/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131212.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 12, 2013, Vol. 17, No. 344 Headlines 30DC INC: APP Now Available for Download on Apple Newsstand 555 PERKINS: Case Summary & 20 Largest Unsecured Creditors 1250 OCEANSIDE: Hokuli'a Project Sets March 3 Confirmation ADAYANA INC: Sells Business in Exchange for Secured Debt ALPHA NATURAL: S&P Lowers CCR to 'B'; Outlook Stable ALTERNET SYSTEMS: Files Amendment to 2012 Annual Report AMERICAN AIRLINES: Southwest Acquires 12 Slots at LaGuardia AMERICAN AIRLINES: Provides Details on Equity Distribution AMERICAN AIRLINES: Unveils Conversion Rate for Convertible Notes AMERICAN AIRLINES: Fitch Hikes Ratings to B+ on Bankr. Emergence AMERICAN AIRLINES: Fitch Hikes $156MM Cert. Rating to 'BB+' AMERICAN AIRLINES: S&P Assigns 'B' CCR After Ch. 11 Emergence AMERIFORGE GROUP: S&P Affirms 'B+' CCR on First Lien Sr. Loan ANIXTER INT'L: Fitch Affirms 'BB' IDR & Subsidiary Rating BERNARD L. MADOFF: Claim That Founder Acted Alone Was Falsehood BH S&B HOLDINGS: 2nd Cir. Revives Suit by Steve & Barry's Workers BIG LOTS: Store Chain to Shut Down, 600 Workers May Lose Jobs BOREAL WATER: Files 4th Amendment to 2012 Report BUILDING #19: Dec. 12 Final Hearing on Access to Cash Collateral CAPITOL BANCORP: Incurs $5.8-Mil. Net Loss in Third Quarter CASH STORE: Files Copy of $32.5 Million Credit Agreement CE GENERATION: Fitch Affirms 'BB-' Ratings on $400MM Notes CHRISTIAN BROTHERS: Sexual-Abuse Plan Out for Vote CHURCHILL DOWNS: S&P Assigns 'BB' CCR & Rates New Notes 'BB' CLUB AT SHENANDOAH: GECC Says Proposed Auction Will Delay Case CLUB AT SHENANDOAH: Cash Collateral Hearing Continued to Jan. 14 COMMENSAL SEC: Acquired by Imvescor Unit DARLING ACQUISITION: Acquisition Brings Downgrade to Ba2 DIVERSINET CORP: Applies to End Reporting Issuer Status DUMA ENERGY: Acquires 100% Equity of Hydrocarb DUMA ENERGY: Hydrocarb CEO Holds 14.9% Equity Stake EAST COAST BROKERS: Ch.11 Trustee Authorized to Sell Red Rose Inn EXCEL MARITIME: Confirmation Hearing Set for Jan. 27 EXTREME REACH: S&P Assigns Preliminary 'B' CCR; Outlook Stable FIRST PHYSICIANS: D. Hirschhorn Quits as CEO, All Other Positions FISKER AUTOMOTIVE: Judge Raises Concerns on Race Through Ch. 11 FISKER AUTOMOTIVE: Plan Heading for Jan. 3 Confirmation Hearing FRIENDFINDER NETWORKS: Plan's Bar to Investor Suits Opposed by SEC FRIENDFINDER NETWORKS: Common Stock Securities Delisted by NASDAQ FURNITURE BRANDS: Debtor Taps Graham to Lead Liquidation GENERAL MOTORS: Names Product Chief Mary Barra as Next CEO GENERAL MOTORS: To End Manufacturing in Australia GENERAL MOTORS: 'New' GM Doesn't Owe $450MM Retiree Payment GENIUS BRANDS: A Squared's Andy Heyward Touts Merged Company GLOBAL AVIATION: Has $51-Mil. Loan From Intended Buyer Cerberus GMX RESOURCES: Plan Confirmation Hearing Set for Jan. 21 GORDIAN MEDICAL: Court Allows Creditors to File Suit v. Owners GRAND CENTREVILLE: Wants Until Feb. 13 to File Chapter 11 Plan GRAND CENTREVILLE: Jan. 15 Hearing on Case Dismissal Bid GULFSTREAM INT'L: Officers Pay $1.9-Mil. From Insurance to Settle HOUSTON REGIONAL: Comcast Blasts Astros Owner's Suit HOSPITALITY STAFFING: AIG Objects to Sale of Company to Lenders INTEGRA TELECOM: S&P Raises Rating to 'B+'; Outlook Stable IPALCO ENTERPRISES: S&P Lowers ICR to 'BB+' & Removes from Watch IZEA INC: CEO Buys 11,000 Common Shares JOHN A. ROCCO: Ch.7 Trustee Wins Judgment Against Peachtree KEYSTONE AUTOMOTIVE: S&P Puts 'B' CCR on CreditWatch Positive LEHMAN BROTHERS: Hipotecas Wants LBHI Trustee to Turn Over Docs LEHMAN BROTHERS: Belik May Pursue PI Claim Against Insurer LEHMAN BROTHERS: Renews $30.7-Mil. Suit vs. Americredit LEHMAN BROTHERS: Thomas Appeals Order Disallowing Claim v. LBI LEVI STRAUSS: Fitch Hikes Issuer Default Rating to 'BB-' LIFECARE ST. JOHNS: Files Cash Collateral Budget Thru March 2014 LIGHTSQUARED INC: Suit Against Ergen Avoids Dismissal LIGHTSQUARED INC: Centerbridge Reaches Tentative Deal MADHAV INVESTMENTS: Voluntary Chapter 11 Case Summary MANTARA INC: Deutsche Bank Buys Assets for $1.25 Million MAXCOM TELECOM: Capital Increase Will Be 2.23-Bil. Pesos MICHAELS STORES: Amends Q1 and Q2 Quarterly Reports MJC AMERICA: Soleus Air System Files for Ch.11 in Los Angeles MJC AMERICA: Case Summary & 20 Largest Unsecured Creditors NEFF RENTAL: S&P Lowers Rating on $200MM Notes to 'CCC+' NIRVANIX INC: Wins Access to Cash Collateral Until Jan. 11 NIRVANIX INC: Wants Settlement Between Panel and Lenders Approved NNN 3500: Jan. 22 Hearing on Adequacy of Disclosure Statement NORTEL NETWORKS: Delaware Court Tosses SNMP Suit Against Radware NORTH TEXAS BANCSHARES: Texas Bank Owner Wins Bankruptcy Auction NXT ENERGY: Has C$2.52-Mil. Net Loss for Q3 Ended Sept. 30 OHANA GROUP: Has Until Jan. 16 to Solicit Plan Votes OMNITRACS INC: S&P Assigns 'B' CCR & Rates $445MM Loan 'B+' ORMET CORP: Libertas, Int'l Metal Submit Offers for Assets OVERSEAS SHIPHOLDING: Creditors Move to Curb Exclusivity Extension PATRIOT COAL: Copy of Presentation to Potential Lenders PETAQUILLA MINERALS: Incurs $2.14-Mil. Net Loss in Third Quarter PLUG POWER: In Talks With Large Customers on GenDrive POLYMER GROUP: S&P Assigns 'B' Rating to Proposed $295MM Sr. Loan QEP RESOURCES: S&P Revises Outlook to Negative & Affirms 'BB+' CCR QUEEN ELIZABETH REALTY: Survives Case Dismissal Bid RACHEL E. SITACA: 2010 Honda Civic to Be Auctioned Off Dec. 31 ROBERTS LAND: Plan Confirmation Hearing Rescheduled for Feb. 5 ROSETTA GENOMICS: New York State OKs Rosetta Kidney Cancer Test ROUNDY'S SUPERMARKETS: S&P Affirms 'B-' Corp. Credit Rating RURAL/METRO CORP: Pa. Dept. of Revenue Objects to Plan SAVIENT PHARMACEUTICALS: Lenders Negotiate Deal w/ Unsecured Panel SAVIENT PHARMACEUTICALS: Agrees to Sell Itself to Crealta SEARS HOLDINGS: Baker Street Held 10.8% Equity Stake at Nov. 27 SELECT TREE: U.S. Trustee Adjourns Meeting of Creditors to Feb. 10 SHOTWELL LANDFILL: Creditor Wants Claim Allowed to Vote on Plan SIMPLY WHEELZ: Catalyst Makes Top Bid for Advantage Rent A Car SNOHOMISH COUNTY: Fitch Affirms 'B' Rating on $2.3MM LTGO Bonds SOUTHERN TITLE: Faces Liquidation Amid Embezzlement Case SPRINT CORP: Fitch Rates Proposed Sr. Unsecured Notes 'B+/RR4' SPRINT CORP: S&P Assigns 'BB-' Rating to Proposed Senior Notes STAR DYNAMICS: To Seek Approval of First-Day Motions Today STAR DYNAMICS: To Sell Assets in Chapter 11 Amid BAE Suit STAR DYNAMICS: Section 341(a) Meeting Scheduled for Jan. 16 STAR DYNAMICS: Case Summary & 20 Largest Unsecured Creditors STELLAR BIOTECHNOLOGIES: "C. diff" Patents Issued in U.S., China STEVE & BARRY'S: 2nd Circ. Revives WARN Suit v. Parent SUNTECH POWER: Bondholders Face Off Over Bankruptcy Case TABERNACLE CHURCH OF BOSTON: Voluntary Chapter 11 Case Summary TELECOMMUNICATIONS MGMT: Downgraded to B Corporate TENGION INC: Reports $7.26-Mil. Net Loss in Sept. 30 Quarter TWIN DEVELOPMENT: Trustee Wants Fees Paid When Case Is Dismissed U.S. FOODS: S&P Puts 'B' CCR on CreditWatch Positive UNITED RENTALS: S&P Raises CCR to BB- & Removes Rating from Watch VIOLIN MEMORY: Incurs $34.11-Mil. Net Loss in Oct. 31 Quarter WEST AIRPORT: WAP Holdings' Motion to Prohibit Cash Use Denied WESTERN FUNDING: Auction on Dec. 18; Plan Hearing 2 Days Later WORLD TRADE BUSINESS: Must Surrender Leased Premises to Landlord YRC WORLDWIDE: Continues to Execute Long-Planned Refinancing Plan ZALE CORP: Stockholders Elect Nine Directors * Overpayment of Spousal Support Held Non-Dischargeable * FDIC OKs Publication Of Strategy for Big Bank Wind-Downs * Volcker Rule Challenges Wall Street * House, Senate Negotiators Reach Budget Deal * Recent Small-Dollar & Individual Chapter 11 Filings ********* 30DC INC: APP Now Available for Download on Apple Newsstand ----------------------------------------------------------- 30DC, Inc.'s MagCast App "30DC Investor Relations Magazine" is available for download and subscription on Apple Newsstand. The Magazine features information about 30DC's products and services, corporate and investor relations information, as well as contributions from a variety of experts regarding important topics that affect digital self-publishing. Examples of prominent topics to be covered regularly are mobile computing trends and self-publishing industry success stories. The App demonstrates a real world example of how MagCast can be used by self publishers, and online entrepreneurs, interested in developing digital magazines and selling digital products. In creating its digital magazine App, the Ccompany is utilizing its own self publishing tools to target a broad audience including current shareholders, potential investors, content creators and content consumers who understand the power of digital publishing. 30DC Investor Relations Magazine Is a free publication available on Apple Newsstand by subscription only and can be accessed via the following link: https://itunes.apple.com/us/app/30dcir-mag/id737655178?mt=8 About 30DC Inc. New York-based 30DC, Inc., provides Internet marketing services and related training to help Internet companies in operating their businesses. It operates in two divisions, 30 Day Challenge and Immediate Edge. 30DC's annual report for the fiscal year ended June 30, 2012, shows net income of $32,207 on $2.91 million of total revenue as compared with a net loss of $1.44 million on $1.89 million of total revenue the year before. The Company's balance sheet at March 31, 2013, showed $2.84 million in total assets, $2.13 million in total liabilities and $717,251 total stockholders' equity. Marcum LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has a working capital deficit and stockholders' deficiency as of June 30, 2012. 555 PERKINS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 555 Perkins, LLC PO Box 69 Arlington, TN 38002 Case No.: 13-33324 Chapter 11 Petition Date: December 10, 2013 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Hon. Jennie D. Latta Debtor's Counsel: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 2700 One Commerce Square Memphis, TN 38103 Tel: (901) 525-1455 Fax: (901) 526-4084 Email: snd@harrisshelton.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Glen Bascom, Sr., managing partner. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/tnwb13-33324.pdf 1250 OCEANSIDE: Hokuli'a Project Sets March 3 Confirmation ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the reorganization plan for the 1,800-acre Hokuli'a development near Kona on the island of Hawaii will be up for approval at a hearing to be held March 3, under a schedule approved at a Dec. 9 hearing by a U.S. bankruptcy judge in Honolulu. According to the report, at this week's hearing, the judge approved disclosure materials explaining the plan, according to court records. The delay for the confirmation hearing is designed to allow time for an investigation by creditors opposing the plan. The judge rejected most objections to the disclosure statement, saying they are properly objections to plan approval at the confirmation hearing. The resort originally received approval in October to solicit acceptances of a plan. Votes weren't taken because lot owners started a lawsuit asking the court to subordinate the $627 million secured claim acquired from Bank of Scotland in December 2012 by Sun Kona Finance I LLC. Before this week's approval of the disclosure statement, the plan was revised to account for the suit. The reorganization proposal would give ownership to Sun Kona in exchange for debt. The disclosure statement shows the property as being worth about $40 million. The county has a $20 million mortgage ahead of the Sun Kona debt. Sun Kona will waive the unsecured deficiency portion of its claim. The revised plan will pay off the county's loan when it matures in March. The plan provides that the property can't be sold until the validity of Sun Kona's claim is decided. In the meantime, there will be no payment toward the $33.7 million in unsecured claims, composed largely of $32 million sought by lot owners. The plan deals with a $15.8 million mortgage held by Ackerman Ranch Inc. by giving the lender a deed to property estimated to be worth $8.5 million. The project has 3.5 miles (5.6 kilometers) of waterfront on the Kona coast and was to have 730 residential units, a golf course, club and other amenities. It was originally developed by Lyle Anderson, who lost his interest in the property. Debt is attributable partly to other Anderson projects in Arizona, New Mexico and Scotland. When the bankruptcy began, the project's owner said the properties were valued at $68.1 million. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine, LLC, and Pacific Star Company, LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. Simon Klevansky, Esq., Alika L. Piper, Esq., and Nicole D. Stucki, Esq., at Klevansky Piper, LLP, represent the Debtor in its restructuring effort. They replaced the law firm of Gelber, Gelber & Ingersoll as general counsel. 1250 Oceanside Partners, its affiliates and lender Sun Kona Finance I LLC, won court approval of the disclosure statement explaining a reorganization plan that would turn over ownership to its secured lender. Sun Kona would provide a $65 million exit facility to help make payments under the plan and to fund the reorganized company when it leaves court protection. A creditors committee has not been appointed. James A. Wagner, Esq., and Allison A. Ito, Esq., at Wagner Choi & Verbrugge, represent creditor Sun Kona Finance I, LLC, as counsel. ADAYANA INC: Sells Business in Exchange for Secured Debt -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Adayana Inc., the owner of two outsourced training providers, received authority from the bankruptcy court in Indianapolis to sell the business to the secured lender in exchange for debt. According to the report, the buyer AVX Learning Inc. also will pay the cost of curing defaults on contracts. The company, which filed for Chapter 11 protection in October, provides services to the automotive, agribusiness and health-care industries, as well as the federal government. Official lists show assets with a value of $12 million and debt totaling $14.9 million, including $13.3 million in secured debt owing to ComVest Capital II LP. About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. ALPHA NATURAL: S&P Lowers CCR to 'B'; Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Bristol, Va.-based Alpha Natural Resources Inc. to 'B' from 'B+'. The rating outlook is stable. S&P also lowered its issue-level rating on Alpha's senior secured term loan due 2020 to 'BB-' (two notches higher than the corporate credit rating) from 'BB'. The recovery rating on the term loan remains '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of payment default. In addition, S&P lowered its ratings on Alpha's $500 million senior unsecured notes due 2018, $800 million senior unsecured notes due 2019, $700 million senior unsecured notes due 2021, and $345 million 3.75% convertible notes due 2017 to 'B-' (one notch lower than the corporate credit rating) from 'B+'. S&P also revised its recovery ratings on those notes to '5' from '4'. The '5' recovery rating indicates S&P's expectation for modest (10% to 30%) recovery in the event of payment default. At the same time, S&P lowered its rating on Massey Energy Co.'s 3.25% convertible notes due 2015 to 'CCC+' (two notches lower than the corporate credit rating) from 'B' S&P also revised the recovery rating on those notes to '6' from '5'. S&P also lowered the rating on Alpha's 2.375% convertible notes due 2015 to 'CCC+' from 'B-'. The recovery rating on those notes remains '6'. S&P's '6' recovery rating on the Massey and Alpha convertible notes indicates its expectation of negligible (0% to 10%) recovery in the event of payment default. The downgrade reflects S&P's view that Alpha's operating earnings and leverage measures will remain weak in 2013 and 2014, with EBITDA below $500 million and debt to EBITDA in excess of 8x each year, and S&P believes measures will only improve modestly in 2015 as coal markets slowly improve. These measures are indicative of a "highly leveraged" financial risk profile. Still, S&P's stable outlook reflects its view that the company will continue to maintain high cash and revolving liquidity balances (currently estimated to be between $1.5 billion and $2 billion), providing it with strong liquidity to withstand difficult market conditions if the current downturn persists for another year or two. "The stable outlook reflects our view that Alpha will maintain strong liquidity to weather very weak coal markets despite its high leverage, which we expect to exceed 8x in 2014," said Standard & Poor's credit analyst Megan Johnston Rand. S&P could consider lowering the rating if it saw Alpha's liquidity position begin to deteriorate, such that it no longer deemed liquidity to be strong. This could occur if Alpha were unable to continue to reduce costs and capital spending and began to burn cash, or if it was unable to refinance its maturities in a timely manner. Although unlikely in the near term, S&P would consider a higher rating if coal demand improved and it became clearer that the negative trend in key credit measures would reverse, leading to leverage below 5x. ALTERNET SYSTEMS: Files Amendment to 2012 Annual Report ------------------------------------------------------- Alternet Systems, Inc., filed with the U.S. Securities and Exchange Commission an amendment to Form 10-K on Dec. 3, 2013, for the year ended Dec. 31, 2012. StarkSchenkein, LLP, expressed substantial doubt about Alternet Systems, Inc.'s ability to continue as a going concern, citing the Company's recurring losses from operations and net capital deficiency. The company reported a total comprehensive loss of $3.33 million on $1.36 million of revenues for the year ended Dec. 31, 2012, compared to a total comprehensive loss of $2.44 million on $1.21 million of revenues in Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2012, showed $3.3 million in total assets, $4.75 million in total liabilities, and stockholders' deficit of $1.45 million. "The entity has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern," according to StarkSchenkein, LLP, the independent auditors. A copy of the Form 10-K is available at: http://is.gd/B8Q6BQ Miami, Florida-based Alternet Systems, Inc., has, since late 2009, focused its investment and operational expertise on the mobile value added services markets of mobile financial transactions and security. AMERICAN AIRLINES: Southwest Acquires 12 Slots at LaGuardia ----------------------------------------------------------- Southwest Airlines has acquired 12 takeoff and landing slots (for six roundtrip flights) at New York's LaGuardia Airport (LGA) being divested by American Airlines as part of its merger with US Airways. In addition, Southwest gained permanent control of 10 takeoff and landing slots (for five roundtrip flights) that it currently operates under a lease from American. Details of the transactions are confidential. Southwest plans to begin its new service at LGA in May 2014. Details of the new service will be available later this month. Southwest and its subsidiary AirTran Airways currently operate 27 daily roundtrip flights to and from LGA to eight nonstop destinations. The acquired slots will allow the airlines to add six daily roundtrips. About Southwest Airlines In its 43rd year of service, Dallas-based Southwest Airlines continues to differentiate itself from other carriers with exemplary Customer Service delivered by nearly 46,000 Employees to more than 100 million Customers annually. Southwest is the nation's largest carrier in terms of originating passengers boarded, and including wholly-owned subsidiary, AirTran Airways, operates the largest fleet of Boeing aircraft in the world to serve 96 destinations in 41 states, the District of Columbia, the Commonwealth of Puerto Rico, and five near-international countries. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. 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: Provides Details on Equity Distribution ---------------------------------------------------------- AMR Corporation and US Airways Group, Inc. early this month said they are providing details over the course of the equity distribution period that investors and creditors may find useful, corresponding to each of the key equity distribution dates under AMR's Plan of Reorganization (Plan) and the companies' Agreement and Plan of Merger (Merger Agreement). The companies are providing an estimate of the total number of shares of American Airlines Group Inc. common stock that may be issued pursuant to the Plan and the Merger Agreement. Upon closing of the merger contemplated by the Merger Agreement, the common and preferred shares to be issued by American Airlines Group Inc. will trade on the NASDAQ Global Select Market under the ticker symbols "AAL" and "AALCP," respectively, and will be issued to former US Airways Group, Inc. common shareholders and to AMR Corporation stakeholders as indicated under the Plan. Using the price of $23.4815 per share calculated from the 20 trading day average closing price of US Airways Group, Inc. common stock beginning November 1, 2013 and ending November 29, 2013, or the Share Determination Date, US Airways Group, Inc. has a fully diluted share count as defined in the Merger Agreement of 211,698,617 shares. Therefore, under the Merger Agreement the number of shares available for AMR stakeholders will be 544,361,824 and the total AAL share count will be 756,060,441. 20 Trading Day Average Close Price $23.4815 US Airways Fully Diluted Shares 211,698,617 Shares for AMR Stakeholders 544,361,824 Total AAL Common Share Count 756,060,441 1/Per definition in Merger Agreement Pursuant to the Plan, shares of AAL common stock will be distributed to AMR stakeholders over time, principally over the 120 day period beginning at the date of closing of the merger, which is expected to be December 9, 2013. American Airlines Group Inc. will provide updates as to the number of shares outstanding as of closing and at the subsequent distribution dates. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. 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: Unveils Conversion Rate for Convertible Notes ---------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., announced at the end of November the applicable Conversion Rate for holders of Allowed AMR General Unsecured Guaranteed Claim in AMR Class 3 with respect to the 6.25% Convertible Senior Notes due 2014 (CUSIP # 001765BC9) and the 4.5% Convertible Notes due 2024 (CUSIP # 001765BB1) issued by AMR. Pursuant to Section 5.15 of the Fourth Amended Joint Chapter 11 Plan of AMR and its related debtors, dated September 23, 2013 (as the same may be amended, supplemented, or modified from time to time, the "Plan"), and the corresponding Election Instructions previously provided (the "Election Instructions"), any holder of an Allowed Convertible Note Claim has the right to irrevocably elect to have all or any portion of its Allowed Convertible Note Claim treated under the Plan as an Allowed AMR Equity Interest in AMR Class 5 as a result of the "deemed conversion" of the Convertible Notes to which the Allowed Convertible Note Claim relates into a number of shares of AMR Common Stock (a "Conversion Election"). Assuming an Effective Date of December 9, 2013, if a valid Conversion Election is made with respect to an Allowed Convertible Note Claim, the Convertible Notes underlying the portion of the Allowed Convertible Note Claim with respect to which such Conversion Election is made (such Convertible Notes, the "Convertible Election Notes"), which portion can be any amount up to the full amount of the Allowed Convertible Note Claim, will be treated under the Plan as an Allowed AMR Equity Interest in AMR Class 5 in an amount that corresponds to the number of shares of AMR Common Stock that would have been issued upon conversion of the Convertible Election Notes, as calculated pursuant the Plan as described in the Election Instructions. For these purposes, the deemed Conversion Rate (as applicable, the "Conversion Rate"): * for the 6.25% Convertible Senior Notes due 2014 (CUSIP # 001765BC9) will be 109.5784 shares of AMR Common Stock per $1,000 of principal amount thereof; and * for the 4.5% Convertible Notes due 2024 (CUSIP # 001765BB1) will be 47.8155 shares of AMR Common Stock per $1,000 of principal amount thereof. The deadline for making elections to have Convertible Note Claims treated as Allowed AMR Equity Interests in AMR Class 5 is 5:00 P.M., New York City Time, on Friday, November 29, 2013, unless extended by AMR. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. 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: Fitch Hikes Ratings to B+ on Bankr. Emergence ---------------------------------------------------------------- Fitch Ratings has upgraded the ratings for American Airlines Group Inc. (AAG) and its primary operating subsidiary, American Airlines, Inc. to 'B+' upon the company's expected emergence from bankruptcy and merger with US Airways. Fitch has affirmed the existing ratings for US Airways Group, Inc. and US Airways Inc. at 'B+' following the completion of the merger with American Airlines, equalizing the ratings for all entities in the merged company. The Rating Outlook is Stable. Fitch has also upgraded the ratings on American's senior secured credit facility and revolver to 'BB+/RR1' from 'BB-/RR1', US Airways' senior unsecured notes to 'B+/RR4' from 'B-/RR6', and US Airways' unsecured convertible notes to 'B-/RR6' from 'CCC+/RR6'. A full ratings list is shown below. Fitch will be reviewing the existing ratings for various enhanced equipment trust certificates (EETCs) issued by US and American. Those ratings will be updated within the next several business days. The ratings are supported by the significant structural improvements achieved at American through the bankruptcy process which have resulted in improving operating results, the strong recent operating performance of US Airways, and expectations that credit metrics will improve quickly from current levels. The merger between US and American is also expected to produce a single carrier with a broad route structure that is expected to produce material revenue synergies and is much better suited to compete with its large domestic rivals, United and Delta. The projected liquidity position also supports the ratings. In the near term Fitch remains cautious about the risks involved with executing a merger of this size and complexity. Current ratings are also limited by remaining uncertainties around long- term labor costs to be negotiated through joint collective bargaining agreements, management's priorities around cash deployment, and the unproven nature of the effectiveness of the newly combined route structure. In addition to integration risks, Fitch notes that the airline industry remains highly cyclical and vulnerable to external shocks. The ratings incorporate Fitch's analysis of various stress scenarios including demand and fuel shocks, in which future results can decline quickly due to the high amount of operating leverage present in the business. Fitch also notes that there are remaining uncertainties around certain aspects of American's management strategy going forward such as fuel hedging and leverage targets. The board of directors of the merged company also includes new members elected by various creditor groups, and their strategic priorities are yet to be clarified. Key Ratings Drivers: Improving Operating Performance Fitch expects operating performance for the combined carriers to continue to improve over the intermediate term based on a stable demand environment, synergies expected to be achieved through the merger, and cost reductions achieved in bankruptcy. For American, labor costs through the first nine months of 2013 were 16% lower than in the comparable period in 2012, and are now competitive with industry peers. In addition, the company refinanced a large amount of high yield debt, shed some debt outright, and renegotiated contracts with many of its vendors. In total, American expects to achieve cost savings averaging $2 billion per year through the end of 2017 due to the bankruptcy process. Benefits of American's restructuring are already apparent, with the company posting better operating results thus far in 2013. Cost improvements paired with an improving demand environment allowed AMR to produce an EBITDA margin of 9.2% for the LTM period ended Sept. 30, 2013, compared to 6.1% for full year 2012. US Airways is also performing well, generating consistent unit revenue growth and keeping costs in check to produce some of the better results seen in the industry in recent years. Through the first nine months of 2013, US Airways' consolidated PRASM was up by 1.8%, which lagged the industry average, though the pace of the company's unit revenue growth picked up in the second half of the year. Meanwhile, CASM ex-fuel increased by a moderate 0.9% leading to an EBITDA margin (calculated by Fitch) of 10.8% for the LTM period ended Sept. 30,2013, up from 8.3% in the same period a year ago. Looking forward, Fitch expects the new American to add little capacity over the coming year aside from seats added through upgauging to larger narrow-body aircraft. Limited capacity additions combined with a growing demand environment should produce steady unit revenue growth over the near term. Metrics Expected To Improve Credit metrics for the combined company are expected to be roughly in line with its 'B' and 'B+' rated North American peers at the time the merger closes. Fitch's base forecast anticipates that metrics could improve quickly over the next 1-2 years, as synergies are realized and the company pays down debt. Fitch calculates AAG's combined adjusted debt/EBITDAR (adjusted for all operating leases) at 5.75x as of Sept. 30, 2013, and Fitch anticipates leverage at the end of 2013 could be 5.2x-5.4x. Leverage could decrease by as much as a full turn compared to Sept. 30, 2013 levels by the end of 2014, if the macroeconomic environment remains healthy, and if synergies are realized as expected. Expectations for improved cash flow: Fitch forecasts that free cash flow (FCF) for the combined airlines could turn positive in 2014. FCF at American Airlines has been sharply negative over the past several years reflecting high fuel prices, a high cost structure, weak operating results, and bankruptcy related charges. Fitch expects pro-forma FCF for the combined companies to be negative by $1 billion or more for 2013. Going forward, cost improvements and revenue synergies are expected to provide a boost to cash flow, with Fitch forecasting positive FCF in 2014 and 2015. However, the forecast is sensitive to fuel prices and stable demand for air travel. American has significant upcoming capital spending requirements for aircraft deliveries, which could pressure FCF if operating results come in weaker than expected. Strengthened Network Fitch believes that the benefits provided by the combined American/US route structure are supportive of the rating, and that the combined companies will ultimately be healthier than either US or AMR on a stand-alone basis. The merged company will be the largest airline in the world as measured by ASMs, which is important in an industry where scale has strategic value. The domestic networks of these two carriers featured relatively little overlap prior to the merger, allowing the combined companies to provide significantly expanded connecting opportunities. In particular, American will benefit from US's ability to connect passengers up and down the East Coast. Stand- alone US Airways had relatively limited international capacity. Nevertheless, US Airways flies to several secondary European cities where American currently does not operate, strengthening the company's position in the Atlantic market. AAG also stands to benefit from a strengthened oneworld Alliance, which will improve its share of global available seat miles relative to the other major alliances both through the addition of US Airways (which will join oneworld from the Star Alliance in March 2014) and from the March 2014 addition of TAM (also formerly of the Star Alliance). While the combined network is expected to be significantly stronger than either the American or US Airways networks on a stand-alone basis, Fitch remains cautious about the carriers' ability to generate a revenue premium. Fitch notes that United Airlines has struggled to generate revenue growth in excess of its peers following the merger of United and Continental in 2010, despite its enviable route network. The ultimate success of the combined networks should become clearer as the companies move further through the integration process. Restructured Fleet The company's fleet renewal efforts are expected to provide cost benefits in the long run. American is scheduled to take delivery of 248 aircraft between 2014-2017, including 80 737s and 110 A320 family aircraft which will be used to replace American's fleet of aging MD-80s. New deliveries will require a heavy capital commitment in the coming years; however, the cost benefits of new generation aircraft compared to American's existing narrow body fleet are expected to be significant. New generation narrow bodies can burn as much as a third less fuel per ASM compared to American's MD-80s, which is an effective way of managing the airline's largest expense. The 737s and A320s will also feature more seats than the MD-80s, helping to lower operating expenses per available seat. US Airways brings attractive aircraft to the combined fleet. The company has largely completed its fleet renewal effort in recent years, taking delivery of more than 75 aircraft since 2008, primarily consisting of narrowbody A321s used to replace/upgauge LCC's 737 classics and older A320s. American's new scope agreement with its pilots, which allows the company to fly more large regional jets (RJs), is also expected to be beneficial from a revenue and unit cost standpoint in coming years. The previous pilot agreement set a limit of regional jets with more than 50 seats at 47 aircraft, whereas the new collective bargaining agreement sets the limit at 40% of the company's narrowbody fleet size in 2016. Larger, 70 and 90 seat RJs are much more efficient on a unit cost basis compared the smaller 50 seat RJs which are ill-suited to deal with jet fuel prices hovering around $3.00/gallon as they have in recent years. The addition of larger gauge regional jets will allow the company to match capacity with route demand and better compete with United and Delta which began adding larger regional jets as a key component of their fleet plans in recent years. Strong Liquidity The combined companies will enter 2014 with a sizeable liquidity balance, which is supportive of the ratings and provides protection to the downside. As of Sept. 30, 2013, US Airways and American Airlines had a combined cash balance of more than $10 billion. Upon emergence from bankruptcy American will also have access to a $1 billion committed revolving credit facility secured earlier this year. Fitch estimates total available liquidity including the company's undrawn revolver is equivalent to 28.4% of LTM revenue, the highest among North American carriers. American is also expected to have an unencumbered asset base of more than $3 billion. However, the largest component of the balance will consist of international slots, gates, and routes. Fitch views these assets cautiously as collateral since valuations can vary widely. In contrast, Southwest Airlines has unencumbered aircraft valued at nearly $7 billion. AAG will likely build its unencumbered asset base over the next few years as its pays down existing debt, and takes delivery of new aircraft, some of which may be paid for with cash. Fitch expects the emergence/merger process to be cash intensive; however, the company's current cash balance is expected to be more than sufficient to cover near-term needs. American forecasts immediate cash needs of roughly $1 billion, and an estimated $1.2 billion of merger related expenses to be spread over the next three years. The company also has a sizeable aircraft delivery schedule in the coming years, with total capital expenditures expected to exceed $3 billion in 2014 (a portion of which has been pre-funded through EETC issuances) and more than $4 billion in 2015. Improved Balance Sheet American's debt structure has improved through the bankruptcy process although the combined company will remain highly leveraged. Fitch expects AAG will continue to reduce debt balances over the next several years. The restructuring process eliminated $2.5 billion in unsecured and tax exempt debt, which the company estimates will lead to $1.3 billion in interest and principal savings through 2017. American also successfully refinanced more than 80 aircraft that were previously encumbered under high yield EETCs, secured notes and bank loans, with two favorably priced EETC issuances. US Airways also accessed the capital markets during the year, securing a $1.6 billion term loan and issuing $500 million in unsecured notes, creating a sizeable cash balance. In addition, AMR renegotiated the financing of some 400 aircraft which it expects to reduce cash obligations by more than $1 billion through 2017. Reduced rental payment will serve to reduce off-balance sheet debt. Fitch estimates that the combined on- balance sheet debt for the two companies as of Sept. 30, 2013 totals roughly $16.5 billion. Separately, American achieved relief from its pension obligations through the bankruptcy process. American's pilot B plan was terminated outright while all other plans were frozen. The pension changes reached in bankruptcy will help to reduce cash commitments going forward. US Airways has no meaningful pension obligations. Reduced Risks From Labor Through its bankruptcy process, American was able to reach new collective bargaining agreements with each of its major labor groups. The company's inability to come to terms with its labor unions was one of the primary reasons for its bankruptcy filing, so having new agreements in place represents a major milestone. A memorandum of understanding is also in place which determines the process for establishing a combined seniority list for the US/American pilot groups, something that has been a sticking point in previous airline mergers. Fitch notes that joint collective bargaining agreements (JCBAs) between the US and American labor groups must still be negotiated once the two companies are farther along in the integration process. The JCBAs will ultimately determine the increases in labor costs that the company will have to shoulder in the coming years, leaving some risk that higher salaries could pressure margins over the intermediate term. Fitch expects more clarity around this subject as the various labor groups move through the bargaining process in the next 1-2 years. Modestly Growing Operating Environment Fitch expects modestly growing demand for air travel in North America in 2014, with traffic expected to rise in the low single digits driven by steady, albeit slow, macroeconomic growth. Fitch anticipates U.S. GDP to grow 2.6% in 2014, with GDP being highly correlated to demand for air travel. Stable demand trends combined with minimal capacity expansion should foster a healthy operating environment for the North American airlines. Domestic traffic was resilient in 2013 despite a lackluster macroeconomic environment and headwinds generated by reduced government spending. Domestic revenue passenger miles (RPMs) were up by 1.7% through October, having posted a year-over-year increase in all but one month in 2013, while international traffic was up 2.5%. Recovery Ratings: The notching for American's secured debt (see below) reflects Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. Senior debt which is secured both by aircraft and non-aircraft collateral (including slots, gates, routes, ground equipment, etc.) is expected to receive substantial recovery (91%-100%, implying a rating of 'RR1') in a default scenario. Senior unsecured notes at US Airways are expected to exhibit average recovery prospects of between 31%-50%, equal to a Recovery Rating of RR4. Therefore the senior unsecured debt is rated equal to the airline IDR. Rating Sensitivities: Fitch could consider a positive rating action if merger related synergies outperform management's expectations, and if adjusted leverage declines notably from current levels. Fitch would also look for American to generate sustained unit revenue growth on par with or in excess of peers. Successful control over cost inflation particularly related to labor, will also be a key factor in a potential future upgrade. Fitch will also look for more clarity on certain management strategies, including cash deployment priorities, fuel hedging, and liquidity and leverage targets. A negative rating action is not anticipated at this time. However, Fitch could consider revising the ratings downward if the company were to experience significant/sustained integration related difficulties. The ratings could also be pressured by an unexpected demand or fuel price shock that materially impacts operating results. Fitch has taken the following rating actions: American Airlines Group Inc. -- IDR upgraded to 'B+' from 'D'. American Airlines, Inc. -- IDR upgraded to 'B+' from 'D' -- Senior secured credit facility upgraded to 'BB+/RR1' from 'BB- /RR1' -- 1st lien senior secured notes rated 'BB+/RR1' US Airways Group, Inc. -- IDR affirmed at 'B+', -- Senior Unsecured Notes upgraded to 'B+/RR4' from 'B-/RR6' -- Senior Unsecured Convertible Notes upgraded to 'B-/RR6' from 'CCC+/RR6' US Airways, Inc. -- IDR affirmed at 'B+' -- Senior secured credit facility affirmed at 'BB+/RR1' AMERICAN AIRLINES: Fitch Hikes $156MM Cert. Rating to 'BB+' ----------------------------------------------------------- Following the completion of the merger between American Airlines and US Airways, Fitch Ratings has taken the following actions on rated enhanced equipment trust certificates (EETCs) issued by American Airlines: American Airlines Pass Through Trust Series 2013-1: -- $506.7 million class A certificates upgraded to 'A-' from 'BBB+'; -- $156.6 million class B certificates upgraded to 'BB+' from 'B'; -- $119.8 million class C certificates upgraded to 'B+' from 'CCC'. All three classes of certificates were previously on Rating Watch Positive. American Airlines Pass Through Trust Series 2013-2: -- $1,408 million class A certificates affirmed at 'BBB+'; -- $512 million class B certificates upgraded to 'BB+' from 'B'. The class B certificates were previously on Rating Watch Positive. Rationale: Fitch initially rated the AA 2013-1 class A certificates 'BBB+' despite the structure's ability to pass Fitch's 'A' level stress test. The 'BBB+' rating reflected the inherent uncertainties involved with the bankruptcy process. The one notch upgrade follows the company's emergence from bankruptcy. The B and C tranche ratings are notched from the 'B+' IDR of the underlying airline. The 'BB+' rating for the B tranche reflects a high affirmation factor (+2 notches) and the presence of an 18 month liquidity facility (+1 notch). The 'B+' rating for the C tranche reflects a high affirmation factor (+2 notches) and low recovery expectations (-2 notches). Fitch previously rated the B and C tranches 'B' and 'CCC', respectively, per Fitch's criteria for rating subordinated EETC tranches while the issuer is in bankruptcy. The affirmation of the AA 2013-2 A tranche reflects Fitch's top down analysis in which loan-to-value (LTV) ratios remain below 100% in our 'BBB' level stress test. The AA 2013-2 A tranche does not pass Fitch's 'A' level stress test due to the inclusion of tier 2 and tier 3 aircraft in the collateral pool. The class B certificate ratings are based on a high affirmation factor (+2 notches) and the presence of an 18 month liquidity facility (+1 notch). Fitch previously rated the B tranche 'B' as per Fitch's criteria for rating subordinated EETC tranches while the issuer is in bankruptcy. Fitch has also affirmed the following ratings for EETCs issued by US Airways: US Airways Pass Through Trust Series 2012-1: -- $378.8 million class A certificates at 'A-'; -- $125 million class B certificates at 'BB+'; -- $118.6 million class C certificates at 'B+'. US Airways Pass Through Trust Series 2012-2: -- $418.1 million class A certificates at 'A-'; -- $127.1 million class B certificates at 'BB+'; -- $100 million class C certificates at 'B+'. US Airways Pass Through Trust Series 2013-1: -- $620.1 million class A certificates at 'A-'; -- $199.5 million class B certificates at 'BB+'. AMERICAN AIRLINES: S&P Assigns 'B' CCR After Ch. 11 Emergence ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Fort Worth, Texas-based American Airlines Group Inc. (AAG). AAG, the parent of American Airlines Inc. (American Airlines) and US Airways Group Inc., was previously known as AMR Corp. until its Dec. 9, 2013, emergence from Chapter 11 bankruptcy protection, upon which it merged with US Airways Group. S&P also assigned a 'BB-' issue-level rating to American Airlines' $2.9 billion secured credit facility and $1 billion secured notes due 2016, both with a '1' recovery rating. In addition, S&P affirmed the 'BB-' issue-level rating on US Airways Inc.'s (US Airways) $1.6 billion secured term loan, with a '1' recovery rating; the 'B-' issue-level rating on its unsecured notes, with a '5' recovery rating; and the 'CCC+' issue-level rating on its subordinated debt, with a '6' recovery rating. S&P also raised the ratings on most of American Airlines' and US Airways' enhanced equipment trust certificates (EETCs). The rating outlook on AAG is stable. "We base our 'B' corporate credit rating on AAG on our assessment of the company's "fair" business risk profile and "highly leveraged" financial risk profile," said credit analyst Betsy Snyder. S&P's upgrades of American Airlines' EETCs, most of which S&P is raising by one rating category each, are based on the company's 'B' corporate credit rating. S&P is upgrading most of US Airways' EETCs by one notch because its analysis includes an assessment of the likelihood that the airline would reorganize successfully and affirm the aircraft debt that secures the certificates. As part of a larger airline group, S&P sees the likelihood of reorganization in any future bankruptcy as higher than previously. Many of the exceptions are US Airways' 2010, 2011, and 2012 class C certificates, which do not have liquidity facilities and which S&P accordingly continues to rate only one notch higher than the airline's corporate credit rating. The combination of American Airlines and US Airways will result in the largest U.S. airline, with the leading share of traffic along the East Coast and Central U.S. regions. However, the combined airline's Pacific presence remains weaker than those of competitors Delta Air Lines Inc. (Delta) and United Continental Holdings Inc. (United Continental), and its solid competitive position at London's Heathrow Airport could be hurt somewhat by Delta's recent acquisition of a stake in Virgin Atlantic, which is the second-largest airline at that airport. AAG foresees substantial revenue synergies and overhead cost savings from the combination, partly offset by higher labor costs and $1.2 billion of integration expenses through 2015. S&P agrees that there is a potential for solid revenue gains, as AAG recaptures some of the traffic lost to United Continental and Delta after those airlines' mergers. The main risk, as for other airline mergers, is that labor cost increases exceed projected levels or the integration process proves more costly and disruptive than planned. United Continental is currently seeking to remedy merger integration problems and has underperformed its (and S&P's) expectations, while Delta's merger has gone relatively smoothly. S&P considers the volatility of AAG's operating profitability to be high, similar to most other U.S. airlines, and this partly offsets its substantial market position, resulting in a "satisfactory" competitive position. S&P's "fair" business risk assessment also incorporates its view of the airline industry's "high" risk and AAG's "low" country risk. "Our assessment of AAG's financial risk profile as "highly leveraged" is based on our expectation of rising revenues, modestly improving margins, and incremental debt or leases to finance new aircraft deliveries (we expect capital spending will be $3.4 billion in 2014 and increase to $4.3 billion in 2015). This should result in funds from operations (FFO) to debt in the low-teens percent area and free operating cash flow (FOCF) to debt in the low-single-digit percent area in 2014, with both ratios improving thereafter," S&P said. S&P's base case assumes: -- Revenue growth of around 5% a year in 2014 and 2015, based on modestly increased traffic and higher pricing; -- Oil prices remaining relatively stable through 2015; -- Rising labor costs and integration costs of $1.2 billion through 2015; -- Modestly higher operating margins; and -- Pro forma net income below levels projected in the company's disclosure statement filed earlier this year. Based on these assumptions, S&P arrives at the following credit measures: -- FFO to debt in the low-teens percent area in 2014, somewhat below US Airways' 17% in 2012, and improving thereafter; -- Debt/EBITDA of around 6x in 2014, higher than US Airways' 4x in 2012, and declining thereafter; and -- Modest negative free cash flow in 2014 that turns modestly positive in 2015. Standard & Poor's rating outlook on AAG is stable. This reflects S&P's expectation that its financial profile will remain relatively consistent through 2014, despite incremental debt to fund new aircraft deliveries and integration costs associated with the merger, with FFO to debt in the low-teens percent area. S&P could raise the ratings if FFO to debt improves to the midteens percent area and FOCF to debt exceeds 5% for a sustained period. S&P could lower the ratings if integration costs are higher than expected and heavy capital spending keeps FFO to debt less than 10% for a sustained period. AMERIFORGE GROUP: S&P Affirms 'B+' CCR on First Lien Sr. Loan ------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' long- term corporate credit rating on Houston-based Ameriforge Group Inc., doing business as AFGlobal Corp., and its 'B+' issue rating on the company's first-lien senior secured term loan. The recovery rating on the first-lien term loan remains '2', indicating S&P's expectation for substantial (70% to 90%) recovery in the event of a payment default. The outlook is stable. At the same time, S&P raised its issue rating on the company's second-lien term loan debt to 'B-' from 'CCC+', reflecting improved recovery prospects for second-lien lenders under S&P's payment default scenario, primarily based on higher shared claims between first and second lien lenders given 35% of Special Flanges' stock will be unpledged. The recovery rating was revised to '5' from '6', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. As of Sept. 30, 2013, the company had $372.2 million of first-lien term loan debt due in 2019 and $150 million of second-lien term loan debt due in 2020. The incremental issue amounts increase the aggregate amounts on the first and second-lien term loans to $472.2 million and $200 million, respectively. The company's $82.5 million revolving credit facility due in 2018 is not rated. "The stable rating outlook reflects our expectation that revenue growth from new product offerings and strong demand in its offshore E&P segment will continue to drive operating performance and enable the company to improve profitability and strengthen credit measures from current levels in line with our forecast. We also expect liquidity will remain adequate over the next 12 to 24 months," said Standard & Poor's credit analyst Mark Salierno. "We could lower ratings if operating performance falls short of our expectations and leads to weaker cash flow generation and tighter liquidity, such that total liquidity falls to less than $50 million with no near-term improvement expected. We believe this could occur if a substantial drop in commodity prices leads to a protracted decrease in spending by the company's E&P customers, resulting in lower EBITDA levels and weaker credit measures. Based on pro forma debt levels, we estimate a decrease in EBITDA in excess of 15% would cause the company to approach its first-lien springing covenant requirement, which would limit borrowing availability under the revolving credit facility," S&P added. S&P would consider an upgrade if it believed that Ameriforge would adopt a less aggressive financial policy, which would include the company maintaining debt to EBITDA comfortably below a 5x threshold on a sustained basis throughout the business cycle, with a low likelihood of releveraging. S&P considers this less likely in the next one to two years given its expectation that the company will continue to pursue small-to-midsize acquisitions to support its growth objectives. ANIXTER INT'L: Fitch Affirms 'BB' IDR & Subsidiary Rating --------------------------------------------------------- Fitch Ratings has affirmed the IDR for Anixter International, Inc. and its wholly owned operating subsidiary, Anixter Inc., at 'BB+'. Key Ratings Drivers: The ratings and Outlook reflect the following considerations: -- Fitch expects mid-single digit organic revenue growth in 2014 as Anixter benefits from modest macro improvements and new project wins across its three business segments. Fitch expects EBITDA margins to largely hold steady above 6%, absent any significant swings in the US dollar and copper prices. -- In a stress scenario, Fitch would expect EBITDA margins to decline to levels near the trough of the last downturn, roughly 5%. Fitch would expect working capital cash inflows to roughly offset lower EBITDA levels and free cash flow to be above $200 million. In a flat revenue environment, Fitch estimates Anixter would generate more than $200 million in annual free cash flow. -- In November, Anixter announced a special dividend of $5 per share, approximately $165 million in total, to be paid at the end of the year. Fitch expects that the dividend will be financed in part by existing cash as well as borrowings under the company's credit facilities. Such actions coupled with current leverage metrics are already incorporated into the rating. Anixter has issued similar dividends in two of the prior three years. -- Fitch expects that Anixter will continue to utilize excess cash and free cash flow for potential acquisitions and shareholder friendly actions rather than debt reduction. Share repurchases and special dividends in excess of free cash flow in the face of mounting macroeconomic concerns could pressure Anixter's rating if such action would be expected to lead to additional higher leverage once revenue growth returns. Fitch estimates leverage (total debt / total EBITDA) at 2.2x as of September 2013. If the dividend were fully debt-financed, Fitch estimates leverage would rise to 2.6x which it expects would be reduced by free cash flow generation over the next few quarters. Fitch estimates free cash flow at $176 million in the latest twelve month period. Anixter's ratings and Outlook are supported by the following factors: -- Leading market position in niche distribution markets which Fitch believes contributes to Anixter's above-average margins for a distributor; -- Broad diversification of products, suppliers, customers and geographies which adds stability to the company's financial profile by reducing operating volatility; -- Working capital efficiency which allows the company to generate free cash flow in a downturn. Credit concerns include: -- Historical use of debt and free cash flow for acquisitions and shareholder-friendly actions; -- Thin operating margins characteristic of the distribution industry, albeit slightly expanded given the company's niche market position; -- Significant unhedged exposure to copper prices and currency prices; -- Exposure to the cyclicality of IT demand and general global economic conditions. Fitch believes Anixter's liquidity was adequate and consisted of the following as of Sept. 30, 2013: i) approximately $82 million of cash and cash equivalents; ii) a $400 million revolving credit facility, of which, $382 million was available, with a maturity which was recently extended to November 2016; and iii) a $300 million on-balance-sheet accounts receivable securitization program expiring May 2015, of which, $85 million was available. Total debt as of Sept. 30, 2013 was $821.7 million and consisted primarily of the following: -- $18.5 million outstanding under bank revolving credit lines; -- $215 million outstanding under the accounts receivable securitization program; -- $200 million in 5.95% senior unsecured notes due February 2015; -- $32 million in 10% senior unsecured notes due February 2014; and -- $350 million 5.625% senior unsecured notes due May 2019. Fitch has affirmed the following ratings: Anixter International, Inc. -- Issuer Default Rating (IDR) at 'BB+'; Anixter Inc. -- IDR at 'BB+'; -- Senior unsecured notes at 'BB+'; -- Senior unsecured bank credit facility at 'BB+'. The Rating Outlook is Stable. Ratings Sensitivities: Future developments that may, individually or collectively, lead to negative rating action include: -- Revenue declines that signal a loss of market share, either to other distributors or suppliers increasingly going direct to market; -- Severe operating margin compression resulting from intense competition; -- Significant debt-financed acquisitions and/or share repurchases, particularly if funded from cash generated from working capital declines. Future developments that may, individually or collectively, lead to positive rating action include: -- A long-term strategic business rationale and demonstrated commitment from management to maintain a higher rating; -- Further upside movement in the ratings may be limited given Anixter's history of shareholder-friendly actions. BERNARD L. MADOFF: Claim That Founder Acted Alone Was Falsehood --------------------------------------------------------------- James Sterngold, writing for The Wall Street Journal, reported that even after he confessed to orchestrating the biggest Ponzi scheme in history, Bernard L. Madoff insisted on two points: He acted alone, and his separate market-making operation was "legitimate, profitable and successful in all respects." According to the report, those claims, from his 2009 guilty plea and other statements, have since been exposed as more lies from the con man. Five years ago, Mr. Madoff became a household name due to the breathtaking audacity and scope of his fraud, which resulted in more than $17 billion in losses for more than 12,000 investors world-wide, the report related. But a more complete picture of the breadth of his scam is only now coming into focus, thanks in part to a continuing trial in New York federal court that is bolstering a bankruptcy trustee's findings after a review of more than 33 million documents. The trial has highlighted how investigators have reversed their view that, as Mr. Madoff had insisted, the market-making and trading operation was walled off from the fraud, the report related. They now believe that busy trading desk became Mr. Madoff's front, actually losing tens of millions of dollars a year and kept alive with hidden subsidies from the Ponzi scheme, according to Bruce Dubinsky, a forensic accountant with Duff & Phelps LLC, who was hired by the bankruptcy trustee. "The market-making operation was his cover," said David Sheehan, a lawyer representing the bankruptcy trustee, Irving Picard, in the efforts to recover assets for investors, the report cited. 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. BH S&B HOLDINGS: 2nd Cir. Revives Suit by Steve & Barry's Workers ----------------------------------------------------------------- The United States Court of Appeals for the Second Circuit reinstated a class action lawsuit against BHY S&B HoldCo, LLC, which acquired Steve & Barry's, a chain of retail apparel stores that filed for bankruptcy, for alleged violations of the Worker Adjustment Retraining and Notification Act. Michael Guippone, individually and on behalf of all others similarly situated, took an appeal from decisions and orders of the U.S. District Court for the Southern District of New York (McMahon, J.) dismissing his putative class action claim brought against the defendants for WARN Act violations. The Second Circuit vacated the district court's grant of summary judgment to BHY S&B HoldCo, entered Dec. 15, 2011, finding that there is a material question of fact as to whether HoldCo was a single employer with its closely held subsidiary within the meaning of WARN. The Second Circuit affirmed the district court's dismissal of the complaint against the remaining defendants for failure to state a claim, entered May 18, 2010. Steve & Barry's Industries, Inc., which owned and operated the retail apparel chain, filed for protection from its creditors pursuant to Chapter 11 of the U.S. Bankruptcy Code in July 2008. One group of defendants in this action comprises investment firms Bay Harbour Management LC and its related entities Bay Harbour Master Ltd. and BH S&B Inc.; and York Capital Management L.P. and YSOF S&B Investor LLC. Bay Harbour and York Capital created a series of interrelated entities to purchase and manage Steve & Barry's after it filed for bankruptcy protection. One of the entities, HoldCo, served as the holding company and sole managing member of another entity, BH S&B Holdings LLC. Holdings was funded with $70 million from Bay Harbour and York Capital, and an additional $125 million in financing from Ableco Finance LLC. Holdings employed Guippone and the putative class members. In August 2008, with approval from the United States Bankruptcy Court for the Southern District of New York, Holdings bought Steve & Barry's assets. The suit is, MICHAEL GUIPPONE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiff-Appellant, v. BH S&B HOLDINGS LLC, BHY S&B HoldCo, LLC, BAY HARBOUR MANAGEMENT LC, BAY HARBOUR MASTER LTD, BH S&B INC., YORK CAPITAL MANAGEMENT, L.P. AND YSOF S&B INVESTOR, LLC,1 Defendants-Appellees, No. 12-183-cv (2nd Cir.). A copy of the Second Circuit's Dec. 10, 2013 decision is available at http://is.gd/3lwdnofrom Leagle.com. Michael Guippone is represented by: Jack A. Raisner, Esq. Rene S. Roupinian, Esq. OUTTEN & GOLDEN, LLP 3 Park Avenue New York, NY 10016 BHY SBHoldCo LLC is represented by Owen Cyrulnik, Esq. -- ocyrulnik@graisellsworth.com -- at Grais & Ellsworth LLP. Justin S. Antonipillai, Esq., and Robert A. Stolworthy, Jr., Esq. -- justin.antonipillai@aporter.com and robert.stolworthy@aporter.com -- at Arnold & Porter, LLP, represent YSOF S&B Investor LLC and York Capital Management, L.P. About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's LLC -- http://www.steveandbarrys.com/-- was a national casual apparel retailer that offered high quality merchandise at low prices for men, women and children. Founded in 1985, the company operated 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. The discount clothing chain's brands included the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with former NBA (R) star Stephon Marbury. Steve & Barry's LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 protection on July 9, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represented the Debtors in their restructuring efforts. Diana G. Adams, United States Trustee for Region 2, appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) was changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) became Steel Bolt LLC. When the Debtors filed for bankruptcy, they disclosed $693,492,000 in total assets and $638,086,000 in total debts. BIG LOTS: Store Chain to Shut Down, 600 Workers May Lose Jobs ------------------------------------------------------------- Quinte News reports that another store chain in Canada will be closing its doors and once again a Quinte area location will be affected. Big Lots, the parent company for Liquidation World, is shutting down operations in Canada, according to Quinte News. The report relates that an official at the Trenton store confirmed the news today, stating the store will shut its doors on Dundas Street East at the end of February. Big Lots says it wants to focus on its American stores and added the Canadian locations did not gain enough traction to remain successful, the report notes. Sixteen-hundred employees across the country will be losing their jobs, however the number of local jobs affected is not known, the report says. There are also Liquidation World locations in Cobourg and Kingston. BOREAL WATER: Files 4th Amendment to 2012 Report ------------------------------------------------ Boreal Water Collection, Inc., filed with the U.S. Securities and Exchange Commission an amendment no. 4 to Form 10-K on Dec. 3, 2013, for the year ended Dec. 31, 2012. Patrick Rodgers, CPA, expressed substantial doubt about Boreal Water Collection, Inc.'s ability to continue as a going concern, citing that the Company has a minimum cash balance available for payment of ongoing operating expenses, has experienced losses operations since inception, and it does not have a source of revenue sufficient to cover its operating costs. The company reported a net loss of $822,902 on $2.68 million of sales for the year ended Dec. 31, 2012, compared to a net loss of $1.28 million on $2.66 million of sales in Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2012, showed $3.74 million in total assets, $3.91 million in total liabilities, and stockholders' deficit of $173,084. A copy of the Form 10-K is available at: http://is.gd/zgnIeq About Boreal Water Kiamesha Lake, N.Y.-based Boreal Water Collection, Inc., is a personalized bottled water company specializing in premium custom bottled water. The Company reported a net loss of $822,902 on $2.7 million of sales in 2012, compared with a net loss of $1.3 million on $2.7 million of sales in 2011. BUILDING #19: Dec. 12 Final Hearing on Access to Cash Collateral ---------------------------------------------------------------- Building #19, Inc., et al., will appear before the Bankruptcy Court today, Dec. 12, at 10:30 a.m., for a final hearing on its request to use cash collateral. Building #19 last month obtained interim approval to use the cash collateral in which secured creditors JFLP Financial Group and William Elovitz assert interest. The Debtors may use the cash collateral until Dec. 14, 2013. The Debtors will be entitled to exceed the amounts set forth in the budget by up to 10%. As adequate protection from any diminution in value of the lenders' collateral, the Debtor will grant the lenders replacement liens on postpetition property of the estate. About Building #19, Inc. Building #19, Inc., and its affiliates sought protection under Chapter 11 of the Bankruptcy Code on Nov. 1, 2013 (Bankr. D. Mass. Case No. 13-16429). Donald Ethan Jeffery, Esq., and Harold B. Murphy, Esq., at Murphy & King, Professional Corporation, in Boston, Massachusetts, serve as the Debtors' bankruptcy counsel. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to the official committee of unsecured creditors. The Committee retained Duane Morris LLP as its counsel. CAPITOL BANCORP: Incurs $5.8-Mil. Net Loss in Third Quarter ----------------------------------------------------------- Capitol Bancorp Ltd. filed its quarterly report on Form 10-Q, reporting a net loss of $5.8 million on $13.0 million of total revenue for the three months ended Sept. 30, 2013, compared with a net loss of $5.4 million on $19.8 million of total revenue for the same period last year. The Company reported net income of $669,000 on $42.4 million of total revenue for the nine months ended Sept. 30, 2013, compared with a net loss of $23.6 million on $56.7 million of total revenue for the corresponding period of 2012. Net loss relating to discontinued operations was $4.6 million and $5.5 million for the three and nine months ended Sept. 30, 2013, respectively, compared to a net loss from discontinued operations of $1.4 million and $6.1 million for the three and nine months ended Sept. 30, 2012, respectively. The net results of operations for the nine-month interim period of 2013 showed significant improvement compared to the corresponding 2012 interim period. There was a total reduction in the provision for loan losses of $13.0 million to a negative $12.2 million for the nine months ended Sept. 30, 2013, compared to a provision of $791,000 for the corresponding period of 2012 (excluding discontinued operations), related mainly to the $12.2 million provision reversal at Michigan Commerce Bank. Operating expenses also decreased significantly during the period by $13.5 million, or 24.0%, as compared to the corresponding 2012 period. Net interest income for the nine months ended Sept. 30, 2013, totaled $28.6 million, a 7.6% decrease compared to $31.0 million in 2012. Noninterest income for the nine months ended Sept. 30, 2013, approximated $8.6 million, a 23.8% decrease from the $11.3 million for the same period in 2012. The Company?s balance sheet at Sept. 30, 2013, showed $984.2 million in total assets, $1.127 billion in total liabilities, and a stockholders? deficit of $142.7 million. A copy of the Form 10-Q is available at http://is.gd/DCiG2d 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. CASH STORE: Files Copy of $32.5 Million Credit Agreement -------------------------------------------------------- Cash Store Financial furnished the U.S. Securities and Exchange Commission a copy of the credit agreement pursuant to which 424187 Alberta Ltd. serves as agent for the lenders. As reported by the TCR on Dec. 6, 2013, Cash Store entered into a credit agreement with Coliseum Capital Management, LLC, 8028702 Canada Inc. and 424187 Alberta Ltd. pursuant to which the Lenders have agreed to provide $12 million of loans in the aggregate. The loans will be guaranteed by the Company's subsidiaries. The Credit Agreement provides that a total of up to $32.5 million may be advanced, but the Lenders, at this time, have made no commitment to provide additional loans. The $32.5 million facility falls within the first lien carve-out provisions of the Company's January 2012 Indenture governing the Company's 11.5% senior secured notes due 2017. A copy of the Credit Agreement is available for free at: http://is.gd/KbZ9VJ About Cash Store Financial Headquartered in Edmonton, Alberta, The Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial employs approximately 1,900 associates. The Company's balance sheet at June 30, 2013, showed $192.73 million in total assets, $171.47 million in total liabilities, and $21.25 million in shareholders' equity. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believes that the registrar's proposal could lead to similar actions in other territories," the Company said. As reported by the TCR on May 22, 2013, Moody's Investors Service downgraded the Corporate Family Rating and senior unsecured debt rating of Cash Store Financial Services to Caa1 from B3 and assigned a negative outlook. According to Moody's, CSFS remains unprofitable on both the pretax and net income lines and prospects for return to profitability are unclear. CE GENERATION: Fitch Affirms 'BB-' Ratings on $400MM Notes ---------------------------------------------------------- Fitch Ratings has affirmed CE Generation, LLC's (CE Gen) $400 million senior notes ($159 million outstanding) due in 2018 at 'BB-'. The Rating Outlook remains Negative due to CE Gen's reliance on nonobligatory sponsor equity support in lieu of drawing on the debt service reserve. Key Rating Drivers: -- Exposure to Volatile Energy Pricing: Geothermal output is contracted under power purchase agreements with strong counterparties Southern California Edison (SCE) ('A-'/Stable) and Arizona Public Service ('BBB+'/Stable). However, the majority of energy revenues are exposed to variable Short-Run-Avoided-Cost (SRAC) pricing, which is tied to natural gas prices. While the SRAC-based contracts mitigate volume risk, price risk is a substantial risk to cash flow. (Revenue Risk: Weaker). -- Subordinated Position: CE Gen's cash flows are primarily reliant on distributions from a portfolio of geothermal projects that have structurally senior debt at Salton Sea Funding Corp. (SSFC). The SSFC-level distribution trigger is relatively high (1.50x), which can lead to cash traps during periods of financial pressure. (Debt Structure: Weaker). -- Weakened Financial Profile: The consolidated DSCR from 2014- 2018 will hover near breakeven levels in Fitch's rating case. This suggests that CE Gen's ability to meet debt obligations is vulnerable to persistently low gas prices and a deterioration in the operating environment. If cash is trapped at the SSFC level, as it has been in 2012 and 2013, there will be insufficient distributions to CE Gen requiring nonobligatory sponsor equity injections or access of debt service reserves to avoid default. -- Good Operational History: CE Gen has a diverse base of 10, well-maintained geothermal projects and three natural gas facilities with good operating histories. The technology is proven and conventional and there have been no major operational or maintenance issues over the past 10 years. (Operation Risk: Midrange). -- Stable Resource Across Portfolio: The geothermal resource has been consistently strong over the past 15 years. The resource is expected to be viable beyond 2040, suggesting there is residual value for the sponsors beyond the term of the debt. The natural gas assets procure gas under rolling annual tolling agreements. (Supply Risk: Midrange). Rating Sensitivities: -- A departure from the precedent of equity injections ahead of draws on the debt service reserve to meet debt payment shortfalls would signal a change in the sponsors' view of CE Gen's long-term value and result in a downgrade. -- Persistently low revenue due to weak energy pricing, curtailment, or operational issues would result in reduced cash flow to CE Gen that could result in a rating action. -- CE Gen could return to a Stable Outlook if the sponsors' further illustrate their intent to support the project or SSFC is able to resume distributions and has a favorable financial outlook. Security: The senior notes are secured by all assets of CE Gen, including the residual cash flow of its portfolio of 13 energy projects, as well as equity interests in the project companies, and all operational and depository accounts. Credit Update: CE Gen's portfolio continues to display stable operating performance, but curtailment due to ongoing transmission upgrades in Southern California has weakened project capacity factors. Furthermore, the portfolio's large exposure to variable SRAC prices has resulted in reduced energy revenues due to recent low natural gas pricing. While Fitch expects transmission-related curtailment to eventually subside, the exposure to market pricing volatility through the SRAC contracts will remain a credit weakness. Fitch's rating case contemplates CE Gen's projected financial performance under persistent low SRAC pricing. Under this scenario, CE Gen's DSCRs, based on distributions, average 1.04x from 2014-2018, with two years of below breakeven coverage. Due to the structural subordination of CE Gen's debt, Fitch also evaluates financial performance using a consolidated DSCR, which considers total portfolio cash flow and total debt service at both the CE Gen and SSFC levels. The consolidated DSCR under rating case conditions averages 1.02x from 2014-2018, with two years of below breakeven coverage. Rating case coverage levels based on operating cash flow are consistent with a lower rating level. However, the sponsor has provided incremental liquidity to meet scheduled debt service payments without drawing on the debt service reserve. Fitch's rating incorporates the expectation that the sponsor will continue to support CE Gen during periods of financial stress through debt maturity. Failure by the sponsor to continue providing liquidity and necessitating a draw on the reserve will likely trigger a rating downgrade. CE Gen is a special purpose holding company created solely to issue the senior secured notes and hold the equity interests in 13 generating assets with an aggregate net ownership interest of 770 megawatts. CE Gen's 10 geothermal facilities are located in the Imperial Valley near Calipatria, California, and its three gas fired facilities are located in Plattsburg, New York (Saranac); Big Springs, Texas (Power Resources); and Yuma, Arizona (Yuma), respectively. CE Gen is owned 50% by U.S. based MidAmerican Energy Holdings Company ('BBB+'/Stable) and 50% by Canadian based TransAlta USA Inc. CHRISTIAN BROTHERS: Sexual-Abuse Plan Out for Vote -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Christian Brothers' Institute won approval of disclosure materials on Dec. 10 and scheduled a hearing on Jan. 9 for confirmation of a Chapter 11 plan dealing with sexual-abuse claims. According to the report, the institute filed for Chapter 11 protection in April 2011. If approved by creditors and the bankruptcy court, the plan would create a trust for abuse claimants initially funded with $13.4 million from the religious order and $3.2 million from Providence Washington Insurance Co. The sexual-abuse claims arose from events occurring 30 to 50 years ago, according to court filings. The institute operates Catholic elementary and secondary schools throughout New York State. The institute listed assets of $74 million, almost all representing real property. Aside from unknown liability on sexual-abuse claims, the institute said in 2011 there was $6.5 million in secured debt and a $1.8 million unsecured loan owing to the Christian Brothers Foundation. Based in New Rochelle, New York, the nonprofit institute told the bankruptcy judge the claims mostly arose in Washington State and Newfoundland. About Christian Brothers' Institute The Christian Brothers' Institute in New Rochelle, New York, is a domestic not-for-profit 501(c)(3) corporation organized under Sec. 102(a)(5) of the New York Not-for-Profit Corporation Law. CBI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. The Christian Brothers of Ireland, Inc., in Chicago, Illinois, is a domestic not-for-profit 501(c)(3) corporation organized under the Not-for-Profit Corporation Law of the State of Illinois. CBOI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. CBI and CBOI depend upon grants and donations to fund a portion of their operating expenses. The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. The Christian Brothers' Institute disclosed assets of $63,418,267 and $8,484,853 in liabilities. CBOI discloses assets of $1,091,084 and liabilities of $3,622,500. Attorneys at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, Calif., and New York, N.Y., represent the Official Committee of Unsecured Creditors as counsel. Paul A. Richler, Esq., of Pacific Palisades, Calif., serves as Special Insurance Counsel to the Official Committee of Unsecured Creditors. The Christian Brothers' Institute and The Christian Brothers of Ireland, Inc., and the Official Committee of Unsecured Creditors have a plan made possible following an "allocation plan" negotiated with 75% of sexual abuse claimants. The Joint Chapter 11 Plan of Reorganization dated Aug. 22, 2013, has the Debtors and the Official Committee of Unsecured Creditors as co-proponents. CHURCHILL DOWNS: S&P Assigns 'BB' CCR & Rates New Notes 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Louisville, Ky.-based gaming and racing operator Churchill Downs Inc. The rating outlook is stable. At the same time, S&P assigned Churchill Downs' proposed $250 million senior unsecured notes due 2021 its 'BB' issue-level rating, with a recovery rating of '3', indicating its expectation for meaningful (50% to 70%) recovery for lenders in the event of a default. "The company will use the proceeds to repay borrowings under its revolving credit facility, and to pay transaction fees and expenses," said Standard & Poor's credit analyst Melissa Long. S&P's assessment of Churchill Downs' business risk profile as fair" reflects the company's exposure to consumer discretionary spending in the gaming space, the second-tier nature of some of the gaming markets in which the company operates, increasing competition in the online gaming space, participation in the horse racing industry, which has struggled to maintain profitability in the face of increasing competition from other forms of gaming, and a concentration of EBITDA in its racing segment in a single event -- the Kentucky Derby. These risks are mitigated by the strength of the Kentucky Derby, the company's focus on regional gaming markets, moderate geographic diversity of gaming assets, and the company's online business. S&P's assessment of Churchill Downs' financial risk profile as "modest" reflects its expectation that leverage over the next two years will be in the low- to mid-1x area and that EBITDA coverage of interest will exceed 10x. S&P's assessment also takes into account the company's strong free operating cash flow generation. S&P assess Churchill Downs' liquidity profile as "strong", according to its criteria, based on the company's likely sources and uses of cash over the next 12 to 18 months, and incorporating its performance expectations. The stable rating outlook reflects S&P's expectation that leverage will remain in the low- to mid-1x area over the next two years, providing ample cushion for the company to pursue acquisition and development opportunities. S&P expects leverage will remain below 4x, even in a scenario where the company completes additional acquisitions or pursues development opportunities. An upgrade could result if S&P came to believe that the company's financial policy would likely lead to leverage remaining below 3x even factoring in development and acquisition opportunities. S&P could also consider rating upside if future acquisitions and developments meaningfully increased the size and diversity of the company's cash flow base, such that its assessment of the company's competitive position improved. S&P believes a downgrade is unlikely given the company's low leverage and its expectation of relatively stable operating performance. While unlikely, S&P could lower the ratings if the company took a more aggressive approach toward acquisitions, development opportunities or returns to shareholders and/or operating performance deteriorated meaningfully, resulting in leverage remaining close to 4x. CLUB AT SHENANDOAH: GECC Says Proposed Auction Will Delay Case -------------------------------------------------------------- Joshua D. Wayser, Esq., at Katten Muchin Rosenman LLP, on behalf of senior secured lender General Electric Capital Corporation, asks the Bankruptcy Court to deny the proposed sale of assets of The Club at Shenandoah Springs Village, Inc. GECC said the Court must deny the Debtor's request for an auction and require the Debtor to finalize the transaction with Arroyo Vista Partners. GECC noted that the Debtor asked the Court on Nov. 21, 2013, to approve (i) bidding procedures in connection with proposed sale of substantially all assets of estate, and (i) break-up fee. According to GECC, the case has been pending for one year and for the past seven months the Debtor has promised creditors would be paid in full. Yet, rather than consummate a sale that "will pay all creditors in full," the Debtor has requested the Court to approve bidding procedures and an auction, further delaying and possibly jeopardizing creditor recoveries. GECC noted that the Debtor in November entered into an asset purchase agreement with Arroyo Vista Partners as stalking horse buyer, by which Arroyo offered to purchase the assets for $18,750,000. The agreement also provides for the breakup fee and approval of Arroyo's stalking horse offer by Dec. 24. The Debtor proposed an auction and sale hearing on Jan. 14, 2014, at Courtroom 303 of the U.S. Bankruptcy Court, Central District of California, Riverside Division, 3420 12th Street, Riverside, California. Bid deadline is set for 3:00 p.m. three business days prior to the auction. About The Club At Shenandoah Springs Village The Club At Shenandoah Springs Village, Inc., owns The Club At Shenandoah Springs Village, a golf and leisure resort in Thousand Palms, a desert region of central California. It filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on Dec. 3, 2012. The Debtor estimated both assets and liabilities of between $10 million and $50 million. Judge Mark D. Houle presides over the case. Daniel A. Lev, Esq., and Steven Worth, Esq., at SulmeyerKupetz, in Los Angeles, Calif., represent the Debtor as counsel. CLUB AT SHENANDOAH: Cash Collateral Hearing Continued to Jan. 14 ---------------------------------------------------------------- The Bankruptcy Court continued until Jan. 14, 2014, at 2:00 p.m., the hearing to consider The Club at Shenandoah Springs Village, Inc.'s motion to use of cash collateral. As reported in the Troubled Company Reporter on Nov. 11, 2013, General Electric Capital Corp., asserts an interest in the cash collateral. The Club at Shenandoah, in its motion, stated it needed additional time to conduct negotiations with GECC on its business operations, sale of its assets, and the consensual use of cash collateral. Now, the Bankruptcy Court approved a stipulation further continuing from Dec. 3, 2013, to Jan. 14 the final hearing on the motion for use of cash collateral; and (2) continued consent of the Debtor's interim use of cash collateral. Pursuant to the stipulation, any supplemental brief in support of the cash collateral motion will be filed by the Debtor no later than Jan. 2, 2014. Any supplemental opposition to the cash collateral motion will be filed by GECC by no later than Jan. 9. Previously, the Court approved a stipulation continuing the final hearing until Dec. 3. About The Club At Shenandoah Springs Village The Club At Shenandoah Springs Village, Inc., owns The Club At Shenandoah Springs Village, a golf and leisure resort in Thousand Palms, a desert region of central California. It filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on Dec. 3, 2012. The Debtor estimated both assets and liabilities of between $10 million and $50 million. Judge Mark D. Houle presides over the case. Daniel A. Lev, Esq., and Steven Worth, Esq., at SulmeyerKupetz, in Los Angeles, Calif., represent the Debtor as counsel. COMMENSAL SEC: Acquired by Imvescor Unit ---------------------------------------- Imvescor Restaurant Group Inc. announced on Nov. 29, 2013, that a wholly owned subsidiary has acquired the manufacturing facility, customer relationships, the trademark "Commensal" as well as all associated retail products marketed under the Commensal brand. The Commensal revenues over the last 12 months were approximately $10.0 million. The transaction was completed as an asset purchase without assumption of any of the previous owners pre-closing liabilities. The transaction was approved by the court monitoring the insolvency proceedings of Commensal SEC. The purchase price was approximately $4.2 million. IRG intends to build up Commensal's presence in the retail space, particularly in the fresh soup category, where Commensal occupies 80% of the market in Quebec. In addition, the facility will allow IRG to over time produce food items for a number of products currently being produced by third parties. The plant will equally begin providing IRG's proprietary food items to all four of its restaurant brands: Bƒton Rouge, Scores, Mikes and Pizza Delight. Denis Richard, IRG's CEO said: "We are extremely excited about this opportunity as it will permit us to vertically integrate our operations under very attractive conditions. We had this objective in sight over the long term but the much lower cost of entry offered by the Commensal opportunity compelled us to accelerate our strategic objectives. The ability to gain access to manufacturing margins will additionally permit us to service our franchisees with a continued focus on competitive pricing and high quality food items." Commensal S.E.C. is an Ontario-based vegetarian restaurant established in 1977. It had eight flexitarian restaurants and a line of Ready-to-eat(TM) prepared dishes under the Commensal(TM) brand. DARLING ACQUISITION: Acquisition Brings Downgrade to Ba2 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Darling International Inc., by doubling in size thorough acquisition of Vion Ingredients Inc., lost one grade on its corporate rating from Moody's Investors Service. According to the report, the corporate rating slipped to Ba2, the second-highest junk grade. Irving, Texas-based Darling is paying 1.6 billion euros ($2.2 billion) for Netherlands-based Vion. Moody's said the acquisition will result in "high leverage" and "execution risks." Darling provides rendering and recycling services for the food industry. Its products include livestock feed, soaps and pet foods. DIVERSINET CORP: Applies to End Reporting Issuer Status ------------------------------------------------------- Diversinet Corp., by Duff & Phelps Canada Restructuring Inc., in its capacity as the Court appointed Liquidator of Diversinet, has applied to the Ontario Securities Commission as principal regulator for a decision under the securities legislation of Ontario, Alberta and British Columbia that Diversinet has ceased to be a reporting issuer. Diversinet is presently a reporting issuer for purposes of Canadian securities laws and, accordingly, is subject to the continuous disclosure and other requirements imposed by such laws for the benefit of Diversinet's shareholders and the public. Effective at the close of business on August 13, 2013, the common shares of Diversinet were delisted from TSX Venture Exchange. Pursuant to the plan of liquidation and distribution, Diversinet commenced winding-up proceedings pursuant to the Business Corporations Act, R.S.O. 1990, c.B.16, as amended, and the Liquidator was appointed. On October 18, 2013, the winding-up order and claims procedure order were issued by the Ontario Superior Court of Justice approving a voluntary winding-up of Diversinet. Pursuant to the Liquidation Plan, the Liquidator is to maintain the listing of the common shares of Diversinet on the OTCQB until the completion of the Claims Process (as defined in the Liquidation Plan). The Liquidator anticipates that the claims process will be completed on or around Dec. 16, 2013. Upon the completion of the claims process and delisting from the OTCQB, Diversinet's common shares will no longer be listed or posted for trading on any stock exchange or marketplace. Further, all transfers of Diversinet's common shares made on or after the completion of the claims process will be void unless made with the explicit sanction of the Liquidator. As a result, Diversinet's shareholders will no longer have the ability to trade in Diversinet's common shares following the completion of the claims process and the delisting from the OTCQB, which is anticipated to be on or around Dec. 16, 2013. If its application is granted, Diversinet's shareholders will still have access to relevant information relating to Diversinet. In this regard, the Liquidator continues to post information on the website that it has established in respect of Diversinet's winding-up proceedings ( http://www.duffandphelps.com/intl/en- ca/Pages/RestructuringCases.aspx ) and, where considered advisable, will continue to issue press releases. In accordance with the Liquidation Plan and the Court Orders issued on Oct. 18, 2013, the Liquidator will continue to report to the shareholders of Diversinet on the Liquidation Plan at such times and intervals as the Liquidator may deem appropriate. In addition, the Liquidator will report to the Court from time to time with respect to its administration of the winding-up proceedings. There can be no assurance that the order sought by Diversinet will be granted by the Canadian securities regulatory authorities or, if granted, when such order will be so issued. About Diversinet Corp. Toronto-based Diversinet Corp. (TSX Venture: DIV, OTCQB: DVNTF) provides healthcare organizations and partners with ultra-secure, patented mobile technologies and connected health solutions. Revenues for the second quarter were US$263,000, compared to US$419,000 in the same year-ago period. Revenues for the six months ended June 30, 2013, were US$566,000 compared to US$701,000 in the same period in 2012. Net loss in the second quarter totaled US$794,000, compared to US$1.1 million in the same year ago period. Net loss for the six months ended June 30, 2013, was US$1.8 million, compared to US$2.6 million in the first six months of 2012. The Company's balance sheet at June 30, 2013, showed US$1.9 million in total assets, US$529,368 in total current liabilities, and stockholders' equity of US$1.4 million. Diversinet announced on August 9 that it has entered into an asset purchase agreement with certain subsidiaries of IMS Health Incorporated to sell substantially all of the intellectual property, software, customer contracts and certain other assets of Diversinet for US$3,500,000. An amount equal to one-half of the sale proceeds will be deposited with an independent escrow agent to be available to satisfy indemnity claims by IMS Health, if any, made prior to the proposed winding-up. Certain employees of Diversinet have been offered employment by IMS Health, subject to closing of the transaction contemplated by the Agreement. The closing is subject to customary conditions precedent at closing, including Diversinet shareholder approval. Holders of an aggregate of appropriately 38% of the outstanding common shares of Diversinet, including shareholders who are Directors and their respective affiliated companies, have agreed with IMS Health to vote in favor of the transaction. Under the Agreement, IMS Health is entitled to a break fee in certain circumstances, including a US$750,000 payment upon the acceptance by Diversinet of an unsolicited superior proposal from a third party. IMS Health has also been granted other typical deal protection provisions including a right to match any superior proposal that is received by Diversinet on an unsolicited basis. Craig-Hallum Capital Group LLC acted as financial advisor to Diversinet. The Company is delisting its common shares from the TSX Venture Exchange effective Aug. 13, 2013. Trading of the Company's common shares will continue for a transitional period prior to the wind up on the OTCQB under the trading symbol DVNTF. * * * KPMG LLP, in Toronto, Canada, expressed substantial doubt about Diversinet Corp.'s ability to continue as a going concern, following its audit of the Company's consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred significant losses from operations and used significant amounts of cash in operating activities during 2012 and 2011 that raise substantial doubt about its ability to continue as a going concern. DUMA ENERGY: Acquires 100% Equity of Hydrocarb ---------------------------------------------- Duma Energy Corp. closed an agreement to acquire 100 percent of the equity of Hydrocarb Corporation on Dec. 9, 2013. As a result, the Company now owns 100 percent of the equity of Hydrocarb Corporation and it is now the Company's wholly-owned subsidiary. Hydrocarb Corporation is an energy exploration and production company targeting major under-explored oil and gas projects in emerging, highly prospective regions of the world. Hydrocarb owns the following subsidiaries: -- Hydrocarb Namibia Energy (Proprietary) Limited, a Namibia Company, 100 percent owned. -- Otaiba Hydrocarb LLC, a UAE Limited Liability Company, 95 percent owned. -- Hydrocarb Texas Corporation, a Texas Corporation, 100 percent owned. Hydrocarb's former shareholders exchanged stock with the Company pro rata to their Hydrocarb holdings. Hydrocarb Corporation's former principal shareholders (some of whom remain Hydrocarb's executive officers as well) who are related parties to the Company are: Kent P. Watts who is also the Company's Chairman of the Board; Pasquale V. Scaturo who is also the Company's CEO; Charles F. Dommer who is also the Company's president and COO; Tyler W. Moore who is also the Company's CFO; and two children of Kent P. Watts. There were nine other former shareholders of Hydrocarb in the exchange. The Company acquired 100 percent of the shares of common stock and preferred stock of Hydrocarb in exchange for an aggregate of 25,190,000 shares of the Company's common stock and 8,188 shares of the Company's Series A 7 Percent Convertible Voting Preferred Stock. In connection with the closing of the Agreement, the Company issued 22,410,000 shares of common stock to its rights holders. These rights were previously issued in an unrelated transaction in August 2012. The principal rights holders who are related parties to the Company are: KD Navigation, Inc., KW Navigation, Inc., and CW Navigation, Inc., which are owned by the niece and nephews of Kent P. Watts. There was one other rights holder who is the brother of Kent P. Watts. In connection with the closing of the Agreement, on Dec. 9, 2013, the Company issued an aggregate of 25,190,000 shares of its common stock of and 8,188 shares of its Preferred Stock to 15 persons in exchange for their shares of Hydrocarb Corporation. A copy of the Form 8-K, as filed with the U.S. Securities and Exchange Commission, is available for free at http://is.gd/2syKRm About Duma Energy Corpus Christi, Tex.-based Duma Energy Corp. -- http://www.duma.com/-- formerly Strategic American Oil Corporation, is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Duma Energy incurred a net loss of $40.47 million on $7.07 million of revenues for the year ended July 31, 2013, as compared with a net loss of $4.57 million on $7.16 million of revenues during the prior year. As of July 31, 2013, the Company had $26.27 million in total assets, $16.91 million in total liabilities and $9.36 million in total stockholders' equity. DUMA ENERGY: Hydrocarb CEO Holds 14.9% Equity Stake --------------------------------------------------- In a Schedule 13D filed with the U.S. Securities and Exchange Commission, Kent Watts disclosed that as of Dec. 9, 2013, he beneficially owned 9,621,905 shares of common stock of Duma Energy Corp. representing 14.95 percent of the shares outstanding. Mr. Watts is the Chairman and chief executive officer of Hydrocarb Corporation, which is 100 percent owned by Duma Energy. In addition, Mr. Watts is a director of, and the Chairman of the board of, Duma Energy. A copy of the regulatory filing is available for free at http://is.gd/UofykV About Duma Energy Corpus Christi, Tex.-based Duma Energy Corp. -- http://www.duma.com/-- formerly Strategic American Oil Corporation, is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Duma Energy incurred a net loss of $40.47 million on $7.07 million of revenues for the year ended July 31, 2013, as compared with a net loss of $4.57 million on $7.16 million of revenues during the prior year. As of July 31, 2013, the Company had $26.27 million in total assets, $16.91 million in total liabilities and $9.36 million in total stockholders' equity. EAST COAST BROKERS: Ch.11 Trustee Authorized to Sell Red Rose Inn ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Gerard A. McHale, Jr., Chapter 11 trustee for East Coast Brokers & Packers, Inc., et al., to sell real property asset including C-4 (Red Rose Inn). The Chapter 11 trustee apprised the Court that he had received a contract for purchase and sale of the property commonly referred to as Red Rose Inn. The Court found no objection to the proposed sale. Pursuant to the order, the Court authorized the trustee to conduct public auctions of the Debtors' real and personal property, including the Red Rose Inn. The trustee has received an offer to purchase the real property titled in the name of Oakwood Place, Inc., located at 2011 N. Wheeler St., Plant City, Florida from Louis Spiro, or permitted assigns, as the prevailing bidder and the buyer has agreed to the purchase price of $1,500,000. The real property will be sold "as is", "where is", with all faults. About East Coast Brokers East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., and Susan H. Sharp, Esq., at Stichter, Riedel, Blain & Prosser, P.A., in Tampa, serve as counsel to the Debtors. Steven M. Berman, Esq., and Hugo S. deBeaubien, Esq., at Shumaker, Loop, & Kendrick, LLP, in Tampa, are the Debtors' special counsel. In June 2013, the bankruptcy court approved the appointment of Gerard A. McHale, Jr., to serve as Chapter 11 trustee. MLIC Asset Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court to appoint a Chapter 11 trustee, or, in the alternative, dismiss the Debtors' Chapter 11 cases. According to the MLIC entities, the Debtors, among other things had mishandled the potential rents from employees, failed to pay taxes, failed to maintain insurance, has inadequate security regarding the Debtors' personal and real property, and delayed the filing of schedules and reports required under the Bankruptcy Code. Brian G. Rich, Esq., at Berger Singerman LLP, in Tallahassee, Fla., represents the Chapter 11 trustee as counsel. EXCEL MARITIME: Confirmation Hearing Set for Jan. 27 ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Excel Maritime Carriers Ltd., the operator of 38 dry- bulk vessels, scheduled a Jan. 27 confirmation hearing for approval of the reorganization plan supported by the official committee of unsecured creditors and holders of 83 percent of the senior secured notes. According to the report, on Dec. 10, the bankruptcy court in White Plains, New York, approved disclosure materials allowing creditors to submit votes by Jan. 16. The company will publish a voting tally by Jan. 17, in advance of the plan-approval hearing 10 days later. The version of the plan submitted last month replaced a reorganization proposal worked out before the Chapter 11 filing in July. For $765 million in claims, senior lenders will receive a new $300 million five-year secured term loan and 83.3 percent of the new stock. The disclosure statement pegs the midpoint enterprise value of the reorganized company at $630 million, or less than senior secured debt. From the negotiations, unsecured creditors with claims totaling $163.4 million are to receive 8 percent of the new stock along with the right to purchase 2.9 percent more for $10 million, at prices ranging from $16.25 to $17.25 a share. Assuming unsecured creditors vote for the plan, senior lenders will waive their unsecured deficiency claim of almost $180 million. Consequently, the predicted recovery for other unsecured creditors is 15.9 percent. Unsecured claims are composed largely of $150 million in convertible notes. Gabriel Panayotides, the company's controlling shareholder, will continue to run the company. He, family members and related companies are to receive 7.1 percent to 10.1 percent of the new stock in return for an investment of $5 million to $15 million. In addition, Panayotides will allow the company to use $20 million held in escrow. The original plan for the Athens-based company would have given ownership to secured lenders, although the lenders agreed to allow Panayotides to maintain control at least initially and buy back the company later. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. The Debtor disclosed $35,642,525 in assets and $1,034,314,519 in liabilities as of the Chapter 11 filing. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. The Creditors' Committee is represented by Michael S. Stamer, Esq., Sean E. O'Donnell, Esq., and Sunish Gulati, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas. Jefferies LLC serves as the Committee's investment banker. The Debtors' Chapter 11 plan filed on July 15, 2013, proposes to implement a reorganization worked out before a July 1 bankruptcy filing. The plan will give ownership to secured lenders owed $771 million, although the lenders will allow current owner Gabriel Panayotides to keep control, at least initially. Unsecured creditors with claims totaling $163 million will receive a $5 million, eight percent note for a predicted recovery of 3 percent. Holders of $150 million in unsecured convertible notes make up the bulk of the unsecured-claim pool. EXTREME REACH: S&P Assigns Preliminary 'B' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Needham, Mass.-based media services company Extreme Reach Inc. The outlook is stable. At the same time, S&P assigned the proposed $30 million senior secured revolving credit facility due 2019 a preliminary 'BB-' issue-level rating, with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery of principal for debtholders in the event of a default. In addition, S&P assigned the proposed $350 million senior secured term loan due 2020 a preliminary issue-level rating of 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery of principal in a default. Lastly, S&P assigned the proposed $115 million second-lien term loan due 2021 a preliminary 'CCC+' issue-level rating, with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery of principal in a default. The company will use proceeds from the proposed transaction to fund its acquisition of Digital Generation Inc.'s TV assets. S&P expects the acquisition to close in the first quarter of 2014. Pro forma for the acquisition, Extreme Reach will be the largest provider of short-form content delivery to TV stations in the U.S. However, the acquisition entails substantial business integration risk, in S&P's view. Digital Generation's TV segment is significantly larger than Extreme Reach. Extreme Reach will need to plan and execute very carefully to integrate such a large asset and minimize disruptions that can cause client loss. The 'B' corporate credit rating incorporates S&P's assumption of low-single-digit percent revenue growth, continual pricing pressure on high-definition (HD) and standard-definition (SD) deliveries, steady cannibalization of TV advertising budget by online advertising, and high debt leverage. FIRST PHYSICIANS: D. Hirschhorn Quits as CEO, All Other Positions ----------------------------------------------------------------- David Hirschhorn resigned (i) as chief executive officer, Chairman of the Board of Directors and as a member of the Board of First Physicians Capital Group, Inc., and (ii) from any and all other positions and in all other capacities in which he served as an officer or director of the Company or any of the Company's subsidiaries. Mr. Hirschhorn had no disagreements with the Company on any matter related to the Company's operations, policies or practices. On Nov. 21, 2013, the Board appointed Sean J. Kirrane to the position of chief executive officer of the Company, to serve until his successor is duly appointed and qualified or until his earlier resignation or removal. Mr. Kirrane has no family relationship with any officer or director of the Company or any of its subsidiaries. Mr. Kirrane, 36, brings over 10 years of experience in senior finance and accounting roles for large publicly-traded companies, including large financial services and insurance firms. Since 2010, Mr. Kirrane, has served as the Company's vice president of Finance, controller and principal accounting officer. From 2007 to 2010, Mr. Kirrane served as assistant vice president, Head of Global Treasury for Endurance Specialty Holdings, Ltd., a property and casualty insurer, where he designed, implemented, staffed and managed that company's global treasury functions. From 2004 to 2007, Mr. Kirrane served in various finance and investment roles at New York Mortgage Trust, Inc., where he was responsible for treasury, budgeting & forecasting, debt management and covenant compliance activities. He assisted New York Mortgage through a successful IPO in June 2004 and was subsequently appointed as its vice president and treasurer in 2005. From 2000 to 2004, Mr. Kirrane held various positions in the accounting and treasury departments of Hudson United Bancorp, including assistant vice president, investment officer and treasury cash manager. In his positions at Hudson United, he was responsible for managing treasury operations and the derivatives and traded fixed income portfolio. Mr. Kirrane received a B.S. in Finance in 2000 from St. Joseph's University. Prior to his appointment as chief executive officer, Mr. Kirrane entered into a Consulting Agreement, dated as of June 30, 2013, with First Physicians Business Solutions, LLC, a wholly-owned subsidiary of the Company. Pursuant to the Consulting Agreement, Mr. Kirrane serves as the Company's chief financial officer for a period of 12 months from the effective date thereof, or the expiration of that 12-month term in accordance with the terms of the Consulting Agreement. In return for past services rendered to the Company prior to June 30, 2013, and upon the occurrence of certain events specified in the Consulting Agreement, Mr. Kirrane may also receive two earned bonus payments in the amount of $177,500 per payment. As of Dec. 9, 2013, Mr. Kirrane has not become entitled to any of these payments. Mr. Kirrane's base salary under the Consulting Agreement is $20,000 per month. Upon meeting certain performance milestones, Mr. Kirrane may also receive bonuses totaling up to $475,000. As of Dec. 9, 2013, Mr. Kirrane has not become entitled to any of these payments. Amendments to Bylaws Effective Nov. 21, 2013, the Board amended and restated the Company's Bylaws to (i) decrease the number of directors constituting the Board from five to three and (ii) decrease the number of directors constituting a quorum from three to two. A copy of the Amended Bylaws is available at http://is.gd/t8Jezb About First Physicians Beverly Hills, Calif.-based First Physicians Capital Group, Inc. (OTC BB: FPCG) -- http://www.fpcapitalgroup.com/-- is an operator of healthcare services firms in the U.S. The Company's balance sheet at Dec. 31, 2010, showed $24.6 million in total assets, $28.9 million in total liabilities, $191,000 in non-redeemable preferred stock, $12.2 million in redeemable preferred stock, and a stockholders' deficit of $16.7 million. As reported in the Troubled Company Reporter on Feb. 21, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about First Physicians Capital Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has experienced recurring losses from operations. FISKER AUTOMOTIVE: Judge Raises Concerns on Race Through Ch. 11 --------------------------------------------------------------- Tom Hals, writing for Reuters, reported that Fisker Automotive Holdings Inc. might not be making its plug-in Karma sports cars anymore, but it still knows speed. The company's lawyers convinced a bankruptcy judge on Tuesday that its Chapter 11 should proceed at an unusually rapid pace. According to the report, U.S. Bankruptcy Judge Kevin Gross in Wilmington began a hearing on Dec. 10 by suggesting the company should slow down its plan to sell its assets to Hong Kong tycoon Richard Li and give creditors four more weeks to get a handle on the situation. "I'm not sure why another few weeks relatively speaking would harm this process," said Judge Gross, the report related. "It would allow time for the creditors' committee to continue and complete its investigations." Fisker filed for bankruptcy on Nov. 22 and a creditors' committee was formed only on Dec. 5, the report said. The company has not produced a car in almost 18 months and the judge said there was no business that needed to be rescued through the breathing space of bankruptcy. "This is not the case of a melting iceberg or a burning omelet or anything of that nature," he said, the report further related. About Fisker Automotive Fisker Automotive Holdings, Inc., developer of the Karma plug-in hybrid electric sedan, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans to sell the business to Hybrid Tech Holdings, LLC. Fisker estimated assets of more than $100 million and listed debt of $500 million in its bankruptcy petition. The assets include an assembly plant purchased for $21 million from General Motors Corp. The plant never operated. The cars were assembled in Finland. Fisker now has 21 employees. Fisker received a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program and drew down about $192 million before the department froze the loan after Fisker failed to hit several development targets. The company defaulted on its loan in April 2013. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anyp Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co- counsel; Beilinson Advisory Group as restructuring advisors; and Rust Consulting/Omni Bankruptcy, as notice and claims agent and administrative advisor. The Debtors disclosed that they have entered into an asset purchase agreement with Hybrid for the sale of substantially all of its assets. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. FISKER AUTOMOTIVE: Plan Heading for Jan. 3 Confirmation Hearing --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fisker Automotive Inc remains on schedule to have an approved Chapter 11 plan by Jan. 3. According to the report, at a hearing on Dec. 10 in U.S. Bankruptcy Court in Delaware, the bankruptcy judge provisionally approved disclosure materials so creditors can vote on the plan. Provisional approval means anyone can contend before the plan- approval hearing on Jan. 3 that the disclosure statement was substandard. Creditors will finish voting by Dec. 30. The Chapter 11 petition was filed immediately after Hybrid Tech Holdings LLC bought the $168.5 million secured loan made by the U.S. Department of Energy. Hybrid Tech is offering to buy the assets in exchange for $75 million of the government loan. It will also supply $725,000 in cash for distribution to creditors under the liquidating Chapter 11 plan. In addition, the buyer will waive the $8 million loan to finance bankruptcy. The plan provides that unsecured creditors with about $320 million in claims will recover 1 percent from the cash supplied by Hybrid Tech, although only if the class votes for the plan. Similarly, Hybrid Tech will waive its unsecured deficiency claim only if the class votes "yes." The disclosure statement doesn't venture a guess about the percentage recovery by Hybrid Tech. About Fisker Automotive Fisker Automotive Holdings, Inc., developer of the Karma plug-in hybrid electric sedan, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans to sell the business to Hybrid Tech Holdings, LLC. Fisker estimated assets of more than $100 million and listed debt of $500 million in its bankruptcy petition. The assets include an assembly plant purchased for $21 million from General Motors Corp. The plant never operated. The cars were assembled in Finland. Fisker now has 21 employees. Fisker received a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program and drew down about $192 million before the department froze the loan after Fisker failed to hit several development targets. The company defaulted on its loan in April 2013. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anyp Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co- counsel; Beilinson Advisory Group as restructuring advisors; and Rust Consulting/Omni Bankruptcy, as notice and claims agent and administrative advisor. The Debtors disclosed that they have entered into an asset purchase agreement with Hybrid for the sale of substantially all of its assets. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. FRIENDFINDER NETWORKS: Plan's Bar to Investor Suits Opposed by SEC ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FriendFinder Networks Inc., the operator of adult social-networking websites, is impermissibly bestowing absolution for violations of securities laws through the proposed reorganization plan, according to court papers filed this week by the Securities and Exchange Commission. According to the report, FriendFinder's plan is up for approval at a Dec. 16 hearing. Worked out before bankruptcy in September with 80 percent of first- and second-lien lenders, the plan will give accrued interest plus an equal amount in new 14 percent first- lien notes to holders of $234.3 million in 14 percent first-lien notes. Holders of $330.8 million in two issues of second-lien notes are to receive all the new equity. The SEC says the plan is being used as a backdoor method for knocking out a shareholders' securities-fraud suit filed in federal district court in Florida in connection with an offering in 2011. The plan would bar shareholders from suing, although they receive nothing in the plan. The SEC contends that non-bankrupt third parties benefiting from involuntary releases by shareholders are coming out better than if they themselves were in bankruptcy. The SEC points to Section 523(a)(9) of the Bankruptcy Code that doesn't allow discharge of debt for violation of securities laws. The SEC said it doesn't agree the bankruptcy court has jurisdiction to terminate the shareholders' suit in district court. The plan would pay unsecured creditors in full. The first-lien notes last traded on Nov. 15 for 109 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. 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: Common Stock Securities Delisted by NASDAQ ----------------------------------------------------------------- On Nov. 27, 2013, NASDAQ Stock Market LLC filed with the U.S. Securities and Exchange Commission a Form 25 Notification of Removal From Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934 of the Common Stock of FriendFinder Networks Inc. A copy of the SEC Form 25 is available at http://is.gd/rHDofm 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. FURNITURE BRANDS: Debtor Taps Graham to Lead Liquidation -------------------------------------------------------- Richard Craver at the Winston-Salem Journal reports that FBI Wind Down Inc., the corporate entity that represents what's left of Furniture Brands International Inc. said it has appointed Meredith Graham to be in charge of liquidating remaining company assets. Ms. Graham has served as Furniture Brands' chief administrative officer and general counsel since May, the report relates. Winston-Salem Journal says Ms. Graham will be paid $286,000 a year. She also is eligible to receive a one-time bonus equal to a percentage of her base compensation if the debtors confirm a Chapter 11 plan with the U.S. Bankruptcy Court, the report relays. According to the report, KPS Capital Partners was confirmed Nov. 22 as the top bidder for Furniture Brands' assets at $280 million. On Nov. 28, KPS announced a new name for the assets -- Heritage Home Group LLC -- and that Furniture Brands' top executive, Ralph Scozzafava, has resigned, Winston-Salem Journal discloses. Winston-Salem Journal says Ira Glazer, 61, a veteran corporate turnaround expert, has been named president and chief executive. Heritage Home will operate as an independent company, the report adds. About Furniture Brands Furniture Brands International (NYSE:FBN) -- http://www.furniturebrands.com-- engaged 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. Its brands include Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. The balance sheet at June 29, 2013, showed $546.73 million in total assets against $550.13 million in total liabilities. 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. The official creditor's committee is comprised of the Pension Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers. The Committee tapped Blank Rome LLP as co-counsel, Hahn & Hessen LLP as lead counsel, BDO Consulting as financial advisor, and Houlihan Lokey Capital, Inc., as investment banker. In November 2013, Furniture Brands won bankruptcy court approval to sell the business to KPS Capital Partners LP for $280 million. Private-equity investor KPS formed a new company named Heritage Home Group LLC to operate the business. GENERAL MOTORS: Names Product Chief Mary Barra as Next CEO ---------------------------------------------------------- Jeff Bennett and Sara Murray, writing for The Wall Street Journal, reported that General Motors Co. tapped product chief Mary Barra as its next chief executive, smashing a century-old gender barrier while choosing a longtime insider who grew up steeped in Detroit's car culture. According to the report, Ms. Barra will succeed Dan Akerson as CEO next month and become the first woman to run a major global auto maker. The 51-year-old joined GM 33 years ago as a college intern, eventually becoming an engineering manager before running one of its big U.S. assembly plants. She got global experience managing human resources and, more recently, the company's world-wide product development group. She will become the 22nd woman currently running a Fortune 500 company, joining an exclusive club that includes Lockheed Martin Corp. Chief Executive Marillyn Hewson, IBM chief Virginia Rometty and Hewlett-Packard Co. chief Meg Whitman, who hold the top slots at formerly male-dominated firms, the report related. With Ms. Barra's appointment, GM becomes the largest company by revenue run by a female CEO, the report said. The world's second- largest auto maker by sales reported $152 billion in revenue last year. Overall, just 4.2% of Fortune 500 chief executives are female this year, the report noted. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: To End Manufacturing in Australia ------------------------------------------------- Rob Taylor and Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co., ending months of speculation, said on Dec. 10 it would cease all production in Australia, reflecting an accelerating shift by auto makers to leave what has become a high-cost country for foreign manufacturers. According to the report, The U.S. auto maker said it would take a US$400 million to US$600 million charge to earnings in its fourth quarter to discontinue vehicle and engine manufacturing in Australia. The decision will result in more than 2,900 job losses. The decision is the latest in a series of moves by departing Chief Executive Dan Akerson to clean up trouble spots in GM's operations before he steps down in January and hands the CEO job to product- development chief Mary Barra, the report related. In recent weeks, he also disclosed Chevrolet will no longer be actively sold in Europe; GM's stake in Ally Financial Inc. will be sold; production in South Korea will be cut back and the U.S. Treasury has ended its role in the auto maker, the report said. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world," Mr. Akerson said in a written statement, the report cited. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: 'New' GM Doesn't Owe $450MM Retiree Payment ----------------------------------------------------------- Patrick Fitzgerald, writing for The Wall Street Journal, reported that a federal judge said General Motors Co. isn't responsible for a $450 million payment promised by the "old" GM for its legacy retirees" medical benefits. According to the report, the United Auto Workers had sued the "new" GM in 2010, contending that the reorganized auto maker was obligated under an earlier deal to make the $450 million payment to cover medical benefits for retirees of its former parts subsidiary, Delphi Corp. Judge Avern Cohn of the U.S. District Court in Detroit said on Dec. 10 that a 2009 settlement pact between the UAW and GM on retiree benefits superseded all prior agreements, the report related. "New GM assumed only what was in that agreement; the $450 million payment was not among those obligations," Judge Cohn wrote in a 34-page opinion, the report cited. "Whether New GM has a moral obligation regarding the payment is another matter and not relevant in the face of clear contractual language." UAW President Bob King said in an emailed statement that the union was evaluating the decision and considering whether to appeal, the report further related. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENIUS BRANDS: A Squared's Andy Heyward Touts Merged Company ------------------------------------------------------------ Genius Brands International, Inc., distributed a letter to its shareholders on Dec. 9, 2013. "I wanted to take this opportunity to introduce myself and tell you about the new Genius Brands International, a result of the recently merged Genius Brands International and A Squared Entertainment, a privately held company I started in 2009 with my wife and partner, Amy Moynihan Heyward. Combining the assets of both companies, the two companies have been consolidated under the name Genius Brands International, creating a unique multimedia content creation, and distribution company with a focus on branded "content with a purpose" for toddlers to tweens," Andy Heyward Chairman and CEO said. A copy of the Letter is available for free at: http://is.gd/Zz9dIX About Genius Brands San Diego, Calif.-based Genius Brands International, Inc., creates and distributes music-based products which it believes are entertaining, educational and beneficial to the well-being of infants and young children under its brands, including Baby Genius and Little Genius. As of Sept. 30, 2013, the Company had $1.55 million in total assets, $4.96 million in total liabilities and a $3.41 million total stockholders' deficit. GLOBAL AVIATION: Has $51-Mil. Loan From Intended Buyer Cerberus --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Global Aviation Holdings Inc., the largest air- charter service for the U.S. military, won final approval of a $51 million loan from Cerberus Business Finance LLC, as agent for first-lien lenders and intended buyer of the business. According to the report, Global filed for Chapter 11 protection on Nov. 12 after emerging from a prior bankruptcy reorganization in February. The bankruptcy court in Delaware granted final approval of the Cerberus loan on Dec. 9. There will be a hearing on Dec. 20 for approval of auction and sale procedures. Global wants competing bids by Feb. 14. 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. The Debtors are represented by Kourtney Lyda, Esq., at Haynes and Boone, LLP, in Houston, Texas; and Christopher A. Ward, Esq., at Polsinelli PC, in Wilmington, Delaware. The first lien agent is represented by Michael L. Tuchin, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California. Wells Fargo Bank, National Association, agent to the second lienholders and third lienholders, is represented by Mildred Quinones-Holmes, Esq., at Thompson Hines LLP, in New York. GMX RESOURCES: Plan Confirmation Hearing Set for Jan. 21 -------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Oklahoma on Dec. 4, 2013, approved the First Amended Disclosure Statement for the Joint Plan of Reorganization of GMX Resources, Inc., and Its Debtor Subsidiaries. The Court found that the Disclosure Statement contains adequate information within the meaning of Bankruptcy Code Sec. 1125. The Court has set Jan. 21, 2014 at 1:30 p.m. central time, as the date and time for hearing on confirmation of the Plan and to consider any objections to the Plan. The confirmation hearing will be held in the Ninth Floor Courtroom, Old Post Office Building, 215 Dean A. McGee Avenue, Oklahoma City, Oklahoma. The hearing may be adjourned from time to time without further notice other than an announcement of the adjourned date(s) at the hearing, and thereafter, at any adjourned hearing(s). In addition, the Plan may be modified without further notice prior to or as a result of the confirmation hearing, and thereafter, as otherwise provided in the Bankruptcy Code. Any objection to confirmation of the Plan must be (A) filed with the Clerk of the Bankruptcy Court, (B) served by first class mail, postage prepaid to the Master Service List established in these cases, and (C) served by overnight delivery or e-mail to the following parties so as to be received on or before Jan. 10, 2014 at 4:00 p.m. central time: (a) Counsel to the Debtors: David Zdunkewicz, Esq. Timothy A. Davidson II, Esq. ANDREWS KURTH LLP 600 Travis, Suite 4200 Houston, TX 77002 E-mail: DZdunkewicz@andrewskurth.com TadDavidson@andrewskurth.com (b) Counsel to Backstop Lenders under DIP Financing and Steering Committee of Holders of Senior Secured Notes: Brian Hermann, Esq. Sarah Harnett, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 E-mail: bhermann@paulweiss.com sharnett@paulweiss.com (c) Counsel to the Unsecured CreditorsCommittee: Jason Brookner, Esq. LOOPER REED & MCGRAW P.C. 1601 Elm Street, Suite 4600 Dallas, TX 75201 E-mail: jbrookner@lrmlaw.com (d) The Office of the United States Trustee: United States Trustee Western District of Oklahoma Attn: Charles Snyder 2145 Dean A. McGee Avenue, Suite 408 Oklahoma City, OK 73102 E-mail: Charles.Snyder@usdoj.gov The Bankruptcy Court fixed Jan. 13, 2014, at 5:00 p.m. eastern time, as the deadline for the receipt of Ballots evidencing the votes accepting or rejecting the Plan. Special Local Counsel, Conflicts Counsel and Litigation Counsel for the Debtors are: William H. Hoch, Esq. Christopher M. Staine, Esq. CROWE & DUNLEVY, P.C. 20 N. Broadway, Suite 1800 Oklahoma City, OK 73102 Tel: (405) 235-7700 Fax: (405) 239-6651 E-mail: will.hoch@crowedunlevy.com christopher.staine@crowedunlevy.com The debtors-affiliates are Diamond Blue Drilling Co. and Endeavor Pipeline, Inc. GMX Plan The revised Chapter 11 plan is based on a settlement between senior secured noteholders and unsecured creditors. Senior secured noteholders are to assume ownership of the Debtors in exchange for $336.3 million of the $402.4 million they're owed, a recovery of about 83 percent. The plan reduces debt by $505 million. The senior noteholders will waive their $64 million deficiency claim if unsecured creditors vote in favor of the plan. Second-lien notes totaling $51.5 million and $42.3 million in convertible notes will be treated as unsecured debt. Similarly, $2 million in old senior notes will be in the class of unsecured creditors. Unsecured creditors will share $1.5 million in cash, for a recovery estimated at 1 percent or an undetermined larger amount as a result of successful lawsuits. Before the settlement, the unsecured creditors' committee objected to selling the assets to lenders in exchange for debt. The lenders had won an auction to buy the assets in a debt swap. The committee said the sale would have left nothing for unsecured creditors. The settlement abandoned the idea of standalone sale, in favor of giving ownership to senior noteholders through the plan. The $51.5 million in 9 percent second-lien notes last traded on Dec. 3 for less than 1 cent on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $48.3 million in senior unsecured notes due 2015 traded on Nov. 20 for less than 1 cent, according to Trace. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/GMX_RESOURCES_ds.pdf About GMX Resources 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. GORDIAN MEDICAL: Court Allows Creditors to File Suit v. Owners -------------------------------------------------------------- Tom Corrigan, writing for DBR Small Cap, reported that creditors of American Medical Technologies Inc. won court approval to pursue lawsuits against the California medical supplier. According to the report, the approval from the U.S. Bankruptcy Court in Santa Ana, Calif., will allow the committee representing unsecured creditors in the case to investigate and attempt to recover payments made to the company's owners, other companies controlled by the owners and to the company's law firm prior to AMT's bankruptcy filing. About Gordian Medical Gordian Medical, Inc., dba American Medical Technologies, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-12339) in Santa Ana, California, on Feb. 24, 2012, after Medicare refunds were halted. Irvine, California-based Gordian Medical provides supplies and services to treat serious wounds. The Debtor has active relationships with and serves patients in more than 4,000 nursing facilities in 49 states with the heaviest concentration of the nursing homes being in the south and southeast sections of the United States. In its schedules, the Debtor disclosed $37,877,279 in assets and $7,585,271 in liabilities as of the Petition Date. Judge Mark S. Wallace oversees the case. Jeffrey L Kandel, Esq., Teddy M Kapur, Esq., Samuel R. Maizel, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor as counsel. Fulbright & Jaworski LLP serves as the Debtor's special regulatory counsel. Loeb & Loeb LLP serves as the Debtor's special tax counsel. GlassRatner Advisory & Capital Group LLC serves as the Debtor's financial advisor. The U.S. Trustee appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by Landau Gottfried & Berger LLP. GRAND CENTREVILLE: Wants Until Feb. 13 to File Chapter 11 Plan -------------------------------------------------------------- Grand Centreville, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Virginia to enter a bridge order extending its exclusive periods to file a Chapter 11 Plan until Feb. 13, 2014, and solicit acceptances for that Plan until April 14. The Debtor filed its request for an extension before the exclusive periods was set to expire on Dec. 1, 2013. The Debtor, through Black Creek Consulting, Ltd., a receiver appointed by the Court, is continuing in possession of its properties and is operating and managing its business, as a Debtor-in-Possession. About Grand Centreville Grand Centreville, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-13590) on Aug. 2, 2013. The petition was signed by Michael L. Schuett, principal of Black Creek Consulting Ltd., the receiver. Judge Robert G. Mayer presides over the case. Paula S. Beran, Esq., and Lynn L. Tavenner, Esq., at Tavenner & Beran, PLC, in Richmond, Va., represents the Debtor as counsel. In its schedules, the Debtor disclosed $40,550,045.74 in assets and $26,247,602.00 in liabilities as of the petition date. GRAND CENTREVILLE: Jan. 15 Hearing on Case Dismissal Bid -------------------------------------------------------- The Bankruptcy Court will convene a hearing Jan. 15, 2014, at 9:30 a.m., to consider lender Wells Fargo Bank, N.A.'s motion for dismissal of the Chapter 11 case of Grand Centreville, LLC. Wells Fargo serves as trustee for the registered holders of JP Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-CIBC13. As reported in the Troubled Company Reporter on Nov. 28, 2013, James Y. Sohn, the holder of at least 40% ownership interest in Grand Centreville, LLC; Raymond A. Yancey, the Chapter 11 trustee for the bankruptcy estate of Min S. Kang and Man S. Kang; and Debtor Grand Centreville LLC opposed Wells Fargo's dismissal bid. Sohn said Wells Fargo would suffer no harm if the Debtor were to remain in bankruptcy until resolution of the adversary proceeding filed by Wells Fargo and the Committee of Unsecured Creditors of the estate of Min Sik Kang and Man Suk Kang (Bankr. E.D. Va. Case No. 10-18839). The adversary proceeding seeks, among others, to avoid the transaction in which Sohn acquired his ownership interest in the Debtor (Adv. Proc. No. 12-01496). The Chapter 11 trustee for the Kang Estate, said the motion to dismiss lacked merit and must be denied. The trustee believed that the Debtor's Chapter 11 proceeding is necessary to protect the interest of the Kang Estate in Grand Centreville, LLC. According to the Trustee, Grand Centreville, the "crown jewel" of the Kang Estate, has never defaulted on its loan obligations, and its Shopping Center is nearly fully leased. In its opposition to the dismissal motion, the Debtor said the bankruptcy case was not filed in bad faith. To the contrary, according to the Debtor, it was filed to prevent an unjustified and unnecessary impairment to value that could have been caused by the Lender's actions. "Indeed, Grand Centreville has never defaulted on its payment obligations, and its shopping center is nearly fully leased. Grand Centreville's bankruptcy was the result of the aggressive actions of the Lender, who remarkably has suffered no loss and is not at any risk of loss. Rather, the Lender made a strategic grab for a windfall, and declined even to discuss a simple standstill agreement that could have avoided the need for a bankruptcy filing. And now the Lender comes before this Court asserting that the case was filed in bad faith?" A copy of Sohn's opposition to the Dismissal Motion is available at http://bankrupt.com/misc/grandcentreville.sohn.doc75.pdf A copy of Kang's opposition to the Dismissal Motion is available at http://bankrupt.com/misc/grandcentreville.kang.doc76.pdf A copy of the Debtor's opposition to the Dismissal Motion is available at http://bankrupt.com/misc/grandcentreville.doc77.pdf As reported in the TCR on Nov. 6, 2013, Wells Fargo said the Debtor's bankruptcy proceeding should be dismissed for cause, pursuant to 11 U.S.C. Sec. 1112(b) for several reasons: -- the Receiver (for both the Debtor and its sole managing member, Grand Formation, LLC) did not have authority to initiate the Bankruptcy Proceeding; -- Even if the Receiver did have such authority, the bankruptcy is both objectively futile and subjectively filed in bad faith for the reasons: (1) the Debtor is a financially healthy entity that has no need to reorganize; (2) the Debtor's only asset is the Shopping Center and its associated property, which is the Secured Creditor's Collateral; (3) the Debtor has few unsecured creditors, whose claims are small in comparison to those of the Secured Creditor, the only secured creditor in the case; (4) the Shopping Center and its associated property are subject to a foreclosure action as a result of the Debtor's default on the Loan; (5) the Debtor's financial condition is, in essence, a two-party dispute between the Debtor and the Secured Creditor which can be resolved in state court proceedings; (6) the timing of the Debtor's Bankruptcy Proceeding indicates the Debtor's intent to delay or frustrate the Secured Creditor's enforcement of its rights under the Loan Documents; and (7) the Debtor intended to use the automatic stay provided by the Bankruptcy Code to prevent the Secured Creditor from enforcing its rights under the Loan Documents and as a litigation tactic against Secured Creditor. Each of the factors warranting dismissal of the Debtor's Bankruptcy Proceeding, Wells Fargo contends, are well-established by the Fourth Circuit Court of Appeals and courts applying the Fourth Circuit's standard for dismissal. The improperly filed Bankruptcy Proceeding is dissipating the Debtor's assets, harming the interests of the Debtor and its creditors. Wells Fargo said the Receiver's lack of authority to file for bankruptcy relief is, in and of itself, an independent basis for dismissal of the Bankruptcy Proceeding. Even if the Court were to find the Receiver was authorized to file bankruptcy on behalf of Grand Centreville, LLC, under the circumstances of this case, the Secured Creditor said the filing is further evidence of bad faith. Indeed, when looking at the totality of the circumstances, Secured Creditor submits Debtor's Bankruptcy Proceeding was filed in bad faith. The facts show that Debtor has no need to reorganize given its solvency, financial health, and minimal debt. Rather than being filed in order to reorganize Debtor's financial affairs, the Bankruptcy Proceeding was initiated in an effort to re- characterize a two-party dispute, and use the Bankruptcy Code and the automatic stay to limit Secured Creditor's enforcement rights and remedies under the Loan Documents. As a result, the Bankruptcy Proceeding is objectively futile because it simply cannot be said that the proceeding has some relation to the statutory objective of resuscitating a financially troubled debtor. Furthermore, the Bankruptcy Proceeding was filed with subjective bad faith because the Debtor did not intend to use Chapter 11 with the honest intent of effectuating a reorganization; rather, it intended to use Chapter 11 for an improper purpose such as seeking to cause hardship or to delay Wells Fargo through the use of the automatic stay. Accordingly, the bankruptcy should be dismissed. As long as the Bankruptcy Proceeding continues, the improperly filed Bankruptcy Proceeding is harming the interests of the Debtor and its creditors because the Debtor is incurring substantial unnecessary fees on account of the Bankruptcy Proceeding, dissipating the assets. About Grand Centreville Grand Centreville, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-13590) on Aug. 2, 2013. The petition was signed by Michael L. Schuett, principal of Black Creek Consulting Ltd., the receiver. Judge Robert G. Mayer presides over the case. Paula S. Beran, Esq., and Lynn L. Tavenner, Esq., at Tavenner & Beran, PLC, in Richmond, Va., represents the Debtor as counsel. In its schedules, the Debtor disclosed $40,550,045.74 in assets and $26,247,602.00 in liabilities as of the petition date. GULFSTREAM INT'L: Officers Pay $1.9-Mil. From Insurance to Settle ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that former officers and directors of Gulfstream International Group Inc. will have their insurance carrier pay $1.9 million to settle seven lawsuits brought on behalf of the bankrupt airline's creditors. According to the report, the regional airline sold the business in early 2011 to an affiliate of Chicago-based Victory Park Capital Advisors LLC. In August 2011, Gulfstream won bankruptcy court approval of a Chapter 11 plan that created a trust for filing suits. Late last week, the trust announced a settlement with former officers and directors who will "use their best efforts" to cause the insurance company to pay the $1.9 million settlement. If the payment isn't made, the settlement will be unwound. Victory Park bought Gulfstream in return for financing it provided the Chapter 11 case. In addition, Victory Park paid Raytheon Aircraft Credit Co. $18.7 million to buy the 21 Beechcraft 1900 D aircraft that Gulfstream operated. About Gulfstream International Fort Lauderdale, Florida-based Gulfstream International Airlines (NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000 aircraft, and specialized in providing travelers with access to niche locations not typically covered by major carriers. GIA operated more than 150 scheduled flights per day, serving nine destinations in Florida, 10 destinations in the Bahamas, five destinations from Continental Airline's hub under the Department of Transportation's Essential Air Service Program and supports charter service to Cuba through a services agreement with Gulfstream Air Charter, Inc., an entity otherwise unrelated to the Debtors. GIA operated as a Continental Connection carrier, as well as for United Airlines, Northwest Airlines and Copa Airlines, through code share agreements. GIA has 620 employees, including 530 working full-time. Gulfstream International Group, Inc., and its units including Gulfstream International Airline, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-44131) on Nov. 4, 2010. Brian K. Gart, Esq., at Berger Singerman, P.A., serves as the Debtors' bankruptcy counsel. Jetstream Aviation Capital, LLC and Jetstream Aviation Management, LLC, serve as financial advisors to the Debtors. Robert A. Schatzman, Esq., Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at GrayRobinson, P.A., in Miami, Florida, serve as counsel to the Official Committee of Unsecured Creditors. Gulfstream International Airlines disclosed US$15,967,096 in total assets and US$25,243,099 in total liabilities. Victory Park provided Gulfstream with up to US$5 million debtor- in-possession financing to fund the Chapter 11 case. As reported in the Troubled Company Reporter on May 18, 2011, Dow Jones' DBR Small Cap said that Victory Park Capital is buckling again into the airline sector, completing its purchase of Gulfstream International Group Inc. A prior bankruptcy court order said there will be a "structured dismissal" of the Chapter 11 case within 30 days of the completion of the sale. In December 2011, VPAA Co. dba/Gulfstream International Airlines disclosed its adoption of a new name and brand: Silver Airways. The name, along with its crisp and distinctive logotype, exemplify the airline's dynamic growth potential, as well as its unwavering commitment to providing highly professional, safe and efficient operations. HOUSTON REGIONAL: Comcast Blasts Astros Owner's Suit ---------------------------------------------------- Law360 reported that Comcast Corp. told a Texas bankruptcy judge on Dec. 9 that a fraud suit filed by the owner of the Houston Astros is threatening efforts to revive a co-owned regional sports network and that the team should be forced to present a viable plan for salvaging the network. According to the report, Astros owner Jim Crane's suit accused billionaire Drayton McLane Jr. and Comcast of conspiring to inflate the value of the ball club and its stake in Houston Regional Sports Network LP. About Houston Regional Sports Network An involuntary Chapter 11 bankruptcy petition was filed against Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013. The involuntary filing was launched by three units of Comcast/NBC Universal and a television-related company. The petitioners are: Houston SportsNet Finance LLC, Comcast Sports Management Services LLC, National Digital Television Center LLC, and Comcast SportsNet California, LLC. The petitioning creditors have filed papers asking the Bankruptcy Judge to appoint an independent Chapter 11 trustee "to conduct a fair and open auction process for the Network's business assets on a going concern basis." Houston Regional Sports Network is a joint enterprise among affiliates of the Houston Astros baseball team, the Houston Rockets basketball team, and Houston SportsNet Holdings, LLC -- "Comcast Owner" -- an affiliate of Comcast Corporation. The Network has three limited partners -- Comcast Owner, Rockets Partner, L.P., and Astros HRSN LP Holdings LLC. The primary purpose of Houston Regional Sports Network is to create and operate a regional sports programming service that produces, exhibits, and distributes sports programming on a full-time basis, including live Astros and Rockets games within the league- permitted local territories. Counsel for the petitioning creditors are Howard M. Shapiro, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at Davis Polk & Wardwell LLP. Judge Marvin Isgur presides over the case. HOSPITALITY STAFFING: AIG Objects to Sale of Company to Lenders --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hospitality Staffing Solutions Group LLC, the largest U.S. provider of housekeeping personnel for hotels, will encounter opposition from AIG Property Casualty Inc. at a hearing on Dec. 12 in U.S. Bankruptcy Court in Delaware regarding a sale of the business in exchange for secured debt. According to the report, HSS filed for Chapter 11 protection on Oct. 24 and the next day submitted papers proposing to sell the business to lenders in exchange for the $22.9 million secured bank loan. An investor group acquired the bank loan on Oct. 11, according to court papers. The investor group includes SG Distressed Debt Fund LP, LittleJohn Opportunities Master Fund LP and LJC Investment I LLC. According to New York-based AIG, the lenders will take the business in exchange for the $22.9 million in secured debt, plus assumption of specified liabilities. The lenders are also providing a $7 million loan to finance the bankruptcy. The problem with the sale, according to AIG, is that the lenders aren't trading bankruptcy financing for ownership. As a result, the lenders will take ownership of the business and retain a so- called superpriority claim for the bankruptcy loan. As a result, the lenders will take over lawsuits and preference claims that otherwise would be the only assets remaining for unsecured creditors. At a minimum, AIG wants the bankruptcy judge to force the lenders to pay cash for the suits and claims. About Hospitality Staffing Solutions Hospitality Staffing Solutions, LLC (HSS) -- http://www.hssstaffing.com-- is a hospitality staffing company. Established in 1990, the company's team of hotel industry experts works with 4 and 5 star properties in 35 states and 62 markets across the country. Hospitality Staffing Solutions and various affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 13-12740) on Oct. 24, 2013, to facilitate a sale of the business to HS Solutions Corporation, an entity formed by LJC Investments I, LLC and a group of investors including Littlejohn Opportunities Master Fund, L.P., Caymus Equity Partners and Management, and SG Distressed Debt Fund LP. The investor group acquired $22.9 million of the Company's secured bank debt on Oct. 11. That debt is in default. The sale transaction is subject to higher and better offers. The Chapter 11 cases are before Judge Brendan Linehan Shannon. The Debtors are represented by Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware; and Jeffrey C. Hampton, Esq., Monique Bair DiSabatino, Esq., and Ryan B. White, Esq., at Saul Ewing LLP, in Philadelphia, Pennsylvania. The Debtors' financial advisor is Conway Mackenzie, Inc., and their investment banker is Duff & Phelps Corp. Epiq Systems, Inc., is the Debtors' claims and noticing agent. The investor group is providing DIP financing. They are represented by Scott K. Charles, Esq., and Neil M. Snyder, Esq., at Wachtell, Lipton, Rosen & Katz, in New York; and Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware. INTEGRA TELECOM: S&P Raises Rating to 'B+'; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services said it raised its rating on U.S.-based competitive local exchange carrier (CLEC) Integra Telecom Inc. to 'B+' from 'B'. The outlook is stable. S&P also raised all issue-level ratings on the company's debt by one notch in conjunction with the upgrade. The recovery ratings on the company's debt issues remain unchanged. S&P removed all the ratings from CreditWatch, where it had placed them with positive implications on Nov. 26, 2013. "We base our upgrade primarily on a reassessment of the importance of volatility of earnings in Integra's business risk profile," said Standard & Poor's credit analyst Michael Weinstein. Importantly, the company's operating profitability (measured by EBITDA margin) is less volatile than many of its CLEC peers, as a result of its dense network of owned fiber assets and stabilized monthly churn figures, which are key considerations in the company's "weak" competitive position. The stable outlook reflects S&P's expectation that the company will sustain leverage below 5x over the next couple of years given stabilized monthly customer churn and gradual EBITDA growth driven by its upmarket sales focus. S&P could lower the rating if Integra's private equity owners pursue a more aggressive financial policy that raises leverage to above 5x on a sustained basis, such as a material debt-funded acquisition or shareholder distribution. S&P could also lower the rating if earnings decline precipitously due to intensifying competitive conditions, operational missteps, or economic weakness. This could lead to higher revenue churn, resulting in adjusted leverage exceeding 5x, with no prospect for improvement. An upgrade would require an improvement in S&P's view of Integra's "weak" business risk profile, which is extremely unlikely given the intense competitive forces facing Integra as a CLEC. Assuming the company's "weak" business risk assessment is not revised upward, S&P believes ratings upside would be constrained by the company's private equity ownership status. IPALCO ENTERPRISES: S&P Lowers ICR to 'BB+' & Removes from Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term issuer credit rating on IPALCO Enterprises Inc. and its utility subsidiary to 'BB+' from 'BBB-'. S&P removed the ratings from CreditWatch, where it placed them with negative implications on Nov. 26, 2013. At the same time, S&P affirmed IPALCO's 'BB+' senior unsecured rating. S&P assigned a recovery rating of '3', indicating its expectation that lenders would receive meaningful (50% to 70%) recovery of principal in a default. S&P also affirmed IP&L's 'BBB+' senior secured issue rating, based on a '1+' recovery rating. The downgrade reflects S&P's assessment that the cumulative value provided by structural protections, including an independent director in place to help protect IPALCO from a voluntary bankruptcy initiated by the parent, who also participates in all board votes and has decision making authority, a non-consolidation opinion, covenants, a separateness agreement, and some dividend limitations, insulate the credit quality of IPALCO and IP&L from their weaker parent, AES Corp. These factors, combined with the subsidiaries' stand-alone credit profile, provide Standard & Poor's with sufficient basis to differentiate S&P's issuer credit ratings on IPALCO and IP&L by two notches from their ultimate parent. S&P's "excellent" business risk assessment on IPALCO incorporates its "very low" industry risk assessment of the regulated utility industry and a "very low" country risk based on the company's focus on U.S. operations and markets. S&P's assessment of IPALCO.'s "aggressive" financial risk profile is based on its expectation that operating results will benefit from recent improvements in recovery mechanisms issued by the state. IPALCO's liquidity is "adequate," as defined by S&P's criteria. "The stable outlook on the ratings reflects our expectation that IPALCO will not issue additional debt for the purpose of distributing the proceeds as a dividend to AES Corp.," said Standard & Poor's credit analyst Matthew L O'Neill. Should IPALCO so issue additional debt, S&P's analysis of the company's financial policy would be significantly altered, and it would most likely lower the rating, perhaps by multiple notches. Under Standard & Poor's baseline forecast, it expects IPALCO's FFO of about 12% to 13% and debt to EBITDA of 5x over the next three years. Fundamental to S&P's forecast is the timing and the ultimate cost of the environmental capital spending and a gradual economic recovery. S&P would lower the ratings if it downgraded AES and no additional insulation measures were put in place. S&P could also downgrade IPALCO if the stand-alone credit profile were to weaken and financial measures such as FFO to debt weakened to less than 9% and debt to EBITDA rose to more than 5.5x on a sustained basis. Absent further enhancement to the ring-fencing provisions, higher ratings at IPALCO and IP&L are unlikely at this time. S&P could raise the ratings if it raises the ratings on AES. IZEA INC: CEO Buys 11,000 Common Shares --------------------------------------- Edward H. Murphy, IZEA, Inc.'s president and chief executive officer, purchased 11,000 shares of the Company's common stock in the open market for a total purchase price of $3,090 (an average of $0.28 per share) for investment purposes, from Dec. 6, 2013, through Dec. 9, 2013. About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. IZEA reported a net loss of $4.67 million in 2012 as compared with a net loss of $3.97 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $3.39 million in total assets, $4.68 million in total liabilities and a $1.28 million total stockholders' deficit. Cross, Fernandez & Riley, LLP, in Orlando, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and had a negative working capital and an accumulated deficit at Dec. 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern without raising sufficient additional financing. JOHN A. ROCCO: Ch.7 Trustee Wins Judgment Against Peachtree ----------------------------------------------------------- New Jersey Bankruptcy Judge Donald H. Steckroth granted the motion for summary judgment filed by Steven P. Kartzman, Chapter 7 Trustee for John A. Rocco Co., Inc., in his lawsuit against Peachtree Special Risk Brokers, LLC, to avoid and recover two transfers made by the Debtor in the 90 days prior to the Petition Date. Count One of the Chapter 7 Trustee's complaint seeks avoidance of two preferential wire transfers in the aggregate amount of $138,114.50 under Bankruptcy Code Section 547(b). Count Five seeks recovery of the avoided transfers under Bankruptcy Code Section 550. The Bankruptcy Judge denied Peachtree's cross-motion for partial summary judgment, which alleges that there is a dispute of material fact as to whether the transfers were made on account of an antecedent debt. The Debtor and Peachtree entered into an agreement on July 30, 2009, under which the Debtor placed contracts of insurance through companies represented by Peachtree. The lawsuit is, STEVEN P. KARTZMAN, as Chapter 7 Trustee, Plaintiff, v. PEACHTREE SPECIAL RISK BROKERS, et al., Defendants, Adv. Proc. No. 12-01269 (DHS), (Bankr. D.N.J.). A copy of the Court's Dec. 9, 2013 Opinion is available at http://is.gd/w8gMmw from Leagle.com. The Chapter 7 trustee is represented by: Steven P. Kartzman, Esq. Adam G. Brief, Esq. MELLINGER, SANDERS & KARTZMAN LLC 101 Gibraltar Drive Morris Plains, NJ 07950 Tel: 973-267-0220 E-mail: skartzman@msklaw.net Peachtree is represented by: Christopher R. Belmonte, Esq. SATTERLEE STEPHENS BURKE & BURKE LLP 51 John F. Kennedy Parkway First Floor West Short Hills, NJ 07078-2713 Tel: (973) 218-2509 Fax: (973) 218-2401 E-mail: cbelmonte@ssbb.com John A. Rocco Co., Inc., filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on March 25, 2010 (Bankr. N.J., Case No. 10-18799). The case was converted to Chapter 7 on February 7, 2012, and Steven P. Kartzman was appointed Chapter 7 Trustee. KEYSTONE AUTOMOTIVE: S&P Puts 'B' CCR on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Keystone Automotive Operations Inc. on CreditWatch with positive implications following the announcement that the company has agreed to be acquired by LKQ Corp. (BB+/Stable/--). "The rating action is based on Keystone's proposed acquisition by higher-rated LKQ and our expectation that Keystone's debt will likely be repaid at closing of the transaction," said credit analyst Robyn Shapiro. Therefore, S&P did not place Keystone's rated debt on CreditWatch. LKQ expects to fund the transaction with funds from LKQ's revolving credit facility and asset securitization program. As of Sept. 30, 2013, LKQ had approximately $1.2 billion available from these sources. The ratings on U.S.-based aftermarket auto parts distributor Keystone reflect S&P's view of the company's "highly leveraged" financial risk profile and "weak" business risk profile, as defined in S&P's criteria. In resolving the CreditWatch listing, S&P will monitor the progress the companies make toward closing the transaction. S&P expects to raise its corporate credit rating on Keystone upon closing, aligning it with its rating on LKQ and, subsequently, to withdraw both its corporate credit and issue-level ratings on Keystone once the existing debt has been repaid. LEHMAN BROTHERS: Hipotecas Wants LBHI Trustee to Turn Over Docs --------------------------------------------------------------- Hipotecas de America, S.A., asked the U.S. Bankruptcy Court in Manhattan to force the trustee of Lehman Brothers Holdings Inc.'s brokerage to respond to the company's request to turn over documents related to its $2.465 million claim. The move came after the trustee allegedly refused to release documents requested by Hipotecas concerning the purchase of securities effected by the Lehman brokerage on behalf of the company. Hipotecas also wanted to examine documents concerning the Lehman brokerage's custody of the securities, any transaction concerning the securities, and how the brokerage accounted for the company's securities in its books. The claim stemmed from bonds that were subject to repurchase agreements. James Giddens, the court-appointed trustee, previously denied the claim, saying the securities do not constitute "customer property" under the Securities Investor Protection Act. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Belik May Pursue PI Claim Against Insurer ---------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved an agreement between Lehman Brothers Holdings Inc. and Yuri Belik, which calls for the lifting of the automatic stay that was applied to a lawsuit filed by the claimant against the company's subsidiary. The automatic stay is an injunction that halts actions by creditors against a company in bankruptcy protection. Belik, who figured in an accident at a construction site owned by LB 745 LLC, sued the Lehman subsidiary to recover her insurance claim. LB 745 was reportedly covered under an insurance policy provided by American Home Assurance Co. at the time of the accident. A full-text copy of the agreement is available without charge at http://is.gd/4aDjbX About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Renews $30.7-Mil. Suit vs. Americredit ------------------------------------------------------- Lehman Brothers renewed its $30.7 million lawsuit against Americredit Financial Services Inc. for "grossly" understating what it owed Lehman on six interest-rate swaps tied to securities-backed auto loans, Dow Jones Business News reported. Americredit, a subprime auto lender bought by General Motors Co. in 2010, terminated its swaps with Lehman shortly after the investment bank's 2008 Chapter 11 filing. Lehman's lawyers allege the auto-finance company manipulated the market quotation process for replacement swaps to avoid paying millions in early termination payments to Lehman. The lawsuit is seeking $30.7 million plus interest, according to the report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Thomas Appeals Order Disallowing Claim v. LBI -------------------------------------------------------------- Stephen Thomas filed court papers in connection with his appeal from a bankruptcy court's order that barred him from pursuing his claim against Lehman Brothers Holdings Inc.'s brokerage unit. The U.S. Bankruptcy Court in Manhattan on Oct. 15 issued an order disallowing three claims, including Mr. Thomas' $630,932 claim, on grounds that they were filed after the court-approved deadline. In the court filings, Mr. Thomas asks the District Court to determine: (1) whether the bankruptcy court erred as a matter of law and fact in declining to allow his discovery to explore whether the proper notice had been given on the claims motion; (2) whether the fact that Mr. Thomas is a creditor and not a SIPA claimant requires the bankruptcy court to apply the notice standard under the Bankruptcy Code rather than the stricter SIPA requirement, thus permitting the bankruptcy court to consider the equities and facts and circumstances surrounding the notice and late filed claim; (3) whether the facts and circumstances set forth on the record are sufficient to allow the bankruptcy court now to permit the claim to be considered filed timely. Mr. Thomas, who is represented by New Jersey-based Rabinowitz Lubetkin & Tully LLC, brought the appeal before the U.S. District Court for the Southern District of New York. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEVI STRAUSS: Fitch Hikes Issuer Default Rating to 'BB-' -------------------------------------------------------- Fitch Ratings has upgraded its Issuer Default Rating (IDR) on Levi Strauss & Co. to 'BB-' from 'B+'. In addition, Fitch has affirmed its rating on Levi's secured bank credit facility at 'BB+' and senior unsecured notes at 'BB-'. The Rating Outlook is Stable. Levi had $1.6 billion of debt outstanding as of Aug. 25, 2013. Key Rating Drivers Improved Credit Profile: The upgrade reflects strong, margin- driven growth in EBITDA to $616 million in the 12 months ended Aug. 25, 2013 from a level below $500 million over the past four years, together with meaningful debt reduction over 2012-2013, leading to marked improvement in the company's credit profile. The upgrade further reflects the expectation for additional debt repayment over the next several years that will drive further improvement in adjusted leverage. The rating continues to reflect Levi's well-known brands, strong market shares, and wide geographic diversity, as well as the challenging consumer environment and weak sales trends in international markets. EBIT Margin Improvement: Levi's EBIT margin improved strongly to 10.6% in the 12 months ended Aug. 25, 2013 from 7.4% in fiscal 2012, driven by an expansion of the gross margin due primarily to the effect of lower cotton prices in the first half of the year, as well as strong cost containment. This represents a change in trend from five years of margin contraction (2007-2011) caused by the global recession, Levi's investments in its products, advertising, and retail stores, and higher cotton costs. Fitch believes that EBIT margins could be constrained over the near term by the promotional selling environment, as well as higher advertising expense and incentive compensation, but that they will broadly stabilize at or near current levels longer-term. Mixed Top Line: Levi's revenues grew 2.3% on a constant currency basis in the nine months ended Aug. 25 2013, following a 0.4% constant currency decline in fiscal 2012 (ended November). This reflects sales declines in the Asia Pacific region (16% of 2012 revenues) and weak sales growth in Europe (24% of revenues), partly offsetting low- to mid-single-digit growth in the Americas (60% of revenues). Fitch projects consolidated sales growth will track at a low single-digit pace over the next 12-24 months, and will continue to be moderately constrained by the economic slowdown in Europe and Asia. FCF to Debt Reduction: Leverage (adjusted debt/EBITDAR) improved to 3.8x at August 2013 from 5.0x at fiscal year-end 2012, as EBITDA recovered strongly and as Levi repaid $180 million of debt from free cash flow (FCF). Fitch expects management to continue to strengthen the balance sheet by using FCF, which Fitch estimates at around $200 million per year, to repay debt. There is only $48 million of long-term debt maturing in the next four years, though the $401 million of Euro senior notes due in May 2018 become callable in 2014, and the $525 million of senior notes due in May 2020 become callable in 2015, giving the company the flexibility to further reduce debt levels. Leverage could therefore improve toward the mid-3x range over the next two years assuming steady to gradually improving EBITDA and management's continued commitment to debt reduction. Adequate Liquidity: Liquidity is supported by FCF as well as cash of $382 million and revolver availability of $522 million as of Aug. 25, 2013. There were no borrowings against the facility at quarter-end. Secured Bank Facility: The 'BB+' rating of the $850 million secured revolving credit facility reflects its superior position in the capital structure, secured by North American inventories and receivables, and the U.S. Levi trademark. The facility also benefits from upstream guarantees from the domestic operating companies. Rating Sensitivities A positive rating action would be considered as there is evidence that Levi's margins are in a sustained recovery. Fitch would also expect to see FCF remain in positive territory, permitting ongoing reduction in debt levels and improvement in adjusted financial leverage to the mid-3x range. A negative rating action would be considered if recent margin improvement proves to be short-lived, and sales trends remain soft, causing adjusted financial leverage to move back above the mid-4x range. Fitch has taken the following rating actions: Levi Strauss & Co. -- IDR upgraded to 'BB-' from 'B+'; -- $850 million secured revolving credit facility affirmed at 'BB+'; -- Senior unsecured notes affirmed at 'BB-'. The Rating Outlook is Stable. LIFECARE ST. JOHNS: Files Cash Collateral Budget Thru March 2014 ---------------------------------------------------------------- Life Care St. Johns, Inc. filed with the Bankruptcy Court a revised budget in connection with the consensual use of cash collateral until March 26, 2014. A copy of the revised budget is available for free at http://bankrupt.com/misc/LIFECAREcashcollrevisedbudget.pdf The Debtor relates that in accordance with the Court's final order authorizing use of cash collateral and providing adequate protection, in the absence of the objection, the revised budget will become the approved Budget. As reported in the Troubled Company Reporter on Sept. 9, 2013, the Court, in a final order, authorized Life Care St. Johns, Inc.'s use of cash collateral, which Wells Fargo Bank, National Association, in its capacity as indenture trustee for the bonds, asserts an interest in. As of the Petition Date, the amount due and owing by the Debtor with respect to the bonds as: (i) unpaid principal on the bonds in the amount of $55,615,000; (ii) accrued but unpaid interest on the bonds in the amount of $1,530,893 as of July 1, 2013, which interest continues to accrue at a per diem rate of $8,504; and (iii) unliquidated, acrued and unpaid fees and expenses of the bond trustee and its professionals incurred through the Petition Date. The Court has overruled the objection to the Cash Collateral Motion filed by Office of Insurance Regulation. The Debtor may use the cash collateral to preserve the value of its business. The bond trustee has informed the Debtor and the Court that it does not consent to the use of cash collateral except upon the terms and conditions of the final order. As adequate protection to the bond trustee in respect of the use of cash collateral, the Debtor will grant the bond trustee replacement liens on collateral and a superpriority administrative expense claim status. About Life Care St. Johns Life Care St. Johns, Inc., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04158) on July 3, 2013. Judge Jerry A. Funk presides over the case. The Debtor is the owner and operator of a continuing care retirement community known as Glenmoor consisting of 144 independent living units located on a 40-acre site in St. Johns County, Florida. Richard R. Thames, Esq., and Eric N. McKay, Esq., at Stutsman Thames & Markey, P.A., serves as the Debtor's counsel. Navigant Capital Advisors, LLC, acts as the Debtor's financial advisor. Eddie Williams, III, Esq., and Beth A. Vecchioli, Esq., at Holland & Knight, LLC, serves as regulatory compliance counsel. Hamlyn Senior Marketing, LLC, is the marketing consultant. American Legal Claim Services, LLC, serves as claims and noticing agent. The official committee of creditors holding unsecured claims is represented by Akerman Senterfitt's David E. Otero, Esq., and Christian P. George, Esq., in Jacksonville, Florida. The Debtor estimated assets of at least $10 million and debts of at least $50 million. Life Care St. Johns, Inc. filed in November 2013, a proposed plan of reorganization that allows Life Care Pastoral Services to retain control of the facility. According to the explanatory disclosure statement, the Plan provides for a "sponsor contribution". On the effective date of the Plan, Life Care's LCPS Management, Inc., the manager, will transfer to Glenmoor 11.01 acres of unimproved real property adjacent to the Glenmoor facility. In addition, LCPS will subordinate any claim it is owed by the Debtor to payment of the Series 2014A Bonds, the Series 2014B Bonds, and notes to holders of refund claims. LIGHTSQUARED INC: Suit Against Ergen Avoids Dismissal ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Charles Ergen and his Dish Network Corp. failed at a hearing on Dec. 10 to win outright dismissal of lawsuits by LightSquared Inc. and Philip Falcone's Harbinger Capital Partners LLC, LightSquared's controlling shareholder. According to the report, the suits contend that companies controlled by Ergen were prohibited from purchasing LightSquared debt, and thus controlling enough votes to prevent LightSquared from gaining creditor approval of a Chapter 11 reorganization plan. The debt purchases were designed so an Ergen company could acquire LightSquared's valuable spectrum licenses. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Centerbridge Reaches Tentative Deal ----------------------------------------------------- Mike Spector and Emily Glazer, writing for The Wall Street Journal, reported that private-equity firm Centerbridge Partners LP reached a tentative deal to buy LightSquared Inc. out of bankruptcy proceedings, said people familiar with the matter, potentially upstaging a bid by Dish Network Corp. to take over the wireless-telecommunications firm. According to the report, Centerbridge proposed paying roughly $3.3 billion for the wireless venture, backed by financier Philip Falcone, and assuming about $1.7 billion in various liabilities, the people said. The deal would be executed under a bankruptcy- reorganization plan, some of the people said. Centerbridge's negotiations with LightSquared were fluid on Dec. 11, and there remained a chance discussions could fall apart, some of the people said, the report related. LightSquared's main asset is spectrum -- the limited pockets of airwaves that telecommunications firms need to operate wireless networks, the report said. Centerbridge's interest in LightSquared underscores investors' growing interest in betting on spectrum in the hopes that demand for high-speed cellphone and mobile Internet service will make ownership of these airwaves increasingly valuable. Dish, the satellite-television provider controlled by Charlie Ergen, earlier this year bid $2.2 billion for LightSquared, the report further related. Dish has been on the hunt for more spectrum in its efforts to enter the wireless industry to diversify as the television business matures. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. MADHAV INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Madhav Investments Corp. 2655 N. Cobb Pkwy. Kennesaw, GA 30152 Case No.: 13-76717 Chapter 11 Petition Date: December 10, 2013 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: John A. Moore, Esq. THE MOORE LAW GROUP, LLC 1745 Martin Luther King Jr. Dr. Atlanta, GA 30314 Tel: 678-288-5600 Fax: 888-553-0071 Email: jmoore@moorelawllc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Rajane C. Patel, secretary. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. MANTARA INC: Deutsche Bank Buys Assets for $1.25 Million -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Mantara Inc., a developer of trading and compliance software for the financial-services industry, finally won court approval for selling the intellectual property assets to Deutsche Bank Securities Inc. for $1.25 million. According to the report, the company filed a petition for Chapter 11 protection on Oct. 16 and was initially rebuffed by the bankruptcy judge in New York in asking for an immediate sale of the property. After further proceedings, the bankruptcy judge signed an order on Dec. 6 approving sale. New York-based Mantara, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 16, 2013 (Case No. 13-13370, Bankr. S.D.N.Y.). The case is before Judge Allan L. Gropper. The Debtor is represented by Wojciech F Jung, Esq., at Lowenstein Sandler LLP, in New York; and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, in Roseland, New Jersey. Mantara listed assets of $12.9 million and debt totaling $8.4 million. Liabilities include $1.2 million owing to a secured lender. MAXCOM TELECOM: Capital Increase Will Be 2.23-Bil. Pesos -------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V. (NYSE: MXT, BMV: MAXCOM.CPO) announced Wednesday that in connection with the capital increase approved by the Shareholders Meeting dated Oct. 2, 2013, after the expiration date of the preemptive rights granted to the shareholders, the Chairman of the Board of Directors, pursuant to the resolutions approved by the Shareholders Meeting, offered for subscription and payment 633,214,267 of the remaining unsubscribed Series "A", Class II shares, at the same price offer to the shareholders of $0.96666667 pesos per share. The capital contribution in connection with this subscription was $612,107,127.32 pesos. Additionally, the Chairman of the Board assigned 53,958,620 Series "A", Class II, shares at the same price per share, equivalent to $52,160,000.00 pesos, which will be subscribed and paid during December 2013. Considering this last capital contribution, the capital increase will be of $2,229,977,858.74 pesos represented by 2,306,873,638 Series "A", Class II shares, being this 74.4% of the capital increase approved by the Shareholders Meeting. Maxcom informs that with the subscription and payment of the Series "A", Class II shares mentioned above, the capital increase of the Company has been finalized; therefore, the remaining Series "A", Class II shares will be kept in the treasury of the Company. About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. The Company has engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y Rios, S.C., as its financial advisor and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and potential Chapter 11 case. The Ad Hoc Group has retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. In September 2013, the U.S. bankruptcy court entered an order confirming the Company's prepackaged Chapter 11 plan of reorganization. Confirmation of the Plan was fully-consensual: the only class of creditors entitled to vote overwhelmingly voted in favor of the Plan and no party objected to confirmation of the Plan. The Plan was declared effective in October 2013. MICHAELS STORES: Amends Q1 and Q2 Quarterly Reports --------------------------------------------------- Michaels Stores, Inc., amended its quarterly reports on Forms 10-Q for the quarter ended May 4, 2013, and Aug. 3, 2013, for the purpose of correcting historical share-based compensation expense caused by the Company's repurchase of shares that had not been held for at least six months following the exercise of stock options under its equity incentive plans. Since the participants held those shares for less than six months following exercise, liability accounting applies to the plan. The Company originally recognized expense ratably over the vesting period based on the grant date fair value of the option in accordance with the fixed method of accounting. The Company determined the accounting error was material to fiscal 2011 and fiscal 2012 financial statements and those financial statements required restatement. The adjustments resulted in a decline of net income by $1 million for the three months ended May 4, 2013, and $2 million for the three months ended April 28, 2012. Michaels Stores originally reported net income of $47 million for the quarter ended May 4, 2013, as compared with net income of $53 million on $978 million of net sales for the quarter ended April 28, 2012. The adjustments also resulted in a decline of net income by $3 million and $4 million for the three and six month periods ended Aug. 3, 2013, respectively, and by $4 million and $6 million for the three and six month periods ended July 28, 2012. Michaels Stores previously reported net income of $20 million for the quarter ended Aug. 3, 2013, as compared with net income of $13 million for the quarter ended July 28, 2012. The Company's restated balance sheet at Aug. 3, 2013, showed $1.64 billion in total assets, $3.87 billion in total liabilities and a $2.23 billion total stockholders' deficit. The Company originally reported $1.62 billion in total assets, $3.83 billion in total liabilities and a $2.21 billion total stockholders' deficit as of Aug. 3, 2013. Copies of the amended Quarterly Reports are available for free at: http://is.gd/nFByur http://is.gd/EktEtK About Michaels Stores Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. * * * Michaels Stores carries a 'B2' corporate family rating from Moody's Investors Service and 'B' corporate credit rating from Standard & Poor's Ratings Services. MJC AMERICA: Soleus Air System Files for Ch.11 in Los Angeles ------------------------------------------------------------- MJC America, Ltd., doing business as Soleus Air System, filed for bankruptcy protection under Chapter 11 (Bankr. C.D. Cal. Case No. 13-39097) in Los Angeles on Dec. 10, 2013. MJC disclosed $14.0 million in total assets and $15.9 million in liabilities in its schedules. Accounts receivable of $9.22 million and inventory of $4.12 million comprise most of the assets. East West Bank has a scheduled secured claim of $2.1 million on a line of credit, and Hong Kong Gree Electric Appliances Sales, Ltd., is owed $4.07 million, but only $288,000 is secured. MJC doesn't have any real property. It leases property at East Walnut Drive North, City of Industry, in California, from Prologis, L.P., which lease terminates April 30, 2018. According to the statement of financial affairs, income declined from $77 million in 2011, to $44.1 million in 2012, and $31 million in 2013 (year to date). The Debtor is involved in litigation against Hong Kong Gree in district court and state court. A copy of the schedules filed together with the petition is available for free at: http://bankrupt.com/misc/MJC_Petition_Schedules.pdf MJC America is represented by David A. Tilem, Esq., at Law Offices of David A. Tilem, in Glendale, California. MJC America -- http://www.soleusair.com/-- sells Soleus-branded air conditioners and heaters in the U.S. MJC AMERICA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: MJC America, Ltd. dba Soleus Air System dba Soleus International Inc. 20035 East Walnut Drive North City Of Industry, CA 91789 Case No.: 13-39097 Chapter 11 Petition Date: December 10, 2013 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Hon. Sandra R. Klein Debtor's Counsel: David A Tilem, Esq. LAW OFFICES OF DAVID A TILEM 206 N Jackson St Ste 201 Glendale, CA 91206 Tel: 818-507-6000 Fax: 818-507-6800 Email: davidtilem@tilemlaw.com Total Assets: $13.98 million Total Debts: $15.92 million The petition was signed by Simon Chu, authorized individual. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hong Kong Gree Ele. App. Sales Lawsuit $4,069,466 Unit 2612, 26 F, Miramar Tower 132 Nathan Road, Tsim Sha Tsui Kowloon, Hong Kong Qvc, Inc. $3,000,000 Studio Park, MC 209 West Chester, PA 19380 MJC Supply LLC $1,887,460 P.O. Box 1537 Walnut, CA 91788 MJC Supply LLC $1,880,000 P.O. Box 1537 Walnut, CA 91788 Ningbo Bole Electric Appliance Co., $1,344,239 South Section, Jiangbei Ind & Tech Zone Ningbo, China Gree Usa Sales, Ltd. Lawsuit $803,659 20035 E Walnut Drive North Walnut, CA 91789 Zhejiang Aoli Electric Appliance $321,984 Southeast Development Of Shengzhou Zhejiang, China, 312400 Soleus East $262,164 7260 Edington Drive Cincinnati, OH 45249 Shanghai Highly Group $44,913 Royalla Reps, Inc. $43,439 American Express $30,275 Sv International $26,293 Scanwell Logistics (LAX) Inc. $21,420 Capital Premium Financing $20,089 United Agencies Inc. $5,500 Reed Exhibitions (NHS) $4,900 Wesley J Ladner $3,787 Riefel Warehousing LLC $3,544 Estes Express Lines $3,156 Metlife Small Business Center $2,775 NEFF RENTAL: S&P Lowers Rating on $200MM Notes to 'CCC+' -------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Neff Rental LLC's $200 million 9.625% second-lien notes due 2016 to '6' from '4'. At the same time, S&P lowered the issue-level rating on the notes to 'CCC+' from 'B' and removed the rating from CreditWatch, where S&P placed it with negative implications on Oct. 16, 2013. The 'B' corporate credit rating and positive rating outlook on Neff were not affected by this rating action. "Our reassessment of the recovery rating stems from Neff's recent consent solicitation and subsequent amendment to its senior secured asset-based loan credit facility, which allows for an increase in the facility to accommodate a distribution to the owners. The company used the additional proceeds to pay a dividend of about $110 million to its sponsors. The additional first-lien loan proceeds reduces the expected recovery for the second-lien notes under our hypothetical default scenario to negligible (0%-10%) recovery. This results in an issue-level rating that is two notches below the corporate credit rating ". The 'B' corporate credit rating and positive rating outlook reflect S&P's view of the improvement in Neff's credit measures through September 2013. This stems from the good conditions in the equipment rental sector and S&P's view that although leverage will increase by almost 1x for the transaction, it will likely remain at less than 4x on an adjusted basis. RATINGS LIST Neff Rental LLC Corporate Credit Rating B/Positive/-- Downgrade Neff Rental LLC Neff Rental Finance Corp. (co-borrower) To From Senior Secured CCC+ B/Watch Neg Recovery rating 6 4 NIRVANIX INC: Wins Access to Cash Collateral Until Jan. 11 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the first amendment to the final order (i) authorizing Nirvanix, Inc., to obtain secured postpetition superpriority financing from its prepetition lenders -- TriplePoint Capital LLC, in its capacity as lender under various loan facilities and in its capacity as collateral agent for Khosla Ventures IV, LP and Khosla Ventures IV (CF), LP -- and (ii) authorizing the use of cash collateral. The amendment provides that: 1. the outside date will be amended to Jan. 11, 2014; 2. the approved budget will, for the period from Dec. 1, 2013, to Jan. 11, 2014, be replaced with the approved budget; and 3. the terms and conditions of the final DIP order will remain in full force and effect. AS reported in the Troubled Company Reporter on Nov. 14, 2013, the Bankruptcy Court, in a final order, authorized the Debtors to (i) obtain postpetition secured financing from its prepetition lenders; and (ii) use cash collateral until Nov. 30, 2013. As reported in the TCR on Oct. 15, 2013, the DIP Facility consists of a postpetition multi-draw term loan facility in an aggregate amount, before giving effect to a "roll up, in an interim amount up to $1.1 million and thereafter in an amount to be agreed upon by the Khosla Ventures IV, LP, Khosla Ventures IV (CF), LP, and TriplePoint Capital, LLC, as DIP Lenders, in their sole discretion. The initial maximum commitment for each of the DIP Lenders will be $900,000 for KV and $200,000 for TriplePoint. The DIP Lenders, according to court documents, have not agreed to any funding beyond the week ending Oct. 26, 2013, or to any funding in excess of $1.1 million. The DIP Loans will accrue at 9% per annum, with the interest payable monthly in arrears on the monthly anniversary of the Petition Date, computed based on a 360 day year. At all times while a default exists, principal, interest and other amount will bear interest at a rate per annum equal to 2% in excess of the 9% per annum interest rate. To secure the DIP Loan Obligations, the DIP Lenders are granted valid and perfected first priority liens and security interests, subject only to permitted liens and the carve out. The DIP Lenders will also be granted superpriority administrative expense claim for all DIP Loan Obligations. Carve-out means (i) fees payable to the U.S. Trustee, (ii) unpaid professional fees and expenses payable to each professional retained by the Debtor and any official committee of unsecured creditors, and (iii) case administration fees and professional fees incurred on or after the date of the occurrence of a termination date in an aggregate amount not to exceed $25,000. About Nirvanix, Inc. Cloud storage company Nirvanix, Inc., based in San Diego, California, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.Del. Case No. 13-12595) on Oct. 1, 2013. 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. NIRVANIX INC: Wants Settlement Between Panel and Lenders Approved ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing today, Dec. 12, 2013, at 9:30 a.m., to consider Nirvanix, Inc., and the Official Committee of Unsecured Creditors' motion to approve a settlement agreement between the Committee and the Debtor's prepetition lenders. The settlement agreement is in relation to the sale of the Debtors' assets and resolves pending disputes among the Committee and TriplePoint Capital LLC, Khosla Ventures IV, LP and Khosla Ventures IV (CF), LP. Prior to the sale hearing, the lenders and the Committee discussed a resolution of the issues relating to the Lot 1 sale and ultimately reached a settlement. The principal terms of the settlement term sheet are: i. The Committee will withdraw its objection to the sale motion and affirmatively support entry of the Lot 1 sale order. ii. The lenders agree to carve out from the first tranche of sale proceeds $100,000 for the benefit of general unsecured creditors. The Carve Out Funds will be transferred to a General Unsecured Creditors Trust. iii. The lenders agree to carve out from holdback/purchase price adjustment $100,000 for the benefit of general unsecured creditors, provided, however, that if there is a purchase price adjustment, the Backend Carve Out will be reduced pro rata. The Backend Carve Out Funds will be transferred to a GUC Trust. iv. Khosla Ventures will agree to subordinate/turnover all of its distributions from the GUC Trust on account of the lenders' deficiency claims to trade creditors. TriplePoint Capital, LLC agrees to subordinate/turnover the distributions on account of its deficiency claims under the (a) Growth Capital and A/R Loan Agreement, (b) the Equipment Loan Agreement, and (c) any amounts over $200,000 under the Equipment Lease Agreement and Equipment Lease Facility. The TPC Claim will be deemed allowed. v. The lenders will release their liens against the avoidance actions for the benefit of the GUC Trust and will agree to subordinate/turnover their distributions on the avoidance actions to trade creditors. About Nirvanix, Inc. Cloud storage company Nirvanix, Inc., based in San Diego, California, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.Del. Case No. 13-12595) on Oct. 1, 2013. 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. NNN 3500: Jan. 22 Hearing on Adequacy of Disclosure Statement ------------------------------------------------------------- The Bankruptcy Court will convene a hearing on Jan. 22, 2014, at 2:00 p.m., to consider adequacy of the Disclosure Statement explaining NNN 3500 Maple 26, LLC, et al.'s Joint Plan of Reorganization dated Nov. 7, 2013. Objections, if any, are due Dec. 16, 2013. At the hearing, the Court will also consider the Debtors' request to employ BMC Group, Inc., as its tabulation agent. As reported in the Troubled Company Reporter on Dec. 3, 2013, on behalf of the Debtors, Michelle V. Larson, Esq., at Andrews Kurth LLP, submitted to the Court a Disclosure Statement and Plan, which proposes to pay in full all creditors. The Reorganized Debtors will assume the liability for and obligation to perform and make all distributions or payments on account of all Allowed Claims. Payments to be made under the Plan will be funded from (1) the net operational profits (positive cash flow) generated by the property, after allowance of operational expenses and reserves, (2) the cash infusion from an investor, and (3) to the extent necessary, other sources of funds, including a cash infusion from the Debtors or the non-Debtor TICs -- tenants in common -- or future borrowings. The cash infusion will be used to fund, inter alia, payment of Allowed Administrative Expenses and Allowed Claims, the completion of a to-be-finalized capital improvement plan for the property, tenant improvement costs and leasing commissions with respect to the Property, and operating shortfalls as needed. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/NNN_3500_ds.pdf About NNN 3500 Maple 26, LLC NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presided over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. On Jan. 23, 2013, the Bankruptcy Court entered an order transferring venue of the bankruptcy case to the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 13-30402). Judge Harlin DeWayne Hale presides over the case. Darvy M. Cohan, Esq., with offices at La Jolla, Calif., and Michelle V. Larson, Esq., at Andrews Kurth LLP, in Dallas, represent the Debtor as counsel. NORTEL NETWORKS: Delaware Court Tosses SNMP Suit Against Radware ---------------------------------------------------------------- Bankruptcy Judge Kevin Gross dismissed Radware Ltd.'s from the adversary proceeding filed by SNMP Research International, Inc. and SNMP Research, Inc. SNMP sued Radware and others to recover its damages relating to post-petition sales by Nortel Networks Inc. of all of the Debtors' assets. Radware bought Nortel's "Layer 4-7 Application Delivery Business Assets". SNMP filed the Complaint on Nov. 2, 2011, against Nortel, Radware and others. SNMP is seeking damages and other relief from defendants for copyright infringement, misappropriation of trade secrets, unjust enrichment and conversion. According to Judge Gross, SNMP's claims against Radware rest upon conclusion and speculation that fail to satisfy legal standards to survive a motion to dismiss. SNMP speculates and leaps to the conclusion that because Radware purchased assets from Nortel, and because Nortel licensed software from SNMP, that Radware copied, transferred, distributed and profited from the SNMP software. Judge Gross, however, granted SNMP leave to file an Amended Complaint by a date certain. The case is, SNMP Research International, Inc. and SNMP Research, Inc., Plaintiffs, v. Nortel Networks Inc., et al., Nortel Networks Corporation, Nortel Networks Limited, Nortel Networks Global Corporation, Nortel Networks International Corporation, Nortel Networks Technology Corporation, Genband US LLC, Genband, Inc., Performance Technologies, Inc., Perftech (PTI) Canada, Avaya Inc., Radware Ltd., and John Doe Defendants 1-00 Defendants, Adv. Proc. No. 11-53454(KG) (Bankr. D. Del.). A copy of the Court's Dec. 10, 2013, is available at http://is.gd/xFZY4Hfrom Leagle.com. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. Judge Gross and the court in Canada scheduled trials in 2014 on how to divide proceeds among creditors in the U.S., Canada, and Europe. NORTH TEXAS BANCSHARES: Texas Bank Owner Wins Bankruptcy Auction ---------------------------------------------------------------- Katy Stech, writing for DBR Small Cap, reported that with a roughly $11.4 million offer, the holding company behind InterBank community bank in Texas and Oklahoma won a bankruptcy auction for the four struggling branches of Park Cities Bank in the Dallas area. According to the report, Park Cities Bank 's parent company said the auction for the bank's operations ended Monday night with the winning bid from a group called Olney Bancshares of Texas Inc., according to papers filed in U.S. Bankruptcy Court in Wilmington, Del. That buyer is identified as the holding company for InterBank, which says it has more than 30 branches and more than $2 billion in assets, according to InterBank's website. North Texas Bancshares of Delaware, Inc. (Case No. 13-12699) and North Texas Bancshares, Inc. (Case No. 13-12700) sought protection under Chapter 11 of the Bankruptcy Code on Oct. 16, 2013, before the United States Bankruptcy Court for the District of Delaware. The jointly administered cases are before Judge Kevin Gross. The Debtors' are represented by Tobey M. Daluz, Esq., Leslie C. Heilman, Esq., and Matthew Summers, Esq., at Ballard Spahr LLP, in Wilmington, Delaware. The Debtors' special counsel is Bracewell & Giuliani LLP. Commerce Street Capital, LLC, serves as the Debtors' financial advisors. NXT ENERGY: Has C$2.52-Mil. Net Loss for Q3 Ended Sept. 30 ---------------------------------------------------------- NXT Energy Solutions Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K, reporting a net loss of C$2.52 million for the three months ended Sept. 30, 2013, compared to a net loss of C$1.39 million for the same period last year. The Company's balance sheet at Sept. 30, 2013, showed C$3.89 million in total assets, C$2.06 million in total liabilities, and stockholders' equity of C$1.82 million. The Company said, "There is substantial doubt about the appropriateness of the use of the going concern assumption, primarily due to current uncertainty about the timing and magnitude of future SFD survey revenues. NXT recognizes that it has limited ability to support operations significantly beyond 2013 without generating sufficient new revenue sources or securing additional financing if required." A copy of the Form 6-K is available at: http://is.gd/NHCkpG NXT Energy Solutions Inc. (TSX-V: SFD; OTC: NSFDF) is a Calgary based company that provides a unique aerial survey service to the oil and natural gas exploration industry. NXT's proprietary Stress Field Detection ("SFD(R)") survey technology is based on detecting subtle changes in earth's gravitational field from an airborne platform. OHANA GROUP: Has Until Jan. 16 to Solicit Plan Votes ---------------------------------------------------- The Bankruptcy Court extended Ohana Group LLC's exclusive period to solicit acceptances for the plan of reorganization until Jan. 16, 2014. Lender Wells Fargo, N.A., as trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Pass-Through Certificates, Series 2007-C5 has submitted an objection. The Debtor, in a separate filing, has withdrawn the received unsigned order further extending exclusivity period, and provided notice of its intent to submit a revised received unsigned order further extending exclusivity period. Ohana Group filed Court on Nov. 1, 2013, a First Amended Disclosure Statement with respect to the Debtor's proposed plan of reorganization. Under the proposed Plan, the Debtor will continue to operate the Project in the ordinary course of business. Funding for payments to creditors under the Plan will come from Cash on hand as of the Effective Date, and operating revenues. The Debtor or its designee will act as disbursing agent for payments and distributions due under the Plan. About Ohana Group LLC Ohana Group, LLC, is a Washington limited liability company formed in 2006 for the purpose of managing and operating a mixed-used real property development located at 3601 Fremont Avenue N. in Seattle, Washington. The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Wash. Case No. 12-21904) on Nov. 30, 2012. The Debtor's members are Patricia Cawdrey and Daniel Cawdrey, Jr. Judge Marc Barreca oversees the case. James I. Day, Esq., at Bush Strout & Kornfeld LLP, in Seattle, serves as bankruptcy counsel. The Law Offices of Brian H. Krikorian represents the Debtor as special counsel in connection with the litigation against one of the Debtor's former tenants. In its petition, the Debtor scheduled $16,000,000 in assets and $11,696,131 in liabilities. Ohana Group, LLC, filed with the Court on Nov. 1, 2013, a First Amended Disclosure Statement with respect to the Debtor's proposed plan of reorganization. Under the proposed Plan, the Debtor will continue to operate the Project in the ordinary course of business. Funding for payments to creditors under the Plan will come from Cash on hand as of the Effective Date, and operating revenues. The Debtor or its designee will act as disbursing agent for payments and distributions due under the Plan. OMNITRACS INC: S&P Assigns 'B' CCR & Rates $445MM Loan 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B' corporate credit rating to San Diego, Calif.-based Omnitracs Inc. The outlook is stable. S&P also assigned its 'B+' issue-level rating and '2' recovery rating to the company's proposed $445 million first-lien term loan maturing 2020. The '2' recovery rating indicates S&P's expectations for substantial (70%-90%) recovery in the event of payment default. S&P also assigned its 'CCC+' issue-level rating and '6' recovery rating to the proposed $150 million second-lien term loan maturing 2021. The '6' recovery rating indicates S&P's expectations for negligible (0%-10%) recovery in the event of payment default. "The ratings on Omnitracs reflect the company's 'weak' business risk profile and 'highly leveraged' financial risk profile (as defined by our criteria), incorporating the company's narrow product base and lack of stand-alone operating history, the potential for near-term operational disruption from integrating RoadNet with the existing business, and our view that the company's purchase by a private equity owner is likely to preclude sustained deleveraging over the longer term," said Standard & Poor's credit analyst Molly Toll-Reed. S&P views the industry risk as "moderately high" and the country risk as "very low". S&P views Omnitracs' EBITDA margins, return on capital, and volatility of profitability as average for the technology hardware sector. The outlook is stable, reflecting S&P's expectation that completion of the technology transition in Omnitracs' customer base will generate EBITDA growth, and modest FOCF beyond this fiscal year. A decline in customer renewals or lack of new subscriptions to Omnitracs' software offerings, resulting in sustained EBITDA declines, could lead to leverage in the high 7x area and a downgrade. Ratings upside is limited by Omnitracs' highly leveraged financial profile, and our view that the company's ownership structure is likely to preclude sustained deleveraging. ORMET CORP: Libertas, Int'l Metal Submit Offers for Assets ---------------------------------------------------------- BankruptcyData reported that Libertas Copper and International Metal Corporation filed with the U.S. Bankruptcy Court a notice of competing offers to purchase certain assets of Ormet, including those that are the subject of the proposed sale of assets pursuant to the Company's excess asset sale procedures. The assets proposed to be purchased by Libertas Copper consist of 1120.37 MT of new and used copper rods. The consideration to be paid by for the sale is COMEX CU March settlement price minus 15 cents per pound for the day the truck is loaded. The assets to be purchased by IMC consist of 430 MT +/- 50 MT) of new and used copper rods. The consideration for the sale is the Comex CU March settlement price minus 15.5 cents per pound for the day the truck is loaded. 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. OVERSEAS SHIPHOLDING: Creditors Move to Curb Exclusivity Extension ------------------------------------------------------------------ Law360 reported that unsecured creditors of Overseas Shipholding Group Inc. urged a Delaware bankruptcy judge to limit a proposed extension of the Chapter 11 exclusivity period to no more than two months, saying they intend to file their own plan if the oil tanker giant hasn't submitted one by then. According to the report, OSG is seeking to extend the period during which it is the only entity allowed to submit a Chapter 11 plan, a move the official committee of unsecured creditors contends would push the filing deadline back to mid-March. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. PATRIOT COAL: Copy of Presentation to Potential Lenders ------------------------------------------------------- In a regulatory filing, Patriot Coal Corporation disclosed that in mid-November was slated to provide a presentation to potential lenders in New York City. The materials presented to potential lenders are available at http://is.gd/ADb1jk 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. PETAQUILLA MINERALS: Incurs $2.14-Mil. Net Loss in Third Quarter ---------------------------------------------------------------- Petaquilla Mineral Ltd. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K, reporting a net loss of $2.14 million on $20.63 million of revenues for the three months ended Sept. 30, 2013, compared to a net income of $3.72 million on $26.45 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2013, showed $230.75 million in total assets, $177.98 million in total liabilities, and stockholders' equity of $52.76 million. A copy of the Form 6-K is available at: http://is.gd/vUF7nd Headquartered in Vancouver, British Columbia, Petaquilla Mineral Ltd. is a gold production and exploration company with one operating mine in Panama and several exploration properties in Panama, Spain and Portugal. PLUG POWER: In Talks With Large Customers on GenDrive ----------------------------------------------------- Plug Power Inc. hosted on Dec. 4, 2013, a conference call and webcast during which CEO Andy Marsh provided a business update for Plug Power and the Company's expectations for the remainder of 2013 and for 2014. Since the October 8th business updates call, the Company has seen an additional 17.8M USD in bookings. Plug Power is currently in negotiations with large customers on sales agreements to deploy turn-key GenDrive solutions at multiple distribution centers. The Company believes this will significantly impact the fourth quarter bookings, as well as provide a recurring revenue stream from product, service and hydrogen contracts. Plug Power expects orders to range between 30M and 40M USD for the fourth quarter of 2013. Mr. Marsh will outline the structure of a typical multi-site deal using Plug Power's turn-key hydrogen solution. Plug Power feels volume in sales orders, paired with management of costs will result in profitability for Plug Power in 2014. As previously stated, Plug Power needs to ship 3,000 units in 2014 to achieve its EBITDAS break even goal. "Large, multi-site deals will provide a level of validation to customers, suppliers, employees and the investment community," said Andy Marsh. "As we continue to book more orders during the month of December, Plug Power is on track for a 'blowout' quarter." A copy of the Presentation is available for free at: http://is.gd/uN2GUc About Plug Power Plug Power Inc. is a provider of alternative energy technology focused on the design, development, commercialization and manufacture of fuel cell systems for the industrial off-road (forklift or material handling) market. KPMG LLP, in Albany, New York, expressed substantial doubt about Plug Power's ability to continue as a going concern, following their audit of the Company's financial statements for the year ended Dec. 31, 2012, citing the Company's recurring losses from operations and substantial decline in working capital. As of Sept. 30, 2013, the Company had $40.03 million in total assets, $35.36 million in total liabilities, $2.45 million in series C redeemable convertible preferred stock, and $2.21 million in total stockholders' equity. Bankruptcy Warning "Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses, growth in inventory to support both shipments of new units and servicing the installed base, and continued development and expansion of our products. Our ability to meet our future liquidity needs, capital requirements, and to achieve profitability will depend upon numerous factors, including the timing and quantity of product orders and shipments; the timing and amount of our operating expenses; the timing and costs of working capital needs; the timing and costs of building a sales base; the timing and costs of developing marketing and distribution channels; the timing and costs of product service requirements; the timing and costs of hiring and training product staff; the extent to which our products gain market acceptance; the timing and costs of product development and introductions; the extent of our ongoing and any new research and development programs; and changes in our strategy or our planned activities. If we are unable to fund our operations without additional external financing and therefore cannot sustain future operations, we may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection," the Company said in its quarterly report for the period ended Sept. 30, 2013. POLYMER GROUP: S&P Assigns 'B' Rating to Proposed $295MM Sr. Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its senior secured debt rating of 'B' (the same as the corporate credit rating) and recovery rating of '3' to Polymer Group's proposed $295 million senior secured term loan. The ratings are based on preliminary terms and conditions. The maturity of the term loan will be six years, or earlier under certain circumstances. The '3' recovery rating indicates S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. At the same time, S&P is affirming its 'B' corporate credit and existing senior secured debt ratings on Polymer Group and are revising its recovery rating on its existing senior secured debt to '3' from '4'. The outlook remains negative. "We regard Polymer Group's business profile as 'weak' and its financial risk profile as 'highly leveraged' as defined in our criteria," said Standard & Poor's credit analyst Cynthia Werneth. Owned by an affiliate of the private equity firm the Blackstone Group, Polymer Group is a manufacturer of nonwovens with operations on several continents. The November 2013 acquisition of U.K.-based Fiberweb will increase Polymer Group's revenues by more than 35%. The transaction modestly improves Polymer Group's business risk profile by broadening its product offering into niche applications such as pool filtration and dryer sheets and increasing its position within housewrap. The transaction should reduce Polymer Group's reliance on hygiene markets, which have become increasingly commoditized and in which pricing power has eroded in some regions and product categories. It should also offer opportunities for EBITDA margin improvement through synergies, which management expects to be significant relative to the overall EBITDA of the acquired business. Nevertheless, industry overcapacity and volatile raw material costs are likely to pose continuing challenges. The negative outlook indicates S&P's view that there is a one-in- three chance that it could lower the ratings over the next year. S&P would lower the ratings if Polymer Group has difficulty integrating the large Fiberweb acquisition or fails to achieve the targeted synergies, and this results in debt to pro forma full- year EBITDA that exceeds 6x. S&P would also lower the ratings if leverage is above 6x because of other operating problems, an inability to pass on raw material cost increases, higher-than- expected capital spending, or another acquisition in the near term. Less-than-adequate liquidity would also result in a downgrade. Upward rating movement is constrained by challenges associated with integrating the large Fiberweb acquisition, as well as financial policies associated with Polymer Group's ownership by a private equity firm. S&P therefore regards an upgrade during the next year as very unlikely. S&P could revise the outlook to stable if integration of the acquired operations goes smoothly, market and operating trends are favorable, the company is on track to achieve and maintain leverage below 6x, and liquidity remains adequate. QEP RESOURCES: S&P Revises Outlook to Negative & Affirms 'BB+' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its rating outlook on Denver-based QEP Energy Inc. to negative from stable and affirmed all of its ratings, including the 'BB+' corporate credit rating. The rating action reflects the expected deterioration in QEP's credit protection measures due to the use of debt to fund the company's planned $950 million acquisition of Permian oil and gas producing assets and due to uncertainty over the pace and level of debt reduction thereafter. The acquisition increases QEP's light oil production, which S&P expects to result in improved profitability. The transaction also provides growth potential through relatively low risk drilling with modest spending beyond internally generated cash flow under S&P's assumptions. S&P projects debt leverage, however, to deteriorate to about 2.3x debt to EBITDA at the end of 2013 pro forma for the transaction, which S&P views as weak for the current rating. S&P expects the company to fund a portion of the purchase price with borrowings under its bank facility. The funding method offers the opportunity to repay it quickly, but repayment depends on timely sale of Midcontinent, primarily natural gas assets, the market for which S&P views as soft. S&P notes that the company's liquidity will decline meaningfully as a result of bank facility utilization to fund the transaction If QEP's asset sales or production growth falls short of expectations, we forecast that leverage will remain at more than 2x debt to EBITDA in 2014. "We think QEP's credit protection measures will be weak for the ratings over the next 12 months because of debt incurred to fund the acquisition of Permian properties," said Standard & Poor's credit analyst Ben Tsocanos. S&P would consider a downgrade if it expects the company's debt leverage to remain at more than 2x debt to EBITDA. This could occur if QEP fails to execute its asset sales plan over the next year. S&P would also consider a downgrade if the company's liquidity deteriorates. S&P could consider a stabilization of the positive rating action if QEP succeeds in reducing debt in a timely manner. For an upgrade, the company will need to expand its reserves and production in line with its 'BBB' category peers and increase its proportion of liquids without a significant deterioration in its operating costs or capital structure. QUEEN ELIZABETH REALTY: Survives Case Dismissal Bid --------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York denied motions filed by Margaret Wu, and Dean K. Fong, as receiver for the property of Phillip Wu, to (i) dismiss the Chapter 11 case of Queen Elizabeth Realty Corp.; or (ii) in the alternative, abstain pursuant to Section 305 of the Bankruptcy Code; or (iii) excuse receiver's compliance with Section 543 of the Bankruptcy Code from turnover of property. The Debtor and Shanghai Commercial Bank filed objections to the request. Pursuant to the Court's order, the receiver will continue to refrain from, among other things: 1. the sale, lease, use, encumbrance or other administration of any property of the Debtor, including but not limited to: a) rental proceeds from the Debtor's property; and b) the Debtor's real estate; 2. prosecution of the special proceeding known as Dean K. Fong as receiver of the Property Of Phillip Wu, Plaintiff, v. Hong Kong Supermarket, Inc., et. al., and seek the eviction of tenant Hong Kong Supermarket, Inc. or any other tenant of the Debtor; and 3. the collection of his money judgment against HKS in the amount of $3,256,000 arising in the L & T Proceeding or otherwise; The Court also ordered Margaret Wu to cease and desist from seeking, outside of the Court, the sale, use, lease or encumbrance of any assets of the Debtor, and will not, with respect to property of the Debtor or the estate, further prosecute the order to show cause entered in the divorce action encaptioned Margaret Wu v. Phillip Wu, Supreme Court, New York County, Index Number 300080/09 on July 11, 2013, and originally returnable,Aug. 6, 2013, or otherwise. The Court further ordered that any proceeding in the Divorce Action, the L & T Proceeding or otherwise that affects or impacts upon the property of the Debtor is subject to the automatic stay. As reported in the TCR on Nov. 11, 2013, the receiver, in his dismissal motion, related: 1. The case is a classic example of a chapter 11 filed in bad faith for the improper purpose of halting an ongoing state court action. 2. The essential controversy here is a two party dispute between Margaret Wu, on the one hand, and her husband Phillip Wu, on the other hand, over what she is entitled to in the divorce action, and Jeffrey Wu's effort to use the Court to help the Debtor avoid paying rent to the Receiver -- and ultimately to Margaret Wu. According to the Receiver, the case was filed shortly after the Receiver obtained a judgment in the eviction proceeding filed by the receiver against a company that Jeffrey Wu owned and/or Controlled, based on that company's failure to make rental payments to the receiver. About Queen Elizabeth Realty Corp. Queen Elizabeth Realty Corp. filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-12335) on July 17, 2013. Jeffrey Wu signed the petition as president. Judge Stuart M. Bernstein presides over the case. Jonathan S. Pasternak, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, serves as the Debtor's counsel. The Debtor disclosed $20 million of total assets and $12 million of total liabilities in its Schedules. The petition was signed by Jeffrey Wu, president of QERC and owner of 1/3 of the Debtor's shares. Jeffrey Wu and Lewis Wu (brothers of Phillip Wu, brothers-in-law of Margaret Wu, each own 1/3 of the shares of the Debtor. RACHEL E. SITACA: 2010 Honda Civic to Be Auctioned Off Dec. 31 -------------------------------------------------------------- David R. Maltz & Co., Inc., as auctioneers, will sell at public auction on Dec. 31, 2013, at 10:30 a.m. at 39 Windsor Place, Central Islip, New York, a 2010 Honda Civic, Serial #2HGFG1B86AH503156 in re: Rachel E. Sitaca, Case No. 13-12767-ALG (Bankr. S.D.N.Y.). Interested parties must submit 25% deposit in Cash or Bank Check in order to bid. The balance is due in 24 hours. Bidders may inspect the property 9 a.m., morning of sale. Additional information is available on the Auctioneer's website http://www.MaltzAuctions.comor call 516-349-7022. Albert Togut, Esq., at Togut Segal & Segal, LLP, serves as Chapter 7 trustee for Rachel E. Sitaca. He is represented by: Neil Berger, Esq. TOGUT SEGAL & SEGAL, LLP, One Penn Plaza, Suite 3335, New York, NY 10119 Tel: (212) 594-5000 ROBERTS LAND: Plan Confirmation Hearing Rescheduled for Feb. 5 -------------------------------------------------------------- The Bankruptcy Court rescheduled until Feb. 5, 2014, at 9:30 a.m. the final evidentiary hearing on confirmation of Roberts Land & Timber Corporation and Union Land and Timber Corp.'s Chapter 11 Plan. As reported in the Troubled Company Reporter on Sept. 4, 2013, the final evidentiary hearing on confirmation was scheduled for Dec. 5, 2013. The TCR on Oct. 11, 2013, reported that the Debtor, through its Restated Joint Plan of Reorganization filed Aug. 23, 2013, said it seeks to restructure the debt owed to its respective creditors including Farm Credit. The Plan amends and restates all previous plans (as modified from time to time) in their entireties that have been filed by the Debtors. With respect to the Secured Claim of Farm Credit of Florida, ACA, as successor by merger to Farm Credit of North Florida, ACA, in the amount of approximately $13 million, the Plan provides that, at the sole and exclusive option of the Debtors, the Debtors will inform the Court of their determination to elect to treat Farm Credit's Allowed Class 4 Claim under Plan Treatment 1, Plan Treatment 2 or Plan Treatment 3. About Roberts Land Roberts Land & Timber Investment Corp. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-03851) in Jacksonville, Florida, on May 25, 2011. Affiliate Union Land & Timber Corp. also sought Chapter 11 protection (Case No. 11-03853). Anthony W. Chauncey, Esq., at The Decker Law Firm, P.A., in Live Oak, Florida; and James H. Post, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, serve as counsel for the Chapter 11 Debtors. The Debtors are real estate holding and development companies as well as holder of private mortgages. The Debtors receive income from the sale and development of real estate, management of real estate developments, mortgage receivables, cattle grazing leases and hunting leases. In its schedules, Roberts Land disclosed assets of $26.7 million with debt totaling $12.2 million, all secured. The principal properties are 1,500 acres in Baker County, Florida and 3,300 acres in Union County, Florida. In its schedules, Union Land disclosed $2,376,170 in assets and $11,945,819 in liabilities as of the petition date. The Debtors filed with the U.S. Bankruptcy Court for the Middle District of Florida on Aug. 23, 2013, an Amended and Restated Joint Chapter 11 Plan of Reorganization. The Plan amends and restates all previous plans (as modified from time to time) in their entireties that have been filed by the Debtors in this Bankruptcy Case. ROSETTA GENOMICS: New York State OKs Rosetta Kidney Cancer Test --------------------------------------------------------------- Rosetta Genomics Ltd. announced that the New York State Department of Health has given the Company conditional approval for the Rosetta Kidney Cancer TestTM for testing on patient samples from the State. New York is the only U.S. state that requires an independent regulatory review process for laboratory-developed tests. With this approval, Rosetta Genomics can offer the Rosetta Kidney Cancer Test in all 50 U.S. states. In making the assay available pending final approval, the NYSDOH requires the Company to provide any additional information they request within 60 business days. The Kidney Cancer Test is the Company's proprietary microRNA-based assay that accurately classifies the four most common kidney tumors: clear cell renal cell carcinoma (RCC), papillary RCC, chromophobe RCC and the benign oncocytoma. It is one of four assays Rosetta is currently selling through its CLIA-lab in Philadelphia, Pennsylvania. Kidney cancer is one of the ten most common cancers in both men and women, accounting for over 65,000 new cases and approximately 14,000 deaths in the U.S. in 2013.1 "The incidence of primary kidney tumors is rising, and differential diagnosis between various types of kidney tumors remains challenging at times," said E. Robert Wassman, MD, FAAP, FACMG, Rosetta Genomics' chief medical officer. "One diagnostic challenge, often underestimated, is clearly differentiating between oncocytomas, now considered benign and appropriate to watch without intervention, and subtypes of RCC, particularly chromophobe RCC, where their malignant nature dictates prompt intervention. Recent studies have shown that as many as 20-25% of kidney tumors following nephrectomy turn out to be benign oncocytomas. Improved diagnoses of oncocytomas might avoid unnecessary surgeries, which would represent an opportunity to reduce costs and avoid nephrectomy related complications. In addition, new therapeutics are beginning to impact survival for patients with malignant RCCs and there appears to be emerging evidence that response is driven, in part, by the subtype of RCC. Consequently, the correct identification of these subtypes is becoming increasingly important to aid in treatment choice." "The Rosetta Kidney Cancer Test, with its high level of accuracy, can be an important aid to physicians to ensure that the right medical intervention is given to the right patient at the right time, which is what personalized medicine is all about," stated Kenneth A. Berlin, president and chief executive officer of Rosetta Genomics. "With sensitivity and specificity in excess of 95%, we believe this assay is a useful tool for physicians and we are very pleased to have approval to market this important cancer diagnostic for the benefit of patients in New York." "In order to increase awareness of and demand for the Kidney Cancer Test we have recently provided training to our sales team and will be launching key supporting marketing initiatives, including new promotional materials, web-based programs and telemarketing campaigns," added Mr. Berlin. About Rosetta Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. Rosetta Genomics disclosed a net loss of US$10.45 million on US$201,000 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of US$8.83 million on US$103,000 of revenue during the prior year. As of June 30, 2013, the Company had $30.28 million in total assets, $2.34 million in total liabilities and $27.93 million in total shareholders' equity. Bankruptcy Warning In its annual report for the year ended Dec. 31, 2012, the Company said: "We will require substantial additional funding and expect to augment our cash balance through financing transactions, including the issuance of debt or equity securities and further strategic collaborations. On December 7, 2012, we filed a shelf registration statement on Form F-3 with the SEC for the issuance of ordinary shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, with a total value of up to $75 million, from time to time at prices and on terms to be determined at the time of such offerings. The filing was declared effective on December 19, 2012. However there can be no assurance that we will be able to obtain adequate levels of additional funding on favorable terms, if at all. If adequate funds are not available, we may be required to: * delay, reduce the scope of or eliminate certain research and development programs; * obtain funds through arrangements with collaborators or others on terms unfavorable to us or that may require us to relinquish rights to certain technologies or products that we might otherwise seek to develop or commercialize independently; * monetizing certain of our assets; * pursue merger or acquisition strategies; or * seek protection under the bankruptcy laws of Israel and the United States." ROUNDY'S SUPERMARKETS: S&P Affirms 'B-' Corp. Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings on the Milwaukee-based Roundy's Supermarkets Inc. including its 'B-' corporate credit rating. The outlook is stable. S&P also assigned a 'CCC' issue-level rating and '6' recovery rating the company's proposed $200 million senior secured second-lien note offering. The '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery of principal in the event of default. S&P expects the company to use most of the proceeds to fund a prepayment of its first-lien term loan to help facilitate an amendment of that facility. Roundy's will use the remaining proceeds to fund the purchase of 11 Dominick's stores from Safeway Inc. and pay fees associated with the transaction. "We based our rating on our assessment of Roundy's financial risk profile as "highly leveraged". We based this view on forecasted credit ratios that include the increased debt to fund store acquisitions, the debt adjustment as a result of assumed operating leases, and our expectation that weak performance will likely continue over the next year," said credit analyst Charles Pinson- Rose. "Furthermore, the acquired stores will not likely contribute meaningful profits in 2014, which in part leads to credit ratios that are now weak for that financial risk assessment." The outlook is stable, incorporating S&P's expectation that profits will decline in 2014, credit metrics will weaken, but Roundy's will maintain adequate liquidity, as S&P expects Roundy's will comply with revised financial covenants and generate modest amounts of free cash flow. Downside Scenario The current outlook incorporates S&P's view that the company will complete the necessary financing for the transaction and maintain adequate covenant cushion as a result of reset levels in the range of 20% relative to expected profit levels. However, if the company fails to obtain such cushion, S&P may consider a lower rating and revise its liquidity assessment to "less than adequate". Furthermore, S&P may also consider a lower rating if the company's covenant cushion falls below 10%, which S&P thinks could occur if EBITDA is about $15 million lower than its 2014 forecast and this could happen with its sales assumptions and additional 60 bps of margin contraction. Upside Scenario Given likely performance trends over the near term, any positive rating action is not likely in S&P's view. S&P may consider a higher rating if leverage is near or below 6x, which could occur if EBITDA was approximately $50 million higher than what S&P forecasts for 2014. This is not likely in S&P's estimation given industry conditions and current performance trajectory. RURAL/METRO CORP: Pa. Dept. of Revenue Objects to Plan ------------------------------------------------------ BankruptcyData reported that the Commonwealth of Pennsylvania Department of Revenue filed with the U.S. Bankruptcy Court an objection to Rural/Metro's First Amended Joint Chapter 11 Plan of Reorganization. The objection explains, "The Plan purports to extinguish the setoff rights of the Commonwealth, violating 11 U.S.C. Section 362(b)(26) and 553(a). Section 362(b)(26) authorizes setoffs of prepetition income tax liabilities and prepetition income tax refunds. Section 553(a) allows 'a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case...against a claim of such creditor against the debtor that arose before the commencement of the case.' If the Debtors intend through the Plan to prevent a taxing authority to offset any prepetition tax liabilities against any tax refunds, the relief requested should be denied to that extent." About Rural/Metro Corp Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com-- is a national provider of 911- emergency and non-emergency interfacility ambulance services and private fire protection services, operating in 21 states and nearly 700 communities. Rural/Metro was acquired in 2011 in a leveraged buyout by Warburg Pincus LLC as part of a transaction valued at $676.5 million. Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11952) on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District of Delaware. Debt includes $318.5 million on a secured term loan and $109 million on a revolving credit with Credit Suisse AG serving as agent. There is $312.2 million owing on two issues of 10.125 percent senior unsecured notes. The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq., Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' local Delaware counsel. Alvarez & Marsal Healthcare Industry Group, LLC, and FTI Consulting, Inc., are the Debtors' financial advisors, while Lazard Freres & Co. L.L.C. is their investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims and noticing agent. The U.S. Trustee has appointed a three-member official committee of unsecured creditors in the Chapter 11 case. The Debtors have arranged $75 million of DIP financing from a group of prepetition lenders led by Credit Suisse AG. An interim order has allowed the Debtors to access $40 million of the DIP facility. The Debtors have filed a reorganization plan largely worked out before the Chapter 11 filing in early August. Existing shareholders receive nothing in the plan. The Company's debt includes $318.5 million on a secured term loan and $109 million on a revolving credit with Credit Suisse AG serving as agent. There is $312.2 million owing on two issues of 10.125 percent senior unsecured notes. SAVIENT PHARMACEUTICALS: Lenders Negotiate Deal w/ Unsecured Panel ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Savient Pharmaceuticals Inc. and senior secured Noteholders worked out a global settlement with the unsecured creditors' committee, which had been contending that the bankruptcy was "being run for the sole and exclusive benefit" of secured lenders. According to the report, Savient, developer of a treatment for gout, was facing objection from the committee to proposed terms for using cash. The committee claimed the terms included an "extravagant adequate protection package," even though the lenders were advancing no new credit. The settlement will allow the sale to proceed and the company's continued use of cash. The lenders will carve out $1.78 million in cash for unsecured creditors and the committee's professionals. Another $100,000 will be set aside for the indenture trustee for convertible noteholders. All proceeds from a lawsuit against a specific customer will go to unsecured creditors, Savient said in a statement. If the sale price at auction exceeds $60 million, the committee's constituents can receive as much as an additional $750,000. The lenders will waive deficiency claims so the recovery by unsecured creditors won't be diluted. The hearing for approval of a sale and the use of cash will take place Dec. 13. Absent a higher competing bid, an affiliate of US WorldMeds LLC will take the business for $55 million and $3 million in escrow. The purchase price will be reduced by adjustments and the cost to cure contracts that are behind in payment. About Savient Pharmaceuticals Headquartered in Bridgewater, New Jersey, Savient Pharmaceuticals, Inc. -- http://www.savient.com/-- is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA(R) (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy. Savient has exclusively licensed worldwide rights to the technology related to KRYSTEXXA and its uses from Duke University and Mountain View Pharmaceuticals, Inc. The Company and its affiliate, Savient Pharma Holdings, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-12680) on Oct. 14, 2013. The Debtors are represented by Kenneth S. Ziman, Esq., and David M. Turetsky, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York; and Anthony W. Clark, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware. Cole, Schotz, Meisel, Forman & Leonard P.A., also serves as the Company's conflicts counsel, and Lazard Freres & Co. LLC serves as its financial advisor. U.S. Bank National Association, as Indenture Trustee and Collateral Agent, is represented by Clark T. Whitmore, Esq., at Maslon Edelman Borman & Brand, LLP, in Minneapolis, Minnesota. The Unofficial Committee of Senior Secured Noteholders is represented by Andrew N. Rosenberg, Esq., Elizabeth McColm, Esq., and Jacob A. Adlerstein, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York; and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware. SAVIENT PHARMACEUTICALS: Agrees to Sell Itself to Crealta --------------------------------------------------------- Ben Fox Rubin, writing for The Wall Street Journal, reported that biopharmaceutical firm Savient Pharmaceuticals Inc. agreed to sell itself to Crealta Pharmaceuticals LLC for $120.4 million, following a bankruptcy-court approved auction. According to the report, Savient and Crealta will seek court approval for the sale on Dec. 13. Crealta was established in August in partnership with GTCR, a Chicago-based private-equity firm. Savient in October started voluntary Chapter 11 bankruptcy proceedings in a federal court in Delaware, as the company looked to maximize the value of its chronic gout treatment through an auction and sale, the report said. Krystexxa treats a form of gout?a condition in which a chemical called uric acid isn't broken down by the body, which can cause joint swelling and difficulty moving, the report related. In a little more than a year's time, Savient has burned through $114.7 million in cash, bringing its supply down to $27.5 million, as it worked to commercialize Krystexxa, the report added. About Savient Pharmaceuticals Headquartered in Bridgewater, New Jersey, Savient Pharmaceuticals, Inc. -- http://www.savient.com/-- is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA(R) (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy. Savient has exclusively licensed worldwide rights to the technology related to KRYSTEXXA and its uses from Duke University and Mountain View Pharmaceuticals, Inc. The Company and its affiliate, Savient Pharma Holdings, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-12680) on Oct. 14, 2013. The Debtors are represented by Kenneth S. Ziman, Esq., and David M. Turetsky, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York; and Anthony W. Clark, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware. Cole, Schotz, Meisel, Forman & Leonard P.A., also serves as the Company's conflicts counsel, and Lazard Freres & Co. LLC serves as its financial advisor. U.S. Bank National Association, as Indenture Trustee and Collateral Agent, is represented by Clark T. Whitmore, Esq., at Maslon Edelman Borman & Brand, LLP, in Minneapolis, Minnesota. The Unofficial Committee of Senior Secured Noteholders is represented by Andrew N. Rosenberg, Esq., Elizabeth McColm, Esq., and Jacob A. Adlerstein, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York; and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware. SEARS HOLDINGS: Baker Street Held 10.8% Equity Stake at Nov. 27 --------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Baker Street Capital GP, LLC, and its affiliates disclosed that as of Nov. 27, 2013, they beneficially owned 11,504,500 shares of common stock of Sears Holdings Corporation representing 10.8 percent of the shares outstanding. The percentage is based upon 106,451,439 Shares outstanding, which is the total number of Shares outstanding as of Nov. 15, 2013, as reported in the Company's quarterly report on Form 10-Q filed with the SEC on Nov. 21, 2013. A copy of the regulatory filing is available for free at: http://is.gd/RBdvaJ About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- operates full- line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94 percent stake in Sears Canada and an 80.1 percent stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at Nov. 2, 2013, showed $20.20 billion in total assets, $17.88 billion in total liabilities and $2.32 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. As reported by the TCR on Dec. 7, 2012, Fitch Ratings has affirmed its long-term Issuer Default Ratings (IDR) on Sears Holdings Corporation (Holdings) and its various subsidiary entities (collectively, Sears) at 'CCC' citing that The magnitude of Sears' decline in profitability and lack of visibility to turn operations around remains a major concern. SELECT TREE: U.S. Trustee Adjourns Meeting of Creditors to Feb. 10 ------------------------------------------------------------------ U.S. Trustee Joseph W. Allen adjourned to Feb. 10, 2014, at 1:00 p.m., the meeting of creditors pursuant to 11 U.S.C. Sec. 341 in the Chapter 11 cases of Select Tree Farms, Inc. Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms scheduled $11,450,989 in assets and $5,959,983 in liabilities. The petition was signed by George A. Schichtel, president. The Debtor's owner, George A. Schichtel and Debra G. Schichtel, filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y. Case No. 12-10670). Ms. Schichtel suffered a stroke around October 2012 and became comatose and was intubated. She passed away Nov. 14, 2012. Judge Carl L. Bucki presides over the case. William F. Savino, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP, serve as the Debtors' counsel. NextPoint LLC serves as the Debtors' financial advisor. Garry M. Graber, Esq., and Steven W. Wells, Esq., at Hodgson Russ LLP, represent Evans Bank, N.A., the primary secured creditor. SHOTWELL LANDFILL: Creditor Wants Claim Allowed to Vote on Plan --------------------------------------------------------------- Double "J" Enterprises, Inc., asks the Bankruptcy Court to estimate at $150,000 and temporarily allow its claim for purposes of accepting or rejecting Shotwell Landfill, Inc.'s Plan of Reorganization dated Aug. 16, 2013. Prior to the Debtor's filing, the Debtor and Double J were involved in a lawsuit that began in the General Court of Justice, District Court Division, Wake County, North Carolina, and was transferred to the Superior Court Division. The main issue in the lawsuit involved certain equipment owned by Double J and the Debtor's alleged wrongful possession of the equipment. As reported in the Troubled Company Reporter on Sept. 20, 2013, the Bankruptcy Court continued until Dec. 17 at 2:00 p.m., the hearing to consider confirmation of Shotwell's Chapter 11 Plan and final approval of the explanatory Disclosure Statement. The disclosure statement has been conditionally approved. As reported in the TCR on Aug. 22, 2013, Branch Bank & Trust filed a proof of claim in the amount of $13.7 million. The claim amount is disputed. Pursuant to the Plan, the Allowed Secured Claim of BB&T in Class 3 will be placed in current, non-default status and re-amortized over 25 years with interest at the Secured Rate. The Debtor proposes to make monthly payments according to such amortization. The Debtor anticipates that Branch Bank & Trust's Class 3 Claim will be $2,900,000. BB&T's Allowed Unsecured Claim in Class 6 will be amortized over 25 years at the Unsecured Rate, or such amortization and rate as the Court finds necessary for confirmation. The Debtor will make monthly payments according to such amortization. The Debtor anticipates that the Class 6 Claim will be less than $6,700,000. Allowed Unsecured Claims of less than $5,000 in Class 7 will be paid in full 90 days after the Effective Date. The Debtor anticipates that the Class 7 Claims will be less than $5,500. Allowed General Unsecured Claims in Class 8 will receive quarterly installments of $30,000 to be split pro rata among Allowed Claims in Class 8 until paid in full. The Debtor anticipates Class 8 Claims will be less than $360,000. Class 8 claimants have filed proofs of claim totaling $200,637.03. The existing Allowed Equity Interests in the Debtor in Class 9 will remain the same as prepetition. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/shotwelllandfill.doc99.pdf About Shotwell Landfill, Inc. Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in Wilson on April 19, 2013. The Debtor disclosed $23,027,736 in assets and $10,039,308 in liabilities as of the Chapter 11 filing. Blake P. Barnard, Esq., William P. Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law Firm, PLLC, in Raleigh, N.C., represent the Debtor as counsel. William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh, N.C., represents the Debtor as special counsel. The Bankruptcy Administrator was unable to appoint an official committee of unsecured creditors in the Debtor's case. The Debtor, in its amended schedules disclosed $23,043,736 in assets and $10,048,364 in liabilities as of the Chapter 11 filing. SIMPLY WHEELZ: Catalyst Makes Top Bid for Advantage Rent A Car -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Catalyst Capital Group Inc. will buy the Advantage Rent A Car business, assuming there are no problems at the Dec. 17 sale-approval hearing. According to the report, Advantage filed for Chapter 11 reorganization on Nov. 5 in Jackson, Mississippi, intending for Catalyst to be the buyer in exchange for as much as $46 million in debt financing the bankruptcy effort. At the Dec. 9 auction, Catalyst was challenged by Sixt SE. Catalyst came out on top by increasing the Chapter 11 financing. In addition, Toronto-based Catalyst agreed to resume financing and overlook a default on the bankruptcy loan, according to a court filing. Formally named Simply Wheelz LLC and based in Ridgeland, Mississippi, the business 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 forced by regulators to divest Advantage as a condition to antitrust clearance for buying the Dollar Thrifty business. Advantage has 72 locations in 33 states. It is the fourth-largest rental car business in the U.S. The petition listed assets and debt both exceeding $100 million. Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2013. The case is assigned to Judge Edward Ellington. 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. SNOHOMISH COUNTY: Fitch Affirms 'B' Rating on $2.3MM LTGO Bonds --------------------------------------------------------------- Fitch Ratings has taken the following rating action on Snohomish County Public Hospital District #1's (the district) limited tax general obligation (LTGO) bonds: -- $2.3 million series 2004 affirmed at 'B'. The Rating Outlook is Negative. Security: The bonds are secured by a full faith and credit general obligation pledge of the district. The district also irrevocably pledges to annually levy and collect property taxes within the constitutional and statutory limits to pay debt service on the bonds. Key Rating Drivers: DETERIORATING FINANCIAL POSITION: The district continues to face severe financial strains due to declining utilization and recurring operating losses that have weakened cash and reserve levels. The Negative Outlook reflects the district's vulnerability to insolvency over the near-to-medium term. The district has had a going concern opinion in its two most recent audits. Turnaround Efforts Underway: The district completed an affiliation agreement in 2012 with EvergreenHealth, a public hospital district based in Kirkland, Washington, and hired new management in 2013. The team is implementing a turnaround plan to stabilize operations. Voters approved an increase in the district's operating levy earlier this year, but many challenges remain. Strong Tax Base; Limited Benefit: Given the weak financial position, the benefits of the district's GO pledge and the strength of its underlying tax base are diminished. The current rating more closely reflects the district's financial operations. Rating Sensitivities: Continued Financial Deterioration: The district's inability to stabilize its finances could result in insolvency and further rating downgrades. Credit Profile: Snohomish County Public Hospital District No. 1 is located in eastern Snohomish County, Washington, about 30 miles northeast of Seattle on the outskirts of the Puget Sound region. The district owns and operates Valley General Hospital, the only acute care facility in the district, and the Valley General Chemical Dependency Treatment Center. Ongoing Financial Challenges: The district's financial position has continued to deteriorate due to recurring operating losses. Unrestricted net assets fell to $2.5 million in 2012, down from $5.2 million in 2008, while the district has experienced six consecutive years of operating losses. Liquidity remains weak and has been supported recently by a $1.5 million line of credit. Declining utilization has been a key factor in the district's financial challenges, resulting from increased local competition. Turnaround Efforts Underway: Following several years of efforts to forge new partnerships, the district executed an affiliation agreement with EvergreenHealth, a public hospital district based in Kirkland, Washington, in December 2012. The agreement provides for a multi-year partnership that is intended to increase utilization and revenues for both entities, and help stabilize the district's finances. A new management team was hired following execution of the affiliation agreement, and the district has developed a multi-year turnaround plan to improve its finances and operations. In addition, the April 2013 approval by district voters of an increased operating levy is expected to generate an additional $2.4 million per year, equal to approximately 6% of 2012 operating revenues. Fitch recognizes the opportunity of these new developments, but the district remains vulnerable due to its challenged position in a competitive market and limited financial flexibility. Strong Underlying Tax Base of Limited Benefit: The district's underlying tax base is large and diverse, but experienced a fourth consecutive year of declines in 2013, reducing taxable assessed values (TAV) by one-third from peak levels. The district's tax revenues are protected by a levy that adjusts automatically to compensate for changes in TAV, and have been relatively stable. However, given the district's weak financial position, the strong underlying tax base and GO pledge is of limited benefit due to the potential disruption of debt service payments in an insolvency situation. Direct and overlapping debt levels for the district are moderate at approximately $3,600 per capita and 3.5% of TAV. Amortization is slow as a result of the district's 2009 issuance of additional GO debt, with 31% of outstanding principal due for payment within 10 years. Debt service requirements for the district are small relative to the size of its operations, and accounted for approximately 3% of expenditures in fiscal 2012. SOUTHERN TITLE: Faces Liquidation Amid Embezzlement Case -------------------------------------------------------- Michael Schwartz at the Richmond BizSense reports that Southern Title Insurance Corp., an insurance company that has been under state control for the past two years, could be headed for liquidation. The report relates that the state's Bureau of Insurance has asked for a hearing to declare Southern Title Insurance Corp., a Richmond-based title insurer that was hit hard by an employee's embezzlement, a candidate for liquidation. The bureau, part of the State Corporation Commission, was named receiver of the company when its financial state was deemed unsound after the embezzlement, the report notes. According to the report, the receiver's attempt to rehabilitate the firm found a $30 million shortfall between its liabilities and its assets and reserves. "The Deputy Receiver therefore submits that Southern Title is insolvent," the receiver stated in documents filed in October, Richmond BizSense relates. The report recounts that the receivership dates to late 2011, when Southern Title laid off its underwriting staff and stopped taking new claims after the company admitted that one of its employees in Texas embezzled funds that were to be held in escrow. A subsequent investigation left the company below proper capital levels. The court appointed the SCC to take the reins and protect the interests of policyholders and creditors, Richmond BizSense notes. There has since been a freeze on the firm's ability to take on policies and pay claims. "When they went into receivership, no new policies could be offered. In essence, what was occurring was just handling current policies," the report quotes Ken Shrad, an SCC spokesman, as saying. Southern Title, which had offices downtown at James Center, operates in receivership out of an office off Forest Avenue. A hearing on the proposed liquidation and a declaration of insolvency is set for Feb. 4, the report discloses. The liquidation would take into account any claims from creditors and policyholders. SPRINT CORP: Fitch Rates Proposed Sr. Unsecured Notes 'B+/RR4' -------------------------------------------------------------- Fitch Ratings has assigned a 'B+/RR4' rating to Sprint Corporation's proposed benchmark-sized senior unsecured notes due 2024. The proceeds from the offering would be used for general corporate purposes, which may include redemptions or service requirements of outstanding debt, network expansion, and modernization. The Rating Outlook is Stable. A full list of ratings follows at the end of this release. The senior notes will be fully and unconditionally guaranteed on a senior unsecured basis by Sprint's wholly owned subsidiary, Sprint Communications, Inc. Sprint fully and unconditionally guarantees on a senior basis the outstanding securities issuances of Sprint Communications Inc., Sprint Capital Corporation, Clearwire Communications LLC and iPCS, Inc. Consequently, Fitch believes Sprint has created a guarantee structure such that the senior notes issued at Sprint Capital Corp., Sprint Communications Inc. and Sprint are pari passu. Key Rating Drivers: The rating affirmation reflects Fitch's view that Sprint's financial profile will remain weak through at least 2014 due to the significant cash deficit during the next two years and the associated debt borrowing that has substantially increased leverage. Sprint estimated this deficit at approximately $10 billion in its June 2013 proxy filing driven by $16 billion in capital investment to keep pace with growing industry demand and the competitive environment. Fitch believes the cumulative $26 billion in capital spending the next four years also reflects the underinvestment in Sprint's network and the need to accelerate the deployment of capital to improve Sprint's competitive position. Looking forward, as Sprint leverages it cost reduction efforts, significant margin expansion should occur in the 2014 and 2015 timeframe. Cost reduction efforts could drive up to $2 billion in savings. The improved cash generation when coupled with reduced capital investment should allow for the company to strengthen its financial profile, including the potential to generate free cash flow by the end of 2015. Leverage is expected to be at upper end of the 5x range for 2013 before declining in 2014. Operational Trends: Sprint also faces material execution risk across the numerous strategic objectives that the company is pursuing. Fitch remains concerned with postpaid gross additions trends that were negatively affected in the past due to the recapture of its iDEN subscribers and aggressive LTE marketing by its competitors. Sprint will continue to face postpaid subscriber headwinds into 2014 due to the negative effect from mixed accounts (iDEN and Sprint platform), network vision related churn, competitive environment and lack of density with its LTE footprint. As such, postpaid revenue will remain pressured and Sprint will need to find ways to reinvigorate growth in 2014 as competitive intensity remains high among the national and wholesale providers for postpaid subscribers. The accelerated network investment to improve capacity, data bandwidth and customer experience is a key strategic component of Sprint plans. This includes Sprint's plans to deploy Clearwire's 2.5 GHz spectrum over the next several years to increase both capacity and bandwidth. The company hopes the improved network when combined with its differentiated unlimited plan and Softbank's expertise will increase its share of industry gross additions. Fitch believes Verizon and AT&T Wireless are currently much better positioned to leverage their scale, capital investment, subscriber bases and spectrum portfolios to capture additional share and monetize future growth, particularly through the shared data plans. Consequently, Sprint's challenge is magnified, as industry postpaid and prepaid additions are expected to contract further as the industry matures. Additional avenues for incremental revenue growth include mobile broadband/tablet devices and machine-to- machine opportunities. Liquidity, Maturities & Financial Covenants: For the third quarter of 2013, Sprint's liquidity position is supported by $7.5 billion of cash and short-term investments and $2.1 billion borrowing capacity under a five-year $3 billion revolving credit facility due 2018. Letters of credit outstanding were $915 million. Sprint also maintains a second tranche of a $500 million vendor financing facility that became available for borrowing on April 1, 2013. As of Sept. 30, 2013, up to $174 million was available through May 31, 2014. Fitch expects Sprint will maintain at least $2 billion of cash going forward to maintain adequate liquidity for its strategic plans. Sprint's current cash position along with this most recent offering will help fund on-going operating deficits related to the capital investment and the expected auction for TV broadcast spectrum. Debt refinancing and redemptions have significantly reduced Sprint's maturity profile from previous years. During the next four years, $385 million, $704 million, $2,505 million and $2,402 million of debt comes due, respectively. After considering the $6.5 billion offering Sprint raised in September 2013, the company disclosed there was risk that it would exceed the 6.25x leverage ratio at Sept. 30, 2013. Accordingly, Sprint obtained a limited waiver until Dec. 31, 2013 from each of the lenders under the credit facilities that allowed Sprint to exclude $4.5 billion of indebtedness from the leverage ratio calculation. This enabled Sprint to be in compliance with the financial covenant at 5.4x for Sept. 30, 2013. As a requirement under the waivers, Sprint maintained a segregated reserve account that was used to retire existing Clearwire indebtedness in December. The unsecured credit facilities at Sprint benefit from upstream unsecured guarantees from all material subsidiaries. The credit agreement allows carve-outs for indebtedness composed of unsecured guarantees that are expressly subordinated to the credit facility. The unsecured junior guaranteed debt is senior to the unsecured notes at Sprint Nextel and Sprint Capital Corporation. The unsecured senior notes at these entities are not supported by an upstream guarantee from the operating subsidiaries. The $1 billion vendor financing facility is jointly and severally borrowed by all of the Sprint subsidiaries that guarantee the Sprint credit facility, Export Development Canada loan and junior guaranteed notes. The facility additionally benefits from a parent guarantee and first priority lien on certain network equipment. This places the vendor facility structurally ahead of the unsecured notes. Rating Sensitivity/Drivers: Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Execution on cost reduction opportunities leading to expansion in operating EBITDA margins approaching 20%; -- Improvement in cash generation such that free cash flow (FCF) prospects for the year are approaching breakeven to positive; -- Improved funds from operations (FFO) interest coverage approaching 4x; -- Improved FFO adjusted leverage approaching 4x; -- Additional infusions of capital by Softbank; -- Improvement in postpaid churn by at least 10-20 basis points; -- Positive trends in gross addition share. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Lack of an expected turn-around in FCF generation with persistent negative trends; -- Aggressive spectrum purchases that would increase leverage over 5.5x on a sustained basis; -- Postpaid subscriber trends materially weaken; -- Gross addition share gains fail to materialize; -- Additional material acquisitions. The ratings of Sprint Corporation and its subsidiaries are as follows: Sprint Corporation; -- IDR at 'B+'; -- Senior unsecured notes at 'B+/RR4'. Sprint Communications Inc.; -- IDR at 'B+'; -- $3 billion senior unsecured credit facility at 'BB/RR2'; -- Junior guaranteed unsecured notes at 'BB/RR2'; -- Senior unsecured notes at 'B+/RR4'. Sprint Capital Corporation; -- IDR at 'B+'; -- Senior unsecured notes at 'B+/RR4'. Clearwire Communications LLC -- IDR 'B+'; -- Senior unsecured notes 'BB+/RR1'; -- First priority senior secured notes 'BB+/RR1'. SPRINT CORP: S&P Assigns 'BB-' Rating to Proposed Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '3' recovery rating to Overland Park, Kan.-based wireless service provider Sprint Corp.'s proposed senior notes due 2024 (amount to be determined). The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. S&P expects proceeds from the new debt will be used to fund the company's network upgrade and to refinance existing debt. The 'BB-' corporate credit rating on Sprint is unchanged and the outlook remains stable. S&P expects net adjusted leverage to be in the mid-5x area in 2013 although Sprint has reasonable prospects to reduce leverage to the low-5x area in 2014 due to margin expansion, which is partially offset by cash used to fund free operating cash flow deficits for the company's network upgrade. RATINGS LIST Sprint Corp. Corporate Credit Rating BB-/Stable/-- New Rating Sprint Corp. Senior Notes due 2024 BB- Recovery Rating 3 STAR DYNAMICS: To Seek Approval of First-Day Motions Today ---------------------------------------------------------- STAR Dynamics Corporation, the radar systems provider to the U.S. military, sought bankruptcy protection in Ohio to secure a breathing room while it seeks a buyer for the assets. At the Debtor's behest, Judge Charles M. Caldwell will convene an expedited hearing on the first-day motions on Dec. 12, 2013, at 10:00 a.m. The Debtor is seeking approval to pay prepetition trust fund taxes, pay prepetition wages of employees, and grant adequate assurance of payment to utility companies. The Debtor said that the relief requested in the first day motions is essential to maintaining the viability of Debtor's business and maximizing the value of the business for an eventual sale. About Star Dynamics Based in Hilliard, Ohio, STAR Dynamics Corp. develops, markets and sells instrumentation radar systems, including time, space, and position information ("TSPI") tracking radar systems, in the United States, the United Kingdom, Europe, Asia and Australia. STAR's products are typically used in connection with U.S. and foreign government test ranges, which are dedicated surface and air spaces where militaries test and train with missiles and other weaponry. STAR at present has contracts with the United States military, the Swedish Defence Materiel Administration (FMV), the Korean ADD, and the Israeli Ministry of Defense and in the past has done business with the Taiwan CSIST and France's CNES. As of the Petition Date, STAR employs 112 individuals on a full- time basis. Star Dynamics filed a Chapter 11 petition (Bankr. S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus Ohio, to sell its assets under 11 U.S.C. Sec. 363. The Debtor is represented by Thomas R Allen, Esq., at Allen Kuehnle Stovall & Neuman LLP, in Columbus Ohio. STAR said that as of Nov. 30, 2013, its books and records reflect total assets having a book value of $28.5 million, and total liabilities of $50.9 million. According to the docket, the Debtor's schedules of assets and liabilities and statement of financial affairs are due Dec. 24, 2013. Year to date gross sales through Nov. 30, 2013 were $8.1 million. STAR DYNAMICS: To Sell Assets in Chapter 11 Amid BAE Suit --------------------------------------------------------- STAR Dynamics Corporation, the Hilliard, Ohio-based provider of radar systems to the U.S. military and other countries, said that amid a contentious litigation against BAE Systems Technology Solutions & Services Inc. and due to its continuing need for funding, STAR is seeking to sell its assets while in Chapter 11 bankruptcy. STAR in October 2013 engaged New York-based investment banking firm Sagent Advisors, LLC to assist in obtaining a transaction for a sale of all or substantially all, of STAR's assets. As a part of this process, a "data" room has been established and Sagent has begun the process of cultivating interested parties. STAR believes that the Chapter 11 bankruptcy process will prove to be the best forum to maximize the value of its assets through a transaction for the sale of all or substantially all, of its assets under Section 363 of the Bankruptcy Code, while at the same time continuing its day-to-day operations on a "business as usual" basis. BAE Lawsuit Proposed counsel, Thomas R. Allen, Esq., at Allen Kuehnle Stovall & Neuman LLP, explains in bankruptcy court filings that for the past year, the Debtor has been embroiled in contentious litigation, styled as BAE Systems Technology Solutions & Services Inc. v. STAR Dynamics Corporation, Case No 12-CV-014372. The litigation has been conducted largely under seal due to the sensitive nature of STAR and BAE's respective businesses. In its complaint, BAE asserted six causes of action: (1) misappropriation of trade secrets under the Ohio Uniform Trade Secrets Act ("OUTSA"); (2) unfair competition; (3) tortuous interference with contract; (4) tortious interference with prospective business expectancy; (5) aiding and abetting breach of fiduciary duty; and (6) aiding and abetting breach of duty of loyalty. The state court, upon motion of STAR for partial judgment on the pleadings, dismissed all counts except the count for misappropriation of secrets. In June of 2013, prior to the state court's dismissal of all but one of BAE's claims, BAE moved the state court to preliminarily enjoin STAR from certain specified activities. BAE's motion to preliminarily enjoin STAR was heard before a magistrate, who issued a recommendation on July 30, 2013. The July 30 magistrate decision recommended that STAR be enjoined from further negotiations with certain parties for the purpose of engaging in a specific project in Europe. In addition, the magistrate decision recommended that STAR be enjoined from engaging in any competitive bidding, or accepting any contracts on projects for which BAE has submitted a bid, or intends to submit a bid. The state court adopted the magistrate decision on that very same day on an interim basis. The state court subsequently entered an order clarifying the injunctive relief previously granted in the Interim Order, and enjoined STAR on an interim basis from, inter alia, bidding on specific projects identified by BAE, using or disclosing any of the alleged trade secretes identified by BAE, and developing STAR's CSTAR radar system. STAR vigorously objected to the magistrate decision, which objection is still pending before the State Court. As of the Petition Date, the Interim Order has expired and the state court has yet to issue a final order relative to BAE's motion requesting preliminary injunctive relief. $33.5-Million Debt to Becnel Over the past four years, in addition to institutional lending, the finances of STAR have been supported by loans and advances made by Tom Becnel. In particular, from September of 2009, through November of 2013, Mr. Becnel has provided funding for STAR in the aggregate amount of $33,480,000. As of the Petition Date, STAR owes Mr. Becnel in excess of $32,000,000. Mr. Becnel and his family members own 90% of STAR. STAR's total liabilities were $50.9 million as of Nov. 30, 2013. About Star Dynamics Based in Hilliard, Ohio, STAR Dynamics Corp. develops, markets and sells instrumentation radar systems, including time, space, and position information ("TSPI") tracking radar systems, in the United States, the United Kingdom, Europe, Asia and Australia. STAR's products are typically used in connection with U.S. and foreign government test ranges, which are dedicated surface and air spaces where militaries test and train with missiles and other weaponry. STAR at present has contracts with the United States military, the Swedish Defence Materiel Administration (FMV), the Korean ADD, and the Israeli Ministry of Defense and in the past has done business with the Taiwan CSIST and France's CNES. Star Dynamics filed a Chapter 11 petition (Bankr. S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus Ohio, to sell its assets under 11 U.S.C. Sec. 363. The Debtor is represented by Thomas R Allen, Esq., at Allen Kuehnle Stovall & Neuman LLP, in Columbus Ohio. STAR said that as of Nov. 30, 2013, its books and records reflect total assets having a book value of $28.5 million, and total liabilities of $50.9 million. STAR DYNAMICS: Section 341(a) Meeting Scheduled for Jan. 16 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of STAR Dynamics Corporation will be held on Jan. 16, 2014, at 10:00 a.m. at Suite 100. 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. STAR Dynamics Corporation filed a Chapter 11 petition (Bankr. S.D. Ohio Case No. 13-59657) on Dec. 10, 2013. The petition was signed by Kevin Collis as chief financial officer. The Debtor estimated assets of at least $10 million and debts of at least $50 million. ALLEN KUEHNLE STOVALL & NEUMAN LLP serves as the Debtor's counsel. The Hon. Charles M Caldwell presides over the case. STAR DYNAMICS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: STAR Dynamics Corporation fdba Aeroflex Powell, Inc. 4455 Reynolds Drive Hilliard, OH 43026 Case No.: 13-59657 Chapter 11 Petition Date: December 10, 2013 Court: United States Bankruptcy Court Southern District of Ohio (Columbus) Judge: Hon. Charles M Caldwell Debtor's Counsel: Thomas R Allen, Esq. ALLEN KUEHNLE STOVALL & NEUMAN LLP 17 South High Street, Suite 1220 Columbus, OH 43215 Tel: (614)221-8500 Fax: 614-221-5988 Email: allen@aksnlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $50 million to $100 million The petition was signed by Kevin Collis, chief financial officer. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Actions Et Services Business Debt $32,122 Allied Electronics, Inc. Business Debt $26,115 Craters & Freighters Global Business Debt $38,805 Logistics DY 4 Inc. Business Debt $31,790 Dynamic Sensor Systems Business Debt $26,000 Germane Systems Business Debt $178,730 Gigacom, Inc. Business Debt $86,595 Herley-CTI, Inc. Business Debt $99,000 Hicks Partners LLC Business Debt $30,000 K&L Microwave Business Debt $30,460 Parametric Technology Corp. Business Debt $24,630 Pegasi Systems International Business Debt $55,769 Renew Data Business Debt $40,714 RSFi Business Debt $27,456 Spacek Business Debt $40,490 Steve S. Monas Business Debt $35,913 Stillwater Technologies Inc Business Debt $55,025 Vorys Sater Seymour & Pease Business Debt $454,189 Attn: Richard D. Schuster 52 East Gay Street Columbus, OH 43215 Wenzel Associates Inc. Business Debt $135,220 Womble Carlyle Sandridge & Business Debt $525,583 Rice LLP Attn: Thomas W. Waldrep, Jr. One West Fourth Street Winston Salem, NC 27101 STELLAR BIOTECHNOLOGIES: "C. diff" Patents Issued in U.S., China ---------------------------------------------------------------- Stellar Biotechnologies, Inc., announced the issuance of two additional patents, in the United States and in China, covering the Company's active immunotherapy technology for the treatment of Clostridium difficile infection ("C. diff"). Clostridium difficile is a bacteria found in the intestines that can cause severe and life-threatening intestinal conditions. C. diff infections are at an all-time high and related hospitalizations have tripled in the last decade. The two patents, U.S. patent No. 8,597,663 and China patent No. 200880115518.2, describe certain novel cell surface polysaccharides and their chemical structures with broad claims covering antigen and vaccine compositions for the treatment, prevention and diagnosis of C. diff infection. Stellar holds the exclusive, worldwide rights to develop, manufacture and sell human vaccines and other products derived from these patents, licensed from the University of Guelph. The license covers intellectual property related to the cell-wall polysaccharide of C. diff named PSII. Stellar's technology combines PSII with Stellar KLHTM into an active immunotherapy approach with potential advantages over other technologies. "Our PSII-KLH technology is dramatically different from other approaches," said Herbert Chow, Ph.D., Stellar's chief technology officer. "We are harnessing the body's own immune system to disrupt the fundamental pathways of C. diff pathogenesis and transmission, unlike many methods which can only impact disease symptoms. These patents strengthen Stellar's intellectual property and further raise the barriers around our C. diff platform." The novel combination of PSII-KLH is designed to activate innate and adaptive immune systems in the intestines that directly inhibit spore germination and reduce bacterial burden. In this way, Stellar's PSII-KLH vaccine is cell-directed to limit the extent and spread of disease transmission. Preliminary preclinical studies from Stellar's PSII-KLH active immunotherapy program demonstrated protection against C. diff in mice. About Stellar Port Hueneme, Cal.-based Stellar Biotechnologies, Inc.'s business is to commercially produce and market Keyhole Limpet Hemocyanin ("KLH") as well as to develop new technology related to culture and production of KLH and subunit KLH ("suKLH") formulations. The Company markets KLH and suKLH formulations to customers in the United States and Europe. KLH is used extensively as a carrier protein in the production of antibodies for research, biotechnology and therapeutic applications. The Company's balance sheet at May 31, 2013, showed $2.23 million in total assets, $5.35 million in total liabilities and a $3.11 million total shareholders' deficiency. "Without raising additional financial resources or achieving profitable operations, there is substantial doubt about the ability of the Company to continue as a going concern," the Company said in its quarterly report for the period ended May 31, 2013. STEVE & BARRY'S: 2nd Circ. Revives WARN Suit v. Parent ------------------------------------------------------ Law360 reported that the Second Circuit on Dec. 10 partially revived a class action claiming the parent of Steve & Barry's should be liable for mass layoffs that preceded the retail chain's bankruptcy, finding former employees could pursue claims against the retailer's nonbankrupt parent but not its private equity investors. According to the report, a three-judge panel ruled that the New York federal judge had correctly dismissed the private equity defendants from the Worker Adjustment and Retraining Notification Act suit because they were investors and not "single employers." The appellate case is Guippone v. BH SBHoldings LLC, Case No. 12- 183 (3rd. Cir.). About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. The discount clothing chain's brands include the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 protection on July 9, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Diana G. Adams, United States Trustee for Region 2, has appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they disclosed $693,492,000 in total assets and $638,086,000 in total debts. SUNTECH POWER: Bondholders Face Off Over Bankruptcy Case -------------------------------------------------------- Katy Stech, writing for Daily Bankruptcy Review, reported that two major investors who bought some of the $540 million worth of U.S. bonds issued by Chinese solar-panel maker Suntech Power Holdings Co. are fighting a bid by a smaller group of bond investors to force the company into bankruptcy. According to the report, investment firms Clearwater Capital Partners LLC and a Spinnaker Capital Group affiliate told a bankruptcy judge on Dec. 9 that allowing the Chapter 7 bankruptcy for Suntech to move forward would result in a smaller recovery than under the restructuring plan that's in the works for the company, which was once the world's largest solar panel maker, according to papers filed in U.S. Bankruptcy Court in Manhattan. Earlier this year, Suntech executives began negotiating with an investor backed by a local government in China to invest $150 million in a deal that would allow the company to become a distributor within the solar-power industry's supply chain, the report related. Some of the cash investment -- plus some ownership of the reorganized company -- could flow to the roughly $ 540 million in U.S. convertible bonds the company defaulted on in March, according to earlier court papers. Bondholders who want the bankruptcy dismissed said that they represent more than half of the company's U.S. bond debt, the report further related. The Chapter 7 bankruptcy case, filed on Oct. 14, was initiated by bondholders who are owed about $1.6 million, which Suntech officials calculated to be only 0.27% of its debt. In the Dec. 9 court papers, the larger bondholder group said that the smaller group has threatened to liquidate Suntech using a Chapter 7 bankruptcy in an attempt "to "shake the tree" in hopes of being paid off," the report added. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd., produces solar products for residential, commercial, industrial, and utility applications. Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. Suntech Power Holdings Co., Ltd., received from the trustee of its 3 percent Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. Suntech Power had involuntary Chapter 7 bankruptcy proceedings initiated against it on Oct. 14, 2013, in U.S. Bankruptcy Court in White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by holders of more than $1.5 million of defaulted securities under a 2008 $575 million indenture. The Chapter 7 Petitioners are Trondheim Capital Partners, L.P., Michael Meixler, Longball Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented by Jay Teitelbaum, Esq., at TEITELBAUM & BASKIN LLP, in White Plains, New York. TABERNACLE CHURCH OF BOSTON: Voluntary Chapter 11 Case Summary -------------------------------------------------------------- Debtor: Greater Love Tabernacle Church of Boston, Massachusetts 101 NightingaleStreet Dorchester, MA 02124 Case No.: 13-17099 Chapter 11 Petition Date: December 10, 2013 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Hon. Joan N. Feeney Debtor's Counsel: Michael J. Goldberg, Esq. CASNER & EDWARDS, LLP 303 Congress Street Boston, MA 02210 Tel: (617) 426-5900 Fax: (617) 426-8810 Email: goldberg@casneredwards.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,001 to $1 million The petition was signed by Pastor William Dickinson, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. TELECOMMUNICATIONS MGMT: Downgraded to B Corporate -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Telecommunications Management LLC, a telecommunications provider also known as NewWave, has a B corporate rating after the one-step downgrade on Dec. 10 by Standard & Poor's. According to the report, S&P based the downgrade on the company's limited size, compared to peers, along with "below-average profitability." On the plus side, the Sikeston, Missouri-based company has "adequate" liquidity, S&P said. TENGION INC: Reports $7.26-Mil. Net Loss in Sept. 30 Quarter ------------------------------------------------------------ Tengion, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $7.26 million for the three months ended Sept. 30, 2013, compared to a net loss of $4.57 million for the same period last year. The Company's balance sheet at Sept. 30, 2013, showed $12.43 million in total assets, $23.78 million in total liabilities, and stockholders' deficit of $11.34 million. The company said, "If we are unable to obtain adequate financing on a timely basis, we may be required to delay, reduce the scope of or eliminate one or more of our development programs, reduce our personnel, or default on our outstanding debt and contractual obligations, any of which could raise substantial doubt about our ability to continue as a going concern and remain in business." A copy of the Form 10-Q is available at: http://is.gd/XqnUFy About Tengion Tengion, a clinical-stage biotechnology company, has pioneered the Organ Regeneration Platform(TM) that enables the Company to create proprietary product candidates that are intended to harness the intrinsic regenerative pathways of the body to produce a range of native-like organs and tissues. Tengion's product candidates seek to eliminate the need to utilize other tissues of the body for a purpose to which they are poorly suited, procure donor organs or administer anti-rejection medications. The Company's balance sheet at June 30, 2012, showed $6.06 million in total assets, $9.02 million in total liabilities and a $2.96 million total stockholders' deficit. Bankruptcy Warning Cash, cash equivalents and short-term investments at June 30, 2012, were $3.7 million, representing 60.8% of total assets. The Company is currently appealing a notice of delisting from the NASDAQ Stock Market for failure to maintain minimum stockholders' equity. If the Company's common stock is delisted and is not subsequently listed on another national securities exchange, the Company would be required to pay the cash settlement value for certain of its outstanding warrants. "We will need to raise additional funds to complete the Phase 1 clinical trial for our Neo-Urinary Conduit and our preclinical research and development activities for our Neo-Kidney Augment," the Company said in its quarterly report for the period ended June 30, 2012. "We will need to raise additional funds through collaborative arrangements, public or private sales of debt or equity securities, commercial loan facilities, or some combination thereof. There is no assurance that such financing will be available or, if available, on terms acceptable to us. Without additional capital, the Company will not be able to remain in business and will likely need to seek protection under the United States bankruptcy laws." TWIN DEVELOPMENT: Trustee Wants Fees Paid When Case Is Dismissed ---------------------------------------------------------------- Tiffany L. Carroll, the Acting U.S. Trustee, filed a response to the Bankruptcy Court's order to show cause why Twin Development LLC's case must not be converted to Chapter 7 or dismissed. The U.S. Trustee believes that cause exists to convert or dismiss the case. The U.S. Trustee notes that the Debtor is 100% owned by Wallace Benward, the manager of the Debtor. The case has been pending as voluntary Chapter 11 case since March 19, with no payments of the U.S. Trustee fees for the entire case. If the Court decides to dismiss the case, the U.S. Trustee requests that the Debtor be directed to pay the quarterly fees in the amount of $1,301. About Twin Development, LLC Twin Development, LLC, filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-02719) on March 19, 2013. The petition was signed by Wallace Benwart as manager. The Debtor scheduled assets of $55,800,000 and liabilities $38,027,600. The Debtor is represented by James Andrew Hinds, Jr., Esq., at Hinds Shankman, LLP. U.S. FOODS: S&P Puts 'B' CCR on CreditWatch Positive ---------------------------------------------------- Standard & Poor's Ratings Services placed all of its ratings on Rosemont, Ill.-based US Foods Inc., including its 'B' corporate credit rating, on CreditWatch with positive implications. Total debt outstanding as of Sept. 28, 2013 was approximately $4.8 billion. The CreditWatch placement follows the announcement that Sysco and US Foods will merge in a partially debt-financed transaction. If the transaction closes as planned, US Foods would merge into the larger and financial stronger Sysco. "Assuming the transaction closes, we expect to raise our corporate credit rating on US Foods to the level of Sysco upon completion of the transaction," said Standard & Poor's credit analyst Jerry Phelan. "We would then likely withdraw all of the US Foods ratings." Alternatively, if the transaction is not completed, Standard & Poor's would likely affirm all of US Foods ratings and remove them from CreditWatch. UNITED RENTALS: S&P Raises CCR to BB- & Removes Rating from Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Greenwich, CT-based United Rentals Inc. (URI) to 'BB-' from 'B+'. At the same time, S&P removed the rating from CreditWatch, where it placed it with positive implications on Nov. 26, 2013. The outlook is stable. S&P also raised the issue-level ratings on the company's debt one notch and removed them from CreditWatch positive, where S&P placed them on Nov. 26, 2013. The recovery ratings on the debt issues remain unchanged. "We base our upgrade primarily on a reassessment of the importance of scale in URI's business risk profile," said Standard & Poor's credit analyst Sarah Wyeth. "We expect the company to generate more than $5 billion in revenues in 2014. We believe that this somewhat offsets its presence in the highly cyclical and competitive equipment rental industry". S&P assess URI's profitability as "above average" and its competitive position as "fair." The outlook is stable. "We believe that the slow growth conditions that benefit the industry should continue through 2014," said Ms. Wyeth. "We expect URI to generate positive free cash flow while it purchases enough equipment to meet demand." Although leverage, as measured by debt to EBITDA, should remain within the 3x-4x range, FOCF to debt will likely hover at about 5%. S&P believes these metrics are appropriate for the "aggressive" financial risk profile assessment. S&P could consider a downgrade if the business conditions in the equipment rental industry deteriorate to an extent that S&P expected leverage, as measured by debt to EBITDA, to increase to more than 5x. This could occur if the company did not curtail its capital expenditures in time to reduce debt before the earnings drop. Although less likely, S&P could consider an upgrade if leverage metrics, including FOCF to debt, improved to levels that could support a "significant" financial risk profile assessment. This could occur if, for instance, S&P expected FOCF to debt to increase to and remain above 10% and debt to EBITDA to decline to and remain less than 3x. VIOLIN MEMORY: Incurs $34.11-Mil. Net Loss in Oct. 31 Quarter ------------------------------------------------------------- Violin Memory, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $34.11 million on $28.31 million of total revenue for the three months ended Oct. 31, 2013, compared to a net loss of $25.4 million on $20.6 million of total revenue for the same period last year. The Company's balance sheet at Oct. 31, 2013, showed $217.32 million in total assets, $75.54 million in total liabilities, and stockholders' equity of $141.78 million. The Company said in the Form 10-Q, "We have incurred recurring operating losses and negative cash flows from operating activities since inception through October 31, 2013, and we have an accumulated deficit of over $296.0 million as of October 31, 2013. Through October 31, 2013, we have not generated any cash from operations and have relied primarily on the proceeds from equity offerings, debt financing and credit facilities to fund our operations. These matters raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our obtaining the necessary financing to fund our operations." A copy of the Form 10-Q is available at: http://is.gd/zgDxp6 Violin Memory develops and supplies memory-based storage systems for high-speed applications, servers and networks in the Americas, Europe and the Asia Pacific. WEST AIRPORT: WAP Holdings' Motion to Prohibit Cash Use Denied -------------------------------------------------------------- The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida, in a final order, authorized West Airport Palms Business Park, LLC, to use cash collateral consistent with the second interim order granting the Debtor's request. The Court denied WAP Holdings LLC's motion to prohibit continued use of cash collateral and to require debtor to file debtor-in- possession reports. As reported in the Troubled Company Reporter on Nov. 26, 2013, WAP Holdings -- the assignee to First-Citizens Bank & Trust Company, as the holder of a loan secured by a first priority lien on substantially all of the assets of West Airport Palms Business Park, LLC -- asked the Court to prohibit the continued use of cash collateral and to require the Debtor to file delinquent monthly operating reports. WAP Holdings said that on Oct. 16, 2013, First-Citizens Bank & Trust Company assigned its liens and claim against the Debtor to it. According to WAP, the Debtor has not filed a monthly report since Aug. 30, 2013 (for the period July 2, 2013, until July 31, 2013). WAP explained that without the monthly operating reports, the creditors and the Court cannot determine whether the Debtor has been operating in compliance with the budget or whether there are funds over and above the amounts in the budget that have been received and should be held for the benefit of or paid to WAP. Thus, WAP tells the Court that it does not consent to any further use of its cash collateral. About West Airport Palms Business Park Headquartered in Miami, Florida, West Airport Palms Business Park, LLC, filed for Chapter 11 (Bankr. S.D. Fla. Case No. 13-25728) on July 2, 2013. Judge Robert A. Mark presides over the case. James Schwitalla, Esq., represents the Debtor as counsel. In its petition, the Debtor scheduled assets of $14,440,419 and liabilities of $9,284,422. The petition was signed by Alexander Montero, managing member. The U.S. Trustee said that an official committee has not been appointed in the case. The U.S. Trustee reserves the right to appoint such a committee if interest developed among the creditors. WESTERN FUNDING: Auction on Dec. 18; Plan Hearing 2 Days Later -------------------------------------------------------------- Western Funding Incorporated late last month won approval to begin soliciting votes for its Chapter 11 plan, which contemplates the sale of the business to rival Carfinco Financial Group, Inc., absent higher and better offers at a court-sanctioned auction. With the approval of the explanatory disclosure statement, Western Funding has scheduled a hearing on Dec. 20, 2013 at 9:30 a.m. for confirmation of its Chapter 11 plan. According to the disclosure statement order entered on Nov. 26, 2013, parties who received solicitation packages must return their ballots no later than Dec. 17, 2013 at 5:00 p.m. Objections to confirmation of the Plan are also due Dec. 17, and replies to any objections must be filed no later than Dec. 19, 2013 at 12 noon. The court approved the disclosure statement notwithstanding objections filed by the Official Committee of Unsecured Creditors, The Class B Members of Harbor Structured Finance, LLC, and Mark Finston and James B. Hadden. The Creditors Committee said that the Disclosure Statement should not be approved for solicitation because it describes an unconfirmable plan. The Committee complains, among other things that, (i) the Plan proposes to grant the senior lenders liens to assets that are to be transferred to the liquidating trust even though the lenders do not hold prepetition liens on those assets; and the Plan provides third- party releases in violation of 11 U.S.C. Sec. 524(e) and 1129(a) and Ninth Circuit precedent. Sale-Based Plan The Debtors have agreed to sell all newly issued and outstanding capital stock of WFI and Global Track GPS, LLC, to Carfinco for a purchase price equal to 70% of the net finance receivables, absent higher and better offers. The Debtors also intend to sell their Las Vegas property to Carfinco for $500,000, subject to adjustments. The bid procedures approved by the bankruptcy judge on Nov. 26 provides that the auction is currently set to commence on Dec. 18 at 9:00 a.m. (PST). The Carfinco-led auction will take place at the law offices of Lewis Roca Rothgerber, 3993 Howard Hughes Parkway, Suite 600, Las Vegas, Nevada 89169. If no competing bids are received by the Dec. 16 bid deadline, the Debtors won't move forward with the auction and would seek approval of the sale to Carfinco at the sale hearing. On Nov. 26, 2013, the Debtors filed a motion to approve stock purchase agreement with Carfinco and bid procedures in connection with the sale of the Las Vegas Property. The Debtors also contemplate a Dec. 18 auction for the Las Vegas Property. Under the Plan, the senior secured lender will be paid from the proceeds of the sale. In the event the senior secured claims are paid in full, the liquidating trust will distribute the excess amount to general unsecured creditors. To the extent the amount received by the senior lender is less than the amount of its senior secured claims, the shortfall will be a senior secured deficiency claim and will be treated as an allowed general unsecured claim. Holders of general unsecured claims will receive from the liquidating trust their pro rata share of the proceeds from avoidance actions, and any sales of excluded real properties. After closing of the sale, the Debtors' assets will consist of the sale proceeds, avoidance actions and real property. A copy of the disclosure statement approved by Judge Laurel E. Davis at the Nov. 25 hearing is available for free at: http://bankrupt.com/misc/Western_Funding_DS_112613.pdf Senior secured creditor BMO Harris Bank N.A., which is owed not less than $30.9 million, supports confirmation of the Plan. About Western Funding Inc. Las Vegas car-loan maker Western Funding Inc., is a specialized consumer finance company providing automobile financing to borrowers with limited access to traditional credit. WFI and affiliates Western Funding Inc. of Nevada, and Global Track GPS, LLC, 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. As of the Petition Date, the Debtors' principal assets included $44.9 million in finance receivables, $1.53 million in land and building assets, $400,000 in real property and $754,000 in furniture and equipment. WORLD TRADE BUSINESS: Must Surrender Leased Premises to Landlord ---------------------------------------------------------------- District Judge Richard J. Arcara for the Western District of New York denied the request of World Trade Business Associations, Inc., for a stay pending its appeal from a bankruptcy court order that required the debtor to immediately surrender leased non- residential premises to the landlord. World Trade Business Associations, Inc., is the proprietor of a restaurant known as "Ying's Wings and Things", located in premises at 2309 Eggert Road, Tonawanda, New York, leased from BG ODP Tonawanda, LLC. Ying's argues that it will be unable to reorganize, it will have to liquidate its assets, and all of its creditors will suffer unnecessary losses, if it is required to surrender the lease and leased premises to its creditor-landlord, BG ODP, before the appeal is decided. Ying's seeks reversal on appeal of an Order of the Bankruptcy Court for the Western District of New York, entered June 26, 2013, by Bankruptcy Judge Michael J. Kaplan, No. 12-11797. The Order denied Ying's motion pursuant to 11 U.S.C. Sec. 365(a) and (b) to assume the lease, and granted BG ODP's cross-motion for immediate surrender of the lease and leased premises pursuant to Sec. 365(d)(4), for "reasons stated on the record at the hearing on April 10, 2013 and June 19, 2013." The Bankruptcy Court apparently ruled that Ying's failed to satisfy the requirement of Sec. 365(b)(1) that a debtor either cure a default of an unexpired lease by paying past-due rent, or provide adequate assurance of cure by periodic payments. In denying Ying's motion for a stay pending appeal, the District Judge said Ying's has not provided to the Court transcripts or other information sufficient for the Court to evaluate the Surrender Order and whether it is likely to be reversed on appeal. Ying's also has not provided the reasons stated by the Bankruptcy Court for denying an initial motion for a stay pending appeal. Ying's therefore fails to meet its burden of proof to make a strong showing it is likely to succeed on the merits of its appeal, and otherwise fails to meet requirements for entry of a stay pending appeal. A copy of the District Court's Dec. 9, 2013 Decision and Order is available at http://is.gd/ADKOj3from Leagle.com. World Trade Business Associations -- fka World Trade Business Associates, Inc., and Haibo, Inc., and dba Yings Wings and Things -- filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 12- 11797) on June 5, 2012, listing under $1 million in both assets and debts. Robert B. Gleichenhaus, Esq., at Gleichenhaus, Marchese & Weishaar, P.C., serves as the Debtor's counsel. A copy of the petition is available at no charge at http://bankrupt.com/misc/nywb12-11797.pdf YRC WORLDWIDE: Continues to Execute Long-Planned Refinancing Plan ----------------------------------------------------------------- YRC Worldwide Inc. said it is continuing to execute on its plan to refinance its capital structure by successfully achieving yet another milestone. "The affirmative vote from local IBT leaders allows us to begin the ratification process by which the company is seeking to extend the current MOU [Memorandum of Understanding] to March 31, 2019, gain additional operating flexibilities in areas such as the increased use of purchased transportation and utility employees, among others and allows us to move forward with our effort to refinance the company's balance sheet," stated YRC Worldwide CEO James Welch. "This has been a long, two-year journey that started with shedding non-core assets which led to an intense focus back on our core business - North American LTL. Now, with improved results, renewed focus on our people and our processes and support from our single largest partner, we are at the stage where we can finally address the bloated balance sheet that we inherited when we took over in July 2011. We have pursued a deliberate strategy to improve both our operations and our balance sheet, and we will constantly work to improve margins and returns for our investors. This agreement and our contemplated financings will be the final hurdle we need to clear to have a strong, stable business, which will provide great value for our stakeholders, job security for our employees and improved service for our customers," added Welch. "Our union and non-union employees have played a critical role in YRC Worldwide emerging from the economic downturn and previous management missteps, and we are now driving down the road to recovery. We appreciate the sacrifices that all of our employees and their families have made," said Welch. "The good news is our proposed agreement will not cut current wages of existing employees or reduce their health and pension contributions, which were important considerations as we designed the proposal to cut costs and improve service in this competitive industry environment," Welch stated. Savings from the proposed agreement and other corporate initiatives are forecasted to be approximately $100 million per annum; the majority of which would have been realized if the agreement would have been in place at the beginning of 2013. "It has not been without its challenges, but we are pleased with our refinancing progress to date and believe that with this agreement and resulting savings we will be able to not only delever the balance sheet and extend our maturities, but will also be able to decrease our interest expense," said YRC Worldwide CFO Jamie Pierson. "With this agreement to vote in hand, we are now focusing on getting out to the front lines where the real work occurs and communicating with our hardworking men and women about why this new proposed agreement is critical to our company's future. The foundation of this company's strength is the support of many stakeholders including our employees, lenders, shareholders and, most importantly, our customers," added Pierson. Pierson went on to say, "The effectiveness of ratification is conditioned on the company receiving a majority vote to adopt the proposed agreement from the bargaining unit employees and retiring at least 90% of the outstanding Series A and B Notes through a range of potentially deleveraging options. The effectiveness is also conditioned on the company making reasonable efforts to refinance the existing Credit Agreement and ABL facility on terms that are better than those that are currently in place. We have been working in earnest with both Credit Suisse and MAEVA to those ends." The company anticipates that the ratification process will be completed on Jan. 8, 2014, and expects the IBT will announce results soon thereafter. "If we are unable to extend our existing union agreements, we may be unable to refinance or restructure the portions of our debt which mature in 2014, which would have a material adverse effect on our business, financial condition and results of operations. Any deterioration in our relationship with our unions could also place us at a disadvantage relative to our nonunion competitors," the Company said in a regulatory filing with the U.S. Securities and Exchange Commission. A copy of the Form 8-K is available for free at: http://is.gd/FUaEub About YRC Worldwide Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ: YRCW) -- http://www.yrcw.com/-- is a holding company that offers its customers a wide range of transportation services. These services include global, national and regional transportation as well as logistics. After auditing the 2011 results, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. KPMG LLP, in Kansas City, Missouri, noted that the Company has experienced recurring net losses from continuing operations and operating cash flow deficits and forecasts that it will not be able to comply with certain debt covenants through 2012. For the year ended Dec. 31, 2012, the Company incurred a net loss of $136.5 million on $4.85 billion of operating revenue, as compared with a net loss of $354.4 million on $4.86 billion of operating revenue during the prior year. As of Sept. 30, 2013, the Company had $2.13 billion in total assets, $2.79 billion in total liabilities and a $665.8 million total shareholders' deficit. * * * As reported by the TCR on Aug. 2, 2013, Moody's Investors Service affirmed the rating of YRC Worldwide, Inc., corporate family rating at Caa3. The ratings outlook is has been changed to positive from stable. "The positive ratings outlook recognizes the important progress that YRCW has made in restoring positive operating margins through implementation of yield management initiatives, during a period of stabilizing demand in the less than truckload ('LTL') segment," the report stated. In August 2011, Standard & Poor's Ratings Services raised its corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD' (selective default), after YRC completed a financial restructuring. Outlook is stable. "The ratings on Overland Park, Kan.-based YRCW reflect its participation in the competitive, capital-intensive, and cyclical trucking industry," said Ms. Ogbara, "as well as its meaningful off-balance-sheet contingent obligations related to multiemployer pension plans." "YRCW's substantial market position in the less- than-truckload (LTL) sector, which has fairly high barriers to entry, partially offsets these risk factors. We categorize YRCW's business profile as vulnerable, financial profile as highly leveraged, and liquidity as less than adequate." ZALE CORP: Stockholders Elect Nine Directors -------------------------------------------- Zale Corporation held its annual meeting on Dec. 5, 2013, at which the stockholders elected Neale Attenborough, Yuval Braverman, Terry Burman, David F. Dyer, Kenneth B. Gilman, Theo Killion, John B. Lowe, Jr., Joshua Olshansky and Beth M. Pritchard were elected as directors for terms that will expire at the 2014 annual meeting of stockholders. A proposal to amend the Zale Corporation 2011 Omnibus Incentive Plan was approved. The stockholders approved on a non-binding advisory basis the compensation of the Company's executives and ratified the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending July 31, 2014. 2011 Incentive Plan Amendment The Board of Directors of Zale Corporation approved an amendment to the Zale Corporation 2011 Omnibus Incentive Compensation Plan on Sept. 26, 2013, subject to stockholder approval. The 2011 Omnibus Incentive Plan provides for the grant to officers, employees, and other service providers of the Company and its affiliates of options to purchase shares of the Company's common stock and other awards, which awards may be incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, incentive awards, other stock awards, dividend equivalents and cash awards. The 2011 Omnibus Incentive Plan replaced the Company's 2003 Stock Incentive Plan and the Company's Non-Employee Directors' Equity Compensation. Under the amended 2011 Omnibus Incentive Plan, the maximum aggregate number of shares of Common Stock which may be subject to Awards under the plan is (i) 2,217,270 shares of Common Stock minus (ii) that number of shares of common stock that are represented by awards granted after Sept. 30, 2013. If after Sept. 30, 2013, awards previously granted under the Prior Plans subsequently expire or otherwise lapse, are terminated or forfeited or are settled in cash, or are exchanged, with the permission of the Company's Compensation Committee, for awards (or Awards under the 2011 Omnibus Incentive Plan) not covering shares of common stock, the shares of common stock subject to such awards (or Awards under the 2011 Incentive Plan) will be added to the maximum aggregate number of shares of common stock to which Awards may be subject under the 2011 Omnibus Incentive Plan. In addition, shares that are not issued after Sept. 30, 2013, under the Prior Plans as a result of a net settlement of an award, tendered to pay the exercise or purchase price or withholding taxes relating to an award, or purchased on the open market with the proceeds of the exercise or purchase price of an award, will be available for Awards under the 2011 Omnibus Incentive Plan. About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,695 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ Zale Corporation disclosed net earnings of $10.01 million on $1.88 billion of revenues for the year ended July 31, 2013, as compared with a net loss of $27.31 million on $1.86 billion of revenues for the year ended July 31, 2012. As of Oct. 31, 2013, Zale Corporation had $1.31 billion in total assets, $1.16 billion in total liabilities and $152.95 million in total stockholders' investment. * Overpayment of Spousal Support Held Non-Dischargeable ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a former spouse who received an overpayment of support will find the resulting debt not dischargeable in a Chapter 7 bankruptcy, according to a Dec. 9 opinion by the U.S. Court of Appeals in Denver. According to the report, in divorcing, the wife was awarded $2,500 a month in support for 10 years or until she remarried. After divorce, the husband went to the state matrimonial court saying the former wife was living with a man in a "marriage-like" arrangement. The matrimonial court awarded him about $50,000 for overpayment of support. The former wife then filed bankruptcy. The bankruptcy court ruled that the overpayment represented a debt not discharged under Section 523(a)(15) of the Bankruptcy Code. The lower court also ruled that the debt wasn't discharged under Section 523(a)(5) as a "domestic support obligation." The Tenth Circuit in Denver upheld both conclusions. The debt didn't qualify as a support obligation because it wasn't for support of the former husband. On the other hand, the debt wasn't discharged under subsection (a)(15) because it fell within the plain meaning of a debt to a former spouse as part of a divorce. The wife unsuccessfully argued that the plain meaning rule shouldn't be invoked when the result was contrary to congressional intent. The case is Taylor v. Taylor (In re Taylor), 12-2163, U.S. Tenth Circuit Court of Appeals (Denver). * FDIC OKs Publication Of Strategy for Big Bank Wind-Downs ---------------------------------------------------------- Law360 reported that the Federal Deposit Insurance Corp. on Dec. 10 readied for publication a strategy for taking apart a failed global financial institution as required under the Dodd-Frank Act, saying its plan would hold shareholders, debt holders and "culpable management" accountable for the failure of the firm. According to the report, the FDIC's Board of Directors approved for publication in the Federal Register the so-called Single Point of Entry strategy for the resolution of Systemically Important Financial Institutions. The strategy will be open for public comment for 60 days after publication. * Volcker Rule Challenges Wall Street ------------------------------------- Justin Baer and Julie Steinberg, writing for The Wall Street Journal, reported that a broad new government rule to limit risk- taking by Wall Street will force banks to rethink virtually every aspect of their trading activities, setting the stage for more tumult at the largest U.S. financial institutions. According to the report, the so-called Volcker rule, approved by five financial regulatory agencies on Dec 10, could lop as much as $10 billion total in yearly pretax profit from the eight largest U.S. banks through lower revenue and higher compliance costs, according to estimates from Standard & Poor's. The 953-page edict, part of the 2010 Dodd-Frank financial overhaul, codifies and restricts the way banks trade securities, the report said. It curbs banks' ability to bet with their own capital and forces them to draw bright lines separating trades for clients from trades to limit their risks and so-called proprietary bets. Named for Paul Volcker, the former Federal Reserve chairman, the rule extends the government's reach into Wall Street's most profitable core, the report related. Proprietary trading helped fuel the financial-services industry's climb to dizzying heights in the years leading up to the financial crisis?and created millionaires within the biggest banks. The rule "will help the stability of the broader economy" by restoring trust and confidence in banks, Mr. Volcker told The Wall Street Journal on Dec. 10. * House, Senate Negotiators Reach Budget Deal --------------------------------------------- Lori Montgomery, writing for The Washington Post, reported that House and Senate negotiators unveiled an $85 billion agreement late on Dec. 10 to fund federal agencies through the fall of 2015, averting another government shutdown and ending the cycle of crisis that has paralyzed Washington for much of the past three years. According to the report, in a rare display of bipartisan cooperation, House Budget Committee Chairman Paul Ryan (R-Wis.) stood side by side in the Capitol with Senate Budget Committee Chairman Patty Murray (D-Wash.) to announce the deal, which would cancel half of the sharp spending cuts known as the sequester for the current fiscal year. "I am very proud to stand here today with Chairman Ryan to say that we have broken through the partisanship and gridlock and reached a bipartisan budget compromise," Murray said, calling the agreement "an important step in helping to heal some of the wounds here in Congress and show we can do something without another crisis around the corner," the report cited. Ryan called the agreement "a step in the right direction" that protects the Pentagon from fresh cuts set to hit in January while trimming deficits by more than $20 billion over the next decade, the report related. With the deal already under fire from conservatives for weakening the sequester, Ryan argued that the package represents "a clear improvement on the status quo" by replacing one-time cuts to agency budgets with permanent savings from other programs, the report further related. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Saad Fathi Bankr. C.D. Cal. Case No. 13-38741 Chapter 11 Petition filed December 4, 2013 In re David Barefield Bankr. E.D. Cal. Case No. 13-07523 Chapter 11 Petition filed December 4, 2013 In re Craig Nickelson Bankr. M.D. Fla. Case No. 13-07141 Chapter 11 Petition filed December 4, 2013 In re John Arnold Bankr. N.D. Fla. Case No. 13-50459 Chapter 11 Petition filed December 4, 2013 In re Anthony Graves Bankr. S.D. Ind. Case No. 13-12697 Chapter 11 Petition filed December 4, 2013 In re BKJ Development & Management Co, LLC Bankr. D. Md. Case No. 13-30342 Chapter 11 Petition filed December 4, 2013 See http://bankrupt.com/misc/mdb13-30342.pdf represented by: Randy McRae, Esq. E-mail: rmcrae55@verizon.net In re Sun Carriers, Inc. Bankr. N.D. Tex. Case No. 13-45568 Chapter 11 Petition filed December 4, 2013 See http://bankrupt.com/misc/txnb13-45568.pdf represented by: Marilyn D. Garner, Esq. LAW OFFICES OF MARILYN D. GARNER E-mail: mgarner@marilyndgarner.net In re Donald Smolich Bankr. W.D. Wash. Case No. 13-20548 Chapter 11 Petition filed December 4, 2013 In re Jai Property, LLC Bankr. W.D. Wis. Case No. 13-15797 Chapter 11 Petition filed December 4, 2013 See http://bankrupt.com/misc/wiwb13-15797.pdf represented by: David A. Lange, Esq. KREKELER STROTHER, S.C. E-mail: dlange@ks-lawfirm.com In re Carl Weinstein Bankr. D. Ariz. Case No. 13-20927 Chapter 11 Petition filed December 5, 2013 In re Ingrid Rodriguez Bankr. C.D. Cal. Case No. 13-17575 Chapter 11 Petition filed December 5, 2013 In re D.N.S.A., Inc. Bankr. S.D. Cal. Case No. 13-11745 Chapter 11 Petition filed December 5, 2013 See http://bankrupt.com/misc/casb13-11745.pdf represented by: Quintin G. Shammam, Esq. LAW OFFICES OF QUINTIN G. SHAMMAM E-mail: Quintin@shammamlaw.com In re Kil Lee Bankr. N.D. Ill. Case No. 13-46791 Chapter 11 Petition filed December 5, 2013 In re Erasto Alcantar Bankr. D. Nev. Case No. 13-20138 Chapter 11 Petition filed December 5, 2013 In re 1323 Sutter, LLC Bankr. E.D.N.Y. Case No. 13-47286 Chapter 11 Petition filed December 5, 2013 See http://bankrupt.com/misc/nyeb13-47286.pdf represented by: Narissa A Joseph, Esq. LAW OFFICE OF NARISSA JOSEPH E-mail: njosephlaw@aol.com In re Ultimat Security, Inc. Bankr. E.D.N.Y. Case No. 13-76118 Chapter 11 Petition filed December 5, 2013 See http://bankrupt.com/misc/nyeb13-76118.pdf represented by: Richard V. Kanter, Esq. E-mail: rkanter111@aol.com In re Franklin Valley Associates, LLC Bankr. M.D. Pa. Case No. 13-06216 Chapter 11 Petition filed December 5, 2013 See http://bankrupt.com/misc/pamb13-06216.pdf represented by: John H. Doran, Esq. DORAN & DORAN, P.C. E-mail: jdoran@doran-law.net In re Robert Denne Bankr. W.D. Pa. Case No. 13-25085 Chapter 11 Petition filed December 5, 2013 In re David O'Brien Bankr. N.D. Tex. Case No. 13-36353 Chapter 11 Petition filed December 5, 2013 In re VADA Group, Ltd. dba Hooligan's Bar & Grill Bankr. W.D. Tex. Case No. 13-53335 Chapter 11 Petition filed December 5, 2013 See http://bankrupt.com/misc/txwb13-53335.pdf represented by: David T. Cain, Esq. LAW OFFICE OF DAVID T. CAIN E-mail: caindt@swbell.net In re Phillip Gillette Bankr. S.D. Ala. Case No. 13-04289 Chapter 11 Petition filed December 6, 2013 In re Charlie Brandt Tire, LLC Bankr. D. Ariz. Case No. 13-20952 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/azb13-20952.pdf represented by: Pernell W. Mcguire, Esq. DAVIS MILES MCGUIRE GARDNER, PLLC E-mail: pmcguire@davismiles.com In re PB&J Bryant, Inc. dba Fruit and Salad Company, Inc. Bankr. W.D.N.Y. Case No. 13-21764 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/nywb13-21764.pdf represented by: David S. Stern, Esq. ELLIOTT, STERN, & CALABRESE, LLP E-mail: dstern@phetersonstern.com In re Capitol Waste Transfer, LLC Bankr. E.D.N.C. Case No. 13-07568 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/nceb13-07568.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re Debris Removal Partners, LLC Bankr. E.D.N.C. Case No. 13-07570 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/nceb13-07570.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re Shotwell Transfer Station II, Inc. Bankr. E.D.N.C. Case No. 13-07572 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/nceb13-07572.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re King's Grading, Inc. Bankr. E.D.N.C. Case No. 13-07573 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/nceb13-07573.pdf represented by: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC E-mail: bill@janvierlaw.com In re Pete Enterprises, Inc. Bankr. N.D. Ohio Case No. 13-18480 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/ohnb13-18480.pdf represented by: Richard H. Nemeth, Esq. NEMETH & ASSOCIATES, LLC E-mail: rnemeth@ohbklaw.com In re Dakota Plumbing Service, Inc. Bankr. D. S.D. Case No. 13-30034 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/sdb13-30034.pdf represented by: David J. Fransen, Esq. FRANSEN LAW OFFICE E-mail: fransenlaw@qwestoffice.net In re Orr Contractors & Trucking, LLC Bankr. N.D. Tex. Case No. 13-36355 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/txnb13-36355.pdf represented by: Theda W. Page, Esq. THE PAGE LAW FIRM, P.C. E-mail: theda@pagelawfirm.com In re Samshi Homes, LLC Bankr. S.D. Tex. Case No. 13-37608 Chapter 11 Petition filed December 6, 2013 See http://bankrupt.com/misc/txsb13-37608.pdf represented by: Jack Nicholas Fuerst, Esq. E-mail: jfuerst@sbcglobal.net In re Michael Kennard Bankr. E.D. Wash. Case No. 13-04794 Chapter 11 Petition filed December 6, 2013 In re Dominic Gorniak Bankr. W.D. Wis. Case No. 13-15827 Chapter 11 Petition filed December 6, 2013 In re Agustin Gongora Bankr. D. Ariz. Case No. 13-21017 Chapter 11 Petition filed December 9, 2013 In re Ozan Incorporated Bankr. C.D. Cal. Case No. 13-17606 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/cacb13-17606.pdf represented by: Aurora Talavera, Esq. ALLIED LEGAL GROUP, INC. E-mail: admin@alliedlegalgroup.com In re Nova Group Home, Inc. aka Sober Living at Nova Nova Sober Living Bankr. C.D. Cal. Case No. 13-39003 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/cacb13-39003.pdf represented by: Freddie Fletcher, Esq. LAW OFFICES OF FREDDIE FLETCHER In re Joseph Johnson Bankr. N.D. Cal. Case No. 13-56313 Chapter 11 Petition filed December 9, 2013 In re Camilo Calinawan Bankr. N.D. Cal. Case No. 13-56315 Chapter 11 Petition filed December 9, 2013 In re Green Lakeview Adult Daycare, LLC Bankr. D. Colo. Case No. 13-30160 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/cob13-30160.pdf represented by: Duncan E. Barber, Esq. BIEGING SHAPIRO & BARBER, LLP E-mail: dbarber@bsblawyers.com In re Matthew Autterson Bankr. D. Colo. Case No. 13-30184 Chapter 11 Petition filed December 9, 2013 In re David Benowitz Bankr. D. D.C. Case No. 13-00752 Chapter 11 Petition filed December 9, 2013 In re Michael Blonder Bankr. N.D. Ga. Case No. 13-76658 Chapter 11 Petition filed December 9, 2013 In re Michael Kistler Bankr. S.D. Ga. Case No. 13-42279 Chapter 11 Petition filed December 9, 2013 In re Ultrapure Bottling Systems, LLC Bankr. N.D. Ill. Case No. 13-47159 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/ilnb13-47159.pdf represented by: Bradley H. Foreman, Esq. LAW OFFICES OF BRADLEY H FOREMAN, P.C. E-mail: Brad@BradleyForeman.com In re Bettie Gentry Bankr. W.D. Ky. Case No. 13-11477 Chapter 11 Petition filed December 9, 2013 In re Richard Denchfield Bankr. D. Md. Case No. 13-30634 Chapter 11 Petition filed December 9, 2013 In re Herni Thompson Bankr. D. Nev. Case No. 13-20220 Chapter 11 Petition filed December 9, 2013 In re Juan Aparicio Bankr. D. Nev. Case No. 13-52314 Chapter 11 Petition filed December 9, 2013 In re Driscoll Label Co. Inc. Bankr. D. N.J. Case No. 13-36752 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/njb13-36752.pdf represented by: Vincent Commisa, Esq. E-mail: vcommisa@vdclaw.com In re Mirambica, Inc. dba Royal Lodge Bankr. D.N.J. Case No. 13-36808 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/njb13-36808.pdf represented by: John J. Hutt, Esq. LAW OFFICE OF JOHN J. HUTT E-mail: huttlaw@hotmail.com In re Chidi Nwakile Bankr. S.D.N.Y. Case No. 13-13972 Chapter 11 Petition filed December 9, 2013 In re CAMI, Inc. dba Olympia Beer Store Bankr. W.D. Pa. Case No. 13-25134 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/pawb13-25134.pdf represented by: Robert O. Lampl, Esq. E-mail: rol@lampllaw.com In re Donohoe Corporation dba Kensington Bankr. W.D. Pa. Case No. 13-25137 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/pawb13-25137.pdf represented by: Robert O. Lampl, Esq. E-mail: rol@lampllaw.com In re Comercial Gonzalez Vega, Inc. Bankr. D.P.R. Case No. 13-10226 Chapter 11 Petition filed December 9, 2013 See http://bankrupt.com/misc/prb13-10226.pdf represented by: Madeline Soto Pacheco, Esq. LUBE & SOTO LAW OFFICES, P.S.C. E-mail: lubeysoto@gmail.com In re Alfredo Puchi Bankr. D. Ariz. Case No. 13-21124 Chapter 11 Petition filed December 10, 2013 In re Hairlocs World, Inc. aka Hairlocs Extensions Systems, Inc. Bankr. C.D. Cal. Case No. 13-17637 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/cacb13-17637.pdf represented by: Rene Lopez De Arenosa, Jr., Esq. E-mail: rene_lopez@msn.com In re Central Center, LLC Bankr. W.D. Ky. Case No. 13-11483 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/kywb13-11483.pdf represented by: Scott A. Bachert, Esq. HARNED BACHERT & MCGEHEE, PSC E-mail: bachert@hbmfirm.com In re G & M United, LLC dba Trino's Italian Restaurant Bankr. W.D. Ky. Case No. 13-34795 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/kywb13-34795.pdf represented by: Sandra D. Freeburger, Esq. DEITZ SHIELDS & FREEBURGER, LLP E-mail: sfreeburger@dsf-atty.com In re North American Transportation Components, Inc. dba Import Engine Parts41 Bankr. D. Minn. Case No. 13-45926 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/mnb13-45926.pdf represented by: Mark R. Anfinson, Esq. E-mail: mranfinson@lawyersofminnesota.com In re Christine Porchetta Bankr. D. N.J. Case No. 13-36833 Chapter 11 Petition filed December 10, 2013 In re Cal & Co. Autos, Inc. Bankr. E.D.N.Y. Case No. 13-47354 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/nyeb13-47354.pdf Filed Pro Se In re Rebecca Kelly Bankr. E.D.N.C. Case No. 13-07636 Chapter 11 Petition filed December 10, 2013 In re Handlebar Enterprises, Inc. dba The Handlebar: A Listening Room Bankr. D. S.C. Case No. 13-07327 Chapter 11 Petition filed December 10, 2013 See http://bankrupt.com/misc/scb13-07327.pdf represented by: James E. Sterling, Esq. SMITH JORDAN LAVERY & LEE, P.A. E-mail: sterling@smithjordan.com In re Ruby Robinson Bankr. W.D. Tex. Case No. 13-53359 Chapter 11 Petition filed December 10, 2013 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***