its local counsel. White Oak Global Advisors, LLC, is providing postpetition financing. White Oak has extended a $47 million credit bid for the Debtor's assets. White Oak is the Debtor's largest secured creditor as of July 19, 2013, the petition date, with a disputed claim of over $64 million. NIRVANIX INC: Dell Financial Wants to Reposses Leased Computers --------------------------------------------------------------- Dell Financial Services L.L.C., asks the U.S. Bankruptcy Court for the District of Delaware to terminate the automatic stay in Nirvanix, Inc.'s Chapter 11 cases with respect to personal property subject to the parties' commercial leases. Specifically, DFS requests that the Court: * enter an order terminating the automatic stay to allow DFS to recover its equipment; * grant DFS monthly adequate protection payments; and * grant other and further relief to which it may be entitled. Prepetition, the Debtor leased from DFS certain Dell computer equipment and related product. Under the original schedules, the Debtors monthly payment obligations totaled $381,163, and the Debtor defaulted on the restructuring agreement. According to DFS, cause exist on the termination of automatic stay because, among other things: -- of the prepetition termination of the Debtor's rights under the restructuring agreement; and -- the Debtor has not provided or offered adequate protection of DFS's interest in the equipment. About Nirvanix, Inc. Cloud storage company Nirvanix, Inc., based in San Diego, California, sought protection under Chapter 11 of the Bankruptcy Code on Oct. 1, 2013 (Case No. 13-12595, Bankr. D.Del.). The case is assigned to Judge Brendan Linehan Shannon. The Debtor is represented by Norman L. Pernick, Esq., Marion M. Quirk, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. Cooley LLP serves as the Debtor's special corporate counsel. Arch & Beam Global LLC serves as the Debtor's financial advisor. Epiq Systems Inc. is the Debtor's claims and noticing agent. The Debtor disclosed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. The petition was signed by Debra Chrapaty, CEO. OCWEN FINANCIAL: S&P Raises Issuer Credit Rating to 'B+ ------------------------------------------------------- Standard & Poor's Ratings Services said it raised its issuer credit rating on Ocwen Financial Corp. to 'B+' from 'B'. The outlook is stable. "We also raised our rating on Ocwen's first-lien term loans to 'B+' from 'B'". Ocwen has completed several large purchases of mortgage servicing rights (MSRs) over the past two years, bringing the total unpaid principal balance (UPB) of mortgages serviced to $435 billion as of Sept. 30, 2013, from $102 billion at year-end 2011. "The upgrades reflects that, in our view, the company has now demonstrated a track record of not only onboarding MSRs without any material operational miscues, but also of generating enough EBITDA from these partially debt-financed purchases to maintain its conservative leverage, as measured by debt to EBITDA," said Standard & Poor's credit analyst Stephen Lynch. Ocwen's low leverage (2.3x debt to trailing-12-months EBITDA) remains a strength. While its debt has risen substantially, the company has also reported a large increase in EBITDA on the back of its expanding MSR portfolio. "We expect the company to issue additional debt over the next year to fund new MSR acquisitions and stock repurchases, but we do not expect leverage to rise substantially." Funding has also improved over the past year as the company has sold servicer advances and rights to MSRs to Home Loan Servicing Solutions (HLSS). Ocwen founder William Erbey created HLSS in 2010 expressly so HLSS could purchase MSRs and allow Ocwen to become relatively less balance-sheet intensive. In turn, Ocwen would act more like a subservicer -- holding fewer MSRs on its balance sheet than it otherwise would. "We view this as incrementally positive since it makes the firm's balance sheet less capital intensive. Ocwen receives cash from the sale of MSRs to HLSS while also dramatically lowering the amount of capital it must advance to servicers for delinquent mortgage payments." The stable outlook reflects our view that Ocwen will continue to purchase MSRs to replace portfolio run off, but that it will maintain conservative leverage and build on its track record of successfully onboarding large MSR portfolios." "Our current rating also considers that Ocwen will likely use additional debt, in addition to cash flows, to fund acquisitions and share repurchases," said Mr. Lynch. "We could lower the ratings if the company pursues a more aggressive acquisition strategy that increases leverage materially (leverage is measured by EBITDA relative to debt and interest expense). More specifically, we could downgrade Ocwen if operational miscues or the debt burden created by acquisitions lead to multiple quarterly losses or debt to EBITDA of more than 3.0x." An upgrade is unlikely because of the company's total focus on residential real estate servicing. The potential for an upgrade is also limited by the uncertainty regarding the volume of subprime servicing available once housing markets stabilize. In the longer term, an upgrade would likely depend on the company's ability to diversify its revenue and assets mix while preserving profit margins and credit quality. ONCURE HOLDINGS: Exclusive Plan Filing Period Extended Thu Jan. 13 ------------------------------------------------------------------ Judge Kevin Gross extended OnCure Holdings, Inc., et al.'s exclusive plan filing period through Jan. 13, 2014 and their exclusive plan solicitation period through March 11, 2014. As reported By the Troubled Company Reporter on Oct. 25, 2013, the U.S. Bankruptcy Court for the District of Delaware confirmed Oncure Holdings, et al's Plan of Reorganization on Oct. 3, 2013 but the Debtors filed an Exclusivity Extension Order to preserve their right in the event the Plan is not consummated within the existing Exclusive Periods. About OnCure Holdings Headquartered in Englewood, Colorado, OnCure Holdings, Inc. -- http://www.oncure.com/-- provides management services and facilities to oncology physician groups throughout the country. OnCure Holdings and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 13-11540 to 13-11562) in Wilmington on June 14, 2013. Bradford C. Burkett signed the petition as CEO. On the Petition Date, the Debtors disclosed total assets of $179,327,000 and total debts of $250,379,000. There's at least $15 million owing on a first-lien term loan facility, as well as $210 million on prepetition secured notes. Paul E. Harner, Esq., and Keith A. Simon, Esq., at Latham & Watkins LLP, in New York, serve as the Debtors' lead bankruptcy counsel. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, serves as the Debtors' local Delaware counsel. Kurtzman Carson Consultants is the claims and notice agent. Match Point Partners LLC provides management services to OnCure. The Debtors have signed a deal to sell the business to Radiation Therapy Services Holdings Inc. for $125 million, absent higher and better offers. RTS's offer comprises $42.5 million in cash (plus covering certain expenses and subject to certain working capital adjustments) and up to $82.5 million in assumed debt. Secured noteholders are supporting the RTS deal. Millstein & Co., Kirkland & Ellis LLP, Alvarez & Marsal and Deloitte advise Radiation Therapy in connection with the transaction. Promptly before the bankruptcy filing, the Debtors entered into a restructuring support agreement with the members of an ad hoc committee of its secured notes, constituting 100% of the lenders under the first lien term loan credit agreement and approximately 73% of the secured notes, pursuant to which they have agreed to support a stand-alone restructuring of the Debtors, subject to an auction process for a sale of substantially all of the Debtors' assets or the equity of the reorganized Debtors pursuant to a chapter 11 plan. Roberta A. DeAngelis, U.S. Trustee for Region 3 notified the Court that she was unable to appoint an official committee of unsecured creditors due to insufficient response from creditors. ORE HOLDINGS: Approves Steel Partners Debt-for-Equity Exchange -------------------------------------------------------------- Ore Holdings, Inc. on Nov. 12 disclosed that its board of directors, following an evaluation of strategic alternatives, has approved an agreement under which the company will issue newly created convertible preferred shares to Steel Partners, Ltd., in exchange for the cancellation of a 12% secured promissory note, pursuant to an exchange proposal made by privately-held Steel Partners, Ltd. Principal, plus accrued but unpaid interest, on the promissory note currently totals $6,031,371, but Ore Holdings confirmed that it would be unable to meet a minimum net worth covenant as of the end of the current fiscal year. "Ore Holdings faced a default event at December 31, 2013, per terms of the promissory note," said J. Stark Thompson, chairman of the special committee of independent Ore Holdings directors formed to evaluate the Steel Partners, Ltd. exchange proposal. "Following its review, which included a fairness opinion provided by independent valuation firm Cullum Advisors, the committee concluded that approving the transaction is the best course of action for Ore and its shareholders. "Consummation of the exchange now, while the proposal is at hand, allows the company to preserve shareholder value, rather than face bankruptcy or liquidation, and provides shareholders with the opportunity to continue to participate in the company's future investments," Mr. Thompson said. "After exploring all of the alternatives, the independent committee concluded that a sale or refinancing were not viable options for shareholders at this time," he added. In connection with the agreement, the Ore Holdings board has authorized the company to exchange the promissory note and the accrued but unpaid interest for shares of newly created Series A Preferred Stock of the corporation at a price per share of $6.00 for an aggregate number of 1,005,228 shares. The preferred shares are convertible into shares of Ore Holdings common stock at a forty-to-one ratio and will participate on equal footing with the common shares in any dividends, or upon a liquidation of the company. The number of shares to be issued in the exchange was based on a $0.15 average trading price over a 30-day period, divided into the total amount outstanding under the note. The preferred shares were created since the number of authorized common shares of Ore Holdings was not sufficient to meet the exchange ratio on that basis. Following the exchange, Ore Holdings will have positive stockholders' equity of $3.8 million and no long-term debt. The company will have 8,663,519 common shares outstanding and a total of 1,005,228 Series A Preferred Stock, convertible into 40,209,140 shares of common stock, outstanding. Assuming full conversion of the Series A Preferred, Ore will have 48,872,659 of common stock equivalent shares. Following the exchange, Steel Partners, Ltd. will have no further rights under the note, which will be cancelled. On an as- converted basis, Steel Partners, Ltd.'s share of the outstanding equity in the company will increase to 90.6% from 47.1%. The transaction is expected to be completed on or about November 12, 2013. About Ore Holdings Ore Holdings -- http://www.oreholdings.com-- is a management company focused on strategic investments aimed at enhancing the value of the entities within its portfolio. ORMET CORP: Steelworkers Urge Ohio Governor to Reopen Smelter ------------------------------------------------------------- Jacqueline Palank, writing for DBR Small Cap, reported that union workers are urging Ohio's governor to save Ormet Corp.'s aluminum smelter there, warning that hundreds of jobs are at risk. According to the report, unlike Ormet's Louisiana facility, which has funding to continue operating until it closes a sale, the company's Ohio smelter shut down and doesn't have a buyer waiting in the wings. Now, the United Steelworkers Union is seeking signatures for a petition to request that Ohio Gov. John Kasich get involved and help restart operations at the Hannibal, Ohio, facility, which employed more than 600 people, the report related. Ormet shut down the smelter on Oct. 4 after failing to negotiate lower electricity rates and after the state's utility regulator, the Public Utilities Commission of Ohio, didn't grant full approval to Ormet's plan to keep the smelter up and running while it transitioned to a natural gas power-generation facility. The union wants Gov. Kasich, a Republican who served in the U.S. Congress for 18 years, to bring PUCO and electricity supplier American Electric Power Co. back to the bargaining table to negotiate a deal that will allow the Hannibal facility to resume full operations, the report said. "Our union, Ormet management and creditors worked together in the bankruptcy proceedings to reduce the company's financial liabilities by nearly $300 million," USW International President Leo W. Gerard said on Nov. 12 in a statement, the report further related. "It's time for the governor to make sure PUCO and AEP do their parts as well." Multimedia Campaign The United Steelworkers (USW) on Nov. 12 launched a multimedia campaign via the web site, www.saveohiojobs.org, seeking elected officials, community leaders and members of the general public to sign onto a statement calling for Ohio Gov. John Kasich to use the power of his office to save over 1,000 family supporting, community sustaining jobs at Ormet's smelter in Hannibal. USW International President Leo W. Gerard said that Kasich can and should intervene by bringing the Public Utilities Commission of Ohio (PUCO), American Electric Power (AEP) and Ormet back to the table to negotiate a resolution that will allow the facility to resume full operations. "Our union, Ormet management and creditors worked together in the bankruptcy proceedings to reduce the company's financial liabilities by nearly $300 million," Mr. Gerard said. "It's time for the governor to make sure PUCO and AEP do their parts as well." USW District 1 Director David McCall said that a recent report projects potential net regional job losses of over 3,000 amounting to nearly $238 million in lost compensation if Mr. Kasich allows the smelter to close, which would in turn cost the state $9 million annually in lost tax revenue and millions more for unemployment benefits, retraining, and social services. "We encourage everyone to help send the governor the message that Ohio simply cannot afford to allow AEP to drive Ormet into liquidation," Mr. McCall said. "The impact of another catastrophic job loss will devastate these communities." USW Local 5724 in Clarington earlier on Nov. 12 hosted a preview of the union's "Save Ohio Jobs" video, now available online at www.saveohiojobs.org, to support the union's campaign to restart the smelter. The USW represents 850,000 men and women employed in metals, mining, pulp and paper, rubber, chemicals, glass, auto supply and the energy-producing industries, along with a growing number of workers in public sector and service occupations. 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 emerged from a prior bankruptcy in April 2005. Lender Wayzata Investment Partners LLC is among existing owners. Others are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund. In the 2013 case, 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. PATRIOT COAL: Selling Western Kentucky Coal Interests to Alliance ----------------------------------------------------------------- Patriot Coal Corp., et al., ask the U.S. Bankruptcy Court for the Eastern District of Missouri for authorization to enter an agreement with Alliance Resource Properties, LLC, and Alliance Resource Partners, L.P., to convey their interests in certain surplus owned and leased coal reserves in Western Kentucky for $6.5 million in up-front cash consideration along with future royalty payments. The Debtors estimate that the Alliance Transaction will potentially provide between $11.1 million and $15 million of aggregate value, on a discounted basis, to the Debtors and their estates. The Debtors tell the Court that although they believe that the Alliance Transaction is being conducted in the ordinary course of business, the Debtors are seeking court approval out of an abundance of caution. The motion is scheduled for hearing on Nov. 19, 2013, at 10:00 a.m. Any response or objection to the motion must be filed with the Court by 9:00 a.m. on Nov. 18, 2013. A Summary of the Alliance Transaction is available at: http://bankrupt.com/misc/patriotcoal.doc4986.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. Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. PATRIOT COAL: Court Approves Entry Into Settlement With Arch Coal ----------------------------------------------------------------- On Nov. 7, 2013, the U.S. Bankruptcy Court for the Eastern District of Missouri approved Patriot Coal Corp., et al.'s settlement agreement with Arch Coal, Inc. Upon the occurrence of the Effective Date, the Debtors and each of their respective estates fully and forever release and will be deemed to have fully and forever released Arch and its current and former professionals, employees, advisors, officers, directors, agents, predecessors, and successors (not including ArcLight Capital Partners, LLC, or its subsidiaries, affiliates, or managed entities) from any and all Causes of Action, including, without limitation, those Causes of Action based on avoidance liability under federal or state laws, veil piercing or alter-ego theories of liability, contribution, indemnification and joint liability or otherwise, and such releases will be binding on any trustees or successors to the Debtors. Arch will have (i) allowed unsecured claims in the aggregate amount of $95 million as follows: (a) Clerk of the Court Claim No. 1649-1 (Claims Agent Claim No. 2153) will be allowed as an unsecured claim in the amount of $80.5 million against Magnum Coal Company LLC and (b) Clerk of the Court Claim No. 1642-1 (Claims Agent Claim No. 2149) will be allowed as an unsecured claim in the amount of $14.5 million against Robin Land Company, LLC, and (ii) an allowed administrative expense claim of $1,131,398.45 against Patriot Coal Corporation, with corresponding claim numbers to be assigned by the Clerk of the Court and the Debtors' claims agent, respectively and, upon the Effective Date, the Debtors' claims agent and the Clerk of the Court are, as applicable, authorized and directed to amend the Debtors' claims register accordingly. Upon the occurrence of the Effective Date, Arch (i) fully and forever releases and will be deemed to have fully and forever released the Debtors and their current and former professionals, employees, advisors, officers, directors, agents, predecessors, and successors from any and all Causes of Action including, but not limited to, any counterclaims or defenses asserted by or that could be asserted by Arch in the STB Adversary Proceeding, and (ii) irrevocably withdraws and will be deemed to have withdrawn irrevocably any and all proofs of claim filed against the Debtors in the Chapter 11 Cases other than the Allowed Unsecured Claims and the Allowed Administrative Expense Claim, including, without limitation, (a) Clerk of the Court Claim No. 1638-1 (Claims Agent Claim No. 2143) asserting an administrative expense claim in the amount of $614,634.56 and (b) Clerk of the Court Claim No. 1639-1 (Claims Agent Claim No. 2144), an administrative claim that has been allowed in the amount of $13,500.00, and, upon the Effective Date, such proofs of claim are deemed to be disallowed with prejudice without further order of this Court, and the Debtors' claims agent and the Clerk of the Court are authorized and directed to amend the Debtors' claims register accordingly. Pursuant to Sections 105(a) and 363(f) of the Bankruptcy Code, upon the occurrence of the Effective Date and Arch's payment of $16 million to Patriot, the South Guffey Reserve will be deemed to be transferred to Arch, free and clear of any and all liens, claims and interests of all persons with any interest in, to and with respect to the South Guffey Reserve, whether arising prior to, during or subsequent to the Debtors' Chapter 11 cases or imposed by agreement, understanding, law, equity or otherwise; provided, however, that nothing in the Order will affect the rights of the Debtors and Arch under the Settlement Agreement. A complete text of the Order, including the Terms of the Arch Settlement, is available at: http://bankrupt.com/misc/patriotcoal.doc4962.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. Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. A Third Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement was filed on Nov. 4, 2013. PATRIOT COAL: Court Approves Peabody Settlement ----------------------------------------------- On Nov. 7, 2013, the U.S. Bankruptcy Court for the Eastern District of Missouri approved Patriot Coal Corp., et al.'s Settlement with Peabody Energy Corporation, the United Mine Workers of America, on behalf of itself and in its capacity as authorized representative of the UMWA Employees and the UMWA Retirees (the "Peabody Settlement"}. A copy of the Order, including the terms of the Peabody Settlement Agreement is available at: http://bankrupt.com/misc/patriotcoal.doc4963.pdf As reported in the TCR on Oct. 18, 2013, the Peabody Settlement is one of three agreements that are the cornerstones of the Debtors' plan of reorganization. "Together with the Arch Settlement and the rights offerings backstopped by Knighthead, the Peabody Settlement will provide the Debtors with critically-needed cash and credit support that will position the Debtors to emerge from bankruptcy. Moreover, the Peabody Settlement will provide hundreds of millions of dollars in funding for the Patriot Retirees Voluntary Employee Benefit Association (the 'VEBA'), the trust established by the UMWA to provide healthcare benefits for thousands of retirees and their families. Although the Debtors and the UMWA signed a new collective bargaining agreement in August, the agreement left open the question of how the VEBA would be funded, and the Peabody Settlement addresses this final contingency. By resolving all claims between and among the Debtors, Peabody and the UMWA, the Peabody Settlement brings to a close the significant pending and potential litigation between these parties in a manner that will allow the Debtors to emerge from bankruptcy and preserve thousands of jobs for the UMWA Employees and others, while helping the UMWA Retirees continue to receive meaningful healthcare benefits." "Under the settlement, Peabody shall pay an aggregate amount of $90 million to the VEBA and Debtors. Peabody shall also pay the VEBA the following amounts: $75 million on Jan. 2, 2015, $75 million on Jan. 2, 2016, and $70 million on Jan. 2, 2017. On the effective date of the Debtors' Plan of Reorganization, Peabody shall (i) post a $41.525 million letter of credit to secure the benefits of the retirees covered by the Coal Act Assumption Agreement; (ii) replace, either by letter of credit or surety, $15 million dollar cash collateral posted by Patriot Coal for Black Lung Act liabilities and (iii) post $84 million in letters of credit to replace letters of credit currently posted by the Debtors. 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. Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. A Third Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement was filed on Nov. 4, 2013. PATRIOT COAL: Court Approves Amendments to VFA and MOU with UMWA ---------------------------------------------------------------- On Nov. 7, 2013, the U.S. Bankruptcy Court for the Eastern District of Missouri entered a supplemental order approving, pursuant to 11 U.S.C. Sections 363(b), 1114(e) and 105(a) and Fed. R. Bankr. P. 9019(a), (a) an amendment to the VEBA Funding Agreement with the United Mine Workers of America, (b) an amendment to the Memorandum of Understanding with the United Mine Workers of America and (c) waiver of the fourteen-day stay otherwise imposed by Rule 6004(h) of the Bankruptcy Rules on the immediate effectiveness of the Supplemental UMWA Settlement Order. As explained in the Motion for Supplemental Order approving the Amendments, the VFA Amendment and the MOU Amendment preserve the structure of the UMWA Settlement and do not alter the previously approved settlements and compromises contained therein. The UMWA Settlement Order [D.E. 4511] will be deemed supplemented by this Order and will continue in full force and effect. A copy of the UMWA Settlement Order is available at: http://bankrupt.com/misc/patriotcoal.doc4511.pdf A copy of the Motion for Supplemental Order authorizing the VFA Amendment and the MOU Amendment is available at: http://bankrupt.com/misc/patriotcoal.doc4801.pdf A copy of the Supplemental Order approving the VFA Amendment and the MOU Amendment is available at: http://bankrupt.com/misc/patriotcoal.doc4964.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. Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. A Third Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement was filed on Nov. 4, 2013. PATRIOT COAL: Secures Consents for Conversion of Credit Facility ---------------------------------------------------------------- Patriot Coal Corporation on Nov. 12 disclosed that it has secured the required consents from its lenders to transfer a portion of the Company's current letter of credit facility into a new $201 million letter of credit facility with a five-year term. Additionally, the Company is preparing to commence syndication of a $250 million term loan facility and a $125 million asset-backed revolving loan facility. Barclays will serve as Lead Left Arranger and Bookrunner for the term loan facility, with Deutsche Bank acting as Joint Lead Arranger and Bookrunner. Deutsche Bank will serve as Left Lead Arranger and Bookrunner for the asset-backed revolving loan facility, with Barclays acting as Joint Lead Arranger and Bookrunner. The Company expects to launch the syndication of these facilities on November 14 with the expected closing of the facilities concurrent with Patriot's emergence from bankruptcy, expected prior to the end of 2013. "These exit finance facilities are the last critical step in Patriot's emergence from bankruptcy, and our lenders' support is an endorsement of our plan of reorganization," commented Patriot President and Chief Executive Officer Bennett K. Hatfield. "Funding provided by the credit facilities will enable us to exit from Chapter 11 as a strong, well-capitalized company." The financing agreements are subject to typical conditions, including, among others, approval by the Bankruptcy Court, completion of definitive financing documentation, and successful syndications in the loan markets. 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. Houlihan Lokey 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 Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. PEREGRINE FINANCIAL: Broker Sues US Bank Over $200-Mil. Theft ------------------------------------------------------------- Law360 reported that commodities broker Fintec Group Inc. hit U.S. Bank NA with a proposed class action in Illinois federal court on Nov. 12, accusing the bank of helping to cover up a former Peregrine Financial Group CEO's misuse of over $200 million in customer funds. According to the report, the suit, brought on behalf of companies that had independent introducing broker agreements with the now- bankrupt Peregrine, alleges that due to Peregrine's illicit actions, the broker companies were denied commodities and futures commissions they were entitled to and lost security deposits entrusted with Peregrine. The case is Fintec Group, Inc. v. U.S. Bank, N.A., Case No. 1:13- cv-08076 (N.D. Ill.). About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PHYSIOTHERAPY ASSOCIATES: Moody's Cuts PDR to 'D' on Ch. 11 Filing ------------------------------------------------------------------ Moody's Investors Service downgraded Physiotherapy Associates Holdings, Inc.'s Probability of Default Rating to D-PD from Ca- PD/LD. The downgrade was prompted by Physiotherapy's November 12, 2013 announcement that it filed for a pre-packaged Chapter 11 bankruptcy protection. Concurrently, Moody's confirmed all other existing ratings on the company. This rating action concludes the ratings review on Physiotherapy initiated on April 4, 2013. The outlook is stable. The following rating was downgraded and will be subsequently withdrawn: Probability of Default Rating to D-PD from Ca-PD/LD The following ratings are confirmed and will be subsequently withdrawn: Corporate Family Rating at Ca $210 million senior unsecured notes at Ca (LGD 4, 66%) Ratings Rationale: Moody's will subsequently withdraw all ratings due to Physiotherapy's bankruptcy filing. For more information, please refer to Moody's Withdrawal Policy on moodys.com Physiotherapy provides outpatient physical therapy services, such as general orthopedics, spinal care and neurological rehabilitation. The company also provides orthotics and prosthetics services. PITTSBURGH CORNING: Insurer's Bid to Nix Plan Orders Denied ----------------------------------------------------------- Mount McKinley Insurance Company and Everest Reinsurance Company filed a Motion to Reconsider the Revised Memorandum Opinion Setting Forth Findings of Fact and Conclusions of Law Regarding Confirmation of the Modified Third Amended Plan of Reorganization as Modified Through May 15, 2013, and the Asbestos Permanent Channeling Injunction filed on May 24, 2013, and the Final Order Confirming Modified Third Amended Plan of Reorganization as Modified Through May 15, 2013, and, Pursuant to 11 U.S.C. Sec. 524(g), Issuing Asbestos Permanent Channeling Injunction, issued in the Chapter 11 case of Pittsburgh Corning Corporation. In a memorandum opinion dated Nov. 12, 2013, Judge Thomas P. Agresti of the United States Bankruptcy Court for the Western District of Pennsylvania found that, except with regard to clarification of the scope of the Injunction, Mt. McKinley has failed to meet the exacting standard of its burden of proof as to reconsideration of the RMO, the Confirmation Order, and the other related orders. The Court did not find that Mt. McKinley has met its burden of showing a clear error of law or manifest injustice. According to Judge Agresti, the arguments raised by Mt. McKinley are better characterized as disagreements with the conclusions reached by Bankruptcy Judge Fitzgerald in the RMO and the Confirmation Order. Accordingly, Judge Agresti granted Mt. McKinley's motion in one limited part and denied in all other respects. The case is IN RE: PITTSBURGH CORNING CORPORATION, Chapter 11, Debtor relating to MT. McKINLEY INSURANCE: COMPANY and EVEREST REINSURANCE COMPANY, Movants v. PITTSBURGH CORNING CORPORATION, Respondent, CASE NO. 00-22876-TPA (W.D. Pa.). A full-text copy of Judge Agresti's Decision is available at http://is.gd/qwxOEwfrom Leagle.com. James Restivo, Esq., -- jrestivo@reedsmith.com -- at Reed Smith LLP, in Pittsburgh, Pensylvania, for the Debtor/Respondent. Tony Draper, Esq. -- tdraper@wwmlawyers.com -- at Walker Wilcox Matousek LLP, for Mt. McKinley Insurance Company and Everest Reinsurance Company. Peter Lockwood, Esq. -- plockwood@capdale.com -- at Caplin & Drysdale, for Asbestos Claimants' Committee. Justin T. Romano, Esq., for Garlock Sealing Technologies, LLC. Ed Harren, Esq., Representative of Future Claimants. David Lampl, Esq. -- dlampl@leechtishman.com -- at Leech, Tishman, Fuscaldo & Lampl, LLC, for the Committee of Unsecured Trade Creditors. David McConigle, Esq., for PPG Industries, Inc. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. Judge Thomas Agresti handles the bankruptcy case. Reed Smith LLP serves as counsel and Deloitte &Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin&Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin&Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic& Scott LLP as his counsel, Young Conaway Stargatt& Taylor, LLP, as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. The Company's balance sheet at Sept. 30, 2012, showed $29.41 billion in total assets, $7.52 billion in total liabilities and $21.88 billion in total equity. QUALITY HOME: S&P Hikes CCR to 'B-' on Proposed Financing --------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on Quality Home Brands Holdings LLC (QHB) to 'B-' from 'CCC' and assigned a stable outlook. "At the same time, we assigned our 'CCC+' issue-level rating to QHB's proposed $160 million first-lien credit facility due 2018. The recovery rating is '5', indicating our expectation of a modest (10%-30%) recovery in the event of a payment default." "The upgrade reflects the improved debt maturity profile following the proposed transaction, in addition to improved operating performance despite the ongoing weak, but slowly recovering, U.S. residential housing market," said Standard & Poor's credit analyst Stephanie Harter. The new capital structure also includes a $50 million asset-based lending facility (ABL) due 2018 (unrated), $70 million second-lien credit facility due 2018 (unrated), and a $40 million unsecured HoldCo facility due 2019 (unrated). "We will withdraw the ratings on QHB's existing $20 million ABL due 2014, $105.9 million first-lien payment-in-kind due 2014, and $125.6 million first-lien due 2014, following the full repayment of these facilities upon the close of the transaction. Pro forma for the refinancing, approximately $340 million of total adjusted debt will be outstanding." "Our ratings reflect QHB's "highly leveraged" financial risk profile and "vulnerable" business risk profile. The stable outlook reflects our expection for QHB to continue to gradually improve its operating performance, reduce leverage, and maintain adequate liquidity, including 15% or greater EBITDA cushion on its financial covenants. REEVES DEVELOPMENT: Plan Outline Hearing Continued to Nov. 14 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana has further continued until Nov. 14, 2013, at 10:30 a.m., the hearing to consider the adequacy of the Disclosure Statement explaining Reeves Development Company LLC's Chapter 11 Plan. As reported in the Troubled Company Reporter on March 27, 2013, the Plan provides that on the effective date, all allowed accrued interest calculated at the non-default contractual rate of 4% per annum plus any amounts allowed by the Court will be capitalized and added to the outstanding principal balance due under the note issued by Iberia Bank. The maturity of the Iberia Note will be extended to 60 months from the Effective Date. The Debtor will then repay the New Principal Balance with interest accruing at the non-default contractual rate of 4% per annum from the Effective Date. Holders of allowed secured vendor claims will receive quarterly interest payments equal to 2% per annum on the outstanding principal balance, plus an amount equal to the claim holders' pro rata share as to the total allowed outstanding principal balances of the total claims of an amount equal to $1,500 per acre for each acre of land sold by the Debtor. Branch Banking and Trust has agreed to a settlement of its unsecured claims against the Debtor in exchange for certain concessions from the Debtor's affiliated company, Houma Dollar Partners, LLC. In exchange for these concessions, the Debtor has agreed to forgo any payments due from Houma Dollar Partners. The arrangement is subject to court approval in the bankruptcy case of Houma Dollar Partners, LLC Case No. 12-20649. Holders of allowed general unsecured claims, which class of claims includes potential contract offset claims of $152,552, will be paid quarterly interest payments equal to 2% of the outstanding balance of the approved claim. The holder of the subordinated claim of Reeves Commercial Properties, LLC, agrees that it will not receive any payments for its claims, until all other approved claims under the Plan have been paid in full. Equity holders have likewise agreed to forgo any payments under the Plan until all creditors have received principal payments totaling 50% of the approved balance as of the effective date. Any payments to Equity holders allowed under the Plan will be limited to an amount equal to the tax liability passed through to the equity holders by the Debtor. A full-text copy of the Disclosure Statement dated Feb. 27, 2013, is available for free at http://bankrupt.com/misc/REEVESds0227.pdf About Reeves Development Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. Bankruptcy Judge Robert Summerhays oversees the case. Arthur A. Vingiello, Esq. -- avingiello@steffeslaw.com -- at Steffes, Vingiello & McKenzie, LLC, in Baton Rogue, Louisiana, represents the Debtor as counsel. Reeves Development scheduled assets of $15,454,626 and liabilities of $20,156,597 as of the Petition Date. Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case No. 12-21009) also sought court protection. RESERVOIR EXPLORATION: Liquidating Plan Incorporates Parent Deal ---------------------------------------------------------------- Reservoir Exploration Technology, Inc., filed a plan of liquidation and accompanying disclosure statement the day it filed for bankruptcy with the U.S. Bankruptcy for the Northern District of Texas, Fort Worth Division. The Plan incorporates a settlement and compromise with the liquidator on behalf of parent Reservoir Exploration Technology ASA, under which RXT ASA has agreed to expeditiously liquidate the Debtor's Receivable Asset -- which is the Debtor's aliquot share of a receivable owed by Shell E&P Ireland Limited in the total amount of $10.8 million -- and other unliquidated intercompany receivables by taking an assignment of the Debtor's interests in these assets and providing immediate Plan funding to the Debtor to ensure its ability to presently propose and perform its Plan. Specifically, under the Settlement, RXT ASA agrees to: (i) in exchange for an assignment of all of the Debtor's interests in the Receivable Asset and any other intercompany receivables, act as the Plan Funder, and pay to the Liquidating Trust the Plan Funding in the amount of $630,000, to allow the Liquidating Trustee to pay the costs of administration of the Liquidating Trust and make distributions called for under the Plan; and (ii) in connection with same, subordinate its Claim against the Debtor, which the Debtor has assessed at a value of not less than approximately $18.5 million, to all general, Allowed Unsecured Claims, to efficiently and equitably resolve any disputes related to the allowability or treatment of RXT ASA's Claim without the need for undue delays or unnecessary litigation expense, and critically, to ensure the maximization of distributions to non-insider creditors. According to the Debtor's proposed counsel, Joseph J. Wielebinski, Esq. -- jwielebinski@munsch.com -- at Munsch Hardt Kopf & Harr, P.C., in Dallas, Texas, absent the RXT ASA Settlement, the Plan Funding is not available to the Estate and Creditors of the Estate will not have the benefit of RXT ASA's agreement to subordinate its $18.5 million Claim against the Estate, which Claim, to the extent Allowed, would vastly dilute recoveries and distributions on account of other General Unsecured Claims that are Allowed against the Estate. Although if the RXT ASA Settlement is not approved the Estate would retain the Debtor's interests in the Receivable Asset and its intercompany claims instead of assigning these to RXT ASA, the Receivable Asset is currently in dispute, the subject of potential litigation, and the intercompany receivables have a questionable and unliquidated value because these are owed by insolvent affiliates that are in the process of liquidating their affairs, Mr. Wielebinski asserts. Under the Liquidating Plan, Holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Class 1 ? Allowed Priority Non-Tax Claims, Class 2 ? Secured Tax Claims, Class 3 ? Allowed Other Secured Claims, and Class 4 ? Allowed General Unsecured Claims are estimated to recover 100 cents on the dollar. Holders of Class 5 ? Subordinated Claims, with an estimated allowable claim of $18,544,591, will be paid after satisfaction of Allowed Claims in senior classes. Holders of Class 6 ? Equity Interests will recover nothing. A full-text copy of the Disclosure Statement dated Nov. 5, 2013, is available at http://bankrupt.com/misc/RESERVOIRds1105.pdf About Reservoir Exploration Reservoir Exploration Technology, Inc., a provider of seismic data and related geophysical services to the oil and gas industry and specializing in multi-component sea-floor acquisition of seismic data, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 13-45148) on Nov. 5, 2013. The case is assigned to Judge Michael Lynn. The Debtor's parent, Reservoir Exploration Technology ASA, filed for bankruptcy protection under the laws of Norway on June 13, 2013. Mr. Jon Skjorshammer of The Selmer Law Firm, with offices in Oslo, Norway, has been appointed by the Norwegian bankruptcy court as the liquidator for RXT ASA in the Parent's Foreign Bankruptcy Case. The Debtor's proposed counsel are Jay Ong, Esq., Joseph J. Wielebinski, Esq. -- jwielebinski@munsch.com -- and Thomas D. Berghman, Esq. -- tberghman@munsch.com -- at Munsch Hardt Kopf & Harr, P.C., in Dallas, Texas. The petition was signed by Jason Rae, chief restructuring officer. The Debtor's Schedules of Assets and Liabilities disclosed $13,660,336 in assets and $18,823,697 in liabilities. RESERVOIR EXPLORATION: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Reservoir Exploration Technology, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, schedules of assets and liabilities disclosing the following: Assets Liabilities ----------- ----------- A. Real Property $0 B. Personal Property 13,660,336 C. Property Claimed as Exempt N/A D. Creditor Holding Secured Claim $0 E. Creditors Holding Unsecured Priority Claims 278,593 F. Creditors Holding Unsecured Nonpriority Claims 18,545,103 ----------- ----------- TOTAL $13,660,336 $18,823,697 About Reservoir Exploration Reservoir Exploration Technology, Inc., a provider of seismic data and related geophysical services to the oil and gas industry and specializing in multi-component sea-floor acquisition of seismic data, sought protection under Chapter 11 of the Bankruptcy Code on Nov. 5, 2013 (Case No. 13-45148, Bankr. N.D. Tex.). The case is assigned to Judge Michael Lynn. The Debtor's parent, Reservoir Exploration Technology ASA, filed for bankruptcy protection under the laws of Norway on June 13, 2013. Mr. Jon Skjorshammer of The Selmer Law Firm, with offices in Oslo, Norway, has been appointed by the Norwegian bankruptcy court as the liquidator for RXT ASA in the Parent's Foreign Bankruptcy Case. The Debtor's proposed counsel are Jay Ong, Esq., Joseph J. Wielebinski, Esq. -- jwielebinski@munsch.com -- and Thomas D. Berghman, Esq. -- tberghman@munsch.com -- at Munsch Hardt Kopf & Harr, P.C., in Dallas, Texas. The petition was signed by Jason Rae, chief restructuring officer. The Debtor's Schedules of Assets and Liabilities disclosed $13,660,336 in assets and $18,823,697 in liabilities. RESERVOIR EXPLORATION: Taps Munsch Hardt as Bankruptcy Counsel -------------------------------------------------------------- Reservoir Exploration Technology, Inc., seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to employ Munsch Hardt Kopf & Harr, P.C., as general bankruptcy counsel. Munsch Hardt's hourly rates range from $695 to $310 per hour for shareholders, $365 to $225 per hour for associates, and $260 to $150 per hour for paralegals. The firm's hourly rates for the attorneys and paraprofessionals who it anticipates will most likely be working on the bankruptcy case are: Joseph J. Wielebinski, Esq. $635 Jay H. Ong, Esq. $385 Thomas D. Berghman, Esq. $240 Audrey Monlezun, Paralegal $200 The firm will be reimbursed for any necessary out-of-pocket expenses. Mr. Ong, a shareholder at Munsch Hardt Kopf & Harr, P.C., assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Prior to the Petition Date, the Debtor paid Munsch Hardt $44,739 for legal fees and expenses incurred in connection with the Debtor's planning and preparation of and for the Bankruptcy Case, and has further paid Munsch Hardt a retainer to secure the payment of its fees and expenses incurred in this case, of $60,000. As of the Petition Date, Munsch Hardt applied $39,154 of the retainer for additional legal fees and expenses incurred in connection with the Debtor's planning and preparation of and for this Bankruptcy Case. Accordingly, as of the Petition Date, $20,845 remains in retainer, which Munsch Hardt will continue to hold and not apply except as authorized by the Court. A hearing on the employment application is set for Dec. 5, 2013, at 1:30 p.m. (CST). About Reservoir Exploration Reservoir Exploration Technology, Inc., a provider of seismic data and related geophysical services to the oil and gas industry and specializing in multi-component sea-floor acquisition of seismic data, sought protection under Chapter 11 of the Bankruptcy Code on Nov. 5, 2013 (Case No. 13-45148, Bankr. N.D. Tex.). The case is assigned to Judge Michael Lynn. The Debtor's parent, Reservoir Exploration Technology ASA, filed for bankruptcy protection under the laws of Norway on June 13, 2013. Mr. Jon Skjorshammer of The Selmer Law Firm, with offices in Oslo, Norway, has been appointed by the Norwegian bankruptcy court as the liquidator for RXT ASA in the Parent's Foreign Bankruptcy Case. The Debtor's proposed counsel are Jay Ong, Esq., Joseph J. Wielebinski, Esq. -- jwielebinski@munsch.com -- and Thomas D. Berghman, Esq. -- tberghman@munsch.com -- at Munsch Hardt Kopf & Harr, P.C., in Dallas, Texas. The petition was signed by Jason Rae, chief restructuring officer. The Debtor's Schedules of Assets and Liabilities disclosed $13,660,336 in assets and $18,823,697 in liabilities. RESERVOIR EXPLORATION: Hires Lain Faulkner to Provide CRO --------------------------------------------------------- Reservoir Exploration Technology, Inc., seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to employ Lain Faulkner & Co., P.C., as financial advisor, and designate Jason A. Rae as chief restructuring officer. Lain Faulkner's current hourly rates range from $345 to $450 per hour for Shareholders, $225 to $340 per hour for CPAs/Accounting Professionals, $225 to $300 per hour for IT Professionals, $150 to $215 per hour for Staff Accountants, and $75 to $95 per hour for clerical time depending on the personnel assigned. Mr. Rae, a master analyst in financial forensics, will be paid $340 per hour. Lain Faulkner will also be reimbursed for any necessary out-of-pocket expenses. Mr. Rae assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. He discloses that on Oct. 31, 2013, Lain Faulkner received a $30,000 retainer from the Debtor. The following day, Lain Faulkner drew down the retainer in the amount of $24,872 to pay for prepetition services and expenses incurred in connection with the Debtor's preparation for the Bankruptcy Case. Accordingly, as of the Petition Date, $5,127 remains in retainer, which Lain Faulkner will continue to hold and not apply except as authorized by the Court. A hearing on the employment application is set for Dec. 5, 2013, at 1:30 p.m. (CST). About Reservoir Exploration Reservoir Exploration Technology, Inc., a provider of seismic data and related geophysical services to the oil and gas industry and specializing in multi-component sea-floor acquisition of seismic data, sought protection under Chapter 11 of the Bankruptcy Code on Nov. 5, 2013 (Case No. 13-45148, Bankr. N.D. Tex.). The case is assigned to Judge Michael Lynn. The Debtor's parent, Reservoir Exploration Technology ASA, filed for bankruptcy protection under the laws of Norway on June 13, 2013. Mr. Jon Skjorshammer of The Selmer Law Firm, with offices in Oslo, Norway, has been appointed by the Norwegian bankruptcy court as the liquidator for RXT ASA in the Parent's Foreign Bankruptcy Case. The Debtor's proposed counsel are Jay Ong, Esq., Joseph J. Wielebinski, Esq. -- jwielebinski@munsch.com -- and Thomas D. Berghman, Esq. -- tberghman@munsch.com -- at Munsch Hardt Kopf & Harr, P.C., in Dallas, Texas. The petition was signed by Jason Rae, chief restructuring officer. The Debtor's Schedules of Assets and Liabilities disclosed $13,660,336 in assets and $18,823,697 in liabilities. RESERVOIR EXPLORATION: Section 341(a) Meeting Set on Dec. 13 ------------------------------------------------------------ A meeting of creditors in the bankruptcy case of Reservoir Exploration Technology Inc. will be held on Dec. 13, 2013, at 10:30 a.m. at FTW 341 Rm 7A24. Creditors have until March 13, 2014, 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. Reservoir Exploration Technology Inc., filed a bankruptcy petition (Bankr. N.D. Tex. Case No. 13-45148) on Nov. 5, 2013. The petition was signed by Jason Rae as chief restructuring officer. The Debtor estimated assets and debts of at least $10 million. Judge Michael Lynn presides over the case. MUNSCH HARDT KOPF & HARR, P.C., serves as the Debtor's counsel. RESIDENTIAL CAPITAL: Settles 10-Year-Old Homeowners' Action ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC settled another lawsuit brought by homeowners in anticipation of the Nov. 19 confirmation hearing for approval of its reorganization plan. According to the report, ResCap units Residential Funding Co. LLC and Homecomings Financial LLC were sued in 2003 in Missouri state court, accused of charging improper fees and interest. After trial, the plaintiffs were awarded almost $100 million, including $92 million in punitive damages. A state appellate court called for retrial on punitive damages. Because other awards were upheld, ResCap paid the plaintiffs almost $13 million. Facing retrial with plaintiffs asking for more than the original $92 million in punitive damages, ResCap signed a settlement agreement before bankruptcy. There will be a hearing on Dec. 17 in bankruptcy court to approve the settlement, which gives the class members an unsecured claim for $14.5 million. The plaintiffs will also have the right to pursue insurance coverage like similarly situated parties under ResCap's plan. ResCap is the mortgage-servicing unit of non-bankrupt parent Ally Financial Inc. ResCap's primary opposition at next week's plan- confirmation hearing comes from second-lien lenders who have said they are entitled to payment in full. Otherwise, according to ResCap, the plan has "overwhelming support from the vast majority of creditors." The plan is financed in part by a $2.1 billion settlement contribution from Detroit-based Ally. An ad hoc group holding $714 million in 9.625 percent junior notes oppose the plan, saying they are entitled to payment in full with interest. Disclosure materials explain why holders of ResCap's $2.15 billion in general unsecured claims should see a 36.3 percent recovery. Unsecured creditors with $2 billion in claims against the so- called GMACM companies are shown as receiving 30.1 percent. The $1.1 billion in third-lien 9.625 percent secured notes due in 2015 last traded on Nov. 12 for 109.75 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. In January, the bonds sold for 107 cents. The $473.4 million of ResCap senior unsecured notes due in April 2013 last traded on Nov. 4 for 36.719 cents on the dollar, a 56 percent increase since Dec. 19, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). REVSTONE INDUSTRIES: Boston Finance Opposes Exclusivity Request --------------------------------------------------------------- Boston Finance Group, LLC, opposes any extension of time of Revstone Industries, LLC, et al.'s exclusive plan filing period with respect to Debtor Spara, LLC. BFG argues that the Debtors have failed to take any action or make any progress in Spara's case for a year and have done nothing but pursue litigation against BFG based on purported conduct with respect to a non-debtor subsidiary, Lexington, that will not, in even the most favorable circumstances, yield a recovery to Spara. The Exclusivity Extension Motion is set to be heard on Dec. 11, 2013. In effect, the Motion will not be heard until 41 days after the expiration of the Debtors' existing exclusive period, nearly half of the requested extension of time, BFG points out. "Due to the late date of the hereaing, Spara has essentially granted itself a de facto extension without cause and parties-in-interest will therefore be deprived of any opportunity to participate and meaningfully object to the Motion." Counsel to Boston Finance Group, LLC, are: Stuart M. Brown, Esq. 1201 N. Market Street, Suite 2100 Wilmington, DE 19801 Tel No.: (302) 468-5700 Fax No.: (302) 394-2341 Email: stuart.brown@dlapiper.com -- and -- Gregg M. Galardi, Esq. Sarah E. Castle, Esq. 1251 Avenue of the Americas New York, NY 10020-1104 Tel No.: (212) 335-4500 Fax No.: (212) 335-4501 Email: gregg.galardi@dlapiper.com sarah.castle@dlapiper.com About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge & Rice, LLP, represents the Official Committee of Unsecured Creditors in Revstone's case. ROYAL IMTECH: Financiers Agree to Extend Covenant Holiday --------------------------------------------------------- Imtech says it is currently engaging in a constructive dialogue with its most important financiers regarding an amendment of its financing agreements, including a covenant reset. This covenant reset is required as a result of a slower than anticipated recovery of Imtech's business, in particular in Germany. As part of these discussions, Imtech's most important financiers have agreed to extend the covenant holiday. Under the related financing agreements the first covenant testing date was March 31, 2014. The newly agreed first testing date is September 30, 2014. Imtech expects to publish the reset covenants on or before the publication of its annual results on March 18th 2014. About Imtech Royal Imtech N.V. is a European technical services provider in the fields of electrical solutions, ICT and mechanical solutions. With approximately 29,000 employees, Imtech is active attractive positions in the buildings and industry markets in the Netherlands, Belgium, Luxembourg, Germany, Austria, Eastern Europe, Sweden, Norway, Finland, the UK, Ireland, Turkey and Spain, the European markets of ICT and Traffic as well as in the global marine market. In total Imtech serves 24,000 customers. Imtech offers integrated and multidisciplinary total solutions that lead to better business processes and more efficiency for customers and the customers they, in their turn, serve. Imtech also offers solutions that contribute towards a sustainable society - for example, in the areas of energy, the environment, water and traffic. Imtech shares are listed on the NYSE Euronext Amsterdam, where Imtech is included in the AEX Index. SCIENTIFIC GAMES: S&P Rates $2.6BB Secured Credit Facility 'BB-' ---------------------------------------------------------------- "Standard & Poor's Ratings Services assigned New York-based Scientific Games Corp.'s new $2.6 billion senior secured credit facility an issue-level rating of 'BB-' (at the same level as the corporate credit rating), with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default." The facility consists of a $2.3 billion term loan due 2020 and a $300 million revolver due 2018. "At the same time, we revised our recovery rating on the company's subordinated debt to '6' (0% to 10% recovery expectation) from '5' (10% to 30% recovery expectation). We subsequently lowered our issue-level rating on this debt to 'B' from 'B+', in accordance with our notching criteria and in line with our assessment in our most recent research update on the company, published May 16, 2013. The revised recovery rating reflects a greater amount of secured debt outstanding under our simulated default scenario versus the company's previous debt structure. This reduces the recovery prospects for the subordinated debt enough to warrant a downward revision of our recovery rating." "In addition, we withdrew our ratings on Scientific Games' previous senior secured credit facility, which the company repaid as part of the transaction." "The company used proceeds from the new term loan to finance its $1.5 billion acquisition of WMS Industries Inc., to refinance existing debt, and to pay related fees and expenses." "Our assignment of ratings to Scientific Games' new debt follows the company's completion of its acquisition of WMS, closing and funding of the new credit facility, and our review of final documentation." "Our 'BB-' corporate credit rating on Scientific Games reflects our assessment of the company's business risk profile as "fair" and its financial risk profile as "highly leveraged." "Our assessment of Scientific Games' business risk profile as fair reflects the mature, capital-intense nature of the lottery systems industry, and the competitive market conditions in the lottery industry for contract renewals and for new contracts, which often result in pricing pressure." RATINGS LIST Scientific Games Corp. Corporate Credit Rating BB-/Negative/-- New Rating Scientific Games Corp. Senior Secured $2.3B term loan due 2020 BB- Recovery Rating 3 $300M revolver due 2018 BB- Recovery Rating 3 Recovery Rating Revised; Issue-Level Downgrade To From Scientific Games Corp. Subordinated B B+ Recovery Rating 6 5 SCOOTER STORE: Wants Exclusivity in Plan Filing Thru Feb. 9 ----------------------------------------------------------- The Scooter Store Holdings, Inc., et al., ask the Bankruptcy Court to further extend their exclusive period to file a Chapter 11 plan through Feb. 9, 2014, and their exclusive period to solicit acceptances of that plan through April 9, 2014. The current Exclusivity Period simply have not afforded the Debtors with sufficient time to complete the orderly liquidation of their assets while simultaneously planning the best manner in which to wrap up their cases. The Debtors' second exclusivity request will be heard on Dec. 12, 2013. Kenneth J. Enos, Esq., Robert S. Brady, Esq., Michael R. Nestor, Esq., and Andrew L. Magaziner, Esq., of Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, represent the Debtors as well as Neil E. Herman, Esq., of Morgan Lewis & Bockius LLP. Kenne About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SCOOTER STORE: Says Liquidation Is Near Completion -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Scooter Store Inc., forced to liquidate when it lost the right to reimbursement from Medicare, is "planning the best manner in which to wrap up these cases." According to the report, although the supplier of power wheelchairs and scooters had lined up a buyer to purchase the business as a going concern, Scooter Store was forced to sell off assets piecemeal when the government withdrew the company's ability to sell to Medicare customers. The asset sales are "nearing completion," the company said in a court filing last week. There will be a Dec. 12 hearing in U.S. Bankruptcy Court in Delaware for a second expansion of the exclusive right to propose a liquidating Chapter 11 plan. If the judge agrees, the deadline will go out three months to Feb. 9. Were the company not forced to liquidate, there might have been recovery for unsecured creditors given a settlement between official creditors' committee and lender Sun Capital Partners Inc., a 66.8 percent shareholder and holder of $40 million in third-lien debt. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SEVEN COUNTIES: Has Interim Access to Cash Collateral Until Apr. l ------------------------------------------------------------------ In a sixth interim order entered Oct. 9, 2013, the U.S. Bankruptcy Court for the Western District of Kentucky authorized Seven Counties Services, Inc., effective as of Sept. 27, 2013, to use cash collateral of Fifth Third Bank through the earlier of (i) the fourteenth calendar day following entry by the Court of final judgment entered in Adversary Proceeding Number 13-03019, or (ii) April 1, 2014. A copy of the sixth interim cash collateral order is available at: http://bankrupt.com/misc/sevencounties.doc302.pdf The final hearing on the motion to use cash collateral is scheduled for March 25, 2014, at 10:00 a.m. Any party wishing to appear by video conference at one of the video conference sites in the Western District must contact the Court by phone no later than two business days prior to the scheduled hearing. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioral services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. Wyatt, Tarrant & Combs LLP represents the Debtor as special counsel. Hall, Render, Killian, Heath & Lyman, PLLC, is special counsel to represent and advise it in the implementation of its new software system. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SIMPLY WHEELZ: Has Interim Approval of $14.8-Mil. DIP Loan ---------------------------------------------------------- Judge Edward Ellington of the U.S. Bankruptcy Court for the Southern District of Mississippi gave Simply Wheelz LLC interim authority to obtain $14.8 million of postpetition secured financing from The Catalyst Capital Group, Inc. During a hearing scheduled for Dec. 3, 2013, at 9:30 a.m. (prevailing Central Time), the Debtor will ask the Court to allow it to tap an aggregate amount not to exceed $36 million, which commitment may be increased without further order of the Court by up to $10 million. Objections to the final approval of the DIP request are due Nov. 29. All outstanding principal amount of all DIP Obligations will bear interest at the LIBOR Rate plus 8.0% per annum. After the occurrence and during the continuance of an event of default, all outstanding DIP Obligations will bear an additional 2.0% per annum of interest. Subject to a carve-out, the DIP Lender is granted, as security for the DIP Obligations, a first priority security interest in and lien on all unencumbered collateral; a security interest in and lien on all collateral that is subject and subordinate to any valid, prior, perfected and non-avoidable liens; and a first priority priming security interest and lien on any collateral, which is subject to a lien securing the indebtedness of the Debtor to Bank of America, N.A. In addition to the DIP Liens, all of the DIP Obligations will constitute allowed superpriority administrative claims, subject only to the payment of the carve- out. With respect to the BofA Indebtedness, BofA will be adequately protected by its right to collateral posted by MIHI LLC in the amount of $7.5 million, plus any interest accrued thereon. As further adequate protection, the Debtor has agreed to pay the accrued non-principal BofA Indebtedness Amounts that have accrued through the earlier of Nov. 22, 2013, and the date of application of the MIHI collateral to the principal amount of the BofA Indebtedness. As consideration for consent of The Hertz Corporation and its affiliates to the entry of the Interim DIP Order, the Debtor will make a payment of $4 million and return at least 1,000 vehicles to Hertz at its airport locations on or before Nov. 22; return at least 1,000 additional vehicles to Hertz at its airport locations on or before Nov. 30; and pay on or before Dec. 16 an amount equal to $4 million less a credit of $218 for each vehicle returned on or before Nov. 30. Carve-out means (i) all unpaid fees required to be paid to the Clerk of Court and to the Office of the U.S. Trustee; (ii) all reasonable and documented unpaid fees, costs, disbursements and expenses of bankruptcy professionals employed by the Debtors that are incurred prior to the delivery of a carve-out trigger notice; (iii) all reasonable and documented unpaid fees and expenses of bankruptcy professionals retained by any official committee and all reasonable out-of-pocket expenses of any member of the Committee that are incurred prior to the delivery of a carve-out trigger notice; (iv) all reasonable and documented fees and expenses of the Debtors' and any official committee's professionals that are incurred after the delivery of a carve-out trigger notice up to an aggregate amount not to exceed $150,000. The DIP Lender will have the unqualified right to credit bid all or any portion of the DIP Obligations pursuant to (i) Section 363 of the Bankruptcy Code, (ii) a plan of reorganization or plan of liquidation, or (iii) a sale or other disposition by a Chapter 7 trustee for the Debtor. The DIP Loan Documents require the Debtor to comply with the following sale process milestone: Nov. 19, 2013 -- Preliminary hearing on the Bid Procedures Motion must be completed Nov. 22, 2013 -- Final hearing on the Bid Procedures Motion must be completed and Bid Procedures Order must have been entered by the Court Dec. 4, 2013 -- All qualified bids must be due Dec. 9, 2013 -- Auction must be completed Dec. 10, 2013 -- Preliminary hearing to approve the sale to the winning bidder must have concluded Dec. 17, 2013 -- Final hearing to approve the sale to the winning bidder must have concluded A full-text copy of the Interim DIP Order with Budget is available at http://bankrupt.com/misc/SIMPLYdipord1108.pdf The Debtor is represented by Stephen W. Rosenblatt, Esq., and Christopher R. Maddux, Esq., at BUTLER SNOW O'MARA STEVENS & CANNADA LLP, in Ridgeland, Mississippi. The DIP Lender is represented by Richard Levy, Esq., at Latham & Watkins LLP, in Chicago, Illinois; and Jim F. Spencer, Esq., at Watkins and Eager, PLLC, in Jackson, Mississippi. About Simply Wheelz Based in Ridgeland, Mississippi, Simply Wheelz is owned by Franchise Services of North America NA, which acquired the Advantage business and 24,000 vehicles early this year from Hertz Global Holdings Inc. Hertz was required by antitrust regulators to divest Advantage when taking over the Dollar Thrifty business. The vehicles are leased from Hertz, which gave notice of termination of the lease on Nov. 2 following payment default on Oct. 9. Simply Wheelz said it lost $8.6 million on the sale of 5,300 cars in the Hertz fleet. The contracts requires Simply Wheelz to bear the risk of the residual value of the fleet. Advantage has 72 locations in 33 states. It is the fourth- largest rental car business in the U.S. Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code on Nov. 5, 2014 (Case No. 13-03332, Bankr. S.D.Miss.). The case is assigned to Judge Edward Ellingon. The petition listed assets and debt both exceeding $100 million. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at BUTLER SNOW O'MARA STEVENS & CANNADA, in Ridgeland, Mississippi. SIMPLY WHEELZ: Employs Capstone Advisory as Financial Advisor ------------------------------------------------------------- Simply Wheelz LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Capstone Advisory Group, LLC, as financial advisor. The firm will be paid the following customary hourly rates: Executive Directors $575 to $830 Managing Directors $475 to $640 Directors $350 to $450 Consultants $240 to $340 Support Staff $120 to $305 The firm will also be reimbursed for any necessary out-of-pocket expenses. Capstone has agreed to limit its professional fees to no more than $400,000 for the month of October. The Debtor has paid Capstone $400,000 for prepetition fees and reimbursable expenses the amount of $30,123. In addition, Capstone has received a $100,000 retainer for postpetition services. Edwin N. Ordway, Jr., executive director and manager of Capstone Advisory Group, LLC, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Simply Wheelz Based in Ridgeland, Mississippi, Simply Wheelz is owned by Franchise Services of North America NA, which acquired the Advantage business and 24,000 vehicles early this year from Hertz Global Holdings Inc. Hertz was required by antitrust regulators to divest Advantage when taking over the Dollar Thrifty business. The vehicles are leased from Hertz, which gave notice of termination of the lease on Nov. 2 following payment default on Oct. 9. Simply Wheelz said it lost $8.6 million on the sale of 5,300 cars in the Hertz fleet. The contracts requires Simply Wheelz to bear the risk of the residual value of the fleet. Advantage has 72 locations in 33 states. It is the fourth- largest rental car business in the U.S. Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2014. The case is assigned to Judge Edward Ellingon. The Debtor estimated assets and debt in excess of $100 million. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens & Cannada, in Ridgeland, Mississippi. SIMPLY WHEELZ: Has Interim Authority to Pay Critical Vendors ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Mississippi gave Simply Wheelz LLC interim authority to pay the prepetition claims of critical vendors who agree to continue to supply goods or services to the Debtor on the critical vendor's governing trade terms. The requested relief is critical to the Debtor's reorganization efforts, and immediately necessary in light of the nature of the Debtor's operations, Stephen W. Rosenblatt, Esq., at Butler Snow LLP, in Ridgeland, Mississippi. If the request is not granted and certain critical trade vendors refuse to continue to supply goods and services to the Debtor postpetition, the Debtor will be unable to continue its operations and keep its customers satisfied, which will certainly endanger the value of the Debtor's enterprise and harm all creditors, Mr. Rosenblatt adds. About Simply Wheelz Based in Ridgeland, Mississippi, Simply Wheelz is owned by Franchise Services of North America NA, which acquired the Advantage business and 24,000 vehicles early this year from Hertz Global Holdings Inc. Hertz was required by antitrust regulators to divest Advantage when taking over the Dollar Thrifty business. The vehicles are leased from Hertz, which gave notice of termination of the lease on Nov. 2 following payment default on Oct. 9. Simply Wheelz said it lost $8.6 million on the sale of 5,300 cars in the Hertz fleet. The contracts requires Simply Wheelz to bear the risk of the residual value of the fleet. Advantage has 72 locations in 33 states. It is the fourth- largest rental car business in the U.S. Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2014. The case is assigned to Judge Edward Ellingon. The Debtor estimated assets and debt in excess of $100 million. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens & Cannada, in Ridgeland, Mississippi. SIMPLY WHEELZ: Has Interim Authority to Assume Important Contracts ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Mississippi gave Simply Wheelz LLC interim authority to assume the following agreements: -- service contracts with online travel agencies pursuant to which the OTAs accept and process car rental reservations for the benefit of the Debtor; -- the agreement with American Express Travel Related Services Company, Inc., for the processing of credit card charges on American Express(R) made by customers of the Debtor; -- First Data Merchant Services Contract for the processing of credit card charges made by the customers of the Debtor; -- agreement with Bank of America for "Procure-to-Pay" cards, which are used by the city managers for each location for items like paying for repairs to damaged vehicles, repairs and maintenance, occasional outside labor, location-specific SG&A and related items; and -- Franchise Services of North America, Inc. Shared Services Agreement, pursuant to which the Debtor and FSNA allocate the cost of certain contractual benefits enjoyed by each of the Debtor and FSNA. Stephen W. Rosenblatt, Esq., at Butler Snow LLP, in Ridgeland, Mississippi, asserts that if the Court does not allow the Debtor to assume the obligations contained in the agreements and cure the associated prepetition arrearage amounts owed, the Debtor will be unable to receive, process and fulfill reservations through the most popular internet sites for its car rental services. Without the Agreement and the benefits associated therewith, the Debtor's prospects for a successful reorganization will be severely hampered if not entirely thwarted, Mr. Rosenblatt added. About Simply Wheelz Based in Ridgeland, Mississippi, Simply Wheelz is owned by Franchise Services of North America NA, which acquired the Advantage business and 24,000 vehicles early this year from Hertz Global Holdings Inc. Hertz was required by antitrust regulators to divest Advantage when taking over the Dollar Thrifty business. The vehicles are leased from Hertz, which gave notice of termination of the lease on Nov. 2 following payment default on Oct. 9. Simply Wheelz said it lost $8.6 million on the sale of 5,300 cars in the Hertz fleet. The contracts requires Simply Wheelz to bear the risk of the residual value of the fleet. Advantage has 72 locations in 33 states. It is the fourth- largest rental car business in the U.S. Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2014. The case is assigned to Judge Edward Ellingon. The Debtor estimated assets and debt in excess of $100 million. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens & Cannada, in Ridgeland, Mississippi. SOUTHGOBI RESOURCES: Restates Financials for 2011 and 2012 ---------------------------------------------------------- SouthGobi Resources Ltd. on Nov. 11 provided a summary of information on Unaudited Third Quarter 2013 and Unaudited Year to Date September 30, 2013 Financial Results and selected unaudited restated financial information for 2010, 2011, 2012, and First Half 2013 financial results. Update on restatement On November 8, 2013, the Company's board of directors decided to restate the Company's financial statements for 2011 and 2012, and consequently its comparative interim financial statements for 2013 and the related Management's Discussion and Analysis. The selected unaudited restated financial information and information on third quarter 2013 and year to date September 30, 2013 contained in this press release were reviewed by the Company's Audit Committee and Board of Directors and approved on November 10, 2013. The restatement follows a review by the Company of its prior revenue recognition practices for its coal sales contracts entered into in the fourth quarter of 2010, full year 2011 and in the first half of 2012 and related delivery of coal under those sales contracts during the periods commencing in the fourth quarter of 2010 through to the present. The revenue restatement only affects the contracted coal not collected by the customers at each period end. This review has been conducted in consultation with PricewaterhouseCoopers LLP, the Company's current auditors, and Deloitte LLP, the Company's auditors during the 2010 and 2011 fiscal years. The Company adopted new terms in its sales contracts starting in the second half of 2012 such that title transfers on these new contracts when coal is loaded onto the customer's trucks which results in a later point of revenue recognition for all its sales starting from the second half of 2012. Following the change in revenue recognition practices, revenues from coal sales contracts are recognized in later periods than previously reported and some revenue remains to be reported in periods after September 30, 2013 as not all contracted coal has been collected by customers. This change results in lower revenues and cost of sales in 2010 and 2011 followed by higher revenues and cost of sales in 2012 and year to date September 30, 2013. The adjustments to other operating expenses in each applicable period primarily result from the reversal of provisions for doubtful trade and other receivables in those periods. The impact on the net income/(loss) for the restated periods follows from the restated revenues, net of cost of sales and adjustments to other operating expenses. The net loss for the year 2010 increases, the net income for the year 2011 decreases and the net loss for the year 2012 decreases. The net loss for the six month period ending June 30, 2013 is also lower than previously reported. During the periods from 2010 to September 30, 2013, trade and other receivables have been adjusted lower and deferred revenue recognized to reflect revenue being recorded in later periods than previously reported. The inventory balance increased over the same period to reflect higher coal inventory stockpile balances. Prepaid expenses also increased, with a corresponding decrease in trade and other payables, as coal sales royalty expenses were recognized in later periods than previously reported. Effects of the restatements on previously filed Statements of Cash Flows The restatements do not result in a change in cash at the end of any period. The statement of cash flows as reported does not change except for the reclassification of various items within operating activities. Financing activities, investing activities, change in cash, cash at beginning of period and cash at the end of period remain unchanged from previously filed financial statements. Timeline going forward The Company expects that it will be in a position to complete on or before November 14, 2013 the filing of its Interim Statements for the three and nine month periods ended September 30, 2013 and the related MD&A and certifications by the Chief Executive Officer and Chief Financial Officer in compliance with National Instrument 51-102 of the Canadian Securities Administrators. The Company is working expeditiously with PwC and Deloitte in order to file the full set of audited restated consolidated financial statements and MD&A as at and for the years ended December 31, 2012 and 2011 comprising the Restated Financials. The Restated Financials are expected to be available on or before December 13, 2013. Notwithstanding the foregoing, if required, the Company will be applying to the British Columbia Securities Commission pursuant to Part 4 of National Policy 12-203 for a Management Cease Trade Order in connection with any late filing of the Required Filings and the Restated Financials. If issued, the MCTO will prohibit trading in securities of the Company, whether direct or indirect, by the Company's CEO, CFO and board of directors or other persons or companies who had, or may have had, access directly or indirectly to any material fact or material change with respect to the Company that has not been generally disclosed. There can be no assurance that an MCTO will be issued. If an MCTO is not issued, the Principal Regulator can impose a general cease trade order ceasing all trading in securities of the Company for such period of time as the Principal Regulator may deem appropriate. While the Company expects to file the Required Filings on or before November 14, 2013 in compliance with NI 51-102 and the Restated Financials as soon as possible, any delay in filing the Required Filings, or the Restated Financials, could ultimately result in an event of default of the Company's convertible debenture held by China Investment Corporation, which if not cured within applicable cure periods in accordance with the terms of such debenture, may result in the principal amount owing and all accrued and unpaid interest becoming immediately due and payable upon notice to the Company by CIC. About SouthGobi Resources SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources Ltd., also publicly listed in Toronto and New York, has a 57% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill. SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, Mongolian registered company that holds the mining and exploration licenses in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China. T-L CONYERS: Can Access Cole Taylor's Cash Collateral Until Dec. 1 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Indiana, according to T-L Cherokee South LLC's case docket, has extended the Debtor's interim use of Cole Taylor Bank's cash collateral until Dec. 1, 2013. A 14-day drop dead notice will be provided to all creditors and parties-in-interest regarding the proposed order to be filed by the Debtor and Cole Taylor. A telephonic conference on further extension of use of cash collateral will be held on Dec. 18, at 10 a.m. If on that date the parties report that they have not agreed to further extension, a hearing in court will be set. The Debtor will use the cash collateral to fund the continued operations of its business. About T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10,000,001 to $50,000,000. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. T-L CONYERS: Court Wants Bankruptcy Exit Plan Revised ----------------------------------------------------- The Hon. J. Philip Klingeberger of the U.S. Bankruptcy Court for the Northern District of Indiana entered an order regarding Cole Taylor Bank/RCG-KC Brywood LLC's objection to the deemed substantive consolidation provisions of T-L Cherokee South, LLC's Joint Plan of Reorganization. Pursuant to the order, among other things, the Court: -- sustained the objection; -- said that further proceedings on the Debtor's Joint Disclosure Statement will not be undertaken and are mooted by the Court's determination that the plan described in that disclosure statement cannot be confirmed as a matter of law; and -- granted the Debtor leave to file an amended plan and an amended disclosure statement and the due date will be established by separate order. About T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10,000,001 to $50,000,000. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. TERVITA CORP: Moody's Cuts CFR to 'Caa1' & Notes Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded Tervita Corporation's corporate family rating (CFR) to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD, first lien senior secured revolver rating to B1 from Ba3, and first lien senior secured notes rating to B3 from B2. The company's senior unsecured rating was affirmed at Caa2, its speculative grade liquidity rating was affirmed at SGL-3 and its ratings outlook has been changed to stable from negative. "Tervita's cash flows have underperformed Moody's expectations since the company's rating outlook was changed to negative earlier this year," said Darren Kirk, a Vice President and Senior Credit Officer with Moody's. "While adverse weather contributed to this underperformance, Tervita's adjusted Debt/ EBITDA is currently 10x. Moody's expects improvement from this level but also believe the company's leverage will remain over 7x through 2014." Ratings Rationale: Tervita's Caa1 CFR is primarily driven by its very high leverage, generally weak execution (especially of its growth spending) over the past couple of years and exposure to the cyclical land drilling business with a concentration in western Canada. Moody's is concerned that unless there is some growth in earnings in the next few years, that the company's capital structure may be untenable. The rating also recognizes that the company's liquidity is adequate through 2014 and that Tervita is one of the largest providers of waste management services to the Canadian oil & gas sector, long-term industry fundamentals are favorable, barriers to entry are high, and Tervita has a diverse list of blue chip customers. Moody's expects Tervita's free cash flow will achieve a breakeven level over the next year as it cuts back capital expenditures to near-maintenance levels. The company's liquidity is supported by a lack of meaningful debt maturities prior to November 2015, modest expected cushion to bank financial covenants and about $150 million of unused revolver availability (after drawings and outstanding letters of credit). Most of the company's debt matures in 2018. The stable outlook reflects Moody's expectation that Tervita's leverage will steadily improve towards 7x through 2014 and that its liquidity will remain adequate. The rating could be upgraded if debt to EBITDA is sustained towards 6.5x and the company generates sustainable positive free cash flow. The rating could be downgraded if Moody's expected the company's liquidity to become strained. TWIN CITY BAPTIST: Objection to TD Bank's Claims Sustained ---------------------------------------------------------- Bankruptcy Judge Melvin S. Hoffman sustained the objection of Twin City Baptist Temple, Inc., to the proofs of claim filed by TD Bank, NA. The claims have been docketed as claims number 7 and 8 on the claims register maintained by the court. Claim 7, in the amount of $2,048,405.55, was filed as a claim fully secured by a first mortgage and assignment of rents on the Temple's real estate located at 194 Electric Avenue in Lunenberg, Massachusetts and includes post-petition interest, fees and costs pursuant to Sec. 506(b) of the Bankruptcy Code. Claim 8, in the amount of $215,998.59, was also filed as a fully secured claim, with post- petition interest, secured by a second mortgage on the Lunenberg property. The Temple's property consists of approximately 27.5 acres of land improved by three structures, a house of worship, a school and a gymnasium. The Temple's objection to the claims is premised on its belief that the Lunenberg property is worth far less thaN the amount of claim 7 and thus both claim 7 and 8 should be disallowed as neither is fully secured and neither qualifies for the inclusion of post-petition interest, costs and fees under Bankruptcy Code Sec. 506(b). In its claims objection the Temple alleges the Lunenberg property had a fair market value on June 1, 2012, two weeks before the filing of the bankruptcy petition commencing this case, of $1,700,000. This would make TD's second mortgage note, the subject of claim 8, totally unsecured and its first mortgage note, reflected in claim 7, partially secured. TD, on the other hand, maintains that as of March 6, 2012, the property had a fair market value of $3,250,000, a value sufficient to render both its claims fully secured. "I find, as between the two appraisals, that the Temple's appraisal presents a more rational and more reliable approach to determining the value of the Temple's property. Therefore, I find that the Temple has presented sufficient evidence to rebut the prima facie validity of TD's proofs of claims and that TD has failed to carry its renewed burden to establish by a preponderance of the evidence that its valuation of the collateral securing its claims is correct. I conclude, therefore, that the value of the Temple's property as of the date of commencement of this bankruptcy case was $1,700,000. Based on this valuation I will sustain the Temple's objection to TD's claims 7 and 8 and afford TD the opportunity to amend its claims consistent with a $1,700,000 value of its collateral and the requirements of Bankruptcy Code [Sec.] 506," Judge Hoffman said. T.D. Bank, N.A., is represented by: Kevin P. McRoy, Esq. WYNN AND WYNN 90 New State Highway Raynham, MA 02767 Tel: 508-823-4567 E-mail: kmcroy@wynnandwynn.com A copy of the Court's Nov. 12, 2013 Memorandum of Decision is available at http://is.gd/Breohcfrom Leagle.com. Twin City Baptist Temple, Inc., based in Lunenburg, Mass., filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 12-42233) on June 14, 2012. Judge Melvin S. Hoffman oversees the case. James L. O'Connor, Jr., Esq. -- joconnor.nandp@verizon.net -- Nickless, Phillips and O'Connor, serves as the Debtor's counsel. In its petition, Twin City Baptist Temple estimated $1 million to $10 million in both assets and debts. A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mab12-42233.pdf The petition was signed by Arthur Erven Burke. VELOCITY EXPRESS: Asks Court to Dismiss Chapter 11 Cases -------------------------------------------------------- VEC Liquidating Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to dismiss their Chapter 11 cases. The Debtors also ask the Court to enter an order relieving Kurtzman & Carson Consultants, LLC, of its responsibilities as the Debtors' claims and noticing agent. The hearing on the Motion is scheduled for Nov. 12, 2013, at 11:30 a.m. The Debtor explains: "When the Sale and the Sale Settlement Agreement were entered into, the Debtors believed they would be able to satisfy, through funds from the Sale and the Sale Settlement Agreement as well as retained causes of action and other assets, the administrative expense claims for the remainder of the Chapter 11 Cases as well as priority unsecured claims in order to allow the Debtors to confirm a plan of liquidation. However, since the closing of the Sale, the actual proceeds received by the Debtors from, for example, the Canadian Cash Flow and retained causes of action, failed to meet the amounts required to satisfy the Debtors' priority unsecured claims. "Indeed, the Debtors have determined that their remaining assets will not be sufficient to pay any distribution at all to priority unsecured claims, so a plan is impossible. However, United States Trustee fees have been paid in full, non-disputed administrative claims have also been paid in full, and negotiated resolutions have even been reached with substantially all disputed administrative claims. However, the estates do not have sufficient funds to pay retained professionals in full. There is certainly no cash to pay lower priority claims. In summary, the Debtors says it is plain that cause exists for the dismissal of their Chapter 11 cases. "The Debtors have terminated their business operations and liquidated or disposed of all of their assets through these cases. Thus, obviously there is no reasonable likelihood of their rehabilitation. Moreover, the Debtors are unable to effectuate a Chapter 11 plan of liquidation, as there are insufficient funds available for distribution to any, let alone all priority unsecured creditors, and no remaining assets to be liquidated or recovered for the benefit of their estates. "Furthermore, because they have no remaining assets to liquidate, the Debtors submit that converting their Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code would only create unnecessary administrative expenses, with no meaningful prospect of recoveries, and is therefore unwarranted. Dismissing their Chapter 11 Cases, on the other hand, will eliminate the accrual of any administrative expense obligations and bring closure to these cases in a timely and efficient manner. In short, there is no remaining purpose to be served by having the debtors remain in a bankruptcy case under any chapter. Accordingly, the Debtors submit that sufficient cause exists to dismiss their Chapter 11 Cases, and that doing so is in the best interests of their estates and creditors." A copy of the Dismissal Motion is available at: http://bankrupt.com/misc/velocityexpress.doc1320.pdf About Velocity Express Velocity Express -- http://www.velocityexpress.com/-- operated a nationwide network of regional ground delivery services. Together with 12 affiliates, Velocity filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13294) on Sept. 24, 2009. The Company disclosed assets of $94.1 million and debt of $120.6 million as of Sept. 1, 2009. Velocity subsequently changed its name to VEC Liquidating Corporation following the sale of its assets to ComVest Velocity Acquisition I, LLC. The buyer is represented in the case by Kenneth G. Alberstadt, Esq., at Akerman Senterfitt LLP in New York. DIP Lender Burdale is represented in the case by Jonathan M. Cooper, Esq., Randall L. Klein, Esq., and Sarah J. Risken, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz, LTD., in Chicago. VELTI INC: T-Mobile, Sprint Dominate Unsecured Committee -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that T-Mobile US Inc. and Sprint Corp. took two of the three seats on the newly formed official creditors' committee for Velti Inc., a provider of marketing and advertising services for mobile devices. According to the report, Velti sought Chapter 11 protection on Nov. 4, intending to sell the business to GSO Capital Partners LP, an affiliate of Blackstone Group LP. GSO acquired the $57.5 million secured credit on Nov. 1 from HSBC Bank NA, the lenders' agent. Owed $1 million, T-Mobile holds the largest unsecured claim, according to Velti. The Sprint claim is about $225,000, according to a court filing. The third member of the committee, representing employees, is James Helt. He has a $150,000 claim, according to a court filing by Velti. Velti, with U.S. operations in San Francisco and Atlanta, has asked to conduct an auction and complete a sale by year-end. The bankruptcy court in Delaware will hold a hearing on Nov. 18 to settle on auction and sale procedures. About Velti Inc. Velti Inc., a provider of technology for marketing on mobile devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13- bk-12878) on Nov. 4. DLA PIPER LLP (US) serves as the Debtor's counsel. BMC Group, Inc., is the Debtor's claims agent. Judge Peter J. Walsh presides over the case. Velti Inc., a San Francisco-based unit of Velti Plc, listed assets of as much $50 million and debt of as much as $100 million in Chapter 11 documents filed this week. Its Air2Web Inc. unit, based in Atlanta, also sought creditor protection. Velti Plc, which trades on the Nasdaq Stock Market, isn't part of the bankruptcy process. Operations in the U.K., Greece, India, China, Brazil, Russia, the United Arab Emirates and elsewhere outside the U.S. will continue as usual. WESTERN FUNDING: Panel May Hire Schwartzer & McPherson as Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Western Funding Inc. and its debtor-affiliates to retain Schwartzer & McPherson Law Firm as its counsel. As reported in the Troubled Company Reporter on Oct. 17, 2013, Schwartzer & McPherson's services will include: (a) assisting, advising and representing the Committee in its consultations with the Debtor regarding the administration of this case; (b) assisting, advising and representing the Committee in analyzing the Debtor's assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, any asset dispositions, financing arrangements and cash collateral stipulations or proceedings; (c) assisting, advising and representing the Committee in any manner relevant to reviewing and determining the Debtor's rights and obligations under leases and other executory contracts; (d) assisting, advising and representing the Committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtor, the Debtor's operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to this case or to the formulation of a plan; (e) assisting, advising and representing the Committee in its participation in the negotiation, formulation and drafting of a plan of reorganization; (f) assisting, advising and representing the Committee in understanding its powers and its duties under the Bankruptcy Code and Bankruptcy Rules and in performing other services as are in the interests of those represented by the Committee; (g) assisting, advising and representing the Committee in the evaluation of claims and on any litigation matters; and (h) providing other services to the Committee as may be necessary in this case. Schwartzer & McPherson will be paid at these hourly rates: Lenard E. Schwartzer, attorney $550 Jeanette E. McPherson, attorney $475 Jason A. Imes, attorney $350 Angela Hosey, paraprofessional $150 Sheena Clow, paraprofessional $150 Kristen Molloy, paraprofessional $125 Schwartzer & McPherson will also be reimbursed for reasonable out- of-pocket expenses incurred. Jeanette E. McPherson, managing partner Schwartzer & McPherson, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Western Funding Inc. Las Vegas car-loan maker Western Funding Inc., whose customers usually have less-than-perfect credit, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev., Case No. 13-17588) on Sept. 4, 2013, after its own lender said the company broke borrowing promises made last year. Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC, in Las Vegas, Nevada, represents the Debtor. Jeanette E. McPherson, Esq., at SCHWARTZER & McPHERSON LAW FIRM represents the Official Committee of Unsecured Creditors. WESTERN REFINING: Moody's Rates Proposed $550MM Term Loan 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Western Refining, Inc.'s (WNR) proposed $550 million term loan that will partially fund the company's acquisition of limited partner (LP) and general partner (GP) interests in Northern Tier Holdings, LLC (NTI). In a related action, Moody's also affirmed WNR's B1 Corporate Family Rating (CFR) and downgraded its senior unsecured rating from B2 to B3 given the increased subordination of unsecured debt resulting from the incremental secured debt. The rating outlook remains stable. Issuer: Western Refining, Inc. Ratings Assigned: -- $550 million Term-Loan B due 2020, B1 (LGD3, 44%) Ratings Affirmed: -- Corporate Family Rating, B1 -- Probability of Default Rating, B1-PD -- Speculative Grade Liquidity rating, SGL-1 Ratings Downgraded: -- $350 million Senior Unsecured Notes due 2021, B3 (LGD5, 81%) from B2 (LGD4, 58%) Ratings Rationale: These actions follow WNR's announcement that it has acquired NTI's 100% of GP and 38.7% of LP ownership interest from the latter's private equity sponsors, Texas Pacific Group and ACON Investments, LLC in a transaction valued at $775 million. WNR plans to fund this acquisition using proceeds from the new term loan and balance sheet cash. NTI is a publicly traded variable distribution master limited partnership (MLP) that has refining, retail and pipeline operations in the PADD II region of the United States. NTI's St. Paul refinery has throughput capacity of about 89,500 barrels per day (bpd), adding to WNR's existing refining capacity of about 153,000 bpd. WNR will not be assuming or guaranteeing any of NTI's debt obligations. NTI has secured a backstop term loan facility to support its exposure to change of control clauses in its senior secured notes due 2020. The change of control clause in the notes enables lenders to put the notes to NTI at 101% of the face value of the notes. NTI has already secured consent waivers from lenders in its revolving credit facility with respect to the change in control. Over the near-term, Moody's does not expect any impact on WNR's B1 Corporate Family Rating and stable outlook as a result of the acquisition. However, there could be rating implications for both WNR and NTI over the medium to longer term as WNR develops a clearer strategy for its consolidated growth profile. WNR's B1 CFR is supported by its strong profitability and liquidity, enhanced geographic diversity with the NTI acquisition, crude procurement advantages in both Permian and Bakken basins, and Moody's expectation of strong through the cycle metrics for both entities. The rating is constrained by the increased structural complexity post the NTI acquisition, uncertainties regarding corporate and capital structure going forward and potential cash distribution requirements that could arise if WNR's refining assets at El Paso and Gallop are dropped-down into NTI's variable distribution refining MLP structure, which remains to be tested through the refining cycle at this time. The B1 rating on the proposed $550 million term loan B reflects the term loan's relative subordination to WNR's undrawn ABL revolver with borrowing base of over $650 million and senior position to the unsecured notes. The term loan will be collateralized with mortgages on WNR's two refineries whereas the revolver's borrowing base is supported by crude and product inventories and receivables . The company has $565 million face amount in unsecured indebtedness subordinate to the proposed term loan, a portion of which is in the form of convertible notes maturing June 2014. The sizable amount of debt senior to the unsecured notes results in a two-notch differential between the senior unsecured notes rating and the CFR, whereas there is no notching between the term loan rating and the CFR. The SGL-1 indicates very good liquidity through the end of 2014. Pro forma for the term loan offering and NTI transaction, Western is expected have over $350 million cash on its balance sheet. The company also has partial availability under an estimated $656 million borrowing base credit facility with $262 million in outstanding letters of credit as of September 30, 2013. The sole financial covenant under the facility is a minimum fixed charge coverage ratio of at least 1.0x, which only applies when availability under the facility drops below $50 million or 12.5% of the borrowing base (whichever is greater). Moody's expects the company to remain well within compliance of this covenant through 2014. There are no debt maturities until June 2014 when $215 million of convertible notes mature. An upgrade is unlikely at this time given the uncertainties regarding WNR's more intricate organizational and capital structure and its financial policies moving forward as a consolidated entity. Moody's would consider an upgrade if these uncertainties are meaningfully reduced, WNR maintains conservative policies and strong through the cycle metrics, and if the variable distribution MLP structure for refiners is favorably proven overtime. Moody's could downgrade the ratings if there is an unexpectedly severe and prolonged deterioration in sector conditions, leverage increases materially, or if the company does not maintain an adequate cash balance to support strong liquidity and to counter the risk of prolonged unplanned downtime. Western Refining, Inc. is an independent refining and marketing company headquartered in El Paso, Texas. Northern Tier Energy, LLC is a wholly-owned subsidiary of Northern Tier Energy LP, and is headquartered in Ridgefield, CT. ZACKY FARMS: Plan Confirmation Hearing Continued Until Dec. 10 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California continued until Dec. 10, 2013, at 2:00 p.m., the hearing to consider confirmation of the Amended Plan of Liquidation filed Sept. 3, 2013, by ZF in Liquidation LLC, formerly known as Zacky Farms LLC, prior to the asset sale. As reported in the Troubled Company Reporter on Sept. 23, 2013, the Plan provides for the Debtor to continue its wind-down efforts after confirmation with its administration to be handled by a professional wind-down manager (the Plan Administrator) replacing the Debtor's sole manager, Keith Cooper, as the responsible party for the liquidation. The Plan contemplates the liquidation of all estate assets for the benefit of the holders of Allowed Claims and Allowed Interests. The resulting funds, after payment of Plan Expenses, will be made available for distribution to holders of Allowed Claims and Allowed Interests in accordance with the Bankruptcy Code Distribution Priorities in accordance with the terms of the Plan. The Plan Administrator's operation of the Liquidating Debtor will be for the purpose of liquidating and monetizing estate assets, which consist primarily of the Secured Sale Notes, consisting of the $6.4M 503(b)(9) Note and the $3.5M Creditor Note. A copy of the Amended Plan is available for free at http://bankrupt.com/misc/ZACKY_FARMS_amendedplan.pdf Donald W. Fitzgerald, Esq., Thomas A. Willoughby, Esq., and Jennifer E. Neimann, Esq. of Felderstein Fitzgerald Willoughby & Pascuzzi LLP, serve as attorneys for ZF in Liquidation LLC. About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Debtor disclosed $72,233,554 in assets and $67,345,041 in liabilities as of the Chapter 11 filing. Zacky Farms LLC received bankruptcy-court approval to sell its assets to the Robert D. and Lillian D. Zacky Trust. Kurtzman Carson Consultants LLC provides administrative services and FTI Consulting, Inc., serves as the Debtor's Chief Restructuring Officer. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. * CFPB Chief Concedes Need for Balance in Auto-Loan Oversight ------------------------------------------------------------- Gabe Nelson, writing for Automotive News, reported that Richard Cordray, director of the Consumer Financial Protection Bureau, said he wants more "openness and transparency" for the agency's oversight of auto lending, but added that the agency still has strong concerns about how dealerships arrange loans. According to the report, the remarks, made during a Senate hearing this afternoon, were Cordray's most detailed public remarks on the subject, and showed an effort to strike a balance in the way the bureau regulates transactions in the auto market. On the one hand, the agency wants to flex its muscle in the market to protect consumers from abusive loan practices, the report said. But it also wants to extend an olive branch to dealers and auto lenders, who say the CFPB is pushing them into changing their loan practices without showing the data to explain why. Auto lending is a topic of "considerable sensitivity, it appears," Cordray said during the hearing of the U.S. Senate Banking Committee, the report related. "We're going to make sure that we're engaging with key stakeholders in that area," he added, the report cited. "I think that's an area where I would agree with some of the criticism. I'd like to have a little more openness and transparency, and we're going to provide that." * Stern Rights Can't Be Waived, Fifth Circuit Rules --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the The U.S. Supreme Court will hear argument on Jan. 14 in a case that seeks to determine whether someone can waive the right to have certain types of state-law claims be finally decided only by a life-tenured federal district judge. According to the report, the matter has divided lower courts. The U.S. Court of Appeals in New Orleans ruled on Nov. 11 that such a waiver is unavailable. The New Orleans case involved a company in Chapter 11 that sued a third party alleging violations of state law. Although the bankrupt said the case was non-core, it consented to a final ruling by the bankruptcy court while demanding a jury trial. When a jury trial was denied as being untimely, the bankrupt tried to withdraw its consent to a final ruling in bankruptcy court. The bankruptcy judge proceeded to try the case and entered final judgment against the bankrupt company, which lost on appeal in district court. On a second appeal to the Fifth Circuit in New Orleans, the bankrupt company won on the issue of waiver of so-called Stern rights. In Stern v. Marshall, the Supreme Court said some state-law claims can't be decided on a final basis in bankruptcy court. On Jan. 14, the justices will hear a follow-on case, Executive Benefits Insurance Agency v. Arkison, in which the question is whether Stern rights can be waived. The U.S. Court of Appeals in San Francisco ruled in Executive Benefits that such rights can be waived. Before that, the federal appeals court in Cincinnati ruled they can't. Meanwhile, the federal appeals court in Chicago wrote a lengthy opinion in August also concluding that Stern rights can't be waived. Writing for the New Orleans court, U.S. Circuit Judge Jerry E. Smith concluded that waiver is constitutionally impossible. He likened Stern rights to "structural interests" where waiver can't imbue constitutional authority for the same reason parties can't confer subject-matter jurisdiction when there is none. Judge Smith said his conclusion was bolstered by a decision in October by a different panel of the New Orleans court in Frazin v. Haynes & Boone LLP. Judge Smith didn't discuss the Chicago case reaching the same result as his opinion. The case is BP RE LP v. RML Waxahachie Dodge LLC (In re BP RE LP), 12-51270, U.S. Fifth Circuit Court of Appeals (New Orleans). The Supreme Court case on waiver is Executive Benefits Insurance Agency v. Arkison, 12-01200, U.S. Supreme Court (Washington). * PwC to Host Webcast "Companies in Distress" on November 19 ------------------------------------------------------------ Companies today face increasingly complex challenges, including evolving government regulation, economic uncertainty, heightened global competition and rapid technological changes. For many companies, the challenges will prove too daunting and financial and operational restructuring may be required. On Tuesday, November 19, at 1:00 p.m. ET, PwC will host a webcast, "Companies in distress: How to take control of business challenges," which will provide an overview of the typical cycle of a distressed company, including the leading indicators and actions management can take to turn the business around and prevent a bankruptcy filing. When faced with financial and operational troubles, it is often difficult for management to know what to do first and companies tend to wait too long to move forward with turnaround activities. Whether triggered internally or by marketplace dynamics, early detection and swift, decisive action are the keys to restoring performance and value. According to PwC, there are a number of early indicators of stress that should be considered and the earlier that these are identified, the sooner and more fulsome the turnaround can be. * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 ------------------------------------------------------------ Author: Jacob Streider Publisher: Beard Books Hardcover: 227 pages List Price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/UAP0Zb Quick, can you work out how much $75 million in sixteenth century dollars would be worth today? Well, move over Croesus, Gates, Rockefeller, and Getty, because that's what Jacob Fugger was worth. Jacob Fugger was the chief embodiment of early German capitalistic enterprise and rose to a great position of power in European economic life. Jacob Fugger the Rich is more than just a fascinating biography of a powerful and successful businessman, however. It is an economic history of a golden age in German commercial history that began in the fifteenth century. When the book was first published, in 1931, The Boston Transcript said that the author "has not tried to make an exhaustive biography of his subject but rather has aimed to let the story of Jacob Fugger the Rich illustrate the early sixteenth century development of economic history in which he was a leader." Jacob Fugger's family was one of the foremost family in Augsburg when he was born in 1459. They got their start by importing raw cotton, by mule, from Mediterranean ports. They later moved into silk and herbs and, for a long while, controlled much of Europe's pepper market. Jacob Fugger diversified into copper mining in Hungary and transported the product to English Channel and North Sea ports in his own ships. A stroke of luck led to increased mining opportunities. Fugger lent money to the Holy Roman Emperor Maximilian I to help fund a war with France and Italy. Mining concessions were put up as collateral. The war dragged on, the Emperor defaulted, and Fugger found himself with a European monopoly on copper. Fugger used his extensive business network in service of the Pope. His branches all over Europe collected payments due the Vatican and issued letters of credit that were taken to Rome by papal agents. Fugger is credited with creating the first business newsletter. He collected news of evolving business climate as well as current events from his agents all across Europe and distributed them to all his branches. Fugger's endeavors wee not universally applauded. The sin of usury was still hotly debated, and Fugger committed it wholesale. He was sued over his monopoly on copper. He was involved in some messy bribes in bringing Charles V to the throne. And, his lucrative role as banker in the sale of indulgences, those chits that absolve the buyer of sin, raised the ire of Martin Luther himself. Luther referred to Fugger specifically in his Open Letter to the Christian Nobility of the German nation Concerning the Reform of the Christian Estate just before being excommunicated in 1521. Fugger went on, however, to fund Charles V's war on Protestanism and became even richer. Fugger built many churches and buildings in Augsburg. He was generous to the poor and designed the world's first housing project. These buildings and lovely gardens, called the Fuggerei, are still in use today. A New York Times reviewer said that Jacob Fugger the Rich, a book "concerned with the most famous, most capable, and most interesting of all [the members of the Fugger family] will be as interesting for the general reader as for the special student of business history." This observation is just as true today as in 1931, when first made. Jacob Streider was a professor of economic history at the University of Munich. ********* 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 ***