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/raid1/www/Hosts/bankrupt/TCR_Public/140213.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, February 13, 2014, Vol. 18, No. 43 Headlines 1617 WESTCLIFF: Pleadings on Default Interest Issue Due Feb. 28 710 LONG RIDGE: Two Judges Differ on Ending Expired Contracts ALERIS INTERNATIONAL: Moody's Review B1 CFR for Possible Downgrade ALERIS INTERNATIONAL: S&P Puts 'B' CCR on CreditWatch Negative AMERICAN CAPITAL: S&P Rates Proposed $450MM Sr. Secured Debt 'BB-' APTEAN INC: Moody's Assigns B3 Corp Family Rating; Outlook Stable ARAMARK CORP: Moody's Assigns 'B1' Rating on Sr. Secured Loans ARAMARK CORP: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable ARCH CAPITAL: Closes $253-Mil. Buy of U.S. Insurance Companies ASPEN DENTAL: Moody's Rates $370MM Loans 'B2' & Affirms 'B2' CFR ASR CONSTRUCTORS: Rodgers Anderson Approved as Accountant ASR CONSTRUCTORS: Shulman Hodges Approved as Bankruptcy Counsel BANKUNITED FINANCIAL: Asks Supreme Court to Hear Tax Refund Case BARRINGTON BROADCASTING: S&P Withdraws B+ Sr. Secured Debt Rating BELDEN INC: Grass Valley Deal No Impact on Moody's 'Ba1' CFR BRIGHTSTAR CORP: S&P Raises CCR to 'BB' & Removes From CreditWatch BUFFET PARTNERS: Section 341(a) Meeting Scheduled for March 7 C&K MARKET: Amends Schedules of Assets and Liabilities C&K MARKET: Court Okays Otterbourg as Committee's Lead Co-Counsel C&K MARKET: McKittrick Leonard Okayed as Panel's Local Co-Counsel CASA CASUARINA: Disclosure Statement Hearing Today CHA CHA ENTEPRISES: Can Access Cash Collateral Until Feb. 23 CHARTER COMMS: Nominates Candidates for Time Warner Cable Board CHEYENNE HOTELS: Disclosure Statement Approval Hearing on March 6 CHRISTIAN BROTHERS: Modified First Amended Plan Declared Effective CHRISTIAN BROTHERS: March 4 Hearing on Settlement With Arrowood COTT CORP: Shareholder Says Price Could Bubble Up 75% COUNTRYWIDE FIN'L: BofA Should Pay $2.1B in Fraud Case, U.S. Says DANU PROPERTIES: Voluntary Chapter 11 Case Summary DBK INVESTMENTS: Case Summary & 10 Largest Unsecured Creditors DETROIT, MI: Said to Demand New Swaps Deal From BofA, UBS DIGITAL GENERATION: S&P Withdraws B+ CCR After Extreme Reach Deal EDGENET INC: Sues Noteholders Over Security of $20-Mil. Debt ELCOM HOTEL: Ex-Owners Sued Over Unpaid Rental Revenue EMPRESAS INTEREX: Plan Confirmation Order Entered EXCEL MARITIME: Rejection Claims Bar Date Set for Feb. 26 FIAT CHRYSLER: Presses Canada on Windsor, Ontario Factory FIAT S.P.A.: Moody's Lowers CFR to 'B1', Outlook Stable FIBERTECH NETWORKS: Moody's Rates Add-on Sr. Secured Debt 'B2' FREEDOM INDUSTRIES: Tank at Spill Site Had 'Nonhazardous' Contents GALATA CHEMICALS: Artek to Acquire 100% Ownership in Company GGW BRANDS: Girls Gone Wild Settles $6MM Claim Over Flashing Video GLOBAL A&T: Bondholders Sue Firm Over Debt Swap GRAND CENTREVILLE: Wants Plan Filing Extended Until July 31 GLOBAL AVIATION: Court Okays Stipulation on Wells Fargo Aircraft HANGER ROOM: Shuttered Steakhouse Back in Chapter 11 HOUSTON REGIONAL: Judge Won't Stay Ruling Pending Astros Appeal HOWREY LLP: Court Nixes Ch.11 Trustee's Fraudulent Transfer Claims ILLINOIS INSTITUTE: Fitch Affirms 'BB-' Rating on $189.3MM Bonds INDEMNITY INSURANCE: Commish Blasts Doc Request by Units IRISH BANK: Halts Borrower's Suit in Federal District Court INDUSTRIAS AUXILLIARES: Q.E.P. to Acquire U.S. Subsidiary INNOVATIVE COMPOSITES: Files Financials, To Seek Lifting of MCTO IZAKAYA LLC: Case Summary & 20 Largest Unsecured Creditors JAMES RIVER: Has Restructuring Advisers KIDSPEACE CORP: U.S. Trustee Withdraws Case Dismissal Request KIDSPEACE CORP: April 3 Hearing to Confirm Modified Plan KRONOS WORLDWIDE: Upsized Term Loan No Impact on Moody's Ba3 CFR KRONOS WORLDWIDE: S&P Alters Recovery Rating & Affirms 'B+' CCR LA QUINTA HOLDINGS: S&P Gives Prelim. B+ CCR & Rates $2BB Debt BB- LA QUINTA INTERMEDIATE: Moody's Assigns B1 CFR; Outlook Stable LABORATORY PARTNERS: 3 Members Appointed to Creditors' Panel LIANSHENG GROUP: Trust Says Tranche Likely to Default Soon LIGHTSQUARED INC: May File New Restructuring Plan by Friday LOFINO PROPERTIES: Court Okays Wood & Lamping as Trustee's Counsel LONE PINE Implements Canadian Reorganization Plan LOS GATOS HOTEL: April 24 Hearing on 3rd Amended Plan Outline MALLINCKRODT PLC: Moody's Reviews Ba2 CFR for Possible Downgrade MBIA INC: Moody's Affirms 'Ba3' Rating on Senior Unsecured Debt MERCANTILE BANCORP: Exclusive Plan Filing Date Extended to Feb. 24 MERITOR INC.: Moody's Rates New $225MM Sr. Unsecured Notes 'B3' MFM DELAWARE: March 5 Hearing on Disclosure Statement MI PUEBLO: Court Approves Piper Jaffray as Investment Banker MI PUEBLO: Drops GA Keen as Real Estate Advisor MI PUEBLO: May Reject Consulting Contract With Vince Alvarado MOMENTIVE PERFORMANCE: S&P Lowers CCR to 'CCC-'; Outlook Negative NEXEO SOLUTIONS: Moody's Rates $170MM Add-on Term Loan 'B2' NEXEO SOLUTIONS: S&P Assigns 'B+' Rating to Incremental Loan NINE HOMES: Voluntary Chapter 11 Case Summary NNN 123: Plan Exclusivity Period Extended Until March 3 OCEANSIDE MILE: Files Chapter 11 Plan; Hotel Valuation Disputed OCZ TECHNOLOGY: Sells Power Supply Business Assets for $850,000 OCZ TECHNOLOGY: Name Changed to ZCO Liquidating Corporation OPTIM ENERGY: Files for Bankruptcy Protection OSX BRASIL: Seeks to Reach Debt Deal with Bondholders This Week OVERSEAS SHIPHOLDING: Has Court Authority to Outsource Int'l Fleet PENFOLD CAPITAL: OSC Grants Temporary Management Cease Trade Order PERSONAL COMMUNICATIONS: Watchdog Rips Proposed $2.7MM CEO Bonus PHH CORP: CFPB Sues Mortgage Lender over Kickbacks PUNCH TAVERNS: Scraps Doomed Vote on Debt Revamp Q MERGER SUB: Moody's Rates Proposed $305MM Unsecured Notes Caa1 REYNOSO VINEYARDS: Full-Payment Plan Confirmed in December ROTECH HEALTHCARE: Judge Slashes Baker & McKenzie Fee Request ROTECH HEALTHCARE: Equity Committee Fees Cut $300,000 by Judge SABRE GLBL: Moody's Rates New Sr. Secured Debt Due 2019 'B1' SAVIENT PHARMACEUTICALS: Files Plan of Liquidation SEDGWICK INC: Moody's Assigns 'B3' CFR; Outlook Stable SEDGWICK CLAIMS: S&P Affirms 'B' CCR & Removes It From Watch Neg. SEQUOIA VOTING SYSTEMS: Case Summary & 20 Top Unsecured Creditors SHOTWELL LANDFILL: March 25 Hearing on Bid for Trustee or Examiner SP 1064 MADISON: Voluntary Chapter 11 Case Summary SR REAL ESTATE: Foley & Lardner Approved as Bankruptcy Counsel SR REAL ESTATE: Court Denies Motion to Vacate or Stay SARE Order STELERA WIRELESS: Paying Creditors in Full 'Entirely Possible' SURTRONICS INC: William Wade Wants Plan to Address His Concerns TAMPA WAREHOUSE: Court Approves Michael Nash as Accountant TEMBEC INC: S&P Revises Outlook to Positive & Affirms 'CCC+' CCR TREE OF LIFE: Case Summary & Largest Unsecured Creditor VALASSIS COMMUNICATIONS: Moody's Withdraws Ba2 Rating After Deal VANDER INTERMEDIATE: Moody's Rates New $250MM Unsec. Notes 'Caa2' VEYANCE TECHNOLOGIES: Moody's Reviews B2 CFR For Possible Upgrade VEYANCE TECHNOLOGIES: S&P Puts 'B' CCR on CreditWatch Positive VIOLIN MEMORY: Continues to Receive Buyout Offers After IPO * 8th Circuit: Tax Debts Don't Trump Other Claims in Ch. 13 * Ear Ringing False Ad Suit Tossed Over Bankruptcy Snafu * 60% of Bankrupt Californians Blame Medical Debt * Chief Executive Turnover High in January, Report Says * Credit Risk Levels Hit Lowest Levels, S&P Capital IQ Says * NLC Calls on Congress to Avoid Another Fiscal Showdown * Senate's Warren Pushes to Require Board Votes on Banks * President Signs Order for Retirement Accounts * Yellen Pushes Back on Volcker Rule Opponents * Mutual Benefits' Steiner Sentenced to Prison Again * Pacific Oil in Talks to Buy Heavy Oil Wells Out of Bankruptcy * Shareholder Suits Could Decide Fannie and Freddie's Fate * Breakwater Equity Wins M&A Advisor Real Estate Deal of the Year * Former Top SEC Enforcer Returns to Milbank * Private Equity Funds Pour into North American Energy * Recent Small-Dollar & Individual Chapter 11 Filings ********* 1617 WESTCLIFF: Pleadings on Default Interest Issue Due Feb. 28 --------------------------------------------------------------- Judge Mark S. Wallace in December entered an order rejecting the disclosure statement accompanying 1617 Westcliff LLC's proposed Chapter 11 plan. "A motion or claim objection on the default interest issue shall be filed on or before February 28, 2014 so it is properly before the Court for consideration," Judge Wallace said in the order. The judge in his Dec. 17 ruling said that the disclosure statement explaining the Modified First Amended Chapter 11 Plan of Reorganization is materially misleading because it states that the property was sold pursuant to the First Amended Plan. He noted that the Plan was never confirmed by the Court, so it is materially misleading to state the property was sold under a plan. The judge also said the Court will sustain the objections of Wells Fargo Bank, N.A., as trustee, although on different grounds. The disclosure statement fails to discuss Wells Fargo Bank's position that it is entitled to default interest. Wells Fargo's Default Interest In its objection to the approval of the disclosure statement, Wells Fargo Bank, N.A., as trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C3, said the sole remaining issue in the Debtor's Chapter 11 case is a dispute over whether Wells Fargo or the Debtor's insider, Dr. Rettig, is entitled to $630,000 in un-disbursed sales proceeds sitting in escrow following the Court-approved Section 363 sale of the Debtor's real property in September. Wells Fargo says the disputed funds represent contractual, accrued default interest that must be paid to Wells Fargo in satisfaction of its allowed, fully secured claim. The Debtor, in its response, said it proposed a Plan that included a provision that the Debtor would sell the real property asset of the Estate on or before the effective date of the Plan and use the proceeds of that sale to pay all components of Wells Fargo Bank's secured claim excepting only default interest. Pursuant to applicable Ninth Circuit law, that would allow the Debtor to "cure" the claim through the Plan and thereby eliminate the Bank's entitlement to the default interest. The Debtor accordingly marketed the property, located a buyer, sought the Court's approval of the sale, and closed the sale. The Plan proposed the sale as the primary and preferred means of effecting the Debtor's reorganization, and the Debtor's subsequent sale motion referenced the Plan and asserted that the sale was to effect the terms of the Plan. Upon closing, the Debtor did indeed pay to the Bank the undisputed portion of the Bank's claim, comprising principal balance, prepayment premium, late charges, note rate interest, costs, and fees, in the total amount of $7,667,145.09. Pending Plan confirmation, the Debtor segregated the $532,860.31 of default interest as calculated by the Bank -- and, at the Bank's demand -- an additional $100,000 of amounts otherwise payable to the Debtor. "In other words, Debtor did everything right under the Bankruptcy Code and applicable case law to effect cure of the Bank's claim and eliminate the default interest. Yet, ignoring every relevant factual circumstance and event in this case, the Bank claims that the sale was 'outside the context of a Chapter 11 Plan' and complains that Debtor cannot 'bootstrap' the sale of the Property into a Chapter 11 Plan. To the contrary, the Bank cannot rewrite everything that has occurred in this case and escape the consequences of Debtor's hard work and successes in this bankruptcy merely by pretending that a sale -- proposed by a Plan, properly approved by the Court, and effected in contemplation of and in the context of the provisions of a previously filed and pending Plan -- is entirely unrelated to the Debtor's Plan of Reorganization," the Debtor said. About 1617 Westcliff 1617 Westcliff, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-19326) on Aug. 2, 2012, in Santa Ana, California. The Debtor estimated assets of $10 million to $50 million and liabilities of $1 million to $10 million. Bankruptcy Judge Mark S. Wallace oversees the case. Sarah C. Boone, Esq., and D. Edward Hays, Esq., at Marshack Hays LLP, serve as the Debtor's counsel. The Debtor filed a plan of liquidation and disclosure statement on July 1, 2013, seeking to accomplish payment of creditors in full by reorganizing its personal assets and liabilities through the sale of its only substantial asset, a commercial real property commonly known as 1617 Westcliff Drive, in Newport Beach, California. The property, according to court documents, is a mixed use, Class B building mostly occupied by medical office space. It comprises 32,000 square feet of rentable space in a single two-story building situated on approximately 1.56 acres of land in an up-scale commercial district of Newport Beach. 710 LONG RIDGE: Two Judges Differ on Ending Expired Contracts ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that HealthBridge Management LLC, the non-bankrupt manager of five bankrupt Connecticut nursing homes, can terminate union contracts even though they already expired by their terms, U.S. Bankruptcy Judge Donald H. Steckroth from Newark, New Jersey, ruled in a 46-page opinion on Feb. 3. According to the report, in allowing HealthBridge to reduce wages and modify benefits, Judge Steckroth disagreed with U.S. Bankruptcy Judge Robert Drain in New York, who concluded in June 2012 that the power to terminate a collective bargaining agreement ends when the contract expires. The nursing homes went into Chapter 11 in February 2013, blaming financial problems on the union contracts, the report related. The homes had been unable to obtain relief from the contracts despite protracted litigation with the union and the National Labor Relations Board, involving a lawsuit in federal district court in Connecticut and the U.S. Court of Appeals in Manhattan. Judge Steckroth concluded that the homes are entitled to impose new terms of employment because sticking with the contract would result in an immediate liquidation, the report said. He said the "only alternative" was to accept the company's offer, which entailed more than $7 million in concessions over several years. Judge Steckroth said courts are split on the question of whether expired union contract can be terminated using bankruptcy powers, the report further related. He cited decisions like Judge Drain's as adhering to what those courts see as the plain meaning of the statute. About 710 Long Ridge Road Operating Company II 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge Road Operating Company II and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13- 13657) on Feb. 24, 2013, to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., Gerald Gline, Esq., David Bass, Esq., and Ryan T. Jareck, Esq., serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C.'s Robert M. Schechter, Esq., and Rachel Segall, Esq., represents the Official Committee of Unsecured Creditors. The Committee retained EisnerAmper LLP as accountant. Levy Ratner's Suzanne Hepner, Esq., and Ryan J. Barbur, Esq. -- shepner@levyratner.com and Rbarbur@lrbpc.com -- represent the New England Health Care Workers, District 1199 SEIU. Abby Propis Simms, Esq., Julie L. Kaufman, Esq., Nancy E. Kessler Platt, Esq., Dawn L. Goldstein, Esq., Paul Thomas, Esq., and John McGrath, Esq., at the National Labor Relations Board Special Litigation Branch in Washington, D.C., argue for the National Labor Relations Board. ALERIS INTERNATIONAL: Moody's Review B1 CFR for Possible Downgrade ------------------------------------------------------------------ Moody's Investors Service placed Aleris International Inc.'s B1 corporate family rating, B1-PD probability of default rating and B2 senior unsecured secured debt rating under review for possible downgrade. The review follows Aleris' announcement on February 10, 2014 that the company has signed a definitive agreement to acquire Nichols Aluminum, LLC ("Nichols"), a wholly owned subsidiary of Quanex Building Products Corporation, for approximately $110 million in cash. Nichols is a producer of aluminum sheet for the transportation, building and construction, machinery and equipment, consumer durables, and electrical industries in North America. The acquisition includes Nichols' facilities in Iowa, Alabama and Illinois. Ratings Rationale The review for downgrade reflects the uncertainty over the impact of the final terms of the acquisition on Aleris' balance sheet. Given the company's limited cash balances of approximately $71 million at September 30, 2013, we believe that the transaction could potentially be funded entirely or partially with additional debt and likely to result in higher net leverage for the company. The review also reflects Moody's view that Aleris' operating performance will remain challenged by continuing weakness and slow recovery within the company's major end markets, notably the US and Europe. Furthermore, limited availability and high prices of aluminum scrap, a key input for Aleris' products, have weighed down on margins. According to announcements by Quanex, Nichols reported operating losses of $996,000 and $17.1 million in its fiscal years 2013 and 2012, respectively. Therefore, Moody's anticipate that any benefits from the Nichols acquisition, if successfully integrated into Aleris' operations, will require some time to be realized. When taken together with the company's high debt balances, these factors indicate that Aleris' credit metrics will remain weak over the foreseeable time horizon and that a return to credit metrics that are more appropriate for a B1 rating within the medium term has become increasingly unlikely. For the 12 months ending September 30, 2013, key metrics such as debt-to-EBITDA and EBIT- to-interest (including Moody's standard accounting adjustments) were approximately 6.4 times and 0.9 times, respectively -- levels that Moody's has indicated would exert downward pressure on Aleris' ratings. The review will focus on the final terms of the Nichols acquisition, how the transaction will be funded, the level and timing of earnings generation that can be expected from Nichols, and the potential for Aleris to evidence improved performance with respect to volumes, profit margins, and operating and free cash flow generation capability and whether credit metrics over the next 12 to 18 months could improve to and be sustained at levels that are appropriate for a B1 rating. The principal methodology used in this rating was the Global Steel Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Beachwood, Ohio, Aleris International Inc. is a global manufacturer of aluminum products, serving primarily the aerospace, automotive and other transportation industries, building and construction, containers, packaging and metal distribution industries. For the twelve months ended September 30, 2013, Aleris generated revenues of $4.3 billion. The company's shares are majority owned by investment funds managed by Oaktree Capital Management, L.P. (who holds the majority position), affiliates of Apollo Management L.P., and Sankaty Advisors, LLC. ALERIS INTERNATIONAL: S&P Puts 'B' CCR on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B' corporate credit rating on Beachwood, Ohio-based Aleris International Inc. on CreditWatch with negative implications. The CreditWatch placement is based on Aleris' announcement that it signed a definitive agreement to acquire Nichols Aluminum LLC, a wholly owned subsidiary of Quanex Building Products Corp. The company has agreed to pay $110 million in an all-cash transaction. The transaction is expected to close following receipt of customary regulatory approvals. Nichols produces flat-rolled aluminum sheet products across North America and would become part of Aleris' Rolled Products North America segment. "In resolving the CreditWatch, we will evaluate how liquidity and cash flow measures may be affected over the next year," said Standard & Poor's credit analyst Chiza Vitta. "We will consider this alongside various factors, including the contemplated acquisition and the wider operating environment. We expect to resolve the CreditWatch within three months. Likely outcomes include an affirmation of existing ratings or a one-notch downgrade." AMERICAN CAPITAL: S&P Rates Proposed $450MM Sr. Secured Debt 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'BB-' senior secured debt rating on American Capital Ltd.'s (ACAS) proposed $450 million term loan maturing in August 2017. Additionally, S&P is assigning its 'BB-' senior secured debt rating to the company's existing $250 million revolver maturing in August 2016, which S&P expects to remain undrawn. S&P's long-term issuer credit rating on ACAS remains 'BB-'. The outlook is stable. ACAS intends to use the proceeds of the proposed term loan to repay its existing $450 million term loan, which it entered into in August 2012 and amended in August 2013. The proposed refinancing is expected to include changes to the pricing terms to reflect more favorable current market conditions, a one-year maturity date extension to 2017, and a six-month extension of the call protection period for lenders from the effective date. S&P expects the total debt to remain unchanged at $800 million (including the company's $350 million senior unsecured notes due 2018). S&P expects a pro forma debt-to-equity ratio of 0.15x and a debt-to-adjusted total equity ratio of 0.18x as of Dec. 31, 2013, which S&P views as strong compared with most other business development companies S&P rates. The company would realize immaterial--less than $4.0 million--annual interest savings under the proposed new pricing. During 2013, ACAS generated approximately $133 million of revenue from funds management (which primarily is in the form of dividends or fee income), which represented 27% of its total revenue. This percentage is up significantly from 15.9% in 2012 and 8.6% in 2011. ACAS's investment portfolio was $5.1 billion as of Dec. 31, 2013, consisting of a $3.1 billion private finance portfolio (senior and mezzanine debt investments, as well as equity investments in privately held, midmarket companies), a $870 million investment in American Capital Asset Management (ACAM), a $841 million investment in European Capital (ECAS), and $276 million in structured products. S&P raised its counterparty credit and senior secured debt ratings on ACAS to 'BB-' from 'B+' on Aug. 7, 2013, reflecting its view that the firm would continue to improve its business risk profile as a hybrid with both on- balance-sheet investments and increasing fee income from managing third-party funds. RATINGS LIST American Capital Ltd. Counterparty Credit Rating BB-/Stable New Rating American Capital Ltd. $450 mil. senior secured term loan due 2017 BB- $250 mil. senior secured revolver due 2016 BB- APTEAN INC: Moody's Assigns B3 Corp Family Rating; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating to first time issuer Aptean, Inc., B3-PD probability of default rating, B2 ratings to its proposed first lien debt facilities and Caa2 to its proposed second lien facility. The debt is being used to refinance existing debt and fund a dividend to private equity owners, Vista Equity Partners. The ratings outlook is stable. Ratings Rationale The B3 corporate family rating reflects Aptean's high leverage while still in the midst of turning around operations. Leverage at closing is approximately 5.6x based on preliminary December 31, 2013 results, pro forma for the transaction and excluding certain restructuring charges; including the restructuring and related charges, leverage is approximately 7x. The owners are taking out a small dividend and refinancing a Vista guaranteed loan as well as bank debt. Though there are early signs the company is at a transition point in its turnaround, the debt load is considered more characteristic of a B3 rating until sustained evidence of the turnaround materializes. Revenues have declined over the last several years including year over year declines in each of the quarters in 2013. There are early indications of stabilizing however, as the license sales pipeline has increased materially over a similar period last year. Vista has led a significant restructuring of Aptean (which is a combination of the 2012 CDC Software and Consona acquisitions) resulting in a materially lower cost base and significantly improved margins and run-rate EBITDA, though maintenance and license revenue remain well below historic periods. Free cash flow was also weak in 2013 but should improve as restructuring expenditures wind down. The company has developed good niches catering to ERP, CRM and supply chain software needs of small to mid-size discrete manufacturers, food and beverage providers and financial institutions. However, the niches are small and market share data is not available to confirm the strength of their position. The ratings could be upgraded if license and maintenance revenue stabilize and free cash flow (as defined by cash flow from operations less capex) is on track to exceed $30 million annually. The ratings could be downgraded if free cash flow is negative on other than a normal seasonal basis or if leverage exceeds 7.5x while revenues continue to decline. Liquidity is good based on the expectation of $38 million of cash at closing, over $25 million in free cash flow over the next year and an undrawn $25 million revolver. The following ratings were assigned: Assignments: Issuer: Aptean Probability of Default Rating, Assigned B3-PD Corporate Family Rating, Assigned B3 US$25M Senior Secured Bank Credit Facility, Assigned B2, LGD3, 37 % US$315M Senior Secured Bank Credit Facility, Assigned B2, LGD3, 37 % US$100M Second Lien Senior Secured Bank Credit Facility, Assigned Caa2, LGD5, 88 % Outlook, Assigned Stable The principal methodology used in this rating was Global Software Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Aptean is a provider of enterprise software to small to medium sized businesses. The company, headquartered in Atlanta, GA had an estimated $260 million in sales in 2013. ARAMARK CORP: Moody's Assigns 'B1' Rating on Sr. Secured Loans -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to ARAMARK Corporation's proposed senior secured revolving credit facilities due 2019 and term loans due in 2019 and 2021. The ratings on the existing senior secured revolving credit facilities due 2017, term loan C due 2016, and term loan D due 2019 will be withdrawn upon completion of the refinancing. ARAMARK is refinancing its existing senior secured debt to reduce interest expense and extend maturities. Assignments: Issuer: ARAMARK Corporation CAD95 Million Senior Secured Bank Credit Facility due 2021, Assigned B1, LGD3, 45 % GBP115 Million Senior Secured Bank Credit Facility due 2021, Assigned B1, LGD3, 45 % US$2.15 Billion Senior Secured Bank Credit Facility due 2021, Assigned B1, LGD3, 45 % JPY5.042 Billion Senior Secured Bank Credit Facility due 2021, Assigned B1, LGD3, 45 % US$1.4 Billion Senior Secured Bank Credit Facility, due 2019 Assigned B1, LGD3, 45 % US$730 Million Senior Secured Bank Credit Facility, due 2019 Assigned B1, LGD3, 45 % EUR110 Million Senior Secured Bank Credit Facility, due 2021 Assigned B1 , LGD3, 45 % Ratings Rationale "Cash flow will remain close to its pre-IPO levels as the interest savings from both the lower debt balances following the December 2013 IPO and the currently proposed repricing transaction combined approximates expected annual cash dividends to shareholders," said Edmond DeForest, Moody's Senior Analyst. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. ARAMARK is a provider of food and related services to a broad range of institutions and the second largest uniform and career apparel business in the United States. ARAMARK is owned by public shareholders and a consortium of affiliates of private equity sponsors (GS Capital Partners, CCMP Capital Advisors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus) and the company's management team. Moody's expects fiscal 2014 revenue of over $14.4 billion. ARAMARK CORP: S&P Affirms 'BB' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'BBB-' rating to Philadelphia-based ARAMARK Corp.'s proposed up-to-$4.75 billion senior secured credit facilities maturing between 2019 and 2021. The recovery rating on the proposed senior secured credit facilities is '1', indicating that lenders could expect very high (90% to 100%) recovery in the event of a payment default. All of S&P's existing ratings on the company, including the 'BB' corporate credit rating, are unchanged. The outlook is stable. Pro forma for the proposed transaction, total debt outstanding is about $5.7 billion. S&P expects the proceeds from the food and support service operator's proposed credit facilities to be used primarily to repay existing bank debt. The ratings are subject to change and assume the transaction closes on substantially the terms presented to S&P. The ratings on ARAMARK Holdings Corp., the ultimate parent company of ARAMARK Corp., reflect S&P's view that the company will maintain an "aggressive" financial risk profile, including leverage between 4x-5x and the ratio of funds from operations (FFO) to total debt between 12%-20%. S&P expects ARAMARK to exercise more moderate financial policies as a publicly traded company, notwithstanding its majority ownership by a group of private equity firms and the potential for strategic acquisition activity. S&P continues to assess ARAMARK's business risk profile as "satisfactory" based on its leading (though not dominant) position in the competitive and fragmented food and support services market, high proportion of sales generated from customers in economically less-sensitive segments, well-diversified presence across North America, and high client retention rates. RATINGS LIST ARAMARK Corp. ARAMARK Holdings Corp. Corporate Credit Rating BB/Stable/-- New Rating ARAMARK Corp. Senior Secured $680M extended revolver due 2019 BBB- Recovery Rating 1 $1.4B term E loan due 2019 BBB- Recovery Rating 1 $40M nonextended revolver due 2015 BBB- Recovery Rating 1 $2.15B term F loan due 2021 BBB- Recovery Rating 1 JPY5.04B term C loan due 2021 BBB- Recovery Rating 1 ARAMARK Corp. ARAMARK Canada Ltd. $50M CAD revolver due 2019 BBB- Recovery Rating 1 ARAMARK Canada Ltd. Senior Secured CAD95M term C loan due 2021 BBB- Recovery Rating 1 ARAMARK Investments Limited Senior Secured oe115M term C loan due 2021 BBB- Recovery Rating 1 ARAMARK Ireland Holdings Ltd Senior Secured EUR110M term C loan due 2021 BBB- Recovery Rating 1 ARCH CAPITAL: Closes $253-Mil. Buy of U.S. Insurance Companies -------------------------------------------------------------- Law360 reported that U.S. subsidiaries of Arch Capital Group Ltd. have closed on an acquisition of CMG Mortgage Insurance Co. and the mortgage insurance operating platform of PMI Mortgage Insurance Co., the company said. According to the report, the deal enables Arch U.S. MI, an Arch Capital U.S. subsidiary, to enter into the U.S. mortgage insurance marketplace, as well as providing it with mortgage insurance licenses across the U.S., the company said. Under the deal, CMG MI will be renamed "Arch Mortgage Insurance Co.," the report related. ASPEN DENTAL: Moody's Rates $370MM Loans 'B2' & Affirms 'B2' CFR ---------------------------------------------------------------- Moody's Investors Service assigned a B2 (LGD 3, 44%) rating to Aspen Dental Management Inc.'s proposed senior secured credit facilities, including a $40 million senior secured revolving credit facility and a $330 million senior secured term loan B. Aspen's B2 Corporate Family Rating and B2-PD Probability of Default Rating remain unchanged. The rating outlook is stable. The proceeds from the proposed credit facilities will be used primarily to refinance outstanding debt under the company's existing credit facilities, add balance sheet cash, and pay fees and expenses associated with the transaction. Moody's will withdraw the ratings on the existing facility upon closing of the transaction. Moody's expect the refinancing transaction to improve the company's liquidity profile, due to the extension of debt maturities, increased availability under the revolving credit facility, and cash flow savings of roughly $3 million per year due to reduced interest expense. In addition, Moody's expect the transaction to provide greater flexibility and headroom under financial covenants. Aspen Dental Management, Inc.: Ratings assigned: $40 million proposed senior secured revolving credit facility, at B2 (LGD 3, 44%) $330 million proposed senior secured first lien term loan B, at B2 (LGD 3, 44%) Ratings unchanged: Corporate Family Rating, B2 Probability of Default Rating, B2-PD $35 million senior secured revolving credit facility due 2016, B2 (LGD 3, 45%) $320 million senior secured term loan due 2016, B2 (LGD 3, 45%) The rating outlook is stable. The ratings are subject to review of final documentation. Ratings Rationale Aspen's B2 Corporate Family Rating reflects the company's relatively small size, high financial leverage, and weak interest coverage relative to other single-B rated companies. The company's rating is further constrained by its aggressive de novo growth strategy, which Moody's expect will constrain profitability margins and free cash flow. However, the rating is supported by the company's flexibility to reduce de novo growth if necessary, and its ability to then generate positive free cash flow that could be used to reduce debt. The credit profile also benefits from the large population of people that are underserved in terms of access to dental care, which Moody's believe supports Aspen's growth prospects. However, a risk to Aspen's growth profile remains in the company's high proportion of self-pay revenues, as Aspen's patients typically are responsible for a large portion of their bill and rely heavily on third party financing arrangements to pay for services. Aspen is therefore exposed to changes in consumer spending and credit availability trends. The ratings are also constrained by regulatory and legal risks associated with the company's business model, including an outstanding class action complaint filed in October 2012. The stable rating outlook incorporates our expectation that the company's de novo growth strategy will continue to be financed by internally-generated cash flow. The ratings could be downgraded if Aspen were to face an escalation of regulatory or legal risk, including the pending class action complaint. As Moody's views good equity cushion as a key support for the ratings, shareholder friendly initiatives of significance, such as dividends, could also cause the ratings to be downgraded. From a credit metrics perspective, the ratings could be downgraded if adjusted debt to EBITDA were to rise above 6.0 times or free cash flow were to turn negative. An upgrade of the ratings over the near-term is unlikely due to the company's high financial leverage and aggressive financial policies. In addition, Moody's expects Aspen's aggressive de novo growth strategy to constrain free cash flow and debt repayment. However, if over time, the company were to demonstrate stable same store sales growth such that adjusted leverage were to be sustained below 4.0 times and free cash flow to debt were to exceed 10%, Moody's could upgrade the ratings. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in East Syracuse, New York, Aspen Dental Management, Inc. provides business support services to Aspen Dental branded dental practices owned by professional corporations ("PC"). The company is privately-held by PE firms Leonard Green & Partners and Ares Capital. Aspen affiliates with its dentists through two models: the Large Group Practice model and the practice ownership program ("POP"). Under the Large Group Practice model (roughly 50% of offices), dentists are at-will employees of the PCs, where the PCs own the medical records, patient lists, and operating records. Under the POP model (roughly 50% of offices), dentists purchase the medical records from the PC to own their own smaller practice. The company's audited financials do not consolidate the POP practices. As of September 30, 2013, excluding POP offices, the company generated net revenues of approximately $491 million, while the consolidated revenues for all dental offices, including POP offices, was approximately $645 million for the same period. ASR CONSTRUCTORS: Rodgers Anderson Approved as Accountant --------------------------------------------------------- The Bankruptcy Court authorized Another Meridian Company LLC and Inland Machinery, Inc., debtor-affiliates of ASR Constructors, Inc., to employ Rodgers, Anderson, Malody & Scott LLP CPAs as accountant. The Court's Order provides that: 1. On the condition that the firm waives its prepetition claim(s) against the bankruptcy estate of ASR Constructors, the Court finds that the firm holds no interest adverse to the Meridian or Inland or their respective bankruptcy estates, and the Debtors are authorized, pursuant to Bankruptcy Code Sections 327 and 330, and Federal Rule of Bankruptcy Procedure 2014(a), to employ the firm in their bankruptcy cases as their accountant. 2. The Debtors are authorized to place in the firm's trust account, on a monthly basis, 80% of the amount of the firm's monthly fees and 100 percent of the monthly expenses as they are incurred, absent objection within 10 days of the date of service of the monthly professional fee statement. 3. The firm is authorized to withdraw funds which may be received by the firm from the Debtors and held in the firm's client trust account, provided that the firm complies with the provisions of the professional fee statement procedures. As reported in the Troubled Company Reporter on Dec. 30, 2013, Another Meridian and Inland Machinery need Rogers Anderson to: (a) prepare the Debtors' annual federal and state income tax returns and if necessary, assist the Debtor in resolution of tax matters; (b) assist the Debtors in the preparation of quarterly financial statements as necessary in the ordinary course of the Debtors' financial affairs; (c) provide the Debtors with accounting consulting services as necessary in the ordinary course of the Debtors' financial affairs; and (d) perform any and all other accounting, tax and business advice and services incident and necessary as the Debtor may require of the Firm in ordinary course of the Debtors' financial affairs. Rogers Anderson will be paid at these hourly rates: Matthew Wilson $240 Jenny Liu $200 Maya Ivanova $145 Daniel Turner $100 Rogers Anderson will also be reimbursed for reasonable out-of- pocket expenses incurred. Matthew Wilson, member of Rogers Anderson, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About ASR Constructors ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-25794) on Sept. 20, 2013. The petition was signed by Alan Regotti as president. The Debtor disclosed $17,647,556 in assets and $18,901,467 in liabilities as of the Chapter 11 filing. Judge Mark D. Houle presides over the case. Lawyers at Shulman Hodges & Bastian, LLP, led by James C Bastian, Jr., Esq., serve as the Debtor's counsel. ASR CONSTRUCTORS: Shulman Hodges Approved as Bankruptcy Counsel --------------------------------------------------------------- The Bankruptcy Court authorized ASR Constructors Inc., et al., to employ Shulman Hodges & Bastian LLP as general bankruptcy counsel. As reported in the Troubled Company Reported on Dec. 19, 2013, the firm will, among other things, provide these services: 1. advise the Debtors with respect to their rights, powers, duties and obligations as debtors in possession in the administration of their cases, the management of their business affairs and the management of their property. 2. advise and assist the Debtors with respect to compliance with the requirements of the Office of the United States Trustee. 3. advise the Debtors regarding matters of bankruptcy law, including the rights and remedies of the Debtors with respect to its assets and with respect to the claims of creditors. James C. Bastian, Jr., attests that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Attorneys Rates --------- ----- Leonard M. Shulman $525 Ronald S. Hodges $525 James C. Bastian, Jr. $525 Mark Bradshaw $495 J. Ronald Ignatuk $495 John Mark Jennings $495 Gary A. Pemberton $495 Michael J. Petersen $495 Lynda T. Bui $425 Franklin J. Contreras $425 Robert Huttenhoff $425 Paul S. Ocampo $400 Samuel J. Romero $400 Brian L. Bloom $375 Melissa Davis Lowe $375 Kiara W. Gebhart $350 Rika M. Kido $300 Ryan O'Dea $250 Paralegals Rates ---------- ----- Lorre E. Clapp $195 Pamela G. Little $195 Erlanna L. Lohayza $195 Patricia A. Britton $185 Melanie G. Rodgers $185 Steve P. Swartzell $175 Anne Marie Vernon $175 Tammy Walsworth $175 Arland Udo $150 Tonia Mann-Wooten $125 Of Counsel Rates ---------- ----- A. Lavar Taylor $525 Donald R. Kurtz $525 Gregory J. Anderson $450 About ASR Constructors ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-25794) on Sept. 20, 2013. The petition was signed by Alan Regotti as president. The Debtor disclosed $17,647,556 in assets and $18,901,467 in liabilities as of the Chapter 11 filing. Judge Mark D. Houle presides over the case. Lawyers at Shulman Hodges & Bastian, LLP, led by James C Bastian, Jr., Esq., serve as the Debtor's counsel. BANKUNITED FINANCIAL: Asks Supreme Court to Hear Tax Refund Case ---------------------------------------------------------------- Law360 reported that BankUnited Financial Corp. has asked the U.S. Supreme Court to review its case claiming the Eleventh Circuit created an illegal $500 million tax controversy when it ordered the company to forward refunds from a consolidated tax return to the Federal Deposit Insurance Corp. as receiver for distribution to its subsidiaries. According to the report, BankUnited is hoping the high court will review the August decision by the Eleventh Circuit, which reversed a Florida bankruptcy court's decision to allow BankUnited to keep the refunds as assets for its bankruptcy estate. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors that include W.L. Ross & Co., Blackstone Group, Carlyle and Centerbridge. The new owners installed Mr. Kanas as CEO and he sought to revamp BankUnited as a commercial lender in south Florida. BankUnited Financial and its affiliates filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. The banking unit had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The holding company, in its bankruptcy petition, disclosed $37,729,520 in assets against $559,740,185 in debts. Aside from those assets, BankUnited said a "valuable" asset is its $3.6 billion net operating loss carryforward. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120 million and $118.171 million on account of senior notes. The Fourth Amended Joint Plan of Liquidation proposed by the Official Committee of Unsecured Creditors of BankUnited Financial became effective on March 9, 2012. BARRINGTON BROADCASTING: S&P Withdraws B+ Sr. Secured Debt Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all ratings on Barrington Broadcasting LLC at the issuer's request. Sinclair Broadcasting acquired the company, and all debt at Barrington was subsequently repaid in November 2013. RATINGS LIST Ratings Withdrawn To From Barrington Broadcasting LLC Corporate Credit Rating NR B+/Stable/-- Barrington Broadcasting Group LLC Senior Secured NR B+ Recovery Rating NR 3 BELDEN INC: Grass Valley Deal No Impact on Moody's 'Ba1' CFR ------------------------------------------------------------ Moody's says Belden Inc.'s agreement to acquire broadcast equipment provider Grass Valley does not impact its ratings including its Ba1 corporate family rating though leverage levels remain high for the rating. BRIGHTSTAR CORP: S&P Raises CCR to 'BB' & Removes From CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on Miami-based Brightstar Corp. to 'BB' from 'BB-' and removed it from CreditWatch, where S&P had placed it with positive implications on Oct. 21, 2013. The outlook is stable. S&P also raised the issue ratings on Brightstar's senior unsecured debt to 'BB+' from 'B+ (equalizing the ratings on Brightstar's senior unsecured debt with the ratings on SoftBank Corp.'s senior unsecured debt). S&P withdrew its recovery rating on this debt because it do not assign recovery ratings to the debt of Japanese companies. "We base our upgrade primarily on the significant value of SoftBank's ownership position in Brightstar and SoftBank's guarantee of Brightstar's senior unsecured debt," said Standard & Poor's credit analyst Katarzyna Nolan. S&P views Brightstar as "moderately strategic" to SoftBank and it believes it is likely that SoftBank would provide some degree of credit support to Brightstar if necessary. However, S&P do not view Brightstar as a core operation of SoftBank, even though it expects both parties to benefit from an ongoing relationship including distribution and diversified services. S&P views the industry risk as "intermediate" and the country risk as "intermediate". The stable outlook reflects improved pro-forma leverage, following the repayment of all existing preferred stock, which S&P treated as 50% debt. S&P would lower the rating if Brightstar's profitability declines, either because of an unsuccessful business transition following the acquisition by SoftBank, or increased competition resulting in customer churn and pricing pressure such that leverage is sustained above 4.5x. S&P would raise the rating if consistent operating improvement and debt reduction results in FFO to adjusted debt sustained in the 30% area, and adjusted debt to EBITDA sustained below 3x. BUFFET PARTNERS: Section 341(a) Meeting Scheduled for March 7 ------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Buffet Partners, L.P., and Buffet G.P., Inc., will be held on March 7, 2014, at 11:00 a.m. at Dallas, Room 976. Creditors have until June 5, 2014, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Buffet Partners Buffet Partners, L.P ., d/b/a as Furr's Fresh Buffet, together with its affiliate Buffet G.P., Inc., filed Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 14-30699 and 14-30704) on Feb. 4, 2014. The petitions were signed by Barry M. Barron, Sr., chief executive officer of general partner. Buffet Partners, L.P., estimated assets and debts of at least $10 million. Baker & McKenzie LLP serve as the Debtors' counsel. Furr's Fresh Buffet -- http://www.furrs.net-- is a well- recognized, value-oriented restaurant chain with 29 restaurants in Arizona, Arkansas, New Mexico, Oklahoma and Texas. With a rich, 65+ year operating history and strong brand awareness, Furr's operates straight-line and scatter-bar buffet units that feature a wide variety of "all-you-can-eat," "home-cooked," high quality foods served with personalized service at an affordable price. The Company enjoys a unique competitive advantage through its Dynamic Foods division, a fully integrated food processing, manufacturing, warehousing and distribution operation centrally located in Lubbock, Texas, that services Furr's restaurants and a host of external customers. C&K MARKET: Amends Schedules of Assets and Liabilities ------------------------------------------------------ C & K Market, Inc., on Jan. 22 filed with the U.S. Bankruptcy Court for the District of Oregon its first amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property $42,635,000 B. Personal Property $115,061,920 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $37,847,682 E. Creditors Holding Unsecured Priority Claims $1,202,819 F. Creditors Holding Unsecured Non-priority Claims $62,575,980 ------------ ------------ TOTAL $157,696,920 $101,626,481 A copy of the amended schedules is available for free at: http://bankrupt.com/misc/C_KMARKETamendedsal.pdf About C&K Market C&K Market Inc., a 57 year-old grocery store chain, sought bankruptcy protection from creditors with a plan to sell or close some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No. 13-64561). The case is assigned to Judge Frank R. Alley, III. C&K Market scheduled $157,696,921 in total assets and $101,604,234 in total liabilities. The Debtor is represented by Albert N. Kennedy, Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been tapped as chief restructuring officer, and The Food Partners, LLC, serves as the Debtor's financial advisor. Kieckhafer Schiffer & Company LLP serves as advisors and consultants to communicate with lenders, brokers, attorneys and other professionals. Henderson Bennington Moshofsky, P.C., serves as accountants. Watkinson Laird Rubenstein Baldwin & Burgess PC serves as labor counsel. The Debtor hired Great American Group, LLC, to conduct store closing sales. An Official Committee of Unsecured Creditors appointed in the Debtor's case has retained Scott L. Hazan, Esq., David M. Posner, Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada Witt as local co-counsel; and Protiviti, Inc. as financial consultant. C&K Market has filed a Chapter 11 plan and accompanying disclosure statement dated Jan. 31, 2014, which provide that each holder of an allowed general unsecured claim will receive one share of common stock of the reorganized debtor in exchange for each $10 of the holder's allowed general unsecured claim and a subscription right in the event the Debtor elects to consummate a rights offering. The Plan provides for the payment in full on the Effective Date of all Allowed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims and the Allowed Secured Claim of U.S. Bank. The Plan provides for the payment in full over time, with interest, of all other Secured Claims. In general, Secured Creditors with personal property collateral will be paid in 60 equal amortizing payments, with interest at 5%, and Secured Creditors with real property collateral will be paid in 84 equal amortizing payments with interest at 5% based on a 25-year amortization with a balloon payment in seven years. C&K MARKET: Court Okays Otterbourg as Committee's Lead Co-Counsel ----------------------------------------------------------------- The Bankruptcy Court authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of C&K Market, Inc., to retain Otterbourg P.C. as lead co-counsel. The Committee filed a second amended application, wherein it requested entry of an order pursuant to, inter alia, Sections 328 and 1103(a) of the Bankruptcy Code: (i) authorizing the retention of Otterbourg as lead co-counsel to the Committee, effective as of Dec. 3, 2013; and (ii) authorizing Otterbourg to perform for the Committee the advisory services necessary during the Chapter 11 case. As reported in the Troubled Company Reporter on Jan. 9, 2014, Otterbourg will: a. assist and advise the Committee in its consultation with the Debtor relative to the administration of the case; b. attend meetings and negotiate with the representatives of the Debtor and other parties in interest; and c. assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs. Subject to the Court's approval, the Committee has agreed that Otterbourg will be compensated for its services from assets of the estate. The hourly rates charged by Otterbourg, subject to adjustment, are: Partner/Counsel: $595 - $940 Associate: $275 - $645 Paralegal: $250 - $260 The hourly rates charged by the Otterbourg attorneys and paraprofessionals assigned to the engagement, subject to adjustment, are: Scott L. Hazan, partner $940 David M. Posner, partner $835 Jenette A. Barrow-Bosshart, partner $795 Jessica M. Ward, associate $555 Gianfranco Finizio, associate $425 Cathleen A. Pellegrino, paraprofessional $255 Jenette A. Barrow-Bosshart, Esq., assures the Court that the members and associates of Otterbourg do not have any connection with the Debtor, its creditors or any other party-in-interest, or their respective attorneys, that Otterbourg represents no adverse interest to the Committee which would preclude it from acting as counsel to the Committee in matters upon which it is to be engaged. About C&K Market C&K Market Inc., a 57 year-old grocery store chain, sought bankruptcy protection from creditors with a plan to sell or close some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No. 13-64561). The case is assigned to Judge Frank R. Alley, III. C&K Market scheduled $157,696,921 in total assets and $101,604,234 in total liabilities. The Debtor is represented by Albert N. Kennedy, Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been tapped as chief restructuring officer, and The Food Partners, LLC, serves as the Debtor's financial advisor. Kieckhafer Schiffer & Company LLP serves as advisors and consultants to communicate with lenders, brokers, attorneys and other professionals. Henderson Bennington Moshofsky, P.C., serves as accountants. Watkinson Laird Rubenstein Baldwin & Burgess PC serves as labor counsel. The Debtor hired Great American Group, LLC, to conduct store closing sales. An Official Committee of Unsecured Creditors appointed in the Debtor's case has retained Scott L. Hazan, Esq., David M. Posner, Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada Witt as local co-counsel; and Protiviti, Inc. as financial consultant. C&K Market has filed a Chapter 11 plan and accompanying disclosure statement dated Jan. 31, 2014, which provide that each holder of an allowed general unsecured claim will receive one share of common stock of the reorganized debtor in exchange for each $10 of the holder's allowed general unsecured claim and a subscription right in the event the Debtor elects to consummate a rights offering. The Plan provides for the payment in full on the Effective Date of all Allowed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims and the Allowed Secured Claim of U.S. Bank. The Plan provides for the payment in full over time, with interest, of all other Secured Claims. In general, Secured Creditors with personal property collateral will be paid in 60 equal amortizing payments, with interest at 5%, and Secured Creditors with real property collateral will be paid in 84 equal amortizing payments with interest at 5% based on a 25-year amortization with a balloon payment in seven years. C&K MARKET: McKittrick Leonard Okayed as Panel's Local Co-Counsel ----------------------------------------------------------------- The Bankruptcy Court authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of C&K Market Inc., to retain McKittrick Leonard LLP as its local co-counsel. ML LLP is expected to, among other things, assist the Committee in connection with performance of its duties, functions, and obligations in the case, including but not limited to working with the Committee's co-counsel to perform these tasks: a. advise and represent the Committee with respect to its administration of the case; b. review the propriety of liens and claims of creditors and to review the potential avoidability of liens and other transfers; and c. assist the Committee in the analysis of the Debtor's schedules of assets and liabilities, statement of financial affairs, and monthly financial reports and projections. The hourly rates of ML LLP's personnel are: Peter McKittrick $395 Justin Leonard $325 Tonia McCombs $225 Paralegal Support $150 To the best of the Committee's knowledge, ML LLP does not hold or represent any interests adverse to the interests of the estate or of the Debtor. In a declaration filed together with the firm's application, Edward Hostmann, Inc. has been engaged as chief restructuring officer of the Debtor. The partners of McKittrick Leonard LLP in their prior respective firms and now as the firm of ML LLP have been engaged to represent bankruptcy and receivership estates managed by Edward Hostmann, Inc. from time to time, including most recently serving as special conflicts counsel for Edward Hostmann, Inc. in its capacity as Plan Agent under the confirmed Plan of Liquidation in the Lumber Products bankruptcy case. These matters recently concluded. ML LLP also served as lead counsel for the Unsecured Creditors Committee in the Lumber Products bankruptcy case and currently serves as counsel for the Committee under the Plan of Liquidation. Prior to filing of the Debtor's case, the Debtor and its counsel Tonkon Torp LLP contacted ML LLP regarding possible representation of the Debtor's pharmacy affiliate(s). ML LLP's services were not necessary and the firm was not engaged. In the cursory communications discussing potential representation, ML LLP did not receive any confidential information regarding the Debtor or its pharmacy affiliate(s). In a separate filing, a notice was filed that Peter C. McKittrick, Esq., and Justin D. Leonard, Esq., at McKittrick Leonard LLP are substituted as local co-counsel of record for the Committee in place of Tara J. Schleicher of Farleigh Wada Witt. About C&K Market C&K Market Inc., a 57 year-old grocery store chain, sought bankruptcy protection from creditors with a plan to sell or close some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No. 13-64561). The case is assigned to Judge Frank R. Alley, III. C&K Market scheduled $157,696,921 in total assets and $101,604,234 in total liabilities. The Debtor is represented by Albert N. Kennedy, Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been tapped as chief restructuring officer, and The Food Partners, LLC, serves as the Debtor's financial advisor. Kieckhafer Schiffer & Company LLP serves as advisors and consultants to communicate with lenders, brokers, attorneys and other professionals. Henderson Bennington Moshofsky, P.C., serves as accountants. Watkinson Laird Rubenstein Baldwin & Burgess PC serves as labor counsel. The Debtor hired Great American Group, LLC, to conduct store closing sales. An Official Committee of Unsecured Creditors appointed in the Debtor's case has retained Scott L. Hazan, Esq., David M. Posner, Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada Witt as local co-counsel; and Protiviti, Inc. as financial consultant. C&K Market has filed a Chapter 11 plan and accompanying disclosure statement dated Jan. 31, 2014, which provide that each holder of an allowed general unsecured claim will receive one share of common stock of the reorganized debtor in exchange for each $10 of the holder's allowed general unsecured claim and a subscription right in the event the Debtor elects to consummate a rights offering. The Plan provides for the payment in full on the Effective Date of all Allowed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims and the Allowed Secured Claim of U.S. Bank. The Plan provides for the payment in full over time, with interest, of all other Secured Claims. In general, Secured Creditors with personal property collateral will be paid in 60 equal amortizing payments, with interest at 5%, and Secured Creditors with real property collateral will be paid in 84 equal amortizing payments with interest at 5% based on a 25-year amortization with a balloon payment in seven years. CASA CASUARINA: Disclosure Statement Hearing Today -------------------------------------------------- The U.S. Bankruptcy Court will hold a hearing today, Feb. 13, 2014, at 1:30 p.m., to consider approval of the disclosure statement filed in support of Casa Casuarina, LLC's plan of reorganization. The Plan proposes to pay creditors of the Debtor in full on the Effective Date. The Plan provides for one class of priority unsecured claims, one class of secured claims, one class of general unsecured claims; and one class of equity security holders. Unsecured creditors holding allowed claims will receive distributions which pay 100% of their claims. The Plan also provides for the payment of administrative and priority claims. The Debtor owned a property at 1116 Ocean Drive, Miami Beach, Fla., formerly known as the Versace Mansion. Due to various financial and legal issues, the Debtor filed this bankruptcy proceeding. Pursuant to a Court Order, the Property was sold at an auction conducted on September 17, 2013, and a final sale hearing was held on September 18, 2013. On September 25, 2013, the Court entered an order approving the sale to VM South Beach LLC for $41.5 Million. On October 10, 2013, the sale of the Property closed, netting $5,544,173.88 in Net Proceeds which will be used to fund the Plan. As of the Bar Date, there was a total of $11,100 in Class 1 Priority Unsecured claims, $18,000 in Class 2 Secured claims and $10,996,971.91 in Class 3 General Unsecured claims. The vast majority of those amounts, however, include the disputed claim of 1116 Ocean Drive LLC, in the amount of $10,000,000. The Debtor disputes the entitlement of 1116 Ocean Drive LLC to any claim against the Estate, and is entitled to setoff against any amount that might be allowed. Even if the claim is allowed, the Debtor believes the amount claimed is inflated and highly speculative. However, the Debtor believes in good faith that due to (a) 1116 Ocean Drive LLC's own default on the lease; (b) the high burden under Florida law to prove consequential lost profit damages; and (c) the Debtor's right to set off any claim against its own counterclaims for 1116 Ocean Drive LLC's failure to pay more than $1.35 Million in real estate taxes, in no event will the claim be allowed in any amount greater than zero. Based on the total Face Amount of the classified claims, administrative claims, and priority tax claims, the Net Proceeds are more than sufficient to pay the Face Amount of all claims in full, with the exception of the 1116 Ocean Drive LLC claim. So long as the 1116 Ocean Drive LLC claim is allowed in an amount less than approximately $3.5 million, the Debtor will have sufficient funds to pay the Face Value of all claims on the Effective Date. Accordingly, the Debtor submits that all classes are unimpaired and believes that it has sufficient funds to pay all allowed claims on the Effective Date. The effective date of the Plan is 11 business days following the confirmation order. If a stay of the confirmation order is in effect, the effective date will be the first business day after that date on which no stay of the confirmation order is in effect, provided that the confirmation order has not been vacated. A copy of the disclosure statement is available for free at: http://ResearchArchives.com/t/s?77c1 A copy of the plan is available for free at: http://ResearchArchives.com/t/s?77c2 About Casa Casuarina Casa Casuarina, LLC, owner of Gianni Versace's former South Beach mansion on Ocean Drive in Miami Beach, Florida, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at least $10 million. Joe M. Grant, Esq., at Marwill Socarras Grant, P.L., serves as the Debtor's counsel. Until his Ponzi scheme fell apart in 2009, Scott Rothstein had controlled the company that owned the property. Herbert Stettin is the Chapter 11 trustee for Rothstein's law firm Rothstein Rosenfeldt Adler PA, which has been in Chapter 11 liquidation since November 2009. Before Casa Casuarina filed for bankruptcy, Mr. Stettin had reached agreement to settle his claim to partial ownership. In its schedules, the Debtor disclosed $79,005,976.66 in total assets and $32,506,799.29 in total liabilities as of the Petition Date. CHA CHA ENTEPRISES: Can Access Cash Collateral Until Feb. 23 ------------------------------------------------------------ The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California issued a tenth interim order on Jan. 23, authorizing Cha Cha Enterprises, LLC, to use cash collateral of Wells Fargo Bank, N.A., until Feb. 23, 2014. The Court will hold another hearing on Feb. 21, 2014, at 3:15 p.m., at San Jose Courtroom 302, regarding the Debtor's continued use of cash collateral. As reported in the Troubled Company Reporter on Dec. 30, 2013, as adequate protection for the Debtor's use of cash collateral, the Debtor will make these adequate protection payments to the Bank: (1) on Jan. 2, 2014, the amount equal to the sum of (i) the monthly payment of principal and interest at the non- default rate that will be due and owing by the Debtor to the Bank pursuant to (a) the term note dated May 15, 2006, in the original principal amount of $10 million; (b) the term note dated April 1, 2009, in the original principal amount of $3.26 million; (c) the term note dated Jan. 22, 2010, in the original principal amount of $3.37 million; and (d) the term note dated Jan. 22, 2010, in the original principal amount of $1.06 million, each made by the Debtor to the order of the Bank, on that payment date; and (ii) monthly payment required to be paid by the Debtor to the Bank pursuant to the swap documents executed by the Debtor in favor of the Bank for Trade Nos. 89372, 518708, 611495, and 611496, on that payment date; and (2) on the dates and in the amounts specified therein, any further adequate protection payments required to be made pursuant to any further interim cash collateral order. As further adequate protection, the Bank has been granted a valid, non-avoidable, and fully perfected replacement lien in the replacement collateral, or all property of the same type as the prepetition collateral acquired by the Debtor on or after the Petition Date, to secure any diminution in value of any of the prepetition collateral. In addition to the continuation of the replacement lien, the Bank will continue to be entitled to an administrative expense claim with a superpriority status. A copy of the budget is available for free at http://is.gd/q5DX5I About Cha Cha Enterprises Cha Cha Enterprises, LLC, is a California limited liability company formed in 1998 to purchase a fee interest in property located at 1775 Story Road, San Jose, California and a leasehold interest in property located at 1745 Story Road in San Jose. Cha Cha's primary business is the rental of real property. Cha Cha filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53894) on July 22, 2013. The Debtor estimated at least $10 million in assets and liabilities. An affiliate, Mi Pueblo San Jose, Inc., sought Chapter 11 protection (Case No. 13-53893) on the same day. The cases are not jointly administered. Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP serves as counsel. Nicolas De Lancie, Esq., at Jeffer Mangels Butler & Mitchell LLP Robert B. Kaplan, P.C. represents secured creditor Wells Fargo Bank, N.A. CHARTER COMMS: Nominates Candidates for Time Warner Cable Board --------------------------------------------------------------- Shalini Ramachandran and Liz Hoffman, writing for The Wall Street Journal, reported that Charter Communications Inc. nominated a collection of cable-industry veterans, former investment bankers, and other businesspeople as candidates to replace Time Warner Cable Inc.'s board, opening the next phase of its battle for the second-biggest U.S. cable operator. According to the report, the nominations, for Time Warner Cable's entire board, make clear that Charter is willing to go hostile in its efforts, after eight months of trying to draw TWC to the negotiating table. Over that period, TWC has rebuffed as too low three offers from Charter, the fourth-largest cable company by video customers. Charter hopes the nominations will put pressure on Time Warner Cable, which has said that it won't negotiate on any price lower than $160 a share. Charter's latest offer, which it made public in January, was pitched at $132.50 a share. "It is clear from our meetings with Time Warner Cable shareholders that there is an overwhelming desire to combine these two companies," Charter Chief Executive Tom Rutledge in a statement, the report cited. "Now is the time for the current Board and management of Time Warner Cable to respond to their shareholders and work with us to complete a merger." In response, Time Warner Cable Chief Executive Rob Marcus said, "It is clear that Charter is nominating a slate of directors for the sole purpose of pressuring our board into accepting the same lowball offer that it previously considered and unanimously rejected. We are not going to let Charter steal the company," the report also cited. Some Time Warner Cable investors said they were disappointed that Charter hadn't raised its offer, warning it could weaken the momentum of Charter's proxy fight, the report said. Charter is likely to wait a few weeks until later in the proxy fight campaign before bumping the price, a person familiar with the matter has said. Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. The Hon. James M. Peck presided over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, served as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, served as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, was the Debtors' conflicts counsel. Ernst & Young LLP was the Debtors' tax advisors. KPMG LLP was the Debtors' independent auditor. The Debtors' valuation consultants were Duff & Phelps LLC; the Debtors' financial advisors were Lazard Freres & Co. LLC; and the Debtors' restructuring consultants were AlixPartners LLC. The Debtors' regulatory counsel was Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent was Kurtzman Carson Consultants LLC. Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York approved the Debtors' pre-arranged joint plan of reorganization in a bench ruling on Oct. 15, 2009. On Nov. 30, 2009, Charter Communications, Inc., announced that it has successfully completed its financial restructuring, which significantly improves the Company's capital structure by reducing debt by approximately 40 percent, or approximately $8 billion. Charter Communications, Inc., has emerged from Chapter 11 under its pre-arranged Joint Plan of Reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of New York on Nov. 17, 2009. CHEYENNE HOTELS: Disclosure Statement Approval Hearing on March 6 ----------------------------------------------------------------- The Bankruptcy Court in Colorado will hold a hearing on March 6, 2014, at 1:30 p.m., to consider approval of the Disclosure Statement explaining the Chapter 11 Plan of Reorganization filed by Cheyenne Hotels, LLC, dba Hampden Inc. The deadline to file objections to the Disclosure Statement is Feb. 20, 2014. Cheyenne Hotels filed the Plan on Jan. 13, 2014. To fund payments under the Plan, Cheyenne Hotels intends to continue operating its business and make the plan payments out of operating income of the Hotel, with the exception of the payment of the Colorado East Bank & Trust claim within a year of the Effective Date, which will require either (a) sale of an interest in the Hotel or the Debtor; or (b) a new loan. Cheyenne Hotels said the so-called Goforth Creditors have agreed to subordinate the payment of their Claim to a refinancing of the Colorado East Bank & Trust Secured Claim. Cheyenne Hotels said it will not be necessary to pay the Goforth Claims in full at the time the Colorado East Bank & Trust Claim is satisfied. The Debtor said it has evaluated potential avoidance actions. The Debtor expects that the recovery to creditors as proposed under the Plan from ongoing operations will greatly exceed any reasonable recovery that could be obtained from pursuit of the avoidance actions. Under the Plan, the Debtor has two classes of Secured Claims. Class 2-A consists of the Claims of Colorado East Bank & Trust. For purposes of the Disclosure Statement, the Debtor has estimated the gross amount of the Colorado East Bank & Trust claims to total $9,400,000. This estimate is not binding upon Colorado East Bank & Trust or any other party, and is used here solely for estimation purposes. The Debtor believes that the Colorado East Bank & Trust claims are valid claims, with perfected security interests in the Hotel Property and the other Hotel Assets. However, the priority of the lien securing the Colorado East Bank & Trust is disputed, at least in part, by the so-called Goforth Creditors. The Plan provides a single, allowed secured claim in the amount of $8,400,000 to Colorado East Bank & Trust, and provides for no distribution on account of the unsecured portion of the Bank's claims. Class 2-B consists of the Claims of the Goforth Creditors. The Debtor has estimated the gross amount of the Goforth Creditors to total $1,250,000. This estimate is not binding upon the Goforth Creditors or any other party, and is used here solely for estimation purposes. The Debtor believes that the Colorado East Bank & Trust claims are valid claims, with perfected security interests in the Hotel Property and the other Hotel Assets, junior in lien priority to the liens securing the Colorado East Bank & Trust claims, at least to the extent of $8,300,000 of that debt. The Plan provides a single, allowed secured claim in the amount of $500,000 to Goforth Creditors, and provides for no distribution on account of the unsecured portion of their claims. If the Debtor, Colorado East Bank & Trust and the Goforth Creditors are unable to reach an agreement with respect to the amounts of these creditors' claims, the Bankruptcy Court will determine the amount of the claims, after a hearing. The Debtor will endeavor to determine the amount of the Colorado East Bank & Trust and the Goforth Creditors claims prior to voting upon the Plan, such that creditors may assess the effect of the amount of the claim upon the feasibility of the Plan. Pursuant to the Plan, Colorado East Bank & Trust will receive on account of its $8,400,000 allowed claim, three streams of payments: (a) a single payment, in the amount of $100,000 on the Effective Date of the Plan; (b) in equal monthly installments of interest on the unpaid balance of the allowed Secured Claim in the rate of 4.5% per annum, calculated upon a 360 day year; and (c) 60 monthly installments consisting of a portion of the amount -- Net Profits Override -- by which gross revenue received in the preceding month of Hotel operations exceeds the sum of (a) ordinary and necessary operating expenses paid during such month; (b) mandatory payments paid under this Plan; and (c) management fees to TRN Hotel Management. The payments will commence on the first day of the first month following the Effective Date and continuing for 59 months thereafter, or until a total of $1,000,000 has been paid to Colorado East Bank & Trust and the Goforth Creditors, collectively under the Override. The Colorado East Bank & Trust's Class 2-A Claims will be secured by a First Priority Lien upon the Hotel Premises and the Hotel Personalty Collateral. The Debtor will have the right to sell or otherwise dispose of the Hotel Personalty Collateral in the ordinary course of its business, provided that the Debtor will promptly replace any Hotel Personalty Collateral sold or otherwise disposed of with replacement goods of like quality, or as required under the Franchise Agreement. In the event that the Debtor is unable to pay the Allowed Colorado East Bank & Trust Claim in full within one year from the Effective Date of the Plan, the Debtor will, upon request of the Bank, convey the Hotel Property and Hotel Assets to the Bank in satisfaction of the Claim. In that event, the Bank will provide an opportunity for the Goforth Creditors to redeem those assets by paying the amount of the Bank's Claims before foreclosure of the Bank's secured claim. Class 2-B (Goforth Claims) consist of the Allowed Claims Colorado East Bank & Trust in the amount of $500,000. Colorado East Bank & Trust will receive two streams of payments: (a) a single payment, in the amount of $50,000 on the Effective Date of the Plan; (b) in equal monthly installments of interest on the unpaid balance of the allowed Secured Claim in the rate of 4.5% per annum, calculated upon a 360 day year; and (c) 60 monthly installments consisting of a portion of the amount -- Net Profits Override -- by which gross revenue received in the preceding month of Hotel operations exceeds the sum of (a) ordinary and necessary operating expenses paid during such month; (b) mandatory payments paid under this Plan; and (c) management fees to TRN Hotel Management. The payments will commence on the first day of the first month following the Effective Date of the Plan and continuing for 59 months thereafter, or until a total of $1,000,000 has been paid to Colorado East Bank & Trust and the Goforth Creditors, collectively under the Override. The Class 2-B Claims will be secured by a Lien upon Lot 1 of the Hotel Premises and the Hotel Personalty Collateral junior in seniority to the lien securing the Colorado East Bank & Trust Allowed Secured Claim. The Debtor shall have the right to sell or otherwise dispose of the Hotel Personalty Collateral in the ordinary course of its business, provided that Debtor shall promptly replace any Hotel Personalty Collateral sold or otherwise disposed of with replacement goods of like quality, or as required under the Franchise Agreement. In the event the Debtor fails to pay the entire balance of the CEBT Secured Claim on or before the first anniversary date of the Effective Date, in addition to any other remedies available to the Goforth Creditors, the Goforth Creditors may elect, by written notice to the Debtor and CEBT to receive a Deed and Bill of Sale in Lieu of Foreclosure to the Hotel Property and the Hotel Assets. In such event, CEBT will forebear from foreclosure for a period of 90 days. Class 1 consists of Allowed Secured Tax Claims for unpaid, pre- petition personal and real property taxes against property of the Estate. The Class 2-A Claims shall retain the security interest securing such Claim and shall be paid in equal monthly installment of principal and interest amortized over the remaining balance of a five year term commencing on the Petition Date with interest at 8% per annum. The Debtor believes there will be no Allowed Secured Tax Claims upon confirmation and has incorporated a treatment for such claims in the Plan, to avoid the necessity of amendment of the Plan to provide for such claims if they exist. Class 3-A consist of all Allowed Small Unsecured Claims (a) in an amount not exceeding $1,000 per Claim, or (b) if a Claim is an Allowed Claim in excess of $1,000, with respect to which the holder of the claim elects to reduce the amount of the Allowed Claim to $1,000. Claimants holding Class 3-A claims shall receive a single payment equal to the lesser of (a) $800, or (b) 80% of the Allowed Class 3-A Claim. The payment shall be made not later than 90 days following the Effective Date or within 10 days following allowance of the Claim, if the Claim is not allowed as of such payment date. Class 3-B consists of Allowed General Unsecured Claims. Each Class 3-B claimant shall receive six installments commencing on the first day of the third calendar quarter occurring after the Effective Date and continuing on the first day of each of the next five calendar quarters. Each of the payments will equal one-sixth of the Allowed Claim in this class. Class 4 consists of the Allowed Equity Claims of the Members. The Class 4 Claimants shall retain their Equity Interests in the Debtor. A copy of the Disclosure Statement is available at no extra charge at http://bankrupt.com/misc/CHEYENNEHOTELSds.pdf About Cheyenne Hotels Cheyenne Hotels LLC, which owns and operates the Hampton Inn & Suites in Colorado Springs, Colorado, filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-37518) on Nov. 25, 2011. Judge A. Bruce Campbell presides over the case, taking over from Judge Michael E. Romero. Thomas F. Quinn, Esq., at Thomas F. Quinn PC, serves as the Debtor's counsel. Cheyenne Hotels estimated $10 million to $50 million in both assets and debts. The petition was signed by Tanveer Khan, manager. Affiliate Cheyenne Hotel Investments LLC filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011, disclosing assets of $12,912,702 and liabilities of $8,074,325 as of the Petition Date. Thomas F. Quinn, Esq., also represents Hotel Investments. Hotel Investments won confirmation of its own Chapter 11 plan on Aug. 16, 2013. A copy of the Third Amended Plan of Reorganization dated Aug. 5, 2013, is available at no charge at: http://bankrupt.com/misc/CHEYENNEHOTEL_3rdAmdPlan.PDF No committee of creditors or equity security holders has been appointed in the Debtors' cases. As reported by the Troubled Company Reporter on Jan. 6, 2014, the U.S. Trustee for Region 19 is seeking dismissal of the Hotel LLC case. Daniel J. Morse, as Assistant U.S. Trustee, said Cheyenne Hotels has been afforded the protections of the Bankruptcy Code for over two years but has failed to confirm a Chapter 11 Plan. Meanwhile, the bankruptcy estate continues to accrue administrative expenses, including professional fees, which are diminishing the bankruptcy estate. CHRISTIAN BROTHERS: Modified First Amended Plan Declared Effective ------------------------------------------------------------------ The Christian Brothers' Institute, et al., notified the U.S. Bankruptcy Court for the Southern District of New York that the effective date of the Modified First Amended Plan of Reorganization proposed by the Debtors and the Official Committee of Unsecured Creditors occurred on Jan. 28, 2014. The Court also set March 14 as the deadline to file applications for allowance of professional fee claims. On Jan. 13, 2014, the Court entered its order confirming the First Amended Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 20, 2014, all objections, responses, statements, and comments in opposition to the Plan have been resolved or fully and fairly litigated, except for the objection raised by the Corporation of the Catholic Archbishop of Seattle, which the Court rejected. The Archdiocese of Seattle complained that the Plan allows pending litigation to proceed while simultaneously discharging Christian Brothers' liability. The plan, according to Bill Rochelle, the bankruptcy columnist for Bloomberg News, creates a trust for abuse claimants initially funded with $13.4 million from the religious order and $3.2 million from Providence Washington Insurance Co. According to the TCR, the Plan was made possible following an "allocation plan" negotiated with 75% of sexual abuse claimants. The original version of the Joint Chapter 11 Plan was filed Aug. 22, 2013. 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., at Pacific Palisades, Calif., serves as Special Insurance Counsel to the Committee. CHRISTIAN BROTHERS: March 4 Hearing on Settlement With Arrowood --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on March 4, 2014, at 10:00 a.m., to: -- approve a settlement in compromise of claims between The Christian Brothers' Institute, et al., and Arrowood Indemnity Company, pursuant to the confirmed Modified First Amended Joint Plan of Reorganization; -- find that the insurance buyback agreement complies with the Bankruptcy Code and other applicable laws; and -- authorize CBI to sell back to Arrowood various insurance policies or alleged insurance policies issued by Arrowood, together with an other unknown insurance policies that were issued or allegedly issued by Arrowood to CBI or under which CBI is or may claim to be insured, named insured, additional insured, or otherwise entitled to any coverage or benefits under ant such insurance policies pursuant to the terms of the Insurance Buyback agreement. Objections, if any, are due Feb. 25, 2014, at 5:00 p.m. According to Scott S. Marlowitz, Esq., at Tarter Krisnsky & Drogin LLP, on behalf of the Debtors, the salient terms of the insurance buyback agreement are: a) CBI will sell, and Arrowood will purchase, the insurance policies for a purchase price of $350,000 which will be paid to the Trust created pursuant to the debtors' Plan; b) the Debtors and Arrowood will release each other from all claims relating to the insurance policies or any other policy of insurance issue by Arrowood; and c) the insurance buyback agreement is conditioned upon the approval by the Court well as confirmation of a plan which incorporates the insurance buyback agreement and provides for a mechanism to include Arrowood as Settling insurer under the Plan. Prior to the Filing Date, Arrowood issued two commercial general liability insurance policies in favor of CBI. CBI tendered 52 claims asserting damages on account of sexual abuse to Arrowood which CBI believe were covered or potentially covered under the various insurance policies. Arrowood asserted numerous coverage defenses to CBI's tended of the sexual abuse claims. Despite Arrowood's denial of coverage, CBI and Arrowood engaged in lengthy good faith settlement discussions to resolve the dispute, leading to a settlement whereby Arrowood would contribute to the sexual abuse trust created under the Debtors' plan. 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., at Pacific Palisades, Calif., serves as Special Insurance Counsel to the Committee. The Bankruptcy Court on Jan. 13, 2014, entered its order confirming the Modified First Amended Plan of Reorganization co- proposed by the Debtors and the Committee. The Plan was declared effective Jan. 28, 2014. The Plan creates 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 Plan was made possible following an "allocation plan" negotiated with 75% of sexual abuse claimants. COTT CORP: Shareholder Says Price Could Bubble Up 75% ----------------------------------------------------- Sarah Pringle, writing for The Deal, reported that one Cott Corp. shareholder believes the parent company of several soda and non- carbonated drink brands could fetch nearly $1.8 billion if it can find a buyer, even as waning demand for soda, and stiff competition from players including PepsiCo Inc. and Coca-Cola Co., continue to weigh on the private-label beverage maker. "Private label is challenged. Carbonated soft drinks are challenged. [Cott's] customers are challenged," said Jack Murphy, a portfolio manager of Levin Capital Strategies LP, in a phone interview with The Deal. "Taking out the public equity is one option. Cash flow is so significant, there has to be people looking at that option." Levin, a New York-based hedge fund, owns about 5.4% of Cott's outstanding shares, the report said. In response to market speculation that it was undergoing a strategic review, Cott confirmed in a Feb. 5 statement that it had retained Credit Suisse Group to help evaluate alternatives, the report related. Though specific options weren't identified, Murphy said he thinks that if a leveraged buyout transaction were to take place, its equity would be worth significantly more than the $8 or so that Cott's shares are trading for on the New York Stock Exchange under the ticker symbol COT, the report further related. Cott Corporation (Cott), headquartered in Toronto, Ontario, and Tampa, Florida, is one of the world's largest private label and contract manufacturing beverage companies. Cott's product portfolio includes carbonated soft drinks (CSD), clear, still and sparkling flavored waters, juice, juice-based products, bottled waters, energy related drinks, and ready-to-drink teas. Cott's customers include many of the largest national and regional grocery, drugstore, and convenience store chains, and wholesalers. Sales for the twelve months ending September 28, 2013 were approximately $2.1 billion. The Troubled Company Reporter on Dec. 17, 2013, reported that Moody's affirmed Cott Corporation's Corporate Family Rating of B2 and the rating of Cott's Senior Unsecured Notes due 2017 and 2018 at B3 and changed the outlook to stable from positive. Moody's also affirmed Cott's SGL-2 Speculative Grade Liquidity rating and B2-PD Probability of Default rating. COUNTRYWIDE FIN'L: BofA Should Pay $2.1B in Fraud Case, U.S. Says ----------------------------------------------------------------- Phil Milford and Edvard Pettersson, writing for Bloomberg News, reported that Bank of America Corp.'s Countrywide unit should pay the maximum of $2.1 billion in penalties for selling defective mortgage loans to Fannie Mae and Freddie Mac in the run-up to the 2008 financial crisis, the U.S. said. According to the report, U.S. District Judge Jed Rakoff in Manhattan is considering how much to penalize the bank following months of arguments over the size of the civil fine that Charlotte, North Carolina-based Bank of America should pay in the first mortgage-fraud case brought by the U.S. to go trial. The bank has claimed it should have to pay $1.1 million at most. "To punish defendants for their culpability and bad faith, and to deter financial institutions and their executives who would engage in similar fraudulent mortgage schemes, the court should impose the maximum penalty," Manhattan U.S. Attorney Preet Bharara said in a court filing on Jan. 29, the report cited. Countrywide is still a defendant in a securities fraud case brought by the Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, over billions of dollars in residential mortgage-based securities, the report related. Bank of America and Countrywide also face $10 billion in claims by American International Group Inc. over mortgage securities. The U.S. case is U.S. v. Countrywide Financial Corp., 12-cv-01422, U.S. District Court, Southern District of New York (Manhattan). About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. DANU PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Danu Properties, LLC 1630 Epley Road Williamston, MI 48895 Case No.: 14-30322 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court Eastern District of Michigan (Flint) Judge: Hon. Daniel S. Opperman Debtor's Counsel: Susan M. Cook, Esq. LAMBERT, LESER, ISACKSON, COOK & GIUNTA, P.C 916 Washington Avenue, Suite 309 Bay City, MI 48708 Tel: 989-893-3518 Email: smcook@lambertleser.com Total Assets: $1.20 million Total Debts: $1.20 million The petition was signed by James D. Larkin, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. DBK INVESTMENTS: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: DBK Investments and Development Corp. 57 Airport Road Hillsville, VA 24343 Case No.: 14-50033 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court Southern District of West Virginia (Beckley) Judge: Hon. Ronald G. Pearson Debtor's Counsel: Joe M. Supple, Esq. SUPPLE LAW OFFICE, PLLC 801 Viand Street Point Pleasant, WV 25550 Tel: (304) 675-6249 Fax: (304) 675-4372 Email: info@supplelaw.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bettye J. Morehead, secretary. A list of the Debtor's 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/wvsb14-50033.pdf DETROIT, MI: Said to Demand New Swaps Deal From BofA, UBS --------------------------------------------------------- Steven Church, writing for Bloomberg News, reported that Detroit officials gave Bank of America Corp. and UBS AG until the end of Jan. 31 to say how much they would accept to cancel interest-rate swaps that cost city taxpayers about $4 million a month or face a possible lawsuit, a person familiar with the talks said. According to the report, the city and the banks have been trying to negotiate a new deal since a federal judge rejected a proposal to pay the banks $165 million to end the swaps. Should the banks make a low enough offer, the city will keep talking through the weekend in hopes of presenting a new deal to U.S. Bankruptcy Judge Steven Rhodes in Detroit, said the person, who asked not to be identified because the discussions are private. Without a deal, the city will consider taking legal action to have the swaps declared illegal and to prevent the banks from seizing about $4.2 million in casino taxes held in a custodial account, the person said, the report related. The city has paid more than $200 million on the swaps since 2009. Judge Rhodes in January rejected the $165 million proposal, which was a reduction from an earlier agreement to pay $230 million, as "too high a price," the report further related. He advised Detroit to seek better terms. Bill Halldin, a spokesman for Bank of America, declined to comment on the swaps negotiations, the report said. Megan Stinson, a spokeswoman for UBS, didn't immediately return an e-mail seeking comment after regular business hours. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. Daniel M. McDermott, U.S. Trustee for Region 9, on Dec. 23, 2013, appointed five creditors to serve on the Official Committee of Unsecured Creditors. DIGITAL GENERATION: S&P Withdraws B+ CCR After Extreme Reach Deal ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Digital Generation Inc. (including the 'B+' corporate credit rating) as the company completed its spin-off and merger transaction with Extreme Reach Inc. The company used proceeds to repay existing bank debt in its entirety. EDGENET INC: Sues Noteholders Over Security of $20-Mil. Debt ------------------------------------------------------------ Edgenet, Inc., et al., filed a complaint with the U.S. Bankruptcy Court for the District of Delaware to avoid and recover transfers made by the Debtors to or for the benefit of Ernest Han-Ping Wu, individually and in his capacity as representative of former owners of Edgenet who took back $20 million in subordinated promissory notes. The lawsuit stems from the 2004 reverse triangular merger under which Liberty Partners Holdings 44, L.L.C., formed Edgenet Holding Company, which acquired all of the equity interests of Edgenet. At the time of the sale, in addition to the approximately $40 million paid for the equity interests in EdgeNet, certain former owners of EdgeNet also took back $20 million in subordinated promissory notes. To secured the repayment of the Seller Notes, the Debtors pledged certain assets. Subsequent to the execution of the Seller Notes and the Security Agreement, the Owners Representative filed on behalf of the Seller Noteholders a UCC-1 perfecting their collective security interest in and to the Collateral. According to Raymond H. Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware, a UCC-1 financing statement ceases to be effective after five years from its filing date, if within the five-year period a continuation statement is not filed. The Debtors assert that as of Sept. 21, 2009, the 2004 UCC-1 ceased being effective to perfect the security interest granted to the Seller Noteholders. On Oct. 18, 2013, the current owners representative filed a new UCC-1 regarding the Collateral, attempting to re-perfect the security interest granted to the Seller Notes in and to the Collateral. Mr. Lemisch alleges that the transfer effected by the filing of the 2013 UCC-1 was avoidable. As a result of the avoidance of the 2013 UCC, as of the Petition Date, the Seller Noteholders did not hold a perfected security interest in and to the Collateral. Accordingly, the Debtors ask that judgment be entered in their favor finding that the filing of the 2013 UCC-1 is an avoidable transfer pursuant to Section 547 of the Bankruptcy Code; that the 2013 UCC-1 is avoided; that the security interest transferred to the Defendant on Sept. 21, 2004, is unperfected and avoided pursuant to Section 544 of the Bankruptcy Code; that the Claims held by the Defendant and the other Seller Noteholders are not secured by the Debtors' interests in the annual licensing fees or any of the Debtors' assets; and awarding the Debtors the reasonable costs, fees, and expenses incurred in the commencement and prosecution of the adversary proceeding. The Debtors are also represented by Margaret M. Manning, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware; and Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadelphia, Pennsylvania. About Edgenet Inc. Edgenet, Inc., and Edgenet Holding Corp. are providers of cloud- based content and applications that enable companies to sell more products and services with greater ease across multiple channels and devices. Edgenet has three business locations: Waukesha, WI, Brentwood, TN, and its main office in Atlanta, GA. The Company has 80 employees. Edgenet Inc. and Edgenet Holding filed for Chapter 11 bankruptcy protection in Delaware (Lead Case No. 14-10066) on Jan. 14, 2014. Edgenet Inc. estimated assets of at least $10 million and liabilities of $100 million to $500 million. Raymond Howard Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware, serves as counsel to the Debtors; Glass Ratner Advisory & Capital Group LLC is the financial advisor; JMP Securities, LLC, is the investment banker, and Phase Eleven Consultants, LLC, is the claims and noticing agent. ELCOM HOTEL: Ex-Owners Sued Over Unpaid Rental Revenue ------------------------------------------------------ Law360 reported that 40 unit owners at five-star Miami hotel and condominium development One Bal Harbour sued the former owners on claims the former owners failed to pay them their share of nearly $5 million in revenue from rentals of their units. According to the report, the suit, filed in Florida state court following the Jan. 24 confirmation of a Chapter 11 plan for the property, brings claims of gross negligence and breach of fiduciary duty, among others, against Thomas Sullivan and Jorge Arevalo, principals of the One Bal Harbour hotel's former owners. About Elcom Hotel Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel disclosed $10,378,304 in assets and $20,010,226 in liabilities as of the Chapter 11 filing. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. Corali Lopexz-Castro, Esq., of Kozyak Tropin & Throckmorton, P.A., represent the Debtors as bankruptcy counsel. Duane Morris LLP is the special litigation, real estate, and hospitality counsel. Algon Capital, LLC, d/b/a Algon Group's Troy Taylor is the Debtors' chief restructuring officer. Barry E. Mukamal and Marcum, LLP, serve as accountants and financial advisors. The Barthet Firm is the special litigation collections counsel. Barry E. Somerstein and Greenspoon Marder Law serve as special real estate counsel. Elcom Hotel & Spa and Elcom Condominium have submitted a revised disclosure statement filed in conjunction with the proposed liquidating plan. The revised disclosure statement indicates that unsecured creditors are still divided into two classes under the Plan. The Plan contemplates that holders of general unsecured claims (expected to total $14 million to $79.1 million) will have a recovery of 0% to 18%, which will be funded from the pro rata distribution of "net free cash" and proceeds of causes of action and remaining assets. Holders of general unsecured vendor claims (estimated at $500,000 to $971,000) -- those vendors who have unsecured claims who agree to continue do business with the Debtors -- will have a recovery of 50%, which will be funded from the 50% distribution from "net free cash." In December 2013, the Florida bankruptcy judge signed off on a $13.4 million sale of the building's common areas to the homeowners' association. U.S. Bankruptcy Judge Robert A. Mark approved the result of the auction in which the One Bal Harbour residential association beat out an entity owned by Thomas Sullivan, who is the largest shareholder of Elcom Hotel, and stalking horse bidder Stoneleigh Capital LLC. Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, confirmed on Jan. 24, 2014, the Revised First Amended Joint Plan of Liquidation of Elcom Hotel after determining that the Plan satisfies the confirmation requirements laid out in the Bankruptcy Code. EMPRESAS INTEREX: Plan Confirmation Order Entered ------------------------------------------------- Judge Mildred Caban Flores in December entered an order confirming the Chapter 11 plan of Empresas Interex Inc. Under the Plan, the Debtor's residential housing development known as Ciudad Atlantis, Hato Abajo Ward, Arecibo, Puerto Rico, will be transferred to secured creditor DF Services, LLC. General unsecured creditors are slated to recover 50%. United Surety & Indemnity Company, which asserts payment of $79,000, filed an objection to confirmation. A copy of the confirmation order is available for free at http://bankrupt.com/misc/Empresas_Plan_Order.pdf About Empresas Interex Inc. San Juan, Puerto Rico-based Empresas Interex Inc. is engaged in the development, construction, and lease of real estate. One of the Debtor's construction project is known as Ciudad Atlantis at Hato Bajo Ward, Arecibo, Puerto Rico. Empresas Interex filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 11-10475) on Dec. 7, 2011. Bankruptcy Judge Mildred Caban Flores presides over the case. The company disclosed $11,412,500 in assets and $9,335,561 in liabilities. The Debtor is represented by Charles A. Cuprill P.S.C. Law Offices. EXCEL MARITIME: Rejection Claims Bar Date Set for Feb. 26 --------------------------------------------------------- Excel Maritime Carriers Ltd. on Jan. 27 disclosed that the United States Bankruptcy Court for the Southern District of New York confirmed the Amended Joint Chapter 11 Plan of Reorganization, which has the support of the Company's senior secured lenders and unsecured creditors. The Plan was unanimously accepted by Excel's two voting classes, with 100% of the class of secured lenders and approximately 92% of the class of impaired Excel general unsecured creditors, by value, voting in favor. Excel expects to emerge from Chapter 11 in mid-February 2014. Upon completion of the restructuring process, the Company's total prepetition debt of $920 million will be reduced to approximately $300 million. Gabriel Panayotides, Chairman of the Board, together with the other members of Excel's management team, will continue to lead the Company. All proofs of claim arising from the rejection of executory contracts or unexpired leases that have been rejected pursuant to the Plan are due Feb. 26, 2014. A full-text copy of the Amended Joint Plan dated Jan. 23, 2014, is available at http://bankrupt.com/misc/EXCELMARITIMEplan0123.pdf 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 Jay M. Goffman, Esq., Mark A. McDermott, Esq., Shana E. Elberg, Esq., and Suzanne D.T. Lovett, Esq,. at 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. John J. Monaghan, Esq., at Holland & Knight LLP, serves as counsel to the Steering Committee. Roberston Maritime Investors LLC is represented by Hugh Ray, Esq., at McKool Smith. Oaktree Capital Management and certain of its affiliates are represented by Alan W. Kornberg, Esq., and Elizabeth R. McColm, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP. FIAT CHRYSLER: Presses Canada on Windsor, Ontario Factory --------------------------------------------------------- Christina Rogers and Paul Vieira, writing for The Wall Street Journal, reported that Fiat Chrysler Automobiles is pressing Canada for subsidies to keep production at a minivan factory in Windsor, Ontario, a move that underscores the clout global auto makers wield when bargaining with governments eager for manufacturing jobs. Fiat Chrysler is seeking as much as 700 million Canadian dollars ($634 million) from the federal and Ontario governments, the Journal said, citing a report in Toronto's Globe and Mail, far more than what other auto makers have received in the past. It is looking to invest at least $2 billion to retool the factory to build the next-generation Chrysler minivan and wants assistance to secure the more than 4,600 jobs there and for upgrades at a Brampton, Ont., factory, where the auto maker now makes the Chrysler 300 and Dodge Charger, the report related. On Feb. 12, Canada's Finance Minister Jim Flaherty said the company is making "substantial" demands, but didn't specify an amount, the report further related. A Chrysler spokesman declined to comment. "We need to make sure we are careful in what we do before we let one of the large auto manufacturers leave Ontario," Mr. Flaherty said, the report cited. He said policy makers would give the requests "a long hard look," adding auto production is a "fundamental" part of Canada's economy. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with US$4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. The Troubled Company Reporter reported on Jan. 22, 2014, that Fiat completed its deal to purchase the 41% that it did not already own of Chrysler. The new holding company, called Fiat Chrysler Automobiles NV, will control the operations of Italy's Fiat and No. 3 U.S. auto maker Chrysler and will be based in the Netherlands, with a U.K. tax domicile and a New York stock listing. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. FIAT S.P.A.: Moody's Lowers CFR to 'B1', Outlook Stable ------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating (CFR) and the probability of default rating (PDR) of Fiat S.p.A. to B1 from Ba3 and to B1-PD from Ba3-PD, respectively. Concurrently, Moody's has downgraded to B2 from B1 the debt issued by Fiat's rated subsidiaries, Fiat Finance and Trade Ltd. S.A. and Fiat Finance North America Inc., as well as Fiat Finance Canada Ltd.'s (P)B2 rating. Additionally, all (P)NP ratings have been confirmed. The outlook on all ratings has been changed to stable from negative. This rating action concludes the review for downgrade initiated on January 7, 2014. "Moody's have downgraded Fiat's ratings following its weaker-than- expected performance in fiscal year 2013 and our view that the company faces significant challenges in terms of achieving its outlook guidance for the current fiscal year, " says Falk Frey, a Moody's Senior Vice President and lead analyst for Fiat. "Moody's are also concerned that Fiat may not be able to offset any further profitability deterioration in its Latin American operation through anticipated improvements in other regions and in its Luxury and Performance division," Mr. Frey added. The action also considers the EUR1.27 billion cash outflow in connection with the company's 100% ownership of Chrysler Group LLC (B1 stable). Ratings rationale -- Downgrade of CFR and PDR to B1 and B1-pd, respectively -- The ratings action reflects Fiat's weaker-than-expected financial performance in 2013 fiscal year. The company reported net revenues of EUR86.8 billion and a trading profit of EUR3.4 billion for fiscal year 2013, which fell slightly short of its guidance range of EUR3.5-3.8 billion and compares unfavourably with revenues and trading profit in fiscal year 2012 of EUR84.0 billion and EUR3.5 billion, respectively. Excluding Chrysler, Fiat generated revenues of EUR35.6 billion in fiscal year 2013, which is on a par with its fiscal 2012 results, and a trading profit of EUR246 million, which represents a significant drop compared with EUR338 million in the previous fiscal year. While the Fiat Group's consolidated cash flow from operating activities net of capital expenditure (capex) was slightly positive (EUR79 million) in fiscal year 2013, the reported cash flow from operating activities net of capex for Fiat (excluding Chrysler) was a negative EUR1.6 billion compared with a negative EUR2.8 billion in fiscal year 2012 partly driven by a positive working capital inflow of EUR1.1 billion in fiscal year 2013 compared with an outflow of EUR0.6 billion in fiscal year 2012. Fiat's (ex Chrysler) net industrial debt increased to nearly EUR6.9 billion at 31 December 2013 from EUR5.0 billion in the previous fiscal year. Fiat's guidance for fiscal year-end 2014 is for consolidated net industrial debt in the range of EUR9.8-10.3 billion. This includes an amount of EUR2.7 billion in relation to the Q1 2014 acquisition of the remaining Chrysler stake as well as a EUR0.3 billion IFRS 11 adjustment. Consequently, the Fiat Group expects negative operational cash flow of between EUR0.1-0.6 billion for fiscal 2014. Moody's understands that, on a standalone basis, Chrysler is anticipating positive free cash flow (FCF) from operating activities for fiscal year 2014 in the USD0.5-1.0 billion range. This will result in anticipated cash consumption for Fiat (excluding Chrysler) of up to EUR1.0 billion. Moody's believes that it will be challenging for Fiat to meet its targets for fiscal year 2014, given the profitability deterioration in Latin America, the weakening local currencies and rising competitive pressure in the Brazilian car market. Given that Fiat bondholders will be unable to fully access Chrysler's on balance sheet cash and the cash flow it generates, Moody's intends to maintain separate CFRs for Chrysler and Fiat for the time being. However, it is likely that these would merge over time to the extent that the financing arrangements of the two entities converge. Fiat's B1 rating negatively reflects (1) constraints on the company's access to the cash and cash flows of Chrysler and Moody's expectation that this situation is unlikely to change in the short term (e.g., within the existing covenant limits in the bond and loan documentation of Chrysler, dividend payouts are limited to 50% of the net income basket, while intercompany lending to Fiat is feasible with the only limitation that it has to be done on an arm's length basis); (2) the weak standalone credit metrics of Fiat as evidenced by an estimated Moody's- adjusted debt/EBITDA of around 10.3x and reported negative free cash flow of EUR1.5 billion for fiscal year 2013 with limited improvement likely in fiscal year 2014; (3) Fiat's (excluding Chrysler) high reliance on the European passenger car market, particularly in its Italian home market, which represents approximately half of Fiat's European car registrations; (4) rising price pressures and rebates in Europe; (5) rapidly eroding profitability in Latin America (mainly Brazil) driven by increasing competition, additional capacities, high price pressure and the weakness of the Latin American exchange rates against the euro; (6) the group's significant overcapacities in Italy with no immediate plan for further capacity adjustment, with Fiat planning to utilize EMEA production base to develop its global brands (Alfa Romeo, Maserati, Jeep and the Fiat 500 "family"); and (7) the risk that the delay in model renewals and the absence of any major new volume model launch in 2014 might further derail Fiat's competitive position in Europe. On the positive side, Fiat's rating also takes into account (1) the inclusion of Chrysler, which has helped to improve Fiat's previously very limited geographic diversification and potential cost savings from increasing operational integration between Fiat and Chrysler (e.g., common architecture, modules and technologies as well as purchasing and world class manufacturing); (2) a strong and growing profit contribution from Fiat's Luxury and Performance division (namely, Maserati and Ferrari), which is driven by a widening product offering; (3) its leading market position in Brazil (with an approximate market share of 21.5% in 2013), which has been the group's major source of profits and cash flows in recent years; and (4) a dominant domestic Italian market presence, with a market share of approximately 29%. However, sovereign austerity programmes and the debt crisis' adverse impact on the Italian economy could continue to negatively affect car demand in the group's key market. Rationale For Stable Outlook The stable outlook reflects Moody's expectations that (1) Fiat (excluding Chrysler) would be able to limit negative operating FCF to below EUR1.5 billion in fiscal year 2014; (2) Fiat's losses in Europe, the Middle East and Africa from its mass market brands can be further reduced in the current year towards breakeven levels anticipated to be achieved in mid-decade; (3) Maserati's model expansion programme will further increase profits from the Luxury and Performance division; (4) consolidated negative FCF will be limited to around EUR1.0 billion. Furthermore, the stable outlook anticipates that profitability deterioration in Fiat's Latin American operations can be offset by improving performance from other regions and in its Luxury and Performance division. A weakening performance at Chrysler could also put pressure on Fiat's ratings. Liquidity As of December 31, 2013, Fiat's liquidity profile on a standalone basis was deemed adequate, after the approximately EUR1.27 billion cash outflow for the acquisition of the remaining membership interests in Chrysler in the first quarter of 2014. As of December 31, 2013, the Fiat Group (excluding Chrysler) reported EUR9.8 billion in cash and marketable securities in the industrial business, as well as an undrawn EUR2.1 billion revolving credit facility maturing in July 2016, which contains conditionality language in the form of financial covenants with significant headroom. These funding sources should cover Fiat's anticipated cash requirements over the next 12-18 months, which comprise capex, debt maturities, cash for day-to-day needs and minority dividends. Structural Considerations The senior unsecured notes issued by Fiat's treasuries -- Fiat Finance & Trade, Fiat Finance North America and Fiat Finance Canada, with the latter not currently having any notes outstanding -- are structurally subordinated to a significant portion of liabilities located at Fiat's operating subsidiaries (mainly trade payables), with a preferred claim on the cash flows at these entities. Consequently, the ratings of Fiat's outstanding bonds are currently one notch below the group's CFR, according to Moody's Loss Given Default Methodology. What Could Change The Ratings Down/Up Moody's could downgrade Fiat's ratings if the company failed to limit its standalone negative net industrial free cash flow to EUR1.5 billion in fiscal year 2014, with no indication of a material improvement in fiscal year 2015. The rating could also come under downward pressure if (1) Fiat was to lose significant market share in Europe; and/or (2) the company's earnings and cash flow contribution from its Brazilian operations, a major source of cash flow, were to decline to an extent that it cannot be offset by anticipated improvements in its other regions and its Luxury and Performance division. Negative pressure could also develop if the Chrysler product renewal programme was to stall as evidenced by the group's inability to generate a trading profit of around EUR3.0 billion on a consolidated basis. Upward pressure on Fiat's rating could come if Fiat standalone would be able to achieve positive FCF exceeding EUR1.0 billion that will be used to reduce debt and, on a consolidated basis, could generate significantly more than EUR4.0 billion in trading profit in fiscal year 2014, with visibility of further improvements in 2015 and beyond. Principal Methodologies The principal methodology used in these ratings was the Global Automobile Manufacturer Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Torino, Italy, Fiat S.p.A. is one of Italy's leading industrial groups and one of Europe's largest automotive manufacturers by unit sales. Fiat S.p.A. who owns 100% of Chrysler (B1 stable), generated consolidated group net revenues of EUR86.8 billion and reported a trading profit of EUR3.4 billion in the fiscal year 2013. FIBERTECH NETWORKS: Moody's Rates Add-on Sr. Secured Debt 'B2' -------------------------------------------------------------- Moody's Investors Service rated Fibertech Networks, LLC's new add- on senior secured bank credit facility B2. At the same time, the company's corporate family rating (CFR) and probability of default rating (PDR) were affirmed at B2 and B2-PD, respectively. The ratings on the existing senior secured bank credit facility were also affirmed at B2. Fibertech's ratings outlook continues to be stable. The proceeds from the new $135 million add-on term loan to the existing senior secured credit facility, comprised of a $50 million revolving term loan a $380 million term loan B, together with cash on hand, will fund a special dividend of $159 million. Although the dividend recapitalization is credit negative, since pro-forma leverage will be about 4.7x (on Moody's fully adjusted basis), which is approximately the same as prevailed a year ago when Fibertech competed a dividend recapitalization to fund a $159 million special dividend, the transaction is neutral to Fibertech's ratings. Accordingly, the CFR and PDR were affirmed and the new add-on term loan was rated at the same B2 level as the existing facility. Fibertech de-levered through EBITDA expansion over the past years, and Moody's expects this pattern of de- leveraging and periodic re-leveraging through special dividends to continue with leverage hovering around the low-to-mid-4x range. Assignments: Issuer: Fibertech Networks, LLC Senior Secured Bank Credit Facility, Assigned B2 (LGD3, 49%) Other rating and outlook actions: Issuer: Fibertech Holdings Corp. Corporate Family Rating, Affirmed at B2 Probability of Default Rating, Affirmed at B2-PD Outlook, Maintained at Stable Senior Secured Bank Credit Facility, Affirmed at B2 (LGD3, 49%) Ratings Rationale Fibertech's B2 corporate family rating primarily reflects the company's very small aggregate scale, relatively weak free cash flow resulting from aggressive growth, and the related likelihood of debt increasing to fund shareholder returns. Fibertech's track record of success in developing short haul fiber networks and the sustainability of the business are positive considerations. So too is the good revenue visibility via a solid backlog supported by long term contracts with a diverse group of counter-parties. Rating Outlook The outlook is stable because Moody's expects Fibertech to maintain leverage in the low-to-mid-4 range through a combination of EBITDA growth coupled with more debt to fund expansion and dividends to its private equity owner. What Could Change the Rating - UP Moody's would consider an upgrade if TD/EBITDA was expected to be sustained below 4x. A rating upgrade would also involve assurance of solid liquidity arrangements and positive industry fundamentals. What Could Change the Rating - DOWN Moody's would consider a ratings downgrade if TD/EBITDA was expected to be in excess of 5.0x, once again, on a sustained basis. Any of a debt-financed acquisition (of more than nominal size), adverse liquidity developments, or deteriorating industry fundamentals could also cause downwards rating pressure. Company Profile Fibertech Networks, LLC (Fibertech) is a wholly-owned privately held subsidiary of Fibertech Holdings Corp. (Holdings), a holding company that owns all of the equity in companies that comprise Fibertech Networks, a Rochester, New York-headquartered builder/operator of last mile fiber optic networks in mid-size cities in the Eastern and Central United States. Holdings guarantees Fibertech's credit facilities and financial statements are issued Holdings' name. Holdings is owned by Court Square Capital Partners, a financial investor. The principal methodology used in this rating was the Global Communications Infrastructure Rating Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. FREEDOM INDUSTRIES: Tank at Spill Site Had 'Nonhazardous' Contents ------------------------------------------------------------------ Kris Maher, writing for Daily Bankruptcy Review, reported that a private inspection of a chemical-storage facility three months before a spill there contaminated the water supply found that tanks at the site fell short of fully complying with federal standards, a federal official said on Feb. 10. But the particular tank that leaked an estimated 10,000 gallons of a coal-processing chemical blend called Crude MCHM into the Elk River wasn't examined during the review because the substance was considered "nonhazardous," Rafael Moure-Eraso, head of the U.S. Chemical Safety Board, said at a congressional hearing held in West Virginia's capital, the report related. About Freedom Industries Freedom Industries Inc., the company connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. The Debtor estimated assets and debt of $1 million to $10 million. The petition was signed by Gary Southern, president. GALATA CHEMICALS: Artek to Acquire 100% Ownership in Company ------------------------------------------------------------ Artek Surfin and Aterian Investment Partners, currently joint owners of Galata Chemicals, have reached a definitive agreement whereby Artek Surfin will acquire Aterian's shares in Galata Chemicals. The transaction is expected to close in March. The company will continue to operate as it does today with the current organization in place. "Over the past four years, Aterian and Artek have successfully partnered with the Galata Chemicals organization to build a leader in PVC Additives with a global footprint and an expanded portfolio of innovative products," said Steven McKeown, President and COO of Galata Chemicals. "We are thankful for Aterian's significant contribution to the turnaround and growth of Galata Chemicals and look forward to continue to partner with Artek as we enter the next phase of our growth strategy." Michael Fieldstone, partner at Aterian, added "It has been a pleasure to partner with Artek and the dedicated and talented Galata management team in the Company's successful reinvigoration and new product development efforts. We are thrilled by the outcome and look forward to watching Artek and the Company in its continued success." "We are extremely excited about the growth opportunities Galata's business has and are committed to growing this business, including the addition of manufacturing assets in Asia," said Vishal Goenka. "To get to where Galata is today would not have been possible without a great partner in Aterian and the enthusiasm of TEAM GALATA." Galata Chemicals Galata Chemicals is a leading global producer of plastics additives including mixed metal heat stabilizers, organotin heat stabilizers, epoxidized soybean oil, polymer modifiers, tin catalysts and bio-based plasticizers. Additional information concerning Galata is available at www.galatachemicals.com. Artek Artek Surfin Chemicals and its group company Sterling Auxiliaries are one of the largest specialty chemical companies in India, focusing on surfactants, alkyl alkanol amines, textile chemicals, metal finishing and other specialty chemical sectors. Artek has substantial experience developing and operating chemical plants and distributing and marketing specialty chemical products internationally. Aterian Investment Partners Aterian Investment Partners ("Aterian") is an operationally- focused middle market private equity firm focused on investing in businesses that are financially or operationally challenged, yet strategically viable with well-defined reasons to exist. Aterian invests in turnarounds, distressed situations, restructurings, carve-outs, underperformers or other complex investment situations in middle market companies generating $25 million to $500 million of revenue. After making an investment, Aterian, in partnership with portfolio company management teams, seeks to relentlessly focus on the critical growth, cost and liquidity initiatives of a business in an effort to drive value creation. The Aterian principals have extensive professional experience having collectively worked on over 100 transactions representing over $1.25 billion of invested equity as well as $6.5 billion of debt financings. CONTACT: Yaquelin Abreu info@galatachemicals.com +1 (203) 236-9002 GGW BRANDS: Girls Gone Wild Settles $6MM Claim Over Flashing Video ------------------------------------------------------------------ Law360 reported that a trustee for adult entertainment company GGW Brands LLC asked a California bankruptcy judge to approve a settlement that will allow a Missouri woman who was involuntarily filmed exposing her breasts and featured in a pornographic video to enter a claim to collect the majority of a $5.8 million debt she is owed by affiliated companies. According to the report, as part of the proposed deal, Tamara Favazza has agreed to reduce her claim against GGW and the estates of its subsidiaries, GGW Marketing LLC, GGW Events LLC, among others. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. GGW Marketing, LLC, GGW Brands' affiliate, filed a voluntary Chapter 11 petition on May 22, 2013, before the United States Bankruptcy Court Central District Of California (Los Angeles). The case is assigned Case No.: 13-23452. Martin R. Barash, Esq., and Matthew Heyn, Esq., at Klee, Tuchin, Bogdanoff and Stern, LLP, in Los Angeles, California, represent GGW Marketing. GLOBAL A&T: Bondholders Sue Firm Over Debt Swap ----------------------------------------------- Fiona Law, writing for The Wall Street Journal, reported that bondholders angered by a complex debt swap of a TPG Capital-backed Singaporean semiconductor company are taking legal action to push for a reversal of the transaction. According to the report, investors including Blackstone Group LP and hedge fund giant Farallon Capital Management LLC are jointly suing Global A&T Electronics Ltd. GATE's bond price plunged as much as 32% after a September debt swap, which drew a rating cut from Moody's. Lowenstein Sandler, a U.S.-based law firm appointed by an investor group holding half of the US$625 million in bonds issued by GATE early last year, filed with the Supreme Court of the state of New York on Feb. 10 to sue GATE, as well as private equity giants TPG and Equity Partners, who own the company, the report related. According to the court filing, GATE has breached the contract, the report further related. It calls for the debt swap to be undone and bondholders to be compensated. GATE spokeswoman Josephine Lim said the exchange was in full compliance with all agreements. The dispute was sparked when the company issued senior bonds in September to pay off a loan ranked as junior and lower down on the capital structure, the report further related. But holders of senior debt sold in January say the September offering dilutes their holdings as more junior creditors now have "leapfrogged" up the company's debt structure and have the same claim to assets as they do, should there be a default. GRAND CENTREVILLE: Wants Plan Filing Extended Until July 31 ----------------------------------------------------------- Grand Centreville, LLC, filed a second request, asking the U.S. Bankruptcy Court for the Eastern District of Virginia to extend its exclusive periods to file a Chapter 11 Plan until July 31, 2014, and solicit acceptances for that Plan until Sept. 29. The Court, in an order dated Jan. 22, extended the Debtor's exclusive filing period until Feb. 13; and solicitation period until April 14. The Debtor relates that Black Creek Consulting, Ltd., the receiver, has been working diligently to manage the Debtor, preserve the value for its creditors and equity ownership, and develop a plan to efficiently and effectively accomplish the same. 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. GLOBAL AVIATION: Court Okays Stipulation on Wells Fargo Aircraft ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a stipulation between Global Aviation Holdings Inc., et al., and Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as trustee, extending the period under Section 1110 of the Bankruptcy Code. On Jan. 11, 2014, North American Airlines, Inc., and Wells Fargo, as Aircraft Creditor or Lessor, stipulated that in consideration of the agreement by the Aircraft Creditor to extend the Section 1110 Period, and as consideration for the Lessee's use of the Aircraft Equipment during the Section 1110 Period and the Extension Period, the Lessee will: i) make monthly rent payments to the Aircraft Creditor based on the amounts set forth in the parties' Term Sheet; ii) two business days after Court approval of this stipulation, pay to the Aircraft Creditor the Section 1110 Period Payment; and iii) comply with the other terms of this stipulation and the Aircraft Agreements, as modified during the Extended Section 1110 Period by the stipulation including the Term Sheet. The stipulation will terminate (i) three business days after receipt by the Aircraft Creditor of written notice from the Lessee explicitly terminating the stipulation and rejecting the Aircraft Agreements; or (ii) upon receipt by the Lessee of written notice from the Aircraft Creditor of the occurrence of a stipulation default and specifying the Aircraft Creditor's intent to terminate the stipulation, unless such stipulation default is cured, if capable of being cured, within a three-business day period or if the stipulation default is an event of default under the Aircraft Agreements as modified by the stipulation, then within the period specified in the Aircraft Agreements. A copy of the stipulation is available for free at: http://bankrupt.com/misc/GlobalAviation_stipulation.pdf About Global Aviation Holdings Global Aviation Holdings Inc. -- http://www.glah.com-- the parent company of North American Airlines and World Airways, sought Chapter 11 bankruptcy protection on Nov. 12, 2013. 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 a prior Chapter 11 reorganization in February 2013. 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 2013 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. In the 2013 case, 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. HANGER ROOM: Shuttered Steakhouse Back in Chapter 11 ---------------------------------------------------- The Hanger Room, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case No. 14-30460) on Feb. 7, 2014, listing under $1 million in both assets and liabilities. The case was filed pro se, meaning the paperworks were filed without bankruptcy counsel. A copy of the petition is available at no extra charge at http://bankrupt.com/misc/mnb14-30460.pdf Nick Halter, writing for Minneapolis / St. Paul Business Journal, reported that last Friday's filing was Hanger Room's second in five months. Business Journal noted that Nick Miller, owner of shuttered steakhouse, is waging a legal battle with the restaurant's creditors, who claim the once-acclaimed eatery owes them $1.25 million. The alleged debts are much higher than the $105,000 that was reported in 2012, when owner Mr. Miller told patrons on Facebook he was reorganizing and would reopen the steakhouse. According to Business Journal, the trustee for the creditors alleges in a Feb. 10 filing that Hanger Room is using the legal system to stall the repayment of creditors. According to Business Journal, U.S. Trustee Michael McDermott is asking the Bankruptcy Court to dismiss the case or convert it into a Chapter 7 case, which would force Hanger Room to liquidate its assets to pay its creditors. The U.S. Trustee said Hanger Room "out of business, has no income, has no employees and has no funds with which to to recommence operations." Hanger Room filed for Chapter 11 in October, but that case was dismissed by U.S. Bankruptcy Judge Katherine Constantine on Jan. 22. HOUSTON REGIONAL: Judge Won't Stay Ruling Pending Astros Appeal --------------------------------------------------------------- Bankruptcy Judge Marvin Isgur on Tuesday denied the request of the Houston Astros to stay the enforcement of his order formally placing Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet Houston, under Chapter 11 bankruptcy protection. The Astros have taken an appeal from Judge Isgur's ruling, and asked the Bankruptcy Court for a stay pending appeal. The Houston Chronicle said the U.S. District Judge Lynn Hughes will oversee the appeal and could require several weeks to rule. "These teams are important to our community," Judge Isgur said Tueday, according to David Barron, writing for the Houston Chronicle. "Putting a stay in place means that we are going to keep these programs off TV longer, and I think the community that I live in wants to have to have them on TV faster. That's what everybody has told me." Harry Perrin, Esq., represents Astros owner Jim Crane. Comcast is represented by Craig Goldblatt, Esq. The Houston Rockets basketball club has agreed with Comcast that the network should stay under Chapter 11 supervision. Alan Gover, Esq., represents the Rockets. 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. HOWREY LLP: Court Nixes Ch.11 Trustee's Fraudulent Transfer Claims ------------------------------------------------------------------ Allan B. Diamond, Chapter 11 Trustee for defunct law firm Howrey LLP, filed multiple nearly identical complaints for avoidance and recovery of actual and constructive fraudulent transfers and for an accounting and turnover and other relief, seeking to recover from several law firm defendants the value of profits received by them with respect to unfinished business that previously had been handled by the Debtor. The Chapter 11 Trustee contends that a prepetition waiver of the Debtor's interest in profits realized or to be realized from its unfinished business constituted a fraudulent transfer. On Oct. 23, 2013, the court held a hearing on motions to dismiss filed by nine of these defendants. In a Feb. 7, 2014 Memorandum Decision available at http://is.gd/xvB8ddfrom Leagle.com, Bankruptcy Judge Dennis Montali said he will grant the motions, in part, and deny them, in part, although the Chapter 11 Trustee will be given leave to amend the complaints in some respects, to state claims against the Defendants other than under the fraudulent transfer theories. Judge Montali directed counsel for the Chapter 11 Trustee to prepare and circulate among the defendants forms of orders granting and denying the various motions, consistent with the Court's Memorandum Decision as applied to the circumstances of each defendant. Those orders, the judge said, should permit leave to amend the complaint to seek an accounting (not a fraudulent transfer recovery) based upon Howrey Unfinished Business that went with partners who left the Debtor prior to dissolution. The amended complaints should be filed and served no later than 30 days following entry of the specific orders granting the particular defendant's motion. The court will hold a continued status conference in the six adversary proceedings on March 25, 2014, at 9:30 a.m. By the time of the Oct. 23 hearing, three defendants had settled, leaving for argument and decision motions in these six adversary proceedings: * 13-3056 (Haynes & Boone LLP); * 13-3057 (Neal, Gerber & Eisenberg LLP); * 13-3060 (Kasowitz Benson Torres & Friedman LLP); * 13-3093 (Jones Day LLP); * 13-3094 (Hogan Lovells US); and * 13-3095 (Pillsbury Winthrop Shaw Pittman LLP). Three defendants initially filed separate motions to dismiss, then joined with three others in a joint motion to dismiss. Three other defendants filed separate motions to dismiss. The six adversary proceedings have not been consolidated. The Court's Memorandum Decision is being filed in each of the six adversary proceedings, with changes only in the caption. Orders disposing of the motions will be separately filed in each of those six actions. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Cal. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd Loden, Esq., at Diamond McCarthy LLP as counsel. ILLINOIS INSTITUTE: Fitch Affirms 'BB-' Rating on $189.3MM Bonds ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' rating on approximately $189.3 million of outstanding Illinois Finance Authority revenue bonds issued on behalf of Illinois Institute of Technology (IIT, or the institute). The Rating Outlook is Stable. SECURITY Revenue bonds are a general obligation of IIT. Additionally, IIT's series 2009 revenue bonds are secured by a cash-funded debt service reserve. KEY RATING DRIVERS OPERATING IMPROVEMENT MAINTAINED: In fiscal 2013, IIT continued its recent trend of recording positive operating results, as the institute had a 0.3% GAAP-based operating margin (including endowment distribution). While this is below the fiscal 2012 margin of positive 1.6%, it is IIT's second consecutive gain following several years of operating deficits. MANAGEABLE DEBT BURDEN: Improved operations have enabled IIT to cover pro forma maximum annual debt service (MADS) from net operating income by over 1.5x for each of the past three fiscal years; 1.6x in fiscal 2013. Moreover, its debt burden remains manageable, with MADS consuming a moderate 6.1% of fiscal 2013 unrestricted operating revenues. WEAK, BUT IMPROVING FINANCIAL CUSHION: IIT's balance sheet cushion remains weak, characterized by limited balance sheet resources relative to operations and debt. However, growth in available funds, driven in part by favorable investment returns and ongoing, planned reductions in its annual endowment draw resulted in improved liquidity metrics for fiscal 2013. STEADY STUDENT DEMAND: The institute has a solid track record of generating stable student demand over the past several years, with growth in undergraduate enrollment offsetting recent softening in graduate program demand, notably law; which Fitch notes is consistent with national trends. RATING SENSITIVITIES SUSTAINED OPERATING IMPROVEMENT: Sustained improvement in IIT's operating performance driven by recently favorable undergraduate and graduate enrollment trends could yield upward rating pressure. BALANCE SHEET CUSHION: Despite a still weak balance sheet cushion, steady improvement in liquidity metrics, coupled with annual breakeven to positive operating results, could provide further rating momentum. CREDIT PROFILE IIT is a private, technical engineering institute established in 1940. Located in Chicago, Illinois, IIT operates five campuses in the Chicagoland marketplace with its main campus located four miles from downtown Chicago. Fall 2013 headcount of 7,850 students and full-time equivalent (FTE) enrollment of 7,423 are up 2.2% and 3%, respectively, from fall 2012. Growth in undergraduate enrollment had offset softening in graduate program demand over the past few years, although graduate enrollment ticked up again in fall 2013. However, IIT's law school, which makes up about 13% of total enrollment, continues to experience enrollment declines, which Fitch notes is consistent with national trends. To date, management notes that undergraduate and graduate applications for fall 2014 are trending favorably to the prior year, indicating continued overall enrollment stability going into fiscal 2015. Operating Improvement Maintained IIT maintained its recent operating improvement in fiscal 2013, posting a positive 0.3% operating margin. While this is just above breakeven and below the prior year's level, it is IIT's second consecutive year with an operating surplus following several years of deficits. Operating stability continued to be driven by management's multi-year financial turnaround plan that has focused on various cost containment and revenue enhancement initiatives. Similar to many other private institutions, IIT's largest revenue source is student-generated revenue (57.3% of fiscal 2013 operating revenues), although it also benefits from grant and contract revenues which provide a modest level of revenue diversity. Operating losses from prior years led IIT to rely more heavily on its endowment and to draw in excess of its stated endowment payout policy. However, the expense controls and revenue enhancement initiatives implemented over the past few fiscal years enabled IIT to annually reduce its endowment payout, with no excess draw needed since fiscal 2011; a factor viewed favorably by Fitch. Its total endowment draw declined to $10.7 million in fiscal 2013 from $13 million in fiscal 2012 and $15.6 million in fiscal 2011. The fiscal 2014 draw is similar to the fiscal 2013 level at about $11.1 million, which is in line with the institute's 5% spending policy and considered a sustainable level by Fitch. Management's continued focus on conservative budgeting and financial planning are anticipated to yield another breakeven to slightly positive result for fiscal 2014. Based on unaudited interim results as of Dec. 31, 2013 and favorable enrollment patterns, Fitch believes management's budget assumptions are realistic. Maintenance of at least a breakeven level of operating performance coupled with balance sheet liquidity remaining at or above current levels, could result in upward rating potential. While IIT's participation in the U.S. Department of Education's (DOE) Student Financial Assistance (SFA) programs remains on provisional status, it was relieved of additional procedural and reporting requirements in 2013. This follows its release in 2012 from a requirement to post a letter of credit supporting a portion of its annual SFA volume, both of which Fitch views positively and indicates IIT's operating improvement. Based on its financial performance to date, IIT anticipates the provisional status will be lifted following the close of fiscal 2014; which would mark the third consecutive year of meeting DOE financial metric thresholds. Fitch will continue to monitor IIT's status, but believes its expectations are reasonable based on recent enrollment trends and operating results. Importantly, Fitch notes that IIT's provisional status has not adversely impacted demand or students access to federal aid. Manageable Debt Burden IIT's debt burden remains manageable, with MADS of approximately $16.2 million (fiscal 2024) consuming a moderate 6.1% of fiscal 2013 unrestricted operating revenues of $266.5 million (including endowment distribution). MADS includes about $1.5 million of debt service associated with IIT's research subsidiary, IITRI, that is non-recourse to the institute. IIT's lack of additional debt plans should serve to keep its debt burden manageable going forward. Moreover, as a result of its improved operating performance, IIT produced MADS coverage from net operating income of over 1.5x for each of the past three fiscal years; 1.6x in fiscal 2013. Fitch notes that IIT's leverage metrics as measured by burden and coverage compare favorably to those of other private colleges and universities similarly rated by Fitch. Weak, But Improving Financial Cushion One of Fitch's key credit concerns remains IIT's weak balance sheet cushion. However, despite fluctuating over the past few years, available funds (defined as cash and investments not permanently restricted) improved to $26.8 million as of May 31, 2013 from negative $2.3 million as of May 31, 2012. While available funds still only covered fiscal 2013 expenses and outstanding debt by a very low 10.1% and 12.4%, respectively, these metrics are the highest recorded in several years. Available funds improved further to $28.9 million as of Dec. 31, 2013 (unaudited). IIT's ongoing fundraising campaign raised approximately $150 million to date towards its $250 million goal. Of the amount raised, about two-thirds have been collected. The campaign runs through 2016. A portion of campaign proceeds are expected to augment IIT's endowment, as well as fund certain capital expenditures. This should alleviate the need for any additional borrowing, which is viewed positively as Fitch does not believe IIT has any further debt capacity at the current rating level. INDEMNITY INSURANCE: Commish Blasts Doc Request by Units -------------------------------------------------------- Law360 reported that Delaware Insurance Commissioner Karen Weldin Stewart said that a request by bankrupt affiliates of nightclub insurer Indemnity Insurance Corp. RRG to gain access to records from the company's offices is an attempted "end run" around the receivership ordered by the chancery court. According to the report, in a preliminary objection before the Delaware bankruptcy court, Stewart argues that any document request should be made before the state's chancery court, which is overseeing IIC's state rehabilitation proceedings. IRISH BANK: Halts Borrower's Suit in Federal District Court ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Judge Christopher Sontchi in the U.S. Bankruptcy Court in Delaware enjoined the lawsuit filed by a borrower named John Flynn against Irish Bank Resolution Corp. Ltd. According to the report, the lawsuit, filed two days later after IBRC received bankruptcy protection in a New York federal court, alleged that IBRC's predecessor banks committed fraud. Kieran Wallace and Eamonn Richardson, the foreign representatives of IBRC, responded by filing papers in Judge Sontchi's court in late December seeking to have the New York case enjoined. Judge Sontchi ruled that the Irish company was likely to win by establishing that Flynn's New York suit was barred by IBRC's Chapter 15 protection in the U.S., the report related. The report also related that Flynn had a lawsuit on file against IBRC and a predecessor bank when the Chapter 15 case began. Judge Sontchi halted that suit in December. Flynn's new lawsuit attempted to avoid the Chapter 15 injunction by not naming the IBRC as a defendant, Mr. Rochelle pointed out. IBRC's foreign representatives are defendants, and they are claimed by Flynn to have committed bankruptcy fraud. About Irish Bank Resolution Irish Bank Resolution Corp., the liquidation vehicle for what was once one of Ireland's largest banks, filed a Chapter 15 petition (Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. Irish Bank Resolution sought assistance from the U.S. court in liquidating Anglo Irish Bank Corp. and Irish Nationwide Building Society. The two banks failed and were merged into IBRC in July 2011. IBRC is tasked with winding them down and liquidating their assets. In February, when Irish lawmakers adopted the Irish Bank Resolution Corp., IBRC was placed into a special liquidation in the Irish High Court to complete liquidation and distribution of the two banks' assets. IBRC's principal asset as of June 2012 was a loan portfolio valued at some EUR25 billion (US$33.5 billion). About 70 percent of the loans were to Irish borrowers. Some 5 percent of the portfolio was under U.S. law, according to a court filing. Total liabilities in June 2012 were about EUR50 billion, according to a court filing. Most assets in the U.S. have been sold already. IBRC is involved in lawsuits in the U.S. IBRC was granted protection under Chapter 15 of the U.S. Bankruptcy Code in December 2013. INDUSTRIAS AUXILLIARES: Q.E.P. to Acquire U.S. Subsidiary --------------------------------------------------------- Q.E.P. CO., INC. on Feb. 11 announced its intent to purchase Faus Group, Inc. ("Faus USA"). Faus USA manufactures premium laminate flooring and accessories. Faus USA is a wholly-owned subsidiary of Industrias Auxilliares Faus, S.L.U. ("Faus Spain") a Spanish company that is in bankruptcy. The Spanish bankruptcy court has approved the Company entering into a stock purchase agreement to acquire all of the capital stock of Faus USA and certain intellectual property rights held by Faus Spain, subject to a period for review of the proposed transaction by the creditors of Faus Spain. The Company currently expects the transaction to be completed before the end of February 2014, although the possibility exists that the transaction will not be successfully completed or that the closing may be delayed. The Company will provide additional information when the transaction is completed. Industrias Auxiliares Faus, S.L.U. -- http://www.fausgroup.com/-- designs, develops, manufactures, and supplies laminate flooring for commercial and residential use in Spain and internationally. The company offers wood, stone, and ceramic floors, as well as moldings. It also provides melamine products, laminate products, machined components, doors, wall and ceiling coverings, and self assembly kits. The company was founded in 1953 and is based in Gandia, Spain. It has facilities in Europe, Asia, and the United States. INNOVATIVE COMPOSITES: Files Financials, To Seek Lifting of MCTO ---------------------------------------------------------------- Innovative Composites International Inc. on Feb. 11 announced the filing of its audited annual financial statements for the year ended September 30, 2013, the related management's discussion and analysis, and Chief Executive Officer and Chief Financial Officer certificates for this period. On January 24, 2014, the Corporation announced that it was applying to the Ontario Securities Commission for a management cease trade order (the "MCTO"), which was granted on February 7, 2014, for failing to file the Required Filings before the January 28, 2014 filing deadline, but with the expectation that such filing would occur by February 11, 2014. Once the Ontario Securities Commission has reviewed the Required Filings, it is expected that the MCTO will be lifted. In accordance with the provisions of the alternative information guidelines specified by National Policy 12-203, the Corporation reports that since the January 24, 2014 announcement there have not been any other material changes to the information contained therein, nor any failure by the Corporation to fulfill its intentions as stated therein with respect to satisfying the provisions of the alternative information guidelines, and there are no additional defaults, other than the delay in filing the Required Filings. There is no additional material information respecting the Corporation and its affairs that has not been generally disclosed and there are no insolvency proceedings against the Corporation as of the date hereof. About Innovative Composites International Inc. Headquartered in Toronto, Canada, Innovative Composites International Inc. -- http://www.innovativecompositesinc.com-- is a high-tech engineering and manufacturing company whose goal is to utilize its proprietary "green" composite materials and building systems to provide innovative, engineered product solutions to markets that include automotive and transportation, shelters and containers, construction and housing, and industrial applications. IZAKAYA LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Izakaya, LLC dba Kushi Izakaya & Sushi dba Kushi 465 K Street, NW Washington, DC 20001 Case No.: 14-00088 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court District of Columbia (Washington, D.C.) Judge: Hon. Martin S. Teel, Jr. Debtor's Counsel: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFIELD LLC 2600 Tower Oaks Blvd., Suite 103 Rockville, MD 20852 Tel: 301-881-8300 Fax: 301- 881-8350 Email: steveng@cohenbaldinger.com Total Assets: $15,335 Total Liabilities: $1.31 million The petition was signed by Darren Norris, managing member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/dcb14-88.pdf JAMES RIVER: Has Restructuring Advisers --------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that James River Coal Co., an operator of coal mines mostly in central Appalachia, hired Perella Weinberg Partners LP as a restructuring adviser, according to people familiar with the matter. According to the report, Moody's Investors Service said in May that James River will continue consuming cash unless it can reduce costs by $5 a ton, absent a "substantive improvement in thermal coal markets." Richmond, Virginia-based James River filed for Chapter 11 reorganization in April 2003 and emerged from bankruptcy a little more than one year later. The $47.3 million in 4.5 percent senior unsecured convertible notes due in 2015 traded on Jan. 27 for 32.125 cents on the dollar, to yield 82.105 percent, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. The $270 million in 7.875 percent senior unsecured notes due in 2019 last traded on Feb. 3 for 24.46 cents on the dollar, for a yield of 49.446 percent, Trace reported. The stock fell 19 percent on Feb. 3, closing at a record low of 89 cents in New York trading, according to Bloomberg data. In the past three years, the high was $25.14 on April 1, 2011. About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. For the nine months ended Sept. 30, 2013, the Company reported a net loss of $14.99 million. James River reported a net loss of $138.90 million in 2012, as compared with a net loss of $39.08 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $1.06 billion in total assets, $818.69 million in total liabilities and $247.34 million in total shareholders' equity. * * * In the May 24, 2013, edition of the TCR, Moody's Investors Service downgraded James River Coal Company's Corporate Family Rating to Caa2 from Caa1. "While the company continues to take actions to reposition operations and shore up its balance sheet, we expect external factors will preclude James River from maintaining credit measures and liquidity consistent with the Caa1 rating level," said Ben Nelson, Moody's lead analyst for James River Coal Company. As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'CCC' from 'SD' (selective default). "We raised our rating on James River Coal because we understand that the company has stopped repurchasing its debt at deep discounts, for the time being," said credit analyst Megan Johnston. KIDSPEACE CORP: U.S. Trustee Withdraws Case Dismissal Request ------------------------------------------------------------- Roberta A. DeAngelis, U.S. Trustee for Region 3, has withdrawn her motion to dismiss Kidspeace Corporation, et al.'s Chapter 11 case. As reported Troubled Company Reporter on Dec. 26, 2013, Healthcare Finance Group, LLC, as agent and a lender under the Debtor's debtor-in-possession financing facility, and HFG Healthco-4 LLC, as lender under the DIP facility, joined the Debtors' objection to U.S. Trustee's motion to dismiss the Debtors' Chapter 11 cases. UMB Bank, N.A., in its capacity as bond trustee, also supported the objections to the dismissal motion. The Official Committee of Unsecured Creditors also objected to the dismissal of the case. As reported by the TCR on Dec. 11, 2013, the U.S. Trustee seeks case dismissal as a result of the Debtors' failure to file monthly operating reports for August, September and October 2013; and to pay the U.S. Trustee fees. The Debtors asked the Bankruptcy Court to deny the U.S. Trustee's dismissal motion, asserting that they have addressed and cured the issues raised by the U.S. Trustee and that grounds do not exist to dismiss their cases. The Debtors told the Bankruptcy Court that they are now current with respect to the filing of their monthly operating reports. With respect to the outstanding fees owed to the U.S. Trustee, the Debtor said payment was made and received by the U.S. Trustee on Nov. 25, 2013, bringing the Debtors current with respect to same. With regards to the filing of a plan of reorganization and disclosure statement, the Debtors maintain they have been working with the Bond Trust, the Pension Benefit Guaranty Corporation and the Committee on a consensual plan of reorganization. In a separate objection, the Committee said the Debtors have provided it with what the Committee believes to be full transparency with respect to the Debtors' financial condition throughout the course of these Cases. Based on the information provided by the Debtors, the Committee does not believe that the pendency of the Cases has adversely impacted the Debtors' ability to run their businesses or meet their ongoing post-petition obligations on a financial basis. About KidsPeace Corp. KidsPeace Corp., a provider of behavioral services for children, filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa. Case No. 13-14508) on May 21, 2013, in Reading, Pennsylvania. KidsPeace operates a 96-bed pediatric psychiatric hospital in Orefield, Pennsylvania. Assets are $86.7 million, and debt on the books is $158.6 million, according to a court filing. The Debtor, which sought bankruptcy protection with eight affiliates, tapped Norris McLaughlin & Marcus, P.A. as counsel; EisnerAmper LLP as financial advisor, and Rust Omni as claims and notice agent. Assets total $158,587,999 at the end of 2012. The Debtors owe approximately $56,206,821 in bond debt, and they have been told that their pension liability is allegedly about $100,000,000 of which the Debtors currently reflect $83,049,412 on their books. KidsPeace sought Chapter 11 (i) as a means to implement a negotiated restructuring of bond debt currently aggregating approximately $51,310,000 plus accrued interest to a reduced amount of approximately $24 million in new 30-year bonds with interest at 7.5 percent, and (ii) to continue on-going negotiations with the Pension Benefit Guaranty Corporation in hopes of reducing the PBGC asserted obligation of $100+ million to an amount that the Debtors can reasonably expect to satisfy. The Debtor disclosed $157,930,467 in assets and $168,768,207 in liabilities as of the Chapter 11 filing. Since March 2012, MK has been exploring possible affiliation or acquisition opportunities; however, no offer of an affiliation or acquisition has been presented to the Debtors. Gemino Healthcare Finance, LLC, the prepetition revolving lender, is represented by James S. Rankin, Jr., Esq., at Parker, Hudson, Rainer & Dobbs LLP; and Weir & Partners LLP's Walter Weir, Jr., Esq. UMB Bank, N.A., on behalf of bondholders, Performance Food Group d/b/a AFI, W.B. Mason Co., Inc., Pension Benefit Guaranty Corporation, and Teresa Laudenslager were appointed to an official committee of unsecured creditors in the Debtors' cases. The Official Committee of Unsecured Creditors is represented by Fitzpatrcik Lentz & Bubba, P.C., and Lowenstein Sandler LLP as counsel. FTI Consulting, Inc. serves as the panel's financial advisor. KIDSPEACE CORP: April 3 Hearing to Confirm Modified Plan -------------------------------------------------------- The Bankruptcy Court will convene a hearing on April 3, 2014, at 11:00 a.m., to consider confirmation of Kidspeace Corporation, et al.'s First Modified Joint Plan of Reorganization. Objections, if any, are due March 24, at 4:00 p.m. The Court on Feb. 4, 2014, approved the adequacy of information in the Disclosure Statement explaining the First Modified Joint Plan. Any objections or responses filed with regard to the motion or relief were overruled and denied on the merits. Ballot accepting or rejecting the Plan are due March 24, at 5:00 p.m. As reported in the Troubled Company Reporter on Jan. 2, 2014, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that KidsPeace Corp., a provider of behavioral services for children, negotiated a reorganization plan with secured bondholders, the creditors' committee and Pension Benefit Guaranty Corp. The plan is supported by holders of 82 percent of the bonds. PBGC asserts a claim of about $110 million arising from an underfunded pension plan. PBGC will be paid $13.5 million in installments. General unsecured creditors with $2.5 million in claims will be paid 15 percent in three installments. The bondholders' deficiency claims and PBGC's claim won't participate in the pool for unsecured creditors. About KidsPeace Corp. KidsPeace Corp., a provider of behavioral services for children, filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa. Case No. 13-14508) on May 21, 2013, in Reading, Pennsylvania. KidsPeace operates a 96-bed pediatric psychiatric hospital in Orefield, Pennsylvania. Assets are $86.7 million, and debt on the books is $158.6 million, according to a court filing. The Debtor, which sought bankruptcy protection with eight affiliates, tapped Norris McLaughlin & Marcus, P.A. as counsel; EisnerAmper LLP as financial advisor, and Rust Omni as claims and notice agent. Assets total $158,587,999 at the end of 2012. The Debtors owe approximately $56,206,821 in bond debt, and they have been told that their pension liability is allegedly about $100,000,000 of which the Debtors currently reflect $83,049,412 on their books. KidsPeace sought Chapter 11 (i) as a means to implement a negotiated restructuring of bond debt currently aggregating approximately $51,310,000 plus accrued interest to a reduced amount of approximately $24 million in new 30-year bonds with interest at 7.5 percent, and (ii) to continue on-going negotiations with the Pension Benefit Guaranty Corporation in hopes of reducing the PBGC asserted obligation of $100+ million to an amount that the Debtors can reasonably expect to satisfy. The Debtor disclosed $157,930,467 in assets and $168,768,207 in liabilities as of the Chapter 11 filing. Since March 2012, MK has been exploring possible affiliation or acquisition opportunities; however, no offer of an affiliation or acquisition has been presented to the Debtors. Gemino Healthcare Finance, LLC, the prepetition revolving lender, is represented by James S. Rankin, Jr., Esq., at Parker, Hudson, Rainer & Dobbs LLP; and Weir & Partners LLP's Walter Weir, Jr., Esq. UMB Bank, N.A., on behalf of bondholders, Performance Food Group d/b/a AFI, W.B. Mason Co., Inc., Pension Benefit Guaranty Corporation, and Teresa Laudenslager were appointed to an official committee of unsecured creditors in the Debtors' cases. The Official Committee of Unsecured Creditors is represented by Fitzpatrcik Lentz & Bubba, P.C., and Lowenstein Sandler LLP as counsel. FTI Consulting, Inc. serves as the panel's financial advisor. KRONOS WORLDWIDE: Upsized Term Loan No Impact on Moody's Ba3 CFR ---------------------------------------------------------------- Moody's Investors Service said Kronos Worldwide Inc.'s plan to upsize its proposed term loan B due 2020 to $350 million from $275 million does not impact the firm's Ba3 Corporate Family Rating (CFR), the B1 rating on the proposed term loan B or the stable rating outlook. Kronos Worldwide, Inc., headquartered in Dallas, TX, produces and markets TiO2 pigments in the U.S., Canada and Europe. The company reported sales of $1.8 billion for the twelve months ended September 30, 2013. KRONOS WORLDWIDE: S&P Alters Recovery Rating & Affirms 'B+' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Dallas-based Kronos Worldwide Inc.'s proposed term loan to '4' from '3' following the company's $75 million upsizing of the term loan to $350 million. The rating on the term loan remains 'B+'. The '4' recovery rating indicates S&P's expectation for average (30% to 50%) recovery in the event of a payment default. S&P's 'B+' corporate credit rating remains unchanged. The ratings on Kronos reflect S&P's expectation that the company and the industry will continue to rebound from a very weak 2013 and that the company will not further increase debt to fund growth or returns to shareholders. The ratings also reflect the highly volatile nature of the TiO2 industry, from which the company derives almost all of its earnings as one of the largest global producers. S&P assess Kronos's business risk profile as "weak" and its financial risk profile as "aggressive". S&P also bases the ratings of Kronos on the consolidated credit quality of parent company Valhi Inc., and S&P applies its group rating methodology. Because Kronos contributes the substantial majority of earnings and cash flow and has a strong, long-term commitment from group management, S&P considers it to be a "core" entity of the group. Because of the group's common management and its ability to move funds between entities via dividends or loans, S&P believes it should take a holistic view of the group. S&P's assessment of the group credit profile at 'b+' is in line with Kronos's stand-alone credit profile and does not affect the final rating. RATINGS LIST Kronos Worldwide Inc. Corporate Credit Rating B+/Stable/-- Recovery Rating Revised To From Kronos Worldwide Inc. $350 Mil. Sr Sec Term Loan B+ B+ Recovery Rating 4 3 LA QUINTA HOLDINGS: S&P Gives Prelim. B+ CCR & Rates $2BB Debt BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Irving, Texas-based hotel company La Quinta Holdings Inc. a preliminary 'B+' corporate credit rating. The rating outlook is stable. At the same time, S&P assigned the company's proposed $2.35 billion senior secured credit facility (consisting of a $250 million revolver due 2019 and $2.1 billion first-lien term loan due 2021) S&P's preliminary 'BB-' issue-level rating (one notch above the corporate credit rating), with a preliminary recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. S&P expects the revolving credit facility will be undrawn at close. La Quinta plans to use the proceeds from this debt issuance, in addition to proceeds from a planned IPO that is expected to close concurrently to the debt close, to repay existing debt balances and for transaction fees and expenses. The ratings are preliminary, based on the closing of the transaction and a successful IPO execution. The preliminary 'B+' corporate credit rating reflects S&P's assessment of La Quinta's business risk profile as "fair" and S&P's assessment of the company's financial risk profile as "highly leveraged," according to its criteria. S&P's assessment of La Quinta's business risk profile as fair reflects the company's single brand portfolio that targets the mid- to upper-midscale lodging segment, an area of the lodging market with low barriers to entry, and price-sensitive consumers. S&P also views the single brand as a potential competitive weakness in terms of attracting third-party capital investment to grow its system of franchised rooms. These risks are partially offset by La Quinta's strong operating efficiency, focus on further growth through its franchised portfolio, which S&P views to be less volatile in a downturn, and strong brand recognition. S&P's assessment of La Quinta financial risk profile as highly leveraged reflects its financial policy assessment of the company's financial sponsor, Blackstone, who will continue to own a majority of La Quinta following the anticipated IPO. This majority ownership means Blackstone will be able to drive the company's leverage and financial policy in the intermediate term. Under S&P's base-case performance assumptions, it expects adjusted leverage to remain just above 5x through 2015. S&P believes the volatility in the underlying lodging business is high. S&P's comparable rating analysis results in a one notch upward adjustment from a 'b' anchor score. This reflects La Quinta's coverage and FFO to debt metrics, which S&P expects will remain favorable through 2015 for the current financial risk score. S&P expects leverage to improve slightly to the mid-4x area in 2016, and for funds from operations (FFO) to debt to remain in the mid- to high- teens area in 2014 and 2015. S&P is also considering the company's "strong" liquidity position. LA QUINTA INTERMEDIATE: Moody's Assigns B1 CFR; Outlook Stable -------------------------------------------------------------- Moody's Investors Service assigned a B1 Corporate Family and a B1- PD Probability of Default Rating to La Quinta Intermediate Holdings L.L.C. ("Issuer"), a wholly owned subsidiary of La Quinta Holdings, Inc. (collectively, "La Quinta"). Moody's also assigned a B1 rating to the company's proposed $250 million five year senior secured revolving credit facility and $2.1 billion seven year term loan facility and a Speculative Grade Liquidity rating of SGL-1. The ratings and closing of the bank facilities are subject to completion of the proposed initial public offering (IPO) by the Issuer's parent company, La Quinta Holdings, Inc., certain pre-IPO transactions as described in the company's S-1 filing dated February 10, 2014, as well as, Moody's review of final documentation. La Quinta will use the proceeds of the IPO to repay and refinance existing debt. Post IPO, La Quinta will be a closely controlled public company by affiliates of The Blackstone Group LP. Ratings assigned: La Quinta Intermediate Holdings L.L.C. Corporate Family Rating at B1 Probability of Default Rating at B1-PD $2.1 billion senior secured guaranteed 7 year term loan at B1 (LGD 4, 51%) $250 million senior secured guaranteed 5 year revolver at B1 (LGD 4, 51%) Speculative Grade Liquidity Rating at SGL-1 Ratings Rationale The B1 Corporate Family Rating ("CFR") reflects La Quinta's high leverage per Moody's Lodging Methodology particularly in light of the industry's sensitivity to economic cycles and La Quinta's exposure to more volatile owned hotel EBITDA (which comprises more than 75% of EBITDA). The ratings consider La Quinta's small scale in terms of the number of system-wide rooms and significant geographic concentration in three states that account for about 43% of the company's hotel rooms. The ratings take into account La Quinta's solid operating margins (in the high teens) that reflect the lower cost structure of its limited service hotels and its growing franchise based business model. Moody's expect revenue per available room (RevPAR) will increase by approximately 5.0 - 5.5% resulting in EBITDA growth in the 5%-7% range driven by rising travel demand, limited industry supply growth, and the company's pipeline of new franchise hotels expected to enter the system over the next two years. La Quinta has invested significant capital in the portfolio over the last six years that positions the company for continued growth. Moody's expects capital spending needs going forward will be limited to normal maintenance and investment levels. As a result of earnings growth and normalized spending, positive free cash will increase and Moody's expects La Quinta will use its free cash flow to repay debt and improve credit metrics. Moody's estimate pro-forma adjusted debt/EBITDA was approximately 6.2 times as of year-end 2013 which is near the high end of the 5.0 times -- 6.25 times range for the B rating category as outlined in our Global Lodging & Cruise Industry Methodology. The above average leverage profile of the company is mitigated by the positive demand outlook for the industry and the addition of new franchise hotels over the next several years from the existing pipeline of 187 hotels (about 15 thousand rooms) that will bring debt/EBITDA down to 5.5x and EBIT/interest up to 1.8x by year-end 2014. Moody's expects La Quinta will generate increasing levels of free cash as it benefits from rising RevPAR and a growing base of high margin franchise hotel rooms that do not require capital investment by La Quinta. Moody's expects management will deploy a significant majority of this free cash flow to debt repayment. Thus, the ratings reflect our assumption that debt/EBITDA and EBIT/interest will improve from pro-forma 2013 levels. La Quinta's SGL-1 rating reflects strong liquidity. Moody's estimates cash flow from operations will approximate $200 million which is more than sufficient to cover capital spending needs and mandatory debt amortization. The company has a $250 million five year revolving credit facility that is not expected to used, but is available to cover unexpected contingencies. The company's owned portfolio of hotels could also be sold to raise liquidity. The credit agreement will have one financial covenant (debt to EBITDA) that is operative only if 25% of the revolving credit facility is outstanding. The Issuer's bank facilities will be guaranteed by the parent, La Quinta Holdings, Inc. and all domestic subsidiaries; the facilities will be secured by a pledge of stock of the Issuer, and stock held by the Issuer in all domestic subsidiaries (65% of foreign subsidiaries), and substantially all other tangible and intangible assets, excluding any fee-owned real property. The stable rating outlook reflects our view that La Quinta's EBITDA will increase over the next 12-24 months from rising RevPAR and new franchise contracts that will cause the company's debt/EBITDA to drop to 5.5x by year-end 2014. Given La Quinta's high leverage, Moody's do not anticipate upward rating momentum in the near term. However, ratings could be considered for an upgrade if debt/EBITDA declines below 5.0 times, liquidity remains strong, and if improved credit metrics can be sustained in light of industry operating conditions and management's financial policies. Ratings could be lowered if debt/EBITDA rises above 6.25 times, if there is an unexpected drop in demand that causes RevPAR to decline or if La Quinta is unable to open new franchise units within its pipeline. The principal methodology used in this rating was the Global Lodging & Cruise Industry Rating Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. La Quinta Intermediate Holdings LLC is a wholly owned subsidiary of La Quinta Holdings, Inc. La Quinta is principally owned by affiliates of the private equity firm, The Blackstone Group LP. La Quinta owns and operates 357 limited service hotels and franchises another 477 hotels aggregating approximately 82 thousand hotel rooms. Annual net revenues approximate 910 million. LABORATORY PARTNERS: 3 Members Appointed to Creditors' Panel ------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Laboratory Partners, Inc., et al. The Committee members are: 1. M. Bashar Kashlan, M.D. 340 E. Randolph St., Ste. 6001 Chicago, IL 60601 Phone: 812-243-2700 2. Paul Kilbourne, Sr. 2200 Snyder Rd. Batavia, OH 45103 Phone: 513-319-9570 3. Quest Diagnostics Inc. Attn: Paul Kattas 3 Giralda Farms Madison, NJ 07940 Phone: 973-520-2030 The Official Committee of Unsecured Creditors has retained Otterbourg P.C., as Lead Co-Counsel; Klehr Harrison Harvey Branzburg LLP as Delaware Counsel; and Carl Marks Advisory Group LLC, as financial advisors. About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, filed a petition for Chapter 11 protection on Oct. 25 in Delaware. The case is In re Laboratory Partners Inc., 13-bk-12769, U.S. Bankruptcy Court, District of Delaware (Wilmington). Judge Peter J. Walsh presides over the case. Laboratory Partners is represented by Morris, Nichols, Arsht & Tunnell LLP's Robert Dehney, Esq., and Erin R. Fay, Esq. -- rdehney@mnat.com and efay@mnat.com -- and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq. -- leo.crowley@pillsburylaw.com -- and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. LIANSHENG GROUP: Trust Says Tranche Likely to Default Soon ---------------------------------------------------------- Grace Zhu and Yue Li, writing for The Wall Street Journal, reported that about $16.5 million of financial products tied to a troubled coal company could soon fall into default, according to the company that issued them, in the latest potential stumble for an important part of China's shadow-banking system. In a notice issued to investors last month and reviewed by The Wall Street Journal, Jilin Trust said holders of 100 million yuan ($16.5 million) of trust products linked to coal producer Liansheng Group in China's northern Shanxi province currently can't be repaid when they come due Feb. 19, according to the report. The notice cited Liansheng's restructuring as it tries to pay back nearly 30 billion yuan in debt. "Due to the current situation, the products that will come due soon can't be paid for now," Jilin Trust said in the latest letter to investors, the report related. The investment products were sold by China Construction Bank Corp., the country's second-largest lender by assets after Industrial & Commercial Bank of China Ltd., the report further related. A press representative said China Construction Bank didn't have an immediate comment. The products coming due next week are the fifth of a total six tranches amounting to nearly one billion yuan in trust products, the report said. The first four tranches -- valued at a combined 764 million yuan -- have already fallen into default, according to investors. LIGHTSQUARED INC: May File New Restructuring Plan by Friday ----------------------------------------------------------- Billy Cheung, writing for Reuters, reported that LightSquared hopes to submit a consensual restructuring plan by Feb. 14, although the judge overseeing the wireless venture's bankruptcy isn't convinced that will happen. According to the report, in a court hearing on Feb. 11, a lawyer for the company said it aims to file a reorganization plan that has the support of its creditors by Friday, putting the company, owned by Phil Falcone's Harbinger Capital Partners, on track to exit bankruptcy around the end of March. But Judge Shelley Chapman, in U.S. Bankruptcy Court in Manhattan, voiced skepticism that parties in the fractious case could reach a deal by then. "The likelihood of there being something consensual by Friday seems to be zero," Judge Chapman said, the report cited. Three competing restructuring proposals are on the table -- one backed by Harbinger and two others from creditor groups -- but the company has said it plans to engage creditors and work toward a consensual deal, the report related. The key question is whether any restructuring plan would have the support of an investment vehicle run by Dish Network Corp Chairman Charles Ergen, the report further related. The Ergen entity holds enough LightSquared debt to give him sufficient voting clout to block any restructuring plans that he opposes. So far, discussions with creditors have not included Ergen, and the sides have been anything but friendly throughout the case. LightSquared has accused Ergen in a separate lawsuit of surreptitiously buying up its debt to set the stage for a takeover of the company by Dish. 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. LOFINO PROPERTIES: Court Okays Wood & Lamping as Trustee's Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Ohio authorized Henry E. Menninger, Jr., the Chapter 11 trustee of Lofino Properties, LLC, to employ Wood & Lamping LLP, as counsel for the Trustee, nunc pro tunc to Dec. 6, 2013. As reported in Troubled Company Reporter on Jan. 6, 2014, the Chapter 11 Trustee requires Wood & Lamping to: (a) prepare on behalf of the Trustee all motions, applications, answers, orders, reports, notices, and other legal papers; (b) provide legal advice with respect to issues that arise in the case, including financing proposals, interim and final cash collateral orders, adequate protection for utilities pursuant to 11 U.S.C. Section 366, motions for relief from the automatic stay and/or adequate protection as may from time to time be filed by secured creditors, and motions to assume or reject unexpired leases or executory contracts; (c) assist the Trustee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's businesses, potential causes of action, and any other matters relevant to the case; (d) attend meetings and negotiate with representatives of the Debtor, creditors, potential purchasers of some or all of the Debtor's assets, the United States Trustee or his representative, or other parties in interest; (e) prepare a plan of reorganization and disclosure statement, any amendments to the plan or disclosure statement, and all related agreements or documents, and take any necessary action on behalf of the Trustee in connection with same; (f) appear before the Court, appellate courts, and the U.S. Trustee, and protect the interests of the Trustee and the estate before such courts and the U.S. Trustee; (g) litigate and negotiate with respect to claims filed or interests asserted in this case; and (h) perform all other necessary legal services and provide all other necessary legal advice to the Trustee in connection with the Debtor's Chapter 11 case. Mr. Menninger is a partner at Wood & Lamping. He assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Wood & Lamping will be paid at these hourly rates: Henry E. Menninger, Jr. $395 Raymond J. Pikna, Jr. $380 Partner $395 Associate $275 Paralegal $140 Law Clerks $100 Wood & Lamping will also be reimbursed for reasonable out-of- pocket expenses incurred. Wood & Lamping can be reached at: Henry E. Menninger, Jr., Esq. WOOD & LAMPING LLP 600 Vine Street, Suite 2500 Cincinnati, OH 45202 Tel: (513) 852-6000 Fax: (513) 852-6087 E-mail: hemenninger@woodlamping.com About Lofino Properties Dayton, Ohio-based Lofino Properties, LLC, which owns retail stores, sought bankruptcy protection (Bankr. S.D. Ohio Case No. 13-34099) on Oct. 4, 2013. Lofino Properties listed assets of $19.91 million and liabilities of about $13.15 million. A sister company, Southland 75 LLC, which owns a strip shopping center, sought bankruptcy protection (Bankr. S.D. Ohio Case No. 13-34100) on the same day. Southland 75 listed assets of $8.09 million and liabilities of $5.62 million. The Hon. Judge Lawrence S. Walter presides over the cases. Attorneys at Pickrel, Schaeffer, and Ebeling, in Dayton, Ohio, represent the Debtors as counsel. The petitions were signed by Michael D. Lofino, managing member. The Debtors have been operating under state court receiverships since May 2013. On Oct. 17, 2013, the Bankruptcy Court entered an order denying the motion of the Debtors for the joint administration of their cases. LONE PINE Implements Canadian Reorganization Plan ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lone Pine Resources Inc., an independent oil-and-gas exploration and production company, has implemented the reorganization plan approved last month by courts in Canada and the U.S. According to the report, citing company statement, emerging from bankruptcy, Calgary-based Lone Pine reduced debt from C$359 million ($357 million) to C$90 million. The proceedings in the U.S. were under Chapter 15, with the U.S. court enforcing the Canadian arrangement. The plan gave new stock to holders of $195 million in senior notes. For an additional $100 million investment, some of the noteholders got preferred stock convertible into 75 percent of the common equity, the report related. The existing $180 million secured bank credit was paid in full with proceeds from a new asset-backed loan. The 10.375 percent senior unsecured notes last traded on Jan. 7 for 30 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, the report further related. The notes sold for 85 cents on June 3 and were worth almost 65 cents in the first trades after bankruptcy. About Lone Pine Resources Calgary, Canada-based Lone Pine Resources Inc. is an independent oil and gas exploration, development and production company with operations in Canada. The Company's reserves, producing properties and exploration prospects are located in the provinces of Alberta, British Columbia and Quebec, and in the Northwest Territories. The Company is incorporated under the laws of the State of Delaware. Lone Pine entered bankruptcy protection in Canada on Sept. 25, 2013, under the Companies' Creditors Arrangement Act and received an initial protection order from an Alberta court the same day. Lone Pine Resources simultaneously filed for Chapter 15 protection in Delaware in the United States (Bankr. D. Del. Case No. 13- 12487) to seek recognition of the CCAA proceedings. Lone Pine, LPR Canada and all other subsidiaries of the Company are parties to the CCAA and Chapter 15 proceedings. Lone Pine is being advised by RBC Capital Markets, Bennett Jones LLP, Vinson & Elkins LLP and Richards Layton & Finger P.A. in connection with the restructuring, with Wachtell, Lipton, Rosen & Katz LLP providing independent advice to the Company's board of directors. The Supporting Noteholders are being advised by Goodmans LLP and Stroock & Stroock & Lavan LLP. Lone Pine's plan of reorganization is a debt-for-equity swap that would allow it to shed $195 million in bond debt. Noteholders are to receive 100 percent ownership of the new common stock. The existing $180 million secured bank credit will be paid in full with proceeds from a new asset-backed loan. General unsecured creditors will share a $700,000 fund. Current equity holders are being wiped out. LOS GATOS HOTEL: April 24 Hearing on 3rd Amended Plan Outline ------------------------------------------------------------- Los Gatos Hotel Corporation will seek approval of its Third Amended Disclosure Statement at a hearing on April 24, 2014, at 2:30 p.m. The hearing was originally scheduled Jan. 24. The hearing has been continued twice. According to the disclosure statement, the Third Amended Chapter 11 Plan of Reorganization dated Dec. 20, 2013, provides that substantially all of the assets of the Debtor will be sold to IHA Hotel Management Company, LLC, d/b/a Greystone Hotels, on the effective date of the Plan. Secured creditor GCCFC 2006-GG7 Los Gatos Lodging Limited Partnership is unimpaired -- it will receive payment of principal, non-default interest, and a settlement payment, totaling $12.6 million. Unsecured creditors who are not insiders will be paid in full. As for unsecured claims held by insiders, proceeds of the sale to IHA will be reserved pending allowance of the claims or a settlement. Equity holders are impaired and will receive distribution of remaining funds. A copy of the Third Amended Disclosure Statement is available for free at http://bankrupt.com/misc/Los_Gatos_3rd_Am_DS.pdf About Los Gatos Hotel San Jose, California-based Los Gatos Hotel Corporation, dba Hotel Los Gatos, was formed in 2000 to build and operate Hotel Los Gatos, a full-service boutique hotel in downtown Los Gatos, California. Los Gatos Hotel filed for Chapter 11 bankruptcy protection on December 27, 2010 (Bankr. N.D. Cal. Case No. 10-63135). The Debtor disclosed $17,191,277 in assets and $12,896,468 in liabilities as of the Chapter 11 filing. Affiliate Blossom Valley Investors, Inc., filed a separate Chapter 11 petition on September 10, 2009 (Bankr. N.D. Cal. Case No. 09-57669). Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky Popeo, serves as the Debtor's bankruptcy counsel. The Debtor has tapped OSAS Inc. as financial advisor and investment banker. MALLINCKRODT PLC: Moody's Reviews Ba2 CFR for Possible Downgrade ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Mallinckrodt plc. under review for possible downgrade. The ratings include Mallinckrodt's Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, and the Ba2 rating on the senior unsecured notes issued by Mallinckrodt International Finance SA, guaranteed by Mallinckrodt. The rating action follows Mallinckrodt's announcement that it has entered into a definitive agreement to acquire publicly traded Cadence Pharmaceuticals Inc. (unrated) for $14 per share or approximately $1.3 billion. The rating review is prompted by Moody's expectation that Mallinckrodt's debt/EBITDA will substantially exceed the level of 3.0 times that the rating agency had incorporated in the Ba2 rating. The rating review of the senior unsecured notes is further prompted by the concern that the addition of secured debt to Mallinckrodt's capital structure will result in existing bondholders being effectively subordinated. Ratings placed under review for possible downgrade: Mallinckrodt plc: Ba2 Corporate Family Rating Ba2-PD Probability of Default Rating Mallinckrodt International Finance SA: Ba2 (LGD4, 59%) senior unsecured notes The rating review will focus on: (1) Mallinckrodt's leverage profile following the transaction including any near-term deleveraging opportunities; (2) structural considerations resulting in subordination of senior unsecured notes to any secured debt added to the structure; (3) the earnings contribution from Cadence, anticipated cost synergies, and diversification benefits; (4) drivers affecting Mallinckrodt's core businesses including slow diagnostic imaging sales, nuclear supply constraints, and growth from new products in the branded pharmaceutical business. Moody's is affirming Mallinckrodt's SGL-1 Speculative Grade Liquidity Rating but this may be adjusted as the detailed terms of Mallinckrodt's financing become available. Ratings Rationale Mallinckrodt's Ba2 rating reflects good balance between its two business segments (Specialty Pharmaceuticals and Global Medical Imaging) but is constrained by its overall modest scale with a $2 billion revenue base. Within pharmaceuticals, Mallinckrodt has good balance between generic controlled substance products, branded products, and active pharmaceutical ingredients, yet its pharmaceutical products are highly concentrated in the opioid pain category. These products face high regulatory scrutiny and the possible transition by prescribing physicians to abuse deterrent products. This could negatively affect Mallinckrodt's non-abuse deterrent products, but Mallinckrodt's branded drug business could significantly benefit from this trend based on opportunities in its pipeline and the pending regulatory approval of Xartemis XR. Mallinckrodt's nuclear segment (roughly 20% of sales) -- which produces nuclear imaging agents for diagnostic procedures -- faces high risk of supply disruption due to a limited number of nuclear plants producing molybdenum-99 and frequent shutdowns of these plants. Headquartered in Dublin, Ireland, Mallinckrodt plc is a specialty pharmaceutical and medical imaging company. Revenues for the twelve months ended December 27, 2013 were approximately $2.2 billion. The principal methodology used in this rating was the Global Pharmaceutical Industry published in December 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MBIA INC: Moody's Affirms 'Ba3' Rating on Senior Unsecured Debt --------------------------------------------------------------- Moody's Investors Service has affirmed the insurance financial strength (IFS) rating of National Public Finance Guarantee Corporation (National) at Baa1, MBIA Insurance Corporation (MBIA Corp.) at B3, MBIA Mexico S.A de C.V. (MBIA Mexico) at B3, and MBIA UK Insurance Limited (MBIA UK) at B1. In the same rating action, Moody's also affirmed the Ba3 senior unsecured debt ratings of MBIA Inc., the group's ultimate holding company. The outlook for the ratings remains positive. A full list of rating actions on MBIA Inc. and its subsidiaries is provided below. Ratings Rationale -- National Public Finance Guarantee Corporation According to Moody's, the Baa1 IFS rating of National, positive outlook, reflects the insurer's strong overall capital profile and ongoing de-risking through insured portfolio amortization. These strengths are tempered by the fact that National is currently not writing any material new business, operates in an industry that has not recovered from the financial crisis and, like its peers, the company faces significant headwinds from declining fundamentals in the sector, including a dramatic reduction in insurance usage, moderate prospective profitability and still- meaningful legacy risk. The positive outlook of National also reflects the improving capital and liquidity trends at MBIA Corp., which reduce the need and likelihood of support by National of its weaker affiliate. While the credit quality of National's insured portfolio is generally good and is supported by substantial claims paying resources, its business position is characterized by a lack of participation in the market. We are also cautious about some of National's large single risks and the linkages between these obligations. Moody's notes that there has been downward credit rating migration among certain large exposures within the insured portfolios of National, most notably the general obligation bonds issued by the Commonwealth of Puerto Rico (Ba2/negative) and bonds of Puerto Rico issuers linked to, or capped by, the general obligation (GO) bond rating, as well as Detroit related exposures, including GO bonds (Caa3/negative), certificate of participation bonds (Ca/negative) and Detroit Water/Detroit Sewer revenue bonds (B1 senior lien/B2 second lien/negative). In the case of Puerto Rico, given the various linkages of these obligors and their reliance on the same local economy to support revenues, we view National's exposures to Puerto Rico to be more highly correlated than is typical across public sector obligors. As outlined in our rating methodology for financial guaranty insurers, single risk concentrations such as these exposures to Puerto Rico can meaningfully increase risk, because they can define the "weakest link" in a chain of enterprise financial strength. As of 30 September 2013, National had gross par exposure of approximately $5.1 billion to Puerto Rico issuers, of which approximately $4.4 billion is currently rated below investment grade by Moody's; and approximately $2.4 billion of exposure to Detroit, of which approximately $2.3 billion is rated below investment grade by Moody's. As part of its analysis, Moody's contemplated a variety of stress scenarios, including a default of, and losses on, National's Puerto Rico exposures, with loss severities consistent with those observed during the most recent credit cycle for municipal credits. Moody's analysis suggests that a default of Puerto Rico with meaningful loss severity could lead to a downgrade of National's rating. However, given the still low likelihood of a Puerto Rico default, and the likely moderate rating impact of such potential default under Moody's central stress scenarios, Moody's believes National's ratings remain well positioned at current levels, reflecting both the insurer's substantial current financial resources and its otherwise improving capital adequacy profile given the ongoing portfolio amortization. Moody's views National (IFS rating Baa1 positive) is well positioned to withstand some pressures from its insured public finance book, due to its strong capital profile, the earn-out of unearned premiums and through investment income on its large fixed income portfolio. However, single risk concentration and pockets of deterioration within its insured book are notable weaknesses for National. As of 30 September 2013, National's gross par of below investment grade (BIG) credits increased to $4.6 billion, or 1.6% of the insured book, from $2.9 billion as of year-end 2012, primarily as a result of deterioration in Detroit City water and sewer exposures. National's insured portfolio totaled $291 billion gross par outstanding in U.S. public finance risks, and BIG gross par exposure as a percentage of qualified statutory capital (QSC) was 138%, as of 30 September 2013. Pro forma including recent Puerto Rico downgrades, the BIG concentration increased further. Ratings Rationale -- MBIA Insurance Corporation The B3 IFS rating, positive outlook, of MBIA Insurance Corp. (MBIA Corp.) reflects the firm's improved capital and liquidity profile following settlements of putback receivables and insured claims with major counterparties, and positive momentum in further de- risking. However, the insurer remains exposed to substantial insured risks, including certain commercial real estate exposures that could yield losses substantially in excess of reserves. The B3 IFS rating, positive outlook of MBIA Mexico, S.A. de C.V. (MBIA Mexico) reflects the formal and informal support from MBIA Corp., in the context of the insurer's limited size and standalone financial profile. Its rating is expected to remain closely linked to that of its parent. Ratings Rationale -- MBIA Uk The B1 IFS rating, positive outlook, of MBIA UK reflects its meaningful stand-alone financial resources relative to its insured risks, as well as its limited standalone business profile and pressures stemming from its weaker parent, MBIA Corp. MBIA Corp.'s support of MBIA UK, in the form of excess of loss reinsurance and net worth maintenance agreements, is subordinated to insured claims and thus of limited value, in Moody's opinion, due to MBIA Corp.'s weak credit profile. Ratings Rationale -- MBIA INC. The Ba3 senior unsecured debt rating, positive outlook, of MBIA Inc. reflects the improving credit profile of its subsidiaries and the resumption of dividend payments from National. The firm's high debt burden and meaningful asset risks, reflecting the deterioration of its wind-down operations, remain a distinct weakness, however, resulting in its positioning five rating notches below the IFS rating of its lead insurance subsidiary, National, rather than the more typical three notches. What Could Change The Ratings Up Or Down National's rating could be raised if the insurer were able to establish a more solid market position, marked by underwriting of high quality risks at attractive prices. Meaningful improvements at MBIA Corp., either through risk reduction or capital enhancement would also be a positive rating driver for National, as well as for MBIA Corp., as those improvements would reduce the contingent risk of a call on National's resources. In addition, reduced single risk concentration, improved capital and financial flexibility could also improve National's credit profile. National's rating could be lowered if the quality of its large insured exposures meaningfully decreased or if capital was withdrawn without an associated reduction of risk, or if profitability reduced materially. The ratings of MBIA Corp. could be downgraded if the insurer were to experience greater than expected claims that would cause liquidity stress, but the ratings could be upgraded if there were material risk reduction in the insurer's portfolio due to commutations, improving credit trends and amortization. RATING LIST The following ratings have been affirmed, with a positive outlook: Issuer: MBIA Inc. Senior Unsecured Regular Bond, Affirmed Ba3 Issuer: MBIA Insurance Corp. Insurance Financial Strength, Affirmed B3 Subordinate Surplus Notes, Affirmed Ca (hyb) Pref. Stock Preferred Stock, Affirmed C (hyb) Non-cumulative Preferred Stock, Affirmed C (hyb) Issuer: National Public Finance Guarantee Corp. Insurance Financial Strength, Affirmed Baa1 Issuer: MBIA UK Insurance Limited Insurance Financial Strength, Affirmed B1 Issuer: MBIA Mexico S.A de C.V. Insurance Financial Strength, Affirmed B3 and B1.mx National Public Finance Guarantee Corp. and MBIA Insurance Corp. are financial guaranty insurance companies based in New York State. MBIA UK Insurance Limited and MBIA Mexico S.A de C.V. are financial guaranty reinsurance companies based in UK and Mexico respectively. They are wholly owned by MBIA Inc. [NYSE: MBI], the ultimate holding company. As of September 30, 2013, MBIA Inc. had consolidated gross par outstanding of approximately $375.3 billion, qualified statutory capital of $4.4 billion, and total claims paying resources of $9.0 billion. The principal methodology used in this rating was Moody's Rating Methodology for the Financial Guaranty Insurance Industry published in September 2006. MERCANTILE BANCORP: Exclusive Plan Filing Date Extended to Feb. 24 ------------------------------------------------------------------ Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware extended Mercantile Bancorp, Inc.'s exclusive period to file a plan through Feb. 24, 2014, and its exclusive period to solicit acceptances of that plan through April 25. According to the Debtor, the extension will allow it time to present a confirmation plan of liquidation. The Debtor assured the Court that the extension was not sought to delay the administration of its case or pressure creditors into acceding to a plan that they find unsatisfactory. About Mercantile Bancorp Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy, Illinois-based bank holding company with wholly owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operated Mercantile Bank branch offices in Missouri and Indiana. On Aug. 10, 2011, the Illinois Division of Banking released a Consent Order that Mercantile Bank, the Federal Deposit Insurance Corporation, and the Division entered into as of July 28, 2011. Under the Order, Mercantile Bank will cease operating with all money transmitters and currency businesses providing brokerage, sale or exchange of non-United States currency for deposit customers. Furthermore, Mercantile Bank may not enter into a new line of business without the prior written consent of the FDIC and the Division. Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on June 27, 2013. The petition shows assets and debt both exceeding $50 million. Liabilities include $61.9 million owing on junior subordinated debentures. Mercantile stopped paying interest on the debentures in 2009, since then running up $14 million in unpaid interest. Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch, Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the attorneys for the Debtor. A three-member official committee of unsecured creditors was appointed by the U.S. Trustee. An official committee of trust preferred securities holders was also appointed by the U.S. Trustee. The TruPS Committee is represented by Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadelphia, Pennsylvania; David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joseph Serino Jr., P.C., Esq., and John P. Del Monaco, Esq., at Kirkland & Ellis LLP, in New York. The Troubled Company Reporter reported on Oct. 7, 2013, that the U.S. Bankruptcy Court for the District of Delaware authorized Mercantile Bancorp, Inc.'s sale of its shares in Mercantile Bank and the related trademark for Mercantile Bank's "M" Logo. Mercantile Bancorp entered into a stalking horse purchase agreement with United Community Bancorp Inc., under which the Purchaser will pay $22,277,000, less all amounts due and owing by the Bank to the Federal Deposit Insurance Corporation and all broker's fees. MERITOR INC.: Moody's Rates New $225MM Sr. Unsecured Notes 'B3' --------------------------------------------------------------- Moody's Investors Service assigned ratings to the new notes and credit facility of Meritor, Inc. The ratings assigned are a B3 to $225 million of senior unsecured notes due 2024, and a Ba2 to a $500 million amended and extended revolving credit facility (approximately $90 million maturing in 2017 and $410 million maturing in 2019). Moody's also affirmed the following ratings: B2 Corporate Family Rating (CFR); B2-PD Probability of Default Rating (PDR); and B3 rating on outstanding senior unsecured debt. The company's Speculative Grade Liquidity rating is raised to SGL-2 from SGL-3. The outlook is stable. Ratings Rationale Meritor's B2 CFR reflects the company's high leverage and the persistent weakness in its heavy truck markets, particularly in North America and Europe. Despite this pressure, the company has made notable progress in revamping its cost structure, positioning itself for an eventual recovery in demand, and improving its operating margins. Meritor's quarterly EBIT margin (reflecting Moody's standard adjustments) has increased steadily from 2% at September 2012, to 14.8% at September 2013. This margin improvement is one of the key indicators of the success of Meritor's restructuring initiatives. In addition, one of the company's major objectives is to increase its EBITDA margin from 7.1% at year-end September 2013 to 10% by 2016. Meritor expects to accomplish this through a combinaiton of new business wins, further cost reductions, and higher-margin new product introductions. The B2 CFR and the SGL-2 Speculative Grade Liquidity Rating also reflect the liquidity, interest expense, and maturity profile benefits that will result from Meritor's new financings. The new $500 million revolver will increase borrowing availability from a current level of $415 million. The $225 million of new notes will help refund the company's $250 million of 10 5/8% notes that are due in 2018. The interest rate on the new notes is expected to be significantly lower and the maturity will be in 2024. Meritor's liquidity position is good. This position is supported by the undrawn $500 million revolving credit facility and by a $100 million undrawn accounts receivable securitization facility that matures in 2016. The company also has approximately $300 million in cash and securities. Finally, we expect that Meritor will generate a modest level of free cash flow during the coming twelve months. Meritor has modest amounts of debt maturing during the next twelve months. However, it does have approximately $364 million outstanding under its various receivable factoring programs, some of which must be renewed annually. Because of the need to renew a majority of these facilities on an annual basis we view the $364 million in outstandings as short-term debt that could represent a call on Meritor's liquidity. Nevertheless, the company's total liquidity sources of approximately $900 million provide adequate coverage of potential liquidity requirements. Future events that have the potential to improve Meritor's ratings include a recovery in end market demand, strengthening profit margins, and resulting improvement in credit metrics. Metrics (all reflecting Moody's standard adjustments) that might support an improvement in the rating include: more strongly positive free cash flow generation, EBIT/interest remaining above 2.0x (1.6x at Sept. 2013), and Debt/EBITDA approaching 4.5x (5.3x at Sept. 2013). Events that have the potential to drive Meritor's ratings lower include prospects that demand will not improve during 2014 or that the company is unable to maintain the improving trend in quarterly profit margins. The rating could also be pressured if it is unable to sustain positive free cash generation. Lower ratings could arise if EBIT/Interest coverage is on track to remain below 1.5x or debt/EBITDA is likely to remain above 5.25x. The principal methodology used in this rating was the Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MFM DELAWARE: March 5 Hearing on Disclosure Statement ----------------------------------------------------- MFM Delaware, Inc., and MFM Industries, Inc., will seek approval of the disclosure statement explaining their proposed Chapter 11 plan at a hearing on March 5, 2014, at 2:00 p.m. According to the disclosure statement filed Jan. 23, 2014, the Chapter 11 plan does not provide for the substantive consolidation of the Debtors' estates. The Debtors anticipate that MFM Industries' creditors will receive a cash distribution and that certain of MFM Delaware's creditors may, under certain circumstances, receive a distribution. Holders of general unsecured claims against MFM Industries are impaired and are projected to recover 0% to 100%. Holders of general unsecured claims against MFM Delaware are projected to recover 0% to 2%. The Plan provides for MFM Industries' unsecured creditors to receive pro rata distributions of any distribution proceeds that remain in MFM Industries' estate after the payment and satisfaction of all allowed administrative expense claims, allowed tax claims, secured claims and unsecured convenience claims. Holders of convenience claims -- unsecured creditors of MFM Industries with allowed claims equal to or less than $10,000 or general unsecured creditors who agree to reduce the amount of their claims to $10,000 -- will receive at least 20% of the allowed claim. Holders of interests in MFM Industries and MFM Delaware will retain their interests and thus are unimpaired under the Plan. Objections to the adequacy of the information in the Disclosure Statement are due Feb. 26, 2014. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MFM_DS_Jan2314.pdf About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq., at Rossner Law Group LLC, serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq. at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MI PUEBLO: Court Approves Piper Jaffray as Investment Banker ------------------------------------------------------------ The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California authorized Mi Pueblo San Jose, Inc. to employ Piper Jaffray & Co. as investment banker, effective Dec. 9, 2013. According to the Troubled Company Reporter on Jan. 13, 2014, the Debtor proposed to retain Piper Jaffray as investment banker and exclusive agent for a period of at least 180 days to assist the Debtor in maximizing the value of its assets through a sale, financing, equity placement or other Transaction on the terms set forth in the Engagement Letter. The Firm's services will include, but are not limited to, the following: (a) consult with Mi Pueblo in planning and implementing the Transaction; (b) at Mi Pueblo's request, prepare in collaboration with Mi Pueblo a memorandum describing the Debtor, its history, the nature of its operations, such financial information as may be appropriate to reflect the Debtor's past performance and its projected growth and earnings capacity, the management structure and such other information as is customary or as Piper Jaffray considers appropriate in the circumstances; (c) make initial contacts with potential investors, lenders or purchasers approved by Mi Pueblo; (d) when appropriate, arrange and participate in visits to Mi Pueblo's facilities by potential investors or purchasers and otherwise making introductions and performing services as Piper Jaffray recommends to develop potential investors', lenders' or purchasers' interest in the business; (e) assist Mi Pueblo in negotiations with potential investors, lenders or purchasers as the Debtor reasonably requests; (f) if requested, provide expert testimony and support in a bankruptcy proceeding; (g) consult with Mi Pueblo in structuring any investment proposals; (h) assist Mi Pueblo in analyzing proposals received; (i) assist Mi Pueblo in preparing for due diligence conducted by potential investors, lenders or purchasers; and (j) assist Mi Pueblo in negotiating definitive documentation. As set forth in the Engagement Letter, the Debtor has agreed to compensate Piper Jaffray for its services under this Compensation Structure: (a) a non-refundable retainer fee of $50,000 (the "Retainer Fee"), payable up-front, which Retainer Fee will be applied to reduce any Placement Fee or Sale Fee; and (b) in the event Mi Pueblo consummates a Debt Placement and Equity Placement (a "Placement") pursuant to an agreement or commitment entered into during the term of Piper Jaffray's engagement, a cash fee, payable at closing of the Placement (the "Placement Fee"), equal to: - 1.5% on all sales or issuances of senior secured facilities not structured as a unitranche facility; - 2.0% on all sales or issuances of senior secured facilities structured as a unitranche facility; - 2.5% on all sales or issuances of second lien facilities; - 3.5% on all sales or issuances of subordinated facilities; - 5.5% on the gross proceeds received by Mi Pueblo on all sales of Equity Securities; Payable by wire transfer of immediately available funds at each closing; provided that Piper Jaffray's total fee for services that include a Debt and Equity Placement shall not be less than $750,000; (c) in the event of a Sale, pursuant to an agreement or commitment entered into during the term of our engagement, a cash fee, payable at closing of the Sale (the "Sale Fee"), equal to $1 million of the Aggregate Transaction Value up to $45 million and 2.5% of the Aggregate Transaction Value above $45 million; and (d) reimbursement of reasonable out-of-pocket expenses consistent with local Court guidelines, including, but not limited to, travel and reasonable allocation of database, printing, courier and communication costs, whether or not a Transaction occurs. Teri Stratton, managing director of Piper Jaffray, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Several parties-in-interest have lodged objections to the engagement. Wells Fargo Bank, National Association, says the Engagement Letter requires Mi Pueblo to use "commercially reasonable efforts" to permit the use of the Bank's cash collateral to pay for Piper Jaffray's fees and expenses. This phrase in the Engagement Letter is not defined and is ambiguous at best. In addition, the Bank will not consent to the use of its cash collateral to pay Piper Jaffray's out-of-pocket fees and expenses, especially since there is a source of funds in the Mi Pueblo bankruptcy estate to pay these out-of-pocket fees and expenses -- the $1,900,000 recently lent by Juvenal Chavez to the Debtor. The U.S. Trustee, meanwhile, objections to the indemnification proposed to be accorded Piper Jaffray. The U.S. Trustee said the terms and scope of the indemnity is inconsistent with the practices of this Court and should not be approved. The indemnity provisions are unreasonable under the circumstances of this case. They expose the estate to unknown and potentially unlimited liability. The Official Committee of Unsecured Creditors believes that any order authorizing the employment of Piper Jaffrayas as investment banker should specifically provide for Piper Jaffray to report to, and to be responsible to, the Committee, as well as to the Debtor. In response to the Objections, Mi Pueblo believes the concerns raised by Wells Fargo have merit. Wells Fargo Bank has pointed out problems with the extension of items for which Piper Jaffray seeks compensation. Mi Pueblo agrees it will include a report to Wells Fargo in each of its weekly calls with the Bank and the Committee, as requested. The Debtor also notes that the Committee and Piper Jaffray may have already resolved their disputes over economic points. Mi Pueblo must however retain full authority to instruct Piper Jaffray in any negotiations and in communications with any counter-party over the approval of any and all transactions and have sole authority to direct Piper's actions. On the U.S. Trustee's objection, Mi Pueblo has been informed that Piper Jaffray has agreed to limit expenses to actual costs incurred. The only remaining objection is to the proposed indemnity. Attorney for Wells Fargo can be reached at: Robert B. Kaplan, Esq. JEFFER MANGELS BUTLER & MITCHELL LLP Two Embarcadero Center, Fifth Floor San Francisco, CA 94111-3813 Tel: (415) 398-8080 Fax: (415) 398-5584 E-mail: RKaplan@JMBM.com Attorney for the U.S. Trustee can be reached at: John S. Wesolowski, Esq. OFFICE OF THE UNITED STATES TRUSTEE U. S. Department of Justice 280 S. First Street, Suite 268 San Jose, CA 95113-0002 Tel: (408) 535-5525 ext. 231 E-mail: john.wesolowski@usdoj.gov Attorney for Official Committee of Unsecured Creditors can be reached at: Eric D. Goldberg, Esq. STUTMAN, TREISTER & GLATT PC 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Tel: (310) 228-5600 Fax: (310) 228-5788 About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MI PUEBLO: Drops GA Keen as Real Estate Advisor ----------------------------------------------- Mi Pueblo San Jose Inc. has told the U.S. Bankruptcy Court for the Northern District of California that it is withdrawing a request to employ GA Keen Realty Advisors LLC as real estate advisor. The Debtor's notice, dated Jan. 23, came after the Official Committee of Unsecured Creditors objected to the hiring, expressing various concerns to the Debtor's counsel regarding certain terms of agreement. The Debtor had agreed to resolve the Committee's concerns through a stipulated order. However, the Debtor had failed to provide to the Committee with any such stipulated order, which necessitated the filing of the Committee's objection. As reported in the Troubled Company Reporter on Dec. 30, 2013, the Debtor expects GA Keen to: (a) organize the lease information for each property and, jointly with the Debtor, establish negotiating goals and parameters, such as rent reductions, lease term modifications, extensions and other lease concessions; (b) contact the landlord for each property and seek to negotiate for modifications in accordance with the parameters established by the Debtor; and (c) work with the landlords, the Debtor, and the Debtor's counsel to document all lease modification proposals. Pursuant to the Agreement between the Debtor and GA Keen, upon execution of a lease modification agreement between the Debtor and a landlord, GA Keen will earn and the Debtor will pay GA Keen, on a per property basis, the base fee of $5,000 or 5% of any savings the Debtor achieved through the lease modification agreement. If the lease modification agreement creates non-monetary value but does not generate savings, then GA Keen will be paid, on a per property basis, the base fee. The Debtor agreed to reimburse GA Keen all reasonable out-of- pocket costs and expenses incurred by GA Keen in connection with performing the services required under the Agreement. Upon Court approval of the Agreement, the Debtor shall pay GA Keen a $10,000 advance against out-of-pocket expenses. GA Keen shall on a regular basis provide the Debtor with an accounting of its expenses and the Debtor agrees to reimburse GA Keen promptly upon request from time to time for all out-of-pocket expenses so that GA Keen shall maintain on account the $10,000 advance. At the conclusion of the engagement, GA Keen shall promptly return to the Debtor the remaining balance of the expense account following payment to GA Keen of all fees due and owing. Mark Naughton, general counsel for GA Keen, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. GA Keen can be reached at: Mark Naughton, Esq. GA KEEN REALTY ADVISORS, LLC 420 Lexington Ave., Suite 3001 New York, NY 10170 About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MI PUEBLO: May Reject Consulting Contract With Vince Alvarado ------------------------------------------------------------- The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California authorized Mi Pueblo San Jose Inc. to reject the executive continuity and consulting contract of Vince Alvarado. The Debtor said it is not authorized to enter into a new employment contract with Mr. Alvarado without further Court order. As reported in the Troubled Company Reporter on Oct. 28, 2013, the Official Committee of Unsecured Creditors in the Chapter 11 case of Mi Pueblo asked the Court to deny the Debtor's motion to reject Mr. Alvarado's agreement. According to the Committee, under the terms of the agreement, Mr. Alvarado is obligated to provide certain consulting services to the Debtor that will be phased out over time, ending on Dec. 31, 2015. In return for these services, the Debtor agreed to pay substantial amounts and to provide certain benefits to Mr. Alvarado. In addition, the Debtor agreed to pay Mr. Alvarado a bonus in the amount of $200,000 at the end of January 2014. The Committee noted that the motion provides no information regarding the effect that rejection of the agreement may have on the Debtor's estate. In particular, the motion makes no reference to the effect that rejection of the agreement may have on any claim that Mr. Alvarado may assert against the estate. Additionally, the Committee said that the motion contains inadequate information to determine whether rejection is in the interest of creditors. About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MOMENTIVE PERFORMANCE: S&P Lowers CCR to 'CCC-'; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Albany, N.Y.- based Momentive Performance Materials Inc. (MPM) to 'CCC-' from 'CCC'. The outlook is negative. At the same time, S&P lowered the rating on MPM's first-priority senior secured notes to 'CCC' from 'CCC+'. The issue rating is one notch above the corporate credit rating. The recovery rating remains unchanged at '2', indicating S&P's expectation of substantial (70% to 90%) recovery in the event of a payment default. In addition, S&P lowered the ratings on MPM's 10% senior secured notes due 2020 (the 1.5-lien notes), second-priority, and subordinated notes to 'C' from 'CC'. This rating is two notches below the corporate credit rating. The recovery rating remains unchanged at '6', denoting S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. "The downgrade follows several quarters of negative free operating cash flow and declining liquidity through Sept. 30, 2013," said Standard & Poor's credit analyst Cynthia Werneth. In S&P's view, prospects for sufficient improvement to stave off a payment default or debt restructuring within the first three quarters of 2014 are dim. Moreover, liquidity will likely be constrained later this year by covenant restrictions and the expiration of the smaller of MPM's two revolving credit facilities. MPM is a large producer of silicones, which represents the large majority of its sales and EBITDA. It also produces quartz, which is used primarily in the production of semiconductors. Significant silicone industry capacity additions have led to oversupply and competitive market conditions in a lackluster global economy, and the quartz business is suffering because of weak electronics end markets. S&P regards the company's business risk profile as "weak" as defined in its criteria. The outlook is negative. S&P's forecast is for continued negative free operating cash flow as silicone overcapacity, cyclically depressed demand for quartz, and a tepid global economy outweigh the slight uptick in MPM's EBITDA. This trend will cause MPM's liquidity position to dwindle and heighten the risk of default. S&P would lower the ratings again if, as it expects, the company defaults on any of its debt obligations or voluntarily restructures or repurchases its debt in a fashion that results in anything less than full and timely repayment. While S&P considers it less likely, it could revise the outlook to stable if MPM's earnings and cash flow strengthen, its leverage declines, and its liquidity stabilizes at a level S&P considers adequate. For this to occur, global economic conditions would have to strengthen to a greater extent and faster than S&P currently expects, resulting in higher silicone and quartz demand and better pricing. S&P regards a higher rating as unlikely, given the company's current capital structure. S&P considers MPM's debt leverage unsustainable, even under improved economic and market conditions. NEXEO SOLUTIONS: Moody's Rates $170MM Add-on Term Loan 'B2' ----------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family rating and the B2-PD probability of default rating of Nexeo Solutions, LLC and instrument ratings, but revised the ratings outlook to negative. Moody's also assigned a B2 rating to the $170 million incremental Term Loan B-3 due 2017 with Nexeo Solutions Holdings, LLC and Nexeo Solutions Sub Holding Corp. as co-borrowers under the new term loan and existing ABL facility. The proceeds of the term loan will be used to reduce revolver borrowings, general corporate purposes and to provide dry powder for potential additional acquisitions. The change in the outlook reflects the increase in debt to support their growth strategy, as well as margins and credit metrics that remain weak for the rating. Moody's took the following rating actions: Nexeo Solutions, LLC , Nexeo Solutions Holdings, LLC, Nexeo Solutions Sub Holding Corp. -- Assigned B2 (LGD4-51%) to $170 million Incremental Term Loan B-3 due 2017 Nexeo Solutions, LLC -- Affirmed B2 CFR -- Affirmed B2-PD PDR -- Affirmed B2 on senior secured Term Loan B-1 and Term Loan B-2 due 2017, LGD changed to LGD4-51% from LGD3-46% -- Affirmed Caa1 on $175 million subordinated notes due 2018, LGD changed to LGD6-92% from LGD6-90% -- Revised outlook to negative from stable. Ratings Rationale The changes in Nexeo's outlook to negative reflects the company's elevated leverage following its debt-financed acquisition of Chemical Specialists and Development Inc (CSD) and two related businesses for approximately $100 million in December 2013. Pro forma for the incremental term loan issuance , Nexeo's Debt/EBITDA will rise to an estimated 6.3x as of December 31, 2013 from 5.7x as of September 31, 2013. Leverage is high for the rating and is expected to remain elevated until the company realizes the full benefit of its recent acquisitions, largely due to the elevated valuation multiple associated with the transactions. Nexeo Solutions' B2 CFR reflects its size and market position in North America, as well as its high leverage, history of inconsistent free cash flow generation, low operating margins (lower than management's expectations for an average through-the- cycle EBITDA target), and working capital fluctuations. Moody's would consider a downgrade of the CFR if proforma leverage continues to weaken due to additional acquisitions and if margins do not rise above 4% in 2014. The prospect for an upgrade is unlikely as the ratings are limited by the company's leverage and cash flow expectations. Moody's could reassess the ratings should Nexeo Solutions improve its profit margins, generate positive free cash flow consistently, and lower its leverage (Debt/EBITDA) to around 4.0x. The principal methodology used in this rating was the Global Chemical Industry Rating Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Nexeo Solutions LLC (Nexeo Solutions) is one of the largest distributors of chemicals and providers of related services in North America, where it sources over 80% of its revenues. The company also has operations in Europe and China. The company distributes chemicals, plastics and composites and provides environmental services (only 3% of revenue). Private equity firm TPG Capital purchased Ashland Inc.'s distribution business in an leveraged buyout transaction for $930 million to form Nexeo Solutions in 2011. Nexeo Solutions had revenues of $4.4 billion for the year ending September 30, 2013. NEXEO SOLUTIONS: S&P Assigns 'B+' Rating to Incremental Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' issue rating and '4' recovery rating to Nexeo Solutions LLC's incremental term loan facility. S&P also raised its issue ratings on the company's existing term loan facilities to 'B+' from 'B' and revised its recovery rating to '4' from '5'. The '4' recovery rating indicates S&P's expectation of average recovery (30% to 50%) in the event of a payment default. At the same time, S&P affirmed its 'B-' issue rating on the company's senior subordinated notes. The recovery rating on this debt remains '6', indicating S&P's expectation for a negligible recovery (0% to 10%) in the event of a payment default. S&P also affirmed its 'B+' corporate credit rating on Nexeo. The outlook is stable. "The ratings on Nexeo reflect the company's position in the relatively stable and diverse chemicals, plastics, and composites distribution business, but also its below-average profitability and the risks associated with its financial sponsor ownership," said Standard & Poor's credit analyst Seamus Ryan. S&P believes the company will benefit from industry growth as well as from acquisitions that will allow it to gradually improve leverage. S&P assess Nexeo's financial risk profile as "highly leveraged" and its business risk profile as "fair". The ratings also reflect a positive adjustment of one notch to S&P's 'b' anchor on Nexeo as a result of its favorable assessment of the comparable ratings analysis modifier. Based on S&P's base-case expectations, it believes Nexeo's credit metrics will remain somewhat stronger than those of other financial sponsor-owned companies it deems as having "highly leveraged" financial risk profiles. The stable outlook reflects S&P's expectations that favorable demand trends and the benefits of recent acquisitions will allow the company to gradually reduce leverage from current levels. S&P do not believe the company will increase debt to fund further acquisitions or return cash to shareholders over the next year. At the rating, S&P expects the company to maintain debt to EBITDA at or slightly below 5.0x. S&P could lower the ratings if an unfavorable product-mix shift, unexpected volume deterioration, or problems integrating recent acquisitions lead to stagnant revenue or gross margins declining by about 50 basis points. Such a scenario could result in debt to EBITDA above 5.5x, with limited likelihood of improvement to S&P's expected range within 12 months. S&P could also lower ratings if additional debt pushes leverage to this same level. The company's ownership by a financial sponsor limits the potential for a higher rating over the next year. However, if Nexeo were to improve product mix, selling prices, or realign its cost structure to the point where S&P would expect the company to sustain EBITDA margins well above 5%, it could consider a better business risk profile and a higher rating. NINE HOMES: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: The Nine Homes, LLC 241 E. Davis Blvd. Tampa, FL 33606 Case No.: 14-01489 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Scott A. Stichter, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: 813-229-0144 Fax: 813-229-1811 Email: sstichter.ecf@srbp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ramon Perez, president of Homeworksbuilders, Inc., manager. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. NNN 123: Plan Exclusivity Period Extended Until March 3 ------------------------------------------------------- The Hon. Jack B. Schmetterer of the U.S. Bankruptcy Court for the Northern District of Illinois further extended the exclusive periods of NNN 123 North Wacker, LLC, et al., to: a) file a proposed Chapter 11 plan until March 3, 2014; and b) solicit acceptances of that plan through and until May 2, 2014. Judge Schmetterer scheduled a hearing on Feb. 28, 2014, at 11:00 a.m., on the Debtor's request. In its motion, the Debtor seeks to extend the plan filing and solicitation deadlines to May 4, 2014, and July 4, 2014, respectively. As reported in the Troubled Company Reporter on Feb. 5, 2014, NNN 123 North Wacker 1 LLC and the other tenants, who own more than 86% of the property that constitutes the only significant asset of Debtors, objected to the Debtors' extension request, alleging that the Debtors' bankruptcy case was filed in bad faith and without proper consent. The Debtors related they have made significant progress in negotiations with the lenders, and they need additional time to conclude those discussions in relation to the plan and the explanatory disclosure statement. The Debtors have proposed these extensions: Deadline Current Date Proposed Date -------- ------------ ------------- Plan Exclusivity Deadline Feb. 3 May 4 Solicitation Deadline April 25 July 1 Plan Filing Feb. 6 May 4 Plan Status Hearing Feb. 18 Week of May 19 General Claims Objection Deadline Feb. 3 April 14 About NNN 123 North Wacker, LLC NNN 123 North Wacker, LLC, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-39210) on Oct. 4, 2013 in Chicago, represented by Andrea Johnson Frost, Esq., at Kaye Scholer LLC, as counsel. The Debtor disclosed total assets of $24.95 million and total liabilities of $135.47 million in its Schedules. Another entity, NNN 123 North Wacker Member LLC, sought Chapter 11 protection (Case No. 13-39240) on the same day. OCEANSIDE MILE: Files Chapter 11 Plan; Hotel Valuation Disputed --------------------------------------------------------------- Oceanside Mile LLC last month filed a proposed Chapter 11 Plan of Reorganization. The Debtor said it is continuing to negotiate with two independent parties for sale of its Seabonay Resort Hotel at between $12.59 million and $13 million. These sales cannot be concluded within the short time constraints imposed for the filing of the Plan. The Debtor has obtained a recent appraisal in connection with a proposed postpetition takeout financing, which values the hotel at $9.25 million. In its support of its stay relief motion, First Citizens Bank produced an appraisal report valuing the hotel at $5.9 million. As a result, the Debtor intends to request a valuation hearing in connection with the confirmation of the Plan. Under the Debtor's plan, First Citizens will receive an initial principal payment five days of the Effective Date, then monthly payments of interest, and payment of remaining principal on the earlier of the closing of the sale of the hotel or Feb. 28, 2017. Holders of general unsecured claims totaling $127,617 will receive 10 semiannual payments of $12,762. Holders of interests in the Debtor will retain their interests. A copy of the Disclosure Statement dated Jan. 7, 2014, is available for free at: http://bankrupt.com/misc/Oceanside_Mile_Plan_Outline.pdf http://bankrupt.com/misc/Oceanside_Mile_Plan_Outline_2.pdf http://bankrupt.com/misc/Oceanside_Mile_Plan_Outline_3.pdf About Oceanside Mile Oceanside Mile LLC owns the Seabonay Resort Hotel, a resort hotel located in an affluent area of Florida's Hillsboro Beach, which is perched on the Atlantic Ocean. The hotel is close to Fort Lauderdale and its suburbs; three miles south of Boca Raton, and a mile east of Deerfield Beach. The hotel has 81 rooms and total 1.29 acres. Oceanside Mile filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-35286) on Oct. 17, 2013. Arturo Rubinstein signed the petition as managing member. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million. Judge Barry Russell presides over the case. The Debtor is represented by Sandford L. Frey, Esq., Stuart I. Koenig, Esq., and Martha C. Wade, Esq., at Creim Macias Koenig & Frey LLP, in Los Angeles, California. First-Citizens Bank & Trust Company is represented by Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case LLP, in Los Angeles, California. OCZ TECHNOLOGY: Sells Power Supply Business Assets for $850,000 --------------------------------------------------------------- OCZ Technology Group, Inc., now known as ZCO Liquidating Corporation, sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to sell its power supply business assets to Firepower Technology, Inc., for $850,000. About OCZ San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ) designs, manufactures, and distributes high-performance solid- state storage solutions and premium computer components. OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation for $35 million. As of the bankruptcy filing, the Debtors had funded indebtedness of $29.3 million and general unsecured trade obligations of $31.4 million. The Debtors are represented by Mayer Brown LLP's Sean T. Scott, Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman, Esq., as Delaware local counsel. Deutsche Bank is the Debtors' investment banker. Mike Rizzo Jr. at RAS Management Advisors, LLC, serves as financial advisors to the Debtors. The Hon. Peter J. Walsh presides over the case. Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams, Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the official committee of unsecured creditors, and Greenberg Traurig, LLP's Dennis A. Meloro, Esq. serves as local counsel. OCZ Technology, on Jan. 17, 2014, received approval from the Bankruptcy Court to sell substantially all of its assets to Toshiba Corporation for $35 million. OCZ Technology changed its name to ZCO Liquidating Corporation. OCZ TECHNOLOGY: Name Changed to ZCO Liquidating Corporation ----------------------------------------------------------- OCZ Technology Group, Inc., is now known as ZCO Liquidating Corporation, according to a filing with the U.S. Bankruptcy Court for the District of Delaware. The change in name follows the sale of substantially all of the company's assets to Toshiba in January 2014. About OCZ San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ) designs, manufactures, and distributes high-performance solid- state storage solutions and premium computer components. OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation for $35 million. As of the bankruptcy filing, the Debtors had funded indebtedness of $29.3 million and general unsecured trade obligations of $31.4 million. The Debtors are represented by Mayer Brown LLP's Sean T. Scott, Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman, Esq., as Delaware local counsel. Deutsche Bank is the Debtors' investment banker. Mike Rizzo Jr. at RAS Management Advisors, LLC, serves as financial advisors to the Debtors. The Hon. Peter J. Walsh presides over the case. Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams, Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the official committee of unsecured creditors, and Greenberg Traurig, LLP's Dennis A. Meloro, Esq. serves as local counsel. OCZ Technology, on Jan. 17, 2014, received approval from the Bankruptcy Court to sell substantially all of its assets to Toshiba Corporation for $35 million. OPTIM ENERGY: Files for Bankruptcy Protection --------------------------------------------- Katy Stech, writing for The Wall Street Journal, reported that that electricity producer Optim Energy LLC, owned by Bill Gates ' investment company, filed for bankruptcy on Feb. 12, saying it may have to sell one of its three Texas power plants to help repay bank debt of roughly $713 million. According to the Journal, Optim Energy executives placed the company into Chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., and said in court papers that the company doesn't have enough cash to "safely and effectively" operate its plants. The Chapter 11 filing, company officials said, would give Optim access to a $115 million bankruptcy loan from owner Cascade Investment LLC, the Microsoft co-founder's investment arm, the Journal related. The DIP requires the debtor to sell its Twin Oaks plant in Robertson County, Texas, which is capable of producing up to 305 megawatts of electricity, The Deal reported. Optim said in the DIP motion that the Twin Oaks plant has had combined operating losses of $11.5 million over the past two years. At a court hearing on Feb. 12, Judge Brendan Linehan Shannon gave the company permission to begin spending its bankruptcy loan, the Journal related. Electricity prices began plummeting soon after Optim's founding in 2007, making it difficult for the company to repay the money it borrowed to buy the 600 megawatt natural-gas powered Altura Cogen plant in Texas and to build another, the Journal further related. CEO Nick Rahn said in a declaration that the company has struggled to service its $1 billion facility with Wells Fargo Bank NA in the wake of depressed wholesale electricity prices caused by the recession, The Deal said. Optim listed $100 million to $500 million in assets and $500 million to $1 billion in liabilities in its petition, but it currently owes $712 million on the Wells Fargo facility, which was issued on June 1, 2007, and is set to mature on June 1, 2015, The Deal pointed out. OSX BRASIL: Seeks to Reach Debt Deal with Bondholders This Week --------------------------------------------------------------- Luciana Magalhaes, writing for The Wall Street Journal, reported that Brazilian shipbuilding firm OSX Brasil SA, controlled by businessman Eike Batista, will try to reach agreements with its bondholders by the end of this week as it struggles to exit bankruptcy protection, a top executive said on Feb. 12. According to the report, OSX and advisers for its international bondholders plan to meet in New York on Feb. 13 and 14 to discuss a plan that could include a new payment schedule and give the company more time to meet a March interest payment, said Claudio Antonio da Silva Zuicker, OSX's chief financial officer and head of investor relations. The talks will include the possibility of lowering the daily rate that OSX is charging sister company Oleo e Gas Participacoes SA for use of its OSX-3 floating, production, storage and offloading vessel, currently in operation at the Tubarao Martelo field, the report related. Oleo e Gas was formerly known as OGX Petroleo e Gas Participacoes SA, the flagship company of Mr. Batista's business empire. OSX has $500 million in bonds outstanding and missed an $11.6 million interest payment in December, the report further related. Its bonds, which are guaranteed by the OSX-3 vessel, mature in 2015 and carry a 9.25% coupon. "We are in negotiations with our bondholders and with Oleo e Gas to create a package that will leave OSX up-to-date on its payments," Mr. Zuicker said, the report cited. OVERSEAS SHIPHOLDING: Has Court Authority to Outsource Int'l Fleet ------------------------------------------------------------------ Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized Overseas Shipholding Group, Inc., et al., to outsource certain management services, including but not limited to, the technical management, certain aspects of commercial management, and crew management of certain Debtors' core international flag fleet to V.Ships UK Limited. The international fleet consists of 33 owned or chartered-in vessels. The Debtors said savings from the outsourcing arrangement are targeted at approximately $32 million on an annualized basis once the outsourcing is fully implemented. The Debtors anticipate that the outsourcing will be completed by approximately June 30, 2014. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that market prices indicate that a plan will pay noteholders in full. OSG's $300 million in 8.125 percent senior unsecured notes due 2018 traded on Jan. 31 for 113.935 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. They were trading around par in November and sold for as little as 18.75 cents on the day of bankruptcy. OSG's shares fell 9.1 percent to $8.05 on Feb. 3 in over-the- counter trading, Mr. Rochelle related. The stock sold for about 55 cents when the company filed for bankruptcy in November 2012. About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), 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. PENFOLD CAPITAL: OSC Grants Temporary Management Cease Trade Order ------------------------------------------------------------------ Penfold Capital Acquisition IV Corporation on Feb. 11 disclosed that it has been granted a Temporary Management Cease Trade Order by its principal regulator, the Ontario Securities Commission. As previously announced on Jan. 29, 2014, a MCTO was made by the Company in respect of the late filing of the Company's its annual financial statements, accompanying management's discussion and analysis and related CEO and CFO certifications of annual filings for the financial year ended Sept. 30, 2013. The Temporary MCTO restricts all trading in securities of the Company, whether direct or indirect, by the Chief Executive Officer, the Chief Financial Officer and the directors of the Company, until such time as the Required Filings have been filed by the Company. All other parties are permitted to freely trade in the Company's securities. The Ontario Securities Commission has given notice of a hearing to be held on Feb. 18, 2014, for the purposes of making the Temporary MCTO permanent if the Company has not remedied the default in the filing the Required Filings. As previously announced, the Company was not in a position to timely file its Required Filings, primarily as a result of additional time required to complete the audit of the Company's annual financial statements. The Company's board of directors and its management confirm that they are working expeditiously with the Company's auditors to meet the Company's obligations relating to the filing of the Required Filings, and the Company continues to expect to file the Required Filings on or before February 18, 2014. The Company confirms that it will satisfy the provisions of the alternative information guidelines under Section 4.4 of National Policy Statement 12-203 respecting Cease Trade Orders for Continuous Disclosure Defaults, for so long as it remains in default, by issuing bi-weekly default status reports in the form of further news releases, which will also be filed on SEDAR. The Company confirms that there are no insolvency proceedings against it as of the date of this news release. The Company also confirms that there is no other material information concerning the affairs of the Company that has not been generally disclosed as of the date of this news release. About Penfold Capital Acquisition IV The Company, through its wholly owned subsidiary SLM, is dedicated to managing consumer and retail store returns and defective and problematic electronics through product end-of-life management. The Company provides manages returns from receiving to end-of-life with quality assurance testing, factory servicing, resale through non-traditional channels and recycling of non saleable product to support a closed-loop distribution process. The Company is able to recycle the non-saleable returns it receives, thereby allowing customer returns to have a very low environmental impact. An independent Waste Audit Report shows that the Company is able to achieve a waste diversion rate of 98.6%. This means that companies using the Company's processes are able to divert 98.6% of their product from landfill sites. The Company is currently working on rolling out this product offering to retailers to allow them to capture the environmentally conscious consumer. The Company currently operates only in Ontario. PERSONAL COMMUNICATIONS: Watchdog Rips Proposed $2.7MM CEO Bonus ---------------------------------------------------------------- William K. Harrington, the U.S. Trustee for Region 2, objects to Personal Communications Devices, LLC, et al.'s request to pay obligations arising under an incentive plan agreement as an administrative expense. The Debtors are seeking authority to pay their Chief Executive Officer bonuses of up to $2.7 million in total in line with the consummation of the sale of substantially all of their assets. The Debtors assert that the KEIP provided for in prepetition agreements -- calculated on a sliding scale tied to the results achieved from the sale -- is an incentive payment. The Debtors, however, failed to establish that the yardstick established under Section 503(c)(1) of the Bankruptcy Code, by which KEIP payments may be made to insider employees, has been met, the U.S. Trustee argues. In fact, the U.S. Trustee asserts, the KEIP did not function to incentivize the participant, because the level of proceeds from the sale of the Debtors' assets negotiated prior to the Petition Date already guaranteed that the insider -- without doing anything more to find other bidders -- would receive a substantial bonus. Rather, the U.S. Trustee says, the KEIP was designed to induce the insider to remain with the Debtors through the Chapter 11 sale process. A hearing on the Debtors' request will be on Feb. 12, 2014, at 2:00 p.m., before the U.S. Bankruptcy Court for the Eastern District of New York. About PCD Personal Communications Devices LLC and an affiliate, Personal Communications Devices Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013, in Central Islip, N.Y. The Debtor disclosed $247,952,684 in assets and $284,985,134 in liabilities as of the Chapter 11 filing. PCD -- http://www.pcdphones.com-- was in the business of providing carriers and manufacturers an array of product life cycle management services that includes planning and development; inventory; technical testing; quality control; forward and reverse logistics; sell-in and sell-thru, marketing & warranty support. PCD sold its assets to Quality One Wireless LLC for $105 million in October 2013. The bankruptcy auction was cancelled as no competing offers were submitted. Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. BG Strategic Advisors, LLC, is the financial advisor. Richter Consulting, Inc., is the investment banker. Q1W is advised by Raymond James and Associates, Inc. and Munsch Hardt Kopf & Harr, P.C. A three-member official committee of unsecured creditors was appointed in the Chapter 11 case. The Committee retained FTI Consulting, Inc., as financial advisor, and Perkins Coie LLP as counsel. PHH CORP: CFPB Sues Mortgage Lender over Kickbacks -------------------------------------------------- Law360 reported that The Consumer Financial Protection Bureau on Jan. 29 administratively charged PHH Corp. and its mortgage reinsurance subsidiaries with harming consumers through a mortgage insurance kickback scheme. According to the report, in a complaint naming New Jersey-based PHH, PHH Home Loans LLC, Atrium Insurance Corp. and Atrium Reinsurance Corp., the CFPB alleged that when PHH originated mortgages, it referred consumers to mortgage insurers with which it partnered. In exchange for this referral, these insurers purchased reinsurance from PHH's subsidiaries. PHH allegedly took the reinsurance fees as kickbacks, in violation of the Real Estate Settlements Procedures Act. The CFPB alleges that because of PHH's scheme, consumers ended up paying more in mortgage insurance premiums, the report said. "The bureau believes that from the start of the arrangements [as early as 1995], and continuing into at least 2009, PHH manipulated its allocation of mortgage insurance business to maximize kickback reinsurance payments for itself," the CFPB said in a statement, the report cited. PHH and its affiliates are specifically accused of setting up a system whereby it received as much as 40 percent of the premiums that consumers paid to mortgage insurers, collecting hundreds of millions of dollars in kickbacks, the report related. They also allegedly charged more money for loans to consumers who did not buy mortgage insurance from one of its kickback partners, and, in general, charged consumers additional percentage points on their loans. The Troubled Company Reporter on Aug. 8, 2013, reported that Standard & Poor's Ratings Services said it assigned its 'BB-' rating on PHH's $300 million senior unsecured notes due in 2021. The long-term issuer credit rating on PHH is 'BB-', and the outlook is stable. The TCR also reported on the same day that Fitch Ratings expects to assign a 'BB' rating to PHH Corporation's proposed $300 million senior unsecured note issuance due 2021. The proceeds from the issuance, along with unrestricted cash on hand, will be used to tender $300 million of PHH's existing $450 million, 9.25% senior unsecured notes due March 2016 (2016 notes). PUNCH TAVERNS: Scraps Doomed Vote on Debt Revamp ------------------------------------------------ Laura Board, writing for The Deal, reported that Punch Taverns plc, the U.K. pubs operator, which has been working on a GBP2.3 billion ($3.8 billion) debt restructuring for more than 14 months, on Feb. 12 scrapped votes on the fourth incarnation of its plan to avoid certain defeat. According to the report, Punch holds its debt through two securitizations, spawned during a precredit crisis acquisition spree, split into 16 tranches, and backed by its 4,000-plus pubs. The debt restructuring was designed simplify this complex capital structure, reduce borrowing costs and avoid consistently having to divert cash from an intermediate holding company to the securitizations to ensure they adhere to their covenants. But institutional investors holding blocking stakes of 25% or more in the senior debt in its two securitizations said they would vote against the plan, and were later joined by hedge funds Angelo Gordon Europe LLP, Oaktree Capital Management LP and Warwick Capital Partners LLP, which also hold blocking positions in certain Punch debt, the report said. "Following feedback from a range of stakeholders, Punch has decided to withdraw the resolutions which were to be put to the noteholder meetings convened for 14 February 2014 in order to facilitate a period of further engagement with stakeholders," the Burton-on-Trent, England company said, the report cited. "As previously announced, both securitizations will default without a consensual restructuring. The board remains of the view that a consensual restructuring is in the best interests of all stakeholders and can be agreed ahead of the next covenant reporting date of 15 April 2014." The move removes the threat of a near-term default, which Punch Chairman Stephen Billingham said last month could occur as early as late February, the report related. It also marks one of a long line of deadline extensions to get Punch's debt revamp off the ground. Q MERGER SUB: Moody's Rates Proposed $305MM Unsecured Notes Caa1 ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Q Merger Sub Inc.'s (acquirer of CEC Entertainment) proposed $305 million senior unsecured notes due 2022. In addition, Moody's affirmed the B1 ratings for Q Merger Sub's proposed $150 million guaranteed senior secured revolving credit facility and $725 million guaranteed senior secured term loan B. Moody's also affirmed Q Merger Sub's B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR). The outlook is stable. Ratings Rationale Proceeds from the proposed note offering and bank facilities along with approximately $350 million in common equity contributed by an affiliate of Apollo Investments will be used to fund the acquisition of CEC Entertainment Inc. (CEC) and to repay any outstanding amount on its $305 million bridge loan. Upon consummation of the acquisition, Q Merger Sub Inc. will be merged with and into CEC, with CEC being the surviving entity and assuming the obligations of Q Merger Sub Inc. Upon the successful consummation of the transaction, Moody's will change the name of the rated entity to CEC Entertainment Inc. from Q Merger Sub Inc. Moody's ratings are subject to review of final documentation. The B2 Corporate Family Rating reflects CEC's high leverage and modest coverage, driven in part by weak same store sales performance and Moody's concern that soft consumer spending and competition will continue to pressure earnings and debt protection metrics. The ratings also incorporate the high seasonality of CEC's earnings in the first quarter and store concentration in California and Texas. The ratings are supported by our expectation that CEC's marketing initiatives with greater media focus towards children, birthdays and overall value should help stabilize and grow same store sales, leverage its store base and drive higher earnings. The ratings also factor in CEC's meaningful scale, reasonable level of brand awareness, and good liquidity. Rating assigned: $305 million senior unsecured notes due 2022 rated Caa1 (86%, LGD5) Ratings affirmed are: Corporate Family Rating of B2 Probability of Default Ratings of B2-PD $150 million guaranteed senior secured revolver due 2019, rated B1 (32%, LGD3) $725 million guaranteed senior secured term loan B due 2021, rated B1 (32%, LGD3) The stable outlook reflects Moody's view that CEC's revised marketing initiatives will drive improvement in same store sales, earnings and cash flows that will more than support significantly higher interest expense. Moody's expects the company to maintain good liquidity while reducing debt well above required amortization as it focuses on a less capital intensive franchise growth model beginning in 2015. Given CEC's high leverage and modest coverage, a higher rating over the near term is unlikely. However, factors that could result in an upgrade over the intermediate term include a sustained improvement in earnings and debt protection metrics driven by positive operating trends and lower debt levels. Specifically, an upgrade would require debt to EBITDA of under 5.0 times, EBITA coverage of interest of over 2.0 times, and retained cash flow to debt of well over 10% on a sustained basis. A higher rating would also require maintaining good liquidity. Ratings could be downgraded in the event operating trends (same store sales) remained negative causing earnings and cash flows to fall short of Moody's current expectations. Specifically, a downgrade could occur in the event debt to EBITDA failed to migrate towards 6.0 times or EBITA to interest didn't strengthen to around 1.5 times on a sustained basis within the next 12 months. A material deterioration in liquidity for any reason could also result in negative ratings pressure. CEC Entertainment, Inc., headquartered in Irving, Texas, owns, operates, and franchises a total of 577 Chuck E. Cheese stores that provide family-oriented entertainment. Annual revenues are approximately $822 million. The principal methodology used in this rating was the Global Restaurant Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. REYNOSO VINEYARDS: Full-Payment Plan Confirmed in December ---------------------------------------------------------- Reynoso Vineyards Inc. has won confirmation of its bankruptcy-exit plan. Judge Alan Jaroslovsky held a hearing Dec. 20 and subsequently entered an order confirming the plan. The order noted that the plan has been accepted in writing by the creditors whose acceptance is required by law; and the plan complies with the applicable provisions of Chapter 11 of the Bankruptcy Code. The Plan dated Dec. 17, 2013, provides that shareholders will retain their equity position. First lien and second lien creditors will be paid in full with interest over time. Holders of allowed unsecured claims shall be paid in full in 60 equal monthly installments. A copy of the Plan is available for free at: http://bankrupt.com/misc/Reynoso_Vineyards_Plan.pdf About Reynoso Vineyards Inc. Reynoso Vineyards Inc. filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-11640) in Santa Rosa, California, on Aug. 26, 2013. The Debtor disclosed $15.8 million in assets and $9.34 million in liabilities in schedules filed together with the petition. The Debtor owns a 395-acre property at River Road, in Cloverdale, California. The property has 148 acres planted with wine grapes and 9 buildings, which consist of 5 single family dwellings, 2 barns and 2 sheds. The property is valued at $14 million and secures and $8.7 million debt to Exchange Bank. The Debtor is represented by Michael C. Fallon, Esq., at the Law Offices of Michael C. Fallon, in Santa Rosa, California. ROTECH HEALTHCARE: Judge Slashes Baker & McKenzie Fee Request ------------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge slashed Baker & McKenzie LLP's $1 million fee request in the Rotech Healthcare Inc. Chapter 11 by $300,000, ruling that the law firm ran up an "unreasonable" professional fee tab while it represented the ultimately out-of-the-money equity committee. According to the report, at a hearing in Wilmington, U.S. Bankruptcy Judge Peter J. Walsh said the objections lodged by the reorganized debtor against the fee requests, which said the firm wasted time and money drawing the case into unnecessary litigation, were "on point." About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor served as counsel to the Debtors; Foley & Lardner LLP was the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP was the special healthcare regulatory counsel; Barclays Capital Inc. was the financial advisor; Alix Partners, LLP was the restructuring advisor; and Epiq Bankruptcy Solutions LLC was the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders were represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is represented by Bayard, P.A. as Delaware counsel. Rotech on Aug. 29 disclosed that the Bankruptcy Court has approved the Second Amended Joint Plan of Reorganization, along with $358 million of exit financing commitments received from Wells Fargo and certain existing holders of the 10.5% Senior Second Lien Secured Notes. The reorganization plan was confirmed at a court hearing in Delaware and was supported by the Statutory Committee of Unsecured Creditors. Creditors entitled to vote overwhelmingly voted in favor of the reorganization plan. Under the reorganization plan, the Company's existing common stock will be cancelled and substantially all of the new common stock of reorganized Rotech will be distributed to holders of the 10.5% Senior Second Lien Secured Notes. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Company, on Sept. 27, 2013, implemented the reorganization plan approved when a bankruptcy judge in Delaware signed a confirmation order on Aug. 29. ROTECH HEALTHCARE: Equity Committee Fees Cut $300,000 by Judge -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Rotech Healthcare Inc., the third-largest U.S. provider of home respiratory equipment and services, is only paying 70 percent of the fees requested by the law firm Baker & McKenzie LLP, counsel for the official shareholders' committee. According to the report, after Rotech filed for Chapter 11 reorganization in April, it proposed a plan offering 10 cents a share to stockholders. The plan implemented in September had nothing for equity holders, in part because they mounted an unsuccessful fight for a bigger payout. Just before a pivotal hearing in August, the equity committee's valuation expert issued a report that didn't show solvency, the report said. At that time, Baker & McKenzie sought permission from the bankruptcy judge to withdraw as counsel. The nature of the disagreement between the firm and the committee was never made public. Baker filed a request for approval of just over $1 million in fees, the report related. Rotech and the creditors' committee objected. At a hearing on Jan. 31, U.S. Bankruptcy Judge Peter Walsh cut the fees by $300,000, according to court records. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor served as counsel to the Debtors; Foley & Lardner LLP was the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP was the special healthcare regulatory counsel; Barclays Capital Inc. was the financial advisor; Alix Partners, LLP was the restructuring advisor; and Epiq Bankruptcy Solutions LLC was the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders were represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is represented by Bayard, P.A. as Delaware counsel. Rotech on Aug. 29 disclosed that the Bankruptcy Court has approved the Second Amended Joint Plan of Reorganization, along with $358 million of exit financing commitments received from Wells Fargo and certain existing holders of the 10.5% Senior Second Lien Secured Notes. The reorganization plan was confirmed at a court hearing in Delaware and was supported by the Statutory Committee of Unsecured Creditors. Creditors entitled to vote overwhelmingly voted in favor of the reorganization plan. Under the reorganization plan, the Company's existing common stock will be cancelled and substantially all of the new common stock of reorganized Rotech will be distributed to holders of the 10.5% Senior Second Lien Secured Notes. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Company, on Sept. 27, 2013, implemented the reorganization plan approved when a bankruptcy judge in Delaware signed a confirmation order on Aug. 29. SABRE GLBL: Moody's Rates New Sr. Secured Debt Due 2019 'B1' ------------------------------------------------------------ Moody's Investors Service assigned a B1 rating to Sabre GLBL Inc's proposed senior secured revolving credit facility due 2019. Sabre GLBL Inc, formerly known as Sabre Inc., is a wholly-owned subsidiary of Sabre Holdings Corporation ("Sabre"). The rating on the existing senior secured revolving credit facility due 2018 will be withdrawn when it is terminated. Sabre is refinancing its existing senior secured debt to reduce interest expense and extend the revolver maturity. Ratings Rationale "The proposed term loan price reduction and revolving credit facility maturity extension are positive credit developments as they lower interest expense by about $17.5 million per year and lengthen external liquidity to 2019; however, ratings are unchanged," said Edmond DeForest, Moody's Senior Analyst. Assignments: Issuer: Sabre GLBL Inc. Senior Secured Bank Credit Facility, Assigned B1, LGD3, 42 % The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sabre operates one of the three largest global distribution systems, a leading software-as-a-service business that provides technology solutions to travel suppliers globally, and an online travel agency (Travelocity). Sabre is owned by TPG Partners, Silver Lake Partners and other co-investors. Moody's expects fiscal 2014 revenue of over $3 billion. SAVIENT PHARMACEUTICALS: Files Plan of Liquidation -------------------------------------------------- Savient Pharmaceuticals, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Chapter 11 plan of liquidation following the sale of substantially all of its assets to Crealta Pharmaceuticals LLC. The Plan impairs senior secured noteholder claims and general unsecured claims. The Plan also impairs intercompany claims, subordinated 510(c) claims and subordinated 510(b) claims, although holders of these claims are not entitled to vote on the Plan. Senior secured noteholder claims will be deemed allowed by the Plan in the aggregate amount of $147,533,716 as of the effective date. Each holder of Senior Secured Notes will receive pro rata shares of (i) the final cash sweep proceeds, (ii) any cash from the professional fee reserve and administrative claim reserve returned by the liquidating trustee to be appointed under the Plan, and (iii) the net proceeds of the remaining assets. Holders of general unsecured claims will receive their pro rata share of the Liquidating Trust Interests. A hearing to consider approval of the disclosure statement explaining the Plan is scheduled for March 17, 2014, at 11:30 AM. Objections are due by March 10. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/SAVIENTds0210.pdf A full-text copy of the Chapter 11 Plan is available at http://bankrupt.com/misc/SAVIENTplan0210.pdf 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. GCG Inc. serves as the Debtors' claims agent. 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. The Troubled Company Reporter reported on Jan. 15, 2014, that Savient Pharmaceuticals has completed the sale of substantially all of its assets, including all KRYSTEXXA assets, by Crealta Pharmaceuticals for gross proceeds of approximately $120.4 million. SEDGWICK INC: Moody's Assigns 'B3' CFR; Outlook Stable ------------------------------------------------------ Moody's Investors Service has assigned a B3 corporate family rating and a B3-PD probability of default rating to Sedgwick, Inc. The rating agency also assigned ratings to the credit facilities to be issued in connection with the company's proposed $2.4 billion recapitalization. The recapitalization is being undertaken by private equity firm KKR along with Sedgwick management and employees. The transaction is expected to close in February, subject to customary closing conditions. The rating outlook for Sedgwick is stable. Ratings Rationale Sedgwick's ratings reflect its status as the largest third-party claims service provider in the United States (according to Business Insurance, based on 2012 gross revenue), its diverse customer base, product line and geographic spread in the US, and its strong historic organic revenue growth. As a service provider to US corporations, insurance companies and self-insured entities, Sedgwick also benefits from a fairly stable earnings profile, due to the relatively high switching costs faced by customers, a stable cost structure, and the lack of exposure to insurance underwriting risk. These strengths are offset by the high financial leverage and relatively low interest coverage following its proposed recapitalization. "The ratings of Sedgwick reflect its historically stable revenue growth and improving EBITDA margins in recent quarters," said Enrico Leo, Moody's lead analyst for Sedgwick. "While financial leverage will be substantial following the recapitalization, we expect credit metrics to improve in the year ahead." Based on Moody's estimates, Sedgwick's adjusted debt-to-EBITDA ratio will be around 8x following the recapitalization. The rating agency views such leverage as aggressive for the rating category and expects it to drop below 8x over the next 12-18 months. The proposed financing arrangement includes a $125 million revolving credit facility (rated B1, expected to be undrawn at closing), a $1,085 million first lien term loan (rated B1), and $445 million second lien term loan (rated Caa2), all to be issued by Sedgwick, Inc. Additional funding will include $934 million of common equity. Net proceeds will be used to repay existing debt, purchase the existing equity and pay related fees and expenses. Upon closing of the transaction, Moody's expects to withdraw Sedgwick's existing ratings including: B2 corporate family rating, B2-PD probability of default rating, as well as the B1 first-lien and Caa1 second-lien ratings (now listed under Sedgwick Claims Management Services, Inc. on www.moodys.com), as the credit facilities will be repaid and terminated. Factors that could lead to an upgrade of Sedgwick's ratings upgrade include (i) debt-to-EBITDA ratio below 6x, (ii) free cash flow-to-debt ratio exceeding 4%, and (iii) (EBITDA - capex) coverage of interest exceeding 2x. Factors that could lead to a ratings downgrade include (i) debt- to-EBITDA ratio exceeding 8x on a sustained basis, (ii) free cash flow-to-debt ratio below 2%, (iii) (EBITDA - capex) coverage of interest below 1.2x. Furthermore, the first lien credit facility rating could be downgraded if the proportion of first lien debt relative to second lien debt in the capital structure is increased. Moody's has assigned the following ratings (and loss given default (LGD) assessments): Corporate family rating B3; Probability of default rating B3-PD; $125 million first-lien revolving credit facility B1 (LGD3, 33%); $1,085 million first-lien term loan B1 (LGD3, 33%); $445 million second lien Caa2 (LGD5, 84%). The principal methodology used in this rating was the Moody's Global Rating Methodology for Insurance Brokers & Service Companies published in February 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June. Sedgwick is one of the largest claims service providers in the United States. The company processes claims for a wide range of insurance product lines including workers' compensation, general liability, and disability. Through September 30, 2013 on a trailing twelve months basis, the company generated revenues of $1.2 billion. SEDGWICK CLAIMS: S&P Affirms 'B' CCR & Removes It From Watch Neg. ----------------------------------------------------------------- Standard & Poor's Rating Services said that it affirmed its 'B' long-term corporate credit rating on Sedgwick Claims Management Services Inc. (Sedgwick CMS). S&P removed all ratings from CreditWatch Negative, where it had placed them Jan. 29, 2014. At the same time S&P is assigning a 'B' long-term corporate credit rating to Sedgwick Inc., the parent company of Sedgwick CMS. In addition, S&P is assigning its 'B' issue-level rating with a recovery rating of '3' to Sedgwick Inc.'s $1.1 billion first-lien facility and revolving credit facility and S&P's 'CCC+' issue- level rating with a recovery rating of '6' to Sedgwick Inc.'s $445 million second-lien facility. "We affirmed our 'B' rating on Sedgwick CMS based on its fair business risk profile and its highly leveraged financial risk profile," said Standard & Poor's credit analyst Bob Green. S&P's assignment of the 'B' rating to Sedgwick Inc. reflects its view that the parent and subsidiary are essentially the same entity for analytical purposes. Based on S&P's criteria, the combination of a fair business risk profile and a highly leveraged financial risk profile results in an anchor rating of 'b'. Leverage metrics and ownership by an equity sponsor contribute to the highly leveraged score. S&P believes that although Sedgwick CMS's leverage and coverage metrics may improve during the next 12 to 24 months, because of the company's and ownership's preference for debt capital, any improvements are not necessarily sustainable. Sedgwick CMS is well positioned from a competitive standpoint to continue with the positive revenue and EBITDA trajectory that it has achieved during the past several years into 2014 and 2015. The company has a scalable, specialized business model that, when combined with well-regarded customer service, should benefit from an improving economy. The company's financial plan, including anticipated near-term deleveraging, appears achievable. S&P would consider a downgrade during the next 12 months if Sedgwick CMS is unable to execute its business and financial plan. Possible downside scenarios include general business deterioration combined with the loss of one or one or more top customers, or more-aggressive-than-anticipated financial policy, including an unanticipated debt-financed acquisition or debt-funded dividend. S&P would consider a downgrade if leverage increases to more than 8.0x or EBITDA interest coverage falls to 2.0x or less on a sustained basis. A rating upgrade during the next 12 months is unlikely. S&P believes that, longer term, any leverage and coverage improvements related to EBITDA or FFO growth or debt reduction are not likely sustainable given equity-sponsor ownership and potential re- leveraging. SEQUOIA VOTING SYSTEMS: Case Summary & 20 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: Sequoia Voting Systems, Inc. 950 Spruce St., Suite 1C Louisville, CO 80027 Case No.: 14-11360 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Hon. Michael E. Romero Debtor's Counsel: Daniel J. Garfield, Esq. FOSTER GRAHAM MILSTEIN & CALISHER, LLP 360 S. Garfield St., 6th Fl. Denver, CO 80209 Tel: 303-333-9810 Fax: 303-333-9786 Email: dgarfield@fostergraham.com Total Assets: $547,583 Total Liabilities: $3.38 million The petition was signed by Tom H. Connolly, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob14-11360.pdf SHOTWELL LANDFILL: March 25 Hearing on Bid for Trustee or Examiner ------------------------------------------------------------------ The Bankruptcy Court continued until March 25, 2014, the hearing to consider: (i) a motion to appoint a trustee or examiner in the Chapter 11 case of Shotwell Landfill, Inc., filed by creditors David A. Cook and LSCG Fund 18, LLC, and assignee LSCG Fund 18, LLC; (ii) a motion for relief from stay filed by assignee LSCG Fund 18, LLC, LSCG Fund 18, LLC; and (ii) motion for adequate protection. As reported in the Troubled Company Reporter on Jan. 10, 2014, the Debtor objected to LSCG Fund 18 LLC's motion for relief from the automatic stay or, in the alternative, for adequate protection, stating that the maximum secured claim that LSCG could have in the case is $2,900,000, with the remainder of its claim, $11,423,122, as an unsecured claim. LSCG in court filings on Nov. 27 alleged that "cause" exists to terminate the stay in the Debtor's bankruptcy case and allow LSCG to exercise its non-bankruptcy remedies because its interest in the Debtor's property is not adequately protected. LSCG also asserted that it is owed $14,323,122 by the Debtor. The Debtor said LSCG is not entitled to any adequate protection payments based on a decrease in value of its collateral -- the Debtor's property located at 4724 Smithfield Road, Wendell, North Carolina with a value of $2,900,000. 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. SP 1064 MADISON: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: SP 1064 Madison LLC One North Broadway White Plains, NY 10601 Case No.: 14-10288 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212)-301-6944 Fax: (212) 422-6836 Email: KNash@gwfglaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Melanie Cartagena, manager. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. SR REAL ESTATE: Foley & Lardner Approved as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized SR Real Estate Holdings, LLC, to employ Foley & Lardner LLP as general bankruptcy counsel. As reported in the Troubled Company Reporter, the Debtor on Dec. 16, 2013, filed a supplemental brief in support of its motion to employ Foley. The Debtor filed on Sept. 3, its application to hire Foley. Over 45 days after the Debtor's motion to employ, DACA 2010L L.P. and Sargent Ranch Management Company LLC objected to Foley's employment. In this connection, Foley and its lawyers did not accept the engagement by the Debtor without first ensuring it could be approved as counsel. The Original Motion As reported in the Troubled Company Reporter on Sept. 9, 2013, the firm will be paid based on its customary hourly rates. The rates for some of the attorneys and paraprofessionals expected to be primarily involved in the case are: Attorney E-mail Hourly Rate -------- ------ ----------- Victor A. Vilaplana vavilaplana@foley.com $700 Dawn Messick dmessick@foley.com $510 Jennifer Pinder jpinder@foley.com $495 Matthew Riopelle mriopelle@foley.com $455 Marwill Hogan mhogan@foley.com $335 Paraprofessional Hourly Rate ---------------- ----------- Kerry Farrar $225 The Firm will be reimbursed for its actual, necessary expenses incurred. Prior to the Petition Date, the Debtor provided the Firm a $350,000 retainer for prepetition and postpetition bankruptcy planning and advice. At the time of the filing, after the deduction of $32,500 in fees and the filing fee in the amount of $1,213, the Firm had on deposit a retainer of $316,287.00 Mr. Vilaplana assures the Court that Foley & Lardner is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The TCR on Jan. 15, 2014 reported that the so-called First Priority Sargent Ranch Lenders joined in the opposition of DACA 2010L, L.P. and Sargent Ranch Management Company, LLC, to the application of SR Real Estate Holdings LLC to employ Foley & Lardner LLP as the Debtor's general bankruptcy counsel, nunc pro tunc to the petition date. About SR Real Estate Holdings SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. Judge Hon. Peter W. Bowie oversees the case. Victor A. Vilaplana, Esq., and Matthew J. Riopelle, Esq., at Foley and Lardner, have been tapped as proposed counsel to the Debtor. The Debtor disclosed $15,016,593 in assets and $548,907,938 in liabilities as of the Chapter 11 filing. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. SR REAL ESTATE: Court Denies Motion to Vacate or Stay SARE Order ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of California denied SR Real Estate Holdings LLC's emergency motion to vacate or stay the order, however, the Court extended the time for Debtor to take the action contemplated in 11 U.S.C. Section 362(d)(3) by 10 days to account for the time the motion was pending before the court. The deadline for the Debtor to take the action is Feb. 24, 2014. The Court said the Debtor has neither presented new evidence nor alleged an intervening change in law with respect to the SARE order, and the Court finds no clear error in the order. As reported in the Troubled Company Reporter on Jan. 29, 2014, Jeffrey J. Goodrich, Esq., at Goodrich & Associates, on behalf of the first priority lenders objected to SR Real Estate Holdings LLC's emergency motion to vacate or stay the Bankruptcy Court's order declaring the Debtor's estate as Single Asset Real Estate, stating that the Debtor undisputedly failed to timely request any extension of the 90-day deadline. The Debtor is seeking relief from the Nov. 10, 2013 order determining the Debtor's case as SARE. The first priority lenders said that, notwithstanding the Court's prior SARE determination in "a case involving the very same parties and the very same property," the Debtor's Voluntary Petition falsely claimed that the nature of the Debtor's business is other, rather than a "Single Asset Real Estate" case. Accordingly, the first priority lenders, lead by DACA 2010L, L.P. and Sargent Ranch Management Company, LLC, were forced to move the Court for a second SARE determination. About SR Real Estate Holdings SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. Judge Hon. Peter W. Bowie oversees the case. Victor A. Vilaplana, Esq., and Matthew J. Riopelle, Esq., at Foley and Lardner, have been tapped as proposed counsel to the Debtor. The Debtor disclosed $15,016,593 in assets and $548,907,938 in liabilities as of the Chapter 11 filing. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. STELERA WIRELESS: Paying Creditors in Full 'Entirely Possible' -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Stelera Wireless LLC, a wireless Internet service for rural communities, said it's "entirely possible" creditors will be paid in full from the $37.4 million it expects to pocket on completion of two court-approved sales of frequency licenses. According to the report, the buyers, affiliates of Verizon Communications Inc. and AT&T Inc., are awaiting regulatory approval. At the auction won by Verizon, the opening bid of $18 million increased to $31.5 million, the report said. At the second auction, won by AT&T, the first bid of about $3.9 million rose ultimately to $6 million. Stelera said it can't file a reorganization plan until the sales are completed, the report related. It asked the judge to grant a three-month extension of its exclusive right to propose a Chapter 11 plan at a hearing on Feb. 11. About Stelera Wireless, LLC Stelera Wireless, LLC, filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 13-13267) on July 18, 2013. Tim Duffy signed the petition as chief technology officer/manager. Judge Niles L. Jackson presides over the case. The Debtor disclosed $18,005,000 in assets and $30,809,314 in liabilities as of the Chapter 11 filing. Christensen Law Group, PLLC, serves as the Debtor's primary counsel. Mulinix Ogden Hall & Ludlam, PLLC, serves as additional bankruptcy counsel. Wilkinson Barker Knauer, LLP, serves as the Debtor's special counsel. American Legal Claims Services, LLC serves as official noticing agent. Falkenberg Capital Corporation serves as the Debtor's broker. The official committee of unsecured creditors is represented by attorneys at Gablegotwals. The Troubled Company Reporter reported on Dec. 10, 2013, the Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized Stelera Wireless to sell its Federal Communications Commission licenses to: AT&T Mobility Spectrum LLC, as purchaser; and Atlantic Tele-Network, Inc., as backup purchaser. In an auction held Nov. 20, 2013, AT&T's bid was the highest and best offer for the FCC licenses, while Atlantic's, the stalking horse purchaser, was the second highest. Pursuant to the APA, the aggregate purchase price to be paid by AT&T will be $6,020,000. SURTRONICS INC: William Wade Wants Plan to Address His Concerns --------------------------------------------------------------- William H. Wade, Jr., asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to (i) deny approval of Surtronics, Inc.'s Disclosure Statement dated Oct. 8, 2013, and (ii) deny confirmation of the clarified and corrected Plan of Reorganization filed on Jan. 15, 2014. According to Mr. Wade, neither the Disclosure Statement nor Amended Plan recognizes Wade as a creditor despite his filing of objection to the Disclosure Statement and First Plan on Dec. 12, 2013. At a prior hearing on the matter held Dec. 19, the Debtor addressed the First Plan and Disclosure Statement, and forecast certain changes thereto, leading to the filing of the Amended Plan. The Disclosure Statement was not amended so the objection thereto remains of record. Mr. Wades said the Amended Plan does not address the concerns he raised in the first objection, being among other things that the Plan did not account for Mr. Wade's potential counterclaims and independent claims for contribution, apportionment and other legal assessments against the Debtor and others arising under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). About Surtronics, Inc. Raleigh, North Carolina-based Surtronics, Inc., filed a Chapter 11 bankruptcy petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No. 13-05672) on Sept. 9, 2013. Founded in 1965, Surtronics is in the business of providing electroplating and anodizing services to base-metal alloys for use across various industries, including but not limited to aerospace, defense, medical, telecommunications, and automotive. Surtronics' primary production facility and corporate office are located in a series of buildings at 4001 and 4025 Beryl Drive, and 508 Method Road, Raleigh, North Carolina. The Debtor is represented by David A. Matthews, Esq., at Shumaker, Loop & Kendrick, LLP, in Charlotte, North Carolina. Carr Riggs & Ingram PLLC, serves as its accountants. In its schedules, the Debtor disclosed $16,300,878 in total assets and $3,507,088 in total liabilities. The Bankruptcy Administrator is unable to organize and recommend to the Bankruptcy Court the appointment of a committee of creditors holding unsecured claims against Surtronics, Inc. TAMPA WAREHOUSE: Court Approves Michael Nash as Accountant ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina authorized Tampa Warehouse LLC to employ Michael R. Nash, CPA, PLLC, as accountants. As reported in the Troubled Company Reporter on Dec. 17, 2013, Mr. Nash, the principal CPA, will be paid an hourly rate of $200, while his assistants will be paid hourly rates of $100. The firm will also be reimbursed for any necessary out-of-pocket expenses. Mr. Nash assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm has performed accounting services for the Debtor in the past and is currently owed $1,300 for prepetition services rendered. About Tampa Warehouse Tampa Warehouse, LLC, filed a Chapter 11 petition (Bankr. W.D.N.C. Case No. 13-32547) in Charlotte, North Carolina, on Dec. 5, 2013. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $10 million in assets and between $10 million and $50 million in liabilities. The Debtor said its principal asset is located at 6422 Harney Road, in Tampa, Florida. Fred D. Godley, as member and manager, signed the bankruptcy petition. Owners of the Debtor are: Charlotte Housing for the Elderly (145543%), Clinton Housing for the Elderly (6.951%), Fred D. Godley (12.516%), Monroe Housing for the Elderly (12.516%) and Rocky Mount Housing for the Elderly (12.403%). According to the docket, the deadline to file proofs of claim against the Debtor is on April 15, 2014. Judge Laura T. Beyer oversees the case. The Debtor is represented by represented by Joshua B Farmer, Esq., at Tomblin, Farmer & Morris, PLLC, in Rutherfordton, North Carolina. TEMBEC INC: S&P Revises Outlook to Positive & Affirms 'CCC+' CCR ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Montreal-based pulp, paper, and forest product manufacturer Tembec Inc. to positive from developing. "We base our outlook revision on our belief that Tembec is on track to complete its boiler expansion program in the next 12 months while maintaining adequate liquidity," said Standard & Poor's credit analyst Rahul Arora. "As a result, we expect that the execution and funding risks associated with the project will decrease through our outlook period," Mr. Arora added. At the same time, Standard & Poor's affirmed its ratings on Tembec, including its 'CCC+' long-term corporate credit rating on the company. The ratings on Tembec reflect what Standard & Poor's views as the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile. The ratings reflect the company's exposure to the cyclical housing construction market, volatility in commodity pulp prices and currency, and historically weak profitability. These weaknesses are slightly mitigated by the company's sizable market share in specialty dissolving pulp products, and an improving cost profile. Furthermore, the ratings incorporate risks inherent to a large boiler expansion project, which S&P expects will be completed in the next 12 months. Tembec is a large producer of specialty cellulose and dissolving pulp, a niche industry with higher barriers to entry that has enjoyed steady growth in demand. This business, which represents just about 35% of company revenues, has been the main source of Tembec's cash flows in recent years and S&P expects it to continue to generate the majority of cash flows in the near term. The company's various paper, paper pulp, and lumber businesses operate in industries that are fragmented and within which Tembec maintains a minor market share. The positive outlook reflects Standard & Poor's belief that Tembec is on track to complete its Temiscaming mill upgrade project in the next 12 months while maintaining adequate liquidity, notwithstanding the significant capital spend associated with the program. As a result, S&P believes that the execution and funding risks associated with the project will decrease through its outlook period. However, S&P notes that the company depends on favorable business, financial, and economic conditions, and relies on asset sales and debt financing to raise capital to finish the boiler upgrade. S&P also expects credit metrics to remain consistent with its highly leveraged financial risk profile during this period. An upgrade would require the company to complete its Temiscaming facility upgrades with little deviation from its current budgeted costs or scheduled completion date, hence removing the project execution and funding risks. In addition, an upgrade would necessitate S&P's expectation that Tembec will be able to generate break-even or positive free operating cash flow after completion. A negative rating action could occur should Tembec experience weak operating margins that lead to an 18% decline in EBITDA from S&P's expectations, resulting in continued negative funds from operations. Furthermore, S&P could also take a negative rating action if Tembec experiences a decline in its liquidity position, which could occur through either asset sales failing to generate sufficient funds or if further project delays and cost overruns lead to an increased need for capital. TREE OF LIFE: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Tree of Life Church dba Tree of Life Ministries dba Tree of Life Ministries of Myrtle Beach 6337 Rivers Avenue Charleston, SC 29406 Case No.: 14-00802 Chapter 11 Petition Date: February 11, 2014 Court: United States Bankruptcy Court District of South Carolina (Charleston) Debtor's Counsel: Ivan N. Nossokoff, Esq. IVAN N. NOSSOKOFF, LLC 4000 Faber Place Drive, Suite 300 Charleston, SC 29405 Tel: (843) 571-5442 Email: inn@nosslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Pastor Elaine W. Green, authorized agent, pastor. The Debtor listed DeMott Law Firm as its largest unsecured creditor holding a claim of $500. VALASSIS COMMUNICATIONS: Moody's Withdraws Ba2 Rating After Deal ---------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings and LGD assessments of Valassis Communications, Inc. following the completion of its acquisition by Harland Clarke Holdings Corp. (B2 stable) on February 4, 2014 for approximately $1.84 billion. Valassis' ratings were withdrawn because: (i) Valassis' bank debt is no longer outstanding; and (ii) Moody's believes it lacks insufficient information to maintain a rating on the remaining stub obligations that remain outstanding. Ratings Rationale Moody's has withdrawn the rating for its own business reasons. The following ratings and assessments were withdrawn: Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba2-PD $ 0.09 Million 1.084% Convertible Secured Notes due 2033 -- Ba1 (LGD-2, 26%) $ 14 Million (originally $260 Million outstanding) 6.625% Senior Notes due 2021 -- Ba3 (LGD-5, 77%) Outlook, changed to Withdrawn from Stable Valassis Communications, Inc., headquartered in Livonia, Michigan, provides promotional and advertising products including Shared Mail, Neighborhood Targeting, Free Standing Inserts or FSI, and International, Digital Media, & Services (coupon clearing, consulting and analytic services). Harland Clarke Holdings Corp., headquartered in San Antonio, TX, is a provider of: (i) check and check-related products, direct marketing services and customized business and home office products to financial services, retail and software providers as well as consumers and small business; (ii) data collection, testing products, scanning equipment and tracking services to educational, commercial, healthcare and government entities through its Scantron segment; and (iii) business process outsourcing including call centers and toll service operations at its Faneuil division. VANDER INTERMEDIATE: Moody's Rates New $250MM Unsec. Notes 'Caa2' ----------------------------------------------------------------- Moody's assigned a B3 CFR and B3-PD Probability of Default (PD) rating to Vander Intermediate Holding II Corporation (Vander II). The company's new $250 million unsecured PIK notes were rated Caa2. The rating outlook for Vander is stable. In a related action, Moody's affirmed the B3 rating on the $760 million second lien debt at BlueLine Rental, LLC (previously Volvo Construction Equipment Rents, LLC), a subsidiary of Vander II. Moody's also withdrew the B2 CFR and B2-PD PDR at BlueLine Rental, LLC (BlueLine) to reflect the issuance of debt at the intermediate holdco Vander II but maintained the stable rating outlook at BlueLine. Assignments: Issuer: Vander Intermediate Holding II Corporation Senior Unsecured Regular Bond/Debenture, Assigned Caa2 (LGD6, 92%) Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Outlook Actions: Issuer: BlueLine Rental, LLC Outlook, Remains Stable Issuer: Vander Intermediate Holding II Corporation Outlook, Assigned Stable Affirmations: Issuer: BlueLine Rental, LLC Senior Secured Regular Bond/Debenture Feb 1, 2019, Affirmed B3 (LGD4, 57% from LGD4, 69%) Withdrawals: Issuer: BlueLine Rental, LLC Corporate Family Rating, Withdrawn, previously rated B2 Probability of Default Rating, Withdrawn, previously rated B2-PD Ratings Rationale The B3 CFR assignment at Vander II is lower than the previous B2 CFR at BlueLine to reflect the issuance of an additional $250 million of debt which results in a net increase of approximately $210 million due to use of proceeds going towards a $202 million dividend to the equity sponsor Platinum Equity, approximately $40 million going towards paying down revolver debt at BlueLine and the balance to fees and expenses. B3 CFR rating reflects elevated leverage of around 6.5 times on a Moody's adjusted basis and the expectation that company's current very low equipment utilization rate will improve meaningfully and lead to improving margins and enhanced credit statistics. The rating also incorporates the company's significant product concentration in earthmoving and aerial equipment. Moody's notes that earth moving equipment is very cyclical and is often strongest during economic growth cycles but can soften significantly during periods of economic contraction. The rating anticipates steady margin improvement through 2015 to levels more supportive of the rating. The Caa2 rating on the new $250 million senior unsecured PIK notes being issued by Vander Intermediate Holding II Corporation reflects their subordination to the debt at BlueLine and the lack of subsidiary guarantees. The affirmation of the B3 rating on BlueLine's $760 million second lien notes reflects the benefits derived from second lien security and their senior position to the new unsecured notes being offered at Vander II. The stable ratings outlook reflects the expectation for EBITDA growth and leverage reduction to result in improving metrics so that debt to EBITDA will fall below 5.5 times by the end of 2014 and below 5 times in 2015. The rating may be downgraded if debt to EBITDA fails to improve below 6 times or if its EBITDA margin failed to improve in 2014. A decline in equipment utilization rates could also result in downward ratings pressure. Any additional shareholder friendly actions at any of the companies associated with the corporate family, given the current $200 million payout, would cause rating pressure. Given the company's relatively small size, low equipment utilization rate, and high concentration in of equipment in a couple of categories, aggressive financial policy, a rating upgrade is unlikely over the near term. However, were leverage to fall below 4 times, and the company was expected to deleverage further, the rating outlook or the rating could benefit. The principal methodology used in this rating was the Global Equipment and Automobile Rental Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Vander II Intermediate Holding Corporation ("Vander II"), the direct parent of Vander Intermediate Holdings III Corporation, ("Vander III") who in turn is the holding company for BlueLine Rental, LLC and BlueLine Rental Finance Corporation. BlueLine Rental, LLC, previously Volvo Construction Equipment Rents, LLC headquartered in Shippensburg, Pennsylvania is a Delaware limited liability company. The Company offers a comprehensive line of earthmoving, aerial, and various other construction equipment to service customers across multiple end markets, including oil and gas, power, industrial manufacturing, infrastructure, construction and metals and minerals. LTM revenues are approximately $640 million. The company is owned by affiliate of Platinum Equity. VEYANCE TECHNOLOGIES: Moody's Reviews B2 CFR For Possible Upgrade ----------------------------------------------------------------- Moody's Investors Service has placed Veyance Technologies Inc.'s ratings under review for upgrade after Continental AG (Baa3 STA) announced its agreement to acquire Veyance for approximately $1.9 billion. Moody's expects to withdraw Veyance's Corporate Family Rating (CFR) and instrument ratings on its senior secured facility ($1.125 billion term loan and $75 million revolver) when the facility is refinanced or repaid at transaction close per change of control provisions within Veyance's senior facility's credit agreement. The transaction is subject to customary regulatory review and is anticipated to close in late 2014. On Review for Upgrade: Issuer: Veyance Technologies Inc. Corporate Family Rating, Placed on Review for Upgrade, currently B2 Probability of Default Rating, Placed on Review for Upgrade, currently B2-PD Senior Secured Bank Credit Facility Sep 8, 2017, Placed on Review for Upgrade, currently B2 (LGD3, 45%) Outlook Actions: Issuer: Veyance Technologies Inc. Outlook, Changed To Rating Under Review From Stable Ratings Rationale Veyance's B2 CFR reflects the company's significant leverage of over 5 times for the LTM period ending 9/30/13, end-user concentration, deeply cyclical end markets, and our expectation of soft end market demand in 2014. Although US demand for coal is likely to be affected by low natural gas prices, Veyance's conveyor belt business benefits from growth in international demand for coal. Demand for its industrial hoses is anticipated to benefit from growth in oil and gas as well as in industrial production. The rating also considers these trends and the company's good market position, low maintenance capital expenditures, positive free cash flow, and high recurring revenues. The ratings consider the company's adequate liquidity with expectations for single positive free cash flow due in part to capital expenditures made to support growth initiatives and productivity. Moody's anticipate adequate availability under its $75 million secured revolver. The company's liquidity also benefits from good room under its covenants due to its covenant lite structure and meaningful unencumbered assets that could be sold as an alternative form of liquidity. The rating and rating outlook are not expected to change unless the Continental AG acquisition unwinds. If the transaction was to fall through and Veyance's leverage was forecast to remain well above 5.0x and expected to weaken further, the rating could be pressured. An inability to pass along raw material prices on a timely basis could also cause rating pressure particularly if it resulted in significantly higher revolver usage to fund higher working capital levels. From a fundamental perspective, the rating or rating outlook could be upgraded and the company's leverage were expected to improve to 3.5x or better on a sustainable basis. The principal methodology used in this rating was the Global Manufacturing Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. VEYANCE TECHNOLOGIES: S&P Puts 'B' CCR on CreditWatch Positive -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Fairlawn, Ohio-based rubber and plastics manufacturer Veyance Technologies Inc., including the 'B' corporate credit rating, on CreditWatch with positive implications. The rating action follows the announcement that higher-rated Continental AG plans to acquire Veyance from private equity firm Carlyle Group for about $1.9 billion. S&P expects that all of Veyance's outstanding rated debt could be repaid or refinanced as part of the transaction. The transaction is subject to regulatory approval. The rating on Veyance reflects S&P's assessment of the company's business risk profile as "weak," characterized by its presence in competitive and cyclical markets, modestly offset by its well- established market position. S&P assess Veyance's financial policy as "financial sponsor-6" and expect that the company will maintain credit metrics consistent with a "highly leveraged" financial risk profile and "adequate" liquidity. The company is a global manufacturer of rubber and thermoplastic products serving mining, industrial, agricultural, and other end-markets. S&P plans to resolve the CreditWatch placement after the transaction closes. At that time, S&P could raise or withdraw the ratings on the company. VIOLIN MEMORY: Continues to Receive Buyout Offers After IPO ----------------------------------------------------------- Paul Schaap, writing for The Deal, reported that computer storage drive maker Violin Memory Inc., which had suitors knocking at the door prior to its September initial public offering, continues to have suitors, according to someone familiar with the situation. According to the report, buyout interest around Violin has increased even more so now that the company has jettisoned its founder and CEO and brought in an executive with all the earmarks of someone well-versed at selling tech companies. The companies that had been talking to Santa Clara, Calif.-based Violin Memory include some of the biggest in enterprise technology service providers: Hewlett-Packard Co., Seagate Technology plc, IBM Corp., Samsung Electronics Co. Ltd. and EMC Corp., an industry source said, the report related. At least one had gone so far as to provide Violin Memory with a term sheet, albeit one that was contingent on due diligence and hedged with conditions, the person said. Violin Memory did not respond to a request for comment, The Deal related. Hewlett-Packard and Seagate said it was company policy not to comment on rumor or speculation. Samsung could not be reached for comment, while IBM and EMC did not respond to requests for comment. In fact, Hewlett-Packard already had an agreement in place to resell Violin Memory products, but the company ended the arrangement in the fall of 2012, ostensibly in favor of the 3Par products it acquired in 2010 as part of a $2.3 billion deal, the report further related. Despite the buyout interest, Violin went public in September, the report said. Barely three months later, founder and CEO Donald Basile was let go by his board. The IPO was rocky, according to The Deal. After pricing at $9 per share on Sept. 26 to raise $162 million before expenses, the stock opened at $7.50 and closed at $7.02 on its first day of trading. Violin Memory develops and supplies memory-based storage systems for high-speed applications, servers and networks in the Americas, Europe and the Asia Pacific. The Troubled Company Reporter reported on Dec. 12, 2013, that Violin Memory 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 the prior 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. * 8th Circuit: Tax Debts Don't Trump Other Claims in Ch. 13 ----------------------------------------------------------- Law360 reported that the Eighth Circuit barred a couple from paying their nondischargeable state and federal tax debts before they have paid other unsecured creditors in their bankruptcy proceeding, finding the plan discriminates against the couple's most vulnerable creditors. According to the report, if approved, the proposal would have paid the tax creditors in full and left little or nothing for other unsecured creditors in the proceedings, and the Eighth Circuit said there was no reason why a nondischargeable debt should receive special treatment over other debts. The case is Shawn Copeland, et al v. Richard Fink, Case No. 12-4018 (8th Cir.). * Ear Ringing False Ad Suit Tossed Over Bankruptcy Snafu -------------------------------------------------------- Law360 reported that a California judge threw out a certified consumer class action alleging NaturalCare Inc. falsely hawked its homeopathic remedy Ringstop as an effective treatment for ringing and buzzing in the ears, saying the lead plaintiff lost standing when she filed a misleading personal bankruptcy. According to the report, Plaintiff Alisa Neal filed for Chapter 7 protection three months before lodging her operative complaint against Naturalcare but failed to disclose on the bankruptcy petition that she had an interest in the class action. The case is Alisa Neal v. Naturalcare Inc et al, Case No. 5:12-cv- 00531 (C.D. Calif.). The case is before Judge David O. Carter. * 60% of Bankrupt Californians Blame Medical Debt ------------------------------------------------- SEIU-United Healthcare Workers West on Feb. 11 disclosed that at John Muir Medical Center in Walnut Creek they charge $233 for a pair of crutches, while at a Walgreens down the street they cost $23. At California Pacific Medical Center in San Francisco, a single Ibuprofen costs $18.23, which is 303 times the price found on Amazon.com. Those are just some of the high prices California healthcare workers revealed on Feb. 11 at a news conference near the U.S. Bankruptcy Court as they launched a signature gathering campaign to qualify a statewide ballot initiative that will end overpricing by hospitals. More than 60,000 people in California file for bankruptcy each year due to medical debt. The measure would reduce hospital prices in California by at least $3 billion a year. "Of all the people in this country who file for bankruptcy, 60 percent of them cite high medical bills as the source of their financial collapse," said Dave Regan, President of SEIU-United Healthcare Workers West (SEIU-UHW). "Our ballot initiative will get outrageous hospital prices under control in California, and help protect consumers from having to file for bankruptcy just because they went to get medical treatment." Approximately 505,000 signatures of registered California voters are needed to qualify the initiative for the November 2014 ballot. Signatures must be submitted in mid-April. In addition to high prices on basic products, like over-the- counter pain medication, some hospitals are charging far above the state average for certain medical procedures. According to state reports, Stanford University Hospital in Palo Alto charges $7,328 for an emergency room visit -- which is 2.5 times the state average of $2,098. St. Francis Memorial Hospital in San Francisco charges $46,855 to treat someone for drug or alcohol abuse, while the state average is only $20,537. "It's crazy how much they charged me," said Lorena Jimenez, a Milpitas resident who fainted in 2013 and learned she was pregnant while being treated at Regional Medical Center of San Jose, which charged her $11,400 for her stay. "They billed me $2,664 for an ultrasound when I could have instead gone to the pharmacy and bought a pregnancy test for less than $5." The statewide ballot initiative, the Fair Healthcare Pricing Act of 2014, prohibits hospitals from charging more than 25 percent above the actual cost of providing patient care. On average, California hospitals charge 320 percent more than the actual cost of providing care in their facilities. The two hospitals that charge the most in the San Francisco Bay Area are the Regional Medical Center of San Jose, which marks up prices 575 percent, and NorthBay Medical Center in Fairfield, which marks up prices 534 percent. Support for -- and awareness of -- the ballot measure is building. Last week, six state legislators from the Bay Area endorsed the initiative, including Senators Mark Leno (D-San Francisco) and Sen. Jim Beall (D-San Jose), and Assemblymembers Nancy Skinner (D- Berkeley), Tom Ammiano (D-San Francisco), Bill Quirk (D-Hayward) and Bob Wieckowski (D-Fremont). Almost 500 paid signature gatherers are fanning out across the state asking voters to qualify the measure for the November 2014 ballot, and a television ad for the initiative began airing yesterday in Sacramento. According to the Office of Statewide Health Planning and Development, California hospitals subject to this ballot initiative charged $233.8 billion in 2012 -- even though their operating expenses were only $54.5 billion. Locally, Stanford University Hospital billed $8.6 billion for operating expenses of $2.1 billion, and California Pacific Medical Center charged $3.5 billion for expenses totaling $963 million. Paid for by Yes for a Healthy California, sponsored and major funding by Service Employees International Union, United Health Care Workers West. Additional major funding by State Council of Service Employees Issues Committee. SEIU?United Healthcare Workers West (SEIU-UHW) -- http://www.seiu-uhw.org-- is the largest hospital and healthcare union in the western United States with more than 150,000 members. We unite every type of healthcare worker with a mission to achieve high-quality healthcare for all. SEIU-UHW is part of the 2.2 million-member Service Employees International Union (SEIU), the nation's fastest-growing union. * Chief Executive Turnover High in January, Report Says ------------------------------------------------------- Rachel Abrams, writing for The New York Times' DealBook, reported that a total of 131 C.E.O.'s in the United States, mostly at public companies, departed their posts in January, the highest monthly total since February 2010 and 15.9 percent higher than the same period last year, according to findings from Challenger, Gray & Christmas, an outplacement firm. According to the report, boards are more inclined to shuffle management when business is good. Companies may be riding high after the stock market surged in 2013 and the country's economy grew at an annual rate of 3.2 percent in the fourth quarter. "In good times, you have time to make a shift, things are going O.K.," said Gary Neilson, a senior partner at Booz Allen, which does a separate study on executive turnover, the report cited. "But when things are moving fast, you need someone at the helm who's holding on tight." January's numbers may have also reflected an unusually high number of retirements, the report related. The average tenure for exiting executives was nearly 15 years, the highest on record since Challenger began tracking data more than a decade ago. In total, 43 executives said they were stepping down because of retirement, the report further related. Thirty-two chief executives resigned from their position, while 22 transitioned into other roles at the company. Challenger assembled the report by surveying announcements of executive changes, the report said. Some of the prominent announcements last month of C.E.O.'s who were stepping down include Tim O'Shaughnessy, formerly of Living Social, and Casey Sheahan of Patagonia. * Credit Risk Levels Hit Lowest Levels, S&P Capital IQ Says ----------------------------------------------------------- Since the end of October 2013, credit risk levels for non- financial corporates* in North America, Western Europe and Asia Pacific (APAC) mature markets have, on the whole, declined and reached their lowest levels since the beginning of the financial crisis in 2008, says S&P Capital IQ in the February issue of its new, bi-monthly research publication, Credit Market Pulse. For the first time since 2008, the median probability of default (PD) for these developed markets is below 0.1%, the equivalent of an 'a-' credit score**, meaning that 50% of all corporates in these markets have a short-term credit risk assessment of 'a-' level or better. To view a copy of the current issue of Credit Market Pulse, visit www.spcapitaliq-credit.com/creditmarketpulse From a regional perspective, the current market view of credit risk in North America continues to be optimistic. "With a median PD of just 0.02%, which maps to an 'aa-' credit score, 50% of North American public companies* are considered to have very low or no credit risk in the short-term," highlights Marcel Heinrichs, Director, Market Development, S&P Capital IQ. "These results are aligned with a series of recently published economic indicators that the US economy is on a steady path to recovery." "Western European mid- to large cap corporations* continue to show a higher average credit risk than their North American counterparts, and this is certainly due to the Eurozone crisis and the continuing tight economic conditions of the debt-burdened countries in European periphery," continues Silvina Aldeco- Martinez, Managing Director, Product & Market Development, S&P Capital IQ. "However, this difference in credit risk remains low, and is an indication that markets do not consider these factors as imminent risks to the overall credit health of the region or globally. Indeed, recent discussions at the 2014 World Economic Forum in Davos have shifted attention more towards the weakening conditions of emerging market countries, notably Brazil, Turkey, India and Indonesia." Credit Market Pulse offers a broad overview of the health and credit trends within the global capital markets. At the core of the report is S&P Capital IQ's proprietary probability of default model, 'Market Signals', a unique analytical model which provides daily changing forward looking PDs and mapped credit scores of publicly listed companies based on a cutting-edge econometric framework. This issue of Credit Market Pulse has three sections, providing different views of credit risk. These include the quarterly evolution of the median PD of companies aggregated in different geographical regions; monthly evolution of the credit risk for constituents of the S&P 500 equity index and its various industry sub-indices and, finally, PD tables of individual companies that merit special attention. Customized searches similar to those presented in the report can be run for interested media using the data in Credit Market Pulse. *Credit Market Pulse considers non-financial corporations with revenues above USD500 million.** A credit score is a quantitative assessment of credit risk from S&P Capital IQ's suite of credit risk models. It is expressed in letter grades such as bbb+ following the rating scale by Standard & Poor's Ratings Services, however in lower case letters in order to differentiate it from a rating. About S&P Capital IQ S&P Capital IQ, a part of McGraw Hill Financial, is a provider of multi-asset class and real time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, corporations and universities around the world. S&P Capital IQ provides a broad suite of capabilities designed to help track performance, generate alpha, and identify new trading and investment ideas, and perform risk analysis and mitigation strategies. Through leading desktop solutions such as the S&P Capital IQ, Global Credit Portal and MarketScope Advisor desktops; enterprise solutions such as S&P Capital IQ Valuations; and research offerings, including Leveraged Commentary & Data, Global Markets Intelligence, and company and funds research, S&P Capital IQ sharpens financial intelligence into the wisdom today's investors need. * NLC Calls on Congress to Avoid Another Fiscal Showdown -------------------------------------------------------- National League of Cities President Chris Coleman, Mayor of Saint Paul, Minn. on Feb. 11 released this statement calling on Congress to raise the U.S. debt ceiling limit: "As the federal government approaches its debt ceiling, cities call on Congress and the Administration to act responsibly and avoid another fiscal showdown. Let's not even get close to defaulting on our debt obligations. Cities call on members of both parties to work together to raise the debt ceiling and protect our nation's economy from the financial disaster that would result following a default. "As the bipartisan budget act and 'Farm Bill' showed, Congress is capable of compromise and working together to get the job done. Rather than squander the legislative time remaining in this session, cities urge Congress to continue moving beyond the era of manufactured crises and instead prioritize investments in cities and their residents that are proven to stimulate economic growth and innovation nationwide. Following years of uncertainty due to the absence of federal leadership during Great Recession, cities need a federal partner that will step up to the plate and provide a foundation for a generation of growth." The National League of Cities is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans. * Senate's Warren Pushes to Require Board Votes on Banks -------------------------------------------------------- Cheyenne Hopkins, writing for Bloomberg News, reported that the Federal Reserve should revise enforcement policy to require board- member votes on penalties exceeding $1 million or force changes in banks' management, two lawmakers wrote in a letter to Fed Chairman Janet Yellen. According to the report, Senator Elizabeth Warren and Representative Elijah Cummings, both Democrats, urged Yellen to make the change to bolster the Fed's accountability and to protect taxpayers against the kind of financial-industry risk-taking that helped fuel the 2008 credit crisis. "We have learned the hard way that the task of monetary policy making is made significantly more difficult when prudential regulators fail to ensure the safety and soundness of all facets of the banking system," Warren of Massachusetts and Cummings of Maryland wrote in the letter dated Feb. 11, the report cited. "Increasing the Board's direct role in overseeing enforcement and supervision would strengthen the Fed's efforts to reduce systemic risk in our financial system." The letter from the two lawmakers came as Yellen testified at a House Financial Services Committee hearing to deliver her first report to Congress since replacing Ben S. Bernanke as Fed chairman last month, the report related. Yellen, 67, faced questions from House lawmakers on financial-regulation issues including whether the 2010 Dodd-Frank Act went far enough in protecting the economy. Warren and Cummings said the Fed should hold a formal vote of the Board of Governors before entering into any enforcement order that is for $1 million or more or include a requirement that a bank officer be removed, new management be installed or both, the report further related. The proposal is likely to be addressed when Yellen appears on Feb. 13 before the Senate Banking Committee, which includes Warren. * President Signs Order for Retirement Accounts ----------------------------------------------- Anne Tergesen and Colleen McCain Nelson, writing for The Wall Street Journal, reported that President Barack Obama has signed a presidential memorandum authorizing the Treasury Department to create a new retirement-savings vehicle aimed at workers who don't have access to traditional retirement accounts, such as 401(k)s. That group includes about half the U.S. workforce. Called "myRAs," the accounts were among the proposals Mr. Obama unveiled during his State of the Union address, according to the report. The president drew additional attention to the issue as he traveled to a steel plant in Pennsylvania. Mr. Obama told the steelworkers that the accounts were a "pretty good deal" that would help more people save for retirement. The new accounts will be structured much like Roth IRAs, in which account holders contribute money after income taxes are paid, and any investment gains and withdrawals are tax-free, the report said. To underscore his focus on executive action, the president pulled out a pen while he was still onstage and signed the paperwork greenlighting the retirement savings accounts, the report related. Roth IRA accounts -- as opposed to traditional IRAs, which allow pretax contributions -- make sense for the younger and lower- income workers the myRA program is trying to reach, said David John, senior strategic policy adviser at the AARP Public Policy Institute in Washington, the report further related. * Yellen Pushes Back on Volcker Rule Opponents ---------------------------------------------- Ronald Orol, writing for The Deal, reported that Federal Reserve chairwoman Janet Yellen on Feb. 11 refuted assertions by Republicans that the Volcker Rule -- written to prohibit big bank speculative proprietary bets -- would limits efforts to manage risk and would hurt the U.S. economy. "Banks will be able to go on to engage in activities, particularly market making and hedging, that are really vital to a functioning financial system," Yellen told lawmakers at the House Financial Services Committee, in her first hearing before Congress since becoming chief of the central bank Feb. 1, the report cited. The Volcker Rule is a key part of reform legislation drafted in response to the 2008 financial crisis and was enacted in 2010, the report related. The legislation is also fashioned to force financial institutions to cash out most of their hedge fund and private equity investments in the coming years. The 900+ page rule, named after former Fed chairman Paul Volcker, was adopted by the Fed and four other agencies in December. Volcker first suggested the concept for what eventually became the rule, when he was chairman of President Barack Obama's economic recovery advisory board. Critics at the hearing, including Rep. Bill Huizenga, R-Mich., brought up concerns raised by bankers that firms and regulators will have a difficult time differentiating between legitimate market-making actions and prohibited speculative transactions, the report further related. Banks have market-making obligations to provide liquidity to investors particularly in times of stress, as they did during the flash-crash that rattled the markets in 2010. Big banks provide this liquidity by buying, selling and holding securities and anticipating future customer demands. Opponents on the left have raised concerns that the Fed will permit dangerous speculative trades that are masked as permissible hedging of customer positions. Regulators have indicated that they will be taking a case-by-case approach to identifying what is permitted and what is prohibited and that banks will have more clarity about the trades over time, the report said. * Mutual Benefits' Steiner Sentenced to Prison Again ---------------------------------------------------- Kirk O'Neil, writing for The Deal, reported that a federal judge sentenced Steven Steiner, who was convicted in the $1.2 billion Mutual Benefits Corp. life settlements Ponzi scheme, to 15 years in prison for conspiracy to commit mail and wire fraud. According to the report, Judge Robert Scola of the U.S. District Court for the Southern District of Florida in Miami handed down the sentence on Feb. 7 that will run concurrently with a 15-year sentence Steiner received in August for money laundering and obstruction of justice in connection with the case. Steiner, of Fort Lauderdale, Fla., pleaded guilty in September to conspiracy to commit wire and mail fraud, the report related. Steiner will serve a full 15 years of his sentence under his plea agreement. He will serve three years of supervised release following his incarceration. He and his co-conspirators were ordered to pay more than $826 million in joint restitution. Steiner agreed in his plea statement that his offense endangered the solvency of 100 victims and involved a total of 250 victims, the report further related. He agreed to forfeit $15 million and other property and assets. Steiner was first convicted in February 2013 on 19 of 54 counts of money laundering, obstruction of justice and conspiracy charges in connection with a scheme to launder more than $15 million from the Mutual Benefits fraud, the report said. * Pacific Oil in Talks to Buy Heavy Oil Wells Out of Bankruptcy --------------------------------------------------------------- Pacific Oil Company on Feb. 11 disclosed that it has entered into negotiations to purchase a 64% working interest in 12 producing heavy oil wells in Maidstone Saskatchewan Canada. The wells are being purchased out of bankruptcy with the trustee being represented by Sayer Energy Advisors. Ed Loven, Vice president of Pacific Oil, said, "It's no secret that as a company we like heavy oil in this area due to managements experience with the commodity, expertise in its production and preexisting relationships in the vicinity. The purchase of these producing assets at a significant discount is just the opportunity we have been looking for in this prolific area. Once this transaction is complete it will represent a significant uptick in Pacific Oils net asset value. Pacific Oil is currently in the process of rigorously vetting the potential acquisition through a strong set of control mechanisms and extensive due diligence. The Company will update the public via press release as milestones in the process are achieved. About Pacific Oil Company A Nevada based corporation, Pacific Oil Company is a dynamic junior energy company with both established assets and production within the energy rich province of Saskatchewan Canada. * Shareholder Suits Could Decide Fannie and Freddie's Fate ---------------------------------------------------------- Nick Timiraos, writing for The Wall Street Journal, reported that legal wrangling over who should keep the hundreds of billions of dollars in profits generated by Fannie Mae and Freddie Mac is heating up, and investors increasingly are betting the government will end up the loser. According to the report, since last summer, the Treasury Department has faced a host of shareholder lawsuits over changes it made in 2012 to the terms of the bailout agreements with the mortgage-finance giants in 2008, when the government seized the firms as they neared collapse. The plaintiffs say that the Treasury wasn't authorized to make the changes -- which required Fannie and Freddie to send all of their profits to the Treasury -- and that the move amounted to unlawful seizure of private property. The Treasury "has effectively nationalized the companies and ensured that they will never return to private ownership" using steps that are "plainly unlawful," said Theodore Olson of Gibson, Dunn & Crutcher LLP, at a conference, the report cited. Mr. Olson, who served as solicitor general through 2004, is representing Perry Capital LLC, a hedge-fund firm that filed suit last July. The government has argued that the plaintiffs don't have standing to challenge its decisions because the rescue legislation barred shareholder claims and that the cases don't have merit, the report related. "Treasury committed and provided hundreds of billions of dollars to rescue the entities," the government said in its response last month. "Having gained that benefit, the shareholders cannot credibly claim that the [Constitution] demands that Treasury compensate them further for their investment." Tens of billions of dollars are potentially at stake because Fannie and Freddie sent more than $130 billion to the U.S. Treasury last year, nearly seven times what would have been owed before the terms were changed, the report further related. Plaintiffs in the lawsuits argue that those proceeds belong to the companies, not the U.S. * Breakwater Equity Wins M&A Advisor Real Estate Deal of the Year ----------------------------------------------------------------- Breakwater Equity Partners, a commercial real estate restructuring and investment firm, has won The M&A Advisor's 8th Annual Real Estate Deal of the Year Award for its work on Met Center 10. The awards will be presented at the Awards Gala on Tuesday, March 11th at The Colony Hotel in Palm Beach, FL. 26 tenant-in-common owners purchased Met Center 10, a 345,000 square-foot building in Austin, TX, for $44.8MM in 2005. The expansive soils under the building caused structural damage that made refinancing next to impossible. Some of the owners were retired and depended on the distributions to supplement their fixed income; they couldn't afford to lose this significant investment. The owners hired Breakwater when foreclosure was imminent. Breakwater successfully restructured Met Center 10 using a unique multidisciplinary approach and a comprehensive strategy. The restructuring included the first ever successful tenant-in-common bankruptcy reorganization, a $3.7MM remediation construction project, several lawsuits, and $11 million in litigation settlements for the owners. "Since 2002, we have been honoring the leading turnaround transactions, companies and dealmakers. Breakwater Equity Partners was chosen from over 500 participating companies to receive the award. It gives us great pleasure to recognize Breakwater Equity Partners and bestow upon them our highest honor for distressed investing and reorganization firms and professionals," said David Fergusson, President, the M&A Advisor. "Breakwater Equity Partners represents the best of the distressed investing and reorganization industry in 2013 and earned these honors by standing out in a group of very impressive candidates." The M&A Advisor will present the 2014 awards at a black tie Awards Gala at The Colony Hotel in Palm Beach, FL, in conjunction with the 2014 M&A Advisor Distressed Investing Summit that will feature 175 of the industry's leading professionals participating in exclusive interactive forums led by a faculty of restructuring industry stalwarts and Bloomberg media experts. "We are delighted to be recognized by The M&A Advisor for our consulting work on the Met Center 10 restructuring. It was both a challenging and rewarding project," said Phil Jemmett, Breakwater CEO. "We couldn't have finished implementing the strategy without the patience and fortitude of the owners, and we are extremely pleased with the outcome." About Breakwater Equity Partners Breakwater Equity Partners is a San Diego-based commercial real estate advisory, restructuring and investment firm. Through Breakwater's extensive experience on over 300 engagements with loan values in excess of a $4B, the firm has devised a unique, multidisciplinary approach to analyzing and optimizing commercial assets. Breakwater's professional team combines legal, capital markets, financial, economic, lender, tax, and regulatory expertise to devise customized strategies for each property regardless of market (primary to tertiary), asset class (office, retail, multi-family, industrial, flex, land), loan type (portfolio or CMBS) or circumstance (performing or non- performing). * Former Top SEC Enforcer Returns to Milbank -------------------------------------------- Ben Protess, writing for The New York Times' DealBook, reported that after spending the last few years investigating financial institutions, George Canellos will now be defending them. According to the report, Mr. Canellos, the former co-chief of enforcement at the Securities and Exchange Commission, announced on Wednesday that he would be joining Milbank, Tweed, Hadley & McCloy as a partner and global head of the firm's litigation department. He will start in mid-March, two months after leaving the S.E.C. Milbank is familiar turf for Mr. Canellos, who was a partner at the firm before joining the S.E.C. in 2009, the report said. And although he spoke to a handful of other large law firms after leaving the government -- one firm offered him the chance to lead its New York office -- Mr. Canellos said that he went with his "professional family" at Milbank. "At the end of the day, it wasn't a hard decision," Mr. Canellos said in an interview, the report cited. "There's the nucleus of an outstanding practice already there." As head of global litigation, Mr. Canellos will run a group that has gradually become Milbank's largest department, the report related. The group covers an array of matters, from the sort of securities and white-collar cases Mr. Canellos specializes in to other practices like data privacy and mutual fund litigation. * Private Equity Funds Pour into North American Energy ------------------------------------------------------ Taina Rosa, writing for The Deal, reported that North America is the place to be when it comes to private equity investing in the energy industry. And that's not about to change anytime soon as firms in the sector are expecting to raise more capital and to make more investments in 2014. According to the report, a survey by Ernst & Young LLP of 100 private equity executives focused on oil and gas investments found that 49% of them were currently investing in North America, the highest percentage of all regions. In addition, 77% of the executives surveyed said they expect to see increased private equity interest in North American oil and gas deals. The largest funds in the sector to close in 2013 were all based in North America, the report said. New York-based Riverstone Holdings LLC's Riverstone Global Energy and Power Fund V closed with $7.7 billion; Houston-based EnCap Investments LP's EnCap Energy Capital Fund I closed with $5 billion; and EnerVest Ltd.'s EnerVest Energy Institutional Fund XIII, also in Houston, closed with $2 billion, according to Preqin. Their targets are also more likely to be in North America. Robert Tichio, managing director of Riverstone Holdings, said on Feb. 10, during an energy investing panel at the 20th Annual Venture Capital & Private Equity Conference held at Harvard Business School, that about 86% of his fund's capital goes to North American targets, the report related. First Reserve Corp. managing director Jeffrey Quake added during the panel that his firm deploys half of its fund outside of the U.S., but stressed that opportunities in the country are plentiful, the report further related. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Martin Smith Bankr. N.D. Ala. Case No. 14-80263 Chapter 11 Petition filed January 30, 2014 In re Straight Up, Inc. Bankr. D. Ariz. Case No. 14-01182 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/azb14-01182.pdf represented by: Ernest E. Shaver, Esq. E-mail: e.shaver@cox.net In re Mat's RNR Enterprise dba Dirty Pelican Bankr. D. Ariz. Case No. 14-01190 Chapter 11 Petition filed January 30, 2014 Filed Pro Se In re BAIC Bankr. C.D. Cal. Case No. 14-11784 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/cacb14-11784.pdf represented by: Dana M. Douglas, Esq. DANA M. DOUGLAS, ATTORNEY AT LAW E-mail: dmddouglas@hotmail.com In re Restornations Bankr. C.D. Cal. Case No. 14-11796 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/cacb14-11796.pdf represented by: Dana M. Douglas, Esq. DANA M. DOUGLAS, ATTORNEY AT LAW E-mail: dmddouglas@hotmail.com In re Frank VanDeBoe Bankr. M.D. Fla. Case No. 14-01040 Chapter 11 Petition filed January 30, 2014 In re Dharma Land Trust Bankr. S.D. Fla. Case No. 14-12180 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/flsb14-12180.pdf Filed Pro Se In re Sterling Key Lodging, Inc. dba Relax Inn Bankr. S.D. Ind. Case No. 14-00601 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/insb14-00601.pdf represented by: Jeffrey M. Hester, Esq. TUCKER HESTER BAKER & KREBS, LLC E-mail: jhester@thbklaw.com In re Color Solutions, Inc. Bankr. W.D. Ky. Case No. 14-30310 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/kywb14-30310.pdf represented by: Richard A. Schwartz, Esq. KRUGER & SCHWARTZ E-mail: rick@ks-laws.com In re Marty O'Malley Bankr. D. Nev. Case No. 14-10630 Chapter 11 Petition filed January 30, 2014 In re Monte Cellos of Allison Park, LLC dba Monte Cellos Bankr. W.D. Pa. Case No. 14-20325 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/pawb14-20325.pdf represented by: Robert O. Lampl, Esq. ROBERT O. LAMPL, ATTORNEY AT LAW E-mail: rol@lampllaw.com In re S&L Pour, Inc. dba The Pour House Bankr. W.D. Pa. Case No. 14-20326 Chapter 11 Petition filed January 30, 2014 See http://bankrupt.com/misc/pawb14-20326.pdf represented by: Robert O. Lampl, Esq. ROBERT O. LAMPL, ATTORNEY AT LAW E-mail: rol@lampllaw.com In re Joseph Sullivan Bankr. C.D. Cal. Case No. 14-10711 Chapter 11 Petition filed February 4, 2014 In re Runjhun Bhargava Bankr. C.D. Cal. Case No. 14-12196 Chapter 11 Petition filed February 4, 2014 In re William Velasco Bankr. C.D. Calif Case No. 14-12202 Chapter 11 Petition filed February 4, 2014 In re Linda Catron Bankr. N.D. Cal. Case No. 14-30175 Chapter 11 Petition filed February 4, 2014 In re Michael Forkas Bankr. N.D. Cal. Case No. 14-40493 Chapter 11 Petition filed February 4, 2014 In re Angela Kunkel Bankr. S.D. Fla. Case No. 14-12660 Chapter 11 Petition filed February 4, 2014 In re Our Place Bakery Cafe, LLC Bankr. N.D. Ga. Case No. 14-52411 Chapter 11 Petition filed February 4, 2014 Filed Pro Se In re Savannah Truck Restoring, Inc. dba Savannah Auto Painting and Bodyworks Bankr. S.D. Ga. Case No. 14-40209 Chapter 11 Petition filed February 4, 2014 See http://bankrupt.com/misc/gasb14-40209.pdf represented by: James L. Drake, Jr., Esq. JAMES L. DRAKE, JR., P.C. E-mail: jdrake7@bellsouth.net In re Hassan Abrahim Bankr. S.D. Ill. Case No. 14-30161 Chapter 11 Petition filed February 4, 2014 In re The Villages, LLC Bankr. D. Nev. Case No. 14-10748 Chapter 11 Petition filed February 4, 2014 See http://bankrupt.com/misc/nvb14-10748.pdf represented by: Brandon B. Mcdonald, Esq. MCDONALD LAW OFFICES, LLP E-mail: brandon@mcdonaldlawyers.com In re 473 West End Realty Corp. Bankr. S.D.N.Y. Case No. 14-35211 Chapter 11 Petition filed February 4, 2014 See http://bankrupt.com/misc/nysb14-35211.pdf Filed Pro Se In re Garimar Marine, Inc. Bankr. S.D. Tex. Case No. 14-30781 Chapter 11 Petition filed February 4, 2014 See http://bankrupt.com/misc/txsb14-30781.pdf Filed Pro Se In re Marvin Riske Bankr. D. Ariz. Case No. 14-01394 Chapter 11 Petition filed February 5, 2014 In re Shirley Reidhead Bankr. D. Ariz. Case No. 14-01442 Chapter 11 Petition filed February 5, 2014 In re Frank & Lupe II, LLC dba Frank and Lupes Old Mexico Bankr. D. Ariz. Case No. 14-01457 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/azb14-01457.pdf represented by: Thomas H. Allen, Esq. ALLEN, SALA & BAYNE, PLC E-mail: tallen@asbazlaw.com In re Elizabeth Barbanti Bankr. C.D. Cal. Case No. 14-10739 Chapter 11 Petition filed February 5, 2014 In re Rickey Nero Bankr. N.D. Cal. Case No. 40507 Chapter 11 Petition filed February 5, 2014 In re 2 Real Pizza, LLC dba Domino's Pizza Bankr. M.D. Fla. Case No. 14-01298 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/flmb14-01298.pdf represented by: William J. Rinaldo, Esq. THE RINALDO LAW FIRM, P.A. E-mail: william.rinaldo@rinaldo-law.com In re We Care of the Treasure Coast, Inc. Bankr. S.D. Fla. Case No. 14-12799 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/flsb14-12799.pdf represented by: Kenneth S. Rappaport, Esq. RAPPAPORT OSBORNE & RAPPAPORT, PL E-mail: rappaport@kennethrappaportlawoffice.com In re Kenilworth Associates Bankr. N.D. Ill. Case No. 14-03681 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/ilnb14-03681.pdf represented by: Linda Spak, Esq. SPAK & ASSOCIATES E-mail: attorneyspak@yahoo.com In re Zuchel Properites, LLC Bankr. N.D. Ill. Case No. 14-80333 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/ilnb14-80333.pdf represented by: David L. Stretch, Esq. LAW OFFICE OF DAVID L. STRETCH E-mail: stretchlaw@gmail.com In re The Morson Group, Inc. Bankr. D. Mass. Case No. 14-10450 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/mab14-10450.pdf represented by: Marques Lipton, Esq. THE LAW OFFICES OF TIMOTHY M. MAUSER E-mail: mlipton@mauserlaw.com In re David Krebs Bankr. E.D. Mich. Case No. 14-20223 Chapter 11 Petition filed February 5, 2014 In re Flagship S B Amsterdam NY, LLC dba Saravana Bhavan Amsterdam Bankr. E.D.N.Y. Case No. 14-40530 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/nyeb14-40530.pdf represented by: Lawrence F. Morrison, Esq. THE MORRISON LAW OFFICES, P.C. E-mail: morrlaw@aol.com In re Flagship S B New York, LLC Bankr. E.D.N.Y. Case No. 14-40531 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/nyeb14-40531.pdf represented by: Lawrence F. Morrison, Esq. THE MORRISON LAW OFFICES, P.C. E-mail: morrlaw@aol.com In re Leajak Concrete Construction, Inc. Bankr. W.D. Wash. Case No. 14-10766 Chapter 11 Petition filed February 5, 2014 See http://bankrupt.com/misc/wawb14-10766.pdf Filed Pro Se In re Hennen Company, Inc. Bankr. C.D. Cal. Case No. 14-12290 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/cacb14-12290.pdf represented by: Duane R Folke, Esq. THE LAW OFFICES OF DUANE R. FOLKE E-mail: folkeslaw@hotmail.com In re Wiesia Wojcik Bankr. C.D. Cal. Case No. 14-12313 Chapter 11 Petition filed February 6, 2014 In re Rose Faria Bankr. C.D. Cal. Case No. 14-12318 Chapter 11 Petition filed February 6, 2014 In re Miguel Toscano Bankr. E.D. Cal. Case No. 14-90150 Chapter 11 Petition filed February 6, 2014 In re Howard Adler Bankr. S.D. Cal. Case No. 14-00892 Chapter 11 Petition filed February 6, 2014 In re MME Management, LLC Bankr. D. Conn. Case No. 14-20224 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/ctb14-20224.pdf represented by: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN, P.C. E-mail: ressmul@yahoo.com In re Switch Wireless Solutions, LLC Bankr. M.D. Fla. Case No. 14-01331 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/flmb14-01331.pdf Filed Pro Se In re 3420 W. Devon Corporation Bankr. N.D. Ill. Case No. 14-03824 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/ilnb14-03824.pdf represented by: Linda Spak, Esq. SPAK & ASSOCIATES E-mail: attorneyspak@yahoo.com In re Diamond Plating Company, Inc. Bankr. S.D. Ill. Case No. 14-30169 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/ilsb14-30169.pdf represented by: Mary E. Lopinot, Esq. MATHIS MARIFIAN AND RICHTER, LTD. E-mail: mlopinot@mmrltd.com In re Schryer Properties, LLC Bankr. E.D. Mich. Case No. 14-20233 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/mieb14-20233.pdf represented by: Susan M. Cook, Esq. LAMBERT, LESER, ISACKSON, COOK & GUINTA, P.C. E-mail: smcook@lambertleser.com In re Roger Ochsner Bankr. D. Minn. Case No. 14-40501 Chapter 11 Petition filed February 6, 2014 In re Tersal Construction Services, Inc. Bankr. N.D.N.Y. Case No. 14-30164 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/nynb14-30164.pdf represented by: Dirk J. Oudemool, Esq. E-mail: dirkj5640@outlook.com In re Affordable Enterprises of Westchester, Inc. dba Affordable Carting Bankr. S.D.N.Y. Case No. 14-22168 Chapter 11 Petition filed February 6, 2014 See http://bankrupt.com/misc/nysb14-22168.pdf represented by: Dawn Kirby Arnold, Esq. DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP E-mail: dkirby@ddw-law.com In re Peggy Anderson Bankr. S.D. Tex. Case No. 14-20054 Chapter 11 Petition filed February 6, 2014 In re Robert De La Torre Bankr. M.D. Fla. Case No. 14-00573 Chapter 11 Petition filed February 7, 2014 In re Robert Hale Bankr. M.D. Fla. Case No. 14-01366 Chapter 11 Petition filed February 7, 2014 In re Charles Peterson Bankr. N.D. Ga. Case No. 14-52699 Chapter 11 Petition filed February 7, 2014 In re Jerry Rhoads Bankr. S.D. Iowa Case No. 14-00215 Chapter 11 Petition filed February 7, 2014 In re The Hanger Room, Inc. Bankr. D. Minn. Case No. 14-30460 Chapter 11 Petition filed February 7, 2014 See http://bankrupt.com/misc/mnb14-30460.pdf Filed Pro Se In re Thomas Yaccarino Bankr. D.N.J. Case No. 14-12204 Chapter 11 Petition filed February 7, 2014 In re Dino Nicolette Bankr. D.N.J. Case No. 14-12228 Chapter 11 Petition filed February 7, 2014 In re J3 Energy Group, Inc. Bankr. M.D. Pa. Case No. 14-00532 Chapter 11 Petition filed February 7, 2014 See http://bankrupt.com/misc/pamb14-00532.pdf represented by: Kevin Karl Kercher, Esq. LAW OFFICES OF KEVIN K. KERCHER, ESQ., P.C. E-mail: kevinkk@kercherlaw.com In re Martin Reamy Bankr. E.D. Tex. Case No. 14-40291 Chapter 11 Petition filed February 7, 2014 In re Nancy Foster Bankr. E.D. Va. Case No. 14-30594 Chapter 11 Petition filed February 7, 2014 In re Scott Wilkerson Bankr. W.D. Wash. Case No. 14-10818 Chapter 11 Petition filed February 7, 2014 In re Montagna, Inc. Bankr. S.D. Fla. Case No. 14-13051 Chapter 11 Petition filed February 9, 2014 See http://bankrupt.com/misc/flsb14-13051.pdf represented by: David W. Langley, Esq. E-mail: dave@flalawyer.com In re lliano's Italian Restaurant & Pizzeria, Inc. Bankr. E.D.N.C. Case No. 14-00795 Chapter 11 Petition filed February 9, 2014 See http://bankrupt.com/misc/nceb14-00795.pdf represented by: J.M. Cook, Esq. J.M. COOK, P.A. E-mail: J.M.Cook@jmcookesq.com In re Portabella's Inc. Bankr. M.D. Pa. Case No. 14-00542 Chapter 11 Petition filed February 9, 2014 See http://bankrupt.com/misc/pamb14-00542.pdf represented by: Lawrence G. Frank, Esq. LAW OFFICE OF LAWRENCE G. FRANK E-mail: lawrencegfrank@gmail.com In re Kevin Hahn Bankr. D. Ariz. Case No. 14-01558 Chapter 11 Petition filed February 10, 2014 In re Ronald Lusby Bankr. W.D. Ark. Case No. 14-70371 Chapter 11 Petition filed February 10, 2014 In re Terryl Hess Bankr. C.D. Cal. Case No. 14-11580 Chapter 11 Petition filed February 10, 2014 In re Victor Cazares Bankr. C.D. Cal. Case No. 14-12516 Chapter 11 Petition filed February 10, 2014 In re Fabolon Saint Louis Bankr. S.D. Fla. Case No. 14-13099 Chapter 11 Petition filed February 10, 2014 See http://bankrupt.com/misc/flsb14-13099.pdf represented by: Stan Riskin, Esq. ADVANTAGE LAW GROUP, P.A. E-mail: stan.riskin@gmail.com In re Michael Wigley Bankr. D. Minn. Case No. 14-40541 Chapter 11 Petition filed February 10, 2014 In re Michael's Enterprises of Virginia, Inc. Bankr. E.D. Va. Case No. 14-30611 Chapter 11 Petition filed February 10, 2014 See http://bankrupt.com/misc/vaeb14-30611.pdf represented by: Lee Robert Arzt, Esq. LEE ROBERT ARZT, ATTORNEY AT LAW E-mail: Arztlaw@aol.com In re Maximillian Imports, Inc. dba Northwest Olive Oil Bankr. W.D. Wash. Case No. 14-10853 Chapter 11 Petition filed February 10, 2014 See http://bankrupt.com/misc/wawb14-10853.pdf represented by: David W. Freese, Esq. DAVID W. FREESE, ATTORNEY AT LAW E-mail: freese@integraonline.com ********* 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 by e-mail. 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 the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. 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. ********* 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, 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 2014. 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 ***