/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/141106.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 6, 2014, Vol. 18, No. 309 Headlines 58 BLACKLAND: Voluntary Chapter 11 Case Summary ALCO STORES: Taps A&G Realty as Real Estate Consultant & Advisor ALCO STORES: Taps Hilco Streambank as IP Disposition Agent ALCO STORES: Creditors' Panel Hires Judith Ross as Local Counsel BLUE RACER: Moody's Assigns B3 Rating on $400MM Unsecured Notes CCS MEDICAL: Moody's Withdraws Caa2 Corporate Family Rating CLIFFSIDE INN: Case Summary & 15 Largest Unsecured Creditors COPENHAVER INC: Reaches Settlement With ERISA Plaintiffs COPENHAVER INC: Reaches Settlement With ERISA Plaintiffs DYNEGY INC: S&P Assigns 'B+' Rating on $5.1BB Sr. Unsecured Notes DYNEGY INC: Swings to Loss on Lower Generation Volumes FLAT OUT CRAZY: Wants Court to Dismiss Chapter 11 Case FLYING W SNOWMASS: Case Summary & 6 Largest Unsecured Creditors FREESCALE SEMICONDUCTOR: Fitch Raises Issuer Default Rating to B+ GENERAL MOTORS: Fitch Assigns 'BB+' Rating on Sr. Unsecured Notes GREAT WOLF: Moody's Rates New $120MM 2nd Sr. Secured Debt 'Caa2' HAHAHA CORPORATION: Voluntary Chapter 11 Case Summary HC2 HOLDINGS: S&P Assigns 'B' CCR & Rates Sr. Secured Notes 'B' INDEX RECOVERY: Claims Bar Date Set for November 28 INTERPROPERTIES HOLDING: Fitch Withdraws BB Issuer Default Ratings KEMET CORP: Moody's Rates New Sr. Secured Notes Due 2019 'Caa1' LEIDOS HOLDINGS: Moody's Lowers Senior Unsecured Rating to Ba1 LENNAR CORP: Fitch Assigns BB+ Rating on New $350MM Sr. Notes LENNAR CORP: Moody's Rates New $350 Unsecured Notes 'Ba3' MARION ENERGY: Proposes Parsons Behle as Counsel MARION ENERGY: Has $4.2-Mil. Financing From KM Custodians MILLER AUTO: Seeks to Resolves Dispute With FFC and Committee NATIONAL CINEMEDIA: S&P Puts 'BB-' CCR on CreditWatch Negative NATIONAL RESPONSE: Moody's Affirms B2 Rating on New Term Loan NCL CORP: Moody's Rates Proposed $680MM Sr. Unsecured Notes B2 OWENS CORNING: Moody's Assigns Ba1 Rating on New $300MM Notes P2 UPSTREAM: S&P Affirms 'B' CCR & Revises Outlook to Stable PARQ HOLDINGS: Moody's Assigns B3 Corporate Family Rating RECYCLE SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors REICHHOLD HOLDINGS: Panel Balks at CDG Group's Professional Fee SAMUEL WYLY: NY Judge Grants SEC's Bid for Temporary Asset Freeze ST. JOHN'S RIVERSIDE: S&P Revises Outlook on 'B+' Rating to Stable STANDARD PACIFIC: Moody's Rates Proposed $300MM Unsecured Notes STOCKTON, CA: CalPERS a Big Winner in City's Bankruptcy TODD HERTZBERG: Court Tosses Suit by Trustee in Wife's Ch.7 Case TRANSFIRST INC: Moody's Lowers Rating on New 1st Lien Debt to B2 TASC INC: S&P Puts 'B+' Secured Debt Rating on Watch Positive THOMAS JEFFERSON: Law School Restructures Debt Obligations TIBCO SOFTWARE: Moody's Assigns B3 Corporate Family Rating TOTAL MERCHANT: Moody's Assigns B2 Corporate Family Rating TOTAL MERCHANT: S&P Assigns 'B' CCR & Rates $175MM Facility 'B+' TRUMP ENTERTAINMENT: Judge Delays Decision On Restructuring U.S. COAL: Additional Debtors' Case Summary & Creditors' Lists U.S. COAL: Add'l Debtors Want Jan. 2, 2015 Claims Bar Date U.S. COAL: Add'l Debtors Seek Joint Administration U.S. COAL: Add'l Debtors Seek Access to Cash Collateral VENOCO INC: S&P Cuts CCR to 'CCC+' & Removes From Watch Negative WATERSTONE MICHELLE: Case Summary & 3 Largest Unsecured Creditors YORK RISK: Moody's Maintains B3 Corporate Family Rating * Squire Patton Boggs Launches Restructuring & Insolvency Blog * Recent Small-Dollar & Individual Chapter 11 Filings ********* 58 BLACKLAND: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 58 Blackland, LLC 3939 Lavista Road Atlanta, GA 30074 Case No.: 14-71930 Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: David A. Geiger, Esq. GEIGER LAW, LLC Suite 525, 1275 Peachtree Street, NE Atlanta, GA 30309 Tel: 404-815-0040 Fax: 404-549-4312 Email: david@geigerlawllc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Daniels, manager. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ALCO STORES: Taps A&G Realty as Real Estate Consultant & Advisor ---------------------------------------------------------------- ALCO Stores, Inc. and its debtor-affiliates seek authorization from the U.S. Bankruptcy Court for the Northern District of Texas to employ A&G Realty Partners, LLC as real estate consultant and advisor, nunc pro tunc to the Oct. 12, 2014 petition date. In addition to providing any additional real estate advisory services as the Debtors may request from time to time, A&G will: (a) consult with the Debtors to discuss the Debtors' goals, objectives, and financial parameters in relation to the Debtors' real property leases (the "Leases") and the Debtors' owned real properties (the "Properties"); (b) negotiate with the landlords of the Properties on behalf of the Debtors in order to assist the Debtors in obtaining Lease Modifications and Lease Claim Mitigations; and (c) as requested by the Debtors in writing, broker the sale of the Leases and the owned Property. Subject to the Court's approval and pursuant to the terms and conditions of the Agreement, A&G and the Debtors have agreed upon the following compensation for the Services to be rendered in these chapter 11 cases: -- Retainer. The Debtors shall pay A&G a retainer fee in the amount of $50,000 upon the execution of the Agreement. The retainer fee shall be non-refundable and shall be applied to A&G's fees requiring payment under the terms of the Agreement. -- Occupancy Cost Savings. For each Occupancy Cost Savings obtained by A&G on behalf of the Debtors, A&G shall earn and be paid 4.5% of the Occupancy Cost Savings per assumed and assigned Lease for a period not to exceed 4 years. A&G shall be paid its fee upon the landlord's and the Debtors' mutual execution of a Document. -- Non-Monetary Lease Modifications. For Non-Monetary Modification Savings obtained by A&G on behalf of the Debtors, A&G shall earn and be paid a fee of $2,000 per Lease. A&G shall be paid its fee upon the landlord's and the Debtors' mutual execution of a Document. -- Consulting Fee. A&G shall earn and be paid a fee of $12,500 to consult and assist the Debtors' representatives with all issues related to Leases/Properties. -- Property Sales. For the sale of a Property owned by the Debtors, A&G shall earn and be paid a fee of 5% of the Gross Proceeds5 of such sale. A&G shall be paid its fee upon the closing of the sale transaction. Property Sales will commence upon direction from the Debtors. -- Lease Claim Mitigations. (i) For any Lease assumed and assigned by the Debtors, if the amount required to be paid to the landlord to cure defaults existing at the time of assumption is reduced below the cure amount that the Debtors reasonably acknowledge or the Bankruptcy Court determines is owing, A&G shall earn and be paid a fee for the waiver or reduction of the cure amount in an amount equal to 4.5% of the total amounts so reduced or waived. (ii) For any Lease rejected by the Debtors, if the landlord agrees to reduce or waive the claim it could reasonably assert under Bankruptcy Code section 502(b)(6) or otherwise, A&G shall earn and be paid a fee in an amount equal to 4.5% of the net savings that otherwise would have been payable to the landlord in the Debtors' chapter 11 cases. For example, if a landlord's claim is $200,000 and the distribution to unsecured creditors is $0.10 and a landlord agrees to waive its claim, A&G shall earn $900 (4.5% of $20,000 in realizable savings). -- Other Services. A&G and the Debtors shall mutually agree in writing upon the fee for Other Services provided by A&G that are not referenced above. -- Timing of Payments to A&G. The Debtors shall pay all fees to A&G within 10 business days of receipt of an invoice therefore. A&G will also be reimbursed for reasonable out-of-pocket expenses incurred. Andrew Graiser of A&G assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. A&G can be reached at: Michael Jerbich A&G REALTY PARTNERS, LLC 525 West Monroe St., Suite 2330 Chicago, IL 60661 Tel: (312) 454-2057 E-mail: michael@agrealtypartners.com About ALCO Stores ALCO Stores, Inc., operates 198 stores in 23 states throughout the central United States. Alco offers 35,000 items at its stores, which are located at smaller markets usually not served by other regional or national broad line retail chains. The company was founded in 1901 as a general merchandising operation in Abilene, Kansas. ALCO is a public company, and its common stock is quoted on the NASDAQ National Market tier of the NASDAQ Stock Market under the ticker symbol "ALCS." ALCO Stores and ALCO Holdings LLC sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 14-34941) in Dallas, Texas, on Oct. 12, 2014, with plans to let liquidators conduct store closing sales or sell the business to a going-concern buyer. Judge Stacey G. Jernigan presides over the Chapter 11 cases. The Debtors have DLA Piper LLP (US) as counsel, Houlihan Lokey Capital, Inc., as financial advisor, and Prime Clerk LLC as claims and noticing agent. As of July 2014, ALCO Stores had assets totaling $222 million and liabilities totaling $162 million. The bulk of the liabilities was total debt outstanding under a credit facility with Wells Fargo Bank, National Association, of which the aggregate outstanding was $104.2 million as of the Petition Date. ALCO STORES: Taps Hilco Streambank as IP Disposition Agent ---------------------------------------------------------- ALCO Stores, Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Hilco IP Services, LLC dba Hilco Streambank as intellectual property disposition agent, nunc pro tunc to Oct. 24, 2014. Pursuant to the Engagement Letter, Hilco Streambank is engaged to market and sell, assign, license, or otherwise dispose of the Debtors' Intellectual Property by: (a) collecting and securing all available information and data concerning the Intellectual Property; (b) preparing marketing materials designed to inform potential purchasers of the availability of the Intellectual Property for sale, assignment, license, or other disposition; (c) developing and executing a sales and marketing program designed to elicit proposals to acquire the Intellectual Property from qualified acquirers with a view toward completing one or more sales, assignments, licenses, or other disposition of the Intellectual Property following an Auction or Auctions under section 363 of the Bankruptcy Code; and (d) assisting the Debtors in connection with the conduct of the auction and the transfer of the Intellectual Property to the acquirers who offer the highest or otherwise best consideration for the Intellectual Property. Subject to the Court's approval, as set forth in the Engagement Letter, the Debtors and Hilco Streambank have agreed that Hilco Streambank will be paid a Transaction Fee in consideration for services to be rendered for the Debtors. Hilco Streambank also will be paid a management fee of $30,000 which will be applied as a credit against a commission based on a percentage of aggregate proceeds generated from the sale, assignment, license, or other dispositions of the Intellectual Property as follows: -- 10% of the amount of aggregate Net Proceeds up to $1,000,000; plus -- 12.5% of the amount by which the aggregate Net Proceeds exceed $1,000,000 up to $2,000,000; plus -- 15% of the amount by which the aggregate Net Proceeds exceed $2,000,000. The Transaction Fee shall be paid upon the successful consummation of any transaction or transactions involving the sale, assignment, license, or other disposition of the Intellectual Property from the Net Proceeds of such transactions notwithstanding any liens, claims, or other encumbrances on the Intellectual Property or the Net Proceeds thereof. In the event Debtors pursue a "going concern" sale of some or all of their stores in a transaction that may also include a sale of some or all of the Intellectual Property (a "Going Concern Transaction"), the Debtors may choose to exclude the Intellectual Property associated with the Going Concern Transaction from a sale at the Auction. In that case, prior to the Auction, the Debtors will provide a written notice (the "Exclusion Notice") to Hilco Streambank indicating that the Debtors intend to pursue a Going Concern Transaction that includes the Intellectual Property. In the event that the Debtors deliver the Exclusion Notice, the Transaction Fee shall be increased by an additional $20,000 for a total of $50,000, and no additional fees or commissions shall be paid to Hilco Streambank in respect of the sale of the Intellectual Property. Hilco Streambank will also be reimbursed for reasonable out-of- pocket expenses incurred. Ian S. Fredericks, vice president and assistant general counsel of Hilco Streambank, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Hilco Streambank can be reached at: Ian S. Fredericks, Esq. HILCO TRADING, LLC 5 Revere Drive, Suite 206 Northbrook, IL 60060 Tel: (847) 418-2075 Fax: (847) 897-0859 About ALCO Stores ALCO Stores, Inc., operates 198 stores in 23 states throughout the central United States. Alco offers 35,000 items at its stores, which are located at smaller markets usually not served by other regional or national broad line retail chains. The company was founded in 1901 as a general merchandising operation in Abilene, Kansas. ALCO is a public company, and its common stock is quoted on the NASDAQ National Market tier of the NASDAQ Stock Market under the ticker symbol "ALCS." ALCO Stores and ALCO Holdings LLC sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 14-34941) in Dallas, Texas, on Oct. 12, 2014, with plans to let liquidators conduct store closing sales or sell the business to a going-concern buyer. Judge Stacey G. Jernigan presides over the Chapter 11 cases. The Debtors have DLA Piper LLP (US) as counsel, Houlihan Lokey Capital, Inc., as financial advisor, and Prime Clerk LLC as claims and noticing agent. As of July 2014, ALCO Stores had assets totaling $222 million and liabilities totaling $162 million. The bulk of the liabilities was total debt outstanding under a credit facility with Wells Fargo Bank, National Association, of which the aggregate outstanding was $104.2 million as of the Petition Date. ALCO STORES: Creditors' Panel Hires Judith Ross as Local Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Alco Stores, Inc. seeks authorization from the Hon. Stacey G.C. Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas to retain the Law Offices of Judith W. Ross as local counsel for the Committee, nunc pro tunc to Oct. 23, 2014. The Committee requires the Firm to: (a) assist the Committee in carrying out its duties, rights and obligations under the Bankruptcy Code and applicable Bankruptcy Rules; (b) advise the Committee of its responsibilities to the unsecured creditor body and to direct necessary communications with the Debtor, including attendance at meetings and negotiations with the Debtor secured and unsecured creditors, their counsel and other parties in interest; (c) prepare on behalf of the Committee all necessary motions, answers, orders, reports, and other legal papers in connection with the duties and responsibilities of the Committee, and represent the Committee in all hearings held in connection with the case; and (d) perform any and all other legal services and providing all other legal advice to the Committee in connection with the case. The firm will be paid at these hourly rates: Judith Ross $400 Neil J. Orleans $400 Eric Soderlund $300 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Judith W. Ross, owner and sole shareholder of the firm, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm can be reached at: Judith W. Ross, Esq. LAW OFFICES OF JUDITH W. ROSS 700 N. Pearl Street, Suite 1610 Dallas, TX 75201 Tel: 214-377-8659 Fax: 214-377-9409 E-mail: judith.ross@judithwross.com About ALCO Stores ALCO Stores, Inc., operates 198 stores in 23 states throughout the central United States. Alco offers 35,000 items at its stores, which are located at smaller markets usually not served by other regional or national broad line retail chains. The company was founded in 1901 as a general merchandising operation in Abilene, Kansas. ALCO is a public company, and its common stock is quoted on the NASDAQ National Market tier of the NASDAQ Stock Market under the ticker symbol "ALCS." ALCO Stores and ALCO Holdings LLC sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 14-34941) in Dallas, Texas, on Oct. 12, 2014, with plans to let liquidators conduct store closing sales or sell the business to a going-concern buyer. Judge Stacey G. Jernigan presides over the Chapter 11 cases. The Debtors have DLA Piper LLP (US) as counsel, Houlihan Lokey Capital, Inc., as financial advisor, and Prime Clerk LLC as claims and noticing agent. As of July 2014, ALCO Stores had assets totaling $222 million and liabilities totaling $162 million. The bulk of the liabilities was total debt outstanding under a credit facility with Wells Fargo Bank, National Association, of which the aggregate outstanding was $104.2 million as of the Petition Date. BLUE RACER: Moody's Assigns B3 Rating on $400MM Unsecured Notes --------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Blue Racer Midstream, LLC and co-issuer Blue Racer Finance Corp. (together, Blue Racer) including a B1 Corporate Family Rating (CFR) and a B3 rating to its proposed $400 million senior unsecured notes issue due 2022. Moody's assigned an SGL-3 Speculative Grade Liquidity Rating. The outlook is stable. Note proceeds will be used to repay outstanding borrowings under Blue Racer's revolving credit facility and to fund the continued expansion of its midstream asset base. "Chronically short of midstream infrastructure in the Utica and Marcellus Shales, Blue Racer is well situated to capture a rapidly growing, contract-based revenue stream through its aggressive expansion plans," commented Andrew Brooks, Moody's Vice President. "Funding initial asset acquisitions and incremental expansion of its midstream asset base substantially with equity contributions from its partners, with this notes issue Blue Racer will introduce a component of long term debt financing to its capital structure as it continues the build-out of Utica Shale located gathering and processing assets." Ratings assigned: Issuer Blue Racer Midstream, LLC Corporate Family Rating, B1 Probability of Default Rating, B1-PD Speculative Grade Liquidity Rating, SGL-3 Issuer/Co-issuer: Blue Racer Midstream, LLC/Blue Racer Finance Corp. New $400 million Senior Unsecured Notes, B3 -- LGD-5 Outlook -- Stable Ratings Rationale Blue Racer's B1 CFR reflects the high level of growth capital spending planned by the company through 2016, which is projected to be entirely debt funded. The extent of anticipated growth capital spending will require Blue Racer to make heavy use of its $1.0 billion secured revolving credit facility, which could strain its liquidity absent periodic return trips to the debt capital markets. The magnitude of its construction program introduces an element of execution risk to future EBITDA generation. Reflecting the debt financing of its large capital program, leverage in 2015 will approach 5x. Offsetting what Moody's views as an aggressive use of debt to fund Blue Racer's growth is the extent of equity funding employed to initially capitalize its business, the underlying stability of the rapidly growing cash flow streams generated by Blue Racer's asset base, the high growth prospects afforded by the location of the company's assets located largely in the liquids-rich Utica Shale and the prospects for deleveraging over the medium term through the generation of incremental EBITDA. Blue Racer's integrated midstream business is significantly supported by contractual commitments from its customers, with over 80% of total revenues generated on a fee for service basis. Contract obligations are backed by acreage dedications, minimum volume commitments and demand payments, and are generally long term in nature. The relatively higher quality and stability of the underlying cash flow streams helps support incremental debt capacity. Blue Racer is a 50/50 partnership established in November 2012 between Dominion Resources, Inc. (Dominion, Baa2 stable) and Caiman Energy II, LLC, (Caiman, unrated) a private equity backed investor in midstream energy. Caiman is 58.4% owned by Williams Partners LP (WMZ, Baa2 stable). Dominion contributed its existing midstream gathering and processing assets to the partnership while Caiman contributed approximately $713 million in cash equity capital through the 2014 equalization of the partnership. Blue Racer provides gathering, processing, fractionation, and natural gas liquids (NGLs) transportation and marketing services to natural gas producers in the Utica shale. The company's focus area covers the liquids rich portions of the southern Utica and southwestern Marcellus, which are among the most attractive natural gas shale plays in the US. The Utica shale is currently producing approximately 1.5 billion cubic feet (bcf) of natural gas per day and is expected to increase to over 5 bcf per day by the end of the decade as infrastructure bottlenecks are relieved by midstream providers such as Blue Racer. The contribution of Dominion's existing pipeline network has positioned Blue Racer as a leading midstream operator in the Utica shale. Blue Racer currently owns and operates almost 700 miles of natural gas, NGL and condensate pipelines, 600 million cubic feet (mmcf) per day of natural gas processing capacity and 47,000 barrels per day of fractionation capacity. Blue Racer is presently undertaking an expansion which will increase its processing capacity by two-thirds, increase its fractionation capacity by 160% and add another approximate 180 miles of pipeline capacity through 2015. This approximate $1.4 billion capital investment (comprised of projects under construction, board approved or planned future investment) is backed by contractual commitments that the company has indicated will increase the extent of its fee-based revenues to approximately 96% of total revenues. Blue Racer's SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity through 2015, largely supported through the company's $1.0 billion secured revolving credit facility. The revolver has a scheduled August 2018 maturity date. Until LTM EBITDA exceeds $152 million, availability under the revolver is limited to 5.5x annualized EBITDA; pro forma for the proposed notes offering, availability at October 31 approximated $726 million. The capacity limitation should expire by mid-2015. Blue Racer anticipates distributing virtually all of its operating cash flow after maintenance capital spending and debt service to its partners. The stable outlook reflects the stability of the contract-backed cash flow stream accruing to Blue Racers midstream asset base. Ratings could be upgraded presuming Blue Racer executes on its growth program, EBITDA exceeds $200 million, leverage approaches 4x and fee-based margins are maintained over 80%. Ratings could be downgraded should completion delays and/or cost overruns materially erode growth projections or should debt leverage remain over 5.5x. The B3 rating assigned to Blue Racer's senior unsecured notes reflects the subordination of the senior unsecured notes to Blue Racer's $1.0 billion secured revolving credit facility's priority claim to the company's assets. The size of the claims relative to Blue Racer's outstanding senior unsecured notes results in the notes being rated two-notches below the B1 CFR under Moody's Loss Given Default Methodology. The principal methodology used in these ratings was Global Midstream Energy 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. Blue Racer Midstream, LLC is a private partnership headquartered in Dallas, Texas. CCS MEDICAL: Moody's Withdraws Caa2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service has withdrawn all the ratings of CCS Medical, Inc. Ratings Rationale Moody's has withdrawn the ratings because it believes it has insufficient or otherwise inadequate information to support maintenance of the ratings. The following ratings were withdrawn: Corporate family rating, Caa2; Probability of default rating, Caa2-PD; First lien term loan due March 31, 2015, Caa2 (LGD3); Second lien term loan due March 31, 2016, Caa3 (LGD5). Outlook, changed to withdrawn from negative CCS Medical, Inc., based in Farmers Branch, Texas, specializing in the supply of diabetes monitoring equipment and other chronic-care supplies, is one of the larger suppliers in a highly fragmented and competitive mail-order supply sector. CCS Medical is largely owned by Highland Capital Management, LP. CLIFFSIDE INN: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Cliffside Inn LLC aka Quality Inn 4328 William Wilson Freeway Harpers Ferry, WV 25425-4047 Case No.: 14-01222 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Northern District of West Virginia (Martinsburg) Judge: Hon. Patrick M. Flatley Debtor's Counsel: Thomas H. Fluharty, Esq. THOMAS H. FLUHARTY 408 Lee Avenue Clarksburg, WV 26301 Tel: (304) 624-7832 Fax: 304-622-7649 Email: THFDEBTATTY@wvdsl.net Total Assets: $3.64 million Total Liabilities: $4.84 million The petition was signed by Ronald Marcus, member. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/wvnb14-01222.pdf COPENHAVER INC: Reaches Settlement With ERISA Plaintiffs -------------------------------------------------------- Senior District Judge Joe Billy McDade granted preliminary approval of a settlement in the ERISA action captioned as, JOSEPH KOERNER and FRANK ZACHMAN, Plaintiffs, v. JOHN L. COPENHAVER, CANDICE M. ROGERS, FREDERICK C. HARDMAN, CAROL DIETZ IN HER CAPACITY AS PERSONAL REPRESENTATIVE OF THE ESTATE OF W. RONALD DIETZ, ESTATE OF ROBERT EDDY, Deceased, ALLAN W. DEVINE, DALE S. STRASSHEIM, COPENHAVER, INC., d/b/a W.M. PUTNAM COMPANY, and LYNETTE EDDY, Defendants, Case No. 12-1091 (C.D. Ill.). Judge McDade said the Settlement is sufficient to warrant the issuance of notice to present and former participants in the Employee Stock Option Plan, whose rights would be affected by the Settlement. A so-called fairness hearing is scheduled for January 12, 2015 at 1:00 pm. Plaintiffs Joseph Koerner and Frank Zachman filed this action in March 2012. The lawsuit alleges that the six individual Defendants breached fiduciary duties to the W.M. Putnam Company's Employee Stock Option Plan by engaging in or approving a prohibited transaction. The transaction in question concerns Defendants Copenhaver and Dietz's sale of 60,000 shares of the Company's common stock to the ESOP. The shares fell in value from 2001 to 2005 and again from 2008 to 2011. On July 23, 2008, Copenhaver and Dietz sold the block of stock to the ESOP for $3.4 million. The transaction was financed by the Company, which borrowed $3.4 million from a commercial bank and loaned the cash to the ESOP, which paid the selling shareholders the full purchase price. The ESOP then executed a promissory note payable to the company for the full amount it borrowed plus interest. The promissory note was secured by the 60,000 shares of Putnam stock it purchased, and was payable over 10 years. The ESOP made installment payments from deductible contributions to the ESOP each year. The Complaint primarily challenges two aspects of the transaction. It alleges that the purchase price the ESOP paid to Defendants was too high because it was based upon a valuation of the Company developed using inaccurate data and unreasonable future cash flow projections. Second, it alleges that a subsequent amendment to the transaction removed key provisions put in place to protect the value of pre-July 2008 shares. The Complaint alleges that the approved transaction originally included a put price protection plan that was designed to protect the interests of plan participants who held shares of employer stock prior to July 23, 2008. Under these distribution rules, plan participants entitled to a cash distribution for shares allocated prior to July 23, 2008 were to receive the greater of the stock's fair market value or $51.50. However, all stock allocated after July 23, 2008 was to be valued at the stock's fair market value at the time of distribution. The amendment allegedly removed the floor-price of $51.50, and the cash distribution price per share for grandfathered participants quickly dropped below the purported floor price. The Plaintiffs allege five causes of action based on this transaction. They include claims for breach of fiduciary duty under ERISA section 404, for violation of the prohibited transaction statute under ERISA sections 406 and 408, for co- fiduciary liability under ERISA section 406, and for violation of the anti-cutback rule under ERISA section 204(g). They seek, on behalf of the ESOP, a constructive trust and other monetary relief against Defendants. Plaintiff Koerner brought a sixth claim against three Defendants -- John L. Copenhaver, Carol Dietz in her capacity as personal representative of the Estate of W. Ronald Dietz, and the Company -- for retaliatory discharge under section 510 of ERISA. The Defendants have denied liability for each of Plaintiffs' claims. They argue that they complied with their ERISA duties with respect to the transaction. The Defendants hired an independent trustee for the ESOP, Robert Eddy, and gave him authority to both determine whether to proceed with the transaction and negotiate the price on behalf of the ESOP. Eddy retained an independent valuation firm and independent legal counsel to aide him in those tasks, and concluded that the transaction was in the best interests of and fair to the ESOP and its participants. The Defendants also deny that there was ever any agreement to provide a form of fixed price protection. Finally, Defendants Copenhaver, Dietz, and the Company deny liability for violation of section 510 of ERISA and argue that Plaintiff Koerner's position at the Company was eliminated. The Defendants also brought counterclaims for defamation and false light invasion of privacy against Koerner. After engaging in document discovery throughout 2012, the parties began to engage in settlement discussions. Their first settlement conference with former Magistrate Judge Nan Nolan in Chicago was unsuccessful. The parties then engaged in a period of settlement discussions with former Magistrate Judge Byron Cudmore. Those discussions were interrupted by the Company's Chapter 11 bankruptcy filing. Once the bankruptcy stay was lifted, the parties resumed settlement discussions without the involvement of Judge Cudmore. The proposed Settlement resulted from these discussions. The Settlement Agreement provides for a payment of $650,000, inclusive of attorneys' fees for Plaintiff's Counsel, to be deposited into a settlement account by the Defendants' Insurers within fourteen days of final approval, on the condition that $650,000 is available within the $1.0 million coverage limits under the relevant insurance policy. If less than $650,000 is available within the coverage limit, the settlement consideration is to be the larger of $640,000 or the funds remaining within Defendants' insurance policy. The Plaintiffs' counsel may apply for an award of attorneys' fees and costs from the Settlement Fund, with fees not to exceed $197,994 and costs not to exceed $55,422. They may also apply for an incentive award for Plaintiffs not to exceed $7,500 in the aggregate. The Settlement Agreement provides that Plaintiff Koerner will receive $2,500 in settlement for his ERISA Section 510 retaliation claim. The remainder of the settlement is to be distributed to all participants in the ESOP whose accounts had vested as of July 23, 2008. In exchange, the Settlement provides for general mutual releases between the Plaintiffs and the Defendant, as well as their attorneys, successors, assigns, and related parties. It is conditioned on the Court's entry of a Bar Order, which will dismiss all claims with prejudice and effectively prevent Plaintiffs and other ESOP participants from bringing similar claims against any of the Defendants in the future and Defendants from bringing similar claims against Plaintiff Koerner in the future. A copy of the Court's Order and Opinion dated November 3, 2014, is available at http://is.gd/9MFLj6from Leagle.com. Frederick Hardman, Counter Claimant, is represented by: David G Lubben, Esq. DAVIS & CAMPBELL LLC 401 Main St, #1600 Peoria, IL 61602 Copenhaver, Inc., dba W.M. Putnam Company, an office supply store, filed for Chapter 11 bankruptcy (Bankr. C.D. Ill. Case No. 13-72052) on Oct. 28, 2013, saying assets ranged from $500,001 to $1 million; and debt ranged from $1 million to $10 million. It is represented by Matthew McClintock, Esq., at Goldstein & McClintock, LLLP. A copy of the petition is available at http://bankrupt.com/misc/ilcb13-72052.pdf Copenhaver describes its business as an outsourcer of premise- related products and services for businesses, providing furnishings, interior design, office products, brand management, printing, and consulting services. The Debtor is headquartered in Bloomington, Illinois, and has provided its products and services to a wide range of customers for more than 65 years. A significant loss of business from a key customer precipitated the Debtor's bankruptcy filing. COPENHAVER INC: Reaches Settlement With ERISA Plaintiffs -------------------------------------------------------- Senior District Judge Joe Billy McDade granted preliminary approval of a settlement in the ERISA action captioned as, JOSEPH KOERNER and FRANK ZACHMAN, Plaintiffs, v. JOHN L. COPENHAVER, CANDICE M. ROGERS, FREDERICK C. HARDMAN, CAROL DIETZ IN HER CAPACITY AS PERSONAL REPRESENTATIVE OF THE ESTATE OF W. RONALD DIETZ, ESTATE OF ROBERT EDDY, Deceased, ALLAN W. DEVINE, DALE S. STRASSHEIM, COPENHAVER, INC., d/b/a W.M. PUTNAM COMPANY, and LYNETTE EDDY, Defendants, Case No. 12-1091 (C.D. Ill.). Judge McDade said the Settlement is sufficient to warrant the issuance of notice to present and former participants in the Employee Stock Option Plan, whose rights would be affected by the Settlement. A so-called fairness hearing is scheduled for January 12, 2015 at 1:00 pm. Plaintiffs Joseph Koerner and Frank Zachman filed this action in March 2012. The lawsuit alleges that the six individual Defendants breached fiduciary duties to the W.M. Putnam Company's Employee Stock Option Plan by engaging in or approving a prohibited transaction. The transaction in question concerns Defendants Copenhaver and Dietz's sale of 60,000 shares of the Company's common stock to the ESOP. The shares fell in value from 2001 to 2005 and again from 2008 to 2011. On July 23, 2008, Copenhaver and Dietz sold the block of stock to the ESOP for $3.4 million. The transaction was financed by the Company, which borrowed $3.4 million from a commercial bank and loaned the cash to the ESOP, which paid the selling shareholders the full purchase price. The ESOP then executed a promissory note payable to the company for the full amount it borrowed plus interest. The promissory note was secured by the 60,000 shares of Putnam stock it purchased, and was payable over 10 years. The ESOP made installment payments from deductible contributions to the ESOP each year. The Complaint primarily challenges two aspects of the transaction. It alleges that the purchase price the ESOP paid to Defendants was too high because it was based upon a valuation of the Company developed using inaccurate data and unreasonable future cash flow projections. Second, it alleges that a subsequent amendment to the transaction removed key provisions put in place to protect the value of pre-July 2008 shares. The Complaint alleges that the approved transaction originally included a put price protection plan that was designed to protect the interests of plan participants who held shares of employer stock prior to July 23, 2008. Under these distribution rules, plan participants entitled to a cash distribution for shares allocated prior to July 23, 2008 were to receive the greater of the stock's fair market value or $51.50. However, all stock allocated after July 23, 2008 was to be valued at the stock's fair market value at the time of distribution. The amendment allegedly removed the floor-price of $51.50, and the cash distribution price per share for grandfathered participants quickly dropped below the purported floor price. The Plaintiffs allege five causes of action based on this transaction. They include claims for breach of fiduciary duty under ERISA section 404, for violation of the prohibited transaction statute under ERISA sections 406 and 408, for co- fiduciary liability under ERISA section 406, and for violation of the anti-cutback rule under ERISA section 204(g). They seek, on behalf of the ESOP, a constructive trust and other monetary relief against Defendants. Plaintiff Koerner brought a sixth claim against three Defendants -- John L. Copenhaver, Carol Dietz in her capacity as personal representative of the Estate of W. Ronald Dietz, and the Company -- for retaliatory discharge under section 510 of ERISA. The Defendants have denied liability for each of Plaintiffs' claims. They argue that they complied with their ERISA duties with respect to the transaction. The Defendants hired an independent trustee for the ESOP, Robert Eddy, and gave him authority to both determine whether to proceed with the transaction and negotiate the price on behalf of the ESOP. Eddy retained an independent valuation firm and independent legal counsel to aide him in those tasks, and concluded that the transaction was in the best interests of and fair to the ESOP and its participants. The Defendants also deny that there was ever any agreement to provide a form of fixed price protection. Finally, Defendants Copenhaver, Dietz, and the Company deny liability for violation of section 510 of ERISA and argue that Plaintiff Koerner's position at the Company was eliminated. The Defendants also brought counterclaims for defamation and false light invasion of privacy against Koerner. After engaging in document discovery throughout 2012, the parties began to engage in settlement discussions. Their first settlement conference with former Magistrate Judge Nan Nolan in Chicago was unsuccessful. The parties then engaged in a period of settlement discussions with former Magistrate Judge Byron Cudmore. Those discussions were interrupted by the Company's Chapter 11 bankruptcy filing. Once the bankruptcy stay was lifted, the parties resumed settlement discussions without the involvement of Judge Cudmore. The proposed Settlement resulted from these discussions. The Settlement Agreement provides for a payment of $650,000, inclusive of attorneys' fees for Plaintiff's Counsel, to be deposited into a settlement account by the Defendants' Insurers within fourteen days of final approval, on the condition that $650,000 is available within the $1.0 million coverage limits under the relevant insurance policy. If less than $650,000 is available within the coverage limit, the settlement consideration is to be the larger of $640,000 or the funds remaining within Defendants' insurance policy. The Plaintiffs' counsel may apply for an award of attorneys' fees and costs from the Settlement Fund, with fees not to exceed $197,994 and costs not to exceed $55,422. They may also apply for an incentive award for Plaintiffs not to exceed $7,500 in the aggregate. The Settlement Agreement provides that Plaintiff Koerner will receive $2,500 in settlement for his ERISA Section 510 retaliation claim. The remainder of the settlement is to be distributed to all participants in the ESOP whose accounts had vested as of July 23, 2008. In exchange, the Settlement provides for general mutual releases between the Plaintiffs and the Defendant, as well as their attorneys, successors, assigns, and related parties. It is conditioned on the Court's entry of a Bar Order, which will dismiss all claims with prejudice and effectively prevent Plaintiffs and other ESOP participants from bringing similar claims against any of the Defendants in the future and Defendants from bringing similar claims against Plaintiff Koerner in the future. A copy of the Court's Order and Opinion dated November 3, 2014, is available at http://is.gd/9MFLj6from Leagle.com. Frederick Hardman, Counter Claimant, is represented by: David G Lubben, Esq. DAVIS & CAMPBELL LLC 401 Main St, #1600 Peoria, IL 61602 Copenhaver, Inc., dba W.M. Putnam Company, an office supply store, filed for Chapter 11 bankruptcy (Bankr. C.D. Ill. Case No. 13-72052) on Oct. 28, 2013, saying assets ranged from $500,001 to $1 million; and debt ranged from $1 million to $10 million. It is represented by Matthew McClintock, Esq., at Goldstein & McClintock, LLLP. A copy of the petition is available at http://bankrupt.com/misc/ilcb13-72052.pdf Copenhaver describes its business as an outsourcer of premise- related products and services for businesses, providing furnishings, interior design, office products, brand management, printing, and consulting services. The Debtor is headquartered in Bloomington, Illinois, and has provided its products and services to a wide range of customers for more than 65 years. A significant loss of business from a key customer precipitated the Debtor's bankruptcy filing. DYNEGY INC: S&P Assigns 'B+' Rating on $5.1BB Sr. Unsecured Notes ----------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B+' issue rating and '3' recovery rating to $5.1 billion aggregate in senior unsecured notes issued by new and temporary Dynegy Inc. subsidiaries Dynegy Finance I Inc. ($2.04 billion maturing from 2019 to 2024), and Dynegy Finance II Inc. ($3.06 billion maturing 2019 to 2024). S&P also assigned its '3' recovery rating to the debt, indicating "meaningful" (50% to 70%) recovery of principal if a default occurs. S&P also affirmed Dynegy's 'B+' corporate credit rating and other debt ratings. The outlook is stable. Once the acquisitions are complete, Dynegy Finance I and Dynegy Finance II will merge into Dynegy, and the notes will become a Dynegy obligation. S&P expects this to occur in late 2014 or early 2015. "The acquisitions will improve Dynegy's scale and market diversity materially by adding a large footprint in the favorable PJM and NePool power markets where Dynegy has limited presence," said Standard & Poor's credit analyst Terry Pratt. The stable outlook reflects S&P's conclusion that Dynegy will complete the acquisitions under the planned capitalization profile of new senior unsecured debt and equity issuance. If Dynegy cannot complete either the Duke or ECP asset acquisitions, then S&P would likely lower the corporate credit rating to 'B'. S&P do not contemplate any improvement in the rating in the forecast period. An upgrade would require another material reduction in business risk or improvement in financial performance -- likely of FFO to debt well above 12x. S&P thinks these developments are unlikely. DYNEGY INC: Swings to Loss on Lower Generation Volumes ------------------------------------------------------ Maria Armental, writing for The Wall Street Journal, reported that Dynegy Inc. swung to a third-quarter loss, hurt by lower generation volumes, though results improved at its coal segment. According to the report, the power giant, which emerged from bankruptcy protection in late 2012, is bulking up its power plant portfolio, buying 21 plants for $6.25 billion, a deal that company officials said would boost generating capacity to about 26,000 megawatts and could triple earnings. About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Holdings and its parent, Dynegy Inc., completed their Chapter 11 reorganization and emerged from bankruptcy Oct. 1, 2012. Under the terms of the DH/Dynegy Plan, DH merged with and into Dynegy, with Dynegy, Inc., remaining as the surviving entity. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., won confirmation of their plan of liquidation in March 2013, allowing the former operating units of Dynegy to consummate a settlement agreement resolving some lease trustee claims and sell their facilities. FLAT OUT CRAZY: Wants Court to Dismiss Chapter 11 Case ------------------------------------------------------ Flat Out Crazy LLC and its debtor-affiliates ask the Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to dismiss their Chapter 11 bankruptcy proceedings. According to the Debtors, they have reached a point where they have accomplished all that can be achieved in these cases and have determined that dismissal is in the best interests of their estates and creditors. The Debtors said, among other things, that they: i) ran a highly successful, but contentious, sale process under significant time constraints resulting in the sale of substantially all of their Flat Top Grill and Stir Crazy assets to The HillStreet Fund IV, LP -- the Debtors' postpetition DIP financing lender and primary prepetition senior and junior secured lender; and ii) successfully resolved significant disputes with certain of their creditors, including HillStreet, creditors asserting PACA trust priority claims, and Vogen Funding L.P. The Debtors noted the sales generated an aggregate purchase price in excess of $10 million, of which approximately $6.7 million was attributable to the Flat Top Assets and approximately $3.3 million to the Stir Crazy Assets. The purchase price was comprised of a combination of cash, a credit against amounts owed to HillStreet under the DIP financing facility and against HillStreet's prepetition senior and junior secured claims, and the assumption of certain iabilities. Pursuant to the asset purchase agreements between the Debtors and HillStreet: a) the Carve-Out required under the Debtors' final DIP financing order was fully funded in cash; b) HillStreet assumed liability for the payment of all cure amounts for nonresidential real property leases and contracts to be assumed and assigned as part of the transaction and for various employee obligations; and c) the amount of secured prepetition and postpetition debt owing to HillStreet was reduced by approximately $6,722,000. The Debtor stated although the asset sale maximized value, it did not generate sufficient proceeds to satisfy all secured debt owing to HillStreet or to pay all professionals retained by the Debtors and the Committee in full. Indeed, the professionals spent significant amounts of time and effort and incurred substantial fees and expenses in running the sale process, addressing creditor disputes, and otherwise advising the Debtors and the Official Committee of Unsecured Creditors but are only being compensated for a fraction of the amounts actually incurred. Since the closing of the asset sale, the Professionals have incurred and continue to incur additional professional fees and expenses for which they will not be paid, the Debtors added. The Debtors pointed out the issue of the payment of professional fees was heavily disputed in the weeks leading up to the petition date and during the opening weeks of the cases during which the Debtors were trying to secure necessary DIP financing to fund business operations and the sale process. The Debtors said no property remains to be administered for the benefit of creditors or which can be used to fund a plan of liquidation and there is no further benefit to remaining in Chapter 11. As such, having consulted with the Committee and the U.S. Trustee, the Debtors have determined that a dismissal is in the best interests of their estates and creditors. A hearing is set for Nov. 18, 2014, at 10:00 a.m. (Eastern) at 300 Quarropas Street, White Plains in New York, to consider the Debtors' dismissal request. Objections, if any, are due Nov. 10, 2014 at 4:00 p.m. (Eastern). About Flat Out Crazy Flat Out Crazy LLC and its affiliates operate two Asian-inspired restaurant chains that began in Chicago. Flat Top Grill, which currently has 15 locations, is a full-service fast-casual create- your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which has 11 locations, is a full-service casual Asian restaurant offering the flavors of Chinese, Japanese, Thai and Vietnamese food. The Debtors have 1,200 employees. Flat Out Crazy and 13 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing and administrative agent; William H. Henrich and Mark Samson from Getzler Henrich as their co-chief restructuring officers; and J.H. Chapman Group, L.L.C, as their investment bankers. The Debtor disclosed $24,339,542 in assets and $15,899,166 in liabilities as of the Chapter 11 filing. An official committee of unsecured creditors has been appointed in the Debtors' cases. The Committee tapped to retain Kelley Drye & Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of New York, LLC as financial advisor. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan Chapell, as the consumer privacy ombudsman in the Debtors' cases. FLYING W SNOWMASS: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Flying W Snowmass, LLC 50 N River Rd Snowmass, CO 81654 Case No.: 14-24969 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Hon. Sidney B. Brooks Debtor's Counsel: Jeffrey Weinman, Esq. WEINMAN & ASSOCIATES, P.C. 730 17th St., Ste. 240 Denver, CO 80202 Tel: ( ) 303-572-1010 Email: jweinman@epitrustee.com Total Assets: $5.01 million Total Liabilities: $4.06 million The petition was signed by Mark Weida, member. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/cob14-24969.pdf FREESCALE SEMICONDUCTOR: Fitch Raises Issuer Default Rating to B+ ----------------------------------------------------------------- Fitch Ratings has upgraded the Long-term Issuer Default rating (IDR) for Freescale Semiconductor, Inc. to 'B+' from 'B-'. The Rating Outlook is Stable. Fitch's actions affect $5.7 billion of total debt. The ratings and Outlook reflects Fitch's expectations for solid intermediate-term operating performance, a strengthening FCF profile from debt reduction and total leverage (total debt to operating EBITDA) below 5x in the near term. Fitch expects secular demand, including automotive unit and content growth, China's 4G LTE infrastructure build-out, and digitalization, will result in low- to mid-single digit revenue growth beyond the near term and drive solid operating performance. This follows double digit revenue growth anticipated for 2014, enabled in part by share gains and the end to top line headwinds from Freescale's legacy wireless business. Fitch expects solid revenue growth and substantial operating leverage from Freescale's lower fixed cost structure due in part to past restructuring will sustain operating EBITDA margin in the 20%-25% range. Higher research and development (R&D) investment associated with the increasing complexity of Freescale's products may constrain profit margin expansion but should drive future reference design wins. Fitch expects mid-cycle annual free cash flow (FCF) to exceed $250 million, driven by lower interest expense from debt reduction and structurally higher operating EBITDA. Freescale reduced debt by more than $800 million since the beginning of 2014 with net proceeds from a secondary equity offering and FCF, resulting in a Fitch estimated $87 million reduction of interest expense. Fitch expects annual FCF will be used primarily for further debt reduction, including the company's recent announcement it will reduce debt by an incremental $100 million during the current quarter. FCF also could be used for small bolt-on acquisitions and Fitch believes the current rating incorporates capacity for modest dividend payments to the equity sponsors. Fitch expects total leverage at or below 5x in the near-term from debt reduction and higher operating EBITDA, versus a Fitch estimated 5.3x for the latest 12 months (LTM) ended October 3, 2014. Operating EBITDA to interest expense should approach 4x in the near term, up from a Fitch estimated 2.7x for the LTM ended Oct. 3, 2014. Fitch also expects FCF to total debt to exceed 5% in 2015, up considerably from 1.5% in 2013. KEY RATING DRIVERS The ratings continue to reflect Freescale's: -- Leading share positions for embedded processors in markets characterized by longer product life cycles, including automotive microcontrollers (MCU), from which Freescale generates 25% of total revenues, and radio frequency (RF) power devices for mobile wireless infrastructure (12% of revenues); -- Secular growth in key end markets, including unit growth and increased content in automotive, proliferation of mobile devices and demand for bandwidth in networking, and increased connectivity for industrial, translating into low- to mid-single digit longer-term revenue growth; -- Strengthened FCF profile, driven by more stable revenues and lower interest expense from ongoing debt reduction. Ratings concerns center on Freescale's: -- Significant exposure to automotive (approximately 40% of revenues) and wireless infrastructure end markets (more than 30% of revenues), including the more project oriented China LTE infrastructure roll-out. Both end markets are experiencing solid growth that Fitch anticipates will moderate in 2015; -- Long-term structural challenges growing market share due to incumbent supplier advantages associated with ongoing design collaboration, which at the same time fortify Freescale's customer relationships and leading market positions; -- Significant and increasing fixed investments in research and development (R&D) and, to a lesser extent, capital spending to maintain competitive technology roadmap. RATINGS SENSITIVITIES Positive rating actions could result from Fitch's expectations for mid-cycle total leverage sustained below 4x, driven by: -- The use of FCF primarily for debt reduction; -- Solid operating performance from share gains and secular demand in key end markets, including automotive, industrial, medical and internet of things end markets; or -- Increased clarity around the potential for dividend payments to the equity sponsors. Negative rating actions could occur from Fitch's expectations for mid-cycle total leverage sustained above 5x, likely due to: -- Lower than anticipated revenue growth from customer market share losses or pressured automotive markets; -- Expectations for annual FCF sustained below $250 million; or -- The use of FCF for purposes other than debt reduction, including significant dividend payments. Fitch believes Freescale's liquidity was sufficient as of Oct. 3, 2014. It consisted of: -- $737 million of cash and short-term investments, of which $249 million is located inside the U.S.; -- $384 million available ($16 million in LOCs) under a $400 million senior secured revolving credit facility due Feb. 2019. Fitch's expectations for more than $250 million of annual FCF also support liquidity. Total debt was approximately $5.7 billion as of Oct. 3, 2014 and consisted of: -- $2.7 billion senior secured term loan due March 2020: -- $785 million senior secured term loan due Jan. 2020; -- $500 million of 5% senior secured notes due 2021; -- $960 million of 6% senior secured notes due 2022; -- $473 million of 10.75% senior unsecured notes due 2020; -- $280 million of 8.05% senior unsecured notes due 2020. The Recovery Ratings (RR) reflect Fitch's belief that Freescale's enterprise value, and hence recovery rates for its creditors, will be maximized as a going concern rather than liquidation scenario. In estimating a distressed enterprise value, Fitch assumes post- reorganization operating EBITDA of $750 million. Fitch applies a 5x distressed EBITDA multiple to reach a reorganization enterprise value of approximately $3.75 billion. As is standard with Fitch's recovery analysis, the revolver is assumed to be fully drawn and cash balances fully depleted to reflect a stress event. After reducing the amount available in reorganization for administrative claims by 10%, Fitch estimates the senior secured debt would recover 51% - 70%, equating to 'RR3' Recovery Ratings. The senior unsecured and senior subordinated debt tranches would recover 0% - 10%, equating to 'RR6' Recovery Ratings and reflect Fitch's belief that minimal if any value would be available for unsecured note holders. Fitch's upgrades Freescale's ratings as: -- Long-term IDR to 'B+' from 'B-'; -- Senior secured bank revolving credit facility (RCF) to 'BB-/RR3' from 'B/RR3'; -- Senior secured term loans to 'BB-/RR3' from 'B/RR3'; -- Senior secured notes to 'BB-/RR3' from 'B/RR3'; -- Senior unsecured notes to 'B-/RR6' from 'CCC/RR6'. GENERAL MOTORS: Fitch Assigns 'BB+' Rating on Sr. Unsecured Notes ----------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+' to General Motors Company's (GM) proposed issuance of senior unsecured notes. The existing Issuer Default Rating (IDR) for GM is 'BB+' and the Rating Outlook is Positive. KEY RATING DRIVERS The proposed senior unsecured notes will be issued in three series, due in 2025, 2035 and 2045. The notes will be issued under a supplement to the indenture that covers the company's existing $4.5 billion senior unsecured notes that were issued in 2013. GM intends to use proceeds from the proposed notes to fund a portion of the planned redemption of its $3.9 billion in series A preferred stock and for general corporate purposes. GM can redeem the series A preferred stock beginning Dec. 31, 2014, and Fitch expects the company will redeem the shares on or shortly after that date. Although the proposed notes will result in a slight increase in leverage, Fitch expects EBITDA leverage will remain below 1.0x and relatively low for the rating category over the intermediate term. Along with its recently upsized revolving credit facility, proceeds from the proposed notes will also provide GM with some additional liquidity as the company faces potentially significant future cash costs tied to the various lawsuits and investigations stemming from its ignition switch recall earlier this year and as it continues its restructuring activities in Europe and in parts of its International Operations segment. GM's IDR continues to be supported by the company's low automotive leverage, strong liquidity position, reduced pension obligations and strengthened product portfolio, as well as the free cash flow (FCF) generating capability of its automotive operations. Also incorporated into GM's ratings is the global diversity of its business, including relatively strong market positions in key developing markets, such as China and Latin America. The Positive Outlook reflects the underlying trends in GM's core business, including Fitch's expectation that the company's North American profitability will rise over the intermediate term on a combination of pricing growth and increased operational efficiency. GM's European operations appear to be on track to meet or exceed the company's mid-decade break-even target, and its Chinese joint ventures (JVs) continue to generate solid cash dividends despite increasingly challenging market conditions. The funded status of GM's pension plans has improved materially over the past several years, and Fitch expects the company's de-risking efforts to reduce the plans' sensitivity to interest rates going forward. Although GM's operational performance continues to improve, Fitch's remains concerned about the significant number of lawsuits and investigations that have been launched following the company's heavy recall activity earlier this year. Although Fitch expects the direct costs of the recalls to be substantial, they should be manageable given GM's liquidity position. However, the company's ultimate exposure from the lawsuits and investigations is currently unclear. The greatest number of lawsuits is related to alleged economic damages, particularly loss of vehicle value, but dozens of other suits are related to claimed deaths or injuries. Although the merits of the economic loss cases may be questionable, the death and injury cases likely pose a greater potential economic exposure to the company. Some subset of the death and injury cases may be settled through GM's ignition switch victim compensation program, which would be viewed positively by Fitch. Beyond the lawsuits, 48 state attorneys general are examining the recalls, as are the U.S. Securities and Exchange Commission, the U.S. Congress, Transport Canada and others. Fitch expects the various lawsuits and investigations will not be fully resolved for several years, but more clarity may be gleaned in the near term as the ignition switch victim compensation program makes awards to eligible claimants. As a condition for accepting an award, eligible claimants agree not to sue the company. More clarity may also be revealed when the bankruptcy court rules on the pre- versus post-petition status of a number of the outstanding lawsuits. A pre-petition ruling by the court would remove GM's potential liability in those cases, but the timing of any court decision is currently unclear. RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Increasing the North American EBIT margin to near 10% on a sustained basis. -- Improving the profitability of the company's European operations. -- Sustained positive FCF generation, excluding unusual items. -- Increased clarification that the follow-on costs of the recalls can be managed while keeping automotive cash liquidity at $20 billion or higher. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- A decline in cash liquidity below $20 billion for a prolonged period. -- Significant negative developments related to the recalls that result in a greater-than-expected cash outflow. -- A sustained period of negative FCF generation. -- A change in financial policy, particularly around maintaining high liquidity and low leverage. -- A need to provide extraordinary financial assistance to GMF in the case of a liquidity event at the finance subsidiary. Following the actions, Fitch maintains these ratings on GM and its subsidiaries with a Positive Outlook: GM -- Long-term IDR 'BB+'; -- Unsecured credit facility rating 'BB+'; -- Senior unsecured notes rating 'BB+'. General Motors Financial Company, Inc. -- Long-term IDR 'BB+'; -- Senior unsecured debt 'BB+'; -- Short-term IDR 'B'. GMAC Bank GmbH -- Long-term IDR 'BB+'; -- Senior unsecured debt 'BB+'; -- Short-term IDR 'B'; -- Commercial paper 'B'. GMAC (UK) Plc -- Long-term IDR 'BB+'; -- Short-term IDR 'B'; -- Short-term debt 'B'. GREAT WOLF: Moody's Rates New $120MM 2nd Sr. Secured Debt 'Caa2' ---------------------------------------------------------------- Moody's Investors Service revised the rating outlook of Great Wolf Resorts Holdings, Inc. to stable from positive. The B3 Corporate Family Rating and B3-PD Probability of Default Rating were affirmed. Moody's also assigned a Caa2 rating to Great Wolf's proposed $120 million second lien senior secured term loan. In addition, Moody's upgraded the first lien senior secured term loan to B2 from B3. The change in outlook to stable reflects Moody's view that Great Wolf's financial policy does not support maintaining debt to EBITDA below 5.25 times, a level that would be necessary for a higher rating. The upgrade of the first lien senior secured term loan to B2 reflects the support that the first lien term loan receives from the proposed $120 million second lien term loan in accordance with Moody's Loss Given Default methodology. All ratings are subject to receipt and review of final documentation. The following ratings are upgraded assuming the successful closing of the proposed transaction: $100 million guaranteed senior secured revolver due August 2018 at B2, LGD 3 from B3, LGD 3 $470 million first lien guaranteed senior secured term loan due July 2020 at B2, LGD 3 from B3, LGD 3 The following rating is assigned: $120 million second lien guaranteed senior secured term loan due November 2021 at Caa2, LGD 5 The following ratings are affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD Should the proposed transaction not close, the following ratings would revert to: $100 million guaranteed senior secured revolver due August 2018 at B3, LGD 3 $470 million first lien guaranteed senior secured term loan due July 2020 at B3, LGD 3 Ratings Rationale A portion of the proceeds from the proposed $150 million first lien senior secured term loan add-on and proposed $120 million second lien senior secured term loan will be used to repay Great Wolf's $60 million Traverse City and Kansas City mortgage loan, while the remainder will be used to finance a $200 million dividend to Great Wolf's ultimate financial sponsor owner, Apollo Global Management. Moody's estimates that the incremental debt will increase pro forma debt to EBITDA to 7.5 times from 5.4 times for the twelve months ended June 30, 2014. The affirmation of the B3 Corporate Family Rating reflects Moody's expectation that Great Wolf's increase in leverage will be temporary. Moody's expects the earnings stream from the new location opened in New England along with company's ability to leverage cost saving initiatives will drive free cash flow generation which will be used repay debt and reduce leverage. The affirmation acknowledges Moody's expectation that, barring any further debt financed dividends, leverage will fall to between 6.0 times and 6.5 times over the next twelve to eighteen months, a level that is in line with the B3 Corporate Family Rating. The B3 CFR reflects Great Wolf's high leverage, modest coverage, small scale, earnings concentration by property, limited diversification, and high operating leverage given its fixed cost base. The ratings also reflect Great Wolf's improved operating performance as well as its solid brand recognition, continued focus on cost reduction, good asset value relative to funded debt levels, and good liquidity. The stable outlook reflects Moody's view that Great Wolf's overall operating performance should continue to improve through cost saving initiatives and added earnings from the New England property which will result in leverage falling to levels in line with its B3 rating over the next twelve to eighteen months. Assuming the transaction closes, Great Wolf's liquidity is good. Moody's expect Great Wolf to fund all of its required cash needs from internal sources and cash balances, including mandatory amortization and maintenance capex. A continued focus on reducing costs and greater focus on licensing agreements going forward versus significant greenfield developments should also strengthen free cash flow. However, 2013 saw capex well above recent levels as Great Wolf refurbished existing properties and acquired land. In 2014, capex will likely be above historic levels with the completion of its New England property. Absent these growth initiatives, annual maintenance capital expenditures are expected to be manageable at around $10 million compared to depreciation of about $46 million. Great Wolf also has a $100 million revolving credit facility, which significantly bolsters liquidity given its size and the expectation that the facility will remain largely undrawn. The company remains limited in its sources of alternate liquidity outside of internal and facility sources. Should the proposed deal not close, Great Wolf's liquidity will be constrained by its $60 million mortgage due January 2015. Great Wolf has sufficient availability under the revolving credit facility to repay the mortgage loan, however, that would pressure its liquidity profile by reducing availability. Factors that could result in a higher rating include a sustained improvement in operating metrics and cost structure at existing resorts and the addition of new resort properties and management agreements that generate stronger earnings and debt protection metrics. Specifically, an upgrade would require debt to EBITDA of under 5.25 times and EBITDA minus capital expenditures to gross interest above 2.25 times on a sustained basis. A higher rating would also require a financial policy that supports credit metrics remaining at these levels and good liquidity. Factors that could result in negative ratings pressure include a deterioration in operating metrics or inability to reduce costs at existing resort properties or the absence of new revenue sources through new management agreements or resort properties that caused a sustained deterioration in credit metrics or liquidity. Specifically, a downgrade could occur if debt to EBITDA remains above 6.5 times and EBITDA less capex below 1.5 times over the next twelve to eighteen months. Great Wolf Resorts Holdings, Inc., owns, operates, and/or manages hotel resort properties specializing in in-door water parks. Annual revenues are approximately $325 million. GWR is owned by affiliates of Apollo Management VII, LP. The principal methodology used in these ratings was Global Lodging & Cruise Industry Rating Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. HAHAHA CORPORATION: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Hahaha Corporation 9001 Braddock Rd #320 Springfield, VA 22151 Case No.: 14-14104 Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Hon. Robert G. Mayer Debtor's Counsel: Weon Geun Kim, Esq. WEON G. KIM LAW OFFICE 8200 Greensboro Drive, Suite 900 McLean, VA 22102 Tel: (571)-278-3728 Fax: (703) 462-5459 Email: jkkchadol99@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jeong Joon Moon, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. HC2 HOLDINGS: S&P Assigns 'B' CCR & Rates Sr. Secured Notes 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Herndon, VA-based operating holding company HC2 Holdings Inc. The rating outlook is stable. At the same time, S&P assigned its 'B' issue rating and '4' recovery rating to the company's proposed $250 million senior secured notes. The '4' recovery rating indicates S&P's expectation for average (30%-50%) recovery in a payment default scenario. S&P's rating on HC2 reflects the company's weak asset diversity, with portfolio concentration in two companies (Schuff International Inc. and Global Marine Systems Ltd. [GMSL]); limited financial flexibility, with significant asset value in controlled companies; as well as a short track record, with the stated investment strategy of seeking controlling equity stakes and maintaining ownership over an extended time horizon. S&P expects coverage metrics will remain stretched and potentially volatile over the next two years, given the company's asset profile and limited track record. "The stable rating outlook reflects our expectation for continued weak asset diversity and stretched coverage metrics over the next year," said Standard & Poor's credit analyst Robyn Shapiro. "But it also reflects our expectation for liquidity to remain adequate, particularly given cash balances pro forma for the proposed note issuance." S&P expects a total debt service coverage ratio of about 1x in fiscal 2015, and S&P anticipates dividend capacity at existing portfolio companies could support coverage. S&P could lower its ratings if HC2's liquidity profile weakens to "less than adequate." S&P believes this could occur if dividends from the two main portfolio investments fall as a result of an unexpected decline in operating performance at one or more operating subsidiaries, because of project losses, for example. Alternatively, this could occur if HC2 acquires companies that are unable to pay consistent dividends, resulting in secured debt coverage sustained below 1x. S&P could raise its ratings if HC2 acquires companies that pay consistent dividends, which would reduce the expected volatility of the company's cash flow sources and would strengthen asset diversity. In this scenario, HC2 would need to maintain the total debt service coverage ratio consistently above 2x. INDEX RECOVERY: Claims Bar Date Set for November 28 --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York set Nov. 28, 2014, as deadline for creditors of Index Recovery Group LP to file proofs of claim, and April 21, 2015, for governmental units to file their claims. About Index Recovery Group Index Recovery Group, LP, sought Chapter 11 protection (Bankr. N.D.N.Y. Case No. 14-61434) in Utica, New York, on Sept. 2, 2014. The Debtor disclosed total assets of $13.76 million and total liabilities of $35.48 million. Judge Diane Davis presides over the case. The Debtor is represented by Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C. INTERPROPERTIES HOLDING: Fitch Withdraws BB Issuer Default Ratings ------------------------------------------------------------------ Fitch Ratings has withdrawn these ratings of Interproperties Holding: Interproperties: -- Foreign currency Issuer Default Rating (IDR) 'BB'; -- Local currency IDR 'BB'. Interproperties Finance Trust (IFT): -- Foreign currency IDR 'BB'; -- Local currency IDR 'BB'; -- USD185 million senior secured notes 'BB'. The withdrawal of the ratings follows the completion of a debt refinancing. The ratings for Interproperties, IFT, and the debt instrument is no longer considered by Fitch to be relevant to the agency's coverage. KEMET CORP: Moody's Rates New Sr. Secured Notes Due 2019 'Caa1' --------------------------------------------------------------- Moody's Investors Service rated KEMET Corp.'s new Senior Secured Notes due 2019 at Caa1. Moody's affirmed the Caa1 Corporate Family Rating ("CFR") but raised the outlook to positive. Proceeds from the New Notes will be used to repay KEMET's $374 million of existing 10.5% Senior Notes due 2018 and for financing costs. Assignments: Issuer: KEMET Corporation Senior Secured Regular Bond/Debenture (Local Currency), Assigned Caa1 Senior Secured Regular Bond/Debenture (Local Currency), Assigned LGD4 Outlook Actions: Issuer: KEMET Corporation Outlook, Changed To Positive From Stable Affirmations: Issuer: KEMET Corporation Corporate Family Rating (Local Currency), Affirmed Caa1 Probability of Default Rating, Affirmed Caa1-PD Speculative Grade Liquidity Rating, Affirmed SGL-4 Senior Secured Regular Bond/Debenture (Local Currency) May 1, 2018, Affirmed Caa1 (rating to be withdrawn upon closing of the New Notes) Ratings Rationale The change to a positive rating outlook reflects Moody's expectation that KEMET's profitability will improve over the next year as the company begins to capture the benefit of the past several years of restructuring and vertical integration activities. Moreover, the refinancing should result in a modest improvement in KEMET's interest burden and pushes out KEMET's largest block of debt by a year, which improves KEMET's liquidity and financial risk profile. The Caa1 CFR and SGL-4 Speculative Grade Liquidity rating reflect Moody's belief that a liquidity pressure could emerge over the next year as Moody's expect both significant near term financial liabilities and only modest free cash flow due to the high interest burden and the weak Film and Electrolytic ("F&E") segment. These near term financial liabilities include the remaining payments on the Niotan acquisition and payments on the $20 million advance from an OEM ("OEM Advance"). The rating also reflects the highly cyclical nature of the capacitors industry as a whole. Supporting the rating is KEMET's market position as a key competitor versus AVX and Vishay in the $1.7 billion tantalum capacitors segment. Moody's expect KEMET will generate free cash flow of up to $5 million over the coming year. The rating could be upgraded if KEMET's restructuring efforts indicate progress in reducing the cost base without compromising KEMET's competitive position and business conditions improve, with growing revenues and sustained positive free cash flow (FCF), such that the ratio of FCF to debt (Moody's adjusted) is sustained above the low single digits percent. Moreover, Moody's would expect that KEMET will have built liquidity sufficient to cover the cash needs posed by the remaining payments on the Niotan purchase price and the OEM Advance leaving at least $50 million of cash in excess of these potential near term demands. The rating could be downgraded if the recent improvement to FCF reverse such that Moody's believe that FCF will turn negative and cash consumption will continue. Moody's may downgrade the rating if Moody's believe that cash (including restricted cash related to the OEM Advance) is on-course to decline below $50 million. The principal methodology used in this rating/analysis was Global Semiconducter Industry Methodology published in December 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. 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. LEIDOS HOLDINGS: Moody's Lowers Senior Unsecured Rating to Ba1 -------------------------------------------------------------- Moody's Investors Service has downgraded the senior unsecured ratings of Leidos Holdings, Inc. to Ba1 from Baa3 and concurrently assigned a Corporate Family Rating of Ba1, a Probability of Default Rating of Ba1-PD and a Speculative Grade Liquidity Rating of SGL-2. The rating outlook continues at negative. Ratings: Corporate Family, assigned at Ba1 Probability of Default, assigned at Ba1-PD Senior unsecured notes to Ba1, LGD4 from Baa3 Speculative Grade Liquidity, assigned at SGL-2 Rating Outlook, Negative Ratings Rationale The downgrade to Ba1 reflects backlog declines with weaker credit metrics expected and a more challenging execution path ahead. Leidos' differentiation as a services contractor with capacity to prime large, complex, single award services vehicles within the US intelligence/defense communities (National Security Solutions segment, comprising about 70% of annual revenues) supports the rating. Established credentials and a diverse, highly cleared, and technically well qualified labor pool underscore its strong position. But this core business will probably continue declining through 2016 with budget pressure and lower operational tempo. Through 2016 Moody's expects that Leidos' debt/EBITDA ratio should range at or above 3.5x, with EBIT/interest at a similar level-- sufficient but not robust metrics for the rating. Revenues will likely decline by more than 10% in the 2015 fiscal year and a 5% to 8% decline in the 2016 fiscal year seems probable as well. Operating margins, before special charges, should slightly improve based on the past year's cost actions. The negative rating outlook recognizes low and unsteady operating performance of Leidos' Health & Engineering segment (30% of revenues), which had been expected to help offset the declining national security business after the company's September 2013 spin-off transaction. Instead, special charges have continued, the Health & Engineering segment has generated losses, and the company's ability to meet its financial forecasts has suffered. The underperformance both absorbs management's attention and inhibits progress toward a more integrated, efficient organizational structure. Achieving at least a steady segment operating position will carry execution risk and likely entail further restructuring work, improved marketing and segment leadership enhancement. Elevated potential for rating downgrade will continue until the backlog trend improves and performance drag from Health & Engineering lessens. Leidos' progress toward the broader organizational and performance aims of its spin-off transaction will likely remain constrained until the Health & Engineering segment improves. Yet competition within the core national security business line is rising as outlays decline, federal acquisition practice reforms continue, mergers occur and operators become more formidable. The Speculative Grade Liquidity Rating of SGL-2 denotes good liquidity. An unutilized $500 million revolving credit facility and a lack of near term debt maturities are the overriding reasons. Looser financial ratio covenant tests requirements achieved through Leidos' recently executed credit facility amendment should enable access to the full revolver commitment level near-term. The cash balance is expected to remain around $300 million near-term. If cash is expected to be carried at a materially higher level, with ample covenant cushion, the SGL rating could improve. Stabilization of the rating outlook would depend on a higher and steadier profit outlook, particularly for the Health & Engineering segment, a firming backlog trend overall, confidence of management team stability, and expectation that special charges will diminish in frequency and severity. Accompanying outlook stabilization would be likelihood of debt/EBITDA below 3.5x with annual free cash flow of around $200 million. Downward rating pressure would mount with continued backlog erosion, material special charges, expectation of debt/EBITDA approaching 4x and annual free cash flow of less than $200 million. Upward rating momentum, not currently anticipated, would depend on rising backlog, expectation of EBITDA margin nearing 12%, debt/EBITDA at or below 3x with $300 million or more of annual free cash flow. Expectation of a balanced approach to shareholder returns would as well accompany a rating upgrade. The principal methodology used in this rating was Global Aerospace and Defense Industry published in April 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. Leidos Holdings, Inc., is a defense/intelligence, engineering, and health services provider. Moody's expects revenue for the fiscal year ending January 31, 2015 to be between $4.8 billion and $5.1 billion, declining from revenue in the twelve months ended August 1, 2014 of $5.3 billion. LENNAR CORP: Fitch Assigns BB+ Rating on New $350MM Sr. Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Lennar Corporation's (NYSE: LEN and LEN.B) proposed offering of $350 million of senior notes due 2019. This issue will be ranked on a pari passu basis with all other senior unsecured debt. Net proceeds from the notes offering will be used for working capital and general corporate purposes. The Rating Outlook is Stable. KEY RATING DRIVERS The ratings and Outlook for Lennar reflect the company's strong liquidity position and continuing recovery of the housing sector this year and in 2015. The ratings also reflect Lennar's successful execution of its business model over many cycles, geographic and product line diversity, and much lessened joint venture exposure than was the case just a few years ago. The company did a good job in reducing its inventory exposure (especially early in the correction) and generating positive operating cash flow during the past, severe industry downturn. Additionally, Lennar steadily, substantially reduced its number of joint ventures (JVs) over the last few years and, as a consequence, has very sharply lowered its JV recourse debt exposure (from $1.76 billion to $24.6 million as of Aug. 31, 2014). In contrast to almost all the other public homebuilders Lennar was profitable in fiscal 2010 and 2011 and the company was solidly profitable in fiscal 2012 and 2013. The company's gross margins are consistently above its peers, and contributions from its Rialto Investment segment have added to corporate profits in 2010, 2011, 2012 and 2013. There are still some challenges facing the housing market that are likely to moderate the early-to-intermediate stages of this recovery. Nevertheless, Lennar has the financial flexibility to navigate through the sometimes challenging market conditions and continue to broaden its franchise and invest in land and other opportunities. THE INDUSTRY Housing metrics should increase in 2014 due to moderate economic growth during the last three quarters of the year (prompted by improved household net worth, industrial production and consumer spending), and consequently some acceleration in job growth (as unemployment rates decrease to 6.2% for 2014 from an average of 7.4% in 2013), despite somewhat higher interest rates, as well as more measured home price inflation. Single-family starts in 2014 are projected to improve 2.9% to 636,000 as multifamily volume grows 17.6% to 361,000. Thus, total starts this year should be just short of 1 million. New home sales are forecast to edge up almost 1.5% to 436,000, while existing home volume is likely to decline 6% to 4.785 million due to fewer distressed homes for sale and limited inventory. 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 about 18% to 750,000 as multifamily volume expands about 7% to 386,000. Total starts would be in excess of 1.1 million. New home sales are projected to increase 18% to 515,000. Existing home volume is expected to approximate 5.025 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 2.2%-2.7%. Challenges remain, including the potential for higher interest rates, and restrictive credit qualification standards. IMPROVING FINANCIAL RESULTS AND CREDIT METRICS Lennar's corporate revenues expanded 29.3% to $5,195.87 million during the first nine months of 2014. Homebuilding revenues increased 30.5% to $4,696.94 million as home deliveries grew 11.2% to 14,053 and the average selling price increased 14.7% to $325,585. Deliveries improved in each region. The strongest comparisons were reported for the East and West regions, up 11.1% and 20.2%, respectively. The housing gross profit margin also reflected healthy improvement, growing 131 basis points (bps) to 25.28% during the first three quarters of 2014 - above peer averages. SG&A expense as a percentage of total homebuilding revenues declined from 10.75% to 10.57% for the first nine months of 2014. The company reported homebuilding operating income of $658.66 million for the first three quarters of 2014, up 50.1%. Financial services revenues decreased 3.4% to $316.35 million with lesser refinance activity, while segment profits dropped about 27% to $49.90 million as a result of competitive pressures. Rialto Investments revenues expanded 79.7% to $142.20 million and consisted primarily of securitization revenue and interest income from Rialto Mortgage Finance (RMF), interest income associated with the Rialto's segment's portfolio of real estate loans and fees for managing and servicing assets. Rialto had an operating profit of $7.66 million for the first three quarters of 2014 (including $20.7 million of net loss attributable to non- controlling interest) as compared to a year earlier profit of $10.56 million (including $4.6 million of net earnings attributable to non-controlling interest). Lennar Multifamily reported revenues of $40.39 million in 2014, up 204.9%. The segment operating loss slimmed from $10.44 million to $4.88 million. The corporate pretax income advanced 46.1% to $591.84 million. With a much higher (normalized) tax rate in 2014, net earnings attributable to Lennar rose 24.7% to $393.59 million for the nine months ended Aug. 31, 2014. Debt-to-latest 12 months (LTM) EBITDA was 4.4x at the end of the third quarter 2014, while interest coverage was 3.9x. Fitch expects further improvement in credit metrics, with leverage approaching 4.0x and interest coverage nearing 4.0x by the end of 2014. Net unit orders and the value of orders expanded 13.7% and 24.9% respectively, for the first nine months of 2014. (Orders were up 23.1% in the third quarter of 2014.) As of Aug. 31, 2014, unit backlog increased 22.4% to 7,290 and the backlog average sales price improved 5.5% to $339,736. The value of backlog gained 29.1% to $2,476.67 million. LIQUIDITY The company's homebuilding operations ended the third quarter of 2014 with $542.24 million in unrestricted cash and equivalents and $11.77 million in restricted cash. At Aug. 31, 2014, Lennar had a $1.5 billion unsecured revolving credit facility with certain financial institutions which includes a $263 million accordion feature that matures in June 2018, $200 million of letter of credit facilities with a financial institution and a $140 million letter of credit facility with a different financial institution. The proceeds available under the credit facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The credit facility agreement also provides that up to $500 million in commitments may be used for letters of credit. As of Aug. 31, 2014, there were $70 million of borrowings under the credit facility. The company's debt maturities are well-laddered, with about 17% of its senior notes (as of Aug. 31, 2014) maturing through 2016. Lennar's performance letters of credit outstanding were $240.7 million as of Aug. 31, 2014. The company's financial letters of credit outstanding were $181.1 million at the end of the third quarter. Performance letters of credit are generally posted with regulatory bodies to guarantee its performance of certain development and construction activities. Financial letters of credit are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. HOMEBUILDING The company was the second largest homebuilder in 2013 and primarily focuses on entry-level and first-time move-up homebuyers. In 2013 and so far in 2014, approximately one third of sales were to the first time buyer, half to first time move up customers and the balance is a mix of second time move up, luxury and active adult. The company builds in 17 states with particular focus on markets in Florida, Texas and California. Lennar's significant ranking (within the top five or top 10) in many of its markets, its largely presale operating strategy, and a return on capital focus provide the framework to soften the impact on margins from declining market conditions. Fitch notes that in the past, acquisitions (in particular, strategic acquisitions) have played a significant role in Lennar's operating strategy. Compared to its peers, Lennar has had above-average exposure to JVs during this past housing cycle. Longer-dated land positions are controlled off balance sheet. The company's equity interests in its partnerships generally ranged from 10% to 50%. These JVs have a substantial business purpose and are governed by Lennar's conservative operating principles. They allow Lennar to strategically acquire land while mitigating land risks and reduce the supply of land owned by the company. They help Lennar to match financing to asset life. JVs facilitate just-in-time inventory management. Nonetheless, Lennar has substantially reduced its number of JVs over the last eight years (from 270 at the peak in 2006 to 36 as of Aug. 31, 2014). As a consequence, the company has very sharply lowered its JV recourse debt exposure from $1.76 billion to $24.6 million as of Aug. 31, 2014. In the future, management will still be involved with partnerships and JVs, but there will be fewer of them and they will be larger, on average, than in the past. The company did a good job in reducing its inventory exposure (especially early in the correction) and generating positive operating cash flow. In 2010, the company started to rebuild its lot position and increased land and development spending. Lennar spent about $600 million on new land purchases during 2011 and expended about $225 million on land development during the year. This compares to roughly $475 million of combined land and development spending during 2009 and about $704 million in 2010. During 2012, Lennar purchased approximately $1 billion of new land and spent roughly $302 million on development expenditures. Land spend totaled almost $1.9 billion in 2013, and development expenditures reached about $600 million, double the level of 2012. Total real estate spending in 2014 could be flat to up moderately (perhaps $200 million) as Lennar incrementally focuses more on development activities than on land spend. The company was considerably more cash flow negative in 2013 ($807.71 million) than in 2012 ($424.65 million). Lennar is likely to be much less cash flow negative in 2014, maybe half as much as in 2013. Fitch is comfortable with this real estate strategy given the company's cash position, debt maturity schedule, proven access to the capital markets and willingness to quickly put the brake on spending as conditions warrant. FINANCIAL SERVICES Lennar's financial services segment provides mortgage financing, title insurance and closing services for both buyers of its homes and others. Substantially all of the loans that the segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, Lennar retains potential liability for possible claims by purchasers that the company breached certain limited industry standard representations and warranties in the loan sale agreements. The company participates in mortgage refinance activity, which periodically is consequential business. During the first three quarters of 2014, Lennar's financial services subsidiary provided loans to approximately 77% of its homebuyers who obtained mortgage financing in areas where Lennar offered services. During that same period, the company originated approximately 15,800 mortgage loans totaling $3.98 billion. RIALTO Lennar's Rialto segment was formed to focus on acquisitions of distressed debt and other real estate assets utilizing Rialto's abilities to source, underwrite, price, turnaround and ultimately monetize such assets in markets across the United States. Lennar had a similar operation in the 1980s, LNR Property Corporation, which was the vehicle used by the company to invest in and work out large portfolios of distressed real estate assets purchased from the government's Resolution Trust Corporation (RTC). This operation was subsequently spun-off as a separate publicly traded company and was later acquired by Cerberus Capital Management. Lennar's Rialto reportable segment is a commercial real estate investment, investment management, and finance company focused on raising, investing and managing third party capital, originating and securitizing commercial mortgage loans, as well as investing its own capital in real estate related mortgage loans, properties and related securities. Rialto utilizes its vertically-integrated investment and operating platform to underwrite, diligence, acquire, manage, workout and add value to diverse portfolios of real estate loans, properties and securities, as well as providing strategic real estate capital. Rialto's primary focus is to manage third party capital and to originate and sell into securitizations commercial mortgage loans. Rialto has commenced the workout and/or oversight of billions of dollars of real estate assets across the United States, including commercial and residential real estate loans and properties, as well as mortgage backed securities. To date, many of the investment and management opportunities have arisen from the dislocation in the United States real estate markets and the restructuring and recapitalization of those markets. In July 2013, RMF was formed to originate and sell into securitization five, seven and 10-year commercial first mortgage loans, generally with principal amounts between $2 million and $75 million, which are secured by income producing properties. This business is expected to be a significant contributor to Rialto revenues, at least in the near future. Rialto is the sponsor of and an investor in private equity vehicles that invest in and manage real estate related assets. This includes: -- Rialto Real Estate Fund, LP that was formed in 2010 to which investors have committed and contributed a total of $700 million of equity (including $75 million by Lennar); -- Rialto Real Estate Fund II, LP that was formed in 2012 with the objective to invest in distressed real estate assets and other related investments and that as of Aug. 31, 2014 had equity commitments of $1.3 billion (including $100 million by Lennar) and was closed to additional commitments; -- Rialto Mezzanine Partners Fund that was formed in 2013 with a target of raising $300 million in capital (including $27 million committed by Lennar) to invest in performing mezzanine commercial loans that have expected durations of one to two years and are secured by equity interests in the borrowing entity owning the real estate assets. Rialto also earns fees for its role as a manager of these vehicles and for providing asset management and other services to those vehicles and other third parties. Lennar Multifamily Since 2012, Lennar has become actively involved, primarily through unconsolidated entities, in the development of multifamily rental properties. This business segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. As of Aug. 31, 2014, Lennar's balance sheet had $205 million of assets related to the Lennar Multifamily segment, which includes investments in unconsolidated entities of $92.9 million. Lennar's net investment in the Lennar Multifamily segment as of Aug. 31, 2014 was $159.5 million. As of Aug. 31, 2014, the Lennar Multifamily segment had interests in 19 communities with development costs of approximately $1.1 billion, of which one community was completed and operating, two communities were partially completed and leasing, and 16 communities were under construction. The Lennar Multifamily segment also had a pipeline of future projects totaling $3.9 billion in assets across a number of states that will be developed primarily by unconsolidated entities. FIVEPOINT COMMUNITIES FivePoint manages large, complex master planned communities in the Western U.S., typically in a JV structure. These include the former military installation El Toro, the former Newhall Land and Farming Company (just north of Los Angeles) and San Francisco's Hunters Point. These entities will not be generating meaningful home deliveries for another few years. At Great Park (El Toro), the first phase of 726 homes is over 80% sold out and the second phase of 1,000 home sites will begin to be sold to builders at the beginning of next year. The grand opening will be late spring 2015. Lennar won two lawsuits which would have impeded the development at Newhall Land and also won an appeal of a lawsuit that challenged its environmental permit in the second quarter 2014. Newhall continues to defend various legal challenges, but its intent is to break ground in 2015. Lennar is pre-selling homes at the Shipyard, Candle Stick Park/Hunters Point, in San Francisco. About 250 homes are under construction and another 100 are scheduled to break ground in 2014. The venture will begin delivering these homes in 2015. Lastly, at Treasure Island, Lennar is designing homes and doing land development engineering with an expectation to break ground in early 2016. 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. Fitch would consider taking further positive rating actions if the recovery in housing accelerates and Lennar shows steady improvement in credit metrics (such as debt to EBITDA leverage consistently less than 3x), while maintaining a healthy liquidity position (in excess of $1 billion in a combination of cash and revolver availability). Conversely, negative rating actions could occur if the recovery in housing dissipates and Lennar maintains an overly aggressive land and development spending program. This could lead to sharp declines in profitability, consistent and significant negative quarterly cash flow from operations, higher leverage and meaningfully diminished liquidity position (below $500 million). Fitch currently rates Lennar as: -- Issuer Default Rating 'BB+'; -- Senior unsecured debt 'BB+'. The Rating Outlook is Stable. LENNAR CORP: Moody's Rates New $350 Unsecured Notes 'Ba3' --------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Lennar Corporation's proposed new $350 million of senior unsecured notes due 2019, proceeds of which will be used for working capital and general corporate purposes. In the same rating action, Moody's affirmed Lennar's Ba3 corporate family rating, Ba3-PD probability of default rating, and the Ba3 rating on the company's 10 existing issues of senior unsecured and convertible senior notes due from 2015 to 2022. Moody's also raised Lennar's speculative grade liquidity rating to SGL-1 from SGL-2. The rating outlook remains positive. The positive outlook reflects Moody's expectation that Lennar's adjusted debt leverage will trend towards that of a Ba2-rated homebuilder within the next 12 to 18 months while its other key credit metrics, e.g., gross margins, interest coverage, and return on assets, will continue to improve and, in some cases, exceed Ba2 levels. The following rating actions were taken: Proposed new $350 million of senior unsecured notes due 2019, assigned Ba3, LGD4; Corporate family rating, affirmed Ba3; Probability of default rating, affirmed at Ba3-PD; Existing senior unsecured notes, affirmed at Ba3, LGD4 ; Existing convertible senior notes, affirmed at Ba3, LGD4; Existing senior unsecured shelf, affirmed at Ba3; Speculative grade liquidity assessment, raised to SGL-1 from SGL-2; Ratings outlook is positive. Ratings Rationale The Ba3 corporate family rating reflects the company's industry- leading gross margins among the pure homebuilders; its strong earnings performance; the near elimination of its formerly outsized recourse joint venture debt exposure; and the substantial tangible equity base. In addition, the company has successfully managed its investments in new asset classes that are different from, albeit related to, more traditional homebuilding activities. At the same time, Lennar's ratings incorporate an adjusted pro forma homebuilding debt leverage of approximately 53% as of August 31, 2014 that is stretched even for a Ba3; the expectation of negative cash flow from operations over the next 12 to 18 months as the company continues to feed its growth engine; the moderately long land position; and its high proportion of speculative construction. In addition, Lennar's propensity to invest in different asset classes and structures compared to more traditional homebuilders adds an element of added risk to the company's credit profile. While these investments can and do generate solid returns and cash, especially during growth periods, they can also result in sizable write downs, considerable use of management time, and cash drains, as the joint venture operations did during the recent downturn. Lennar's liquidity is supported by its $642 million unrestricted cash position at August 31, 2014 (pro forma for the repayment of $250 million of senior unsecured notes early in September and the issuance herein of $350 million of senior unsecured notes), the availability of about $1.14 billion under its $1.24 billion committed senior unsecured revolving credit facility due 2018 (net of $70 million drawn and $26 million of outstanding letters of credit), and substantial headroom under its financial maintenance covenants. The revolving credit facility requires the company to maintain compliance, as of August 31, 2014, with minimum tangible net worth of $2.15 billion, maximum net debt leverage of 65.0%, and either a minimum 1.0x liquidity coverage of last 12 months interest incurred or a trailing 12 months interest coverage of 1.5x. The ratings could benefit if the company continues to generate positive and growing net income, resumes growing its free cash flow, continues to strengthen its liquidity, and, most importantly, drives its adjusted debt leverage towards the 45% level. The outlook and/or ratings could come under pressure if the economic backdrop suddenly and significantly takes a turn for the worse; the company begins generating negative net income; impairments were again to rise materially; the company were to experience even sharper-than-expected reductions in its trailing 12-month free cash flow generation; and/or adjusted debt leverage were to exceed 60% on a sustained basis. The principal methodology used in these ratings was Global Homebuilding Industry published in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Founded in 1954 and headquartered in Miami, Florida, Lennar is one of the country's largest homebuilders. The company operates in 17 states and specializes in the sale of single-family homes for first-time, move-up, and active adult buyers under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance and closing services for both buyers of the company's homes and others. Lennar's Rialto Investments segment is a vertically integrated asset management platform focused on investing throughout the commercial real estate capital structure. Lennar's Multifamily segment is a national developer of multifamily rental properties. Total revenues for the trailing 12 months ended August 31, 2014 were approximately $7.1 billion, and consolidated pretax income was $869 million. MARION ENERGY: Proposes Parsons Behle as Counsel ------------------------------------------------ Marion Energy, Inc., seeks approval from the Bankruptcy Court to employ the law firm of Parsons Behle & Latimer as its counsel, nunc pro tunc to the Oct. 31, 2014. Pursuant to the parties' engagement agreement, the Debtor will pay Parsons Behle its normal hourly rates and reimburse expenses from a retainer on a monthly basis. The current hourly rates charged by Parsons Behle for professionals and paraprofessionals employed in its offices are: Billing Category Range ---------------- ----- Partners $260 to $495 Special Counsel and Counsel $295 to $450 Associates $195 to $260 Paraprofessionals $110 to $155 The names, positions, and current hourly rates of the Parsons Behle attorneys who may provide services to the Debtor in connection with this chapter 11 case are: (a) J. Thomas Beckett (Partner-Bankruptcy), $465/hour; (b) Brian M. Rothschild (Associate-Bankruptcy), $260/hour; (c) Shane D. Hillman (Partner-Corporate), $295/hour; (d) Matthew D. Cook (Partner-Corporate / Finance), $275/hour; (e) Michael Malmquist (Partner-Environ./ Permitting), $370/hour; (f) Douglas Naftz (Associate-Environmental), $195/hour; (g) Nicole Griffin Farrell (Partner-Litigation), $265/hour; (h) Alissa M. Mellem (Associate-Litigation), $220/hour; (i) Ruth Hackford-Peer (Associate-Litigation), $195/hour; and (j) Marianne Dabel (Paralegal), $155/hour. Prior to the Petition Date, Parsons Behle received $101,738.67 advanced from the Debtor as compensation for professional services to be performed relating to the commencement and prosecution of the chapter 11 case and for the reimbursement of reasonable and necessary expenses incurred in connection therewith. Also prior to the Petition Date, the Debtor paid all amounts due and owing to Parsons Behle for prepetition services. The prepaid funds will be held as an advance payment and applied monthly to costs and fees (subject to a proposed 20% holdback) subject to periodic interim allowance by the Court. The Debtor believes that Parsons Behle is well qualified to represent the Debtor in the chapter 11 case. The firm's attorneys, specifically J. Thomas Beckett and Brian M. Rothschild, have represented parties in numerous hotly contested bankruptcy matters of significant size, including the chapter 11 cases of Utah 7000 (the Promentory Club) (UCC), Geneva Steel (UCC), Yellowstone Mountain Club (UCC), Washington Mutual, Inc. (UCC), Johns Manville (UCC), Nortel Networks, Inc. (UCC), General Growth Properties, Inc. (UCC), Tribune Co. (bondholders), Apex Oil (post- confirmation debtor), Infinia, Inc. (UCC), Rhodes Homes, Inc. (UCC), Foamex (debtor), Mrs. Fields Famous Brands / TCBY (debtor), McLean Industries (U.S. Lines) (debtor), Finley Kumble (trustee), Cresset Powers Inc. (debtor), Halsey McLean Minor (debtor). J. Thomas Beckett, shareholder of the firm, attests that Parsons Behle and each of its attorneys are "disinterested persons," as defined in 11 U.S.C. Sec. 101(14). About Marion Energy Marion Energy Inc. is a Texas corporation engaged in exploration and production of natural gas in the State of Utah. Marion's core operation is a producing gas field located in Carbon and Emery Counties, Utah (the "Clear Creek Field"). The company also holds smaller, currently unproductive acreage positions in the Helper and Roan Cliffs area near Helper, Utah (the "Helper Field"). Its parent is Australia-based Marion Energy Limited (ASX:MAE). Marion Energy Limited -- http://www.marionenergy.com.au/--is principally engaged in investment in oil and gas projects and the identification and assessment of new opportunities in the oil and gas industry in Texas, Utah and Oklahoma in the United States of America. Marion Energy Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Utah Case No. 14-31632) in Salt Lake City, Utah on Oct. 31, 2014. The Debtor estimated assets and debt of $100 million to $500 million. The Debtor has tapped Parsons Behle & Latimer as attorneys. MARION ENERGY: Has $4.2-Mil. Financing From KM Custodians --------------------------------------------------------- Marion Energy, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Utah to obtain debtor-in-possession financing of up to $4,200,000 from KM Custodians Pty Ltd. The Debtor says the DIP Loan is necessary to enable the Debtor to continue operations and to administer and preserve the value of its estate as a going concern. In general terms, the proceeds of the DIP Loan are to be used as follows: (i) to pay fees, costs and expenses of the DIP Lender, including payment of Lender's reasonable attorney's fees and other out of pocket expenses; (ii) to pay postpetition operating expenses of the Debtor incurred in the ordinary course of business; (iii) to pay costs and expenses of administration of the chapter 11 case, including payment of approved professional fees, including attorney fees; and (iv) to pay other amounts as specified in the budget. The Debtor will grant the DIP Lender a perfected first-priority security interest in all of its assets to secure the DIP Loan, and will grant the DIP Lender a superpriority administrative claim. Other salient terms of the DIP credit agreement are: * Commitment: KM Custodians agrees to make a loan to the Debtor in the maximum principal amount of $4,200,000, with advances in increments of $500,000. The sum of $700,000 will be advanced upon entry of an interim order. * Interest Rate: The Loan and each advance shall bear interest at a rate of 14 percent per annum assessed on the basis of a year of 360 days and will be payable for the actual number of days elapsed (including the first day, but excluding the last). * Repayment: The Debtor unconditionally promises to pay KM Custodians in cash the aggregate outstanding principal amount of the Loan and all accrued, but unpaid interest and fees thereon on the Termination Date. * Termination Date: "Termination Date" means the earliest to occur of: (a) 270 days after the date on which the Debtor files its Chapter 11 petition; (b) the effective date of a plan of reorganization of Borrower, (c) the date that is 35 days after the date of entry of the Interim DIP Order, in form and substance reasonably acceptable to Lender, but only if the Bankruptcy Court shall not have entered a the Final Dip Order on or before such date, and (d) the acceleration of the Loan upon the occurrence of an Event of Default. About Marion Energy Marion Energy Inc. is a Texas corporation engaged in exploration and production of natural gas in the State of Utah. Marion's core operation is a producing gas field located in Carbon and Emery Counties, Utah (the "Clear Creek Field"). The company also holds smaller, currently unproductive acreage positions in the Helper and Roan Cliffs area near Helper, Utah (the "Helper Field"). Its parent is Australia-based Marion Energy Limited (ASX:MAE). Marion Energy Limited -- http://www.marionenergy.com.au/--is principally engaged in investment in oil and gas projects and the identification and assessment of new opportunities in the oil and gas industry in Texas, Utah and Oklahoma in the United States of America. Marion Energy Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Utah Case No. 14-31632) in Salt Lake City, Utah on Oct. 31, 2014. The Debtor estimated assets and debt of $100 million to $500 million. The Debtor has tapped Parsons Behle & Latimer as attorneys. MILLER AUTO: Seeks to Resolves Dispute With FFC and Committee ------------------------------------------------------------- Miller Auto Parts & Supply Company Inc. and its debtor-affiliates together with FFC LLC dba First Capital and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the Northern District of Georgia to approve the joint motion to enter into an agreement regarding the use of cash collateral and to obtain credit pursuant to Section 4001(d) of the Bankruptcy Code. The Court will hold a hearing on Nov. 14, 2014, at 1:30 p.m., in Courtroom 1201, United States Courthouse, 75 Spring Street, S.W. in Atlanta, Georgia, to consider the motion and any objections. According to the parties, the motion seeks to resolve potential disputes and controversies including, among other things, a provision in the final debtor-in-possession order that provides that "In the event the Committee successfully challenges the prepetition indebtedness or the prepetition liens in the prepetition collateral, any proceeds or payments received by First Capital and applied to the prepetition indebtedness pursuant to paragraph 4 hereof shall be subject to disgorgement to the extent such payments exceed the secured portion of First Capital's prepetion indebtedness determined by the Court." A full-text copy of the joint motion is available for free at http://is.gd/3v0quK About Miller Auto Parts Miller Auto Parts & Supply Company, Inc., and its affiliates are distributors of automotive parts and service equipment. The companies operate from the Johnson Industries Inc.'s headquarters in Atlanta, Georgia and have distribution operations in the southeast, northeast and on-line. The Southeastern distribution center is located in Norcross, Georgia and supports nine satellite centers across the state and supplies parts to key fleet customers across the country. Miller Auto Parts and its three subsidiaries sought Chapter 11 bankruptcy protection (Bankr. N.D. Ga.) on Sept. 15, 2014. The Debtors have sought joint administration under Lead Case No. 14- 68113. The cases are assigned to Judge Mary Grace Diehl. The Debtors have tapped Scroggins & Williamson as counsel and Logan & Co. as claims and noticing agent. The U.S. Trustee for Region 21 appointed three creditors of Miller Auto Parts & Supply Company Inc. to serve on the official committee of unsecured creditors. The Committee selected Kane Russell Coleman & Logan as its counsel. NATIONAL CINEMEDIA: S&P Puts 'BB-' CCR on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed all its ratings, including the 'BB-' corporate credit ratings, on Centennial, Colo.-based National CineMedia Inc. (NCM) and its operating subsidiary, National CineMedia LLC, on CreditWatch with negative implications. The CreditWatch placement is in response to the U.S. Department of Justice (DOJ) filing a suit at the U.S. District Court in New York to block NCM's acquisition of Screenvision Exhibition Inc. on the basis that the combination would create a monopoly that would cause advertisers to pay higher rates. S&P believes that the acquisition would have eased competitive pressure. "In resolving the CreditWatch placement, we will monitor the DOJ's lawsuit, its likely outcome on NCM's proposed acquisition of Screenvision, and the likely implications for NCM's business profile and credit quality," said Standard & Poor's credit analyst Jeanne Shoesmith. "In addition, we will assess the company's ability to reduce its leverage to under 4x from the low to mid-4x area." Given NCM's dividend policy, the company would have to grow EBITDA at a low- to mid-teens percent rate in 2015 to reduce leverage below 4x, which may be difficult if competitive pressure on advertising rates remains elevated. NATIONAL RESPONSE: Moody's Affirms B2 Rating on New Term Loan ------------------------------------------------------------- Moody's Investors Service affirmed the B2 rating of National Response Corp's ("NRC") upsized term loan add-on; the additional proceeds were primarily used to fund the acquisition of Emerald Alaska, LLC, an environmental, industrial, and emergency response services provider, and to reduce revolver borrowing. Moody's also affirmed NRC's B2 Corporate Family Rating and B3-PD Probability of Default Rating. The outlook remains negative to reflect Moody's uncertainty of a reversal of weaker than expected post-acquisition performance by the company's UK operations and negative cash flow in recent quarters. Ratings Rationale The company's rating is supported by Moody's expectation for the company to generate 6-8% free cash flow to adjusted debt, adjusted debt to EBITDA below 5.0x, and about 3.0x EBITDA to interest in 2015. The roughly 25% of revenue generated by stand-by oil spill fees are predictable and high margin, while revenues related to response collection activities are somewhat unpredictable (though some work is required with some regularity) and typically generate materially lower margins. Industrial cleaning work is mostly predictable and generates higher margins. These credit metrics offset the company's modest revenue scale ($230-250 million annual revenue) and aggressive acquisition-driven growth history. Competition is fairly high for most of the company's services though Moody's notes that companies NRC's scale and larger are taking share from local market competitors. The company's liquidity is adequate as the cash balance was around $8 million and the undrawn $15 million revolver join with cash from operations to cover regular obligations. The revolver is somewhat modestly sized compared to the company's revenue scale. The negative outlook reflects uncertainty of the company's ability to generate $10mm-15mm or higher annual free cash flow and for EBITDA margins to remain well over 15%. Revenue can be somewhat volatile from year to year on spill response. Demonstration of free cash flow to adjusted debt over 5% and leverage below 5.0x coupled with revenue trending over $200 million could lead to an outlook change to stable. Moody's adjusted leverage sustained over 5.0x, particularly due to another debt funded acquisition, expectation for sustained break even cash flow, or liquidity declining to $10 million could lead to lower ratings. While the company's scale limits upward rating migration, Moody's adjusted Debt/EBITDA sustained below 3.0x, EBIT/interest coverage sustained above 4.0x, and positive free cash flow to adjusted debt in the low double digits could lead to higher ratings. Ratings: Affirmed: Corporate Family Rating: B2 Probability of Detail Rating: B3-PD $15 million revolving credit facility: B2/LGD-3 $191 million term loan (including additional $35 million): B2/LGD-3 Outlook: Negative The principal methodology used in these ratings was Environmental Services and Waste Management Companies published in June 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. NRC US Holding Company, LLC ("NRC") is a global provider of environmental, industrial, and emergency response solutions for the marine transportation, oil and gas, chemical, industrial, and rail transportation industries. Pro-Forma for the latest acquisition, revenue generated in the twelve months ending September 30, 2014, was about $250 million. NCL CORP: Moody's Rates Proposed $680MM Sr. Unsecured Notes B2 -------------------------------------------------------------- Moody's Investors Service rated NCL Corporation Limited's (dba Norwegian Cruise Line) proposed $680 million senior unsecured notes due 2019 at B2. At the same time, Moody's affirmed Norwegian's Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and SGL-2 Speculative Grade Liquidity Rating. The rating outlook remains stable. The proposed $680 million senior unsecured notes along with the proposed $350 million term loan B and $700 million increase in the size of Norwegian's existing term loan A, and an equity issuance of 20.3 million shares will be used to finance the $3.025 billion acquisition of Prestige Cruises International, Inc. Prestige is the parent company of Oceania Cruises Inc. and Seven Seas Cruises S. DE R.L. As a part of this transaction, Prestige's existing debt (excluding its new build ship debt) will be repaid and all the existing ratings of Oceania Cruises Inc. and Seven Seas Cruises S. DE R.L. will be withdrawn. For NCL Corporation Limited: Ratings assigned subject to receipt and review of final documentation: Proposed $680 million senior unsecured notes due 2019 at B2, LGD 6 Ratings affirmed: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3-PD Speculative Grade Liquidity Rating at SGL-2 $625 million revolving credit facility due 2018 at Ba2, LGD 3 Upsized $1.4 billion term loan A (originally $675 million) due 2018 at Ba2, LGD 3 Proposed $350 million term loan B at Ba2, LGD 3 $300 million senior unsecured notes due 2018 at B2, LGD 6 Ratings Rationale The affirmation of Norwegian's Ba3 Corporate Family Rating reflects Moody's positive view of the Prestige acquisition given the combined company's larger scale, greater operating leverage, and increased diversification into the premium and luxury segments of the cruise industry. Although Norwegian will remain the third largest cruise company, its net revenues will increase about 39% to about $3 billion pro forma for the acquisition and the number of its ships will grow from 13 to 21. Norwegian's well known brand name -- Norwegian Cruise Line -- and the young age of its cruise ship fleet, enables the company to effectively compete against its larger rivals, Carnival Corp (Baa1, stable) and Royal Caribbean (Ba1, stable) . In addition, the acquisition of Prestige will reduce Norwegian's reliance on the heavily saturated Caribbean market from around 49% to about 43% going forward. Pro forma for the acquisition, Moody's estimates that Norwegian's debt to EBITDA is high at 5.8 times and EBIT to interest expense is 2.9 times for the twelve months ended June 30, 2014. The ratings considers Moody's view that Norwegian is committed to reducing debt to EBITDA post acquisition. Moody's expects Norwegian's debt to EBITDA to quickly improve driven by earnings growth in the 12 to eighteen months following the acquisition. The rating also considers the current promotional pricing environment of the cruise industry as well as rising industry-wide capacity that could dampen the pace of cruise price improvement. However, the ratings incorporate Moody's favorable medium term growth outlook for global leisure travel and the likelihood the cruise industry will capture its share of this growth. The stable outlook acknowledges Moody's view that Norwegian's is committed to reducing debt to EBITDA after the acquisition. The stable outlook reflects that Moody's expect Norwegian's earnings will grow such that debt to EBITDA will fall below 5.25 times by December 31, 2015. Ratings could be upgraded should Norwegian sustain debt to EBITDA below 4.5 times and EBIT to interest expense above 3.0 times so long as the outlook for the cruise industry is stable. A ratings upgrade would also require a financial policy that supports credit metrics remaining at these levels. Ratings could be downgraded should Norwegian operating performance weaken or its financial policy change such that it is unlikely it will reduce debt to EBITDA to below 5.25 times within eighteen months of closing the Prestige acquisition or should EBIT to interest expense decline below 2.0 times. The principal methodology used in these ratings was Global Lodging & Cruise Industry Rating Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. OWENS CORNING: Moody's Assigns Ba1 Rating on New $300MM Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Owens Corning's proposed $300 million senior unsecured notes due 2024. The proceeds from the proposed notes will be used to redeem approximately $150 million of the company's $400 million senior unsecured notes due 2016 and up to $105 million of the $250 million senior unsecured notes due 2019. Remaining proceeds will be used for tender/make whole premium, and related fees and expenses. The lower amount of remaining notes reduces refunding risks when they come due. In related rating actions, Moody's affirmed the company's Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating. The rating outlook is stable. The following ratings/assessments are affected by this action: Corporate Family Rating affirmed at Ba1; Probability of Default Rating affirmed at Ba1-PD; Senior unsecured notes affirmed at Ba1 (LGD 4); Senior unsecured shelf affirmed at (P)Ba1; Proposed senior unsecured notes assigned Ba1 (LGD 4); Speculative grade liquidity rating of SGL-2 is affirmed. Ratings Rationale Owens Corning's Ba1 Corporate Family Rating remains appropriate at this time due to the company's business profile characterized by scale and product diversity. All businesses are earnings contributors. The insulation business is experiencing the greatest increase in earnings with the rise in new home construction, the primary driver of its revenues. With the prospect of improving domestic end markets and better operating performance, key debt credit metrics will become more supportive of the current rating near the end of Moody's time horizon. Nevertheless, Owens Corning's good liquidity profile characterized by its ability to generate meaningful levels of free cash flow throughout the year provides some counterbalance to its leveraged capital structure and the financial flexibility to contend with the sluggish European economy while pursuing growth initiatives. Despite the credit strengths key debt metrics are currently weak for the current ratings. Owens Corning is adding approximately $40 million of debt to its balance sheet, which is negligible relative to company's current adjusted debt position of about $3.0 billion (inclusive of Moody's adjustments for pension and lease liabilities) at September 30, 2014. Hence, debt leverage will remain around 4.0x as of September 30, 2014. Likewise, cash interest savings of about $6 million on an annualized basis will not have a material impact on interest coverage, measured as EBITA-to-interest expense, which is 2.7x for the 12 months through 3Q14 (all ratios incorporate Moody's standard adjustments). While the proposed transaction does lower refunding risks for Owens Corning, Moody's views the proposed transaction as aggressive. Owens Corning will pay a sizeable debt-financed redemption premium for the notes in addition for related fees and expenses relative to the expected reduction of future cash interest payments, representing a payback period of approximately 7 years. The assignment of a Ba1 to Owen Corning's proposed $300 million senior unsecured notes due 2024 results from the notes ranking pari passu with the company's other rated unsecured notes (and the unrated revolving credit facility) in a recovery scenario. The revolver and unsecured notes have identical guarantees, ranking in the right of payments, and other terms and conditions. The Ba1 rating assigned to the unsecured notes is the same rating as the corporate family rating. The unsecured notes are the preponderance of debt in Owens Corning's capital structure. The stable rating outlook incorporates Moody's view that Owens Corning's better operating performance and good liquidity provide some offset to its leveraged capital structure. Also, Owens Corning's ability to generate meaningful levels of free cash flow throughout the year and revolving credit availability provide some counterbalance to leveraged capital structure and the financial flexibility to contend with the sluggish European economy while pursuing growth initiatives. A rating upgrade is possible once Owens Corning is able to generate significant earnings in each of its business segments. Over time, EBITA-to-interest expense approaching 4.5x, and debt- to-EBITDA sustained below 3.0x (all ratios incorporate Moody's standard adjustments) would suggest potential for upwards ratings movement. Higher levels of cash on hand and reduced borrowings under the revolving credit facility could result in an improvement in the company's speculative grade liquidity assessment. Negative rating actions could occur if Owens Corning's operating performance falls below Moody's expectations or if the company experiences a weakening in financial performance due to a decline in demand for its products. EBITA-to-interest expense remaining below 3.0x, debt-to-EBITDA above 4.0x (all ratios incorporate Moody's standard adjustments), or deterioration in the liquidity profile could pressure the ratings. Large debt-financed acquisitions or higher levels of share repurchases could stress the ratings as well. Owens Corning is a global producer of composites and building materials systems. Products range from glass fiber used to reinforce composite materials used in transportation, electronics, marine, wind energy and other high-performance markets to insulation and roofing used in residential, commercial and industrial applications. Revenues for the 12 months through September 30, 2014 totaled approximately $5.3 billion. The principal methodology used in these ratings 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. P2 UPSTREAM: S&P Affirms 'B' CCR & Revises Outlook to Stable ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on P2 Upstream Acquisition Co., and revised the outlook to stable from negative. S&P also affirmed the issue- level ratings on the company's debt and left the recovery ratings unchanged. "The outlook revision reflects P2's ongoing reduction in leverage since private equity sponsor Advent International acquired it in October 2013," said Standard & Poor's credit analyst Jacob Schlanger. "However, while continued revenue and EBITDA growth should enable further reductions, we still expect leverage to remain high--above 6x--through 2017." The ratings on P2 reflect its modest position in a narrow segment of the global oil and gas (O&G) exploration and production (E&P) software industry, competing with numerous companies, including several much larger and long-established players in selected domains and verticals. These factors support S&P's business risk assessment of "weak." However, P2's suite of products, which provides opportunities for cross-selling as well as the addition of new customers in North America and abroad, partly offsets this weakness. Furthermore, its June 2013 acquisition of ISS Group Limited should facilitate geographic expansion in Asia-Pacific markets and enable operating efficiencies by combining P2's business software with ISS' production operations systems, as well as well as letting them serve mining and mineral companies. The company provides products that address land management/ geological, finance/accounting, production reporting/operations, and environmental/health/safety needs of major O&G companies as well as independent, midsize, and national companies in the U.S., Canada, and abroad. S&P views industry risk as "intermediate," in line with its criteria for software and service companies in the technology industry, and country risk as "very low," with 90% of revenues coming from North America. PARQ HOLDINGS: Moody's Assigns B3 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned ratings to Parq Holdings Limited Partnership, consisting of a B3 corporate family rating (CFR), B3-PD probability of default rating, Ba3 ratings to the company's proposed first lien term loans, and a Caa1 rating to its proposed second lien notes. The ratings outlook is stable. This is the first time Moody's has assigned ratings to Parq. Parq, owned by Paragon Gaming, Dundee Corporation and PBC Group, is raising funds to develop a casino and hotel resort in downtown Vancouver, British Columbia. Construction is expected to begin in Q4/2014 and the property is expected to open in Q4/2016. EllisDon Corporation and Tishman Construction Corporation will be the general contractors and the hotel will be managed by Marriott Hotels. Parq's owners hold the operating license on the Edgewater Casino in downtown Vancouver. Edgewater's license will be transferred to Parq upon opening. Proceeds from the new term loans, notes and a Holdco PIK loan (C$498 million in total), together with equity contribution from Parq's owners (C$91 million), Facility Development Commissions, Marriott key money and Edgewater Casino cash flows (C$72 million in aggregate) will be used to fund construction costs (C$480 million), interest reserve (C$100 million), contingency, financing and closing costs (C$52 million) and repay Edgewater's existing debt (C$29 million). Ratings Assigned: Corporate Family Rating, B3 Probability of Default Rating, B3-PD US$130 million (C$146 million) first lien term loan due 2020, Ba3 US$45 million (C$50 million) first lien delayed draw term loan due 2020, Ba3 US$200 million (C$224 million) second lien notes due 2021, Caa1 Outlook: Assigned as Stable Ratings Rationale Parq's B3 CFR primarily reflects risks related to the single location, competition from rated peers, saturation of gaming facilities in Vancouver, the potential for delays and cost over- runs, and high pro forma leverage. These factors are mitigated by the fixed price contract and adequate funding to complete the project, attractive location, growing tourism in Vancouver, and Marriott's brand strength. Leverage (adjusted Debt/EBITDA) after the first year of operation will be around 8x but is expected to fall towards 6.5x within 12 to 18 months thereafter. While Parq has no external revolving credit facility, Moody's considers liquidity to be adequate to fund the project given the fixed price nature of the contract including guarantees from the contractors, existence of the funded contingency, limited completion guarantees from its owners, and access to Edgewater's free cash flow from Q2-2014 through Q4-2016. The outlook is stable and is based on Moody's expectation that the project will be completed on time and on budget, and will allow free cash flow to be generated for debt repayment in order to reduce leverage to a level more supportive of the B3 CFR. The rating will not be upgraded during the construction phase. Once the project is completed and operating, upward rating consideration will require leverage to be sustained below 5x and EBIT/Interest above 2x. The rating will be downgraded if Parq faces liquidity challenges, possible due to significant construction delays or cost overruns. Also, the rating will be downgraded if leverage is sustained towards 8x when the facility is fully operational. The principal methodology used in these ratings was Global Gaming Industry published in June 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. Parq Holdings Limited Partnership plans to develop a casino in Vancouver, British Columbia, adjacent to BC Place, that will have 600 slot machines and 75 table games, and two Marriott branded hotels that will have a total of 517 rooms. Parq is owned 36%, 36% and 28% respectively by Paragon Gaming, Dundee Corporation and PBC Group. RECYCLE SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Recycle Solutions, Inc. 1054 Kansas Street Memphis, TN 38106 Case No.: 14-31338 Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Hon. George W. Emerson Jr. Debtor's Counsel: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 2700 One Commerce Square Memphis, TN 38103 Tel: (901) 525-1455 Fax: (901) 526-4084 Email: snd@harrisshelton.com Total Assets: $11.54 million Total Liabilities: $6.39 million The petition was signed by James Downing, president. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ---------------- ------------ American Express Company Expenses $82,168 Arkansas Dept of Civil Penalty $300,000 Envriomental Quality 5301 Northshore Drive North Little Rock, AR 72118 Asics $41,530 Bluff City Commodity $28,120 Bryce Corporation $98,911 City of Memphis $37,351 Dedicated Logistical $60,915 Deere & Company Leases $45,097 Duval Semi Trailers $26,499 Farris Bobango Branan PLC $75,105 First Capital Equipment Three Trailers $144,197 First Industrial Realty Trust $46,737 Frito Lay, Inc. $36,036 Glankler Brown, PLLC $46,220 GM Logistics $37,285 Grange Indemnity $47,373 Phillips Lytle $85,075 Shelby County Trustee $50,108 Unified Waste Systems $34,244 Wells Fargo Lease $107,421 REICHHOLD HOLDINGS: Panel Balks at CDG Group's Professional Fee --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Reichhold Holdings US Inc. and its debtor-affiliates objected to the Debtors' request to employ CDG Group LLC to serve as the financial advisor and investment banker to the Debtors. The Committee specifically objects to the multi-level fee structure that the firm would be entitled to receive in the event that nothing more than the current proposed transaction is consummated. Under the terms of its proposed engagement agreement, the firm is entitled to three fees: i) a sale transaction fee calculated as 1.75% of the first $100 million of aggregate Consideration and 2.25% of the aggregate consideration in excess of $100 million paid in connection with the sale; ii) a restructuring fee of $750,000; and iii) a monthly fee of $175,000 per month. According to the Committee the application states that the firm will credit 100% of the initial monthly fee received toward the restructuring fee. Importantly, the firm is only crediting a single monthly fee against the restructuring fee, the Committee added. The Committee pointed out the restructuring fee proposal is duplicative of the sale transaction fee and not necessary or reasonable given the facts and circumstances of these cases as currently before the Court and the parties. The current restructuring fee proposal is particularly problematic in these cases because the proposed DIP and the sale and stalking horse bid contemplated in the DIP are intricately intertwined, and the Committee believes that approval of the DIP will likely render the proposed sale to the junior DIP lender a fait accompli, the Committee noted. According to the Committee, the restructuring fee is, in effect, a bonus on top of the sale transaction fee and the monthly fee that the firm would otherwise be entitled to receive. The Committee retained as counsel: Bonnie Glantz Fatell, Esq. Josef W. Mintz, Esq. BLANK ROME LLP 1201 N. Market Street Wilmington, DE 19801 Tel: (302) 425-6400 Fax: (302)-425-6464 Email: Fatell@BlankRome.com Mintz@BlankRome.com - and - Mark S. Indelicato, Esq. Mark T. Power, Esq. Janine Figueiredo, Esq. HAHN & HESSEN LLP 488 Madison Avenue New York, New York 10022 Tel: (212) 478-7200 Fax: (212) 478-7400 Email: mindelicato@hahnhessen.com mpower@hahnhessen.com jfigueiredo@hahnhessen.com About Reichhold Founded in 1927, Reichhold, with its world headquarters and technology center in Durham, North Carolina, USA, is one of the world's largest manufacturer of unsaturated polyester resins and a leading supplier of coating resins for the industrial, transportation, building and construction, marine, consumer and graphic arts markets. Reichhold -- http://www.Reichhold.com/-- has manufacturing operations throughout North America, Latin America, the Middle East, Europe and Asia. As of June 30, 2014, the Reichhold companies had consolidated assets of $538 million and liabilities of $631 million. In 2013, the companies generated $1.08 billion in net revenue, and as of the year-to-date August 2014, $750 million in net revenues. Reichhold Holdings US, Inc., Reichhold, Inc., and two U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-12237) on Sept. 30, 2014. The Reichhold Companies are pursuing a sale transaction that has two elements: (i) a consensual foreclosure by the holders of senior secured notes on their security interests in the common and preferred stock in Reichhold Holdings Luxembourg, S.a.r.l. ("RHL"), the ultimate holding company of all of the non-debtor affiliates that operate outside the U.S., and (ii) a purchase of certain assets of the Debtors by Reichhold Holdings International B.V. through a credit bid pursuant to Section 363 of the Bankruptcy Code. Cole, Schotz, Meisel, Forman & Leonard, P.A. (legal advisor) and CDG Group LLC (financial advisor) are representing Reichhold, Inc. Latham & Watkins LLP (legal advisor) and Moelis & Company (investment banker) are serving Reichhold Industries, Inc. Logan & Company is the company's claims and noticing agent. The cases are assigned to Judge Mary F. Walrath. The U.S. Trustee for Region 3 appointed seven creditors of Reichhold Holdings US, Inc. to serve on the official committee of unsecured creditors. SAMUEL WYLY: NY Judge Grants SEC's Bid for Temporary Asset Freeze ----------------------------------------------------------------- District Judge Shira A. Scheindlin granted the request of the Securities and Exchange Commission for a temporary asset freeze, financial discovery, and an accounting of Samuel Wyly's and the Estate of Charles Wyly's assets to preserve the SEC's ability to enforce a final judgment. This request was opposed by the Wylys, as well as eleven family members whose assets were implicated by the request. On October 19, while this application was pending, Sam Wyly filed a voluntary Chapter 11 petition in bankruptcy court in the Northern District of Texas. On October 23, Caroline D. Wyly, the widow of Charles Wyly and the primary beneficiary of the Charles Wyly probate estate, also filed a voluntary Chapter 11 petition. Bankruptcy counsel for Sam Wyly and Caroline Wyly contend that the Chapter 11 filing automatically stays the SEC's proposed asset freeze as to the properties of the bankruptcy estate. The SEC argues that the bankruptcy filing has no impact on the SEC's request. Finally, counsel for the Family Members join the Wylys' arguments and further argue that the proposed asset freeze is too broad in scope. "I conclude that expedited discovery, preservation of financial documents, and an accounting are necessary to enable the SEC to ascertain the full extent of the Wylys' assets and determine which of these assets would be subject to disgorgement," Judge Scheindlin said. Judge Scheindlin also held that the Family Members likely have no legitimate claim to the assets to be frozen. "Again, the only assets encompassed by the temporary asset freeze are those that have been funded, in whole or in part, by the IOM trusts or assets that came directly from the Wylys during the course of the litigation and the SEC investigation. . . . the IOM trusts made distributions to the Family Members. To the extent that those assets and distributions are now in the possession of the Family Members and possibly commingled with other assets, I conclude that these commingled assets have been 'inextricably intertwined' with the profits traceable to the Wylys' violations of the securities laws. As such, the Family Members may be enjoined from disposing of these assets to ensure that they will be available upon entry of a final judgment," the judge said. The case is, Securities and Exchange COMMISSION, Plaintiff, v. SAMUEL WYLY, and DONALD R. MILLER, JR., in his Capacity as the Independent Executor of the Will and Estate of Charles J. Wyly, Jr., Defendants, and CHERYL WYLY, EVAN ACTON WYLY, LAURIE WYLY MATTHEWS, DAVID MATTHEWS, LISA WYLY, JOHN GRAHAM, KELLY WYLY O'DONOVAN, ANDREW WYLY, CHRISTIANA WYLY, CAROLINE D. WYLY, MARTHA WYLY MILLER, DONALD R. MILLER, JR., in his individual capacity, CHARLES J. WYLY III, EMILY WYLY LINDSEY, JENNIFER WYLY LINCOLN, JAMES W. LINCOLN, and PERSONS, TRUSTS, LIMITED PARTNERSHIPS, AND OTHER ENTITIES KNOWN AND UNKNOWN, Relief Defendants, No. 10-CV- 5760 (SAS)(S.D.N.Y.). A copy of the Court's November 3, 2014 Opinion and Order is available at http://is.gd/rAjJaJfrom Leagle.com. Jennifer Lincoln is represented in the matter by: Kostas D. Katsiris, Esq. VENABLE LLP Rockefeller Center 1270 Avenue of the Americas Twenty-Fourth Floor New York, NY 10020 Tel: 212-370-6272 Fax: 212-307-5598 E-mail: kdkatsiris@Venable.com About Samuel E. Wyly Samuel E. Wyly filed for Chapter 11 bankruptcy protection on Oct. 19 in Dallas, Texas, weeks after a U.S. district judge in New York ordered him to pay almost $200 million in a civil fraud case. The case is In re Samuel E. Wyly, 14-35043, U.S. Bankruptcy Court, Northern District of Texas (Dallas). ST. JOHN'S RIVERSIDE: S&P Revises Outlook on 'B+' Rating to Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revised the outlook on its 'B+' rating on Yonkers Industrial Development Agency, N.Y.'s revenue debt, issued for St. John's Riverside Hospital (SJRH), to stable from positive. The outlook revision reflects Standard & Poor's opinion of the hospital's weak operating performance through the first half of fiscal 2014, ended June 30, with SJRH reporting a $2.4 million operating loss and a decrease in unrestricted reserves. The rating service also affirmed its 'B+' rating on the debt. "We could lower the rating based on sustained operational pressure with consistent negative earnings and debt service coverage below 1.5x. We could also lower the rating if liquidity were to decrease from current levels," said Standard & Poor's credit analyst Margaret McNamara. "We could raise the rating if the system were to experience significant improvement in unrestricted reserves with days' cash on hand exceeding 50 days', coupled with management's ability to return operations to levels we consider more consistent with fiscal 2013 performance." Standard & Poor's understands management partially attributes the weaker performance to the inclement weather during the first- quarter of the year, the softer-than-expected volume, and the reimbursement pressure from Federal and state levels. While Standard & Poor's understands management has initiated several cost-reduction measures, several financial metrics did not meet the rating service's expectations. Standard & Poor's, however, believes the hospital has made good progress over the past several fiscal years toward improving its financial profile after a long period of financial distress. A gross receipt pledge of St. John's and a mortgage on the facility secure the bonds. STANDARD PACIFIC: Moody's Rates Proposed $300MM Unsecured Notes --------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family Rating of Standard Pacific Corp. at B1 and the Probability of Default Rating at B1-PD. Concurrently, Moody's assigned a B1 rating to the company's proposed $300 million senior unsecured notes and affirmed the existing unsecured notes at B1. The Speculative-Grade Liquidity ("SGL") assessment was affirmed at SGL-2. The rating outlook is stable. The proceeds from the proposed note offering are expected to be used toward general corporate purposes which will include land purchases. The following rating actions were taken: Proposed $300 million senior unsecured notes due 2024, assigned B1 (LGD4); Corporate Family Rating, affirmed at B1; Probability of Default Rating, affirmed at B1-PD; Senior unsecured notes, affirmed at B1 (LGD4); Senior unsecured and senior subordinated shelf ratings, affirmed at (P)B1/(P)B3; Speculative-Grade Liquidity Rating, affirmed at SGL-2. All of Standard Pacific's debt is guaranteed by its principal operating subsidiaries. Ratings Rationale The B1 Corporate Family Rating reflects a continued improvement in Standard Pacific's credit metrics. Moody's projects that by the end of 2015 homebuilding debt/homebuilding book capitalization will be below 50% and Homebuilding EBIT/ (Interest Expense + Capitalized Interest) will be above 4x. Both of the metrics are strong for the rating category. Additionally, the rating is supported by Standard Pacific's market position as exemplified by its attractive product portfolio and buyer profile (move- up/luxury). Partly because of its market position and product portfolio, Standard Pacific's returns are driven more by home price appreciation than on volume increase. The company's average sales price is well over $450,000 whereas the average for all the rated builders is below $390,000. In particular, in California, where the company derives a significant amount of its earnings, ASP is slightly above $600,000 but home prices can reach over $1.4 million. In addition, the rating takes into account Standard Pacific's gross margins, which are among the best in the industry, and the company's good liquidity profile. At the same time, the rating is constrained by the expectation of negative cash flow from operations, as Standard Pacific continues to invest in land. The rating is also constrained by the company's limited geographic diversification as California and Florida make up a large majority of the company's sales. However, recently, the exposure to these two states has declined to some extent as the company continues to expand throughout the United States. The stable ratings outlook considers the expected improvement in Standard Pacific's credit metrics as the recovery in the homebuilding industry continues to take place. The ratings could improve if the company were to maintain its profitability and solid liquidity, grow its tangible equity base, and reduce and maintain debt leverage below 50%. The ratings could be downgraded if adjusted homebuilding debt-to- capitalization increases and is projected to be maintained above 55%. Deterioration in liquidity including a significant decline in its cash reserves caused by operating losses or sizeable investment could also pressure the ratings. Additionally, debt financed dividend payments could lead to a ratings downgrade. Headquartered in Irvine, California and begun in 1965, Standard Pacific Corp. constructs and sells single-family attached and detached homes focusing on the move-up market. The company has homebuilding operations in California, Texas, Arizona, Colorado, Florida, North Carolina, and South Carolina. The company's revenues for the last twelve months ended September 30, 2014 were $2.26 billion. The principal methodology used in this rating was the Global Homebuilding Industry published in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. STOCKTON, CA: CalPERS a Big Winner in City's Bankruptcy ------------------------------------------------------- Michael Aneiro, writing for The Wall Street Journal, reported that Moody's Investor Service released a report calling U.S. Bankruptcy Judge Christopher Klein's decision in Stockton, California's Chapter 9 case "credit-positive" for the California Public Employees Retirement System (CalPERS) "because it likely sets a precedent that pensions will enjoy better treatment than debt in California Chapter 9 cases." According to the Journal, Moody's says any pension cuts in Stockton "would not have materially impacted CalPERS' financial health because Stockton would have been obligated to pay a substantial termination fee, although such a move "would have stood as the first pension impairment in a California Chapter 9 bankruptcy and established a new landmark precedent." About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. * * * The Troubled Company Reporter, on Sep. 26, 2014, reported that Moody's Investors Service has affirmed the long-term ratings of the city of Stockton's (CA) water and sewer enterprises' debts at Ba1. Moody's have also changed the outlook on the city's water bond rating to developing from stable, while the developing outlook on the sewer system's rating remains the same. TODD HERTZBERG: Court Tosses Suit by Trustee in Wife's Ch.7 Case ---------------------------------------------------------------- Todd Hertzberg and his former wife, Susan M. Hertzberg, are debtors in separate bankruptcy proceedings. Todd is a debtor-in- possession in his Chapter 11 reorganization case (Bankr. W.D. Pa. 13-23753-JAD) commenced on September 3, 2013. Susan filed her Chapter 7 liquidation case (Bankr. W.D. Pa. Case No. 12-20888-GLT) 19 months earlier, on February 27, 2012. Rosemary C. Crawford, the Chapter 7 Trustee, on behalf of Mrs. Hertzberg's estate, sued Mr. Hertzberg to seek turnover of $145,000 in retirement funds in Todd's possession, custody and control. As of his petition date, Mr. Hertzberg had $626,000 of Retirement Funds in his possession, custody and control. The adversary proceeding concerns only $145,000 of such funds. Mr. Hertzberg seeks dismissal of the Complaint, contending that ownership of the $145,000 of Retirement Funds has always been vested in Mr. Hertzberg, and not Mrs. Hertzberg. As such, Mr. Hertzberg contends that the $145,000 of Retirement Funds never constituted property of the bankruptcy estate of Mrs. Hertzberg, and that the chapter 7 trustee fails to plead a cause of action for turnover pursuant to 11 U.S.C. Sections 541 and 542. The defendant also seeks to dismiss the Complaint because the Complaint fails to identify any pre-bankruptcy "transfer" of the Retirement Funds at issue. Absent an allegation of a "transfer" of property, the Motion to Dismiss contends that the chapter 7 trustee fails to state a claim under the Bankruptcy Code's fraudulent transfer provisions found at 11 U.S.C. Sections 548 and 550 and state law fraudulent transfer statutes found at 12 Pa.C.S. Sections 5101-5110 et seq. The defendant further seeks dismissal of this adversary proceeding, contending that the claims of the chapter 7 trustee are stayed by the statutory injunction found in the Bankruptcy Code's automatic stay provisions of 11 U.S.C. Sec. 362(a). Alternatively, the debtor-in-possession in this case seeks to compel the chapter 7 trustee of the bankruptcy estate of Mrs. Hertzberg file a more specific pleading. On August 11, 2014, the Court heard oral argument on the Motion to Dismiss. Thereafter, the parties filed supplemental briefs along with various documents attached to them on September 18 and 22, 2014. In a November 4, 2014 Memorandum Opinion available at http://is.gd/JiknmHfrom Leagle.com, Bankruptcy Judge Jeffery A. Deller ourt concludes that (a) the chapter 7 trustee has stated a claim for turnover of $145,000 of the Retirement Funds, and (b) the chapter 7 trustee has not stated a claim for relief as to causes of action sounding in fraudulent transfer (whether under the Bankruptcy Code or applicable state law). As a result, the debtor-in-possession's Motion to Dismiss shall be denied as to the chapter 7 trustee's cause of action for turnover pursuant to 11 U.S.C. Sections 541 and 542. The debtor-in-possession's Motion to Dismiss, however, shall be granted (without prejudice to the chapter 7 trustee's ability to re-plead) with respect to the plaintiff's fraudulent transfer causes of action. In addition, the automatic stay is annulled for purposes of the commencement, litigation, trial, and appeal (if any) of this adversary proceeding. TRANSFIRST INC: Moody's Lowers Rating on New 1st Lien Debt to B2 ---------------------------------------------------------------- Moody's Investors Service lowered the rating for TransFirst, Inc.'s proposed first lien credit facilities to B2, from B1, and affirmed all other existing ratings, including the B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating, and the Caa2 ratings for the company's second lien credit facilities. The downgrade of TransFirst's first lien debt rating reflects changes in the company's proposed financing structure in connection with its acquisition by funds affiliated with Vista Equity Partners. The ratings have a stable outlook. Ratings Rationale TransFirst's revised capital structure contemplates an increase in the first lien credit facilities by $35 million to $700 million and a reduction in the second lien term loan by $15 million to $320 million relative to the initially proposed recapitalization plan. The new financial sponsor will now contribute $20 million less equity under the revised recapitalization plan. In accordance with its Loss Given Default methodology, Moody's lowered TransFirst's first lien debt ratings to B2 from B1, to reflect a lower proportion of junior debt cushion represented by the second lien term loans in the revised capital structure. TransFirst's closing leverage will only modestly increase (by 0.2x total debt to EBITDA) as a result of an increase in total funded debt by $20 million in the new capital structure. The B3 CFR reflects TransFirst's elevated financial risk profile, including high leverage and limited free cash flow relative to increased levels of debt, and high financial risk tolerance under financial sponsors. TransFirst's total debt to EBITDA at the close of the acquisition is expected to be 7.6x (Moody's adjusted), including incremental EBITDA that the company expects to realize over the next 12 months by migrating American Express card processing volumes from its existing customers onto its platform under the American Express OptBlue program for small merchants. Although Moody's expects TransFirst's EBITDA to grow in the high single digit percentages, periodic debt-financed returns to shareholders and opportunistic acquisitions could cause leverage to remain in the 6x to 7x range over an extended period. The rating additionally incorporates TransFirst's high business risks from its small operating scale, especially relative to its competitors, and the highly competitive merchant acquiring services industry. The rating is supported by TransFirst's strong track record of strong net revenue and EBITDA growth driven by addition of new merchant accounts from third party sales channels, low volume attrition rates, and high operating leverage through its scalable transaction processing platform. The company generates highly recurring revenues and Moody's expects free cash flow (before potential merchant portfolio acquisitions) to exceed $40 million over the next 12 months. The stable outlook reflects Moody's expectation for steady net revenue growth and free cash flow over the next 12 to 18 months. Moody's expects the company to maintain good liquidity comprising predictable free cash flow and availability under the revolving credit facility. TransFirst's ratings could be upgraded if the company maintains good earnings growth and if Moody's believes that the company will maintain free cash flow in the high single digit percentages of total debt and total debt-to-EBITDA below 6.5x. Conversely, the ratings could be downgraded if Moody's believes that deteriorating operating performance or aggressive financial policies will cause total leverage to be sustained above 7.5x (Moody's adjusted), free cash flow weakens or liquidity deteriorates. Moody's has taken the following ratings actions: Affirmations: Issuer: TransFirst, Inc Corporate Family Rating -- B3 Probability of Default Rating -- B3-PD $320 million Senior Secured 2nd Lien Term Loan, due 2022 -- Caa2 (LGD5) Outlook is Stable The following ratings were downgraded: $50 million Senior Secured 1st lien Revolving Credit Facility, due 2019 --B2, (LGD3), from B1, (LGD3) $700 million Senior Secured 1st Lien Term Loan, due 2021 -- B2, (LGD3), from B1, (LGD3) TransFirst Holdings, Inc. is a merchant acquirer and provides payment processing services to small and medium size businesses in the U.S. TransFirst reported net revenues of approximately $245 million in the twelve months ended June 30, 2014. The principal methodology used in these ratings was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TASC INC: S&P Puts 'B+' Secured Debt Rating on Watch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' issue-level rating on Chantilly, Va.-based government contractor TASC Inc.'s first-lien senior secured credit facility, which consists of a $50 million revolving credit facility due 2019 and $393 million first- lien term loan due 2020, and its 'CCC+' issue-level rating on the company's $250 million second-lien term loan due 2021 on CreditWatch with positive implications. The recovery rating on the first-lien debt remains '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. The recovery rating on the second-lien debt remains '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. The 'B' corporate credit rating and negative outlook on TASC also remain unchanged. The CreditWatch listing of TASC's first- and second-lien credit facilities follows the announcement that the company will merge with Engility Holdings Inc. (unrated) in an all-stock transaction valued at $1.1 billion, including the assumption of TASC's debt. The boards of directors of both companies approved the transaction and S&P expects it to close in the first quarter of 2015. At the close of the transaction, Engility Holdings Inc. will issue incremental debt of $585 million for the repayment of its existing credit facility and to fund a special dividend. Standard & Poor's will need to assess the credit quality of the combined entity once the transaction closes in order to resolve the CreditWatch. S&P expects to rate the combined entity 'B' or higher because of its broader services offering, more diversified customer base, and lower debt leverage, which S&P estimates at 5x or below compared with more than 6x currently for TASC on a stand- alone basis. Although the organization and debt structure are undetermined, there could be upside potential for the issue-level rating on TASC's rated first- and second-lien credit facilities based on S&P's preliminary recovery analysis. S&P expects to resolve this CreditWatch placement in the coming weeks as more detailed information becomes available regarding the collateral package and allocation of $585 million incremental debt to the company's existing first- and second-lien credit facilities. S&P will base its assessment on its view of the credit quality of the combined entity, following a review of business, financial, and growth strategies. S&P expects to withdraw its corporate credit rating on TASC once the company's sale to Engility is consummated. RATINGS LIST TASC Inc. Corporate Credit Rating B/Negative/-- Ratings Placed On CreditWatch; Recovery Ratings Unchanged TASC Inc. First-lien debt To From Senior Secured B+/Watch Pos B+ Recovery Rating 2 2 Second-lien debt CCC+/Watch Pos CCC+ Recovery Rating 6 6 THOMAS JEFFERSON: Law School Restructures Debt Obligations ---------------------------------------------------------- The Thomas Jefferson School of Law has signed a Restructuring Support Agreement with nearly 90% of its bondholders that reduces its debt by two thirds ($87 million), reduces annual cash flow obligations by half ($6 million) and ensures continued operations of the school in its state-of-the-art campus in downtown San Diego. Thomas F. Guernsey, president and dean who was recruited in July 2013 to turn around school operations, said the restructuring agreement was needed to address the $127 million in bonds that were issued in 2008 to build its new campus at 1155 Island Ave. "This restructuring is a major step toward achieving our goals," Mr. Guernsey said. "It puts the school on a solid financial footing and will enable Thomas Jefferson to continue to fulfill its mission serving a diverse group of students in a collegial, supportive learning environment." As part of the transaction, the bonds will be cancelled. In exchange, the bondholders will become owners of the building and lease it back to the school. In addition, the bondholders will also receive $40 million in new notes at an interest rate of 2 percent. Interest rates on the previous outstanding taxable bonds were over 11 percent, with non-taxable bonds at over 7 percent. The agreement cuts the school's debt by nearly $87 million, from $127 million to $40 million, and results in a significant improvement in cash flow. Previously, the school was paying about $12 million a year in principal and interest on its debt. Under the restructuring, the school will pay $5 million in annual rent and about $1 million a year in interest expense, cutting its annual payments to the bondholders by almost 50 percent to a total of $6 million. Mr. Guernsey said school operations continue unchanged under the new agreement. The bondholders have expressed confidence in the school and its future plans. "We agree with the bondholders that this restructuring is in the best interest of the bondholders and Thomas Jefferson," said Gavin Wilkinson, senior vice president of UMB Bank, the trustee for the bonds. "The restructuring significantly reduces the debt and interest burden on the school." The school began discussions on a debt restructuring in earnest in April 2014. Negotiations continued into October 2014, with the law school and the consenting bondholders entering into a Restructuring Support Agreement on Tuesday, October 28, 2014. In this restructuring transaction, Thomas Jefferson School of Law was represented by: E. Kurt Yeager, Esq. STRADLING YOCCA CARLSON & RAUTH, P.C 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660 Telephone: (949) 725-4169 E-mail: kyeager@sycr.com - and - Victor Vilaplana, Esq. FOLEY & LARDNER LLP 3579 Valley Centre Drive, Suite 300 San Diego, CA 92130 Telephone: (858) 847-6759 E-mail: vavilaplana@foley.com and the bondholders were represented by: Christopher T. Greco, Esq. KIRKLAND & ELLIS LLP 601 Lexington Ave. New York, NY 10022 Telephone: (212) 446-4734 E-mail: christopher.greco@kirkland.com - and - David Orlofsky ZOLFO COOPER Grace Building 1114 Avenue of the Americas, 41st Floor New York, NY 10036 Telephone: (212) 561-4022 E-mail: dorlofsky@zolfocooper.com "The improved financial stability enables us to continue to focus on improving results for our students in passing the bar and securing jobs in the legal profession," Mr. Guernsey said. "This includes adding new programs and improving core curriculum. By restructuring the debt and reducing the annual payments to the bondholders by almost 50 percent, the school can continue its mission to be a school of opportunity for a diverse population of students. Our long-term goal is to continue doing a better job for our students in all ways and steadily raise the reputation of the law school, the quality of the education and, the success of our graduates." About Thomas Jefferson Thomas Jefferson School of Law was founded in 1969 as the San Diego campus of the Western State University College of Law to offer part-time programs for working professionals. It soon attracted a growing number of students who wanted to attend law school full-time. The school was renamed Thomas Jefferson School of Law in 1995. Full ABA accreditation was granted in August 2001 and the law school became a private, non-profit institution the same year. The school began attracting a broader range of students from all over the United States and around the world, which led to plans for the new campus. The first classes were held in its new East Village campus in January 2011. The 305,000 square-foot, eight-story campus has won numerous awards as one of the most outstanding law school facilities in the U.S. The ultra- modern facility includes high-tech classrooms with stadium seating, a state-of-the-art moot courtroom, outdoor terraces for relaxing or studying, two floors of library seating, a student lounge and a legal clinic. TIBCO SOFTWARE: Moody's Assigns B3 Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service assigned to Balboa Merger Sub, Inc., which will be merged into TIBCO Software Inc. (TIBCO), a first- time B3 Corporate Family Rating (CFR) and a B3-PD probability of default rating. Moody's also assigned a B1 rating to TIBCO's proposed first lien credit facilities comprising a $125 million revolving credit facility, a $1.65 billion term loan facility and a $300 million 1-year asset sale bridge loan facility, and a Caa2 rating to the company's proposed $950 million of senior unsecured notes. The proceeds from new debt issuance along with $1.6 billion of equity will be used to finance the acquisition of TIBCO by funds affiliated with Vista Equity Partners for approximately $4.2 billion in an all-cash transaction, including refinancing of TIBCO's $605 million of existing debt. The ratings have a stable outlook. Ratings Rationale TIBCO's CFR is weakly positioned in the B3 rating category which primarily reflects TIBCO's weak financial profile and significant execution risk in achieving planned cost savings over the next 12 to 18 months. TIBCO's initial leverage is very high at approximately 11x total debt to LTM 3Q 2014 EBITDA (excluding $300 million of asset sale bridge facility that is expected to be refinanced from the sale leaseback of TIBCO's headquarters), though Moody's expects leverage to decline to 6x to 6.5x by FYE 2016. The projected deleveraging and free cash flow will be driven by EBITDA growth of over 50% over the next 18 months that management plans to achieve from headcount reductions and operating efficiencies in all core functions of the company. TIBCO's software sales declined in 2013 and the YTD 3Q 2014 period and its profitability has eroded from a decline in high margin software revenues and higher operating costs. Although cost reductions will drive initial deleveraging, Moody's believes that ultimately sustained earnings growth led by revenue growth of at least mid single digit percentages will be required to enhance financial flexibility. The B3 CFR incorporates TIBCO's risks in timely attainment of synergies and generating revenue growth while undertaking significant cost reduction efforts. The company faces strong competition in both core infrastructure and analytics software segments. TIBCO will operate with limited financial flexibility as debt service costs will increase substantially. The company has modest cushion for execution missteps as management plans to accelerate revenue growth from increased sales efficiencies, growth in maintenance revenues and shifting its sales model in the analytics software segment from license- to subscription-based sales. Moody's expects TIBCO's revenue growth to remain muted in the low single digit percentages over the next 12 to 18 months and its free cash flow to increase from 3% of total debt in 2015 to approximately 6% in 2016, which will essentially represent cost savings. TIBCO's credit profile is supported by its well-regarded application integration and event processing and analytics products in the enterprise software market. The company has good operating scale with over $1 billion in revenues and a large installed base of over 4,000 customers. Approximately 40% of TIBCO's revenues are derived under software maintenance and support agreements and these revenues have retention rates in excess of 90%. The company has historically generated the majority of its new license sales from its existing accounts. Moody's expects the company to refinance its $300 million asset sale bridge loan within twelve months of closing of the acquisition using the proceeds of the sale of its headquarters facility. The stable outlook is based on Moody's expectation that TIBCO will generate modest revenue growth and free cash flow of 3% of total debt in FY 2015. Moody's expects TIBCO to maintain adequate liquidity consisting of its domestic cash balances of approximately $50 million, $125 million of undrawn revolving credit facility and free cash flow. Moody's could downgrade TIBCO's ratings if liquidity weakens or free cash flow falls short of expectations as a result of weaker than expected revenues or delays in achieving planned cost savings. The ratings could be downgraded if Moody's believes that TIBCO's total debt to EBITDA will remain above 7.5x (incorporating Moody's standard analytical adjustments) and free cash flow is expected to remain negative. Conversely, Moody's could raise TIBCO's ratings if revenue growth increases to the mid single digit percentages and Moody's believes that total debt to EBITDA will be sustained below 6.5x and free cash flow will exceed 5% of total debt. Issuer: Balboa Merger Sub, Inc. Corporate Family Rating -- B3 Probability of Default Rating -- B3-PD $125 million Senior Secured 1st lien Revolving Credit Facility, due 2019 -- B1 (LGD3) $300 million Senior Secured Asset Sale Bridge Loan, due 2015 -- B1 (LGD3) $1,650 million Senior Secured 1st Lien Term Loan, due 2020 -- B1 (LGD3) $950 million Senior Unsecured Notes, due 2021 -- Caa2 (LGD5) Outlook, Stable TIBCO Software Inc. is a leading independent provider of infrastructure and business intelligence software. TIBCO reported $1.08 billion in revenues for the twelve months ended August 31, 2015. The principal methodology used in this rating was Global Software Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TOTAL MERCHANT: Moody's Assigns B2 Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service, rated Total Merchant Services, Inc.'s ("TMS") new First Lien Credit Facilities (Revolver and Term Loan, together the "Credit Facilities") and Corporate Family Rating ("CFR") at B2 and Probability of Default Rating ("PDR") of B3-PD. The rating outlook is stable. This is the first time that Moody's has assigned a rating to TMS's debt. TMS plans to use the proceeds of the Credit Facilities to repay a $15 million note payable to an entity controlled by Edward Freedman (TMS's sole shareholder) and to pay Mr. Freedman a special dividend of up to $75 million. With the payment of the dividend, TMS's ongoing management fee paid to a company controlled by Mr. Freedman will cease. TMS will, however, make annual distributions to Mr. Freedman of an amount sufficient to pay the income taxes that TMS avoids as an S corporation. Since TMS will no longer have a business relationship with any of legal entities controlled by Mr. Freedman but not consolidated into TMS's financial statements, Moody's expect that future financial statements will be issued with an unqualified audit opinion. Assignments: Issuer: Total Merchant Services, Inc. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B3-PD Senior Secured Bank Credit Facility (Local Currency), Assigned B2 (revolver) Senior Secured Bank Credit Facility (Local Currency), Assigned a range of LGD3 (revolver) Senior Secured Bank Credit Facility (Local Currency), Assigned B2 (term loan) Senior Secured Bank Credit Facility (Local Currency), Assigned a range of LGD3 (term loan) Outlook Actions: Issuer: Total Merchant Services, Inc. Outlook, Assigned Stable The B2 CFR reflects TMS's high leverage, its relatively small market share, and its exposure to smaller sized customers, which have a higher risk of attrition and chargeback liabilities. Moreover, given the concentrated ownership (single shareholder), Moody's anticipate that TMS will remain highly-leveraged, with Free Cash Flow ("FCF") to debt (Moody's adjusted, after merchant acquisition costs), which is in the low to mid single digits percent currently, varying between the mid to upper single digits percent over time due to periodic debt-funded equity distributions and small acquisitions. Nevertheless, the rating is supported by TMS's consistent FCF, which reflects the combination of a recurring transaction-based revenue stream and modest capital expenditure requirements. TMS maintains a diverse customer base with minimal customer concentration by size or vertical industry. TMS also benefits from the generally favorable long term trends for electronic payment processing industry as the secular shift from cash/check payment to electronic payments continues. The senior secured first lien credit facilities are rated B2, which equals the CFR and reflects the absence of unsecured or subordinated debt and minimal unsecured liabilities. The stable outlook reflects Moody's expectation that over the next year TMS will generate mid to upper single digit revenue growth. Moody's expect that FCF to debt (Moody's adjusted, after merchant acquisition costs) will rise into the upper single digits percent over the near term due to improving FCF and absolute debt reduction. TMS will have adequate liquidity over the next year based on Moody's expectation of FCF of $5 million to $10 million (Moody's adjusted, after merchant acquisition costs). Since FCF is highly-variable within quarters due to working capital movements, Moody's expect that TMS may periodically access the $15 million revolver in order to maintain the cash balance in excess of $20 million. Although an upgrade is unlikely over the next year, the rating could be upgraded over the intermediate term if TMS profitably expands its market share and maintains its conservative financial policy of foregoing equity distributions and aggressively reducing debt. Thus, Moody's would expect that FCF to debt (Moody's adjusted, after merchant acquisition costs) would remain at least in the low teens percent for an extended period. The rating could be downgraded if TMS were to experience a weakening competitive position, as evidenced by increased customer churn and declining margins. The rating could also be downgraded if TMS fails to reduce debt such that FCF to debt (Moody's adjusted, after merchant acquisition costs) is likely to remain below the mid single digits for an extended period. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada, and EMEA published in June 2009. Total Merchant Services, Inc. based in Woodland Hills, California, is a merchant acquirer providing credit, debit and other electronic payment processing services for merchants in United States and Canada. TMS is owned by its founder, Edward Freedman. TOTAL MERCHANT: S&P Assigns 'B' CCR & Rates $175MM Facility 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Woodland Hills, Calif.-based Total Merchant Services Inc. (TMS). The outlook is stable. At the same time, S&P assigned its 'B+' issue-level rating and '2' recovery rating to the company's proposed $175 million senior secured credit facility, consisting of a $15 million revolver and $160 million term loan. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. "The rating on TMS reflects our assessment of the company's relatively small scale and modest market position in the highly competitive and fragmented merchant payment processing industry, and our expectation for free cash flow-to-debt in the low-to-mid single-digit percentage area, pro forma for the debt-financed distribution to its sole shareholder over the next 12 months," said Standard & Poor's credit analyst Jenny Chang. The outlook is stable, reflecting S&P's expectation that despite competitive industry conditions, the company will achieve moderate revenue growth by maintaining a relatively stable merchant count and generate positive free cash flow over the coming year. An upgrade is unlikely in 2015, limited by the company's lack of scale, and S&P's expectation for modest free cash flow-to-debt and exposure to re-leveraging risk. S&P could lower the rating if merchant attrition, margin pressure, or debt-financed acquisitions or shareholder returns result in free cash flow-to-debt sustained in the low-single-digit percentage area. TRUMP ENTERTAINMENT: Judge Delays Decision On Restructuring ----------------------------------------------------------- Sara Randazzo, writing for Daily Bankruptcy Review, reported that U.S. Bankruptcy Judge Kevin Gross in Wilmington, Del., refused to sign off the disclosure statement explaining Trump Entertainment Resorts Inc.'s reorganization plan, instead pushing back the hearing on the plan outlines to next week so the casino operator can come back with a firmer version of the explanatory statement. "My concern is that there is simply too much immediate uncertainty," the DBR report cited Judge Gross as saying. "There needs to be something in place that provides comfort that there is really a path to a plan." As previously reported by The Troubled Company Reporter, Trump Entertainment amended on Nov. 3 their joint plan of reorganization to provide that first lien lenders led by Carl Icahn's Icahn Partners LP and affiliated funds will fully equitize the Debtors' existing senior secured debt and to provide (i) subject to certain conditions, $100 million in new-money exit financing in the form of a New Term Loan, or (ii) in the event the conditions are incapable of being satisfied, $15 million in new-money exit financing in the form of a New Term Loan. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to shutter its casinos. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, 2014, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. U.S. COAL: Additional Debtors' Case Summary & Creditors' Lists -------------------------------------------------------------- Affiliates of Licking River Mining, LLC (Case No. 14-10201) that filed for Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Harlan County Mining, LLC 14-52501 101 Helm Street, Suite 150 Lexington, KY 40505 Oak Hill Coal, Inc. 14-52502 101 Helm Street, Suite 150 Lexington, KY 40505 Sandlick Coal Company, LLC 14-52503 101 Helm Street, Suite 150 Lexington, KY 40505 U.S. Coal Marketing, LLC 14-52504 101 Helm Street, Suite 150 Lexington, KY 40505 Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: Amelia M. Adams, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper Street Lexington, KY 40507 Tel: (859) 231-5800 Email: aadams@dlgfirm.com - and - Laura Day DelCotto, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper St Lexington, KY 40507 Tel: (859) 231-5800 Fax: (859) 281-1179 Email: ldelcotto@dlgfirm.com Estimated Estimated Assets Liabilities ----------- ----------- Harlan County Mining $0-$50,000 $0-$50,000 Oak Hill Coal, Inc. $100K-$500K $0-$50,000 Sandlick Coal Company $1MM-$10MM $1MM-$10MM U.S. Coal Marketing $0-$50,000 $0-$50,000 The petitions weres signed by John A. Collins, CEO. A. List of Harlan County Mining's four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carl McAfee Pending Litigation Unknown Dean McAfee Holdings Pending Litigation Unknown Estate of Aubra Dean Pending Litigation Unknown Julia McAfee Pending Litigation Unknown B. List of Oak Hill Coal, Inc.'s four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ----------------- ------------ Carl McAfee Pending Litigation Unknown Dean McAfee Holdings Pending Litigation Unknown Estate of Aubra Dean Pending Litigation Unknown Julie McAfee Pending Litigation Unknown C. List of Sandlick Coal Company's seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------------ ------------ Carl McAfee Pending Litigation Unknown Dean McAfee Holdings Pending Litigation Unknown Estate of Aubra Dean Unsecured Promissory $500,000 c/o Gregory Pavey, Esq. Note 300 W. Vine Street Lexington, KY 40507 Estate of Aubra Dean Pending Litigation Unknown Julia and Carl McAfee Unsecured Promissory $500,000 P.O. Box 321 Note Norton, VA 24273 Julia McAfee Pending Litigation Unknown Smith-Manus Surety Bonding $4,453 D. List of U.S. Coal Marketing's four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ---------------- ------------ Carl McAfee Pending Litigation Unknown Dean McAfee Holdings Pending Litigation Unknown Estate of Aubra Dean Pending Litigation Unknown Julia McAfee Pending Litigation Unknown On May 22, 2014, an Involuntary Chapter 11 petition was filed against Licking River Mining, LLC. On May 23, 2014, an Involuntary Chapter 11 petition was filed against Licking River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an Involuntary Chapter 11 petition was filed against S.M. & J., Inc. On June 4, an Involuntary Chapter 11 petition was filed against J.A.D. Coal Company, Inc. On June 10, an Involuntary Chapter 11 petition was filed against U.S. Coal Corporation and subsequently, on Nov. 4, Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed petitions in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under chapter 11 of the Bankruptcy Code. The Debtors' cases have been assigned to Chief Judge Tracey N. Wise. The Debtors are seeking to have their cases jointly administered for procedural purposes, meaning that upon entry of such an order all pleadings will be maintained on the case docket for Licking River Mining, LLC, Case No. 14-10201 (the "Main Case Docket"). On June 9, 2014, the Debtors filed the Consolidated Answer to Involuntary Petitions and Consent to Entry of Order for Relief and Reservation of Rights. On June 12, 2014, the Court entered the Order for Relief, thereby converting these involuntary cases to voluntary Chapter 11 Cases. U.S. COAL: Add'l Debtors Want Jan. 2, 2015 Claims Bar Date ---------------------------------------------------------- Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, as debtors and debtors in possession -- Additional Debtors -- ask the Bankruptcy Court to enter an order establishing bar dates for filing proofs of claim in their Chapter 11 cases. Specifically, the Additional Debtors ask the Bankruptcy Court to enter an order: (a) establishing Friday, Jan. 2, 2015 at 5:00 p.m. (ET) as the general bar date by which all entities (other than governmental units as defined in 11 U.S.C. Sec. 101(27)) asserting claims against the Additional Debtors that arose or are deemed to have arisen prior to the commencement of the Additional Debtors' bankruptcy cases must file proofs of claim; (b) establishing Jan. 2, 2015 at 5:00 p.m. (ET), as the bar date by which all entities must file proofs of claim for the value of goods received by the Additional Debtors within 20 days before the commencement of the Additional Debtors' bankruptcy cases under 11 U.S.C. Sec. 503(b)(9) (the "503(b)(9) Bar Date"); (c) establishing Monday, May 4, 2015 at 5:00 p.m. (ET) (the first business day after May 3, 2015), as the bar date by which all governmental units must file proofs of claim in the Additional Debtors' bankruptcy cases (the "Government Bar Date"); (d) establishing the later of (a) the General Bar Date or the Government Bar Date, as applicable; or (b) 30 days after the entry of the rejection order, as the bar date by which entities must file proofs of claim relating to the Additional Debtors' rejection of executory contracts or unexpired leases in the Additional Debtors' bankruptcy cases (the "Rejection Bar Date"); and (e) establishing the later of: (a) the General Bar Date or the Government Bar Date, as applicable; or (b) 30 days after the date that notice of the applicable amendment or supplement to the Schedules is served on the Affected Claimholder, as the bar date by which entities must file proofs of claim as a result of any future amendment to the Additional Debtors' Schedules (the "Amended Schedule Bar Date"). About U.S. Coal and Licking River On May 22, 2014, an involuntary Chapter 11 petition was filed against Licking River Mining, LLC, before the United States Bankruptcy Court for the Eastern District of Kentucky. On May 23, 2014, an involuntary Chapter 11 petition was filed against Licking River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an involuntary Chapter 11 petition was filed against S.M. & J., Inc. On June 4, 2014, an involuntary Chapter 11 petition was filed against J.A.D. Coal Company, Inc. On June 12, 2014, the Court entered an order for relief in each of the bankruptcy cases. On June 10, 2014, an involuntary Chapter 11 petition was filed against U.S. Coal Corporation. On June 27, 2014, the Court entered an order for relief in U.S. Coal's bankruptcy case. On Nov. 4, 2014, Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed petitions in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Chief Judge Tracey N. Wise. The Debtors are seeking to have their cases jointly administered for procedural purposes, meaning that upon entry of such an order all pleadings will be maintained on the case docket for Licking River Mining, LLC, Case No. 14-10201. U.S. Coal produces and sells thermal coal purchased primarily by utilities and trading companies and specialty coal purchased by various industrial customers and trading companies (known as "stoker" coal). U.S. Coal operates through two divisions: (1) the Licking River Division that was formed through the acquisition of LR Mining, LRR, and S.M. & J., and Oak Hill Coal, Inc. in January 2007 for $33 million., and (2) the J.A.D. Division that was formed through the acquisition of JAD and Fox Knob, and Sandlick Coal Company, LLC and Harlan County Mining, LLC in April 2008 for $41 million. Both the LRR Division and the JAD Division are located in the Central Appalachia region of eastern Kentucky. The LRR Division has approximately 26.3 million tons of surface reserves under lease. The JAD Division has 24.4 million tons of surface reserves, both leased and owned real property. At present, U.S. Coal has three surface mines in operation between the LRR Division and JAD Division. The Debtors have tapped Nixon Peabody LLP and DelCotto Law Group PLLC as attorneys, and Epiq Bankruptcy Solutions LLC as claims agent. The Official Committee of Unsecured Creditors have tapped Barber Law PLLC and Foley & Lardner as attorneys. U.S. COAL: Add'l Debtors Seek Joint Administration -------------------------------------------------- Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, seek entry of an order authorizing the joint administration of their Chapter 11 cases under the lead case of Licking River Mining, LLC, Case No. 14- 10201. The bankruptcy cases of earlier filed cases of Licking River Resources, Inc., Licking River Mining, LLC, S. M. & J., Inc., J.A.D. Coal Company, Inc., Fox Knob Coal Co., Inc., and U.S. Coal Corporation are already being jointly administered under the lead case of Debtor LR Mining. The Debtors say that joint administration of their bankruptcy cases is appropriate because all the Debtors intend to file with the Court numerous pleadings and applications that they believe will affect each of the Debtors' cases equally, and joint administration will reduce the amount of duplicative pleadings and notice that will be filed and/or served. About U.S. Coal and Licking River On May 22, 2014, an involuntary Chapter 11 petition was filed against Licking River Mining, LLC, before the United States Bankruptcy Court for the Eastern District of Kentucky. On May 23, 2014, an involuntary Chapter 11 petition was filed against Licking River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an involuntary Chapter 11 petition was filed against S.M. & J., Inc. On June 4, 2014, an involuntary Chapter 11 petition was filed against J.A.D. Coal Company, Inc. On June 12, 2014, the Court entered an order for relief in each of the bankruptcy cases. On June 10, 2014, an involuntary Chapter 11 petition was filed against U.S. Coal Corporation. On June 27, 2014, the Court entered an order for relief in U.S. Coal's bankruptcy case. On Nov. 4, 2014, Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed petitions in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Chief Judge Tracey N. Wise. The Debtors are seeking to have their cases jointly administered for procedural purposes, meaning that upon entry of such an order all pleadings will be maintained on the case docket for Licking River Mining, LLC, Case No. 14-10201. U.S. Coal produces and sells thermal coal purchased primarily by utilities and trading companies and specialty coal purchased by various industrial customers and trading companies (known as "stoker" coal). U.S. Coal operates through two divisions: (1) the Licking River Division that was formed through the acquisition of LR Mining, LRR, and S.M. & J., and Oak Hill Coal, Inc. in January 2007 for $33 million., and (2) the J.A.D. Division that was formed through the acquisition of JAD and Fox Knob, and Sandlick Coal Company, LLC and Harlan County Mining, LLC in April 2008 for $41 million. Both the LRR Division and the JAD Division are located in the Central Appalachia region of eastern Kentucky. The LRR Division has approximately 26.3 million tons of surface reserves under lease. The JAD Division has 24.4 million tons of surface reserves, both leased and owned real property. At present, U.S. Coal has three surface mines in operation between the LRR Division and JAD Division. The Debtors have tapped Nixon Peabody LLP and DelCotto Law Group PLLC as attorneys, and Epiq Bankruptcy Solutions LLC as claims agent. The Official Committee of Unsecured Creditors have tapped Barber Law PLLC and Foley & Lardner as attorneys. U.S. COAL: Add'l Debtors Seek Access to Cash Collateral ------------------------------------------------------- Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC (collectively, the "Additional Debtors"), and the other jointly-administered debtors ask the Bankruptcy Court to authorize the Additional Debtors' use of cash collateral. The Bankruptcy Court in September entered a final order authorizing Licking River Resources, Inc., Licking River Mining, LLC, S. M. & J., Inc., J.A.D. Coal Company, Inc., Fox Knob Coal Co., Inc., and U.S. Coal Corporation, to use cash collateral. Dennis J. Drebsky, Esq., at Nixon Peabody LLP, explains that the Additional Debtors possess certain assets critical to the Debtors' reorganization and to the maximization of return for estate constituents. Similarly, the Additional Debtors share certain liabilities with the Debtors, and efficient administration of the estates argues in favor of the Additional Debtors' use of cash collateral under the terms of the Final Cash Collateral Order. Each of the Additional Debtors is wholly owned by U.S. Coal. All outstanding stock or other ownership interest in each of the Additional Debtors is property of U.S. Coal's estate under 11 U.S.C. Section 541. The Additional Debtors hold certain assets of significant value to the Debtors' estates. For example, Sandlick is the lawful holder of most if not all of the mining permits pursuant to which JAD and Fox Knob operate their coal mines. Sandlick exists specifically for this purpose and does not actually use the mines itself. If Sandlick loses its permits, those Debtors cannot continue their mining operations. The Additional Debtors are also jointly and severally liable for certain of the Debtors' debts. As just one example, Sandlick is listed as a co-borrower with U.S. Coal, and Oak Hill and Harlan are listed as guarantors, on a Credit Agreement dated December 7, 2011 with East Coast Miner II, LLC. The range of liabilities also potentially includes tax liabilities under the Internal Revenue Code, Commonwealth of Kentucky tax liabilities, liabilities under royalty agreements and leases, and debts to secured or unsecured creditors. Harlan County, Oak Hill, and USC Marketing are essentially defunct and are no longer generating revenue. However, because they have significant liabilities, some of which are shared with the other Debtors and will be resolved in the course of these chapter 11 cases, those entities and their assets are currently exposed to creditors outside of the protections of the Bankruptcy Code. The resolution of each of the Additional Debtors' liabilities materially affects all of the Debtors' abilities to efficiently and effectively reorganize, as each of the Additional Debtors has obligations arising under, or related to, the Debtors' prepetition secured indebtedness. Any plan of reorganization in the case will necessitate the resolution of these claims against the Additional Debtors. About U.S. Coal and Licking River On May 22, 2014, an involuntary Chapter 11 petition was filed against Licking River Mining, LLC, before the United States Bankruptcy Court for the Eastern District of Kentucky. On May 23, 2014, an involuntary Chapter 11 petition was filed against Licking River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an involuntary Chapter 11 petition was filed against S.M. & J., Inc. On June 4, 2014, an involuntary Chapter 11 petition was filed against J.A.D. Coal Company, Inc. On June 12, 2014, the Court entered an order for relief in each of the bankruptcy cases. On June 10, 2014, an involuntary Chapter 11 petition was filed against U.S. Coal Corporation. On June 27, 2014, the Court entered an order for relief in U.S. Coal's bankruptcy case. On Nov. 4, 2014, Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed petitions in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Chief Judge Tracey N. Wise. The Debtors are seeking to have their cases jointly administered for procedural purposes, meaning that upon entry of such an order all pleadings will be maintained on the case docket for Licking River Mining, LLC, Case No. 14-10201. U.S. Coal produces and sells thermal coal purchased primarily by utilities and trading companies and specialty coal purchased by various industrial customers and trading companies (known as "stoker" coal). U.S. Coal operates through two divisions: (1) the Licking River Division that was formed through the acquisition of LR Mining, LRR, and S.M. & J., and Oak Hill Coal, Inc. in January 2007 for $33 million., and (2) the J.A.D. Division that was formed through the acquisition of JAD and Fox Knob, and Sandlick Coal Company, LLC and Harlan County Mining, LLC in April 2008 for $41 million. Both the LRR Division and the JAD Division are located in the Central Appalachia region of eastern Kentucky. The LRR Division has approximately 26.3 million tons of surface reserves under lease. The JAD Division has 24.4 million tons of surface reserves, both leased and owned real property. At present, U.S. Coal has three surface mines in operation between the LRR Division and JAD Division. The Debtors have tapped Nixon Peabody LLP and DelCotto Law Group PLLC as attorneys, and Epiq Bankruptcy Solutions LLC as claims agent. The Official Committee of Unsecured Creditors have tapped Barber Law PLLC and Foley & Lardner as attorneys. VENOCO INC: S&P Cuts CCR to 'CCC+' & Removes From Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Denver-based Venoco Inc. and parent company Denver Parent Corp. to 'CCC+' from 'B-' and removed them from CreditWatch where they had placed with negative implications on Aug. 21, 2014. The outlooks are negative. At the same time, S&P affirmed its 'CCC+' issue rating on Venoco's senior unsecured notes and removed them from CreditWatch with positive implications. The recovery rating on these notes is '4' indicating the likelihood of average (30% to 50%) recovery in the event of a payment default. S&P is also lowering its issue-level rating on Denver Parent Corp.'s (DPC) notes to 'CCC-' from 'CCC'. The recovery rating on these notes is '6' indicating the likelihood of negligible (0% to 10%) recovery in the event of default. "The rating action reflects our view that Venoco's liquidity is very limited despite the sale of its West Montalvo properties and renegotiation of its credit facility covenants," said Standard & Poor's credit analyst Ben Tsocanos. The company used the approximately $200 million of net proceeds to repay borrowings under the facility, leaving about $25 million of availability following the reduction of the borrowing base to $90 million. Venoco obtained amendments to its financial covenants, improving access to the facility, which expires in 2016. The divestiture reduces the company's asset base, production and cash flow, though S&P views the renegotiation of covenants as favorable. The negative outlook reflects S&P's view that liquidity is constrained and the potential that it could lower Venoco's corporate credit rating if the company is unable to extend the maturity of its credit facility next year. S&P's ratings on oil and gas exploration and production company Venoco Inc. reflect S&P's assessment of the company's business risk as "weak" given its limited scale of reserves and production and its geographic concentration in California, partially offset by weighting of reserves and production toward favorably-priced crude oil, resulting in above-average profitability. S&P assess Venoco's financial risk profile as "highly leveraged," reflecting its expectation that leverage will remain above 5x debt to EBITDA through 2016, and the low level of free operating cash flow and high degree of expected cash flow volatility. S&P views Venoco's liquidity position as "less than adequate." The outlook is negative, reflecting S&P's expectation that liquidity will likely remain constrained and leverage high. S&P could lower the rating if Venoco's production declines materially, resulting in a further deterioration in liquidity. S&P could also lower the rating if it believed the company would not be in compliance with the amended covenants under its credit facility and S&P did not expect a remedy to be forthcoming, or if the company does not extend the maturity of its credit facility, currently in 2016, next year. S&P could raise the rating if Venoco were able to improve its liquidity to the point that S&P would view it as "adequate," which S&P estimates would require at least $35 million of combined credit facility availability and cash on hand. WATERSTONE MICHELLE: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Waterstone Michelle, L.P. 10500 Avery Club Drive Austin, TX 78717 Case No.: 14-11662 Chapter 11 Petition Date: November 4, 2014 Court: United States Bankruptcy Court Western District of Texas (Austin) Judge: Hon. Tony M. Davis Debtor's Counsel: B. Weldon Ponder, Jr., Esq. 9442 Capital of Texas Hwy N Building 1, Suite 500 Austin, TX 78759 Tel: (512) 342-8222 Fax: (512) 342-8444 Email: welpon@austin.rr.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert D. Wunsch, member and president. A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb14-11662.pdf YORK RISK: Moody's Maintains B3 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service is maintaining the ratings of York Risk Services Holdings Corp. (Corporate Family Rating, B3) following its announcement of plans to borrow $60 million under a delayed draw term loan and to issue an additional $45 million of senior unsecured notes. York is using the net proceeds to fund the acquisition of a managed care service provider. The transactions do not affect York's corporate family rating or debt ratings, which include a B1 rating on its first-lien revolver and term loan and a Caa2 rating on its senior unsecured notes. The rating outlook for York is stable. Ratings Rationale York's ratings reflect its good market position as a third-party administrative service provider in the US, its expertise in claims management and managed care services, its diversified client base and its relatively stable EBITDA margins. These strengths are tempered by the company's substantial financial leverage, low interest coverage, and weak net profit margins and cash flow metrics. Moody's expect that York will continue to actively pursue acquisitions, giving rise to integration and contingent risks (e.g., exposure to errors and omissions). Giving effect to the proposed borrowing and acquisition, York's debt-to-EBITDA ratio will be in the range of 7.5-8x, similar to the level at the close of the leveraged buyout in September 2014. The financial flexibility metrics are weak for the rating category. Moody's expects York to gradually reduce its leverage over the next year through growth in revenues and relatively stable EBITDA margins. Upon closing of the proposed transaction, the company's financing arrangement will include a $615 million first-lien term loan and a $100 million first-lien revolving credit facility (undrawn), both rated B1, and $315 million of senior unsecured notes, rated Caa2. The facilities are secured by substantially all assets of York, and both the facilities and the notes are guaranteed by subsidiaries. Factors that could lead to an upgrade of York's ratings include: (i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA - capex) coverage of interest exceeding 2x, and (iii) free-cash-flow-to-debt ratio greater than 4%. Factors that could lead to a rating downgrade include: (i) debt- to-EBITDA ratio above 8x on a sustained basis, (ii) (EBITDA - capex) coverage of interest less than 1.2x, and (iii) free-cash- flow-to-debt ratio below 2%. Furthermore, the first-lien credit facility ratings could be downgraded if first-lien borrowings become a larger proportion of the capital structure relative to senior unsecured notes. Moody's maintains the following ratings (and loss given default (LGD) assessments): Corporate family rating B3; Probability of default rating B3-PD; $100 million first-lien revolving credit facility B1 (LGD3, 32%); $615 million first-lien term loan B1 (LGD3, 32%); $315 million senior unsecured notes Caa2 (LGD5, 86%). The principal methodology used in these ratings was Moody's Global Rating Methodology for Insurance Brokers & Service Companies published in February 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Parsippany, NJ, York provides claims services, specialized loss adjusting, managed care, pool administration and loss control to the insurance services industry. York generated total revenues of $402 million in 2013. * Squire Patton Boggs Launches Restructuring & Insolvency Blog -------------------------------------------------------------- Squire Patton Boggs announced the launch of its global and cross border restructuring and insolvency blog, eSquire Global Crossings. "This new blog will fill a unique niche, by providing observations and insights on significant restructuring and insolvency developments from the United States, the United Kingdom, Europe and around the world, as well as those matters which reflect cross border issues involving multiple jurisdictions. As a global law firm with 44 offices in 21 countries, we are perfectly suited to keep you abreast of current developments around the world," Squire Patton Boggs. "eSquire Global Crossings will offer contributions from members of the Firm's Restructuring & Insolvency Practice Group, who reside across five continents, along with periodic guest submissions from colleagues in related practices and other friends. Our blog will provide a truly global perspective on global and cross border restructuring and insolvency matters. We hope you will find that eSquire Global Crossings becomes an important and trusted source of information on trends and developments in the global restructuring and insolvency field." The Squire Patton Boggs Restructuring & Insolvency Practice Group is a recognized leader, serving the needs of clients in the US, UK, EU and around the globe. The practice is led by Stephen D. Lerner, a partner in our Cincinnati, Ohio and New York offices, and Susan Kelly, a partner in the Firm's Manchester, UK office. eSquire Global Crossings will be edited by Christopher Meyer and Mark Salzberg, (co-editors-in-chief), Nava Hazan and Cathryn Williams. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Southeastern Stud and Components, Inc. Bankr. M.D. Ala. Case No. 14-32906 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/almb14-32906.pdf represented by: Lee R. Benton, Esq. BENTON AND CENTENO, LLP E-mail: lbenton@bcattys.com In re Daniel Nowlin and Elaine Nowlin Bankr. D. Ariz. Case No. 14-16073 Chapter 11 Petition filed October 24, 2014 In re Philip Charles Wilkins and Vicki Leanne Wilkins Bankr. D. Ariz. Case No. 14-16081 Chapter 11 Petition filed October 24, 2014 In re Miles Module Hauling, Incorporated Bankr. E.D. Ark. Case No. 14-15722 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/areb14-15722.pdf represented by: Billy J. Hubbell, Esq. LAW OFFICE OF BILLY J. HUBBELL E-mail: billy@hubbelllaw.net In re Recycled Materials Company, Inc. Bankr. D. Colo. Case No. 14-24447 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/cob14-24447.pdf represented by: Harvey Sender, Esq. SENDER WASSERMAN WADSWORTH, P.C. E-mail: Sendertrustee@sendwass.com In re KVJ Equipment Leasing, LLC Bankr. D. Colo. Case No. 14-24448 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/cob14-24448.pdf represented by: Harvey Sender, Esq. SENDER WASSERMAN WADSWORTH, P.C. E-mail: Sendertrustee@sendwass.com In re Kid City USA Inc. Bankr. M.D. Fla. Case No. 14-11886 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/flmb14-11886.pdf represented by: Justin R. Infurna, Esq. JUSTN R. INFURNA, ESQ., LLM In re Kenneth N. Scaff, Jr. Bankr. M.D. Fla. Case No. 14-05233 Chapter 11 Petition filed October 24, 2014 In re Michael W. Rauch Bankr. S.D. Fla. Case No. 14-33606 Chapter 11 Petition filed October 24, 2014 In re Hospitality Hawaii Corporation Bankr. D. Hawaii Case No. 14-01433 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/hib14-01433.pdf represented by: Joseph S.Y. Hu, Esq. E-mail: jhadvisor@gmail.com In re David Finley Bankr. N.D. Ind. Case No. 14-12697 Chapter 11 Petition filed October 24, 2014 In re Penn Optical Company, LTD. dba Penn Optical Bankr. D. Md. Case No. 14-26411 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/mdb14-26411.pdf represented by: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFELD, LLC E-mail: steveng@cohenbaldinger.com In re Leroy Silverman Bankr. D. Nev. Case No. 14-17122 Chapter 11 Petition filed October 24, 2014 In re Agustin Vaquero-Arenas and Reina Vaquero-Sanchez Bankr. D. Nev. Case No. 14-17126 Chapter 11 Petition filed October 24, 2014 In re Kevin Bernstein Bankr. D. Nev. Case No. 14-17128 Chapter 11 Petition filed October 24, 2014 In re Evangelina Moreno-Chavez Bankr. D. Nev. Case No. 14-17141 Chapter 11 Petition filed October 24, 2014 In re James E. Chapon and Karen R. Chapon Bankr. D. Nev. Case No. 14-51789 Chapter 11 Petition filed October 24, 2014 In re 277-283 W. Delavan LLC Bankr. E.D.N.Y. Case No. 14-45343 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/nyeb14-45343.pdf Filed as Pro Se In re Niagara Street Properties, LTD Bankr. W.D.N.Y. Case No. 14-12475 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/nywb14-12475.pdf represented by: Robert B. Gleichenhaus, Esq. GLEICHENHAUS, MARCHESE & WEISHAAR, P.C. E-mail: RBG_GMF@hotmail.com In re Seneca/Park Corp. Bankr. W.D.N.Y. Case No. 14-12486 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/nywb14-12486.pdf Filed as Pro Se In re Charifa Clark Bankr. W.D. Okla. Case No. 14-14444 Chapter 11 Petition filed October 24, 2014 In re Mayz Corp. Bankr. D. P.R. Case No. 14-08767 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/prb14-08767.pdf represented by: Ruben Gonzalez Marrero, Esq. E-mail: rgm@microjuris.com In re Mayz Corp. II Bankr. D. P.R. Case No. 14-08768 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/prb14-08768.pdf represented by: Ruben Gonzalez Marrero, Esq. E-mail: rgm@microjuris.com In re H&G Department Stores Bankr. D. P.R. Case No. 14-08769 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/prb14-08769.pdf represented by: Ruben Gonzalez Marrero, Esq. E-mail: rgm@microjuris.com In re Preformance Construction, Inc. dba Performance Logistics Bankr. D. Utah Case No. 14-31317 Chapter 11 Petition filed October 24, 2014 See http://bankrupt.com/misc/utb14-31317.pdf represented by: Theodore Floyd Stokes, Esq. STOKES LAW PLLC E-mail: ted@stokeslawpllc.com In re Thomas E. Black Bankr. D. Ariz. Case No. 14-16111 Chapter 11 Petition filed October 26, 2014 In re Julio A. Reyes and Deborah A. Reyes Bankr. M.D. Tenn. Case No. 14-08514 Chapter 11 Petition filed October 26, 2014 In re Bucur Rentals, LLC Bankr. C.D. Calif. Case No. 14-23216 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/cacb14-23216.pdf represented by: Michael Jay Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER E-mail: michael.berger@bankruptcypower.com In re DWN Enterprises, LLC Bankr. D. Conn. Case No. 14-31986 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/ctb14-31986.pdf represented by: Joseph J. D'Agostino, Jr., Esq. LAW OFFICES OF JOSEPH J. D'AGOSTINO, JR. E-mail: joseph@lawjjd.com In re Pamela P. Gabriel Bankr. D. Conn. Case No. 14-51627 Chapter 11 Petition filed October 27, 2014 In re Dewayne Elmore and Linda Elmore Bankr. M.D. Fla. Case No. 14-05255 Chapter 11 Petition filed October 27, 2014 In re Argen-ital, Inc. Bankr. S.D. Fla. Case No. 14-33783 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/flsb14-33783.pdf represented by: Brett A Elam, Esq., Esq. BRETT A. ELAM, P.A. E-mail: belam@brettelamlaw.com In re Arroyo Enterprises Inc. Bankr. S.D. Fla. Case No. 14-33786 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/flsb14-33786.pdf represented by: Brett A Elam, Esq. BRETT A. ELAM, P.A. E-mail: belam@brettelamlaw.com In re Bernard Ivan Turnoy Bankr. N.D. Ill. Case No. 14-38891 Chapter 11 Petition filed October 27, 2014 In re Midway Fuel Properties, LLC Bankr. E.D. Ky. Case No. 14-52412 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/kyeb14-52412.pdf represented by: Jamie L. Harris, Esq. DELCOTTO LAW GROUP PLLC E-mail: jharris@dlgfirm.com In re Anthony Bouldin Bankr. D. Md. Case No. 14-26403 Chapter 11 Petition filed October 27, 2014 In re Perfect 10, LLC Bankr. D. Md. Case No. 14-26543 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/mdb14-26543.pdf represented by: Robert B. Greenwalt, Esq. GREENWALT & SIGLER E-mail: attyrsigler@aol.com In re John Thomas Caver Bankr. S.D. Miss. Case No. 14-51678 Chapter 11 Petition filed October 27, 2014 In re Max Noel Bankr. E.D.N.Y. Case No. 14-74857 Chapter 11 Petition filed October 27, 2014 In re RWM Partnership, LLC Bankr. E.D. Pa. Case No. 14-18527 Chapter 11 Petition filed October 27, 2014 See http://bankrupt.com/misc/paeb14-18527.pdf represented by: Thomas Daniel Bielli, Esq. O'KELLY ERNST & BIELLI, LLC E-mail: tbielli@oeblegal.com In re Steven B. Petri and Cheryl A. Petri Bankr. D. Wis. Case No. 14-14593 Chapter 11 Petition filed October 27, 2014 In re Joseph Ellis Kokroko Bankr. D. Ariz. Case No. 14-16170 Chapter 11 Petition filed October 28, 2014 In re DK & J Enterprises, Inc. dba Roy & Dot's Towing Bankr. C.D. Calif. Case No. 14-23271 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/cacb14-23271.pdf represented by: Yoon O. Ham, Esq. LEWIS & HAM LLP E-mail: hamy@lewishamlaw.com In re Susanna Shaw Bankr. N.D. Calif. Case No. 14-31557 Chapter 11 Petition filed October 28, 2014 In re James W. Lord Bankr. N.D. Calif. Case No. 14-31560 Chapter 11 Petition filed October 28, 2014 In re Scott Eric Zeilinger Bankr. N.D. Calif. Case No. 14-44325 Chapter 11 Petition filed October 28, 2014 In re Environmental Protection Certification Company, Inc. Bankr. D. Md. Case No. 14-26516 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/mdb14-26516.pdf represented by: Michael D. Sendar, Esq. THE LAW OFFICE OF MICHAEL D. SENDAR In re JKJ Electric, Inc. Bankr. D. Md. Case No. 14-26624 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/mdb14-26624.pdf represented by: David J. Kaminow, Esq. MEISELMAN, SALZER, INMAN & KAMINOW, P.C. E-mail: dkaminow@kamlaw.net In re Javier Gomez and Gloria Gomez Bankr. D. Nev. Case No. 14-17191 Chapter 11 Petition filed October 28, 2014 In re Deimler's Recycling, Inc. Bankr. M.D. Pa. Case No. 14-04994 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/pamb14-04994.pdf represented by: Lawrence G. Frank, Esq. LAW OFFICE OF LAWRENCE G. FRANK E-mail: lawrencegfrank@gmail.com In re Radar Satellite Solutions, Inc. Bankr. N.D. Tex. Case No. 14-35128 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/txnb14-35128.pdf represented by: Dan L. Wyde, Esq. WYDE & ASSOCIATES In re Hartford Oil & Gas, Inc. Bankr. N.D. Tex. Case No. 14-35129 Chapter 11 Petition filed October 28, 2014 See http://bankrupt.com/misc/txnb14-35129.pdf represented by: Dan L. Wyde, Esq. WYDE & ASSOCIATES In re Lydia Ong Sanders Bankr. C.D. Calif. Case No. 14-16388 Chapter 11 Petition filed October 29, 2014 In re David Eugene Foyil Bankr. E.D. Calif. Case No. 14-30670 Chapter 11 Petition filed October 29, 2014 In re Thomas J. Murphy Bankr. D. Colo. Case No. 14-24672 Chapter 11 Petition filed October 29, 2014 In re Mullare-Murphy Funeral Home, Inc. Bankr. D. Colo. Case No. 14-24676 Chapter 11 Petition filed October 29, 2014 See http://bankrupt.com/misc/cob14-24676.pdf represented by: Steven T. Mulligan, Esq. JACKSON KELLY, PLLC E-mail: smulligan@jacksonkelly.com In re Mark Anthony Ditsious and Mollie Gleason Ditsious Bankr. W.D. La. Case No. 14-51357 Chapter 11 Petition filed October 29, 2014 In re Pooh Bear Daycare Center Inc. Bankr. N.D. Miss. Case No. 14-14039 Chapter 11 Petition filed October 29, 2014 See http://bankrupt.com/misc/msnb14-14039.pdf represented by: Gwendolyn Baptist-Hewlett, Esq. THE BAPTIST LAW FIRM PLLC E-mail: sd@baptistlaw.com In re Corey Amos and Louise Gombako Amos Bankr. S.D. Miss. Case No. 14-03499 Chapter 11 Petition filed October 29, 2014 In re Dublin Pub Group, LLC dba Dublin Square Pub Bankr. D. N.J. Case No. 14-31999 Chapter 11 Petition filed October 29, 2014 See http://bankrupt.com/misc/njb14-31999.pdf represented by: Edward Harrington Heyburn, Esq. In re Edward Johnson Murdock, Jr. Bankr. D. S.C. Case No. 14-06106 Chapter 11 Petition filed October 29, 2014 In re Hesed Enterprises, LLC Bankr. N.D. Tex. Case No. 4-10205 Chapter 11 Petition filed October 29, 2014 See http://bankrupt.com/misc/txnb14-10205.pdf represented by: Robert H. Holmes, Esq. HOLMES LAW FIRM E-mail: rhholmes@swbell.net In re Michael Eugene Gallagher and Rhonda Lynn Gallagher Bankr. N.D. Tex. Case No. 14-20339 Chapter 11 Petition filed October 29, 2014 In re English & Associates P.L.L.C. Bankr. N.D. Tex. Case No. 14-35143 Chapter 11 Petition filed October 29, 2014 See http://bankrupt.com/misc/txnb14-35143.pdf represented by: Keith William Harvey, Esq. THE HARVEY LAW FIRM E-mail: harvey@keithharveylaw.com In re Thuy Lien Hoang and Mark Joseph Hubbard Bankr. W.D. Wash. Case No. 14-45786 Chapter 11 Petition filed October 29, 2014 In re Stanford Lerch and Susan Lerch Bankr. D. Ariz. Case No. 14-16376 Chapter 11 Petition filed October 30, 2014 In re Aliso Viejo Fatburger, LLC Bankr. C.D. Calif. Case No. 14-16441 Chapter 11 Petition filed October 30, 2014 See http://bankrupt.com/misc/cacb14-16441.pdf represented by: Michael G. Spector, Esq. LAW OFFICES OF MICHAEL G. SPECTOR E-mail: mgspector@aol.com In re Anyes Isabel Van Volkenburgh Bankr. C.D. Calif. Case No. 14-30455 Chapter 11 Petition filed October 30, 2014 In re United Motor Club, Inc. Bankr. C.D. Calif. Case No. 14-30482 Chapter 11 Petition filed October 30, 2014 See http://bankrupt.com/misc/cacb14-30482.pdf represented by: Bahram Madaen, Esq. LAW OFFICE OF MADAEN E-mail: ssiroos@hotmail.com In re Jethelyn Annette Hall Bankr. C.D. Calif. Case No. 14-12406 Chapter 11 Petition filed October 30, 2014 In re Peter Brook Bankr. C.D. Calif. Case No. 14-14939 Chapter 11 Petition filed October 30, 2014 In re Bradford J. Staph Bankr. C.D. Calif. Case No. 14-16438 Chapter 11 Petition filed October 30, 2014 In re lmo Properties, LLC Bankr. S.D. Fla. Case No. 14-33995 Chapter 11 Petition filed October 30, 2014 See http://bankrupt.com/misc/flsb14-33995.pdf represented by: Daniel R. Brinley, Esq. LAW OFFICES OF DANIEL R. BRINLEY, PA E-mail: drb@fcohenlaw.com In re Roger L Altis and Marcia K Altis Bankr. D. Kans. Case No. 14-12484 Chapter 11 Petition filed October 30, 2014 In re Minges Creek Racquet & Fitness Club, LLC Bankr. W.D. Mich. Case No. 14-06916 Chapter 11 Petition filed October 30, 2014 See http://bankrupt.com/misc/miwb14-06916.pdf represented by: Steven L. Rayman, Esq. RAYMAN & KNIGHT E-mail: courtmail@raymanstone.com In re Carolyn E Strieter by her Conservator Guy T Conti Bankr. E.D. Miss. Case No. 14-56980 Chapter 11 Petition filed October 30, 2014 In re John Brian Trujillo and Elizabeth Trujillo Bankr. D. N.M. Case No. 14-13215 Chapter 11 Petition filed October 30, 2014 In re Awais Management Corp. dba Super Deal 99 Cent & Up Bankr. E.D.N.Y. Case No. 14-45508 Chapter 11 Petition filed October 30, 2014 See http://bankrupt.com/misc/nyeb14-45508.pdf represented by: Michael A King, Esq. E-mail: Romeo1860@aol.com In re Justina Pepple Taube and Michael Allen Taube Bankr. S.D. Tex. Case No. 14-80416 Chapter 11 Petition filed October 30, 2014 In re Neckles Builders, Inc. Bankr. S.D.N.Y. Case No. 14-37185 Chapter 11 Petition filed October 31, 2014 See http://bankrupt.com/misc/nysb14-37185.pdf represented by: Lewis D. Wrobel, Esq. E-mail: lewiswrobel@verizon.net ********* 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. 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