/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150109.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, January 9, 2015, Vol. 19, No. 9 Headlines 1 SWD INCORPORATED: Case Summary & 4 Largest Unsecured Creditors ACTIVECARE INC: Sells CareServices-Related Contracts & Equipment ALEXANDRA TRUST: Bailey Wants Court to Name Chapter 11 Trustee ALSIP ACQUISITION: Files Schedules of Assets and Liabilities AMERICAN BANCORP: Deerwood Bank to Acquire American Bank for $17MM AMERICAN MEDIA: Continues Its Multi-Step Debt Reduction Strategy AMERICAN MEDIA: Moody's Rates $2.2MM Senior 2nd Lien Notes 'Caa3' AMERICAN PATRIOT: Banks Signs New $55,000 SPA with CFSI AMSTERDAM HOUSE: Judge Closes Chapter 11 Bankruptcy Case ANACOR PHARMACEUTICALS: Eagle Mgt. Holds 5.4% Stake as of Dec. 31 ARUBA INVESTMENTS: Moody's Assigns B2 Corporate Family Rating ARUBA INVESTMENTS: S&P Assigns 'B' CCR; Outlook Stable ASSOCIATED WHOLESALERS: Seeks Until April 7 to File Plan AUBURN TRACE: Case Summary & 20 Largest Unsecured Creditors AURBEC MINES: Declared Bankrupt Under Canada's BIA Act AUTOMATED BUSINESS: Plan Outline Hearing Continued Until Jan. 13 AYN WARDO: Case Summary & 8 Largest Unsecured Creditors AZIZ CONVENIENCE: Has Until March 2 to File Plan of Reorganization BANCO SANTOS: Fla. Judge OKs $8MM Deal with Espirito Santo Bank BARNES & NOBLE: Might File for Ch 11 Bankruptcy, Report Says BAY AREA FINANCIAL: Court Issues Final Decree Closing Bankr. Case BEAR CREEK: Case Summary & 20 Largest Unsecured Creditors BODY CENTRAL: Gets Default Notice, Exploring Alternatives BR FESTIVALS: $500K Transfer to Uptown Was Fraudulent, Court Says BROCADE COMMUNICATIONS: Moody's Rates New Convertible Notes Ba2 BROCADE COMMUNICATIONS: S&P Rates New $500MM Unsecured Notes 'BB+' BROOKE CAPITAL: 10th Circuit Reverses Decision in Citizens Suit BRUGNARA PROPERTIES IV: Ch. 11 Case Transferred to Judge Montali CAESARS ENTERTAINMENT: Gets More Support with Sale by Blackrock CAESARS ENTERTAINMENT: ISDA Takes Default Query to Expert Panel CALIBRE ACADEMY: Fitch Affirms 'B' Rating on $16.1MM Revenue Bonds CHESTERFIELD VALLEY: Fitch Raises Rating on $13.21MM Bonds to BB+ COX & SCHEPP: Court Nixes Summary Judgment Bids in Suit vs. Palmer DATAPIPE INC: S&P Retains 'B' Rating on Proposed $23MM Debt Add-On DAVID DRUMM: Ex-Anglo Irish Banker Can't Ditch $11MM in Debt DEB STORES: Files Schedules of Assets and Liabilities DETROIT, MI: Board Votes to Send State Money to Pension Funds DUNE ENERGY: Obtains Forbearance Extension From Lenders EDUCATION MANAGEMENT: Moody's Lowers Default Rating to D-PD EGENIX INC: Files for Chapter 11 Bankruptcy Protection EMPIRE RESORTS: Commences $50 Million Rights Offering ENDEAVOUR INT'L: Noteholders File Precautionary Motion re RSA EXIDE TECH: Enters Into Backstop Agreement With Noteholders EXIDE TECHNOLOGIES: Panel, U.S. Trustee Object to Disclosures FEDERAL RESOURCES: Seeks Joint Administration of Cases FIRED UP: Wins Confirmation of Reorganization Plan FIRST MARINER: Dennis Finnegan Joins Howard Bank as Vice President FOUR OAKS: 2 Directors Tender Mandatory Resignation FREEDOM INDUSTRIES: FBI Says Co. Knew of Containment Problems GBG RANCH: Dismissal Bid Dropped; Debtor Required to File Plan GLOBAL COMPUTER: Committee Can File Liquidating Plan GRIDWAY ENERGY: Asks Court to Extend Deadline to Remove Suits GRIDWAY ENERGY: Seeks April 6 Extension of Plan Filing Date GT ADVANCED: Jan. 26 Hearing to Form Equity Security Committee Set INTERLEUKIN GENETICS: Bay City Holds 41.5% Stake as of Dec. 31 IPC CORP: Moody's Assigns B3 CFR & Rates Sr. 2nd Lien Debt Caa2 IPC CORP: S&P Assigns 'B' CCR & Rates $580MM 1st Lien Debt 'B' IRENE SCHWARTZ-TALLARD: Rehearing on Stay Violation Damages Ruling ITUS CORPORATION: Settles Optronics Lawsuit for $9 Million J & B RESTAURANT: Files Voluntary Chapter 11 Bankruptcy Petition J&B RESTAURANT: Files for Bankruptcy Protection LAKELAND INDUSTRIES: To Sell New York Headquarter for $517,500 LANTHEUS MEDICAL: Supply Agreements with Cardinal Health Expires LIME ENERGY: Bison Reports 30.4% Stake as of Dec. 23 LONGVIEW POWER: Seeks Feb. 28 Extension of Plan Filing Date LONGVIEW POWER: Settles Disputes With Contractors, Insurer LOUISVILLE ARENA: S&P Affirms 'BB' ICR on Three Bond Issues MA SALAZAR: Court Refuses to Award Sanctions Against The Village MF GLOBAL: Financial Institutions Settle Suit MILLER AUTO PARTS: Gets Approval to Sell Stihl Brand Inventory MURRAY ENERGY: S&P Raises Corp Credit Rating to 'B+' NEIGHBORHOOD HEALTH: Case Summary & 20 Top Unsecured Creditors NEOGENIX ONCOLOGY: Nixon Peabody, Mintz Levin Blitz Legal Mal Suit NEW CENTURY: Morgan Stanley Had Heavy Influence Into Practices NITRO PETROLEUM: Reports $293K Net Loss in Quarter Ending Oct. 31 ORANGE COUNTY HOUSING: S&P Alters Outlook to Stable OVERLAND PARK: Fitch Affirms 'BB' Rating on $62.68MM Revenue Bonds PALM BEACH: Gets Approval to Sell Undeveloped Land to PNC Bank PASSAIC HEALTHCARE: Has Interim Authority to Use Cash Collateral PASSAIC HEALTHCARE: Section 341(a) Meeting Scheduled for Feb. 19 PENNSYLVANIA ECONOMIC: Moody's Hikes Revenue Bonds Rating to B3 PEOPLE'S COMMUNITY: Case Summary & 20 Largest Unsecured Creditors PORT AGGREGATES: Can't File Schedules Until January 30 PORT AGGREGATES: Shareholders Want Chapter 11 Case Dismissed PRESIDIO INC: S&P Cuts Corp Credit Rating to 'B' on Apollo Buy-out QUANTUM FOODS: Gets Approval to Settle Avoidance Claims REICHHOLD HOLDINGS: Has Until June 29 to Remove Lawsuits REVEL AC: ACR Energy Objects to Bid to Cut Power Deal RITE AID: Files Form 10-Q; Posts $104.8-Mil. Net Income in Q3 RUFFIN ROAD: Case Summary & 6 Largest Unsecured Creditors RUSSELL HOSPITAL: S&P Lowers Series 2006A Bonds Rating to 'BB-' SAN BERNARDINO, CA: Luxembourg Bank Sues for Payment on Bonds SHADOW STONE: Case Summary & Unsecured Creditor SIGA TECHNOLOGIES: Could Face $190MM Hit in Smallpox Drug Dispute SIGA TECHNOLOGIES: Del. Court Issues Opinion in PharmAthene Suit SOLAR POWER: Issues $20 Million Common Shares to Home Value SPECIALTY PRODUCTS: RPM Earns $69.8 Mil. in Fiscal Second Qtr. STEREOTAXIS INC: Obtains FDA Clearance to Sell Vdrive STOCKTON, CA: Issuers Risk Higher Costs with City STONEWALL GAS: S&P Assigns 'B-' CCR & Rates $350MM Sr. Loan 'B' SUN BANCORP: Amends 1.1 Million Common Shares Resale Prospectus SWEISS PETROL: Case Summary & 20 Largest Unsecured Creditors SYLVA CORP: Court Writes Checklist for Disputed Equipment Leases T-L CHEROKEE: Judge Approves Valley View Loan Agreement TARGETED MEDICAL: President Dave Silver Quits as No Deal Reached TIFFANI HILL: NWC Violated Automatic Stay, Montana Judge Says TIGER AXLES: Court Confirms Reorganization Plan TITAN ENERGY: Cancels Common Stock Registration TRUMP ENTERTAINMENT: Levine Gets $1.25MM Lien Past Icahn Entities U.S. ESTATES: Case Summary & 2 Largest Unsecured Creditors UNITED CONTINENTAL: 13 Senior FAs File Whistleblower Suit UNIVERSAL CORP: Fitch Assigns 'BB' Preferred Stock Rating US COAL: Can File Chapter 11 Plan Until March 4 VERSO PAPER: Completes $1.4-Bil. Acquisition of NewPage VISCOUNT SYSTEMS: Issues 21.489 Series A Convertible Pref. Stock VYCOR MEDICAL: Fountainhead Reports 50% Stake as of Dec. 31 WASHINGTON MUTUAL: WMI Raises Close to $600MM to Pursue Buys WEST CORP: Names Jan Madsen as New Chief Financial Officer WET SEAL: Hires Klee Tuchin as Restructuring Lawyers WET SEAL: To Close 66% of Stores to Avert Bankruptcy WOODLAKE RESORT: Dam Unsafe, Must Lower Level of Lake by 3 Feet [*] BOOK REVIEW: Competitive Strategy for Health Care Organizations [*] UBS Whistle-Blower Birkenfeld Seeks Permit to Move to Europe ********* 1 SWD INCORPORATED: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 1 SWD, Incorporated 845 East State Hwy 88, Ste 323 Jackson, CA 95642 Case No.: 14-32499 Chapter 11 Petition Date: December 30, 2014 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Hon. Christopher D. Jaime Debtor's Counsel: Scott J. Sagaria, Esq. SAGARIA LAW, P.C. 2033 Gateway Place, Floor 5 San Jose, CA 95110 Tel: 408-279-2288 Email: SagariaBK@SagariaLaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by John Eldon Kinne, president. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/caeb14-32499.pdf ACTIVECARE INC: Sells CareServices-Related Contracts & Equipment ---------------------------------------------------------------- ActiveCare, Inc., sold the majority of customer contracts and equipment leased to customers associated with its CareServices segment. The customer contracts were recorded as intangible assets on the Company's balance sheet and were being amortized over their 3-year estimated useful lives. The equipment leased to customers was recorded as property and equipment on the Company's balance sheet and was being amortized over its 3-year estimated useful life. According to a regulatory filing with the U.S. Securities and Exchange Commission, the assets were sold to an unrelated third party, Security Systems, Inc., pursuant to a written Agreement for Purchase and Sale of Monitoring Accounts. Additional equipment in stock was sold to the Buyer pursuant to a written sales invoice. The purchase price included a cash payment of $412,280 under the Purchase Agreement for the customer contracts. The equipment in stock was sold for $66,458 under the sales invoice. There is no significant gain or loss to be recorded related to the sale of these assets in the Company's fiscal first quarter 2015 as the assets were sold for approximately their net book value. As a result of this transaction, the CareServices Segment is reported as discontinued operations. About ActiveCare South West Valley City, Utah-based ActiveCare, Inc., is organized into three business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The CareServices segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. The Chronic Illness Monitoring segment is primarily engaged in the monitoring of diabetic patients on a real time basis. The Company's business plan is to develop and market products for monitoring the health of and providing assistance to mobile and homebound seniors and the chronically ill, including those who may require a personal assistant to check on them during the day to ensure their safety and well being. ActiveCare incurred a net loss attributable to common stockholders of $25.95 million the year ended Sept. 30, 2013, as compared with a net loss attributable to common stockholders of $12.42 million for the year ended Sept. 30, 2012. As of June 30, 2014, the Company had $9.49 million in total assets, $10.96 million in total liabilities and a $1.46 million total stockholders' deficit. Tanner LLC, in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has incurred recurring losses, has negative cash flows from operating activities, has negative working capital, and has negative total equity. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. ALEXANDRA TRUST: Bailey Wants Court to Name Chapter 11 Trustee -------------------------------------------------------------- Don Bailey, a scheduled creditor and party-in-interest in the Chapter 11 case of Alexandra Trust, asks the Hon. Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas to appoint a Chapter 11 trustee to oversee the Debtor's case. According to Mr. Bailey, the Debtor is not really a business to be reorganized. Its assets, other than a debt-free residential property, are claimed interests in 22 entities plus seven potential lawsuits which the Debtor apparently intends to file in its name to resolve, among other issues, ownership of several of those entities. The Debtor, sometimes acting in its own name and sometimes by one or another wholly owned subsidiary, has a broad and deep litigation history involving its ownership claims for those entities. This proclivity for litigation is vividly demonstrated by the Debtor's recent filing of an adversary proceeding which in part asserts in the Debtor's name certain claims which the Debtor previously conveyed to other entities, Mr. Bailey notes. Mr. Bailey points out, with scheduled assets, excluding would-be lawsuit winnings, far in excess of scheduled liabilities, the Debtor nonetheless has already launched its "reorganization-by- litigation" strategy. Yet, schedule B indicates ownership interests in numerous, litigation-free entities. These assets need to be located and evaluated, he says. Hotly contested lawsuits are not the best first step in this reorganization. A trustee is needed to evaluate the Debtor's assets and liabilities, and determine how to craft a plan that fulfills the Bankruptcy Code's reorganization purposes. The Debtor is woefully unqualified for that task, he adds. Mr. Bailey retained as counsel: Richard B. Schiro, Esq. Greg E. Butts, Esq. LAW OFFICES OF RICHARD B. SCHIRO 2706 Fairmount Street Dallas, TX 75201 Tel: (214) 521-4994 Fax: (214) 521-3838 Email: rbschiro@schirolaw.com gebutts@schirolaw.com A full-text copy of Mr. Bailey's request is available for free at http://is.gd/vniZWx About Alexandra Trust Garland, Texas-based Alexandra Trust sought protection under Chapter 11 of the Bankruptcy Code on Oct. 20, 2014 (Bankr. N.D. Tex. Case No. 14-35049). The case is assigned to Judge Barbara J. Houser. The Debtor's counsel is Arthur I. Ungerman, Esq., in Dallas, Texas. The Debtor disclosed $861,299,210 in assets and $4,739,000 in liabilities as of the Chapter 11 filing. The petition was signed by Richard Dale Sterritt, Jr., trustee. ALSIP ACQUISITION: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Alsip Acquisition LLC and its debtor-affiliates filed with the Bankruptcy Court for the District of Delaware schedules of assets and liabilities, and statements of financial affairs. Alsip's schedules disclose: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,906,018 B. Personal Property C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,218,731 E. Creditors Holding Unsecured Priority Claims $668,645 F. Creditors Holding Unsecured Non-priority Claims $21,475,468 ----------- ----------- TOTAL $12,906,018 $34,362,844 A full-text copy of the amended schedules is available for free at http://is.gd/f78Bl3 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 Official Committee of Unsecured Creditors is represented by Maria Aprile Sawczuk, Esq., and Harold D. Israel, Esq., at Goldstein & McClintlock LLLP. AMERICAN BANCORP: Deerwood Bank to Acquire American Bank for $17MM ------------------------------------------------------------------ American Banker reports that a federal judge has picked Deerwood Bank's $17 million offer for American Bancorporation's American Bank of St. Paul over competing bids from Premier Banks and St. Paul-based University Financial Corp. at a bankruptcy auction. Katharine Grayson, writing for St. Paul Business Journal, recalls that American Bancorporation put the assets of American Bank on the auction block in December 2014. According to Business Journal, American Bank subsidiary AmeriNational Community Services Inc. was also auctioned off and won by investment firm OSP Group with a $15.2 million bid. About American Bancorporation Alesco Preferred Funding XV, Ltd., and two related entities filed an involuntary Chapter 11 bankruptcy petition for St. Paul, Minnesota-based American Bancorporation (Bankr. D. Minn. Case No. 14-31882) on May 1, 2014. The involuntary petition filed in St. Paul Minnesota indicates that the three alleged creditors are owed in excess of $48 million: Creditor Amount of Claim -------- --------------- Alesco Preferred Funding XV, Ltd. $27,374,356 Alesco Preferred Funding XVI, Ltd. $13,728,562 Alesco Preferred Funding II, Ltd. $7,000,000 plus interest The alleged creditors are represented by Jeffrey Klobucar, Esq., at Bassford Remele, PA. Judge Katherine A. Constantine handles the case. She has entered an order for relief, officially placing American Bancorporation in Chapter 11. Judge Kathleen H. Sanberg was originally assigned to the case but she disqualified herself in the case, according to her May 1, 2014 order of recusal. AMERICAN MEDIA: Continues Its Multi-Step Debt Reduction Strategy ---------------------------------------------------------------- American Media, Inc., entered into an exchange agreement with certain noteholders of the Company, who are also the majority equityholders of the Company, and certain subsidiaries of the Company as guarantors, in an effort to implement the next step in its multi-step debt reduction strategy. Pursuant to the Exchange Agreement, the Noteholders have agreed to exchange $32 million in aggregate principal amount of first lien notes due 2017 for approximately $39 million in aggregate principal amount of new second lien notes due 2020. In September 2014, AMI completed the first step of its debt reduction strategy with a second lien debt for equity swap which reduced AMI's total debt by approximately $121 million. Upon completion of this second-step debt reduction, AMI's first lien debt moves much closer to a level that AMI and its advisors believe can potentially be refinanced at a lower cost of capital than the 11.5% coupon on the existing first lien notes. AMI's outstanding first lien notes will be reduced to approximately $326 million in aggregate principal amount, a reduction of approximately $37 million, or 10%, since September 2014. In connection with the total debt reduction, AMI's total annual interest expense will be reduced by approximately $14 million, or 25%, resulting in additional annual free cash flow of approximately $14 million. "Thanks to the unyielding support we have received from certain noteholders regarding balance sheet initiatives, we have the lowest amount of total debt and the strongest liquidity position in 15 years," said David J. Pecker, Chairman, president and CEO of AMI. "We plan to access the capital markets to refinance our existing first lien debt and further reduce interest expense and improve free cash flow." About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., an in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media incurred a net loss of $55.5 million on $349 million of total operating revenues for the fiscal year ended March 31, 2013, as compared with net income of $22.3 million on $387 million of total operating revenues for the fiscal year ended March 31, 2012. * * * As reported by the TCR on Sept. 23, 2014, Standard & Poor's Ratings Services raised its corporate credit rating on Boca Raton, Fla.-based American Media Inc. to 'CCC' from 'SD' (selective default). The upgrade follows a review of American Media's business and financial risk profile assessments following its exchange of approximately $7.8 million 13.5% second-lien senior notes due 2018 and approximately $113.3 million 10% second-lien senior payment-in-kind (PIK) notes due 2018 for equity. In the July 10, 2014, edition of the TCR, Moody's Investors Service has lowered American Media, Inc.'s Corporate Family Rating (CFR) to Caa1 from B3. The downgrade of American Media's CFR to Caa1 reflects Moody's expectation for lower revenue and EBITDA resulting in higher financial leverage. AMERICAN MEDIA: Moody's Rates $2.2MM Senior 2nd Lien Notes 'Caa3' ----------------------------------------------------------------- Moody's Investors Service has revised American Media, Inc.'s ("American Media," "AMI" or the "company") Probability of Default Rating (PDR) to Caa1-PD/LD from Caa1-PD in response to the company's January 5, 2015 announcement of a distressed debt exchange in which American Media entered into an exchange agreement with note holders to exchange $32 million of First-Lien Notes for approximately $39 million of new 7% Second-Lien Notes due January 2020 (unrated). The PDR will be revised back to Caa1-PD after three business days. The rating action results from Moody's practice of interpreting circumstances in which a debt holder accepts a compromise offering involving subordination as an indication of an untenable debt capital structure and constituting it as a default; hence the "/LD" component of the PDR to signal the "limited default" that has been deemed to have occurred on the exchanged securities. While no payment default has transpired and there are no debt maturities until 2017, the debt exchange, which is designed to reduce first-lien debt and interest expense, represents the occurrence of a deemed default. This represents the company's second distressed exchange following the one in September 2014 when the company converted $121.1 million of Second-Lien Notes into common equity. The transaction does not materially change the company's liquidity position, its future prospects, or any of the parameters with which Moody's assesses AMI's ratings. Accordingly, AMI's Corporate Family Rating (CFR) is affirmed at Caa1, its Speculative Grade Liquidity rating is affirmed at SGL-4, and the rating outlook remains negative. However, the revisions to the company's debt composition alter the relative proportions of structural/contractual subordination that result in changes to loss given default assessments for certain instruments, as noted below. As a result of a smaller amount first-lien debt and more second-lien junior debt in AMI's capital structure, the First-Lien Senior Secured Notes will now sustain a slightly lower loss absorption in a distressed scenario under Moody's Loss Given Default (LGD) Methodology. Ratings Affirmed: Issuer: American Media, Inc. Corporate Family Rating -- Caa1 Probability of Default -- Caa1-PD/LD Speculative Grade Liquidity Rating -- SGL-4 $325.7 Million (originally $385 Million) 11.5% Senior Secured First-Lien Notes due December 2017 -- Caa1 (LGD assessment revised to LGD-3 from LGD-4) $2.2 Million (originally $105 Million) 13.5% Senior Secured Second-Lien Notes due June 2018 -- Caa3 (LGD-6) Ratings Rationale American Media's Caa1 CFR reflects the company's elevated total debt to EBITDA leverage that Moody's expect will rise to the 8-9x range (Moody's adjusted) over the rating horizon from about 7x as of September 30, 2014 as a result of lower EBITDA performance that stems from a reduction in circulation sales associated with the bankruptcy filing of AMI's second largest publications wholesaler, Source Interlink Distribution ("Source"). The rating also captures AMI's weak liquidity profile and deteriorating EBITDA cushion under the revolver's first-lien leverage covenant resulting from the lower circulation revenue aggravated by the Source bankruptcy, which required temporary covenant relief through an amendment to the credit facility. Ratings are further constrained by the negative impact from the secular decline in circulation of print-based weekly celebrity tabloids/monthly magazines and print advertising, increasing fragmentation across various digital platforms (e.g., websites, mobile, tablets, video and social media), pricing pressures in the magazine advertising market and competition from deep-pocketed rivals. These factors will increasingly test AMI's ability to continually reduce manufacturing and operating expenses to keep credit metrics from deteriorating further. Though management continues to execute cost reduction initiatives to approach annual EBITDA targets, Moody's remain concerned that additional cost takeouts will be harder to achieve, which believe will be necessary to address longer term secular pressures that are negatively impacting the print media industry. Ratings are supported by the strong brand name, reputation and readership loyalty of AMI's flagship titles including Star, Shape, National Enquirer, OK!, and Muscle & Fitness, as well as the ability to partially offset declining newsstand and subscription revenue by raising cover prices, increasing the number of ad pages per magazine, publishing additional special issues for key publications and optimizing print programs designed to reduce manufacturing and distribution costs (e.g., smaller magazine sizes as well as paper rate savings through in-house purchasing). Liquidity is weak with around $8 million of cash and $28 million of borrowing capacity under the $40 million revolving credit facility as of September 2014. Given that AMI made a sizable interest payment on the First-Lien Notes in December 2014, Moody's believe a revolver draw was made in the fourth calendar quarter to support this payment, further reducing borrowing capacity. Moody's project free cash flow of $10-$15 million in fiscal 2015 (ending March 2015). Rating Outlook The negative rating outlook reflects Moody's expectation for lower circulation sales over the near-term as well as the possibility that the revenue decline could be bigger than anticipated and/or the transition period could take longer than expected. Negative pressure is further exacerbated by AMI's exposure to newsstand sales, which account for about 40% of total revenue. In addition, Moody's continue to expect continued secular decline in traditional print-based magazine publishing due to increasing alternatives for magazine and tabloid delivery across various digital platforms. As such, Moody's believe there is a risk that AMI's revenue and cash flow could experience permanent reduction if consumers do not resume purchasing AMI's publications and circulation does not revert to prior levels after the company reallocates Source's distribution business to its other wholesalers. What Could Change the Rating -- DOWN Ratings could be lowered due to higher-than-expected declines in circulation or print advertising demand resulting in further free cash flow deterioration and inability to reduce debt balances or meet financial maintenance covenants. Ratings could also be downgraded if weaker EBITDA, debt-financed acquisitions or other leveraging events result in higher-than-expected total debt to EBITDA ratios (includes Moody's standard adjustments) that diverge from Moody's expectations. What Could Change the Rating -- UP An upgrade is unlikely over the near-term, however the outlook could be stabilized if circulation sales revert to prior levels, advertising revenue improves, or incremental service revenue and/or higher cover prices offset circulation declines resulting in neutral to positive free cash flow generation, debt reduction and total debt to EBITDA sustained comfortably below 6x (includes Moody's standard adjustments). The principal methodology used in this rating was Global Publishing 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. Headquartered in Boca Raton, Fl, American Media, Inc. is a leading publisher of celebrity weekly journals including Star, OK!, and National Enquirer as well as health and fitness magazines including Shape and Men's Fitness, published 10 times per year. The company also provides services to other publishers and arranges for the placement of owned publications and third party publications with retailers. Revenue for the twelve months ended September 30, 2014 totaled approximately $316 million. AMERICAN PATRIOT: Banks Signs New $55,000 SPA with CFSI ------------------------------------------------------- American Patriot Bank, a subsidiary of American Patriot Financial Group, entered into a stock purchase agreement by and between the Bank and Complete Financial Solutions, Inc., pursuant to which the Bank, on Oct. 29, 2014, sold to CFSI 200 shares of a newly created series of Fixed Rate Noncumulative Perpetual Preferred Stock, Series A for a purchase price of $200,000. The terms of the Series A Preferred Stock provide that noncumulative dividends will be payable quarterly at a rate of 5% per annum on March 15, June 15, September 15 and December 15 of each year. Because the dividends are noncumulative, in the event that the Bank fails to make a dividend payment that payment will not continue to be owed. The Bank did not make the dividend payments due on the Series A Preferred Stock on Dec. 15, 2014, and does not anticipate that it will be able to make dividend payments on the Series A Preferred Stock. The Series A Preferred Stock has no maturity date and the Bank may not redeem the Series A Preferred Stock until the first dividend payment date after the fifth anniversary of the issuance of the shares, and thereafter may only redeem the shares with the prior approval of its applicable federal and state regulatory authorities. In the event of any liquidation, dissolution or winding up of the affairs of Bank, whether voluntary or involuntary, holders of the Series A Preferred Stock will be entitled to receive for each share of the Series A Preferred Stock, out of the assets of the Bank or proceeds thereof (whether capital or surplus) available for distribution to stockholders of Bank, subject to the rights of any creditors of the corporation, before any distribution of those assets or proceeds is made to or set aside for the holders of the Bank's common stock and any other stock of the Bank ranking junior to the Series A Preferred Stock as to such distribution, payment in full in an amount equal to $1,000 per share. The Series A Preferred Stock is not convertible into any other securities of the Bank. The Series A Preferred Stock is generally non-voting, except that the holders of the Series A Preferred Stock are entitled to vote separately as a class in the event that the Bank seeks to issue shares of stock that are senior to the Series A Preferred Stock, the Bank seeks to make any modification to the terms of the Series A Preferred Stock that would adversely affect the rights and preferences of the shares or the Bank seeks to consummate a binding share exchange, reclassification involving the shares or a merger, unless the Series A Preferred Stock remains outstanding or is converted into or exchanged for preference securities of the surviving entity or its ultimate parent in such a transaction (if not the Bank) and such shares remaining outstanding or issued in conversion or exchange of the Series A Preferred Stock have rights and preferences which are not materially less favorable than those of the Series A Preferred Stock. In connection with entering into the Stock Purchase Agreement, the Company, the Bank and CFSI entered into an amendment to the Common Stock Purchase Agreement, dated as of June 27, 2014, by and among the Company, the Bank and CFSI, pursuant to which the period of time that CFSI is to file a change in control application with the applicable federal regulators to acquire control of the Bank was extended until June 27, 2015. The Amendment also provides that in a transaction pursuant to which CFSI may acquire control of the Bank, the consideration that may be issued to the holders of the Company's common stock may be either common stock of CFSI or some other form of adequate consideration that may be distributed to the common stockholders of the Company in a liquidating distribution. The Amendment also modifies CFSI's obligations to redeem any outstanding shares of the Company's preferred stock. Pursuant to the terms of the Amendment, CFSI will either offer to redeem the Company's outstanding preferred shares for their cash value or, provided an exemption from registration is available, give the holders of the preferred shares the option to accept CFSI's common stock in lieu of cash. On Dec. 30, 2014, the Bank and CFSI entered into a Stock Purchase Agreement by and between the Bank and CFSI, pursuant to which the Bank, has agreed to sell to CFSI 55 shares of the Series A Preferred Stock for a purchase price of $55,000. The Series A Preferred Stock to be sold pursuant to the Second Stock Purchase Agreement will have the same rights and preferences as the Series A Preferred Stock sold to CFSI on Oct. 29, 2014. In connection with the execution of the Second Stock Purchase Agreement, CFSI executed a promissory note in which it promised to pay for the Series A Preferred Stock it agreed to acquire pursuant to the Second Stock Purchase Agreement on or before Jan. 30, 2015. Pursuant to the Stock Purchase Agreement and the Second Stock Purchase Agreement, the Bank, on the one hand, and CFSI, on the other hand, each made customary representations and warranties to one another and agreements with one another for transactions of the type contemplated by the Stock Purchase Agreement and the Second Stock Purchase Agreement. About American Patriot Based in Greenville, Tenn., American Patriot Financial Group, Inc. is a one-bank holding company formed as a Tennessee corporation to own the shares of American Patriot Bank. The Bank is the only subsidiary of the Corporation. American Patriot Bank commenced operations as a state chartered bank on July 9, 2001. The Bank had total assets of roughly $118 million at Dec. 31, 2009. The Bank is not a member of the Federal Reserve System. The Bank's customer base consists primarily of small to medium- sized business retailers, manufacturers, distributors, land developers, contractors, professionals, service businesses and local residents. On Aug. 18, 2010, the Company received from the Federal Deposit Insurance Corporation, a Supervisory Prompt Corrective Action Directive, dated August 17, 2010, due to American Patriot Bank's "significantly undercapitalized" status. The Directive requires that the Bank submit an acceptable capital restoration plan on or before August 31, 2010, providing that, among other things, at a minimum, the Bank will restore and maintain its capital to the level of "adequately capitalized." In its audit report for the 2011 results, Hazlett, Lewis & Bieter, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses for the past five years resulting in a retained deficit of $7.15 million at Dec. 31, 2011. At Dec. 31, 2011 and 2010, the Company and its subsidiary were significantly undercapitalized based on regulatory standards and has consented to an Order to Cease and Desist with its primary federal regulator that requires, among other provisions, that it achieve regulatory capital thresholds that are significantly in excess of its current actual capital levels. The Company's nonperforming assets have increased significantly during 2011 and 2010 related primarily to deterioration in the credit quality of its loans collateralized by real estate. The Company, at the holding company level, has a note payable that was due Feb. 28, 2011, which is now in default. This note is securitized by 100 percent of the stock of the subsidiary. The Company reported a net loss of $1.18 million in 2011, compared with a net loss of $2.29 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $86.30 million in total assets, $85.51 million in total liabilities and $793,666 in total stockholders' equity. AMSTERDAM HOUSE: Judge Closes Chapter 11 Bankruptcy Case -------------------------------------------------------- The Hon. Alan S. Trust of the U.S. Bankruptcy Court for the Eastern District of New York issued a final decree closing the Chapter 11 case of Amsterdam House Continuing Care Retirement Community Inc. As reported in the Troubled Company Reporter on Dec. 22, 2014, the Debtor notified the bankruptcy court that the Effective Date of Amended Plan of Reorganization occurred on Nov. 13, 2014. According to the TCR, Judge Trust issued on Oct. 23, 2014, a findings of fact, conclusions of law, and order confirming the Plan. The Plan is the result of negotiations by and among the Debtor, the 2007 Bond Trustee, and the Consenting Holders. The Consenting Holders hold all rights with respect to or otherwise having authority to vote the Series 2007A Bonds and the Series 2007C Bonds that are party to the Plan Support Agreement. According to the TCR, the Plan provides for the payment and full satisfaction of all Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed U.S. Trustee Fees, Allowed Other Priority Claims, Allowed Other Secured Claims, and Allowed General Unsecured Claims against the Debtor. The Plan also provides that the holders of Allowed Series 2007A/B Bond Claims and Series 2007C Bond Claims, in full and final satisfaction and discharge of and in exchange for those Allowed Claims, will receive certain 2014 Bonds and payment in Cash on account of accrued and unpaid prepetition interest. In addition, the Plan provides that the holder of the Allowed Subvention Claim will accept the treatment proposed by the Plan in full satisfaction of that holder's Claim. About Amsterdam House Amsterdam House Continuing Care Retirement Community, Inc., owns and operates Harborside, an upscale retirement community is situated on 8.9 acres in Port Washington, New York. Harborside -- http://www.theamsterdamatharborside.com/-- is Nassau County's first and only CCRC licensed under Article 46 of the New York Public Health Law. CCRCs provide senior citizens with a full range of living accommodations and healthcare services during their retirement years. Harborside currently offers 329 units of varying sizes for independent, enriched, and skilled nursing care. Amsterdam House filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 14-73348) on July 22, 2014, in Central Islip, New York, to implement a prenegotiated bankruptcy-exit plan. The case is assigned to Judge Alan S Trust. Ingrid Bagby, Esq., at Cadwalader Wickersham & Taft LLP, serves as the Debtor's counsel. Grant Thornton LLP serves as financial advisors, Herbert J. Sims & Co., Inc., serves as investment bankers, and Kurtzman Carson Consultants LLC acts as claim and noticing agent. The Company said that total assets were $286 million and debt was $437 million as of April 30, 2014. ANACOR PHARMACEUTICALS: Eagle Mgt. Holds 5.4% Stake as of Dec. 31 ----------------------------------------------------------------- Eagle Asset Management, Inc., reported in a regulatory filing with the U.S. Securities and Exchange Commission that as of Dec. 31, 2014, it beneficially owned 2,328,177 shares of common stock of Anacor Pharmaceuticals, Inc., representing 5.43 percent of the shares outstanding. A copy of the Schedule 13G is available for free at http://is.gd/JCPaAn About Anacor Pharmaceuticals Palo Alto, Calif.-based Anacor Pharmaceuticals (NASDAQ: ANAC) is a biopharmaceutical company focused on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. Anacor has discovered eight compounds that are currently in development. Its two lead product candidates are topically administered dermatologic compounds - tavaborole, an antifungal for the treatment of onychomycosis, and AN2728, an anti-inflammatory PDE-4 inhibitor for the treatment of atopic dermatitis and psoriasis. The Company's balance sheet at Sept. 30, 2014, showed $159 million in total assets, $90.2 million in total liabilities, $4.95 million in redeemable common stock and $63.4 million in total stockholders' equity. For the nine months ended Sept. 30, 2014, the Company reported a net loss of $77.02 million on $11.04 million of total revenues compared to a net loss of $45.98 million on $8.74 million of total revenues for the same period in 2013. ARUBA INVESTMENTS: Moody's Assigns B2 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Aruba Investments, Inc., including a B2 Corporate Family Rating ("CFR"). Aruba is a holding company that Golden Gate Capital will use to acquire ANGUS Chemical Company from The Dow Chemical Company. Proceeds from $730 million of new funded secured and unsecured debt will help fund the purchase price of about $1.2 billion plus transaction-related fees and expenses. The rating outlook is stable. "Pro forma financial leverage is high for the rating category, particularly considering the carve-out nature of the transaction, significant reliance on a single site, and limited historical data," said Ben Nelson, Moody's Assistant Vice President and lead analyst for Aruba Investments, Inc. The actions: Issuer: Aruba Investments, Inc., Corporate Family Rating, Assigned B2; Probability of Default Rating, Assigned B2-PD; $65 million First Lien Senior Secured Revolving Credit Facility (USD) due 2020, Assigned B1 (LGD3); $355 million First Lien Senior Secured Term Loan B (USD) due 2022, Assigned B1 (LGD3); $150 million First Lien Senior Secured Term Loan B (EUR) due 2022, Assigned B1 (LGD3); $225 million Unsecured Notes due 2023, Assigned Caa1 (LGD5); Outlook, Stable. The assigned ratings are first-time ratings and remain subject to Moody's review of the final terms and conditions of the proposed transaction expected to close in the first quarter of 2015. Ratings Rationale The B2 CFR reflects high financial leverage, significant operational concentration, short-term risk associated with the carve-out nature of the transaction, and longer-term risk associated with private equity ownership. Moody's estimates adjusted financial leverage near 7 times (Debt/EBITDA; excluding certain management add-backs including the pro forma impact of a recent price increase) and interest coverage in the low 2 times (EBITDA/Interest) on a pro forma basis for the twelve months ended September 30, 2014. The rating assumes that the company will generate $40-50 million of annual free cash flow starting in 2016 and use a significant portion of it to reduce debt. Good market positions and multiple barriers to entry help support strong profitability in the company's key niche additive markets. Geographic diversity, some product diversity and a diverse range of mostly-stable end markets should also help the company maintain more stable financial performance over time compared to most chemical industry peers. The rating also benefits from significant investment in the company's facility in Louisiana since Dow acquired the company in 1999, improving operational metrics over that horizon, limited capital investment required to maintain its existing facilities going forward, and maintenance of significant inventory to help mitigate the impact of any unforeseen short-term operational disruptions. The stable outlook assumes modest near-term improvement in credit measures, including leverage falling toward 6 times and retained cash flow of 5-8% (RCF/Debt), and maintenance of adequate liquidity. Moody's could upgrade the rating with a successful transition to a standalone entity, leverage sustained below 5 times, and free cash flow sustained above 10% of debt. An upgrade would require commitment to more conservative financial policies. Conversely, Moody's could downgrade the rating if Moody's expected leverage sustained above 6 times and free cash flow consistently below $35 million/year. An adverse operational event, particularly at the company's facility in Louisiana, loss of a major customer, or deterioration in liquidity could also result in a downgrade. The principal methodology used in these ratings was Global Chemical Industry Rating Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Aruba Investments, Inc. is a holding company will own ANGUS Chemical Company. Headquartered in Buffalo Grove, Ill., ANGUS produces performance additives for end markets including paints and coatings, pharmaceuticals, metalworking fluids, personal care, agriculture, and biocides. ARUBA INVESTMENTS: S&P Assigns 'B' CCR; Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Aruba Investments Inc., the parent holding company of ANGUS Chemical Co. The outlook is stable. S&P assigned its 'B+' issue–level rating and '2' recovery rating to the company's proposed $505 million secured term loan B and $65 million revolving credit facility. The '2' recovery rating indicates S&P's expectation of substantial (70%-90%) recovery in the event of payment default. At the same time, S&P assigned its 'B' issue-level rating and '4' recovery rating to the company's proposed $225 million senior unsecured notes. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in the event of payment default. All ratings are based on preliminary terms and conditions. The stable outlook reflects high margins, the lack of direct competition for the majority of the company's product offerings, and S&P's expectation for steady operating performance. Given the company's niche market, S&P do not expect that the company will pursue sizable acquisitions. Over the next few quarters, S&P expects adjusted debt to EBITDA to be less than 7x. The company's improving financial results and solid position in its niche market make a downgrade in the next year unlikely. S&P could, however, consider lowering ratings if the company's financial policy deviates from its expectation that it will effectively manage its capital structure, if leverage exceeds 7x, or if liquidity falls to less than adequate or weaker. In addition, ratings could be lowered if S&P sees an increased threat of new technologies or new market entrants to the company's niche market or if the company faces issues transitioning to a stand-alone company. An upgrade over the longer term could be warranted if the company continuously delivers high margins and strengthens its business risk profile meaningfully by decreasing concentration risks and increasing the diversity of income. Given the company's private equity ownership, an improvement to the financial risk profile is unlikely. ASSOCIATED WHOLESALERS: Seeks Until April 7 to File Plan -------------------------------------------------------- ADI Liquidation, Inc., f/k/a AWI Delaware, Inc., and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive right to file a Chapter 11 plan through and including April 7, 2015, and their exclusive right to solicit acceptances of that plan through and including June 8, 2015. To ensure that their Chapter 11 cases continue to progress in an effective and efficient manner, the Debtors seek the extensions so they can work towards a consensual Chapter 11 plan while also continuing to focus on transitioning their operations and other pressing issues arising in their bankruptcy cases, Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware, tells the Court. A hearing on the extension request is scheduled for Jan. 21, 2015, at 10:00 a.m. (EST). Objections are due Jan. 13. About Associated Wholesalers Founded in 1962 and headquartered in Robesonia, Pennsylvania, Associated Wholesalers Inc. serviced 800 supermarkets, specialty stores, convenience stores and superettes with grocery, meat, produce, dairy, frozen foods and general merchandise/health and beauty care products. AWI, with distribution facilities in Robesonia, Pennsylvania, and York, Pennsylvania, served the mid- Atlantic United States. AWI is owned by its 500 retail members, who in turn operate supermarkets. AWI had 1,459 employees. White Rose Inc. is a food wholesaler and distributor serving the greater New York metropolitan area. The company traces its origins to 1886, when brothers Joseph and Sigel Seeman founded Seeman Brothers & Doremus to provide grocery deliveries throughout New York City. White Rose carries out its operations through three leased warehouse and distribution centers, two of which are located in Carteret, New Jersey, and one in Woodbridge, New Jersey. White Rose has 777 employees. Associated Wholesalers and its affiliates sought Chapter 11 bankruptcy protection on Sept. 9, 2014, to sell their assets under 11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and better offers. The Debtors have sought joint administration of their Chapter 11 cases for procedural purposes, seeking to maintain all pleadings on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No. 14-12092. As of the Petition Date, the Debtors owe the Bank Group (consisting of lenders, Bank of America, N.A., Bank of American Securities LLC as sole lead arranger and joint book runner, Wells Fargo Capital Finance, LLC as joint book runner and syndication agent, and RBS Capita, as documentation agent) an aggregate principal amount of not less than $131,857,966 (inclusive of outstanding letters of credit), plus accrued interest. The Debtors estimate trade debt of $72 million. AWI Delaware disclosed $11,440 in assets and $125,112,386 in liabilities as of the Chapter 11 filing. Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal advisors to the Debtors, Lazard Middle Market is serving as financial advisor, and Carl Marks Advisors is serving as restructuring advisor to AWI. Carl Marks' Douglas A. Booth has been tapped as chief restructuring officer. Epiq Systems serves as the claims agent. The Official Committee of Unsecured Creditors tapped to retain Hahn & Hessen LLP as its lead counsel; Pepper Hamilton LLP as its co-counsel; and Capstone Advisory Group, LLC, together with its wholly-owned subsidiary Capstone Valuation Services, LLC, as its financial advisors. AUBURN TRACE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Auburn Trace, Ltd 777 E. Atlantic Ave, Suite 200 Delray Beach, FL 33483 Case No.: 15-10317 Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Hon. Paul G. Hyman, Jr. Debtor's Counsel: Bradley S Shraiberg, Esq. SHRAIBERG, FERRARA, & LANDAU P.A. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 Email: bshraiberg@sfl-pa.com Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The petition was signed by Brian J. Hinners, president. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A-Rite Way, Inc. $660 Bermuda Landscape & Desine, Inc. $3,401 England Logistics $52 Florida Department of Revenue $367 For Rent Magazine $755 HD Supply $500 Home Depot Credit Services $159 Hulett Environmental Services $475 Mobile Mini Inc. $328 OTA Services, LLC $608 PPG Architectural Finishes $645 Resite Online $99 Small Business Administration $1,747 Sullivan Electric & Pump, Inc. $2,371 Sunshine Communication Services $85 The Lake Doctors $75 The Praxis Group, Inc. $24,000 Waste Management $215 WL General Services $120 Worldstar Restoration $365 AURBEC MINES: Declared Bankrupt Under Canada's BIA Act ------------------------------------------------------ Maudore Minerals Ltd. on Jan. 7, 2015, disclosed that as a result of the decision taken not to seek any further extension of its deadline to make a proposal to its creditors pursuant to the Bankruptcy and Insolvency Act (Canada), its subsidiary Aurbec Mines Inc. now has the status of a bankrupt entity under the BIA. Maudore is a Quebec-based junior gold company with more than 13 exploration projects. One of these projects is at an advanced stage of development with reported current and historical resources and mining. AUTOMATED BUSINESS: Plan Outline Hearing Continued Until Jan. 13 ---------------------------------------------------------------- The U.S. Bankruptcy Court continued until Jan. 13, 2015, at 10:00 a.m., the hearing to consider adequacy of information in the disclosure statement explaining Automated Business Power, Inc., et al.'s Second Amended Plan of Reorganization. As reported in the TCR on Dec. 17, 2014, the Plan was rejected by secured creditors (Class 1), namely, PNC Bank, TriState Bank, National Penn Bank, and Santander Bank. The lone holder of an unsecured claim in Class 2, Eyal Halevy, who asserts a $13.0 million claim, voted to accept the Plan. Seven general unsecured creditors, asserting a total of $251,600 in claims (Class 3), voted to accept the Plan. No ballots were cast by holders of interests (Class 4). PNC Bank, N.A., as administrative agent and lender, filed a written objection to the Second Amended Plan, stating that, among other things: 1. The Debtors proposed a plan that is not feasible because it is based on faulty revenue projections; 2. The Plan seeks to release Eyal Halevy, an insider who received a $15 million payment from Holding nine months prior to the Debtors' bankruptcy filing, from all claims, including avoidance actions, when such a release is completely unnecessary to effectuate the Plan; and 3. The Plan fails to treat PNC, a secured creditor, "fairly and equitably" as that term is defined under the Bankruptcy Code by: (1) nullifying entirely the loan documents evidencing the Administrative Agent's loan to the Debtors; and (2) paying unsecured creditors before secured creditors are paid in full. The TCR reported on Oct 13, 2014, that the Debtors filed with the Court a Disclosure Statement for all holders of claims against or interests in the Debtors, as a prerequisite to soliciting acceptances to their Second Amended Plan. The amended Plan contains changes necessitated by Court Orders in connection with hearings held on Sept. 17, 2014, and agreements reached between the Debtors and certain creditors. Following that hearing, on Sept. 25, the Court authorized the transmittal of conditionally approved Disclosure Statement and the Court fixed the times for filing objections to Plan and acceptances or rejections of the Plan. The Court also authorized the Plan Sponsor to solicit acceptances and rejections of the Plan based upon the conditionally approved Disclosure Statement. In the Sept. 25, 2014, order, the Court fixed Nov. 4, 2014, as the last day for filing and serving written objections to the conditionally approved Disclosure Statement or confirmation of the Plan. Nov. 4 is also fixed as the last day for filing written acceptances or rejections of the Plan. Under the Plan, the Debtors designate these Classes of Claims and Interests: * Class 1. Class 1 consists of the Allowed Secured Claim of PNC Bank; * Class 2. Class 2 consists of Allowed Unsecured Claims of Halevy pursuant to the Automated Business Holding Co. Note; * Class 3. Class 3 consists of all other general unsecured claims; and * Class 4. Class 4 consists of all Interests held in the Debtors. The funds necessary to implement the Plan will be generated from, among other things, (i) Cash Receipts from Operations; and (ii) the acquisition by the Debtors of new financing in an amount sufficient to pay the Class 1 Claim in full and, if possible, also the Allowed Class 2 Claim and Allowed Class 3 Claims. The hearing on confirmation of the Plan is currently scheduled for Dec. 17, 2014, at 10:00 a.m. prevailing Eastern Time. Objections to confirmation are due on Nov. 4. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/AutomatedBusiness_2ndAmdDS.pdf In the order, the Court noted that the Debtor's use of cash collateral is extended on the same terms as of Dec. 23 order. About Automated Business Power Military supplier Automated Business Power, Inc., and Automated Business Power Holding Co. filed their Chapter 11 petitions (Bankr. D. Md. Case Nos. 13-27123 and 13-27125) on Oct. 8, 2013. Automated Business Power has been engaged in the design and production of advanced filed deployable uninterruptible power supplies, AC-to-DC power supplier, DC-to-DC converters, uninterruptible power systems, Power/Voice/Data cases, speakers, speaker/voice systems and ancillary equipment tactical transceivers, power amplifiers, SATCOM, and other communications equipment. The petitions were signed by Daniel Akman as president. The Debtors estimated assets of at least $50 million and liabilities of at least $10 million. The Debtor is represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP, in Washington, D.C. The Debtor tapped Dickinson Wright and Michael R. Holzman as Special ESOP Plan Counsel. PNC Bank is represented by James M. Smith, Esq., and Lisa Bittle Tancredi, Esq., at Gebhardt & Smith LLP. AYN WARDO: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------- Debtor: AYN Wardo Realty, LLC 1512 Atwood Avenue Johnston, RI 02919 Case No.: 15-10017 Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court District of Rhode Island (Providence) Debtor's Counsel: Kevin D. Heitke, Esq. HEITKE LAW OFFICE, LLC 365 Eddy Street Providence, RI 02903 Tel: (401) 454-4100 Fax: (401) 454-4144 Email: kdh@hlori.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Edmond Shabo, member/manager. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/rib15-10017.pdf AZIZ CONVENIENCE: Has Until March 2 to File Plan of Reorganization ------------------------------------------------------------------ The bankruptcy court extended AZIZ Convenience Stores, L.L.C.'s exclusive periods to file a plan of reorganization until March 2, 2015, and solicit acceptances for that plan until May 4. About Aziz Convenience Aziz Convenience Stores, L.L.C., owner of convenience stores with gas pumps in Texas, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 14-70427) in its hometown in McAllen, Texas, on Aug. 4, 2014, without stating a reason. The Debtor owns properties in Mission, San Juan, Pharr, McAllen, Sullivan City, Edinburg, La Joya, Donna, Alamo, Alton, Edinburg, all in Texas. It appears that none of the Debtor's convenience stores are on leased property as the schedule of unexpired leases only shows the contract with Valero LP. The Debtor is represented by William A Csabi, Esq., from Harlingen, Texas. BANCO SANTOS: Fla. Judge OKs $8MM Deal with Espirito Santo Bank --------------------------------------------------------------- Law360 reported that a Florida bankruptcy judge indicated that she would sign off on an $8 million settlement ending bankrupt Brazilian bank Banco Santos SA's racketeering and tort suit against Portugal-based Espirito Santo Bank. According to the report, in a hearing in Miami, U.S. Bankruptcy Judge Laurel Isicoff said on Dec. 22 that she would sign off on an order preliminarily approving a deal that resolves a suit filed by Banco Santos' court-appointed administrator Vanio Cesar Pickler Aguiar claiming the bank lost $38.7 million through ESB's fraud and money laundering. About Banco Santos Vanio Cesar Pickler Aguiar, as foreign representative for Sao Paulo, Brazil-based Banco Santos S.A., filed a Chapter 15 petition (Bankr. S.D. Fla. Case No. 10-47543) in Miami, Florida. The Chapter 15 petition estimates that the Debtor has assets of US$500 million to US$1 billion and debts of more than US$1 billion. Gregory S. Grossman, Esq., in Miami, Florida, represents the Trustee in the Chapter 15 case. The Trustee is also represented by: Astigarraga Davis, Esq. MULLINS & GROSSMAN P.A. 701 Brickell Avenue, 16th Floor Miami, Florida 33131 Tel: (305) 372-8282 Fax: (305) 372-8202 E-mail: ggrossman@astidavis.com edavis@astidavis.com BARNES & NOBLE: Might File for Ch 11 Bankruptcy, Report Says ------------------------------------------------------------ Michael Levin, writing for Hngnews.com, reports that Barnes & Noble might file for Chapter 11 bankruptcy protection. Hngnews.com relates that B&N has been closing about 20 stores per year since 2012 and has said it will continue to do so for the next several years, but its financial position is bleak. The report says that these are reasons on B&N's troubles: 1. Amazon makes it so easier to purchase books; 2. publishers thrashed BN by selling best-sellers at deep discounts in non-traditional outlets like supermarkets, Wal-Mart and Costco, removing a key source of revenue for the chain; 3. underfunded Nook is competing with Amazon's Kindle; 4. the antiquated model of printing books on spec, putting them on trucks, and crossing your fingers that they'll sell doesn't work in the Internet print-on- demand era; and 5. book buyers want decent client service and at B&N, the only way to find a sales clerk is to attempt to shoplift. According to Hngnews.com, one of B&N's key investors has cut the level of its financial stake in the company. Barnes & Noble owns a chain of bookstores in the U.S. BAY AREA FINANCIAL: Court Issues Final Decree Closing Bankr. Case ----------------------------------------------------------------- The Hon. Thomas B. Donovan of the U.S. Bankruptcy Court for the Central District of California issued a final decree closing the Chapter 11 bankruptcy case of Bay Area Financial Corporation, on ground that the Debtor's first amended plan of reorganization was confirmed on Aug. 20, 2014, and a confirmation order was entered on Sept. 12, 2014. The Debtor's plan became effective on Oct. 1, 2014. All initial distributions required to be made on the effective date of the plan, including payment of all administrative claims, have been made, and the balance of the payments are ongoing. Further, there are no pending matters or open proceedings remaining, and all final motions for approval of compensation and reimbursement of expenses have been approved by the Court. In short, the Debtor's bankruptcy estate has been substantially consummated and should there be closed. All outstanding fees to the Office of the U.S. Trustee, to the extent not paid, will be paid prior to the entry of the final decree, according to court documents. About Bay Area Financial Bay Area Financial Corp., a consumer finance company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 13-38974) on Dec. 9, 2013. The case is assigned to Judge Thomas B. Donovan. The Debtor is represented by Sandford L. Frey, Esq., and Stuart I. Koenig, Esq., at Creim Macias Koenig & Frey LLP. The Debtor disclosed $15,248,851 in assets and $21,239,663 in liabilities as of the Chapter 11 filing. There is no secured debt, although $141,000 is owing on a priority tax claim. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by James C. Bastian, Jr., Esq., and Melissa Davis Lowe, Esq., at Shulman Hodges & Bastian LLP. BEAR CREEK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bear Creek Partners, LLC 22640 Bear Creek Drive North Murrieta, CA 92562 Case No.: 14-25253 Chapter 11 Petition Date: December 23, 2014 Court: United States Bankruptcy Court Central District Of California (Riverside) Judge: Hon. Scott C Clarkson Debtor's Counsel: Paul R Shankman, Esq. HINDS & SHANKMAN, LLP 21515 Hawthorne Blvd Ste 1150 Torrance, CA 90503 Tel: 310-316-0500 Fax: (310) 792-5977 Email: pshankman@jhindslaw.com jhinds@jhindslaw.com Total Assets: $8.63 million Total Liabilities: $7.49 million The petition was signed by Richard H. Gillette, manager of BCP Management, LLC. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb14-25253.pdf BODY CENTRAL: Gets Default Notice, Exploring Alternatives --------------------------------------------------------- Body Central Corp., a multi-channel, specialty retailer offering on trend, quality apparel and accessories at value prices, on Jan. 7 disclosed that it is experiencing significant liquidity challenges and has taken several steps to identify and evaluate potential strategic and financial alternatives. These alternatives may include and are not limited to the possibility of a Chapter 11 bankruptcy filing or an insolvency proceeding. The Company is working with professional advisors to assist with the evaluation of the situation, the potential alternatives and related matters. The Company has not identified a timetable for the completion of this process and does not intend to disclose new developments with respect to this process, unless and until its Board of Directors approves a specific action, or has concluded its review of the available alternatives. There can be no assurance that the exploration of the potential alternatives will or will not result in a certain transaction or path. In addition, on January 6, 2015, the Company received a notice of default from the holders of the Company's outstanding $18.0 million in aggregate principal amount of subordinated secured convertible notes issued June 27, 2014, alleging that the Company is in default under the Notes. An event of default under the Notes may also result in an event of default under the Company's senior credit facility. The occurrence of any such events of default under the Notes and the senior credit facility would permit the lenders thereunder to declare all amounts outstanding thereunder to become immediately due and payable and to exercise other remedies set forth in the applicable debt documents, including increasing the interest rates to the default rates of interest. Ben Rosenfeld, President and Chief Executive Officer, stated, "While the Company has made significant reductions in expenses and reduced excess inventory levels, our top line remains challenged by both the overall market environment and the transition time required to complete the merchandise transformation that began in the latter half of 2014. The management team and board, along with its advisors will continue to evaluate all available alternatives that may be appropriate for the business." About Body Central Corp. Founded in 1972, Body Central Corp. -- http://www.bodycentral.com/ -- is a multi-channel, specialty retailer offering on trend, quality apparel and accessories at value prices. As of January 6, 2015, the Company operated 265 specialty apparel stores in 28 states under the Body Central and Body Shop banners, as well as a direct business comprised of a Body Central catalog and an e-commerce website at www.bodycentral.com The Company targets women in their late teens to mid-thirties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. The Company's stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under the Company's exclusive Body Central(R), SexyStretch(R) and Lipstick Lingerie(R) labels. BR FESTIVALS: $500K Transfer to Uptown Was Fraudulent, Court Says ----------------------------------------------------------------- Judge Alan Jaroslovsky of the U.S. Bankruptcy Court for the Northern District of California ruled that the transfer of $500,000 to Uptown Theatre, LLC was clearly fraudulent as to BR Festivals, LLC's creditors in the adversary proceeding captioned BR Festivals, LLC v. Uptown Theatre, LLC, Case No. 14-1044. The Court noted that the transfer may be recovered from UT unless UT can establish all three elements of a defense under Section 550(b)(1) of the Bankruptcy Code. Since UT did not prove a single element, it has no defense and is liable for return of the $500,000, Judge Jaroslovsky opined. He added that to hold otherwise would countenance a forfeiture and a windfall at the expense of BRF's creditors. Accordingly, the Court enters a judgment in favor of BRF and against UT in the amount of $500,000, together with interest as provided by California law from and after April 16, 2013. In April 2013, while BRF was in the process of staging its concert, its principal diverted $500,000 of its funds in an attempt to purchase an indoor entertainment venue. BRF got nothing in return for the funds. BRF lost several million dollars on its concert, resulting in its bankruptcy filing. In the adversary proceeding, BRF seeks to recover the funds from the owner of the venue, defendant Uptown Theatre, LLC. The transfer was perpetrated by Robert Vogt, a manager of BRF. Mr. Vogt was also a 50% owner of Willpower Entertainment, LLC, which owned 65% of BRF. Mr. Vogt was also, through a trust, 10% owner of UT. Mr. Vogt never consummated the purchase. UT gave WE a brief extension to June 15, 2013, but in the end there was no sale and UT happily kept the $500,000. A full-text copy of the Memorandum dated December 1, 2014, is available at http://bit.ly/148Ji7Kfrom Leagle.com. About BR Festivals BR Festivals, LLC sought Chapter 11 bankruptcy protection in California (Bankr. N.D. Cal. Case No. 14-10175) on February 5, 2014. The case was assigned to Hon. Alan Jaroslovsky. The Debtor was organized to promote a music concert lasting several days in Napa, California. BROCADE COMMUNICATIONS: Moody's Rates New Convertible Notes Ba2 --------------------------------------------------------------- Moody's Investors Service affirmed Brocade Communications Systems Inc.'s Ba2 Corporate Family Rating and assigned a Ba2 rating to the proposed convertible notes. The Ba2-PD probability of default rating and the existing ratings of the secured and unsecured notes remain unchanged until closing of the transaction. The ratings outlook is stable. Brocade announced that the company will use the proceeds of the new notes to redeem the outstanding $300 million secured notes due 2020 as well as for general corporate purposes. Brocade also announced it will cancel its $125 million revolving credit facility coincident with the convertible note transaction. Upon the funding of the new notes and subsequent debt redemption, Moody's expects to withdraw the ratings on the 2020 secured notes, revise the Probability of Default rating to Ba1 from Ba2 and upgrade the $300 million unsecured notes due 2023 to Ba2 from Ba3. Upon closing of the convertible note offering, retirement of the secured bonds and termination of the revolver, the convertible debt and the existing $300 million unsecured notes will be the only debt in the capital structure and thus both are expected to be rated the same level as the Ba2 corporate family rating. Assignments: Issuer: Brocade Communications Systems, Inc. Convertible Notes, Assigned Ba2, LGD4 Affirmations: Issuer: Brocade Communications Systems, Inc. Speculative Grade Liquidity Rating, Affirmed SGL-1 Corporate Family Rating, Affirmed Ba2 Outlook, Remains Stable Ratings Rationale The affirmation of the Ba2 corporate family rating continues to reflect Brocade's leadership position within the storage area networking (SAN) market, its strong niche position in the ethernet data (enterprise) networking market and its conservative credit metrics. The ratings are constrained by the company's relatively small scale compared to its main competitor, Cisco, and as well the challenge of maintaining market position as the storage and data networking markets evolve. Long term growth prospects for the SAN business remain uncertain as storage network architectures evolve. However, the company's strong capital structure gives it flexibility to manage through technology cycles related to the introduction of new SAN standards and subsequent market adoption. Brocade's debt to EBITDA is expected to increase modestly to 1.7x upon the funding of the new convertible notes and redemption of the outstanding secured notes. Free cash flow to debt pro forma for the transaction is approximately 44%. Liquidity is expected to be very good based on an expected cash balance of $1.5 billion (pro forma for the debt issuance), and strong levels of free cash flow. The company is expected to generate in excess of $450 million of free cash flow over the next 12 months. While there is substantial cash in non-guarantor subsidiaries, the majority of operating assets and intellectual property are held at the borrower, Brocade Communications Systems, Inc . The ratings could face upward pressure if the company is able to maintain its leading positions in the SAN industry (and grow outside of its Fibre Channel base) and profitably expand its Ethernet business while maintaining a conservative capital structure. Ratings could face downward pressure if Brocade materially loses its position in the SAN market, the SAN market shrinks materially or leverage increases above 2x on other than a temporary basis. The principal methodology used in these ratings was Global Communications Equipment Industry published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Brocade Communications Systems, Inc. is a leading producer of storage area network equipment and a niche provider of data network equipment. Brocade, with revenues of $2.2 billion for the fiscal year ended November 1, 2014, is headquartered in San Jose, CA. BROCADE COMMUNICATIONS: S&P Rates New $500MM Unsecured Notes 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' issue-level rating and '3' recovery rating to Brocade Communications Systems Inc.'s proposed $500 million unsecured convertible notes due 2020. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50% to 70%) in the event of payment default. Although S&P's expectations for recovery are above the 50% to 70% range, it caps its recovery rating at '3' for unsecured debt. The cap reflects the potential for companies with corporate credit ratings in the 'BB' category to issue additional priority or pari passu debt prior to default while S&P's simulated default scenario contemplates that only the company's existing $300 million unsecured notes and the proposed $500 million convertibles are outstanding at default, along with modest priority claims. S&P expects the company to use the process of the proposed convertible notes to retire its $300 million senior secured notes due 2020 and to retain excess proceeds for general corporate purposes. The 'BB+' corporate credit rating on the company is unchanged; the outlook is stable. The 'BB+' issue-level rating and '3' recovery rating on the company's $300 million senior unsecured notes due 2023 are also unchanged. S&P will withdraw its issue-level and recovery ratings on the retired senior secured notes after the close of the transaction. Pro forma for the proposed transaction, adjusted surplus cash will continue to exceed gross adjusted debt, and cash interest expense will fall by $10 million or more per year. The ratings reflect S&P's view of the company's financial risk profile, which incorporates low adjusted leverage but also the potential for volatility in credit metrics during periods of stress, as well as S&P's view of its business risk profile, including its leading market share in the storage area network (SAN) business, but also its small share of the overall networking equipment market and high customer concentration. RATINGS LIST Ratings Unaffected Brocade Communication Systems Inc. Corporate credit rating BB+/Stable/-- $300 mil. sr. sec. nts due 2020 BBB Recovery rating 1 $300 mil. sr. unsec. nts due 2023 BB+ Recovery rating 3 New Ratings $500 mil. sr. unsec. Nts due 2020 BB+ Recovery rating 3 BROOKE CAPITAL: 10th Circuit Reverses Decision in Citizens Suit --------------------------------------------------------------- The United States Court of Appeals for the Tenth Circuit reversed a district judge's decision in the appellate case captioned Citizens Bank & Trust Company, Plaintiff-Appellant, v. Security First Insurance Holdings, LLC, a Florida limited liability company; Southern Fidelity Managing Agency, LLC, a Florida limited liability company; Northern Capital, Inc., a Florida corporation, Defendants-Appellees, Case No. 14-3017. The case relates to the bankruptcy case of Brooke Capital Corporation, Debtor, Case No. 08-22786. At the core of the appellate case is a priority dispute over collateral sold in bankruptcy. Plaintiff-Appellant Citizens Bank & Trust Company sought a declaratory judgment that it had superior rights to the collateral -- sale proceeds of certain stock -- owned by the Debtor in bankruptcy. The Bankruptcy Judge found largely in favor of Citizens and against various competing creditors including Defendants-Appellees Southern Fidelity Managing Agency, LLC, Security First Insurance Holdings, LLC, and Northern Capital, Inc. The U.S. District Court for the District of Kansas reversed, however, adopting the report and recommendation of a magistrate judge. The Magistrate Judge determined that the competing creditors had been assigned perfected security interests in the stock pursuant to Kan. Stat. Ann. Section 84-9-310(c). Citizens now appeals from the District Court's decision. The Tenth Circuit reversed and remanded for reinstatement of the Bankruptcy Judge's decision. The Tenth Circuit concludes that the underlying transactions granted the participants, including the Defendants-Appellees, in the participation agreements sold by Brooke Capital Advisors only unperfected security interests. BCA is a majority-owned subsidiary of the Debtor. The record before the appellate court makes clear -- and neither party disputes the fact -- that Citizens held a perfected security interest in the First Life America Corporation stock. FLAC is another subsidiary of the Debtor. Accordingly, the Tenth Circuit opined, in this priority dispute over the sale proceeds of FLAC, Citizens must win. A full-text copy of the December 8, 2014 Order and Judgment is available at http://bit.ly/1xN6CW1from Leagle.com. About Brooke Corp. Headquartered in Kansas, Brooke Corp. (NASDAQ: BXXX) -- http://www.brookebanker.com-- is an insurance agency and finance company. The Company's revenues are generated from sales commissions on the sales of property and casualty insurance policies, consulting, lending and brokerage services. Brooke Corp. and its affiliate, Brooke Capital Corp. filed for Chapter 11 protection (Bankr. D. Kan. Case No. 08-22786) on Oct. 28, 2008. Angela R Markley, Esq., is the Debtors' in-house counsel. The Debtors disclosed assets of $512,855,000 and debts of $447,382,000. BRUGNARA PROPERTIES IV: Ch. 11 Case Transferred to Judge Montali ---------------------------------------------------------------- Judge Hannah L. Blumensteil of the U.S. Bankruptcy Court for the Northern District of California transferred the Chapter 11 case of Brugnara Properties VI to Judge Dennis Montali. Brugnara Properties VI filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 14-31867) in San Francisco, California, on Dec. 31, 2014, without stating a reason. The Debtor estimated $10 million to $50 million in assets and less than $10 million in debt. The Debtor only filed the Schedule D - Creditors Holding Secured Claims in its Schedules of Assets and Liabilities. Incomplete filings are due Jan. 14, 2015. The Debtor disclosed that Wells Fargo Home Mortgage is owed $6.15 million on a first note secured by the Debtor's property, and Saxe Mortgage Co. is owed $1.7 million on a second note. The meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for Feb. 3, 2015. The deadline for filing claims is May 4, 2015. The Debtor is represented by Erik G. Babcock, Esq., at Law Office of Erik G. Babcock, in Oakland, California. CAESARS ENTERTAINMENT: Gets More Support with Sale by Blackrock --------------------------------------------------------------- William Alden, writing for The New York Times' DealBook, reported that Caesars Entertainment Operating Company, a unit of the heavily indebted casino conglomerate Caesars Entertainment, moved closer to its goal of rallying support among bondholders for its restructuring when BlackRock, the giant asset manager, sold $500 million of first-lien bonds to investors that support the restructuring plan. According to the DealBook, people briefed on the matter who were not authorized to speak publicly said that with the sale, Caesars now has support from holders of close to 60 percent of the first-lien bonds. Caesars, the report said, needs support from at least 60 percent of these bonds by Jan. 13 for the reorganization plan to take effect. 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. As reported by the TCR on Dec. 18, 2014, Fitch Ratings downgraded the Issuer Default Rating (IDR) of Caesars Entertainment Operating Company (CEOC) to 'C' from 'CC'. The downgrade of the IDR to 'C' reflects CEOC's missed $223 million interest payment to the holders of the 10% second lien notes that was due December 15. As reported by the TCR on Dec. 18, 2014, Moody's Investors Service downgraded the ratings of Caesars Entertainment Operating Company, including the corporate family rating, to Ca from Caa3. As reported by the TCR on Dec. 18, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating to 'D' from 'CCC-' on Caesars Entertainment Operating Co. Inc. (CEOC), a majority-owned subsidiary of Caesars Entertainment Corp. "We lowered the rating as a result of the company's decision not to pay approximately $225 million in interest that was due on Dec. 15, 2014 on $4.5 billion of 10% second-priority senior secured notes due 2015 and 2018," said Standard & Poor's credit analyst Melissa Long. CAESARS ENTERTAINMENT: ISDA Takes Default Query to Expert Panel --------------------------------------------------------------- Katy Burne, writing for The Wall Street Journal, reported that the International Swaps and Derivatives Association has sent a query about whether Caesars Entertainment Operating Co. has defaulted to a three-member review panel, a step that takes place only when 80% of voters on the 15-voter ISDA determination panel can't reach an 80% majority on a decision. According to the report, citing the latest figures from the Depository Trust & Clearing Corp., at stake is as much as $1.7 billion in payouts on credit-default swaps outstanding on Caesars. To recall, Caesars Entertainment Corp. in December said its operating unit wouldn't pay $225 million of interest due Dec. 15, on notes maturing in 2015 and 2018. 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, $28.2 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. As reported by the TCR on Dec. 18, 2014, Fitch Ratings downgraded the Issuer Default Rating (IDR) of Caesars Entertainment Operating Company (CEOC) to 'C' from 'CC'. The downgrade of the IDR to 'C' reflects CEOC's missed $223 million interest payment to the holders of the 10% second lien notes that was due December 15. As reported by the TCR on Dec. 18, 2014, Moody's Investors Service downgraded the ratings of Caesars Entertainment Operating Company, including the corporate family rating, to Ca from Caa3. As reported by the TCR on Dec. 18, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating to 'D' from 'CCC-' on Caesars Entertainment Operating Co. Inc. (CEOC), a majority-owned subsidiary of Caesars Entertainment Corp. "We lowered the rating as a result of the company's decision not to pay approximately $225 million in interest that was due on Dec. 15, 2014 on $4.5 billion of 10% second-priority senior secured notes due 2015 and 2018," said Standard & Poor's credit analyst Melissa Long. CALIBRE ACADEMY: Fitch Affirms 'B' Rating on $16.1MM Revenue Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed the 'B' rating on $16.1 million Industrial Development Authority of the County of Pima's education revenue refunding bonds (Carden Traditional Schools project) series 2012. The Rating Outlook is Negative. SECURITY Absolute and unconditional obligation of the borrower (Calibre, or CTS) and the guarantor (E-Institute Charter School, Inc. or EICS), payable from all legally available revenues, and secured by a first lien on facilities owned by the borrower. There is additionally a debt service reserve cash-funded to maximum annual debt service (MADS). Gross revenues of both the borrower and guarantor will flow directly from the state treasurer to the trustee for debt service. KEY RATING DRIVERS NEGATIVE OUTLOOK: The Outlook reflects Calibre's weak financial position and failure to resolve its going concern status. Resolution is expected as a result of improved financial performance due to the entity's reorganization. Despite operating margin improvement, challenges remain in meeting escalating debt service (DS). After receiving charter renewals in mid-2014, academic performance standards were not met in fiscal 2015 making charter revocation a concern. SPECULATIVE-GRADE CHARACTERISTICS: The 'B' rating reflects Calibre's improved but still tenuous financial position which includes a high debt burden, expense growth historically outpacing revenues, lower than anticipated enrollment levels and historical coverage of DS only with substantial, albeit planned, EICS support. ENROLLMENT SHORTFALL: Actual enrollment at Calibre and EICS' campuses is significantly below the school's base case projections. Fitch notes that initial headcount projections were aggressive; however, Calibre's ability to adjust expenditures for a lower headcount could alleviate operating pressure and possibly stabilize performance. MANAGEMENT RESPONSIVENESS IMPROVES: Calibre's last two CFOs left the institution, with the most recent CFO replaced by an outside consulting firm with charter school experience in spring of 2014. Fitch expects Calibre's future responsiveness levels to improve. RATING SENSITIVITIES FAILURE OF FY2015 COVERAGE TEST: The inability to meet the transaction maximum annual debt service (TMADS) coverage test of 1x for the combined entity (Calibre and EICS) in fiscal 2015 may constitute an event of default. Fitch may downgrade the bonds in this case to reflect the increased volatility due to remedies that include an accelerated timeline for bond redemption. PROTRACTED FISCAL IMBALANCE: In Fitch's view, a persistent negative trend in Calibre's operating margins resulting in the continuance of a going concern note from the auditor in fiscal 2015, indicates an intrinsic lack of fiscal stability and would likely result in ratings pressure. Also, balance sheet resources are very limited, providing virtually no offset in the event of continued financial volatility. RELIANCE ON EICS PERFORMANCE: Improvement in EICS operations is essential to the current rating, assuming Calibre's continued weak margins. STANDARD CHARTER RENEWAL RISK: Like all Fitch-rated charter schools, Calibre and EICS are subject to charter renewal risk, which Fitch views as a substantial credit concern. Despite renewal in mid-2014 for both schools, Calibre's academic performance failed to meet standards in fall 2014, which put the school in jeopardy of charter revocation if progress is not demonstrated. CREDIT PROFILE TRANSACTION PARTICIPANT OVERVIEW Calibre serves grades K-8 and includes one school in Surprise, AZ. Calibre's second physical campus in Glendale and its virtual campus were both voluntarily closed in 2014. EICS, the financial guarantor for the rated debt of Calibre, maintains six physical campuses and a virtual campus. The financial statements and charter agreements for both schools each include a fully online campus managed by the schools' education management organization (EMO), Learning Matters Educational Group, Inc. (LMEG). Both Calibre and EICS are authorized by Arizona State Board for Charter Schools (ASBCS, the authorizer) with 15-year terms that expire in 2015 and both were recently renewed for additional 20-year terms. LMEG serves as EMO for both schools and maintains a working relationship with the ASBCS. NEGATIVE OUTLOOK REFLECTS UNCERTAINTY The schools posted transaction MADS (TMADS) coverage of over 1x for the second consecutive year in fiscal 2014 (based on unaudited results) complying with a DS coverage covenant requiring at least 1x coverage of DS. The Negative Outlook reflects Fitch's longer term concern that the consolidated entity continues to post weak results and could encounter problems in achieving legal DS coverage, especially considering the escalating debt service. The covenant compares combined net income available for debt service of Calibre and EICS to MADS, excluding the final year of maturity TMADS. Coverage below 1x could be declared an event of default under terms of the loan agreement by the trustee. The trustee's remedies for events of default include acceleration, receivership, foreclosure, or a suit for judgment. While the declaration is subject to certain loan agreement provisions allowing Calibre and EICS to develop a remedy plan within specified timeframes, in the event of acceleration Fitch views Calibre and EICS as highly unlikely to be able to meet full and immediate payment on the bonds without defaulting. ENROLLMENT BELOW PROJECTIONS; INCREMENTAL GROWTH Calibre and EICS enrolled fewer students in fall of 2014 than originally projected when the bonds were issued. However, after closing the Glendale campus, Calibre's total average daily membership (ADM) improved 9.5% to 726 in fall 2014 when compared to the prior year for Calibre Surprise campus only. Fall 2013 ADM for the Surprise campus surpassed revised projections provided to Fitch. Further, ADM for EICS grew 7.7% to 855 for fall 2014. However, this is lower than revised projects presented during the last review and the original fall 2013 expectations. EICS does not have a waitlist due to its open enrollment policy while Calibre Surprise has a waitlist of about 330 according to LMEG. Calibre and EICS were noted as generally meeting academic requirements by the ASBCS at the point of charter renewal. However, post-renewal there was a drop in Calibre's academic results in fall 2014. Failure to improve academic performance next fall could put the charter in jeopardy of revocation. Calibre was required to submit a Performance Management Plan by Nov. 14, 2014, indicating expectations set forth in the Board's Academic Performance Framework. Additionally, EICS was able to re-classify all of its campuses as alternative, thereby altering the benchmarks used to evaluate performance and more accurately reflect its at-risk population. MARGINS IMPROVE; GOING CONCERN CONTINUES Requirements for a single audit provided the extension of audited fiscal 2014 financials until March 31, 2015. Unaudited consolidated fiscal 2014 margins are strongly positive and improved to 16.5% from 6.3% in fiscal 2013. Calibre's individual performance also improved markedly, from negative 24.8% to negative 4.6%, while EICS's margin weakened slightly to 13.3% from 15.3% in fiscal 2013. Fitch notes that Calibre's ability to increase revenues and curb expense growth should improve debt service coverage over time and lessens the need to depend substantially on EICS for the long term. LMEG implemented several measures to align expenses with revenues. Nonethless, Calibre failed to remedy the going concern situation and meet the financial performance framework standard based on unaudited fiscal 2014 results with respect to growth in net income. Several structural changes have been implemented for fiscal 2015 to mitigate the auditor's going concern note, including closing Calibre's Glendale campus, renting out vacant space, and also realigning student/teacher ratios at the Surprise campus. Combined these modifications are expected to generate net income improvement for fiscal 2015. Fitch will continue to monitor Calibre's progress in meeting the financial performance framework in fiscal 2015 as presented in Calibre's framework response. Failure to do so could negatively impact the rating. LIQUIDITY AND DEBT SERVICE COVERAGE IMPROVE Available funds for Calibre and EICS, on a consolidated basis, covered just 13.7% and 8.3% of operating expenses and debt, respectively. While improved from fiscal 2013, these levels remain very light, which is typical of most charter schools rated by Fitch. Combined TMADS coverage (EICS and Calibre) continues to improve from a weak 0.9x to 1.5x in fiscal 2014. Adjusting for management fees which are subordinate to DS payment, coverage improved to 2.8x in fiscal 2014, up from 1.8x in 2013. Notwithstanding this improvement, Calibre, on its own, is unable to support required TMADS. Fitch notes positively, though, that EICS, as the guarantor of the bonds, will continue to support Calibre's operations. CHESTERFIELD VALLEY: Fitch Raises Rating on $13.21MM Bonds to BB+ ----------------------------------------------------------------- Fitch Ratings has upgraded the following Chesterfield Valley Transportation Development District, MO (the district) bonds: -- $13.21 million series 2006 transportation sales tax revenue bonds to 'BB+' from 'BB'. The Rating Outlook is Stable. SECURITY The bonds are limited obligations payable solely from the net revenues of a 0.375% tax on retail sales within the district, subject to annual appropriation by the district. The sales tax expires February 2031, five years after the final maturity of the bonds. There is also a cash-funded debt service reserve fund (DSRF) with a $2.03 million funding requirement. KEY RATING DRIVERS RECENT SALES TAX IMPROVEMENT: The district's sales tax base has noticeably improved with the opening of two sizeable outlet centers in August 2013 and improvements in the local economy. Collections inherently remain subject to volatility. DSRF RELIANCE: Despite recent improvement, revenue performance remains consistently below expectations at the time of issuance, triggering an intra-year reliance on the cash funded debt service reserve fund for the past five years. The draw in 2014 was significantly smaller than prior draws, and further draws may be eliminated if pledged revenue growth continues. BULLET MATURITY & REQUIRED TURBO: Fitch views the debt structure as generally weak with interest only payment requirements between 2017 and 2025 and a bullet maturity in 2026. Excess revenues would be used for early redemption. HIGH CONCENTRATION: Sales in the district are highly concentrated, with the top 15 payers accounting for 45% of collections. ACCESSIBLE LOCATION: The district encompasses a 7.43 square mile retail corridor along Interstate 64 which caters to the affluent St. Louis County region. RATING SENSITIVITIES REVERSAL OF REVENUE TREND: A notable declining trend in pledged revenue, which Fitch does not expect, would likely result in downward rating pressure. CONTINUED REPAYMENT RISK: Given the risks inherent in the bonds' structure Fitch believes further upward rating movement is unlikely in at least the intermediate term. CREDIT PROFILE The district encompasses a sizable 7.43 square mile area located along a five-mile corridor of Interstate-64 in western St. Louis County. There are currently 697 vendors located within the district. WEAK LEGAL PROVISIONS Fitch views the bond structure as weak. In the event annual revenues exceed debt service requirements, the first $500,000 up to a total of $2 million goes into a future projects account. To date $170,000 has been deposited in this account. Excess sales tax revenues beyond those deposited to the future projects account are to be used to redeem the 2026 bullet via a mandatory redemption feature. Pre-payment of the 2026 bullet is critical to its ultimate repayment, as annual revenues are well below the bullet payment. The bond documents allow for liberal issuance of additional parity and subordinate debt. There is no limitation to the amount of similar subordinate bonds that the district can issue, so repayment of the 2026 bullet could be materially impaired, though management states that is not planning to issue additional similar notes. The district issued subordinate debt twice in the last two years, although neither issuance affects repayment of the Fitch-rated bonds. The district is planning to issue bonds in early 2015 to refund all outstanding notes and bonds. NEW OUTLET MALLS EXPAND TAX BASE The district comprises one of the largest concentrations of big box retailers in the region. The top 15 payers in 2013 account for a high 45% of total sales tax collections. Taxpayer concentration has materially declined with the August, 2013 opening of two large outlet malls operated by Simon Property Group and Taubman. Since the opening of the malls, four stores in the new malls have entered the top 15 payers. The Simon-operated mall is fully leased. The developer has delayed until 2016 plans to add an additional 75,000 square feet of space. The Taubman mall is approximately half vacant but has had several significant recent additions. SALES TAX REBOUND Sales in the district for the first 12 months after the opening of the malls were up 27% versus the prior 12 months. Sales tax revenues for the first nine months of 2014 increased by a robust 21% over same period collections in 2013. The new outlet malls opened in August, 2013 so the 2013 nine-month period includes two months of revenues from the malls. This growth follows increases of 11.2% in 2013, 7.3% in 2012 and 8.5% in 2011. Between fiscals 2007 and 2010, sales tax collections in the district fell by nearly 16%. The decline was mostly attributable to the recession but also due partly to a one month payment lag in 2010, created when the state assumed sales tax collection responsibilities from the city of Chesterfield (the city) in early 2010. Sales tax revenues were insufficient to meet debt service requirements, forcing the district to draw upon the DSRF annually beginning in 2010. Draw-downs covered as much as 24% of the larger April principal and interest payment in those years. In all four years, the DSRF requirement was restored before the end of the year as sales taxes were received and deposits were made per the flow of funds. With improved operations, the 2014 draw was greatly reduced to $55,739 or 3% of debt service. No draw is expected in 2015, after which annual debt service drops significantly until 2026. SATISFACTORY COVERAGE LEVELS ASSUMING NO ADDITIONAL DEBT Assuming no growth in sales tax revenues, Fitch's analyses indicate that pledged revenues and DSRF monies should be more than adequate to cover all debt service requirements assuming no further issuance of subordinate debt, with full payoff in approximately 2020. Under Fitch's stress scenario, sales tax collections could decline by 12% annually over the life of the issue and, with DSRF monies, still meet all debt service requirements. The largest annual revenue decline to date was 7.6% in 2010. WEALTHY, GROWING SERVICE AREA Wealth levels in the city and county are well above state and national averages, and unemployment rates are below them, rebounding from increases during the recent economic downturn. The county supports a diverse economic base, which includes Monsanto and Washington University. The city has several major economic development projects underway, highlighted by significant growth at Mercy, a large health care system headquartered in the city, and the relocation of the headquarters of Reinsurance Group of America. These projects will bring a sizable number of workers to the area, increasing the population of potential shoppers within the district. APPROPRIATION RISK The district is managed by a four-member board consisting of representatives of the city and county. The pledged sales tax is subject to annual appropriation by the district. However, non-appropriation is unlikely as the pledged sales tax cannot be used for non-district purposes. Furthermore, if the district fails to adopt a budget in any year, the prior year's budget will remain in effect. COX & SCHEPP: Court Nixes Summary Judgment Bids in Suit vs. Palmer ------------------------------------------------------------------ Judge J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina entered an order in the adversary proceeding captioned The Official Committee of Unsecured Creditors of Cox & Schepp, Inc. v. Palmer Electric Company, Case No. 14-03023. Judge Whitley: -- denied Palmer's motion for summary judgment as it relates to the Committee's standing; -- granted the Committee's motion for summary judgment as to Section 547(b) of the Bankruptcy Code and denied as to Palmer's; and -- denied both parties' motions for summary judgment as to Section 547(c)(1) and (2). The adversary proceeding seeks to avoid and recover two payments as preferences under Sections 547 and 550. Debtor Cox & Schepp contracted with Quest Diagnostics Clinical Laboratories, Inc. to complete a number of projects throughout Florida (the Quest Projects). In turn, Cox & Schepp contracted with Palmer to complete electrical work on three of the buildings part of the Quest Projects. Of those three, two required Cox & Schepp to pay Palmer within seven days of receipt of payment by Quest. The third required Cox & Schepp to pay Palmer within 25 days of invoice by Cox & Schepp to Quest. Palmer prospectively executed waivers surrendering any right to file liens against the improved properties in exchange for payment. The Committee filed the adversary proceeding to recover the latter two payments, totaling $36,686, as they were made within 90 days of Cox & Schepp filing bankruptcy on January 5, 2012. After engaging in limited discovery, both parties moved for summary judgment. A full-text copy of the Order dated December 8, 2014, is available at http://bit.ly/1HK7GeNfrom Leagle.com. About Cox & Schepp Cox & Schepp, Inc. filed a Chapter 11 bankruptcy petition (Bankr. W.D.N.C. Case No. 12-30019) on January 5, 2012. The Debtor was a large general contractor primarily involved in commercial construction. Founded in 2001, Cox Schepp has been involved in some notable projects, including Ballantyne Corporate Park, which has been on a construction spree, the new apartment complex 1225 South Church and the Charlotte Trolley Museum in South End. DATAPIPE INC: S&P Retains 'B' Rating on Proposed $23MM Debt Add-On ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'B' issue-level rating and '3' recovery rating on Datapipe Inc.'s senior secured first-lien credit facility remain unchanged following the company's proposed $23 million add-on, which will increase the credit facility's total amount to approximately $330 million. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; mid-end of the range) in the event of a payment default. S&P expects the company to use the proceeds for acquisitions. The 'B' corporate credit rating and stable outlook on Datapipe remain unchanged. S&P continues to expect that adjusted leverage will decline to below 7x in 2015, benefiting from organic EBITDA growth and potential acquisitions. Under S&P's base-case scenario, it expects that the company will continue to generate negative free operating cash flow in 2015, while maintaining "adequate" liquidity due to availability under its $52 million revolving credit facility and modest cash balances. S&P do not expect any revisions to existing covenant levels as a result of the proposed transaction. S&P expects that the company will maintain adequate headroom against these covenants pro forma for any potential acquisitions. RATINGS LIST Datapipe Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged Datapipe Inc. Senior secured first-lien credit facility B Recovery Rating 3 DAVID DRUMM: Ex-Anglo Irish Banker Can't Ditch $11MM in Debt ------------------------------------------------------------ Sara Randazzo, writing for Daily Bankruptcy Review, reported that Judge Frank Bailey of U.S. Bankruptcy Court in Boston ruled that David Drumm, the former chief executive of the failed Anglo Irish Bank Corp., can't shake $11 million in debt using U.S. bankruptcy laws, after finding that he is "not remotely credible" and repeatedly lied to the court about his finances. According to the report, in a blistering, 122-page opinion, Judge Bailey said Mr. Drumm doesn't deserve the protection of bankruptcy because of what appears to be an intentional ploy to protect some of his assets from creditors. Mr. Drumm filed for bankruptcy in 2010 to avoid paying back more than $11 million in loans to his former employer, which had sued him to collect the money, the report related. DEB STORES: Files Schedules of Assets and Liabilities ----------------------------------------------------- Deb Stores Holding LLC filed with the Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, and statement of financial affairs, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $99,658,325 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims ----------- ----------- TOTAL $0 $99,658,325 A full-text copy of the amended schedules is available for free at http://is.gd/eroCnk 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 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 (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. DETROIT, MI: Board Votes to Send State Money to Pension Funds ------------------------------------------------------------- Reuters reported that a Michigan board agreed to send nearly $195 million in state funds to Detroit's two retirement systems on Feb. 9, 2015, as part of a pivotal deal that helped to end the city's historic bankruptcy, a state spokesman said. According to the report, Jeremy Sampson, a spokesman for Michigan's Treasury Department, said the three-member Michigan Settlement Administration Authority took the action after the city's bankruptcy reached certain triggers, including the dismissal of legal claims against the state that were related to the bankruptcy. The state funds are part of the so-called grand bargain, which includes $366 million from philanthropic foundations and $100 million from the Detroit Institute of Arts pledged over 20 years to ease cuts to pensions for Detroit retirees and save artwork from being sold to pay city creditors, the report related. About the City of Detroit The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit estimated more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. The TCR, on Dec. 18, 2014, reported that Detroit has filed a notice that the effective date of its bankruptcy-exit plan occurred on Dec. 10, 2014. U.S. Bankruptcy Judge Steven Rhodes on Nov. 12, 2014, entered an order confirming the Eighth Amended Plan for the Adjustment of Debts of the City of Detroit. DUNE ENERGY: Obtains Forbearance Extension From Lenders ------------------------------------------------------- Dune Energy, Inc., on Jan. 5, 2015, entered into an Amended and Restated Forbearance Agreement and Fifth Amendment to the Amended and Restated Credit Agreement effective as of Dec. 31, 2014, among the Company, certain of the lenders party to the Amended and Restated Credit Agreement dated as of Dec. 22, 2011, as amended, and Bank of Montreal as administrative agent for the Lenders. As previously reported, the Company determined that it did not meet the required Total Debt to EBITDAX ratio under the Credit Agreement for the four immediately preceding quarters ending June 30, 2014, and Sept. 30, 2014. The Company also informed the Lenders that it was unable to comply with the minimum current ratio requirement in the Credit Agreement as of Sept. 30, 2014. The Credit Agreement provides that the failure to observe any financial covenant will constitute an event of default, and Bank of Montreal, at the request of the majority Lenders, may terminate the commitments under the Credit Agreement and cause all of the Company's obligations under the Credit Agreement to immediately become due and payable, upon notice to the Company. On Sept. 30, 2014, the Lenders agreed to provide a limited forbearance from exercising their rights and remedies pursuant to the Defaults through Dec. 31, 2014, pursuant to the terms of the Fourth Amendment to Amended and Restated Credit Agreement. Under the terms of the Amendment, the Lenders agreed to extend the limited forbearance from Dec. 31, 2014, until the business day immediately following the earliest of: (a) the occurrence of any other default or event of default under the Credit Agreement; (b) 5:00 p.m. CST, Jan. 16, 2015, unless the Company has delivered to the Administrative Agent certain documents that demonstrate that the contemplated transactions with EOS Petro, Inc. and payment in full of the amounts owed under the Credit Agreement are reasonably likely to be consummated timely in the opinion of the Administrative Agent, in its sole discretion; (c) subsequent to the delivery of Acceptable Transaction Documents, abandonment or termination of the Agreement and Plan of Merger, dated as of Sept. 17, 2014, by and among EOS Petro, Inc., EOS Merger Sub, Inc. and Dune Energy, Inc., or the occurrence of any modification, amendment or express waiver or consent to the Merger Agreement that would result in not paying the amounts owed under the Credit Agreement in full, without the prior written consent of the Lenders; (d) failure to deliver the documents by the deadlines set forth in section 10.3 of the Amendment and (g) Jan. 31, 2015. Additionally, under the terms of the Amendment, the Company's borrowing base will be maintained at $40,000,000 during the forbearance period and interest payments will be due Jan. 2, 2015, Jan. 31, 2015, and thereafter the last day of each calendar month. All commitments of the Lenders under the Credit Agreement will terminate on Jan. 31, 2015, without further notice. About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. Dune Energy reported a net loss of $47.0 million in 2013, a net loss of $7.85 million in 2012 and a net loss of $60.4 million in 2011. As of June 30, 2014, the Company had $231 million in total assets, $143 million in total liabilities and $88.4 million in total stockholders' equity. Going Concern "We monitor our financial progress very carefully and attempt to adjust our available projects in order to meet all of the covenants of the Credit Agreement. Notwithstanding these efforts, our future revolver availability is also driven by the amount of Notes outstanding, as they are part of the EBITDAX covenant calculation used to determine our borrowing limit under the revolver. As a result of the PIK feature contained in the Notes, the amount outstanding has increased over time and, therefore, continues to put pressure on the EBITDAX covenant and limit borrowing availability. As we are no longer in compliance with the financial covenant of the Credit Agreement, additional borrowings may not permitted, and the outstanding revolver loans may become due and payable upon notice to us by the Bank of Montreal. Absent relief from the Credit Agreement Lenders, the restructuring of a material portion of the Notes or the emergence of a new lender, our ability to meet our obligations in due course is threatened. Management is currently in discussions with all parties and seeking new credit providers or other strategic alternatives in an effort to resolve this liquidity stalemate. "These and other factors raise substantial doubt about our ability to continue as a going concern for the next twelve months," the Company stated in the Form 10-Q Report for the period ended June 30, 2014. EDUCATION MANAGEMENT: Moody's Lowers Default Rating to D-PD ----------------------------------------------------------- Moody's Investors Service, changed Education Management LLC's Probability of Default Rating ("PDR") to D-PD from Caa3-PD. The rating action was taken to reflect the company's recent debt-for-equity exchange of the majority its debt. On January 5, 2015, Education Management announced that it has closed on a restructuring transaction, whereby company's rated $1.3 billion of senior secured credit facilities, comprising approximately $220 million outstanding on its revolver and $1.09 billion of term loans, have been exchanged for two first lien term loans totaling $400 million due 2020 and for a combination of preferred equity and warrants for common stock. Most of the remaining balance of the company's existing debt, $217 million of senior cash pay/PIK notes due 2018 (not rated by Moody's), has been exchanged for preferred equity. Moody's views these transactions as a distressed exchange. The PDR of D-PD signifies that the distressed exchange qualifies as a default under Moody's definition of default, which is intended to capture events whereby issuers fail to meet debt service obligations outlined in their original debt agreements. Moody's does not currently rate the debt in the company's new capital structure. All existing ratings will be withdrawn in three business days. Downgrades: Issuer: Education Management LLC Probability of Default Rating, Downgraded to D-PD from Caa3-PD 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. Education Management LLC, an indirect subsidiary of Education Management Corporation based in Pittsburgh, Pennsylvania, is one of the largest providers of private post-secondary education in North America. EGENIX INC: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Egenix, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 14-12818) on Dec. 28, 2014, estimating its assets at between $500,000 and $1 million and liabilities at between $1 million and $10 million. The petition was signed by Lionel Goldfrank, III, chairman of the board of directors. David R. Hurst, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA, serves as the Debtor's bankruptcy counsel. Carl D. Neff, Esq., at Fox Rothschild LLP, wrote in the Delaware Bankruptcy Litigation that since its bankruptcy filing, the Debtor has filed, among other things: (i) a motion to authorize continued use of existing bank account; (ii) business forms and its creditor matrix and a list of its top 20 creditors; (iii) a motion to appoint Donlin, Recano and Company as the Debtor's claims agent; and (iv) the Declaration of William T. Nolan in support of Chapter 11 petitions and first day pleadings, which says that "[t]he Debtor's ultimate goal in this Chapter 11 case is to create a sustainable capital structure for the future that maximizes the value of the Debtor's estate for the benefit of all of the Debtor's constituents." The Debtor announced on Dec. 18, 2014, that Lionel Goldfrank III was elected Chairman of the Board, to succeed Donald Fresne. Mr. Fresne resigned as President and CEO, but will continue as a member of the Board. The Board designated Mr. Fresne as Chairman Emeritus. The Board established a Search Committee to find a suitable replacement with Biotech industry expertise and relevant management experience. Headquartered in LaGrangeville, New York, Egenix, Inc., is a privately held biotechnology company focused on developing innovative cancer therapeutics. EMPIRE RESORTS: Commences $50 Million Rights Offering ----------------------------------------------------- Empire Resorts, Inc., has commenced a rights offering for approximate gross proceeds of $50,000,000. Empire has granted, at no charge to the holders of record of its common stock and Series B Preferred Stock on Jan. 2, 2015, the record date for the rights offering, one non-transferable subscription right for each 5.6 shares of common stock owned, or into which the Series B Preferred Stock is convertible, as more fully described in the prospectus supplement relating to the rights offering. Each subscription right entitles the holder to purchase one share of common stock at a subscription price of $7.10 per share. In addition, holders of subscription rights who fully exercise their basic subscription rights are entitled to oversubscribe for additional shares of common stock up to the number of shares purchased pursuant to the exercise of their basic subscription rights. The subscription offering is expected to expire at 5:00 p.m., New York City time, on Feb. 2, 2015, subject to extension or earlier termination. The Company will not issue subscription rights to acquire fractional shares of its common stock but rather will round down the aggregate number of shares for which holders may subscribe to the nearest whole share. The Company has entered into a standby purchase agreement with Kien Huat Realty III Limited, the Company's largest stockholder, whereby Kien Huat agreed to exercise in full its basic subscription rights within ten days of its grant with a closing proximate thereto. In addition, Kien Huat agreed it would exercise all rights not otherwise exercised by the other holders in the rights offering. The Company will pay Kien Huat a backstop fee of $250,000 pursuant to the standby purchase agreement. In addition, the Company will reimburse Kien Huat for its expenses related to the standby purchase agreement in an amount not to exceed $40,000. The consummation of the transactions contemplated by the standby purchase agreement is subject to customary closing conditions. The net proceeds of the offering will be used for the expenses relating to the Company's pursuit of a gaming facility license pursuant to the recent selection of Montreign Operating Company, LLC, a wholly-owned subsidiary of the Company, by the New York State Gaming Facility Location Board to apply for a gaming facility license for a proposed destination gaming resort in Sullivan County, New York. If the Company is not awarded a gaming facility license, the remaining portion of the proceeds of the offering will be used in its on-going operations. Shareholders who hold their shares directly will receive a prospectus, together with a letter from the Company describing the rights offering, a subscription rights certificate and an IRS Form W-9. Those wishing to exercise their rights should review all materials, properly complete and execute the subscription rights certificate and deliver it and payment in full to the subscription agent: Continental Stock Transfer & Trust Company 17 Battery Place, 8th Floor New York, NY 10004 Attn: Corporate Actions Department Telephone Number for Confirmation: (917) 262-2378 Holders of subscription rights whose shares are held in street name through a broker, custodian bank or other nominee must instruct their broker, custodian bank or nominee whether or not to exercise subscription rights on their behalf. Those wishing to obtain a separate subscription rights certificate should promptly contact their broker, custodian bank or other nominee with that request, although it is not necessary to have a physical subscription rights certificate to elect to exercise rights if shares are held in street name. A copy of the prospectus or further information with respect to the rights offering may be obtained by contacting Morrow & Co, LLC, the Information Agent. Stockholders may contact Morrow & Co., LLC by telephone at (855) 201-1081 and banks and brokerage firms by telephone at (203) 658-9400. Morrow & Co., LLC may also be reached by email at empire.info@morrowco.com. About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. Empire Resorts reported a net loss applicable to common shares of $27.05 million in 2013 following a net loss applicable to common shares of $2.26 million in 2012. The Company's balance sheetat Sept. 30, 2014, showed $42.4 million in total assets, $56.7 million in total liabilities and a $14.3 million total stockholders' deficit. ENDEAVOUR INT'L: Noteholders File Precautionary Motion re RSA ------------------------------------------------------------- BankruptcyData reported that Endeavour International's ad hoc consortium of convertible noteholders filed with the U.S. Bankruptcy Court a precautionary motion for relief in aid of the Court's previous order authorizing the Debtors to assume a restructuring support agreement and modifying automatic stay. According to the report, the noteholders asserted that "The RSA provides that the Debtors' pre-petition secured creditors will receive, among other things, approximately 83% equity stake in the reorganized company. The Convertible Noteholders will, in contrast, receive an 8.24% equity stake. Given this large disparity in equity allocations, when negotiating the RSA, the Consortium was particularly concerned that a small number of pre-petition secured creditors would control the reorganized company, and could use their control to inhibit the Convertible Noteholders (as minority shareholders) from realizing the economic benefit of their bargain. The Consortium therefore bargained for the inclusion in the RSA of the follow important terms: The Convertible Noteholders shall also receive customary minority stockholder protections as reasonably agreed to among the RSA Creditor Parties....Herein, to provide for the possibility that the parties to the RSA will fail to achieve consensus, the Consortium asks the Court to: (i) reserve for potential adjudication at the confirmation hearing the issue of what specific 'customary minority stockholder protections' are due to Convertible Noteholders under the RSA; (ii) authorize further briefing and presentation regarding specific points of disagreement; and (iii) ultimately sustain the Consortium's interpretation of 'customary minority stockholder protections,' as presented in such subsequent briefing." About Endeavour International Houston, Texas-based Endeavour International Corporation (OTC: ENDRQ) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. On Oct. 10, 2014, Endeavour International and five affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code after reaching a restructuring deal with noteholders. The cases are pending joint administration under Endeavour Operating Corp.'s Case No. 14-12308 before the Honorable Kevin J. Carey (Bankr. D. Del.). As of June 30, 2014, the Company had $1.55 billion in total assets, $1.55 billion in total liabilities, $43.7 million in series c convertible preferred stock, and a $41.5 million stockholders' deficit. The Debtors have tapped Weil, Gotshal & Manges LLP as counsel; Richards, Layton & Finger, P.A., as co-counsel; The Blackstone Group L.P., as financial advisor; AlixPartners, LLP, as restructuring advisor; and Kurtzman Carson Consultants LLC, as claims and noticing agent. EXIDE TECH: Enters Into Backstop Agreement With Noteholders ----------------------------------------------------------- Exide Technologies on Jan. 7 disclosed that certain holders of its senior secured notes have executed a commitment to backstop up to $160 million of second lien convertible notes to be offered to certain senior secured noteholders pursuant to a rights offering under Exide's proposed plan of reorganization ("POR"). Holders of a majority of the principal amount of Exide's senior secured notes also entered into an amended and restated plan support agreement memorializing their support for the Company's proposed POR. The proposed POR contemplates de-leveraging the Company by approximately $600 million to provide for an "as converted" net leverage ratio of approximately 2.0 times. The POR also includes a rights offering to certain holders of senior secured notes (together with oversubscription rights) of up to $175 million in second lien convertible notes, which, as noted, is backstopped up to $160 million pursuant to the Backstop Commitment Agreement. The POR would allow Exide to emerge from Chapter 11 substantially in its current form -- operating across all of its existing business segments. Proceeds from the rights offering, together with availability under a new exit revolving credit facility, are expected to provide the Company with estimated pro forma liquidity at exit of at least $225 million and be used to fund the Company's five-year business plan after emergence. This funding will provide the Company with liquidity and working capital to support its seasonality and business growth; capital improvements; and environmental, health and safety investments. The obligations of the Backstop Parties under the Backstop Commitment Agreement and the Second Amended PSA are subject to the Bankruptcy Court's approval and certain other conditions. Should the proposed POR not be consummated, the Company has been informed by holders of a majority of its post-petition term loans that they intend to pursue an acquisition of all or substantially all of the Company's assets through an alternative credit bid transaction. Similar to the proposed POR, this transaction would result in $175 million of new money invested in the Company and the Company operating in its current form -- across all of its existing business segments. Concurrently, in the exercise of its fiduciary duties, Exide continues to pursue a sale process, soliciting third-party bids for a potential sale of some or all of its businesses. This dual-track approach ensures that the Company has explored all opportunities reasonably available to maximize estate value. Additionally, with the Backstop Commitment Agreement now executed, Exide and certain of the Backstop Parties intend to continue negotiations with representatives of the Official Committee of Unsecured Creditors concerning the treatment of unsecured creditor claims under the POR. "Securing a commitment for the substantial new capital contemplated by the backstop agreement is a significant, positive development in our restructuring process. The new investment of capital will enable Exide to substantially invest in its facilities and new areas for growth. The backstop is a strong endorsement of the Exide business and going-forward plan by the Company's senior secured creditors," said Robert M. Caruso, President and Chief Executive Officer of Exide Technologies. "I thank our customers and suppliers for their continued loyalty and acknowledge our employees for their hard work as we focus on the completion of our restructuring process and begin a new era for Exide as a better capitalized company for growth," said Mr. Caruso. Exide will seek to have a motion heard by the Bankruptcy Court for approval of the Backstop Commitment Agreement and Second Amended PSA on January 20, 2015, or the next available date as the Bankruptcy Court will hear the matter. The Company intends to continue the hearing on the adequacy of its Disclosure Statement for its proposed POR, currently scheduled for January 12, 2015, to the date the Bankruptcy Court sets for hearing on the approval of the Backstop Commitment Agreement and Second Amended PSA. As part of this process, Exide intends to request a modification of its Debtor-in-Possession (DIP) Financing to address the January 15, 2015 disclosure statement approval deadline and anticipates that requisite DIP Financing lenders will consent to such modification. The Company's goal remains that its U.S. operations emerge from Chapter 11 restructuring by March 31, 2015. 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. * * * In November 2014, the Bankruptcy Court terminated Exide Technologies' exclusive period to propose a Chapter 11 plan. The Court ordered that any party-in-interest, including the Official Committee of Unsecured creditors may file and solicit acceptance of a Chapter 11 Plan. Exide already has a plan of reorganization in place. Under that Plan, (a) Reorganized Exide's debt at emergence will comprise: (i) an estimated $225 million Exit ABL Revolver Facility; (ii) $264.1 million of New First Lien High Yield Notes; (iii) $283.8 million of New Second Lien Convertible Notes. The Debtor's non-debtor European subsidiaries are also expected to have approximately $23 million; (b) The New Second Lien Convertible Notes will be convertible into 80% of the New Exide Common Stock on a fully diluted basis; and (c) New Exide Common Stock would be allocated as follows: 15.0% to Holders of Senior Secured Note Claims after conversion of the New Second Lien Convertible Notes into New Exide Common Stock; 3.0% on account of the DIP/Second Lien Conversion Funding Fee; and 2.0% on account of the DIP/Second Lien Backstop Commitment Fee. Exide has entered into an amended and restated plan support agreement with holders of a majority of the principal amount of its senior secured notes. A full-text copy of the Disclosure Statement dated Nov. 17, 2014, is available at http://bankrupt.com/misc/EXIDEds1117.pdf In December 2014, Judge Kevin Carey denied the request of Exide shareholders for appointment of an official equity holders' committee. The shareholders have objected to the Plan. EXIDE TECHNOLOGIES: Panel, U.S. Trustee Object to Disclosures ------------------------------------------------------------- The Official Committee of Unsecured Creditors; Roberta A. DeAngelis, U.S. Trustee for Region 3, Praxair, Inc., and the Lower Willamette Group Members, object to the disclosure statement explaining Exide Technologies' plan of reorganization. The U.S. Trustee complains that in its as-filed form, the Disclosure Statement does not provide parties in interest with sufficient information to enable them to make an informed judgment about the Plan. Among other things, (a) "Retail" holders of Senior Notes (those who are neither accredited investors nor institutional investors), holders of General Unsecured Claims, and holders of Subordinated Notes Claims cannot ascertain their proposed treatment under the Plan; (b) Retail holders of Senior Notes cannot assess the fairness of their proposed treatment under the Plan in comparison to the Plan's treatment of non-retail holders of the same Senior Notes; (c) The Disclosure Statement does not provide adequate valuation information; (d) The Disclosure Statement does not contain a liquidation analysis setting forth what creditors would receive in a liquidation under chapter 7 as compared to the Plan, so that creditors may judge whether the Plan is in their best interests. Law360 reported that the Creditors' Committee argued that the Disclosure Statement describes a "patently unconfirmable" plan that was proposed in bad faith because the debtor only negotiated with certain secured noteholders who the committee claims will get all the company's value. Praxair, a supplier of oxygen to the Debtor, complains that the Disclosure Statement fails to provide adequate information to inform Praxair about the treatment of their long term supply agreement as executory contracts or otherwise. Praxair adds that the Disclosure Statement fails to provide adequate information relating to the risks and consequences to the estate if the Debtor is unable to secure its future source of oxygen. The Lower Willamette Group Members composed of Chevron U.S.A. Inc., Texaco Downstream Properties, Inc., Union Oil Company of California, complains that while the Disclosure Statement and the Plan reference certain sites where the Debtor faces environmental liability, such as the Debtor's Vernon, California, facility, the Portland Harbor Superfund Site is not mentioned, nor is there any discussion of specific assets, like environmental insurance policies, which may be available to pay for their claims. According to the Members, they signed agreements with the United States Environmental Protection Agency to conduct the remedial investigation and feasibility study of the Portland Harbor Site, and/or have contributed financially to the investigation and study. The Debtor has been identified as a "potentially responsible party" at the Portland Harbor Site. As previously reported by the TCR, Frank Smith and Michael Nelson, two senior bondholders of Exide, took issue with the battery maker's disclosure statement, saying it supports an unconfirmable Chapter 11 plan that improperly favors certain creditors. Praxair Inc. is represented by: Natasha M. Songonuga, Esq. GIBBONS P.C. 1000 N. West Street, Suite 1200 Wilmington, DE 19801-1058 Tel: (302) 295-4875 Fax: (302) 295-4876 E-mail: nsongonuga@gibbonslaw.com The Lower Willamette Group Members are represented by: Carl N. Kunz, Esq. MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 P.O. Box 2306 Wilmington, DE 19899-2306 Tel: (302) 888-6800 Fax: (302) 571-1750 E-mail: ckunz@morrisjames.com - and - Gerald F. George, Esq. Andrew D. Patterson, Esq. DAVIS WRIGHT TREMAINE LLP 505 Montgomery Street, Suite 800 San Francisco, CA 94111-6533 Tel: (415) 276-6526 Fax: (415) 276-6599 E-mail: geraldgeorge@dwt.com andrewpatterson@dwt.com 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. FEDERAL RESOURCES: Seeks Joint Administration of Cases ------------------------------------------------------ Federal Resources Corporation ask the U.S. Bankruptcy Court for the District of Utah, Central Division, to enter an order for joint administration of the Chapter 11 case captioned In re Camp Bird Colorado, Inc., Case No. 14-33428, so that it will be jointly administered with Federal Resources' bankruptcy case under Case No. 14-33427. According to Federal Resources, transferring the Camp Bird Bankruptcy Case and joint administering it with the Federal Resources Bankruptcy Case is appropriate because, among other things, (i) similar issues and common creditors exist in both cases, and (ii) joint administration will save time and expense as it will eliminate the need for duplicative notices, applications, and orders. The Debtor currently has only two assets: (1) 100% of the stock of Camp Bird Colorado, Inc., and (2) 100% interest in a Madawaska Mines Limited. Camp Bird joins in Federal Resources' request for joint administration. Federal Resources Corporation and Camp Bird Colorado, Inc., filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code on Dec. 29, 2014, with the U.S. Bankruptcy Court for the District of Utah (Salt Lake City). The Debtors are represented by David E. Leta, Esq., and Andrew V. Hardenbrook, Esq., at Snell & Wilmer L.L.P. FIRED UP: Wins Confirmation of Reorganization Plan -------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that a bankruptcy judge in Austin, Texas, has signed an order confirming the Chapter 11 plan of reorganization proposed jointly by the Johnny Carino's chain of Italian-themed restaurants and its Official Committee of Unsecured Creditors. According to the report, the plan, which will become effective Feb. 1, centered upon a settlement among the company, committee, secured creditor FRG Capital LLC, and members of the president's family. Under the compromise, the company will pay at least $4.48 million to fund a trust created for the benefit of general unsecured creditors, the report said. As previously reported by The Troubled Company Reporter, the Plan was accepted by an overwhelming majority of creditors. Under the plan, all secured and priority creditors will receive 100% of their claims unless they have voluntarily agreed to take a reduced amount. Unsecured creditors will receive an estimated 25% to 30%. About Fired Up, Inc. Fired Up, Inc., the Austin, Texas-based owner and operator of the Johnny Carino's Italian restaurant chain, sought Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 14-10447) on March 27, 2014, in Austin. The Debtor is represented by attorneys at Barron & Newburger, P.C., in Austin. It estimated assets and debt of $10 million to $50 million. As of the bankruptcy filing, Fired Up had 2,900 employees and owned and operated 46 company-owned stores known as Johnny Carino's Italian in seven states (Texas, Arkansas, Colorado, Louisiana, Idaho, Kansas and Missouri) and 61 franchised or licensed locations in 17 states and four other countries (Bahrain, Dubai, Egypt and Kuwait). The company began its own "out of court" reorganization in the last quarter of 2013 by closing 20 unprofitable restaurants. The company later opted to seek bankruptcy protection to tie up the "loose ends" of its self-imposed "reorganization" that did not appear capable of being tied up without litigation. In particular, the provisions of the Bankruptcy Code with respect to the rejection of burdensome leases and the ability to propose and pay out its debts pursuant to a Plan without piecemeal prosecution by random uncooperative creditors undermining same were particularly attractive. For the fiscal year ending June 27, 2012, the company reported total revenues of $125.7 million, net income of $614,000, and guest counts of 8.6 million. For the fiscal year ending June 26, 2013, the company reported total revenues of $120.8 million, a net loss of $5.9 million, and guest counts totaling 8.5 million. The Debtor disclosed $10,360,877 in assets and $36,139,375 in liabilities. Creed Ford III is the majority shareholder and has served as president and CEO since 2008. Mr. Ford and Norman J. Abdallah formed Fired Up in 1997 for the purpose of acquiring the then six- unit Johnny Carino's Italian Kitchen chain from Brinker International, Inc. The U.S. Trustee appointed a seven-member Official Committee of Unsecured Creditors. The Committee tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and FTI Consulting, Inc. as its financial advisor. FIRST MARINER: Dennis Finnegan Joins Howard Bank as Vice President ------------------------------------------------------------------ Joanna Sullivan, Editor-in-Chief of Baltimore Business Journal, reports that First Mariner Bank executive Dennis Finnegan has joined Howard Bank as its new executive vice president and chief deposit officer, responsible for its 13 branches, marketing, deposit operations and human resources. Business Journal relates that Mr. Finnegan had been executive vice president for retail banking at the almost $1 billion-asset First Mariner, mostly under former CEO Edwin F. Hale Sr., for more than 15 years. The report says that Mr. Finnegan worked with the bank's new management on its transition. According to Business Journal, First Mariner was sold in June 2014 after its parent company, First Mariner Bancorp, filed for Chapter 11 bankruptcy protection in February 2014. Business Journal recalls that investors group RKJS Bank won a bankruptcy auction in April 2014 after outlasting a run by National Penn Bancshares. RKJS Bank, says the report, closed the deal in June 2014 for $18.7 million after it received regulatory approval. The report states that RKJS Bank put a total of $110 million into First Mariner to recapitalize it. FOUR OAKS: 2 Directors Tender Mandatory Resignation --------------------------------------------------- Percy Y. Lee and William J. Edwards resigned as members of the Board of Directors of Four Oaks Fincorp, Inc., on Dec. 31, 2014. Messrs. Lee and Edward's resignations were in accordance with the Company's Director Agreement, which imposes a mandatory director resignation by Dec. 31, 2014, for each director who was appointed prior to Nov. 15, 2004. About Four Oaks Based in Four Oaks, North Carolina, Four Oaks Fincorp, Inc., is the bank holding company for Four Oaks Bank & Trust Company. The Company has no significant assets other than cash, the capital stock of the bank and its membership interest in Four Oaks Mortgage Services, L.L.C., as well as $1,241,000 in securities available for sale as of Dec. 31, 2011. Four Oaks reported a net loss of $350,000 in 2013, a net loss of $6.96 million in 2012 and a net loss of $9.09 million in 2011. As of Sept. 30, 2014, the Company had $838 million in total assets, $798 million in total liabilities and $40.1 million in total shareholders' equity. Written Agreement "In late May 2011, the Company and the Bank entered into a formal written agreement (the "Written Agreement") with the Federal Reserve Bank of Richmond (the "FRB") and the North Carolina Office of the Commissioner of Banks (the "NCCOB"). Under the terms of the Written Agreement, the Bank developed and submitted for approval, within the time periods specified, plans to: * revise lending and credit administration policies and procedures at the Bank and provide relevant training; * enhance the Bank's real estate appraisal policies and procedures; * enhance the Bank's loan grading and independent loan review programs; * improve the Bank's position with respect to loans, relationships, or other assets in excess of $750,000, which are now or in the future become past due more than 90 days, are on the Bank's problem loan list, or adversely classified in any report of examination of the Bank; and * review and revise the Bank's policy regarding the Bank's allowance for loan and lease losses and maintain a program for the maintenance of an adequate allowance. A material failure to comply with the terms of the Written Agreement could subject the Company to additional regulatory actions and further restrictions on its business. These regulatory actions and resulting restrictions on the Company's business may have a material adverse effect on its future results of operations and financial condition," the Company said in its quarterly report for the period ended March 31, 2014. FREEDOM INDUSTRIES: FBI Says Co. Knew of Containment Problems ------------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, reported that federal investigators say Freedom Industries Inc., the company responsible for a chemical leak that contaminated the water supply for 300,000 people in West Virginia last year, knew about problems at its storage facility for more than a decade. According to the report, in a document unsealed in federal court, the Federal Bureau of Investigation said employees at Freedom were aware of problems at its storage tanks and containment area, including cracks in the dike wall, going back to 2001. Mortar had eroded, allowing liquids to leak at various spots along the dike wall, according to FBI agent James F. Lafferty II, the report related. About Freedom Industries Freedom Industries Inc., is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, 2014, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. GBG RANCH: Dismissal Bid Dropped; Debtor Required to File Plan -------------------------------------------------------------- The U.S. Bankruptcy Court approved an agreement reached by GBG Ranch, Ltd., to resolve Guillermo Benvidez Z.'s motion to dismiss GBG's Chapter 11 case. The agreement provides that, among other things: -- that portion of the motion seeking dismissal of the Debtor's main case is withdrawn; -- all rights are reserved under the motion to seek appointment of a Chapter 11 trustee; -- the remainder of the motion will be abated until further order of the Court; -- the Debtor agrees to file and pursue confirmation of a plan of reorganization which provides for the disposition of all assets of the Debtor, including but not limited to real and personal property; -- the Debtor agrees, upon the liquidation and payment of all allowed claims, payments of all allowed costs and expenses of administration, and the disposition and resolution of all competing claims asserted in Adversary No. 14-05006, the remainder of the sales proceeds and other cash in the possession of the debtor will then be paid out of the estate to the equity interest holders of the Debtor in accordance with their ownership as of the Petition Date. After the payment of all allowed claims, settlement of the GBG Ranch trust, liquidation of the Hill Fee Tracts, and liquidation of all personal property and accounts receivable of the Debtor, the Debtor will wound down in accordance with applicable Texas Law. An auction was conducted and Guillermo Benavides Z was named winning bidder, and Rancho Melinda named back up bidder. The hearing on the disclosure statement is scheduled for Feb. 27, at 10:00 a.m., objection deadline is Feb. 15. About GBG Ranch GBG Ranch, LTD, a Texas Limited Partnership, sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 14-50155) in Laredo, Texas on July 8, 2014, without stating a reason. In a schedules filed Dec. 9, 2014, the Debtor disclosed $54,111,258 in assets and $4,401,493 in liabilities as of the Chapter 11 filing. The company is represented by the Law Office of Carl M. Barto. Leslie M. Luttrell and the Luttrell + Villareal Law Group serve as special counsel. GLOBAL COMPUTER: Committee Can File Liquidating Plan ---------------------------------------------------- The Bankruptcy Court terminated Global Computer Enterprises, Inc.'s exclusive periods to file and solicit acceptances for the chapter 11 plan as to the Official Committee of Unsecured Creditors only. The Committee said it intends to file a Chapter 11 plan of liquidation. The Committee said it has conferred with the Debtor regarding the motion, and the Debtor has consented to termination of the exclusive periods with respect to the Committee only. About Global Computer Global Computer Enterprises, Inc., dba GCE, is a cloud-based "software as a service" provider, commonly referred to as a "SAAS," offering financial management solutions primarily to executive departments of the federal government and independent federal government agencies. GCE sought protection under Chapter 11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer. The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP, in McLean, Virginia. The Debtor's financial advisor is Weinsweig Advisors. The petition was signed by Mike Freeman, interim chief operating officer. Judge Mayer designated Mike Freeman to perform duties imposed upon GCE by the Bankruptcy Code. The U.S. Trustee for Region 4 appointed three creditors of Global Computer Enterprises, Inc. to serve on the official committee of unsecured creditors. The Committee tapped Armstrong Teasdale LLP, as its counsel and Leach Travell Britt PC as its local bankruptcy counsel. GRIDWAY ENERGY: Asks Court to Extend Deadline to Remove Suits ------------------------------------------------------------- Gridway Energy Holdings, Inc., has filed a motion seeking additional time to remove lawsuits involving its affiliates. In its motion, Gridway Energy asked the U.S. Bankruptcy Court in Delaware to move the deadline for filing notices of removal of the lawsuits to April 6, 2015. Some of the lawsuits involving Gridway Energy and its affiliates are subject to removal pursuant to Section 1452, which applies to claims related to bankruptcy cases, according to the court filing. A court hearing to consider the motion is scheduled for Feb. 6. Objections are due by Jan. 14. About Gridway Energy Gridway Energy Holdings, Inc., and its affiliates, including Glacial Energy Holdings -- providers of electricity and natural gas in markets that have been restructured to permit retail competition -- sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10833) on April 10, 2014. The Debtors have 200,000 electric residential customers and 55,000 gash residential customers across the U.S. A large portion of the customers' energy consumption and revenue is generated in the northeast U.S., Ohio, Illinois and Texas (collectively accounting for 80% of revenue), with the remaining portion coming from California and other states. The Debtors blamed the bankruptcy due to lower revenue brought by increased market competition, which caused the Debtors to default on certain of their obligations. Gridway defaulted on $60 million of debt. Prepetition, the Debtors negotiated a stock purchase transaction with an interested buyer. But in March 2014, the purchaser withdrew from the transaction because of the large amount of debt that the purchaser would become liable through a stock transaction. The Debtors are represented by Michael R. Nestor, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP; and Alan M. Noskow, Esq., and Mark A. Salzberg, Esq., at Patton Boggs LLP. They employed Omni Management Group, LLC, as claims and notice agent. Gridway Energy estimated assets of $500 million to $1 billion and debt of more than $1 billion. The Creditors' Committee is represented by Sharon Levine, Esq., and Philip J. Gross, Esq., at Lowenstein Sandler LLP; and Frederick B. Rosner, Esq., and Julia B. Klein, Esq., at The Rosner Law Group LLC. Vantage is represented in the case by Ingrid Bagby, Esq., David E. Kronenberg, Esq., Kenneth Irvin, Esq., and Karen Dewis, Esq., at Cadwalader, Wickersham & Taft LLP, and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. GRIDWAY ENERGY: Seeks April 6 Extension of Plan Filing Date ----------------------------------------------------------- Gridway Energy Holdings, et al., ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive period to file a Chapter 11 plan through and including April 6, 2015, and their exclusive period to solicit acceptances of a plan through and including July 6. Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that during the recent extension of the Exclusive Periods, the Debtors, in consultation with the Official Committee of Unsecured Creditors and their Lenders, have worked diligently to assess the Debtors' remaining assets and develop a marketing strategy therefor, conducted a competitive auction for the assets of Ziphany, L.L.C., and negotiated and sought Court approval of the settlement with Commodities Financial Services I, LLC, and EDF Trading North America LLC, which provides for, among other things, the funding of an orderly wind-down of the Debtors' businesses and conclusion of the Chapter 11 Cases. Mr. Bowman says accomplishing these milestones since the Petition Date has been a labor-intensive process that has fully occupied the time of the Debtors' limited staff and required substantial attention from all of the professionals retained in the Chapter 11 Cases. In light of the Debtors' accomplishment of the milestones, and viewed in light of the various factors considered by courts in determining whether cause exists for an extension of the Exclusive Periods, the Debtors believe that each of the factors relevant to these cases weighs in favor of the extension request, Mr. Bowman asserts. A hearing on the extension request is scheduled for Feb. 6, 2015, at 10:00 a.m. (ET). Objections are due Jan. 14. About Gridway Energy Gridway Energy Holdings, Inc., and its affiliates, including Glacial Energy Holdings -- providers of electricity and natural gas in markets that have been restructured to permit retail competition -- sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10833) on April 10, 2014. The Debtors have 200,000 electric residential customers and 55,000 gash residential customers across the U.S. A large portion of the customers' energy consumption and revenue is generated in the northeast U.S., Ohio, Illinois and Texas (collectively accounting for 80% of revenue), with the remaining portion coming from California and other states. The Debtors blamed the bankruptcy due to lower revenue brought by increased market competition, which caused the Debtors to default on certain of their obligations. Gridway defaulted on $60 million of debt. Prepetition, the Debtors negotiated a stock purchase transaction with an interested buyer. But in March 2014, the purchaser withdrew from the transaction because of the large amount of debt that the purchaser would become liable through a stock transaction. The Debtors are represented by Michael R. Nestor, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP; and Alan M. Noskow, Esq., and Mark A. Salzberg, Esq., at Patton Boggs LLP. They employed Omni Management Group, LLC, as claims and notice agent. Gridway Energy estimated assets of $500 million to $1 billion and debt of more than $1 billion. The Creditors' Committee is represented by Sharon Levine, Esq., and Philip J. Gross, Esq., at Lowenstein Sandler LLP; and Frederick B. Rosner, Esq., and Julia B. Klein, Esq., at The Rosner Law Group LLC. Vantage is represented in the case by Ingrid Bagby, Esq., David E. Kronenberg, Esq., Kenneth Irvin, Esq., and Karen Dewis, Esq., at Cadwalader, Wickersham & Taft LLP, and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. GT ADVANCED: Jan. 26 Hearing to Form Equity Security Committee Set ------------------------------------------------------------------ A Chapter 11 petition, submitted to the New Hampshire Bankruptcy court by GTAT Management on October 6th, 2014 has resulted in an on-going case. The Chapter 11 petition revealed that GT Advanced Technologies ran out of funds while attempting to perform research, development, and the production of Sapphire Materials according to a contracted agreement. A Group of Equity Security Holders has submitted a document arguing for the Equity Security Holders to become party to the Case. In response, the Honorable Henry J Boroff, presiding at the Bankruptcy Court of New Hampshire has granted a hearing during which Equity Security Holders may put forward arguments to form an Official Equity Committee as party to the Chapter 11 proceedings. If an Official Equity Committee is formed, they will vigorously represent the business case on behalf of themselves as Equity Security Holders and expect to provide analytical and other information enriching services to the Court in assessments of how the company's agreements and potential Capital restructuring terms are dealt with throughout the Chapter 11 proceedings. The hearing for the formation of an Official Equity Committee is scheduled for January 26, 2015 at 10:00 AM at the Bankruptcy Court of New Hampshire. Interested parties are invited to review the Court Docket for GT Advanced Technologies' Chapter 11 case which is located online at http://www.kccllc.net/gtat If you are an Equity Security Holder (Public Shareholder) of GT Advanced Technology or know someone who is, and would like to provide support to the Group, act as a witness, and/or attend the hearing on January 26, you are invited to contact Equity Security Holder Richard Faloh at RichardFaloh@gmail.com About GT Advanced Technologies Inc. Headquartered in Merrimack, New Hampshire, GT Advanced Technologies Inc. -- http://www.gtat.com/-- produces materials and equipment for the electronics industry. On Nov. 4, 2013, GTAT announced a multiyear supply deal with Apple Inc. to produce sapphire glass material for use in consumer electronics products. Under the deal, Apple would provide GTAT with a prepayment of approximately $578 million paid in four installments and, starting in 2015, GTAT would reimburse Apple for the prepayment over a five-year period. GT is a publicly held corporation whose stock was traded on NASDAQ under the ticker symbol "GTAT." GTAT was de-listed from the NASDAQ stock exchange in October 2014. As of June 28, 2014, the GTAT Group's unaudited and consolidated financial statements reflected assets totaling $1.5 billion and liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had $85 million in cash, $84 million of which is unencumbered. On Oct. 6, 2014, GT Advanced Technologies and eight affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D.N.H. Lead Case No. 14- 11916). GT says that it has sought bankruptcy protection due to a severe liquidity crisis brought about by its issues with Apple. The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as attorneys and Kurtzman Carson Consultants LLC as claims and noticing agent. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee' professionals are Kelley Drye as its bankruptcy counsel; Devine, Millimet & Branch, Professional Association as local counsel; EisnerAmper LLP as financial advisors; and Houlihan Lokey Capital, Inc. as investment banker. GTAT has reached a settlement with Apple. The settlement gives Apple an approved claim for $439 million secured by more than 2,000 sapphire furnaces that GT Advanced owns and has four years to sell, with proceeds going to Apple. In addition, Apple gets royalty-free, non-exclusive licenses for GTAT's technology. INTERLEUKIN GENETICS: Bay City Holds 41.5% Stake as of Dec. 31 -------------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Bay City Capital LLC and its affiliates disclosed that as of Dec. 23, 2014, they beneficially owned 88,985,189 shares of common stock of Interleukin Genetics, Inc., representing 41.5 percent of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/eTHYZy About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Interleukin Genetics incurred a net loss of $7.05 million on $2.42 million of total revenue for the year ended Dec. 31, 2013, as compared with a net loss of $5.12 million on $2.23 million of total revenue in 2012. As of Sept. 30, 2014, the Company had $4.45 million in total assets, $3.51 million in total liabilities, all current, and $937,289 in total stockholders' equity. Grant Thornton LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred recurring losses from operations and has an accumulated deficit that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Company warned in its quarterly report for the period ended Sept. 30, 2014, that it if fails to obtain additional capital by Feb. 28, 2015, it may have to end its operations and seek protection under bankruptcy laws. "We expect that our current and anticipated financial resources will be adequate to maintain our current and planned operations only through February 28, 2015. We need significant additional capital to fund our continued operations, including for the continued commercial launch of our PerioPredictTM test, continued research and development efforts, obtaining and protecting patents and administrative expenses. We have retained a financial advisor, however, based on current economic conditions, additional financing may not be available, or, if available, it may not be available on favorable terms. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then- existing shareholders will result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development. If we cannot obtain additional funding on acceptable terms, we may have to discontinue operations and seek protection under U.S. bankruptcy laws." IPC CORP: Moody's Assigns B3 CFR & Rates Sr. 2nd Lien Debt Caa2 --------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to new issuer IPC Corp.. Moody's also assigned a B3-PD Probability of Default Rating, and B1 and Caa2 ratings to the company's proposed first lien credit facilities and second lien term loan facilities, respectively. The new debt is being raised in connection with the acquisition of IPC by funds affiliated with private equity firm Centerbridge Partners, L.P. for a purchase price of approximately $1.2 billion. Centerbridge will contribute approximately $300 million of new equity. The ratings outlook is positive. Moody's will withdraw the ratings for existing credit facilities at IPC Systems Inc. (a subsidiary of IPC Corp.) upon full repayment of existing debt. Ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation. Assignments: Issuer: IPC Corp. (New) Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured First Lien Revolving Credit Facility, Assigned B1 (LGD3) Senior Secured First Lien Term Loan Facility, Assigned B1 (LGD3) Senior Secured Second Lien Term Loan Facility, Assigned Caa2 (LGD5) Ratings Outlook: Positive Ratings Rationale The B3 CFR reflects IPC's high leverage combined with its high business risk profile, as demonstrated by volatile and uncertain demand for the company's specialized telephony products and non-recurring nature of trading turrets installation revenues (historically about 25% of total revenues). As the overall market for trading turret systems has limited growth prospects, Moody's believes that recent sales increases only temporarily benefit the company's credit profile. Moody's also expects IPC's margins to remain under pressure as the company grows sales of its lower margin data services to offset the pricing pressure in its higher margin voice connectivity services. The company's data services business is relatively small but has been growing at strong double digit rates and has the potential to improve its margins as it achieves scale. IPC's ratings are supported by the company's leading market position as a supplier of specialized telephony systems to traders and brokers in the financial services industry and long standing relationships with key customers. The positive rating outlook reflects Moody's expectation that IPC's credit metrics will strengthen over the next 12 to 18 months, supported by strong demand on its trading turret systems over the near to medium term and stabilization in network services business. The company's credit profile also benefits from the full year impact of recent cost saving measures. The company's leverage (measured on a Moody's adjusted debt to EBITDA basis) could decline towards 5 times particularly if the company uses free cash flow to pay down debt. Liquidity is adequate but modest based on estimated cash at closing of $10 million and an undrawn $25 million revolver. The company is expected to generate free cash flow in excess of $50 million in the first year after closing(excluding transaction costs). IPC's ratings could be pressured by a sustained decline in revenues or EBITDA resulting from competitive challenges or weak business execution particularly if leverage is sustained above 7.0 times or if free cash flow is negative. Furthermore, if the company's liquidity situation deteriorates, a downgrade is possible. IPC's ratings could be upgraded if IPC demonstrates revenue and earnings growth and reduces debt to maintain leverage below 5.5 times and free cash flow to debt greater than 8%. An upgrade is unlikely however unless funded debt is reduced to well under $800 million. The principal methodology used in these ratings was Global Communications Equipment Industry published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. IPC, headquartered in Jersey City, New Jersey, provides integrated, specialized communications solutions to global enterprises, primarily in the financial services industry. The company, with revenues of approximately $499 million for the fiscal year ended September 30, 2014 is being acquired by funds affiliated with private equity firm Centerbridge. IPC CORP: S&P Assigns 'B' CCR & Rates $580MM 1st Lien Debt 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Jersey City, N.J.-based trading systems and network services provider IPC Corp. (IPC). The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to IPC's proposed $580 million first-lien credit facility, which comprises a $25 million first-lien undrawn revolver and a $555 million first-lien term loan. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; mid end of the range) in the event of a payment default. S&P also assigned its 'B-' issue-level and '5' recovery ratings to the company's proposed $345 million second-lien term. The '5' recovery rating indicates S&P's expectation for modest recovery (10%-30%; low end of the range) in the event of a payment default. In addition, S&P raised its corporate credit rating on IPC's operating subsidiary IPC Systems Inc., the borrower under IPC's existing credit facility, to 'B' from 'B-' and then withdrew the rating because the proposed debt will be issued at IPC Corp. S&P plans to withdraw the ratings on the existing credit facility once the proposed transaction closes and the debt is refinanced. "The rating on IPC reflects the company's solid operating performance for the fiscal year ended Sept. 30, 2014, and our expectation that the company will continue to generate low- to mid-single-digit percent revenue growth in fiscal 2015, leading to leverage below 6x," said Standard & Poor's credit analyst Michael Altberg. S&P believes installation revenue within the company's Trading Communication Solutions (TCS) segment should benefit from its key clients entering into the beginning stages of a hardware refresh cycle, in conjunction with increased traction of Unigy, the company's unified trading communications platform. Within the company's Network Services (NS) segment, S&P expects growth in enhanced voice services and data revenue to offset low-single-digit percent declines in traditional voice revenue. The stable outlook reflects S&P's expectation that IPC will benefit from improved demand for its system installations over the next one to two years, FOCF will remain stable, and liquidity will remain "adequate." IPC's customer concentration in the financial services sector makes the company susceptible to the ongoing regulatory and operating challenges its customer base will likely face for an extended period. Factors that could lead to a downgrade include meaningful declines in new trading system bookings combined with a significant deterioration in FOCF that leads to less-than-adequate liquidity. Such a scenario would most likely result from a market disruption that causes lower trading volumes and rationalization of trading positions. As a result, S&P do not believe this scenario is likely over the next 12 months, especially because more than 70% of the company's revenue base is contracted and recurring. Additionally, S&P could lower the rating if the company's financial policy becomes more aggressive through debt-financed dividends or other shareholder-favoring activities, pushing leverage over 7x on a sustained basis. S&P views an upgrade as unlikely over the next 12 months, given the high debt leverage and significant revenue and customer concentration. S&P could raise the rating if it become convinced that IPC is making significant progress to diversify its business while maintaining stable free cash flow generation and reducing leverage below 5x on a sustained basis as a result of debt repayment and EBITDA growth. The company's financial policy and sponsor ownership would be key factors in an upgrade scenario, including S&P's expectation for future shareholder returns. IRENE SCHWARTZ-TALLARD: Rehearing on Stay Violation Damages Ruling ------------------------------------------------------------------ Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that the U.S. Court of Appeals for the Ninth Circuit in San Francisco has agreed to allow en banc rehearing of its April 2014 ruling in the case called Schwartz-Tallard, which asked the question of whether there are limits on the attorneys' fees an individual can recover when a creditor violates the so-called automatic stay by taking action that should have been halted. According to the report, in April, the Ninth Circuit backed off somewhat from Sternberg in the process of interpreting Section 362(k) of the Bankruptcy Code, which gives an individual bankrupt the right to damages and attorneys' fees for a willful violation of the automatic stay prohibiting interference with property. The Bloomberg report said the en banc rehearing is the only way the appeals court can overrule Sternberg and allow recovery of fees in pursuit of damages for a stay violation. The case is America's Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), 12-60052, U.S. Court of Appeals for the Ninth Circuit (San Francisco). ITUS CORPORATION: Settles Optronics Lawsuit for $9 Million ---------------------------------------------------------- ITUS Corporation has settled its lawsuit against AU Optronics Corporation. The settlement includes cash payments from AUO to ITUS totaling $9 million, the termination of AUO's rights to ITUS's patented Nano Field Emission Display technology, and the transfer of ITUS's electrophoretic display patent portfolio to AUO. Robert Berman, ITUS's president and CEO stated, "This settlement accomplishes 2 very important goals for ITUS: it provides consideration for our EPD patents; and gives us the right to develop our nFED technology, which is now completely unencumbered. The combination of our strong cash position, together with the significant potential from the patented technologies that we own or control, positions the company for continued growth in 2015 and beyond." The settlement includes a $2 million payment pursuant to a Settlement Agreement, and $7 million payment pursuant to a Patent Assignment Agreement, and resolves a contract dispute between the parties emanating from two joint development and license agreements entered into in May of 2011. A lawsuit filed by ITUS in January of 2013, and the ensuing arbitration which commenced on Nov. 10, 2014, will be dismissed, with prejudice. Additional details of the settlement is available for free at: http://is.gd/ngKfjj About ITUS Corporation ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires patented technologies for the purposes of patent monetization and patent assertion. The company currently has 10 patent portfolios in the areas of Key Based Web Conferencing Encryption, Encrypted Cellular Communications, E-Paper(R) Electrophoretic Display, Nano Field Emission Display ("nFED"), Micro Electro Mechanical Systems Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window Frame Construction, VPN Multicast Communications, Internet Telephonic Gateway, and Enhanced Auction Technologies. CopyTele incurred a net loss of $10.08 million for the year ended Oct. 31, 2013, a net loss of $4.25 million for the year ended Oct. 31, 2012, and a net loss of $7.37 million for the year ended Oct. 31, 2011. CopyTele changed its name to "ITUS Corporation" on Sept. 2, 2014, to reflect the Company's change in its business operations. J & B RESTAURANT: Files Voluntary Chapter 11 Bankruptcy Petition ---------------------------------------------------------------- J & B Restaurant Partners of Long Island II, LLC and certain affiliates, owners of 37 Friendly's restaurants in New York, New Jersey and Connecticut, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on Jan. 6 as part of its pre-negotiated and comprehensive restructuring plan. The filing, done in cooperation with its franchisor and GE Capital Franchise Finance, will allow the Long Island based Company to close unprofitable restaurants, reduce outstanding debt, and quickly emerge from bankruptcy as a much stronger company. "The closing of restaurants is a very difficult but necessary step in positioning J & B for financial health and a key component of the restructuring plan. Our partnership with Friendly's and GE Capital will allow us to remodel existing restaurants and reduce debt. Throughout this process we will continue to provide great food and ice cream, and friendly service to our customers," stated Dawn Petite, Chief Operating Officer. GE Capital will provide a debtor-in-possession financing facility to enable normal operation of the Company's restaurants, including the normal course payments to employees. The Long Island based Company, owned since 2001, expects to exit bankruptcy over the next six months and to remodel at least 11 restaurants over three years. The bankruptcy filing does not affect Friendly's Ice Cream, LLC, its affiliates and other Friendly's franchisees or other J & B affiliates in non-related businesses. Mastodon Ventures, Inc. -- http://www.mastodonventures.com-- is an advisor to restaurant companies, has acted as the exclusive strategic advisor and investment banker to the Company. Huron Consulting Group -- http://www.huronconsultinggroup.com-- is providing financial advisory services to guide the Company through its reorganization. J&B RESTAURANT: Files for Bankruptcy Protection ----------------------------------------------- Reuters reported that Friendly's franchisee J&B Restaurant Partners of Long Island II LLC and certain affiliates filed for Chapter 11 bankruptcy protection as part of a pre-negotiated restructuring plan. According to the report, J&B said the filing will allow it to close unprofitable restaurants, reduce debt and quickly emerge from bankruptcy. The owner of 37 Friendly's restaurants in New York, New Jersey and Connecticut expects to exit bankruptcy over the next six months and to remodel at least 11 restaurants over three years, the report related. LAKELAND INDUSTRIES: To Sell New York Headquarter for $517,500 -------------------------------------------------------------- Lakeland Industries, Inc., entered into an agreement with Capitol Restoration Dry Cleaners, Inc., as purchaser, for the sale of the Company's corporate headquarter offices located at 701-7 Koehler Avenue, Ronkonkoma, New York, for a purchase price of $517,500. The sale transaction is expected to close on or about April 27, 2015. The Company intends to seek smaller leased quarters in the area for its corporate office, according to a regulatory filing with the U.S. Securities and Exchange Commission. 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 $377,000 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. As of Oct. 31, 2014, the Company had $86.8 million in total assets, $31.8 million in total liabilities and $54.9 million in total stockholders' equity. LANTHEUS MEDICAL: Supply Agreements with Cardinal Health Expires ---------------------------------------------------------------- Lantheus Medical Imaging, Inc.'s written supply agreements with Cardinal Health relating to TechneLite generators, Xenon, Neurolite, Cardiolite and certain other products expired in accordance with their terms on Dec. 31, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. Following extended discussions with Cardinal Health that have not resulted in a new set of written supply agreements, the Company has entered 2015 without written supply agreements. In the absence of written supply agreements, the Company will continue to offer all products to Cardinal Health, at substantially higher prices. The Company cannot predict the volumes or product mix Cardinal Health will continue to order and purchase, and such volumes and product mix may vary over time. In the absence of written supply agreements with Cardinal Health, the Company believes it is likely that future unit sales volumes will decrease from levels experienced throughout 2014. The Company also currently believes that the operating profit contribution from sales to Cardinal Health in 2015 will be generally consistent with 2014 levels due to substantially higher pricing for all products. However, ultimate future levels of net revenue and operating profit associated with Cardinal Health cannot be predicted at this time because those amounts depend on future unit sales volumes, product mix and pricing to Cardinal Health, the Company noted. To assure continued availability of all the Company's products for patients and health care practitioners, the Company said it will continue to make available to Cardinal Health all of the Company's products without written supply agreements in effect, whether or not the parties eventually reach agreement on mutually-acceptable terms to new written supply agreements. The Company can give no assurance that those supply agreements will ultimately be finalized and executed. About Lantheus Medical Lantheus Medical Imaging, Inc., a wholly-owned operating subsidiary of parent company, Lantheus MI Intermediate, Inc., is a global leader in developing, manufacturing, selling and distributing innovative diagnostic imaging agents. LMI provides a broad portfolio of products, which are primarily used for the diagnosis of cardiovascular diseases. LMI's key products include the echocardiography contrast agent DEFINITY(R) Vial for (Perflutren Lipid Microsphere) Injectable Suspension; TechneLite(R) (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures; and Xenon (Xenon Xe 133 Gas), an inhaled radiopharmaceutical imaging agent used to evaluate pulmonary function and for imaging the lungs. The Company's balance sheet at Sept. 30, 2014, showed $258.05 million in total assets, $498.47 million in total liabilities and a $240.41 million total stockholders' deficit. * * * As reported by the TCR on July 1, 2014, Moody's Investors Service upgraded the ratings of Lantheus Medical Imaging, Inc. including the Corporate Family Rating to Caa1 from Caa2, the Probability of Default Rating to Caa1-PD from Caa2-PD and the senior unsecured rating to Caa1 (LGD4) from Caa2 (LGD4). "The upgrade reflects our outlook for continuing earnings improvement driven by rising DEFINITY sales and the impact of ongoing cost reductions, while the positive outlook considers the potential for deleveraging pending a successful IPO and further resolution of supply issues," stated Michael Levesque, Senior Vice President. In the Nov. 6, 2013, edition of the TCR, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Lantheus Medical Imaging Inc. to 'B-' from 'B'. The outlook is negative. LIME ENERGY: Bison Reports 30.4% Stake as of Dec. 23 ---------------------------------------------------- In a Schedule 13D filed with the U.S. Securities and Exchange Commission, Bison Capital Partners IV, L.P., and Bison Capital Partners IV GP, L.P., disclosed that as of Dec. 23, 2014, they beneficially owned 4,166,666 shares of common stock of Lime Energy, Corp., representing 30.4 percent of the shares outstanding. On Dec. 23, 2014, Bison acquired 10,000 shares of Series C Convertible Preferred Stock of the Issuer, for an aggregate gross purchase price of $10,000,000 less certain fees and expenses. The source of funds for this purchase was the general working capital of Bison. A copy of the regulatory filing is available for free at http://is.gd/qIPJ5M About Lime Energy Headquartered in Huntersville, North Carolina, Lime Energy Co. -- http://www.lime-energy.com-- is engaged in planning and delivering clean energy solutions that assist its clients in their energy efficiency and renewable energy goals. The Company's solutions include energy efficient lighting upgrades, energy efficient mechanical and electrical retrofit and upgrade services, water conservation, building weatherization, on-site generation and renewable energy project development and implementation. The Company provides energy solutions across a range of facilities, from high-rise office buildings, distribution facilities, manufacturing plants, retail sites, multi-tenant residential buildings, mixed use complexes, hospitals, colleges and universities, government sites to small, single tenant facilities. Lime Energy reported a net loss available to common stockholders of $18.5 million in 2013, a net loss of $31.8 million in 2012 and a net loss of $18.9 million in 2011. The Company's balance sheet at Sept. 30, 2014, showed $31.1 million in total assets, $22.8 million in total liabilities and $8.33 million in total stockholders' equity. LONGVIEW POWER: Seeks Feb. 28 Extension of Plan Filing Date ----------------------------------------------------------- Longview Power, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive plan filing period through and including Feb. 28, 2015, and their exclusive solicitation period through and including April 30, 2015. Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court that the Debtors seek an additional extension of the Exclusivity Periods to allow them to complete their complex operational and financial restructuring without burdening their estates with competing Chapter 11 plans. Mr. Shapiro says the Debtors are focused on obtaining confirmation of the Amended Plan, for which they are currently soliciting votes and for which they hope to seek confirmation in the near term. To prosecute the Amended Plan, the Debtors are vigorously engaged in crucial litigation with First American Title Insurance Company regarding the Debtors' property interest in, and the availability of coverage under, the Policy of Title Insurance, policy number A40008468, issued on March 9, 2007. Moreover, the Debtors continue to pursue good-faith mediation with the Contractors, the Backstoppers, and First American to resolve the contingencies that remain in the Chapter 11 cases. Against this backdrop, the Debtors submit that a further extension of the Exclusivity Periods will facilitate their concurrent efforts to drive the Chapter 11 cases to a successful conclusion and to maintain stability with their employees, business partners, and creditors. And, importantly, the Backstoppers, holders of more than 60% of the Debtors' prepetition funded debt, support the extension request, Mr. Shapiro says. A hearing on the extension request is scheduled for Feb. 18, 2015, at 11:00 a.m. (ET). Objections are due Jan. 14. About Longview Power Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. The Debtor disclosed assets of $1.72 billion plus undisclosed amounts and liabilities of $1.08 billion plus undisclosed amounts. A committee of unsecured creditors has not been appointed in the case due to insufficient response to the U.S. Trustee's communication/contact for service on the committee. LONGVIEW POWER: Settles Disputes With Contractors, Insurer ---------------------------------------------------------- Matt Jarzemsky, writing for The Wall Street Journal, reported that Longview Power has settled disputes with an insurer and a pair of contractors, clearing an obstacle in the West Virginia power plant’s efforts to exit Chapter 11 bankruptcy protection. According to the report, the settlement, which is the result of arbitration with Norwegian construction firm Kvaerner ASA and Siemens AG , which built portions of the 700-megawatt coal-fired power plant, proposes that Kvaerner is slated to receive $48 million in cash, with Longview paying $2 million of that amount, Siemens contributing $5 million and First American providing $41 million. The settlement will end litigation between Longview and insurer First American Title Insurance Co. over the payout of a policy covering the builders’ senior claims, the report related. About Longview Power Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. The Debtor disclosed assets of $1,717,906,595 plus undisclosed amounts and liabilities of $1,075,748,155 plus undisclosed amounts. Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as of Sept. 11, 2013, a committee of unsecured creditors has not been appointed in the case due to insufficient response to the U.S. Trustee's communication/contact for service on the committee. LOUISVILLE ARENA: S&P Affirms 'BB' ICR on Three Bond Issues ----------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its '3' recovery ratings from Louisville Arena Authority Inc.'s (LAA) $292.28 million project revenue bonds secured IRB series 2008A-1 due 2042, $26.939 million capital appreciation bonds secured IRB series 2008A-2 due 2024, and $20.1 million taxable fixed rate project revenue bonds series 2008B due 2021. At the same time, S&P affirmed its 'BB' issue credit ratings on the three bond issues. The outlook is stable on all three ratings. The withdrawal of the recovery rating on Louisville Arena Authority's issue credit ratings reflects the revision in S&P's project finance criteria. The arena's operations profile remains unchanged. S&P's 'BB' senior secured issue credit ratings reflect its view that performance at the arena has improved due to: -- Strong government support such as payments from a highly rated counterparty (Louisville-Jefferson County Metro Government [Metro]); -- An experienced operator, AEG Management Louisville LLC, who was brought in to manage the facility in July 2012; -- A long-term lease with the University of Louisville Athletic Association (ULAA); -- Its modestly improving cash flow; and -- Its fully funded debt service reserves. These factors are offset by weak debt service coverage ratios (DSCR) and S&P's expectation that there will still be volatility in sales tax-based tax incremental financing (TIF) payments in the revised two-mile TIF district during an economic cycle and the possibility of concentration in the tax base given that many of the business establishments are in the hospitality sector, which is highly susceptible to economic downturns. S&P estimates LAA's DSCR will remain weak for at least the next five years in the 1.05x to 1.1x range. LAA is a 22,000 seat multi-use facility for basketball games, concerts, and other events. Debt at LAA is serviced by arena revenues, Kentucky state sales and property tax (TIF) revenues and Metro payments. The stable outlook reflects S&P's view that stable to modest growth in arena revenues along with the Metro payments provide some downside protection to LAA, and should insure that the DSCR will likely remain in the 1.05x to 1.1x range for the next five years. MA SALAZAR: Court Refuses to Award Sanctions Against The Village ---------------------------------------------------------------- Judge Robert E. Grossman of the U.S. Bankruptcy Court for the Eastern District of New York declines to award sanctions against the Incorporated Village of Atlantic Beach, having concluded that the Village did not act in bad faith and was not motivated to so act by an improper purpose. The matter is before the Bankruptcy Court on remand from the U.S. District Court for the Eastern District of New York pursuant to a memorandum decision and order entered on September 17, 2013, discussing the scope and application of the inherent authority granted to the Bankruptcy Court to hold parties in contempt of its orders. Debtor MA Salazar Inc. appealed the Bankruptcy Court's decision denying its request to hold the Village in contempt for violating an order of the Bankruptcy Court, and for failing to obtain an order from the Bankruptcy Court regarding the applicability of the automatic stay prior to taking action against the Debtor's property. The order in question prohibited any party from entering the Debtor's premises. Prepetition, the Village after extensive litigation had been authorized to demolish the Debtor's property, as the State Court ruled that demolition was necessary to protect the public from the unsafe structure on the Debtor's property. After the order prohibiting any party from entering the Debtor's premises was entered, the Bankruptcy Court found that the automatic stay did not apply to the proposed acts of the Village. The Village failed to submit an order memorializing the Court's decision, and immediately proceeded to demolish the building. In denying the request for sanctions, the Bankruptcy Court held that the automatic stay did not apply, therefore, the Village could not be sanctioned based on a violation of Section 362(a) of the Bankruptcy Code. The Bankruptcy Court further held that it did not have the authority to impose sanctions based on a prior order that did not clearly set forth that the Village could be held in contempt for its failure to abide by the prior order. The District Court reversed in part, holding that the Bankruptcy Court had inherent authority to sanction the Village for a violation of the automatic stay, and that the Bankruptcy Court had the inherent power to impose submission to its lawful mandates. The District Court clarifies that the automatic stay did not apply to the Village as its actions were taken in the exercise of its police and regulatory powers under Section 362(b)(4). The District Court also noted that the Village's violation of the order prohibiting any party from entering the Debtor's property is not sanctionable. The Village believed in good faith that its conduct did not run afoul of this order. Its belief stemmed from the fact that the District Court ruled that the stay did not apply to the Village, and parties were prohibited from entering the Debtor's property for their own protection. If anything, the Village's actions served to further the protection of the public, Judge Grossman explains. He adds that the record in the case demonstrates there was honest confusion over whether the order was meant to keep the Village from demolishing the Debtor's property once the Court ruled that the automatic stay did not apply. The Village's failure to submit an order regarding the applicability of the automatic stay prior to demolishing the Debtor's property did not demonstrate bad faith, Judge Grossman said. Hence, he ruled that without a finding of bad faith, the Village's conduct does not warrant the imposition of sanctions. A full-text copy of the Memorandum Decision dated December 8, 2014, is available at http://bit.ly/1s43Kljfrom Leagle.com. About MA Salazar MA Salazar Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 11-77310) on October 14, 2011. The Debtor is the owner of a parcel of real property located in Atlantic Beach, New York. The parcel of land contained a mixed use commercial and residential building. Prepetition, on July 6, 2011, following a trial, the Building was deemed unsafe, in violation of the New York State Property Maintenance Code. On September 26, 2011, the Debtor sought a temporary restraining order in State Court prohibiting the demolition of the Building. The request for a TRO was denied based on a finding that the Building had fallen into such a state of disrepair that it was unsafe to the public. On October 14, 2011, the Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code. According to the Debtor, the petition was filed in order to stop the pending demolition of the Building by the Incorporated Village of Atlantic Beach. MF GLOBAL: Financial Institutions Settle Suit --------------------------------------------- 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. The Journal said the investors, now led by Virginia Retirement System, sued the financial institutions as part of a larger 2011 suit against former MF Global Chief Executive Jon S. Corzine and other company executives, accusing the parties of not disclosing the risks associated with MF Global's European sovereign debt trades using repurchase-to-maturity transactions. 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. MILLER AUTO PARTS: Gets Approval to Sell Stihl Brand Inventory -------------------------------------------------------------- Miller Auto Parts & Supply Company, Inc., received a green light in federal court to sell some of its assets to Stihl Incorporated. Judge Mary Grace Diehl of U.S. Bankruptcy Court for the Northern District of Georgia authorized the hardware company to sell certain inventory, including Stihl brand items, stored at its headquarters in Huntingdon, Pennsylvania. The inventory will be sold "free and clear of any and all liens, claims, encumbrances, and other interests," according to the bankruptcy judge's order. Stihl offered to purchase the inventory for $78,310, according to its agreement with the Huntingdon-based hardware company. A copy of the agreement is available for free at http://is.gd/yKB3aD Following its bankruptcy filing in September last year, Miller Auto Parts put up for sale its assets, including the Stihl brand inventory. In November, the hardware company received court approval to sell certain assets to Fisher Auto Parts Inc., Parts Authority Inc., and TPH Acquisition LLLP. About Miller Auto Parts Miller Auto Parts & Supply Company, Inc., and its affiliates are distributors of automotive parts and service equipment. The companies operate from the Johnson Industries Inc.'s headquarters in Atlanta, Georgia and have distribution operations in the southeast, northeast and on-line. The Southeastern distribution center is located in Norcross, Georgia and supports nine satellite centers across the state and supplies parts to key fleet customers across the country. Miller Auto Parts and its three subsidiaries sought Chapter 11 bankruptcy protection (Bankr. N.D. Ga.) on Sept. 15, 2014. The Debtors have sought joint administration under Lead Case No. 14-68113. The cases are assigned to Judge Mary Grace Diehl. The Debtors have tapped Scroggins & Williamson as counsel and Logan & Co. as claims and noticing agent. The U.S. Trustee for Region 21 appointed three creditors of Miller Auto Parts & Supply Company Inc. to serve on the official committee of unsecured creditors. The Committee selected Kane Russell Coleman & Logan as its counsel. MURRAY ENERGY: S&P Raises Corp Credit Rating to 'B+' ---------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on St. Clairsville, Ohio-based coal producer Murray Energy Corp. to 'B+' from 'B'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's first-lien debt and other senior secured debt to 'BB' and 'B' from 'BB-' and 'B-', respectively. The recovery rating on the first-lien debt remains '1', indicating S&P's expectation of a very high (90% to 100%) recovery in the event of a payment default. The recovery rating on other senior secured debt remains '5', indicating S&P's expectation of a modest (10% to 30%) recovery in the event of a payment default. "Murray's acquisition of Consol assets has doubled coal production and almost tripled the company's reserve base," said Standard & Poor's credit analyst Chiza Vitta. One year later, S&P anticipates elevated levels of EBITDA will bring leverage levels back below 5x going into 2015. S&P considers Murray's business risk profile to be "weak" based on the company's participation in the competitive and highly cyclical coal industry. The assessment reflects current difficult industry conditions and the inherent challenges of coal mining, which include price volatility, weather-related and transportation disruptions, and increasingly stringent environmental and safety regulations. S&P weighs these risks against Murray's long-term contracted profile, with more than 65% of cumulative sales volume contracted through 2017; widespread use of the low-cost underground longwall mining method; and a diversified geographic profile with mines in three basins, none accounting for more than 18% of total production. The higher corporate credit rating is primarily the result of S&P's expectation of improved credit measures going forward, which fall in line with the revised "aggressive" financial risk profile assessment. Through the first three quarters of the year (concurrent with the transformative acquisition in December 2013), the adjusted EBITDA margin has risen to 28%, compared with 21% for full-year 2013. This has fueled a boost in EBITDA that S&P anticipates will lead to leverage leveling out just below 5x for the end of the year. For 2015, S&P is assuming that Murray will sell about 65 million tons of coal with a nominal decrease in average prices and recent EBITDA margin gains falling partially, back to about 23%. S&P is also assuming $325 million in capital spending. The stable outlook reflects S&P's expectation that Murray's production will increase marginally in 2015 (the vast majority of production is already under contracted commitments). S&P also anticipates sustained profitability near current levels, enabling the company to maintain its rating over the next year. S&P would consider an upgrade if EBITDA margins are sustained consistently above 25%, particularly if there is some reduction in debt. This would require steady operations, continued cost containment, and the absence of material production outages. S&P would consider a lower rating if leverage remains above 5x or liquidity deteriorates such that S&P no longer considered it to be strong. Increasing leverage is more likely in the short term and could occur as a result of a drop in EBITDA due to unanticipated mining conditions that could affect costs or production levels. NEIGHBORHOOD HEALTH: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Neighborhood Health Services Corporation fdba Plainfield Health Center 1700-58 Myrtle Avenue Plainfield, NJ 07063 Case No.: 15-10277 Nature of Business: Health Care Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: Donald F. Campbell, Jr., Esq. GIORDANO HALLERAN & CIESLA, P.C. 125 Half Mile Road, Suite 300 Red Bank, NJ 07701 Tel: 732-741-3900 Fax: 732-224-6599 Email: dcampbell@ghclaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Siddeeq El Amin, chairman, board of directors. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb15-10277.pdf NEOGENIX ONCOLOGY: Nixon Peabody, Mintz Levin Blitz Legal Mal Suit ------------------------------------------------------------------ Law360 reported that Nixon Peabody LLP, Mintz Levin Cohn Ferris Glovsky and Popeo PC, and ex-Neogenix Oncology Inc. executives filed motions urging a New York federal judge to dismiss a lawsuit alleging breaches of fiduciary duty and legal malpractice and implicating them in the now-bankrupt biotech company's downfall. According to the report, Nixon Peabody and Mintz Levin argued that Neogenix's suit -- which accuses former Chief Financial Officer Peter Gordon of paying commissions to individuals and firms for their sales of Neogenix stock, even though some of them weren't licensed to sell securities -- fails to state a claim. The complaint alleges that Sam Feigin and Mark Kass, Mintz Levin attorneys who represented Neogenix, knew that Gordon's finder payments were illegal but hid the information from the company, the report related. In November 2008, Feigin and Kass left Mintz and joined Nixon Peabody, where they continued to represent Neogenix and maintained the “cover-up,” the report further related. The case is Neogenix Oncology Inc. v. Gordon et al., case number 2:14-cv-04427, in the U.S. District Court for the Eastern District of New York. 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. The U.S. Trustee for Region 4 has 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 CENTURY: Morgan Stanley Had Heavy Influence Into Practices -------------------------------------------------------------- Morgan Stanley's position as one of New Century Financial Corporation's biggest clients helped give the bank heavy influence into the lender's practices, the New York Times reports. Citing an internal Morgan Stanley report, the Times states that the bank was "involved in almost every strategic decision that New Century makes in securitized products." Danielle Kurtzleben at Vox.com relates that Morgan Stanley was regularly the biggest buyer of the Company's subprime mortgages. Vox.com recalls that the Company made the loans, which Morgan Stanley then bought and repackaged into mortgage-backed securities, which it in turn sold to investors. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- was a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company was among firms hit by the collapse of the subprime mortgage business industry in 2006. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they disclosed total assets of $36,276,815 and total debts of $102,503,950. The Company sold its assets in transactions approved by the Bankruptcy Court. The Bankruptcy Court confirmed the Second Amended Joint Chapter 11 Plan of Liquidation of the Debtors and the Official Committee of Unsecured Creditors on July 15, 2008, which became effective on Aug. 1, 2008. An appeal was taken and, on July 16, 2009, District Judge Sue Robinson issued a Memorandum Opinion reversing the Confirmation Order. On July 27, 2009, the Bankruptcy Court entered an Order Granting Motion of the Trustee for an Order Preserving the Status Quo Including Maintenance of Alan M. Jacobs as Liquidating Trustee, Plan Administrator and Sole Officer and Director of the Debtors, Pending Entry of a Final Order Consistent with the District Court's Memorandum Opinion. On Nov. 20, 2009, the Court entered an Order confirming the Modified Second Amended Joint Chapter 11 Plan of Liquidation. The Modified Plan adopted, ratified and confirmed the New Century Liquidating Trust Agreement, dated as of Aug. 1, 2008, which created the New Century Liquidating Trust and appointed Alan M. Jacobs as Liquidating Trustee of New Century Liquidating Trust and Plan Administrator of New Century Warehouse Corporation. According to Vox.com, New Century is now defunct. NITRO PETROLEUM: Reports $293K Net Loss in Quarter Ending Oct. 31 ----------------------------------------------------------------- Nitro Petroleum Incorporated filed its quarterly report on Form 10-Q, disclosing a net loss of $294,000 on $124,000 of revenue for the three months ended Oct. 31, 2014, compared with net income of $190,000 on $613,000 of revenue for the same period last year. The balance sheet at Sept. 30, 2014, showed $2.86 million in total assets, $1.19 million in total liabilities, and stockholders' equity of $1.67 million. At Oct. 31, 2014, the Company had losses for the three months ended in the amount of $294,000 and loss for nine months ended $32,000 and has accumulated losses of $6.95 million since its inception, had a working capital deficiency of $263,000 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/f7PyEy Shawnee, Oklahoma-based Nitro Petroleum Incorporated is engaged primarily in the acquisition, development, production, exploration for, and the sale of oil, gas and natural gas liquids and properties. All business activities are conducted in Texas and Oklahoma and the Company sells its oil and gas to a limited number of domestic purchasers. ORANGE COUNTY HOUSING: S&P Alters Outlook to Stable ---------------------------------------------------- Standard & Poor's Ratings Services revised the outlook to stable from negative and affirmed its 'B+' rating on Orange County Housing Finance Authority, Fla.'s (Green Gables Apartments project) series 1998C multifamily housing revenue bonds. "The rating action reflects the application of our revised affordable multifamily housing criteria, and, more specifically, our view of the project's poor financial and operating performance," said Standard & Poor's credit analyst Jose Cruz. Offsetting the credit weaknesses are the project's strong economic fundamentals and market dependencies, as well as loss coverage levels that view as strong. OVERLAND PARK: Fitch Affirms 'BB' Rating on $62.68MM Revenue Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed the bonds for Overland Park Development Corporation, Kansas (the corporation): -- $62.685 million outstanding second tier refunding revenue bonds, series 2007B (Overland Park convention center hotel project) at 'BB'. The Rating Outlook is Stable. SECURITY The bonds are special limited obligations payable from a subordinate lien on the net operating revenues of the convention hotel, a senior lien on a 4.5% citywide transient guest tax (TGT), subject to annual appropriation, and a cash funded debt service reserve funded to the IRS standard. The bonds also have a leasehold interest on the convention hotel and a subordinate lien on the 1.5% TGT supporting the superior lien bonds. KEY RATING DRIVERS INSUFFICIENT COVERAGE FROM TAX REVENUE: The speculative grade 'BB' rating reflects the inability of the dedicated 4.5% portion of the TGT to sustain 1x coverage for debt service. NOMINAL CREDIT FOR NON-TAX REVENUE: Fitch gives little weight in its rating to the subordinate pledge of net operating revenue from the single site convention center hotel given its erratic history and the difficulty in quantifying future revenues. ASCENDING DEBT SERVICE: Continued revenue growth from the citywide hotel tax and/or operations of the convention center hotel is necessary to sufficiently service the ascending debt service load. STRONG LOCAL ECONOMY: Fitch believes the city's deep and diverse economy supports sustainable long-term hotel demand despite recent weaknesses. RATING SENSITIVITIES CHANGES IN COVERAGE: Sustained deterioration in TGT collections would present a credit concern and could lead to a rating downgrade. Conversely, improvement leading to maximum annual debt service (MADS) coverage consistently in excess of 1x by historical pledged TGT revenues could lead to an upgrade. CREDIT PROFILE The corporation is a component unit of the city of Overland Park (GO bonds rated 'AAA' by Fitch), which benefits from its proximity to the Kansas City metro area. The not-for-profit corporation was created for the sole purpose of constructing and owning a 412-room convention hotel located adjacent to the city's convention center. The corporation board is comprised of six members of the city's governing body, appointed by the mayor and approved by the city council. The convention hotel opened in December 2002 and is operated as a Sheraton hotel under a hotel operating agreement with Starwood Hotels & Resort (IDR rated 'BBB' with a Stable Outlook) that expires in November 2022. The city's convention center opened in 2002 and primarily hosts regional business and community needs in 60,000 square feet of exhibit space and a 25,000 square foot ballroom. LEGAL STRUCTURE Primary support for the rating is derived from the coverage generated from the first lien on the 4.5% and second lien on the 1.5% citywide TGT imposed upon the roughly 5,200 available hotel rooms located within the city. A citywide hotel tax has been levied since 1982 and is collected by the state and remitted to the city quarterly minus a 2% collection fee. Overland Park has covenanted to budget sufficient citywide hotel tax revenues to pay the next year's debt service on the bonds pursuant to a debt service support agreement between the city and the corporation. However, the allocation of TGT revenues is subject to annual appropriation and is capped at amounts received solely from the 4.5% and 1.5% TGT. Once the city appropriates funds, the obligation is absolute and unconditional without abatement, deduction or set-off and counterclaim. The bonds also have a subordinate pledge of net revenues from the convention hotel. Fitch gives this pledge little weight. In recent years, net hotel revenues have provided support for the superior lien bonds, thus freeing up much of the additional 1.5% TGT revenues upon which the bonds have a subordinate lien. However, the ascending debt service schedule and variability of net hotel revenues make it uncertain that this will continue to the same extent. Debt service on both series of bonds grows at a compound annual growth rate of about 2.8% through maturity in 2032. Debt service on the Fitch-rated bonds comprises 60% of total debt service. The commitment of citywide TGT revenues can be released if debt service coverage from net revenues of the convention hotel exceeds 2.25x for three consecutive calendar years. However, these revenues would be reinstated if coverage subsequently fell below 1.75x at any time through maturity. Other legal provisions, which would only provide meaningful credit support in the unlikely event that the hotel tax commitment is released, include the crediting of all convention hotel revenues under a lockbox agreement with the trustee, and a 1.05x rate covenant. HISTORICAL REVENUES AND COVERAGE The citywide hotel tax experienced a compounded annual growth rate of 6.1% between 1994 and 2006, and the city in 2007 reasonably forecasted 3.7% annual increases between 2007 and 2018. Based on the 2007 forecast, available hotel tax revenues would fully cover annual debt service at least 1.4x throughout the life of the bonds. However, due to the severity of the economic recession, actual TGT revenues declined year-over-year by 17% in 2009 and 0.7% in 2010 before rebounding in 2011 with a 10.6% increase. This was followed by a 4.3% rise in 2012 and 8.6% growth in 2013; TGT revenues appear poised for a similar increase for 2014 through three quarters. Actual TGT revenues in 2013 were at 78% of initial projections for that year. GROWTH REQUIREMENTS FOR COVERAGE The ascending debt service schedule makes future coverage by 4.5% TGT revenues alone a challenge. The bonds are also supported by a cash funded $6.6 million debt service reserve. If estimated 2014 hotel tax revenues were held flat and no revenues were received from the net operating revenue pledge, the debt service reserve would be exhausted by 2025. Based on Fitch's calculations, 1.8% annual growth in citywide hotel tax revenues plus amounts in the debt service reserve would be necessary to sufficiently satisfy debt service in all years, relying only upon the 4.5% portion of the TGT. Annual growth of 2.6% would allow coverage without use of the debt service reserve. COMBINED PLEDGED REVENUES COVERAGE The rating does not take into consideration any future benefit of net operating revenues from the convention hotel. However, actual net operating revenues and other balances have enhanced debt service coverage in recent years. Total pledged revenues including surplus funds after payment of senior lien series 2007A bonds covered series 2007B debt service by 1.38x in 2011, 1.26x in 2012 and improved to 1.4x in 2013. 2013 combined pledged revenues cover maximum annual debt service in 2032 by 0.8x. ECONOMY DRIVES FUTURE HOTEL TAX PERFORMANCE Citywide hotel occupancy historically has been driven by individual and group business travelers. Local demand for hotels wavered somewhat in recent years due to both the protracted economic recession and Sprint Corporation's reduced presence within the city. As a positive development, several other major corporations have sublet space on the Sprint campus, which has led to increased hotel demand. Several small hotels are opening in the area. The city encourages demand by tying economic incentives to hotel usage and a recently constructed soccer/sports complex contributes to hotel demand. An agreement between a local museum and the American Museum of Natural History is also expected to spur growth in occupancy. Additionally, there are several major economic development projects in the city and surrounding areas. Citywide hotel occupancy increased 8% year-to-date through November 2014, and the average daily room rate is up 4.7%. STRONG LOCAL ECONOMY Overland Park is the second largest city in the state of Kansas and located within the Kansas City metropolitan area. The region benefits from a deep and diverse local economy, an extensive transportation network, available land, and a well-educated workforce. Several Fortune 500 companies are located within the city. The financial services and professional and business service sectors account for a greater percentage of total countywide employment compared to the national average. PALM BEACH: Gets Approval to Sell Undeveloped Land to PNC Bank -------------------------------------------------------------- Palm Beach Community Church, Inc., received court approval to sell a property to PNC Bank, National Association. The property consists of approximately 9.03 acres of undeveloped land located in Palm Beach County, Florida. PNC Bank, which offered to buy the property for $6.31 million, holds a lien against the property. The property was supposed to be sold in an auction on Dec. 4, with PNC Bank serving as the stalking horse bidder. Palm Beach Community, however, did not receive qualified bids for the property. The court order signed by U.S. Bankruptcy Judge Erik Kimball requires Palm Beach Community and the bank to close the deal no later than Jan. 31, 2015. About Palm Beach Community Palm Beach Community Church, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-35141) on Oct. 20, 2013. The petition was signed by Raymond Underwood as president. The Debtor scheduled total assets of $14.6 million and total liabilities of $11.43 million. Palm Beach Community Church won permission to employ Robert C. Furr and the law firm of Furr and Cohen, P.A., as attorney; and Roy Wiley and Covenant Financial, Inc. dba SmartPlan Financial Services as accountants. In December 2013, the U.S. Trustee informed the Bankruptcy Court that it was unable to appoint a committee of creditors in the case. On Dec. 4, 2014, the Bankruptcy Court confirmed Palm Beach Community Church, Inc.'s Third Amended Plan of Reorganization; named Robert C. Furr, Esq., as disbursing agent; and scheduled a status conference on Feb. 19, 2015 at 2:00 p.m. The Third Amended Plan proposes to pay creditors from the Debtor's funds on hand, revenue from its preschool, Lease Agreements, revenues from the Borland Center, tithing and other donations from the Church members. The Plan also provides for the payment of administrative claims to be paid in full on the Effective Date of the Plan with respect to any such claim. PASSAIC HEALTHCARE: Has Interim Authority to Use Cash Collateral ---------------------------------------------------------------- Judge Christine M. Gravelle of the U.S. Bankruptcy Court for the District of New Jersey gave Passaic Healthcare Services, LLC, d/b/a Allcare Medical interim authority to use cash collateral securing its prepetition indebtedness. With regard to each of the Debtor's secured creditors: Lender Amount Outstanding ------ ------------------ Midcap Funding IV, LLC $6,320,388 Sequoia Healthcare Services, LLC $11,880,690 McKesson Medical-Surgical Minnesota Supply, Inc. $8,762,078 Essex Capital Corporation $2,640,376 LCA Bank Corporation $21,323 NMHG Financial Services, Inc. $830 Marlin Business Bank $32,341 Madela, Inc. $20,564 Philips Medical Capital, LLC $676,502 The amount of cash collateral to be used pending a final hearing or entry of a final order is not to exceed the amounts reflected in the Debtor's budget, a copy of which is available at http://bankrupt.com/misc/PASSAICcashcol0107.pdf,for the time period from Jan. 1, 2015, through Jan. 23, 2015. Objections to the Interim Order must be filed on or before Jan. 21 so that they can be considered at a final hearing to be held on Jan. 23, 2015, at 9:30 a.m. (EST). McKesson Medical-Surgical Minnessota Supply Inc. objected to the Debtor's cash collateral use request, complaining that the declaration of Winthrop Hayes, which was filed in support of the cash collateral motion, was woefully insufficient, bordering on the point of being intentionally deceptive. McKesson alleges that Mr. Hayes and the Debtor are acting to benefit the Debtor's majority stakeholder, insider, and putative junior secured creditor -- Sequoia Healthcare Services, Inc. -- to the detriment of two senior secured creditors -- McKesson and MidCap Financial, LLC. McKesson asks the Court not to approve the request until the Debtor makes a prima facie showing as to how it will provide adequate protection to McKesson or allow use of non-McKesson collateral. Essex Capital objected to the cash collateral motion because the Debtor has failed to demonstrate adequate protection to Essex including that the Debtor has failed to make provisions for any adequate payments to Essex. McKesson is represented by: Stacey L. Meisel, Esq. BECKER MEISEL LLC Eisenhower Plaza II 354 Eisenhower Parkway, Suite 1500 Livingston, NJ 07039 Tel: (973) 422-1100 Email: slmeisel@beckermeisel.com -- and -- Jeffrey K. Garfinkle, Esq. BUCHALTER NEMER A Professional Corporation 18400 Von Karman Avenue, Suite 800 Irvine, CA 92612 Tel: (949) 760-1121 Email: jgarfinkle@buchalter.com Essex is represented by: Curtis M. Plaza, Esq. Kevin J. Larner, Esq. Tara J. Schellhorn, Esq. RIKER, DANZIG, SCHERER, HYLAND & PERRETTI LLP Headquarters Plaza, One Speedwell Avenue Morristown, NJ 07962-1981 Tel: (973) 538-0800 Email: cplaza@riker.com klarner@riker.com tschellhorn@riker.com About Passaic Healthcare Based in Plainview, New York, Passaic Healthcare Services, LLC, doing business as Allcare Medical, is a full service durable medical equipment company specializing in clinical respiratory, wound care and support services. Passaic, which employs 200 individuals, has seven locations in New Jersey, New York and Pennsylvania. Passaic began operations in December 2010 after it acquired substantially all of the assets of C&C Homecare, Inc., and Extended Care Concepts through a bankruptcy sale under 11 U.S.C. Sec. 363. After acquiring 100% of the equity interests in Galloping Hill Surgical, LLC and Allcare Medical SNJ, LLC, Passaic began using "Allcare Medical" as trade name for its entire business, and discontinued marketing under the name C&C Homecare. Passaic Healthcare filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 14-36129) in Trenton, New Jersey, on Dec. 31, 2014. The case is assigned to Judge Christine M. Gravelle. The Debtor has tapped Joseph J. DiPasquale, Esq., and Thomas Michael Walsh, Esq., at Trenk, DiPasquale, Della Fera & Sodono, P.C., in West Orange, New Jersey, as counsel. The Debtor estimated $10 million to $50 million in assets. The Debtor's schedules of assets and liabilities and other incomplete filings are due Jan. 14, 2015. The Debtor's exclusive period to propose a plan expires on April 30, 2015. PASSAIC HEALTHCARE: Section 341(a) Meeting Scheduled for Feb. 19 ---------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Passaic Healthcare Services, LLC, will be held on Feb. 19, 2015, at 11:00 a.m. at Room 129, Clarkson S. Fisher Courthouse. Deadline for creditors to submit their proofs of claim will be on May 20, 2015. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Passaic Healthcare Based in Plainview, New York, Passaic Healthcare Services, LLC, doing business as Allcare Medical, is a full service durable medical equipment company specializing in clinical respiratory, wound care and support services. Passaic, which employs 200 individuals, has seven locations in New Jersey, New York and Pennsylvania. Passaic began operations in December 2010 after it acquired substantially all of the assets of C&C Homecare, Inc., and Extended Care Concepts through a bankruptcy sale under 11 U.S.C. Sec. 363. After acquiring 100% of the equity interests in Galloping Hill Surgical, LLC and Allcare Medical SNJ, LLC, Passaic began using "Allcare Medical" as trade name for its entire business, and discontinued marketing under the name C&C Homecare. Passaic Healthcare filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 14-36129) in Trenton, New Jersey, on Dec. 31, 2014. The case is assigned to Judge Christine M. Gravelle. The Debtor has tapped Joseph J. DiPasquale, Esq., and Thomas Michael Walsh, Esq., at Trenk, DiPasquale, Della Fera & Sodono, P.C., in West Orange, New Jersey, as counsel. The Debtor estimated $10 million to $50 million in assets and liabilities. The Debtor's schedules of assets and liabilities and other incomplete filings are due Jan. 14, 2015. The Debtor's exclusive period to propose a plan expires on April 30, 2015. PENNSYLVANIA ECONOMIC: Moody's Hikes Revenue Bonds Rating to B3 --------------------------------------------------------------- Moody's Investors Service upgraded two industrial revenue bonds issued by Pennsylvania Economic Development Financing Authority to B3 from Caa2. The outlook on these two instruments was changed to Stable from Rating Under Review. Ratings Rationale These upgrades level the rating on these instruments with the other rated unsecured obligations of US Airways Group, Inc., also rated B3. US Airways Group, Inc. guarantees the issuer's obligations under the issued bonds. Upgrades: Issuer: Pennsylvania Economic Dev. Fin. Auth. Senior Unsecured Revenue Bonds, Series 2010A and Series 2010B, Upgraded to B3, LGD5 from Caa2, LGD5 The principal methodology used in these ratings was Global Passenger Airlines 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. American Airlines Group Inc. is the holding company for American Airlines, Inc. and US Airways, Inc. Together with wholly owned and third-party regional carriers operating as American Eagle and US Airways Express, the airlines operate an average of nearly 6,700 flights per day to 339 destinations in 54 countries from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. US Airways Group, Inc. is a direct subsidiary of American Airlines Group, Inc. and the parent of US Airways, Inc. PEOPLE'S COMMUNITY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: The People's Community Health Centers, Inc. fdba Medhealth of Maryland, Inc. 1734 Maryland Avenue Baltimore, MD 21201 Case No.: 15-10228 Nature of Business: Health Care Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: Michael Stephen Myers, Esq. SCARLETT, CROLL & MYERS, P.A. 201 North Charles Street, Suite 600 Baltimore, MD 21201 Tel: 410-468-3100 Email: mmyers@scarlettcroll.com Total Assets: $3.04 million Total Liabilities: $6.73 million The petition was signed by William A. Green, managing agent. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mdb15-10228.pdf PORT AGGREGATES: Can't File Schedules Until January 30 ------------------------------------------------------ Port Aggregates Inc. asks the U.S. Bankruptcy Court for the Western District of Louisiana to extend the deadline to file its schedules of assets and liabilities, and statement of financial affairs until Jan. 30, 2015. The formal schedules of assets and liabilities, as well as the statement of financial affairs, were originally due Jan. 2, 2015. According to court documents, the Debtor and its subsidiaries -- including PAI Material Handling, LLC, PAI Precast, LLC, and PAI Ready Mix, LLC -- have a fully integrated cash management system that relies on cash collateral generated by these companies and a line of credit with Whitney Bank, as is necessary. The subsidiaries are not in bankruptcy and their business operations are independent of the Debtor; however, the entities generate consolidated financial statements, are co-lenders, and co-guarantors of the Whitney Bank debt. The Debtor and its subsidiaries estimate revenues of between $70-80 million in 2014. Given the size and complexity of their business operations, the debt shared by the companies, the fact that certain pre-petition invoices have not yet been received, the timing of the decision to file this bankruptcy case, and the extensive efforts that the Debtor's management and other professionals devoted to negotiating with key creditors leading up to filing this chapter 11 cases, the Debtor was unable to compile all of the information required to complete the schedules and statements prior to the petition date. According to the Debtor, given the urgency with which it sought chapter 11 relief and the numerous critical operational matters that the Debtor's accounting staff must address in the early days of this case -- including dealing with both Christmas and New Year's holidays -- the Debtor will not be in a position to complete the Schedules and Statements within the time specified in Bankruptcy Rule 1007(c). Completing the Debtor's schedules and statements will require the Debtor and its advisors to collect, review, and assemble large amounts of information. Nevertheless, recognizing the importance of the schedules and statements in this chapter 11 case, the Debtor intends to complete the schedules and statements as quickly as possible under the circumstances. About Port Aggregates Port Aggregates, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-51580) in Lafayette, Louisiana, on Dec. 19, 2014, without stating a reason. The Debtor estimated $10 million to $50 million in assets and debt. The Debtor is required to submit a Chapter 11 plan and disclosure statement by April 20, 2015. The case is assigned to Judge Robert Summerhays. The Debtor has tapped Louis M. Phillips, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan LLC, as counsel. The petition was signed by Andrew L. Guinn, Sr., president. PORT AGGREGATES: Shareholders Want Chapter 11 Case Dismissed ------------------------------------------------------------ Several shareholders of Port Aggregates Inc. ask the U.S. Bankruptcy Court for the Western District of Louisiana to dismiss the Debtor's Chapter 11 bankruptcy case. They contend that the case was not filed in good faith. A hearing is set for Jan. 27, 2015, at 10:00 a.m. at Courtroom, Lafayette, to consider the shareholders' request. According to the disgruntled shareholders, the Chapter 11 is an effort by the majority shareholders, officers, and directors to circumvent state law and state court proceedings to gain an unfair advantage. This case is designed to protect the officers and directors of the Debtor from being held accountable for their actions, the shareholders assert. The shareholders note that a motion for the appointment of an examiner is an attempt to thwart the clearly needed derivative action. The hope is that an examiner will find some basis upon which the officers and directors of the Debtor can rely in arguing against the continuation of a state court action. They state that the Debtor will be the beneficiary of the successful prosecution of the State Court Action, not anyone else except such benefit that might inure by virtue of being a shareholder of the Debtor. The Debtor stands to lose nothing through the successful prosecution of the State Court Action, they add. The shareholders are James P. Guinn and Timothy J. Guinn and William R. Guinn, Ellen Guinn Martel, Philip L. Guinn, and Nathaniel Stuart Guinn, Individually, and as Trustee for the Caroline T. Guinn Trust, the James Paul Guinn, Jr. Trust, the Joel M. Guinn Trust, the Laura Katherine Guinn Trust, the Christian J. Guinn Trust and the Anna C. Guinn Trust. The disgruntled shareholders retained as counsel: H. Kent Aguillard, Esq. H. KENT AGUILLARD, 141 S. 6th Street P.O. Drawer 391 Eunice, LA 70535 Tel: (337) 457-9331 Fax: (337) 457-2917 Email: kaguillard@yhalaw.com About Port Aggregates Port Aggregates, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-51580) in Lafayette, Louisiana, on Dec. 19, 2014, without stating a reason. The Debtor estimated $10 million to $50 million in assets and debt. The Debtor is required to submit a Chapter 11 plan and disclosure statement by April 20, 2015. The case is assigned to Judge Robert Summerhays. The Debtor has tapped Louis M. Phillips, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan LLC, as counsel. The petition was signed by Andrew L. Guinn, Sr., president. PRESIDIO INC: S&P Cuts Corp Credit Rating to 'B' on Apollo Buy-out ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Greenbelt, Md.-based Presidio Inc. to 'B' from 'B+' and removed it from CreditWatch, where S&P had placed it with negative implications on Dec. 2, 2014, following the announcement of the acquisition. The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to the company's proposed $600 million senior secured term loan due 2022 and $50 million revolving credit facility due 2020. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; lower half of the range) in the event of payment default. S&P also assigned its 'CCC+' issue-level rating and '6' recovery rating to the company's proposed $400 million senior unsecured notes due 2023. The '6' recovery rating indicates S&P's expectation for negligible recovery (0%-10%) in the event of payment default. The borrower will be Presidio Holdings Inc. The company also plans to issue a $200 million accounts receivable securitization facility due 2018, which S&P won't rate, and the borrower will be Presidio Capital Funding LLC. S&P will withdraw its ratings on Presidio's existing debt, which will be redeemed as part of the acquisition, after the transaction closes. "The downgrade reflects leverage in the low-6x area as of Sept. 30, 2014, pro forma for the transaction, up from actual leverage of 3.6x," said Standard & Poor's credit analyst Christian Frank. The rating also reflects the company's financial sponsor ownership, which has aggressive financial policies, in S&P's view, as well as its fragmented and competitive industry, supplier concentration, and moderate scale. The stable outlook reflects S&P's view that the company's ability to expand its relationship with existing customers, along with improving economic conditions, is likely to result in revenue growth and EBITDA expansion over the next 12 months. S&P could lower its rating if the company maintains leverage above the low-7x area on a sustained basis or if FOCF turns negative because of declines in profitability resulting from pricing pressure from competitors or suppliers, debt-financed acquisitions, or shareholder returns. S&P views an upgrade as unlikely, given its expectation that the company's financial sponsor ownership structure is likely to preclude a sustained leverage reduction. QUANTUM FOODS: Gets Approval to Settle Avoidance Claims ------------------------------------------------------- Quantum Foods, LLC and its official committee of unsecured creditors received approval from the U.S. Bankruptcy Court in Delaware to settle the company's so-called avoidance claims. The settlement agreements require the Village of Romeoville and four companies to pay back the money and assets they received from Quantum Foods within 90 days prior to its bankruptcy filing. The four companies are Doug Jeffords Co. Inc., Graphic Pallet and Transport, Marten Transport Services Ltd., and United Parcel Service. Quantum Foods will receive a total of $62,001 under the settlement agreements, according to court filings. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com/-- provides protein products made from beef, poultry and pork. Quantum Foods LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee has retained Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. REICHHOLD HOLDINGS: Has Until June 29 to Remove Lawsuits -------------------------------------------------------- U.S. Bankruptcy Judge Mary Walrath has given Reichhold Holdings U.S. Inc. until June 29, 2015, to file notices of removal of lawsuits involving the company that have not been automatically halted by its bankruptcy filing. About Reichhold Founded in 1927, Reichhold, with its world headquarters and technology center in Durham, North Carolina, USA, is one of the world's largest manufacturer of unsaturated polyester resins and a leading supplier of coating resins for the industrial, transportation, building and construction, marine, consumer and graphic arts markets. Reichhold -- http://www.Reichhold.com/-- has manufacturing operations throughout North America, Latin America, the Middle East, Europe and Asia. As of June 30, 2014, the Reichhold companies had consolidated assets of $538 million and liabilities of $631 million. In 2013, the companies generated $1.08 billion in net revenue, and as of the year-to-date August 2014, $750 million in net revenues. Reichhold Holdings US, Inc., Reichhold, Inc., and two U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-12237) on Sept. 30, 2014. The Reichhold Companies are pursuing a sale transaction that has two elements: (i) a consensual foreclosure by the holders of senior secured notes on their security interests in the common and preferred stock in Reichhold Holdings Luxembourg, S.a.r.l. ("RHL"), the ultimate holding company of all of the non-debtor affiliates that operate outside the U.S., and (ii) a purchase of certain assets of the Debtors by Reichhold Holdings International B.V. through a credit bid pursuant to Section 363 of the Bankruptcy Code. Cole, Schotz, Meisel, Forman & Leonard, P.A. (legal advisor) and CDG Group LLC (financial advisor) are representing Reichhold, Inc. Latham & Watkins LLP (legal advisor) and Moelis & Company (investment banker) are serving Reichhold Industries, Inc. Logan & Company is the company's claims and noticing agent. The cases are assigned to Judge Mary F. Walrath. The U.S. Trustee for Region 3 appointed seven creditors of Reichhold Holdings US, Inc. to serve on the official committee of unsecured creditors. The Creditors' Committee retains Hahn & Hessen LLP as lead counsel, Blank Rome LLP as co-counsel, and Capstone Advisory Group, LLC and Capstone Valuation Services, LLC, as financial advisor. An Ad Hoc Committee of Asbestos Claimants also appears in the case. The Ad Hoc Committee consists of three plaintiff law firms, Cooney & Conway, Gori Julian & Associates, P.C., and Simmons Hanly Conroy LLC, each in their capacity as tort counsel for clients of their firms who have asbestos-related personal injury or wrongful death claims against the Debtors. The Committee is represented by Mark T. Hurford, Esq., at Campbell & Levine, LLC; and Caplin & Drysdale, Chartered's James P. Wehner, Esq. and Jeffrey A. Liesemer, Esq. REVEL AC: ACR Energy Objects to Bid to Cut Power Deal ----------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that ACR Energy Partners LLC told the bankruptcy judge in New Jersey that Revel AC Inc. shouldn't be permitted to terminate their energy-supply agreement while simultaneously retaining the benefits. According to the report, ACR Energy responded to Revel's request to terminate its energy-supply agreement and lease by asking the court for permission to terminate all energy services to Revel, saying that continuing to bear the financial burden of Revel's Chapter 11 case is causing defaults on its own debt and increasing likelihood of its own bankruptcy. 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. RITE AID: Files Form 10-Q; Posts $104.8-Mil. Net Income in Q3 ------------------------------------------------------------- Rite Aid Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $104.8 million on $6.69 billion of revenues for the 13 weeks ended Nov. 29, 2014, compared with net income of $71.5 million on $6.35 billion of revenues for the 13 weeks ended Nov. 30, 2013. For the 39 weeks ended Nov. 29, 2014, the Company reported net income of $274 million on $19.7 billion of revenues compared with net income of $194 million on $18.9 billion of revenues for the 39 weeks ended Nov. 30, 2013. As of Nov. 29, 2014, the Company had $7.18 billion in assets, $8.97 billion in liabilities, and a $1.79 billion stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/8hdpnc About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain based in Camp Hill, Pennsylvania. Rite Aid disclosed net income of $118 million on $25.4 billion of revenue for the year ended March 2, 2013, as compared with a net loss of $369 million on $26.1 billion of revenue for the year ended March 2, 2012. * * * As reported by the TCR on March 1, 2013, Moody's Investors Service upgraded Rite Aid Corporation's Corporate Family Rating to B3 from Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At the same time, the Speculative Grade Liquidity rating was revised to SGL-2 from SGL-3. This rating action concludes the review for upgrade initiated on Feb. 4, 2013. As reported by the TCR on Oct. 2, 2013, Standard & Poor's Ratings Services said it raised its ratings on Rite Aid Corp., including the corporate credit rating, which S&P raised to 'B' from 'B-'. In the April 21, 2014, edition of the TCR, Fitch Ratings has upgraded its ratings on Rite Aid Corporation (Rite Aid), including its Issuer Default Rating (IDR) to 'B' from 'B-'. The upgrades reflect the material improvement in the company's operating performance, credit metrics and liquidity profile over the past 24 months. RUFFIN ROAD: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Ruffin Road Venture Lot 6 5850 Canoga Ave, Suite 400 Woodland Hills, CA 91367 Case No.: 14-15609 Chapter 11 Petition Date: December 23, 2014 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Maureen Tighe Debtor's Counsel: Dayna C Chillas, Esq. ARROW LEGAL SERVICES 3655 Ruffin Rd Ste 210 San Diego, CA 92123 Tel: 619-696-7196 Fax: 619-243-7266 Email: arrowlegalecf@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kevin Tucker, president. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb14-15609.pdf RUSSELL HOSPITAL: S&P Lowers Series 2006A Bonds Rating to 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'BB-' from 'BB+' on the Alexander City Special Care Facilities Financing Authority, Ala.'s series 2006A hospital revenue bonds issued for Russell Hospital Corporation (doing business as Russell Medical Center or RMC). The outlook is stable. "The lowered rating reflects the application of our U.S. Not-For-Profit Acute-Care Stand-Alone Hospital criteria published on Dec. 15, 2014," said Standard & Poor's credit analyst Santo Barretta. "The rating further supports our assessment of RMC's enterprise profile as vulnerable, highlighted by a high reliance on governmental payors, and its financial profile as adequate, given its thin revenue base and materially weak operations, specifically in the nine months ended Sept. 30, 2014," Mr. Barretta added. RMC is a 69-staffed-bed acute care hospital in Alexander City, Ala. SAN BERNARDINO, CA: Luxembourg Bank Sues for Payment on Bonds ------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reported that the bankrupt city of San Bernardino, Calif., was sued by a Luxembourg bank that bought more than $50 million of its bonds, arguing that city leaders have been unfairly paying a workers' pension fund but not to bondholders. According to the report, with the lawsuit, the bank is trying to force the city to repay the bonds in full if the city also makes full payments to its state-run employee pension fund. Dale Kasler, writing for the Sacramento Bee, reported that Ambac Assurance Corp., a New York bond insurer, and EEPK, the Luxembourg bank, sued San Bernardino on Wednesday in U.S. Bankruptcy Court in Riverside, Calif., arguing that San Bernardino shouldn't be paying its debt owed to the California Public Employees' Retirement System, also known as Calpers, when San Bernardino hasn't paid them a dime on debts totaling more than $59 million. About San Bernardino, Calif. San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. The City was granted Chapter 9 protection on Aug. 28, 2013. SHADOW STONE: Case Summary & Unsecured Creditor ----------------------------------------------- Debtor: Shadow Stone, L.L.C. 495 Seagull Beach Road Prince Frederick, MD 20678 Case No.: 15-10210 Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Hon. Paul Mannes Debtor's Counsel: Richard M. McGill, Esq. MCGILL & WOOLERY PO Box 358, 5303 West Court Dr. Upper Marlboro, MD 20773 Tel: (301) 627-5222 Email: mcgillrm@aol.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by James P. Poole, managing member. The Debtor listed Calvert County Treasurer as its largest unsecured creditor holding an unknown amount of claim. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/mdb15-10210.pdf SIGA TECHNOLOGIES: Could Face $190MM Hit in Smallpox Drug Dispute ----------------------------------------------------------------- Sara Randazzo, writing for Daily Bankruptcy Review, reported that the Delaware Court of Chancery ordered smallpox vaccine maker Siga Technologies Inc. must pay drug maker PharmAthene Inc. $190 million as part of a long-running licensing dispute that sent Siga into bankruptcy last year. According to the report, the Delaware Court's ruling sets damages owed to PharmAthene at $113.1 million plus interest. Siga and PharmAthene both said that they expect the total to reach above $190 million, the report related. About SIGA Technologies Publicly held SIGA Technologies, Inc., with headquarters in Madison Avenue, New York, is a biotech/pharmaceutical company that specializes in the development and commercialization of solutions for serious unmet medical needs and biothreats. SIGA's lead product is Tecovirimat, also known as ST-246, an orally administered antiviral drug that targets orthopoxviruses. SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 14-12623) on Sept. 16, 2014, in Manhattan. The case is assigned to Judge Sean H. Lane. The Debtor has tapped Weil, Gotshal & Manges LLP, as counsel, and Prime Clerk LLC as claims agent. The Debtor's Chapter 11 plan and disclosure statement are due Jan. 14, 2015. The initial case conference is due by Oct. 16, 2014. The Debtor disclosed total assets of $131,669,746 and $7,954,645 in liabilities as of the Chapter 11 filing. SIGA TECHNOLOGIES: Del. Court Issues Opinion in PharmAthene Suit ---------------------------------------------------------------- SIGA Technologies, Inc., disclosed that on Jan. 7, 2015, the Delaware Court of Chancery, acting on remand from the Delaware Supreme Court, issued a letter opinion in the litigation begun by PharmAthene, Inc. in 2006. The Court has directed PharmAthene to submit a revised form of judgment awarding PharmAthene a lump sum of $113 million plus prejudgment interest, costs and fees. SIGA estimates that, including pre-judgment interest through the date of SIGA's chapter 11 filing, the final judgment will be approximately $190 million. This opinion implements the Court's Aug. 8, 2014 decision on remand to reverse its own earlier findings that expectation damages are speculative, conditional and conjectural and, instead, to allow lump sum expectation damages based on hypothetical U. S. Government purchases of SIGA's smallpox drug in 2010 to 2015 that were supposedly anticipated in 2006. "We continue to believe the decision to enter the new judgment is not supported by the record or the law and we intend to appeal to the Supreme Court of Delaware," William J. Haynes II, SIGA's General Counsel, commented. Either party may appeal the portions of the trial court rulings that were unfavorable to that party within 30 days of entry of judgment by the court. SIGA currently intends to appeal the judgment, but no assurance can be given that any such appeal will be successful. About SIGA Technologies, Inc. Publicly held SIGA Technologies, Inc., with headquarters in Madison Avenue, New York, is a biotech/pharmaceutical company that specializes in the development and commercialization of solutions for serious unmet medical needs and biothreats. SIGA's lead product is Tecovirimat, also known as ST-246, an orally administered antiviral drug that targets orthopoxviruses. SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 14-12623) on Sept. 16, 2014, in Manhattan. The case is assigned to Judge Sean H. Lane. The Debtor has tapped Weil, Gotshal & Manges LLP, as counsel, and Prime Clerk LLC as claims agent. The Debtor disclosed total assets of $132 million and $7.95 million in liabilities as of the Chapter 11 filing. SOLAR POWER: Issues $20 Million Common Shares to Home Value ----------------------------------------------------------- Solar Power, Inc., announced the exercise of an option to purchase shares of its common stock by Home Value Holding Co., the lead investor in the Company's $48.25 million private placement, which was announced on Sept. 23, 2014. As a result, SPI authorized and issued 17,200,000 shares of its common stock for an aggregate purchase price of U.S. $20,125,000. The shares are being offered and sold upon reliance of Regulation S promulgated under the Securities Act of 1933, as amended, and are exempt from registration. About Solar Power Roseville, Cal.-based Solar Power, Inc., is a global solar energy facility ("SEF") developer offering its own brand of high- quality, low-cost distributed generation and utility-scale SEF development services. Primarily, the Company works directly with and for developers around the world who hold large portfolios of SEF projects for whom it serves as an engineering, procurement and construction contractor. The Company also performs as an independent, turnkey SEF developer for one-off distributed generation and utility-scale SEFs. Solar Power reported a net loss of $32.2 million in 2013 following a net loss of $25.4 million in 2012. The Company's balance sheet at Sept. 30, 2014, showed $113 million in total assets, $61.2 million in total liabilities and $51.7 million in total stockholders' equity. Crowe Horwath LLP, in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a current year net loss of $32.2 million, has an accumulated deficit of $56.1 million, has experienced a significant reduction in working capital, has past due related party accounts payable and a debt facility under which a bank has declared amounts immediately due and payable. Additionally, the Company's parent company LDK Solar Co., Ltd has experienced significant financial difficulties including the filing of a winding up petition on Feb. 24, 2014. These matters raise substantial doubt about the Company's ability to continue as a going concern, the auditors noted. SPECIALTY PRODUCTS: RPM Earns $69.8 Mil. in Fiscal Second Qtr. --------------------------------------------------------------- RPM International Inc. on Jan. 7 reported a 10% increase in net income and an 8% increase in earnings per diluted share on flat sales for its fiscal 2015 second quarter ended November 30, 2014. Second-Quarter Results Net sales of $1.07 billion were flat compared to last year. Consolidated EBIT (earnings before interest and taxes) increased 3.2%, to $120 million from $116 million in the fiscal 2014 second quarter. Fiscal 2015 second-quarter net income was up 9.8% to $69.8 million from $63.6 million in the fiscal 2014 second quarter. Earnings per diluted share increased 8.3% to $0.52 from $0.48 a year ago. "Second-quarter operating performance was mixed, with stronger sales in our businesses serving the U.S. commercial construction market offset by weaker results in Europe, a continued unfavorable year-over-year trend from our Kirker nail enamels business and the negative impact of foreign currency," stated Frank C. Sullivan, chairman and chief executive officer. Second-Quarter Segment Sales and Earnings During the fiscal 2015 second quarter, industrial segment sales grew 1.4% to $718.3 million from $708.7 million in the fiscal 2014 second quarter. Organic sales improved 0.7%, including 3.3% in foreign exchange translation losses, while acquisition growth added 0.7%. Industrial segment EBIT declined 5.9% to $79.0 million from $83.9 million in the same period a year ago. "Most of our European businesses are experiencing a challenging economic climate, negatively impacting our results. Additionally, the strong dollar has negatively impacted all of our international results upon translation. However, we had strong positive performance by our concrete admixture and commercial sealants companies, which serve the U.S. commercial construction market, and our line of remediation equipment for water and smoke damage. Additionally, our South American businesses are generating good results in their local currencies," Mr. Sullivan stated. RPM's fiscal 2015 second-quarter consumer segment sales declined 2.8% to $352.8 million from $362.8 million a year ago. Organic sales declined 4.2%, including foreign exchange losses of 1.3%, while acquisition growth added 1.4%. Consumer segment EBIT improved 19.1%, to $61.6 million from $51.7 million a year ago. The improvement in EBIT for RPM's consumer segment is primarily due to the reversal of a $17 million "earn-out" accrual relating to the Kirker acquisition. "As stated in the first quarter, Kirker continues to be challenged by a comparison to extremely strong prior-year performance. In anticipation of potential volatility in Kirker's earnings, our acquisition deal structure allows for performance-related payments to offset any shortfall in earnings. As a result, we reversed the $17 million earn-out accrual into income when it became clear that Kirker would not be able to meet its performance objectives this year," stated Mr. Sullivan. "Additionally, our large retail customers made aggressive inventory adjustments due to the harsh weather faced in early November. This was in reaction to last year's severe winter when they were caught off-guard and held excess inventory. We expect to benefit from a return to more normal inventory levels by our retail customers in the second half of the fiscal year." Unusual non-operating costs in this year's second quarter totaled $2.8 million pre-tax, and were related primarily to legal expenses incurred in conjunction with a Securities and Exchange Commission investigation of timing of expense accruals in the 2013 fiscal year, which did not affect full-year earnings, along with the Specialty Products Holding Corp. (SPHC) settlement, and a voluntary self-disclosure agreement with the state of Delaware for unclaimed property. Cash Flow and Financial Position For the first half of fiscal 2015, cash from operations was $55.3 million compared to $21.8 million a year ago. During last year's first quarter, the company made a contingent payment to the General Services Administration of approximately $45 million after-tax. Capital expenditures of $26.5 million compare to $34.6 million during the first half of last year. Total debt at November 30, 2014 was $1.43 billion, compared to $1.37 billion at November 30, 2013 and $1.35 billion at May 31, 2014. RPM's net (of cash) debt-to-total capitalization ratio was 44.8%, compared to 46.4% at November 30, 2013. At November 30, 2014, liquidity stood at $1.01 billion, including cash of $297 million and $718 million in long-term committed available credit. First-Half Sales and Earnings Fiscal 2015 first-half net sales improved 1.7% to $2.28 billion from $2.24 billion during the first six months of fiscal 2014. Consolidated EBIT increased 1.2% to $283.7 million from $280.4 million during the first six months of fiscal 2014. Net income was up 1.3% to $168.8 million from $166.7 million in the fiscal 2014 first half. Diluted earnings per share were $1.24, compared to $1.25 a year ago. First-Half Segment Sales and Earnings RPM's industrial segment fiscal 2015 first-half sales improved 3.6%, to $1.49 billion from $1.44 billion in the fiscal 2014 first half. Organic sales increased 2.6%, including net foreign exchange translation losses of 1.6%, while acquisition growth added 1.0%. Industrial segment EBIT was flat to last year at $184.1 million. First-half sales for the consumer segment declined 1.7% to $782.8 million from $796.2 million a year ago. Organic sales decreased 3.0%, including net foreign exchange losses of 0.5%, and acquisition growth added 1.3%. Consumer segment EBIT increased 2.9% to $138.2 million from $134.4 million in the first half of fiscal 2014. SPHC Reconsolidation The financial results of the company's SPHC subsidiary and its business units will be reconsolidated with RPM's results starting in the third quarter of fiscal 2015. The reconsolidation occurred as a result of the consummation of a plan of reorganization, which resulted in the formation of a trust under Section 524(g) of the United States Bankruptcy Code for the benefit of current and future asbestos personal injury claimants, as previously disclosed. The trust assumes all liability and responsibility for current and future asbestos claims against the entities emerging from bankruptcy. SPHC originally filed for bankruptcy protection on May 31, 2010 to permanently resolve asbestos claims against its Bondex International Inc. subsidiary. While RPM has continued to own SPHC and its subsidiaries during the bankruptcy process, their financial results were not consolidated with RPM's during that time. The trust was funded with an initial contribution of $450.0 million in cash from the Company's revolving line of credit. Payments to the trust, including this initial $450.0 million, will total $797.5 million in pre-tax contributions over the next four years and have a present value, after tax, of $485.0 million. The reconsolidated 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. Business Outlook "For the second half of our fiscal year, we expect our consumer segment to benefit from a return to more normal inventory levels at our retail customers with continued growth in consumer DIY spending, and anticipate that the decline in nail polish enamel sales will be much less severe. In our industrial segment, we do not see a near-term turnaround in the European economies and expect continued strengthening of the U.S. dollar to continue negatively impacting results on translation," stated Mr. Sullivan. "Based on these factors, for the second half of fiscal 2015, we expect to generate 6% sales growth in our consumer segment, driving an EBIT increase of 10% to 12%, and 2% to 3% sales growth in our industrial segment, driving an EBIT increase of 4% to 5%. Additionally, we will benefit from the reconsolidation of our SPHC businesses, which should add approximately $170 million in sales and $0.05 per diluted share to our fiscal 2015 second-half results." "Taking all of these elements into consideration, we have reduced our diluted EPS guidance for the year to $2.25 to $2.30. From a longer-term perspective, we are optimistic given the return of our SPHC businesses and the elimination of their asbestos liability. We can now accelerate growth investments in our businesses and more aggressively return capital to shareholders when appropriate," stated Mr. Sullivan. "Looking forward to fiscal 2016, our consolidated EPS guidance is a range of $2.70 to $2.80 per share." 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. STEREOTAXIS INC: Obtains FDA Clearance to Sell Vdrive ----------------------------------------------------- Stereotaxis, Inc., was granted 510(k) clearance by the Food and Drug Administration on Dec. 18, 2014, to market its Vdrive(R) with V-CAS Catheter Advancement System in the U.S, according to a regulatory filing with the U.S. Securities and Exchange Commission. The Company also has received regulatory approval of its Odyssey(R) system by the Japan Pharmaceuticals and Medical Devices Agency. About Stereotaxis Based in St. Louis, Missouri, Stereotaxis, Inc., is a manufacturer and developer of a suite of navigation systems in interventional surgical procedures. The Company's Epoch Solution is used in the treatment of arrhythmias and coronary artery disease. Stereotaxis reported a net loss of $68.7 million in 2013, following a net loss of $9.23 million in 2012. The Company's balance sheet at Sept. 30, 2014, the Company had $26.2 million in total assets, $40.0 million in total liabilities and a $13.8 million total stockholders' deficit. Ernst & Young LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred recurring operating losses and has a net capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. STOCKTON, CA: Issuers Risk Higher Costs with City ------------------------------------------------- Romy Varghese, writing for Bloomberg News, reported that Stockton, California, won permission to exit bankruptcy by paying certain investors less than they're owed. Other localities in the state may see borrowing costs rise as a result, the report said. According to the report, in the proposal approved by a judge in October, Stockton's certificates of participation, which are securities backed by leases, stand to deliver varying recovery rates as the city shields pensioners. By deterring investors in this type of debt, the outcome may raise interest rates for some California governments using the financial tool, the Bloomberg report said, citing Matt Fabian at Municipal Market Advisors and James Iselin at Neuberger Berman. About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. The Troubled Company Reporter, on Oct. 31, 2014, reported that Judge Christopher Klein confirmed the debt-adjustment plan by the city of Stockton, California, rejecting arguments that it unfairly discriminated among creditors by chopping a mutual fund's recovery to near zero while shielding city retirees from any impairment at all. * * * The Troubled Company Reporter, on Sep. 26, 2014, reported that Moody's Investors Service has affirmed the long-term ratings of the city of Stockton's (CA) water and sewer enterprises' debts at Ba1. Moody's have also changed the outlook on the city's water bond rating to developing from stable, while the developing outlook on the sewer system's rating remains the same. The TCR, on Nov. 10, 2014, reported that Moody's Investors Service has upgraded to Ba3 from Caa3 the City of Stockton's (CA) series 2006 lease revenue bonds and affirmed the city's 2007 pension obligation at Ca. Moody's have removed the developing outlook from the Series 2006 bonds and Moody's have removed the negative outlook from the Series 2007 bonds. The TCR, on Nov. 14, 2014, reported that Standard & Poor's Ratings Services raised its long-term rating and underlying rating (SPUR) to 'B-' from 'CCC' on the Stockton Public Financing Authority, Calif.'s series 2003A and 2003B certificates of participation (COPs) and its SPUR to 'B-' from 'CCC' on the authority's series 2006A lease revenue refunding bonds. Standard & Poor's also affirmed its 'CC' SPUR on Stockton Redevelopment Agency's series 2004 (arena project) revenue bonds. All series are appropriation obligations of Stockton. The outlook on the series 2003A and 2003B COP long-term rating and SPUR and on the 2006A lease revenue refunding bond SPUR is stable, and the outlook on the series 2004 revenue bond rating (arena project) is negative. STONEWALL GAS: S&P Assigns 'B-' CCR & Rates $350MM Sr. Loan 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Stonewall Gas Gathering LLC. The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating and '2' recovery rating to the company's $350 million senior secured term loan B due 2022. The '2' recovery rating indicates that lenders can expect substantial (70% to 90%) recovery if a payment default occurs. The 'B-' corporate credit rating reflects S&P's assessment of Stonewall's "vulnerable" business risk profile and "highly leveraged" financial risk profile. S&P's ratings also reflect the company's limited scale, lack of geographic diversity, and elevated construction risk over the next 12 months. Only partially offsetting these factors is the fee-based nature of the company's contracts once the system becomes operational. Stonewall also has high financial leverage, with expected 2016 debt to EBITDA above 5x. Stonewall is majority owned by M3 Midstream LLC, an investment vehicle for the Momentum Energy Group (which is majority owned by Yorktown Energy Partners). Stonewall is a single-asset gathering pipeline system located in the southwestern part of the Marcellus shale play. As such, it lacks geographic and basin diversity. "The stable outlook reflects our expectation that the company will complete the project on time and within budget and the interest reserve will cover debt service until construction is complete," said Standard & Poor's credit analyst Mike Llanos. S&P could lower the rating if liquidity becomes constrained as a result of cost overruns and the project falling materially behind schedule, warranting a downgrade into the 'CCC' category. S&P could consider higher ratings if the company completes the project on time and within budget while maintaining leverage below 5x. S&P could also consider higher ratings if the previously mentioned companies exercise their option for an ownership stake in the system and proceeds are used to pay down debt. SUN BANCORP: Amends 1.1 Million Common Shares Resale Prospectus --------------------------------------------------------------- Sun Bancorp, Inc., filed an amended Form S-3 registration statement with the U.S. Securities and Exchange Commission relating to the offering by Bridge Equities III, LLC, Endeavour Regional Bank Opportunities Fund II LP, PRB Investors, L.P., et al., of up to 1,133,144 shares of common stock of the Company. The Company will not receive any of the proceeds from the sale of any shares of common stock by the Selling Stockholders, but the Company will incur expenses in connection with the registration of these shares. The Company's common stock is listed and traded on the NASDAQ Global Select Market under the symbol "SNBC." The last reported sale price on Nov. 24, 2014, was $18.83 per share. A full-text copy of the Form S-3/A is available for free at: http://is.gd/UR2pdr About Sun Bancorp Sun Bancorp, Inc. (NASDAQ: SNBC) is a bank holding company headquartered in Vineland, New Jersey, with its executive offices located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service commercial bank serving customers through more than 60 locations in New Jersey. On April 15, 2010, Sun National Bank entered into a written agreement with the OCC which contained requirements to develop and implement a profitability and capital plan which provides for the maintenance of adequate capital to support the Bank's risk profile in the current economic environment. Sun Bancorp reported a net loss available to common shareholders of $9.94 million in 2013, a net loss available to common shareholders of $50.5 million in 2012, and a net loss available to common shareholders of $67.5 million in 2011. As of Sept. 30, 2014, the Company had $2.82 billion in total assets, $2.57 billion in total liabilities and $247 million in total shareholders' equity. SWEISS PETROL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sweiss Petrol, Inc. dba Reseda Mobil 18056 Saticoy St. Reseda, CA 91335 Case No.: 14-15679 Chapter 11 Petition Date: December 31, 2014 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Maureen Tighe Debtor's Counsel: Steven R Fox, Esq. LAW OFFICES OF STEVEN R. FOX 17835 Ventura Blvd Ste 306 Encino, CA 91316 Tel: 818-774-3545 Fax: 818-774-3707 Email: emails@foxlaw.com Total Assets: $1.74 million Total Liabilities: $2.81 million The petition was signed by Samia Sweiss, CEO. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb14-15679.pdf SYLVA CORP: Court Writes Checklist for Disputed Equipment Leases ---------------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that the U.S. Bankruptcy Appellant Panel for the Eighth Circuit, in a case involving a lease of personal property that expired before bankruptcy, wrote an opinion that reads like a checklist telling bankruptcy judges the sequence of rulings to make when a lessor of equipment files a disputed claim for rent accruing after bankruptcy. According to the report, the appellate panel reversed a bankruptcy judge's prior decision, saying that if the lower court concludes the arrangement was a true lease, the bankruptcy judge must follow Section 365(d)(5) of the Bankruptcy Code, which makes payment of rent mandatory 60 days after bankruptcy. Under Section 365, the burden is on the bankrupt to show that the equities of the case give grounds for denying an administrative claim, the report related. The case is GE Capital Commercial Inc. v. Sylva Corp. (In re Sylva Corp.), 14-6016, 2014 BL 334252, U.S. Eighth Circuit Bankruptcy Appellate Panel (St. Louis). T-L CHEROKEE: Judge Approves Valley View Loan Agreement ------------------------------------------------------- T-L Cherokee South LLC received approval from U.S. Bankruptcy Judge J. Philip Klingeberger to enter into a loan modification agreement with Valley View State Bank. Under the agreement, the maturity date for the $1.75 million loan provided by the bank will be extended to Dec. 1, 2017 from Dec. 1, 2014. Further, the interest rate for the loan will be reduced to 6% from 7.75%. T-L Cherokee availed the loan to pay the costs of the redevelopment of the Cherokee South Shopping Center in Overland Park, Kansas. The company bought the shopping center in 2004. A copy of the agreement is available without charge at http://is.gd/TVmcVB About T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10 million to $50 million. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. TARGETED MEDICAL: President Dave Silver Quits as No Deal Reached ---------------------------------------------------------------- The Employment Agreement dated Nov. 28, 2011, between Dr. David Silver, president and chief operating officer, and Targeted Medical Pharma, Inc., expired on Dec. 31, 2014. On Dec. 11, 2014, Dr. Silver notified the Company that if an agreement was not reached for continuation of his employment, then he intended to resign his position. Despite efforts by the Company and Dr. Silver to reach an agreement over the terms of his employment agreement, the parties were unable to reach an agreement. Dr. Silver completed his duties until Dec. 31, 2014. Dr. Silver's departure was not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices, according to a regulatory filing with the u.s. Securities and Exchange Commission. About Targeted Medical Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a specialty pharmaceutical company that develops and commercializes nutrient- and pharmaceutical-based therapeutic systems. Targeted Medical reported a net loss of $9.33 million on $9.55 million of total revenue for the year ended Dec. 31, 2013, as compared with a net loss of $9.58 million on $7.29 million of total revenue in 2012. Marcum LLP, in Irvine, CA, 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 significant net losses since its inception, and has an accumulated deficit of $23,022,407 as of Dec. 31, 2013, and incurred a net loss of $9,337,618 and negative cash flows from operations of $2,046,586 for the year ended Dec. 31, 2013. The Company's balance sheet at Sept. 30, 2014, showed $3.22 million in total assets, $11.92 million in total liabilities and a $8.70 million total stockholders' deficit. TIFFANI HILL: NWC Violated Automatic Stay, Montana Judge Says ------------------------------------------------------------- Judge Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana granted Tiffani Ann Hill's motion for sanctions against LPH, Inc., doing business as Northwest Collectors, for willful violation of the automatic stay. The Court also (1) disallowed as void NWC's claim for postpetition collection charges in the amount of $127; (2) awarding the Debtor $300 in emotional distress damages against NWC; (3) awarding the Debtor $300 in punitive damages against NWC; and (4) awarding the Debtor $312 in attorney's fees against NWC. The motion for sanctions arose from NWC's sending of a collection report, which included a scheduled debt of the Debtor to a credit reporting agency after the date of the filing of the Debtor's bankruptcy petition. NWC filed an objection. The Debtor had a charge account agreement with Beaches Beauty Supply of Missoula. The Debtor owed Beaches $381. Because the Debtor is delinquent on her account, Beaches turned it over to NWC for collection. A full-text copy of the Memorandum dated December 4, 2014, is available at http://bit.ly/1HDcXVmfrom Leagle.com. Tiffani Ann Hill filed a Chapter 7 bankruptcy petition (Bankr. D. Mont. Case No. 14-60302-7) on March 25, 2014. The Debtor is a mother with two young children, who was divorced at the time she filed her bankruptcy petition. She is self-employed at a nail salon she owns in Great Falls called "Tips by Tif" from which she earns most of her income, in addition to alimony/child support. TIGER AXLES: Court Confirms Reorganization Plan ----------------------------------------------- Judge Jeffrey P. Norman of the U.S. Bankruptcy Court for the Western District of Louisiana confirmed Tiger Axles, Inc.'s Plan of Reorganization dated October 17, 2014. The Court also approved the Debtor's Disclosure Statement pursuant to Section 1125(f) of the Bankruptcy Code. The Debtor is discharged from each debt or claim that arose against it prior the date of the Confirmation Order, provided that nothing in this Order or in the Plan will operate as a discharge of the Debtor from claims, obligations, or liabilities to be paid or performed under the Plan or any agreement executed in conjunction with the Plan. The Plan proposes to pay creditors of the Debtor from cash flow from its operations and, if necessary, capital contributions from its equity security holder. The Plan provides for three classes of secured claims, two classes of unsecured claims, and one class of equity security holders. Unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately one-hundred cents on the dollar. A full-text copy of the December 5, 2014 Confirmation Order is available at http://bit.ly/1BEkLCyfrom Leagle.com. Tiger Axles, Inc. filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-10896) on April 22, 2014. The Debtor was engaged in operating an axle and light custom trailer manufacturing facility and retail sales and services business located in Shreveport, Louisiana. TITAN ENERGY: Cancels Common Stock Registration ----------------------------------------------- Titan Energy Worldwide, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission to terminate the registration of its common stock under Section 12(g) of the Securities Exchange Act of 1934. Effective as of 10:20 a.m., Pacific Standard Time on Dec. 31, 2014, Titan Energy merged with and into PTES Acquisition II Corp., with PTES II surviving the merger. As a result of the merger, all of the Titan Energy's shares of common stock outstanding immediately prior to the merger were converted into the right to receive $0.0007 per share of outstanding common stock. Accordingly, as of Dec. 31, 2014, Titan Energy ceased to exist and there are no holders of record of common stock of the Company. PTES II has one holder of record of its common stock. Prior to the Merger, PTES Acquisition had completed the acquisition of 100% of the Series D Convertible Preferred Stock from 24 individual stockholders and owned 96% of the outstanding shares of Titan Energy's capital stock entitled to vote on a merger. About Titan Energy New Hudson, Mich.-based Titan Energy Worldwide, Inc., is a provider of onsite power generation, energy management and energy efficiency products and services. Titan Energy reported net profit of $108,200 on $21.9 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $1.65 million on $19.2 million of net sales during the prior year. The Company's balance sheet at March 31, 2014, showed $6.15 million in total assets, $10.3 million in total liabilities and a $4.15 million total stockholders' deficit. "The Company believes it can be profitable for the year 2014 as some of the factors that created the loss were due to extreme weather conditions and Management believes it has put into place new processes and procedures that should mitigate the impact of these types of conditions in the future. In addition, the Company is in the process of restructuring its balance sheet. If successful, this should allow the Company to gain access to capital at a reduced rate. However, the accumulated deficit and the notes that are in default raise substantial doubt as to the Company's ability to continue as a going concern," the Company stated in the Form 10-Q for the period ended March 31, 2014. TRUMP ENTERTAINMENT: Levine Gets $1.25MM Lien Past Icahn Entities ----------------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware granted in part the motion of Levine, Staller, Sklar, Chan & Brown, P.A., to fix the value and priority of, and allowing its claim as secured in full. Debtors Trump Plaza Associates, LLC, Trump Taj Mahal Associates, LLC, Trump Marina Associates, LLC, and their lenders -- Icahn Agency Services, LLC, Icahn Partners LP, Icahn Partners Master Fund, LP, and IEH Investments I LLC -- opposed the Motion. The Icahn Entities claim they hold a secured first lien against all of the Debtors' assets. But Judge Gross ruled that the Charging Lien attaches to the Debtors' cash, and that the Firm's Charging Lien, although secured, is behind the lien of the Icahn Entities. Prior to the Debtors' bankruptcy filing, in early 2008, the Debtors engaged the Firm to file tax appeals on their behalf in the Tax Court of New Jersey for casino hotel properties, which they owned. The Firm achieved a settlement in June 2012, which resulted in a reduction of the tax assessments on the Debtors' properties and a cash refund of $35.5 million in cash and $15 million in credits against future taxes due and owing for Trump Taj Mahal in calendar year 2013. The Firm had undertaken the representation pursuant to a written agreement, dated June 17, 2008, and the Firm agreed to be paid a reduced hourly rate, which would be credited against a contingency fee of 17.5% based on any tax savings from the appeals. As agreed, the Firm filed a Notice of Motion Establishing and Perfecting Attorney's Charging Lien with the Tax Court and served a copy on Stroock & Stroock & Lavan, the Debtors' present bankruptcy counsel. On December 24, 2012, the Tax Court entered an Order Establishing and Perfecting Levine Staller's Attorney's Charging Lien in the amount of the contingent fee. On July 31, 2014, the Debtors informed the Firm that they would not pay the last installment of $1.25 million of the Charging Lien. In response, on August 5, 2014, the Firm filed a Notice of Motion to Enforce its Perfected Charging Lien in the Tax Court. Although they opposed the motion, the Debtors unequivocally acknowledged they owed the $1.25 million to the Firm. A full-text copy of the Memorandum Opinion dated December 5, 2014, is available at http://bit.ly/1xsQYxafrom Leagle.com. 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 September 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. U.S. ESTATES: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: U.S. Estates, L.L.C. 6163 Main Street Voorhees, NJ 08043 Case No.: 15-10231 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: January 7, 2015 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Hon. Gloria M. Burns Debtor's Counsel: Robert H. Johnson, Esq. ROBERT H. JOHNSON, LLC 1818 Old Cuthbert Road, Suite 107 Cherry Hill, NJ 08034 Tel: 856-298-9328 Email: ecfmail@rhjlaw.com Total Assets: $250,000 Total Liabilities: $1.14 million The petition was signed by Raymond Persia, managing member. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/njb15-10231.pdf UNITED CONTINENTAL: 13 Senior FAs File Whistleblower Suit --------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reported that 13 senior flight attendants at United Continental Holdings Inc., who were fired last year for refusing to staff a plane bound for Hong Kong on security fears, filed a whistleblower complaint, seeking to be reinstated with back pay and compensatory damages. According to the Journal, citing the complaint with the U.S. Labor Department’s Occupational Safety and Health Administration, the attendants became aware, after a co-pilot conducted an external, "walk-around" inspection of the plane, that unknown persons had "written threatening words and drawn menacing images in an oil slick" in the plane’s tail cone, including the words "BYE BYE" and one smiling face and one with a "devilish" expression. Such markings could only be made by persons with security access to the plane and the airfield—and those with a special lift, because the location of the tail cone is 30 feet above the ground, the report related. * * * The Troubled Company Reporter, on Dec. 29, 2014, reported that Moody's Investors Service upgraded certain debt ratings of United Continental Holdings, Inc. ("UCH"), including the Corporate Family Rating to B1 from B2, and most of the ratings on the Enhanced Equipment Trust Certificates ("EETCs"). Moody's affirmed the senior secured corporate debt rating at Ba2, and downgraded the senior unsecured corporate debt rating to B3 from B2. The Speculative Grade Liquidity Rating is affirmed at SGL-1. The rating outlook is positive. UNIVERSAL CORP: Fitch Assigns 'BB' Preferred Stock Rating --------------------------------------------------------- Fitch Ratings has assigned a 'BBB-' rating to Universal Corporation's new senior unsecured credit agreement comprising a $430 million revolving credit facility, a $150 million five-year term loan A-1 facility, and a $220 million seven-year term loan A-2 facility. The credit facility may be expanded at the company's option in an amount up to $100 million, subject to certain conditions. Proceeds from the loans will be used to refinance certain existing debt, to provide general working capital, or for other general corporate purposes. Financial covenants are a maximum leverage ratio of 3.0 times (x) and a minimum net worth of $1 billion. KEY RATING DRIVERS Leading Global Position in Tobacco Leaf Industry Universal has the leading position in tobacco leaf procurement, and some modest diversification of its business portfolio. The company is diversified among the varieties of tobacco leaf offered as well as across key tobacco growing geographies. Globally, Universal competes with many smaller suppliers that can offer lower-priced goods due to lower overhead from a lesser commitment to agronomy services, which are a competitive strength for Universal and its main rival, Alliance One International, Inc. The two tobacco suppliers control approximately 60% of the global supply for tobacco leaf and essentially overlap in major tobacco marketplaces. Universal estimates that it handles 35%-45% of annual production in Africa, 15%-25% of Brazil, and 25%-35% of flue-cured and burley tobacco output in North America. The shared market concentration has brought additional supply/demand stability as the market peaks and valleys of tobacco leaf supply have lessened over time. Variable Tobacco Leaf Pricing Influences Profitability Universal, like other tobacco leaf suppliers, is subject to high business risk stemming from agronomic pricing affected by uncertainties including weather conditions, crop yields and quality, supply conditions in the industry, and changes to government tobacco policies. In fiscal 2014, earnings fell $58 million year-over-year from higher tobacco leaf costs, unfavorable foreign currency effects, and a tough comparison to fiscal 2013 that benefited from higher sales of carryover and uncommitted inventories. While Fitch had already anticipated a rough year, operating income of $178 million and EBITDA of $217 million were well below nominal levels of approximately $200 million and $240 million, respectively. Fitch sees margins rebounding in fiscal 2015 as prices should moderate from an oversupply of tobacco leaf in the marketplace, mainly from the U.S. and Europe manufacturers adjusting inventory purchasing to match a decline in cigarette sales in the regions. Fitch believes that pricing will offset stable to declining volume during the year. As such, Fitch expects overall flue-cured and burley leaf margins (including North America) to expand in fiscal 2015 as Universal realizes the benefits of more rational raw material pricing. In addition, the Brazilian leaf market may prove to be more stable this fiscal year, which should contribute to overall EBITDA margin improvement to more than 9%. Working Capital Needs Fluctuate Higher priced tobacco leaf also drives increased leverage from increased short-term borrowings, while pressuring cash flows. As such, free cash flow (FCF) can jump from positive to negative almost annually. FCF was negative $81.2 million in fiscal 2014, compared to $172.5 million in fiscal 2013, as greater tobacco inventories increased working capital usage at year-end. Working capital swung to a cash use of $164 million in fiscal 2014 from a source of $12 million in fiscal 2013. The higher tobacco inventories at the end of the past fiscal year should benefit cash flow upon sale throughout fiscal 2015. Nonetheless, Fitch expects Universal to generate negative FCF in fiscal 2015 for a second consecutive year primarily driven by increased capital spending to $80 million for continued expansion in Africa and construction of a new manufacturing plant for Carolina Innovative Food Ingredients. Commitment to Investment Grade Demonstrated with Debt Reduction Universal reduced total debt by nearly $80 million to maintain consistent leverage while earnings were depressed in fiscal 2014. Universal kept gross leverage (total debt to EBITDA) and FFO adjusted leverage for the year ending March 31, 2014 at 1.9 times (x) and 2.8x, respectively, which were below Fitch's expectations. The debt level of $419 million includes 100% equity granted to $213 million in convertible preferred stock per Fitch's hybrid security criteria. Seasonally high short-term financing for working capital needs stressed leverage at the end of fiscal second quarter, which should ease in conjunction with sold inventories in the second half of the year. Fitch sees a relatively steady debt load coupled with higher earnings yielding gross leverage under 2.0x at the end of fiscal 2015. Additionally, FFO adjusted leverage will fall around 3.0x in most years. Tobacco Industry Concentration Drives Customer Dependence A constant threat to leaf tobacco suppliers' operational performance is the possibility that the typically concentrated customer base expands vertical integration efforts, essentially bypassing the suppliers' expertise by negotiating directly with growers. Universal's top five customers - Philip Morris International, Imperial Tobacco, British American Tobacco, China Tobacco International, and Japan Tobacco - represented more than 60% of revenues over the last four years. Universal counters the concern through its long-standing relationships with the multitude of tobacco leaf producers. The company maintains and enhances its ties with farmers through experienced local management teams that include more than 800 agronomists and technicians who serve as crop advisors, assisting and training tobacco farmers on all aspects of compliant leaf production. Manufacturers, on the other hand, generally prefer to negotiate with tobacco suppliers rather than dealing with large numbers of farmers in the growing regions around the world. Solid External Liquidity Backstops Internal Cash Flow Volatility Universal's external sources of liquidity serve as strength while internal cash flow generation fluctuates due to inherent unpredictability of tobacco leaf pricing. The company had availability under its new $430 million revolving bank agreement maturing as of Dec. 31, 2014 and unused, uncommitted lines of credit that totaled $230 million at the end of the second fiscal quarter. Fitch recognizes the additional liquidity support from uncommitted lines of credit fully backstopped by available capacity under the revolving credit facility; however, Fitch does consider the uncommitted lines to be a weaker form of support. Modest liquidity support also comes from the company's committed inventory levels that typically represent 80% of total inventory. Access to sufficient liquidity in order to address variable working capital needs is a key credit consideration. Fitch anticipates no meaningful changes to dividend policy or share repurchase activity over the ratings horizon. Universal has modestly increased dividends for decades and repurchased minimal amounts of common shares over the past years. The company paid dividends of $46.7 million (not including the $15 million convertible perpetual preferred stock dividend) and $23.7 million in 2014 and the first half of 2015, respectively, and had net share repurchases of $13.7 million and $7 million, respectively, in the same periods. Future dividend increases and share buy backs that are not supported by sustained operating income increases or are outside of historical norms, would be concerning. RATING SENSITIVITIES Future developments individually or collectively, that may lead to negative rating action include: Fitch is comfortable with Universal operating with gross debt leverage around 2.0x at the current rating. However, rating pressure will arise if EBITDA compression and/or a stubbornly higher debt load lead to sustained unadjusted leverage exceeding 2.5x. A prolonged meaningful decrease in profitability may stem from an unexpected fall in demand arising from a loss of key customers, cigarette manufacturer vertical integration, or an unexpected significant secular decline. Lack of FFO coverage of capital spending and dividends, such that meaningful incremental debt funding becomes necessary would also pressure the rating. Future developments individually or collectively, that may lead to positive rating action include: Fitch sees no positive rating action over the intermediate term; however, Fitch will favorably view a commitment to operate with total debt leverage below 1.5x, coupled with consistent cash flow generation for multiple years such that FFO margin stays around 10%. In addition, materially increased diversification of the portfolio with the ability to maintain EBITDA margins at 12% is a credit positive. Fitch currently rates Universal as: -- Issuer Default Rating 'BBB-'; -- Senior unsecured credit facility 'BBB-'; -- Senior unsecured notes 'BBB-'; -- Convertible perpetual preferred stock 'BB'. The Rating Outlook is Stable. US COAL: Can File Chapter 11 Plan Until March 4 ----------------------------------------------- The Hon. Tracey N Wise of the U.S. Bankruptcy Court for the Eastern District of Kentucky extended the exclusive periods of Licking River Mining LLC and its debtor-affiliates to: a) file a Chapter 11 plan and disclosure statement until March 4, 2015; and b) solicit acceptances of that plan until May 4, 2015. About U.S. Coal and Licking River On May 22, 2014, an involuntary Chapter 11 petition was filed against Licking River Mining, LLC, before the United States Bankruptcy Court for the Eastern District of Kentucky. On May 23, 2014, an involuntary Chapter 11 petition was filed against Licking River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an involuntary Chapter 11 petition was filed against S.M. & J., Inc. On June 4, 2014, an involuntary Chapter 11 petition was filed against J.A.D. Coal Company, Inc. On June 12, 2014, the Court entered an order for relief in each of the bankruptcy cases. On June 10, 2014, an involuntary Chapter 11 petition was filed against U.S. Coal Corporation. On June 27, 2014, the Court entered an order for relief in U.S. Coal's bankruptcy case. On Nov. 4, 2014, Harlan County Mining, LLC, Oak Hill Coal, Inc., Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed petitions in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Chief Judge Tracey N. Wise. The Debtors are seeking to have their cases jointly administered for procedural purposes, meaning that upon entry of such an order all pleadings will be maintained on the case docket for Licking River Mining, LLC, Case No. 14-10201. U.S. Coal produces and sells thermal coal purchased primarily by utilities and trading companies and specialty coal purchased by various industrial customers and trading companies (known as "stoker" coal). U.S. Coal operates through two divisions: (1) the Licking River Division that was formed through the acquisition of LR Mining, LRR, and S.M. & J., and Oak Hill Coal, Inc. in January 2007 for $33 million., and (2) the J.A.D. Division that was formed through the acquisition of JAD and Fox Knob, and Sandlick Coal Company, LLC and Harlan County Mining, LLC in April 2008 for $41 million. Both the LRR Division and the JAD Division are located in the Central Appalachia region of eastern Kentucky. The LRR Division has approximately 26.3 million tons of surface reserves under lease. The JAD Division has 24.4 million tons of surface reserves, both leased and owned real property. At present, U.S. Coal has three surface mines in operation between the LRR Division and JAD Division. The Official Committee of Unsecured Creditors has tapped Barber Law PLLC and Foley & Lardner as attorneys. The Debtors are represented by Amelia Martin Adams, Esq., and Laura Day DelCotto, Esq. of Delcotto Law Group PLLC; and Dennis J. Drebsky, Esq., and Christopher M. Desiderio, Esq., of Nixon Peabody LLP. VERSO PAPER: Completes $1.4-Bil. Acquisition of NewPage ------------------------------------------------------- Stephanie Gleason, writing for Dow Jones' Daily Bankruptcy Review, reported that Verso Paper Corp. closed its $1.4 billion acquisition of competing paper giant NewPage Holdings Inc., nearly a year to the day after it first announced the deal. According to the DBR report, citing a press release, the newly combined company will be called Verso Corp., representing its "intention to broaden its business platform and seek alternative revenue streams." The company will continue to be run by Verso's current executive team, with David J. Paterson as president and chief executive, the DBR said. The New York Times' DealBook previously reported that Verso said that it would sell two paper mills to settle a government antitrust lawsuit over the $1.4 billion acquisition. According to the DealBook report, in a lawsuit filed in the United States District Court for the District of Columbia, the Justice Department said that a combination of Verso and NewPage, which had emerged from bankruptcy in 2012, would eliminate competition in the supply of high-quality coated publication papers used for magazines, catalogs, brochures and the like in North America. In addition, the merged company would control some 70 percent of the North American label-paper market, the lawsuit alleges, the report related. To settle the antitrust lawsuit, NewPage is selling its paper mills in Biron, Wis., and Rumford, Me., to a subsidiary of the Catalyst Paper Corporation, the DealBook said. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. An affiliate, Newpage Wisconsin System Inc., disclosed $509,180,203 in liabilities in its schedules. NewPage successfully completed its financial restructuring and has officially emerged from Chapter 11 bankruptcy protection pursuant to its Modified Fourth Amended Chapter 11 Plan, confirmed on Dec. 14, 2012, by the U.S. Bankruptcy Court for the District of Delaware in Wilmington. * * * The Troubled Company Reporter, on July 10, 2014, reported that Standard & Poor's Ratings Services lowered its corporate credit rating on Memphis, Tenn.-based Verso Paper Holdings LLC to 'CC' from 'CCC'. The outlook is negative. Moody's Investors Service, in June 2014, downgraded Verso Paper's corporate family rating (CFR) to Caa3 from B3 and probability of default rating (PDR) to Caa3-PD from Caa2-PD. Verso's liquidity rating was also lowered to SGL-4 from SGL-3. At the same time, Moody's lowered the ratings on Verso's $150 million asset based revolving loan (ABL) to B2 (LGD1 4%) from Ba3 (LGD1 4%), the $50 million revolving credit facility and the $418 million senior secured notes due 2019 rating to Caa1 (LGD2 25%) from Ba3 (LGD2 24%), the $272 million secured notes due 2019 to Caa3 (LGD4 55%) from B3 (LGD4 54%), the $396 million fixed rate second-lien notes to Ca (LGD5 78%) from Caa3 (LGD5 79%), the $13 million floating rate second-lien notes due 2014 to Ca (LGD6 91%) from Caa2 (LGD5 79%) and the $143 million subordinated notes to Ca (LGD6 94%) from Caa3 (LGD6 94%). All of the company's ratings remain under review with direction uncertain. The rating action reflects Moody's view that the announced agreement to acquire NewPage Corporation (NewPage, B1, under review for downgrade) is becoming less likely to occur as the Department of Justice continues its review, and as Verso has been unsuccessful in its distressed exchange offer that's a prerequisite of the acquisition. Therefore, the potential for a higher CFR of the merged company is waning. "We believe it very likely that Verso will default on its debt within the next year, either via a distressed exchange as part of its attempt to acquire NewPage, or via a filing if it fails to acquire NewPage", said Ed Sustar, Moody's lead analyst for Verso. About Verso Verso is a North American producer of coated papers, including coated groundwood and coated freesheet, and specialty products. Verso is headquartered in Memphis, Tennessee, and owns three paper mills located in Maine and Michigan. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising. Additional information about Verso is available on its Web site at http://www.versopaper.com/ VISCOUNT SYSTEMS: Issues 21.489 Series A Convertible Pref. Stock ---------------------------------------------------------------- Viscount Systems, Inc., on Dec. 31, 2014, issued a total of 21.489 Series A Convertible Redeemable Preferred Stock, par value $0.001 per share, to the outstanding holders of A Shares as dividend payments on the A Shares for the period ended Dec. 31, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. The A Shares issued are subject to the conversion and dividend rights as set forth in the Certificate of Designation, Preferences and Rights of the Series A Convertible Redeemable Preferred Stock dated June 5, 2012, as amended Oct. 17, 2012, and March 21, 2014. About Viscount Systems Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer, developer and service provider of access control security products. The Company's bank credit facility was suspended on December 30, 2011 due to the bank's assessment of the Company's financial position. Management has determined that the Company will need to raise a minimum of C$500,000 by way of new debt or equity financing to continue normal operations for the next twelve months. Management has been actively seeking new investors and developing customer relationships, however a financing arrangement has not yet completed. Short-term loan financing is anticipated from related parties, however there is no certainty that loans will be available when required. These factors raise substantial doubt about the ability of the Company to continue operations as a going concern. Dale Matheson Carr-Hilton LaBonte LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has an accumulated deficit of C$11.67 million for the year ended Dec. 31, 2013. The Company requires additional funds to meet its obligations and the costs of its operations. The Company reported a net loss of C$3.08 million on C$4.13 million of sales in 2013, compared with a net loss of C$2.68 million on C$3.6 million of sales in 2012. The Company's balance sheet at Sept. 30, 2014, showed $2.14 million in total assets, $5.74 million in total liabilities and a $3.59 million total stockholders' deficit. VYCOR MEDICAL: Fountainhead Reports 50% Stake as of Dec. 31 ----------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Fountainhead Capital Management Limited disclosed that as of Dec. 31, 2014, it beneficially owned 6,414,665 shares of common stock of Vycor Medical, Inc., representing 50 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/S5vglQ About Vycor Medical Boca Raton, Fla.-based Vycor Medical, Inc. (OTC BB: VYCO) -- http://www.VycorMedical.com/-- is a medical device company committed to making neurological brain, spinal and other surgical procedures safer and more effective. The Company's flagship, Patent Pending ViewSite(TM) Surgical Access Systems represent an exciting new minimally invasive access and retraction system that holds the potential for speedier, safer and more economical brain, spinal and other surgeries and a quicker patient discharge. Vycor's innovative medical instruments are designed to optimize neurosurgical site access, reduce patient risk, accelerate recovery, and add tangible value to the professional medical community. Vycor Medical reported a net loss of $2.47 million on $1.08 million of revenue for the year ended Dec. 31, 2013, as compared with a net loss of $2.93 million on $1.20 million of revenue for the year ended Dec. 31, 2012. The Company's balance sheet at Sept. 30, 2014, showed $4.45 million in total assets, $1.02 million in total liabilities and $3.43 million in total stockholders' equity. WASHINGTON MUTUAL: WMI Raises Close to $600MM to Pursue Buys ------------------------------------------------------------ WMI Holdings, the shell company left over from the failure of Washington Mutual Inc., said it had sold new convertible preferred stock to Citigroup Global Markets and KKR Capital Markets, Rami Grunbaum, writing for The Seattle Times, reports. Seattle Times relates that total proceeds were $598 million, but after expenses and fees the company will have about $568 million to spend. WMI Holdings Chairman Michael Willingham said in a U.S. Securities and Exchange Commission filing, "With this capital we intend to continue to pursue opportunities for acquisitions of companies with operations that are complemented by the experience and expertise of our board and management team." About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on September 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. WEST CORP: Names Jan Madsen as New Chief Financial Officer ---------------------------------------------------------- West Corporation has appointed Jan Madsen as its new chief financial officer and treasurer to replace Paul Mendlik, who had previously announced his plans to retire. Mr. Mendlik will remain the Company's CFO through the filing of the Company's 2014 Form 10-K and has agreed to a two-year consulting agreement post retirement to help ensure a smooth transition. As West's CFO, Ms. Madsen will be responsible for leading the Company's global accounting, finance and treasury functions. Ms. Madsen has nearly 30 years of professional experience in accounting and finance. She comes to West from Creighton University, where she had overall financial responsibility for the University. Ms. Madsen previously served as the chief financial officer for the $2 billion Financial Services Division of First Data Corporation. In her 14-year career at First Data, Ms. Madsen also managed many other operational and finance departments, including treasury and settlement operations, corporate financial planning and analysis and six sigma. Ms. Madsen graduated from the University of Nebraska-Lincoln with a major in Accounting and is a Certified Public Accountant. She is actively involved in the Omaha community, currently serving on the Board of Big Brothers Big Sisters of the Midlands. "I would like to thank Paul for his contribution to West over the past 12 years. Paul helped oversee the Company during a period of significant growth and change and leaves behind a highly profitable company with a strong financial foundation," said Tom Barker, chairman and chief executive officer of West Corporation. "I am excited to welcome Jan to West following an extensive search effort. Jan is a highly talented financial executive with deep experience both for a publicly traded company and in the not-for-profit sector. We look forward to Jan's leadership as we manage the Company through the next phase of its growth." In anticipation of Ms. Madsen's appointment, the Company entered into its standard form of indemnification agreement as well as an employment agreement with Ms. Madsen. Ms. Madsen also received an award of 37,500 shares of restricted stock granted under the terms of the West Corporation 2013 Long-term Incentive Plan and the Company's previously approved form of restricted stock award agreement, which award vests over a four-year period. Ms. Madsen's initial base salary under the Employment Agreement is $400,000 annually. A full-text copy of the Employment Agreement is available for free at http://is.gd/PI9cTK About West Corporation Omaha, Neb.-based West Corporation is a global provider of communication and network infrastructure solutions. West helps manage or support essential enterprise communications with services that include conferencing and collaboration, public safety services, IP communications, interactive services such as automated notifications, large-scale agent services and telecom services. West Corp posted net income of $143.2 million in 2013 as compared with net income of $126 million in 2012. As of Sept. 30, 2014, the Company had $3.92 billion in total assets, $4.61 billion in total liabilities, and a $685 million stockholders' deficit. * * * As reported by the TCR on June 21, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on West Corp. to 'BB-' from 'B+'. The upgrade reflects Standard & Poor's view that lower debt leverage and a less aggressive financial policy will strengthen the company's financial profile. In the April 4, 2013, edition of the TCR, Moody's Investor Service upgraded West Corporation's Corporate Family Rating to 'B1' from 'B2'. "The CFR upgrade to B1 reflects West's shift to a more conservative capital structure and financial policies as a publicly owned company," stated Moody's analyst Suzanne Wingo. WET SEAL: Hires Klee Tuchin as Restructuring Lawyers ---------------------------------------------------- Stephanie Gleason and Lillian Rizzo, writing for Dow Jones' Daily Bankruptcy Review, reported that Wet Seal Inc. has hired Klee, Tuchin, Bogdanoff & Stern LLP, as restructuring counsel to help the struggling teen retailer with a potential bankruptcy filing. As previously reported by The Troubled Company Reporter, Wet Seal said it would close 66% of its stores and lay off 3,695 employees in a last-ditch effort for the struggling teen retailer to stave off bankruptcy. Wet Seal has 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. The retailer had previously engaged Houlihan Lokey and FTI Consulting to help it explore financing alternatives. The retailer's store closings announcement follows a Jan. 2 revelation by the Foothill Ranch, Calif.-based mall-based chain that it had received a notice of default from Hudson Bay Master Fund Ltd., the holder of its senior convertible note. It has a forbearance agreement with the debt holder until Jan. 12. 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: To Close 66% of Stores to Avert Bankruptcy ---------------------------------------------------- Chelsey Dulaney, writing for The Wall Street Journal, reported that Wet Seal Inc. said it would close 66% of its stores and lay off 3,695 employees in a last-ditch effort for the struggling teen retailer to stave off bankruptcy. According to the Journal, Wet Seal said the decision to close the 338 stores came after an assessment of its financial condition left it no alternatives. As previously reported by The Troubled Company Reporter, citing The Wall Street Journal, Wet Seal 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. The retailer had previously engaged Houlihan Lokey and FTI Consulting to help it explore financing alternatives. Richard Collings, writing for The Deal, said Wet Seal's stock soared on the news nearly 111% in the Jan. 7 mid-morning trading to 12 cents per share, although still a small fraction of its 52-week high of $2.75 per share. The announcement, according to The Deal, follows a Jan. 2 revelation by the Foothill Ranch, Calif.-based mall-based chain that it had received a notice of default from Hudson Bay Master Fund Ltd., the holder of its senior convertible note. It has a forbearance agreement with the debt holder until Jan. 12, The Deal noted. About Wet Seal 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. WOODLAKE RESORT: Dam Unsafe, Must Lower Level of Lake by 3 Feet --------------------------------------------------------------- Steve DeVane at Fayobserver.com reports that state officials have ordered Woodlake Resort and Country Club to lower the level of its 1,200-acre lake by three feet because a 23-foot dam is unsafe. Fayobserver.com relates that the Company is also required to submit a plan by March 16, 2015, to fix or breach the dam, which has several cracks and a "void of unknown size at the bottom of the principal spillway." According to the report, Brad Cole, a regional supervisor for the department's land quality section said that state officials want the dam lowered because of problems with the spillway. "This is to relieve some of the stress off the dam," the report quoted Mr. Cole as saying. According to Fayobserver.com, failure to comply with the order could result in a fine of up to $500 a day. Fayobserver.com, citing Mr. Cole, states that the Company's officials have been cooperative. Mr. Cole said state officials realize the Company's bankruptcy could be complicating the Company's efforts to deal with the dam, Fayobserver.com reports. Woodlake Resort and Country Club is located off N.C. 690 between Vass and Spring Lake in North Carolina. It has two golf courses and the spring-fed lake with boating, swimming, fishing and water skiing. Woodlake also is home to the historical Oates House, which was built in 1792 in Fayetteville. The house was moved to the resort and renovated to serve as its clubhouse. Fayobserver.com recalls that the Company filed for Chapter 11 bankruptcy in September 2014, with court records showing it had $5.31 million in assets and $8.85 million in liabilities. [*] BOOK REVIEW: Competitive Strategy for Health Care Organizations ------------------------------------------------------------------- Authors: Alan Sheldon and Susan Windham Publisher: Beard Books Softcover: 190 pages List Price: $34.95 Review by Francoise C. Arsenault Order your personal copy today at http://bit.ly/1nqvQ7V Competitive Strategy for Health Care Organizations: Techniques for Strategic Action is an informative book that provides practical guidance for senior health care managers and other health care professionals on the organizational and competitive strategic action needed to survive and to be successful in today's increasingly competitive health care marketplace. An important premise of the book is that the development and implementation of good competitive strategy involves a profound understanding of change. As the authors state at the outset: "What may need to be done in today's environment may involve great departure from the past, including major changes in the skills and attitudes of staff, and great tact and patience in bringing about the necessary strategic training." Although understanding change is certainly important in most fields, the authors demonstrate the particular importance of change to the health care field in the first and second chapters. In Chapter 1, the authors review the three eras of medical care (individual medicine, organizational medicine, and network medicine) and lay the groundwork for their model for competitive strategy development. Chapter 2 describes the factors that must be taken into account for successful strategic decision-making. These factors include the analysis of the environmental trends and competitive forces affecting the health care field, past, current, and future; the analysis of the competitive position of the organization; the setting of goals, objectives, and a strategy; the analysis of competitive performance; and the readaptation of the business, if necessary, through positioning activities, redirection of strategy, and organizational change. Chapters 3 through 7 discuss in detail the five positioning activities that are part of the model and therefore critical to the development and implementation of a successful strategy: scanning; product market analysis; collaboration; restructuring; and managing the physician. The chapter on managing the physician (Chapter 7) is the only section in the book that appears dated (the book was first published in 1984). In this day of physician- owned hospitals and physician-backed joint ventures, it is difficult to envision the physician in the passive role of "being managed." However, even the changing role of physicians since the book's first publication correlates with the authors' premise that their model for competitive strategic planning is based exactly on understanding and anticipating change, which is no better illustrated than in health care where change is measured not in years but in months. These middle chapters and the other chapters use a mixture of didactic presentation, graphs and charts, quotations from famous individuals, and anecdotes to render what can frequently be dry information in an entertaining and readable format. The final chapter of the book presents a case example (using the "South Clinic") as a summary of many of the issues and strategic alternatives discussed in the previous chapters. The final chapter also discusses the competitive issues specific to various types of health care delivery organizations, including teaching hospitals, community hospitals, group practices, independent practice associations, hospital groups, super groups and alliances, nursing homes, home health agencies, and for-profits. An interesting quote on for-profits indicates how time and change are indeed important factors in strategic planning in the health care field: "Behind many of the competitive concerns.lies the specter of the for- profits. Their competitive edge has lain until now in the excellence of their management. But developments in the past half- decade have shown that the voluntary sector can match the for- profits in management excellence. Despite reservations that may not always be untrue, the for-profit sector has demonstrated that good management can pay off in health care. But will the voluntary institutions end up making the same mistakes and having the same accusations leveled at them as the for-profits have? It is disturbing to talk to the head of a voluntary hospital group and hear him describe physicians as his potential competitors." [*] UBS Whistle-Blower Birkenfeld Seeks Permit to Move to Europe ---------------------------------------------------------------- David Voreacos, writing for Bloomberg News, reported that Bradley Birkenfeld, the former UBS AG banker who won a $104 million whistle-blower award after serving time in U.S. prison for tax conspiracy, now wants to move back to Europe before his term of probation is set to end. According to the report, Birkenfeld asked a judge to end his probation with less than a year left or modify its terms so he can leave the U.S. The case is U.S. v. Birkenfeld, 08-cr-60099, U.S. District Court, Southern District of Florida (Fort Lauderdale.). ********* 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. 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 nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. 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 2015. 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 ***