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/raid1/www/Hosts/bankrupt/TCR_Public/141212.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 12, 2014, Vol. 18, No. 345 Headlines 2141 FOREST: Bid to Stay Dismissal Order Pending Appeal Denied 24 HOUR FITNESS: Bally Total Deal No Impact on Moody's B2 CFR ADVANCED MICRO DEVICES: To Transfer Stock Listing to NASDAQ AEREO INC: Section 341 Meeting of Creditors Set for Jan. 14 AEROSYSTEMS INC: Moody's Puts 'B2' CFR on Review for Upgrade AGSTAR FINANCIAL: S&P Affirms 'BB-' Preferred Notes Rating ALPHABET HOLDING: Moody's Alters Outlook to Neg., Affirms B2 CFR ALSIP ACQUISITION: US Trustee Appoints Creditors' Committee AMERICAN APPAREL: Lion/Hollywood Appoints Gene Montesano to Board AMERICAN LASER: Chapter 7 Petition Filed ANDREWS SQUARE: Case Summary & 7 Unsecured Creditors ANIXTER INT'L: Fitch Affirms 'BB+' IDR; Outlook Stable ARCTIC GLACIER: Private-Equity Firm Seeks Buyers ARMSTRONG WORLD: DLW Unit Files for Insolvency in Germany BAKERCORP INT'L: Moody's Lowers Corp. Family Rating to Caa1 BANK OF THE CAROLINAS: Stockholders Elected 9 Directors BERNARD L. MADOFF: Inner Circle Faces Reckoning as Prison Looms BERRY & BERRY: Amended Plan Doesn't Comply With Sec. 1129(a)(8) CAESARS ENTERTAINMENT: Reaches Tentative Deal for Largest Unit CAESARS ENTERTAINMENT: Elliott to Buy Swaps Amid Bankruptcy Talks CHRYSLER GROUP: Wins Reversal on $50M Ch. 11 Tax Dispute CLINE MINING: Seeks U.S. Recognition of CCAA Case CLINE MINING: Terms of Proposed Recapitalization Plan CLINE MINING: Ontario Court Sets Jan. 13 as Claims Bar Date CLINE MINING: Ontario Court Names FTI Consulting as CCAA Monitor CLINE MINING: Canadian Creditors' Meeting Slated for January 21 CLINE MINING: TRO Issued; Injunction Hearing Today CLINE MINING: Court Issues Joint Administration Order COMDISCO HOLDING: Earns $855,000 in Fiscal Yr. Ended Sept. 30 CONN'S INC: Moody's Changes Rating Outlook on Ba3 CFR to Negative CONNECTEDU INC: CSM Wants Clear Regulation of Student Data CRYOPORT INC: Issues $415,000 Notes to Investors DEB STORES: Headed for GOB Sales After Rival Offers in Ch. 11 DEB STORES: Proposes $25-Mil. of DIP Financing From PNC DEB STORES: Proposes Epiq as Claims and Notice Agent DEB STORES: Has Interim Authority to Tap $23MM in DIP Loans DEB STORES: To Begin Store Closings Jan. 9 DEB STORES: Names Timothy Boates as Restructuring Officer ELECTRICAL COMPONENTS: Moody's Affirms B2 Corporate Family Rating ENERGY FUTURE: Aims for Quick Ch 11 Exit; Discloses Attorney Fees ENTERCOM COMMUNICATIONS: Lincoln Deal No Impact on Moody's B2 CFR EXIDE TECHNOLOGIES: Enters Into Amended Plan Support Agreement EXPRESS INC: S&P Revises Outlook to Negative on Weak Performance F & B GARDENS: Case Summary & 4 Unsecured Creditors FINJAN HOLDINGS: Sells Subsidiary for $675,000 FOREST OIL: Fails to Meet NYSE's $1 Bid Price Rule GARY DOURDAN: Ex-Girlfriend Wants Cash for Alleged Assault GCI INC: Moody's Assigns Ba2 Rating on New $275MM Term Loan GEORGE BAVELIS: 6th Circuit Affirms Judgment Against Ted Doukas GRAFTECH INTERNATIONAL: S&P Lowers CCR to 'BB-'; Outlook Negative GREEN ISLAND: Moody's Maintains Ba1 Rating on Power System Bonds HAPPY TYMES FAMILY: Voluntary Chapter 11 Case Summary HILL RD HOTEL: Case Summary & 7 Unsecured Creditors HRTEC INC: Voluntary Chapter 11 Case Summary HRTEC INC: 2nd Voluntary Chapter 11 Case Summary HUTCHESON MEDICAL: US Trustee Appoints Creditors' Committee IRACORE INT'L: Moody's Cuts CFR to Caa1, Outlook Negative ITHACA ENERGY: Moody's Affirms Caa1 rating on Sr. Unsecured Notes J.C. PENNEY: May Never Recover From Sales Slump, NY Post Says JAMES E. COFIELD: Court Dismisses Appeal for Lack of Jurisdiction JAMES LEE NICKESON: Cross-Motions for Partial Judgment Denied KEY ENERGY: S&P Raises Rating on $675MM Sr. Unsec. Notes to 'BB-' KANGADIS FOOD: Cleared to Exit Bankruptcy After Settling Lawsuit LAKELAND INDUSTRIES: Incurs $2.5-Mil. Net Loss in Third Quarter LAKSHMI HOSPITALITY: US Trustee to Hold Creditors' Meeting Jan. 27 LBI MEDIA: Moody's Assigns Caa3 Rating on New $204MM Notes LEVEL 3: Southeastern Asset Reports 16.5% Stake as of Dec. 10 MACK-CALI REALTY: Moody's Lowers Preferred Shelf Rating to (P)Ba1 MACKEYSER HOLDINGS: Dec. 15 Hearing on Settlement Agreement MARITIME TELECOMMUNICATIONS: S&P Affirms 'B-' CCR; Outlook Stable MATAGORDA ISLAND: Dec. 16 Hearing on Bid for Case Conversion MAUDORE MINERALS: Posts Net Loss of $19.7MM in Third Quarter MCGRAW-HILL SCHOOL: Fitch Affirms 'B' Issuer Default Rating METRO FUEL: Plea In Works for Exec Hit With $30M Bank Fraud Rap MF GLOBAL: Underwriters Settle Class-Action Suit for $74 Million MOLYCORP INC: S&P Raises CCR to 'CCC+'; Outlook Negative MONROE HOSPITAL: Dec. 29 Hearing on Adequacy of Plan Outline MUSKIE PROPERTIES: Case Summary & 20 Largest Unsecured Creditors NAUTILUS HOLDINGS: Plan Confirmation Hearing Set for January 9 NAUTILUS HOLDINGS: Goes to Mediation in Advance of Plan Hearing NAVISTAR INTERNATIONAL: To Release Q4 Financial Results Next Week NEOGENIX ONCOLOGY: OK'd to Incur $2.5MM Exit Loan from ALJ Capital NEW LOUISIANA: Pepper Hamilton Retention Effective Oct. 8 NEWLEAD HOLDINGS: Incurs $47.7 Million Net Loss in H1 2014 NII HOLDINGS: Taps PricewaterhouseCoopers on Audit-Related Work NORTHEAST WATER: Case Summary & 20 Largest Unsecured Creditors NORTHLAND HOLDINGS: Case Summary & 15 Top Unsecured Creditors OPEN RANGE: USDA Liable for $10-Mil. Claims, Fed. Circ. Told OUTLAW RIDGE: Has Until March 4 to Propose Chapter 11 Plan PALMETTO SCHOLARS: S&P Assigns 'BB' Rating on 2014B Revenue Bonds PETTERS COMPANY: Dec. 16 Hearing on Intercreditor Agreement PLY GEM HOLDINGS: JPMorgan Holds 1.8% Stake as of Nov. 28 POTOMAC SUPPLY: Counsel's Retention of $500K Deposit Is Proper PPL CAPITAL: Fitch Affirms 'BB+' Rating on Jr. Subordinated Notes PROTECTIVE LIFE: Fitch Retains 'BB+' Rating on CreditWatch Pos. RADIOSHACK CORP: Resolving Creditor Dispute Won't Stop Demise RADIOSHACK CORP: To Cut More Costs as Losses Mount RADIOSHACK CORP: To End 401(k) Retirement Matching to Cut Costs RENTPATH INC: New $30MM Debt Change No Impact on Moody's B2 CFR REVEL AC: Atlantic City Fails to Recover Taxes at Tax-Lien Sale SABRA HEALTH: Fitch Assigns 'BB+' Issuer Default Rating SANDERS LARIOS: Involuntary Chapter 11 Case Summary SANDRINE'S LIMITED: Case Summary & 20 Largest Unsecured Creditors SELCO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors SILVERADO STREET: Files for Chapter 11 with $11.3-Mil. Debt SMILE BRANDS: Moody's Lowers Corporate Family Rating to Caa1 SOLEDAD REDEVELOPMENT: S&P Cuts Rating on Increment Bonds to 'BB' SOPA SQUARE: BC Court Approves Purchase & Sale Agreement SOUTHEAST POWERGEN: S&P Rates $480MM Sr. Secured Term Loan 'BB' SPECIALTY PRODUCTS: Court Confirms Ch. 11 Reorganization Plan SPECIALTY PRODUCTS: RPM Brings Finality to Bondex Asbestos Costs SPRINT CORP: Fitch Affirms 'B+' Issuer Default Rating TOMAHAWK OIL: Case Summary & 2 Unsecured Creditors TRANSLOADING SERVICES: Case Summary & 13 Top Unsecured Creditors TREETOPS ACQUISITION: Gen. Manager Positive About Reorganization TRI-COUNTY COMMUNITY: Case Summary & 2 Top Unsecured Creditors TRUMP ENTERTAINMENT: Gaming Partners Settle as Ch. 7 Hearing Looms TRUMP ENTERTAINMENT: Delays Potential Taj Closing VISION INDUSTRIES: Chapter 11 Case Converted to Chapter 7 WET SEAL: Q3 Results at Low End of Expectations WET SEAL: Warns of Potential Bankruptcy Filing YESHIVA UNIVERSITY: Moody's Affirms B3 Rating on $314.5MM Bonds * 11 Hospitals Filed for Bankruptcy in 2014, Says Becker's * Rep. Marino Tapped to Become New House Antitrust Chair * Fitch: U.S. High Yield Default Rate 1.5-2% in 2015 * Fitch: Changes to Ch. 11 Could Pressure 1st Lien Recoveries * BOOK REVIEW: Macy's for Sale ********* 2141 FOREST: Bid to Stay Dismissal Order Pending Appeal Denied -------------------------------------------------------------- Judge Edward M. Chen of the U.S. District Court for the Northern District of California denied an emergency ex-parte motion for stay pending appeal in the lawsuit captioned Monica Hujazi, et al. v. Otto Miller, et al., Case No. C-14-4852 EMC. Plaintiffs-Appellants Monica Hujazi and 2141 Forest View LLC filed the bankruptcy appeal on October 31, 2014. On November 25, 2014, Forest View filed an emergency ex parte motion requesting the District Court stay an order of the U.S. Bankruptcy Court for the Northern District of California dismissing Forest View's Chapter 11 bankruptcy petition. Forest View seeks an emergency stay order from the District Court because Defendant-Appellee Otto Miller has scheduled a foreclosure to occur on Forest View's property for December 1, 2014. Ms. Hujazi is the sole owner of 2141 Forest View LLC, and Forest View LLC is the sole owner of the piece of real property located at 2141 Forest View Avenue, in Hillsborough, California. Ms. Hujazi lives on the Property with her teenage daughter. On September 29, 2014, the Bankruptcy Court dismissed Forest View's Chapter 11 bankruptcy filings. The Bankruptcy Court explained that it believed that the petition was "filed not for the legitimate purpose of reorganization, which does not appear possible, but to delay creditors in bad faith." The judge noted that Forest View filed a reorganization plan without a required disclosure statement, and that the proposed plan was further "unconfirmable" on the merits. After recounting the various defects in the reorganization plan, the judge concluded that it was "dead in the water." The Bankruptcy Court then noted numerous other defects in Forest View's filings. For instance, Forest View apparently "disputes the validity of Mr. Miller's lien, but has taken no action whatsoever to adjudicate that issue in this Court or any other." Forest View sought a stay pending appeal from the bankruptcy judge, but its motion was denied on November 19, 2014. Judge Chen noted that Forest View has made absolutely no showing in its emergency motion that the Bankruptcy Court's orders were even erroneous, let alone clearly so. He adds that Forest View has not cited anything to the District Court Court that would even call into question the Bankruptcy Court's finding of bad faith. The bankruptcy judge concluded, based on her knowledge of Ms. Hujazi's demonstrated "persistent . . . gross mismanagement" and "glib disregard for the provisions of the Bankruptcy Code" in a different bankruptcy filing, and Ms. Hujazi's resistance to the appointment of a trustee in the Forest View bankruptcy, that she could not be trusted with the fiduciary duties as the Debtor's responsible individual; it was also evidence of her bad faith in filing the bankruptcy petition. Judge Chen said he sees nothing clearly erroneous with that conclusion. Because Forest View has not established that it is "likely to succeed on the merits of the appeal," Judge Chen ruled that its emergency motion for a stay pending appeal is denied. Appellants Monica Hujazi and 2141 Forest View are represented by: Bradley Mark Kass, Esq. KASS & KASS LAW OFFICES 520 S El Camino Real, #810 San Mateo, CA 94402 Telephone: (650) 579-0612 Facsimile: (650) 579-0760 Appellee Otto Miller is represented by: Harold Mitchell Jaffe, Esq. 3521 Grand Ave. Oakland, CA 946102011 Telephone: (510) 452-2610 Facsimile: (510) 452 9125 E-mail: Jaffe510@aol.com A full-text copy of the Order dated November 26, 2014, is available at http://bit.ly/1zwVprhfrom Leagle.com. 2141 Forest View LLC sought Chapter 11 bankruptcy protection in (Bankr. N.D. Cal. Case No. 14-30856-HLB) on June 4, 2014. On September 29, 2014, the Bankruptcy Court dismissed Forest View's Chapter 11 bankruptcy filings. Monica Hujazi is the sole owner of the Debtor and the Debtor is the sole owner of the piece of real property located at 2141 Forest View Avenue, in Hillsborough, California. Ms. Hujazi lives on the Property with her teenage daughter. 24 HOUR FITNESS: Bally Total Deal No Impact on Moody's B2 CFR ------------------------------------------------------------- Moody's Investors Service said that 24 Hour Fitness Worldwide, Inc.'s agreement to purchase 32 Bally Total Fitness clubs for cash is a credit positive for the company because it expands the company's club portfolio while slightly reducing leverage. The investment enhances the company's ability to meet Moody's expectation that leverage will approach 6.0x by the end of 2015. The acquisition has no impact on the company's B2 Corporate Family Rating, its debt instrument ratings, or the stable rating outlook. The principal methodology used in this rating was Business and Consumer Service Industry published in December 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. 24 Hour Fitness Worldwide, Inc. is a leading owner and operator of fitness centers in 18 states and 28 markets, with a majority located in California and other western states. As of September 30, 2014, the company operated 414 fitness clubs under three key brand names--24 Hour Fitness Active, 24 Hour Fitness Sport, and 24 Hour Fitness Super Sport. Collectively, these clubs served approximately 3.8 million members with revenues of about $1.3 billion for the 12 months ended September 30, 2014. 24 Hour Fitness is jointly-owned by the affiliates of AEA Investors LP and Ontario Teachers' Pension Plan. ADVANCED MICRO DEVICES: To Transfer Stock Listing to NASDAQ ----------------------------------------------------------- AMD announced that it is transferring its stock exchange listing to The Nasdaq Stock Market from The New York Stock Exchange, effective after market close on Dec. 31, 2014. AMD shares are expected to begin trading as a Nasdaq-listed security on Jan. 2, 2015, and will continue to trade under the symbol AMD. This transfer is expected to be seamless for AMD investors and shareholders. "We are excited to join other industry-leading technology companies listed with Nasdaq and believe this move will help AMD reach investors and shareholders more efficiently and effectively as we continue transforming the company for long-term growth," said Devinder Kumar, senior vice president and chief financial officer, AMD. "We are proud to welcome AMD to Nasdaq and look forward to a successful partnership with the company and its shareholders," said Bruce Aust, vice chairman at Nasdaq. About Advanced Micro Devices Sunnyvale, California-based Advanced Micro Devices, Inc., is a global semiconductor company. The Company's products include x86 microprocessors and graphics. Advanced Micro incurred a net loss of $83 million on $5.29 billion of net revenue for the year ended Dec. 28, 2013, as compared with a net loss of $1.18 billion on $5.42 billion of net revenue for the year ended Dec. 29, 2012. As of Sept. 27, 2014, the Company had $4.32 billion in total assets, $3.79 billion in total liabilities and $535 million in total stockholders' equity. * * * In August 2013, Standard & Poor's Ratings Services revised its outlook on Advanced Micro to negative from stable. At the same time, S&P affirmed its 'B' corporate credit and senior unsecured debt ratings on AMD. As reported by the TCR on June 5, 2014, Fitch Ratings had upgraded the long-term Issuer Default Rating (IDR) for Advanced Micro Devices Inc. (NYSE: AMD) to 'B-' from 'CCC'. The upgrade primarily reflects AMD's improved financial flexibility from recent refinancing activity, which extends meaningful debt maturities until 2019. In the Feb. 4, 2013, edition of the TCR, Moody's Investors Service lowered Advanced Micro Devices' corporate family rating to B2 from B1. The downgrade of the corporate family rating to B2 reflects AMD's prospects for weaker operating performance and liquidity profile over the next year as the company commences on a multi- quarter strategic reorientation of its business in the face of a challenging macro environment and a weak PC market. AEREO INC: Section 341 Meeting of Creditors Set for Jan. 14 ----------------------------------------------------------- The meeting of creditors of Aereo Inc. is set to be held on Jan. 14, 2015, at 2:30 p.m., according to a filing with the U.S. Bankruptcy Court for the Southern District of New York. The meeting will be held at 80 Broad Street, 4th Floor, in New York. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Aereo, Inc. With headquarters in Boston, Massachusetts, Aereo, Inc., is a technology company that provided subscribers with the ability to watch live or "time-shifted" local over-the-air broadcast television on internet-connected devices, such as personal computers, tablet devices, and "smartphones." Aero provided to each subscriber access, via the internet, to individual remote or micro-antennas and a cloud-based DVR, which were maintained by the Debtor in facilities within the local market. Aereo, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 14-13200) in Manhattan, New York, on Nov. 20, 2014. The Chapter 11 filing came five months after the U.S. Supreme Court ruled the Debtor, with respect to live or contemporaneous transmissions, was essentially performing as a traditional cable system under the Copyright Act, and thus was violating broadcasters' copyrights because it wasn't paying broadcasters any fees. The Debtor has tapped William R. Baldiga, Esq., at Brown Rudnick LLP, in New York, as counsel. The Debtors has also engaged Argus Management Corp. to provide the services of Lawton W. Bloom as CRO and Peter Sullivan and Scott Dicus as assistant restructuring officers. Prime Clerk LLC is the claims and notice agent. As of the Petition Date, the Debtor's reported total assets were $20.5 million, and its total undisputed liabilities (primarily trade debt) were $4.2 million. AEROSYSTEMS INC: Moody's Puts 'B2' CFR on Review for Upgrade ------------------------------------------------------------ Moody's Investors Service has placed the ratings of Spirit AeroSystems, Inc., including its Ba2 corporate family rating, Ba1 senior secured and Ba3 senior unsecured debt ratings, under review for upgrade. The review follows the company's announcement that it has agreed to transfer its Gulfstream G280 and G650 wing work at Spirit's facility in Tulsa, Oklahoma, to Triumph Group. Spirit's exposure to the Gulfstream wings had resulted in costly write- downs over the last two years and as part of the transaction, the company has agreed to make a cash payment of $160 million to Triumph along with the transfer of assets associated with the wing production including existing inventory, tooling and equipment. The review for upgrade is also prompted by a marked improvement in Spirit's operating performance and cash flow generation over recent quarters. The review will focus on the company's improved earnings and cash flow profile along with management's future plans for cash deployment. The review will also consider downside risk associated with some of Spirit's new and maturing programs and the company's ability to sustain a less volatile and stronger credit profile going forward. Concurrent with review for upgrade, Moody's changed its Speculative Grade Liquidity rating for Spirit to SGL-2 from SGL-3. Ratings Rationale The following summarizes Moody's ratings and the rating actions for Spirit AeroSystems, Inc.: Corporate Family Rating, under review for upgrade from Ba2 Probability of Default Rating, under review for upgrade from Ba2-PD $650 million senior secured revolver due 2017, under review for upgrade from Ba1, LGD3 $540 million senior secured term loan due 2020, under review for upgrade from Ba1, LGD3 $300 million senior notes due 2020, under review for upgrade from Ba3, LGD5 $300 million senior notes due 2022, under review for upgrade from Ba3, LGD5 Speculative Grade Liquidity Rating, changed to SGL-2 from SGL-3 Outlook, Ratings Under Review The principal methodology used in these ratings 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. Spirit AeroSystems, Inc., headquartered in Wichita, Kansas, is an independent non-OEM designer and Tier-1 manufacturer of commercial aircraft aerostructures. Components include fuselages, pylons, struts, nacelles, thrust reversers, and wing assemblies, primarily for Boeing but also for Airbus and others. Revenues are expected to be almost $7 billion for 2014. AGSTAR FINANCIAL: S&P Affirms 'BB-' Preferred Notes Rating ---------------------------------------------------------- Standard & Poor's Ratings Services, on Dec. 10, 2014, said it has reviewed its ratings on U.S. financial services government-related entities (GREs) by applying its new ratings criteria for nonbank financial institutions (NBFI), which were published on Dec. 9, 2014. Subsequently, S&P is affirming its issue ratings on Fannie Mae, Freddie Mac, the Federal Home Loan Banks (FHLBs), and the Federal Farm Credit Banks. S&P is also affirming its issuer credit ratings on AgFirst FCB, Agribank FCB, AgStar Financial Services ACA, CoBank ACB, and the Federal Home Loan Banks of Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, Seattle, and Topeka. The outlooks remain stable. The NBFI ratings framework is similar to our framework for banks. S&P starts with an anchor -- the starting point for all NBFI ratings in a given country -- and adjust the anchor up and down depending on S&P's assessment of an entity's business position; capital, leverage, and earnings; risk position; and funding and liquidity to determine a stand-alone credit profile (SACP). Lastly, the criteria consider potential support from governments or corporate groups before setting the issuer credit rating (ICR) and debt ratings. The preliminary anchor for U.S. NBFI finance companies (as defined by the NBFI criteria) is three notches below the U.S. bank anchor. However, S&P adjusts the anchor for these GREs. S&P's 'bbb+' anchor for U.S. GREs reflects S&P's view of the sector's economic and industry risk. S&P views the GREs' industry risk as largely similar to banks' because of their material regulatory oversight and federally chartered institutional framework that preserves their competitive positions and generates stable revenue streams. It also reflects S&P's view that their strong capital and liquidity positions are similar to banks' and that, although they do not have deposit franchises, their funding risk is low given their access to low-cost funds from very liquid capital markets because of their special government-related status. In S&P's view, these characteristics render the anchor for GREs at 'bbb+', the same level as our U.S. bank anchor, which is derived from S&P's Banking Industry Country Risk Assessments. S&P adjusts its ratings from the starting point of the anchor based on the individual characteristics of the rated organizations. RATINGS LIST Ratings Affirmed Federal Farm Credit Banks Senior Unsecured AA+/Stable Senior Unsecured A-1+ AgFirst FCB Issuer Credit Rating AA-/Stable/A-1+ Preferred BBB+ Agribank FCB Issuer Credit Rating AA-/Stable/-- Subordinated A- Preferred BBB+ AgStar Financial Services ACA Issuer Credit Rating BBB-/Stable/-- Preferred BB- CoBank ACB Issuer Credit Rating AA-/Stable/-- Subordinated A- Preferred BBB+ Federal Home Loan Banks Senior Unsecured AA+ Senior Unsecured AA+/A-1+ Senior Unsecured AA+/Stable Short-Term Debt A-1+ Federal Home Loan Bank of Atlanta Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Boston Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Chicago Issuer Credit Rating AA+/Stable/A-1+ Subordinated AA- Federal Home Loan Bank of Cincinnati Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Dallas Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Des Moines Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Indianapolis Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of New York Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Pittsburgh Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of San Francisco Issuer Credit Rating AA+/Stable/A-1+ Federal Home Loan Bank of Seattle Issuer Credit Rating AA/Stable/A-1+ Federal Home Loan Bank of Topeka Issuer Credit Rating AA+/Stable/A-1+ Fannie Mae Preferred Stock D Senior Unsecured A-1+ Senior Unsecured AA+ Senior Unsecured AA+/Stable Subordinated AA-/Stable Freddie Mac Preferred Stock D Senior Unsecured A-1+ Senior Unsecured AA+ Senior Unsecured AA+/Stable Subordinated AA-/Stable ALPHABET HOLDING: Moody's Alters Outlook to Neg., Affirms B2 CFR ---------------------------------------------------------------- Moody's Investors Service changed Alphabet Holding Company, Inc.'s and its subsidiary NBTY, Inc.'s (together "NBTY") rating outlook to negative from stable. At the same time Moody's affirmed all existing ratings including the B2 Corporate Family Rating. The negative outlook is a result of continued declines in operating performance due to soft industry trends coupled with a highly levered capital structure. The following ratings are affirmed: For Alphabet Holding Company, Inc.: Corporate Family Rating at B2 Probability of Default Rating at B2-PD $1.0 billion senior unsecured notes due November 2017 at Caa1 LGD 5 For NBTY, Inc. Senior secured bank credit facilities at Ba3 LGD 2 $650 million senior unsecured notes due October 2018 at B3 LGD 4 Outlook Actions: Outlook changed to negative from stable Ratings Rationale The change in NBTY's outlook to negative from stable reflects the continued declines in domestic retail and wholesale revenues (-3.5% & -3.1% respectively), as well as operating margin erosion during fiscal year ended September 30, 2014. The negative trends in operating performance and relatively high debt levels have caused lease adjusted debt to EBITDA to increase to 7.0 times and adjusted EBITA to interest expense to fall to 1.5 times for the same period. Revenue declines in the domestic retail and wholesale businesses were caused by softness in consumer demand and weak domestic branded and private label sales. This was likely a result of negative publicity, released in December 2013, related to the efficacy of taking multi-vitamins as a form of disease prevention. Despite these headwinds, the declines were offset by increased revenues from NBTY's direct and European retail businesses (1.4% & 14.4% respectively) resulting in a 1.4% gain in total revenue. However, the earnings impact from the revenue declines in domestic retail and wholesale was sizable. NBTY's operating margin declined by 70 basis points (excluding one-time items) caused by more aggressive promotions in order to lower inventory levels as well as the company's inability to leverage fixed costs effectively. NBTY's B2 Corporate Family Rating reflects its high leverage with debt to EBITDA of about 7.0 times and its adequate interest coverage with EBITA to interest expense of 1.5 times. The rating is supported by NBTY's very good liquidity and its portfolio of well-known brands. Positive ratings consideration is also given to the growth potential of the vitamin, mineral, and nutritional supplement ("VMNS") industry due to an increasing number of Americans over the age of 50. The rating is negatively impacted by NBTY's aggressive financial policy and the increased competitive environment, as larger players such as Proctor & Gamble and Pfizer have expanded their presence. In addition, NBTY's rating is pressured by its recent earnings volatility. Negative ratings consideration is also given to the business risk of adverse publicity, an example of which is the recent soft VMNS industry trends in the aftermath of negative publicity in December 2013, and for potential product recalls associated with the VMNS industry. Moody's expects that NBTY will maintain very good liquidity over the next twelve-to-eighteen months. At September 30, 2014, NBTY had about $140 million of cash on hand. Looking forward Moody's expects cash balances to rise to about $200 million. NBTY generated negative free cash flow in FYE 2014 as a result of a sizable dividend that was paid. Moody's does not expect NBTY to pay another sizable dividend in 2015 given its soft operating performance. This along with a reduction in inventory purchasing will result in NBTY generating positive free cash flow in 2015. The $175 million revolving credit facility due September 2017 is currently undrawn and Moody's does not anticipate NBTY using the facility going forward. The facility contains a springing leverage ratio that is only tested should there be any borrowings or letters of credit outstanding under the facility. Since Moody's does not anticipate NBTY to use the facility, this covenant is not likely to be tested going forward. In addition, NBTY's term loan does not have any financial covenants. NBTY's alternative sources of liquidity are limited since all of its domestic assets are pledged to the bank facility or mortgages. The negative outlook reflects NBTY's continued declines in operating performance due to soft industry trends coupled with a highly levered capital structure. Ratings could be downgraded should NBTY's operating performance fail to improve from its current levels such that debt to EBITDA remains above 6.5 times over the next twelve months or should EBITA to interest expense fall below 1.5 times. In addition, ratings could be downgraded should liquidity falter or the company make a sizable debt financed acquisition or material shareholder friendly activity. Ratings could be upgraded should NBTY's operating performance improve such that NBTY will be able to maintain debt to EBITDA below 5.25 times. In addition, an upgrade would require the company to maintain good liquidity and financial policies that would support this level of leverage. The degree of any ratings improvement, however, is constrained by the company's relatively small scale, the potential for volatility given its focus on the VMNS industry, and its aggressive financial policies. The principal methodology used in these ratings was Global Packaged Goods published in June 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NBTY, Inc., headquartered in Ronkonkoma, NY, is a leading global vertically-integrated manufacturer, marketer, and retailer of vitamin, mineral, and nutritional supplements ("VMNS") in the United States and throughout the world. The company operates approximately 1,400 stores in the US (Vitamin World) and Europe (Holland & Barrett, GNC, De Tuinen, Nature's Way). It also is a wholesale supplier of private label and branded VMNS products, such as Nature's Bounty, Met-Rx, and Ester-C, to major retailers in the US. Revenues are about $3.2 billion. NBTY is a subsidiary of Alphabet Holding Company, Inc. who is owned by The Carlyle Group. ALSIP ACQUISITION: US Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. Trustee for Region 3 appointed three creditors of Alsip Acquisition LLC to serve on the official committee of unsecured creditors: (1) GDF Suez Energy Resources, NA, Inc. Attn: Ray Cunningham 1990 Post Oak Blvd. #1900, Houston, TX 77056 Phone: 713-636-1980 Fax: 713-636-1601 (2) ES Express Lines, Inc. Attn: David Apanavicius 13555 Main St. Lemont, IL 60439 Phone: 312-404-7829 Fax: 708-895-1101 (3) Mid America Paper Recycling Co., Inc. Attn: Don Gaines 3865 West 41st St. Chicago, IL 60632 Phone: 773-890-5454 Fax: 773-890-5757 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Alsip Acquisition Alsip Acquisition, LLC and APCA, LLC were the leading North American provider of responsibly made recycled paper for books and magazines, as well as for commercial printing and packaging applications. The operational and manufacturing headquarters are located in Alsip, Illinois, and consist of a 40-year-old mill and a leased warehouse in Alsip, Illinois. The mill and warehouse were idled in September 2014 following cash losses. Most of Alsip's stock is owned by FutureMark Holdings, LLC. On Nov. 20, 2014, Alsip Acquisition and APCA each filed petitions seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Judge Kevin J. Carey (KJC). The cases have been jointly administered, with pleadings maintained on the case docket for Case No. 14-12596. The Debtors have tapped Mintz Levin Cohn Ferris Glovsky and Popeo PC as counsel and Pachulski Stang Ziehl & Jones as co-counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. As of Oct. 31, 2014, the Debtors had approximately $7,742,972 of funded indebtedness and related obligations outstanding. The goal of the Debtors is to consummate the sale of the assets to Resolute FP Illinois LLC pursuant to an asset purchase agreement or another bidder pursuant to the bid procedures. In addition, the Debtors intend to vacate their leased locations in Connecticut and New Jersey, liquidate their other assets, and distribute any proceeds pursuant to the claims process established by the Bankruptcy Code. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for Dec. 15, 2014 at 1:00 p.m. prevailing Eastern time. A copy of the affidavit in support of the first-day motions is available for free at: http://bankrupt.com/misc/Alsip_1st_Day_Affidavit.pdf AMERICAN APPAREL: Lion/Hollywood Appoints Gene Montesano to Board ----------------------------------------------------------------- Lion/Hollywood designated Gene Montesano to be a director of American Apparel, Inc., pursuant to its rights under an Investment Agreement, according to a regulatory filing with the U.S. Securities and Exchange Commission. Lion/Hollywood L.L.C. and its affiliates beneficially owned 24,511,022.66 shares of common stock of American Apparel representing 12.3 percent of the shares outstanding at Dec. 8, 2014. A copy of the regulatory filing is available for free at: http://is.gd/0VFZAi About American Apparel American Apparel is a vertically-integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of Sept. 30, 2014, American Apparel had approximately 10,000 employees and operated 245 retail stores in 20 countries including the United States and Canada. American Apparel also operates a global e-commerce site that serves over 60 countries worldwide at http://www.americanapparel.com. In addition, American Apparel operates a leading wholesale business that supplies high quality T-shirts and other casual wear to distributors and screen printers. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. American Apparel has been in the red as far back as 2010. The Company reported a net loss of $106.29 million on $633.94 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $37.27 million on $617.31 million of net sales for the year ended Dec. 31, 2012. American Apparel posted a net loss of $39.31 million on $547.33 million of net sales for the year ended Dec. 31, 2011, compared with a net loss of $86.31 million on $532.98 million of net sales during 2010. In 2011, American Apparel announced a restatement of its 2009 financial reports. The Company's balance sheet at Sept. 30, 2014, the Company had $307.18 million in total assets, $394.78 million in total liabilities and a $87.59 million total stockholders' deficit. * * * The TCR reported on Nov. 21, 2013, that Moody's Investors Service downgraded American Apparel Inc.'s corporate family rating to Caa2. The clothing retailer's probability of default was also lowered one level and the outlook is negative. As reported by the TCR on Sept. 2, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Los Angeles-based American Apparel Inc. to 'CCC-' from 'CCC'. The outlook is negative. "The downgrade reflects our assessment that a debt restructuring appears inevitable within six months, absent unanticipated significantly favorable changes in the company's circumstances," said Standard & Poor's credit analyst Ryan Ghose. AMERICAN LASER: Chapter 7 Petition Filed ---------------------------------------- BankruptcyData reported that privately-held American Laser Skincare (pka American Laser Centers and Bellus ALC Acquisition) and 30 affiliated Debtors filed for Chapter 7 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 14-12685. According to the report, the Company, which provides laser hair removal and skin-care services, is represented by Robert S. Brady, Esq. -- rbrady@ycst.com -- of Young, Conaway, Stargatt & Taylor. The Company made a previous Chapter 11 filing in December 2011. That case was converted to a Chapter 7 in November 2012 after the Company was acquired by Versa Capital Management. A current announcement on its corporate Website states, "We are sorry to announce that all of our clinics have been closed. We too are disappointed in the sudden developments and regret the impact that it is having on our loyal clients, valued employees and business partners." This Chapter 7 petition indicates total assets less than $50,000. ANDREWS SQUARE: Case Summary & 7 Unsecured Creditors ---------------------------------------------------- Debtor: Andrews Square Associates, Inc. 150 S. Andrews Avenue, Suite 310 Pompano Beach, FL 33069 Case No.: 14-36969 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Hon. John K Olson Debtor's Counsel: Patrick S. Scott, Esq. GRAYROBINSON, P.A. 401 E Las Olas Blvd #1850 Fort Lauderdale, FL 33301 Tel: 954.761.8111 Fax: 954.761.8112 Email: patrick.scott@gray-robinson.com Total Assets: $4.88 million Total Liabilities: $3.11 million The petition was signed by Robert Bernstein, president. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb14-36969.pdf ANIXTER INT'L: Fitch Affirms 'BB+' IDR; Outlook Stable ------------------------------------------------------ Fitch Ratings has affirmed the ratings, including the Long-term Issuer Default Rating (IDR) for Anixter International, Inc. (Anixter) and its wholly owned operating subsidiary, Anixter Inc., at 'BB+'. The ratings affect $1.55 billion of total rated debt, including the revolving credit facility (RCF). The Rating Outlook is Stable. KEY RATINGS DRIVERS The ratings and Outlook reflect Fitch's expectations for stable operating performance through the intermediate-term. Fitch expects low- to mid-single digit organic revenue growth, excluding the Tri-Ed acquisition, in 2015 as Anixter benefits from improving macro trends in North America, including IT spending growth, increasing industrial projects, and growing heavy duty truck production. Fitch expects stable profitability and forecasts near-term operating EBITDA margin of approximately 6%. Anixter's cost reduction plan may lead to higher profitability but this improvement could be offset by faster long-term growth rates of the lower margin Enterprise Cabling & Security Solutions (ECS) business. Significant swings in copper prices and the US dollar may also impact EBITDA margin. Fitch's expectation of solid operating results will result in more than $200 million of annual FCF over the intermediate turn. The company's countercyclical inventory supports FCF during a downturn. Use of FCF gives the company the opportunity to reduce leverage; however, the potential for special dividends or incremental debt financed acquisitions may limit deleveraging. Post-acquisition credit protection is weak for Anixter's rating which reduces the company's ability to withstand market share erosion and/or margin pressure. Anixter's debt financed acquisition of Tri-Ed has pushed adjusted leverage (total debt adjusted for rent expense to operating EBITDAR) to a Fitch estimated 3.9 times (x) for the latest 12 months (LTM) ended Oct. 3, 2014. Over the longer-term, Fitch anticipates adjusted leverage below 4x. Fitch estimates pro forma interest coverage (operating EBITDA to gross interest expense) was approximately 8x for the LTM period and will remain near 8x over the intermediate-term. Anixter's ratings and Outlook are supported by: -- Leading market position in niche distribution markets which Fitch believes contributes to Anixter's above-average margins for a distributor; -- Broad diversification of products, suppliers, customers and geographies which adds stability to the company's financial profile by reducing operating volatility; -- Counter-cyclical inventory that allows the company to generate free cash flow in a downturn. Credit concerns include: -- Expectations that credit protection measures could remain weak from additional debt-financed acquisitions to augment growth in adjacent markets or the use of FCF for shareholder returns rather than debt reduction; -- Thin operating margins characteristic of the distribution industry, which amplifies movement in credit protection measures through the IT cycle; -- Significant unhedged exposure to copper prices and currency prices. RATINGS SENSITIVITIES Negative rating actions could occur if Anixter sustains adjusted leverage (Total Debt plus 8x annual rent expense to EBITDAR) above 4x likely from a combination of: -- Market share losses or profit margin contraction, potentially from a lower sales mix; -- Incremental debt financed acquisitions; or -- Use of FCF for special dividends or other shareholder returns instead of debt reduction. Fitch believes positive rating actions are limited in the absence of management's commitment to more conservative financial policies, including a meaningfully lower adjusted leverage target and more moderate and predictable shareholder returns. Fitch believes Anixter's liquidity was adequate and consisted of the following as of Oct. 3, 2014: -- $82 million of cash and cash equivalents; -- $400 million revolving credit facility expiring Nov. 2018, of which $121 million was available primarily due to leverage covenant restrictions; -- $300 million on-balance-sheet accounts receivable securitization program expiring May 2017, of which $225 million was available. Total debt as of October 3, 2014 was $1.2 billion and consisted primarily of: -- $13 million outstanding under the unsecured revolver due Nov. 2018; -- $75 million outstanding under the accounts receivable securitization program due May 2017; -- $200 million of unsecured term loan A due November 2018 -- $200 million in 5.95% senior unsecured notes due March 2015; -- $350 million 5.625% senior unsecured notes due May 2019 -- $400 million 5.125% senior unsecured notes due October 2021 -- $4 million of other debt. Fitch has affirmed these ratings: Anixter International, Inc. -- Issuer Default Rating (IDR) at 'BB+'; Anixter Inc. -- IDR at 'BB+'; -- Senior unsecured notes at 'BB+'; -- Senior unsecured bank credit facility at 'BB+'. The Rating Outlook is Stable. ARCTIC GLACIER: Private-Equity Firm Seeks Buyers ------------------------------------------------ Ben Dummett, writing for The Wall Street Journal, citing people familiar with the matter, reported that H.I.G. Capital LLC is seeking buyers for Arctic Glacier Holdings Inc., a packaged-ice maker it acquired from bankruptcy in 2012 for $434.5 million. According to the report, further citing the person, Miami-based H.I.G. Capital has hired Piper Jaffray Cos. to help run the sale process, which is in the early stages, and could ask around $600 million for the business. About Arctic Glacier Winnipeg, Canada-based Arctic Glacier Inc., et al., manufacture packaged ice for distribution in Canada and the United States. Philip J. Reynolds of Alvarez & Marsal Canada Inc., as monitor and foreign representative, filed Chapter 15 petitions for Arctic Glacier, et al. (Bankr. D. Del. Lead Case No. 12-10603) on Feb. 22, 2012. Bankruptcy Judge Kevin Gross presides over the case. Mr. Reynolds is represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP. The Debtors is estimated to have assets and debts at $100 million to $500 million. ARMSTRONG WORLD: DLW Unit Files for Insolvency in Germany --------------------------------------------------------- Armstrong World Industries, Inc. on Dec. 11 disclosed that, following a review of strategic alternatives, it has decided to exit its European flooring business and cease further funding of its DLW subsidiary effective immediately. As a result of this decision, local DLW management filed for insolvency in Germany. "Our difficult, but necessary, decision to exit the European flooring business and discontinue funding our DLW subsidiary in Germany was the culmination of a comprehensive evaluation of strategic alternatives following years of disappointing results, multiple restructuring initiatives and significant financial investments," said Armstrong CEO, Matthew J. Espe. DLW management concluded that its operations could not be financed and sustained without funding from its Armstrong parent and, as a result, filed for insolvency under applicable German law. Armstrong expects all operations at the two DLW manufacturing plants in Germany, as well as at the DLW administrative offices across Europe, to continue in the normal course for the near term. A preliminary insolvency administrator in Germany will be appointed by the local court. As a result of the insolvency filing and Armstrong's loss of control of the DLW operations, Armstrong will classify the results of the European flooring business as discontinued operations starting in the fourth quarter of 2014. The following provides a summary of the operating results of the European flooring business for the nine-month period ended September 30, 2014 (previously shown as part of the Resilient Flooring reporting segment). Net sales $144.7 million Operating loss ($23.2) million In addition, the carrying value of assets was $152.0 million as of September 30, 2014, including property, plant & equipment of $73.4 million and inventory of $57.1 million. The carrying value of liabilities was $171.3 million as of September 30, 2014, including an unfunded pension liability of $126.5 million. Armstrong acquired DLW in 1998 to establish a stronghold and serve as a catalyst for the development of its European flooring business. DLW subsequently struggled with declining market conditions as a result of the ongoing economic crisis, including a significant decrease in public funding, which particularly affected the business's key commercial segments, notably hospitals and schools. These developments contributed to intensified price pressure and overcapacities within the whole European flooring industry, further weakening DLW's competitive position. "Despite investing approximately $150 million in the business since 2007, DLW has been unable to generate profit or achieve its strategic plans. These results, and our ultimate decision, however, in no way reflect the dedication, effort and commitment of DLW employees over the years, for which we remain grateful," Mr. Espe continued. About Armstrong Armstrong World Industries, Inc. is a global leader in the design and manufacture of floors and ceilings. In 2013, Armstrong's consolidated net sales totaled approximately $2.7 billion. As of September 30, 2014, Armstrong operated 34 plants in eight countries and had approximately 8,600 employees worldwide. BAKERCORP INT'L: Moody's Lowers Corp. Family Rating to Caa1 ----------------------------------------------------------- Moody's Investors Service downgraded BakerCorp. International, Inc.'s Corporate Family Rating ("CFR") to Caa1 from B3 and its Probability of Default Rating to Caa1-PD from B3-PD. Moody's affirmed BakerCorp's speculative grade liquidity rating at SGL-3. The company's secured credit facilities were downgraded to B2 from B1 and the rating on its senior notes were downgraded to Caa3 from Caa2. The rating outlook is stable. Moody's took the following rating actions on BakerCorp International, Inc.: Ratings downgraded: Corporate Family Rating, to Caa1 from B3; Probability of Default Rating, to Caa1-PD from B3-PD; Senior Secured Bank Credit Facility (Term Loan) due 2020, to B2 (LGD-3) from B1 (LGD-2); Senior Secured Bank Credit Facility (Revolver) due 2018, to B2 (LGD-3) from B1 (LGD-2); Senior Unsecured Regular Bond/Debenture due 2019, to Caa3 (LGD-5) from Caa2 (LGD-5). Ratings affirmed: Speculative Grade Liquidity Rating, at SGL-3. The rating outlook is stable. Ratings Rationale The ratings downgrade reflects Moody's expectation that BakerCorp's leverage will remain high at over 7 times, on a Moody's adjusted basis, and the company's low free cash flow generation will hinder its ability to de-lever. Moreover, some of the company's end markets may be affected by a reduction in new projects caused by the decline in oil prices. Market segments that may see improved demand from lower oil prices such as refineries, pipeline, and construction are not expected to fully offset pressure on end markets. The Caa1 CFR reflects the company's high leverage, weak business fundamentals and cash flow, and operating pressure associated with the sharp drop in oil prices. Moody's believes that it is hard to gain a sustainable competitive advantage in the liquid solid containment business (tank and related rentals). The market has limited price elasticity of demand as decreases in price do not stimulate incremental demand if the need for liquid and solid containment solutions is not present. Given the high cost to relocate tanks and their commodity like nature, it is difficult to gain market share if a competitor already has a tank closer to a customer. Moody's believes that the company's weak balance sheet limits its ability to add new services to better differentiate itself and reduce the level of commodity pricing. The stable rating outlook reflects the belief that the company should be able to sustain slightly positive cash flow in 2015. Moody's considers Baker to have an adequate liquidity position even though upcoming covenant step-ups could limit revolver access to 25% of the $45M available. Moreover, the company does not typically hold a large cash balance. BakerCorp had $13 million cash balance (as of 7/31/14). The rating could be downgraded if the company's liquidity deteriorated or if utilization rates weaken meaningfully. A further decline in the company's EBITDA margins could also cause downward rating pressure. A reduction in EBITDA of over 10% could also cause downward rating pressure. The rating is not anticipated to be upgraded over the intermediate term. However, Moody's would consider an upgrade if the company's operating outlook and liquidity position improves, if debt to EBITDA was to decline to below 6x on a Moody's adjusted basis, and the company's EBITDA margins showed a sustainable improvement. The principal methodology used in this rating was the Global Equipment and Automobile Rental Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. BakerCorp International, Inc., headquartered in Plano, Texas, is a provider of liquid and solid containment solutions. The majority of its revenues come from the rental of equipment with the balance from services and equipment sales. As of July 31, 2014, the company had a fleet of more than 25,000 units. The company is controlled by funds advised by Permira Advisors L.L.C. which acquired it in June 2011. Revenues for the LTM period ended July 31, 2014 were $320 million. BANK OF THE CAROLINAS: Stockholders Elected 9 Directors ------------------------------------------------------- Bank of the Carolinas Corporation held its annual meeting of shareholders on Dec. 4, 2014, at which the shareholders: (1) elected Derek J. Ferber, Harvey L. Glick, Henry H. Land, Grady L. McClamrock, Jr., Sam D. Norton, John D. Russ, Lynne Scott Safrit, Anton V. Schutz, and Stephen R. Talbert as directors; (2) ratified a resolution endorsing and approving compensation paid or provided to the Company's named executive officers and the Company's executive compensation policies and practices; (3) ratified a resolution that future advisory votes on executive compensation will be conducted every three years; (4) granted the Company's board of directors discretionary authority to amend the Company's articles of incorporation to effect a 1-for-100 reverse stock split; (5) approved the Company's 2014 Omnibus Stock Incentive Plan; (6) approved the Company's Tax Benefits Preservation Plan; and (7) ratified the appointment of Cherry Bekaert LLP as the Company's independent accountants for 2014. On Dec. 4, 2014, the following individuals retired from their positions as directors of Bank of the Carolinas Corporation and its wholly owned subsidiary, Bank of the Carolinas: Jerry W. Anderson, Alan M. Bailey, John A. Drye, John W. Googe, and Francis W. Slate. About Bank of the Carolinas Mocksville, North Carolina-based Bank of the Carolinas Corporation was formed in 2006 to serve as a holding company for Bank of the Carolinas. The Bank's primary market area is in the Piedmont region of North Carolina. Turlington and Company, LLP, in Lexington, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has suffered recurring credit losses that have eroded certain regulatory capital ratios. As of Dec. 31, 2013, the Company is considered undercapitalized based on their regulatory capital level. This raises substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss available to common stockholders of $2.33 million in 2013, a net loss available to common stockholders of $5.53 million in 2012 and a net loss available to common stockholders of $29.18 million in 2011. The Company's balance sheet at Sept. 30, 2014, showed $396.27 million in total assets, $350.08 million in total liabilities and $46.19 million in total stockholders' equity. BERNARD L. MADOFF: Inner Circle Faces Reckoning as Prison Looms --------------------------------------------------------------- Erik Larson, writing for Bloomberg News, reported that Bernard Madoff's inner circle got millions of dollars in pay and perks by aiding the con man's $17.5 billion fraud, dooming thousands of investors in the largest Ponzi scheme in U.S. history. According to the report, five former Madoff colleagues face sentencing beginning Dec. 8 for using a web of fake account documents, phony regulatory filings and bogus computer programs to keep the scheme afloat for decades. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has commenced distributions to victims, with the fourth and latest batch of distributions done in May 2014. Distributions to eligible claimants have totaled almost $6 billion, which includes $812.2 million in committed advances from the SIPC. More than 1,100 victims have already recovered the full principal they lost in the fraud. As of May 2014, Mr. Picard has recovered or reached agreements to recover $9.8 billion since his appointment in December 2008. BERRY & BERRY: Amended Plan Doesn't Comply With Sec. 1129(a)(8) --------------------------------------------------------------- Judge Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida ruled that Berry & Berry Wings, LLC's Second Amended Plan of Reorganization complies with the requirements of Section 1129(a) of the Bankruptcy Code, with the exception of Section 1129(a)(8). Section 1129(a)(8) requires the acceptance of a Chapter 11 plan by each impaired class. Notwithstanding the rejection of the plan by an impaired class, the Court may confirm the plan if the plan "does not discriminate unfairly, and is fair and equitable," with respect to each non-accepting impaired class. First Insurance Funding Corp. is impaired and has not accepted the Plan. However, by order dated October 17, 2014, the Court found that the treatment of Class 3 meets the requirements of Section 1129(b). Classes 1 and 4 are impaired and have not accepted the Plan. Accordingly, the Court concludes that the Plan does not comply with Section 1129(a)(8). The Debtor initially rented the building where the business operates. However, because of high rent, the Debtor purchased the building in May 2012. The Debtor obtained the financing for the purchase of the Real Property through a United States Small Business Administration program. Orange Bank of Florida holds a first mortgage on the Real Property and a first priority lien on the Debtor's personal property. The SBA holds a second mortgage on the Real Property and a second priority lien on the Debtor's personal property. Orange Bank of Florida appeared at the confirmation hearing and objected to the Second Amended Plan. The Second Amended Plan consists of these classes of claims: * Class 1 - Orange Bank; * Class 2 - the SBA; * Class 3 - First Insurance Funding Corp.; * Class 4 - General Unsecured Claims; and * Class 5 - Equity Interests The Second Amended Plan also includes these unclassified priority claims: secured claims 4 and 5 of the Citrus County Tax Collector and secured claim 3-2 of the IRS. The Second Amended Plan anticipates administrative claims for legal fees in the amount of $20,000 and accounting fees in the amount of $2,000, as well as United States Trustee fees. The Second Amended Plan provides that the administrative expense claims will be paid in full on or before the effective date of the plan in cash or upon the terms as may be agreed upon by the Debtor and the holder of the claim. The Debtor's attorney has agreed to defer payment of his fees. The Second Amended Plan proposes to pay $2,900 per month to Orange Bank, $760 per month to the SBA, and $1,000 per month to the unclassified priority claimants for a total of $4,660 monthly. The Second Amended Plan proposes to pay unsecured creditors $1,000 per month for 36 months beginning on the 47th month of the plan. A full-text copy of the Findings of Fact and Conclusions of Law dated November 26, 2014, is available at http://bit.ly/1G6ctUU from Leagle.com. About Berry & Berry Berry & Berry Wings, LLC sought Chapter 11 bankruptcy protection in (Bankr. M.D. Fla. Case No. 3:13-BK-5792-JAF) on September 25, 2013. The Debtor was formed as a limited liability company in 2006 and has operated as a Beef 'O' Brady's Family Sports Pub franchise since that date. The Debtor was originally a partnership consisting of Tamara Berry, her husband, and his parents, although Mrs. Berry always held a majority ownership interest. As a result of several changes in ownership interests, Mrs. Berry is the sole owner of the equity interest in the Debtor. CAESARS ENTERTAINMENT: Reaches Tentative Deal for Largest Unit -------------------------------------------------------------- Matt Jarzemsky and Matt Wirz, writing for The Wall Street Journal, citing people familiar with the matter, reported that Caesars Entertainment Corp. has reached a tentative deal with senior bondholders on a debt-restructuring plan for its largest unit. According to the report, the agreement moves Caesars closer to winning enough creditor support for a plan that would put the unit, Caesars Entertainment Operating Co., into bankruptcy protection early next year and convert it into a real-estate investment trust. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. Caesars Entertainment reported a net loss of $2.93 billion in 2013, as compared with a net loss of $1.50 billion in 2012. The Company's balance sheet at Sept. 30, 2014, showed $24.5 billion in total assets, $28.20 billion in total liabilities and a $3.71 billion total deficit. * * * In the April 10, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiaries, Caesars Entertainment Operating Co. (CEOC) and Caesars Entertainment Resort Properties (CERP), as well as the indirectly majority-owned Chester Downs and Marina, to 'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that Caesars' capital structure is unsustainable, and the amount of cash the company will burn in 2014 and 2015 creates conditions under which S&P believes a restructuring of some form is increasingly likely over the near term absent an unanticipated significantly favorable change in operating performance. As reported by the TCR on May 1, 2014, Fitch Ratings had downgraded the Issuer Default Ratings (IDRs) of Caesars Entertainment Corp (CEC) and Caesars Entertainment Operating Company (CEOC) to 'CC' from 'CCC'. In May 2014, Moody's Investors Service affirmed the Caa3 corporate family rating and Caa3-PD probability of default ratings. The negative rating outlook reflects Moody's view that CEOC will pursue a debt restructuring in the next year. Ratings could be lowered if CEOC does not take steps to address it unsustainable capital structure. Ratings improvement is not expected unless there is a significant reduction in CEOC's $18 billion debt load. CAESARS ENTERTAINMENT: Elliott to Buy Swaps Amid Bankruptcy Talks ----------------------------------------------------------------- Laura J. Keller, writing for Bloomberg News, citing two people with knowledge of the trading, reported that Elliott Management Corp. has been adding to derivatives trades that would pay off if Caesars Entertainment Corp. defaults as the hedge fund helps orchestrate a bankruptcy plan for the casino operator's biggest unit. According to the report, further citing the people who asked not to be named because the trades are private, the hedge fund run by billionaire Paul Singer, one of Caesars's biggest bondholders, bought credit-default swaps before entering negotiations with Caesars in September and has continued to purchase the derivatives. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. Caesars Entertainment reported a net loss of $2.93 billion in 2013, as compared with a net loss of $1.50 billion in 2012. The Company's balance sheet at Sept. 30, 2014, showed $24.5 billion in total assets, $28.20 billion in total liabilities and a $3.71 billion total deficit. * * * In the April 10, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiaries, Caesars Entertainment Operating Co. (CEOC) and Caesars Entertainment Resort Properties (CERP), as well as the indirectly majority-owned Chester Downs and Marina, to 'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that Caesars' capital structure is unsustainable, and the amount of cash the company will burn in 2014 and 2015 creates conditions under which S&P believes a restructuring of some form is increasingly likely over the near term absent an unanticipated significantly favorable change in operating performance. As reported by the TCR on May 1, 2014, Fitch Ratings had downgraded the Issuer Default Ratings (IDRs) of Caesars Entertainment Corp (CEC) and Caesars Entertainment Operating Company (CEOC) to 'CC' from 'CCC'. In May 2014, Moody's Investors Service affirmed the Caa3 corporate family rating and Caa3-PD probability of default ratings. The negative rating outlook reflects Moody's view that CEOC will pursue a debt restructuring in the next year. Ratings could be lowered if CEOC does not take steps to address it unsustainable capital structure. Ratings improvement is not expected unless there is a significant reduction in CEOC's $18 billion debt load. CHRYSLER GROUP: Wins Reversal on $50M Ch. 11 Tax Dispute -------------------------------------------------------- Law360 reported that U.S. District Judge Jesse M. Furman in New York has reinstated Chrysler Group LLC's attempt to claw back more than $50 million that three Midwestern states have collected in unemployment insurance taxes that the carmaker says it was freed from by virtue of its 2009 trip through Chapter 11. According to the report, Judge Furman determined in a Dec. 1 order that a Chapter 11 court has the jurisdictional power to entertain Chrysler's request to invoke a 2009 order that allowed it to leave behind certain pre-bankruptcy liabilities and emerge from bankruptcy. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. CLINE MINING: Seeks U.S. Recognition of CCAA Case ------------------------------------------------- Cline Mining Corporation, which is undergoing reorganization in Canada, is asking the U.S. Bankruptcy Court in Denver, Colorado, enter an order (i) recognizing its Canadian proceeding as a "foreign main proceeding" under Section 1517 of the Bankruptcy Code and (ii) giving full force and effect in the United States to the initial order of the Ontario Court dated Dec. 3, 2014. FTI Consulting Canada Inc., the monitor appointed by the Ontario Court, explained in a court filing that the Cline Group is currently unable to meet its financial commitments as they come due, and has not been capable of making interest payments on its secured debt since 2011. Moreover, according to FTI, based on extensive but unsuccessful prepetition marketing efforts, it appears that the fair value of the Cline Group is likely to be materially less than amounts owed in respect of its first-priority secured debt, which comprises approximately $100 million in secured notes, including accrued interest and premiums, issued by Cline, guaranteed by New Elk and North Central, and secured by substantially all of the Cline Debtors' real and personal property. The Secured Notes matured on June 15, 2014, and Marret Asset Management Inc., on behalf of beneficial holders of the Secured Notes, has confirmed that the holders of the Secured Notes gave instructions to the trustee to accelerate the Secured Notes on Dec. 2, 2014, and all amounts owing thereunder are due and payable. The Secured Notes remain unpaid, and the Cline Debtors do not have the ability to repay them. In addition, Cline and New Elk are currently defendants in a class action lawsuit captioned Gerard, Jr. et al v. New Elk Coal Company, LLC et al, 1:13-cv-00277-RMKMT (D. Colo.) pending in the United States District Court for the District of Colorado, and the Cline Group is aware of a number of other contingent litigation claims that have been asserted against it. The total presently-quantifiable amount claimed by the plaintiffs in the claims other than the WARN Act Class Action is less than $1 million, while the WARN Act Plaintiffs have not particularized the amounts alleged to be owing in the WARN Act Class Action.13 Further, at least one creditor of the Cline Group has already obtained a Writ of Garnishment against New Elk. The case is, SNF Holding Company, d/b/a FloMin Coal Inc. v. New Elk Coal Company LLC, Case Number 2013CV30112, pending in the District Court for Las Animas County, Colorado. Further, the Cline Debtors are party to a number of leases and executory contracts with events of default triggered by bankruptcy filings or other acts of insolvency. There is a substantial risk that the counterparties to such agreements will exercise contractual termination or other rights upon either the commencement of the Canadian Proceeding or the filing of the Chapter 11 cases. On Dec. 3, 2014, the Cline Debtors commenced the Canadian Proceeding by filing an application under the CCAA with the Ontario Court. The principal purpose of the Canadian Proceeding is to facilitate a consensual recapitalization of the Cline Group negotiated with Marret. On Dec. 3, 2014, the Ontario Court entered the Initial Order, which among other things, (i) authorized the Cline Debtors to continue managing and operating their property, including the pre-existing cash management system; (ii) appointed the Monitor; (ii) stayed all proceedings against the Cline Debtors and the Monitor as well as certain proceedings against former, current, or future directors and officers of the Cline Debtors, without the written consent of the Cline Debtors and the Monitor or the leave of the Ontario Court, through December 31, 2014; (iii) authorized the Cline Debtors to file the Plan; (iv) prevented parties from altering or terminating agreements with the Cline Debtors; (v) authorized the Cline Debtors to restructure their business by downsizing or shutting down operations, selling assets, terminating employees or repudiating leases, with the consequences thereof dealt with in a plan of arrangement or compromise or on further order of the Ontario Court; and (vi) authorized Marret to take actions in the proceedings in relation to the Secured Notes. By this Motion, the Monitor seeks the entry of: (a) on an ex parte basis, an order to show cause with a temporary restraining order: (i) enjoining all persons and entities from seizing and enforcing liens against the assets of any member of the Cline Debtors in the U.S.; and (ii) staying any and all actions or proceedings against the Cline Debtors; (b) after notice and hearing, a preliminary injunction until such time as this Court enters an order disposing of the Chapter 15 Petitions. About Cline Mining Cline Mining Corporation, New Elk Coal Company LLC, and North Central Energy Company are in the business of locating, exploring and developing mineral resource properties, with a focus on gold, metallurgical coal, and iron ore. The Cline Group holds interests in mineral rights and resource developments in Canada, the United States and Madagascar, comprising a number of developmental stage properties and a metallurgical coal mine in Colorado (the "New Elk Mine"). Cline -- http://www.clinemining.com/-- has facilities in both Canada and the United States, with its headquarters and head office in Toronto, Ontario. On Dec. 3, 2014, Cline Mining, et al., commenced a proceeding by filing an application under the CCAA with the Ontario Superior Court of Justice, Commercial List. The Ontario Court appointed FTI Consulting Canada Inc. as monitor. Cline Mining, et al., sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Col. Lead Case No. 14-26132) in Denver, Colorado, on Dec. 3, 2014, to seek recognition of the CCAA proceedings. The U.S. cases are assigned to Judge Elizabeth E. Brown. Jonathan Cho, Esq., at Allen & Overy, serves as counsel in the U.S. cases. As at Aug. 31, 2014, the Cline Group had assets with a book value of $137.7 million and total liabilities of $87 million. CLINE MINING: Terms of Proposed Recapitalization Plan ----------------------------------------------------- Cline Mining Corporation, which has commenced CCAA proceedings in Ontario, Canada, negotiated a consensual recapitalization with holders of secured notes led by Marret Asset Management Inc. As at August 31, 2014, the date of the Cline Group's most recent consolidated financial statements, the total liabilities of the Cline Group amounted to $87 million. The primary obligations of the Cline Group are represented by secured notes issued by Cline pursuant to (i) an Ontario-law governed indenture dated as of December 13, 2011, and (ii) an Ontario-law governed indenture dated July 8, 2013. All of the Secured Notes are held by beneficial owners whose investments are managed by Marret. As at August 31, 2014, the principal amount outstanding under the 2011 and 2013 Notes was $71,381,900 and $10,890,931 respectively, plus accrued and unpaid interest and other amounts. The salient terms of the Cline Group's reorganization plan are: -- the Secured Noteholders' claim in respect of the Secured Notes will be separated into (i) a secured portion (the "Secured Note Claim") and (ii) an unsecured deficiency claim at an allowed amount of C$17,500,000 (the "Unsecured Note Claim"), reflecting the fact that the amounts owing under the Secured Notes exceed the realizable value of the Cline Debtors; -- the Secured Note Claim will be compromised, released, and discharged in exchange for new Cline common shares representing 100% of the equity in Cline, and new indebtedness in favor of the Secured Noteholders evidenced by a credit agreement with a term of seven years in the principal amount of C$55,000,000 bearing interest at 0.01% per annum plus an additional variable interest payable only once the Cline Debtors have achieved certain operating revenue targets; -- unsecured claims, including the Unsecured Note Claim, will be compromised, released, and discharged under the Plan in exchange for their pro rata share of an unsecured, subordinated, non- interest bearing entitlement to C$225,000 payable by Cline eight years from the date the Plan is implemented (the "Unsecured Plan Entitlement"); -- notwithstanding the Unsecured Note Claim, the Secured Noteholders will waive their entitlement to the proceeds of the Unsecured Plan Entitlement, and all such proceeds will be available for distribution in respect of other unsecured creditors with valid claims who are entitled to the Unsecured Plan Entitlement; -- unless otherwise indicated, unsecured creditors with valid unsecured claims of up to C$10,000 will be paid in cash for the full value of their claims and will be deemed to vote in favor of the Plan in lieu of a pro rata share of the Unsecured Plan Entitlement, such cash payment will not apply to any Secured Noteholder with respect to its Unsecured Note Claim, and for greater certainty, will not apply to the WARN Act Plaintiffs; -- claims arising from the WARN Act Class Action will be compromised, released, and discharged in exchange for an unsecured, -- subordinated, non-interest bearing entitlement to C$100,000 payable by Cline eight years from the date the Plan is implemented; -- certain claims against the Cline Debtors, including claims covered by insurance, certain prior-ranking secured claims of equipment providers, and the secured claim of Bank of Montreal in respect of corporate credit card payables, will remain unaffected by the Plan; -- equity interests in Cline will be extinguished for no consideration; and -- existing equity interests in other members of the Cline Group will remain unchanged, such that New Elk will continue to be a wholly owned subsidiary of Cline and North Central will continue to be a wholly-owned subsidiary of New Elk. The net effect of the Plan would be to reduce the Cline Debtors' total interest bearing debt by $48,537,500 and annual interest expense in the near term and provide a limited recovery to unsecured creditors, who would otherwise receive no recovery in a security enforcement or asset sale scenario. Cline and Marret have entered into a support agreement pursuant to which Marret has agreed to support the Plan. If the Plan is not approved by the requisite majorities of both the unsecured creditors class and the class of plaintiffs in the WARN Act Class Action, or the Cline Debtors determine that such approvals are not forthcoming, the Cline Debtors may withdraw the Plan and file an alternative plan providing, inter alia, that all unsecured claims and WARN Act claims against the Cline Debtors will be treated as unaffected claims, that the class of Secured Noteholders will be the only voting class, and that the assets of the Cline Debtors will be transferred to an entity designated by the Secured Noteholders in exchange for a release of the Secured Note Claim. On Dec. 3, 2014, the Ontario Court entered the Initial Order which among other things, (i) authorized the Cline Debtors to continue managing and operating their property, including the pre-existing cash management system; (ii) appointed the Monitor; (ii) stayed all proceedings against the Cline Debtors and the Monitor as well as certain proceedings against former, current, or future directors and officers of the Cline Debtors, without the written consent of the Cline Debtors and the Monitor or the leave of the Ontario Court, through Dec. 31, 2014; (iii) authorized the Cline Debtors to file the Plan; (iv) prevented parties from altering or terminating agreements with the Cline Debtors; (v) authorized the Cline Debtors to restructure their business by downsizing or shutting down operations, selling assets, terminating employees or repudiating leases, with the consequences thereof dealt with in a plan of compromise or arrangement or on further order of the Ontario Court; and (vi) authorized Marret to take actions in the proceedings in relation to the Secured Notes that would otherwise be taken by the Trustee. Further, in light of the Cline Debtors' precarious financial condition and the need to effectuate the Plan as quickly as possible, contemporaneously with the commencement of the Canadian Proceeding, the Cline Debtors filed motions for (i) the entry of an order to establish a procedure for the identification, submission and determination of claims proposed to be affected by the Plan and (ii) an order directing the Cline Debtors to file the Plan and convene meetings of affected creditors to vote to approve the Plan. Such motions were heard by the Ontario Court subject to, and after the entry of, the Initial Order. The Cline Debtors ask the U.S. Bankruptcy Court to enter an order enforcing the Ontario Orders in the United States pursuant to Sections 105(a), 1507, and 1521of the Bankruptcy Code. About Cline Mining Cline Mining Corporation, New Elk Coal Company LLC, and North Central Energy Company are in the business of locating, exploring and developing mineral resource properties, with a focus on gold, metallurgical coal, and iron ore. The Cline Group holds interests in mineral rights and resource developments in Canada, the United States and Madagascar, comprising a number of developmental stage properties and a metallurgical coal mine in Colorado (the "New Elk Mine"). Cline -- http://www.clinemining.com/-- has facilities in both Canada and the United States, with its headquarters and head office in Toronto, Ontario. On Dec. 3, 2014, Cline Mining, et al., commenced a proceeding by filing an application under the CCAA with the Ontario Superior Court of Justice, Commercial List. The Ontario Court appointed FTI Consulting Canada Inc. as monitor. Cline Mining, et al., sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Col. Lead Case No. 14-26132) in Denver, Colorado, on Dec. 3, 2014, to seek recognition of the CCAA proceedings. The U.S. cases are assigned to Judge Elizabeth E. Brown. Jonathan Cho, Esq., at Allen & Overy, serves as counsel in the U.S. cases. As at Aug. 31, 2014, the Cline Group had assets with a book value of $137.7 million and total liabilities of $87 million. CLINE MINING: Ontario Court Sets Jan. 13 as Claims Bar Date ----------------------------------------------------------- The Ontario Superior Court of Justice set Jan. 13, 2015, at 5:00 p.m. (Toronto Time) for creditors to file proofs of claim against Cline Mining Corporation and two of its affiliates. All claims must be filed with: FTI Consulting Inc. Attn: Pamela Luthra TD Waterhouse Tower 79 Wellington Street West Suite 2010, P.O. Box 104 Toronto, Ontario M5K 1G8 Tel: 1-855-398-7390 or 416-649-8099 Fax: 416-649-8101 Email: cline@fticonsulting.com CLINE MINING: Ontario Court Names FTI Consulting as CCAA Monitor ---------------------------------------------------------------- Pursuant to the initial order under the Companies' Creditors Arrangement Act from the Ontario Superior Court of Justice, FTI Consulting Canada Inc. was appointed as CCAA monitor for the cases of Cline Mining Corporation and two of its affiliates, New Elk Coal Company LLC and North Central Energy Company. The CCAA monitor can be reached at: FTI Consulting Canada Inc. TD Waterhouse Tower 79 Wellington Street West Suite 2010, P.O. Box 104 Toronto, Ontario M5K 1G8 Attention: Pamela Luthra Tel: 1-855-398-7390 or 416-649-8099 Fax: 416-649-8101 Email: cline@fticonsulting.com CLINE MINING: Canadian Creditors' Meeting Slated for January 21 --------------------------------------------------------------- A meeting of creditors of Cline Mining Corporation and two of its affiliates -- which creditors are entitled to vote on a plan of compromise and arrangement under the Companies Creditors' Arrangement Act -- will be held on these dates, time and location: Date: Jan. 21, 2015 Time: 10:00 a.m. - WARN Act Plaintiffs Claim 11:00 a.m. - Affected Unsecured Creditor Claim 12:00 p.m. - Secured Noteholders Class Location: Goodmans LLP 333 Bay Street, Suite 3400 Toronto, Ontario In the event the plan is approved at the meeting of creditors, Cline Mining said it will file on Jan. 28, 2015, seeking order sanctioning that plan. Objections, if any, to the plan must be filed 7 days before the sanction hearing no later than 5:00 p.m. (Toronto Time). CLINE MINING: TRO Issued; Injunction Hearing Today -------------------------------------------------- Judge Elizabeth Brown of the U.S. Bankruptcy Court for the District of Colorado granted the motion of FTI Consulting Canada Inc., as court-appointed monitor and foreign representative of Cline Mining Corporation, New Elk Coal Company LLC, and North Central Energy Company, for a show cause order with a temporary restraining order staying execution against the assets of the U.S. Debtors. A hearing on the Monitor's motion for a preliminary injunction extending the relief in the TRO until the disposition of the Chapter 15 Petitions will be held on Dec. 12, 2014, at 9:30 a.m. Pending the Hearing: (i) pursuant to Sections 1519(a)(1) and 105(a) of the U.S. Bankruptcy Code, all persons and entities are enjoined from seizing, attaching, possessing, executing and/or enforcing liens against the assets of any member of the Cline Debtors within the territorial jurisdiction of the United States; and (ii) pursuant to Sections 1519 and 105(a) of the U.S. Bankruptcy Code, Sections 362 and 365(e) of the U.S. Bankruptcy Code will apply in the Chapter 15 cases, thereby (a) staying any and all actions or proceedings against the Cline Debtors and their assets within the territorial jurisdiction of the United States and (b) enjoining all persons and entities from terminating or modifying any executory contracts or unexpired leases with any of the Cline Debtors, or terminating or modifying any rights or obligations under those contracts or leases, solely because of a condition of the kind described in Section 365(e)(1) of the U.S. Bankruptcy Code. About Cline Mining Cline Mining Corporation, together with Raton Basin Analytical LLC, a Colorado limited liability company of which New Elk is the sole member ("Cline Group") are in the business of locating, exploring and developing mineral resource properties, with a focus on gold and metallurgical coal. Cline Mining Corporation on Dec. 3 announced a proposed recapitalization transaction with these key elements: (1) A reduction of over $55 million in secured debt issued by Cline; (2) The compromise or arrangement of certain unsecured debts of Cline; and (3) A change of control of the equity of Cline. To implement the recapitalization, Cline Mining obtained an Order from the Ontario Superior Court of Justice (Commercial List) initiating proceedings under the Companies' Creditors Arrangement Act (the "CCAA"). FTI Consulting Canada Inc. is the court- appointed monitor and authorized foreign representative of the U.S. Debtors. FTI Consulting filed petitions for recognition of Cline Mining Corporation and its two affiliates' CCAA proceedings under Chapter 15 of the U.S. Bankruptcy Code on Dec. 3, 2014 (Bankr. D. Colo., Case No. 14-26132). The Chapter 15 Petitioner's counsel is Ken Coleman, Esq., and Jonathan Cho, Esq., at Allen & Overy LLP, in New York. CLINE MINING: Court Issues Joint Administration Order ----------------------------------------------------- Judge Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado issued an order joining the administration of the Chapter 15 cases of Cline Mining Corporation, New Elk Coal Company LLC, and North Central Energy Company under Case No. 14- 26132 (EEB). About Cline Mining Cline Mining Corporation, together with Raton Basin Analytical LLC, a Colorado limited liability company of which New Elk is the sole member ("Cline Group") are in the business of locating, exploring and developing mineral resource properties, with a focus on gold and metallurgical coal. Cline Mining Corporation on Dec. 3 announced a proposed recapitalization transaction with these key elements: (1) A reduction of over $55 million in secured debt issued by Cline; (2) The compromise or arrangement of certain unsecured debts of Cline; and (3) A change of control of the equity of Cline. To implement the recapitalization, Cline Mining obtained an Order from the Ontario Superior Court of Justice (Commercial List) initiating proceedings under the Companies' Creditors Arrangement Act (the "CCAA"). FTI Consulting Canada Inc. is the court- appointed monitor and authorized foreign representative of the U.S. Debtors. FTI Consulting filed petitions for recognition of Cline Mining Corporation and its two affiliates' CCAA proceedings under Chapter 15 of the U.S. Bankruptcy Code on Dec. 3, 2014 (Bankr. D. Colo., Case No. 14-26132). The Chapter 15 Petitioner's counsel is Ken Coleman, Esq., and Jonathan Cho, Esq., at Allen & Overy LLP, in New York. COMDISCO HOLDING: Earns $855,000 in Fiscal Yr. Ended Sept. 30 ------------------------------------------------------------- Comdisco Holding Company, Inc., reported financial results for its fiscal year ended Sept. 30, 2014. Comdisco emerged from Chapter 11 bankruptcy proceedings on August 12, 2002 and, under its Plan of Reorganization, its business purpose is limited to the orderly sale or run-off of all of its remaining assets. Operating Results: For the fiscal year ended September 30, 2014, Comdisco reported net earnings of approximately $855,000, or $0.21 per common share (basic and diluted). The net earnings was driven in large part by the gain on sale of equity investments and the reversal of income tax liabilities for the Company's Canadian subsidiary which was liquidated during the fiscal year ended September 30, 2014. The per share results for Comdisco are based on 4,028,951 shares of common stock outstanding on average during the 2014 fiscal year. For the fiscal year ended September 30, 2014, total revenue was approximately $1,755,000 as compared to approximately $200,000 of revenue for the fiscal year ended September 30, 2013. The increase is primarily the result of the gain on the sale of equity investments during the fiscal year as compared to the prior year and miscellaneous income for the sale of an investment in India that was previously written off. Net cash provided by operating activities was approximately $353,000 for the fiscal year ended September 30, 2014 resulting from the sale of equity investments, bad debt recoveries and income tax receipts from Canada slightly offset by the payment of selling, general and administrative expenses and income tax payments. Total assets were approximately $37,438,000 as of September 30, 2014, which included approximately $31,992,000 of unrestricted cash, compared to total assets of approximately $38,304,000 as of September 30, 2013, which included approximately $32,011,000 of unrestricted cash and short-term investments. As a result of bankruptcy restructuring transactions, the adoption of fresh-start reporting and multiple asset sales, Comdisco's financial results are not comparable to those of its predecessor company, Comdisco, Inc. About Comdisco Comdisco emerged from Chapter 11 bankruptcy proceedings on August 12, 2002. The purpose of reorganized Comdisco is to sell, collect or otherwise reduce to money in an orderly manner the remaining assets of the corporation. Pursuant to the Plan and restrictions contained in its certificate of incorporation, Comdisco is specifically prohibited from engaging in any business activities inconsistent with its limited business purpose. Accordingly, within the next few years, it is anticipated that Comdisco will have reduced all of its assets to cash and made distributions of all available cash to holders of its common stock and contingent distribution rights in the manner and priorities set forth in the Plan. At that point, the company will cease operations. The company filed on August 12, 2004 a Certificate of Dissolution with the Secretary of State of the State of Delaware to formally extinguish Comdisco Holding Company, Inc.'s corporate existence with the State of Delaware except for the purpose of completing the wind-down contemplated by the Plan. CONN'S INC: Moody's Changes Rating Outlook on Ba3 CFR to Negative ----------------------------------------------------------------- Moody's Investors Service changed the outlook of Conn's, Inc. to negative, and affirmed all ratings, including the Ba3 Corporate Family Rating. Ratings affirmed: Corporate Family Rating at Ba3 Probability of default rating at Ba3-PD $250 million senior unsecured notes at B2, LGD5 Speculative grade liquidity rating at SGL-2 Outlook Actions: Issuer: Conn's, Inc. Outlook, Changed To Negative From Stable Ratings Rationale "The change in outlook to negative follows Conn's announcement of weak third quarter earnings, driven by significant deterioration in its proprietary credit portfolio," stated Moody's Vice President Charlie O'Shea. "The company's core credit customers are clearly feeling pressure from various negative economic factors, some of which appear to be regional in scope, and the company is implementing remedial measures to limit further deterioration. Moody's notes that retail earnings have been relatively solid, however given the inexorable link between retail sales and proprietary credit to finance those sales as roughly 77% of sales involve the purchaser using Conn's credit product, there is the risk that remedial steps to improve the quality and performance of the credit portfolio will have a negative impact on retail operating income. In addition, the company is undergoing management changes, some of which are focused on expanding the oversight on the credit business, and its strategic review is ongoing, increasing the level of uncertainty," added Mr. O'Shea. The Ba3 rating considers Conn's credit metrics, which despite recent weakness due to deterioration in the credit portfolio remain strong, its dedicated customer base, as well as the challenges the company faces in staunching the losses in its credit business. Ratings also consider the company's relatively small size and limited geographic breadth, with heavy reliance at present on the vagaries of the Texas economy, which Moody's believes are somewhat responsible for the poor recent performance of Conn's credit business. The negative outlook considers the challenges the company faces as it attempts to reverse the recent negative performance trend of its credit business, which has become a drag on earnings and by extension credit metrics. Ratings could be downgraded if operating performance continues to weaken resulting in debt/EBITDA rising above 4.5 times or EBITA/interest falling below 4.5 times, or if liquidity were to weaken. Ratings could be upgraded if debt/EBITDA was maintained below 4 times and EBITA/interest was maintained at around 6 times, financial policy remains conservative with respect to acquisitions, store growth and shareholder returns, and that the performance of the credit business becomes more stable and predictable. The SGL-2 speculative grade liquidity rating recognizes that the company is heavily reliant on its unrated ABL facility to fund the significant working capital needs resulting from the growth in credit receivables that support the growth of the retail business. The principal methodology used in these ratings was Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in The Woodlands, Texas, Conn's is a retailer of predominantly furniture, home appliances, and consumer electronics with a network of 89 stores in Texas (56) and bordering states and annual revenues of around $1.3 billion. It provides proprietary financing of its products on a secured installment loan basis which accounts for around 77% of retail revenues. CONNECTEDU INC: CSM Wants Clear Regulation of Student Data ---------------------------------------------------------- Michele Molnar at Edweek.org reports that James P. Steyer, the CEO and founder of Common Sense Media, a San Francisco-based nonprofit that advocates for safe technology use for children, has called for "clear state and national regulation of student data and personal information." According to Edweek.org, millions of student records were sold in the ConnectEdu Inc. bankruptcy case. Edweek.org relates that when ConnectEdu filed for bankruptcy, 20 million student records hung in the balance, raising many questions for educators and parents alike. The report states that the sale of ConnectEDU occurred without the company abiding strictly to its privacy policy. According to the report, ConnectEDU had promised its users that they could delete their personally identifiable records before any sale. The Federal Trade Commission's Consumer Protection Bureau, Edweek.org recalls, asked the Bankruptcy Court to: (i) have ConnectEDU destroy all personal data; (ii) notify users that their personal information was about to be sold and that they could have it deleted; or (iii) to appoint a privacy ombudsman to ensure protection of the users' privacy. None of those happened, because ConnectEDU had no workers as of the filing date, Edweek.org states, citing Wojciech F. Jung, Esq., at Lowenstein Sandler LLP, the lead bankruptcy counsel for ConnectEDU. The report says that it was left to Graduation Alliance and Symplicity Corporation, the companies that bought ConnectEDU's assets, to carry out the notifications after the records had been transferred. Edweek.org quoted Mr. Steyer as saying, "ConnectEDU was not the first, and certainly will not be the last, ed-tech company to be sold or merged or go bankrupt. You cannot always leave it up to the industry to do the right thing or even stand by their own privacy policies." About ConnectEdu ConnectEdu Inc., a maker of education-related technology, filed for Chapter 11 bankruptcy protection in Manhattan, on April 28, 2014. The case is In re ConnectEdu, Inc., Case No. 14-11238 (Bankr. S.D.N.Y.). The Debtor's counsel is Wojciech F Jun, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler LLP. The filing lists ConnectEdu's assets at between $1 million and $10 million against liabilities of between $10 million and $50 million. CRYOPORT INC: Issues $415,000 Notes to Investors ------------------------------------------------ Cryoport, Inc., issued to certain accredited investors 2014 Series Secured Promissory Notes in the aggregate original principal amount of $415,000 between Dec. 3, 2014, and Dec. 4, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. The board of directors of Cryoport has approved the issuance of 2014 Series Secured Promissory Notes up to an aggregate original principal amount of $1,000,000. The Notes accrue interest at a rate of 7% per annum. All principal and interest under the Notes will be due on July 1, 2015. Cryoport may elect to extend the maturity date of the Notes to Jan. 1, 2016, by providing written notice to the Investors and a warrant to purchase a number of shares of common stock of Cryoport equal to (a) the then outstanding principal balance of the Note, divided by (b) $0.50 multiplied by 125%. Cryoport may prepay the Notes at any time without penalty and payments will be on a pari passu basis. The Notes are secured by all tangible assets of Cryoport pursuant to the terms of that certain Security Agreement dated Dec. 3, 2014, between Cryoport and the Investors. Cryoport is obligated to keep the collateral and all of its other personal property and assets free and clear of all security interests, except for certain limited exceptions. In connection with the issuance of the Notes, Cryoport issued the Investors warrants to purchase 1,037,500 shares of common stock at an exercise price of $0.50 per share. The warrants are exercisable on May 31, 2015, and expire on Nov. 30, 2021. Cryoport did not pay any discounts or commissions with respect to the issuance of the Notes or the Warrants. About Cryoport Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides comprehensive solutions for frozen cold chain logistics, primarily in the life science industries. Its solutions afford new and reliable alternatives to currently existing products and services utilized for bio-pharmaceuticals and biologics, including in-vitro fertilization, cell lines, vaccines, tissue and other commodities requiring a reliable frozen solution. Cryoport reported a net loss of $19.56 million on $2.65 million of revenues for the year ended March 31, 2014, as compared with a net loss of $6.38 million on $1.10 million of revenues for the year ended March 31, 2013. The Company's balance sheet at Sept. 30, 2014, showed $1.20 million in total assets, $2.57 million in total liabilities, all current, and a $1.37 million total stockholders' deficit. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has cash and cash equivalents of $369,581 at March 31, 2014, management has estimated that cash on hand, which include proceeds from convertible bridge notes received in the fourth quarter of fiscal 2014, will only be sufficient to allow the Company to continue its operations into the second quarter of fiscal 2015. These matters raise substantial doubt about the Company's ability to continue as a going concern. DEB STORES: Headed for GOB Sales After Rival Offers in Ch. 11 ------------------------------------------------------------- Deb Stores, short of cash amid declining sales, began looking for buyers in August but couldn't find an adequate bid to buy the business as a going concern. Accordingly, Deb Stores sought bankruptcy protection, with a deal with liquidators to conduct a going-out-of-business sale at its 295 stores. Deb Stores Holding LLC, which is controlled by private equity firm Cerberus Capital Management, said it is working with a joint venture comprised of Gordon Brothers Retail Partners and Hilco Merchant Resources, to finalize a form of agency agreement, pursuant to which Gordon and Hilco would be designated as the Debtors' agent to conduct store closing sales and liquidate the Debtors' inventory. In order to proceed with a transaction as expeditiously as possible, the Debtors anticipate shortly filing a motion seeking, among other things, approval of an agency agreement with Gordon/ Hilco or a higher and better offer, grant bidding protections to Gordon/Hilco, establish bidding procedures for an auction and conduct a hearing on the request to conduct store closing sales and liquidate their inventory through a liquidator or to consummate an alternative transaction of the successful bidder. The Debtors believe that conducting store closing sales, or consummating a higher and better transaction, will maximize value for the Debtors' estates while minimizing the administrative expenses incurred in the Chapter 11 cases. The Debtors though said they are still in the process of evaluating whether a going concern sale of their assets is feasible. The Debtors' year-to-date revenues as of Nov. 1, 2014, amounted to $205 million, a 10 percent decrease over total revenues for the same period in 2013. The total revenues in 2013 amounted to $296 million, a 3 percent decrease from 2012. First Day Cases The Debtors on the Petition Date filed motions to: -- jointly administer their Chapter 11 cases; -- appoint Epiq Bankruptcy Solutions, LLC as claims and noticing agent; -- pay $1.3 million in prepetition sales and use taxes; -- pay $1.3 million in prepetition claims of shippers and customs representatives; -- honor certain prepetition obligations to customers; -- pay wages and benefits of 4,059 employees; -- access DIP financing and use cash collateral; -- maintain their existing bank accounts; and -- prohibit utilities from discontinuing service and provide adequate assurance of payment in the form of deposit of $283,000. A copy of the affidavit in support of the first-day motions is available for free at: http://bankrupt.com/misc/Deb_First_Day_Affidavit.pdf About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors -- DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of the assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and 8 affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: Proposes $25-Mil. of DIP Financing From PNC ------------------------------------------------------- Deb Stores Holding LLC and its affiliates seek approval from the Bankruptcy Court to obtain $25 million secured postpetition superpriority financing from PNC Bank, National Association, as agent and lender, and use cash collateral. The Debtors owe lenders led by PNC on a prepetition revolving credit amounting to $25.1 million plus interest on as of Dec. 1, 2014. The Debtors also owe lenders led by Ableco, LLC, as administrative agent, on a term loan totaling $74.5 million plus interest. The Debtors are in the process of evaluating whether going concern sale of their assets is feasible. In the interim, the Debtors are negotiating a stalking horse agreement with liquidators, subject to higher and better offers, in order to effectuate store-closing inventory sales if no going concern buyer materializes. Pending approval of a sale by the Court, the Debtors intend to operate their business in the ordinary course and require immediate access to postpetition financing and cash collateral. The salient terms of the proposed DIP Revolving Credit Agreement are: * Borrowers: Debtors. * DIP Revolving Lenders: PNC Bank, N.A., as agent, and sole lender. * Type and Amount of DIP: A senior debtor-in-possession revolving credit facility Amount of DIP extended by the DIP Revolving Credit Lenders in the amount of up to $25,000,000, plus any interest, fees and other obligations accrued thereon. Under the interim order, the aggregate financing available to the Debtors under the DIP Revolving Credit Agreement will not exceed $23,000,000 in principal amount. * Approved Budget: Use of cash shall be subject to the approved budget and the period commencing on the Petition Date and ending on March 1, 2015, unless terminated earlier as and when the Debtors' sell substantially all of their assets or otherwise repay the Revolving Credit Obligations. * Adequate Protection for Prepetition Revolving Credit Agent: A lien in the DIP collateral, a postpetition claim against the Debtors' estates having equal priority to the DIP revolving credit obligations, payment of reasonable fees and expenses. * Adequate Protection for Term Loan Agent: A lien in the DIP collateral, a postpetition claim and payment of reasonable fees and expenses. * Facility Fees: The Debtors will pay the DIP agent a fee in an amount equal to $50,000 and an unused line fee of 0.50% per annum. * Interest Rate: The interest rate will be the prime rate plus 3.5 percent per annum or 6.75 percent per annum at the current rates. * Maturity Date: The proposed credit facility will mature on the earliest to occur of the expiration of the term (i.e. March 1, 2015) or earlier termination of the DIP facility in accordance with the terms of the DIP Revolving Credit Agreement. In addition, the proposed interim order contemplates repayment of the DIP Revolving Credit Lenders and the Term Loan Lenders, as the case may be, from the proceeds of the disposition of the Debtors' assets. As reflected in the budget, the Debtors anticipate that the Prepetition Revolving Credit Lenders and the DIP Revolving Credit Lenders will be paid in full from the proceeds of the sale. Following a payment of the Revolving Credit Obligations, the interim order provides that the Term Loan Lenders will receive an initial pay-down of no less than $9.2 million upon the closing of a stalking horse agreement with liquidators, or a higher or better bid, and possible subsequent payments as set forth in the interim order. About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors, DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and eight affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: Proposes Epiq as Claims and Notice Agent ---------------------------------------------------- Deb Stores Holding LLC and its affiliates seek approval from the bankruptcy court to appoint Epiq Bankruptcy Solutions, LLC, as claims and noticing agent. The Debtors anticipate that there will be thousands of entities to be noticed in the Chapter 11 cases. In view of the number of anticipated claimants and the complexity of the Debtors' businesses, the Debtors submit that the appointment of a claims agent is both necessary and in the best interests of the Debtors' estates and their creditors. Epiq agreed to a $20,000 retainer. As claims agent, Epiq will charge the Debtors at these rates: Position Hourly Rate -------- ----------- Clerical/Administrative Support $30 to $45 Case Manager $50 to $80 IT/ Programming $70 to $110 Senior Case Manager $85 to $130 Consultant/ Senior Consultant $145 to $190 Director/ Vice President Consulting $200 For its noticing services, Epiq will charge $0.10 per page for facsimile noticing and won't charge anything for e-mail noticing. For database maintenance, the firm will charge $0.09 per record per month. For-online claim filing services, Epiq will charge $3 per claim filed. Epiq can be reached at: EPIQ SYSTEMS c/o E.B.S. LLC 757 Third Avenue, Third Floor New York, NY 10017 Attn: Lorenzo Mendizabal About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors, DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and eight affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: Has Interim Authority to Tap $23MM in DIP Loans ----------------------------------------------------------- Deb Stores Holdings, LLC, et al., obtained interim authority from the U.S. Bankruptcy Court for the District of Delaware to tap postpetition secured financing from PNC Bank, National Association, as agent for lenders, in an amount not more than $23,000,000 of revolving advances. The Debtors also obtained interim authority to use cash collateral securing their prepetition indebtedness. As of the Petition Date, the Debtors were parties to the following credit agreements: * a Revolving Credit and Security Agreement with PNC as agent and sole lender, pursuant to which the Debtors were indebted in the approximate non-contingent liquidated amount of $25,147,305, as of Dec. 1, 2014; and * a financing agreement with Ableco, L.L.C., as administrative and collateral agent for itself and for a consortium of lenders, pursuant to which the Debtors were indebted in the approximate amount of $74,511,020. A final hearing with respect to the motion is scheduled for Jan. 7, 2015, at 11:00 a.m. Objections and responses must be submitted on or before Dec. 31 and must be served upon: (a) counsel to the Debtors: Laura Davis Jones, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor Wilmington, DE 19899 (b) counsel to the Term Loan Agent: Michael L. Tuchin, Esq. David A. Fidler, Esq. KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067-6049 -- and -- Mark D. Collins, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square, 920 North King Street Wilmington, DE 19801 (c) counsel to the DIP Revolving Credit Agent Joshua I. Divack, Esq. Daniel M. Ford, Esq. HAHN & HESSEN LLP 488 Madison Avenue New York, NY 10022 About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors, DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and eight affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: To Begin Store Closings Jan. 9 ------------------------------------------ Deb Stores Holding LLC, et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to enter into an agency agreement with a contractual joint venture composed of Hilco Merchant Resources, LLC, and Gordon Brothers Retail Partners, LLC. Pursuant to the Agency Agreement, the Stalking Horse will serve as the Debtors' exclusive agent to (a) sell all of the merchandise located at all of the Debtors' retail locations and, if requested by the stalking horse, through e-commerce platforms, and (b) dispose of any owned fixtures, furnishings and equipment in the Debtors' retail locations, distribution center and corporate offices. As a guaranty of the Stalking Horse's performance under the Agency Agreement, the Stalking Horse will guarantee the Debtors' receipt of 98.25% of the cost value of the merchandise included in the sale. The Cost Value of the Merchandise is estimated to be between $38,000,000 and $42,000,000. The Stalking Horse will receive a fee 6.5% of the aggregate cost value of the merchandise. The Stalking Horse will commence the Store Closing Sales on or prior to Jan. 9, 2015, and expects to end the store closing sales on or about April 30, 2015. If the Court approves an alternative transaction or the Stalking Horse is not approved as the successful bidder at the auction, then the stalking horse will be entitled to receive (i) $400,000, (ii) an expense reimbursement of up to $200,000, and (iii) the Stalking Horse's actual out-of-pocket costs of signage and freight in an amount not to exceed $450,000. A hearing on the approval of the bidding procedures is scheduled for Dec. 19, 2014. Objections are due Dec. 17. About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors, DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and eight affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: Names Timothy Boates as Restructuring Officer --------------------------------------------------------- Deb Stores Holding LLC, et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ RAS Management Advisors, LLC, to provide Timothy D. Boates as chief restructuring officer, additional personnel, and financial advisory and restructuring-related services. Mr. Boates, with the assistance of the Additional Personnel from RAS, will provide various services, which may include, but are not necessarily limited to, the following: (a) directing the Company's finance and accounting functions, with the Company's Chief Financial Officer reporting directly to Mr. Boates; (b) management of all aspects of the Company's financial resources, including cash and liquidity management; (c) directing the development of a potential plan of reorganization, including all elements of the Company's store-level, e-commerce, and administrative operations; (d) directing the efforts of the Company's management, its employees, and its external professionals in connection with potential transactional efforts, including any refinancing of the Company's senior secured credit obligations or any other equity or investment efforts, or any filing under Chapter 11; and (e) management of the obligations owed by the Company to its significant creditors, including without limitation, the Company's secured lenders and its trade creditors. Mr. Boates and the Additional Personnel from RAS have agreed to be paid according to the following fee structure: Daily Hourly ------ ------ Timothy Boates $5,000 $500 Timothy Puopolo $3,500 $350 Robert Tetrault $3,250 $325 Patrick Carew $3,250 $325 Clerical $30 During the one-year period prior to the Petition Date, RAS has received $417,957 from the Debtors for services performed and expenses incurred prior to the Petition Date. In addition, RAS has received, and continues to hold, $75,000 as retainer from the Debtors. The Debtors are seeking to employ Mr. Boates and the RAS Personnel pursuant to Section 363(b) of the Bankruptcy Code. The Debtors state that because the Debtors are not seeking to retain RAS as a professional under Section 327, there is no requirement that RAS, Mr. Boates, or any of the Additional Personnel be disinterested. The RAS Personnel may be reached at: Timothy Boates Tel: 256-776-4989 Email: tboates@rasmanagement.com -- and -- Timothy Puopolo Tel: 602-316-4993 Email: tpuopolo@rasmanagement.com About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors, DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and eight affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. ELECTRICAL COMPONENTS: Moody's Affirms B2 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed Electrical Components International, Inc.'s (ECI) B2 Corporate Family Rating and B3-PD Probability of Default Rating following the company's announcement it will acquire Global Harness Systems (GHS) for approximately $37 million. The transaction is expected to be funded with a proposed $40 million add-on to the company's existing $260 million principal term loan B. As a result of these rating actions, Moody's affirmed the B1 rating on the company's senior secured credit facilities, consisting of an upsized $300 million 7-year term loan B and a $50 million 5-year revolving credit facility. The rating outlook is maintained at stable. The ratings were affirmed due to the limited impact of the transaction on the company's credit metrics and anticipated benefits to the company stemming from the acquisition. Leverage at ECI remains slightly elevated on a pro-forma basis but Moody's anticipate deleveraging via debt repayment during the next few years. Moody's views ECI's proposed acquisition of GHS favorably, primarily because it will improve ECI's customer concentration and end-market diversification. ECI will attempt to leverage GHS' existing customer base by cross-selling its products into new markets and geographies, but on a pro-forma basis ECI's customer concentration will remain high, as its two largest customers will account for greater than 40% of PF sales. The transaction is expected to strengthen ECI's end-market presence in the higher growth specialty/industrial market while reducing concentration in appliances. In addition, ECI's knowledge base will benefit from GHS' well-established position and engineering capabilities in the bus and marine markets, two markets that were largely untapped by ECI prior to the acquisition. The following ratings have been affirmed (subject to final documentation): Corporate Family Rating at B2; Probability of Default Rating at B3-PD; $50 million senior secured revolving credit facility maturing 2019 at B1 (LGD2); and $300 million senior secured term loan B (upsized from $260 million) due 2021 at B1 (LGD2). The rating outlook is maintained at stable Ratings Rationale ECI's B2 Corporate Family Rating reflects its small size relative to the rated manufacturer universe, as well as its moderately elevated leverage profile. The rating also considers the company's potential for cyclicality and very high customer concentration within the North American and European white goods appliance sectors, highlighted by its top two customers accounting for greater than 40% of PF sales following the acquisition of GHS. However, the company's concentrated customer base is largely a function of the mature and consolidated nature of the US and European appliance industries. The rating benefits from the company's leading market position as a wire harness manufacturer in North America and Europe as well as its low-cost manufacturing capabilities, which Moody's view as a key competitive advantage. The rating incorporates Moody's expectation that ECI will generate positive free cash flow that will be used for deleveraging during the next few years. The stable outlook reflects Moody's expectation that ECI will grow its top-line in the low-to-mid single digit range and gradually deleverage via both EBITDA growth and debt repayment during the next 12 to 18 months. It further assumes the company will maintain a good liquidity profile and generate positive free cash flow. In addition, the company is expected to have limited draws on its revolver, but utilization is unlikely to exceed 20% of the total facility amount. The ratings could be upgraded if ECI is able to deleverage such that Moody's adjusted debt-to-EBITDA is sustained around 4.0 times and interest coverage approaches 3.0 times. Also, the company will have to maintain at least a good liquidity profile prior to an upgrade. Alternatively, the ratings could be downgraded if ECI's liquidity weakens and revolver drawings increase beyond Moody's expectation of 20% of revolver capacity. In addition, if Moody's adjusted debt-to-EBITDA climbs above 5.5 times and interest coverage falls below 2.0 times the ratings could be downgraded. The principal methodology used in this rating was the 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. Electrical Components International (ECI) is a leading manufacturer of wire harnesses and providers of value-added assembly services to companies primarily located in North America and Europe. The company also generates sales in South America and Asia. ECI operates in two core segments; appliances and specialty industrials. ECI is believed to be the leading wire harness supplier for appliance companies in both North America and Europe, and also produces specialty harnesses for several industries including automotive, HVAC, construction, and agricultural equipment among others. In November 2013 ECI acquired Incaelec, a European wire-harness manufacturer, and is currently in the process of purchasing Global Harness Systems (GHS), a North American manufacturer of wire harnesses and panel assemblies. ECI was acquired by private equity firm KPS Capital Partners, LP in May 2014. Sales for the twelve month period ended September 30, 2014 -- pro forma for the Incaelec and GHS acquisitions -- were nearly $690 million. ENERGY FUTURE: Aims for Quick Ch 11 Exit; Discloses Attorney Fees ----------------------------------------------------------------- Ellen Rosen at Bloomberg News reports that Energy Future Holdings Corp. will keep bankruptcy lawyers at firms Morrison & Foerster LLP and Richards, Layton & Finger PA busy in the coming months as the Company aims for a relatively quick exit from Chapter 11. In court documents dated Dec. 8, the Company listed fees of $20.5 million and $1.25 million in expenses paid to bankruptcy counsel Kirkland & Ellis LLP from April 29 to Aug. 31. Bloomberg relates that Gibson, Dunn & Crutcher LLP, the Company's special counsel for "certain corporate and litigation matters," was paid $630,000 during the same period, and Godfrey & Kahn SC, acting as counsel to the fee committee, got $580,000 from Aug. 21 to Oct. 31. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. ENTERCOM COMMUNICATIONS: Lincoln Deal No Impact on Moody's B2 CFR ----------------------------------------------------------------- Moody's Investors Service said that on December 8, 2014, Entercom Communications Corp. announced its agreement to acquire Lincoln Financial Media for $105 million plus working capital from Lincoln Financial Group (the marketing name for affiliates of Lincoln National Corporation which is rated Baa1 stable). The company plans to finance the transaction with $77.5 million in cash plus $27.5 million in new perpetual cumulative convertible preferred stock held by Lincoln Financial Group. The cash portion of the purchase price is expected to be funded primarily from balance sheet cash plus advances under its $50 million revolver. There is no immediate impact to Entercom's debt ratings or stable outlook as Moody's expect financial metrics and operating performance to remain solidly positioned in the B2 Corporate Family Rating. Closing is subject to regulatory approval expected to be received in the second quarter of 2015. The acquisition will add a total of 15 radio stations, 10 of which will be in three new major markets: Atlanta (#9 ranked radio market), Miami (#11) and San Diego (#17), and five of which will add to the company's existing station cluster in Denver (#18). The transaction enhances diversification by expanding Entercom's portfolio to more than 130 stations in 26 markets and favorably expands the company's broadcast footprint in top 20 markets while keeping financial metrics, including leverage, largely within pre- transaction levels (5.0x debt-to-EBITDA as of September 30, 2014, incorporating Moody's standard adjustments). Moody's believes Entercom will also benefit from enhanced cash flow given the addition of acquired stations to its larger platform, the elimination of redundant corporate overhead, and the step-up in tax basis. The issuance of $27.5 million of preferred stock comes with modest amounts of annual cash payments, and Moody's expect the company to eventually redeem the preferred shares to avoid accretion or the scheduled increase in cash payments. Moody's notes that Entercom has been disciplined in its acquisition strategy demonstrated by the leverage neutral acquisition of KBLX-FM in San Francisco for $25 million in 2012 and track record for passing on potential acquisitions including Citadel Broadcasting in 2011, certain assets of Lincoln Financial Media in 2007, and ABC Radio in 2005. Entercom plans to begin operating the Lincoln Financial Media stations under a time brokerage agreement starting in late January following customary regulatory review. In addition, the company plans to divest one FM station in the Denver market to comply with FCC station ownership limits. Entercom Communications Corp., headquartered in Bala Cynwyd, PA, is one of the five largest radio broadcasting companies based on revenue or number of stations. The company was founded in 1968 by Joseph M. Field, Chairman, and is focused primarily on radio broadcasting currently with 112 radio stations in 23 large and mid-sized markets ranked #4 to #101 including San Francisco, Boston, Seattle, and Denver. The company reported revenue of $378 million for the 12 months ended September 30, 2014. Entercom is publicly traded with Joseph M. Field (Chairman) and David J. Field (President /CEO and son of the Chairman) owning approximately 30% combined economic interest in the company with roughly 73% voting power. Remaining shares are widely held. EXIDE TECHNOLOGIES: Enters Into Amended Plan Support Agreement -------------------------------------------------------------- Exide Technologies on Dec. 11 disclosed that it entered into an amended and restated plan support agreement ("Amended PSA") with holders of a majority of the principal amount of Exide's senior secured notes. The Amended PSA allows Exide additional time to negotiate the terms of a commitment to backstop the second lien convertible notes to be offered to certain senior secured noteholders pursuant to Exide's proposed plan of reorganization ("POR") previously filed on November 17, 2014. A number of senior secured noteholders already have indicated their intent to provide substantial backstop commitments subject to, among other things, Exide obtaining the commitments to backstop the rights offering that will, in turn, provide the liquidity needed to fund the business plan upon which the POR is based. Under the Amended PSA, which is substantially similar to the plan support agreement entered into on November 4, 2014, the date after which a party can terminate its participation under the Amended PSA if a backstop commitment has not been agreed to, has been extended from December 10, 2014 to January 12, 2015. Exide expects to continue to negotiate with various senior secured noteholders in an effort to obtain the remaining backstop commitments. However, there can be no assurances that Exide will receive these additional commitments. In the event that Exide is successful in pursuing the POR path, its goal is to emerge from Chapter 11 by March 31, 2015. As contemplated under the Amended PSA and as previously announced, Exide is continuing to pursue a dual path. In addition to the POR process, Exide is pursuing a sales process and soliciting third- party bids for a potential sale of some or all of its businesses. The Company has received a number of initial indications of interest from third parties in connection with the sale process. Exide will continue to develop these proposals as an alternative to the POR in an effort to maximize estate value. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. Exide disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. Schnader Harrison Segal & Lewis LLP was tapped as special counsel. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. Geosyntec Consultants was tapped as environmental consultants to the Committee. Robert J. Keach of the law firm Bernstein Shur as fee examiner has been appointed as fee examiner. He has hired his own firm as counsel. EXPRESS INC: S&P Revises Outlook to Negative on Weak Performance ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Columbus, Ohio-based Express Inc. to negative from stable. At the same time, S&P affirmed all of its ratings on Express, including its 'BB' corporate credit rating. "The outlook revision reflects our expectation that operating performance will continue to be under pressure in the remainder of 2014 and into 2015. We believe the specialty apparel industry will remain difficult and highly promotional because of increased competition and consumer caution and Express may not be able to adequately offset these trends," said credit analyst Helena Song. "The company's performance and credit metrics weakened in recent quarters. Despite our forecast of some modest improvement in 2015, we expect credit metrics to remain at a weakened level, including funds from operations (FFO) to total debt below 30%." The negative rating outlook reflects S&P's expectation that Express' operating performance will remain relatively weak in 2014 and into 2015 because of the very promotional apparel retail environment and cautious consumer spending on small ticket items. S&P believes performance will stabilize and modestly improve in 2015, as new outlet unit growth and on-going operating initiatives help offset weak sales trend and margin pressure. S&P expects credit metrics will further weaken modestly from the current levels, including debt to EBITDA of about 2.6x and FFO to total debt at 26% at the end of 2014. Downside Scenario S&P could lower the ratings if the company's operating performance further worsens in 2015, because of sustained lower consumer spending or merchandise/inventory issues. This could occur if continuing weak sales, margins, or some combination of the two results in FFO to total debt moving towards low end of 20% for a sustained period. Upside Scenario S&P could revise the outlook to stable if it believes the company is able to demonstrate stable and consistent performance gains over the next few quarters. Under this scenario, revenue growth would be in the mid-single-digit supported by new store growth and direct sales and EBITDA margin would improve at least 60 bps from S&P's 2014 forecasted level. As a result, leverage would sustain in the mid 2x area and FFO to total debt in the high 20% range. F & B GARDENS: Case Summary & 4 Unsecured Creditors --------------------------------------------------- Debtor: F & B Gardens LLC c/o Luis F. Rodriguez 31 Gregory Lane West Orange, NJ 07052 Case No.: 14-34868 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Hon. Donald H. Steckroth Debtor's Counsel: Jonathan Goodman, Esq. JONATHAN GOODMAN POB 16096 Jorunal Square Station Jersey City, NJ 07306 Total Assets: $900,000 Total Liabilities: $922,000 The petition was signed by Luis F. Rodriguez, managing partner. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-34868.pdf FINJAN HOLDINGS: Sells Subsidiary for $675,000 ---------------------------------------------- Finjan Holdings, Inc., has sold its wholly-owned organic fertilizer subsidiary, Converted Organics of California, LLC, to Converted Organics, LLC, a third-party entity, for $675,000 in cash. With the sale of the subsidiary, Finjan Holdings' operations now relate exclusively to the Company's web and network security technology line of business. "This divestiture will advance Finjan's growth plan of acquiring quality, synergistic technology companies with complementary IP portfolios," remarked Phil Hartstein, president and CEO of Finjan Holdings. "With the recent completion of our first patent license as a public company for $8 million, on top of the $145 million already received on this portfolio, our focus is on developing a productive cadence to our licensing program with our current cybersecurity patent portfolio." Recognized globally as a pioneer and leader in web and network security, Finjan's decades-long investment in innovation is captured in its patent portfolio, centered around software and hardware technologies capable of proactively detecting previously unknown and emerging threats on a real-time, behavior-based basis. About Finjan Finjan, formerly known as Converted Organics, is a leading online security and technology company which owns a portfolio of patents, related to software that proactively detects malicious code and thereby protects end-users from identity and data theft, spyware, malware, phishing, trojans and other online threats. Founded in 1997, Finjan is one of the first companies to develop and patent technology and software that is capable of detecting previously unknown and emerging threats on a real-time, behavior-based basis, in contrast to signature-based methods of intercepting only known threats to computers, which were previously standard in the online security industry. Finjan Holdings reported a net loss of $6.07 million in 2013 following net income of $50.98 million in 2012. The Company reported a net loss of $2 million on $175,000 of revenues for the three months ended March 31, 2014. The Company's balance sheet at June 30, 2014, showed $24.51 million in total assets, $2.05 million in total liabilities and $22.46 million in total stockholders' equity. FOREST OIL: Fails to Meet NYSE's $1 Bid Price Rule -------------------------------------------------- Forest Oil Corporation reported that the New York Stock Exchange notified the Company on Nov. 5, 2014, that it has not met the NYSE's continued listing standard that requires a minimum average closing price of $1.00 per share over 30 consecutive trading days. Under NYSE rules, Forest has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance at any time during the six-month cure period if the Company's common stock has a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 over the 30-trading day period ending on the last trading day of that month or on the last day of the cure period. The NYSE notification does not affect Forest's business operations or its Securities and Exchange Commission reporting requirements, and does not conflict with any of the company's credit agreements or debt and other obligations. The notice has no immediate impact on the listing of the Company's common stock, which will continue to trade on NYSE under the symbol "FST". Forest previously announced that it intends to undertake a reverse stock split following completion of its combination transaction with Sabine Oil & Gas LLC in order to increase the trading price of the Company's common shares. Forest intends to formally notify the NYSE promptly of its intent to take steps to cure the deficiency and to return to compliance with this continued listing standard. About Forest Oil Forest Oil is an independent oil and gas company engaged in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids ("NGLs") primarily in North America. Ernst & Young LLP, in Denver, Colorado, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent accounting firm noted that the Company has determined that it expects to fail a financial covenant in its Credit Facility sometime prior to the end of 2014, which could result in the acceleration of all borrowings thereunder and the Company's senior unsecured notes due 2019 and 2020. This raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2014, the Company had $927.48 million in total assets, $1.07 billion in total liabilities and a $148.03 million total shareholders' deficit. * * * As reported by the TCR on Aug. 25, 2014, Standard & Poor's Ratings Services said that its 'B-' corporate credit rating and its other ratings on Denver-based Forest Oil Corp. remain on CreditWatch with positive implications, pending the close of a merger transaction with Sabine Oil & Gas LLC. GARY DOURDAN: Ex-Girlfriend Wants Cash for Alleged Assault ---------------------------------------------------------- Gary Dourdan's ex-girlfriend Nicole Cannizarro is asking him for cash, claiming domestic assault, court documents say. The $110,000 restitution, which Mr. Dourdan also agreed to pay to settle Ms. Cannizarro's civil suit against him, is a penalty for a crime that should not be wiped out by bankruptcy, Alan Duke at RadarOnline.com reports, citing Ms. Cannizarro's attorney. Mr. Dourdan's debts include $4,368 in probation fees stemming from his felony battery conviction for breaking Ms. Cannizarro's nose in 2012. Ms. Cannizarro claims that Mr. Dourdan "intentionally, willfully, maliciously, recklessly, and wantonly caused bodily injury" to her. RadarOnline.com relates that Mr. Dourdan got five years probation for the attack and the judge ordered him to pay victim restitution as part of his sentence. As reported by the Troubled Company Reporter on Nov. 15, 2012, former "CSI" actor Gary Dourdan filed for Chapter 11 bankruptcy on Aug. 30, 2012, with slightly more than $1.8 million in assets against liabilities of approximately $1.73 million. According to Eurweb.com, Mr. Dourdan didn't complete the bankruptcy, therefore, he didn't have his debt discharged. Eurweb.com reported that Mr. Dourdan filed for bankruptcy again in September 2014, claiming to have $988,000 in assets, and $1.5 million in debt. GCI INC: Moody's Assigns Ba2 Rating on New $275MM Term Loan ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to GCI, Inc.'s proposed $275 million senior secured term loan and raised the Speculative Grade Liquidity Rating ("SGL") to SGL-1 from SGL-2. Moody's also assigned Ba2 ratings to the company's existing senior secured term loan due 2018 and existing $150 million senior secured revolver due 2018.The proceeds of the Term Loan B will be used to support the company's acquisition of the remaining one- third interest in the Alaska Wireless Network ("AWN") for $300 million. Concurrently, Moody's affirmed the company's B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default Rating, and B3 rating on the company's senior unsecured notes. The ratings outlook is positive. Moody's has taken the following rating actions: Issuer: GCI, Inc. $275 million Senior Secured Term Loan, Assigned Ba2 (LGD2) $240 million Senior Secured Term Loan due 2018, Assigned Ba2 (LGD2) $150 million Senior Secured Revolver due 2018, Assigned Ba2 (LGD2) Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Unsecured Regular Bond/Debenture, B3 (LGD5) from B3 (LGD4) Outlook, Positive Speculative Grade Liquidity Rating, SGL-1 from SGL-2 Rating Rationale The raising of the company's liquidity rating to SGL-1 reflects Moody's view that over the next six quarters to March 31, 2016, GCI will have very good liquidity. With cash on hand of $35 million on September 30, 2014, the expectation for increased free cash flow generation considering GCI's full ownership of AWN, and no meaningful near term debt maturities (other than minimal scheduled debt amortization), liquidity arrangements over the rolling six-quarter forecasting horizon to March 31, 2016 are deemed to be very good. The company's existing Senior Credit Facility, which currently has $240 million drawn on its term loan and $10 million outstanding on its revolver as of September 30, 2014, matures on April 30, 2018. The next scheduled debt maturity is in November 2019 when $425 million of senior unsecured notes mature. The new senior secured term loan and existing Senior Credit Facility, all rated Ba2, are held at GCI Holdings, Inc., a wholly owned subsidiary of GCI, and rank ahead of GCI's senior unsecured indebtedness given its structurally and contractually preferential position. The majority of the company's debt is senior unsecured debt. As a consequence, the $425 million senior unsecured notes due 2019 million and the $325 million senior unsecured notes due 2021 are rated B3, one notch below the CFR reflecting the fact that while they comprise a majority of the funded indebtedness of the company, the notes have a structurally and contractually secondary position to the secured RUS debt, new senior secured term loan and existing Senior Credit Facility. The new $75 million Senior Subordinated Notes held at General Communication, Inc. are structurally ranked subordinately to the senior unsecured notes. GCI's B2 CFR reflects the company's high leverage, small scale and the increasingly competitive environment in which it operates as well as the capital intensity of the business. The rating also recognizes the company's shareholder friendly financial policy and its reliance upon High Cost Fund USF support for a little over 5% of its revenues. GCI's rating is supported by its base of recurring revenues from its position as a leading communications provider in the Alaskan market with significant market share in each of its products and its soon-to-be full ownership of Alaska's largest wireless network. Moody's expect GCI to generate modest free cash flow, but Moody's expect the bulk of excess cash to be directed towards shareholders rather than debt reduction . As a result, GCI's absolute debt level is likely to remain largely unchanged. The positive outlook reflects Moody's view that GCI's credit metrics will improve from having full ownership of AWN. Moody's expect the acquisition will increase free-cash-flow generation and that leverage (Moody's adjusted) could trend towards 4.0x over the next two years. GCI will eliminate approximately $126 million of remaining preferred payments that would have been paid to ACS over the next 3 years, and expects to achieve cost savings which will improve free cash flow. The acquisition also eliminates the joint venture structure of AWN, which should generate meaningful cost savings, streamline the company's wireless operations and enhance GCI's flexibility to promote quad-play bundling. Upward ratings pressure may develop if Debt/EBITDA leverage (Moody's adjusted) drops below 4.25x times and FCF/TD improves to 5%. Maintenance of a strong liquidity position would also be a prerequisite. The ratings may face downward pressure if GCI were to turn FCF negative or if the company is involved in further material debt- financed acquisition activity or in the event of adverse liquidity developments. Specifically, if Debt/EBITDA (Moody's adjusted) moves above 5.0x a ratings downgrade would be likely. The principal methodology used in this rating was the Global Telecommunications Industry 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. GEORGE BAVELIS: 6th Circuit Affirms Judgment Against Ted Doukas --------------------------------------------------------------- Judge Ronald Lee Gilman of the United States Court of Appeals for the Sixth Circuit affirmed the Bankruptcy Appellate Panel's judgment in a dispute relating to the bankruptcy case of George A. Bavelis. The BAP judgment affirmed the Bankruptcy Court's conclusion that Ted Doukas does not have a viable claim against Mr. Bavelis under Florida law. Mr. Bavelis sought relief under Chapter 11 of the Bankruptcy Code in 2010 due to sizable debts that he had accumulated from his numerous business ventures. Mr. Bavelis subsequently brought an adversary proceeding against several defendants, which included his friend and business associate Leftheris "Ted" Doukas, as well as a number of businesses owned and controlled by Mr. Doukas. One of Mr. Doukas's companies responded by filing a proof of claim against the Bavelis bankruptcy estate. In the bankruptcy proceedings that followed, the Doukas Defendants argued, among other things, that Mr. Doukas had a claim for rescissionary relief against Mr. Bavelis based on the latter's purported violations of Florida's securities laws related to stock that Mr. Doukas had purchased from a Bavelis-run bank holding company. The Bankruptcy Court concluded, however, that Mr. Doukas does not have a viable claim against Mr. Bavelis under Florida law. The BAP affirmed. Mr. Doukas now argues that the Bankruptcy Court acted beyond its constitutional authority in interpreting Florida law and, further, that the interpretation by both the Bankruptcy Court and the BAP was in error. Judge Gilman affirms the judgment of the BAP. The Defendant-Appellant is represented by: Mark E. Brown, Esq. MENEFEE & BROWN, P.C. 9724 Kingston Pike Knoxville, TN 37922 Telephone: (865) 357-9800 Facsimile: (865) 357-9810 The Plaintiff-Appellee is represented by: Christopher J. Hogan, Esq. ZEIGER, TIGGES & LITTLE, LLP 3500 Huntington Center 41 S High Street Columbus, OH 43215 Telephone: (614) 324-5078 Facsimile: (614) 365-7900 E-mail: hogan@litohio.com The appellate case is George A. Bavelis, Plaintiff-Appellee v. Ted Doukas, Defendant-Appellant, Case No. 14-3067, in United States Court of Appeals for the Sixth Circuit. A full-text copy of the November 26, 2014 Opinion is available at http://bit.ly/15WoyBlfrom Leagle.com. About George Bavelis and Sterling Bank George Bavelis was the chairman and president of Lantana, Florida- based Sterling Bank. As reported by the Troubled Company Reporter, Sterling Bank was closed on July 23, 2010, by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Iberiabank of Lafayette, Louisiana, to assume all of the deposits of Sterling Bank. As of March 31, 2010, Sterling Bank had around $407.9 million in total assets and $372.4 million in total deposits. Iberiabank did not pay the FDIC a premium for the deposits of Sterling Bank. In addition to assuming all of the deposits of the failed bank, Iberiabank agreed to purchase essentially all of the assets. The FDIC and Iberiabank entered into a loss-share transaction on $244.3 million of Sterling Bank's assets. Iberiabank would share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction was projected to maximize returns on the assets covered by keeping them in the private sector. Mr. Bavelis filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 10-58583) on July 20, 2010. Mr. Bavelis' assets include a brokerage account opened in 2005 with Fifth Third Securities, Inc., in Columbus, Ohio ($11.4 million); business assets of an unspecified value; and real property in Columbus for more than 24 years ($435,000). GRAFTECH INTERNATIONAL: S&P Lowers CCR to 'BB-'; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Rating Services said it lowered its corporate credit rating on Parma, Ohio-based GrafTech International Ltd. two notches to 'BB-' from 'BB+'. The outlook remains negative. At the same time, S&P also lowered the issue rating on the company's senior unsecured debt to 'BB-' from 'BB+', in line with the corporate credit rating. The recovery rating remains '4', indicating S&P's expectation for average (30% to 50%) recovery in the event of a default. The negative rating outlook reflects the fact that current credit measures remain weaker than those typically consistent with the indicated significant financial risk profile, including adjusted leverage above 4x. "Although we anticipate credit measures will improve and fall in line within a year, we recognize the execution risk inherent in ongoing rationalization initiatives and the price volatility in GrafTech's markets," said Standard & Poor's credit analyst Chiza Vitta. "In our view, these risks translate into more than a one in three chance that improvements in credit measures may fall short or take longer than anticipated." S&P could downgrade GrafTech if operating results remain suppressed in 2015. Specifically, if gross margins (excluding depreciation and amortization) remain below 20% or quarterly EBITDA does not climb above $30 million. This could be the result of an increasingly competitive operating environment, prolonged weakness in markets, or ongoing challenges in the Engineered Solutions segment. A stable outlook will be predicated on reducing adjusted leverage below 4x. This would most likely be associated with sales and margin expansion such that quarterly EBITDA climbs back to about $40 million without a significant increase in debt. GREEN ISLAND: Moody's Maintains Ba1 Rating on Power System Bonds ---------------------------------------------------------------- Moody's Investors Service has maintained Green Island Power Authority's (GIPA) Power System Revenue Bonds' Ba1 rating. The outlook is stable. Ratings Rationale The maintenance of the Ba1 rating and stable outlook reflect the authority's adequate liquidity and financial performance in fiscal year 2014 and status as monopoly provider of power for the Village of Green Island. Moody's notes the improved liquidity and financial metrics were largely a product of the sustained, cold winter months from December 2013 through early 2014. The Ba1 rating also considers state regulated retail rates, GIPA's indirect exposure to the wholesale electric market, high debt ratio, an extremely small and weak economic service territory, and weak governance. The Ba1 rating further reflects the authority's continued exposure to an above market power contract through December 2015 which reduces GIPA's ability to use their own lower cost hydro-generated power to satisfy approximately 50% of the Village of Green Island's power supply needs. The authority receives power from New York State Power Authority (NYPA: Aa1 stable) on a partial requirements basis and all needs over and above NYPA supplied power are provided by the New York Municipal Power Authority (NYMPA) through a contract that expires in December 2015. Outlook The stable outlook reflects Moody's expectations that debt service coverage will remain above 1.0 times in fiscal year 2015 and will improve further as the authority realizes the full benefit of self-supplying a portion of its electric power needs once the power agreement with NYMPA expires. What Could Make The Rating Go UP The rating could face upward momentum if debt service coverage is consistently above 1.3 times on a net revenue basis; if liquidity can remain above 150 days cash on hand for a sustained period and there is a change to GIPA's core business profile such that cash flow volatility is reduced. . What Could Make The Rating Go DOWN The rating could face downward pressure if GIPA fails to meet required capital expenditures associated with its hydro license renewal or should GIPA undertake the hydro expansion as allowed under the FERC license without beneficial long-term off-take contracts with strong credit quality counterparties. Strengths * Monopoly provider of essential electric service, albeit in a small service territory with below average socio-economic factors * Very competitive retail rates facilitated by a long-term contract for electricity supplied by NYPA through 2025 * Generally good operating history over the years at the hydro facility * One year debt service reserve provides liquidity support given the historical volatility in financial performance Challenges * Captive to volatile and uncertain wholesale market prices for a portion of authority's revenues * Limited history of rate hearings with cost recovery from such hearing being insufficient to sustain investment grade credit quality * Potential costly improvements as required under the hydro license renewal * Rate regulation constrains the authority's ability to timely and sufficiently increase rates * Potential costly replacement risk for turbine blades and equipment as rotor and blades have not been replaced since operations began in 1923 * Rate covenant has weak thresholds * Weak governance Rating Methodology The principal methodology used in this rating was U.S. Public Power Electric Utilities with Generation Ownership Exposure published in November 2011. HAPPY TYMES FAMILY: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Happy Tymes Family Fun Center, Inc. 2071 County Line Road Warrington, Pa 18976 Case No.: 14-19713 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Hon. Ashely M. Chan Debtor's Counsel: Jeffrey D. Servin, Esq. JEFFREY D. SERVIN, ESQUIRE 1800 JFK Boulevard, Suite #300 Philadelphia, PA 19103 Tel: (215) 665-1212 Fax: (215) 654-0357 Email: jdservin@comcast.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francis Murray, Jr., president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. HILL RD HOTEL: Case Summary & 7 Unsecured Creditors --------------------------------------------------- Debtor: Hill Rd Hotel, LLC 6075 Hill Drive Flint, MI 48507 Case No.: 14-33292 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of Michigan (Flint) Judge: Hon. Daniel S. Opperman Debtor's Counsel: Keith A. Schofner, Esq. LAMBERT LESER, ATTORNEY AT LAW 916 Washington Ave., Suite 309 Bay City, MI 48708 Tel: (989) 893-3518 Fax: (989) 894-2232 Email: kaschofner@lambertleser.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by George Cook, managing member. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb14-33292.pdf HRTEC INC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: HRTEC, Inc. 2071 County Line Raod Warrington, PA 18976 Case No.: 14-19715 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Hon. Stephen Raslavich Debtor's Counsel: Jeffrey D. Servin, Esq. JEFFREY D. SERVIN, ESQUIRE 1800 JFK Boulevard, Suite #300 Philadelphia, PA 19103 Tel: (215) 665-1212 Fax: (215) 654-0357 Email: jdservin@comcast.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francis Murray, Jr., president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. HRTEC INC: 2nd Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: HRTEC, Inc. 2071 County Line Road Warrington, PA 18976 Case No.: 14-19717 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Hon. Stephen Raslavich Debtor's Counsel: Jeffrey D. Servin, Esq. JEFFREY D. SERVIN, ESQUIRE 1800 JFK Boulevard, Suite #300 Philadelphia, PA 19103 Tel: (215) 665-1212 Fax: (215) 654-0357 Email: jdservin@comcast.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francis Murray, Jr., president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. HUTCHESON MEDICAL: US Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. trustee, the Justice Department's bankruptcy watchdog, appointed five creditors of Hutcheson Medical Center to serve on an official committee of unsecured creditors: (1) McKesson Health Solutions, Inc. Attn: Lisa R. Love 5995 Windward Parkway Alpharetta, GA 30005 Lisa.Love@McKesson.com (2) EmCare, Inc. Attn: Marc A. Bonora, Esq. 6200 South SyracusE Way ? Suite 200 Greenwood Village, CO 80111 Marc.Bonora@evhc.net (3) Padiatrix Medical Group of Tennessee, PC d/b/a Mednax Attn: Dominic J. Andreano 1301 Concord Terrace Sunrise, FL 33323 Dominic_Andreano@mednax.com MaryAnn_Moore@mednax.com (4) Joseph Decosimo & Company Attn: H. Kennedy Conner Tallan Fonancial Center ? Suite 1100 Chattanooga, TN 37402 KenConner@decosimo.com (5) Daniel & Yeager, Inc. Attn: Michael J. Williams 6767 Old Madison Pike ? Suite 690 Huntsville, AL 35806 Mike_williams@dystaffing.com Wendy_Smith-Paradis@teamhealth.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Hutcheson Medical Center Hutcheson Medical Center, Inc., operates the 179-bed hospital and related ancillary facilities, including, without limitation, a skilled nursing home and an ambulatory surgery center, located in Ft. Oglethorpe, Georgia, known as Hutcheson Medical Center. HMC leases the land and buildings that comprise the Medical Center from The Hospital Authority of Walker, Dade and Catoosa Counties. HMC and Hutcheson Medical Division, Inc., sought Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Case No. 14-42863 and 14- 42864) in Rome, Georgia, on Nov. 20, 2014. The cases are jointly administered under Case No. 14-42863. The cases have been assigned to the Honorable Paul W. Bonapfel. The Debtors are represented by Ashley Reynolds Ray, Esq., and J. Robert Williamson, Esq., at Scroggins and Williamson, in Atlanta, Georgia. The Debtors' Chapter 11 Plan and Disclosure Statement are due March 20, 2015. The appointment of a health care ombudsman is due by Dec. 22, 2014. HMC estimated $10 million to $50 million in assets and $50 million to $100 million in debt. No request has been made for the appointment of a trustee or examiner. IRACORE INT'L: Moody's Cuts CFR to Caa1, Outlook Negative --------------------------------------------------------- Moody's Investors Service downgraded Iracore International Holdings, Inc.'s corporate family rating (CFR) to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD, and senior secured rating to Caa1 (LGD4) from B3 (LGD4). The company's speculative grade liquidity rating was affirmed at SGL-3 and its ratings outlook was changed to negative from stable. Ratings Rationale "The downgrade of Iracore's ratings is driven by its weak operating results in 2014 and Moody's expectation that the recent drop in the oil price will lead to further pressure on the company's cash flows in 2015", said Darren Kirk, vice president and senior credit officer with Moody's. Iracore's Caa1 CFR primarily reflects its elevated financial leverage (Debt/ EBITDA of 9x) coupled with Moody's expectation that demand for its primary product will weaken through 2015 but that the company will maintain adequate liquidity. Iracore's pipe- lining system is mainly sold to a few large, blue chip, Canadian oil sands customers for use in critical applications. However, demand for Iracore's system has lagged Moody's prior expectations through the first half of 2014, which was a relatively robust oil price environment. As Iracore's customers reduce their capital budgets in response to the recent fall in the price of oil, Moody's believes they will increasingly seek alternatives to the Iracore system for their near term needs. These alternatives include uncoated steel pipes, which have higher ongoing costs, but require reduced upfront capital. Iracore's liquidity is adequate (SGL-3). Moody's believes the company's cash balance at September 30, 2014 ($11 million) and current availability under its asset backed lending (ABL) facility ($8 million) provide adequate capacity to fund potential working capital swings and a modest amount of negative free cash flow in a stress case scenario over the next year. Iracore's ABL matures in November 2017 and its secured notes mature in May 2018. Moody's does not expect the ABL's springing financial maintenance covenant will be triggered through 2015. Iracore's $125 million senior secured notes rank behind any usage of the ABL, however given the modest size of the liquidity facility and other unsecured liabilities relative to the notes, there are no notching implications for the notes relative to the CFR. The negative rating outlook reflects Moody's concern that Iracore's customers will curtail capital spending in 2015, causing the company's cash flows to deteriorate. Iracore's ratings could be upgraded if Moody's expected stronger sustained demand for the company's products enabling its financial leverage to remain below 4x with adequate liquidity. The ratings could be lowered if Moody's did not expect Iracore would maintain adequate liquidity. Iracore International Holdings, Inc. primarily manufactures pipe- lining systems for the oil sands mining industry. Revenues in 2013 totalled roughly $100 million. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in December 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. ITHACA ENERGY: Moody's Affirms Caa1 rating on Sr. Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service has affirmed Ithaca Energy Inc.'s B2 corporate family rating (CFR), the B2-PD probability of default rating (PDR) rating, and the Caa1 rating for its senior unsecured notes due 2019 with a loss given default assessment of LGD5 (88%), which are guaranteed on a senior subordinated basis by certain of its subsidiaries. However, the rating outlook is changed to negative. "We changed Ithaca's rating outlook to negative to reflect increased risk from lower oil prices in 2015, which we expect will result in lower cash flow with the potential for leverage to remain elevated even as spending comes down and new production comes onstream", said Tom Coleman, Senior Vice President. "We view the company's hedging of a portion of its production, adequate liquidity sources, and the advanced stages of its Stella field development as favorable factors, but remain concerned that further pricing pressure and the risk of delays or other production disruptions could affect its growth profile and the pace of leverage reduction." Ratings Rationale Ithaca Energy's B2 CFR reflects the company's small scale, high degree of production concentration, short reserve life, as well as elevated financial leverage arising from recent reserve acquisitions and high capital spending on the Greater Stella Area, its core oil and gas production hub in the UK North Sea. The Phase 1 development of Stella is expected to come onstream, probably with a slight delay into the early third quarter of 2015, as construction and commissioning are completed on the FPF-1 floating production facility. The successful start up is critical to Ithaca's ability to ramp up production, reduce unit costs and provide cash flow to reduce debt and fund further development. Cash flow support for Ithaca will come from its hedging program, which extends through mid-2016 and provides revenue support in the face of lower prices, with approximately 6,300 bbl/day of oil production hedged via swaps and puts at an average $102/barrel Brent. The company's liquidity appears adequate, coming from modest free cash flow, a reserve-based loan (RBL) with approximately $134 million of availability, an undrawn $100 million corporate facility, and other finance sources, which will be important as initial amortization of the RBL will commence at the end of 2015, absent a loan extension. Moody's expects Ithaca to reduce its leverage in 2015-2016 and reduce cash operating costs to the area of $40-$45/BOE as Stella production ramps up, providing good cash margins in the area of $35-$40/BOE. Production should increase from an average 12,500 BOE/day in 2014 to over 25,000 BOE/day by the end of 2015. However, if the 30% drop in crude prices since June 2014 is sustained in 2015, total cash flow will be lower and could delay leverage reduction and achievement of management's own Net Debt/EBITDA target of 2.0X over the development cycle. The Caa1 rating on the senior notes is two notches below the B2 Corporate Family Rating, reflecting the substantial amount of liabilities in the capital structure that rank senior to the notes. Guarantees on the notes provided by Ithaca's various subsidiary guarantors are senior subordinated obligations of those subsidiaries. Liquidity Position Ithaca's liquidity position appears adequate to fund its capital spending and acquisitions. Its main source of liquidity is a USD610 million Reserve Based Loan facility (RBL), which matures in June 2017, with $476 million outstanding as of September 30, 2014. The borrowing base (Maximum Available Amount) was reaffirmed in October 2014 and will be reviewed again in April 2015. It also has an undrawn USD100 million Corporate Facility Agreement (CFA) that matures in 2018. It also maintains a $70 million Prepayment Agreement with a Royal Dutch Shell trading entity, a borrowing facility under which Shell advances funds to various Ithaca producing subsidiaries against delivery of future production. Drivers of Rating Change Given its small scale proved reserve base and elevated leverage, Moody's does not see upward ratings momentum in the near-term. However, successful execution of its development program demonstrating production growth and debt reduction, as well as achievement of an improving cost structure, could lead to an upgrade. The B2 CFR could be pressured by delays or setbacks to the Stella field development and projected production growth. Failure to achieve a fairly rapid reduction in Adjusted Debt/Average Daily Production in 2015-2016 from a post-acquisition high of about $76,000/BOE (estimated year-end 2014) could also result in a downgrade. While we have no current indication of further acquisitions as the company focuses on the Stella area development, increased leverage to fund acquisitions in advance of expected debt reduction could also pressure the rating. The principal methodology used in this rating was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ithaca Energy Inc. is a Canadian-based independent exploration and production company with almost all of its assets and production in the United Kingdom Continental Shelf (UKCS) region of the North Sea. The company has pursued growth via acquisitions of producing field interests with a focus on appraising and developing assets that have potential for with step outs in contiguous areas. As of year-end 2013 Ithaca held 2P reserves of 58 million BOE with production averaging 11,600 BOE/day in third quarter 2014. J.C. PENNEY: May Never Recover From Sales Slump, NY Post Says ------------------------------------------------------------- James Covert at the New York Post reports that J.C. Penney Company, Inc., may never fully recover from the damage done by its former CEO Ron Johnson. Citing Goldman analyst Stephen Grambling, NY Post relates that the sales recovery has been disappointing and "while we were hopeful that JCPenney's return to its 'old' strategy would recover a sizeable portion of lost sales, recent results lead us to believe competitive changes in the industry from off-price and online will prevent management from achieving its multi-year outlook." According to NY Post, J.C. Penney CEO Mike Ullman has been trying to reverse losses and sales slides spurred by a failed revamp under Mr. Johnson, who had sought to make the Company a venue for younger, hipper shoppers. NY Post says that Mr. Ullman has had some success through restoring coupons and sales events banished by Mr. Johnson. NY Post, citing Grambling, relates that J.C. Penney's online sales increased 3.4% in the third quarter, but still lesser compared with 16.7% in the second quarter. Mr. Grambling said that spending in key categories is still lacking, the report states. According to Dave Dierking at Seeking Alpha, J.C. Penney must start delivering some real sales growth, a successful turnaround strategy should be seeing 6% growth or more at this point. Seeking Alpha says that J.C. Penney in the third quarter was expecting 2% sales growth but couldn't hit that number. Seeking Alpha states that J.C. Penney has done a reasonable job of moving sale and clearance merchandise out of the stores but it can't keep rebuilding inventory. Seeking Alpha reports that J.C. Penney continues to struggle as consumers prefer to spend their money on electronics and gadgets like the iPhone 6, tablets and TVs. The Associated Press says that analysts are closely watching how J.C. Penney fares this holiday season after growth has slowed. The report says that a slow holiday season would make investors less confident in the business. As reported by the Troubled Company Reporter on Oct. 21, 2014, Dana Blankenhorn, writing for Seekingalpha.com, reported that J.C. Penney is at risk of bankruptcy if just a few suppliers decide not to ship new product to the company's stores. About J.C. Penney J.C. Penney Company, Inc., is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. * * * The Troubled Company Reporter, on March 5, 2014, reported that Standard & Poor's Ratings Services revised its outlook on J.C. Penney Co. Inc. to stable from negative. At the same time, S&P affirmed all other ratings, including the 'CCC+' corporate credit rating, on the company. The Troubled Company Reporter, on May 21, 2014, reported that Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. at 'CCC' and assigned a Positive Outlook. On June 6, 2014, the Troubled Company Reporter said Standard & Poor's Ratings Services assigned a 'B' issue level rating to J.C. Penney Corp. Inc.'s $1.85 billion ABL revolving credit facility and $500 million senior secured first-in last-out term loan with a '1' recovery rating, indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default. S&P affirmed all other ratings, including the 'CCC+' corporate credit rating on parent company J.C. Penney Co. Inc. The outlook is stable. On the same date, Moody's Investors Service rated J.C. Penney Corporation, Inc.'s proposed asset based revolving credit facility at B1 and its proposed asset based term loan at B2. At the same time, Moody's affirmed J.C. Penney Company, Inc.'s Caa1 Corporate Family Rating ("CFR"), Caa1-PD Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. The rating outlook remains negative. In September 2014, Moody's rated J.C. Penney's proposed senior unsecured notes Caa2. At the same time, Moody's affirmed J.C. Penney Company, Inc.'s Caa1 Corporate Family Rating ("CFR"), Caa1 - PD Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. The rating outlook remains negative. Standard & Poor's, on the same month, assigned its 'CCC-' issue- level rating and '6' recovery rating to J.C. Penney Corp. Inc.'s proposed $350 million senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible recovery (0%-10%) in a payment default scenario. The company intends to use proceeds from the offering to repay debt. S&P views the proposed offering and debt repayment as credit neutral based upon expected debt levels being relatively unchanged. Likewise, Fitch has assigned a rating of 'CCC/RR4' to J.C. Penney's proposed issue of five-year $350 million senior unsecured notes. The Rating Outlook is Positive. On Oct. 1, 2014, Moody's affirmed J.C. Penney's Caa1 Corporate Family Rating, Caa1 - PD Probability of Default Rating, and senior unsecured notes. At the same time, Moody's changed J.C. Penney's rating outlook to stable from negative. The change in outlook was prompted by the successful closing of $400 million senior unsecured notes which will be used to fund the partial tender offer for J.C. Penney's $200 million 6.875% notes due October 2015, $200 million 7.675% notes due August 2016, and $285 million 7.95% notes due April 2017. At the same time, Moody's changed the Speculative Grade Liquidity rating to SGL-2 from SGL-3 due to improved operating performance and extension of the debt maturity schedule. JAMES E. COFIELD: Court Dismisses Appeal for Lack of Jurisdiction ----------------------------------------------------------------- Judge Louise W. Flanagan of the U.S. District Court for the Eastern District of North Carolina dismisses for lack of jurisdiction an appeal by the Plaintiff from an order of the U.S. Bankruptcy Court denying its motion for summary judgment in the adversary proceeding captioned Cadles of Grassy Meadows II, LLC, Plaintiff, v. James E. Cofield, Jr., Case No. 12-00227-8-SWH, 2014 WL 879684. The appeal case is Cadles of Grassy Meadows II, LLC v. James E. Cofield, Jr., Case No. 4:14-CV-00086-FL. In its order denying summary judgment on March 5, 2014, the Bankruptcy Court determined summary judgment was not warranted because the issue of willful injury had not been previously litigated. The Plaintiff argues on appeal that summary judgment is warranted on the basis of collateral estoppel, because the 1993 judgment of conversion precludes relitigation of the facts required to establish willful and malicious injury. The Defendant argues the District Court lacks jurisdiction to hear the appeal, and in any event, that the appeal is without merit. The District Court agrees with the Defendant that it lacks jurisdiction, and, thus, dismisses the appeal. The dispute stems from a mid-1980's business arrangement between Coolidge Bank and Trust Company and Malmart Mortgage Company, an entity of which the debtor was president. Under the arrangement, Coolidge advanced funds to Malmart, which Malmart used to make consumer construction loans. The mortgages securing such loans were pledged to Coolidge as security. In 1987, Coolidge brought suit against the Debtor, in his individual capacity, among others, alleging conversion and unfair or deceptive trade conduct in connection with the satisfaction of three mortgages without Coolidge's consent and without repayment to Coolidge. After a trial in the Massachusetts Superior Court, a jury found that the debtor converted funds and engaged in unfair or deceptive trade conduct, and awarded Coolidge compensatory damages of $324,000. The Massachusetts court entered an order to this effect on June 2, 1993, and additionally found that treble damages were not warranted, instead awarding double compensatory damages pursuant to the relevant statute, in the amount of $648,000. The Judgment was subsequently assigned to Cadles. A full-text copy of the November 24, 2014 Order is available at http://bit.ly/1z4nZiyfrom Leagle.com. James E. Cofield, Jr. filed a Chapter 11 bankruptcy petition Bankr. E.D.N.C. Case No. 11-02034) on March 17, 2011. On April 6, 2012, the case was converted to one under Chapter 7 of the Bankruptcy Code. JAMES LEE NICKESON: Cross-Motions for Partial Judgment Denied ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Dakota denied cross-motions for partial summary judgment in the Chapter 7 bankruptcy case of James Lee Nickeson, Case No. 13-10137. The Motions for Partial Summary Judgment were filed by Chapter 7 Trustee-Plaintiff Forrest C. Allred and Defendants Camille Nickeson and James L. Nickeson Farms, Inc. The Trustee's adversary proceeding is captioned Forrest C. Allred, Trustee v. Camille Nickeson; Lee Nickeson; James L. Nickeson Farms, Inc.; and LLJ, LLP, Case No. 14-1004. The Court ruled that a separate order will be entered setting a final pre-trial conference, during which the Court will set a trial date on the counts of the Trustee's complaint involving Defendants Camille Nickeson and Farm Corporation. Trustee Allred has moved for partial summary judgment, asking the Court to grant judgment against Defendants Camille Nickeson and Farm Corporation, cancel or avoid the Debtor's transfer of shares in Farm Corporation to Camille Nickeson, and recover those shares for the bankruptcy estate. Defendants Camille Nickeson and Farm Corporation responded to Trustee Allred's motion and also filed their own motion for partial summary judgment. After receipt of briefs and other supporting documents, both motions were taken under advisement. Defendants Camille Nickeson and Farm Corporation contend Trustee Allred's claims in counts I through IV regarding fraud do not pass muster under Ruled 9(b) of the Federal Rules of Civil Procedure because they were not pled with particularity. The Court opined that their argument is without merit. The Court noted that foremost, the rule does not apply to the allegations of constructive fraud encompassed in counts II and IV. The Court ruled that Trustee Allred's complaint presented no obstacles to the Defendants' ability to answer. The Court also ruled that for two reasons, it will not dismiss counts III and IV, as requested by Defendants in their motion for partial summary judgment -- (1) Genex Cooperative, Inc.'s security agreement did not include the Debtor's shares of Farm Corporation, which are a "security," categorized as "investment property," as part of its collateral, and (2) even if Genex's security interest did attach to the Debtor's Farm Corporation shares, the present record does not demonstrate the shares were fully encumbered. A full-text copy of the Decision dated November 25, 2014, is available at http://bit.ly/1youiL1from Leagle.com. About James Lee Nickeson James Lee Nickeson sought Chapter 11 bankruptcy protection in (Bankr. D.S.D. Case No. 09-10263) on December 3, 2009. On June 12, 2012, 16 months after confirmation of a plan, the Debtor moved for dismissal of his chapter 11 case, and the Court dismissed the Chapter 11 case on July 9, 2012. On August 27, 2013, the Debtor filed a Chapter 7 petition in bankruptcy (Bankr. D.S.D. Case No. 13-10137). Forrest C. Allred was appointed Chapter 7 Trustee. James L. Nickeson Farms, Inc. was incorporated in 2002. The Debtor was the lone incorporator and sole director. KEY ENERGY: S&P Raises Rating on $675MM Sr. Unsec. Notes to 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its issue rating on Key Energy Services Inc.'s $675 million senior unsecured notes due 2021 to 'BB-' from 'B+', and revised its recovery rating on this debt to '2' from '4'. The issue rating is one notch above the company's 'B+' corporate credit rating, which remains unchanged. The '2' recovery rating indicates S&P's expectation for substantial recovery (70% to 90%) in the event of a payment default. The outlook is negative. The upgrade on the notes and revised recovery rating reflects lower committed borrowing capacity on Key's revolving credit facility due 2016, and S&P's view that lenders' recovery prospects have improved as a result. Commitments under its revolving credit facility were reduced to $400 million, from $550 million previously. Commitments will be reduced further (to $350 million) on July 1, 2015. The revised commitments are part of recent amendments to Key's credit facility. This includes amended financial covenants that provide the company additional covenant cushion and financial flexibility. Covenant amendments include these: -- The minimum interest coverage ratio was reduced to 2.75x from 3x, which will step back up to 3x at the end of 2015. -- The maximum debt-to-capitalization ratio was increased to 55% from 45% through maturity in early 2016. -- The company is allowed to add back to its bank-calculated EBITDA up to $50 million of costs related to the ongoing Foreign Corrupt Practices Act (FCPA) investigation. RATINGS LIST Key Energy Services Inc. Corporate Credit Rating B+/Negative/-- Rating raised; Recovery rating revised To From Key Energy Services Inc. Senior Unsecured BB- B+ Recovery Rating 2 4 KANGADIS FOOD: Cleared to Exit Bankruptcy After Settling Lawsuit ---------------------------------------------------------------- Sara Randazzo, writing for Daily Bankruptcy Review, reported that olive importer Kangadis Food Inc. won approval to leave bankruptcy after reaching a deal to pay $2 million to get rid of a class- action lawsuit accusing it of marketing an industrially processed product as pure olive oil. According to the report, citing Adam Rosen, an attorney for the company, Judge Robert Grossman in U.S. Bankruptcy Court in Central Islip, N.Y., signed off on Kangadis' creditor-repayment plan during a hearing. About Kangadis Food Formed in 2003, Kangadis Food Inc. is an importer of olives and other European delicacies, and a leading distributor of olive oil. The Debtor sells its products under the brand names "Capatriti," "Porto," "Olio Villa," "Zorba," and "Kivotos". The company is 100% owned by the Kangadis family. The company says that for the past six years, the popularity of its olive oil product sold under the brand name "Capatriti" has grown over time, and it is one of the leading brands in the New York metropolitan area. As of its bankruptcy filing, Kangadis Food employs 51 people, and operates from a 75,000 square foot facility located in Hauppauge, New York, that serves as a warehouse, production facility, and shipping center. Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in New York, on June 6, 2014. Themistoklis Kangadis signed the petition as chief executive officer. As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had total assets of $12,259,802 and total liabilities of $6,136,456, which amount does not include any disputed claim relating to the class action. Judge Robert E. Grossman presides over the case. Silverman Acampora LLP, in Jericho, New York, serves as the Debtor's counsel. LAKELAND INDUSTRIES: Incurs $2.5-Mil. Net Loss in Third Quarter --------------------------------------------------------------- Lakeland Industries, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.50 million on $25.09 million of net sales for the three months ended Oct. 31, 2014, compared to a net loss of $1.83 million on $22.78 million of net sales for the same period a year ago. For the nine months ended Oct. 31, 2014, the Company reported a net loss of $2.88 million on $73.21 million of net sales compared to net income of $1.49 million on $69.16 million of net sales for the same period during the prior year. As of Oct. 31, 2014, the Company had $86.76 million in total assets, $31.80 million in total liabilities and $54.95 million in total stockholders' equity. As of Oct. 31, 2014, the Company had cash and cash equivalents of approximately $7 million and working capital of $45.5 million. Cash and cash equivalents increased $2.4 million and working capital increased $7 million from Jan. 31, 2014, primarily as a result of the net cash proceeds of $6.6 million from the October 2014 private equity financing and cash management. International cash management is affected by local requirements and movements of cash across borders can be slowed down significantly. Christopher J. Ryan, president and chief executive officer of Lakeland Industries, stated, "On a consolidated basis for Lakeland's growing global operations, the strategies that have been implemented and the favorable trends we had begun to experience in prior quarters have continued to be realized in our most recently completed quarter and are now even more pronounced, particularly in key areas of our operating performance and financial metrics. "Driven by increases in domestic and foreign demand, consolidated sales in the third quarter grew by 10% as compared with last year. Sales increases primarily reflect the growth being experienced by Lakeland with its traditional customers. For the second consecutive quarter, our gross margin as a percentage of sales set another Company record. While we increase spending in most of international operations to accommodate future growth and market share attainment, management is presently planning a major restructuring for Brazil as more fully disclosed in our Form 10-Q. In Brazil, for the third consecutive quarter, operating losses declined by approximately 70% as compared with prior year periods and our consolidated operating profit improved to $0.7 million in the third quarter of fiscal 2015, up from a loss of $1 million in the prior year period. "The positive momentum in cash flow generated from our consolidated operations along with the net proceeds of the equity offering completed in October 2014 enabled us to increase our cash balance at the end of the quarter by 14% while reducing our debt by approximately 50% since the end of the fiscal second quarter. We remain encouraged by the global growth trends and our strengthening operational and financial condition which should enable us to drive improved profitability from the leverage in our business. "Furthermore and as previously disclosed, Lakeland has experienced a significant increase in order activity from demand relating to the Ebola crisis. The main impact from Ebola-related orders will start to be realized in our fiscal 2015 fourth quarter ended January 31, 2015. To the extent that this demand continues, we will be able to drive incremental leverage and profits beyond the improvements as reported in our third quarter." A full-text copy of the Form 10-Q is available for free at: http://is.gd/tSVTY5 About Lakeland Industries Ronkonkoma, N.Y.-based Lakeland Industries, Inc., manufactures and sells a comprehensive line of safety garments and accessories for the industrial protective clothing market. The Company reported a net loss of $26.3 million on $95.1 million of net sales for the year ended Jan. 31, 2013, as compared with a net loss of $376,825 on $96.3 million of sales for the year ended Jan. 31, 2012. In their report on the consolidated financial statements for the year ended Jan. 31, 2013, Warren Averett, LLC, in Birmingham, Alabama, expressed substantial doubt about Lakeland Industries' ability to continue as a going concern. The independent auditors noted that Company is in default on certain covenants of its loan agreements at Jan. 31, 2013. LAKSHMI HOSPITALITY: US Trustee to Hold Creditors' Meeting Jan. 27 ------------------------------------------------------------------ The U.S. trustee, the Justice Department's bankruptcy watchdog, will continue the meeting of creditors of Lakshmi Hospitality Group, LLC, on Jan. 27, 2015, at 10:00 a.m. The meeting will be held at 402 W. Broadway, Emerald Plaza Building, Suite 660 (B), Hearing Room B, in San Diego, California. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Lakshmi Hospitality Group Lakshmi Hospitality Group, LLC, owner of a hotel in Fenton, Missouri, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Cal. Case No. 14-07199) in San Diego, California, on Sept. 5, 2014. Plyush Mehta signed the petition as authorized signatory. The Debtor disclosed total assets of $12.7 million and total liabilities of $8.1 million. The case is assigned to Judge Margaret M. Mann. The Debtor has tapped J. Bennett Friedman, Esq., at Friedman Law Group, P.C., in Los Angeles, as counsel. LBI MEDIA: Moody's Assigns Caa3 Rating on New $204MM Notes ---------------------------------------------------------- Moody's Investors Service assigned a Caa3 rating to LBI Media, Inc.'s new $204 million 11.5%/13.5% PIK Toggle 2nd Priority Notes due 2020. The new notes will be used in the proposed exchange of LBI Media's 8.5% Senior Subordinated Notes due 2017 ($54 million outstanding) and existing 2nd Priority Notes due 2020 ($136 million outstanding) as well as to fund accrued interest, fees, related expenses, and the addition of $6.8 million to balance sheet cash. Moody's also affirmed the Caa2 Corporate Family Rating, Caa2-PD Probability of Default Rating and B3 rating on the 10% Senior Secured Notes due 2019 ($220 million outstanding). The outlook remains negative. Assigned: Issuer: LBI Media, Inc. NEW $204 Million 11.5%/13.5% PIK Toggle 2nd Priority Subordinated Notes due 2020: Assigned Caa3, LGD5 Affirmed: Corporate Family Rating: Affirmed Caa2 Probability of Default Rating: Affirmed Caa2-PD $220 Million 10% Senior Secured Notes due 2019: Affirmed B3, LGD2 Outlook: Outlook, Negative The assigned ratings are subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to Moody's. We will withdraw the Ca rating on the company's existing 8.5% Senior Subordinated Notes and Caa3 rating on the existing 2nd Priority Subordinated Notes upon repayment. Ratings Rationale The Caa2 corporate family rating reflects very high leverage of 15.2x debt-to-EBITDA as of September 30, 2014 (including Moody's standard adjustments), an increase compared to leverage of 14.7x at FYE2013, but improved from over 20x at FYE2012. Annual EBITDA has increased by 57% for LTM September 30, 2014 compared to 2012 levels supported by growth in the radio segment which more than offset the negative drag caused by television operations. Despite a 4% total revenue decline in 3Q2014, Moody's expects ratings improvement in key demos during prime time hours for EstrellaTV will drive growth in the networks' ad revenue over the next 12 months and contribute to reducing EBITDA losses for the TV segment. High margin retransmission fees from increased distribution of the Estrella network will also start contributing to reduce TV segment losses, and there will be little offset given the absence of significant reverse compensation typically paid by broadcasters. Moody's expects the radio segment's relatively stable performance combined with the reduction in TV segment's EBITDA losses will contribute to improvement in debt-to-EBITDA over the next 12 months despite PIK accretion on certain debt instruments. The proposed exchange is expected to close by year end and pushes out significant debt maturities to 2020 and extends the PIK election on the 2nd Priority Notes by one year to November 2016. The transaction reduces cash interest payments by an estimated $11 million through November 2016 and adds $6.8 million in cash to the balance sheet. Although these benefits better position the company's liquidity and maturity profile, LBI Media still needs to address remaining near term maturities including the revolving credit facility which expires in March 2016 ($37 million drawn as of September 30, 2014) followed by the 2017 maturity of the 11% Holdco Notes ($25 million outstanding). Liquidity will remain weak with tight EBITDA coverage of cash interest payments and generally breakeven free cash flow. To the extent free cash flow is negative, revolver advances are limited given only partial availability under the $50 million revolver. Absent debt reduction, Moody's expect cash interest expense to increase given the 11% Holdco Notes due 2017 require cash interest payments starting April 2016. Debt ratings reflect ongoing media fragmentation, increasing competition in Spanish language broadcasting from existing and new competitors, and the cyclical nature of radio and television advertising demand. Ratings are supported by the company's presence in large Hispanic markets and expectations for above average population and buying power growth for U.S. Hispanics. Although the company has radio and TV assets in certain of the largest MSA's in California and Texas, ratings are constrained by its dependence on these two states for more than 70% of total revenues. Current leverage is unsustainable and, absent EBITDA growth or debt reduction from the sale of non-core assets, the risk of another distressed exchange remains high. The negative outlook incorporates Moody's view that, despite expected revenue growth for television operations over the next 12 months, leverage will remain very high with debt-to-EBITDA ratios above 11x (including Moody's standard adjustments) and liquidity will be weak. The negative outlook also reflects the need for LBI Media to refinance the revolving credit facility prior to its March 2016 expiry followed by the 2017 maturities of the 11% Holdco Notes. Management has been focused on improving liquidity and recently completed the sale of KHJ-AM with proceeds of $9.2 million. Although the proposed exchange would complete an important step in improving liquidity by pushing out the maturity of the 8.5% senior subordinated notes ($54 million outstanding) three years to 2020, adding $6.8 million of balance sheet cash, and reducing cash interest payments, the expected improvement is not sufficient to change the outlook to stable given remaining near term maturities. Ratings could be downgraded if the company is not able to reduce leverage from current levels or if it is unable to address remaining near term maturities. Ratings could also be downgraded if the economy weakens unexpectedly or heightened competition results in reduced advertising revenue in one or more of LBI Media's key radio or television markets, or if the company fails to further grow television revenue and EBITDA. The outlook could be changed to stable if Moody's believe LBI Media will be able to address remaining near term debt maturities and if revenue growth or debt repayment result in improving debt-to-EBITDA (including Moody's standard adjustments) with at least adequate liquidity including free cash flow-to-debt ratios being sustained above 1%. LBI Media, Inc., headquartered in Burbank, CA, operates Spanish- language broadcasting properties including 17 radio stations (13 FM and 4 AM generating over 47% of LTM September 2014 reported revenue) and 10 television stations plus the EstrellaTV Network (roughly 53% of LTM September 2014 reported revenue). EstrellaTV is a Spanish-language television broadcast network that was launched in the fall of 2009. Through EstrellaTV, the company is affiliated with television stations in 46 DMAs comprising 78% of U.S. Hispanic television households. Jose Liberman founded the company in 1987, together with his son, Lenard Liberman. Shareholders include Jose Liberman, Lenard Liberman, Oaktree Capital, and Tinicum Capital. The dual class equity structure provides the Liberman's with 94% (undiluted) of voting control between Jose Liberman (24%) and Lenard Liberman (70%). Revenue through the 12 months ended September 30, 2014 totaled roughly $135 million. The principal methodology used in these ratings was Global Broadcast and Advertising Related Industries published in May 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. LEVEL 3: Southeastern Asset Reports 16.5% Stake as of Dec. 10 ------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Southeastern Asset Management, Inc., and its affiliates disclosed that as of Dec. 10, 2014, they beneficially owned 55,478,553 shares of common stock of Level 3 Communications, Inc., representing 16.5 percent of the shares outstanding. The reporting persons previously disclosed beneficial ownership of 48,481,997 shares or 21.7 percent at Dec. 31, 2013. A full-text copy of the regulatory filing is available at http://is.gd/5LSnes About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 incurred a net loss of $109 million in 2013, a net loss of $422 million in 2012, and a net loss of $756 million in 2011. As of Sept. 30, 2014, the Company had $13.98 billion in total assets, $12.33 billion in total liabilities and $1.64 billion in stockholders' equity. * * * In June 2014, Fitch Ratings upgraded the Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary Level 3 Financing, Inc. (Level 3 Financing) to 'B+' from 'B'. "The upgrade of LVLT's ratings is supported by the continued strengthening of the company's credit profile since the close of the Global Crossing Limited (GLBC) acquisition, positive operating momentum evidenced by expanding gross and EBITDA margins, and ongoing revenue growth within the company's Core Network Services (CNS) segment and its position to generate meaning FCF," Fitch stated. In June 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Level 3 to 'B' from 'B-'. "The upgrade reflects improved debt leverage, initially from the acquisition of the lower-leveraged Global Crossing in October 2011, and subsequently from realization of the bulk of what the company expects to eventually be $300 million of annual operating synergies," said Standard & Poor's credit analyst Richard Siderman. As reported by the TCR on Oc. 31, 2014, Moody's Investors Service upgraded Level 3 Communications Inc.'s corporate family rating (CFR) to B2 from B3. Level 3's B2 CFR is based on the company's ability to generate relatively modest free cash flow of between $250 million and $300 million in 2016 and, inclusive of debt which is presumed to be converted to equity in 2015, to de-lever by approximately 0.5x to 4.8x (Moody's adjusted) by the end of 2016. MACK-CALI REALTY: Moody's Lowers Preferred Shelf Rating to (P)Ba1 ----------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured debt rating of Mack-Cali Realty L.P. to Baa3 from Baa2 due to the deterioration in the operating performance of its core office portfolio. The REIT's weak earnings have translated into to credit metrics than are no longer commensurate with a Baa2 unsecured rating. In the same rating action, Moody's downgraded Mack-Cali Realty's Senior Secured shelf to (P)Baa3 from (P)Baa2, senior subordinated shelf rating to (P)Ba1 from (P)Baa3 and the preferred stock shelf rating of Mack-Cali Realty Corporation, the parent company of Mack-Cali Realty, to (P)Ba1 from (P)Baa3. The following ratings were downgraded, outlook is stable Mack-Cali Realty Corporation: preferred shelf to (P) Ba1 from (P) Baa3 Mack-Cali Realty, L.P. -- senior unsecured to Baa3 from Baa2; senior unsecured shelf to (P) Baa3 from (P) Baa2; senior subordinated shelf to (P) Ba1 from (P) Baa3. Ratings Rationale Mack-Cali's office portfolio occupancy declined to 83.7% as of September 30, 2014, from 87.2% at year-end 2012. Moody's remains concerned about the high degree of industry and asset concentration in the REIT's portfolio. New Jersey assets account for over 73% of the portfolio annual base rent (ABR) and finance, securities and insurance firms account for 23.5% of (ABR). According to CBRE Econometric Advisors, the vacancy rate in the Newark submarket was 19.5% as of third quarter 2014. Weak market conditions have also resulted in lower rent realization on renewals; Mack-Cali reported a 4.8% drop in lease rates for renewals in 3Q2014. Due to these factors, net debt to recurring EBITDA increased to 7.3x at 3Q2004, from 5.8x at 3Q2013 and the fixed charge coverage declined to 2.3x, from 2.6x in the same period. Mack-Cali's current ratings also reflect the firm's solid balance sheet fundamentals and liquidity position supported by ample bank line capacity and sizeable unencumbered asset base. The REIT has a laddered debt maturity schedule with $220 million due in 2015 and $333 million due in 2016; total outstanding debt is $2.2 billion. The REIT's unencumbered asset base is approximately 65% of gross assets. Mack- Cali reduced its dividend payout to about $60million a year from $150 million in 2013, a move which would help maintain organic capital growth. Since the 2012 acquisition of Roseland, expansion into multi- family housing has been an important part of Mack-Cali's business strategy. In 2014, the multi-family portion of the portfolio excluding unconsolidated joint ventures accounted for about 4.0% of revenues. Mack-Cali has also invested in other joint venture projects including seven properties that are stabilized assets, three assets in lease-up and seven assets that are being developed. The REIT plans to invest approximately $100 million in new multi-family development projects in 2015. Moody's believes that Mack-Cali's success rate in the multi-family segment would be a key factor influencing profitability and its credit metrics over the 18 to 24 months. The stable outlook for the rating incorporates the expectation that credit metrics will at least remain at the current levels in 2015. Change in portfolio mix, growth in the multi-family segment, and rationalization of the expense base would likely produce improvement in leverage and coverage over 12-24 month timeframe. Moody's stated that upward rating movement would result from fixed charge coverage of at least 2.5x on a sustained basis, net debt/EBITDA close to 6.0x on a consistent basis, no single MSA ABR greater than 20% of aggregate ABR and successful build out of the multi-family platform. Downward rating pressure would likely result from a combination of the following factors: fixed charge coverage falling below 2.0x, net debt/EBITDA remaining above 7.0x, secured debt approaching 20% of gross assets, or any substantial increase in Mack-Cali's geographic or sector concentration. Mack-Cali Realty Corporation (NYSE: CLI) is an office REIT headquartered in Edison, New Jersey, USA which provides management, leasing, development, construction and other tenant- related services. Mack-Cali owns or has interests in 282 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 31.5 million square of commercial space and 16 multi-family properties containing 4,940 apartment homes. MACKEYSER HOLDINGS: Dec. 15 Hearing on Settlement Agreement ----------------------------------------------------------- The Bankruptcy Court will convene a hearing on Dec. 15, 2014, at 2:00 p.m., to consider the motion to approve the settlement agreement reached by MacKeyser Holdings, LLC, et al., with the Official Committee of Unsecured Creditors, the Debtors' pre- and post-petition lenders Health Evolution Partners Fund I, L.P., and Series F of Health Evolution Partners Co-Invest, LLC, Essilor of America, Inc. and its affiliated entities, and Essilor Laboratories of America. According to the Debtors, the settlement agreement vitiates the risk and costs associated with continued litigation between the estate parties and Essilor that could have increased the amount of the Essilor secured claim and imperiled the Debtors' and the Committee's ability to seek confirmation of the Plan. The agreement provides for, among others: 1. the Essilor Secured Claim will be allowed in the Bankruptcy Cases in the amount of $3,750,000; and 2. General Unsecured Claim will be an allowed unsecured claim in the Bankruptcy cases in the amount of $3,161,565. A copy of the agreement is available for free at: http://bankrupt.com/misc/MackeyserH_662_motionsecuredlenders.pdf About MacKeyser Holdings MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The Official Committee of Unsecured Creditors retained Cooley LLP as lead counsel; Klehr Harrison Harvey Branzburg LLP as co- counsel; and Giuliano, Miller & Company, LLC as financial advisor. MARITIME TELECOMMUNICATIONS: S&P Affirms 'B-' CCR; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' corporate credit rating on Miramar, Fla.-based Maritime Telecommunications Network Inc. (MTN). The outlook is stable. At the same time, S&P affirmed the 'B+' issue rating, with a recovery rating of '1', on MTN's senior secured debt. "The rating action reflects our revised assessment of MTN's liquidity to 'less than adequate' from 'adequate' based on our expectation that its EBITDA cushion under its tightening bank loan leverage covenant will remain under 10% through 2015," said Standard & Poor's credit analyst Catherine Cosentino. S&P assess MTN's business risk profile as "vulnerable," reflecting the loss of revenue from its two largest customers over the last two years, which underscores the risk of MTN's concentration among a small number of major customers with significant pricing power. Other business risk factors include its narrow scope of business and uncertain long-term growth prospects from new business lines, which some stability from long-term contractual revenues partially offsets. The outlook is stable, and reflects S&P's expectation that EBITDA generated from the current contract base will enable the company to meet its tightening covenant, albeit with very limited cushion. S&P could lower the ratings if it revises its liquidity assessment to "weak", which would be based on S&P's expectation of a covenant breach. This could occur if EBITDA margins deteriorate from current levels due to incremental competitive pricing pressure for contract renewals, particularly for bandwidth. A downgrade would also reflect less confidence that the company could rely on unrestricted cash or parent equity infusions to avoid a covenant breach. An upgrade is unlikely during the next 12 months based on the company's "aggressive" financial risk profile and relatively limited liquidity due to its tight bank loan covenants. For a rating upgrade, MTN would need to profitably expand its other business lines and increase sales of its Nexus product. However, such business improvement would also have to provide sufficient margin improvement to enable the company to meet its tightest bank loan covenant with at least 15% on-going EBITDA cushion. MATAGORDA ISLAND: Dec. 16 Hearing on Bid for Case Conversion ------------------------------------------------------------ The Bankruptcy Court will convene a hearing on Dec. 16, 2014, at 10:00 a.m., to consider the motion to convert or dismiss the Chapter 11 case of Matagorda Island Gas Operations, LLC. On Dec. 5, Henry G. Hobbs, Jr., Acting U.S. Trustee for Region 5, filed a motion asking that the Court convert the case to Chapter 7, or in the alternative, dismiss it for "cause.: The U.S. Trustee has repeatedly asked the Debtor to obtain and provide proof of insurance as required by the order to the Debtor starting with the initial Debtor interview on Sept. 24, 2014, and continuing at the 341 Meetings on Oct. 7, and Nov. 4. In 'addition, the attorney and the analyst for the U.S. Trustee have contacted Debtor's counsel several times requesting proof of insurance. According to the U.S. Trustee, to date, the Debtor has not provided proof to that (1) the Debtor has general liability insurance and (2) all assets are covered by property insurance. About Matagorda Island Matagorda Island Gas Operations, LLC, filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-51099) in Lafayette, Louisiana, on Sept. 3, 2014. The case is assigned to Judge Robert Summerhays. The Debtor has tapped Lugenbuhl, Wheaton, Peck, Rankin & Hubbard as counsel. The Debtor disclosed $890,551,080 in assets and $26,147,777 in liabilities as of the Chapter 11 filing. MAUDORE MINERALS: Posts Net Loss of $19.7MM in Third Quarter ------------------------------------------------------------ Maudore Minerals Ltd. On Dec. 10 announced its financial results for the third quarter ended September 30, 2014. Highlights for Q3-14 The Corporation implemented a strategic review of its options for funding continued development of the Sleeping Giant mine and its exploration properties. To facilitate this review, the Corporation retained Clarus Securities Inc. and implemented the following steps at the Sleeping Giant operation: All major mine development and diamond drilling programs were placed on hold on June 26; A 54% reduction in work force was effected, which allowed for test mining in three of the new zone stopes to validate resource reconciliation of these new areas, which test mining was completed with positive results; Despite these positive results, it was determined that there was insufficient scale to create a viable long-term recovery plan to full production levels without additional development into new areas; and The Corporation continued with custom milling operations for a third party through the end of Q3-14. During the strategic review and in parallel to the operations, peer and major gold producing companies were targeted for potential strategic business opportunities; With the depressed metal prices, lack of readily available funding opportunities in the market in general and the impact of these conditions on all gold producers, the Corporation received very little encouragement that a beneficial strategic alternative existed at this time; Consequently, on September 8, the Corporation and its subsidiary Aurbec Mines Inc., filed a Notice of Intention to make a proposal under the Bankruptcy and Insolvency Act (Canada) and the Corporation and Aurbec began work on developing a proposal for their creditors; Samson Belair/Deloitte & Touche Inc. has been appointed as the trustee in the Proposal proceedings of Maudore and Aurbec, and in that capacity is monitoring and assisting the companies in their restructuring efforts; Sleeping Giant's underground mining and surface ore processing were all shut down and the operations were placed into care and maintenance by the end of November. Financial results Revenues of $3.8 million in Q3-14 coming from the sale of gold at the Sleeping Giant mine and custom milling. Net loss of ($19.7) million in Q3-14, or ($0.23) per share, compared with a net loss of ($2.1) million, or ($0.05) per share, in Q3-13. Resignation of CFO Following this filing of the third quarter results, Mrs. Claudine Bellehumeur has tendered her resignation as Chief Financial Officer of the Corporation. "Claudine's contribution to our management team has been invaluable as we worked to wind down the operations in an orderly and responsible fashion" said Mr. Fowlie. "She was often the 'Face of Maudore' to the community, the workforce, and other stakeholders, and always approached these challenges with a sense of fairness and respect for all involved. We thank her for her tireless efforts on behalf of Maudore and Aurbec." Mr. George Fowlie has been appointed by the Board as interim Chief Financial Officer to replace Mrs. Bellehumeur, effectively immediately. Cease Trading Order Further to its press release of December 3, 2014, management is in discussions with the relevant securities regulatory authorities in order to have the cease trade order against its shares lifted now that the Corporation's financial statements for the nine months ended September 30, 2014 have been filed. About Maudore Minerals Ltd. Maudore is a Quebec-based junior gold company with mining and milling assets as well as more than 22 exploration projects. Five of these projects are at an advanced stage of development with reported current and historical resources and mining. Currently, all the Corporation's operating assets are on care and maintenance awaiting a significant change in the gold market. The Corporation's exploration projects span some 120 km, east-west, of the underexplored Northern Volcanic Zone of the Abitibi Greenstone Belt and cover a total area of 1,285 km2, with the Sleeping Giant Processing Facility within trucking distance of key development projects. MCGRAW-HILL SCHOOL: Fitch Affirms 'B' Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) for McGraw-Hill School Education Holdings, LLC (MHSE) at 'B' and the rating on the senior secured term loan at 'BB/RR1'. The Rating Outlook is Stable. MHSE is the K-12 educational content and test assessment business of McGraw-Hill Education (MHE). MHSE announced its intention to dividend $100 million its shareholders, including funds affiliated with Apollo Global Management (Apollo), the sponsor, which will require an amendment to the Restricted Payments (RP) covenants in the credit agreement for its $250 million senior secured term loan due 2019. MHSE proposes to create a new RP basket specifically for this dividend, and the amendment will require 51% lender approval. Fitch believes MHSE has sufficient liquidity to execute the dividend and continue to invest in its business within the context of its current rating. Funds affiliated with Apollo acquired McGraw-Hill Companies Inc.'s education business for $2.4 billion in March 2013. Apollo contributed $1 billion in cash to complete the acquisition, approximately 40% of the transaction value. MHSE's proposed dividend, along with its $444 million December 2013 and MHGE Parent, LLC's $389 million July dividend, will increase shareholders' cash return to $933 million. The ratings reflect Fitch's belief that the current capital structure is not permanent and, that over the long term MHSE would carry higher levels of debt on its balance sheet which may be used for further equity returns or acquisitions. However, Fitch does not expect additional leveraging transactions in the near- to mid- term. The term loan benefits from a first-priority lien on all non- asset-backed loan (ABL) collateral assets and has a second lien on the ABL collateral assets. Between the two collateral groups, materially all the assets of MHSE secure the term loans and the $150 million ABL facility in either a first-lien or second-lien position. The term loans will also be guaranteed by the same subsidiaries that guarantee the ABL facility. The guarantors are the domestic wholly-owned subsidiaries of MHSE, which make up a material portion of the company's operations. McGraw-Hill School Education Intermediate Holdings will also provide a guarantee. The term loan amortizes 1% per annum and matures in 2019. There is no mandatory excess cash flow sweep. MHSE has an uncommitted option to increase the term loan by $75 million and may increase the term loans for a higher amount, limited by a Net First Lien Leverage ratio of 2.5x for parity debt and a 4x limit for term loans junior to the secured term loans. KEY RATING DRIVERS MHSE is one of three leading K-12 educational content providers. Fitch believes that Pearson, Houghton Mifflin Harcourt (HMH) and MHSE hold more than 80% of the U.S. K-12 text book publishing market. Fitch believes MHSE and its peers have endured a period of cyclical weakness. State and municipal revenues and education budgets are improving. In addition, the adoption of Common Core State Standards (CCSS) for English language arts and math has driven demand for new textbook, educational materials and digital learning solutions. Fitch expects MHSE to continue investing in its digital products, including through small bolt-on acquisitions. In addition, the company refocused its salesforce to place it in a position to better sell its digital products. These investments and salesforce initiatives allowed MHSE to benefit in the rebound in the K-12 educational market. While Fitch expects MHSE should be able to at least defend its existing market share, management shifted its strategy to focus on bottom line growth, versus historically focusing primarily on top line growth. In 2014, MHSE decided not to participate in Requests for Proposals (RFP) that would not generate a sufficient return. Fitch believes MHSE's overall market share continues to decline, albeit at a much slower pace than in prior years. Fitch's base case model assumes flat- to slightly positive GAAP revenue growth in 2014 and 2015. Fitch's base case demonstrates that the company can deliver lower revenue growth and still maintain current ratings. Based on Fitch's base case, MHSE is expected to generate $100 million to $125 million in free cash flow (FCF before dividends) in 2014 and 2015. The ratings reflect Fitch's expectation that FCF will be dedicated towards dividends, acquisitions and organic investments and that most acquisitions will be small tuck-in acquisitions. With the acquisition of Engrade in Feb. 2014, Fitch believes there is no obvious hole in MHSE's portfolio of products that would require a material acquisition. Investments into adjacent K-12 educational markets may provide diversity away from highly cyclical state and local budgets. LIQUIDITY, FCF and LEVERAGE Based on Fitch's base case, Fitch-calculated funds from operations (FFO) adjusted leverage is expected to be approximately 2.1x at the end of 2014, and remain flat to slightly up in 2015 and 2016. Adjusting EBITDA for deferred revenue, one-time items and deducting plate expenditures, gross leverage is expected be in the 1.8x range in 2014 and 2015. As of Sept. 30, 2014, liquidity was supported by $202 million in cash and its undrawn $150 million ABL facility due in 2018. Fitch expects 2014 year-end cash balances of approximately $180 million (following the proposed dividend)and that MHSE will have sufficient liquidity to fund seasonal cash flow needs. RECOVERY RATINGS ANALYSIS MHSE's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company and, thus, recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation. Given the strong recovery prospects, the $250 million senior secured term loan was notched up to 'BB/RR1'. RATING SENSITIVITIES Rating Upgrade: Positive rating actions may be considered if a clear financial policy that is commensurate with a higher rating is communicated, which could include a leverage target and/or strategy as to shareholder policy in terms of return of capital. If MHSE publicly committed to a financial policy that reflected its current capital structure, the IDR could potentially be considered in the 'BB' category context. Growth of FFO and FCF ahead of Fitch's expectations, which would likely demonstrate the company's ability to drive digital revenue growth and/or retake market share from its competitors, could also lead to positive rating momentum. Rating Downgrade: Revenue declines on a cash basis in the low- to mid-single digits could result in rating pressures. Fitch has affirmed these ratings: MHSE -- Long-term IDR at 'B'; -- Senior secured term loan at 'BB/RR1'; The Rating Outlook is Stable. METRO FUEL: Plea In Works for Exec Hit With $30M Bank Fraud Rap --------------------------------------------------------------- Law360 reported that former Metro Fuel Oil Corp. chief financial officer Thomas Torre, accused of drawing $30 million from a bank line of credit before parking the company in bankruptcy, is likely to plead guilty to some or all of the allegations, lawyers told a New York federal judge. According to the report, the prosecution and the defense were on the same page with respect to plea negotiations, the sides told U.S. District Judge Pamela K. Chen who gave them until Jan. 30 to come back with an agreement. As previously reported by The Troubled Company Reporter, citing Law360, federal prosecutors said they have indicted Mr. Torre in an alleged scheme to overstate the New York City company's income, draw $30 million from a bank line of credit and then put the concern into bankruptcy. According to the report, citing Brooklyn U.S. Attorney Loretta E. Lynch, the former chief financial officer is charged with bank fraud and conspiracy. The case is USA v. Torre, case number 1:14-cr-00514, in the U.S. District Court for the Eastern District of New York. About Metro Fuel Metro Fuel Oil Corp., is a family-owned energy company, founded in 1942, that supplies and delivers bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. Owned by the Pullo family, Metro has 55 delivery trucks and a 10 million-gallon fuel terminal in Brooklyn. Financial problems resulted in part from cost overruns in building an almost-complete biodiesel plant with capacity of producing 110 million gallons a year. Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown Realty Associates, Inc., and several of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 12-46913) on Sept. 27, 2012. Judge Elizabeth S. Stong presides over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as notice and claims agent. The Debtor tapped Carl Marks Advisory Group LLC as financial advisor and investment banker, Curtis, Mallet-Prevost, Colt & Mosle LLP as co-counsel, AP Services, LLC as crisis managers for the Debtors, and David Johnston as their chief restructuring officer. The petition showed assets of $65.1 million and debt totaling $79.3 million. Liabilities include $58.8 million in secured debt, with $48.3 million owing to banks and $10.5 million on secured industrial development bonds. Metro Terminals Corp., affiliate of Metro Fuel Oil Corp., disclosed $38,613,483 in assets and $71,374,410 in liabilities as of the Chapter 11 filing. The U.S. Trustee appointed a seven-member creditors committee. Kelley Drye & Warren LLP represents the Committee. The Committee tapped FTI Consulting, Inc. as its financial advisor. On Feb. 15, 2013, the Bankruptcy Court entered an order approving the sale of substantially all of the assets of the Debtors to United Refining Energy Corp., for the base purchase price of $27,000,000, subject to adjustments. MF GLOBAL: Underwriters Settle Class-Action Suit for $74 Million ---------------------------------------------------------------- Joseph Checkler, writing for The Wall Street Journal, reported that a group of well-known financial institutions settled a lawsuit brought by former MF Global Holdings Ltd. investors for $74 million. According to the report, in a filing with U.S. District Court in Manhattan, lawyers for the plaintiffs said the settlement with financial institutions that served as underwriters for the sale of MF Global 's stock and bonds before its collapse -- among them units of Goldman Sachs Group Inc., J.P. Morgan & Co. and Citigroup Inc. -- "dismisses and releases" all claims against them in the suit. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MOLYCORP INC: S&P Raises CCR to 'CCC+'; Outlook Negative -------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Molycorp Inc. to 'CCC+' from 'SD'. The outlook is negative. S&P also raised its issue rating on the company's senior secured debt to 'CCC+' from 'CCC' but revised the recovery rating on the debt to '4' from '3', reflecting S&P's expectation of average recovery (30%-50%) of principal and interest in the event of a default. S&P also removed the rating from CreditWatch, where it had placed it with positive implications on Sept. 4, 2014. At the same time, S&P raised its rating on the company's senior unsecured debt to 'CCC-' from 'D', and revised the recovery rating to '6' from '5', reflecting prospects of negligible (0%-10%) recovery of principal and interest in the event of a default. Before S&P's downgrade to 'SD', the corporate credit rating on Molycorp was 'CCC' and on CreditWatch with positive implications. The 'CCC+' corporate credit rating reflects improved liquidity prospects for the coming year as a result of the $400 million financing transaction completed on Sept. 11, 2014, with Oaktree Capital Management L.P, of which the company received $208 million of net proceeds up front. An additional $150 million would be available until April 30, 2016, subject to Molycorp's achievement of certain operational and financial conditions. Molycorp faces a $207 million debt maturity in June 2016. The lower recovery ratings on outstanding secured and unsecured debt reflect the priority of the $250 million financing, and thus, reduced recovery prospects. "The negative outlook reflects our view that Molycorp's business and financial condition will become increasingly precarious unless the Mountain Pass facility can be brought to full production capacity," said Standard & Poor's credit analyst Cheryl Richer. S&P would revise our outlook to stable when it is clear that Molycorp will meet the conditions to access the $150 million of delayed draw funds, and S&P believes that the company will continue to maintain sufficient liquidity to cover uses for at least the next 12 months. S&P will lower ratings if it believes the company has insufficient resources to meet cash requirements within the upcoming 12 months, including its ability to retire or refinance its 3.25% convertible notes due June 2016. MONROE HOSPITAL: Dec. 29 Hearing on Adequacy of Plan Outline ------------------------------------------------------------ The Bankruptcy Court will convene a hearing on Dec. 29, 2014, at 10:30 a.m., to consider adequacy of the Disclosure Statement explaining Monroe Hospital LLC's Plan of Liquidation. Objections, if any, are due Dec. 22, at 5:00 p.m. As reported in the Troubled Company Reporter on Dec. 8, 2014, Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that the Debtor filed a Chapter 11 Plan and disclosure materials explaining the plan about one month after receiving court approval to sell the hospital to an affiliate of Prime Healthcare Services Inc. According to the report, under the proposed plan, the secured portion of the claim of hospital lessor MPT Bloomington LLC and affiliated lender MPT Development Services Inc., which are collectively owed about $121.8 million, would be paid by the buyer as part of the purchase price. Recovery on general unsecured claims is "unknown," the report related. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MONROEHOSPITAL_270_ds.pdf About Monroe Hospital Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed private acute care medical surgical hospital in Bloomington, Indiana. It leases the land on which the hospital is located from MPT Bloomington, LLC. Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana, on Aug. 8, 2014. Joseph Roche signed the petition as president and chief executive officer. In its schedules, the Debtor disclosed $14,327,739 in total assets and $136,386,925 in liabilities. The case is assigned to Judge James M. Carr. The Debtor is represented by attorneys at Bingham Greenebaum Doll LLP. Upshot Services LLC acts as the Debtor's noticing, claims and balloting agent. MUSKIE PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Muskie Properties, LLC 60351 Arnold Market Road Bend, OR 97702 Case No.: 14-36745 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court District of Oregon Judge: Hon. Trish M Brown Debtor's Counsel: Christopher L Parnell, Esq. DUNN CARNEY ALLEN HIGGINS & TONGUE LLP 851 SW 6th Ave #1500 Portland, OR 97204 Tel: (503) 224-6440 Email: cparnell@dunncarney.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Marilyn Beem, manager. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/orb14-36745.pdf NAUTILUS HOLDINGS: Plan Confirmation Hearing Set for January 9 -------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York will hold a hearing on Jan. 9, 2015, at 10:00 a.m. (prevailing Eastern time) to consider confirmation of the joint Chapter 11 plan of reorganization of Nautilus Holdings Limited and its debtor-affiliates. Objections, if any, must be filed no later than 4:00 p.m. on Jan. 2, 2015. Creditors have until Dec. 26, 2014, at 5:00 p.m. to cast their votes to accept or reject the Debtors' plan. All votes must be filed at: a) if by first-class mail Nautilus Holdings Limited Ballot Processing c/o Epiq Bankruptcy Solutions LLC FDR Station, P.O. Box 5014 New York, NY 10150-5014 b) if by hand delivery or overnight express Nautilus Holdings Limited Ballot Processing c/o Epiq Bankruptcy Solutions LLC 757 Third Avenue, 3rd Floor New York, NY 10017 About Nautilus Holdings Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. NAUTILUS HOLDINGS: Goes to Mediation in Advance of Plan Hearing --------------------------------------------------------------- Sherri Toub, a bankruptcy columnist for Bloomberg News, reported that Nautilus Holdings Ltd., the owner of 16 container ships, is sailing to a mediation at which key stakeholders will attempt to resolve disputes over the company's proposed reorganization plan before a confirmation hearing scheduled for Jan. 9. According to the report, following a company request for appointment of a mediator, the judge on Dec. 4 ordered that all disputed issues between Nautilus and HSH Nordbank AG, as agent for lenders in the HSH syndicate, relating to the plan be assigned to mediation. About Nautilus Holdings Limited Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. Nautilus Holdings, et al., have proposed a Chapter 11 Plan that is the product of negotiations between the Debtors and certain of the prepetition secured lenders. The Debtors are targeting a January 2015 confirmation of the Plan. On Oct. 17, 2014, the Bankruptcy Court granted an extension of the Debtors' exclusive solicitation period, and the Debtors were granted the exclusive right to solicit votes through and including Jan. 15, 2015. NAVISTAR INTERNATIONAL: To Release Q4 Financial Results Next Week ----------------------------------------------------------------- Navistar International Corporation will present via live web cast its fiscal 2014 fourth quarter financial results on Tuesday, December 16th. A live web cast is scheduled at approximately 9:00 AM Eastern. Speakers on the web cast will include Troy Clarke, president and chief executive officer, Walter Borst, executive vice president and chief financial officer, and other company leaders. The web cast can be accessed through a link on the investor relations page of Company's Web site at http://www.navistar.com/navistar/investors/webcasts. Investors are advised to log on to the Web site at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of 10 days. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar International reported a net loss attributable to the Company of $898 million for the year ended Oct. 31, 2013, following a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012. The Company's balance sheet at July 31, 2014, showed $7.70 billion in total assets, $11.74 billion in total liabilities and a $4.04 billion total stockholders' deficit. * * * In the Oct. 9, 2013, edition of the TCR, Moody's Investors Service affirmed the ratings of Navistar International Corporation, including the B3 Corporate Family Rating (CFR). The ratings reflect Moody's expectation that Navistar's successful incorporation of Cummins engines throughout its product line up will enable the company to regain lost market share, and that progress in addressing component failures in 2010 vintage-engines will significantly reduce warranty expenses. As reported by the TCR on Oct. 9, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'CCC+' from 'B-'. "The rating downgrades reflect our increased skepticism regarding NAV's prospects for achieving the market shares it needs for a successful business turnaround," said credit analyst Sol Samson. In January 2013, Fitch Ratings affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NEOGENIX ONCOLOGY: OK'd to Incur $2.5MM Exit Loan from ALJ Capital ------------------------------------------------------------------ The Bankruptcy Court authorized Neogenix Oncology, Inc., to obtain debtor-in-possession and exit financing in the maximum original principal amount of up to $2,500,000 from ALJ Capital Management, LLC, as agent and on behalf of LJR Capital, L.P., ALJ Capital I, L.P. and ALJ Capital II, L.P. As reported in the Troubled Company Reporter on Nov. 28, 2014, the material terms of the DIP and exit financing loan agreement, include, among other things: Amount of Borrowing: (i) Minimum Loan Amount: $2,000,000 (ii) Maximum Loan Amount: $2,500,000 ALJ Investment With respect to both the Original Return and Litigation Principal Loan Amount and the amount Share: of any Additional Borrowings, in addition to being entitled to be repaid the Outstanding principal loan amount, the lender will also be entitled to receive the greater of either (1) a $500,000 guaranteed minimum investment return or (2) the amount necessary to provide the lender with an investment rate of return of 40% compounded annually and taking into account the timing of any actual payments to the lender. Within two business days of the lender funding the original principal loan amount or any additional borrowings, the lender will send to the Debtor and its counsel an Excel spreadsheet calculating the monthly payoff amounts of the outstanding principal loan amount and the guaranteed minimum investment return or the ALJ Investment Return, whichever is applicable, for the next twenty four months. In addition to the foregoing, the lender will also be entitled to receive five percent of the net litigation proceeds up to and including $20,000,000 in net litigation proceeds and two and one- half percent of the net litigation proceeds in excess of $20,000,000. The litigation share will be capped at a maximum amount of $2,000,000. The financing will secured by and payable out of certain litigation proceeds. A copy of the financing documents is available for free at http://bankrupt.com/misc/Neogenix_469_exitfinancing.pdf About Neogenix Oncology Neogenix Oncology Inc. in Rockville, Maryland, filed a Chapter 11 petition (Bankr. D. Md. Case No. 12-23557) on July 23, 2012, in Greenbelt with a deal to sell the assets to Precision Biologics Inc., absent higher and better offers. Founded in December 2003, Neogenix is a clinical stage, pre- revenue generating, biotechnology company focused on developing therapeutic and diagnostic products for the early detection and treatment of cancer. Neogenix, which has 10 employees, says it its approach and portfolio of three unique monoclonal antibody therapeutics -- mAb -- hold the potential for novel and targeted therapeutics and diagnostics for the treatment of a broad range of tumor malignancies. Thomas J. McKee, Jr., Esq., at Greenberg Traurig, LLP, in McLean, Virginia, serves as counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. The Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. W. Clarkson McDow, Jr., U.S. Trustee for Region 4, appointed seven members to the committee of equity security holders. Sands Anderson PC represents the Official Committee of Equity Security Holders. The Committee tapped FTI Consulting, Inc., as its financial advisor. NEW LOUISIANA: Pepper Hamilton Retention Effective Oct. 8 --------------------------------------------------------- The Bankruptcy Court, in an amended order, authorized the retention of Pepper Hamilton LLP as counsel for the Official Committee of Unsecured Creditors nunc pro tunc to Oct. 8, 2014. According to the Court, in an order dated Oct. 27, the Court inadvertently omitted the date on which Pepper Hamilton's retention began nunc pro tunc. As reported in the Troubled Company Reporter on Nov. 18, 2014, as counsel, Pepper Hamilton is expected to provide these services: a. Advise the Creditors Committee with respect to its rights, duties, and powers in the Debtors' Chapter 11 cases; b. Assist and advise the Committee in its consultation with the Debtors relating to the administration of these chapter 11 cases; and c. Assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and in negotiating with the holders of claims, and if appropriate, equity interests. The firm's standard rates are: Professional Hourly Rate ------------ ----------- Francis J. Lawall $710 Donald J. Detweiler $655 John H. Schanne, II $395 Francis J. Lawall, Esq., a partner at Pepper Hamilton, assures the Court that the Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About New Louisiana Holdings New Louisiana Holdings LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 14-50756), on June 25, 2014. Ten affiliates of New Louisiana -- Acadian 4005 Tenant, LLC (Case No. 14-50850), Atrium 6555 Tenant, LLC, dba The Atrium at Lafreniere Assisted Living (Case No. 14-50851), Citiscape 5010 Tenant, LLC, dba Citiscape Apartments (Case No. 14-50853), Lakewood Quarters Assisted 8585 Tenant, LLC (Case No. 14-50854), Lakewood Quarters Rehab 8225 Tenant, LLC (Case No. 14-50855), Panola 501 Partners, LP (Case No. 14-50862), Regency 14333 Tenant, LLC (Case No. 14-50861), Retirement Center 14686 Tenant, LLC (Case No. 14-50856), Sherwood 2828 Tenant, LLC (Case No. 14-50857), St. Charles 1539 Tenant, LLC (Case No. 14-50858) and Woodland Village 5301 Tenant, LLC (Case No. 14-50859) filed Chapter 11 bankruptcy petitions on July 16, 2014. Fifteen additional affiliates of New Louisiana -- SA-PG Ocala LLC (Case No. 14-50909), SA-PG Operator Holdings LLC (Case No. 14- 50912), SA-PG Clearwater LLC (Case No. 14-50913), SA-PG Gainesville LLC (Case No. 14-50914), SA-PG Jacksonville LLC (Case No. 14-50915), SA-PG Largo LLC (Case No. 14-50916), SA-PG North Miami LLC (Case No. 14-50917), SA-PG Orlando LLC (Case No. 14- 50918), SA-PG Pinellas LLC (Case No. 14-50919), SA-PG Port St. Lucie LLC (Case No. 14-50920), SA-PG Sun City Center LLC (Case No. 14-50921), SA-PG Tampa LLC (Case No. 14-50922), SA-PG Vero Beach LLC (Case No. 14-50923), SA-PG West Palm Beach LLC (Case No. 14- 50924) and SA-PG Winterhaven LLC (Case No. 14-50925) filed separate Chapter 11 bankruptcy petitions on July 28, 2014. Four more affiliates of New Louisiana -- CHC-CLP Operator Holding LLC (Case No. 14-51104), SA-St. Petersburg LLC (Case No. 14- 51101), SA-Clewiston LLC (Case No. 14-51102) and SA-Lakeland LLC (Case No. 14-51103) -- that operate skilled nursing facilities located in Lakeland, Clewiston and St. Peterburg, Florida, sought protection under Chapter 11 of the Bankruptcy Code on Sept. 3, 2014. The Chapter 11 cases are jointly consolidated with New Louisiana's Chapter 11 case at Case No. 14-50756 before Judge Robert Summerhays of the United States Bankruptcy Court for the Western District of Louisiana (Lafayette). The Debtors are represented by Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, in Dallas, Texas. Jan M. Hayden and Baker Donelson Bearman Caldwell & Berkowitz, P.C. serves as local counsel. The U.S. Trustee for Region 5 on Oct. 3, 2014, appointed three creditors of New Louisiana Holdings, LLC, to serve on the official committee of unsecured creditors. Pepper Hamilton LLP and McGlinchey Stafford PLLC serve as counsel to the Committee. * * * The Debtors have sought for an extension of their exclusive periods to file a Chapter 11 plan through Jan. 16, 2015, and their exclusive period to solicit acceptances for that plan through March 17, 2015. NEWLEAD HOLDINGS: Incurs $47.7 Million Net Loss in H1 2014 ---------------------------------------------------------- NewLead Holdings Ltd. reported a net loss attributable to the Company's shareholders of $47.68 million on $3.96 million of operating revenues for the six months ended June 30, 2014, compared to a net loss attributable to the Company's shareholders of $66.37 million on $3.29 million of operating revenues for the same period in 2013. As of June 30, 2014, the Company had $210.69 million in total assets, $296.45 million in total liabilities and a $85.75 million total shareholders' deficit. A full-text copy of the Form 6-K is available for free at: http://is.gd/xTocBt About NewLead Holdings Ltd. Based in Athina, Greece, NewLead Holdings Ltd. -- http://www.newleadholdings.com/-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. NewLead Holdings reported a net loss of $158.22 million on $7.34 million of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $403.92 million on $8.92 million of operating revenues in 2012. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a net loss, negative operating cash flows, a working capital deficiency, and shareholders' deficiency and has defaulted under its credit facility agreements. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. NII HOLDINGS: Taps PricewaterhouseCoopers on Audit-Related Work --------------------------------------------------------------- NII Holdings, Inc., et al., ask the Bankruptcy Court to: a) authorize the employment of PricewaterhouseCoopers LLP to perform certain audit-related work for the Debtors nunc pro tunc to Nov. 7, 2014; and b) approve the terms of PwC's employment and retention, including the fee and expense structure and related provisions. In August 2014, after years of continuing losses, NII sold its operations in Chile for a de minimis amount. As a result of the divesture, the Debtors' have requested that PwC, the Debtors' former auditor, reassess its 2011, 2012 and 2013 audits of the Debtors' financial statements to account for the impact of the Chile Sale and associated discontinued operations on those prior financial statements. In particular, PwC will evaluate whether to consent to the reuse of its audit report on the consolidated financial statements of NII Holdings as of Dec. 31, 2013, and for each of the two years prior that were filed with NII Holdings' Form 10-K with the Securities and Exchange Commission in light of the Chile Sale, in particular, and other subsequent events. PwC will perform these tasks: a. read the financial statements of the current period and comparing the prior-period financial statements that PwC reported on with the financial statements to be presented for comparative purposes; b. obtain updated written representations covering the financial statements previously audited by PwC from certain members of management; c. obtain a letter of representation from the successor accountants KPMG LLP; d. to the extent appropriate based on the information obtained from the foregoing, make inquiries and performing other subsequent events procedures that PwC considers necessary; and e. decide, based on the foregoing, whether to consent to the reuse of PwC's audit reports by the Debtors. With respect to any prospectus and registration statement provided to PwC by the Debtors that proposes to include PwC's audit reports of financial statements for prior periods alongside more recent audit reports of financial statements for subsequent periods: a. read pertinent portions of any prospectus and registration statement provided to PwC by the Debtors; b. reassess the audit reports of prior-period financial statements in light of subsequent events that bear materially on the prior-period financial statements; c. obtain a letter of representation from the successor independent auditor, here KPMG LLP, regarding whether its audit (including its procedures with respect to subsequent events) revealed any matters that, in its opinion, might have a material effect on the financial statements reported on by PwC, as the predecessor auditor, or would require disclosure in the notes thereto; d. make inquiries and perform other procedures that PwC considers necessary to satisfy itself regarding the appropriateness of any adjustment or disclosure affecting the prior-period financial statements covered by PwC's reports; and e. decide, based on the foregoing, whether to consent to the reuse of PwC's audit reports by the Debtors. PwC will strive to complete its consideration to consent and issue its consent, if appropriate, by Feb. 25, 2015, provided that PwC receives the appropriate cooperation from the successor auditor KPMG LLP and the Debtors' personnel, including timely responses to PwC's inquires. The fee structure provides that PwC will be paid by the Debtors for the services of the PwC professionals based on their customary hourly billing rates, which will be subject to these ranges: Partner/Principal $800 - $900 Senior Manager $550 - $600 Manager $400 - $500 Senior Associate $250 - $400 Associate $150 - $250 PwC has received no other compensation from the Debtors pursuant to the engagement letter. As of the Petition Date, PwC is not owed a prepetition claim by the Debtors for fees for services. To the best of the Debtors' knowledge, PwC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court will convene a hearing on Jan. 12, 2015, at 10:00 a.m., to consider the matter. Objections, if any, are due Dec. 19, 2014 at 4:00 p.m. The Debtors are represented by: Scott J. Greenberg, Esq. Lisa Laukitis JONES DAY 222 East 41st Street New York, NY 10017 Tel: (212) 326-3939 Fax: (212) 755-7306 - and - David G. Heiman, Esq. Carl E. Black, Esq. JONES DAY North Point 901 Lakeside Avenue Cleveland, OH 44114 Tel: (216) 586-3939 Fax: (216) 579-0212 About NII Holdings NII Holdings Inc. through its subsidiaries provides wireless communication services for businesses and consumers in Brazil, Mexico and Argentina. NII Holdings has the exclusive right to use the Nextel brand in its markets pursuant to a trademark license agreement with Sprint Corporation and offers unique push-to-talk ("PTT") services associated with the Nextel brand in Latin America. NII Holdings' shares of common stock, par value $0.001, are publicly traded under the symbol NIHD on the NASDAQ Global Select Market. NII Holdings and its affiliated debtors sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-12611) in Manhattan on Sept. 15, 2014. The Debtors' cases are jointly administered and are assigned to Judge Shelley C. Chapman. The Debtors have tapped Jones Day as counsel and Prime Clerk LLC as claims and noticing agent. NII Holdings disclosed $1,216,071,340 in assets and $3,068,103,749 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 2 on Sept. 29 appointed five creditors of NII Holdings to serve on the official committee of unsecured creditors. NORTHEAST WATER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Northeast Water & Support, Inc. dba Terralogic Drilling Solutions dba The Water Company 227 Cherry Street Plymouth, MA 02360 Case No.: 14-15689 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Hon. Joan N. Feeney Debtor's Counsel: David B. Madoff, Esq. MADOFF & KHOURY LLP 124 Washington Street - Suite 202 Foxborough, MA 02035 Tel: 508-543-0040 Fax: 508-543-0020 Email: madoff@mandkllp.com - and - Steffani Pelton, Esq. MADOFF & KHOURY LLP 124 Washington Street Foxborough, MA 02035 Tel: 508-543-0040 Email: pelton@mandkllp.com Total Assets: $2.23 million Total Liabilities: $2.22 million The petition was signed by Thomas Fleming, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mab14-15689.pdf NORTHLAND HOLDINGS: Case Summary & 15 Top Unsecured Creditors ------------------------------------------------------------- Debtor: Northland Holdings LLC 60351 Arnold Market Road Bend, OR 97702 Case No.: 14-36742 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court District of Oregon Judge: Hon. Trish M Brown Debtor's Counsel: Christopher L. Parnell, Esq. DUNN CARNEY ALLEN HIGGINS & TONGUE LLP 851 SW 6th Ave #1500 Portland, OR 97204 Tel: (503) 224-6440 Email: cparnell@dunncarney.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Marilyn Beem, manager. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/orb14-36742.pdf OPEN RANGE: USDA Liable for $10-Mil. Claims, Fed. Circ. Told ------------------------------------------------------------ Law360 reported that a construction subcontractor building wireless broadband networks in rural communities called on the Federal Circuit to force the U.S. Department of Agriculture to pony up $10 million for services it performed, claiming the federal government is liable for the balance after prime contractor Open Range Communications Inc. went bankrupt. According to the report, G4S Technology LLC alleged it should have been designated as an intended third-party beneficiary of agreements between Open Range and the USDA's Rural Utility Service, which included a $267 million contract for the wireless network construction, but when Open Range filed for bankruptcy in 2011, it still owed G4S $10.3 million for its completed work. The case is G4S Technology LLC v. US, case number 14-5078, in the U.S. Court of Appeals for the Federal Circuit. About Open Range Greenwood Village, Colo.-based Open Range Communications Inc., a provider of wireless broadband services to 26,000 rural customers in 12 states, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-13188) on Oct. 6, 2011, to either sell the business or shut down and liquidate. Open Range disclosed about $115.1 million in assets and $102.8 million in debts. Open Range started its WiMax broadband and voice service in late 2009, backed by a $267 million loan from the U.S. Department of Agriculture's Rural Utility Service and $100 million invested by One Equity Partners, a financing arm of JPMorgan Chase & Co. Judge Kevin J. Carey presides over the case. Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as bankruptcy counsel. Logan & Co. serves as claims agent. FTI Consulting, Inc., provided a chief restructuring officer, Michael E. Katzenstein; an associate chief restructuring officer, Chris Lewand; and hourly temporary staff. The petition was signed by Chris Edwards, chief financial officer. In December 2011, Open Range shut down operations after failing to get the broadcast spectrum it needed, problems with network quality and vendors, and the "sporadic" flow of money from a $267 million federal loan, of which Open Range owes a balance of $73.5 million. Open Range hired RB Capital LLC and Heritage Global Partners Inc. as auctioneers and sales agents to conduct an auction of the assets. In February 2012, the Debtor obtained an order converting the case to Chapter 7 liquidation. The Debtor said it was unlikely to have a reorganization plan resolving the Internet provider's potential claims against the U.S. Department of Agriculture over a $267 million loan. Charles Forman was appointed Chapter 7 trustee. OUTLAW RIDGE: Has Until March 4 to Propose Chapter 11 Plan ---------------------------------------------------------- The Bankruptcy Court granted Outlaw Ridge, Inc. and Outlaw Ridge, LLC's exclusive periods to file a chapter 11 plan until March 4, 2015, and solicit acceptances for that plan until May 4, 2015. This is the second extension granted to the Debtor. About Outlaw Ridge Outlaw Ridge, Inc., operates a sand and lime rock mine in Pasco County, Florida. Outlaw Ridge, LLC, owns several parcels of property in Pasco County that is holding for residential development. The two entities are owned and controlled by John M. Dalfino and John T. Steger. Outlaw Ridge Inc. and Outlaw Ridge, LLC sought Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case Nos. 14-04400 and 14- 04401) on April 21, 2014, in Tampa, Florida. Adam L Alpert, Esq., at Bush Ross P.A., in Tampa, serves as the Debtors' counsel, while Smolker Bartlett Schlosser Loeb & Hinds, P.A., serves as special counsel. Homeward Real Estate, Inc. acts as real estate broker. OR LLC disclosed $1.36 million in total assets and $2.97 million in liabilities. OR Inc. disclosed $15.4 million in total assets and $4.21 million in liabilities. PALMETTO SCHOLARS: S&P Assigns 'BB' Rating on 2014B Revenue Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to South Carolina Jobs-Economic Development Authority's tax-exempt series 2014A and taxable series 2014B revenue bonds, to be issued on behalf of Palmetto Scholars Academy (PSA). The outlook is stable. "The 'BB' rating reflects our view of PSA's historically strong operating performance, growing enrollment, good demand profile, and strong unrestricted cash position," said Standard & Poor's credit analyst Ashley Ramchandani. PSA plans to use the $8.435 million series 2014A and series 2014B bond proceeds to fund the costs of building a new grade six to 12 facility and to fund a bond reserve fund. The bonds are the only debt of the academy and are a general obligation of the school, secured by all pledged revenues (including state payments), a first priority mortgage, and a security interest on the new facility. The facilities will consist of a single, 45,000 square-foot school building to be constructed on a leased, 9.854 acre parcel of land. The site is owned by the U.S. government as part of Joint Base Charleston and has been leased to PSA for a period of 35 years. PETTERS COMPANY: Dec. 16 Hearing on Intercreditor Agreement ----------------------------------------------------------- The Bankruptcy Court will convene a hearing on Dec. 16, 2014, at 1:30 p.m., to consider Petters Company, Inc., et al.'s motion to for authorization to enter into intercreditor agreement outside the ordinary course of business; and Douglas A. Kelley, the Chapter 11 trustee's motion to sell property. About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. The Official Committee of Unsecured Creditors is represented by: David E. Runck, Esq. Lorie A. Klein, Esq. FAFINSKI MARK & JOHNSON, P.A. 400 Flagship Corporate Center 775 Prairie Center Drive Eden Prairie, MN 55344 Telephone: (952) 995-9500 Facsimile: (952) 995-9577 E-mail: David.Runck@fmjlaw.com Lorie.Klein@fmjlaw.com Trustee Douglas A. Kelley is represented by James A. Lodoen, Esq., Mark D. Larsen, Esq., Kirstin D. Kanski, Esq., Adam C. Ballinger, Esq., at Lindquist & Vennum LLP. PLY GEM HOLDINGS: JPMorgan Holds 1.8% Stake as of Nov. 28 --------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, JPMorgan Chase & Co. disclosed that as of Nov. 28, 2014, it beneficially owned 1,224,737 shares of common stock of Ply Gem Holdings, Inc., representing 1.8 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/w8E6qG About Ply Gem Based in Cary, North Carolina, Ply Gem Holdings Inc. is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets. Ply Gem Holdings reported a net loss of $79.52 million in 2013, a net loss of $39.05 million in 2012 and a net loss of $84.50 million in 2011. The Company's balance sheet at June 28, 2014, showed $1.09 billion in total assets, $1.18 billion in total liabilities and a $91.43 million total stockholders' deficit. * * * In May 2010, Standard & Poor's Ratings Services raised its (unsolicited) corporate credit rating on Ply Gem to 'B-' from 'CCC+'. "The ratings upgrade reflects our expectation that the Company's credit measures are likely to improve modestly over the next several quarters to levels that we would consider more in line with the 'B-' corporate credit rating," said Standard & Poor's credit analyst Tobias Crabtree. POTOMAC SUPPLY: Counsel's Retention of $500K Deposit Is Proper -------------------------------------------------------------- Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia entered a memorandum opinion affirming the decision of the Bankruptcy Court in the appellate case captioned Chesapeake Bay Enterprises, Inc. v. Pillsbury Winthrop Shaw Pittman, LLP, et al., Case No. 3:14CV00633-HEH. The appeal from the Bankruptcy Court evolves from the process of liquidating the core assets of the debtor, Potomac Supply Corporation, located in Kinsale, Virginia. The central dispute before the District Court focuses on rulings by the Bankruptcy Court pertaining to the disposition of a $500,000 deposit held in escrow by Pillsbury Winthrop Shaw Pittman, LLP, counsel for the Debtor. The appellant, Chesapeake Bay Enterprises, Inc., claims immediate entitlement to the $500,000, which it deposited with Pillsbury as part of an asset purchase agreement. In granting Pillsbury's motion for summary judgment and dismissing the claims against Pillsbury for conversion of the deposit and breach of fiduciary duty, the Bankruptcy Court concluded that Pillsbury's retention of the deposit was proper pending that court's resolution of competing claims of ownership. The Appellant is represented by: Jerry Lane Hall, Jr., Esq. Patrick John Potter, Esq. PILLSBURY WINTHROP SHAW PITTMAN 1200 Seventeenth Street, NW Washington, DC 20036 Telephone: (202) 663-8000 Facsimile: (202) 663-8007 E-mail: patrick.potter@pillsburylaw.com Appellee Chesapeake Bay Enterprise, Inc., is represented by: Steven Scott Biss, Esq. 300 West Main Street, Suite 102 Charlottesville, VA 22903 Facsimile: (202) 318-4098 Appellee Regions Bank is represented by: William Anthony Broscious, Esq. KEPLEY BROSCIOUS PLC 2211 Pump Road Richmond, VA 23233 Telephone: (804) 741-0400 Facsimile: (804) 741-6175 E-mail: wbroscious@kbbplc.com A full-text copy of the November 25, 2014 Memorandum Opinion is available at http://bit.ly/1GbBMqNfrom Leagle.com. About Potomac Supply Founded in 1948, Potomac Supply Corporation manufactures a diverse range of wood products, including treated lumber, wood pellets, decking, fencing and pallets, in its wood-processing and production facilities. The Kinsale, Virginia-based building- supply manufacturer filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 12-30347) on Jan. 20, 2012, estimating assets and debts of $10 million to $50 million. Potomac in mid-January 2012 announced it was suspending manufacturing operations in Kinsale after its lender refused to provide financing without additional investment. Judge Douglas O. Tice, Jr., presides over the case. Patrick J. Potter, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in Washington, D.C., serves as the Debtor's bankruptcy counsel. LeClairRyan P.C. is representing the Official Committee of Unsecured Creditors. PPL CAPITAL: Fitch Affirms 'BB+' Rating on Jr. Subordinated Notes ----------------------------------------------------------------- Fitch Ratings has upgraded the long-term IDR of PPL Electric Utilities Corp. (PPLEU) to 'BBB+' from 'BBB' with a Stable Outlook. Fitch has also affirmed the 'BBB' LT IDR for PPL Corp. (PPL) and PPL Capital funding Inc. and revised their Rating Outlooks to Positive. Simultaneously, Fitch has affirmed the 'A-' LT IDRs of Louisville Gas and Electric Co. (LG&E) and Kentucky Utilities Co. (KU) and the 'BBB+' LT IDR of LG&E and KU Energy LLC. The Rating Outlook for each of these entities is Stable. Fitch maintains the 'BB' LT IDR and Rating Watch Negative for PPL Energy Supply, LLC (PPLES). Fitch expects to withdraw its ratings on PPL and its U.S. subsidiaries at the end of a 30-day period (Jan. 9, 2015) for business reasons. KEY RATING DRIVERS PPL Corporation PPL's ratings and Positive Outlook reflect the company's expected transformation to a fully regulated utility holding company with operations in several supportive regulatory jurisdictions. The ratings also reflect PPLEU's increasing presence in the transmission space and improving Pennsylvania regulations, and Fitch's evolving view of the rating impact of the U.K. operations to PPL. Fully Regulated Business Model: PPL's ratings and Outlook reflect its rapid transformation from a company heavily reliant on commodity sensitive businesses to one that will be fully regulated with substantially less business risk. By comparison, regulated operations accounted for approximately 22% of EBITDA prior to two acquisitions and the spinoff. PPLEU's Improvement: PPLEU's continued investment in Federal Energy Regulatory Commission (FERC) regulated transmission has allowed it to earn favorable cash returns with almost no regulatory lag. Fitch believes the minimal regulatory lag more than offsets the potential for lower allowed returns on equity on FERC projects (approximately 10%). Regulation of the distribution segment has improved noticeably in the past two years. Timely recovery of capital investments is provided by the approved distribution infrastructure replacement surcharge, allowed use of a fully projected test year, and riders such as those for advanced meter and storm. U.K. Segment: PPL's Positive Outlook also reflects Fitch's evolving view of the company's U.K. operations relative to PPL. Fitch assesses PPL's credit profile with and without its U.K. operations reflecting its self-funding status and lack of operational integration given the geographic location. PPL's U.K. operations have historically been higher levered than its U.S. operations. Fitch believes the transparency and high level of earnings predictability in the U.K. regulatory model could compensate for the low allowed returns and higher leverage. Additionally, as the WPD group is fast-tracked, they are allowed to earn upfront rewards and higher return on equity than its peers. Additionally, Fitch believes that PPL U.K.'s capital structure is managed in accordance with the predictable earnings stream on a standalone basis. Credit Metrics: Fitch expects PPL's pro forma FFO fixed charge coverage to be strong for an issuer with 100% regulated operations at a low of 4x (or a high of 4x if excluding U.K). For the FFO adjusted leverage metric, PPL will likely produce an average high of 4x and an average low of 4x excluding the U.K. The sizeable capital expenditures in the regulated segment weaken the credit metrics temporarily. Fitch expects PPL's credit metrics to improve as spending moderates in the 2018-2019 timeframe. Supportive Regulatory Jurisdictions: The scale of the large capex program could pose execution risks and will require upfront debt financing. The credit risk that arises from the large capex is mitigated by regulatory provisions that provide near real-time cost recovery for about 75% of expenditures, including FERC jurisdictional transmission in Pennsylvania, environmental compliance in Kentucky and all capital investments in the U.K. PPL Electric Utilities Growing Presence in Transmission: PPLEU's upgrade reflects the company's growing presence in the transmission sector which Fitch continues to view as favorable. Transmission expenditures account for $2.9 billion of the $4.7 billion (61%) of capital expenditure planned from 2014 to 2018, substantially all of which is subject to near real-time recovery and favorable returns. Transmission rate base growth is expected to average 10.7% over 2014 to 2018, the fastest among all PPL subsidiaries. The recent proposal for Project Compass demonstrates the company's continued effort to expand its transmission footprint. Improving Pennsylvania Regulations: The upgrade also reflects the improvement of the regulatory framework in Pennsylvania in recent years. The most recent distribution rate case outcome was reasonable with the approval of 70% of the rate increase requested based on a 10.4% ROE which is higher than industry average. Additionally, Act 11 minimizes regulatory lag associated with an $800 million distribution infrastructure replacement program over five years. The approved distribution infrastructure replacement surcharge, the allowed use of fully projected test years in base rate cases, and riders for advanced meter and storm recovery provide timely recovery of capital investments. Approximately 43% of distribution capex is subject to real-time recovery in the next five years. No Commodity Risk: Although the company retains the Provider of Last Resort (PLR) obligation, all procurement costs are recoverable from customers. Credit Metrics: As a low risk transmission and distribution company, PPLEU's coverage and leverage ratios are expected to be more consistent within a 'BBB+' rating level. In the next few years, Fitch estimates that PPLEU will generate an average of 5.3x FFO fixed charge coverage and FFO adjusted leverage of 4x. Favorable Customer Mix: The majority of revenue is derived from residential customers, which are less affected by economic conditions than other customer classes. The 2013 revenue mix was 65% residential though customer growth is expected to remain tepid. In 2013, residential sales increased 0.8% on a weather normalized basis, with slightly negative or no growth in other segments. Going forward sales growth is expected to be less than 1% annually. In August 2014, the unemployment rate in Pennsylvania was 5.8% compared to 6.1% nationally. Louisville Gas & Electric and Kentucky Utilities The ratings and Stable Outlook at LG&E and KU reflect the strong credit metrics and constructive regulatory policies that limit cash flow volatility and business risk. Strong Metrics: Credit metrics at LG&E and KU have been strong for the rating level. Given the sizeable capex program especially those outside of the Environmental Cost Recovery (ECR) mechanism, Fitch expects credit metrics at both utilities to decline modestly during the projection period but remain supportive of current ratings. FFO adjusted leverage is expected to average approximately 3.8x over the next several years compared to 3.5x currently, and FFO fixed charge coverage to approximate 7x as compared to 8.2x currently. These metrics remain well positioned for the 'A-' rating level. Constructive Regulations: Regulations in Kentucky are considered by Fitch to be constructive. The companies operate with a number of cost recovery mechanisms that reduce regulatory lag and business risk and the Kentucky Public Service Commission (KPSC) has a track record of timely rate decisions. Regulatory policies include a fuel adjustment clause (FAC) that provides for variations in fuel costs and economic power purchases to be reflected in rates two months after incurred; a Gas Supply Charge (GSC) that allows the cost of natural gas supply for LG&E to be reset quarterly; an ECR mechanism; cash return on construction work in progress (CWIP); current recovery of demand side management (DSM) costs, including lost revenue; and a forward test year in base rate case. The ECR is particularly important given the two utilities generate 98% of output in 2013 from coal fired facilities. The ECR permits the approved environmental costs to be reflected in rates two months after incurred. A $2.3 billion ECR plan was approved, which represents 38% of the total capex spending from 2013 to 2017. Pending Rate Case: Recent rate orders in Kentucky have yielded constructive results, and Fitch anticipates a similar outcome in the pending rate case. The 2012 rate order took effect on Jan. 1, 2013 and a 10.25% ROE was authorized for both utilities which about industry average. Sizeable Capital Expenditures: Capex has been elevated since 2012 and is expected to remain high over the next several years. The two utilities plan to spend a total of approximately $6.1 billion from 2013 to 2017, averaging $1.2 billion per year compared to $700 million per year from 2008 to 2012; $2.3 billion of the total will be invested in environmental compliance projects aforementioned. Environmental Exposure: Although Fitch believes the ECR mechanism mitigates the environmental compliance risks, the associated rate requirements could potentially cause rate fatigue and affect the future recovery of growth projects. Challenging Economy: In 2013, 40% of total sales were driven by the residential segment in Kentucky. The residential segment had 0.2% growth and the commercial segment had negative 1.3%. The industrial sector experienced 1.5% sales growth in 2013. Looking forward, sales volume at both utilities overall will likely remain flat or slightly negative reflecting the challenging economic conditions in the state of Kentucky. In August 2014, Kentucky's unemployment rate was 7.1%, compared to 6.1% nationally. LG&E and KU Energy LLC: The ratings of LG&E and KU Energy LLC (LKE), an intermediate holding company and parent of KU and LG&E, reflect the predictable cash flow and strong credit profile of its two regulated utility subsidiaries as well the debt level at the holding company. Currently, LKE's debt represents approximately 25% of the total debt in the Kentucky segment. PPL Energy Supply: Spinoff Pending: In June 2014, Fitch downgraded PPLES from 'BBB-' /Outlook Negative to 'BB'/Rating Watch Negative. The downgrade followed PPL's announcement of a spin-off of PPLES, which will then be combined with Riverstone Holding's (Riverstone) generation assets to form an Independent Power Producer (IPP) named Talen Energy (Talen). The transaction is expected to close in the first half of 2015. PPLES' 'BB' IDR reflects the expected consolidated credit profile and business risks as a stand-alone IPP. Upon Fitch's preliminary assessment, this transaction will likely further weaken PPLES' credit profile by adding highly levered Riverstone assets, partially offset by the estimated synergy savings, which will not likely be fully achieved until the 2016-2017 time frame. Talen's proposed capital structure and leverage (Debt/EBITDA ratio of approximately 4.0x for 2015 including synergies) is indicative of an 'BB' profile for an IPP. Management's public comments indicate a bias towards acquisitions to pursue growth and operate a portfolio that has a much shorter duration and more open exposure The transaction does not materially change the fuel mix or geographic concentration of the company's generation fleet. PPLES currently owns nearly 10GW of generation capacity, which is comprised of 41% coal. Post spinoff, the coal generating capacity is relatively unchanged at 40%. Fitch consider the Raven assets to have relatively high risk of incurring sizeable future compliance costs as Maryland has a history of imposing stringent environmental mandates, although there is no substantial environmental capex required in the foreseeable future (management estimates that approximately $118 million will be spent on major environmental mandates, 85% of which will be on PPLES' fleet and remaining on the Raven fleet). Combined generation fleet will continue to be concentrated in PJM. Approximately 86% of Talen's total capacity will be located in PJM. Though PJM's capacity market lends some stability in earnings and cash flow by providing visibility to capacity revenues three years in advance, the auction results have been unpredictable. The Negative Rating Watch can be resolved upon closing after completing a detailed assessment of the financial and operating statistics of the Riverstone generating portfolio and the combined fleet, the expected synergy benefits, the impact of possible divestitures needed to mitigate market power concerns, and the final capital structure of the new entity. RATING SENSITIVITIES PPL Positive: -- A constructive outcome in the rate cases in Kentucky; -- A final capital structure at PPL consistent with Fitch's current expectations; -- PPL is not subject to any financial and/or operational obligations as a condition for closing the spinoff transaction. Negative: -- FFO adjusted leverage excluding U.K. exceeding 5x beyond the heavy utility spending period; -- Any material adverse development in the regulatory framework in the service territories that PPL's regulated utilities operate in, such as change in environmental cost recovery mechanisms. PPLEU Positive: -- Future positive rating action appears unlikely in the next 12-18 months. Negative: -- FFO adjusted leverage exceeding 5x on sustained basis. KU and LG&E Positive: -- Future positive rating action appears unlikely in the next 12-18 months given the large capital spending program. Negative: -- Material adverse development in the regulatory framework in Kentucky; -- FFO adjusted leverage exceeds 4.25x on a sustained basis. PPLES/Talen: Positive: -- A conservative hedging strategy that adds visibility to EBITDA and cash flows over a two-three year forecast period; -- Adjusted DEBT to EBITDA ratio below 4x on a sustainable basis. Negative: -- A large open position for fuel purchases as well as power sales; -- An aggressive growth strategy that could include leveraged acquisitions and/or development of non-contracted generation assets; -- Adjusted DEBT to EBITDA ratio above 4x on a sustainable basis. Fitch upgrades these ratings with a Stable Outlook: PPL Electric Utilities Corp. -- Long-term IDR to 'BBB+' from 'BBB'; -- Secured debt to 'A' from 'A-'; Fitch affirms these ratings with a Positive Outlook: PPL Corp -- Long-term IDR at 'BBB'; -- Short-term IDR at 'F2'. PPL Capital Funding Inc. -- Senior unsecured debt at 'BBB'; -- Junior subordinated notes at 'BB+'; Fitch affirms these ratings with a Stable Outlook: PPL Electric Utilities Corp. -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'. LG&E and KU Energy LLC -- Long-term IDR at 'BBB+'; -- Senior unsecured debt at 'BBB+'; -- Short-term IDR at 'F2'. Kentucky Utilities Company -- Long-term IDR at 'A-'; -- Secured debt at 'A+'; -- Secured pollution control bonds at 'A+/F2'; -- Senior unsecured debt at 'A'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'. Louisville Gas and Electric Company -- Long-term IDR at 'A-'; -- Secured debt 'A+'; -- Secured pollution control bonds at 'A+/F2'; -- Senior unsecured debt at 'A'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'. Fitch maintains ratings and Rating Watch Negative on these: PPL Energy Supply, LLC. -- Long-term IDR at 'BB'; -- Senior unsecured debt at 'BB'; -- Short-term IDR at 'B'; -- Commercial paper at 'B' PROTECTIVE LIFE: Fitch Retains 'BB+' Rating on CreditWatch Pos. --------------------------------------------------------------- Fitch Ratings has maintained the ratings of Protective Life Corp. (NYSE: PL) (IDR 'BBB+') and its primary life insurance subsidiaries (IFS 'A') on Rating Watch Positive. Key Rating Drivers PL's ratings were placed on Rating Watch Positive on June 4, 2014, following the announcement that the company had agreed to be acquired by Japan-based Dai-ichi Life Insurance Company, Ltd. (Dai-ichi Life) in a transaction valued at $5.7 billion. The transaction is expected to close in late 2014 or early 2015 subject to various pending regulatory approvals in Japan and the U.S. Fitch views the proposed transaction as a credit positive for PL based on the financial strength of Dai-ichi Life (IFS 'A+'), which is the second largest life insurance company in Japan and ranks as one of the largest life insurers globally. The transaction reflects a broader strategic initiative by Dai- ichi Life to expand its life insurance business outside of Japan. The proposed acquisition of PL represents Dai-ichi Life's first acquisition in the U.S. life insurance market. Fitch expects PL's existing management team and operating strategies will largely remain in place following the close of the transaction. Assuming the transaction progresses as expected and there are no material changes in the credit metrics of PL, Fitch is unlikely to comment further on the ratings of PL until completion of its acquisition by Dai-ichi. RATING SENSITIVITIES Fitch could upgrade PL's ratings following the close of the transaction based on a review of integration plans, financial projections, strategic fit within the Dai-ichi Life organization, and degree of support provided by Dai-ichi Life to PL. Fitch could affirm PL's ratings at current levels if the transaction doesn't close or if Fitch concludes that PL lacks sufficient strategic importance within the Dai-ichi Life organization to support an alignment of the ratings. These ratings remain on Rating Watch Positive: Protective Life Corporation -- IDR 'BBB+'; -- $150 million of 6.40% senior notes due 2018 'BBB'; -- $400 million of 7.38% senior notes due 2019 'BBB'; -- $300 million of 8.45% senior notes due 2039 'BBB'; -- $288 million of 6.25% subordinated debt due 2042' 'BB+'; -- $150 million of 6.00% subordinated debt due 2042 'BB+'. PLC Capital Trust V -- $103 million of 6.13% trust-preferred stock due 2034 'BB+'. Protective Life Insurance Company Protective Life and Annuity Insurance Company West Coast Life Insurance Company MONY Life Insurance Co. -- IFS 'A'. RADIOSHACK CORP: Resolving Creditor Dispute Won't Stop Demise ------------------------------------------------------------- Jonathan Berr at InvestorPlace reports that resolving RadioShack Corporation's dispute with creditors Salus Capital Partners and Cerberus Capital Management will hasten the Company's inevitable demise by a few months at best. InvestorPlace adds that if the Company can't resolve the dispute, it is still headed to Chapter 11 bankruptcy. The Company, says InvestorPlace, is locked in a fight with Salus Capital and Cerberus Capital over claims whether it has breached the terms of a $250 million loan. According to InvestorPlace, the Company's cash dropped to $30.5 million in cash and cash equivalents as of the end of August 2014, from $109.6 million in February 2014. InvestorPlace relates that when the Company's CEO, Joe Magnacca, was hired in 2013, the Company was already heading into the fiscal abyss, as it failed to keep up with the times. InvestorPlace says that the Company quit the PC market in the 1990s after it was eclipsed by other tech companies, and its niche in batteries, cell phones and electronics parts have also withered over time. About Radioshack Corporation RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com-- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack reported a net loss of $400.2 million in 2013, a net loss of $139.4 million in 2012, and net income of $72.2 million in 2011. The Company's balance sheet at Aug. 2, 2014, showed $1.14 billion in total assets, $1.21 billion in total liabilities and a $63 million total shareholders' deficit. * * * As reported by the TCR on Sept. 15, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Fort Worth, Texas-based RadioShack Corp. to 'CCC-' from 'CCC'. "The downgrade comes as the company announced it will seek capital, and that such a transaction could include a debt restructuring in addition to store closures and other measures," said Standard & Poor's credit analyst Charles Pinson-Rose. In the Sept. 16, 2014, edition of the TCR, the TCR reported that Fitch Ratings had downgraded the Long-term Issuer Default Rating (IDR) for RadioShack Corporation (RadioShack) to 'C' from 'CC'. The downgrade reflects the high likelihood that RadioShack will need to restructure its debt in the next couple of months. The TCR reported on March 13, 2014, that Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa2 from Caa1. "The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Mickey Chadha, Senior Analyst at Moody's said. RADIOSHACK CORP: To Cut More Costs as Losses Mount -------------------------------------------------- Drew Fitzgerald and Chelsey Dulaney, writing for The Wall Street Journal, reported that RadioShack Corp. outlined a $400 million cost-cutting plan it hopes will stanch a hemorrhage of cash, as the electronics chain tries to get through the holiday season in good enough shape to trigger a rescue by its lenders. According to the report, the move came as RadioShack reported another quarterly decline in revenue and widening losses, reflecting in part a sharp drop in sales of mobile phones over the Thanksgiving shopping weekend. About Radioshack Corporation RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com-- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack reported a net loss of $400.2 million in 2013, a net loss of $139.4 million in 2012, and net income of $72.2 million in 2011. The Company's balance sheet at Aug. 2, 2014, showed $1.14 billion in total assets, $1.21 billion in total liabilities and a $63 million total shareholders' deficit. * * * As reported by the TCR on Sept. 15, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Fort Worth, Texas-based RadioShack Corp. to 'CCC-' from 'CCC'. "The downgrade comes as the company announced it will seek capital, and that such a transaction could include a debt restructuring in addition to store closures and other measures," said Standard & Poor's credit analyst Charles Pinson-Rose. In the Sept. 16, 2014, edition of the TCR, the TCR reported that Fitch Ratings had downgraded the Long-term Issuer Default Rating (IDR) for RadioShack Corporation (RadioShack) to 'C' from 'CC'. The downgrade reflects the high likelihood that RadioShack will need to restructure its debt in the next couple of months. The TCR reported on March 13, 2014, that Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa2 from Caa1. "The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Mickey Chadha, Senior Analyst at Moody's said. RADIOSHACK CORP: To End 401(k) Retirement Matching to Cut Costs --------------------------------------------------------------- Lauren Coleman-Lochner, writing for Bloomberg News, reported that RadioShack Corp., the struggling electronics retailer, will stop matching employees' retirement-fund contributions and close stores to help cut costs. According to the report, citing an internal memo from Chief Officer Joe Magnacca, RadioShack will discontinue matching for 401(k) and 1165(e) plans on Feb. 1. The company plans to close as many as 1,100 stores in its next fiscal year, contingent upon consent from lenders, some of which have blocked attempts to shut them. RadioShack is also reviewing health benefits, the report said, citing the memo. About Radioshack Corporation RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com/-- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack reported a net loss of $400.2 million in 2013, a net loss of $139.4 million in 2012, and net income of $72.2 million in 2011. The Company's balance sheet at Aug. 2, 2014, showed $1.14 billion in total assets, $1.21 billion in total liabilities and a $63 million total shareholders' deficit. * * * As reported by the TCR on Sept. 15, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Fort Worth, Texas-based RadioShack Corp. to 'CCC-' from 'CCC'. "The downgrade comes as the company announced it will seek capital, and that such a transaction could include a debt restructuring in addition to store closures and other measures," said Standard & Poor's credit analyst Charles Pinson-Rose. In the Sept. 16, 2014, edition of the TCR, the TCR reported that Fitch Ratings had downgraded the Long-term Issuer Default Rating (IDR) for RadioShack Corporation (RadioShack) to 'C' from 'CC'. The downgrade reflects the high likelihood that RadioShack will need to restructure its debt in the next couple of months. The TCR reported on March 13, 2014, that Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa2 from Caa1. "The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Mickey Chadha, Senior Analyst at Moody's said. RENTPATH INC: New $30MM Debt Change No Impact on Moody's B2 CFR --------------------------------------------------------------- Moody's says RentPath, Inc's $30 million shift of second lien debt to first lien debt will not impact the B2 corporate family rating, B1 rating on the first lien credit facility, or the Caa1 rating on the second lien term loan. The outlook remains stable. The change will reduce the second lien term loan to $170 million from $200 million and increase the first lien term loan to $505 million from $475 million. Higher interest expense due to changes in proposed pricing is expected to lead to modestly lower free cash flow pro- forma for the transaction. Initially, the borrower will be Regal Finance Sub, LLC and following the consummation of the acquisition, RentPath, Inc. Headquartered in Norcross, Georgia, RentPath, Inc. (RentPath) (fka PRIMEDIA Inc.) is a leading provider of digital classified advertising primarily for apartment leasing in addition to modest operations in new home sales. The company operates a number of web properties including ApartmentGuide.com, Rent.com, Rentals.com, and RentalHouses.com. In May of 2012, RentPath acquired Rent.com from EBay, Inc. for $145 million, expanding its market share and presence in the online apartment rental advertising market. Pro- forma for the transaction, RentPath will be owned by Providence Equity Partners LLC and TPG Partners VI, L.P which will have equal ownership positions of 48.7%. RentPath generated approximately $250 million of revenue for the twelve months ended September 30, 2014, pro forma for the sale of DistribuTech on February 1, 2014. REVEL AC: Atlantic City Fails to Recover Taxes at Tax-Lien Sale --------------------------------------------------------------- Tom Corrigan, writing for Daily Bankruptcy Review, reported that Atlantic City, N.J., has failed to recoup more than $30 million in taxes owed by the shuttered Revel Casino Hotel, a blow to a city that is struggling to meet its budget after the closure of four boardwalk casinos this year. According to the report, at a tax- lien sale held in city hall, Atlantic City auctioned off the rights to collect the unpaid taxes from Revel as well as Trump Entertainment Resorts Inc.'s two casinos, the Trump Taj Mahal and the Trump Plaza. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19, 2014, to pursue a quick sale of the assets. The Chapter 11 cases are assigned to Judge Gloria M. Burns. The Debtors' Chapter 11 cases are jointly consolidated for procedural purposes. Revel AC estimated assets ranging from $500 million to $1 billion, and the same amount of liabilities. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' Counsel, and Moelis & Company, LLC, is the investment banker. The Debtors' solicitation and claims agent is Alixpartners, LLP. The prepetition first lenders are represented by Cadwalader, Wickersham & Taft LLP. The prepetition second lien lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP. This is Revel AC's second trip to bankruptcy. The company first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13- 16253) on March 25, 2013, with a prepackaged plan that reduced debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. SABRA HEALTH: Fitch Assigns 'BB+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has assigned the following initial ratings to Sabra Health Care REIT, Inc. (NASDAQ: SBRA) and its operating partnership Sabra Health Care Limited Partnership (Sabra): Sabra Health Care REIT, Inc. -- Issuer Default Rating (IDR) 'BB+'; -- Cumulative redeemable preferred stock 'BB-'. Sabra Health Care Limited Partnership -- IDR 'BB+'; -- Unsecured revolving credit facility 'BB+'; -- Unsecured term loan 'BB+'; -- Senior unsecured notes 'BB+'. The Rating Outlook is Stable. KEY RATING DRIVERS Sabra's 'BB+' IDR reflects its investment grade capitalization (based on its unsecured borrowing strategy and strong key credit metrics), offset by portfolio factors such as asset and tenant concentration. Such factors increase the risk to operating cash flows (and in turn to unsecured bondholders) and are manageable in isolation but inconsistent with investment grade ratings in the aggregate. Fitch's ratings are underpinned by certain expectations such as continued diversification, the stabilization of the Forest Park Medical Centers with appropriate coverage, and material improvement in the facility level coverage for the Holiday portfolio. Failure to achieve these benchmarks could result in negative momentum on the ratings and/or Outlook. The Stable Outlook reflects Fitch's belief that despite the expectation of continued diversification, it will be insufficient to warrant positive ratings momentum over the next 12 to 24 months. ASSET CONCENTRATION KEY RISK Asset concentration is a key negative factor for the ratings as it increases the magnitude of the downside risk to recurring operating EBITDA should there be a lease default. SBRA has investments in three acute-care hospitals that operate under Forest Park Medical Center, all within the greater Dallas, TX area. These assets comprise 12.2% of revenues combined, 2% to 6% individually and could comprise a greater percentage upon the exercise of purchase / put options. The risk posed by each hospital is increased by the limited operating histories, proximity to each other and lease structures. All of the assets are new and in various stages of stabilization providing a limited track record at best to determine the robustness and volatility of facility level coverage. Moreover, as all of the facilities operate under the same name in relatively close proximity to each other, an operating or regulatory issue at one facility could affect patient volumes and operating performance at the others. Lastly, while the facilities are affiliated, SBRA does not benefit from structural considerations such as a master lease or cross default or cross collateralization provisions. The ratings assume the assets will stabilize with appropriate coverage levels and failure to do so could result in negative momentum on the ratings and/or Outlook. TENANT DIVERSIFICATION IMPROVING As Sabra was created through the separation of Sun Healthcare Group, Inc.'s (now known as Genesis Healthcare) real estate and operating assets, it derived from Genesis 100% of its revenues at the onset and 36% at Sept. 30, 2014 pro forma for the Holiday transaction. Tenant concentration poses two main threats to REITs: a larger portion of EBITDA at risk should there be a default or bankruptcy and Fitch's expectation that larger, more concentrated tenants have significant leverage when negotiating lease renewals given the pooling of assets into master leases. The key considerations when analyzing tenant concentration are the quality of the underlying tenant (which reduces the risk to cash flows during the life of the lease) and the balance of power between the tenant and the landlord as determined by the amount of the tenant's real estate controlled by the landlord. As the amount of real estate that the tenant utilizes that is leased from the REIT increases, the more the balance tilts in favor of the REIT. The leases between Sabra and Genesis Healthcare (pro forma for its combination with Skilled Healthcare Group) will comprise 15% of Genesis' real estate but 36% of Sabra's revenues. DIVERSIFYING VIA ACQUISITIONS BUT PAYING TO DO SO Sabra has actively and effectively used acquisitions to improve portfolio diversification, most recently through the $550 million Holiday transaction. The 21 independent living facility portfolio totals 2,850 units across 15 states. SBRA entered into a triple- net master lease with subsidiaries of Holiday AL Holdings LP with an initial term of 15 years and two five-year renewal options. The transaction has an initial cash yield of 5.5% and a 7.1% GAAP yield reflecting annual rent increases of 4% in years two and three and the greater of 3.5% or inflation during the remainder of the initial term. Holiday operates more than 300 senior living facilities and is owned by investment funds managed by affiliates of Fortress Investment Group LLC. The lease includes credit enhancement from guarantor entities including fixed charge coverage and other covenants. While the Holiday transaction improved SBRA's diversification, it is not without risk. The price paid is noteworthy on an absolute basis and relative to past transaction by other REITs with the initial cash yield of 5.5% and approximately 50 basis points (bps) to 100 bps lower than recent comparable transactions. Moreover, while the guarantor fixed charge coverage is fair at 1.25x and implies a lower probability of lease default, Fitch believes facility level coverage is materially lower and will require significant growth in operating cash flows to maintain and/or improve given annual rental increases. Fitch views facility level coverage as a more meaningful predictor of the probability that the tenant can and would want to renew the lease at maturity especially in instances where the REIT does not control all or practically all of the tenant's real estate such as with SBRA and Holiday. INVESTMENT GRADE METRICS AND CAPITALIZATION Sabra's capitalization is consistent with its investment grade peers being predominantly fixed-rate and unsecured and does not require significant mortgage repayments and asset unencumbering to complete the transition. Moreover, SBRA's target leverage (low 4.0x range), average actual leverage (average of all quarters since inception is 5.0x) and Fitch's forecasted leverage (between 5.0x and 5.5x through 2016) are all consistent with investment grade ratings for SBRA's asset composition. Similarly, fixed charge coverage was 3.2x for 3Q'14 pro forma and Fitch expects will sustain around 3.0x through 2016 which is strong for the 'BB+' rating and appropriate for a 'BBB-' IDR. Fitch calculates leverage as total debt less readily available cash to recurring operating EBITDA, including stock-based compensation and acquisition costs, as senior management has the option to be compensated in cash or shares for bonuses and Board of Directors fees. Acquisition expenses are recurring in nature for issuers such as SBRA that have external growth as an explicit part of its strategy. Combined, the inclusion of these costs provides a more accurate reflection of the annual overhead expenses. Fitch calculates fixed charge coverage as recurring operating EBITDA to total interest incurred and preferred dividends. ISSUER SIZE AND RATINGS Pro forma for Holiday, SBRA owns more than $2 billion of gross assets which ranks as one of the smallest REITs in Fitch's rated universe. However, Fitch currently rates six REITs investment grade despite owning less than $2 billion of gross assets and views a REIT's size as a determinant of operating efficiencies and the cost of capital not necessarily access to capital. Moreover, the probability of default is aligned with the size and quality of the unencumbered pool from which a REIT would sell assets or encumber in order to repay recourse debt maturities. Fitch views the quality of the underlying real estate as more important factors than sponsor size or quality when accessing secured debt or the transaction market. STRONG LIQUIDITY DRIVEN BY LONG-DATED BUT CONCENTRATED MATURITIES Sabra's corporate liquidity is strong for the rating due to only $7.1 million of funding obligations for the period Oct. 1, 2014 through Dec. 31, 2016 compared to $337 million of sources, pro forma. A long-dated yet concentrated debt maturity schedule is somewhat common for smaller REITs (especially those that issue public unsecured bonds as opposed to smaller denomination term loans and private placements) and results in a lower probability of default in the initial years but greater bullet maturity risk in the later years. The 'BB+' IDR is predicated on the expectation that SBRA will improve the staggering of its debt maturities going forward. SBRA's nearest debt maturity will be the $200 million term loan and any balance on the revolving line of credit in 2018 (both of which can be extended at SBRA's option to 2019). SBRA's liquidity could be reduced further should SBRA acquire the two Forest Park Medical Centers for which SBRA is the lender. After 2018 when 30% of total debt matures, SBRA's debt maturities are again concentrated in 2021 (43%) and 2023 (18%). SBRA maintains appropriate contingent liquidity in the form of unencumbered assets which cover unsecured debt net of readily available cash by 2.1x - 2.5x assuming a stressed 8.5% to 10.5% cap rate. Fitch excludes unencumbered interest and other income of $21.5 million from coverage and notes that including the debt investments would improve coverage by 0.0x to 0.3x depending on the haircut applied to face value. PREFERRED NOTCHING AND NOTE COVENANTS The two-notch differential between SBRA's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BB+'. Based on Fitch Research on 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', also available at Fitch website, these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. Certain of the covenants of SBRA's senior unsecured notes, most notably the limitation on indebtedness and maintenance of total unencumbered assets, can be suspended upon certain events. SBRA would still be subject to the financial covenants in its bank credit facility agreement; however, those may be renegotiated with greater ease and a breach would not trigger a cross-default so long as the bank lending group did not accelerate repayment. While Fitch does not rate to the covenants, the lack of covenants would be a differentiating factor between SBRA's unsecured notes and those of its REIT peers. STABLE OUTLOOK The Stable Outlook reflects Fitch's belief that SBRA's portfolio diversification will improve but not sufficiently to warrant positive momentum on the ratings over the next 12-to-24 months. Fitch expects SBRA's capitalization will remain consistent with a higher rating. RATING SENSITIVITES Fitch views SBRA's existing leverage and fixed charge coverage as being consistent with higher ratings. As such, positive momentum on SBRA's ratings and/or Outlook will be driven by continued a material diversification that reduces reliance on individual assets and/or tenants. The following factors may result in negative momentum on SBRA's ratings and/or Outlook: -- Increasing asset and/or tenant concentration; -- Deteriorating coverage in the Holiday portfolio; -- Forest Park Medical Center assets do not stabilize with sufficient facility-level coverage; -- Fitch's expectation of leverage sustaining above 6.5x (leverage was 6.0x at Sept. 30, 2014 pro forma for the certain investments and issuances subsequent to the end of the quarter). SANDERS LARIOS: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Sanders, Larios, Larios & Luevanos, a Partnership 3122 South Riverside Avenue Bloomington, CA 92316 Case Number: 14-24822 Involuntary Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Hon. Wayne E. Johnson Petitioner's Counsel: David M Goodrich, Esq. SULMEYERKUPETZ APC 333 South Hope St 35th Floor Los Angeles, CA 90071 Tel: 213-626-2311 Email: dgoodrich@sulmeyerlaw.com Petitioners Nature of Claim Claim Amount ----------- --------------- ---------------- Sergio Larios General Partner 25% Gen. Partner 3122 South Riverside Avenue Bloomington, CA 92316 Carlos Larios General Partner 25% Gen. Partner 3122 South Riverside Avenue Bloomington, CA 92316 Dolores Luevanos General Partner 25% Gen. Partner 830 So Chestnut Avenue LaBrea, CA 92821 SANDRINE'S LIMITED: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Sandrine's Limited Liability Company 8 Holyoke Street Cambridge, MA 02138 Case No.: 14-15702 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Hon. William C. Hillman Debtor's Counsel: Alex F. Mattera, Esq. DEMEO, LLP 200 State Street Boston, MA 02109 Tel: (617) 263-2600 ext. 244 Fax: (617) 263-2300 Email: amattera@demeollp.com Total Assets: $35,000 Total Liabilities: $1.37 million The petition was signed by Gwyneth B. Trost, manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mab14-15702.pdf SELCO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Selco Construction, Inc. P.O. Box 1142 Smithfield, NC 27577 Case No.: 14-07165 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of North Carolina (Raleigh Division) Debtor's Counsel: J.M. Cook, Esq. J.M. COOK, P.A. 5886 Faringdon Place, Suite 100 Raleigh, NC 27609 Tel: 919 675-2411 Email: J.M.Cook@jmcookesq.com Total Assets: $2.90 million Total Liabilities: $490,342 The petition was signed by Franklin W. Eason, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nceb14-07165.pdf SILVERADO STREET: Files for Chapter 11 with $11.3-Mil. Debt ----------------------------------------------------------- Silverado Street, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Cal. Case No. 14-09543) on Dec. 9, 2014, disclosing $11.3 million in debt against assets of $21.8 million. Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,450,000 B. Personal Property $9,300,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims [$11,237,000] E. Creditors Holding Unsecured Priority Claims $5,000 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $21,750,000 [$11,312,000] According to the statement of financial affairs, the business didn't generate any income during the two years preceding the bankruptcy filing. A copy of the schedules and the SOFA is available for free at: http://bankrupt.com/misc/casb_14-09543_SAL.pdf The case is assigned to Judge Christopher B. Latham. James Lee, Esq., at the Legal Offices of James J. Lee, in Las Vegas, serves as counsel. SMILE BRANDS: Moody's Lowers Corporate Family Rating to Caa1 ------------------------------------------------------------ Moody's Investors Service downgraded Smile Brands Group, Inc.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa1-PD from B3-PD, and its senior secured bank credit facility rating to B2 from B1. The rating outlook is negative. The rating action reflects the company's weak operating performance and deteriorating credit metrics, attributable to a challenging consumer spending environment, and declining operating margins resulting from higher labor, marketing and corporate overhead expenses. The downgrade also reflects Moody's concerns related to the minimal cushion under financial covenants in the company's bank credit facilities. Despite a recent equity infusion by financial sponsor, Welsh, Carson, Anderson & Stowe ("WCAS"), the company faces minimal headroom under its financial maintenance covenants due to recent earnings volatility and the contractual tightening of covenant requirements in the near term. However, Moody's believes that there is a high likelihood that WCAS will continue to provide equity support in advance of any potential covenant breaches over the next year, which would otherwise require a waiver or an amendment. Following is a summary of Moody's rating actions. Ratings downgraded: Smile Brands Group, Inc. Corporate Family Rating to Caa1 from B3 Probability of Default Rating to Caa1-PD from B3-PD Senior secured revolving credit facility to B2 (LGD 3) from B1 (LGD 3) Senior secured first lien term loan to B2 (LGD 3) from B1 (LGD 3) The rating outlook is negative. Ratings Rationale Smile Brands' Caa1 Corporate Family Rating reflects the company's relatively small size, strong competitive challenges within certain key markets, and the difficulty it might face in turning its operating performance around. The rating also reflects Moody's expectation that the company's very high financial leverage, weak interest coverage, and negative free cash flow will continue in the year ahead. The credit profile also reflects liquidity concerns related to the weak cushion under the company's credit facility financial covenants. Further constraining the rating is the industry's exposure to economic cycles and consumer spending patterns given the relatively high proportion of out-of-pocket expenses patients must pay for dental treatment. The ratings are supported by Smile Brands' strong market position as one of the largest dental service organizations (DSO) in the United States, maintaining leading competitive positions across many of its primary markets. The negative rating outlook reflects Moody's concerns that Smile Brands will be challenged to stabilize and improve operating performance, and also reflects Moody's expectation that the company's credit metrics will remain constrained due to elevated costs, and that its liquidity profile will remain weak. In addition, while Moody's expects the company to obtain additional equity infusions from the financial sponsor as needed over the next few quarters, the absence of an equity infusion will likely result in the breach of financial covenants, requiring a waiver or an amendment by the lenders. The ratings could be downgraded if the company's operating performance or sources of liquidity deteriorate, or if for any reason Moody's becomes further concerned around the sustainability of Smile Brands' capital structure. The ratings could be upgraded if the company's operating performance stabilizes and its liquidity profile improves. An upgrade would also require Smile Brands to reduce its financial leverage with debt to EBITDA approaching 6.0 times on a sustained basis. The principal methodology used in these ratings was Business and Consumer Service Industry published in December 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. Headquartered in Irvine, California, Smile Brands Group Inc. is a leading dental service organization ("DSO") in the United States. Through its owned subsidiaries and affiliated professional corporations (PCs), the company provides comprehensive business support services, non-clinical personnel, facilities and equipment to more than 1,200 dentists and hygienists practicing in over 360 offices nationally. Smile Brands' primary equity sponsor is Welsh, Carson, Anderson & Stowe ("WCAS"). For the twelve months ended September 30, 2014, the company had revenues of $509 million. SOLEDAD REDEVELOPMENT: S&P Cuts Rating on Increment Bonds to 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'BB' from 'BB+' on Soledad Redevelopment Agency, Calif.'s series 2007A and 2007B tax increment bonds and placed them on CreditWatch with negative implications. "The lowered rating reflects our view of the agency's continued declines in project area assessed value, which resulted in maximum annual debt service coverage levels that have been insufficient for the past three years," said Standard & Poor's credit analyst Li Yang. "The CreditWatch placement follows repeated attempts by Standard & Poor's to obtain timely information of satisfactory quality to maintain our rating on the securities in accordance with our applicable criteria and policies," Mr. Yang added. If S&P does not receive the requested information by Dec. 24, 2014, it will likely result in its suspension or withdrawal of the affected rating, preceded, in accordance with S&P's policies, by any change to the rating that it considers appropriate given available information. The bonds are secured by tax increment revenue collected from the agency's single project area, which includes a 525-acre original project area (OPA) and 225 acres that were added to the OPA in 2006. The 225-acre additional project area (APA) began generating tax increment revenue in fiscal 2008. Soledad, with an estimated population of 15,000, is located in Monterey County's Salinas Valley on Highway 101, about 25 miles south of Salinas and 120 miles south of San Francisco. SOPA SQUARE: BC Court Approves Purchase & Sale Agreement -------------------------------------------------------- The Supreme Court of British Columbia approved on Dec. 4, 2014, a purchase and sale agreement with a stalking horse purchase for substantially all of the assets, undertakings and property of the SOPA entities comprised of P218 Enterprises Ltd., Wayne Holdings Ltd., and SOPA Square Joint Venture. The agreement is subject to, among other tings, the conduct of a further marketing and sales process in accordance with certain bidding procedures for the property. These procedures are designed to provide other interested parties with the opportunity to submit offers to purchase the property on terms more favorable than those set out in the agreement. SOPA Square is a zoned and entitled development with approved plans for a mixed-use real estate project in the Lower Mission area of British Columbia's Okanagan Valley. Investment highlights include: -- Two newly constructed commercial buildings containing approximately 40,000 feet of ground floor retail space and 19,000 square feet of first floor office space. -- Zoned and entitled development plans for an eleven storey residential tower and six storey townhome complex representing 160,000 square feet of buildable residential space. -- A newly constructed below ground parkade containing 213 parking spaces and a surface parking lot containing an additional 59 spaces (currently under construction) -- Location in a thriving, mixed use community, in the stylish Lower Mission area of Kelowna, BC, with close proximity to Kelowna General Hospital. A copy of the bidding procedures or other materials in these proceedings is available at http://www.ey.com/ca/sopa On Jan. 27, 2014, Ernst & Young Inc. was appointed by the Court as receiver of certain of SOPA Entities' assets. SOUTHEAST POWERGEN: S&P Rates $480MM Sr. Secured Term Loan 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating and '2' recovery rating to project finance entity Southeast PowerGen LLC's (SEPG) $480 million senior secured term loan due 2021 and $70.5 million revolving credit facility due 2019. S&P's recovery expectations are in the upper half of the 70% to 90% range. The ratings reflect S&P's review and assessment of final documents and legal opinions. The outlook is stable. SEPG is a project-financed, special-purpose entity owning roughly 2.8 gigawatts of generation capacity from six natural gas-fired plants in Georgia. SEPG is 75.05% owned by an affiliate of Carlyle Power Partners, and 24.95% owned by an affiliate of GE Energy Financial Services (GE EFS). SEPG issued a $480 million senior secured term loan and a $70.5 million revolving credit facility. Net proceeds are going toward supporting Carlyle's acquisition of SEPG from previous owners ArcLight and the Government of Singapore Investment Corp., repay existing subsidiary debt, make a distribution to GE EFS, and fund liquidity reserve accounts. SEPG will repay the term loan through minimal mandatory amortization and an annual cash flow sweep that is the greater of either 75% of excess cash flow or an amount sufficient to meet specific targeted debt balances. S&P's 'BB' rating primarily reflects exposure to recontracting risk when two key offtake agreements expire after 2015, moderate debt leverage (initial consolidated debt per kilowatt (kW) of roughly $249), reliance on residual cash flows from subsidiary Mackinaw Power LLC, and refinancing risk at the end of the term loan B tenor. "Those risks are partially offset by the project's strong tolling contracts with creditworthy counterparties. The tolling agreements limit demand and price risk by providing capacity payments in addition to an ability to pass through costs for fuel and other variable expenses," said Standard & Poor's credit analyst Stephen Coscia. The stable outlook reflects S&P's expectation for steady cash flows coming from the project's strong tolling agreements that minimize market or fuel price exposure. S&P thinks it is likely that SEPG can recontract the two agreements expiring at the end of 2015 for rates sufficient to support the current rating. S&P could raise the rating if the portfolio continues its strong operational performance, and Effingham and Sandersville are recontracted at rates substantially higher than in S&P's base case. An upgrade would require an expected term loan balance at maturity of less than $150 million, down from S&P's current expectation of about $170 million and DSCRs in the post-refinance phase closer to 2.5x. S&P could lower the rating if debt service coverage fell close to 1.5x, or the expected term loan balance at maturity increased to about $225 million. This could happen as a result of poor operational performance or the project fails to sign replacement contracts at Effingham and Sandersville for sufficient rates. SPECIALTY PRODUCTS: Court Confirms Ch. 11 Reorganization Plan ------------------------------------------------------------- Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware on Dec. 10, 2014, issued an order confirming the joint plan of reorganization of Specialty Products Holding Corp. and its debtor affiliates. The Debtors received 71,995 acceptances out of 72,006 votes from holders of claims under Class 4a(SPHC Asbestos Personal Injury Claims), with Class 4a claimants who voted in favor of the Plan holding claims in the amount of $1,356,209,300 for voting purposes only, those acceptances being 99.98% in number and 99.99% in amount of all ballots received from holders of Class 4a Claims. The Debtors received 49,799 acceptances out of 49,810 votes from holders of claims under Class 4b (NMBFiL Asbestos Personal Injury Claims), with Class 4b claimants who voted in favor of the Plan holding claims in the amount of $306,072,446 for voting purposes only, those acceptances being 99.99% in number and 99.99% in amount of all ballots received from holders of Class 4b Claims. As reported in the Troubled Company Reporter, the asbestos trust to be created under the Plan will contain two accounts for the resolution of Asbestos Personal Injury Claims and payment of related Asbestos Personal Injury Trust Expenses: one for holders of SPHC Asbestos Personal Injury Claims and one for holders of NMBFiL, Inc., Asbestos Personal Injury Claims. These accounts will be funded as follows for the benefit of holders of Asbestos Personal Injury Claims: * The trust account for holders of SPHC Asbestos Personal Injury Claims will be funded by (i) an aggregate of $447.5 million in cash paid by one or more of the SPHC Parties and International on the Effective Date and (ii) the SPHC Payment Note issued by the SPHC Parties and International as co-obligors. The SPHC Payment Note will (a) bear no interest, (b) mature on the fourth anniversary of the Effective Date, (c) be secured by the SPHC Pledge, and (d) provide for the following scheduled principal payments to the Asbestos Personal Injury Trust, in each case, payable in the form of cash, shares of common stock of International or a combination thereof: (1) on or before the second anniversary of the Effective Date of the Plan, $102.5 million; (2) on or before the third anniversary of the Effective Date of the Plan, $120 million; and (3) on or before the fourth anniversary of the Effective Date of the Plan, $125 million. * The trust account for holders of NMBFiL Asbestos Personal Injury Claims will be funded by (i) an aggregate of $2.45 million in cash paid by one or both of NMBFiL and International on the Effective Date and (ii) the NMBFiL Payment Note issued to the Asbestos Personal Injury Trust by NMBFiL and International as co-obligors. The NMBFiL Payment Note will be (a) in the principal amount of $50,000, (b) secured by the pledge of 100% of the equity of reorganized NMBFiL plus cash or a letter of credit and (c) due on the first anniversary of the Effective Date. The Plan includes asbestos personal injury trust distribution procedures for asbestos claims against each of (i) the SPHC Parties and (ii) NMBFiL that describe a detailed process for treating all claimants asserting Asbestos Personal Injury Claims fairly and equitably. 3M Company, the United States Department of Justice, and the California Franchise Tax Board each raised informal objections to confirmation of the Plan, which were resolved by the parties by the inclusion of certain language in the Confirmation Order. On Dec. 9, the Debtors amended their Plan to reflect comments from certain parties-in-interest as well as certain technical modifications. A full-text copy of the Plan Confirmation Order is available at http://bankrupt.com/misc/SPHCconford.pdf A black-lined version of the Amended Plan dated Dec. 9 is available at http://bankrupt.com/misc/SPHCplan1209.pdf About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., Zachary I. Shapiro, Esq., Paul N. Heath, Esq., and Tyler D. Semmelman, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100 million to $500 million. Specialty Products Holding Corp, together with Bondex International, Inc., are referred to as the Initial Debtors. Counsel to the Official Committee of Asbestos PI Claimants are Natalie D. Ramsey, Esq., and Mark A. Fink, Esq. of Montgomery, Mccracken, Walker & Rhoads, LLP, in Wilmington Delaware, and Mark B. Sheppard, Esq. of the firm's Philadelphia, Pennsylvania division. Counsel to the Future Claimants' Representative are James L. Patton, Jr., Esq., Edwin J. Harron, Esq., Edmon Morton, Esq., Sharon Zieg, Esq., and Erin Edwards, Esq. of Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Competing bankruptcy exit plans have been filed by the Initial Debtors, on one hand, and the Official Committee of Unsecured Creditors and the Future Claimants' Representative on the other. The Debtors' First Amended Joint Plan of Reorganization and the explanatory Disclosure Statement, dated Nov. 18, 2013, provides for an asbestos trust to be established and funded with cash to pay present and future asbestos-related claims. The trust will be funded by secured notes, issued by the Debtors and their ultimate parent, RPM International Inc. ("International"), and the amounts and terms of the notes will, with one exception, be determined by the final outcome or settlement of the litigation that will determine the asbestos claimants' rights in the chapter 11 cases. The one exception is that the notes will provide for an aggregate initial nonrefundable payment of $125 million to the asbestos trust irrespective of the outcome of any litigation. In short, the Debtors and International have committed to pay to asbestos claimants the maximum amount to which they are entitled based on the applicable judgments or rulings in the litigation that will determine the extent of the claimants' rights in the chapter 11 cases, and to make comparable payments to other similarly situated creditors. The PI Committee and the FCR's Third Amended Plan, filed Oct. 15, 2013, provides that: (i) SPHC will be separated from non-Debtor direct or indirect parent Bondex International; (ii) Reorganized SPHC will be managed and/or sold for the benefit of holders of all Claims that are not paid in Cash, subordinated, cancelled or otherwise treated pursuant to the Plan; (iii) all of SPHC's causes of action will survive; (iv) Asbestos PI Trust Claims against SPHC will be channeled to an Asbestos PI Trust; and (v) current SPHC equity interests will be canceled, annulled, and extinguished. On May 20, 2013, the Bankruptcy Court entered an order estimating the amount of the Debtors' asbestos liabilities, and a related memorandum opinion in support of the estimation order. The Bankruptcy Court estimated the current and future asbestos claims associated with Bondex International, Inc. and Specialty Products Holding at approximately $1.17 billion. The estimation hearing represents one step in the legal process in helping to determine the amount of potential funding for a 524(g) asbestos trust. On Aug. 31, 2014, Republic Powdered Metals, Inc., and affiliate NMBFiL, Inc. -- the New Debtors -- sought Chapter 11 protection (Bankr. D. Del. Case No. 14-12028). The New Debtors are indirect subsidiaries of Bondex International and affiliates of the Initial Debtors. Republic Powdered Metal is a leader in the roof coating and restoration industry which provides exclusive products for roof and wall restoration, including an extensive line of roof coatings. NMBFiL is formerly known as Bondo Corporation. It is a manufacturer of auto body repair products for the automotive aftermarket and various other professional and consumer applications. In November 2007, NMBFiL sold substantially all of its assets and no longer has business operation. Republic estimated assets of $10 million to $50 million and debt of less than $10 million as of the bankruptcy filing. The New Debtors were granted, on Sept. 3, 2014, joint administration of their Chapter 11 cases for procedural purposes only, with the chapter 11 cases of Specialty Products Holding Corp. and Bondex International, Inc. SPECIALTY PRODUCTS: RPM Brings Finality to Bondex Asbestos Costs ---------------------------------------------------------------- RPM International Inc. on Dec. 10 disclosed that the United States Bankruptcy Court in Delaware and the United States District Court in Delaware have confirmed the plan of reorganization for RPM's Specialty Products Holding Corp. (SPHC) subsidiary and related entities. SPHC originally filed for bankruptcy protection on May 31, 2010 to permanently resolve asbestos claims related to its Bondex International Inc. subsidiary. At closing of the plan of reorganization, which is expected to take place over the next several days, a trust will be established under Section 524(g) of the United States Bankruptcy Code for the benefit of current and future asbestos personal injury claimants. The trust will assume all liability and responsibility for these current and future asbestos claims, and SPHC and its related entities will have no further liability or responsibility for, and will be permanently protected from, the claims. At the same time, financial results of SPHC's operating subsidiaries, which have not been included in RPM's financial reports since the bankruptcy filing, will be reconsolidated with RPM's results for most of the second half of the company's fiscal year ending May 31, 2015 and subsequently. While RPM continued to own SPHC and its subsidiaries during the bankruptcy process, their financial results were not consolidated with RPM's during that time. RPM will review the financial impact of the reconsolidation during its second quarter earnings conference call on January 7, 2015. "We are pleased to bring finality to our legacy Bondex asbestos liability and welcome back into the RPM family an outstanding group of SPHC operating companies that are generating more than $400 million in sales on an annualized basis, along with strong operating income and cash flow," stated Frank C. Sullivan, RPM chairman and chief executive officer. SPHC operating subsidiaries include: Chemical Specialties Manufacturing Corp., a producer of commercial cleaning products; Day-Glo Color Corp., a leading manufacturer of fluorescent colorants and pigments; Dryvit Systems, Inc., a leading manufacturer of exterior insulation finish systems; Kop-Coat, Inc., a leading producer of wood treatments for lumber and coatings for the marine market; RPM Wood Finishes Group (Mohawk Finishing Products, CCI and Guardian Protection Products, Inc.), a primary supplier of wood coatings to the furniture industry; TCI, Inc., a leading producer of powdered metal coatings; and ValvTect Petroleum Products, a producer of fuel additives. As previously disclosed, the asbestos trust will be funded with $797.5 million in pre-tax contributions. The company estimates that the net after-tax present value of the contributions will be approximately $485.0 million. Contributions will be as follows: $450.0 million in cash at closing, funded through RPM's revolving line of credit with a group of banks; $102.5 million in cash, RPM stock, or a combination of the two, on or before the second anniversary of the plan's effective date; $120.0 million in cash, RPM stock, or a combination of the two, on or before the third anniversary of the plan's effective date; and A final payment of $125.0 million in cash, RPM stock, or a combination of the two, on or before the fourth anniversary of the plan's effective date. About RPM RPM International Inc. -- http://www.RPMinc.com-- is a holding company. The company owns subsidiaries that provide specialty coatings, sealants, building materials and related services serving both industrial and consumer markets. RPM's industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals. Industrial brands include Stonhard, Tremco, Dryvit, Day-Glo, illbruck, Carboline, Flowcrete, Universal Sealants and Euco. RPM's consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., Zachary I. Shapiro, Esq., Paul N. Heath, Esq., and Tyler D. Semmelman, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100 million to $500 million. Specialty Products Holding Corp, together with Bondex International, Inc., are referred to as the Initial Debtors. Counsel to the Official Committee of Asbestos PI Claimants are Natalie D. Ramsey, Esq., and Mark A. Fink, Esq. of Montgomery, Mccracken, Walker & Rhoads, LLP, in Wilmington Delaware, and Mark B. Sheppard, Esq. of the firm's Philadelphia, Pennsylvania division. Counsel to the Future Claimants' Representative are James L. Patton, Jr., Esq., Edwin J. Harron, Esq., Edmon Morton, Esq., Sharon Zieg, Esq., and Erin Edwards, Esq. of Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Competing bankruptcy exit plans have been filed by the Initial Debtors, on one hand, and the Official Committee of Unsecured Creditors and the Future Claimants' Representative on the other. The Debtors' First Amended Joint Plan of Reorganization and the explanatory Disclosure Statement, dated Nov. 18, 2013, provides for an asbestos trust to be established and funded with cash to pay present and future asbestos-related claims. The trust will be funded by secured notes, issued by the Debtors and their ultimate parent, RPM International Inc. ("International"), and the amounts and terms of the notes will, with one exception, be determined by the final outcome or settlement of the litigation that will determine the asbestos claimants' rights in the chapter 11 cases. The one exception is that the notes will provide for an aggregate initial nonrefundable payment of $125 million to the asbestos trust irrespective of the outcome of any litigation. In short, the Debtors and International have committed to pay to asbestos claimants the maximum amount to which they are entitled based on the applicable judgments or rulings in the litigation that will determine the extent of the claimants' rights in the chapter 11 cases, and to make comparable payments to other similarly situated creditors. The PI Committee and the FCR's Third Amended Plan, filed Oct. 15, 2013, provides that: (i) SPHC will be separated from non-Debtor direct or indirect parent Bondex International; (ii) Reorganized SPHC will be managed and/or sold for the benefit of holders of all Claims that are not paid in Cash, subordinated, cancelled or otherwise treated pursuant to the Plan; (iii) all of SPHC's causes of action will survive; (iv) Asbestos PI Trust Claims against SPHC will be channeled to an Asbestos PI Trust; and (v) current SPHC equity interests will be canceled, annulled, and extinguished. On May 20, 2013, the Bankruptcy Court entered an order estimating the amount of the Debtors' asbestos liabilities, and a related memorandum opinion in support of the estimation order. The Bankruptcy Court estimated the current and future asbestos claims associated with Bondex International, Inc. and Specialty Products Holding at approximately $1.17 billion. The estimation hearing represents one step in the legal process in helping to determine the amount of potential funding for a 524(g) asbestos trust. On Aug. 31, 2014, Republic Powdered Metals, Inc., and affiliate NMBFiL, Inc. -- the New Debtors -- sought Chapter 11 protection (Bankr. D. Del. Case No. 14-12028). The New Debtors are indirect subsidiaries of Bondex International and affiliates of the Initial Debtors. Republic Powdered Metal is a leader in the roof coating and restoration industry which provides exclusive products for roof and wall restoration, including an extensive line of roof coatings. NMBFiL is formerly known as Bondo Corporation. It is a manufacturer of auto body repair products for the automotive aftermarket and various other professional and consumer applications. In November 2007, NMBFiL sold substantially all of its assets and no longer has business operation. Republic estimated assets of $10 million to $50 million and debt of less than $10 million as of the bankruptcy filing. The New Debtors were granted, on Sept. 3, 2014, joint administration of their Chapter 11 cases for procedural purposes only, with the chapter 11 cases of Specialty Products Holding Corp. and Bondex International, Inc. SPRINT CORP: Fitch Affirms 'B+' Issuer Default Rating ----------------------------------------------------- Fitch Ratings affirms the 'B+' Issuer Default Rating (IDR) assigned to Sprint Corporation (Sprint) and its wholly owned subsidiaries Sprint Communications Inc. and Clearwire Communications LLC. The Rating Outlook for Sprint's ratings is Stable. KEY RATING DRIVERS -- Fitch believes Softbank has taken important steps to improve the long-term strategic linkage between the two companies during the past year. Softbank has already demonstrated past tangible support with a $5 billion capital infusion. As such, the ratings consider that Softbank may provide additional financial assistance such as loans in the event Sprint required funding outside of current plans to develop its business. Thus, Softbank's implied support benefits Sprint's IDR and reduces the importance of Sprint's standalone financial position relative to the current ratings on Sprint's credit profile. -- Fitch believes Sprint's standalone financial profile has experienced significant deterioration from 'B+' to the mid to low single 'B' rating, which deviates substantially from previous expectations that Sprint would begin to improve its financial performance. Sprint's financial profile will likely remain weak for a longer timeframe than first contemplated due to the time required to address the numerous executional and operational challenges. Additionally, Sprint must combat an intense competitive environment that has experienced more pricing actions during 2014 than at any other time. -- Previous Sprint management initiatives triggered several missteps which exacerbated Sprint's poor brand image, resulted in uncompetitive plan pricing, failed to take stronger actions to reduce the industry's highest cost structure, increased Sprint's exposure to a greater subprime mix and caused substantial network disruption thus causing the firm's turnaround strategy to stall. Consequently, churn has persisted above 2%, operations remain pressured, which caused declining trends in Sprint's operational and financial performance. -- Sprint's new CEO took quick and aggressive actions in August 2014 to completely reposition Sprint's consumer value proposition, implement a creative iPhone leasing program, reduce their subprime exposure, target a $1.5 billion cost reduction program and refocus the network infrastructure initiatives. Early results demonstrate immediate and significant improvement in subscriber trends as postpaid prime/subprime mix and porting ratio improved. Other initiatives to address the network and cost structure will take substantially more time. Whether Sprint can sustain momentum and continue to attract consumers in this competitive environment remains uncertain as competitors will likely respond to future actions particularly if Sprint starts to take material share. -- The positive rating sensitivities place more significance on Sprint executing its new branding, marketing, network and cost initiatives to drive sustained operational improvement that would generate material benefits to Sprint's longer- term financial profile. -- Clearwire's spectrum assets are integral to Sprint's LTE plans to deploy high-band spectrum in high-capacity, urban core areas. This strengthens Sprint's long-term competitive position and ability to offer a differentiated unlimited wireless broadband plan versus its national peers. The on- going AWS-3 spectrum auction reflects the increased value in commercially available spectrum and highlights carriers desire to acquire spectrum to support rapidly growing data consumption. However, Sprint's lagging and subpar LTE deployment, other operators' aggressive deployment of additional LTE capital investment and the efficiency benefits associated with LTE Advanced technology to increase bandwidth throughput could effectively mitigate Sprint's sizeable spectrum advantage during at least the next several years if not longer. Fitch remains concerned with Sprint's ability to effectively compete and sustain positive subscriber trends and operating performance until its LTE network quality is closer to its peers. As part of the plan to address the network issues, Softbank Group's chief network architect, Junichi Miyakawa, has been named technical chief operating officer responsible for overseeing the company's network and technology organization, including related strategy, network operations and performance. Liquidity, Maturities As of Sept. 30, 2014, Sprint's liquidity position was supported by $4.1 billion of cash, $1.2 billion of short-term investments and $2.4 billion borrowing capacity under its $3.3 billion revolver that matures in 2018. Sprint has fully drawn on its $1 billion secured equipment credit facility. At the end of the second fiscal quarter, $635 million was outstanding after a $127 million principal repayment was made during the quarter. Sprint added to their liquidity in May 2014 with a new $1.3 billion securitization facility that matures May 2016. At quarter end, Sprint had not sold any receivables to the conduit and had $1.1 billion available under the facility. The company is in the process of expanding the receivable securitization to include installment billing and lease receivables. Sprint also expects to use additional vendor financing for its 2.5 GHz network build. Fitch believes Sprint will maintain about $2 billion of cash for adequate liquidity. Sprint's upcoming maturities are $754 million in 2015 and become sizeable in 2016 and 2017 at $2.6 billion and $3.1 billion respectively. Sprint's LTM free cash flow deficit was $4.6 billion. Previous rating expectations had considered 2015 as an inflection point where on a run rate basis, the FCF deficit would reach breakeven. However, even with the expected decrease in capital spending driven by Softbank synergies and the steps taken to increase liquidity, Fitch now expects a material funding gap exists with Sprint's capital allocation plans for at least 2015 and 2016. Fitch anticipates 2015 FCF deficit to likely exceed 2014 levels due primarily to the effects of postpaid subscriber losses, cash capital expenditure timing, equipment installment billing program and various competitive effects. Leverage, Financial Covenants & Guarantees Sprint's weak financial performance will begin pressuring leverage metrics as leverage (Debt to EBITDA) was 5x at end of the second fiscal quarter 2015, a decline from approximately 6x at the end of 2013. Fitch now expects leverage will increase to the upper end of the 5x range by the end of 2015. FFO adjusted leverage, which better reflects the working capital usage related to the equipment installment billing program, is expected to increase to the mid 6x range for 2015. Fitch also estimates FFO margin will be in the low double digit range. The FFO leverage and profitability ratios are weak for a 'b' category financial risk profile. In October 2014, Sprint amended the covenants in their revolving bank credit facility to modify, among other things, the leverage ratio (total indebtedness to adjusted EBITDA as defined by the credit facility) not to exceed 6.5x through the quarter ended Dec. 31, 2015 and 6.25x through December 2016. Previously the leverage ratio covenant was 6x through December 2014, 5.5x through June 2015, thereby reducing by .25x every quarter until 4x on December 2016. Sprint is also in the process of amending agreements with lenders for both the export development Canada facility and secured equipment credit facility on similar terms as the revolving bank credit facility. The unsecured credit facilities at Sprint benefit from upstream unsecured guarantees from all material subsidiaries. The credit agreement allows carve-outs for indebtedness composed of unsecured guarantees that are expressly subordinated to the credit facility. The unsecured junior guaranteed debt is senior to the unsecured notes at Sprint Communications Inc. and Sprint Capital Corporation. The unsecured senior notes at these entities are not supported by an upstream guarantee from the operating subsidiaries. The $1 billion vendor financing facility is jointly and severally borrowed by all of the Sprint subsidiaries that guarantee the Sprint credit facility, Export Development Canada loan and junior guaranteed notes. The facility additionally benefits from a parent guarantee and first priority lien on certain network equipment. This places the vendor facility structurally ahead of the unsecured notes. The Clearwire notes benefit from a full and unconditional guarantee by the Issuers' wholly-owned direct and indirect domestic subsidiaries that own the spectrum assets. In addition, Sprint Corporation and Sprint Communications Inc. provide a unconditional guarantee to the 2040 exchangeable notes. RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Sustained gross addition share in mid-teen range with improved mix of prime subscribers; -- Sustained improvement in churn by at least 25 basis points; -- Positive net postpaid additions with sustained improvement in net porting ratios; -- Sprint meeting or exceeding expected reduction in cost structure of $1.5 billion; -- Improvement in network operating performance that materially closes the gap versus national peers; -- The improved operating trends above drive financial results that mostly exceed Fitch's current expectations for revenue, EBITDA, FFO, CFO, FCF and leverage. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Lack of expected improvement in the operating metrics for gross addition share, churn, net postpaid additions, prime subscriber mix, net porting ratios and network operating performance that further degrades financial profile. Fitch would become more concerned with Sprint's ability to effectively compete in the marketplace if the company does not demonstrate and sustain material improvement in these core metrics during 2015; -- Changes in the level or the expectations for support from Softbank that materially affects the operating and financial profile of Sprint. If Sprint began selling core assets including spectrum as opposed to bolstering capital structure to address liquidity issues, Fitch would become concerned with Softbank providing further tangible support. Fitch has affirmed these ratings of Sprint Corporation and its subsidiaries as: Sprint Corporation; -- IDR at 'B+'; -- Senior unsecured notes at 'B+/RR4'. Sprint Communications Inc.; -- IDR at 'B+'; -- Unsecured credit facility at 'BB/RR2'; -- Junior guaranteed unsecured notes at 'BB/RR2'; -- Senior unsecured notes at 'B+/RR4'. Sprint Capital Corporation; -- Senior unsecured notes at 'B+/RR4'. Clearwire Communications LLC -- IDR 'B+'; -- Senior unsecured notes 'BB+/RR1'; -- First priority senior secured notes 'BB+/RR1'. TOMAHAWK OIL: Case Summary & 2 Unsecured Creditors -------------------------------------------------- Debtor filing two bankruptcy petitions: Debtor Case No. ------ -------- Tomahawk Oil and Gas Marketing LLC 14-15055 dba Tomahawk Gathering LLC 9120 N Kelley Ave #101 Oklahoma City, OK 73131 Tomahawk Oil and Gas Marketing LLC 14-15056 dba Tomahawk Gathering LLC 9120 N Kelley Ave #101 Oklahoma City, OK 73131 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Hon. Sarah A. Hall Debtor's Counsel: Chuck Moss, Esq. 500 N. Meridian, #300 Oklahoma City, OK 73107 Tel: (405) 949-5544 Email: chuck@mossbankruptcy.com Total Total Assets Liabilities ---------- ----------- Case No. 14-15055 $5,700 $1.23MM Case No. 14-15056 $5,700 $1.23MM The petition was signed by Benjamin Dillard, owner-director of operations. List of Debtor's two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A & A Tank Truck Co Service $38,000 Superior Pipeline Co LLC Oil Products $1,200,00 Ellen Adams, Atty GableGotWals 211 N Robinson, 15th Floor Oklahoma City, OK 73102 Copies of the petitions are available for free at: http://bankrupt.com/misc/okwb14-15055.pdf http://bankrupt.com/misc/okwb14-15056.pdf TRANSLOADING SERVICES: Case Summary & 13 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Transloading Services, Inc. 8713 Highway 161 North Little Rock, AR 72117 Case No.: 14-16533 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Eastern District of Arkansas (Little Rock) Debtor's Counsel: Frederick S. Wetzel, III, Esq. FREDERICK S. WETZEL, III, P.A. 200 North State Street, Ste. 200 Little Rock, AR 72201 Tel: (501) 663-0535 Email: frederickwetzel@sbcglobal.net jbmoore@fswetzellaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by William G. Thompson, president. A list of the Debtor's 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/areb-14-16533.pdf TREETOPS ACQUISITION: Gen. Manager Positive About Reorganization ---------------------------------------------------------------- John Strege at Golf Digest reports that Treetops Resort general manager Barry Owens remains positive about the Company's Chapter 11 bankruptcy. ?When you hear that someone has gone through a reorganization through Chapter 11 you usually think a bank is involved. There is no bank involved,? Golf Digest quoted Mr. Owens as saying. Citing Mr. Owens, Golf Digest relates that during the period through 2010, the Company operated at a negative cash flow, necessitating the group of men who bought the Company in 2002 ?to continue to make contributions that added up to north of $25 million in mortgages. These mortgages haven't had any payments on them in 10 years, so the property has been unable to support that volume of debt. Basically they're bankrupting themselves . . . . I'll call it legacy debt. When they first started here, our owners were frustrated with their investment. We're fortunate that they're all well off enough to keep it afloat through challenging times. Back in 2010, they were at wit's end. But since the start of 2011, they haven't had to put anything in and they're excited about that. Now they see the potential. Golf Digest quoted Mr. Owens as saying, ?This is going to position us to make improvements, to add amenities, to start a real estate program. We don't use the B word. We use reorganization, and we're real excited about it. It's a way to convert debt to equity.? Headquartered in Gaylord, Michigan, Treetops Acquisition Company, LLC -- dba Treetops Land Company, LLC; Treetops Enterprises, LLC; Treetops; Treetops South Village Property Management; Association, INc.; Treetops Sylvan Resort; Treetops Jones Estates Property Owners Association, Inc.; Treetops Resort; Treetops Holding Company; Treetops Realty, Inc.; Treetops Land Development Company, LLC; Treetops Tradition Condominium Association, Inc.; Treetops North Estates Condominium Association, Inc.; and Sylvan Resort -- owns Treetops Resort and Spa, a northern Michigan golf and ski destination, and features prominent auto industry investors. Treetops Acquisition filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 14-22602) on Nov. 25, 2014, estimating its assets at $1 million to $10 million and its liabilities at $10 million to $50 million. The petition was signed by Richard B. Owens, general manager. Jason W. Bank, Esq., at Kerr, Russell And Weber, PLC, serves as the Debtor's bankruptcy counsel. TRI-COUNTY COMMUNITY: Case Summary & 2 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Tri-County Community Development Corporation, Inc. 13150 Memorial Highway Miami, FL 33161 Case No.: 14-36988 Chapter 11 Petition Date: December 10, 2014 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Hon. Jay Cristol Debtor's Counsel: Joel M. Aresty, Esq. JOEL M. ARESTY P.A. 309 1st Ave S Tierra Verde, FL 33715 Tel: 305.899.9876 Fax: 305.723.7893 Email: aresty@mac.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Nelson Bell, president. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb14-36988.pdf TRUMP ENTERTAINMENT: Gaming Partners Settle as Ch. 7 Hearing Looms ------------------------------------------------------------------ Law360 reported that Trump Entertainment Resorts Inc. has notched settlements with two former online gaming partners, one of which resolves a $9.6 million bankruptcy claim, ahead of a critical hearing to determine if the casino operator should liquidate instead of continuing in Chapter 11, according to court filings. Law360 further reported that the settlements with Betfair Interactive US LLC and Fertitta Acquisitions Co. LLC, two of Trump's former online gambling partners, can only be a positive for the company, which is scrambling to find a way to keep its last open casino operating. 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. The U.S. Trustee for Region 3 on Sept. 23 appointed seven creditors of Trump Entertainment Resorts, Inc., to serve on the official committee of unsecured creditors. The Committee tapped Gibbons P.C. as its co-counsel, the Law Office of Nathan A. Schultz, P.C., as co-counsel, and PricewaterhouseCoopers LLP as its financial advisor. TRUMP ENTERTAINMENT: Delays Potential Taj Closing ------------------------------------------------- Sherri Toub, a bankruptcy columnist for Bloomberg News, reported that Trump Entertainment Resorts Inc. said that it's working "around-the-clock" to achieve the necessary commitments and resolutions to keep Atlantic City, New Jersey's Taj Mahal casino open and to confirm a reorganization plan. According to the report, Trump Entertainment said the 2,000-room Taj Mahal casino will, at a minimum, remain open until Dec. 19 "or shortly thereafter." The Taj Mahal will no longer close on Dec. 12 as previously anticipated, the casino operator said in a Dec. 5 court filing, the report related. 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. The U.S. Trustee for Region 3 on Sept. 23 appointed seven creditors of Trump Entertainment Resorts, Inc., to serve on the official committee of unsecured creditors. The Committee tapped Gibbons P.C. as its co-counsel, the Law Office of Nathan A. Schultz, P.C., as co-counsel, and PricewaterhouseCoopers LLP as its financial advisor. VISION INDUSTRIES: Chapter 11 Case Converted to Chapter 7 --------------------------------------------------------- Pursuant to an order of the U.S. Bankruptcy Court for the Central District of California, the Chapter 11 bankruptcy proceedings of Vision Industries Corp. was converted to a case under Chapter 7 of the United States Bankruptcy Code effective Dec. 3, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. Pursuant to the Conversion Order, the Company is required to turn over to the designated Chapter 7 Trustee all records and property of the estate under the Company's custody and control, in accordance with the Federal Rules of Bankruptcy Procedure. As of the effective date of the conversion, the Company had limited assets and no cash in the bank. All assets of the Company will be transferred to the Chapter 7 trustee, to be used to provide for the wind-down and liquidation of the Company's estate. The Company has been advised that David A. Gill has been appointed Interim Chapter 7 Trustee. On Dec. 4, 2014, Scott Lambert and Brett Mayer each tendered their respective resignation as a member of the Company's Board of Directors. The Company's Chairman of the Board, Martin Schuermann, tendered his resignation as a member of the Company's Board of Directors. Jerome Torresyap tendered his resignation as the Company's president and chief operating officer. On Dec. 4, 2014, Martin Schuermann tendered his resignation as the Company's Interim CFO, treasurer, and secretary. Mr. Schuermann also tendered his resignation as the Company's chief executive officer for all purposes other than to render reasonable assistance to the Chapter 7 Trustee as may be reasonably required under the Conversion Order. They all resigned due to the Conversion Order and the appointment of a Chapter 7 Trustee which effectively eliminates their powers previously held on behalf of the Company. About Vision Industries Long Beach, Cal.-based Vision Industries Corp. focuses its efforts in building Class 8 fuel cell electric vehicles (FCEV) used in drayage transportation. Vision Industries Corp. filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 14-28225) on Sept. 24, 2014. The petition was signed by Jerome Torresyap as president/COO. The Debtor disclosed total assets of $1.34 million and total liabilities of $3.18 million. Marshack Hays LLP serves as the Debtor's counsel. The case is assigned to Judge Robert N. Kwan. WET SEAL: Q3 Results at Low End of Expectations ----------------------------------------------- The Wet Seal, Inc., a specialty retailer to young women, announced financial results for its fiscal third quarter ended November 1, 2014. The Wet Seal Inc. results for all periods reflect the former Arden B. business presented as a discontinued operation. Ed Thomas, Chief Executive Officer, stated, "While our results came in at the low end of our expectations during the third quarter, we continue to take important steps in our efforts to address our financial position and our ongoing challenges. A key priority is to address our immediate liquidity needs in the very near term in order for us to have the time and resources to be able to implement our operating strategies. Our operating priorities include repositioning the merchandise assortment with a greater emphasis on fashion product and developing a marketing program with stronger aspirational messaging designed to recapture our target customer. We are also focused on driving growth in our e-commerce business as we continue to see opportunities in this channel. As we work to implement these strategies, we intend to prudently manage cash, take a disciplined approach to inventory management and continue to look for opportunities to reduce costs." Third Quarter Fiscal 2014: Net sales totaled $104.3 million versus net sales of $114.9 million in the third quarter of 2013. Consolidated comparable store sales declined 14.5%. Gross profit totaled $14.3 million as compared to $27.4 million a year ago, while gross margin declined to 13.7% versus 23.8% in the third quarter of 2013. The year-over-year decrease in gross margin was due to lower merchandise margins as well as higher occupancy costs as a percentage of sales driven by sales de- leverage from lower average store sales. Operating loss was $36.3 million compared to operating loss of $12.4 million in the third quarter of fiscal 2013. The current year and prior year quarters include $12.6 million and $4.8 million, respectively, of non-cash asset impairment charges. Operating loss for the third quarter of fiscal 2014 also includes $1.5 million in severance costs. Non-GAAP adjusted operating loss, excluding the effect of these charges, was $22.2 million in the third quarter of fiscal 2014 compared to Non-GAAP adjusted operating loss of $7.6 million in the prior year period. Net loss totaled $36.0 million, or $0.43 per diluted share, compared to net loss of $12.5 million, or $0.15 per diluted share, in the prior year quarter. Non-GAAP adjusted net loss in the third quarter of fiscal 2014 was $23.6 million, or $0.28 per diluted share, excluding $12.6 million in non-cash asset impairment charges, $1.5 million in severance costs, and $1.7 million for a gain on warrants and embedded derivatives liabilities. Non-GAAP adjusted net loss in the third quarter of fiscal 2013, excluding the after-tax effect of asset impairment charges, was $7.7 million, or $0.09 per diluted share. Balance Sheet As of November 1, 2014, the Company had cash and cash equivalents of $19.1 million and $21.3 million in convertible debt, net of discount. Inventory decreased 26% to $31.6 million compared to $42.6 million a year ago. Inventory per square foot declined 26% compared with the same quarter last year. Real Estate During the third quarter of fiscal 2014, the Company opened one and closed two Wet Seal stores. As of November 1, 2014, the Company operated 528 stores in 47 states and Puerto Rico and expects that approximately 60 of those stores will be closed by the end of the fourth quarter as their lease terms expire. The Wet Seal, Inc. -- http://www.wetsealinc.com/-- is a specialty retailer of fashionable and contemporary apparel and accessory items. The Company was incorporated in Delaware and is headquartered in Foothill Ranch, California. WET SEAL: Warns of Potential Bankruptcy Filing ---------------------------------------------- Lauren Pollock, writing for The Wall Street Journal, reported that Wet Seal Inc. warned it may file for bankruptcy protection if the teen apparel retailer is unsuccessful in the very near term in addressing its immediate liquidity needs. According to the report, the retailer, which makes apparel and accessories for teen girls, had previously engaged Houlihan Lokey and FTI Consulting to help it explore financing alternatives. The Wet Seal, Inc. -- http://www.wetsealinc.com/-- is a specialty retailer of fashionable and contemporary apparel and accessory items. The Company was incorporated in Delaware and is headquartered in Foothill Ranch, California. YESHIVA UNIVERSITY: Moody's Affirms B3 Rating on $314.5MM Bonds --------------------------------------------------------------- Moody's affirms Yeshiva University's (NY) B3 rating on $314.5 million of revenue bonds issued through the Dormitory Authority of the State of New York. The outlook is negative. Summary Rating Rationale The B3 rating reflects Moody's expectation of full-recovery for rated bondholders in the event of default from Yeshiva's valuable real estate holdings in New York, despite subordination to $241.5 million of debt secured by mortgages (as of December 1, 2014) and ongoing severe operating deficits. Healthy investment returns, the release of donor restricted gifts to support operations, and potential to monetize additional properties provide Yeshiva with sufficient headroom to operate over the next one to two years. The negative outlook incorporates the possibility that Yeshiva could exhaust unrestricted liquidity before successfully addressing its deep operating deficits. The termination of a Memorandum of Understanding with Montefiore Medical Center for the operation of the university's medical school highlights that the university's operating challenges will be extended, despite recently implemented efficiency initiatives. Challenges * Extremely thin and deteriorating unrestricted liquidity poses the highest risk to the university's viability. As of fiscal yearend (FYE) 2014, unrestricted cash and investments that could be liquidated within one month covered 90 days of expenses, with liquidity bolstered by $125 million of draws on operating lines. In FY 2015, Yeshiva refinanced the operating lines with a $175 million ten-year private placement. * Severe operating deficits, after incorporating large releases of temporarily restricted net assets, have contributed to the erosion of Yeshiva's unrestricted liquidity. Both the school of medicine and the university's core academic programs are facing severe financial challenges. * Additional subordination of bondholder's position arises from a recently completed $175 million private placement with 150% collateralization from mortgages on certain parcels of campus real estate. An additional $66.5 million of existing debt is also secured by mortgages. * Given the severity of deficits and limited liquidity, the university may exhaust liquidity before completing a restructuring of the organization. * Termination of the Memorandum of Understanding with Montefiore Medical Center contributes to uncertainty over the operation of the medical school. Since Yeshiva delayed implementing significant expense reductions at the medical school (responsible for two-thirds of the deficit) during the six months of negotiations, acute losses have continued. Strengths * Significant real estate holdings in Manhattan and the Bronx would provide for a full recovery for bondholders. In FY 2014, Yeshiva monetized parts of its real estate holdings to generate liquidity. * Yeshiva's unique role as a comprehensive university operated under Jewish auspices has contributed to strong philanthropic support. Yeshiva continues to attract strong gifts per student, averaging $21,032 between FY 2012-2014. * A large base of temporarily and permanently restricted wealth, totaling $1 billion, enabled Yeshiva to utilize gifts and investment income to support operations. This may provide additional operating flexibility, although it is uncertain to what extent. * Greatly improved financial monitoring and reporting, through investments in infrastructure and personnel, provide heightened transparency to key stakeholders to inform strategic decisions. Outlook The negative outlook reflects the risk of liquidity depletion before management is able to execute a turnaround plan. What Could Change The Rating UP An upgrade or stable outlook is unlikely in the near-term given the magnitude of financial challenges faced by the university. Upward rating pressure could result from a substantial improvement in unrestricted liquidity through the monetization of real estate or sizeable gifts combined with execution of a fiscally sustainable business plan, without damaging the university's market position. What Could Change The Rating DOWN A default or debt restructuring deemed by Moody's to be a distressed exchange would lead to a downgrade. Failure to improve unrestricted liquidity and narrow operating deficits without extraordinary releases or loss of accreditation could also lead to further rating pressure. Rating Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. * 11 Hospitals Filed for Bankruptcy in 2014, Says Becker's ---------------------------------------------------------- Kelly Gooch at Becker's Hospital Review reports 11 healthcare industry bankruptcies for this year. Beckershopitalreview.com relates that the filers include: 1. C.W. Williams Community Health Center; 2. Hutcheson Medical Center; 3. Monroe Hospital; 4. Specialty Hospitals of America; 5. Nicholas County Hospital; 6. Palm Drive Hospital; 7. Northern Berkshire Healthcare; 8. Natchez (Miss.) Regional Medical Center; 9. Long Beach (N.Y.) Medical Center; 10. Gilbert (Ariz.) Hospital; and 11. Casa Grande (Ariz.) Regional Medical Center. * Rep. Marino Tapped to Become New House Antitrust Chair -------------------------------------------------------- Law360 reported that Rep. Tom Marino, R-Pa., will take over the helm of the U.S. House of Representatives' antitrust and bankruptcy subcommittee in 2015 from retiring Chairman Rep. Spencer Bachus, R-Ala., the lawmaker announced. According to the report, Marino, a two-term congressman and U.S. attorney, was named incoming chairman of the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. The subcommittee has oversight of antitrust matters, commercial and administrative law, bankruptcy law and judgeships and state taxation that affects interstate commerce. * Fitch: U.S. High Yield Default Rate 1.5-2% in 2015 ---------------------------------------------------- The benign US high yield default environment is expected to continue into 2015 based on strong third quarter company financial data and minimal debt maturities over the next year, according to Fitch Ratings. Fitch's US high yield default rate forecast of 1.5%-2% is well below the 4.3% 34-year historic default average, but in line with the 1.9% median rate. Energy continues to be a closely watched sector as crude oil prices have fallen to five-year lows and nearly $77 billion of high yield debt is rated 'B-' or lower. Since the end of 2009, the amount of energy debt has risen by 155% and currently comprises 16% of the high yield universe. The trailing 12-month (TTM) high yield default rate ended November at 2.3%, its lowest level since April when Energy Future Holdings (EFH) filed for bankruptcy. Removing EFH, the TTM rate stood at 1.1%. In examining 240 companies rated 'BB' or 'B', Fitch observed that EBITDA grew 5.7% in the third quarter compared to the prior period and was up 13.6% versus one year earlier. Nearly 62% of the sample had better EBITDA numbers than one year prior. Leverage (total debt/EBITDA) declined for the third straight quarter to 3.83x, while interest coverage (EBITDA/interest expense) advanced for the sixth straight period to 4.65x. A low interest rate environment continues to enable high yield companies in pushing out pending maturities. Less than $28 billion is slated to mature in 2015, and just $2.5 billion of that total is from the 'CCC' and lower rated tier. The attractive near-term maturity profile picture and solid interest coverage levels provide cushion in the event of a sharper and more immediate interest rate increase relative to Fitch's current expectations. The high yield universe stands at $1.38 trillion as of the end of November, which is up 9% for 2014. New issuance threatens to top $300 billion for the third year in a row, likely a reflection of a favorable issuing environment as borrowing rates remain near historically low levels. Fitch's default projection includes the impending one for Caesars Entertainment Operating Co. (CEOC), which would add 90 basis points and push the trailing 12-month TTM US high yield default rate to 3.2%. In addition, the gaming, lodging and restaurants' TTM default rate would climb to 20.6% from 1.7%. Fitch continues to believe that a lengthy bankruptcy process is a more likely route for Caesars versus speculation of a pre-packaged deal, as Fitch considers the complexity of the company's capital structure, subjective nature of valuing CEOC and pending litigation. A few other sectors, including metals and mining, retail, services and miscellaneous, and energy possessing companies, could falter over the upcoming year. Still, some default candidates might resolve their issues before the end of 2014 with distressed debt exchanges. Fitch's U.S. High Yield Default Outlook report will be published later this month. * Fitch: Changes to Ch. 11 Could Pressure 1st Lien Recoveries ------------------------------------------------------------- Initial recommendations in The American Bankruptcy Institute's 'Commission to Study the Reform of Chapter 11's' final report could adversely alter recovery prospects of first lien debt claim holders, according to Fitch Ratings. The report, published on Dec. 8, 2014, following a two-year study, permits a larger debtor in possession (DIP) and transferring value to junior creditors; could influence the DIP market landscape, and would promote fewer full chain retail liquidations. The report also includes a wide range of recommended principles for changes to the U.S. bankruptcy code. One principle that would reduce first lien recovery prospects, if adopted, proposes allocating a 'redemption option value' to the creditor class that receives no recovery and immediately junior in seniority to a class of claims that receives a distribution under the plan of reorganization or from the asset sale proceeds. This is being mandated as long as there is at least one class that would not receive any recovery. The proposal is being made to compensate for reorganizations or asset sales that often occur at a cyclical trough points and business or economic improvement and anticipated within a reasonable amount of time. This allocation would change the existing rules of priority to incorporate a mechanism to determine whether distributions to stakeholders should be adjusted due to the possibility of material changes in the value of the firm. The 'redemption option value' is the value of a hypothetical option to purchase the entire firm with an exercise price equal to the redemption price and a duration equal to the redemption period. As a relevant proposed amendment, bankruptcy plans could be crammed down on a junior creditor if they are given the redemption option value but still reject the plan and on a senior class that rejects the plan solely based on the allocation of the value. Several of the recommended principles deal with DIP financing. One of the DIP related principles proposes to change the way a secured creditor's collateral is valued to determine the amount of adequate protection needed to protect the secured creditor's interest to 'foreclosure value' rather than going concern value when the court approves a DIP financing request. Foreclosure value means the net value that a secured creditor would realize in a hypothetical foreclosure sale of the collateral and would often be less than a going concern value. Distributions to claim holders on the plan of reorganization effective date would still be made based on the going concern value (if the company reorganized as a going concern), but the amount of administrative priority DIP claim paid ahead of the pre-petition secured creditors (and junior creditors) may be higher if a lower 'foreclosure value' was initially used to size the amount of adequate protection and there was a larger DIP loan. The principles include recommended prohibitions on the roll-up of pre-petition secured loans into DIP loans unless the pre-petition loans were paid in cash with the proceeds or there was significant amount of new money provided by the DIP. Another DIP related principle is a proposal to prohibit DIP credit agreements from including any borrower performance milestones. In addition, inter-creditor agreement provisions that prevent junior creditors from providing DIP facilities would be rendered ineffective if the senior lender's collateral would not be primed and senior lender is given a chance to provide a DIP on the same terms as offered by junior lender. The principles included a recommendation to increase the amount of time that a debtor has to decide to assume or reject a real estate lease to 365 days from 210 days. This change could potentially help a select number of retailers survive bankruptcy as the companies would have more time to work through lease negotiations and another holiday season to gauge performance. The retail sector has much more frequent liquidation outcomes compared with other U.S. corporate sectors. However, the more dominating factors today include a secular shift in sales from the company's core product lines (for example paper moving to digital in the office supply space) or other formats such as online and discount channels which has led to lower foot traffic. As a result the need or viability of a retail concept in the current low growth sales environment is a larger factor in driving a liquidation outcome. Fitch believes it is worth noting that the ABI Commission did not recommend any changes to the way enterprise valuations are done for bankruptcy plans. A fundamental enterprise valuation would be completed using existing methodologies. Furthermore, the ABI proposed a change would expose certain LBO transactions to the risk of preferential treatment and fraudulent conveyance. Effectively, the change would give junior lenders in a pre-LBO entity protection should the LBO transaction go awry within a short period of time. If the U.S. Congress chooses to make any of the proposed changes, then Fitch would consider if any would have a significant effect on recoveries that would require corresponding changes to the agency's recovery rating methodology. For issuers rated 'B+' and lower, Fitch completes distressed enterprise valuations in hypothetical default scenarios and distributes the proceeds to estimated claims to determine expected recovery rates for each class of creditors and other claims by relative seniority. Fitch believes that any changes to the code are uncertain and would take at least a couple of years. Fitch will continue to follow developments. * BOOK REVIEW: Macy's for Sale ------------------------------ Author: Isadore Barmash Paperback: 180 pages List price: $34.95 Review by Henry Berry Order your personal copy today at http://is.gd/as56m0 Isadore Barmash writes in his Prologue, "This book tells the story of Macy's managers and their leveraged buyout, the newest and most controversial device in the modern financial armament" when it took place in the 1980s. At the center of Barmash's story is Edward S. Finkelstein, Macy's chairman of the board and chief executive office. Sixty years old at the time, Finkelstein had worked for Macy's for thirty-five years. Looking back over his long career dedicated to the department store as he neared retirement, Finkelstein was dismayed when he realized that even with his generous stock options, he owned less than one percent of Macy's stock. In the years leading up to his unexpected, bold takeover, Finkelstein had made over Macy's from a run-of-the-mill clothing retailer into a highly profitable business in the lead of the lucrative and growing fashion and "lifestyle" field. To aid him in accomplishing the takeover and share the rewards with him, Finkelstein had brought together more than three hundred of Macy's top executives. To gain his support for his planned takeover, Finkelstein told them, "The ones who have done the job at Macy's are the ones who ought to own Macy's." Opposing Finkelstein and his group were the Straus family who owned the lion's share of Macy's and employees and shareholders who had an emotional attachment to Macy's as it had been for generations, "Mother Macy's" as it was known. But the opponents were no match for Finkelstein's carefully laid plans and carefully cultivated alliances with the executives. At the 1985 meeting, the shareholders voted in favor of the takeover by roughly eighty percent, with less than two percent opposing it. The takeover is dealt with largely in the opening chapter. For the most part, Barmash follows the decision making by Finkelstein, the reorganization of the national company with a number of branches, the activities of key individuals besides Finkelstein, Macy's moves in the competitive field of clothing retailing, and attempts by the new Macy's owners led by Finkelstein to build on their successful takeover by making other acquisitions. Barmash allows at the beginning that it is an "unauthorized book, written without the cooperation of the buying group." But as he quickly adds, his coverage of Macy's as a business journalist and his independent research for over a year gave him enough knowledge to write a relevant and substantive book. The reader will have no doubt of this. Barmash's narrative, profiles of individuals, and analysis of events, intentions, and consequences ring true, and have not been contradicted by individuals he writes about, subsequent events, or exposure of material not public at the time the book was written. First published in 1989, the author places the Macy's buyout in the context of the business environment at the time: the aggressive, largely laissez-faire, Reagan era. Without being judgmental, the author describes how numerous corporations were awakened from their longtime inertia, while many individuals were feeling betrayed, losing jobs, and facing uncertain futures. Isadore Barmash, a veteran business journalist and author, was associated with the New York Times for more than a quarter-century as business-financial writer and editor. He also contributed many articles for national media, Reuters America, and the Nihon Kenzai Shimbun of Japan. He has published 13 books, including a novel and is listed in the 57th edition of Who's Who in America. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***