/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140908.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, September 8, 2014, Vol. 18, No. 250 Headlines 22ND CENTURY: Joins Tobacco Master Settlement Agreement 5610 IMPERIAL: Case Summary & Largest Unsecured Creditor AEROVISION HOLDINGS: Has Until Oct. 17 to Decide on Leases AMERICAN ENERGY WOODFORD: Moody's Assigns B3 Corp. Family Rating AMERICAN ENERGY WOODFORD: S&P Assigns 'B-' Corp. Credit Rating AMSTED INDUSTRIES: Moody's Rates $600MM Sr. Unsecured Notes Ba3 AMSTED INDUSTRIES: S&P Rates Proposed $250MM Unsec. Notes 'BB' ANTERO RESOURCES: Moody's Rates New $400MM Add-on Notes 'B1' ANTERO RESOURCES: S&P Raises CCR to 'BB' on Production Increase ARRAYIT CORP: Incurs $446K Net Loss in Second Quarter AS SEEN ON TV: Extends Warrants Expiration to Sept. 30 AS SEEN ON TV: Has Defaulted on Two Notes ASPEN GROUP: Obtains $3.7 Million From Securities Sale ATP OIL: Trustee Sues Insurer For Deepwater Horizon Defense AZIZ CONVENIENCE: Commences Adversary Case to Stop Foreclosure AZIZ CONVENIENCE: Interim Cash Collateral Hearing on Sept. 17 AZIZ CONVENIENCE: Wants to Stop Foreclosure on Hidalgo Property BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating BEST BUY: Fitch Hikes Issuer Default Rating to BB; Outlook Stable BIJAN NAVABIAN: Melville Brokers Sale of Life Insurance Policy CAESARS ENTERTAINMENT: Bank Debt Due March 2017 Trades at 4% Off CAESARS ENTERTAINMENT: September 2020 Bank Debt Trades at 3% Off CALIFORNIA RESOURCES: Moody's Assigns Ba1 Corporate Family Rating CANNABIS SCIENCE: Incurs $1.56-Mil. Net Loss in June 30 Quarter CASH STORE: Default Status Report Per National Policy 12-203 CEQUEL COMMUNICATIONS: Moody's Keeps B1 CFR, Rates New Bonds B3 CEQUEL COMMUNICATIONS: S&P Raises Secured Bank Debt Rating to 'BB' CHINA BAK: Net Working Capital Deficiency at $31.6MM at June 30 CHIQUITA BRANDS: ISS Recommends Vote Against Inversion Plan CLEVELAND IMAGING: Voluntary Chapter 11 Case Summary CLUBCORP CLUB: S&P Affirms 'B+' Corp. Credit Rating CONSOLIDATED COMMUNICATIONS: Moody's Rates $200MM Sr. Notes 'B3' CONSOLIDATED COMMUNICATIONS: S&P Rates New $200MM Unsec. Notes B- CONSTAR INT'L: Creditors Eyeing Dechert's Role in Ch. 11 COPYTELE INC: Changes Name to Itus Corp. to Reflect New Business COPYTELE INC: Cancels License Pact with Videocon COPYTELE INC: Court Rules in Loyalty Conversion Systems Cases COYOTE MOON: Bankruptcy Court Dismisses Chapter 11 Case CRS HOLDING: Section 341(a) Meeting Scheduled for Oct. 15 CRS HOLDING: Has Interim Approval of $750,000 DIP Loan CRS HOLDING: DOJ Watchdog Seeks Appointment of Ch. 11 Trustee CRS HOLDING: Secured Creditor Seeks Dismissal of Ch. 11 Cases CRS HOLDING: Has Authority to Reject Weston Lease CRUMBS BAKE SHOPS: Completes $7MM Sale; Shareholders Get Nothing CWGS ENTERPRISES: S&P Raises CCR to 'B+' on Lower Leverage DETROIT, MI: Judge Challenges Plan Opponents in Day 2 of Trial DETROIT, MI: S&P Lowers Rating on 5 CUSIPs Revenue Bonds to 'D' DEWEY & LEBOEUF: Trustee Seeks $84K in Two Clawback Suits DIALOGIC INC: Approves $770,000 Retention Bonuses for Executives DICKINSON COUNTY: Fitch Lowers Rating on $21.455MM Bonds to 'B' EDUCATION MANAGEMENT: Finalizes Restructuring Support Agreement EDUCATION MANAGEMENT: S&P Lowers CCR to 'CC'; Outlook Negative ENDEAVOUR INT'L: Talisman Ceases to Hold 5% Equity Stake ENDEAVOUR INT'L: Moody's Lowers Corp. Family Rating to 'Ca' ENDEAVOUR INT'L: Fails to Pay $33.5-Mil. Interest Due Sept. 2 ENDICOTT INTERCONNECT: Plan Solicitation Deadline Moved to Dec. 14 ENERGY FUTURE: Bondholders Seek Answers on NextEra's Bid EOS PETRO: Has $12.7-Mil. Net Loss for June 30 Quarter EQUITABLE OF IOWA: Fitch Affirms 'BB' Preferred Stock Rating EURAMAX INTERNATIONAL: Okays Performance Incentives for Employees FAIRMONT GENERAL: Sept. 19 Closing of Sale to Alecto Set FBOP CORPORATION: Banks Say They're Entitled to Tax Interest FRONTIER COMMUNICATIONS: Fitch Rates New $1.5BB Note Offering 'BB' GARLOCK SEALING: Coltec Wants an Independent Fee Examiner GENERAL MOTORS: Canadian Class Action Trial to Begin Tomorrow GIGGLES N HUGS: Posts $477K Net Loss in Q2 Ended June 29 GLOBAL ARENA: Reports $397K Net Loss in Q2 Ended June 30 GENERAL STEEL: Files Amendment to 2013 FY Report GENERAL STEEL: Amends March 31 Quarter Report GLOBAL COMPUTER: Files Bare-Bones Chapter 11 Petition GLOBAL COMPUTER: Case Summary & 16 Largest Unsecured Creditors GLOBAL DIGITAL: Posts $3.39-Mil. Net Loss for Q2 Ended June 30 GM FINANCIAL: Moody's Hikes Corp. Family Rating to 'Ba1' GOLDEN LAND: Section 341(a) Meeting Adjourned to Wednesday GRANDPARENTS.COM INC: Amends March 31 Quarter Report GRANDPARENTS.COM INC: Reports $3.14-Mil. Loss in June 30 Quarter GROWLIFE INC: Incurs $19.2-Mil. Net Income for June 30 Quarter HEALTHSOUTH CORP: Moody's Rates New $175MM Sr. Unsec. Notes 'Ba3' HEALTHSOUTH CORP: S&P Retains 'BB-' CCR Over $175MM Notes Add-On HELIA TEC: Court Denies Bid to Amend Order on Case Conversion ICTS INTERNATIONAL: Igal Tabori Reports 15% Equity Stake IDEARC INC: Was Solvent During 2006 Spinoff, 5th Circuit Says IN PLAY MEMBERSHIP: Court Approves Stipulation With Meadow Ranch IN PLAY MEMBERSHIP: Fourth Amended Reorganization Plan Confirmed IN PLAY MEMBERSHIP: Mile High's Plan Objection Deemed Withdrawn INTELLIGENT LIVING: Posts $2.02-Mil. Income in June 30 Quarter IVANHOE ENERGY: Regains NASDAQ-Listing Compliance J FAW: North Carolina Appeals Court Rules in Century Fire Dispute JAMES RIVER COAL: Completes Sale of Mining Assets to Blackhawk JAMES RIVER COAL: Murphy Named to Board; CEO Socha Steps Down JEH COMPANY: Amended Chapter 11 Plan Declared Effective in July KEMET CORP: Unit Amends Option Agreement With NEC Corp. KOGETO INC: Reports $308K Net Loss for Second Quarter KEYUAN PETROCHEMICALS: Has $1.02-Mil. Loss in June 30 Quarter KORLEY B. SEARS: Court Grants Summary Judgment to Trust et al. LATITUDE 360: Reports $2.39-Mil. Net Loss in Second Quarter LDR INDUSTRIES: Files for Bankruptcy in Chicago LE-NATURE INC: Trustee Cuts Another Deal Over Negligence Claims LINN ENERGY: Moody's Rates New $1BB Senior Unsecured Notes 'B1' LINN ENERGY: S&P Lowers Rating on Sr. Unsecured Debt to 'B' LOVE CULTURE: Files Schedules of Assets and Liabilities MACKEYSER HOLDINGS: 3-Member Creditors Committee Formed MASON COPPELL: Creditors Committee Submits Plan of Liquidation MADISON BENTLEY: Trustee Can Bring Alter Ego, Veil-Piercing Claims MATAGORDA ISLAND GAS: Seeks Chapter 11 Protection MERCATOR MINERALS: Announces Resignation of Directors & Officers MF GLOBAL: PwC Stuck With $1B Euro Debt Malpractice Suit MF GLOBAL: Judge Allows Corzine, Others to Tap Insurance MICHIGAN FINANCE: Fitch Assigns 'BB+' Rating on $80.2MM Bonds MINERAL PARK: Meeting to Form Creditors Committee Tomorrow MOLYCORP INC: S&P Puts 'CCC' CCR on CreditWatch Positive MONTREAL MAINE: Plan Moratorium Period Extended to Sept. 30 NAVISTAR INTERNATIONAL: Net Loss Down to $2 Million in Q3 NEPHROS INC: Obtains $1.7 Million in Bridge Financing NEW ENGLAND COMPOUNDING: Ex-Supervising Pharmacist Arrested NORTHERN TIER: S&P Assigns 'B+' CCR; Outlook Stable NORTHWOOD PROPERTIES: Ch.7 Trustee's Suit Against Owner Tossed OHCMC-OSWEGO: Creditor Schoppe Design Accepts Chapter 11 Plan OHCMC-OSWEGO: Exclusive Plan Filing Period Extended to Sept. 30 OVERSEAS SHIPHOLDING: Appoints Geoff Carpenter as VP & Treasurer PIEDMONT CENTER: To Sell Properties to America's Realty for $8.3MM PRAXSYN CORP: Incurs $780K Net Loss in Q2 Ended June 30 PROSPECT PARK: Seeks Extension of Exclusive Solicitation Period PUERTO RICO ELECTRIC: AlixPartners to Lead Restructuring REVEL AC: Night Club Owners Sue to Stay Open RGIS HOLDINGS: S&P Lowers CCR to 'B' on Weaker Performance RUE21 INC: Bank Debt Trades at 12% Off S.B. RESTAURANT: Has Until Nov. 14 to File Plan, Disclosures S.B. RESTAURANT: Court Approved Sale of Assets to CM7 Capital SA-ST. PETERSBURG: Seeks Chapter 11 Protection SEAFIELD RESOURCES: Unit Files for Reorganization in Colombia SHELBOURNE NORTH WATER: Disclosure Statement Tentatively OK'd SOUTH & HEADLEY: Case Summary & 20 Largest Unsecured Creditors STEEL DYNAMICS: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba2' STEEL DYNAMICS: S&P Affirms 'BB+' CCR & Rates $1BB Notes 'BB+' SYNOVUS FINANCIAL: Moody's Puts 'B1' Sr. Debt Rating on Review TEINE ENERGY: S&P Assigns 'B' CCR; Outlook Stable TEJANO CENTER: S&P Affirms B+ Rating on $24.45MM 2009A Rev. Bonds TEMPLAR ENERGY: S&P Rates New $550MM 2nd Lien Term Loan 'B-' TMT GROUP: 5th Cir. Says Vantage Shares Not Property of Debtors TMT USA: Proposes Application of Excess Proceeds in Sold Vessels TMT USA: Su Responds to Motion to Clarify Matters in Lawsuits TMT USA: Faces Lawsuit Over Patented Technology Used in Vessel TODD-SOUNDELUX: Obtains Approval to Sell Assets TPC GROUP: Moody's Affirms B2 Corp. Family Rating; Outlook Neg. TRANS ENERGY: Settles Claims Over Clean Water Act Violations TRIBECA MARKET: 40% Reduction of Pick & Zabicki's Fees Affirmed TRM HOLDINGS: S&P Cuts CCR to 'CCC+' on Declining Profitability TRULAND GROUP: Auctions Begin for Trucks, Trailers and Vans UNIVERSAL COOPERATIVES: Gets Approval to Implement Incentive Plan U.S. DRY CLEANING: Has Debt-to-Equity Exchange Offer USEC INC: Court Confirms Chapter 11 Plan VALLEJO, CA: Quake Marks First Major Test for City After Ch. 9 VARIANT HOLDING: Meeting to Form Creditors' Panel Set for Sept. 17 VAUGHAN COMPANY: Defendants' Response Deadline Extended to October VICTORY ENERGY: To Participate in Upcoming Investor Conferences WHEATLAND MARKETPLACE: Cash Collateral Hearing Set for Sept. 30 WHEATLAND MARKETPLACE: Seeks to Dismiss Chapter 11 Case WHEATLAND MARKETPLACE: Has Until Sept. 30 to File Chapter 11 Plan WIRELESS RONIN: Posts $989K Net Loss for June 30 Quarter * 2nd Circ. Says No Bias in Fuel Cell Fraudster's Trial * Atty Can't Discharge Stolen Client Funds in Bankruptcy * Automatic Stay Arises When Involuntary Petition Filed * Bid to Sell NYC Rent-Stabilized Lease in Ch. 7 Raises Alarm * Criminal Fugitive Allowed to Appeal Civil Judgment * Fitch Publishes Report on Pension Liabilities in Bankruptcy * IMF Considers Rules for Bondholders to Share Restructuring Cost * Federal Sale of Troubled Mortgages Draws Criticism * SEC Wants More Detail on Loans-Backing Securities * BOND PRICING: For the Week From September 1 to 5, 2014 ********* 22ND CENTURY: Joins Tobacco Master Settlement Agreement ------------------------------------------------------- 22nd Century Group, Inc., disclosed that it has become a member of the U.S. tobacco Master Settlement Agreement through the acquisition of NASCO Products, LLC, a federally licensed tobacco product manufacturer and participating member of the MSA since 2005. 22nd Century Group, NASCO Products, and the Settling States of the MSA have executed an Amended Adherence Agreement under which 22nd Century Group and its subsidiaries have agreed to comply with the MSA and other requirements regarding the Company's manufacturing and marketing of tobacco products. The MSA is an agreement among 46 U.S. states, the District of Columbia, 5 U.S. territories and certain participating tobacco product manufacturers, which became effective in November 1998 and is administered by the National Association of Attorneys General. In brief, participating manufacturers of the MSA have agreed to various restrictions on tobacco product marketing and to contribute funds in perpetuity to the Settling States based on unit sales of cigarettes. In exchange for these settlement payments and marketing restrictions, the Settling States agreed to release and discharge certain past, present and future legal claims against the participating manufacturers of the MSA such as claims that relate to the use of or exposure to tobacco products manufactured in the ordinary course of business, including without limitation any future claims for reimbursement of health care costs allegedly associated with the use of or exposure to tobacco products. Now that 22nd Century's super-premium priced brands, RED SUN(R) and MAGIC(R), are MSA brands, the Company will ramp up production of its products within the next 30 days and will launch sales and distribution efforts across the United States. Since the introduction of 22nd Century's brands in early 2011, sales have been intentionally curtailed by the Company in order to limit the complexity and costs associated with becoming a signatory of the MSA. Joseph Pandolfino, founder and CEO of 22nd Century Group, stated, "We are very pleased to have been approved by the Settling States as a participating manufacturer of the MSA so that we can now sell our brands under the MSA, which will assist in producing sustainable revenue for the Company. Management greatly appreciates our shareholders' patience during this lengthy, but now concluded process." The MSA and other state laws and regulations have made it extremely burdensome for non-participating manufacturers (to the MSA) to operate. Further, there has not been a new participating manufacturer approved under the MSA since 2007. Approximately 97% of cigarette unit sales in the U.S. are subject to the MSA. The Settling States have been paid more than $90 billion in MSA payments since the inception of the settlement agreement in 1998. 22nd Century will pay approximately $17,000 this week to the MSA in a settlement payment for sales of its commercial brands before 22nd Century became an MSA signatory. About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. 22nd Century reported a net loss of $26.15 million in 2013, a net loss of $6.73 million in 2012 and a net loss of $1.34 million in 2011. As of June 30, 2014, the Company had $11.24 million in total assets, $2.11 million in total liabilities, and $9.12 million in total shareholders' equity. 5610 IMPERIAL: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: 5610 Imperial Highway, LLC 5610 Imperial Highway South Gate, CA 90280 Case No.: 14-26976 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: September 4, 2014 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Benjamin Nachimson, Esq. WOOLF GAFNI & FOWLER, LLP 10850 Wilshire Blvd Ste 510 Los Angeles, CA 90024 Tel: 310-474-8776 Fax: 310-919-3037 Email: ben.nachimson@wgfllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jeffrey Meisel, managing member. The Debtor listed Tuition Finance Corporation as its largest unsecured creditor holding a claim of $300,000. A copy of the petition is available for free at: http://bankrupt.com/misc/cacb14-26976.pdf AEROVISION HOLDINGS: Has Until Oct. 17 to Decide on Leases ---------------------------------------------------------- The Hon. Paul G. Hyman, Jr., of the U.S. Bankruptcy Court for the Southern District of Florida extended until Oct. 17, 2014, the time within which Aerovision Holdings 1 Corp. must assume or reject executory contracts and unexpired leases of non-residential real property. As reported in the Troubled Company Reporter on Aug. 21, 2014, the Debtor explained that it needs additional time to determine whether to assume or reject contracts and leases due to a complex resolution discussions and negotiations with contested creditors. The Debtor said it is in negotiations with a group of contested creditors namely Tiger Aircraft Corp, Logix Global, Inc. and Aerovision, LLC. The results of the negotiations will be important to the direction of the Disclosure Statement and Plan in the case. The Debtor added it is still addressing case issues and needs additional time to further negotiate with the Debtor's creditors, towards a resolution of case issues and a possible consensual Plan. About Aerovision Holdings Aerovision Holdings 1 Corp. filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-24624) on June 21, 2013, in its home-town in West Palm Beach, Florida. Mark Daniels signed the petition as president. The Debtor estimated assets in excess of $10 million and liabilities of $1 million to $10 million. Craig I. Kelley, Esq., at Kelley & Fulton, PL, serves as the Debtor's counsel. AMERICAN ENERGY WOODFORD: Moody's Assigns B3 Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned first time ratings to American Energy - Woodford, LLC (AEW) including a B3 Corporate Family Rating (CFR), a B3-PD Probability of Default Rating, and a Caa1 rating to its proposed $325 million senior notes due 2022. Moody's also assigned a SGL-3 Speculative Grade Liquidity Rating to AEW. The proceeds from the proposed notes will be used to repay revolver drawings, to fund future acquisition and drilling capital, and to potentially return approximately $100 million of capital to the Sponsor. The rating outlook is stable. "American Energy - Woodford has accumulated a compelling acreage position in Oklahoma's Central Northern Oklahoma Woodford (CNOW) play providing potentially strong production and reserve growth," commented Amol Joshi, Moody's Vice President. "Nonetheless, the company's largely undeveloped reserve base, relatively complex geological formations and execution risk restrains its rating until the company successfully implements its development drilling plan." Assignments: Corporate Family Rating of B3 Probability of Default Rating of B3-PD Senior Unsecured Notes due 2022, Rated Caa1 (LGD 4) Speculative Grade Liquidity rating of SGL-3 Outlook is stable Ratings Rationale The B3 CFR reflects AEW's small scale, early-stage operations, largely undeveloped reserve base, liquids-focused production concentrated in the CNOW play, and the inherent execution risk in implementing its drilling plan that will result in an outspending of cash flow through 2016. The rating is supported by the management team's strong track record and the substantial drilling inventory which provides visible production and cash flow growth potential with the application of horizontal drilling and completion techniques, to support deleveraging on a proved developed (PD) reserve and average daily production basis. The rating is restrained by the relatively complex geological composition of the play, and the need for specific attention to each location in order to optimize drilling results. The two primary targets are the Mississippi Lime, which is a carbonate reservoir, and the Woodford Shale, which is a less consistent and relatively thinner shale formation (average 50 foot of net pay) compared to the more prolific well known shale plays. Hence, more preparation is needed for development and results can be less predictable. AEW plans to shoot additional 3D seismic across the acreage. The company has a senior secured revolving credit facility and will have senior unsecured notes upon the closing of this notes issuance. The revolving credit facility is secured by a first priority claim on substantially all of the company's assets. The Caa1 senior unsecured note rating reflects the size of the revolver's potential priority claim relative to the senior unsecured notes, which results in the notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default (LGD) Methodology. The SGL-3 Speculative Grade Liquidity Rating is based on Moody's expectation that pro forma for the transaction, AEW will have adequate liquidity through 2015. In conjunction with the senior notes issuance, the borrowing base of AEW's revolving credit facility will be reduced to $135 million, all of which is expected to be undrawn at closing. These funds will primarily be used for capital expenditures, including development drilling and seismic activity related to its substantial acreage position. This revolver and the company's undrawn equity commitments serve as the company's primary form of liquidity. Financial covenants under the facility are Debt / EBITDAX of no more than 4.0x, EBITDAX / Interest of no less than 3.0x and a current ratio of at least 1.0x. Moody's expect AEW to remain in compliance with these covenants based on current capital spending plans. AEW's outlook is stable reflecting the company's expected production and reserve growth and its experienced management team. The primary catalyst for an upgrade will be successful execution of the drilling and development program leading to significantly higher production and proved developed reserves. If production growth is achieved to exceed 15,000 BOE per day, while debt to average daily production falls below $40,000 per BOE on a sustained basis, the ratings could be upgraded. A ratings downgrade could be considered if liquidity weakens falling below $50 million or the company fails to meet its production targets and deleveraging is subsequently slower than anticipated, leading to debt to average daily production sustained above $60,000 BOE. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. American Energy - Woodford, LLC is an independent exploration & production company headquartered in Oklahoma City, Oklahoma. AMERICAN ENERGY WOODFORD: S&P Assigns 'B-' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Oklahoma City-based American Energy - Woodford LLC. The rating outlook is stable. S&P also assigned its 'CCC' issue-level rating (two notches below the corporate credit rating) to the company's proposed $325 million senior unsecured notes maturing 2022. The '6' recovery rating indicates S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. "The stable rating outlook reflects our expectation that AEW's operating cash flow and availability under its RBL facility will be sufficient to fund planned capital spending over the next year and that the company will be successful in significantly expanding its production and reserves from initial levels," said Standard & Poor's credit analyst Scott Sprinzen. S&P would reassess its view of AEW's business risk profile if the company were able to increase its proved reserve base, proved developed percentage, and daily production rate to levels more in line with the 'B' rated peer group averages: average and median of 'B' rated peers of 132 million boe and 118 million boe, respectively, of proved reserves and average and median of B rated peers of 26 thousand boe per day and 20 thousand boe per day, respectively, of daily production. The ratings would be jeopardized if the company did not maintain adequate liquidity, with credit availability and operating cash flow more than sufficient to support development-related capital spending at least at maintenance levels. AMSTED INDUSTRIES: Moody's Rates $600MM Sr. Unsecured Notes Ba3 --------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 Corporate Family Rating ("CFR") of Amsted Industries Incorporated and the Ba3 rating of Amsted's $600 million senior unsecured notes due 2022. At the same time, Moody's has assigned a Ba3 rating to the new $250 million senior unsecured notes due 2024 that the company plans to issue. The ratings outlook is stable. The ratings consider the favorable prospects for Amsted's Rail Products and Vehicular Products segments, its strong cash flow and limited leverage, balanced against rapidly increasing share repurchase obligations under its Employees' Stock Ownership Plan ("ESOP"). Ratings Rationale The affirmation of the Ba2 CFR of Amsted reflects Moody's assessment that while the company's share repurchase obligations under its ESOP have increased more rapidly than previously anticipated, its strong balance sheet and cash flow generation will help to sustain the company's ability to fund the increased ESOP redemptions. Amsted's share price, determined by an independent valuation company, increased 32.1% since January 5, 2014, the last available share price prior to the refinancing that Amsted completed in March 2014. As a result, Amsted's ESOP redemptions are expected to be close to $500 million in fiscal 2014 but could exceed that level significantly in 2015 and 2016 if Amsted's share price were to continue its strong growth trajectory. At the same time, however, Moody's expects that Amsted will be able to fund the increasing ESOP obligations through (i) free cash flow that is expected to increase towards $400 million per annum, (ii) an available cash balance of circa $650 million pro forma for the net proceeds of the new notes and, possibly, (iii) external sources of funding, which could include accessing the company's $400 million revolving credit facility or using its $175 million trade receivables facility. The expected increase in free cash flow stems from a favorable demand environment for Amsted's rail car components as well as for components that Amsted manufactures for heavy duty trucks and light vehicles. Moody's anticipates robust demand for Amsted's products to persist over the next 18 to 24 months as increasing carloads in the North American rail transportation sector and proposed regulatory standards for tank cars heighten the need for additional freight cars. Free cash flow will also increase as a result of an expected decrease in costs associated with the company's Stock Appreciation Rights Plan, as the intrinsic value of these rights is likely to decrease with fewer rights outstanding and a higher weighted average grant price. The Ba3 ratings for Amsted's existing $600 million senior unsecured notes due 2022 and the new $250 million senior unsecured notes due 2024 are one notch below the CFR of Ba2. This is due to a substantial amount of higher priority senior secured debt obligations represented by the $400 million revolving credit facility and the $97.5 million senior secured term loan in the company's Loss Given Default ("LGD") analysis. The stable ratings outlook reflects Moody's expectation of near- term strengthening of end-market demand for rail freight cars as well as heavy duty trucks. In addition, Debt to EBITDA is expected to be at around 2.0 times, despite the increase in ESOP redemptions. As leverage remains strong relative to the Ba2 rating, leverage is not a key driver of a higher rating consideration. Instead, a better balance between Amsted's ESOP repurchase obligations and the company's free cash flow generation would be a key factor for a potential upgrade. Ratings could be lowered if ESOP obligations rise to a level that results in a significant increase in debt or draw on the company's liquidity sources, particularly at a time when business conditions were to deteriorate unexpectedly. Debt to EBITDA of over 3.0 times or Retained Cash Flow to Debt of less than 30% could also warrant a lower rating consideration. Affirmations: Issuer: Amsted Industries Incorporated Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Unsecured Regular Bond/Debenture, Affirmed Ba3, LGD4 Assignments: Issuer: Amsted Industries Incorporated Senior Unsecured Regular Bond/Debenture, Assigned Ba3, LGD4 Outlook Actions: Issuer: Amsted Industries Incorporated Outlook, Remains Stable The principal methodology used in this rating was Global Manufacturing Companies published in July 2014. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Amsted Industries Incorporated, headquartered in Chicago, Illinois, is a diversified manufacturer of highly engineered components used in the railroad, vehicular, construction and industrial sectors. The company is 100% owned by its Employees' Stock Ownership Plan. AMSTED INDUSTRIES: S&P Rates Proposed $250MM Unsec. Notes 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue rating to Chicago, Ill.-based engineered industrial components manufacturer Amsted Industries Inc.'s proposed $250 million senior unsecured notes. The '4' recovery rating indicates S&P's expectation for an average recovery (30%-50%) in the event of a default. Amsted intends to use the proceeds from the notes for general corporate purposes, including share redemptions under the Employees' Stock Ownership Plan (ESOP). The 'BB' corporate credit rating and stable rating outlook on Amsted remain unchanged. S&P assess the company's business risk as "fair," primarily reflecting its strong technical capabilities and long-standing customer relationships, which should allow it to maintain its good market position. However, Amsted operates in cyclical railcar and vehicular products end markets, where demand can be highly volatile. S&P expects the company to maintain good operating performance during the next 12-18 months, reflecting favorable demand conditions for railcars and heavy duty trucks. Pro forma for the debt issuance, S&P expects leverage of about 2x and funds from operations (FFO) to debt of about 40% at year-end 2014. S&P believes leverage could increase gradually as the company uses cash on the balance sheet for share repurchases, but S&P do not expect debt to EBITDA and FFO to debt to exceed 3x and 30%, respectively, over the next 12-18 months. S&P assess Amsted's financial risk profile as "significant" and expect the company to maintain "adequate" liquidity. RATINGS LIST Amsted Industries Inc. Corporate Credit Rating BB/Stable/-- Ratings List $250 million senior unsecured notes BB Recovery Rating 4 ANTERO RESOURCES: Moody's Rates New $400MM Add-on Notes 'B1' ------------------------------------------------------------ Moody's Investors Service assigned a B1 rating to Antero Resources Corporation's (Antero) proposed $400 million add-on to its senior unsecured notes due 2022. Net proceeds from the notes will be used initially to repay a portion of the borrowings under the company's senior secured revolving credit facility, but ultimately to fund its aggressive investment program in the Marcellus and Utica unconventional shale plays. The rating outlook is stable. "This transaction enhances Antero's liquidity by terming out revolver borrowings," stated Stuart Miller, Moody's Vice President -- Senior Credit Officer. "But the company's significant out- spending of cash flow and high degree of reliance on the capital markets to finance its business plan remain important rating considerations. The ability to monetize its midstream investments later this year has become an important factor to enable Antero to keep leverage at acceptable levels for its current rating." Ratings Rationale The B1 rating on Antero's senior unsecured notes is one notch lower than the Ba3 Corporate Family Rating (CFR) reflecting the prior claim of the senior secured revolving credit lenders. Net proceeds from the $400 million add-on note offering will be used to repay a portion of the $2.5 billion revolving credit that had $1.2 billion outstanding as of June 30, 2014. The size of the revolving credit's senior secured claims relative to the total amount of the company's unsecured notes results in the unsecured notes being notched below the Ba3 CFR under Moody's Loss Given Default Methodology. Antero's Ba3 CFR reflects its scale and ability to grow production and reserves. Average daily production in the second quarter of 2014 was 148,400 barrels of oil equivalent (Boe), up sharply from 2013's average of 87,000 Boe per day. Roughly 85% of the company's production is natural gas contributing to weak net cash margins. To drive future growth in its core properties in the Marcellus and Utica Shale plays, the company recently raised its 2014 capital budget by $850 million to $3.7 billion. Moody's believes this increase could result in negative free cash flow of about $3 billion over the next 18 months. The prospect for this level of negative free cash flow, along with the natural gas-weighted production profile, restrains Antero's rating. The SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity. Pro forma for the $400 million add-on offering, Antero will have access to about $1.1 billion under its bank revolving credit facility after considering issued letters of credit. With the projected outspend of approximately $3 billion over the next 12-18 months, the company is highly reliant on its revolving credit facility and additional sources of capital. The revolving credit facility matures in May 2019. It requires that Antero maintain a minimum current ratio of 1.0x and a minimum interest coverage ratio of 2.5x. Moody's expect Antero to remain in compliance with these covenant ratios. The company's $2.5 billion revolving credit has a borrowing base of $3 billion, implying there is additional liquidity availablity. Antero's plan for an IPO of its midstream business through the formation of a master limited partnership (MLP) provides another funding option to help finance a portion of the projected negative free cash flow. The stable outlook reflects our expectation that while Antero's debt balance increases, reserve additions and increased production will keep pace with the increase in borrowings. Leverage at the end of the second quarter of 2014 increased to levels targeted for consideration for a downgrade. Debt to average daily production totaled $27,000 per Boe and debt to proved developed reserves was $10 per Boe. However, with the successful completion of the midstream MLP, the company should be able to bring leverage back down to around $22,000 and $8, respectively, assuming $500 to $750 million in equity proceeds gets applied to revolver outstandings. An upgrade could be considered if debt to average daily production is sustained below $20,000 per Boe and debt to proved developed reserves is sustained below $8.00 per Boe. An upgrade would also be contingent on Antero achieving and maintaining unleveraged cash margins greater than $25. per Boe and retained cash flow to debt over 40%. Conversely, a downgrade is possible if debt to average daily production exceeds $27,000 per Boe and debt to proved developed reserves exceeds $10.5 per Boe, both on a sustained basis. The principal methodology used in this rating was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada, and EMEA published in June 2009. Antero Resources Corp. is headquartered in Denver, Colorado and is engaged in the exploration and production of oil, natural gas liquids and natural gas. ANTERO RESOURCES: S&P Raises CCR to 'BB' on Production Increase --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Denver-based Antero Resources Corp. to 'BB' from 'BB-'. The outlook is stable. At the same time, S&P raised its senior unsecured rating on the company to 'BB' from 'BB-'. The recovery rating remains '4', indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default. "The stable outlook reflects our expectation that the company will continue to increase production and reserves while maintaining FFO to debt of greater than 25%," said Standard & Poor's credit analyst Stephen Scovotti. S&P could lower the ratings if Antero's cash flow expectation weakened below its current expectations, such that FFO to debt fell below 20% with no near-term remedy. Given S&P's current forecast for Antero, it considers such a decline unlikely in the near term. A lower rating could also be considered if a more aggressive financial policy was pursued that resulted in a deterioration in credit measures. S&P could raise the ratings due to its assessment of an improvement in the company's financial profile. An improvement in the financial profile would include maintaining FFO to debt of greater than 45% and narrowing the amount that the company outspends its cash flows by. ARRAYIT CORP: Incurs $446K Net Loss in Second Quarter ----------------------------------------------------- Arrayit Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $446,000 on $1.95 million of total revenues for the three months ended June 30, 2014, compared with a net loss of $72,789 on $602,672 of total revenues for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.23 million in total assets, $6.94 million in total liabilities, and a stockholders' deficit of $5.72 million. The Company has large working capital deficits and accumulated deficits. At June 30, 2014, Arrayit had a working capital deficit of $6.01 million, and an accumulated deficit of $25.11 million. The Company currently devotes a significant amount of its resources on developing clinical protein biomarker diagnostic products and services, and it does not expect to generate substantial revenue until certain diagnostic tests are cleared by the United States Food and Drug Administration and commercialized. Management believes that current available resources will not be sufficient to fund the Company's planned expenditures, including past due payroll tax payments, as well as estimated penalties and interest, over the next 12 months. The Company's ability to continue to meet its obligations and to achieve its business objectives is dependent upon, among other things, raising additional capital or generating sufficient revenue in excess of costs. At such time as the Company requires additional funding, the Company will seek to raise such additional funding from various possible sources, including its parent company, the public equity market, private financings, sales of assets, collaborative arrangements and debt. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain technologies or products that it might otherwise seek to retain. There can be no assurance that the Company will be able to raise additional funds, or raise them on acceptable terms. If the Company is unable to obtain financing on acceptable terms, it may be unable to execute its business plan, the Company could be required to delay or reduce the scope of its operations, and the Company may not be able to pay off its obligations, if and when they come due. These factors create substantial doubt about Arrayit's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/4YnJMI About Arrayit Corp. Arrayit Corporation develops, manufactures and markets next- generation life science tools and integrated systems for the large scale analysis of genetic variation, biological function and diagnostics. The Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping, gene expression and protein analysis markets, and the Company expects to enter the market for molecular diagnostics. Arrayit was formed on the merger of Integrated Media Holdings, Inc. with TeleChem International, Inc., and its major shareholders, Endavo Media and Communications, Inc., and TCI Acquisition Corp. in February 2008. AS SEEN ON TV: Extends Warrants Expiration to Sept. 30 ------------------------------------------------------ As Seen On TV, Inc., extended by one month the expiration dates of warrants to purchase up to an aggregate of 9,954,939 shares of Common Stock with an exercise price of $0.64 per share. As a result of the extension, the expiration date of the Warrants has been changed to Sept. 30, 2014, from Aug. 29, 2014. The Warrants were originally issued by the Company on Aug. 29, 2011, to six purchasers of the Company's securities under a Securities Purchase Agreement and a registered broker dealer that acted as placement agent for the Offering. About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. It identifies, develops, and markets consumer products. As reported by the TCR on Nov. 6, 2012, As Seen On TV entered into an Agreement and Plan of Merger with eDiets Acquisition Company ("Merger Sub"), eDiets.com, Inc., and certain other individuals. Pursuant to the Merger Agreement, Merger Sub will merge with and into eDiets.com, and eDiets.com will continue as the surviving corporation and a wholly-owned subsidiary of the Company. The Merger Agreement was completed on April 2, 2014. The Company incurred a net loss of $9.32 million on $1.98 million of revenues for the year ended March 31, 2014, as compared with net income of $3.69 million on $9.40 million of revenues for the year ended March 31, 2013. The Company's balance sheet at March 31, 2014, showed $5.78 million in total assets, $3.58 million in total liabilities and $2.20 million in total stockholders' equity. EisnerAmper LLP, in Iselin, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. The independent auditors noted that the Company's recurring losses from operations and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company stated the following in the fiscal 2014 Annual Report, "At March 31, 2014, we had a cash balance of $5,400, a working capital deficit of approximately $2.9 million and an accumulated deficit of approximately $22.9 million. We have experienced losses from operations since our inception, and we have relied on a series of private placements and convertible debentures to fund our operations. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable." Pursuant to a Senior Note Purchase Agreement dated as of April 3, 2014, by and among the Company, IBI, Infusion, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC -- Credit Parties -- and MIG7 Infusion, LLC, the Credit Parties sold to MIG7 a senior secured note having a principal amount of $10,180,000 bearing interest at 14% and having a maturity date of April 3, 2015. The Company added, "We have undertaken, and will continue to implement, various measures to address our financial condition, including: * Significantly curtailing costs and consolidating operations, where feasible. * Seeking debt, equity and other forms of financing, including funding through strategic partnerships. * Reducing operations to conserve cash. * Deferring certain marketing activities. * Investigating and pursuing transactions with third parties, including strategic transactions and relationships. There can be no assurance that we will be able to secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations and/or seek relief through a filing under the U.S. Bankruptcy Code." AS SEEN ON TV: Has Defaulted on Two Notes ----------------------------------------- Lisa Allen, writing for The Deal, reported that direct marketer As Seen On TV Inc., has a forbearance agreement with unnamed lenders who agreed on March 7 to forbear for up to one year, as long as the company complies with the terms of the agreement. According to the report, under the marketer's merger with Infusion Brands International Inc., As Seen On TV agreed to assume all of Infusion's debt, principally an $11 million senior secured debenture due June 30, 2016, bearing interest at a rate that ramps up to 12% over time from a starting point of 6%. The other sizable piece in the company's debt structure is a $10.18 million senior secured note due April 3, 2015, with the option for a 180- day extension, which bears interest at 14%, the Deal related. About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. It identifies, develops, and markets consumer products. As reported by the TCR on Nov. 6, 2012, As Seen On TV entered into an Agreement and Plan of Merger with eDiets Acquisition Company ("Merger Sub"), eDiets.com, Inc., and certain other individuals. Pursuant to the Merger Agreement, Merger Sub will merge with and into eDiets.com, and eDiets.com will continue as the surviving corporation and a wholly-owned subsidiary of the Company. The Merger Agreement was completed on April 2, 2014. The Company incurred a net loss of $9.32 million on $1.98 million of revenues for the year ended March 31, 2014, as compared with net income of $3.69 million on $9.40 million of revenues for the year ended March 31, 2013. The Company's balance sheet at March 31, 2014, showed $5.78 million in total assets, $3.58 million in total liabilities and $2.20 million in total stockholders' equity. EisnerAmper LLP, in Iselin, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. The independent auditors noted that the Company's recurring losses from operations and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company stated in the Fiscal 2014 Annual Report, "At March 31, 2014, we had a cash balance of $5,400, a working capital deficit of approximately $2.9 million and an accumulated deficit of approximately $22.9 million. We have experienced losses from operations since our inception, and we have relied on a series of private placements and convertible debentures to fund our operations. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable." Pursuant to a Senior Note Purchase Agreement dated as of April 3, 2014, by and among the Company, IBI, Infusion, eDiets.com, Inc., Tru Hair, Inc., TV Goods Holding Corporation, Ronco Funding LLC -- Credit Parties -- and MIG7 Infusion, LLC, the Credit Parties sold to MIG7 a senior secured note having a principal amount of $10,180,000 bearing interest at 14% and having a maturity date of April 3, 2015. The Company added, "We have undertaken, and will continue to implement, various measures to address our financial condition, including: * Significantly curtailing costs and consolidating operations, where feasible. * Seeking debt, equity and other forms of financing, including funding through strategic partnerships. * Reducing operations to conserve cash. * Deferring certain marketing activities. * Investigating and pursuing transactions with third parties, including strategic transactions and relationships. There can be no assurance that we will be able to secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations and/or seek relief through a filing under the U.S. Bankruptcy Code." ASPEN GROUP: Obtains $3.7 Million From Securities Sale ------------------------------------------------------ Aspen Group, Inc., raised $3,766,325 from the sale of 24,298,877 shares of common stock and 12,149,439 five-year warrants exercisable at $0.19 per share in a private placement offering to 15 accredited investors. This is in addition to the $1,631,500 raised in July 2014. In connection with the offering, Aspen agreed to register the shares of common stock and the shares of common stock underlying the warrants. On Sept. 4, 2014, Aspen used part of the proceeds to fully prepay principal and interest owed under its outstanding debenture held by Hillair Capital Investments L.P. Aspen paid Hillair $2,310,000 after entering into an agreement whereby Hillair agreed to the prepayment and agreed to limit the future sale of shares of common stock upon exercise of its warrants or otherwise. Aspen intends to use the balance of the net proceeds for working capital, development of curriculum on its academic learning system, and expansion of sales and marketing. About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88 percent of the Company's degree-seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company reported a net loss of $6.01 million on $2.68 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.13 million on $2.34 million of revenues during the prior year. As of Jan. 31, 2014, the Company had $3.67 million in total assets, $5.29 million in total liabiities and a $1.62 million total stockholders' deficit. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the transition period ending April 30, 2013. The independent auditors noted that the Company has a net loss allocable to common stockholders and net cash used in operating activities for the four months ended April 30, 2013, of $1,402,982 and $918,941, respectively, and has an accumulated deficit of $12,740,086 at April 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. ATP OIL: Trustee Sues Insurer For Deepwater Horizon Defense ----------------------------------------------------------- Law360 reported that the Chapter 7 Trustee for defunct ATP Oil & Gas Corp. filed an adversary suit in Texas federal court against Water Quality Insurance Syndicate, seeking defense and indemnity for a suit launched by the United States against ATP after the 2010 Deepwater Horizon oil spill. According to the report, trustee Rodney Tow says that Water Quality is obligated to defend ATP under a policy it issued to the Houston-based developer in 2011 but that the insurance company has refused to do so. About ATP Oil Houston, Texas-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A seven-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. AZIZ CONVENIENCE: Commences Adversary Case to Stop Foreclosure -------------------------------------------------------------- Aziz Convenience Stores, L.L.C., commenced an adversary proceeding against Greenwich Investors XLV Trust 2013-1 in the U.S. Bankruptcy Court for the Southern District of Texas seeking declaratory and injunctive relief. The Court Clerk assigned Case No. 14-70427 to the proceeding. The Debtor seeks adjudication that it has equitable title in the disputed real property and is the owner of the Property. Dagoberto G. Trevino, the founder, manager and president of the Debtor, bought in his name the Property -- a parcel of approximately 205.88 acres of land located in Hidalgo County. He is indebted to Greenwich under three promissory notes -- Real Property Promissory Note in the principal amount of $2,004,580 dated August 1, 2000; Real Property Promissory Note in the principal amount of $2,635,420 dated December 4, 2007; and Promissory Note in the principal amount of $100,000 dated January 23, 2009. The Debtor is a guarantor on the Notes and the Debtor's funds have been used to make payments on the Notes such that the Debtor has an interest in the Property, the Debtor has argued. The Notes matured on December 1, 2013. As of May 20, 2014, the collective amount due on the Notes was $3,746,365, including legal fees and expenses. Greenwich sought to foreclose on the Property, and the Debtor asked the Court to stop it. In response, Greenwich argued that it and non-debtor Mr. Trevino have independent contractual relationship which, on its own, is not sufficient to warrant the Court imposing a stay of the foreclosure in this bankruptcy. In this complaint, the Debtor claims ownership of the Property and argues that it is entitled to lawful possession of the Property. Matthew S. Okin, Esq., at Okin & Adams LLP, in Houston, Texas -- mokin@okinadams.com -- contends that the Defendants have unlawfully infringed upon and dispossessed the Debtor of the Property, and currently withhold from the Debtor possession of the Property. He notes that Greenwich claims to be owed nearly $3.8 million on the Notes; the Debtor, however, believes the Property is worth in excess of $14 million. He insists that the value of the Property in excess of the debt to Greenwich can be used by the Debtor in its reorganization. About Aziz Convenience Aziz Convenience Stores, L.L.C., owner of convenience stores with gas pumps in Texas, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 14-70427) in its hometown in McAllen, Texas, on Aug. 4, 2014, without stating a reason. The Debtor owns properties in Mission, San Juan, Pharr, McAllen, Sullivan City, Edinburg, La Joya, Donna, Alamo, Alton, Edinburg, all in Texas. It appears that none of the Debtor's convenience stores are on leased property as the schedule of unexpired leases only shows the contract with Valero LP. The Debtor is represented by William A Csabi, Esq., from Harlingen, Texas. For his legal services, Mr. Csabi agreed to accept $65,000 from the Debtor, with the $12,500 already paid prepetition. AZIZ CONVENIENCE: Interim Cash Collateral Hearing on Sept. 17 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas approves the stipulation and third interim order authorizing Aziz Convenience Stores, LLC's use of cash collateral and providing adequate protection to PlainsCapital Bank. The parties agree that PlainsCapital has first-priority liens in the Debtor's assets to secure payment of about $27.5 million in debt and obligations. The parties further agree to approve the limited use of cash collateral to pay these projected cash disbursements to vendors from August 22 through September 17, 2014: (a) payroll up to $102,052; and (b) payment to Valero of up to $162,365 for purchases on August 9, 2014, and up to $211,621 for purchases on August 10, 2014. As adequate protection for the use of cash collateral, PlainsCapital is granted valid and automatically perfected first- priority replacement liens and security interests in all of Aziz's assets. Aziz will keep insurance coverage on all collateral securing debts owed to PlainsCapital. If the adequate protection to PlainsCapital is insufficient, PlainsCapital will be entitled to administrative expense with priority over all administrative expenses and all other protections allowable under Section 507(b) of the Bankruptcy Code in an amount equal to the cash collateral used by the Debtor. The interim hearing on the matter will be held on September 17, 2014, at 9:00 a.m. (CDT). About Aziz Convenience Aziz Convenience Stores, L.L.C., owner of convenience stores with gas pumps in Texas, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 14-70427) in its hometown in McAllen, Texas, on Aug. 4, 2014, without stating a reason. The Debtor owns properties in Mission, San Juan, Pharr, McAllen, Sullivan City, Edinburg, La Joya, Donna, Alamo, Alton, Edinburg, all in Texas. It appears that none of the Debtor's convenience stores are on leased property as the schedule of unexpired leases only shows the contract with Valero LP. The Debtor is represented by William A Csabi, Esq., from Harlingen, Texas. For his legal services, Mr. Csabi agreed to accept $65,000 from the Debtor, with the $12,500 already paid prepetition. AZIZ CONVENIENCE: Wants to Stop Foreclosure on Hidalgo Property --------------------------------------------------------------- Aziz Convenience Stores, L.L.C., asks the U.S. Bankruptcy Court for the Southern District of Texas to determine that the automatic stay pursuant to Section 362 of the U.S. Bankruptcy Code applies to the attempt to foreclose by a noteholder, Greenwich Investors XLV Trust 2013-1, on certain real property owned in the name of Dagoberto G. Trevino. In the alternative, the Debtor requests an injunction preventing Greenwich from foreclosing on the Property. Mr. Trevino is the founder of the Debtor. He bought in his name the Property -- a parcel of approximately 205.88 acres of land located in Hidalgo County. Trevino arranged for the Debtor to guarantee notes regarding the Property in the original principal amounts of $2,004,580 and $100,000. Greenwich currently holds the Notes and has provided notice of a foreclosure sale regarding the Property that was scheduled to occur on September 2, 2014. Matthew S. Okin, Esq., at Okin & Adams LLP, in Houston, Texas -- mokin@okinadams.com -- tells the Court that not only is the Debtor a guarantor on the Notes, but the Debtor's funds have been used to make payments on the Notes such that the Debtor has an interest in the Property. As a result, he says, some or all of the Property is an asset of the bankruptcy estate. He informs the Court that the Debtor's newly appointed chief restructuring officer currently is investigating this issue. Greenwich Reacts Greenwich objects to the Debtor's motion and informs the Court that Mr. Trevino is indebted to Greenwich under three promissory notes -- Real Property Promissory Note in the principal amount of $2,004,580 dated August 1, 2000; Real Property Promissory Note in the principal amount of $2,635,420 dated December 4, 2007; and Promissory Note in the principal amount of $100,000 dated January 23, 2009. The Notes matured on December 1, 2013. As of May 20, 2014, the collective amount due on the Notes was $3,746,365, including legal fees and expenses. Jeffrey A. Peterson, Esq., at Gray, Plant, Mooty, Mooty & Bennett, P.A., in St. Cloud, Minnesota -- Jeffrey.Peterson@gpmlaw.com -- contends that Greenwich and non-debtor Mr. Trevino have independent contractual relationship which, on its own, is not sufficient to warrant the Court imposing a stay of the foreclosure in this bankruptcy. He adds that the Court should not extend the stay beyond the A.H. Robins Co. line of cases (citing A.H. Robins Co. v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986)) to impose a stay on the foreclosure of property pledged by a non-debtor. About Aziz Convenience Aziz Convenience Stores, L.L.C., owner of convenience stores with gas pumps in Texas, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 14-70427) in its hometown in McAllen, Texas, on Aug. 4, 2014, without stating a reason. The Debtor owns properties in Mission, San Juan, Pharr, McAllen, Sullivan City, Edinburg, La Joya, Donna, Alamo, Alton, Edinburg, all in Texas. It appears that none of the Debtor's convenience stores are on leased property as the schedule of unexpired leases only shows the contract with Valero LP. The Debtor is represented by William A Csabi, Esq., from Harlingen, Texas. For his legal services, Mr. Csabi agreed to accept $65,000 from the Debtor, with the $12,500 already paid prepetition. BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed the ratings for Beazer Homes USA, Inc. (NYSE: BZH), including the company's Issuer Default Rating (IDR) at 'B-'. The Rating Outlook is Stable. Key Rating Drivers The rating and Outlook for BZH is based on the company's execution of its business model in the current moderately recovering housing environment, its land policies, and geographic diversity. The company's rating and Outlook is also supported by its solid liquidity position. The Stable Outlook also takes into account the improving housing outlook for 2014 and 2015. Risk factors include the cyclical nature of the homebuilding industry, the company's high debt load and high leverage, BZH's underperformance relative to its peers in certain operational and financial categories, and its current over-exposure to the credit- challenged entry level market (an estimated 60% of BZH's customers are first-time home buyers). The Industry Comparisons were challenging through first-half of calendar 2014, and so far this year most housing metrics seem to have defied expectations and fallen somewhat from a year ago. Though the severe winter throughout much of North America restrained some housing activity, nonetheless, there was an absence of underlying consumer momentum this spring, perhaps due to buyer sensitivity to home prices and finance rates and the slowing of job growth at year end. But demographics, attractive affordability/housing valuations, and a slow, steady easing in credit standards should sustain and ultimately accelerate the upturn. To reflect the subpar spring selling season, as well as the more guarded expectation for the next few months, Fitch recently tapered its macro housing forecast. Single-family starts are now projected to improve 9.5% to 677,000 (down from Fitch's previous forecast of a 15% improvement) and multifamily volume grows almost 12% to 343,000. Total starts this year should still slightly exceed 1 million. New home sales are forecast to advance about 8% to 465,000 (down from Fitch's prior forecast of 500,000), while existing home sales volume is expected to decline 5% to 4.835 million (down from Fitch's earlier estimate of 5.1 million), largely due to fewer distressed homes for sale. New home price inflation should moderate in 2014, at least partially because of higher interest rates. Average and median new home prices should rise about 3.5% in 2014. Housing activity is likely to ratchet up more sharply in 2015 with the support of a steadily growing economy throughout the year. The unemployment rate should continue to move lower (5.8% in 2015). Credit standards should steadily, moderately ease throughout next year. Demographics should be more of a positive catalyst. More of those younger adults who have been living at home should find jobs and these 25-35-year-olds should provide some incremental elevation to the rental and starter home markets. Single-family starts are forecast to rise 21% to 819,000 as multifamily volume expands about 6.5% to 366,000. Total starts would be approaching 1.2 million. New home sales are projected to increase 20.4% to 560,000. Existing home volume is expected to approximate 5.075 million, up 5%. New home price inflation should further taper off with higher interest rates and the mix of sales shifting more to first time homebuyer product. Average and median home prices should increase 2.5-3%. Challenges remain including the potential for higher interest rates and restrictive credit qualification standards. Improving Financial Results BZH's homebuilding revenues for the first nine months of its 2014 fiscal year (ending June 30, 2014) increased 7.9% to $909.2 million as closings fell 4.2% while the average sales price advanced 12.6% to $279,300 during the period. Land sales totaled $8.6 million during 2014 YTD period compared with $6.2 million last year. The homebuilding gross profit margins (excluding inventory impairments and lot option abandonments) also showed strong improvement, growing 350 bps to 19.5% during the YTD 2014 period compared with a 16% margin during the same period last year. SG&A as a percentage of sales increased to 14.6% during the nine-month period in 2014, up from 14.1% last year. Despite the strong results for the first nine months of the year, BZH reported a pre- tax loss of $27.1 million during the period, which included a $19.9 million loss on extinguishment of debt related to the company's debt refinancing this year. Fitch expects BZH will be unprofitable on a pre-tax basis during fiscal 2014 but should report pre-tax profits during fiscal 2015. High Debt Load And Leverage BZH had total debt of $1.5 billion at June 30, 2014. The company's credit metrics have been improving over the past two years but remain weak relative to its ratings. Leverage at the end of the June quarter was 13.8x compared with 17.4x at the end of fiscal 2013 and 53.5x at the end of fiscal 2012. EBITDA to interest coverage is also low at 0.9x for the LTM period ending June 30, 2014 compared with 0.8x in fiscal 2013 and 0.2x in fiscal 2012. Fitch expects these credit metrics will improve in the next 12 -15 months, although leverage is expected to remain weak at around 9x - 10x and interest coverage is projected to improve to approximately 1.25x - 1.50x during fiscal 2015. The improvement in credit metrics will be driven by EBITDA growth as Fitch does not expect any meaningful debt repayment in the short to intermediate term. Liquidity BZH currently has an adequate liquidity position, which allows the company to meet interest payments and land and development spending requirements. BZH ended the June 2014 quarter with $206.5 million of unrestricted cash and no borrowings under its $150 million revolving credit facility. Fitch expects BZH will maintain cash and revolver availability of at least $250 - $300 million in the near to intermediate term. Furthermore, the company has no major debt maturities until 2016, when $172.9 million of sr. notes become due. Land Strategy BZH maintains a 6-year supply of lots (based on last 12 months deliveries), 79.4% of which are owned, and the balance controlled through options. As is the case with other public homebuilders, the company is rebuilding its land position and trying to opportunistically acquire land at attractive prices. Total lots controlled increased 10.4% yoy and grew 1.5% compared with the previous quarter. The company has been aggressive in its land and development spending following the successful execution of its capital markets transactions in 2012. BZH spent roughly $475.2 million on land purchases and development activities during fiscal 2013 compared with $185.6 million expended during fiscal 2012. Through the first nine months of fiscal 2014 (ended June 30, 2014), BZH spent $381.5 million for land and development activities. For all of 2014, management expects land and development spending will total $520 - $560 million. As a result, Fitch expects BZH will be cash flow negative by about $225 million - $250 million this fiscal year. Fitch is comfortable with BZH's land strategy given the company's liquidity position, debt maturity schedule, proven access to the capital markets, and management's demonstrated discipline in pulling back on its land and development activities during periods of distress. Rating Sensitivities Future ratings and Outlooks will be influenced by broad housing market trends as well as company-specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new-order activity, debt levels, free cash flow trends and uses, and the company's cash position. BZH's ratings are constrained in the intermediate term due to weak credit metrics and high leverage. However, positive rating actions may be considered if the recovery in housing is maintained and is meaningfully better than Fitch's current outlook, BZH shows continuous improvement in credit metrics (particularly debt-to- EBITDA consistently below 8x and interest coverage above 2x), and the company preserves a healthy liquidity position. Negative rating actions could occur if the recovery in housing dissipates, resulting in BZH's revenues and operating losses approaching 2011 levels, and the company maintains an overly aggressive land and development spending program. This could lead to consistent and significant negative quarterly cash flow from operations and diminished liquidity position. In particular, Fitch will review BZH's ratings if the company's liquidity position (unrestricted cash plus revolver availability) falls below $200 million. Negative rating actions could also occur if the company's credit metrics do not improve much from current levels in a sustained housing recovery, including debt to EBITDA consistently remaining above 10x and interest coverage below 1x. Fitch affirms the following ratings for BZH: -- Long-term IDR at 'B-'; -- Secured revolver at 'BB-/RR1'; -- Second lien secured notes at 'BB-/RR1'; -- Senior unsecured notes at 'CCC+/RR5'; -- Junior subordinated debt at 'CCC/RR6'. The Rating Outlook is Stable. The Recovery Rating (RR) of 'RR1' on BZH's secured credit revolving credit facility and second-lien secured notes indicates outstanding recovery prospects for holders of these debt issues. The 'RR5' on BZH's senior unsecured notes indicates below-average recovery prospects for holders of these debt issues. BZH's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. The 'RR6' on the company's junior subordinated notes indicates poor recovery prospects for holders of these debt issues in a default scenario. Fitch applied a liquidation value analysis for these recovery ratings. BEST BUY: Fitch Hikes Issuer Default Rating to BB; Outlook Stable ----------------------------------------------------------------- Fitch Ratings has upgraded its long-term Issuer Default Rating (IDR) on Best Buy Co., Inc. to 'BB' from 'BB-'. The Rating Outlook is Stable. KEY RATING DRIVERS The upgrade reflects Fitch's expectation that management's investments in sharper pricing funded by cutting excess costs and changes to the revenue mix towards higher growth and higher margined products could stem losses both in the top line and EBITDA over the next 12-18 months. Fitch sees the potential for additional downside to the current EBITDA level of $2 billion, but it is likely to settle in the $1.7 billion to $2 billion range on domestic comparable store sales (comps) declines in the low single digits. This would enable Best Buy to generate $500 million to $700 million in free cash flow (FCF; post dividends) annually and keep leverage reasonable in the low 3.0x range. Defending Market Share: Best Buy has defended its market share against the onslaught of competitive pressures from e-tailers and discounters over the last three to four years, although at a significant cost to its bottom line. Best Buy's comps have been negative for the last four years and Fitch expects comps for the domestic business (which accounts for 85% of total revenue) to be modestly negative over the next 12-18 months. This assumes strong growth in online sales of 15% to 20% (which equates to +1.5% to 1.6% comp contribution) somewhat offsetting Fitch's expectation of a 3% decline at the store level. Pricing Investments Pressure Results: Best Buy has been investing heavily in sharper pricing to maintain share, given a majority of its product categories are in a secular decline. It will likely take another few quarters for volumes to increase enough to offset the lower price points. EBITDA declined 17% to $2 billion in 2013 but is expected to be relatively flat in 2014 given that cost reductions (Fitch expects SG&A dollars will decline by another $600 million in 2014) are essentially funding the price investments in the business. EBITDA Downside Appears More Limited: Should comps remain modestly negative and Best Buy choose to continue to fund price investments in 2015-2016 without significant offset from cost reductions, Fitch expects EBITDA may decline another 10%-15% to $1.7 billion to $1.8 billion. However, Best Buy's investments in sharper pricing funded by cutting excess costs -- and changing the revenue mix towards higher growth and typically higher margined categories such as mobile, small accessories, and appliances -- could start to pay off. This would provide support to EBITDA at the $2 billion level. As a result, adjusted leverage is expected to remain in the low 3.0x range. While Best Buy has dominant market shares in many categories, a majority of product categories in which Best Buy operates are in a secular decline. Fitch estimates that these categories -- mainly computing ex-tablets and mobile phones (estimated at 30%), entertainment (8% of current sales versus 12% in 2011), and CE (30% of current business versus 36% in 2011) -- will decline in the low single digits over the next three years, given the lack of new product introductions, price deflation, and shift towards digital products. The main growth areas are mobile, small accessories and appliances, which Fitch estimates account for about 20% of Best Buy's business. Fitch expects these categories in aggregate carry higher gross margins than the company average and expects these businesses in total to grow in the high single digits over the next two to three years. Management is making concerted efforts to reduce square footage dedicated to negative growth areas such as entertainment (physical media), and to shift mix towards the higher growth and more profitable categories, thereby driving revenue and gross profit per square foot. These initiatives are being supported by dedicating more space to strategic partners such as Samsung, Sony and Microsoft. Changing the product mix towards higher growth categories and driving higher volume through price investments could stabilize the business over the intermediate term. The company has also made strong progress in reducing its cost structure and realized $765 million in annualized cost reductions in 2013. It has targeted a total of $1 billion in annualized cost reductions, the majority of which is expected to be realized in 2014. Strong Liquidity Position: Best Buy generated FCF (after dividends) of $314 million in 2013, ending the year with $2.7 billion in cash and $223 million in short-term investments. The company has full availability on its $1.25 billion domestic credit facility, which was downsized from $2 billion in June 2014. The credit facility is jointly and severally guaranteed by certain operating subsidiaries including BBC Investment Co., BBC Property Co., and Best Buy Stores, L.P. on an unsecured basis. Fitch expects Best Buy to generate FCF (after dividends) in the $700 million range in 2014 (excluding any material working capital swings), ending the year with $3.6 billion in cash. FCF is expected to be in the $400 million-$500 million range in 2015-2016 if EBITDA declines to the $1.7 billion-$1.8 billion range. Best Buy has suspended its share repurchase program since first- quarter 2012 to preserve liquidity. The company still pays regular dividend which was recently increased to $0.19 per quarter per share (or an annualized dividend of about $270 million based on current diluted shares). The next maturity of unsecured notes is March 2016 which Fitch assumes Best Buy will pay down with cash on hand. RATING SENSITIVITIES Negative Rating Action: A downgrade could be caused individually or collectively by the following factors: worse-than-expected sales declines of negative 3% or more for the domestic business versus Fitch's negative low single-digit-range projections; material gross margin decline without any significant offset from cost savings, which would result in EBITDA declining below $1.5 billion and therefore adjusted leverage increasing to the high-3x to low-4x range. Positive Rating Action: Fitch would need to see stabilization in comps and modest growth in EBITDA on a sustained basis from the current level of $2 billion to consider a positive rating action. Fitch has upgraded its ratings on Best Buy as follows: -- Long-term IDR to 'BB' from 'BB-'; -- $1.25 billion bank credit facility to 'BB' from 'BB-'; and -- $1.50 billion senior unsecured notes to 'BB' from 'BB-'. The Rating Outlook is Stable. BIJAN NAVABIAN: Melville Brokers Sale of Life Insurance Policy -------------------------------------------------------------- Melville Capital, LLC, on Sept. 4 disclosed that it brokered the sale of a life insurance policy in a highly time sensitive and complicated matter where the policy was thought to have lapsed without value by the insurer. The life insurance policy at hand was fractionally owned by three brothers and a cousin. The three brothers eventually filed for voluntary chapter 7 protection in the Central District of California, creating three separate estates, each with a respective one-quarter interest in the life insurance asset (Bijan Navabian (Case No. 2:13-BK-20401-RK); Bahman Navabian (Case No. 2:13-BK-20405-TD); and Bahram Navabian (Case No. 2:13-BK-24630- TD)). This engagement was led by Doug Himmel, Melville Capital's Managing Director. According to Mr. Himmel, the policy had not actually lapsed -- but was in a "state of lapse" -- where substantial premium was required to keep the policy in-force. After being engaged by each of the respective Trustees, Melville marketed the policy and ultimately received an offer of $300,000 plus approximately $40,000 in back premiums due the insurance carrier. Mr. Himmel further commented that purchasers do not typically buy policies that are past due in premiums and coordinating four separate closings, three of which were bankruptcy court matters before two different judges, and the need for shortened notice, made this stand out as one of his more complicated cases. The sale order was entered just days before an actual policy lapse, which if it had occurred, would have rendered the policy worthless to the fractional owner estates. About Melville Capital Melville Capital -- http://melvillecapital.com/insolvency-- focuses on monetizing and liquidating existing life insurance policies. With offices in New York, Los Angeles and Scottsdale, Melville is the country's premier Life Settlement Broker practicing in the area of restructuring and insolvency. In insolvency matters, there is often substantial cash flow generated to individuals/companies in transition, policy owners, Turnaround and Bankruptcy advisors, and Trustees. Melville represents the policy owner, insured and referral source in negotiating and accepting bids from competing Institutional Investors and handles all aspects of the transaction. The net result is a lump sum cash settlement that is often much greater than the cash surrender value and relieves the policy owner of all future premium payments. Melville has served in the capacity of life settlement broker to a variety of individuals and entities, including in bankruptcy cases. For example, Melville has been retained in the following bankruptcy cases, among others: (i) In re Princeton Ski Shop, Inc. (Case No. 07-26206) (District of New Jersey) (retained by the Official Committee of Unsecured Creditors); (ii) In re Ronco Corporation, et al. (Jointly Administered under Case No. 1:07- 12000 GM) (Central District of California) (retained by the Chapter 7 Trustee); (iii) In re Thomas K. Helton Inc. d/b/a Home Lumber Company (Case No. 07-12671-JKC-11) (Southern District of Indiana) (retained by Liquidating Agent); (iv) In re Wilder, (Case No. 09-71141 (MPG)) (Central District of Illinois, Eastern Division) (retained by the Chapter 7 Trustee); (v) In re Bokavich, (Case No. 09-11106-WCH) (District of Massachusetts, Eastern Division) (retained by the Chapter 7 Trustee); and (vi) In re M. Fabrikant & Sons, Inc. and Fabrikant ? Leer International, Ltd., (Case No. 06-12737) (Southern District of New York) (retained by the Client); (vii) In re Life Fund 5.1, LLC ("A&O"), (Case No. 09- 32672) Northern District of Illinois, Eastern Division) (retained by the Trustee); (viii) In re SageCrest II LLC, et al. , (Case No. 08-50754) (District of Connecticut, Bridgeport Division) (retained by the Wind-Down and Workout Manager; (ix) In re Peregrine Financial Group, et al. (Case No. 1:12-cv-05383) (Northern District of Illinois) (retained by the Receiver). CAESARS ENTERTAINMENT: Bank Debt Due March 2017 Trades at 4% Off ---------------------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment Inc. is a borrower traded in the secondary market at 96.55 cents-on-the-dollar during the week ended Friday, September 5, 2014, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.31 percentage points from the previous week, The Journal relates. Caesars Entertainment Inc. pays 875 basis points above LIBOR to borrow under the facility. The bank loan matures on March 1, 2017, and carries Moody's Caa2 rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. CAESARS ENTERTAINMENT: September 2020 Bank Debt Trades at 3% Off ---------------------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment Inc. is a borrower traded in the secondary market at 97.69 cents-on-the-dollar during the week ended Friday, September 5, 2014, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.59 percentage points from the previous week, The Journal relates. Caesars Entertainment Inc. pays 600 basis points above LIBOR to borrow under the facility. The bank loan matures on Sept. 24, 2020, and carries Moody's B2 rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. CALIFORNIA RESOURCES: Moody's Assigns Ba1 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 Corporate Family Rating (CFR) to first time issuer California Resources Corporation (CRC). Moody's also assigned a Ba1 rating to its new $5 billion of senior unsecured notes, $2 billion unsecured revolving credit facility, and $1 billion senior unsecured term loan. A Speculative Grade Liquidity Rating of SGL-2 was assigned. The rating outlook is stable. CRC is a wholly-owned subsidiary of Occidental Petroleum Corporation (Occidental, A1 review for downgrade). Occidental has announced its intention to distribute at least 80.1% of CRC's common stock to Occidental's shareholders. Prior to the share distribution, CRC will use the proceeds of the new notes and term loan to pay a one-time dividend to Occidental. If the spinoff is delayed and does not occur by January 31, 2015, Occidental is required to redeem the CRC bonds at the issue price plus accrued interest. CRC is focused on conventional and unconventional reserve exploration and development in California. "CRC will have investment grade scale at the time of its separation from Occidental", said Stuart Miller, Moody's Vice President -- Senior Credit Officer. "However, the debt-funded $6 billion dividend to Occidental will push leverage to a level that is more typical of a single-B rated E&P company. The Ba1 assigned rating also considers management's limited operating experience as a stand-alone, public company, as well as the meaningful reserve revisions in two of the last three years." Rating Assignments - California Resources Corporation Corporate Family Rating (CFR): Ba1 Probability of Default Rating (PD): Ba1-PD Senior unsecured notes: Ba1, LGD4-50% Senior unsecured revolving credit facility: Ba1, LGD4-50% Senior unsecured term loan: Ba1, LGD4-50% Speculative Grade Liquidity Rating (SGL): SGL-2 Outlook: Stable Ratings Rationale CRC's Ba1 CFR reflects the company's investment grade scale offset by leverage metrics that are clearly not investment grade. With proved developed reserves of more than 500 million Boe and production over 150,000 Boe per day, CRC is similar in size to Continental Resources (Baa3 stable), Murphy Oil Corporation (Baa3 negative), and Pioneer Natural Resources Company (Baa3 stable). However, Moody's rating also takes into account the high leverage for CRC given the borrowings that will be used to fund a $6 billion dividend to Occidental. Moody's project that leverage, as measured by debt to average daily production, debt to proved developed reserves, and retained cash flow to debt will remain high through 2016 caused by relatively weak capital efficiency. Initially, debt to average daily production is projected to be nearly $40,000 per Boe while retained cash flow to debt is expected to be around 30% -- both are weaker than every other Ba1- rated E&P company. These leverage ratios were impacted by performance related reserve revisions in 2011 and 2012. To be conservative, Moody's has assumed a 10% downward reserve revisions in 2015 when Moody's expect CRC to retain an independent engineering consulting firm to audit its internal reserve estimates. Based on historical performance, Moody's have assumed leveraged cash margins of $30 to $35 per Boe and $25 per barrel finding and development costs. The resulting leveraged full-cycle ratio of less than 1.4x represents a relatively weak capital efficiency level and is comparable to Newfield Exploration (Ba1 stable) and Energen Corporation (Ba1 negative). Based on these assumptions, Moody's do not expect a rapid improvement in CRC's leverage metrics. As a new stand-alone organization, there are risks to operating with greater independence from Occidental, especially as a publicly traded entity. With operations exclusively in California, the company is uniquely exposed to a challenging regulatory environment. For all of these reasons, Moody's view CRC to be weakly positioned as a Ba1 rated entity despite its investment grade scale. The SGL-2 rating reflects good liquidity. Moody's expects that the company could modestly out-spend cashflow over the next 18 months. However, most of the outspend is discretionary in nature and the company's intent is to live within cash flow. CRC has a $2 billion senior unsecured revolving credit facility that will have limited borrowings initially. The credit facility has a springing lien if ratings fall to certain levels, but there is significant room for credit deterioration before security would be triggered. With an unsecured credit facility, CRC has the ability to sell non- strategic assets to generate significant amounts of secondary liquidity. The outlook is stable. To be considered for an upgrade, CRC would need to drastically reduce its leverage ratios and be committed to an investment grade rating. If debt to average daily production approaches $30,000 per Boe and retained cash flow to debt is over 50%, an upgrade could be considered. Alternatively, a downgrade could occur if production and reserve growth stalls and leverage increases from its already elevated levels. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. California Resources Corporation is a subsidiary of Occidental Petroleum Corporation. After the distribution of its shares to Occidental's shareholders, the company will be a publicly-traded independent E&P company operating exclusively in California. California Resources is headquartered in Los Angeles, CA. CANNABIS SCIENCE: Incurs $1.56-Mil. Net Loss in June 30 Quarter --------------------------------------------------------------- Cannabis Science, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.56 million on $nil of revenue for the three months ended June 30, 2014, compared with a net loss of $927,955 on $nil of revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.35 million in total assets, $4.27 million in total liabilities, and a stockholders' deficit of $2.92 million. The Company reported an accumulated deficit of $99.9 million at June 30, 2014. There is substantial doubt as to the Company's ability to continue as a going concern without a significant infusion of capital. At June 30, 2014, the Company had insufficient operating revenues and cash flow to meet its financial obligations. There can be no assurance that management will be successful in implementing its plans, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/kzfn3T Cannabis Science, Inc. develops, produces, and commercializes phytocannabinoid-based pharmaceutical products. It develops medicines to treat autism, blood pressure, cancer and cancer side effects, and other illnesses, including general health maintenance. The company is developing CS-TATI-1 for newly diagnosed and treatment-experienced patients with drug-resistant HIV strains; CS-S/BCC-1 for basal and squamous cell carcinomas; and a proprietary cannabis-based therapy for neurological conditions. In addition, it provides an online video-based medical cannabis education system comprising various courses, such as medical cannabis law, medical marijuana, cooking, horticulture, and bud tending. The company has a license agreement with Apothecary Genetics Investments LLC. to produce various brand formulations for California medical cannabis market. Cannabis Science, Inc. is based in Colorado Springs, Colorado. CASH STORE: Default Status Report Per National Policy 12-203 ------------------------------------------------------------ The Cash Store Financial Services Inc., on Sept. 2, 2014, provided a default status report in accordance with the alternative information guidelines in National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults. On May 16, 2014, the Company announced that it was not able to file an interim financial report and interim management's discussion and analysis for the period ended March 31, 2014, together with the related certifications of those interim filings by May 15, 2014, the deadline prescribed by securities legislation. Except as disclosed in previous press releases, there have been no material changes to the information contained in the Default Announcement or any other changes required to be disclosed by National Policy 12-203. The Company still intends to file the Continuous Disclosure Documents as soon as is commercially reasonable, or as required by the Ontario Superior Court of Justice (Commercial List) (the "Court") pursuant to the Cash Store Financial's Companies' Creditors Arrangement Act proceedings. The Monitor has filed with the Court periodic reports which have included Cash Store Financial's cash flow projections and other financial information concerning the Company. The Company anticipates that the Monitor will continue to file reports with the Court (and post them on its website), updating relevant financial information concerning the Company. The Monitor's reports, Court records and other details regarding the Company's CCAA proceedings are available on the Monitor's Web site at http://cfcanada.fticonsulting.com/cashstorefinancial/. About Cash Store Financial Cash Store Financial and Instaloans primarily act as lenders to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides private-label debit cards. Cash Store Financial is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial reported a net loss and comprehensive loss of C$35.53 million for the year ended Sept. 30, 2013, as compared with a net loss and comprehensive loss of C$43.52 million for the year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company had C$164.58 million in total assets, C$165.90 million in total liabilities and a C$1.32 million shareholders' deficit. CEQUEL COMMUNICATIONS: Moody's Keeps B1 CFR, Rates New Bonds B3 --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed $500 million senior unsecured bonds of Cequel Communications Holdings I, LLC (Cequel). The company plans to use proceeds, together with balance sheet cash, to fund a $600 million equity distribution. The B1 Corporate Family Rating, Ba2 secured bank debt rating, B3 senior unsecured bonds rating, and stable outlook are unchanged. Cequel Communications Holdings I, LLC Senior Unsecured Bonds, Assigned B3, LGD5 Ratings Rationale The proposed bond offering would increase leverage to approximately 6 times debt-to-EBITDA from 5.4 times (based on trailing twelve months through June 30 and per Moody's standard adjustments), at the high end of the range appropriate for the B1 CFR. However, Moody's believes EBITDA growth and modest debt reduction will facilitate a decline in leverage to the mid 5 times range over the next 18 months, in line with the company's track record. Cequel has not maintained leverage below the mid 5 times range over the past several years, and the rating incorporated expectations for sponsor distributions, acquisitions, or other growth investments. Furthermore, Moody's forecasts continued positive free cash flow of at least $200 million annually even with incremental interest expense related to the offering (estimated at about $25 million) and the planned infrastructure upgrade investment to enable faster internet speeds. Cequel's high leverage, approximately 6 times debt-to-EBITDA (pro forma for the proposed bonds add-on), creates risk for a company in a capital intensive, competitive industry, driving its B1 CFR. However, Moody's expects leverage to decline over the next year as EBITDA grows. Good liquidity, including expectations for positive free cash flow, also supports the rating. Notwithstanding the maturity of the core video product, the relative stability of the subscription business provides steady cash flow, and the high quality of Cequel's network positions it well to achieve growth in its residential and commercial businesses despite escalating competition. The company's penetration lags behind industry averages, but Moody's expects its high speed data and phone growth to continue to exceed most peers and views the planned infrastructure upgrade investment as a credit positive use of cash that will help Cequel maintain and grow market share. The private equity owners will likely seek growth opportunities, which could improve asset value, but potentially limit the application of free cash flow to debt reduction. Also, absent opportunities for investment or acquisition, sponsor distributions are likely and as such the ownership weighs negatively on the credit profile. Headquartered in St. Louis, Missouri, and doing business as Suddenlink Communications, Cequel Communications Holdings I, LLC serves approximately 1.4 million residential and 80 thousand commercial customers. The company provides digital TV, high-speed Internet and telephone services to consumers and businesses and generated revenues of approximately $2.3 billion for the twelve months ended June 30. BC Partners, CPP Investment Board and certain members of Cequel's executive management acquired Cequel from Goldman Sachs, Quadrangle, and Oaktree in November 2012. The principal methodology used in this rating was Global Pay Television - Cable and Direct-to-Home Satellite Operators published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CEQUEL COMMUNICATIONS: S&P Raises Secured Bank Debt Rating to 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the proposed upsizing of Cequel Communications Holdings I LLC's 5.125% senior notes due 2021 by $500 million to $1.25 billion does not affect the 'B-' issue-level rating or '6' recovery rating on the notes. The '6' recovery indicates S&P's expectation for negligible (0% to 10%) recovery in event of payment default. At the same time, S&P raised the issue-level rating on Cequel Communications LLC's approximately $2.9 billion of secured bank debt to 'BB' from 'BB-' and revised the recovery rating to '1' from '2', reflecting more favorable recovery prospects. The '1' recovery rating reflects S&P's expectation for very high (90% to 100%) recovery in the event of payment default. Cequel will use proceeds from $500 million of privately placed tack-on unsecured notes plus $100 million of cash to fund a $600 million cash distribution to its private equity owners. Pro forma for the transaction, S&P expects debt leverage to be in the 6x area, up only modestly from the current mid-5x area and consistent with a "highly leveraged" financial risk profile. As a result, the 'B+' corporate credit rating and stable outlook are not affected by the proposed debt increase. S&P's assessment of Cequel's business risk reflects good cable industry fundamentals, robust plant bandwidth, and only limited competition, compared with most cable peers, for high speed data services. KEY ANALYTICAL FACTORS FOR RECOVERY -- S&P has revised its recovery ratings on the secured credit facilities following a reassessment to S&P's projected emergence level EBITDA. -- S&P's simulated default scenario contemplates a default occurring in 2018, primarily a result of intense competition from direct-to-home satellite providers and incumbent telephone companies. -- S&P has valued the company on a going concern basis using a 7.0x multiple of its projected emergence EBITDA of $416 million. Simulated default and valuation assumptions ($US Mil.) -- Simulated year of default: 2018 -- EBITDA at emergence: 416 -- EBITDA multiple: 7x Simplified waterfall ($US Mil.) -- Net enterprise value (after 5% admin. costs): 2,768 -- Priority claims: 3 -- Collateral value available to secured creditors: 2,765 -- Secured first-lien debt: 2,910 -- Recovery expectations: 90% to 100% -- Senior unsecured debt and pari passu claims: 2,975 -- Recovery expectations: 0% to 10% Note: All debt amounts include six months of prepetition interest. RATINGS LIST Cequel Communications Holdings I LLC Corporate Credit Rating B+/Stable/-- Raised Ratings To From Cequel Communications LLC $2.5 bil term loan due 2019 BB BB- Recovery rating 1 2 $500 mil. revolver due 2017 BB BB- (Currently undrawn) Recovery rating 1 2 Ratings Affirmed Cequel Communications Holdings I LLC Cequel Capital Corp. $1.25 bil. 5.125% sr notes B- due 2021 Recovery rating 6 $1.5 bil. 6.375% sr notes due 2020 B- Recovery rating 6 $1.825 bil. 8.625% sr notes due 2017 B- Recovery rating 6 CHINA BAK: Net Working Capital Deficiency at $31.6MM at June 30 --------------------------------------------------------------- China BAK Battery, Inc., filed its quarterly report on Form 10-Q, disclosing a net profit of $37.11 million on $47.99 million of net revenues for the three months ended June 30, 2014, compared with a net loss of $10.27 million on $45.6 million of revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $13.97 million in total assets, $33.49 million in total liabilities, and a stockholders' deficit of $19.52 million. After the foreclosure of the pledged ownership of BAK International and as of June 30, 2014, the Company had cash and cash equivalents of $0.3 million. Its total current assets were $1.89 million and total current liabilities were $33.49 million, which results in a net working capital deficiency of $31.6 million. These factors raise substantial doubts about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/PPBhT9 China BAK Battery, Inc. manufactures lithium-based battery cells that are the principal component of rechargeable batteries for cellular phones and smartphones, mobile computers and e-book readers, and other portable consumer electronics. Based in Shenzhen, China, the Company's battery cells also power electric vehicles, cordless power tools and uninterruptible power supplies (UPS). CHIQUITA BRANDS: ISS Recommends Vote Against Inversion Plan ----------------------------------------------------------- David Gelles, writing for The New York Times' DealBook, reported that Chiquita Brands International?s plans to strike an inversion deal suffered another blow as two influential shareholder advisory services suggested that the company instead entertain an unexpected takeover offer from an unlikely pair of Brazilian buyers. According to the report, Institutional Shareholder Services, the proxy advisory group, recommended that Chiquita shareholders vote against the Fyffes deal at a planned meeting on Sept. 17, and support the joint bid of Cutrale Group and Safra Group as they call for Chiquita to engage in deal talks. That followed a similar recommendation from the other such group, Glass Lewis, the report related. As previously reported by The Troubled Company Reporter, Chiquita Brands and Fyffes have agreed to combine their company to achieve an additional $20 million in annual cost savings by 2016. Chiquita has rejected an unsolicited rival bid from Cutrale and Safra, which offered to pay $13 a share or $611 million for Chiquita. * * * The March 17, 2014 edition of The Troubled Company Reporter reported that Standard & Poor's Ratings Services revised its rating outlook on Chiquita Brands International Inc. to positive from stable. At the same time, S&P affirmed the 'B' corporate credit rating, 'B' senior secured debt rating, and 'CCC+' unsecured debt rating on the company. The TCR, on Jan. 30, 2014, reported that Moody's Investors Service changed the rating outlook for Chiquita Brands International Inc. to stable from negative while affirming all ratings of the company, including its B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR). Moody's also affirmed the company's SGL-3 liquidity rating. The change in the outlook to stable reflects Moody's expectation for continued improvement in Chiquita's credit metrics, which have recently benefitted from margin improvement largely as a result of cost saving initiatives. The Aug. 14, 2014, edition of the TCR reported that Moody's Investors Service views the proposed non-binding all cash bid from Cutrale Group and Safra Group to acquire Chiquita Brands International, Inc. favorably but it does not impact Chiquita's B2 CFR or developing outlook. CLEVELAND IMAGING: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Cleveland Imaging & Surgical Hospital, L.L.C. aka Doctors Diagnostic Hospital 1221 McKinney Street, Suite 2850 Houston, TX 77010 Case No.: 14-34974 Nature of Business: Health Care Chapter 11 Petition Date: September 4, 2014 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Hon. Jeff Bohm Debtor's Counsel: Christopher Adams, Esq. OKIN ADAMS & KILMER LLP 1113 Vine Street, Suite 201 Houston, TX 77002 Tel: 713-228-4100 Fax: 888-865-2118 Email: cadams@oakllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Douglas J. Brickley, receiver. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. CLUBCORP CLUB: S&P Affirms 'B+' Corp. Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on U.S.-based golf and business club operator ClubCorp Club Operations Inc. The outlook is stable. At the same time, S&P affirmed the 'B+' issue-level rating on ClubCorp Club Operations Inc.'s upsized approximately $850 million outstanding senior secured term loan due 2020 and $135 million revolver due 2018. The recovery rating on this debt remains '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. ClubCorp expects to use the proceeds from the proposed $250 million term loan add-on, along with cash on the balance sheet, to finance the purchase of a portfolio of 30 owned, three leased, and 17 managed golf and country clubs from Sequoia Golf. The purchase price of this portfolio is $265 million and S&P expects the transaction to close in the fourth quarter of this year. The recovery rating on the company's upsized debt remains unchanged primarily because of an increase to the company's default scenario enterprise valuation, reflecting the added value of the acquired assets and our expectation that this increase will be sufficient to partially offset the additional senior secured borrowings. The affirmation of the corporate credit rating reflects S&P's assessment of the debt-funded acquisition of Sequoia Golf's portfolio of 50 clubs as being in line with ClubCorp's growth strategy. S&P's 'B+' corporate credit rating on ClubCorp reflects its assessment of the company's financial risk profile as "highly leveraged" and S&P's assessment of the company's business risk profile as "satisfactory," according to its criteria. CONSOLIDATED COMMUNICATIONS: Moody's Rates $200MM Sr. Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed $200 million senior unsecured note offering of Consolidated Communications Finance II Co. and affirmed Consolidated Communications, Inc.'s ("Consolidated" or "the company") existing B1 Corporate Family Rating ("CFR") and B1-PD Probability of Default Rating ("PDR"). Consolidated intends to use the net proceeds from the offering to finance the cash consideration of the acquisition of Enventis Corporation ("Enventis"), to pay the fees and expenses in connection with the acquisition, to repay existing indebtedness of Enventis and to repay a portion of Consolidated's outstanding 10.875% senior notes due 2020 or its incremental term loan facility due 2020. The pending acquisition is anticipated to close in the fourth quarter of 2014 and supports Consolidated's strategic focus on broadband and commercial services, and enhances the company's long-term prospects. The combined company will also have improved opportunities for success-based expansion into new markets. Moody's expects the company to continue generating positive free cash flow because the transaction will be approximately neutral to free cash flow upon full integration. The outlook remains stable. Upon close of the acquisition, the new notes will be assumed by Consolidated Communications, Inc., and the ratings will be moved to that entity. Moody's has taken the following rating actions: Consolidated Communications, Inc. Corporate Family Rating, affirmed at B1 Probability of Default Rating, affirmed at B1-PD Speculative Grade Liquidity Rating, affirmed at SGL-2 Sr. Secured Term Loan B-4 due December 2020, affirmed at Ba3 (LGD3) $75M Sr. Secured Revolving Credit Facility due December 2018, affirmed at Ba3 (LGD3) Outlook, Stable Consolidated Communications Finance Co. (Assumed by Consolidated Communications, Inc.) $300M Senior Unsecured Notes due June 2020, affirmed at B3 (LGD5) Consolidated Communications Finance II Co. New Senior Unsecured Notes, Assigned B3 (LGD5) Ratings Rationale Consolidated's B1 CFR reflects its strong EBITDA margins in the mid 40% range (including dividends received from its wireless investments) and good cash flow (prior to dividend payments and capex spend). The company benefits from diversified operations as well as an advanced fiber network that has more stable revenue prospects. Enhanced VOIP, IPTV, and broadband services also offer the potential to sell double or triple play packages that could reduce churn rates and diversify its revenue stream away from traditional access lines. However, these services have lower margins and subject the company to potentially higher TV programming expenses compared to larger competitors, and expose Consolidated to potential new internet based TV offerings. The rating faces pressure from continued access line losses from its high margin legacy telecommunications segment, intense competition from cable, wireline, and wireless operators, and its aggressive financial policy of paying out free cash flow as dividends, which limits free cash flow available for future debt repayment. Also incorporated into the rating is the relatively high leverage of 4.6x (Moody's adjusted) as of 2Q 2014. However, the transaction should result in slightly improved leverage to 4.4x pro-forma for the acquisition of Enventis. The $200 million senior unsecured notes is rated B3 given its subordinated position in the capital structure with material amounts of senior secured debt ahead of the notes. Moody's continue to characterize Consolidated's liquidity as good, as reflected by its SGL-2 speculative grade liquidity rating. Meaningful internal liquidity sources, $62 million availability (as of 6/30/14) under its $75 million revolver, and the absence of near term maturities support the company's liquidity profile. However, high capex spend will weaken free cash flow levels as will the high dividend payout ratio which is anticipated to lead to minimal debt repayment in the near term. The stable outlook incorporates expectations for slight decreases in revenues (pro-forma) for the next few years, slightly positive free cash flow (after dividends and capex), a stable leverage profile, and EBITDA margins above 40%. Upward rating pressure could ensue if there was a deleveraging transaction followed by a greater commitment to debt reduction and an increase in revenue that reduced leverage below 3.25x (Moody's adjusted) on a sustained basis. Rapid erosion in EBITDA margins prompted by increased pressure on its core business line or a leveraging transaction that increased leverage above 5.25x (Moody's adjusted) would put downward pressure on the ratings. A likely covenant violation or a lack of liquidity could also trigger a downgrade. The principal methodology used in this rating was the Global Telecommunications Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Mankato, MN, Enventis operates a next-generation fiber network spanning 4,200 route miles that enables facilities-based operations in Minnesota and into Iowa, North Dakota, South Dakota and Wisconsin. Revenues for the last 12 months ended June 30, 2014 were about $187 million. Consolidated provides communications services, including local and long distance telephone, high-speed Internet access and television, to residential and business customers in Illinois, Texas, Pennsylvania, California, Kansas and Missouri. The company maintains headquarters in Mattoon, IL, and its LTM revenue is approximately $599 million as of June 30, 2014. CONSOLIDATED COMMUNICATIONS: S&P Rates New $200MM Unsec. Notes B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level rating and '6' recovery rating to Consolidated Communications Inc.'s proposed $200 million note issue due 2022. The company will use proceeds to repay about $134 million of debt at Enventis Corp., which parent Consolidated Communications Holdings Inc. will be acquiring in the fourth quarter, and to repay existing debt. The '6' recovery rating denotes negligible (0%-10%) recovery prospects in the event of a payment default. All existing ratings, including the 'B+' corporate credit rating on Consolidated Communications Holdings and the issue and recovery ratings on the debt held at its funding conduit, Consolidated Communications Inc., remain unchanged. The secured debt is rated 'BB-' with a '2' recovery rating, and the unsecured debt is rated 'B-' with a '6' recovery rating. Pro forma for the acquisition, Consolidated Communications Holdings' leverage will be about 4.3x, before operating synergies, down from 4.5x as of June 30, 2014. In S&P's view, the transaction modestly improves leverage and provides the company some geographic diversity by extending its operations to five new markets, with the potential to provide Enventis' operations with some scale benefits. However, the company's overall revenue mix will not change materially with the acquisition. As such, S&P believes the company, as an incumbent telephone provider, will continue to face competition from cable and wireless substitution for residential telephony customers, as well as competition from cable operators for commercial customers, especially small to midsize enterprises. S&P therefore has not altered its business risk view assessment. This, coupled with S&P's expectation that its leverage will remain above 4x on a pro forma basis over at least the first year of operations of the combined company, supports an "aggressive" financial risk profile assessment and underpins the 'B+' corporate credit rating. RATINGS LIST Ratings Unchanged Consolidated Communications Holdings Inc. Corporate Credit Rating B+/Stable/-- Consolidated Communications Inc. Senior Unsecured B- Recovery Rating 6 Senior Secured BB- Recovery Rating 2 New Rating Consolidated Communications Inc. Senior Unsecured $200 million note issue due 2022 B- Recovery Rating 6 CONSTAR INT'L: Creditors Eyeing Dechert's Role in Ch. 11 -------------------------------------------------------- Law360 reported that bottle maker Constar International Holdings LLC and its unsecured creditors want to tap a firm known for bankruptcy estate recovery to go after yet-unnamed defendants, potentially including its former counsel Dechert LLP, over allegations contained in a sealed report, according to court papers. According to the report, a joint request from the debtor and its unsecured creditors committee sought permission to employ Diamond McCarthy LLP, a firm popular among liquidating trustees and Chapter 11 administrators, as special litigation counsel to pursue accusations unearthed in a sealed investigative report. About Constar International Privately held Constar International Holdings and nine affiliated debtors (nka Capsule International Holdings, et al.) filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13281) on Dec. 19, 2013. Constar, which manufactures plastic containers, is represented by Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert, Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the Debtors' claims and noticing agent, and administrative advisor. Lincoln Partners Advisors LLC serves as the Debtors' financial advisor. Judge Christopher S. Sontchi oversees the 2013 case. This is Constar International's third bankruptcy. Constar first filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan and emerged from bankruptcy in May 2009. Constar and its affiliates returned to Chapter 11 protection (Bankr. D. Del. Case No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11 plan and emerged from bankruptcy in June 2011. The new petition listed assets worth less than $100 million against $123 million on three layers of secured debt. Attorneys at Brown Rudnick LLP represent the official committee of unsecured creditors. The Committee retained Alvarez & Marsal North America LLC as its financial advisor. Counsel to Wells Fargo Capital Finance, LLC, the revolving loan agent, is Andrew M. Kramer, Esq., at Otterbourg P.C. On Feb. 10, 2014, the Bankruptcy Court authorized Constar to sell certain assets to Plastipak Packaging, Inc., a global manufacturer of rigid plastic packaging. The Court determined that Plastipak's $102,450,000 offer for the Debtors' U.S. assets bested the offers from Amcor Rigid Plastics USA, Inc., and Envases Universales De Mexico S.A.P.I. De C.V. during a Feb. 6 auction. Separately, the Court authorized Constar to sell a facility in Havre de Grace, Maryland, to Smucker Natural Foods, Inc., for $3 million. There was no other bidder for the Maryland facility. The sole director of debtor Constar International U.K. Limited has appointed Daniel Francis Butters and Nicolas Guy Edwards of Deloitte LLP as administrators. The U.K. Administration Proceeding follows the closing of the sale of the U.K. assets to Sherburn Acquisition Limited. The Delaware Bankruptcy Judge authorized the U.S. Debtors to sell the U.K. Assets to Sherburn for GBP3,512,727, (or US$7,046,000), less the deposit in the sum of US$1,250,000. Secured lender Black Diamond Commercial Finance, LLC, as DIP note agent, and Wells Fargo Capital Finance, LLC, as DIP revolving agent and agent under the revolving loan facility, consented to the administration of Constar U.K. and the appointment of the Joint Administrators. In view of the asset sales in the U.S. and the U.K., the Debtors changed their corporate trade names -- and with the Bankruptcy Court's consent, their bankruptcy case caption -- to Capsule Group Holdings, Inc.; Capsule Intermediate Holdings, Inc.; Capsule Group, Inc.; Capsule International LLC; Capsule DE I, Inc.; Capsule DE II, Inc.; Capsule PA, Inc.; Capsule Foreign Holdings, Inc.; and Capsule International U.K. Limited (Foreign). COPYTELE INC: Changes Name to Itus Corp. to Reflect New Business ---------------------------------------------------------------- CopyTele, Inc., changed its name to "ITUS Corporation" on Sept. 2, 2014. The Name Change was accomplished pursuant to a Certificate of Amendment to the Company's Certificate of Incorporation, as amended, filed with the Secretary of State of Delaware on Aug. 28, 2014. The Name Change reflects the Company's change in its business operations. From inception through the end of the Company's 2012 fiscal year, the Company's primary operations involved licensing in connection with the development, manufacturing, and marketing of products based on the Company's patented display and encryption technologies only. "The Name Change better aligns the Company's corporate name with its current business and mission to develop, acquire, license and enforce of patented technologies that are either owned or controlled by the Company or one of its wholly owned subsidiaries," the Company said in a Form 8-K filed with the U.S. Securities and Exchange Commission. The Name Change was approved by the Company's Board of Directors on May 28, 2014, and was subsequently approved by the Company's stockholders at the Annual Meeting of Stockholders on Aug. 8, 2014. The Company's common stock continues to trade on the OTCQB marketplace under ITUS Corporation and the new stock symbol is "ITUS." About ITUS Corporation ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires patented technologies for the purposes of patent monetization and patent assertion. The company currently has 10 patent portfolios in the areas of Key Based Web Conferencing Encryption, Encrypted Cellular Communications, E-Paper(R) Electrophoretic Display, Nano Field Emission Display ("nFED"), Micro Electro Mechanical Systems Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window Frame Construction, VPN Multicast Communications, Internet Telephonic Gateway, and Enhanced Auction Technologies. CopyTele incurred a net loss of $10.08 million for the year ended Oct. 31, 2013, a net loss of $4.25 million for the year ended Oct. 31, 2012, and a net loss of $7.37 million for the year ended Oct. 31, 2011. COPYTELE INC: Cancels License Pact with Videocon ------------------------------------------------ ITUS Corporation's predecessor Company, CopyTele, Inc., has agreed to amicably end its arrangement with Videocon Industries Limited, resulting in the termination of the Amended and Restated Technology License Agreement entered into by the parties on May 16, 2008, and terminating Videocon's rights to ITUS's valuable Nano Field Emission Display technology. Corresponding $5 million loans that were made by affiliates of ITUS and Videocon in connection with the 2008 transactions are also being cancelled, resulting in a positive adjustment to ITUS's shareholders equity of approximately $850,000, and the return of 20 million shares of ITUS stock that was pledged in connection with the loans. Robert Berman, ITUS's president and CEO stated, "We are pleased to have reached agreement with Videocon, allowing us to resolve one of the few remaining issues that tied us to CopyTele's past. In November of this year, our final legacy issues will be adjudicated via a 2-week trial against AU Optronics Corp., involving our patented Electrophoretic Display technology and nFED technology, as part of an arbitration where we are seeking over $300 million in damages from AUO. We are in the process of completing our discovery in the AUO arbitration, and are very encouraged with the compelling evidence that we have uncovered so far." ITUS's Nano Field Emission Display or nFED technology is protected by 26 U.S. patents. About ITUS Corporation ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires patented technologies for the purposes of patent monetization and patent assertion. The company currently has 10 patent portfolios in the areas of Key Based Web Conferencing Encryption, Encrypted Cellular Communications, E-Paper(R) Electrophoretic Display, Nano Field Emission Display ("nFED"), Micro Electro Mechanical Systems Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window Frame Construction, VPN Multicast Communications, Internet Telephonic Gateway, and Enhanced Auction Technologies. CopyTele incurred a net loss of $10.08 million for the year ended Oct. 31, 2013, a net loss of $4.25 million for the year ended Oct. 31, 2012, and a net loss of $7.37 million for the year ended Oct. 31, 2011. CopyTele changed its name to "ITUS Corporation" on Sept. 2, 2014, to reflect the Company's change in its business operations. COPYTELE INC: Court Rules in Loyalty Conversion Systems Cases ------------------------------------------------------------- ITUS Corporation announced that the U.S. District Court for the Eastern District of Texas issued several rulings in affiliate Loyalty Conversion Systems Corporation's lawsuits against several domestic airlines. On September 2, the Court issued a claims construction ruling where it construed several claim terms disputed by the parties from both patents at issue in the lawsuits. On September 3, the Court issued a further ruling, where it deemed the subject matter covered by the two patents in the lawsuit as not patentable, therefore rendering both patents invalid. The LCSC portfolio currently consists of 22 other patents, including 10 new patents that were issued in the past year. Robert Berman, ITUS's president and CEO stated, "The issue of what is and is not patentable subject matter has been in flux and the subject of much debate in recent years, and was recently addressed by the U.S. Supreme Court in the CLS Bank decision. The District Court relied on the recent CLS Bank decision in invalidating both of these patents. Although we are studying the Court's opinion, the prospects of an appeal, and the impact of the decision on the other 22 patents in the LCSC portfolio, our business model has always been to diversify so that we are not overly dependent on any one patent portfolio. We have 5 other active patent assertion campaigns and more on the way, so we do not expect this decision to have a significant impact on our ongoing operations." About ITUS Corporation ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires patented technologies for the purposes of patent monetization and patent assertion. The company currently has 10 patent portfolios in the areas of Key Based Web Conferencing Encryption, Encrypted Cellular Communications, E-Paper(R) Electrophoretic Display, Nano Field Emission Display ("nFED"), Micro Electro Mechanical Systems Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window Frame Construction, VPN Multicast Communications, Internet Telephonic Gateway, and Enhanced Auction Technologies. CopyTele incurred a net loss of $10.08 million for the year ended Oct. 31, 2013, a net loss of $4.25 million for the year ended Oct. 31, 2012, and a net loss of $7.37 million for the year ended Oct. 31, 2011. CopyTele changed its name to "ITUS Corporation" on Sept. 2, 2014, to reflect the Company's change in its business operations. COYOTE MOON: Bankruptcy Court Dismisses Chapter 11 Case ------------------------------------------------------- A bankruptcy judge dismissed the Chapter 11 case of Coyote Moon L.P. at the behest of the U.S. Trustee. The bankruptcy court, in its order stated that the Debtor did not file any opposition to the motion for dismissal. The court ordered the Debtor pay $650 in unpaid quarterly fees to the U.S. Trustee. As reported in the TCR on July 7, 2014, Peter C. Anderson, U.S. Trustee for Region 16, sought the dismissal, stating that the Debtor lost possession and title to its primary asset and thereby lacked the ability to generate income to reorganize. The U.S. Trustee added that dismissal is also necessary because the Debtor has not filed any monthly operating reports and has failed to comply with the U.S. Trustee Guidelines applicable to debtors-in- possession. Coyote Moon is a single asset real estate entity. The U.S. Trustee recounted that on Jan. 14, 2014, the Court found that the Debtor filed chapter 11 in bad faith as part of a scheme to hinder, delay and defraud creditors from exercising their state law remedies with respect to two properties. The Court granted a lender permission to foreclose and the lender recently completed its foreclosure efforts. As a result, the Debtor does not own any property to manage or a business to operate, does not generate cash flow, and does not claim any future sources of income or revenue. After the Court granted stay relief, the Debtor and its counsel lost interest in the case, the U.S. Trustee said. The Debtor did not file any monthly operating reports or pay its quarterly fees. The Debtor's counsel did not file an employment application. The Debtor's failure to comply with the debtor-in-possession reporting requirements constitutes "cause" to dismiss. About Coyote Moon San Bernardino, California-based Coyote Moon L.P. filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 13-30080) in Riverside, California, on Dec. 17, 2013. The Debtor estimated assets of at least $10 million and liabilities of between $1 million and $10 million. Gil Rodriguez, Jr., signed the petition as general partner. Stephen R Wade, Esq., at The Law Offices of Stephen R Wade, serves as the Debtor's counsel. Judge Wayne E. Johnson presides over the case. CRS HOLDING: Section 341(a) Meeting Scheduled for Oct. 15 --------------------------------------------------------- A meeting of creditors in the bankruptcy case of CRS Holding of America, LLC, et al., will be held on Oct. 15, 2014, at 1:30 p.m. at Tampa, FL (860) - Room 100-A, Timberlake Annex, 501 E. Polk Street. Creditors have until Dec. 29, 2014, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About CRS Holding of America CRS Holding of America, LLC, operates a full service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries filed Chapter 11 petitions (Bankr. M.D. Fla. Lead Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS Holding estimated total assets of $50 million to $100 million and liabilities of $10 million to $50 million. The petitions were signed by Robert Swett, receiver and chief restructuring officer. The cases are assigned to Judge K. Rodney May. The Debtors have hired Shumaker, Loop & Kendrick, LLP, as counsel. CRS HOLDING: Has Interim Approval of $750,000 DIP Loan ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, gave CRS Holding of America, LLC, et al., interim authority to obtain from Regions Bank debtor-in-possession financing up to an aggregate principal amount of $750,000. As security for all postpetition obligations, the Lender is granted a first priority, perfected security interest in and lien upon all the collateral, senior in all respects to all other present and future liens or claims, except unavoided and/or unsubordinated landlord liens pending a final hearing on the request to obtain financing. G&I VII Tampa East, LLC, a landlord to the Debtors, asked that if the Court authorizes the Debtors to obtain postpetition financing, then provisions must be made to provide for the removal by the Debtors of hazardous substances and clean up of the three leased premises in accordance with applicable state and federal environmental laws designed to protect the public's health and safety. The Debtors have filed a motion seeking to reject their lease with G&I VII, and G&I VII, in response, does not object to the rejection of the lease provided that the Debtors are directed to remove the hazardous substances they've accumulated in the premises and clean up the premises in accordance with applicable state and federal environmental laws. The matter is set for a final hearing at Sept. 29, 2014, at 1:30 p.m. Objections must be received on or before Sept. 26. A full-text copy of the Interim DIP Order is available at http://bankrupt.com/misc/CRSdipord0904.pdf Counsel for the Lender is: Keith Fendrick, Esq. Noel Boeke, Esq. HOLLAND & KNIGHT LLP P.O. Box 1288 Tampa, FL 33601-1288 Email: keith.fendrick@hklaw.com noel.boeke@hklaw.com G&I is represented by: Kenneth G.M. Mather, Esq. GUNSLER, YOAKLEY & STEWART, P.A. 401 E. Jackson Street, Suite 2500 Tampa, FL 33602 Tel: (813) 222-6630 Fax: (813) 228-6739 Email: kmather@gunster.com About CRS Holding of America CRS Holding of America, LLC, operates a full service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS estimated total assets of $50 million to $100 million and debt of $10 million to $50 million. The Debtors' outstanding loan balances to secured creditors are: Regions Bank, $15 million; JY Creative Holdings, Inc. $6.8 million; and Intersection, LLC, $250,000. The Debtors estimate that general unsecured claims total $5 million. The cases are assigned to Judge K. Rodney May. The Debtors have tapped Shumaker, Loop & Kendrick, LLP, as counsel. CRS HOLDING: DOJ Watchdog Seeks Appointment of Ch. 11 Trustee ------------------------------------------------------------- Guy G. Gebhart, the Acting U.S. Trustee for Region 21, asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, to direct the appointment of a trustee for the Chapter 11 cases of CRS Holding of America, LLC, and its debtor affiliates. The U.S. Trustee asserts that the appointment of a Chapter 11 trustee better serves the interests of the Debtors' estates and is more consistent with the policy of the Bankruptcy Code, pointing out that the scheme of the Bankruptcy Code is hostile to the concept of a receiver in bankruptcy. The U.S. Trustee specifically points to Section 105(b) which expressly prohibits a bankruptcy court from appointing a receiver. A receiver has been appointed for the Debtors, but the U.S. Trustee contends that the receivership is the creation of another court and, therefore, the receiver answers to that court, and not to the Bankruptcy Court. Moreover, the U.S. Trustee says the receiver's appointment resulted from an action by a secured creditor and the method by which the receiver was selected likely did not follow a procedure with similar safeguards designed to insure disinterestedness. The U.S. Trustee is represented by: Benjamin E. Lambers, Esq. Trial Attorney 501 E. Polk Street, Suite 1200 Tampa, FL 33602 Tel: (813) 228-2000 Fax: (813) 228-2303 Email: Ben.E.Lambers@usdoj.gov About CRS Holding of America CRS Holding of America, LLC, operates a full service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS estimated total assets of $50 million to $100 million and debt of $10 million to $50 million. The Debtors' outstanding loan balances to secured creditors are: Regions Bank, $15 million; JY Creative Holdings, Inc. $6.8 million; and Intersection, LLC, $250,000. The Debtors estimate that general unsecured claims total $5 million. The cases are assigned to Judge K. Rodney May. The Debtors have tapped Shumaker, Loop & Kendrick, LLP, as counsel. CRS HOLDING: Secured Creditor Seeks Dismissal of Ch. 11 Cases ------------------------------------------------------------- JY Creative Holdings, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, to dismiss the bankruptcy cases filed by Robert Swett on behalf of CRS Holding of America, LLC, and its debtor affiliates, asserting that the Receiver lacks standing to file the cases. JY Creative, a secured and unsecured creditor of the Debtors, a member of the board of directors, and a stockholder, asserts that the appointment of a receiver does not deprive the corporate directors of the power to file a bankruptcy petition. JY Creative further asserts that the Receiver, while clothed with many of the powers and duties of a director of a corporation as a result of the receivership order, is not a substitute director and is not the corporation, and the filing of the bankruptcy petition must have the effect of terminating the receivership. JY Creative is represented by: Nathan A. Carney, Esq. CARNEY LAW FIRM, P.A. 400 N. Ashley Drive Suite 2600 Tampa, FL 33602 Tel: (813) 712-8776 Fax: (813) 712-8780 Email: ncarney@carneylawfirm.com About CRS Holding of America CRS Holding of America, LLC, operates a full service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS estimated total assets of $50 million to $100 million and debt of $10 million to $50 million. The Debtors' outstanding loan balances to secured creditors are: Regions Bank, $15 million; JY Creative Holdings, Inc. $6.8 million; and Intersection, LLC, $250,000. The Debtors estimate that general unsecured claims total $5 million. The cases are assigned to Judge K. Rodney May. The Debtors have tapped Shumaker, Loop & Kendrick, LLP, as counsel. CRS HOLDING: Has Authority to Reject Weston Lease ------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized CRS Holding of America, LLC, et al., to reject the lease with Weston Riverport, LLC, concerning the property located at 7100A Intermodal Drive, in Louisville, Kentucky, as of Aug. 29, 2014. The Debtors will removal any personal property which they intend to recover on or before Sept. 10. About CRS Holding of America CRS Holding of America, LLC, operates a full service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS estimated total assets of $50 million to $100 million and debt of $10 million to $50 million. The Debtors' outstanding loan balances to secured creditors are: Regions Bank, $15 million; JY Creative Holdings, Inc. $6.8 million; and Intersection, LLC, $250,000. The Debtors estimate that general unsecured claims total $5 million. The cases are assigned to Judge K. Rodney May. The Debtors have tapped Shumaker, Loop & Kendrick, LLP, as counsel. CRUMBS BAKE SHOPS: Completes $7MM Sale; Shareholders Get Nothing ---------------------------------------------------------------- Crumbs Bake Shops, Inc. on August 29, 2014, completed the sale of the Company's assets for a credit bid of approximately $7,140,000 and the assumption of various liabilities. On July 11, 2014, in connection with its pending bankruptcy proceeding, Crumbs Bake Shops entered into an Asset Purchase Agreement with Lemonis Fischer Acquisition Company LLC, for the sale of substantially all of the assets of the Company (other than certain excluded assets including cash and cash equivalents). There are no cash proceeds and the credit bid resulted in the repayment of all indebtedness to Lemonis Fischer Acquisition, which held a first priority security interest in the assets of the Company. The Company's remaining assets will be liquidated and the proceeds thereof will be utilized to pay unsecured liabilities in accordance with applicable law and certain advisors' fees and expenses. The Company does not expect that there will be any proceeds available for distribution to shareholders of the Company. About Crumbs Bake Shop Crumbs Bake Shop, Inc., and 22 of its affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. N.J. Lead Case No. 14- 24287) on July 11, 2014. John D. Ireland signed the petitions as chief financial officer. Crumbs Bake Shop estimated assets of $10 million to $50 million and the same range of liabilities. Cole, Schotz, Meisel, Forman & Leonard, P.A., acts as the Debtors' counsel. Prime Clerk LLC is the Debtors' claims and noticing agent. Judge Michael B. Kaplan oversees the jointly administered cases. The U.S. Trustee appointed three creditors to serve in the Official Committee of Unsecured Creditors. Sharon L. Levine, Esq., at Lowenstein Sandler LLP serves as Committee's counsel. * * * On July 7, 2014, the Board of Directors of Crumbs Bake Shop determined to cease operations effective immediately. The Board's determination was made after the Company lacked sufficient liquidity to maintain current operations. On the petition date, Crumbs entered into an Asset Purchase Agreement through which Lemonis Fischer Acquisition Company, LLC, a joint venture created by Marcus Lemonis LLC and Fischer Enterprises, L.L.C., will acquire the Crumbs' business as part of the Company's Chapter 11 filing. Lemonis Fischer Acquisition is represented by Louis Price, Esq., at McAfee & Taft PC. CWGS ENTERPRISES: S&P Raises CCR to 'B+' on Lower Leverage ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Lincolnshire, Ill.-based RV dealer and membership services company CWGS Enterprises LLC to 'B+' from 'B'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's senior secured credit facility to 'BB-' from 'B+'. The recovery rating remains '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The upgrade reflects S&P's expectation for sustained improvement in same-store RV demand in the company's dealership segment (which represented 70% of CWGS' total gross margin in the 12 months ended June 2014) and S&P's expectation for relative revenue stability in the company's membership services and retail segments through 2015. S&P believes the drivers for improved RV demand include higher levels of consumer spending on this relatively big ticket discretionary leisure purchase, as well as a normalization of financing standards by third-party consumer lenders following several years of tight credit availability. EBITDA grew in the first half of 2014 in the mid-teens percentage area, resulting in an improvement in lease-adjusted debt to EBITDA to the high-4x area as of June 30, 2014, from the low-5x area as of Dec. 2013. While S&P expects recent good growth rates to moderate over the next few quarters from constraints in production capacity in the RV industry, the upgrade reflects our expectation that modest EBITDA growth will drive lease-adjusted debt to EBITDA to the mid- 4x area by 2015. This level of adjusted leverage is comfortably aligned with an improved "aggressive" financial risk assessment, compared with S&P's previous financial risk assessment of "highly leveraged." S&P's 'B+' corporate credit rating on CWGS reflects its assessment of the company's business risk profile as "weak" and its financial risk profile as "aggressive." DETROIT, MI: Judge Challenges Plan Opponents in Day 2 of Trial -------------------------------------------------------------- Katy Stech, writing for The Wall Street Journal, reported that the second day of the trial on the city of Detroit's plan of debt adjustment was more tense compared to the first day as U.S. Bankruptcy Judge Steven Rhodes challenged opponents to the city's plan. Kelsey Butler, writing for The Deal, reported that bond insurers Syncora Guarantee Inc. and Financial Guaranty Insurance Corp., argued that the plan is not in the best interest of all creditors, unfairly discriminates against the bond insurers, has not been proposed in good faith, and has violated the creditors' due process rights with a "break-neck pace" to confirmation. According to the Journal, at one point, Judge Rhodes insisted that Syncora lawyer Marc Kieselstein disclose how much the bond insurer would actually accept as repayment. When Mr. Kieselstein responded that his client would accept repayment of 75% of its claim, Judge Rhodes asked him where the city would get the money to repay Syncora, the Journal related. The Journal further related that Judge Rhodes also asked Alfredo Perez, a lawyer for FGIC to explain when it is appropriate for the city to sell property to repay its debts, and asked that it the city owned the schools and libraries, would the bond insurer press for those to be sold too. Mr. Perez said "no" because a city gets to keep assets for the health, welfare and safety, the Journal said. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. DETROIT, MI: S&P Lowers Rating on 5 CUSIPs Revenue Bonds to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services, on Sept. 4, 2013, lowered its ratings on five CUSIPs of Detroit's outstanding sewerage disposal and water supply revenue bonds to 'D' from 'CC', as S&P indicated it would do in its report dated Aug. 28, 2014. All bond CUSIPs rated 'D' are subject to what S&P considers a distressed exchange, because some portion of each bond CUSIP was purchased below par pursuant to a tender offer, which was financed by the Michigan Finance Authority's (MFA) series 2014C and D bonds (MFA series 2014C and D bonds), and the bond CUSIPs were considered impaired for most of the duration of the tender invitation period that ended on Aug. 21, 2014. "We currently intend to assign a 'BBB+' rating to the bond CUSIPs after closing of the MFA series 2014C and D bonds because at that point, the only outstanding portion of the bond CUSIPs will be the untendered portion not considered subject to a distressed exchange. This is the rating we have on both the MFA series 2014C and D bonds and other sewer and water revenue bonds issued by Detroit," S&P said. DEWEY & LEBOEUF: Trustee Seeks $84K in Two Clawback Suits --------------------------------------------------------- Law360 reported that the secured-lender trustee for Dewey & LeBoeuf LLP sued two companies over $84,000 worth of legal fees that they allegedly still owe the now-defunct firm for services rendered. According to the report, trustee FTI Consulting Inc. sued Norwalk, Connecticut-based Clipper Ship Ventures LLC for $40,726 and Southport, Connecticut-based Aviation Capital Partners LLC for $43,868, saying each received legal services from the firm and has not paid for them. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DIALOGIC INC: Approves $770,000 Retention Bonuses for Executives ---------------------------------------------------------------- Dialogic Inc., upon the recommendation of the Company's compensation committee and the approval of the Company's board of directors, entered into retention agreements with Mr. Kevin Cook, its president and chief executive officer; Mr. Robert Dennerlein, its executive vice president, chief financial officer; and Mr. Anthony Housefather, its executive vice president, corporate affairs and general counsel. The retention agreements provide that each executive officer will receive a payment on or around Sept. 15, 2014, (but in any event before Oct. 1, 2014), so long as the executive officer remains employed through the date of payment. Mr. Cook is eligible to receive a First Payment of $320,000, and Messrs. Dennerlein and Housefather are each eligible to receive a First Payment of $50,000. However, if the executive officer resigns his employment without "Good Reason" prior to Nov. 28, 2014, or if the executive officer's employment is terminated for "Cause" prior to Nov. 28, 2014, then the executive officer must return the First Payment within 30 days of the executive officer's termination of employment. The retention agreements also provide that each executive officer will receive an additional payment on or around March 15, 2015, so long as the executive officer remains employed through Feb. 28, 2015, except that the Second Payment will still be made if (i) the executive officer resigns his employment with "Good Reason" prior to Feb. 28, 2015 or the executive officer's employment is terminated without "Cause" prior to Feb. 28, 2015 and (ii) the executive officer complies with the requirements to receive "Severance Benefits" as set forth in the executive officer's Employment Agreement. Mr. Cook is eligible to receive a Second Payment of $250,000, and Messrs. Dennerlein and Housefather are each eligible to receive a Second Payment of $50,000. About Dialogic Milpitas, Cal.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. Dialogic reported a net loss of $53.93 million in 2013 following a net loss of $37.61 million in 2012. The Company's balance sheet at June 30, 2014, showed $60.57 million in total assets, $134.74 million in total liabilities, and a $74.17 million total stockholders' deficit. The Company warned in its quarterly report for the period ended June 30, 2014, that it would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or its affiliates might be required to seek protection under the provisions of applicable bankruptcy codes in other jurisdictions the event of an acceleration of the Company's obligations under the Revolving Credit Agreement or Term Loan Agreement prior to their maturity or if the agreements are not extended or otherwise restructured as of March 31, 2015, and the Company fails to pay the amounts that would then become due. DICKINSON COUNTY: Fitch Lowers Rating on $21.455MM Bonds to 'B' --------------------------------------------------------------- Fitch Ratings has downgraded to 'B' from 'BB-' the rating on $21,455,000 fixed rate bonds, series 1999, issued by Dickinson County Healthcare System (DCHS). The Rating Outlook is Negative. SECURITY The bonds are secured by a pledge of net revenues, investment income, and bond funds under the indenture agreement. KEY RATING DRIVERS VERY WEAK LIQUIDITY: The downgrade to 'B' is driven by continued decline in unrestricted cash and investments, which totaled $7 million at June 30, 2014 compared to $10.7 million one year prior. Liquidity metrics of 29.8 days cash on hand, 1.7x cushion ratio, and 27.4% cash to debt provides very limited cushion against negative operating variability. However, unrestricted cash and investments at July 31, 2014 were reported at $8.8 million, a 25% improvement from the prior month. IMPROVING OPERATIONS: At the time of Fitch's last review, DCHS posted an operating loss of $3.8 million in the six months ended June 30, 2013. In the following year, profitability improved dramatically, and DCHS posted an operating loss of $1.7 million in the fiscal year ended (FYE) Dec. 31, 2013, and a gain of $484,000 in the six months ended June 30, 2014. Management attributes the positive trend to recovering inpatient volumes, enhanced other revenues, and expense reduction initiatives taking hold. HIGH DEBT BURDEN: Debt burden is relatively high with maximum annual debt service (MADS) a high 4.6% of revenues. Combined with weak cash flows, MADS coverage was 1.5x in fiscal 2013 and 2012. However, DCHS has consistently met the debt coverage ratio requirement under the bond indenture. LEADING MARKET POSITION: DCHS continues to maintain its dominant market position in the region. Market share in the primary service area was 87% for inpatient services and 77% for outpatient services in 2013. RATING SENSITIVITIES LIQUIDITY GROWTH NEEDED: The Negative Outlook reflects Fitch's concerns around continued balance sheet deterioration despite operational improvements realized in 2014. A return to Stable Outlook will be predicated on DCHS's ability to sustain better performance exhibited year to date and to reverse the erosion in unrestricted cash and investments. CREDIT PROFILE DCHS is a 96-bed acute care hospital providing primary and secondary services located in Iron Mountain, on Michigan's Upper Peninsula. In fiscal 2013, DCHS generated total revenues of $89.8 million. Signs of Operational Turnaround DCHS was able to reduce its operating loss to $1.7 million through the 2013 year-end, compared to a loss of $3.8 million posted through the six months ended June 30, 2013. Financial improvement was supported by inpatient volume growth, enhanced 340B program revenue, electronic health record incentive revenue, and expense reductions. Signs of continued recovery were evident through the six months ended June 30, 2014, with an operating income of $484K (1.1% operating margin). Management expects the positive trend to continue and end fiscal 2014 with a positive operating income for the first time since 2007, which Fitch believes is attainable. Very Low Liquidity Liquidity declined further in 2014 with $7 million of unrestricted cash and investments at June 30, 2014 compared to $9.7 million at FYE 2013 and $19.9 million at FYE 2010. Liquidity metrics of 29.8 days cash on hand, 1.7x cushion ratio, and 27.4% cash to debt compare unfavorably against Fitch's below investment-grade medians and is a key credit concern. Management reported unrestricted liquidity improved to $8.8 million at July 31, 2014. Modest Increase in Capital Spending Investments in capital are expected to increase following few years of muted capital spending. Excluding the medical office building project that has been on hold, capital spending is budgeted at $5.3 million in 2014 and $5.8 million in 2015, which would slightly exceed depreciation levels. Fitch believes it is imperative that DCHS maintain its improved cash flow in order to fund necessary capital expenditures. Any further erosion to DCHS's current liquidity position due to capital spending will lead to negative rating action. Unfavorable Debt Metrics At June 30, 2014, DCHS had $25.7 million in long-term debt outstanding, consisting of $21.5 million in series 1999 fixed rate bonds, $3.9 million in series 2004 fixed rate loan, and small notes and leases. Debt burden is relatively high with 4.6% in MADS as a percentage of revenues and 60.1% debt to capitalization. Due to weak profitability and EBITDA generation, coverage of MADS was also weak at 1.5x in 2013 and 2012. However, DCHS has consistently met its debt coverage ratio required under the bond indenture, despite significant variability in operating performance. Leading Provider as a Sole Community Hospital DCHS is designated as a sole community provider, as its closest competitor is approximately 43 miles away. Given its geographic location, DCHS continues to hold a dominant market position, with 87% of inpatient market share and 77% of outpatient market share in 2013. DCHS continued to enhance its service offerings in the last few years, opening a wound care clinic and adding physicians in cardiology, urology, pulmonology, orthopedics, and ENT. While DCHS's dominant market position is viewed favorably, Fitch also recognizes that DCHS's performance is highly dependent on the service area utilization trends and is susceptible to resulting operating and financial volatility. EDUCATION MANAGEMENT: Finalizes Restructuring Support Agreement --------------------------------------------------------------- Education Management Corporation on Sept. 5 disclosed that it has finalized a Restructuring Support Agreement previously announced on Aug. 27, 2014. Creditors holding in excess of 94 percent of the company's aggregate debt (including Lenders holding in excess of 98 percent of the company's existing secured bank debt (the "Consenting Lenders")) and the company's principal shareholders have signed the agreement. "We believe the strong support of our lenders, note holders and principal shareholders for the restructuring will provide us with a capital structure that better aligns with the current operating environment," said Mick J. Beekhuizen, Education Management CFO. "We appreciate the cooperation demonstrated during this process and look forward to continued cooperation by the parties to successfully implement the restructuring." Phase one of the restructuring will reduce the company's funded debt by approximately $1.1 billion, providing for the exchange of approximately $1.5 billion of outstanding debt as of June 30, 2014 for $400 million of new debt, non-voting preferred equity interests that would be convertible into common shares and warrants for the purchase of common shares. The company intends to offer note holders that have not been party to the restructuring discussions and/or that have not signed the Restructuring Support Agreement the chance to participate in the restructuring, but the support or participation of additional creditors is not a condition precedent to implementing the Restructuring Support Agreement. Subject to applicable regulatory approvals, the company anticipates closing phase one by no later than Oct. 30, 2014. Phase two of the restructuring, whereby a portion of the new preferred stock will be mandatorily converted into common shares, and the remainder become convertible at the election of the holder, remains subject to applicable regulatory approvals and a shareholder vote. The company expects to complete phase two of the restructuring in 2015. The company's existing shareholders would retain 4 percent of the outstanding common stock after giving effect to the conversion of the new preferred stock and receive warrants to purchase an additional 5 percent of the common stock. In connection with the restructuring contemplated by the Restructuring Support Agreement, the company and the Consenting Lenders have executed an amendment to the company's existing senior secured credit facility and the company and certain note holders have executed an exchange agreement in respect of approximately 86 percent of the company's existing unsecured notes. -- Pursuant to the terms of the amendment to the credit facility, all financial covenants have been waived through June 30, 2015, cash interest expense and required amortization payments have been substantially decreased through June 30, 2015, and the maturity of the revolving credit facility has been extended to July 2, 2015. In addition, the collateral proceeds waterfall set forth in the pledge and security agreement entered into in connection with the credit agreement has been amended to provide that obligations owing to lenders that are not Consenting Lenders will be paid only after satisfaction in full of obligations owing to lenders that are Consenting Lenders. -- Pursuant to the terms of the exchange agreement, participating holders of the company's existing senior unsecured notes have exchanged their notes for new notes the terms of which provide for the payment of interest in kind (rather than in cash) through and including March 31, 2015. EDMC was advised by Evercore Group L.L.C., Wachtell, Lipton, Rosen & Katz, and McKinsey & Company. The ad hoc group of term lenders was advised by Houlihan Lokey Capital, Inc. and Milbank, Tweed, Hadley & McCloy LLP. The ad hoc group of revolving lenders was advised by FTI Consulting, Inc. and White & Case LLP. The ad hoc group of senior noteholders was advised by Houlihan Lokey Capital, Inc. and Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Education Management Corporation With approximately 119,500 students as of April 2014, Education Management Corporation -- http://www.edmc.edu-- is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 110 locations in 32 U.S. states and Canada. The company offers academic programs to students through campus-based and online instruction, or through a combination of both. The company is committed to offering quality academic programs and strives to improve the learning experience for its students. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology. EDUCATION MANAGEMENT: S&P Lowers CCR to 'CC'; Outlook Negative -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Pittsburgh-based for-profit post-secondary school operator Education Management LLC (EDMC) to 'CC' from 'CCC-'. The rating outlook is negative. At the same time, S&P lowered the issue-level rating on the company's senior secured credit facilities to 'CC' from 'CCC-', in accordance with S&P's notching criteria for a '3' recovery rating, reflecting its expectation for meaningful (50% to 70%) recovery for lenders in the event of default. In addition, S&P has affirmed the senior unsecured debt rating at 'C' (which is the lowest possible issue rating for an instrument that is not in default). The recovery rating on this debt is '6', indicating that lenders could expect negligible (0% to 10%) recovery in the event of a payment default. The rating action follows EDMC's announcement that it is seeking to restructure its capital structure by exchanging roughly $1.1 billion of existing debt for $400 million in new debt in addition to preferred equity that will be convertible into common shares. The restructuring is subject to U.S. Dept. of Education and shareholder approval, which the company expects to receive in 2015. Additionally, the company is seeking an amendment to its senior credit facility that will not only allow time to receive regulatory approval, but also waive all financial covenants, reduce cash interest expense, and convert to a PIK structure in lieu of regular principal amortization through June 30, 2015. S&P views the substitution of the PIK structure in place of the original interest and principal payments as tantamount to a default. S&P's rating outlook is negative. S&P intends to lower the corporate credit rating to 'SD' and the affected issue-level ratings to 'D' on Sept. 30, 2014, when the existing recurring interest and principal payments are scheduled to be converted to PIK. S&P expects that it will raise its ratings once the entire restructuring is finalized and we complete a forward-looking review that takes into account the company's long-term business prospects and financial stability. S&P will also consider benefits from the proposed debt exchange, which will reduce lease- adjusted debt leverage to 1x to 2x area (pro forma as of March 31, 2014). S&P currently expects that the corporate credit rating would rise no higher than 'B-'. ENDEAVOUR INT'L: Talisman Ceases to Hold 5% Equity Stake -------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Talisman Realty Capital Master, L.P., and its affiliates disclosed that as of Sept. 2, 2014, they beneficially owned 1,620,570 shares of common stock of Endeavour International representing 3.12 percent of the shares outstanding. The reporting persons previously owned 7,620,570 shares at March 3, 2014, or 14.73 percent equity stake. A full-text copy of the regulatory filing is available for free at http://is.gd/pO0u8S About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. Endeavour International reported net loss of $95.47 million in 2013, a net loss of $126.22 million in 2012 and a net loss of $130.99 million in 2011. As of June 30, 2014, the Company had $1.55 billion in total assets, $1.55 billion in total liabilities, $43.70 million in series c convertible preferred stock and a $41.48 million total stockholders' deficit. * * * As reported by the TCR on April 2, 2014, Moody's Investors Service upgraded Endeavour International Corporation's Corporate Family Rating (CFR) to Caa2 from Caa3. "The rating upgrade to Caa2 reflects the recent equity issuance and other first quarter financing transactions that have improved Endeavour International's liquidity" commented Pete Speer, Moody's Vice President. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. ENDEAVOUR INT'L: Moody's Lowers Corp. Family Rating to 'Ca' ----------------------------------------------------------- Moody's Investors Service downgraded Endeavour International Corporation's Probability of Default Rating (PDR) to Ca-PD from Caa2-PD, its Corporate Family Rating (CFR) to Ca from Caa2, its First Priority Note rating to Ca from Caa2, its Second Priority Note rating to C from Caa3, and its Speculative Grade Liquidity Rating to SGL-4 from SGL-3. The outlook is negative. Ratings Downgraded: Endeavour International Corporation Corporate Family Rating downgraded to Ca Probability of Default Rating downgraded to Ca-PD First Priority Note Rating downgraded to Ca (LGD4) Second Priority Note Rating downgraded to C (LGD5) Speculative Grade Liquidity Rating to SGL-4 Outlook negative Ratings Rationale The downgrade follows Endeavour's decision to not make interest payments on its $404 million 12% First Priority Notes due March 2018, $150 million 12% Second Priority Notes due June 2018, and $18 million 6.5% Convertible Senior Notes due November 2017. The missed interest payments totaled $33.5 million. The company has a 30-day grace period provided for in the Indentures to cure the default, which expires October 1, 2014. Endeavour is engaged in discussions with representatives of certain holders of its various classes of indebtedness regarding the potential terms under which the Notes could be restructured so as to deleverage the company, but so far there has been no agreed upon resolution. Even if Endeavour reaches an agreement to restructure its notes, Moody's believes it is likely to view any such restructuring as a distressed exchange equivalent to a default. Therefore the ratings have been lowered to reflect the higher probability of default and Moody's current view as to recovery. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. ENDEAVOUR INT'L: Fails to Pay $33.5-Mil. Interest Due Sept. 2 ------------------------------------------------------------- Endeavour International Corporation on Sept. 2 disclosed that it has decided not to pay $33.5 million in interest due on Sept. 2, 2014 on its 12% First Priority Notes due March 2018, 12% Second Priority Notes due June 2018 and 6.5% Convertible Senior Notes due November 2017. Under the term of the indentures for the Notes, there is a 30-day grace period during which the Company may elect to make the interest payment and cure any potential event of default for non-payment. A company spokesperson stated: "The Company initiated conversations with representatives of its various debt holders in June. To date, those discussions have not resulted in a constructive resolution regarding the Company's capital structure. We believe it is in the best interest of all stakeholders, debt and equity, to expeditiously address the Company's capital structure with the goal of reducing debt and the cost of capital to position the Company for the future. Endeavour intends to use the 30-day grace period to continue discussions with all its debt providers." The Company is engaged in discussions with representatives of certain holders of its various classes of indebtedness regarding the potential terms under which the Notes could be restructured so as to deleverage the Company. If the Company decides not to make the payments by the end of the grace period, the requisite holders of the Notes could accelerate the repayment of the principal payments due. This action would result in cross-defaults to certain other indebtedness of the Company and its subsidiaries, including indebtedness of its Endeavour Energy UK Limited subsidiary. The Company is in discussions with certain creditors and their representatives with respect to obtaining certain amendments and waivers of default resulting from the non-payment of the September 2, 2014 interest payments and is also seeking a refinancing of the indebtedness of Endeavour Energy UK Limited. No agreements regarding such restructuring, amendments and waivers or refinancing have been entered into at this time, and no assurances can be given that the Company's efforts will result in any such agreements. About Endeavour International Endeavour International Corp -- http://www.endeavourcorp.com/-- is an oil and gas exploration and production company focused on the acquisition, exploration and development of oil and natural gas in the North Sea and the United States. ENDICOTT INTERCONNECT: Plan Solicitation Deadline Moved to Dec. 14 ------------------------------------------------------------------ The Hon. Diane Davis of the U.S. Bankruptcy Court for the Northern District of New York further extended the exclusive period of Endicott Interconnect Technologies Inc. and its debtor-affiliates to solicit acceptances of their amended Chapter 11 plan of liquidation until Dec. 14, 2014. As reported in the Troubled Company Reporter on May 13, 2014, EIT on Dec. 23, 2013, filed its Liquidation Plan and proposed disclosure statement. The accompanying disclosure materials had unsecured creditors getting an estimated recovery of 1% to 2% on about $35 million in claims. The initial hearing to consider approval of the Disclosure Statement was held on Feb. 27, 2014. Since that time, the Debtors' counsel has worked with the Office of the U.S. Trustee and the Official Committee of Unsecured Creditors to resolve their objections to the Disclosure Statement. In addition, the Debtors are working to resolve certain priority and general unsecured claims that will impact the overall distribution to creditors in the Chapter 11 cases. The Debtors intended to file an amended Plan and amended Disclosure Statement, incorporating the resolved objections and claims by April 24. About Endicott Interconnect Endicott Interconnect Technologies, Inc., and its affiliates filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-61156) in Utica, New York, on July 10, 2013, to sell the business before cash runs out by the end of September. David W. Van Rossum is the Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel to the Debtor. Based in Endicott, New York, and formed in 2002, EIT is the successor to the microelectronics division of IBM Corp. The products are used in aerospace, defense and medication applications, among others. The Company sought Chapter 11 bankruptcy protection after suffering $100 million in operating losses in the last four years. In addition to $16 million in secured claims, trade suppliers are owed $34 million. There is another $32 million owing for loans made by shareholders. The Company said the book value of property is $36 million. An official committee of unsecured creditors has been appointed in the case with Avnet Electronics Marketing, Arrow Electronics, Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc., Orbotech, Inc., Tyco Electronics, and High Performance Copper Foil, Inc. as members. The committee is represented by Arent Fox LLP. The official creditors' committee said there could be $20.8 million in claims to bring against insiders. In August 2013, the judge authorized the committee to conduct an investigation of the insiders. ENERGY FUTURE: Bondholders Seek Answers on NextEra's Bid -------------------------------------------------------- Peg Brickley, writing for The Wall Street Journal, reported that Energy Future Holdings Corp. bondholders are seeking information as to what happened to a proposal from NextEra Energy Inc. for one of the energy seller's subsidiary, Oncor. As previously reported by The Troubled Company Reporter, Energy Future has extended the bid deadline for the rights to a majority stake in Oncor, its valuable Texas transmission business, due to an increased interest among potential bidders. As a result of the Debtors' filing of their plan to ran an auction process for Onco, NextEra withdrew its proposal. NextEra's strategic proposal included (i) a cash contribution by NextEra, and (ii) a tax-free merger of reorganized EFH with a subsidiary of NextEra in an all-stock merger in which NextEra would acquire 100% of reorganized EFH common stock in exchange for NextEra common stock. According to the Journal, the trustee for some $3.5 billion worth of bonds said the facts leading to NextEra's decision to withdraw the offer are "entirely undisclosed" and "must be fully explored." The trustee said Energy Future nor NextEra has not said whether NextEra has walked away or is still interested in competing for Oncor, the Journal related. About Energy Future 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. EOS PETRO: Has $12.7-Mil. Net Loss for June 30 Quarter ------------------------------------------------------ Eos Petro, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $12.72 million on $323,121 of oil and gas sales for the three months ended June 30, 2014, compared with a net loss of $2.69 million on $197,000 of oil and gas sales for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.7 million in total assets, $6.14 million in total liabilities, and stockholders' deficit of $4.44 million. For the six months ended June 30, 2014, the Company reported a net loss of $28.89 million and had negative cash flows from operating activities of $737,385. Management estimates the Company's capital requirements for the next twelve months, including drilling and completing wells for the Works Property and various other projects, will total $1 million. Errors may be made in predicting and reacting to relevant business trends and the Company will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company's business, results of operations, and financial condition to suffer. As a result, the Company's independent registered public accounting firm, in its report on the Company's Dec. 31, 2013 consolidated financial statements, has raised substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/GHPQ9D Los Angeles-based Eos Petro, Inc., formerly Cellteck, Inc., is presently focused on the exploration, development, mining, operation and management of medium-scale oil and gas assets. EQUITABLE OF IOWA: Fitch Affirms 'BB' Preferred Stock Rating ------------------------------------------------------------ Fitch Ratings has affirmed the 'BBB' Issuer Default Rating (IDR), the 'BBB-' senior debt rating and the 'BB' junior subordinated debt rating of Voya Financial, Inc. (Voya), as well as the 'A-' Insurer Financial Strength (IFS) ratings of the U.S. operating entities. The Rating Outlook for all ratings is Positive. Key Rating Drivers On March 6, 2014 Fitch revised its Outlook on Voya to Positive from Stable. The revision in the Outlook reflects the significant improvement in Voya's balance sheet strength as well as improved debt servicing capacity. Holding company financial leverage has declined to 23% at June 30, 2014 from 56% at year-end 2010. Fitch believes the quality of the company's common equity is better than peer averages, with minimal exposure to goodwill and other intangibles. Fitch considers the aggregate capitalization of Voya, including captives, to be strong for the current rating level. The estimated consolidated risk-based capital (RBC) ratio of the company's U.S. insurance subsidiaries was 501% at June 30, 2014. Fitch expects reported RBC to remain in the 425% - 450% range over the intermediate term driven by improved statutory operating performance offset by distributions to the holding company. Fitch views positively the 2013 contribution of over $1.8 billion of capital to Security Life of Denver International to support certain minimum guarantees in its closed-block variable annuity products. Statutory dividend capacity has improved in 2014 after Voya transferred amounts out of paid-in capital into unassigned funds in 2013, thereby creating a positive earned surplus account and ordinary statutory dividend capacity. Fitch expects statutory interest coverage to be approximately 4.5x in 2014, up from 1.4x in 2013. This is in excess of Fitch's median ratio guideline for an 'A' rated company of 3x. During the second quarter of 2014, the insurance subsidiaries paid a $722 million ordinary dividend to the holding company. At June 30, 2014 Voya has $879 million of cash at the holding company level, in excess of its intention to hold 24 months of liquidity, or roughly $450 million. Voya's ratings also reflect the large scale and solid business profile in retirement and individual life markets, improved operating performance within its core businesses, and conservative investment portfolio. Fitch's key rating concerns include the challenges related to the run-off of Voya's large closed-block VA book, particularly in a tail-risk scenario. Fitch notes as positive that the company has utilized dynamic and macro hedging to mitigate the statutory capital impact associated with changes in the equity markets and/or interest rates. However, policyholder behavior assumptions cannot be hedged and therefore remain a risk. At June 30, 2014, Voya had $4.6 billion in reserves and capital supporting the closed-block VA book. The ratings also recognize the company's above-average reliance on the capital markets for excess reserve financing. Voya's total financing and commitments (TFC) ratio of 0.9x is high compared to other peers and is driven by funding for XXX and AXXX reserve financing, and to a much lesser extent, securities lending agreements. Voya's recently announced reinsurance transaction with Reinsurance Group of America, Inc. will improve the TFC ratio going forward since Voya will unwind one of its captives and the associated redundant reserve financing. During the first half of 2014, Voya reported an ongoing business adjusted operating return on equity (ROE) of 10.9%, up from 10.3% in 2013 and 8.3% in 2012. Management remains committed to improving this metric to 12% - 13% by 2016. Fitch believes Voya's scalable business model is positioned well to participate in the long-term growth of the retirement savings market. However, Fitch acknowledges that is a highly competitive segment of the market. ING Groep N.V. (ING Group) has reduced its stake in Voya to approximately 32% following the closing of its September 2014 secondary common stock offering and must fully divest its interest in the company by year-end 2016. Voya's remaining parental ties include letter of credit facilities provided by ING Bank which have been significantly reduced and replaced by third party providers. The remaining facilities are now on an arms-length basis. Rating Sensitivities The key rating triggers that could result in an upgrade include: -- Continued growth in operating profitability on both a GAAP and statutory basis; -- Sustained maintenance of GAAP adjusted operating earnings- based interest coverage of more than 8x and statutory interest coverage of more than 4x; -- Reported RBC above 450%, and financial leverage below 25%; -- Private sale of closed-block book at good value with boost to capitalization and reduction in volatility and risk. The key rating triggers that could result in a downgrade include: -- A decline in reported RBC below 375%; -- Financial leverage exceeding 30%; -- Significant adverse operating results; -- Further material reserve charges required in its insurance/variable annuity books or a significant weakening of distribution channel or scale advantages. Fitch has affirmed the following ratings with a Positive Outlook: Voya Financial, Inc. -- Long-term IDR at 'BBB'; -- 5.5% senior notes due July 15, 2022 at 'BBB-'; -- 2.9% senior notes due Feb. 15, 2018 at 'BBB-'; -- 5.7% senior notes due July 15, 2043 at 'BBB-'; -- 5.65% fixed-to-floating junior subordinated notes due May 15, 2053 at 'BB'. Voya Retirement Insurance and Annuity Company Voya Insurance and Annuity Company ReliaStar Life Insurance Co. ReliaStar Life Insurance Company of New York Security Life of Denver Insurance Company -- IFS at 'A-'. Equitable of Iowa Companies, Inc. -- Long-term IDR at 'BBB'. Equitable of Iowa Companies Capital Trust II -- 8.424% Trust Preferred Stock at 'BB'. EURAMAX INTERNATIONAL: Okays Performance Incentives for Employees ----------------------------------------------------------------- The Board of Directors of Euramax Holdings, Inc., approved the Euramax Holdings, Inc., Performance Incentive Plan for certain employees, including all named executive officers of the Company other than the president and chief executive officer. The Plan replaces the participating employees' current annual bonus program and provides for the payment of bonuses to them based on the Company's achievement of certain financial and other milestones over the period commencing on July 1, 2014, and ending on Dec. 31, 2015. Each participant will be eligible to earn bonuses over that period in an aggregate amount ranging from 35% to 110% of the participant's base salary, subject to the terms and conditions of the Plan. About Euramax Based in Norcross, Georgia, Euramax International, Inc., is an international producer of aluminum, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors and home centers in North America and Western Europe. The Company was acquired for $1 billion in 2005 by management and Goldman Sachs Capital Partners. Euramax Int'l has subsidiaries in Canada (Euramax Canada, Inc.), United Kingdom (Ellbee Limited and Euramax Coated Products Limited), and The Netherlands (Euramax Coated Products B.V.), and France (Euramax Industries S.A.). Euramax Holdings reported a net loss of $24.89 million in 2013, a net loss of $36.76 million in 2012 and a net loss of $62.71 million in 2011. Euramax Holdings' balance sheet at March 28, 2014, showed $593.21 million in total assets, $721.29 million in total liabilities and a $128.08 million total shareholders' deficit. Bankruptcy Warning "Any default under the agreements governing our indebtedness, including a default under the ABL Credit Facility and the Senior Unsecured Loan Facility, that is not waived by the required holders of such indebtedness, could leave us unable to pay principal, premium, if any, or interest on the Notes and could substantially decrease the market value of the Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, or interest on such indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our existing and future indebtedness, including the ABL Credit Facility and the Senior Unsecured Loan Facility, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with any accrued and unpaid interest, the lenders under the ABL Credit Facility could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against the assets securing such facilities and we could be forced into bankruptcy or liquidation," the Company said in the 2013 Annual Report. * * * As reported by the TCR on Dec. 13, 2012, Moody's Investors Service downgraded Euramax International, Inc.'s corporate family rating and probability of default rating to Caa2 from Caa1. The downgrade reflects Moody's expectation that the turmoil in global financial markets and weakness in Europe will continue to hamper Euramax's revenues and operating margins as well as weaken key credit metrics. The TCR, in its July 31, 2014, report, stated that Standard & Poor's Ratings Services had revised its rating outlook on Norcross, Ga.-based Euramax International Inc. to negative from stable and affirmed its 'B-' corporate credit rating. FAIRMONT GENERAL: Sept. 19 Closing of Sale to Alecto Set -------------------------------------------------------- U.S. Bankruptcy Judge Patrick M. Flatley approved a stipulation and order regarding closing date of the sale Fairmont General Hospital, Inc., et al.'s substantially all assets. The stipulation entered among the Debtors, purchaser Alecto Healthcare Services Fairmont LLC, the Official Committee of Unsecured Creditors, and UMB Bank, N.A., as indenture trustee, was intended to protect the Debtors' estates from any diminution of cash and any increase in payables resulting from operations between the early closing date and the actual closing date. In this relation, among other things: 1. The purchaser will complete the closing of the sale by Sept. 19, 2014; and 2. To avoid a dispute about the earliest closing date required pursuant to the asset purchase agreement, the parties agreed to have the closing date occur on Sept. 19, unless extended by mutual consent of the parties to the stipulation, to accommodate the concerns of the Debtors' bankruptcy estates during the period between Aug. 22, (the early closing date) and Sept. 19 (the actual closing date. As reported in the Troubled Company Reporter on July 31, 2014, Judge Flatley entered an order on July 1, 2014, approving the Debtors's APA with Alecto Healthcare. Alecto will be purchasing the Debtor's assets and will assume certain liabilities for $15,000,000 cash at closing, plus an additional purchase price of $300,000 payable in one year after the closing pursuant to a promissory note to be delivered at closing. The sale of the Debtors' Assets is in aid of a plan of liquidation to be proposed by the Debtors, the Official Committee of Unsecured Creditors and/or the Indenture Trustee in these cases. The assets sale was open for other higher and better bids. However, by the deadline, no additional qualified bids were received. Before the bid deadline, the Debtors received one bid package from Monongalia Health Systems, Inc. but it was for a certain real property known as the Connector Property and not for all of the Debtors' assets. It didn't constitute a qualified bid pursuant to the Court's bidding procedures order. All objections not withdrawn, settled or resolved are overruled, he Court ruled. Among the entities that filed objections to the sale motion were (1) the Secretary of U.S. Department of Health and Human Services, by and through her attorneys, William J. Ihlenfeld, II, U.S. Attorney for the Northern District of West Virginia, and Helen C. Altmeyer, Assistant U.S. Attorney; (2) Pharmacy Systems, Inc and PSI Supply Chain Solutions, LLC; (3) Iatric Systems, Inc.; (4) Winthrop Resources Corporation; and (5) Farnam Street Financial, Inc. To address the Department of Health's concerns, the Court order provides that the Fairmont General Hospital (FGH) Medicare provider agreements will be assumed by FGH and assigned to Alecto in accordance with the Medicare Statute, the regulations promulgated thereunder, and the Centers for Medicare & Medicaid Services' (CMS) Medicare policies and procedures. The other objectors were concerned on the status of their agreements and/contracts with the Debtors in connection with the Assets Sale. About Fairmont General Hospital Inc. Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Hammond Hanlon Camp, LLC, has been engaged as investment banker and financial advisor. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. The Bankruptcy Court has named Suzanne Koenig at SAK Management Services, LLC, as patient care ombudsman. Ms. Koenig has hired her own firm as medical operations advisor; and Greenberg Traurig, LLP, as her counsel. The Debtors have scheduled $48,568,863 in total assets and $54,774,365 in total liabilities. FBOP CORPORATION: Banks Say They're Entitled to Tax Interest ------------------------------------------------------------ Law360 reported that defunct financial company FBOP Corp. and two banks it owed money filed motions in Illinois federal court to prevent the Federal Deposit Insurance Corporation from claiming that the bankrupt company's transfers of liens to the banks were fraudulent. According to the report, JPMorgan Chase Bank and BMO Harris Bank NA said the FDIC's amended complaint failed to state claims against either of them. FRONTIER COMMUNICATIONS: Fitch Rates New $1.5BB Note Offering 'BB' ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB' rating to Frontier Communications Corporation's (Frontier) (NYSE: FTR) proposed senior unsecured note offering of $775 million due 2021 and $775 million due 2024. Frontier's Issuer Default Rating (IDR) is 'BB' and the Rating Outlook is Stable. Proceeds from the offering are expected to be used to fund Frontier's acquisition of wireline assets in the state of Connecticut from AT&T, Inc. The transaction is expected to close in the fourth quarter 2014, and until that time the net proceeds will be placed in escrow. Should the transaction not be completed by Aug. 17, 2015, the notes will be redeemed at par, plus interest. KEY RATING DRIVERS AT&T Line Acquisition: Frontier has agreed to acquire certain wireline assets in the state of Connecticut from AT&T for $2 billion in cash. Debt mostly funds the transaction, and will lead to an approximate 0.4x increase in Frontier's net leverage. Following the acquisition, Frontier's net leverage is expected to be in the range of 3.7x to 3.8x and will remain elevated over the next couple of years. Acquisition Improves Scale: Fitch believes the positive aspects of the transaction include the increased scale of Frontier on a post- transaction basis, including improved free cash flow (FCF, defined as net cash provided by operating activities less capital spending and dividends). The assets being acquired will not require material additional capital spending given past network upgrades by AT&T with respect to its U-Verse platform. A moderate amount of addition capital spending will be directed to the upgrade of rural broadband speeds. Revenue Pressures Slowly Abating: During 2013 and through the first half of 2014, business and residential customer revenue declines have moderated and are approaching stability, although potential headwinds from competitive pressures and the economy remain in place. Manageable Maturities: Excluding this transaction-related financing, Frontier is not expected to need to access the capital markets to refinance maturing debt through at least 2016. Existing principal repayments of approximately $641 million over 2014-2016 can be managed with cash expected to be on the balance sheet plus FCF. Liquidity Solid: Supporting the rating is Frontier's ample liquidity, which is derived from its cash balances and its $750 million revolving credit facility. At June 30, 2014, Frontier had $802 million in balance sheet cash. Fitch expects 2014 FCF to be under the $461 million generated in 2013 as a result of lower EBITDA, higher interest expense and higher cash taxes. Frontier's expectations for 2014 capital spending-- excluding any spending related to the acquisition --range from $575 million to $625 million, with the mid-point down from the $635 million spent in 2013. Capital spending on fiber-to-the-cell-tower projects will decline in 2014. In 2014, cash taxes are expected to rise to $130 million to $160 million, up from $94 million in 2014. Credit Facility and Debt Maturities: The $750 million senior unsecured credit facility is in place until May 2018. The facility is available for general corporate purposes but may not be used to fund dividend payments. The main financial covenant in the revolving credit facility requires the maintenance of a net debt-to-EBITDA level of 4.5x or less during the entire period. Net debt is defined as total debt less cash exceeding $50 million. Frontier has approximately $30 million of scheduled principal repayments due in the remainder of 2014, $263 million due in 2015, and $348 million due in 2016. RATING SENSITIVITIES Considerations for a Positive Rating Action: -- Given Fitch's leverage expectations over the next two to three years, a positive action is not anticipated. Considerations for a Negative Rating Action: -- If net leverage equals or exceeds 4.0x, a Negative rating action could take place. GARLOCK SEALING: Coltec Wants an Independent Fee Examiner --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that Coltec Industries Inc., a subsidiary of Garlock Sealing Technologies LLC's owner, filed papers asking the bankruptcy judge in Charlotte, North Carolina, to appoint an independent fee examiner to review fee requests and make recommendations to the court after complaining that the fees of lawyers representing asbestos claimants are too high. According to the report, Coltec said that counsel for the official committee of asbestos personal injury claimants has already incurred $26.9 million in fees, compared to about $21.4 million the same firm incurred in fees over a thirteen-year period to represent the asbestos committee in the W.R. Grace case. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GENERAL MOTORS: Canadian Class Action Trial to Begin Tomorrow ------------------------------------------------------------- Sotos LLP on Sept. 5 disclosed that trial will begin on September 9, 2014 in a class action lawsuit on behalf of 182 former Canadian GM auto dealers terminated at the time of GM Canada's 2009 government-funded auto bailout. The suit names General Motors of Canada Limited (GMCL), a subsidiary of General Motors Company and Cassels Brock & Blackwell LLP, a major Canadian law firm. The lawsuit, seeking $750 million in damages, alleges: GM breached provincial franchise laws through a high-pressure, fast-paced campaign to eliminate the dealerships at minimal cost under the threat of a GMCL bankruptcy filing in Canada in May 2009. Cassels was retained by the Canadian GM dealers to act for them in an expected restructuring but was in a conflict of interest because it also acted for the Government of Canada on the GM auto bailout. GMCL gave insufficient time and misleading information to the dealers when it presented the termination package. GMCL threatened to seek formal insolvency protection if any of the dealers rejected the offer. With only six days to respond to the offer, dealers turned to Cassels. But Cassels, without having disclosed its conflict of interest to the dealers, took a passive role and left the dealers with no viable alternatives. Without effective representation and with no remaining time to organize a collective response, the vast majority of dealers signed back the termination offer as presented by GMCL and wound down their businesses. GMCL did not file for bankruptcy protection, unlike its parent company which made a formal Chapter 11 filing in the United States. In a 68-page decision certifying the case as a class action in 2011, the Honourable Justice G.R. Strathy (now Chief Justice of Ontario) described the tumultuous events that took place over six days in May 2009 while GMCL sought to eliminate the dealers. The class includes dealers in every Canadian province. Former owner/operators of dealerships in Toronto, Ottawa and Kingston will testify on behalf of the plaintiff class. The trial in Trillium Motor World Ltd. v. General Motors of Canada Limited and Cassels Brock & Blackwell LLP begins September 9, 2014 at 10 AM at 330 University Ave. Toronto, Courtroom 5-1. The certification decision is available at: http://is.gd/USegxF The court filed statement of claim is available at: http://is.gd/NQ1HN5 The dealers are jointly represented by the Toronto law firms WeirFoulds LLP -- http://www.weirfoulds.com-- and Sotos LLP -- http://www.sotosllp.com 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. * * * The Troubled Company Reporter, on Aug. 29, 2014, reported that Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of General Motors Company (GM) and its General Motors Holdings LLC (GM Holdings) subsidiary at 'BB+'. In addition, Fitch has affirmed GM Holdings' secured revolving credit facility rating at 'BBB-' and GM's senior unsecured notes rating at 'BB+'. The Rating Outlook for GM and GM Holdings is Positive. GIGGLES N HUGS: Posts $477K Net Loss in Q2 Ended June 29 -------------------------------------------------------- American Sands Energy Corp. filed its quarterly report on Form 10- Q, disclosing a net loss of $477,000 on $825,000 of net sales for the thirteen weeks ended June 29, 2014, compared with a net loss of $321,000 on $662,000 of net sales for the three months ended June 30, 2013. The Company's balance sheet at June 29, 2014, showed $2.9 million in total assets, $3.55 million in total liabilities, and a stockholders' deficit of $650,000. The Company has recently sustained operating losses and has an accumulated deficit of $5.78 million at June 29, 2014. In addition, the Company has negative working capital of $2.09 million at June 29, 2014. The Company has and will continue to use significant capital to grow and acquire market share. These factors raise substantial doubt about the ability of the Company to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/GinA7v Los Angeles, Calif.-based Giggle N Hugs, Inc., owns and operates a kid-friendly restaurant named Giggles N Hugs in the Westfield Mall in Century City, as well as the new Westfield Topanga Shopping Center location in Woodland Hills, California and owns the intellectual property rights for Giggles N Hugs facilities in the future. GLOBAL ARENA: Reports $397K Net Loss in Q2 Ended June 30 -------------------------------------------------------- Global Arena Holding, Inc., filed its quarterly report on Form 10- Q, disclosing a net loss of $398,000 on $7.52 million of total revenues for the three months ended June 30, 2014, compared with a net loss of $1.03 million on $2.52 million of total revenues for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.66 million in total assets, $4.74 million in total liabilities, and total stockholders' deficit of $3.09 million. The Company has generated recurring losses and cash flow deficits from operations since inception and has had to continually borrow to continue operations. In addition, the Company is in default of certain notes outstanding and is subject to the holders' continued forbearance of not demanding payment. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/mynoJj About Global Arena New York, N.Y.-based Global Arena Holding, Inc., formerly Global Arena Holding Subsidiary Corp., was formed in February 2009, in the state of Delaware. The Company is a financial services firm that services the financial community through its subsidiaries as follows: Global Arena Investment Management LLC provides investment advisory services to its clients. GAIM is registered with the Securities and Exchange Commission as an investment advisor and clears all of its business through Fidelity Advisors, its correspondent broker. Global Arena Commodities Corp. provides commodities brokerage services and earns commissions. Global Arena Trading Advisors, LLC provides futures advisory services and earns fees. GATA is registered with the National Futures Association (NFA) as a commodities trading advisor. Lillybell Entertainment, LLC provides finance services to the entertainment industry. Global Arena disclosed a net loss attributable to common stockholders of $2.44 million in 2012, as compared with a net loss attributable to common stockholders of $2.75 million in 2011. Wei, Wei & Co., LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses since inception, experiences a deficiency of cash flow from operations and has a stockholders' deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. GENERAL STEEL: Files Amendment to 2013 FY Report ------------------------------------------------ General Steel Holdings, Inc., filed with the U.S. Securities and Exchange Commission on Aug. 19, 2014, an amendment to its annual report on Form 10-K for the year ended Dec. 31, 2013. The Company reported a net loss of $42.62 million on $2.02 billion of sales for the year ended Dec. 31, 2013, compared to a net loss of $231.94 million on $1.97 billion of sales in 2012. The Company's balance sheet at Dec. 31, 2013, showed $2.7 billion in total assets, $3.19 billion in total liabilities and total deficit of $494 million. A copy of the Form 10-K/A is available at: http://is.gd/rVfKbg About General Steel Holdings General Steel Holdings, Inc., headquartered in Beijing, China, produces a variety of steel products including rebar, high-speed wire and spiral-weld pipe. The Company has operations in China's Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality with seven million metric tons of crude steel production capacity under management. For more information, please visit http://www.gshi-steel.com/ GENERAL STEEL: Amends March 31 Quarter Report --------------------------------------------- General Steel Holdings, Inc., filed an amendment to its quarterly report on Form 10-Q, disclosing a net loss of $69.6 million on $512 million of sales for the three months ended March 31, 2014, compared with net income of $10.52 million on $502.43 million of sales for the same period last year. The Company's balance sheet at March 31, 2014, showed $2.7 billion in total assets, $3.26 billion in total liabilities and total stockholders' deficit of $558.53 million. Longmen Joint Venture, the most important entity of the Company, accounted for majority of total sales of the Company. As such, the majority of the its working capital needs come from Longmen Joint Venture. The Company's ability to continue as a going concern depends heavily on Longmen Joint Venture's operations. A copy of the Form 10-Q/A is available at: http://is.gd/jdoSP0 About General Steel Holdings General Steel Holdings, Inc., headquartered in Beijing, China, produces a variety of steel products including rebar, high-speed wire and spiral-weld pipe. The Company has operations in China's Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality with seven million metric tons of crude steel production capacity under management. For more information, please visit http://www.gshi-steel.com/ GLOBAL COMPUTER: Files Bare-Bones Chapter 11 Petition ----------------------------------------------------- Global Computer Enterprises, Inc., filed a Chapter 11 bankruptcy petition in Alexandria, Virginia (Bankr. E.D. Va. Case No. 14-13290) on Sept. 4, 2014, without stating a reason. The case is assigned to Judge Robert G. Mayer. The deadline for governmental entities to file claims is March 3, 2015, according to the docket. The Reston, Virginia-based company estimated $10 million to $50 million in assets and less than $10 million in debt. The Debtor is represented by David I. Swan, Esq., at McGuireWoods LLP, McLean, Virginia. GLOBAL COMPUTER: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Global Computer Enterprises, Inc. dba GCE 10780 Parkridge Blvd., Suite 300 Reston, VA 20191 Case No.: 14-13290 Chapter 11 Petition Date: September 4, 2014 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Hon. Robert G. Mayer Debtor's Counsel: David I. Swan, Esq. MCGUIREWOODS LLP 1750 Tysons Blvd. Suite 1800 McLean, VA 22102 Tel: (703) 712-5365 Email: dswan@mcguirewoods.com Debtor's WEINSWEIG ADVISORS Financial Advisor: Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Freeman, interim chief operating officer. List of Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Steese, Evans & Frankel $602,714 1627 I Street, #850 DC 20086 Elysium $480,653 2 Oliver Street, 11th Floor Boston, MA 02109 Century Link $296,877 P.O. Box 52187 Phoenix, AZ 85072 Hogan Lovells $244,450 Oracle America Inc. $170,072 CLICKS $147,337 Anthem Blue Cross & Blue Shield $34,275 Chitale & Chitale $5,687 United Concordia Dental $3,384 Lexisnexis $1,446 Humana $1,383 The Hartford $1,382 Webex Communications Inc. $1,064 Plexar Finance LLC $276 US General Services Admin. $262 Cintas Document Management $191 GLOBAL DIGITAL: Posts $3.39-Mil. Net Loss for Q2 Ended June 30 -------------------------------------------------------------- Global Digital Solutions, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3.39 million on $111,405 of revenue for the three months ended June 30, 2014, compared to a net loss of $2.05 million on $nil of revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $4.66 million in total assets, $3.98 million in total liabilities, and total stockholders' equity of $680,000. The Company sustained losses and experienced negative cash flows from operations since inception, and at June 30, 2014 had an accumulated deficit of $23.09 million, cash and cash equivalents of $353,087 and working capital of $268,853. The Company has funded its activities to date almost exclusively from equity and debt financings. These factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/57uOXT About Global Digital Solutions Global Digital Solutions, Inc., does not have significant operations. The company focuses on small arms manufacturing. Previously, it was engaged in providing telecom and data engineering services. Global Digital Solutions, Inc.'s independent registered accounting firm has expressed, at December 31, 2012, substantial doubt about its ability to continue as a going concern as a result of its history of net loss. The ability to achieve and maintain profitability and positive cash flow is dependent upon its ability to successfully execute the plans to pursue the acquisition of Airtronic. GM FINANCIAL: Moody's Hikes Corp. Family Rating to 'Ba1' -------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating and senior unsecured debt rating of General Motors Financial Company, Inc. ("GMF") to Ba1 from Ba2 with a stable outlook. GMF's ba3 Baseline Credit Assessment remains unchanged. Upgrades: Issuer: General Motors Financial Company, Inc. Corporate Family Rating Upgraded to Ba1 from Ba2 Senior Unsecured Shelf Upgraded to (P)Ba1 from (P)Ba2 Senior Unsecured Bond Upgraded to Ba1 from Ba2 Issuer: General Motors Financial of Canada, Ltd. Senior Unsecured Upgraded to Ba1 from Ba2 Outlook Actions: Issuer: General Motors Financial Company, Inc. Outlook, Remains Stable Issuer: General Motors Financial of Canada, Ltd. Outlook, Remains Stable Ratings Rationale GMF entered into a support agreement with General Motors Company ("GM") on September 4th that provides increased support to GMF's credit profile and results in an equalization of the two firms' senior ratings. The support agreement is further evidence of increased integration of the captive finance company and the manufacturing company, an ongoing process since GM's acquisition of GMF in October 2010. The support agreement includes a number of key elements. It requires 100% GM ownership of GMF. It also limits GMF's leverage. Leverage is defined as net earning assets divided by common equity less goodwill, plus junior subordinated debt. Leverage is limited to 8.0 times when earning assets are less than $50 billion and incrementally steps up to 12.0 times leverage when earning assets exceed $100 billion. The growth in leverage factored into the support agreement contemplates GMF's continued evolution into a captive finance subsidiary and expected improved asset quality. If leverage exceeds these established limits, a capital injection from GM is expected to remedy the disparity within 30 days of a GMF 10-Q or 10-K filing. The support agreement includes a new unsecured $1 billion junior subordinated credit facility which replaces a $600 million senior, unsecured credit facility that ranked pari passu with GMF's other senior creditors. It also affirms GMF's access to $4 billion of GM's corporate revolving credit facility that GM had already provided. Parental support from GM provides two notches of uplift from GMF's ba3 BCA to get to its Ba1 Corporate Family Rating. Although the support agreement between GMF and GM has important elements that strengthen GMF's credit profile, it is less robust than some other finance companies' support agreements that have features such as debt-holder enforceability, minimum net worth levels, and liquidity provisions that make payment interruption unlikely. Moody's considers the strength of the support agreement, the rating of the parent company, and the BCA of the captive finance company (currently ba3 for GMF) in assessing whether the captive's rating should be equal to the parent's rating. If a large gap between GMF's BCA and GM's rating occurs in the future, GMF's rating may not be equalized with the rating of GM even given the existence of the support agreement. GMF could improve its ba3 standalone credit assessment if it continues to evolve its funding mix to materially reduce its reliance on secured debt, thereby decreasing encumbered asset levels, and if its level of earning assets and origination volumes continue to evolve toward heavier concentration in GM captive businesses. Evidence of removal of GM financial support and/or material deterioration of GMF's asset quality, liquidity measures or capital could result in a downward movement in the ratings. GMF, a wholly owned subsidiary of GM, provides global auto finance solutions through auto dealers across North America, Europe and Latin America. The company, which reported total assets of $42.4 billion as of June 30, 2014, is headquartered in Fort Worth, Texas. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. GOLDEN LAND: Section 341(a) Meeting Adjourned to Wednesday ---------------------------------------------------------- The U.S. Trustee announced that the meeting of creditors of Golden Land LLC has been adjourned from Aug. 25, at 2:00 p.m. to Sept. 10, 9:00 a.m. The meeting will be held at the Office of the U.S. Trustee, Room 2579, 2nd Floor, 271-C Cadman Plaza East, in Brooklyn, New York. Attendance by creditors at the meeting is welcomed, but not required. The meeting gives creditors opportunity to question a representative of the company under oath about its financial affairs and operations that would be of interest to the general body of creditors. About Golden Land LLC Golden Land LLC filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 14-42315) in Brooklyn, New York, on May 8, 2014. The Debtor estimated assets and debt of $10 million to $50 million. Xiangan Gong, Esq., at Xiangan Gong serves as the Debtor's counsel. Judge Nancy Hershey Lord presides over the case. Lawrence Litwack is the receiver of the Debtor's property. GRANDPARENTS.COM INC: Amends March 31 Quarter Report ---------------------------------------------------- Grandparents.com, Inc., filed an amendment to its quarterly report on Form 10-Q, disclosing a net loss of $2.91 million on $35,275 of total revenue for the three months ended March 31, 2014, compared with a net loss of $2.74 million on $122,859 of total revenue for the same period last year. A copy of the Form 10-Q/A is available at http://is.gd/65B0qW The Company's balance sheet at March 31, 2014, showed $7.08 million in total assets, $6.04 million in total liabilities and total stockholders' equity of $1.05 million. The Company used approximately $900,000 in cash for operating activities during the three-months ended March 31, 2014. Without additional capital from existing or outside investors or further financing, the Company's ability to continue to implement its business plan may be limited. These conditions raise substantial doubt about the Company's ability to continue as a going concern. New York-based Grandparents.com, Inc., together with its consolidated subsidiaries, is a family-oriented social media company that through its Web site, http://www.grandparents.com/, serves the age 50+ demographic market. The website offers activities, discussion groups, expert advice and newsletters that enrich the lives of grandparents by providing tools to foster connections among grandparents, parents, and grandchildren. GRANDPARENTS.COM INC: Reports $3.14-Mil. Loss in June 30 Quarter ---------------------------------------------------------------- Grandparents.com, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3.14 million on $57,346 of total revenue for the three months ended June 30, 2014, compared with a net loss of $2.12 million on $134,154 of total revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $6.95 million in total assets, $4.66 million in total liabilities and total stockholders' equity of $2.29 million. The Company has incurred a net loss of $6 million during the and six months ended June 30, 2014 and used $1.4 million and $2.2 million in cash for operating activities during the three- and six-months ended June 30, 2014, respectively. Without additional capital from existing or outside investors or further financing, the Company's ability to continue to implement its business plan may be limited. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/9K6w9F New York-based Grandparents.com, Inc., together with its consolidated subsidiaries, is a family-oriented social media company that through its Web site, http://www.grandparents.com/, serves the age 50+ demographic market. The website offers activities, discussion groups, expert advice and newsletters that enrich the lives of grandparents by providing tools to foster connections among grandparents, parents, and grandchildren. GROWLIFE INC: Incurs $19.2-Mil. Net Income for June 30 Quarter -------------------------------------------------------------- GrowLife, Inc., filed its quarterly report on Form 10-Q, disclosing a net income of $19.23 million on $2.26 million of net revenue for the three months ended June 30, 2014, compared with a net loss of $1.62 million on $872,557 of net revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $3.83 million in total assets, $4.76 million in total liabilities, and total stockholders' deficit of $923,729. The Company incurred net losses of $21.38 million and $2.19 million for the years ended Dec. 31, 2013 and 2012, respectively. Its net cash used in operating activities was $1.79 million for the year ended Dec. 31, 2013. The Company anticipates that it will record losses from operations for the foreseeable future. As of June 30, 2014, its accumulated deficit was $76.64 million. The Company has experienced recurring operating losses and negative operating cash flows since inception, and has financed its working capital requirements during this period primarily through the recurring issuance of convertible notes payable and advances from a related party. The audit report prepared by its independent registered public accounting firm relating to the Company's financial statements for the year ended Dec. 31, 2013 and filed with the SEC on March 31, 2014 includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/h8dH8K GrowLife, Inc., operates businesses that manufacture and supply branded equipment and expendables in the United States for urban gardening, including equipment and expendables for growing of medical marijuana. This holding company, formerly known as Phototron Holdings, Inc., maintains its principal executive offices in Woodland Hills, California. HEALTHSOUTH CORP: Moody's Rates New $175MM Sr. Unsec. Notes 'Ba3' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 (LGD 4) rating to HealthSouth Corporation's proposed offering of $175 million of senior unsecured notes due 2024. Moody's understands that the proceeds of the offering, which is an add-on to the company's existing 5.75% senior notes due 2024, along with amounts available under the company's revolver will be used to fund the redemption of the remaining outstanding amount of 7.25% notes due 2018. HealthSouth's Corporate Family and Probability of Default Ratings of Ba3 remain unchanged given Moody's expectation that credit metrics will not be meaningfully impacted by this transaction. The stable rating outlook is also unchanged. The following rating was assigned: $175 million senior unsecured notes due 2024, Ba3 (LGD 4) The following ratings are unchanged: Corporate Family Rating, Ba3 Probability of Default Rating, Ba3-PD Senior secured revolving credit facility, Baa3 (LGD 1) 7.25% senior unsecured notes due 2018, Ba3 (LGD 4) 8.125% senior unsecured notes due 2020, Ba3 (LGD 4) 7.75% senior unsecured notes due 2022, Ba3 (LGD 4) 5.75% senior unsecured notes due 2024, Ba3 (LGD 4) Senior unsecured shelf, (P) Ba3 Speculative Grade Liquidity Rating, SGL-1 Ratings Rationale HealthSouth's Ba3 Corporate Family Rating reflects the company's moderate leverage and strong interest coverage. Moody's expects that healthy cash flow will allow Healthsouth to grow its business without the use of incremental debt. Moody's also acknowledges that HealthSouth's considerable scale in the inpatient rehabilitation sector and geographic diversification should allow the company to adjust to or mitigate payment reductions more easily than many other inpatient rehabilitation providers. However, Moody's also considers risks associated with HealthSouth's reliance on the Medicare program for a significant portion of revenue and limited services in one niche of the post- acute continuum of care. The ratings could be upgraded if HealthSouth can sustain debt to EBITDA below 3.0 times and EBITA to interest above 3.5 times. Also, the company would need to remain disciplined in regards to shareholder returns and their impact on credit metrics. Finally, Moody's would need to gain comfort around the company's high exposure to Medicare and the potential for negative reimbursement changes prior to a ratings upgrade. If Moody's expects debt to EBITDA to increase and be sustained above 4.0 times, either through unforeseen adverse developments in Medicare reimbursement, a significant debt financed acquisition, an increased appetite for debt financed shareholder initiatives, or deterioration in operating performance, the ratings could be downgraded. The principal methodology used in this rating was Global Healthcare Service Providers 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. Headquartered in Birmingham, Alabama, HealthSouth Corporation is the largest operator of inpatient rehabilitation hospitals. As of June 30, 2014 the company operates 103 inpatient rehabilitation hospitals. The company also provides outpatient services through a network of 17 outpatient satellite clinics, located within or near the company's rehabilitation hospitals, and 25 hospital-based home health agencies. The company also manages three inpatient rehabilitation units through management contracts. HEALTHSOUTH CORP: S&P Retains 'BB-' CCR Over $175MM Notes Add-On ---------------------------------------------------------------- Standard & Poor's Ratings Services said its 'BB-' corporate credit rating on Birmingham, Ala.-based HealthSouth Corp. is unchanged by the company's proposed $175 million add-on to its senior unsecured notes due in 2024. The company will use proceeds of the add-on plus proceeds from a draw on an upcoming delayed draw term loan to repay its senior unsecured notes due in 2018. The 'BB+' rating on the revolving credit facility, 'BB-' rating on senior notes and 'B-' rating on its convertible preferred stock are all unchanged. There are no changes to the recovery ratings. The ratings on HealthSouth reflect S&P's view of the company's narrow business focus and large reliance on one source for a large percentage of its revenues. The ratings also reflect the company's financial risk profile with leverage expected to remain in the mid-3x range. RATINGS LIST HealthSouth Corp. Corporate Credit Rating BB-/Stable/-- Senior Unsecured BB- Recovery Rating 3 Revolving credit facility BB+ Recovery Rating 1 Preferred stock B- HELIA TEC: Court Denies Bid to Amend Order on Case Conversion ------------------------------------------------------------- The bankruptcy court denied the motion to alter or amend order denying amended motion to convert or appoint a Chapter 11 trustee in the Chapter 11 case of Helia Tec Resources, Inc. As reported in the TCR on Aug. 19, HSC Holdings Co., Ltd., formerly known as GE&F Co., Ltd., asked the Bankruptcy Court to amend its July 18, 2014 order on its request to convert or dismiss Helia Tec Resources, Inc.'s Chapter 11 case. HSC sought for the conversion of the case to Chapter 7 so that an independent fiduciary may oversee the orderly liquidation of the estate and facilitate pending claims. During the hearing, the Court noted that HSC could choose not to pursue the issue at that point and preserve the issue for another day. Based on comments from the bench, HSC amended its request, withdrew its alternate request for dismissal based on lack of authority and improper purpose, and added an alternate request for the appointment of a Chapter 11 trustee. On July 18, 2014, the Court denied HSC's amended request. In a sentence that appears to address to the Court's jurisdictional concerns, but with no direct bearing on the substance of HSC's amended request, the Court stated that "[a]lthough HSC attempted to preserve the issue regarding Mr. [Cary] Hughes' authority to act on behalf of the Debtor, the withdrawal of the request to dismiss the case due to lack of authority constitutes an admission that the case was properly filed". David B. Harberg, Esq., in Houston, Texas, points out that the statement suggests that HSC did not effectively preserve its objections to Hughes' authority to act on Helia Tec's behalf and that, by withdrawing its alternate request for dismissal, HSC has judicially admitted that Hughes had the authority to file this bankruptcy case. Mr. Harberg clarifies that regardless of whether Mr. Hughes or HSC had the legitimate authority to initiate the bankruptcy filing, HSC ratified the filing of the case, and the Court has jurisdiction over the bankruptcy. Mr. Harbergy adds that HSC has never admitted to Mr. Hughes' authority to act on Helia Tec's behalf in the bankruptcy proceeding or otherwise. HSC's election to withdraw its request for dismissal of the bankruptcy based on Mr. Hughes' lack of authority to act on behalf of Helia Tec is no judicial admission that Mr. Hughes has the authority, says Mr.Harberg. HSC has expressly preserved its objections to Mr. Hughes' authority. HSC therefore wants the order to be altered or amended to remove any ambiguity or confusion concerning the effect of HSC's withdrawal of its request for dismissal. About Helia Tec Resources Helia Tec Resources, Inc. filed a Chapter 11 petition (Bankr. S. D. Tex. Case No. 13-36251) on Oct. 3, 2013 in Houston, Texas, represented by Richard L. Fuqua, II, Esq., at Fuqua & Associates, PC, in Houston, as counsel to the Debtor. The Debtor listed $16.15 million in assets and $2.24 million in liabilities. The petition was signed by Cary E. Hughes, president. Judy A. Robbins, U.S. Trustee for Region 7, was unable to appoint an official committee of unsecured creditors in the Debtor's case. ICTS INTERNATIONAL: Igal Tabori Reports 15% Equity Stake -------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Igal Tabori disclosed that as of Sept. 2, 2014, he beneficially owned 1,202,483 shares of common stock of ICTS International N.V. representing 14.96 percent of the shares outstanding. On Aug. 26, 2014, Tabori Enterprises Ltd. purchased 6,900 common shares of common stock at $1.00 per share. Mr. Tabori is the Chairman and he indirectly owns 50% of Tabori Enterprises through Igal Tabori Holdings Ltd, his wholly owned entity. A copy of the regulatory filing is available for free at: http://is.gd/pNEG28 About ICTS International ICTS International N.V. is a public limited liability company organized under the laws of The Netherlands in 1992. ICTS specializes in the provision of aviation security and other aviation services. Following the taking of its aviation security business in the United States by the TSA in 2002, ICTS, through its subsidiary Huntleigh U.S.A. Corporation, engages primarily in non-security related activities in the USA. ICTS, through I-SEC International Security B.V., supplies aviation security services at airports in Europe and the Far East. In addition, I-SEC Technologies B.V. including its subsidiaries develops technological systems and solutions for aviation and non? aviation security. ICTS International reported a net loss of $3.43 million on $125.70 million of revenue for the year ended Dec. 31, 2013, as compared with a net loss of $9.01 million on $96.75 million of revenue during the prior year. As of Dec. 31, 2013, the Company had $29.13 million in total assets, $69.49 million in total liabilities and a $40.35 million total shareholders' deficit. Mayer Hoffman McCann CPAs, 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 a history of recurring losses from continuing operations, negative cash flows from operations and a working capital and shareholders' deficit. Collectively, these conditions raise substantial doubt about the Company's ability to continue as a going concern. IDEARC INC: Was Solvent During 2006 Spinoff, 5th Circuit Says ------------------------------------------------------------- A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit upheld the district court's findings that Idearc Inc. was solvent at the time of its 2006 spin-off from parent Verizon Communication. In March 2009, in the throes of the recession that began in 2008, Idearc filed for bankruptcy protection pursuant to Chapter 11. The confirmed plan of reorganization created a litigation trust to pursue, inter alia, Idearc's fraudulent transfer claims against Verizon and related parties. The Trustee, U.S. Bank, National Association, filed a lawsuit against Verizon and two of its subsidiaries, GTE Corporation and Verizon Financial Services, L.L.C., and against former Idearc director John W. Diercksen, alleging various federal and state law claims in connection with the spin-off. U.S. Bank, as Trustee, requested a jury trial, but the district court struck the jury demand and bifurcated the trial into two phases. For the first phase, the district court held a ten-day bench trial on a single fact issue: the value of Idearc following the spin-off transaction. The district court found that Idearc was solvent on the date of the spin-off, and it ordered the Trustee to show cause as to why the district court should not enter judgment against the Trustee on all of its remaining claims. After the parties submitted briefing, the district court issued its conclusions of law and entered judgment against the Trustee. The Trustee appeals from the order striking the jury demand; evidentiary rulings before and during the trial; the findings of fact; the conclusions of law; and several pre-trial rulings on dispositive motions. "We find no reversible error in the district court's case management decisions, factual findings, and legal conclusions. Accordingly, we affirm the judgment of the district court," according to the Fifth Circuit in a ruling available at http://is.gd/MThoQjfrom Leagle.com. The case is, U.S. BANK NATIONAL ASSOCIATION, Litigation Trustee of the Idearc, Inc., et al, Litigation Trust, Plaintiff-Appellant, v. VERIZON COMMUNICATIONS, INCORPORATED; GTE CORPORATION; JOHN W. DIERCKSEN; VERIZON FINANCIAL SERVICES, L.L.C., Defendants- Appellees, No. 13-10752 (5th Cir.). About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. About SuperMedia SuperMedia Inc. and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to effectuate a merger of equals with Dex One Corp. SuperMedia disclosed total assets of $1.4 billion and total debt of $1.9 billion. Morgan Stanley & Co. LLC is acting as financial advisors to SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young Conaway Stargatt & Taylor, LLP are acting as its legal counsel. Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners Is acting as financial advisor to SuperMedia's board of directors. Epiq Systems serves as claims agent. IN PLAY MEMBERSHIP: Court Approves Stipulation With Meadow Ranch ---------------------------------------------------------------- In Play Membership Golf, Inc. entered into a Court-approved stipulation with Meadow Ranch Master Association to resolve the Association's claim against the bankruptcy estate. In June 2013, the Association filed a proof of claim relating to the maintenance of certain driving range barrier netting at a golf course owned by the Debtor. On June 19, 2013, the Association filed an amended proof of claim in which it asserted a claim for $157,620. On February 14, 2014, the Debtor initiated an adversary proceeding against the Association challenging the basis for the Association's proof of claim and objecting to the claim. The Parties subsequently reached a resolution as to the Association's proof of claim and all claims asserted in the Adversary Proceeding. About In Play Membership Golf In Play Membership Golf, Inc., owns and operates the Plum Creek Golf and Country Club and the Deer Creek Golf Club, two-18-hole golf courses, clubhouses, driving ranges and other amenities located in Castle Rock and Littleton, Colorado, respectively. In Play filed a Chapter 11 petition (Bankr. D. Col. Case No. 13- 14422) in Denver on March 22, 2013. Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C., and Patrick D. Vellone at Allen & Vellone, P.C., represent the Debtor in its restructuring effort. Allen & Vellone, P.C. serves as the Debtor's co-counsel. The Debtor estimated assets and liabilities of at least $10 million. Mile High Banks is the Debtor's largest secured creditor, asserting claims arising out of two promissory notes that aggregate in excess of $10 million. IN PLAY MEMBERSHIP: Fourth Amended Reorganization Plan Confirmed ---------------------------------------------------------------- Judge Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado confirmed In Play Membership Golf, Inc.'s Fourth Amended Plan of Reorganization dated March 7, 2014. The Court found that the Plan has been accepted by the creditors and interest holders and the standards for confirmation under Section 1129(b) of the Bankruptcy Code have been met. Judge Brown also determined that the proponent of the Plan complies with the applicable provisions of the Bankruptcy Code. Following confirmation of its Plan, the Debtor will remain in possession of its Assets and will administer its confirmed Chapter 11 Plan to repay creditors pursuant to the terms of the Plan. The Debtor's golf courses will be sold or refinanced until the Closing Date. Stacey A. Hart will remain as president of the Debtor and he will retain his sole ownership interest in the Debtor. He will receive a salary of $8,000 a month and his son, Tom Hart, who is not an owner, will receive $8,000 a month in compensation as well. As of the date of the filing of the bankruptcy petition, the Debtor's assets consist of real and personal property assets. The Real Property consists of the Deer Creek Golf Club and the Plum Creek Golf Club, which the Debtor values each at $2.5 million. About In Play Membership Golf In Play Membership Golf, Inc., owns and operates the Plum Creek Golf and Country Club and the Deer Creek Golf Club, two-18-hole golf courses, clubhouses, driving ranges and other amenities located in Castle Rock and Littleton, Colorado, respectively. In Play filed a Chapter 11 petition (Bankr. D. Col. Case No. 13- 14422) in Denver on March 22, 2013. Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C., and Patrick D. Vellone at Allen & Vellone, P.C., represent the Debtor in its restructuring effort. Allen & Vellone, P.C. serves as the Debtor's co-counsel. The Debtor estimated assets and liabilities of at least $10 million. Mile High Banks is the Debtor's largest secured creditor, asserting claims arising out of two promissory notes that aggregate in excess of $10 million. The Debtor's Fourth Amended Plan of Reorganization dated March 7, 2014, was approved on August 22, 2014. IN PLAY MEMBERSHIP: Mile High's Plan Objection Deemed Withdrawn --------------------------------------------------------------- First National Bank of Santa Fe, a national bank, formerly known as Mile High Banks, moved to withdraw its limited objection to In Play Membership Golf, Inc.'s Fourth Amended Plan of Reorganization. In its Limited Objection, Mile High noted that four preconditions for confirmation had not yet been satisfied. The Debtor has subsequently represented to Mile High that it is now in compliance. * * * The U.S. Bankruptcy Court for the District of Colorado deemed the Limited Objection withdrawn. About In Play Membership Golf In Play Membership Golf, Inc., owns and operates the Plum Creek Golf and Country Club and the Deer Creek Golf Club, two-18-hole golf courses, clubhouses, driving ranges and other amenities located in Castle Rock and Littleton, Colorado, respectively. In Play filed a Chapter 11 petition (Bankr. D. Col. Case No. 13- 14422) in Denver on March 22, 2013. Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C., and Patrick D. Vellone at Allen & Vellone, P.C., represent the Debtor in its restructuring effort. Allen & Vellone, P.C. serves as the Debtor's co-counsel. The Debtor estimated assets and liabilities of at least $10 million. Mile High Banks is the Debtor's largest secured creditor, asserting claims arising out of two promissory notes that aggregate in excess of $10 million. The Debtor's Fourth Amended Plan of Reorganization dated March 7, 2014, was confirmed on August 22, 2014. INTELLIGENT LIVING: Posts $2.02-Mil. Income in June 30 Quarter -------------------------------------------------------------- Intelligent Living Inc. filed its quarterly report on Form 10-Q, disclosing net income of $2.02 million on $379,073 of sales revenues for the three months ended June 30, 2014, compared to a net income of $9.81 million on $51 of sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $3.43 million in total assets, $5.01 million in total liabilities, and total stockholders' deficit of $1.57 million. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. During the six months ended June 30, 2014, the Company realized an operating loss of $3.02 million, and had a working capital deficit of $2.48 million as of June 30, 2014. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These facts raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/rCHvfD Intelligent Living Inc., formerly Feel Golf Co., Inc., is a developer of healthy aging software tracking systems and wellness centers, which will provide integrated services promoting optimal health and wellness programs. The services to be offered by the Company are personalized programs and regimens developed by nutritionists, fitness specialists and hormone replacement therapists. The Company focuses to offer the benefits of tailored nutritional programs and its products, combined with healthy-aging bio-identical hormone replacement therapies (BHRT). The Company provides services, such as Age Management Medicine, Excercise & Nutrition, MIND360.COM, Nutraceuticals, Hormone Therapy, and Business Solutions. In April 2014, the Company incorporated a subsidiary company called Provectus and, in doing so, has merged the assets of both Venturian Group of Miami and Perfect Solutions of Northfield, NJ into the subsidiary. IVANHOE ENERGY: Regains NASDAQ-Listing Compliance ------------------------------------------------- Ivanhoe Energy Inc. on Sept. 3 disclosed that it received notification from the NASDAQ Stock Market that it regained compliance with the minimum bid price rule for a NASDAQ listed issuer. The bid price of the Company's common stock closed at US$1.00 per share or greater for the required 10 consecutive business days from Aug. 18 to Aug. 29, 2014. Vancouver, Canada-based Ivanhoe Energy Inc. -- http://www.ivanhoeenergy.com/-- is an independent international heavy oil development and production company focused on pursuing long term growth in its reserves and production. Ivanhoe plans to utilize advanced technologies, such as its HTL(TM) technology, that are designed to improve recovery of heavy oil resources. In addition, the Company seeks to expand its reserve base and production through conventional exploration and production of oil and gas. J FAW: North Carolina Appeals Court Rules in Century Fire Dispute ----------------------------------------------------------------- Century Fire Protection, LLC appeals from the trial court's order awarding attorneys' fees pursuant to N.C. Gen. Stat. Sec. 44A-35 to the Curtis Neal Mauser Heirs, Stephen Mauser, and Betty Mauser Scipone. On June 17, 2014, the Court of Appeals of North California filed an opinion dismissing Plaintiff's appeal as having been taken from an unappealable interlocutory order, reasoning that the underlying order granting summary judgment in favor of the Mauser Defendants did not resolve the matter as to the remaining defendants. On July 18, 2014, Plaintiff filed a petition for rehearing pursuant to Rule 31 of the North Carolina Rules of Appellate Procedure. In its petition, Plaintiff argued that the Court had erred by dismissing the appeal because the order appealed from was, in fact, a final judgment. In conjunction with its petition for rehearing, Plaintiff sought to supplement the record with additional documentation showing the resolution of its claims against defendants Nadean M. Yoder ("Yoder"), J.C. Faw ("Faw"), and Melvin Howell d/b/a "Club Miami" ("Howell"). "Based on our review of Plaintiff's petition for rehearing and the exhibits attached thereto, we are now satisfied that the trial court's order granting attorneys' fees to the Mauser Defendants was not interlocutory. As such, we have granted the petition (1) to supplement the record; and (2) to rehear this matter for the purpose of addressing the merits of Plaintiff's appeal. After careful review, we affirm," the Appeals Court said in a Sept. 2 decision available at http://is.gd/5TZcarfrom Leagle.com. The case is, CENTURY FIRE PROTECTION, LLC, Plaintiff, v. CURTIS NEAL MAUSER HEIRS; STEPHEN MAUSER; BETTY MAUSER SCIPONE; NADEAN M. YODER; J.C. FAW; and MELVIN HOWELL, d/b/a "Club Miami" Defendants, No. COA14-146-2 (N.C. App.). J.C. Faw filed for Chapter 11 bankruptcy (Bankr. M.D.N.C. Case No. 12-50970) on July 6, 2012. JAMES RIVER COAL: Completes Sale of Mining Assets to Blackhawk -------------------------------------------------------------- James River Coal Company on August 29, 2014, completed the sale of their Hazard (excluding Laurel Mountain), West Virginia and Indiana assets to Blackhawk Mining LLC pursuant to an amended sale agreement. The consideration for the Assets was $52.0 million, consisting of (i) $20.0 million in cash paid to the Sellers, (ii) a third lien secured promissory note in the amount of $27.0 million delivered to the Sellers, and (iii) a second lien secured promissory note in the amount of $5.0 million delivered to one of the Sellers' lessors, in lieu of a cash payment of cure costs under certain leases to be assumed by the Sellers and assigned to Blackhawk in connection with the sale. On August 28, 2014, the Bankruptcy Court entered an Order approving the sale. The sale agreement is with JR Acquisition, LLC, a wholly owned subsidiary of Blackhawk. A copy of the parties' Second Amendment Agreement dated August 28, 2014, is available at http://is.gd/dGxwrc About James River James River Coal Company is a producer and marketer of coal in the Central Appalachia ("CAPP") and the Midwest coal regions of the United States. James River's principal business is the mining, preparation and sale of metallurgical coal, thermal coal (which is also known as steam coal) and specialty coal. James River and 33 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in Richmond, Virginia, on April 7, 2014. The petitions were signed by Peter T. Socha as president and chief executive officer. Judge Kevin R. Huennekens oversees the Chapter 11 cases. On the petition date, James River Coal disclosed total assets of $1.06 billion and total liabilities of $818.6 million. The Debtors are represented by Tyler P. Brown, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq. at Hunton & Williams LLP of Richmond, VA and Marwill S. Huebner, Esq, Brian M. Resnick, Esq., and Michelle M. McGreal, Esq. at Davis Polk & Wardwell LLP of New York, NY. Kilpatrick Townsend & Stockton LLP serves as the Debtors' special counsel. Perella Weinberg Partners L.P. is the Debtors' financial advisor. Deutsche Bank Securities Inc. serves as the Debtors' investment banker and M&G advisor. Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice, claims and administrative agent. The U.S. Trustee for Region 4 has appointed five creditors to the Official Committee of Unsecured Creditors. Michael S. Stamer, Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq., Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at LeClairRyan. * * * The Debtors have won authority to sell the Hampden Mining Complex (including the assets of Logan & Kanawha Coal Company, LLC), the Hazard Mining Complex (other than the assets of Laurel Mountain Resources LLC) and the Triad Mining Complex for $52 million plus the assumption of certain environmental and other liabilities, to a unit of Blackhawk Mining. The Buyer is represented by Mitchell A. Seider, Esq., and Charles E. Carpenter, Esq., at Latham & Watkins LLP. JAMES RIVER COAL: Murphy Named to Board; CEO Socha Steps Down ------------------------------------------------------------- The board of directors of James River Coal Company elected Byron Advisors, LLC's William B. Murphy to the Board on August 28, 2014. He will serve in that capacity until his successor shall have been duly elected or until he shall sooner resign, die or is otherwise disqualified from serving in such capacity. For his service on the Board, Mr. Murphy will receive no additional compensation other than as set forth for his service as the Debtors' chief restructuring officer. Effective with the closing of the sale of the Debtors' Assets to Blackhawk Mining LLC on August 29, Peter T. Socha resigned as Chairman of the Board and Chief Executive Officer. Mr. Socha's resignation is not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Also effective with the closing of the sale to Blackhawk, Alan F. Crown, Ronald J. FlorJancic, Leonard J. Kujawa and Joseph H. Vipperman each resigned from the Board. Each director's resignation is not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. On July 31, 2014, the Company entered into a Consulting Services Agreement with Byron Advisors, LLC to retain, subject to the approval of the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division), Mr. Murphy, 59, as its CRO. On August 28, 2014, the Court approved the Company's retention of Mr. Murphy as CRO. A copy of the Agreement is available at http://is.gd/HlJwyg From June 2012 to the present, Mr. Murphy has been employed by Byron Advisors, which places him in various consulting roles. Through Byron Advisors, Mr. Murphy recently served as the Interim Chief Financial Officer at Fedcap Rehabilitation Services, Inc., a provider of workforce solutions, homecare, out-patient mental health and health screening services, and as the Chief Restructuring Officer at Southern Air Inc., a provider of air cargo services with $275 million in annual revenue, which successfully exited Chapter 11 bankruptcy proceedings. From August 2011 to May 2012, Mr. Murphy was Vice President, Operational Controls & Process Efficiencies at Volt Information Sciences Inc., a staffing services company. From June 1996 to July 2011, Mr. Murphy was a Senior Director with Zolfo Cooper LLC, a leading independent provider of restructuring, financial, and corporate advisory solutions. Mr. Murphy served as the interim chief financial officer for a $2.3 billion grocery retailer, provided restructuring consulting services to a $4 billion auto parts manufacturer, and an $18 billion integrated oil company, among others. From July 1981 through May 1996, Mr. Murphy was employed by Ernst & Young serving in the Audit Services Group and Financial Advisory Services Group where he served as a partner from 1992 through 1996. Mr. Murphy holds Certified Public Accountant and Certified Insolvency and Reorganization Advisor accreditations and received his Bachelor of Science - Accounting from Lehigh University. Pursuant to the Consulting Agreement, Mr. Murphy will serve as CRO until the earlier of the tenth business day following the confirmation of a chapter 11 plan or, the first business day following written notice of termination of the Consulting Agreement. Pursuant to the Consulting Agreement, the Company will pay to Byron Advisors a monthly fee of $60,000.00 for Mr. Murphy's services through January 31, 2015. Thereafter, the monthly fee will be reduced to $30,000 for each month in which Mr. Murphy provides his services to the Company. The Company has also agreed to reimburse Mr. Murphy for all reasonable and necessary out-of- pocket expenses incurred by Mr. Murphy in performance of the services. In addition, Mr. Murphy shall earn transaction fees equal to (a) $150,0000 upon the repayment in full in cash of the Company's postpetition financing facility (which fee shall be reduced by $50,000 per month for each month after November 30, 2014), and (b) 5% of average recoveries of general unsecured creditors (prior to dilution for this fee), subject to a minimum of $250,000 (provided that general unsecured creditors receive at least $250,000, in the aggregate) and a maximum of $750,000, payable upon the effectiveness of a chapter 11 plan. About James River James River Coal Company is a producer and marketer of coal in the Central Appalachia ("CAPP") and the Midwest coal regions of the United States. James River's principal business is the mining, preparation and sale of metallurgical coal, thermal coal (which is also known as steam coal) and specialty coal. James River and 33 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in Richmond, Virginia, on April 7, 2014. The petitions were signed by Peter T. Socha as president and chief executive officer. Judge Kevin R. Huennekens oversees the Chapter 11 cases. On the petition date, James River Coal disclosed total assets of $1.06 billion and total liabilities of $818.6 million. The Debtors are represented by Tyler P. Brown, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq. at Hunton & Williams LLP of Richmond, VA and Marwill S. Huebner, Esq, Brian M. Resnick, Esq., and Michelle M. McGreal, Esq. at Davis Polk & Wardwell LLP of New York, NY. Kilpatrick Townsend & Stockton LLP serves as the Debtors' special counsel. Perella Weinberg Partners L.P. is the Debtors' financial advisor. Deutsche Bank Securities Inc. serves as the Debtors' investment banker and M&G advisor. Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice, claims and administrative agent. The U.S. Trustee for Region 4 has appointed five creditors to the Official Committee of Unsecured Creditors. Michael S. Stamer, Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq., Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at LeClairRyan. * * * The Debtors have won authority to sell the Hampden Mining Complex (including the assets of Logan & Kanawha Coal Company, LLC), the Hazard Mining Complex (other than the assets of Laurel Mountain Resources LLC) and the Triad Mining Complex for $52 million plus the assumption of certain environmental and other liabilities, to a unit of Blackhawk Mining. The Buyer is represented by Mitchell A. Seider, Esq., and Charles E. Carpenter, Esq., at Latham & Watkins LLP. JEH COMPANY: Amended Chapter 11 Plan Declared Effective in July --------------------------------------------------------------- JEH Company and its debtor-affiliates notified the U.S. Bankruptcy Court for the Northern District of Texas that their amended Chapter 11 plan of reorganization became effective July 8, 2014. The Court confirmed the Debtors' Amended Plan on June 23, 2014. Plan Summary and Outline As reported by the Troubled Company Reporter, the Debtors filed on April 16 an amended version of their proposed Chapter 11 plan and disclosure statement. The Plan, as amended, proposes to treat secured creditors as follows: * In the event Bridgewell Resources, LLC, G.A.P. Roofing, Inc., and Worthington National Bank each does not agree in writing that its claim will be treated as an unsecured claim, then an adversary proceeding will be filed against the claimant. The secured claim of Bridgewell and G.A.P., to the extent allowed, will be paid in full with interest at a rate of 5% from the effective date of the Plan through the date of the payment. The secured claims of Worthington will be satisfied in full by the surrender of collateral. * The secured claims of Frost Bank are not disputed, unliquidated or contingent as of the time of the filing of this document. The secured claims continue to accrue interest and potentially fees. Until Frost Bank is paid, it will retain all liens against collateral pledged to it. The remaining secured claim of Frost Bank against JEHCO under its lease 1001 will be paid in the amount of $14,200.00, subject to a reduction of the amount of any additional adequate protection payments made prior to the Effective Date plus any additional fees, expenses, and costs owed. The remaining secured claims of Frost Bank against JEHCO include the secured claims described against JEH Leasing and JEH Stallion. Subject to court approval, Leasing may seek authority to sell equipment described as the Trex lift and other property. * The secured claim of Wells Fargo and all claims of Wells Fargo will be considered fully paid and satisfied by the prior sale and/or surrender to Wells Fargo by the 30th day following the Effective Date, except as otherwise agreed to by that party. To pay off general unsecured creditors, the Debtors will liquidate all assets of the estates of JEHCO and JEH Leasing Company with specific direction to emphasize a market return for collection or sale of accounts receivable, equipment and real property assets. The first payment to each creditor will be due and owing beginning on the 60th day of the Effective Date and then due and owing when for any period of 60 days cash proceeds of the liquidation of assets exceed by $100,000 the secured claims against the proceeds, and a reserve equal to the next three months budget for expenses. If at any time when the remaining assets of JEHCO are believed to have a value of $100,000 or less, then the debtor will promptly liquidate all remaining assets and dispersed the remaining proceeds to unsecured creditors. The equity interest holders will receive no payments for any equity interests at any time. Copies of the Plan and Disclosure Statement, as amended on April 16, 2014, are available for free at http://bankrupt.com/misc/JEH_Co_Amended_Plan.pdf http://bankrupt.com/misc/JEH_Co_Amended_DS.pdf About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities. KEMET CORP: Unit Amends Option Agreement With NEC Corp. ------------------------------------------------------- KEMET Corporation's wholly owned subsidiary, KEMET Electronics Corporation, and NEC Corporation have entered into an amendment to the parties' March 12, 2012, Option Agreement. "This Amendment provides KEMET with additional flexibility in managing our capital structure," stated Per Loof, chief executive officer of KEMET. "It allows us greater opportunity to benefit from improving economic conditions and the improved financial performance by KEMET while maintaining our options to increase our investment in NEC TOKIN." The Amendment extends the date by which KEC can exercise its first option to purchase additional shares of common stock of NEC TOKIN Corporation until April 30, 2015, and also extends the beginning date by which KEC can exercise its second option to purchase all of the outstanding shares of NEC TOKIN common stock. The amendment also delays the date when NEC can require KEC to purchase all of the outstanding shares of NEC TOKIN common stock by a minimum of eight months until April 1, 2015, and in the event that KEMET issues new debt securities to refinance its outstanding 10 1/2% senior notes due 2018 prior to NEC's delivery of its notification to exercise the Put Option, then the earliest date on which NEC may exercise the Put Option is further extended beyond the scheduled maturity date or redemption in full of such new debt securities, but in any event not beyond Nov. 1, 2019. In that event, the Put Option will expire on Oct. 31, 2023. Additional provisions of this amendment specify the date by which NEC's indemnification obligations under the Option Agreement expire; extend until May 1, 2015, the earliest date that NEC may convert a portion of its existing NEC TOKIN preferred stock into NEC TOKIN common stock; and require KEC to permit the repayment by NEC TOKIN to NEC on April 30, 2015, of at least 2 billion Japanese yen of the currently outstanding amount of 25.5 billion Japanese yen of the debt obligation NEC TOKIN owes to NEC. A copy of the Amendment No. 1 to Option Agreement, dated as of Aug. 29, 2014, between KEMET Electronics Corporation and NEC Corporation is available for free at http://is.gd/XIcPpv About KEMET KEMET, based in Greenville, South Carolina, is a manufacturer and supplier of passive electronic components, specializing in tantalum, multilayer ceramic, film, solid aluminum, electrolytic, and paper capacitors. KEMET's common stock is listed on the NYSE under the symbol "KEM." The Company's balance sheet at June 30, 2014, showed $838.64 million in total assets, $620.39 million in total liabilities and $218.25 million in total stockholders' equity. * * * As reported by the TCR on March 26, 2013, Moody's Investors Service downgraded KEMET Corp.'s Corporate Family Rating to Caa1 from B2 and the Probability of Default Rating to Caa1-PD from B2- PD based on Moody's expectation that KEMET's liquidity will be pressured by maturing liabilities and negative free cash flow due to the interest burden and continued operating losses at the Film and Electrolytic segment. As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Simpsonville, S.C.-based KEMET Corp. to 'B-' from 'B+'. "The downgrade is based on continued top-line and margin pressures and lagging results from the restructuring of the Film & Electrolytic [F&E] business, which combined with cyclical weak end-market demand, has resulted in sustained, elevated leverage well in excess of 5x, persistent negative FOCF, and diminishing liquidity," said Standard & Poor's credit analyst Alfred Bonfantini. The TCR reported in August 2014 that Standard & Poor's Ratings Services revised its outlook on Greenville, S.C.-based capacitor supplier KEMET Corp. to stable from negative. S&P affirmed the ratings, including the 'B-' corporate credit rating. KOGETO INC: Reports $308K Net Loss for Second Quarter ----------------------------------------------------- Kogeto Inc. filed its quarterly report on Form 10-Q, disclosing a net loss attributable to common stockholders of $308,828 on $7,272 of net sales for the three months ended June 30, 2014, compared with a net loss attributable to common stockholders of $356,672 on $47,398 of net sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.17 million in total assets, $1.75 million in total liabilities and a stockholders' deficit of $576,041. The Company incurred significant net losses and negative cash flow from operations since its inception. It incurred net losses of $1.8 million and $1.31 million for the six months ended June 30, 2014 and for the year ended Dec. 31, 2013, respectively, and had an accumulated deficit of $6.97 million as of June 30, 2014. In order to reach the Company's business growth objectives, it expects to incur significant sales, marketing, product development and other operating and capital costs, including costs associated with the expansion of its personnel and facilities. As a result, the Company will need to generate and grow its revenues significantly to achieve positive cash flow and profitability. There can be no assurance that it will be successful in generating and increasing its revenues or that it can achieve or maintain positive cash flow or profitability. The uncertainties regarding the commencement of adequate commercial revenues raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/ldSmR7 Kogeto, Inc., formerly Northeast Automotive Holdings, Inc., is a wholesale automobile sales company exploiting the inefficiencies and geographic differences in the used vehicle market by purchasing high quality, late model used vehicles from dealers and institutional sellers in Northeastern states and transporting the vehicles for resale in the Pacific Northwest. It is involved only in the wholesale purchase and sale of vehicles acting as a middleman between various dealer and institutional sellers and dealer purchasers. The Company generally sells vehicles only through established third-party auctions, which act as a marketplace for used vehicles. KEYUAN PETROCHEMICALS: Has $1.02-Mil. Loss in June 30 Quarter ------------------------------------------------------------- Keyuan Petrochemicals, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.02 million on $184.54 million of sales for the three months ended June 30, 2014, compared with a net loss of $497,000 on $94.26 million of sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.04 billion in total assets, $951.62 million in total liabilities, series B convertible preferred stock of $16.87 million and stockholders' equity of $69.01 million. The Company reported a net loss and cash flows provided by operations of $3.8 million and $15 million, respectively, for the six months ended June 30, 2014 and net income and cash flows used in operations of $4.1 million and $53.1 million, respectively, for the year ended Dec. 31, 2013. At June 30, 2014 and Dec. 31, 2013, the Company had a working capital deficit of approximately $236 million and $210 million, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/IVgZFx Keyuan Petrochemicals, Inc. (Keyuan) through its operating subsidiaries, Ningbo Keyuan and Ningbo Keyuan Petrochemicals, are engaged in the manufacture and sale of petrochemical and rubber products in the People's Republic China. The Company's operations include production facility with an annual petrochemical production capacity of 720,000 metric tons of a variety of petrochemical products, and facilities for the storage and loading of raw materials and finished goods. It manufactures and supply's petrochemical products, including BenzeneToluene-Xylene Aromatics (BTX Aromatics), propylene, styrene, liquid petroleum gas (LPG), Methyl Tertiary Butyl Ether (MTBE), Styrene butadiene styrene (SBS), and other petrochemicals. Its BTX Aromatics consists of benzene, toluene, xylene and other chemical components used for further processing into plastics, gasoline and solvent materials used in paint, ink, construction coating and pesticide. KORLEY B. SEARS: Court Grants Summary Judgment to Trust et al. -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nebraska granted the motion for summary judgment by claimants Rhett R. Sears, Rhett R. Sears Revocable Trust, Ronald H. Sears, Ronald H. Sears Trust, and Dane Sears over the objection of debtor Korley B. Sears. The claimants are members of the debtor's family, and who sold their interests in AFY, Inc., a company that operated a cattle feedyard, to the corporation and to Korley Sears in 2007 in exchange for promissory notes from Korley and a security interest in the shares. In 2010, AFY and Korley each filed for bankruptcy protection. The claimants filed proofs of claim for more than $5.3 million in AFY's bankruptcy case for the amounts owed to them for the sale of their stock. AFY's two shareholders, Korley and Robert Sears, objected to the claims, arguing that only Korley and not AFY was liable for the debt. After a hearing on affidavit evidence, the claim objections were overruled. The court found that the contract for the sale of the claimants' interest clearly and unambiguously showed that both AFY and Korley were the purchasers. The claimants' proof of claim was entitled to prima facie validity, and no evidence was presented to challenge either AFY's liability on the debt or the amount of the claims. There also was no evidence to support Robert and Korley's theory that the claimants had breached the contract, thereby excusing AFY's performance and liability. On appeal, the Bankruptcy Appellate Panel affirmed the decision of the bankruptcy court, holding that AFY was liable for the debt under the unambiguous terms of the stock sale contract, the amount of the debt was undisputed, and Robert and Korley's defenses were unavailing. Sears v. Sears (In re AFY, Inc.), 463 B.R. 483 (B.A.P. 8th Cir. 2012). Robert and Korley then appealed to the Eighth Circuit, which dismissed the appeal without reaching the merits after finding that neither of them had standing to appeal because they held, at most, only a derivative interest and were not "persons aggrieved" as they would not be directly and adversely affected pecuniarily by the bankruptcy court's order. Sears v. Sears (In re AFY, Inc.), 733 F.3d 791 (8th Cir. 2013). The rulings left intact the substance of the underlying bankruptcy court orders. The claimants filed similar proofs of claim in Korley's bankruptcy case. Korley has objected to them. After a hearing on the objection, the court determined that the matter should be set for trial and ordered the parties to prepare a joint preliminary pretrial statement. Thereafter, the claimants filed this motion for summary judgment to allow their claims. In opposition to the motion for summary judgment, Korley argues that he has meritorious defenses to the allowance of the claims that should not be precluded by the decision allowing the claims in the AFY case. In addition to asserting that he is not estopped from pursuing many of the same arguments from the AFY case in this case, he also takes the position that the stock sale agreement and promissory notes constitute a single executory contract which he has not rejected, so the claimants are not creditors, and the Bankruptcy Code permits him to pursue alleged post-petition breaches of contract as defenses to claims based on that contract. According to the Court, Korley now engages in "some creative obfuscation to try to avoid his liability for those debts, but he has raised no genuine issues of material fact as to that liability or the amounts owed. Summary judgment is hereby granted to the claimants." A copy of the Court's August 29, 2014 Order is available at http://is.gd/JBXOpcfrom Leagle.com. About Korley Sears Ainsworth, Nebraska-based Korley B. Sears filed for Chapter 11 bankruptcy protection (Bankr. D. Neb. Case No. 10-40277) on Feb. 2, 2010. Jerrold L. Strasheim, Esq., in Omaha, Nebraska, assisted Mr. Sears in his restructuring effort. The Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. LATITUDE 360: Reports $2.39-Mil. Net Loss in Second Quarter ----------------------------------------------------------- Latitude 360, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $2.39 million on $1.43 million of net sales for the three months ended June 30, 2014, compared with a net loss of $6,660 on $38,433 of net sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $52.5 million in total assets, $65.8 million in total liabilities, and a stockholders' deficit of $13.3 million. The Company has incurred significant losses since inception. These factors, among others, raise substantial doubt about its ability to continue to operate as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/VHtJZt Latitude 360, Inc., is a casual dining and entertainment venue operator. It develops, constructs, and operates restaurant/entertainment venues. The company's restaurant/entertainment venues feature a grille and bar; luxury bowling lanes; a dine-in movie theater with home theater-style seating; a dine-in live performance theater; a HD sports theater; a bar with a dance floor and stage for the DJ/VJs and regional bands on weekends; a luxury boutique cigar lounge; and an interactive game room. It operates restaurant/entertainment venues in Jacksonville, Florida; Pittsburgh, Pennsylvania; and Indianapolis, Indiana to serve consumers and corporate clients. The company was formerly known as Latitude Global, Inc. and changed its name to Latitude 360, Inc. in January 2014. The company was founded in 2009 and is based in Jacksonville, Florida. Latitude 360, Inc. operates as a subsidiary of The Brownstone Group LLC. LDR INDUSTRIES: Files for Bankruptcy in Chicago ----------------------------------------------- LDR Industries, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-32138) in Chicago, Illinois on Sept. 2, 2014. The case is assigned to Honorable Judge Pamela S. Hollis. The Chicago-based company estimated $10 million to $50 million in assets and debt. The Debtor is represented by attorneys at Reed Smith LLP. LE-NATURE INC: Trustee Cuts Another Deal Over Negligence Claims --------------------------------------------------------------- Law360 reported that Le-Nature's Inc. has agreed to settle a dispute with Pittsburgh-based Pascarella & Wiker LLP over claims that the accountants' negligence contributed to the company's bankruptcy, likely ending litigation that has already led to a $24 million settlement with K&L Gates LLP. According to the report, Le-Nature's trustee, Marc S. Kirschner, asked a Pennsylvania bankruptcy judge to approve the settlement of $895,000, to be paid by Pascarella & Wiker's insurer. He had initially sought $500 million. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- made bottled waters, teas, juices and nutritional drinks. Its brands included Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. On Oct. 27, 2006, the Delaware Chancery Court appointed Kroll Zolfo Cooper, Inc., as custodian of Le-Nature's, placing it in charge of management and operations. Within several days, Kroll uncovered massive fraud at Le-Nature's. On Nov. 1, 2006, Steven G. Panagos, a Kroll managing director, filed an affidavit with the Delaware Chancery Court setting forth the evidence of the financial fraud he had discovered at Le-Nature's. Four unsecured creditors of Le-Nature's filed an involuntary Chapter 7 petition against the Company (Bankr. W.D. Pa. Case No. 06-25454) on Nov. 1, 2006. Kroll converted the proceedings from Chapter 7 to Chapter 11. On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The Debtors' cases were jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represented the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represented the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represented the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas, represented the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represented the Ad Hoc Committee of Senior Subordinated Noteholders. On July 8, 2008, the Bankruptcy Court issued an order confirming the liquidation plan for Le-Nature's. LINN ENERGY: Moody's Rates New $1BB Senior Unsecured Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Linn Energy, LLC's (LINE) proposed $1 billion senior unsecured notes, being co- issued by Linn Energy Finance Corp. The Corporate Family Rating (CFR) of Ba3 and other ratings of LINE are unaffected, and the rating outlook is stable. The proceeds from the proposed notes offering will be used to repay a portion of interim bridge debt financing that was used to fund LINE's $2.24 billion acquisition of certain natural gas-based assets from Devon Energy Corporation (Devon, Baa1 stable), which closed August 29, 2014. The remaining portion of the Devon asset acquisition will ultimately be funded with the planned asset sale proceeds in the Granite Wash and Cleveland plays located in the Texas Panhandle and western Oklahoma. Any excess proceeds from the anticipated sale are expected to repay debt under the revolving credit facility. "LINE's Ba3 CFR and stable rating outlook assume that the company will execute on its pending asset sales in order to reduce rising financial leverage trends," commented Gretchen French, Moody's Vice President. Rating assignments for Linn Energy, LLC: $1 Billion Senior Unsecured Notes, Rated B1 (LGD 5) Moody's current ratings for Linn Energy, LLC are: Corporate Family Rating of Ba3 Probability of Default Rating of Ba3-PD Senior Unsecured Notes, Rated B1 (LGD 5) Speculative Grade Liquidity rating of SGL-3 Ratings Rationale LINE's senior unsecured notes are rated B1, one notch below the Ba3 CFR, reflecting the contractual subordination of the notes relative to the company's secured bank credit facility. LINE has access to a $4.0 billion committed bank credit facility with a $4.25 billion borrowing base (reduced from $4.5 billion due to the proposed note issuance) that supports both the credit facility and also a $500 million senior secured term loan facility. Both the revolver and term loan are scheduled to mature in April 2019 and are secured by substantially all of its oil and gas properties. LINE's Ba3 CFR reflects its large reserve base and production scale across a diverse set of basins. The company's size and scale in terms of reserves, production and basin diversification is similar to Baa rated peers. However, the Ba3 CFR is restrained by LINE's high financial leverage profile, which is indicative of the Ca and Caa rating categories, including high debt per average daily production and per proved developed (PD) reserves. The Ba3 CFR also incorporates LINE's high level of distribution payout and the structural risks inherent in the MLP corporate finance model characterized by an 'acquire and exploit' growth strategy focused on maintaining production volumes in low-risk, legacy fields, while growing cash distributions paid out to unit holders. These ongoing distributions against a depleting reserve base result in the reliance on acquisitions and organic development opportunities to grow the business, and a reliance on the capital markets in order to finance this growth. Through several acquisitions and transactions over the past year, LINE has been undertaking a strategic effort to reposition its asset portfolio to developing mature, longer-lived assets and reducing its capital intensity and overall decline rate. While this strategy has resulted in considerably larger scale and is complementary to its MLP corporate finance model, it has entailed a high level of portfolio transformation and has resulted in rising debt levels. Moody's estimates pro forma production levels at roughly 253,000 barrels of oil equivalent (BOE) per day before the planned sale of its Granite Wash assets, resulting in leverage on production of about $48,000/BOE, which is high for the Ba3 CFR. However, assuming successful execution of LINE's asset sale program, Moody's estimates that LINE's debt/production should fall. The SGL-3 Speculative Grade Liquidity Rating reflects LINE's adequate liquidity profile. LINE has a $4 billion revolving credit facility due April 2019, with a borrowing base of $4.25 billion, and availability of $1.5 billion at June 30, 2014 pro forma for the proposed note issuance. LINE has leverage and liquidity covenants, both of which have adequate headroom. Pro forma for the proposed $1 billion bond issuance, the company will have remaining interim financing of a $1.3 billion term loan that was utilized to bridge finance the Devon asset acquisition. This $1.3 billion term loan has a one-year maturity and is secured specifically by the Devon assets acquired by LINE. The outlook is stable, based on the assumption that the company executes its planned asset sales in order to reverse rising leverage metrics, while furthering the objectives of extending its reserve life and reducing the production decline rate of its overall portfolio. To move the rating up, LINE would need debt/average daily production to approach $30,000/ BOE and leverage on PD reserves to approach $10/BOE. The leveraged full cycle ratio (LFCR) would need to be sustained above 2.0x to allow adequate returns on capital to support distributions and access to capital markets. Additional debt financed acquisitions that increase debt/average daily production above $50,000/BOE or debt/PD reserves exceeding $13/BOE for a sustained period could precipitate a downgrade. Weaker LFCR levels could also lead to a downgrade. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. Linn Energy, LLC, is an exploration and production company based in Houston, Texas. LINN ENERGY: S&P Lowers Rating on Sr. Unsecured Debt to 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating on Linn Energy LLC's senior unsecured debt to 'B' from 'B+' and removed the rating from CreditWatch, where S&P placed it with negative implications on July 1, 2014, following its announcement to purchase certain oil and gas assets from Devon Energy Corp. and its intention to sell its assets in the Granite Wash. S&P has also revised its recovery rating on the unsecured debt to '6' from '5'. The '6' recovery rating reflects S&P's expectation for a negligible (0% to 10%) recovery for unsecured creditors in the event of a payment default. In addition, S&P has assigned its 'B' rating to Linn's proposed $1 billion senior notes, with a recovery rating of '6'. Proceeds from the notes will be used to repay certain indebtedness relating to the purchase of assets from Devon. The lowering of S&P's issue level ratings on the company's unsecured notes results from lower recovery expectations on the debt on account of the increase in the level of senior unsecured debt claims. S&P uses a company-provided valuation of its reserves, pro forma for the acquisitions and the company's planned sale of its Granite Wash assets, computed at S&P's recovery price deck assumptions. S&P notes that senior unsecured ratings would not be affected by a delay or cancellation of the Granite Wash sale. The recovery and issue-level ratings for the senior unsecured debt at Berry Petroleum Co. LLC, Linn's unrestricted subsidiary, remain unchanged. The unsecured debt at Berry benefits from the value of the reserves owned by Berry, after accounting for potential claims relating to the Berry credit facility. The 'BB-' corporate credit ratings and stable outlooks on Linn and its wholly owned subsidiary Berry are unaffected. The 'BB-' corporate credit rating and stable outlook on Linn and Berry reflect S&P's view that the Devon acquisition and proposed sale of Granite Wash assets will not significantly affect credit quality. Linn's planned sale of the capital intensive Granite Wash assets, to be replaced with the lower decline and less capital intensive Devon assets, is modestly favorable for credit quality and more consistent with Linn's master limited partnership-like operating strategy. Ratings List Linn Energy LLC Corporate Credit Rating BB-/Stable/-- Downgraded; Recovery Rating Revised To From Linn Energy LLC Linn Energy Finance Corp. Senior Unsecured B B+ Recovery Rating 6 5 New Rating Linn Energy LLC Linn Energy Finance Corp. $1 bil sr notes B Recovery Rating 6 LOVE CULTURE: Files Schedules of Assets and Liabilities ------------------------------------------------------- Love Culture Inc. has filed with the U.S. Bankruptcy Court for the District of New Jersey its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $90,198,494 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,178,660 E. Creditors Holding Unsecured Priority Claims $1,474,957 F. Creditors Holding Unsecured Non-priority Claims $47,393,949 ------------ ------------ TOTAL $90,198,494 $63,047,567 A copy of the schedules is available for free at: http://bankrupt.com/misc/LOVECULTURE_SAL_081914.pdf Love Culture Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 14-24508) on July 16, 2014. J.E. Rick Bunka signed the petition as chief restructuring officer. The Debtor estimated assets of $10 million to $50 million and liabilities of at least $10 million. Judge Novalyn L. Winfield presides over the case. Lowenstein Sander LLP acts as the Debtor's counsel. PricewaterhouseCoopers LLP serves as the Debtor's financial advisor. Epiq Systems is the Debtor's claims and noticing agent. Consensus Advisory Service LLC and Consensus Securities LLC is the Debtor's investment banker. MACKEYSER HOLDINGS: 3-Member Creditors Committee Formed ------------------------------------------------------- The U.S. Trustee for Region 3 appointed three creditors of MacKeyser Holdings, LLC to serve on the official committee of unsecured creditors: (1) Steven T. Olkowski, M.D. Attn: Steven T. Olkowski Apple Hill Eye Center 25 Monument Road, Suite 297 York, PA 17403 Phone: (717) 741-6732 Fax: (717) 741-6058 (2) Exela, LLC c/o Stephen McCormack 746 Gettysburg Circle Claremont, CA 91711 Phone: (818) 640-3434 (3) Oakley Sales Corp. Attn: Yvette Maxwell One Icon Foothill Ranch, CA, 92610 Phone: (949) 829-6308 Fax: (949) 699-3587 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 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. MASON COPPELL: Creditors Committee Submits Plan of Liquidation -------------------------------------------------------------- The Official Committee of Unsecured Creditors filed with the United States Bankruptcy Court for the Northern District of Texas its Plan of Liquidation and accompanying Disclosure Statement dated August 29, 2014, for the bankruptcy cases of Mason Coppell OP, LLC; Mason Friendswood OP, LLC; Mason Georgetown OP, LLC; Mason Mesquite OP, LLC; and Mason Round Rock OP, LLC. During the administration of the bankruptcy cases, the Court approved transactions authorizing the Debtors to sell substantially all their operating assets. The remaining estate assets comprise cash from those transactions, some cash from collection of accounts receivable, uncollected accounts receivable and potential causes of action against insiders, former management companies, third-party vendors and recipients of pre-petition payments. Under the Plan, the Creditors Committee proposes to administer the bankruptcy assets through a Liquidating Trust and appoint a Liquidating Trustee to, among other things, (i) allocate the sale proceeds; (ii) pay all secured claims, administrative expenses and priority claims; (iii) liquidate all remaining assets, converting the assets to cash; and (iv) distribute the cash to unsecured creditors pursuant to the terms of the Plan. Secured claims of Oxford Finance LLC will only be paid out of the assets of the Debtors obligated to Oxford Finance LLC. Mason Mesquite's estate will pay 20% of the Chapter 11 Administrative Claims incurred during the administration of the Bankruptcy Cases and 100% of any tax, secured or other priority claims asserted against its estate. The remaining cash will be allocated to a Liquidation Reserve established for the Oxford Debtors (the "Oxford Debtor Reserve" as defined in the Plan) and used to pay the Oxford Secured Claim, the remaining 80% of the Chapter 11 Administrative Claims, and all other tax, secured or priority claims asserted against the Oxford Debtors. To ensure a fair balancing of the Oxford Debtors' assets, the Plan uses a formula to divide the remaining cash among the Oxford Debtors. Creditors will also have the opportunity to participate in future litigation of estate causes of action. The Plan gives the unsecured creditors an option to "opt in" or "opt out" of future litigation. The Creditors Committee believes this opt-in/opt-out approach gives creditors the flexibility to decide how best to use the available funds -- distribute them faster, or hold some back in an effort to maximum recoveries through litigation. Based on these proposed allocations and divisions, the Creditors Committee anticipates that general unsecured creditors of each estate will receive distributions of 14% to 17% for creditors of the Oxford Debtors, or approximately 25% for creditors of Mason Mesquite. Classes and Proposed Treatment The Plan has five main classes, but the Plan does not seek to consolidate the Debtors' cases for distribution. If Creditors have claims against multiple debtors, they will be able to submit a ballot in each case where they assert a claim. The actual distributions may vary from Debtor to Debtor because each Debtor has a different creditor body, different amounts of collectible Accounts Receivable, and different net sale proceeds. Class 1 - Oxford Secured Claims will be recovered 100% in the approximate amount of $1.7 million or less. Class 2 - Secured Tax Claims, Class 3 - Priority Non-Tax Claims and Class 4 - Other Secured Claims will also be recovered in full. Creditors holding Class 5 - General Unsecured Claims will recover around 14% - 25% of their claims, depending on estate. There approximately 100 - 150 Class 5 Claim Holders per estate. The six holders of Equity Interests will not recover anything and the Class is deemed to reject the Plan. All Equity Interests in the Debtors will be cancelled as of the Effective Date. Vesting of Assets The assets presently available for distribution include the net collections from accounts receivable of the Debtors and the cash proceeds derived from the Court-approved sale to THI of Baltimore, Inc., an affiliate of Fundamental Long Term Care. There remain some uncollected accounts receivable, which will be collected by the Liquidating Trustee's collection agents. Additionally, the transaction with Fundamental did not allocate the sale proceeds by entity. Accordingly, the Plan will provide for a meaningful allocation of the proceeds. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MASONCOPPELL_DS_082914.pdf About Mason Coppell Mason Coppell OP, LLC, Mason Georgetown OP, LLC, Mason Mesquite OP, LLC, and Mason Round Rock OP, LLC operate five skilled nursing homes in Texas. Mason Georgetown RealCo, LLC, owns the real estate and building for the operations of Mason Georgetown. They initiated the Chapter 11 cases to effectuate a prompt transfer of their assets and operations to preserve patient safety and any potential value for creditors. Mason Coppell OP, LLC, et al., filed Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 14-31327 to 14-14-31334) on March 18, 2014. Judge Stacey Jernigan presides over the cases. The Debtors estimated assets of at least $10 million and debts of at least $10 million. The Debtors, except Mason Georgetown Realco, are represented by Joe E. Marshall, Esq., Thomas D. Berghman, Esq., and Timothy A. Million, Esq., at Munsch Hardt Kopf & Harr, P.C. Georgetown Realco is represented by Jonathan S. Covin, Esq., and Shayla L. Friesen, Esq., at Wick Phillips Gould & Martin, LLP. Deloitte Transactions and Business Analytics, LLP, acts as the Debtors' restructuring advisor with Louis Robichaux serving as chief restructuring officer. On March 28, 2014, the United States Trustee appointed an Unsecured Creditors' Committee in the cases. To date there has been no request made for the appointment of a trustee or examiner. A patient care ombudsman has not yet been appointed. However, the Court has scheduled a show cause hearing on April 15 to consider the appointment of an Ombudsman. Counsel for the Committee is Cox Smith Mathews Incorporated's Mark Andrews, Esq. Counsel for Oxford Finance, LLC, which is owed almost $16 million on a term loan and revolving credit, is Vedder Price P.C.'s Jon Aberman, Esq. Mason Coppell OP, LLC, et al., obtained Court authority to sell substantially all of their assets for a total of $16.1 million, consisting of $4.0 million for so-called facility assets and $12.1 million for the 142-bed nursing home facility commonly known as Estrella Oaks Rehabilitation Care Center, in Georgetown, Texas. At the closing of the sale, proceeds of the sale of the real property in the amount of $12.1 million, less adjustments, required U.S. Trustee fees, and required administrative expenses, will be paid to Oxford. Debtor Mason Friendswood OP, LLC, has separately sought authority to sell the Friendship Haven Health and Rehabilitation Center to ensure uninterrupted and continued care at the Facility. The Official Committee of Unsecured Creditors filed a Plan of Liquidation and accompanying Disclosure Statement on August 29, 2014. MADISON BENTLEY: Trustee Can Bring Alter Ego, Veil-Piercing Claims ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that U.S. District Judge Lewis A. Kaplan in Manhattan has ruled that the Chapter 7 trustee for Madison Bentley Associates LLC has standing to sue using an alter-ego theory on behalf of one creditor. According to the report, Judge Kaplan recited the general rule that a trustee can sue if the bankrupt could have brought the claim before bankruptcy and the claim is one that could have been brought by any creditor. The case is Messer v. Bentley Manhattan Inc., (In re Madison Bentley Associates LLC), 14-2315, U.S. District Court, Southern District of New York (Manhattan). MATAGORDA ISLAND GAS: Seeks Chapter 11 Protection ------------------------------------------------- Matagorda Island Gas Operations, LLC, filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-51099) in Lafayette, Louisiana, on Sept. 3, 2014, without stating a reason. The Morgan City, Louisiana-based company estimated $10 million to $50 million in assets and $100 million to $500 million in debt. The case is assigned to Judge Robert Summerhays. The Debtor has tapped Christopher T. Caplinger, in New Orleans as counsel. The schedules of assets and liabilities and the statement of financial affairs are due by Sept. 17, 2014. Kelsey Butler, writing for The Deal, reported that the oil and gas company was forced to shut down operations last November after failing to comply with safety standards put in lace following the 2010 Deepwater Horizon oil spill. MERCATOR MINERALS: Announces Resignation of Directors & Officers ---------------------------------------------------------------- Mercator Minerals Ltd. announced effective Sept. 4, 2014, the resignation from the board of directors the following: John Bowles, D. Bruce McLeod, Stephen P. Quin, Robert J. Quinn, Daniel Tellechea and Ron Vankoughnett. Also resigning, effective September 4, 2014, are the Officers of the Company: D. Bruce McLeod, Michael Broch, Mark Distler and Marc Leblanc. All inquiries regarding the Bankruptcy and Insolvency Act (Canada) proceedings should be directed to the Proposal Trustee at 604-640-3062. Court materials and other information about the proceedings will be available on the Proposal Trustee's Web site at: http://www.insolvencies.deloitte.ca/en-ca/Pages/mercator.aspx About Mercator Minerals Ltd. Mercator Minerals Ltd., a TSX listed base metals mining company, operates the wholly-owned copper/molybdenum/silver Mineral Park Mine in Arizona, USA. Mercator also wholly-owns two development projects in Sonora, Mexico: the copper heap leach El Pilar project and the molybdenum/copper El Creston project. MF GLOBAL: PwC Stuck With $1B Euro Debt Malpractice Suit -------------------------------------------------------- Law360 reported that U.S. District Judge Victor Marrero in Manhattan allowed the bankruptcy administrator for MF Global Holdings Ltd. to take a $1 billion malpractice suit against longtime auditor PricewaterhouseCoopers LLP to trial, ruling it isn't barred by MF Global's liquidation plan. According to the report, Judge Marrero allowed the suit to advance after determining that the professional malpractice allegations surrounding MF Global's accounting of European sovereign debt instruments were properly brought by its bankruptcy administrator, rather than its litigation trustee. Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported Judge Marrero, in denying PwC's motion to dismiss the lawsuit, said there are enough remaining questions of fact about the proximate cause, or causes, of the alleged harm to MF Global Holdings to make dismissing the complaint inappropriate at this stage. Judge Marrero added that the liquidation plan doesn't bar the administrator from bringing the action because the claims in the complaint regarding PwC's advice about the company's accounting for RTM transactions are separate from claims about the company's implementation of the RTM strategy, the Bloomberg report related. The lawsuit is MF Global Holdings Ltd. v. PricewaterhouseCoopers LLP, 14-cv-02197, U.S. District Court, Southern District of New York (Manhattan). About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MF GLOBAL: Judge Allows Corzine, Others to Tap Insurance -------------------------------------------------------- Joseph Checkler, writing for Daily Bankruptcy Review, reported that U.S. Bankruptcy Judge Martin Glenn in Manhattan said he would allow Jon S. Corzine and other former MF Global Holdings Ltd. executives and employees to tap the rest of the $200 million in the so-called "directors and officers" insurance policies. Those defendants include onetime Chief Executive Mr. Corzine, former operating chief Bradley Abelow and other executives and higher level employees, the report related. As previously reported by The Troubled Company Reporter, Judge Glenn has allowed the directors to tap an additional $15 million from the D&O insurance. The former executives have already tapped about $47.5 million of the insurance for their legal defense. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MICHIGAN FINANCE: Fitch Assigns 'BB+' Rating on $80.2MM Bonds ------------------------------------------------------------- Fitch Ratings assigns these ratings to the Michigan Finance Authority, MI (the authority) local government loan program revenue bonds issued on behalf of the city of Detroit, MI (the city) for the Detroit Water and Sewerage Department (DWSD): -- $150.7 million DWSD sewage disposal system revenue senior lien local project bonds, series 2014C1 and C2 'BBB-'; -- $685.2 million DWSD sewage disposal system revenue refunding senior lien local project bonds, series 2014C3, C5 and C6 'BBB-'; -- $100 million DWSD sewage disposal system revenue refunding second lien local project bonds, series 2014C7 and C8 'BB+'; -- $774.6 million DWSD water supply system revenue refunding senior lien local project bonds, series 2014D1, D2, D3, D4 and D5 (taxable) 'BBB-'; -- $80.2 million DWSD water supply system revenue refunding second lien local project bonds, series 2014D6 and D7 'BB+'. The bonds priced the week of Aug. 25, 2014. Proceeds will be used by the authority to purchase certain DWSD obligations and pay costs of issuance. Proceeds from the sale of the DWSD obligations will be used by the DWSD to make certain improvements to its sewer system as well as refund certain DWSD sewer system and water system (the systems) debt. The judge overseeing the city's bankruptcy case issued an order on Aug. 25, 2014, which, among other things, authorized the issuance of the bonds and granted a security interest in pledged assets securing the bonds. The judge's order also approved a compromise settlement between the city and various parties that will resolve certain objections to the city's plan of adjustment (the plan) upon closing of the bonds and will unimpair certain DWSD bonds in the city's plan that the city had sought to impair. At this time Fitch also upgrades the following outstanding DWSD bonds (pre-closing): -- $1.1 billion senior lien water revenue bonds to 'BBB-' from 'BB+'; -- $565 million second lien water revenue bonds to 'BB+' from 'BB'; -- $1.6 billion senior lien sewer revenue bonds to 'BBB-' from 'BB+'; -- $788 million second lien sewer revenue bonds to 'BB+' from 'BB'. The ratings on the outstanding bonds are removed from Positive Watch and assigned a Stable Outlook, and a Stable Outlook is assigned to the new bonds. KEY RATING DRIVERS UPGRADE ON LEGAL AND OPERATIONAL CLARITY: The upgrade of the senior and second lien bonds to 'BBB-'/'BB+', respectively, reflects the city's tender offer to DWSD bondholders, which yields certain economic benefits for the systems and simultaneously resolves contentious legal issues relating to the city's attempted impairment of certain DWSD bonds. The rating action also reflects ongoing DWSD actions as well as recent revisions to system baseline financial assumptions that Fitch believes are more likely to achieve steadily improving financial margins going forward. WEAK FINANCIAL OPERATIONS: The systems exhibit weak financial results, having historically missed forecast expectations on a regular basis and for various reasons. SEPARATE OPERATIONS: All system funds and accounts are separate and distinct from other city funds including the city's general fund. Excess system funds are invested by the bond trustee for and at the direction of DWSD. HIGHLY LEVERAGED DEBT PROFILE: The systems' debt load is expected to remain elevated for the foreseeable future. With the downward revision in baseline financial assumptions, management has included higher near-term borrowing estimates in its capital improvement plans. Over the longer term though it is envisioned a greater use of pay-go capital funding will prevail and alleviate debt pressures to some degree. EXPANSIVE SERVICE TERRITORY: The systems provide essential services to a broad area. The water system covers roughly 43% of Michigan's population, with over 70% of operating revenues coming from wealthier suburban customers. The sewer system includes roughly 30% of Michigan's population, with over 50% of operating revenues coming from suburban customers. STRONG RATE-ADJUSTMENT HISTORY: The governing body has instituted virtually annual rate hikes in support of financial and capital needs. MINERAL PARK: Meeting to Form Creditors Committee Tomorrow ---------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Sept. 9, 2014, at 10:30 a.m. in the bankruptcy case of Mineral Park, Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King St., Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services s are in the interests of the unsecured creditors whom it represents. About Mineral Park Mineral Park, Inc., Bluefish Energy Corp. and two affiliates commenced proceedings under Chapter 11 of the Bankruptcy Code in Delaware on Aug. 25, 2014. The cases are pending before the Honorable Kevin J. Carey and are jointly administered under Case No. 14-11996. Mineral Park and its affiliated debtors are subsidiaries of Mercator Minerals Ltd. ("MML"), a mineral resource company engaged through various subsidiaries in the mining, exploration, development and operation of its mineral properties in Mohave County, Arizona, and Sonora, Mexico. Mineral Park's principal asset is the Mineral Park Mine, a producing copper-molybdenum mine located near Kingman, Arizona. Bluefish is the owner and operator of the industrial gas turbine power generator at the Mine. British Columbia, Canada-based MML, which has shares trading on the Toronto Stock Exchange under the trading symbol "ML", is not included in the bankruptcy filing. The Debtors have tapped Pachulski Stang Ziehl & Jones LLP as counsel, Evercore Group LLC as investment banker, FTI Consulting, Inc., as financial advisor, FTI's David J. Beckman as CRO, and FTI's Paul Hansen as assistant CRO. Prime Clerk LLC is the claims and noticing agent. Mineral Park estimated $100 million to $500 million in assets and debt. MOLYCORP INC: S&P Puts 'CCC' CCR on CreditWatch Positive -------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'CCC' corporate credit and debt ratings on Greenwood Village, Colo.- based Molycorp Inc. on CreditWatch with positive implications. S&P expects to raise the corporate credit rating to 'CCC+' upon close of the $400 million financing transaction. S&P will review issue-specific ratings at that time and may or may not raise them, depending on recovery prospects in light of the new, secured financing. S&P's rating action reflects the potential for its ratings on Molycorp to be raised. S&P believes that the up-front $250 million will provide sufficient liquidity for the company to meet cash flow obligations for the coming 12 months. The company will need to meet certain operational and financial targets to draw the remaining $150 million of the credit facility up until April 2016; it faces a $230 million debt maturity in June 2016. S&P will raise the corporate credit rating to 'CCC+' upon successful closing of the transaction and will review issue- specific ratings in light of the transaction. The outlook would be negative, given the operational challenges of returning Mountain Pass to full production capacity. S&P will remove ratings from CreditWatch in the event the transaction does not proceed, and ratings would remain unchanged. MONTREAL MAINE: Plan Moratorium Period Extended to Sept. 30 ----------------------------------------------------------- Judge Louis H. Kornreich of the U.S. Bankruptcy Court for the District of Maine extended Montreal, Maine & Atlantic Railway Ltd.'s Plan Moratorium Period until the earlier of (a) September 30, 2014, or (b) 10 days following the Chapter 11 Trustee's filing of a notice of termination of the Moratorium Period. Robert J. Keach, the trustee of the Debtor, originally asked the Court in February to establish (i) a moratorium on plan proceedings; (ii) a settlement process; and (iii) a plan process in the event of multiple plans to extend the Moratorium Period. The last Moratorium Order extended the Moratorium Period until July 31, 2014. As reported by the Troubled Company Reporter, the Court disapproved the Disclosure Statement for the Debtor's Amended Chapter 11 Plan dated Jan. 29, 2014, proposed by the Unofficial Committee of Wrongful Death Claimants. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. NAVISTAR INTERNATIONAL: Net Loss Down to $2 Million in Q3 --------------------------------------------------------- Navistar International Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2 million on $2.84 billion of net sales and revenues for the three months ended July 31, 2014, compared to a net loss of $247 million on $2.86 billion of net sales and revenues for the same period in 2013. For the nine months ended July 31, 2014, the Company reported a net loss of $547 million on $7.79 billion of net sales and revenues compared to a net loss of $744 million on $8.02 billion of net sales and revenues for the same period a year ago. The Company's balance sheet at July 31, 2014, showed $7.70 billion in total assets, $11.74 billion in total liabilities and a $4.04 billion total stockholders' deficit. The Company ended the third quarter of 2014 with $1.17 billion of consolidated cash, cash equivalents and marketable securities, compared to $1.59 billion as of Oct. 31, 2013. The decrease in consolidated cash, cash equivalents and marketable securities was primarily attributable to spending related to warranty claims, debt servicing payments, contributions to the Company's defined benefit pension plans, and capital expenditures. "Our third quarter results reflect a number of positive trends including increased production, improvements in warranty charges, cost reductions that further lowered our breakeven point and our continued efforts to manage cash," said Troy A. Clarke, Navistar president and chief executive officer. "While we have work ahead of us to grow the business, improve our market share and further reduce our cost of doing business, we do take some satisfaction in achieving positive income from continuing operations before taxes -- an important financial milestone we've not realized in our quarterly performance since 2011." "Regaining market share remains a top priority and while we still have work to do, we are excited by the favorable feedback we receive from those customers who have bought and experienced our new trucks," Clarke added. "With additional offerings for medium- duty and severe service applications, we're very encouraged with our future prospects." A full-text copy of the Form 10-Q is available for free at: http://is.gd/ZLcJ8n About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar International reported a net loss attributable to the Company of $898 million for the year ended Oct. 31, 2013, following a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012. * * * In the Oct. 9, 2013, edition of the TCR, Moody's Investors Service affirmed the ratings of Navistar International Corporation, including the B3 Corporate Family Rating (CFR). The ratings reflect Moody's expectation that Navistar's successful incorporation of Cummins engines throughout its product line up will enable the company to regain lost market share, and that progress in addressing component failures in 2010 vintage-engines will significantly reduce warranty expenses. As reported by the TCR on Oct. 9, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'CCC+' from 'B-'. "The rating downgrades reflect our increased skepticism regarding NAV's prospects for achieving the market shares it needs for a successful business turnaround," said credit analyst Sol Samson. In January 2013, Fitch Ratings affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NEPHROS INC: Obtains $1.7 Million in Bridge Financing ----------------------------------------------------- Nephros, Inc., disclosed that it has entered into a bridge loan and security agreement with Lambda Investors LLC, an affiliate of Wexford Capital LP and the company's largest shareholder. On Aug. 29, 2014, the company issued a six-month 12% senior secured note to Lambda Investors in the principal amount of $1,750,000. Under the terms of the note, the Company has undertaken to conduct a $3 million rights offering of common stock at an anticipated offering price of $0.60 per share. All of the Company's stockholders and warrantholders will be eligible to participate in the offering on a pro rata basis based upon their proportionate ownership of the company's common stock on an as converted basis. The note requires the Company to repay the bridge loan with the proceeds from the rights offering or any other financing transaction. In connection with the proposed rights offering, Nephros will file a registration statement on Form S-1, as may be amended, with the Securities and Exchange Commission. The securities to be offered in the rights offering may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. The rights offering will include an over-subscription privilege which permits each rights holder that exercises its rights in full to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering. This over-subscription privilege is subject to the availability and allocation of shares among holders exercising their respective over-subscription privileges. To the extent that after the closing of the rights offering there still remain unsubscribed shares, Lambda Investors LLC has agreed to purchase any or all those remaining unsubscribed shares. About Nephros River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which it calls ultrafilters, are primarily used in dialysis centers and healthcare facilities for the production of ultrapure water and bicarbonate. Nephros, Inc., reported a net loss of $3.69 million in 2013 following a net loss of $3.26 million in 2012. As of June 30, 2014, the Company had $2.35 million in total assets, $2.13 million in total liabilities and $216,000 in total stockholders' equity. Rothstein Kass, in Roseland, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred negative cash flow from operations and net losses since inception. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. NEW ENGLAND COMPOUNDING: Ex-Supervising Pharmacist Arrested ----------------------------------------------------------- Jon Kamp, writing for The Wall Street Journal, reported that federal agents have arrested a supervising pharmacist linked to the 2012 outbreak of fungal meningitis, the first person to be charged in connection the criminal probe into New England Compounding Pharmacy. The meningitis outbreak claimed 64 lives, the Journal related. About New England Compounding Pharmacy New England Compounding Pharmacy Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012, after a meningitis outbreak linked to an injectable steroid, methylprednisolone acetate ("MPA"), manufactured by NECC, killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts. The Debtor owns and operates the New England Compounding Center is located in Framingham, Mass. In October 2012, the company recalled all its products, not just those associated with the outbreak. Paul D. Moore, Esq., at Duane Morris LLP, in Boston, has been appointed as Chapter 11 Trustee of NECC. He is represented by Jeffrey D. Sternklar, Esq., at DUANE MORRIS LLP. An Official Committee of Unsecured Creditors appointed in the case has been represented by BROWN RUDNICK LLP's William R. Baldiga, Esq., Rebecca L. Fordon, Esq., Jessica L. Conte, Esq., and David J. Molton, Esq. NORTHERN TIER: S&P Assigns 'B+' CCR; Outlook Stable --------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Ridgefield, Conn.-based Northern Tier Energy L.P. In addition, S&P affirmed the issue-level rating of 'BB-' and left the '2' recovery rating unchanged on operating subsidiary Northern Tier Energy LLC's $275 million, 7.125% senior secured notes due 2020. The '2' recovery rating indicates that lenders can expect substantial (70% to 90%) recovery if a payment default occurs. The outlook is stable. S&P is withdrawing the 'B+' corporate credit rating on operating company Northern Tier Energy LLC at the issuer's request. "Our assessment of Northern Tier's "vulnerable" business risk profile partly hinges on its reliance on one refinery--and its small size and the risk of unplanned downtime--for most of its cash flow to service its obligations," said Standard & Poor's credit analyst Michael Grande. S&P also sees some added risk from Northern Tier's variable master limited partnership structure. In S&P's view, this structure puts more pressure on the partnership to manage distributions, which could prove challenging given the refining industry's highly cyclical nature. Northern Tier's ability to source lower-priced crudes and the strong regional demand for its refined products, which has led to robust profitability and cash flow, only partly mitigates these risks. Western Refining Inc. owns the controlling interest in Northern Tier's general partner and a 38.7% limited partner interest in the partnership. As such, while S&P believes Western Refining can significantly influence Northern Tier's business and financial policies, S&P don't attribute any rating linkage between the two companies at this time. With refining capacity of 89,500 barrels per day (bpd), the refinery is small compared with those of peers, and the lack of operational diversity makes Northern Tier vulnerable to regional economic downturns, supply shocks, cost increases, and margin volatility in the Midwest. The high fixed costs of running the refinery, including at times substantial turnaround costs, add a high degree of operating leverage to a volatile cash flow stream. The stable outlook reflects S&P's expectation that Northern Tier will have adequate liquidity and that debt leverage will be less than 2x during the next 12 months and between 2x and 3x through the commodity cycle. S&P would consider a downgrade if operating performance deteriorates considerably, resulting in debt leverage exceeding 3x for a sustained period. This could occur if benchmark refining margins decline substantially from current levels, if the refinery's positive margin differential sharply declines, or if refined product prices decrease significantly in the Midwest. An upgrade is not likely in the near term, absent an acquisition that would meaningfully improve the partnership's scale. NORTHWOOD PROPERTIES: Ch.7 Trustee's Suit Against Owner Tossed -------------------------------------------------------------- Mark G. DeGiacomo, as chapter 7 trustee in the bankruptcy case of Northwood Properties, LLC, seeks damages against Tashmoo Cove Realty, Inc. for breach of plan funding obligations to which, the Trustee contends, Tashmoo committed itself. The Trustee contends that, as owner of the Debtor and a proponent of the Debtor's confirmed-but-failed chapter 11 plan, and to obtain confirmation of that plan, Tashmoo promised to fund payment of administrative expense claims to the extent of $2 million if necessary, and that the court relied on that promise in confirming the plan. Tashmoo has consistently denied any obligation to advance funds for payment of administrative claims and, therefore, has declined to pay or advance any amounts for the unpaid administrative claims of the Estate, either before or after the case was converted from Chapter 11 to Chapter 7. After a trial, Bankruptcy Judge Frank J. Bailey finds that Tashmoo made no such promise. Accordingly, the Court dismissed the Trustee's lawsuit against Tashmoo. The case is, MARK G. DEGIACOMO, as Chapter 7 Trustee, Plaintiff, v. TASHMOO COVE REALTY, INC., Defendant, Adv. Proc. No. 10-1314 (D. Mass.). A copy of the Court's September 3, 2014 Memorandum of Decision is available at http://is.gd/YVWAhBfrom Leagle.com. About Northwood Properties Northwood Properties, LLC, was formed by Tashmoo Cove Realty Inc., on December 26, 2000, to assign all of the assets Tashmoo had purchased from Northwood at Sudbury Realty Corp., the debtor in an earlier bankruptcy case, Case No. 00-14967-CJK, pursuant to a joint plan of reorganization filed by NSRC and Tashmoo dated October 11, 2000. The assets consisted primarily of a partially constructed real estate development in Sudbury, Massachusetts, which contemplated a total of six buildings and sixty-six condominium units in five construction phases. Northwood filed a voluntary Chapter 11 petition (Bankr. D. Mass. Case No. 05-18880) on September 22, 2005. On March 23, 2006, Northwood and Tashmoo, as "co-proponents," filed a Chapter 11 Plan of Reorganization. On July 11, 2006, the co-proponents filed a Second Amended Chapter 11 Plan. The Court entered an Order dated July 20, 2006 confirming the Second Amended Plan. Northwood never completed construction of the three remaining phases of the Development after the Filing Date, nor did it sell the development rights prior to conversion of the Debtor's Chapter 11 case to a case under Chapter 7. The Amended Plan was never consummated. By order dated January 23, 2009, the Chapter 11 case was converted to one under Chapter 7. The Trustee was appointed three days later. OHCMC-OSWEGO: Creditor Schoppe Design Accepts Chapter 11 Plan ------------------------------------------------------------- OHCMC-Oswego, LLC, notified the U.S. Bankruptcy Court for the Northern District of Illinois that Schoppe Design Associates, Inc., votes to accept the Debtor's Modified Plan of Liquidation. Mike Schoppe, president of Schoppe Design, signed the ballot. Schoppe Design is one of the Debtor's eight largest unsecured creditors. Schoppe Design is the holder of a Class 3a Claim against the Debtor in the unpaid amount of $3,610. About OHCMC-Oswego OHCMC-Oswego, LLC, is an Illinois limited liability company that was formed on July 12, 2005 to, inter alia, acquire, develop and sell a series of real estate developments. It is wholly owned by Oliver-Hoffman Corporation. Its principal place of business is located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois. OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to sell its assets. Camille O. Hoffmann signed the petition as president of managing and sole member. The Debtor disclosed $92,268 plus an unknown amount in assets and $56,782,127 in liabilities. The Hon. Carol A. Doyle presides over the case. The Debtor is represented by David C. Gustman,, Esq., at Freeborn & Peters LLP. No trustee, examiner or creditors' committee has been appointed in the case. * * * OHCMC-Oswego, LLC, filed a Modified Plan of Liquidation and Disclosure Statement on June 30, 2014. According to the latest plan documents, the Debtor's assets will be sold pursuant to the Court-approved sale procedures. The Debtor anticipates a sale process that will allow its real estate broker adequate time to market the properties to ensure the Debtor receives the highest and best offer for the properties. The proceeds of the sale of the properties will be used to satisfy the secured claims of BMO and PNC. The Debtor will distribute a set sum of money that is currently held in an escrow account with the Village of Oswego and totaling $29,408 to unsecured creditors in accordance with the Bankruptcy Code's priority scheme. The Debtor has substituted Turnstone Group LLC's REO Funding Solutions V LLC as the stalking horse bidder, to purchase the properties for $11,125,000. The Debtor will solicit written bids from other potential bidders with all such bids to be received no later than 4:00 p.m. on Sept. 12, 2014. If the Debtor receives two or more qualified bids for the assets, the debtor will conduct an auction. The Debtor will determine the winning bid in its reasonable discretion. It will also select the back-up bid, to be utilized, in the event that the best bid is unable to timely close. OHCMC-OSWEGO: Exclusive Plan Filing Period Extended to Sept. 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois granted OHCMC-Oswego, LLC's request and extended the Debtor's exclusive right to file a plan and solicit acceptances of that plan through and including September 30, 2014. The Debtor's 180-day exclusivity period provided by Section 1121(c) of the Bankruptcy Code expired on August 18, 2014. About OHCMC-Oswego OHCMC-Oswego, LLC, is an Illinois limited liability company that was formed on July 12, 2005 to, inter alia, acquire, develop and sell a series of real estate developments. It is wholly owned by Oliver-Hoffman Corporation. Its principal place of business is located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois. OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to sell its assets. Camille O. Hoffmann signed the petition as president of managing and sole member. The Debtor disclosed $92,268 plus an unknown amount in assets and $56,782,127 in liabilities. The Hon. Carol A. Doyle presides over the case. The Debtor is represented by David C. Gustman,, Esq., at Freeborn & Peters LLP. No trustee, examiner or creditors' committee has been appointed in the case. * * * OHCMC-Oswego, LLC, filed a Modified Plan of Liquidation and Disclosure Statement on June 30, 2014. According to the latest plan documents, the Debtor's assets will be sold pursuant to the Court-approved sale procedures. The Debtor anticipates a sale process that will allow its real estate broker adequate time to market the properties to ensure the Debtor receives the highest and best offer for the properties. The proceeds of the sale of the properties will be used to satisfy the secured claims of BMO and PNC. The Debtor will distribute a set sum of money that is currently held in an escrow account with the Village of Oswego and totaling $29,408 to unsecured creditors in accordance with the Bankruptcy Code's priority scheme. The Debtor has substituted Turnstone Group LLC's REO Funding Solutions V LLC as the stalking horse bidder, to purchase the properties for $11,125,000. The Debtor will solicit written bids from other potential bidders with all such bids to be received no later than 4:00 p.m. on Sept. 12, 2014. If the Debtor receives two or more qualified bids for the assets, the debtor will conduct an auction. The Debtor will determine the winning bid in its reasonable discretion. It will also select the back-up bid, to be utilized, in the event that the best bid is unable to timely close. OVERSEAS SHIPHOLDING: Appoints Geoff Carpenter as VP & Treasurer ---------------------------------------------------------------- Overseas Shipholding Group, Inc. appointed Geoffrey Carpenter as vice president and treasurer. According to the Sept. 2 announcement, Mr. Carpenter will assume all management responsibility for the company's treasury department. "Our hiring of Geoff is an important addition to OSG's management team," said John Ray, Chairman of the Board of OSG. "He is an experienced financial professional and we are confident that he will execute OSG's financing strategy and be a valuable asset as OSG's interface with the investment and banking communities. Our newly appointed Board is pleased to have achieved a number of its key objectives to energize the company as we move forward with our strategy." Previously, Mr. Carpenter held similar roles in treasury and finance at The Boeing Company, Lockheed Martin Corporation and DaimlerChrysler Trucks North America. Most recently, he served as Senior Vice President and Treasurer at Brightstar Corporation, a leading specialized wireless services company. Mr. Carpenter earned a Bachelor of Science in Marketing from University at Albany, State University of New York, and a Master of Business Administration in Finance from Northeastern University. On Aug. 11, 2014, OSG announced its search for a new chief executive officer to lead the company's growth efforts after emergence last month from its Chapter 11 reorganization. On August 20, 2014, OSG filed with the U.S. Securities and Exchange Commission to register securities issued in connection with the reorganization. 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. Judge Walsh signed on July 18, 2014, a findings of fact, conclusions of law, and order confirming the First Amended Joint Plan of Reorganization of OSG and its debtor-affiliates. A blacklined version of the Plan dated July 17, 2014, is available at http://bankrupt.com/misc/OSGplan0716.pdf A full-text copy of Judge Walsh's Confirmation Order is available at http://bankrupt.com/misc/OSGplanord0718.pdf * * * The Troubled Company Reporter, on Aug. 14, 2014, reported that Moody's Investors Service assigned Caa1 ratings to the unsecured notes of Overseas Shipholding Group, Inc. ("OSG") that are being reinstated pursuant to its plan of reorganization which becomes effective. Moody's also affirmed the B2 Corporate Family Rating and all of the other debt ratings it assigned to OSG on June 12, 2014 in anticipation of the conclusion of the Chapter 11 reorganization. The rating outlook is stable. The TCR, on Aug. 19, 2014, also reported that Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Overseas Shipholding Group Inc. (OSG). The outlook is stable. PIEDMONT CENTER: To Sell Properties to America's Realty for $8.3MM ------------------------------------------------------------------ The bankruptcy trustee of Piedmont Center Investments, LLC received court approval to sell its real properties to America's Realty, LLC, for more than $8.3 million. U.S. Bankruptcy Judge Randy Doub signed off on an order authorizing the company to sell some of the real properties it owns in Nashville, Roxboro, Pittsboro, Murfreesboro and Gibsonville. Piedmont will use the proceeds from the sale to pay the remaining balance of Business Partners, LLC's claim secured by the real properties. Under the company's court-approved Chapter 11 reorganization plan, Business Partners has an allowed secured claim of $7.25 million, plus interest, according to court filings. Piedmont will also pay from the sale proceeds tax claims aggregating $105,567 and the broker's commission. The remaining net proceeds will be distributed to creditors pursuant to the restructuring plan. Tom Kallenbach Real Estate Investment acted as the buyer's agent while Lundy Group, Inc. acted as the listing agent in brokering the sale of one of the properties. Both are entitled to a commission of 2.5% of the purchase price. About Piedmont Center Investments Raleigh, North Carolina-based Piedmont Center Investments, LLC, owns, leases, and manages seven shopping centers located in (i) Graham, Alamance County, North Carolina; (ii) Mebane, Alamance County, North Carolina; (iii) Pittsboro, Chatham County, North Carolina; (iv) Gibsonville, Guilford County, North Carolina; (v) Murfreesboro, Hertford County, North Carolina; (vi) Nashville, Nash County, North Carolina; and (vii) Roxboro, Person County, North Carolina. Manager and part-owner Roger Camp signed a Chapter 11 petition for Piedmont Center Investments, LLC (Bankr. E.D.N.C. Case No. 11-06178) on Aug. 11, 2011. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $27.2 million in assets and $15.5 million in liabilities. The Debtor's two primary secured creditors are Business Partners, LLC, and KeySource Commercial Bank. Counsel for KeySource are James B. Angell, Esq., and Nicolas C. Brown, Esq., at Howard, Stallings, From & Hutson, P.A. The Honorable J. Rich Leonard appointed John A. Northen, Esq. as Chapter 11 trustee in September 2011. Lehman Pollard of Nelson & Company, PA, serves as trustee's accountant. The Bankruptcy Administrator sought a Chapter 11 trustee, citing that in August 2011, federal grand jury in the Eastern District of North Carolina indicted Piedmont's Roger van Santvoord Camp on fifteen felony counts related to bank fraud, false statements, and identity theft. PRAXSYN CORP: Incurs $780K Net Loss in Q2 Ended June 30 ------------------------------------------------------- Praxsyn Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $780,924 on $23.24 million of net revenues for the three months ended June 30, 2014, compared to a net loss of $197,164 on $498,712 of net revenues for the same period last year. The Company's balance sheet at June 30, 2014, showed $12.6 million in total assets, $16.1 million in total liabilities, and a stockholders' deficit of $3.56 million. Since inception, management has funded operations primarily through proceeds received in connection with factoring of accounts receivable on a non-recourse basis from two primary factors, issuances of notes payable, and through sales of common stock. In addition, the Company is concentrated within the workers compensation market for which the collection of payments on receivables may be delayed for a significant period depending on various factors. Additionally, the Company is dependent upon a few third party referral services, one of them being a related party, in which generate almost 100% of the Company's revenues. During the six months ended June 30, 2014 and 2013, the Company incurred a net loss of $12.79 million, and generated net income of $151,574, respectively. The net loss during the period ended June 30, 2014 included stock-based compensation of $8.9 million. The Company also has an accumulated deficit of $52.85 million as of June 30, 2014. Management believes that it will need additional accounts receivable factoring, or debt and/or equity financing to be able to implement their business plan. These indicators, in addition to the capital deficiency and negative working capital, there is substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/6Qp8cg Praxsyn Corporation, formerly The Paws Pet Company, is a healthcare company headquartered in Irvine, California. The Company formulates transdermal creams for patients suffering from long-term pain associated with workplace-related injuries. PROSPECT PARK: Seeks Extension of Exclusive Solicitation Period --------------------------------------------------------------- Prospect Park Networks, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware a motion asking the court to extend until Dec. 5, 2014, the period by which it has the exclusive right to solicit acceptances of its plan of liquidation. As previously reported by the TCR, the Debtor filed a plan to liquidate its assets as it continues to pursue litigation against the ABC television network. The Debtor has also filed a motion to approve the accompanying disclosure statement and establish procedures with respect to solicitation, ballot tabulation, and related matters in connection with the Plan. The solicitation motion is currently scheduled to be heard on Sept. 25. Because the current exclusive period to solicit acceptances of its Chapter 11 plan expires on Oct. 6, 2014, the Debtor asks a further 60-day enlargement of the exclusive solicitation period through and including Dec. 5. A hearing on the extension request is scheduled for Sept. 25, 2014, at 2:00 p.m. (ET). Objections are due Sept. 18. About Prospect Park Networks Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent and management company, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-10520) in Wilmington, on March 10, 2014, estimating $50 million to $100 million in assets, and $10 million to $50 million in debts. The petition was signed by Jeffrey Kwatinetz, president. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H. Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon, Esq., at Genovese Joblove & Battista, P.A. serve as the Debtor's bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an ordinary course professional. The U.S. Trustee for Region 3 selected three creditors to serve on the Official Committee of Unsecured Creditors. Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Committee's counsel. PUERTO RICO ELECTRIC: AlixPartners to Lead Restructuring -------------------------------------------------------- Michael J. De La Merced and Michael Corkery, writing for The New York Times' DealBook, reported that Puerto Rico's electric power authority said it had hired the consulting firm AlixPartners to supervise its restructuring. According to the report, the assignment will be led by Lisa J. Donahue, the head of AlixPartners' turnaround and restructuring practice. * * * The Troubled Company Reporter, on Aug. 4, 2014, reported that Standard & Poor's Ratings Services has lowered its rating on Puerto Rico Electric Power Authority's (PREPA) power revenue bonds two notches to 'CCC' from 'B-'. The rating remains on CreditWatch with negative implications, where S&P originally placed it June 18, 2014. REVEL AC: Night Club Owners Sue to Stay Open -------------------------------------------- Joseph Checkler, writing for Daily Bankruptcy Review, reported that the owner of the HQ Night Club and HQ Beach Club at the Revel Casino Hotel is suing Revel AC, LLC, saying the clubs should remain open while their owner scrambles for approval of independent liquor licenses and access to a different parking lot for its patrons. According to the report, Idea Boardwalk LLC, owner of the two Atlantic City clubs, said the terms of its lease give it exclusive possession of the property it manages and that the clubs should remain open. 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, to pursue a quick sale of the assets. The Chapter 11 cases are assigned to Judge Gloria M. Burns. The Debtors' Chapter 11 cases are jointly consolidated for procedural purposes. Revel AC estimated assets ranging from $500 million to $1 billion, and the same amount of liabilities. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' Counsel, and Moelis & Company, LLC, is the investment banker. The Debtors' solicitation and claims agent is Alixpartners, LLP. The prepetition first lenders are represented by Cadwalader, Wickersham & Taft LLP. The prepetition second lien lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP. This is Revel AC's second trip to bankruptcy. The company first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13- 16253) on March 25, 2013, with a prepackaged plan that reduced 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. RGIS HOLDINGS: S&P Lowers CCR to 'B' on Weaker Performance ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Auburn Hills, Mich.-based RGIS Holdings LLC to 'B' from 'B+'. Concurrently, S&P lowered the senior secured debt ratings to 'B' from 'B+'. The recovery ratings remain '4', indicating that lenders could expect average (30% to 50%) recovery in the event of a payment default. The outlook is stable. "The downgrade reflects RGIS' weaker-than-expected operating performance during the first half of this year," said Standard & Poor's credit analyst Bea Chiem. "As a result of the weak performance, we estimate that leverage will likely remain above 5x and funds from operations to debt below 12% during the next 12 to 24 months," continued Ms. Chiem. S&P had previously stated that it expected leverage would remain below 5x and funds from operations to debt above 12% to maintain the current ratings and outlook. S&P estimates that as of June 30, 2014, RGIS had roughly $545 million in lease- and pension-adjusted debt outstanding. Including the company's roughly $509 million in preferred stock as 100% debt, the company had roughly $1 billion in debt outstanding. RUE21 INC: Bank Debt Trades at 12% Off -------------------------------------- Participations in a syndicated loan under which Rue21 Inc. is a borrower traded in the secondary market at 88.10 cents-on-the- dollar during the week ended Friday, September 5, 2014, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 2.60 percentage points from the previous week, The Journal relates. Rue21 Inc. pays 475 basis points above LIBOR to borrow under the facility. The bank loan matures on Sept. 30, 2020 and carries Moody's B3 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. S.B. RESTAURANT: Has Until Nov. 14 to File Plan, Disclosures ------------------------------------------------------------ A notice filed in bankruptcy court said S.B. Restaurant Co., doing business as Elephant Bar, a chain of 29 restaurants in seven states, has until Nov. 14, 2014, to file its Chapter 11 plan and explanatory disclosure statement. The notice followed the approval of the sale of the assets of the restaurant chain to an affiliate of Chalak Mitra Group, which will pay about $1.25 million cash to fund a wind-down, specified priority claims and transfer taxes. Chalak Group Inc., based in Dallas, owns and operates 260 restaurants, including the 100-unit Genghis Grill, Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, said. S.B. Restaurant Co. dba Elephant Bar Global Grill/Wok Kitchen, now a chain of 29 restaurants in seven states, filed a petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-13778) on June 17, 2014, in Santa Ana, California. The case is assigned to Judge Erithe A. Smith. The Debtors' counsel is Jeffrey N Pomerantz, Esq., and John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California. The Debtors' chief restructuring officers are from Deloitte Transactions & Business Analytics LLP, while their investment banker is Mastodon Ventures, Inc. The Debtors' noticing claims and balloting agent is Rust Consulting Omni Bankruptcy. S.B. RESTAURANT: Court Approved Sale of Assets to CM7 Capital ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved S.B. Restaurant Co., et al.'s asset purchase agreement among the Debtors and the buyer, and approved the sale of substantially all of the Debtors' assets free and clear of all liens, claims, encumbrances and other interests. The Debtors originally proposed to sell the Assets to Cerberus Business Finance, LLC, as agent on behalf of the Debtors' first lien lenders (the "Stalking Horse Bidder"). After the Stalking Horse Bidder withdrew the Stalking Horse Agreement, the Debtors, in consultation with their lenders and the Official Committee of Unsecured Creditors, selected CM7 Capital Partners, LLC (the "Buyer") as the only qualifying bid and cancelled the Auction. The Buyer has submitted a Qualified Bid by the Bid Deadline, including that certain Asset Purchase Agreement, dated as of August 6, 2014, by and between the Debtors and CM7 for the sale of substantially all of the Debtors' assets. On the Closing Date, the Buyer will assume the accrued and unpaid postpetition payables of the Debtors as of the Closing Date owed to Sysco Corporation, its Operating Companies (as defined in the Sysco Distribution Agreement), or any of its Affiliates. Sysco previously filed an objection to the Debtors' Notice of Proposed Assumption, Assignment, and Sale of Executory and Unexpired Leases. If the Sysco Distribution Agreement is assumed under the Asset Purchase Agreement and the Sale Order, then the Cure Amount with respect to the Sysco Distribution Agreement will be $1,393,654 and with be paid in cash at the time of the assumption unless otherwise agreed to by Sysco. Moreover, the Cure Amount for the Lease of J.G. Dutra & Son includes the amount of $21,033 for past-due rent obligations. Any objections to the Sale Motion that have not been withdrawn, waived or settled are denied and overruled. A copy of the Sale Order is available for free at: http://bankrupt.com/misc/SBRESTAURANT_SaleOrder.pdf About S.B. Restaurant Co. S.B. Restaurant Co. dba Elephant Bar Global Grill/Wok Kitchen, now a chain of 29 restaurants in seven states, filed a petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-13778) on June 17, 2014, in Santa Ana, California. The case is assigned to Judge Erithe A. Smith. The Debtors' counsel is Jeffrey N. Pomerantz, Esq., and John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California. The Debtors' chief restructuring officers are from Deloitte Transactions & Business Analytics LLP, while their investment banker is Mastodon Ventures, Inc. The Debtors' noticing claims and balloting agent is Rust Consulting Omni Bankruptcy. An official committee of unsecured creditors was appointed in the case of S.B. Restaurant Co. Debtors' cases. The panel comprises of (1) General Growth Properties Inc., c/o Julie Minnick Bowden of Chicago, IL; (2) The Macerich Company, c/o Bill Palmer of Pittsford, NY; and (3) Global Media Group c/o Mark Torres of Rancho Santa Margarita, CA. The Committee retained Cooley LP as its counsel. SA-ST. PETERSBURG: Seeks Chapter 11 Protection ---------------------------------------------- SA-St. Petersburg LLC, along with several affiliates, sought Chapter 11 protection (Bankr. W.D. La. Case No. 14-51101) in Lafayette, Louisiana on Sept. 3, 2014, without stating a reason. SA-St. Petersburg LLC estimated less than $10 million in assets and debt. Debtor-affiliate CHC-CLP Operator Holding, LLC (Case No. 14-51104) estimated $10 million to $50 million in assets and debt. According to the docket, the appointment of a healthcare ombudsman is due Oct. 3, 2014. The Debtors are required to submit their Chapter 11 plan and disclosure statement by Jan. 2, 2015. The Debtors are represented by Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, in Dallas, Texas. SEAFIELD RESOURCES: Unit Files for Reorganization in Colombia ------------------------------------------------------------- Seafield Resources Ltd. on Sept. 4 disclosed that its wholly owned subsidiary Minera Seafield S.A.S. filed for reorganization agreement under the Colombian law 1116 of 2006. The Company continues to review and consider its alternatives to resolve the situation. At present, there can be no assurance as to what, if any, alternatives might be pursued by the Company. About Seafield Resources Ltd. Seafield Resources Ltd. -- http://www.sffresources.com-- is a development stage company currently focused on completing a bankable feasibility study on its Miraflores Gold Deposit. Seafield's Quinchia Gold Project is located in the Department of Risaralda, Colombia. SHELBOURNE NORTH WATER: Disclosure Statement Tentatively OK'd ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that Shelbourne North Water Street LP, the owner Chicago Spire, obtained tentative approval of the disclosure materials explaining the Chapter 11 plan. If Atlas Apartment Holdings LLC, which agreed to extend a $135 million to finance the plan, approves the disclosure statement, creditors will vote and there will be an Oct. 7 confirmation hearing for approval of the plan. 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. SOUTH & HEADLEY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: South & Headley Associates, Ltd. 237 South Street P.O. Box 2049 Morristown, NJ 07962 Case No.: 14-28225 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: September 4, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Michael B. Kaplan Debtor's Counsel: Morris S. Bauer, Esq. NORRIS McLAUGHLIN & MARCUS, PA PO Box 5933 Bridgewater, NJ 08807-5933 Tel: (908) 722-0700 Fax: 908-722-0755 Email: msbauer@nmmlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Lawrence S. Berger, manager of general partner. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-28225.pdf STEEL DYNAMICS: Moody's Rates $1-Bil. Sr. Unsecured Notes 'Ba2' --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the $1.0 billion in guaranteed senior unsecured notes issued by Steel Dynamics Inc. (SDI). The notes will mature in equal amounts, in October 2021 and October 2024. In addition, Moody's assigned a SGL-1 speculative grade liquidity rating. At the same time, Moody's affirmed the Ba1 corporate family rating (CFR), the Ba1-PD probability of default rating, and the Ba2 rating on the existing senior secured notes. The outlook is stable. Proceeds from the new notes issue together with cash and borrowings under SDI's asset backed revolving credit facility will be used fund the $1.625 billion acquisition of Severstal North America's subsidiary Severstal Columbus. Should the acquisition not close prior to the issuance of the notes, the notes will be placed into escrow until the acquisition closes and other stated requirements are met. Assignments: Issuer: Steel Dynamics, Inc. Speculative Grade Liquidity Rating, Assigned SGL-1 Senior Unsecured Regular Bond/Debenture (Local Currency) 2021, Assigned Ba2, LGD4 Senior Unsecured Regular Bond/Debenture (Local Currency) 2024, Assigned Ba2, LGD4 Outlook Actions: Issuer: Steel Dynamics, Inc. Outlook, Remains Stable Affirmations: Issuer: Steel Dynamics, Inc. Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating (Local Currency), Affirmed Ba1 Senior Unsecured Regular Bond/Debenture (Local Currency) Apr 15, 2023, Affirmed Ba2, Changed to LGD4 from LGD5 Senior Unsecured Regular Bond/Debenture (Local Currency) Aug 15, 2019, Affirmed Ba2, Changed to LGD4 from LGD5 Senior Unsecured Regular Bond/Debenture (Local Currency) Aug 15, 2022, Affirmed Ba2, Changed to LGD4 from LGD5 Senior Unsecured Regular Bond/Debenture (Local Currency) Mar 15, 2020, Affirmed Ba2, Changed to LGD4 from LGD5 Ratings Rationale SDI's Ba1 CFR considers its low cost mini-mill operating structure and its diversified product mix, as the company continues to shift toward higher value-added steel and specialty alloys. The rating also acknowledges the ongoing but slow recovery in a number of end markets, which should benefit sales volumes and capacity utilization rates in the steel making operations. In addition, Moody's believe that SDI is among the lowest cost steel producers in the US, on a per ton basis, which enables the company to better manage through periods of low prices and sluggish demand. Given the significant increase in debt to fund the acquisition and initial pressure on debt protection metrics and leverage, SDI's CFR rating has little cushion to absorb further debt increases or earnings deterioration. However, from a business perspective, the acquisition is seen as providing strategic value to SDI. A relatively new and low cost minimill in Columbus, Mississippi, Columbus has an approximate capacity of 3.4 million tons of hot- rolled sheet, as well as 1.4 million tons of cold rolled sheet and roughly 1.1 million net tons of galvanized sheet. Consequently, SDI's steel production capacity will increase by over 40% to around 11 million tons pro forma for the transaction. Columbus' product capability is complimentary to SDI's and will provide greater capacity into key areas such as automotive while providing greater access to other markets. In addition, the acquisition broadens SDI's geographic footprint into the Southern and Southeastern US markets (current coverage is predominately Midwestern), and provides SDI with the ability to produce wider width and heavier gauge products. The acquisition will also enable SDI to better manage and optimize its production schedules in light of location and market demand. Based upon commentary in Severstal OAO's first half 2014 results announcement as to EBITDA/ton at Columbus, Moody's estimate that proforma for this transaction, SDI's leverage, as measured by the debt/EBITDA ratio, could increase to a range between 3.5x and 3.8x, as compared to its 2.7x ratio for the twelve months ended June 30, 2014. However, the CFR anticipates that with the added shipment capacity and enhanced earnings profile, debt protection metrics and leverage will return to levels more in line with the Ba1 CFR rating within the next 12 months. SDI's rating is constrained by the lengthy and slow improvement in non-residential construction, an end market served primarily by SDI's steel fabrication and structural steel operations. While the downward demand trajectory in the non-residential construction sector has bottomed, year-on-year improvement remains modest and ongoing recovery is expected to remain slow through the balance of 2014 although it is showing positive momentum. In addition, the rating considers the ongoing challenges and loss incurrence at the Minnesota Operations as SDI seeks to address a number of issues. The SGL-1 speculative grade liquidity rating considers the company's cash generating capacity and favorable debt maturity profile. Liquidity is enhanced by the company's $357 million cash position at June 30, 2014 and external liquidity is supported by a $1.1 billion asset-based senior secured revolving credit facility that expires in September 2016. The facility is secured by accounts receivable, inventory, and pledges of shares of certain subsidiaries' capital stock. The facility was fully available at June 30, 2014. The credit facility is subject to three financial maintenance covenants, including a minimum interest coverage ratio of 2.5x and a maximum net debt/EBITDA ratio of 5.0x. In addition, if total debt/EBITDA exceeds 3.5x at any time, then the ability of the company to make restricted payments (dividends and stock repurchases) could be limited. At June 30, 2014, SDI's interest coverage ratio and net debt/EBITDA ratio were 5.88x and 2.06x respectively. Moody's expect that the company will comply with its covenant requirements with ample cushion over the next four quarters. The Ba2 rating on the senior unsecured notes reflects their more junior position, under Moody's loss given default methodology given the $1.1 billion asset backed revolving credit facility (ABL), the $200 million secured term loan facility, and priority accounts payable. The stable outlook incorporates Moody's expectation for deleveraging in the near term. The outlook also considers that SDI will evidence an improving earnings profile on the favorable trends in its steel making operations, a continued turnaround in the structured steel and fabrication divisions, the strength in the automotive and other markets served by the company and the benefits of scale that the Columbus acquisition will bring. A downward rating action could occur should SDI's debt/EBITDA exceed 4.0x, EBIT/interest track below 3.0x, and free cash flow generation is negative, all on a sustainable basis. In addition, given the likely draw down on the company's cash position and borrowings under the ABL facility to provide funding for the acquisition, the rating could be negatively impacted should liquidity significantly contract. Given the continued slow recovery in the structural steel and downstream fabrication divisions, and the increased leverage resulting from the Columbus acquisition, a ratings upgrade is unlikely over the near term. However, should SDI sustain debt/EBITDA under 3.0 x, EBIT/interest coverage above 4.0 x, EBIT margins in the mid teens, and consistently generate free cash flow, its ratings and/or outlook could be favorably impacted. However, upward rating movement to investment grade is constrained by the secured nature of the ABL revolver and term loan facility. Headquartered in Fort Wayne, Indiana, SDI manufactures steel thorough its domestic minimills. In addition, the company ranks among the largest scrap processors in the US and operates steel fabrication facilities, which manufacture trusses, girders, joists and decking. SDI also has two iron-making facilities (Iron Dynamics and Minnesota Operations, which includes the 81% owned Mesabi Nugget. For the twelve months ended June 30, 2014 the company had revenues of $7.7 billion. The principal methodology used in this rating was Global Steel Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. STEEL DYNAMICS: S&P Affirms 'BB+' CCR & Rates $1BB Notes 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Fort Wayne, Ind.-based Steel Dynamics Inc. (SDI) and its 'BB+' credit ratings on SDI's senior unsecured debt. The recovery rating on the debt remains '3'. S&P also removed the credit ratings from CreditWatch, where it placed them with negative implications on July 25, 2014. The outlook is stable. At the same time, S&P assigned its 'BB+' issue-level rating and '3' recovery rating to SDI's new $1 billion of senior unsecured notes. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of payment default. "Our stable outlook on SDI reflects our expectation for robust organic EBITDA growth and a substantial EBITDA contribution from Columbus in 2014 and 2015, which will enable some deleveraging by the end of 2015," said Standard & Poor's credit analyst Gail Hessol. S&P forecasts a decline in adjusted leverage to about 3x as of Dec. 31, 2015, compared with 3.4x as of June 30, 2014, pro forma for the Columbus acquisition. S&P also believes the company's growth goals will generally keep leverage in the 3x to 4x range. S&P could lower its rating if it expected leverage higher than 4x and FFO to debt less than 20% on a sustained basis. This could occur if the company adopts more aggressive financial policies or as a result of declining demand in key markets, excess steel industry capacity (including imports into the U.S.) that pressures prices, or other factors. S&P would consider raising its rating if it believed SDI would sustain adjusted leverage less than 3x and FFO to debt greater than 30%. An upgrade would also be predicated on SDI maintaining strong liquidity as a cushion for unexpected weakness in its volatile operating environment. SYNOVUS FINANCIAL: Moody's Puts 'B1' Sr. Debt Rating on Review -------------------------------------------------------------- Moody's Investors Service placed the long-term ratings of Synovus Financial Corp. and its bank subsidiary, Synovus Bank, on review for upgrade. Synovus Financial Corp. is rated B1 for senior debt. Synovus Bank has a long-term bank deposit rating of Ba2 and a standalone bank financial strength rating of D, mapping to a standalone baseline credit assessment of ba2. The Not Prime short- term ratings of the bank were affirmed and are not on review. Ratings Rationale The review reflects the progress Synovus has made in enhancing its risk profile. Synovus has substantially reduced its commercial real estate (CRE) concentration and improved its asset quality metrics. Although its CRE exposure, which equals 3 times its Tier 1 Capital, is high relative to peers, it is almost a 50% reduction from its peak in 2007. Most of this reduction is the result of its shrinking construction and land exposure, which Moody's viewed as the riskiest component of its CRE exposure. Additionally, nonperforming assets (NPAs: nonaccrual, 90 + days past due, OREO, and accruing troubled debt restructured loans) have fallen 36% over the last year to 4% of loans and OREO, which is still high relative to peers. This included a large 19% decline in the second quarter of 2014 from pay-offs and charge-offs, which were fully covered by reserves. Improvements in Synovus' asset quality have been notable, but the high historical NPAs have been a source of volatility in operating performance. Therefore, Moody's review will focus on Synovus' efforts to further improve its risk management profile and maintain consistent earnings. The review will consider the ability of its enhanced centralized risk management to manage underwriting standards and avoid rebuilding of its CRE concentration, while at the same time continuing its progress in reducing NPAs and diversifying its loan portfolio. The review will also consider the sustainability and potential improvement in Synovus' risk-weighted profitability metrics. TEINE ENERGY: S&P Assigns 'B' CCR; Outlook Stable ------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Calgary, Alta.-based Teine Energy Ltd. The outlook on the credit rating is stable. At the same time, Standard & Poor's assigned its 'CCC+' senior unsecured debt rating and a '6' recovery rating to Teine's proposed US$350 million senior unsecured debt issue. The recovery rating indicates S&P's expectation of negligible (0%-10%) recovery under our default scenario. Teine is an exploration and production (E&P) company focused on conventional light crude oil production in Saskatchewan. "Although we believe Teine's overall credit profile will remain constrained by the limited scale and scope of its operations, and by the development risks we attribute to the company's lower level of proved developed reserves, the company's good cost structure and strong netbacks should ensure it generates sufficient internal cash flow to internally fund its organic growth objectives beyond 2014," said Standard & Poor's credit analyst Michelle Dathorne. "Although our estimated unit earnings before interest and taxes should remain in the top quartile for the rated E&P companies, we believe Teine's profitability remains vulnerable to heightened volatility, due to the small scale of the company's operations," Ms. Dathorne added. The rating on Teine reflects Standard & Poor's assessment of the company's small liquids-focused reserves base, regional focus in one producing area in the Western Canada Sedimentary Basin, and the heightened development risk inherent in the company's low percentage of proved developed (PD) reserves. These weaknesses, which constrain the rating, are partially offset by the company's good full-cycle cost profile and robust cash flow generation, as its product mix is heavily weighted toward high API gravity light oil production, low balance-sheet debt, and relatively strong cash flow protection metrics. S&P's "vulnerable" business risk profile assessment reflects Teine's relatively small reserve and production base and limited geographic diversity, which are somewhat offset by the company's competitive cost structure and exposure to high oil prices, which results in above-average profitability. S&P views Teine's financial risk profile as "aggressive." Based on S&P's production and capital spending estimates, it forecasts the company's fully adjusted debt to EBITDA to improve to about 1.0x by the end of fiscal year-end 2016. However, S&P do not anticipate the company's debt to EBITDA will remain below 2.0x for a prolonged period. S&P believes Teine could leverage its balance sheet to supplement its anticipated organic growth with acquisitions. The stable outlook reflects S&P's view that Teine should be able to continue expanding its reserves and production through the drill-bit, while maintaining its cash flow adequacy and leverage metrics at relatively strong levels. S&P could lower the ratings if Teine's credit measures weakened such that the company's five-year weighted average funds from operations to debt were to fall below 30% without a clear path to deleveraging. This could occur if Teine made a material debt- financed acquisition that was not sufficiently accretive to cash flow generation. An upgrade would depend on an improving business risk profile without material deterioration in the company's financial risk profile. In S&P's opinion, Teine's low PD ratio heightens its operating risk profile, so S&P believes the company's overall business risk profile would improve as it increases the PD component of its proved reserves base. In Standard & Poor's rated E&P universe, 'B+' rated companies have PD reserves ratios in the 45%-75% range. The stable outlook reflects S&P's view that Teine should be able to continue expanding its reserves and production through the drill-bit, while maintaining its cash flow adequacy and leverage metrics at relatively strong levels. S&P could lower the ratings if Teine's credit measures weakened such that the company's five-year, weighted average FFO to debt were to fall below 30% without a clear path to deleveraging. This could occur if Teine made a material debt-financed acquisition that was not sufficiently accretive to cash flow generation. An upgrade would depend on an improving business risk profile without material deterioration in the company's financial risk profile. In S&P's opinion, Teine's low PD ratio heightens its operating risks, so S&P believes the company's overall business risk profile would improve as it increases the PD component of its proved reserves base. In Standard & Poor's rated E&P universe, 'B+' rated companies have PD reserves ratios in the 45%-75% range. TEJANO CENTER: S&P Affirms B+ Rating on $24.45MM 2009A Rev. Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to stable from negative and affirmed its 'B+' long-term rating on Clifton Higher Education Finance Corp., Texas' $24.45 million series 2009A charter school education revenue bonds supported by Tejano Center for Community Concerns Inc. (TCCC) for the Raul Yzaguirre School for Success Project (RYSS), an open-enrollment charter school that primarily serves economically disadvantaged students. "The outlook revision reflects our view that TCCC has cured its events of default, improved operations in fiscal 2013, and improved operational liquidity," said Standard & Poor's credit analyst Kevin Holloran. TEMPLAR ENERGY: S&P Rates New $550MM 2nd Lien Term Loan 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' issue-level rating (one notch below the corporate credit rating) and '5' recovery rating to Oklahoma City-based Templar Energy LLC's proposed $550 million second-lien term loan maturing in 2021. The '5' recovery rating indicates S&P's expectation of modest (10% to 30%) recovery in the event of default. S&P understands the proposed term loan will be pari passu with the company's existing $900 million second-lien term loan. In addition, S&P expects the company to amend its first-lien reserve-based lending facility to a $1.3 billion committed facility with an initial borrowing base of $625 million. The issue-level rating on the company's existing second-lien term loan remains unchanged at 'B-' with a recovery rating of '5'. The company plans to use the proceeds of the proposed term loan to partially finance the acquisition of Granite Wash assets from Newfield Exploration Co. for $588 million. The 'B' corporate credit rating on Templar Energy LLC reflects S&P's assessment of the company's "weak" business risk and "highly leveraged" financial risk profiles. The positive outlook on Templar reflects S&P's expectation that the company will close the transaction with the proposed financing and amendments to its RBL facility and will continue to expand its reserves and production. S&P could raise the rating if the company decreased leverage to below 4x and increased funds from operations to debt to above 20% on a sustained basis while also maintaining adequate liquidity. Ratings List Templar Energy LLC Corporate Credit Rating B/Positive/-- New Rating Templar Energy LLC $550 mil 2nd-lien term loan due 2021 B- Recovery Rating 5 TMT GROUP: 5th Cir. Says Vantage Shares Not Property of Debtors --------------------------------------------------------------- A three-judge panel of the United States Court of Appeals, Fifth Circuit, vacated rulings by the district and bankruptcy courts in the dispute involving TMT Procurement Corporation and its affiliated debtors, against Vantage Drilling Company, an offshore drilling company. The combined effect of those rulings was to place certain shares of Vantage stock in custodia legis with the clerk of the court. The Fifth Circuit, however, held that both courts lacked subject-matter jurisdiction, and the Vantage Shares are not "property of the estate." The Fifth Circuit also held that Vantage's claim in its 2012 state court action against Hsin-Chi Su, also known as Nobu Su, alleging breach of fiduciary duty, fraud, fraudulent inducement, negligent misrepresentation, and unjust enrichment, was not "related to" the Debtors' Chapter 11 proceedings. The 23 foreign marine shipping companies that filed for bankruptcy were each owned directly or indirectly by Su. The Fifth Circuit also said that before the district court and the bankruptcy court exercised jurisdiction over the Vantage Shares, the outcome of the Vantage Litigation could not have had any conceivable effect on the Debtors' estate. "In essence, the Debtors have again attempted to use the orders as 'jurisdictional bootstrap[s]' by arguing that the Vantage Litigation is 'related to' the Debtors' Chapter 11 proceedings because the orders have linked them. This we cannot allow," the Fifth Circuit said. A copy of the Court's per curiam decision dated September 3, 2014, is available at http://is.gd/PFZuGCfrom Leagle.com. About TMT Group Known in the industry as TMT Group, TMT USA Shipmanagement LLC and its affiliates own 17 vessels. Vessels range in size from 27,000 dead weight tons (dwt) to 320,000 dwt. TMT USA and 22 affiliates, including C. Ladybug Corporation, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13- 33740) in Houston, Texas, on June 20, 2013 after lenders seized seven vessels. TMT filed a lawsuit in U.S. bankruptcy court aimed at forcing creditors to release the vessels so they can return to generating income. TMT has tapped attorneys from Bracewell & Giuliani LLP as bankruptcy counsel and AlixPartners as financial advisors. On a consolidated basis, the Debtors have $1.52 billion in assets and $1.46 billion in liabilities. TMT USA: Proposes Application of Excess Proceeds in Sold Vessels ---------------------------------------------------------------- TMT Procurement Corporation and its affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to enter an order concerning the application of certain excess vessel sale proceeds. Pursuant to certain sale orders, the relevant Vessel Debtors have consummated the sale of these vessels: A Duckling, C Whale, B Max, A Handy, B Handy, C Handy, B Whale, A Whale, D Whale, G Whale and H Whale. Pursuant to certain lift stay orders, the relevant secured parties and admiralty courts have sold A Ladybug, C Whale and E Whale. Pursuant to the Relevant Sale Orders, the Debtors' amended omnibus motion seeks approval of the proposed application of the Excess Proceeds or, in the case of the A Duckling, the proposed revised application as it relates to the Carve-Out Payment. Where cash collateral has been used to pay or reserve for Vessel- Specific Professional Fees or where the lenders have agreed to pay out-of-pocket the Vessel-Specific Professional Fees, such Vessel- Specific Professional Fees will remain subject to Court approval, William A. (Trey) Wood III, Esq., at Bracewell & Giuliani LLP, in Houston, Texas -- Trey.Wood@bgllp.com -- says. He adds that to the extent the Court disallows any Vessel-Specific Professional Fees, the disallowed amount will, first, be credited against future Vessel-Specific Professional Fees for the relevant Debtor; second, be credited against future Non-Vessel Specific Professional Fees; and third, if the disallowed amount exceeds both, disgorged by the relevant professional after entry of the orders approving final fee applications. As of the filing of the Motion, the United States Court of Appeals for the Fifth Circuit has not yet issued its decision in Case No. 13-20622. Accordingly, (i) all Excess Proceeds deposited into the 345 Account, including the Synthetic Repayment, the Accrued Fees Amount and the 345 Balance, for so long as those proceeds remain in the 345 Account, and (ii) any amounts credited to Non-Vessel Specific Professional Fees, will remain, at all times, fully subject to the Proceeds Rights of the DIP Lender until the DIP Obligations are paid indefeasibly in full in cash, Mr. Wood asserts. In addition, all Excess Proceeds deposited into the 345 Account, including the Synthetic Repayment, the Accrued Fees Amount and the 345 Balance will also remain fully subject to the Proceeds Rights of any other party-in-interest until the party-in-interest's Proceeds Rights are extinguished by reason of repayment of the underlying obligation or otherwise. The Carve-Out Payment is being applied to Professional pursuant to the payment and subordination provisions with respect to the Carve-Out, whereupon the Carve-Out will be treated as paid in full. The Carve-Out Payments for each Relevant Debtor are pro rata based on the Priority Payment Amounts for each Relevant Debtor. With respect to the proceeds from the sale of the A Duckling, the Synthetic Repayments and Accrued Fees Amount, plus an additional amount as the "Carve-Out Amount," were applied against the then- Carve-Out in the total amount of $4,270,458, Mr. Wood notes. He asserts that so that the Carve-Out Payments for all Relevant Debtors (including A Duckling Corporation) are fairly allocated Pro Rata, the aggregate amount for the Carve-Out Payments has been grossed up to the Carve-Out in the amount of $7,084,145, and then allocated Pro Rata among all the Relevant Debtors. Nobu Su and F3 Capital Object Hsin Chi Su, also known as Nobu Su, and F3 Capital, which is owned and controlled by Mr. Su, assert that the Motion does not adequately describe the actual relief sought, citing Section 8(a)(2) of the Federal Rules of Civil Procedure that requires short and plain statement of claim. Earlier in the case, F3 Capital pledged Vantage Drilling stock to secure the DIP lender. Eventually, that stock was liquidated and the proceeds were used to repay the DIP lender. F3 Capital has an administrative claim of at least $16.5 million against the bankruptcy estates for repayment of the DIP loan, relates Annie E. Catmull, Esq., in Houston, Texas. Ms. Catmull contends that the language of the proposed order sheds no light, either. She notes that the proposed order is filled with text that defines the relief granted by references back to the unduly vague "Motion." She adds that the Motion does not describe a statute, case, or rule that entitles the Debtors to the inadequately described relief sought. In response to the objection, the Debtors contend that F3 Capital and Mr. Su have been provided both with ample time and voluminous detailed information to enable them to be prepared for the hearing as scheduled with respect to the Motion. About TMT Group Known in the industry as TMT Group, TMT USA Shipmanagement LLC and its affiliates own 17 vessels. Vessels range in size from approximately 27,000 dead weight tons (dwt) to approximately 320,000 dwt. TMT USA and 22 affiliates, including C. Ladybug Corporation, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13- 33740) in Houston, Texas, on June 20, 2013 after lenders seized seven vessels. TMT filed a lawsuit in U.S. bankruptcy court aimed at forcing creditors to release the vessels so they can return to generating income. TMT has tapped attorneys from Bracewell & Giuliani LLP as bankruptcy counsel and AlixPartners as financial advisors. On a consolidated basis, the Debtors have $1.52 billion in assets and $1.46 billion in liabilities. TMT USA: Su Responds to Motion to Clarify Matters in Lawsuits ------------------------------------------------------------- Hsin Chi Su, also known as Nobu Su, files a response on TMT Procurement Corporation and its affiliates' motion concerning his litigation in the District Court. The Debtors had asked the U.S. Bankruptcy Court for the Southern District of Texas to clarify these matters: (a) TMT is concerned as to whether it was proper to file the Su complaints directly with the District Court; (b) the Su complaints appear to regurgitate the same failed arguments presented to the Bankruptcy Court; and (c) under the sale orders, any monetary claims that Mr. Su may have against TMT remain with the Bankruptcy Court for future adjudication. To be clear, the purchasers of the vessels are not defendants in the complaints pending before the U.S. District Court, asserts Annie E. Catmull, Esq., in Houston, Texas. She notes that the sale orders in the bankruptcy cases do "not authorize any person, purchaser, successor or assign to incorporate or utilize any patented technology in any other vessel [i.e., a vessel that was not sold by the bankruptcy estates] or thing." Mr. Su has alleged that he owns certain patented technology and design used in the Debtors' vessels. Ms. Catmull tells the Court that Mr. Su's amended complaints make clear that the complained-of request for relief "is sought subject to the results of Mr. Su's pending appeal of the sales orders." Hence, Mr. Su contends that it was reversible error for the Bankruptcy Court to enter the orders approving vessel sales over his objections. Su Raises New Concern, Debtors Observe Mr. Su has addressed most of the issues raised, but he has also raised a new concern, the Debtors tell the Bankruptcy Court. The Debtors were concerned as to the procedural posture of commencing lawsuits directly in the District Court as to which Mr. Su might be attempting to seek the adjudication by the District Court of matters that Mr. Su would then seek to apply in the Bankruptcy Court on the basis of collateral estoppel. The Debtors were concerned that the District Court lawsuits could be perceived as collateral attacks on the Bankruptcy Court's Sale Orders, William A. (Trey) Wood III, Esq., at Bracewell & Giuliani LLP, in Houston, Texas -- Trey.Wood@bgllp.com -- says. He notes that Mr. Su's Response confirms that the lawsuits are "subject to the results of Mr. Su's pending appeal of the sales orders." The Debtors requested specific relief against Mr. Su in the form of notice and pleadings with respect to any other litigation anywhere in the world with respect to his asserted patent rights. The Debtors remain concerned that Mr. Su might commence litigation in other courts that he would seek to use in support of claims he might assert against them, Mr. Wood says. He asserts that all that the Debtors seek is notice of that litigation so that the Debtors can presumably confirm that any litigation has no relevance to the Debtors. About TMT Group Known in the industry as TMT Group, TMT USA Shipmanagement LLC and its affiliates own 17 vessels. Vessels range in size from approximately 27,000 dead weight tons (dwt) to approximately 320,000 dwt. TMT USA and 22 affiliates, including C. Ladybug Corporation, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13- 33740) in Houston, Texas, on June 20, 2013 after lenders seized seven vessels. TMT filed a lawsuit in U.S. bankruptcy court aimed at forcing creditors to release the vessels so they can return to generating income. TMT has tapped attorneys from Bracewell & Giuliani LLP as bankruptcy counsel and AlixPartners as financial advisors. On a consolidated basis, the Debtors have $1.52 billion in assets and $1.46 billion in liabilities. TMT USA: Faces Lawsuit Over Patented Technology Used in Vessel -------------------------------------------------------------- Hsin Chi Su, also known sa Nobu Su, commenced an adversary proceeding against F Elephant, Inc., in the bankruptcy cases of TMT Procurement Corporation and its affiliates. F Elephant, Inc. is a corporation existing under the laws of the Marshall Islands and is a debtor in the Chapter 11 bankruptcy case. Mr. Su is a guarantor of certain debts owed by the Defendant, in his capacity as the holder of several patents on technology included in the Vessel, and in his capacity as director of the equity holders of the Defendant. The countries of Japan, Korea, and China awarded Mr. Su patents on certain technology and design used by the M.V. Fortune Elephant. No Court of the United States has jurisdiction to determine the validity or enforceability of a foreign patent. However, with Mr. Su's consent, the Bankruptcy Court ordered the sale of the Vessel free and clear of all Alleged Su IP Claims and further ordered that any allowed Alleged Su IP Claims will be paid, if at all, from the Final Net Proceeds subject to determination by the Bankruptcy Court or the United States District Court for the Southern District of Texas of the extent and priority of any claims, or ownership interests if so determined by the Bankruptcy Court or the District Court. Annie E. Catmull, Esq., in Houston, Texas, contends that Mr. Su holds a property interest in patents, including the Asian Patents, that he owns and that was never transferred to the Defendant. She insists that Mr. Su's patent rights are separate and distinct from the Vessels. Accordingly, Mr. Su asks the Bankruptcy Court to, among other things, declare that he has a valid claim against the bankruptcy estate of F Elephant, Inc., that the valid claim is entitled to an administrative claim in the amount of the value of the loss of his intellectual property rights, and that he is entitled to the monetary value of the loss of his intellectual property rights in the amount of no less than $100 million, plus interest at a rate of 8.25% and awarding damages to him in that amount. About TMT Group Known in the industry as TMT Group, TMT USA Shipmanagement LLC and its affiliates own 17 vessels. Vessels range in size from approximately 27,000 dead weight tons (dwt) to approximately 320,000 dwt. TMT USA and 22 affiliates, including C. Ladybug Corporation, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13- 33740) in Houston, Texas, on June 20, 2013 after lenders seized seven vessels. TMT filed a lawsuit in U.S. bankruptcy court aimed at forcing creditors to release the vessels so they can return to generating income. TMT has tapped attorneys from Bracewell & Giuliani LLP as bankruptcy counsel and AlixPartners as financial advisors. On a consolidated basis, the Debtors have $1.52 billion in assets and $1.46 billion in liabilities. TODD-SOUNDELUX: Obtains Approval to Sell Assets ----------------------------------------------- Joseph Checkler, writing for The Wall Street Journal, reported that sound equipment company Todd-Soundelux LLC has obtained approval for a liquidator to sell all of its sound equipment, including the Burbank, California studio responsible for the postproduction sound of hit shows like "Mad Men" and "Game of Thrones." According to report, Tiger Group and GA Global Partners obtained the right to sell the studio and all equipment inside. The company has been a Hollywood landmark for more than 50 years, providing sound services to thousands of films and TV shows including The Hunger Games, Skyfall, Django Unchained, Divergent, The Heat, The Lone Ranger, 42, Pacific Rim, The Dark Knight, The Twilight Saga: Breaking Dawn, Inception, Mad Men, CSI, CSI: NY, Person Of Interest, Family Guy and HBO's Game Of Thrones, Entourage, Big Love, Girls and The Newsroom, the report said. Todd-Soundelux, LLC, sought protection under Chapter 11 of the Bankruptcy Code on May 21, 2014 (Case No. 14-19980, Bankr. C.D. Calif.). The case is assigned to Judge Sandra R. Klein. The Debtor's counsel is Leslie A Cohen, Esq., at Leslie Cohen Law PC, in Santa Monica, California. TPC GROUP: Moody's Affirms B2 Corp. Family Rating; Outlook Neg. --------------------------------------------------------------- Moody's Investors Service affirmed TPC Group Inc's B2 corporate family rating (CFR) and B2-PD probability of default rating (PDR), but revised the outlook to negative. Moody's also affirmed the B3 rating on TPC's senior secured notes due 2020. The revision of the rating outlook to negative reflects expectations that TPC's leverage will remain elevated over the next 12 to 15 months following operational difficulties in the second quarter of 2014 that will adversely impact results in the second and third quarters, ongoing weakness in the butadiene market, and expected increase in debt to finance capacity expansions. Moody's took the following actions: Ratings affirmed: TPC Group Inc. Corporate Family Rating B2 Probability of Default Rating B2-PD $755 million 8.75% senior secured notes due 2020 B3 Revised outlook to negative Ratings Rationale TPC's B2 CFR reflects its narrow business profile with a limited product portfolio as well as limited geographic and operational diversity with three plants located in Texas near the Gulf Coast. The rating also reflects difficult business conditions in the C4 chain, high leverage, and lack of free cash flow generation due to ongoing capital projects. TPC's Debt/EBITDA rose to 6.6x in the LTM ended June 30, 2014 as the company experienced operational difficulties due to a five-day closure of the Houston ship channel, supplier and customer outages, as well as outages at the company's Houston facility. The events negatively affected TPC's earnings in the second quarter of 2014 and will have further negative earnings implications in the third quarter of 2014. Given ongoing weakness in the market for butadiene, limited availability of crude C4s in North America, recent operating challenges, and increased capital expenditures, Moody's expects leverage to remain elevated over the next 12 to 15 months and are concerned that without meaningful improvement the rating could be lowered. It is unlikely that the CFR would be upgraded before the company completes its first major capital project. The ratings could be upgraded if leverage (Debt/EBITDA) declined below 4.0x on a sustained basis and the company produced positive free cash flow supportive of a higher rating. Ratings could be downgraded if the company is unable to maintain its margins, if Debt/EBITDA remains above 6x for a sustained period, or if liquidity falls below $50 million. TPC Group Inc. (TPC) is a processor of crude C4 hydrocarbons (primarily butadiene, butene-1, isobutylene), differentiated isobutylene derivatives and nonene and tetramer. For its product lines, TPC is the largest independent North American producer. The company operates three Texas-based manufacturing facilities in Houston, Baytown, and Port Neches. Revenues were approximately $1.7 billion for the twelve months ended June 30, 2014. TPC is owned by private equity funds managed by First Reserve Management, L.P. and SK Capital Partners. The principal methodology used in this rating was Global Chemical Industry Rating Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TRANS ENERGY: Settles Claims Over Clean Water Act Violations ------------------------------------------------------------ The U.S. Environmental Protection Agency, the West Virginia Department of Environmental Protection, and the Department of Justice announced a settlement with Trans Energy Inc., requiring the oil and gas company to restore portions of streams and wetlands at 15 sites in West Virginia polluted by the company's unauthorized discharge of dredge or fill material. Trans Energy will pay a penalty of $3 million to be divided equally between the federal government and WVDEP. The Clean Water Act requires a company to obtain a permit from EPA and the U.S. Army Corps of Engineers prior to discharging dredge or fill material into wetlands, rivers, streams, and other waters of the United States. "As part of our commitment to safe development of domestic energy supplies, EPA is working to protect wetlands and local water supplies on which communities depend," said Cynthia Giles, assistant administrator of EPA's Office of Enforcement and Compliance Assurance. "By enforcing environmental laws, we're helping to ensure a level playing field for responsible businesses." "T[he] agreement requires that Trans Energy take important steps to comply with state and federal laws that are critical to protecting our nation's waters, wetlands and streams," said Sam Hirsch, Acting Assistant Attorney General of the Justice Department's Environment and Natural Resources Division. "We will continue to ensure that the development of our nation's domestic energy resources, including through the use of hydraulic fracturing techniques, complies with the Clean Water Act and other applicable federal laws." In addition to the penalty, the company will reconstruct impacted aquatic resources or address impacts at 15 sites, provide appropriate compensatory mitigation for impacts to streams and wetlands, and implement a comprehensive program to ensure future compliance with Section 404 of the Clean Water Act and applicable state law. Among other requirements, the company will work to ensure that all aquatic resources are identified prior to starting work on future projects in West Virginia, and that appropriate consideration is given at the design stage to avoid and minimize impacts to aquatic resources. It is estimated that Trans Energy will spend more than $13 million to complete the restoration and mitigation work required by the consent decree. The federal government and WVDEP allege that the company impounded streams and discharged sand, dirt, rocks and other materials into streams and wetlands without a federal permit to construct well pads, impoundments, road crossings and other facilities related to natural gas extraction. The government alleges the violations impacted approximately 13,000 linear feet of stream and more than an acre of wetlands. Filling wetlands illegally and damming streams can result in serious environmental consequences. Streams, rivers, and wetlands benefit the environment by reducing flood risks, filtering pollutants, recharging groundwater and drinking water supplies, and providing food and habitat for aquatic species. EPA discovered the violations in 2011 and 2012 through information provided by WVDEP and the public, and through routine field inspections. In summer 2014, the company conducted an internal audit and ultimately disclosed to EPA alleged violations at eight additional locations, which are also being resolved through this Consent Decree. The settlement also resolves alleged violations of state law brought by WVDEP. The consent decree has been lodged in the Northern District of West Virginia and is subject to a 30-day public comment period and court approval. For more information http://is.gd/bBN6Vb About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. Trans Energy reported a net loss of $17.7 million in 2013 following a net loss of $21.2 million in 2012. The Company's balance sheet at June 30, 2014, showed $93.78 million in total assets, $113.79 million in total liabilities, and a $20 million total stockholders' deficit. TRIBECA MARKET: 40% Reduction of Pick & Zabicki's Fees Affirmed --------------------------------------------------------------- Pick & Zabicki LLP appeals from an order entered in the United States Bankruptcy Court for the Southern District of New York (Glenn, J.) awarding fees to P&Z for professional services rendered as counsel to the Official Committee of Unsecured Creditors in In re Tribeca Market, LLC, Case No. 11-10737 (MG) (Bankr. S.D.N.Y.). The Bankruptcy Court reduced P&Z's fee application by 40%, after finding that P&Z had filed (and billed for) multiple court submissions on behalf of the Creditors' Committee without convening a single in-person or telephonic meeting of that Committee -- which, in the Court's estimation, raised "serious questions" about P&Z's representation of the Creditors' Committee. G.M. Data Corp. cross-appeals, arguing that the Bankruptcy Court not only had the discretion to reduce P&Z's fees by 40%, but also could, and should, have reduced the fees even further, up to 100%. District Judge Katherine Polk Failla said the Bankruptcy Court did not abuse its discretion in assessing the reduction. However, because of a minor arithmetic error, the Court will vacate the Bankruptcy Court's order and remand the matter for the limited purpose of correcting the error. "The Bankruptcy Court made an arithmetic error in using the aggregate fees and costs amount of $124,803.07 that was initially sought by P&Z, which did not reflect the voluntary reduction of $2,412 undertaken in light of the U.S. Trustee's objections. Accordingly, the order is vacated and remanded to the Bankruptcy Court for the limited purpose of correcting the fee amount. The Clerk of Court is directed to close the case," Judge Polk Failla said. A copy of the District Court's Sept. 2, 2014 Opinion and Order is available at http://is.gd/VPcYVWfrom Leagle.com. Pick & Zabicki is represented by: Douglas J. Pick, Esq. PICK & SAFFER LLP 350 5th Ave Ste 3000 New York, NY 10118 G.M. Data Corp. is represented by: Avrum J. Rosen, Esq. Rodney Alan Brown, Esq. BROWN & WHALEN, P.C. 700 Third Avenue, 20th Floor New York, NY 10017 E--mail: rbrown@brownwhalen.com Tribeca Market, LLC, dba Amish Market, in New York, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-10737) on Feb. 22, 2011. The Law Offices of Stephen B. Kass serves as the Debtor's counsel. In its petition, Tribeca Market estimated $100,001 to $500,000 in assets and under $1 million in liabilities. The petition was signed by Armagan Tanir, managing member. An affiliate, Potato Farms, LLC, filed a Chapter 11 petition (Case No. 11-10735) on Feb. 22, 2010. TRM HOLDINGS: S&P Cuts CCR to 'CCC+' on Declining Profitability --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Ohio-based TRM Holdings Corp., the parent of gift retailer Things Remembered Inc., to 'CCC+' from 'B-'. The outlook is negative reflecting S&P's anticipation for further profitability and liquidity erosion and its belief the company's capital structure is unsustainable. At the same time, S&P lowered its issue-level ratings on the company's senior secured credit facility, consisting of a $30 million revolver and a $147.7 million term loan, to 'CCC+' from 'B-'. S&P's '3' recovery rating remains unchanged on these debt instruments, reflecting S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. Concurrently, S&P removed all ratings from CreditWatch with negative implications, where it placed them on June 26, 2014. "The downgrade reflects our belief that the company's operational challenges continue to erode the company's liquidity. Based on our projected performance for the company, we estimate Things Remembered will not generate sufficient cash flows to fund its operating and financing needs," said credit analyst Mariola Borysiak. "Although the company may not face a payment default over the next 12 months, we view the company's capital structure as unsustainable over the longer period of time." The outlook is negative reflecting S&P's anticipation for further profitability and liquidity erosion and our belief the company's capital structure is unsustainable in the long run and the company is dependent upon favorable business, financial, and economic conditions to meet its financial commitments. Downside scenario A downgrade could occur if the company violates its covenants, S&P believes a payment default on its debt obligations is likely, or the company is seeking restructuring. Upside scenario S&P do not believe a higher rating is possible in the next 12 months given declining performance trends and our expectation for negative free operating cash flow. An upgrade could be possible if S&P believes the company generates sufficient cash to cover its working capital and capital expenditures. TRULAND GROUP: Auctions Begin for Trucks, Trailers and Vans ----------------------------------------------------------- Catherine Ho, writing for The Washington Post, reported that Auction Markets and Blackbird Asset Services, which was hired by the estate for Truland Group, have begun selling off the company's 300 trucks, trailers and vans in an effort to recover money for creditors -- including former Truland employees who were not paid for their final days of work. According to the report, bidding for the first round of vehicles will close Sept. 5 and more auctions for the remaining vehicles are planned in the coming weeks. Truland Group Inc. designs and installs electrical infrastructure. The entities sought Chapter 7 protection after halting operations, according to a report by Daily Bankruptcy Review. The lead voluntary Chapter 7 case is In re The Truland Group Inc., 14-bk-12766, U.S. Bankruptcy Court, Eastern District of Virginia (Alexandria). UNIVERSAL COOPERATIVES: Gets Approval to Implement Incentive Plan ----------------------------------------------------------------- Universal Cooperatives Inc. received court approval to pay bonuses to employees who were involved in the sale of its assets to BCHU Acquisition LLC. Two groups of employees are entitled to receive bonuses under an incentive plan. The first group, which is composed of employees who are likely to receive an offer of employment from BCHU, will be eligible for a one-time payment ranging from $2,500 to $15,200 upon closing of the sale. Meanwhile, the second group will be eligible for a one-time payment ranging from $2,500 to $25,000 upon closing of the sale; and an additional one-time payment ranging from $2,500 to $20,000 upon completion of transition services to the buyer or the filing of a liquidation plan. The second group is composed of employees who will continue to help the Eagan-based cooperative in administering its bankruptcy case as well as provide transition services to the buyer. Universal Cooperative on August 20 conducted an auction for some of its assets as well as assets of its two wholly-owned subsidiaries: Bridon Cordage in Albert Lea, Minnesota, and Heritage Trading Co. in Kansas City, Missouri. BCHU emerged as the winning bidder at the auction, beating out Tama Plastics USA, Inc. whose offer was selected as the "second highest bid," according to court filings. On August 26, U.S. Bankruptcy Judge Mary Walrath issued an order approving the sale of the assets to BCHU. About Universal Cooperatives As an inter-regional farm supply cooperative, Universal Cooperatives, Inc. consolidates the purchasing power of its members to procure, and/or manufacture, and distribute high quality products at competitive prices. Universal has 14 voting members and over 50 associate members. Eagan, Minnesota-based Universal Cooperatives and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14- 11187) on May 11, 2014. The debtor-affiliates are Heritage Trading Company, LLC; Bridon Cordage LLC; Universal Crop Protection Alliance, LLC; Agrilon International, LLC; and Pavalon, Inc. UCI do Brasil, a majority-owned subsidiary located in Brazil, is not a debtor in the Chapter 11 cases The cases are assigned to Judge Mary F. Walrath. Universal estimated $1 million to $10 million in assets and $10 million to $50 million in debt. Heritage estimated less than $10 million in assets and debt. The Debtors have tapped Travis G. Buchanan, Esq., Robert S. Brady, Esq., Andrew L. Magaziner, Esq., and Travis G. Buchanan, Esq., at Young Conaway Stargatt & Taylor, LLP; and Mark L. Prager, Esq., Michael J. Small, Esq., and Emil P. Khatchatourian, Esq., at Foley & Lardner LLP, as counsel; The Keystone Group, as financial advisor and Prime Clerk as notice and claims agent. Bank of America, N.A., as agent for the DIP Lenders, is represented by Daniel J. McGuire, Edward Kosmowski, Esq., and Gregory M. Gartland, Esq., at Winston & Strawn, LLP. The United States Trustee for Region 3 has appointed seven members to the Official Committee of Unsecured Creditors, which is represented by Sharon Levine, Esq., Bruce S. Nathan, Esq., and Timothy R. Wheeler, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey; and Jamie L. Edmonson, Esq., and Daniel A. O'Brien, Esq., at VENABLE LLP, in Wilmington, Delaware. U.S. DRY CLEANING: Has Debt-to-Equity Exchange Offer ---------------------------------------------------- U.S. Dry Cleaning Services Corporation, which emerged Chapter 11 protection in 2011, has filed documents with the Securities and Exchange Commission in relation to its bid to common shares. According to the prospectus, the company expects to issue roughly 13.8 million common shares and warrants. The sole book running manager for the offering is Maxim Group LLC. On August 25, 2014, U.S. Dry Cleaning entered into an agreement to purchase, upon the closing of the offering and subject to other customary closing conditions, substantially all of the assets of Advent Cleaners, LLC, for $4.0 million in cash, subject to adjustment. On July 23, 2014, U.S. Dry Cleaning entered into an exchange agreement with certain holders of its debt instruments, warrants and rights to purchase common stock to (i) exchange certain of the Company's secured and unsecured notes and loan agreements, under which an aggregate amount of $11,184,164 in principal and interest was outstanding as of August 22, 2014, for an aggregate of shares of common stock upon the closing of this offering, based upon an assumed public offering price for the common stock of $(_____) per share, which is the midpoint of the range; and (ii) exchange warrants and rights to purchase an aggregate of 224,059 shares of the common stock at exercise prices ranging from $(_____) (which is the midpoint of the range) to $32.00 per share for an aggregate of 112,032 shares of the common stock upon the closing of this offering (i.e., one share of common stock for each warrant representing the right to purchase two shares of common stock). The Advent deal will not be consummated if this offering cannot be consummated concurrently. The closing of the Exchange Agreement also is conditioned upon and shall close concurrently with this offering. As a result of the Exchange Offer, upon the closing of this offering and prior to application of the net proceeds of this offering, U.S. Dry Cleaning expects to have a total of approximately $(_________) in debt outstanding and no warrants or rights to purchase shares of the common stock outstanding (other than warrants to purchase (_______) shares of common stock issued in this offering). U.S. Dry Cleaning expects to repay up to $1.0 million of the $(__________) in debt that will be outstanding after the Exchange Offer with the proceeds of this offering. In addition, under the terms of the Exchange Agreement, certain holders of the Company's common stock have agreed to cancel 1,098,445 shares of common stock, including 871,882 shares of common stock initially issued under the terms of the Reorganization Agreement. In March 2012, the SEC issued an order revoking the registration of each class of the Company's securities registered pursuant to Exchange Act Section 12. The SEC ruling noted that the Company has failed to comply with Exchange Act Section 1 3(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the Quarterly Report on Form 10- QSB with respect to the fiscal quarter ended June 30, 2008, which was filed with the Commission on August 14, 2008. A copy of the prospectus is available at http://is.gd/4O6KLt U.S. Dry Cleaning is the largest owner-operator of dry cleaning and laundry stores in the United States, with 70 retail locations located in Arizona, Central California, Southern California, Hawaii, Indiana and Virginia. Given the financial crisis and the associated difficulties with raising capital in late 2008, U.S. Dry Cleaning was unable to repay or restructure debt obligations. As a result, on March 4, 2011, U.S. Dry Cleaning filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Central District of California. On September 23, 2011, the Bankruptcy Court confirmed the Company's Chapter 11 Plan of Reorganization, as modified. The Plan was effective upon confirmation. The Plan enabled the Company to eliminate a significant amount of outstanding debt and close or relocate 12 unprofitable stores, while still allowing stockholders to maintain a continuing equity interest in the company. USEC INC: Court Confirms Chapter 11 Plan ---------------------------------------- USEC Inc. (NYSE: USU) said Sept. 5 that the U.S. Bankruptcy Court for the District of Delaware has confirmed the Company's Plan of Reorganization and that it will emerge from Chapter 11 restructuring under the name Centrus Energy Corp. when the Plan becomes effective later in September. The confirmation of the Plan of Reorganization is the last major court step in the Chapter 11 bankruptcy process that USEC began March 5, 2014. The Plan received overwhelming support from investors who hold the Company's convertible notes and preferred equity. The Company anticipates that the Plan will become effective later in September, subject to satisfying all conditions for emergence from bankruptcy established under the Plan. The new common stock to be issued under the Plan is also expected to begin trading on the effective date. The new common stock is expected to trade on the New York Stock Exchange under the ticker symbol "LEU". "We are completing the final steps of a restructuring process that will strengthen our balance sheet and will enable the company to build on its decades of reliability and technical innovation," said John Welch, president and chief executive officer of USEC Inc. "Since our voluntary filing in March, we have moved to accomplish the objectives of this process. We are now in a stronger position to continue serving the nuclear fuel needs of our utility customers around the world and the national and energy security needs of the United States. "I want to thank our customers, suppliers, business partners and our employees for their support throughout this process. With their backing, we have taken a major step forward and are prepared to move ahead as Centrus Energy Corp.," Welch said. The reorganization addresses the October 2014 maturity of the Company's convertible notes and strengthens the company's balance sheet. On the effective date, USEC will replace its $530 million debt and its preferred stock with a new debt issue totaling $240.4 million and new common stock. The new debt issue would mature in five years and can be extended for an additional five years subject to certain conditions. The noteholders would receive $200 million of the new debt and approximately 79 percent of the common stock. Preferred investors would each receive $20.19 million of the new debt and approximately 8 percent of the new common stock. Current common stockholders would receive approximately 5 percent of the new common stock in exchange for the existing common stock. Distribution of the new common stock is subject to dilution on account of a new management incentive plan. A new board of directors will provide corporate governance oversight and strategic direction beginning on the Plan's effective date. Throughout the bankruptcy process, the Company has continued to serve its customers and meet all its obligations to its customers and vendors. It will continue to do so when it emerges as Centrus Energy Corp. USEC ended the second quarter of 2014 with $123 million in cash and will not require an external source of exit financing upon emergence. The new corporate name, Centrus Energy Corp., symbolizes the key attributes of the reorganized company. The name "Centrus" reflects the role the company's advanced centrifuge uranium enrichment technology will play in its future and conveys the strength, reliability, leadership, innovation, technology and energy that are the key driving forces behind the company. The Company will operate as Centrus on the effective date of the Plan. The operations and the names of the Company's subsidiaries will remain unchanged after emergence from bankruptcy. "We are pleased to enter the next era of our company's history as Centrus," said Welch. "As we take the steps necessary to meet our near-term obligations to provide our customers with nuclear fuel, we continue to keep our eye on their long-term fuel requirements and our nation's national security requirements that we can meet with advanced centrifuge technology. "While there is work to be done in this challenging market environment, we are confident that with a stronger financial foundation, Centrus is well positioned to build on our record of reliability and innovation to supply enriched uranium fuel in a safe, secure, profitable and environmentally responsible manner." A copy of the Plan is available at http://is.gd/td1oKe * * * Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware confirmed on Sept. 5, 2014, USEC Inc.'s Plan of Reorganization. The judge also approved the exit facility. Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that secured creditors and general unsecured creditors are paid in full and didn?t vote because they are presumed to have accepted. According to the Bloomberg report, holders of the convertible notes are to receive $200 million in new debt and 79 percent of the new stock, while holders of preferred stock are being given 16 percent of the new common stock plus $40.4 million in new debt. Common shareholders can have 5 percent of the new stock because noteholders and preferred shareholders voted in favor of the plan, the Bloomberg report related. As previously reported by The Troubled Company Reporter, the Plan provides that, among other things, each holder of an allowed noteholder claim will receive its pro rata share of (i) 79.04% of the new common stock issued under the Plan, (ii) cash equal to the amount of the interest accrued on the old notes from the date of the last interest payment made by the Debtor before the Petition Date to the Effective Date, and (iii) new notes to be issued under the Plan in the aggregate principal amount of $200 million. About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Hon. Christopher S. Sontchi presides over the case. D. J. Baker, Esq., Rosalie Walker Gray, Esq., Adam S. Ravin, Esq., and Annemarie V. Reilly, Esq., at Latham & Watkins LLP, serve as the Debtor's general counsel. Amanda R. Steele, Esq., Mark D. Collins, Esq., and Michael J. Merchant, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtors. VALLEJO, CA: Quake Marks First Major Test for City After Ch. 9 -------------------------------------------------------------- Ellen Knickmeyer, writing for The Associated Press, reported that the city of Vallejo sustained millions of dollars in damage and dozens of people were injured as a result of the recent magnitude- 6.0 earthquake. According to the report, the quake was the latest blow to a hard-luck community that has weathered years of bankruptcy and is now beset by poverty, gangs and crime. VARIANT HOLDING: Meeting to Form Creditors' Panel Set for Sept. 17 ------------------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Sept. 17, 2014, at 10:00 a.m. in the bankruptcy case of Variant Holding Company, LLC. The meeting will be held at: J. Caleb Boggs Federal Building 844 King St., Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Variant Holding Variant Holding Company, LLC, commenced bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code in Delaware (Case No. 14-12021) on Aug. 28, 2014, without stating a reason. Tucson, Arizona-based Variant Holding estimated $100 million to $500 million in assets and less than $100 million in debt. The Debtor has tapped Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. Members holding the majority of the interests in the company, namely Conix WH Holdings, LLC, Conix Inc., Numeric Holding Company, LLC, Walkers Dream Trust, and Variant Royalty Group, LP, signed the resolution authorizing the bankruptcy filing. VAUGHAN COMPANY: Defendants' Response Deadline Extended to October ------------------------------------------------------------------ Magistrate Judge Stephan M. Vidmar gave his stamp of approval on a second stipulated order modifying a July 14, 2014 scheduling order and extending the deadline for certain defendants to respond to the plaintiff's motion for partial summary judgment in the case filed by Judith A. Wagner, the Chapter 11 Trustee of the bankruptcy estate of The Vaughan Company, Realtors. The stipulation provides, among others, that the Defendants may have through and until Oct. 31, 2014, to respond to the Plaintiff's "Motion for Partial Summary Judgment Against All Defendants on All But One Element of Trustee's Prima Facie Case on Actual and Constructive Fraudulent Transfers." A full-text copy of the Stipulation is available at http://is.gd/cAgdl0from Leagle.com. Judith A. Wagner is represented by James A. Askew, Esq., Daniel A White, Esq., Edward A. Mazel, Esq., and Jacqueline Ortiz, Esq., at Askew & Mazel, LLC; and Maureen A Sanders, Esq., at Sanders & Westbrook, PC. About The Vaughan Company Realtors The Vaughan Company Realtors filed for Chapter 11 protection (Bankr. N.M. Case No. 10-10759) on Feb. 22, 2010. George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VICTORY ENERGY: To Participate in Upcoming Investor Conferences --------------------------------------------------------------- Victory Energy Corporation disclosed with the U.S. Securities and Exchange Commission that its management will present at the following upcoming investor conferences during the month of September. On Sept. 9, 2014, representatives of the Company intend to make a presentation at the Euro Pacific Capital Global Investment Conference in New York, NY. On Sept. 11, 2014, representatives of the Company intend to make a presentation at the See Thru Equity Fall Investor Conference in New York, NY. Representatives of the Company also intend to make a presentation at the IPAA OGIS San Francisco conference in San Francisco, CA, which will be held during Sept. 22 to 24, 2014. A copy of the September 2014 Presentation is available at http://is.gd/2UKNRe About Victory Energy Austin, Texas-based Victory Energy Corporation is engaged in the exploration, acquisition, development and exploitation of domestic oil and gas properties. Current operations are primarily located onshore in Texas, New Mexico and Oklahoma. Victory Energy reported a net loss of $2.11 million on $735,413 of total revenues for the year ended Dec. 31, 2013, as compared with a net loss of $7.09 million on $326,384 of total revenues in 2012. The Company's balance sheet at June 30, 2014, showed $5.02 million in total assets, $1.29 million in total liabilities and $3.72 million in total stockholders' equity. Weaver & Tidwell, LLP, in Fort Worth, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has experienced recurring losses since its inception and has an accumulated deficit. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. WHEATLAND MARKETPLACE: Cash Collateral Hearing Set for Sept. 30 --------------------------------------------------------------- The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois set a hearing for Sept. 30, 2014, at 10:30 a.m., prevailing Central time, at Courtroom 644 219 South Dearborn in Chicago, Illinois, to consider final approval of Wheatland Marketplace LLC's request to use of cash collateral of U.S. Bank National Association, as Trustee, successor to Bank of America, National Association. On July 29, Judge Hollis issued an order further extending the interim order authorizing the Debtor to use cash collateral to Sept. 30, 2014, pursuant to a budget, which is available for free at http://is.gd/2Ku7A3 As adequate protection, the Debtor agreed to pay: a) $45,175 payment -- consisting $29,391 interest payment and a $15,783 real estate tax escrow payment -- to noteholder on or before Aug. 15, 2014; and b) $50,140 payment -- consisting $29,391 interest payment and a $20,749 real estate tax escrow payment -- to noteholder on or before Sept. 15, 2014. As reported in the Troubled Company Reporter on July 16, 2014, the bank objected to Wheatland Marketplace LLC's motion for interim approval to use of cash collateral. In addition, U.S. Bank requests that any additional interim cash collateral order entered by the U.S. Bankruptcy Court for the Northern District of Illinois extend the Debtor's authorization to use cash collateral only through July 31, 2014, on the terms previously approved in the prior cash collateral orders, and further provide that authorization be expressly conditioned on the Debtor either: a) closing on the sale of property to ArciTerra Properties, LLC previously approved by the Court by July 24, 2014, or b) initiating an open-sale process, in consultation with its broker, by July 31, 2014, pursuant to which the Noteholder will have the right to credit-bid its claim in any competitive auction setting, and granting such further relief as may be just and necessary under the circumstances. As of the Petition Date, the Debtor was unconditionally indebted to the Noteholder in the amount of at least $7,013,354 plus any and all other fees, obligations, and other liabilities owing under a certain loan documents. The obligations are secured by, among other things, all of the Debtor's interests in the property, according to court documents. On April 22, 2014, the Court approved the Debtor's sale of a property to ArciTerra pursuant to the terms and conditions of the purchase agreement, which sale included a diligence period of 30 days, and an anticipated closing date by the end of June. Since that time, the Debtor has granted five separate extensions of ArciTerra's diligence period, pushing the anticipated closing to the end of July at the earliest. In addition, the Debtor has informed the Noteholder that the Debtor similarly may purport to elect to grant further extensions, as ArciTerra and the Debtor explore the possibility of expanding the sale to an adjacent property that is not part of Debtor's estate, and that, even with such further extensions, the Debtor does not know whether any sale to ArciTerra will actually close. According to the Noteholder, despite being nearly 7 months into a case in which its over $7.2 million, fully-secured claim is the only significant claim against the Debtor's estate, it has not filed a bevy of motions seeking to have the stay lifted or the case dismissed. Instead, it has attempted to work collaboratively with the Debtor on a consensual sale process that would see its claim paid in full and funds left over for the Debtor and any other creditors. This has included its consent to the continued use of its cash collateral, the Debtor's engaging of a broker who was to run a sale process of the property, and a proposed and approved private sale of the Property to ArciTerra. Thomas S. Kiriakos, Esq., at Mayer Brown LLP, noted the time has now come, however, for this case to be resolved -- either the sale to ArciTerra should be finalized, and this case closed, or the Debtor should be compelled to move forward with an open-sale process that will lead to payment of the Noteholder's claim in full. To that end, the Noteholder respectfully requests that any further extensions of the Debtor's authorization to use Cash Collateral be limited to one month and be expressly conditioned on either a closing of the sale of the Property to ArciTerra by July 24, 2014 or the Debtor's broker having initiated an open-sale process by July 31, 2014, Mr. Kiriakos said. About Wheatland Marketplace, LLC Wheatland Marketplace, LLC, owner of a commercial retail center in Naperville, Illinois, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 13-46492) in Chicago on Dec. 3, 2013. The Debtor has tapped Thomas W. Toolis, Esq., at Jahnke, Sullivan & Toolis, LLC, in Frankfurt, Illinois, as counsel. Coleen J. Lehman Trust and Lucy Koroluk each holds a 50% membership interest in the Debtor. The Debtor reported $10,999,006 in total assets, and $7,052,778 in total liabilities. No committee of unsecured creditors has been appointed to serve in the case. WHEATLAND MARKETPLACE: Seeks to Dismiss Chapter 11 Case ------------------------------------------------------- Wheatland Marketplace LLC asks the Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois to dismiss its Chapter 11 bankruptcy case because it expects to sell its assets to occur on Sept. 26, 2014, and the proceeds of the sale are sufficient to pay all creditors in full. A hearing is set for Sept. 16, 2014, at 10:00 a.m., to consider the Debtor's dismissal request. The Debtor tells Judge Hollis that it has devoted substantial time and resources to the pursuit of potential sale of its assets since the commencement of its bankruptcy case. As reported in the Troubled Company Reporter on May 7, 2014, the Court authorized the Debtor to sell parcels of real estate located at: 1) 3124 South Route 59, Naperville, Illinois; 2) Part of 3224 South Route 59, Naperville, Illinois; and 3) 3204 South Route 59, Naperville, Illinois to ArciTerra Properties, LLC, for $10,132,900. The Debtor was also authorized to pay $662,900 as acquisition fee to ArciTerra Strategic Retail Advisor, LLC. The TCR said the properties are subject to pre-existing mortgage and liens of U.S. Bank National Association, as trustee successor to Bank of America, National Association, successor by merger to LaSalle Bank National Association, as Trustee for Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mortgage Pass- Through certificates, Series 2003 TOP12 acting by and through C- III Asset Management, LLC (formerly known as ARCap Servicing, Inc.), the primary lender, which secures a note with a current approximate balance in the amount of $7,013,354. The Debtor proposed that, after payment of customary closing costs, all net proceeds of the sale will be sufficient to pay mortgage lender in full as all other unsecured claims. A copy of the sale contract is available for free at http://bankrupt.com/misc/Wheatland_SaleContract.pdf About Wheatland Marketplace, LLC Wheatland Marketplace, LLC, owner of a commercial retail center in Naperville, Illinois, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 13-46492) in Chicago on Dec. 3, 2013. The Debtor has tapped Thomas W. Toolis, Esq., at Jahnke, Sullivan & Toolis, LLC, in Frankfurt, Illinois, as counsel. Coleen J. Lehman Trust and Lucy Koroluk each holds a 50% membership interest in the Debtor. The Debtor reported $10,999,006 in total assets, and $7,052,778 in total liabilities. No committee of unsecured creditors has been appointed to serve in the case. WHEATLAND MARKETPLACE: Has Until Sept. 30 to File Chapter 11 Plan ----------------------------------------------------------------- The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois further extended the exclusive periods of Wheatland Marketplace LLC to file a Chapter 11 plan and disclosure statement until Sept. 30, 2014, and solicit acceptances of that plan until Nov. 30, 2014. In connection with the approved extension of time, the Debtor's noteholder agreed not to file a plan either (i) before the earlier of any date the Debtor files a plan or (ii) Oct. 1, 2014. Additionally, the claims of the noteholder will be allowed claim in an amount that is the sum of: i) 6,826,391 in principal, ii) 316,668 in interest for the period from Aug. 1, 2014, to June 30, 2014, at the contract rate of 5% per annum, iii) $253,334 in default interest for the period from Aug. 1, 2014, to June 30, 2014 at the default rate of 4% per annum, iv) $948,109 in per diem interest at the contract rate of 5% per annum for each additional day, starting July 1, 2014, until payment in full, v) $758,487 per diem interest at the default rate of 4% per annum for each additional day, starting July 1, 2014, until payment in full, vi) $1,137 in outstanding late fees dues, vii) $186 in property protection advances, viii) $495 in payoff processing fees, and ix) $55,000 noteholder's attorneys' fees and expenses through June 30. Furthermore, the allowed amount of the noteholder's reasonable attorney's fees and expenses for the period from July 1, 2014, through closing will be capped at a total of $15,000. As reported in the Troubled Company Reporter on July 18, 2014, the Debtor assured the Court that the extension of time will not prejudice the legitimate interest of any parties-in-interest in this Chapter 11 case. Rather, the extension will further its efforts to preserve, maximize and create value for the Debtor's creditors and increase the likelihood of a plan, the Debtor noted. About Wheatland Marketplace, LLC Wheatland Marketplace, LLC, owner of a commercial retail center in Naperville, Illinois, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 13-46492) in Chicago on Dec. 3, 2013. The Debtor has tapped Thomas W. Toolis, Esq., at Jahnke, Sullivan & Toolis, LLC, in Frankfurt, Illinois, as counsel. Coleen J. Lehman Trust and Lucy Koroluk each holds a 50% membership interest in the Debtor. The Debtor reported $10,999,006 in total assets, and $7,052,778 in total liabilities. No committee of unsecured creditors has been appointed to serve in the case. WIRELESS RONIN: Posts $989K Net Loss for June 30 Quarter -------------------------------------------------------- Wireless Ronin Technologies, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $989,000 on $1.17 million of total sales for the three months ended June 30, 2014, compared to a net loss of $76,000 on $2.63 million of total sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.68 million in total assets, $2.44 million in total liabilities and a stockholders' deficit of $765,000. The Company continues to experience operating losses and its independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern. Management continues to seek financing on favorable terms; however, there can be no assurance that any such financing can be obtained on favorable terms, if at all. At present, the Company has no commitments for any additional financing. If it is unable to generate sufficient revenue, obtain financing, or adjust its operating expenses so as to maintain positive working capital, then it likely will be forced to cease operations and investors will likely lose their entire investment, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/4Psv3W Minnetonka, Minn.-based Wireless Ronin Technologies, Inc. (OTC QB: RNIN), provides marketing technology solutions, which include digital signage, interactive kiosks, mobile messaging, social networking and web development solutions, to customers who use the Company's products and services in certain retail and service markets. * 2nd Circ. Says No Bias in Fuel Cell Fraudster's Trial ------------------------------------------------------- Law360 reported that the Second Circuit affirmed a New York man's conviction for scamming $485,000 from investors who were told they were investing in the assets of a bankrupt fuel cell company, saying alleged government misconduct did not "permeate" the trial and was mostly harmless. According to the report, in a summary order, a three-judge panel ruled against Daniel Gallagher, finding the misconduct and errors he alleged in his appeal would have had to be widespread to deprive Gallagher of his due process. * Atty Can't Discharge Stolen Client Funds in Bankruptcy -------------------------------------------------------- Law360 reported that a New Jersey federal judge declined to discharge about $938,000 of debt in a disbarred New Jersey attorney's bankruptcy, ruling he misappropriated the money from a client settlement in a business partnership dispute and withheld information about its whereabouts, which included an improper payment to his law partner. According to the report, U.S. District Court Judge Freda L. Wolfson wouldn't disturb a bankruptcy judge's ruling denying a discharge of debt to Feng Li, a disbarred Parsippany, New Jersey, attorney. Li's disbarment stems from a fee dispute with a group of six co-plaintiffs, former clients of Li, who won around $4 million in underlying arbitration, then pursued Li for $1.25 million he withdrew from escrow without authorization, the report related. * Automatic Stay Arises When Involuntary Petition Filed ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that U.S. District Judge John Antoon II, in Orland, Florida, said in an opinion that the mere filing of an involuntary petition invokes the automatic stay under Section 362(a) of the Bankruptcy Code even before the debtor is declared bankrupt by the entry of an order for relief. The case is Eldorado Canyon Properties LLC v. Mantalvanos, 13-cv- 01827, U.S. District Court, Middle District Florida (Orlando). * Bid to Sell NYC Rent-Stabilized Lease in Ch. 7 Raises Alarm ------------------------------------------------------------- Law360 reported that lawmakers, landlords and tenant advocates are watching the case of New York City widow May Veronica Santiago- Monteverde carefully as New York's top court considers whether her valuable lease amounts to a "local public assistance benefit" that is exempt from Chapter 7 creditors. According to the report, the widow's bankruptcy trustee is trying to "monetize" the widow's rent-stabilized lease by selling it to a Manhattan landlord in order to pay the tenant's consumer debts. * Criminal Fugitive Allowed to Appeal Civil Judgment ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that the U.S. Court of Appeals in San Francisco ruled that a fugitive from a criminal indictment is entitled to appeal a civil judgment involving the same subject matter. According to the report, the Circuit Court, which reversed a district court's dismissal of an appeal from a fraudulent transfer judgment, said that the U.S. Supreme Court, in a 1996 decision, Degen v. U.S., limited use of the fugitive disentitlement doctrine in non-criminal contexts. The Circuit Court said the doctrine should be "narrowly applied and subject to significant scrutiny outside of the direct criminal appeal context." The case is Mastro v. Rigby, 13-35209, U.S. Court of Appeals for the Ninth Circuit (San Francisco). * Fitch Publishes Report on Pension Liabilities in Bankruptcy ------------------------------------------------------------- Fitch Ratings has published a special report 'Pension Liabilities in Bankruptcy.' In this special report, Fitch conducted extensive and in-depth research on what type of impacts pension liabilities have on other creditors' recovery prospects. The report is supplemented with case studies of recent major bankruptcies that included pension liability claims. Fitch reached the following key findings. -- Industries such as automotive, aerospace and defense, telecommunications, technology and financial services account for the lion's share of pension sponsorship among the 50 largest sponsors, and the general funded status among the largest 100 sponsors is around 85%. -- The decision to terminate or assume a pension plan during bankruptcy is hinged on a multiparty negotiation process, which is determined by a set of factors ranging from expediency of bankruptcy to the general goal of restructuring. -- The unsecured claim amount asserted by the Pension Benefit Guaranty Corporation (PBGC) is usually much larger than the debtor's asserted amount. Larger PBGC claims can overwhelm the recovery rates of unsecured claims and give the PBGC substantial leverage in negotiating and confirming plans of reorganization and court-supervised asset sales. -- The PBGC tax liens, especially attached to non-bankruptcy entities and facilitated by the controlled group liability doctrine, can force secured and unsecured creditors to give concessions to the PBGC in order to entice it to release the liens. * IMF Considers Rules for Bondholders to Share Restructuring Cost ----------------------------------------------------------------- Landon Thomas Jr., writing for The New York Times' DealBook, reported that the International Monetary Fund is moving closer to formalizing standards that would give it the option to require private-sector bondholders to share the financial burden when countries with serious debt problems seek assistance from the fund. According to the report, the new approach marks the latest evolution in the fund's thinking about the thorny and politically fraught issue of how and when to determine that a country's debt is no longer sustainable and, crucially, to what extent private sector bondholders should be required to share in the cost of restructuring as opposed to taxpayers' bailing out the country. * Federal Sale of Troubled Mortgages Draws Criticism ---------------------------------------------------- Matthew Goldstein, writing for The New York Times' DealBook, reported that community advocacy groups are giving mixed grades to a federal housing agency initiative that has resulted in the sale of nearly 100,000 distressed mortgages to mainly private investors, especially when it comes to keeping borrowers in their homes. According to the report, the Center for American Progress, in a report issued on Sept. 5, says the Housing and Urban Development Department needs to give nonprofit organizations a better chance of competing with investment firms in the bidding to buy the delinquent loans. * SEC Wants More Detail on Loans-Backing Securities --------------------------------------------------- Andrew Ackerman, writing for The Wall Street Journal, reported that the U.S. Securities and Exchange Commission is expected to complete rules that would require banks and other firms to provide investors with more details about loans pooled into bonds known as asset-backed securities. According to the report, citing people familiar with the matter, the data will include borrowers' credit scores and metrics to gauge levels of debt -- information the SEC expects will aid investors in determining the health of certain loans and reduce reliance on credit ratings. * BOND PRICING: For the Week From September 1 to 5, 2014 -------------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- AGY Holding Corp AGYH 11.000 98.750 11/15/2014 Alion Science & Technology Corp ALISCI 10.250 98.500 2/1/2015 Allen Systems Group Inc ALLSYS 10.500 52.250 11/15/2016 Allen Systems Group Inc ALLSYS 10.500 53.000 11/15/2016 Buffalo Thunder Development Authority BUFLO 9.375 43.875 12/15/2014 Caesars Entertainment Operating Co Inc CZR 10.000 25.830 12/15/2018 Caesars Entertainment Operating Co Inc CZR 6.500 36.063 6/1/2016 Caesars Entertainment Operating Co Inc CZR 10.750 41.500 2/1/2016 Caesars Entertainment Operating Co Inc CZR 12.750 29.500 4/15/2018 Caesars Entertainment Operating Co Inc CZR 5.750 32.500 10/1/2017 Caesars Entertainment Operating Co Inc CZR 10.000 26.000 12/15/2018 Caesars Entertainment Operating Co Inc CZR 10.750 42.625 2/1/2018 Caesars Entertainment Operating Co Inc CZR 10.750 41.375 2/1/2016 Caesars Entertainment Operating Co Inc CZR 5.750 18.375 10/1/2017 Caesars Entertainment Operating Co Inc CZR 10.000 27.250 12/15/2018 Caesars Entertainment Operating Co Inc CZR 10.000 26.750 12/15/2018 Caesars Entertainment Operating Co Inc CZR 10.000 27.250 12/15/2018 Caesars Entertainment Operating Co Inc CZR 10.000 26.750 12/15/2018 Caesars Entertainment Operating Co Inc CZR 10.750 41.375 2/1/2016 Champion Enterprises Inc CHB 2.750 0.250 11/1/2037 Endeavour International Corp END 12.000 37.500 6/1/2018 Endeavour International Corp END 5.500 20.000 7/15/2016 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 8.175 1.090 1/30/2037 Energy Future Holdings Corp TXU 5.550 85.000 11/15/2014 Energy Future Intermediate Holding Co LLC / EFIH Finance Inc TXU 10.000 7.750 12/1/2020 Energy Future Intermediate Holding Co LLC / EFIH Finance Inc TXU 10.000 9.250 12/1/2020 Energy Future Intermediate Holding Co LLC / EFIH Finance Inc TXU 6.875 6.000 8/15/2017 Exide Technologies XIDE 8.625 36.000 2/1/2018 Exide Technologies XIDE 8.625 32.250 2/1/2018 Exide Technologies XIDE 8.625 32.250 2/1/2018 Federal Farm Credit Banks FFCB 3.300 99.205 9/11/2020 Global Geophysical Services Inc GGS 10.500 18.500 5/1/2017 Global Geophysical Services Inc GGS 10.500 12.000 5/1/2017 James River Coal Co JRCC 7.875 1.140 4/1/2019 James River Coal Co JRCC 10.000 0.750 6/1/2018 James River Coal Co JRCC 10.000 4.963 6/1/2018 James River Coal Co JRCC 3.125 0.250 3/15/2018 Las Vegas Monorail Co LASVMC 5.500 99.980 7/15/2019 Lehman Brothers Inc LEH 7.500 13.500 8/1/2026 MF Global Holdings Ltd MF 6.250 45.000 8/8/2016 MF Global Holdings Ltd MF 1.875 45.500 2/1/2016 MModal Inc MODL 10.750 10.375 8/15/2020 MModal Inc MODL 10.750 10.125 8/15/2020 Meritor Inc MTOR 8.125 105.735 9/15/2015 Momentive Performance Materials Inc MOMENT 11.500 4.500 12/1/2016 Motorola Solutions Inc MSI 6.000 113.445 11/15/2017 Motors Liquidation Co MTLQQ 7.200 11.250 1/15/2011 Motors Liquidation Co MTLQQ 7.375 11.250 5/23/2048 Motors Liquidation Co MTLQQ 6.750 11.250 5/1/2028 NII Capital Corp NIHD 7.625 15.000 4/1/2021 NII Capital Corp NIHD 10.000 26.750 8/15/2016 NII Capital Corp NIHD 8.875 27.250 12/15/2019 Platinum Energy Solutions Inc PLATEN 14.250 74.750 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.250 74.750 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.250 74.750 3/1/2015 Platinum Energy Solutions Inc PLATEN 14.250 74.750 3/1/2015 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Quicksilver Resources Inc KWK 7.125 63.500 4/1/2016 RAAM Global Energy Co RAMGEN 12.500 73.500 10/1/2015 Savient Pharmaceuticals Inc SVNT 4.750 0.125 2/1/2018 TMST Inc THMR 8.000 12.000 5/15/2013 Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 14.625 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 37.500 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 14.250 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 14.500 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 36.000 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 14.250 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 14.375 11/1/2016 Travelport LLC / Travelport Holdings Inc TPORT 11.875 93.750 9/1/2016 Tunica-Biloxi Gaming Authority PAGON 9.000 60.750 11/15/2015 Western Express Inc WSTEXP 12.500 90.000 4/15/2015 Western Express Inc WSTEXP 12.500 84.000 4/15/2015 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, 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 ***