/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140505.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 5, 2014, Vol. 18, No. 123 Headlines 100 MANCHESTER: Case Summary & 2 Unsecured Creditors 24 HOUR HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating 571 PASEO MIRAMAR: Voluntary Chapter 11 Case Summary A & S CRUISELINES: Voluntary Chapter 11 Case Summary ADVANCEPIERRE FOODS: Moody's Lowers Corp. Family Rating to 'B3' AFFINION GROUP: S&P Lowers CCR to 'CC' on Exchange Offer AGFEED USA: Seeks June Extension of Plan Exclusivity Period ALLIANT TECHSYSTEMS: Fitch Affirms 'BB+' Issuer Default Rating ALTA BICYCLE: New York's Bike-Share Wobbles on Path to Prosperity ALTAGAS LTD: AIJVLP Continues to Work with Parties on CCAA AMERICAN BANCORP: Involuntary Chapter 11 Case Summary API HEAT: Moody's Cuts CFR to 'B3' & Rates Sr. Secured Debt 'B1' APTELM LLC: Voluntary Chapter 11 Case Summary ASR-FOUNTAINVIEW PLACE: $17M Property Sale OK'd In Ch. 11 AUSTIN CONVENTION: S&P Raises Rating on $165MM Bonds From 'BB+' BELLMONT TERRACE: Voluntary Chapter 11 Case Summary BERNARD L. MADOFF: Trustee Takes Chances in Luxembourg Suit BEVERLY HILLS BANCORP: Case Summary & 18 Top Unsecured Creditors BUFFET PARTNERS: Lender Chatham Intends to Buy Restaurants CALUMET PHOTO: C&A Marketing Acquires Most of U.S.-Based Assets CARPATHIAN GOLD: OSC Issues Management Cease Trade Order CATALENT PHARMA: S&P Raises Rating on Secured Facilities to BB- CETERA FINANCIAL: S&P Withdraws 'B+' ICR at Company's Request CLEAREDGE POWER: Section 341(a) Meeting Scheduled for June 4 CLEAREDGE POWER: Case Summary & 20 Largest Unsecured Creditors COMMUNITYONE BANCORP: Earns $1.3 Million in First Quarter CONSUMER SPECIALTIES: A.M. Best Affirms B Finc'l. Strength Rating COTTONWOOD ESTATE: Can Hire Miller Guymon as Counsel CROFTON L & D: Case Summary & 12 Unsecured Creditors DR. BOTT: Involuntary Chapter 11 Case Summary EASTMAN KODAK: Streamlines Hundreds of Preference Suits EASY LIFE FURNITURE: Case Summary & 20 Top Unsecured Creditors EMERALD SQUARE: Case Summary & Unsecured Creditor ENDO HEALTH: Moody's Affirms 'Ba3' Corporate Family Rating ENERGY FUTURE: Faces Opposition to Restructuring Strategy ENERGY FUTURE: Reports $2.3 Billion Net Loss in 2013 ESSAR STEEL: S&P Assigns Prelim. 'CCC-' Corporate Credit Rating EVENT RENTALS: Court Approves Apollo Acquisition EXPERT GLOBAL: S&P Puts 'B-' Ratings on CreditWatch Negative FENWAY PARTNERS: Raises Small Sum for Single Deal FIBRIA OVERSEAS: Moody's Rates New $500MM Unsecured Notes 'Ba1' FIRST DATA: Incurs $200.5 Million Net Loss in First Quarter FIRSTENERGY CORP: Fitch Affirms 'BB+' IDR & Unsecured Debt Rating FISHER ISLAND: Status Conference Slated for July 31 FIXED INCOME: Courtland to Waive Default & Reinstate Loan FORESTAR GROUP: S&P Assigns 'B' Corp. Credit Rating FORESTAR REAL: Moody's Assigns 'B1' CFR & Rates $250MM Notes 'B2' GARLOCK SEALING: Ruling Spreads to Pittsburgh Corning Case GENERAL MOTORS: Asks Halt to Suits Relating to Bankruptcy GLOBAL GEOPHYSICAL: Accused Of Inflating Revenues GULF STATES LONG TERM: Disbursing Agent May Obtain Files HALE & ETHERIDGE: Case Summary & 5 Unsecured Creditors HAWAIIAN AIRLINES: Fitch Affirms 'B' Issuer Default Rating HD SUPPLY: Amends Fiscal 2013 Annual Report to Add Disclosures HEDWIN CORP: Court Approves Shared Management Resources as CRO HILL WINE: Case Summary & 20 Largest Unsecured Creditors INNERGEX RENEWABLE: DBRS Confirms 'BB' Issuer Rating INTERNATIONAL TEXTILE: Amends 2013 10-K to Add Information JASON HOLDINGS: Moody's Assigns 'B2' Corp. Family Rating JEH COMPANY: Selling 2008 L63 Benz for $32,500 JEH COMPANY: Selling Frost Bank Collateral to Cantwell JEH COMPANY: Slated to Present Plan for Confirmation May 20 KIDSPEACE CORP: First Modified Chapter 11 Plan Confirmed KKR FINANCIAL: Fitch Hikes Preferred Stock Rating From 'BB+' LABORATORY PARTNERS: Cash Budget Revised After Talon Sale LABORATORY PARTNERS: Removal Period Extended to July 23 LABORATORY PARTNERS: Still Evaluating Bechman Coulter Agreement LEVEL 3: Posts $112 Million Net Income in First Quarter LIFEPOINT HOSPITALS: Fitch Rates New $400MM Unsecured Notes 'BB' LIFEPOINT HOSPITALS: Moody's Lowers Senior Debt Rating to 'Ba2' LIFEPOINT HOSPITALS: S&P Affirms 'BB-' CCR; Outlook Negative LOFINO PROPERTIES: Files Amended Schedules F & G MANJIT S. SANDHU: Case Summary & Unsecured Creditor MARISA ANN BELLECI: Facing Chapter 11 Case Dismissal MARSHALL CREEK: Case Summary & 5 Unsecured Creditors MEE APPAREL: Auction to Be Held May 21; Bids Due May 19 MEE APPAREL: Wins Final Approval of $7MM Suchman DIP Financing MEE APPAREL: Innovation Capital Approved as Investment Banker MERCER INT'L: Stendall Mill Gets Waiver for Credit Facilities MERIT LIFE: A.M. Best Affirms 'B' Financial Strength Rating MFM DELAWARE: Court Confirms Amended Chapter 11 Plan MFM DELAWARE: Settlement Resolving Spitfire Claims Gets Court OK MID-EASTERN ASSOCIATES: Voluntary Chapter 11 Case Summary MMODAL HOLDINGS: U.S. Trustee Appoints 3-Member Creditors' Panel MMODAL HOLDINGS: May 6 Hearing on Proposed $30MM DIP Financing MOMENTIVE SPECIALTY: Moody's Affirms 'B3' CFR; Outlook Negative NE OPCO: Hearing Today on Bid to Extend Exclusivity NEWLEAD HOLDINGS: MGP Seeks Add'l 6.5MM Settlement Shares NIELSEN FINANCE: Moody's Rates $394MM Senior Secured Debt 'Ba1' NNN 123 NORTH WACKER: Files Sale-Based Bankruptcy Exit Plan NNN 123 NORTH WACKER: Seeks Approval of Bid/Sale Protocol NNN 123 NORTH WACKER: Challenges Thomas' Case Dismissal Bid NNN 123 NORTH WACKER: May Access Wells Fargo Cash Thru July 31 NNN PARKWAY 400 26: Hearing on UST Dismissal Bid Moved to June 25 NNN PARKWAY 400 26: Baur Firm Okayed to Handle Adversary Case NNN PARKWAY 400 26: Weiland Golden May Handle Adversary Case OIL STATES: S&P Retains 'BB+' CCR on CreditWatch Negative ORMET CORP: 8th Interim Wind Down Plan Approved PACIFIC THOMAS: Hearing on $6.55 Million Loan Moved to June 5 PACIFIC VECTOR: Delays Filing of Annual Financial Statements PERRY ELLIS: S&P Lowers CCR to 'B' on Deteriorated Credit Measures PLAINS END: Fitch Affirms 'BB' Rating on $117.7MM Bonds Rating PREGIS MERGERSUB: Moody's Assigns 'B3' CFR & Rates New Debt 'B2' PROTICA INC: Voluntary Chapter 11 Case Summary QUANTUM FOODS: Asset Sale Hearing Adjourned Until May 12 R2D2 LLC: District Court Revives Some of Screen Capital's Claims RBE: Case Summary & 17 Largest Unsecured Creditors RESOLUTE ENERGY: S&P Alters Outlook to Negative & Affirms 'B' CCR RESTORA HEALTHCARE: Committee Can Hire Alston & Bird as Counsel REVSTONE INDUSTRIES: May 9 Hearing on Approval of PBGC Settlement RIVER-BLUFF ENTERPRISES: Has OK to Use Cash From Receiver Account RIVER-BLUFF ENTERPRISES: Revitalization Wants to End Receivership RIVER-BLUFF ENTERPRISES: Wants Berkadia & Chase Cash Collateral RIVER ROCK: Fails to Make Schedule Interest Payment on Sr. Notes RIVERWALK JACKSONVILLE: Section 341(a) Meeting Set on June 11 ROBERT GRIFFIN: Court Rules on Trustee's Bid to Enforce Accord ROBERT RAEL: Contempt Motion Against Wells Fargo Denied ROCKET SOFTWARE: S&P Affirms 'B' Corp. Credit Rating SARKIS INVESTMENTS: Taps GlassRatner as Financial Advisors SARKIS INVESTMENTS: MSCI Balks at Bid to Retain GA Keen Realty SDNY 19 MAD PARK: Voluntary Chapter 11 Case Summary SIMPLEXITY LLC: Gets Court Approval to Sell Assets to Wal-Mart SIRIUS XM: Moody's Rates New $750MM Senior Unsecured Notes 'B1' SIRIUS XM: S&P Assigns 'BB' Rating to $750MM Sr. Notes Due 2024 SLM CORP: S&P Cuts ICR to BB on Spin-Off; Changes Name to Navient SMD TRUST: Case Summary & 6 Unsecured Creditors STANADYNE CORP: S&P Puts 'CCC' CCR on CreditWatch Positive SUN BANCORP: Amends 2013 Annual Report TAMPA WAREHOUSE: Gets Approval to Extend Term of CBRE Agreement TAMPA WAREHOUSE: Gets Approval to Execute Agreement With CBRE TASC INC: S&P Revises Outlook to Negative & Affirms 'B' CCR TELEPHONE & DATA SYSTEMS: Demoted to Highest Junk Status TENNECO INC: S&P Raises CCR to 'BB+' on Improved Profitability THORNBURG MORTGAGE: Default Judgment in "Lee" Suit Set Aside TOUSA INC: Senior Status of Lot-Option-Agreement Claims Affirmed UNIVERSAL HEALTH: Ch.11 Trustee Seeks Probe on Warburg Pincus UPPER VALLEY: Committee & U.S. Trustee Object to Plan Outline UPPER VALLEY: Objects to Chapter 7 Conversion, Panel Also Reacts URBAN LANDMARK: Case Summary & 20 Largest Unsecured Creditors U.S. STEEL: Fitch Affirms 'BB-' Issuer Default Rating USEC INC: DOE To Take Over Bankrupt Co.'s Uranium Enrichment Plant UTSTARCOM HOLDINGS: DASAN Networks Holds 5% Equity Stake VAIL LAKE: Court Okays 2nd Stipulation on Cash Collateral Use W&T OFFSHORE: S&P Lowers Unsecured Debt Rating to 'B-' WESTERN FUNDING: Court OKs Sale of Las Vegas Property for $1.3MM WESTERN FUNDING: Plan of Liquidation Declared Effective WESTMORELAND COAL: Incurs $19.3 Million Net Loss in First Quarter XTREME POWER: Court Copies New Mexico Case by Reopening Sale YSC INC: Can Sell Wa. Comfort Inn, Objections Addressed * Texas Homestead Exemption Evaporates After Six Months * Bank of America in Settlement Talks over Credit Card Practices * Bitcoin's Boosters Struggle to Shore Up Confidence * NY Regional Health Care Companies Cite Obamacare in Big Losses * High-Yield Debt Deals Set to Break Records * The Deal Announces Bankruptcy League Q1 Rankings * Goodwin Procter Expands Financial Restructuring Practice * BOND PRICING -- For Week From April 21 to 25, 2014 ********* 100 MANCHESTER: Case Summary & 2 Unsecured Creditors ---------------------------------------------------- Debtor: 100 Manchester Realty, LLC c/o Paragon Group 276 Post Road West, Suite 201 Westport, CT 06880-4703 Case No.: 14-50663 Chapter 11 Petition Date: May 2, 2014 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Debtor's Counsel: Stephen M. Kindseth, Esq. ZEISLER & ZEISLER, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 Tel: (203) 368-4234 Fax: 203-367-9678 Email: skindseth@zeislaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Stuart Myers, vice president. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/ctb14-50663.pdf 24 HOUR HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and a B2-PD Probability of Default Rating to 24 Hour Holdings III LLC, as well as Ba3 ratings to the company's proposed senior secured facilities. The proceeds will be used in conjunction with the acquisition of 24 Hour Fitness by private equity group AEA Investors LP and Ontario Teachers' Pension Plan. The ratings outlook is stable. All ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation. In March 2014, AEA Investors LP and Ontario Teachers' Pension Plan signed an agreement to acquire 24 Hour Fitness with an expected closing date in the second quarter of 2014. 24 Hour Holdings III LLC will be the initial borrower, but after the transaction closes 24 Hour Fitness Worldwide, Inc. will be the borrower under the facilities. AEA Investors LP and Ontario Teachers' Pension Plan are proposing to raise a $1 billion senior secured bank facility, consisting of a $150 million 5-year revolver and $850 million 7-year term loan. The senior secured term loan B, up to $500 million of expected senior unsecured notes, and equity contribution, will be used to complete the purchase, refinance existing debt, and pay fees and expenses. The following ratings were assigned: 24 Hour Holdings III LLC (to be assumed by 24 Hour Worldwide, Inc.) Corporate Family Rating at B2 Probability of Default Rating at B2-PD $150 million senior secured 5-year revolving credit facility at Ba3 (LGD 2, 24%) $850 million senior secured 7-year term loan B at Ba3 (LGD 2, 24%) The following ratings will be withdrawn once the transaction closes: 24 Hour Fitness Worldwide, Inc. Corporate Family Rating at B3 Probability of Default Rating at B3-PD $75 million senior secured revolver due 2015 at Ba3 (LGD 2, 18%) $585 million (face value) senior secured term loan B due 2016 at Ba3 (LGD 2, 18%) Ratings Rationale The B2 Corporate Family Rating (CFR) reflects 24 Hour Fitness' high initial leverage and modest interest coverage (expected to be about 6.5 times and 1.5 times, respectively, at the end of fiscal 2014) relative to other business and consumer service company peers. Moody's notes that all credit metrics are adjusted for Moody's standard adjustments, including operating leases, and includes the $500 million of unsecured debt expected to be raised. Moody's does not expect the company to materially repay debt above and beyond required amortization and an expected excess cash flow sweep. Required amortization is expected to be relatively modest as the proposed credit agreement only requires 1% annual amortization of the term loan B and the excess cash flow sweep is calculated after growth capex. The company will likely reinvest excess cash to grow organically and/or through acquisitions. The ratings also consider the company's exposure to economic conditions in California where about 50% of 24 Hour Fitness' clubs are located. Positive consideration is given to Moody's expectation for good cash flow which will be used primarily to fund the company's growth plans, and the material improvement in the company's qualitative factors driven by the reduced risk related to lawsuits. 24 Hour Fitness was subject to relatively large lawsuits (including a lawsuit involving a former Chairman) which have either been resolved, dismissed, or stay with the previous owners. The rating is also supported by the company's business position as a large-scale fitness club operator, strong brand awareness in the markets in which it operates, and the favorable long-term fundamentals for the fitness industry. The stable rating outlook reflects Moody's expectation that 24 Hour Fitness will continue to grow its revenue and earnings by maintaining membership levels, increasing pricing, and contributions from recently opened clubs. In addition, Moody's expects 24 Hour Fitness' liquidity will remain good and that some free cash flow will be used to repay debt above and beyond required amortization. Ratings could be downgraded if membership counts decline, comparable store sales turns negative, or debt/EBITDA remains above 6.0 times by the end of 2015. Ratings could also be downgraded if free cash flow turns negative on a sustained basis, or liquidity deteriorates. Upward rating momentum could develop if the company is able to sustain debt/EBITDA below 4.5 times while maintaining positive comparable same store sales, positive free cash flow and a good liquidity profile. 24 Hour Fitness Worldwide, Inc. is a leading owner and operator of fitness centers in 18 states, with a majority located in California and other western states. As of December 31, 2013, the company operated 413 fitness clubs under three key brand names - 24 Hour Fitness Active, 24 Hour Fitness Sport, and 24 Hour Fitness Super Sport. Collectively, these clubs served approximately 3.8 million members with revenues of about $1.3 billion at Dec. 31, 2013. 571 PASEO MIRAMAR: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: 571 Paseo Miramar, LLC 571 Paseo Miramar Los Angeles, CA 90272 Case No.: 14-17263 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Hon. Neil W. Bason Debtor's Counsel: James R Selth, Esq. WEINTRAUB & SELTH, APC 11766 Wilshire Blvd Ste 1170 Los Angeles, CA 90025 Tel: 310-207-1494 Fax: 310-442-0660 Email: jim@wsrlaw.net Total Assets: $3.13 million Total Liabilities: $1.66 million The petition was signed by David P. Holguin, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. A & S CRUISELINES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: A & S Cruiselines, Inc. 1632 York Avenue New York, NY 10028 Case No.: 14-11297 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Martin Glenn Debtor's Counsel: Jonathan S. Pasternak, Esq. DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP One North Lexington Avenue White Plains, NY 10601 Tel: (914) 681-0200 Fax: (914) 684-0288 Email: jpasternak@ddw-law.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Steven Salsberg, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ADVANCEPIERRE FOODS: Moody's Lowers Corp. Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of AdvancePierre Foods, Inc. ("AdvancePierre" or "APF") to B3 from B2, as well as its Probability of Default Rating to B3-PD from B2- PD. At the same time, the rating outlook was changed to stable from negative. As a result of this rating action, the company's first and second lien term loans have been downgraded to B2 from B1 and Caa2 from Caa1, respectively. The downgrade is largely driven by Moody's view that credit metrics are weak and unlikely to improve sufficiently to levels that will support a B2 rating in the foreseeable future. APF's leverage at December 28, 2013 (FY13) as measured by Moody's adjusted debt-to-EBITDA was approximately 8.4 times. This represents an increase from 7.5 times at December 29, 2012 (FY12). Leverage increased following the company's October 2012 refinancing, which included the payment of a $185 million dividend to its sponsor. Coverage and free cash flow generation are also weak, with Moody's adjusted (EBITDA-capex)/interest at 1.3 times and free cash flow-to-debt at 1% in FY13. Credit metrics have been negatively impacted by lower than anticipated volumes, which was the primary driver of a year-over-year decline in the top-line. Profitability also suffered as favorable pricing actions and productivity-related cost savings were unable to fully offset raw material input cost inflation. Moody's expects raw material cost inflation to remain a challenge for the foreseeable future as protein prices, most notably beef, chicken and pork, remain relatively high. The company is taking steps to further streamline its cost structure through ongoing procurement and operational improvements and align its sales force toward a more customer-centric approach; however, Moody's does not expect these strategic initiatives to result in deleveraging of a sufficient magnitude to support a B2 rating over the intermediate term. APF faces considerable challenges in its ability to fully pass-through raw material cost increases to its customers and grow volumes in a profitable manner within its foodservice segment, which accounts for more than half of the company's net sales. The following ratings have been downgraded at AdvancePierre Foods, Inc.: Corporate Family Rating to B3 from B2; Probability of Default Rating to B3-PD from B2-PD; $925 million first lien term loan maturing July 2017 to B2 (LGD3, 39%) from B1 (LGD3, 43%); and $375 million second lien term loan maturing October 2017 to Caa2 (LGD5, 88%) from Caa1 (LGD5, 89%). The rating outlook is stable Ratings Rationale APF's B3 Corporate Family Rating is reflective of the company's weak credit metrics (very high leverage and weak coverage) and aggressive financial policies. The company's leverage as measured by Moody's adjusted debt-to-EBITDA (including capitalization of operating leases) was over 8.0 times at FYE13, which is very high given its exposure to potentially volatile raw material costs, seasonal working capital needs, and competition from other protein suppliers. The rating anticipates APF will exhibit limited growth in its top-line and profitability resulting in modest deleveraging over the intermediate term. The aggressive financial policies of its private equity owners also weigh on the rating and include the potential for debt-financed dividends and large acquisitions. At the same time, the rating acknowledges APF's benefits from its healthy size and scale, good diversity of product offerings and sales channels, modest customer concentration, and its ability to pass-through a significant portion of increased raw material costs through price lists or contractual agreements based on an index pricing model with customers. Also factored into the rating are management's initiatives to raise prices and rationalize SKUs with a focus on higher margin products. The company's good liquidity profile is a key rating driver and is supported by expectations of positive free cash flow and availability under a $150 million multi-year ABL facility. The stable outlook reflects Moody's expectation that the company will generate modestly improved cash flow that will likely be used for debt repayment and ongoing business investment. Moody's expects leverage (Moody's adjusted debt-to-EBITDA) to approach 7.5 times during the next 12 to 18 months. While not anticipated in the near-term, the ratings could be upgraded if APF is successful in reducing debt while generating positive free cash flow and reducing reliance on its ABL facility. Quantitatively, Moody's adjusted debt-to-EBITDA will need to approach 6.5 times while EBIT-to-interest is sustained above 1.2 times prior to any ratings upgrade. Alternatively, the ratings could be downgraded if liquidity deteriorates and ABL borrowings increase materially. In addition, if Moody's adjusted debt-to- EBITDA increases and is sustained above 8.5 times and/or if Moody's adjusted EBIT-to-interest remains below 1.0 time for an extended period the ratings could face pressure. AdvancePierre Foods, Inc., headquartered in Cincinnati, OH, is a producer and marketer of value-added protein and hand-held convenience items serving the foodservice, retail and convenience and vending store channels. Key products include packaged sandwiches, fully-cooked burgers, Philly steaks, stuffed chicken breasts and country fried chicken. Oaktree Capital Management LP (Oaktree) has owned the company since Pierre Foods, Inc. emerged from bankruptcy in 2008. Net sales for the twelve months ending December 28, 2013 (FY13) were nearly $1.5 billion. AFFINION GROUP: S&P Lowers CCR to 'CC' on Exchange Offer -------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Affinion Group Holdings Inc. to 'CC' from 'CCC+'. The rating outlook is negative. At the same time, S&P lowered its issue-level ratings on Affinion Group Holdings' 13.75%/14.5% PIK toggle notes due 2018 to 'CC' from 'CCC-'. The recovery rating on this debt remains '6', indicating S&P's expectation for negligible (0%-10%) recovery for noteholders in the event of a payment default. In addition, S&P assigned the company's proposed $650 million senior secured first-lien term loan B due 2018 its preliminary 'B' issue-level rating, with a preliminary recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for secured lenders in the event of a payment default. Additionally, S&P assigned the company's proposed $500 million senior secured second-lien term loan B due 2018 our preliminary 'CCC' issue-level rating, with a preliminary recovery rating of '5', indicating S&P's expectation for modest (10% to 30%) recovery for secured lenders in the event of a payment default. Finally, S&P is revising its recovery rating on the company's existing senior secured first-lien term loan to '1' from '2', and subsequently raising its issue-level rating on this debt to 'B' from 'B-'. The downgrade follows Affinion Group Holdings' announcement that it is contemplating making an offer to exchange up to $100 million of its debt for common stock. If the company completes the transaction, S&P would view it as distressed and tantamount to a default, given Affinion Group Holdings' large debt burden. The company is offering to exchange up to $100 million of Affinion Group Holdings' 13.75%/14.5% PIK toggle notes due 2018 at a rate of 100% of face value for common equity at a rate of $3.15 per share. Also, the company is attempting to amend and extend $650 million of its term loan facility to 2018 and issue $500 million of second-lien term loan due 2018. The company would use the proceeds from the second-lien term loan to repay its first-lien term debt. Upon completion of the tender, S&P would lower the corporate credit rating to 'SD' (selective default) and the tendered debt issue-level ratings to 'D'. As soon as possible thereafter, S&P would reassess Affinion Group's post-transaction capital structure. If the company does not pursue or complete the offer, S&P will likely raise the rating back to 'CCC+', the same rating as before the announcement of the offer. Preliminarily, S&P expects that, in the event the tender offers are completed, it would not raise the corporate credit rating higher than the previous 'CCC+' level. S&P acknowledges that the transaction would decrease the total amount of debt outstanding, push out intermediate-term maturities, and reduce cash interest expense. Pro forma debt to EBITDA would be 9.7x, with the transaction completed. However, S&P sees risks surrounding the company's ability to reverse weak operating performance in light of pressure on its domestic membership business from financial institution reregulation. S&P believes that viability questions would remain with respect to the company's highly leveraged capital structure, despite growth in its smaller loyalty products business and international operations. AGFEED USA: Seeks June Extension of Plan Exclusivity Period ----------------------------------------------------------- AgFeed USA, LLC and its affiliated debtors filed on April 21, 2014, a motion requesting an extension of the exclusive period for the filing of a plan and soliciting acceptances. The Debtors' exclusive period expires on April 21, 2014 and acceptances expires on June 18, 2014. The Debtors ask the Court to extend the plan period and solicitation period through and including June 5, 2014 and August 4, 2014, respectively. The Court has extended thosee deadline previously. The Debtors state that there is cause for the Court to extend the deadlines. The Debtors further state that they remain active and engaged in ongoing negotiations with a number of constituencies in an effort to resolve the outstanding issues in connection with the plan and therefore reach an agreement. The Debtors assert in support of their motion that they have successfully addressed various important issues including closing two sales, successfully defended a motion to appoint an examiner, responded to discovery and negotiated a continuance of a motion to appoint Chapter 11 Trustee, and reached a settlement with the Securities and Exchange Commission. The Debtors argue that if granted the extension they intend to use it to achieve as much consensus as possible and begin the process of achieving plan confirmation on or before April 30, 2014. The Debtors state that the termination of the exclusive period would adversely impact them by allowing any party in interest to file a plan, this the Debtors say would upset the negotiating balance they have achieved and would foster a chaotic environment, therefore harm the Debtor's efforts to preserve and maximize the value of their estates. The Bankruptcy Court for the District of Delaware set a hearing on this motion for May 28, 2014, at 1:30 p.m. Eastern Time and set the objection deadline for May 25, 2014 at 4:00 p.m. Eastern Time. About AgFeed Industries AgFeed Industries, Inc., has 21 farms and five feed mills in China producing more than 250,000 hogs annually. In the U.S., the business included 10 sow farms in three states and two feed mills producing more than one million hogs a year. AgFeed's revenue in 2012 was $244 million. AgFeed and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013, with a deal to sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million, absent higher and better offers. The Debtors estimated assets of at least $100 million and debts of at least $50 million. Keith A. Maib signed the petition as chief restructuring officer. Hon. Brendan Linehan Shannon presides over the case. Donald J. Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors Inc. acts as the Debtors' financial advisor. The Debtors' claims and noticing agent is BMC Group, Inc. The U.S. Trustee has appointed a five-member official committee of unsecured creditors to the Chapter 11 cases. The Creditors' Committee tapped Lowenstein Sandler as lead bankruptcy counsel and Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as the Creditors' Committee's financial advisor. An official committee of equity security holders was also appointed to the Chapter 11 cases. The Equity Committee tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as co-counsel. In October 2013, AgFeed completed the sale of the U.S. operations to three buyers for $79.45 million, including $53.4 million in cash. In November 2013, the Court authorized AgFeed to sell its Chinese assets to Hong Kong firm Good Charm International Development Ltd. in a deal that is expected to net the debtor $45 million once several highly negotiated price adjustments are factored in. An auction was held for the Chinese facilities on Nov. 20, although no one emerged to top what was originally a $50.5 million bid. The price was lowered by $3.45 million in view of what the contract called "newly discovered" operational problems and "deterioration of the performance" of feed mills. In December 2013, AgFeed filed a proposed plan of liquidation showing all creditors as being paid in full, with interest. The Plan proposes to create a trust to prosecute lawsuits and collect remaining assets. ALLIANT TECHSYSTEMS: Fitch Affirms 'BB+' Issuer Default Rating -------------------------------------------------------------- Fitch Ratings has affirmed Alliant Techsystems, Inc.'s (ATK) Issuer Default Rating (IDR) at 'BB+' following the announcement of a plan to spin off the company's Sporting Group and then merge with Orbital Sciences Corporation (Orbital). Fitch has also affirmed the ratings for ATK's senior secured facilities and unsecured indebtedness. The Rating Outlook is Stable. Fitch's ratings currently cover approximately $2.1 long term debt. The company's full rating list follows at the end of this release. Key Rating Drivers On April 29, 2014, ATK announced a plan to spin off its Sporting Group into a standalone company. Fitch estimates the Sporting Group would account for more than 40% of ATK's pre-spinoff pro- forma 2014 revenues. None of ATK's existing debt will be assumed by the Sporting Group. The spin-off will immediately be followed by a tax-free, stock merger between ATK's remaining business units and Orbital. The merger will form a pure Aerospace and Defense company named Orbital ATK which will generate approximately $4.5 billion and $600 million in revenues and EBITDA, respectively. Fitch believes the spin-off and merger will be neutral to ATK's current ratings. ATK expects to receive a dividend from the spin-off in the range of $300 million to $350 million. The company expects to use proceeds to reduce ATK's current indebtedness. Orbital ATK is expected to assume approximately $1.7 billion of ATK's gross long term debt after repaying Orbital's existing senior secured facilities. Fitch estimates the new company will have approximately 2.9x leverage (gross debt/EBITDA), which is in line with Fitch's original expectations for ATK's year-end leverage. Fitch expects other financial metrics of Orbital ATK to be commensurate with ATK's current ratings. Both transactions should be completed by the end of 2014, subject to approvals by regulatory authorities and the shareholders of both companies. The merger will unite two major players in the space and aviation systems sectors, and it should present significant synergy opportunities through vertical integration between ATK's heritage propulsion systems and space components operations and Orbital's business units. Orbital ATK will have a significant exposure to the U.S. Government; however, its programs will be highly diversified with sales to NASA, DoD and commercial aerospace customers. In addition to adequate leverage and liquidity, the ratings and Stable outlook are supported by both ATK's and Orbital's solid margins and strong cash flows, good product/program diversification, significant cost saving synergy opportunities from the merger, and Orbital ATK's role as a sole source provider for many of its products. Fitch is concerned with merger integration; continued uncertainty surrounding core defense spending after fiscal 2015; an anticipated decline in small caliber ammunition demand; and lower contract rates which resulted from the renewal of the Lake City operating contract in fiscal 2013; lower modernization activities at Lake City; and rising competition is some space sectors. Additionally, the spin-off and subsequent merger will significantly increase the company's exposure to the U.S. Government which should account for more than 75% of total revenues. Fitch is also concerned with the underfunded status of ATK's legacy pension (77% funded as of the end of fiscal 2013). Fitch expects Orbital ATK will retain the majority of ATK's pension liabilities and will continue making significant pension plan cash contributions. Orbital's defined benefit pension plans are fully funded and are not material. Fitch will monitor Orbital ATK's cash deployment strategies, but Fitch expects the company's share repurchases and dividends will be moderate. Fitch anticipates Orbital ATK's acquisition activities will also be moderate. Fitch expects ATK's FCF to be in the $225 to $275 million range though calendar 2014. The spin-off will allow the Sporting Group to focus on its core competencies and will have a more focused strategy. ATK announced that some of the current executive team will be taking leading management roles in the standalone Sporting group. The sporting group is expected to generate approximately $360 million EBITDA at the end of 2014. The Sporting Group will have a strong position within the sporting goods industry as a standalone company driven by major 2013 acquisitions. Savage offered the Sporting Group an opportunity to enter the firearm manufacturing segment providing the company with opportunities to leverage its accessories business and strong distribution channels. The Bushnell acquisition diversified the group's portfolio of sporting goods accessories and sports optics while providing an entry to the performance and safety eyewear market. Rating Sensitivities Fitch does not expect to take positive rating actions over the next several years while Orbital ATK works through the consolidation and integration processes after the merger, and also while the company clarifies some elements of its post-merger strategic and financial policies. Fitch may take a negative rating action if Orbital ATK's leverage increases to the 3.1x - 3.3x range. A negative rating action could also be expected if the company completes a debt funded acquisition, encounters integration problems, or does not achieve the planned merger synergies. Fitch affirms ATK and its debt as follows: -- Long-term IDR at 'BB+'; -- Senior secured bank facility at 'BBB-'. -- Senior unsecured Notes at 'BB+' -- Convertible senior subordinated notes at 'BB'; -- Senior subordinated notes at 'BB'. ALTA BICYCLE: New York's Bike-Share Wobbles on Path to Prosperity ----------------------------------------------------------------- Andrew Tangel and Laura Kusisto, writing for DBR Small Cap, reported that a lingering disagreement between New York City officials and the company that runs Citi Bike threatens to deprive the bicycle-sharing program of more revenue as a crucial spring sign-up period approaches. Alta Bicycle Share Inc., the Portland, Ore.-based company that runs Citi Bike, has proposed increasing the cost of annual memberships from $95 to $140, the report said, citing people familiar with the matter. The DBR Small Cap, citing Agence France-Presse, previously reported that New York's bikeshare program may be hugely popular with just over 100,000 annual members but after operating less than a year, it is desperately searching for a $14 million investment. A long, freezing winter may have put the brakes on all but the most fanatical of cyclists, but with the arrival of spring the bikes' royal blue livery will once again become omnipresent, the report said. ALTAGAS LTD: AIJVLP Continues to Work with Parties on CCAA ---------------------------------------------------------- AltaGas Ltd. on May 1 reported record first quarter normalized earnings of $73.7 million ($0.60 per share), compared to $55.5 million ($0.53 per share) in the same period 2013. Normalized EBITDA increased 23 percent to $179.2 million for the first quarter 2014, compared to $145.9 million for the same period 2013. Normalized funds from operations was $129.8 million ($1.06 per share) for the three months ended March 31, 2014, compared to $122.4 million ($1.16 per share) for the same period 2013. "We are pleased to report a record quarter with strong asset performance across all our business segments," said David Cornhill, Chairman and CEO of AltaGas. "The stronger results were driven mainly by the energy infrastructure assets we added over the past two years and there is more to come. The Board and management remain committed to delivering shareholder value as we continue to execute on our five-year, $2.5 billion growth plans." Increased earnings in the first quarter were driven by higher natural gas volumes processed, the partial ownership of Petrogas, the addition of Blythe, colder weather in Michigan, Alberta and Nova Scotia, and favorable exchange rates. Results in the quarter were partially offset by lower earnings from Power in Alberta and higher costs in Gas related to natural gas storage and extraction premiums. In addition, the Blythe facility was on major turnaround during the month of March. On a GAAP basis, net income applicable to common shares was $39.9 million ($0.33 per share) for the three months ended March 31, 2014, compared to $49.0 million ($0.46 per share) for the same period 2013. Net income applicable to common shares includes an after-tax gain of $9.0 million from the sale of assets, offset by a non-cash after-tax provision of $28.7 million related to assets from the acquisition of Taylor NGL Limited Partnership in 2008, a non-cash after-tax provision of $8.1 million related to a number of small hydro power assets under development that are in a sales process, mark-to-market accounting and the cost of early redemption of medium-term notes. In the first quarter, AltaGas continued to make progress on its five-year $2.5 billion growth program. AltaGas sanctioned the Alton natural gas storage project in Nova Scotia and the regional liquefied natural gas (LNG) project in Dawson Creek, B.C., for approximately $125 million. This brings total secured growth capital to over $1 billion. Northwest Run-of-river Projects AltaGas continues to make solid progress on its three Northwest run-of-river hydro projects. Forrest Kerr completed commissioning of the head-works and intake structure at the end of March, which set the stage for the project to achieve a significant milestone on April 28 with commencement of waterflow into the power tunnel. Remaining commissioning and construction activities continue on schedule with the focus on the powerhouse systems and high voltage switchyard. The tailrace tunnel was completed during first quarter 2014 with all tunnelling and underground excavation work now finished. AltaGas expects the Northwest Transmission Line to be available in time to enable Forrest Kerr to be in service by mid-2014. At the 16 MW Volcano Creek project, construction continues to pace ahead of schedule. The tailrace is complete, with no further in- river work required. The turbine assembly is in progress and the penstock installation has commenced. The project remains on track to be in service in late 2014. At the 66 MW McLymont Creek project, excavation of the powerhouse foundation is complete and installation of the powerhouse foundations has commenced. Clearing of the intake access road is 85 percent complete and approximately 65 percent of the 2,800 metre tunnel has been excavated. The project is expected to be in service in mid-2015. Energy Exports AltaGas has made significant progress in developing its liquefied petroleum gas (LPG) export business. The AltaGas Idemitsu Joint Venture Limited Partnership's (AIJVLP) two-thirds ownership of Petrogas, together with Petrogas' acquisition of the Ferndale LPG export terminal in the State of Washington are significant steps in moving the LPG export initiative forward. The goal is to reach 60,000 Bbls/d of export capability through Ferndale and one other export facility by the end of the current decade. AltaGas, Idemitsu and Petrogas are working together to build the LPG export business from Ferndale. LPG shipments are targeted to start in the second quarter of 2014 and increase over the course of the next few years. In addition to the Ferndale site, the AIJVLP continues to progress the development of a LPG export terminal on the west coast of Canada. Terminal sites and refrigeration technology have been identified and FEED studies are ongoing. AltaGas continues to advance its LNG export initiative. The AIJVLP continues to focus on the Triton LNG project, which received approval from the National Energy Board on April 16, 2014, to export 2.3 million tonnes of LNG per year. LNG exports are subject to consultations with First Nations and the completion of the feasibility study, siting, permitting, regulatory approvals and facility construction. The AIJVLP continues to work with various parties to support the Companies' Creditors Arrangement Act (CCAA) Plan of Arrangement proceedings for the Douglas Channel LNG project. The various parties continue to work on completing term sheets which may allow the project to be restructured under CCAA in accordance with the terms which have been substantially agreed to by the secured creditors. The completion of the term sheets is currently targeted for May 5. If the May 5 deadline is met, AIJVLP plans to develop definitive agreements and stakeholders are expected to vote on the CCAA plan of arrangement following the approximately six-week proof of claim period. AltaGas -- http://www.altagas.ca-- is an energy infrastructure business with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources. AMERICAN BANCORP: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: American Bancorporation 1578 University Avenue West St. Paul, MN 55104 Case Number: 14-31882 Involuntary Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court District of Minnesota (St Paul) Judge: Hon. Katherine A. Constantine Petitioners' Counsel: Shannon E Daily, Esq. Jason W Harbour, Esq. HUNTON & WILLIAMS LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 - and - Jeffrey D Klobucar, Esq. BASSFORD REMELE, P.A. 33 South Sixth Street, Suite 3800 Minneapolis, MN 55402 Tel: 612-333-3000 Fax: 612-333-8829 Email: jklobucar@bassford.com Alleged Debtor's petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Alesco Preferred Funding XV Trust Preferred, $27,374,355 Ltd. Guaranty ATP Management, LLC c/o Constantine M. Dakolias 1345 Avenue of the Americas New York, NY 10105 Alesco Preferred Funding Truste Preferred, $13,728,561 XVI, Ltd. Guaranty ATP Management, LLC c/o Constantine M. Dakolias 1345 Avenue of the Americas New York, NY 10105 Alesco Preferred Funding II, Trust Preferred, $7,000,000 Ltd. Guaranty plus Cohen & Company Financial accrued Management LLC and unpaid c/o Peter Addei interest Circa Centre, 2929 Arch Street 17th Floor Philadelphia, PA 19104 API HEAT: Moody's Cuts CFR to 'B3' & Rates Sr. Secured Debt 'B1' ---------------------------------------------------------------- Moody's Investors Service downgraded API Heat Transfer ThermaSys Corporation's (previously known as ThermaSys Corporation) corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD. The rating on first lien senior secured credit facilities, including $265 million term loan due 2019 and $35 million revolver due 2018, was affirmed at B1. The rating outlook is stable. The rating action reflects weaker than expected operating performance of the company, including lower revenues and weaker earnings, which together with a slower than expected pace of debt repayments resulted in an increased leverage profile, and adjusted debt-to-EBITDA of 7.0x compared to 6.2x a year ago. In Moody's view, API's current leverage and other credit metrics including adjusted FCF-to-debt of 1.5% (excluding dividends) and EBITA to interest coverage of 1.5x are more consistent with the B3 rating category. Over the next 12 to 18 months, Moody's anticipate that any improvement in the company's revenue and earnings will be challenged by continuing weakness in certain end markets, resulting in constrained free cash flow generation and limited opportunities for debt repayment. The affirmation of the senior secured debt rating reflects the loss absorption provided by the significant balances of unsecured obligations and PIK mezzanine debt in the company's capital structure. The following rating actions have been taken: Corporate family rating, downgraded to B3 from B2; Probability of default rating, downgraded to B3-PD from B2-PD; $265 million first lien senior secured term loan due 2019, affirmed at B1 (LGD3, 31%); $35 million first lien revolver due 2018, affirmed at B1 (LGD3, 31%); Outlook, stable. Ratings Rationale The B3 corporate family rating reflects API's high leverage, cyclicality of end markets, small size relative to the rated manufacturer universe, limited operating history as a combined entity, and risks associated with ongoing integration and business restructuring initiatives. In Moody's view, leverage will remain elevated and key credit metrics will remain weak in the intermediate term as Moody's anticipate only gradual improvement in revenue and EBITDA that is not expected to result in significant free cash flow generation to be available for debt repayment. Additionally, the rating reflects long-term risks associated with potential shareholder friendly actions. The company's rating is supported by its broad product portfolio of heat exchanger offerings, global geographic footprint and production capabilities, as well as the diversity of served end markets that include mobile power generation, process, hydraulics, oil and gas industries. Additionally, the company benefits from its solid market position in the highly fragmented global heat exchanger market, and barriers to entry such as product capabilities, long-standing customer relationships and required capital investments. API has sufficient liquidity, supported by availability under its $35 million revolving credit facility, extended debt maturity profile, and the expectation of compliance with its springing senior secured net leverage covenant, applicable if revolver utilization exceeds 20%. The liquidity profile, however, is constrained by weak free cash flow generation and limited cash balances. The stable outlook assumes that API will demonstrate modest revenue and earnings growth organically and as a result of strategic business initiatives and synergy realization, and reduce its adjusted debt-to-EBITDA to 6.5x in the intermediate term. Additionally, Moody's expect the company to continue to implement its integration activities without any major disruptions. The ratings could be upgraded if the company demonstrates a longer track record as a combined entity, builds size and scale, improves earnings and free cash flow generation that would allow adjusted leverage to decline below 5.5x and EBITA to interest coverage to improve above 2.0x. The ratings could be downgraded if the company's operating performance deteriorates as a result of margin or revenue weakness, causing adjusted debt-to-EBITDA to exceed 7.0x for an extended period of time and EBITA interest coverage to be sustained below 1.25x. Additionally, if the company were to lever up for an acquisition or another dividend the ratings could be downgraded. API Heat Transfer ThermaSys Corporation (previously known as ThermaSys Corporation), headquartered in Buffalo, NY, is a designer and manufacturer of industrial heat exchangers. The company was formed following the combination of two legacy entities: API Group Holdings, LLC and ThermaSys Group Holding in April 2012. API offers a broad range of heat transfer products through its five business segments: Air-Cooled Group (which resulted from a combination of Airtech and Covrad GT units), Basco, Schmidt-Bretten, Thermal Transfer Products, and ThermaSys Tubing. The company is majority owned by private equity sponsor Wellspring Capital Partners. In 2013, the company generated approximately $375 million in revenues. APTELM LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: APTELM LLC aka 537 Elm LLC 10 Rollins Road, Suite 217 Millbrae, CA 94030 Case No.: 14-30693 Chapter 11 Petition Date: May 2, 2014 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Hannah L. Blumenstiel Debtor's Counsel: Lawrence A. Jacobson, Esq. LAW OFFICES OF COHEN AND JACOBSON LLP 900 Veterans Blvd. #600 Redwood City, CA 94063 Tel: (650) 261-6280 Email: laj@jacobsonattorneys.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Amir Shahmirza, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ASR-FOUNTAINVIEW PLACE: $17M Property Sale OK'd In Ch. 11 --------------------------------------------------------- Law360 reported that American Spectrum Realty Inc. subsidiary ASR- Fountainview Place LP earned authorization from a federal bankruptcy judge in Texas to sell off a Houston commercial property for $17.3 million in order to pay creditors who sought to foreclose on it. According to the report, ASR-Fountainview sought approval for the free and clear sale of the property, which includes two commercial buildings and undeveloped land, to the Houston Housing Authority. Judge David R. Jones approved the motion to sell and ordered the removal of liens on the property and for ASR-Fountainview to use some of the proceeds of the sale to pay off creditor Fountainview VPL LLC the more than $12 million it owes the company. ASR-Fountainview "has exercised sound business judgment? by deciding to sell the property to pay off creditors, Law360 cited Judge Jones as saying. The property is encumbered by two liens, one for more than $600,000 by Hartside Holdings LLC and another for almost $1 million by Harris County, Texas, the report said, citing court documents. American Spectrum?s primary creditors -- Fountainview VPL, NW Spectrum VPL LLC and Parkway I & II VPL LLC -- objected to the motion to sell, saying the property should not be sold piecemeal. The case is ASR-Fountainview Place LP, Case No. 14-30175 (Bankr. S.D. Tex.). The Debtors' counsel is William Alfred Wood, III, Esq., at BRACEWELL & GIULIANI LLP, in Houston, Texas. AUSTIN CONVENTION: S&P Raises Rating on $165MM Bonds From 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its ratings on Austin Convention Center Enterprises Inc.'s $165 million first- tier revenue bonds series 2006A to 'BBB-' from 'BB+' and $95.17 million second-tier revenue bonds series 2006B to 'BB' from 'BB-'. The outlook is stable. The '6' recovery rating on the Series 2006B bonds remains unchanged. At the same time, S&P withdrew the recovery rating on the Series 2006A bonds because it do not assign recovery ratings to investment-grade ratings. Standard & Poor's rating on Austin Convention Center's $165 million first-tier revenue bonds series 2006A is 'BBB-', and its rating on the hotel's $95.17 million second-tier revenue bonds series 2006B is 'BB'. The ratings reflect the hotel project's location near the convention center, the strength of the Austin hospitality market, which has been above the hospitality industry's national average for the past three years, its solid operating performance, its adequate liquidity, an experienced hotel operator in Hilton Hotel Worldwide, and the highly cyclical and competitive nature of the hospitality sector. The outlook on both issue-level ratings is stable. The series B bonds recovery rating is '6', indicating our expectation for negligible (0% to 10%) recovery, if a payment default occurs. The series 2006 bond proceeds refunded the 2001 first- and second- tier series bonds, which the project used to build the 800-room convention center headquarters hotel in downtown Austin, Texas. The stable outlook reflects S&P's view that the project's solid operating performance and financial measures will be maintained, driven by the continued strong performance of the Austin hospitality market. S&P believes that over the next several years there could be some further growth in the ADR, especially given that demand still exceeds hotel supply and convention center booking trends are favorably offset by the addition of hotel room supply to the market over the next several years. S&P could lower the ratings because of a prolonged economic slowdown, significant operating expense growth, or the arrival of a new direct competitors that results in operating performance that is weaker than S&P's expectations and reduces the eries 2006A bonds DSCR to less than 2x for more than two years. S&P would consider downgrading the series 2006B bonds if DSCR declines and is sustained below 1.2x. In addition, a significant reduction in liquidity could also result in lower ratings. Although not likely in the near term given S&P's expectations for an increase in hotel room supply in the Austin market over the next several years, it could raise the rating if the project saw a successful track record of financial performance well in excess of our forecasts throughout the hospitality cycle in Austin that results in sustained series 2006A bonds DSCR of more than 3x. To upgrade the series 2006B bonds, the DSCR would have to be sustained throughout the hospitality cycle in the 1.9x area. BELLMONT TERRACE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Bellmont Terrace, LLC 6823 E Montreal PL Scottsdale, AZ 85254 Case No.: 14-06563 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Hon. Brenda Moody Whinery Debtor's Counsel: Carlos M. Arboleda ARBOLEDA BRECHNER 4545 E. Shea Blvd., #120 Phoenix, AZ 85028 Tel: 602-482-0123 Fax: 602-482-4068 Email: arboledac@abfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Derek Stebner, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. BERNARD L. MADOFF: Trustee Takes Chances in Luxembourg Suit ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the liquidation of Bernard L. Madoff Investment Securities Inc. won't make law on whether a U.S. court has the power to block a liquidator in a foreign bankruptcy from suing a U.S. trustee abroad. Still, the case may determine whether a judgment obtained by a creditor abroad is worth the paper it's written on, according to Mr. Rochelle. The question is important because a foreign court could end up saddling the bankrupt Madoff estate with a judgment for billions of dollars. Mr. Rochelle relates that the story starts in Luxembourg, where liquidators for Access Management Luxembourg SA were sued by the liquidators of Luxalpha SICA V. The Luxalpha liquidators said their investors weren't aware that investments with Access had been turned over to Madoff. The Access liquidators in turn sued the U.S. Madoff trustee, Irving Picard, in Luxembourg to recover what could be billions of dollars in damages owed to Luxalpha, according to court papers Picard filed. Picard filed his own suit in the U.S. in 2012, asking a bankruptcy judge in New York to compel the Access liquidators to stop the suit in Luxembourg against Madoff's firm, Mr. Rochelle further relates. Picard said that U.S. bankruptcy law's "automatic stay" on litigation extends to actions taken anywhere in the world. The Access liquidators, who didn't want the suit in U.S. bankruptcy court, brought the issue to U.S. District Judge Jed Rakoff in Manhattan, the report said. Judge Rakoff ruled last August that the bankruptcy judge should first decide if Picard even had the right to sue in the U.S., based on whether a foreign liquidator had "minimum contacts" with the U.S. to form the basis for a suit in its courts. The Luxembourg case in district court is Picard v. Access Management Luxembourg SA (In re Bernard L. Madoff Investment Securities LLC), 12-mc-00115, U.S. District Court, Southern District New York (Manhattan). The lawsuit in bankruptcy court is Picard v. Access Management Luxembourg SA (In re Bernard L. Madoff Investment Securities LLC), 12-ap-01563, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BEVERLY HILLS BANCORP: Case Summary & 18 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Beverly Hills Bancorp Inc. c/o Development Specialists, Inc. 333 S. Grand Ave., Suite 4070 Los Angeles, CA 90071-1544 Case No.: 14-10897 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin J. Carey Debtor's Counsel: Joseph M. Barry, Esq. Robert S. Brady, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax: 302-571-1253 Debtor's Restructuring Advisors: Bradley D. Sharp DEVELOPMENT SPECIALISTS, INC. Wells Fargo Center 333 South Grand Avenue Suite 4070 Los Angeles, CA 90071-1544 Tel: 213-617-2717 E-mail: bsharp@dsi.biz Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Bradley D. Sharp, chief restructuring officer. A list of the Debtor's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/deb14-10897.pdf BUFFET PARTNERS: Lender Chatham Intends to Buy Restaurants ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Furr's Fresh Buffet, the operator of 29 buffet-style restaurants, will be sold to the secured lender in exchange for debt absent a better offer at an April 25 auction. According to the report, secured lender Chatham Capital Partners, owed $39 million, is under contract to make the first bid at auction. Absent a higher bid, Chatham will purchase the business in exchange for $21.9 million in secured debt. In addition, Chatham will pay expenses of the Chapter 11 effort, with fees for company counsel capped at $600,000 and those for the creditors' committee capped at $250,000. Chatham will also contribute $500,000 to a trust exclusively for general unsecured creditors, the report related. On account of its deficiency claim, Chatham agreed to allow other unsecured creditors to receive the first $500,000. The U.S. Trustee objected to the sale, saying the $500,000 "gift" to unsecured creditors is a disguised Chapter 11 plan and violates priorities created in bankruptcy law, the report said. About Buffet Partners Buffet Partners, L.P., owns and operates Furr's Fresh Buffet, a restaurant chain with 29 restaurants in Arizona, Arkansas, New Mexico, Oklahoma and Texas. With a 65+ year operating history, Furr's -- http://www.furrs.net-- operates straight-line and scatter-bar buffet units that feature a variety of all-you-can-eat and home-cooked foods served at an affordable price. Buffet Partners was formed to purchase Furr's in September 2003. Headquartered in Plano, Texas, Buffet Partners and an affiliate sought Chapter 11 protection in Dallas (Bankr. N.D. Tex. Case No. Case No. 14-30699) on Feb. 4, 2014. Attorneys at Baker & McKenzie LLP serve as counsel to the Debtors. Bridgepoint Consulting is the financial advisor. Buffet Partners disclosed $33,281,729 in assets and $48,926,256 in liabilities as of the Chapter 11 filing. William T. Neary, U.S. Trustee for Region 6, appointed five creditors to serve in the Official Committee of Unsecured Creditors. The restaurant was founded in 1946 by Roy Furr, and expanded to approximately 60 locations as a family-owned business for over 35 years. In 1980, it was acquired by Kmart Corporation. Kmart ultimately sold Furr's in a leveraged buy-out which subsequently went public in 1986. Following a take-private transaction, the Company entered a period of decline due to its debt burden, culminating in a restructuring and reorganization under chapter 11 in 2003 in Dallas, Texas. CALUMET PHOTO: C&A Marketing Acquires Most of U.S.-Based Assets --------------------------------------------------------------- C&A Marketing Inc., a global manufacturer, distributor and online reseller of cameras and photographic equipment, has acquired most of Calumet Photo's US-based assets including IP-related entities and buyer's rights. The 75 year-old, Chicago-based chain abruptly closed its 14 stores and filed for Chapter 7 bankruptcy protection in March 2014. Calumet built its venerable brand by catering to professional photographers and serious enthusiasts, providing them a retail experience and destination for "pro-level" brands like Mamiya, Hasselblad, Phase One and Leaf Imaging. In keeping with their ?pro-centric' model, Calumet also operated a comprehensive, high-end photography rental business that C&A will reopen in the near future. C&A Marketing is an industry veteran in the imaging space, having over 20 years' experience in sourcing and retail operations in the photographic industry. As the Polaroid Licensee for instant digital imaging products, Sports Action cameras, IP home security cameras and photo accessories, C&A plays a significant role in the resurgence of that iconic American imaging brand. C&A also acquired all retail, inventory and IP-related assets of Ritz Camera & Imaging in 2012 and has since returned the storied brand to profitability. The company plans to incorporate the Calumet assets acquired in [Thurs]day's bankruptcy proceedings into its Ritz portfolio. C&A views this acquisition as a key component to now providing the highest level of photography professionals the best in products and services. "There's a strong social component to photography and imaging that doesn't exist with most other retail categories," said Harry Klein, President of C&A Marketing. "Whether you make a living with your camera, as is the case with many Calumet customers, or you are a casual photographer -- pictures are personal. We know what didn't work for Calumet and we know what's working for Ritz and Polaroid and our other imaging-related entities and we are prepared to invest the time and capital to rebuild. Ideally, it's about finding the sweet spot and adapting what we know to bring back the Calumet brand in a manner that restores the confidence of the existing customer base and designed to ensure long-term success in the current and future photographic environments." While many other imaging retailers have been closing their doors, C&A is expanding, including the recent acquisition of four Cardinal Camera stores as well as expanding RitxPix.com. With its online imaging business, a high-end full-service printing facility in Hapeville, Georgia, and state-of-the-art mini-printing labs in each Ritz Camera store, C&A has broadened its photography printing business, by offering photo restoration, large size printing, medium format film processing, custom high quality photo books, photo gifts and a photo archival service called Scanman Photo . "Calumet is a brand that over three quarters of a century built an enviable international reputation by servicing a very demanding customer base -- the photography professional," explained Chaim Pikarski, C&A Marketing's Executive Vice President. "We clearly have the background and the DNA to meet and exceed that customer's expectations, as well as the resources to support these pros in terms of inventory and services. Calumet has a strong, loyal customer base which is the best foundation to build and rebuild on. Regardless, if we move forward with a variation of the traditional retail model, on-line or a hybrid representing both, Calumet's customers can look forward to their loyalty being rewarded in the very near future." C&A Marketing is currently evaluating which, if any, stores to re- open but will be reactivating all of Calumet's on-line properties in the next few weeks, as well as reopening its rental business. For more information, please visit use http://camarketing.com/calumet About C&A Marketing, Inc. C&A Marketing is a manufacturer, distributor and online reseller of cameras and photographic equipment. Headquartered in Ridgefield Park, N.J., C&A is the Polaroid Licensee for instant digital camera, sports video camera, IP home security cameras and photo accessories. In addition, C&A owns and operates 14 Ritz Camera and Image stores across the United States including Camera World, Wolf Camera and Inkley's Camera. C&A also continues to expand the RitzPix.com imaging business. With over two decades in business, the depth and breadth of their inventory is constantly expanding as is their presence and reputation in the consumer electronic marketplace. About Calumet Photographic Calumet Photographic, Inc., a Chicago, Illinois-based photography chain, filed a petition under Chapter 7 of the Bankruptcy Code (Bankr. N.D. Ill. Lead Case No. 14-08893) on March 12, 2014, listing assets of $50 million to $100 million and debts of $10 million to $50 million. The Debtor is represented by Mark A. Berkoff, Esq., at Neal, Gerber & Eisenberg LLP, in Chicago, Illinois. Silverman Consulting serves as financial advisor. Catherine Steege, Esq., has been named the Chapter 7 Trustee. She is represented by: Catherine Steege, Esq. Melissa Root, Esq. Landon S. Raiford, Esq. JENNER & BLOCK LLP 353 N. Clark St. Chicago, IL 60654 E-mail: csteege@jenner.com mroot@jenner.com lraiford@jenner.com CARPATHIAN GOLD: OSC Issues Management Cease Trade Order -------------------------------------------------------- Carpathian Gold Inc. is providing this second bi-weekly default status report in accordance with National Policy 12-203 respecting Cease Trade Orders for Continuous Disclosure Defaults ("NP 12- 203"). On March 14, 2014, the Corporation announced (the "Default Announcement") that, for the reasons set out in the Default Announcement, the filing of the Corporation's audited annual financial statements, related management's discussion and analysis and accompanying CEO and CFO certifications for the financial year ended December 31, 2013 (collectively, the "Required Filings") would not be completed by the prescribed period for the filing of such documents under Parts 4 and 5 of National Instrument 51-102 respecting Continuous Disclosure Obligations and pursuant to National Instrument 52-109 respecting Certification of Disclosure in Issuer's Annual and Interim Filings, namely within 90 days of the year-end, being March 31, 2014. As a result of this delay in the filing of the Required Filings, the Ontario Securities Commission (the "OSC") issued a management cease trade order (the "MCTO") on April 16, 2014 against the Corporation's Chief Executive Officer and Chief Financial Officer, as opposed to a general cease trade order against the Corporation. The MCTO prohibits all trading in securities of the Corporation, whether directly or indirectly, by the Corporation's Chief Executive Officer and Chief Financial Officer until two full business days following receipt by the OSC of the Required Filings. The MCTO does not affect the ability of shareholders who are not insiders of the Corporation to trade their securities. However, the applicable Canadian securities regulatory authorities could determine, in their discretion, that it would be appropriate to issue a general cease trade order against the Corporation affecting all of the securities of the Corporation. Carpathian's Board of Directors and management confirm that they are working expeditiously to meet the Corporation's obligations relating to the filing of the Required Filings no later than May 30, 2014. Pursuant to the provisions of the alternative information guidelines specified in Section 4.4 of NP 12-203, the Corporation reports that since the Default Announcement: -- There have been no material changes to the information contained in the Default Announcement; -- There have been no failures by the Corporation to fulfil its stated intentions with respect to satisfying the provisions of the alternative reporting guidelines; -- There has not been, nor is there anticipated to be, any specified default subsequent to the default which is the subject of the Default Announcement; and -- There is no other material information respecting the Corporation's affairs that has not been generally disclosed. Until the Required Filings have been filed, the Corporation intends to continue to satisfy the provisions of the alternative information guidelines specified in Section 4.4 of NP 12-203 by issuing bi-weekly default status reports in the form of further press releases, which will also be filed on SEDAR. The Corporation would file, to the extent applicable, its next default status report on or about May 15, 2014. Should Carpathian fail to file the Required Filings by May 30, 2014 or fail to provide bi-weekly status reports in accordance with NP 12-203, the OSC can impose a cease trade order on Carpathian, such that all trading in securities of the Corporation cease for such period as the OSC may deem appropriate. About Carpathian Carpathian is an exploration and development company whose primary business interest is developing near-term gold production at its 100% owned Riacho dos Machados Gold Project in Brazil. In addition, it is also focussed on advancing its exploration and development plans on its 100% owned Rovina Valley Au-Cu Project located in Romania. CATALENT PHARMA: S&P Raises Rating on Secured Facilities to BB- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating to Somerset, N.J.-based Catalent Pharma Solutions Inc.'s proposed senior secured credit facilities, with a '2' recovery rating, indicating S&P's expectation for substantial (70%- 90%)recovery in the event of payment default. S&P affirmed all other ratings, including the 'B+' corporate credit rating. The outlook is stable. "Our ratings on Catalent reflect the company's "highly leveraged" financial risk profile, characterized by leverage that we expect to remain around 7x and funds from operations (FFO) to total debt that we expect to remain in the high-single digits," said credit analyst Shannan Murphy. "Our ratings also reflect Catelent's "satisfactory" business risk profile, which considers the company's industry-leading position in the heavily regulated outsourced pharmaceutical manufacturing space, its diverse service offering, its well-diversified customer base, and long-term contractual agreements that support business stability. In addition, it reflects S&P's view that the heavily regulated nature of the business provides a meaningful barrier to entry, benefitting existing market participants like Catalent." The stable outlook reflects S&P's belief that growth in key end markets will continue to grow at a low- to mid-single-digit pace. S&P's stable rating outlook also reflects its belief that while deleveraging from a likely IPO is a credit-positive event, the size and timing of any public offering are still uncertain. Downside scenario Catalent has substantial liquidity and its debt lacks financial covenants; for this reason, a downgrade is unlikely if weak operating performance resulted in higher leverage but not negative free cash flow. S&P would consider a lower rating in the unlikely event that an unforeseen quality issue results in contract losses and a diminished ability to compete for new work, which would likely prompt a revision of S&P's business risk assessment. Upside scenario S&P would consider an upgrade if Catalent is able to sustain debt leverage below 5x. In S&P's view, this would require at least $700 million in debt repayment from IPO proceeds and, equally importantly, a commitment to a financial policy that restrains spending on acquisitions and growth objectives to levels consistent with maintaining leverage below 5x. Given consolidation opportunities in the pharmaceutical contract services industry, S&P views this as unlikely. CETERA FINANCIAL: S&P Withdraws 'B+' ICR at Company's Request ------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its 'B+' issuer credit rating on Cetera Financial Group Inc. and its 'B+' issue rating on the company's senior secured term loan and revolving credit facility, at the company's request. On April 29, 2014, RCS Capital Corp. announced that it closed its acquisition of Cetera Financial Group, which RCS purchased from affiliates of Lightyear Capital for $1.15 billion in cash. Cetera and its subsidiaries have become part of RCS Capital Corp.'s retail advice platform. Because all existing debt at Cetera has been paid off upon deal closing, the company requested to withdraw the ratings. "Our 'B+' ratings on Cetera reflected the firm's aggressive financial management, including a considerable debt burden and negative tangible equity, as well as integration risk because of several recent acquisitions," said Standard & Poor's credit analyst Olga Roman. Although these acquisitions enabled Cetera to quickly gain scale and become one of the largest independent brokers, S&P views negatively its limited track record operating as an independent firm, rapid growth, and still relatively small size in the highly competitive U.S. brokerage business. S&P believes that favorable growth trends in the U.S. independent financial advisory industry and the firm's variable cost structure and limited balance sheet risk only partially offset these weaknesses. CLEAREDGE POWER: Section 341(a) Meeting Scheduled for June 4 ------------------------------------------------------------ A meeting of creditors in the bankruptcy case of ClearEdge Power Inc. will be held on June 4, 2014, at 9:30 a.m. at San Jose Room 268. Proofs of claim are due by Sept. 2, 2014. 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. A separate Section 341 meeting of creditors will be held in the bankruptcy case of ClearEdge Power, LLC, on May, 21, 2014, at 10:30 a.m. at San Jose Room 268. Creditors have until Aug. 19, 2014, to submit their proofs of claim. Another meeting of creditors is set on May 28, 2014, at 10:30 a.m. at San Jose Room 268 in the bankruptcy case of ClearEdge Power International Service, LLC. Proofs of claim are due by Aug. 26, 2014. ClearEdge Power Inc., ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, filed separate Chapter 11 bankruptcy petitions (Bankr. N.D. Calif. Lead Case No. 14-51955) on May 1, 2014. The three cases are jointly administered. ClearEdge Power Inc. estimated assets of $100 million to $500 million and liabilities of $100 million to $500 million. The Debtors are represented by John Walshe Murray, Esq., at Dorsey and Whitney LLP, as counsel. David B. Wright signed the petition as chief executive officer. CLEAREDGE POWER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- ClearEdge Power Inc. 14-51955 920 Thompson Place, Suite 100 Sunnyvale, CA 94085 ClearEdge Power, LLC 14-51956 195 Governor's Highway South Windsor, CT 06074 ClearEdge Power International Service, LLC 14-51960 195 Governor's Highway South Windsor, CT 06074 Type of Business: Designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Hon. Charles Novack (14-51955) Hon. Stephen L. Johnson (14-51956) Hon. Arthur S. Weissbrodt (14-51960) Debtor's Counsel: John Walshe Murray, Esq. DORSEY AND WHITNEY LLP 305 Lytton Ave, Palo Alto, CA 94301 Tel: (650) 857-1717 Email: Murray.John@Dorsey.com Lead Debtor's Estimated Assets: $100 million to $500 million Lead Debtor's Estimated Debts: $100 million to $500 million The petition was signed by David B. Wright, chief executive officer. List of ClearEdge Power, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Metro Mold and Design LLC $3,195,872 20600 County Road 81 Rogers, MN 55374 Dean Miller dean.miller@metrolmold.com Tim Holland, President Tel: 612-845-5721 tim.holland@metromold.com ABB Inc. $2,464,698 10300 Henri Bourassa West St-Laurent, QU H4S 1N6 Chris Poynter VP and General Manager Tel: 514-603-8052 chris.j.poynter@ca.abb.com B-G Mechanical Service Inc. $2,043,065 6 Second Avenue Chicopee, MA 01020 Doug Beck David Gernux, President Tel: 413-626-0040, 413-592-5300 DGernux@BGMechanical.com Advantech Industries Inc. $1,555,784 3850 Buffalo Road Rochester, NY 14624 Athena Smith James M. Gizzi, President Tel: 585-247-0701 Ext. 248 Athena@advantechindustries.com Johnson Matthey Fuel Cells- $1,161,816 Swindon, UK Lydiard Fields Great Western Way Swindon, SN5 8AT Jack Frost, Director Tel: UK +44 (0) 1793-755613 Email: frostjc@matthey.com Hess Corporation $774,047 One Hess Plaza Woodbridge, NJ 07095 Jonathan Rowe, Account Manager Tel: 401-580-1568 Email: jonathan.rowe@directenergy.com; jvaschak@hess.com H.M. Hughes Co., Inc. $599,863 323 East 65Th Street New York, NY 10065 Jeffrey Massina Tel: 212-772-7790 Email: Jmm@hmhughes.com Toray Composite America Inc. $567,575 19002 50th Avenue E Tacoma , WA 98446 Belcan Services Group $548,379 10200 Anderson Way Cincinnati, OH 45242 Maryanne Vesce Tel: 860-683-5547 mvesce@belcan.com Data 2 Logistics, LLC $540,369 PO Box 61050 Fort Myers, FL 33906 Donnie Thomas Tel: 239-425-8052 Donnie.Thomas@Data2Logistics.com AIC S.A. $465,430 Rdestowa 41 Gdynia, 81-577 Jacek Kozlowski, Sales Manager Poland Ph. 48 (58) 785-61-64 j.kozlowski@myaic.com Croll Reynolds Co. Inc. $404,942 Six Campus Drive Maple Plaza Ii Parsippany, NJ 07054 Henry E. Hage Tel: 908-232-4200 Ext. 109 hhage@croll.com SGL Carbon Corp. $366,000 900 Theresia St. St Marys, PA 15857 Allegheny Bradford Corp. $343,804 1522 South Avenue Lewis Run, PA 16738 Rob Denning, Account Manager Tel: 814-362-2590 Ext. 265 rdenning@alleghenybradford.com Aerotek Commercial Staffing $289,256 PO Box 198531 Atlanta, GA 30384-8531 Tel: 866-466-0420 Ext. 35285 The Bernd Group Inc. $276,827 PO Box 2245 Dunedin, FL 34697 Dorene Jones Pilar Bernd, President Tel: 800-346-8335 Pilar Ph. 727-736-2288 rraccounting@berndgroup.com; pilar@berndgroup.com CDW Computer Centers Inc. $272,477 200 N Milwaukee Ave Vernon Hills, IL 60061 Metta Moseley Tel: 847-371-2225 armemos@cdw.com Schneider Electric Inc. USA $271,098 1415 S. Roselle Rd. Palatine, IL 60067 Duyck Machine Inc. $255,195 Attn.: Andy Duyck 4200 Nw Visitation Rd. Forest Grove, OR 97116 Fedex $234,429 PO Box 7221 Pasadena, CA 91109-7321 COMMUNITYONE BANCORP: Earns $1.3 Million in First Quarter --------------------------------------------------------- CommunityOne Bancorp reported net income of $1.27 million on $17.92 million of total interest income for the quarter ended March 31, 2014, as compared with a net loss of $4.59 million on $18.07 million of total interest income for the same period in 2013. As of March 31, 2014, the Company had $2 billion in total assets, $1.92 billion in total liabilities and $85.33 million in total shareholders' equity. "We made solid progress during the quarter in achieving the four key goals we established for 2014," said Brian Simpson, CEO. "Both loan and deposit growth were broad based and slightly ahead of plan, non-interest expenses were down year over year even though we are investing in strategic initiatives, and asset quality improvements were ahead of schedule with nearly no credit cost." "We are pleased with our performance and continue to see increasing opportunities in all our businesses," said Bob Reid, president. "Our current customer base is beginning to experience growth and we have been successful in converting prospects to new customers. New business pipelines are strong; with our mortgage business continuing to perform well and making the appropriate adjustments to accommodate the shift from high refinance activity to more of a purchase-oriented market." A copy of the press release is available for free at: http://is.gd/qnkCbY About CommunityOne CommunityOne Bancorp (formerly FNB United) is the North Carolina- based bank holding company for CommunityOne Bank, N.A. (community1.com), which offers a full range of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth and online banking services through 55 branches in 44 communities throughout the central, southern and western regions of the state. CommunityOne Bancorp incurred a net loss of $1.48 million in 2013, a net loss of $40 million in 2012 and a $137.31 million net loss in 2011. CONSUMER SPECIALTIES: A.M. Best Affirms B Finc'l. Strength Rating ----------------------------------------------------------------- On May 1, 2014, A.M. Best affirmed the financial strength rating of B (Fair) and issuer credit rating of "bb+" of Consumer Specialties Insurance Company (RRG) (CSI) (Barre, VT). The outlook for both ratings is stable. Subsequently, A.M. Best has withdrawn the ratings due to management's request to no longer participate in A.M. Best's interactive rating process. COTTONWOOD ESTATE: Can Hire Miller Guymon as Counsel ---------------------------------------------------- The Hon. R. Kimball Mosier of the U.S. Bankruptcy Court for the District of Utah authorized Cottonwood Estates Development LLC to employ Miller Guymon, P.C. as counsel. As reported in the Troubled Company Reporter on Feb. 11, 2014, the Debtor required Miller Guymon to: (a) advise the Debtor of its rights, powers and duties as Debtor and debtor in possession; (b) assist the Debtor in taking necessary actions to protect and preserve the estate of the Debtor, including prosecution of actions on the Debtor's behalf, the defense of actions commenced against the Debtor, negotiation of disputes in which the Debtor is involved, and the preparation of objections of claims filed against the estate; (c) assist in preparing, on behalf of the Debtor, all necessary motions, applications answers, orders, reports, and papers in connection with the administration of the Debtor's estate; (d) assist in presenting, on behalf of the Debtor, the Debtor's proposed plan of reorganization and all related transactions and any related revisions, amendments, etc.; and (e) perform all other necessary legal services in connection with the Chapter 11 case. Miller Guymon has received a $66,632.48 retainer, from which it used $1,213 to pay the Chapter 11 filing fee, resulting in a remaining retainer of $65,419.48, which the firm will hold in its retainer trust account and use to pay any fees or costs until after receiving approval from the Court through the customary fee application process. Miller Guymon will also be reimbursed for reasonable out-of-pocket expenses incurred. James W. Anderson, Esq., attorney at Miller Guymon, 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. Miller Guymon can be reached at: James W. Anderson, Esq. MILLER GUYMON, P.C. 165 Regent Street Salt Lake City, UT Tel: (801) 363-5600 Fax: (801) 363-5601 E-mail: anderson@millerguymon.com About Cottonwood Estates Cottonwood Estates Development, LLC's primary asset is a real estate project located in Big Cottonwood Canyon, Salt Lake County, Utah, referred to as the Tavaci Project. The Tavaci Projects consists of 39 single family residence lots which are finished and ready for construction of homes thereon. Four lots were sold before the bankruptcy filing. Cottonwood Estates filed a Chapter 11 bankruptcy petition (Bankr. D. Utah Case No. 13-34298) on Dec. 30, 2013, in Salt Lake City, Utah. The Debtor estimated up to $50 million in both assets and debts. The Debtor has tapped Miller Guymon, PC, in Salt Lake City, as bankruptcy counsel, Parr Brown Gee & Loveless as special counsel for real estate transaction matters, J. Philip Cook as appraiser, and Daines Goodwin as accountant. CROFTON L & D: Case Summary & 12 Unsecured Creditors ---------------------------------------------------- Debtor: Crofton L & D Meats Holdings, LLC 10250 Woodberry Rd. Tampa, FL 33619 Case No.: 14-05033 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Hon. Catherine Peek McEwen Debtor's Counsel: Scott A. Stichter, Esq. STICHTER, RIEDEL, BLAIN & PROSSER PA 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: 813-229-0144 Fax: 813-229-1811 Email: sstichter.ecf@srbp.com - and - Amy Denton Harris, Esq. STICHTER, RIEDEL, BLAIN & PROSSER PA 110 E Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Email: aharris.ecf@srbp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kevin D. Crofton, manager. A list of the Debtor's 12 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-5033.pdf DR. BOTT: Involuntary Chapter 11 Case Summary --------------------------------------------- Alleged Debtor: Dr. Bott LLC 9730 SW Hillman Ct, Ste 600 Wilsonville, OR 97070 Case Number: 14-32565 Involuntary Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court District of Oregon Petitioners' Counsel: Justin D Leonard 111 SW Columbia, Ste 1100 Portland, OR 97201 Tel: (971) 634-0192 Email: jleonard@ml-llp.com Alleged Debtor's petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Baltic Latvian Universal Account Payable $460,025 Electronics, LLC dba Blue Microphones Design Pool Limited Account Payable $267,268 dba Native Union iStabilizer, LLC Account Payable $60,257 MarBlue Account Payable $99,198 EASTMAN KODAK: Streamlines Hundreds of Preference Suits ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the reorganization plan of Eastman Kodak Co., which became effective in September, created a trust to file lawsuits to generate cash for creditors. According to the report, to kick off the process, the creditors' trust sent almost 1,000 demand letters in November telling former suppliers they would be sued unless they voluntarily gave back so- called preferences, payments received within 90 days of bankruptcy. The trustee followed with lawsuits in January. On April 3, the trust had the bankruptcy court in Manhattan approve procedures to forestall filings that would otherwise deluge the bankruptcy court with papers in the preference suits, the report related. Mr. Rochelle said the judge set up mediation procedures, which, among other things, provide that so as a mediation doesn't conclude without a settlement, a preference defendant isn't required to file an answer in a lawsuit. The trust and the defendant will share the mediator's costs, the report related. For suits with less than $25,000 at issue, the shared cost is $1,000. The price rises on a sliding scale until it reached $3,000 for alleged preferences over $500,000. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak had been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August 20, 2013. Kodak and its affiliated debtors officially emerged from bankruptcy protection on Sept. 3, 2013. Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek Smith became members of Kodak's new board of directors as of Sept. 3, 2013. Existing directors James V. Continenza, William G. Parrett and Antonio M. Perez will continue their service as members of the new board. EASY LIFE FURNITURE: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Easy Life Furniture Inc. 6101 Knott Avenue Buena Park, CA 90620 Case No.: 14-12713 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Hon. Catherine E. Bauer Debtor's Counsel: Ori Katz, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 4 Embarcadero Ctr 17th Fl San Francisco, CA 94111 Tel: 415-774-3238 Fax: 415-434-3947 Email: okatz@sheppardmullin.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Jimmy Hsieh, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb14-12713.pdf EMERALD SQUARE: Case Summary & Unsecured Creditor ------------------------------------------------- Debtor: Emerald Square LLC 911 N. Amphlett Blvd. San Mateo, CA 94401 Case No.: 14-30691 Chapter 11 Petition Date: May 2, 2014 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Hon. Hannah L. Blumenstiel Debtor's Counsel: Darya Sara Druch, Esq. LAW OFFICES OF DARYA SARA DRUCH 1 Kaiser Plaza #480 Oakland, CA 94612 Tel: (510)465-1788 Email: ecf@daryalaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Monica Hujazi, managing member. The Debtor listed Monica Hujazi as its largest unsecured creditor holding a claim of $100,000. ENDO HEALTH: Moody's Affirms 'Ba3' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service affirmed the ratings of Endo Health Solutions, Inc. and related entities (collectively "Endo") including the Ba3 Corporate Family Rating, the Ba3-PD Probability of Default Rating, the Ba1 senior secured rating and the B1 senior unsecured rating. The rating outlook remains negative. This action follows the announcement that Endo increased its litigation accruals for mesh litigation by $625 million in conjunction with reaching agreements in principle with plaintiff attorneys to settle approximately 20,000 cases. The development is credit negative because of the large cash outflows that will ensue over the next few years. However, the agreements represent significant progress towards gaining resolution of Endo's liabilities. The ultimate costs could still exceed the roughly $1.1 billion that Endo has accrued to date. Ratings affirmed (some with LGD point estimate revisions): Endo Health Solutions, Inc. Ba3 Corporate Family Rating Ba3-PD Probability of Default Rating B1 (LGD5, 74%) senior unsecured notes due 2019, 2020 and 2022 SGL-2 Speculative Grade Liquidity Rating Endo Luxembourg Finance I Company S.a.r.l. Ba1 (LGD2, 19%) senior secured Term Loan A, Term Loan B and revolving credit facility Endo Finance Co.: B1 (LGD5, 74%) senior unsecured notes due 2022 Ratings Rationale Endo's Ba3 Corporate Family Rating reflects its modest size and scale relative to larger pharmaceutical peers, partially offset by the company's solid market positioning as a niche player in the pain and urology markets and by its revenue diversity across branded drugs, generic drugs and medical devices. Endo's expertise in pain drugs and its good compliance with US Drug Enforcement Agency (DEA) regulations act as high barriers to entry, also a credit strength. The company faces a significant challenge reviving top-line growth because of generic pressures affecting two branded franchises (Lidoderm and Opana ER) and softness in medical procedure volumes. Amidst these pressures, Endo is undergoing cost reduction initiatives and external business development. Thus far, these efforts have led to the recent acquisition of Paladin Labs and the incorporation of a new parent holding company in Dublin, Ireland. The acquisition and Ireland incorporation will generate an international platform for growth, expense synergies, and tax savings. While business development continues, Endo also faces substantial cash outflows related to surgical mesh implants. Although there are many variables, the Ba3 Corporate Family Rating envisions a variety of scenarios in which debt/EBITDA is sustained within a range of 3.0 to 4.0 times. The rating outlook is negative. Mesh-related litigation outflows will constrain Endo's cash flow at a time when Lidoderm sales are declining and debt may rise in support of business development. Further, mesh litigation costs could exceed those that Endo is estimating in its accruals. Although not expected in the near term, Moody's could upgrade Endo's ratings if the company substantially increases its size, scale and diversification and makes further progress resolving litigation while sustaining conservative credit metrics including gross debt/EBITDA below 3.0 times. Conversely, Moody's could downgrade Endo's ratings if gross debt/EBITDA is sustained above 4.0 times. This scenario could occur if Endo performs debt- financed M&A, faces higher-than-expected litigation cash outflows, or suffers operating setbacks on products like Lidoderm or Opana ER. Headquartered in Malvern, Pennsylvania, Endo Health Solutions is a, specialty healthcare company offering branded and generic pharmaceuticals, medical devices and services. The company is a subsidiary of Endo International plc, headquartered in Dublin, Ireland. Endo's key areas of focus include pain management, urology, oncology and endocrinology. In 2013 Endo reported net revenues of approximately $2.6 billion. ENERGY FUTURE: Faces Opposition to Restructuring Strategy --------------------------------------------------------- Peg Brickley, writing for The Wall Street Journal, reported that Energy Future Holdings Corp. weathered its debut bankruptcy-court hearing on May 1, clearing a few essential early motions at a session that made it apparent the energy company faces opposition to its restructuring strategy. According to the report, Judge Christopher Sontchi granted interim approval to measures that allow the Texas power-seller to move ahead on two of three multibillion-dollar bankruptcy finance packages as it attempts to gather support for a restructuring that will split the company in two, and drop tens of billions of dollars of debt from its balance sheet. One of the largest bankruptcies on record, Energy Future's Chapter 11 debut played to three packed courtrooms in the U.S. Bankruptcy Court in Wilmington, Del., the Journal related. The company is targeting a bankruptcy exit within a year, but the consensus it attempted to forge in months of negotiations remains out of reach. Hearings are slated to continue on May 2, in a bankruptcy that was billed as a consensual arrangement but is shaping into a battleground, with investors in $42 billion worth of debt jockeying for position, the Journal further related. A minority of top-ranking lenders have signed on to a pact pledging them to support the restructuring, the Journal said. "We expect that number to grow significantly over the next weeks and months," Energy Future lawyer Edward Sassower said on Thursday. The company refuted allegations it steered the restructuring talks to benefit favored creditor constituencies at the expense of others. Energy Future Ch. 11 Likely to Remain in Delaware Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that EFH's reorganization is likely to remain in Delaware, judging by comments from law professors and initial statements by regulators in Texas, where the power company?s operations and customers are located. Mr. Rochelle pointed out that within minutes of the Chapter 11 filing on April 29, second-lien noteholders asked the Wilmington judge to send Dallas-based Energy Future?s case to a court in Texas, where power producer Mirant Corp. was reorganized under a plan that preserved equity for stockholders. The noteholders argued that the incorporation of a company unit in Delaware wasn?t enough to warrant keeping the bankruptcy there, Mr. Rochelle added. Jay Westbrook, who teaches bankruptcy at the University of Texas School of Law told Mr. Rochelle in an interview that the Energy Future case is a financial reorganization, and that?s a reason for keeping it in Delaware. Still, ?it?s a classic case that doesn?t belong in Delaware,? said Westbrook. Stephen J. Lubben, a corporate finance and bankruptcy specialist at Seton Hall University School of Law in New Jersey, seconded Westbrook?s analysis, the Bloomberg report said. Lubben told Bloomberg that keeping the case in Delaware may depend on whether Texas regulators, the U.S. Trustee or another major creditor seeks to move it to Texas. He published an article in the New York Times Dealbook commenting on the venue issue. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. The claims agent maintains a Web site at http://www.efhcaseinfo.com/ ENERGY FUTURE: Reports $2.3 Billion Net Loss in 2013 ---------------------------------------------------- Energy Future Holdings Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $2.32 billion on $5.89 billion of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $3.36 billion on $5.63 billion of operating revenues in 2012. The Company incurred a net loss of $1.91 billion in 2011. As of Dec. 31, 2013, the Company had $36.44 billion in total assets, $49.70 billion in total liabilities and a $13.25 billion total deficit. Deloitte & Touche LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that EFH Corp. is in default of certain covenants contained in its debt agreements and does not expect to be able to settle all its obligations coming due within the next twelve months and on April 29, 2014, Energy Future Holdings Corp. and the substantial majority of its subsidiaries, excluding Oncor Electric Delivery Holdings Company LLC and its subsidiaries, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. "These circumstances and uncertainties inherent in the bankruptcy proceedings raise substantial doubt about EFH Corp.'s ability to continue as a going concern," the auditors said. A copy of the Form 10-K is available for free at: http://is.gd/du41kr About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal and its local counsel is Richards, Layton & Finger, P.A. Filsinger Energy Partners, Inc., acts as the Debtors' energy consultant, Deloitte & Touche LLP serves as the Debtors' independent auditor, KPMG is the Debtors' tax advisor. The Debtors' compensation consultant is Towers Watson & Co. PricewaterhouseCoopers serves as the Debtors' internal auditing advisor and Ernst & Young LLP serves as the Debtors' tax auditing advisor. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. The claims agent maintains a Web site at http://www.efhcaseinfo.com/ ESSAR STEEL: S&P Assigns Prelim. 'CCC-' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'CCC-' corporate credit rating to U.S.-based Essar Steel Minnesota LLC and placed the rating on CreditWatch with developing implications. At the same time, S&P assigned a preliminary 'CCC+' issue rating to the company's proposed $450 million senior secured notes, with a preliminary '4' recovery rating, indicating its expectations of an average (30%-50%) recovery in a payment default scenario. The ratings on Essar Steel Minnesota reflect S&P's view that the company's obligations are currently vulnerable to nonpayment and that the company is dependent on favorable business, financial, and economic conditions to meets its financial commitments. In S&P's opinion, predominant risks are high debt levels and uncertainties with regard to financing and project completion. The ratings also reflect S&P's view of business risk as "vulnerable" and financial risk as "highly leveraged." S&P's Group Rating Methodology did not affect the final rating outcome because we do not ascribe support from ultimate parent Essar Global Fund Limited. The proposed financing includes interest reserves for the proposed notes and additional interest reserves for future interest payments for the project finance debt and the EPIL Supplier Credit Facility through the later of two years after the proceeds of the notes are released from escrow on June 30, 2016. "The CreditWatch placement reflects the potential for a downgrade within the next several months if the company's efforts to obtain debt and equity financing are not successful," said Standard & Poor's credit analyst Funmi Afonja. "In our opinion, project delays resulting from this scenario would impair the company's ability to meet its construction timeline and fulfill its obligations under the ArcelorMittal offtake contract. We anticipate that we would raise the corporate credit rating to 'CCC+' if the financings are achieved because near-term funding risks will have been alleviated. Still, longer-term risks associated with very high leverage, project risk, and counterparties are likely to remain." EVENT RENTALS: Court Approves Apollo Acquisition ------------------------------------------------ Classic Party Rentals on May 1 disclosed that the United States Bankruptcy Court for the District of Delaware has approved the acquisition of substantially all of the business of Event Rentals, Inc. and its subsidiaries, d/b/a Classic Party Rentals, by funds managed by Apollo Global Management, LLC. Upon completion of the transaction, Classic will be financially and operationally stronger -- with more extensive product and service capabilities and outstanding customer service. Classic continues to expect the transaction will close by the end of May. "We are extremely pleased to have received the Court's approval, which underscores our belief that Classic's sale to Apollo is in the best interest of all of our stakeholders and puts the Company in a terrific position to continue to lead the U.S. event services industry," said Jeff Black, Classic Party Rental's President and Chief Executive Officer. "We continue to see Apollo as a powerful partner for Classic and believe that their support helps pave the way for a financially-stronger Classic to provide our premier service, refreshed inventory and even more innovative events for our customers. We remain confident that Classic has a very bright future ahead." As previously announced, on April 21, 2014, Apollo submitted the winning offer to acquire substantially all of Classic's business, as part of the Company's court-supervised auction process under Section 363 of the Bankruptcy Code. Initially, a newly established entity owned by the Company's current lenders had been named on February 14, 2014, as the stalking horse bidder, when Classic filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code. Classic then completed a marketing process to seek the highest and best offer to acquire its business in accordance with the bid procedures approved by the court, and Apollo's competitive offer emerged as the winning bid. Classic Party Rental's vendors and clients can access additional information about the Company's sale transaction and Chapter 11 filing on its dedicated website, www.ClassicTransaction.com The Company also has established a vendor and customer support center, which may be reached at 877-759-8814 (toll-free), 424-236- 7261 (outside of the U.S. or Canada). Classic Party Rentals is advised in this transaction by Jefferies LLC, FTI Consulting, and White & Case LLP. About Event Rentals Event Rentals Inc., the largest event-rental provider in the U.S., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 14-bk-10282) on Feb. 13, 2014. Event Rentals, which sought bankruptcy protection with affiliates, including Classic Midwest, Inc., has 39 locations across 22 markets. The company has the largest offering of event equipment, value-added event services, and temporary structure assets, and provide services for over 145,000 events for approximately 55,000 customers annually. The company taps 2,500 employees throughout the year and has total annual revenues of $235 million. Assets were listed for $148 million, with debt of $246 million. The Debtors owe $175 million in outstanding principal under a senior secured credit agreement; $36 million in outstanding principal under certain unsecured and subordinated liquidity notes; $5.5 million in outstanding principal under certain unsecured and subordinated seller financing relating to business acquisitions; and trade debt, as of Dec. 26, 2013, totaling $16.6 million. The Debtors have tapped Jeffrey M. Schlerf, Esq., and John H. Strock, Esq., at Fox Rothschild LLP as local counsel; John K. Cunningham, Esq., and Craig H. Averch, Esq., at White & Case LLP as bankruptcy counsel; Jefferies LLC as financial advisor; and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors sought bankruptcy protection as they seek a new owner to take over the business. Existing lenders led by Ableco Finance LLC, as administrative agent, have agreed to finance the bankruptcy with a DIP financing facility of up to $20 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. The Debtors disclosed that funds managed by Apollo Global Management, LLC submitted the winning offer to acquire substantially all of the Debtors' business at the April 21, 2014 auction. EXPERT GLOBAL: S&P Puts 'B-' Ratings on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said it placed its ratings on Expert Global Solutions LLC (EGS) on CreditWatch with negative implications. This includes S&P's issuer credit rating of 'B-' and its first- and second-lien senior secured ratings of 'B-' and 'CCC', respectively. "The CreditWatch with negative implications placement reflects the high likelihood that we could lower our ratings on the company during the covenant waiver period, which ends on June 28, 2014," said Standard & Poor's credit analyst Kevin Cole. Despite the significant deterioration in the company's cash flow and financial metrics, S&P is not lowering its ratings at this point because it believes there is a small, but not insignificant, chance that the company's credit profile will improve and still warrant the current rating if it can take strategic actions to improve its credit profile. Lower-than-expected volumes within the collections industry, combined with adverse regulatory challenges, have caused EGS to report weakened operating results since its recapitalization and acquisition of APAC Customer Services Inc. in April 2012. The company amended its debt covenants in early 2013 and--only a year later--will likely need to amend its covenants again by the end of the waiver period. "We plan to resolve the CreditWatch placement by the end of the two-month waiver period once we know whether EGS will be able to renegotiate its less-restrictive financial covenants and take actions to improve its credit profile," said Mr. Cole. S&P will likely lower its ratings on EGS by one notch if it believes that the company's negative performance will persist, even if it renegotiates its covenants. S&P would likely lower the rating by multiple notches if we believe that the company's creditors could force it into default rather than renegotiate its covenants. If the company is able to improve its credit profile, renegotiate its covenants with adequate headroom, and its early 2014 performance exceeds S&P's expectations, it could remove the CreditWatch and affirm the ratings. FENWAY PARTNERS: Raises Small Sum for Single Deal ------------------------------------------------- Michael Wursthorn, writing for Daily Bankruptcy Review, reported that despite not having closed a platform purchase in roughly four years, Fenway Partners has taken a step toward striking an acquisition. The report recalled that late last year, the New York firm, once a midmarket buyout powerhouse in the 1990s, raised $11.3 million through a vehicle known as Fenway HTM Partners LLC. FIBRIA OVERSEAS: Moody's Rates New $500MM Unsecured Notes 'Ba1' --------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 foreign currency rating to the proposed USD 500 million senior unsecured notes due 2024 issued by Fibria Overseas Finance Ltd and fully and unconditionally guaranteed by Fibria Celulose S.A. Proceeds will be used to prepay part of the company's outstanding notes due 2021 and to reduce gross debt. The ratings outlook is positive. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable. Rating assigned: Issuer: Fibria Overseas Finance Limited USD500 million in senior unsecured notes due 2024: Ba1 Ratings unchanged: Issuer: Fibria Celulose S.A. Corporate Family Rating: Ba1 Issuer: Fibria Overseas Finance Limited USD63 million notes due 2019: Ba1 USD549 million notes due 2021: Ba1 The outlook for all ratings is positive. Ratings Rationale Fibria's Ba1 rating reflects its leading position as the largest producer of market pulp in the world and its competitive production costs, which are among the lowest worldwide based on structural advantages in Brazil relative to international peers. Such competitive cost base has supported healthy operating margins, and Fibria's financial discipline with regard to capital expenditures and shareholder distribution allowed for material free cash flow generation in the past three years, most of which was directed to gross debt reduction. In addition to its own cash generation, Fibria has achieved substantial debt reduction through liquidity events, including asset sales and an equity offer. More recently, in November 2013, the company entered into a land sale transaction for a total amount of BRL 1.65 billion, of which BRL 500 million was received by the end of the year and BRL 883 million in 1Q14 and the remaining BRL 20 million is expected to be received in 2Q14, totaling BRL 1.4 billion (USD 599 million). The transaction also includes BRL 250 million in additional proceeds, subject to gains in land value to be measured in 7, 14 and 21 years. The majority of these proceeds was directed to prepay its 2020 notes (USD 690 million) in March 2014. The proposed USD 500 million bond issuance is part of Fibria's liability management process and will not affect its leverage metrics in the mid-term as most of the net proceeds will be used to pay down debt coming due and to prepay part of the 2021 notes outstanding. Besides reducing absolute debt levels, the recent 2020 bond pre-payment and the proposed tender for the 2021 notes will together result in lower annual interest expenses of about USD 57 million, contributing to a stronger free cash flow generation. Overall, the deleverage strategy increases Fibria's financial flexibility to pursue its expansion plans either through organic growth or M&A, despite the potentially weaker pulp prices, as approximately 4.1 million of additional hardwood pulp capacity hits the market during 2014 and 2015. The Ba1 rating also incorporates the benefit from the ownership (29.4% of total common shares) and expected support from Votorantim Participacoes (Baa3; positive outlook) due to existing cross acceleration provisions in part of its outstanding debt. Conversely, Fibria's low product diversity given its full exposure to pulp and its relative small size when compared with global industry peers as measured by net revenues are constraining factors for its rating. The positive outlook reflects Moody's expectations that Fibria's leverage will decline even further over the next 12-18 months backed by the depreciation of the Brazilian Real, which translates into higher local currency pulp prices and offsets the impact of potentially weaker international pulp prices in Fibria's cash flow. The outlook also incorporates expectations that will continue to manage its capex program and dividend distribution to preserve its liquidity profile without increasing leverage. The ratings could be upgraded if Fibria manages to reduce leverage as measured by Total Adjusted Debt to Adjusted EBITDA approaching 3.0x (4.7x at the end of FY 2013) together with Retained Cash Flow (defined as Funds From Operations less Dividends) less Capex to Total Adjusted Debt above 12% on a consistent basis (14.9% at the end of FY 2013). Downgrade pressure on the ratings would result if Fibria is unable to continue to deleverage, or experiences a deterioration in liquidity. Also, a deterioration of Votorantim Participacoes' (Baa3; positive outlook) credit quality could negatively impact Fibria's ratings. A substantial increase in secured debt could negatively affect the senior unsecured notes rating. Negative rating pressure would also arise if Total Adjusted Debt to Adjusted EBITDA stays above 4.5x consistently in the upcoming quarters together with Retained Cash Flow (defined as Funds From Operations less Dividends) less Capex to Total Adjusted Debt below 5% on a consistent basis and Adjusted EBITDA to Interest Expenses below 2.5x (4.8x at the end of FY 2013) on a consistent basis. All credit metrics are adjusted according to Moody's standard adjustments and definitions. Fibria Celulose S.A. ("Fibria") is the world's largest producer of market pulp with annual production capacity of 5.3 million metric tons. Fibria is a sole market pulp producer focused on the international market. In the last twelve months ended December 2013, Fibria reported consolidated net revenues of BRL 6.9 billion (USD 3.2 billion converted by the average foreign exchange rate for the period), coming mostly from Europe (39%), North America (28%), Asia (25%) and Latin America (8%). FIRST DATA: Incurs $200.5 Million Net Loss in First Quarter ----------------------------------------------------------- First Data Corporation reported a net loss attributable to the Company of $200.5 million on $2.64 billion of revenues for the three months ended March 31, 2014, as compared with a net loss of $337.4 million on $2.59 billion of revenues for the same period in 2013. As of March 31, 2014, the Company had $37.15 billion in total assets, $35.61 billion in total liabilities, $70.6 million in redeemable noncontrolling interest and $1.46 billion in total equity. "First Data delivered a very good quarter, generating double-digit EBITDA growth with solid top line growth in International and steadily improving results in Financial Services," said First Data Chairman and CEO Frank Bisignano. "We are winning in the marketplace, and we are running the company better -- increasing operating effectiveness and efficiency, resulting in better client delivery and margin expansion across the business." A copy of the press release is available for free at: http://is.gd/jsjMUS About First Data Based in Atlanta, Georgia, First Data Corporation provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. First Data reported a net loss attributable to the Company of $869.1 million in 2013, a net loss attributable to the Company of $700.9 million in 2012 and a net loss attributable to the Company of $516.1 million in 2011. * * * The Company carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FIRSTENERGY CORP: Fitch Affirms 'BB+' IDR & Unsecured Debt Rating ----------------------------------------------------------------- Fitch Ratings has affirmed FirstEnergy Corporation's (FE) Issuer Default Rating (IDR) and senior unsecured debt ratings at 'BB+'. Fitch has also affirmed the ratings of FE's subsidiaries. The Rating Outlook is Stable. Fitch expects to withdraw its ratings on FE's subsidiaries at the end of a 30-day period (around May 30, 2014) for business reasons. Fitch will continue to rate FE's IDR and senior unsecured debt ratings. Key rating drivers for FE include: -- The extended downturn in U.S. power prices and its adverse effect on operating profits; -- Future rate case outcomes at FE's operating utilities; -- High capex directed primarily toward utility and transmission operations; -- Relatively stable electric utility operations and cash flows, but weakening credit metrics at Jersey Central Power & Light (JCP&L). Low Power Prices The ratings and Stable Outlook for FE reflect the prolonged downturn in power prices driven by a surfeit of natural gas supply, strong reserve margins and a sluggish economic recovery. Low, albeit gradually improving, power prices are expected by Fitch to continue to constrain margins and cash flows at FE's merchant operations along with more stringent environmental rules. Strategy and Restructuring The ratings consider debt restructuring and asset transfers and sales at FES, Supply and Allegheny Generation Company (AGC) with affiliated utility, Monongahela Power Company (MP) and third parties implemented in 2013. Fitch also considers historic and expected plant closures at FE and its efforts to reduce environmental capex and operating costs. In January 2014, FE announced a 35% common stock dividend reduction to better align its payout with utility cash flows and power market realities. All else equal, the reduced dividend should result in approximately $318 million of incremental retained earnings to support FE's transmission investment initiative. Capex FE's 2014 capex is targeted at $3.3 billion, 50% higher than the $2.2 billion invested by the company in 2013. The year-over-year increase is driven primarily by a sharp uptick in transmission investment to $1.35 billion (40% of total 2014 capex) from $495 million in 2013. FE plans to invest approximately $4.2 billion in transmission investments 2014 through 2017. Transmission capex is expected to improve FE system reliability and customer service initially focusing on American Transmission System Inc.'s 69 kilovolt system in Ohio and Trans-Allegheny Interstate Line Co. and moving across the remainder of FE's regional footprint over time. Future Rate Case Outcomes Key rate case proceedings include final resolution of FE subsidiary JCP&L's pending general rate case and storm cost recovery proceeding and Monongahela Power Company's (MP) general rate case filing. Monongahela Power Company (MP) In 2013, the West Virginia Public Service Commission (WVPSC) approved a settlement agreement facilitating the transfer of the Allegheny Energy Supply Company's (Supply) approximate 80% ownership interest in the Harrison Generating Station to MP. In adopting the settlement, the WVPSC also approved the transfer of MP's approximate 20% ownership interest in the Pleasants Generating Station to Supply. In addition, the settlement authorized the implementation of a temporary surcharge and required that MP file a rate case no later than April 30, 2014. MP filed the rate case. Earlier this month, the West Virginia Supreme Court upheld the WVPSC order approving the asset transfer. In a constructive development, the New Jersey Board of Public Utilities (BPU) approved in March 2014 a settlement agreement between JCP&L, the BPU and Division of Rate Counsel (DRC) in the utility's storm cost proceeding. The settlement authorizes recovery of $736 million of JCP&L's $744 million of storm costs relating to several storms that occurred in 2011 and 2012. However, Fitch notes that details as to the timing of cost recovery remain uncertain. JCP&L filed its pending general rate case (GRC) in November 2012 supporting a $31.5 million rate increase based on a 2011 test year and an 11.53% return on equity. The BPU ordered JCP&L to file the base rate case in July 2012. Parties to the proceeding have filed testimony supporting a rate decrease of more than $200 million. Fitch has assumed no rate decrease in the JCP&L's pending GRC. An unanticipated, adverse outcome in JCP&L's and/or MP's pending rate cases could trigger future credit rating downgrades at FE. Fitch expects a final BPU decision in JCP&L's base rate case in July or August 2014. FE Utility Operations FE's electric utility subsidiaries are primarily distribution operating companies serving significant portions of Ohio, Pennsylvania, New Jersey, Maryland and West Virginia. The utilities benefit from relatively low risk business profiles and credit metrics that are generally consistent with the rating categories. Ohio, Pennsylvania and New Jersey account for approximately 85% of FE's total 2013 electric distribution deliveries. Fitch expects management to invest significant capital in its distribution and transmission businesses over the next several years to enhance service quality and reliability. FE's consolidated debt leverage is high, and Fitch estimates adjusted leverage will weaken to 4.5x during 2014 - 2016. Deterioration to 4.75x or worse would likely trigger future credit rating downgrades. Parent/Subsidiary Linkage FE and its operating subsidiaries' ratings are closely linked in accordance with Fitch criteria. IDR linkage reflects FE's reliance on its operating subsidiary dividends to meet its financial obligations, centrally managed operations and treasury functions including money pools and sub-limits on revolving credit agreements. Liquidity Fitch believes FE's consolidated liquidity position is solid. As of Dec. 31, 2013, FE had approximately $2.9 billion of total consolidated liquidity including $218 million of cash and cash equivalents and $2.7 billion in unused facilities. In addition to sub-limit borrowing under FE's credit facility, FE's integrated and distribution utility subsidiaries also participate in a money pool to meet their short-term working capital requirements. Rating Sensitivities A rating upgrade at this juncture appears unlikely for FE and its subsidiaries. A credit rating downgrade could be triggered by: lower than expected margins and volumes at FE's competitive business; continued deterioration at JCP&L; an unsupportive final decision in MP's pending GRC filing; an unexpected adverse operating event at one of FE's nuclear or large coal-fired generating units and/or a weakening of FE's leverage to 4.75 or worse on a sustained basis. Fitch has affirmed the following ratings: FirstEnergy Corp. -- IDR at 'BB+'; -- Senior unsecured debt at 'BB+'; -- Short-term IDR and commercial paper ratings at 'B'. FirstEnergy Solutions -- IDR at 'BB+'; -- Senior unsecured debt at 'BB+'; -- Short-term IDR and short-term debt ratings at 'B'. Allegheny Energy Supply Co., LLC -- IDR at 'BB+'; -- Senior unsecured debt and revenue bonds at 'BB+'; -- Short-term IDR at 'B'. Allegheny Generating Co. -- IDR at 'BBB'; -- Short-term IDR at 'B'. Jersey Central Power & Light -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB'; -- Short-term IDR and commercial paper at 'B'. Ohio Edison Company -- IDR at 'BBB-'; -- Senior secured debt at 'BBB+'; -- Senior unsecured debt and revenue bonds at 'BBB'; -- Short-term IDR and commercial paper at 'B'. Pennsylvania Power Company -- IDR at 'BBB-'; -- Senior secured debt at 'BBB+'; -- Short-term IDR at 'B'; Cleveland Electric Illuminating Co. -- IDR at 'BB+'; -- Senior secured debt at 'BBB'; -- Senior unsecured debt at 'BBB-'. Toledo Edison Company -- IDR at 'BB+'; -- Senior secured debt at 'BBB'. BVPS II Funding Corp. -- Secured debt at 'BBB'. Beaver Valley II Funding Corp. -- Secured Debt at 'BBB'. PNPP II Funding Corp. -- Secured debt at 'BBB-'. Pennsylvania Electric Company -- IDR at 'BBB-'; -- Senior unsecured debt at 'BBB'; -- Short-term IDR and commercial paper at 'B'; -- Senior secured debt at 'BBB+'. Metropolitan Edison Company -- IDR at 'BBB'; -- Senior unsecured at 'BBB+'; -- Senior secured debt at 'A-'; -- Short-term IDR and commercial paper at 'B'. Monongahela Power Company -- IDR at 'BBB' -- Senior secured debt at 'A-'; -- Secured revenue bonds at 'A-'; -- Senior unsecured revenue bonds at 'BBB+'; -- Short-term IDR at 'B'. Potomac Edison -- IDR at 'BBB'; -- Senior secured debt at 'A-'; -- Secured revenue bonds at 'A-' -- Short-term IDR at 'B'; -- Senior unsecured debt at 'BBB+'. West Penn Power Co. -- IDR at 'BBB'; -- Senior Secured Debt at 'A-'; -- Short-term IDR at 'B'. Trans-Allegheny Interstate Line Co. -- IDR at 'BBB'; -- Senior unsecured debt at 'BBB+'; -- Short-term IDR at 'B'. American Transmission Systems Inc. -- IDR at 'BBB'; -- Senior unsecured debt at 'BBB+'; -- Short-term IDR at 'B'. The Rating Outlook is Stable for all of the above entities. FISHER ISLAND: Status Conference Slated for July 31 --------------------------------------------------- The Hon. A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida will continue the status conference in the Chapter 11 case of Fisher Island Investments Inc. and its debtor-affiliates on July 31, 2014, at 3:00 p.m., in Claude Pepper Federal Building, 51 SW 1st Avenue, Room 1410 in Miami, Florida. About Fisher Island Investments Solby+Westbrae Partners; 19 SHC Corp.; Ajna Brands Inc.; 601/1700 NBC LLC; Axafina Inc.; and Oxana Adler, LLM, filed an involuntary Chapter 11 petition against Miami Beach, Florida-based Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047) on March 17, 2011. On the same date, involuntary Chapter 11 petitions were also filed against the Company's affiliates, Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061). Judge A. Jay Cristol presides over the case. The case was previously assigned to Judge Laurel M. Isicoff. Petitioning creditors are represented by Craig A. Pugatch, Esq., and George L. Zinkler, Esq., at Rice Pugatch Robinson & Schiller, P.A., 101 NE 3 Ave. Suite 1800, Fort Lauderdale FL 33301. John F. O'Sullivan, Esq., at Hogan Lovells US LLP, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,, and Terrance A. Dee, Esq., at DiBello, Lopez & Castillo, P.A., represent Alleged Debtor Fisher Island Investments, Inc., as counsel. FIXED INCOME: Courtland to Waive Default & Reinstate Loan --------------------------------------------------------- Courtland Capital Inc. on May 1 disclosed that subsequent to its news release dated February 4, 2014, the Corporation has entered into an arm's length non-binding letter of intent dated April 21, 2014 to acquire Fixed Income Solutions LLC through a business combination. FIS is a private U.S. entity incorporated under the laws of Florida that develops and provides financial services technology in the U.S. market. The control persons of FIS are Andrew Kelley and Steven L. Goldberg. As previously announced in a news release dated February 4, 2014, the Corporation had terminated the previous LOI with FIS and demanded repayment of a secured loan that had been previously advanced to FIS. Upon the termination of the prior LOI the secured loan became payable. Since that time the parties have met and addressed and resolved matters that led to the termination of the previous LOI, and wish to proceed with the new LOI. Under the LOI it is contemplated that Courtland will acquire either the assets of FIS or acquire the members' interest in FIS in a merger or business combination for an aggregate purchase price of $2,100,000. As part of the Transaction, it is expect that Courtland will issue 35,000,000 common shares at a deemed price of $0.05 per share in satisfaction of a portion of the Purchase Price, for aggregate deemed share consideration of $1,750,000. In addition, $300,000 of the Purchase Price will be satisfied by applying amounts owing by FIS to Courtland pursuant to a secured loan as a credit against the Purchase Price, all as more particularly described below. The balance of the Purchase Price, being $25,000, was previously advanced as a cash deposit under the prior LOI and such amount continues to be a deposit against the purchase price under the new LOI. The LOI also contemplates the reinstatement of the secured loan that Courtland had previously made to FIS in October, 2013. Courtland is now prepared to waive the default and reinstate the loan conditional upon the parties entering into amended and restated loan and security documentation. The secured loan is for an aggregate of up to CDN$300,000 and bears interest at 7% per annum, and it is secured against all the present and after acquired property of FIS. CDN$175,000 has been advanced to FIS under the prior secured loan and remains outstanding today. A second advance of CDN$75,000 will be made immediately to FIS upon the execution of the amended and restated loan and security documentation. In the event the Transaction is completed the principal amount plus accrued interest under the loan will be applied as a credit against the Purchase Price for FIS. If the Transaction is not completed, FIS is required to repay the principal amount plus accrued interest. In conjunction with the Transaction, the Corporation intends to complete a share consolidation of its issued and outstanding common shares on a 6 for 1 basis. Such consolidation will require shareholder and regulatory approval which will be sought by the Corporation concurrently with obtaining the necessary shareholder and regulatory approval for the Transaction. All share amounts referenced above are based on a post-consolidation basis. It is expected that further details will be announced on FIS and the FIS Transaction, including significant conditions to be satisfied and applicable sponsorship matters, in a subsequent news release upon Courtland and FIS entering into a definitive agreement. A definitive agreement is expected to be entered into by the parties by May 31, 2014. The trading of the common shares of Courtland will remain halted until the subsequent news release is issued, or upon receipt of applicable documentation by the TSX Venture Exchange. "Completion of the transaction is subject to a number of conditions, including Exchange acceptance and Shareholder approval. The Transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. FORESTAR GROUP: S&P Assigns 'B' Corp. Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Forestar Group Inc. (Forestar). The outlook is stable. S&P also assigned its 'BB-' rating to the company's proposed $250 million senior secured notes due 2022, to be issued by Forestar Group's subsidiary, Forestar (USA) Real Estate Group Inc., and guaranteed by Forestar. The recovery rating on this debt is '1', indicating S&P's expectation of a very high (90% to 100%) recovery in the event of a payment default. "Our corporate credit rating of 'B' reflects our assessment that Forestar's business risk profile is 'vulnerable,' and that its financial risk profile is 'aggressive,' as defined under our criteria," said Standard & Poor's credit analyst Scott Sprinzen. Modifiers have no impact on the rating outcome. In its real estate operations, S&P believes that Forestar has been well positioned to benefit from the ongoing cyclical rebound in key Texas housing markets, as reflected in the strong growth in the company's sales volume and unit prices over the past three years. S&P expects positive market conditions to be sustained for at least the next one to two years. S&P also believes the company has land in its development pipeline sufficient to support its expected sales over this period, although it has maintained working capital efficiency by keeping its developed lot inventory in line with near-term requirements. In addition, Forestar has been successful to date in adding another leg to its real estate business through developing and selling multi-family housing properties. S&P's stable rating outlook reflects its expectation that Forestar's financial performance will improve over the next several years as a result of favorable conditions in the key Texas housing markets served by its real estate operations, relatively high and stable crude oil prices, and success in ongoing efforts to expand oil and gas production and reserves. S&P could lower the rating if Forestar is met with setbacks in expanding its E&P operations, if market conditions proved to be adverse, or if Forestar accelerated growth initiatives such that negative free cash flow exceeded the level S&P is currently assuming (approaching $200 million in 2014), necessitating a more- significant-than-anticipated drawdown of the company's cash or additional external financing. S&P currently views an upgrade within the next year as unlikely. A significant improvement in the scale and scope of Forestar's oil and gas operations will be necessary for it just to achieve the operating profile we generally associate with E&P companies with 'B-' or 'B' corporate credit ratings. This will likely require successful execution of a multi-year investment program, with the company containing any increase in financial leverage. FORESTAR REAL: Moody's Assigns 'B1' CFR & Rates $250MM Notes 'B2' ----------------------------------------------------------------- Moody's assigned first-time B1 corporate family and B1-PD probability of default ratings to Forestar (USA) Real Estate Group Inc. ("Forestar"), a B2 rating to the company's proposed $250 million of senior secured notes, and an SGL-2 speculative grade liquidity rating. Proceeds of the proposed notes will be used to refinance the company's existing $200 million Senior Secured Term Loan Facility and pay related fees and expenses, with the balance to be used for general corporate purposes, including investment in strategic growth opportunities. The rating outlook is stable. The following ratings were assigned: B1 Corporate Family Rating B1-PD Probability of Default Rating $250 million proposed senior secured notes due 2022 rated B2 (LGD4, 63%) SGL-2 speculative grade liquidity rating Ratings Rationale The B1 corporate family rating reflects Forestar's small size and scale and its concentration in a few key markets, which would map to a B2 or B3 in the Moody's Homebuilding Rating Methodology; Moody's expectations of negative cash flow for the next year as the company ramps up its land spend and investments in real estate and in oil and gas properties; the volatile, cyclical, and both the capital intensive and working capital intensive natures of the oil and gas industry and of the land development industry, respectively; and the dismal financial performance of the overall land development industry during the recently-ended real estate downturn, wherein virtually every land developer that Moody's rated ultimately went bankrupt. At the same time, these negative rating factors are counterbalanced by Forestar's history of maintaining a conservative capital structure. Pro forma for the issuance of $250 million of new senior secured notes, the company's adjusted debt to capitalization would be approximately 41%, which maps to a strong Ba rating on the homebuilding methodology. Forestar also subscribes to a target debt to capitalization ratio of 35% to 40%, which Moody's believes is a conservative and prudent capital structure for a land development company. In addition, Forestar's land base is conservatively valued. Book equity reflects a $500 per acre fee timber base and virtually zero cost bases for water and mineral rights. In addition, the company's impairment charges during the downturn were minimal, offering further evidence that the land is realistically valued. Adding further support to the B1 corporate family rating are Moody's positive outlook on the homebuilding industry and generally stable to positive outlook on the various subsectors within the oil and gas industry, and Forestar's history during the downturn. While it lost money, as would be expected, it survived and actually was able to continue selling new lots throughout the downturn, albeit in greatly reduced numbers. The stable rating outlook is based on Moody's expectation that Forestar will maintain capital structure discipline and a prudent liquidity profile. Forestar currently has an undrawn $200 million Senior Secured Revolving Credit Facility, which it intends to upsize to $300 million. Much, if not all, of the facility's nominal amount should be available going forward and is likely to remain undrawn or only utilized in small amounts. Combined with a pro forma cash balance of $234 million as of December 31, 2013, the company's external cash requirements over the next 12 to 18 months should be easily manageable once the proposed transaction is consummated. On the flip side, the company will be generating negative cash flow for at least the next year, all of its assets are secured, which limits an alternate liquidity capability, and the company needs to comply with a number of financial covenants in its Senior Secured Revolving Credit Facility. The corporate family rating and/or outlook could be raised if the company substantially increases its size, scale, and geographical diversity while maintaining strong balance sheet and liquidity protections. Specifically, the company would need to generate well over $1 billion in revenues and accumulate over $1 billion of tangible net worth all the while maintaining strong profitability on a bottom line basis, below 45% debt to capitalization, and good liquidity. The corporate family rating and/or outlook could be pressured if debt to capitalization grows to above 50% on a sustained basis, net income turns to net losses, cash flow becomes increasingly negative, or liquidity sources are considerably diminished. The proposed $250 million of senior secured notes are notched below the corporate family rating because of the imminent presence of a new $300 million Senior Secured Revolving Credit Facility (the "revolver") that has the senior rank in the capital structure. The revolver benefits from a collateral package that consists of a first priority senior secured lien on all assets and stock of Forestar and each of its domestic subsidiaries, with certain exceptions. The proposed senior secured notes, by contrast, have a second priority senior secured lien on the same collateral package, resulting in its down-notching. Spun off from Temple-Inland Inc. at the end of 2007, primarily institutionally owned, and headquartered in Austin, TX, Forestar is principally a real estate and natural resources company. Total revenues and net income in 2013 were $331 million and $29 million, respectively. GARLOCK SEALING: Ruling Spreads to Pittsburgh Corning Case ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a January court ruling in the reorganization of Garlock Sealing Technologies LLC continues to reverberate throughout the communities of asbestos plaintiffs and defendants. According to the report, the latest to join the fray is Mt. McKinley Insurance Co., which provided insurance for Corning Inc. and PPG Industries Inc., the owners of Pittsburgh Corning Corp. U.S. Bankruptcy Judge George R. Hodges in Charlotte, North Carolina, ruled in January that the "impropriety of some law firms" representing asbestos personal-injury plaintiffs led to "unfairly inflating recoveries against" Garlock, a unit of EnPro Industries Inc., the report related. Legal Newsline, a publication of the U.S. Chamber of Commerce, told Judge Hodges at a hearing last month that his opinion in the Garlock bankruptcy "rocked the world of asbestos litigation," the report further related. Pittsburgh Corning confirmed a Chapter 11 plan last year creating a $3.5 billion trust to pay asbestos claims, the report said. Mt. McKinley said in papers filed on April 4 in the Garlock bankruptcy that some of the plaintiffs' lawyers in the Garlock case may also have participated in the Corning bankruptcy. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GENERAL MOTORS: Asks Halt to Suits Relating to Bankruptcy --------------------------------------------------------- Stephanie Gleason, writing for The Wall Street Journal, reported that General Motors Co. is asking those suing it over ignition- switch issues to voluntarily halt those lawsuits, according to documents filed ahead of a May 2 bankruptcy-court hearing on the issue. According to the report, the lawsuits, which seek damages over things such as lower car value and loss of use of a vehicle, should be stayed within 10 days, GM said in a letter to U.S. Bankruptcy Judge Robert Gerber, as the bankruptcy court decides whether GM can be held liable for these issues. If the parties suing refuse, they should be required to file documents with the bankruptcy court by May 25, and GM will respond by June 10, the report related. The Journal pointed out that on May 2, GM will make its first bankruptcy-court appearance since requesting that the court bar victims from suing it for certain damages that occurred before its Chapter 11 bankruptcy in 2009. When a company goes through bankruptcy, often it emerges as a new entity, leaving certain liabilities with the old bankrupt entity, the Journal noted. In this case, when "old GM" was acquired by "new GM," a U.S. government-backed entity, that new company assumed only certain responsibilities, including personal-injury lawsuits. However, lawsuits over damages stemming from problems such as lowered car values, "new GM" didn't agree to be responsible for, the company argued in court documents. About General Motors Corp., nka Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GLOBAL GEOPHYSICAL: Accused Of Inflating Revenues ------------------------------------------------- Law360 reported that the top executives of bankrupt seismic data provider Global Geophysical Services Inc. were hit with a putative class action in Texas federal court alleging they inflated the energy-focused company's 2013 revenues before making a public offering in December. According to the report, less than four months after the offering and just days before it filed for bankruptcy in March, the price of Global's preferred stock dropped 76 percent after it announced it was restating its annual financial statements for the years 2009 to 2013. The case is Trinin v. Verghese et al., Case No. 4:14-cv-00873 (S.D. Tex.). The case is before Judge Lynn N. Hughes. The case was filed April 3, 2014. About Global Geophysical, Autoseis et al. Global Geophysical Services Inc., a provider of seismic data for the oil and gas drilling industry, sought bankruptcy protection, intending to reorganize on its own with additional capital or explore a sale or other transaction. Based in Missouri City, Texas, Global Geophysical disclosed assets of $468.7 million and liabilities totaling $407.3 million as of Sept. 30, 2013. Liabilities include $81.8 million on a secured term loan owing to TPG Specialty Lending Inc. and Tennenbaum Capital Partners LLC. TPG is the lenders' agent. Global also owes $250 million on two issues of 10.5 percent senior unsecured notes, with Bank of New York Mellon Trust Co. as indenture trustee. Global Geophysical and five affiliates, including Autoseis, Inc. (lead debtor), filed Chapter 11 petitions in Corpus Christi, Texas (Bankr. S.D. Tex. Lead Case No. 14-20130) on March 25, 2014. The Debtors have tapped Baker Botts LLP as general bankruptcy counsel, Jordan Hyden Womble Culbreth & Holzer PC, as local counsel, Alvarez & Marsal as restructuring advisors, Fox Rothschild Inc. as financial advisor, and Prime Clerk as claims and noticing agent. GULF STATES LONG TERM: Disbursing Agent May Obtain Files -------------------------------------------------------- In the Chapter 11 case of Gulf States Long Term Acute Care of Covington, L.L.C., Bankruptcy Judge Elizabeth W. Magner finds that neither the attorney-client privilege nor the work product doctrine prevent David V. Adler, Disbursing Agent for the Reorganized Debtor, from obtaining the Debtor's files held by Debtor's pre-bankruptcy legal counsel was Breazeale Sachse & Wilson, L.L.P. and Gregory Frost, Esq., a BSW partner. The Court will defer the question of which files and work products are related to or concern the causes of actions reserved for investigation and prosecution by Adler to the United States District Court where litigation is currently pending. However, this Court finds that any and all files or work product belonging to the Reorganized Debtor and which are related to or which may provide information concerning any cause of action or claim for which Adler is responsible must be included in Adler's turnover request. Accordingly, Judge Magner says Adler's Motion to Compel Subpoena Return is granted in part, and the Court abstains in part. A copy of the Court's May 1, 2014 Reasons for Decision is available at http://is.gd/SAj6Ynfrom Leagle.com Based in Covington, Louisiana, Gulf States Long Term Acute Care of Covington, LLC, filed for Chapter 11 bankruptcy protection (Bankr. E.D. La. Case No. 09-11116) on April 20, 2009. William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC, in Baton Rouge, Louisiana, served as the Debtor's counsel. In its petition, the Debtor estimated $0 to $50,000 in assets, and $1 million to $10 million in debts. The Debtor's plan of reorganization was confirmed on Feb. 22, 2010. HALE & ETHERIDGE: Case Summary & 5 Unsecured Creditors ------------------------------------------------------ Debtor: Hale & Etheridge Holdings, LLC 19 Cass Station Pass NW Cartersville, GA 30121 Case No.: 14-40899 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court Northern District of Georgia (Rome) Judge: Hon. Mary Grace Diehl Debtor's Counsel: Brian R. Cahn, Esq. BRIAN R. CAHN AND ASSOCIATES, LLC 5 S. Public Square Cartersville, GA 30120 Tel: (770) 382-8900 Email: brc@perrottalaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by John Hale, member of LLC. A list of the Debtor's five unsecured creditors is available for free at http://bankrupt.com/misc/ganb14-40899.pdf HAWAIIAN AIRLINES: Fitch Affirms 'B' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed the ratings for Hawaiian Airlines, Inc. and its parent company Hawaiian Holdings, Inc. at 'B'. The Rating Outlook is Stable. Fitch has also affirmed the ratings on Hawaiian's 2013-1 series of EETCs as detailed at the end of this release. The ratings are supported by Hawaiian's solid market position in its primary business of flying leisure travelers to and from the Hawaiian Islands, its near-monopoly position in the neighbor island market, and its maturing international business. Hawaiian also generates peer competitive operating margins, maintains adequate liquidity, and generates credit metrics that Fitch considers to be in line with the rating. Concerns for Hawaiian include the company's leveraged balance sheet, negative free cash flow, small size and geographic concentration in comparison to its North American peers, and its exposure to foreign exchange rates. The Stable Outlook reflects Fitch's expectations that while operating margins and leverage metrics should improve over the intermediate term, improvements are not likely to warrant an upgrade within the next year. Slower growth and Maturing Markets: Fitch expects Hawaiian's operating margins to expand over the next one to two years as the company steps back from a period of rapid growth that occurred between 2010 and 2013. The company focused on expanding its presence in Asia over the past several years, adding a number of new destinations (Tokyo, Seoul, Brisbane, etc.). Newly opened routes have tended to be dilutive to margins as they ramp up. Fitch expects some margin improvement as Hawaiian's mix of flying becomes more heavily weighted to routes that have been opened for more than two years. The company only expects to open one new market in 2014, represented by its launch of service to Beijing in April. Hawaiian expects total ASMs to increase by 1-4% in 2014 compared to growth of more than 14% in 2013. Hawaiian generated an EBITDAR margin of 18.5% in the LTM period ended March 31, 2014, up from 17.1% in the comparable period a year ago. Improved Domestic Environment: Fitch also expects operating performance in 2014 to benefit from an easier competitive environment in the mainland U.S. to Hawaii market. Total capacity in this market is expected to be relatively flat for the year as opposed to 2013 when capacity in some of Hawaiian's key markets such as Seattle and San Diego increased significantly. Limited capacity additions and expectations for low single digit growth in Hawaiian tourism are expected to support a healthy yield environment this year. The company should also gain a tailwind from Mesa Airlines' recent decision to suspend operations at go!, its Hawaiian interisland business. After Aloha Airlines folded in 2008, go! was Hawaiian's only sizeable competitor in the interisland market. Hawaiian was already the dominant carrier, with a market share of roughly 90%, but the exit of go! will leave Hawaiian in a near monopoly position. Fitch expects the reduced competition to bolster yields and improve margins for the interisland business which generates 24% of the company's passenger revenue. Fitch expects revenue improvements to be partially offset by rising unit costs. The company expects cost per available seat mile (CASM) to increase in the low single digit range for the year. Cost growth in 2014 will partially be due to unusual items such as start-up costs related to the launch of 'Ohana, Hawaiian's new interisland turboprop service, cabin modifications to introduce the new extra comfort economy product onto Hawaiian's A330s and painting expenses for its 717s. Wages and salaries will also increase due to increased capacity and the impacts of FAR 117, a new rule implemented by the FAA which limits the flying time for pilots. Weak FCF in 2014/2015: Hawaiian's recent international expansion has also entailed a large investment in its fleet, with the company taking 14 A330-200s between 2010 and year end 2013 to replace its 767-300s and 767-300ERs. Hawaiian is scheduled to take five more A330s in 2014 and three in 2015. Capital spending in 2014 is expected to be in the $465-475 million range, up from $342 million in 2013. Fitch expects capital spending to produce sharply negative FCF in 2014, and potentially neutral or slightly negative in 2015. Hawaiian has no scheduled aircraft deliveries in 2016 at which point FCF is expected to turn positive. Importantly, all of the company's A330 deliveries for 2014 have been pre-funded through Hawaiian's issuance of its 2013-1 series of EETCs. Foreign exchange risk: Fitch notes that Hawaiian operating profits are sensitive to currency fluctuations. Hawaiian is somewhat unique among North American carriers in the high proportion of its international seats sold in local currencies rather than in U.S. Dollars. The company estimates that a 10% strengthening of the U.S. Dollar versus the Yen would result in a $19 million drop in operating income and a similar. A 10% strengthening against the AUD would result in a $14.5 million drop in operating income. These represent sizeable potential swings when compared to Hawaiian's total operating income (EBIT) which amounted to $133 million in 2013. The effects were illustrated throughout 2013 and in the first quarter of 2014 as operating results were negatively impacted by a strengthening U.S. Dollar compared to the Yen and Australian Dollar. Hawaiian reported that international passenger unit revenues in the first quarter were down by 7.1%, but would have only been down by 1% assuming constant exchange rates over the period. Leveraged balance sheet: Fitch calculates Hawaiian's total adjusted debt to EBITDAR at 5.5x at year end 2013, up from 5.1x at year end 2012. This puts Hawaiian at the high end of its North American peer group. Fitch expects the incremental EETC debt added in 2014 to push leverage slightly higher in the near term, but as the company's EBITDAR grows, leverage should fall quickly in 2015 and beyond. Adequate financial flexibility: Fitch considers Hawaiian's financial flexibility to be adequate for the rating. As of March 31, 2014 the company had a cash balance of $335 million, $144 million in short term investments and $69.5 million in availability under its $75 million asset backed revolver. Total liquidity was equal to 25% of LTM revenue, which is at the high end of Hawaiian's North American peer group. Fitch considers the company's upcoming debt maturities to be manageable. Maturities in 2014 and 2015 total $53.4 and $65.1 million respectively, which are manageable given the company's cash on hand and expected cash from operations. Rating sensitivities: Future actions that may individually or collectively cause Fitch to take a positive rating action include: -- Sustained adjusted debt/EBITDAR below 5x; -- A return to positive free cash flow generation; -- EBITDAR margins expanding to the 18-20% range; -- Further evidence that Hawaiian's Pacific business is firmly established. Future actions that may individually or collectively cause Fitch to take a negative rating action include: -- Capacity additions into the Hawaiian market which cause sustained weakness in yields; -- Leverage rising and remaining at or above 6x; -- A notable drop in tourism to Hawaii caused by a natural disaster or economic downturn; -- EBITDAR margins falling and remaining below 15%. 2013-1 EETC: Fitch has affirmed the senior tranche rating at 'A-'. Senior EETC tranche ratings are primarily based on a top down analysis of the level of overcollateralization featured in the transaction. The ratings also incorporate the structural benefits of section 1110 of the bankruptcy code, and the presence of an 18-month liquidity facility. Fitch's stress case utilizes a top-down approach assuming a rejection of the entire pool of aircraft in a severe global aviation downturn. The stress scenario incorporates a full draw on the liquidity facility, an assumed 5% repossession/remarketing cost, and a 30% stress to the value of the aircraft collateral. The 30% value haircut corresponds to the high end of Fitch's 20- 30% 'A' category stress level for Tier 1 aircraft. The collateral pool in this transaction consists of six A330-200s. Fitch views the A330-200 as a good quality Tier 1/ 2 aircraft. The A330-200 is a highly capable aircraft that has outperformed its rival 767 over the last decade, and maintained a healthy backlog despite the long-awaited arrival of the 787. Fitch expects this aircraft type to remain a significant presence in the wide body, medium to long haul market for the near-to-intermediate term. Fitch's stress scenarios produce a maximum LTV of 93.5% when incorporating 'A' category stresses. This analysis suggests that bondholders could expect a full recovery of principal with some headroom even in a severe aviation downturn. Subordinated tranche ratings are linked to Hawaiian's IDR, and therefore the B tranche ratings have been affirmed at 'BB', which represents a three-notch uplift from Hawaiian's IDR of 'B'. Subordinated tranche ratings are adjusted from Hawaiian's IDR based on three primary factors; 1) affirmation factor, 2) presence of a liquidity facility, and 3) recovery prospects. Fitch considers the affirmation factor for this collateral pool to be moderate to high resulting in a +2 notch adjustment (maximum is 3). The B tranche also features an 18 month liquidity facility, providing a further +1 notch adjustment. No adjustment has been made for recovery, resulting in a rating of 'BB'. Fitch has affirmed the following ratings: Hawaiian Holdings, Inc. -- IDR at 'B'; -- Senior unsecured convertible notes at 'B-/RR5'. Hawaiian Airlines, Inc. -- IDR at 'B'; -- Senior 1st lien secured credit facility at 'BB/RR1'. Hawaiian Airlines 2013-1 pass-through trust -- Series 2013-1 class A certificates at 'A-'; -- Series 2013-1 class B certificates at 'BB'. The Rating Outlook is Stable. HD SUPPLY: Amends Fiscal 2013 Annual Report to Add Disclosures -------------------------------------------------------------- HD Supply Holdings, Inc., and HD Supply, Inc., filed an amendment to their combined annual report on Form 10-K for the fiscal year ended Feb. 2, 2014, filed with the U.S. Securities and Exchange Commission on March 25, 2014, and amended by Amendment No.1 filed on March 26, 2014, to add the following: * Additional disclosure concerning the collateral exclusion provisions of certain of HDS's secured indebtedness in "Notes to consolidated financial statements -- Note 6 -- Debt" in "Item 8. Financial Statements and Supplementary Data." * Additional disclosure concerning possible but not probable loss contingencies in "Notes to consolidated financial statements -- Note 13 -- Commitment and Contingencies" in "Item 8. Financial Statements and Supplementary Data" and "Item 3. Legal Proceedings." * Additional disclosure concerning release provisions and the joint and several and full and unconditional nature of the guarantees of certain of HDS's indebtedness in "Notes to consolidated financial statements -- Note 15 -- Guarantor Subsidiaries" in "Item 8. Financial Statements and Supplementary Data." Amendment No. 2 also updates (i) the cover page to reflect the filing of HD Supply's Proxy Statement and Amendment No. 1 thereto on March 28, 2014, and April 25, 2014, respectively and (ii) Exhibit 101 (Interactive data files pursuant to Rule 405 of Regulation S-T) to reflect the updates to the Notes to consolidated financial statements outlined above. A copy of the Form 10-K/A is available for free at: http://is.gd/BxjdJi About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. HD Supply incurred a net loss of $218 million for the fiscal year ended Feb. 2, 2014, as compared with a net loss of $1.17 billion for the fiscal year ended Feb. 3, 2013. For the year ended Jan. 29, 2012, the Company incurred a net loss of $543 million. As of Feb. 2, 2014, the Company had $6.32 billion in total assets, $7.08 billion in total liabilities and $764 million total stockholders' deficit. * * * As reported by the TCR on Jan. 11, 2013, Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa1. This rating action results from our expectations that HDS will refinance a significant portion of its senior subordinated notes due 2015, effectively extending the remainder of its maturities by at least two years to 2017. HD Supply carries a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. HEDWIN CORP: Court Approves Shared Management Resources as CRO -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland authorized Hedwin Corporation to employ Shared Management Resources, Ltd., to provide a chief restructuring officer. As reported in the Troubled Company Reporter on April 14, 2014, on Feb. 24, 2014, Hedwin entered into a letter agreement with SMR, pursuant to which SMR, through its managing director, Charles S. Deutchman, agreed to serve as the CRO. SMR has agreed to continue providing certain consulting and restructuring services to the Debtor postpetition, including -- evaluating the Debtor's cash position and utilization of collateral base with the Bank of America, N.A.; -- managing the sales and marketing of the business by Mesirow Financial, Inc., including participation in all substantive discussions and meetings with prospective buyers, and providing updates on the sales process to both Debtor's management and board of directors; and -- enhancing the Debtor's "Dashboard" reporting mechanism to assist management in effectively monitoring the Debtor's critical operations. SMR will be compensated at a flat rate of $1,900 per day, and will be reimbursed for all reasonable and necessary out-of-pocket expenses. Prior to the Petition Date, the Debtor provided a $5,000 retainer to SMR. Mr. Deutchman attested that SMR is a disinterested person, as that term is defined by the Bankruptcy Code. SMR may be reached at: Charles S. Deutchman SHARED MANAGEMENT RESOURCES 28026 Gates Mills Blvd Pepper Pike, OH 44124-4730 Tel: (216) 978-6565 E-mail: cdeutchman@shrmgtres.com About Hedwin Corporation Founded in 1946, Hedwin Corporation is a manufacturer of customized industrial plastic packaging, which it sells to wholesalers and distributors throughout the United States, Canada and Europe. Its manufacturing facility is located at 1600 Roland Heights Avenue, Baltimore, Maryland. It has a warehouse facility at 1700 West 41st Street, Baltimore, Maryland and a warehouse and assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All of the facilities are leased. As of the fiscal year end December 31, 2013, the Debtor had total assets of approximately $15 million. Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case No. 14-151940) in Maryland on April 2, 2014, to sell its assets to Fujimori Kogyo Co., Ltd., absent higher and better offers. The Debtor is represented by Alan M. Grochal, Esq., Stephen M. Goldberg, Esq., and Catherine K. Hopkin, Esq., at Tydings & Rosenberg, LLP, in Baltimore, Maryland. Shared Management Resources, Ltd.'s Charles S. Deutchman serves as chief restructuring officer. * * * The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for May 7, 2014, 10:00 a.m. at 341 meeting room 2650 at 101 W. Lombard St., Baltimore. According to the docket, the deadline for filing proofs of claim is Aug. 5, 2014. The deadline for filing governmental proofs of claim is Sept. 29, 2014. The exclusive period to propose a plan expires July 31, 2014. HILL WINE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Hill Wine Company, LLC P.O. Box 688 Rutherford, CA 94573 Case No.: 14-10680 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Hon. Alan Jaroslovsky Debtor's Counsel: Michael C. Fallon, Esq. LAW OFFICES OF MICHAEL C. FALLON 100 E St. #219 Santa Rosa, CA 95404 Tel: (707) 546-6770 Email: mcfallon@fallonlaw.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Gordon Monroe, CEO and managing member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/canb14-10680.pdf INNERGEX RENEWABLE: DBRS Confirms 'BB' Issuer Rating ---------------------------------------------------- DBRS Inc. has confirmed the Issuer Rating of Innergex Renewable Energy Inc. (Innergex or the Company) at BB (high) and its Preferred Shares rating at Pfd-4 (high), both with Stable trends. The ratings reflect Innergex's fully contracted and diversified portfolio, which mitigates the Company's exposure to the currently depressed wholesale power prices in North America in the medium term. However, the ratings remain constrained by the Company's aggressive expansion plan, combined with weak credit metrics that are below average compared to its peers. Innergex's business risk profile is in the BBB rating range. The Company has a fully contracted portfolio through the use of long- term power purchase agreements (PPAs). The weighted-average remaining life is above average, at approximately 20 years, as assets are relatively new, with a weighted-average age of approximately only six years. While Innergex incurred an upward revision to some of its estimated project costs due to higher construction costs, DBRS continues to view the development risk from Innergex's pipeline of development projects as manageable, given the Company's development expertise with similar small-scale hydro and wind facilities. Innergex's financial risk profile remains weak and is reflective of a B rating range. While Innergex's EBITDA and operating cash flow continued to increase due to sustained organic growth, DBRS remains concerned about Innergex's aggressive financing strategy for its development pipeline, combined with the Company's high dividend payout. As the Company continued to pursue its growth plans, the Company's deconsolidated leverage increased to 30.5% as of December 31, 2013, from 24.5% as of December 31, 2010. Furthermore, consolidated leverage increased to 68.3% as of December 31, 2013 (from 56.7% as of December 31, 2010), and could exceed 70% over the next several years, further pressuring the balance sheet. Should the Company's financial profile deteriorate further, this could result in negative rating action. INTERNATIONAL TEXTILE: Amends 2013 10-K to Add Information ---------------------------------------------------------- International Textile Group, Inc., previously filed its annual report on Form 10-K for the year ended Dec. 31, 2013, with the U.S. Securities and Exchange Commission on March 26, 2014. On April 30, 2014, the Company amended the Form 10-K for the purpose of filing the information required in Part III of Form 10-K within 120 days after the Company's fiscal year end, pursuant to General Instruction G(3) of Form 10-K. PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compenation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Services A copy of the Form 10-K/A is available for free at: http://is.gd/bp6cAK About International Textile International Textile Group, Inc., is a global, diversified textile manufacturer headquartered in Greensboro, North Carolina, with current operations principally in the United States, China, Mexico, and Vietnam. ITG's long-term focus includes the realization of the benefits of its global expansion, including reaching full production at ITG facilities in China and Vietnam, and continuing to seek other strategic growth opportunities. International Textile reported a net loss attributable to common stock of the Company of $10.91 million on $624.21 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss attributable to common stock of the Company of $91.45 million on $619.07 million of net sales during the prior year. As of Dec. 31, 2013, the Company had $317.32 million in total assets, $404.86 million in total liabilities and a $87.53 million total stockholders' deficit. JASON HOLDINGS: Moody's Assigns 'B2' Corp. Family Rating -------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and B2-PD Probability of Default ratings to Jason Holdings, Inc I as well as B1 and Caa1 ratings to first and second lien obligations respectively of Jason Incorporated which will be guaranteed by Jason Holdings, Inc I (collectively, "New Jason"). Moody's also assigned a speculative grade liquidity rating of SGL-2, indicating good liquidity is anticipated over the next year. The ratings outlook is stable. New Jason ratings are for financing being structured for the $539 million acquisition of Jason Partners Holdings Inc., whose principal operating subsidiary is Jason Incorporated (collectively "Jason" with a current CFR of B1), by Quinpario Acquisition Corp. ("Quinpario"). New Jason refers to the structure following the completion of the transaction. Moody's ratings for existing Jason are unchanged, but, upon the closing of Quinpario's purchase, will be withdrawn. Subsequent to Quinpario gaining control of Jason, Moody's research on New Jason will revert to being listed under Jason Incorporated. Jason is a holding company whose principal operations generated $681 million of revenue in 2013 across four operating segments; seating, acoustical products for the automotive industry, finishing equipment and material, and metal components and sub- assemblies. Ratings assigned to New Jason: Jason Holdings, Inc I Corporate Family Rating, B2 Probability of Default, B2-PD Speculative Grade Liquidity, SGL-2 Jason Incorporated $40 million first lien revolving credit, B1, LGD-3, 36% $300 million first lien term loan, B1, LGD-3, 36% $120 million second lien term loan, Caa1, LGD-5 , 84% Ratings Rationale New Jason's B2 Corporate Family Rating reflects its moderate size, highly leveraged post-transaction capital structure, exposure to cyclical end-markets, and regional focus in North America. The rating further considers the company's solid market position across several niche businesses in which it is believed to be the domestic or global leader as well as consistent profitability and good liquidity. Volumes in the company's principal end-markets of automobile, construction equipment, motorcycles, rail, lawn and garden equipment have been correlated over the years and are affected by cyclical macro-economic trends and discretionary consumer expenditures. Quinpario's acquisition will result in Jason's funded debt burden increasing roughly 79%, lower its coverage metrics and reduce free cash flow available for debt reduction than otherwise would have been the case. Accordingly, there is a one notch differential in the Corporate Family Ratings (CFR) between existing Jason and New Jason. Pro forma for the transaction, New Jason's debt-to-EBITDA, including Moody's standard accounting adjustments, will be around 6x and will likely remain at or above 5.5x through 2014. This contrasts to existing Jason's debt-to-EBITDA of 3.7x at December 31, 2013. Moody's expects New Jason's EBITA-to-interest coverage will be under 2x initially compared to existing Jason's 2.3x in 2013. Coverage could rise close to pre-acquisition levels over the rating horizon. Still, coverage would be lower if dividends on Quinpario's convertible preferred issue were recognized as interest. The SGL-2 speculative grade liquidity rating reflects good liquidity which should be sustained over the next twelve months. Moody's anticipates the company will initially have a relatively large cash balance as well as positive free cash flow at levels sufficient to cover scheduled amortization. Operating cash flows are influenced by seasonal patterns with the first half experiencing working capital requirements that tend to un-wind in the second half. New Jason will have limited near-term debt maturities with the term loan amortizing at 1% per year and an excess cash flow provision which does not kick-in until 2016. The company's $40 million revolving credit, which is relatively small compared to its revenue base, is expected to be un-drawn at the closing of the transaction and will have a springing leverage ratio should utilization exceed prescribed levels. (The term loan will not have separate financial maintenance covenants). Alternate liquidity is constrained by the extensive liens over material domestic assets of the borrower and guarantor group. The stable rating outlook reflects Moody's expectations that New Jason's revenues, earnings and cash flows will be sustained across key end markets over the rating horizon and is further supported by a good liquidity profile. Given the company's focus on relatively small and cyclical end- markets and New Jason's high leverage which weakly position it in the B2 rating category, an up-grade in the near term is unlikely. Should the company be able to meaningfully increase its scale without a deterioration in its leverage, upward pressure could develop. Adjusted debt-to-EBITDA sustained meaningfully below 4.5x would be viewed positively. A negative outlook or lower ratings could occur if weak operating performance were to diminish the company's liquidity, either through revolving credit usage or covenant tightening, and result in higher leverage. EBITA/interest coverage below 2.0 times, debt/EBITDA continuing above 6.0 times or negative free cash flow could result in adverse rating actions. The B1 rating on the first lien credit facilities reflect their senior priority of claims over substantially all tangible and intangible domestic assets of the borrower/guarantor group. The Caa1 rating on the second lien term loan reflects its higher expected loss arising from its junior status in downside scenarios. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Jason Incorporated, headquartered in Milwaukee, Wisconsin, is a diversified industrial manufacturing company serving finishing (industrial and maintenance brushes, buffs, and compounds), Seating (static and suspension seating for motorcycle, construction, agricultural, lawn and turf -care equipment), Acoustics (fiber based acoustical insulation products for the auto industry) and Components (producer of metal products, rail safety products and sub-assembly of electric smart meters and other products). Revenue in 2013 was roughly $681 million. JEH COMPANY: Selling 2008 L63 Benz for $32,500 ---------------------------------------------- JEH Company, et al., seek approval from the bankruptcy court to sell a 2008 L63 Mercedes Benz for $32,500 to Cantwell Power Solution Sales. The Debtor believes the sale is for fair market value based upon a willing buyer/willing seller standard. Mercedes Benz Financial asserts a lien against the asset to be sold and has filed a claim for $15,366 as of May 22, 2013. The Debtor will pay Mercedez Benz's claim together with contract interest from the proceeds of the sale. If any party objects to the sale offering to pay a higher price, the court will conduct an auction or allow the Debtor to conduct an auction at any hearing at which the sale of the property is considered. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities. JEH Company, et al., on Jan. 21, 2014 filed a proposed Plan of Reorganization and Disclosure Statement. The Debtors say the Plan provides an opportunity for partial or full recovery of unsecured creditors. There's a May 21, 2014 hearing to consider JEH Stallion Station Inc.'s motion to dismiss its Chapter 11 case. JEH COMPANY: Selling Frost Bank Collateral to Cantwell ------------------------------------------------------ JEH Company, et al., seek approval from the bankruptcy court to sell these collateral pledged to Frost Bank: (a) 2010 Elite 7 Horse Trailer (note no. ending 001) (b) 2011 International 4300 (note no. ending 016) (c) 2010 F-350 Larriet Pickup truck (note no. ending 018) Vin no. ending 5327 (d) 2009 TREX loader (note no. ending 001) The Debtor will sell the collateral for $62,000 to Cantwell Power Solution Sales. The Debtor will pay Frost Bank the proceeds of the sale net of ad valorem taxes and expenses. If any party objects to the sale offering to pay a higher price, the court will conduct an auction or allow the Debtor to conduct an auction at any hearing at which the sale of the property is considered. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities. JEH Company, et al., on Jan. 21, 2014 filed a proposed Plan of Reorganization and Disclosure Statement. The Debtors say the Plan provides an opportunity for partial or full recovery of unsecured creditors. There's a May 21, 2014 hearing to consider JEH Stallion Station Inc.'s motion to dismiss its Chapter 11 case. JEH COMPANY: Slated to Present Plan for Confirmation May 20 ----------------------------------------------------------- JEH Company, et al., are slated to seek confirmation of their plan of reorganization later this month. The U.S. bankruptcy Court for the Northern District of Texas in mid-April approved the Debtors' disclosure statement and approved this timeline: -- Ballots reflecting acceptance or rejection of the Plan must be served by creditors upon Mark J. Petrocchi, attorney for the Debtors at 2200 Forest Park Blvd., Fort Worth Texas, 76110 on or before May 12, 2014 at 5:00 o'clock p.m. prevailing central time; -- Objections to confirmation of the Plan are due May 12, 2014; and -- A hearing on confirmation of the Plan and objections as may be made thereto will be held on May 20, 2014 at 9:30 a.m. The Amended Plan The Debtors on April 16, 2014, filed an amended version of their proposed Chapter 11 plan and disclosure statement. The Plan, as amended, proposes to treat secured creditors as follows: * In the event Bridgewell Resources, LLC, G.A.P. Roofing, Inc., and Worthington National Bank each does not agree in writing that its claim will be treated as an unsecured claim, then an adversary proceeding will be filed against the claimant. The secured claim of Bridgewell and G.A.P., to the extent allowed, will be paid in full with interest at a rate of 5% from the effective date of the Plan through the date of the payment. The secured claims of of Worthington will be satisfied in full by the surrender of collateral. * The secured claims of Frost Bank are not disputed, unliquidated or contingent as of the time of the filing of this document. The secured claims continue to accrue interest and potentially fees. Until Frost Bank is paid, it will retain all liens against collateral pledged to it. The remaining secured claim of Frost Bank against JEHCO under its lease 1001 will be paid in the amount of $14,200.00, subject to a reduction of the amount of any additional adequate protection payments made prior to the Effective Date plus any additional fees, expenses, and costs owed. The remaining secured claims of Frost Bank against JEHCO include the secured claims described against JEH Leasing and JEH Stallion. Subject to court approval, Leasing may seek authority to sell equipment described as the Trex lift and other property. * The secured claim of Wells Fargo and all claims of Wells Fargo will be considered fully paid and satisfied by the prior sale and/or surrender to Wells Fargo by the 30th day following the Effective Date, except as otherwise agreed to by that party. To pay off general unsecured creditors, the Debtors will liquidate all assets of the estates of JEHCO and JEH Leasing Company with specific direction to emphasize a market return for collection or sale of accounts receivable, equipment and real property assets. The first payment to each creditor will be due and owing beginning on the 60th day of the Effective Date and then due and owing when for any period of 60 days cash proceeds of the liquidation of assets exceed by $100,000 the secured claims against the proceeds, and a reserve equal to the next three months budget for expenses. If at any time when the remaining assets of JEHCO are believed to have a value of $100,000 or less, then the debtor will promptly liquidate all remaining assets and dispersed the remaining proceeds to unsecured creditors. The equity interest holders will receive no payments for any equity interests at any time. Copies of the Plan and Disclosure Statement, as amended on April 16, 2014, are available for free at http://bankrupt.com/misc/JEH_Co_Amended_Plan.pdf http://bankrupt.com/misc/JEH_Co_Amended_DS.pdf The Debtors' counsel can be reached at: Mark J. Petrocchi, Esq. GRIFFITH, JAY & MICHEL, LLP 2200 Forest Park Blvd. Fort Worth, TX 76110 Phone: (817) 926-2500 Fax: (817) 926-2505 E-mail: mpetrocchi@lawgjm.com About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities. JEH Company, et al., on Jan. 21, 2014 filed a proposed Plan of Reorganization and Disclosure Statement. The Debtors say the Plan provides an opportunity for partial or full recovery of unsecured creditors. There's a May 21, 2014 hearing to consider JEH Stallion Station Inc.'s motion to dismiss its Chapter 11 case. KIDSPEACE CORP: First Modified Chapter 11 Plan Confirmed -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania on April 3, 2014, issued an order confirming KidsPeace Corporation, et al.'s First Modified Joint Chapter 11 Plan of Reorganization, after determining that the Plan satisfies the confirmation requirements of Section 1129 of the Bankruptcy Code. Bill Rochelle, the bankruptcy columnist for Bloomberg News, related that the Plan was a result of negotiations among the Debtors, secured bondholders, the Official Committee of Unsecured Creditors, and the Pension Benefit Guaranty Corporation. PBGC will be paid $13.5 million in installments for its claim of about $110 million arising from underfunded pension plan, Mr. Rochelle related. General unsecured creditors with $2.5 million in claims take 15 percent in three installments, the Bloomberg report said. The bondholders' deficiency claims and the PBGC's claim won't participate in the pool for unsecured creditors, the report added. 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. KKR FINANCIAL: Fitch Hikes Preferred Stock Rating From 'BB+' ------------------------------------------------------------ Fitch Ratings has upgraded the long-term Issuer Default Rating (IDR) and unsecured debt rating of KKR Financial Holdings LLC (KFN) to 'A-' from 'BBB' following the closing of its acquisition by KKR & Co. L.P. (KKR). The preferred stock rating has also been upgraded, to 'BBB' from 'BB+'. All ratings have been removed from Rating Watch Positive and the Rating Outlook is Stable. KKR's long-term IDR and unsecured debt ratings were affirmed at 'A' on Dec. 17, 2013, following the announced acquisition. The closing of the acquisition has no rating impact on KKR's ratings. Key Rating Drivers - IDR and Unsecured Debt The upgrade of KFN's ratings reflects Fitch's view that the entity is strategically important to KKR, as outlined in Fitch's criteria, 'Rating FI Subsidiaries and Holding Companies'. In accordance with the criteria, a subsidiary considered to be of strategic importance is rated one to two notches below its parent. As a result of KFN's upgrade, its IDR of 'A-' is now one notch below the 'A' IDR of KKR. KKR's non-private equity business, which is included in its public markets segment, totaled $35.4 billion of fee-earning assets under management (FAUM) as of March 31, 2014. This business has been growing in recent years as the firm has focused on broadening its product suite for limited partners, improving the liquidity of its investment portfolio, and generating a recurring yield from the balance sheet. The KFN acquisition serves to accelerate that strategy, to some extent, as KFN has historically invested in more liquid credit via the issuance and management of CLOs, which provide a contractual yield to the firm. Also supporting the view of KFN's strategic importance to KKR is the sharing of the brand, the high level of management integration, and the fact that during the recent financial crisis KKR provided explicit financial support to KFN, by waiving management fees, backstopping an equity raise, and providing the firm with a $100 million liquidity facility. While Fitch has continued to believe that KKR would provide additional support to KFN if necessary, this acquisition strengthens that notion. That said; Fitch believes that KFN's small size and more limited track record prevent the firm from being considered a core subsidiary at present which would result in equalization of the ratings. Depending on KFN's size, strategy, and relative earnings contribution to KKR, Fitch's assessment of KFN's strategic importance could evolve over time. Key Rating Drivers - Preferred Stock The upgrade of KFN's preferred stock rating to 'BBB' from 'BB+' reflects the rating upgrade of KFN's long-term IDR and maintains the existing two-notch differential between the long-term IDR and preferred stock rating, consistent with Fitch's "Treatment and Notching of Hybrids in Non-Financial Corporate and REIT Credit Analysis" criteria published on Dec. 23, 2013. Rating Sensitivities The Stable Rating Outlook for KFN is aligned with the Stable Rating Outlook on KKR. The ratings of KFN are directly linked to KKR, as Fitch considers KFN to be a strategically important subsidiary. Any change in Fitch's view on the relationship between KFN and its parent could alter the rating linkage. Absent a change in the perceived relationship between KKR and KFN, Fitch would expect KFNs ratings to move in step with any changes to KKR's ratings. Additionally, a material increase in leverage and/or significant deterioration in the operating performance of KFN could become a constraining factor for the ratings of KKR. On Dec. 17, 2013, KKR announced its intention to acquire KFN for approximately $2.6 billion in equity. The transaction was approved by shareholders and closed on April 30, 2014. Fitch has upgraded the following: KKR Financial Holdings LLC -- Long-term IDR to 'A-' from 'BBB'; -- Unsecured debt to 'A-' from 'BBB'; -- Preferred stock to 'BBB' from 'BB+'. All ratings have been removed from Rating Watch Positive and the Rating Outlook is Stable. LABORATORY PARTNERS: Cash Budget Revised After Talon Sale --------------------------------------------------------- At the behest of debtor Laboratory Partners Inc., Judge Peter J. Walsh entered an order amending his order late last year approving the Debtor's DIP financing to, among other things, allow the Debtor to use cash based on a revised budget. The DIP lender has advanced $2.85 million in principal under the DIP Agreement. The Debtors on Feb. 24, 2014, closed the sale of certain portions of their business -- called the "Talon Division" -- to Laboratory Corporation of America Holdings. The Debtors on Feb. 28, 2014 distributed to the DIP Agent $2.87 million in principal and interest owing under the DIP Agreement and paid certain fees and expenses. On March 26, the Debtors distributed to the agent of the prepetition lenders $3 million. The Debtors and the lenders have agreed that the Debtors may retain a portion of the net sale proceeds from the Talon Sale in a manner consistent with a revised budget. A copy of the amended order is available for free at: http://bankrupt.com/misc/Laboratory_Partners_Rev_DIP_Order.pdf About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, and several affiliates filed petitions for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on Oct. 25, 2013, in Delaware. In its assets, the Debtor disclosed $43,034,702.91 in total assets and at least $132,357,067.42 (plus unknown) in total liabilities. The debtor-affiliates are Kilbourne Medical Laboratories, Inc., MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc., and Pathology Associates of Terre Haute, Inc. Certain of the Debtors do business as MEDLAB. 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.; and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq., and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. Duff & Phelps Securities LLC serves as the Debtors' investment bankers. 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. In March 2014, the Bankruptcy Court authorized the Debtors to sell their so-called "Talon Division," which refers to the clinical laboratory and anatomic pathology services to (i) physicians, physician officers and medical groups in Indiana, Illinois, and (ii) Union Hospital, Inc., in Terre Haute and Clinton, Indiana, to Laboratory Corporation of America Holdings for $10.5 million. An auction was cancelled after the Debtors received no competing bid during the bid deadline. The Court also authorized the Debtors to sell certain of their assets relating to their nuclear medicine business to Union Hospital, Inc. LABORATORY PARTNERS: Removal Period Extended to July 23 ------------------------------------------------------- Laboratory Partners Inc., et al., obtained an order enlarging the time to file notices of removal of prepetition actions under Bankruptcy Rule 9027 through and including July 23, 2014. About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, and several affiliates filed petitions for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on Oct. 25, 2013, in Delaware. In its assets, the Debtor disclosed $43,034,702.91 in total assets and at least $132,357,067.42 (plus unknown) in total liabilities. The debtor-affiliates are Kilbourne Medical Laboratories, Inc., MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc., and Pathology Associates of Terre Haute, Inc. Certain of the Debtors do business as MEDLAB. 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.; and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq., and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. Duff & Phelps Securities LLC serves as the Debtors' investment bankers. 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. In March 2014, the Bankruptcy Court authorized the Debtors to sell their so-called "Talon Division," which refers to the clinical laboratory and anatomic pathology services to (i) physicians, physician officers and medical groups in Indiana, Illinois, and (ii) Union Hospital, Inc., in Terre Haute and Clinton, Indiana, to Laboratory Corporation of America Holdings for $10.5 million. An auction was cancelled after the Debtors received no competing bid during the bid deadline. The Court also authorized the Debtors to sell certain of their assets relating to their nuclear medicine business to Union Hospital, Inc. LABORATORY PARTNERS: Still Evaluating Bechman Coulter Agreement --------------------------------------------------------------- Laboratory Partners Inc., et al., filed a motion to enter into a waiver of their obligations under the Talon sale order to immediately reject the Bechman Coulter Agreement. Pursuant to a master agreement between Laboratory Partners, Inc. d/b/a MedLab and Beckman Coulter, Inc. that was executed on or about December 12, 2012, Beckman allows the Debtors to purchase products for general chemistry, immunoassay, hematology and automation/IT product disciplines. Each of the Debtors is separately eligible to purchase a variety of products, reagents and services related to the operation of the Debtors' businesses. Historically, assets for use by the Talon Division and the Long Term Care Division have been purchased through separate orders. The sale of the Talon Division has closed and LabCorp has determined that it does not wish to assume the Beckman Coulter Agreement. However, the Debtors continue to market the assets of the Long Term Care Division in an effort to maximize the value of their bankruptcy estates. A potential purchaser for the Long Term Care Division has indicated a desire to possibly assume the Beckman Coulter Agreement, and, the Debtors have concluded in an exercise of their sound business judgment that leaving open the possibility of assuming the Beckman Coulter Agreement at a later date could provide significantly more value to the Debtors' estates than the alternative of the immediate rejection of the agreement and the attendant contract rejection damages. Due to the fact that this contractual modification has been mutually agreed to by the Debtors and LabCorp, the Debtors believe that entry into the waiver is likely within the ordinary course of business and does not necessarily require court approval. However, out of an abundance of caution, the Debtors request that the Court enter relief as necessary to allow them to enter into the waiver. The Debtors' attorneys can be reached at: Erin R. Fay, Esq. Robert J. Dehney, Esq. Derek C. Abbott, Esq. Andrew R. Remming, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 N. Market St., 16th Flr. PO Box 1347 Wilmington, DE 19899-1347 Telephone: 302-658-9200 Facsimile: 302-658-3989 - and - Leo T. Crowley, Esq. Jonathan J. Russo, Esq. Margot Erlich, Esq. PILLSBURY WINTHROP SHAW PITTMAN LLP 1540 Broadway New York, NY 10036 Telephone: (212) 858-1000 Facsimile: (212) 858-1500 About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, and several affiliates filed petitions for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on Oct. 25, 2013, in Delaware. In its assets, the Debtor disclosed $43,034,702.91 in total assets and at least $132,357,067.42 (plus unknown) in total liabilities. The debtor-affiliates are Kilbourne Medical Laboratories, Inc., MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc., and Pathology Associates of Terre Haute, Inc. Certain of the Debtors do business as MEDLAB. 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.; and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq., and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. Duff & Phelps Securities LLC serves as the Debtors' investment bankers. 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. In March 2014, the Bankruptcy Court authorized the Debtors to sell their so-called "Talon Division," which refers to the clinical laboratory and anatomic pathology services to (i) physicians, physician officers and medical groups in Indiana, Illinois, and (ii) Union Hospital, Inc., in Terre Haute and Clinton, Indiana, to Laboratory Corporation of America Holdings for $10.5 million. An auction was cancelled after the Debtors received no competing bid during the bid deadline. The Court also authorized the Debtors to sell certain of their assets relating to their nuclear medicine business to Union Hospital, Inc. LEVEL 3: Posts $112 Million Net Income in First Quarter ------------------------------------------------------- Level 3 Communications, Inc., reported net income of $112 million on $1.60 billion of revenue for the three months ended March 31, 2014, as compared with a net loss of $78 million on $1.57 billion of revenue for the same period in 2013. As of March 31, 2014, the Company had $12.88 billion in total assets, $11.29 billion in total liabilities and $1.59 billion in total stockholders' equity. "We started out the year with another good quarter," said Jeff Storey, president and CEO of Level 3. "The results reflect our focus on execution and emphasis on profitable growth. We continue to capture market share by helping enterprises optimize their cost structure while moving to newer, more scalable technologies." A copy of the press release is available for free at: http://is.gd/PK1uyg About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 incurred a net loss of $109 million on $6.31 billion of revenue for the year ended Dec. 31, 2013, as compared with a net loss of $422 million on $6.37 billion of revenue in 2012. The Company incurred a net loss of $756 million in 2011. * * * In October 2013, Fitch Ratings affirmed the 'B' Issuer Default Ratings (IDRs) assigned to Level 3. As reported by the TCR on June 5, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Broomfield, Colo.- based global telecommunications provider Level 3 Communications Inc. to 'B' from 'B-'. "The upgrade reflects improved debt leverage, initially from the acquisition of the lower-leveraged Global Crossing in October 2011, and subsequently from realization of the bulk of what the company expects to eventually be $300 million of annual operating synergies," said Standard & Poor's credit analyst Richard Siderman. LIFEPOINT HOSPITALS: Fitch Rates New $400MM Unsecured Notes 'BB' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to LifePoint Hospitals, Inc.'s $400 million proposed senior unsecured notes. Proceeds of the notes will be used to partially retire the company's $575 million convertible subordinated notes maturing later this month. The ratings apply to approximately $2.4 billion of debt at March 31, 2014. The Rating Outlook is Stable. Key Rating Drivers -- Pro forma for the $400 million notes issue and pay-down of the convertible subordinated notes maturity, LifePoint's pro forma leverage (total debt to EBITDA) of 4.0x EBITDA, is amongst the lowest in the for-profit hospital industry. -- Debt has recently trended higher as the result of funding of acquisitions and share repurchases, and Fitch expects the company to continue to deploy capital for these purposes in 2014. -- Liquidity is solid. Lower profitability resulting from the integration of recently acquired hospitals is expected to pressure the level of free cash flow (FCF; cash from operations less dividends and capital expenditures), but Fitch expects it to remain above $150 million annually. -- Organic growth in patient volume has been persistently weak across the for-profit hospital industry. However, LifePoint's recent hospital acquisitions in relatively faster growing markets will support growth for the company. More Aggressive Capital Deployment Driving Higher Leverage At 4.2x total debt to EBITDA at March 31, 2014, LifePoint Hospital Inc.'s (LifePoint) leverage is amongst the lowest in the for- profit hospital industry, commensurate with the strong financial flexibility required for a 'BB' category rating. However, leverage is up substantially over the past year, and Fitch expects it to be maintained near 4.0x after pay-down of the $575 million convertible subordianted notes maturity. Unless risk associated with higher leverage is offset by continued decent operating results and FCF generation, it will result in a downgrade of the ratings. Pro forma for the notes issuance and pay-down of the senior subordinated convertible notes, Fitch estimates gross debt leverage of 1.1x through the senior secured bank debt and 3.9x through the senior unsecured notes. In addition to the upcoming notes maturity, the primary uses of cash in the first half of 2014 include several hospital acquisitions and share repurchases. Acquisitions have been a top use of cash for LifePoint, consuming 52% of cash from operations in 2012 and 2013 and 34% in the LTM ended March 31, 2014. The company closed one transaction so far 2014, requiring a $60 million cash commitment, and has announced several transactions expected to close later in the year. In recent transactions, LifePoint has added inpatient acute care hospital assets in relatively faster growing markets, including markets in three new states - North Carolina, Michigan and Indiana. Fitch thinks this strategy achieves some important aims for LifePoint, including boosting relatively weak organic growth in the company's existing markets and reducing geographic concentration; 54% of 2013 revenue was generated in the company's five largest states. With CFO trending around $350 million and run-rate FCF of around $170 million, based on the cost of its past acquisitions, Fitch estimates that LifePoint can fund two or three transactions with cash on hand annually. However, given the rapid pace of transactions and the recently larger cash commitments associated with some acquisitions, there is a risk that funding of the acquisition strategy could result in leverage sustained above the 4.0x level that is consistent with the 'BB' rating. Decent Financial Flexibility At March 31, 2014, liquidity was provided by approximately $532 million of cash on hand, availability on the company's $350 million bank credit facility revolver ($330 million available), and FCF ($201 million for the latest 12 months [LTM] period, defined as cash from operations less dividends and capital expenditures). The largest upcoming maturity is the $575 million senior subordinated convertible notes maturing May 2014. Fitch expects the company will pay down the maturity using cash on hand, including proceeds of the $400 million proposed notes. Subsequent to the convertible notes maturity, the next largest maturity does not occur until 2017. Fitch notes that LifePoint has ample capacity to issue additional debt on either of the secured or unsecured level. The bank agreement permits additional secured debt up to a senior secured leverage ratio of 3.5x with an $800 million carveout regardless of the ratio (there is a springing lien provision in the senior unsecured notes indenture which required these notes to become ratably secured when secured debt is greater than 3.0x EBITDA). A financial maintenance covenant requires total-debt-to-EBITDA maintained below 5.0x. Fitch projects that LifePoint's FCF will contract by about $40 million in 2014 versus the March 31, 2014 LTM level of $201 million, to $160 million. This is because of lower profitability and higher capital expenditures later in the year. An expectation for a slight contraction in the EBITDA margin is primarily because of the integration of less profitable acquired hospitals. Rural Market Recovery Lagging Broader Industry LifePoint is the only pure-play non-urban operator in the for- profit hospital industry, with a sole-provider position in nearly all of its 60 markets, although the company has gained exposure in larger rural and small suburban markets through some of its recent acquisitions. Having sole-provider status in the vast majority of markets confers certain benefits on LifePoint in capturing organic patient volume growth as well as in negotiating price increases with commercial health insurers. While LifePoint's organic patient volume growth has recently lagged the broader for-profit hospital industry, the company's results have been consistent with the experience of other rural and suburban market hospital operators. While persistently weak organic volume trends across the industry began to show signs of improvement in the second half of 2011, providers in urban markets exhibited a much stronger rebound in volume growth that has since reversed for most companies, with weak organic volume trends industry-wide in 2012 - 2013. LifePoint and the company's peers have recently been successful in augmenting weak organic operating trends through acquisition of inpatient hospitals and other types of care delivery assets. Consolidation of the industry has been encouraged by the financial pressures on smaller operators related to payment reforms that are required by the Affordable Care Act (ACA), and capital requirements necessary to comply with other government mandates, such as the implementation of electronic health records. Affordable Care Act a Positive Driver In 2014 LifePoint's Q1'14 operating results benefited from the early implementation of the health insurance expansion provisions of the ACA, including the mandate for individuals to purchase health insurance or face a financial penalty, and the expansion of Medicaid eligibility. Most of the benefit to LifePoint's results seems to have stemmed from a reduction in self-pay volumes as opposed to higher utilization of healthcare by newly insured individuals. This result is consistent with Fitch expectations of the influence of the ACA on the hospital industry. Expansion of state Medicaid program is of particular importance to reduction in self-pay patients and the associated headwind of bad debt expense for hospital companies. Seven of the 20 states in which LifePoint operates hospitals expanded Medicaid programs on Jan. 1, 2014, including five of the eight states where the company has its largest revenue exposure. LifePoint estimates that about 80% of the uninsured population of the seven states opting in to Medicaid expansion qualifies for coverage under the new, more generous, income limitations. The company further reports that 35% of self-pay patient volumes are attributable to those same seven states. Rating Sensitivities A downgrade of the ratings could result from gross debt to EBITDA being maintained above 4.0x and FCF generation sustained below $150 million annually. The most likely driver of a negative rating action is debt funding of capital deployment, including acquisitions and share repurchases, contributing to leverage above 4.0x. In addition, difficultly in the integration of recent acquisitions and the timing and level of funding of capital projects in new markets could weigh on FCF and the credit profile. An upgrade of the ratings is not expected in the next several years. It would require the company to commit to maintain leverage below 3.0x. Fitch does not believe LifePoint has a financial incentive to operate with leverage at such a low level, and it is inconsistent with the company's recently more aggressive stance toward capital deployment. Debt Issue Ratings Fitch currently rates LifePoint as follows: -- Issuer Default Rating 'BB'; -- Secured bank facility 'BB+'; -- Senior unsecured notes 'BB'; -- Subordinated convertible notes 'BB-'. LIFEPOINT HOSPITALS: Moody's Lowers Senior Debt Rating to 'Ba2' --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of LifePoint Hospitals, Inc.'s existing senior secured credit facilities and senior unsecured notes, both to Ba2 from Ba1. Moody's also affirmed LifePoint's Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating. The rating outlook is stable. The actions follow LifePoint's proposed $400 million add-on to the company's 5.5% senior unsecured notes due 2021. Moody's understands that the proceeds of the new notes will be used, along with cash on hand, for general corporate purposes, including the upcoming maturity of $575 million in convertible subordinated notes. The downgrade of the ratings on LifePoint's credit facilities and unsecured notes reflects the elimination of a layer of loss absorption below this more senior debt following the near term maturity of the company's senior subordinated notes and the proposed increase in the amount of senior unsecured debt outstanding resulting from the current offering. LifePoint's senior unsecured notes remain rated at the same level as the company's senior secured debt. Given that the credit facilities are secured solely by a pledge of stock and not by any hard assets, Moody's views this as a weak collateral package and assigns a 100% deficiency claim. This results in the credit facilities being effectively unsecured with respect to Moody's loss given default methodology, and hence the credit facilities are rated at the same level as the unsecured notes. Ratings downgraded: Senior secured credit facilities to Ba2 (LGD 4, 51%) from Ba1 (LGD 3, 39%) Senior unsecured notes to Ba2 (LGD 4, 51%) from Ba1 (LGD 3, 39%) Ratings affirmed: Corporate Family Rating at Ba2 Probability of Default Rating at Ba2 Speculative Grade Liquidity Rating at SGL-2 Ratings Rationale LifePoint's Ba2 Corporate Family Rating reflects Moody's expectation that the company's operating performance will result in strong interest coverage and cash flow coverage of debt. Leverage will remain high in the near term but is expected to fall below 4.0 times. Moody's also expects the company to continue with its active pursuit of acquisitions and share repurchases. The rating also incorporates Moody's expectation of a difficult operating environment in the near term, characterized by reimbursement pressures and weak volume trends, but improving over the next 12-18 months as provisions of the Affordable Care Act are further implemented. Moody's does not expect an upgrade in the near term given the elevated leverage. However, Moody's could upgrade the rating if the company grows earnings through acquisitions that do not significantly disrupt operations or require a material use of incremental debt, such that debt to EBITDA is sustained at or below 3.0 times. Moody's could downgrade the rating if it believes LifePoint's financial policy is becoming more aggressive and it pursues debt financed acquisitions or share repurchases. Ratings could also be downgraded if the company experiences operating challenges, or if for any other reason Moody's expects debt to EBITDA to be sustained above 4.0 times. Headquartered in Brentwood, Tennessee, LifePoint is a leading operator of general acute care hospitals with operations predominantly in non-urban communities. The company generated revenue of approximately $3.7 billion net of the provision for doubtful accounts in the twelve months ended March 31, 2014. LIFEPOINT HOSPITALS: S&P Affirms 'BB-' CCR; Outlook Negative ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on LifePoint Hospitals Inc. The outlook is negative. At the same time, S&P affirmed all issue-level ratings. S&P revised the recovery rating on the first lien debt and unsecured debt to '4' from '3'. The '4' recovery rating indicates S&P's expectation for average (30% to 50%) recovery for lenders in the event of a payment default. The ratings on the first lien and unsecured notes are the same because S&P views the credit facility and senior unsecured notes as pari passu because of the weak security pledge on the first lien debt. The company will use proceeds of the term loan, and cash reserves to refinance its existing convertible debt. "The ratings on LifePoint Hospitals Inc. incorporate our assessment that the rural hospital chain has a 'weak' business risk profile, despite the necessary nature of its services, because of the weak reimbursement environment, competitive nature of its business including outmigration to larger communities, weak patient volume trends, and adverse payor mix shift," said Standard & Poor's credit analyst David Peknay. S&P views LifePoint's financial risk profile as "significant", reflecting a debt-to-EBITDA ratio within its publicly stated 3x to 4x target. LifePoint's "weak" business risk profile reflects the particular challenges it faces amid industry utilization pressures. LifePoint's liquidity is "adequate" for its needs, with sources of cash to exceed uses over the next 12 to 24 months. S&P's negative rating outlook on LifePoint Hospitals reflects its view that industry pressures and financial policy may jeopardize its base case expectations and preclude its deleveraging scenario. If physician employment costs, weak patient volume trends, and reimbursement cuts continue to strain profitability, it may make it difficult for the company to reduce leverage back to the level that S&P considers consistent with a significant financial risk profile. S&P could revise the outlook to stable if the company reduces and maintains leverage below 4x. Key factors that S&P believes must occur include the margin stabilization of its base business, attainment of reasonable profitability from its acquisitions, and confidence in the company's commitment to maintaining leverage below 4x. A downgrade would be predicated on operating challenges that would prevent LifePoint from again achieving credit metrics consistent with a significant financial risk profile. This might include sustained organic revenue declines of even modest size, caused by a chronic reduction in admissions and adverse reimbursement changes. S&P believes this would be accompanied by a margin contraction of at least 50 basis points. LOFINO PROPERTIES: Files Amended Schedules F & G ------------------------------------------------ Lofino Properties, LLC has filed with the Bankruptcy Court amended schedules F and G containing list of creditors holding unsecured nonpriority claims and executory contracts and unexpired leases. Copies of these schedules are available for free at: http://is.gd/oI2HTP http://is.gd/MpSTqQ http://is.gd/xP80PB About Lofino Properties & Southland 75 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. According to the petitions, 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 Debtors' motion for joint administration of their cases. MANJIT S. SANDHU: Case Summary & Unsecured Creditor --------------------------------------------------- Debtor: LP Manjit S. Sandhu Et Al dba Manjit Sandhu Mohiner Sanhu Et Al, LP 7055 Cedar Mountain Drive Livermore, CA 94550 Case No.: 14-41910 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Hon. Roger L. Efremsky Debtor's Counsel: Badma Gutchinov, Esq. LAW OFFICES OF BADMA GUTCHINOV P. O. Box 16431 San Francisco, CA 94116-0431 Tel: (415) 572-7075 Email: gutchinov@gmail.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Manjit S. Sandhu, partner. The Debtor listed Valley Community Bank, 3000 El Camino Real, Suite Palo Alto CA 94306, as its largest unsecured creditor holding a claim of $1.3 million. MARISA ANN BELLECI: Facing Chapter 11 Case Dismissal ---------------------------------------------------- The Bankruptcy Court for the Northern District of California, in Oakland, on April 8, 2014, converted the Chapter 13 case of Marisa Ann Belleci (Bankr. N.D. Calif. Case No. 14-40261) to chapter 11. On April 9, 2014, a Notice was sent to the debtor directing the debtor to file the List of Creditors Holding 20 Largest Unsecured Claims (Official Form 4) within 14 days or the case might be dismissed without further notice. The Court notes that the required document was not filed within that time frame, nor has it been filed to date. In an April 29, 2014 Memorandum available at http://is.gd/CjIN37from Leagle.com, Bankruptcy Judge William J. Lafferty, III, held that, if the debtor does not file the List of Creditors Holding 20 Largest Unsecured Claims (Official Form 4) within seven days of entry of the order, the case will be dismissed. MARSHALL CREEK: Case Summary & 5 Unsecured Creditors ---------------------------------------------------- Debtor: Marshall Creek Retail Investors, LLC 3735 Beam Road, Suite B Charlotte, NC 28217 Case No.: 14-01777 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: R Scott Shuker, Esq. LATHAM, SHUKER, EDEN & BEAUDINE LLP Post Office Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: bknotice@lseblaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Gary J. Davies, Durban Management, LLC, manager of the Debtor. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-01777.pdf MEE APPAREL: Auction to Be Held May 21; Bids Due May 19 ------------------------------------------------------- The assets of MEE Apparel LLC and MEE Direct LLC will be sold at auction commencing on May 21, 2014 at 10:00 a.m. (Eastern Standard Time), at the offices of Cole, Schotz, Meisel, Forman & Leonard, P.A., Court Plaza North, 25 Main Street, Hackensack, New Jersey 07601. Offers for the Debtors' assets are due May 19, 2014 at 12:00 p.m. (Eastern Standard Time). The Bankruptcy Court on April 24 approved the Debtors' proposed procedures for (a) submitting bids for the purchase of substantially all of the Debtors' assets, and (b) conducting an auction. The Court also authorized the Debtors' to enter into a stalking horse agreement for the purpose of establishing a minimum acceptable bid for the assets. The Court also approved procedures for the assumption and assignment of certain executory contracts and unexpired leases in connection with the sale of the Debtors' assets. The Auction may be adjourned or rescheduled without further notice by an announcement of the adjourned date at the Auction. The Debtors reserve the right to cancel the Auction if two or more Qualified Bids are not received as of the Bid Deadline. The sale of the Assets to the Successful Bidder will be presented for authorization and approval by the Court at the Sale Approval Hearing, which is scheduled to be held on May 28, 2014 at 10:00 a.m. (Eastern Standard Time). Objections, if any, to approval of the sale of the Assets to the Successful Bidder, including any objections to the proposed assumption and assignment of certain Contracts and , are due no later than 4:00 p.m. (Eastern Standard Time) on May 23. The Court's Order requires the Successful Bidder to consummate the purchase of the Assets by 11:59 p.m. (Eastern Standard Time) on May 30, 2014. As reported by the Troubled Company Reporter, Suchman LLC will be the stalking horse bidder. Suchman is one of the Debtors' prepetition lenders, indirect equity owner, and proposed DIP lender. Suchman is owned 100% by Seth Gerszberg, the indirect owner of the Debtor. Suchman has agreed to provide $7 million to finance the Chapter 11 cases but the parties' DIP credit agreement requires the Debtors to: -- obtain an order approving the Debtors' retention of an investment banking firm acceptable to the DIP Lender, no later than 10 days after the Petition Date; -- obtain an order approving the sale procedures no later than 15 days after the Petition Date; -- conduct an auction no later than 45 days after the Petition Date; -- obtain approval of the sale no later than 2 days after the auction; and -- close the sale no later than 2 days after entry of the sale order. In the event the Debtors pursue an alternative transaction, Suchman will receive an expense reimbursement in the amount of $200,000. The Committee had opposed a quick sale. The U.S. Trustee and General Growth Properties and other landlords also filed objections to the bidding procedures. The landlords noted that the bidding procedures do not afford sufficient time to address adequate assurance of performance or the additional protections afforded to shopping center leases. The Taubman Landlords joined in the Objection of General Growth Properties. The Taubman Landlords are the owners of a certain regional retail shopping center which include: Dolphin Mall Associates LLC, commonly known as Dolphin Mall, located in Miami, Florida; and Taubman Auburn Hills Associates Limited Partnership, commonly known as Great Lakes Crossing Outlets, located in Auburn Hills, Michigan. In an omnibus response to the objections, the Debtors reiterated that they have an obvious and immediate need to proceed as expeditiously as possible towards approval of the sale of substantially all of their assets to Suchman, subject to higher and better offers. The Debtors explained that the timeline for the sale is simply dictated by the Debtors' cash needs. The Debtors said they would exhaust their liquidity by the week ending May 24, 2014, and their budget allocated an additional $1 million for the wind down of the Debtors' estates and a dividend to unsecured creditors who are completely, categorically and indisputably "out of the money." The Taubman Landlords are represented in the case by: Sandy L. Galacio, Jr., Esq. WINDELS MARX LANE & MITTENDORF, LLP 120 Albany Street Plaza, 6th Floor New Brunswick, NJ 08901 Tel: (732) 846-7600 Fax: (732) 846-8877 E-mail: sgalacio@windelsmarx.com - and - Andrew S. Conway, Esq. 200 East Long Lake Road, Suite 300 Bloomfield Hills, MI 48304 Tel: (248) 258-7427 E-mail: Aconway@taubman.com About MEE Apparel Founded in 1993 by Marc Ecko, Seth Gerszberg and Marci Tapper, MEE Apparel LLC and MEE Direct LLC are providers of youth apparel and streetwear under the "Ecko Unltd." and "Unltd." brands. Evolving from just six t-shirts and a can of spray paint, MEE has become a full scale global fashion and lifestyle company. In 2013, MEE Apparel generated gross sales of approximately $50 million. MEE Apparel LLC and MEE Direct LLC filed Chapter 11 bankruptcy petitions (Bankr. D.N.J. Case Nos. 14-16484 and 14-16486) on April 2, 2014. The Debtors have suffered declining sales and reduced profitability since the beginning of 2009. As a result, MEE defaulted on a $50 million credit facility with Wells Fargo, N.A. Additionally, the Debtors were unable to meet the terms of their license agreements with the Iconix Joint Venture prompting owner Seth Gerszberg in May 2013 to sell their remaining 49% interest in the Ecko portfolio of brands for $45 million and the assumption of certain debt. Suchman LLC used the proceeds of that sale (i) to pay the WF Facility Lenders and take assignment of the WF Credit Facility and (ii) to provide $12.54 in additional loans to the Debtors. The Debtors have a deal to sell the assets to Gerszberg's Suchman LLC at a bankruptcy court-sanctioned auction. As of the Petition Date, the Debtors had assets of approximately $30 million and liabilities of $62 million, including $25 million of debt outstanding to unsecured creditors. Judge Christine M. Gravelle presides over the Chapter 11 cases. Michael D. Sirota, Esq., David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as the Debtor's counsel. Prime Clerk LLC is the Debtor's claims and noticing agent. Innovation Capital, LLC, acts as the Debtor's investment banker. The petitions were signed by Jeffrey L. Gregg as chief restructuring officer. An official committee of unsecured creditors is represented by David M. Posner, Esq., Jessica M. Ward, Esq., and Kevin Zuzolo, Esq., at Otterbourg P.C. Counsel to the DIP Lender is Ronn S. Davids, Esq., at Venable LLP, in Los Angeles, California. Counsel to Rosenthal & Rosenthal, Inc., as factor under a prepetition factoring agreements is Aaron S. Applebaum, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Wilmington, Delaware. MEE APPAREL: Wins Final Approval of $7MM Suchman DIP Financing -------------------------------------------------------------- Bankruptcy Judge Christine M. Gravelle gave her stamp of approval on the request of MEE Apparel LLC and MEE Direct LLC for a final order: (1) authorizing the Debtors to obtain priming subordinated senior secured super-priority postpetition extensions of credit in an aggregate principal amount not to exceed $7 million, from Suchman, LLC, as DIP lender; (2) authorizing the Debtors to execute and enter into the DIP Credit Agreement and the other DIP Loan Documents and to perform such other and further acts as may be required in connection with the DIP Loan Documents; (3) authorizing the Debtors' use of Cash; (4) granting, to the DIP Lender, certain security interests, liens and superpriority claims pursuant to 11 U.S.C. Section 364, et seq.; (5) validating the Existing Factoring Agreements, the Existing Factoring Facility, and Existing WF Credit Facility as valid, binding and properly perfected obligations of the Debtors, enforceable against the Debtors in accordance with their terms; (6) granting adequate protection; and (7) modifying the automatic stay. The DIP lender is also serving as stalking horse bidder for substantially all of the Debtors' assets at an auction slated later this month. Suchman is one of the Debtors' prepetition lenders, indirect equity owner, and proposed DIP lender. Suchman is owned 100% by Seth Gerszberg, the indirect owner of the Debtor. The Existing WF Credit Facility is the July 2011 credit agreement between the Debtors and Suchman LLC, as successor in interest to Wells Fargo Bank, National Association. An interim hearing on the DIP Motion was held on April 4, 2014 and an order having been entered on April 7 approving the Motion on an interim basis, which allowed the Debtors to use up to $1,836,032 of the loan availability. The final hearing was set for April 21. Several parties have filed objections to the DIP financing. As of the Petition Date, the principal amount of indebtedness owed under the Existing Factoring Agreement to the Existing Factor by the Debtors, exclusive of accrued but unpaid interest, costs, fees and expenses, was approximately $6 million. As of the Petition Date, the principal amount of the Existing WF Credit Facility owed to Suchman, LLC as the successor to the Existing WF Facility Agent and the Existing WF Facility Lenders under the Existing WF Credit Facility by the Debtors, exclusive of accrued but unpaid interest, costs, fees and expenses, was approximately $20.38 million. The DIP Facility matures on the earliest of the date that is six months from the date of the Agreement, the effective date or the substantial consummation of a plan of reorganization, the date of a sale or liquidation of the Equity Interests or the assets of the Borrowers, and the arlier date on which all loans and other obligations for payment of money shall become due and payable. The Final DIP Order incorporates the revised bidding, auction and sale schedules approved by the Bankruptcy Court, and reported elsewhere in today's Troubled Company Reporter. Payments to Existing Factor The Existing Factor is Rosenthal & Rosenthal Inc. The Final DIP Order provides that the Existing Factor will be entitled to have the Debtors pay all reasonable out-of-pocket fees, costs and expenses incurred by the Existing Factor with respect to the Pre- Petition Obligations (including, without limitation, the reasonable fees and disbursements of counsel and other professional advisers advising the Existing Factor, including McElroy, Deutsch, Mulvaney & Carpenter, LLP, and any other professionals retained by the Existing Factor. The Existing Factor's consent for the Debtors to use its Cash Collateral is expressly conditioned upon receipt of payments by the Debtors reducing the total indebtedness of the Existing Factor Lien Claims to $4 million. If the Debtors fail to make any payment by the deadline, unless the Existing Factor agrees in writing otherwise, the Debtors' authority to use the Existing Factor's cash collateral shall be immediately terminated, without requirement of any notice, and the Existing Factor may immediately recommence the automatic sweep from the MEE Corporate Account to the Existing Factor under the Existing Factor Agreements. The Debtors' authorization to continue using the Existing Factor's Cash Collateral shall only be reinstated upon issuance of any missed payment or upon further Court Order. The paydown milestones are: (i) Within two business days following entry of the Interim Order, to the extent not previously received, the Existing Factor shall receive an initial paydown payment of $5,300,000 in good funds, which payment was made on April [3], 2014. (ii) On or before April 12, 2014, the Existing Factor shall receive paydown payments such that the total indebtedness under the Existing Factor Lien Claims shall be reduced to not more than $5.8 million, which payments were made on or before April 12, 2014. (iii) On or before April 26, 2014, the Existing Factor shall receive paydown payments such that the total indebtedness under the Existing Factor Lien Claims shall be reduced to not more than $4.5 million. (iv) On or before May 10, 2014, the Existing factor shall receive paydown payments such that the total indebtedness under the Existing Factor Lien Claims shall be reduced to not more than $4 million. At all times after the total indebtedness under the Existing Factor Lien Claims has been reduced to $4 million or less, and until such time as the obligations under the Existing Factor Agreements are satisfied in full or assigned to and assumed in connection with the Suchman Sale, (A) the Debtors shall maintain a collateral base securing the indebtedness of not less than $1 million in cash collateral (i.e., the Suchman Cash Dominion pledge) and $8 million in inventory and (B) the collection or receipt of any receivables or other sums due to the Debtors by the Existing Factor shall be remitted to the DIP Lender. Sub Rosa Plan Roberta A. DeAngelis, the United States Trustee for Region 3, through counsel, Jeffrey M. Sponder, Esq., objected to the DIP financing motion as well as the proposed sale of the Debtors' assets. "At this time, there is no assurance that the Debtors will confirm a chapter 11 plan. Through the proposed sale and the Interim DIP Order, the Debtors seek to sell substantially all of their assets and grant broad releases to Gerszberg, Suchman and related entities with respect to many causes of action after the expiration of the Committee's challenge period. The result appears to be a sub rosa plan," the U.S. Trustee said. The government watchdog also pointed out that the Debtors seek to transfer personally identifiable information of its customers to Suchman. However, since the Debtors advise their customers that "their personal information will not be disclosed to third-party vendors outside of the Debtors," a consumer privacy ombudsman must be appointed to protect the information. A copy of the U.S. Trustee's objection is available at: http://bankrupt.com/misc/MEEApparel_USTDIPObj.pdf Committee's Objection The Official Committee of Unsecured Creditors objected to the DIP Financing Motion, complaining about the sale-related milestones required by the DIP lender. The Committee said that through the proposed DIP Financing, Seth Gerszberg has dictated a timeline for these cases that appears to be based on nothing more than an arbitrary set of deadlines designed to place maximum pressure on all other parties. The Committee argued that there is no justification for such a compressed time frame that leaves inadequate time to address the concerns of various constituencies. Certain landlords have already objected to the sale and correctly noted that the Bidding Procedures do not afford sufficient time to address adequate assurance of performance or the additional protections afforded to shopping center leases. The Committee also noted that the DIP Final Order, as proposed, requires that the Debtors maintain a collateral base securing the obligations owed to the Factor of not less than $1 million in cash collateral and $8 million in inventory. The Committee said its financial advisors believe that the Debtors may have difficulty maintaining the $8 million inventory level and this is an obvious concern since such levels may not have been necessary if Suchman had not reduced its Cash Dominion pledge. In addition, the Committee has various concerns about certain forecasted payments -- most notably are significant salary payments to Gerszberg family members. The Gerszbergs must cease using their controlled entities as their personal piggy bank and the Committee must analyze the intercompany transactions that have been commonplace for so long. The only way to maximize value for all stakeholders is to slow these cases down and review additional restructuring alternatives. A quick sale to an insider of the Debtors serves no interest other than Gerszberg's own self-interest, the Committee said. Simon Property Group, Inc., filed a limited joinder to the Committee's objection. SPG joins in that portion of the Committee's objection to the DIP Motion that challenges the Debtors' use of default and similar provisions in the DIP facility to justify an expedited time schedule for moving forward to court approval and closing on a 363 sale, including expedited determination of section 365 assumption issues. A copy of the Committee's Objection is available at no charge at: http://bankrupt.com/misc/MEEApparel_CommitteeDIPObj.pdf Debtor's Response The Debtors have acquiesced to the Committee's request and agreed to move certain sale-related deadlines. The Debtors filed with the Court a revised bidding procedures order and a revised Final DIP order to address the objections raised. The Debtors also said the facts of the case "simply do not necessitate the appointment of a consumer privacy ombudsman." A copy of the Debtors' omnibus response to the objections is available at: http://bankrupt.com/misc/MEEApparel_OmnibusResponse.pdf The Final DIP Order provides that (A) the Debtors must maintain a collateral base securing the debt of not less than $1 million in cash collateral (i.e., the Suchman Cash Dominion pledge) and $8 million in inventory and (B) the collection or receipt of any receivables or other sums due to the Debtors by the Existing Factor shall be remitted to the DIP Lender. Committee Probe The Final DIP Order also provides that the extent, validity, priority, perfection and enforceability of the Existing WF Credit Facility are for all purposes subject to the rights of any party in interest, other than the Debtors, to file a complaint pursuant to Bankruptcy Rule 7001, seeking to invalidate, subordinate or otherwise challenge any of the Existing WF Credit Facility; provided, however, that the complaint must be filed in Court before the earlier to occur of (i) five business days prior to the first day on which a hearing to consider confirmation of a plan of reorganization is scheduled by the Court and (ii) June 9, 2014, which date is 60 days from the appointment of the Committee. The DIP Order provides that the Committee may incur up to $25,000 in fees and disbursements that may be reimbursed with proceeds of the DIP Loans for purposes of investigation of any claims against (i) the DIP Lender or its claims or Liens whether under the DIP Credit Agreement or any other DIP Loan Document, and (ii) under the Existing WF Credit Facility or instruments entered into in connection with the foregoing. Macerich Challenge The Macerich Company, parent of Queens Center SPE LLC, objected to the DIP Financing. Macerich, either directly or through its affiliates, leased commercial retail space to the Debtors at five locations on a prepetition basis. Macerich is the owner and landlord of the Queens Center mall located at 90-15 Queens Boulevard, Elmhurst, New York 11373. The Debtors were the former tenant of Space No. 2097 in the Queens Center. Macerich and the Debtors are involved in pre-bankruptcy litigation wherein Macerich seeks immediate possession of the Premises as well as an award against the Debtors for damages. Macerich said that since the Petition Date, they have engaged in a constructive dialogue with the Debtors' bankruptcy counsel regarding a possible consensual resolution of the dispute surrounding the surrender of the Premises. While those discussions are ongoing, Macerich remains concerned that, in light of the failure of the Debtors to reject the Lease, the pendency of the proceeding and the DIP Motion could prejudice Macerich as it waits to obtain final authority to take the steps necessary to re-let the Premises abandoned by the Debtors this past January. The DIP Order provides that upon the occurrence of a Termination Date, the rights of the Existing Factor or DIP Lender to enter onto the Debtors' leased premises are limited to (i) any rights agreed to in writing by the applicable landlord in favor of the Existing Factor or DIP Lender or their designee, whether before or after the Petition Date, including, without limitation, in the governing lease agreement itself or in any landlord waiver or similar agreement), (ii) any rights that Existing Factor and/or DIP Lender have under applicable nonbankruptcy law, if any, or (iii) such rights as may be granted by the Court following an expedited hearing on a separate motion with not less than five business days' notice to the applicable landlords of the leased premises. A full-text copy of the Final DIP Order, including the Debtors' budget through June 28, 2014, is available at no extra charge at: http://bankrupt.com/misc/MEEApparel_FinalDIPOrder.pdf The DIP Lender may be reached at: Suchman LLC 501 Tenth Avenue, Floor 7 New York, NY 10018 Attn: Gregg Donnenfield Tel: 917-262-1000 E-mail: gregg@thecollective.com Counsel for The Macerich Company and Queens Center SPE LLC are: Richard S. Kanowitz, Esq. Ronald Sussman, Esq. Michael Klein, Esq. COOLEY LLP 1114 Avenue of the Americas New York, NY 10036 Tel: (212) 479-6000 Fax: (212) 479-6275 E-mail: rkanowitz@cooley.com rsussman@cooley.com mklein@cooley.com Counsel to Simon Property Group, Inc., is: Brett S. Moore, Esq. PORZIO, BROMBERG & NEWMAN, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, NJ 07962-1997 Tel: 973-889-4231 Fax: 973-538-5146 E-mail: bsmoore@pbnlaw.com About MEE Apparel Founded in 1993 by Marc Ecko, Seth Gerszberg and Marci Tapper, MEE Apparel LLC and MEE Direct LLC are providers of youth apparel and streetwear under the "Ecko Unltd." and "Unltd." brands. Evolving from just six t-shirts and a can of spray paint, MEE has become a full scale global fashion and lifestyle company. In 2013, MEE Apparel generated gross sales of approximately $50 million. MEE Apparel LLC and MEE Direct LLC filed Chapter 11 bankruptcy petitions (Bankr. D.N.J. Case Nos. 14-16484 and 14-16486) on April 2, 2014. The Debtors have suffered declining sales and reduced profitability since the beginning of 2009. As a result, MEE defaulted on a $50 million credit facility with Wells Fargo, N.A. Additionally, the Debtors were unable to meet the terms of their license agreements with the Iconix Joint Venture prompting owner Seth Gerszberg in May 2013 to sell their remaining 49% interest in the Ecko portfolio of brands for $45 million and the assumption of certain debt. Suchman LLC used the proceeds of that sale (i) to pay the WF Facility Lenders and take assignment of the WF Credit Facility and (ii) to provide $12.54 in additional loans to the Debtors. The Debtors have a deal to sell the assets to Gerszberg's Suchman LLC at a bankruptcy court-sanctioned auction. As of the Petition Date, the Debtors had assets of approximately $30 million and liabilities of $62 million, including $25 million of debt outstanding to unsecured creditors. Judge Christine M. Gravelle presides over the Chapter 11 cases. Michael D. Sirota, Esq., David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as the Debtor's counsel. Prime Clerk LLC is the Debtor's claims and noticing agent. Innovation Capital, LLC, acts as the Debtor's investment banker. The petitions were signed by Jeffrey L. Gregg as chief restructuring officer. An official committee of unsecured creditors is represented by David M. Posner, Esq., Jessica M. Ward, Esq., and Kevin Zuzolo, Esq., at Otterbourg P.C. Counsel to the DIP Lender is Ronn S. Davids, Esq., at Venable LLP, in Los Angeles, California. Counsel to Rosenthal & Rosenthal, Inc., as factor under a prepetition factoring agreements is Aaron S. Applebaum, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Wilmington, Delaware. MEE APPAREL: Innovation Capital Approved as Investment Banker ------------------------------------------------------------- Bankruptcy Judge Christine M. Gravelle authorized MEE Apparel LLC and MEE Direct LLC to employ Innovation Capital, LLC as their investment bankers pursuant to 11 U.S.C. Sec. 327(a). As reported by the Troubled Company Reporter on April 24, 2014, the Debtors tapped Innovation to assist them with (i) a sale, merger or acquisition of all of the equity interest in, or substantially all of the assets of the Debtors and (ii) arranging debtor-in-possession financing in connection with the Chapter 11 cases. Postpetition, the Debtors contemplate that Innovation will provide the Debtors advice and assistance in connection with completing the sale transaction, including conducting an auction process in accordance with the Bankruptcy Code to solicit and evaluate indications of interest and proposals. Innovation will be paid according to this scheme: a. Reorganization Fee: The Debtors agree to pay a fee equal to $65,000 upon the earlier to occur of (i) the Bankruptcy Court confirming the Debtors' plan of reorganization, (ii) the closing of a transaction, or (iii) the conversion of the Debtors' Chapter 11 cases to a Chapter 7 liquidation. b. Retainer Fee. Before the Petition Date, the Debtors paid Innovation a nonrefundable retainer fee in the amount of $10,000. Innovation also will seek reimbursement for reasonable out-of- pocket expenses, provided that such amounts will not exceed $10,000 in the aggregate without the prior written consent of the Debtors. If, during the term of the Agreement, and as a result of the efforts and introductions of Innovation, the Company determines to raise external funds or enter into another transaction with any entity contacted by Innovation, the Company is be obligated to compensate Innovation for its services in structuring the other Transaction and introducing the parties. The Company agrees to pay Innovation, or to cause Innovation to be paid, fees comparable to those customarily charged by investment banking firms in similar transactions, such fees to be paid upon the consummation of such transaction. The term of the parties' Agreement will run for a period of six months from the date of entry. The Term may only be extended if mutually agreed upon in writing by Innovation and the Company. Notwithstanding, the provisions on the firm's fees and regarding other transactions will inure to the benefit of Innovation for a period of 12 months from the date of termination, even if the Closing of a Transaction occurs after the expiration or termination of the Agreement. Matthew J. Sodl, the firm's Managing Director, attests that Innovation does not hold or represent any interest adverse to the Debtors, their creditors or estates and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Matthew J. Sodl INNOVATION CAPITAL, LLC 222 North Sepulveda Blvd., Suite 1300 El Segundo, CA 90245 Tel: (310) 335-9333 E-mail: msodl@innovation-capital.com About MEE Apparel Founded in 1993 by Marc Ecko, Seth Gerszberg and Marci Tapper, MEE Apparel LLC and MEE Direct LLC are providers of youth apparel and streetwear under the "Ecko Unltd." and "Unltd." brands. Evolving from just six t-shirts and a can of spray paint, MEE has become a full scale global fashion and lifestyle company. In 2013, MEE Apparel generated gross sales of approximately $50 million. MEE Apparel LLC and MEE Direct LLC filed Chapter 11 bankruptcy petitions (Bankr. D.N.J. Case Nos. 14-16484 and 14-16486) on April 2, 2014. The Debtors have suffered declining sales and reduced profitability since the beginning of 2009. As a result, MEE defaulted on a $50 million credit facility with Wells Fargo, N.A. Additionally, the Debtors were unable to meet the terms of their license agreements with the Iconix Joint Venture prompting owner Seth Gerszberg in May 2013 to sell their remaining 49% interest in the Ecko portfolio of brands for $45 million and the assumption of certain debt. Suchman LLC used the proceeds of that sale (i) to pay the WF Facility Lenders and take assignment of the WF Credit Facility and (ii) to provide $12.54 in additional loans to the Debtors. The Debtors have a deal to sell the assets to Gerszberg's Suchman LLC at a bankruptcy court-sanctioned auction. As of the Petition Date, the Debtors had assets of approximately $30 million and liabilities of $62 million, including $25 million of debt outstanding to unsecured creditors. Judge Christine M. Gravelle presides over the Chapter 11 cases. Michael D. Sirota, Esq., David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as the Debtor's counsel. Prime Clerk LLC is the Debtor's claims and noticing agent. Innovation Capital, LLC, acts as the Debtor's investment banker. The petitions were signed by Jeffrey L. Gregg as chief restructuring officer. An official committee of unsecured creditors is represented by David M. Posner, Esq., Jessica M. Ward, Esq., and Kevin Zuzolo, Esq., at Otterbourg P.C. Counsel to the DIP Lender is Ronn S. Davids, Esq., at Venable LLP, in Los Angeles, California. Counsel to Rosenthal & Rosenthal, Inc., as factor under a prepetition factoring agreements is Aaron S. Applebaum, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, in Wilmington, Delaware. MERCER INT'L: Stendall Mill Gets Waiver for Credit Facilities ------------------------------------------------------------- Mercer International Inc. on May 1 disclosed that in March 2014, the Company's Stendal mill received a waiver under its two term credit facilities to: postpone the testing date of its Senior Debt/EBITDA cover ratio to September 30, 2014 from June 30, 2014 and report thereon by November 15, 2014; extend the date by which a portion of the net proceeds of its recent equity offering must be contributed to Stendal to November 17, 2014; and confirm that any such contributed capital shall qualify as an "equity cure" in the event that the Stendal mill is not in compliance with prescribed financial ratio covenants. The disclosure was made in Mercer International's earnings release for the for the first quarter ended March 31, 2014, a copy of which is available for free at http://is.gd/4FDCEQ Mercer International Inc. -- http://www.mercerint.com-- is a global pulp manufacturing company. MERIT LIFE: A.M. Best Affirms 'B' Financial Strength Rating ----------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B (Fair) and issuer credit ratings of "bb+" of Merit Life Insurance Co (Merit) and Yosemite Insurance Company (Yosemite). The outlook for all ratings is stable. Both companies are headquartered in Evansville, IN. The ratings for Merit and Yosemite reflect the drag of their parent, Springleaf Finance Corp. (SFC) (Evansville, IN), a below investment-grade consumer finance company, whose operating flexibility and business profile have been challenged by the credit crisis of 2008 and the subsequent difficult macroeconomic environment. However, A.M. Best notes that SFC has made progress in recent periods in repaying near-term debt and extending its liquidity run way along with an improving operating performance and the establishment of secured funding facilities (added $1 billion back-up liquidity lines that are currently undrawn) to support loan origination. The company repaid or refinanced $4.7 billion of debt maturing in 2017, using proceeds from personal loans and residential mortgage securitizations and issuances of senior unsecured notes. However, SFC's growing reliance upon secured funding and its uncertain access to the debt capital markets is an ongoing concern. Merit's business is focused on the credit life and accident businesses within SFC. A.M. Best believes that its core credit lines of business may be challenged by the weakened credit profile of SFC. However, A.M. Best notes that premiums have increased noticeably over the past few years due to a slowly improving economy and increased lending activity at SFC. While the absolute level of capital and surplus has declined over the past five-year period at Merit (due to approximately $325 million of stockholder dividends during this time), the company continues to maintain a strong level of risk-adjusted capital and has reduced exposure to less liquid and higher risk assets in its general account investment portfolio over the past year. The company also maintains adequate liquidity to meet its insurance obligations. Also, operating results have remained positive over the past five- year period despite a general decline due to the impact of lower investment income, which can be attributed to a reduced invested asset base resulting from the aforementioned dividends, statutory strain from an increase in new business sales (in recent periods) and fluctuating mortality in its ordinary life insurance line of business. A.M. Best believes operating results may be pressured somewhat over the near term at Merit due to a continued decline in investment income and additional statutory strain from new business sales. The stand-alone attributes of Yosemite are extremely favorable in terms of its strong risk-adjusted capitalization, liquidity and continued outstanding underwriting and operating profitability derived from its credit insurance operations. Yosemite maintains a level of risk-adjusted capitalization that is well supportive of its ratings and continues to produce operating results that significantly outperform its peer composite. Yosemite also maintains liquidity measures above composite averages. The advantages and disadvantages of the company's captive relationship with SFC were additional factors considered in the ratings, which contemplate the potential for any future operational disruption due to Yosemite's dependence on SFC, as its sole source of business and distribution channel. Future financial constraints also were considered in terms of dividends and/or potential divestitures. Rating factors that could cause future positive or negative ratings pressure and/or a revised outlook for Merit and Yosemite are primarily influenced by SFC's financial condition, which is largely tied to its ability to meet upcoming debt maturities and secure long-term funding. However, a continued decline in capital and surplus at Merit due to excessive stockholder dividends also may result in negative ratings pressure. MFM DELAWARE: Court Confirms Amended Chapter 11 Plan ---------------------------------------------------- U.S. Bankruptcy Judge Peter J. Walsh issued an order on April 30, 2014, approving and confirming the Amended Chapter 11 Plan of MFM Delaware Inc. and MFM Industries, Inc. Prior to the Court's entry of its Confirmation Order, the Debtors filed a Notice of Corrected Second Amendment, a copy of which may be accessed for free at http://is.gd/VSviIhwhich contains, among other things, a table of the amounts and class of the Claims of Argosy and Odyssey. The Notice of Second Amendment explained that the Schedules for MFM Industries originally listed the Scheduled Claim as $86,448.11. Industries thereafter objected to the Scheduled Claim and pursuant to a letter agreement dated April 11, 2014, Argosy and the Debtors agreed, among other things, to reduce the Scheduled Claim to $60,000. Under the Settlement, (a) Argosy and Odyssey also agreed to vote in favor of the Plan and support the Plan, and (b) Argosy agreed to accept 90% of the dividend that it would otherwise be entitled to receive for the claims. Additional paragraphs were also added to Sections 8.9, 14.16, and 14.17 of the Plan. Under the Court's Plan Confirmation Order, Matthew A. Crane is appointed to serve as the Distribution Agent in accordance with the terms of the Plan. The Debtors' Assets and Liabilities, including Claims, are not being substantively consolidated. Each Debtor remains responsible for the payment of quarterly fees pursuant to 28 U.S.C. Section 1930 to the Office of the U.S. Trustee until such time as a particular case is closed, dismissed or converted. The Plan Confirmation Order also provides that on the Effective Date, the Assets of the Debtors will automatically revest in the Debtors, free and clear of all claims, liens, charges or other encumbrances. The issuance, transfer or exchange of a security, or the making or delivery of an instrument of transfer of the Plan, including, without limitation, the sale of certain parcels of real property commonly known as 3951 W. Highway 329, Reddick, Marion County, Florida, or any other sale of the Florida Real Property that may be later approved by the Court, in the event the Sale Transaction fails to close, will not be taxed under any law imposing a stamp tax or similar tax. Any objection to confirmation of the Plan that have not been withdrawn prior to the entry of the Confirmation Order are overruled in their entirety, and any withdrawn objection are deemed withdrawn with prejudice. A full-text copy of the Plan Confirmation Order may be accessed for free at http://is.gd/a0WNW9 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. The Rosner Law Group, LLC and King & Spalding LLP represent the Debtors. Pharus Securities, LLC, serves as the Debtors' 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. MFM DELAWARE: Settlement Resolving Spitfire Claims Gets Court OK ---------------------------------------------------------------- U.S. Bankruptcy Judge Peter J. Walsh approved a settlement between Debtors MFM Delaware, Inc. and MFM Industries, Inc. and Spitfire Global, Inc. MFM Industries and Spitfire Global were parties to a prepetition commission agreement, dated October 4, 2010, and a consulting agreement, under which MFM Industries agreed to pay commissions to Spitfire calculated based on particular formulas with regard to certain products sold and to pay Spitfire monthly consulting payments for assisting with the development of new products. Spitfire holds a proof of claim (Claim No. 23), which asserts that the amount owed for commissions and consulting payments under the Agreements was $237,062 as of the Petition Date. As part of the Debtors' Second (Substantive) Omnibus Objection to Claims, the Debtors objected to the Spitfire Claim and sought to have the claim reduced to $70,000 and the priority status of the claim modified to general unsecured. Spitfire also holds a claim against MFM Delaware arising from a promissory note. MFM Delaware scheduled this claim as undisputed, in the amounts of $72,636.61 and $28,576.39. Pursuant to the Spitfire Settlement, Spitfire and the Debtors have agreed to the entry of an order (the Objection Order) resolving the Second Omnibus Objection. The Objection Order would allow the Spitfire Claim in the amount of $152,500, with $12,000 of that amount being entitled to priority treatment and classified for voting and distribution purposes as a Class 2 claim under the Debtors' proposed Chapter 11 Plan, and the remaining $140,500 being entitled to general unsecured treatment and classified for voting and distribution purposes as a Class 3(a) claim under the Debtors' proposed Chapter 11 Plan. Spitfire has also agreed to waive any distribution that may be made under the Debtors' Chapter 11 Plan on account of the Scheduled Claims or with regard to any other claim held by Spitfire against MFM Delaware, and has agreed that the Objection Order will deem the Scheduled Claims fully satisfied. 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. The Rosner Law Group, LLC and King & Spalding LLP represent the Debtors. Pharus Securities, LLC, serves as the Debtors' investment banker. 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. The Court confirmed the Debtors' Amended Plan on April 30, 2014. 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. MID-EASTERN ASSOCIATES: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Mid-Eastern Associates, L.L.C. 1353 South Military Highway Chesapeake, VA 23320 Case No.: 14-71651 Chapter 11 Petition Date: May 2, 2014 Court: United States Bankruptcy Court Eastern District of Virginia (Norfolk) Judge: Hon. Frank J. Santoro Debtor's Counsel: George Minor, Jr., Esq. 539 High Street P.O. Box E Portsmouth, VA 23705 Tel: (757) 399-6389 Fax: (757) 399-1378 Email: georgeminorjr@verizon.net Estimated Assets: not indicated Estimated Liabilities: not indicated The Debtor did not file a list of its largest unsecured creditors when it filed the petition. MMODAL HOLDINGS: U.S. Trustee Appoints 3-Member Creditors' Panel ---------------------------------------------------------------- William K. Harrington, the United States Trustee for Region 2, notified the U.S. Bankruptcy Court for the Southern District of New York that he has appointed three members to the official committee of unsecured creditors in Legend Parent, Inc., et al.'s Chapter 11 cases. The Committee members are: (1) US Bank National Association, as Trustee Global Corporate Trust Services 60 Livingston Avenue St. Paul, Minnesota 55107 Attention: Julie J. Becker, Vice President Telephone: (651) 466-5869 Email: Julie.Becker@usbank.com (2) Advanced Media, Inc. 6F Sunshine City Bunka Kaikan 3-1-4 Higashi-Ikebukuro Toshima-ku, Tokyo, Japan 170-8630 Attention: Masaki Honda, Executive Officer Telephone: +81-3-5958-1031 Email: m-honda@advanced-media.co.jp (3) Astor Crowne Plaza Hotel c/o LNR Property LLC 1140 Avenue of the Americas, 5th Floor New York, NY 10036 Attention: Jerry Hirschkorn, Assistant General Counsel Telephone: (305) 695-5904 Email: jhirschkorn@lnrproperty.com U.S. Bank and Advanced Media are listed as one of the Debtors' largest unsecured creditors. U.S. Bank holds claims totaling $265.9 million, while Advanced Media holds claims totaling $2.2 million. The Creditors' Committee is represented by: Kristopher M. Hansen, Esq. Frank A. Merola, Esq. Matthew G. Garofalo, Esq. STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038-4982 Telephone: (212) 806-5400 Facsimile: (212) 806-6006 Email khansen@stroock.com fmerola@stroock.com mgarofalo@stroock.com FTI Consulting serves as financial advisor to the Creditors' Committee. Michael Diaz -- matt.diaz@fticonsulting.com -- a senior managing director at FTI, leads the team. The U.S. Trustee is represented by Andrea B. Schwartz, Esq., Trial Attorney, in New York. About M*Modal Headquartered in Franklin, Tennessee, M*Modal provides clinical documentation solutions for the U.S. healthcare industry. It has operations in six countries and employs more than 9,900 employees, most of whom are medical transcriptionists or medical editors. M*Modal, a medical-services company owned by J.P. Morgan Chase Co.'s private-equity arm, filed for Chapter 11 bankruptcy protection, following a decline in sales and mounting debt. MModal disclosed $627 million in total assets and $876 million in total liabilities as of Feb. 28, 2014. Legend Parent Inc. and other M*Modal entities, including MModal Inc., sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-10701) on March 20, 2014. The Debtors have tapped Dechert LLP as attorneys, Alvarez & Marsal North America, LLC, as restructuring advisor, Lazard Freres & Co LLC as investment banker, Deloitte Tax LLP as tax advisor, and Prime Clerk LLC as claims and noticing agent, and administrative advisor. A Steering Committee for Secured Lenders under the Prepetition Credit Agreement is represented by Richard Levy, Esq., at Latham & Watkins LLP. An Ad Hoc Committee of certain unaffiliated holders of (i) the Term B loan under the Prepetition Credit Agreement and (ii) Notes issued under the Indenture is represented by Michael Stamer, Esq., and James Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Royal Bank of Canada is administrative and collateral agent to a consortium of lenders who committed to provide $30 million in postpetition financing to the Debtors. The DIP Agent and the Administrative Agent under the Credit Facility is represented by Richard A. Levy, Esq. -- richard.levy@lw.com -- at Latham & Watkins LLP, in Chicago, Illinois. MMODAL HOLDINGS: May 6 Hearing on Proposed $30MM DIP Financing -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on May 6, 2014 at 10:00 a.m. (Eastern Time), to consider approval of Legend Parent, Inc., et al.'s request for authority to obtain postpetition financing in an original principal amount of $30 million and use cash collateral securing their prepetition indebtedness. Royal Bank of Canada serves as administrative agent and collateral agent on behalf of a syndicate of financial institutions. RBC also serves as administrative agent under the Debtors' prepetition credit facility consisting of a $75 million revolving facility and a $445 million term loan. As of the Petition Date, the Debtors were indebted to the prepetition secured parties in the aggregate principal amount of approximately $75 million under the revolving credit commitment, and approximately $424.6 million under the term loan. All amounts outstanding under the DIP Facility will bear interest at, for Eurodollar Loans, LIBOR plus 7.95% with a LIBOR floor of 1.5% and for Base Rate Loans, the Base Rate plus 6.95% with a Base Rate floor of 2.5%. Under the DIP Loans, the Debtors are required to obtain an order approving the disclosure statement explaining a plan of reorganization on or before June 4, and obtain an order confirming the plan on or before July 16. The Debtors are also required to have consummated their Plan on or before Aug. 15. Brandon Aebersold, a managing director in the restructuring group of Lazard Freres & Co. LLC, said in court papers that the Debtors need to obtain access to the DIP Financing and cash collateral to permit, among other things, the orderly continuation of the operation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll, and to satisfy other working capital and operational needs, including to address potential adverse impact on their business and operations relating to the filing of the Chapter 11 cases. Mr. Aebersold added that the bank group, prior to the Petition Date, already provided the Debtors with a term sheet for a DIP term loan. The bank group has advised the Debtors that they would not consent to the granting of senior or pari passu liens to a third party DIP lender. The Debtors are represented by Allan S. Brilliant, Esq., Shmuel Vasser, Esq., and Jeffrey T. Mispage, Esq., at DECHERT LLP, in New York. The Official Committee of Unsecured Creditors is represented by Kristopher M. Hansen, Esq., Frank A. Merola, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, in New York. The DIP Agent and to the Administrative Agent under the Credit Facility is represented by Richard A. Levy, Esq. -- richard.levy@lw.com -- at Latham & Watkins LLP, in Chicago, Illinois. Counsel to the holders of the majority of the Notes under the Indenture is Michael S. Stamer, Esq. -- mstamer@akingump.com -- and James Savin, Esq. -- jsavin@akingump.com -- at Akin Gump Strauss Hauer & Feld LLP, in New York. About M*Modal Headquartered in Franklin, Tennessee, M*Modal provides clinical documentation solutions for the U.S. healthcare industry. It has operations in six countries and employs more than 9,900 employees, most of whom are medical transcriptionists or medical editors. M*Modal, a medical-services company owned by J.P. Morgan Chase Co.'s private-equity arm, filed for Chapter 11 bankruptcy protection, following a decline in sales and mounting debt. MModal disclosed $627 million in total assets and $876 million in total liabilities as of Feb. 28, 2014. Legend Parent Inc. and other M*Modal entities, including MModal Inc., sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-10701) on March 20, 2014. The Debtors have tapped Dechert LLP as attorneys, Alvarez & Marsal North America, LLC, as restructuring advisor, Lazard Freres & Co LLC as investment banker, Deloitte Tax LLP as tax advisor, and Prime Clerk LLC as claims and noticing agent, and administrative advisor. A Steering Committee for Secured Lenders under the Prepetition Credit Agreement is represented by Richard Levy, Esq., at Latham & Watkins LLP. An Ad Hoc Committee of certain unaffiliated holders of (i) the Term B loan under the Prepetition Credit Agreement and (ii) Notes issued under the Indenture is represented by Michael Stamer, Esq., and James Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. The U.S. Trustee for Region 2 has appointed three members to the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Frank A. Merola, Esq., and Matthew G. Garofalo, Esq., at STROOCK & STROOCK & LAVAN LLP, in New York, serve as counsel to the Committee. Michael Diaz of FTI Consulting leads the team of financial advisors to the Creditors' Committee. MOMENTIVE SPECIALTY: Moody's Affirms 'B3' CFR; Outlook Negative --------------------------------------------------------------- Moody's Investors Service affirmed Momentive Specialty Chemicals Inc's (MSC) corporate family rating (CFR) at B3 but changed the ratings outlook to negative due to weak credit metrics and the expectation that credit metrics will not return to levels fully supportive of the B3 Corporate Family Rating in 2014. While a modest improvement in financial metrics is expected due to the continued recovery in its North American Forest Products business and growth in its oil field services business, MSC's Net Debt/EBITDA is likely to remain near 8x in 2014. As described in Moody's press release dated January 16, 2013, the ratings on Momentive's secured notes should have been lowered upon the issuance of the additional first lien notes in March 2013. However, due to an internal administrative error, these ratings were not lowered at that time. Accordingly, the ratings were downgraded on Hexion U.S. Finance Corp.'s (HUSFC) 6.625% first- priority senior secured notes due 2020 to B1 from Ba3, MSC's 8.875% senior secured notes due 2018 (1.5 lien notes) to Caa1 from B3 and MSC's 9.0% second-priority senior secured notes due 2020 to Caa2 from Caa1. The rating on the second priority senior secured floating rate debt was withdrawn following its redemption in March 2013. Ratings Rationale MSC's B3 Corporate Family Rating reflects its elevated leverage, exposure to volatile commodities and the lack of consistent free cash flow generation. The rating benefits from its strong liquidity, product and operational diversity, a seasoned management team and a growing presence in Asia and Latin America (although North America and Europe still account for over 70% of sales). The rating continues to be hindered by an ongoing slow business recovery resulting in elevated leverage (Gross Debt/EBITDA of roughly 10x) and minimal free cash flow generation (Retained Cash Flow/Debt of 4% in 2013). The aforementioned metrics reflect Moody's Global Standard Adjustments which include the capitalization of pensions ($209 million) and operating leases ($219 million).These metrics are likely to improve but remain weak through 2014, as the secular weakness in epoxy resins continues to outweigh the benefits from a recovering forest products business and growth in its oilfield and phenolic resins businesses. The B3 rating assumes that 2013 was a trough, and will be followed by a gradual recovery in 2014 and 2015. The negative outlook reflects MSC's extremely weak financial metrics and concern over the pace at which financial metrics will return levels that support a B3 CFR (Net Debt/EBITDA between 6 and 7x). Furthermore, MSC expected increase in capital spending in 2014 will limit potential free cash flow generation and debt reduction in 2014. If MSC's Net Debt/EBITDA remains above 8.0x in 2014, and liquidity declines below $400 million, Moody's would consider lowering MSC's CFR by one notch. If Net Debt/EBITDA declines sustainably below 7.5x and Retained Cash Flow/Net Debt rises above 5%, Moody's would return MSC's outlook to stable. MSC Speculative Grade Liquidity Rating of SGL-2 reflect its good liquidity with $379 million of cash on the balance sheet and over $300 million of availability under its $400 million ABL revolving credit facility. The ABL facility will not have a financial covenant until availability falls below 10%. The company does not have any meaningful long term debt maturities prior to 2018. Ratings Affirmed: Momentive Specialty Chemicals Inc. Corporate Family Rating at B3 Probability of Default Rating at B3-PD Speculative Grade Liquidity Rating of SGL-2 Borden Chemical Senior unsecured notes at Caa2 (LGD6, 94%), assessment changed from 91% Ratings Downgraded: Momentive Specialty Chemicals Inc. Guaranteed senior secured notes (1.5 lien) due 2018 to Caa1 (LGD4, 60) from B3 (LGD4, 52%) $200 million add-on guaranteed senior secured notes (1.5 lien) due 2018 to Caa1 (LGD4, 60) from B3 (LGD4, 52%) Guaranteed senior secured second lien notes due 2020 to Caa2 (LGD5, 81) from Caa1 (LGD5, 77%) Hexion U.S. Finance Corp. Guaranteed senior secured first lien notes due 2020 to B1 (LGD2, 24) from Ba3 (LGD2, 18%) Outlook: Negative Momentive Specialty Chemicals, Inc. (MSC; formerly known as Hexion Specialty Chemicals Inc.), headquartered in Columbus, Ohio, is a major producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A (BPA), epichlorohydrin (ECH), versatic acid and related derivatives. Revenues are approximately $4.9 billion. MSC is an indirect wholly-owned subsidiary of Momentive Performance Materials Holdings LLC (MPMH, unrated), headquartered in Columbus Ohio. The majority owner of MPMH is an affiliate of Apollo Management. MPMH is also the parent of Momentive Performance Materials Inc (MPM; ratings withdrawn). NE OPCO: Hearing Today on Bid to Extend Exclusivity --------------------------------------------------- NE OPCO, Inc., asks the Bankruptcy Court for an extension of the exclusive periods within which to file an exit plan and solicit acceptances. The Debtors ask the Court to extend the exclusive periods to July 7, 2014 and September 3, 2014, respectively. The Debtors state that there is cause for the Court to extend the exclusive period. The Debtors assert that they need more time to evaluate their financial standing and the proofs of claim filed by creditors and other parties in interest in an effort to determine the most appropriate process going forward. The Debtors further state that if they pursue a Chapter 11 plan, they will seek to do so with the support of the major constituencies in these Chapter 11 Cases. The Debtors emphasize that establishing the framework for a consensual plan process will require further time and negotiations among the parties. Moreover, the Debtors state that their operations were expansive, spanning numerous states throughout the United States and therefore need an extension. The Debtors further assert that they have made significant and material progress in these Chapter 11 Cases and do not seek the extension of the exclusive periods as a means to exert pressure on the relevant parties in interest. The Debtors say that, under the relevant facts and circumstances of these Chapter 11 Cases, the requested extension will not prejudice the legitimate interests of postpetition creditors, as the Debtors continue to make timely payments on their undisputed postpetition obligations. The Bankruptcy Court for the District of Delaware set a hearing on this issue for May 5, 2014 at 11:00 a.m. Eastern Daylight Time. Objections were due April 22. About NE OPCO, Inc. National Envelope is the largest privately-held manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the 2013 case, the company tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq., Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J. Keane, Esq. Guggenheim Securities, LLC, serves as its investment banker and financial advisor. National Envelope won court approval on July 19, 2013, for a global settlement permitting a sale of the company without objection from the official unsecured creditors' committee. The settlement ensures some recovery for unsecured creditors. The Company also won final approval for $67.5 million in bankruptcy financing being supplied by Salus Capital Partners LLC. Judge Christopher Sontchi authorized three buyers to acquire National Envelope's business for a total of about $70 million. Connecticut-based printer Cenveo Inc. acquired National Envelope's operating assets for $25 million, Hilco Receivables LLC picked up accounts receivable for $25 million and Southern Paper LLC took on its inventory for $15 million. NEWLEAD HOLDINGS: MGP Seeks Add'l 6.5MM Settlement Shares --------------------------------------------------------- MG Partners Limited, on April 30, 2014, requested 6,590,000 additional settlement shares pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York. Following the issuances of the amounts, the Company will have approximately 71,999,215 shares outstanding, which outstanding amount includes recent share issuances related to partial exercises of outstanding warrants and partial conversions of outstanding preferred stock. On Dec. 2, 2013, the Supreme Court of the State of New York, County of New York, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement among NewLead Holdings Ltd., Hanover Holdings I, LLC, and MG Partners Limited, in the matter entitled Hanover Holdings I, LLC v. NewLead Holdings Ltd., Case No. 160776/2013. Hanover commenced the Action against the Company on Nov. 19, 2013, to recover an aggregate of $44,822,523 of past-due indebtedness of the Company, which Hanover had purchased from certain creditors of the Company pursuant to the terms of separate purchase agreements between Hanover and each of those creditors, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company, Hanover and MGP upon execution of the Order by the Court on Dec. 2, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on Dec. 2, 2013, the Company issued and delivered to MGP, as Hanover's designee, 175,000 shares (adjusted to give effect to a 1 for 10 reverse stock split effective March 6, 2014) of the Company's common stock, $0.01 par value. Between Jan. 3, 2014, and April 25, 2014, the Company issued and delivered to MGP an aggregate of 17,110,000 (adjusted to give effect to a 1 for 10 reverse stock split effective March 6, 2014) Additional Settlement Shares pursuant to the terms of the Settlement Agreement approved by the Order. A copy of the Form 6-K is available for free at: http://is.gd/WDtshk Delays 2013 Annual Report NewLead Holdings said it has been unable to complete its annual report on Form 20-F for the fiscal year ended Dec. 31, 2013, on a timely basis, without unreasonable effort or expense, due to the Company's recent change in independent registered public accounting firm and the associated transition. The Company intends to file its annual report on Form 20-F no later than the 15th calendar day following the prescribed due date. The Company expects that net loss attributable to NewLead Holdings' shareholders for the year ended Dec. 31, 2013, will be at least 61 percent lower than net loss attributable to NewLead Holdings' shareholders for the same period in 2012, primarily due to the results of the Company's restructuring transactions and shares issued in connection with the settlement of outstanding liabilities during 2012. These results were partially offset mainly by various expenses recognized during the year ended Dec. 31, 2013, in relation to the Company's efforts to implement its business plan, a major part of which is its vertical integration strategy. The Company expected net loss is subject to change as the Company is still in process of completing its annual financial statements. About NewLead Holdings Based in Athina, Greece, NewLead Holdings Ltd. -- http://www.newleadholdings.com/-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. Newlead Holdings incurred a net loss of $403.92 million on $8.92 million of operating revenues for the year ended Dec. 31, 2012, as compared with a net loss of $290.39 million on $12.22 million of operating revenues for the year ended Dec. 31, 2011. The Company incurred a net loss of $86.34 million on $17.43 million of operating revenues in 2010. As of June 30, 2013, the Company had $84.27 million in total assets, $166.18 million in total liabilities and a $81.91 million total shareholders' deficit. Going Concern Doubt PricewaterhouseCoopers S.A., in Athens, Greece, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities, all of which raise substantial doubt about its ability to continue as a going concern. NIELSEN FINANCE: Moody's Rates $394MM Senior Secured Debt 'Ba1' --------------------------------------------------------------- Moody's Investors Service assigned Ba1 to the new Senior Secured Euro Term Loan due 2021 ($394 million or 286 million euros) issued by Nielsen Finance LLC, an indirect subsidiary of Nielsen Holdings N.V. ("Nielsen"). The new term loan effectively extends the maturity of the prior senior secured euro term loan due 2016. The company also upsized the senior secured term loan A by $280 million to $1.58 billion from $1.3 billion and the additional proceeds were used to partially redeem the 7.75% senior notes. All other ratings including the Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating as well as the positive outlook are unchanged. Assigned: Issuer: Nielsen Finance LLC NEW Senior Secured Euro Term Loan B-2 due 2021 ($394 million or 286 million euros): Assigned Ba1, LGD2 -- 25% Unchanged: Issuer: Nielsen Holdings N.V. Corporate Family Rating (CFR): Ba3 Probability of Default Rating (PDR): Ba3-PD Speculative Grade Liquidity (SGL) Rating: SGL -- 1 Issuer: Nielsen Company (Luxembourg) S.a.r.l., The Senior Unsecured Notes: B1, LGD5 -- 80% (from LGD5-78%) Issuer: Nielsen Finance LLC Senior Secured Bank Credit Facility: Ba1, LGD2-25% (from LGD2-23%) Senior Unsecured Notes: B1, LGD5-80% (from LGD5-78%) To be withdrawn: Issuer: Nielsen Finance LLC EXISTING Senior Secured Bank Credit Facility (Class E Euro Term Loan) due 2016: Ba1, LGD2-23% The last rating action was on March 28, 2014, which provides details regarding Nielsen's recent refinancing including the existing senior secured Euro credit facility (class E Euro tem loan) being upgraded to Ba1 from Ba2 and the $1.3 billion senior secured term loan A being assigned a Ba1. Nielsen Holdings N.V., headquartered in Diemen, The Netherlands and New York, NY, is a global provider of consumer information and measurement that operates in approximately 100 countries. Nielsen's Buy segment (roughly 60% of FY 2013 revenue) consists of two operating units: (i) Information, which includes retail measurement and consumer panel services; and (ii) Insights, which provide analytical services for clients. The Watch segment (40% of revenue) provides viewership data and analytics across television, online and mobile devices for the media and advertising industries. Revenue for the 12 months ended December 2013 was roughly $5.7 billion. NNN 123 NORTH WACKER: Files Sale-Based Bankruptcy Exit Plan ----------------------------------------------------------- NNN 123 North Wacker, LLC -- "TIC 0" -- and NNN 123 North Wacker Member LLC -- "TIC Member" -- on April 25 filed with the Bankruptcy Court for the Northern District of Illinois their joint plan of reorganization and explanatory disclosure statement. The Plan provides for the sale of the Debtors' property through competitive bidding and an auction process. The Bid/Sale Procedures are subject to Court approval. The Debtors noted that over the course of the next several months after filing for bankruptcy, they engaged in restructuring discussions with Wells Fargo Bank N.A., which holds approximately $135 million in principal amount of mortgage debt secured by a first-lien against the Property. On Feb. 21, 2014, the Debtors, Wells Fargo, and two proposed new capital providers executed a restructuring support agreement. The Court approved the RSA by order dated April 17, 2014. NNN 123 North Wacker -- "TIC 0" -- and NNN 123 North Wacker Member -- "TIC Member" -- are each duly organized as Delaware limited liability companies. TIC 0 was formed on Aug. 8, 2005. TIC Member was formed on Sept. 13, 2005. TIC Member is the sole member of TIC 0 and owns 100% of the membership interests of TIC 0. TIC Member's principal asset is its 100% ownership of TIC 0. TIC 0's principal asset is its interest in the real property located at 123 N. Wacker Drive, Chicago, Illinois, as improved by a 30- story Class A office building with approximately 541,000 rentable square feet. TIC 0 is one of 33 single purpose limited liability companies that, together, hold 100% of fee title to the Property as tenants in common. TIC 0 owns an undivided 13.917% interest in the Property, making it the single largest owner. The Property is currently managed by TNP. The TICs purchased the Property in September 2005 for a purchase price of approximately $175 million. The purchase was financed through a two-tranche mortgage loan in the total principal amount of $136 million. The Loan was evidenced by (i) a promissory note in the principal amount of $122 million -- "A Note" -- and (ii) a promissory note in the principal amount of $14 million -- "B Note". Wells Fargo serves as (i) the trustee and successor collateral agent for the registered holders of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2005-C4 (in such capacity, the "A Note Holder"); and (ii) the trustee for the beneficial owners of N-Star REL CDO VI Grantor Trust, Series H (in such capacity, the "B Note Holder"). As of the Petition Date the Loan was administered by C-III Asset Management LLC, as special servicer. The Loan is currently administered by LNR Partners LLC, as special servicer. The Plan contemplates: -- The sale of the Property, subject to competitive bidding and an auction process, all according to such terms and conditions as are approved by the Bankruptcy Court. -- The "stalking horse" bidder will be a new Delaware limited liability company, 123 North Wacker Borrower, LLC. It is referred to in the Plan as the "Approved Purchaser." -- The Approved Purchaser will be ultimately managed by an entity that is owned 90% by ND Investment-123 N. Wacker-T, LLC. The other 10% (excluding the percentage currently held by TIC 0) is being offered to those non- debtor TICs (the "Non-Debtor TICs") that consent to the transaction and elect to invest additional money. -- If the Non-Debtor TICs do not subscribe fully for their pro rata share of equity, Sovereign Capital Management Group, Inc. has committed to purchase any of the remaining 10%. -- The proposed sale will remove the Property from its tenant in common structure. In the event that the Approved Purchaser acquires the Property: -- The Approved Purchaser will assume the mortgage loan, as modified by agreement between the Approved Purchaser and the lender, which will be the treatment of the Allowed Noteholder Secured Claim. -- The Approved Purchaser will contribute $12 million to $15 million of new equity capital, which, after payment of certain transaction costs, will be used to pay leasing commissions, tenant improvements, deferred maintenance and other operating expenditures required to implement the new business plan and increase revenues. -- The Approved Purchaser will provide for the payment in full, in cash, of Administrative Claims, Priority Tax Claims, Other Priority Claims and General Unsecured Claims, in each case to the extent such Claims are Allowed Claims in amounts consistent with the Debtors' estimates provided in the Plan. -- The equity of TIC Member and TIC 0 shall remain intact. -- Those Non-Debtor TICs that consent to the transaction will be given the option to either (1) invest additional money to acquire their pro rata share of 10% (excluding the percentage currently held by TIC 0) of the equity of the ultimate manager parent of the Approved Purchaser, or (2) for those that do not want to invest additional money, they will have the option to exchange their existing tenant in common interests in the Property for limited interests in the parent of the Approved Purchaser, the intent of such exchange being to allow such Non-Debtor TICs to continue to defer gains on previous real estate sales. -- Those Non-Debtor TICs that consent to the transaction will benefit from a "covenant not to sue" in the modified loan documents, pursuant to which the Noteholder will agree not to seek to enforce its remedies for any defaults that occurred under the Loan at any time prior to closing of the proposed transaction, which, pursuant to the RSA, is to be on or before July 15, 2014 (unless the date is extended by up to two weeks pursuant to the applicable provisions of the RSA). -- Sovereign will also provide a customary non-recourse carve-out guaranty of the mortgage debt, which was approved by the Noteholder and is further credit support for the Non-Debtor TICs. In the event that a bidder other than the Approved Purchaser acquires the Property: -- Unless the Noteholder consents to other treatment, such successful bidder must pay the Allowed Noteholder Secured Claim in full, in cash, at closing. -- Unless the Holder of an Allowed Administrative Claim consents to other treatment, the successful bidder must pay such claim in full, in cash, at closing. -- After payment in full of the Allowed Noteholder Secured Claim, the payment of amounts permitted to be paid out of the Overbid Reserve, and payment of Allowed Administrative Claims, the remaining proceeds of the sale, if any, shall be applied: * first, to satisfy Allowed Priority Tax Claims; * second, to satisfy Allowed Other Priority Claims; * third, to satisfy Allowed General Unsecured Claims; * fourth, shall be distributed to the holder of equity interest of TIC 0; and * fifth, shall be distributed to the holders of equity interests of TIC Member. Following the application of proceeds, all Claims and Interests shall be extinguished. The Debtors submit that the Plan maximizes the value of the Debtors' Estates and that any alternative to confirmation of the Plan, such as liquidation or an alternative plan of reorganization, would result in significant delays, litigation and additional costs. The Debtors believe that the Plan's contemplated reorganization is in the best interests of their Creditors and Interest Holders. If the Plan were not to be confirmed, the Debtors believe they may be forced to liquidate under chapter 7 or 11 of the Bankruptcy Code. Only the Holders of the TIC 0 Class 2 Noteholder Secured Claim are impaired and entitled to vote on the Plan. They may submit their ballots to: D. Tyler Nurnberg, Esq. Seth J. Kleinman, Esq. KAYE SCHOLER LLP 70 West Madison Street, Suite 4200 Chicago, IL 60602-4231 E-mail: tyler.nurnberg@kayescholer.com seth.kleinman@kayescholer.com While the Holders of the TIC 0 Class 2 Noteholder Secured Claim are projected to recoup 100% of their Claims, the Plan provides that in treatment of an Allowed Noteholder Secured Claim, (X) in the event that the Approved Purchaser is the Purchaser, then, in connection with the transfer of the Property to the Approved Purchaser on the Effective Date, the Approved Purchaser shall, on the Effective Date, assume the Loan as modified pursuant to the Loan Modification Documents and execute and deliver the Loan Modification Documents to Noteholder and otherwise satisfy the conditions precedent set forth in the Loan Modification Documents and, in exchange, the Noteholder shall, subject to satisfaction of the Noteholder Conditions Precedent, and subject to the Approved Purchaser taking these actions: (i) consent to the modifications to the Loan Documents set forth in the Loan Modification Documents, (ii) consent to the Approved Purchaser acquiring 100% fee title to the Property and assuming the Loan Documents as modified by the Loan Modification Documents, and (iii) consent to consideration under the Plan being distributed to other classes of Claims and Interests as set forth; or (Y) in the event that a Non- Proposed Purchaser is the Purchaser, then, on the Effective Date, the Noteholder shall receive (i) payment in Cash of the Sale Proceeds in an amount equal to the Allowed Noteholder Secured Claim, or (ii) such other treatment as may be agreed in the Noteholder's sole discretion. However, if the Noteholder is the Purchaser of the Property as a result of a Credit Bid, the Noteholder shall not be entitled to a Cash payment on account of its Allowed Noteholder Secured Claim and the Allowed Noteholder Secured Claim shall be satisfied, settled, released, and discharged of and exchanged for 100% fee title to the Property. For the avoidance of doubt, the Noteholder shall have the absolute sole discretion to decline any requested assumption of the Loan in connection with a bid for the purchase of the Property from a Non-Proposed Purchaser. The manager of the Debtors, NNN Realty Investors, LLC, has approved solicitation procedures for the Plan. Wells Fargo is represented in the case by: Thomas S. Kiriakos, Esq. Aaron Gavant, Esq. MAYER BROWN LLP 71 S. Wacker Drive Chicago, IL 60606 Tel: 312-782-0600 E-mail: tkiriakos@mayerbrown.com agavant@mayerbrown.com - and - W. Michael Bond, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: 212-310-8000 Fax: 212-310-8007 E-mail: michael.bond@weil.com - and - Elisa R. Lemmer, Esq. WEIL, GOTSHAL & MANGES LLP 1395 Brickell Avenue, Suite 1200 Miami, FL 33131 Tel: 305-577-3100 Fax: 305-374-7159 E-mail: elisa.lemmer@weil.com The TIC Members are represented by: Emily Stone, Esq. LOEB & LOEB LLP Chicago, Illinois 321 North Clark Street, Suite 2300 Chicago, IL 60654 Tel: 312-464-3100 Fax: 312-464-3111 E-mail: estone@loeb.com - and - Bernard R. Given II, Esq. LOEB & LOEB LLP 10100 Santa Monica Boulevard, Suite 2200 Los Angeles, CA 90067 Tel: 310-282-2000 Fax: 310-282-2200 E-mail: bgiven@loeb.com Troy Thomas, a member of NNN 123 North Wacker, LLC, is represented by Stephen T. Bobo, Esq., and Theresa Davis, Esq., at Reed Smith LLP, in Chicago, Illinois. May 19 Disclosure Statement Hearing The Debtors are asking the Court to approve the Disclosure Statement and set these Plan-related deadlines: -- May 12, 2014 Disclosure Statement Objection Deadline -- May 16, 2014 Disclosure Statement Reply Deadline -- May 19, 2014 Voting Record Date -- May 19, 2014 Disclosure Statement Hearing -- May 20, 2014 Distribution of Solicitation Package -- June 17, 2014 Voting Deadline -- June 17, 2014 Plan Objection Deadline -- June 20, 2014 Deadline to File Affidavit of Tabulation of Votes -- June 26, 2014 Deadline for Debtors' Reply in Support of Confirmation -- June 30, 2014 Confirmation Hearing A copy of the Disclosure Statement and Plan is available at: http://bankrupt.com/misc/NNN123_204_ds.pdf About NNN 123 North Wacker 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 D. Tyler Nurnberg, Esq., Daniel J. Hartnett, Esq., and Seth J. Kleinman, 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. Bankruptcy Judge Jack B. Schmetterer oversees the cases. NNN 123 NORTH WACKER: Seeks Approval of Bid/Sale Protocol --------------------------------------------------------- The Joint Plan of Reorganization filed by NNN 123 North Wacker, LLC -- "TIC 0" -- and NNN 123 North Wacker Member LLC -- "TIC Member" -- provides for the sale of the Debtors' property through competitive bidding and an auction process. The Debtors The Debtors will appear before the Hon. Jack B. Schmetterer in Bankruptcy Court in Chicago at a hearing on May 15, 2014, at 1:30 p.m. (prevailing Central Time), to seek approval of bidding and sale procedures. Any objections to the procedures are due May 5. Replies, if any, to the objections are due May 13. On Feb. 21, 2014, the Debtors, Wells Fargo, and two proposed new capital providers executed a restructuring support agreement. The Court approved the RSA by order dated April 17, 2014. Wells Fargo Bank N.A., holds approximately $135 million in principal amount of mortgage debt secured by a first-lien against the Property. The RSA provides for the sale of the Property to a "stalking horse" bidder, 123 North Wacker Borrower, LLC, subject to a marketing phase, competitive bidding and a potential auction, if required. The sale will be conducted pursuant to section 363 of the Bankruptcy Code, and implemented through the plan of reorganization filed by the Debtors on April 25. The Debtors intend to seek approval of the sale in connection with confirmation of the Plan. If the Approved Purchaser successfully acquires the Property, the transaction will (i) keep the existing mortgage loan in place, on terms fully-negotiated with the lender; (ii) raise $12 million to $15 million of new equity capital; (iii) remove the Property from its tenant in common structure; (iv) permit those TICs who consent to the transaction to continue their deferral of taxable gains from previous real estate transactions; (v) give consenting TICs to invest new money to acquire their pro rata share of up to 10% of the new equity in the transaction; (vi) provide a guaranty of the mortgage debt from a new entity, Sovereign, approved by the lender; and (vii) allow existing equity holders in the Debtors to retain their interests. The Debtors said a marketing phase will last approximately 35 days, up to the proposed Bid Deadline of June 19, 2014, at 4:00 pm (CT). Following the Bid Deadline, the Debtors will determine, in consultation with the broker, whether each bid constitutes a "Qualified Bid." A potential bidder may bid in cash and/or to assume the Loan in full on its existing terms, without modification -- a Loan Assumption Bid. In the latter case, Wells Fargo, as Noteholder, will be given an opportunity to determine whether to accept or reject the Loan Assumption Bid. If the Noteholder rejects a Loan Assumption Bid, it will deemed not to constitute a Qualified Bid. The Bidding Procedures provide a mechanism whereby bidders who dispute in good faith the Debtors' determination that the Bid is not a Qualified Bid may request that the Debtors submit the dispute for resolution by the Court. If there are no Qualified Bids, there will be no auction and the Approved Purchaser's transaction will be the "Successful Bid." If there are one or more Qualified Bids, the Court will conduct the auction. The Approved Purchaser and Wells Fargo shall be deemed Qualified Bidders for purposes of any auction of the Property. Wells Fargo will be allowed to credit bid at the auction to the extent set forth in the RSA. The Court shall preside over the auction in open court. The Court will determine, at the end of each round of bidding, which is the "highest and best" Qualified Bid. At the conclusion of the auction, the Court will determine the successful bidder and the "back-up bid." Following the conclusion of the bidding process, the Debtors intend to pursue approval of the sale as part of confirmation of the Debtors' Plan. The Bidding Procedures provide a $2 million "Overbid Component" for any Bid to constitute a Qualified Bid. In the event that a bidder other than the Approved Purchaser is the successful bidder, the Overbid Component will be used to reimburse the documented and reasonable out-of-pocket expenses, including attorneys' fees and costs, of the Approved Purchaser and the Debtors incurred in connection with the proposed transaction. The Approved Purchaser and the Debtors have incurred substantial fees in costs, in excess of $2 million, in connection with drafting and negotiating the RSA and other operative agreements, including the modified loan documents, organizational documents, and the proposed Plan. Under the terms of the RSA, if the Approved Purchaser acquires the Property, the transaction will be structured to allow TICs that consent to the transaction to participate, either by exchanging their interests for new limited interests (intended to allow the TICs to continue to defer taxable gains on prior real estate transactions) and, for TICs that want to invest, by purchasing their pro rata share of 10% of the new equity. The Debtors believe the foregoing opportunities will be of substantial benefit to the TICs, whose equity interests have no value and many of whom are would otherwise face substantial adverse tax consequences. In the event that TICs choose not to participate in the transaction, the Debtors have filed an adversary proceeding to compel the sale of such TICs' interests in the Property pursuant to section 363(h) of the Bankruptcy Code. Section 363(h) provides a mechanism to ensure that dissenting TICs, whose interests have no value, do not further impair the Property, provided that the dissenting TICs retain their right to submit their own bids for the Property pursuant to section 363(i) of the Bankruptcy Code. The proposed bid and auction procedures do precisely that. As proposed, the Bidding Procedures would allow a dissenting TIC (or any other potential third party bidder) to be deemed a Qualified Bidder, and potentially eligible to participate in the auction, if any, by submitting a Qualified Bid that consists of (i) payment in full, in cash, or assumption in full of the existing mortgage loan, which has a principal balance of roughly $134.5 million, plus accrued interest, fees and other costs, plus (ii) the Overbid Component of $2 million, which is to be set aside for payment or reimbursement of documented, reasonable transaction costs incurred by the Approved Purchaser and the Debtors in order to establish the market for the Property. Those TICs that elect to submit or participate in a bid for the Property will not be permitted by the Approved Purchaser to participate in the Approved Purchaser's transaction (i.e., such TICs will not be entitled to new limited interests in the parent of the Approved Purchaser and will not be entitled to invest their pro rata share of 10% of the new equity along with the Approved Purchaser). Additionally, TICs that submit their own bid will be deemed to have consented to the sale of their TIC interests regardless of whether such bid is ultimately successful. About NNN 123 North Wacker 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 D. Tyler Nurnberg, Esq., Daniel J. Hartnett, Esq., and Seth J. Kleinman, 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. Bankruptcy Judge Jack B. Schmetterer oversees the cases. NNN 123 North Wacker -- "TIC 0" -- and NNN 123 North Wacker Member -- "TIC Member" -- are each duly organized as Delaware limited liability companies. TIC 0 was formed on Aug. 8, 2005. TIC Member was formed on Sept. 13, 2005. TIC Member is the sole member of TIC 0 and owns 100% of the membership interests of TIC 0. TIC Member's principal asset is its 100% ownership of TIC 0. TIC 0's principal asset is its interest in the real property located at 123 N. Wacker Drive, Chicago, Illinois, as improved by a 30- story Class A office building with approximately 541,000 rentable square feet. TIC 0 is one of 33 single purpose limited liability companies that, together, hold 100% of fee title to the Property as tenants in common. TIC 0 owns an undivided 13.917% interest in the Property, making it the single largest owner. The Property is currently managed by TNP. The TICs purchased the Property in September 2005 for a purchase price of approximately $175 million. The purchase was financed through a two-tranche mortgage loan in the total principal amount of $136 million. The Loan was evidenced by (i) a promissory note in the principal amount of $122 million -- "A Note" -- and (ii) a promissory note in the principal amount of $14 million -- "B Note". Wells Fargo serves as (i) the trustee and successor collateral agent for the registered holders of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2005-C4 (in such capacity, the "A Note Holder"); and (ii) the trustee for the beneficial owners of N-Star REL CDO VI Grantor Trust, Series H (in such capacity, the "B Note Holder"). As of the Petition Date the Loan was administered by C-III Asset Management LLC, as special servicer. The Loan is currently administered by LNR Partners LLC, as special servicer. Wells Fargo is represented by Thomas S. Kiriakos, Esq., and Aaron Gavant, Esq., at Mayer Brown LLP, in Chicago, Illinois; and W. Michael Bond, Esq., and Elisa R. Lemmer, Esq., at Weil, Gotshal & Manges LLP, in New York. The TIC Members are represented by Emily Stone, Esq., at LOEB & LOEB LLP, in Chicago, Illinois; and Bernard R. Given II, Esq., at Loeb & Loeb LLP, in Los Angeles, California. Troy Thomas, a member of NNN 123 North Wacker, LLC, is represented by Stephen T. Bobo, Esq., and Theresa Davis, Esq., at Reed Smith LLP, in Chicago, Illinois. NNN 123 NORTH WACKER: Challenges Thomas' Case Dismissal Bid ----------------------------------------------------------- NNN 123 North Wacker, LLC -- "TIC 0" -- and NNN 123 North Wacker Member LLC -- "TIC Member" -- urge the Bankruptcy Court in Chicago to reject the request of Troy Thomas to dismiss the Chapter 11 cases. The Debtors said they took all the proper steps to file these cases, and their decision to file was made on an informed basis, in satisfaction of all of their respective fiduciary obligations. The Debtors noted their prospects at the time of the filing were bleak. The Property had declined significantly in value since the tenant in common owners purchased it in 2005 for $175 million. When the cases were filed in October, the Property was worth considerably less than the current mortgage debt of $134.5 million; the loan was in payment default, the TICs having failed to make the required payments for August and September, and the loan, which is in a CMBS structure, was being transferred to special servicing. The Debtors said they had legitimate concerns about the direction of the Property, and the growing likelihood that it could end up in foreclosure. Their decision to file was also influenced by the fact that the Non-Debtor TICs had engaged the lender in discussions for a year and had no agreement to show for it. Contrast that bleak picture with where the Debtors stand today. The Debtors said they have brokered a solution to the myriad problems facing the Property, the terms of which are embodied in the restructuring support agreement. The RSA would (i) keep the mortgage loan in place on terms fully negotiated with the lender; (ii) raise $12 million to $15 million of new equity; (iii) remove the Property from its tenant in common structure; (iv) avoid significant adverse tax consequences for those Non-Debtor TICs that consent to the transaction; (v) give consenting Non-Debtor TICs the option to invest additional money to acquire 10% of the new equity in the transaction; (vi) provide an additional guaranty of the mortgage debt from a new entity, Sovereign Capital, approved by the lender; and (vii) even allow existing equity holders like Mr. Thomas to retain their interests. The Debtors said the RSA "locks in" the support of the secured lender, always critical in a case like this one but even more critical now that the loan has been assigned to a new special servicer. The change was triggered by a decline in the lender's appraised value of the Property, as a result of which a new controlling class of certificate holders was entitled to appoint the new special servicer. The RSA also "locks in" ND Investment, which is contributing 90% of the new equity capital of $12 million to $15 million that the Property so desperately needs. Mr. Thomas argues that the the clear and unambiguous provisions of the TIC 0 operating agreement establish that the Debtors' manager had no authority to file the bankruptcy petition. Stephen T. Bobo, Esq., at Reed Smith LLP, counsel to Mr. Thomas, said "The Debtors spend considerable effort attempting to ensure that the members have no rights or say in how their investments are dealt with. Instead, the Manager is controlling the Debtors to serve its own interests and those of its insiders and affiliates -- not for the benefit of the members or even of the estate. There is no reason that the members should be deprived of all control over their investments, including the purported change in the entity structure, the ability to approve a bankruptcy filing and the ability to control a change in the fiduciary for the investors. The unauthorized actions of Debtors' Manager should not be countenanced by this Court." A copy of the Debtors' objection to Mr. Thomas' motion is available at no extra charge at: http://bankrupt.com/misc/NNN123_ObjCaseDismissal.pdf A copy of their Sur-Reply is available at no extra charge at: http://bankrupt.com/misc/NNN123_SurReplyCaseDismissal.pdf A copy of Mr. Thomas' response to the Objection is available at: http://bankrupt.com/misc/NNN123_ThomasCaseDismissal.pdf About NNN 123 North Wacker 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 D. Tyler Nurnberg, Esq., Daniel J. Hartnett, Esq., and Seth J. Kleinman, 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. Bankruptcy Judge Jack B. Schmetterer oversees the cases. NNN 123 North Wacker -- "TIC 0" -- and NNN 123 North Wacker Member -- "TIC Member" -- are each duly organized as Delaware limited liability companies. TIC 0 was formed on Aug. 8, 2005. TIC Member was formed on Sept. 13, 2005. TIC Member is the sole member of TIC 0 and owns 100% of the membership interests of TIC 0. TIC Member's principal asset is its 100% ownership of TIC 0. TIC 0's principal asset is its interest in the real property located at 123 N. Wacker Drive, Chicago, Illinois, as improved by a 30- story Class A office building with approximately 541,000 rentable square feet. TIC 0 is one of 33 single purpose limited liability companies that, together, hold 100% of fee title to the Property as tenants in common. TIC 0 owns an undivided 13.917% interest in the Property, making it the single largest owner. The Property is currently managed by TNP. The TICs purchased the Property in September 2005 for a purchase price of approximately $175 million. The purchase was financed through a two-tranche mortgage loan in the total principal amount of $136 million. The Loan was evidenced by (i) a promissory note in the principal amount of $122 million -- "A Note" -- and (ii) a promissory note in the principal amount of $14 million -- "B Note". Wells Fargo serves as (i) the trustee and successor collateral agent for the registered holders of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2005-C4 (in such capacity, the "A Note Holder"); and (ii) the trustee for the beneficial owners of N-Star REL CDO VI Grantor Trust, Series H (in such capacity, the "B Note Holder"). As of the Petition Date the Loan was administered by C-III Asset Management LLC, as special servicer. The Loan is currently administered by LNR Partners LLC, as special servicer. Wells Fargo is represented by Thomas S. Kiriakos, Esq., and Aaron Gavant, Esq., at Mayer Brown LLP, in Chicago, Illinois; and W. Michael Bond, Esq., and Elisa R. Lemmer, Esq., at Weil, Gotshal & Manges LLP, in New York. The TIC Members are represented by Emily Stone, Esq., at LOEB & LOEB LLP, in Chicago, Illinois; and Bernard R. Given II, Esq., at Loeb & Loeb LLP, in Los Angeles, California. Troy Thomas, a member of NNN 123 North Wacker, LLC, is represented by Stephen T. Bobo, Esq., and Theresa Davis, Esq., at Reed Smith LLP, in Chicago, Illinois. NNN 123 NORTH WACKER: May Access Wells Fargo Cash Thru July 31 -------------------------------------------------------------- Bankruptcy Judge Jack B. Schmetterer signed off on an agreed order further extending the interim authority granted to NNN 123 North Wacker -- "TIC 0" -- and NNN 123 North Wacker Member -- "TIC Member" -- to use the cash collateral in which Wells Fargo Bank, N.A., asserts an interest. The Debtors may use cash collateral through July 31, 2014. As adequate protection to Wells Fargo for the Debtors' continued cash collateral use, the lender is to receive payment according to this schedule: $621,993 by April 30, $601,929 by May 30, $621,993 by June 30, and $601,929 by July 30 The payments will be applied to outstanding debt owed to Wells Fargo. A further hearing on the continued cash use is set for June 30 at 10:30 a.m. About NNN 123 North Wacker 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 D. Tyler Nurnberg, Esq., Daniel J. Hartnett, Esq., and Seth J. Kleinman, 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. Bankruptcy Judge Jack B. Schmetterer oversees the cases. NNN 123 North Wacker -- "TIC 0" -- and NNN 123 North Wacker Member -- "TIC Member" -- are each duly organized as Delaware limited liability companies. TIC 0 was formed on Aug. 8, 2005. TIC Member was formed on Sept. 13, 2005. TIC Member is the sole member of TIC 0 and owns 100% of the membership interests of TIC 0. TIC Member's principal asset is its 100% ownership of TIC 0. TIC 0's principal asset is its interest in the real property located at 123 N. Wacker Drive, Chicago, Illinois, as improved by a 30- story Class A office building with approximately 541,000 rentable square feet. TIC 0 is one of 33 single purpose limited liability companies that, together, hold 100% of fee title to the Property as tenants in common. TIC 0 owns an undivided 13.917% interest in the Property, making it the single largest owner. The Property is currently managed by TNP. The TICs purchased the Property in September 2005 for a purchase price of approximately $175 million. The purchase was financed through a two-tranche mortgage loan in the total principal amount of $136 million. The Loan was evidenced by (i) a promissory note in the principal amount of $122 million -- "A Note" -- and (ii) a promissory note in the principal amount of $14 million -- "B Note". Wells Fargo serves as (i) the trustee and successor collateral agent for the registered holders of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2005-C4 (in such capacity, the "A Note Holder"); and (ii) the trustee for the beneficial owners of N-Star REL CDO VI Grantor Trust, Series H (in such capacity, the "B Note Holder"). As of the Petition Date the Loan was administered by C-III Asset Management LLC, as special servicer. The Loan is currently administered by LNR Partners LLC, as special servicer. Wells Fargo is represented by Thomas S. Kiriakos, Esq., and Aaron Gavant, Esq., at Mayer Brown LLP, in Chicago, Illinois; and W. Michael Bond, Esq., and Elisa R. Lemmer, Esq., at Weil, Gotshal & Manges LLP, in New York. The TIC Members are represented by Emily Stone, Esq., at LOEB & LOEB LLP, in Chicago, Illinois; and Bernard R. Given II, Esq., at Loeb & Loeb LLP, in Los Angeles, California. Troy Thomas, a member of NNN 123 North Wacker, LLC, is represented by Stephen T. Bobo, Esq., and Theresa Davis, Esq., at Reed Smith LLP, in Chicago, Illinois. NNN PARKWAY 400 26: Hearing on UST Dismissal Bid Moved to June 25 ----------------------------------------------------------------- The hearing over the request by the United States Trustee to dismiss the Chapter 11 cases of NNN Parkway 400 26, LLC, and its affiliated debtor-entities, or, in the alternative, convert the cases to Chapter 7, has been continued to June 25, 2014, at 10:00 a.m., pursuant to a stipulation among the Debtors and the U.S. Trustee. The Court gave its stamp of approval on the agreement on April 15. The hearing was originally scheduled for April 30. The U.S. Trustee for Region 16 filed a motion asking the Bankruptcy Court to dismiss or convert the case of NNN Parkway 400 26, LLC, to one under Chapter 7 and to fix any quarterly fees due and payable to the U.S. Trustee. The U.S. Trustee states that there is cause to dismiss or convert. The U.S. Trustee states that the Debtors have nothing left to reorganize having lost the commercial office building with which they intended to reorganize to a lender seeking to foreclose. The foreclosure sale date was set for April 1, 2014. Without this asset, the Trustee states that the Debtors have nothing left with which to reorganize as their latest monthly operating reports covering February 2014 show $2,749 in the bank. Moreover, the Trustee also stated that Court denied confirmation of the Debtors' reorganization plan on February 6, 2014. In support of asking the Court to fix any quarterly fees, the Trustee states that in the fourth quarter of 2013, the Debtors paid a total of $11,700 in quarterly fees for that quarter. Further, it is anticipated that they will owe that same sum for the first quarter of 2014. At the time of this hearing, quarterly fees will also be owing for the second quarter of 2014; the minimum fee would be $10,075. Peter C. Anderson, the United States Trustee, is represented in the case by: Nancy S. Goldenberg, Esq. Trial Attorney Ronald Reagan Fed. Bldg. & U.S. Courthouse 411 W. Fourth Street, Suite 9041 Santa Ana, CA 92701-8000 Telephone: (714) 338-3400 Facsimile (714) 338-3421 E-mail: Nancy.Goldenberg@usdoj.gov As reported by the Troubled Company Reporter on Jan. 28, 2014, NNN Parkway 400 26, LLC, and 30 of its affiliated limited liability companies were slated to lose their property to foreclosure after Bankruptcy Judge Theodor C. Albert denied confirmation of their Chapter 11 plan. Judge Albert said the absolute priority rule and market testing issue, the separate classification and the fact that there may in good faith not be even a single consenting impaired class not involving insiders, and the question of just how the debtor TICs propose legally to control the non-consenting, non-debtor TICs in return for the new money absent protracted litigation, are all formidable barriers to confirmation. None of these barriers appear to be of the sort where the debtor TICs might be able to resolve them within the near future, thereby justifying more time. According to Judge Albert, the case (at least as to the lead debtor) has now been pending for over one year and the court sees no practical end in sight. Therefore, the court sees no basis for further delay of the lender under 11 U.S.C. Sec. 362(d)(2) as there is no reorganization "in prospect," the Judge said, citing United Sav'n Assoc. of Texas v. Timbers of Inwood Forest Assocs., 484 U.S. 365, 376, 108 S.Ct. 626, 633 (1988). Each of the Debtors owns undivided tenancies in common in the property commonly known as 11720 and 11800 Amber Park Drive, Alpharetta, Georgia. The property is improved by office buildings which have been partially leased. The debtor TICs each hold a percentage ownership in the property, aggregating roughly 86%. There are at least four tenants in common owning the remaining 4% which are not debtors. By earlier order, the debtor TICs' cases are administratively consolidated. The Debtors' bankruptcy exit plan was opposed by the major creditor in the case WBCMT 2007-C31 Amberpark Office Limited Partnership. The lender is owed about $27 million secured by a first mortgage on the property. The lender had actually foreclosed on the property January 3, 2013 as but was prevented from consummating that foreclosure by the Chapter 11 petition of the lead debtor, NNN Parkway 400 26, LLC, representing about a 2.3% ownership of the property. At a Dec. 19 hearing, the court determined that the value of the Debtors' property for plan purposes was $21 million. Under Sec. 506(a) of the Bankruptcy Code, this means the secured claim of the lender was $21 million and the unsecured portion was the approximate $6 million deficiency. The court also determined that a 5.94% per annum interest rate fixed would provide "present value" equal to the remaining $20 million secured claim (after a promised $1 million pay down) for the payments promised under the plan within the meaning of 11 U.S.C. Sec. 1129(b)(2)(A)(i). The hearing was continued for evidence and argument on remaining issues to Jan. 13, 2014. At the continued hearing, the debtor TICs reported that their financial backers, ASB Acquisitions and Steelbridge Capital, would still contribute the promised approximate $5.11 million new capital notwithstanding that these findings were at variance with the original conditions for the contribution as previously expressed. Therefore, it appeared that the debtor TICS cleared at least the initial hurdle to plan confirmation described in the tentative. The Debtor TICs classify the lender's $6 million deficiency in Class 5 from the other class of unsecured claims in Class 4. Class 4 is reportedly comprised of $43,307 of general unsecured claims and is the sole consenting impaired class. The lender is easily the largest unsecured creditor -- the lender represents about 99.79% of all debt -- and Class 5 -- of which it is the sole member -- has voted against confirmation. There arises an issue under the "absolute priority rule" found at 11 U.S.C. Sec. 1129(b)(2)(B)(ii) because the debtor TICs do not propose to pay the unsecured creditors in full but would keep their interests as Class 8 under the plan. A copy of Judge Albert's Jan. 21, 2014 Memorandum of Decision Denying Confirmation of Chapter 11 Plan and Granting Relief of Stay is available at http://is.gd/OoRsUzfrom Leagle.com. About NNN Parkway 400 26 LLC NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. The Hon. Judge Theodor Albert presides over the case. The Law Office of Christine E. Baur, and David A. Lee, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor. Pre-petition, the Debtors retained HighPoint Management Solutions, LLC, a bankruptcy consulting company, as a manager of the Debtors, and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors' Restructuring Officer, to assist the Debtors in their compliance with the Chapter 11 bankruptcy process. The Debtors' primary asset is a commercial real property commonly known as Parkway 400, which is a two-building office campus totaling approximately 193,281 square feet located at 11720 Amber Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The Debtors hold a concurrent ownership interest in the Property with other tenant-in-common investors and the sponsor, NNN Parkway 400, LLC. NNN PARKWAY 400 26: Baur Firm Okayed to Handle Adversary Case ------------------------------------------------------------- At the behest of NNN Parkway 400 26, LLC, et al., the Bankruptcy Court approved the amendment to their application to employ the Law Office of Christine E. Baur as counsel. The firm was employed as general bankruptcy counsel for the Debtors until Nov. 7, 2013, at which time Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP substituted for the firm as general counsel. As reported by the Troubled Company Reporter on April 28, 2014, the Debtors said the approved scope of work of the firm does not include representation of the Debtor in the adversary action entitled WBCMT 2007-C31 Amberpark Office Limited Partnership, vs. NNN Parkway 400 2, LLC, et al., which was filed on March 4, 2014. In the complaint, the lender alleges that cash on hand in the estates is currently owned by the lender, and that $700,000 which was transferred to Breakwater in May 2013 from Wiedmeyer was an unauthorized postpetition transfer of the lender's property. The Debtors said the firm will represent them in the adversary proceeding at its customary hourly rates. The majority of the work will be performed by Christine E. Baur ($400) and Kathryn D. Anderson ($350). The firm's other attorneys or paralegals will perform work in the case, as the firm deems appropriate. The firm has received a total of $401,994 in fees and costs related to the representation of the Debtors. The firm also received $5,656 which was sent to Debtors' expert, Lucent Capital. A substantial part of the funds received by the firm come from the proceeds of the $700,000 transferred from Wiedmeyer to Breakwater in May 2013. The firm holds an unused retainer balance of $3,000. The firm will not receive a new retainer for its work in the Adversary Proceeding and is taking on a risk of non-payment if the lender succeeds on the complaint. To the best of the Debtors' knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Christine E. Baur, Esq. 4563 Carmel Mountain Road, Suite 308 #332 San Diego, CA 92130 Tel: (858) 350-3757 Fax: (858) 876-9480 E-mail: christine@baurbklaw.com About NNN Parkway 400 26 LLC NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. The Hon. Judge Theodor Albert presides over the case. The Law Office of Christine E. Baur, and David A. Lee, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor. Pre-petition, the Debtors retained HighPoint Management Solutions, LLC, a bankruptcy consulting company, as a manager of the Debtors, and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors' Restructuring Officer, to assist the Debtors in their compliance with the Chapter 11 bankruptcy process. The Debtors' primary asset is a commercial real property commonly known as Parkway 400, which is a two-building office campus totaling approximately 193,281 square feet located at 11720 Amber Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The Debtors hold a concurrent ownership interest in the Property with other tenant-in-common investors and the sponsor, NNN Parkway 400, LLC. In January 2014, Judge Albert issued an Amended Memorandum of Decision denying confirmation of the Chapter 11 plan of NNN Parkway 400 26 LLC and its 30 debtor affiliates, and granting the lender relief from the automatic stay. A copy of Judge Albert's Jan. 28, 2014 Amended Memorandum of Decision is available at http://is.gd/36UOTofrom Leagle.com. NNN PARKWAY 400 26: Weiland Golden May Handle Adversary Case ------------------------------------------------------------ At the behest of NNN Parkway 400 26, LLC, et al., the Bankruptcy Court approved an amendment to the application to employ Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP as general bankruptcy counsel to include representation of the Debtors who have been named defendants in an adversary action entitled WBCMT 2007-C31 Amberpark Office Limited Partnership, vs. NNN Parkway 400 2, LLC, et al., which was filed on March 4, 2014. As reported by the Troubled Company Reporter, on April 28, 2014, the Weiland firm will represent the Debtors, as co-counsel with the Law Office of Christine E. Baur, at the Weiland firm's customary hourly rates which range from $200 to $670, depending on the experience and expertise of the attorney or paralegal performing the work. Majority of the work will be performed by: Personnel Hourly Rate --------- ----------- Evan D. Smiley $620 Philip E. Strok $620 Kyra E. Andrassy $540 Beth E. Gaschen $430 The Weiland firm will not receive a retainer for its work in the adversary proceeding and is taking on a risk of non-payment if the lender succeeds on the complaint. Weiland Golden can be reached at: Beth E. Gaschen, Esq. WEILAND, GOLDEN, SMILEY, WANG EKVALL & STROK, LLP 650 Town Center Drive, Suite 950 Costa Mesa, CA 92626 Tel: (714) 966-1000 Fax: (714) 966-1002 E-mail: bgaschen@wgllp.com About NNN Parkway 400 26 LLC NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. The Hon. Judge Theodor Albert presides over the case. The Law Office of Christine E. Baur, and David A. Lee, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor. Pre-petition, the Debtors retained HighPoint Management Solutions, LLC, a bankruptcy consulting company, as a manager of the Debtors, and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors' Restructuring Officer, to assist the Debtors in their compliance with the Chapter 11 bankruptcy process. The Debtors' primary asset is a commercial real property commonly known as Parkway 400, which is a two-building office campus totaling approximately 193,281 square feet located at 11720 Amber Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The Debtors hold a concurrent ownership interest in the Property with other tenant-in-common investors and the sponsor, NNN Parkway 400, LLC. In January 2014, Judge Albert issued an Amended Memorandum of Decision denying confirmation of the Chapter 11 plan of NNN Parkway 400 26 LLC and its 30 debtor affiliates, and granting the lender relief from the automatic stay. A copy of Judge Albert's Jan. 28, 2014 Amended Memorandum of Decision is available at http://is.gd/36UOTofrom Leagle.com. OIL STATES: S&P Retains 'BB+' CCR on CreditWatch Negative --------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB+' corporate credit and other ratings on Houston-based Oil States International Inc. remain on CreditWatch with negative implications. S&P placed the ratings on CreditWatch on Aug. 19, 2013. The ratings on Oil States remain on CreditWatch with negative implications due to the potential for a downgrade upon completion of the spin-off of the company's accommodations business into a separate entity. The company believes that it can execute the proposed spin-off through a tax-free distribution to its shareholders by the end of the second quarter of 2014. The accommodations business currently generates about half of the company's EBITDA. S&P believes that the separation of Oil States' accommodations operations would have a negative impact on its assessment of the company's business risk profile given the diminution of business diversity and its evaluation of the company's other segments. In addition, Oil States will be required to refinance its secured credit facilities and will likely redeem or call all of its senior notes in connection with the spin-off. As a result, the capital structure of the future stand-alone company remains unknown at this point. "We will resolve the CreditWatch listing after we conduct a full assessment of the creditworthiness of the stand-alone Oil States," said Standard & Poor's credit analyst Christine Besset. "In resolving the CreditWatch listing, we will evaluate key issues, including Oil States' business risk profile, its capital structure after the transaction, and its financial policy. We would expect to either lower or affirm the ratings upon completion of our review at around the close of the spin-off transaction." ORMET CORP: 8th Interim Wind Down Plan Approved ----------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware issued on April 17, 2014, an eighth interim order approving an interim plan to wind down Ormet Corporation, et al.'s businesses and authorizing the Debtors to modify their employee benefits plans consistent with the winddown plan. Pursuant to the eighth interim order, the Debtors are authorized to make payments in compliance with a budget through and including May 20, 2014, in the implementation of the Interim Winddown Plan. The Court will hold a further hearing on the Debtors' request to implement the winddown plan on May 20, 2014, at 10:30 a.m. (ET). About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Affiliates that separately filed Chapter 11 petitions are Ormet Primary Aluminum Corporation; Ormet Aluminum Mill Products Corporation; Specialty Blanks Holding Corporation; and Ormet Railroad Corporation. Ormet emerged from a prior bankruptcy in April 2005. Lender Wayzata Investment Partners LLC is among existing owners. Others are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund. In the 2013 case, Ormet is represented in the case by Morris, Nichols, Arsht & Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B. Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq., Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. An official committee of unsecured creditors was appointed in the case in March 2013. The Committee is represented by Rafael X. Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S. Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein Sandler LLP. In October 2013, the U.S. Trustee filed papers saying the bankruptcy instead should be converted to a liquidation in Chapter 7. The U.S. Trustee said there is no budget and no financing for a wind-down in Chapter 11. In November 2013, the Bankruptcy Court approved on an interim basis Ormet's motion for (a) an interim plan to wind down the Debtors' businesses and protections for certain employees implementing the wind down, (b) authorizing the Debtors to modify employee benefit plans consistent with the wind down plan, and (c) authorizing the Debtors to take any and all actions necessary to implement the wind down plan. In December 2013, Ormet completed a previously approved sale of its alumina smelter in Burnside, Louisiana, to Almatis Inc. for $39.4 million. There was no auction. Completion of a court- approved sale of the business to lender and part owner Wayzata Investment Partners LLC became impossible when Ohio utility regulators refused in October to grant reductions in electricity prices. Wayzata would have acquired the business largely in exchange for debt. Ormet also has sold 32,000 metric tons of alumina for $8.4 million to Glencore AG, and its rights and interests in and to 17,086 MT baked carbon anodes, located at the Debtors' Hannibal, Ohio location, and its rights and interest in and to 34,755 MT baked carbon anodes, located in a storage in Baltimore, Maryland, to Alcoa Materials Management, Inc. In 2014, the Bankruptcy Court issued several interim orders related to the wind-down plan. Those orders authorize the Debtors to make payments through a certain date, as part of implementing the wind-down plan. PACIFIC THOMAS: Hearing on $6.55 Million Loan Moved to June 5 ------------------------------------------------------------- The Bankruptcy Court continued until June 5, 2014, at 10:30 a.m., in Oakland Room 215 - Hammond for 443, the hearing to consider Pacific Thomas Corp.'s motion to borrow more than $6.5 million in financing from Thorofare Capital. As reported in the Troubled Company Reporter on March 11, 2014, the company will use the new loan to pay off the claims of Bank of the West, Private Mortgage Fund LLC, Alameda County's tax collector and other secured creditors. The remaining funds will be used to implement the company's proposed restructuring plan. The new loan, which has a fixed interest rate of 10.85%, is conditioned upon approval of the restructuring plan and the disclosure statement. Pacific Thomas will post some of the real properties it owns as collateral for the loan. In case the company receives court approval of the proposed financing, Bank of the West, Private Mortgage and Alameda County's tax collector would be required to release their liens on those properties. About Pacific Thomas Corp. Walnut Creek, California-based Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C., serves as general counsel. The petition was signed by Jill V. Worsley, COO, secretary. Kyle Everett was named Chapter 11 trustee of the Debtor. Craig C. Chiang, Esq., at Buchalter Nemer, P.C., in San Francisco, Calif., represents the Chapter 11 trustee as counsel. Development Specialists, Inc. serves as consultant to the trustee. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. In January 2014, Judge Hammond entered an order holding that Pacific Thomas Corp.'s Fourth Amended Disclosure Statement, filed on Dec. 31, 2013, is not approved for the reasons stated on the record at the Jan. 16 hearing. Pursuant to the Plan, the Debtor proposes to avail of a loan from Thorofare Capital to pay off some secured claims. The new loan would be refinanced by the reorganized company before the loan terms expires. If the reorganized company fails to do so, the safe storage parcels of the Pacific Thomas properties will be sold. PACIFIC VECTOR: Delays Filing of Annual Financial Statements ------------------------------------------------------------ Pacific Vector Holdings Inc., a premier action sports retailer and consumer brands company, on May 1 disclosed that it will not be able to file its annual financial statements, accompanying Management Discussion and Analysis and related CEO and CFO Certifications of Annual Filings for the financial year ended January 5, 2014, within the period prescribed for the filing of such documents under Part 4 and 5 of regulation 51-102 respecting Continuous Disclosure Obligations, pursuant to Regulation 52-109 respecting Certification of Disclosure in Issuers, Annual and Interim Filings, that require the 2013 Annual Financial Statements to be filed within 120 days of year end being May 5, 2014. The Corporation is currently not in a position to timely file its 2013 Annual Financial Statements, primarily as a result of additional time required to secure financing and, subsequently, for its auditors to be compensated in order to complete the audit of the Corporation's financial statements. The Corporation's board of directors and management will be working expeditiously with the Corporation's auditors to meet the Corporation's obligations relating to the filing of the 2013 Annual Financial Statements. The Corporation expects to file the 2013 Annual Financial Statements on or before June 13, 2014. As a result of the postponement in the filing of the 2013 Annual Financial Statements the Corporation has made an application to the Ontario Securities Commission for a management cease trade order, which would restrict all trading in securities of the Corporation, whether direct or indirect, by management of the Corporation. The MCTO would not affect the ability of the shareholders who are not insiders of the Corporation to trade their securities. There is no certainty that the MTCO will be granted. If the MTCO is not issued by the OSC, the applicable securities regulatory authorities could issue a general cease trade order against the Corporation for failure to file the 2013 Annual Financial Statements within the prescribed time period. The Corporation confirms that it intends to satisfy the provisions of the alternative information guidelines found at sections 4.3 and 4.4 of Policy statement 12-203 respecting Cease Trade Orders for Continuous Disclosure Defaults, for as long as it remains in default as a result of the late filing of its 2013 Annual Financial Statements. During the period of default, the Corporation will issue bi-weekly default report status reports in the form of further press releases, which will also be filed on SEDAR. The Corporation confirms there are no insolvency proceedings against it at the date of this release. The Corporation also confirms that there is no other material information concerning the affairs of the Corporation, that has not been generally disclosed as of the date of this press release. About Pacific Vector Pacific Vector -- http://www.pacificvector.com-- is a premier action sports retail and consumer brands company. PERRY ELLIS: S&P Lowers CCR to 'B' on Deteriorated Credit Measures ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Miami-based apparel company Perry Ellis International Inc. to 'B' from 'B+'. The outlook is stable. At the same time, S&P lowered the issue-level rating on the company's senior subordinated notes due 2019 to 'B' from 'B+'. The recovery rating remains '4', indicating S&P's expectation for average (30% to 50%) recovery for unsecured debt holders in the event of a payment default. "We are lowering our ratings on Perry Ellis to reflect the company's weaker-than-expected operating performance, which resulted in deteriorated credit metrics over the past year," said Standard & Poor's credit analyst Jacqueline Hui. Soft sales, including Perry Ellis' planned exit from certain private label programs, combined with higher selling, general, and administrative costs related to marketing, new stores, and office consolidation, led to EBITDA margin declining by about 200 basis points to about 6% at fiscal year-end Feb. 1, 2014. As a result, Standard & Poor's estimates adjusted leverage increased to about 5.7x as of the fiscal year 2014 compared with 4.1x in the prior year. S&P expects sales growth to remain soft, margins to remain depressed from historical levels, and leverage to remain above 5x over the next year. This supports S&P's reassessment of the company's financial risk profile to "highly leveraged" from "aggressive." S&P assess the company's business risk profile as "weak," given the company's participation in the very competitive apparel industry, lack of product diversity, and vulnerability to economic and fashion cycles. "We expect the company to slowly increase margins through cost efficiencies and for credit metrics to gradually improve but remain weak over the next year," said Ms. Hui. "We also expect liquidity to remain adequate." PLAINS END: Fitch Affirms 'BB' Rating on $117.7MM Bonds Rating -------------------------------------------------------------- Fitch Ratings has affirmed the 'BB' rating on Plains End Financing, LLC's (Plains End) $117.7 million senior secured bonds (senior bonds), and 'B+' rating on the $20.3 million subordinated secured notes (sub notes). The Outlook remains Stable. The affirmation and Outlook reflect the continued strong operations and stabilized operating costs leading to coverage levels consistent with the current rating. Key Rating Drivers -- Stable Contracted Revenues: The project benefits from stable and predictable revenues under two 20-year fixed-price power purchase agreements (PPAs) with a strong utility counterparty, Public Service Company of Colorado (PSCo, rated 'A-' with a Stable Outlook by Fitch). Under the tolling-style agreements, Plains End LLC (PEI) and Plains End II LLC (PEII) receive substantial capacity payments that account for 82% of consolidated revenues. However, energy margins may not sufficiently fund accelerated overhaul expenses as a result of increased dispatch. (Revenue Risk: Midrange) -- Low Supply Risk: The PPA with PSCo is a tolling-style agreement. Under the contract, all variable fuel expenses are passed through to PSCo, subject to heat rate adjustments. The contract is a stronger attribute that limits the fuel supply risk to the project. (Supply Risk: Stronger) -- Operational Stability Mitigates Cost Increases: The project was designed to provide backup generation for nearby wind projects due to the intermittency of wind resources. The project faces accelerated major maintenance when the volatility in wind causes the project to be dispatched at a rate higher than anticipated. Dispatch has decreased from the 2008 high; however, the project is still susceptible to decreased cash flow from accelerated major maintenance. This risk is partially mitigated by strong availability and a stabilized cost profile including property taxes. (Operation Risk: Midrange) -- Refinance Risk Poses Threat for Subordinated Debt: While the senior debt benefits from a typical project finance structure, the 'B+' rating on the subordinate notes reflects the potential for refinance risk in 2023 if the project is unable to meet target amortization amounts. Under the Fitch rating case which demonstrates the effect of reduced cash flow to the subordinate tranche, there is still sufficient cushion to repay the sub notes by 2023. If the project is only able to meet the minimum amortization payments, however, there would be a balloon in 2023 for the outstanding amount. The project is current on all target amortization. (Debt Structure: Midrange/Weaker) -- Debt Service Profile Remains Consistent: 2013 actual and 2014 projected debt service coverage ratios (DSCR) for both the senior and subordinated debt fall in line with current projections under the Fitch rating case which incorporates increased dispatch to accelerate costs as well as a 5% increase to operating costs and a 10% increase to major maintenance. Under this scenario, the average DSCR is 1.36x with a minimum of 1.26x at the senior level and 1.09x and 1.04x at the sub note level. Rating Sensitivities -- Further cost savings improvement or structural revenue enhancements could result in an upgrade; -- Sustained increased dispatch would accelerate major maintenance and negatively impact cash flow. Security Plains End's obligations are jointly and severally guaranteed by operating plants Plains End LLC (PEI) and Plains End II LLC (PEII). The obligations of the issuer and guarantors are secured by a first-priority perfected security interest in favor of the collateral agent. The collateral includes all real and personal property, all project documents and material agreements, all cash and accounts, and all ownership interests in the issuer and guarantors. The collateral will be applied first to the senior secured bonds and then to the subordinated secured notes. Credit Update Operations since Fitch's prior annual review have been relatively stable with strong availability levels (99.5% for 2013 and 99.9% through February 2014) and a 2013 dispatch level of 7.2%, compared to Fitch's base case assumption of 9.99%. Overall revenues increased by 11% in 2013, largely due to a contractual step-up in capacity payments with additional cushion attributed to increased dispatch and energy revenues. Offsetting additional generating revenues, operating costs increased by 13% during 2013 while total debt service increased by 12%. The result is a DSCR of 1.31x for 2013 compared to 1.37x during 2012 under Fitch's calculation. Fitch notes that reported 2013 DSCR per the sponsor calculation was 1.20x, due to the timing of accrued operating costs. Following the project's acquisition in 2013, there have been several initiatives fully or partially implemented in order to improve cash flow stability going forward. During 2013, the sponsor replaced all insurance policies, which should account for a $60,000 reduction in costs going forward. The sponsor has also reduced staffing in order to realize savings of $250,000-$260,000 per year with a realignment of incentive plans to ensure stable performance. There have been no changes to the compliance regulations at the project and the sponsor has continued to renew permits under the Title V air rule. The major maintenance funding cycle has been updated for this review to reflect the sponsor's expectations for dispatch, run hours and maintenance needs. Due to the low dispatch at PEI, there are no major overhauls expected before 2021. PEII is expected to receive a 16,000 hour major maintenance outage in 2017, though the sponsor believes that their ability to swap out engines during the overhaul should help to reduce the impact to availability. Further, the PPA calculation for capacity payments does not include downtime for scheduled major maintenance. The Fitch base and rating cases now incorporate new major maintenance funding patterns reflective of a five-year cycle of relatively stable costs, consistent with management expectations. Plains End is indirectly owned by Tyr Energy (50%), John Hancock (35%) and Prudential (15%) following the May 2013 sale. Plains End was formed solely to own and develop two gas-fired peaking projects, PEI and PEII, located in Arvada, Jefferson County, Colorado. The plants are peaking facilities used primarily as a back-up for wind generation, as well as other generation sources, in Colorado with a combined capacity of 228.6 MW. Combined cash flows from both plants service the obligations under the two bond issues. PEI and PEII have long-term PPAs structured as tolling contracts with PSCo that expire in 2028. Under the PPAs, PSCo has a right to all of the capacity, energy and dispatch of the facilities. PEI and PEII receive capacity payments and variable energy payments that generally reimburse their variable operating expenses. NAES Corporation (NAES) has continued as operator, supporting operational stability. Both Tyr and NAES have the same parent company, ITOCHU Corporation, demonstrating a further alignment of interests. PREGIS MERGERSUB: Moody's Assigns 'B3' CFR & Rates New Debt 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and B3-PD Probability of Default Rating to Pregis MergerSub Corporation, which will become Pregis Holding I Corp, with a stable outlook. Moody's also assigned a B2 rating to the first- lien senior secured credit facilities and a Caa2 rating to the second-lien senior secured notes. The proceeds of the debt offering will be used to finance the acquisition of Pregis Corporation by Olympus Partners from AEA Investors. The transaction is expected to close in the second quarter of 2014. Moody's took the following actions for Pregis MergerSub Corporation: Assigned B3 CFR Assigned B3-PD PDR Assigned B2 (LGD 3-38%) to $50 million first-lien senior secured revolver due 2019 Assigned B2 (LGD 3-38%) to $230 million first-lien senior secured term loan due 2021 Assigned Caa2 (LGD 5-88%) to $90 million second-lien senior secured notes due 2022 The rating outlook is stable. The ratings are subject to the receipt and review of the final documentation. Ratings Rationale The B3 corporate family rating reflects Pregis' modest scale, limited geographic diversity and high leverage post acquisition by Olympus Partners. Pro forma for the transaction on a Moody's adjusted basis, debt/EBITDA is over 6.5x for the twelve months ended December 31, 2013. The B3 rating also reflects the company's exposure to the economically-sensitive protective packaging market. Protective packaging materials, such as sheet foam and bubble wrap, account for about 70% of the company's revenue. Many of Pregis' protective packaging products are commoditized with significant price competition. The company does not have long-term contracts with most of its customers and therefore does not have the protection of cost pass-through provisions, which may negatively affect its operating performance given volatile resin prices. Pregis' sales are concentrated in the relatively stable but mature and competitive North American market as the company divested its less profitable European operations and other non- core businesses in recent years. The rating is supported by improved operating performance driven by the completed divestitures and cost-cutting initiatives as well as continued growth in its higher margin packaging systems segment. Pregis benefits from the installed base of packaging equipment that utilizes the company's packaging materials. This "razor/razor blade" model for the equipment business generates recurring revenues and cash flows and accounts for approximately 30% of sales. This business also has a better growth profile than the packaging materials segment due to growth in e-commerce. Pregis also benefits from customer diversity (top 10 customers account for 20% of sales) and significant market positions in many of its products. Moody's expects Pregis to have adequate liquidity, supported by cash on hand and availability under its $50 million revolver. Free cash flow may be negatively impacted by working capital swings and planned capital expenditures. Moody's could upgrade Pregis' ratings if the company improves its operating performance and credit metrics on a sustainable basis. Specifically, Moody's could upgrade the rating if the company is able to profitably grow its business and is able to reduce debt/EBITDA below 6.0x, improve free cash flow to debt above 5% and interest coverage above 1.5 times. The company will also need to maintain EBIT margins above 8% on a sustainable basis. Moody's could downgrade the company's rating if the company's liquidity deteriorates and the operating and competitive environment worsens. Acquisitions entailing significant financial or integration risk could also jeopardize the rating. Specifically, the ratings or outlook could be downgraded if free cash flow remains negative, debt to EBITDA rises above 7.0 times, EBIT to interest expense falls below 1.0 time, or the EBIT margin falls below 3.0%. Pregis MergerSub Corporation is a manufacturer of protective packaging materials and packaging equipment through its main operating subsidiary Pregis Corporation. Upon the completion of the acquisition by Olympus Partners, the issuer name will be changed to Pregis Holding I Corp. Deerfield, Illinois-based Pregis had sales of approximately $339 million in the twelve months ended December 2013. PROTICA INC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Protica, Inc. 1002 MacArthur Road Whitehall, PA 18052 Case No.: 14-13519 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Reading) Judge: Hon. Richard E. Fehling Debtor's Counsel: Morris S. Bauer, Esq. NORRIS MCLAUGHLIN & MARCUS, P.A. 721 Route 202-206, Suite 200 Bridgewater, NJ 08807-0700 Tel: 908 722 0700 Email: msbauer@nmmlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by James Francis Duffy, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. QUANTUM FOODS: Asset Sale Hearing Adjourned Until May 12 -------------------------------------------------------- Quantum Foods LLC announced that the hearing to consider the sale of its assets to Raging Bull Acquisition Co. LLC, which was previously scheduled for May 2, has been adjourned until May 12. Raging Bull, a unit of Oaktree Capital Management LP, offered to buy the assets for $54 million in cash, plus the assumption of up to $30.3 million in liabilities. Quantum Foods' assets were supposed to be sold at an auction last month, with Raging Bull's $54 million offer serving as the stalking horse bid or the lead bid. The auction, however, was canceled after the meatpacker did not receive qualified bids prior to the April 16 deadline. When Quantum Foods filed for bankruptcy protection, it received a stalking horse offer of $51 million in cash, plus the assumption of $27 million in liabilities, from CTI Foods Holding Co. LLC. The companies, however, were not able to hammer out final terms on the bid. On March 18, Quantum Foods received court approval to enter into an asset purchase agreement with Raging Bull, a unit of Oaktree Capital, whose portfolio of companies also includes AdvancePierre Foods, Inc. Separately, Judge Carey issued an order authorizing Quantum Foods to make certain compensation-related cash payments to individual non-insider employees in excess of the $12,475 priority cap for wages established by sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code. Quantum Foods is required to provide counsel to the official committee of unsecured creditors with the name and title of the employee-payee, and the amount of the proposed payment five days prior to the date that such payment is made. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. R2D2 LLC: District Court Revives Some of Screen Capital's Claims ---------------------------------------------------------------- District Judge Philip S. Gutierrez in California ruled on Screen Capital International Corp.'s challenges to a July 22, 2013 Order from the Bankruptcy Court for the Central District of California in the Chapter 11 case of R2D2, LLC, which order granted Library Asset Acquisition Company, Ltd.'s Motion to Dismiss a Second Amended Complaint. Judge Gutierrez affirms, in part, and reverses and remands, in part, the Bankruptcy Court's July 22, 2013 Order granting LAAC's Motion to Dismiss. The District Judge also entered a similar ruling as part of the ThinkFilm, LLC bankruptcy case record. SCIC brings the actions against TFC Library, LLC, LAAC, and Zelus, LLC, pursuant to a stipulation transferring standing from the Chapter 11 Trustee of the bankruptcy estates of the Debtors to SCIC. SCIC's claims arise from an alleged conspiracy by David Bergstein and Ronald Tutor, the Members and Managers of R2D2, to "strip R2D2 and its affiliates of any and all assets of value before the creditors notice[d] and the companies collapsed." As part of this alleged conspiracy, R2D2 created a set of co- conspiring companies, including LAAC, and moved assets between these companies "without regard to creditors' rights in such assets, and at all times by keeping creditors guessing as to where their source of recovery might lie. . . ." SCIC alleges a grand scheme to: (1) have the Debtors borrow or guarantee over $100 million in debt and utilize large amounts of loan funds to pay the personal expenses of insiders. (2) transfer the underlying collateral (the TFC Library) away from the Debtors, and (3) acquire the underlying debt and foreclose on the TFC Library, all for the benefit of the other insiders and to the detriment of legitimate third-party creditors. Between January 2006 and February 2008, "one or more of the Debtors" obtained a series of loans from entities related to D.B. Zwirn, a New York hedge fund. The loans included approximately $45 million in loans made by Zwirn to ThinkFilm and unspecified "affiliated entities". Messrs. Bergstein and Tutor executed various guarantees on these loans. Messrs. Bergstein and Tutor then restricted the Zwirn Loans "so that their liens were worth acquiring with Tutor's money, then caus[ed] enough distress to Zwirn that they sold the Zwirn Loans at an attractive price. From March to July 2008, Zwirn entered into a series of "Global Amendments" with CT-1, ThinkFilm, and certain affiliated entities. SCIC alleges that these Global Amendments were intended to ensure that all of the Borrowers would default under the Zwirn loans, and thus to lay the foundation for Messrs. Bergstein and Tutor's plot to foreclose on the Borrowers' assets. SCIC alleges that as the first phase of their alleged "conspiracy," Messrs. Bergstein and Tutor drafted -- and backdated -- an Asset Purchase Agreement, which transferred the rights in the films within the TFC Library from a number of "Sellers" and unnamed "Seller Affiliates" to TFC. In exchange for these transfers, the parties to the Oct. 24, 2008 APA agreed on an aggregate purchase price of $46.5 million, comprised of a minimum cash amount of $500,000 and the assumption by TFC of the Sellers' liabilities, including their debt obligations under the ThinkFilm Loans. SCIC also alleges that LAAC entered into a Note Purchase and Sale Agreement on March 12, 2009, in which LAAC agreed to purchase all of the Zwirn loans from Zwirn for $108 million. However, the NPA was amended so that LAAC only purchased: (1) the BWT Loans, which were defined in the NPA; and (2) the ThinkFilm Loans and all related rights and collateral, including the TFC Library. Based on this alleged conspiracy, SCIC filed separate adversary proceedings on behalf of R2D2, CFD, CapCo, and CT-1, against TFC, LAAC, and Zelus. On July 22, 2013, the Bankruptcy Court granted LAAC's Motion to Dismiss the SAC. SCIC's claims for disallowance and equitable subordination were dismissed without prejudice, but the Bankruptcy Court ordered that SCIC could only pursue these two claims through a motion filed in accordance with Bankruptcy Rule 3007(a) and 9014, rather than through an adversary proceeding. SCIC now appeals the Bankruptcy Court's dismissal of its claims for: (1) avoidance and recovery of the fraudulent transfer of rights to the TFC Library, pursuant to the APA; (2) avoidance and recovery of the preferential transfer of rights to the TFC Library, pursuant to the APA; (3) an accounting; (4) declaratory judgments that LAAC lacks the right and authority to foreclose on the TFC Library, and that LAAC's Section 1111(b) election is not viable;6 (5) recharacterization of LAAC's debt; (6) conspiracy to aid and abet breach of fiduciary duty; and (7) injunctive relief. SCIC also challenges the Bankruptcy Court's (a) holding that the Appealing Debtors' equitable subordination claims can only be brought pursuant to a motion, and (b) denial of leave to amend the Dismissed Claims. The case is, SCREEN CAPITAL INTERNATIONAL CORP. v. LIBRARY ASSET ACQUISITION COMPANY, LTD. Nos. CV 13-5537 PSG, CV 13-5543 PSG, CV 13-5551 PSG, CV 13-5581 PSG (C.D. Calif.). A copy of the District Court's April 25 order is available at http://is.gd/GLhs8ifrom Leagle.com. R2D2, LLC; Capitol Films Development, LLC; Capco Group, LLC; and CT-1 Holdings, LLC, were represented by Frank A. Merola, Esq., at Stutman Treister and Glatt. Screen Capital International Corp., derivatively on behalf of the estate of R2D2, LLC, is represented by Daniel A Rozansky, Esq. -- drozansky@stroock.com -- at Stroock and Stroock and Lavan LLP; David L Neale, Esq., Irving M Gross, Esq., and Todd M Arnold, Esq. -- dwl@lnbyb.com , img@lnbyb.com and tma@lnbyb.com -- at Levene Neale Bender Yoo and Brill LLP; and Frank A Merola, Esq., at Stutman Treister and Glatt. Library Asset Acquisition Company, Ltd., is represented by Bernard Daniel Bollinger, Jr, Esq., Jeffrey K Garfinkle, Esq., and Joseph Marshall Welch, Esq. -- bbollinger@buchalter.com , jgarfinkle@buchalter.com and jwelch@buchalter.com -- at Buchalter Nemer APC. About Thinkfilm LLC et al. CapCo Group LLC and four other companies controlled by David Bergstein are part of a wider network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 bankruptcy against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10-19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. Judge Barry Russell formally declared David Bergstein's ThinkFilm LLC and Capitol Films Development bankrupt on Oct. 5, 2010. Mr. Bergstein is being sued for tens of millions of dollars by nearly 30 creditors -- including advertisers, publicists and the Writers Guild West. Five Bergstein controlled companies have been named in the suit. RBE: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------- Debtor: RBE, a California Corporation 10765 Woodside Ave., Ste. E Santee, CA 92071 Case No.: 14-03531 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Hon. Margaret M. Mann Debtor's Counsel: Andrew H. Griffin, III, Esq. LAW OFFICES OF ANDREW H. GRIFFIN, III 275 East Douglas Avenue, Suite 112 El Cajon, CA 92020 Tel: 619-440-5000 Fax: 619-440-5991 Email: Griffinlaw@mac.com Total Assets: $1.04 million Total Liabilities: $2.14 million The petition was signed by Emil David Ballman, president. A list of the Debtor's 17 largest unsecured creditors is available for free at http://bankrupt.com/misc/casb14-3531.pdf RESOLUTE ENERGY: S&P Alters Outlook to Negative & Affirms 'B' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its rating outlook on Denver-based Resolute Energy Corp. to negative from stable and affirmed its 'B' corporate credit rating on the company. At the same time, S&P lowered its issue-level rating on the company's senior unsecured debt to 'CCC+' from 'B-'. In addition, S&P revised the recovery rating on the debt to '6' from '5', reflecting its expectation of negligible (0%-10%) recovery to creditors in the event of a default. "The negative outlook reflects our expectation that Resolute Energy Corp.'s leverage will remain high, with debt to EBITDA of over 4x and FFO to total debt of below 20% if it does not raise external capital, as we expect," said Standard & Poor's credit analyst Carin Dehne-Kiley. S&P could lower the rating if it no longer expects the company to raise external capital, such that debt to EBITDA remains above 4x and FFO to debt remains below 20%. S&P could revise the outlook to stable if the company's debt to EBITDA improves to less than 4x and FFO to debt to more than 20% on a sustained basis. This would most likely occur if the company successfully reduces debt via asset sales or other deleveraging financial transactions. RESTORA HEALTHCARE: Committee Can Hire Alston & Bird as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors for the Chapter 11 cases of Restora Healthcare Holdings and its debtor-affiliates to retain Alston & Bird LLP as its counsel. The firm will: a) assist the Committee in the exercise of oversight with respect to the Debtors' affairs including all issues arising from or impacting the Debtors or the Committee in these chapter 11 cases; b) prepare on behalf of the Committee all necessary applications, motions, orders, reports, and other legal papers; c) appear before the Court to represent the interests of the Committee; d) negotiate, formulate, draft, and confirm any plan of reorganization or liquidation and matters related thereto; e) exercise oversight with respect to any transfer, pledge, conveyance, sale, or other liquidation of the Debtors' assets; f) investigate, as the Committee may desire, concerning, among other things, the assets, liabilities, financial condition, and operating issues concerning the Debtors that may be relevant to these cases; g) communicate with the Committee's constituents and others as the Committee may consider desirable in furtherance of its responsibilities; and h) perform all of the Committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules or as may be ordered by the Court. Craig Freeman, Esq., and Martin G. Bunin, Esq., partners at the firm, will be working on the case. Their hourly rates are $805 and $895, respectively. The hourly rates of the firm's other professionals are: Partner $655-$1,195 Counsel $650-$960 Associate $350-$725 Paralegal $205-$325 The Committee assures the Court the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Messrs. Freeman and Bunin can be reached at: Craig Freeman, Esq. Martin G. Bunin, Esq. ALSTON & BIRD LLP 90 Park Avenue, 15th Floor New York, NY 10016-1387 Tel: 212-210-9591 Fax: 212-922-3891 Email: craig.freeman@alston.com marty.bunin@alston.com About Restora Healthcare Restora Healthcare Holdings, LLC, and two of its affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 14-10367 to 14-10369) on Feb. 24, 2014. The petitions were signed by George W. Dunaway as chief financial officer. Restora Healthcare estimated assets and debts of at least $10 million. DLA Piper LLP (US) serves as the Debtors' counsel. The Debtors tapped George D. Pillari, a managing director of Alvarez & Marsal Healthcare Industry Group, LLC, as chief restructuring officer. The U.S. Trustee appointed five creditors to serve on the Official Committee of Unsecured Creditors. Restora Healthcare Holdings disclosed $1,789,247 in assets, ad $11,328,016 in liabilities. Restora Hospital of Mesa reported $6,996,725 in assets and $11,186,942 in liabilities. Restora Hospital of Sun City also reported $5,327,278 in assets $9,109,597 in liabilities. In April 2014, Restora obtained Court approval to sell substantially all of their assets to PHX Hospital Partners, LLC, an entity formed by several of the Debtors' creditors and landlords. An April 22 auction assets was cancelled after one other party withdrew its competing bid on the day of the auction. No other bids were received prior to the bid deadline. PHX Hospital, the stalking horse purchaser, was declared the successful bidder. In exchange for the Debtors' two long-term acute-care hospitals, PHX will provide consideration consisting of (a) $5,000,000 payable in the form of a credit bid, (b) a waiver by the Landlord of certain cure costs with respect to two real property leases, and (c) the assumption of certain liabilities and the the payment of all cure costs relating to executory contracts and unexpired leases to be assumed and assigned to the Stalking Horse Purchaser. To protect the welfare of patients, the U.S. Trustee for Region 3, appointed Laura Patt as the patient care ombudsman. Ms. Patt retained Bryan Cave LLP as her counsel. REVSTONE INDUSTRIES: May 9 Hearing on Approval of PBGC Settlement ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on May 9, 2014, at 9:30 a.m. EDT, to consider approval of the settlement entered into between Revstone Industries, LLC, and its debtor affiliates and certain non-debtor affiliates, and the Pension Benefit Guaranty Corporation. As reported by The Troubled Company Reporter, the settlement is a global resolution of PBGC's claims totaling in excess of $95 million, which makes it the largest creditor in the Chapter 11 cases. The settlement will also resolve pension-related claims asserted by the U.S. Department of Labor against Debtor TPOP, LLC, and non-debtor Fairfiled Castings, LLC, and provide (a) the framework for the payment of allowed administrative expenses and priority claims and (b) the means for distributions to be made to unsecured creditors in the Revstone and Spara bankruptcy cases pursuant to a Chapter 11 plan. The settlement gives PBGC an allowed general unsecured, non- priority claim against the Debtors and their domestic affiliates in the amount of $95 million. The PBGC will accept a projected recovery of $82 million on account of the Allowed PBGC Claim, but in no event less than $80 million. All pending bankruptcy litigation between the parties will be dismissed with prejudice and PBGC will agree to support Revstone's amended Chapter 11 plan, which will incorporate the terms of the settlement. On May 9, the Court will also hear arguments filed by the Official Committee of Unsecured Creditors, Boston Finance Group, LLC, General Motors LLC, and Ascalon Enterprises, LLC, which objected to the proposed settlement. General Motors LLC, which holds claims of at least $10,368,125, also objected to the PBGC settlement to the extent the settlement seeks, deliberately or through omission, to set aside or otherwise impair the valid liens, claims, security interests and obligations owing to GM by the Debtors and their non-Debtor subsidiaries and affiliates, some of which liens, claims, security interests and obligations have been previously approved and allowed by final orders of the Court. The Creditors' Committee, joined by BFG, has asked the U.S. Bankruptcy Court for the District of Delaware to Revstone and PBGC to produce communications in connection with the settlement. Revstone argued that the Committee's production request should be denied because the thousands of emails that constitute the settlement communications between the Debtors and PBGC are not discoverable under Rule 408 of the Federal Rules of Evidence and are protected by the common interest privilege. The PBGC, in response to the Committee's motion to compel, asserted that the motion is a further attempt by the Committee and Boston Finance Group, LLC, to delay the approval hearing, adding to the mounting administrative expenses in the Chapter 11 case -- a case that is currently administratively insolvent. PBGC echoes the Debtors' argument that some communications with the Debtors were rightfully withheld because they are protected by Rule 408 and are inadmissible. The Committee and BFG also asked the Court to continue or adjourn the previously scheduled May 6 hearing on the approval of the PBGC settlement, arguing that the Debtors and the PBGC have failed to provide the documents and communications subject to discovery requests. The Committee asserted that the May 6 hearing should be continued to a date after the discovery disputes have been resolved and adequate time has been provided to the Committee and other parties to review and consider any additional documents produced and interrogatories answered, and the Committee has adequate time to conduct depositions. In response to the objections, the Debtors and PBGC argued that the objecting parties fail to recognize that the settlement represents the best opportunity for the Debtors' estates to maximize value. Without the settlement, recoveries by the Debtors from their various subsidiaries will be substantially reduced and delayed, the Debtors said in court papers. Moreover, litigation with the PBGC over termination of the pension plans and the nature and extent of the PBGC's claims at each and every member of the "controlled group" will be lengthy, costly, and risky, the Debtors added. The Debtors are represented by Colin R. Robinson, Esq., Laura Davis Jones, Esq., Alan J. Kornfield, Esq., and David M. Bertenthal, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. PBGC is represented by Israel Goldowitz, Esq., Chief Counsel, Karen L. Morris, Esq., Deputy Chief Counsel, Kartar S. Khalsa, Esq., Assistant Chief Counsel, Desiree M. Amador, Esq., M. Katherine Burgess, Esq. -- burgess.katie@pbgc.com -- Cassandra B. Caverly, Esq., Melissa Harclerode, Esq., Attorneys at Pension Benefit Guaranty Corporation, in Washington, D.C. The Committee is represented by Mark L. Desgrosseilliers, Esq. -- mdesgrosseilliers@wcsr.com -- Matthew P. Ward, Esq. -- maward@wcsr.com -- Ericka F. Johnson, Esq. -- erjohnson@wcsr.com - - at Womble Carlyle Sandridge & Rice, LLP, in Wilmington, Delaware. BFG is represented by Stuart M. Brown, Esq. -- stuart.brown@dlapiper.com -- at DLA Piper LLP (US), in Wilmington, Delaware; and Gregg M. Galardi, Esq. -- gregg.galardi@dlapiper.com -- and Sarah E. Castle, Esq. -- sarah.castle@dlapiper.com -- at DLA Piper LLP (US), in New York. GM is represented by Jeffrey R. Waxman, Esq. -- jwaxman@morrisjames.com -- at Morris James, in Wilmington, Delaware; and Aaron M. Silver, Esq. -- asilver@honigman.com -- and Scott B. Kitei, Esq., Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan. Ascalon is represented by Evan Williford, Esq. -- evanwilliford@thewilliford.com -- at The Williford Firm LLC, in Wilmington, Delaware; and Sheldon S. Toll, Esq. -- lawtoll@comcast.net -- at Sheldon S. Toll PLLC, in Southfield, Michigan. About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Colin Robinson, Esq., at Pachulski Stang Ziehl & Jones LLP represent Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., Ericka Fredricks Johnson, Esq., Steven K. Kortanek, Esq., and Matthew P. Ward, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent the Official Committee of Unsecured Creditors in Revstone's case. Boston Finance Group, LLC, a committee member, also has hired as counsel Gregg M. Galardi, Esq., and Sarah E. Castle, Esq., at DLA Piper LLP. RIVER-BLUFF ENTERPRISES: Has OK to Use Cash From Receiver Account ----------------------------------------------------------------- The Hon. Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington has granted River-Bluff Enterprises, Inc., interim authorization to use cash collateral until the earlier of (a) Aug. 31, 2014, (b) June 10, 2014, if the Court has not entered a final order granting the Cash Collateral motion by that date, (c) July 9, 2014, if the Debtor has not filed by that date a disclosure statement and plan. The Debtor is authorized to use cash that was turned over to the Debtor from the Sterling Bank operating account of Revitalization Partners, L.L.C., the Debtor's superseded receiver, and rents and other proceeds of the collateral generated from and after March 11, 2014. The Debtor is not authorized to use cash in the U.S. Bank account in the amount of $124,092.62. U.S. Bank is granted a lien on and security interest in all of the property in which U.S. Bank holds a valid and enforceable prepetition lien and security interest and acquired by the Debtor on and after the Petition Date. If the replacement lien proves insufficient to secure diminution, U.S. Bank's rights are reserved to request a superpriority claim. On April 9, 2014, the Debtor sought court authorization to use Cash Collateral to maintain and preserve the operations of the Debtor?s real property located at 100 E. Jackson St., Ellensburg, WA. U.S. Bank holds a security interest the Medical Building and the cash flow generated by the Medical Building. As of the Petition Date, U.S. Bank asserts a claim in the amount $5.3 million. The Debtor believes that, as of the Petition Date, the Medical Building had a fair value of slightly less than $4.2 million. The Bank additionally holds $124,000 of additional cash collateral in a bank account in California, bringing the total value of its collateral as of the commencement of the case to approximately $4.3 million. On April 14, 2014, U.S. Bank asked the Court to deny the Debtor?s Cash Collateral motion, claiming that the Debtor?s questionable approach to the management of the Medical Building by insiders, as well as unjustified use of the rents and any funds in the account, is only going to diminish U.S. Bank?s position. According to John R. Knapp, Jr., Esq., at Miller Nash LLP, the attorney for U.S. Bank, the Debtor?s adequate protection proposal is unacceptable for these reasons: (i) the monthly payments are coming from the rents; and (ii) the replacement lien proposed by the Debtor is not adequate protection, as U.S. Bank has a Deed of Trust on the Medical Building, including an assignment of rents. U.S. Bank already has a security interest in the postpetition rents. It is not adequate protection to give the U.S. Bank a lien to which it is already entitled, Mr. Knapp said. The Court will conduct a telephonic status conference on the Cash Collateral motion at 1:30 p.m. on June 10, 2014. In the event of a timely objection to final authorization to use cash collateral, the Court will conduct an evidentiary hearing on the Cash Collateral motion at 10:00 a.m. on June 17, 2014. Hearing on U.S. Bank's Motion to Terminate Stay Stricken The Court also ruled on April 29 that the hearing on U.S. Bank's motion to terminate and annul automatic stay and for abandonment will be stricken without prejudice. In the event of the Debtor's default under, the expiration or other termination of this court order, or other cause, the Debtor's authorization to use Cash Collateral will terminate, and U.S. Bank may schedule a hearing on a motion for relief from stay and abandonment or seek other appropriate relief from the Court on at least 10 days' notice. The final hearing on the motion for relief from stay was not held and was to be continued by agreement of counsel to a date to be fixed once the hearing on Debtor's motion for interim use of Cash Collateral has been heard. Mr. Knapp advised that he and Metiner G Kimel, Esq., at Kimel Law Offices, the attorney for the Debtor, have been working on a negotiated interim Cash Collateral order. Mr. Knapp requested that his motion for relief from stay be continued to a date after hearing on the motion for use of cash collateral, in the event the Cash Collateral order is not approved. On March 21, 2014, the Court scheduled for April 8 the hearing on Mr. Knapp?s motion for relief from stay, after the Debtor filed on March 19 an objection to U.S. Bank?s motion to terminate the stay. The Debtor stated that the Bank?s receiver has a possible sale of the Debtor?s interest in real property located at 100 E. Jackson Ave and 705 and 707 S. Pine St. , Ellensburg, WA, which pursuant to the contract, currently would need to close by April 15, 2014. The proposed sale, according to the Debtor, includes property in which U.S. Bank has no security interest, but was brought into the receivership estate by order of the Superior Court on Feb. 13, 2013. The Debtor said that the Property is necessary to an effective reorganization of the Debtor. U.S. Bank is represented by: John R. Knapp, Jr. Miller Nash LLP 4400 Two Union Square 601 Union Street Seattle, Washington 98101 E-mail: john.knapp@millernash.com About River-Bluff Enterprises Ellensburg, Washington-based River-Bluff Enterprises, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 14- 00843) on March 11, 2014. Metiner G Kimel, Esq., at Kimel Law Offices, in Yakima, Washington, serves as counsel. In its schedules, the Debtor disclosed $10,231,777 in total assets and $17,609,653 in total liabilities. This is River-Bluff's second bankruptcy filing in less than two years. The company previously sought bankruptcy protection (Bankr. E.D. Cal. Case No. 12-92017) in Modesto, California, in July 2012. The case was dismissed in 2013. * * * Gary W. Dryer, Assistant U.S. Trustee for Region 18, informed the U.S. Bankruptcy Court for the Eastern District of Washington that due to the lack of entities eligible to serve on the unsecured creditors' committee, the U.S. Trustee is not appointing an unsecured creditors' committee in the Chapter 11 case of River- Bluff Enterprises, Inc. RIVER-BLUFF ENTERPRISES: Revitalization Wants to End Receivership ----------------------------------------------------------------- Revitalization Partners, L.L.C., general receiver for certain assets of River-Bluff Enterprises, Inc., seeks authorization from the Hon. Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington to file a motion in Kittitas County Superior Court to terminate the receivership. The Receiver was appointed as general receiver over the real property commonly known as 100 East Jackson Avenue, Ellensburg, Washington. For the period Dec. 1, 2012 through Jan. 30, 2014, the Receiver and its counsel filed notices of intent to pay itemized statements of fees and expenses with Kittitas County Superior Court and served all fee statements upon the Debtor and its counsel. No objections to the monthly fee notices were filed with the Court. The Receiver made disbursements on the fee requests in accordance with applicable law and the provisions of the Receivership court order. The Receiver, as of the petition date, had not served a fee notice nor been paid for fees and expenses incurred in February and March 2014. The Receiver seeks approval of the Receiver?s fees and expenses of $17,014.76 for February and March 2014 (which include fees for anticipated final receivership windup and transition tasks). The Receiver continued its ongoing maintenance, tenant and vendor communication, accounting, and reporting through turnover of the property by March 24, 2014. The Receiver?s work in February and March included providing due diligence documents to James Perkins, communicating with Watermark and U.S. Bank regarding pending sale, responding to a heating outage, implementing the overbid process, reviewing Chapter 11 documents, evaluating and addressing payment history for slow-paying tenant, and providing documents and accounting files to the Debtor. The Receiver seeks approval of unpaid fees and expenses of his attorneys totaling $15,065.76 for February and March 2014. In February and March 2014, the Receiver?s counsel, David W. Criswell, Esq., at Ball Janik LLP, was primarily focused on obtaining Court approval of bid procedures in connection with the sale of the Property and addressing the State of Washington?s anticipated objection to the Receiver?s request for a determination that the sale was exempt from excise tax. Mr. Criswell said in a filing dated April 16, 2014, that he made efforts to resolve any concerns or objections of the Debtor to the proposed bid procedures, but the Debtor never responded to e-mail and phone inquiries. Mr. Crisswell stated that he had to travel from Portland, Oregon, to Ellensburg, Washington, for a hearing, where the Debtor raised minor objections to the bid procedures and the Court then entered a bid procedures order. The Receiver is represented by: David W. Criswell, Esq. Ball Janik LLP 101 SW Main Street, Suite 1100 Portland, OR 97204 Tel: (503) 228-2525 (503) 226-3910 E-mail: dcriswell@balljanik.com About River-Bluff Enterprises Ellensburg, Washington-based River-Bluff Enterprises, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 14- 00843) on March 11, 2014. Metiner G Kimel, Esq., at Kimel Law Offices, in Yakima, Washington, serves as counsel. In its schedules, the Debtor disclosed $10,231,777 in total assets and $17,609,653 in total liabilities. This is River-Bluff's second bankruptcy filing in less than two years. The company previously sought bankruptcy protection (Bankr. E.D. Cal. Case No. 12-92017) in Modesto, California, in July 2012. The case was dismissed in 2013. * * * Gary W. Dryer, Assistant U.S. Trustee for Region 18, informed the U.S. Bankruptcy Court for the Eastern District of Washington that due to the lack of entities eligible to serve on the unsecured creditors' committee, the U.S. Trustee is not appointing an unsecured creditors' committee in the Chapter 11 case of River- Bluff Enterprises, Inc. RIVER-BLUFF ENTERPRISES: Wants Berkadia & Chase Cash Collateral --------------------------------------------------------------- River-Bluff Enterprises, Inc., seeks authorization from the Hon. Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington to use the cash collateral of Berkadia Commercial Mortgage LLC and JP Morgan Chase Bank on an interim basis. The Banks will be provided replacement liens in the post- petition cash collateral. A hearing on the Debtor?s request to use Berkadia?s and Chase?s cash collateral is set for May 20, 2014, at 11:00 a.m. Objections to the motions must be filed by May 16, 2014. The Debtor says that use of: (i) Berkadia?s cash collateral is necessary for the Debtor to maintain and preserve the operations of the Debtor?s real property located at 142 N. 9th Street in Modesto, California, which is collateral for Berkadia; and (ii) Chase?s cash collateral is necessary for the Debtor to maintain and preserve the operations of the Debtor?s real properties located at 6500 Jackson Avenue, Riverbank, California, and 1317 Colorado Avenue, Turlock, California. On March 14, 2014, the Debtor closed its pre-petition accounts and opened a debtor-in-possession account with Chase. It transferred proceeds from its pre-petition bank accounts in California and subsequent post-petition collections to a debtor-in-possession account. Pursuant to discussions with the U.S. Trustee?s office, the Debtor is or has established separate debtor-in-possession bank accounts for each of the four real properties which it operates. The Debtor currently operates, in addition to the Ninth Street Commercial, real property located at (i) 6500 Jackson Avenue, Riverbank California; (ii) 1317 Colorado Avenue, Turlock, California; and (iii) 100 E. Jackson Street, Ellensburg, WA, which is collateral for U.S. Bank. Sierra Manor Apartments and the Plaza apartments are collateral for JP Morgan Chase Bank. Berkadia holds a security interest the Ninth Street Commercial and the Debtor believes, but does not admit that the cash flow generated by the Ninth Street Commercial, is Berkadia?s additional collateral as further set forth under the bank?s loan and security documents. As of the Petition Date, the Debtor believes that Berkadia?s secured claim against the Ninth Street Commercial totaled $1.39 million, and that the property had a fair value of $1.75 million. Chase holds a security interest the Sierra Manor, Apartments and the Plaza Apartments and the Debtor believes, but does not admit that the cash flow generated by the Sierra Manor, Apartments and the Plaza Apartments, are Chase?s additional collateral as further set forth under the Bank?s loan and security documents. As of the Petition Date, the Debtor believes that Chase?s secured claim against the Sierra Manor Apartments totaled $1.38 million and that the Sierra Manor Apartments had a fair value of $1.48 million. As of the Petition Date, the Debtor believes that Chase?s secured claim against the Plaza Apartments totaled $1,209,24031, and that the Plaza Apartments had a fair value of $1.20 million. The Debtor is proposing to continue to make payments to the Banks in accordance with the terms of the loan documents secured by the Ninth Street Commercial property, Sierra Manor Apartments and the Plaza Apartments. The Debtor submits that the Banks? interest in the cash collateral will be adequately protected by the future revenues generated by the Ninth Street Commercial property, Sierra Manor Apartments and the Plaza Apartments. About River-Bluff Enterprises Ellensburg, Washington-based River-Bluff Enterprises, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 14- 00843) on March 11, 2014. Metiner G Kimel, Esq., at Kimel Law Offices, in Yakima, Washington, serves as counsel. In its schedules, the Debtor disclosed $10,231,777 in total assets and $17,609,653 in total liabilities. This is River-Bluff's second bankruptcy filing in less than two years. The company previously sought bankruptcy protection (Bankr. E.D. Cal. Case No. 12-92017) in Modesto, California, in July 2012. The case was dismissed in 2013. * * * Gary W. Dryer, Assistant U.S. Trustee for Region 18, informed the U.S. Bankruptcy Court for the Eastern District of Washington that due to the lack of entities eligible to serve on the unsecured creditors' committee, the U.S. Trustee is not appointing an unsecured creditors' committee in the Chapter 11 case of River- Bluff Enterprises, Inc. RIVER ROCK: Fails to Make Schedule Interest Payment on Sr. Notes ---------------------------------------------------------------- The River Rock Entertainment Authority, an unincorporated governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians of California, a federally recognized Indian tribe, announced that it did not make the interest payment on the Authority's outstanding 9% Series A Senior Notes due 2018 and 8% Series B Tax-Exempt Senior Notes due 2018 scheduled to be made on May 1, 2014. ?Although the scheduled interest payment was not made, we want to assure our customers, vendors and employees that we are generating sufficient funds to operate our business and provide the excellent customer service that our patrons expect. Our immediate focus is identifying cost savings opportunities to adjust to the challenges of our new competitive environment,? said David Fendrick, Chief Executive Officer and General Manager of the River Rock Casino. Under the terms of the indenture governing the Senior Notes, the Authority has a 30 day grace period with respect to the interest payment. Failure to make the interest payment on or before May 31, 2014, would constitute an event of default under the Indenture. Upon the occurrence of an event of default, a Waterfall Period would commence and the Authority's cash flow will become subject to the terms of the Waterfall Agreement, dated as of December 21, 2011, among the Authority, the Tribe and Deutsche Bank Trust Company Americas, as the Trustee, the Subordinated Notes Trustee, the Collateral Trustee and the Depository, that was entered into as part of the exchange offer and consent solicitation for the Senior Notes. The Waterfall Agreement was attached as Exhibit 10.2 to the Authority's annual report for year ended December 31, 2011. The Authority has retainedthe law firm Holland & Knight LLP as its legal advisor and will use Stuyvesant Square Advisors, Inc. as its financial advisor. River Rock Entertainment Authority The Authority is a Tribal governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized self-governing Indian tribe. The Tribe has approximately 1,000 enrolled members and 93-acres of trust land in Sonoma County, California. RIVERWALK JACKSONVILLE: Section 341(a) Meeting Set on June 11 ------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Riverwalk Jacksonville Development, LLC, will be held on June 11, 2014, at 2:00 p.m. at 51 SW First Ave Room 1021, Miami. Creditors have until Sept. 9, 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. Riverwalk Jacksonville Development, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 14-19672) on April 28, 2014. Stevan J. Pardo signed the petition as managing member. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Geoffrey S. Aaronson, Esq., at Aaronson Schantz P.A. serves as the Debtor's counsel. Judge Laurel M Isicoff oversees the case. ROBERT GRIFFIN: Court Rules on Trustee's Bid to Enforce Accord -------------------------------------------------------------- In the Chapter 11 case of Robert and Julia Griffin, Bankruptcy Judge Ben Barry grants the request filed by Richard L. Cox, the chapter 11 trustee, to (i) enforce a settlement agreement between Arvest Bank; Robert and Julia Griffin; and four of Griffin's companies: Stinson, Inc. [Stinson], The Plantation, LLC, Sabram Estates West, LLC, and Silver Leaf East, LLC; and (ii) compel Arvest Bank's delivery of documents, but declines the relief requested. Instead, the Court specifically authorizes Arvest to pursue its contractual remedies pursuant to the August 4, 2011 Settlement Agreement, the Motion to Approve Compromise, and the Agreed Order Approving Compromise entered on October 17, 2011. Pursuant to Ark. Code. Ann. Sec. 16-22-308, the Court awards Arvest its attorneys fees and costs in this matter from the date of the debtors' breach of the settlement agreement on November 16, 2011, to the date of the entry of this order. The Court directs Arvest to file with the Court and serve upon the trustee and other parties in interest its application for attorneys fees and costs within 21 days of the entry of the order. If so inclined, the trustee and other parties in interest may file objections to Arvest's application within 21 days of Arvest's filing of its application. Each objection must state with specificity its legal and factual basis. If objections are timely filed, the Court will set a hearing by subsequent notice. A copy of the Court's April 28 Order and Opinion is available at http://is.gd/IOjyncfrom Leagle.com. Greenwood, Arkansas-based Robert and Julia Griffin filed for Chapter 11 bankruptcy protection on July 6, 2010 (Bankr. W.D. Ark. Case No. 10-73471). Derrick Mark Davidson, Esq., in Fayetteville, Arkansas, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million. Approximately two months later (on various dates in September 2010), Plantation, Stinson, Sabram Estates West, and Silver Leaf East -- along with 10 other companies also owned by Griffin -- filed chapter 11 bankruptcy cases. Prior to the debtors filing their respective chapter 11 cases, Arvest had obtained state court judgments against Plantation, Stinson, and Sabram Estates West. On Oct. 29, 2010, the Court modified the automatic stay in the LLC debtors' cases to require the LLC debtors to make monthly payments to Arvest by the 7th day of each month because the debtors had frustrated Arvest's collection efforts. The Court ordered the For Cause payments to commence on Dec. 7, 2010, and continue until plans of reorganization were confirmed. The Court specified that if the debtors failed to timely make any of the For Cause payments, Arvest would be entitled to again file motions for relief that, barring unusual circumstances, the Court would grant. None of the debtors filed plans of reorganization. On Aug. 4, 2011, Griffin, the LLC debtors, and Arvest entered into a two-page settlement agreement. Among other things, the Settlement Agreement provides that the LLC Debtors will convey their respective mortgaged properties to Arvest by Warranty Deed in consideration of the value determined by the Bankruptcy Court for purposes of interest payments. ROBERT RAEL: Contempt Motion Against Wells Fargo Denied ------------------------------------------------------- Wyoming Bankruptcy Judge Peter J. McNiff denied Robert Alyn Rael and Lisa Lynn Rael's Motion for Order to Show Cause and/or for Contempt Citation against Wells Fargo Bank, N.A. The Debtors allege that the Bank is in contempt for violating 11 U.S.C. Sections 362(a)(3), (5), and, (6); and the provisions of the Debtors' confirmed amended Chapter 11 plan of reorganization. The Debtors filed their chapter 11 bankruptcy petition, schedules and statements on May 1, 2008. The Debtors' Plan was confirmed on Jan. 20, 2010. Upon the Debtors filing a Final Report and Motion for Final Decree, the court entered the Final Decree and Order Closing Case on March 7, 2011. Thereafter, on June 14, 2011, Bank filed its Motion to Dismiss or Convert Case. The Debtors filed an objection on June 30, 2011 and an amended objection on Dec. 31, 2012, asserting that the case was closed; had not been reopened; and, the Bankruptcy Court did not have jurisdiction to grant the relief requested by the Bank. The court did not rule on this motion as the case was closed. The Debtors moved to reopen the case on May 28, 2013, to "allow Debtors to enforce the terms of the confirmed Plan and to bring contempt actions for violation of the Automatic Stay." On Oct. 15, 2013, the Debtors filed the Show Cause Motion. The court scheduled the evidentiary hearing, and after three joint motions to continue filed by the parties, the court heard the matter on April 9, 2014. After the Bank filed its Motion to Dismiss or Convert the case with the Bankruptcy Court and realizing the case was closed, it filed a Complaint in the Fifth Judicial District Court in Big Horn County, Wyoming against the Debtors, Lovell's American Car Care Center, LLC, and Professional Contractor's Inc. requesting specific performance as to LACCC and breach of contract against Debtors and Professional Contractors. On Feb. 23, 2012, the Debtors filed answers in the Wyoming District Court proceedings. The Wyoming District Court entered its judgment against the Debtors, LACCC and Professional Contractors on Sept. 6, 2012, finding for the Bank. Thereafter, Bank filed a Complaint for Declaratory Relief in the Wyoming District Court on Dec. 10, 2012 for a determination that Bank had a priority lien over the lien rights of all other defendants. The Debtors allege that Bank's actions of (1) filing the Enforcement Action; (2) failure to provide prior written notice to Debtors before filing the Enforcement Action; and, (3) filing the Declaratory Relief action violated the stay and Plan. In his April 28, 2014 Memorandum Opinion and Order available at http://is.gd/xmDAFwfrom Leagle.com, Judge McNiff held that the court does not have post-confirmation "related to" jurisdiction over the Enforcement Action. A state court remedy was appropriate. Judge McNiff also said he does not find that the Bank violated the automatic stay, discharge injunction or provisions of the Plan. Robert Alyn Rael and Lisa Lynn Rael filed for Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 08-20251) on May 1, 2008, listing under $1 million in both assets and debts. A copy of the petition is available at http://bankrupt.com/misc/wyb08-20251.pdf ROCKET SOFTWARE: S&P Affirms 'B' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Waltham, Mass.-based Rocket Software Inc. The outlook is stable. At the same time, S&P withdrew its issue-level and recovery ratings on the company's proposed $25 million revolving credit facility due 2019, $550 million first-lien term loan due 2020, and $175 million second-lien term loan due 2021. S&P also lowered its issue-level rating on Rocket's $359 million first-lien term loan due 2018 and $25 million revolving credit facility due 2017 to 'BB-' from 'BB'. The '1' recovery rating is unchanged and reflects S&P's expectation for very high (90% to 100%) recovery in the event of payment default. In addition, S&P revised its recovery rating on the company's $105 million second-lien term loan due 2019 to '4' from '5'. The '4' recovery rating reflects S&P's expectation for average (30% to 50%) recovery in the event of payment default. The corporate credit rating on Rocket is based on the company's "highly leveraged" financial risk profile, which is capped by S&P's "financial sponsor-6" financial policy assessment, reflecting the company's willingness to incur leverage above 5x demonstrated by its proposed dividend recapitalization. The rating also reflects the company's "fair" business risk profile driven by its niche position in the market for infrastructure software and the presence of larger and better funded competitors, partially offset by its high recurring revenue and above average profitability. The lowering of the issue-level rating on Rocket's first-lien credit facilities reflects its '1' recovery rating which results in an issue-level rating that is two notches above the corporate credit rating. The revision of the recovery rating on the company's second-lien term loan reflects a higher recovery value resulting from S&P's revision of the purchase multiple to 6x from 5.5x in its simulated default scenario, discussed in its recovery report on Rocket published April 23, 2014, on RatingsDirect. Rocket provides enterprise software products and solutions in the following four areas: database servers and tools; application development, integration, and modernization; business intelligence and analytics; and storage, networks, and compliance. The company benefits from a significant relationship with a large original equipment manufacturer (OEM) partner, from which it generates a quarter of total revenues, although the share of revenues from this partner has declined significantly as Rocket has grown. Besides the larger OEM partner mentioned above, the company does not have meaningful customer or partner concentration. SARKIS INVESTMENTS: Taps GlassRatner as Financial Advisors ---------------------------------------------------------- Sarkis Investments Company LLC asks the U.S. Bankruptcy Court for the Central District of California for permission to employ GlassRatner Advisory & Capital Group LLC as financial advisor. The firm will: a) assist in the formulation and preparation of the Debtor's disclosure statement and plan of reorganization, including the financial projections and supporting methodology, key assumptions and rationale, appropriate financial analysis and evaluation of the Debtor's operations, and supporting financial statements and pro-forma budget and projections; b) prepare supporting documents relative to financial projections necessary for the bankruptcy process, including, if necessary, a written report summarizing the methodology, key assumptions and finings; c) assist the Debtor and the Debtor's counsel with respect to negotiating with holders of unsecured claims and responding to any objections to the bankruptcy plan by any claim holders, if and as necessary; d) assist the Debtor and its counsel in preparing or responding to any competing disclosure statements and chapter 11 plan; e) assist in modifying the plan and disclosure statement as appropriate or required; f) if required, conduct, prepare and provide expert-witness evaluations and opinions, declaration and reports, depositions and in-court testimony with respect to the feasibility of the Debtor's plan within the meaning of the Bankruptcy Code; and g) perform financial advisory services as may be otherwise required to serve the best interests of the Debtor and the bankruptcy estate. The firm's professionals and their respective hourly rates: Adam Meislik Senior Managing Director $450 Patrick Lacy Senior Associate $235 Other consultants $175-$450 The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Messrs. Meislik and Lacy can be reached at: Adam Meislik Patrick Lacy GLASSRATNER ADVISORY & CAPITAL GROUP LLC 4550 California Avenue, 2nd Floor Bakersfield, CA 93309 Tel: 661-665-2010 Fax: 800-915-0605 E-mail: ameislik@glassratner.com placy@glassratner.com Website: http://www.glassratner.com/ About Sarkis Investments Company, LLC Sarkis Investments Company, LLC, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-29180) on July 29, 2013. Sarkis owns and leases several parcels of commercial real property in Ontario, California: 3550 Porsche Way; 3640 Porsche Way; 3660 Porsche Way; 3700 Inland Empire Blvd; and 3760 Inland Empire Blvd. Judge Robert Kwan presides over the case. Pamela Muir signed the petition as manager. The Debtor estimated assets and debts of at least $10 million. Ashley M. McDow, Esq., at Baker & Hostetler, LLP, serves as the Debtor's counsel. Patrick Galentine was appointed by a state court as receiver for the Debtor's assets. The receiver is represented by Reed Waddell, Esq., at Frandzel Robins Bloom & Csato, LC. MSCI 2007-IQ13 Ontario Retail Limited Partnership, which initiated the receivership proceedings against Sarkis in state court, is represented by Ron Oliner, Esq., at Duane Morris LLP. According the Amended Disclosure Statement filed on March 5, 2014, the Debtors seeks to accomplish payments under the plan by paying creditors on account of their allowed claims in full over time from cash flows generated from future operations or the proceeds from the sale of the Company or the properties. SARKIS INVESTMENTS: MSCI Balks at Bid to Retain GA Keen Realty -------------------------------------------------------------- Secured Creditor MSCI 2007-IQ13 Ontario Retail Limited Partnership objects to the request of Sarkis Investment Company LLC to employ GA Keen Realty Advisors LLC as real estate broker. In a filing with the U.S. Bankruptcy for the Central District of California, the secured creditor raised five problems with the Debtor's request, including: i) unspecified source of funding for GA Keen's proposed $27,000; ii) prerequisites to GA Keen receiving a proposed springing commission for a period of time after the retention agreement's six month term expires, and iii) GA Keen's proposed entitlement to a carve-out under 11 U.S.C. Sec. 506(c). Aron M. Oliner, Esq., at Duane Morris LLP, represents the Secured Creditor. Mr. Oliner can be reached at: Aron M. Oliner, Esq. DUANE MORRIS LLP One Market, Spear Tower, Suite 2200 San Francisco, CA 94105-1127 Tel: +1 415 957 3104 Fax: +1 415 520 5308 Email: roliner@duanemorris.com As reported in the Troubled Company Reporter on Feb. 6, 2014, GA Keen will have the exclusive right to offer the Property, specifically, 3550 Porsche Way, 3640 Porsche Way, 3660 Porsche Way, 3700 Inland Empire Boulevard, and 3760 Inland Empire Boulevard, Ontario CA 91764, for sale for a term of six months, from Jan. 22, 2014 to July 22, 2014. In the course of its employment, GA Keen will also render these services to the Estate, among others: (a) evaluating the value and marketability of the Property; (b) listing the Property for sale; (c) marketing and otherwise advertising the Property for sale; (d) communicating with parties interested in viewing and offering to purchase the Property; (e) showing or otherwise marketing the Property to potential buyers; (f) negotiating the terms of any agreement or other documentation pertaining to the acquisition of the Property in concert with the Debtor's counsel; (g) cooperating with the Debtor in seeking Court approval of any proposed sale of the Property; and (h) providing any other services reasonably requested by the Debtor necessary to effectively market and consummate the sale of the Property. The Debtor will provide a $27,000 advance to GA Keen for marketing expenses associated with the listings and advertising of the Property. GA Keen will receive a full and complete compensation for its services to the Estate an amount equal to 1.25% of the total gross consideration paid for the Property. GA Keen's compensation is contingent on the sale of the Property and Court approval vis-a- vis any seeking approval to sell the Property pursuant to 11 U.S.C. Section 363 and other applicable law. If the Debtor deems in its solely discretion that reorganization serves the best interests of the Estate and its creditors, as opposed to liquidating the Property, GA Keen shall not receive any compensation; however, in such case, GA Keen will not be required to reimburse the Estate for or return the Marketing Advance unless otherwise ordered by the Court. Mark P. Naughton, senior vice president and general counsel of Great American Group, the parent company of 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: Harold Bordwin GA KEEN REALTY ADVISORS, LLC Graybar Building 420 Lexington Avenue, Suite 3001 New York, NY 10170 Tel: (646) 381-9201 E-mail: hbordwin@greatamerican.com About Sarkis Investments Company, LLC Sarkis Investments Company, LLC, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-29180) on July 29, 2013. Sarkis owns and leases several parcels of commercial real property in Ontario, California: 3550 Porsche Way; 3640 Porsche Way; 3660 Porsche Way; 3700 Inland Empire Blvd; and 3760 Inland Empire Blvd. Judge Robert Kwan presides over the case. Pamela Muir signed the petition as manager. The Debtor estimated assets and debts of at least $10 million. Ashley M. McDow, Esq., at Baker & Hostetler, LLP, serves as the Debtor's counsel. Patrick Galentine was appointed by a state court as receiver for the Debtor's assets. The receiver is represented by Reed Waddell, Esq., at Frandzel Robins Bloom & Csato, LC. MSCI 2007-IQ13 Ontario Retail Limited Partnership, which initiated the receivership proceedings against Sarkis in state court, is represented by Ron Oliner, Esq., at Duane Morris LLP. According the Amended Disclosure Statement filed on March 5, 2014, the Debtors seeks to accomplish payments under the plan by paying creditors on account of their allowed claims in full over time from cash flows generated from future operations or the proceeds from the sale of the Company or the properties. SDNY 19 MAD PARK: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: SDNY 19 MAD PARK, LLC d/b/a SD26 Restaurant & WineBar 15 East 26th Street New York, NY 10010 Case No.: 14-11055 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Julie Cvek Curley, Esq. DELBELLO DONNELLAN WEINGARTERN WISE & WIEDERKEHR, LLP One North Lexington Avenue, 11th Floor White Plains, NY 10601 Tel: (914) 681-0200 Fax: (914) 684-0288 Email: jcurley@ddw-law.com - and - Jonathan S. Pasternak, Esq. DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP One North Lexington Avenue White Plains, NY 10601 Tel: (914) 681-0200 Fax: (914) 684-0288 Email: jpasternak@ddw-law.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Anthony Magliulo, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. SIMPLEXITY LLC: Gets Court Approval to Sell Assets to Wal-Mart -------------------------------------------------------------- The Hon Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved the sale of certain equipment, intellectual property, contract rights and other assets of Simplexity, LLC, and Simplexity Services LLC, to Wal-Mart Stores, Inc., pursuant to the asset purchase agreement dated March 20, 2014. Under the agreement, Wal-Mart will pay $10 million and assume liabilities. Closing of the deal will be held at the Offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue in New York. The Court found that the total consideration provided by Wal-Mart is fair and reasonable, and will provide a greater recovery to the Debtors' creditors that would be provided by any other available alternative. Wal-Mart served as stalking horse bidder for the assets. It was declared the successful bidder pursuant to the court-approved bidding procedures. The Court held a hearing to approve the sale on April 30. The Debtors assured the Court that Wal-Mart is not an "insider" or "affiliate". The Court also ruled that appointment of a consumer privacy ombudsman is not required. All objections that have not been withdrawn, waived or settled have been overruled, including the objections raised by Roberta A. DeAngelis, U.S. Trustee for Region 3; the Official Committee of Unsecured Creditors; Reliance Communications LLC; Sprint Solutions Inc.; Microsoft Corporation, and its wholly-owned affiliate, Microsoft Licensing, GP; Staples Inc., Staples Contract & Commercial Inc. and other subsidiaries of Staples Inc.; and Clearpath Solutions Group, LLC and Clearpath Hosting, LLC. The Sale Order preserves the security interests, claims to ownership and euqpment that the Clearpath entities may assert against the Debtors. The Order also provides that the Purchased Assets won't include any accounts receivable or any other asset that purportedly evidences a payment obligation owed by any of Cellco Partnership d/b/a Verizon Wireless or its subsidiaries to the Debtors. The Debtors' 2012 software services agreement with Oracle LLC and Oracle America Inc. is considered a deferred contract, and Wal- Mart will pay Oracle $17,572 on or before the closing date of the sale, on account of postpetition amounts due under the agreement until the earlier of the rejection deferral date or the date the agreement is rejected. If Wal-Mart assumes the agreement, it will pay Oracle $17,627for the remaining cure cost. Staples Inc. has asserted that certain assets of the Debtors, which may be transferred to Wal-Mart contain non-buyer data or information that Staples or its affiliates has an ownership interest. The Sale Order provides that in the event the assets purportedly containing the data remains with the Debtors following the Closing, at the request of Staples Inc., the Debtors will return the data or copies thereof to Stales or destroy the data, with Staples paying for reasonable out of pocket costs related to the return or destruction of data. The Order also provides that the Purchaser and the Debtors are not and will not become obligated to pay any fee, commission or like payment to any broker, finder or financial advisor as a result of the consummation of the sale. A full-text copy of the Court's Sale Order and the Asset Purchase Agreement is available for free at http://is.gd/0X402X About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at HUNTON & WILLIAMS LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. Simplexity LLC disclosed $14,417,331 in assets, and $61,593,579 in liabilities. Simplexity Services LLC reported $8,941,387 in assets and $36,972,706 in liabilities. Adeptio INC Holdings LLC also reported $105,199 in assets and $32,014,086 liabilities. SIRIUS XM: Moody's Rates New $750MM Senior Unsecured Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned B1 to Sirius XM Radio Inc.'s proposed $750 million senior unsecured notes. Most of the net proceeds from the new notes are expected to repay $730 million of outstandings under the company's $1.25 billion senior secured revolving credit facility (unrated). In addition, Moody's affirmed the company's Ba3 Corporate Family Rating (CFR), Ba3-PD Probability of Default Rating as well as all existing instrument ratings. The B1 rating on the proposed and existing senior unsecured notes reflects their effective subordination to the unrated secured revolver and the 5.25% senior secured notes. The rating outlook is stable. Assigned: Issuer: Sirius XM Radio Inc. NEW $750 million Senior Unsecured Notes: Assigned B1, LGD4-63% Affirmed: Issuer: Sirius XM Radio Inc. Corporate Family Rating: Affirmed Ba3 Probability of Default Rating: Affirmed Ba3-PD Speculative Grade Liquidity Rating: Affirmed SGL -- 1 5.25% sr secured notes due 2022 ($400 million outstanding): Affirmed Baa3, LGD1 -- 8% (from LGD2 -- 12%) 4.25% sr unsecured notes due 2020 ($500 million outstanding): Affirmed B1, LGD4 -- 63% (from LGD4 -- 68%) 5.875% sr unsecured notes due 2020 ($650 million outstanding): Affirmed B1, LGD4 -- 63% (from LGD4 -- 68%) 5.75% sr unsecured notes due 2021 ($600 million outstanding): Affirmed B1, LGD4 -- 63% (from LGD4 -- 68%) 4.625% sr unsecured notes due 2023 ($500 million outstanding): Affirmed B1, LGD4 -- 63% (from LGD4 -- 68%) Outlook: Issuer: Sirius XM Radio Inc. Outlook is Stable Ratings Rationale Sirius' Ba3 corporate family rating reflects moderate leverage (3.5x debt-to-EBITDA as of March 31, 2014, including Moody's standard adjustments and pro forma for the new notes) and expectations for free cash flow of more than $950 million over the next 12 months. Despite the increase in debt-to-EBITDA from 2.8x as of March 31, 2013, leverage ratios along with other credit metrics remain within its Ba3 rating. Since the beginning of 2013, the company increased funded debt balances by $1.4 billion and repurchased roughly $2.3 billion of common stock on the open market under its $4 billion common share repurchase program. Most recently, in April 2014, the company funded $340 million in share repurchases and completed the $500 million program to buy back a portion of shares owned by Liberty Media Corporation. Moody's believes that, despite the potential for higher debt balances to fund additional distributions, financial metrics will remain within the Ba3 rating, due in part to revenue and EBITDA growth largely from an increase in the company's self-pay subscriber base supported by sustained deliveries of light vehicles in the U.S. over the next 12 months as well as from the addition of subscribers in the used car segment. Liquidity is strong with more than $100 million of cash balances, good availability under the $1.25 billion revolving credit facility, and no significant debt maturities until 2017. Sirius has been positioning itself for enhanced financial flexibility over the past 18 months. Notes issued since the beginning of 2013 totaling $2.25 billion are covenant-lite with no limitations on restricted payments nor debt issuances. In April 2014, the company provided collateral to the 5.25% notes issued in 2012 thereby eliminating the incurrence tests for restricted payments and additional indebtedness. Separately, the $1.25 billion credit agreement limits restricted payments with a recently amended 4.50x total leverage incurrence test (previously 3.50x) and limits total leverage to 5.0x (as defined). The formation of a new holding company in November 2013 provides additional flexibility for raising incremental debt. The stable outlook reflects Moody's view that Sirius will increase its self-pay subscriber base reflecting sustained demand for new vehicles in the U.S. and growing availability of satellite radio in used cars, resulting in higher revenue and EBITDA over the next 12 months. The outlook incorporates Sirius maintaining good liquidity, even during periods of satellite construction, the potential for leverage to increase above current levels consistent with management's leverage target of 4.0x (as reported), and the likelihood of share repurchases or additional dividends being funded from revolver advances, new debt issuances, or free cash flow. The outlook does not incorporate leveraging transactions or a level of shareholder distributions that would negatively impact liquidity or sustain debt-to-EBITDA ratios above 4.25x (including Moody's standard adjustments). Ratings could be downgraded if Moody's expects debt-to-EBITDA ratios will be sustained above 4.25x (including Moody's standard adjustments) or if free cash flow generation falls below targeted levels as a result of subscriber losses due to a potentially weak economy or migration to competing media services (e.g. CarPlay from Apple Inc., Pandora, Spotify), or due to functional problems with satellite operations. A weakening of Sirius' liquidity position below expected levels as a result of dividends, share repurchases, capital spending, or additional acquisitions could also lead to a downgrade. Ratings could be upgraded if management demonstrates a commitment to balance debt holder protections with shareholder returns. Moody's would also need assurances that the company will operate in a financially prudent manner consistent with a higher rating including sustaining debt-to-EBITDA ratios below 3.25x (including Moody's standard adjustments) and free cash flow-to-debt ratios above 12% even during most periods of satellite construction. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries methodology published in May 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. Sirius XM Holdings Inc., headquartered in New York, NY, provides satellite radio services in the United States and Canada. The company creates and broadcasts commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and comprehensive Latin music, sports and talk programming. SiriusXM services are available in vehicles from every major car company in the U.S., and programming is also available online as well as through applications for smartphones and other connected devices. The company holds a 37% interest in SiriusXM Canada which has more than 2 million subscribers. Sirius is publicly traded and a controlled company of Liberty Media Corporation which owns just over 50% of common shares. Sirius reported 25.8 million subscribers, including 21.3 million self-pay subscribers as of March 31, 2014 and generated revenue of $3.9 billion for the trailing 12 months ended March 31, 2014. SIRIUS XM: S&P Assigns 'BB' Rating to $750MM Sr. Notes Due 2024 --------------------------------------------------------------- Standard & Poor's Ratings Services assigned New York City-based satellite radio company Sirius XM Radio Inc.'s proposed issuance of $750 million senior notes due 2024 an issue-level rating of 'BB', with a recovery rating of '3'. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. S&P expects the company will initially use proceeds to repay revolving credit facility borrowings and ultimately to fund share repurchases. The rating on Sirius XM Radio incorporates S&P's expectation that leverage will not increase above our 4.5x threshold for the company at this rating, because of its good operating outlook and growing discretionary cash flow, and despite moves to boost shareholder returns. S&P assess Sirius' business risk profile as "fair," reflecting its stable subscriber churn, dependence on U.S. new auto sales and consumer discretionary spending for growth, and its intermediate-term vulnerability to competition from alternative media. "Our "significant" financial risk profile assessment is based on the company's more aggressive financial policy since Liberty Media Corp. assumed majority control of Sirius XM in January 2013. Sirius XM paid a $327 million special dividend in December 2012, repurchased $1.76 billion of shares in 2013, and spent $530 million to acquire Agero's connected vehicle business. In January 2014, Liberty Media had proposed purchasing the remaining 47% public equity stake, but withdrew the offer in March 2014. Liberty Media now owns slightly more than 50% of Sirius XM's zquity, following its April 2014 sale to Sirius XM of $340 million of Sirius XM's common stock. The transaction completed a $500 million total repurchase authorization by Sirius of Liberty Media's holdings since October 2013," S&P said. Pro forma for the proposed senior note issuance and repayment of $730 million of revolving credit facility borrowings outstanding as of April 30, 2014, gross debt to EBITDA increased to 3.2x at March 31, 2014, from an actual level of 2.8x. Sirius XM still has $1.7 billion remaining under its existing stock repurchase program authorization, which could include additional purchases of Liberty Media's holdings. S&P believes that some risk still surrounds Liberty Media's long-term financial strategy and its potential effect on Sirius XM, though S&P do not expect leverage to increase above its 4.5x threshold for Sirius at the current rating. RATINGS LIST Sirius XM Radio Inc. Corporate Credit Rating BB/Stable/-- New Rating Sirius XM Radio Inc. Senior Unsecured $750M notes due 2024 BB Recovery Rating 3 SLM CORP: S&P Cuts ICR to BB on Spin-Off; Changes Name to Navient ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it removed its ratings on SLM Corp. from CreditWatch, where it had placed them with negative implications on May 29, 2013. S&P lowered the issuer credit ratings on the company to 'BB/B' from 'BBB-/A-3'. The outlook is stable. S&P also lowered the ratings on the company's unsecured debt and preferred stock to 'BB' and 'B', respectively. S&P is subsequently withdrawing the 'B' preferred stock rating at the request of the company. After the separation, the company's name will change to Navient LLC. S&P is also assigning 'BB/B' long- and short-term issuer credit ratings to Navient Corp. The outlook is stable. SLM Corp. will complete its separation into two publicly traded companies: SLM Corp. and Navient Corp. Leading up to the separation, the company merged its existing holding company (existing SLM Corp.) into a subsidiary, Navient LLC, which will become a wholly owned subsidiary of Navient Corp. (Navient) upon separation. The company also made Sallie Mae Bank's holding company (SLM BankCo) the new primary holding company and renamed it SLM Corp. One business will be an education loan management business, Navient, which holds most of the former SLM Corp.'s assets and liabilities, including its rated unsecured debt, that was outside of Sallie Mae Bank. The other business, SLM Corp., will be a consumer banking business that holds the private education loans currently in the bank, the company's preferred stock, and related origination and servicing platforms. Going forward, S&P will only rate Navient. Navient will specifically include the Federal Family Education Loan Program (FFELP) portfolio, legacy private education loans, the Department of Education (ED) direct federal student loans servicing business, and a number of fee-based servicing and collections businesses, some of which are also in runoff. "Overall, we believe Navient's credit profile will be worse than the combined entity because it will likely more aggressively return capital to shareholders, it will have significant refinancing risk considering its large reliance on unsecured debt, and there is heightened uncertainty surrounding how the company will evolve as its core FFELP portfolio runs off over the course of several years," said Standard & Poor's credit analyst Kevin Cole. S&P believes Navient will have a more aggressive stance on enhancing shareholder value as part of the company's strategy of returning legacy business capital to investors. The company has already announced that it will maintain the same quarterly dividend as the former SLM Corp. ($0.15 per share) and target a 30% dividend payout ratio. S&P expects the company's total shareholder payout to increase as a proportion of earnings as company seeks to return what it sees as excess capital to shareholders. S&P's stable outlook reflects its expectation that Navient will maintain adequate capital against its student loan portfolio (roughly 12% against private education loans; 0.5% against FFELP) while it focuses on returning capital to shareholders. S&P sees the company slowly running off its FFELP portfolio and potentially replacing most of the private education loan portfolio runoff with purchases from the new SLM Corp. If the company were to return more capital to shareholders than S&P expects, or increase leverage by issuing debt above the amount coming due, S&P could lower the rating. In addition, S&P could lower the rating if the company accelerates its FFELP portfolio rundown by selling its residual interests and S&P believes that it will not use an appropriate amount of the proceeds to retire unsecured debt. S&P could also downgrade the company by multiple notches if ED did not renew Navient's student loan serving contract, or legislative and regulatory actions materially weakened S&P's expectation for the company's ability to generate fee-based cash flow. The regulatory and legal risk related to current investigations and future Consumer Financial Protection Bureau and congressional actions would need to recede before S&P would consider raising its ratings on Navient. S&P would need to see a lengthy track record of prudent capital management and non-FFELP-related fee-income growth. Therefore, S&P believes it is unlikely that it would raise the ratings in the next two years. SMD TRUST: Case Summary & 6 Unsecured Creditors ----------------------------------------------- Debtor: SMD Trust Dated July 6, 1988 PO Box 9203 Kansas City, MO 64168 Case No.: 14-41277 Chapter 11 Petition Date: April 15, 2014 Court: United States Bankruptcy Court Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Colin N. Gotham, Esq. EVANS & MULLINIX, P.A. 7225 Renner Road, Suite 200 Shawnee, KS 66217 Tel: 913-962-8700 Fax: 913-962-8701 Email: Cgotham@emlawkc.com Total Assets: $1,060 Total Liabilities: $2.16 million The petition was signed by Shane Danner, successor trustee. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/mowb14-41277.pdf STANADYNE CORP: S&P Puts 'CCC' CCR on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'CCC' corporate credit ratings on Stanadyne Corp. (Stanadyne) and its parent, Stanadyne Holdings Inc., on CreditWatch with positive implications. S&P did not place the issue rating on Stanadyne's rated debt on CreditWatch because it expects the company to retire the outstanding debt using the proceeds from the planned division sale. "The CreditWatch placements follow Stanadyne's announcement that it has signed a definitive agreement to sell its filtration business to Clarcor Inc. (not rated) for about $325 million," said Standard & Poor's credit analyst Dan Picciotto. "We expect Stanadyne to use the proceeds to repay debt obligations that have looming maturities in 2014 and 2015." If Stanadyne consummates the transaction and retires the debt, S&P could raise the rating on the company. The 'CCC' corporate credit rating reflects the risks of a default associated with these looming maturities. The issue-level ratings are not affected because S&P expects that the existing rated debt will be repaid as part of the transaction. The CreditWatch placements reflect S&P's expectation that it will likely raise its corporate credit ratings on both companies upon completion of the sale and repayment of the rated debt, and following a review of the remaining company. Subject to a review and upon closing of the transaction, S&P would likely raise the corporate credit ratings to 'B-'. SUN BANCORP: Amends 2013 Annual Report -------------------------------------- Sun Bancorp, Inc., amended its annual report on Form 10-K for the fiscal year ended Dec. 31, 2013, originally filed with the U.S. Securities and Exchange Commission on March 14, 2014, to include the information required by and not included in Part III of the Original Filing because it was incorporated by reference from the Company's Proxy Statement which, as of the date of the Original Filing, the Company intended to file within 120 days of the end of its fiscal year but which will not be filed by that deadline. A copy of the Form 10-K/A is available for free at: http://is.gd/dyPnrm About Sun Bancorp Sun Bancorp, Inc. (NASDAQ: SNBC) is a bank holding company headquartered in Vineland, New Jersey, with its executive offices located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service commercial bank serving customers through more than 60 locations in New Jersey. On April 15, 2010, Sun National Bank entered into a written agreement with the OCC which contained requirements to develop and implement a profitability and capital plan which provides for the maintenance of adequate capital to support the Bank's risk profile in the current economic environment. Sun Bancorp incurred a net loss available to common shareholders of $9.94 million in 2013, a net loss available to common shareholders of $50.49 million in 2012 and a net loss available to common shareholders of $67.50 million in 2011. As of Dec. 31, 2013, the Company had $3.08 billion in total assets, $2.84 billion in total liabilities and $245.33 million in total shareholders' equity. "Although we have taken a number of steps to reduce our credit exposure, at December 31, 2013, we had approximately $40.5 million in nonperforming assets and it is possible that we will continue to incur elevated credit costs over the near term, which would adversely impact our overall financial performance and results of operations. We cannot assure you that we will return to profitability in the near term or at all," the Company said in the annual report for the year ended Dec. 31, 2013. TAMPA WAREHOUSE: Gets Approval to Extend Term of CBRE Agreement --------------------------------------------------------------- Tampa Warehouse, LLC received approval from U.S. Bankruptcy Judge Laura Beyer to extend the term of its listing agreement with CB Richard Ellis, Inc. to June 30. CBRE has held an exclusive leasing listing agreement on an industrial warehouse facility owned and managed by Tampa since November 2002. CBRE markets the property located in Tampa, Florida to potential lessors and/or purchasers. 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. Michael R. Nash, CPA, PLLC, serves as accountants. The Bankruptcy Administrator said in December that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the case. Jimmy R. Summerlin, Jr., Esq., at Young, Morphis, Bach & Taylor, LLP, represents lender Regions Bank. TAMPA WAREHOUSE: Gets Approval to Execute Agreement With CBRE ------------------------------------------------------------- Tampa Warehouse, LLC received court approval of a management agreement, under which CBRE Inc. will take over the operational management of an industrial warehouse owned by the company. Tampa entered into the agreement with CBRE pursuant to a prior court order, which approved a compromise between the company and Regions Bank on the use of cash collateral and several other issues. The same order required Tampa to select a third-party management firm to assume the operational management of the warehouse located in Tampa, Florida. Regions Bank holds a first-priority mortgage on the property, which secures a pre-bankruptcy loan obligation of approximately $18 million. 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. Michael R. Nash, CPA, PLLC, serves as accountants. The Bankruptcy Administrator said in December that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the case. Jimmy R. Summerlin, Jr., Esq., at Young, Morphis, Bach & Taylor, LLP, represents lender Regions Bank. TASC INC: S&P Revises Outlook to Negative & Affirms 'B' CCR ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Chantilly, Va.-based TASC Inc. to negative from stable and affirmed the corporate credit rating at 'B'. At the same time, S&P assigned its 'B+' issue-level rating on the company's proposed $482 million senior secured first-lien credit facilities, which consists of a $50 million revolving credit facility due 2019 and a $432 million term loan due 2020. The recovery rating is '2' and indicates S&P's expectation for substantial (70% - 90%) recovery in the event of a payment default. At the same time, S&P assigned its 'CCC+' issue-level rating on the company's proposed $200 million senior secured second lien credit facility. The recovery rating is '6' and indicates S&P's expectation for negligible (0% - 10%) recovery in the event of a payment default. There will be maintenance covenants on both the first- and second- lien senior secured credit facilities. Ratings are based on preliminary documentation and are subject to review of final documents. The rating on TASC reflects the company's "fair" business risk profile, incorporating the company's focus on intelligence sector contracts, which are usually forged with long-term industry partners and are generally competed for based on value rather than price. The rating also reflects TASC's diversified contract and task orders from different U.S. federal and civil government agencies. Still, the company faces headwinds from the continued government budget pressure over the intermediate term, and it competes against much larger players with greater financial resources and broader technical capabilities. S&P views the company's financial risk profile as "highly leveraged", which reflects its expectation of debt-to-EBITDA increasing to the mid-6x area, from the 5x area currently, primarily due to the loss of two large contracts in the first half of 2013 and also program contractions and pricing pressure that is prevalent in the government contracting environment. S&P views the industry risk as "intermediate" and the country risk as "very low." S&P's assessment of the company's management and governance is "fair." TELEPHONE & DATA SYSTEMS: Demoted to Highest Junk Status -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Telephone & Data Systems Inc., the 84 percent parent of United States Cellular Corp., lost investment-grade status on April 4, when Standard & Poor's reduced the corporate rating by one grade to BB+, the highest status in junk. According to Mr. Rochelle, the Chicago-based company was downgraded in view of free operating cash flow that S&P said may remain negative until 2017. Competition was another factor. U.S. Cellular got a similar downgrade and has a BB+ corporate rating, the report said. TENNECO INC: S&P Raises CCR to 'BB+' on Improved Profitability -------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Lake Forest, Ill.-based auto supplier Tenneco Inc. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised its issue rating on the company's senior secured debt to 'BBB' from 'BBB-'. The '1' recovery rating on the debt remains unchanged, indicating S&P's expectation for very high recovery (90%-100%) in the event of a payment default. S&P also raised its issue rating on the company's senior unsecured debt to 'BB' from 'BB-'. The '5' recovery rating on the debt remains unchanged, indicating S&P's expectation for modest recovery (10%-30%) in the event of a payment default. "The upgrades are based on the company's 'intermediate' financial risk profile, reflecting declining debt leverage, steady cash flow, and strong liquidity," said Standard & Poor's credit analyst Lawrence Orlowski. "We expect debt to EBITDA to be significantly below 2x by year-end 2014 and to remain below 3x over the long term." In addition, the company has consistently generated free operating cash flow (FOCF) over the years. As of year-end 2013, FOCF to debt was 17.6%. Nevertheless, although S&P expects FOCF to debt to decrease to less than 10% in 2014 as capital expenditures rise as the company prepares for future product launches, we expect this ratio to increase to more than 10% in 2015. The upgrades also reflect S&P's "fair" business risk profile assessment, which incorporates the company's global position as a leading supplier of clear air and ride control products. S&P believes Tenneco is the No. 1 and No. 2 supplier of emissions control and ride control equipment to original equipment manufacturers (OEMs) in North America and Europe, respectively. Since the clear air segment generates about two-thirds of revenue, Tenneco especially benefits from the increasingly stringent regulations worldwide aimed at reducing vehicle tailpipe emissions. The outlook is stable. S&P assumes that Tenneco will maintain a debt to EBITDA of less than 3x and be able to generate FOCF to debt of at least 10% over the rating cycle. While unlikely, S&P could lower the rating if, for example, global vehicle demand began to decline, thereby weakening the company's ability to keep leverage below 3x. S&P could also lower the rating if it was to believe that the company could not generate enough FOCF to be in line with its expectations for the "intermediate" financial risk profile assessment. This could occur if, for instance, revenue decreased 10% in 2014 and the gross margin fell to less than 13%. To raise the rating to investment grade ('BBB-' and higher), S&P would need to believe that the company's business model would be comfortably resilient over the long term--including during industry downturns--and that its profitability is improving. S&P would look for double-digit EBITDA margins, reflecting a strengthening competitive position and consistent execution. Moreover, S&P would expect the company to sustain FOCF to adjusted debt of more than 15% and debt to EBITDA at or less than 2x on a sustainable basis. This could occur if, for example, the company's revenues rose more than 5% in 2014 and gross margins were more than 17%. S&P believes it is unlikely it would raise the rating in the coming year. THORNBURG MORTGAGE: Default Judgment in "Lee" Suit Set Aside ------------------------------------------------------------ Magistrate Judge Nathanael M. Cousins ruled on motions for default judgment filed by pro se plaintiff Susan Lee against three defendants -- Thornburg Mortgage Home Loans Inc., TMST Home Loans, Inc. formerly known as Thornburg Mortgage Home Loans Inc., and Bank of America, N.A., as well as those defendants' motions to set aside default. In an April 29 Order available at http://is.gd/cHatyhfrom Leagle.com, the Court finds that there is good cause to set aside default, and, therefore, denies without prejudice the motions for default judgment. Lee's complaint asserts nine causes of action, against all defendants unless otherwise noted, for: (1) Declaratory Relief; (2) Quasi Contract; (3) Negligence; (4) violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. Sec.1692; (5) violations of the California Business and Professions Code Sec.17200; (6) violations of the Truth in Lending Act ("TILA"), 15 U.S.C. Sec.1641(g) (against U.S. Bank and Doe defendants); (7) violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec.1962; (8) Fraud; and (9) Accounting. The relief sought by Lee includes no less than $5,000,000 in damages, and "an order finding that Defendants have no legally cognizable rights as to Plaintiff, the Property, Plaintiff's Promissory Note, Plaintiff's Deed of Trust or any other matter based on contract or any of the documents prepared by Defendants, tendered to and executed by Plaintiff." About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray and David Hilty of Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TOUSA INC: Senior Status of Lot-Option-Agreement Claims Affirmed ---------------------------------------------------------------- In the Chapter 11 case of TOUSA Inc., District Judge Robin S. Rosenbaum affirms the Bankruptcy Court's Order that classified certain Lot-Option-Agreement Claims and Model-Home Claims as claims entitled to Senior-Debt status. Prior to filing for bankruptcy, TOUSA Inc. subsidiary, TOUSA Homes, Inc., had entered into six Option Agreements and one Master Purchase, Construction Management, and Rental Agreement with various landowners. Under these Agreements, THI agreed to possess the landowners' undeveloped land in order to develop residential subdivisions on the land. All of these Agreements provided THI with the exclusive right and option to purchase all or any number of the landowners' lots in consideration for THI's Lot-Option Deposit. Notwithstanding THI's "option" to purchase any and all of the lots, the language of the Agreements suggests that THI's purchase of at least some lots is mandatory under the Agreements. THI failed to fully exercise its purchase options under these Agreements. Jefferies Leveraged Credit Products, LLC, and Castle Creek Arbitrage, LLC, acquired the interests of the landowner parties to these Agreements and filed proofs of claim with the Bankruptcy Court for THI's failure to exercise the purchase options. After years of litigation, the Bankruptcy Court confirmed the Debtors' Plan. The Plan provided that distributions for unsecured claims made by the Debtors such as THI are divided into three classes of claims: Class 4A Senior Note Guaranty Claims, Class 4B General Unsecured Claims, and Class 4C Subordinated Note Claims. This classification scheme was implemented to give effect to provisions of governing Subordinated Notes Indentures that provided that subordinated-note claims are subordinated in right of payment to the payment in full of "Senior Debt." Prior to confirmation of the Plan, Jefferies Leveraged and Castle Creek had moved the Bankruptcy Court for a determination that their claims based on the Lot-Option Agreements were entitled to Senior-Debt status under the Subordinate Notes Indentures and, accordingly, entitled to classification as Class 4A Senior Note Guaranty Claims. After a hearing, on Aug. 2, 2013, the Bankruptcy Court issued an Order finding the Lot-Option-Agreement Claims entitled to Senior Debt status and, therefore, classifiable as Class 4A Claims. Wilmington Trust Company appeals the Bankruptcy Court's Order, arguing that the Lot-Option-Agreement Claims are not entitled to Senior-Debt status and should therefore be classified as Class 4B General Unsecured Claims under the Plan. The case before the District Court is, WILMINGTON TRUST COMPANY, Appellant, v. JEFFERIES LEVERAGED CREDIT PRODUCTS, LLC, and CASTLE CREEK ARBITRAGE, LLC, Appellees, Case No. 13-62533-CIV-ROSENBAUM (S.D. Fla.). A copy of the Court's April 24, 2014 Opinion and Order is available at http://is.gd/iBQIFPfrom Leagle.com. Wilmington Trust Company is represented by Leah M. Eisenberg, Esq. -- leah.eisenberg@arentfox.com -- at Arent, Fox, LLP; and Leyza Florin Blanco, Esq. -- leyza.blanco@gray-robinson.com -- at GrayRobinson, P.A. Jefferies Leveraged Credit Products, LLC, and Castle Creek Arbitrage, LLC, are represented by David E. Blabey, Jr., Esq., and Joshua Brody, Esq. -- at dblabey@kramerlevin.com and jbrody@kramerlevin.com -- at Kramer, Levin, Naftalis & Frankel, LLP; and: Lawrence Earlee Pecan, III, Esq. MARSHALL GRANT, PL 197 S Federal Hwy, Ste 300 Boca Raton, FL 33432-4946 About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. The unsecured creditors committee initially proposed a chapter 11 liquidating plan for Tousa. However, the committee decided not to pursue approval of its liquidation plan because of a pending appeal of its fraudulent transfer action in the U.S. Court of Appeals for the Eleventh Circuit. In May 2012, the Court of Appeals in Atlanta held that Tousa's bank lenders received fraudulent transfers exceeding $400 million. After mediation before Peter L. Borowitz, Tousa and the unsecured creditors committee, MatlinPatterson Global Advisers and Monarch Alternative Capital, as investment adviser to Monarch Master Funding, collectively reached an agreement in principle on a settlement proposal. The proposal would form the foundation for a joint bankruptcy-exit plan for the Debtors. In May 2013, Tousa and the unsecured creditors committee filed a proposed liquidating Chapter 11 plan. On July 12, 2013, Tousa won court approval of a $67 million settlement with several insurance companies allowing the Debtors to proceed with an Aug. 1 hearing to confirm the plan. The dispute with the insurance companies involved the pre-bankruptcy fraudulent transfers. The insurance companies included Federal Insurance Co., XL Specialty Insurance Co. and Zurich American Insurance Co. According to Bloomberg News, in settlement, the insurance companies will pay $67 million, with $47.9 million going to creditors of the Tousa companies that were forced to take on debt improperly. The first-lien lenders receive $7.66 million, while second-lien lenders take home $11.5 million. Some of the insurance companies also pay $8.27 million of the directors' and officers' defense costs. Bloomberg relates Tousa's Chapter 11 plan has recoveries ranging from 58 percent for senior noteholders to 5 percent for creditors with general unsecured claims. The plan was the result of the decision from the appeals court in May 2012 finding banks received fraudulent transfers exceeding $400 million. The opinion reinstated a ruling by U.S. Bankruptcy Judge John K. Olson which had been set aside on the first appeal in federal district court. The Court confirmed the Plan on August 6, 2013. UNIVERSAL HEALTH: Ch.11 Trustee Seeks Probe on Warburg Pincus ------------------------------------------------------------- Soneet R. Kapila, chapter 11 trustee of the estate of Universal Health Care Group, Inc. and the estate of American Managed Care, LLC, by counsel, filed motions seeking entry of an order authorizing the examination of Allen Wise, Mark Dawson, Joel Ackerman, Alok Sanghvi and the corporate representative(s) of Wells Fargo Bank, N.A. Warburg Pincus, LLC , Warburg Pincus Private Equity IX, L.P., Warburg Pincus IX LLC, Warburg Pincus Partners LLC, and Warburg Pincus & Co. duces tecum pursuant to Federal Rule of Bankruptcy Procedure 2004. The Chapter 11 Trustee seeks authority to examine Mr. Wise, et al. in connection with (i) knowledge of the Debtors' assets and liabilities, (ii) pre-bankruptcy relationship and dealings with the Debtors, (iii) role in various pre-bankruptcy transactions involving the Debtors that may be avoidable and recoverable under Sections 548 and 550 of the Bankruptcy Code, and (iv) any other matter relevant to the estates. The Debtors' financial records indicate that Wells Fargo was a party to a series of complex financial transactions involving the Debtors, Wells Fargo, Warburg Pincus, LLC, Warburg Pincus Private Equity IX, L.P., Warburg Pincus IX LLC, Warburg Pincus Partners LLC, Warburg Pincus & Co., and Mr. Wise. During 2006, Warburg and Mr. Wise acquired several million shares of preferred stock in UHCG. Warburg and Mr. Wise subsequently resold the Stock to UHCG in 2011 at a substantial profit. During the two-year period preceding UHCG's bankruptcy filing, Wells Fargo obtained a complete repayment from UHCG of the obligations associated with the Wells Fargo Loan. The Repurchase and the Repayments both occurred less than two years before UHCG's bankruptcy filing, and upon information and belief, may have had a deleterious effect on the financial health of both the Debtors and their subsidiaries. Accordingly, the obligations and transfers associated with the Repurchase and Repayments may be avoidable under Section 548 of the Bankruptcy Code, and the transfers associated with the Repurchase and Repayments may be recoverable for the benefit of the estate under Section 550 of the Bankruptcy Code. About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. Soneet R. Kapila has been appointed the Chapter 11 Trustee in the Debtor's case. He is represented by Roberta A. Colton, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA. Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special conflicts counsel and E-Hounds, Inc. serves as a forensic imaging consultant to the Chapter 11 trustee. About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. Soneet R. Kapila has been appointed the Chapter 11 Trustee in the Debtor's case. He is represented by Roberta A. Colton, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special conflicts counsel and E-Hounds, Inc. serves as a forensic imaging consultant to the Chapter 11 trustee. UPPER VALLEY: Committee & U.S. Trustee Object to Plan Outline ------------------------------------------------------------- In separate court filings, the Official Committee of Unsecured Creditors and the U.S. Trustee made their responses to the Bankruptcy Court of Upper Valley Commercial Corporation's Disclosure Statement dated Feb. 21, 2014. As a general matter, the Committee says it presently supports a reorganization led by current management and does not support the appointment of a trustee or examiner or the conversion of the case to Chapter 7. The Committee suggests additional disclosure that would be helpful to creditors like: -- basis for the classification of creditors; -- basis for allowing Class 4 Claimant New Hampshire to vote; -- details on any known "bad debts" or anticipated collection challenges among the accounts receivable; -- nature and extent of known Chapter 5 claims; and -- disclosure on any intention to sell real estate. The Committee also supports a minor modification of the current plan structure to provide some independent oversight of Debtor's reorganization efforts, through a mechanism for the review of collections and distributions and regular reporting to the Court, the Committee and other parties-in-interest. The Committee suggests such oversight could be provided at modest cost by an independent accountant appointed under the plan and given a budget and a clear and limited set of tasks. "This process would provide greater accountability and address potential concerns about conflict of interest without compromising the ability of management to collect accounts or adding the costs of a trustee," says the Committee. On the other hand, William K. Harrington, United States Trustee, has several complains of the Disclosure Statement. Among other things, he cites that the Plan Outline: -- does not detail the Debtor's income and expenses for the life of the Plan; -- the liquidation analysis and discussion of the best interest of creditors test are inadequate; -- does not contain any description of the Debtor's assets; -- does not contain any meaningful discussion of the potential preference claims against the insiders of the Debtor or any potential avoidance actions; -- fails to address other transfers made by the Debtor which could potentially give rise to avoidance actions; -- does not sufficiently detail feasibility and risks to creditors under the Plan; and -- does not provide sufficient information on insider claims and insider leases the Debtor intends to assume. The U.S. Trustee argues that the Debtor must demonstrate that the Plan has been proposed in good faith. The U.S. Trustee is against approval of the Disclosure Statement. As previously reported by The Troubled Company Reporter, the Bankruptcy Court will convene a continued hearing on the Disclosure Statement on May 27. The Creditors Committee is represented by: BERNSTEIN SHUR SAWYER & NELSON, P.A. Jennifer Rood, Esq. 670 N. Commercial St., Ste. 108 P.O. Box 1120 Manchester, NH 03105-1120 Email: jrood@bssn.com The U.S. Trustee is represented by: Ann Marie Dirsa, Esq. Office of the U.S. Trustee 1000 Elm Street, Suite 05 Manchester, NH 03101 Tel No: (603) 666-7908 About Upper Valley Commercial Corporation Upper Valley Commercial Corporation, which runs a lending business in the Upper Connecticut Valley of New Hampshire, filed a Chapter 11 petition (Bankr. D. N.H. Case No. 13-13110) in Manchester, New Hampshire, on Dec. 31, 2013. Upper Valley Commercial Corporation said it is liquidating its assets after discovering that some of its investment and lending activities lacked proper licensing by the State of New Hampshire. The Debtor will file a liquidating plan as part of an agreement with the New Hampshire Banking Department. The Debtor disclosed $12,782,877 in assets and $11,584,281 in liabilities as of the Chapter 11 filing. The Debtor is represented by attorneys at The Tamposi Law Group, led by Peter N. Tamposi, Esq., in Nashua, New Hampshire. The Debtor disclosed $12,782,877 in assets and $11,584,281 in liabilities as of the Chapter 11 filing. William K. Harrington, the U.S. Trustee, on Feb. 24 appointed three members to the official committee of unsecured creditors. Bernstein, Shur, Sawyer & Nelson, P.A., serves as its counsel. UPPER VALLEY: Objects to Chapter 7 Conversion, Panel Also Reacts ---------------------------------------------------------------- Upper Valley Commercial Corporation asserts that the U.S. Trustee has failed to allege facts sufficient to warrant the extreme remedy of converting its case into a Chapter 7 proceeding. As previously reported by The Troubled Company Reporter, the U.S. Trustee has sought an order on the conversion of the Debtor's case into a Chapter 7 proceeding or in the alternative, appointing a Chapter 11 trustee. The Debtor contends that on the allegation of mismanagement as it lost its securities license in 1982, one may surmise that a single mistake by the Debtor that occurred more than 32 years before its Chapter 11 filing is not sufficient grounds for the Chapter 7 trustee appointment. The Debtor adds that because the transactions on which the Trustee complains were simply the Debtor's ordinary course of business, the motion should be denied. The Debtor further notes that because it has filed a confirmable plan that appears to have the support of crediors and the Creditors Committee alike, the Trustee's motion should be denied. The Official Committee of Unsecured Creditors, for its part, agrees with the Debtors that the U.S. Trustee failed to articulate "cause" either on the Chapter 7 conversion or the Chapter 11 trustee appointment. The Committee believes the relationships and community ties between David Patten/Ms. Brown and account receivable debtors may create a sense of common purpose which will be crucial to facilitating loan refinances and the prompt repayment of debt at minimal discounts. The Committee adds that the Debtor has filed a Chapter 11 plan which includes the voluntary subordination of several large insider creditor claims, including the claim of large insider creditor claims, including the claim of David Patten, scheduled in the amount of $2,955,000. The subordination of these claims, the Committee notes, greatly reduces the risk of loss to general unsecured creditors, even assuming the accounts receivable cannot be collected in full. While probably important to keeping peace with the State of New Hampshire, such such subordination is not required by the Bankruptcy Code, absent a detailed factual record and litigation under 11 U.S.C. Section 510, the Committee says. If a trustee was appointed, the Committee cites, the holders of large insider claims might not agree to subordinate -- potentially resulting in costly and risky litigation and a reduced distribution to general unsecured creditors. Finally, to the extent the Committee has heard from creditors, the overwhelming majority of them prefer to leave Messrs. Fadden and Patten and Ms. Brown in place rather than appoint a trustee and to keep the case in Chapter 11 rather than convert it to Chapter 7. Accordingly, the Committee asks the Court to deny the U.S. Trustee's motion in all respects. The hearing on the Chapter 7 conversion motion has been continued to May 27. Jennifer Rood, Esq. -- jrood@bssn.com -- of BERNSTEIN SHUR SAWYER & NELSON, P.A. at 670 N. Commercial St., Ste. 108, P.O. Box 1120, Manchester, NH 03105-1120, represents the Creditors Committee. Ann Marie Dirsa, Esq., of the Office of the U.S. Trustee, at 1000 Elm Street, Suite 05, Manchester, NH 03101, with contact number (603) 666-7908, represents the U.S. Trustee. About Upper Valley Commercial Corporation Upper Valley Commercial Corporation, which runs a lending business in the Upper Connecticut Valley of New Hampshire, filed a Chapter 11 petition (Bankr. D. N.H. Case No. 13-13110) in Manchester, New Hampshire, on Dec. 31, 2013. Upper Valley Commercial Corporation said it is liquidating its assets after discovering that some of its investment and lending activities lacked proper licensing by the State of New Hampshire. The Debtor will file a liquidating plan as part of an agreement with the New Hampshire Banking Department. The Debtor disclosed $12,782,877 in assets and $11,584,281 in liabilities as of the Chapter 11 filing. The Debtor is represented by attorneys at The Tamposi Law Group, led by Peter N. Tamposi, Esq., in Nashua, New Hampshire. The Debtor disclosed $12,782,877 in assets and $11,584,281 in liabilities as of the Chapter 11 filing. William K. Harrington, the U.S. Trustee, on Feb. 24 appointed three members to the official committee of unsecured creditors. Bernstein, Shur, Sawyer & Nelson, P.A., serves as its counsel. URBAN LANDMARK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: The Urban Landmark Corporation dba Kent Valley Ice Centre 6015 S 240th St. Kent, WA 98032 Case No.: 14-13458 Chapter 11 Petition Date: May 1, 2014 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Hon. Karen A. Overstreet Debtor's Counsel: Martin E Snodgrass, Esq. SNODGRASS & WARREN 3302 Oakes Ave Everett, WA 98201 Tel: 425-783-0797 Email: mes@snodgrasslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Lexi Doner, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/wawb14-13458.pdf U.S. STEEL: Fitch Affirms 'BB-' Issuer Default Rating ----------------------------------------------------- Fitch Ratings has affirmed United States Steel Corporation's (U.S. Steel; NYSE: X) Issuer Default Rating (IDR) and debt ratings at 'BB-'. The Rating Outlook is Stable. Key Rating Drivers: The ratings reflect U.S. Steel's leading market positions in flat- rolled and tubular steel in the U.S., together with its high degree of control over its raw materials offset by the high fixed costs of integrated steel producers. U.S. Steel is the second largest North American flat-rolled steel producer with capacity of 22 million tons; 2013 shipments were 15 million tons. U.S. Steel is the largest integrated North American tubular producer, with capacity of 2.8 million tons; 2013 shipments were 1.8 million tons. U.S. Steel also operates a five million ton per year integrated steel operation in Kosice, Slovakia. U.S. Steel's production of iron ore pellets from its own operations was 21.7 million tons and from its share of joint ventures was 2.4 million tons in 2013, accounting for a significant share of its needs. In 2013, North American raw steel produced was 18 million tons and, assuming 1.3 tons of iron ore pellets are needed to produce 1 ton of raw steel, 23 million tons of iron ore pellets were consumed. The U.S. steel industry is challenged by low capacity utilization (about 77% on average for 2013 and 76% on average year to date 2014). Permanent closure at U.S. Steel's Hamilton's raw steelmaking operations and at the former RG Steel LLC plants should improve capacity utilization as should growth in construction demand. Fitch believes that margins are vulnerable when capacity utilization is below 80% and that capacity utilization could remain below 80% through 2014. The domestic steel market has shown supply discipline, but global overcapacity and lack of discipline elsewhere has limited pricing power while bidding up raw material prices. Globally, increased supply of iron ore and coking coal coupled with slower growth in steel production has provided relief from raw materials escalation. Adequate Liquidity: U.S. Steel generated operating EBITDA of $868 million and $278 million of free cash flow after capital expenditures of $451 million and dividends of $29 million for the latest 12 months (LTM) ended March 31, 2014. Also as of March 31, 2014, cash on hand was $1.1 billion; total debt was $3.9 billion; the $875 million inventory facility maturing July 20, 2016 and the $625 million receivables facility maturing July 12, 2016 were undrawn; the receivables facility was utilized for $52 million in letters of credit at March 31, 2014. The inventory facility has a 1.00:1.00 fixed-charge coverage ratio requirement only at such times as availability under the facility is less than $87.5 million. Total Liquidity of $2.7 billion at March 31, 2014 compares with 2014 guidance of capital expenditure at $620 million, cash pension and other benefits at $525 million, and Fitch estimated net financial costs at $250 million. As of Dec. 31, 2013, defined benefit pension plans were underfunded by $1.1 billion on a GAAP basis. Pension and other post-employment benefit costs were $451 million for 2013 and cash payments were $473 million including the $140 million voluntary contribution to the main U.S. defined benefit pension plan. Costs guidance for 2014 is $345 million and cash payments are expected to be $525 million. The company has voluntarily contributed $140 million per year to the main defined pension plan over each of the past eight years. Fitch expects EBITDA of at least $1 billion and free cash flow to be positive for 2014. Fitch expects leverage to drop below 4x through 2014 with scheduled debt repayment and cost improvements. Near-term scheduled maturities of debt are $323 million in 2014; $189 million in 2015; $45 million in 2016; $500 million in 2017; and $503 million in 2018. The 2014 maturity is a convertible issue with an initial conversion price of $31.875 per share. Management stated its intention to repay the convertible notes when they come due in May 2014. Total debt/operating EBITDA pro forma for the May repayment would be 4.2x at March 31, 2014. The Stable Outlook reflects Fitch's view that U.S. Steel's liquidity is sufficient to support operations should the recovery in steel demand remain weak over the next 12-18 months. Rating Sensitivities: Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Deterioration in liquidity coupled with cash burn greater than $300 million; -- Weaker than expected operating results resulting in Total Debt/EBITDA sustainably above 4.5x; -- A debt-financed recapitalization or debt-financed acquisition. Fitch views these events as unlikely. Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Sustained positive free cash flow generation and debt repayment. Fitch affirms U.S. Steel's ratings as follows: -- Long-term IDR at 'BB-'; -- Senior secured credit facility at 'BB'; -- Senior unsecured notes at 'BB-'. USEC INC: DOE To Take Over Bankrupt Co.'s Uranium Enrichment Plant ------------------------------------------------------------------ Law360 reported that the U.S. Department of Energy will take over management of a uranium enrichment project in Piketon, Ohio from USEC Inc., a privatized, formerly federal company that filed for Chapter 11 bankruptcy in March, according to Energy Secretary Ernest Moniz. According to the report, Moniz told a congressional subcommittee that the government needs to protect the technology and keep the American Centrifuge Project moving as USEC restructures its debt and operations. The company has attributed its difficulties to the plummet in demand for uranium after the Fukushima disaster, commodity prices and changes to the scope of the centrifuge project. USEC has struggled financially in the past few years as its previously deployed enrichment tech has grown outdated and it stopped work at its existing Paducah Gaseous Diffusion plant in Kentucky in May 2013, Law360 related, citing company press releases. Federal funding for the latest round of development at the Piketon plant runs out April 15. The Piketon, Ohio-based American Centrifuge Plant was supposed to deploy an advanced, high-efficiency uranium enrichment technology that has been in development for more than 10 years, the report further related. If proven on a commercial scale, the project could accommodate about a third of the fuel requirements for the U.S. nuclear fleet, according to USEC. The DOE gave the project $280 million in funding in June 2012, which drew criticism from some of the project?s opponents and brought two lawmakers from opposite sides of the aisle into rare agreement on the often-polarizing issue of federal funding for nontraditional energy projects, the report said. Nonetheless, many lawmakers support the project for reasons of national security and energy. About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Debtor disclosed total assets of $70 million and total liabilities of $1.07 billion. The Hon. Christopher S. Sontchi presides over the case. Latham & Watkins LLP acts as the Debtor's general counsel. Richards, Layton and Finger, P.A., serves as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtors. UTSTARCOM HOLDINGS: DASAN Networks Holds 5% Equity Stake -------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, DASAN Networks, Inc., disclosed that as of April 2, 2014, it beneficially owned 1,983,500 shares of common stock of UTStarcom Holdings Corp representing 5 percent of the shares outstanding. A copy of the regulatory filing is available at: http://is.gd/9R0lRe About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. UTStarcom Holdings reported a net loss of $22.73 million on $164.43 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $35.57 million on $186.72 million of net sales for the year ended Dec. 31, 2012. As of Dec. 31, 2013, the Company had $366.96 million in total assets, $216.58 million in total liabilities and $150.38 million in total equity. "We have a history of operating losses and may not have sufficient liquidity to execute our business plan or to continue our operations without obtaining additional funding or selling additional securities. We may not be able to obtain additional funding under commercially reasonable terms or issue additional securities," the Company said in the Annual Report for the year ended Dec. 31, 2013. VAIL LAKE: Court Okays 2nd Stipulation on Cash Collateral Use ------------------------------------------------------------- The Hon. Louise DeCarl Adler of the U.S. Bankruptcy Court for the Southern District of California approved a second stipulation granting Vail Lake Rancho California LLC and its debtor-affiliates authority to continue using cash collateral, on an interim basis, and to grant adequate protection. Secured creditors Cambridge Financial of California LLC, Beresford Development LLC, and XD Conejo Notes LLC are counterparties to the Stipulation. The Stipulation provides for the sale of Parcel F, owned by the Debtors. That sale would be conducted on a parallel track with the sale of the Debtors' Parcel E, with the sale of Parcel F to be immediately held after, and in no event later than five days after the sale of Parcel F. The holder of the claim evidenced by Cambridge VLRC Claim no. 23 will be the stalking horse bidder for Parcel F. Cambridge and Beresford are represented by: Michael Gerard Fletcher, Esq. FRANDZEL ROBINS BLOOM & CSATO L.C. 6500 Wilshire Blvd., 17th Floor Los Angeles, CA 90048 (323) 852-1000, 347 E-mail: mfletcher@frandzel.com XD Conejo Notes is represented by: Gregory M. Salvato, Esq. THE SALVATO LAW OFFICES 355 South Grand Avenue, Suite 2450 Los Angeles, CA 90071 Tel: 213-484-8400 Fax: 213-943-1301 Web site: http://www.salvatolawoffices.com Vail Lake Rancho California, LLC, and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. The Debtor also employed Thomas C. Hebrank and E3 Realty Advisors, Inc., with Mr. Hebrank serving as the Debtors' chief restructuring officer. Lee & Associates Commercial Real Estate Services is the real estate brokers of the Debtors. The Debtors' consolidated assets, as of May 31, 2013, total $291,016,000 and liabilities total $52,796,846. W&T OFFSHORE: S&P Lowers Unsecured Debt Rating to 'B-' ------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its issue-level rating on W&T Offshore Inc.'s unsecured debt to 'B-' from 'B'. The 'B' corporate credit rating remains unchanged. The outlook is stable. S&P also revised the recovery rating on the unsecured debt to '5' from '4'. The '5' recovery rating reflects S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The rating actions reflect the company's lower PV-10 value based on S&P's distressed price deck at year-end 2013. "The stable outlook reflects our expectation that the company will maintain a relatively conservative capital structure and adequate liquidity. In particular, we expect the company's FFO to debt to be in the 30% to 35% range and debt to EBITDA to be in the 2x to 2.5x range," said Standard & Poor's credit analyst Stephen Scovotti. S&P would consider an upgrade if the company improves FFO to debt to greater than 45% while improving its diversity outside the Gulf of Mexico and increasing reserve life and organic reserve replacement. S&P could lower the rating if FFO to debt fell to below 20% on a sustained basis, with no near-term remedy. This scenario could occur if the company takes on additional debt to make a sizable acquisition, production is weaker than S&P's current operating expectation for several quarters, or crude oil prices weaken meaningfully. WESTERN FUNDING: Court OKs Sale of Las Vegas Property for $1.3MM ---------------------------------------------------------------- Judge Laurel E. Davis of the U.S. Bankruptcy Court for the District of Nevada approved a renewed motion by Western Funding Incorporated and its debtor affiliates to sell their real property located in Las Vegas, free and clear of all liens, claims and encumbrances to MCA Realty, Inc. All objections to the Sale that have not been withdrawn, waived or settled, or not otherwise resolved were denied and overruled on the merits with prejudice. Consistent with the terms of the purchase agreement, the Court authorized the Debtors to pay the purchaser its expense reimbursement received from the proceeds of the sale and directly from escrow. The Debtors sold the Las Vegas Property for $1.3 million along with reimbursement not to exceed 3% of the Purchase Price or $39,000. The Debtors decided to sell the Real Property to enhance their level of liquidity, reduce the amount of post-petition obligations, and to maximize the amount of proceeds to their bankruptcy estates. Mark Finston and James B. Hadden, and Class B Members of Harbor Structured Finance, Inc., the sole shareholder of the Debtor, objected to the sale. The objectors are represented by: Richard F. Holley, Esq. Ogonna M. Atamoh, Esq. COTTON, DRIGGS, WALCH, HOLLEY, WOLOSON & THOMSPON 400 South Fourth Street, Third Floor Las Vegas, Nevada 89101 Tel: 702/791-0308 Fax: 702/791-1912 E-mail: rholley@nevadafirm.com oatamoh@nevadafirm.com The B Members insisted that the Debtors should not bear the cost of reimbursing the Buyer in a straightforward real estate transaction sold below market. The Debtors defended the reimbursement provision, asserting that the B Members' argument fails because (i) this is not a straight forward real estate transaction, and (ii) the property is not being sold below market value. "The B Parties argue that the sale is for several hundred thousand dollars less than the appraised value. Although this is true, the ultimate true measure of value for a piece of real property is what it can actually fetch at sale, not necessarily what an appraisal may state," the Debtors argued. The Debtors added that expense reimbursements are a common tool used to incentivize prospective bidders in bankruptcy to "come off the sidelines" and serve as a lead or stalking horse bidder to get a sale process underway. The Debtors maintained that if the expense reimbursement is not approved, the proposed sale transaction will be lost. About Western Funding Inc. Las Vegas car-loan maker Western Funding Inc. filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 13-17588) on Sept. 4, 2013, after its own lender said the company broke borrowing promises made last year. Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC, in Las Vegas, Nevada, represents the Debtor. Jeanette E. McPherson, Esq., at Schwartzer & McPherson Law Firm represents the Official Committee of Unsecured Creditors. In its schedules, Western Funding disclosed $48,513,558 in total assets and $44,443,913 in total liabilities. Western Funding is jointly administered with Western Funding Inc. of Nevada, and Global Track GPS, LLC. Western Funding Inc.'s case is the lead case. As reported by the TCR on Nov. 22, 2013, the Debtors filed a proposed Chapter 11 plan that contemplates the transfer of equity interests to Carfinco Financial Group, Inc., absent higher and better offers at a court-sanctioned auction. The TCR reported on Feb. 21, 2014, that the Court authorized the Debtors to change their corporate names and modify the case caption. In accordance with the order dated Jan. 6, 2014, authorizing the sale of substantially all of the Debtors' operating assets, the Debtors' name will be changed to: Western Funding Incorporated WFI Debtor Western Funding Inc. of Nevada WFN Debtor Global Track GPS, LLC GT Debtor WESTERN FUNDING: Plan of Liquidation Declared Effective ------------------------------------------------------- The first amended joint plan of liquidation, as modified, of Western Funding Incorporated and its debtor affiliates became effective April 15, 2014. The Bankruptcy Court in Nevada entered an order on March 31, 2014, confirming the Plan of Liquidation, as modified. The Court found that the Disclosure Statement accompanying the Plan contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. All objections to confirmation of the Plan were resolved or overruled. As reported by the TCR on Nov. 22, 2013, the Debtors filed a plan Chapter 11 plan that contemplates the transfer of equity interests to Carfinco Financial Group, Inc., absent higher and better offers at a court-sanctioned auction. In an order dated Jan. 6, 2014, the Court authorized the sale of substantially all of the Debtors' operating assets. A copy of the Plan Confirmation Order is available for free at: http://bankrupt.com/misc/WesternFunding_PlanOrder.pdf As reported by the Troubled Company Reporter on Jan. 6, 2014, the Debtors filed the liquidation plan based on the sale of their primary business to Westlake Services LLC. The plan creates a liquidation trust for the benefit of unsecured creditors and spells out how the company would be dissolved. Under the plan, the trust can pursue lawsuits with any proceeds earmarked for unsecured creditors. All conditions precedent to the effectiveness of the Plan have been satisfied or waived, and thus the Plan was declared effective April 15 for all purposes. The deadline for any creditor or party-in-interest to file a request for allowance of any administrative claim or professional fee claim is May 15, 2014. Customer Accounts Sold In April, Western Funding and its affiliates sought the Court's permission to sell 9,415 customer loan accounts with a total current account balance of $45,807,459 to Autovest, LLC, or such higher or better offer, for a purchase price of $803,779. The Accounts were to be sold free and clear of all pledges, liens, security interests, encumbrances, claims, charges, options and interests pursuant to Section 363 of the Bankruptcy Code. Trustee Gains Control of Bank Accounts As part of the Debtors' liquidating plan, an irrevocable liquidating trust has been established (the WFI Liquidating Trust) and Brian Shapiro is its trustee. The confirmed plan provides that "all right, title, and interest in the Reserves and other assets of the Debtors shall be deemed vested in and transferred to the Liquidating Trust." The Bankruptcy Court has directed the financial institutions to transfer control of the Debtors' bank accounts to Mr. Shapiro. All banks and other financial institutions maintaining a bank account or other financial accounts held in the name of Western Funding Incorporated, Western Funding Inc. of Nevada or Global Track GPS, LLC, whether open or closed, including, but not limited to (i) the nine accounts listed on the September 2013 Monthly Operating Report for Western Funding Incorporated (Citibank account ending 5800; Citibank 7324, Wells Fargo 3160, Wells Fargo 3149, BMO Harris 375-7, BMO Harris 388-0, BMO Harris 91-4, BMO Harris 378-1, and BMO Harris 385-6); and (ii) any post-petition account opened by any of the Debtors, including the Wells Fargo account which is holding the proceeds of a recent sale of real property, were directed: a. to add the Trustee of the WFI Liquidating Trust as a signatory to all those accounts; b. to give Mr. Shapiro the power and authority to add and remove other signatories from all those accounts; and c. to grant Mr. Shapiro full online/internet access to the account and its records with respect to all those accounts. About Western Funding Inc. Las Vegas car-loan maker Western Funding Inc. filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 13-17588) on Sept. 4, 2013, after its own lender said the company broke borrowing promises made last year. Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC, in Las Vegas, Nevada, represents the Debtor. Jeanette E. McPherson, Esq., at Schwartzer & McPherson Law Firm represents the Official Committee of Unsecured Creditors. In its schedules, Western Funding disclosed $48,513,558 in total assets and $44,443,913 in total liabilities. Western Funding is jointly administered with Western Funding Inc. of Nevada, and Global Track GPS, LLC. Western Funding Inc.'s case is the lead case. The TCR reported on Feb. 21, 2014, that the Court authorized the Debtors to change their corporate names and modify the case caption, in view of the sale of substantially all of their operating assets: Western Funding Incorporated WFI Debtor Western Funding Inc. of Nevada WFN Debtor Global Track GPS, LLC GT Debtor WESTMORELAND COAL: Incurs $19.3 Million Net Loss in First Quarter ----------------------------------------------------------------- Westmoreland Coal Company reported a net loss applicable to common shareholders of $19.29 million on $180.20 million of revenues for the three months ended March 31, 2014, as compared with a net loss applicable to common shareholders of $2.72 million on $161.44 million of revenues for the same period in 2013. Revenues increased primarily due to new customer sales and fewer customer and ROVA outages. Net loss increased due to approximately $18.1 million of additional interest, currency losses and transaction fees related to the Sherritt acquisition. "The first quarter's results were in line with our expectations," said Keith E. Alessi, Westmoreland's CEO. "The 2014 first quarter reflects the newly restructured ROVA power agreement and does not include any benefit of the Indian Coal Tax Credit. The tax credit expired on December 31, 2013 and has not yet been renewed, although it has been included in pending legislation." "Our quarterly results are often materially impacted by the timing of customer maintenance outages. The first quarter of 2014 benefited in comparison to the prior year from the fact that there were two outages during the 2013 quarter. The second quarter of 2014 is expected to have two scheduled outages versus none in 2013. The 2014 pattern is consistent with our historical experience, with 2014 second quarter results expected to be lower than 2013 and quarters three and four to be higher, leaving us within our previously announced U.S. business guidance range." A copy of the press release is available for free at: http://is.gd/VCl5oq About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal incurred a net loss applicable to common shareholders of $6.05 million on $674.68 million of revenues for the year ended Dec. 31, 2013, as compared with a net loss applicable to common shareholders of $8.58 million on $600.43 million of revenues during the prior year. The Company incurred a net loss applicable to common shareholders of $34.46 million in 2011. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." Westmoreland Coal carries a Caa1 corporate family rating from Moody's Investors Service. XTREME POWER: Court Copies New Mexico Case by Reopening Sale ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Xtreme Power Inc., a provider of grid-scale power control technology, could provide the second instance of a bankruptcy judge reopening an auction seemingly completed under previously approved sale procedures. Mr. Rochelle recalled that U.S. Bankruptcy Judge David T. Thuma in Albuquerque, New Mexico, in March reopened an auction of Sunland Inc.'s peanut butter factory when a new bidder showed up after the original sale, allowing the estate to realize an additional $6 million. Mr. Rochelle said the same happed in the courtroom of U.S. Bankruptcy Judge H. Christopher Mott in Austin, Texas, when he allowed Younicos Inc. to bid -- and subsequently purchase -- Xtreme's assets after the company has declared that Shared Investments VI Inc. was the successful bidder with a $12 million high bid. Shared Investments' bid consisted of $5 million in cash, another $2 million in cash by Sept. 30, and a $5 million note, while Younicos' bid was $14 million, all in cash, Mr. Rochelle said. Younicos, on April 14, disclosed that it acquired Xtreme Power's assets with a winning bid in a chapter 11 auction supervised by the US District Bankruptcy Court of West Texas. Mr. Rochelle noted that Xtreme Power got an extra $2 million for its assets from the Younicos bid. The case presented some "interesting issues of law," Peter Kaufman of Gordian Group, the company's investment adviser, told Mr. Rochelle in an e-mail About Xtreme Power Xtreme Power focuses on the design, engineering, installation, and monitoring of integrated energy storage systems for power generators, grid operators and commercial and industrial end users, among others. Xtreme Power claims to be one of the world's leading grid-scale power control technology provider capable of integrating the full spectrum of energy generation sources and battery technologies. Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin, Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over the case. The Debtors have tapped Jordan Hyden Womble & Culbreth & Holzer, P.C., as bankruptcy attorneys, Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as investment banker and financial advisor. The Official Committee of Unsecured Creditors has retained Hohmann, Taube & Summers, L.L.P. as counsel, and Baker Botts L.L.P. as special counsel. Debtor Power Inc. scheduled $7,004,915 in total assets and $65,743,283 in total liabilities. Debtor Power Grove scheduled $5,179,692 in total assets and $31,882,277 in total liabilities. Power Systems scheduled $4,303,921 in total assets and $87,666,873 in total liabilities. YSC INC: Can Sell Wa. Comfort Inn, Objections Addressed ------------------------------------------------------- YSC Inc. sought and obtained permission from Bankruptcy Judge Marc Barrera to sell a personal property located at 31622 Pacific Hwy S., Federal Way, WA 98003, commonly known as Comfort Inn, free and clear of all liens and encumbrances to Sandhu NW Hospitality, LLC, pursuant to a sale agreement, as amended. The earnest money deposit of $50,000 will be converted to cash and the cash deposited into escrow without delay. The closing of the sale is expected to be on or before May 10, 2014, but may be extended by agreement of the parties and Whidbey Island Bank to a mutually agreed time after that. If the Buyer does not obtain financing from Sterling Bank or other lender, and the failure to obtain financing is based on the appraisal of the property, the Bank will release a copy of the appraisal to the Debtor and to Whidbey Island Bank. The resulting U.S. Trustee statutory quarterly fee on the transaction, which will amount to an estimated $975, will be paid at closing; and for the real and personal property sold to the Buyer, the taxes will be paid at closing, but otherwise subject to King County's liens for any real and personal property taxes that are not paid at closing. Before the Court entered its ruling, Whidbey Island Bank sought a number of clarifications to be made in the sale agreement, which include the conversion of the earnest money in the sale. Those concerns have been addressed in the ruling. Secured creditor King County, Washington, also filed a conditional objection on the Sale Motion. To the extent the Buyer will be responsible for any portion of the 2014 real and personal property and elects to pay the second half taxes in due course, King County requested that the Sale Order provide that the real and personal property taxes be paid in full at closing or that King County retain its tax lien for any real property taxes that will be the responsibility of the Buyer. The Debtor also addressed the County's concern before the ruling came out. The Debtor is represented by: Emily Jarvis, Esq. Wells and Jarvis, P.S. 500 Union Street, Ste 502 Seattle, WA 98101 Whidbey Island Bank is represented by: R. Scott Hutchison, Esq. Hutchison & Foster 4300-198th Street SW P.O. Box 69 Lynnwood, Washington Tel No: (425) 776-2147 Fax No: (425) 776-2140 King County is represented by Margaret Phal, Esq. About YSC Inc. YSC Inc., owner of a Comfort Inn in Federal Way, Washington, and a Ramada Inn in Olympia, Washington, filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-17946) on Aug. 30, 2013, in Seattle. The owner listed the hotels as worth $17.9 million. Total debt is $18.5 million, including $18 million in secured debt. Among mortgage holders, Whidbey Island Bank is owed $13.3 million. Bankruptcy Judge Marc L. Barreca presides over the case. Wells and Jarvis, P.S., serves as YSC's counsel. Scott Hutchison, Esq., represents Whidbey Island Bank. YSC's principals Sang Kil Yim and Chan Sook Yim filed for personal Chapter 11 bankruptcy (Case No. 14-10897). * Texas Homestead Exemption Evaporates After Six Months ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although Texas has the country's most generous homestead exemption, a home's value can be lost in bankruptcy if the house is sold and proceeds aren't reinvested in a new home within six months. According to the report, in March the U.S. Court of Appeals in New Orleans interpreted the Texas exemption statute, which protects the entire value of a homestead. Frost involved a situation where the bankrupts sold the exempt home and didn't reinvest the proceeds in another home. The appeals court in Frost pointed to the Texas statute which says that proceeds lose their exempt status if not reinvested in another home within six months, the report related. U.S. District Judge Reed O'Connor in Fort Worth, Texas, applied Frost to a Chapter 13 case, Bloomberg further related. A couple confirmed a plan under which their entire homestead was exempted from the calculation determining how much they would pay creditors. Two years later, they got bankruptcy court permission to sell their home. Although they didn't reinvest the sale proceeds in a new home within six months, they tried to modify the plan by allowing them to retain the money, Bloomberg said. The bankruptcy court denied the amendment, saying it didn't satisfy the best interests of creditors test under Section 1325(a)(4) of the Bankruptcy Code. Judge O'Connor upheld the bankruptcy court for the same reason. The Frost case is Viegelahn v. Frost (In re Frost), 12-50811, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The district court case is Garcia v. Bassel, 13-cv-958, U.S. District Court, Northern District of Texas (Fort Worth). * Bank of America in Settlement Talks over Credit Card Practices ---------------------------------------------------------------- Alan Zibel, Robin Sidel and Christina Rexrode, writing for The Wall Street Journal, reported that Bank of America Corp. is in discussions to pay more than $800 million to settle allegations it pushed customers into signing up for extra credit-card products, according to people familiar with the talks. The Journal related that the agreement with the Consumer Financial Protection Bureau, which could be announced in coming days, would mark the largest federal settlement with a credit-card provider over so-called add-on products. It would be the agency's fifth such agreement with a credit-card provider over products such as identity-theft protection and debt cancellation in the event of a job loss. A significant chunk of the money is expected to go back to customers, according to the Journal. The settlement would be the latest in a string of agreements Bank of America has reached to resolve regulatory probes into past practices, the Journal pointed out. The Charlotte, N.C., lender agreed to pay $9.5 billion to settle mortgage claims with Fannie Mae, Freddie Mac and their federal regulator, and another $15 million to the state of New York to end a civil lawsuit by New York state Attorney General Eric Schneiderman related to the bank's purchase of Merrill Lynch & Co. during the financial crisis. The bank neither admitted nor denied wrongdoing in both settlements. In early 2013, the bank agreed to pay $11.6 billion to end a long-running dispute with Fannie Mae. * Bitcoin's Boosters Struggle to Shore Up Confidence ---------------------------------------------------- Robin Sidel, Michael J. Casey and Christopher M. Matthews, writing for The Wall Street Journal, reported that as the price of bitcoin continues to fall, and as the bad headlines continue to mount, the Bitcoin Foundation is increasingly finding itself in the tough position of defending the controversial cryptocurrency. According to the report, Patrick Murck, general counsel of the Bitcoin Foundation, a trade group that promotes bitcoin, received a subpoena from federal prosecutors who wanted to know all about Mt. Gox, the trading exchange that collapsed after announcing it lost roughly $500 million of bitcoins, mostly owed to customers. When Mr. Murck walked into a small, drab conference room at the U.S. attorney's office in Manhattan, the room also was filled with representatives from the Federal Bureau of Investigation, Internal Revenue Service and Treasury Department's Financial Crimes Enforcement Network. Investigators peppered him with questions for two hours, the Journal said, citing people familiar with the meeting. The startled Mr. Murck, flanked by his two lawyers, said he was just as baffled as anyone by the mystery of the missing bitcoins, according to people familiar with the meeting. Bitcoin boosters like Mr. Murck used to spend most of their time explaining, extolling and evangelizing about the electronic-only currency, created on computers and traded between people who store their bitcoins in digital wallets, the report said. Those efforts helped attract venture-capital investors, soothe regulators and lawmakers, and ignite a rocket-ship liftoff in the value of bitcoins. * NY Regional Health Care Companies Cite Obamacare in Big Losses ---------------------------------------------------------------- Claire Hughes, writing for Times Union, reported that two Capital Region health insurers lost tens of millions of dollars last year and blamed their poor performances to costs linked to the Affordable Care Act and other new regulations. According to the report, Albany-based Capital District Physicians' Health Plan lost $43.9 million. MVP Health Care of Schenectady lost $13.6 million. A third, HealthNow of Buffalo, parent of Latham-based Blue Shield of Northeastern New York, earned $32 million in 2013, a significant increase despite implementation of the federal health law known as Obamacare, the report related. The company credited sound management practices for its success. CDPHP lost $43.9 million on revenues of $2 billion last year, despite a 9 percent increase in members, the report further related. "The health insurance industry is experiencing tremendous change," the report said, citing CDPHP President and CEO John D. Bennett. "We anticipated losses in 2013 due to new taxes and fees, and the costs to implement new programs and regulatory requirements." * High-Yield Debt Deals Set to Break Records -------------------------------------------- Jonathan Schwarzberg, writing for The Deal, reported that last week, Numericable SA and controlling shareholder Altice SA combined to issue approximately $16.7 billion in high-yield debt to help pay for the ?17 billion ($23.3 billion) acquisition of French company Vivendi SA's wireless unit, Societe Francaise de Radiotelephone SA, or SFR. The multipart, multicurrency deal set the record for the largest high-yield deal ever, as well as the biggest single Eurobond offering, the Deal noted. But as soon as barriers are broken, it's on to the next record, with dealmakers saying investor appetite is there to support mergers and acquisitions with ever larger high-yield deals. On the investment grade side, Verizon Inc.'s eight-part $49 billion bond deal in September to help pay for its $130 billion acquisition of Vodafone Group plc's stake in Verizon Wireless already had demonstrated that big debt deals could get done, the report said. "It's almost easier for a company to obtain capital by issuing corporate debt than it is for the average person to refinance a house right now," the Deal said, citing Ronald Sarubbi, Esq. -- RSarubbi@perkinscoie.com -- a partner at Perkins Coie LLP. Volume from deals of greater than $10 billion are at the highest level since 2007, the Deal said, citing Dealogic. So far this year, $505.6 billion of volume can be attributed to 19 of these deals. Last year at this time, volume for deals greater than $10 billion was at just $182.1 billion on seven deals. * The Deal Announces Bankruptcy League Q1 Rankings -------------------------------------------------- The Deal, TheStreet's institutional business, on May 1 announced the results of their quarterly rankings of the top firms and professionals involved in active bankruptcy cases for the first quarter of 2014. "Pre-planned bankruptcies have gradually become the rule rather than the exception. In recent years we have seen them occur in more jurisdictions and applied on increasingly complex cases, including some of the notable filings in the first quarter," reported Anders Melin, Senior Editorial Research Coordinate at The Deal. "Experts attribute this to the fact that creditors involved in cases have become more sophisticated about the strategy and have a better understanding of the likely fallout of lengthy proceedings." League Table highlights: Top law firms were White & Case LLP with $1,044.2 billion in liabilities, Saul Ewing LLP with $1,042.0 billion in liabilities, Morgan, Lewis & Bockius LLP with $1041.4 billion in liabilities, Vedder Price PC with $1037.3 billion in liabilities and Skadden, Arps, Slate, Meagher & Flom LLP with $1,008.7 billion in liabilities. Amongst lawyers, Michael Schein (Vedder Price PC) held on to his top ranking from Q2 through Q4 2013, followed by Richard Hahn (Debevoise & Plimpton LLP), Douglas Rosner (Goulston & Storrs PC), Andrew Gottfried (Morgan, Lewis & Bockius LLP), and Scott Davidson (King & Spalding LLP). For the investment banks, Blackstone Group LP held its lead from Q3 and Q4 2013 with $705.0 billion in liabilities and 27 active cases, followed by Miller Buckfire & Co. LLC with $626.0 billion in liabilities, Houlihan Lokey Inc. with $59.5 billion in liabilities, Jefferies LLC with $45.2 billion in liabilities, and Moelis & Co. LLC with $37.8 billion in liabilities. Top investment banker was Timothy Coleman (Blackstone Group LP) maintaining his position from Q4, followed by Stuart Erickson (Miller Buckfire & Co. LLC), Leon Szlezinger (Jefferies LLC), Edward Casas (Solic Capital Advisors LLC) and Neil Luria (Solic Capital Advisors LLC). The full suite of rankings is available now on The Deal Pipeline, the transaction information service powered by The Deal's newsroom and the full report is also available online. About The Deal's Bankruptcy League Tables The Deal's Bankruptcy League Tables are the industry's only league tables focused solely on active bankruptcy cases. The Bankruptcy League Tables by volume involve only active U.S. bankruptcy cases of debtors with assets of $10 million or more. The rankings are based on the aggregation of those asset values. The table reflects the number of active cases fitting that criteria and may not characterize the total number of active cases. Firms and professionals only get one credit for each active case, not each active assignment. The Bankruptcy League Tables by number involve global bankruptcy cases irrespective of debtor asset size. Professionals receive credit for multiple assignments on one case. About The Deal The Deal -- http://www.thedeal.com-- is a business unit of TheStreet and has been serving corporate dealmakers, advisers and institutional investors the most sophisticated analysis of the deal economy since 1999. Its transaction information service, The Deal Pipeline, is powered by a newsroom of senior journalists who offer proprietary research and reporting across M&A, bankruptcies, auctions and financings. It includes a breaking news service, First Take; daily and weekly sector newsletters; The Daily Deal, a 2x daily report of the day's top stories; a research center with over a decade's worth of intelligence and a database of over 100,000 deals; and an iPad app. Our marketing & media services group produces the industry's leading forecasting event, The Deal Economy, held annually in New York City in addition to industry webcasts and integrated marketing programs. * Goodwin Procter Expands Financial Restructuring Practice ---------------------------------------------------------- Goodwin Procter, a national Am Law 50 firm, on May 1 disclosed that five attorneys have joined the firm from the former boutique bankruptcy and restructuring law firm of Stutman, Treister & Glatt. Joining Goodwin as partners are Michael H. Goldstein and William P. Weintraub; as counsel, Eamonn O'Hagan; and as associates Gregory Fox and Kizzy L. Jarashow. Mr. Goldstein, a Fellow of the American College of Bankruptcy, will focus his practice on representing debtors, sponsors, bondholders, creditors, committees and purchasers of distressed assets. His representations have spanned a variety of industries, including chemicals, finance, health care, hospitality, high-tech printing, municipal debt, real estate, retail and technology. Recently, he has been actively involved in representing various funds in connection with, among other credits, Jefferson County, the City of Detroit, and Energy Future Holdings. Mr. Weintraub, also a Fellow of the American College of Bankruptcy, advises debtors and significant creditors in diverse industries and in connection with bankruptcy, restructuring and insolvency, and reorganization matters. Recently, he has been actively involved in complex fraudulent transfer analysis and litigation in such matters as Tribune Corporation, Lyondell Chemical Co., and Bernard L. Madoff Securities, Inc. Mr. O'Hagan advises clients on all aspects of restructurings and bankruptcy matters and has represented lenders, bondholders, derivatives, counterparties and litigants in the Lehman Brothers Holdings, Movie Gallery, and Tribune Corporation Chapter 11 cases. ?We are thrilled to welcome such an esteemed and accomplished group of lawyers to Goodwin,? said Emanuel Grillo, chair of Goodwin's Financial Restructuring Practice. ?Their collective experience and expertise will have a substantial impact on our ability to provide the highest level of counsel to clients facing bankruptcy and business restructuring matters.? Mr. Fox and Ms. Jarashow advise both debtors and creditors in bankruptcy, restructuring and reorganization matters, and represent parties in bankruptcy-related litigations. ?The addition of these five talented lawyers builds on the continued momentum of our expanding New York operation,? said Al Solecki, head of Goodwin's New York office. ?We look forward to this group advising Goodwin clients around the country and around the world.? Goodwin's Financial Restructuring Practice engages in the restructurings of highly leveraged and distressed businesses, real estate assets and portfolios of assets for clients in the United States and abroad. The firm represents clients in formal court proceedings, from litigating confirmation of contested plans to representing debtors and creditors in valuation disputes as well as negotiating the enforcement of creditor rights and claims, debtor protections against creditors and the express terms of financial restructurings. About Goodwin Procter Goodwin Procter LLP -- http://www.goodwinprocter.com-- is a Global 100 law firm, with offices in Boston, Hong Kong, London, Los Angeles, New York, San Francisco, Silicon Valley and Washington, D.C. The firm provides corporate law and litigation services, with a focus on matters involving real estate, REITs and real estate capital markets; private equity; technology companies; financial institutions; intellectual property; products liability and mass torts; and securities litigation and white collar defense. * BOND PRICING -- For Week From April 21 to 25, 2014 ---------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- Alion Science & Technology Corp ALISCI 10.25 69 2/1/2015 Allen Systems Group Inc ALLSYS 10.5 54.75 11/15/2016 Allen Systems Group Inc ALLSYS 10.5 54.75 11/15/2016 Brookstone Co Inc BKST 13 30.116 10/15/2014 Brookstone Co Inc BKST 13 52.75 10/15/2014 Brookstone Co Inc BKST 13 46 10/15/2014 Buffalo Thunder Development Authority BUFLO 9.375 40.375 12/15/2014 Energy Conversion Devices Inc ENER 3 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 8.175 9.45 1/30/2037 Energy Future Holdings Corp TXU 5.55 37.5 11/15/2014 FairPoint Communications Inc/Old FRP 13.125 1 4/2/2018 Frontier Communications Corp FTR 8.25 100.14 5/1/2014 James River Coal Co JRCC 7.875 12 4/1/2019 James River Coal Co JRCC 10 7 6/1/2018 James River Coal Co JRCC 4.5 5 12/1/2015 James River Coal Co JRCC 10 10.75 6/1/2018 James River Coal Co JRCC 3.125 12.749 3/15/2018 LBI Media Inc LBIMED 8.5 30 8/1/2017 MF Global Holdings Ltd MF 6.25 47 8/8/2016 MF Global Holdings Ltd MF 1.875 50 2/1/2016 MModal Inc MODL 10.75 24 8/15/2020 MModal Inc MODL 10.75 26 8/15/2020 Momentive Performance Materials Inc MOMENT 11.5 27.5 12/1/2016 Morgan Stanley MS 4.57895 99.875 5/1/2014 Motors Liquidation Co MTLQQ 7.2 11 1/15/2011 Motors Liquidation Co MTLQQ 7.375 11 5/23/2048 Motors Liquidation Co MTLQQ 6.75 11 5/1/2028 NII Capital Corp NIHD 10 40.6 8/15/2016 OnCure Holdings Inc RTSX 11.75 48.875 5/15/2017 Platinum Energy Solutions Inc PLATEN 14.25 74.75 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.25 74.75 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.25 74.75 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.25 74.75 3/1/2015 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Pulse Electronics Corp PULS 7 80 12/15/2014 Residential Capital LLC RESCAP 6.875 32 6/30/2015 SLM Corp SLMA 3.279 99.455 5/1/2014 Savient Pharmaceuticals Inc SVNT 4.75 0.375 2/1/2018 THQ Inc THQI 5 43.5 8/15/2014 TMST Inc THMR 8 17.75 5/15/2013 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15 24.5 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 6.2 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 4.35 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.5 6.5 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15 23.688 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 5.625 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.5 5.75 11/1/2016 USEC Inc USU 3 26 10/1/2014 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 57.544 8/1/2016 Western Express Inc WSTEXP 12.5 71.375 4/15/2015 Western Express Inc WSTEXP 12.5 71.375 4/15/2015 ********* 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 ***