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/raid1/www/Hosts/bankrupt/TCR_Public/140620.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 20, 2014, Vol. 18, No. 170 Headlines ADVANCED MICRO DEVICES: Issues $500 Million Senior Notes Due 2024 ADAMIS PHARMACEUTICALS: Eses Holdings Reports 16.4% Stake ADVANTAGE SALES: Moody's Says Apax Deal No Impact on 'B2' CFR ALLEN SYSTEMS: Moody's Cuts Probability of Default Rating to D-PD ALLSTATE CORP: Fitch Assigns 'BB+' Preferred Stock Rating AMERICAN AIRLINES: AFA Balks at Placement of New Embraer Jets AMERICAN APPAREL: Management Changes May Trigger Event of Default AMERICAN MEDIA: Avenue Stockholders' Director Designee Resigns AMERICAN TIRE: Moody's Says IPO Filing No Impact on B2 Rating AOXING PHARMA: NYSE MKT Extends Listing Compliance Deadline ARAMID ENTERTAINMENT: Section 341(a) Meeting Set on July 11 ARMTEC HOLDINGS: S&P Lowers CCR to 'CCC+' on Liquidity Concerns AXION INTERNATIONAL: Borrows $1.5 Million from MLTM, et al. AV HOMES: Moody's Assigns 1st Time 'B3' Corporate Family Rating AV HOMES: S&P Assigns 'B-' CCR & Rates Senior Notes 'B-' BANYON 1030-32: Lied To Get Coverage, Insurers Say BOART LONGYEAR: Moody's Lowers Corporate Family Rating to 'Caa1' CAESARS ENTERTAINMENT: Tender Offer Expiration Moved to June 27 CALIFORNIA COMMUNITY: Case Summary & 18 Top Unsecured Creditors CASH STORE: Obtains CCAA Stay Extension Until August 15 CBRE SERVICES: S&P Raises ICR to 'BB+' on Reduced Leverage CENVEO INC: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable CLINE MINING: Bond Default Covered Under Forbearance Agreement COMARCO INC: Incurs $1.3 Million Net Loss in 1st Quarter CONFIE SEGUROS: Moody's Keeps B3 CFR Over Incremental Term Loan COPYTELE INC: Incurs $3.2 Million Net Loss in Second Quarter CORE ENTERTAINMENT: S&P Retains 'B' CCR on CreditWatch Negative CORINTHIAN COLLEGES: Warns of Possible Shutdown CRYOPORT INC: Ramkumar Mandalam Appointed as Director DETROIT, MI: Rolls Out Hybrid Pension Plan DETROIT, MI: Agency Plans Bond Sale to Fix Street Lights DONALD W. WYATT DETENTION FACILITY: Temporary Receiver Appointed EASTERN HILLS: Gets Conditional Court Approval for Plan Outline ENERGY FUTURE: Defaulted Bonds Soar on Bankruptcy Conflict EPAZZ INC: Asher Enterprises No Longer a Shareholder ESP RESOURCES: Receives Default Notice from Hillair Capital FERRELLGAS LP: Moody's Corrects Oct. 21, 2013 Release GENERAL MOTORS: Says Bankruptcy Stay Offers Certain Protections GENERAL MOTORS: Ignored Early Warning on Cars Stalling GENERAL MOTORS: Hagens Berman Files Ignition Switch Class Action GENERAL MOTORS: AAJ Reports on Ignition Switch Cover-Up Exposure GENIUS BRANDS: Launches Secondary Offering of 3.1 Million Shares GOOD SHEPHERD: Moody's Lowers Rating on $93.7MM Bonds to 'Ba3' GROUP HEALTH COOPERATIVE: Fitch Raises IDR From 'BB+' HALEK ENERGY: Law Firms Continue Fight for Gas Scheme Victims HAMPTON ROADS: Shareholders Elect 12 Directors HARRIS LAND: Pulaski County Collector May Pursue Tax Sales HARRIS LAND: To Hire Broker to Sell Sabal Fin'l Collateral HARDWICK CLOTHES: Allan Jones Acquires Business Out of Bankruptcy HERON LAKE: Posts $6.4 Million Net Income in First Quarter HOPEWELL BUSINESS: Case Summary & 20 Largest Unsecured Creditors HOSPITAL ACQUISITION: S&P Revises Outlook to Pos. & Affirms B- CCR HOWARD PAUL IVANY: Chapter 15 Case Summary HUNTER DONALDSON: Voluntary Chapter 11 Case Summary HYDROCARB ENERGY: Incurs $1.6-Mil. Net Loss in Third Quarter INCRED-A-BOWL: Case Summary & 13 Largest Unsecured Creditors IZEA INC: CEO Buys 20,000 Common Shares KANGADIS FOOD: Hires Fox Rothschild as Litigation Counsel KANGADIS FOOD: Employs WeiserMazars as Accountants KANGADIS FOOD: Files List of Largest Unsecured Creditors KID BRANDS: Files Chapter 11 Petition to Facilitate Sale KID BRANDS: Case Summary & 30 Largest Unsecured Creditors LASALLE REALTY: Case Summary & 4 Largest Unsecured Creditors LATTICE INC: Robert Robotti Holds 4.6% Equity Stake LEARFIELD COMMUNICATIONS: S&P Affirms 'B' CCR on Term Loan Add-On LEHMAN BROTHERS: July 31 Proofs of Debt Deadline Set LEHMAN BROTHERS UK: July 31 Proofs of Debt Deadline Set LEVEL 3: Inks Merger Agreement with tw telecom LEVEL 3: Signs Voting Agreement with STT Crossing LEVEL 3: To Acquire tw telecom for $7.3 Billion LIGHTSQUARED INC: Falcone Resigns From Board LUAR CLEANERS: Case Summary & 20 Largest Unsecured Creditors MCCLATCHY CO: Bestinver Gestion Owns 15% of Class A Shares METRORIVERSIDE LLC: Cash Collateral Hearing Continued to July 10 MICRO HOLDING: S&P Assigns Preliminary 'B' CCR; Outlook Stable MICROVISION INC: To Sell $4.5 Million Common Shares MID-ATLANTIC MILITARY: S&P Affirms BB+ Rating on Class III Bonds MILE MARKER: Case Summary & 20 Largest Unsecured Creditors MINT LEASING: Further Amends 70MM Shares Prospectus with SEC MOMENTIVE PERFORMANCE: Restructuring Deal Fails to Win Approval MONTANA ELECTRIC: Harper Hofer Confirmed as Valuation Expert MOTORCAR PARTS: Swings to $107 Million Net Income in Fiscal 2014 NETBANK INC: Asks High Court To Review FDIC Tax Refund Dispute MSR HOTELS: Subsidiary Settles $59M Five Mile Dispute NEW ENTERPRISE STONE: Moody's Affirms 'Caa1' Corp. Family Rating NEWLEAD HOLDINGS: Completes $44.8-Mil. Balance Sheet Program NEXTAG INC: Moody's Lowers Probability of Default Rating to Ca-PD NORTH LAS VEGAS: Moody's Affirms Ba3 Gen. Limited Tax Bond Rating NPC INTERNATIONAL: Moody's Affirms 'B2' Corporate Family Rating OVERSEAS SHIPHOLDING: Confirmation Hearing Begins July 18 OVERSEAS SHIPHOLDING: Asks Court to Extend Exclusive Periods OVERSEAS SHIPHOLDING: Wants to Amend Collective Bargaining Deals OVERSEAS SHIPHOLDING: Ask Court to Clarify Discovery Limits PANACHE BEVERAGE: Grants 500,000 Shares Options to CEO PEREGRINE FINANCIAL: CFTC Rebuked For US Bank Discovery Delay PHYSICIANS UNITED: Declared Insolvent; To be Closed on July 1 PLAYA RESORTS: S&P Affirms 'BB-' Rating on Credit Facility PLUG POWER: Files Financial Statements of ReliOn with SEC PWK TIMBERLAND: Plan Outline Hearing Continued to July 10 REALOGY HOLDINGS: Extends Securitization Program Until 2015 RESTORGENEX CORP: Amends Report on Paloma Pharma Acquisition REVEL AC: Atlantic City Casino Files for Bankruptcy Again QUALITY DISTRIBUTION: Units to Redeem $22.5-Mil. Senior Notes QUANTUM FOODS: Live Webcast Asset Auction Scheduled for June 24-26 ROBINSON ELEVATOR: Case Summary & 20 Largest Unsecured Creditors ROOFING SUPPLY: Moody's Affirms 'B3' CFR; Outlook Revises to Neg. RYNARD PROPERTIES: Management Agreement With LEDIC Okayed SEARS METHODIST: Has Interim Authority to Tap $600,000 DIP Loans SEARS METHODIST: Units Have Interim OK to Use Cash Collateral SEARS METHODIST: Has Until July 8 to File Schedules, Statements SEQUENOM INC: Inks Services Agreement with Quest Diagnostics SERVICEMASTER CO: S&P Retains 'B-' CCR on CreditWatch Positive SOLENIS INTERNATIONAL: S&P Assigns 'B' CCR; Outlook Stable SOLENIS INTERNATIONAL: Moody's Assigns B3 Corporate Family Rating SONOMAX TECH: Regulator Grants Management Cease-Trade Order SPRINGLEAF HOLDINGS: Moody's Affirms 'B3' Corp. Family Rating STACY'S INC: Court Converts Case to Chapter 7 Liquidation STARR PASS: Ch. 11 Case Reassigned to Judge Hollowell T-L CHEROKEE: Cole Taylor Bank Files Competing Liquidation Plan TLC HEALTH: Can Access Cash Collateral Until July 16 TLC HEALTH: July 15 Auction of All Assets US CAPITAL: Mapuche Sues 321 North Lender Over Onerous Debt Scheme US ECOLOGY: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable VERITY CORP: Ronald Kaufman Appointed as President VERMONT SITEWORKS: Case Summary & 20 Largest Unsecured Creditors VERSO PAPER: Achieves Early Compliance with NYSE Listing Standard VISUALANT INC: Unit Renews $1MM Credit Facility with BFI Business WAVE SYSTEMS: To Complete $9.9 Million Stock Offering WAVEDIVISION HOLDINGS: Add-on Notes No Impact on Moody's B2 CFR WAVEDIVISION HOLDINGS: S&P Revises Outlook & Affirms 'B+' CCR WEST CORP: Plans to Offer $1 Billion Senior Notes WEST CORP: S&P Affirms 'BB-' CCR; Outlook Stable WEST CORP: Completes Health Advocate Acquisition YORK, PA: S&P Lowers Sewer Debt Rating to 'BB+'; Outlook Stable YMCA OF MILWAUKEE: Employs Ernst & Young as Financial Advisors YMCA OF MILWAUKEE: Taps Reputation Partners as PR Advisors YMCA OF MILWAUKEE: Proposes Aug. 8 Claims Bar Date YSC INC: Court Allows Sale of Federal Inn to Richard Song YSC INC: Asks Court Impose Stay for Whidbey Island Bank * BofA Sways Judge to Reconsider SEC Mortgage Lawsuit * Bank Regulators Finalize Stricter Tax Refund Guidance * Fitch: US Bank TruPS CDOs Combined Default Still Stable in May * House Approves Permanent Small-Business Tax Break * Japan Ruling Party to Hold Off Regulating Bitcoin * Battle Between Argentina and Hedge Funds Continues in New York * BOOK REVIEW: Competition, Regulation, and Rationing in Health Care ********* ADVANCED MICRO DEVICES: Issues $500 Million Senior Notes Due 2024 ----------------------------------------------------------------- Advanced Micro Devices, Inc., issued $500,000,000 aggregate principal amount of 7.00% Senior Notes due 2024. Interest is payable on January 1 and July 1 of each year beginning Jan. 1, 2015, until the maturity date of July 1, 2024. The Company's obligations under the Notes are not guaranteed by any third party. A copy of the Indenture, including the form of the Notes, is available for free at http://is.gd/F4IPTJ In connection with the issuance and sale of the Notes, the Company also entered into a registration rights agreement, dated June 16, 2014, with J.P. Morgan Securities LLC, as representative of the initial purchasers of the Notes. Pursuant to the Registration Rights Agreement, the Company will file an exchange offer registration statement with the Securities and Exchange Commission with respect to an offer to exchange the Notes for notes having identical terms in all material respects to the Notes and which will evidence the same continuing indebtedness of the Company. The Company will use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective by the SEC under the Securities Act of 1933, as amended, and to consummate the exchange offer by no later than June 16, 2015. About Advanced Micro Devices Sunnyvale, California-based Advanced Micro Devices, Inc., is a global semiconductor company. The Company's products include x86 microprocessors and graphics. Advanced Micro incurred a net loss of $83 million on $5.29 billion of net revenue for the year ended Dec. 28, 2013, as compared with a net loss of $1.18 billion on $5.42 billion of net revenue for the year ended Dec. 29, 2012. The Company's balance sheet at Dec. 28, 2013, showed $4.33 billion in total assets, $3.79 billion in total liabilities and $544 million in total stockholders' equity. * * * In August 2013, Standard & Poor's Ratings Services revised its outlook on Advanced Micro to negative from stable. At the same time, S&P affirmed its 'B' corporate credit and senior unsecured debt ratings on AMD. As reported by the TCR on June 5, 2014, Fitch Ratings has upgraded the long-term Issuer Default Rating (IDR) for Advanced Micro Devices Inc. (NYSE: AMD) to 'B-' from 'CCC'. The upgrade primarily reflects AMD's improved financial flexibility from recent refinancing activity, which extends meaningful debt maturities until 2019. In the Feb. 4, 2013, edition of the TCR, Moody's Investors Service lowered Advanced Micro Devices' corporate family rating to B2 from B1. The downgrade of the corporate family rating to B2 reflects AMD's prospects for weaker operating performance and liquidity profile over the next year as the company commences on a multi- quarter strategic reorientation of its business in the face of a challenging macro environment and a weak PC market. ADAMIS PHARMACEUTICALS: Eses Holdings Reports 16.4% Stake --------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Eses Holdings (FZE) and Ahmed Shayan Fazlur Rahman disclosed that as of June 9, 2014, they beneficially owned 1,715,388 shares of common stock of Adamis Pharmaceuticals Corporation representing 16.4 percent of the shares outstanding. The reporting persons previously owned 1,741,973 shares at Dec. 18, 2013. A full-text copy of the regulatory filing is available for free at http://is.gd/uGvXdf About Adamis San Diego, Calif.-based Adamis Pharmaceuticals Corporation (OTC QB: ADMP) is a biopharmaceutical company engaged in the development and commercialization of specialty pharmaceutical and biotechnology products in the therapeutic areas of respiratory disease, allergy, oncology and immunology. The Company's independent registered public accounting firm has included a "going concern" explanatory paragraph in its report on the Company's financial statements for the years ended March 31, 2013, and 2012, indicating that the Company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives, and that these factors raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "Our management intends to address any shortfall of working capital by attempting to secure additional funding through equity or debt financings, sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions. However, there can be no assurance that we will be able to obtain any sources of funding. If we are unsuccessful in securing funding from any of these sources, we will defer, reduce or eliminate certain planned expenditures. There is no assurance that any of the above options will be implemented on a timely basis or that we will be able to obtain additional financing on acceptable terms, if at all. If adequate funds are not available on acceptable terms, we could be required to delay development or commercialization of some or all of our products, to license to third parties the rights to commercialize certain products that we would otherwise seek to develop or commercialize internally, or to reduce resources devoted to product development. In addition, one or more licensors of patents and intellectual property rights that we have in-licensed could seek to terminate our license agreements, if our lack of funding made us unable to comply with the provisions of those agreements. If we did not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us. Any failure to dispel any continuing doubts about our ability to continue as a going concern could adversely affect our ability to enter into collaborative relationships with business partners, make it more difficult to obtain required financing on favorable terms or at all, negatively affect the market price of our common stock and could otherwise have a material adverse effect on our business, financial condition and results of operations," the Company said in its quarterly report for the period ended Dec. 31, 2013. ADVANTAGE SALES: Moody's Says Apax Deal No Impact on 'B2' CFR ------------------------------------------------------------- Moody's Investors Service said that Advantage Sales and Marketing Inc.'s ("ASM") ratings, including its B2 Corporate Family Rating, are not immediately impacted by the company's announcement that funds advised by Apax Partners have agreed to sell their majority ownership stake in the company. However, if the transaction were funded primarily with debt, it would be credit negative for ASM. Advantage Sales & Marketing Inc. is a national sales and marketing agency in the US, providing outsourced sales, marketing and merchandising services to manufacturers, suppliers and producers of consumer packaged goods. ALLEN SYSTEMS: Moody's Cuts Probability of Default Rating to D-PD ----------------------------------------------------------------- Moody's Investors Service downgraded Allen Systems Group, Inc.'s ("ASG") Probability of Default Rating to D-PD from Ca-PD/LD. The downgrade was prompted by the company's failure to pay the semi- annual interest payment under its 10.5% second lien senior secured notes (originally due May 15th, 2014), after the expiry of the applicable 30 day grace period under the notes indenture. Ratings downgraded: Allen Systems Group, Inc. Corporate Family Rating to Ca from Caa3; Probability of Default Rating to D-PD from Ca-PD/LD ; $300 million second lien senior secured notes due 2016 to C (LGD5, 73%) from Ca (LGD4, 65%). The ratings outlook is stable. Ratings Rationale The downgrade of the PDR reflects the company's failure to pay the semi-annual interest payment under the 10.5% second lien senior secured notes, after expiry of the applicable 30 day grace period under the senior notes indenture, which Moody's classifies as a default event. As a result of the non-payment of interest (after expiry of the grace period), ASG incurred an event of default under the notes indenture. Upon notice from the notes trustee, the notes obligations will be accelerated, subject to a 180 day standstill period under the inter-creditor agreement, signed between the first lien lenders and notes holders. ASG is currently operating under a forbearance agreement with its first lien lenders until September 30, 2014 (which can be extended through November 30, 2014 in certain circumstances). The company is in the process of exploring potential strategic alternatives, which could include a potential sale or balance sheet restructuring. Headquartered in Naples, Florida, ASG is a privately-held provider of enterprise IT software solutions. The company reported revenues of approximately $271 million in the trailing twelve months ended on March 31, 2014. The principal methodology used in this rating was Global Software Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ALLSTATE CORP: Fitch Assigns 'BB+' Preferred Stock Rating --------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Allstate's issuance of preferred stock. At the same time, Fitch affirmed the 'A-' Issuer Default Rating (IDR) of The Allstate Corporation (Allstate) as well as the 'A+' Insurer Financial Strength (IFS) ratings of Allstate Insurance Co. and its property/casualty subsidiaries, and the 'A-' IFS ratings of Allstate Life Insurance Co. and the other life subsidiaries (Allstate Financial). The Rating Outlook is Stable. Key Rating Drivers Allstate issued $250 million of 6.25% fixed-rate perpetual non- cumulative preferred stock and proceeds from the issuance will go toward general corporate purposes. Based on its rating criteria, Fitch has assigned 100% equity credit to the preferred stock and has added an additional notch to the rating to reflect more aggressive loss absorption features. Similar to previously issued preferred stock, the security has no stated maturity, dividends are non-cumulative, and the company has the option to defer them at its discretion. In addition, the security has a mandatory deferral feature that requires deferral if certain capital ratios or operating results are breached. Fitch believes the mandatory deferral could be triggered before there is significant stress noted in the organization. Therefore, it deems the features as having more aggressive loss absorption. After the $250 million preferred stock issuance and maturity of $300 million in senior notes, pro forma financial leverage ratio as of March 31, 2014 was 22%. Financial leverage remained appropriate for the current rating category relative to Fitch's median guideline of 28%. This ratio reflects the equity credit assigned to the new and existing preferred stock as well as excluding unrealized investment gains on fixed income securities from shareholders' equity. Earnings before interest expense and taxes covered interest expense and preferred dividends by 8.8x during the first quarter of 2014 (1Q'14). This level of fixed charge coverage is consistent with Fitch's median guideline of 7x for the current rating category. Fixed charge coverage has been relatively steady, reporting a ratio of 8.3x for the full year 2013. Underwriting results for Allstate's property/liability business deteriorated modestly but remained solid with a GAAP combined ratio of 94.7% for 1Q'14 relative to 92.0% for the full year 2013. Catastrophe losses accounted for 6.3 percentage points on 1Q'14 combined ratio compared to 4.5 points on 2013's ratio. Fitch believes this ratio may deteriorate somewhat in the second quarter as Allstate announced April catastrophe losses of $280 million from six events plus some adverse reserve development on prior- period catastrophe losses. Personal auto accounts for two-thirds of property/liability written premiums and reported a combined ratio of 96.1% for the first three months of 2014, which was relatively steady from 95.7% in the comparable period of 2013. Nearly one-quarter of Allstate's property/liability written premium comes from the homeowners line of business. Underwriting results for the homeowners line continue to be positive, reporting a combined ratio of 88.4% for the first three months of 2014. Catastrophe losses through the first quarter were responsible for modest deterioration in the homeowners combined ratio from 85.6% in the comparable period in 2013. Combined statutory surplus at Allstate's P/C operations was $18 billion at year-end 2013. Surplus continues to grow at a modest pace, but remains below pre-financial crisis levels of $19.1 billion reported at year-end 2006. Stated net leverage was 3.1x at year-end 2013 and approximately 3.6x excluding life company capital. Allstate Financial reported a net income of $162 million for the first three months of 2014, up modestly from $146 million for the comparable period in 2013. Allstate Financial's annualized pre- tax operating return on assets was 0.8% for 1Q'14. Risky assets ratio remains elevated at 178% of total adjusted capital at year- end 2013. The rating on Allstate's life operations reflects Fitch's assessment of its limited strategic importance within the Allstate enterprise and view that the 'standalone' IFS rating is in the 'BBB' category. Ratings of the life operations continue to benefit from the Capital Support Agreement from Allstate Insurance Co. and its access to the holding company credit facility. The life operations focus on traditional underwritten products and de- emphasize spread-based products, which improves its risk profile. Increased earnings at Allstate Financial could eventually improve its strategic importance within the Allstate enterprise, but Fitch believes it will take time for a significant increase in earnings to occur. Fitch's rating rationale anticipates a continuation of Allstate's practice of maintaining liquid assets at the holding company level to fund at least one year of interest expense, preferred and common dividends, as well as upcoming debt maturities. Allstate has $3.3 billion in holding company assets at March 31, 2014 that could be liquidated within three months, relative to forecasted annual interest expense, preferred and common dividends of approximately $890 million, and remaining 2014 debt maturities of $650 million. RATING SENSITIVITIES Key rating triggers for Allstate that could lead to an upgrade include: -- Sustainable capital position measured by net leverage excluding life company capital below 3.8x and a score approaching 'Very Strong' on Fitch's proprietary capital model, Prism; -- Reduced volatility in earnings from catastrophe losses and better operating results consistent with companies in the 'AA' rating category; -- Standalone ratings for Allstate's life subsidiaries could rise if their consolidated statutory Risky Assets/TAC ratio approaches 100% and they are able to sustain a GAAP-based Return on Assets ratio over 80 basis points. Key rating triggers for Allstate that could lead to a downgrade include: -- A prolonged decline in underwriting profitability that is inconsistent with industry averages or is driven by an effort to grow market share during soft pricing conditions; -- Substantial adverse reserve development that is inconsistent with industry trends; -- Significant deterioration in capital strength as measured by Fitch's capital model, NAIC risk-based capital and statutory net leverage. Specifically, if net leverage excluding life company capital approached 4.8x it would place downward pressure on ratings; -- Significant increases in financial leverage ratio to greater than 30%; -- Unexpected and adverse surrender activity on liabilities in the life insurance operations; -- Liquid assets at the holding company reaching less than one year's interest expense and common dividends. Fitch has assigned the following ratings: -- 6.25% preferred stock 'BB+'. Fitch affirms the following ratings for Allstate and subsidiaries: The Allstate Corporation -- Long-term IDR at 'A-'. The following junior subordinated debt at 'BBB-': -- 6.125% $259 million debenture due May 15, 2067; -- 5.10% $500 million subordinated debenture due Jan. 15, 2053; -- 5.75% $800 million subordinated debenture due Aug. 15, 2053; -- 6.5% $500 million debenture due May 15, 2067. The following senior unsecured debt at 'BBB+': -- 5% $650 million note due Aug. 15, 2014; -- 6.75% $176 million debenture due May 15, 2018; -- 7.45% $317 million debenture due May 16, 2019; -- 3.15% $500 million debenture due June 15, 2023; -- 6.125% $159 million note due Dec. 15, 2032; -- 5.35% $323 million note due June 1, 2033; -- 5.55% $546 million note due May 9, 2035; -- 5.95% $386 million note due April 1, 2036; -- 6.9% $165 million debenture due May 15, 2038; -- 5.2% $62 million note due Jan. 15, 2042 -- 4.5% $500 million note due June 15, 2043. Fitch also affirms the following: -- Preferred stock at 'BB+' -- Commercial paper at 'F1'; -- Short-term IDR at 'F1'. Allstate Life Global Funding Trusts Program -- The following medium-term notes at 'A-'. -- $85 million note due Nov. 25, 2016. Fitch also affirms the following: Allstate Insurance Company Allstate County Mutual Insurance Co. Allstate Indemnity Co. Allstate Property & Casualty Insurance Co. Allstate Texas Lloyd's Allstate Vehicle and Property Insurance Co. Encompass Home and Auto Insurance Co. Encompass Independent Insurance Co. Encompass Insurance Company of America Encompass Insurance Company of Massachusetts Encompass Property and Casualty Co. -- IFS at 'A+'. Allstate Life Insurance Co. Allstate Life Insurance Co. of NY American Heritage Life Insurance Co. -- IFS at 'A-'. AMERICAN AIRLINES: AFA Balks at Placement of New Embraer Jets ------------------------------------------------------------- Envoy Air Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA), issued the following statement after American Airlines management announced the placement of 20 new Embraer 175 regional jets with an industry competitor: "The hard working professionals across our company have made the American Eagle brand the gold standard within our industry for over 25 years. We were promised a fresh start after bankruptcy, with a new look, new energy and, most of all, new airplanes. American Eagle (now Envoy) employees, whether represented by unions or not, selflessly gave the concessions demanded by management in order to secure these new airplanes and bring our company into a new era of prosperity after emerging from a very dark period in our history. "What thanks have we received? Apparently NONE. The equipment is being sent to another company which had no connection to the financial restructuring in which we engaged to insure that our company would achieve the profitability it now enjoys -- the same profitability which allows it to obtain this new aircraft. For both American Airlines and Envoy Air management to now turn their backs on our award-winning employees by providing no comment as to the future of our airline is unconscionable. "The demoralizing effect of these misguided decisions continues to weigh heavily on our operation, while long term damage from the loss of in-house profits, loss of qualified pilots, and continued contraction of our aging fleet is quickly approaching critical mass. "AFA calls upon management to do something very simple, something very American: Make it right. Honor your commitments. Take the high road. Give your 16,000 employees the tools required to return our company to the best-in-class leader we always have been. Now is the time to set Envoy Air on the correct course." About The Association of Flight Attendants The Association of Flight Attendants -- http://www.afacwa.org-- is the world's largest Flight Attendant union. Focused 100 percent on Flight Attendant issues, AFA has been the leader in advancing the Flight Attendant profession for 68 years. Serving as the voice for Flight Attendants in the workplace, in the aviation industry, in the media and on Capitol Hill, AFA has transformed the Flight Attendant profession by raising wages, benefits and working conditions. Nearly 60,000 Flight Attendants come together to form AFA, part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. AMERICAN APPAREL: Management Changes May Trigger Event of Default ----------------------------------------------------------------- The Board of Directors of American Apparel, Inc. on June 18 voted to replace Dov Charney as Chairman and notified him of its intent to terminate his employment as President and CEO for cause. It is expected that the termination will be effective following a 30-day cure period required under the terms of Mr. Charney's employment agreement. The Board suspended Mr. Charney from his positions as President and CEO, effective immediately, pending the expiration of the cure period. At the same time, the Board appointed John Luttrell as Interim Chief Executive Officer. Mr. Luttrell, who has been with American Apparel since February 2011 and currently serves as Executive Vice President and Chief Financial Officer, will continue in those positions as well. Prior to joining American Apparel, Mr. Luttrell served as Executive Vice President and Chief Financial Officer of Old Navy, The Wet Seal and Cost Plus. Also effective immediately, the Board appointed Allan Mayer and David Danziger as Co-Chairmen to replace Mr. Charney as Chairman of the Board. In accordance with the terms of his employment agreement, the Board intends to request Mr. Charney's resignation as a member of the Board concurrently with the effective time of his termination. Mr. Mayer, who has been a member of the Board since the company went public in 2007 and has served as its lead independent director for the past three years, said the Board's decision to replace Mr. Charney grew out of an ongoing investigation into alleged misconduct. "We take no joy in this, but the Board felt it was the right thing to do," Mr. Mayer said. "Dov Charney created American Apparel, but the Company has grown much larger than any one individual and we are confident that its greatest days are still ahead." "The Board is working with a search firm to identify candidates for the job of permanent CEO and, based on our initial discussions with the search firm, we expect the list of possible successors will be impressive," said Mr. Danziger, who has chaired the Board's Audit Committee since 2011. "We have one of the best known and most relevant brands in the world, with employees who are second to none; I believe we have a very exciting future," said Mr. Luttrell. "Our core business -- designing, manufacturing, and selling American-made branded apparel -- is strong and continues to demonstrate great potential for growth, both in the U.S. and abroad. This new chapter in the American Apparel story will be the most exciting one yet." Mr. Luttrell said American Apparel would remain committed to its sweatshop-free, Made in USA manufacturing philosophy. As a result of the management changes, the Company may have been deemed to have triggered an event of default under its credit agreements and will be in discussions with its lenders for a waiver of the default. Additional details are provided in the Company's Form 8-K filing with the Securities and Exchange Commission, dated June 18, 2014. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. American Apparel reported a net loss of $106.29 million on $633.94 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $37.27 million on $617.31 million of net sales for the year ended Dec. 31, 2012. As of Dec. 31, 2013, the Company had $333.75 million in total assets, $411.15 million in total liabilities and a $77.40 million total stockholders' deficit. * * * As reported by the Troubled Company Reporter on Feb. 26, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating to 'CCC' from 'B-' on Los Angeles-based American Apparel Inc. The outlook is developing. The Troubled Company Reporter, on Nov. 21, 2013, reported that American Apparel Inc. had its corporate family rating cut one level to Caa2 by Moody's Investors Service. The clothing retailer's probability of default was also lowered one level and the outlook is negative. AMERICAN MEDIA: Avenue Stockholders' Director Designee Resigns -------------------------------------------------------------- American Media, Inc., received a written letter of resignation on June 12, 2014, from Andrew Russell stating that he resigned, effective immediately, from his position on the Board of Directors of the Company. The Company said Mr. Russell resigned from the Board to pursue other business opportunities and not as a result of any dispute or disagreement with the Company. Pursuant to the Company's Stockholders Agreement, dated as of Dec. 22, 2010, the Avenue Stockholders (as defined in the Stockholders Agreement) have the right to designate four directors on the Board. Mr. Russell had been previously designated by the Avenue Stockholders. On June 12, 2014, pursuant to designation by the Avenue Stockholders under the Stockholders Agreement, the Board of the Company appointed Randal Klein to the Board in order to fill the vacancy created by the resignation of Mr. Russell. Mr. Klein has not been appointed to any committees of the Board. Due to Mr. Russell's resignation from the Board, the Compensation Committee is now comprised of Michael Elkins (Chairman), Gavin Baiera, Charles Koones, and and David Pecker. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media incurred a net loss of $55.54 million on $348.52 million of total operating revenues for the fiscal year ended March 31, 2013, as compared with net income of $22.29 million on $386.61 million of total operating revenues for the fiscal year ended March 31, 2012. As of Dec. 31, 2013, the Company had $565.84 million in total assets, $692.81 million in total liabilities, $3 million in redeemable noncontrolling interest, and a $129.97 million total stockholders' deficit. * * * As reported by the TCR on Nov. 20, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Boca Raton, Fla.- based American Media Inc. to 'CCC+' from 'SD'. "The upgrade follows the company's exchange of $94.3 million of its $104.9 million 13.5% second-lien cash-pay notes due 2018 for privately held $94.3 million 10% second-lien notes due 2018," said Standard & Poor's credit analyst Hal Diamond. AMERICAN TIRE: Moody's Says IPO Filing No Impact on B2 Rating ------------------------------------------------------------- Moody's Investors Service said that American Tire Distributors, Inc.'s ("ATD", B2 stable) planned Initial Public Offering is a potential credit positive because if completed, it will result in lower debt levels, but the ratings and outlook remain. AOXING PHARMA: NYSE MKT Extends Listing Compliance Deadline ----------------------------------------------------------- Aoxing Pharmaceutical Company, Inc. on June 16 disclosed that it had received notice from NYSE MKT LLC that, based upon the financial statements contained in Aoxing Pharma's Annual Report on Form 10-K for the year ended June 30, 2013 and its Quarterly Reports on Form 10-Q for the periods ended September 30, 2013 and December 31, 2013, Aoxing Pharma is not in compliance with the following sections of the NYSE MKT Company Guide: -- Section 1003(a)(i) since it reported stockholders' equity of less than $2,000,000 at December 31, 2013 and has incurred losses from continuing operations and/or net losses in two of its three most recent fiscal years ended June 30, 2013; -- Section 1003(a)(ii) since it reported stockholders' equity of less than $4,000,000 at September 30, 2013 and has incurred losses from continuing operations and/or net losses in three of its four most recent fiscal years ended June 30, 2013; -- Section 1003(a)(iii) since it reported stockholders' equity of less than $6,000,000 at June 30, 2013 and has incurred losses from continuing operations and/or net losses in its five most recent fiscal years then ended; and -- Section 1003(a)(iv) since it has sustained losses that are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the NYSE MKT, as to whether the Company will be able to continue operations and/or meet its obligations as they mature. The Company was afforded the opportunity to submit plans of compliance to the Exchange. Based on the plans of compliance submitted by the Company, the Exchange granted the Company an extension until April 27, 2015 to regain compliance with Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iii). The Exchange also granted the Company an extension until May 30, 2014 to regain compliance with Section 1003(a)(iv). On June 10, 2014, the Exchange notified the Company that the period during which it will be permitted to regain compliance with Section 1003(a)(iv) has been extended to June 30, 2014. The Company will be subject to periodic review by the Exchange Staff during the extension periods. Failure to make progress consistent with the plans or to regain compliance with the listing standards by the ends of the extension periods could result in the Company being delisted from the NYSE MKT LLC. About Aoxing Pharmaceutical Company, Inc. Aoxing Pharmaceutical Company, Inc. -- http://www.aoxingpharma.com -- is a US incorporated specialty pharmaceutical company with its operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain- management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing Pharma has the largest and most advanced manufacturing facility in China for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China State Food and Drug Administration (SFDA). Aoxing Pharma has a joint venture collaboration with Johnson Matthey Plc to produce and market narcotics and neurological drugs in China. ARAMID ENTERTAINMENT: Section 341(a) Meeting Set on July 11 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of Aramid Entertainment Fund Limited will be held on July 11, 2014, at 3:00 p.m. at 80 Broad St., 4th Floor, USTM. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Aramid Entertainment Aramid Entertainment Fund Limited has been engaged in the business of providing short and medium term liquidity to producers and distributors of film, television and other media and entertainment content by way of loans and equity investments. On May 7, 2014, Geoffrey Varga and Jess Shakespeare of Kinetic Partners (Cayman) Limited were appointed under Cayman law as the joint voluntary liquidators of AEF and two affiliates. On June 13, 2014, the JVLs authorized AEF and two affiliates to file for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11802) in Manhattan on June 13, 2014. The Debtors have tapped Reed Smith, LLP, in New York, as counsel and Kinetic Partners (Cayman) Limited as crisis managers. AEF estimated at least $100 million in assets and between $10 million to $50 million in liabililities. ARMTEC HOLDINGS: S&P Lowers CCR to 'CCC+' on Liquidity Concerns --------------------------------------------------------------- Standard & Poor's Rating Services said it lowered its long-term corporate credit rating on Concord, Ont.-based Armtec Holdings Ltd. to 'CCC+' from 'B-'. The outlook is negative. Standard & Poor's also lowered its issue-level rating on Armtec's senior unsecured notes to 'CCC-' from 'CCC'. The '6' recovery rating on the notes is unchanged, indicating S&P's expectation of negligible (0%-10%) recovery in the event of default. "We base the downgrade on our expectation that Armtec's credit metrics and earnings will be weaker than previously forecast through 2014 and liquidity will be further strained," said Standard & Poor's credit analyst Rahul Arora. "We expect the company to rely on external financing to fund its working-capital and capex requirements," Mr. Arora added. The ratings on Armtec reflect what Standard & Poor's views as the company's "weak" business risk profile and "highly leveraged" financial risk profile. S&P's assessment of Armtec's business risk profile is based on the company's role as a provider of products for the construction industry. As a result, Armtec is subject to the cyclical nature of construction, which is demand- sensitive to the economy, as well as to interest rates, raw material costs, and energy prices. Furthermore, barriers to entry in the drainage solutions industry are low, and Armtec has recently experienced increasing competition in this area. The company's operating margins and overall profitability are vulnerable to a number of factors that can have a negative effect on cash flow, including Armtec's inability to fully pass on raw material cost increases to its customers, and customer-caused project delays. Offsetting some of these weaknesses is the fact that Armtec has both some end-market diversity by serving the infrastructure, residential, commercial, and agricultural sectors, as well as geographic diversity, because it operates throughout the whole of Canada. S&P also believes some of Armtec's cyclicality in earnings is mitigated by its exposure to the public infrastructure market (which accounts for about half of annual revenues) that historically has seen less variability in demand than the commercial and residential sectors. The negative outlook on Armtec reflects Standard & Poor's expectation of negative pressure on the company's liquidity through 2014 stemming from working capital requirements. S&P expects EBITDA interest coverage to be about 1.3x, which it believes leaves limited possibility of debt repayment and dependence on external financing. S&P could downgrade Armtec should the company's EBITDA interest coverage fall below 1x, resulting in negative discretionary cash flows or if liquidity declines to "weak." S&P could upgrade the company if Armtec's earnings improve, resulting in interest coverage at or above 1.5x, which S&P believes is where the company is free cash neutral and liquidity improves commensurate with its assessment of "adequate." AXION INTERNATIONAL: Borrows $1.5 Million from MLTM, et al. ----------------------------------------------------------- MLTM Lending, LLC, and Samuel Rose each loaned Axion International Holdings, Inc., an aggregate principal amount of $1,000,000 and on June 13, 2014, Allen Kronstadt loaned the Company a principal amount of $500,000. In consideration of those loans, the Company issued its convertible promissory notes to MLTM, Kronstadt and Rose, each of which, in the event the shares of the Company's common stock, no par value, are listed on a U.S. based stock exchange, will automatically convert into Common Stock in accordance with the calculations provided therein. The Convertible Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from their issuance date or upon the occurrence of an Event of Default. The Company may prepay the Convertible Notes, in whole or in part, upon the consent of the holders thereof. Interest accrues on the Convertible Notes at a rate of 8 percent per annum, payable in arrears on the date the Convertible Notes are repaid or prepaid in full. About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. AXION International reported a net loss of $24.19 million on $6.63 million of revenue in 2013, compared to a net loss of $5.43 million on $5.34 million of revenue in 2012. As of March 31, 2014, the Companyhad $16.53 million in total assets, $34.37 million in total liabilities, $6.94 million in 10% convertible preferred stock and a $24.78 million total stockholders' deficit. Following the 2013 results, BDO USA, LLP, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has suffered recurring losses from operations and has working capital and net capital deficiencies. BDO USA, LLP also issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. AV HOMES: Moody's Assigns 1st Time 'B3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned a first-time B3 corporate family rating and B3-PD probability of default rating to AV Homes, Inc.. In a related action, Moody's also assigned a Caa1 rating to the company's proposed $200 million of senior unsecured notes due 2021. Proceeds of the new notes will be used for opportunistic land acquisitions and strategic repositioning of existing active adult and primary residential communities. In addition, Moody's assigned a speculative grade liquidity rating of SGL-3. The rating outlook is stable. The following ratings were assigned: B3 Corporate Family Rating; B3-PD Probability of Default rating; Caa1 (LGD 4) rating on the proposed $200 million of senior unsecured notes due 2021; SGL-3 Speculative Grade Liquidity Rating. Ratings Rationale AV Homes' B3 corporate family rating reflects the company's small size and presence in few markets within the US as well as its limited track record in its current configuration. The company's operating performance in recent years has been very weak, largely attributable to a burdensome cost structure and exacerbated by weak home sales. In addition, Moody's regard AV Homes' liquidity profile as only adequate, hampered by Moody's expectations for a thin cash position, negative free cash flow generation for the next 12 to 18 months, and potential difficulty with satisfying certain financial covenants. Counterbalancing these risk factors are AV Homes' moderate pro forma adjusted debt leverage out of the box (approximately 50%), as well as Moody's current positive outlook on the US homebuilding industry. Moody's also view TPG's sizeable equity investment in the company in 2013 and the recent addition of a CEO with a strong homebuilding pedigree as credit positives. The Caa1 rating assigned to AV Homes' proposed $200 million senior unsecured notes is one notch below the corporate family rating as a result of the notes' junior position in the capital structure. Above it resides the $65 million senior secured revolver, which benefits from a first-priority interest in substantially all of the company's assets, including land. AV Homes' SGL-3 speculative grade liquidity rating reflects the company's adequate liquidity profile. The company has pro forma cash on hand of $252 million, but expects to deploy proceeds of the proposed note issuance into already identified repositioning initiatives and opportunistic land purchases, maintaining minimal cash going forward. Moody's also project free cash flow remaining negative for at least the next 12 to 18 months, which could lead to reliance on the revolving credit facility for seasonal needs or for satisfying minimum liquidity requirements. The revolver has financial covenants, including a 60% maximum net debt-to- capitalization ratio, a minimum tangible net worth test that fluctuates with operating performance, a 1.5x minimum interest coverage ratio, and a minimum liquidity test based on debt service requirements. Moody's expect that the company will maintain sufficient headroom under its leverage and net worth covenants. However, Moody's expect interest coverage to remain below the required threshold for the next 12 months, requiring the company to hold one year's worth of interest payments in a restricted account until it is in compliance with the covenant. The stable rating outlook is based on Moody's expectations of an improving financial performance, driven primarily by top line growth, moderate debt leverage, and adequate liquidity. Positive rating actions are unlikely over the near term, as AV Homes' operating performance has historically been weak and the company will rely heavily on growth in revenues to drive profitability over the near term. AV Homes also has a limited track record in its current configuration and will have to demonstrate sustained improvement and an ability to meet all of its financial covenants. A downgrade could occur if the company's liquidity profile deteriorates or if adjusted debt leverage rises above 60%, EBIT interest coverage remains below 1.0x, and/or GAAP gross margins decline to below 10%. The principal methodology used in this rating was the Global Homebuilding Industry published in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. AV Homes, Inc., headquartered in Scottsdale, AZ, is a public homebuilder that designs, builds and sells homes in Arizona, Florida and North Carolina, and also engages in community development and land sales. AV Homes focuses on the development and sale of homes to first-time and move-up buyers in active adult communities and primary residential communities. In June 2013, AV Homes completed a $135 million equity raise with TPG Capital, which currently has a 42% ownership interest in the company. During the 12 months ended March 31, 2014, AV Homes generated total revenues and a net loss of approximately $162 million and $7 million, respectively. AV HOMES: S&P Assigns 'B-' CCR & Rates Senior Notes 'B-' -------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B-' corporate credit rating to AV Homes Inc. (AV). The outlook is stable. S&P also assigned a 'B-' issue rating and '3' recovery rating to the company's proposed $200 million of senior unsecured notes. The '3' recovery rating indicates expectations of meaningful (50% to 70%) recovery in a payment default. "The ratings on AV reflect the builder's 'vulnerable' business risk profile characterized by a small, geographically concentrated operating platform and lack of sustained profitability to date," said Standard & Poor's credit analyst Matthew Lynam. "We view the financial risk profile as 'highly leveraged,' given projected cash flow-based credit metrics that will remain very weak over the next two years," Mr. Lynam said. AV (formerly Avatar Holdings Inc.) is engaged in the business of homebuilding, community development, and land sales in Florida and Arizona, and more recently expanded into North Carolina. The business focuses on the acquisition and development of large master planned communities serving active adult buyers and primary residential communities serving first-time and move-up buyers. Additionally, the company has a portfolio of legacy land holdings comprised of roughly 7,500 acres that it will sell in favorable market conditions. The stable outlook reflects S&P's expectation that the company controls sufficient land and liquidity to expand its homebuilding platform and generate meaningful EBITDA growth over the next two years following recent investment and capital markets activity. S&P projects debt to EBITDA to improve, but remain greater than 5x and interest coverage to be near 1.5x by the end of 2015. S&P also expects AV to prudently pursue land investments and maintain adequate liquidity. S&P could lower the rating if liquidity becomes constrained, covenant headroom tightens, or EBITDA growth fails to meaningfully cover interest obligations by 2015. S&P considers an upgrade unlikely at this time. Longer term, S&P would consider raising the rating if AV can successfully expand its community count and generate enough operating leverage in order to reduce debt to EBITDA below 5x while maintaining adequate liquidity. BANYON 1030-32: Lied To Get Coverage, Insurers Say -------------------------------------------------- Law360 reported that a host of insurers led by Ironshore Indemnity Inc. asked a Florida federal judge to void around $70 million of policies it issued to a bankrupt hedge fund that fed into Scott Rothstein's notorious Ponzi scheme, claiming the policies were obtained through deception. According to the report, in a motion for summary judgment in the coverage dispute, the insurers said Banyon Income Fund LP and related entities lied about their internal controls and did "virtually aspect of their business" to get coverage, adding that the insurers never would have issued the excess policies had they known the truth. The case is Ironshore Indemnity Inc. et al. v. Banyon 1030-32 LLC et al., case number 0:12-cv-61678, in the U.S. District Court for the Southern District of Florida. About Banyon 1030-32 LLC Banyon 1030-32, LLC, which was the largest lender to Scott Rothstein's $1.2 billion Ponzi scheme, sought bankruptcy (Bankr. S.D. Fla. Case No. 10-33691) in November 2011. Robert Furr was named Chapter 7 trustee. Banyon was formed in 2007 by George and Gayla Sue Levin for the purpose of investing in Rothstein's confidential settlement scheme and sunk more than $971 million into the scam before it collapsed in October 2009. Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. Mr. Rothstein pled guilty to the scheme in January 2010 and was sentenced to 50 years in prison. In September 2011, Banyon paid at least $10 million to exit a suit brought by RRA's bankruptcy trustee, who had originally sought $830 million from the company. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. RRA won approval of an amended liquidating Chapter 11 plan pursuant to the Court's July 17, 2013 confirmation order. The revised plan, filed in May, is centered around a $72.4 million settlement payment from TD Bank NA. BOART LONGYEAR: Moody's Lowers Corporate Family Rating to 'Caa1' ---------------------------------------------------------------- Moody's Investors Service downgraded Boart Longyear Limited's corporate family and probability of default ratings to Caa1 and Caa1-PD respectively from B3 and B3-PD respectively. The speculative grade liquidity rating was lowered to SGL-4 from SGL- 3. At the same time Moody's downgraded Boart Longyear Management Pty Limited's guaranteed secured notes to B3 from B2 and affirmed the Caa2 senior unsecured notes rating. The outlook is negative. The downgrade of the corporate family rating (CFR) to Caa1 reflects the ongoing challenging market conditions for Boart's business with reported EBITDA for the three months ended March 31, 2014 of roughly negative $2 million. The pull back by the mining industry in exploration and development expenditures is expected to continue through 2014 resulting in further contraction in debt protection metrics from a weak fiscal year end 2013 position as evidenced by EBIT/interest of -0.3x and debt/EBITDA of 5.9x. The significant downward movement in gold prices, metal prices and softening in iron ore prices has resulted in the mining industry significantly curtailing exploration activity as well as new project development. Boart's drilling services segment has consequently experienced a steep decline in activity as gold accounts for roughly 39% of revenues followed by copper at 22%. Average operating rig utilization levels through March 31, 2014 of approximately 32% remain relatively unchanged from the low of around 31% in the 2013 fourth quarter. Given the mining industry's focus on cost discipline, investment discipline and reduced exploration levels, together with Moody's expectation for continued precious and base metal price pressure over the next twelve to eighteen months, Boart's performance is not expected to improve, although the company's focus on cost savings (between $165 million and $170 million SG&A run rate targeted for 2014) will provide some benefit. The downgrade also considers the company's ongoing strategic review to ensure the capital adequacy of the company in light of the extreme market conditions. The negative outlook reflects the ongoing risks facing the company given the poor market fundamentals as well as the expectation for a continuation of weak credit metrics. The outlook also captures the uncertainty as to what the strategic review will conclude. Ratings Rationale The Caa1 corporate family rating reflects the weak earnings generation capacity of the company, its increasing leverage and the difficult conditions it faces given the pull back by the mining industry in the service areas that Boart provides. However, the rating considers the company's position as a leading global supplier of drilling services and complementary drilling products, principally to the mineral mining industry but also to the environment and infrastructure end markets. Although the company's liquidity, which includes a $140 million, secured revolving credit facility ($120 million available for borrowings, with the balance only available for letters of credit) remains adequate, the rating reflects the potential for covenant pressure should performance continue through the rest of the year at current levels. The lowering of the speculative grade liquidity rating to SGL-4 from SGL -3 reflects the expectation of more limited internal cash flow generation to support the business, and the tightness in and potential for breach of covenants absent any modifications to the current capital structure. The B3 rating on the senior secured notes reflects their priority position in the capital structure relative to the amount of unsecured liabilities. The Caa2 rating on the senior unsecured notes reflects their junior position relative to the amount of secured debt and priority payables and the higher likelihood of loss. The ratings could be downgraded should liquidity continue to deteriorate, the company be unable to be free cash flow breakeven, or debt/EBITDA be sustained at or above current levels. Given the weakness expected in Boart's key markets over the next twelve to eighteen months, a rating upgrade is unlikely. Headquartered in South Jordan, Utah, Boart Longyear Limited is incorporated in Australia and listed on the Australian Securities Exchange Limited. The company provides drilling services and complimentary drilling products and equipment, principally for the mining and metals industries. Revenues for the twelve months ended December 31, 2013 were $1.2 billion, 39% below 2012 levels. The principal methodology used in this rating was the Global Business and Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CAESARS ENTERTAINMENT: Tender Offer Expiration Moved to June 27 --------------------------------------------------------------- Caesars Entertainment Corporation's subsidiary, Caesars Entertainment Operating Company, Inc., has amended its previously announced cash tender offers to purchase any and all of the outstanding $791,767,000 aggregate principal amount of its 5.625% Senior Notes due 2015 and any and all of the outstanding $214,800,000 aggregate principal amount of its 10.00% Second- Priority Senior Secured Notes due 2015. The Issuer is extending the previously announced early tender time, which was 5:00 p.m., New York City time, on June 16, 2014, to 5:00 p.m., New York City time, on June 27, 2014. The Issuer is also extending the previously announced expiration time, which was 5:00 p.m., New York City time, on June 16, 2014, to 5:00 p.m., New York City time, on June 27, 2014. All other terms of the tender offers remain unchanged. Accordingly, holders of Notes who validly tender their Notes before the Expiration Time will be eligible to receive the previously announced total consideration of $1,048.75 for each $1,000 principal amount of the 5.625% Notes and $1,022.50 for each $1,000 principal amount of the 10.00% Notes. The previously announced withdrawal deadline of 5:00 p.m., New York City time, on May 19, 2014, has passed. As a result, holders who have previously tendered Notes and those holders who tender Notes at or before the Expiration Time may not withdraw those Notes. The tender offers are subject to conditions including the Financing Condition described in the Offer Documents. If any of the conditions are not satisfied, the Issuer may terminate the tender offers and return tendered Notes. The Issuer has the right to waive any of the above-mentioned conditions with respect to the tender offers for the Notes and to consummate the tender offers. In addition, the Issuer has the right, in its sole discretion, to terminate any of the tender offers at any time, subject to applicable law. Citigroup Global Markets Inc. is acting as Dealer Manager for the tender offers for the Notes. Questions regarding the tender offers may be directed to Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) or (212) 723-6106 (collect). Global Bondholder Services Corporation is acting as the Information Agent for the tender offers. Requests for the Offer Documents may be directed to Global Bondholder Services Corporation at (212) 430-3774 (for brokers and banks) or (866) 470-4500 (for all others). Unit Closes $1.7BB of New Term Loans On June 17, 2014, Caesars Entertainment Operating Company, Inc., a majority-owned subsidiary of Caesars Entertainment Corporation, announced that its wholly owned subsidiary, Caesars Operating Escrow LLC, an unrestricted subsidiary under CEOC's debt agreements, closed on $1,750 million of new term loans pursuant to an Incremental Facility Amendment and Term B-7 Agreement, dated as of June 11, 2014, among the Escrow Borrower, CEC, the lenders, the Administrative Agent, Credit Suisse AG, Cayman Islands Branch, as Escrow Administrative Agent, and the other parties thereto. The Escrow Borrower deposited the net proceeds of the B-7 Term Loan into a segregated escrow account and those funds will remain in such account until the date that certain escrow conditions are satisfied. The funds held in the escrow account will be released to CEOC upon delivery by the Escrow Borrower to the Escrow Administrative Agent of an officer's certificate certifying that, prior to or concurrently with the release of funds from the escrow account, the relevant escrow release conditions have been satisfied. The escrow conditions with respect to the initial $1,450 million of B-7 Term Loans to be released and with respect to the additional $300 million of B-7 Term Loans to be subsequently released include, among others, the receipt of all required regulatory approvals and, with respect to the subsequent release, the effectiveness of the amendment to the Credit Facilities referred to in CEOC's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2014. Upon the Escrow Release Date, the B-7 Term Loans will be assumed by CEOC and will become incremental term loans governed by and incorporated into CEOC's Second Amended and Restated Credit Agreement, dated as of March 1, 2012, among CEOC, as borrower, CEC, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent and collateral agreement. The B-7 Term Loan has a maturity of Jan. 28, 2018; provided that if the aggregate principal amount of CEOC's 11.25% Senior Secured Notes due 2017 outstanding on April 14, 2017, exceeds $250 million, the B-7 Term Loan will mature on April 14, 2017. The Escrow Borrower granted to the Escrow Administrative Agent, for the benefit of the lenders of the B-7 Term Loan, a first priority security interest in the escrow account. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. Caesars Entertainment reported a net loss of $2.93 billion in 2013, as compared with a net loss of $1.50 billion in 2012. The Company's balance sheet at March 31, 2014, showed $24.37 billion in total assets, $26.65 billion in total liabilities and a $2.27 billion total deficit. * * * Caesars Entertainment carries a 'CCC' long-term issuer default rating, with negative outlook, from Fitch and a 'Caa1' corporate family rating with negative outlook from Moody's Investors Service. As reported in the TCR on Feb. 5, 2013, Moody's Investors Service lowered the Speculative Grade Liquidity rating of Caesars Entertainment Corporation to SGL-3 from SGL-2, reflecting declining revolver availability and Moody's concerns that Caesars' earnings and cash flow will remain under pressure causing the company's negative cash flow to worsen. In the April 10, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiaries, Caesars Entertainment Operating Co. (CEOC) and Caesars Entertainment Resort Properties (CERP), as well as the indirectly majority-owned Chester Downs and Marina, to 'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that Caesars' capital structure is unsustainable, and the amount of cash the company will burn in 2014 and 2015 creates conditions under which S&P believes a restructuring of some form is increasingly likely over the near term absent an unanticipated significantly favorable change in operating performance. CALIFORNIA COMMUNITY: Case Summary & 18 Top Unsecured Creditors --------------------------------------------------------------- Debtor: California Community Collaborative, Inc. 493 Muerer Street Folsom, CA 95630 Case No.: 14-26351 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: June 17, 2014 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: David M. Meegan, Esq. MEEGAN, HANSCHU & KASSENBROCK 11341 Gold Express Dr #110 Gold River, CA 95670 Tel: (916) 925-1800 Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Merrell G. Schexnydre, president. List of Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Susan Stockdale Promissory Note $128,500 Khalil H. Bey Promissory Note $25,000 American Express Credit Card $24,631 American Express Credit Card $16,582 Associated Landscape Maintenance Business expense $5,775 Mechanical Air Control Business expense $5,736 Patten Construction, Inc. Business expense $5,100 Amtech Elevator Services Business expense $4,082 Kalser Foundation Health Business expense $3,826 Joe Borroto Business expense $3,500 Olympic Security Services Business expense $3,375 Arrow Power Sweepting Business expense $2,680 Sullivan Hill Business expense $2,183 All About Cleaning Services $1,500 Department of Industrial Relations Business expense $900 City of San Bernardino Property taxes $823 Chem-Pak Business expense $469 AT&T Business expense $114 CASH STORE: Obtains CCAA Stay Extension Until August 15 ------------------------------------------------------- The Cash Store Financial Services Inc. has obtained an order from the Ontario Superior Court of Justice (Commercial List) granting a stay extension under its current Companies' Creditors Arrangement Act proceedings to Aug. 15, 2014. The Company also announced that the Court has approved a Sales Process whereby prospective purchasers will have the opportunity to submit a bid for the Company's property. Cash Store Financial's Chief Restructuring Officer and Rothschild Inc. will conduct the Sales Process with the oversight of the Court- appointed Monitor, FTI Consulting Canada Inc. Cash Store Financial remains open for business with its branches operating. Cash Store will continue to provide updates on its restructuring and the Cash Store Transaction as matters advance. About Cash Store Financial Headquartered in Edmonton, Alberta, Cash Store Financial Services Inc. (TSX: CSF) is a lender and broker of short-term advances and provider of other financial services in Canada. Cash Store Financial operates 510 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 27 branches in the United Kingdom. Cash Store Financial is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operating in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial reported a net loss and comprehensive loss of C$35.53 million for the year ended Sept. 30, 2013, as compared with a net loss and comprehensive loss of C$43.52 million for the year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company had C$164.58 million in total assets, C$165.90 million in total liabilities and a C$1.32 million shareholders' deficit. CBRE SERVICES: S&P Raises ICR to 'BB+' on Reduced Leverage ---------------------------------------------------------- Standard & Poor's Ratings Services said it raised its issuer credit rating on CBRE Services Inc. to 'BB+' from 'BB'. The outlook is positive. At the same time, S&P revised its recovery ratings on the company's senior secured debt--a $1.2 billion revolving credit facility, a $500 million tranche A term loan, and a $215 million tranche B term loan--to '2' from '4' and raised the issue ratings to 'BBB-' from 'BB'. S&P also revised its recovery ratings on CBRE's $800 million senior unsecured notes due in 2023 and its $350 million senior unsecured notes due in 2020 to '5' from '6' and raised the issue ratings to 'BB' from 'B+'. "CBRE's leverage (as measured by our calculation of debt to EBITDA) has declined significantly as the company has reduced its debt and improved its operating results," said Standard & Poor's credit analyst Brendan Browne. "We expect leverage to move close to 2x in 2014. In our view, CBRE has also shown that it will likely manage its leverage more conservatively than it has in the past, and that it is unlikely to issue a large amount of debt to finance an acquisition or shareholder payout," said Mr. Browne. The decrease in leverage was not only the result of a rise in CBRE's cyclical revenue sources, such as property sales and mortgage brokerage, but also because the company's steadier businesses -- particularly global corporate services (GCS) -- have grown and its debt has fallen. For instance, GCS has been increasing at a double-digit pace as more corporations are hiring CBRE to manage their international property needs. The company's scale and diversification have allowed it to win this new business. S&P expects this trend to continue--particularly following CBRE's acquisition of Norland Managed Services Ltd. in December 2013 -- providing CBRE with a growing source of steady and lower-risk income. S&P's positive outlook on its rating on CBRE reflects its expectation that the company will further reduce its leverage and continue to grow its GCS business. S&P believes that the company could make further acquisitions, but it is unlikely to sharply increase its leverage in the process. S&P could raise the rating if the company maintains its new conservative approach to financial management and reports further growth in its low-risk GCS business (perhaps continuing the double-digit organic growth that the unit has been experiencing). If the company made an effort to move more towards an unsecured debt profile -- rather than the current structure of roughly half secured debt and half unsecured debt -- S&P would view it as a positive rating factor. S&P believes unsecured debt usually affords companies more flexibility if they come under stress. S&P is unlikely to raise the rating if leverage falls further simply because the company reports strong growth in the highly cyclical areas of its business (sales, leasing and mortgage brokerage)--with no meaningful growth in areas where the company collects steadier, contractual revenues. S&P could lower the rating if the company increases leverage substantially in order to finance a large acquisition or a shareholder payout, or if its performance unexpectedly deteriorates. S&P expects the company's leverage to oscillate throughout the real estate cycle, perhaps rising somewhat above 3x at the cycle's trough. However, if the company's leverage rose materially above 3x without a credible plan to reduce it, S&P could lower the rating. CENVEO INC: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Stamford, Conn.-based printing company Cenveo Inc. The outlook is stable. "At the same time, we assigned the $540 million first-lien notes a 'B' issue-level rating, with a recovery rating of '2', indicating our expectation for substantial recovery (70% to 90%) in the event of a payment default. We also assigned the $250 million second- lien notes a 'CCC' issue-level rating, with a recovery rating of '6', indicating our expectation for negligible recovery (0% to 10%) in the event of a payment default," S&P said. When the transaction closes, S&P will withdraw the rating on the company's existing term loan B and second-lien notes. The company's proposed capital structure refinancing is essentially a debt-for-debt transaction that provides the company minimal interest expense savings, pushes out maturities, and removes maintenance covenants that previously governed the capital structure. The 'B-' corporate credit rating reflects S&P's view that Cenveo is a highly leveraged company in an industry that is in a secular decline. S&P views Cenveo's business risk profile as "weak." The company has developed a strong presence in the envelopes business (about 50% of revenue), which consists of direct mail, billing statements, and office and merchant products. S&P expects that volume and pricing pressure will continue to be a headwind for the company going forward as email marketing, online billing, and the general trend of digital over paper disrupts the traditional envelope business. The company achieved first-quarter organic revenue growth of just under 1%, partly because of volume strength in the direct mail business. S&P views Cenveo's management and governance as "fair." Given that the company's leverage is in the 7x to 8x range, S&P views the company's financial risk profile as "highly leveraged." CLINE MINING: Bond Default Covered Under Forbearance Agreement -------------------------------------------------------------- Cline Mining Corporation on June 16 disclosed that due to continuing financial constraints and unfavorable market conditions, it has failed to make scheduled principal and interest payments due in respect of its US$65.5 million 10% senior secured bonds and its CDN$12.3 million 10% senior secured convertible bonds which matured on June 15, 2014. The Company has received notice from the holders of the Secured Notes of its agreement to treat the above-referenced payment defaults as part of the existing forbearance agreements which are set to expire on or before June 30, 2014 as the Company continues to assess financing options aimed at maximizing the long-term value of its assets. About Cline Cline -- http://www.clinemining.com-- is a Canadian mining company whose primary asset is its 100% owned New Elk coking coal mine located in Trinidad, Colorado. The Company also has interests in an iron ore project in Madagascar, and the Cline Lake gold property in northern Ontario, Canada. Cline's head office is in Toronto and it has a site office at the New Elk mine in Colorado. COMARCO INC: Incurs $1.3 Million Net Loss in 1st Quarter -------------------------------------------------------- Comarco, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.31 million on $0 of revenue for the three months ended April 30, 2014, as compared with a net loss of $1.47 million on $1.41 million of revenue for the same period last year. The Company's balance sheet at April 30, 2014, showed $971,000 in total assets, $10 million in total liabilities and a $9.03 million total stockholders' deficit. Cash and cash equivalents at April 30, 2014, decreased $0.4 million to $0.7 million as compared to $0.4 million at April 30, 2013. A full-text copy of the Form 10-Q is available for free at: http://is.gd/8pQuUU About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco reported a net loss of $2.05 million on $4.42 million of revenue for the year ended Jan. 31, 2014, as compared with a net loss of $5.59 million on $6.33 million of revenue for the year ended Jan. 31, 2013. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Jan. 31, 2014. The independent auditors noted that the Company has suffered recurring losses and negative cash flow from operations, has negative working capital and faces uncertainties surrounding the Company's ability to raise additional funds. CONFIE SEGUROS: Moody's Keeps B3 CFR Over Incremental Term Loan --------------------------------------------------------------- Moody's Investors Service is maintaining the ratings of Confie Seguros Holding II Co. (Confie Seguros - corporate family rating B3) following the proposed $110 million borrowings under the accordion feature of its senior secured term loans. Confie Seguros plans to use the net proceeds to help fund the acquisition of a California-based managing general agent specializing in non- standard auto insurance. The planned acquisition does not affect Confie Seguros' corporate family rating or its debt ratings, which include a B2 rating on its first-lien revolver and term loan and a Caa2 rating on its second-lien term loan. The rating outlook for Confie Seguros is stable. Ratings Rationale Confie Seguros' ratings reflect its position as a leading broker of nonstandard auto insurance to the US Hispanic community, along with its steady growth in revenues and healthy EBITDA margins. Confie Seguros currently has 539 stores located primarily in the West, along with some in the South, Midwest and Northeast, allowing the broker to negotiate favorable contracts with various insurance carriers on behalf of its customers. These strengths are tempered by the company's high financial leverage and modest interest coverage since its leveraged buyout in November 2012. Additionally, Moody's expects that Confie Seguros will continue to pursue a combination of organic growth and acquisitions, the latter giving rise to integration and contingent risks. "The recently announced MGA acquisition enables Confie Seguros to capture additional fee-based revenue and adds geographic distribution since the acquired company's operations are primarily in Texas, Florida and California," said Enrico Leo, Moody's lead analyst for the broker. Offsetting these benefits are the company's continued concentration in a single product line and substantial financial leverage. Confie Seguros will fund the MGA purchase through incremental borrowings under the accordion feature of its existing credit facilities, adding $65 million to the first-lien term loan and $45 million to the second-lien term loan. Giving effect to these borrowings, the company's pro forma financing arrangement includes a $75 million first-lien revolving credit facility maturing in November 2017 (rated B2, $4 million drawn at March 31, 2014), a $393 million first-lien term loan due in November 2018 (rated B2) and a $191 million second-lien term loan due in May 2019 (rated Caa2). The credit facilities are guaranteed by Confie Seguros' parent company and by substantially all of its subsidiaries. The facilities are also secured by most assets of Confie Seguros and the guarantors, including the capital stock of domestic subsidiaries and 65% of the capital stock of foreign subsidiaries. Based on Moody's estimates, Confie Seguros' debt-to-EBITDA ratio will be approximately 7x immediately following the acquisition. Such leverage is aggressive for the firm's rating category, but Moody's expects it to decline over the next 12-18 months. Factors that could lead to an upgrade of Confie Seguros' ratings include: (i) debt-to-EBITDA ratio below 5.5x, (ii) (EBITDA - capex) coverage of interest exceeding 2x, and (iii) free-cash- flow-to-debt ratio consistently exceeding 5%. Factors that could lead to a downgrade include: (i) debt-to-EBITDA ratio above 8x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Giving effect to the incremental term loans, Confie Seguros' ratings (and revised LGD assessments) include: Corporate family rating B3; Probability of default rating B3-PD; $75 million first-lien revolving credit facility rated B2 (to LGD3, 33% from LGD3, 34%); $393 million first-lien term loan rated B2 (to LGD3, 33% from LGD3, 34%); $191 million second-lien term loan rated Caa2 (LGD5, 86%). The principal methodology used in this rating was Moody's Global Rating Methodology for Insurance Brokers & Service Companies published in February 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Huntington Beach, California, Confie Seguros is a leading US personal lines insurance broker primarily serving the Hispanic population. The company generated total revenue of $222 million in 2013. COPYTELE INC: Incurs $3.2 Million Net Loss in Second Quarter ------------------------------------------------------------ CopyTele, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.24 million on $1.10 million of revenue from patent assertion activities for the three months ended April 30, 2014, as compared with a net loss of $2.47 million on $0 of revenue from patent assertion activities for the same period last year. For the six months ended April 30, 2014, the Company reported a net loss of $6.86 million on $1.10 million of revenue from patent assetion activities as compared with a net loss of $4.57 million on $0 of revenue from patent assertion activities for the same period in 2013. The Company's balance sheet at April 30, 2014, showed $10.50 million in total assets, $15.34 million in total liabilities and a $4.84 million total shareholders' deficiency. A full-text copy of the Form 10-Q is available for free at: http://is.gd/YXylu2 About CopyTele Melville, N.Y.-based CopyTele, Inc.'s principal operations include the development, production and marketing of thin flat display technologies, including low-voltage phosphor color displays and low-power passive E-Paper(R) displays, and the development, production and marketing of multi-functional encryption products that provide information security for domestic and international users over several communications media. CopyTele incurred a net loss of $10.08 million for the year ended Oct. 31, 2013, as compared with a net loss of $4.25 million during the prior year. CORE ENTERTAINMENT: S&P Retains 'B' CCR on CreditWatch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on CORE Entertainment Inc., including its 'B' corporate credit rating, remain on CreditWatch, where S&P placed them with negative implications on March 31, 2014. "We based the CreditWatch placement on Core Entertainment's weak operating performance through the first quarter of 2014 and continued rating declines for the most recent seasons of both "American Idol" and "So You Think You Can Dance," Said Standard & Poor's credit analyst Chris Valentine. Since S&P initially placed the ratings on CreditWatch, first- quarter cash balances were higher than its expected because of the disposition of the Presley and Ali businesses for approximately $120 million. According to unconfirmed media reports, Apollo Global Management, the private equity owners of CORE, may be in preliminary talks with 21st Century Fox on a TV production joint venture that would include CORE. To resolve the CreditWatch placement, S&P would need to have greater clarity about the use of the Presley and Ali sale proceeds, as well as how the parties might structure a potential joint venture. "Our liquidity assessment is "adequate." We expect CORE's liquidity sources will include roughly $101.8 million of cash and borrowing availability under its $35 million revolving credit facility due 2016. We expect discretionary cash flow to be less than $10 million in 2014. There are no near-term debt maturities, but bullet maturities in 2017 and 2018 pose refinancing risks given recent operating trends and despite currently elevated cash levels," S&P said. "Our negative CreditWatch listing reflects our expectation that performance of the company's programming portfolio will continue to decline over the next few seasons. We expect to resolve our CreditWatch placement within the next 90 days after receiving additional clarity from management regarding financial policy and progress toward reaching a joint venture with Fox. Despite a recent cash infusion we expect the business will likely remain under pressure over the next 12 to 18 months. We would likely consider a downgrade if the company is unable to come to agree on a joint venture with Fox or does not use proceeds from the sale of the Ali and Presley businesses to pay down debt absent a meaningful reversal in performance of "American Idol." Affirming the ratings and removing them from CreditWatch would require CORE to use proceeds from the recent sale to reduce debt leverage or to diversify its portfolio (potentially through successful program development or a joint venture with FOX), while maintaining adequate liquidity," S&P added. CORINTHIAN COLLEGES: Warns of Possible Shutdown ----------------------------------------------- Stephanie Gleason and Josh Mitchell, writing for The Wall Street Journal, reported that Corinthian Colleges, Inc., one of the country's largest for-profit education companies, warned that it may have to shut down after the Obama administration moved to restrict the company's access to federal funding. According to the report, Corinthian, which operates Everest College and other schools, has about 72,000 students who receive roughly $1.4 billion in federal financial aid each year. But the company and its for-profit rivals, which enroll about 13% of the nation's higher-education students, are drawing greater scrutiny from regulators over concerns about their marketing, dropout rates and loan defaults among their students, the report related. CRYOPORT INC: Ramkumar Mandalam Appointed as Director ----------------------------------------------------- Cryoport, Inc., appointed Ramkumar Mandalam, Ph.D., to its Board of Directors. Additionally, he has been appointed to serve as a member of the Compensation and Nominating and Governance Committees. Following Dr. Mandalam's appointment, Cryoport's Board of Directors will have a total of five members, including four independent members. The Company said Dr. Mandalam is not a party to and does not currently participate in any material Company plan, contract or arrangement. As non-employee director, he will participate in the Company's director compensation plan governed by the Compensation Committee and will receive an initial grant to purchase 100,000 shares of the Company's common stock upon joining the Board. In addition, Dr. Mandalam will receive cash compensation as a non- employee director in the amount of $40,000 annually. "The need for an effective and efficient cryogenic transportation is critical to preserve the potency and viability of sensitive biological cellular materials that are being developed in the growing fields of Regenerative Medicine and Immunotherapy," stated Dr. Mandalam. He continued, "Cryoport provides unique shipping solutions in a comprehensive, easy-to-use, economic, and reliable manner while addressing the time and temperature sensitivities of these materials. I am excited to join Cryoport's Board and look forward to contributing to its continued growth. I am eager to work with the Company's experienced management team and other board members as we look to further expand the market for cryogenic logistics for biologic materials." Jerrell Shelton, chief executive officer of Cryoport, stated, "We welcome Dr. Mandalam to our Board. He brings invaluable industry expertise within the life sciences. His extensive insights will allow us to better navigate our markets from our clients' perspectives. We will benefit tremendously from his expertise as the already large and growing cryogenic logistics market becomes further enhanced by rapidly developing autologous and allogeneic therapies." "I am delighted to welcome Dr. Mandalam to our Board," commented Richard Rathmann, Chairman of the Board of Cryoport. "Dr. Mandalam complements the Board with his experience and success in leading the development of complex biological products. He will be a great asset to Cryoport as we strengthen our position as the premier global logistics provider in the cold chain." Dr. Mandalam joins Cryoport's Board with twenty years of experience in the development of biologics. He is currently the president and chief executive officer of Cellerant Therapeutics, Inc., a clinical stage biotechnology company developing cellular and antibody therapies for the treatment of hematological malignancies and blood related disorders. Previously, Dr. Mandalam served as executive director of Product Development at Geron Corporation, where he managed the development and manufacturing of cell based therapies for treatment of degenerative diseases and cancer. Dr. Mandalam has also held positions of increasing responsibility at Aastrom Biosciences, most recently as Director of Developmental Research. Dr. Mandalam received his Ph.D. in Chemical Engineering from the University of Michigan. He is the author or co-author of several publications, patent applications, and abstracts. $432,000 Private Placement On June 10, 2014 and June 13, 2014, Cryoport entered into definitive agreements for a private placement of its securities to certain institutional and accredited investors for aggregate gross proceeds of $432,160 (approximately $360,979 after estimated cash offering expenses) pursuant to certain Subscription Agreements and Elections to Convert between the Registrant and the Investors. The Company intends to use the net proceeds for working capital purposes. Pursuant to the Subscription Agreements, the Company issued shares of a newly established Class A Convertible Preferred Stock and warrants to purchase common stock. The shares and warrants were issued as a unit consisting of (i) one share of Class A Convertible Preferred Stock of the Companyt and (ii) one warrant to purchase eight shares of Common Stock at an exercise price of $0.50 per share, which will be immediately exercisable and may be exercised at any time on or before March 31, 2019. A total of 36,013 Units were issued in exchange for gross proceeds of $432,160, or $12.00 per Unit. Emergent Financial Group, Inc., served as the Company's placement agent in this transaction and received, a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds received from those Investors, in addition to the reimbursement of legal expenses of up to $40,000. Emergent Financial Group, Inc. will also be issued a warrant to purchase three shares of Common Stock at an exercise price of $0.50 per share for each Unit issued in this transaction. The Company and Emergent Financial Group, Inc. have agreed that the offering of Units to new Investors will be extended through July 14, 2014. About Cryoport Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides comprehensive solutions for frozen cold chain logistics, primarily in the life science industries. Its solutions afford new and reliable alternatives to currently existing products and services utilized for bio-pharmaceuticals and biologics, including in-vitro fertilization, cell lines, vaccines, tissue and other commodities requiring a reliable frozen solution. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2013. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has cash and cash equivalents of $563,104 at March 31, 2013, management has estimated that cash on hand, which include proceeds from convertible bridge notes received in the fourth quarter of fiscal 2013, will only be sufficient to allow the Company to continue its operations into the second quarter of fiscal 2014. These matters raise substantial doubt about the Company's ability to continue as a going concern. For the year ended March 31, 2014, Cryoport reported a net loss of $19.56 million on $2.65 million of net revenues as compared with a net loss of $6.38 million on $1.10 million of net revenues for the year ended March 31, 2014. The Company's balance sheet at March 31, 2014, showed $1.70 million in total assets, $4.01 million in total liabilities and a $2.30 million total stockholders' deficit. DETROIT, MI: Rolls Out Hybrid Pension Plan ------------------------------------------ Mary Williams Walsh, writing for The New York Times' DealBook, reported that the city of Detroit has introduced a new plan with the cooperation of its unions, which have been among the most vocal opponents of cutbacks. The new plan is called a hybrid, which means the workers will keep some of their current plan's most valuable features but will give up others, the report said. According to the report, while both retired and active workers now participate in the same city pension system, the new plan is intended only for Detroit's active workers, who will shift to it on July 1. Retirees will keep 73 percent to 100 percent of their current base pensions under the city's proposal to exit bankruptcy, the report related. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. DETROIT, MI: Agency Plans Bond Sale to Fix Street Lights -------------------------------------------------------- Chris Christoff and Brian Chappatta, writing for Bloomberg News, reported that an agency created to illuminate bankrupt Detroit plans to borrow $185 million to improve street lighting, according to a Standard & Poor's analyst. The Bloomberg report said Michigan Finance Authority will offer bonds, secured by a utility users tax, on behalf of Detroit's Public Lighting Authority on June 25. The lighting authority was created in February 2013 to replace a city department, and was authorized to issue debt to repair a system that left swaths of the city in darkness, with an estimated 40 percent of its 88,000 lights broken, the report said. In other news, Law360 reported that Detroit has reached a settlement with a group of unsecured bondholders over the treatment of limited-tax general obligation bonds and has inked a separate pact with its largest municipal union, marking more positive news for the city as it strives to end its $18 billion bankruptcy. According to the report, citing a statement released by federal mediators, the details of the city's deal with the bondholders are "in the final documentation process." The settlement was reached after six months of negotiations between Detroit and companies that either hold or insure a large majority of the city's limited-tax general obligation bonds, mediators said, the Law360 report cited. Bill Rochelle, the bankruptcy columnist for Bloomberg News, also reported that a dozen philanthropies -- including the Ford Foundation and the Charles Stewart Mott Foundation -- agreed to make voluntary contributions to supplement city workers' pensions, in return for an agreement that Detroit's debt-adjustment plan would transfer the Detroit Institute of Arts to a trust that can't be touched by creditors. The foundations asked the bankruptcy judge to void bon insurer Syncora Guarantee Inc.'s demand for the turn over of documents and appearance for examination under oath. The Detroit City Council, on June 16, voted for the second time this month to endorse the transfer of art and other assets at the city-owned Detroit Institute of Arts to a charitable trust as part of a proposal to protect the art from being sold off in the city's bankruptcy case, Joe Guillen, writing for Detroit Free Press, reported. The deal to spare Detroit's art collection as it attempts to pay off $18 billion in debt and climb out of bankruptcy gained approval from Michigan's attorney general, Law360 reported. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. DONALD W. WYATT DETENTION FACILITY: Temporary Receiver Appointed ---------------------------------------------------------------- W. Zachary Malinowski at the Providence Journal reports that a temporary receiver was appointed on Friday to straighten out the finances at the insolvent Donald W. Wyatt Detention Facility in Central Falls, Rhode Island, a holding jail for federal detainees that has lost millions of dollars in recent years. According to the report, Superior Court Judge Michael A. Silverstein appointed Jonathan N. Savage, a Providence lawyer, as the receiver for the next 20 days. After that, Mr. Silverstein, if necessary, will appoint a long-term receiver. He urged the holders of bonds sold to finance the jail to offer recommendations on whether Mr. Savage or someone else should be the receiver, the report says. The Providence Journal relates that Mr. Savage served as the first receiver in Central Falls in the spring of 2010, about a year before the city became the first in Rhode Island history to file for federal bankruptcy. Lawyer R. Kelly Sheridan, newly appointed chairman of the quasi- public Central Falls Detention Facility Corporation, sought the receivership, the report says. "After a detailed review of the finances and operations, the board of the Central Falls Detention Facility Corporation determined that receivership is a viable way to move forward and address the Wyatt Detention Facility's unsustainable debt," the report quotes Mr. Sheridan as saying. "A receiver will have the powers needed to negotiate with bondholders, address the facility's debt crisis, and develop a plan to return Wyatt to fiscal sustainability so that it can hopefully benefit the residents of Central Falls once again." Central Falls Mayor James A. Diossa and Matthew Jerzyk, the city solicitor, endorsed Sheridan's receivership move, the report notes. The Wyatt jail opened in 1993 as a publicly owned and privately operated facility for men and women awaiting trial on federal charges. EASTERN HILLS: Gets Conditional Court Approval for Plan Outline --------------------------------------------------------------- The Hon. Stacey Jernigan entered, on May 22, 2014, an order conditionally approving the First Amended Disclosure Statement describing the First Amended Plan of Reorganization of Eastern Hills Country Club. The Bankruptcy Court will convene a hearing in Dallas on June 30 at 1:30 p.m. for the final approval of the Disclosure Statement. Eligible creditors have until June 25, at 5:00 p.m. Central Daylight Time to cast their votes on the Plan. Votes must be delivered by the Voting Deadline to Robert Yaquinto, Jr., Chapter 11 Trustee, by mail at Robert Yaquinto, Jr., 509 N. Montclar, Dallas, TX 75208; by email at rob@syllp.com; or facsimile at 214- 946-7601. Among other things, the First Amended Disclosure Statement reveals more information on the sale of the Debtor's principal asset as approved by the Bankruptcy Court; the Debtor's current and historial financial conditions; and a distribution analysis of the sale proceeds. A copy of the First Amended Disclosure Statement, dated May 21, 2014, is available for free at: http://bankrupt.com/misc/EASTERNHILLS_1stAmdDS.PDF As reported by The Troubled Company Reporter on May 9, 2014, Eastern Hills' proposed Plan contemplates full payment to creditors from the proceeds of the sale of the Debtor's golf course. Chapter 11 Trustee Robert Yaquinto, Jr., on April 15 won approval from the Court to sell the principal asset of the Debtor for a gross price of $4,050,000. The Debtor expects closing of the sale before the confirmation hearing. The Court has also extended the deadline for confirming the Debtor's Plan throught July 2, 2014. About Eastern Hills Eastern Hills Country Club filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-33123) in Dallas on June 21, 2013. The Debtor estimated at least $10 million in assets and less than $1 million in liabilities. The petition was signed by David Harvey as president. Richard W. Ward, Esq., serves as the Debtor's counsel. According to Web site, http://www.easternhillscc.com,the Eastern Hills Country Club in Garland Texas, was established in 1954 and boasts a Ralph Plummer designed 18-hole golf course, 5,000 sq. foot putting green, practice facility, and driving range. The golf course has been home of the Texas Womens Open since 2011. Judge Stacey G. Jernigan presides over the bankruptcy case. Robert Yaquinto, Jr., has been named the Chapter 11 trustee of Eastern Hills Country Club. He is represented by his firm, Sherman & Yaquinto, LLP. On April 15, 2014, the Court granted the trustee approval to sell the principal asset of the Debtor. ENERGY FUTURE: Defaulted Bonds Soar on Bankruptcy Conflict ---------------------------------------------------------- Richard Bravo and Steven Church, writing for Bloomberg News, reported that Energy Future Holdings Corp.'s unsecured bonds are soaring to the highest level in a year as junior creditors challenge the power producer's plan to restructure about $40 billion of debt in bankruptcy. According to data compiled by Bloomberg, bonds of the company that don't have senior claims on assets returned 37.4 percent since April 29, when it filed for Chapter 11 protection, beating the 1.7 percent gain for all high- yield, high-risk securities. Meanwhile, Computershare Trust Co. NA, as indenture trustee for holders of $2.16 billion in EFIH second-lien bonds, launched an adversary proceeding against the power company over so-called makewhole payments. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, Computershare asked the bankruptcy judge to rule that the language in the loan documents doesn't excuse payment of the premium as the result of bankruptcy. The premium is designed to compensate lenders for being forced on early repayment to reinvest at a lower interest rate, Mr. Rochelle said. Law360 said Computershare alleges that the power company's plan to refinance nearly $2.2 billion in notes entitles them hundreds of millions of dollars in make-whole payments. Mr. Rochelle, in a separate report, said the bankruptcy judge allowed Energy Future to complete a settlement with holders of first-lien notes of its Energy Future Intermediate Holding unit. Under the settlement, EFIH, the owner of the company's regulated power distribution business, could pay off first-lien debt with 5 percent extra for holders who gave up claims for a so-called make- whole premium, the report said. The settlement is financed with a $5.4 billion loan also approved by the bankruptcy court. CSC Trust Co. of Delaware, as indenture trustee for holders of 10 percent first-lien notes, asked the court to block completion of the settlement pending appeal, but the request was denied, letting the settlement and the accompanying loan go forward, the Bloomberg report related. The motion for a stay is CSC Trust Co. of Delaware v. Energy Future Holdings Corp. (In re Energy Future Holdings Corp.), 14-cv- 00723, U.S. District Court, District of Delaware (Wilmington). 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. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. EPAZZ INC: Asher Enterprises No Longer a Shareholder ---------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Asher Enterprises, Inc., disclosed that as of April 3, 2014, it ceased to be the beneficial owner of any shares of common stock of Epazz, Inc. The reporting person previously held 346,489,034 shares at Dec. 31, 2013. A full-text copy of the regulatory filing is available at http://is.gd/1FaK9Z About EPAZZ Inc. Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of Illinois on March 23, 2000, to create software to help college students organize their college information and resources. The idea behind the Company was that if the information and resources provided by colleges and universities was better organized and targeted toward each individual, the students would encounter a personal experience with the college or university that could lead to a lifetime relationship with the institution. This concept is already used by business software designed to retain relationships with clients, employees, vendors and partners. Epazz incurred a net loss of $1.90 million on $1.19 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $336,862 on $735,972 of revenue for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $1.19 million in total assets, $2.03 million in total liabilities and a $842,019 total stockholders' deficit. M&K CPAS, PLLC, in Houston, Texas, 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 an accumulated deficit of $(4,114,756) and a working capital deficit of $(681,561), which raises substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "We cannot be certain that any such financing will be available on acceptable terms, or at all, and our failure to raise capital when needed could limit our ability to continue and expand our business. We intend to overcome the circumstances that impact our ability to remain a going concern through a combination of the commencement of additional revenues, of which there can be no assurance, with interim cash flow deficiencies being addressed through additional equity and debt financing. Our ability to obtain additional funding for the remainder of the 2012 year and thereafter will determine our ability to continue as a going concern. There can be no assurances that these plans for additional financing will be successful. Failure to secure additional financing in a timely manner to repay our obligations and supply us sufficient funds to continue our business operations and on favorable terms if and when needed in the future could have a material adverse effect on our financial performance, results of operations and stock price and require us to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of our common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that we relinquish valuable rights. In the event that we are unable to repay our current and long-term obligations as they come due, we could be forced to curtail or abandon our business operations, and/or file for bankruptcy protection; the result of which would likely be that our securities would decline in value and/or become worthless," according to the Company's annual report for the period ended Dec. 31, 2012. ESP RESOURCES: Receives Default Notice from Hillair Capital ----------------------------------------------------------- ESP Resources, Inc., received an Event of Default Redemption Notice from Hillair Capital Investments L.P. regarding a 16 percent Senior Secured Convertible Debenture issued by the Company on Nov. 14, 2012. The Debenture at issue is for a principal amount of $750,000 convertible at $0.085 per share. The interest rate is 16 percent per annum payable quarterly beginning on March 1, 2013. The Debenture matured on March 1, 2014. The Notice received by the Company was the triggering event which accelerated the amount of principal and interest owed to Hillair on the Debenture. Pursuant to the terms of the Debenture, the event of default provision requires that the Company immediately pay Hillair the principal, mandatory default amount as defined in the Debenture, accrued but unpaid interest, liquidated damages and other amounts due and payable in cash. The Company must pay $975,000 (principal and mandatory default amount) plus all accrued but unpaid interest to Hillair. The Company said it is negotiating with Hillair to reach an amicable resolution of this matter. Other Events The Company recently acquired one new significant client and increased the services provided to another new prominent client. For the previous six months, the Company has averaged $28,000 per month in sales to a prominent client's field location in Louisiana, the smallest of the client's field locations. Last week, the Company's service for the client increased with chemical supply accounts for the client's two largest field locations: one in Texas and one in southeast Louisiana. The Texas field will be undergoing a Re-frac program beginning this month and lasting for one year. The client estimates the need for approximately $15,000 of the Company's Frac biocides per month during the Re-frac program and that the increased oil production from the Re-frac program will result in an increased need for production chemicals generating purchases from ESP of approximately $11,000 per month. The Company's other new client is one of the top ten largest oil and gas companies operating in the Eagleford formation in southwest Texas with over 1,000 wells drilled to date with current production exceeding 50 MBOE per day. ESP was awarded a three well test in April. After saving the client $2,000 per well on monthly charges during the test, the Company was awarded the chemical program for an additional 50 wells along with associated central gathering facilities. The chemical supply for this client will begin in July. The client estimates approximately $50,000 per month in chemical purchases from ESP for this account. About ESP Resources The Woodlands, Texas-based ESP Resources, Inc., through its subsidiaries, manufactures, blends, distributes and markets specialty chemicals and analytical services to the oil and gas industry and also provides services for the upstream, midstream and downstream sectors of the energy industry, including new construction, major modifications to operational support for onshore and offshore production, gathering, refining facilities and pipelines designed to optimize performance and increase operators' return on investment. ESP Resources reported a net loss of $5.23 million on $10.59 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $5.08 million on $16.98 million of net sales in 2012. The Company's balance sheet at March 31, 2014, showed $6.33 million in total assets, $11.17 million in total liabilities and a $4.83 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred net losses through Dec. 31, 2013, and has a working capital deficit as of Dec. 31, 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern. FERRELLGAS LP: Moody's Corrects Oct. 21, 2013 Release ----------------------------------------------------- Moody's Investors Service corrected the headline and text of a October 21, 2013 release for Ferrellgas L.P. In the headline and the Debt List, the issuer name has been changed to Ferrellgas, L.P. from Ferrellgas Partners, L.P. In the first paragraph, the first sentence has been revised to read as follows: "Moody's Investors Service assigned a B2 rating to Ferrellgas, L.P.'s (OLP) proposed $325 million senior unsecured notes due 2022." The following has also been added as the second sentence: "OLP is the operating partnership subsidiary of Ferrellgas Partners, L.P. (Ferrellgas, B1 stable) and the issuer of the majority of Ferrellgas' debt, including its bank credit facilities." In the RATINGS RATIONALE section, in the first sentence of the first paragraph, the maturity year 2022 has been changed to 2021. Also, the first sentence of the fifth paragraph has been changed to read as follows: "The principal methodology used in this rating was the Global Midstream Energy Industry Methodology published in December 2010". GENERAL MOTORS: Says Bankruptcy Stay Offers Certain Protections --------------------------------------------------------------- Ashby Jones, writing for The Wall Street Journal, reported that General Motors Co. is turning to Chapter 11 to try to solve its potential liability stemming from the ignition-switch problems that emerged publicly in February. According to the report, in recent weeks, the company's lawyers have argued that the 2009 bankruptcy filing, in which the debt- laden "Old GM" sold its best assets to a new, government-backed company and left the rest behind, shields it from certain liabilities stemming from its ignition-switch problems. The Journal, citing David Skeel, a bankruptcy expert and law professor at the University of Pennsylvania, said GM's argument -- that it is unfair to make the company pay for liabilities it expressly gave up five years ago -- holds appeal. But Mr. Skeel and others say that, in rare situations, it makes sense to allow creditors to "re-open" a bankruptcy reorganization to press old claims, the Journal added. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- 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. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. 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 was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: Ignored Early Warning on Cars Stalling ------------------------------------------------------ Jeff Bennett and Siobhan Hughes, writing for The Wall Street Journal, reported that a General Motors Co. employee warned in 2005 that the auto maker had a "serious safety problem" with the design of ignition switches used on the 2006 Impala that could lead to a "big recall," but the company didn't recall the vehicles until early this week. According to the report, the new evidence that GM employees ignored warnings about defects in the years leading up to the company's 2009 bankruptcy came as lawmakers on the House panel questioned GM Chief Executive Mary Barra and former U.S. prosecutor Anton Valukas on whether the car maker deliberately covered up knowledge of safety defects to avoid regulatory scrutiny and deflect lawsuits. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- 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. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. 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 was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: Hagens Berman Files Ignition Switch Class Action ---------------------------------------------------------------- National consumer-rights law firm Hagens Berman Sobol Shapiro on June 18 filed a potentially precedent-setting class-action lawsuit against General Motors, claiming that the automaker's troubled history -- including more than 20 million recalled vehicles worldwide -- has so impacted the GM brand that all GM car owners, not just those subject to the ignition switch recall, have suffered economic damage through loss of resale value, and deserve compensation. The class action is the first suit of the lawsuits filed against GM to seek compensation based on the automaker's damaged brand perception. If certified, the class would represent as many as 15 million GM car owners and put GM's exposure at more than $10 billion, according to attorneys. "GM came out of bankruptcy making claims that the company would produce high-quality, safe vehicles, a branding position that served GM well, and that consumers relied upon," said Steve Berman, managing partner of Hagens Berman. "Now we know that contrary to those claims, GM was instead wallowing in a dysfunctional culture more concerned about hiding defects and safety flaws than living up to its purported brand promise." GM's brand has been rocked by 40 recalls covering more than 20 million vehicles worldwide during the first six months of 2014, as noted in the complaint. The complaint cites economic studies that show select, non- recalled GM vehicles have dropped in resale value. "We gained a lot of experience examining the impact of recalls on the value of Toyota vehicles in the Toyota case, in which we were able to analyze the financial impact of Toyota's large recall," Berman said. "We used that experience to forensically examine the impact of GM's recent actions on GM-branded vehicles, and the decreased value we have measured ranges from $500 to more than $2600 per vehicle and may go higher on some vehicles." The suit claims that GM's intentional actions have economically harmed millions of owners of all GM brands through diminished resale value, among other damages. If certified as a class, exposure to the litigation could top $10 billion. "Had a purchaser of a 2010 Camaro known that the manufacturer had gone to such great lengths to hide safety defects on other GM cars, there is no way that purchaser would have paid full price," Berman added. "The economic reality is that all GM owners are bearing the costs of GM's actions." The 71-page complaint, filed on June 18, 2014 in the U.S. District Court for the Central District of California, covers vehicles sold after GM's bankruptcy proceedings and accuses the automaker of misrepresentation, concealment and non-disclosure of "piecemeal" safety defects, and in turn, responsibility for the decrease of value in model year GM vehicles sold between July 10, 2009 and April 1, 2014. The complaint seeks damages for a class of consumers including anyone who owns or has owned or leased a new or used GM-branded vehicle sold between July 10, 2009 and April 1, 2014, or sold a vehicle during this time period at a diminished price on or after April 1, 2014, excluding those whose vehicles were recalled for an ignition switch defect. Damages are sought on the grounds that GM concealed facts about its safety defects to consumers and did so to falsely assure purchasers and lessors of GM's commitment to its brand promises, therefore leading many to purchase or lease vehicles without knowledge of the defects, according to the suit. "GM's egregious and widely publicized conduct, including the seemingly never-ending and piecemeal nature of GM's recalls, has so tarnished the affected vehicles that no reasonable consumer would purchase them for what would otherwise be fair market value for the vehicles," the complaint states. Concerned consumers who have owned or leased any of the GM models sold during the affected period are encouraged to contact a Hagens Berman attorney by emailing GeneralMotors@HBSSlaw.com or calling 206-623-7292. Additional information about the investigation is available at http://is.gd/1ObxvG About Hagens Berman Hagens Berman Sobol Shapiro LLP -- http://www.hbsslaw.com-- is a consumer-rights law firm with offices in nine cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- 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. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. 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 was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: AAJ Reports on Ignition Switch Cover-Up Exposure ---------------------------------------------------------------- A new report, Driven to Safety, released on June 18 by the American Association for Justice details the essential role the civil justice system played in uncovering the GM ignition switch scandal and the ways trial attorneys and their clients have spurred improvements in auto safety for over half a century. "Then and now, the civil justice system has helped to create and enforce safety standards, revealed previously concealed defects, and deterred manufacturers from cutting corners on safety for the sake of greater profits," said American Association for Justice President Burton LeBlanc. As part of GM's bailout, it was immune from legal accountability in product defect and wrongful death cases until July 10, 2009, when it emerged from bankruptcy. That means while American tax dollars were financing GM, injured American motorists were denied the justice they deserved and the public was kept in the dark about the dangers. GM used court secrecy clauses to hide its wrongdoing in order to keep its dangerous cars on the market and continue to profit while American lives were threatened. GM's corporate cover-up and fatal ignition switch was finally exposed because grieving parents, Ken and Beth Melton, wanted answers, and their attorney, Lance Cooper, uncovered the truth through the civil justice system. But this problem is not limited to GM. As a condition of turning over any material to injured consumers and their attorneys, manufacturers of faulty products regularly insist the information be kept secret?even if the product remains on the market and the information could warn the public of a potential health hazard. In conjunction with the release of the report, the American Association for Justice is urging all consumers to tell Congress to strengthen the public safety measures the civil justice system provides by supporting the Sunshine in Litigation Act (S. 2364/H.R. 4361). "Whether it's dangerous cribs, defective drugs or exploding tires, court secrecy endangers consumers and allows corporations to hide wrongdoing," added LeBlanc." Americans have a right to know about hazardous and defective products." The Sunshine in Litigation Act would help prevent unnecessary injuries and death by shedding light on dangerous products. Both State and District court systems have taken steps to limit court secrecy -- the Sunshine in Litigation Act would simply ensure that federal courts also consider public health and safety matters before issuing protective orders, sealing court records, or approving secret settlements. The Sunshine in Litigation Act would: Make the public aware of vital, life-saving information?giving federal judges additional discretion to evaluate settlements that hide important safety information from the public. Help prevent injuries from dangerous products and decrease litigation?restricting secrecy, companies would be unable to hide significant product hazards and would be motivated to correct these hazards earlier instead of waiting until more product related deaths and injuries occurred. Make courts more efficient while protecting the public?court secrecy restrictions adopted in various courts have not burdened judicial systems or impacted the number of cases resolved in these courts. As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) -- http://www.justice.org-- works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others -- even when it means taking on the most powerful corporations. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- 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. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. 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 was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENIUS BRANDS: Launches Secondary Offering of 3.1 Million Shares ---------------------------------------------------------------- Genius Brands International, Inc., launched a public secondary offering of its common stock. Certain stockholders of Genius Brands, including Wolverine Flagship Fund Trading Limited, Iroquois Master Fund Ltd. and Southshore Capital Partners, LP, are offering for sale to the public 3,125,000 shares of Genius Brands for a proposed maximum aggregate offering price of $12.4 million. There are no underwriting arrangements to sell the shares of Common Stock that are being registered. The Company will not receive any proceeds from the sale of these shares by the selling stockholders. All expenses of registration incurred in connection with this offering are being borne by the Company, but all selling and other expenses incurred by the selling stockholders will be borne by the selling stockholders. The Company's Common Stock is currently approved for quotation on the OTC Bulletin Board maintained by the Financial Industry Regulatory Authority, Inc. (FINRA) under the symbol "GNUS". On June 13, 2014, the last reported sale price of the Company's Common Stock as reported on the OTC Bulletin Board was $4.04 per share. A full-text copy of the Form S-1 prospectus is available for free at http://is.gd/KdtG8U About Genius Brands San Diego, Calif.-based Genius Brands International, Inc., creates and distributes music-based products which it believes are entertaining, educational and beneficial to the well-being of infants and young children under its brands, including Baby Genius and Little Genius. Genius Brands reported a net loss of $7.21 million in 2013, a net loss of $2.06 million in 2012 and a net loss of $1.37 million in 2011. The Company's balance sheet at March 31, 2014, showed $14.65 million in total assets, $3.55 million in total liabilities and $11.09 million in total equity. GOOD SHEPHERD: Moody's Lowers Rating on $93.7MM Bonds to 'Ba3' -------------------------------------------------------------- Moody's Investors Service has downgraded to Ba3 from Baa3 the rating assigned to Good Shepherd Medical Center's (GSMC) $93.7 million of outstanding bonds issued by the Gregg County Health Facilities Development Corporation and the Harrison County Health Facilities Development Corporation. The rating remains under review for downgrade. All references to financial and utilization numbers below refer to Good Shepherd Health System (GSHS) unless otherwise noted. Financial covenants in GSMC's bank and bond documents are calculated on an Obligated Group basis. Summary Rating Rationale The rating downgrade reflects the severity of the liquidity risks GSHS faces related to the necessity of forbearance agreements to avoid debt acceleration; a material and rapid decline in financial performance through year-to-date fiscal year (FY) 2014, resulting in significant miss to budget; sizeable patient volume losses and related market share decline; and the expectation that the organization will not return to profitability until FY 2016. The rating remains under review for further downgrade reflecting acceleration risk related to the short tenure of the current forbearance agreements, which expire July 31, 2014. Further rating action will be informed by the length and terms of new forbearance agreements, including any additional liquidity constraints new agreements place on the organization. If GSHS is unable to enter into new agreements with the banks, the organization is at risk of triggering an event of default, cross defaults and possible acceleration of both its variable and fixed rate bonds. Positive factors that mitigate a further downgrade at this time include GSHS's size and comprehensive service array supporting its leading position in the service area, the absence of sizeable off- balance sheet operating leases and pension liabilities, and a new management team with detailed performance improvement initiatives which are expected to result in cost reductions and revenue enhancements as well as long-term strategies to recapture lost volume. Challenges -- The organization has a rating covenant in the Series 2004 Reimbursement Agreement with JP Morgan Chase Bank, N.A. Violation of this covenant, per the original document, leads to an immediate event of default, which leads to cross defaults under other bond documents, potentially causing an acceleration of GSHS's debt. However, on June 16, 2014 GSHS executed an amendment to the Reimbursement Agreement and forbearance agreements with JP Morgan (Series 2004 and 2012B) and Wells Fargo (Series 2012A) on a temporary basis, avoiding the immediate threat of event of default and acceleration. Moody's note, however, that these agreements expire on July 31, 2014, and GSMC will require longer-term forbearance agreements from the banks to avoid an event of default. -- The system's very weak financial performance continues through year-to-date FY 2014 and is significantly behind budgeted expectations. Management does not expect the organization to be profitable until FY 2016. -- GSMC's local competitor in Longview, which is owned by for- profit CHS/Community Health Systems Inc. (rated B1), recently expanded its campus and bought out an independent physician group that previously split patients between GSMC and Longview Regional. Some of these physicians still practice at GSHS; however, nine urologists and orthopedic surgeons left the organization completely. GSHS has attempted to counteract these physician departures by recruiting new doctors through an employment model. -- Due in large part to physician departures, the organization experienced steep patient volume declines in FY 2013 and year-to- date FY 2014. Combined inpatient admissions plus observation stays declined nearly 3%, outpatient surgeries declined 13%, and total surgeries dropped 4.5% in FY 2013. Volume declines through year- to-date FY 2014 were significantly worse than budgeted, and the organization is projecting additional declines in FY 2015 when Longview Regional completes its facility expansion. -- Liquidity remains very weak, particularly with respect to GSHS's significant debt structure risks. Cash-to-debt was 52% as of FYE 2013 and declined to 47% at March 31, 2014. The organization has plans to monetize medical office buildings in order to meet its liquidity covenants. Strengths -- Management has taken steps to recruit new physicians to the organization in the wake of physician departures to the competitor, and GSHS has implemented a major performance improvement plan which is expected to result in a return to profitability in FY 2016. -- Despite volume losses, GSHS is still the largest provider of comprehensive services in the area, supporting strategies to regain market share and physician loyalty. -- A potential real estate asset monetization in Fall 2014 is expected to preserve liquidity, allowing the organization to maintain compliance with its financial covenants. GSHS will likely lease the facilities under a sale-leaseback transaction. -- GSHS has limited operating lease and pension obligations. Outlook The rating remains under review for further downgrade reflecting acceleration risk related to the short tenure of the current forbearance agreements, which expire July 31, 2014. Further rating action will be informed by the length and terms of new forbearance agreements, including any additional liquidity constraints new agreements place on the organization. If Good Shepherd is unable to enter into new agreements with the banks, the organization is at risk of triggering an event of default, cross defaults and possible acceleration of both its variable and fixed rate bonds. What Could Make The Rating Go UP A rating upgrade will not occur in the near term due to the severity of the liquidity risks, length of time expected to improve weak financial performance, potential for further volume declines, and modest investment position. Longer-term factors that could result in an upgrade include eliminating or significantly reducing liquidity risk, demonstrating a multi-year improvement in operating performance, stabilizing patient volumes, and growing unrestricted investments. What Could Make The Rating Go DOWN A rating downgrade will occur if the forbearance agreements and amendment to the Reimbursement Agreement with the banks are not extended beyond the stated expiration date of July 31, 2014. Additional factors that could lead to a downgrade include any contraction in liquidity or restrictions imposed under new forbearance agreements that pose liquidity risk, violation of any other covenants in the bank and bond documents, inability to meet FY 2014 operating performance and balance sheet projections, and additional physician departures that lead to further volume loss. The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. GROUP HEALTH COOPERATIVE: Fitch Raises IDR From 'BB+' ----------------------------------------------------- Fitch Ratings has upgraded Group Health Cooperative's (GHC) and subsidiary Group Health Options, Inc.'s (GHO) (collectively Group Health) Insurer Financial Strength (IFS) ratings to 'BBB' from 'BBB-'. Fitch has also upgraded the ratings on senior secured bonds issued by the Washington Health Care Facilities Authority (WHCFA) on behalf of Group Health, to 'BBB' from 'BBB-'. The Rating Outlooks are Stable. KEY RATING DRIVERS The rating upgrades reflect significant improvements in Group Health's financial performance and capitalization metrics that Fitch believes are tied to process re-design and head-count and expense reductions the company began implementing in the fourth quarter of 2012 (1Q'12). Fitch's view is that while it will be difficult for Group Health to sustain margins and absolute earnings at current levels, especially in light of industry-wide pressures contributing to Fitch's negative health insurance sector outlook, and pressures the company may face as a non-profit company, margins and earnings will remain supportive of the 'BBB' category ratings. Fitch uses a group rating methodology and refers financial strength from GHC to GHO when evaluating the companies' ratings. In its assessment, Fitch considers GHO a 'core' company within the Group Health organization and believes that GHC is willing and able to support GHO financially and operationally. Fitch considers GHO a core company in part because it provides the Group Health organization with a point-of-sale product line that Fitch views important to the organization's market position. Fitch's rating of GHC's revenue bonds are notched up by one from GHC's IDR to reflect an assumption of 'Good' recoveries (as defined per Fitch criteria) in a default scenario, given the bonds' security in the form of a security interest in the company's gross receivables and liens on certain real estate and equipment assets. Thus, the revenue bonds are rated at the same level as GHC's IFS rating, since policyholder recoveries are also assumed to be 'Good' as per customary Fitch practice. Financial Performance: Group Health's financial performance through 1Q'14 was strong, continuing 2013's favorable trends. Based on these results and given Group Health's longer-term performance trends, Fitch views the company's financial performance as supportive of 'BBB' category IFS ratings. Through 1Q'14 the company generated $80 million of EBITDA and an EBITDA- to-revenue margin of 8.5%. In 2013, Group Health generated $223 million of EBITDA and an EBITDA-to-revenue margin of 6.0%. In contrast, from 2009 through 2012 Group Health's EBITDA averaged $59 million and its EBITDA-to-revenue margin averaged 1.8% as the company struggled to control the cost of healthcare provided by providers from outside its vertically integrated healthcare delivery model. Capitalization and Leverage: Group Health's capitalization and leverage metrics improved materially over the last 12-15 months and are supportive of 'A' category ratings. Fitch attributes the improvements to strong earnings and a decline in pension plan liabilities due to market conditions and plan changes. At year- end 2013 the company's NAIC risk-based capital (RBC) ratio was 405% (on a company-action level basis) compared to 208% at year- end 2012. In addition, Group Health's annualized debt-to-EBITDA ratios at March 31, 2014 and Dec. 31, 2014 were 0.4x and 0.6x, respectively. From 2009 through 2012 the company's debt-to-EBITDA ratio averaged 2.7x. Debt-Service Capabilities and Financial Flexibility: Group Health's debt-service capabilities are supportive of 'A' category ratings reflecting relatively modest annual interest and amortization payments of $12 million per year through 2019. The company is a party to an interest rate swap contract that in recent years of declining interest rates has reduced its interest expense. Excluding the impact of the interest rate swap contract, Group Health's operating EBITDA-based interest coverage ratios through March 31, 2014 and in 2013 were very strong at 68.2x and 22.3x, respectively. From 2009 through 2012 this ratio averaged a much weaker 3.5x. Market Position and Size/Scale Characteristics: Fitch continues to believe that Group Health's market position and size/scale characteristics correspond to Fitch's 'Small' categorization. 'Small' market position and size and scale characteristics are typically considered supportive of 'BBB' category IFS ratings. Key considerations in Fitch's assessment of Group Health's market position and size/scale characteristics include diversity of enrollment across commercial and government market products, geographic concentration of enrollment, and market share and size of the company's enrollment and revenue bases. Group Health's enrollment consists primarily of employer group business but includes a meaningful mix of Medicare and individual insurance. The company's enrollment is geographically concentrated in Washington where, based on both enrollment and direct health premiums, it maintains market shares in excess of 10%. The company's market position is bolstered by its vertically integrated healthcare delivery system which includes both employee care providers and care providers provided by an independent medical group that contracts exclusively with Group Health. Fitch's view is that this integrated delivery system and its aligned medical group and ambulatory facilities should allow Group Health to better leverage its position and manage costs in its geographically concentrated market. RATING SENSITIVITIES -- Fitch currently maintains a negative sector rating on the U.S. health insurance and managed care industry reflecting expectations for industry-wide margin pressure largely derived from the Affordable Care Act's implementation. Key considerations in evaluating Group Health's ratings for upgrades over the next 12-24 months center on the company's ability to overcome these pressures and to maintain financial performance and capitalization metric trends that continue to be favorable in comparison to expectations for the company's current ratings. Specifically, factors that could lead to rating upgrades include Group Health generating the following on a sustained basis: -- EBITDA/revenue margins greater than 5%; -- Net income/average capital ratios greater than 5%; -- Debt-to-EBITDA ratios and debt-to-capital ratios that are less than 3.0x and 20%, respectively; -- EBITDA-based interest coverage ratios that exceed 7x; and -- Maintaining key contracts with the state of Washington that contribute significantly to enrollment. Key rating triggers that could lead to a downgrade include run- rate: -- EBITDA/revenue margins that are less than 3%; -- Net income/average capital ratios that are less than 3%; -- NAIC RBC ratios (company action level basis) below 200%; -- Debt-to-EBITDA ratios and debt-to-capital ratios greater than 3.0x and 25%, respectively; and -- Loss of key contracts with the state of Washington that contribute significantly to enrollment. In addition, the revenue bonds ratings could be downgraded if Fitch changed its recovery assumption to a level lower than 'Good', should new information become available that indicated recoveries may be lower than currently assumed. Fitch notes possible future recoveries are difficult to estimate given lack of regulatory precedent on how funds would be disbursed in a liquidation among policyholders and secured creditors. Fitch has upgraded the following ratings: -- $98 million series 2006 revenue bonds issued by the Washington Health Care Facilities Authority on behalf of Group Health Cooperative to 'BBB' from 'BBB-'; -- $35 million series 2001 revenue bonds issued by the Washington Health Care Facilities Authority on behalf of Group Health Cooperative to 'BBB' from 'BBB-'; Group Health Cooperative -- IFS to 'BBB' from 'BBB-'; -- IDR to 'BBB-' from 'BB+'. Group Health Options, Inc. -- IFS to 'BBB' from 'BBB-'. HALEK ENERGY: Law Firms Continue Fight for Gas Scheme Victims ------------------------------------------------------------- Nowak & Stauch, LLP and Deans & Lyons, LLP are continuing the fight that began in 2008 to recover for victims of the Halek Energy oil and gas scheme that defrauded hundreds of investors out of tens of millions of dollars. On February 19, 2014, Halek Energy, LLC, finally emerged from bankruptcy. Notably absent, however, was the company's founder and namesake, Jason Halek. Mr. Halek started the company in 2002 under the name Halek's Truck, LLC, which was later changed to Halek's Enterprises, LLC, and finally Halek Energy, LLC in 2008. Halek had previously operated a "tote the note" used car operation in Dallas, Texas. He later decided to make his fortune in the oil and gas business during the frenzied days of the Barnett Shale play. Halek Energy utilized a series of private placement memoranda to sell investments in Texas oil and gas projects that the Securities and Exchange Commission would later determine to be "false and misleading" in an effort to lure investors into working interest oil and gas projects. In total, Halek, through his affiliated companies Halek Energy and CBO Energy, had raised at least $21,452.137 in ill-gotten investor funds. Halek Energy was eventually targeted by the SEC and by "Operation Broken Trust," a nationwide operation organized by the Financial Fraud Enforcement Task Force and the United States Department of Justice. Unfortunately, by that time, much of the investor money was already gone; some investors had given Halek Energy all of their retirement savings. Mr. Halek and his Company would later enter into a consent judgment with the SEC that prevented him from denying that he committed fraud in any proceeding in which the SEC was a party. The civil action filed by the SEC in the US District Court for the Northern District in Dallas ultimately led to Jason Halek, Halek Energy, and CBO Energy being held jointly and severally liable for disgorgement of $21,452,137, plus pre-judgment interest of $5,048,920.17, in connection with the scheme. Jason Halek was also required to pay a $50,000.00 civil penalty. On August 5, 2013, the United States Court of Appeals for the Fifth Circuit issued an opinion that affirmed the disgorgement order and final judgment against Mr. Halek, thwarting Mr. Halek's last attempt to avoid disgorgement. Not long after the SEC had filed its enforcement proceeding, Halek Energy was defending claims from its investors in both state and federal courts. The law firms of Nowak & Stauch and Deans & Lyons were engaged by a number of investors victimized by the Halek Energy scheme. Several lawsuits were filed in state court and arbitration proceedings were initiated with AAA, all in an effort to bring some relief to investors who had lost millions of dollars as a result of false and misleading tactics employed by Halek Energy. Halek Gets Drilled Halek Energy's scheme was built upon slick brochures full of false, misleading statements, inflated budgets and unrealistic expectations. And it worked really well. It worked so well, in fact, that Halek Energy and other affiliated entities were able to raise more than $21 million between June 2007 and September 2009, making millions even while they drilled multiple dry holes for the investors. Ironically, things began to crumble when Halek Energy actually struck oil in Jack County, and completed the most prolific well in the history of that county. For Halek Energy, hitting this gusher was a chance to turn Halek Energy into a legitimate oil and gas company. But for investors and creditors who had suffered from the investment scheme, including the SEC, these Jack County wells, which were producing more than $1 million per month by the end of 2010, were the much- needed assets that provided some hope of a recovery through litigation. Up to that point, the state court litigation and arbitration efforts against Halek and his affiliated companies had failed to force any change. In late 2010, Nowak & Stauch and Deans & Lyons decided to strike at the heart of the company and its newly-developed wells in Jack County, Texas. Unfortunately, most of Halek Energy's investors were not investors in these Jack County wells. Employing the seldom-used but highly effective theory of constructive trust, the law firms filed suit on behalf of a small subset of clients who had invested in the Jack County wells, claiming that all investor funds had been comingled and used to drill new wells, and that the production from such new wells must be preserved in a constructive trust for the benefit of all investors whose money had made the drilling of the new wells possible. Although the imposition of a constructive trust upon the Jack County operations of Halek Energy would be devastating, the Court granted a Temporary Restraining Order that shut down the Company's operations and suspended any further revenue distributions over the holidays in 2010. In retaliation, Mr. Halek and his lawyers filed suit against the bond posted in support of the injunctive relief, and added claims against attorneys Tom Stauch and Michael Lyons, individually. Following a temporary injunction hearing in February 2011, the Court found there was sufficient evidence to support an injunction against Mr. Halek and Halek Energy for the alleged fraud, and ordered the Company to suspend certain revenues, produce financial records, and submit to a financial audit. In the face of this ruling, Halek Energy filed for Chapter 11 bankruptcy protection, attempting to remain a debtor in possession and avoid certain obligations, including the state court order to turn over the Company's books and records. Once before the U.S. Bankruptcy Court for the Northern District of Texas in Fort Worth, however, the law firms petitioned the Court to appoint a Chapter 11 Trustee to preside over and operate the company and take away control of the company from Jason Halek. Once Halek Energy initiated Bankruptcy proceedings, the SEC entered an appearance as a creditor, which prevented Jason Halek from denying that he or Halek Energy had committed fraud, in accordance with the prior consent judgments. With nowhere to run, and no more legal maneuvers to avoid a trial, Mr. Halek and Halek Energy were forced to deal with the investor victims through the bankruptcy court process. Through a series of negotiated settlements, the group of more than 30 claimants represented by Nowak & Stauch and Deans & Lyons were assigned the ownership interests of Halek Energy. Still Fighting to Maximize the Clients' Recovery Halek Energy was left with several operating wells but a severe cash shortage courtesy of the previous management -- a firm that was contracted by the bankruptcy trustee. Although there was a $21 million disgorgement judgment in the SEC case, none of those millions were available to distribute to those injured by the scheme. To make matters worse, the wells that had been producing at a rate of $1 million per month when the bankruptcy began were nearly all shut in by the time the bankruptcy trustee turned the Company over to the law firms in 2013. Determined to recover for their clients, the firms set out to sell the Company's remaining leasehold interests and wells. When the trustee's efforts failed to produce more than a salvage value offer, Stauch took over the process of selling the Company's assets, and negotiated a sale price more than seven times higher, including retention of overriding royalties on all existing and future wells on the Jack County leases. Even in the face of being sued personally by Halek's lawyers, Stauch and Lyons never backed down, and those claims were later dismissed. "From the beginning, our goal has been, and continues to be, maximizing the recovery for our clients. Through the five-year fight, we've had some ups and downs, but we never wavered in our commitment to pursue justice for these folks. I'm proud of our team and the results we achieved," reflects Tom Stauch. Michael Lyons adds, "Helping investors who have been the victims of securities fraud can sometimes be a daunting task. The bad guys will employ virtually every strategy to avoid liability and to delay recovery. Returning the Company and the only meaningful assets that remained to our clients is a satisfying feeling, but, more importantly, it gives these investors some satisfaction in knowing that the perpetrators involved in this scheme didn't get away with it." "I am so thankful for the efforts of these lawyers," says Gregory Kitchen, "and am glad I decided to retain them to represent me. Without their tireless work over five years, and their most professional handling of all aspects of this complex case, there would have been no recovery at all." Of the more than 300 investors who trusted Halek with their money, only those who trusted the lawyers at Nowak & Stauch and Deans & Lyons were able to recover by sharing in the ownership of the Company after the bankruptcy. Nowak & Stauch, LLP and Deans & Lyons, LLP are Dallas-based law firms with a focus on complex commercial litigation and seeking justice for victims of securities fraud. HAMPTON ROADS: Shareholders Elect 12 Directors ---------------------------------------------- The annual shareholders' meeting of Hampton Roads Bankshares, Inc., was held on June 12, 2014, at which the shareholders: (a) elected James F. Burr, Patrick E. Corbin, Henry P. Custis, Jr., Douglas J. Glenn, Robert B. Goldstein, Hal F. Goltz Stephen J. Gurgovits, Charles M. Johnston, William A. Paulette, John S. Poelker, Billy G. Roughton, and Lewis Witt; (b) ratified the appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending Dec. 31, 2014; (c) approved, on an advisory basis, a proposal endorsing the compensation of the Company's named executive officers as disclosed in the Company's 2014 proxy statement; and (d) recommended, on an advisory basis, to hold an advisory vote on the compensation of the Company's named executive officers on an annual basis. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Hampton Roads reported net income attributable to the Company of $4.07 million in 2013, a net loss attributable to the Company of $25.09 million in 2012 and a net loss attributable to the Company of $97.54 million in 2011. As of Dec. 31, 2013, the Company had $1.95 billion in total assets, $1.76 billion in total liabilities and $183.84 million in total shareholders' equity. HARRIS LAND: Pulaski County Collector May Pursue Tax Sales ---------------------------------------------------------- The Bankruptcy Court on June 12, 2014, granted creditor Pulaski County Collector of Revenue relief from automatic stay with respect to these properties of Harris Land Development, LLC: -- Lot 42 Heritage Estates; -- Lot 43 Heritage Estates; -- Lot 44 Heritage Estates; -- Lot 48 Shady Oaks; -- Lot 36 Heritage Estates; -- Lot 37 Heritage Estates; -- Lot 38 Heritage Estates; -- Lot 39 Heritage Estates; -- Lot 40 Heritage Estates; -- Lot 41 Heritage Estates; and -- 30 acres located in the Liberty Heights subdivision. Terri Mitchell, Pulaski County Collector of Revenue, sought relief from the stay to proceed with real property tax sales in August 2014, or in the alternative, for an order dismissing the Debtor's case or converting the case to a Chapter 7 case. According to the Revenue Collector, the Debtor has not paid real estate taxes for four years on these parcels of real estate located in Pulaski County, Missouri: A. Lot 42 Heritage Estates; B. Lot 43 Heritage Estates; C. Lot 44 Heritage Estates; and D. Lot 48 Shady Oaks. The Debtor has not paid real estate taxes for five years on these parcels of real estate: A. Lot 36, Heritage Estates; B. Lot 37 Heritage Estates; C. Lot 38 Heritage Estates; D. Lot 39 Heritage Estates; E. Lot 40 Heritage Estates; F. Lot 41 Heritage Estates; and G. 30 acres located in the Liberty Heights subdivision. As of April 21, the total real estate taxes and penalties on the real estate listed was $204,935 and all the taxes and penalties had accrued prior to the commencement of this bankruptcy case. The Revenue Collector asked the Court to terminate the automatic stay prior to June 15, so that it may publish notice and sell the named real estate at the August 2014 tax sale. Meanwhile, the Court in a ruling on the motion of Midwest Independent Bank for relief from stay regarding multiple tracts in Shady Oaks Subdivision, said on May 14 that the parties have settled the matter. About Harris Land Development, LLC Harris Land Development, LLC, sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 14-60554) in Springfield, Missouri, on April 28, 2014, without stating a reason. The Debtor disclosed $16,534,000 in assets and $11,107,302 in liabilities as of the Chapter 11 filing. This is Harris Land's second trip to bankruptcy. The first bankruptcy was in September 2010 in In Re Harris Land Development, LLC, Case No. 10-62322 (Bankr. W.D. Mo.) HARRIS LAND: To Hire Broker to Sell Sabal Fin'l Collateral ---------------------------------------------------------- In the Chapter 11 case of Harris Land Development, LLC, the Bankruptcy Court approved a stipulation between the Debtor and Sabal Financial Group, L.P., as special servicer and authorized agent for lender CADC/RADC Venture 2011-1. The stipulation provides that, among other things: 1. The Debtor will immediately engage a real estate broker to market and sell the properties, and the broker will be acceptable to the lender, in the lender's discretion. 2. The deadline for the Debtor to close the sale of each of the Properties will be Dec. 12, 2014. 3. Upon closing, the proceeds of the sale of each of the properties will be paid directly to the lender for application to the amounts owing by the Debtor to the lender under the Notes and Deeds of Trust, including principal, interest, late charges, attorneys' fees, other costs of enforcement and any other amounts owing under the Notes, Deeds of Trust and any other related loan documents, until all such amounts are indefeasibly paid in full. 4. In the event the Debtor has not closed on a sale of the properties by Dec. 12, 2014, the Debtor will transfer ownership of the properties to the lender, and the value of the properties will be applied against the outstanding obligations of the Debtor to the lender (in an amount to be determined). Alternatively, the lender will have the right to foreclose upon the properties or to exercise any other state-law remedies it may have against the Properties if the properties are not sold by Dec. 12, 2014, and the automatic stay is modified to the extent necessary to permit the lender to proceed with such remedies at such time without further Court order. 5. The Debtor will continue to maintain adequate and proper insurance for the properties until such Properties are sold or are transferred to the lender. Sabal Financial asserts an interest in the Debtor's real property and the Notes and Deeds of Trust. In particular, the Deeds of Trust encumber certain parcels of real property in St. Robert, Pulaski County, Missouri, owned by the Debtor, including: i. six four-family residential buildings with these addresses: 124-130 Andrews, 114-120 Andrews, 102-108 Andrews, 105-111 Andrews, 115-121 Andrews, and 125-131 Andrews, St. Robert, Missouri; also known as Lots 36 through 41 of the Heritage Estates subdivision; ii. certain additional lots and vacant land in the Heritage Estates subdivision, St. Robert, Missouri, which is adjacent to the Andrews Property (the Heritage Estates Property); and iii. approximately 350 acres of undeveloped land in the Liberty Heights subdivision, St. Robert, Missouri. Sabal Financial had filed papers with the Court, seeking to protect its rights and to exercise its contractual and state-law remedies with respect to the Debtor's real property constituting its collateral. Sabal Financial is represented by: Mark G. Stingley, Esq. Cullen K. Kuhn, Esq. BRYAN CAVE LLP 3800 One Kansas City Place 1200 Main Street Kansas City, MO 64105 Tel: (816) 374-3200 Fax: (816) 374-3300 E-mail: mgstingley@bryancave.com ckkuhn@bryancave.com The Debtor is represented by: Ariel Weissberg, Esq. WEISSBERG AND ASSOCIATES, LTD. 401 S. LaSalle St., Suite 403 Chicago, IL 60605 Tel: (312) 663-0004 Fax: (312) 663-1514 E-mail: ariel@weissberglaw.com About Harris Land Development, LLC Harris Land Development, LLC, sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 14-60554) in Springfield, Missouri, on April 28, 2014, without stating a reason. The Debtor disclosed $16,534,000 in assets and $11,107,302 in liabilities as of the Chapter 11 filing. This is Harris Land's second trip to bankruptcy. The first bankruptcy was in September 2010 in In Re Harris Land Development, LLC, Case No. 10-62322 (Bankr. W.D. Mo.) HARDWICK CLOTHES: Allan Jones Acquires Business Out of Bankruptcy ----------------------------------------------------------------- Check Into Cash on June 18 disclosed that America's oldest maker of tailor-made clothing has a new lease on life, thanks to the man who's been called "the pioneer of payday lending." Cleveland, TN, entrepreneur Allan Jones acquired 134-year-old Hardwick Clothes earlier this week and vowed to pump new energy into the once-famous company that had recently fallen into bankruptcy. An iconic Cleveland business since 1880 C.L. Hardwick founded two Cleveland, TN, businesses in the 19th century: Hardwick Stoves in the 1870s and Hardwick Clothes in 1880. Hardwick put his two sons in control of the businesses: George L. Hardwick ran the clothing company, while Joseph H. Hardwick ran Hardwick Stove. Maytag acquired Hardwick Stove in 1981. Hardwick Clothes remained in the family, owned by approximately 70 Hardwick heirs, until the Jones acquisition. The clothing company once boasted 900 employees; its current workforce numbers approximately 225. Mr. Jones was attracted to Hardwick, he said, because it was the oldest business of its kind in America. "I am convinced the pendulum is swinging back to 'Made in America,' after the Men's Wearhouse acquisition of Joseph Abboud ? one of America's traditional suitmakers," Mr. Jones said. Mr. Jones noted that at one time, Hardwick was renowned for having the best blazer in the world. He intends to help the blazer regain its prominence by using better materials and buttons. Mr. Jones paid $1.9 million for the company's assets through Jones CapitalCorp LLC, but acknowledged it's going to take much more than that to turn the company around. He has conducted a national search for a new chief executive officer for the company, and intends to make an announcement soon. Cleveland entrepreneur a legendary success in consumer lending Mr. Jones is best known as the founder, chairman and CEO of Check Into Cash, the second largest payday lender in the nation. His career began at the age of 20 after he left college to help his father (who was suffering from emphysema) stabilize the family's small, manually operated credit bureau located in his hometown of Cleveland. Mr. Jones purchased the family's credit collection agency in 1977 and grew it to the largest credit bureau databases in the state. He sold the credit reporting side of the business to Equifax (EFX) in 1988, retaining the company's name and collection agency, along with most of the staff. He then built the company to be the largest in Tennessee, with offices from Memphis to Atlanta. Mr. Jones sold the company in 1998. Mr. Jones founded Check Into Cash in 1993, and the company grew to include 1,300 stores nationwide. His prominent role in the development of the payday lending industry brought Mr. Jones into the national spotlight, and he was credited for pioneering the concept of the nation's first monolined payday lending company. The Los Angeles Times once called Jones the "granddaddy" of the payday industry. In 2005, he was on BusinessTN magazine's "Power 100" list, and has appeared on the list consistently with the nickname "The King of Cash." Although Mr. Jones is known as the pioneer of payday lending, his companies offer a variety of products in the micro-lending field -- what Mr. Jones describes as "small loans for short periods of time." A promising future for Hardwick Clothes Thomas H. Hopper, the chairman and president of Hardwick Clothes, said he would remain with the company as Jones takes the reins. "Allan Jones brings real enthusiasm and excitement, and it's just what Hardwick needed," said Mr. Hopper. "We can now move forward as an even stronger company and regain our national prominence. Our employees are excited about the future." About Hardwick Clothes Hardwick Clothes, founded in Cleveland Tennessee in 1880, is the oldest privately held mens apparel manufacturer in America. HERON LAKE: Posts $6.4 Million Net Income in First Quarter ---------------------------------------------------------- Heron Lake Bioenergy, LLC, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $6.39 million on $39.14 million of revenues for the three months ended April 30, 2014, as compared with a net loss of $922,122 on $35.49 million of revenues for the same period last year. As of April 30, 2014, the Company had $69.14 million in total assets, $29.17 million in total liabilities and $39.96 million in total members' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/uscC5Q About Heron Lake Heron Lake BioEnergy, LLC, operated a dry mill, coal fired ethanol plant in Heron Lake, Minnesota. After completing a conversion in November 2011, the Company is now a natural gas fired ethanol plant. Its subsidiary, HLBE Pipeline Company, LLC, owns 73 percent of Agrinatural Gas, LLC, the pipeline company formed to construct, own, and operate a natural gas pipeline that provides natural gas to the Company's ethanol production facility through a connection with the natural gas pipeline facilities of Northern Border Pipeline Company in Cottonwood County, Minnesota. Its subsidiary, Lakefield Farmers Elevator, LLC, has grain facilities at Lakefield and Wilder, Minnesota. At nameplate, the Company's ethanol plant has the capacity to process approximately 18.0 million bushels of corn each year, producing approximately 50 million gallons per year of fuel-grade ethanol and approximately 160,000 tons of distillers' grains with soluble. Heron Lake reported net income of $2.26 million on $163.76 million of revenues for the year ended Oct. 31, 2013, as compared with a net loss of $32.35 million on $168.65 million of revenues for the year ended Oct. 31, 2012. Boulay PLLP, in Minneapolis, Minnesota, issued a "going concern" qualification on the consolidated financial statements for the year ended Oct. 31, 2013. The independent auditors noted that the Company has incurred losses due to difficult market conditions and had lower levels of working capital than was desired. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "Our loan agreements with AgStar are secured by substantially all business assets and are subject to various financial and non- financial covenants that limit distributions and debt and require minimum debt service coverage, net worth, and working capital requirements. The Company was in compliance with the covenants of its loan agreements with AgStar as of October 31, 2013. In the past, the Company's failure to comply with the covenants of the master loan agreement and failure to timely pay required installments of principal has resulted in events of default under the master loan agreement, entitling AgStar to accelerate and declare due all amounts outstanding under the master loan agreement. If AgStar accelerated and declared due all amounts outstanding under the master loan agreement, the Company would not have adequate cash to repay the amounts due, resulting in a loss of control of our business or bankruptcy," the Company said in its annual report for the year ended Oct. 31, 2013. HOPEWELL BUSINESS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Hopewell Business Center, LLC 14-07040 8913 E. Martin Luther King Blvd. Tampa, FL 33610 Hopewell Enterprises, LLC 14-07041 8913 E. Martin Luther King Blvd. Tampa, FL 33610 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtors' Counsel: Michael J Hooi, Esq. STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 E. Madison St. Ste. 200 Tampa, FL 33602 Tel: 813-229-0144 Email: mhooi.ecf@srbp.com Estimated Estimated Assets Liabilities ----------- ----------- Hopewell Business Center, LLC $500K-$1MM $1MM-$10MM Hopewell Enterprises, LLC $1MM-$10MM $1MM-$10MM The petitions were signed by Carl Larson, trustee, managing member. Hopewell Business Center listed Angela F. North & Co., P.A., as its largest unsecured creditor holding a claim of $975. HOSPITAL ACQUISITION: S&P Revises Outlook to Pos. & Affirms B- CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Hospital Acquisition LLC (dba LCI Holding Co. LLC) to positive from stable. At the same time, S&P affirmed the 'B-' corporate credit rating. "We revised the outlook on Hospital Acquisition based on the company's improved financial results and cash flow since its emergence from bankruptcy," said credit analyst David Peknay. "Our revised expectations now incorporate our belief that free cash flow could increase to, and sustained at least $10 million. Moreover, we expect margins could increase at least 100 basis points, improving debt to EBITDA to the low-5x area from the current level near 6x." The positive outlook reflects the company's recent results and S&P's increased confidence that despite its short track record since its emergence from bankruptcy, the company will increase its EBITDA margin and generate sustained free cash flow. To achieve this improvement, the company must manage risks related to a difficult reimbursement environment or other regulatory hurdles that might arise. Upside Scenario S&P could raise the rating if the company succeeds in meeting its base-case forecast. S&P would have to be confident that the company would continue to operate at that level and that leverage would decline below 5x. This would strengthen S&P's belief that the company's financial risk profile is more consistent other companies with an "aggressive" financial risk profile. Downgrade Scenario S&P would revise the outlook back to stable if revenue growth is lower than it expected and the company is unable to improve its margins. This could be the result of unexpected adverse reimbursement cuts for either its Medicare or commercial patients. Such a development might also prevent the company from achieving S&P's cash flow target. S&P believes such a scenario could cause the company's financial risk profile to remain "highly leveraged". HOWARD PAUL IVANY: Chapter 15 Case Summary ------------------------------------------ Chapter 15 Petitioner: Schonfeld Inc. Chapter 15 Debtor: Howard Paul Ivany 85 Ferguson Road RR #1 Kirkfield, Ontario KOM 2BO Canada Chapter 15 Case No.: 14-02948 Chapter 15 Petition Date: June 17, 2014 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Chapter 15 Petitioner's Counsel: Phillip M Hudson, III, Esq. ARNSTEIN & LEHR LLP 200 South Biscayne Boulevard, Suite 3600 Miami, FL 33131 Tel: (305) 374-3330 Fax: (305) 374-4744 Email: pmhudson@arnstein.com Estimated Assets: not indicated Estimated Debts: not indicated A full-text copy of the Chapter 15 petition is available for free at http://bankrupt.com/misc/flmb14-02948.pdf HUNTER DONALDSON: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Hunter Donaldson, LLC P.O. Box 39 Brea, CA 92821-0039 Case No.: 14-07050 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Stephen R Leslie, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 East Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: 813-229-0144 Email: sleslie.ecf@srbp.com - and - B Michael Bachman, Jr., Esq. STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 Madison Street, Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Email: mbachman.ecf@srbp.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Carda, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. HYDROCARB ENERGY: Incurs $1.6-Mil. Net Loss in Third Quarter ------------------------------------------------------------ Hydrocarb Energy Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.59 million on $1.05 million of revenues for the three months ended April 30, 2014, as compared with a net loss of $958,084 on $1.38 million of revenues for the same period in 2013. For the nine months ended April 30, 2014, the Company had a net loss of $4.46 million on $3.88 million of revenues as compared with a net loss of $36.47 million on $5.10 million of revenues for the same period during the prior year. The Company's balance sheet at April 30, 2014, showed $26.73 million in total assets, $15.22 million in total liabilities and $11.50 million in total equity. "Management was unable to obtain certain of the business information necessary to complete the preparation of the Company's Form 10Q for the quarter ended April 30, 2014, and the review of the report by the Company's auditors in time for filing. Such information is required in order to prepare a complete filing. As a result of this delay, the Company is unable to file its quarterly report on Form 10Q within the prescribed time period without unreasonable effort or expense," the Company said in a Form 12b-25 filed with the SEC prior to the Form 10-Q filing. A full-text copy of the Form 10-Q is available for free at: http://is.gd/sl9V61 On June 13, 2014, Christine P. Spencer was appointed chief accounting officer of Hydrocarb Energy. Christine P. Spencer, 58, has been the controller of Hydrocarb Energy Corp. since February of 2013. During the previous four years, she was controller of Platinum Pressure Pumping, an oilfield service company, for approximately two years, and controller of Holden Roofing Company, a residential and commercial roofing company, prior to that. Ms. Spencer is a certified public accountant in Texas and has over 37 years of public and private accounting experience. Ms. Spencer has a BAccy from the University of Illinois. About Hydrocarb Energy Hydrocarb Energy, formerly known as Duma Energy Corp, is a publicly-traded Domestic and International energy exploration and production company targeting major under-explored oil and gas projects in emerging, highly prospective regions of the world. With exploration concessions in Africa, production in Galveston Bay and Oil Field Services in the United Arab Emirates, the Company maintain offices in Houston, Texas, Abu Dhabi, UAE and Windhoek, Namibia. Duma Energy incurred a net loss of $40.47 million for the year ended July 31, 2013, a net loss of $4.57 million for the year ended July 31, 2012, and a net loss of $10.28 million for the year ended July 31, 2011. INCRED-A-BOWL: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Incred-A-Bowl, L.L.C. fdba Trail Winds Center, LLC 8560 W. 151st Street Overland Park, KS 66223 Case No.: 14-21440 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court District of Kansas (Kansas City) Judge: Hon. Dale L. Somers 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: $5.23 million Total Liabilities: $7.80 million The petition was signed by Danny L. Jackson, member/owner. A list of the Debtor's 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/ksb14-21440.pdf IZEA INC: CEO Buys 20,000 Common Shares --------------------------------------- Edward H. Murphy, Izea, Inc.'s president and chief executive officer, on June 13, 2014, purchased 20,000 shares of the Company's common stock in the open market for a total purchase price of $9,400 ($0.47 per share) for investment purposes. About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. IZEA reported a net loss of $3.32 million on $6.62 million of revenue for the 12 months ended Dec. 31, 2013, as compared with a net loss of $4.67 million on $4.95 million of revenue during the prior year. The Company's balance sheet at March 31, 2014, showed $13.16 million in total assets, $16.44 million in total liabilities and a $3.27 million total stockholders' deficit. KANGADIS FOOD: Hires Fox Rothschild as Litigation Counsel --------------------------------------------------------- Kangadis Food Inc. seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ Fox Rothschild LLP as its special counsel to provide legal services primarily relating to two pending litigations to which the Debtor is a party. The Debtor seeks to employ Fox as special counsel to assist with respect to two: (i) Ebin et al v. Kangadis Food Inc., Case No. 1:13-cv-02311 (JSR), currently pending in the United States District Court for the Southern District of New York; and (ii) Kangadis Food, Inc. d/b/a The Gourmet Factory v. Utica National Assurance Company, Index No. 060158/2014, currently pending the Supreme Court of the State of New York, County of Suffolk. Additionally, the Debtor seeks to employ Fox to represent it with respect to any proceedings in the case relating to the Class Action, including but not limited to, representing the Debtor with respect to the Debtor?s motion to estimate any claim arising from the Class Action. The Debtor will pay the firm's hourly rates as follows: attorneys $195 to $895, and paraprofessionals $120 to $360. The firm also customarily bills its clients for expenses related to the rendition of services. Fox holds an undisputed unsecured claim against the Debtor in the approximate amount of $343,317. Gerald E. Arth, Esq., at a partner of the firm Fox Rothschild LLP, in Philadelphia, Pennsylvania, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. A hearing on the employment application will be on July 2, 2014, at 1:30 p.m. Objections are due June 25. About Kangadis Food Formed in 2003, Kangadis Food Inc. is an importer of olives and other European delicacies, and a leading distributor of olive oil. The Debtor sells its products under the brand names "Capatriti," "Porto," "Olio Villa," "Zorba," and "Kivotos". The company is 100% owned by the Kangadis family. The company says that for the past six years, the popularity of its olive oil product sold under the brand name "Capatriti" has grown over time, and it is one of the leading brands in the New York metropolitan area. As of its bankruptcy filing, Kangadis Food employs 51 people, and operates from a 75,000 square foot facility located in Hauppauge, New York, that serves as a warehouse, production facility, and shipping center. Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in New York, on June 6, 2014. Themistoklis Kangadis signed the petition as chief executive officer. As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had total assets of $12,259,802 and total liabilities of $6,136,456, which amount does not include any disputed claim relating to the class action. Judge Robert E. Grossman presides over the case. Silverman Acampora LLP, in Jericho, New York, serves as the Debtor's counsel. KANGADIS FOOD: Employs WeiserMazars as Accountants -------------------------------------------------- Kangadis Food Inc. seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ WeiserMazars LLP as its accountants for the purpose of assisting the Debtor with respect to accounting, tax, and other financial issues that will arise during the case. The Debtor expects that WM will perform, among other services, the following services in this case: (a) Prepare/review of monthly debtor-in-possession operating reports and statements of cash receipts and disbursements including notes as to the status of tax liabilities and other indebtedness; (b) Prepare reviewed financial statements as may be required by the Debtor?s lender or based on other requirements; (c) Review existing accounting systems and procedures and establish new systems and procedures, if necessary and practical; (d) Assist the Debtor in the development of a plan of reorganization; (e) Assist the Debtor in the preparation of a liquidation analysis; (f) Appear at creditors' committee meetings, 341(a) meetings, and Court hearings, if required; (g) Assist the Debtor in the preparation of cash flow projections; (h) Attend court hearings; (i) Conduct claims analysis and reconciliations, and preference analyses (if deemed necessary); (j) Consult with counsel for the Debtor in connection with operating, financial and other business matters related to the ongoing activities of the Debtor; (k) Prepare tax returns; and (l) Perform any other services that may be deemed necessary and that are typically performed by a financial advisor for a company in bankruptcy. WeiserMazars' current hourly rates for its services are as follows: Partners/Principals/Managing Directors $425-$600 Senior Managers/Directors $340-$420 Managers/Supervisors $225-$330 Seniors $160-$250 Staff $100-$160 Paraprofessional $100-$160 WeiserMazars will also seek reimbursement for all necessary and reasonable out-of-pocket expenses. WeiserMazars has been paid a retainer prior to the Petition Date, and, as of the Petition Date, the balance of the retainer was $27,199. Stephen Latuso, a director of the firm WeiserMazars LLP, in New York, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. A hearing on the employment application will be on July 2, 2014, at 1:30 p.m. Objections are due June 25. About Kangadis Food Formed in 2003, Kangadis Food Inc. is an importer of olives and other European delicacies, and a leading distributor of olive oil. The Debtor sells its products under the brand names "Capatriti," "Porto," "Olio Villa," "Zorba," and "Kivotos". The company is 100% owned by the Kangadis family. The company says that for the past six years, the popularity of its olive oil product sold under the brand name "Capatriti" has grown over time, and it is one of the leading brands in the New York metropolitan area. As of its bankruptcy filing, Kangadis Food employs 51 people, and operates from a 75,000 square foot facility located in Hauppauge, New York, that serves as a warehouse, production facility, and shipping center. Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in New York, on June 6, 2014. Themistoklis Kangadis signed the petition as chief executive officer. As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had total assets of $12,259,802 and total liabilities of $6,136,456, which amount does not include any disputed claim relating to the class action. Judge Robert E. Grossman presides over the case. Silverman Acampora LLP, in Jericho, New York, serves as the Debtor's counsel. KANGADIS FOOD: Files List of Largest Unsecured Creditors -------------------------------------------------------- Kangadis Food Inc. filed with the U.S. Bankruptcy Court for the Eastern District of New York its list of creditors holding largest unsecured claims to disclose the following: Creditor Nature of Debt Claim Amount -------- -------------- ------------ Fox Rothschild LLP Legal Fees $352,617 2000 Market Street 20th Floor Philadelphia, PA 19103-3222 Attn: Geralrd Arth, Partner Tel: (215) 299-2720 Fax: (215) 299-2150 Email: GArth@foxrothschild.com CleerkBrook/Tully Environmental Inc. Services $5,657 972 Nicols Road Deer Park, NY 11729 Attn: Mike Miller Tel: (631) 828-00473 Email: MMiller@CleerBrook.us Aramark Uniform Services Uniforms $3,653 AUS North Lockbox PO Box 28050 New York, NY 10087 Attn: Emily Hubble Tel: (800) 504-0328 Email: Emily.Hubble@uniform.aramark.com Ata Freight Line Ltd. Freight Services $3,237 1325 Franklin Avenue Suite 500 Garden City, NY 11530 Attn: Kelly Turpin Tel: (718) 995-3855 Email: k.turpin@atafreight.com Adco Paper & Packaging Co. Packaging $2,888 1109 Metropolitan Avenue Brooklyn, NY 11211 Attn: Harry Carter, Sr. Tel: (718) 599-1500 Email: harrycarter@gmail.com Cell-Park Boxes $2,214 850 Union Avenue Bridgeport, CT 06607 Tel: (203) 334-3500 Fax: (203) 367-5266 Manufacturers Corrugated Box Co. Boxes $1,608 58-30 57th Street Maspeth, NY 11378 Tel: (718) 894-7200 Fax: (718) 894-2567 Emerald Signs Truck Signs $1,524 16-32 Decatur Street Ridgewood, NY 11385 Attn: Lana Tel: (718) 366-8100 Email: emeraldsigns@yahoo.com EcoPlast LLC Box supplier $1,297 4619 Surf Avenue Brooklyn, NY 11224 Attn: Josh Lefkowitz Tel: (718) 996-1800 Email: jl@ecoplast.us ZEP Manufacturing Co. Cleaning Supplies $914 PO Box 299 Springfield, NJ 07081 Attn: Lenny Albert Tel: (516) 532-0350 Email: Leonard.Albert@zep.com Glove Planet Gloves $856 319 West Ontario Chicago, IL 60654 Attn: Angela Pappas Tel: (800) 848-0616 Email: apappas@gloveplanet.com Suffolk County Water Authority Water Supply $761 2045 Route 112 Suite 5 Coram, NY 11727 Tel: (631) 582-2211 Email: info@scwa.com Just Truck Repairs Repairs $469 21 Garfield Avenue Bay Shore, NY 11706 Attn: Janet Tarulli Tel: (613) 254-8862 Email: jtar2173@optonline.net AFA Protective Sys. Inc. Sprinklers $455 155 Michael Drive Syosset, NY 11791 Tel: (516) 496-2322 Fax: (516) 496-2848 Email: info@afap.com Zoro Tools, Inc. Machinery Parts $297 1445 Armour Boulevard Mundelein, IL 60060 Attn: Amy Nyborg Tel: (800) 934-2693) Email: creditservice@zorotools.com CAL Business Solutions Prof. IT Services $232 200 Birge Park Road Harwinton, CT 06791 Attn: Cindy W. Yung Tel: (860) 485-0910 Email: cindyY@calzone.com K&G Power Systems Machinery Repair $219 150 Laser Court Hauppauge, NY 11788 Tel: (631) 342-1171 Email: sales@kgpowersystems.com T-Mobile Phones $185 PO Box 790047 Saint Louis, MO 63179 Hilo Industrial Parts Forklifts $165 345 Oser Avenue Hauppauge, NY 11788 Attn: Lisa Rivera Tel: (631) 253-2600 Email: Irivera@hilousa.com CHEP USA Pallet Company $129 15226 Collections Center Chicago, IL 60693 Attn: Nicolatte Jassawal Tel: (866) 855-2437 Email: Nicollate.Jassawal@brambles.com About Kangadis Food Formed in 2003, Kangadis Food Inc. is an importer of olives and other European delicacies, and a leading distributor of olive oil. The Debtor sells its products under the brand names "Capatriti," "Porto," "Olio Villa," "Zorba," and "Kivotos". The company is 100% owned by the Kangadis family. The company says that for the past six years, the popularity of its olive oil product sold under the brand name "Capatriti" has grown over time, and it is one of the leading brands in the New York metropolitan area. As of its bankruptcy filing, Kangadis Food employs 51 people, and operates from a 75,000 square foot facility located in Hauppauge, New York, that serves as a warehouse, production facility, and shipping center. Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in New York, on June 6, 2014. Themistoklis Kangadis signed the petition as chief executive officer. As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had total assets of $12,259,802 and total liabilities of $6,136,456, which amount does not include any disputed claim relating to the class action. Judge Robert E. Grossman presides over the case. Silverman Acampora LLP, in Jericho, New York, serves as the Debtor's counsel. KID BRANDS: Files Chapter 11 Petition to Facilitate Sale -------------------------------------------------------- Kid Brands, Inc. on June 19 disclosed that it plans to pursue a sale of substantially all of the assets of the Company, or one or more of its subsidiaries, facilitated through the filing of voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of New Jersey. As previously announced, Kid Brands had initiated a review of strategic and financing alternatives, including addressing under-performing product lines, exploring strategic alliances, the sale or merger of the Company or one or more of its subsidiaries, restructuring the Company's current debt, a recapitalization, or other possible transactions. The Board of Directors ultimately determined that pursuing a sale under section 363 of the bankruptcy code through a chapter 11 filing is in the best interests of the Company and its stakeholders. Kid Brands intends to operate its current business in the ordinary course during the chapter 11 process. To this end, the Company has secured commitments for $49 million in debtor-in-possession ("DIP") financing from Salus Capital Partners, LLC and Sterling National Bank, the Company's existing lenders, which, in addition to Kid Brands' ongoing cash flow, will enable the Company to fund its financial obligations after the voluntary petitions are filed, subject to Bankruptcy Court approval. Kid Brands has filed with the Bankruptcy Court a series of first day motions seeking authority to pay associates' wages and benefits and otherwise manage its day-to-day operations as usual. Kid Brands suppliers and customers can access additional information about the Company's chapter 11 filing and sale process at www.omnimgt.com/KidBrands Kid Brands is advised in this transaction by PricewaterhouseCoopers LLP and Lowenstein Sandler LLP. About Kid Brands, Inc. Kid Brands, Inc. -- http://www.kidbrands.com-- and its subsidiaries engage in the design, development and distribution of infant and juvenile branded products. Its design-led products are primarily distributed through mass market, baby super stores, specialty, food, drug, independent and ecommerce retailers worldwide. The Company's current operating subsidiaries consist of: Kids Line, LLC; LaJobi, Inc.; Sassy, Inc.; and CoCaLo, Inc. Through these wholly-owned subsidiaries, the Company designs, manufactures (through third parties) and markets branded infant and juvenile products in a number of complementary categories including, among others: infant bedding and related nursery accessories and decor and nursery appliances (Kids Line(R) and CoCaLo(R)); nursery furniture and related products (LaJobi(R)); and developmental toys and feeding, bath and baby care items with features that address the various stages of an infant's early years, including the Kokopax(R) line of baby gear products (Sassy(R)). In addition to the Company's branded products, the Company also markets certain categories of products under various licenses, including Carter's(R), Disney(R), Graco(R) and Serta(R). The Company's balance sheet at March 31, 2014, showed $80.34 million in total assets, $102.60 million in total liabilities and a $22.25 million total shareholders' deficit. Bankruptcy Warning "At March 31, 2014 and December 31, 2013 our cash and cash equivalents were $0.3 million and $0.2 million, respectively, our revolving loan availability was $0.9 million and $4.9 million, respectively, and such availability is currently expected to remain very tight for the remainder of 2014. As a result, the Company has had insufficient capital resources to satisfy outstanding payment obligations to certain of its suppliers/manufacturers and other service providers (in an aggregate amount of approximately $16.5 million), several of which have demanded payment in writing, are refusing to ship product, are requiring payment in advance of shipment or production, and/or are otherwise threatening to take action against the Company, including terminating their relationship with the Company and/or initiating legal proceedings for amounts owed (one such supplier has filed a complaint and another has made a demand for arbitration, as is described in Note 10). In connection with these events, the Company received a notice of breach dated April 25, 2014 from one of LaJobi's material licensors claiming that LaJobi failed to ship licensed goods to the licensor's customers as a result of outstanding subcontractor invoices. All of the foregoing circumstances (referred to collectively as the "Events of Default") constituted or may have constituted failures of conditions to lending and/or events of default under the Credit Agreement. Accordingly, the Borrowers, the Agent and the Required Lenders executed a Waiver and Fifth Amendment to Credit Agreement as of May 14, 2014 ("Amendment No. 5"), to waive any failures of conditions to lending and events of default resulting from the Events of Default. In addition, in order to increase the amount of eligible receivables under the Tranche A borrowing base, Amendment No. 5 further reduces the availability block from $3.5 million to $2.768 million for 30 days (such block will return to $3.5 million on June 14, 2014, and will revert to its original amount of $4.0 million on August 1, 2014). Notwithstanding the execution of Amendment No. 5, without a significant increase in available cash, we will continue to be unable to satisfy such obligations (or similar demands/proceedings instituted for payment, which are expected to continue) or make such advanced payments, which will negatively impact our ability to meet our customers' product demands and likely result in further breaches of our license agreements and certain of our customers ceasing to purchase products from us. All of the foregoing will have a material adverse effect on our financial condition and results of operations, and may result in our bankruptcy or insolvency," the Company stated in the Report. KID BRANDS: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Kid Brands, Inc., 14-22582 301 Route 17 North, 6th Floor Rutherford, NJ 07070 Kids Line, LLC 14-22583 Sassy, Inc. 14-22585 I&J Holdco, Inc. 14-22587 LaJobi, Inc 14-22589 CoCaLo, Inc 14-22590 RB Trademark Holdco, LLC 14-22591 Type of Business: Designer, importer, marketer, and distributor of infant and juvenile consumer products. Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Hon. Donald H. Steckroth Debtors' Counsel: Kenneth A. Rosen, Esq. Steven M. Skolnick, Esq. Samuel Jason Teele, Esq. Nicole Stefanelli, Esq. Shirley Dai, Esq. Anthony De Leo, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Tel: 973-597-2500 Fax: 973-597-2400 Email: krosen@lowenstein.com jteele@lowenstein.com sskolnick@lowenstein.com nstefanelli@lowenstein.com sdai@lowenstein.com adeleo@lowenstein.com Debtors' Financial Advisor: PRICEWATERHOUSECOOPERS LLP Debtors' Chief Restructuring Officer: Glenn Langberg GRL CAPITAL ADVISORS Debtors' Claims and Noticing Agent: RUST CONSULTING/OMNI BANKRUPTCY Total Assets: $32.40 million as of April 30, 2014 Total Debts: $109.1 million as of April 30, 2014 The petitions were signed by Glenn Langberg, chief restructuring officer. Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Customs and Border $14,056,244 Protection 1100 Raymond Boulevard Newark, NJ 07102 Tel: 973-368-6048 Jiashan Zhenxuan Trade Debt $2,143,381 Furniture Co., Ltd. No 58 Taisheng Road, Huiman Town Jiashan County Zhejiang Province China Chien (Vietnam) Furniture Trade Debt $2,081,152 Mfd. Co. Ltd. Lot 24 Tam Phuoc Industrial Zone Tam Phuoc Ward Bien Hoa City Dongnai Province Vietnam Sino Universe Limited Trade Debt $1,403,973 B6, 18/F. Kong Nam Industrial Building 603-609 Castle Peak Road Tsuen Wan, Hong Kong Tel: 852-2421 9172 Allied Hill Enterprise Ltd. Trade Debt $1,228,109 Suite 507, Silvercord, Tower 1 30 Canton Road, T.S.T. Kowloon, Hong Kong 852-2368 5328 York River Products Limited Trade Debt $1,132,546 Unit 304-305, 3rd Floor Camelpaint Centre No. 1 Hing Yip Street Kwun Tong Kowloon, Hong Kong Tel: 852-2780 3622 Bold Well Industrial Ltd. Trade Debt $1,080,441 Room 1371, 13/F., Kitec 1 Trademark Drive Kowloon Bay, Hong Kong Tel: 852-2174 0988 Kid's Basics Trade Debt $1,020,048 6955 NW 36th Ave Miami, FL 33147 Sunburst International Trade Debt $1,773,871 123 Jinhui Road West Ningbo Zhejiang China 315104 Tel: 86-574-88169932 Yan Tai Pacific Home Trade Debt $1,074,314 Fashion Co. Ltd. NO. 28 Ying Fu Rd Fushan Yantai Shandong China 265500 Tel: (008) 653-5801 Johnsonwood Co Ltd. Trade Debt $902,033 Tam Phuoc Industrial Zone Long Thanh Dist. Bien Hoa City Dongnai Province Vietnam Kaye Scholer LLP Trade Debt $642,086 425 Park Avenue New York, NY 10022 Tel: 212-836-8000 StructureTone Trade Debt $630,340 10 Woodbridge Center Drive Woodbridge, NJ 07095 Tel: 732-362-3500 Jiangsu Textile Industry (Group) Trade Debt $621,789 Import & Export Co., Ltd. Rm. 803, Textile Mansion Nanjing China 210002 Tel: (008) 625-8441 Linyi Tianshi Wood Co. Ltd. Trade Debt $512,469 Western Huanghai Rd. Junan County Shandong China Solid Toys Ind. Ltd. Trade Debt $493,465 Unit 35, 19/F., Block D Wah Lok Inc. Ind. Centre 37-41 Shan Mei St., Fotan Shatin, Hong Kong Tel: 852-2695 1103 Yangzhou Fuhua Arts Trade Debt $572,293 & Crafts Co. Ltd. 16# Chuangye Road Guangling Industrial Park Yangzhou Province China 225006 Tel: 86-514-8790-3115 Shanghai Dragon Corporation Trade Debt $391,663 Rm. 717, 333 JinXiang Rd. Pudong Shanghai China 201206 Tel: (862) 150-8911 Amwan Inc. Trade Debt $367,428 16039 Loukelton Street City of Industry, CA 91744 Style Craft Furniture Co., Ltd. Trade Debt $331,816 PO Box 957 Offshore Incorporations Center Rd. Tortola, British Virgin Islands Solomon Edwards Trade Debt $323,103 1255 Drummers Lane Suite 200 Wayne, PA 19087 Tel: 610-902-0440 Kunshan Haihe Trade Debt $314,617 Hardware Mfg. Co., Ltd. Hua Yang Lane of Jin Yang East Road Lujia Town, Kunshan Jiangsu, China 86-512-57288518 57877668 Littler Mendelson Trade Debt $313,120 650 California Street 20th Floor San Francisco, CA 94108 415-433-1940 Green Toyland Limited Trade Debt $290,613 2nd Floor, Myung-Min Bldg. 16-11, Karak Bon-Dong Seoul, Korea Tel: 822-402-8107 Canfat Manufacturing Trade Debt $260,525 Flat A3, 9th Floor, Block A Mai Hing Industrial Building 16-18, Hing Yip Street Kwun Tong, Hong Kong Tel: 852-2487 7112 Goodbaby (Hong Kong) Limited Trade Debt $206,580 Room 2001, 20th Floor Two Chinachem Exchange Square 338 King's Road North Point, Hong Kong Sheba Toys Co. Ltd. Trade Debt $182,893 6th F/L, Maru Bldg. 261-2, Yangjae-Dong Seocho-Gu Seoul, Korea Creative Promotional Products Trade Debt $179,460 7300 N Monticello Skokie, IL 60076 Tel: 847-677-4800 San Diego Personnel & Trade Debt $150,093 Employment Agency Inc. P.O. Box 150990 Ogden, UT 84415 323-927-2327 Wing Fat Plastic & Electric Trade Debt $148,633 Rm 625-654, 6/F SuiFai FTY Estat5-13, ShanMei St. Fo Tane Sha Tin, Hong KOng Tel: 852-2688-0767 LASALLE REALTY: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: LaSalle Realty Corp 40 LaSalle Street Staten Island, NY 10303 Case No.: 14-43113 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Carla E. Craig Debtor's Counsel: Paul Hollender, Esq. CORASH & HOLLENDER PC 1200 South Avenue, Suite 201 Staten Island, NY 10314 Tel: (718) 442-4424 Fax: (718) 273-4847 Email: info@silawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Giovanni Culotta, president. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/nyeb14-43113.pdf LATTICE INC: Robert Robotti Holds 4.6% Equity Stake --------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Robert E. Robotti and his affiliates disclosed that as of March 31, 2014, they beneficially owned 1,715,840 shares of common stock of Lattice Incorporated representing 4.6 percent of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/JO1aAo About Lattice Inc. Pennsauken, New Jersey-based Lattice Incorporated provides telecommunications services to correctional facilities and specialized telecommunication service providers in the United States. Lattice Incorporated reported a net loss of $1 million on $8.26 million of revenue for the year ended Dec. 31, 2013, as compared with a net loss of $570,772 on $7.53 million of revenue during the prior year. As of March 31, 2014, the Company had $5.12 million in total assets, $6.89 million in total liabilities and a $1.77 million deficit attributable to shareowners of the Company. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, in Somerset, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has a history of operating losses, has a working capital deficit and requires additional working capital to meet its current liabilities. These factors raise substantial doubt about the Company's ability to continue as a going concern. LEARFIELD COMMUNICATIONS: S&P Affirms 'B' CCR on Term Loan Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Plano, Texas-based Learfield Communications Holdings Inc., which manages the multimedia rights of universities with popular sports programs. The outlook is stable. At the same time, S&P affirmed the rating on Learfield's upsized first-lien facility (consisting of a $35 million revolver due 2018 and an upsized $325 million term loan due 2020) at 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. In addition, S&P affirmed the rating on Learfield's second-lien credit facility (consisting of a $105 million term loan due 2021) at 'CCC+', with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. Learfield plans to use the proceeds from the $45 million add-on to finance the acquisition of Licensing Resource Group (LRG) and a smaller technology platform, for transaction fees and expenses and to add a small amount of cash on the balance sheet. The 'B' corporate credit rating on Learfield reflects S&P's assessment of the company's business risk profile as "weak" and our assessment of the company's financial risk profile as "highly leveraged," per S&P's criteria. "Our assessment of Learfield's business risk profile as "weak" reflects the company's limited revenue diversification, limited potential for additional contract growth as Learfield and its competitors already have agreements with the majority of university sports programs that are sizeable enough for such agreements, our forecast for limited future profitability growth and the acquisitive nature of the company over the past year. The announced acquisitions will, however, provide for an improvement of service offerings and will add new capabilities for Learfield. Future profitability will likely be driven by increasing sponsorship revenue at the universities with which Learfield is already contracted as well as some cross selling opportunities from the licensing and technology platforms from the announced acquisitions. We believe a modest amount of revenue stability from sponsorship agreements at college sports arenas as well as long-term agreements with universities that provide expense visibility somewhat temper the risks. Other positive factors that temper the risks to Learfield's business risk profile are its high market share within the industry and high barriers to entry, given the majority of eligible universities are currently contracted by Learfield and its primary competitor. Learfield's strong relationships with universities and their past success in attracting sponsors also mitigate the above risks," S&P said. "Our assessment of Learfield's financial risk profile as "highly leveraged" reflects our expectation for adjusted leverage (adjusted for the present value of future minimum payments under non-cancellable event agreements and operating leases) to remain above 6x and for adjusted interest coverage to remain in the mid- 2x area, through 2015. We are forecasting modest EBITDA growth and minimal debt reduction through 2015. Further, our assessment assumes Learfield will meet our 2014 expectations, as the fiscal year end will close at the end of the month, and our understanding that Learfield has already booked a substantial amount of its budgeted net revenues for fiscal 2015 and is ahead of schedule when compared with the same period last year. This provides strong visibility into performance over the near term," S&P noted. LEHMAN BROTHERS: July 31 Proofs of Debt Deadline Set ---------------------------------------------------- Notice is hereby given pursuant to Rule 2.95 of the Insolvency Rules 1986 that D.A. Howell, A.V. Lomas, S.A. Pearson, G.E. Bruce and J.G. Parr, the Joint Administrators of Lehman Brothers Holdings plc, intend to make a distribution (by way of paying an interim dividend) to the preferential creditors (if any) and to the unsecured, non-preferential creditors of LBH. Proofs of debt may be lodged at any point up to (and including) July 31, 2014, the last date for proving claims, however, creditors are requested to lodge their proofs of debt at the earliest possible opportunity. Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. The Joint Administrators intend to make such distribution within the period of two months from the last date for proving claims. For further information, contact details, and proof of debt forms, please visit: http://www.pwc.co.uk/businessrecovery/administrations/lehman/LBH- plc-in-administration.jhtml Please complete and return a proof of debt debt form, together with relevant supporting documents to PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT marked for the attention of Diane Adebowale. Alternatively, you can email a completed proof of debt form to LBHplc@lbia-eu.com Rule 2.95(2)(c) of the Insolvency Rules 1986 requires the Joint Administrators to state in this notice the value of the prescribed part of LBH's net property which is required to be made available for the satisfaction of LBH's unsecured debts pursuant to section 176A of the Insolvency Act 1986. There are no floating charges over the assets of LBH and accordingly, there shall be no prescribed part. All of LBH's net property will be available for the satisfaction of LBH's unsecured debts. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS UK: July 31 Proofs of Debt Deadline Set ------------------------------------------------------- Notice is hereby given pursuant to Rule 2.95 of the Insolvency Rules 1986 that D.A. Howell, A.V. Lomas, S.A. Pearson, G.E. Bruce and J.G. Parr, the Joint Administrators of Lehman Brothers UK Holdings Limited, intend to make a distribution (by way of paying an interim dividend) to the preferential creditors (if any) and to the unsecured, non-preferential creditors of LBUKH. Proofs of debt may be lodged at any point up to (and including) July 31, 2014, the last date for proving claims, however, creditors are requested to lodge their proofs of debt at the earliest possible opportunity. Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. The Joint Administrators intend to make such distribution within the period of two months from the last date for proving claims. For further information, contact details, and proof of debt forms, please visit http://www.pwc.co.uk/businessrecovery/administrations/lehman/lbukh -ltd-in-administration.jhtml Please complete and return a proof of debt form, together with relevant supporting documents to PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT marked for the attention of Diane Adebowale. Alternatively, you can email a completed proof of debt form to LBUKH@lbia-eu.com Rule 2.95(2)(c) of the Insolvency Rules 1986 requires the Joint Administrators to state in this notice the value of the prescribed part of LBUKH's net property which is required to be made available for the satisfaction of LBUKH's unsecured debts pursuant to section 176A of the Insolvency Act 1986. There are no floating charges over the assets of LBUKH and accordingly, there shall be no prescribed part. All of LBUKH's net property will be available for the satisfaction of LBUKH's unsecured debts. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3: Inks Merger Agreement with tw telecom ---------------------------------------------- Level 3 Communications, Inc., on June 15, 2014, entered into an Agreement and Plan of Merger with Saturn Merger Sub 1, LLC, a direct wholly owned subsidiary of the Company ("Merger Sub 1"), Saturn Merger Sub 2, LLC, a direct wholly owned subsidiary of the Company ("Merger Sub 2"), and tw telecom inc., a Delaware corporation. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub 1 will be merged with and into tw telecom with tw telecom continuing as the surviving corporation and immediately following the Merger, the surviving corporation will merge with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company. As a result of the Combination, (i) each issued and outstanding share of common stock of tw telecom, par value $0.01 per share, other than dissenting shares, will be converted into 0.7 shares of the Company's common stock, par value $0.01 per share and the right to receive $10.00 in cash. The Merger Agreement also provides that the (i) issued and outstanding options to purchase tw telecom Common Stock will be exchanged for Merger Consideration, as adjusted to reflect the exercise price of each such outstanding option and (ii) issued and outstanding restricted stock and restricted stock units covering tw telecom Common Stock will vest and be exchanged for Merger Consideration. The Combination is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. Voting Agreement In connection with the Merger Agreement, on June 15 , 2014, STT Crossing Ltd., a stockholder of the Company, entered into a Voting Agreement with tw telecom and, solely with respect to certain covenants contained therein, the Company, pursuant to which STT agreed, among other things, (i) subject to certain exceptions as set forth in the Voting Agreement, to vote the Company Common Stock held by it in favor of the adoption of the Level 3 Charter Amendment and the issuance of the Stock Consideration and (ii) to restrict its ability to transfer, sell or otherwise dispose of, grant proxy to or permit the pledge of or any other encumbrance on such Company Common Stock. In the event that the Merger Agreement is terminated, the Voting Agreement will also terminate. Commitment Letter Concurrently with the signing of the Merger Agreement, Level 3 Financing, Inc. and the Company entered into a financing commitment letter with Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Citigroup Global Markets Inc. The Company expects the financing under the Commitment Letter, together with cash balances, to be sufficient to provide the financing necessary to consummate the Combination and to refinance certain existing indebtedness of tw telecom. The Commitment Letter provides for a senior secured term loan facility in an aggregate amount of $2.4 billion. The Commitment Letter also provides for a $600 million senior unsecured bridge facility, if up to $600 million of senior notes or certain other securities are not issued by Level 3 Financing, Inc., or the Company to finance the Combination on or prior to the closing of the Combination. Under certain circumstances, the committed amounts can be allocated from the senior facility to the bridge facility at the option of the Company. The financing commitments of Bank of America and CGMI are subject to certain conditions set forth in the Commitment Letter. A full-text copy of the Agreement and Plan of Merger, dated as of June 15, 2014, by and among the Company, Merger Sub 1, Merger Sub 2 and tw telecom is available for free at http://is.gd/MWOuWU A full-text copy of the Commitment Letter, dated as of June 15, 2014, by and among Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., the Company and Level 3 Financing, Inc., is available for free at: http://is.gd/riLXRU 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 in 2013, a net loss of $422 million in 2012 and a net loss of $756 million in 2011. The Company's balance sheet at 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. * * * In June 2014, Fitch Ratings upgraded the Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary Level 3 Financing, Inc. (Level 3 Financing) to 'B+' from 'B'. "The upgrade of LVLT's ratings is supported by the continued strengthening of the company's credit profile since the close of the Global Crossing Limited (GLBC) acquisition, positive operating momentum evidenced by expanding gross and EBITDA margins, and ongoing revenue growth within the company's Core Network Services (CNS) segment and its position to generate meaning FCF," Fitch stated. 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. LEVEL 3: Signs Voting Agreement with STT Crossing ------------------------------------------------- Level 3 Communications, Inc., on June 16, 2014, entered into a definitive agreement with tw telecom, inc., whereby Level 3 will acquire tw telecom in a stock-and-cash transaction. The Combination is, among other closing conditions, subject to a vote of the stockholders of each company. Concurrently with the execution of the Merger Agreement, at the Company's request, STT Crossing has entered into a voting agreement with tw telecom and Level 3 pursuant to which, STT Crossing agreed to, among other things, vote the shares of Common Stock owned beneficially or of record by it in favor of adoption of the amendment to Level 3's restated certificate of incorporation pursuant to and in accordance with the Merger Agreement and the approval of the issuance of shares of Common Stock in the Combination for purposes of the rules of the New York Stock Exchange. tw telecom and Level 3 also agreed to provide STT Crossing with consultation and participation rights relating to certain regulatory approvals that may be sought or obtained in connection with the consummation of the Merger Agreement. In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Temasek Holdings (Private) Limited, Singapore Technologies Telemedia Pte Ltd, STT Communications Ltd, and STT Crossing Ltd, disclosed that as of June 16, 2014, they beneficially owned 55,498,593 shares of common stock of Level 3 Communications, Inc., representing 23.4 percent of the shares outstanding. A full-text copy of the amended Schedule 13D is available for free at http://is.gd/0eGxNS A full-text copy of the voting agreement is available at: http://is.gd/KSqZzS 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 in 2013, a net loss of $422 million in 2012 and a net loss of $756 million in 2011. The Company's balance sheet at 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. * * * In June 2014, Fitch Ratings upgraded the Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary Level 3 Financing, Inc. (Level 3 Financing) to 'B+' from 'B'. "The upgrade of LVLT's ratings is supported by the continued strengthening of the company's credit profile since the close of the Global Crossing Limited (GLBC) acquisition, positive operating momentum evidenced by expanding gross and EBITDA margins, and ongoing revenue growth within the company's Core Network Services (CNS) segment and its position to generate meaning FCF," Fitch stated. 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. LEVEL 3: To Acquire tw telecom for $7.3 Billion ----------------------------------------------- Level 3 Communications, Inc., said it entered into a definitive agreement to acquire tw telecom for approximately $7.3 billion in a stock-and-cash transaction. tw telecom stockholders will receive $10 cash and 0.7 shares of Level 3 common stock for each share of tw telecom common stock or $40.86 per share based on market close as of June 13, 2014. The transaction is expected to close in the fourth quarter 2014. The companies said the combination leverages the highly complementary strengths to create a stronger, more nimble, customer service-oriented competitor to meet customers' increasingly complex local, national and global communications needs. "We believe this is a financially compelling and very strategic acquisition for Level 3 that will enhance our ability to continue to gain market share," said Jeff Storey, president and CEO of Level 3. "The transaction further solidifies Level 3's position as a premier global communications provider to the enterprise, government and carrier market, combining tw telecom's extensive local operations and assets in North America with Level 3's global assets and capabilities. "tw telecom's business model is directly aligned with Level 3's initiatives for growth, which include building managed solutions to meet customer needs through an advanced IP/optical network. The benefits created by this transaction deliver substantial value to both companies' stockholders, as it accelerates our objective of driving profitable growth and strengthening Free Cash Flow per share growth over the long term." "The transaction with Level 3 provides the combined company with an enhanced competitive position, our customers with a broader product offering and better opportunities for our employees as part of a larger company in an industry where scale is important to compete effectively against larger competitors," said Larissa Herda, chairman and CEO of tw telecom. "The transaction provides our stockholders with meaningful immediate cash value for their investment in tw telecom, while enabling them to participate in the substantial upside potential of the combined company. We look forward to working together with Level 3 to ensure a smooth transition." The transaction is subject to regulatory approvals relating to competition law and licensing, including approvals by the U.S. Federal Communications Commission and other U.S. state regulatory agencies. The transaction is also subject to a vote of the stockholders of each company. Citi and BofA Merrill Lynch acted as financial advisors to Level 3. Rothschild provided a fairness opinion. Willkie Farr & Gallagher LLP acted as legal counsel to Level 3. Evercore acted as financial advisor to tw telecom and provided an opinion with respect to the fairness of the transaction. Wachtell, Lipton, Rosen & Katz acted as legal counsel to tw telecom. Credit Suisse Securities (USA) LLC acted as financial advisor to ST Telemedia. 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 in 2013, a net loss of $422 million in 2012 and a net loss of $756 million in 2011. The Company's balance sheet at 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. * * * In June 2014, Fitch Ratings upgraded the Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary Level 3 Financing, Inc. (Level 3 Financing) to 'B+' from 'B'. "The upgrade of LVLT's ratings is supported by the continued strengthening of the company's credit profile since the close of the Global Crossing Limited (GLBC) acquisition, positive operating momentum evidenced by expanding gross and EBITDA margins, and ongoing revenue growth within the company's Core Network Services (CNS) segment and its position to generate meaning FCF," Fitch stated. 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. LIGHTSQUARED INC: Falcone Resigns From Board -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Philip Falcone resigned from the board of LightSquared Inc., the bankrupt developer of a satellite-based wireless communications system. According to the report, resigning along with Mr. Falcone were four other board members appointed by Falcone's Harbinger Capital Partners LLC, the controlling shareholder of LightSquared. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LUAR CLEANERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Luar Cleaners, Inc. Po Box 50109 Toa Baja, PR 00950 Case No.: 14-04974 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Jacqueline Hernandez Santiago, Esq. JACQUELINE HERNANDEZ SANTIAGO Po Box 366431 San Juan, PR 00936-6431 Tel: 787 751-1836 Email: quiebras1@gmail.com Total Assets: $1.03 million Total Liabilities: $2.15 million The petition was signed by Raul Palacios Velez, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb14-04974.pdf MCCLATCHY CO: Bestinver Gestion Owns 15% of Class A Shares ---------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission on June 16, 2014, Bestinver Gestion S.A., SGIIC disclosed that it beneficially owned 9,323,539 shares of Class A common stock of The McClatchy Company representing 15.01 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/ki6y7W About The McClatchy Company Sacramento, Cal.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company reported net income of $18.80 million for the year ended Dec. 29, 2013, as compared with a net loss of $144,000 for the year ended Dec. 30, 2012. As of Dec. 29, 2013, the Company had $2.61 billion in total assets, $2.37 billion in total liabilities, and $240.38 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. METRORIVERSIDE LLC: Cash Collateral Hearing Continued to July 10 ---------------------------------------------------------------- Judge Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California held a hearing on MetroRiverside, LLC's request to use cash collateral securing its prepetition indebtedness and granted such request on an interim basis. The Debtor seeks to use cash collateral in the ordinary course of business consistent with a budget for the months of June 2014 through September 2014. For approximately three to four weeks pending the final hearing on the request, the Debtor seeks to pay ordinary expenses up to $390,901 per month, with a variance of plus or minus $19,030 (less than 5%). The City of Riverside, as successor agency to the former Redevelopment Agency of the City, holds liens against the Debtor's real and personal property in the estimated claim amount of $20.6 million. The Debtor seeks to use cash collateral pending the earlier of (1) Sept. 1, 2014, or (2) the effective date of a chapter 11 plan, dismissal or conversion of the within case, appointment of a trustee, sale of substantially all assets, abandonment of substantially all assets, entry of an order granting of relief from the automatic stay to foreclose a lien against substantially all assets or further order of this Court, as the case may be. A continued hearing will be held on July 10, 2014, at 9:30 a.m. MetroRiverside, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Calif. Case No. 14-30901) on June 12, 2014. The petition was signed by Siavash Barmand as manager. The Debtor disclosed total assets of $18.79 million and total liabilities of $21.80 million. MacDonald Fernandez LLP serves as the Debtor's counsel. Judge Dennis Montali oversees the case. The Debtor operates a Hyatt Place hotel, franchised from Hyatt Place Franchising LLC. The Hotel is located at 3500 Market Street, Riverside, California. MICRO HOLDING: S&P Assigns Preliminary 'B' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services assigned California-based Micro Holding Corp. and MH Sub I LLC (herein referred to as Internet Brands) a preliminary corporate credit rating of 'B'. The outlook is stable. At the same time, S&P assigned the $75 million senior secured revolving credit facility due 2019 a 'B+' preliminary issue-level rating, with a preliminary recovery rating of '2', indicating its expectation for substantial (70% to 90%) recovery of principal for debtholders in the event of default. In addition, S&P assigned the $435 million senior secured term loan B and the $50 million delayed draw term loan B due 2021 a 'B+' preliminary issue-level rating, with a preliminary recovery rating of '2' (70% to 90% recovery expectation). Lastly, S&P assigned the $195 million second-lien loan due 2022 a 'CCC+' preliminary issue-level rating, with a preliminary recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery of principal for debtholders in the event of default. The 'B' preliminary corporate credit rating reflects the company's relatively small size and risks of continuous change in its businesses. It also reflects the company's "highly leveraged" financial risk profile, resulting from the increased debt in the capital structure due to the acquisition of the company by KKR. MICROVISION INC: To Sell $4.5 Million Common Shares --------------------------------------------------- MicroVision, Inc., had entered into a $4.5 million At-the-Market (ATM) equity offering agreement with Meyers Associates, L.P. (doing business as Brinson Patrick, a division of Meyers Associates, L.P.), or Brinson Patrick, on June 16, 2014. Under the agreement MicroVision may, from time to time, at its discretion, offer and sell shares of its common stock having an aggregate value of up to $4.5 million through Brinson Patrick. MicroVision intends to use the net proceeds from this facility, if any, for general corporate purposes, which may include, but are not limited to, working capital, capital expenditures and acquisitions of other technologies. Under the ATM equity offering sales agreement, sales of common stock, if any, through Brinson Patrick, will be made by means of ordinary brokers' transactions, in negotiated transactions, to or through a market maker other than on an exchange or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices or any other method permitted by law. The common stock will be offered under MicroVision's existing effective shelf registration statement (including a prospectus) filed with the Securities and Exchange Commission. A prospectus supplement related to the offering has been filed with the Securities and Exchange Commission. Any offer, solicitation or sale will be made only by means of the prospectus supplement and the accompanying prospectus. Current and potential investors should read the prospectus forming part of the registration statement, and the prospectus supplement relating to the at-the- market offering and other documents the company has filed with the SEC for more complete information about MicroVision and the At- the-Market offering program. A copy of the prospectus supplement and accompanying prospectus relating to these securities may be obtained by contacting Brinson Patrick, a division of Meyers Associates, L.P. at 3 Columbus Circle 15th Floor, New York, NY 10019, Attention: Investment Banking, by telephone at (212) 453-5000, or by email at info@bpmeyers.com. A full-text copy of the At-the-Market Issuance Sales Agreement is available for free at http://is.gd/QkEYwB About Microvision Inc. Headquartered in Redmond, Washington, MicroVision, Inc. (NASDAQ: MVIS) is the creator of PicoP(R) display technology, an ultra- miniature laser projection solution for mobile consumer electronics, automotive head-up displays and other applications. MicroVision reported a net loss of $13.17 million in 2013, as compared with a net loss of $22.69 million in 2012. Moss Adams LLP, in Seattle, Washington, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. MID-ATLANTIC MILITARY: S&P Affirms BB+ Rating on Class III Bonds ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to stable from negative on Mid-Atlantic Military Family Communities LLC's series 2005 class I-A, I-B, and III military housing revenue bonds. At the same time, Standard & Poor's affirmed its 'AA (sf)' and 'BB+ (sf)' ratings on the class I and class III bonds, respectively. The revision of the outlook to stable reflects Standard & Poor's view of the project's improved annual debt service coverage within the past fiscal year. "The stable outlook reflects our view of the improved debt service coverage, revenue stream strength that includes federally appropriated basic allowance for housing, and military importance of the bases the project serves," said Standard & Poor's credit analyst Renee J. Berson. "If coverage falls below 1x, we may lower the rating on the class III bonds. Conversely, if the project can contain its expenses and improve occupancy, we may raise the rating." Mid-Atlantic Military Family Communities LLC is the owner of the project, which serves 12 military installations in Virginia and Maryland, with approximately 43,000 military families assigned to them. MILE MARKER: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Mile Marker, Inc. 2121 Blount Road Pompano Beach, FL 33069 Case No.: 14-23931 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Hon. John K Olson Debtor's Counsel: Bernice C. Lee, Esq. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0800 Fax: (561) 998-0047 Email: blee@sfl-pa.com - and - Bradley S Shraiberg, Esq. SHRAIBERG, FERRARA, & LANDAU P.A. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 Email: bshraiberg@sfl-pa.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Leslie J. Aho, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb14-23931.pdf MINT LEASING: Further Amends 70MM Shares Prospectus with SEC ------------------------------------------------------------ The Mint Leasing, Inc., filed with the U.S. Securities and Exchange Commission an amendment no. 5 to its Form S-1 registration statement relating to the offering of 70,000,000 shares of common stock to delay its effective date. The public offering price will be $______ per share. If fully subscribed the Company anticipates receiving $______ in total proceeds from this offering prior to deducting expenses associated with the offering, which the Company anticipates totaling approximately $90,000. The Company's common stock is currently listed on the OTCQB market maintained by OTC Markets Group Inc. under the symbol "MLES." On June 11, 2014 (the last date that the Company's common stock traded on the OTCQB prior to the date of this Prospectus), the last reported sale price of the Company's common stock as reported on the OTCQB was $0.075 per share. There is no minimum number of shares that must be sold by the Company for the offering to proceed, and the Company will retain the proceeds from the sale of any of the offered shares. A full-text copy of the Form S-1/A is available for free at: http://is.gd/nEtYDg About Mint Leasing Houston, Texas-based The Mint Leasing, Inc., is in the business of leasing automobiles and fleet vehicles throughout the United States. Mint Leasing reported net income of $3.22 million on $6.45 million of total revenues for the year ended Dec. 31, 2013, as compared with a net loss of $238,969 on $9.97 million of total revenues in 2012. The Company's balance sheet at March 31, 2014, showed $18.72 million in total assets, $14.78 million in total liabilities and $3.94 million in total stockholders' equity. Bankruptcy Warning "We do not currently have any commitments of additional capital from third parties or from our sole officer and director or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we choose to raise additional capital through the sale of debt or equity securities, such sales may cause substantial dilution to our existing shareholders and/or trigger the anti- dilution protection of the Warrants. If we are not able to obtain additional funding to repay the Amended Loan and our other outstanding notes payable and debt facilities, we may be forced to abandon or curtail our business plan, which may cause any investment in the Company to become worthless. Our independent auditor has expressed substantial doubt regarding our ability to continue as a going concern. If we are unable to continue as a going concern, we may be forced to file for bankruptcy protection, may be forced to cease our filings with the Securities and Exchange Commission, and the value of our securities may decline in value or become worthless," the Company said in the 2013 Annual Report. MOMENTIVE PERFORMANCE: Restructuring Deal Fails to Win Approval --------------------------------------------------------------- Tom Corrigan, writing for Daily Bankruptcy Review, reported that a bankruptcy judge has refused to approve a heavily contested agreement between Momentive Performance Materials Inc. and a group of bondholders that would have allowed the company to slash $3 billion in debt from its books. Law360 previously reported that the U.S. Trustee assigned to the Chapter 11 case of private equity-backed Momentive Performance Materials Inc. said the company will revise the disclosure statement explaining its reorganization plan following the government watchdog's complaint that the outline failed to address crucial parts of the plan. According to Law360, U.S. Trustee William K. Harrington said in court papers that the disclosure statement, sent to creditors before they vote on the plan, does not contain enough information surrounding treatment of certain groups of noteholders or the company's equity percentages following a $600 million rights offering. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that holders of senior secured notes also objected to Momentive Performance's disclosure statement, complaining that the disclosure statement fails to provide them with ?prospectus-level disclosure? concerning the new debt necessary to make an informed decision on whether to accept or reject, the ?1.5-lien? indenture trustee Wilmington Trust NA said in court papers. The first-lien indenture trustee joined Wilmington Trust's objection, raising additional issues about the disclosure statement, Mr. Rochelle said. Momentive's $635 million in 9 percent second-lien notes due in 2021 last traded at 11:06 a.m. on June 13 for 76.65 cents on the dollar, the Bloomberg report said, citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Debtors said that the restructuring will eliminate $3 billion in debt. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. The U.S. Trustee for Region 2 appointed seven members to serve on the Official Committee of Unsecured Creditors of the Debtors' cases. MONTANA ELECTRIC: Harper Hofer Confirmed as Valuation Expert ------------------------------------------------------------ The Bankruptcy Court entered an order confirming and updating prior orders authorizing the employment of Harper Lutz Zuber Hofer and Associates as valuation expert in the Chapter 11 case of Southern Montana Electric Generation and Transmission Cooperative, Inc. The Debtor's motion was made out of precaution, and the Debtor wished to give notice that the firm has changed from Harper, Lutz, Zuber, Hofer and Associates, LLC, to Harper Hofer and Associates, LLC, that the billing rates of the engaged professionals have changed, and that they remain engaged for the Debtor on valuation matters. The firm was initiall hired by Lee A. Freeman, the then Chapter 11 trustee of the Debtor's estate. MOTORCAR PARTS: Swings to $107 Million Net Income in Fiscal 2014 ---------------------------------------------------------------- Motorcar Parts of America, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $107.35 million on $258.66 million of net sales for the year ended March 31, 2014, as compared with a net loss of $91.51 million on $213.15 million of net sales for the year ended March 31, 2013. For the three months ended March 31, 2014, the Company reported net income of $3.06 million on $76.68 million of net sales as compared with a net loss of $73.65 million on $58.04 million of net sales for the same period last year. The Company's balance sheet at March 31, 2014, showed $318.85 million in total assets, $209.21 million in total liabilities and $109.63 million in total shareholders' equity. "We anticipate our solid growth will continue on a year-over-year basis, supported by an aging vehicle population, new product introductions and further opportunities for manufacturing and distribution leverage. I appreciate our team's efforts in accomplishing industry-leading customer service levels, and their dedicated focus on excellence," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America. Ernst & Young LLP, in Los Angeles, California, did not issue a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. In their report on the consolidated financial statements for the year ended March 31, 2013, Ernst & Young noted that the Company's wholly owned subsidiary Fenwick Automotive Products Limited has recurring operating losses since the date of acquisition and has a working capital and an equity deficiency. "In addition, Fenco has not complied with certain covenants of its loan agreements with its bank. These conditions relating to Fenco coupled with the significance of Fenco to the Consolidated Companies, raise substantial doubt about the Consolidated Companies' ability to continue as a going concern." A full-text copy of the Form 10-K is available for free at: http://is.gd/OACOph On June 12, 2014, Motorcar Parts of America entered into a first amendment to the amended and restated financing agreement with a syndicate of lenders, Cerberus Business Finance, LLC, as collateral agent, and PNC Bank, National Association, as administrative agent, pursuant to which (i) the commitments to make revolving loans under the amended and restated financing agreement were increased by $10,000,000 to $40,000,000 and (ii) the maximum amount of capital expenditures was increased to $3,200,000 for fiscal year 2014, $7,000,000 for fiscal year 2015, and $4,000,000 for each of fiscal years 2016 and 2017. The maximum amount of capital expenditures for fiscal year 2018 remains at $2,500,000. On June 12, 2014, the Company and Selwyn Joffe, the Chairman, president and chief executive officer of the Company, entered into Amendment No. 1 to the employment agreement dated May 18, 2012, between the Company and Mr. Joffe pursuant to which, effective as of July 1, 2014, (i) the last day of Mr. Joffe's term of employment was changed from Aug. 31, 2015, to July 1, 2019, and (ii) his base salary was increased from $600,000 per year to $700,000 per year. All other terms and conditions of the Employment Agreement remain the same. The Employment Agreement Amendment was approved by the Board of Directors of the Company following the earlier review of the proposed terms of the Employment Agreement Amendment by the Compensation Committee of the Board and the recommendation of the Compensation Committee that the Company enter into the Employment Agreement Amendment. The Board approved the terms of the Employment Agreement Amendment after a process pursuant to which it evaluated Mr. Joffe's performance, his value to the Company and appropriate market comparables. In doing so, the Compensation Committee utilized the services of Towers Watson, an independent compensation consulting firm. About Motorcar Parts Torrance, California-based Motorcar Parts of America, Inc. (Nasdaq: MPAA) is a remanufacturer of alternators and starters utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. Motorcar Parts of America's products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with remanufacturing facilities located in California, Mexico and Malaysia, and administrative offices located in California, Tennessee, Mexico, Singapore and Malaysia. * * * This concludes the Troubled Company Reporter's coverage of Motorcar Parts until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. NETBANK INC: Asks High Court To Review FDIC Tax Refund Dispute -------------------------------------------------------------- Law360 reported that bankrupt Internet banking pioneer NetBank Inc. asked the U.S. Supreme Court to reverse an Eleventh Circuit ruling that forwarded a $5.7 million tax refund to the Federal Deposit Insurance Corp. instead of NetBank, arguing a tax-sharing agreement between the company and its subsidiary did not establish an agency relationship between them. According to the report, the last-ditch appeal effort came after the Eleventh Circuit reversed a Florida district court's award of the tax refund to NetBank and its subsidiary NetBank FSB as a part of its bankruptcy estate, finding the court erred in its ruling that the tax-sharing agreement created a debtor-creditor relationship and not an agency relationship. The case is Clifford Zucker as Liquidating Supervisor for Netbank Inc. v. Federal Deposit Insurance Corp. in its Capacity as Receiver of Netbank FSB, case number 13-1480, in the U.S. Supreme Court. About NetBank Inc. Headquartered in Jacksonville, Florida, NetBank Inc. -- http://www.netbank.com/-- is a financial holding company of Netbank, the United States' oldest Internet bank serving retail and business customers in all 50 states. NetBank Inc. did retail banking, mortgage banking, business finance, and provided ATM and merchant processing services. The Company filed for chapter 11 protection (Bankr. M.D. Fla. Case No. 07-04295) on Sept. 28, 2007. Alan M. Weiss, Esq., at Holland & Knight LLP, represents the Debtor. Rogers Towers, Esq. at Kilpatrick Stockton LLP, represents the Official Committee of Unsecured Creditors. Clifford Zucker serves as the Liquidating Supervisor for NetBank under the terms of a Second Amended Liquidating Plan confirmed in Sept. 2008, and is represented by Michael D. Langford, Esq., and Shane G. Ramsey, Esq., at Kilpatrick Stockton LLP in Atlanta, Ga. As of Sept. 25, 2007, the Debtor reported total assets of $87,213,942 and total debts of $42,245,857. As of August 31, 2008, NetBank, Inc., had total assets of $13,807,207 and total liabilities of $34,607,868. MSR HOTELS: Subsidiary Settles $59M Five Mile Dispute ----------------------------------------------------- Law360 reported that an MSR Resort Golf Course LLC subsidiary announced a $337,000 settlement with alternative investment fund Five Mile Capital Partners LLC, which fought MSR throughout its bankruptcy in an effort to collect $58.7 million it claimed it was owed. According to the report, the deal brings to a close a lengthy fight between Five Mile and the MSR estate, which spanned several years and two separate bankruptcies. Bill Rochelle, the bankruptcy columnist for Bloomberg News, also reported that the bankruptcy of the four resorts previously owned by Paulson & Co. and Winthrop Realty Trust is finally over, 16 months after a U.S. bankruptcy judge in Manhattan signed his name to a confirmation order approving the Chapter 11 reorganization plan. According to the Bloomberg report, a mediator from the U.S. Court of Appeal brought home a settlement where a Singapore investment fund will pay Five Mile $337,000. The settlement comes to bankruptcy court for approval at a hearing on July 1, Mr. Rochelle said. About MSR Hotels MSR Hotels & Resorts, Inc., returned to Chapter 11 by filing a voluntary bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11512) on May 8, 2013 in Manhattan, to thwart a lawsuit by lender Five Mile Capital Partners, which claims it is owed tens of millions of dollars related to the sale of several luxury resorts in a prior bankruptcy. MSR Hotels also seeks to sell its remaining assets and wind down. Paul M. Basta, Esq., at Kirkland & Ellis, LLP, represents the 2013 Debtor. MSR Hotels owned a portfolio of eight luxury hotels with over 5,500 guest rooms. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the January 2011 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. Then known as MSR Resort Golf Course LLC, the company and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the 2011 filings were Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. In the 2011 petitions, the five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010. In its 2011 schedules, MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. In the 2011 bankruptcy, James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, served as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., acted as the Debtors' financial advisor. Kurtzman Carson Consultants LLC acted as the Debtors' claims agent. The Official Committee of Unsecured Creditors in the 2011 case was represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. In March 2012, the Debtors won Court approval to sell the Doral Golf Resort to Trump Endeavor 12 LLC, an affiliate of Donald Trump's Trump Organization LLC, for $150 million. An auction was held in February that year but no other bids were received. The 2011 Debtors won approval of a bankruptcy-exit plan that was predicated on the sale of the remaining four resorts by the Government of Singapore Investment Corp. -- the world's eighth- largest sovereign wealth fund, according to the Sovereign Wealth Fund Institute -- for $1.5 billion. U.S. Bankruptcy Judge Sean Lane, who oversaw the 2011 cases, overruled Plan objections by the U.S. Internal Revenue Service and investor Five Mile. The IRS and Five Mile alleged that the sale created a tax liability of as much as $331 million that may not be paid. That Plan was declared effective on Feb. 28, 2013. On April 9, 2013, Five Mile sued Paulson & Co. executives and MSR Hotels in New York state court, alleging they (i) mishandled the company's intellectual property and other assets in a bankruptcy sale, and failed to get the best price for the assets, and (ii) owe Five Mile $58.7 million on a loan. According to a Reuters report, Five Mile seeks $58.7 million representing sums owed, including interest and costs, plus at least $100 million for breach of fiduciary duty, gross negligence and corporate waste. The 2013 Debtor has two critical court dates: a Jan. 30, 2014 auction to locate the best bid for trademarks not sold in the prior bankruptcy; and a Feb. 6 hearing to approval a Chapter 11 plan. In the 2013 case, MSR Hotels originally listed assets of $785,000 and liabilities totaling $59.2 million. Debt at that time included $59.1 million owing to Midland, a secured creditor in the five resorts' bankruptcy. Midland has a lien on the three resorts' trademarks. Other than the trademarks, MSR Hotels' other assets were listed as being $150,000 in unrestricted cash. The company has no operations. Revenue in 2012 was $32,500, according to a court filing. NEW ENTERPRISE STONE: Moody's Affirms 'Caa1' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service revised the rating outlook for New Enterprise Stone & Lime Co., Inc. ("New Enterprise") to stable from negative and affirmed its existing ratings, including the Caa1 Corporate Family Rating and the Caa1-PD Probability of Default Rating. At the same time Moody's assigned a Speculative Grade Liquidity assessment of SGL-3. The following ratings actions were taken: Caa1 Corporate Family Rating, affirmed Caa1-PD Probability of Default, affirmed Caa3, LGD5 on senior unsecured notes, affirmed Caa1, LGD3 on senior secured cash-pay and PIK Notes, affirmed Speculative Grade Liquidity Assessment of SGL-3, assigned Rating outlook revised to stable from negative Ratings Rationale The change in outlook to stable from negative reflects Moody's expectation that New Enterprise's operating performance will improve, first from the company's cost savings and operating efficiency plan that was implemented during fiscal year 2014, and second from revenue expected to be generated from the passing of Pennsylvania's transportation bill which provides an additional $1.65 billion per year (by 2017) specifically toward highways and bridges. The combination should translate into improved EBIT and margins as the construction season progresses. The Caa1 Corporate Family Rating reflects the company's modest scale, seasonality of its business, limited geographic diversification, concentration of business with Pennsylvania DOT, very high financial leverage and low operating margins. The rating, however, is supported by the company's adequate liquidity, strong position in core markets, a slow and modest recovery in construction spending, multi-generational family stewardship, and prudent acquisition and growth strategy. As of fiscal year end 2014, adjusted debt to EBITDA declined to 14.3x from 15.8x at fiscal year end 2013, and EBIT to interest expense increased to -0.1x from -0.2x. Adjusted operating margin for the same period improved to -0.7% from -2.3%. Moody's expect, through EBIT expansion, financial leverage to decline, interest coverage to increase modestly, and operating margin to turn positive during fiscal year 2015. New Enterprise's SGL-3 reflects an adequate liquidity position. The company's liquidity is supported by its limited cash balances, and high working capital needs, reliance on its new $105 million ABL revolving credit facility and limited alternate liquidity sources as all assets are fully encumbered. At February 28, 2014, the company had $24 million of unrestricted cash balance and had approximately $37 million available under its ABL credit facility net of $22.4 million drawn. Upward momentum in on the ratings would result from material de- levering as evidenced by adjusted debt-to-EBITDA consistently below 6.0x, and EBIT-to-interest exceeding 1.5x combined with improved profitability. Building additional geographic diversity, scale, and customer diversity would also improve the company's credit risk profile. The rating would likely be downgraded if the company continues to experience declining profitability, if adjusted debt-to-EBITDA leverage continues to exceed 9x for an extended period of time, or if liquidity and coverage metrics deteriorate further. The principal methodology used in this rating was the Global Building Materials Industry published in July 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. New Enterprise Stone & Lime, Co., Inc. ("New Enterprise") is a privately held, vertically-integrated construction materials supplier, heavy/highway construction contractor, and traffic safety services and equipment provider. The company operates 57 quarries and sand deposits, 30 hot mix asphalt plants, 17 fixed and portable ready mixed concrete plants, three concrete production plants, three lime distribution centers, six construction supply centers, and in its traffic safety equipment segment - five manufacturing facilities and a national network of sales offices. New Enterprise's operations are primarily concentrated in Pennsylvania and Western New York, with reach into the adjacent states including Maryland, West Virginia, and Virginia. New Enterprise's traffic safety services and equipment business sell products nationally and sells services primarily in the eastern United States. In fiscal year 2014 ending February 28, 2014, the company generated $682 million in revenues and $50 million in adjusted EBITDA. NEWLEAD HOLDINGS: Completes $44.8-Mil. Balance Sheet Program ------------------------------------------------------------ NewLead Holdings Ltd. on June 18 disclosed that the Company completed the $44.8 million balance sheet program with Magna Group Partners Limited and Hanover Holdings I, LLC. Through this program NewLead enhanced its balance sheet by $44.8 million by settling past-due indebtedness. The program allowed NewLead to complete the acquisition of one newbuilding eco-type 35,000 dwt dry bulk Handysize vessel, expected to be delivered to NewLead's fleet between July and August 2014, a coal wash plant in Kentucky, USA, and access to develop the Five Mile mine, that includes a CSX rail load facility, the Andy Rail Terminal, in Kentucky, USA, as well as clearing the way to acquire the title to such mine. It is expected that by the end of 2014, title to the Five Mile mine will be transferred to NewLead. Mr. Michael Zolotas, Chairman and Chief Executive Officer of NewLead, stated: "We are delighted to have completed this program in less than six months while contributing accretive debt-free assets to the Company. This program allowed us to develop a vertically integrated shipping and commodity company. NewLead is ready to move forward with an enhanced balance sheet and accretive assets." 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 reported a net loss of $158.22 million on $7.34 million of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $403.92 million on $8.92 million of operating revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed $151.33 million in total assets, $292.68 million in total liabilities and a $141.34 million total shareholders' deficit. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a net loss, negative operating cash flows, a working capital deficiency, and shareholders' deficiency and has defaulted under its credit facility agreements. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. NEXTAG INC: Moody's Lowers Probability of Default Rating to Ca-PD ----------------------------------------------------------------- Moody's Investors Service downgraded NexTag Inc.'s Probability of Default Rating to Ca-PD/LD from Caa2-PD, its Corporate Family Rating to Ca from Caa2 and the rating for its first lien senior secured credit facilities to Ca from Caa2. The downgrade reflects the company's recent debt-for-equity exchange of the majority of the $68 million 1st lien term loan and $25 million revolving credit facility. Ratings Rationale Moody's views this transaction as a distressed exchange. The "/LD" indicator signifies that the distressed exchange qualifies as a limited default under Moody's definition of default, which is intended to capture events whereby issuers fail to meet debt service obligations outlined in their original debt agreements. Moody's does not rate the debt in the company's new capital structure. All existing ratings will be withdrawn in three business days. Moody's has downgraded the following ratings: Corporate Family Rating to Ca from Caa2 Probability of Default Rating to Ca-PD/LD from Caa2-PD $25 million first lien senior secured revolver due 2016 to Ca (LGD3-48%) from Caa2 (LGD3-47%) $68 million first lien senior secured term loan due 2016 to Ca (LGD3-48%) from Caa2 (LGD3-47%) The rating outlook is stable. Headquartered in San Mateo, California, NexTag is an e-commerce retail/merchant aggregator and comparison shopping provider. The company reported approximately $154 million in revenue for the twelve months ended September 2013. NORTH LAS VEGAS: Moody's Affirms Ba3 Gen. Limited Tax Bond Rating ----------------------------------------------------------------- Moody's Investors Service has affirmed the City of North Las Vegas, Nevada's Ba3 general obligation limited tax (GOLT) bond rating. The rating outlook has been revised to stable from negative. This rating action affects approximately $413 million of outstanding rated debt secured by the city's GOLT pledge. The bonds are ultimately secured by the city's full faith and credit pledge, subject to Nevada's statutory and constitutional limitations on overlapping levy rates for ad valorem taxes. Approximately two-thirds of outstanding GOLT debt is additionally secured, and fully supported, by resources of the city's water and sewer utility. The remainder is additionally secured by tax revenues from operating funds. Summary Rating Rationale The affirmation of North Las Vegas' Ba3 GOLT rating reflects an adopted budget for FY2015 that includes significant expenditure savings with only modest declines to operating funds' reserves. General operations remain reliant on uncommonly large transfers from the water and sewer utility to support critical services. Additionally, the city has a high level of debt and substantial pension liabilities that limit its operating flexibility. Also, management will negotiate new collective bargaining agreements with public safety and general employees' unions over the next two years and, although still unknown, contracted provisions could pressure future operating costs. The stable outlook reflects management's continued ability to implement significant cost adjustments, and the city benefits from a recovering tax base and regional economy that is driving a rebound in operating taxes. Importantly, management recently secured favorable, discounted settlements with union groups that resolved outstanding litigation and provided savings which relieved some near-term expenditure pressures. Nevertheless, Moody's maintain expectations that the city's financial position will remain challenged over the near to medium terms, and outsized transfers from the water and sewer utility will be required to support general operations. Strengths -- Large judgment successfully settled with union groups at a significant discount to the city -- Balanced budget adopted city-wide for FY2015 driven by labor concessions, legal settlements, and expense cuts -- Participation in the greater Las Vegas (Aa2 stable) metro economy -- Modest economic recovery benefitting consolidated excise taxes (CTax) and property taxes -- Still large tax base showing signs of recovery following substantial declines Challenges -- Continued reliance on large subsidies from water and sewer utility to support general operations -- Limited financial flexibility given moderate fixed costs burden driven by pensions and debt service -- Uncertain negotiations with union groups over the next two years for new collective bargaining agreements What Could Change The Rating Up -- Restoration of structural fiscal balance with sustainable improvement in reserves and liquidity -- Substitution of outsized subsidies from the water and sewer utility that support general operations -- Adoption of multi-year collective bargaining agreements without significant cost pressures to the city What Could Change The Rating Down -- Deterioration of the city's already narrow financial position -- Declines in available liquidity from water and sewer utility -- Cyclical downturn that significantly impacts tax revenues and tax base values -- Adoption of multi-year collective bargaining agreements that add significant cost pressures to the city The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. NPC INTERNATIONAL: Moody's Affirms 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed NPC International, Inc.'s B2 Corporate Family Rating and B2-PD Probability of Default Rating following the company's June 13, 2014 announcement that it entered into an agreement to acquire 56 Wendy's restaurant units for $58.2 million plus amounts for working capital. Concurrently, Moody's downgraded the company's senior secured credit facilities to B1 from Ba3 to reflect a proposed increase in senior debt in the capital structure as per Moody's Loss Given Default Methodology. The ratings outlook is stable. The acquisition will be funded with proceeds from a $40 million secured term loan increase, borrowing under the company's $110 million revolver, and cash on hand. Subsequent to closing, the company plans to monetize certain fee-owned properties in a sale/leaseback or other transactions. Potential proceeds will likely be used to repay revolver borrowings. As of April 1, 2014, NPC had $7.4 million of cash on the balance sheet and $91.7 million available to draw under its $110 million revolving credit facility. Ratings downgraded First lien senior secured revolving credit facility due 2017 to B1 (LGD3) from Ba3 (LGD3) First lien senior secured term loan due 2018, to be upsized by $40 million, to B1 (LGD3) from Ba3 (LGD3) Ratings affirmed Corporate Family Rating at B2 Probability of Default Rating at B2-PD Senior unsecured notes due 2020 at Caa1 (LGD5) Speculative Grade Liquidity Rating at SGL-2 Ratings Rationale The downgrade of the company's senior secured credit facilities reflects the $40 million term loan increase, which weakens the position of senior secured instruments relative to more junior claims in the capital structure under Moody's Loss Given Default (LGD) methodology. The affirmation of the B2 CFR reflects the strategic benefits of the acquisition, which will increase the scale and geographic reach of NPC's Wendy's restaurant business. Upon completion of the transaction, NPC will own 146 Wendy's restaurants in five states, with total revenues estimated to be around 15% of NPC's total consolidated revenue. With the incremental debt from the transaction, pro forma lease-adjusted debt/EBITDAR will increase only modestly, to over 5.5 times from about 5.4 times as of April 1, 2014, before consideration of any asset sale proceeds. While NPC has a demonstrated ability to integrate past acquisitions, the Wendy's platform is still fairly new to the company (NPC's first Wendy's unit acquisition -- 24 units -- occurred in July 2013), bringing a different set of challenges and, potentially, a learning curve related to running a new brand and product type. Moody's will continue to monitor the impact this will have on NPC's ability to improve its core Pizza Hut performance, where brand challenges have led to persistently- negative same-store sales, recently compounded by significant ingredient cost inflation. Same-store sales declined (4.7%) in the quarter ended April 1, 2014, rolling over a decrease of (2.2)% last year. Adjusted EBITDA declined 25%. Lease-adjusted EBITDA rose to 5.4 times from 5.2 times at the end of 2013. NPC's liquidity is expected to remain good, as reflected in its SGL-2 Speculative Grade Liquidity rating. Cash, cash flow and ample excess revolver availability are expected to cover basic working capital needs including capital expenditures and mandatory debt amortization for the next twelve months. As part of the acquisition agreement, NPC plans to remodel certain acquired restaurants in Wendy's new Image Activation format. Moody's expect a modest increase in capital spending associated with these units over the next 12-18 months. While cushion under financial covenants is currently ample, an inability to stabilize EBITDA declines, when coupled with contractual covenant tightening at the end of the year, could cause significant erosion in this cushion. The stable outlook reflects Moody's expectation that NPC will maintain good liquidity as it implements a strategy to improve performance of its core Pizza Hut operation in the second half of 2014. Ratings could be downgraded if operating performance were to deteriorate such that debt/EBITDA increased above 6.0 times on a sustained basis. Any deterioration in liquidity, particularly if covenant cushion tightens more than expected, could also lead to downward ratings pressure. While unlikely over the near term due to the weak performance trend, ratings could be upgraded if operating performance and debt protection measures sustainably improve, driven by profitable same store sales and new unit growth. Quantitatively, an upgrade would require debt to EBITDA to decline near 4.5 times and EBITA to interest to exceed 2.0 times. The principal methodology used in this rating was the Global Restaurant Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. NPC International, Inc. ("NPC") is the world's largest Pizza Hut franchisee, currently operating 1,261 Pizza Hut restaurants and delivery units in 28 states and 90 Wendy's units in three states. Annual revenues are approximately $1.1 billion. NPC was acquired by Olympus Partners ("Olympus") in December 2011. OVERSEAS SHIPHOLDING: Confirmation Hearing Begins July 18 --------------------------------------------------------- Overseas Shipholding Group, Inc., and 180 affiliates on June 4, 2014, filed with the Bankruptcy Court their first amended disclosure statement with respect to their joint plan of reorganization. After a careful consideration of their business and prospects as a going concern, Overseas Shipholding concluded that recoveries to creditors and shareholders will be maximized by implementing the plan. The company will continue to operate as an integrated enterprise on the plan effective date. The Bankruptcy Court has approved the explanatory disclosure statement in May. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. The Court has directed that objections to confirmation of the plan should be filed by July 11, 2014. The key components of the plan include: (a) All allowed administrative claims, priority tax claims, other priority claims, secured vessel dip claims, secured vessel claims, other secured claims, credit agreement claims, and other unsecured claims on the effective date of the plan are unimpaired; (b) Retention of CEXIM vessels and DSF vessels and payment in full of the CEXIM claims and the DSF claims plus interest at 50% of the default rate under the CEXIM and DSF loan agreements; (c) Payment of an 8.75% debentures claims in full in cash, including any applicable contractual interest, the reinstatement of the 8.125% notes, including payment of any applicable contractual or default interest, and the reinstatement of the 7.500% notes, including payment of any applicable contractual interest, or exchange of such notes to those holders that make a timely election, for election notes, which mature on February 15, 2021 and provide for cash equal to 1% of the aggregate principal amount of the 7.500% notes held by each electing noteholder. Electing noteholders will also receive accrued but unpaid interest from the last coupon payment date through the effective date; (d) Entry into an exit financing on the effective date, consisting of two term loan facilities with an aggregate principal amount of $1.2 billion and two revolving loan facilities with $150 million in aggregate availability that will provide the funding necessary to both satisfy the plan's cash payment obligations and the expenses associated with closing the exit financing facilities, and to finance ongoing operations and capital needs following the emergence from Chapter 11; (e) Personal injury claims, including numerous asbestos claims, that have not otherwise been disallowed and expunged, will be unimpaired and may be asserted against Overseas Shipholding subject to rights and defenses; (f) Admiralty lien claims that have not otherwise been disallowed and expunged will be unimpaired and may be asserted against Overseas Shipholding subject to rights and defenses; (g) A rights offering for $1,510 million to all equity interestholders severally supported by certain backstop commitment parties, each of whom has agreed to purchase its proportionate share of the remaining rights offering securities related to any unexercised subscription rights and further agreed to simultaneously purchase its proportionate share of a further $447 million of plan securities; (h) Each holder of an allowed class E1 claim (other than claim 1547 or any other subordinated class plaintiff claim) that does not opt out of the releases described in the plan will receive cash equal to the amount of its allowed class E1 claim subject to the disputed claims reserve for class E1. Claim 1547 will be allowed and claimants will receive at least $15 million, payment of which will be staggered; (i) Holders of old Overseas Shipholding equity interests are entitled to purchase 12 class A new securities at the price of $3.00 per security. If holders choose not to exercise their subscription rights, each holder will receive for each old equity interest one class B new security; (j) By June 3, 2014, all trading of old equity will be disregarded; and (k) Intercompany claims are unimpaired and will be reinstated or discharged and satisfied. About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. OVERSEAS SHIPHOLDING: Asks Court to Extend Exclusive Periods ------------------------------------------------------------ Overseas Shipholding Group, Inc., and 180 affiliates ask the Bankruptcy Court to extend the exclusive period to solicit votes on a plan of reorganization to July 14, 2014. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, relates that Overseas Shipholding is poised to confirm its reorganization plan, which generally provides for the payment of all allowed unsecured claims in full, the reinstatement of certain unsecured notes, and a substantial return to holders of common stock. The plan represents the culmination of months of work to ensure the highest possible value for stakeholders. On May 28, 2014, the Court set forth the procedures that govern the solicitation of votes on plan, which is currently underway. Creditors and interest holders have until July 7, 2014, to return completed ballots and rights offering solicitation materials. However, the exclusive solicitation period currently expires on June 30, 2014. Overseas Shipholding request a final extension of the exclusive solicitation period by two weeks to allow the solicitation of votes on the plan to continue uninterrupted. Mr. Butz point out that if extension is not granted, it would only serve to distract Overseas Shipholding and their professionals and sow potential confusion among creditors and stakeholders at the most crucial phase of these cases. Overseas Shipholding is represented by: James L. Bromley, Esq. Luke A. Barefoot, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, NY 10006 Telephone: (212) 225-2000 Facsimile: (212) 225-3999 - and - Derek C. Abbott, Esq. Daniel B. Butz, Esq. William M. Alleman, Jr. , Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street P.O. Box 1347 Wilmington, DE 19801 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. * * * In May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. The Court has directed that objections to confirmation of the plan should be filed by July 11, 2014. OVERSEAS SHIPHOLDING: Wants to Amend Collective Bargaining Deals ---------------------------------------------------------------- Overseas Shipholding Group, Inc., and 180 affiliates seek the Bankruptcy Court's authority to: (a) enter into an amendment to the January 4, 2012 memorandum of understanding modifying the collective bargaining agreement with the District No. 1 - Pacific Coast District, Marine Engineers Union; and (b) assume and perform their obligations under the MEBA CBA, as amended. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, tells the Court that the transportation of oil and petroleum products via U.S. Flag and Jones Actcertified tankers is one of Overseas Shipholding's principal business segments and key sources of revenue. In 2013, U.S. Flag tanker operations produced $275 million in gross revenue. Mr. Butz explains that as Overseas Shipholding continue to prepare for emergence from bankruptcy proceedings, their ability to maintain the efficient and profitable operation of their U.S. Flag tanker fleet is essential to their successful reorganization. This in turn depends on their ability to attract and retain first-rate marine engineers, whose role in operating and maintaining tanker propulsion and support systems is indispensable. While Overseas Shipholding and MEBA, which represents the engineers aboard their fleet of 14 U.S. Flag tankers, have historically been able to work together to attract and retain topflight tanker engineers, recent industry trends have created certain hiring and retention challenges with respect to these engineers. Mr. Butz notes that compensation for engineers is lower on tankers than on other forms of vessel, such as container ships. Also, in spite of the lower pay engineers receive for their work on tankers, additional licensing is necessary for engineers to work on tankers. Additionally, MEBA recently acquired exclusive work contracts on eight government-owned "roll-on/roll-off" vessels, vessels that provide vehicular access via built-in ramps, thus increasing industry competition for the already-limited pool of MEBA engineers. For these reasons, Overseas Shipholding have determined that it is in their best interests to improve their ability to attract tanker engineers by providing MEBA tanker engineers with an annual pension contribution, which will be calculated for each MEBA Engineer as 50% of the amount currently contributed to his or her MEBA-provided pension plan. Mr. Butz point out that the practical effect of the pension contribution will be to reduce the amount of pension plan contributions that each MEBA Engineer is responsible for, thus effecting a net increase in these engineers' take-home wages. The pension contribution will entail a cost of $179 per tanker per day, or an annual cost of $900,000. In exchange for the pension contribution, MEBA has committed to fill open tanker engineer positions. Mr. Butz maintains that in exchange for a modest payment, Overseas Shipholding will reaffirm their ability to fill U.S. Flag tanker engineer positions with top-grade engineers, ensuring that they can maintain the high caliber of engineer service that has been crucial to their past success in the U.S. Flag and Jones Act business segments and bolstering their prospects for a successful emergence. About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. * * * In May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. The Court has directed that objections to confirmation of the plan should be filed by July 11, 2014. OVERSEAS SHIPHOLDING: Ask Court to Clarify Discovery Limits ----------------------------------------------------------- Overseas Shipholding Group, Inc., and its affiliates ask the Bankruptcy Court to issue a protective order pursuant to the procedures for confirmation of their first amended plan of reorganization. Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, relates that some parties have asserted an entitlement to interest on interest under two series of outstanding notes, and have served broad-ranging document and deposition discovery on Overseas Shipholding, seeking documents over the past 20 years. The parties believe that the governing documents are unambiguous and the amount at issue is $2.3 million. Overseas Shipholding specifically ask the Court to rule that no document or deposition discovery could be taken unless the Court makes a threshold determination as to whether any ambiguity requires resort to extrinsic evidence. Mr. Abbott says that, with the requested ruling, the issue may be mooted or the parties will resolve the dispute or make appropriate reserves to permit discovery to continue post-confirmation of the plan, while conserving estate resources. Mr. Abbott notes that the discovery is for a claims allowance dispute and not a plan confirmation dispute. The present dispute concerns the anticipated confirmation objections of three parties: (a) Bank of New York Mellon Trust Company, indenture trustee under an indenture dated as of December 1, 1993 in respect of 8.75% notes due 2013; (b) Wilmington Trust Company, indenture trustee under an indenture dated as of March 7, 2003 in respect of 7.5% notes due 2024; and (c) the official committee of unsecured creditors. Overseas Shipholding do not believe that holders of the notes are entitled to interest on interest because the indentures provide for payment of interest on interest following an acceleration of default only at the rate prescribed in the securities. Overseas Shipholding propose to use confirmation briefing to resolve the interpretation of the notes and their governing documents which all parties agree are unambiguous. At a June 5 meeting, the objecting parties were unwilling to stand down on their requested discovery pending the Court's determination on the documents. About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. * * * In May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. The Court has directed that objections to confirmation of the plan should be filed by July 11, 2014. PANACHE BEVERAGE: Grants 500,000 Shares Options to CEO ------------------------------------------------------ Michael Romer, Panache Beverage, Inc.'s interim president and chief executive officer, was granted three-year options to purchase 500,000 shares of the Company's common stock at $0.15 per share pursuant to the Company's 2012 Non-Qualified Stock Option Plan. The options are exercisable fifty percent immediately, with the balance vesting in equal amounts every six months over a two- year period. The options were granted in connection with his role in the successful conclusion to the transactions associated with the Restructuring Agreement. On June 11, 2014, the Company, certain of its subsidiaries and former officers entered into a restructuring agreement with Consilium Corporate Recovery Master Fund, Ltd (the "Lender"). The Company, its affiliates and subsidiaries had entered into previous loan transactions with Lender, dated Dec. 21, 2012, and May 9, 2013, respectively, as amended to date. As of the date of the Restructuring Agreement, the Company and its affiliates were obligated to Lender under the Previous Loans in the aggregate principal amount of $6,922,212. The Company received written notice from Lender on May 6, 2014 of certain events of defaults under the Previous Loans and subsequently entered into a forbearance agreement with the Lender. In connection with the Restructuring Agreement, in consideration for the cancellation of approximately $1,164,000 principal amount of Obligations, the Shareholders agreed to transfer an aggregate of 16,629,876 shares of the Company's common stock held by those Shareholders to the Lender or its designated assignee. In addition, the Shareholders agreed to the cancellation of warrants to purchase an aggregate 1,200,000 shares of Company common stock held by them. In connection with those transactions, the Lender terminated various stock pledge and security agreements it had entered into with the Shareholders. In addition, the Company granted to directors David Shara and Nicholas Hines similar options to purchase 150,000 shares of the Company's common stock each. A full-text copy of the Form 8-K report is available at: http://is.gd/iH4Dpx About Panache Beverage New York-based Panache Beverage, Inc., specializes in the strategic development and aggressive early growth of spirits brands establishing its assets as viable and attractive acquisition candidates for the major global spirits companies. Panache builds its brands as individual acquisition candidates while continuing to develop its pipeline of new brands into the Panache portfolio. Panache Beverage reported a net loss of $4.58 million in 2013 following a net loss of $3.27 million in 2012. In their report on the consolidated financial statements for the year ended Dec. 31, 2013, Silberstein Ungar, PLLC, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has limited working capital and has incurred losses from operations. Silberstein Ungar also issued a going-concern qualification following the 2012 results. PEREGRINE FINANCIAL: CFTC Rebuked For US Bank Discovery Delay ------------------------------------------------------------- Law360 reported that an Iowa federal judge promptly quashed the U.S. Commodity Futures Trading Commission's bid to delay discovery in its lawsuit against U.S. Bank NA, which the regulator is accusing of aiding a $215 million fraud that took down Peregrine Financial Group Inc. According to the report, the CFTC sought to delay a motion so the court could consider the agency's appeal of an earlier decision granting U.S. Bank's demand that the CFTC be given a deadline to produce discovery, according to Chief Magistrate Judge Jon Stuart Scoles order. The CFTC said that setting the deadline before the district court hears its objections would render its concerns moot, and that U.S. Bank would not be harmed by waiting any longer, the report related. Judge Scoles, however, disagreed, saying he decided to rule on the matter without waiting for U.S. Bank's response, the report further related. The case is U.S. Commodity Futures Trading Commission v. U.S. Bank NA, case number 6:13-cv-02041, in the U.S. District Court for the Northern District of Iowa. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PHYSICIANS UNITED: Declared Insolvent; To be Closed on July 1 ------------------------------------------------------------- Charles Elmore at The Palm Beach Post reports that the state's fastest-growing Medicare Advantage plan has been declared insolvent and ordered liquidated, affecting more than 38,000 customers statewide and 1,347 in Palm Beach County, Florida. Physicians United Plan Inc. (PUP), based in Orlando, will be closed by July 1 under a judge's order, leaving customers concerned, the report says. According to the report, Chris Cate, spokesman for the state's Department of Financial Services said State officials are working with the Centers for Medicare and Medicaid Services to transition customers to another plan or back to original Medicare. The insurer was declared insolvent and ordered liquidated by a judge in Tallahassee on June 9, The Palm Beach Post reports. As recently as February, the report recalls, the company announced it was "proud to be at the top of the list for overall growth for its fourth consecutive year" among Medicare Advantage plans in the state, averaging growth of 30 percent a year, according to the company's website. It expanded from one county in 2005 to 17 counties "with plans to continue expansion through 2016." According to The Palm Beach Post, marketing director Gigi Henry said then, "Four years is great, but we hope to celebrate being the fastest growing Medicare Advantage plan in Florida 10 years from now. And we'll keep working hard to get there." But in April, a state consent order said unless the insurer received a capital infusion of $30 million by June 3, there would be grounds for liquidation, the report notes. The Palm Beach Post notes that the Florida Office of Insurance Regulation found the insurer had assets of $92.5 million and liabilities of $105.3 million, leaving it "clearly insolvent." State officials took issue with its handling of $34.6 million in "risk-sharing receivables" due from medical providers. "PUP's insolvency poses a serious danger to the financial safety" of policyholders and others, Insurance Commissioner Kevin McCarty wrote to Florida Chief Financial Officer Jeff Atwater June 3, the report adds. PLAYA RESORTS: S&P Affirms 'BB-' Rating on Credit Facility ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' issue-level rating and '1' recovery rating on all-inclusive resort owner Playa Hotels & Resorts B.V.'s existing credit facility (consisting of the upsized $50 million revolver due 2018 and the $375 million term loan due 2019). In addition, S&P affirmed the 'B-' issue- level rating and '5' recovery rating on the company's $375 million senior unsecured notes, although recovery prospects for the notes are now at the lower end of the recovery range (10% to 30%) because of additional secured debt in the capital structure. The 'B' corporate credit rating on parent guarantor Playa Hotels & Resorts B.V. is unchanged and the rating outlook is stable. S&P's 'B' corporate credit rating reflects its financial risk assessment of "highly leveraged" and its business risk assessment of "weak." The highly leveraged financial risk assessment is based on S&P's expectation for total debt to EBITDA to be about 8x in 2014 and improve to the mid-6x area in 2015. In addition, S&P expects EBITDA coverage of cash interest expense to be in the low-2x area in 2015, which is good for the highly leveraged assessment. Including an aggregate of $293 million of 10% pay-in-kind (PIK) preferred equity outstanding as of March 2014 that S&P treats as debt-like, total adjusted debt to EBITDA would be in the mid-11x area in 2014 and in the high-9x area in 2015, and EBITDA coverage of total interest and PIK dividends would be in the low-1x area through 2015. Debt-like features of the preferred equity include a maturity date one year after the senior unsecured notes mature in 2020 and a high PIK rate for preferred dividends, which can motivate a company to refinance preferred shares, often with debt. However, the Hyatt preferred equity terms also include Playa's right to require Hyatt to redeem (or at Hyatt's election to convert to common equity) up to $125 million of its $225 million preferred share position with proceeds from a future IPO or other equity raise. In addition, there is a debt incurrence covenant in the bank facility that will restrict Playa's ability to refinance a significant portion of the preferred equity with debt. Also, S&P views the large Hyatt preferred investment in Playa as supportive. The non-cash PIK dividend increases the company's near-term financial flexibility. S&P's rating on Playa reflects its assessment of the company's business risk as "weak," based on limited geographic and business diversity compared with other global leisure companies, high volatility over the lodging cycle, and travel-related event risk in the company's Mexican and Caribbean resort markets. S&P also takes into account the high levels of competition for leisure discretionary spending as well as the integration, renovation, and rebranding risks associated with the acquired resorts (three of which face significant renovations) and the launch of two new Hyatt all-inclusive resort brands. In addition, following the acquisition of the eight all-inclusive resorts from Playa's predecessor, Playa terminated two management contracts starting in mid-2014 at resorts that AMResorts currently manages, and Playa will begin to manage these resorts. These risks are partially offset by an experienced management team and a good position in, and the increasing popularity of, the all-inclusive resort vacation market. Playa's portfolio of 13 all-inclusive resorts also includes the four resorts and a management company purchased in 2013 from BD Real Resorts, and a resort in Jamaica. Notwithstanding the inherent risks involved in the launch of new lodging brands, S&P views favorably Hyatt's large financial investment in Playa, Playa's exclusive right to partner with Hyatt in establishing two new all-inclusive resort brands in five countries in Latin America and the Caribbean, and Playa's future access to Hyatt's distribution system. PLUG POWER: Files Financial Statements of ReliOn with SEC --------------------------------------------------------- Plug Power Inc. amended its current report on Form 8-K originally filed on April 2, 2014. The initial Form 8-K reported that Plug Power, through its wholly-owned subsidiary Emergent Power Inc., completed the acquisition of substantially all of the assets of ReliOn, Inc. The Initial Form 8-K also indicated that the financial statements and pro forma financial information required under the Form 8-K would be filed by amendment to the Initial Form 8-K no later than 71 calendar days after the date the Initial Form 8-K was required to be filed. Accordingly, the Company filed the amendment to include the audited financial statements of ReliOn and the unaudited pro forma condensed combined financial information required pursuant to Rule 3-05 and Article 11 of Regulation S-X in connection with the acquisition of ReliOn. For the year ended Dec. 31, 2013, ReliOn reported a net loss of $7.74 million on $4.58 million of sales. As of Dec. 31, 2013, ReliOn had $14.12 million in total assets, $11.47 million in total liabilities, $91.95 million in total redeemable convertible preferred stock, and a $89.29 million total stockholders' deficit. Copies of the Financial Statements are available at: http://is.gd/lE6aYC http://is.gd/yb39MZ About Plug Power Plug Power Inc. is a provider of alternative energy technology focused on the design, development, commercialization and manufacture of fuel cell systems for the industrial off-road (forklift or material handling) market. Plug Power reported a net loss attributable to common shareholders of $62.79 million on $26.60 million of total revenue for the year ended Dec. 31, 2013, as compared with a net loss attributable to common shareholders of $31.86 million on $26.10 million of total revenue during the prior year. The Company's balance sheet at March 31, 2014, showed $95.20 million in total assets, $46.85 million in total liabilities, $2.37 million in redeemable preferred stock and $45.97 million in total stockholders' equity. Bankruptcy Warning "Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses, growth in inventory to support both shipments of new units and servicing the installed base, funding the growth in our GenKey "turn-key" solution which also includes the installation of our customer's hydrogen infrastructure as well as delivery of the hydrogen molecule, and continued development and expansion of our products. Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and quantity of product orders and shipments; the timing and amount of our operating expenses; the timing and costs of working capital needs; the timing and costs of building a sales base; the timing and costs of developing marketing and distribution channels; the timing and costs of product service requirements; the timing and costs of hiring and training product staff; the extent to which our products gain market acceptance; the timing and costs of product development and introductions; the extent of our ongoing and any new research and development programs; and changes in our strategy or our planned activities. If we are unable to fund our operations, we may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection," the Company said the Report. PWK TIMBERLAND: Plan Outline Hearing Continued to July 10 --------------------------------------------------------- The hearing to consider adequacy of the First Amended Disclosure Statement describing PWK Timberland LLC's Plan has been continued to July 10, 2014 at 10:30 a.m. The previous Disclosure Statement hearing date was June 10, 2014. Among other things, the First Amended Disclosure Statement include more updates on the Debtor's case since it filed for bankruptcy. A copy of the First Amended Disclosure Statement dated April 30, 2014, is available for free at: http://bankrupt.com/misc/PWKTIMBERLAND_1stAmdDS.PDF As reported in the Dec. 11, 2013 edition of The Troubled Company Reporter, PWK Timberland's Plan provides that all allowed claims will be satisfied in full. The Plan contemplates (i) that the unsecured claims of former members are unimpaired; (ii) the Debtor does not believe there are any general unsecured creditors but if there are, they will be paid in full on the Effective Date; and (iii) equity holders agreed to forgo any payments under the plan until all impaired creditors have been paid in according to the terms of the Plan. About PWK Timberland Lake Charles, Louisiana-based PWK Timberland LLC sought Chapter 11 protection (Bankr. W.D. La. Case No. 13-20242) on March 22, 2013. Gerald J. Casey, Esq., serves as counsel to the Debtor. The Debtor disclosed $15,038,448 in assets and $1,792,957 in liabilities as of the Chapter 11 filing. REALOGY HOLDINGS: Extends Securitization Program Until 2015 ----------------------------------------------------------- Realogy Group LLC, an indirect subsidiary of Realogy Holdings Corp., and its subsidiaries extended the existing Apple Ridge Funding LLC securitization program utilized by Realogy Group's relocation services operating unit, Cartus Corporation. The extension was effected pursuant to an amendment to the Note Purchase Agreement dated as of Dec. 14, 2011, by and among Cartus, Realogy Group, the managing agents, committed purchasers and conduit purchasers, and Cr'dit Agricole Corporate and Investment Bank, as administrative agent. The managing agents, committed purchasers or conduit purchasers that are parties to the Note Purchase Agreement are CA-CIB, The Bank of Nova Scotia, Wells Fargo Bank, National Association, Atlantic Asset Securitization LLC, Salisbury Receivables Company LLC, Liberty Street Funding LLC and Barclays Bank PLC. Under the terms of the amended Note Purchase Agreement, the program has been extended until June 12, 2015, subject to extension for an additional period of 364 days from the date that is 90 days prior to the expiration of the then existing term. The maximum borrowing under the facility remains at $325 million, based upon the amount of eligible assets being financed at any given point in time. The parties to the Note Purchase Agreement and their respective affiliates have performed and may in the future perform, various commercial banking, investment banking and other financial advisory services for Realogy Holdings and its subsidiaries for which they have received, and will receive, customary fees and expenses. About Realogy Corp. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services with a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have around 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. Realogy Holdings Corp. and Realogy Group LLC reported a net loss attributable to the Companies of $543 million on $4.67 billion of net revenues for the year ended Dec. 31, 2012. Realogy Holdings and Realogy Group incurred a net loss of $441 million on $4.09 billion of net revenues in 2011, following a net loss of $99 million on $4.09 billion of net revenues for 2010. As of June 30, 2013, the Company had $7.29 billion in total assets, $5.75 billion in total liabilities and $1.54 billion in total equity. Bankruptcy Warning "Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities and from drawings on our revolving credit facilities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness or meet our operating expenses. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements. If we cannot make scheduled payments on our debt, we will be in default and, as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our senior secured credit facility could terminate their commitments to lend us money and foreclose against the assets securing their borrowings; and * we could be forced into bankruptcy or liquidation," the Company said in its annual report for the period ended Dec. 31, 2012. * * * In the Aug. 1, 2013, edition of the TCR, Moody's Investors Service upgraded the corporate family rating of Realogy Group to to B2 from B3. The upgrade to B2 CFR is driven by expectations for ongoing strong financial performance, supported by Realogy's recently-concluded debt and equity financing activities and a continuing recovery in the US existing home sale market. As reported by the TCR on Feb. 18, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Realogy Corp. to 'B+' from 'B'. "The one notch upgrade in the corporate credit rating to 'B+' reflects an increase in our expectation for operating performance at Realogy in 2013, and S&P's expectation that total lease adjusted debt to EBITDA will improve to the low-6x area and funds from operations (FFO) to total adjusted debt will be improve to the high-single-digits percentage area in 2013, mostly due to EBITDA growth in the low- to mid-teens percentage area in 2013," S&P said. RESTORGENEX CORP: Amends Report on Paloma Pharma Acquisition ------------------------------------------------------------ RestorGenex Corporation, on April 2, 2014, filed a current report on Form 8-K to report the acquisition of Paloma Pharmaceuticals, Inc., on March 28, 2014, pursuant to an Agreement and Plan of Merger with Paloma Merger Sub, Inc., Paloma and David Sherris, Ph.D. The Company amended the original report to provide financial statements required by Item 9.01. For the year ended Dec. 31, 2013, Paloma reported a net loss of $714,380 on $0 of revenues and gross margin as compared with a net loss of $622,276 on $0 of revenues and gross margin for the year ended Dec. 31, 2012. As of Dec. 31, 2013, Paloma had $937,876 in total assets, $1.35 million in total liabilities, all current, and a $421,329 total shareholders' deficit. A copy of the Audited Consolidated Financial Statements of Paloma Pharmaceuticals, Inc., as of and for the years ended Dec. 31, 2013, and 2012 and unaudited Financial Statements of Paloma Pharmaceuticals, Inc., as of and for the three months ended March 31, 2014 and 2013, is available for free at: http://is.gd/kP4Afg A copy of the Unaudited Pro Forma Combined Condensed Statements of Income for Paloma Pharmaceuticals is available at: http://is.gd/0x5mmC About RestorGenex RestorGenex Corporation operates as a biopharmaceutical company. It focuses on dermatology, ocular disease, and women's health areas. The company was formerly known as Stratus Media Group, Inc., and changed its name to RestorGenex Corporation in March 2014. RestorGenex Corporation is based in Los Angeles, California. Restorgenex reported a net loss of $2.45 million in 2013 following a net loss of $6.85 million in 2012. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that RestorGenex Corporation has suffered recurring losses and has negative cash flow from operations. These conditions raise substantial doubt as to the ability of RestorGenex Corporation to continue as a going concern. REVEL AC: Atlantic City Casino Files for Bankruptcy Again --------------------------------------------------------- Tom Corrigan, writing for The Wall Street Journal, reported that Atlantic City's Revel resort and casino filed for Chapter 11 protection, its second trip to bankruptcy court in recent years. According to the report, the high-end resort and casino?at 47 stories, the tallest building in Atlantic City, N.J.?listed liabilities of between $500 million and $1 billion in its bankruptcy petition, filed with the U.S. Bankruptcy Court in Camden, N.J. It reported assets in the same range. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. along with four affiliates first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, in Camden, New Jersey, with a prepackaged plan that reduces debt by $1.25 billion. Revel's legal advisor in connection with the restructuring is Kirkland & Ellis LLP. Alvarez & Marsal serves as its restructuring advisor and Moelis & Company serves as its investment banker for the restructuring. Epiq Bankruptcy Solutions is the claims and notice agent. The Official Committee of Unsecured Creditor retained Christopher A. Ward, Esq., Jason Nagi, Esq., and Jarrett Vine, Esq., at Polsinelli PC as counsel. Revel AC Inc. on May 21, 2013, disclosed that it has successfully completed its financial restructuring and emerged from Chapter 11 of the United States Bankruptcy Code. Through the restructuring plan, which has been approved by both the U.S. Bankruptcy Court for the District of New Jersey (Camden) and the New Jersey Casino Control Commission, Revel has reduced its outstanding debt by approximately $1.2 billion, or 82%, and its annual interest expense on a cash basis by $98 million, or 96%. QUALITY DISTRIBUTION: Units to Redeem $22.5-Mil. Senior Notes ------------------------------------------------------------- Quality Distribution, Inc.'s wholly owned subsidiaries, Quality Distribution, LLC, and QD Capital Corporation have issued notice that they will redeem $22.5 million in aggregate principal amount of their 9.875% Second-Priority Senior Notes due 2018 on July 16, 2014. The redemption price for the 2018 Notes will be equal to 100% of the aggregate redemption amount of $22.5 million (plus accrued but unpaid interest up to the Redemption Date) plus a 3.0% premium. Borrowings under QD LLC's existing revolving ABL credit facility or cash on hand will be used to fund the redemption. "This redemption is another successful step towards achieving our previously discussed goal of reducing our higher cost debt, while maintaining strong liquidity," commented Joe Troy, executive vice president and chief financial officer. "Today's announcement reinforces our commitment to reducing leverage with our free cash flow and enhancing shareholder value." About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30 percent of the common stock of Quality Distribution, Inc. Quality Distribution reported a net loss of $42.03 million on $929.81 million of total operating revenues for the year ended Dec. 31, 2013, as compared with net income of $50.07 million on $842.11 million of total operating revenues in 2012. As of March 31, 2014, the Company had $443.15 million in total assets, $494.39 million in total liabilities and a $51.24 million total shareholders' deficit. Bankruptcy Warning The Company had consolidated indebtedness and capital lease obligations, including current maturities, of $383.3 million as of Dec. 31, 2013. The Company must make regular payments under the ABL Facility, including the $17.5 million senior secured term loan facility that was fully funded on July 15, 2013, and the Company's capital leases and semi-annual interest payments under its 2018 Notes. "The ABL Facility matures August 2016. Obligations under the Term Loan mature on June 14, 2016 or the earlier date on which the ABL Facility terminates. The maturity date of the ABL Facility, including the Term Loan, may be accelerated if we default on our obligations. If the maturity of the ABL Facility and/or such other debt is accelerated, we may not have sufficient cash on hand to repay the ABL Facility and/or such other debt or be able to refinance the ABL Facility and/or such other debt on acceptable terms, or at all. The failure to repay or refinance the ABL Facility and/or such other debt at maturity would have a material adverse effect on our business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of us and/or our subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm our relationships with our customers, suppliers and independent affiliates," the Company said in the Annual Report for the year ended Dec. 31, 2013. * * * As reported in the TCR on June 28, 2013, Moody's Investors Service upgraded Quality Distribution, LLC's Corporate Family Rating to B2 from B3 and Probability of Default Rating to B2-PD from B3-PD. The upgrade of Quality's CFR to B2 was largely driven by the expectation that credit metrics will improve over the next twelve to eighteen months, through a combination of EBITDA growth and debt paydowns, to levels consistent with the B2 rating level. The company is in the process of integrating the bolt-on acquisitions made in its Energy Logistics business sector since 2011. QUANTUM FOODS: Live Webcast Asset Auction Scheduled for June 24-26 ------------------------------------------------------------------ By order of the U.S. Bankruptcy Court, Tiger Group's Remarketing Services Division and Schneider Industries will conduct a live webcast auction on June 24, 25 and 26 for the assets of meat and poultry processing packing and distribution facilities formerly owned by Quantum Foods. Online bidding is now under way for the assets, which include a 220,000-square-foot production facility, an 80,000-square-foot culinary facility, and a 250,000-square-foot cold-storage distribution center. Bidders can attend the June 24 through June 26 event in person at Quantum's main plant located at 750 S. Schmidt Rd. in Bolingbrook, or can participate in the live webcast through bidspotter.com. The auctions begin at 10:30 a.m. (CT) each day. For direct links to the sale catalog, and to submit bids prior to the auction, go to www.SoldTiger.com Previews will be held at each of the three individual sites in Bolingbrook, from 9:00 a.m. to 5:00 p.m. (CT) on June 20th, 21st and 23rd. In addition to the main plant at 750 S. Schmidt Rd., these facilities include the culinary plant at 525 W. Crossroads Parkway and the cold storage distribution center at 550 Historic U.S. 66 Frontage. "This falls in the 'sales not to miss' category for anyone in the meat processing and packaging industries, as well food processing, cold storage, distribution or related businesses," said Jeff Tanenbaum, President of Tiger Remarketing Services. "With over 600,000 square feet of equipment in excellent condition, buyers will find some great buying opportunities. The real opportunity, though, would be for someone to buy the operation intact, something that we are continuing to entertain up until the auction date." Quantum Foods was launched more than two decades ago, as a hand- cut beef butcher. The company ultimately grew to an approximately 1,100-employee operation, supplying commercial accounts as well as overseas military bases. However, the recent withdrawal of troops in the Middle East, along with the loss of top retail clients, hurt its business operations, leading the company to file for Chapter 11 bankruptcy on February 18, 2014 in the Delaware Bankruptcy Court (case number 1:14-bk-10318). The auction features equipment from all major brands -- Formax, Vemag, JBT, CFS, Aerofreeze, Tiromat, Hayssen, Ishida, Yamoto, Safeline, FPEC, Wolf Tec, Marlen, Challenge, Carouthers, Alkar, Polac, and Wolf King. The offering includes mixing, grinding, forming, tenderizing and cutting equipment, as well as cooking and frying lines and smokehouses at the company's 220,000-square-foot main plant and 80,000-square-foot culinary plant. The sale also includes pallet racking, material handling equipment and a late model hyperbaric high-pressure pasteurizing unit at the company's 250,000-square-foot cold storage distribution center, as well as trucks, trailers, boilers, compressors, office equipment and other support equipment throughout all facilities. For a full catalog of the items offered, facility locations for individual items, and details on how to schedule a site visit and bid, go to: www.SoldTiger.com About Tiger Group Tiger Group -- http://www.TigerGroup.com-- provides asset valuation, advisory and disposition services to a broad range of retail, wholesale, and industrial clients. With over 40 years of experience and significant financial backing, Tiger offers a uniquely nimble combination of expertise, innovation and financial resources to drive results. Tiger's seasoned professionals help clients identify the underlying value of assets, monitor asset risk factors and, when needed, provide capital or convert assets to capital quickly and decisively. Tiger's collaborative, straight-forward approach is the foundation for its many long-term 'partner' relationships and decades of success. Tiger operates main offices in Boston, Los Angeles and New York. 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. ROBINSON ELEVATOR: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Robinson Elevator Group LLC 652 Rahway Avenue Union, NJ 07083 Case No.: 14-22475 Chapter 11 Petition Date: June 17, 2014 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Hon. Novalyn L. Winfield Debtor's Counsel: Sam Della Fera, Esq. TRENK, DIPASQUALE DELLA FERA & SODONO, P.C. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Fax: (973) 243-8677 Email: sdellafera@trenklawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Brian Ralli, vice president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-22475.pdf ROOFING SUPPLY: Moody's Affirms 'B3' CFR; Outlook Revises to Neg. ----------------------------------------------------------------- Moody's Investors Service, changed the rating outlook of Roofing Supply Group, LLC ("RSG"), a national distributor of roofing products and related building materials, to negative from stable since operating performance is below Moody's previous expectations, resulting in very weak debt leverage credit metrics. In a related rating action, Moody's affirmed RSG's B3 Corporate Family Rating and its B3-PD Probability of Default Rating. The following rating/assessments are affected by this action: Corporate Family Rating affirmed at B3; Probability of Default Rating affirmed at B3-PD; Senior secured term loan due 2019 affirmed at B3 (LGD4, 52% from LGD4, 51%); and, Senior unsecured notes due 2020 affirmed at Caa1 (LGD5, 74%). Ratings Rationale The change in RSG's rating outlook to negative from stable results from operating performance below Moody's previous expectations. Moody's view is that the company will have difficulty generating significant levels of earnings and free cash flow necessary to improve debt credit, resulting in very weak debt credit metrics. Performance is being negatively impacted by acquisition-related costs, branch expansion costs, and ongoing investments in infrastructure. Adjusted EBITDA margin was significantly below the levels achieved for the same period of the previous year. As a result, Moody's projects debt leverage will remain in the 7.0x - 7.5x range over the next 12 to 18 months, and interest coverage, defined as (EBITDA-CAPEX)-to-interest expense will be in the 1.25x -- 1.5x range over Moody's time horizon. Retained cash flow-to- debt will likely remain below 5% over Moody's time horizon (all ratios incorporate Moody's adjustments). These key credit metrics are characteristic of lower rated entities. A downgrade to lower ratings is not warranted at this time, since Moody's anticipates RSG to achieve some margin expansion as it benefits from its acquisitions and investments. Also, RSG should generate sufficient cash flows through the balance of the year, albeit at lower levels than previously anticipated, to meet its interest and principal payments. Providing further offset to the weak debt credit metrics, for now, is considerable availability under the company's asset-based revolver. Although the $175 million revolving credit facility is used largely for seasonal working capital needs in the first half of year, Moody's believe that revolver availability will remain high relative to the size of RSG's revenue base. RSG will use free cash flow to pay down these borrowings, especially in the second half of the year when free cash flow generation is the strongest. A downgrade could ensue if actions taken by RSG fail to improve its operating performance such that leverage remains above 7.5x, interest coverage lingers around 1.25x, or retained cash flow-to- debt stays under 5% (all ratios incorporate Moody's adjustments). Excessive usage of the revolving credit facility or dividends could pressure the ratings as well. Stabilization of the ratings may occur if RSG's operating performance and resulting key debt credit metrics exceed Moody's forecasts. Permanent debt reduction beyond paying down revolving borrowings, and stronger cash flows would also support a change in the company's negative rating outlook. Roofing Supply Group, LLC ("RSG"), headquartered in Dallas, TX, is a national distributor of roofing products and related building materials supplying roofing contractors, home builders, and retailers. Clayton, Dubilier & Rice, LLC, through its respective affiliates, is the primary owner of RSG. Revenues for the 12 months through March 31, 2014 totaled about $1.0 billion. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. RYNARD PROPERTIES: Management Agreement With LEDIC Okayed --------------------------------------------------------- Bankruptcy Judge Jennie D. Latta has approved an interim management agreement between Rynard Properties Ridgecrest, and LEDIC Management Group. Previously, the Debtor requested that the Court approve a management agreement with BVM Management, Inc. for the management of Ridgecrest Apartment Complex. Objections were filed by Fannie Mae and Samuel K. Crocker, the United States Trustee for Region 8. At the April 30 hearing, the Court heard preliminary statements and argument of counsel with offers of proof. In this relation, the Debtor withdrew the motion to employ BVM Management. Since it needed a management company for an orderly and efficient operation of the apartment complex, it substituted LEDIC on an interim basis, with the consent of Fannie Mae. The management contract with LEDIC may be renewed for an additional 30 days or longer. The Court did not rule on the position of the U.S. Trustee and Fannie Mae as to whether the employment of LEDIC as a management company of the apartment complex requires employment under 11 U.S.C. Sec. 327 and filing of a verified statement and the position of the Debtor that the approval of a management company for an apartment complex is not a professional requiring approval and the "disinterested" test. The Debtor's management agreement with TESCO ended April 30, 2014. Court papers filed by the Debtor reveal that BVM has common members or owners as the general partner of the Debtor but asserts they have mutual interests and/or incentive to have a successful reorganization and efficient operation and running of the apartment complex in accordance with the Cash Collateral Order and budget with Fannie Mae. The Debtor also has said its contract with TESCO requires a 6% management fee with other bookkeeping and associated fees that increase the fees to TESCO of a fee up to 9%. The management agreement with BVM is for a cost of only 3% management fee. The Debtor is represented by: Toni Campbell Parker, Esq. 615 Oakleaf Office Lane P.O. Box 240666 Memphis, TN 38124-0666 Tel: (901) 483-1020 Fax: (866) 489-7938 E-mail: Tparker002@att.net About Rynard Properties Ridgecrest LP Rynard Properties Ridgecrest LP is a Tennessee limited partnership. Its principal place of business is 2881 Rangeline Road, Memphis, TN 38127, and the Debtor operates a 256 unit multifamily apartment complex of Section 8 housing named Ridgecrest Apartments and currently has TESCO operating the complex as leasing agent. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 14-22674) on March 13, 2014. John Bartle signed the petition as secretary/treasurer of Ridgecrest LLC, general partner of the Debtor. In its schedules, the Debtor disclosed $16,231,959 in total assets and $8,734,000 in total liabilities. Toni Campbell Parker serves as the Debtor's counsel. Judge Jennie D. Latta oversees the case. The U.S. Trustee for Region 8 has notified the Bankruptcy Court that it was unable to appoint an official committee of unsecured creditors. According to the docket, the Chapter 11 plan and disclosure statement are due July 11, 2014. SEARS METHODIST: Has Interim Authority to Tap $600,000 DIP Loans ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, gave certain debtor affiliates of Sears Methodist Retirement System, Inc., interim authority to obtain postpetition financing from Wells Fargo Bank National Association, as master trustee and bond trustee, up to an interim maximum amount of $600,000, on a senior secured, superpriority basis, through the period ending July 15, 2014. The DIP Loans will bear interest at the rate of 6.25%. From and after the occurrence of a termination event and until the time as any and all DIP obligations are satisfied in full in cash, the DIP Loan will accrue interest at a rate of 8.25%. The Debtors were also given interim authority to use cash collateral securing their prepetition indebtedness until the earlier of (i) the occurrence of a termination event, or (ii) July 15, 2014. The Debtor group authorized to tap the Wells Fargo DIP Loan and Wells Fargo Cash Collateral is composed of Sears Methodist Retirement System, Inc., Sears Permian Retirement Corporation, Sears Methodist Centers, Inc., Sears Panhandle Retirement Corporation, Sears Methodist Foundation, and Sears Brazos Retirement Corporation. This group of Debtors is jointly and severally liable for payment and performance under certain notes executed in connection with the issuance of the following bonds: (a) Between 1998 and 2003, the Debtors secured permanent financing through a series of bond offerings by the Abilene Health Facilities Development Corporation in the aggregate principal amount of approximately $73.1 million. (b) In April 2013, pursuant to an Offer to Tender and Exchange, the holders of the Previously Issued Bonds were given the opportunity to tender their Previously Issued Bonds for Series 2013A Retirement Facility Revenue Bonds and Series 2013D Retirement Facility Revenue Bonds to be issued by Red River Health Facilities Development Corporation. As a result of the Offer, the principal amount of the Exchange Bonds to be issued in exchange for the Original Bonds was $69,130,000. (c) On May 9, 2013, pursuant to an Indenture of Trust, dated as of May 1, 2013, between Red River and Wells Fargo Bank, National Association, Red River issued (i) $69,130,000 in Exchange Bonds; (ii) $19,405,000 in Series 2013B Retirement Facility Revenue Bonds, (iii) $2,285,000 in Series 2013C Retirement Facility Revenue Bonds, and (iv) $765,000 in Series 2013D Retirement Facility Revenue Bonds. Separately, the Debtors sought and obtained authority from the Court to designate an independent escrow agent to receive and hold in trust the entrance fees received from prospective residents of the Debtors' facilities into an escrow account. The Escrow Agent is authorized to return EDs to the respective residents who had made those payments to the extent (a) the resident is entitled to a refund under his or her residency agreement, or (b) their respective facility closes. A final hearing to consider the DIP/Cash Collateral Motion will be held on July 14, 2014, at 2:30 p.m. (CST). Any party desiring to object to the relief sought in the Cash Collateral Motion on a final basis must file a written objection with the Court on or before July 10. A full-text copy of the Interim DIP Order with Budget is available at http://bankrupt.com/misc/SEARSdipord.pdf Sears Methodist Retirement System, Inc., sought protection under Chapter 11 of the Bankruptcy Code on June 10, 2014 (Case No. 14- 32821, Bankr. N.D. Tex.). The case is assigned to Judge Stacey G. Jernigan. The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The Debtors' financial advisor is Alvarez & Marsal Healthcare Industry Group, LLC, while the Debtors' investment banker is Cain Brothers & Company, LLC. The Debtors' notice, claims and solicitation agent is GCG Inc. SEARS METHODIST: Units Have Interim OK to Use Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, issued orders separately giving certain debtor affiliates of Sears Methodist Retirement System, Inc., et al., interim authority to use cash collateral securing their prepetition indebtedness. Debtor Sears Plains Retirement Corporation obtained interim authority to use the cash collateral of Prosperity Bank, N.A. Plains is obligated to Prosperity under the following undertakings: (1) approximately $8.2 million of bank loan debt; (2) a certain A note, accruing interest at 3.50%, a B note, accruing interest at 3.50%, and a C note, accruing interest at 4.25%; and (3) a security agreement, dated Dec. 1, 2011, and a deed of trust, security agreement, and assignment of rents dated Dec. 1, 2011, each securing repayment of the prepetition obligations. A full-text copy of the Plains Cash Collateral Order with Budget is available for free at: http://bankrupt.com/misc/SEARScashcolord.pdf The Court also gave Debtor Sears Caprock Retirement Corporation interim authority to use the cash collateral of Santander Bank, N.A. Caprock is indebted to Santander Bank pursuant to an HFDC of Central Texas, Inc. Variable Rate Demand Retirement Facility Revenue Bonds, Series 2008A, in the aggregate principal amount of $3,275,000, and the Variable Rate Demand Retirement Facility Revenue Bonds, Series 2008B, in the aggregate principal amount of $4,620,000. A full-text copy of the Caprock Cash Collateral Order with Budget is available for free at: http://bankrupt.com/misc/SEARScashcolcaprockord.pdf Debtors Odessa Methodist Housing, Inc., and Canyons Senior Living, L.P., were given interim authority to use the cash collateral of the United States Department of Housing and Urban Development, Prudential Huntoon Paige Associates, Ltd., and the Texas Department of Housing and Community Affairs. The Debtors are obligated under the following undertakings: (1) a Building Loan Agreement, dated as of Oct. 28, 2010, by and between CSL and Prudential; (2) a Security Agreement, dated as of Oct. 28, 2010, by and between CSL and Prudential; (3) a Firm Commitment for Capital Financing, dated as of Sept. 9, 1996, by HUD; and (4) a Deed of Trust, dated as of Oct. 9, 1996, by and between OMH, as successor grantor, and Jack Stark, as trustee. A full-text copy of the HUD Debtors with Budget is available for free at: http://bankrupt.com/misc/SEARScashcolomhord.pdf Debtor Sears Tyler Methodist Retirement Corporation is given interim authority to use the cash collateral of UMB Bank, N.A., as successor master trustee, under certain prepetition bond indentures in the total aggregate principal amount of approximately $49.4 million. A full-text copy of the Tyler Cash Collateral Order with Budget is available at: http://bankrupt.com/misc/SEARScashcoltylerord.pdf A final hearing on the requests to use cash collateral will be scheduled for July 14, 2014, at 2:30 p.m. CST. Objections are due July 10. Sears Methodist Retirement System, Inc., sought protection under Chapter 11 of the Bankruptcy Code on June 10, 2014 (Case No. 14- 32821, Bankr. N.D. Tex.). The case is assigned to Judge Stacey G. Jernigan. The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The Debtors' financial advisor is Alvarez & Marsal Healthcare Industry Group, LLC, while the Debtors' investment banker is Cain Brothers & Company, LLC. The Debtors' notice, claims and solicitation agent is GCG Inc. SEARS METHODIST: Has Until July 8 to File Schedules, Statements --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, gave Sears Methodist Retirement System, Inc., et al., until July 8, 2014, to file their schedules of assets and liabilities and statements of financial affairs. The Debtors' Chapter 11 cases are procedurally consolidated and jointly administered under Case No. 14-32821. Sears Methodist Retirement System, Inc., sought protection under Chapter 11 of the Bankruptcy Code on June 10, 2014 (Case No. 14- 32821, Bankr. N.D. Tex.). The case is assigned to Judge Stacey G. Jernigan. The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The Debtors' financial advisor is Alvarez & Marsal Healthcare Industry Group, LLC, while the Debtors' investment banker is Cain Brothers & Company, LLC. The Debtors' notice, claims and solicitation agent is GCG Inc. SEQUENOM INC: Inks Services Agreement with Quest Diagnostics ------------------------------------------------------------ Sequenom, Inc., through its wholly-owned subsidiary Sequenom Center for Molecular Medicine, LLC, entered into an Agreement for Services with Quest Diagnostics Incorporated, pursuant to which SCMM will provide its MaterniT21 PLUS laboratory-developed test service to Quest, and has agreed to provide a related laboratory- developed test service to Quest in the future following its commercialization. After an initial period following the execution of the Services Agreement through the term of the Services Agreement, Quest has agreed not to order from or contract with any other laboratory, other than SCMM, for the provision of non-invasive prenatal testing services for or on behalf of Quest's physician customers and their patients and SCMM has agreed not to provide or contract with any third party laboratory that has securities that are traded on a public stock exchange with annual revenues greater than one billion dollars for the Testing Services. Notwithstanding the foregoing, in the event that the Future Testing Service is not commercialized by SCMM by a date sometime in the fourth quarter of 2014, then the Quest Exclusivity will immediately terminate. Pursuant to the Services Agreement, Quest has agreed to pay SCMM a fixed fee for each Testing Service performed by SCMM on Quest's behalf. The Services Agreement has a term of two years, but will automatically renew for additional terms of one year each unless either party provides at least 60 days prior written notice to the other party; provided, however, that the Services Agreement can be earlier terminated (i) by the mutual agreement of the parties, (ii) by a party upon an uncured material breach of the Services Agreement by the other party, (iii) by Quest if any action is taken against SCMM to revoke, suspend or terminate any license to operate a clinical laboratory or to revoke, suspend or terminate SCMM's participation in Medicaid, Medicare or other federally funded programs, and such action is not resolved within 90 days, or (iv) by Quest if the Testing Services are determined by a court to infringe the intellectual property of a third party and SCMM has not obtained the rights necessary to enable Quest to continue to use the Testing Services or an alternative and comparable testing service. Concurrently with the execution of the Services Agreement, Sequenom and Quest entered into a License Agreement pursuant to which Sequenom granted Quest a royalty-bearing, non-exclusive license (without the right to sublicense) to rights held by Sequenom related to patents and patent applications filed in the United States, Canada, Mexico, and India for the use of cell-free fetal nucleic acids from biological samples obtained from pregnant women for prenatal diagnostic testing by whole genome massively parallel sequencing, for use by Quest solely to develop, perform and sell laboratory-developed tests for non-invasive detection and diagnosis of prenatal aneuploidy and fetal abnormalities in the Territory. Pursuant to the License Agreement, during such time that a claim of a patent or patent application included in the Licensed Rights remains in effect, Quest has agreed to pay Sequenom a royalty each time results of a laboratory-developed test utilizing the Licensed Rights is generated on behalf of a single patient and such results are provided to the patient and are intended to become part of the medical records of such patient. This royalty is the greater of (i) a specified percentage of the net sales of each Reportable Result or (ii) a specified dollar amount for each Reportable Result, which such dollar amount will, following the five-year anniversary of the License Agreement, be increased on an annual basis to adjust for inflation. The License Agreement will remain in effect until the last to expire of the Licensed Rights; provided, however, that the License Agreement can be earlier terminated (i) by a party upon an uncured material breach of the License Agreement by the other party, (ii) by Sequenom if Quest challenges the validity of the Licensed Rights and such challenge is not withdrawn within 30 days, or (iii) by Quest, in its sole discretion, upon 90 days prior written notice to Sequenom. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom incurred a net loss of $107.40 million in 2013, a net loss of $117.02 million in 2012 and a net loss of $74.13 million in 2011. The Company's balance sheet at March 31, 2014, showed $122.85 million in total assets, $181.49 million in total liabilities and a $58.63 million total stockholders' deficit. SERVICEMASTER CO: S&P Retains 'B-' CCR on CreditWatch Positive -------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B-' corporate credit rating on Memphis-based The ServiceMaster Co. LLC remains on CreditWatch, where they were placed on May 8, 2014, with positive implications. At the same time, S&P is assigning its 'B+' issue-level ratings and a recovery rating of '2' to ServiceMaster's proposed senior secured $300 million revolving credit and $1.825 billion term facilities. S&P's recovery ratings of '2' on these facilities indicates its expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. Issuance of the proposed credit facilities will be contingent upon successful completion of the proposed IPO and proceeds from the proposed credit facility will refinance existing debt. The ratings are also based on proposed terms and are subject to review upon receipt of final documentation. All other issue-level ratings, including S&P's 'B' secured debt rating and its 'CCC+' senior unsecured debt rating, are unchanged and remain on CreditWatch with positive implications. The respective recovery ratings also remain unchanged at '2', indicating S&P's expectation of substantial (70% to 90%) recovery, and '5', indicating its expectation for modest (10% to 30%) recovery. "The CreditWatch placement reflects our view that credit measures will improve if ServiceMaster is successful in completing its IPO as planned, raising roughly $700 million in new equity," said Standard & Poor's credit analyst Linda Phelps. "We anticipate the company will use proceeds from the offering to reduce currently high debt levels." If the planned IPO is completed, Standard & Poor's estimates debt- to-EBITDA leverage will decline to the 7x area from 7.8x for the 12 months ended March 31, 2014. S&P could raise its ratings one notch if an IPO is completed as planned and it believes leverage will be sustainable in the 7x area. Alternatively, S&P could affirm its ratings if the IPO is not completed and credit measures remain very weak. SOLENIS INTERNATIONAL: S&P Assigns 'B' CCR; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Solenis International L.P. The outlook is stable. At the same time, based on preliminary terms and conditions, S&P assigned a rating of 'B' (the same as the corporate credit rating) and a recovery rating of '3' to Solenis' proposed $200 million revolving credit facility and $945 million in first-lien term loans. S&P also assigned a 'B-' issue rating (one notch below the corporate credit rating) and a recovery rating of '5' to the company's proposed $470 million second-lien term loan. "Our 'B' rating on Solenis has been derived from our anchor of 'b', based on our assessments of a 'fair' business risk and 'highly leveraged' financial risk profile for the company," said Standard & Poor's credit analyst Paul Kurias. There is no impact of any modifier on the ratings. The fair business risk profile reflects the company's large global market shares in some of its low-margin specialty chemicals business; its capability to customize applications for customers in a key market, the pulp and paper segment; and its large sales and technical work force which creates potential for value-added offerings and insulation from input raw material volatility. However, the company has not entirely demonstrated its ability to convert this potential into margins in the mid-to-high teens or higher, associated with many specialty businesses. EBITDA margins were at about 12% (pro forma for businesses no longer part of the acquisition) at year-end 2013. In S&P's assessment, Solenis' financial risk profile is highly leveraged. The company's ownership by a private-equity sponsor, Clayton, Dubilier & Rice (CD&R), and S&P's related view that leverage will remain in the highly leveraged category are key reasons for its assessment. S&P anticipates that the ratio of total debt to EBITDA will average around 6.3x and the ratio of FFO will average around 10% over the next three years. S&P believes that the company will not support a meaningful improvement in leverage metrics. On the other hand, S&P do not expect the company to fund large acquisitions, shareholder rewards, or growth opportunities in a manner that increases its leverage significantly so that the ratio of total debt to EBITDA exceeds 7x at any given point in time. S&P anticipates only modest improvements in leverage beyond 2014 caused by EBITDA growth. The stable outlook reflects S&P's expectation for steady operating performance in the first year under the new ownership. In S&P's base case it do not build in an improvement in margins from 2013 levels (on a pro forma basis) though S&P believes there is some potential for improvement in the future. S&P do not anticipate debt-funded acquisitions, growth opportunities, or shareholder rewards that increase leverage from current levels. S&P expects that the ratio of FFO to total debt will be around 10% in the first year of operations. S&P will lower ratings if EBITDA for 2014 is less than it anticipates or if debt increases above proposed levels so that the ratio of FFO declines below 7% or the ratio of total debt to EBITDA increases above 7x with no immediate prospect for an improvement. Unexpected operating weakness resulting in a reduction in revenue or a decline in margin by about 200 basis points could result in a downgrade scenario as envisioned. S&P currently considers an upgrade unlikely within the next 12 months, based on its expectations for high leverage, and S&P's view that, given the company's ownership by a financial sponsor, any leverage improvement to levels appropriate for a higher rating will not be sustained. Appropriate leverage for a higher rating would include an FFO to total debt ratio of over 12% and a total debt to EBITDA ratio of below 5x. S&P also do not anticipate an upgrade resulting from an improvement in its business risk profile assessment. An upside scenario could result from unexpected strength in EBITDA, margins, and growth rates, on a sustainable basis that is indicative of a stronger business risk profile than S&P assumed. SOLENIS INTERNATIONAL: Moody's Assigns B3 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to Solenis International, L.P. and assigned B2 ratings to its proposed first lien credit facilities and a Caa1 rating to its proposed second lien term loan. Proceeds from the debt financings, along with approximately $405 million of equity from sponsor Clayton, Dubilier, and Rice, LLC will be used to fund the purchase of the Ashland Water Technologies business (which will be renamed Solenis International LP) from Ashland Inc. for roughly $1.7 billion and to pay transaction fees. The rating outlook is stable. "Solenis' B3 CFR reflects its high leverage and lack of operating history as a standalone entity," stated James Wilkins, a Vice President at Moody's and lead analyst for Solenis. Solenis International, L.P. Ratings assigned Corporate Family Rating -- B3 Probability of Default Rating -- B3-PD $200mm gtd first lien sr sec revolving credit facility due 2019 -- B2 (LGD3) $630mm gtd first lien sr sec term loan due 2021 -- B2 (LGD3) Gtd euro first lien sr sec term loan due 2021 ($315mm equivalent) -- B2 (LGD3) $470 mm gtd second lien term loan due 2022 -- Caa1 (LGD4) Outlook - Stable Ratings Rationale Solenis' B3 CFR reflects its high leverage (over 7x as of 12/31/2013 on a pro forma basis for the acquisition), narrow product line (chemicals for the pulp and paper industry and industrial water applications) and lack of operating history as a standalone entity. The company's ratings are supported leading market positions in pulp and paper (which make up about two thirds of its revenues), global sales base, diverse manufacturing footprint, EBITDA margins, relatively stable demand for its products used for industrial water treatment and positive free cash flow generation. As a unit of Ashland Inc., the business relied on its parent for shared corporate services that it will be required to replace as a standalone company. The company will have transition services agreements with Ashland Inc to provide the services until such time as Solenis develops its own capabilities. The company's historical carve-out audited financials include allocated costs from its parent (Ashland Inc.) that may not be indicative of the costs that Solenis will face as a standalone entity. While SG&A expenses are expected to decrease after the divestiture, one-time costs could spike in the first couple of years as new systems and infrastructure are put in place. Solenis' liquidity is adequate and is supported primarily by expectations for positive free cash flow in 2014-15, and a new $200 million 5-year revolver which is expected to be undrawn at the close. After the carve-out, the company is expected to maintain little balance sheet cash as it repays debt balances. The revolver will have a springing first lien net leverage covenant of 6.75x if utilization exceeds 30%, which is not expected to be tested in its first year of operation as a standalone entity. While revolver usage is expected to be minimal, the company would likely have sufficient covenant headroom. The term loans do not have any financial covenants. The outlook is stable. The ratings could be upgraded if the company reduces leverage below 6x on sustained basis while maintaining or improving its profit margins. Additionally, Moody's would expect Solenis to establish a track record of operating as a standalone entity. A deterioration in sales volumes, profit margins, or increase in leverage above 8x could lead to a downgrade. Solenis International, L.P. is a producer of chemicals used in the manufacture of pulp and paper products as well as for industrial water treatment. In February 2014, Ashland Inc. announced the planned sale of its Ashland Water Technologies business to funds managed by Clayton, Dubilier and Rice. The business will be operated as a standalone company. Ashland Water Technologies had revenues of $1.7 billion for the twelve months ended March 31, 2014. SONOMAX TECH: Regulator Grants Management Cease-Trade Order ----------------------------------------------------------- Sonomax Technologies Inc. is providing this bi-weekly default status report in accordance with National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults. On May 6, 2014, Sonomax announced by way of press release that for the reasons disclosed therein, the filing of Sonomax's audited financial statements for the fiscal year ended December 31, 2013 and the related management's discussion and analysis would not be completed by the legal deadline of April 30, 2014. As a result of the delay in filing the 2013 Annual Financial Statements, Sonomax's principal regulator, the Autorite des marches financiers, granted a management cease-trade order ("MCTO") to Sonomax. The MCTO restricts all trading in securities of Sonomax, whether direct or indirect, by Sonomax's six directors and senior officers until such time as the 2013 Annual Financial Statements are filed by Sonomax. The MCTO does not affect the ability of other shareholders of Sonomax to trade their securities. As previously reported, Sonomax's failure to file the 2013 Annual Financial Statements by the prescribed deadline is due to Sonomax making the necessary arrangements to complete its 2013 annual audit. In particular, in light of its difficult financial situation, Sonomax must make satisfactory arrangements to pay its auditors. Sonomax again confirms that is actively seeking the necessary funding and is confident that it will be able to make such satisfactory financial arrangements with its auditors shortly. Pursuant to the provisions of the alternative information guidelines specified by National Policy 12-203, Sonomax reports that since May 6, 2014, except as stated in this default status report, there have not been any material changes to the information contained therein; nor any failure by Sonomax to fulfill its intentions as stated therein with respect to satisfying the provisions of the alternative information guidelines, and there are no additional defaults or anticipated defaults subsequent to the disclosure therein, other than the delay in filing the 2013 Annual Financial Statements and a default in filing Sonomax's interim financial statements and related management discussion and analysis for the quarter ended March 31, 2014 by the prescribed deadline of May 30, 2014. Further, Sonomax confirms that, at the date hereof, there are no insolvency proceedings against it and no other material information concerning the affairs of Sonomax that has not been generally disclosed. Until the 2013 Annual Financial Statements are filed, Sonomax intends to continue to satisfy the provisions of the alternative information guidelines specified by National Policy 12-203 by issuing bi-weekly default status reports in the form of further press releases, which will also be filed on SEDAR. Sonomax would file, to the extent applicable, its next default status report on or about July 4, 2014. Sonomax also announced the resignations of Mr. Peter Malouf, Chairman, and Mr. Peter Brennan, Vice-Chairman of the Board of Directors of Sonomax. Management would like to thank these gentlemen for many years of service and dedication to Sonomax. As Sonomax starts down a path to attempt to reorganize the company, it is no longer possible for them to stay on the Board. As a result, the Board of Directors of Sonomax consists of Nick Laperle, Adam Schwartz and Kevin Veenstra. About Sonomax Technologies Inc. Sonomax -- http://sonomax.com-- engages in the product development, research, and licensing of in-ear technologies. It has more than 21 patents and 10 trademarks worldwide. SPRINGLEAF HOLDINGS: Moody's Affirms 'B3' Corp. Family Rating ------------------------------------------------------------- Moody's investors Service affirmed the B3 corporate family rating of Springleaf Holdings, Inc. (Springleaf) and the B3 senior unsecured rating of operating subsidiary Springleaf Finance Corporation (SFC). Moody's also changed the ratings outlook to positive from stable. Ratings Rationale Moody's affirmation of Springleaf's ratings and positive outlook revision reflects the company's strengthened franchise in non- prime consumer lending, improved operating performance in core business segments, increased liquidity, and strides toward reducing leverage. Results in Springleaf's shrinking real estate lending segment continue to represent a drag on the firm's overall results. Springleaf has begun to show positive momentum with respect to operating performance. As Springleaf's real estate portfolio runs off, earning assets are being replaced with higher yielding non- prime consumer loans. Moody's expects operating profitability to increase as average yields continue to improve. Additionally, Springleaf is actively managing its liabilities by using liquidity generated from real estate portfolio sales and run-off to reduce both debt levels and cost of funds, providing the basis for sustained improvements in profitability in future periods. Since Moody's prior upgrade on October 13, 2013, Springleaf has reduced its effective leverage (total debt divided by tangible common equity) by using a portion of the $231 million of net proceeds from its October 2013 IPO and approximately $800 million of net proceeds from a $1.1 billion real estate receivables sale completed in March to further pay down debt. At March 31, 2014, effective leverage measured 6.7x. Moody's calculation of effective leverage includes an adjustment to include only Springleaf's proportionate share of assets and debt (47%) of the SpringCastle portfolio. Presenting longer-term credit concerns are high anticipated earnings volatility, given the non-prime and sub-prime characteristics of Springleaf's consumer loan portfolio, as well as the company's expansion plans in online lending, which Moody's views as an increase in the company's risk appetite. In addition, Springleaf's reliance on confidence-sensitive market funding and secured debt are continuing constraints on its liquidity profile. Springleaf's corporate family rating and SFC's senior unsecured ratings could be upgraded if the company continues to reduce leverage and improve operating performance while maintaining sufficient liquidity to withstand temporary market disruptions. Ratings could be downgraded if Springleaf's operating performance deteriorates and/or leverage materially increases. Springleaf Holdings, Inc.: Corporate Family: B3 rating affirmed Springleaf Finance Corporation: Senior Unsecured: B3 rating affirmed Senior Unsecured Shelf/MTN Program: (P)B3 rating affirmed AGFC Capital Trust I: Preferred Stock: Caa2(hyb) rating affirmed All ratings have a positive outlook. Springleaf Holdings, Inc., through principal operating subsidiary Springleaf Finance Corporation, provides consumer finance and credit insurance products to consumers through a multi-state branch network. STACY'S INC: Court Converts Case to Chapter 7 Liquidation --------------------------------------------------------- The Hon. David R. Duncan of the U.S. Bankruptcy Court for the District of South Carolina entered, at the behest of Stacy's Inc., an order converting its Chapter 11 bankruptcy case to one under Chapter 7. A hearing on the case conversion motion was scheduled for June 11, 2014, at 2:00 p.m. The Debtor said in a court filing dated May 9, 2014, that as a result of primary lender was Bank of the West's refusal to allow the Debtor to use its cash collateral to pay the income tax liability and the cash collateral order denying the Debtor's request to use BOTW's cash collateral, the estate is administratively insolvent and is left with no possibility of effectuating a Chapter 11 plan. The Debtor's most recent analysis indicates that the Debtor does not have enough funds to pay the current outstanding administrative expenses in this case. The Debtor in August 2013 sold the business to MG Acquisition Inc., an affiliate of Metrolina Greenhouses, for $15.2 million after no competing bids were entered at a bankruptcy auction. The sale closed on Aug. 30, 2013. The Debtor said in the May 9 filing that as of closing, the Debtor has no ongoing operations. As part of the sale negotiations, BOTW allowed the Debtor to retain a certain amount of its cash collateral to pay agreed upon post closing expenses. The Debtor also continued pursuing assets which were not subject to BOTW's lien. In September 2013, the Debtor determined that it would have an income tax liability of approximately $525,000, resulting from higher collections and lower payables than anticipated and a much higher working capital adjustment than predicted. On May 27, 2014, BOTW asked the Court to direct the Debtor to turn over to BOTW all cash collateral in the custody, control and possession of the Debtor, including but not limited to the approximately $550,470.36 in the Debtor's operating account. BOTW stated in its motion that it has received payments totaling $18.87 million, which have come from the sales proceeds and the Debtor's operating account. According to the Debtor's calculations, BOTW has received payments totaling $19.30 million from these sources. "Even so, the Debtor does not dispute that it is currently holding funds which constitute BOTW's cash collateral. As a result of the Court's order regarding the use of cash collateral, the Debtor offered to distribute the cash collateral in its operating account to BOTW, in the amount of $516,475.89," the Debtor stated in a court filing dated June 10, 2014. The Debtor prepared a check made payable to BOTW, along with an analysis and a certification, agreeing to the distribution. However, BOTW refused to sign the certification as to distribution and refused to agree that $516,475.89 was the correct amount of the cash collateral funds. By the time BOTW prepared its own calculations and determined that the amount offered by the Debtor was the correct amount, the Debtor had filed the motion to convert. The Debtor's counsel advised BOTW that the Cash Collateral Funds were being maintained in its trust account and would be turned over to the Chapter 7 trustee upon conversion. The hearing to consider the motion for turnover of cash collateral is set for July 9, 2014, at 2:00 p.m. BOTW is represented by: Robert C. Byrd, Esq. Parker Poe Adams & Bernstein LLP 200 Meeting Street, Suite 301 Charleston, SC 29401 Tel: (843) 727-2650 Fax: (843) 727-2680 E-mail: bobbybyrd@parkerpoe.com About Stacy's Inc. Stacy's Inc., a commercial greenhouse in York, South Carolina, filed a Chapter 11 petition on June 21 (Bankr. D. S.C. Case No. 13-03600) in Spartanburg, South Carolina, with a deal to sell the business for $17 million to Metrolina Greenhouses, absent higher and better offers. Stacy's -- http://www.stacysgreenhouses.com/-- had 16 acres of greenhouses on three farms aggregating 260 acres in York, South Carolina. The Debtor scheduled $26.4 million in total assets and $31.4 million in liabilities as of the bankruptcy filing. The secured lender is Bank of the West, owed $22.1 million secured by liens on the assets. The Debtor tapped Barbara George Barton, Esq., at Barton Law Firm, P.A, as bankruptcy counsel; Ouzts, Ouzts & Varn, P.A., as its financial advisor; SSG Advisors, LLC, as its investment banker; and Faulkner and Thompson, P.A., to provide limited accounting services. The Official Committee of Unsecured Creditors retained Reid E. Dyer, Esq., at Moore & Van Allen, PLLC. STARR PASS: Ch. 11 Case Reassigned to Judge Hollowell ----------------------------------------------------- Judge Brenda Moody Whinery of the U.S. Bankruptcy Court for the District of Arizona recused herself from hearing any matter on the Chapter 11 proceeding of Starr Pass Residential, LLC, and directed that the bankruptcy case be reassigned to Judge Eileen W. Hollowell. Starr Pass Residential LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-09117) on June 12, 2014. Christopher Ansley signed the petition as authorized officer. Gust Rosenfeld, P.L.C., serves as the Debtor's counsel. The Debtor disclosed total assets of $7.40 million and total liabilities of $145.86 million. T-L CHEROKEE: Cole Taylor Bank Files Competing Liquidation Plan --------------------------------------------------------------- Cole Taylor Bank files with the Bankruptcy Court a disclosure statement in support of its proposed plan of liquidation dated June 3, 2014 for T-L Cherokee South LLC. T-L Cherokee was formed to acquire, own, operate and redevelop the Cherokee South Shopping Center in Overland Park, Kansas. The manager of T-L Cherokee is Tri-Land Properties, Inc., a debtor in its own separate Chapter 11 case. According to T-L Cherokee's first amended joint disclosure statement filed on May 13, 2014, its operational and profitability problems were principally due to the general economic problems facing the nation and the real estate industry over the last several years. Cole Taylor financed T-L Cherokee's purchase of real property in 2004 through a loan for $5.7 million. That loan is currently evidenced by a third amended and restated promissory note dated December 31, 2010, payable to Cole Taylor in the principal amount of 15 million. Richard M. Bendix, Jr., Esq., at Dykema Gossett PLLC, in Chicago, Illinois, relates that T-L Cherokee's obligations to Cole Taylor under the note are secured by a mortgage on the real property, a security interest in the real property's rents, a security interest in and lien upon T-L Cherokee's personal property. Under the terms of the last amendments of the loan, T-L Cherokee's note matured on March 31, 2014. As of filing for bankruptcy, Cole Taylor asserts that T-L Cherokee owes it $14,484,781 under the note. This amount continues to increase as additional interest and fees accrue. On March 4, 2014, the Court entered an order terminating the T-L Cherokee's exclusive right to file a plan of reorganization, thereby permitting Cole Taylor to file its plan and disclosure statement. In Cole Taylor's plan, there are six classes of claims and interests. Classes 2 and 3 are unimpaired and are presumed to have accepted the plan. Classes 1, 4-6 are impaired and may vote on the plan. Cole Taylor's plan provides for the liquidation of all of T-L Cherokee's assets on a going concern basis. As a result, the payments proposed by Cole Taylor to creditors and interest holders under the plan are not less than the amounts the creditors and interest holders would receive or retain if T-L Cherokee were liquidated under Chapter 7 of the Bankruptcy Code, notes Mr. Bendix. Cole Taylor is represented by: Richard M. Bendix, Jr. Maria A. Diakoumakis DYKEMA GOSSETT PLLC 10 S. Wacker Street, Suite 2300 Chicago, IL 60606 Tel: 312-876-1700 Fax: 312-627-2302 E-mail: rbendix@dykema.com mdiakoumakis@dykema.com About T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10 million to $50 million. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. TLC HEALTH: Can Access Cash Collateral Until July 16 ---------------------------------------------------- The Bankruptcy Court, in a second final order, authorized TLC Health Network to use the cash collateral and incur indebtedness until July 16, 2014. Secured creditors -- Brooks Memorial Hospital, Community Bank, N.A., University of Pittsburg Medical Center, and the Dormitory Authority of the State of New York -- assert an interest in the cash collateral. As reported in the TCR on Jan. 2, 2014, the cash collateral will be used in the operation of the Debtor's health care facilities, treatment of patients, the marketing and sale of the Debtor's assets, funding the administrative expenses during the bankruptcy proceeding, and preservation and maximization of the value of the Debtor's estate. Committee's Challenge Period UPMC responded to the motion of the Official Committee of Unsecured Creditors to extend the time for the Committee to challenge liens of secured lenders, stating that if the Committee is granted the relief, it may serve to cloud UPMC's rights as a holder of a valid, perfected, secured claim in the upcoming sale process. UPMC was among several secured creditors holding, inter alia, a security interest in the Debtor's cash collateral. Through various interim consent orders, the Debtor has been authorized on a consensual basis to utilize cash collateral, and UPMC was provided agreed-upon adequate protection for its secured claims. Brooks Memorial Hospital has also asked the Court to deny the Committee's motion. On June 3, the Committee requested that the Court extend the time to challenge liens of the secured lenders until June 30, 2014. The Committee said it has been in the process of investigating the nature of the relationship between the Debtor and its secured creditors in the case including UPMC and Brooks. As reported in the Troubled Company Reporter on Jan. 20, 2014, the Debtor requested for authorization to access the cash collateral in which Brooks Memorial Hospital, Community Bank, N.A., UPMC, and the Dormitory Authority of the State of New York assert an interest. About TLC Health Network TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 13-13294) on Dec. 16, 2013. The petition was signed by Timothy Cooper as Chairman of the Board. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., serves as the Debtor's counsel. Damon & Morey LLP is the Debtor's Special Health Care Law and Corporate Counsel. The Bonadio Group is the Debtor's accountants. Howard P. Schultz & Associates, LLC is the Debtor's appraiser. The case is assigned to the Hon. Carl L. Bucki. A three-member panel composed of Cannon Design, Chautauqua Opportunities, Inc., and Jamestown Rehab Services has been appointed as the official unsecured creditors committee. Bond, Schoeneck & King, PLLC is the counsel to the Committee. The Committee has tapped NextPoint LLC as financial advisor. Gleichenhaus, Marchese & Weishaar, PC is the general counsel for Linda Scharf, the Patient Care Ombudsman of TLC Health. TLC HEALTH: July 15 Auction of All Assets ----------------------------------------- TLC Health Network filed an amended notice of auction and sale of substantially all of their assets, stating that it has corrected the year of the auction date. The auction of the assets will commence on July 15, 2014, at 10:00 a.m., at the office of Bond, Schoeneck & King PLLC, 40 Fountain Plaza, Suite 600, Buffalo, New York. Qualified bids are due July 11. Anyone interested in pursuing a bid for the Debtor's assets or desires a copy of the motion, the proposed agreement, and the procedures order must contact: MENTER, RUDIN & TRIVELPIECE, P.C. Attn: Jeffrey A. Dove, Esq. 308 Maltbie Street, Suite 200 Syracuse, NY 13204-1439 Tel: (315) 474-7541 E-mail: jdove@menterlaw.com A hearing to approve the sale to any successful bidder will be held on July 17, at 1:00 p.m. On June 10, the Court authorized the Debtor to sell its assets. The matter was discussed at the June 9 hearing. The Debtor, in its motion, said that it believes that a sale of its assets to an interested party will maximize the value of the Debtor's estate and will represent the best possible outcome for the case. The Debtor continues to lose money on operations, and does not have financing available to continue to operate while it seeks a definitive contract to sell or refinance its assets. According to the Debtor, their assets currently secure financing in the amount of approximately $1.88 million, and are anticipated to secure an additional $500,000 by the time of the sale hearing. The Debtor does not currently have a contract with a purchaser that may serve as a stalking horse bidder and, as a result, all potential purchasers will compete on a level playing field in connection with their efforts to acquire the Debtor's assets A copy of the procedures is available for free at http://bankrupt.com/misc/TLCHEALTH_391_sale.pdf About TLC Health Network TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 13-13294) on Dec. 16, 2013. The petition was signed by Timothy Cooper as Chairman of the Board. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., serves as the Debtor's counsel. Damon & Morey LLP is the Debtor's Special Health Care Law and Corporate Counsel. The Bonadio Group is the Debtor's accountants. Howard P. Schultz & Associates, LLC is the Debtor's appraiser. The case is assigned to the Hon. Carl L. Bucki. A three-member panel composed of Cannon Design, Chautauqua Opportunities, Inc., and Jamestown Rehab Services has been appointed as the official unsecured creditors committee. Bond, Schoeneck & King, PLLC is the counsel to the Committee. The Committee has tapped NextPoint LLC as financial advisor. Gleichenhaus, Marchese & Weishaar, PC is the general counsel for Linda Scharf, the Patient Care Ombudsman of TLC Health. US CAPITAL: Mapuche Sues 321 North Lender Over Onerous Debt Scheme ------------------------------------------------------------------ U.S. Capital Holdings on June 19 disclosed that a lender to 321 North concocted an onerous debt scheme that was actually an underhanded attempt to wrest 321 North from Mr. Wei Chen, a part-owner and corporate manager, according to a lawsuit filed June 16 in state court. On behalf of the project's owner, Mapuche LLC, Mr. Chen charges that two Chinese businessmen and companies in China and Singapore acted in secret to put Mapuche so far in debt that they could take the former Fashion Mall through foreclosure. According to the lawsuit, "Defendants worked together to divest Mapuche of its interest in the Fashion Mall through an oppressive and fraudulent loan contract which they knew Mapuche would never be able to repay." This legal action follows a lawsuit that Mr. Chen filed in May against Zhen Zeng Du and Tangsgan Ganglu Iron & Steel Co. Ltd. charging that Mr. Du used false promises and later false accusations to acquire a majority interest in Mapuche and later tried to take control of 321 North. A lawsuit brought by Mr. Du and Ganglu against Mr. Chen was dismissed on May 20. Mr. Chen prevailed on a motion to dismiss due to lack of federal court jurisdiction over the case. Mr. Chen first learned of the loan two years after it was executed in Zunhua, China from an attachment to that lawsuit. Mr. Chen formed US Capital Holdings in 2004 to purchase the former Fashion Mall. The goal was to redevelop the shuttered property as a live, work, dine, shop, play, stay destination that integrates retail, high-end dining and entertainment offerings, high-quality offices, and residences with an existing, on-site hotel. US Capital Holdings had filed for protection under bankruptcy laws in 2012. Mr. Du promised in March of that year that Ganglu, which owns 80 percent of Mapuche, would loan the project nearly $50 million, according to the lawsuit. During the discussions, Mr. Du hid from Mr. Chen the fact that two months earlier, he had arranged a $50 million loan from a Singapore company, Bo Rui Investment, according to the latest lawsuit. A record from the Singapore government website indicated that the Bo Rui Investment was registered on May 25, 2012, four months after the loan contract was signed. Xianquan Meng signed for that company; as deputy chairman of the board of directors of Ganglu, he has close ties to Mr. Du. Mr. Du signed on behalf of Mapuche without telling Mr. Chen, despite the fact that Mr. Chen owns the other 20 percent of the company, according to the lawsuit. As collateral, Mr. Du gave Mr. Meng's company rights to take control of the company and 321 North. The one-year loan carried an 18 percent interest rate that jumped to 25 percent in return for a one-year extension. The rate climbed to 30 percent if the loan was extended again beyond two years. If Mapuche defaulted, the lender could sue in the People's Court in China. In the two years that have passed, Bo Rui has never contacted Mapuche or sought repayment, according to the lawsuit. Mapuche further alleges that while the funds appeared to come from Bo Rui, they in fact were supplied by Ganglu as part of an effort by Mr. Du to gain control of 321 North. As manager, only Mr. Chen is authorized to enter loans on behalf of Mapuche, according to the company's corporate document. On behalf of the company, he is suing Mr. Du, Mr. Meng, Ganglu and Bo Rui. He is asking the court to void the loan agreement and award damages against the defendants. About US Capital Holdings US Capital Holdings, LLC, and an affiliate, US Capital/Fashion Mall, LLC, filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 12-14517 and 12-14519) in Forth Lauderdale, Florida, on Feb. 24, 2012. US Capital/Fashion Mall is the owner of the former "Fashion Mall at Plantation", now vacant, located at 321 N. University Drive, in Plantation, Florida. US Capital Holdings is the 100% owner of US Capital/Fashion Mall. The mall -- http://www.321north.com-- is presently dormant, in part, as a result of a redevelopment plan for the mall of a project called 321 North, which is intended to be a major, retail, office and residential project. The mall suffered extensive hurricane damage from Hurricane Wilma, and has yet to be paid on its insurance claim. Judge John K. Olson presides over the case. The Debtor listed assets of $11,496 and liabilities of US ECOLOGY: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to US Ecology Inc. The outlook is stable. At the same time, S&P assigned a senior secured debt rating of 'BB+' (one notch higher than the corporate credit rating) and a recovery rating of '2' to US Ecology's seven-year $415 million term loan. The company has a five-year $125 million revolving credit facility that S&P' do not rate. US Ecology used the proceeds from the issuance to acquire EQ-The Environmental Quality Co. and to pay for associated transaction fees. The transaction price of $465 million represents an approximately 8.6x multiple based on management's estimate of EQ's fiscal 2013 adjusted EBITDA of $54 million. "The ratings on US Ecology reflect our assessment of its 'fair' business risk profile and 'significant' financial risk profile," said Standard & Poor's credit analyst James Siahaan. Boise, Idaho-based US Ecology employs over 450 professionals who provide radioactive, hazardous, polychlorinated biphenyl (PCB), and nonhazardous industrial waste management services to commercial and government entities, such as refineries and chemical production facilities, manufacturers, electric utilities, steel mills, medical and academic institutions, and waste brokers. The company has provided radioactive waste services since 1952 and hazardous waste services since 1968. Wayne, Michigan-based EQ is an integrated environmental services company with over 1,250 employees across 26 service centers and 13 treatment and disposal facilities. It owns certified treatment, disposal, and recycling facilities and provides remediation, industrial cleaning, and total waste management services in North America. The stable outlook reflects S&P's expectation that US Ecology will be able to integrate its acquisition of EQ without significant difficulties and obtain its projected level of synergies. S&P expects the company's pro forma credit measures to remain appropriate for the "significant" financial risk profile during the next year, including FFO to debt of 20% to 30%. S&P could consider an upgrade if the company's integration of EQ proceeds smoothly and US Ecology either improves its cash flow via additional waste volumes processed, or reduces its debt to the extent that its FFO to debt ratio appears likely to increase to and remain above 30% sustainably. Based on publicly held US Ecology's history of modest debt leverage, and management's commitment to adhere to prudent debt usage following the transaction, the cash flow leverage metrics could strengthen during the next few years. S&P could consider a downgrade if the pro forma FFO to debt ratio remains below 20% without clear prospects of recovery in the medium term. This may happen if the integration of the acquired business is not successful, if there is a sharp decline in event business which is less stable compared with the base business, or if management chooses to adopt more aggressive financial policies. VERITY CORP: Ronald Kaufman Appointed as President -------------------------------------------------- Verity Corp. appointed Ronald Kaufman as president effective June 10, 2014. Mr. Kaufman, age 57, has been a member of the Company's Board of Directors since Oct. 21, 2013. Mr. Kaufman has been a professional crop and live-stock farmer since 1976. Mr. Kaufman has served on the boards of Farmers Home Association and the Kingsbury County Crop Improvement Board. There is no understanding or arrangement between Mr. Kaufman and any other person pursuant to which Mr. Kaufman was selected as an officer. Mr. Kaufman does not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or executive officer, except that he is the nephew of Duane Spader, a member of the Board of Directors. Appointment of James White as Director On June 10, 2014, the Company appointed James White, age 62, as a member of the Company's Board of Directors. Mr. White has been chief operating officer of the Company since November 2013. In 2004, Mr. Wright founded JLW Communications, a consulting company for sales, marketing and strategic management, including five years of consulting work for the Company. Mr. Wright previously served as president of Triumph Boats, president of McCulloch Corporation and vice president of Deere & Company. There is no understanding or arrangement between Mr. White and any other person pursuant to which Mr. White was selected as an officer. Mr. White does not have any family relationship with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer. Appointment of Richard Kamolvathin as Chairman On June 10, 2014, Richard Kamolvathin was appointed as Chairman of the Board of Directors of the Company. On the same date he also resigned as president of the Company. Mr. Kamolvathin will continue to serve as chief executive officer and a member of the Board of Directors of the Company. In submitting his resignation, Mr. Kamolvathin did not express any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Grants 6.3 Million Shares Verity granted an aggregate of 6,350,000 shares of common stock to be issued to certain officer, directors, employees and other providing services to the Company, in consideration of those services. Of that amount, 1,000,000 will be granted to the Company's chief operating Officer, James White, for services in 2015. Those shares were granted pursuant to the exemption provided under Section 4(a)(2) of the Securities Act of 1933. About Verity Sioux Falls, South Dakota-based Verity Corp., formerly AquaLiv Technologies, Inc., is the parent of Verity Farms II, Inc., Aistiva Corporation (formerly AquaLiv, Inc.). Verity Farms II is dedicated to providing consumers with safe, high-quality and nutritious food sources through sustainable crop and livestock production. Aistiva's technology alters the behavior of organisms, including plants and humans, without chemical interaction. Aistiva's platform technology influences biological processes naturally and without chemical interaction. To date, Aistiva has released products in the industries of water treatment, skincare, and agriculture. Verity Corp. reported a net loss attributable to the Company of $7.59 million for the year ended Sept. 30, 2013, as compared with a net loss attributable to the Company of $623,079 during the prior fiscal year. Bongiovanni & Associates, CPA's, in Cornelius, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has suffered recurring losses, has negative working capital, and has yet to generate an internal net cash flow that raises substantial doubt about its ability to continue as a going concern. VERMONT SITEWORKS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Vermont Siteworks, Inc. PO Box 1209 Morrisville, VT 05661 Case No.: 14-10360 Chapter 11 Petition Date: June 18, 2014 Court: United States Bankruptcy Court District of Vermont (Rutland) Judge: Hon. Colleen A. Brown Debtor's Counsel: Rebecca A Rice, Esq. COHEN & RICE 26 West St, Ste 1 Rutland, VT 05701-3274 Tel: (802) 775-2352 Email: Steeplbush@aol.com Total Assets: $2.29 million Total Liabilities: $2.54 million The petition was signed by Nathan Wagner, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/vtb14-10360.pdf VERSO PAPER: Achieves Early Compliance with NYSE Listing Standard ----------------------------------------------------------------- The New York Stock Exchange has notified Verso Paper Corp. that it has achieved early compliance with the NYSE's market capitalization continued listing standard. The NYSE requires, among other things, that Verso maintain an average market capitalization over a consecutive 30 trading-day period of at least $50 million. As of the close of trading on June 16, Verso's average market capitalization over the prior 30 consecutive trading days was approximately $133 million. The NYSE stated in the notice that its decision was based on Verso's consistent positive performance with respect to the business plan that we submitted to the NYSE in January 2014 and our achievement of compliance with the NYSE's minimum market capitalization requirement over the past two quarterly review periods. The NYSE originally had permitted Verso until February 2015 in which to regain compliance with the market capitalization continued listing standard. As a result of this development, Verso is no longer facing delisting from the NYSE. About Verso Paper Corp. Verso Paper Corp. -- http://www.versopaper.com-- is a North American producer of coated papers, including coated groundwood and coated freesheet, and specialty products. Verso is headquartered in Memphis, Tennessee, and owns three paper mills located in Maine and Michigan. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising. VISUALANT INC: Unit Renews $1MM Credit Facility with BFI Business ----------------------------------------------------------------- TransTech Systems, Inc., a wholly owned subsidiary of Visualant, Inc., on Dec. 9, 2008, entered into a $1,000,000 secured credit facility with BFI Business Finance to fund its operations. On June 12, 2014, the secured credit facility was renewed for an additional six months, with a floor for prime interest of 4.5% (currently 4.5%) plus 2.5%. The eligible borrowing is based on 80% of eligible trade accounts receivable, not to exceed $1,000,000. The secured credit facility is collateralized by the assets of TransTech Systems with a guarantee by Visualant, including all assets of Visualant. Visualant believes any default would be satisfied by the assets of TransTech. About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $6.60 million for the year ended Sept. 30, 2013, as compared with a net loss of $2.72 million for the year ended Sept. 30, 2012. As of March 31, 2014, the Company had $3.48 million in total assets, $8.76 million in total liabilities, $69,604 in noncontrolling interest and a $5.34 million total stockholders' deficit. PMB Helin Donovan, LLP, in Seattle, Washington, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. WAVE SYSTEMS: To Complete $9.9 Million Stock Offering ----------------------------------------------------- Wave Systems Corp. said it is selling to investors 5,225,560 shares of its common stock at a price of $1.90 per share. Investors in the offering will also receive five-year warrants to purchase an aggregate of 2,090,224 shares of Wave's Class A common stock for $1.90 per share. The offering is expected to close on or about June 17, 2014, subject to the satisfaction of customary closing conditions. The total gross proceeds of the offering are $9,928,564. Wave currently intends to use the net proceeds from this offering for working capital and general corporate purposes. Craig-Hallum Capital Group LLC acted as the exclusive placement agent for the offering. A shelf registration statement relating to these securities was declared effective by the Securities and Exchange Commission on Sept. 12, 2013. Also on June 11, 2014, Craig-Hallum Capital Group LLC entered into a placement agency agreement with Wave in which they agreed to act as placement agent in connection with the offering. In connection with the offering, Wave paid the Placement Agent a cash fee of approximately $695,000, equal to 7 percent of the gross proceeds paid to Wave in connection with the offering. About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. Wave Systems reported a net loss of $20.32 million in 2013, a net loss of $33.96 million in 2012 and a net loss of $10.79 million in 2011. KPMG LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. WAVEDIVISION HOLDINGS: Add-on Notes No Impact on Moody's B2 CFR --------------------------------------------------------------- Moody's Investors Service said that the proposed $25 million increase to $175 million from the originally expected $150 million Senior PIK Toggle Notes of Wave Holdco, LLC (Wave Holdco), a newly created holding company which owns 100% of WaveDivision Holdings, LLC (Wave), does not impact Wave's B2 Corporate Family Rating, the negative outlook, or other instrument ratings. The company plans to place approximately half of the incremental $25 million at Wave Holdco as cash available for interest expense on the proposed bonds and use the remainder to fund a larger dividend to its shareholders, Oak Hill Capital Partners, GI Partners, and management. Moody's updated point instruments as shown. Wave HoldCo, LLC Senior Unsecured Bonds, Caa1, LGD adjusted to LGD6, 92% from LGD6, 93% WaveDivision Holdings, LLC Senior Secured Bank Credit Facility, Ba3, LGD adjusted to LGD2, 25% from LGD2, 26% Senior Unsecured Bonds, B3, LGD adjusted to LGD5, 73% from LGD5, 75% Ratings Rationale The upsize would increase leverage to about 7.1 times debt-to- EBITDA from 5.9 times prior to the dividend and 6.9 times estimated for the originally proposed Wave Holdco bond offering of $150 million (all based on trailing twelve months through March 31). However, Moody's believes the excess cash provides better liquidity to manage the growth investment. Also, Moody's believes interest expense will be slightly lower than original expectations based on favorable market reception of the deal. The principal methodology used in this rating was the Global Pay Television - Cable and Direct-to-Home Satellite Operators published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Kirkland, Washington, and owned by Oak Hill Capital Partners, GI Partners, and management, WaveDivision Holdings, LLC provides cable television, high speed data and telephone services to residential and commercial customers in and around the Seattle, Sacramento, San Francisco, and Portland markets. Its annual revenue is approximately $300 million. WAVEDIVISION HOLDINGS: S&P Revises Outlook & Affirms 'B+' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Kirkland, Wash.-based cable service provider WaveDivision Holdings LLC (Wave) to negative from stable. At the same time, S&P affirmed all other ratings, including the 'B+' corporate credit rating and 'B-' issue-level rating on holding company Wave Holdco LLC's proposed senior PIK toggle notes due 2019, which the company is upsizing by $25 million, to $175 million. The recovery rating on the notes is '6', which indicates S&P's expectation for negligible (0%-10%) recovery in the event of payment default. S&P expects proceeds from the $175 million of PIK toggle notes will fund a $159 million dividend to shareholders, add around $13 million of cash at the holding company, and pay about $4 million of related fees and expenses. "The outlook revision reflects the potential for lower ratings because leverage, pro forma for the proposed notes upsize, is higher than our previous expectation at about 7.1x," said Standard & Poor's credit analyst Allyn Arden. "As a result, we are more uncertain as to whether the company will be able to reduce leverage to below 6.5x over the next year, despite favorable operating trends. The 6.5x leverage parameter is a key threshold for the current ratings." Standard & Poor's view of Wave's business risk profile reflects its demographically attractive and well-clustered cable properties, healthy EBITDA margins, and good capabilities to serve business customers. However, the company faces significant competition from incumbent telephone companies and satellite television providers. Wave is also an over-builder (a competitor to the local cable TV company) in about one-third of its footprint where it competes with incumbent cable provider Comcast Corp. Additionally, Wave's penetration levels for video, data, and telephone service are below the industry average. These factors lead to our view of a "satisfactory" business risk profile. S&P could lower the ratings if Wave's operating performance is below its expectations such that leverage remains above 6.5x for a sustained period. WEST CORP: Plans to Offer $1 Billion Senior Notes ------------------------------------------------- West Corporation disclosed its intention to offer $1 billion aggregate principal amount of senior notes due 2022. Proceeds of the Notes, together with cash on hand, will be utilized to repurchase all of its outstanding $500 million in aggregate principal amount of 8.625% Senior Notes due 2018, up to $200 million of its $650 million in aggregate principal amount of 7.875% Senior Notes due 2019 and repay a portion of its Senior Secured Term Loan Facility due 2018. The Notes will be offered in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes will be offered only to qualified institutional buyers pursuant to Rule 144A and to certain persons outside of the United States pursuant to Regulation S, each under the Securities Act. The Notes have not been registered under the Securities Act or any applicable state securities laws, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. Additional information is available for free at: http://is.gd/wGSWLf About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. West Corp posted net income of $143.20 million in 2013, as compared with net income of $125.54 million in 2012. The Company's balance sheet at March 31, 2014, showed $3.54 billion in total assets, $4.25 billion in total liabilities and a $709.40 million total stockholders' deficit. Bankruptcy Warning "If we cannot make scheduled payments on our debt, we will be in default, and as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our Senior Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing our borrowings; and * we could be forced into bankruptcy or liquidation," the Company said in its quarterly report for the period ended March 31, 2014. * * * As reported by the TCR on June 21, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Omaha, Neb.-based business process outsourcer West Corp. to 'BB-' from 'B+'. The upgrade reflects Standard & Poor's view that lower debt leverage and a less aggressive financial policy will strengthen the company's financial profile. In the April 4, 2013, edition of the TCR, Moody's Investor Service upgraded West Corporation's Corporate Family Rating to B1 from B2. "The CFR upgrade to B1 reflects West's shift to a more conservative capital structure and financial policies as a publicly owned company", stated Moody's analyst Suzanne Wingo. WEST CORP: S&P Affirms 'BB-' CCR; Outlook Stable ------------------------------------------------ Standard & Poor's Ratings Services affirmed all existing ratings, including the 'BB-' corporate credit rating, on Omaha, Neb.-based business process outsourcer West Corp. The rating outlook is stable. At the same time, S&P assigned the company's issued $350 million senior secured term loan A due 2019 an issue-level rating of 'BB' (one notch above the 'BB-' corporate credit rating on the company), with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for bondholders in the event of a payment default. In addition, S&P assigned the company's issued $1 billion senior notes due 2022 its issue-level rating of 'B+' (one notch below the 'BB-' corporate credit rating on the company), with a recovery rating of '5', indicating S&P's expectation for modest (10% to 30%) recovery for bondholders in the event of a payment default. The company will use the proceeds of the notes, the term loan, and some additional credit revolving capacity to refinance its existing senior bonds, repay a portion of its term loan B, and fund the acquisition of Health Advocate Inc. "In our view, the rating on West Corp. reflects our expectation that leverage will remain relatively high, in the 4x to 5x area over the intermediate term, as the company will continue its acquisition-oriented growth strategy, albeit under a less aggressive financial policy. This expectation underscores our assessment of West Corp.'s financial risk profile as "aggressive" (based on our criteria). West Corp. has been an active acquirer of automated business services companies as it seeks to expand its presence in higher-margin areas. We view the company's business risk profile as "fair," based on its good EBITDA margin and zelative stability of revenue. We believe these dynamics will result in West achieving low- to mid-single-digit percentage revenue and EBITDA growth, on average, over the intermediate term, with leverage gradually declining following a near-term increase," S&P said. West Corp. is a business process outsourcer of conferencing services, public safety services, automated alerts, notifications services, and agent-based and automated call center services, with operations in the U.S., the U.K., and many other countries. The company has a good EBITDA margin and competitive position in the fragmented, highly competitive market for communication services. West Corp. competes with larger peers with significant offshore operations, and often competes with clients' in-house capabilities. The market for conferencing services is competitive, despite healthy margins. West Corp. strives to increase call volume and reduce costs to offset steadily declining pricing, which it has generally accomplished. This trade-off will likely hurt its EBITDA margin over time. Nonetheless, S&P believes longer-term trends generally will continue to favor outsourcers such as West Corp., as companies continue outsourcing noncore functions to extract operating efficiencies. WEST CORP: Completes Health Advocate Acquisition ------------------------------------------------ West Corporation has completed the acquisition of Health AdvocateTM, Inc., an independent provider of healthcare advocacy services. "We are pleased to welcome Health Advocate employees and clients to West," said Tom Barker, chairman and chief executive officer of West Corporation. "The expertise of the team at Health Advocate, as well as the impressive business they have built, will help us leverage our technology and expertise to bring efficiencies to the healthcare industry." The purchase price for Health Advocate was approximately $265 million and was funded with approximately $80 million of cash and $185 million borrowed from the Company's revolving trade accounts receivable financing facility at a variable interest rate, currently 1.58 percent. Updated 2014 Guidance The Company has updated a portion of its 2014 guidance to include its revised expectations for the remainder of 2014 and the results of SchoolMessenger and Health Advocate. The Company now expects consolidated revenue of $2.7 - $2.8 billion for 2014. The Company reaffirms its prior guidance of $185-$200 million with respect to 2014 net income. About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. West Corp posted net income of $143.20 million in 2013, as compared with net income of $125.54 million in 2012. The Company's balance sheet at March 31, 2014, showed $3.54 billion in total assets, $4.25 billion in total liabilities and a $709.40 million total stockholders' deficit. Bankruptcy Warning "If we cannot make scheduled payments on our debt, we will be in default, and as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our Senior Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing our borrowings; and * we could be forced into bankruptcy or liquidation," the Company said in its quarterly report for the period ended March 31, 2014. * * * As reported by the TCR on June 21, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Omaha, Neb.-based business process outsourcer West Corp. to 'BB-' from 'B+'. The upgrade reflects Standard & Poor's view that lower debt leverage and a less aggressive financial policy will strengthen the company's financial profile. In the April 4, 2013, edition of the TCR, Moody's Investor Service upgraded West Corporation's Corporate Family Rating to B1 from B2. "The CFR upgrade to B1 reflects West's shift to a more conservative capital structure and financial policies as a publicly owned company," stated Moody's analyst Suzanne Wingo. YORK, PA: S&P Lowers Sewer Debt Rating to 'BB+'; Outlook Stable --------------------------------------------------------------- Standard & Poor's Rating Services said that it lowered its underlying (SPUR) rating on York, Pa's outstanding general obligation (GO) and York City Sewer Authority guaranteed sewer debt to 'BB+' from 'BBB-'. The outlook is stable. "The lower rating is based on our local GO criteria published Sept. 12, 2013," said Standard & Poor's credit analyst Timothy Barrett. The bonds are GOs of the city and are secured by its full faith and credit pledge. "The rating reflects our assessment of the city's very weak budgetary flexibility and weak budgetary performance," said Mr. Barrett, "along with its very weak debt and contingent liability position." Other factors include its: -- Adequate management conditions; -- Weak economy, characterized by low wealth and income levels but, with benefits from the broad and diverse York-Hanover metropolitan statistical area (MSA); and -- Strong liquidity providing strong cash to cover debt service and expenditures. "The stable outlook reflects measures taken by management to achieve structural balance to the budget and stem further financial deterioration," said Mr. Barrett. It is anticipated that York will identify further gap-closing actions to ensure structurally balanced budgets in subsequent years. Due to years of structural imbalance and drawdowns in general fund reserves and cash, liquidity remains pressured. In response to budget pressures, the city has delayed pension payments since 2007, which, in turn, has increased the pension liability. Improvement to the rating depends on the city's ability to maintain balanced financial operations and positive general fund reserves. Should the city revert back to structural budgetary imbalances, further reducing liquidity or reserves, S&P could lower the rating. YMCA OF MILWAUKEE: Employs Ernst & Young as Financial Advisors -------------------------------------------------------------- The Young Men's Christian Association of Metropolitan Milwaukee, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to employ Ernst & Young LLP as their financial advisors. The professional services that E&Y will render postpetition are to generally provide financial advisory services to the Debtors during their reorganization process. More specifically, E&Y will continue assisting the Debtors in preparation of their schedules, and the creation of cash-flow analyses to support cash collateral use; will support the Debtors in the preparation of their monthly operating reports; and will prepare and, if necessary, support in court, all financial analyses required for the Debtors' plans and disclosure statements. The professionals of E&Y who will be handling the matters will all work on a blended hourly rate of $450. The Debtors anticipate that E&Y will incur charges for its services in the amount ranging from $395,000 to $615,000. The firm assures the Court that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About YMCA of Milwaukee The Young Men's Christian Association of Metropolitan Milwaukee, Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014. YMCA Milwaukee, which has more than 100,000 members using its centers and camps, plans to sell a majority of its owned real estate to help pay down $29 million in debt. YMCA Milwaukee estimated $10 million to $50 million in both assets and liabilities. YMCA Academy estimated $100,000 to $500,000 in both assets and liabilities. The formal schedules of assets and liabilities are due June 18, 2014. The Debtors are seeking joint administration of their Chapter 11 cases for procedural purposes. The cases are assigned to Judge Susan V. Kelley. The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz, Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel. YMCA OF MILWAUKEE: Taps Reputation Partners as PR Advisors ---------------------------------------------------------- The Young Men's Christian Association of Metropolitan Milwaukee, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to employ Reputation Partners, L.L.C., as their public relations advisors, to advise the Debtors concerning their overall communication strategy across a wide variety of audiences; to develop, create and disseminate written materials; and to assist and support the Debtors with ongoing media management in connection with the Chapter 11 cases. The primary professionals of RP who will be handling the above matters and their current standard hourly rates are as follow: Name Position Hourly Rate ---- -------- ----------- Megan Hakes Executive Vice-President $295 and Co-Founder Nick Kalm President and CEO $325 Brendan Griffith Senior Associate $190 Vanessa Igel Senior Associate $190 Jacob Kuss Account Coordinator $190 The Debtor anticipates that RP will incur charges for its services in the amount ranging from $100,000 to $150,000. The firm assures the Court that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About YMCA of Milwaukee The Young Men's Christian Association of Metropolitan Milwaukee, Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014. YMCA Milwaukee, which has more than 100,000 members using its centers and camps, plans to sell a majority of its owned real estate to help pay down $29 million in debt. YMCA Milwaukee estimated $10 million to $50 million in both assets and liabilities. YMCA Academy estimated $100,000 to $500,000 in both assets and liabilities. The formal schedules of assets and liabilities are due June 18, 2014. The Debtors are seeking joint administration of their Chapter 11 cases for procedural purposes. The cases are assigned to Judge Susan V. Kelley. The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz, Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel. YMCA OF MILWAUKEE: Proposes Aug. 8 Claims Bar Date -------------------------------------------------- The Young Men's Christian Association of Metropolitan Milwaukee, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin to fix Aug. 8, 2014, as the deadline for creditors to file proofs of claim. The Debtors said in papers filed with the Court that they must first ascertain the total universe of claims they need to address before they can properly classify claims, evaluate a reorganization plan's feasibility, and solicit creditors' votes. About YMCA of Milwaukee The Young Men's Christian Association of Metropolitan Milwaukee, Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014. YMCA Milwaukee, which has more than 100,000 members using its centers and camps, plans to sell a majority of its owned real estate to help pay down $29 million in debt. YMCA Milwaukee estimated $10 million to $50 million in both assets and liabilities. YMCA Academy estimated $100,000 to $500,000 in both assets and liabilities. The formal schedules of assets and liabilities are due June 18, 2014. The Debtors are seeking joint administration of their Chapter 11 cases for procedural purposes. The cases are assigned to Judge Susan V. Kelley. The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz, Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel. YSC INC: Court Allows Sale of Federal Inn to Richard Song --------------------------------------------------------- The Bankruptcy Court lifts the obligation of YSC, Inc., to sell Federal Way Comfort Inn to the originally-approved buyer Sandhu NW Hospitality, LLC, due to Sandhu's failure to close the purchase by the May 10, 2014 agreed closing date. Sandhu is also relieved from obligation to buy the inn. The property will instead be sold to Richard Song pursuant to a Court-approved purchase and sale agreement dated March 13, 2014. Pertinent terms of the sale agreement are as follows: (a) the real estate commission to broker Sam Lee will be 1.5% of the purchase price; (b) Mr. Song will deposit $100,000 in escrow, while $900,000 will be held back in escrow from the sale proceeds to pay potential capital gains taxes resulting from the sale; and (c) Sale closing is on June 17, 2014. YSC is represented by: Emily Jarvis, Esq. WELLS AND JARVIS, P.S. 500 Union Street, Ste. 502 Seattle, WA 98101 Sandhu is presented by: Steve Burnham, Esq. CAMPBELL, DILLE, BARNETT & SMITH, PLLC 317 South Meridian Puyallup, WA 98371 Tel: 253-848-3513 Fax: 253-845-4941 E-mail: steveb@cdb-law.com 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). YSC INC: Asks Court Impose Stay for Whidbey Island Bank ------------------------------------------------------- YSC, Inc. asks the Court not to lift the stay for Whidbey Island Bank, thus allowing YSC's sale of Comfort Inn to Sang Yims to proceed. If the Court is inclined to lift the stay, YSC would request an evidentiary hearing given the wildly divergent opinions as to the value of the Ramada Inn. Emily Jarvis, Esq., at Wells and Jarvis, P.S., in Seattle, Washington, asserts that a party seeking to lift the stay has the burden of proof on the issue of equity. Whidbey Island Bank has provided the value of only the Ramada Inn, for $12.8 million. No appraisals or other information have been filed for the Comfort Inn or Sang Yims' personal residence. Both of these properties are also security for Whidbey Island Bank's loan and therefore are essential components of the question of equity. YSC contends that Whidbey Island Bank has failed to meet its burden. Whidbey Island Bank does appear to have provided new information regarding the valuation of the Ramada Inn through the motion it filed in the companion case of the Sang Yims. The bank filed a second appraisal by Donald Heischman asserting a value that is $4.8 million less than the appraisal the bank has filed in the YSC, Inc. case. Given the substantial reduction from the first appraisal (37.5%), YSC views this latest report with suspicion. By Mr. Heischman's own admission, the second report is based on atypical parameters. Ms. Jarvis notes that normally the appraiser would have conducted a full interior inspection of the property including a review of furniture, fixtures and equipment, but in this instance did not because he was instructed not to do so by the bank. Further, he did not contact the managers to request updated income statements, occupancy rates or PIP information, as he normally would have, again on the instructions of the bank. Instead Mr. Heischman apparently relied upon income/expense statements from 2012 and 2011. YSC would have cooperated with an interior review and requests for information but it appears the bank preferred this more limited, outdated approach, presumably knowing that the market has improved and the number would be lower. As set forth in Sang Yim's declaration, YSC has continued to see improved profitability. Income and occupancy statistics from two and three years ago are clearly inaccurate for the present value. The bank's more recent reported value of $8 million is belied by the $12 million offer which YSC received earlier this year on the Ramada Inn. The Ramada Inn is necessary for both reorganizations, says Ms. Jarvis. Reorganization should be feasible upon sale of the Comfort Inn. 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). * BofA Sways Judge to Reconsider SEC Mortgage Lawsuit ----------------------------------------------------- Erik Larson, writing for Bloomberg News, reported that Bank of America Corp. swayed a judge to rethink his tentative opinion that a U.S. Securities and Exchange Commission lawsuit over the issuance of $850 million in mortgage-backed securities should go forward. According to the report, the SEC claims the lender failed to file documents with the regulator that it gave potential investors in the securities, which later plummeted in value, obscuring the fact the buyers got false information. At a hearing on June 11 in federal court in Asheville, North Carolina, lawyers for the bank argued that SEC rules governing such disclosures were unclear, the report related. The case is U.S. v. Bank of America Corp. (BAC), 13-cv-00446, U.S. District Court, Western District of North Carolina (Charlotte). * Bank Regulators Finalize Stricter Tax Refund Guidance ------------------------------------------------------- Law360 reported that federal banking regulators finalized guidance forcing bank holding companies to clarify the legal relationship to their subsidiaries, a change the government said will help clear up tax disputes that have arisen during bankruptcy proceedings. According to the report, the guidance from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency require banks and their holding companies to explicitly state that if the corporate parent receives any tax refunds it does so only as an agent for its depository subsidiary. * Fitch: US Bank TruPS CDOs Combined Default Still Stable in May ---------------------------------------------------------------- According to the latest index results published by Fitch Ratings, the number of combined defaults and deferrals for U.S. bank TruPS CDOs has remained stable at 24.4% at the end of May compared with the previous month. One bank, American Bancorporation, represented $37 million of notional in three CDOs marked as defaulted in Fitch's bank TruPS universe. American Bancorporation had been deferring interest payments on its TruPS since May 2008 and reached the end of its five-year deferral period in 2013 without paying interest due on its TruPS. The involuntary bankruptcy filed by the CDO managers to enforce the TruPS holders' rights was the first such instance observed in the TruPS universe. Across 78 TruPS CDOs, 230 bank defaulted issuers remain in the portfolio, representing approximately $6.6 billion of collateral. Additionally, 223 issuers are currently deferring interest payments on $2.6 billion of collateral. * House Approves Permanent Small-Business Tax Break --------------------------------------------------- John D. McKinnon, writing for The Wall Street Journal, reported that the House has voted to make permanent a tax break allowing small businesses to write off up to $500,000 in new equipment purchases. While the move adds to momentum for congressional efforts to extend a range of now-temporary tax breaks, it also sharpens a conflict between the House and Senate over whether to extend the breaks permanently or temporarily, according to the Journal. The list of temporary tax breaks, many of which expired at the end of 2013, has grown over the years and now includes over 50 separate provisions affecting businesses as well as individuals, the Journal related. By now, the cost of making them all permanent is proving to be prohibitive -- almost $1 trillion over the next decade, the report said. * Japan Ruling Party to Hold Off Regulating Bitcoin --------------------------------------------------- Takashi Mochizuki, writing for The Wall Street Journal, reported that Japan is likely to stop short of regulating bitcoin after a ruling-party panel looking into issues surrounding the virtual currency decided that no legislation was needed for now. According to the report, Prime Minister Shinzo Abe's Liberal Democratic Party also said that no single government agency should be appointed to oversee the digital currency. Instead, it called for self-regulation by those involved in trading in bitcoin, as the party seeks to nurture the fledgling industry. In a statement of proposals for how the government should handle bitcoin, the panel defined the virtual currency as an "electronic record with value," meaning it is neither a currency nor a commodity, the report said. * Battle Between Argentina and Hedge Funds Continues in New York ---------------------------------------------------------------- Peter Eavis, writing for The New York Times' DealBook, reported that a fierce legal battle between Argentina and New York hedge funds took a new twist when the country offered to negotiate with the funds just hours after announcing measures that would help it avoid a settlement. According to the report, the dispute returned to the Federal District Court in Manhattan where the hedge funds, including a unit of Elliott Management, had previously gained important victories. Appearing before Judge Thomas P. Griesa, Argentina's lawyer, Carmine Boccuzzi of Cleary Gottlieb, said that officials from Argentina's government would be traveling to New York next week to negotiate with the hedge funds, which are suing to be paid in full on $1.3 billion of bonds, the report related. Judge Griesa, however, expressed skepticism about Argentina's willingness to make payments on the hedge funds' bonds, the report further related. * BOOK REVIEW: Competition, Regulation, and Rationing in Health Care ----------------------------------------------------- Author: Greenberg, Warren Publisher: Beard Group Paperback: 188 pages List Price: $34.95 Review by: Gail Hoelscher Order a personal copy today at http://is.gd/3sdhDD This book is fundamental reading for those involved directly in health care as well as those interested and concerned about the past, present and future of the health care industry in the United States. Originally published in 1990, Warren Greenberg examined the U.S. health care sector over the period 1960-1988 using standard industrial organization economic analysis. He looked at regulation and competition, antitrust elements, technology, and rationing, as well as pricing behavior and advertising. Although some experts claimed the health care industry to be unique and outside the purview of such analysis, Dr. Greenberg demonstrated that all industries differ in their own ways, but nonetheless can be analyzed using these techniques. Dr. Greenberg's first goal in writing this book was to educate the layperson about the economics of the health care industry. Economists have pointed out two major potential differences between health care and other sectors of the economy: uncertainty of demand and imperfect and imbalanced information on the part of providers and consumers. Dr. Greenberg agrees with the first and less so with the second. Obviously, the timing, extent and length of future illness and the demand for medical services are impossible to know. A good deal of the consumer's uncertainty is smoothed over by health insurance. The uncertainty for insurance companies in the sector is somewhat different than that for other industries: while consumers commonly seek more health care than they would if they were not covered, it is rare for someone to burn down his own home just to collect the insurance. With regard to the imbalance in information, physicians do indeed know more about a particular illness and treatment than the average potential patient, but Dr. Greenberg asks how that differs from plumbing, law and accounting! Dr. Greenberg identified and described the industries that make up the health care sector: medical services, hospitals, insurance, and long-term care. He explored market failures and imperfections in each and detailed some of the measures government has taken to correct these imperfections. For example, he described the efforts of the federal government to force competition in the medical services field and how barriers to entry imposed by physicians' lobbies to limit the number of physicians in practice were lifted, physicians were permitted to advertise, and restrictions on the services of nonphysicians were eased. He recounted efforts to require hospitals to disclose information on mortality rates, infections, and medical complications. Dr. Greenberg's second goal in writing the book was to consider policy options. Although he claims skepticism of regulation (after working for the federal government), he believes that ongoing efforts to devise a more efficient and equitable health care system will require more competition, regulation, and rationing. He examined the Canadian, British and Dutch systems, so fascinating and different from ours, and found the Dutch system the least regulatory and most equitable. This book is a primer on the health care industry. Dr. Greenberg explains economic terms in a straightforward and clear way without condescension and takes the reader way beyond Economics 101. Although the sector has changed significantly since this book was published, Dr. Greenberg's analysis of the past offers valuable insight into why our system evolved the way it did and what direction it might take in future. ********* 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 ***