/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140701.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, July 1, 2014, Vol. 18, No. 181 Headlines 148 WEST: Judge Denies Request for Compliance With SBC-Morton Deal 148 WEST: Oct. 7 Deadline for Government Agencies to File Claims 148 WEST: Gets Approval to Hire Alter & Brescia as Legal Counsel ACG CREDIT: SageCrest Wants Stay Lifted for Trial to Proceed ADAMIS PHARMACEUTICALS: Incurs $8.1 Million in Fiscal 2014 ADAYANA INC: Asks Court to Dismiss Chapter 11 Cases ALCOA INC: Fitch Retains IDRs Over Firth Rixson Deal ALCOA INC: Firth Rixson Deal No Impact on Moody's 'Ba1' CFR ALHAMBRA RESOURCES: Prepares to File 2013 Financial Statements ALISAL WATER: Fitch Affirms 'BB-' Issuer Default Rating AURORA DIAGNOSTICS: S&P Cuts CCR to 'CCC'; Outlook Still Negative AUXILIUM PHARMACEUTICALS: QLT Merger No Impact on Moody's B3 CFR B&B ALEXANDRIA: Case Summary & Largest Unsecured Creditor BAPTIST HOME: Pepper Hamilton Approved as Committee Counsel BAPTIST HOME: Wins Approval to Hire Cozen as Bankr. Counsel BAPTIST HOME: U.S. Trustee Appoints Creditors' Committee BI-LO LLC: S&P Assigns 'BB-' Rating on $900MM Sr. Sec. Facility BLUESTONE RESOURCES: In Default of $130,000 Loan BROADBAND SPECIALISTS: Voluntary Chapter 11 Case Summary BRUSH CREEK AIRPORT: U.S. Trustee Unable to Appoint Committee BUFFALO LODGE: Case Summary & 4 Largest Unsecured Creditors CDRH PARENT: Moody's Cuts 1st Lien Debt Rating to 'B2' CHRYSLER GROUP: Expands Recall Tied to Ignition Switch Issues CITIZENS DEVELOPMENT: Officially Exited Bankruptcy March 24 CITYCENTER HOLDINGS: Moody's Hikes Corporate Family Rating to B2 CLEAR CHANNEL: Scott Hamilton Inks Employment Agreement with Unit CONCORD CAMERA: Board OKs $0.02 Apiece Shareholder Distribution CORINTHIAN COLLEGES: To Sell Heald Campuses CRESTWOOD MIDSTREAM: S&P Assigns 'B' Rating on Class A Units DANIELS CAPITAL: Case Summary & 20 Largest Unsecured Creditors DOT RESOURCES: Prepares to File 2013 Annual Financial Statements ELBIT IMAGING: Plaza Plans to Raise EUR20MM From Rights Offering ELIZABETH ARDEN: Buyer Withdrawal No Impact on Moody's Ba3 Rating ENERGY CORP: Moody's Affirms 'B3' Corporate Family Rating ENERGY FUTURE: $1.9 Billion Loan Draws Competition, Opposition FALCON STEEL: Case Summary & 20 Largest Unsecured Creditors FANNIE MAE & FREDDIE MAC: First-Year Litigation Update FIRST AMERICAN PAYMENT: Moody's Hikes 1st Lien Debt Rating to Ba3 FRANKLIN PIERCE: Moody's Cuts Rating on 1998/2004 Bonds to Caa3 GENERAL MOTORS: Unveils Recall Compensation Plan GENERAL MOTORS: To Recall 8.45-Mil. More Vehicles in North America GOLDEN STATE MALL: Banquet Hall Deposit Claimants to Get In Line GRANITE BROADCASTING: S&P Affirms B CCR & Rates Term Loan BB- HAYDEL PROPERTIES: Default Cues BancorpSouth Bank to Foreclose HELEN KELLER: Moody's Lowers Rating on Series 2003 Bonds to Ba3 HGIM CORP: S&P Affirms 'B' CCR on Continued Stable Performance HILEX POLY: Moody's Assigns 'B2' Corporate Family Rating HMK MATTRESS: Moody's Affirms B3 CFR & Changes Outlook to Neg. HUDBAY MINERALS: Moody's Affirms B3 CFR & Senior Unsecured Rating IBCS MINING: Case Summary & 20 Largest Unsecured Creditors INTELLICELL BIOSCIENCES: Gets Favorable Order in Ironridge Suit INTERMETRO COMMUNICATIONS: Investor Buys 150,000 Preferred Shares IRON MOUNTAIN: Moody's Affirms 'Ba3' Corporate Family Rating JFB FIRTH: Alcoa Acquisition Deal No Impact on Moody's B3 Rating KLEEN ENERGY: Fitch Puts 'BB' Ratings on $730MM Loans on Watch Neg LANTHEUS MEDICAL: Moody's Hikes Corporate Family Rating to Caa1 LONG BEACH MEDICAL: Buyer Expects to Consummate Sale Soon MACKEYSER HOLDINGS: Has Interim Approval of $1 Million DIP Loan MACKEYSER HOLDINGS: Seeks Extension of Schedules Filing Date MACKEYSER HOLDINGS: American Legal Services OK'd as Claims Agent MERITOR INC: Moody's Affirms B2 CFR & Revises Outlook to Positive METRO-GOLDWYN-MAYER: S&P Cuts Secured Debt Rating to B+ on Upsize MICHAELS COMPANIES: S&P Assigns 'B' Corporate Credit Rating MIDTOWN SCOUTS: Joint Plan of Reorganization Filed MIG LLC: Case Summary & 15 Largest Unsecured Creditors MINI MASTER CONCRETE: Court Allows Sale of Dorado Equipment MINI MASTER CONCRETE: Court Approves IPFS Financing Deal MINI MASTER CONCRETE: Court Approves Sale of Carolina Plant Assets MOMENTIVE PERFORMANCE: Changes to Backstop Commitment Deal Filed NATCHEZ REGIONAL: U.S. Trustee Appoints Creditors' Committee NEW BEGINNINGS: Case Summary & 7 Largest Unsecured Creditors NEWLEAD HOLDINGS: Completes Settlement Agreement with MGP, Hanover NEWLEAD HOLDINGS: Receives NASDAQ Staff Determination Letter NOVITEX ACQUISITION: S&P Lowers CCR to 'B'; Outlook Stable NOVITEX ENTERPRISE: Moody's Lowers Corporate Family Rating to B3 OIL STATES: Moody's Withdraws 'B2' Corporate Family Rating OVERSEAS SHIPHOLDING: Annual Report on Savings Plan Filed OWENS & MINOR: MDCI Agreement No Impact on Moody's Ba1 Rating PACIFIC STEEL: Littler Mendelson Approved to Handle Class Action PACIFIC STEEL: Amends Schedules of Assets and Liabilities PHI GROUP: Incurs $266,000 Loss in Quarter Ended Dec. 31, 2012 PITT PENN: Plan Confirmation Hearing Adjourned Sine Die PK FOOD: Case Summary & 7 Largest Unsecured Creditors PRETIUM PACKAGING: S&P Withdraws 'B-' CCR at Company's Request PRWIRELESS INC: S&P Assigns 'CCC+' Rating on $190MM Secured Debt QUANTUM FOODS: Private Sale of Equipment for $11.9MM Approved QUECHAN INDIAN: Fitch Affirms 'B-' Issuer Default Rating RCH INVESTMENTS: Voluntary Chapter 11 Case Summary REPUBLIC OF TEXAS: Chapter 11 Exit Strategy Right on Target RESTORGENEX CORP: Files Financial Statements of Paloma Pharma RESTORGENEX CORP: Ally Bridge Reports 8.7% Equity Stake REVEL AC: Has Interim $23.5 Million DIP Loan Approval REVEL AC: Has Interim OK to Hire AlixPartners as Claims Agent REVEL AC: Has Interim Authority to Pay $3.5MM to Critical Vendors RICCO INC: Court Approves Report on Trustee's Sale of Assets RJS POWER: Moody's Assigns B1 Rating on $1.25BB Unsecured Notes SABERCAT NEIGHBORHOOD: Voluntary Chapter 11 Case Summary SERVICEMASTER CO: Moody's Affirms 'B3' Corp. Family Rating SERVICEMASTER CO: S&P Ups CCR to 'B' on Stronger Credit Measures SEVEN COUNTIES: Court Approves Use of Fifth Third Cash Collateral SHELBOURNE NORTH WATER: Perkins+Will Seeks Dismissal of Case SINO-FOREST CORP: Reaches Partial Class Action Settlement SKYVIEW ACADEMY: S&P Assigns 'BB+' Rating on $29.19MM Bonds SOURCE HOME: Has Interim Authority to Use Cash Collateral SOUTHERN STAR: Moody's Assigns Ba1 Rating on Sr. Unsecured Notes SPECTRASCIENCE INC: 2013 Net Loss Narrows to $240,000 SUROCO ENERGY: Petroamerica Merger May Trigger Covenant Breach SWJ HOLDINGS: RD Legal Funding Asks Court to Lift Automatic Stay TEC GULL CREEK: Case Summary & 20 Largest Unsecured Creditors TENET HEALTHCARE: Completes Private Offering of $500MM Notes THOMPSON CREEK: 86.4% of TMEDS Tendered for Exchange THOMPSON CREEK: S&P Raises CCR to 'B-' on Reduced Liquidity Risk TORNANTE-MDP: S&P Revises Outlook to Negative & Affirms 'B' CCR TOYS 'R' US: Fitch Affirms 'CCC' Issuer Default Rating TRINET HR: Moody's Assigns 'B1' Rating on New Senior Secured Debt TURNPIKE SERVICE: Case Summary & 5 Largest Unsecured Creditors UNI-PIXEL INC: Achieves Roll-to-Roll Pilot Production of Sensors UNITED AMERICAN: Incurs $435,000 Net Loss in First Quarter UNIQUE BROADBAND: Transfers Listing to NEX Board VERIFONE INC: $100MM Loan Upsize No Impact on Moody's B3 CFR VERITEQ CORP: Has Rights Agreement with Hudson Bay VIGGLE INC: Acquires Marketplace Platform Choose Digital VWR FUNDING: Parent IPO Filing No Impact on Moody's 'B3' CFR WALTER ENERGY: S&P Lowers CCR to 'CCC+' on Unsustainable Debt WILLIAM LYON: S&P Puts 'B-' CCR on CreditWatch Developing WOONSOCKET, RI: Moody's Affirms 'B3' GOULT Rating on $216MM Debt * Argentina Faces Deadline for Hedge Fund Payments * Large Companies With Insolvent Balance Sheet ********* 148 WEST: Judge Denies Request for Compliance With SBC-Morton Deal ------------------------------------------------------------------ U.S. Bankruptcy Judge Robert Drain denied the motion of SBC 2010- 1, LLC to compel 148 West 142 Street Corp. to comply with a settlement agreement tied to the sale of the company's real property in New York. In a two-page decision, Judge Drain wrote that the efforts on the part of 148 West to seek higher and better offers for the property "are consistent with the applicable provisions of the Bankruptcy Code." The bankruptcy judge denied the motion "without prejudice to the rights of any party" to object to the sale of the property to CRP Partners I LLC, according to the court filing. SBC, which holds a judgment against Patsy Morton, Allen Morton and Squadron VCD LLC in an amount in excess of $7.7 million, entered into a settlement agreement with the Mortons to resolve their dispute. Prior to the settlement, SBC brought an action in New York Supreme Court in a bid to collect the amounts owing under the judgment. On March 21, the buyer and the receiver of various properties owned and controlled by the Mortons entered into a contract of sale. On April 21, 148 West filed a motion to approve the sale of the New York property to CRP Partners. This was followed by SBC filing a motion to compel 148 West to comply with the settlement agreement, and to prohibit the company and the Mortons to stop interfering with the contract of sale. On April 30, 148 West filed an objection to the motion in which it questioned SBC's standing to bring the motion. SBC and CRP Partners defended the motion, arguing that as a party to the settlement agreement, SBC has standing to enforce its terms. About 148 West 142 Street Corp. 148 West 142 Street Corp. filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 14-22484) on April 10, 2014. Patsy J. Morton signed the petition as secretary/treasurer. The Debtor disclosed $11,122,411 in assets and $11,275,822 in liabilities as of the Chapter 11 filing. Judge Robert D. Drain oversees the case. Alter & Brescia, LLP, is the Debtor's counsel. No Committee of Unsecured Creditors has been appointed. 148 WEST: Oct. 7 Deadline for Government Agencies to File Claims ---------------------------------------------------------------- U.S. Bankruptcy Judge Robert Drain approved the deadlines proposed by 148 West 142 Street Corp. for filing proofs of claim against the company. Pursuant to the judge's order, governmental units must file their proofs of claim on or before Oct. 7, 2014. Claimants other than governmental units were required to submit proofs of claims by June 13. If 148 West amends or supplements its schedules of assets and liabilities subsequent to May 7, the company will serve a notice to the affected claimants. The claimants have 30 days from the date of such notice to file proofs of claim. Holders of claims that fail to timely file a proof of claim in appropriate form will not be treated as a creditor with respect to such claim for purposes of voting and distribution. About 148 West 148 West 142 Street Corp. filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 14-22484) on April 10, 2014. Patsy J. Morton signed the petition as secretary/treasurer. Judge Robert D. Drain oversees the case. Alter & Brescia, LLP, is the Debtor's counsel. No Committee of Unsecured Creditors has been appointed. 148 WEST: Gets Approval to Hire Alter & Brescia as Legal Counsel ---------------------------------------------------------------- 148 West 142 Street Corp. received approval from U.S. Bankruptcy Judge Robert Drain to hire Alter & Brescia, LLP as its bankruptcy counsel. As the company's bankruptcy counsel, the New York-based law firm is tasked to: (1) give advice to 148 West with respect to its powers and duties as debtor-in-possession in the continued management and operation of its business and property; (2) sell the company's real property located at 148 West 142 Street; (3) negotiate with secured, priority and general unsecured creditors of the company in formulating a plan of reorganization, and to take legal steps necessary to confirm such plan; (4) prepare court documents on behalf of the company; (5) appear before the court and the U.S. trustee to represent the interests of the company. Alter & Brescia will be paid for its services on an hourly basis and will be reimbursed of its expenses. The firm's current customary hourly rates are $425 to $500 for partners, $275 to $375 for associates and $105 for paraprofessionals. The firm doesn't represent any interests adverse to the company or to its estate, and is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code, according to an affidavit of Bruce Alter, Esq., at Alter & Brescia. ACG CREDIT: SageCrest Wants Stay Lifted for Trial to Proceed ------------------------------------------------------------ Sagecrest II, LLC, asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay imposed in the Chapter 11 case of ACG Credit Company II, LLC, to proceed to trial in two consolidated actions pendng in the U.S. District Court for the District of Connecticut (Bridgeport) entitled Sagecrest II, LLC v. ACG Credit Company II, LLC, et al., 3:13-CV-973 (SRU), and Sagecrest II, LLC v. Ian S. Peck, et al., 3:12-CV-974 (SRV). The claims pending in the Connecticut Action are SageCrest's claims against numerous non-Debtor defendants and the Debtor for their failure to meet their obligations under a May 19, 2008, settlement stipulation and mutual release, and the Debtor's counterclaims arising from that same agreement. SageCrest alleges that the Debtor failed to pay $11,125,000 under the settlement stipulation, and have committed numerous tortious acts in order to avoid making those payments. Discovery in the Connecticut Action is completed and the only remaining proceeding is the trial, SageCrest said in court papers. Given the advanced stage of the Connecticut Action, allowing the case to proceed to trial before the Connecticut District Court is warranted, SageCrest asserted. SageCrest is represented by J. Kate Stickles, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware; Laurence May, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in New York; and Craig A. Wolfe, Esq., Robert S. Friedman, Esq., and Mark E. McGrath, Esq., at Sheppard Mullin Richter & Hampton LLP, in New York. New York-based ACG Credit Company II, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-11500) on June 17, 2014. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ian Peck signed the petition as director. Gellert Scali Busenkell & Brown, LLC, serves as the Debtor's counsel. ADAMIS PHARMACEUTICALS: Incurs $8.1 Million in Fiscal 2014 ---------------------------------------------------------- Adamis Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $8.15 million for the year ended March 31, 2014, as compared with a net loss of $7.19 million for the year ended March 31, 2013. Since the Company's fiscal 2010 year, it has not generated commercial revenues from marketing or selling any drugs or other products. The Company's balance sheet at March 31, 2014, showed $15.12 million in total assets, $2.93 million in total liabilities and $12.18 million in total stockholders' equity. Mayer Hoffman McCann P.C., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. The independent auditors noted that the Company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates, restrict our operations or obtain funds by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us." A full-text copy of the Form 10-K is available for free at: http://is.gd/66BBzc The Company also filed with the SEC a Form S-3 registration statement relating to the sale of its common stock, preferred stock, warrants, or units having an aggregate initial offering price not exceeding $50,000,000. The preferred stock, warrants, and units may be convertible into or exercisable or exchangeable for common stock, preferred stock or other securities of the Company. The Company's common stock is presently listed on The NASDAQ Capital Market under the symbol "ADMP." On June 20, 2014, the last reported sale price of the Company's common stock was $5.12. A full-text copy of the prospectus is available for free at: http://is.gd/zz12tO About Adamis San Diego, Calif.-based Adamis Pharmaceuticals Corporation (OTC QB: ADMP) is a biopharmaceutical company engaged in the development and commercialization of specialty pharmaceutical and biotechnology products in the therapeutic areas of respiratory disease, allergy, oncology and immunology. ADAYANA INC: Asks Court to Dismiss Chapter 11 Cases --------------------------------------------------- Persist Liquidating Corp., formerly known as Adayana, Inc., asks the Bankruptcy Court to dismiss its Chapter 11 case by June 30, 2014. In December 2013, the Court allowed Persist Liquidating to sell its assets and a month later Persist Liquidating reported that it had consummated the sale. Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana, notes that given that all of its assets have been sold, Persist Liquidating concedes that there is no hope in proposing a confirmable plan of reorganization and rehabilitating its business. Persist Liquidating has entered into an agreement to amend and terminate and office lease, which becomes effective once its Chapter 11 case is dismissed, which provides for its former subsidiary's continued use and occupancy of its primary offices for a period of time. Section 349(b) of the Bankruptcy Code provides that dismissal of a case vacates certain judgments and orders entered by the Court and revests all property of the estate with the Debtor, unless the Court orders otherwise. Persist Liquidating requests that the dismissal of its Chapter 11 case leave unaltered and in place all orders entered during the pendency of its case. Persists Liquidating is represented by: Michael P. O'Neil Taft Stettinius & Hollister LLP One Indiana Square, Suite 3500 Indianapolis, IN 46204 Telephone: (317) 713-3500 Facsimile: (317) 713-3699 E-mail: moneil@taftlaw.com About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. The United States Trustee for Region 10 has been unable to appoint an official committee under 11 U.S.C. Sec. 1102 in the case. ALCOA INC: Fitch Retains IDRs Over Firth Rixson Deal ---------------------------------------------------- Fitch Ratings has stated that Alcoa's ratings and Outlook are unaffected by the company's announcement that it is acquiring Firth Rixson for $2.85 billion. Alcoa's purchase of Firth Rixson will bolster the company's aerospace business in the jet engine component segment. On a pro forma basis, the acquisition will increase Alcoa's annual aerospace segment revenues to approximately $4.8 billion from $4 billion for 2013. The two combined businesses are complementary and possess little product overlap. The acquisition is subject to regulatory approvals and conditions and is expected to close by the end of 2014. Consideration for the acquisition is $500 million of Alcoa common equity to Oak Hill Capital Partners (owner of Firth Rixson) and $2.35 billion in cash as well as a potential $150 million earn-out. The cash portion is supported by a committed bridge facility provided by Morgan Stanley. Fitch anticipates that Alcoa will subsequently take out the bridge facility with a combination of debt and equity that will leave Alcoa's post-acquisition credit profile commensurate with its existing ratings. Fitch currently rates Alcoa as follows: -- Issuer Default Rating (IDR) 'BB+'; -- Senior unsecured debt 'BB+'; -- $3.75 billion revolving credit facility 'BB+'; -- Preferred stock 'BB-'. -- Short-term IDR 'B'; -- Commercial paper 'B'. The Rating Outlook is Stable. ALCOA INC: Firth Rixson Deal No Impact on Moody's 'Ba1' CFR ----------------------------------------------------------- Moody's Investors Service comments that Alcoa's $2.85 billion acquisition of Firth Rixson (from Oaktree Capital), a leading supplier to the jet engine component industry, has no impact on the company's Ba1 corporate family rating (CFR). Alcoa has indicated that it intends to fund the acquisition with $2.35 billion in cash and $500 million in common stock. The transaction also has a potential $150 million earn-out. The company indicates that the cash portion of the transaction will be funded by a combination of debt and equity-content securities. Although releveraging could slow metric improvement in the short-term, the acquisition is expected to increase the percentage of value added earnings over the medium to longer term and contribute to improving performance. ALHAMBRA RESOURCES: Prepares to File 2013 Financial Statements -------------------------------------------------------------- Alhambra Resources Ltd. on June 27 disclosed that the auditors for the Company continue to work on the audit of the Corporation's 2013 Annual Audited Financial Statements, and the Corporation continues to believe that it will be able to file these statements on SEDAR on or before July 2, 2014. In addition, the Corporation is completing its Interim Financial Statements and MD&A for the three months ended March 31, 2014 and anticipates filing these documents on SEDAR -- www.sedar.com -- after filing the 2013 Annual Audited Financial Statements. On April 11, 2014, the Corporation disclosed that it expected a delay in filing its 2013 annual audited financial statements, management's discussion and analysis and CEO and CFO certificates. The Corporation is providing this bi-weekly Default Status Report in accordance with National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults. Once Alhambra completes these filings, the Corporation will have satisfied its financial filing requirements, and will no longer be issuing any further bi-weekly Default Status Reports under Section 4.4 of National Policy 12-203 - Alternative Information Guidelines ("AIG"). About Alhambra Alhambra is a Canadian based international exploration and production corporation in Kazakhstan. CALGARY, ALBERTA, Jun 27, 2014 (Marketwired via COMTEX) -- ALISAL WATER: Fitch Affirms 'BB-' Issuer Default Rating ------------------------------------------------------- Fitch Ratings affirms the following ratings for Alisal Water Corporation (Alco): -- $6.8 million of outstanding 2007A senior secured taxable bonds at 'BB+'; -- Issuer Default Rating at 'BB-'. The Rating Outlook is Stable. Security The bonds are secured by a security interest in pledged collateral, which consists of all tangible and intangible assets owned by Alco. Key Rating Drivers Financials Remain Narrow But Adequate: Alco's ratings reflect the utility's adequate but relatively weak financial metrics, including very low liquidity levels. A rate base increase in 2011 improved Alco's financial profile from prior levels, although ongoing margins are expected to be relatively modest. Favorable Regulatory Environment: The California regulatory environment is relatively predictable and the utility has achieved rate relief as needed, although customer charges are high. Limited Service Area And Management: The customer base is limited and includes a narrow economic profile and very high unemployment. Reflective of the size of operations, organizational leadership is concentrated, although the executive team is well qualified. Capital Structure To Continue: Capital needs are manageable, which should help to improve Alco's elevated debt to equity mix over time. Long-Term Supply Adequacy: The utility provides an essential service and water supplies are sufficient to meet long-term demands. Drought conditions affecting the state have limited impact to Alco's operations. Rating Sensitivities Usage Declines: Declines in sales volume would erode financial results and make it difficult to achieve Alco's approved return on equity (ROE) absent additional rate adjustments. Alternatively, rate base offsets to counter lower sales volumes would push already high user charges even higher. Capital Structure: Improvement in Alco's capital structure would alleviate leverage concerns. Regulatory Framework: Unfavorable changes in California's regulatory environment that make it more difficult to achieve sufficient rate base adjustments to preserve financial margins would be viewed negatively. Credit Profile Adequate But Weak Financial Results Operating revenues improved 4% in calendar 2013 on higher sales volumes. However, improvement to Alco's income statement performance for the year was offset by a similar percentage increase in operating expenses - driven by higher production costs, repairs on a well, and an increase in income tax expenses - as well as higher debt service costs. For 2013, EBITDA covered interest by 2.3x (up from 1.7x in 2012) but EBITDA only covered total debt service by 1.5x (down from 1.8x). Along with the relatively neutral operating results, cash flows were similarly unchanged in 2013 from the year prior. Cash flows from operations were down a total of $66,000 although free cash flow was up a modest $43,000. Alco's return on equity (ROE) - per Fitch's calculation which includes interest costs - fell slightly to just under 6% in 2013 from 7% in 2012. No new financial projections are available, but forecast estimates prepared last year and that extend through 2017 reportedly remain valid. These figures point to relatively similarly EBITDA coverage of interest of 1.9x-2.2x assuming certain inflationary and rate base offsets in future years, flat sales, and limited growth in operating expenses. Debt Profile Remains Elevated For 2013 Alco's debt relative to equity improved marginally to 74% from 75% in 2012 as a result of amortization of existing debt and lack of new borrowings. Debt-to-EBITDA saw similar movement to 5.3x from 5.7x in 2012 given the neutral financial performance during the year. Ongoing incremental improvement in the system's debt profile is expected over the near term as a result of limited planned borrowing and continued amortization of existing obligations. Nevertheless, the system's elevated debt profile continues to be a major credit factor. Manageable Capital But Pay-Go To Limit Liquidity Improvement Alco's current capital improvement program (CIP) for 2014-2017 totals $7.6 million. Capital projects and costs are unchanged from the last year's figures and are essentially unchanged from expectations over the last couple of years. Funding for the CIP is anticipated largely from surplus revenues (around 61%). While the extent of equity capital funding will help to improve Alco's capital structure to some extent, it will likely limit any improvement in Alco's weak liquidity position; for 2013 days equaled just 11 days. However, the completion of projects should allow Alco to seek rate base offsets, which will enhance future annual cash flows. Stable Regulatory Environment Alco is regulated by the CPUC but regulations are fairly well defined and Alco has received timely rate relief. However, as a result of Alco's 2011 rate case, residential charges, which were already relatively high, have risen to a very high 1.4% of median household income based on 1,400 cubic feet per month. While Fitch expects the CPUC will allow future adjustments to cover necessary operating and capital expenditures and to generate a continued ROE commensurate with other similarly-sized private water utilities in the state (currently in the 10% range), the system's level of charges poses some concern. Limited Service Territory And Management Alco is a private retail water company in Monterey County California, serving a portion of the city of Salinas and a population of around 29,000. Part of Alco's certificated service area includes undeveloped land within the city's extra-territorial jurisdiction. Water supplies are derived exclusively from groundwater sources. Supplies are estimated to be sufficient to meet customer demands for the foreseeable future and are essentially unaffected by the severe drought conditions currently plaguing the state. Given the scope of operations, the number of company personnel is limited, including the executive team. Largely offsetting the concern related to limited personnel is the sound experience and qualifications associated with Alco's executive management team. AURORA DIAGNOSTICS: S&P Cuts CCR to 'CCC'; Outlook Still Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Palm Beach Gardens, Fla.-based Aurora Diagnostics Holdings LLC to 'CCC' from 'CCC+. The outlook remains negative. S&P also lowered its rating on subsidiary Aurora Diagnostics LLC's senior secured debt to 'B-' (two notches above the corporate credit rating) from 'B', and S&P's rating on Aurora Diagnostics Holdings LLC's senior unsecured debt to 'CC' (two notches below the corporate credit rating) from 'CCC-'. S&P's '1' recovery rating on the senior secured debt and '6' recovery rating on the senior unsecured debt remain unchanged. The '1' recovery rating indicates S&P's expectation for very high (90% to 100%) recovery of principal and its '6' recovery rating indicates its expectation for negligible (0 to 10%) recovery of principal, both in the event of payment default. "We expect Aurora to be unable to refinance its revolving credit due in May 2015 and we do not expect the company to generate sufficient cash flow to enable repayment of the outstanding amount," said Standard & Poor's credit analyst Gail Hessol. Aurora is a provider of anatomic pathology diagnostics services. Its business profile is characterized by a very narrow operating focus, which makes it especially vulnerable to reimbursement risk. Changes in Medicare payments accounted for a large decline in Aurora's 2013 EBITDA; S&P expects only a modest adverse impact in 2014. Aurora is also challenged by stiffer competition from hospital laboratories, and vulnerability to customer in-sourcing, only very partially offset by fairly favorable long-term demand for anatomic pathology services. S&P assess Aurora's liquidity as "weak" because it do not expect its sources of funds to exceed uses over the next 12 months. S&P believes there is also a significant risk of a loan covenant violation at the end of the third or fourth quarter of 2014. The negative rating outlook reflects S&P's view that Aurora could default on its revolver when it is due in May 2015, absent very accommodating capital market conditions, sponsor support, or an unexpected substantial improvement in operating performance. S&P also believes Aurora could violate its loan covenant later in 2014. AUXILIUM PHARMACEUTICALS: QLT Merger No Impact on Moody's B3 CFR ---------------------------------------------------------------- Moody's Investors Service commented that Auxilium Pharmaceuticals, Inc.'s announced plan to merge with QLT Inc. (an unrated company) is credit positive. There is currently no effect on Auxilium's ratings including the B3 Corporate Family Rating and the Ba3 senior secured bank credit facility rating. The rating outlook is negative. "There is no change to Auxilium's ratings or outlook at this time given the company's very high leverage which we expect to remain elevated post-QLT, even though exact debt balances have yet to be determined," stated Michael Levesque, Moody's Senior Vice President. Headquartered in Chesterbook, Pennsylvania, Auxilium Pharmaceuticals, Inc. is a niche pharmaceutical company with a focus on urological diseases and other specialty areas. Auxilium reported $400 million of revenue in 2013 including revenue from Actient Holdings LLC, acquired on April 26, 2013. The principal methodology used in this rating was the Global Pharmaceutical Industry published in December 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. B&B ALEXANDRIA: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: B&B Alexandria Corporate Park TIC 17, LLC B&B Realty Investments, LLC Attn: David H. Bralove, Principal 6917 Arlington Rd., Suite 203 Bethesda, MD 20814 Case No.: 14-12434 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Hon. Brian F. Kenney Debtor's Counsel: Steven B. Ramsdell, Esq. TYLER, BARTL, RAMSDELL & COUNTS, P.L.C. 300 N. Washington St., Suite 202 Alexandria, VA 22314 Tel: (703) 549-5000 Fax: (703) 549-5011 E-mail: sramsdell@tbrclaw.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by David H. Bralove, special member. The Debtor listed B&B Alexandria Corp. Mgt., LLC, as its largest unsecured creditor holding a claim for property and asset management services of $623,930. The creditor can be reached at: B&B Alexandria Corp. Mgt., LLC Attn: David H. Bralove 6917 Arlington Rd., Suite 203 Bethesda, MD 20814 BAPTIST HOME: Pepper Hamilton Approved as Committee Counsel ----------------------------------------------------------- Bankruptcy Judge Eric L. Frank authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of The Baptist Home of Philadelphia to retain Pepper Hamilton LLP as its counsel. To the best of the Committee's knowledge, Pepper Hamilton has no interest adverse to the estates. About The Baptist Home of Philadelphia The Baptist Home of Philadelphia and The Baptist Home Foundation sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305 and 14-13306) in Philadelphia on April 25, 2014. Baptist Home of Philadelphia is a Pennsylvania nonprofit corporation that owns and operates a continuing care retirement community known as "Deer Meadows Retirement Community", which is located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania. Home offers 126 living accommodations, which vary in size, for independent living and personal care. It presently also has 206 skilled nursing beds in the nursing and rehabilitation center that offers short and long term care. It has 369 employees. Baptist Home of Philadelphia disclosed $37,330,904 in assets and $34,562,834 in liabilities as of the Chapter 11 filing. The Debtors have tapped Cozen O'Connor as counsel and KPMG Corporate Finance LLC as financial advisor and investment banker. The U.S. Trustee appointed Wilmarie Gonzalez as patient care ombudsman. U.S. Bank National Association, the trustee with regard to the secured bond indebtedness, hired Reed Smith LLP as counsel and CohnReznick LLP as financial advisor. Pepper Hamilton LLP represents the Official Committee of Unsecured Creditors. BAPTIST HOME: Wins Approval to Hire Cozen as Bankr. Counsel ----------------------------------------------------------- The Bankruptcy Court authorized The Baptist Home of Philadelphia to employ the law firm of Cozen O'Connor as its bankruptcy counsel. The U.S. Trustee for Region 3 had objected to the employment of Cozen O'Connor stating that in the declaration in support of the application, John T. Carroll, III, stated that the Debtors paid Cozen a prepetition retainer in the amount of $175,000 on an unspecified date. From the retainer, Cozen drew down approximately $72,000 to credit the Debtors' accounts for its charges for professional services performed and expenses incurred prior to the filing of the Petitions. The Debtors provided no specific information in the application regarding either the payment of the retainer or, more importantly, the specific services and costs, including the dates thereof, which were paid for from this retainer. The U.S. Trustee requested information regarding the payment of the retainer, well as the application of retainer monies to prepetition services and costs, and to date the Debtors have failed to respond. As reported in the Troubled Company Reporter on May 14, 2014, the Debtor filed an amended application to employ Cozen O'Connor as counsel. The amended employment application modifies the current hourly rates charged by Cozen for professionals and paraprofessionals employed in its offices. The original employment application says the hourly rate for members is $375 to $670, while the amended employment application says the hourly rate for members is $375 to $675. The firm can be reached at: John T. Carroll, III, Esq. Eric L. Scherling, Esq. COZEN O'CONNOR 1900 Market Street Philadelphia, PA 19103 Tel: (215) 665-2000 Fax: (215) 665-2013 E-mail: jcarroll@cozen.com escherling@cozen.com About The Baptist Home of Philadelphia The Baptist Home of Philadelphia and The Baptist Home Foundation sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305 and 14-13306) in Philadelphia on April 25, 2014. Baptist Home of Philadelphia is a Pennsylvania nonprofit corporation that owns and operates a continuing care retirement community known as "Deer Meadows Retirement Community", which is located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania. Home offers 126 living accommodations, which vary in size, for independent living and personal care. It presently also has 206 skilled nursing beds in the nursing and rehabilitation center that offers short and long term care. It has 369 employees. Baptist Home of Philadelphia disclosed $37,330,904 in assets and $34,562,834 in liabilities as of the Chapter 11 filing. The Debtors have tapped Cozen O'Connor as counsel and KPMG Corporate Finance LLC as financial advisor and investment banker. The U.S. Trustee appointed Wilmarie Gonzalez as patient care ombudsman. U.S. Bank National Association, the trustee with regard to the secured bond indebtedness, hired Reed Smith LLP as counsel and CohnReznick LLP as financial advisor. Pepper Hamilton LLP represents the Official Committee of Unsecured Creditors. BAPTIST HOME: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Region 3 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of The Baptist Home of Philadelphia and The Baptist Home Foundation. The unsecured creditors' committee is composed of: (1) McKesson Medical-Surgical Minneapolis Supply 8121 10th Avenue North Golden Valley, MN 55427 Attn: Tammy Ferguson Phone: (800) 328-8111 ext.69016 Fax: (763) 398-8736 Email: tammy.ferguson@mckesson.com; (2) RehabCare Group East, Inc. d/b/a RehabCare Group Therapy Services Inc. c/o Fultz Maddox Hovious & Dickens, PLC. 101 South Fifth Street, Suite 2700 Louisville, Kentucky 40202 Attn: Phillip A. Martin Phone: (502) 588-2000 Fax: (502) 588-2020 Email: pmartin@fmhd.com (3) Respiratory Health Services, LLC c/o Fultz Maddox Hovious & Dickens, PLC 101 South Fifth Street, Suite 2700 Louisville, Kentucky Attn: Phillip A. Martin Phone: (502) 588-2000 Fax: (502) 588-2020 Email: pmartin@fmhd.com; (4) Shelly's Medication Services, Inc. 2522 Pearl Buck Road, Unit A Bristol, PA 19007 Attn: David Perez Phone: (215) 785-1014 Fax: (215) 785-1902 Email: dperez@rxdn.com (5) Sodexo Operations, LLC 283 Cranes Roost Boulevard, Suite 260 Altamonte Springs, FL 32701 Attn: Bradley Hamman Phone: (407) 951-1258 Email: brad.hamman@sodexo.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About The Baptist Home of Philadelphia The Baptist Home of Philadelphia and The Baptist Home Foundation sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305 and 14-13306) in Philadelphia on April 25, 2014. Baptist Home of Philadelphia is a Pennsylvania nonprofit corporation that owns and operates a continuing care retirement community known as "Deer Meadows Retirement Community", which is located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania. Home offers 126 living accommodations, which vary in size, for independent living and personal care. It presently also has 206 skilled nursing beds in the nursing and rehabilitation center that offers short and long term care. It has 369 employees. Baptist Home of Philadelphia estimated $10 million to $50 million in assets and debt. The Debtors have tapped Cozen O'Connor as counsel and KPMG Corporate Finance LLC as financial advisor and investment banker. U.S. Bank National Association, the trustee with regard to the secured bond indebtedness, hired Reed Smith LLP as counsel and CohnReznick LLP as financial advisor. BI-LO LLC: S&P Assigns 'BB-' Rating on $900MM Sr. Sec. Facility --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '1' recovery rating to BI-LO LLC's $900 million senior secured revolving credit facility due May 21, 2019. The '1' recovery rating indicates S&P's expectation for very high recovery (90%-100%) in a payment default scenario. S&P's 'B' corporate credit rating on BI-LO reflects its opinion of its high leverage, financial sponsor ownership, and participation in the very competitive food retail industry. The company recently expanded its store footprint in the Southern U.S. through acquisitions funded with revolver borrowings in the first quarter of 2014. S&P expects pro-forma leverage following the acquisitions to decline to the high-4x area by the end of 2014. RATINGS LIST BI-LO LLC Corporate Credit Rating B/Stable/-- New Rating BI-LO LLC $900 mil. revolving credit facility 2019 Senior Secured BB- Recovery Rating 1 BLUESTONE RESOURCES: In Default of $130,000 Loan ------------------------------------------------ Bluestone Resources Inc. on June 27 disclosed that with respect to the loan to the Company in the amount of $130,000 announced on December 18, 2013, John Robins, the President and CEO of the Company, has delivered a notice of default to the Company requiring full repayment of the Loan. The Directors, independent from the loan, have determined that the Company is not in a financial position to repay the Loan, and requested an additional extension of the maturity date to allow time to find a suitable financing alternative. The request for an extension has been denied by the Lender. The Loan is secured by the Company's Richardson Property, Alaska. Upon further discussion, the Lender has agreed that upon transfer of the Richardson Property pursuant to the exercise of the security under the Loan, the outstanding Loan will be extinguished in full, including all outstanding interest. The Lender has also agreed to assume all outstanding fees owed to the Alaska government with respect to the property, in the sum of approximately USD$25,000. The Independent Directors have concluded this is the best course of action for the Company. About Bluestone Resources Inc. Bluestone Resources Inc. is a Canadian exploration company focused on the discovery and development of economic mineral deposits. Founded in 2004, the Company has assembled a team with the business acumen and technical expertise to identify and advance undervalued mineral exploration projects world-wide. BROADBAND SPECIALISTS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Broadband Specialists, Inc. 14-33038 1700 S. Peachtree, Suite 100 Balch Springs, TX 75180 Locke Ventures, Ltd. 14-33039 1700 S. Peachtree, Suite 100 Balch Springs, TX 75180 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Harlin DeWayne Hale (14-33038) Hon. Stacey G. Jernigan (14-33039) Debtors' Counsel: Melissa S. Hayward, Esq. FRANKLIN CHAPMAN SKIERSKI HAYWARD, LLP 10501 N. Central Expry, Ste. 106 Dallas, TX 75231 Tel: 972-755-7104 Fax: 972-755-7114 E-mail: MHayward@FCSHlaw.com Estimated Estimated Assets Liabilities ---------- ----------- Broadband Specialists $1MM-$10MM $1MM-$10MM Locke Ventures $1MM-$10MM $1MM-$10MM The petitions were signed by Gerard M. Locke, Sr., president and CEO. The Debtors did not file a list of their largest unsecured creditors when they filed the petitions. BRUSH CREEK AIRPORT: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The U.S. Trustee for Region 20 filed a statement in U.S. Bankruptcy Court for the District of Colorado on June 9, disclosing that "there were too few unsecured creditors" who are willing to serve as members of the official committee of unsecured creditors in Brush Creek Airport, LLC's Chapter 11 case. Brush Creek Airport, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Col. Case No. 14-14630) in Denver on April 10, 2014. The Debtor has tapped Sender Wasserman Wadsworth, P.C., as counsel. It estimated assets of $10 million to $50 million and debt of $1 million to $10 million. According to the docket, the Debtor's Chapter 11 plan and disclosure statement are due August 8, 2014. BUFFALO LODGE: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Buffalo Lodge and Resorts, Inc. dba Bear's Den Resort 25301 US Highway 59 Grove, Ok 74344 Case No.: 14-11449 Chapter 11 Petition Date: June 28, 2014 Court: United States Bankruptcy Court Northern District of Oklahoma (Tulsa) Judge: Hon. Dana L. Rasure Debtor's Counsel: Ron D. Brown, Esq. THE BROWN LAW FIRM PC 320 S. Boston Ave. Suite 1130 Tulsa, OK 74103 Tel: (918) 585-9500 Fax: (866) 552-4874 E-mail: ron@ronbrownlaw.com Total Assets: $1.51 million Total Liabilities: $2.03 million The petition was signed by Jenny Riley, president. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/oknb14-11449.pdf CDRH PARENT: Moody's Cuts 1st Lien Debt Rating to 'B2' ------------------------------------------------------ Moody's Investors Service downgraded the ratings on CDRH Parent, Inc.'s -- the indirect parent of Healogics, Inc. -- exiting first lien senior secured credit facilities to B2 from B1. CDRH is proposing to raise an additional $20 million in incremental first lien term loan now totaling $420 million and reduce its proposed second lien term loan by the corresponding amount to $200 million. Moody's also affirmed CDRH's B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrently, the Caa2 rating on the second lien term loan is also affirmed. The downgrade of the ratings on the company's senior secured credit facilities reflects the elimination of a layer of loss absorption below the senior secured first lien credit facilities, resulting from the lower amount of second lien term loan, as well as the proposed increase in the amount of first lien debt outstanding. The first lien debt will represent the preponderance of the company's obligations following the proposed transaction. The following is a summary of Moody's ratings actions: CDRH Parent, Inc.: Ratings lowered: $100 million first lien revolver expiring 2019 to B2 (LGD 3) from B1 (LGD 3) $420 million first lien term loan due 2021 to B2 (LGD 3) from B1 (LGD 3) Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $200 million second lien term loan due 2022 at Caa2 (LGD 5) Ratings Rationale CDRH's B3 Corporate Family Rating reflects the company's very weak credit metrics, due to the considerable amount of debt associated with its leveraged buyout and its small revenue base of less than $300 million. Moody's estimates that pro forma debt/EBITDA at 8.0 times, for the LTM period ending March 31, 2014. The rating is also constrained by the small absolute size and the early stage of development of the wound care market, and the company's narrow focus on wound care management. The rating benefits from Healogics' good customer and geographic diversification and modest direct government reimbursement risk. The stable outlook reflects Moody's expectation of relatively stable operating performance given low reimbursement risk and steady pricing over the near-term. It also reflects Moody's view that the company's highly leveraged capital structure is unlikely to improve significantly over the next 12-months. In addition, the rating could be downgrade if pricing or volumes weaken, such that financial performance is impacted, resulting in deterioration in credit metrics. The rating could be downgraded if liquidity deteriorates or if the company's free cash flow turns negative. The likelihood of a rating upgrade is limited in the near-term given the company's very high leverage. However, if the company is able to grow earnings and sustain debt to EBITDA below 6 times, while continuing to generate free cash flow, an upgrade could be considered. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Jacksonville, Fl., Healogics partners with hospitals to establish, staff and run specialized wound care centers that treat patient with chronic, non-healing wounds. CHRYSLER GROUP: Expands Recall Tied to Ignition Switch Issues ------------------------------------------------------------- Joseph B. White, writing for The Wall Street Journal, reported that Fiat Chrysler Automobiles NV is expanding a recall of minivans and sport-utility vehicles to fix ignition switches that could abruptly rotate out of the on position causing a stall and possibly loss of power to the air bags. According to the report, the National Highway Traffic Safety Administration said it has asked Fiat Chrysler's Chrysler Group for more information about the ignition switch problems and the potential for air bags to lose power. The agency said it has also asked Chrysler for more information about ignition switch problems in 2006-2007 Jeep Commander and 2005-2006 Jeep Grand Cherokee models, the report related. Chrysler said it would now recall more than 695,957 Dodge Journey SUVs from the 2009-2010 model years, 2008-2010 Dodge Grand Caravan minivans and 2008-2010 Chrysler Town and Country minivans after receiving 32 customer complaints and 465 warranty claims because the vehicles inadvertently shut off while driving, the report further related. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. CITIZENS DEVELOPMENT: Officially Exited Bankruptcy March 24 ----------------------------------------------------------- Citizens Development Corp. has officially emerged from Chapter 11 protection nearly four years after filing. The company said in a court filing that its Chapter 11 plan of reorganization took effect on March 24, more than two weeks after U.S. Bankruptcy Judge Laura Taylor confirmed the plan. According to the restructuring plan approved on March 6, the plan will be funded by LSM Lender LLC, which has agreed to provide up to $2.5 million in additional financing. The funding will also come from a new value contribution in the amount of $410,000 to be made to the reorganized company by Atlantica; from Citizens Development's cash on hand which is estimated to be about $25,000; from revenue generated from its business operations and other sources. Under the plan, LSM Lender's $7.81 million secured claim will be repaid. The claim, including the $2.5 million loan, will be secured by a "first priority lien" on all assets of Citizens Development subsequent to substantive consolidation. General unsecured creditors will receive a cash distribution equal to 10% of their allowed claims, with the total distribution to all creditors not to exceed $100,000. Meanwhile, the company's equity holders won't receive payments or retain any property. All of the existing equity interests in Citizens Development will be deemed cancelled when the company officially exits bankruptcy. A full-text copy of the restructuring plan is available for free at http://is.gd/xQYTMO About Citizens Development San Marcos, California-based Citizens Development Corp., owns and operates the Lake San Marcos Resort and Country Club located in San Diego County. The Company filed a voluntary petition for relief under Chapter 11 (Bankr. S.D. Cal. Case No. 10-15142) on August 26, 2010. Ron Bender, Esq., and Krikor Meshefejian, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, represent the Debtor. The Debtor estimated its assets and debts at $10 million to $50 million. Chapter 11 petitions were also filed by affiliates LSM Executive Course, LLC (Bankr. S.D. Cal. Case No. 10-07480), and LSM Hotel, LLC (Bankr. S.D. Cal. Case No. 10-13024). Tiffany L. Carroll, Acting U.S. Trustee for Region 15, was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Citizens Development Corp. CITYCENTER HOLDINGS: Moody's Hikes Corporate Family Rating to B2 ---------------------------------------------------------------- Moody's upgraded CityCenter Holdings LLC's Corporate Family Rating to B2 and its Probability of Default Rating to B2-PD. Moody's also upgraded the company's senior secured bank term loan and revolving credit facility to B2. Ratings Rationale The upgrade reflects CityCenter's rising EBITDA as operating conditions on the Las Vegas Strip continue to improve evidenced by higher visitation, rising room rates, limited supply growth, and the company's $150 million prepayment of its senior secured term loan with available cash. As a result, debt/EBITDA will decline to approximately 5.0 times (below Moody's 5.25 times level for an upgrade) as of the last twelve months ended 3/31/2014 from 5.5 times at year-end 2013. Moody's estimates that CityCenter's EBITDA/cash interest will reach 4.0 times by year-end 2014 on lower interest expense due to its late 2013 debt refinancing. Given our stable outlook for operating conditions in Las Vegas, Moody's expect CityCenter can at least sustain debt/EBITDA and EBITDA/cash at current levels. CityCenter's cash flow comfortably covers its interest expense, mandatory debt amortization, and capital spending needs, including costs to demolition the Harmon Tower. Moody's expects the company will build cash with its excess free cash flow pending final settlement of construction litigation. Potential payments in connection this litigation will be substantially covered by MGM Resorts International (B2/stable) pursuant to its construction guaranty. The stable rating outlook reflects Moody's view that CityCenter will continue to benefit from rising room rates and a better mix of convention and group business travel to Las Vegas that will enable the company to maintain strong interest coverage and debt/EBITDA between 4.5 -- 5.0 times. Ratings would be considered for an upgrade if debt/EBITDA declines below 4.5 times, the operating outlook for Las Vegas is stable, supply growth is manageable and liquidity is strong. An upgrade would also require the company to demonstrate a willingness to maintain leverage at lower levels through economic cycles. Ratings would be downgraded if debt/EBITDA increased above 5.75x and appeared likely to remain at elevated levels. Downward rating pressure could also develop if visitation trends and gaming revenues on the Las Strip where to show signs of sustained deterioration. Rating upgraded: Senior secured revolving credit facility to B2 from B3 Senior secured term loan B to B2 from B3 The principal methodology used in this rating was the Global Gaming published in December 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. CityCenter Holdings LLC owns and operates CityCenter, a mixed-use development located on the Las Vegas Strip that opened in December 2009. CityCenter is a joint venture between MGM Resorts International (B2 stable) and Infinity World (a subsidiary of Dubai World, not rated.) MGM is the operating manager. CityCenter generates approximately R1.25 billion in annual net revenue. CLEAR CHANNEL: Scott Hamilton Inks Employment Agreement with Unit ----------------------------------------------------------------- Clear Channel Management Services, Inc., a subsidiary of CC Media Holdings, Inc., entered into an employment agreement with Scott D. Hamilton pursuant to which Mr. Hamilton will serve as the Company's senior vice president, chief accounting officer and assistant secretary. The Agreement commences May 1, 2014, and ends on April 30, 2018, and will be automatically extended for additional two year periods, unless either the Company or Mr. Hamilton gives written notice of non-renewal. Mr. Hamilton will be paid an annual salary of $375,000, subject to overtime eligibility. The Company will reimburse Mr. Hamilton for business expenses, consistent with past practices pursuant to Company policy. Mr. Hamilton has served as senior vice president, chief accounting officer and assistant secretary of CC Media Holdings, Inc., and its subsidiaries Clear Channel Communications, Inc., and Clear Channel Outdoor Holdings, Inc., since April 26, 2010. He also has served as senior vice president, chief accounting officer and assistant secretary of Clear Channel Capital I, LLC, a subsidiary of CCMH, since April 26, 2013. A full-text copy of the Employment Agreement is available at: http://is.gd/J8BLrI About Clear Channel Communications San Antonio, Texas-based Clear Channel Communications, Inc., an indirect subsidiary of CC Media Holdings, Inc. (OTCBB: CCMO), is one of the leading global media and entertainment companies specializing in radio, digital, outdoor, mobile, live events, and on-demand entertainment and information services for local communities and providing premier opportunities for advertisers. CC Media Holdings Inc. -- http://www.ccmediaholdings.com/-- is a global media and entertainment company. Its businesses include radio and outdoor displays. Clear Channel reported a net loss attributable to the Company of $606.88 million in 2013, a net loss attributable to the Company of $424.47 million in 2012 and a net loss attributable to the Company of $302.09 million in 2011. As of Dec. 31, 2013, the Company had $15.09 billion in total assets, $23.79 billion in total liabilities and a $8.69 billion total shareholders' deficit. Bankruptcy Warning "If our and our subsidiaries' cash flows from operations, refinancing sources and other liquidity-generating transactions are insufficient to fund our respective debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, or seek additional capital. We may not be able to take any of these actions, and these actions may not be successful or permit us or our subsidiaries to meet the scheduled debt service obligations. Furthermore, these actions may not be permitted under the terms of existing or future debt agreements." "The ability to refinance the debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of the debt could be at higher interest rates and increase debt service obligations and may require us and our subsidiaries to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. These alternative measures may not be successful and may not permit us or our subsidiaries to meet scheduled debt service obligations. If we or our subsidiaries cannot make scheduled payments on indebtedness, we or our subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result we could be forced into bankruptcy or liquidation," the Company said in its annual report for the year ended Dec. 31, 2013. * * * In May 2013, Moody's Investors Service said that Clear Channel's upsize of the term loan D to $4 billion from $1.5 billion will not impact the Caa1 facility rating assigned. Clear Channel's Corporate Family Rating is unchanged at Caa2. The outlook remains stable. In May, Standard & Poor's Ratings Services also announced that its issue-level rating on San Antonio, Texas-based Clear Channel's senior secured term loan remains unchanged at 'CCC+' following the company's upsize of the loan to $4 billion from $1.5 billion. The rating on parent company CC Media Holdings remains at 'CCC+' with a negative outlook, which reflects the risks surrounding the long- term viability of the company's capital structure. CONCORD CAMERA: Board OKs $0.02 Apiece Shareholder Distribution --------------------------------------------------------------- Concord Camera Corp.'s board of directors approved a liquidating distribution of $0.02 per share to the shareholders of record at the close of business on May 11, 2009, in accordance with the previously announced Plan of Dissolution and Liquidation. In accordance with the Plan of Liquidation, the Company's stock transfer books were closed at the close of business on May 11, 2009, and no transfers of its common stock were recorded after that time. The Company currently anticipates that payment of the liquidating distribution will commence in June 2014 and shareholders of record on the Record Date will receive a communication from the Company's stock transfer agent in July 2014 regarding the distribution. The Company intends to use its remaining funds to complete the Plan of Liquidation and does not anticipate any future distributions. About Concord Camera Headquartered in Hollywood, Florida, Concord Camera Corp. (NASDAQ:LENS) -- http://www.concord-camera.com/-- through its subsidiaries, provides easy-to-use 35mm single-use and traditional film cameras. Concord markets and sells its cameras on a private- label basis and under the POLAROID and POLAROID FUNSHOOTER brands through in-house sales and marketing personnel and independent sales representatives. The POLAROID trademark is owned by Polaroid Corporation and is used by Concord under license from Polaroid. CORINTHIAN COLLEGES: To Sell Heald Campuses ------------------------------------------- Stephanie Gleason, writing for The Wall Street Journal, reported that Corinthian Colleges Inc. announced on June 30 that its board has voted to sell, rather than wind down, all of its Heald schools, a group of 12 campuses that offer associate degrees in subjects like health care and technology. According to the report, the announcement comes a day ahead of Corinthian's due date to submit to the Department of Education a list of schools that it plans to wind down and a list of schools it believes are valuable enough to sell during the next six months. The announcement on June 30 means that none of the Heald schools will be on the list of facilities Corinthian plans to wind-down, the Journal said. CRESTWOOD MIDSTREAM: S&P Assigns 'B' Rating on Class A Units ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has assigned its 'B' issue-level rating to Crestwood Midstream Partners L.P.'s class A preferred units. The rating reflects three notches of subordination to Crestwood's 'BB' corporate credit rating. S&P expects Crestwood to use the proceeds from the offering to fund a portion of its capital spending program and reduce borrowings under its revolving credit facility. The preferred shares issuance does not affect S&P's 'BB' corporate credit rating on the company. The outlook is stable. S&P characterizes the preferred shares as having intermediate equity content under its hybrid security criteria. S&P expects adjusted debt leverage of about 4.5x in 2014 improving to about 4x in 2014. RATINGS LIST Crestwood Midstream Partners L.P. Corporate credit rating BB/Stable/-- New Rating Crestwood Midstream Partners L.P. Class A preferred stock B DANIELS CAPITAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Daniels Capital Corporation 516 Mineral Trace Birmingham, AL 35216 Case No.: 14-02520 Chapter 11 Petition Date: June 29, 2014 Court: United States Bankruptcy Court Northern District of Alabama (Birmingham) Judge: Hon. Tamara O Mitchell Debtor's Counsel: Justin G Williams, Esq. TANNER & GUIN, LLC PO Box 3206 Tuscaloosa, AL 35403-3206 Tel: 205 633-0218 Fax: 205 633-0318 E-mail: jwilliams@tannerguincrowell.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brian McNiell, vice president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/alnb14-02520.pdf DOT RESOURCES: Prepares to File 2013 Annual Financial Statements ---------------------------------------------------------------- DOT Resources Ltd. on June 27 disclosed that the auditors for DOT continue to work on the audit of the Corporation's 2013 Annual Audited Financial Statements, and the Corporation continues to believe that it will be able to file these statements on SEDAR on or before July 2, 2014. In addition, the Corporation is completing its Interim Financial Statements and MD&A for the three months ended March 31, 2014 and anticipates filing these documents on SEDAR -- www.sedar.com -- within the same time period. On April 11, 2014, the Corporation disclosed that it expected a delay in filing its 2013 annual audited financial statements, management's discussion and analysis and CEO and CFO certificates. The Corporation is providing this bi-weekly Default Status Report in accordance with National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"). Once DOT completes these filings, the Corporation will have satisfied its financial filing requirements, and will no longer be issuing any further bi-weekly Default Status Reports under Section 4.4 of National Policy 12-203 - Alternative Information Guidelines ("AIG"). ABOUT DOT DOT -- http://www.dotresourcesltd.com-- is a Canadian corporation focused on exploration and development of its copper properties in central British Columbia. DOT shares trades on the TSX Venture Exchange under the symbol DOT. ELBIT IMAGING: Plaza Plans to Raise EUR20MM From Rights Offering ---------------------------------------------------------------- Elbit Imaging Ltd. disclosed that as part of the debt restructuring process of Plaza Centers N.V., in which the Company holds directly and indirectly approximately 62.5% of the outstanding shares, Plaza is currently proposing to raise capital by means of a rights offering of shares to its existing shareholders for an aggregate amount of EUR 20 million. Elbit Imaging's subsidiary, Elbit Ultrasound (Luxembourg) BV/ S. a' r. l, intends to enter into a Deed of Undertaking, which will be guaranteed by the Company, under which EUL will undertake to exercise EUL's rights to take up EUL's full pro-rata portion under such Rights Offering and to procure that it will subscribe for the unexercised portion of the Rights Offering, at a price per-share of EUR 0.105, all subject to the provisions of the Back Stop Agreement. Concurrently with the Undertaking, EUL intends to enter into a Back Stop Agreement with various affiliates of Davidson Kempner Capital Management LP, pursuant to which DK will undertake to purchase under the Rights Offering, in lieu of EUL, a portion to be determined by EUL, provided that that portion will not be less than the higher of EUR 3 million or the Additional Purchase Amount, and further provided that such Back Stop Undertaking will not exceed EUR 10 million or result in DK and its affiliates directly or indirectly holding shares representing 30 per cent or more of the total voting rights in Plaza, all subject to the terms and conditions therein. Consequently, in the event the Additional Purchase Amount will fall below EUR 3 million, Plaza will be obligated to increase the amount of the Rights Offering such that total price of shares acquired by DK will not be less than EUR 3 million. Consequently, the Company intends to vote at Plaza's upcoming annual general meeting in favor of offering-related matters, including the proposal to authorize Plaza's board of directors, generally and unconditionally, as the competent body to approve the issuance of ordinary shares (including rights to acquire ordinary shares) of Plaza and to restrict or exclude pre-emptive rights upon issuing ordinary shares of Plaza. Corporate Approvals To the Company's best knowledge, certain affiliates of DK hold approximately 5.5% of the outstanding shares of Plaza and approximately 14.3% of the outstanding shares the Company. To the Company's best knowledge, affiliates of York Capital Management Advisors, LLC, hold approximately 19.7% of the outstanding shares of the Company and are major bondholders of Plaza. Since each of DK and York might be deemed as having a personal interest in the Rights Offering and the related transactions, albeit divergent interests, and they hold in the aggregate more than 25% of the outstanding shares of the Company while no other shareholder of the Company holds more than 50% of the outstanding shares of the Company, the Israeli Companies Law requires that the transactions be approved by the shareholders of the Company by a special majority, unless an exemption applies. As a condition to an exemption set forth in the regulations under the Israeli Companies Law, the Company's audit committee and board of directors have determined that the participation of EUL in the Rights Offering, including the entry into the Undertaking and the Back Stop Agreement are in the ordinary course of the Company's business, are on market terms, and are for the benefit of the Company. Notwithstanding those approvals, holders of 1% or more of the Company's outstanding shares or voting rights in the aggregate may notify the Company in writing, no later than July 7 , 2014, that they object to approval of the Rights Offering, the Undertaking and the Back Stop Agreement through the exemption and request a shareholder vote regarding the transactions. That request must include appropriate evidence of share ownership in the Company. In the event that such a request is duly submitted, approval of the transactions will require approval by the shareholders of the Company in which either (i) a majority of shares voted on the matter by shareholders who do not have a personal interest in the matter are voted in favor or (ii) the total number of shares voted against the matter by shareholders who do not have a personal interest in the matter does not exceed two percent of the Company's outstanding shares. About Elbit Imaging Ltd. Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF) hold investments in real estate and medical companies. The Company, through its subsidiaries, also develops shopping and entertainment centers in Central Europe and invests in and manages hotels. Since February 2013, Elbit has intensively endeavored to come to an arrangement with its creditors. Elbit has said it has been hanging by a thread for more than five months. It has encountered cash flow difficulties and this burdens its day to day activities, and it certainly cannot make the necessary investments to improve its assets. In light of the arrangement proceedings, and according to the demands of most of the bondholders, as well as an agreement that was signed on March 19, 2013, between Elbit and the Trustees of six out of eight series of bonds, Elbit is prohibited, inter alia, from paying off its debts to the financial creditors - - and as a result a petition to liquidate Elbit was filed, and Bank Hapoalim has declared its debts immediately payable, threatening to realize pledges that were given to the Bank on material assets of the Company -- and Elbit undertook not to sell material assets of the Company and not to perform any transaction that is not during its ordinary course of business without giving an advance notice to the trustees. Accountant Rony Elroy has been appointed as expert for examining the debt arrangement in the Company. In July 2013, Elbit Imaging's controlling shareholders, Europe- Israel MMS Ltd. and Mr. Mordechay Zisser, notified the Company that the Tel Aviv District Court has appointed Adv. Giroa Erdinast as a receiver with regards to the ordinary shares of the Company held by Europe Israel securing Europe Israel's obligations under its loan agreement with Bank Hapoalim B.M. The judgment stated that the Receiver is not authorized to sell the Company's shares at this stage. Following a request of Europe-Israel, the Court also delayed any action to be taken with regards to the sale of those shares for a period of 60 days. Europe Israel and Mr. Zisser have also notified the Company that they utterly reject the Bank's claims and intend to appeal the Court's ruling. Elbit Imaging reported a loss of NIS1.56 billion on NIS360.59 million of total revenues for the year ended Dec. 31, 2013, as compared with a loss of NIS483.98 million on NIS418.48 million of total revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed NIS4.56 billion in total assets, NIS4.97 billion in total liabilities and a NIS408.63 million shareholders' deficit. Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu, in Tel-Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. ELIZABETH ARDEN: Buyer Withdrawal No Impact on Moody's Ba3 Rating ----------------------------------------------------------------- Moody's Investor Service stated that Elizabeth Arden, Inc.'s (RDEN) recently announced restructuring and cost savings program and LG Household and Health Care Ltd.'s (LGHHC) statement that it is no longer interested in pursuing an acquisition of RDEN do not affect RDEN's Ba3 rating or developing outlook. This is because RDEN's continuing strategic alternatives evaluation could lead to transactions that are either positive or negative for creditors. LGHHC's withdrawal as a potential strategic buyer is credit negative, as through this partnership RDEN could have become a part of a larger entity that had a potential to accelerate RDEN's international growth. The restructuring and cost savings program announced earlier this week is a potential positive, but was necessary given its recent business slowdown. The principal methodology used in this rating was Global Packaged Goods published in June 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. RDEN, headquartered in Miami, FL, is a global beauty products company with a broad portfolio of prestige fragrance, skin care and cosmetic brands. RDEN markets more than 100 company brands and distributes an additional 300 brands. Revenue for the 12 months ended March 2014 is estimated to be approximately $1.2 billion. ENERGY CORP: Moody's Affirms 'B3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service changed Stone Energy Corporation's (Stone) rating outlook to positive from stable. Moody's also affirmed Stone's B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating (PDR), B3 senior unsecured notes rating and SGL-2 Speculative Grade Liquidity Rating. "The positive outlook incorporates Moody's view that Stone's ongoing development efforts in deepwater Gulf of Mexico (GoM) and the Marcellus/Utica Shale plays in the Appalachia will add diversity and durability to its asset portfolio and provide a strong platform for future growth," commented Sajjad Alam, Moody's Analyst. "Following an equity offering in May 2014 and upsizing of its borrowing base revolving credit facility on June 24, 2014, Stone has good liquidity and the balance sheet flexibility to support its planned portfolio transformation through 2015." Ratings Rationale The B2 CFR reflects Stone's increasing production and reserves, a more balanced portfolio of growth projects, diversified footprint in onshore, shallow water and deepwater basins, significant liquids production (about 45%) and low financial leverage relative to similarly rated peers. Stone's ratings are constrained by its limited scale relative to higher rated E&P companies, still significant exposure to the GoM, and the capital, execution and operational risks related to its growth in the deepwater. Stone has good liquidity which is reflected in Moody's SGL-2 rating. Stone's funds from operations, cash balance and revolver availability should fully cover capital expenditures and working capital requirements through mid-2015. Pro forma for the equity offering, the company had roughly $400 million of cash and $480 million of availability under its $500 million borrowing base revolver. The revolver matures in July 2019. There is ample headroom under the financial covenants governing the credit facility and Stone should have unimpeded access to the revolver through 2015. The SGL rating is tempered by the exposure of the borrowing base to re-determinations in the event of weaker commodity prices or inadequate reserve replacement and the company's planned outspending of cash flow. Moody's would consider upgrading Stone's CFR to B1 if the company can achieve higher production in both onshore and deepwater locations and improve cash on cash returns. More specifically, Moody's will look for deepwater wells to come on-stream along with good execution in the Marcellus leading to a production level of 50,000 boe/d and a sustainable leveraged full-cycle ratio above 1.5x. The achievement of these targets while maintaining its present leverage metrics could lead to a ratings upgrade. A leveraging transaction will most likely be the catalyst for a potential negative rating action. A downgrade could result if Stone's debt to average daily production and debt to PD reserves exceeds $30,000 per boe and $15 per boe, respectively. Issuer: Stone Energy Corporation Outlook change: Outlook changed to Positive from Stable Affirmations: Corporate Family Rating, Affirm B2 Probability of Default Rating, Affirm B2-PD Senior Unsecured Regular Bond/Debenture, Affirm B3 (LGD4, 66%) Senior Unsecured Shelf, Affirm (P)B3 Speculative Grade Liquidity Rating, Affirm SGL-2 The principal methodology used in this rating was the Global Independent Exploration and Production Industry Methodology published in December 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. Stone Energy Corporation is a Lafayette, Louisiana based public E&P company with primary producing assets in the conventional shelf and deep waters of the GOM, and the Marcellus Shale in northern Appalachia. ENERGY FUTURE: $1.9 Billion Loan Draws Competition, Opposition -------------------------------------------------------------- Peg Brickley, writing for The Wall Street Journal, reported that Energy Future Holdings Corp. unveiled changes to a $1.9 billion bankruptcy loan, including improvements in its fees and terms, that the Texas power company hopes will garner it court approval over opposition on multiple fronts. According to the report, unsecured creditors and several groups of bondholders say the loan, even improved, trades away value on the cheap, providing some investors "an extraordinary investment opportunity," as creditor lawyer James Peck put it, while stripping others of their rights. Dallas-based Energy Future, previously known as TXU, says the loan will slash its interest costs, and allow it to settle big premium- payment claims from bondholders, the Journal said. Competition to get into the financing deal allowed the company to cut fees and interest on the loan, the Journal cited, Energy Future lawyer Stephen Hessler as saying. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. FALCON STEEL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Falcon Steel Company 14-42585 4201 Old Denton Road Haltom City, TX 76117 New Falcon Steel, LLC 14-42586 4201 Old Denton Road Haltom City, TX 76117 Type of Business: Engaged in fabricating and galvanizing structural steel for a variety of customers across the United States. Chapter 11 Petition Date: June 29, 2014 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Hon. Michael D. Lynn Debtors' Counsel: Lynda L. Lankford, Esq. FORSHEY & PROSTOK, LLP 777 Main Street, Ste. 1290 Fort Worth, TX 76102 Tel: (817) 878-2022 Fax: (817) 877-4151 E-mail: llankford@forsheyprostok.com - and - Jeff P. Prostok, Esq. FORSHEY & PROSTOK, LLP 777 Main St., Suite 1290 Ft. Worth, TX 76102 Tel: 817-877-8855 E-mail: jpp@forsheyprostok.com Estimated Estimated Assets Liabilities ----------- ----------- Falcon Steel Company $10MM-$50MM $10MM-$50MM New Falcon Steel $1MM-$10MM $1MM-$10MM The petitions were signed by David Smith, CEO. List of Falcon Steel's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aztec Mfg. Partnership, Ltd. Trade Debt $194,080 All-Pro Fasteners, Inc. Trade Debt $185,818 Red Ball Oxygen Trade Debt $139,673 Focus North America Trade Debt $114,450 Willbanks Metals Inc. Trade Debt $104,738 CMC Steel Texas Trade Debt $98,709 US Zinc Trade Debt $88,585 Bull Moose Tube Co. Trade Debt $66,736 Steel & Pipe Supply Co., Inc. Trade Debt $62,197 Superior Supply & Steel Trade Debt $57,636 Cargill Incorporated Trade Debt $55,521 Service Steel Warehouse, LP Trade Debt $50,282 Independence Tube Trade Debt $46,640 Gerdau Ameristeel US Inc. Trade Debt $39,089 Kloeckner Metals Corp. - CAT Trade Debt $34,882 TXU Energy Trade Debt $21,526 UMR - Stop Loss Trade Debt $20,891 J & M Steel Company Trade Debt $20,732 Friedman Industries, Inc. Trade Debt $17,819 JDM Steel Trade Debt $17,401 FANNIE MAE & FREDDIE MAC: First-Year Litigation Update ------------------------------------------------------ Twenty-two lawsuits filed in the past year accuse (a) Federal National Mortgage Association, commonly known as Fannie Mae; (b) Federal Home Loan Mortgage Corporation, commonly called Freddie Mac; (c) the Federal Housing Finance Administration, in its role as Fannie and Freddie's Conservator; and (d) the United States Department of the Treasury, in its role as Fannie and Freddie's rescue financier; of entering into an illegal Net Worth Sweep Agreement in 2012 that requires Fannie and Freddie to delivery virtually all of their earnings to the U.S. Treasury until the end of time. As the first of those twenty-two lawsuits approaches its one-year anniversary in the Federal court system, editors for the Troubled Company Reporter and Class Action Reporter have compiled this summary to help their subscribers identify the cases, summarize the Plaintiffs' causes of action, relate what the Plaintiffs' say they want, share the current status of each case over the past year, and mark their calendars with the dates of upcoming events before Judges Sweeney, Lamberth, Pratt and Cooke. A handy chart in Portable Document Format displaying the litigation summary presented below is available for free at http://bankrupt.com/gselitigationsummary201407.pdf The five important upcoming events in these cases are: 07/10/2014 -- Hearing on Plaintiff's Motion to Compel production of Administrative Record in Continental Western v. FHFA, Case No. 14-cv-00042 (S.D. Iowa) 07/11/2014 -- Proposed protective order due in Fairholme v. USA, Case No. 13-465 (Ct. Fed. Cl.) 07/15/2014 -- Joint Status Report due in Fairholme v. USA, Case No. 13-465 (Ct. Fed. Cl.), re 07/16/2014 Status Conference 07/28/2014 -- Government's Answer due in Reid v. USA, Case No. 14-152 (Ct. Fed. Cl.) 08/29/2014 -- Deadline for Government to answer, move or otherwise plead in Arrowood v. USA, Case No. 13-698 (Ct. Fed. Cl.) ________________________________________________________ Significant Lawsuits Pending Against Fannie Mae and Freddie Mac Updated June 29, 2014 (Cases listed in alphabetical order by Plaintiff's name) ________________________________________________________ Lawsuit No. 1 ------------- American European Insurance Company v. Federal National Mortgage Association, et al., Case No. 13-cv-01169 (D.C. filed July 30, 2013) Plaintiff's Lawyers: Michael G. McLellan L. Kendall Satterfield Elizabeth R. Makris FINKELSTEIN THOMPSON LLP - and - Jeremy A. Lieberman Lesley F. Portnoy Patrick V. Dahlstrom POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP Plaintiff's Causes of Action: 1-1: Breach of contract 1-1: Breach of the implied covenant of good faith and fair dealing Class action certification and appointment as Class Representative What the Plaintiffs say they want the Court to do: 1-A: Awarding Plaintiffs and the Class the amount of damages they sustained as a result of defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing 1-B: Granting appropriate equitable and injunctive relief to remedy defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 2 ------------- American European Insurance Company v. USA, Case No. 13-496 (Ct. Fed. Cl. filed July 19, 2013) Plaintiff's Lawyers: Jeremy A. Lieberman Lesley F. Portnoy Patrick V. Dahlstrom POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP - and - Charles J. Piven BROWER PIVEN Plaintiff's Causes of Action: 2-1: Just compensation under the Fifth Amendment What the Plaintiffs say they want the Court to do: 2-A: Class certification and appointment as Class Representative 2-B: Awarding Plaintiff and the Class just compensation for the Government's taking of their property What's happened in court in the past year: [Consolidated with Cacciapalle, et al. v. USA, Case No. 13-466 (Ct. Fed. Cl. filed July 10, 2013) (Sweeney, J.)] The next scheduled event in this case: [None at press time] Lawsuit No. 3 ------------- Arrowood Indemnity Co., et al. v. Federal National Mortgage Association, et al., Case No. 13-cv-1439 (D.C. filed Sept. 12, 2013) (Lamberth, J.) Plaintiff's Lawyers: Drew W. Marrocco Michael H. Barr Richard M. Zuckerman Sandra D. Hauser DENTONS US LLP Plaintiffs' Causes of Action: 3-1: Against Treasury and Secretary Lew for violation of the Administrative Procedure Act: (i) Treasury's conduct exceeds its statutory authority under HERA and (ii) Treasury's conduct was arbitrary and capricious 3-2: Against FHFA and Acting Director DeMarco for violation of the Administrative Procedure Act: (i) The FHFA's conduct exceeds its statutory authority under HERA and (ii) the FHFA's conduct was arbitrary and capricious 3-3: Against Fannie Mae, Freddie Mac, and FHFA, as Conservator, for breach of contract and breach of the implied covenant of good faith and fair dealing Declaring that the Third Amendment, and its adoption, are not in accordance with HERA What the Plaintiffs say they want the Court to do: 3-A: Vacating and setting aside the Third Amendment . . . and providing that all payments made by Fannie and Freddie under the Third Amendment, in excess of the amounts which would have been due as dividends absent the Third Amendment, be treated as a redemption of Senior Preferred Stock 3-B: Enjoining Defendants from implementing, applying, or taking any action whatsoever pursuant to the Third Amendment 3-C: If injunctive relief is not granted, awarding Arrowood damages [for the] par value of their Junior Preferred Stock What's happened in court in the past year: * Treasury's Motion to Dismiss Filed (Doc. 35) * Fannie Mae's Motion to Dismiss Filed (Doc. 36) * Plaintiffs' Objection and Cross-Motion for Summary Judgment Filed (Docs. 44 and 45) * Treasury's Reply Filed (Docs. 48 and 49) * Fannie Mae's Reply Filed (Docs. 50 and 51) * Plaintiff's Further Reply (Doc. 54) * Ready for hearing on pre-trial summary judgment motions, with a written decision by Judge Lamberth to follow The next scheduled event in this case: [None at press time] Lawsuit No. 4 ------------- Arrowood Indemnity Co., et al. v. USA, Case No. 13-698 (Ct. Fed. Cl. filed Sept. 18, 2013) (Sweeney, J.) Plaintiffs' Lawyers: Drew W. Marrocco Michael H. Barr Richard M. Zuckerman Sandra Hauser DENTONS US LLP Plaintiffs' Causes of Action: 4-1: Against the United States of America for just compensation under the Fifth Amendment What the Plaintiffs say they want the Court to do: 4-A: Awarding Arrowood Parties just compensation for the Government's taking of their property What's happened in court in the past year: * Requests by the Government for more time to answer or respond. See Docs. 19, 16, 15, 12, 11, 10, 9 and 8. * Awaiting Government's answer or response to Arrowood's Complaint The next scheduled event in this case: 08/29/2014 for Government to answer, move or otherwise plead. See Doc. 21. Lawsuit No. 5 ------------- Borodkin, et al. v. Federal National Mortgage Association, et al., Case No. 13-cv-01443 (D.C. filed Sept. 20, 2013) Plaintiffs' Lawyers: Craig L. Briskin MEHRI & SKALET, PLLC - and - Barbara J. Hart Thomas A. Skelton LOWEY DANNENBERG COHEN & HART Plaintiffs' Causes of Action: 5-1: Breach of contract 5-2: Breach of the implied covenant of good faith and fair dealing What the Plaintiffs say they want the Court to do: 5-A: Class action certification and appointment as Class Representative 5-B: Awarding Plaintiffs and the Class the amount of damages they sustained as a result of defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing 5-C: Granting appropriate equitable and injunctive relief to remedy defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 6 ------------- Cacciapelle, et al. v. Federal National Mortgage Association, et al., Case No. 13-cv-01149 (D.C. filed July 29, 2013) (Lamberth, J.) Plaintiffs' Lawyers: Hamish P.M. Hume BOIES, SCHILLER & FLEXNER LLP - and - Lee D. Rudy Eric L. Zagar KESSLER TOPAZ MELTZER & CHECK, LLP Plaintiffs' Causes of Action: 6-1: Breach of contract 6-2: Breach of the implied covenant of good faith and fair dealing What the Plaintiffs say they want the Court to do: 6-A: Class action certification and appointment as Class Representative 6-B: Awarding Plaintiffs and the Class the amount of damages they sustained as a result of defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing 6-C: Granting appropriate equitable and injunctive relief to remedy defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 7 ------------- Cacciapalle, et al. v. USA, Case No. 13-466 (Ct. Fed. Cl. filed July 10, 2013) (Sweeney, J.) Plaintiffs' Lawyers: Hamish P.M. Hume BOIES, SCHILLER & FLEXNER LLP - and - Lee D. Rudy Eric L. Zagar KESSLER TOPAZ MELTZER & CHECK, LLP Plaintiffs' Causes of Action: 7-1: Against the United States of America for just compensation under the Fifth Amendment What the Plaintiffs say they want the Court to do: 7-A: Class action certification and appointment as Class Representative 7-B: Awarding just compensation for the Government's taking of their property What's happened in court in the past year: * Government's Motion to Dismiss Filed (Doc. 42) * Briefing regarding the motion to dismiss is stayed pending the conclusion of jurisdictional discovery in Fairholme. Once the parties in Fairholme file a postdiscovery joint status report, the court will issue an order in this case regarding further proceedings. See Doc. 46. The next scheduled event in this case: [None at press time] Lawsuit No. 8 ------------- Cane v. Federal Housing Finance Agency, et al., Case No. 13-cv- 01184 (D.C. filed Aug. 1, 2013) Plaintiff's Lawyers: David L. Wales BERNSTEIN LITOWITZ BERGER & GROSSMANN, LLP Plaintiff's Causes of Action: 8-1: Breach of contract against FHFA for (i) modification of the certificates and series of stock without shareholders' consent and (ii) elimination of dividends 8-2: Anticipatory breach of contract against FHFA for repudiation of shareholders' right to any eventual liquidation surplus 8-3 Breach of the implied covenant of good faith and fair dealing against FHFA 8-4: Violation of the Administrative Procedure Act because Treasury and FHFA's conduct (i) exceeded their statutory authority and (ii) was arbitrary and capricious 8-5: No just compensation under the Fifth Amendment What the Plaintiffs say they want the Court to do: 8-A: Class action certification and appointment as Class Representative 8-B: Compensatory damages to be determined at trial 8-C: Just compensation under the Fifth Amendment for Treasury and FHFA's taking of Plaintiffs' property 8-D: Declaring that the Third Amendment, and its adoption, violate HERA 8-E: Vacating and setting aside the Third Amendment 8-F: Enjoining Defendants from implementing, applying, or taking any action whatsoever pursuant to the Third Amendment, and from any further violations of HERA What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 9 ------------- Continental Western Insurance Company v. The Federal Housing Finance Agency, et al., Case No. 14-cv-00042 (S.D. Iowa filed Feb. 5, 2014) (Pratt, J.) Plaintiff's Lawyers: Charles J. Cooper Vincent J. Colatriano David H. Thompson Peter A. Patterson COOPER & KIRK, PLLC - and - Matthew G. Whitaker Matt M. Dummermuth Kendra L. Mills Arnold WHITAKER HAGENOW & GUSTOFF, LLP Plaintiff's Causes of Action: 9-1: FHFA's conduct exceeds its statutory authority as conservator 9-2: Violation of the Administrative Procedure Act: FHFA's conduct was arbitrary and capricious 9-3: Treasury's conduct exceeded its statutory authority 9-4: Violation of the Administrative Procedure Act: Treasury's conduct was arbitrary and capricious 9-5: Breach of contract 9-6: Breach of implied covenant of good faith and fair dealing 9-7: Breach of fiduciary duty What the Plaintiff says it wants the Court to do: 9-A: Declaring that the Net Worth Sweep and its adoption are [illegal] 9-B: Declaring that the . . . dividends to Treasury . . . violated HERA 9-C: Declaring that Treasury's post-2009 payments to Fannie and Freddie . . . violate HERA 9-D: Vacating and setting aside the Net Worth Sweep, the dividends, and Treasury's post-2009 payments 9-E: Reducing the liquidation preference of the Government Stock 9-F: Enjoining further dividend payments or tinkering with the accounting 9-G: Awarding Plaintiff damages resulting from FHFA's breaches What's happened in court in the past year: * FHFA's Motion to Dismiss Filed (Doc. 23) * Treasury's Motion to Dismiss Filed (Doc. 24) * Briefing suspended pending resolution of discovery dispute * Ready for hearing and decision on Plaintiff's Motion to Compel Production of Administrative Record (Doc. 31), Treasury's Response (Doc. 32), FHFA's Response (Doc. 33), and Plaintiffs' Reply (Doc. 36). The next scheduled event in this case: 07/10/2014 -- Hearing on Plaintiff's Motion to Compel. See Doc. 38 Lawsuit No. 10 -------------- Dennis v. Federal Housing Finance Agency, et al., Case No. 13-cv- 01208 (D.C. filed Aug 5, 2013) (Lamberth, J.) Plaintiff's Lawyers: Reuben A. Guttman Geoffrey C. Jarvis GRANT & EISENHOFER Plaintiff's Causes of Action: 10-1: Breach of contract 10-2: Breach of the implied covenant of good faith and fair dealing 10-3: Breach of fiduciary duty What the Plaintiff says it wants the Court to do: 10-A: Class action certification, appointment as Class Representative, and confirmation that this a proper derivative action 10-B: Declaring that defendants breached the certificates of designation of the Series S & T Preferred Stock. . . . 10-C: Awarding compensatory damages 10-D: Declaring that the Net Worth Sweep was unfair to Fannie Mae, did not further any valid business purpose, did not reflect a good faith business judgment as to what was in the best interests of Fannie Mae or its shareholders, and constituted waste and a gross abuse of discretion 10-E: Declaring that, through the Net Worth Sweep, defendants breached their respective fiduciary duties to Fannie Mae 10-F: Awarding compensatory damages and disgorgement in favor of Fannie Mae against defendants as a result of their breach of their fiduciary duties. . . . 10-G: Granting equitable relief, including rescission of the Net Worth Sweep What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 11 -------------- Dennis v. USA, Case No. 13-542 (Ct. Fed. Cl. filed Aug. 5, 2013) (Sweeney, J.) Plaintiff's Lawyers: Jay W. Eisenhofer Geoffrey C. Jarvis GRANT & EISENHOFER P.A. Plaintiff's Causes of Action: 11-1: Violation of the Takings Clause What the Plaintiffs say they want the Court to do: 11-A: Class action certification 11-B: Awarding Plaintiff and the other Class members just compensation for the unconstitutional taking of their property, in an amount to be proven at trial. . . . What's happened in court in the past year: [Consolidated with Cacciapelle v. United States, Case No. 13-672 (Ct. Fed. Cl.)] The next scheduled event in this case: [None at press time] Lawsuit No. 12 -------------- Fairholme Funds, Inc., et al. v. The United States, Case No. 13- 465 (Ct. Fed. Cl. filed July 9, 2013) (Sweeney, J.) Plaintiffs' Lawyers: Charles C. Cooper Vincent J. Colatriano David H. Thompson Peter A. Patterson COOPER & KIRK, PLLC Plaintiffs' Causes of Action: 12-1: Just compensation under the Fifth Amendment for the taking of private property for public use What the Plaintiffs say they want the Court to do: 12-A: Awarding compensation under the Fifth Amendment for the Government's taking of their property What's happened in court in the past year: * Government's Motion to Dismiss Filed (Doc. 20) * [Briefing suspended pending resolution of discovery dispute] * Dispute over terms of Government's request for a protective order (Doc. 49) arising from Court granting (Doc. 32) Plaintiffs' Discovery Motion (Doc. 22) and overruling Government's Objection (Doc. 30). Hearing on Protective Order Held 06/19/2014 (Doc. 62). Document production to occur in waves. The next scheduled events in this case: * 07/11/2014 -- Proposed protective order due * 07/15/2014 -- Joint Status Report due re 07/16/2014 Status Conference Lawsuit No. 13 -------------- Fairholme Funds, Inc., et al. v. Federal Housing Finance Agency, et al., Case No. 13-cv-1053 (D.C. filed July 10, 2013) (Lamberth, J.) Plaintiffs' Lawyers: Charles C. Cooper Vincent J. Colatriano David H. Thompson Peter A. Patterson COOPER & KIRK, PLLC Plaintiffs' Causes of Action: 13-1: FHFA's and Treasury's conduct exceeds their statutory authority 13-2: Violation of the Administrative Procedure Act: FHFA's and Treasury's conduct was arbitrary and capricious 13-3: Breach of contract against FHFA as Conservator of Fannie and Freddie 13-4: Breach of implied covenant of good faith and fair dealing against FHFA as Conservator of Fannie and Freddie 13-5: Breach of fiduciary duty against FHFA as Conservator of Fannie and Freddie: Claim for equitable and declaratory relief What the Plaintiffs say they want the Court to do: 13-A: Declaring that the Net Worth Sweep, and its adoption, violate HERA 13-B: Declaring that, by entering the Net Worth Sweep, FHFA breached Fannie's and Freddie's contracts with Plaintiffs and the covenant of good faith and fair dealing implicit in those contracts 13-C: Declaring that . . . FHFA violated its fiduciary duty to Plaintiffs 13-D: Vacating and setting aside the Net Worth Sweep 13-E: [Directing] Treasury to return to FHFA all dividend payments made pursuant to the Net Worth Sweep or, alternatively, recharacterizing a portion of the payments as partial redemption of Government Stock rather than dividends * * * What's happened in court in the past year: * Treasury's Motion to Dismiss Filed (Doc. 27) and FHFA's Motion to Dismiss Filed (Doc. 28) * Response Opposing Motions to Dismiss (Docs. 38 and 39) * Treasury's Reply (Doc. 43) and FHFA's Reply (Doc. 45) ------- * Cross-Motion for Summary Judgment (Doc. 40) * Treasury's Objection to Cross-Motion (Doc. 44) and FHFA's Objection to Cross-Motion (Doc. 46) * Reply (Doc. 51) * Ready for hearing and decision on Pre-Trial Summary Judgment proceedings * As of June 5, 2014, hearing postponed until further order of the Court. The next scheduled event in this case: [None at press time] Lawsuit No. 14 -------------- Fisher, et al. v. USA, Case No. 13-608 (Ct. Fed. Cl. filed Aug. 26, 2013) (Sweeney, J.) Plaintiffs' Lawyers: Noah M. Schubert Robert C. Schubert Miranda P. Kolbe SCHUBERT JONCKHEER & KOLBE LLP - and - Edward F. Haber SHAPIRO HABER & URMY LLP Plaintiffs' Causes of Action: 14-1: Derivatively, on behalf of FNMA, unlawful taking without just compensation under the Fifth Amendment to the U.S. Constitution What the Plaintiffs say they want the Court to do: 14-A: Derivatively, on behalf of FNMA, finding that the United States has unlawfully taken the private property of Fannie Mae for public use without just compensation in violation of the Takings Clause of the Fifth Amendment to the U.S. Constitution 14-B: Derivatively, on behalf of FNMA, determining and awarding Fannie Mae just compensation for the Government's taking of its property What's happened in court in the past year: * Motion to Dismiss Filed (Doc. 20) * Briefing regarding the motion to dismiss is stayed pending the conclusion of jurisdictional discovery in Fairholme. Once the parties in Fairholme file a post-discovery joint status report, the court will issue an order in this case regarding further proceedings. See Doc. 25. The next scheduled event in this case: [None at press time] Lawsuit No. 15 -------------- In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations, Misc. Action No. 13-mc-1288 (D.C. filed Nov. 18, 2013) (Lamberth, J.) Plaintiffs' Lawyers: David R. Kaplan Blair A. Nicholas John Rizio-Hamilton David L. Wales BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP - and - Reuben A. Guttman Geoffrey C. Jarvis GRANT & EISENHOFER - and - Hamish P.M. Hume BOIES, SCHILLER & FLEXNER LLP - and - Lee D. Rudy Eric L. Zagar KESSLER TOPAZ MELTZER & CHECK, LLP Plaintiffs' Causes of Action: 15-1: Breach of contract 15-2: Breach of implied covenant of good faith and fair dealing 15-3: Breach of fiduciary duty 15-4: No just compensation under the Fifth Amendment What the Plaintiffs say they want the Court to do: 15-A: Class action status and certification 15-B: Declaring that this action is a proper derivative action and that pre-suit demand is excused 15-C: Declaring that the Third Amendment [is both] entirely [and] intrinsically [un]fair to Fannie Mae, did not further any valid business purpose of Fannie Mae, did not reflect a good faith business judgment as to what was in the best interests of Fannie Mae or its shareholders, and constituted waste and a gross abuse of discretion * * * 15-D: Awarding compensatory damages and disgorgement in favor of Fannie Mae and just compensation for property taken * * * What's happened in court in the past year: * Treasury's Motion to Dismiss Filed (Doc. 19) and Fannie Mae & FHFA's Motion to Dismiss Filed (Doc. 20) * Plaintiffs' Objection to Motions to Dismiss (Doc. 33) * Fannie Mae & FHFA's Reply (Doc. 36) * Treasury's Reply (Doc. 38) * Ready for hearing and decision on Pre-Trial Summary Judgment proceedings The next scheduled event in this case: [None at press time] Lawsuit No. 16 -------------- Liao v. Lew, et al., Case No. 13-cv-01094 (D.C. filed July 16, 2013) Plaintiffs' Lawyers: Michael G. McLellan L. Kendall Satterfield Elizabeth R. Makris FINKELSTEIN THOMPSON LLP - and - Lionel Z. Glancy Michael M. Goldberg Ex Kano S. Sams II GLANCY BINKOW & GOLDBERG LLP Plaintiffs' Causes of Action: 16-1: Illegal taking and/or extraction in violation of the U.S. Constitution 16-2: Violation of the Administrative Procedures Act: the Treasury's conduct exceeds its statutory authority under HERA 16-3: Violation of the Administrative Procedures Act: the Treasury's conduct was arbitrary and capricious 16-4: Violation of the Administrative Procedures Act: the FHFA's conduct exceeds its statutory authority under HERA 16-5: Violation of the Administrative Procedures Act: the FHFA's conduct was arbitrary and capricious What the Plaintiffs say they want the Court to do: 16-A: Determining that this is a proper class action and certifying Plaintiff as a Class Representative. . . . 16-B: Finding that Defendants have taken and/or illegally exacted the private property of Plaintiff and the Class in violation of the Due Process and Takings Clauses of the United States Constitution 16-C: Declaring that the Third Amendment, and its adoption, [violate] HERA . . . ; and that the Treasury and the FHFA acted arbitrarily and capriciously . . . by executing the Third Amendment 16-D: Vacating and setting aside the Third Amendment including its provisions that sweep the full amount of the Companies' net worth to the Treasury, that prevent redemption of the Government Preferred Stock, and that accelerate the Companies' dissolution 16-E: Enjoining the Treasury [and the FHFA] . . . from implementing, applying, or taking any action whatsoever pursuant to the Third Amendment What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 17 -------------- Marneu Holdings Co., et al. v. Federal Housing Finance Agency, et al., Case No. 13-cv-01421 (D.C. filed Sept. 18, 2013) Plaintiffs' Lawyers: Geoffrey C. Jarvis GRANT & EISENHOFER P.A. - and - Jeremy A. Lieberman Lesley F. Portnoy Patrick V. Dahlstrom POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP Plaintiffs' Causes of Action: 17-1: Breach of Contract 17-2: Breach of the implied covenant of good faith and fair dealing 17-3: Violation of the APA -- Treasury's and FHFA's conduct exceeds its statutory authority 17-4: Violation of the APA -- Treasury's and FHFA's conduct was arbitrary and capricious 17-5: Breach of fiduciary duty What the Plaintiffs say they want the Court to do: 17-A: Class certification 17-B: [D]amages [for] defendants' breaches of contract and breaches of the implied covenant of good faith and fair dealing 17-C: [R]escission of the Third Amendment 17-D: Declaring that the Third Amendment was [un]fair to Fannie Mae and Freddie Mac, [and ha]d no[] valid business purpose . . . , and constituted waste and a gross abuse of discretion. 17-E: Declaring that the Third Amendment [violates] HERA; and that Treasury and FHFA acted arbitrarily and capriciously . . . by executing the Third Amendment; 17-F: Declaring that . . . the FHFA and the Treasury breached their . . . fiduciary duties to Fannie . . . and Freddie. . . . 17-G: Compensatory damages and disgorgement in favor of Fannie Mae and Freddie Mac against . . . FHFA and the Treasury, jointly and severally . . . in an amount to be proven at trial, including interest thereon What's happened in court in the past year: [Consolidated into Misc. Action No. 13-mc-1288 (D.C.)] The next scheduled event in this case: [None at press time] Lawsuit No. 18 -------------- Perry Capital LLC v. [Treasury Sec'y] Jacob J. Lew, [Acting FHFA Director] Edward DeMarco, The Department of the Treasury, and The Federal Housing Finance Agency, Case No. 13-cv-1025 (D.C. filed July 7, 2013) (Lamberth, J.) Plaintiffs' Lawyers: Theodore B. Olson Douglas R. Cox Matthew D. McGill Mikesh Jindal Derek S. Lyons Janet Weiss GIBSON, DUNN & CRUTCHER LLP Plaintiffs' Causes of Action: 18-1: Violations of the Administrative Procedure Act: (a) Treasury's conduct exceeds its statutory authority under HERA, (b) Treasury's conduct was arbitrary and capricious, (c) the FHFA's conduct exceeds its statutory authority under HERA, and (d) the FHFA's conduct was arbitrary and capricious What the Plaintiffs say they want the Court to do: 18-A: Declaring that the Third Amendment [is illegal] 18-B: Vacating and setting aside the Third Amendment, including [the terms] that prevent redemption of the Government Preferred Stock, and that accelerate the Companies' dissolution 18-C: Enjoining Treasury . . . from implementing . . . the Third Amendment 18-D: Enjoining the FHFA . . . from implementing . . . the Third Amendment What's happened in court in the past year: * Treasury's Motion to Dismiss Filed (Doc. 31) and FHFA and Fannie's Motion to Dismiss Filed (Doc. 32) * Cross-Motion for Summary Judgment on Administrative Procedure Act Claims (Doc. 37) * Plaintiffs' Opposition to Motions to Dismiss (Doc. 38) * Treasury's Omnibus Reply (Doc. 40) and FHFA and Fannie's Omnibus Replies (Doc. 42, 43 and 44 ) * Perry's Reply (Doc. 47) * Ready for hearing and decision on Pre-Trial Summary Judgment proceedings * As of June 5, 2014, hearing postponed until further order of the Court. The next scheduled event in this case: [None at press time] Lawsuit No. 19 -------------- Reid v. USA, Case No. 14-152 (Ct. Fed. Cl. filed Feb. 26, 2014) (Sweeney, J.) Plaintiff's Lawyers: Robert C. Schubert Noah M. Schubert Miranda P. Kolbe SCHUBERT JONCKHEER & KOLBE LLP - and - Edward F. Haber SHAPIRO HABER & URMY LLP Plaintiff's Causes of Action: 19-1: Derivatively on behalf of FNMA, unlawful taking without just compensation under the Fifth Amendment to the U.S. Constitution What the Plaintiff says it wants the Court to do: 19-A: Derivatively on behalf of FNMA, finding that the United States has unlawfully taken the private property of Fannie Mae for public use without just compensation in violation of the Takings Clause of the Fifth Amendment to the U.S. Constitution 19-B: Derivatively on behalf of FNMA, determining and awarding Fannie Mae just compensation for the Government's taking of its property What's happened in court in the past year: Awaiting answer The next scheduled event in this case: 07/28/2014 -- Answer due Lawsuit No. 20 -------------- Samuels, et al. v. Federal Housing Finance Agency, et al., Case No. 13-cv-22399 (S.D. Fla. filed July 9, 2013) (Cooke, J.) Plaintiffs' Lawyers: Charles Elsesser, Jr. Meena Jagannath Betsy Havens COMMUNITY JUSTICE PROJECT FLORIDA LEGAL SERVICES, INC. Plaintiffs' Causes of Action: 20-1: Violation of the Administrative Procedures Act What the Plaintiffs say they want the Court to do: 20-A: Vacate and set aside as null and void FHFA's decision to indefinitely suspend payments by Fannie Mae and Freddie Mac to the Housing Trust Fund 20-B: Declare that Federal Defendants have violated the Administrative Procedure Act by acting in an arbitrary and capricious manner. . . . 20-C: Order the FHFA to instruct Fannie Mae and Freddie Mac that Federal Defendants' challenged decisions to withhold payments from the Housing Trust Fund were null and void and that Fannie Mae and Freddie Mac must proceed as if those decisions had never taken place What's happened in court in the past year: * Amended Complaint Filed (Doc. 30) * Motion to Dismiss Filed (Doc. 41) * Response Filed (Doc. 52) * Reply Filed (Doc. 61) * Discovery battle underway * Mediation, pending discovery resolution, extended to Aug. 31, 2104. See Doc. 79. The next scheduled event in this case: [None at press time] Lawsuit No. 21 -------------- Shipmon v. USA, Case No. 13-672 (Ct. Fed. Cl. filed Sept. 12, 2013) Plaintiff's Lawyers: Noah M. Schubert Robert C. Schubert Miranda P. Kolbe SCHUBERT JONCKHEER & KOLBE LLP - and - Edward F. Haber SHAPIRO HABER & URMY LLP Plaintiff's Causes of Action: 21-1: Derivatively on behalf of FNMA, unlawful taking without just compensation under the Fifth Amendment to the U.S. Constitution What the Plaintiff says it wants the Court to do: 21-A: Derivatively on behalf of FNMA, finding that the United States has unlawfully taken the private property of Fannie Mae for public use without just compensation in violation of the Takings Clause of the Fifth Amendment to the U.S. Constitution 21-B: Determining and awarding Fannie Mae just compensation for the Government's taking of its property What's happened in court in the past year: [Consolidated with Fisher v. United States, Case No. 13-608 (Ct. Fed. Cl.)] The next scheduled event in this case: [None at press time] Lawsuit No. 22 -------------- Washington Federal, et al. v. USA, Case No. 13-385 (Ct. Fed. Cl. filed June 10, 2013) (Sweeney, J.) Plaintiffs' Lawyers: Steve W. Berman HAGENS BERMAN SOBOL SHAPIRO LLP Plaintiffs' Causes of Action: 22-1: Illegal taking and/or exaction without just compensation in violation of the U.S. Constitution Class action status and certification What the Plaintiffs say they want the Court to do: 22-A: Finding that the Defendant has taken and/or illegally exacted Plaintiffs' and the Classes' private property in violation of the Due Process and Takings Clauses of the Constitution 22-B: Determining and awarding Plaintiffs and the Classes damages suffered by them by virtue of the Defendant's taking and/or illegal exaction in the amount of $41 billion, or some other amount to be determined at trial What's happened in court in the past year: * Government's Motion to Dismiss Filed (Doc. 31) * Briefing regarding the motion to dismiss is stayed pending the conclusion of jurisdictional discovery in Fairholme. Once the parties in Fairholme file a postdiscovery joint status report, the court will issue an order in this case regarding further proceedings. See Doc. 44. The next scheduled event in this case: [None at press time] FIRST AMERICAN PAYMENT: Moody's Hikes 1st Lien Debt Rating to Ba3 ----------------------------------------------------------------- Moody's Investors Service affirmed the First American Payment Systems, L.P.'s ("FAPS") B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default Rating ("PDR"), and Caa1 Senior Secured Second Lien debt rating, and raised FAPS's Senior Secured First Lien debt rating to Ba3 from B1. The outlook is stable. Upgrades: Issuer: First American Payment Systems, L.P. Senior Secured First Lien Bank Credit Facility Oct 12, 2018 (Term Loan), Upgraded to Ba3 (LGD3) from B1 (LGD3) Senior Secured First Lien Bank Credit Facility Oct 12, 2017 (Revolver), Upgraded to Ba3 (LGD3) from B1 (LGD3) Outlook Actions: Issuer: First American Payment Systems, L.P. Outlook, Remains Stable Affirmations: Issuer: First American Payment Systems, L.P. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured Second Lien Bank Credit Facility Apr 12, 2019 (Term Loan), Affirmed Caa1 (LGD5) Ratings Rationale Over the past several quarters, FAPS has been using Free Cash Flow ("FCF") to repay debt by $10 million to $15 million per quarter, well in excess of the $625,000 quarterly mandatory amortization on the Senior Secured First Lien debt. Since Moody's believe that FAPS will continue to use FCF for debt reduction, foregoing returns to shareholders, Moody's anticipate a steady improvement in FAPS's financial leverage, with FCF to debt (Moody's adjusted) improving into the upper single digits and debt to EBITDA (Moody's adjusted) declining toward 6x over the next year. Since these repayments have reduced the First Lien debt by nearly 10% over the past three quarters, and Moody's expect FAPS to continue repaying this debt with FCF, Moody's expect that FAPS's capital structure will be increasingly composed of debt subordinated to the First Lien debt. Consequently, this increasing cushion of subordinated debt has improved the anticipated recovery of this class of debt, resulting in a rating upgrade to Ba3 from B1. The B2 CFR reflects FAPS's high leverage at about 6.3x EBITDA (Moody's adjusted), its relatively small market share, and its exposure to smaller sized customers, which have a higher risk of attrition and chargeback liabilities. Moreover, given the private equity ownership, Moody's anticipate that debt to EBITDA (Moody's standard adjustments) will remain moderate to high, varying between 5x and 6x over the intermediate term, due to periodic debt-funded equity distributions. Nevertheless, the rating is supported by FAPS's focus on debt reduction and the consistent FCF, which reflects the combination of a recurring transaction- based revenue stream from multi-year contracts with merchants and modest capital expenditure requirements. The stable outlook reflects our expectation that FAPS will generate flat to low single digit revenue growth over the next 12 to 18 months. Although Moody's expect EBITDA to be flat over the period, as the margin benefit from the Durbin Amendment reduction in debit interchange charges decreases following contract renewals, Moody's expect that a return to revenue growth will produce increasing EBITDA. Thus, over the intermediate term, Moody's expect EBITDA and FCF to increase as FAPS benefits from increased scale and FAPS uses FCF to repay debt, reducing the interest expense burden over time. The rating could be upgraded if FAPS profitably expands its market share and maintains its conservative financial policy of foregoing equity distributions and aggressively reducing debt. Thus, Moody's would expect that the ratio of debt to EBITDA (Moody's adjusted) would remain below 4.5x and FCF to debt (Moody's adjusted) would remain at least in the low teens percent for an extended period. The rating could be downgraded if FAPS were to experience a weakening competitive position, as evidenced by increased customer churn and declining margins. The rating could also be downgraded if FAPS fails to reduce debt such that Moody's believe that debt to EBITDA (Moody's standard adjustments) will remain above 6.5x, or FCF to debt will remain below the mid single digits, for an extended period. First American Payment Systems (FAPS), based in Fort Worth, Texas, is a merchant acquirer providing credit, debit and other electronic payment processing services for merchants in Unites States and Canada. FAPS is owned by private equity firm Lindsay Goldberg. 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. FRANKLIN PIERCE: Moody's Cuts Rating on 1998/2004 Bonds to Caa3 --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Franklin Pierce University's ("FPU") Series 1998 and 2004 bonds to Caa3 from B3. The rating for the Series 1994 bonds was also lowered to Caa3 from Caa1. The ratings' outlook is negative. The New Hampshire Health and Higher Education Facilities Authority is the issuer of all the bonds. Rating Rationale The downgrade of the ratings is primarily due to heightened risk of bond payment default by the university as soon as October 1, 2014. Recent failure of FPU to make a required monthly deposit to the debt service fund, an event of default under the loan agreement and bond indenture, is the latest sign of very weak liquidity and fundamental solvency concerns. The Caa3 ratings and negative outlook reflect a significant increased probability of default and expectation of possible loss to the bondholders given the missed interest payment, relatively modest debt service reserve on only two bond series, and an expectation that FPU's operations and liquidity profile will remain weak. In addition to the missed interest reserve payment to the trustee, the ratings incorporate the effective subordination of a portion of previously pledged gross receipts by the granting of a first priority security interest in other assets to a third party bank. Outlook The negative outlook reflects the probability of a further downgrade due to the increased likelihood of a bond default by the issuer, per Moody's definition upon expiration of the forbearance agreement and Moody's estimate of modest recovery for the bondholders. What Could Make The Rating Go Up While positive rating action is not anticipated, upward movement could result from a debt restructuring combined with a dramatic and sustained improvement in operations and liquidity. What Could Make The Rating Go Down The rating could be downgraded should FPU fail to make its principal and semi-annual interest payment on October 1, 2014 or file for bankruptcy. Non-renewal of the line of credit by the bank could also trigger a downgrade. Principal Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. GENERAL MOTORS: Unveils Recall Compensation Plan ------------------------------------------------ Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co.'s compensation plan for victims of 2.6 million defective small cars would offer payments for any accidents in which the air bags in the cars failed to deploy, and may offer increased payouts to victims who accepted out-of-court settlements before the auto maker recalled the vehicles. According to the report, the nation's largest auto maker would provide compensation checks ranging from $20,000 to several million dollars to any driver, passenger, pedestrian or occupant of another vehicle who can show they were hurt in a crash involving cars GM recalled this year for faulty ignition switches. A death would automatically be awarded $1 million for pain and suffering above any other payments, the Journal said. The program has no overall dollar limit, but a key condition is that the claimants must show via police or other reports that the vehicle's air bags didn't deploy in the crash, the Journal added. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: To Recall 8.45-Mil. More Vehicles in North America ------------------------------------------------------------------ Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co. recalled another 8.5 million vehicles on June 30, including more than 8 million for ignition-switch defects, and said it knew of three deaths in accidents involving the affected cars. According to the report, the nation's largest auto maker also boosted its projected charge to earnings for recalls in the current quarter by $500 million to $1.2 billion. The June 30 action boosts to about 29 million cars and trucks that GM has recalled in North America this year?a number greater than the company's combined U.S. sales for the years 2005 through 2013, the Journal said. 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. GOLDEN STATE MALL: Banquet Hall Deposit Claimants to Get In Line ---------------------------------------------------------------- Jose Gaspar, writing for KBAK and KBFX's Eyewitness News, reported that dozens of people who paid huge deposits to rent a banquet hall facility at Golden State Mall on F Street and Golden State Highway in Bakersfield, Calif., may be victims of collateral damage. According to the report, Thomas Brill, attorney at the law firm Young-Nichols, said people owed money by Golden State Mall will have to get in line to get paid. "Because they're considered a general creditor, meaning they get in line with all the people who they owe, such as electricity bills, to the mortgage and whatever bills they have," said Brill, the report added. Bottom line, people might never get paid back, said Mr. Brill. Eyewitness News has tried numerous times to contact mall owner George Molayem who reportedly lives in the Los Angeles area. But so far, Mr. Molayem has refused to speak with Eyewitness News. Golden State Mall, LLC, based in Los Angeles, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 14-13941) on March 2, 2014. Anthony J Napolitano, Esq., at Buchalter Nemer, P.C., served as counsel, according to the petition. The Debtor listed $1 million to $10 million in both assets and liabilities. The petition was signed by George Molayem, manager and sole member. GRANITE BROADCASTING: S&P Affirms B CCR & Rates Term Loan BB- ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its corporate credit rating on New York-based television broadcaster Granite Broadcasting Corp. at 'B'. The outlook is stable. At the same time, S&P revised its recovery rating on the company's senior secured term loan B to '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of default, from '3' (50%-70% recovery expectation). S&P subsequently raised its issue-level rating on this debt to 'BB-' from 'B'. Granite closed the sale of its Detroit MyNetwork TV and Buffalo ABC stations to E.W. Scripps for $110 million on June 16. The company has used the proceeds to repay a significant portion of its senior secured term loan B. The rating action reflects the lower amount of debt at the senior secured level of the capital structure, based on the value of the remaining stations. S&P's "weak" business risk profile assessment on Granite reflects the company's small scale and its lower quality station group compared with rated peers. Granite's portfolio consists of an independent TV station in the San Francisco market and major network-affiliated stations in several smaller TV markets. The company lacks critical mass compared with competitors and draws low news ratings in many of its markets, resulting in a lower EBITDA margin. Granite operates 11 TV stations in one large and six small and midsize TV markets. Its large-market station in San Francisco is not affiliated with a major broadcast network and does not have strong news rankings, which are disadvantages in attracting political ad revenue and generating retransmission fees. Although Granite's stations reach 4% of U.S. TV households, its audience reach declines to less than 2% excluding the San Francisco station. The company made progress rebuilding its EBITDA since emerging from bankruptcy in 2007, largely through cost cuts and by increasing its percentage of revenue from retransmission fees. In February 2014, Granite entered into an agreement with E.W. Scripps to sell two of its TV stations for $110 million and nine of its stations to Quincy Broadcasting for an undisclosed amount. The E.W. Scripps deal closed on June 16, 2014, and Granite used the proceeds from the sale to repay debt. S&P expects Granite to use the proceeds from the sale to Quincy to repay its remaining debt, at which point it will withdraw the corporate credit rating and issue-level ratings. The transaction is awaiting regulatory approval and is expected to close sometime in 2014. S&P's assessment of Granite's financial risk profile as "highly leveraged" is based on its expectation that, pro forma for the sale of the two station to E.W. Scripps and related term loan B reduction, adjusted leverage will remain above 5.5x over the intermediate term. As of March 31, 2014, pro forma adjusted debt to trailing-eight-quarter average EBITDA was about 5.8x and adjusted EBITDA interest coverage was about 1.5x. If the remaining station sales are completed, S&P expects Granite to repay its outstanding debt with the sale proceeds. HAYDEL PROPERTIES: Default Cues BancorpSouth Bank to Foreclose -------------------------------------------------------------- BancorpSouth Bank notified the Bankruptcy Court that Haydel Properties, LP, and Gerald W. Haydel were in default to the Court order dated April 8, 2014. BancorpSouth Bank said that the Debtors failed to make timely payments to the bank as stated in the order. BancorpSouth Bank also notified the Court that it intends to seek relief from the automatic stay and undertake appropriate foreclosure proceedings or other action. BancorpSouth Bank is represented by: Laura Henderson-Courtney, Esq. UNDERWOOD LAW FIRM PLLC 340 Edgewood Terrace Drive Jackson, MS 39206 Tel: (601) 326-5562 Fax: (601)362-5673 E-mail: lhc@underwoodlawfirm.com About Haydel Properties LP Haydel Properties LP, based in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Christy Pickering serves as accountant. The Debtor disclosed $11.7 million in assets and $6.8 million in liabilities as of the Chapter 11 filing. The Debtor is represented by Robert Gambrell, Esq., at Gambrell & Associates, PLLC, and Patrick A. Sheehan, at Sheehan & Johnson, PLLC. The Debtor won confirmation of its First Amended Plan of Reorganization. The Plan was conceived by management as an alternative to the more drastic measures available for restructuring the Company's debt, such as total liquidation of equipment and properties. The Debtor will continue to operate the rental business and market numerous parcels of real property. HELEN KELLER: Moody's Lowers Rating on Series 2003 Bonds to Ba3 --------------------------------------------------------------- Moody's Investors Service has downgraded to Ba3 from Ba2 the rating assigned to Helen Keller Hospital's Series 2003 bonds issued through Colbert County Northwest Alabama Healthcare Authority. The outlook is negative. Summary Ratings Rationale The downgrade to Ba3 is attributable to deterioration in operating performance and cash flow through six months fiscal year (FY) 2014. The Ba3 rating further reflects several fundamental challenges Helen Keller faces, including the organization's small size and recent revenue declines, a challenging payer mix with one insurer comprising the majority of commercial insurance, and presence of sizeable competing hospital in the service area. Strengths * Helen Keller's unrestricted cash balances have reached a recent high of $17 million. Although cash has grown primarily as a result of low capital spending, the higher liquidity is positive in light of the organization's decline in operating margins. * The hospital reports a steady medical staff with no significant departures and expects to grow the medical staff somewhat through recruitment efforts. * A new CEO and CFO will bring a new focus to the organization. Challenges * Operating performance weakened through six months FY 2014, with the operating cash flow margin falling to a very low 2.3% resulting in weak debt service coverage. * If operating performance does not improve in the second half of the year, Helen Keller will not meet its debt service coverage covenant of 1.25x in FY 2014. * Following very strong patient volume and revenue growth in FY 2013, both volumes and operating revenue declined in FY 2014. * There is a sizeable competitor in the service area, for-profit Regional Care Partners, which has committed to building a replacement hospital in the service area. * The payor mix is challenging, with one insurer dominating the commercial market, which effectively limits annual rate increases Helen Keller can receive. * Unfunded pension liability remains high relative to the organization's size and debt load. OUTLOOK The negative outlook reflects our view that operating performance is likely to remain variable and that debt coverage and liquidity metrics will remain weak. What Could Make The Rating Go UP The rating could be upgraded if Helen Keller is able to eliminate operating losses and generate sufficient and sustainable cash flow, over a multi-year period, in order to build liquidity and increase capital spending. What Could Make The Rating Go DOWN The rating could be downgraded if operating performance and cash flow do not improve over the near term to levels that allow for stronger debt coverage metrics and growth in liquidity in combination with increased capital spending. The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. HGIM CORP: S&P Affirms 'B' CCR on Continued Stable Performance -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on New Orleans-based HGIM Corp. (Harvey Gulf). The outlook is stable. "Our affirmation reflects Harvey Gulf's 'weak' business risk profile, 'highly leveraged' financial risk profile, and 'adequate' liquidity," said Standard & Poor's credit analyst Marc Bromberg. The company operates in the marine services business, focusing on support for offshore drilling rigs. S&P considers marine services to be highly competitive, with relatively few barriers to entry and the potential for overcapacity. To differentiate itself from its peers, Harvey Gulf maintains a highly sophisticated fleet based on deadweight capacity, feet length, and dynamically positioned technology. In addition, its fleet is typically newer than its competitors', with an average age of approximately five years. As a result, S&P believes that over the next several years, the company should experience healthy demand relative to its competition, particularly in the more demanding deepwater and ultra-deepwater market (typically between 1,000 and 12,000 feet), where day rates tend to be higher than in the shallow water. However, a longer term risk is that there is likely to be substantially more high-specification OSVs that will enter the Gulf of Mexico and compete directly against Harvey Gulf's existing fleet. This presents the risk that the company's day rates and utilization could come under pressure if drilling activity in the Gulf of Mexico does not meet our expectations. The business profile is constrained by the company's geographic concentration in the Gulf of Mexico. The region has historically represented a majority of its revenues, and S&P expects that a vast majority of future revenues and cash flows will continue to come from the Gulf. Activity levels have been improving since the end of the Macondo-related moratorium, and S&P expects deepwater rig additions for the remainder of this year. Nevertheless, there is a risk, in S&P's view, that incoming capacity could potentially weigh on day rates and utilization. Moreover, a risk of the geographic concentration is that the company could have difficulty moving its vessels elsewhere should drilling or exploration activities decrease for a sustained period in the region. The stable outlook incorporates S&P's expectation that it is unlikely either to raise or lower the rating on HGIM (Harvey Gulf) over the next 12 months. S&P believes that the company's contract coverage provides stability should day rates weaken. S&P could lower the rating if it foresees that liquidity is unlikely to remain adequate. S&P believes this scenario could occur if the company is unable to recontract its OSVs near its forecasted day rates or if it experiences unplanned downtime on its vessels. An upgrade will depend on sustained FFO to debt of more than 20%. HILEX POLY: Moody's Assigns 'B2' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service assigned ratings to Hilex Poly Co. LLC, including a B2 corporate family rating and a B2-PD probability of default rating. Instrument ratings are detailed below. The ratings outlook is stable. Proceeds from the new debt raised will be used to fund the acquisition of Duro Bag Manufacturing Co. ("Duro"), to repay existing debt and to pay fees and expenses associated with the transaction. On June 11, 2014, Hilex, a manufacturer of plastic bags and film products, entered into an agreement to acquire Duro, a manufacturer of paper bags. The transaction is supported by a total pro forma capitalization of $860 million (including fees and expenses), including a $130 million equity investment by Wind Point Partners (Wind Point) and other co-investors. The transaction is expected to close in the second half of 2014. Moody's took the following rating actions: Hilex Poly Co. LLC -- assigned corporate family rating, B2 -- assigned probability of default rating, B2-PD -- assigned $85 million senior secured revolving credit facility due June 2019, B2 (LGD 3) -- assigned $470 senior secured term loan A due June 2021, B2 (LGD 3) The ratings outlook is stable. The ratings are subject to the receipt and review of the final documentation. Ratings Rationale The B2 Corporate Family Rating reflects the company's weak operating margins, largely commoditized product line and high customer concentration. The rating also reflects the expiration of anti-dumping tariffs in the bag segment in 2015 and the potential for further anti-bag legislation. Hilex operates in a competitive and fragmented industry and growth in the company's primary end market (retail bags) is low. Hilex has a high percentage of business that is not under contract. In addition, the length of most contracts is less than two years and costs other than raw materials are not passed through. Approximately 40% of pro forma sales are retail bags and the segment is expected to continue to have low growth. The top 10 customers generate approximately one- third of pro forma revenue and Wal-Mart generates approximately 11%. Sales and profits could suffer if the current tariffs on imported products were eliminated or if further anti-bag legislation were introduced. Strengths in the company's profile include its leading position in the plastic bag segment, long-standing relationships with blue- chip companies and some exposure to stable end markets. Strengths in the company's profile also include some exposure to certain faster growing segments, a strong position in both plastic and paper bags and a significant recycling operation. The company also benefits from ongoing anti-dumping tariffs, which are reviewed every five years, on imported bags. Approximately 80% of the company's volumes in the plastic segment have monthly raw material cost pass-through mechanisms. Hilex has some exposure to more stable food related end markets and the faster growing natural and organic grocery segment. The stable ratings outlook reflects an expectation that the integration of Duro will proceed smoothly and that there will be little change in the anti-dumping tariffs and anti-bag legislation over the horizon. The ratings could be downgraded if credit metrics or liquidity deteriorate or if the anti-dumping tariffs are not renewed in 2015. The ratings could also be downgraded if there is a deterioration in the operating and competitive environment. Specifically, the ratings could be downgraded if FCF to Debt falls below 3%, EBIT margin fails to improve above 3.5%, EBIT/Interest fails to improve above 1 times and debt to EBITDA increases above 6.5 times. The ratings could also be downgraded if there is a significant debt financed acquisition or another dividend recapitalization. The ratings could be upgraded if there is a sustainable improvement in credit metrics within the context of a stable operating and competitive environment. Any upgrade would also be contingent upon the maintenance of good liquidity. Specifically, the ratings could be upgraded if the EBIT margin increases to the high single digits, EBIT to Gross Interest Expense increases above 2.0 times, free cash flow to debt increases to the high single digits, and Debt to EBITDA declines below 5.0 times. An upgrade would also be contingent upon the maintenance of adequate liquidity and stability in the operating and competitive environment. The principal methodology used in this rating was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers published in June 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. Headquartered in Hartsville, South Carolina, Hilex Poly Co LLC is a manufacturer of plastic bag and film products, focusing primarily on high density polyethylene (HDPE) film products and related services. Hilex has been a portfolio company of private equity firm Wind Point Partners since 2012. Revenues for the twelve months ended March 31, 2014 were approximately $705 million (proforma approximately $1.3 billion). HMK MATTRESS: Moody's Affirms B3 CFR & Changes Outlook to Neg. -------------------------------------------------------------- Moody's Investors Service changed HMK Mattress Holdings, LLC's outlook to negative from stable. Concurrently, Moody's affirmed the company's B3 Corporate Family Rating, B3-PD Probability of Default Rating and B2 rating of the senior secured term loan. The change in outlook to negative reflects the risk that the company' liquidity may weaken and lease-adjusted leverage may remain over 7 times in the near term. During Q1 2014, Sleepy's EBITDA declined significantly, resulting in a tighter than historical high-teens leverage covenant cushion. The company's results have been hurt by one-time factors (severe winter weather particularly in Sleepy's core regions, line-up changes, and the run-out of an unsuccessful advertising campaign), as well as a mix shift towards lower-end mattresses, sluggish traffic, and intense competitive pressures. "If earnings remain pressured by weak consumer spending trends and the company does not pay down debt, covenant cushion will tighten," said Moody's analyst Raya Sokolyanska. "In addition, Sleepy's maximum leverage covenant steps down in December 2014." Moody's expects new mattress rollouts, increased advertising by Tempur Sealy, and pent-up demand for housing-related goods to provide support for earnings in 2014. However, Sleepy's faces difficult compares with 2013 post-hurricane Sandy sales, and results remain dependent on successful execution in a highly competitive environment. Rating Actions: Issuer: HMK Mattress Holdings, LLC Corporate family rating, affirmed at B3 Probability of default rating, affirmed at B3-PD Outlook, changed to negative from stable Issuer: HMK Intermediate Holdings, LLC $170 million senior secured term loan due 2018 affirmed at B2 (LGD 3) Ratings Rationale The B3 corporate family rating reflects Sleepy's high lease- adjusted leverage, modest scale, narrow geographic footprint as a regionally concentrated retail chain, and limited product diversification. Its susceptibility to cyclical factors that impact discretionary consumer spending is also a rating constraint. The rating also reflects the company's minority sponsorship by a private equity firm and its relatively aggressive financial policies. At the same time, the rating incorporates the company's strong brand recognition and competitive position within its regions of operation, adequate liquidity, and pent-up demand for housing-related consumer durables, including bedding products. The negative outlook reflects the risk that liquidity may weaken and leverage may remain elevated in the near term. The ratings could be downgraded if Moody's come to expect same store sales to remain negative, if margins materially decline or liquidity erodes for any reason, including weaker covenant cushion. Quantitatively, ratings could be downgraded if debt/EBITDA is sustained above 7.0 times, or EBITA/interest expense approaches 1.0 times. The outlook could revert to stable if leverage improves sufficiently to ensure good near-term covenant cushion despite step-downs. An upgrade is unlikely in the near term given the company's modest scale, aggressive financial policies and negative ratings outlook. The ratings could be upgraded if Moody's come to expect Sleepy's to sustain leverage below 5.5 times Moody's- adjusted debt/EBITDA and coverage above 1.5 times EBITA/interest expense, while profitably growing the store base. HMK Mattress Holdings, LLC ("Sleepy's"), headquartered in Hicksville, NY, is a specialty mattress retailer, operating approximately 950 locations predominantly in the Northeast and Mid-Atlantic of the United States. Store banners include Sleepy's and Mattress Discounters. It also delivers mattresses through its websites including sleepys.com, 1800mattress.com and mattress.com. The company provides wholesale fulfillment services for amazon.com and sears.com and sells wholesale to hotels and colleges. Revenues are approximately $1 billion. Sleepy's is family- and management- owned, and private equity firm Calera Capital has a minority stake in the company. 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. HUDBAY MINERALS: Moody's Affirms B3 CFR & Senior Unsecured Rating ----------------------------------------------------------------- Moody's Investors Service affirmed HudBay Minerals Inc.'s B3 corporate family rating (CFR), B3-PD probability of default rating and B3 senior unsecured notes ratings, raised the company's speculative grade liquidity rating to SGL-3 from SGL-4 and changed the company's ratings outlook to positive from negative. Ratings Rationale The rating actions are driven by Moody's view that HudBay now has sufficient liquidity to fund the remaining capital expenditures at its current growth projects through mid-2015 with an acceptable liquidity buffer to absorb unexpected cost overruns. As well, with the construction of its US$1.7 billion Constancia copper mine in Peru estimated to be over 80% complete (based on capital commitments), and the operation significantly de-risked, Moody's expects that cash flows from commercial production by mid-2015 will allow HudBay to rapidly de-lever to a level that could support a higher rating. HudBay's recent agreement to acquire Augusta Resources Corporation for $555 million is not a material factor in the rating action as the transaction will be entirely funded with equity (including $165 million in primary equity proceeds HudBay received in Q1/14 as an offset to Augusta's US$100 million in debt, near term operating costs and fees). As well, Moody's does not expect HudBay will spend a material amount of cash to develop Augusta's Rosemont copper project until 2016, when Constancia is in full operation. HudBay's B3 corporate family rating is driven by its modest scale, concentration of current production from a couple mines in Canada and execution risks associated with finalizing development and ramping-up output at both Constancia and Lalor, an existing zinc and copper mine in Canada that HudBay is expanding at a cost of $440 million. While lower production and higher costs at its flagship 777 copper and zinc mine in Manitoba have suppressed cash flows over the past couple of years, Moody's expects HudBay's Manitoba operations will remain relatively low-cost and that increasing production at Lalor and Reed (a small copper mine that reached commercial production in Q1/14) should support a base of cash flow until Constancia begins commercial production in Q2/15. Once accomplished, Moody's expects the company's financial leverage (Debt/ EBITDA) will decline from in excess of 10x in 2014 towards 3.5x by the end of 2015, with the potential for ongoing improvement beyond that timeframe. HudBay's liquidity is adequate (SGL-3). HudBay's expected liquidity sources over the next 12 months total $1.2 billion, compared to uses of $900 million, leaving $300 million available for unexpected cost overruns at its projects. Sources include $764 million of cash (Q1/14), $50 million in cash from operations over the next year (Moody's estimate), US$135 million of committed streaming proceeds to be received, $50 million of Peruvian tax refunds, US$50 million in available equipment loans at Constancia and a new US$150 million unused revolver for Constancia (expires 2018). As well, should HudBay complete the equity funded acquisition of Augusta, its Rosemont property would be a potential source of additional liquidity in a stress scenario. Uses include $800 million in capital expenditures, largely to complete its projects, and possibly, US$100 million to retire debt at Augusta. Moody's does not include the US$100 million bridge loan HudBay received to refinance Augusta's debt in its liquidity analysis as that commitment is due within one year. Moody's loss given default methodology indicates HudBay's senior unsecured rating should be rated one notch below its B3 CFR based on about $350 million in prior ranking secured debt commitments, including HudBay's $100 million revolver, and Constancia's US$150 million revolving credit facility and US$100 million term loan. Moody's has instead assigned a B3 rating to the senior unsecured debt in order to reduce the volatility in the instrument rating considering the potential for credit quality improvement denoted by the positive ratings outlook. The positive outlook reflects Moody's view that HudBay's CFR could move higher in the next 12 to 18 months once Constancia commences commercial production. HudBay's CFR could be upgraded if it brings Constancia into commercial production both on-time and on-budget and Moody's gains confidence that the company will sustain leverage towards 4.5x. HudBay's CFR could be downgraded if the company experiences material cost overruns or delays in ramping up Constancia, if the company's liquidity becomes inadequate, or if Moody's expects the company's leverage to remain over 7x. The principal methodology used in this rating was the Global Mining Industry published in May 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. HudBay is a Canadian mining company that mines copper, zinc, and precious metals. The company's primary operating asset is the underground 777 mine located in Flin Flon, Manitoba. It is currently developing a $1.7 billion copper mine in Peru (Constancia), expanding a copper, gold and zinc mine in Manitoba (Lalor) and recently entered into an agreement to acquire Augusta Resources Corporation, which owns Rosemont, a copper project in Arizona. HudBay's current annual revenues are roughly $500 million. IBCS MINING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- IBCS Mining, Inc. 14-61215 944 Glen Wood Station Ln. Ste 101 Charlottesville, VA 22901 IBCS Mining, Inc., Kentucky Division 14-61216 944 Glen Wood Station Lane, Suite 101 Charlottesville, VA 22901 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Western District of Virginia (Lynchburg) Judge: Hon. Rebecca B. Connelly Debtors' Counsel: Robert S Westermann, Esq. HIRSCHLER FLEISCHER, P.C. 2100 East Cary Street The Edgeworth Building Richmond, VA 23223 Tel: 804-771-5610 Fax: 804-644-0957 E-mail: rwestermann@hf-law.com Estimated Estimated Assets Liabilities ---------- ----------- IBCS Mining $10MM-$50MM $10MM-$50MM IBCS Mining, Inc., Kentucky $0-$50,000 $1MM-$10MM The petitions were signed by Edmund Scarborough, president. List of IBCS Mining, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Crushers & Screens LLC $154,978 BB&T Bank BB&T $108,523 Contracting Enterprise, Inc. $234,029 Duane Morris, LLP $65,840 Edmund and Yvonne Scarborough $64,361 Environmental Design Consultants $57,175 First Citizens Bank $51,762 Holland & Knight LLP $393,588 PO Box 864084 Orlando, FL 32886-4084 J&S Consulting, LLC $86,579 James River Equipment $98,351 John Deere Financial $721,139 PO Box 4450 Carol Stream, IL 60197-4450 KDS Contracting $170,067 Michie Hamlett $65,420 MR Coal Marketing & Trading, LLC $97,131 Norshield Security Products, LLC $290,582 c/o Richard E Hagerty 1850 Towers Crescent Plaza, Ste 500 Vienna, VA 22182 People's United Equipment Finance $148,212 Powerscreen Mid-Atlantic $56,282 Robert Crick Law Firm PLLC $55,600 Summit Engineering, Inc. $63,227 Willis of Tennessee, Inc. $76,444 List of IBCS Mining, Inc., Kentucky Division's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Appalachian States $67 Art's Rental Equipment & Supply Inc. $84,826 BB&T $108,523 BB&T Judgment $1,019,015 c/o Britteny N. Jenkins P.O. Box 90 Roanoke, VA 24002 BB&T Judgment $341,341 c/o Britteny N. Jenkins P.O. Box 90 Roanoke, VA 24002 CT Corporation $551 First Citizens Bank $51,762 John Deere Construction & Forestry $49,716 John Deere Construction & Forestry Equipment $2,876,994 c/o Elizabeth Lee Thompson 250 W. Main St, Ste 2300 Lexington, KY 40507 John Deere Financial $721,139 PO Box 4450 Carol Stream, IL 60197-4450 Lowe's Business Account $5,734 Norman Mullins $13,262 Norman Mullins $628,628 348 Ascue Road Cedar Bluff, VA 24609 Norshield Security Products, LLC $290,582 c/o Richard E Hagerty 1850 Towers Crescent Plaza, Ste 500 Vienna, VA 22182 Rogers Petroleum Services, Inc. $19,384 Savage Trucking $550,000 901 W. Legacy Center Way Midvale, UT 84047 Trey K Electric $5,157 Virginia Community Bank $4,696 Williams Bros Coal Co., Inc. $171,950 INTELLICELL BIOSCIENCES: Gets Favorable Order in Ironridge Suit --------------------------------------------------------------- A Summons and Complaint was filed on Aug. 8, 2013, along with a Motion for a Temporary Restraining Order before the Supreme Court of the State of New York, County of New York, under the caption Intellicell Biosciences, Inc. v Ironridge Global IV, LTD., and TCA Global Credit Master Fund, LP, Index No. 652800/13. The Motion sought to restrain the sale of the Company's assets. While the Company was finalizing an amendment and waiver to that certain Convertible Promissory Note issued by the Company in favor of TCA Global Credit Master Fund, LP, on June 7, 2012, in the principal amount of $500,000, the Company was advised that Ironridge Global IV, LTD, led by Mr. John C. Kirkland, Esq., purportedly purchased the Note from TCA. The Complaint and Motion alleged that Ironridge and TCA each served the Company with a Notice of Foreclosure and Sale, both claiming to be the "Secured Party" of the same assets. Given that Ironridge and TCA asserted that they would sell the secured assets of the Company at auction on Aug. 12, 2013, the Motion sought to temporarily restrain both parties from so doing. On Aug. 12, 2013, Justice Sherwood, Justice of the Supreme Court, New York County, issued a written Order granting the relief requested, thereby restraining any sale of assets. On Aug. 26, 2013, despite the Company's best efforts to amicably resolve the dispute related to the Note, a subsequent hearing on the Motion was held, at which time the Company voluntarily brought with it to Court: (i) a certified check in the amount of $535,833 constituting payment of all principal and interest owed under the Note; and (ii) a stock certificate constituting the facility fee shares owed to the Secured Party pursuant to that certain Equity Facility Agreement. Since TCA admitted in prior court filings that it has no remaining interest in the Note and Equity Facility Agreement, both the check and the stock certificate were tendered to Ironridge in open court, and counsel for Ironridge confirmed receipt thereof to Justice Oing directly. The Company's attorneys argued in court that, with the exception of possible attorney's fees owed, the Company's obligations under the transaction documents have now been satisfied in full. In addition, the Court found Ironridge's jurisdictional argument to be unavailing and held that the case will remain in New York and directed all parties to file submissions with the Court on Sept. 10, 2013, indicating why any other monies are or are not owed under those certain transaction documents. Judge Oing further directed that the Temporary Restraining Order restraining the sale of the Company's assets will remain in place indefinitely until further order of the Court and that the auction shall not be rescheduled and that Ironridge will not make, post or distribute any further advertisements, internet postings, blogs or otherwise in relation thereto. Finally, Judge Oing held that the balance of the $680,000 that was being held in escrow be immediately released. On January 28, 2014, a Report and Recommendation was issued by Judicial Hearing Officer Ira Gammerman and so ordered on Feb. 19, 2014. By Notice of Motion dated March 7, 2014, the Company moved to confirm said Report and Recommendation. On March 31, 2014, Ironridge cross-moved for an order rejecting the Report of Recommendation and for an award of damages against the Company and in favor of Ironridge in the amount of $298,310. On June 20, 2014, the Company received the Order whereby the Court (i) granted the Company's motion and (ii) denied Ironridge's cross-motion. The Court further ordered that: (i) Ironridge surrender to the Company stock certificate No. IC0369 in the amount of 4,959,613 shares of common stock of the Company by delivering the certificate to counsel of the Company within 10 calendar days of service of Notice of Entry of Order; (ii) the Company, within 10 calendar days of receipt by Company's counsel of the Certificate, cause its clearing firm to issue and deliver to Ironridge a stock certificate representing immediately tradeable shares in the Company in an amount equal to $91,912 as determined by reference to the Company's share price on the NASDAQ as reported by Bloomberg L.P. as of the Issue Date; (iii) if the Company cannot or does not cause its clearing house to issue the Facility Fee Shares, the Company will pay Ironridge $91,912 in immediately available funds within 10 days of the Issue Date; and (iv) Ironridge's first-priority under the Security Agreement dated as of May 31, 2012, will continue until the earlier of payment by the Company to Ironridge in immediately available funds of $91,912 or receipt by Ironridge of the correct stock certificate having the tradeable value of $91,912. About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. Intellicell Biosciences reported a net loss of $11.14 million on $0 of total net revenues for the year ended Dec. 31, 2013, as compared with a net loss of $4.15 million on $534,942 of total net revenues during the prior year. The Company's balance sheet at March 31, 2014, showed $4.09 million in total assets, $25.26 million in total liabilities and a $21.16 million total stockholders' deficit. Going Concern "The condensed consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $61,421,672 and a working capital deficit of $23,780,066 as of March 31, 2014, respectively. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and a private placement of common stock or other debt or equity securities. There can be no assurance that we will be able to obtain further financing, do so on reasonable terms, or do so on terms that would not substantially dilute our current stockholders' equity interests in us. If we are unable to raise additional funds on a timely basis, or at all, we probably will not be able to continue as a going concern," the Company said in the quarterly report for the period ended March 31, 2014. INTERMETRO COMMUNICATIONS: Investor Buys 150,000 Preferred Shares ----------------------------------------------------------------- An investor holding Series B Preferred Stock of InterMetro Communications, Inc., exercised its right to purchase an additional 150,000 shares of Series B Preferred Stock, plus a warrant to purchase 150,000 shares of common stock at an exercise price of $0.20 per share, for a total purchase price of $150,000. The securities were sold in a private placement exempt from registration under Regulation D of the Securities Act of 1933, as amended. About InterMetro Simi Valley, Calif.-based InterMetro Communications, Inc., -- http://www.intermetro.net/-- is a Nevada corporation which through its wholly owned subsidiary, InterMetro Communications, Inc. (Delaware), is engaged in the business of providing voice over Internet Protocol ("VoIP") communications services. InterMetro Communications reported a net loss of $2.45 million on $11.57 million of net revenues for the year ended Dec. 31, 2013, as compared with net income of $699,000 on $20.06 million of net revenues in 2012. Gumbiner Savett Inc., in Santa Monica, California, issued a "going cocern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company incurred net losses in previous years, and as of Dec. 31, 2013, the Company had a working capital deficit of approximately $12,082,000 and a total stockholders' deficit of approximately $12,426,000. The Company anticipates that it will not have sufficient cash flow to fund its operations in the near term and through fiscal 2014 without the completion of additional financing. These factors, among other things, raise substantial doubt about the Company's ability to continue as a going concern IRON MOUNTAIN: Moody's Affirms 'Ba3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed Iron Mountain Incorporated's Ba3 corporate family rating (CFR), Ba3-PD probability of default rating, and the Ba1 and B1 senior unsecured and senior subordinated debt ratings, respectively. As part of the ratings action, Moody's revised Iron Mountain's ratings outlook to stable from negative and affirmed its SGL-2 Speculative Grade Liquidity rating. The ratings actions were prompted by Iron Mountain's announcement that it has received a favorable private letter ruling from the U.S. Internal Revenue Service (IRS) with respect to its plans to convert certain of its subsidiaries to a real estate investment trust (REIT). Ratings Rationale The favorable private letter ruling by the IRS removes uncertainties about Iron Mountain's financial policies and the timing of its plans to convert to a REIT. The affirmation of the Ba3 corporate family rating is based on an expectation that immediately after conversion to a REIT, Iron Mountain's total debt to EBITDA should begin to decline and gradually approach 5.0x (Moody's adjusted) by mid 2016 from EBITDA growth of about 3% annually and increased use of equity (and correspondingly lower reliance on debt) to fund its capital requirements. Moody's analyst Raj Joshi noted that "total debt to EBITDA will likely increase to mid 5x in the second half of 2014 as Iron Mountain will use incremental debt to fund previously announced capital distributions to its shareholders in connection with its plans to convert to a REIT." Iron Mountain's Ba3 CFR is supported by its leading market position in the highly fragmented North America storage and information management market. It derives the majority of its revenues from storage rental fees that are highly recurring in nature and storage volumes have historically exhibited low churn. Iron Mountain has a large and diversified customer base and its strong brand and considerable market share in North America create pricing power that support its high EBITDA margins. The rating is constrained by Iron Mountain's elevated financial leverage, especially in the context of modest organic growth prospects for its document storage business in developed markets which faces secular pressures resulting from the shift away from paper towards electronic media. In addition, the company will likely require increased levels of investments to support its long-term growth strategy, including market share gains in emerging markets and expansion of its data center business. The key risk to the ratings is that stronger-than-expected headwinds in the document storage business and elevated capital requirements could result in leverage being sustained above 5.0x for a protracted period of time, despite management's intentions to reduce leverage. Moody's expects Iron Mountain to continue to benefit from growing demand for outsourced document storage in emerging markets. However, in mature markets where penetration rates are higher it could become increasingly difficult for the company to offset weak storage volumes with price increases. Moody's expects Iron Mountain to maintain good liquidity over the next year with substantial availability under the partially drawn $1.5 billion revolving credit facility and ample cushion under financial covenants in the debt agreements. The stable ratings outlook reflects an expectation for low single digit revenue and EBITDA growth over the next 12 to 18 months and the maintenance of a good liquidity profile. Iron Mountain's ratings could be downgraded if deterioration in earnings or an increase in debt lead Moody's to believe that Iron Mountain's total debt to EBITDA (Moody's adjusted) is unlikely to be sustained at or below 5.0x. The rating could be also lowered if Iron Mountain's liquidity materially weakens. Moody's could upgrade Iron Mountain's ratings if Iron Mountain generates sustained organic revenue growth and stable EBITDA margins, such that total debt to EBITDA is sustained below 4.0x (Moody's adjusted) and retained cash flow to net debt is sustained above 15%. Outlook Actions: Issuer: Iron Mountain Canada Operations ULC Outlook, Changed To Stable From Negative Issuer: Iron Mountain Incorporated Outlook, Changed To Stable From Negative Issuer: Iron Mountain Information Management, LLC Outlook, Changed To Stable From Negative Affirmations: Issuer: Iron Mountain Canada Operations ULC Multiple Seniority Shelf Aug 7, 2016, Affirmed (P)Ba1 C$200 million 6.125% Senior Unsecured Regular Bond/Debenture Aug 15, 2021, Affirmed Ba1 Issuer: Iron Mountain Incorporated Probability of Default Rating, Affirmed Ba3-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Corporate Family Rating, Affirmed Ba3 Multiple Seniority Shelf Jun 27, 2016, Affirmed (P)Ba1 EUR225 million 6.75% Senior Subordinated Regular Bond/Debenture Oct 15, 2018, Affirmed B1 $400 million 7.75% Senior Subordinated Regular Bond/Debenture Oct 1, 2019, Affirmed B1 $550 million 8.375% Senior Subordinated Regular Bond/Debenture Aug 15, 2021, Affirmed B1 $600 million 6% Senior Unsecured Regular Bond/Debenture Aug 15, 2023, Affirmed Ba1 $1,000 million 5.75% Senior Subordinated Regular Bond/Debenture Aug 15, 2024, Affirmed B1 Issuer: Iron Mountain Information Management, LLC $1,500 million Senior Secured Bank Credit Facility Jun 27, 2016, Affirmed Ba1 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. Iron Mountain is an international provider of information storage and related services. Moody's expects consolidated revenues to exceed $3.1 billion in 2014. JFB FIRTH: Alcoa Acquisition Deal No Impact on Moody's B3 Rating ---------------------------------------------------------------- Moody's Investors Services said announcement that Alcoa plans to acquire JFB Firth Rixson (B3/ negative) for approximately $2.85 billion has no impact on JFB Firth Rixson's debt ratings at this time. KLEEN ENERGY: Fitch Puts 'BB' Ratings on $730MM Loans on Watch Neg ------------------------------------------------------------------ Fitch Ratings has placed the following Kleen Energy Systems, LLC debt on Rating Watch Negative: -- $435 million ($267.9 million outstanding) term loan A due 2018 'BB'; -- $295 million ($272.5 million outstanding) term loan B due 2024 'BB'. Prior to the rating action, the Rating Outlook was Negative. The Negative Watch reflects the potential for further operational disruptions or cost volatility to exacerbate deficiencies in project liquidity over the short term. Kleen's inability to repay its outstanding working capital facility loan or deferred target amortization in a timely manner as a result of weak operating cash flow could result in additional borrowing. Fitch remains concerned that the uncertain volatility of Kleen's cost structure and persistent operational failures could reduce financial performance over the long-term. Resolution of the Watch is dependent upon further clarification of Kleen's cost profile and demonstrated progress toward repayment of the working capital facility loan. KEY RATING DRIVERS Fixed-Price Agreements: Kleen's revenues are initially derived from fixed-price tolling and capacity agreements with investment- grade counterparties, partially mitigating price risks through 2017. The project remains subject to replacement power costs in the event of a forced outage under the tolling agreement. Kleen is vulnerable to margin risks during the post-2017 merchant period but is not entirely dependent on market-based revenues, as capacity payments alone should be sufficient to meet debt service requirements. A scheduled step-down in debt service should moderate Kleen's energy price exposure after the tolling agreement expires. (Revenue Risk: Midrange) Lack of Operational History: Kleen has not yet established a stable cost profile or demonstrated a pattern of consistent operating performance. Fitch anticipates that actual costs will exceed original projections by a wide margin, heightening the potential impact of operational underperformance going forward. It is uncertain whether Kleen can reliably meet target availability and heat rate requirements to avoid contractual penalties and maximize revenues, based on Kleen's history of forced outages. Favorably, Kleen benefits from commercially proven technology operated and maintained by experienced O&M providers. (Operation Risk: Weaker) Low Supply Risk: Volumetric risks are minimal, as the project is situated in a highly liquid and competitive natural gas market. The tolling counterparty bears natural gas supply risks in the medium term. (Supply Risk: Midrange) Mitigated Refinancing Risk: Fitch believes it is likely that Kleen will fully prepay the term loan A balloon payment prior to maturity, absent persistent operational challenges. The supplemental amortization mechanism relies upon contracted revenues during the tolling period, and catch-up provisions provide some protection against temporary interruptions in cash flow. Kleen's debt structure otherwise incorporates standard terms and conditions with adequate liquidity provisions. (Debt Structure: Midrange) Weakened Financial Profile: Fitch-projected debt service coverage ratios (DSCRs) range between 1.25x and 1.35x during the tolling period under a Fitch rating case that considers a combination of low availability, technical underperformance, and further increases to a deteriorating cost profile. The rating is not constrained by financial performance during the merchant period, primarily due to declining debt service relative to higher projected revenues. Peer Comparison: Kleen's credit quality is consistent with that of other thermal projects in the 'BB' rating category. Comparable projects often demonstrate an uncertain cost profile, heightened operating risks, and/or elements of merchant exposure. Investment-grade projects with fully contracted output exhibit considerably stronger financial profiles with rating case DSCRs that consistently exceed 1.4x. RATING SENSITIVITIES Cost Stability: Demonstration of a stable cost profile would be consistent with the rating, while further increases in costs would heighten the project's vulnerability to operating event risks. Performance Shortfalls: Persistently low availability, repeated forced outages, or an accelerated degradation in heat rates could reduce revenue and subject the project to contractual penalties. Inability to Refinance: In the event that an outstanding balance remains on the term loan A at maturity, market conditions and/or project-specific factors could prevent Kleen from refinancing. SECURITY The collateral includes a first-priority security interest in the ownership interests in Kleen, all real and personal property, including Kleen's rights under the project documents, the project accounts, and all revenues. CREDIT UPDATE Revenues fell far below Fitch's expectations following two severe forced outages in the first quarter of 2014. Kleen was forced to draw $16 million under its working capital facility and forgo $5.8 million of target amortization payments, as operating cash flow was insufficient to meet the first two payments of scheduled debt service. Kleen has resolved the technical problems and the facility recently resumed normal operations. A severe outage of the steam turbine resulted in approximately $25 million of lower revenue due to tolling agreement penalties and an additional $3 million of repair costs. The market-based penalties were especially onerous due to the extreme winter weather during the outage. The entire facility was shut down between December 23rd and February 4th, when Kleen took the steam turbine offline following several weeks of unusual vibrations. The steam turbine has operating normally since the repairs were completed. In a separate incident, one of the combustion turbines caught fire and was taken out of service on February 12th. Kleen estimates approximately $6 million of lost net revenue due to the timing of the outage. The other combustion turbine, which has not demonstrated any technical problems and the steam turbine, remained fully operational during the outage. Insurance has thus far paid for the repairs, which Kleen believes have permanently resolved the issue. The combustion turbine was placed back into service at full load on June 7th. Fitch believes that, assuming no further operational disruptions, Kleen may have sufficient financial capacity to repay the working capital facility loan and remain current on debt service through the end of the year. It is unlikely that Kleen will make target amortization payments until 2015. Fitch expects the 2014 DSCR could range between 1.0x and 1.2x taking into consideration repair costs, insurance reimbursements, additional interest costs and repayment of the working capital loan. Kleen is a special-purpose company created to own and operate the project, which consists of a 620-megawatt combined-cycle electric generating facility located near Middletown, CT. Kleen sells capacity under a 15-year agreement with CL&P. Exelon Generation Company (ExGen, Fitch IDR 'BBB+' with a Negative Watch) purchases the facility's energy output under a seven-year tolling agreement. Exelon Corp. Fitch IDR 'BBB+' with a Negative Watch), ExGen's parent, has partially guaranteed ExGen's contractual obligations. LANTHEUS MEDICAL: Moody's Hikes Corporate Family Rating to Caa1 --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Lantheus Medical Imaging, Inc. including the Corporate Family Rating to Caa1 from Caa2, the Probability of Default Rating to Caa1-PD from Caa2-PD and the senior unsecured rating to Caa1 (LGD4) from Caa2 (LGD4). At the same time, Moody's affirmed the company's SGL-3 Speculative Grade Liquidity Rating. Following this rating action, the rating outlook is positive. Ratings upgraded: Corporate Family Rating to Caa1 from Caa2 Probability of Default Rating to Caa1-PD from Caa2-PD Senior unsecured notes of $400 million due 2017 to Caa1 (LGD4) from Caa2 (LGD4) Rating affirmed: Speculative Grade Liquidity Rating at SGL-3 "The upgrade reflects our outlook for continuing earnings improvement driven by rising DEFINITY sales and the impact of ongoing cost reductions, while the positive outlook considers the potential for deleveraging pending a successful IPO and further resolution of supply issues," stated Michael Levesque, Senior Vice President. Rating Rationale Lantheus's Caa1 Corporate Family Rating reflects our expectations of very high leverage in 2014 prior to any IPO proceeds, weak cash flow, considerable supply risk, high customer concentration, and headwinds on several of its franchises stemming from pricing pressure. At the same time, quarterly revenue and earnings performance continues to improve sequentially, albeit from negative operating profitability related to earlier supply challenges. These trends are supported by growth in DEFINITY, Lantheus's ultrasound contrast imaging agent, the re-introduction of Neurolite in late 2013, and ongoing cost reduction efforts. Debt/EBITDA for the 12 months ended March 31, 2014 improved to 7.3 times (using Moody's adjustments) compared to 9.3 times as of December 31, 2013, and Moody's anticipates continuing improvement in EBITDA. Despite these positive trends which are reflected in the upgrade, Lantheus remains vulnerable to supply disruptions. Until a new supplier -- Pharmalucence, Inc. -- is FDA-approved, Lantheus will remain highly reliant on sole-supplier Jubilant HollisterStier (JHS) for DEFINITY production, and JHS faces an unresolved FDA warning letter. Lantheus will also remain highly reliant on the supply of Molybdenum-99 (Moly-99), a material critical for the manufacturing of its key nuclear products, TechneLite, Cardiolite and Neurolite. This supply remains vulnerable. Lantheus will need to continue diversifying away from materials supplied by the NRU plant in Canada, which will cease medical isotope production in 2016. The positive outlook considers the potential for further resolution of supply issues, as well as the company's registration statement filed on June 24, 2014 with an estimated aggregate offering price of $125 million. Stated uses of proceeds include debt reduction, working capital and other general corporate purposes. The ratings could be upgraded if a successful IPO results in substantial deleveraging including debt/EBITDA below 5.0 times, but an upgrade will also depend on continuation of improving performance as well as resolution of several outstanding business risks. These including completion of tech transfer to Pharmalucence for DEFINITY, resolution of the JHS warning letter, and greater diversity of Moly-99 suppliers. Conversely, the ratings could be downgraded if supply issues or other sales disruptions cause leverage to increase or liquidity to weaken and jeopardize the company's ability to meet its interest payments. Headquartered in Billerica, Massachusetts, Lantheus Medical Imaging, Inc. ("Lantheus") is a leading global manufacturer of medical imaging products and a wholly-owned subsidiary of Lantheus MI Intermediate, Inc. (the audited entity), which in turn is the wholly-owned subsidiary of Lantheus MI Holdings, Inc. (the "parent"). The company manufactures and distributes products primarily for cardiovascular diagnostic imaging. Lantheus, which was previously a subsidiary of Bristol-Myers Squibb, was acquired by Avista Capital Partners in January 2008. The principal methodology used in this rating was Global Pharmaceutical Industry published in December 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. LONG BEACH MEDICAL: Buyer Expects to Consummate Sale Soon --------------------------------------------------------- South Nassau Communities Hospital filed with the Bankruptcy Court on June 20 a statement regarding a section in the asset purchase agreement with Long Beach Medical Center. South Nassau is the purchaser of real property and certain personal property assets of the Debtor, pursuant to a transaction approved by the Court on May 22, 2014. The buyer said the statement is a response to the Court's request for a status report regarding efforts to satisfy the closing condition contained in Section 10.1(p) of the APA filed with the Court, whereby FEMA will have confirmed in a writing acceptable to the buyer in its sole discretion that FEMA will provide funding as determined by the buyer to be necessary to complete the buyer's alternative use project for providing replacement health care services in the Long Beach community. The buyer related that it has been in regular communication with representatives of FEMA and has made substantial progress towards satisfaction of the FEMA Condition and expects to receive written confirmation from FEMA within the next weeks that will satisfy the FEMA Condition. Although the sale transaction may not close by June 30, 2014, the buyer does not intend to exercise its termination rights at this time, will continue to work with the other parties, and expects that the transaction will be consummated as soon as all the closing conditions, including NYS approval, are satisfied. The buyer is represented by: Frank A. Oswald, Esq. Scott A. Griffin, Esq. TOGUT, SEGAL & SEGAL LLP One Penn Plaza, Esq., Suite 3335 New York, NY 10119 Tel: (212) 594-5000 As reported in the Troubled Company Reporter on May 30, 2014, Bankruptcy Judge Alan S. Trust approved the sale of real properties of the Debtors. Judge Trust also authorized the parties to modify their asset purchase agreement. As reported in the TCR on May 20, 2014, South Nassau originally offered $21 million for both the hospital and the affiliated 200- bed Komanoff nursing home. It turned out that selling the two facilities separately generated the biggest payoff. The TCR said South Nassau still won the hospital auction with a bid of $10.25 million, plus the assumption of $1 million in employee liabilities. South Nassau will sell the hospital's equipment and guarantee Long Beach at least $500,000. The nursing home went to several individuals for $15.6 million, plus assumption of employee liabilities and as much as $1.1 million in known or unknown health-care program debt. The TCR noted, as a breakup fee, South Nassau receives $450,000 and repayment of as much as $4.5 million in loans it made to finance the Chapter 11 case. About Long Beach Medical Center Long Beach Medical Center, formerly Long Beach Memorial Hospital, was a 162-bed, community-based hospital offering primary, acute, emergency and long-term health care to residents of Long Beach, New York. Founded in 1922, LBMC was a teaching facility for the New York College of Osteopathic Medicine. LBMC was shut down after superstorm Sandy devastated the hospital in October 2012. Long Beach Memorial Nursing Home Inc, runs the The Komanoff Center for Geriatric and Rehabilitative Medicine, a 200-bed skilled nursing facility affiliated with LBMC. It provides services for residents requiring long term nursing home care and short term post-acute (sub-acute) care. Currently there are 127 residents of Komanoff. Long Beach Medical Center and Long Beach Memorial Nursing Home d/b/a The Komanoff Center for Geriatric and Rehabilitative Medicine, sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case Nos. 14-70593 and 14-70597) on Feb. 19, 2014. Long Beach Medical Center scheduled $17,400,606 in total assets and $84,512,298 in total liabilities. Garfunkel Wild P.C. serves as the Debtors' counsel. GCG, Inc., is the Debtors' claims and noticing agent. The Hon. Alan S. Trust presides over the cases. The U.S. Trustee has appointed three members to the official committee of unsecured creditors. The panel retained Klestadt & Winters, LLP, led by Sean C. Southard, Esq., as counsel. MACKEYSER HOLDINGS: Has Interim Approval of $1 Million DIP Loan --------------------------------------------------------------- MacKeyser Holdings, LLC, et al., received interim authority from U.S. Bankruptcy Court for the District of Delaware to obtain postpetition financing in an aggregate principal amount not to exceed $1,052,105, from Health Evolution Partners Fund I, L.P., and Series F of Health Evolution Partners Co-Invest, LLC. The DIP Loan accrues interest at 8%, and 8%, plus 2% in the event the Debtors default. The Debtors also obtained interim authority to use cash collateral securing their business. As of the Petition Date, the Debtors' secured and unsecured debt obligations totaled approximately $58 million, composed of approximately $23 million arising in connection with various loans and equipment financings and approximately $35 million arising in connection with (i) notes issued in connection with practice acquisitions, (ii) other loan transactions, and (iii) accounts payable, accrued liabilities and other liabilities. A final hearing on the DIP and Cash Collateral requests will be held on July 16, 2014, at 9:30 a.m. Objections must be filed on or before July 9, and must be served upon: (a) David R. Hurst, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, as the Debtors' counsel; and (b) Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, as the DIP Lenders' counsel. A full-text copy of the Interim DIP Order with Budget is available at http://bankrupt.com/misc/MACKEYSERdipord0624.pdf 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. MACKEYSER HOLDINGS: Seeks Extension of Schedules Filing Date ------------------------------------------------------------ MacKeyser Holdings, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the deadline to file their schedules of assets and statements of liabilities through and until Aug. 19, 2014, in order for them to accurately complete each of their schedules and statements. The Debtors state, "In light of the amount of work entailed in completing the Schedules and Statements, the substantial burdens already imposed on management by the commencement of these Chapter 11 cases, the limited number of employees available to collect the required information, the competing demands upon those employees, and the time and attention the Debtors must devote to the restructuring process, the Debtors respectfully submit that 'cause' exists to extend the deadline by 30 days, through and including August 19, 2014." The Debtors separately sought and obtained a Court order providing that all persons and all foreign or domestic governmental units are stayed, restrained and enjoined from, among other things, commencing or continuing a judicial, administrative, or other action or proceeding against the Debtors, including the issuance or employment of process, that was or could have been initiated before the Petition Date. The Debtors sought the stay order to confirm the application of two key protections provided by the Bankruptcy Code: the automatic stay provisions of Section 362 and the anti-discrimination provisions of Section 525. The Debtors' business involves practice management for the various professional corporations that contract with the Debtors for the use of certain assets and the provision of certain services. The fact that none of the Amedco entities are filing for bankruptcy likely will create confusion for many of the Debtors' creditors, customers and those parties with whom the Debtors do business requiring that an order implementing these protections be entered by the Court. 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. MACKEYSER HOLDINGS: American Legal Services OK'd as Claims Agent ---------------------------------------------------------------- MacKeyser Holdings, LLC, et al., sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ American Legal Claim Services, LLC, as claims and noticing agent to, among other things, (i) distribute required notices to parties in interest, (ii) receive, maintain, docket and otherwise administer any proofs of claim filed in the Chapter 11 case, and (iii) provide other administrative services. The firm's professionals will be paid the following hourly rates: Clerical $28-$45 Analyst $75-$115 Consultant $100-$160 SR Consultant $165-$200 Managing Director $225 Prior to the Petition Date, the Debtors provided ALCS a retainer in the amount of $25,000, which ALCS applied to all prepetition invoices. Jeffrey Pirrung, the managing director of ALCS, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. 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. MERITOR INC: Moody's Affirms B2 CFR & Revises Outlook to Positive ----------------------------------------------------------------- Moody's Investors Service affirmed Meritor, Inc.'s debt ratings, including B2 Corporate Family Rating, Ba2 senior secured rating, B3 unsecured rating, and SGL-2 speculative grade liquidity rating. Moody's also changed the rating outlook to positive from stable. Ratings Rationale The revised positive outlook reflects the continuing progress Meritor is expected to make in building a more sustainable business model and reducing its vulnerability to the downturns in the global truck market by implementing its M2016 strategic plan. Key elements of this plan include: better aligning product and service offerings with customer requirements, improving operating efficiencies, strengthening EBITDA margins, and maintaining a strong liquidity and balance sheet profile. Meritor's financial performance, including its EBITDA margin, is benefiting from effective implementation of the operational elements of the M2016 plan, and from the improving demand outlook in the North American truck sector. Importantly, the company's EBITDA margin (reflecting Moody's standard adjustments) has improved from 7.5% at year end September 2012 to 11.3% for the twelve months ending March 2014, and the margin should continue to expand moderately as the recovery in the truck market becomes firmer. In addition, the time frame of Meritor achieving its objective of reducing total net debt to $1.5 billion (from a current level of $1.7 billion) should be accelerated as a result of the $209 million in proceeds expected to be received from an agreement reached with Eaton Corporation to settle an antitrust lawsuit. Meritor will use most of the $209 million to pre-fund the next three years of mandatory pension contributions in its United States and United Kingdom pension plans, consistent with the company's efforts to de-risk its pension obligations and to strengthen its balance sheet. Meritor's board has authorized a $210 million share repurchase program. However, this program will be implemented in a manner that is consistent with the company's balance sheet strengthening objective. Moody's anticipates that the company will not commence any repurchases until it has reached its $1.5 billion net debt target. That target is not expected to be achieved until the second half of calendar 2015. Meritor has a sound liquidity profile supported by cash balances, availability under committed borrowing facilities, and free cash flow that should be moderately positive. Future events that have the potential to support an upgrade of Meritor's ratings include continued progress in implementing the M2016 strategic plan and generating credit metrics (reflecting Moody's standard adjustments) that include: solidly positive free cash flow (compared with negative $22 million cash flow for the twelve months through March 2014), EBIT/interest improving to above 2.0x (1.8x at March 2014), and Debt/EBITDA approaching 4.5x (4.7x at March 2014). Demand in the North American truck sector has recently improved and several factors - including the age of the truck fleet, shipment tonnage, and a strengthening housing sector -- point to the possibility of continued recovery into 2015. Factors that will be considered in any possible upgrade of Meritor's rating will include Moody's assessment of: a) the sustainability of the recovery in truck demand and b) Meritor's capacity to contend with an eventual cyclical downturn. Events that have the potential to drive Meritor's outlook or ratings lower include: serious missteps in implementing M2016 and a weakening in key credit metrics with EBIT/Interest coverage remaining at or below 1.5x The principal methodology used in this rating was Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. METRO-GOLDWYN-MAYER: S&P Cuts Secured Debt Rating to B+ on Upsize ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Metro-Goldwyn-Mayer Inc.'s senior secured term loan to '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of a default, from '2'. S&P subsequently lowered its issue-level rating on the debt to 'B+' from 'BB-', in accordance with its notching criteria. The rating action follows the company's proposal to upsize the loan to $300 million and to extend the maturity to 2020. S&P expects the company to use proceeds for general corporate purposes. Pro forma for the loan, leverage increases to about 1x from 0.2x. The upsizing does not affect S&P's corporate credit rating or its positive outlook. However, S&P could consider revising the outlook to stable or downgrading the company by one notch to 'B' if it become convinced that this transaction indicates a more aggressive financial policy at MGM that includes any special dividends or other shareholder-favoring policies. RATINGS LIST Metro-Goldwyn-Mayer Inc. Corporate Credit Rating B+/Positive/-- Downgraded; Recovery Rating Revised To From Metro-Goldwyn-Mayer Inc. Senior Secured $300M* loan due 2020 B+ BB- Recovery Rating 3 2 *Following upsize. MICHAELS COMPANIES: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating and positive outlook to Irving, Texas-based Michaels Companies Inc. At the same time, S&P affirmed its 'B+' issue-level ratings on Michaels' $1.64 billion bank loan and its $850 million term loan B both due 2020. The '2' recovery rating, indicating S&P's expectation for substantial recovery (70% to 90%) in the event of default, remains unchanged. S&P also affirmed its 'CCC+' issue-level ratings on the company's $1 billion senior unsecured notes due 2018, $800 million PIK toggle notes due 2018, and $510 million senior subordinated notes due 2020. The '6' recovery rating, indicating S&P's expectation that noteholders would receive negligible recovery (0% to 10%) in the event of a payment default, remains unchanged. The positive outlook on Michaels reflects S&P's view that credit protection measures could continue to improve over the next year, perhaps sufficiently to reach under 5x leverage, and leading to a reassessment of the financial risk profile to "aggressive" from "highly leveraged". S&P will withdraw the ratings on the $1 billion senior unsecured notes once the IPO closes, as the issuance of the $850 million term loan will be used to pay down the remainder of the notes. The balance of the senior unsecured notes has been refinanced with the upsized senior subordinated notes, which occurred earlier this month. MIDTOWN SCOUTS: Joint Plan of Reorganization Filed -------------------------------------------------- Midtown Scouts Square Property, LP, and Midtown Scouts Square, LLC filed with the Bankruptcy Court a Disclosure Statement explaining their Joint Plan of Reorganization. According to the Disclosure Statement: (1) Allowed Administrative Claims and Priority Non-Tax Claims will be paid in cash in full; (2) Allowed Ad Valorem Claims of Taxing Authorities will be paid in cash full within 30 days of the Effective Date; (3) Allowed Non-Tax Priority Claims, if any, will be paid in cash in full within 30 days of the Effective Date; (4) Allowed Priority Tax Claims, if any, will be paid in full within 30 days of the Effective Date including interest at the statutory rate; (5) Allowed Secured Claim of Bank of Houston secured by liens on the Office Building will be paid by pursuant to the terms of the prepetition promissory note, with the unpaid prepetition amount due added on to the end of the respective note; (6) Allowed Secured Claim of Bank of Houston secured by liens on the Parking Garage will be paid by pursuant to the terms of the prepetition promissory note, with the exception that the term of the note will be extended by 60 months with the unpaid prepetition amount due added on to the end of the respective note; (7) Allowed Secured Claim of the Debtors' second lien lender (Mercantile Capital Corporation) will be converted to the permanent SBA Debenture (504 loan) and will be paid pursuant to terms of the pre-approved SBA note; (8) Allowed Non-Insider Unsecured Claims will be paid in full with interest at 5% over 60 months beginning on the Effective Date with quarterly distributions thereafter; (9) the Allowed Claims of Insiders, including any Allowed Claim of Richey Family Limited Partnership, Todd Richey and L.E. Richey, will be paid in full with interest at 5% over 60 months, or in the event the Court determines that the Richey's hold an equity interest in the Debtors, such claim will be converted to equity; (10) in exchange for converting the postpetition financing claim entitled to priority under Section 503(b)(l), his prepetition claim of $260,624, and the Equity Infusion, Atul Lucky Chopra will retain his 100% equity interest in the Reorganized Debtors, or a reduced equity percentage if the Court determines that the Richeys hold an equity interest in the Debtors. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MIDTOWNSCOUTS_148_ds.pdf Richey Family Unsecured Claim Fixed at $1.4MM The Bankruptcy Court in April ordered that the Richey Family Limited Partnership claim against Midtown Scouts Square Property, LP, is allowed in the amount of $1,400,000. The Court denied the Debtors' motion to estimate at zero the equity interest of the Richey Richey Family Limited Partnership, Ltd., LE Richey and Todd Richey. On June 24, 2014, the Debtors asked the Court to, among other things, fix at $1,400,000 the Richeys' unsecured claim less deductions for damages allegedly incurred by the Debtors. Richey Parties filed an objection to the motion. Cash Collateral Use In April, the Debtors filed with the Bankruptcy Court a supplemental budget regarding continuing use of cash collateral until June 30, 2014. The final agreed order authorized the Debtors' use of cash collateral until Sept. 31, 2013, which was then extended until March 31, 2014. A copy of the suuplemental budget is available for free at: http://bankrupt.com/misc/MIDTOWNSCOUTS_143_budget.pdf In an order dated April 10, 2014, the Court authorized the Debtors to incur postpetition indebtedness from Mercantile Capital Corporation for the continued operations and to administer and preserve the value of the estate. Mercantile Capital has agreed to fund the final two construction draw payments. The indebtedness will be secured pursuant to Mercantile Capital's second deed of trust About Midtown Scouts Square Midtown Scouts Square Property, LP, and affiliate Midtown Scouts Square, LLC, own two commercial properties located in Midtown Houston, Texas. The first property is a mixed use 36,000-square- foot two-storey office/restaurant building originally constructed in 1975, while the second property is a 104,000-square foot eight- storey parking garage with ground floor retail space, both in Bagby Street, in Houston. The two entities sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-32920) on May 9, 2013. The petitions were signed by Erich Mundinger as president of general partner. Judge Karen K. Brown presides over the case. In its schedules, MSS Property disclosed $17,408,328 in assets and $16,666,325 in liabilities. Edward L. Rothberg, Esq. at Hoover Slovacek, LLP, serves as the Debtor's counsel. Hawash Meade Gaston Neese & Cicack, LLP, serves as special litigation counsel. The U.S. Trustee has not appointed an official committee of unsecured creditors in the Debtors' bankruptcy cases. MIG LLC: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------ Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- MIG, LLC 14-11605 aka MIG, Inc. aka Metromedia International Group, Inc. 5960 Fairview Road, Suite 400 Charlotte, NC 28210 ITC Cellular, LLC 14-11606 Type of Business: Debtor MIG, LLC, is a limited liability company organized under the laws of the State of Delaware. MIG owns 100% of the membership interests in Debtor ITC Cellular, LLC, a Delaware limited liability company. ITC Cellular in turn owns 46% of the membership interests of non-debtor International Telcell Cellular, LLC. International Telcell, directly and indirectly through its wholly owned non-debtor subsidiary Telcell Wireless, LLC, owns all the issued and outstanding equity interests of non-debtor Magticom Ltd., the leading mobile telephony company in the Republic of Georgia. Formerly known as MIG, Inc., MIG was a debtor in a previous case captioned In re MIG, Inc., Case No. 09-12118 (KG) (Bankr. D. Del) (the "2009 Chapter 11 Case"). On Nov. 19, 2010, the Court confirmed the Modified Joint Second Amended Plan of Reorganization for MIG. The effective date of the Plan occurred on Dec. 31, 2010. Pursuant to the Joint Plan, MIG was converted to a Delaware limited liability company. The 2009 Chapter 11 Case was closed on July 27, 2011. Chapter 11 Petition Date: June 30, 2014 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin Gross Debtors' Counsel: Dennis A. Meloro, Esq. GREENBERG TRAURIG, LLP The Nemours Building 1007 North Orange Street, Suite 1200 Wilmington, DE 19801 Tel: 302-661-7000 Fax: 302-661-7360 Email: melorod@gtlaw.com - and - Nancy A. Mitchell, Esq. Maria J. DiConza, Esq. GREENBERG TRAURIG LLP 200 Park Avenue New York, NY 10166 Tel: 212.801.9200 Fax: 212.801.6400 Email: mitchelln@gtlaw.com diconzam@gtlaw.com Debtors' Financial Advisor and Investment Banker: ROTHSCHILD INC. Debtors' Conflict Counsel: COUSINS CHIPMAN AND BROWN, LLP Debtors' Chief Restructuring Officer: NATALIA ALEXEEVA Debtors' Claims, Noticing Agent and Administrative Advisor: PRIME CLERK LLC Estimated Assets: $50 million to $100 million Estimated Liabilities: $100 million to $500 million The petitions were signed by Natalia Alexeeva, chief restructuring officer. List of MIG'S 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Betty Grey Workers' $37,000 Compensation Settlement Lawrence Klamon Supplemental $14,922/ Executive month Retiree Plan Ohio Bureau of Workers' $4,000 Workers' Compensation Compensation Iron Mountain Document Storage $3,937 John D Phillips Supplemental $2,004/ Executive month Retiree Plan Centers for Medicare Workers' $1,000 and Medicaid Services Compensation Dooley Culbertson Supplemental $810/ Executive month Retiree Plan Walter Grant Supplemental $694/ Executive month Retiree Plan John Bartels Supplemental $4,340/ Executive month Retiree Plan Victor Goetz Supplemental $211/ Executive month Retiree Plan beginning June 1 2017 Paul Kiel Supplemental $200/ Executive month Retiree Plan John Egan Supplemental $200/ Executive month Retiree Plan Edward Granville Workers' Unknown Compensation Claim Betty Timms Workers' Unknown Compensation Claim Fred Trombley Workers' Unknown Compensation Claim MINI MASTER CONCRETE: Court Allows Sale of Dorado Equipment ----------------------------------------------------------- The Bankruptcy Court approves the joint request of Mini Master Concrete Services, Inc., and its creditor, General Electric Capital of Puerto Rico to sell unused assets. In February 2014, the Court approved the consolidation of Mini Master and its affiliates, Master Aggregates Toa Baja Corporation and Master Concrete Corporation, with Mini Master as the surviving corporation. Mini Master has assets at its Dorado plant, which it believes are not necessary for its effective reorganization. Mini Master received an offer from Francisco Rodriguez Berrios for the purchase of a main substation with GE 3000 KVA, 38kV/13.3kV non-PCB oil transformer, primary metering system, and capacitor bank for $10,000. The equipment is encumbered in favor of GE Capital. Proceeds of the sale will be paid to GE Capital to reduce its secured claim again Mini Master. Patricia I. Varela-Harrison, Esq., at Charles A. Cuprill, P.S.C., in San Juan, Puerto Rico, noted that Mr. Rodriguez, a resident of Vega Alta, has no relationship with Mini Master, or any of its officers, directors or shareholders. Ms. Verela-Harrison explained that maintaining the equipment is causing expenses such as security, insurance, property taxes, and others that are unnecessary and burdensome to the estate. Mini Master is represented by: Patricia I. Varela-Harrison, Esq. CHARLES A. CUPRILL, P.S.C., LAW OFFICES 356 Fortaleza Street, Second Floor San Juan, PR 00901 Tel: (787)977-0515 Fax: (787)977-0518 E-Mail: pvarela@cuprill.com E-Mail: ccuprill@cuprill.com G.E. Capital is represented by: Gerardo Pavia Cabanillas PAVIA & LAZARO, PSC PO Box 9746 San Juan, PR 00908 Tel: 787-954-9058 Fax: 787-721-4192 Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MINI MASTER CONCRETE: Court Approves IPFS Financing Deal -------------------------------------------------------- Mini Master Concrete Services, Inc., sought and obtained the Bankruptcy Court's authority to enter into an insurance premium financing agreement with IPFS Corporation. Charles A. Cuprill-Hernandez, Esq., at Charles A. Cuprill, P.S.C., in San Juan, Puerto Rico, explained that in the regular course of business, Mini Master has regularly financed the cost of its required insurance policies. While financing is in the ordinary course of business and does not require Court approval, IPFS Corporation, the entity which is to finance the required insurance, insisted that permission be obtained from the Court. The insurance lending terms are: Annual Percentage Rate: 5.30% Finance Charge: $2,008.48 Amount Financed: 90,417.02 Total of Payments: 92,425.50 Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MINI MASTER CONCRETE: Court Approves Sale of Carolina Plant Assets ------------------------------------------------------------------ Mini Master Concrete Services, Inc., received a $28,000 offer from Cantera Carmelo, Inc., for these items at its Carolina plant: Equipment Type Make/Model Sale Price --------- ---- ---------- ---------- Clarifier 30' Tank Phoenix $38,761 Vibrating Screen Inclined Deister 8'x20' 50,206 Charles A. Cuprill-Hernandez, Esq., at Charles A. Cuprill, P.S.C., in San Juan, Puerto Rico, relates that the items to be sold are not needed for Mini Master's operations and considering the date of their acquisition, condition and comparable items, the offer is reasonable and fair. At Mini Master's request, the Bankruptcy Court allows the sale of the items to Cantera Carmelo. The assets are encumbered in favor of the Economic Development Bank of Puerto Rico. Thus, sale proceeds will be paid to the bank reduce Mini Master's secured claim. Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MOMENTIVE PERFORMANCE: Changes to Backstop Commitment Deal Filed ---------------------------------------------------------------- Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and certain of the Company's wholly owned domestic subsidiaries, on behalf of themselves and the other Filing Subsidiaries, entered into a First Amendment to Backstop Commitment Agreement, dated as of June 21, 2014, with the Commitment Parties party thereto. The original Backstop Commitment Agreement, dated as of May 9, 2014, among the Company, Holdings and the Commitment Parties, provided, among other things, that the Commitment Parties will provide a $600 million commitment to backstop two proposed rights offerings to be conducted in connection with the Joint Plan of Reorganization of the Company and its debtor affiliates. The BCA Amendment effects certain changes to the BCA, including among other things: (a) certain technical adjustments to facilitate the calculation of shares issued in the Rights Offerings, (b) changes to certain milestones and other key dates set forth therein in order to conform to changes made to the Eighth RSA Amendment, (c) the deletion of a provision governing "credit-bidding" for the Debtors' assets, (d) the clarification of the indemnification provision set forth in the BCA, (e) the limitation of certain circumstances in which a Commitment Party would receive the Commitment Premium (as defined in the BCA) and (f) certain related changes. Among others, the BCA as amended requires that: (a) the Debtors won approval of the BCA or the RSA prior to 11:59 p.m., New York City time on June 24, 2014; and (d) the Debtors won confirmation of the Plan or obtain the BCA Consummation Approval Order prior to 11:59 p.m., New York City time on September 14, 2014. In connection with the BCA Amendment and as provided in the Plan, certain entities entered into joinder agreements, pursuant to which such entities joined and became parties to the BCA as additional Commitment Parties thereunder. Eighth Amendment to Restructuring Support Agreement The Company entered into a Restructuring Support Agreement, dated as of April 13, 2014, among the Company, Holdings, the Filing Subsidiaries, certain affiliates of Apollo Global Management, LLC, and certain holders of 9% Second-Priority Springing Lien Notes due 2021 and 9.5% Second-Priority Springing Lien Notes due 2021 that are not Apollo Entities. The Support Agreement was subsequently amended on several occasions in order to extend certain of the milestones and other key dates set forth therein. The Company entered into an Eighth Amendment to Restructuring Support Agreement, dated as of June 21, 2014, among the Company, Holdings, the Filing Subsidiaries, the Apollo Entities and the Consenting Noteholders, which among other things, modified certain of the noteholder termination events. A copy of the First Amendment to Backstop Commitment Agreement, dated as of June 21, 2014, among Momentive Performance Materials Holdings Inc., Momentive Performance Materials Inc. and the Commitment Parties party thereto, is available at http://is.gd/94tcI2 A copy of the Eighth Amendment to Restructuring Support Agreement, dated as of June 21, 2014, among Momentive Performance Materials Holdings Inc., Momentive Performance Materials Inc., each of their direct and indirect domestic subsidiaries party thereto and certain holders of the Second Lien Notes party thereto, is available at http://is.gd/FJGd4R About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Debtors said that the restructuring will eliminate $3 billion in debt. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. The U.S. Trustee for Region 2 appointed seven members to serve on the Official Committee of Unsecured Creditors of the Debtors' cases. Klee, Tuchin, Bogdanoff & Stern LLP serves as its counsel. FTI Consulting, Inc., serves as its financial advisor. Rust Consulting Omni Bankruptcy serves as its information agent. NATCHEZ REGIONAL: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------ The U.S. Trustee for Region 5 on June 13 appointed three creditors of Natchez Regional Medical Center to serve on the official committee of unsecured creditors. The unsecured creditors' committee is composed of: (1) Blood Systems, Inc., d/b/a United Blood Services and Blood Systems Laboratories c/o Christopher A. Ward Polsinelli PC, Polsinelli LLP 222 Delaware Ave., Suite 1101 Wilmington, DE 19801 Phone: (302) 252-0922 Fax: (302) 252-0921 Email: cward@polsinelli.com (2) Compliant Healthcare Technologies c/o Patrick F. McAllister Williford, McAllister & Jacobus, LLP 303 Highland Park Cove, Suite A Ridgeland, MS 39157 Phone: (601) 991-2000 Fax: (601) 991-0859 Email: pmcallister@wmjlaw.com (3) TherEx, Inc. c/o Phillip A. Martin Fultz Maddox Hovious & Dickens, PLC 101 South Fifth Street, 27th Floor Louisville, KY 40202 Phone: (502) 588-2000 Fax: (502) 588-2020 Email: pmartin@fmhd.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Natchez Regional Based in Natchez, Mississippi, Natchez Regional Medical Center is a full-service hospital offering comprehensive diagnostic and treatment services for acute, subacute and ambulatory care. Natchez Regional serves as a referral center for the five Mississippi counties and two Louisiana parishes it serves, known locally as the Miss-Lou. The hospital is owned by Adams County. Natchez Regional Medical Center filed for Chapter 9 bankruptcy protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26, 2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as bankruptcy counsel. In its petition, the Center listed total assets of $27.8 million and total debts of $20.80 million. The petition was signed by Donny Rentfro, hospital CEO. At the onset of the case, the 179-bed facility said intends to have a term sheet outlining a sale of the facility to a "qualified buyer." The hospital blamed financial problems on "ill-timed and poorly integrated acquisition of physicians' practices and new clinical technologies," the report related. This is the Center's second bankruptcy filing in six years. It filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss. Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the Debtor as counsel in the 2009 case. The Debtor listed total assets of between $10 million and $50 million, and total debts of between $10 million and $50 million in the 2009 petition. Nathcez Regional exited bankruptcy in December 2009 after a court approved its plan of adjustment, in which all unsecured creditors owed $5,000 were to be paid in full. In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides over the case, has held that appointment of a patient care ombudsman is unnecessary. NEW BEGINNINGS: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: New Beginnings Development, LLC fdba Teach A Rising Star, Inc. fdba Coronado Prep, LLC dba Kiddie Academy 1149 Cathedral Ridge Street Henderson, NV 89052 Case No.: 14-14430 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Hon. August B. Landis Debtor's Counsel: Samuel A. Schwartz, Esq. THE SCHWARTZ LAW FIRM, INC. 6623 Las Vegas Blvd. SO., STE 300 Las Vegas, NV 89119 Tel: (702) 385-5544 Fax: (702) 385-2741 E-mail: sam@schwartzlawyers.com Total Assets: $1.2 million Total Liabilities: $1.4 million The petition was signed by Jennifer Somers, managing member. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/nvb14-14430.pdf NEWLEAD HOLDINGS: Completes Settlement Agreement with MGP, Hanover ------------------------------------------------------------------ On June 18, 2014, NewLead Holdings Ltd. disclosed that the Company satisfied its obligations under the $44.8 million court ordered settlement agreement with MG Partners Limited and Hanover Holdings I, LLC, all as more fully described in NewLead's current reports on Form 6-K, as initially filed on December 2, 2013 and through June 26, 2014 with respect to such court ordered settlement dated December 2, 2013. The Order was in accordance with a stipulation of settlement among NewLead, MGP and Hanover, in the matter entitled Hanover Holdings I, LLC v. NewLead Holdings Ltd., Case No. 160776/2013. Hanover commenced the Action against the Company on November 19, 2013 to recover an aggregate of $44,822,523.85 of past-due indebtedness of the Company which Hanover had purchased (and validly assigned to MGP) from certain creditors of the Company. The Order provides for the full and final settlement of the Action, which shall be deemed to be satisfied upon the issuance of common shares as settlement shares until MGP received aggregate cash proceeds from the resale of such settlement shares equal to the sum of approximately $61.6 million, representing 137.5% of the total amount of the Action, plus certain additional "true-up" shares pursuant to a formula set forth in the Settlement Agreement. To satisfy its obligations under the Settlement Agreement, NewLead issued an aggregate of 38,437,604 (adjusted to give effect to the 1-for-10 and 1-for-50 reverse stock splits, effective March 6, 2014 and May 15, 2014, respectively, or approximately 19.2 billion shares not giving effect to the reverse splits) common shares. In addition, the number of Company's common shares outstanding prior to the first issuance of common shares to MGP was 15.8 million shares. Not giving effect to the reverse stock splits, the number of the Company's current common shares outstanding would be approximately 72.27 billion shares. As previously reported, on December 2, 2013, on Form 6-K on the same date, the Supreme Court of the State of New York, County of New York entered the Order approving, among other things, the fairness of the terms and conditions of the Settlement Agreement, by which the Company issued shares to extinguish outstanding obligations related to one newbuilding 35,000 dwt eco-type geared double hull Handysize dry bulk vessel, a coal wash plant in Kentucky, USA and a mine, that includes a CSX rail load facility, the Andy Rail Terminal, in Kentucky, USA, all of which assets have been previously reported on. With respect to the Vessel, as announced on December 4, 2013, the purchase price of such vessel was $19.5 million, a portion of which was previously paid and the past-due balance of $13.1 million is being paid by MPG in accordance with the agreement with the original claim holder by which the claim for such past-due amount was purchased. Delivery of the vessel is expected in late July or early August 2014. As previously announced on December 18, 2013, the acquisition of the Coal Wash Plant was completed in December 2013. For the Five Mile mine, as previously announced on January 9, 2014, NewLead currently has access and development rights to such mine and the outstanding past-due amounts owed to the original debt holders of approximately $1.7 million is being paid by MPG in accordance with the agreements with the original debt holders by which such past-due debt was purchased. After all payments have been made, NewLead intends to undertake the process necessary to effect transfer of title to the Five Mile mine, which it expects to conclude the transfer prior to the end of 2014. Mr. Michael Zolotas, Chairman and Chief Executive Officer of NewLead, stated: "We are delighted to have completed this Settlement Agreement in just over six months. The payment of the debt obligations associated with the assets and other secured and unsecured liabilities through the Settlement Agreement approved by the court assisted in the development of a vertically integrated shipping and commodity company. NewLead is ready to move forward with an enhanced balance sheet having now satisfied all of its obligations under the court ordered Settlement Agreement." About NewLead Holdings Ltd. Based in Athina, Greece, NewLead Holdings Ltd. -- http://www.newleadholdings.com/-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. NewLead Holdings reported a net loss of $158.22 million on $7.34 million of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $403.92 million on $8.92 million of operating revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed $151.33 million in total assets, $292.68 million in total liabilities and a $141.34 million total shareholders' deficit. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a net loss, negative operating cash flows, a working capital deficiency, and shareholders' deficiency and has defaulted under its credit facility agreements. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. NEWLEAD HOLDINGS: Receives NASDAQ Staff Determination Letter ------------------------------------------------------------ NewLead Holdings Ltd. on June 26 disclosed that, on June 25, 2014, the Company received a letter from the NASDAQ Listing Qualifications Staff of The NASDAQ Stock Market LLC notifying the Company that the Staff has determined pursuant to its discretionary authority set forth in Listing Rule 5101 to delist the Company's securities based on public interest concerns raised by certain false and misleading public disclosures made by the Company and the fact that the Company has not demonstrated an ability to sustain compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Global Select Market, as set forth in Listing Rule 5450(a)(1), as required by a NASDAQ Hearings Panel decision dated January 3, 2014. As a separate and additional basis for delisting, the Company was notified that it had not regained compliance, by June 23, 2014, with the $50 million in market value of listed securities requirement for continued listing on The NASDAQ Global Select Market, as set forth in Listing Rule 5450(b)(2)(A). As a result of the foregoing, the Company's securities will be subject to delisting unless the Company requests a hearing before the NASDAQ Hearings Panel by July 7, 2014 to present a plan to regain compliance and address the Staff's concerns. NewLead intends to timely request a hearing before the Panel. The Company's securities will continue to be listed on The NASDAQ Global Select Market until such time as the Panel determination is made. About NewLead Holdings Ltd. Based in Athina, Greece, NewLead Holdings Ltd. -- http://www.newleadholdings.com/-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. NewLead Holdings reported a net loss of $158.22 million on $7.34 million of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $403.92 million on $8.92 million of operating revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed $151.33 million in total assets, $292.68 million in total liabilities and a $141.34 million total shareholders' deficit. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a net loss, negative operating cash flows, a working capital deficiency, and shareholders' deficiency and has defaulted under its credit facility agreements. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. NOVITEX ACQUISITION: S&P Lowers CCR to 'B'; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Novitex Acquisition LLC to 'B' from 'B+'. The outlook is stable. S&P also assigned 'B' issue-level ratings to the company's proposed $355 million six-year senior secured first-lien term loan and $50 million revolving credit facility, with a recovery rating of '3', indicating S&P's expectation of a meaningful (50%-70%) recovery in the event of a payment default. In addition, S&P assigned a 'CCC+' issue-level rating to the company's proposed $100 million seven-year senior secured second-lien term loan, with a recovery rating of '6', indicating S&P's expectations of negligible (0-10%) recovery in the event of payment default. "We are lowering the existing issue-level rating on the first-lien term loan and revolver to 'B' from 'BB-', and on the second-lien term loan to 'CCC+' from 'B-'. We are revising recovery rating on the first-lien and revolver to '3' from '2', and leaving the '6' recovery rating on the second-lien term loan unchanged. We will withdraw these issue-level and recovery ratings upon the successful completion of the proposed financing," S&P said. "The downgrade reflects Novitex's 'highly leveraged' financial profile, a revision from our previous assessment of 'aggressive' financial risk," said Standard & Poor's credit analyst Jacob Schlanger. "We expect leverage to exceed 6x following the proposed shareholder dividend, compared to prior expectations in the 4x area." The stable outlook reflects Standard & Poor's expectations that the company will slowly increase revenues and post modest margin improvement. NOVITEX ENTERPRISE: Moody's Lowers Corporate Family Rating to B3 ---------------------------------------------------------------- Moody's Investors Service downgraded Novitex Enterprise Solutions' Corporate Family Rating (CFR) to B3 from B2 following the company's announcement that it will refinance its credit facility and pay a $140 million distribution to its shareholders. In October 2013, Novitex was acquired for $400 million from its former parent, Pitney Bowes Inc. (Baa2, stable). Moody's also downgraded the company's Probability of Default Rating (PDR) to B3-PD from B2-PD, and assigned a B2 rating to the company's new $355 million first lien senior secured term loan and a Caa2 rating to the company's $100 million second lien term loan. The rating outlook is stable. At the conclusion of the proposed refinancing, Moody's will withdraw the existing first lien and second lien term loan ratings. Ratings Rationale Novitex's B3 CFR reflects the additional financial risk caused by the debt-financed distribution, in the midst of an ongoing transformation of the business from the core outsourcing mail and print operations for large enterprises into a complete product portfolio that will seek to handle customers' physical and digital document flow. Moody's also notes that the increased financial leverage is occurring at a time when the company is still transforming its operations as a standalone company, with a near- wholesale turnover of the senior management team in the past nine months. Moody's believes that the changing usage of printed media by large users in the US and Canada, along with a secular decline in traditional mail delivery, will continue to pressure the company's revenue growth prospects as its customers look to cut costs. The company's revenues have declined over the last six years both when it was part of Pitney Bowes and more recently as an independent entity. Although Novitex believes that it is now in a better position to seek growth opportunities, Moody's thinks that management still faces significant hurdles in reversing the revenue declines, while the necessary investments in infrastructure, sales and support of the new digital document initiatives stand to pressure free cash flow growth. In the near- term, operating expense reductions will be the primary drivers of free cash flow generation needed to service the high debt load. The rating is supported by the company's long-standing, blue chip customer base and contractual relationships which engender strong recurring revenues, as well as an asset-light business model which could provide a platform for strong free cash flow generation once management stems the revenue declines and contains operating costs. Pro forma for the use of a portion of balance sheet cash in connection with the dividend payment, Novitex will have adequate liquidity. Moody's expects the company to be essentially free cash flow break even over the next 12 to 18 months, as it continues to incur costs to run as a stand-alone company, while reorganizing its operations. Moody's expects the company to operate with minimum cash balances of about $10 million. The company maintains a $50 million revolving credit facility as a source for external liquidity, which Moody's expects to be undrawn over the next 12 months. The ratings for Novitex debt instruments comprise both the overall probability of default to which Moody's assigned a PDR of B3-PD and an average family loss given default assessment. Moody's rates the company's senior secured credit facilities B2, LGD3. The ratings of the senior secured credit facility benefit from the superior collateral package that includes all assets and upstream guarantees of subsidiaries, and a pledge of stock of the Canadian subsidiaries. Moody's also rates Novitex's second lien term loan Caa2, LGD5 reflecting the junior position in the capital structure relative to the first lien senior secured debt. Rating Actions: Corporate Family Rating downgraded to B3 from B2 Probability of Default Rating downgraded to B3-PD from B2-PD First Lien Senior Secured Term Loan assigned B2 (LGD 3) First Lien Senior Secured Revolver downgraded to B2 (LGD 3) from B1 (LGD 3) Second Lien Senior Secured Facilities assigned Caa2 (LGD 5) Outlook: Stable Rating Outlook The stable outlook reflects Moody's view that the company will slowly delever from modest earnings growth over the next 12 to 18 months with growth in digital business lines largely offsetting flat to declining revenues from non-digital businesses. What Could Change the Rating - UP Novitex's rating could be upgraded if the company exhibits strong revenue growth, and maintains expense discipline such that the adjusted operating margin increases to above 12% and the company demonstrates consistently high levels of free cash flow. The rating could also be considered for an upgrade if the company maintains adjusted leverage below 4.5 times. What Could Change the Rating - DOWN Novitex's ratings could be downgraded if the company's operating performance does not show signs of a turnaround as evidenced by an inability to reverse persistent revenue contraction, a loss of market share, or a decline in Novitex's competitive position. In addition, the rating may be downgraded if Novitex's adjusted leverage increases above 6.0 times for a sustained period, adjusted operating margins remain below 8%, or the necessary free cash flow to reduce debt does not materialize. Headquartered in Stamford, Connecticut, Novitex, majority owned by Apollo Global Management, is a provider of outsourcing mail, print, customer communication and document management solutions to large enterprises and the public sector across US and Canada. 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. OIL STATES: Moody's Withdraws 'B2' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service has withdrawn all of its ratings involving Oil States International, Inc. (OSII). The withdrawals follow full redemption of OSII's rated senior unsecured notes, which was completed on June 9, 2014. This rating action also concludes the formal rating review that was initiated on August 1, 2013 after the company announced that it was going to to spin-off its accommodations business into a standalone publicly traded company through a tax-free distribution to OSII's shareholders. Ratings Withdrawn: Issuer: Oil States International, Inc. Ba2 Corporate Family Rating Ba2-PD Probability of Default Rating Ba3 Senior Unsecured Notes Rating SGL-2 Speculative Grade Liquidity Rating Outlook Action: Withdraw Ratings Under Review for Downgrade The principal methodology used in this rating was the Global Oilfield Services Rating Methodology published in December 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. Oil States is a leading manufacturer of products for deepwater production facilities and subsea pipelines as well as a provider of completion services and land drilling services to the oil and gas industry. OVERSEAS SHIPHOLDING: Annual Report on Savings Plan Filed --------------------------------------------------------- Overseas Shipholding Group, Inc., filed with the Securities and Exchange Commission an Annual Report on Form 11-K with respect to the OSG Ship Management, Inc. Savings Plan for the fiscal year ended December 31, 2013. CohnReznick LLP in New York serves as independent auditor of the Plan. A copy of the Form 11-K report is available at http://is.gd/eveJ2y About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. * * * In May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. The Court has directed that objections to confirmation of the plan should be filed by July 11, 2014. OWENS & MINOR: MDCI Agreement No Impact on Moody's Ba1 Rating ------------------------------------------------------------- Moody's Investors Service commented that Owens & Minor, Inc. (Ba1 stable) announced on June 25 it entered into a definitive agreement to acquire all outstanding shares of Medical Action Industries Inc. ("MDCI", "Medical Action") for $13.80 per share in cash, representing a total transaction value of $208 million, including assumed debt, net of cash. The acquisition is a modest credit positive as it broadens Owens & Minor's service offering to provider and manufacturer customers, counterbalanced by the expectation for a reduction in cash and revolver availability to fund the transaction. The proposed acquisition, which is expected to close in the fourth quarter of 2014, does not currently affect the ratings or the outlook. Owens & Minor, Inc. ("OMI"), founded 1882, is a national provider of distribution and logistics services to the healthcare industry and a European provider of logistics services to pharmaceutical, life-science, and medical-device manufacturers. The company distributes products from 70 facilities in the U.S., Europe, and China. For the last twelve month period ended March 31, 2014, OMI reported revenue and net income of approximately $9.1 billion and $110 million, respectively. PACIFIC STEEL: Littler Mendelson Approved to Handle Class Action ---------------------------------------------------------------- The Bankruptcy Court authorized Pacific Steel Casting Company, et al., to employ Littler Mendelson P.C. as special counsel nunc pro tunc March 10, 2014. Littler Mendelson will represent PSC regarding all matters necessary to finalize the Class Action Settlement and any and all employment law related matters, including any matters involving workers compensation claims made by current or former employees of PSC. The Debtor has asked that the Court enter an order granting the motion for employment by default. The Debtors, in their application, stated that in early 2011, agent of the Immigration and Customs Enforcement U.S. Department of Homeland Security (DHS) began an audit of the Pacific Steel's Employment Eligibility Verification Forms (commonly known as I- Forms). The DHS audit resulted in PSC terminating nearly 200 of its front-line manufacturing employees. Many of the terminated employees immediately filed worker's compensation claims against the Company, which resulted in a four-fold increase in the Company's workers-compensation insurance premium. DHS audit also precipitated the filing of a wage-an-hour class action lawsuit against PSC, entitled Roberto Rodriguez v. Pacific Steel Casting Co. filed in Alameda county Superior Court on Dec. 23, 2011. Special counsel has at all times acted as the attorney of record for the Debtor in the Class action. Special counsel's services are required to enable PSC to participate and conclude the proceedings in the Alameda County Superior Court identified in the stipulation for relief from stay. Special counsel will represent PSC in: 1. in all matters necessary to finalize the Class Action settlement and Class Action; 2. any and all matters involving workers compensation claims made by current or former employees of PSC; and 3. any and all general employment law matters and issues for which the Debtor determines in exercise of its business judgment require the counseling and guidance of special counsel. According to the Debtors, at the time of the PSC's bankruptcy filing, special counsel is owed $6,585 for prepetition services performed. Ninety days prior to the filing, PSC made these payments to special counsel: 1. $195,553 for services rendered in the class action case; 2. $5,672 for services rendered in a matter involving a DFEH (Department of Fair Employment and Housing claim by employee and creditor Maximiliano Razo; 3. $3,353 for services rendered in two arbitration matters; and 4. $3,024 for services rendered for general employment law matters. It is anticipated that these attorneys and paralegals will be utilized by special counsel in rendering services to PSC at these hourly rates: Wayne A. Hersh $499 Michael E. Brewer $495 William H. Weissman $495 Daniel L. Thieme $477 Joan M. Wakeley $468 Gavin S. Appleby $463 Marlene S. Muraco $463 Anne Marie Waggoner $405 Tarun Mehta $342 Harry De Courcy $342 Philip A. Simpkins $333 Non-Attorney Staff Anne Marie Mittelbuscher $148 Jennifer J. Donat $184 Mr. Brewer is the lead attorney managing the class action case. Charles H. Bridges, Jr., Chief Financial Officer of PSC, and Julie H. Rome-Banks, partner with Binder & Malter, LLP, bankruptcy counsel to the Debtors assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Steel Casting, Berkeley Properties Pacific Steel Casting Company and Berkeley Properties, LLC, separately filed Chapter 11 bankruptcy petitions (Bankr. N.D. Cal. Case Nos. 14-41045 and 14-41048) on March 10, 2014. Pacific Steel's petition was signed by Charles H. Bridges, Jr., chief financial officer and director. Michael W. Malter, Esq., at Binder & Malter, LLP serves as the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing and balloting agent. Burr Pilger Mayer, a certified public accounting firm, serves as financial consultants. The Debtors disclosed $36,533,644 in assets and $47,525,070 liabilities as of the Petition Date. Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. Tracy Hope Davis, the United States Trustee for Region 17, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. The Committee is represented by Ori Katz, Esq., and Michael M. Lauter, Esq., at Sheppard, Mullin, Richter & Hampton LLP. PACIFIC STEEL: Amends Schedules of Assets and Liabilities --------------------------------------------------------- Pacific Steel Casting Company filed with the U.S. Bankruptcy Court for the Northern District of California amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $36,533,644 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,702,529 E. Creditors Holding Unsecured Priority Claims $990,002 F. Creditors Holding Unsecured Non-Priority Claims $41,832,539 ----------- ----------- Total $36,533,644 $47,525,070 As reported in the Troubled Company Reporter on May 30, 2014, the Debtor disclosed $36,533,644 in assets and $47,451,378 in liabilities. A copy of the schedules is available for free at: http://bankrupt.com/misc/PACIFICSTEELCASTING_188_amendedsal.pdf About Pacific Steel Casting, Berkeley Properties Pacific Steel Casting Company and Berkeley Properties, LLC, separately filed Chapter 11 bankruptcy petitions (Bankr. N.D. Cal. Case Nos. 14-41045 and 14-41048) on March 10, 2014. Pacific Steel's petition was signed by Charles H. Bridges, Jr., chief financial officer and director. Michael W. Malter, Esq., at Binder & Malter, LLP serves as the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing and balloting agent. Burr Pilger Mayer, a certified public accounting firm, serves as financial consultants. Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. Tracy Hope Davis, the United States Trustee for Region 17, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. The Committee is represented by Ori Katz, Esq., and Michael M. Lauter, Esq., at Sheppard, Mullin, Richter & Hampton LLP. PHI GROUP: Incurs $266,000 Loss in Quarter Ended Dec. 31, 2012 -------------------------------------------------------------- PHI Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $265,978 on $0 of consulting and advisory fee income for the three months ended Dec. 31, 2012, as compared with a net loss of $61,486 on $215,000 of consulting and advisory fee income for the three months ended Dec. 31, 2011. For the six months ended Dec. 31, 2012, the Company reported a net loss of $444,058 on $0 of consulting and advisory fee income as compared with a net loss of $190,064 on $390,000 of consulting and advisory fee income for the same period last year. The Company's balance sheet at Dec. 31, 2012, showed $1.14 million in total assets, $10.42 million in total liabilities and a $9.28 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/mF0LY5 About PHI Group Huntington Beach, Cal.-based PHI Group, Inc., through its wholly owned and majority-owned subsidiaries, is engaged in a number of business activities, the scope of which includes consulting and merger and acquisition advisory services, real estate and hospitality development, mining, natural resources, energy, and investing in special situations. The Company invests in various business opportunities within its chosen scope of business, provides financial consultancy and M&A advisory services to U.S. and foreign companies, and acquires selective target companies under special situations to create additional long-term value for its shareholders. PHI Group reported a net loss of $5.15 million on $570,000 of consulting and advisory fee income for the year ended June 30, 2012, as compared with a net loss of $1.17 million on $409,317 of consulting and advisory fee income for the year ended June 30, 2011. Dave Banerjee, CPA An Accountancy Corp., in Woodland Hills, California, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditor noted that the Company has accumulated deficit of $35,814,955 and a negative cash flow from operations amounting to $1,367,705 for the year ended June 30, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. PITT PENN: Plan Confirmation Hearing Adjourned Sine Die ------------------------------------------------------- The June 19 hearing to consider confirmation of the Chapter 11 Plan for Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, has been canceled. All matters scheduled to go forward at the hearing have been adjourned to a date to be determined. The Debtors filed a notice of adjournment on June 17. Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each filed voluntary petitions for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11475 and 09-11476) on April 30, 2009. Industrial Enterprises of America, Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009. EMC Packaging, Inc., filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide Industries, LLC, and Today's Way Manufacturing LLC, each filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11587 and 09-11586) on May 6, 2009. PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of IEAM. The cases are jointly administered under Case No. 09-11475. Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington, Del., represents the Debtors as counsel. In its petition, Industrial Enterprises disclosed total assets of $50,476,697 and total debts of $17,853,997. Industrial Enterprises originally operated as a holding company with four wholly owned subsidiaries, PPH, EMC, Unifide, and Today's Way. PPH, through its wholly owned subsidiary, PPO, was a leading manufacturer, marketer and seller of automotive chemicals and additives. EMC's original business consisted of converting hydrofluorocarbon gases R134a and R152a into branded private label refrigerant and propellant products. Unifide was a leading marketer and seller of automotive chemicals and additives. Today's Way manufactured and packaged the products which were sold by Unifide. Norman L. Pernick was appointed as the chapter 11 trustee for the Debtors. The trustee tapped Cole, Schotz, Meisel, Forman & leonard, P.A., as counsel, and CohnReznick LLP as his exclusive financial advisor. PK FOOD: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------- Debtor: P.K. Food Corporation 1973 Davis Street San Leandro, CA 94577 Case No.: 14-42764 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Hon. Roger L. Efremsky Debtor's Counsel: Reno F.R. Fernandez, Esq. MACDONALD FERNANDEZ LLP 221 Sansome St. 3rd Fl. San Francisco, CA 94104 Tel: (415) 362-0449 E-mail: reno@macfern.com - and - Matthew Jon Olson, Esq. MACDONALD FERNANDEZ LLP 221 Sansome St. San Francisco, CA 94104 Tel: (415)362-0449 E-mail: matt@macfern.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Pisara Jiyipong, vice president. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/canb14-42764.pdf PRETIUM PACKAGING: S&P Withdraws 'B-' CCR at Company's Request -------------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its ratings, including its 'B-' corporate credit rating, on Missouri-based Pretium Packaging LLC at the company's request. RATINGS LIST Ratings Withdrawn To From Pretium Packaging LLC Corporate Credit Rating NR B-/Stable/-- Senior Secured NR B- Recovery Rating NR 3 PRWIRELESS INC: S&P Assigns 'CCC+' Rating on $190MM Secured Debt ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating and '3' recovery rating to PRWireless Inc.'s aggregate $190 million of proposed secured credit facilities. The 'CCC' corporate credit rating is not immediately affected by the issuance. However, S&P expects to upgrade the company to 'CCC+' shortly after the refinancing is consummated. The '3' recovery rating indicates S&P's expectation for "meaningful" (50% to 70%) recovery of principal by secured debtholders in event of a default. S&P's view of a "vulnerable" business risk profile reflects PRWireless's lack of a sustainable competitive advantage, intense competition in the small and maturing Puerto Rico wireless market, and the characteristically lower quality of the company's prepaid customer base. The company's "highly leveraged" financial risk profile incorporates S&P's base-case expectation for leverage in the mid-6x to 7x range and funds from operations to debt of 8% to 10% in 2014, with its adjustments. RECOVERY ANALYSIS Key analytical factors: -- S&P has assigned a '3' recovery rating to the company's proposed $190 million secured credit facility. -- Consistent with S&P's methodology for valuing wireless carriers, it has employed an enterprise value approach based on a multiple of projected emergence-level EBITDA as it yields a higher valuation than the book value of the company's spectrum. -- S&P's simulated default scenario assumes that increased price competition, especially from significantly larger operators in Puerto Rico (including AT&T Inc., T-Mobile, Sprint, and Claro), would impede the company's growth strategy and result in a decline in EBITDA to the point of default. -- In the event of a default, S&P assumes the assets could continue to operate as part of a reorganized entity or be sold separately. Simulated default assumptions: -- Simulated year of default: 2015 -- EBITDA at emergence: $26.9 million -- EBITDA multiple: 4x Simplified waterfall: -- Net enterprise value (after 3% administrative costs): $104 million -- Valuation split in % (obligors/nonobligors): 100/0 -- Priority claims: $2 million -- Collateral value available to secured creditors: $103 Million -- Secured first-lien debt: $198 million -- Recovery expectations: 50% to 70% Note: All debt amounts include six months of prepetition interest. RATINGS LIST PRWireless Inc. Corporate Credit Rating CCC/Negative/-- New Rating PRWireless Inc. Senior Secured US$180 mil term bank ln due 2020 CCC+ Recovery Rating 3 US$10 mil revolver bank ln due 2019 CCC+ Recovery Rating 3 QUANTUM FOODS: Private Sale of Equipment for $11.9MM Approved ------------------------------------------------------------- The Bankruptcy Court entered an order (i) approving Quantum Foods' entry into an asset purchase agreement with West Liberty Foods for $11,900,000; and (ii) authorizing the private sale of the Debtor's equipment located at facilities pursuant to the parties' asset purchase agreement, which is dated June 11, 2014. PNC Equipment Finance consents to the sale and conveyance of equipment as identified on its lease with the Debtor, including all equipment that could not be located during the PNC inspection or were sold by the Debtors, in exchange for payment to PNC in the amount of $500,000. The APA provides that the purchaser will not pay the buyer's premium or any other amount above $11,900,000 for the acquired assets. On June 19, TCF Equipment Finance, Inc., a secured creditor of the Debtor, filed a supplement to its limited objection and reservation of rights to the Debtors' sale motion. In its limited objection, TCF stated that it provided purchase- money financing for the Debtor to acquire one (1) Grasselli KSL horizontal meat slicer, serial number S16R02/420, plus P2.5 slice set and additional P4 slice set, together with all attachments and accessories thereto -- collectively, collateral 1 -- and that collateral 1 was presumed missing. TCF, in its supplement to the objection, stated that the Debtor subsequently assured TCF that Collateral 1 is not missing and is located in the poultry department of the Debtors' headquarters, however, Collateral 1 is still not addressed in the Debtors' sale motion. As reported in the Troubled Company Reporter on June 23, 2014, the Debtor received a bankruptcy judge's approval to sell its equipment at its two manufacturing facilities in Bolingbrook, Illinois. Judge Kevin Carey signed a court order authorizing the company to sell the equipment "free and clear of liens, claims, interests, and encumbrances." He also overruled objections to the sale that haven't been withdrawn or resolved. General Electric Capital Corp. also filed objections to block approval of the sale. Like the PNC and TCF objections, the GECC objections revolve around Quantum Foods' failure to get its consent to sell equipment and how much secured creditors should be getting paid. To resolve the objections, Judge Carey ordered Quantum Foods to pay $500,000 to PNC, $80,000 to TCF Equipment, and $1.9 million to GECC. The sale also drew flak from Sugar Creek Packing Co., First Industrial, L.P. and Griffin Capital, which owns the two facilities leased by Quantum Foods. First Industrial and Griffin Capital raised the issue over whether or not the company can sell equipment including those built into the facilities, which under the leases belong to the landlord. Meanwhile, Sugar Creek, which offered to buy the equipment for $13.25 million, complained why it wasn't chosen by Quantum Foods as buyer. "[Quantum Foods] has a fiduciary obligation to obtain the highest and best price for the assets, and it is evident that the bid submitted by Sugar Creek represents the highest and best price," said its lawyer, Stacy Newman, Esq., at Ashby & Geddes, in Wilmington, Delaware. Unlike West Liberty, Sugar Creek plans to move the equipment to its own facilities, thus, its bid is not contingent on reaching agreement to purchase the buildings, the lawyer further said. Quantum Foods disclosed in a previous filing that West Liberty has separately reached agreement with Griffin Capital for the purchase of the land, improvements and fixtures related to the facilities. The company said some of the equipment are difficult to remove from the facilities, and it is unlikely that any other buyer would pay more for the equipment than the consideration set forth in its sale agreement with West Liberty. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. QUECHAN INDIAN: Fitch Affirms 'B-' Issuer Default Rating -------------------------------------------------------- Fitch Ratings affirmed Quechan Indian Tribe's (Quechan; the tribe) Issuer Default Rating (IDR) at 'B-'. In addition, Fitch affirmed a 'B/RR3' rating on Quechan's approximately $30 million in outstanding tribal economic development bonds (TED bonds) and $30 million in the tribe's governmental project bonds (general obligation [GO] bonds) at 'B-/RR4'. The Rating Outlook is Stable. The tribe in 2013 refinanced all of its $98 million in outstanding revenue bonds with the proceeds from a $107 million five-year credit facility (includes a $5 million outstanding revolver that has $4.2 million outstanding as of March 31, 2014), which Fitch does not rate. The credit facility ranks pari passu to the TED bonds and has additional financial covenants including: a 1.05x fixed-charge coverage test (which includes tribal distributions), a minimum EBITDA test, maximum capital expenditure test, and a leverage maintenance test. The credit agreement does permit additional pari passu borrowings although there is a $10 million FF&E carve-out. KEY RATING DRIVERS: The affirmation of Quechan's bonds and the IDR reflects the tribe's improving credit profile, stable liquidity and the tribe's prudent fiscal management. Quechan's casino enterprise's debt/EBITDA and EBITDA/debt service ratios for the latest 12-month (LTM) period ending March 31, 2014 are 3.29x and 2.95x, respectively, or 4.05x and 2.54x including the tribe's GO bonds. This is largely in-line with the ratios from the same period last year when debt/EBITDA and EBITDA/debt service for casino recourse debt was 3.01x and 2.36x, respectively, and 3.68x and 2.11x including the GO bonds. However, this is below Fitch's forecasts from last year as the interim amortization payments only partially offset the weaker operating performance. Liquidity is adequate with the unrestricted cash at the tribal level providing for a bit over 12 months of operations without any further distributions from the casino operations. Available liquidity on the casino side is minimal but is adequate when taking into account the healthy free cash flow (FCF) at the casino enterprise before distributions to the tribe and the 1.05x fixed charge covenant in the credit agreement (subtracts the tribal distributions from the numerator). There are no near-term maturities with the exception of the sizable term loan amortization payments of $11 million - $13 million per year. Principal payments for the TED and GO bonds do not materially come into effect for several years, giving the Tribe more financial flexibility in the near term as it pays down the term loan. Fitch expects unrestricted cash levels for the Tribe to remain stable even in light of the accelerated amortization of the term loan and future mandatory sinking payments of the TED/GO bonds (beginning in 2017 and 2018, respectively). Fitch's base case liquidity analysis incorporates LTM EBITDA levels, relatively low amount of casino capital expenditures, and tribal expenditures consistent with 2013. Fitch does not give credit in the base case for investment income being generated by the tribe's reserve funds due to the potential volatility. Investment income was substantial in 2012 and 2013. Although the credit metrics are strong relative 'B-' IDR, positive rating pressure is precluded at this time given the near-term headwinds, which include the Yuma, AZ's weak operating environment and the risk of violating the credit agreement's leverage covenant for the period ending June 30, 2014. Also while Fitch expects Quechan's reserves to remain stable, there is little headroom for deterioration in casino operating performance in terms of the adequacy of the casino transfers to cover the tribe's governmental budget. Quechan's current leadership is committed to maintaining or growing its reserves, which is in contrast to three to four years ago when the risk of the tribe depleting its reserves was a more serious risk. The reduced governmental spending was spearheaded by a largely new tribal council that took office in 2011. All seven council members are up for re-election this year. Fitch will monitor the results of the election and would view the re-election of the current council members or new council members that espouse prudent fiscal management favorably. The tribe's current liquidity provides a meaningful buffer against a temporary decline in casino operations. However, a prolonged and/or more drastic decline in operations could force the tribe to take further austerity measures, which could be difficult to implement. The casinos' revenues in 2013 fell by 6.6% largely due to the weak local economy but management was able to incrementally cut costs to maintain stable margins and slightly offset the decline in EBITDA (-6% in 2013). In the first quarter of 2014 (1Q'14), revenues and EBITDA declined by 3% and 14%, respectively, but the quarter was affected by unfavorable slot and table game hold and Fitch estimates that revenue and EBITDA would be close to flat if adjusted for hold. Fitch remains cautious on revenue trends in the Yuma region given the consistently high unemployment rates and conservatively forecasts low-single-digit declines in revenue growth for Quechan's casino operations for the Fitch's base case projection horizon. The tribe is at risk of violating its leverage covenant during 2014; however, Fitch believes that the banks will be amicable in providing waivers for the covenant violations given Quechan's improving financial profile. The leverage covenant steps down to 3.25x during 2Q'14, and continues to decline in coming years. Fitch projects leverage to be above the covenant threshold at period ending June 30, 3014 (3.27x) but expects leverage to decline below the threshold by year-end 2014 as the term loan amortizes. Thereafter, Fitch projects leverage to be in compliance with the covenant until 2016 when the headroom gets tight again as the covenant steps down to 2.5x. For year-end 2016, Fitch projects leverage at 2.61x. In addition, the headroom under the minimum EBITDA covenant gets tight as the covenant is set to step up in 3Q'14 and 1Q'16. Management expects casino operations to improve for the balance of 2014 citing revenue enhancement initiatives but said that in the event EBITDA continues to be pressured the tribe is open to making adjustments to its governmental spending to preserve liquidity. TRANSACTION RATINGS Fitch views prospects for the TED bonds in terms of probability of default and recovery in case of default as distinctly better relative to the GO bonds. This is because the TED bonds are backed by casino revenues, whereas the GO bonds are not. The revenue pledge is strengthened by a trustee-controlled flow of funds that ensures the bond debt service is paid prior to any tribal distribution. The flow of funds is sprung if coverage falls below 1.65x. As of March 31, 2014, coverage of debt service was at 2.95x. This mechanism allows Fitch to partially segregate the credit risk of the casino operations from the tribe, which has a weaker credit profile. However, the tribal credit profile is still heavily factored into the TED bond ratings, since significant distress on the tribal side may potentially force the TED bondholders or lenders to make concessions to allow the tribe to maintain adequate liquidity and critical governmental services. RATING SENSITIVITIES: Quechan's IDR can move toward the mid-end of the 'B' rating category over the medium term (approximately two to three years) as credit metrics strengthen further, tribal liquidity improves, and/or casino EBITDA expands. Specific rating triggers include: Positive: Future developments that in some combination could lead to positive rating actions include: -- Casino level debt/EBITDA declining and remaining below 3x and 3.5x including the GO bonds; -- Tribe maintaining prudent fiscal management practices (i.e. adjusting governmental spending to match casino distributions and other revenue sources); -- Quechan maintaining or increasing tribal cash reserves. Reserves can currently sustain roughly over 12 months of operations without additional casino distributions; -- Comply with the credit agreement's financial covenants. Absent compliance, either amend the minimum EBITDA and maximum leverage covenants or display a track record of having these covenants waived without significant penalties. Negative: Future developments that in some combination could lead to negative rating action include: -- Casino level debt/EBITDA ratio exceeding 4.0x (4.5x with GO bonds) for an extended period of time; -- Tribe deviating from prudent fiscal management (e.g. increases per cap payments at expense of depleting tribal reserves); -- Tribal reserves declining to a point that the Tribe can only cover about six months of operations without casino distributions. The Tribe's cash position fluctuates seasonally (first quarter being the highest point); therefore, there is some room for dips in cash levels during the low months (summer); -- Tribe has difficulty obtaining waiver(s) for breaching financial covenants. Fitch has affirmed the following ratings: Quechan Indian Tribe -- Long-term IDR at 'B-'; -- Tribal economic development bonds at 'B/RR3'; -- Governmental Project Bonds at 'B-/RR4'. RCH INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: RCH Investments, Inc. dba Ray Envelope Company, Inc. P.O. Box 19187 Indianapolis, IN 46219 Case No.: 14-06077 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Hon. Robyn L. Moberly Debtor's Counsel: John Joseph Allman, Esq. TUCKER, HESTER, BAKER & KREBS, LLC One Indiana Square, Suite 1600 Indianapolis, IN 46204 Tel: 317-833-3030 Fax: 317-833-3031 E-mail: jallman@thbklaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Chris E. Hester, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. REPUBLIC OF TEXAS: Chapter 11 Exit Strategy Right on Target ----------------------------------------------------------- Republic of Texas Brands, Inc. says its Chapter 11 exit strategy is right on target with a new beverage industry executive Tom Shuman at the helm as the new CEO. The planned merger with CHILL Texas is a top priority as the Company exits voluntary Chapter 11 and details of the merger will be released after the Court formally approves the Bankruptcy plan as early as next week. The synergy created with the marketing of popular hemp based products CHILLO-energy drink and C-Swiss Iced Tea has opened a sizeable Texan customer base and will open the gateway for an easy entry of our own locally produced hemp-based Iced Tea drink. Mr. Shuman's 30 years of beverage industry experience and countless marketing contacts with retailers such as Albertsons, Wal-Mart, Sam's Club and 7-Eleven will allow the product launch to be in many large beverage retailers hands right from the start. "We have finalized our new Hemp Iced Tea drink formula with the bottler and we have decided to go with a slim line 12 ounce can that will provide the company with attractive profit margins while offering the consumer a competitively priced product. Our initial production run will be a minimum of 5,000 cases and we have finalized the can design with the marketing company who has done an excellent job designing the labeling on the new cans. We have already applied for the trademark of the new brand and we will announce the new name of the product as soon it has cleared the trademark office," states Mr. Shuman, the new company CEO. "We want to once again remind our shareholders that the share structure will be improved post Chapter 11 with a reduction of the Authorized Shares to 400,000,000 and the Outstanding Shares will be reduced to approximately 202,000,000 shares." About Republic of Texas Brands Incorporated Republic of Texas Brands Incorporated's mission is to find the premier cannabis and hemp industry innovators, leveraging its team of professionals to source, evaluate and purchase value-added companies and products, while allowing them to keep their integrity and entrepreneurial spirit. The company filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 13-bk-36434) on Dec. 17, 2013. The company estimated assets of $0 to $50,000 and liabilities of $500,001 to $1 million. Judge Barbara J. Houser presides over the case. The Debtor is represented by: Eric A. Liepins ERIC A. LIEPINS, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com RESTORGENEX CORP: Files Financial Statements of Paloma Pharma ------------------------------------------------------------- RestorGenex Corporation previously reported with the U.S. Securities and Exchange Commission its acquisition of Paloma Pharmaceuticals, Inc., on March 28, 2014, pursuant to an Agreement and Plan of Merger with Paloma Merger Sub, Inc., Paloma and David Sherris, Ph.D. The Company amended the original report to provide the financial statements of Paloma. Paloma posted net income of $255,415 on $0 of revenues for the year ended Dec. 31, 2013, as compared with a net loss of $1.12 million on $0 of revenues during the prior year. As of Dec. 31, 2013, the Company had $848,162 in total assets, $2.54 million in total liabilities and a $1.69 million total stockholders' deficit. A full-text copy of Paloma's Consolidated Financial Statements for the years ended Dec. 31, 2013, and 2012 is available for free at: http://is.gd/6EvC32 A full-text copy of the Pro Forma Consolidated Statements of Paloma is available for free at http://is.gd/z8HYfQ About RestorGenex RestorGenex Corporation operates as a biopharmaceutical company. It focuses on dermatology, ocular disease, and women's health areas. The company was formerly known as Stratus Media Group, Inc., and changed its name to RestorGenex Corporation in March 2014. RestorGenex Corporation is based in Los Angeles, California. Restorgenex reported a net loss of $2.45 million in 2013 following a net loss of $6.85 million in 2012. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that RestorGenex Corporation has suffered recurring losses and has negative cash flow from operations. These conditions raise substantial doubt as to the ability of RestorGenex Corporation to continue as a going concern. RESTORGENEX CORP: Ally Bridge Reports 8.7% Equity Stake ------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Ally Bridge Group Capital Partners II, L.P., and ABG II-USL1 Limited disclosed that as of June 13, 2014, they beneficially owned 1,625,000 shares of common stock of RestorGenex corp representing 8.7 percent of the shares outstanding. A full- text copy of the regulatory filing is available at: http://is.gd/vu3572 About RestorGenex RestorGenex Corporation operates as a biopharmaceutical company. It focuses on dermatology, ocular disease, and women's health areas. The company was formerly known as Stratus Media Group, Inc., and changed its name to RestorGenex Corporation in March 2014. RestorGenex Corporation is based in Los Angeles, California. Restorgenex reported a net loss of $2.45 million in 2013 following a net loss of $6.85 million in 2012. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that RestorGenex Corporation has suffered recurring losses and has negative cash flow from operations. These conditions raise substantial doubt as to the ability of RestorGenex Corporation to continue as a going concern. REVEL AC: Has Interim $23.5 Million DIP Loan Approval ----------------------------------------------------- Judge Gloria Burns of the U.S. Bankruptcy Court for the District of New Jersey gave Revel AC, Inc., et al., interim authority to obtain postpetition financing up to an aggregate principal amount of $23.5 million, of which $1.9 million is available only for issuance of letters of credit, from Wells Fargo Bank, N.A., as administrative agent and collateral agent; Wells Fargo Bank, N.A., as letter of credit issuer; and Wells Fargo Principal Lending, LLC, and other lenders. The Debtors were also given interim authority to use cash collateral securing their prepetition indebtedness. A full-text copy of the Interim DIP Order with Budget is available at http://bankrupt.com/misc/REVELdipord0620.pdf The final hearing on the DIP Motion is scheduled for July 30, 2014, at 10:00 a.m. (EST). The DIP financing will increase to $41.9 million upon approval by the Court at the final hearing. Objections to the DIP Motion must be filed no later than July 23. Moreover, the Debtors obtained interim authority to file under seal letters relating to fees to be paid under the DIP Documents. The Debtors asserted in papers filed in court that the Fee Letter must be filed under seal because it contains commercially sensitive information, the disclosure of which could have a "chilling effect," discouraging the DIP Lenders and other competitor institutions from providing DIP financing to the Debtors. The final hearing on the Debtors' request to file the Fee Letter under seal will be on Aug. 11, at 10:00 a.m. (EST). Objections are due July 7. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J., Lead Case No. 14-22654) on June 19, 2014, listing assets ranging from $500 million to $1 billion, and the same amount of liabilities. The case is assigned to Judge Gloria M. Burns. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' counsel. The Debtors' claims and noticing agent is Alixpartners, LLP. This is Revel AC's second trip to bankruptcy. The company, along with four affiliates first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, with a prepackaged plan that reduces debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. REVEL AC: Has Interim OK to Hire AlixPartners as Claims Agent ------------------------------------------------------------- Judge Gloria Burns of the U.S. Bankruptcy Court for the District of New Jersey gave Revel AC, Inc., et al., interim authority to employ AlixPartners, LLP, as claims and noticing agent. The Court gave the U.S. Trustee until July 19, 2014, or as otherwise extended by agreement of the parties, to file an objection to the employment application. If at the expiration of the period, no objection was filed, the Interim Order will become final without further order from the Court. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J., Lead Case No. 14-22654) on June 19, 2014, listing assets ranging from $500 million to $1 billion, and the same amount of liabilities. The case is assigned to Judge Gloria M. Burns. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' counsel. The Debtors' claims and noticing agent is Alixpartners, LLP. This is Revel AC's second trip to bankruptcy. The company, along with four affiliates first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, with a prepackaged plan that reduces debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. REVEL AC: Has Interim Authority to Pay $3.5MM to Critical Vendors ----------------------------------------------------------------- Judge Gloria Burns of the U.S. Bankruptcy Court for the District of New Jersey gave Revel AC, Inc., et al., interim authority to make payments in an aggregate amount not to exceed $2.5 million, with no one essential vendor receiving more than $385,000. The final hearing on the motion will be held on July 11, 2014, at 10:00 a.m., prevailing Eastern Time. Objections are due July 7. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J., Lead Case No. 14-22654) on June 19, 2014, listing assets ranging from $500 million to $1 billion, and the same amount of liabilities. The case is assigned to Judge Gloria M. Burns. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' counsel. The Debtors' claims and noticing agent is Alixpartners, LLP. This is Revel AC's second trip to bankruptcy. The company, along with four affiliates first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, with a prepackaged plan that reduces debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. RICCO INC: Court Approves Report on Trustee's Sale of Assets ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of West Virginia approved the results of the Chapter 11 trustee's sale by auction of Ricco, Inc.'s real estate. Counsel for Robert L. Johns, the trustee, reported to the Court the results of the auction sale conducted on Nov. 13, 2013, including that the highest bid received for the bundle of all real estate owned by Ricco, Inc. located in West Virginia was $190,000 (plus a 5% buyer's premium of $9,500. The highest bid was made by William McIntyre, the purchaser. The Ricco West virginia property will be sold without warranty, on an "as is, where is" basis. The trustee is also authorized to distribute the proceeds of the sale of the Ricco West Virginia property in payment for transfer taxes, taxes constituting a lien on the estate properties, auction advertising expenses among others. As reported in the Troubled Company Reporter on Dec. 17, 2013, the Court authorized the trustee to sell: -- real estate consisting of the Ricco Maryland property for $290,000 plus 5 percent buyer's premium of $14,500; and -- both the Debtor's interests of 86 percent and the interest of the non-debtor partners of Lupa Tana Partners for $830,000 plus 5 percent buyer's premium of $41,500. As reported in the TCR on Oct. 23, 2013, the Court authorized the trustee to hire Joe R. Pyle Auction & Realty Company as auctioneer to assist the trustee in the sale. As reported in the TCR on Sept. 19, 2013, the real estate to be sold consists of various parcels of surface and minerals, totaling approximately 1,590.71 acres of surface only or surface and minerals and 3,250.3709 acres of minerals only, located in Garrett County, Maryland and Mineral and Grant Counties, West Virginia. About Ricco Inc. Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners, Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos Partners -- filed for Chapter 11 bankruptcy protection on Jan. 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). In its schedules, the Debtor disclosed $15,162,600 in assets and $4,093,674 in liabilities as of the Petition Date. Wendel B. Turner, Esq., and Robert L. Johns, Esq., at Turner & Johns, PLLC, in Charleston, West Va., represent Robert L. Johns, Chapter 11 Trustee as counsel. David M. Thomas, Esq., and Michael R. Proctor, Esq., at Dinsmore and Shohl LLP, in Morgantown, W. Va., represent the Official Committee of Unsecured Creditors as counsel. RJS POWER: Moody's Assigns B1 Rating on $1.25BB Unsecured Notes --------------------------------------------------------------- Moody's Investors Service has assigned a rating of B1 to RJS Power Holdings LLC's planned $1,250 million five year senior unsecured notes. Proceeds of the unsecured notes will be primarily used to refinance a similar amount of secured project finance debt at three indirect owners of certain electric generating companies, Raven Power Finance LLC (Raven: B1 stable), Topaz Power Holdings, LLC (Topaz: B1 negative) and Sapphire Power Finance LLC (Sapphire: B1 negative), all of which are subsidiaries of companies owned indirectly by affiliates of Riverstone Holdings LLC (Riverstone) and management, and which are managed by Topaz Power Management, LP. The positive outlook reflects the potential for upward movement in the rating in the event that Riverstone's announced combination with PPL Energy Supply, LLC (PPL Supply: Ba1 negative) into a new company to be called Talen Energy Corporation (Talen) closes as anticipated. Ratings Rationale The B1 rating is reflective of the financial performance, prospects and diversity of the RJS merchant generating portfolio which Moody's expect will provide a basis for more stable operating and cash flow performance than that historically observed for the individual portfolio companies. The portfolio will sell power on an entirely merchant/competitive basis; however, there are some legacy hedge positions at the Sapphire and Topaz portfolios as well as some more recently placed short-term positions. Additional cash flow stability comes from capacity payments that will be received on the approximately two thirds of the portfolio located in PJM and ISO-NE. The rating recognizes the notes are being issued by a holding company, without the benefit of upstream guarantees from the prior Raven, Sapphire and Topaz entities, which places the lenders in a legally and structurally subordinate position vis-...-vis the hedge counterparties at those facilities as well as the lenders under RJS' planned $150 secured revolving credit facility. RJS will be formed by combining the Raven (2.6 GW), Topaz (1.9 GW) and Sapphire (0.8 GW) merchant generating portfolios into an entity that will hold approximately 5.3 GW of capacity in the competitive PJM Interconnection (PJM) (3.3GW), Electric Reliability Council of Texas (ERCOT) (1.8GW), and ISO New England (ISO-NE) (0.1 GW) power markets. About 40% of the portfolio will be coal-fired (2.1 GW in PJM), about 53% will be gas-fired (1.9 GW in ERCOT, 0.8 GW in PJM, 0.1 in ISO-NE), and about 8% oil-fired (0.4 GW in PJM). The potential advantages of this market and fuel diversity can be exemplified by the performance of the individual underlying portfolios during the extreme weather conditions in the early part of 2014. The abnormally cold "Polar Vortex" conditions in early 2014 highlighted the locational (Baltimore) and fuel advantages of the Raven coal and oil fired merchant fleet which was able to sell power during periods of extreme price spikes generating revenue and cash flow that were greatly in excess of expectations. The result was an early sweep of excess cash to repay debt and to pay a dividend to the sponsors. On the other hand, for the gas-fired primarily New Jersey based Sapphire assets, these same Polar Vortex conditions led to abnormal gas basis widening and forced outages caused by an inability for some projects to obtain natural gas. As a result, the portfolio incurred settlement charges under its hedges agreements that were much higher than anticipated and led management to decide to early terminate one such agreement. For the ERCOT based Topaz assets, weather conditions in the early part of 2014 were less extreme, and the portfolio's financial performance actually exceeded management's first quarter budget by a modest amount. However, Topaz 2014 budget was set based on a significantly more conservative view of near-term market conditions then existed at the time of its February 2013 refinancing. In general, power prices in ERCOT continue to be weaker than management's original expectations, and based on its 2014 budget, absent the refinancing Moody's believe it is possible that Topaz would be in violation of its leverage covenant later in the year. Going forward, Moody's anticipate the results of the larger RJS portfolio will be more stable and predictable and Moody's believe the company is well positioned to benefit from tightening reserve margins in both the ERCOT and PJM markets. Over the next few years, Moody's expect RJS to demonstrate cash flow credit metrics (funds from operations to debt and debt service coverage ratio) that are in the mid-to-high B or low Ba scoring ranges indicated in our rating methodology for Power Generation Projects (the Methodology). RJS will also benefit from operational diversification as the portfolio will be comprised of 15 individual generating stations, many of which have multiple units including some with dual fuel capabilities. Overall, on average, the operating history of the underlying portfolios has been satisfactory, but the plants are not new (commercial operation dates range from 1956 -- 2010) and individual annual plant performance statistics reflect the impact of forced outages. The more recently converted (2010) combined cycle plants at Topaz have also undergone additional maintenance and inspections due to fleet wide turbine blade issues that are being monitored by the equipment provider. Going forward, outages at one or two individual units would be expected to have a smaller impact on the overall operational and financial results of the larger portfolio. The portfolio will sell power on an entirely merchant/competitive basis; however, there are some legacy hedge positions remaining at the Sapphire and Topaz portfolios as well as some more recently placed short-term positions. As a result, about 55% of MWs are hedged in 2014; about 20% through 2015 and about 11% through 2016. Moody's expect management will continue to opportunistically layer on additional hedge positions, particularly for the prompt year, although there is no requirement for them to do so. The RJS notes are being issued by a portfolio holding company without most of the traditional project finance protections currently provided to the existing lenders at Raven, Topaz and Sapphire, such as security, dedicated debt service reserve facilities, control of accounts and an amortizing debt schedule. Liquidity for RJS will be provided via a $150 million senior secured credit facility that will rank ahead of the notes and will contain financial covenants. In addition, although the existing project level debt will be refinanced, hedging will continue to be done on a secured basis and will rank prior to RJS note obligations. The notes will contain covenants restricting things such as additional debt, asset sales, and dividends; however they will all have significant carve-outs or allowances and in general are much weaker than those typically found in a secured project financing structure. To the extent the combination with PPL occurs as anticipated, these limited restrictions would all fall away. On June 9, 2014, Riverstone and PPL Corporation (PPL: Baa3 positive) announced their intention to combine their merchant power generation businesses into a new company, to be called Talen, which would hold approximately 15 GWs of diverse generating capacity, comprised of approximately 40% natural gas, 40% coal and 15% nuclear facilities. Should the transaction be completed as announced, Moody's understand the RJS notes would travel to Talen where they would become pari-passu with approximately $2.5 billion of existing PPL Supply senior unsecured bonds. Moody's view this potential combination of RJS into a larger, better positioned and relatively lightly leveraged family as a credit positive. The rating outlook is positive reflecting the potential upward movement in the rating that Moody's believe would likely occur if the announced combination with PPL Supply occurs as generally anticipated. Moody's understand that closing is anticipated to occur by the second quarter of 2015. Given the positive outlook, downward movement in the rating over the near-to-medium term is viewed as unlikely; however, persistent weakness in power markets, significant increase in unplanned outages or significant increases in costs relating to environmental or other expenditures could produce negative rating pressure. An addition of debt, or sustained reduction in cash flow that leads us to expect the ratio of funds from operations to debt to remain near the lower end of the B scoring range indicated in the Methodology could also lead to downward rating movement. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing and model outputs consistent with initially projected credit metrics and cash flows. Moody's intends to withdraw the ratings at Raven, Topaz, and Sapphire shortly after the closing of the RJS notes and the subsequent repayment of debt at each of the Riverstone project entities. RJS is owned indirectly by affiliates of Riverstone and management and holds indirectly the approximately 5.3 GW of generating capacity of Raven, Topaz and Sapphire at 15 sites located in Maryland, Texas, New Jersey, Pennsylvania and Massachusetts. The assets are managed by Topaz Power Management, LP. The methodologies used in this rating were Power Generation Projects published in December 2012, and Unregulated Utilities and Power Companies published in August 2009. SABERCAT NEIGHBORHOOD: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Sabercat Neighborhood Center, LLC 1820 Elmwood Road Hillsborough, CA 94010 Case No.: 14-30972 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Hon. Dennis Montali Debtor's Counsel: Gregory A. Rougeau, Esq. DIAMOND MCCARTHY LLP 150 California St. #2200 San Francisco, CA 94111 Tel: (415) 283-1776 E-mail: grougeau@diamondmccarthy.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Victor Lo, authorized agent. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. SERVICEMASTER CO: Moody's Affirms 'B3' Corp. Family Rating ---------------------------------------------------------- Moody's Investors Service affirmed The Servicemaster Company, LLC's B3 Corporate Family rating ("CFR"), B3-PD Probability of Default rating ("PDR"), Caa1 senior unsecured (guaranteed), Caa2 senior unsecured (not guaranteed) and SGL-2 Speculative Grade Liquidity rating ("SGL"). In addition, the senior secured ratings were changed to definitive B2 from (P)B2 upon pricing of the company's initial public offering. Moody's also revised the ratings outlook to stable from negative. On June 26, 2014, Servicemaster raised approximately $600 million of cash proceeds from an initial public offering of primary shares ("IPO"). The IPO is a condition to the closing of the new senior secured revolving credit facility due 2019 and senior secured term loan due 2021, which Moody's expects will close once the IPO funds. The IPO and new term loan proceeds will be used to repay the existing senior secured debt, redeem a portion of the existing senior unsecured notes due 2020, pay related fees and expenses and add to balance sheet cash. The ratings on the existing senior secured debt will be withdrawn when they are repaid. Ratings Rationale Following the IPO, Moody's expects ServiceMaster to remain highly leveraged, with debt to EBITDA (after Moody's standard adjustments) of about 7.0 times expected for the year ending 2014. However, Moody's anticipates ServiceMaster will remain profitable, generate at least $450 million of EBITDA, $100 million of free cash flow and maintain its leading position in its termite and pest management and home warranty businesses, lending support to the ratings. Moody's considers ServiceMaster's liquidity good. The change to a stable ratings outlook reflects Servicemaster's reduced financial leverage and greater operating flexibility after the IPO that Moody's believes will provide ServiceMaster with time to attempt to reverse customer count declines at Terminix. The ratings could be downgraded if Servicemaster's steady revenue and profit growth trajectory is interrupted, leading to free cash flow declines and diminished liquidity. The ratings could be upgraded if, through steady revenue and profitability growth in major business segments, ServiceMaster reduces financial leverage and grows free cash flow, while maintaining good liquidity and balanced financial policies. If Moody's expects debt to EBITDA and free cash flow to debt will be sustained at less than 5.5 times and above 5%, respectively, the ratings could be raised. Affirmations: Issuer: ServiceMaster Company, LLC (The) Corporate Family rating, B3 Probability of Default rating, B3-PD Speculative Grade Liquidity rating, SGL-2 Senior Unsecured Bond due August 15, 2020, Affirmed Caa1 Senior Unsecured Bond due February 15, 2020, Affirmed Caa1 Issuer: ServiceMaster Company (The) (Old) Senior Unsecured Bond/ due March 1, 2038, Affirmed Caa2 Senior Unsecured Bond due March 1, 2018, Affirmed Caa2 Issuer: ServiceMaster Company LimitedPartnership(The) Senior Unsecured Bond due August 15, 2027, Affirmed Caa2 Changed to definitive: Issuer: ServiceMaster Company, LLC (The) Senior Secured Revolving Credit Facility due 2019, B2 Senior Secured Term Loan due 2021, B2 Outlook Actions: Issuer: ServiceMaster Company, LLC (The) Issuer: ServiceMaster Company (The) (Old) Issuer: ServiceMaster Company Limited Partnership(The) Outlook, Changed To Stable From Negative 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. ServiceMaster is a national provider of termite and pest control, home service contracts, cleaning and disaster restoration, house cleaning, furniture repair and home inspection products and services through company-owned operations and franchise licenses. Brands include: Terminix, American Home Shield (AHS), ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. SERVICEMASTER CO: S&P Ups CCR to 'B' on Stronger Credit Measures ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Memphis-based The ServiceMaster Co. LLC to 'B' from 'B-', and removed the rating from CreditWatch, where S&P placed it with positive implications on May 8, 2014. The outlook is stable. "At the same time, we raised our issue ratings on the group's legacy senior secured facilities to 'B+' from 'B'. The recovery rating on these facilities is '2', indicating our expectation for modest recovery (70% to 90%) for lenders in the event of a payment default. We also raised our issue ratings on the group's legacy senior unsecured notes to 'B-' from 'CCC+'. The '5' recovery rating on these notes indicates our expectation for modest recovery (10% to 30%) for lenders in the event of a payment default. Concurrently, we removed the legacy secured and unsecured ratings from CreditWatch, where they were placed with positive implications on May 8, 2014," S&P said. In addition, S&P affirmed its 'B+' issue-level ratings on ServiceMaster's proposed senior secured $300 million revolving credit facility and $1.825 billion term facilities. The recovery rating on these facilities is '2'. Proceeds from the proposed credit facility will be used for debt repayment. These ratings are subject to review upon receipt and review of final documentation. "The upgrade reflects ServiceMaster modestly strengthening its credit metrics and our expectation the operating performance will improve given the spin-off of its underperforming TruGreen business," said Standard & Poor's credit analyst Linda Phelps. On June 26, 2014, the company successfully completed an IPO, raising about $700 million in gross proceeds, which will be used to reduce its currently high debt levels. "We estimate pro forma for the transactions that debt to EBITDA will be about 7x, down from 7.8x for the 12 months ended March 31, 2014," said Ms. Phelps. "Moreover, the company's operating efficiency and profitability will improve as a result of the TruGreen spin-off. Therefore, we forecast gradual improvements in credit measures over the next two years." The ratings reflect S&P's view that ServiceMaster has a "weak" business risk profile and "highly leveraged" financial risk profile. The business risk assessment incorporates ServiceMaster's participation in fragmented and highly competitive businesses and its vulnerability to declines in economic conditions, particularly given the discretionary nature of commercial and consumer spending for its services. S&P's financial risk assessment reflects its expectation that leverage will remain near 7x and funds from operations (FFO) to total debt will be less than 8% over the next 12 to 24 months. S&P believes that credit protection measures will improve only slightly over time, remaining consistent with a highly leveraged financial risk profile. SEVEN COUNTIES: Court Approves Use of Fifth Third Cash Collateral ----------------------------------------------------------------- The Bankruptcy Court approves Seven Counties Services, Inc.'s continued use of cash collateral of Fifth Third Bank. Seven Counties' obligations to Fifth Third include: (a) obligations under a revolving line of credit with Fifth Third as evidenced by a revolving note executed on October 25, 2010; (b) obligations under reimbursement agreements dated February 1, 1999, December 1, 2005, and December 1, 2011, in connection with which Fifth Third issued letters of credit to secure bonds for which Bank of New York Mellon is the bond trustee. Seven Counties' obligations are secured by first priority mortgage liens in real property. In addition, Fifth Third claims a first priority security interest in Seven Counties' cash collateral to secure amounts owed. Fifth Third filed a UCC-1 financing statement filed with the Kentucky Secretary of State on May 29, 2007. At the time of the bankruptcy filing, Seven Counties and Fifth Third believe the amount owed under the note was $1,580,000. The automatic stay provided by Section 362 of the Bankruptcy Code was lifted to allow Fifth Third to set off $1,580,000 from Seven Counties' operating account against the principal and interest amount due pursuant to the note. Fifth Third claims the letters of credit principal exposure is $5.5 million. The Bank of New York has not applied the letters of credit to the bond obligations. Seven Counties' authority to use cash collateral is subject to these conditions: (a) it will operate in substantial compliance with the budget, which it may modify, but only with the prior written consent of Fifth Third, provided, however, that it will not make any capital expenditure in excess of $50,000 unless it first obtains authority from the Court; and (b) it will deposit all cash collateral either at Fifth Third or in one or more segregated debtor-in-possession deposit accounts, with the financial institution holding the account(s) having no rights of offset or other rights, except as necessary to cover customary fees and postpetition draws on the deposit account. Seven Counties is represented by: David M. Cantor, Esq. Neil C. Bordy, Esq. Charity B. Neukomm, Esq. Tyler R. Yeager, Esq. James E. McGhee III, Esq. SEILLER WATERMAN LLC 22nd Floor-Meidinger Tower 462 S. Fourth Street Louisville, KY 40202 Telephone: (502) 584-7400 Facsimile: (502) 583-2100 E-mail: cantor@derbycitylaw.com bordy@derbycitylaw.com neukomm@derbycitylaw.com yeager@derbycitylaw.com mcghee@derbycitylaw.com Fifth Third Bank is represented by: Brian H. Meldrum STITES & HARBISON PLLC 400 West Market Street, Suite 1800 Louisville, KY 40202 Telephone: (502) 587-3400 Facsimile: (502) 587-6391 E-mail: bmeldrum@stites.com - and - Robert C. Goodrich, Jr. Stites & Harbison PLLC 401 Commerce Street, Suite 800 Nashville, TN 37219 Telephone: (615) 782-2200 Facsimile: (615) 782-2371 Counsel for Fifth Third Bank About Seven Counties Seven Counties Services Inc., a not-for-profit behavioral services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) on April 4, 2013. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. Bingham Greenebaum Doll LLP and Wyatt, Tarrant & Combs LLP have been retained by the Debtor as special counsel. Hall, Render, Killian, Heath & Lyman, PLLC, is special counsel to represent and advise it in the implementation of its new software system. Peritus Public Relations, LLC, has been tapped to provide public relations and public affairs support in Kentucky. SHELBOURNE NORTH WATER: Perkins+Will Seeks Dismissal of Case ------------------------------------------------------------ A creditor of Shelbourne North Water Street L.P. asked the U.S. Bankruptcy Court for the Northern District of Illinois to dismiss the company's Chapter 11 case or convert it to a Chapter 7 liquidation. Perkins+Will, Inc. said the company is in dissolution, therefore, is not "eligible" to be in Chapter 11 protection. In its motion filed with the court, Perkins+Will explained how the dissolution of Trentor, an Irish company, "launched a cascade of dissolutions through [SNWS'] corporate structure." According to the filing, Trentor, a sole member of Shelbourne North Water Management LLC, was dissolved in 2012 and ceased to be a member of the company, which is reportedly the sole general partner of SNWS. Trentor's dissolution caused Shelbourne to be dissolved, triggering the withdrawal of the company as SNWS' general partner and resulting in the dissolution of SNWS, Perkins+Will said in the filing. SNWS Objects Attorney for SNWS, Joseph Frank, Esq., at Frankgecker LLP, in Chicago, Illinois, asked the court to deny the motion, saying the company and its general and limited partners "remain in good standing," rendering the company able to satisfy the requirements of section 109 of the Bankruptcy Code. Trentor "has no actual direct or indirect ownership interest" in SNWS, Mr. Frank further said. A court hearing will be held on July 15 to consider the dismissal or conversion of SNWS' bankruptcy case. Perkins+Will is represented by: Michael W. Ott, Esq. Jeffrey D. Eaton, Esq. SCHIFF HARDIN LLP 233 South Wacker Drive, Suite 6600 Chicago, Illinois 60606 Phone: (312) 258-5500 Fax: (312) 258-5600 E-mail: jeaton@schiffhardin.com -- and -- Louis T. DeLucia, Esq. Alyson M. Fiedler, Esq. Andrew M. Minear, Esq. SCHIFF HARDIN LLP 666 Fifth Avenue, 17th Floor New York, New York 10103 Phone: (212) 753?5000 Fax: (212) 753?5044 E-mail: ldelucia@schiffhardin.com About Shelbourne North Water Street L.P. A group of creditors filed an involuntary Chapter 11 petition against Chicago, Illinois-based Shelbourne North Water Street L.P. (Bankr. D. Del. Case No. 13-12652) on Oct. 10, 2013. The case is assigned to Judge Kevin J. Carey. The petitioners are represented by Zachary I Shapiro, Esq., and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. The Debtor consented on Nov. 8, 2013, to being in Chapter 11 reorganization. FrankGecker LLP represents the Debtor in its restructuring effort. SINO-FOREST CORP: Reaches Partial Class Action Settlement --------------------------------------------------------- Cohen Milstein Sellers & Toll PLLC on June 27 disclosed that there has been a partial settlement reached in several class action lawsuits pending in Canada and the United States brought on behalf of purchasers of securities in Sino-Forest Corporation. The total settlement is in the amount of CAD $4.2 million (approximately USD$3.9 million). Named plaintiffs in the Canadian class actions, along with Lead Plaintiffs in the U.S. class action, reached the settlement with David J. Horsley, a former officer of SFC, in May 2014. On March 30, 2012, SFC obtained creditor protection in Canada under the Companies' Creditors Arrangement Act, and the Ontario Superior Court of Justice ordered a stay of proceedings against the company and other parties. The CCAA Proceeding was recognized by the United States Bankruptcy Court for the Southern District of New York on February 4, 2013, and subsequently a settlement for CAD $117 million with Ernst & Young was approved by the Ontario Court and recognized by the U.S. Bankruptcy Court. If approved and recognized, the Horsley Settlement will be funded through the Sino-Forest Canadian class actions and held in escrow for the benefit of the Canadian Class and the U.S. Class. The distribution of the settlement fund will be subject to a further order of the Ontario Court. The final approval hearing for the Horsley Settlement will take place on July 24, 2014 at 9:00 a.m. (EST), before the Ontario Court. A simultaneous hearing relating to recognition of the final approval order will take place in the U.S. Bankruptcy Court. The Courts will likely be linked by video conference. Objections to the approval of the Horsley Settlement and/or the recognition of that approval in the United States must be filed by July 17, 2014 with the respective courts. A notice regarding the details of the Horsley Settlement has been sent to class members in the United States and Canada. If you have not received one or if you would like further information on the Horsley Settlement and the SFC class actions, visit: http://www.cohenmilstein.com/cases/274/sino-forestor contact Richard Speirs of Cohen Milstein Sellers & Toll PLLC at 88 Pine Street, New York, New York 10005, (212) 838-7797. Founded in 1969, Cohen Milstein Sellers & Toll PLLC -- http://www.cohenmilstein.com-- is a national leader in plaintiff class action lawsuits and litigation. As one of the premier firms in the country handling major complex cases, Cohen Milstein, with 80 attorneys, has offices in Washington, D.C., New York, Philadelphia, Chicago, and Palm Beach Gardens, Fla. About Sino-Forest Corp. Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. FTI Consulting commenced a Chapter 15 case for Sino-Forest in New York (Bankr. S.D.N.Y. Case No. 13-10361) to give force and effect of Sino-Forest's plan of compromise and reorganization that has been sanctioned by creditors and an Ontario court. The Chapter 15 petition claimed assets and debt both exceed $1 billion. Jeremy C. Hollembeak, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, serves as counsel in the U.S. case. SKYVIEW ACADEMY: S&P Assigns 'BB+' Rating on $29.19MM Bonds ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to the Colorado Educational and Cultural Facilities Authority's $29.19 million series 2014 fixed rate charter school refunding and improvement revenue bonds issued for SkyView Academy. The outlook is stable. "The rating reflects our assessment of SkyView's strong business position and solid demand characteristics that support the achievability of the school's growth plans," said Standard & Poor's credit analyst Luke Gildner. "We also expect the school to meet its enrollment projections." Factors restraining the rating are a highly leveraged balance sheet, very high debt burden, and historical operating performance that does not provide adequate pro forma maximum annual debt service (MADS) coverage. Management plans to use the proceeds of the bonds to refund and restructure debt issued in 2012 as well as finance additional improvements to the facilities which consist of installing a new roof and fire prevention sprinkler system as well as expand the existing parking lot. Bond proceeds will also pay for the costs of issuance and fund a debt service reserve. The stable outlook reflects S&P's expectation that during the next year management will meet enrollment and financial projections. S&P expects operations for fiscal 2014 will be about break even on a full accrual basis and liquidity will be stable. S&P do not expect to take a positive rating action during the one- year outlook period; however S&P could take a positive rating action if the charter school's operating performance is strong on a consistent basis leading to pro forma MADS coverage of at least 1.2x while maintaining current liquidity. S&P could lower the rating if enrollment does not increase as projected, operations weaken, or the balance sheet deteriorates to less than 45 days' cash on hand. SkyView is a prekindergarten-through-12 charter school situated on one campus located in Highland Ranch, Colorado. SOURCE HOME: Has Interim Authority to Use Cash Collateral --------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware gave Source Home Entertainment, LLC, et al., interim authority to use the cash collateral securing their prepetition indebtedness. As of the Petition Date, the Debtors are indebted in the aggregate amount of not less than $51.9 million under a term loan agreement for which Cortland Capital Market Services LLC serves as administrative agent and collateral agent. The Debtors were also parties to a prepetition revolving credit agreement, which provides for a senior secured revolving credit facility in the amount of $35 million. which Wells Fargo Bank, National Association, serves as lead arranger and book runner, and Wells Fargo Capital Finance, serves as administrative agent and collateral agent, under the Revolving Credit Facility. A full-text copy of the Interim Cash Collateral Order with Budget is available at http://bankrupt.com/misc/SOURCEHOMEcashcolord.pdf A hearing on the Debtors' request for a final order approving the Cash Collateral Motion is scheduled for July 21, 2014, at 2:00 p.m. (prevailing Eastern time). Objections are due July 14 and must be served upon: (a) Mark Kenney -- mark.kenney@usdoj.com -- representing the U.S. Trustee; (b) David Eaton, Esq., and Michael Weitz, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as counsel for the Debtors; (c) Pauline Morgan, Esq., and Edmon Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, as counsel for the Debtors; (d) Alyson Allen, Esq. -- Alyson.allen@ropesgray.com -- at Ropes & Gray LLP, in Boston, Massachusetts, as counsel for the Term Loan Agent; and (e) Andrew M. Kramer, Esq. -- akramer@otterbourg.com -- at Otterbourg, P.C., in New York, as counsel to the Revolving Credit Facility Agent. 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. SOUTHERN STAR: Moody's Assigns Ba1 Rating on Sr. Unsecured Notes ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Southern Star Central Corp. (Southern Star, Ba1 senior unsecured) and its subsidiary Southern Star Central Gas Pipeline, Inc. (Central, Baa3 senior unsecured). Moody's also assigned a Ba1 rating to Southern Star's new senior notes and changed the companies' rating outlook to positive from stable. These rating actions follow Southern Star announcing various refinancing transactions, whereby the company will issue $450 million of new notes due 2022 and use the proceeds to repay the $250 million of its existing notes due 2016 and $110 million of borrowings expected to be outstanding under its revolver when the transaction closes. Concurrently, Central will incur a $100 million term loan due 2016 and repay a $4 million capital lease. Southern Star will distribute $160 million of the proceeds to its parent MSIP-SSCC Holdings, LLC (Holdings), which is owned by Morgan Stanley Infrastructure Partners. Ratings Rationale "Southern Star's recapitalization will result in incremental debt, but Moody's see an overall improvement to the credit profile from ongoing organic growth and a recent rate increase," says Moody's senior vice president Mihoko Manabe. Moody's notes that the company recently settled a rate case that will bring in $28 million of annual revenues and the company will soon complete expansion projects that will generate an additional $8 million. These new revenue sources together will account for a 17% step-up from 2013 revenues and offset the roughly $100 million of incremental debt incurred at each of Central and Southern Star levels. In May 2014, Central's general rate case proceeding with the US Federal Energy Regulatory Commission became final, resulting in a $28 million annual increase in its rates. This increase reflects a $97 million (18%) expansion in its rate base since the prior rate settlement in 2008, which indicates more debt capacity for Southern Star. Many of these expansions occurred in the 2012-13 timeframe and were put into rate base. In addition, Central is currently undertaking three expansions under private contracts that will bring $8 million of annual revenues by 2015. Operationally, Central is enjoying a moderate pickup in demand for its services in its market area and more recently in its production area as well. Its customers are longstanding -- predominantly utilities of good credit quality -- and are fairly captive to Central's system. Their reliance on Central has kept its average contract life predictably at about five years. Moody's believes that these fundamental strengths outweigh the incremental leverage from the recapitalization. The refinancings will extend Southern Star's maturity profile by six years, which Moody's views favorably, although Central will now have to refinance $100 million of additional debt in 2016. As part of these refinancing transactions, Southern Star will amend and restate its $125 million credit facility and reduce its committed size to $50 million. Moody's expects that the new revolver will still provide adequate liquidity, since Southern Star is expected to be self-funding, and that the revolver will remain largely undrawn. Moody's estimates that the roughly $200 million of new long-term debt will reduce Southern Star's consolidated ratio of funds from operations (FFO)-to-debt from 15% in the last twelve months (LTM) ended March 2014 to just above 10%. For Central, the incremental $100 million of debt from the new term loan will decrease its FFO- to-debt from almost 40% in the LTM March 2014 to the mid-20% range. The positive outlook signals a potential for an upgrade over the next 12 to 18 months. Moody's notes that Central recently concluded a binding open season for a 2014 system expansion that is unusually large for the company (potentially 225,000 dekatherms a day in the production area and 250,000 dekatherms a day in the market area). Among other factors, Moody's will monitor if and how the project proceeds and its impact on Central's future financial performance. The rating outlook could revert to stable if Southern Star cannot sustain FFO-to-debt above 10%. If Southern Star and Central demonstrate that they can sustain FFO-to-debt of above 10% and in the mid-20% range, respectively. An upgrade potential is higher for Central, whose financial performance is already strong and continues on a positive trend. Southern Star clearly benefits from owning an improving operating subsidiary, but its upgrade potential is less clear cut, since it is one step removed and much more leveraged than Central. Moody's notes that Holdings is owned by a closed-end investment fund, which will be required to sell its equity interest in Southern Star at some point in the coming years. In the event that Southern Star's sponsor deviates from its current balanced financial policies and leverage increases significantly, for example, FFO-to-debt in the 8% range, Southern Star's rating could be downgraded. Assignments: Issuer: Southern Star Central Corp. Senior Unsecured Regular Bond/Debenture, Assigned Ba1 Outlook Actions: Issuer: Southern Star Central Corp. Outlook, Changed To Positive From Stable Issuer: Southern Star Central Gas Pipeline, Inc. Outlook, Changed To Positive From Stable Affirmations: Issuer: Southern Star Central Corp. Senior Unsecured Regular Bond/Debenture Mar 1, 2016, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture Mar 1, 2016, Affirmed Ba1 Issuer: Southern Star Central Gas Pipeline, Inc. Senior Unsecured Regular Bond/Debenture Jun 1, 2016, Affirmed Baa3 Headquartered in Owensboro, Kentucky, Southern Star Central Corp. is a holding company for its interstate natural gas pipeline subsidiary Southern Star Central Gas Pipeline, Inc. The principal methodology used in this rating was Natural Gas Pipelines published in November 2012. SPECTRASCIENCE INC: 2013 Net Loss Narrows to $240,000 ----------------------------------------------------- SpectraScience, Inc., filed with the Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2013. The San Diego, Calif.-based Company reported revenue of $240,000 for 2013, compared to $461,296 for the same period in 2012. It posted a net loss of $2,749,645 for 2013 compared to $9,092,598 for 2012. At Dec. 31, 2013, the Company had total assets of $2,330,366 against total liabilities, all current, of $4,881,597. The Company expects to incur significant additional operating losses through at least the end of 2014, as it completes proof-of- concept trials, conducts outcome-based clinical studies and increases sales and marketing efforts to commercialize the WavSTAT4 Systems in Europe. If the Company does not receive sufficient funding, there is substantial doubt that the Company will be able to continue as a going concern. The Company may incur unknown expenses or may not be able to meet its revenue forecast, and one or more of these circumstances would require the Company to seek additional capital. The Company may not be able to obtain equity capital or debt funding on terms that are acceptable. Even if the Company receives additional funding, such proceeds may not be sufficient to allow the Company to sustain operations until it becomes profitable and begins to generate positive cash flows from operations. As of December 31, 2013, the Company had a working capital deficit of $4,080,488 and cash of $236,597, compared to a working capital deficit of $3,340,787 and cash of $90,192 as of December 31, 2012. In December 2011, the Company entered into an Engagement Agreement with Laidlaw & Company (UK) Ltd., which Engagement Agreement was amended in July 2012. Under the Engagement Agreement, Laidlaw agreed to assist the Company in raising up to $20.0 million in capital over a two year period from the date of the Engagement Agreement. During the six months ended June 30, 2013, the Company raised $692,560, net of transaction costs of $169,440, under this agreement. Subsequent to June 30, 2013, the Company has engaged another agent to assist it with raising capital and has commenced raising capital on its own. During the six months ended December 31, 2013, the Company raised $1,156,576, net of transaction costs of $103,424, under this agreement. However, if the Company does not receive additional funds in a timely manner, the Company could be in jeopardy as a going concern. The Company may not be able to find alternative capital or raise capital or debt on terms that are acceptable. Management believes that if the events defined in the Engagement Agreement occur as expected, such proceeds will be sufficient to allow the Company to sustain operations until it attains profitability and positive cash flows from operations. However, the Company may incur unknown expenses or may not be able to meet its revenue expectations requiring it to seek additional capital. In such event, the Company may not be able to find capital or raise capital or debt on terms that are acceptable. The holders of the Company's Convertible Debentures control the conversion of the Convertible Debentures and certain of the Convertible Debentures were not converted at their maturity constituting a potential default on the matured, but unconverted, Convertible Debentures. In the event of such default, principal, accrued interest and other related costs are immediately due and payable in cash. As of December 31, 2013, Convertible Debentures with a face value of $1,324,212 held by 32 individual investors are in default. None of these investors have served notice of default on the Convertible Debentures held by them. HJ Associates & Consultants, LLP, based in Salt Lake City, Utah, serves as the Company's Independent Registered Public Accounting Firm, noted that "the Company has suffered recurring losses from operations and its ability to continue as a going concern is dependent on the Company's ability to attract investors and generate cash through issuance of equity instruments and convertible debt. This raises substantial doubt about the Company?s ability to continue as a going concern." A copy of the Annual Report is available at http://is.gd/gQt4Pl About SpectraScience SpectraScience, Inc. (OTC QB: SCIE) is a San Diego based medical device company that designs, develops, manufactures and markets spectrophotometry systems capable of determining whether tissue is normal, pre-cancerous or cancerous without physically removing tissue from the body. The WavSTAT(TM) Optical Biopsy System uses light to optically scan tissue and provide the physician with an immediate analysis. As reported in the TCR on April 25, 2013, McGladrey LLP, in Des Moines, Iowa, in its report on the Company's financial statements for the year ended Dec. 31, 2012, said the Company has suffered recurring losses from operations and its ability to continue as a going concern is dependent on the Company's ability to attract investors and generate cash through issuance of equity instruments and convertible debt. "This raises substantial doubt about the Company's ability to continue as a going concern." On Feb. 3, 2014, SpectraScience dismissed McGladrey as the Company's independent registered accounting firm effective immediately, and engaged HJ Associates & Consultants, LLP, as replacement accounting firm. SUROCO ENERGY: Petroamerica Merger May Trigger Covenant Breach -------------------------------------------------------------- Petroamerica Oil Corp. on June 26 confirmed its intention to proceed with its proposed business combination with Suroco Energy Inc. as outlined in the June 20, 2014 joint press release by Suroco and Petroamerica. This combined cash and share offer of $0.80 per common share of Suroco represents Petroamerica's final offer which will be put before the holders of Suroco Shares for approval at the Annual and Special Shareholder Meeting of Suroco Shareholders which has been adjourned until 10:00 a.m. (Calgary time) on Monday, June 30, 2014, with an extended proxy deadline of 8:00 a.m. (Calgary time) on such date. Suroco's Board of Directors, Executive Management, and largest shareholder continue to reassert their unanimous support of the cash and share offer made by Petroamerica. Jeff Boyce, Executive Chairman of Petroamerica, commented: "The Vetra Offer should create some doubt amongst the Suroco Shareholders. There is too much upside value at stake, especially with the upcoming drilling in the PUT-7 block, for shareholders to sell out for cash at this point. The Vetra offer doesn't allow Suroco shareholders to participate and share in the substantial potential upside of the N Sand oil play. This further begs the question -- what else could Vetra know about the Suroco assets? For this reason, Petroamerica is offering shareholders of the combined company the opportunity to participate in expected significant equity value appreciation over the next couple of years." Risks and Uncertainties of the Vetra Hostile Offer Petroamerica believes that Suroco Shareholders should be aware of the numerous risks and uncertainties of the hostile and coercive take-over bid offer by Vetra Acquisition Ltd. -- Vetra is attempting to extract value that should accrue to existing Suroco Shareholders. Vetra holds interests in three out of five of Suroco's oil and gas exploration and production properties in Colombia. As a result, Vetra has a clear understanding of the upside potential of a significant portion of Suroco's asset base. To date, Vetra has repeatedly attempted to acquire Suroco for cash and, until recently, at "low-ball" prices. The Vetra Offer is a further attempt to acquire ownership of Suroco's assets in a manner whereby existing Suroco shareholders are precluded from participating in Suroco's anticipated growth. -- The Vetra Offer is not a contract with Suroco and there is no certainty of closing. Suroco Shareholders should be aware that Vetra has no obligation to take up and pay for the Suroco Shares and complete its bid. In addition, if less than 50.1% of the Suroco Shares are tendered to the Vetra Offer, the Vetra Offer will not proceed and the Suroco Shares will not be taken up and paid for. -- Vetra can reduce its consideration to Suroco Shareholders if the Petroamerica Arrangement is not approved. The Vetra Offer has been structured such that Vetra can decrease or withdraw its offer to Suroco Shareholders at any time. -- All Suroco Shareholders are not guaranteed to be treated equally under the Vetra Offer. In the event that Vetra acquires 50.1% of the Suroco Shares, a Suroco Shareholder may be left holding a minority investment, at a reduced price, reflective of a minority discount in a company under the control of Vetra with reduced liquidity in the Suroco Shares. -- The Vetra Offer will breach a financial covenant and may trigger a material debt repayment that could place Suroco under serious financial distress. Vetra taking up and paying for more than 50% of Suroco's outstanding common shares pursuant to the Vetra Offer will constitute a "Change of Control" under Suroco's principal secured credit facility and 30 days thereafter an "Event of Default" under such credit facility, at which time Suroco will be obligated to repay the approximately US$23.5 million that is outstanding under such credit facility. Vetra has included in the Vetra Offer a condition that there be no "Material Adverse Change" as a consequence of taking up and paying for Suroco common shares under the Vetra Offer. It would appear that this condition cannot be satisfied, creating additional uncertainty as to whether the Vetra Offer can proceed. Strengths and Upside in the Petroamerica Offer The Petroamerica Offer provides Suroco Shareholders with deal certainty, and exposure to material growth, upside and share price reevaluation. -- Suroco Shareholders Retain Ongoing Exposure to the Prolific N Sand Oil Play. Petroamerica's offer provides Suroco Shareholders with the option to maintain material exposure to the prolific N Sand oil play, with more than a billion barrels of oil in place proved in northern Ecuador. Accepting the Vetra Offer prohibits Suroco Shareholders from participating in this upside. Ralph Gillcrist, COO and Executive VP Exploration, commented: "We believe we can unlock tremendous future value for the combined company from the N Sand oil play. For example, based on our internal estimates, a 20 million barrel oil discovery in the PUT-7 block could easily deliver over $250 million in after tax net present value discounted at 10% to the combined company, which based on current market multiples implies a return of over 100% for Suroco Shareholders to the Vetra Offer. We have structured our offer so that Suroco and Petroamerica shareholders can jointly participate in this considerable reserve growth and value creation we envision." -- Suroco Shareholders will gain exposure to the successful emerging low-side fault closure play in the Llanos Basin. Petroamerica's LLA-19 and LLA-10 blocks have a number of drillable prospects identified by 3D seismic that could add substantial near term value to the combined company. -- Suroco Shareholders will be part of a leading, well capitalized, Colombia focused E&P company. The combined asset base provides the potential for oil production upwards of 30,000 barrels of oil per day and a sustainable reserve life of more than 5 years over a 2 to 3 year time frame. The combined company is expected to continue to consolidate its land position through opportunistic acquisitions in its Llanos and Putumayo core areas. -- Research Analysts target prices for Petroamerica imply $0.98 per Suroco Share of potential value to Suroco Shareholders with equal treatment of all shareholders. Petroamerica is covered by seven research analysts (five of them unrestricted) with an average target price of $0.44 per Petroamerica Share, which equates to $0.98 per Suroco Share based on the 2.2161 exchange ratio per Suroco Share under the Petroamerica offer. -- Closing the valuation gap enables Suroco Shareholders the opportunity to realize further upside. Petroamerica is currently trading considerably below its peer group valuation range based on current and forward looking production and cash flow multiples. Petroamerica strongly believes that the size of the combined company with its diversified asset base, strong balance sheet and increased market capitalization, will facilitate easier access to capital, open up additional growth opportunities and close the valuation gap with our peer group. About Petroamerica Petroamerica Oil Corp. (TSX:PTA) -- http://www.PetroamericaOilCorp.com-- is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica currently produces more than 6,500 boepd and has interests in five blocks, all located in Colombia's Llanos Basin. About Suroco Energy Headquartered in Calgary, Canada, Suroco Energy Inc. -- http://www.suroco.com/-- is a junior oil and gas company, which explores for, develops and sells crude oil, natural gas liquids and natural gas in Colombia. SWJ HOLDINGS: RD Legal Funding Asks Court to Lift Automatic Stay ---------------------------------------------------------------- Mortgagee, RD Legal Funding Partners LP asks the Bankruptcy Court to lift the automatic stay imposed by Section 362(a) of the Bankruptcy Code so that it can proceed to foreclose on its $23 million mortgage on properties in New Jersey now owned by SWJ Management, LLC. RDLFP wants the stay lifted to the extent that SWJ Holdings, LLC claims any interest in the properties and to be able to fully pursue its remedies against SWJ in state court. Eric Henzy, Esq., at RD Legal Funding Partners LP, in Hartford, Connecticut, tells that Court that no payments have ever been made on the mortgage and the outstanding amount owed as of June 20, 2014, is over $45 million. Mr. Henzy asserts that the debt owed to RD Legal is greater than First Connecticut Holdings LLC IV's own best valuation of the properties and the amounts owed increase daily as substantial cost. According to Mr. Henzy, SWJ has essentially done nothing in the more than three months since it filed its case, has not filed schedules and has not sought to retain counsel. There is no hope for an effective reorganization, he notes. RD Legal is represented by: Eric Henzy, Esq. REID AND RIEGE, P.C. One Financial Plaza Hartford, CT 06103 Tel: (860) 278-1150 Fax: (860) 240-1002 ehenzy@rrlawpc.com - and - REISMAN PEIREZ REISMAN & CAPOBIANCO LLP 1305 Franklin Avenue PO Box 119 Garden City, NY 11530 Tel: (516) 746-7799 About SWJ Holdings and SWJ Management SWJ Holdings, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-10376) on Feb. 25, 2014, estimating $10 million to $50 million in assets and less than $10 million in liabilities. A related entity -- SWJ Management, LLC -- filed for Chapter 11 protection (Bankr. D. Del. Case No. 14-10460) on March 3, 2014. It estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Delaware Bankruptcy Judge Christopher S. Sontchi was assigned to the cases. Bruce Duke, Esq., in Mount Laurel, New Jersey, serves as counsel to the Debtors. The Chapter 11 plan and disclosure statement are due July 1, 2014, according to the case docket. The petitions were signed by Richard Annunziata as managing member. TEC GULL CREEK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: TEC/Gull Creek, Inc. 1 Meadow Street Berlin, MD 21811 Case No.: 14-20311 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Hon. Duncan W. Keir Debtor's Counsel: James Edward Van Horn, Jr., Esq. MCGUIREWOODS LLP 7 St. Paul Street, Suite 1000 Baltimore, MD 21202-1671 Tel: 410-659-4468 E-mail: jvanhorn@mcguirewoods.com Debtor's Financial Advisor: WEINSWEIGADVISORS LLC Debtor's Investment Banker: CASSIDY TURLEY COMMERCIAL REAL ESTATE SERVICES INC. Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Lloyd R. Kitchen, Jr., executive vice president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mdb14-20311.pdf TENET HEALTHCARE: Completes Private Offering of $500MM Notes ------------------------------------------------------------ Tenet Healthcare Corporation completed its previously announced private offering of $500 million aggregate principal amount of 5.00% Senior Notes due 2019. The notes were offered as a reopening of Tenet's 5.00% Senior Notes due 2019 issued on March 10, 2014. The proceeds from the offering will be used to redeem Tenet's 9.25% Senior Notes due 2015 and to pay for related transaction fees and expenses. About Tenet Tenet Healthcare Corporation, a leading healthcare services company, through its subsidiaries operates 79 hospitals, 189 outpatient centers and Conifer Health Solutions, a leader in business process solutions for healthcare providers serving more than 700 hospital and other clients nationwide. Tenet's hospitals and related healthcare facilities are committed to providing high quality care to patients in the communities they serve. For more information, please visit www.tenethealth.com. As of March 31, 2014, Tenet had $16.48 billion in total assets, $15.36 billion in total liabilities, $267 million in redeemable noncontrolling interest in equity of consolidated subsidiaries, and $854 million in total equity. Tenet reported a net loss of $104 million in 2013 following net income of $133 million in 2012. * * * Tenet carries a 'B' IDR from Fitch Ratings, B corporate credit rating from Standard & Poor's Ratings Services and B1 Corporate Family Rating from Moody's Investors Service. THOMPSON CREEK: 86.4% of TMEDS Tendered for Exchange ---------------------------------------------------- Thompson Creek Metals Company Inc. announced the results of its offer to exchange any and all of its 6.50% Tangible Equity Units for shares of its common stock. The Exchange Offer expired at 11:59 p.m., New York City time, on June 24, 2014. According to information provided by the information agent, Global Bondholder Services Corporation, 7,206,862 units, or 86.4%, of its TMEDS were tendered for exchange, and accepted by the Company, in the Exchange Offer. Of this amount, 7,139,069 units were tendered prior to the deadline and will settle on June 25, 2014, and 67,793 units were tendered by notice of guaranteed delivery and will settle on June 30, 2014. In exchange for the tendered TMEDS, the Company will issue 42,129,829 shares of its Common Stock (compared to approximately 38,829,852 shares which would have been issued with respect to such TMEDS on May 15, 2015 pursuant to the mandatory conversion of the TMEDS on such date). Upon expiration of the Exchange Offer, 1,133,138 TMEDS were not exchanged and remain outstanding. Those TMEDS will continue to be held pursuant to their original terms and conditions, including mandatory conversion on May 15, 2015. The Company intends to file promptly an application on Form 25 to notify the Securities and Exchange Commission of its withdrawal of any and all units of TMEDS which remain outstanding following settlement of the Exchange Offer. The Company expects that the delisting of its TMEDS will become effective ten days thereafter. The Company does not intend to re-list its TMEDS on another securities exchange, but expects that the TMEDS will be quoted on one or more over-the counter markets. 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. THOMPSON CREEK: S&P Raises CCR to 'B-' on Reduced Liquidity Risk ---------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on mining company Thompson Creek Metals Co. to 'B-' from 'CCC+'. The outlook is stable. Standard & Poor's also raised its issue-level rating on the company's senior secured debt to 'B+' from 'B'. The '1' recovery rating on the debt, indicating S&P's expectation of very high (90%-100%) recovery in a default scenario, is unchanged. In addition, Standard & Poor's raised its issue-level rating on Thompson Creek's senior unsecured debt to 'CCC' from 'CCC-'. The '6' recovery rating is unchanged, indicating S&P's expectation of negligible (0%-10%) recovery in default. "The upgrade primarily reflects the decline in liquidity risk Thompson Creek faces following commercial production from its Mt. Milligan mine and reduced capital requirements associated with the project," said Standard & Poor's credit analyst Jarrett Bilous. In Standard & Poor's view, the risk of large cost overruns has materially declined, with the company on track to achieve 75%-80% mine throughput by year-end 2014. Based primarily on S&P's expectations for cash flow generation from Mt. Milligan and significantly lower capital expenditures, S&P believes Thompson Creek should generate modest free operating cash flow in the next 12 months and maintain liquidity at about US$200 million. The ratings on Thompson Creek reflect Standard & Poor's view of the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile, which result in an anchor score of 'b-'. S&P do not apply modifiers to the anchor score, resulting in a final rating of 'B-'. Thompson Creek is a U.S.-based mining company with mining operations in Canada and the U.S. The company produces molybdenum from it Thompson Creek and Endako mines, and has added copper and gold to its production profile with the recent start-up of its Mt. Milligan mining project. The stable outlook reflects S&P's view that the company will generate adjusted core credit ratios that remain commensurate with a highly leveraged financial risk profile in the next 12 months, with adequate liquidity and modest free operating cash flow generation. A negative rating action could result from a material decline in the company's liquidity, most likely stemming from execution challenges or weaker-than-expected cash margins from the company's Mt. Milligan mine. A positive rating action could result from improved visibility regarding full commercial production from the Mt. Milligan mine. In our view, throughput at design capacity could effectively eliminate remaining execution and liquidity risks, and result in a material improvement in the company's financial profile. TORNANTE-MDP: S&P Revises Outlook to Negative & Affirms 'B' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on New York-based Tornante-MDP Joe Holding LLC to negative from stable. At the same time, S&P affirmed all ratings, including its 'B' corporate credit rating. "The outlook revision to negative reflects our expectation for continued sales declines in the company's entertainment segment and higher cost of sales that will weaken credit measures and EBITDA margin through 2014," said Standard & Poor's credit analyst Ariel Silverberg. In the absence of any product launches in the entertainment segment that might spur demand, S&P expects that entertainment sales (which represented a relatively small portion, less than 15%, of 2013 sales) will continue to decline in 2014 and potentially into 2015. Under S&P's performance expectations, it expects EBITDA to decline in the 20% area in 2014, driving adjusted debt to EBITDA to the mid-6x area by the end of 2014 (from the mid-5x area at 2013), and adjusted funds from operations (FFO) to debt toward the mid-single-digit percent area by the end of 2014 (from the high-single-digit percent area in 2013). S&P also is forecasting EBITDA margin to decline modestly in 2014. The affirmation of the 'B' corporate credit rating reflects S&P's expectation for the company to maintain an adequate liquidity profile (through revolver availability and minimal operating cash generation) and good EBITDA coverage of interest (at about 2x) over the next several quarters. S&P would consider lower ratings if EBITDA declines more than it currently expects (about 20%) in 2014, or if S&P believes negative operating trends will not abate over the next several quarters, and results in an impairment to the company's liquidity profile, EBITDA coverage of interest falls toward the mid-1x area, or a potential breach of the financial covenant under the credit agreement. S&P could consider revising the rating outlook to stable if EBITDA generation stabilizes or grows, and if S&P believes the entertainment segment will remain fairly stable over the next few years. Higher ratings are unlikely at this time, given S&P's expectation for EBITDA to decline in the next few quarters and minimal growth thereafter. S&P therefore expects Tornante-MDP Joe's financial risk profile to remain highly leveraged. TOYS 'R' US: Fitch Affirms 'CCC' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has downgraded the issue ratings on Toys 'R' Us, Inc.'s (Toys, HoldCo) $450 million 10.375% senior unsecured notes due August 2017 and $400 million 7.375% senior unsecured notes due October 2018 to 'CCC-/RR5' from 'CCC/RR4'. Fitch has also affirmed the Issuer Default Ratings (IDRs) on Toys 'R' Us, Inc. and its various domestic subsidiaries at 'CCC'. Toys has provided better clarity in its recent 8-K filing dated June 18, 2014 related to its intercompany loans between HoldCo and Toys 'R' Us-Delaware, Inc. (Toys-Delaware). These include $783 million in long-term notes payable to Toys-Delaware by HoldCo and $316 million in short-term loans due from Toys-Delaware to HoldCo as of Feb. 1, 2014. Previously, Toys-Delaware only disclosed $777 million of intercompany receivables due from HoldCo and affiliates as of Feb. 1, 2014, which included $265 million of long-term loans made to HoldCo in 2012. The nature of these long-term loans as well as the remaining payable from HoldCo to Delaware was not disclosed. In its recent 8-K, Toys disclosed that HoldCo had issued $783 million of notes due to Delaware between 2005 and 2012 - and that all of the notes are documented, unsecured and include a market rate of interest. In addition, Toys stated that the $206 million notes issued in FY 2012 are expressly subordinated in right of payment to the senior obligations of Holdco, which implies that the remaining $577 million are pari passu with the $850 million HoldCo notes. Therefore, any recovery value allocated to these public bonds would now need to be prorated with the $577 million senior notes due to Toys-Delaware. While Toys-Delaware has $316 million short-term loans due to HoldCo, Fitch does not assume HoldCo can effectuate a setoff against their long-term obligation to Toys-Delaware. The short- term unsecured loans at Toys-Delaware are used to fund seasonal working capital needs and therefore considered unsecured claims that rank below all the secured debt at Toys-Delaware. In addition, Fitch does not believe that HoldCo can net these current assets against their debt due to Toys-Delaware because any liquidation proceeds from the HoldCo assets would need to pay down both the $850 million HoldCo notes and the $577 million notes due to Toys-Delaware on a pro rata basis. Key Rating Drivers Fitch's ratings on Toys reflects the company's deteriorating top- line and EBITDA trends, increasing risk of market share loss and weakening liquidity position. While Toys reported comparable store sales (comps) growth at 4% and 1% in first quarter 2014 for its domestic and international segments, respectively, Fitch believes these were due to easy comparisons with the comps of negative 8.4% and negatively 5.8% in first quarter 2013. Fitch expects Toys' comps will remain under pressure declining by low single digits for its domestic and international segments in the next 12-18 months. The company has seen sales decline in its major categories such as juvenile (approximately 30% of Toys' total sales) and sustained weakness in the entertainment category (11% of total sales) due to low birth rates and secular pressure. The company faces intensified pricing competition from both discount and online retailers. Despite Toys' multichannel strategy and series of product and service initiatives, Fitch believes it will be expensive and difficult for Toys to compete on pricing and retain its market share without sacrificing margins. Fitch estimates that Toys would need to stabilize sales and modestly improve its gross margin to generate adequate EBITDA at the $650 million level to cover annual interest expense assumed at $360 million, capex of $250 million and modest cash taxes. However, achieving this level is likely challenging without significantly lowering its cost structure and controlling inventory levels. Fitch expects 2014 EBITDA to be in the $450 million to $500 million range, assuming a low/single digit comps decline and gross margin decline of 20 bps-50 bps. Fitch expects limited reduction of SG&A expense in the near term as the company is committed to allocating the modest cost savings toward further investments in its online strategy and improving store presentation and service. Fitch expects leverage (adjusted debt/EBITDAR) to increase to the 9x level and FCF to be negative $250 million, excluding significant working capital swings in 2014 and 2015. Availability under the ABL revolver during peak working capital season is expected to be around $700 million in 2014 and $500 million in 2015. This indicates adequate liquidity for the next 18 months but liquidity concerns increase in 2016 given more than $1 billion of debt maturities. Recovery Analysis and Considerations Fitch has conducted a recovery analysis across Toys' organizational structure to determine expected recoveries in a distressed scenario to each of the company's debt issues and loans. Toys' debt is at three types of entities: operating companies (OpCo); property companies (PropCo); and HoldCo, with a summary structure highlighted below. Toys 'R' Us, Inc. (HoldCo) (I) Toys 'R' Us-Delaware, Inc. (Toys-Delaware) is a subsidiary of HoldCo. (a) Toys 'R' Us Canada (Toys-Canada) is a subsidiary of Toys- Delaware. (b) Toys 'R' Us Property Co. II, LLC is a subsidiary of Toys- Delaware. (II) Toys 'R' Us Property Co. I, LLC is a subsidiary of HoldCo. OpCo Debt Fitch has assigned a 5.0x-5.5x multiple to the stressed EBITDA at the OpCo levels - Toys-Delaware and Toys-Canada - which is consistent with the low end of the 10-year valuation for the public space and Fitch's average distressed multiple across the retail portfolio. The stressed EV is adjusted for 10% administrative claims. Toys-Canada Toys has a $1.85 billion asset-based revolving credit facility (ABL revolver) with Toys-Delaware as the lead borrower, and this contains a $200 million sub-facility in favor of Canadian borrowers. Any assets of the Canadian borrower and its subsidiaries secure only the Canadian liabilities. The $200 million sub-facility is more than adequately covered by the EV calculated based on stressed EBITDA at the Canadian subsidiary. Therefore, the fully recovered sub-facility is reflected in the recovery of the consolidated $1.85 billion revolver discussed below. The residual value is applied toward debt at Toys-Delaware. Toys-Delaware At the Delaware level, the recovery on the various debt tranches is based on the liquidation value of the assets estimated at $2.1 billion, approximately $115 million recovery against the $577 million of intercompany loans to HoldCo, and the equity residual from Canada estimated at $210 million. The $1.85 billion revolver is secured by a first lien on inventory and receivables of Toys-Delaware. In allocating an appropriate recovery, Fitch has considered the liquidation value of domestic inventory and receivables assumed at seasonal peak (at the end of the third quarter), and has applied advance rates of 75% and 80%, respectively. Fitch currently assumes $1.3 billion (or approximately 70% of the facility commitment) drawn under the revolver at the peak season in 2015 based on Fitch's projections of EBITDA and liquidity needs. The facility is fully recovered and is therefore rated 'B/RR1'. The recovery value of the debt structure below the first lien revolver is derived from three components: (1) excess liquidation value at the Toys-Delaware level (liquidation value after the full recovery of ABL revolver); (2) estimated value for Toys' trademarks and intellectual property assets (IP, which are held at Geoffrey, LLC (IPCo) as a wholly owned subsidiary of Toys- Delaware); and (3) equity residual value from Canada. Components (1) and (2) are fully applied toward the senior secured term loans and 7.375% secured notes, while 3) is applied across the capital structure. The $1.24 billion term loans due 2016 and 2018 and the $350 million senior secured notes due 2016 are secured by a first lien on the IP and a second lien on the ABL revolver collateral. They are assumed to have recovery prospects of 51%-70%, which reflects excess value from the credit facility collateral as well as some modest valuation of the IP assets, and are therefore rated 'CCC+/RR3'. The 8.75% debentures due Sept. 1, 2021, have poor recovery prospects and are therefore rated 'CC/RR6'. PropCo Debt At the PropCo levels - Toys 'R' Us Property Co. I, LLC; Toys 'R' Us Property Co. II, LLC; and other international PropCos - LTM NOI is stressed at 20%. PropCo I and PropCo II are set up as bankruptcy-remote entities with a 20-year master lease through 2029 covering all the properties, which requires Toys-Delaware to pay all costs and expenses related to leasing these properties from these two entities. The ratings on the PropCo debt reflect a distressed capitalization rate of 12% applied to the NOI of the properties to determine a going-concern valuation. The stressed rates reflect downtime and capital costs that would need to be incurred to re- tenant the space. Applying these assumptions to the $725 million 8.50% senior secured notes at PropCo II and the $985 million senior unsecured term loan facility at PropCo I results in recovery well in excess of 90%. Therefore, these facilities are rated 'B/RR1'. The PropCo II notes are secured by 125 properties. The PropCo I unsecured term loan facility benefits from a negative pledge on all PropCo I real estate assets (343 properties as of May 4, 2013). Fitch typically limits the Recovery Rating on unsecured debt at 'RR2' or two notches above the IDR level (under its criteria 'Recovery Ratings and Notching Criteria for Non-financial Corporate Issuers' dated Nov. 20, 2013). However, in the few instances where the recovery waterfall suggests an 'RR1' rating and such a Recovery Rating is supported by the structural and legal characteristics of the debt, unsecured debt may qualify for an 'RR1' rating. In addition, the rating also benefits from the structural consideration that Toys 'R' Us has limited capacity to secure debt using real estate given that there is a limitation on principal property of domestic subsidiaries at 10% of consolidated net tangible assets under the $400 million of 7.375% notes due 2018 issued by HoldCo. Toys 'R' Us, Inc. - HoldCo Debt The $450 million 10.375% unsecured notes due Aug. 15, 2017, and the $400 million 7.375% unsecured notes due Oct. 15, 2018, benefit from the residual value at PropCo I, currently estimated at approximately $300 million. There is no residual value ascribed from Toys-Delaware or other operating subsidiaries. Prorating the residual value against the $577 million senior notes due to Toys- Delaware that are considered pari passu with the publicly traded HoldCo notes translates into below-average recovery prospects of 11%-30% for the bonds which are therefore rated 'CCC-/RR5'. Rating Sensitivities A negative rating action could result if comps trends in the U.S. and international businesses continue to be in the negative 4%- negative 5% range and/or gross margins decline by similar rates to 2013 without any offset from cost reductions. This would indicate more severe market share losses and lead to tighter liquidity than Fitch's current expectation over the next 18 months. A positive rating action could result if there is sustainable improvement in Toys' store and online traffic, indicating improved market share positioning, and meaningful cost restructuring. Toys would need to drive EBITDA improvement to a level where it can meet fixed obligations and fund any working capital swings, and manage refinancing of upcoming debt maturities on a timely basis. Fitch has affirmed the following ratings except for downgrading the issue rating of the HoldCo notes as follows: Toys 'R' Us, Inc. (HoldCo) --IDR at 'CCC'; --Senior unsecured notes downgraded to 'CCC-/RR5' from 'CCC/RR4'. Toys 'R' Us - Delaware, Inc. is a subsidiary of HoldCo --IDR at 'CCC'; --Secured revolver at 'B/RR1'; --Secured term loans at 'CCC+/RR3'; --Senior secured notes at 'CCC+/RR3'; --Senior unsecured notes at 'CC/RR6'. Toys 'R' Us Property Co. II, LLC is subsidiary of Toys 'R' Us - Delaware, Inc. --IDR at 'CCC'; --Senior secured notes at 'B/RR1'. Toys 'R' Us Property Co. I, LLC is a subsidiary of HoldCo --IDR at 'CCC'; --Senior unsecured term Loan facility at 'B/RR1'. TRINET HR: Moody's Assigns 'B1' Rating on New Senior Secured Debt --------------------------------------------------------------- Moody's Investors Service rated TriNet HR Corp.'s new $650 million Senior Secured Credit Facilities at B1. The B1 Corporate Family Rating and stable outlook are unchanged. Proceeds will be used to refinance TriNet's existing Senior Secured Credit Facilities. The new Senior Secured Credit Facilities carry a lower interest rate, which will reduce annual interest expense by about $10 million, a nearly 40% reduction, due to reduced interest margins and the elimination of the LIBOR floor. The existing facilities include a $455 million term loan maturing in 2020, a $120 million term loan maturing in 2016, and a $75 million revolver maturing in 2016. The new facilities include a $400 million term loan maturing in 2019, a $175 million term loan maturing in 2017, and a $75 million revolver maturing in 2019. Assignments: Issuer: TriNet HR Corporation Senior Secured Term Loan due 2019, Assigned B1, LGD3 (48%) Senior Secured Term Loan due 2017, Assigned B1, LGD3 (48%) Senior Secured Revolver due 2019, Assigned B1, LGD3 (48%) Ratings Rationale "The refinancing enhances liquidity as it lowers the interest expense and pushes out the maturity of a portion of the debt," said Terry Dennehy, Senior Analyst at Moody's. The B1 corporate family rating (CFR) reflects TriNet's high leverage given the company's small scale relative to Professional Employer Organization ("PEO") industry leader Automatic Data Processing (ADP). Competition is high, given low industry barriers, and customer contracts are quite short (cancellable on 30 days notice). Moreover, there is considerable turnover in the company's customer base, characteristic of the small and medium sized business segment. Furthermore, TriNet's products tend to be more customized than those of the larger industry players and thus there is limited ability to scale its business products. As a PEO, the employees of TriNet's customers become TriNet "co-employees," exposing TriNet to liability risk from these employees as well as some limited exposure of customers' ability to cover payroll. Nevertheless, TriNet does have a record of strong revenue growth and EBITDA margins, with solid free cash flow as a result of the limited capital expenditure requirements, which we expect to generate rapid deleveraging to levels more appropriate for the B1 rating. As a PEO, TriNet offers its customers a compelling value proposition, providing scale in economies in purchasing insurance and in regulatory compliance. Although TriNet has a history of large equity distributions, we believe that as a public company since April, TriNet will now refrain from debt-funded distributions. The stable outlook reflects our expectation that TriNet will continue to expand its base of worksite employees ("WSEs"), organically growing revenues by at least ten percent over the near term and will maintain an operating margin (Moody's adjusted) of at least high teens percent. We expect that the growing revenue base will produce expanding EBITDA such that debt to EBITDA (Moody's adjusted) will be on course to decline to below 4x over the next 12 to 18 months. The rating could be upgraded if we believe that TriNet is increasing market share as evidenced by organic revenue growth exceeding industry revenue growth. Moreover we would expect annual client attrition to be maintained below twenty percent, indicating that TriNet's service is differentiated from its key competitors. Furthermore, we would expect absolute debt reduction of at least 10% per year in addition to EBITDA growth such that we believe that the ratio of debt to EBITDA (Moody's adjusted) will be maintained below 3x. The rating could be downgraded if we believe that TriNet is losing market share, as evidenced by revenue growth trailing the industry average, or if we believe that client attrition will remain above 20%. Indications of operational difficulties, as evidenced by operating margins declining below the low teens percent, could also pressure the rating. The rating could be lowered if TriNet engages in further shareholder-friendly actions prior to meaningful deleveraging, or if we expect that debt to EBITDA (Moody's adjusted) will be sustained above 5x. The principal methodology used in this rating was the Global Business and Consumer Services Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative Grade Non-Financial Companies in the US, Canada, and EMEA, published in June 2009. TriNet, based in San Leandro, California, is a professional employer organization ("PEO"), which provides outsourced human resource functions, including payroll, benefits acquisition, and regulatory compliance management to small and mid-sized businesses. TriNet is majority-owned by affiliates of private equity firm General Atlantic LLC. TURNPIKE SERVICE: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Turnpike Service, Inc. dba Turnpike Shell 5525 S Orange Blossom Trail Orlando, FL 32839 Case No.: 14-07462 Chapter 11 Petition Date: June 27, 2014 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Kenneth D Herron, Jr., Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A. 1851 West Colonial Drive Orlando, FL 32804 Tel: 407-648-0058 Fax: 407-648-0681 E-mail: kherron@whmh.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Marcelo L. Taddei, president. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-07462.pdf UNI-PIXEL INC: Achieves Roll-to-Roll Pilot Production of Sensors ---------------------------------------------------------------- UniPixel, Inc., said it has achieved roll-to-roll pilot production of its InTouch Sensors a projected capacitive, multi-touch sensor film, overcoming previously reported challenges through modification of hardware and chemistry configurations. According to the Company, the new process conditions have been successfully demonstrated in the roll-to-roll pilot production process, achieving a step-change improvement in plating fine-line conductive elements on its touch sensor film. The Company now has a fully-functional, roll-to-roll pilot production line comprised of a plating line at the Company's Texas facility, and printing, final testing and packaging at the Kodak facility, a state-of-the-art manufacturing and testing facility within the Eastman Business Park in Rochester, New York. UniPixel and Kodak have begun conducting roll-to-roll pilot manufacturing and yield studies on the overall process, as well as technology transfer of the modified process to production plating assets in the Kodak facility. "Since our last quarterly report in May, our teams have made tremendous progress in further advancing our roll-to-roll printing manufacturing process, finalizing the ink and substrate, and resolving the major roll-to-roll plating technical challenges," said Jeff Hawthorne, president and CEO of UniPixel. "Having achieved roll-to-roll pilot production capability, we are now focused on ramping overall product yields, as well as utilizing the pilot line to scale hardware, processes and manufacturing procedures, and to validate product quality criteria for volume production." To reduce development complexity and speed the time-to-market of UniPixel's first InTouch Sensors Powered by Kodak product, UniPixel and Kodak technical work streams have been primarily focused on an initial development project for the tablet market and working closely with a certain tablet manufacturer. According to DisplaySearch, the tablet sensor segment is growing at 9% CAGR to 448 million units shipped annually by 2018. The Company said it continues to make progress on the newly established product and technology development roadmap that next addresses the larger form factor, all-in-one PC market. The company is running concurrent development projects to support release of an all-in-one touch sensor product. In addition to making progress with its roll-to-roll touch sensor manufacturing process, the company has advanced its Diamond Guard hard-coat resin technology. UniPixel has successfully coated PET film with Diamond Guard hard-coat resin at a pilot production coating facility using production-length film coating trial runs. The company continues to work to scale resin and coating technology to a full production quality, film product. Diamond Guard?s pilot coating ranges from 4H to 6H hardness levels, as compared to most hard coat alternatives that range from 2H to 3H. The Diamond Guard coating performance attributes have generated attention from a number of coaters who are interested in working with the company. The Company plans to provide an update on the progress towards achieving volume touch sensor production in the second half of 2014 during the upcoming second quarter earnings call in early August. About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. Uni-Pixel reported a net loss of $15.18 million in 2013, a net loss of $9.01 million in 2012 and a net loss of $8.56 million in 2011. The Company's balance sheet at March 31, 2014, showed $49.38 million in total assets, $5.50 million in total liabilities and $43.87 million in total shareholders' equity. UNITED AMERICAN: Incurs $435,000 Net Loss in First Quarter ---------------------------------------------------------- United American Healthcare Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $435,000 on $1.63 million of contract manufacturing revenue for the three months ended March 31, 2014, as compared with net income of $306,000 on $2.22 million of contract manufacturing revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $14.95 million in total assets, $13.11 million in total liabilities and $1.84 million in total shareholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/g8IMK1 About United American Chicago-based United American Healthcare, through its wholly owned subsidiary Pulse Systems, LLC, provides contract manufacturing services to the medical device industry, with a focus on precision laser-cutting capabilities and the processing of thin-wall tubular metal components, sub-assemblies and implants, primarily in the cardiovascular market. The Company disclosed a net loss of $769,000 on $3.23 million of contract manufacturing revenue for the six months ended Dec. 31, 2013, as compared with net income of $82,000 on $3.83 million of contract manufacturing revenue for the same period in 2012. Bravos & Associates, CPA's, in Bloomingdale, Illinois, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company's liabilities and working capital raise substantial doubt about its ability to continue as a going concern. UNIQUE BROADBAND: Transfers Listing to NEX Board ------------------------------------------------ Unique Broadband Systems, Inc. on June 27 announced the transfer of its listing from the TSX Venture Exchange to the NEX board of the TSXV as a result of UBS no longer carrying on an active business. The common shares of UBS will commence trading on the NEX effective June 27, 2014 under the symbol UBS.H. CCAA Claims Process Update UBS continues to work to complete the CCAA claims process under supervision of the Superior Court of Ontario. In this regard, the previously announced appeal and cross-appeals related to certain disputed claims were heard on June 17, 2014. The Court of Appeal reserved judgment. Shareholders are encouraged to refer to the section entitled "Provisions and contingencies - Contingencies - Jolian claims" in the Company's most recent management discussion and analysis. Information pertaining to the CCAA claims process can be found on the monitor's website at www.duffandphelps.com/restructuringcases under the UBS link About Unique Broadband Systems Unique Broadband Systems, Inc. -- http://www.uniquebroadband.com/ -- is a Canadian-based company with holdings in Look Communications and a continuing business interest with Unique Broadband Systems Ltd. VERIFONE INC: $100MM Loan Upsize No Impact on Moody's B3 CFR ------------------------------------------------------------ Moody's Investors Service said that VeriFone, Inc's revisions to the previously proposed refinancing transaction structure, inclusive of a $100 million upsize to the proposed 1st lien senior secured revolving credit facility, along with a $50 million upsize of the 1st lien senior secured term loan A and commensurate decrease in the 1st lien senior secured term loan B amount, are modestly credit positive but do not impact the company's Ba3 corporate family rating, Ba3 debt instrument ratings or the stable ratings outlook. Headquartered in San Jose, California, VeriFone is a leading provider of point of sale hardware systems, as well as technology based payment solutions and services. VERITEQ CORP: Has Rights Agreement with Hudson Bay -------------------------------------------------- VeriTeQ Corporation entered into a Right to Shares Agreement with Hudson Bay Master Fund Ltd. effective as of June 24, 2014. On Nov. 13, 2013, the Company issued to the Holder (a) a Senior Secured Convertible Note with an initial aggregate principal amount of $833,333 and (b) a warrant to purchase shares of the Company's common stock pursuant to a securities purchase agreement dated Nov. 13, 2013. Per the terms of the SPA, a portion of the Note was secured by approximately $435,000, which represented restricted principal and which was held in a master restricted bank account. Under the terms of the Rights Agreement, the Holder agreed (a) to redeem $400,000 in aggregate principal amount of the Note for a redemption price equal to $400,000 to be paid from the master restricted account, (b) to exchange $190,666 in aggregate principal amount of the Note for 953,334 shares of Company's common stock and (c) to exchange the Warrant for 17,763,325 shares of the Company's common stock. After giving effect to the Redemption Note, no restricted principal will remain outstanding. In lieu of presently issuing all of the Shares, the Company and the Holder have agreed to enter into the Rights Agreement whereby in exchange for the Redemption Note and the Warrants, the Company will, subject to the terms and conditions set forth in the Rights Agreement, from time to time, be obligated to issue and the Holder will have the right to the issuance of the Shares. The transaction is exempt from registration pursuant to Section 3(a)(9) of the Securities Act. The Company and the Holder have agreed that no additional consideration is payable in connection with the issuance of the Shares. About VeriTeQ VeriTeQ (formerly known as Digital Angel Corporation) develops innovative, proprietary RFID technologies for implantable medical device identification, and dosimeter technologies for use in radiation therapy treatment. VeriTeQ offers the world's first FDA cleared RFID microchip technology that can be used to identify implantable medical devices, in vivo, on demand, at the point of care. VeriTeQ's dosimeters provide patient safety mechanisms while measuring and recording the dose of radiation delivered to a patient in real time. For more information on VeriTeQ, please visit www.veriteqcorp.com . Veriteq Corporation reported a net loss of $15.07 million on $18,000 of sales for the year ended Dec. 31, 2013, as compared with a net loss of $1.60 million on $0 of sales for the year ended Dec. 31, 2012. As of March 31, 2014, the Company had $7.97 million in total assets, $15.19 million in total liabilities and a $7.21 million total stockholders' deficit. EisnerAmper LLP, in New York, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred recurring net losses, and at Dec. 31, 2013, had negative working capital and a stockholders' deficit. These events and conditions raise substantial doubt about the Company's ability to continue as a going concern. VIGGLE INC: Acquires Marketplace Platform Choose Digital -------------------------------------------------------- Viggle Inc. has acquired Choose Digital, a digital marketplace platform that allows companies to incorporate digital content into existing rewards and loyalty programs in support of marketing and sales initiatives. With the acquisition, the Choose Digital platform will power digital media rewards for the Viggle platform, including music, audio books, TV and movies, enabling Viggle members to get free entertainment content just for enjoying their favorite TV shows and music. Choose Digital works with all of the major music labels and top independents, offering millions of songs, albums and box sets through its platform. More than 300,000 books from three of the top publishing houses are available through Choose Digital as well. Streaming for tens of thousands of TV programs and movies is expected to launch in the coming months. The Viggle Store - a rewards destination where members can redeem their Viggle Points for music downloads - is already powered by Choose Digital, which also powers the digital media rewards capabilities for leading loyalty programs at businesses such as Marriott, SkyMall and United Airlines Choose Digital was founded in 2011 and its management team brings a deep understanding of the loyalty industry, content industries and online retailing. Stephen Humphreys, Co-Founder and CEO is a veteran of the loyalty and affinity marketing space with over 17 years of global experience. Mario Cruz, Co-Founder and CTO, has over 17 years of experience in IT, with a focus on high-volume transaction programs in the loyalty and rewards market, and has been awarded a patent in the space. "The Choose Digital team has some of the deepest experience in loyalty programs, promotional marketing, rewards and technology," said Greg Consiglio, COO of Viggle Inc. "With this acquisition, we can now develop end-to-end entertainment and loyalty rewards programs for our brand, TV network and music industry partners. We can identify the content our members watch or listen to and then issue relevant rewards though the Viggle Store. Our Viggle members benefit by redeeming their points for highly relevant digital content thought our patented entertainment rewards platform." Choose Digital has built a unique and innovative "private label" digital marketplace that allows companies to incorporate digital content into their sales and marketing strategies. Its content, consisting of digital music, movies, TV shows, eBooks and audiobooks, is current, wide and sourced directly from global record companies, major studios, and publishers. New categories including apps, games, and magazines are currently under development. The market positioning of Choose Digital is agnostic - it has no consumer-facing brand, or any direct relationship with consumers. "With the combined power of Viggle and Choose Digital technologies, we look forward to becoming the premier solution for brands to deliver digital rewards," said Cruz, of Choose Digital. Choose Digital joins Viggle Music and the Viggle Store as recent additions to the Viggle Platform, which includes Wetpaint, a leading entertainment destination for creating, curating and sharing the best entertainment content and NextGuide which helps TV networks reach and engage their audiences and the Viggle app which rewards its members for watching their favorite TV shows as well as discovering new music. In March 2014, Viggle Inc. achieved a total reach of 20.8 million. About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. Viggle incurred a net loss of $91.40 million on $13.90 million of revenues for the year ended June 30, 2013, as compared with a net loss of $96.51 million on $1.73 million of revenues during the prior year. The Company's balance sheet at March 31, 2014, showed $68.09 million in total assets, $62.79 million in total liabilities, $37.54 million in series A convertible redeemable preferred stock, and a $32.23 million total stockholders' deficit. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2013, has deficiencies in working capital and equity that raise substantial doubt about its ability to continue as a going concern. VWR FUNDING: Parent IPO Filing No Impact on Moody's 'B3' CFR ------------------------------------------------------------ Moody's Investors Service commented that the planned Initial Public Offering (IPO) by VWR Corp, parent of VWR Funding, Inc.'s ("VWR") is a credit positive because if completed, it will result in lower debt levels. However, given the uncertainty regarding its completion, as well as its size and the amount of debt repaid, the plan does not currently impact VWR's ratings, including its B3 Corporate Family Rating (CFR) and stable rating outlook. VWR Funding, Inc., headquartered in Radnor, Pennsylvania, is a global leader in the distribution of laboratory scientific supplies, including chemicals, glassware, equipment, instruments, protective clothing, and production supplies. For the twelve months ended December 31, 2013, VWR reported revenues of $4.2 billion. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. WALTER ENERGY: S&P Lowers CCR to 'CCC+' on Unsustainable Debt ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Birmingham, Ala.-based Walter Energy Inc. to 'CCC+' from 'B-'. The outlook remains negative. S&P lowered the ratings on the company's senior secured credit facilities and 9.5% senior secured first-lien notes to 'B-' from 'B'. The recovery rating on the debt remains '2', indicating S&P's expectation of substantial recovery (70% to 90%) in the event of a payment default. S&P also lowered the ratings on the company's senior secured second-lien notes and senior unsecured debt to 'CCC-' from 'CCC'. The recovery rating on the debt remains '6', indicating S&P's expectation of negligible recovery (0% to 10%) in the event of a payment default. "The negative outlook reflects our expectation that weak met coal market conditions will persist, which will pressure the company's liquidity position," said Standard & Poor's credit analyst William Ferara. "We also expect very weak credit measures in 2014, with debt leverage above 20x and EBITDA interest coverage of less than 1x in 2014." S&P believes the company's capital structure is likely unsustainable in the long-term absent an improvement in met coal prices. S&P could lower its rating if met coal prices further deteriorate, liquidity becomes further constrained, or negative cash flow from operations is sustained. S&P could also lower the rating if the company were to risk a breach of its financial covenant. This could occur if the company needed to draw more than 30% on its revolving credit facility. S&P could revise the outlook to stable if market conditions improved and leverage began to trend toward 10x, with EBITDA interest coverage comfortably of about 1.25x. This is highly unlikely, in S&P's view, to occur over the next few quarters. WILLIAM LYON: S&P Puts 'B-' CCR on CreditWatch Developing --------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B-' corporate credit rating on William Lyon Homes Inc. on CreditWatch with developing implications. At the same time, S&P placed its 'B-' issue-level ratings on William Lyon's senior unsecured debt on CreditWatch developing. The CreditWatch developing status indicates that S&P may raise, lower, or affirm the rating following its review. William Lyon is a relatively small homebuilder with a geographic concentration of operations in California, Arizona, Nevada, and Colorado. The company recently announced an agreement to acquire the residential homebuilding operations of Polygon Northwest Co. LLC for about $520 million. The acquisition expands William Lyon's geographic presence to Seattle and Portland, where Polygon retains the number 2 market position, and increases its revenue base by roughly one-half (based on full-year 2013 results). The company has secured bridge financing for the full cash amount of the acquisition, but plans to use some cash on hand (it reported $151 million at March 31, 2014) and tap the capital markets for the balance transaction. "We plan to review the implications to leverage and covenant headroom, along with the greater scale and diversity of the combined company, when the sources of long-term financing are determined," said Standard & Poor's credit analyst Matthew Lynam. The transaction is scheduled to close in the third quarter of 2014. Standard & Poor's will seek to resolve the CreditWatch within the next 90 days. The developing outlook means that when S&P completes its review, it could raise or lower the ratings by one notch, or leave the ratings unchanged. Given the positive outlook S&P maintained before the acquisition announcement, it would ascribe a low probability to a near-term downgrade. However, a heavily debt-financed transaction or integration concerns could lead S&P to conclude that a stable outlook is more appropriate. WOONSOCKET, RI: Moody's Affirms 'B3' GOULT Rating on $216MM Debt ---------------------------------------------------------------- Moody's Investors Service has affirmed the City of Woonsocket's (RI) B3 general obligation unlimited tax rating, affecting $216.9 million of outstanding debt, including GO-secured debt issued through the Rhode Island Health and Education Building Corporation (RIHEBC). At this time, Moody's has revised the outlook to stable from negative. Summary Rating Rationale The B3 rating reflects an accumulated operating deficit and annual liquidity shortages, despite the issuance of deficit funding bonds in fiscal 2011 and a state-appointed budget commission. State oversight has provided the city with advances of future state aid and helped pass a supplemental property tax levy in fiscal 2013. The rating also factors a high debt burden with large, unfunded pension and OPEB liabilities. The stable outlook reflects recent progress that the city has made in implementing substantial operating expenditure cuts while simultaneously raising revenues to eliminate the large accumulated deficit and obtain structural balance in accordance with the newly adopted deficit reduction plan. The stable outlook also considers the city's improved liquidity given recent expenditure cuts and its ability to borrow from other funds and advance state aid. Strengths State-appointed oversight commission with ability to advance state aid revenue Recent stabilization in the city's operating funds Challenges Ongoing liquidity strain necessitates state aid advances Very high debt burden and unfunded pension and OPEB liabilities High fixed costs Outlook The stable outlook reflects recent progress that the city has made in implementing substantial operating expenditure cuts while simultaneously raising revenues to eliminate the large accumulated deficit and obtain structural balance in accordance with the newly adopted deficit reduction plan. The stable outlook also considers the city's improved liquidity given recent expenditure cuts and its ability to borrow from other funds and advance state aid. What could make the rating go UP: -- Improvement in liquidity and reduced dependence on state aid advances -- Sustained elimination of accumulated deficit in the Operating Funds -- Progress toward reducing the large unfunded pension liability What could make the rating go DOWN: -- Inability to secure state aid advances in the event of future liquidity shortfalls -- Continued severe liquidity strain -- Deepening of the accumulated operating deficit The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. * Argentina Faces Deadline for Hedge Fund Payments -------------------------------------------------- Peter Eavis, writing for The New York Times' DealBook, reported that Argentina's government has 30 days to decide whether it should try to make peace with a group of New York hedge funds that it has bitterly fought for years in a dispute that could change the global market for government bonds. According to the report, the hedge funds, after a series of important victories in United States courts, have managed to back Argentina into a daunting legal corner. Judge Thomas P. Griesa of the Federal District Court in Manhattan has told the country that it cannot make payments on its main class of foreign bonds without also paying the defaulted bonds that the hedge funds hold, the report related. Argentina was scheduled to make a payment to its main bondholders on June 30, the report noted. The bonds now have a 30-day grace period in which late payments can be made, the report said. * Large Companies With Insolvent Balance Sheet ---------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE OU1 GR 118.9 (8.4) 1.0 ABSOLUTE SOFTWRE ALSWF US 118.9 (8.4) 1.0 ABSOLUTE SOFTWRE ABT CN 118.9 (8.4) 1.0 ACHAOGEN INC AKAO US 13.8 (0.0) 2.1 ACTINIUM PHARMAC ATNM US 6.6 (13.5) (13.5) ADVANCED EMISSIO OXQ1 GR 106.4 (46.1) (15.3) ADVANCED EMISSIO ADES US 106.4 (46.1) (15.3) ADVENT SOFTWARE ADVS US 452.2 (91.1) (90.7) ADVENT SOFTWARE AXQ GR 452.2 (91.1) (90.7) AEMETIS INC AMTX US 97.1 (12.8) (23.4) AEROHIVE NETWORK 2NW GR 69.9 (3.3) 21.5 AEROHIVE NETWORK HIVE US 69.9 (3.3) 21.5 AGENUS INC AGEN US 34.8 (4.5) 17.9 AGILE THERAPEUTI AGRX US 16.0 (1.1) (4.8) AIR CANADA-CL A ADH GR 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A ADH TH 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A AC/A CN 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A AIDIF US 9,964.0 (1,947.0) (185.0) AIR CANADA-CL B AIDEF US 9,964.0 (1,947.0) (185.0) AIR CANADA-CL B AC/B CN 9,964.0 (1,947.0) (185.0) ALDER BIOPHARMAC ALDR US 26.7 (32.0) 2.5 ALDER BIOPHARMAC ALDR1EUR EU 26.7 (32.0) 2.5 ALDER BIOPHARMAC 3A9 GR 26.7 (32.0) 2.5 ALLIANCE HEALTHC AIQ US 465.3 (136.6) 59.5 AMC NETWORKS-A 9AC GR 3,484.7 (478.3) 642.3 AMC NETWORKS-A AMCX US 3,484.7 (478.3) 642.3 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 AMYRIS INC AMRS US 236.8 (112.5) 33.5 ANGIE'S LIST INC 8AL GR 124.3 (20.3) (30.0) ANGIE'S LIST INC ANGI US 124.3 (20.3) (30.0) ANGIE'S LIST INC 8AL TH 124.3 (20.3) (30.0) ARRAY BIOPHARMA AR2 GR 135.2 (23.3) 72.2 ARRAY BIOPHARMA AR2 TH 135.2 (23.3) 72.2 ARRAY BIOPHARMA ARRY US 135.2 (23.3) 72.2 ASPEN AEROGELS I ASPN US 88.2 (80.7) (5.2) ASPEN AEROGELS I AP1 GR 88.2 (80.7) (5.2) AUTOZONE INC AZO US 7,371.8 (1,808.2) (1,016.1) AUTOZONE INC AZ5 GR 7,371.8 (1,808.2) (1,016.1) AUTOZONE INC AZ5 TH 7,371.8 (1,808.2) (1,016.1) AXIM INTERNATION AXIM US 0.1 (0.1) (0.1) BARRACUDA NETWOR 7BM GR 350.1 (5.7) 30.5 BARRACUDA NETWOR CUDA US 350.1 (5.7) 30.5 BERRY PLASTICS G BERY US 5,367.0 (135.0) 684.0 BERRY PLASTICS G BP0 GR 5,367.0 (135.0) 684.0 BIOCRYST PHARM BCRX US 43.4 (5.7) 22.0 BIOCRYST PHARM BO1 TH 43.4 (5.7) 22.0 BIOCRYST PHARM BO1 GR 43.4 (5.7) 22.0 BRP INC/CA-SUB V DOO CN 2,019.7 (17.0) 172.7 BRP INC/CA-SUB V BRPIF US 2,019.7 (17.0) 172.7 BRP INC/CA-SUB V B15A GR 2,019.7 (17.0) 172.7 BURLINGTON STORE BUI GR 2,547.8 (136.3) 124.8 BURLINGTON STORE BURL US 2,547.8 (136.3) 124.8 CABLEVISION SY-A CVC US 6,542.9 (5,210.9) 281.8 CABLEVISION SY-A CVY GR 6,542.9 (5,210.9) 281.8 CAESARS ENTERTAI C08 GR 24,376.7 (2,276.8) 566.0 CAESARS ENTERTAI CZR US 24,376.7 (2,276.8) 566.0 CALLIDUS CAPITAL CBL CN 444.5 (4.3) - CALLIDUS CAPITAL 28K GR 444.5 (4.3) - CANNABIS CAPITAL CBCA US 0.0 (0.0) (0.0) CANNAVEST CORP CANV US 10.7 (0.2) (1.3) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CASELLA WASTE CWST US 649.9 (8.5) (18.9) CASELLA WASTE WA3 GR 649.9 (8.5) (18.9) CC MEDIA-A CCMO US 14,597.1 (9,128.0) 643.8 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CENVEO INC CVO US 1,206.8 (511.7) 145.0 CHOICE HOTELS CHH US 554.9 (454.6) 109.5 CHOICE HOTELS CZH GR 554.9 (454.6) 109.5 CIENA CORP CIE1 GR 1,795.5 (80.8) 641.3 CIENA CORP CIE1 TH 1,795.5 (80.8) 641.3 CIENA CORP CIEN US 1,795.5 (80.8) 641.3 CIENA CORP CIEN TE 1,795.5 (80.8) 641.3 CINCINNATI BELL CBB US 2,101.5 (670.7) 7.7 DELEK LOGISTICS DKL US 301.3 (4.1) 14.8 DELEK LOGISTICS D6L GR 301.3 (4.1) 14.8 DEX MEDIA INC DXM US 2,275.0 (782.0) 162.0 DIRECTV DIG1 GR 22,520.0 (6,512.0) (929.0) DIRECTV DTV CI 22,520.0 (6,512.0) (929.0) DIRECTV DTV US 22,520.0 (6,512.0) (929.0) DOMINO'S PIZZA DPZ US 524.3 (1,269.0) 113.5 DOMINO'S PIZZA EZV GR 524.3 (1,269.0) 113.5 DOMINO'S PIZZA EZV TH 524.3 (1,269.0) 113.5 DUN & BRADSTREET DNB US 1,807.2 (1,061.9) (85.5) DUN & BRADSTREET DB5 GR 1,807.2 (1,061.9) (85.5) EDGEN GROUP INC EDG US 883.8 (0.8) 409.2 ELEVEN BIOTHERAP EBIO US 5.1 (6.1) (2.9) EMPIRE RESORTS I LHC1 GR 38.7 (14.0) (14.6) EMPIRE RESORTS I NYNY US 38.7 (14.0) (14.6) EMPIRE STATE -ES ESBA US 1,122.2 (31.6) (925.9) EMPIRE STATE-S60 OGCP US 1,122.2 (31.6) (925.9) FAIRPOINT COMMUN FONN GR 1,546.4 (338.8) 25.3 FAIRPOINT COMMUN FRP US 1,546.4 (338.8) 25.3 FERRELLGAS-LP FGP US 1,589.9 (88.9) 89.0 FERRELLGAS-LP FEG GR 1,589.9 (88.9) 89.0 FIVE9 INC FIVN US 56.3 (3.0) 1.1 FIVE9 INC 1F9 GR 56.3 (3.0) 1.1 FORESIGHT ENERGY FHR GR 1,782.6 (118.5) 6.9 FREESCALE SEMICO 1FS TH 3,100.0 (3,851.0) 1,244.0 FREESCALE SEMICO FSL US 3,100.0 (3,851.0) 1,244.0 FREESCALE SEMICO 1FS GR 3,100.0 (3,851.0) 1,244.0 GAMING AND LEISU GLPI US 2,561.9 (68.0) (44.7) GAMING AND LEISU 2GL GR 2,561.9 (68.0) (44.7) GENTIVA HEALTH GTIV US 1,234.9 (297.6) 99.2 GENTIVA HEALTH GHT GR 1,234.9 (297.6) 99.2 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GLOBALSTAR INC P8S GR 1,350.0 (74.3) (97.3) GLOBALSTAR INC GSAT US 1,350.0 (74.3) (97.3) GLORI ENERGY INC GLRI US 0.1 (0.0) - GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 GTT COMMUNICATIO GTT US 168.5 (0.1) (25.3) HCA HOLDINGS INC 2BH TH 29,809.0 (6,467.0) 2,986.0 HCA HOLDINGS INC 2BH GR 29,809.0 (6,467.0) 2,986.0 HCA HOLDINGS INC HCA US 29,809.0 (6,467.0) 2,986.0 HD SUPPLY HOLDIN 5HD GR 6,552.0 (750.0) 1,446.0 HD SUPPLY HOLDIN HDS US 6,552.0 (750.0) 1,446.0 HORIZON PHARMA I HPM GR 299.1 (229.2) 93.2 HORIZON PHARMA I HPM TH 299.1 (229.2) 93.2 HORIZON PHARMA I HZNP US 299.1 (229.2) 93.2 HOVNANIAN ENT-A HO3 GR 1,838.8 (462.5) 1,122.1 HOVNANIAN ENT-A HOV US 1,838.8 (462.5) 1,122.1 HOVNANIAN ENT-B HOVVB US 1,838.8 (462.5) 1,122.1 HOVNANIAN-A-WI HOV-W US 1,838.8 (462.5) 1,122.1 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) IMPRIVATA INC I62 GR 35.6 (4.3) (10.8) IMPRIVATA INC IMPR US 35.6 (4.3) (10.8) INCYTE CORP ICY TH 666.8 (162.4) 474.2 INCYTE CORP INCY US 666.8 (162.4) 474.2 INCYTE CORP ICY GR 666.8 (162.4) 474.2 INFOR US INC LWSN US 6,515.2 (555.7) (303.6) INTERCEPT PHARMA I4P GR 141.9 (153.7) (148.2) INTERCEPT PHARMA I4P TH 141.9 (153.7) (148.2) INTERCEPT PHARMA ICPT US 141.9 (153.7) (148.2) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,642.6 (117.4) 221.0 JUST ENERGY GROU JE CN 1,642.6 (117.4) 221.0 JUST ENERGY GROU 1JE GR 1,642.6 (117.4) 221.0 KINAXIS INC KXS CN 44.6 (70.4) (6.4) L BRANDS INC LTD GR 6,663.0 (609.0) 1,070.0 L BRANDS INC LTD TH 6,663.0 (609.0) 1,070.0 L BRANDS INC LB US 6,663.0 (609.0) 1,070.0 LEAP WIRELESS LWI GR 4,662.9 (125.1) 346.9 LEAP WIRELESS LWI TH 4,662.9 (125.1) 346.9 LEAP WIRELESS LEAP US 4,662.9 (125.1) 346.9 LEE ENTERPRISES LE7 GR 797.3 (155.6) 0.8 LEE ENTERPRISES LEE US 797.3 (155.6) 0.8 LORILLARD INC LLV TH 3,912.0 (2,161.0) 897.0 LORILLARD INC LLV GR 3,912.0 (2,161.0) 897.0 LORILLARD INC LO US 3,912.0 (2,161.0) 897.0 LUMENPULSE INC LMP CN 29.4 (38.4) 3.5 LUMENPULSE INC 0L6 GR 29.4 (38.4) 3.5 LUMENPULSE INC LMPLF US 29.4 (38.4) 3.5 MARRIOTT INTL-A MAQ TH 6,665.0 (1,625.0) (1,031.0) MARRIOTT INTL-A MAR US 6,665.0 (1,625.0) (1,031.0) MARRIOTT INTL-A MAQ GR 6,665.0 (1,625.0) (1,031.0) MDC PARTNERS-A MDZ/A CN 1,570.3 (94.1) (218.7) MDC PARTNERS-A MD7A GR 1,570.3 (94.1) (218.7) MDC PARTNERS-A MDCA US 1,570.3 (94.1) (218.7) MERITOR INC MTOR US 2,531.0 (782.0) 298.0 MERITOR INC AID1 GR 2,531.0 (782.0) 298.0 MERRIMACK PHARMA MACK US 165.0 (65.8) 81.9 MERRIMACK PHARMA MP6 GR 165.0 (65.8) 81.9 MICHAELS COS INC MIK US 1,716.0 (2,734.0) 493.0 MONEYGRAM INTERN MGI US 4,761.4 (39.5) 115.9 MORGANS HOTEL GR M1U GR 695.2 (202.0) 129.7 MORGANS HOTEL GR MHGC US 695.2 (202.0) 129.7 MOXIAN CHINA INC MOXC US 0.0 (0.0) (0.0) MPG OFFICE TRUST MPG US 1,280.0 (437.3) - NATIONAL CINEMED NCMI US 998.4 (179.2) 99.9 NATIONAL CINEMED XWM GR 998.4 (179.2) 99.9 NAVISTAR INTL IHR GR 7,727.0 (4,072.0) 1,070.0 NAVISTAR INTL IHR TH 7,727.0 (4,072.0) 1,070.0 NAVISTAR INTL NAV US 7,727.0 (4,072.0) 1,070.0 NEKTAR THERAPEUT ITH GR 487.0 (9.8) 225.5 NEKTAR THERAPEUT NKTR US 487.0 (9.8) 225.5 NEW ENG RLTY-LP NEN US 180.1 (23.2) - NEXSTAR BROADC-A NXZ GR 1,148.8 (8.4) 134.7 NEXSTAR BROADC-A NXST US 1,148.8 (8.4) 134.7 NII HOLDING INC NIHD* MM 8,189.7 (8.8) 1,078.9 NYMOX PHARMACEUT NYMX US 0.9 (6.3) (3.8) OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) OPOWER INC 38O GR 63.1 (6.3) (11.9) OPOWER INC OPWR US 63.1 (6.3) (11.9) OPOWER INC 38O TH 63.1 (6.3) (11.9) OVERSEAS SHIPHLD OSGIQ US 3,658.3 (51.3) 480.8 PALM INC PALM US 1,007.2 (6.2) 141.7 PHIBRO ANIMAL HE PAO EU 473.3 (78.7) 177.3 PHIBRO ANIMAL HE PAHC LN 473.3 (78.7) 177.3 PHIBRO ANIMAL HE PAO GR 473.3 (78.7) 177.3 PHIBRO ANIMAL-A PAHC US 473.3 (78.7) 177.3 PHIBRO ANIMAL-A PB8 GR 473.3 (78.7) 177.3 PHILIP MORRIS IN PM US 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN 4I1 GR 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1CHF EU 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PMI SW 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM FP 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN 4I1 TH 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1EUR EU 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1 TE 36,137.0 (7,157.0) 854.0 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLY GEM HOLDINGS PGEM US 1,033.7 (107.2) 199.4 PLY GEM HOLDINGS PG6 GR 1,033.7 (107.2) 199.4 PROTALEX INC PRTX US 2.8 (7.0) 2.3 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QDZ GR 443.2 (51.2) 106.0 QUALITY DISTRIBU QLTY US 443.2 (51.2) 106.0 QUINTILES TRANSN Q US 3,061.9 (559.5) 571.3 QUINTILES TRANSN QTS GR 3,061.9 (559.5) 571.3 RADIUS HEALTH IN 1R8 GR 12.8 (24.5) (22.7) RADIUS HEALTH IN RDUS US 12.8 (24.5) (22.7) RADNET INC PQI GR 737.2 (9.3) 61.4 RADNET INC RDNT US 737.2 (9.3) 61.4 REGAL ENTERTAI-A RGC US 2,787.3 (751.2) 142.6 REGAL ENTERTAI-A RETA GR 2,787.3 (751.2) 142.6 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTPATH INC PRM US 208.0 (91.7) 3.6 RETROPHIN INC 17R GR 94.0 (35.4) (107.0) RETROPHIN INC RTRX US 94.0 (35.4) (107.0) REVLON INC-A REV US 2,105.1 (589.0) 248.9 REVLON INC-A RVL1 GR 2,105.1 (589.0) 248.9 RITE AID CORP RAD US 6,946.5 (2,046.4) 1,643.0 RITE AID CORP RTA GR 6,946.5 (2,046.4) 1,643.0 ROCKWELL MEDICAL RMTI US 26.8 (3.5) 8.2 ROCKWELL MEDICAL RWM TH 26.8 (3.5) 8.2 ROCKWELL MEDICAL RWM GR 26.8 (3.5) 8.2 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SABRE CORP 19S TH 4,750.4 (312.9) (279.6) SABRE CORP 19S GR 4,750.4 (312.9) (279.6) SABRE CORP SABR US 4,750.4 (312.9) (279.6) SALLY BEAUTY HOL S7V GR 2,106.0 (268.8) 715.8 SALLY BEAUTY HOL SBH US 2,106.0 (268.8) 715.8 SEQUENOM INC SQNM US 122.9 (58.6) 40.8 SERVICEMASTER GL SERV US 5,197.0 (369.0) 240.0 SILVER SPRING NE SSNI US 524.4 (97.1) 97.5 SILVER SPRING NE 9SI TH 524.4 (97.1) 97.5 SILVER SPRING NE 9SI GR 524.4 (97.1) 97.5 SMART TECHNOL-A SMA CN 374.2 (29.4) 71.6 SPORTSMAN'S WARE 06S GR 224.2 (121.1) 83.2 SPORTSMAN'S WARE SPWH US 224.2 (121.1) 83.2 SUNEDISON INC SUNE* MM 7,166.1 (236.5) 250.8 SUNEDISON INC WFR TH 7,166.1 (236.5) 250.8 SUNEDISON INC WFR GR 7,166.1 (236.5) 250.8 SUNEDISON INC SUNE US 7,166.1 (236.5) 250.8 SUNGAME CORP SGMZ US 2.2 (3.6) (3.9) SUPERVALU INC SJ1 GR 4,374.0 (738.0) 52.0 SUPERVALU INC SJ1 TH 4,374.0 (738.0) 52.0 SUPERVALU INC SVU US 4,374.0 (738.0) 52.0 SURNA INC SRNA US 0.0 (2.6) (2.6) THRESHOLD PHARMA THLD US 94.7 (29.0) 50.3 TOWN SPORTS INTE CLUB US 410.6 (50.2) 26.1 TRANSDIGM GROUP TDG US 6,399.3 (125.6) 975.5 TRANSDIGM GROUP T7D GR 6,399.3 (125.6) 975.5 TRINET GROUP INC TNET US 1,340.4 (46.1) 93.8 TRINET GROUP INC TN3 GR 1,340.4 (46.1) 93.8 TRINET GROUP INC TNETEUR EU 1,340.4 (46.1) 93.8 TRINET GROUP INC TN3 TH 1,340.4 (46.1) 93.8 ULTRA PETROLEUM UPL US 2,881.8 (227.7) (374.8) ULTRA PETROLEUM UPM GR 2,881.8 (227.7) (374.8) UNISYS CORP USY1 GR 2,399.2 (659.6) 421.4 UNISYS CORP USY1 TH 2,399.2 (659.6) 421.4 UNISYS CORP UISEUR EU 2,399.2 (659.6) 421.4 UNISYS CORP UIS US 2,399.2 (659.6) 421.4 UNISYS CORP UISCHF EU 2,399.2 (659.6) 421.4 UNISYS CORP UIS1 SW 2,399.2 (659.6) 421.4 VANGUARD MINING VNMC US 1.4 (1.5) (0.2) VARONIS SYSTEMS VRNS US 33.7 (1.5) 1.8 VARONIS SYSTEMS VS2 GR 33.7 (1.5) 1.8 VECTOR GROUP LTD VGR GR 1,459.2 (12.6) 422.5 VECTOR GROUP LTD VGR US 1,459.2 (12.6) 422.5 VENOCO INC VQ US 738.2 (130.8) (13.4) VERISIGN INC VRSN US 2,609.3 (457.6) (253.6) VERISIGN INC VRS TH 2,609.3 (457.6) (253.6) VERISIGN INC VRS GR 2,609.3 (457.6) (253.6) VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VISKASE COS I VKSC US 346.7 (16.3) 106.1 WEIGHT WATCHERS WW6 TH 1,483.1 (1,452.8) (31.0) WEIGHT WATCHERS WTW US 1,483.1 (1,452.8) (31.0) WEIGHT WATCHERS WW6 GR 1,483.1 (1,452.8) (31.0) WEST CORP WT2 GR 3,544.1 (709.4) 405.3 WEST CORP WSTC US 3,544.1 (709.4) 405.3 WESTMORELAND COA WME GR 1,407.1 (206.2) (30.5) WESTMORELAND COA WLB US 1,407.1 (206.2) (30.5) XERIUM TECHNOLOG TXRN GR 631.1 (11.8) 104.4 XERIUM TECHNOLOG XRM US 631.1 (11.8) 104.4 YRC WORLDWIDE IN YEL1 GR 2,215.1 (363.1) 193.6 YRC WORLDWIDE IN YEL1 TH 2,215.1 (363.1) 193.6 YRC WORLDWIDE IN YRCW US 2,215.1 (363.1) 193.6 ********* 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 ***