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/raid1/www/Hosts/bankrupt/TCR_Public/140626.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 26, 2014, Vol. 18, No. 176 Headlines 4L TECHNOLOGIES: S&P Retains 'B+' CCR Over New $110MM Debt Add-On ADVANCED MICRO: Reports Initial Results of Tender Offer AFFORDABLEBRACES.COM: Case Summary & 7 Top Unsecured Creditors ALERIS INTERNATIONAL: S&P Affirms 'B' CCR & Removes From Watch AM GENERAL: S&P Puts 'CCC' Corp. Credit Rating on CreditWatch Pos. AMERICAN APPAREL: Stockholders Elected 3 Directors to Board AMERICAN APPAREL: CEO Wins Supporters, to Challenge Dismissal AMERICAN ENERGY: S&P Assigns 'B-' CCR; Outlook Stable AMERICAN EQUITY: Fitch Affirms 'BB+' IDR; Outlook Stable API TECHNOLOGIES: Promotes Claudio Mannarino to CFO ARMORWORKS ENTERPRISES: PE Firm Gets Majority Stake in New Plan ASCEND LEARNING: Moody's Keeps B3 CFR Over New $400MM Add-on Debt BELDEN INC: S&P Assigns 'B+' Rating on $200MM 10-Yr. Sub. Notes BROADWATER RACQUET: Case Summary & 4 Largest Unsecured Creditors BRUNSWICK CORPORATION: Moody's Hikes Corp. Family Rating to Ba1 CARL'S FURNITURE: Closes All 3 Locations CENTRAL FALLS, RI: Moody's Hikes General Obligation Rating to Ba3 COMMONWEALTH ADVISORS: JPMorgan's Claims Pared In CDO Row CONN'S INC: Moody's Assigns 'Ba3' Corporate Family Rating CONNECTEDU INC: Remaining Assets Sell for $801,000 CRISS PROPERTIES: Case Summary & 7 Largest Unsecured Creditors CROWN HOLDINGS: S&P Retains 'BB' Corporate Rating CUE & LOPEZ: Oriental Bank Wants to Continue State Court Action DESERT HOT SPRINGS, CA: Debates Police Versus Bankruptcy Path DETROIT, MI: Creditors Blast Bid To Take Judge On Tour Of City EASTMAN KODAK: Trustee Sues Altek Corp. to Recover $49.2 Million ELIZABETH ARDEN: Restructuring A Blemish On Sale Prospects FAIRMONT GENERAL: Court Approves $15MM Sale to Alecto FIRST MARINER: Now Known as "Capital Trust Holdings, Inc." FLEET CARD FUELS: Case Summary & 16 Largest Unsecured Creditors GENERAL MOTORS: Identifies Air Bag Glitch in Some Cruze Cars GFI GROUP: Fitch Lowers IDR to 'BB-' & Maintains Neg. Outlook GLASSHOUSE TECHNOLOGIES: Files for Bankruptcy HAMPTON COUNTY: Moody's Cuts Gen. Obligation Debt Rating to Ba3 HOUGHTON MIFFLIN: Fitch Affirms 'B+' Issuer Default Rating IMMUCOR INC: S&P Cuts CCR to B on Weaker-Than-Expected Performance INTELLIGRATED INC: S&P Keeps 'B' Rating Over 1st Lien Debt Add-On INTERFAITH MEDICAL: Confirms Reorganization Plan ISTAR FINANCIAL: Fitch Affirms 'B' Issuer Default Rating JAMES AND ASSOC: Clients Must Contact LSUC by Aug. 15 JHCI ACQUISITION: Moody's Affirms 'B3' Corporate Family Rating LYNN LEE OF PINELLAS: Case Summary & 8 Top Unsecured Creditors MACKEYSER HOLDINGS: Bankruptcy Shutters Aspen Eye Clinic MARTIN MARIETTA: Moody's Confirms Ba1 Corporate Family Rating MARVIN H RICHER: Ill. Judge Affirms Ruling on Morehead Claim MEE APPAREL: Closes 12-Mil. Sale of Assets to Suchman MEE APPAREL: Amends Schedules of Assets and Liabilities MEMORIAL RESOURCE: Moody's Rates $300MM Sr. Secured Notes 'Caa1' MEMORIAL RESOURCE: S&P Assigns 'B' CCR & Rates $300MM Notes 'B-' METEX MFG: Confirms Another Chapter 11 Reorganization Plan METRO-GOLDWYN-MAYER: New $300MM Debt No Impact on Moody's Ba2 CFR MF GLOBAL: Trustee Says Most Customer Claims Are Complete MFH ENTERPRISES: Case Summary & 4 Largest Unsecured Creditors MT. GOX: Obtains Ch. 15 Protection Though Venue in Doubt NAVISTAR INTERNATIONAL: Extends Expiration of Rights Agreement NGL ENERGY: Fitch Assigns 'BB-' Rating on Sr. Unsecured Notes NGL ENERGY: S&P Assigns 'BB-' Rating on $350MM Sr. Unsec. Notes NIELSEN FINANCE: Moody's Rates $800MM Sr. Unsecured Notes 'B1' NORTHERN DENTAL: Bobcaygeon Dental Biz to Be Sold July 24 OHCMC-OSWEGO: Vacant Illinois Land Heading for September Auction OPTIM ENERGY: Floats $60M Stalking Horse Bid For Coal Plant PARADISE HOSPITALITY: Judge Smith Dismisses Chapter 11 Case PUERTO RICO: Governor Aims to Revamp Debt of Public Corporations ROSE ROCK: S&P Assigns 'B+' CCR & Rates $350MM Sr. Notes 'B' RITE AID: Eight Directors Elected at Annual Meeting RR DONNELLEY: Moody's Affirms 'Ba2' Corporate Family Rating SANDISK CORP: S&P Raises CCR to 'BB+'; Outlook Stable SEQUENOM INC: Camber Capital Holds 5.4% Equity Stake SOURCE INTERLINK: Proposes KCC as Claims Agent, Admin. Advisor SOURCE INTERLINK: To Pay $280,000 for Critical Vendor Claims SOURCE INTERLINK: Wants Schedules Deadline Moved to Aug. 22 SOURCE INTERLINK: Proposes to Use Cash Collateral SOURCE INTERLINK: Time Inc. Severed Ties Pre-Bankruptcy TEMPLAR ENERGY: S&P Retains 'B-' Loan Rating After $200MM Add-On TEXAS INDUSTRIES: Moody's Says Ba1 CFR Still for Possible Upgrade THOMPSON CREEK: Announces Pricing Terms of Exchange Offer UNIVERSAL HEALTH: Fitch Hikes IDR to BB+, Alters Outlook to Stable VERISK ANALYTICS: Moody's Withdraws B1 Corporate Family Rating WCI COMMUNITIES: Moody's Assigns B3 Rating on $50MM Add-on Notes ZOGENIX INC: Presented at JMP Securities Healthcare Conference * Debtor Can 'Strip Off' Mortgages In Ch. 20, 11th Circ. Says * SunTrust Settles with Justice Dept. over Mortgages * Investors Punish Pair of For-Profit Educators * Many Displaced by Superstorm Sandy Still Wait for Housing Help * Matt Burnstein Elected Chairman at Waller * KCC's Albert Kass Bags M&A's 5th Annual 40 Under 40 Award * Recent Small-Dollar & Individual Chapter 11 Filings ********* 4L TECHNOLOGIES: S&P Retains 'B+' CCR Over New $110MM Debt Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B+' corporate credit rating on Hoffman Estates, Ill.-based printer cartridge and mobile phone remanufacturer 4L Technologies Inc. and its 'B+' issue-level and '3' recovery ratings on 4L's first-lien credit facilities are unchanged on the proposed issuance of a $110 million add-on to the company's first-lien term loan to fund its acquisition of a smaller printer cartridge remanufacturer. The target is a leading provider of remanufactured laser cartridges with strength in color products. The acquisition will strengthen 4L's position among mid-market imaging clients and provide opportunities for meaningful cost savings. Standard & Poor's adjusted leverage will increase slightly to 4.8x as of March 31, 2014, pro forma for the acquisition but excluding expected synergies. S&P expects leverage to fall to the mid-4x area by the end of 2014 resulting from growth in 4L's wireless business with further improvement expected in 2015 as the company realizes cost savings related to the acquisition. The ratings reflect 4L's "aggressive" financial risk profile and "weak" business risk profile, reflecting pricing and competitive pressures combined with a concentrated customer base. The stable outlook reflects a strong position in the printer cartridge remanufacturing industry, good growth prospects in its wireless segment, and good customer relationships. RATINGS LIST 4L Technologies Inc. Corporate Credit Rating B+/Stable/-- Senior Secured US$760 mil term bank ln due 2020 B+ Recovery Rating 3 US$65 mil revolver bank ln due 2019 B+ Recovery Rating 3 ADVANCED MICRO: Reports Initial Results of Tender Offer ------------------------------------------------------- Advanced Micro Devices, Inc., said it has settled all 8.125% Senior Notes due 2017 that were tendered, but not validly withdrawn, at or prior to 12:00 midnight, New York City time, on June 19, 2014 (the "Consent Deadline"), pursuant to its previously announced tender offer and consent solicitation with respect to any and all of its outstanding 8.125% Notes. The Tender Offer will expire at 12:00 midnight, New York City time, on July 3, 2014, unless extended or earlier terminated by AMD. Under the terms of the Tender Offer, holders of 8.125% Notes who (i) validly tendered their 8.125% Notes at or prior to the Consent Deadline and (ii) consented to certain proposed amendments in the Consent Solicitation to reduce the minimum notice period required in connection with redemption of 8.125% Notes from 30 days to 3 business days were entitled to receive a total payment of $1,045.88 for each $1,000 principal amount of 8.125% Notes purchased pursuant to the Tender Offer. As of the Consent Deadline, holders of $145,130,000 aggregate principal amount of 8.125% Notes, representing 52.04% of the outstanding 8.125% Notes, had validly tendered their 8.125% Notes and had submitted related consents. As a result, the number of consents required to approve the Proposed Amendments were received. After giving effect to the purchase of the Tendered Notes, $133,760,000 aggregate principal amount of 8.125% Notes remain outstanding as of June 20, 2014. On June 20, 2014, AMD provided a redemption notice to holders of all remaining outstanding 8.125% Notes. These remaining 8.125% Notes will be redeemed on June 25, 2014. "We continue to successfully execute our strategic plan for long- term growth and profitability by driving our differentiated compute and graphics technologies into a more diverse set of markets," said AMD senior vice president and chief financial officer Devinder Kumar. "This latest financial transaction is part of the ongoing work to further improve our debt profile and financial foundation as we continue to transform the company." AMD expects that the impact of its recent offering of its 7.00% Senior Notes due 2024 and subsequent use of proceeds will be largely neutral in terms of aggregate outstanding debt. AMD also expects to incur a charge of approximately $50 million in the second quarter of 2014 in connection with its purchase and redemption of 8.125% Notes. AMD expects interest expense in the second quarter of 2014 to be approximately $46 million, higher than previously anticipated due to increased debt balances for part of the second quarter of 2014. Beginning in the third quarter of 2014, AMD expects quarterly interest expense to decline to approximately $42 million, driven by 2014 debt reprofiling activities. AMD has retained J.P. Morgan Securities LLC to act as the Dealer Manager for the Tender Offer. Questions regarding the tender offer may be directed to J.P. Morgan Securities LLC at (800) 245- 8812 (toll-free) or (212) 270-1200 (collect). Moreover, on June 20, 2014, AMD entered into a supplemental indenture to that certain indenture, dated as of Nov. 30, 2009, by and between AMD and Wells Fargo, National Association, as trustee. The First Supplemental Indenture, among other things, amends the Indenture to reduce the notice period for redemptions from 30 days to 3 business days. A full-text copy of the First Supplemental Indenture to the Indenture governing the 8.125% Notes, between Advanced Micro Devices, Inc. and Wells Fargo, National Association, as Trustee, dated June 20, 2014, is available for free at http://is.gd/odLt11 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. AFFORDABLEBRACES.COM: Case Summary & 7 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Affordablebraces.com fdba Merritt Island Dental Group 455 Magnolia Avenue, Suite B Merritt Island, FL 32952 Case No.: 14-07288 Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Samuel R Pennington, Esq. PENNINGTON LAW FIRM, P.A. 121 S. Orange Avenue, Suite 1500 The Plaza, North Tower Orlando, FL 32801 Tel: (407) 647-8833 Fax: (407) 671-5679 Email: info@penningtonlawfirmpa.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Paul Ouellette, owner. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-07288.pdf ALERIS INTERNATIONAL: S&P Affirms 'B' CCR & Removes From Watch -------------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'B' corporate credit rating on Beachwood, Ohio-based Aleris International Inc. and removed the rating from CreditWatch, where it had been placed with negative implications on Feb. 11, 2014. At the same time, S&P revised the recovery ratings on the company's $500 million 7.625% senior notes due 2018 and $500 million 7.875% senior notes due 2020 to '4' from '5', indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default. As a result, S&P raised its issue-level rating on both notes to 'B' from 'B-', in line with the corporate credit rating. The outlook is stable. "The stable outlook reflects our expectation that liquidity will remain adequate over the next 12 months, even if market conditions do not improve," said Standard & Poor's credit analyst Chiza Vitta. S&P could lower its ratings on Aleris if liquidity deteriorates to a level it views as "less than adequate." This could happen if the operating environment remains difficult for a prolonged period of time and margins deteriorate, particularly if the contemplated asset sales do not materialize. S&P could also lower its rating if it revised the business risk profile to "vulnerable" from "weak." Such a revision would be a reflection of S&P's view of Aleris' profitability and prospects for weathering volatile market conditions. S&P could raise its ratings on Aleris if the company's credit measures improve such that leverage is below 5x and it believed management and the company's financial sponsor were committed to maintaining leverage at or below this level. This would most likely be the result of EBITDA expansion resulting from increasing end market demand and growing international business, including the Zenjiang rolling mill in China. AM GENERAL: S&P Puts 'CCC' Corp. Credit Rating on CreditWatch Pos. ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including the 'CCC' corporate credit rating, on U.S.-based Humvee manufacturer AM General LLC on CreditWatch with positive implications. The CreditWatch placement follows AM General's recent legal settlement with BAE Systems PLC. In April 2013, AM General won a judgment for about $277 million, which BAE appealed. AM General's financial statements are private and details of the settlement have not been publicly disclosed. "We plan to resolve the CreditWatch placement in the coming weeks following a more in depth analysis surrounding the company's liquidity profile and prospects for future cash generation," said Standard & Poor's credit analyst Chris Mooney. S&P will likely raise the rating if it assess the company's liquidity profile as "less than adequate" or "adequate" as opposed to the current "weak" assessment. AMERICAN APPAREL: Stockholders Elected 3 Directors to Board ----------------------------------------------------------- American Apparel, Inc., held its 2014 annual meeting of stockholders on June 18, 2014, at which the stockholders elected David Danziger, Robert Greene and Allan Mayer to the Board of Directors, each to serve for a term of three years and until his successor is duly elected and qualified. The appointment of Marcum LLP as the Company's independent auditors for the fiscal year ending Dec. 31, 2014, was ratified. The stockholders also approved, on an advisory basis, the compensation of the Company's named executive officers. 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 APPAREL: CEO Wins Supporters, to Challenge Dismissal ------------------------------------------------------------- Dov Charney asserted in a documents filed with the U.S. Securities and Exchange Commission that his termination as American Apparel's president and chief executive officer is without merit and that he intends to contest it vigorously. On June 18, 2014, the Board of the Company notified Mr. Charney of the Board's intent to terminate his employment as the Company's president and chief executive officer, for cause, over an alleged misconduct. The termination will be effective following a 30-day cure period required under the terms of his employment agreement. The Board suspended Mr. Charney pending the expiration of that cure period. Mr. Charney was also removed as Chairman of Board. Following the announcement on June 18, 2014, made by the Company of its intent to terminate Mr. Charney's employment, Mr. Charney said he was approached by certain persons, including stockholders of the Company, who expressed support for his continued leadership of the Company. On June 19, 2014, Mr. Charney began to discuss with the Supporters potential changes to the composition of the Board and management of the Company. Mr. Charney disclosed that as of June 18, 2014, he beneficially owned 47,209,406 shares of common stock of American Apparel, Inc., representing 27.2 percent of the shares outstanding. The Board of Directors of the Company notified Mr. Charney of the Board's intent to terminate his employment as the Company's president and chief eecutive officer, for cause under his employment agreement, to be effective following a 30-day cure period. The Board also removed the reporting person as Chairman of the Board. A full-text copy of the regulatory filing is available at: http://is.gd/sqM18j 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 ENERGY: S&P Assigns 'B-' CCR; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Oklahoma City-based American Energy- Marcellus LLC. The rating outlook is stable. S&P also assigned its 'B-' issue-level rating, with a '3' recovery rating, to the company's proposed $750 million first-lien term loan maturing in 2020. The '3' recovery rating indicates S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. In addition, S&P assigned its 'CCC' issue-level rating, with a '6' recovery rating, to the company's proposed $450 million second-lien term loan maturing 2021. The '6' recovery rating indicates S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. "Our stable rating outlook reflects our expectation that AEM's operating cash flow, capital spending reserve, and additional equity commitments running to financial sponsors will be sufficient to fund planned capital spending over the next year and that the company will be successful in significantly expanding its production and reserves from initial levels," said Standard & Poor's credit analyst Scott Sprinzen. S&P could lower the rating if AEM met with significant operating setbacks and/or if it accelerated investment to an extent that was greater than initially planned without prefunding its incremental cash requirements, putting in doubt its ability to meet ongoing debt service requirements. S&P could also lower the rating if debt to EBITDA rose above 6x. S&P currently views an upgrade within the one-year timeframe addressed by the outlook as unlikely. However, over a longer timeframe, S&P could raise the rating based on a reassessment of AEM's business risk profile, as the company establishes a track record of fulfilling its growth and cost performance goals, while maintaining appropriate leverage and adequate liquidity. AMERICAN EQUITY: Fitch Affirms 'BB+' IDR; Outlook Stable -------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) of American Equity Investment Life Holding Company (AEL) at 'BB+' and the Insurer Financial Strength (IFS) ratings of its insurance operating subsidiaries: American Equity Investment Life Insurance Company (AEILIC) and American Equity Investment Life Insurance Company of New York, at 'BBB+'. The Rating Outlook is Stable. A full list of ratings follows at the end of this release. KEY RATING DRIVERS The affirmation reflects high credit quality within AEL's bond portfolio, continued good operating results, adequate risk- adjusted capitalization and strong competitive position in the fixed indexed annuity market. The rating also reflects AEL's high financial leverage, above-average exposure to interest rate risk and lack of diversification in earnings and distribution. Fitch considers AEL's bond portfolio to be of above-average credit quality. At March 31, 2014, the company's investment portfolio was constructed primarily of investment-grade fixed income securities. A high level of liquidity in the company's bond portfolio is supported by an above-average allocation to publicly traded bonds. At year-end 2013, the company's surplus exposure to risky assets -- which Fitch considers to be such investments as below investment-grade bonds, troubled real estate, unaffiliated common equity and other similar assets -- was 67%, up modestly from 65% year-end 2012, but moderately below the industry average. Fitch views the NAIC risk-based capital (RBC) ratio as of AEL's primary insurance subsidiary, AEILIC, to be relatively stable over the past five years and adequate for the rating category. At Dec. 31, 2013, the company reported an RBC ratio of 344%, up from its 332% at yearend 2012. Fitch anticipates that AEILIC's 2014 RBC ratio will be maintained above 300% as internally generated capital will be partially offset by continued strong sales growth. AEL's financial leverage was approximately 37% at March 31, 2014, down from a recent high of 43% at yearend 2010. Fitch considers this level of financial leverage to be high, and is the primary reason for the extra notch between the parent company and subsidiary ratings. AEL issued $400 million of eight-year senior notes in July 2013, with the majority of proceeds expected to be used to fund the redemption of a portion of existing convertible debt on the company's balance sheet. The company continued the reduction of outstanding principal on the convertible notes in April 2014. AEL's above-average interest rate risk reflects the company's focus on spread-based annuity products, particularly fixed indexed annuities. The near-term concern is the ongoing low interest rate environment, which is challenging the company and its peers in terms of maintaining interest rate spreads. From a longer-term perspective, as AEL's book of business matures, the occurrence of a rapid increase in interest rates could have an adverse effect on its financial position, as it could result in a sharp increase in surrenders while the value of its largely fixed- rate investments decline in market value. Positively, Fitch notes that AEL's book of business continues to exhibit strong protection in terms of significant surrender charges which help offset the cost to the company of early policy terminations. AEL is headquartered in West Des Moines, Iowa and reported total GAAP assets of $40.5 billion and equity of $1.7 billion at March 31, 2014. AEILIC, the main operating subsidiary of AEL, is also headquartered in West Des Moines and had statutory total adjusted capital of $2.1 billion at March 31, 2014. RATING SENSITIVITIES The ability of AEL to achieve a higher IFS rating is somewhat constrained by the company's limited diversity of earnings and cash flow given its heavy focus on fixed indexed annuities. This constraint could be overcome by the following: -- Enhanced capitalization with RBC above 350% on a sustained basis; -- Financial leverage below 25%; -- Continued good operating results and investment quality. The key rating triggers that could result in a downgrade include: -- A reduction in capitalization with RBC below 300%; -- Sustained deterioration in operating results such that interest coverage is below 3x; -- Significant increase in lapse/surrender rates; -- Unexpected spike in credit related impairments; -- Financial leverage above 50%. The key rating triggers that could result in a narrowing of notching between the IDR of AEL and the IFS of AEILIC include: -- A sustainable decline in financial leverage below 30%; -- Sustained GAAP EBIT-based interest coverage above 8x. Fitch has affirmed the following ratings with a Stable Outlook: American Equity Investment Life Holding Company -- IDR at 'BB+'; -- 3.500% senior convertible debentures due 2015 at 'BB'; -- 6.625% senior unsecured notes due 2021 at 'BB'; -- 5.250% senior convertible debentures due 2029 at 'BB'; -- Trust preferred securities at 'B+'. American Equity Investment Life Insurance Company -- IFS at 'BBB+'. American Equity Investment Life Insurance Company of New York -- IFS at 'BBB+'. API TECHNOLOGIES: Promotes Claudio Mannarino to CFO --------------------------------------------------- API Technologies Corp. promoted Claudio Mannarino, senior vice president to senior vice president and chief financial officer replacing Phil Rehkemper who resigned his position as CFO to accept another position. Mr. Rehkemper has served as CFO since April 2012. Mr. Rehkemper has agreed to remain with the Company until July 3, 2014, to assist in the CFO transition. Mr. Mannarino has been with API since 2000 and has over 20 years of finance and professional accounting experience. Prior to his current role as senior vice president, Mr. Mannarino served various senior-level management roles throughout the Company's finance organization. Before joining API Technologies, Mr. Mannarino served as controller for two divisions of Transcontinental, Inc. Mr. Mannarino holds a Bachelor of Commerce Degree from the University of Ottawa and is a Certified Management Accountant. API Technologies President and Chief Executive Officer, Bel Lazar, commented: "Claudio has been an integral part of API Technologies' management team for 14 years and I look forward to working with him in his expanded role." The Company said Mr. Mannarino has no family relationships with any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company. There are no current changes to Mr. Mannarino's existing compensation arrangements as a result of his appointment as CFO. The Company intends to review Mr. Mannarino's compensation in the future. About API Technologies API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company Web site at www.apitech.com. For the 12 months ended Nov. 30, 2013, the Company incurred a net loss of $7.22 million on $244.30 million of net revenue as compared with a net loss of $148.70 million on $242.38 million of net revenue for the 12 months ended Nov. 30, 2012. As of Nov. 30, 2013, the Company had $304.57 million in total assets, $147.14 million in total liabilities, $26.32 million in redeemable preferred stock and $131.10 million in shareholders' equity. * * * As reported by the TCR on Feb. 14, 2013, Moody's Investors Service has withdrawn all ratings of API Technologies Corp., including its Caa1 Corporate Family Rating and negative outlook due to the repayment of all rated debt. On Feb. 6, 2013, API Technologies Corp. completed a refinancing of its previously outstanding rated bank debt. All ratings of API have been withdrawn since the company has no rated debt outstanding. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit rating on API Technologies Corp. to 'B-' from 'B'. "The downgrade reflects weaker-than-expected credit metrics resulting from less-than-expected improvements in operating performance and higher debt, including a modest increase from the recent refinancing," said Standard & Poor's credit analyst Chris Mooney. ARMORWORKS ENTERPRISES: PE Firm Gets Majority Stake in New Plan --------------------------------------------------------------- Law360 reported that ArmorWorks Enterprises LLC filed an update to its plan to escape bankruptcy under the control of private equity firm Diversis Capital LLC, which agreed last month to pay $3 million for a majority stake in the defense contractor. According to the report, under the fifth amended reorganization plan, California-based Diversis would receive 66.9 percent of the reorganized company's common stock -- a slight reduction from the earlier agreed-upon 67.5 percent -- and all of its preferred shares. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that scheduled a confirmation hearing to begin on July 24 to seek approval of the revised Chapter 11 reorganization plan. Mr. Rochelle noted that a U.S. bankruptcy judge in Phoenix preliminarily approved the explanatory disclosure statement on June 18. The confirmation hearing will continue on July 31 if witnesses need to be heard and evidence taken, the Bloomberg report said. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency, Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. The U.S. Trustee for Region 14 appointed creditors to serve on an Official Committee of Unsecured Creditors. Forrester & Worth, P.L.L.C. represents the Committee as its general counsel. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ASCEND LEARNING: Moody's Keeps B3 CFR Over New $400MM Add-on Debt ----------------------------------------------------------------- Moody's Investors Service commented that Ascend Learning's proposed $40 million add-on first lien term loan has no impact on the company's ratings, including the B3 corporate family rating or negative outlook. The proposed incremental term loan also has no impact on the company's existing senior secured bank credit facilities rated B2 or the $125 million second lien term loan rated Caa2. Headquartered in Burlington, Massachusetts, Ascend Learning, LLC provides technology-based learning solutions and educational content for healthcare and other vocational fields. Revenue for the last twelve month period ended 3/31/2014 was approximately $279 million. BELDEN INC: S&P Assigns 'B+' Rating on $200MM 10-Yr. Sub. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '6' recovery rating to St. Louis-based cable, connector, and component manufacturer Belden Inc.'s proposed $200 million 10-year senior subordinated notes. The '6' recovery rating indicates our expectation for negligible (0% to 10%) recovery in the event of a payment default. The company will use proceeds from the new debt for general corporate purposes, which may include future acquisitions. The existing senior secured bank loan ratings and the subordinated note ratings are unaffected by this transaction. "Our 'BB' corporate credit rating and stable outlook on the company are unchanged by the proposed transaction. S&P's pro- forma adjusted net-leverage is around the mid-3x area as of March 31, 2014. The ratings on Belden reflect the company's "fair" business risk profile, characterized by its participation in a highly competitive and cyclical industry, offset by a leading market position in some of its product niches and continuing diversification into value added specialty products. The rating also reflects the company's "significant" financial risk profile with its expected S&P adjusted net leverage of around 3x in 2014 and funds from operations to debt of below 30% over the next two years, along with its solid cash flow generation and "adequate" liquidity. RATINGS LIST Belden Inc. Corporate Credit Rating BB/Stable/-- New Rating Belden Inc. $200 mil. 10-year notes Senior Subordinated B+ Recovery Rating 6 BROADWATER RACQUET: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Broadwater Racquet Club dba Broadwater Athletic Club & Hot Springs 4920 Highway 12 West Helena, MT 59601 Case No.: 14-60756 Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court District of Montana (Butte) Debtor's Counsel: Jon R Binney, Esq. BINNEY LAW FIRM, PC P.O. Box 2253 Missoula, MT 59806 Tel: 406 541-8020 Email: jon@binneylaw.com Total Assets: $710,139 Total Liabilities: $2.21 million The petition was signed by James Williams, president. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/mtb14-60756.pdf BRUNSWICK CORPORATION: Moody's Hikes Corp. Family Rating to Ba1 --------------------------------------------------------------- Moody's Investors Service upgraded Brunswick Corporation's ratings, including its Corporate Family Rating to Ba1 from Ba2. The upgrade was due to the steady improvement in Brunswick's operating performance and credit metrics. Additionally, Moody's view is that Brunswick's operating performance has improved enough such that the company could withstand a reasonable economic downturn and still maintain a credit profile consistent with its new ratings. The rating outlook is stable. "In our view, Brunswick's operating performance will continue improving as discretionary consumer spending modestly grows and New products are introduced," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Brunswick's operating margins are the highest they have been since 2005 and Moody's expects additional growth in the next year or two as the company focuses on expanding its high margin parts and accessories and Life Fitness businesses. "While Brunswick remains cyclical and subject to fluctuations in discretionary consumer spending, its most volatile segment -- boats -- now represents about 25% of its revenue versus over 40% prior to the economic downturn," Cassidy noted. The senior unsecured and unguaranteed notes are rated one notch lower than the Corporate Family Rating because of the lack of subsidiary guarantees and their structural subordination to the unsecured notes with subsidiary guarantees. Ratings upgraded: Corporate Family Rating to Ba1 from Ba2; Probability of Default Rating to Ba1-PD from Ba2-PD; Senior unsecured and unguaranteed notes due 2023-2027 ($266 million outstanding) to Ba2 (LGD 6) from B1 (LGD 6); $150 million senior unsecured notes with subsidiary guarantees due 2021 to Ba1(LGD 4) from Ba2 (LGD 4); Rating affirmed: Speculative grade liquidity rating at SGL-1 Rating Rationale Brunswick's Ba1 Corporate Family Rating reflects the highly discretionary nature of pleasure boats and marine related products, which makes Brunswick's revenues and earnings highly sensitive to economic weakness. This was demonstrated during the recent economic downturn when the company suffered a dramatic revenue and earnings decline. But the ratings also reflect the company's solid credit metrics -- highlighted by debt/EBITDA approaching 2 times and EBITA/interest around 5 times. Because of Brunswick's sensitivity to macroeconomic conditions, its credit metrics need to be stronger than other similarly-rated consumer durable companies. Moody's expects additional credit metric improvement as the company's operating performance remains strong and marine industry demand steadily improves. Other factors supporting the rating are: relatively stable boating participation trends, good operating performance of Brunswick's dealership network, diversification away from its highly cyclical marine products and the company's strong and growing parts & accessories business. The company's stable and growing Fitness business and seasoned management team also support the rating. The stable outlook reflects Moody's view that Brunswick's revenue, earnings and credit metrics will continue improving and that it will maintain a very good liquidity profile in a reasonable economic downturn. However improvements are unlikely to warrant an upgrade in the near to intermediate term. A temporary spike in leverage to around 3.5 times is consistent with a stable outlook, provided it quickly approaches 2.5 times. For Moody's to consider an upgrade, Brunswick must demonstrate its ability to maintain a very strong credit profile, and a very good liquidity position in the face of a reasonable economic downturn. In addition, Brunswick will need to further diversify its sales away from the more cyclical marine products (boats and engines, excluding parts & accessories) for an upgrade to be considered. Credit metrics which would support an upgrade are debt/EBITDA sustained around 1.5 times, EBITA/interest maintained above 5 times and retained cash flow/net debt consistently about 35%. Moody's would consider downgrading Brunswick's ratings if liquidity or operating performance deteriorates, or if for any reason, debt/EBITDA is sustained above 3 times, or EBITA/interest approaches 3 times. The principal methodology used in this rating was the Global Consumer Durables 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. Brunswick, headquartered in Lake Forest, Illinois, manufactures marine engines, pleasure boats, fitness equipment and bowling capital equipment, and operates retail bowling centers. Revenue for the twelve months ended March 2014 approximated $3.9 billion. CARL'S FURNITURE: Closes All 3 Locations ---------------------------------------- Furniture/Today reported that Carl's Furniture has closed for good. Carl's emerged from Chapter 11 in 2012 in a scaled-down form, but business never recovered fully, President Jeff Baker told Furniture/Today earlier this year when the liquidation was announced. Carl's -- with stores in Fort Lauderdale, Pompano Beach and Coconut Creek, Fla. -- hired APJL Consulting for the final going-out-of-business sale, which began in March. Carl's Furniture, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-24203) on May 24, 2011, represented by Robert C. Furr, Esq., at Furr & Cohen, in Boca Raton, Florida, as counsel. Carl's disclosed $6,145,947 in assets and $9,147,163 in liabilities. Four affiliates also sought Chapter 11 protection. The Debtors obtained $1 million of debtor-in-possession financing from the existing owners. According to Furniture/Today, Carl's emerged from bankruptcy in 2012 with three Florida stores following confirmation of its reorganization plan, under which unsecured creditors received 8.5 cents on the dollar. Furniture/Today noted that the former Top 100 furniture chain split from Carl's Patio in 2008 with both companies continuing as separate entities. Carl's Patio remains in business with nine South Florida locations. CENTRAL FALLS, RI: Moody's Hikes General Obligation Rating to Ba3 ----------------------------------------------------------------- Moody's Investors Service has upgraded the City of Central Falls' (RI) general obligation rating to Ba3 from B1, affecting $8.7 million in outstanding general obligation bonds; the outlook has changed to stable from positive. Moody's has also affirmed the Ba1 underlying rating with a stable outlook on the Rhode Island Health and Educational Building Corporation's (RIHEBC) Series 2007B bonds, affecting $4.9 million in rated RIHEBC pooled debt. Summary Ratings Rationale The upgrade to Ba3 reflects the city's recent trend of favorable operating results following emergence from Chapter 9 bankruptcy in October of 2012 and transition to local control in April 2013 with an adopted six year bankruptcy plan which was accepted by a federal court. The bankruptcy process has significantly reduced the financial pressure related to growing employee salaries, pensions and healthcare insurance costs. The rating also incorporates Moody's expectation that the city has and will continue to make general obligation debt service payments, given the state law creating a priority lien for general obligation bondholders and the absence of challenges to the payments by other creditors. Despite the city's exit from bankruptcy, it continues to face significant challenges stemming from high fixed costs and years of deferred capital expenditures and projected weakness in revenue growth, including the loss of an annual Impact Fee payment and back taxes owed from the Wyatt Detention Center. The city also has a limited tax base characterized by weak socioeconomic indicators, including the highest poverty rate in the state, and an elevated debt burden. The stable outlook reflects Moody's expectation that the city's maintenance of structural balance will continue, in line with its bankruptcy plan and as reflected in its six-year financial projections. Moody's also expect the city to continue to fund 100% of its pension ARC, resulting in an increasing funded ratio and a reduced unfunded pension liability for the city's single employer plan. The underlying Ba1 rating and stable outlook assigned to RIHEBC's 2007B bonds incorporates Central Falls' underlying general obligation rating as well as the city's limited (6.6%) portion of the pooled debt. A significant amount of debt service (34.22% of the pool) is directly paid to RIHEBC by the State of Rhode Island (GO rated Aa2/negative outlook) and, in addition, the state can intercept additional aid for debt service, providing strong additional security. Additional factors incorporated in the RIHEBC rating are the strong mechanics, included in the RIHEBC pool agreement and historic state support for school construction projects. Proceeds from the 2007B bonds were originally loaned to the four participating units of government to fund various school capital improvement projects. Strengths -- Recent trend of stability in financial operations -- The city's successful exit from bankruptcy without significant challenges by creditors -- Transition to local control with adherence to a bankruptcy plan, which projects balanced budgets through 2017 -- Reduced expenditures related to personnel costs and benefits -- Continued oversight of financial operations pursuant to the state Fiscal Stability Act Challenges -- Limited tax base and weak demographic profile -- Large unfunded pension liability, despite significant reductions -- Reduced levels of state aid and a statutory property tax levy limitation -- Elevated debt burden with a significant amount of deferred capital projects Outlook The stable outlook reflects our expectation that the city's maintenance of structural balance will continue, in line with its bankruptcy plan and as reflected in its six-year financial projections. Moody's also expect the city to continue to fund 100% of its pension ARC, resulting in an increasing funded ratio and a reduced unfunded pension liability for the city's single employer plan. What could make the rating go up: -- Adherence to the six year financial plan and improvements in the financial reserves -- Improved funding for the city's pension, OPEB and maintenance of capital -- Significant decrease in debt burden What could make the rating go down: -- Deviation from the six-year financial plan that results in financial deterioration -- Inability to improve funding of long-term liabilities including pension and health care -- Significant increases in debt burden or pension liability COMMONWEALTH ADVISORS: JPMorgan's Claims Pared In CDO Row --------------------------------------------------------- Law360 reported that a Louisiana federal judge trimmed JPMorgan Clearing Corp.'s counterclaims against Commonwealth Advisors Inc. in a case accusing several firms of involved in stiffing investors in now-bankrupt hedge funds, saying JPMorgan hadn't adequately backed claims that Commonwealth breached good faith by making claims against JPMorgan. According to the report, U.S. District Court Judge James J. Brady agreed to dismiss JPMorgan's counterclaim for breach of the covenant of good faith and fair dealing, agreeing that it hadn't shown that Commonwealth had acted maliciously when it lodged claims against JPMorgan in the case over investor losses associated with the Collybus collateralized debt obligation. However, he said he would allow JPMorgan to amend the counterclaim and refused to dismiss JPMorgan's counterclaim accusing Commonwealth of breaching the companies' contract, the report added. The case is Broyles v. Cantor Fitzgerald & Co., et al., case number 3:10-cv-00854, in the U.S. District Court for the Middle District of Louisiana. CONN'S INC: Moody's Assigns 'Ba3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned a first-time Ba3 corporate family rating to Conn's, Inc., a B2 rating to the company's proposed $250 million senior unsecured notes, and an SGL-2 speculative grade liquidity rating. A stable outlook was assigned. This is the first time Moody's has assigned fundamental ratings to Conn's. New ratings assigned: Corporate family rating at Ba3 Probability of default rating at Ba3-PD $250 million proposed senior unsecured notes at B2, LGD5-85 Speculative grade liquidity rating at SGL-2 Ratings Rationale "The Ba3 rating recognizes the positive impact of Conn's value proposition for consumers, which is clearly resonating as it has led to an investment-grade quantitative credit profile led by debt/EBITDA of 3.4 times and EBITA/interest of almost 7 times," stated Moody's Vice President Charlie O'Shea. "The change in strategy implemented by the new management team, with more focus on a credit-conducive product assortment, has been a key driver of this positive performance trend. Moody's believe that Conn's occupies a favorable niche in catering to a consumer that has historically been underserved by traditional forms of consumer credit, and that its offerings provide a compelling alternative to the rent-to-own companies." The Ba3 rating considers Conn's strong credit metrics, which are largely investment grade, its dedicated customer base, the renewed vigilance with respect to credit underwriting that is evidenced by an overall higher quality portfolio, balanced by its relatively small size and limited geographic breadth, with heavy reliance at present on the vagaries of the Texas economy. The stable outlook reflects the cushion in the rating resulting from the company's strong credit metrics, and our expectation that the company has the financial flexibility to manage through a macroeconomic downturn. Ratings could be upgraded if credit metrics are maintained at current levels for a meaningful time period, financial policy remains conservative with respect to acquisitions, store growth and shareholder returns, and that the credit business continues to be tightly-managed, especially surrounding new originations. Ratings could be downgraded if operating performance or financial policy resulted in debt/EBITDA rising above 4.5 times or EBITA/interest falling below 4.5 times, or if liquidity were to weaken. The SGL-2 speculative grade liquidity rating recognizes that the company is heavily reliant on its unrated ABL facility to fund the significant working capital needs resulting from the growth in credit receivables that support the expansion of the retail business. The B2 rating on the proposed senior unsecured notes reflects their junior position in the capital structure, with compression caused by the large size of the more senior unrated $880 million ABL facility. The principal methodology used in this rating was the Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in The Woodlands, Texas, Conn's is a retailer of predominantly furniture, home appliances, and consumer electronics with a network of 82 stores in Texas (57) and bordering states and annual revenues of around $1.3 billion. It provides proprietary financing of its products on a secured installment loan basis which accounts for around 75% of revenues. CONNECTEDU INC: Remaining Assets Sell for $801,000 -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ConnectEdu Inc., a developer of Internet-based systems connecting students with educators and prospective employers, raised $801,000 by selling the assets that weren't taken when lender North Atlantic SBIC IV LP bought the Academic Management Systems business without an auction under a contract valued at $4 million. According to the report, a bankruptcy judge approved the sale of the remaining assets to New Market Education Partners LLC on June 16. The report related that the same day the U.S. Bankruptcy Court in Manhattan was approving the AMS sale, there was a nine-hour auction for most of the remainder of the assets and New Market beat out three other bidders. ConnectEdu Inc., a maker of education-related technology, filed for Chapter 11 bankruptcy protection in Manhattan, on April 28, 2014. The case is In re ConnectEdu, Inc., Case No. 14-11238 (Bankr. S.D.N.Y.). The Debtor's counsel is Wojciech F Jun, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler LLP. The filing lists ConnectEdu's assets at between $1 million and $10 million against liabilities of between $10 million and $50 million. CRISS PROPERTIES: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Criss Properties LLC 999 Criss Circle Elk Grove Village, IL 60007 Case No.: 14-23481 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Jacqueline P. Cox Debtor's Counsel: Jonathan D. Golding, Esq. Richard N. Golding, Esq. THE GOLDING LAW OFFICES, P.C. 500 N. Dearborn St., 2nd Fl. Chicago, IL 60654 Tel: 312-832-7892 Fax: 312-755-5720 Email: jgolding@goldinglaw.net rgolding@goldinglaw.net Total Assets: $254,051 Total Liabilities: $1.03 million The petition was signed by George Lipp, member manager. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb14-23481.pdf CROWN HOLDINGS: S&P Retains 'BB' Corporate Rating ------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured debt rating and '5' recovery rating to the proposed Euro 500 million senior unsecured notes due 2022 to be issued by Crown European Holdings S.A., a wholly owned subsidiary of Crown Holdings Inc. (Crown). The '5' recovery rating indicates S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. All S&P's ratings on Crown and its subsidiaries, including the 'BB' corporate rating on Crown, remain unchanged. The outlook remains stable. "The company plans to use proceeds of the notes offering to redeem its existing Euro 500 million of senior unsecured notes due 2018, and for related fees and expenses," said Standard & Poor's credit analyst Liley Mehta. S&P's 'BB' corporate credit rating on Crown Holdings Inc. is based on its assessment of the company's "satisfactory" business risk and "aggressive" financial risk profile. All modifiers are neutral for the rating. RATINGS LIST Crown Holdings Inc. Corporate Credit Rating BB/Stable/-- New Ratings Crown European Holdings S.A. EUR500-Mil. Senior Unsecured Notes Due 2022 BB- Recovery Rating 5 CUE & LOPEZ: Oriental Bank Wants to Continue State Court Action --------------------------------------------------------------- Oriental Bank and Trust asks the Bankruptcy Court to enter judgment granting the continuance of a state court action against Cue & Lopez Construction, Inc., et al.'s guarantors. On March 20, 2013, Oriental filed a complaint against the Debtors, contractors and co-defendants, as guarantors, with the Court of First Instance of Puerto Rico, San Juan Section. The State Court Action has been stayed against Cue & Lopez as a result of its Chapter 11 filing. The co-defendants are: * Frank Cue Garcia; * Frank Cue Fernandez; * Mario R. Lopez Bernal; * Mario R. Lopez Reinante, his spouse Juana Bernal Quintana and their conjugal partnership; * Jose M. Lopez Bernal his spouse Miriam Sanchez Salgado and their conjugal partnership; * Jesus O. Lopez Bernal, his spouse Myrna Toro Torres and their conjugal partnership. The complaint in the State Court Action is for the collection of money, foreclosure of pledge and mortgage and movable lien, with six causes of action based on loans to Cue & Lopez for the principal amount of $3,975,000 for a line of credit, evidenced by promissory notes guaranteed by first mortgages over the Debtor's realty, consisting of residential penthouse apartment 515, Hillsview Plaza Condominium, Los Frailes Ward, Guaynabo, Puerto Rico; lot 23 of Grand Palm II Development, Sabana Ward, Vega Alta, Puerto Rico; apartment number 633 in Las Vistas of Gurabo Condominium, Navarro Ward, Gurabo, Puerto Rico; and a second mortgage on lots at Cupey Ward consisting of 450 square meters, 1,492 square meters; guaranteed by the co-defendants. The outstanding principal amount of $3,975,000 is also secured by the retainages relative to the Casa Maggiore construction project up to $311,587. Oriental Bank and Trust is represented by: William Santiago Sastre, Esq. DE DIEGO LAW OFFICES, PSC P.O. Box 79552 Carolina, PR 00984-9552 About Cue & Lopez San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 4, 2013 (Case No. 13-08297, Bankr. D.P.R.). The case is assigned to Judge Brian K. Tester. Cue & Lopez Contractors, Inc., filed a separate Chapter 11 petition (Case No. 13-08299) on the same date. The Debtors are represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan, Puerto Rico. CPA Luis R. Carrasquillo & Co., P.S.C., serves as accountant. Cue & Lopez Construction scheduled $13,334,151 in total assets and $17,520,089 in total liabilities. The Chapter 11 petitions were signed by Frank F. Cue Garcia, president. DESERT HOT SPRINGS, CA: Debates Police Versus Bankruptcy Path ------------------------------------------------------------- James Nash, writing for Bloomberg News, reported that Desert Hot Springs, a city in California still burdened by debt payments from its 2001 bankruptcy, is struggling to avoid defaulting on those bonds or going insolvent for a second time in 13 years. According to the report, a decade after Desert Hot Springs emerged from court protection, it's again on the brink of fiscal collapse as city officials discussed dissolving the 27-employee police department and handing the service over to the surrounding county. The report related that city council declared a fiscal emergency in November, a step toward bankruptcy under California law, after staff warned the municipality would run out of cash by March because of "severe economic downturns, state takeaways and a decline in development activity." DETROIT, MI: Creditors Blast Bid To Take Judge On Tour Of City -------------------------------------------------------------- Law360 reported that a group of creditors in Detroit's ongoing bankruptcy case objected to the city's plan to take a federal judge on a tour of the city, arguing that it could be both dangerous and prejudicial to the Chapter 9 proceedings. According to the report, Deutsche Bank AG, Wilmington Trust NA and the National Public Finance Guarantee Corp. were among the debtholders who took issue with the proposed trip, during which the city would highlight its blight and crime problems for U.S. Bankruptcy Judge Steven Rhodes in hopes of swaying him to approve its insolvency exit plan. Another group, Assured Guaranty Municipal Corp., Berkshire Hathaway Assurance Corp. and Financial Guaranty Insurance Co. said the tour could place its participants in harm's way, and that the idea "defied common sense," 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. EASTMAN KODAK: Trustee Sues Altek Corp. to Recover $49.2 Million ---------------------------------------------------------------- Dawn McCarty, writing for Bloomberg News, reported that the trustee appointed in Eastman Kodak Co.'s bankruptcy sued to recover payments of about $49.2 million that were made to Altek Corp. in the 90 days before the photography pioneer's Chapter 11 filing. According to the report, Alan Halperin, acting on behalf of a trust created to liquidate some assets, is seeking to claw back any transfers made "to and for the benefit of" Altek, a Taiwan- based maker of digital cameras. Halperin asked the court to direct Altek to pay $49.2 million plus interest and costs, the report related. The case is Kodak GUC Trust v. Altek Corp., 14-02032, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak had been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August 20, 2013. Kodak and its affiliated debtors officially emerged from bankruptcy protection on Sept. 3, 2013. Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek Smith became members of Kodak's new board of directors as of Sept. 3, 2013. Existing directors James V. Continenza, William G. Parrett and Antonio M. Perez will continue their service as members of the new board. ELIZABETH ARDEN: Restructuring A Blemish On Sale Prospects ---------------------------------------------------------- Sarah Pringle, writing for The Deal, reported that Elizabeth Arden Inc. said that it would exit underperforming businesses and execute additional cost-cutting measures, adding to uncertainty surrounding the struggling makeup and perfume maker's sale prospects. According to the report, Elizabeth Arden said in an 8-K filing with the U.S. Securities and Exchange Commission that it would exit low-return businesses and brands, unprofitable retail locations and fragrance licenses, and discontinue certain products. It also unveiled plans to reduce the size and cost of its overhead structure, and slash an unidentified number of jobs and shut its Puerto Rico affiliate, the report related. * * * The Troubled Company Reporter, on May 16, 2014, reported that Moody's Investors Service changed Elizabeth Arden, Inc.'s rating outlook to Developing from Stable. This follows the company's announcement that it is exploring potential strategic alternatives to enhance shareholder value, and its report of a significant drop in revenue and earnings in its fiscal third quarter. The Developing rating outlook reflects that RDEN's strategic alternatives evaluation could lead to transactions that are either positive or negative for creditors, as well the potential for downward rating pressure if the company is unable to improve its operating performance and reduce its high leverage. Moody's affirmed RDEN's existing ratings including its Ba3 Corporate Family Rating (CFR) based on an expectation that the company's cost reduction initiatives and gradual improvements in international distribution will stabilize earnings over the next year. FAIRMONT GENERAL: Court Approves $15MM Sale to Alecto ----------------------------------------------------- WAJR.com reported that the sale of Fairmont General hospital for $15 million to Alecto Healthcare Services was approved June 23 in U.S. Bankruptcy Court. The scheduled hearing was to officially award the sale to Alecto since no other legitimate contenders submitted bids and resolve the nine objections against the sale. The report noted that U.S. Attorney William Ihlenfeld filed an objection on behalf of the U.S. Department of Health and Human Services in U.S. Bankruptcy Court in Wheeling, arguing that the sale would violate federal law by preventing full repayment of money owed on Medicare contracts. Instead, the sale proposes to set limits of up to $1.5 million for repayment on three contracts. The report said that objection was overruled. According to the report, eight other objections were resolved before 4 p.m., when the sale was approved. The sale will be closed on in the coming months, according to the report. As reported by the Troubled Company Reporter on June 17, 2014, Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., said they were canceling the June 17 auction for their assets, saying no qualified bids have been received. As reported by the TCR, pursuant to the asset purchase agreement, Alecto will (i) assume the assumed liabilities; (ii) pay or deliver to seller $15,000,000; (iii) pay the amount required under Section 2.9 of the APA; (iv) pay 50 percent of all transfer taxes due in connection with the closing of the transactions; and (v) on or before the one year anniversary of the closing, pay or deliver to the seller cash by wire of immediately available funds in the amount of $300,000 (the additional cash purchase price). As additional consideration for the sale, transfer, conveyance and assignment of the purchased assets, the purchaser will either spend or commit to spend at least $5,000,000 in capital expenditures at the Hospital during the two year period after the closing date. The APA also provides that in the event of any competing bids for the assets, resulting in the purchaser not being the successful buyer, Alecto will receive a breakup fee of $500,000 to be paid at the time of the closing of the sale with such third party buyer. The board-hired Cain Brothers and Associates, LLC, has assisted the Debtor in locating and negotiating with potential partners and purchasers for FGH, beginning in late 2011. From November 2011 through the end of 2012, Cain Brothers identified and brought to FGH 13 potential partners or buyers. About Fairmont General Hospital Inc. Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Hammond Hanlon Camp, LLC, has been engaged as investment banker and financial advisor. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. The Bankruptcy Court has named Suzanne Koenig at SAK Management Services, LLC, as patient care ombudsman. Ms. Koenig has hired her own firm as medical operations advisor; and Greenberg Traurig, LLP, as her counsel. The Debtors have scheduled $48,568,863 in total assets and $54,774,365 in total liabilities. FIRST MARINER: Now Known as "Capital Trust Holdings, Inc." ---------------------------------------------------------- First Mariner Bancorp changed its name to "Capital Trust Holdings, Inc." effective June 17, 2014, On June 17, 2014, the Company completed the sale of its wholly owned subsidiary, 1st Mariner Bank, which was accomplished by the merger of RKJS Bank, a Maryland trust company, with and into the Bank. Upon the closing of the merger transaction the Company received $18,725,949 in proceeds, which will be utilized to satisfy administrative costs and expenses of the Company and to fund distributions to the Company's creditors and other stakeholders in accordance with a Chapter 11 plan of liquidation, which plan of liquidation will be proposed by the Company and will be subject to Bankruptcy Court approval. The Company does not anticipate that any proceeds will be available to stockholders. About First Mariner Bancorp First Mariner Bancorp, the holding company for Maryland community bank 1st Mariner, filed for Chapter 11 bankruptcy on Feb. 10, 2014, in order to sell its bank subsidiary, 1st Mariner Bank, to a new bank formed by investors. The case is In re First Mariner Bancorp, Case No. 14-11952 (D. Md.) before Judge David E. Rice. The Debtor's bankruptcy counsel is Kramer Levin Naftalis & Frankel LLP. The Debtor's local counsel is Lawrence Joseph Yumkas, Esq., at Yumkas, Vidmar & Sweeney, LLC, in Annapolis, Maryland. The Debtor's regulatory and corporate counsel is Kilpatrick Townsend & Stockton LLP. The Debtor's investment banker and financial adviser is Sandler O'Neill + Partners, L.P. The Debtor has total assets of $5.45 million and total debts of $60.52 million. FLEET CARD FUELS: Case Summary & 16 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Fleet Card Fuels, a California Corporation Po Box 81685 Bakersfield, CA 93380 Case No.: 14-13216 Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court Eastern District of California (Fresno) Judge: Hon. Richard W. Lee Debtor's Counsel: Riley C. Walter, Esq. WALTER & WILHELM LAW GROUP 205 E. River Park Circle, Ste. 410 Fresno, CA 93720 Tel: 559-435-9800 Fax: 559-435-9868 Email: rileywalter@W2LG.com Total Assets: $1.34 million Total Liabilities: $735,980 The petition was signed by Richard Davies, president. A list of the Debtor's 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/caeb14-13216.pdf GENERAL MOTORS: Identifies Air Bag Glitch in Some Cruze Cars ------------------------------------------------------------ Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co. temporarily halted U.S. and Canadian sales of its best-selling car, the Chevrolet Cruze, over potential problems with air bags made by Japanese supplier Takata Corp. According to the report, GM initially ordered dealers to stop selling all new or used 2013 and 2014 Chevrolet Cruze cars then restricted the order to about 33,000 of the vehicles that it believes are equipped with air bag inflators that were assembled with the wrong part. Dealers can sell vehicles that aren't on the restricted list, the report said. Takata is already working to track down faulty air bags among millions of cars manufactured by seven other auto makers between 2000 and 2007, under an agreement with U.S. auto-safety regulators, the report 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. GFI GROUP: Fitch Lowers IDR to 'BB-' & Maintains Neg. Outlook ------------------------------------------------------------- Fitch Ratings has downgraded GFI Group Inc.'s long-term Issuer Default Rating (IDR) and senior unsecured debt rating to 'BB-' from 'BB' and maintained the Rating Outlook at Negative. Inter-dealer brokers (IDBs) continue to face a challenging operating environment as global trading activity remains subdued reflecting persistently low volatility, the more onerous regulatory environment for their dealer clients, and the uncertainty associated with structural regulatory reforms of the over-the-counter (OTC) derivatives markets. Fitch believes some of these trends will continue impacting brokerage revenues in the near to intermediate term. However, discipline on expenses, particularly compensation and debt pay downs have helped stabilize profit margins, leverage and interest coverage metrics for most IDBs. A return to aggressive compensation practices or large cash/debt funded acquisitions could put pressure on the IDB sector or individual companies. KEY RATING DRIVERS - IDRS AND SENIOR DEBT GFI's downgrade reflects increased pressure on the company's liquidity position, driven by increased working capital requirements, continued earnings pressure and continuation of the approximately $6 million quarterly dividend payment to shareholders. GFI's ratings are supported by its established position in the credit IDB space and the attractive technology platform and recurring revenue contribution from its Trayport and Fenics subsidiaries, which are subscription-based businesses with predictable revenues and high operating margins. The Negative Outlook reflects Fitch's expectation that GFI's operating performance will be challenged in the near term due to persistently low industry trading volumes, which in Fitch's view will impact GFI more than its peers due to its smaller scale and less diversified business model. Lower earnings, combined with continued regulatory related costs, could further impact liquidity levels. GFI's cash flow from operations declined to $19 million in 2013, from $48.7 million in 2012, as a result of higher working capital from increased accounts receivables, regulatory capital needs and start-up costs associated with setting up the company's swap execution facility (SEF). GFI's cash position, which it defines as cash and cash equivalents and cash held at clearing organizations excluding customer cash, declined to $221 million at the end of the first quarter of 2014 (1Q'14), compared to $247 million at year-end 2012 (YE12). Fitch believes that a majority of this cash is restricted for regulatory and clearing capital needs and the unrestricted cash position relative to debt has declined year-over-year. Although leverage, measured as debt to adjusted EBITDA, remained flat at 2.6x between trailing 12 months (TTM) 1Q'14 and fiscal year 2012 (FY12), interest coverage, measured as adjusted EBITDA to interest expense, weakened to 3.2x at TTM 1Q'14, compared to 3.5x at FY12, due to step up in interest rates following a ratings downgrade of the senior notes. The interest rate is now at its maximum of 10.375%, and Fitch expects the interest expense to stabilize at current levels. GFI's operating performance in 2013 and 1Q'14 continued to be pressured, but not at the same magnitude as the sharp decline experienced in 2012, as a decrease in financial brokerage revenues were offset by increased software, analytics, and market data (mainly Trayport and Fenics) revenues coupled with reduced expenses from cost cutting efforts. Fitch-calculated EBITDA, which does not give credit to amortization of sign-on bonuses and adds back non-recurring non-cash charges, increased slightly to $96.4 million for TTM ended 1Q'14, from $95 million at YE12. Although software, analytics, and market data revenues increased 8% year-over-year to $91 million in 2013, they only accounted for 12% of GFI's 2013 net revenues. Fitch expects the company to grow the revenue and earnings contribution from these relatively high- margin businesses, which could improve and diversify GFI's earnings profile. RATING SENSITIVITIES - IDRS AND SENIOR DEBT GFI's ratings could come under pressure if the company's liquidity levels, as measured under various metrics including cash flow from operations, balance sheet cash and Fitch-calculated EBITDA, continue to weaken. A further decline in interest coverage or an increase in leverage ratio could also pressure ratings. A revision of the Outlook to Stable could be driven by a sustained improvement in GFI's earnings and liquidity profile, increased contribution from its software, analytics, and market data business segments, while maintaining or improving its leverage and interest coverage ratios. Fitch has taken the following rating actions: GFI Group Inc. -- Long-term IDR downgraded to 'BB-' from 'BB'; -- Senior unsecured debt downgraded to 'BB-' from 'BB'. -- Short-term IDR affirmed at 'B'. The Rating Outlook is maintained at Negative. GLASSHOUSE TECHNOLOGIES: Files for Bankruptcy --------------------------------------------- Callum Borchers, writing for The Boston Globe, reported that Southborough data center services provider GlassHouse Technologies, poised to go public just a few years ago, filed for bankruptcy two months after it sold its consulting division to Phoenix-based Signature Technology Group. According to the report, GlassHouse filed in Worcester under Chapter 7 of the U.S. Bankruptcy Code, listing debts between $50 million and $100 million, owed to nearly 100 parties, and assets of less than $1 million. HAMPTON COUNTY: Moody's Cuts Gen. Obligation Debt Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has downgraded to Ba3 from A3 the rating on Hampton County School District No. 2's (SC) outstanding general obligation debt. The Ba3 rating affects $5.4 million in outstanding long-term debt secured by the district's general obligation unlimited property tax pledge. A negative outlook has been assigned. Summary Rating Rationale The downgrade of the district's underlying rating to Ba3 reflects the district's deficit fund balance and liquidity position, attributable to several consecutive years of operational imbalance and failure to enact timely expenditure cuts to offset declining revenues. The downgrade further factors in a reliance on the recent utilization of deficit financing and an emergency loan from Hampton County (A3) to cover delinquent cash-flow notes. Additionally, the rating reflects sharply declining enrollment for what is already a small school district that has a limited tax base, below average socioeconomic characteristics, and above average direct debt burden with slow payout. The negative outlook reflects the absence of a long-term plan for achieving and maintaining structural balance and rebuilding reserves. The outlook also incorporates the possibility that Hampton County could cease fiscal control and emergency funding if the stipulations of the emergency loan agreement are not met, which would likely result in additional operational imbalance and further weakening of credit quality. While the operations of the district have deteriorated and short- term notes have an increased risk of non-payment, long-term bonds carry an additional security by the South Carolina School District Credit Enhancement Program (SCSDCEP). The program assures timely long-term debt service payment through county and state government coordination and is backed by sizable annual state appropriations under the state's Education Finance Act (EFA). As the SCSDCEP is a state-backed enhancement program, the program's Aa1 rating is closely related to the state's rating and consequently carries the stable outlook that is assigned to the state's Aaa general obligation rating. Strengths -- Emergency loan from Hampton County secured repayment of the district's outstanding cash-flow notes in fiscal 2014 -- County has assumed control of the district's operations, though no long-term recovery plan has been created -- Additional security provided by state enhancement program, assuring timely debt service payment Challenges -- Deficit fund balance and deficit cash reserve levels following years of operational imbalance -- Heavy reliance on cash-flow borrowing and use of long-term deficit financing to cover cash-flow obligations -- History of weak financial management practices and unwillingness to match revenue losses with expenditures cuts -- Limited revenue-raising ability and limited flexibility to enact further expenditure cuts -- County reserves right to pull out of emergency loan agreement if stipulations are not met by the district -- Sharply declining enrollment, and limited tax base with below average wealth indices and high poverty levels -- Above average debt burden and Moody's Adjusted Net Pension Liability (ANPL) Outlook The negative outlook reflects Moody's expectation that the district will continue to struggle to achieve structurally balanced operations given a stagnant economy, flat property tax revenue and declining state aid. Moody's will continue to monitor management's ability to offset these revenue pressures with commensurate reductions to expenditures. Moody's will also continue to monitor management's ability to live within the constraints of the agreement with Hampton County. Failure to do so would likely result in further negative pressure. What Could Move The Rating Up (removal of the negative outlook): -- Positive operations in fiscal 2014 and articulation of long- term plans for achieving and maintaining structural balance -- Reduced reliance on cash-flow borrowing -- Timely repayment of the district's emergency loan What Could Move The Rating Down: -- Failure to eliminate the deficit fund balance and liquidity positions in a timely manner and/or continued financial deterioration -- Stipulations of emergency loan agreement are not met, resulting in elimination of fiscal support from the County -- Failure to provide full disclosure of audited financial and other budgetary, economic and enrollment information The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. HOUGHTON MIFFLIN: Fitch Affirms 'B+' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDR) of Houghton Mifflin Harcourt Publishers Inc. (HMH) and its subsidiaries. Fitch has also affirmed the senior secured term loan at 'BB+/RR1'. The Rating Outlook is Stable. KEY RATING DRIVERS HMH continues to be a leader in the K-12 educational material and services sector, capturing 38% of its Association of American Publishers addressable market in 2013. Fitch believes investments made into digital products and services will position HMH to take a meaningful share of the rebound in the K-12 educational market. Fitch expects HMH will be able to, at a minimum, maintain its market share. Fitch's base case model assumes revenue growth in 2014 in the mid to high-single digits, driven by new adoptions, including Texas, California and Florida. HMH has significant financial flexibility to invest into digital content and new business initiatives. These investments into international markets and adjacent K-12 educational material markets may provide diversity away from highly cyclical state and local budgets. The ratings reflect Fitch's belief that the current capital structure is not permanent, and that long term, HMH would carry higher levels of leverage and debt on its balance sheet. Fitch does not expect any leveraging transactions in the near term. Leverage and Liquidity Fitch calculates post-plate unadjusted gross leverage of 1.5x and post-plate adjusted gross leverage of 1.8x as of March 31, 2014. Fitch expects unadjusted leverage to decline to around 1.25x and adjusted leverage to decline to the 1.5x at year end. As of March 31, 2014, liquidity was supported by $168 million in cash and $101 million in short-term investments. The company also has $146 million in borrowing availability under the $250 million asset-backed revolver, due 2017. The term loans amortize $2.5 million per year until their 2018 maturity. Fitch calculates free cash flow (FCF) of negative $29 million in 2013. Fitch's base case projections expect FCF to turn positive in 2014 and range from $25 million to $50 million. 2013's FCF was impacted by costs associated with HMH's 2013 Initial Public Offering, and an unfavorable accounts receivable swing due to timing issues. Fitch's FCF projections do not expect a material working capital drain. Fitch expects HMH to continue to deploy cash (organically and through acquisitions) towards digital investments and adjacent K-12 educational material markets. This Recovery Rating analysis reflects a restructuring scenario (going-concern) and an adjusted, distressed enterprise valuation of $1.4 billion using a 6x multiple. Given the strong recovery prospects, the $250 million senior secured term loan and the $250 million asset-backed credit facility was notched up to 'BB+/RR1'. RATING SENSITIVITIES Negative Rating Actions: Revenue declines in the mid-to-high- single digits and/or consistent negative FCF generation (which would be contrary to Fitch's expectations) could result in rating pressures; Positive Rating Actions: Long-term, meaningful diversification into international markets and into new business initiatives could lead to positive rating actions. Also, positive rating actions may be considered if a clear financial policy that is commensurate with a higher rating is communicated, which could include a leverage target and/or strategy around shareholder policy in terms of dividends and share buybacks. In addition, HMH demonstrating that it can consistently generate positive Fitch calculated FCF in excess of Fitch's expectations may drive positive rating momentum. Fitch has affirmed the following ratings: HMH -- IDR at 'B+'; -- Senior secured term loan at 'BB+/RR1'; -- Senior secured asset backed revolver at 'BB+/RR1'. Houghton Mifflin Harcourt Publishing Company -- IDR at 'B+'. HMH Publishers LLC -- IDR at 'B+'. The Rating Outlook is Stable. IMMUCOR INC: S&P Cuts CCR to B on Weaker-Than-Expected Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Immucor Inc. to 'B' from 'B+'. The outlook is stable. At the same time, S&P lowered its issue-level rating on the company's first-lien debt to 'B+' from 'BB-'. The recovery rating remains '2', reflecting S&P's expectation for substantial (70%- 90%) recovery in the event of a payment default. S&P also lowered its issue-level rating on the company's second- lien debt to 'CCC+' from 'B-'. The '6' recovery rating remains unchanged, reflecting S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. "Our rating action on Norcross, Ga.-based Immucor Inc. follows the company's weaker-than-expected operating performance during the first three quarters of fiscal year 2014 and reflects our expectation of a further EBITDA margin contraction resulting in weaker credit protection measures and lower free operating cash flow," said credit analyst Maryna Kandrukhin. "These weaker credit metrics support our view that Immucor no longer favorably compares with its 'B' rated peers." The stable outlook reflects S&P's expectation that low- to mid- single-digit revenue growth and projected EBITDA margin contraction will result in very modest EBITDA expansion and limited cash flow generation over the next 12 months, which will sustain Immucor's adjusted debt leverage above 5x. Downside scenario S&P could lower its rating on Immucor if the company's operating performance deteriorates to the point where its cash flow turns negative. For Immucor, such a scenario could follow the company's inability to successfully implement its Transplant & Molecular business growth strategy exacerbated by further weakness in blood transfusion demand, and would encompass a single-digit revenue decline coupled with several hundred bps in EBITDA margin contraction. Upside scenario While unlikely, S&P could consider a higher rating if the company were able to improve its profitability and increase its FOCF to around $40 million to $45 million a year. Such improvement could result from increased scale on Immucor's Transplant business, as the segment grows internationally, and additional cost-cutting initiatives. INTELLIGRATED INC: S&P Keeps 'B' Rating Over 1st Lien Debt Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B' issue-level rating and '3' recovery rating on Ohio-based Intelligrated Inc.'s first-lien term loan due 2018 remain unchanged following the company's announcement that it will seek to add $65 million to its existing $255 million first-lien term loan, bringing the total issue amount to $320 million. The '3' recovery rating reflects S&P's expectation for meaningful recovery prospects (50%-70%) in the event of a payment default. S&P expects the company to use the proceeds, along with cash, to fully repay its outstanding $90 million second-lien credit facility. S&P will withdraw the issue and recovery ratings on the second-lien facility upon completion of the transaction. The 'B' corporate credit rating and stable outlook on the company remain unchanged. The debt reduction will result in modestly stronger credit measures and provide the company with some flexibility against weaker demand or operational performance. S&P's "weak" business risk profile assessment incorporates its view of the company's narrow focus in North America's highly fragmented material-handling market. Intelligrated designs, manufactures, installs, and services automated material-handling systems (conveyor belts, sortation products, and warehouse control software) for a variety of end markets, some of which include retail distribution, food and beverage, parcel handling, direct to consumer, and e-commerce). RATINGS LIST Intelligrated Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged Intelligrated Inc. $320 mil. first-lien term loan due 2018* B Recovery Rating 3 * Includes a $65 million add-on. INTERFAITH MEDICAL: Confirms Reorganization Plan ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Interfaith Medical Center Inc., the 287-bed acute- care hospital in Brooklyn, New York, that seemed on the way to shutting down, has survived its venture through Chapter 11 reorganization. According to the report, U.S. Bankruptcy Judge Carla E. Craig in Brooklyn signed a confirmation order approving the hospital's reorganization plan. The plan transfers the facility and other assets to the New York State Dormitory Authority, a secured lender and the largest creditor, the report related. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed $111,872,972 in assets and $193,540,998 in liabilities as of the Chapter 11 filing. Liabilities include $117.9 million owing to the New York State Dormitory Authority on bonds secured by the assets. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. CohnReznick LLP serves as financial advisor. Donlin, Recano & Company, Inc. serves as administrative agent. The Official Committee of Unsecured Creditors tapped Alston & Bird LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New York, LLC as its financial advisor. Eric M. Huebscher, the patient care ombudsman, tapped the law firm of DiConza Traurig LLP, as his counsel. ISTAR FINANCIAL: Fitch Affirms 'B' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) of iStar Financial Inc. (NYSE: STAR) at 'B'. Fitch has also upgraded the senior unsecured and convertible senior notes ratings to 'BB- /RR2'. On June 10, 2014, iStar announced that it agreed to sell $1.32 billion of senior unsecured notes, the proceeds of which, together with cash on hand, are intended to repay in full all amounts outstanding under, and terminate, its 2013 secured credit facility due 2017. KEY RATING DRIVERS The 'B' IDR is driven by improvements in the company's leverage, continued demonstrated access to the capital markets and new sources of growth capital and material reductions in non- performing loans (NPLs). Further improvements in the company's land and operating property portfolios should increase the company's earnings power and cash flows. Stronger performance should be driven by the mild improvement in commercial real estate fundamentals, value stabilization, and financing markets, which increases the likelihood of iStar's borrowers to repay their debt. RECOVERIES While concepts of Fitch's Recovery Rating methodology are considered for all companies, explicit Recovery Ratings are assigned only to those companies with an IDR of 'B+' or below. At the lower IDR levels, there is greater probability of default so the impact of potential recovery prospects on issue-specific ratings becomes more meaningful and is more explicitly reflected in the ratings dispersion relative to the IDR. The senior unsecured notes and senior convertible notes ratings of 'BB-/RR2' or a two-notch positive differential from iStar's 'B' IDR, are based on Fitch's estimate of superior recovery in the 71%-90% range based on iStar's current capital structure. In Fitch's view, the full repayment of the 2013 secured credit facility enabled the company to add higher quality assets with higher recoverable values than the pre-existing unencumbered pool, to iStar's pro forma unencumbered pool. This improves Fitch's estimates of recoveries for the company's unsecured obligations to the benefit of unsecured bondholders, resulting in stronger recoveries relative to the previous 'B/RR4' ratings. The preferred stock rating of 'CCC/RR6' or a three-notch negative differential from iStar's 'B' IDR, is based on Fitch's estimate of poor recovery based on iStar's current capital structure. Fitch's Recovery Rating criteria provide flexibility for a two- or three- notch negative differential between the IDR and instrument rating. A three-notch negative differential is based on the nature of iStar's perpetual preferred stock - a deeply subordinated security that has weak terms and remedies available both before and after a general corporate default (e.g. no stated maturity, an inability for holders to put the security back to the company, and iStar has the ability to defer dividends indefinitely without triggering a corporate default). The 2012 senior secured tranche A-2 secured credit facility rating of 'BB/RR1', or a three-notch positive differential from iStar's 'B' IDR, is based on Fitch's estimate of outstanding recovery in the 91%-100% range. These obligations represent first-lien security claims on collateral pools comprising primarily performing loans, credit tenant lease assets and operating properties. CAPITAL ACCESS IMPROVES LIQUIDITY AND GROWTH OPPORTUNITIES iStar has accessed the public capital markets five times since the beginning of 2013, raising $2.3 billion. Uses of proceeds have been to repay indebtedness, refinance upcoming unsecured debt maturities and for general corporate purposes. Importantly, the company raised $200 million of convertible perpetual preferred stock in 2013, the first non-debt capital STAR raised via the public markets since 2007. The ability to raise growth capital for future investment is indicative of the market's improved confidence in the company's management and ability to invest in assets with good risk-adjusted returns. IMPROVING LOAN PORTFOLIO METRICS The company has reduced its gross NPL balance by 47% since the beginning of 2013 through a combination of loan sales and loans returning to performing status. The quality of STAR's loan portfolio has improved, with gross NPLs representing approximately 31% of the company's gross loan portfolio balance as of March 31, 2014, down from 42% as of Dec. 31, 2012. The company's ability to monetize its NPLs has generated additional cash flow to repay debt. Further, NPLs net of asset-specific reserves comprise approximately $200 million or only 4% of gross undepreciated assets as of March 31, 2014, indicative of limited exposure going forward. LAND PORTFOLIO CURRENTLY AN EARNINGS DRAG, BUT GROWTH DRIVER The land segment makes up approximately 19% of the carrying value of the company's portfolio as of March 31, 2014, and generates minimal revenue and a significant segment loss. The segment is currently a cash flow drain as the company invests capital toward improving the land for development and/or sale. Fitch expects that this segment will begin generating cash flow over the next several years, but the company will likely need to invest significant capital during this time period to realize the embedded value in its land holdings. IMPROVING BOOK LEVERAGE; HIGH CASH FLOW LEVERAGE The company's leverage on a net debt/undepreciated book equity basis has improved to 2.2x as of March 31, 2014 from 2.8x as of Dec. 31, 2012. The improvement in book leverage has been driven by significant debt reduction via proceeds from loan sales and monetizations of other real estate assets and investments. On a net debt/latest 12 months (LTM) EBITDA basis leverage was approximately 15x as of March 31, 2014, up from approximately 13x as of Dec. 31, 2012. This high leverage is due to the weak earnings power of the overall portfolio. LOW COVERAGE Fixed charge coverage was only 0.8x for the 12 months ended March 31, 2014, compared with 0.8x and 0.7x for the years ended Dec. 31, 2012 and 2011, respectively. The weak coverage is driven in part by the land segment, which has generated substantial losses over the last several years. Fitch expects this ratio to strengthen moderately as the company reduces debt from proceeds of loan resolutions and asset sales and begins to recognize additional earnings from lease-up of assets within its operating property segment, further sales of residential properties, and land monetizations. MODESTLY CONSTRAINED GROWTH The company is moderately constrained by non-compliance with an unsecured bond fixed charge incurrence covenant, which limits the company's ability to incur any additional debt to grow its investment portfolio. STAR's growth will occur via investment of unrestricted cash on hand, asset sales proceeds and from external capital raising, such as preferred stock and, potentially, common equity. The company's recently announced joint venture with a sovereign wealth fund to acquire and develop up to $1.25 billion of net lease assets is indicative of the company's ability to obtain growth capital outside of traditional capital markets channels. In addition, the company closed on approximately $950 million of new investments between June 2013 and March 2014, which should drive future revenue growth. POSITIVE OUTLOOK The Positive Outlook is based on Fitch's expectation that the company will be able to access the capital markets to refinance indebtedness and obtain growth capital to expand its portfolio. Further, the company does not have meaningful debt maturities until 2016 when 22% of debt matures, creating a stronger liquidity profile and providing the company adequate runway to redeploy asset sales proceeds and loan repayments towards future investments. In addition, recovery in commercial real estate fundamentals and valuations should enable the company to further monetize assets within its operating property segment and its unencumbered asset pool more broadly. RATING SENSITIVITIES The following may have a positive impact on iStar's ratings and/or Outlook: -- Demonstrated ability to generate earnings and monetize assets within the company's land segment; -- Generating adequate earnings to be able to incur additional debt under the company's debt incurrence fixed charge covenant; -- Further monetization of the company's unencumbered real estate investment portfolio via asset sales to repay unsecured debt; -- Continued demonstrated access to the common equity or unsecured bond market. The following may have a negative impact on the ratings and/or Outlook: -- Deterioration in the quality of iStar's loan portfolio, including an increase in non-performing loans and additional provisions for loan losses; -- An inability for the company to generate earnings and monetize land segment assets; -- Encumbrance of the company's higher-quality assets. Fitch has taken the following rating actions for iStar Financial Inc.: -- IDR affirmed at 'B'; -- 2012 senior secured tranche A-2 due March 2017 affirmed at 'BB/RR1'; -- Senior unsecured notes upgraded to 'BB-/RR2' from 'B/RR4'; -- Convertible senior notes upgraded to 'BB-/RR2' from 'B/RR4'; -- Preferred stock affirmed at 'CCC/RR6'. Fitch has withdrawn the ratings on the 2013 secured credit facility due 2017 as this obligation has been paid in full. The Rating Outlook is Positive. JAMES AND ASSOC: Clients Must Contact LSUC by Aug. 15 ----------------------------------------------------- Pursuant to the Order of the Ontario Superior Court of Justice dated May 7, 2014, The Law Society of Upper Canada is the trustee of funds from the trust account of lawyer Kenneth James o/a James and Associates, 507-3100 Steeles Avenue West, Concord, Ontario L4K 3RI. Any persons, including clients or estate beneficiaries, who believe they may be entitled to funds held by Mr. James are asked to contact the Law Society's Trustee Services Department by Aug. 15, 2014. Trustee Services Department The Law Society of Upper Canada Tel: 416-947-3366 Fax: 416-644-4880 E-mail: trustee_services@lsuc.on.ca JHCI ACQUISITION: Moody's Affirms 'B3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed JHCI Acquisition, Inc.'s ("JHCI" or "Jacobson Companies") existing ratings including its B3 corporate family rating ("CFR") and B3-PD probability of default ratings. Concurrently, Moody's affirmed the company's B1 rating on its first lien revolver and term loan and Caa1 rating on its second lien term loan. The outlook was changed to positive from stable due to the expectation that the company's credit metrics will likely improve over the intermediate term as a result of an improvement in operating earnings combined with debt repayments. Ratings Affirmed: Corporate Family Rating, at B3 Probability of Default Rating, at B3-PD $25 million first lien senior secured revolving credit facility due 2018, at B1 (LGD-2, 27%) from (LGD-2, 28%) $275 million first lien term loan due 2019, at B1 (LGD-2, 27%) from (LGD-2, 28%) $110 million second lien term loan due 2020, at Caa1 (LGD-5, 74%) JHCI's outlook was changed to positive from stable. The positive outlook considers that the company's refocused business strategy, new business wins and cost reduction actions have had a favorable impact on operating performance that is expected to continue. In addition, proactive use of cash generation towards debt reduction above that required per the company's bank credit agreements also supports the change in outlook. The affirmation of JHCI's B3 CFR reflects the company's highly levered capital structure, modest interest coverage and adequate cash balances. The ratings are supported by the long-term nature of JHCI's dedicated customer contracts, the focus on certain less volatile consumer end-markets, a largely asset-light business and a history of positive free cash flow generation. The company derives benefits from its asset-light business model and resulting ability to vary costs in line with changing demand. However, similar to its peers, it is susceptible to pricing pressures in a competitive and fragmented industry. Credit metrics are anticipated to improve from a refocused business strategy started in the fourth quarter of 2012 centered on JHCI's core vertical operations in the U.S., the divestiture of its non-core international operations in mid-2013 and implementation of several cost savings initiatives. In Moody's view, the less cyclical nature of some of the company's primary end-markets serves to partially counterbalance the slow rate of expected U.S. macroeconomic growth over the intermediate term. The positive outlook is based on the expectation that operating results will likely improve as a result of the company's refocused business strategy and that excess cash generation will be used towards further debt reduction over the near-term. Ratings could be upgraded if the company continues to generate free cash flow and use proceeds to pay down debt while maintaining operating margins above 7.0%. A ratings upgrade would also be considered if JHCI's credit metrics improve such that Moody's adjusted debt/EBITDA improves to and is sustained below 5.5 times and EBIT/interest improves to 2.0x and is sustained at those levels. Ratings could be downgraded if the company's liquidity position deteriorates including cash balances declining from current levels, Moody's adjusted debt/EBITDA exceeds 7.0x and/or interest coverage remains well below 1.0 times. The principal methodology used in this rating was the Global Surface Transportation and Logistics Companies 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. JHCI is a wholly-owned subsidiary of JHCI Holdings, Inc., the vehicle majority owned by Oak Hill Capital Partners, created to effect the acquisition of Jacobson Holding Co. and the 2007 merger of Arnold Logistics, LLC (together Jacobson). JHCI operates its businesses using the Jacobson Companies name. Jacobson Companies, headquartered in Des Moines, Iowa, is a leading national third-party logistics company that provides value added warehousing, packaging, contract manufacturing, staffing, contract logistics, transportation and freight management services. LYNN LEE OF PINELLAS: Case Summary & 8 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Lynn Lee of Pinellas County, Inc. dba Sun-Dial Resort Motel Apartments dba Green Gables Resort Motel 7201 Sunset Way Saint Pete Beach, FL 33706 Case No.: 14-07304 Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: 813-877-4669 Fax: 813-877-5543 Email: Buddy@tampaesq.com All@tampaesq.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Leslie Hughes, president. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-07304.pdf MACKEYSER HOLDINGS: Bankruptcy Shutters Aspen Eye Clinic -------------------------------------------------------- Curtis Wackerle, writing for Aspen Daily News, reported that the Aspen office of two eye doctors abruptly closed on June 20 as the parent company which recently purchased the practice filed for Chapter 11 bankruptcy. Dr. Tim Bauer, the eye doctor who sold the practice to American Optical Services in September but still sees patients there, said he expects the business to fall back to him as the case is handled by the U.S. Bankruptcy Court in Delaware, where the case was filed. American Optical Services is a subsidiary of MacKeyser Holdings of Las Vegas. The report added that when the filing came down on Friday, the Aspen office closed. Bauer said he hopes to reopen Aspen and Carbondale offices by the end of the week or next. About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. MARTIN MARIETTA: Moody's Confirms Ba1 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service confirmed Martin Marietta Materials Inc.'s Corporate Family Rating at Ba1 with a stable outlook. The action concludes the review for possible downgrade placed on the ratings January 28, 2014, which was prompted by the announcement of Martin Marietta and Texas Industries, Inc. ("TXI") entering into a definitive merger agreement. Moody's also assigned Ba1 ratings to Martin Marietta's proposed senior unsecured notes. Martin Marietta's Corporate Family Rating and senior unsecured ratings are Ba1, Probability of Default Rating is Ba1-PD, Speculative Grade Liquidity assessment is SGL-2 and commercial paper rating is Not Prime. The ratings for TXI remain under review for possible upgrade. On June 23, 2014, Martin Marietta announced that it would raise a total of $700 million in senior unsecured notes. The net proceeds from the offering, along with cash on hand and drawings under its trade receivables facility and/or its revolving credit facility, will be used to redeem all $650 million in principal amount of the outstanding TXI notes. Martin Marietta and TXI are expected to consummate their merger on July 1, 2014, and TXI will become a wholly-owned subsidiary of Martin Marietta. At that time, Moody's will raise TXI's note ratings to Ba1 with a stable outlook, consistent with the ratings of Martin Marietta. Moody's will withdraw the TXI note ratings following the repayment of the TXI notes. The following ratings actions were taken: Issuer: Martin Marietta Materials, Inc.: Ba1 Corporate Family Rating, confirmed at Ba1; Ba1-PD Probability of Default Rating, confirmed at Ba1-PD; $300 million senior unsecured notes, assigned at Ba1 - LGD4; $400 million senior unsecured notes, assigned at Ba1 - LGD4; Ba1 -- LGD4 rating on senior unsecured notes, confirmed at Ba1 -- LGD4; Speculative Grade Liquidity assessment is SGL-2; Commercial paper rating is Not-Prime. The rating outlook is stable. Ratings Rationale On January 27, 2014, Martin Marietta entered into a merger agreement with Texas Industries, Inc. ("TXI") in a stock-for-stock transaction valued at $2.7 billion. The transaction, which is expected to close on July 1, 2014, will give Martin Marietta roughly 69% ownership of the combined company, and Texas Industries shareholders the remaining 31%. The merged company will operate under the Martin Marietta name and management. As of December 31, 2013, the combined company has pro forma annualized revenues of approximately $2.9 billion. Martin Marietta's Ba1 ratings benefit from the company's position as one of North America's leading aggregates producers; expanded geographic footprint, product diversity and distribution network; typically stable operating performance in most, but not all, economic scenarios; and diverse end-markets including public, private residential and non-residential construction. Following the TXI merger, Martin Marietta will become a leading cement producer in Texas. The rating also incorporates the highly competitive nature of the industry, added volatility from the cement and ready-mixed concrete businesses, and the company's lack of multinational diversity. Martin Marietta effectively derives all of its income from operations in North America, with a concentration of income from Texas, and is smaller in scale than more highly rated multinational building materials companies. Merging with TXI will expose Martin Marietta to a new business line - the capital-intensive cement business - and adds to its ready-mixed concrete business, the latter of which has less pricing power and lower profitability than aggregates. These factors historically have made cement and ready-mixed concrete companies more volatile performers. Moody's notes that the company's adjusted debt leverage increases to 4.1x pro forma for the acquisition, from 3.0x for LTM March 31, 2014. However, Moody's expect this metric to decline, mostly through EBITDA growth, over the near-term. The ratings incorporate Moody's expectation that Martin Marietta will operate with adjusted debt-to-EBITDA in the 2.5x-3.0x range. The company's SGL-2 reflects good liquidity over the next 12 to 18 months. At March 31, 2014, the company's liquidity was supported by $36 million of cash on hand, availability of $330 million under its unsecured revolving credit facility, and Moody's expectation that the company will remain operating cash flow positive over the next twelve months. The company's liquidity is also supported by absence of near-term debt maturities, with its revolving credit facility coming due in March 2018. The company's assets are largely unencumbered by liens, providing a significant amount of alternative financial flexibility if needed. The company's credit facility is governed by a debt to EBITDA ratio of 3.5x. Moody's expect the company to be in compliance with this covenant over the next 12 to 18 months. The stable outlook presumes that the company will carefully balance its financial policy including maintaining acceptable liquidity and debt leverage and other credit metrics against its growth strategies, which may include various "tuck-in" acquisitions. Furthermore, it reflects Moody's expectations that Martin Marietta's operating performance will improve as construction activity continues to recover and that Martin Marietta will be able to smoothly integrate TXI's operations. Moody's indicated that upward rating consideration would follow debt reduction and improved and sustained operating margins and cash flow. Ratings upgrade could occur if adjusted debt-to-EBITDA is sustained comfortably below 2.5x, adjusted EBIT-to-interest expense is consistently above 4.0x, and liquidity is abundant. Martin Marietta's ratings could be pressured downward in the event that the company's liquidity deteriorated or if adjusted debt-to- EBITDA exceeds 4.0x and adjusted EBIT-to-interest expense declines below 2.5x. The rating could also be downgraded should the company experience integration issues or if it pursues a materially levering transaction. 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. Martin Marietta Materials, Inc. ("Martin Marietta"), headquartered in Raleigh, North Carolina, is one of the leading U.S. producers of aggregates for infrastructure, commercial, agricultural and residential construction. Aggregates account for nearly 88% of the company's revenues. The company also manufactures magnesia-based chemical products, and dolomitic lime in its Specialty Products segment. In the LTM period ending March 31, 2014, Martin Marietta generated approximately $2.2 billion in revenues. MARVIN H RICHER: Ill. Judge Affirms Ruling on Morehead Claim ------------------------------------------------------------ District Judge Philip G. Reinhard of the U.S. District Court for the Northern District of Illinois, Western Division, affirmed a judgment of the bankruptcy court allowing the claim of Patrick Morehead, as a general unsecured claim in the amount of $937,079.44 against the Chapter 11 bankruptcy estate of Marvin H. Richer and Gail L. Richer. The Richers had commenced an adversary proceeding against Mr. Morehead to determine the nature and extent of and objection to Mr. Morehead's claim. Counts III and IV of the adversary complaint were dismissed with prejudice. The parties subsequently filed cross motions for summary judgment on the remaining Counts I and II. The bankruptcy court granted Mr. Morehead's motion, denied the Richers' motion, and entered judgment on January 15, 2014. The Richers filed timely notice of appeal on January 28, 2014. The case before the District Court is, Marvin H. Richer, et al., Plaintiffs, v. Patrick Morehead, Defendant, CASE NO. 14 C 50043 (N.D. Ill.). A copy of the District Court's June 23, 2014 Statement-Opinion is available at http://is.gd/4pIBqKfrom Leagle.com. Crystal Lake, Illinois-based Marvin H. Richer and Gail L. Richer filed for Chapter 11 bankruptcy protection on September 27, 2010 (Bankr. N.D. Ill. Case No. 10-74803). Bradley T. Koch, Esq., at Holmstrom & Kennedy P.C., assisted the Debtors in their restructuring efforts. The Debtors estimated their assets and debts at $10 million to $50 million. MEE APPAREL: Closes 12-Mil. Sale of Assets to Suchman ----------------------------------------------------- MEE Apparel LLC and MEE Direct LLC informed the U.S. Bankruptcy Court for the District of New Jersey that Suchman LLC closed the purchase of substantially all of MEE's assets pursuant to the asset purchase agreement dated May 30, 2014. Judge Christine M. Gravelle approved the sale of the Debtors' assets to Suchman for $12 million, plus the assumption of certain liabilities. At closing, the buyer agreed to deposit for the benefit of general unsecured creditors the sum of $1 million to be disbursed pursuant to a plan of liquidation, with such plan of liquidation to provide that (a) insiders of the Debtors, including, but not limited to, Seth Gerszberg, any individual related to Seth Gerszberg by blood or marriage, any entity in which Seth Gerszberg or Emily Holton have at least a 50% ownership interest; Suchman LLC, 3TAC LLC, and Ecko Asia Trading Ltd., will waive all claims against the Debtors' estates and not share in the distribution thereof; and (b) the distributions from the GUC Distribution Account will be made by a plan administrator whom will be jointly selected by the Debtors and the Official Committee of Unsecured Creditors. The TCR noted MEE Apparel cancelled its May 21 auction due to a lack of competing bids. Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted that MEE Apparel obtained approval of the sale of its assets less than two months after its Chapter 11 filing. A full-text copy of the sale notice and the asset purchase agreement is available for free at http://is.gd/1KPeuL About MEE Apparel Founded in 1993 by Marc Ecko, Gerszberg and Marci Tapper, MEE Apparel LLC and MEE Direct LLC are providers of youth apparel and streetwear under the "Ecko Unltd." and "Unltd." brands. Evolving from just six t-shirts and a can of spray paint, MEE has become a full scale global fashion and lifestyle company. In 2013, MEE Apparel generated gross sales of approximately $50 million. MEE Apparel LLC and MEE Direct LLC filed Chapter 11 bankruptcy petitions (Bankr. D.N.J. Case Nos. 14-16484 and 14-16486) on April 2, 2014. The Debtors have a deal to sell the assets to owner and lender Seth Gerszberg's Suchman, LLC, at a bankruptcy court-sanctioned auction. As of the Petition Date, the Debtors had assets of approximately $30 million and liabilities of $62 million, including $25 million of debt outstanding to unsecured creditors. Judge Christine M. Gravelle presides over the Chapter 11 cases. Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtor's counsel. Prime Clerk LLC is the Debtor's claims and noticing agent. Innovation Capital, LLC, acts as the Debtor's investment banker. The petitions were signed by Jeffrey L. Gregg as chief restructuring officer. MEE APPAREL: Amends Schedules of Assets and Liabilities ------------------------------------------------------- MEE Apparel LLC filed amended schedules of assets and liabilities in the U.S. Bankruptcy Court for the District of New Jersey, disclosing total assets of 73,137,069, and total liabilities of 91,634,819. MEE Apparel LLC and MEE Direct LLC previously disclosed total assets of 2,791,535, and total liabilities of 65,197,550 on April 29, 2014. A full-text copy of the MME Apparel's schedules is available for free at http://is.gd/PKlyGY A full-text copy of the MME Apparel and MEE Direct's schedules is available for free at http://is.gd/EqKubE About MEE Apparel Founded in 1993 by Marc Ecko, Gerszberg and Marci Tapper, MEE Apparel LLC and MEE Direct LLC are providers of youth apparel and streetwear under the "Ecko Unltd." and "Unltd." brands. Evolving from just six t-shirts and a can of spray paint, MEE has become a full scale global fashion and lifestyle company. In 2013, MEE Apparel generated gross sales of approximately $50 million. MEE Apparel LLC and MEE Direct LLC filed Chapter 11 bankruptcy petitions (Bankr. D.N.J. Case Nos. 14-16484 and 14-16486) on April 2, 2014. The Debtors have a deal to sell the assets to owner and lender Seth Gerszberg's Suchman, LLC, at a bankruptcy court-sanctioned auction. As of the Petition Date, the Debtors had assets of approximately $30 million and liabilities of $62 million, including $25 million of debt outstanding to unsecured creditors. Judge Christine M. Gravelle presides over the Chapter 11 cases. Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtor's counsel. Prime Clerk LLC is the Debtor's claims and noticing agent. Innovation Capital, LLC, acts as the Debtor's investment banker. The petitions were signed by Jeffrey L. Gregg as chief restructuring officer. MEMORIAL RESOURCE: Moody's Rates $300MM Sr. Secured Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Memorial Resource Development Corp.'s (MRD) proposed $300 million senior unsecured notes due 2022. Moody's also assigned a B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating (PDR), and SGL-2 Speculative Grade Liquidity Rating (SGL). The outlook is stable. On June 18, 2014, MRD completed its initial public offering (IPO) pursuant to which it sold 21,500,000 shares of common stock to the public at an offering price of $19.00 per share. MRD received net proceeds of $382.1 million, of which approximately $360 million will be used to redeem the outstanding senior unsecured PIK toggle notes due 2018 issued by Memorial Resource Development LLC, with Memorial Resource Finance Corp. serving as a co-issuer of the PIK notes. In conjunction with the closing of the IPO, MRD entered into a $2.0 billion senior secured revolving credit facility with an initial borrowing base of $725 million and aggregate elected commitments of $725 million. The company borrowed approximately $620 million from under the secured revolver primarily to pay off in full and terminate WildHorse Resources' (B2 stable) revolving credit facility and second lien term loan. Proceeds from the proposed $300 million senior unsecured notes offering will be used to repay a portion of the outstanding borrowings under MRD's senior secured revolver. Upon conclusion of this financing, Moody's will withdraw all ratings on Memorial Resources Development LLC and WildHorse Resources, LLC in accordance with Moody's Withdrawal Policy on www.moodys.com. "The B2 CFR on Memorial Resource Development Corp. is reflective of its consolidated asset base, simplified capital structure and enhanced financial flexibility," stated Michael Somogyi, Moody's Vice President -- Senior Analyst. Rating Assignments: Memorial Resource Development Corp. (MRD) Corporate Family Rating (CFR), assign B2 Probability of Default Rating (PD), assign B2-PD $300 million senior unsecured notes due 2022, assign Caa1 (LGD-5, 85%) Speculative Grade Liquidity Rating (SGL), assign SGL-2 Outlook, stable Ratings Withdrawals: Memorial Resource Development LLC Corporate Family Rating (CFR), B3 withdrawn Probability of Default Rating (PD), B2-PD withdrawn $350 million senior PIK toggle notes, B3 (LGD-4, 66%) withdrawn Speculative Grade Liquidity Rating (SGL), SGL-2 withdrawn WildHorse Resources, LLC Corporate Family Rating (CFR), B2 withdrawn Probability of Default Rating (PD), B2-PD withdrawn $325 million Senior Secured Second Lien Term Loan facility, B3 (LGD-5, 73%) withdrawn Speculative Grade Liquidity Rating (SGL), SGL-3 withdrawn MEMORIAL RESOURCE: S&P Assigns 'B' CCR & Rates $300MM Notes 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Houston-based E&P company Memorial Resource Development Corp. The outlook is stable. At the same time, S&P assigned its 'B-' issue-level rating to the company's proposed $300 million senior unsecured notes due 2022, with a recovery rating of '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. S&P also assigned its 'BB-' issue-level rating to the company's proposed $2 billion senior secured revolving credit facility (with commitments of $725 million) with a recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default. "The stable outlook reflects our expectation that MRD will maintain total adjusted debt to EBITDA below 5x and adequate liquidity while increasing production," said Standard & Poor's credit analyst Christine Besset. S&P believes an upgrade is unlikely within the next year given the company's projected reserve base profile. Nevertheless, S&P would consider an upgrade in the medium term if the company expanded production meaningfully and increased the percentage of proved developed reserves while keeping leverage lower than 4x. S&P will consider a downgrade if leverage exceeds 5x, leading to a reassessment of the company's financial policy, or if liquidity deteriorates significantly. This would most likely occur if the company incurred debt to finance distributions to its shareholders, higher-than-anticipated capital spending, or acquisitions. METEX MFG: Confirms Another Chapter 11 Reorganization Plan ---------------------------------------------------------- Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York on June 23 issued a findings of fact, conclusions of law and order confirming Metex Mfg. Corporation's Plan of Reorganization, after determining that the Plan satisfies the confirmation requirements of the Bankruptcy Code. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the overwhelming majority of asbestos-related personal injury claimants -- the only class entitled to vote -- cast ballots in favor of the new plan, dealing with asbestos claims arising after the first bankruptcy. The initial distribution on asbestos-related personal injury claims will be 18 percent, Mr. Rochelle said. In relation to the confirmation of the Plan, Judge Morris also approved settlements between Metex and several insurance companies, including Travelers Casualty and Surety Company, f/k/a The Aetna Casualty and Surety Company; Home Insurance Company; Liberty Mutual; Hartford Accident and Indemnity Company; Fireman's Fund Insurance Company; National Fire Insurance Company of Hartford; American Home Assurance Company, Granite State Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA; Century Indemnity Company; and Allianz Global Risk US Insurance Company. Mr. Rochelle said the insurance companies' contributions of $182.1 million to $189.8 million will help finance the distributions. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. Metex filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Paul M. Singer, Esq., and Gregory L. Taddonio, Esq., at Reed Smith LLP, in Pittsburgh, Pa.; and Paul E. Breene, Esq., and Michael J. Venditto, Esq., at Reed Smith LLP, in New York, N.Y., represent the Debtor as counsel. In connection with the case, the U.S. Trustee appointed a committee of five individual asbestos plaintiffs asserting claims against Kentile. The plaintiffs are represented by five law firms: Belluck & Fox; Weitz & Luxenberg, P.C.; Early Lucarelli Sweeney & Strauss; Cooney & Conway; and Gori Julian & Associates, PC. The Asbestos Claimants Committee engaged Caplin & Drysdale, Chartered, as its bankruptcy counsel, Gilbert LLP as its special insurance counsel, Legal Analysis Systems, Inc., as its consultant, and Charter Oak Financial Consultants, LLC, as its financial advisor. On Jan. 16, 2013, the Bankruptcy Court appointed Lawrence Fitzpatrick as the Future Claimants' Representative. Mr. Fitzpatrick engaged Young Conaway Stargatt & Taylor, LLP as his counsel, and Analysis Research & Planning as his econometrician. METRO-GOLDWYN-MAYER: New $300MM Debt No Impact on Moody's Ba2 CFR ----------------------------------------------------------------- Moody's Investors Service said that Metro-Goldwyn-Mayer Inc.'s ("MGM") Ba2 Corporate Family rating ("CFR"), Ba2-PD Probability of Default rating and the Ba3 rating on the new second lien senior secured term loan are not affected by the proposed $100 million increase in the size of its second lien term loan to a total of $300 million. The incremental $100 million provides additional liquidity in the form of balance sheet cash and will be used for general corporate purposes. The rating outlook is stable. Unchanged: Issuer: Metro-Goldwyn-Mayer Inc. Corporate Family Rating: Ba2 Probability of Default Rating: Ba2-PD Outlook is stable Upsized $300 million Second Lien Senior Secured Term Loan: Ba3, LGD5 -- 74% (from LGD5 -- 78%) Ratings Rationale The Ba2 CFR assigned on June 4, 2014, incorporates the increase in MGM's funded debt from $200 million to $300 million and continues to reflect the company's strong credit metrics, including low pro forma debt-to-EBITDA and solid free cash flow to debt. The upsizing impact on leverage ranges from 0.2x -- 0.4x (incorporating Moody's standard adjustments) from 2014 to 2016 based on Moody's projections but even with the incremental debt Moody's expect that on average debt-to-EBITDA will float around 1.0x. Further, MGM's strong expected free cash flows provide good financial flexibility to manage the moderately higher leverage and absorb incremental interest expense, estimated in the range of $6 million. Accordingly, Moody's believes that MGM's credit metrics remain comfortably within parameters appropriate for the Ba2 rating, despite the uptick in debt levels. Moody's cautions, however, that the upsizing of the term loan constrains MGM's capacity for debt incurrence as maintenance of low leverage levels in the 1.0x or lower range is key to the company's current credit ratings, given the volatility in the motion picture industry and potential for rapid deterioration in profit levels from poor box office performances of feature films. The last rating action was on June 4, 2014, when Moody's assigned a Ba2 CFR and a Ba3 rating to the initial $200 million second lien term loan. Metro-Goldwyn-Mayer Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Metro-Goldwyn-Mayer Inc.'s core industry and believes Metro- Goldwyn-Mayer Inc's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Metro-Goldwyn-Mayer Inc., based in Beverly Hills, California, produces and distributes motion pictures, television programming, home videos, interactive media, music, and licensed merchandise. It owns a library of films and television programs and holds ownership interests in domestic and international television channels. Revenue for LTM 3/31/2014 were approximately $1.4 billion. MF GLOBAL: Trustee Says Most Customer Claims Are Complete --------------------------------------------------------- Law360 reported that the trustee for the Securities and Protection Act liquidation of MF Global Inc. said that final distribution on allowed customer claims was nearly complete, and that he was making "urgent efforts" to reconcile the remaining claims, most of which haven't received final court approval. According to the report, James W. Giddens said that more than 99 percent of distributions on 26,000 allowed customer net equity claims were complete, with $6.37 billion going to more than 21,000 customers. Just under 2,000 claims remain, and Mr. Giddens said his staff was making several hundred calls a week in an attempt to spur the last customers to provide the necessary information and documentation in order to be paid, the report related. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MFH ENTERPRISES: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: MFH Enterprises, LLC P.O. Box 2412 Santa Rosa Beach, FL 32459 Case No.: 14-30689 Chapter 11 Petition Date: June 24, 2014 Court: United States Bankruptcy Court Northern District of Florida (Pensacola) Debtor's Counsel: John E. Venn, Esq. JOHN E. VENN, JR., P.A. 220 W. Garden St., Suite 603 Pensacola, FL 32502 Tel: 850-438-0005 Fax: 850-438-1881 Email: johnevennjrpa@aol.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Milton H. Fulmer, managing member. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/flnb14-30689.pdf MT. GOX: Obtains Ch. 15 Protection Though Venue in Doubt -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Japanese trustee for the Mt. Gox bitcoin exchange got a ruling from a judge in Dallas giving protection from creditors in the U.S. under Chapter 15, although the venue of where the U.S. side of the bankruptcy will be conducted remains to be decided. According to the report, on June 17, the bankruptcy judge in Dallas recognized Japan as presiding over the company's primary bankruptcy. Although there were no objections to recognition of the Japanese bankruptcy, plaintiffs representing bitcoin owners in a class suit in Chicago suit have said the bankruptcy should be moved to Chicago, the report related. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange that halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at Baker & Mcckenzie LLP, in Dallas, Texas. The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. NAVISTAR INTERNATIONAL: Extends Expiration of Rights Agreement -------------------------------------------------------------- Navistar International Corporation and Computershare Inc., successor-in-interest to Computershare Shareowner Services LLC, as Rights Agent under the Rights Agreement, dated as of June 19, 2012, as amended from time to time, between the Company and the Rights Agent, entered into Amendment No. 6 to the Rights Agreement. Amendment No. 6 amends and restates Section 7(a) of the Rights Agreement in order to bring forward the expiration date of the Rights Agreement from June 18, 2015, to July 1, 2014. A full-text copy of Amendment No. 6 to the Rights Agreement, dated as of June 17, 2014, between Navistar International Corporation and Computershare Inc., successor-in-interest to Computershare Shareowner Services LLC, as rights agent, is available at: http://is.gd/RLYuvo About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar International reported a net loss attributable to the Company of $898 million for the year ended Oct. 31, 2013, following a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012. The Company's balance sheet at April 30, 2014, showed $7.72 billion in total assets, $11.79 billion in total liabilities and a $4.07 billion total stockholders' deficit. * * * In the Oct. 9, 2013, edition of the TCR, Moody's Investors Service affirmed the ratings of Navistar International Corporation, including the B3 Corporate Family Rating (CFR). The ratings reflect Moody's expectation that Navistar's successful incorporation of Cummins engines throughout its product line up will enable the company to regain lost market share, and that progress in addressing component failures in 2010 vintage-engines will significantly reduce warranty expenses. As reported by the TCR on Oct. 9, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'CCC+' from 'B-'. "The rating downgrades reflect our increased skepticism regarding NAV's prospects for achieving the market shares it needs for a successful business turnaround," said credit analyst Sol Samson. In January 2013, Fitch Ratings affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NGL ENERGY: Fitch Assigns 'BB-' Rating on Sr. Unsecured Notes ------------------------------------------------------------- Fitch Ratings assigns a 'BB-' rating to NGL Energy Partners LP's proposed offering of senior unsecured notes due 2019. The notes are to be co-issued by NGL Energy Finance Corp. (NGL Energy Finance) which also has a rating of 'BB-' for the proposed new unsecured notes. Proceeds from the bond offering are to be used to reduce borrowings on the secured revolving credit facility. The Rating Outlook for both entities is Stable. The bond offering follows the partnership's announcement on June 9 that NGL has agreed to acquire TransMontaigne Inc., 19.7% of the outstanding LP units of TransMontaigne Partners LP, and certain associated entities for $200 million in cash. The note offering also follows the June 18 equity offering for net proceeds of $338 million. NGL plans to acquire TransMontaigne Inc., which holds the GP for TransMontaigne Partners L.P., 19.7% of outstanding LP units of TransMontaigne Partners L.P. and related entities. The transaction is expected to close in the third quarter of 2014 (3Q'14) subject to regulatory approval. The assets are being acquired from affiliates of Morgan Stanley. NGL Energy's and NGL Energy Finance both have a 'BB' Issuer Default Rating (IDR) which is supported by the partnership's strategy to operate with strong distribution coverage and diverse operations which are located throughout the U.S. Since the partnership has significant senior secured debt ahead of the senior unsecured debt, the unsecured debt is notched down to 'BB-'. Concerns include NGL's short operating history and growth through numerous acquisitions since it was formed in 2010 and IPO'd in 2011. Fitch believes that acquisitions will continue to be significant for NGL as it seeks to expand its operations and increase distributions paid to unitholders. Other concerns include NGL's modest size, and the weather-linked volatility associated with the company's retail propane business which accounted for 34% of fiscal year 2014 (FY2014) EBITDA. Following significant acquisition activity in FY2014, leverage as defined by Fitch as total debt to adjusted EBITDA was 6.4x as of FY2014 (fiscal year ends March 31), up from 4.2x at the end of FY2013. With the pending acquisition, Fitch forecasts leverage to be approximately 4.5x-5.0x at the end of FY2015 as recent past acquisitions contribute to EBITDA growth which should drive the leverage reduction. Furthermore, Fitch expects EBITDA growth to be more significant in the latter half of FY2015. Leverage expectations are viewed as appropriate by Fitch for NGL's 'BB' rating. Given NGL's aggressive acquisition strategy, maintenance of its rating will in large part depend on its willingness and ability to issue equity to help fund growth. NGL is focused on significant growth via organic projects and acquisitions. Fitch expects acquisitions to be NGL's larger focus as it enables the partnership to quickly ramp up in size and scale. The offset to this is that multiples paid for acquisitions are higher than organic growth projects. Prior to the announced acquisition, management indicated that adjusted EBITDA should be in the range of $425 million-$430 million in FY2015, up from $255 million in FY2014. In FY2015, NGL expects to see growth capex of approximately $500 million, up from $133 million in FY2014. In the current fiscal year, approximately 50% of spending is to be directed toward crude logistics, 40% water services and the remainder is for other NGL logistic projects. In FY2014, $1.3 billion of cash was spent on acquired assets. The most significant acquisition during the fiscal year was the December 2013 acquisition of the Gavilon assets which included crude oil terminals and a 50% stake in a crude oil pipeline which went into service in February 2014. NGL paid $832 million net in cash for the assets. Liquidity appears to be adequate following NGL's $338 million equity issuance in June 2014. Proceeds from the equity offering were used to repay borrowings on the bank facility. As of yearend FY2014, cash on the balance sheet was approximately $10 million, the working capital facility had approximately $275 million undrawn and the expansion facility had $253 million undrawn. In June 2014, NGL increased the size of its secured revolving credit facility to $2.193 billion from $1.721 billion. The bank agreement is comprised of two facilities: a $1,335 million working capital facility which is restricted by a borrowing base and a $858 million expansion capital facility. The facility extends until 2018. Financial covenants in the bank agreement do not allow leverage (as defined by the bank agreement) to exceed 4.25x. With permitted acquisitions, this temporarily increases to 4.5x. As of FY2014 the bank-defined leverage ratio was approximately 3.0x. Interest coverage must exceed 2.75x and it was approximately 7.0x at the end of FY2014. The bank agreement allows working capital borrowings and letters of credit to be excluded from the leverage calculation. NGL gets pro forma EBITDA credit for acquisitions, which is typical for master limited partnership (MLP) bank agreements. The borrowing base is the sum of: all cash collateral, 85% of accounts receivable, 80% of inventory (less 50% of prepaid inventory), 90% of eligible futures accounts, and 80% of letters of credit for commodities not yet received, less all first purchaser liability, less 100% of secured bank obligations attributable to overdrafts, less 120% of secured hedging obligations, and less 100% of excise tax liabilities. The borrowing base calculation is done at the end of each month. The company maintains a solid distribution coverage ratio (DCR) which it targets to be approximately 1.5x. With increased distributions, the coverage ratio was 1.1x at the end of FY2014 which is below coverage of 1.5x at the end of FY2013 and management's target. Fitch forecasts EBITDA and DCF growth in FY2015 and expects the DCR to be closer to 1.5x at the end of the current fiscal year. NGL has indicated that in FY2014, approximately 40%-45% of EBITDA was generated from fee-based assets. It targets 60% of EBITDA from fee-based assets in the next 12-18 months. NGL's assets are diverse and are comprised of retail propane (34% of FY2014 segment EBITDA), water services (24%), liquids (31%), crude logistics (8%) and other (3%). Furthermore, its assets are located throughout the U.S. Recent acquisitions include crude oil midstream assets (Gavilon) and water services. These are higher margin segments which should improve NGL's overall EBITDA margins going forward. NGL ENERGY: S&P Assigns 'BB-' Rating on $350MM Sr. Unsec. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '4' recovery rating to NGL Energy Partners L.P.'s and NGL Energy Finance Corp.'s proposed $350 million senior unsecured notes due 2019. The partnership intends to use net proceeds to repay borrowings outstanding under its revolving credit facility. As of March 31, 2014, the partnership had about $1.6 billion in debt outstanding. S&P expects the partnership will have an adjusted debt to EBITDA ratio of between 3.5x and 3.75x for fiscal 2015. Tulsa, Okla.-based NGL Energy Partners is a midstream energy partnership that specializes in crude oil logistics, water treatment and processing, natural gas liquids logistics, and retail propane. S&P's corporate credit rating on the company is 'BB-' and the outlook is stable. RATINGS LIST NGL Energy Partners L.P. Corp credit rating BB-/Stable/-- New Ratings NGL Energy Partners L.P. NGL Energy Finance Corp. $350 mil senior unsecured notes BB- Recovery rating 4 NIELSEN FINANCE: Moody's Rates $800MM Sr. Unsecured Notes 'B1' -------------------------------------------------------------- Moody's Investors Service assigned B1 to the proposed $800 million tack-on to the existing 5% senior unsecured notes due 2022 issued by Nielsen Finance LLC, an indirect subsidiary of Nielsen N.V. ("Nielsen"). Proceeds from the new notes will be used to refinance the existing 7.75% senior unsecured notes due 2018. Reduced pricing will provide estimated savings of $22 million in annual interest expense. All other ratings including the Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating as well as the positive outlook are unchanged. Assigned: Issuer: Nielsen Finance LLC NEW $800 million Senior Unsecured Notes: Assigned B1, LGD5 -- 80% To be withdrawn upon redemption or completion of the tender: Issuer: Nielsen Finance LLC EXISTING 7.75% Senior Unsecured Notes due 2018 ($802 million outstanding): B1, LGD5 -- 80% Ratings Rationale Nielsen's Ba3 Corporate Family Rating reflects Moody's view that the company will maintain its leading international positions in the measurement and analysis of consumer purchasing behavior as well as in providing media and marketing information given protection from high entry barriers. Revenue is supported by long- standing contractual relationships with consumer product companies, media and advertisers, and benefits from the company's status as a source of independent benchmark information. Moody's expect the company will build on its track record to deliver low- to-mid single digit percentage revenue and EBITDA growth. Ratings incorporate the challenging operating environment in Nielsen's `Buy' division due to cyclical spending shifts by clients as well as exposure, particularly in the `Watch' division, to a more competitive landscape in rapidly growing online markets. Risks include the potential for new technologies to change consumer buying habits and advertising/marketing delivery channels; however, Moody's believe Nielsen is positioned to respond to new media channels by broadening its product and service offerings. Moody's expects Nielsen will utilize a portion of free cash flow to reduce debt balances; however, ratings also reflect the company's moderately high leverage and likely increases in dividend payouts or share repurchases as earnings grow. Furthermore, Nielsen's recent increase in quarterly dividends (more than $370 million annual payout) and share repurchase programs will consume cash that could otherwise be used to reduce debt or fund acquisitions. Despite these distributions and the acquisition of Arbitron in September 2013, mid-single digit percentage revenue growth, modest margin expansion, and debt repayments have lowered the company's pro forma debt-to-EBITDA to approximately 4.4x at March 31, 2014 (including Moody's standard adjustments and 12 months of Arbitron, or 4.2x excluding acquisition restructuring costs) from 4.7x in the prior year. Liquidity is strong with roughly $300 million of balance sheet cash, low to mid single digit percentage free cash flow-to-debt ratios, more than $540 million of unused capacity under the revolver facility, and no significant debt maturities until 2017. The positive rating outlook reflects Moody's expectation that Nielsen will deliver operating results in line with its recent guidance (4%-6% revenue growth and 29%-30% adjusted EBITDA margins for 2014) and that shareholder distributions and acquisitions are managed such that the company remains on a deleveraging trajectory consistent with its 3.0x target for reported leverage. Moody's assumes in the rating outlook that the U.S. and global economies continue to expand modestly. An upgrade would require steady and growing earnings performance paired with de-leveraging such that debt-to-EBITDA is moving towards 4.0x and free cash flow generation is meaningful on a sustained basis. Notwithstanding management's recently revised guidance for reported leverage of 3.0x (previously 2.75x - 3.0x), Moody's would need to be comfortable that Nielsen has the willingness and capacity to manage to these credit metrics after incorporating potential acquisitions or share repurchases. Nielsen would also need to maintain at least good liquidity. Ratings could be downgraded if debt-to-EBITDA were to exceed 5.0x (including Moody's standard adjustments) or if free cash flow generation weakens through deterioration in operating performance, acquisitions, or shareholder distributions. The outlook could be changed to stable if Nielsen adopts more aggressive financial policies including a move away from its intention to continue to reduce leverage. Deterioration in liquidity could also create downward rating pressure. The principal methodology used in this rating was the Global Business & Consumer Services 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. Nielsen N.V., headquartered in Diemen, the Netherlands and New York, NY, is a global provider of consumer information and measurement that operates in approximately 100 countries. Nielsen's Buy segment (roughly 60% of FY 2013 reported revenue) consists of two operating units: (i) Information, which includes retail measurement and consumer panel measurement services; and (ii) Insights, which provides consumer intelligence and analytical services for clients. The Watch segment (40% of reported revenue) provides viewership and listenership data and analytics across television, radio, online and mobile devices for the media and advertising industries. A consortium of private equity firms owns just under 20% of economic interest and voting control in Nielsen with remaining shares being widely-held. Reported revenue for the 12 months ended March 2014 was $5.9 billion. NORTHERN DENTAL: Bobcaygeon Dental Biz to Be Sold July 24 --------------------------------------------------------- A. Farber & Partnrs Inc., the court-appointed receiver of Rene Emil Boljkovac, 1735509 Ontario Limited, and Northern Dental Centres Inc., is offering for sale the building and assets of Bobcaygeon Family Dentistry. Bobcaygeon Family Dentistry is located at 100 East Street South, Bobcaygeon, Ontario. The assets being offered for sale include the dental practice and the building, with good paying tenants. The deadline for submission of offers will be 5:00 p.m. EST on July 24, 2014. Please contact Peter Crawley at (406) 496-3507 or by email at pcrawley@farberfinancial.com for more information. Information is also available online at http://www.farberfinancial.com/ OHCMC-OSWEGO: Vacant Illinois Land Heading for September Auction ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that more than 250 acres of undeveloped land in Oswego, Illinois, owned by an affiliate of Oliver-Hoffman Corp. will be sold at auction in September to fund OHCMC-Oswego LLC's Chapter 11 plan that comes up for approval at an Aug. 6 confirmation hearing. According to the report, the bankruptcy court in Chicago has tentatively approved disclosure materials explaining the liquidating Chapter 11 plan. Under proposed sale procedures, bids on the properties are due Sept. 12 in advance of an auction on Sept. 16. There's already an offer for about $11.8 million, the report said, citing the company. About OHCMC-Oswego OHCMC-Oswego, LLC, is an Illinois limited liability company that was formed on July 12, 2005 to, inter alia, acquire, develop and sell a series of real estate developments. It is wholly owned by Oliver-Hoffman Corporation. Its principal place of business is located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois. OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to sell its assets. Camille O. Hoffmann signed the petition as president of managing and sole member. The Debtor disclosed $92,268 plus an unknown amount in assets and $56,782,127 in liabilities. The Hon. Carol A. Doyle presides over the case. The Debtor is represented by David C. Gustman,, Esq., at Freeborn & Peters LLP. No trustee, examiner or creditors' committee has been appointed in the case. OPTIM ENERGY: Floats $60M Stalking Horse Bid For Coal Plant ----------------------------------------------------------- Law360 reported that power plant operator Optim Energy LLC, owned by Bill Gates' Cascade Investment LLC, asked a Delaware bankruptcy judge to approve an August auction for its coal-fired plant after lining up a $60 million stalking horse bid from Major Oak Power LLC, an affiliate of Blackstone Group LP. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, competing bids would be due July 23, followed by an auction on Aug. 4 and a hearing to approve sale on Aug. 5. Optim said there was great interest in the Twin Oaks plant with eight potential buyers invited to make second-round offers before Blackstone's Major Oak Power LLC was tapped to be the so-called stalking horse and make the first bid at auction, the Bloomberg report related. About Optim Energy Optim Energy, LLC, and its affiliates are power plant owners principally engaged in the production of energy in Texas's deregulated energy market. Optim owns and operates three power plants in eastern Texas: the Twin Oaks plant in Robertson County, Texas, the Altura Cogen plant in Harris County, Texas and the Cedar Bayou plant in Chambers County, Texas. The Altura and Cear Bayou plants are fueled by natural gas, and the third is coal- fired. Optim Energy and its affiliates sought Chapter 11 protection from creditors (Bankr. D. Del. Lead Case No. 14-10262) on Feb. 12, 2014. The Debtors have tapped Bracewell & Giuliani LLP and Morris, Nichols, Arsht & Tunnell LLP as attorneys; Protiviti Inc. as restructuring advisors; and Prime Clerk LLC as claims agent. Optim Energy, LLC scheduled $6,948,418 in assets and $716,561,450 in liabilities. Optim Energy Cedar Bayou 4, LLC, disclosed $183,694,097 in assets and $717,646,180 in liabilities as of the Chapter 11 filing. The Debtors have $713 million of outstanding principal indebtedness. On Feb. 27, 2014, Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the Bankruptcy Court that she was unable to appoint an official committee of unsecured creditors in the Debtors' cases. The U.S. Trustee explained that there were insufficient responses to her communication/contact for service on the committee. PARADISE HOSPITALITY: Judge Smith Dismisses Chapter 11 Case ----------------------------------------------------------- The Hon. Erithe Smith of the U.S. Bankruptcy Court for the Central District of California dismissed the Chapter 11 bankruptcy case of Paradise Hospitality Inc. As reported in the Troubled Company Reporter on May 15, 2014, due to unanticipated circumstances, the Debtor said it was unable to operate its hotel at even break-even under the best Western brand and reservation system, defaulted on its plan payment, and no longer has control over its hotel as a receiver was appointed at the request of RREF WB Acquisitions, LLC. Therefore, the Debtor has no prospect of resuming payments under the confirmed chapter 11 plan. About Paradise Hospitality Based in Fullerton, California, Paradise Hospitality, Inc., owns a hotel located in Toledo, Ohio and a retail shopping center in El Dorado, Arkansas. The Debtor manages and operates the Hotel. Haydn Cutler company currently manages the Retail Center. The Company filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 11-24847) on Oct. 26, 2011, about three weeks after it lost the right to use the Crowne Plaza for its hotel. For now, the hotel has been renamed Plaza Hotel Downtown Toledo. Judge Erithe A. Smith presides over the case. Giovanni Orantes, Esq., at Orantes Law Firm, P.C., in Los Angeles, represents the Debtor as counsel. The Debtor disclosed $15,628,687 in assets and $21,430,333 in liabilities as of the Chapter 11 filing. The Petition was signed by the Debtor's president, Dae In Kim, a Korean businessman who lives in southern California. PUERTO RICO: Governor Aims to Revamp Debt of Public Corporations ---------------------------------------------------------------- Michael Corkery, writing for The New York Times' DealBook, reported that Puerto Rico?s governor, signaling worsening financial trouble for the island, proposed a legal means to revamp the debt of some its largest public corporations, which provide vital services like electricity. According to the report, the new law is meant to quell concerns that Puerto Rico?s inability to file for federal bankruptcy protection would set off a chaotic scramble among creditors in the case of a default. The proposal made by Gov. Alejandro Garcia Padilla raises the specter that one of Puerto Rico?s agencies could falter soon, the DealBook said, citing investors. The bill comes as one of the island?s most indebted public corporations -- Puerto Rico Electric Power Authority -- faces increasingly tense talks with its lenders, the DealBook related, citing people briefed on the matter. Failure to renew credit lines from its banks could hinder the authority?s ability to buy oil to generate electricity for the island?s 3.6 million people, these people said, the report further related. The authority also has a bank loan that it is hoping to extend in August, one of the people said, the report added. ROSE ROCK: S&P Assigns 'B+' CCR & Rates $350MM Sr. Notes 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B+' corporate credit rating to Rose Rock Midstream Partners L.P. At the same time, S&P assigned a 'B' issue-level rating and a '5' recovery rating to the $350 million senior unsecured notes due 2022. S&P expects the partnership to use net note proceeds to reduce borrowings under its senior secured revolving credit facility. The '5' recovery rating indicates that lenders can expect modest (10% to 30%) recovery of principal if a payment default occurs. At the same time, S&P assigned a 'BB' issue-level rating to the partnership's senior secured revolving credit facility. S&P is also assigning a '1' recovery to the credit facility. The outlook is stable. S&P's ratings on Rose Rock reflect its assessment of its "weak" business risk profile and "significant" financial risk profile. The "weak" business risk profile reflects the partnership's high percentage (about 80%) of fee-based cash flows and crude oil focus, offset by its limited scale and geographic scope. S&P's assessment of the "significant" financial risk profile reflects its view of adequate liquidity, our expectation of financial leverage between 3.5x and 3.75x for 2014, and the credit constraints inherent to the master limited partnership (MLP) structure. S&P rates Rose Rock on a stand-alone basis. S&P views the partnership's focus on the crude oil business in the Midcontinent region as positive for credit given its expectations of the significant crude infrastructure build-out in those areas over the next few years. However, the partnership's concentrated geographic position makes it challenging, in S&P's view, to compete against peers for growth opportunities. The stable outlook reflects S&P's view that the partnership will maintain adequate liquidity while significantly growing its crude transportation business, resulting in adjusted debt-to-EBITDA in the mid 3x area. S&P anticipates parent company SemGroup will continue to drop down additional assets into the master limited partnership over the next six to 12 months. S&P could consider higher ratings if the partnership's business risk profile improves due to increased scale and diversity resulting from future drop-downs or acquisitions while maintaining credit measures at current levels. S&P could lower the ratings if liquidity becomes constrained or if adjusted debt-to-EBITDA exceeds 4.5x on a sustained basis due to underperformance in one of the partnership's business segments or if it makes a significantly levered acquisition. RITE AID: Eight Directors Elected at Annual Meeting --------------------------------------------------- Rite Aid held its 2014 annual meeting of stockholders on June 19 at which the stockholders: (a) elected Joseph B. Anderson, Jr., Bruce G. Bodaken, David R. Jessick, Kevin E. Lofton, Myrtle S. Potter, Michael N. Regan, John T. Standley and Marcy Syms to the Board of Directors; (b) ratified the appointment of Deloitte & Touche LLP as Rite Aid's independent registered public accounting firm; (c) approved, on an advisory basis, the compensation of Rite Aid's named executive officers; (d) approved the adoption of the 2014 Plan; and (e) did not approve a stockholder proposal relating to an independent chairman. On June 19, 2014, the stockholders of Rite Aid approved the adoption of the Rite Aid Corporation 2014 Omnibus Equity Plan, which was previously approved by Rite Aid's Compensation Committee and Board of Directors. The 2014 Plan provides for the issuance of a maximum of 58,000,000 shares of Rite Aid Common Stock plus any shares of Common Stock remaining available for grant under the Rite Aid Corporation 2010 Omnibus Equity Plan and the Rite Aid Corporation 2012 Omnibus Equity Plan as of the effective date of the 2014 Plan in connection with the grant of ISOs, nonqualified options, which are options that do not qualify as ISOs, stock appreciation rights, restricted stock, phantom units, stock bonus awards, and other equity-based awards valued in whole or in part by reference to, or otherwise based on, Rite Aid's Common Stock. A full-text copy of the 2014 Omnibus Equity Plan is available for free at http://is.gd/yIG6sS About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is one of the nation's leading drugstore chains with 4,626 stores in 31 states and the District of Columbia. Rite Aid disclosed net income of $118.10 million on $25.39 billion of revenue for the year ended March 2, 2013, as compared with a net loss of $368.57 million on $26.12 billion of revenue for the year ended March 2, 2012. * * * As reported by the TCR on March 1, 2013, Moody's Investors Service upgraded Rite Aid Corporation's Corporate Family Rating to B3 from Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At the same time, the Speculative Grade Liquidity rating was revised to SGL-2 from SGL-3. This rating action concludes the review for upgrade initiated on Feb. 4, 2013. As reported by the TCR on Oct. 2, 2013, Standard & Poor's Ratings Services said it raised its ratings on Rite Aid Corp., including the corporate credit rating, which S&P raised to 'B' from 'B-'. In the April 21, 2014, edition of the TCR, Fitch Ratings has upgraded its ratings on Rite Aid Corporation (Rite Aid), including its Issuer Default Rating (IDR) to 'B' from 'B-'. The upgrades reflect the material improvement in the company's operating performance, credit metrics and liquidity profile over the past 24 months. RR DONNELLEY: Moody's Affirms 'Ba2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed RR Donnelley & Sons Company's (RRD) Ba2 corporate family rating (CFR), Ba2-PD probability of default rating (PDR), Baa2 senior secured credit facility rating, Ba3 senior unsecured notes rating and SGL-2 speculative grade liquidity rating (indicating good liquidity). The ratings outlook remains negative. Moody's affirmed its Ba2 ratings because RR Donnelley has the ability to de-lever to about 2.8x (Moody's adjusted) by late 2016 from 4.0x (Moody's adjusted and estimated as of June 30, 2014, pro forma for the January acquisition of Consolidated Graphics and an April 2014 debt repayment). Given the protracted time before the company reaches an appropriate leverage profile for its rating, and since unexpected operational set-backs, adverse changes in supply-demand balance or debt-financed acquisition activity may intervene, the outlook remains negative. The following summarizes the rating actions and RR Donnelley's ratings: Issuer: R.R. Donnelley & Sons Company Ratings Actions: Corporate Family Rating, affirmed at Ba2 Probability of Default Rating, affirmed at Ba2-PD Speculative Grade Liquidity Rating, affirmed at SGL-2 Senior Secured Credit Facility, affirmed at Baa2 with LGD Assessment revised to (LGD1, 7%) from (LGD1, 6%) Senior Unsecured Regular Bond/Debenture, affirmed at Ba3 with LGD Assessment revised to (LGD4, 66%) from (LGD4, 65%) Senior Unsecured Shelf, affirmed at (P)Ba3 Outlook Actions: Outlook, maintained as Negative SANDISK CORP: S&P Raises CCR to 'BB+'; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on Milpitas, Calif.-based SanDisk Corp. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised the issue rating on SanDisk's senior unsecured debt to 'BB+' from 'BB'. The recovery rating remains '3', indicating S&P's expectation of meaningful (50% to 70%) recovery in a payment default. "Our upgrade of SanDisk reflects the company's improved business execution and favorable industry demand, resulting in leverage reduction to about 1x from 2x and an improved financial risk profile, which we regard as 'modest,' a revision from our previous assessment of 'intermediate'" said Standard & Poor's credit analyst John Moore. S&P expects that SanDisk's leverage will remain under 1.5x over the coming year, as the memory sector enjoys favorable market conditions, but could spike above 2x depending on market supply and demand volatility. S&P's "weak" business risk profile on SanDisk reflects its narrow scope of business in the highly volatile semiconductor flash memory markets, and the substantial investment required to maintain technology and cost leadership. SanDisk is a leading producer of NAND flash memory-based storage solutions whose products are broadly used in consumer electronics products including mobile phones, digital cameras, and game systems. The company procures most of its flash memory through fabrication facilities owned in joint-venture (JV) partnerships with Toshiba. We expect the company will continue to achieve above average profitability over the coming year, with EBITDA margins continuing to amount to over 30% of revenues. The stable outlook reflects S&P's expectations for good liquidity, stable operating margins, and sustained leverage position for the intermediate term, which will offset considerable business risk. S&P could lower the rating if a sharp cyclical downswing causes revenue or earnings to decline, which in turn brings the leverage above 1.5x level on a sustained basis. Although an upgrade is unlikely in the next 12 months, S&P could raise the rating if the company improved its business risk profile by means of continued execution in new technologies (including 3D NAND), increased revenue diversity (including enterprise SSD), and maintained its moderate financial policy with debt to EBITDA sustained at or below 1.5x. SEQUENOM INC: Camber Capital Holds 5.4% Equity Stake ---------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Camber Capital Management LLC and Stephen DuBois disclosed that as of June 13, 2014, they beneficially owned 6,300,000 shares of common stock of Sequenom, Inc., representing 5.41 percent of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/3szweN 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. SOURCE INTERLINK: Proposes KCC as Claims Agent, Admin. Advisor -------------------------------------------------------------- Source Home Entertainment, LLC, et al., filed applications to employ Kurtzman Carson Consultants LLC as claims and noticing agent, and as administrative advisor. The Debtors anticipate that more than a thousand entities will be noticed during the course of the Chapter 11 cases. In view of the number of anticipated claimants and the complexity of the Debtors' businesses, the Debtors submit that KCC's appointment as the claims and noticing agent is both necessary and in the best interests of the Debtors' estates and their creditors because the Debtors and the Clerk will be relieved of the burdens associated with the claims and noticing services. The Debtors filed a separate application to hire KCC as administrative advisor. The bankruptcy administrative services will include, among other things, the solicitation, balloting and tabulation of votes on a Chapter 11 plan. Prior to the Petition Date, the Debtors provided KCC with a retainer in the amount of $25,000. According to the services agreement, KCC will charge at these rates for these consulting services: Discounted Position Hourly Rate -------- ----------- Executive Vice President Waived Director/Senior Managing Consultant $175 Consultant/Senior Consultant $70 to $160 Technology/Programming Consultant $50 to $100 Project Specialist $50 to $95 Clerical $30 to $50 Weekend, holidays and overtime Waived For its noticing services, KCC will waive fees for electronic noticing, and $0.08 per page for facsimile noticing. For claims administration and management, KCC will charge $0.10 per creditor per month for license fee and data storage. For online claims filing (ePOC) services, the firm will waive the fees. James Le, the COO at KCC, attests that KCC is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Ave. El Segundo, CA 90245 Attn: Drake D. Foster Tel: (310) 823-9000 Fax: (310) 823-9133 E-mail: dfoster@kccllc.com About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. The Debtors are seeking joint administration of their Chapter 11 cases. SOURCE INTERLINK: To Pay $280,000 for Critical Vendor Claims ------------------------------------------------------------ Source Home Entertainment, LLC, et al., seek approval from the bankruptcy court to pay prepetition claims held by critical vendors in an amount not to exceed $155,000 on an interim basis and $280,000 on a final basis. Although the Debtors are in the process of winding down their wholesale distribution businesses, the Debtors continue to actively operate and market for sale their front-end retail display manufacturing business. The Debtors' custom display manufacturing business is predicated on their ability to obtain the specialty chemicals, gas, metals, plastics, and other raw materials necessary to tailor the front- end displays to their customers' exact specifications. The Debtors obtain such materials and services from a limited number of small or independent manufacturers on an order-by-order basis. In return for paying critical vendor claims, the Debtors will use commercially reasonable efforts to require the applicable critical vendor to provide favorable trade terms in line with historical practice for the postpetition delivery of goods and services or otherwise continue supplying the Debtors with essential goods and services for the duration of the chapter 11 cases. About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. The Debtors are seeking joint administration of their Chapter 11 cases. SOURCE INTERLINK: Wants Schedules Deadline Moved to Aug. 22 ----------------------------------------------------------- Source Home Entertainment, LLC, et al., ask the bankruptcy court to extend the deadline to file their schedules of assets and liabilities and statements of financial affairs by an additional 30 days through and including Aug. 22, 2014, without prejudice to their right to request a further extension. Prior to the filing of the Chapter 11 cases, the Debtors focused on winding down their distribution business, responding to numerous creditor and vendor questions in connection therewith, preparing for the chapter 11 filing, preparing the business to transition into chapter 11, and negotiating with its significant creditor constituencies. Such efforts made it difficult for the Debtors to prepare the schedules and statements. About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. The Debtors are seeking joint administration of their Chapter 11 cases. SOURCE INTERLINK: Proposes to Use Cash Collateral ------------------------------------------------- Source Home Entertainment, LLC, et al., seek approval from the bankruptcy court to use cash collateral of their term loan lenders. Recognizing the need to access cash, in advance of this chapter 11 filing, the Debtors successfully engaged in good faith, arms- length negotiations with their term loan lenders regarding the consensual use of cash collateral during the first 30 days of the chapter 11 cases. The Debtors owe $51.9 million under their term loan facility with Cortland Capital Market Services, LLC, as administrative and collateral agent. Obligations arising under the term loan facility are secured by substantially all of the Debtors' assets. Although they are in the process of winding down their wholesale distribution businesses, the Debtors continue to actively operate and market for sale their front-end retail display manufacturing business. To that end, the debtors need cash collateral to both (a) continue their orderly wind down process and pay their employees in connection therewith, as well as (b) procure goods and services from vendors, pay their employees, and satisfy other working capital needs in the ordinary course of their remaining manufacturing business. The proposed interim cash collateral order provides adequate protection in the form of superpriority claims and replacement liens to protect against any diminution in value arising from the Debtors' use of cash collateral or the imposition of the automatic stay pursuant to Section 362 of the Bankruptcy Code. About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. The Debtors are seeking joint administration of their Chapter 11 cases. SOURCE INTERLINK: Time Inc. Severed Ties Pre-Bankruptcy ------------------------------------------------------- Caysey Welton, writing for FolioMag.com, reported that Source Interlink Distribution was dealt a punishing blow on May 28 when Time Inc. severed its distribution ties. The final straw for Time Inc. was $7 million in uncollectible receivables that the company had to record as bad debt in its second quarter of 2014, this just days before the company was spinning off on its own. The next day Source Interlink Distribution shut down, and as a result more than 5,000 layoffs occurred around the country. However, the court filing shows, its debt to Time Inc. only scratches the surface, as other massive debts weighed heavy on its parent company. The report also said the absence of Source Interlink Distribution could create uncertain impacts for consumer magazines. In the 1990s there were over 400 wholesale distributors around the country, now it's down to two -- Hudson News and TNG. With Source Interlink Distribution out, there is a newsstand hole of 32,500 (30 percent of the market share) retail locations. Both remaining wholesalers are reportedly looking to fill that demand, but some reports speculate there could be a shortage on some newsstand titles until the problem is resolved. The report also noted that a class action lawsuit has been filed against the parent company. The suit alleges that the company failed to pay the plaintiffs wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation for 60 working days following termination -- a violation of the WARN Act. Source Home Entertainment also made bad on some local municipal arrangements, the report said. The company was promised $1 million in tax incentives in exchange for a job creation program, where it's headquartered in Bonita Springs FL. Also, the Lee Country Florida government is looking to get back $250,000 in incentives it gave the company to expand. About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. The Debtors are seeking joint administration of their Chapter 11 cases. TEMPLAR ENERGY: S&P Retains 'B-' Loan Rating After $200MM Add-On ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B-' issue-level rating and '5' recovery rating on Oklahoma City-based exploration and production company Templar Energy LLC's second-lien term loan are unchanged following the company's announcement that it will increase the term loan by an incremental $200 million. This assumes that the borrowing base on its reserve-based credit facility will remain unchanged at $375 million. The '5' recovery rating indicates S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The company will use the new proceeds to purchase a bolt-on acquisition and pay down amounts outstanding under the reserve- based credit facility. Ratings List Templar Energy LLC Corporate credit rating B/Stable/-- Ratings Unchanged Templar Energy LLC Second-lien term loan B- Recovery rating 5 TEXAS INDUSTRIES: Moody's Says Ba1 CFR Still for Possible Upgrade ----------------------------------------------------------------- Moody's Investors Service stated that Texas Industries, Inc.'s ("TXI") ratings remain under review for possible upgrade following the confirmation of Martin Marietta Materials, Inc.'s ("Martin Marietta") Corporate Family Rating at Ba1 and Martin Marietta's announcement that it will redeem all of TXI's $650 million in outstanding notes with proceeds from its proposed bond issuance. Upon the consummation of the Martin Marietta and TXI merger, the TXI notes will be upgraded to Ba1 with a stable outlook, consistent with Martin Marietta's ratings. Moody's will withdraw the TXI rating following the repayment of the TXI notes. TXI manufactures cement, aggregates and ready-mixed concrete primarily in Texas (80% of total revenues) and California (20%). The company's products are used in public works, commercial, industrial, institutional and residential construction sectors, and energy markets. In the LTM period ending February 28, 2014, TXI generated approximately $863 million in revenues. THOMPSON CREEK: Announces Pricing Terms of Exchange Offer --------------------------------------------------------- Thompson Creek Metals Company Inc. announced the pricing for its offer to exchange any and all of its 6.50% Tangible Equity Units for shares of its common stock. Thompson Creek is offering to exchange 5.8458 shares of Common Stock for each validly tendered and accepted TMEDS unit pursuant to the Exchange Offer. The number of shares of Common Stock to be exchanged for each unit of TMEDS was fixed after 5:00 p.m., New York City time, on June 20, 2014, on the basis of the pricing formula set forth in the Offer to Exchange. The Exchange Ratio is equal to the sum of (i) 5.3879 shares of Common Stock plus (ii) a number of shares of Common Stock equal to $1.25 divided by $2.73, which is the five day arithmetic daily volume-weighted average price of the Common Stock over the trading period beginning on June 16, 2014, and ending on the Pricing Date. Fractional shares will not be issued in the Exchange Offer and holders will receive the cash value of any fractional shares due to them, which cash value will be the product of the fractional shares to be received and $2.73. The settlement date for the Exchange Offer is expected to be June 25, 2014. In addition to the Exchange Ratio, holders who participate in the exchange offer will receive the accrued portion of the $0.406250 quarterly cash installment payment that has accrued from May 15, 2014, to the settlement date of the Exchange Offer and that is payable in respect of the amortizing note component of each TMEDS unit. Such cash installment payment reflects both accrued interest and the partial repayment of principal in respect of the amortizing notes component of each TMEDS unit. The Exchange Offer will expire at 11:59 p.m., New York City time, on June 24, 2014, unless extended or earlier terminated by the Company. Holders may withdraw units of TMEDS that they tender at any time before the Exchange Offer expires. In addition, holders may withdraw tendered units of TMEDS if the Company has not accepted them for payment within 40 business days from the commencement of the Exchange Offer. The tender and withdrawal of shares of TMEDS pursuant to the Exchange Offer held in "street" name are subject to compliance with the appropriate procedures of the automated tender offer program, or ATOP, of The Depository Trust Company. About Thompson Creek Metals Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in central British Columbia, which is expected to commence production in 2013. The Company's development projects include the Berg copper-molybdenum-silver property and the Davidson molybdenum property, both located in central British Columbia. Its principal executive office is in Denver, Colorado and its Canadian administrative office is in Vancouver, British Columbia. More information is available at http://www.thompsoncreekmetals.com * * * As reported by the TCR on Aug. 14, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Denver- based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from 'B-'. "These rating actions follow Thompson Creek's announcement of weaker production and higher cost expectations through next year," said Standard & Poor's credit analyst Donald Marleau. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. UNIVERSAL HEALTH: Fitch Hikes IDR to BB+, Alters Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has upgraded the ratings of Universal Health Services, Inc. (NYSE: UHS) as follows: -- Issuer Default Rating (IDR) to 'BB+' from 'BB'; -- Senior secured bank facility rating to 'BBB-' from 'BB+'; -- Senior secured notes rating to 'BBB-' from 'BB+'; -- Senior unsecured notes rating to 'BB' from 'BB-'. The Rating Outlook has been revised to Stable from Positive. The ratings apply to approximately $3.2 billion of debt outstanding at March 31, 2014. KEY RATING DRIVERS -- UHS has continued to demonstrate a commitment to debt repayment, resulting in debt-to-EBITDA of 2.3x at March 31, 2014 compared to 4.9x (reported) at Dec. 31, 2010. Fitch expects UHS to operate with debt leverage between 2.25x and 3x over the ratings horizon. -- Unlike many of its peers, UHS has not engaged in large-scale acquisitions since its $3.1 billion purchase of PSI in 2010. Fitch expects UHS to pursue moderate-sized, targeted acquisitions over the ratings horizon. The 'BB+' ratings provide ample flexibility for UHS to incur additional debt to participate in the ongoing consolidation of the U.S. healthcare provider space. -- Cash flows are strengthening on a stabilizing acute care business, better margins due to lower uncompensated care, and growing behavioral health operations. Fitch anticipates that UHS will generate solid free cash flow (FCF) of $550 million-$700 million in 2014-2015, compared to $477 million for the latest 12 month (LTM) period ended March 31, 2014. -- UHS behavioral health business accounts for more than half of UHS overall revenues, providing business and revenue diversification as well as improved financial stability and profitability. Good organic growth in the mid-single digits, driven by mental health parity rules and UHS' capacity growth initiatives, and moderate margin improvement are expected over the ratings horizon. -- UHS' same-hospital admissions were flat in 2013, better than the 2% and 2.2% declines in 2012 and 2011, respectively, and stronger than many of its for-profit peers. Fitch expects moderately negative to possibly flat acute care inpatient admissions growth to be indicative of stable markets for the foreseeable future. Pricing metrics continue to remain stable as lingering unfavorable payor mix has been offset by relatively strong commercial reimbursement rate increases. -- Fitch views the Affordable Care Act (ACA) as a net positive for UHS and its hospital operator peers. Net revenue growth from declining uncompensated care, on a fairly constant cost base, will drive an increase in absolute profits during 2014-2015. Fitch thinks it is likely, however, that profit gains will begin to erode in later years due to an overall constrained healthcare reimbursement environment. RATING SENSITIVITIES Maintenance of a 'BB+' IDR will require a continued demonstrated commitment to operating with debt leverage below 3x, with FCF-to- adjusted debt of 8% or higher. Fitch notes that UHS' has good flexibility at the current 'BB+' ratings to consummate debt-funded M&A, especially as it supports longer-term growth in light of prevailing trends in healthcare (i.e. integrated care delivery, physician employment, outpatient service line expansion, etc.). A downgrade of UHS' IDR to 'BB' could result from pressured margins and cash flows - or a large, leveraging transaction - that results in debt leverage expected to be sustained above 3x and/or FCF-to-gross adjusted debt below 8%. Margin and cash flow pressures of this magnitude are not likely occur abruptly, but could materialize due to severe pricing pressures or unfavorable large-scale reform of Medicare and/or Medicaid programs. Fitch thinks the availability of single M&A transactions that could drive a downgrade is limited. An upgrade of UHS' IDR to 'BBB-' is unlikely in the near-to- intermediate term, as Fitch views the risks around reimbursement and other regulatory factors associated with healthcare providers in the U.S. - and UHS' reliance on government payers - as material going forward. Furthermore, UHS' current ratings and credit metrics provide the firm with flexibility to participate in the consolidation of the healthcare provider space, which Fitch expects to continue through the intermediate term. DILIGENT DEBT REPAYMENT, MEASURED M&A STRATEGY CONTRASTS WITH PEERS Most large acute care hospital operators have been active acquirers and aggressive in recruiting physicians and expanding outpatient service line offerings over the last few years. UHS has instead directed the majority of its FCF toward debt repayment. Debt-to-EBITDA has declined to 2.3x at March 31, 2014 from nearly 5x (reported) at year-end 2010. Each of UHS' acquisitions over the past four years has been of behavioral health targets, including the $500 million acquisition of Ascend Health Corporation in October 2012. Going forward, most targets are likely to be small, with purchase prices of less than $100 million. Fitch does not expect UHS to engage another transformational deal - like the 2010 PSI acquisition - over the ratings horizon, partly because deals of that nature are largely unavailable. STRENGTHENING CASH FLOWS, CAPITAL DEPLOYMENT STRATEGY SOMEWHAT UNCERTAIN Fitch forecasts FCF of more than $550 million in 2014, compared to $456 million in 2013, primarily due to higher net revenues from lower bad debts on a fairly constant cost base. Fitch does not expect UHS to direct cash flows toward material accelerated debt repayment going forward, as the firm has achieved its de- leveraging target following the 2010 PSI acquisition. Furthermore, management has commented recently that UHS' current leverage is at the low end of its preferred range. UHS could become more aggressive in pursuing acquisition targets, particularly in the acute care space, as Fitch expects the pipeline of mid-sized single hospitals and smaller urban hospital networks coming up for sale will remain robust for at least the next few years. Furthermore, management has commented recently that purchase multiples seem to be moderating for possible targets. A resumption of share repurchases, which UHS has nearly eliminated from its capital deployment strategy over the last four years, is also possible. ACA TO DRIVE BETTER PROFITABILITY UHS is among the best-positioned for-profit hospital operators to benefit from lower bad debts in 2014 due to its presence in states expanding their Medicaid programs, including Nevada and California. Fitch thinks the coverage expansion provisions of the ACA could drive EBITDA margin expansion in UHS' acute care business by 150 bps or more from 2013 to 2015. Importantly, margin gains achieved in 2014-2015 are expected to slowly erode in the years that follow, due to an overall constrained reimbursement environment and the expectation for inpatient volumes to be flat or slightly down for the foreseeable future. PERSISTENT ACUTE CARE VOLUME PRESSURES TO CONTINUE Fitch thinks secular shifts in the setting of care delivery - toward lower-cost, often outpatient settings - and evolving components of especially government reimbursement (i.e. readmissions penalties and patient criteria) are increasingly to blame for weak same store admissions figures among acute care hospitals nationwide. Persistently weak economic growth and high unemployment in many markets are also pressuring both volumes and profitability, albeit now in a less pronounced manner. Fitch continues to believe that mid-2013 was an inflection point at which admissions in UHS' core markets began to show signs of stabilization, though admission figures were fairly weak in 4Q'13 and 1Q'14. The ACA is not expected to meaningfully add to inpatient volumes in the near term, and overarching trends related to healthcare reform are likely to continue gradually shifting volumes to outpatient settings. As a result, moderately negative to possibly flat inpatient volumes are expected to be indicative of stable markets for UHS and its peers for the foreseeable future. Commercial pricing remains strong and has largely offset the effects of Medicare sequestration and weak volumes. UHS has reported annual commercial rate increases of 6%-7%. It is possible that commercial insurers may apply more reimbursement pressure to acute care operators given the reduction in bad debts expected to result from the implementation of the ACA in 2014- 2015. Government reimbursement will continue to be constrained as public payers continue to seek to moderate healthcare spending. Fitch expects good behavioral volume growth over the ratings horizon in light of mental health parity rules, a possible bottoming of length of stay pressures, and UHS' capacity expansion initiatives. Notably, expanded Medicaid programs are not likely to bolster behavioral health volumes due to the Medicaid Institutes for Mental Diseases (IMD) exclusion. The elimination of this exclusion could drive greater growth opportunities vis-a- vis the ACA for UHS' behavioral health business over the intermediate term. MOST DEBT MATURES IN 2016, LIQUIDITY IS AMPLE Available liquidity is sufficient. Though UHS does not usually carry large amounts of cash ($16 million at March 31, 2014), it maintains an $800 million revolver, of which $743 million was available at March 31, 2014. UHS also maintains a $275 million A/R facility, of which $115 million was available at March 31, 2014. Debt maturities are manageable for the firm, though the bulk of the outstanding term loans are due in August 2016 (2016 maturities represent 86% of total debt.) Fitch expects UHS will have adequate access to capital as it seeks to refinance its credit facilities in advance of this date. Debt maturities are estimated as follows: remainder of 2014: $56 million; 2015: $123 million; 2016: $2.77 billion; 2018: $250 million. NOTCHING SCHEME The secured debt rating remains one notch above the IDR, illustrating Fitch's expectation for superior recovery prospects in the event of default. Furthermore, Fitch believes UHS has good financial flexibility at the 'BB+' IDR, supporting the one notch differential. The unsecured notes are rated one notch below the IDR to reflect the substantial amount of secured debt to which they are subordinated. More than 90% of UHS' outstanding debt at March 31, 2014 was secured, reducing the potential recoveries for unsecured creditors. VERISK ANALYTICS: Moody's Withdraws B1 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service upgraded Verisk Analytics, Inc.'s senior unsecured rating to Baa3, from Ba1. Moody's also withdrew the Ba1 CFR, Ba1-PD Probability of Default Rating (PDR), and SGL-1 Speculative Grade Liquidity Ratings. The rating outlook is stable. Upgrades: Senior Unsecured Regular Bond/Debentures maturing 2019, 2021, and 2022: Upgraded to Baa3 from Ba1 Outlook Actions: Outlook, Remains Stable Withdrawals: Probability of Default Rating, Withdrawn , previously rated Ba1-PD Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 Corporate Family Rating, Withdrawn, previously rated Ba1 Ratings Rationale The upgrade reflects Moody's expectation that Verisk will continue to generate the consistent, strong, 45+% EBITDA-margin profitability that the company enjoys as a result of its unique position as a leading provider of actuarial and underwriting data for the U.S. Property & Casualty industry. Its competitive position is strengthened by broad and deep databases on insurance premiums and claims amassed over four decades of operations that now serve all of the top one hundred P&C insurance providers. While Verisk's $1.8 billion revenue base is still small relative to medians for corporate investment-grade issuers, the company, which Moody's expects will generate annual free cash flow of more than $400 million over the next two years, punches above its weight in terms of profitability and its capacity to delever. Moody's believes high-single- to low-double-digit top line growth will continue to be realized through a combination of steady organic growth and prudent, medium-sized acquisitions that complement the company's risk-analytics capabilities. While acquisitions may cause leverage to spike temporarily, Verisk's cash generating capability should enable the company to delever and readily meet its publicly stated debt-to-EBITDA leverage target of 2.0 times. Though Verisk has undertaken significant share repurchases and acquisitions, these activities have been completed in the context of moderate financial policies. During the past four years, the cumulative, $2.4 billion of cash spent on acquisitions and share repurchases has exceeded free cash flow by nearly $1.0 billion. During the period debt has, consequently, risen. However, the ongoing increases in absolute levels of EBITDA have kept leverage slightly above or below 2.0 times for many years. The company does not typically maintain large cash balances, but relies instead on a large, $975 million revolver, and a subscription-based revenue model in which clients prepay the company (causing working capital to run negative) to support its solid liquidity. The stable rating outlook reflects Moody's expectation that Verisk will grow revenue and EBITDA at a pace considerably faster than Moody's base-case scenario of low single-digit GDP growth in the U.S. Moody's believe Verisk will, as a result, continue to generate healthy free cash flows from its recurring subscription fees and increasingly diversified solutions offerings. Moody's also base Moody's stable outlook on the expectation of balanced financial policies with respect to financial leverage and share purchases, given recent acquisitions and the potential for other, smaller ones over the intermediate term. While an upgrade is unlikely in the near term, Moody's would consider one if Verisk continues to build scale and product diversity, demonstrates continued strong organic revenue and EBITDA growth, and maintains conservative financial policies, including keeping leverage below 2.0 times. Verisk's rating could experience downward rating pressure if total revenue and EBITDA were to decrease significantly or its adjusted debt to EBITDA leverage ratio were to exceed 2.5 times on a sustained basis. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. WCI COMMUNITIES: Moody's Assigns B3 Rating on $50MM Add-on Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to WCI Communities, Inc.'s proposed $50 million add-on senior unsecured notes due 2021. At the same time, Moody's affirmed the company's B3 corporate family rating, B3-PD probability of default rating, B3 rating on the existing $200 million 6.875% senior unsecured notes due 2021, and an SGL-2 speculative grade liquidity rating. The rating outlook is stable. The proceeds from $50 million add-on senior unsecured notes will be used for general corporate purposes, including land acquisition and development and home construction. The proposed transaction results in the company's homebuilding debt to capitalization ratio (inclusive of Moody's standard adjustment for operating leases) rising from 35.7% at March 31, 2014 to pro forma 40.4%. This level of leverage is healthy for the B3 rating category, which is reflected in the ratings affirmations. The ratings also incorporate the improvement in WCI's credit metrics achieved over the last year through solid growth in revenues and earnings and the reversal of the deferred tax asset valuation allowance, as well as Moody's expectations for continued improvement going forward. The following rating actions were taken: $50 million add-on senior unsecured notes due 2021, assigned B3, LGD4; Corporate family rating, affirmed at B3; Probability of default rating, affirmed at B3-PD; $200 million 6.875% senior unsecured notes due 2021, affirmed at B3, LGD4; Speculative grade liquidity rating, affirmed at SGL-2; Stable outlook. Ratings Rationale The B3 corporate family rating reflects WCI's small size and scale compared to its nationally diversified public peers who are able to benefit from higher operating efficiencies and purchasing economies of scale. The rating is also constrained by the company's 100% concentration in the Florida markets, and limited time in its current post-bankruptcy configuration. At the same time, the company's small size and limited diversity are to a degree mitigated by its Amenities business, the significant amount of revenue generated by the high price point product within its master planned communities, and healthy gross margins of 20%-22% company-wide and about 30% in its homebuilding operations alone, though they are expected to weaken slightly as the company works through its legacy inventory. The rating is also supported by WCI's modest pro forma financial leverage of 40% and Moody's expectation that it will trend down as a result of positive earnings generation, by a healthy equity balance post the IPO in 2013, good positions in Florida's established markets with attractive growth prospects, modest speculative home building percentage, and a long land supply, obviating the immediate need to invest in land. The B3 rating on senior unsecured notes, which is in line with the corporate family rating, reflects the preponderance of unsecured debt in the capital structure. WCI's good liquidity position is reflected in its SGL-2 speculative grade liquidity rating. Liquidity is supported by the company's cash balance of $245 million pro forma for the $50 million add-on senior unsecured note offering, full availability under its $75 million senior unsecured revolving credit facility due 2017, and lack of note maturities until 2021. Liquidity is constrained by negative cash flow from operations as the company invests in land and by the need to maintain compliance with the credit agreement covenants, including leverage and interest coverage ratios, minimum liquidity and minimum tangible net worth. The stable outlook reflects Moody's expectation that continued positive trends in the homebuilding industry as well as WCI's solid positions in its Florida markets will result in improving credit metrics. The rating would be considered for an upgrade if the company significantly expands its size and scale, increases geographic diversity, keeps gross margins above 20%, and maintains a conservative approach to financial leverage and sufficient liquidity. The rating would experience downward pressure if the company engages in aggressive land expenditures that would impair liquidity, experiences sharp profitability declines, or drives debt leverage above 60%. 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. WCI Communities, Inc., headquartered in Bonita Springs, is a Florida-based homebuilder and a developer of master planned communities. The company focuses on move-up, second home and active adult buyers, and operates three business segments, including Homebuilding, Real Estate Services (brokerage and title services), and Amenities within its communities. In 2013, the company's average home selling prices reached $433,000. In the last twelve months ending March 31, 2014, WCI generated $337 million in revenues. ZOGENIX INC: Presented at JMP Securities Healthcare Conference -------------------------------------------------------------- Ann Rhoads, chief financial officer of Zogenix, Inc., attended the JMP Securities Healthcare Conference in New York, on June 24, 2014. The slides used at the presentation is available for free: http://is.gd/1vbrYS About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Zogenix reported a net loss of $80.85 million in 2013, as compared with a net loss of $47.38 million in 2012. The Company's balance sheet at March 31, 2014, showed $99.98 million in total assets, $97.56 million in total assets, $2.41 million in total stockholders' equity. Ernst & Young LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company's recurring losses from operations and lack of sufficient working capital raise substantial doubt about its ability to continue as a going concern. * Debtor Can 'Strip Off' Mortgages In Ch. 20, 11th Circ. Says ------------------------------------------------------------- Law360 reported that the Eleventh Circuit ruled that a debtor can lawfully "strip off" an unsecured junior mortgage in a so-called Chapter 20 bankruptcy case, affirming a bankruptcy court's order extinguishing Wells Fargo Bank NA's second and third mortgage liens on a debtor's principal residence. According to the report, the three-judge appeals panel affirmed a bankruptcy court's 2012 order erasing the bank's mortgage liens upon completion of defendant Tahisia L. Scantling's payments under her confirmed Chapter 13 plan. The report related that a debtor in Chapter 20, a colloquialism used to describe someone who files for Chapter 13 after completing a Chapter 7 bankruptcy, may strip off a wholly unsecured mortgage on a principal residence under 11 U.S.C. Sections 506 and 1322(b) of the Bankruptcy Code, the judges found. The case is Wells Fargo Bank NA v. Tahisia L. Scantling, case number 13-10558, in the U.S. Court of Appeals for the Eleventh Circuit. * SunTrust Settles with Justice Dept. over Mortgages ---------------------------------------------------- Michael Corkery and Jessica Silver-Greenberg, writing for The New York Times' DealBook, reported that the U.S. Department of Justice reached an agreement with SunTrust Banks over questionable mortgage practices. The size of the SunTrust settlement is $968 million, although DealBook said the settlement pales next to the multibillion-dollar pacts that the government has signed -- or is seeking to sign -- with the nation's largest banks. * Investors Punish Pair of For-Profit Educators ----------------------------------------------- Chris Nolter, writing for The Deal, reported that shares of for- profit educators Education Management Corp. and Corinthian Colleges Inc. received stern treatment on June 24 as investors continued to digest recent deals with lenders and regulators. According to The Deal, Education Management stock declined 15 cents, or 8%, to $1.73, a day after it announced an agreement with lenders that would waive default from potential violations of covenants until Sept. 15, 2014. Meanwhile, Corinthian Colleges fell 5 cents, or 11.5%, to 35 cents a day after it outlined a deal with the government that would provide it with $16 million in cash but would require sales or closures of school, the report related. Corinthian rose 21% on June 23 on news of the deal, but is still less than half the 85 cents per share it traded at June 18, before the company disclosed the issues with government funding, the report noted. As previously reported by The Troubled Company Reporter, The Wall Street Journal reported that Corinthian Colleges warned that it may have to shut down after the Obama administration moved to restrict the company's access to federal funding. The Journal said Corinthian Colleges 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 TCR, on May 13, 2014, reported that Standard & Poor's Ratings Services lowered its corporate credit rating on Pittsburgh-based for-profit post-secondary school operator Education Management LLC (EDMC) to 'CCC-' from 'CCC+'. The rating outlook is negative. * Many Displaced by Superstorm Sandy Still Wait for Housing Help ---------------------------------------------------------------- Laura Kusisto and Josh Dawsey, writing for The Wall Street Journal, reported that 17 months after Congress authorized up to $16 billion to fix homes wrecked by superstorm Sandy, tens of thousands of people still are living in damaged houses or paying rent on top of a mortgage as they wait for rebuilding help. According to the report, about 15,000 New York City residents are seeking aid, but city officials say only 352 have so far received a check or city-provided home construction. In New Jersey, 2,032 homes are being built or repaired, for more than 11,500 homeowners deemed eligible for rebuilding help, the Journal said, citing the state department of community affairs. * Matt Burnstein Elected Chairman at Waller ------------------------------------------- Waller, a law firm serving the healthcare, financial services, retail and hospitality industries, on June 24 disclosed that Matthew R. Burnstein has been elected chairman of the firm. Effective August 1, 2014, Mr. Burnstein will succeed John Tishler, who will assume the role of Chairman Emeritus and resume his bankruptcy and restructuring practice at Waller. "I am honored to have my partners' confidence and trust, and I look forward to working with them to serve the firm's clients," Mr. Burnstein said. "Waller has grown significantly under John's leadership, and we will be fortunate to have his continuing assistance as we implement our new five-year strategic plan." Waller also disclosed that David Lemke has been named to lead the firm's Financial Services industry team and Marcus Crider will lead the firm's Retail and Hospitality team. Ken Marlow was appointed chair of Waller's healthcare department in September 2013. Mr. Burnstein has spent his entire legal career at Waller. He joined the firm in 1997 after graduating Order of the Coif from Vanderbilt University Law School and serving as law clerk to Chief U.S. District Judge Charles R. Simpson III in the United States District Court for the Western District of Kentucky. He earned a B.A., magna cum laude, in 1993 from Vanderbilt University. Mr. Burnstein's legal practice focuses on corporate transactions, primarily in the healthcare industry. He also represents private equity and venture capital funds. He is recognized in Chambers USA and Best Lawyers for his corporate and M&A experience. Burnstein served on Waller's Board of Directors from 2006 to 2012. "It has been a privilege to lead Waller over the last six years," Mr. Tishler said. "I'm proud of what we've accomplished for our clients and how we've strengthened the firm. Matt will be a tremendous asset in his new role, and I'm excited to get back to the full-time practice of law." Mr. Tishler was elected Waller's chairman in January 2008. During his tenure, Waller opened new offices in Austin and Memphis and enhanced its position as one of the nation's largest and most respected firms for healthcare law. Mr. Tishler represents lenders and creditors in bankruptcy and corporate restructuring matters, including the largest creditors in the Service Merchandise and K-Mart bankruptcies. He is a past president of the Tennessee Chapter of the Turnaround Management Association and he is recognized in Best Lawyers in the categories of Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law and Bankruptcy Litigation. Mr. Tishler currently serves as the chairman of the Board of Trustees of Franklin Road Academy and on the Board of Directors of the United Way of Metropolitan Nashville. About Waller With approximately 200 attorneys in Nashville, Tenn., Birmingham, Ala., Austin, Tex., and Memphis, Tenn., Waller -- http://www.wallerlaw.com-- helps clients navigate a diverse range of complex transactional, regulatory and litigation issues across myriad industries. * KCC's Albert Kass Bags M&A's 5th Annual 40 Under 40 Award ----------------------------------------------------------- Albert Kass, KCC's EVP of Corporate Restructuring Services, has been announced by The M&A Advisor as a winner of the 5th Annual 40 Under 40 Recognition Awards. On June 24, the organization will host a black tie Awards Gala at the Roosevelt Hotel in Manhattan to introduce the award winners to the business community and celebrate their achievements. M&A Advisors initiated this annual award to recognize emerging M&A, financing and turnaround professionals for their contributions to the corporate restructuring industry. Winners were selected from a pool of prominent nominees by an independent judging panel of distinguished business leaders. "Under Albert's leadership, his team brought to market an innovative eServices platform and continues to develop new advancements that provide clients with time and cost efficiencies," remarked Bryan Butvick, President of KCC. "As a result of Albert's efforts, KCC remains at the forefront of the bankruptcy administration market." As a former Kirkland & Ellis LLP restructuring attorney, Mr. Kass oversees both the business development and consulting groups for KCC's corporate restructuring business. During his tenure at KCC, Albert has been able to improve clients' experience through innovation including developing a court-approved Electronic Proof of Claims (ePOC) platform and an opt-in eNoticing platform allowing creditors to receive required court notices and documents digitally to any device. About KCC KCC -- http://www.kccllc.com-- is a Computershare company. The firm provides administrative-support services that help legal professionals realize time and cost efficiencies. With an integrated suite of corporate restructuring, class action and legal document management solutions, KCC alleviates the administrative challenges of today's legal processes and procedures. KCC has gained client and industry recognition for its industry expertise, professional-level client service and proprietary technologies. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re 3829 Marsh Bluff Drive Land Trust Bankr. M.D. Fla. Case No. 14-02766 Chapter 11 Petition filed June 5, 2014 Filed Pro Se In re CAM Trucking, LLC Bankr. D. Ariz. Case No. 14-09404 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/azb14-09404.pdf represented by: Richard Drake, Esq. BARSKI DRAKE, PLC E-mail: rdrake@bdlawyers.com In re Frank Joseph Redmond Bankr. C.D. Cal. Case No. 14-17941 Chapter 11 Petition filed June 18, 2014 In re Syed Ali Raza and Iram Hussain Raza Bankr. S.D. Fla. Case No. 14-23919 Chapter 11 Petition filed June 18, 2014 In re Sun Air Windows of Florida, Inc. Bankr. S.D. Fla. Case No. 14-24020 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/flsb14-24020.pdf represented by: Richard R Robles, Esq. LAW OFFICES OF RICHARD R. ROBLES, P.A. E-mail: rrobles@roblespa.com In re Donald Lawrence Wolf, Sr. Bankr. N.D. Ill. Case No. 14-81919 Chapter 11 Petition filed June 18, 2014 In re Action Real Estate Services, LLC dba ReMax Action Bankr. D. Kans. Case No. 14-40692 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/ksb14-40692.pdf represented by: William E. Pray, Esq. E-mail: weprayatty@kc.rr.com In re 619 N. Calhoun Street, LLC Bankr. D. Md. Case No. 14-19842 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/mdb14-19842.pdf represented by: Morgan William Fisher, Esq. LAW OFFICES OF MORGAN FISHER, LLC E-mail: bk@morganfisherlaw.com In re Vincenzo Carollo and Serafina Carollo Bankr. D.N.J. Case No. 14-22572 Chapter 11 Petition filed June 18, 2014 In re ENY Properties, LLC Bankr. E.D.N.Y. Case No. 14-43102 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/nyeb14-43102.pdf Filed Pro Se In re Delaware Holding Trust Bankr. S.D.N.Y. Case No. 14-36246 Chapter 11 Petition filed June 18, 2014 Filed Pro Se In re Raul Palacios Velez Bankr. D.P.R. Case No. 14-04976 Chapter 11 Petition filed June 18, 2014 In re Joseph Bruce Eatherly Bankr. E.D. Tenn. Case No. 14-31954 Chapter 11 Petition filed June 18, 2014 In re 3939 Tanbark Road, LLC Bankr. E.D. Va. Case No. 14-12295 Chapter 11 Petition filed June 18, 2014 See http://bankrupt.com/misc/vaeb14-12295.pdf represented by: Nathan A. Fisher, Esq. E-mail: Fbarsad@cs.com In re James W. Atwell Bankr. S.D. Cal. Case No. 14-04861 Chapter 11 Petition filed June 19, 2014 In re The Wojo Corp. Bankr. S.D. Fla. Case No. 14-24039 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/flsb14-24039.pdf represented by: Brian K. McMahon, Esq. E-mail: briankmcmahon@gmail.com In re Bottling Plant of Miami LLC Bankr. S.D. Fla. Case No. 14-24044 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/flsb14-24044.pdf Filed Pro Se In re El Ranchito Michoacano, Inc. dba El Ranchito Michoacano Restaurant Bankr. N.D. Ill. Case No. 14-22821 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/ilnb14-22821.pdf represented by: Valentin T. Narvaez, Esq. CONSUMER LAW GROUP, LLC E-mail: valentinnarvaez@gmail.com In re Bomhack Properties, LLC - 851 Bode Series Bankr. N.D. Ill. Case No. 14-22932 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/ilnb14-22932.pdf represented by: Paul M. Bach, Esq. SULAIMAN LAW GROUP, LTD. E-mail: ecfbach@gmail.com In re SoccerBarKC, LLC dba Futbol Club Bankr. D. Kans. Case No. 14-21462 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/ksb14-21462.pdf represented by: Colin N. Gotham, Esq. EVANS & MULLINIX, P.A. E-mail: Cgotham@emlawkc.com In re Lindvall Properties, LLC Bankr. D. Maine Case No. 14-20474 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/meb14-20474.pdf represented by: D. Sam Anderson, Esq. BERNSTEIN SHUR SAWYER & NELSON E-mail: sanderson@bernsteinshur.com In re Enrique Olivares and Irma Olivares Bankr. D. Nev. Case No. 14-14264 Chapter 11 Petition filed June 19, 2014 In re Christopher W. Eckler Bankr. D. N.H. Case No. 14-11262 Chapter 11 Petition filed June 19, 2014 In re WAV Realty Holdings, Inc. Bankr. E.D.N.Y. Case No. 14-72843 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/nyeb14-72843.pdf represented by: Richard S. Feinsilver, Esq. E-mail: feinlawny@yahoo.com In re Vega Star Realty, Inc. aka T/A ClinMott Cafe Bankr. D.N.J. Case No. 14-22662 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/njb14-22662.pdf represented by: Warren L. Peterson, Esq. PETERSON & BOOK E-mail: petersonbooklaw@optonline.net In re Maurice V. Horton, Jr. and Allison B. Horton Bankr. E.D.N.C. Case No. 14-03556 Chapter 11 Petition filed June 19, 2014 In re Brinks Tour and Charter, LLC Bankr. W.D. Pa. Case No. 14-10714 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/pawb14-10714.pdf represented by: Lawrence C. Bolla, Esq. QUINN BUSECK LEEMHUIS TOOHEY & KROTO INC. E-mail: lbolla@quinnfirm.com In re Clinica Quiropractica de Ponce, Inc. Bankr. D.P.R. Case No. 14-05018 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/prb14-05018.pdf represented by: Paul James Hammer, Esq. ESTRELLA, LLC E-mail: phammer@welo.net In re Eric Acquisitions, LLC Bankr. W.D. Pa. Case No. 14-10715 Chapter 11 Petition filed June 19, 2014 See http://bankrupt.com/misc/pawb14-10715.pdf represented by: Stephen H. Hutzelman, Esq. SHAPIRA HUTZELMAN BERLIN ELY SMITH, ET AL. E-mail: shutzelman@shapiralaw.com In re Laurin P. Eck and Darla Rae Eck Bankr. E.D. Va. Case No. 14-12301 Chapter 11 Petition filed June 19, 2014 In re Hernan Abelardo Chalco Bankr. C.D. Cal. Case No. 14-13064 Chapter 11 Petition filed June 20, 2014 In re B.J. Enterprises Inc. Bankr. D. D.C. Case No. 14-00361 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/dcb14-00361.pdf Filed Pro Se In re Candlelight Kitchen Designs Inc. Bankr. M.D. Fla. Case No. 14-07194 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/flmb14-07194.pdf Filed Pro Se In re Chauncey L. Conner D.D.S., LLC Bankr. N.D. Ga. Case No. 14-62039 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/ganb14-62039.pdf represented by: Howard D. Rothbloom, Esq. THE ROTHBLOOM LAW FIRM E-mail: howard@rothbloom.com In re Chauncey Lloyd Conner and Lateefah Bahar Conner Bankr. N.D. Ga. Case No. 14-62042 Chapter 11 Petition filed June 20, 2014 In re York Industrial Center, Inc. Bankr. N.D. Ill. Case No. 14-22995 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/ilnb14-22995.pdf represented by: Lester A. Ottenheimer, III, Esq. OTTENHEIMER LAW GROUP, LLC E-mail: lottenheimer@olawgroup.com In re B Xpress-Elysian Fields, LLC Bankr. E.D. La. Case No. 14-11595 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/laeb14-11595.pdf represented by: Jan Marie Hayden, Esq. BAKER DONELSON E-mail: jhayden@bakerdonelson.com In re Alberta Inc. Chicken Box Cafeteria and Market Bankr. E.D. La. Case No. 14-11596 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/laeb14-11596.pdf represented by: Jan Marie Hayden, Esq. BAKER DONELSON E-mail: jhayden@bakerdonelson.com In re Dale Rowe, Jr. and Katherine Hare Rowe Bankr. W.D. La. Case No. 14-80642 Chapter 11 Petition filed June 20, 2014 In re Abbington Partners, LLC Bankr. M.D.N.C. Case No. 14-80681 Chapter 11 Petition filed June 20, 2014 See http://bankrupt.com/misc/ncmb14-80681.pdf Filed Pro Se In re K & L WA, LLC dba The Scarlet Tree Bankr. W.D. Wash. Case No. 14-14814 Chapter 11 Petition filed June 22, 2014 See http://bankrupt.com/misc/wawb14-14814.pdf represented by: Jacob D. DeGraaff, Esq. HENRY DEGRAAFF & MCCORMICK PS E-mail: mainline@hdm-legal.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***