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/raid1/www/Hosts/bankrupt/TCR_Public/150204.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 4, 2015, Vol. 19, No. 35 Headlines 400 WALNUT: Rift With 4th Walnut Assoc. Stays in Bankr. Court 5454 SOUTH EVERETT: Case Summary & 6 Largest Unsecured Creditors ADVANCED MICRO: Fitch Affirms 'B-' LT Issuer Default Rating AIR CANADA: S&P Raises CCR to 'B+'; Outlook Stable AL-HAFIZ LLC: Voluntary Chapter 11 Case Summary ALASKA COMMUNICATIONS: S&P Raises Rating on Sr. Sec. Debt to 'BB' ALTEGRITY INC: Finalizes Terms of Restructuring Support Agreement ALTEGRITY INC: To File Bankruptcy with Debt-for-Equity Swap AMARILLO BIOSCIENCES: Completes Reorganization, Exits Chapter 11 AMERICAN AIRLINES: Former Employee's $16.4MM Claim Disallowed ANNA SANDERS: Court Awards Fees and Costs to Two Talarchyk Firms ARCH COAL: Moody's Lowers Corporate Family Rating to Caa1 ARCHDIOCESE OF MILWAUKEE: Abuse Victims Oppose $10.3M Settlement ARVE ENG: Loses Appeal in Suit Over Convenience Store Purchase ASARCO LLC: Law Professors Stingy on Fees for Professionals BAYOU SHORES: Judge Says State Can Close Nursing Home BELLVIEW ENERGY: Case Summary & 9 Largest Unsecured Creditors BENJAMIN MASON: Parents' Transfer of Biz Constructively Fraudulent BLOOM LAKE: Has Initial CCAA Protection; FTI Named as Monitor BRANDYWINE REALTY: Fitch Affirms 'BB+' Issuer Default Rating BRIGHTER CHOICE: Fitch Cuts NY's $17MM Rev. Bonds Ratings to 'B+' BUMI INVESTMENT: U.S. Recognizes Singapore Proceedings C. WONDER: Marotta Gund to Provide Crisis Management Services C. WONDER: Wins Nod to Reject 21 Dark Store Leases CACHE INC: Operating Losses Sending Retailer to Chapter 11 CAESARS ENTERTAINMENT: Del. Judge Sends Bankr. Cases to Chicago CAESARS ENTERTAINMENT: Welcomes Call for Independent Examiner CAPITOL BANCORP: Denial of Restructuring Fee Claims Affirmed CHARLES ARNOLD: Court Vacates $15.15MM Judgment for PulseWave CHINA RECYCLING: Receives NASDAQ Bid Price Deficiency Notice CHRYSLER LLC: Qui Tam Suit Over Vehicle Warranties Dismissed CMR MORTGAGE: Court Allows MLG's 4th Fee Application for $194,805 CONNACHER OIL: S&P Lowers CCR to 'D' After Recapitalization Plan COYOTES HOCKEY: NHL Mostly Fails in Suing Former Owner CREDIT-BASED ASSET: Court Won't Allow Nelsons to File Late Claims CROWNROCK LP: Moody's Rates $300MM Senior Notes 'Caa1' DCP MIDSTREAM: Fitch Cuts Junior Subordinated Rating to 'BB' DELIAS INC: DLA Piper Approved as Bankruptcy Counsel DENDREON CORP: Asks Court to Extend Deadline to Remove Suits DENDREON CORP: Files Schedules of Assets and Liabilities DISH NETWORK: Auction Win May Negatively Impact Moody's Ba3 CFR DISH NETWORK: S&P Puts 'BB-' CCR on CreditWatch Negative ELLIOTT MANUFACTURING: Case Summary & 20 Top Unsecured Creditors FEDERAL RESOURCES: Meeting of Creditors Set for Feb. 5 FFS DATA: 11th Circ. Splits from 5th on Confirmation Res Judicata FLINTKOTE COMPANY: Ruling Against Frederick Place Claim Affirmed FURNITURE BRANDS: "Carter" Shareholder Class Suit Dismissed GENERAL MOTORS: Compensation Fund Receives 4,180 Claims GREEN FLEET: Case Summary & 20 Largest Unsecured Creditors GT ADVANCED: Apple to Build Data Command Center in Mesa, Ariz. GT ADVANCED: Wants Plan Filing Deadline Moved to June 30 GT ADVANCED: Wants to Have Until May 4 to Decide on Leases HIGHLAND COMMUNITY: Second Bank Failure in 2015 HIGHWAY TECHNOLOGIES: Wynne Systems to Get $160,000 Admin Claim HIPCRICKET INC: Proposes Canaccord as Investment Banker HIPCRICKET INC: Proposes Pachulski as Counsel HUGH BLACK-ST. MARY: Blomfield & Weaver to Face Value Place Suit IASIS HEALTHCARE: S-1 Filing No Impact on Moody's 'B2' CFR IHEARTCOMMUNICATIONS INC: Fitch Affirms 'CCC' IDR INTERGEN N.V.: S&P Affirms 'B+' CCR & Sr. Debt Rating IPC CORP: S&P Retains 'B' CCR Over $40MM Loan Upsize JAMES HARDIE: Moody's Assigns 'Ba2' Corporate Family Rating JAMES HARDIE: S&P Assigns 'BB-' CCR; Outlook Stable KALSON MARKETING: In Bankruptcy; Creditors' Meeting on Feb. 11 KIRK-HUGHES: Creditor Loses Appeal Over Claim Priority LEHMAN BROTHERS: Raises Estimate of Cash for Creditors to $90.6-Bil LEHMAN BROTHERS: Trustee Gets Approval of Pimco Settlement LIBERTY TOWERS: US Trustee to Continue Creditors' Meeting Feb. 13 LIFE UNIFORM: Seeks Dismissal of Ch. 11 Case LLS AMERICA: Trustee Wins C$228,900 Judgment Against Bjarnasons LLS AMERICA: Trustee Wins C$388,219 Judgment Against Toews MACKEYSER HOLDINGS: Court Confirms Ch. 11 Liquidating Plan MANAGED STORAGE: Dist. Judge Reinstates Clawback Suit v. Avnet MANITOWOC CO: S&P Revises Outlook to Negative & Affirms 'BB-' CCR MATTESON, IL: Moody's Withdraws B1 GOULT & B3 GOLT Ratings METAVATION LLC: GM Allowed $13.2MM Claim, But Can't Collect Now MICHAEL J. 662: Case Summary & 2 Largest Unsecured Creditors MIDAS INTERMEDIATE: New $100MM Notes No Impact on Moody's B2 CFR MINERAL PARK: Gets Approval to Sell Mine to Origin for $10-Mil. MONEY TREE: Innovate Loan Fails to Dismiss Plan Committee's Suit NEENAH FOUNDRY: Wis. Appeals Court Affirms Order in LIRC Dispute NETFLIX INC: Moody's Assigns B1 Rating on New Sr. Unsecured Notes NETFLIX INC: S&P Lowers CCR to 'B+'; Outlook Negative NEW YORK CITY OPERA: Picks Lower Bid, Sale Hearing Postponed NII HOLDINGS: Wants NIU Ch. 11 Case Jointly Administered NISKA GAS: Moody's Lowers Corporate Family Rating to Caa1 NISKA GAS: S&P Lowers Rating to 'B-'; Outlook Negative NRG ENERGY: Moody's Affirms Ba3 CFR & B1 Unsecured Notes Rating OAK KNOLL: Court Rejects Harris' Bid for Sale Commission ONE FOR THE MONEY: Section 341(a) Meeting Set for Feb. 26 PACKAGING DYNAMICS: S&P Affirms 'B' CCR & Revises Outlook PARADISE FARMS: Ga. Court Throws Out Harrell Appeal PLC CAPITAL: Fitch Raises 2034 Stock Rating From 'BB+' PRESIDIO HOLDINGS: Moody's Assigns Caa1 Rating on $150MM Notes PRESIDIO INC: S&P Retains 'B' CCR After Changes to LBO Financing PRINCETON OFFICE: Plymouth Loses District Court Appeal PROSPECT PARK: Seeks April 6 Extension of Solicitation Period PROVINCE GRANDE: $300,000 PEM Contribution Is Equity Infusion RADIOSHACK CORP: NYSE Moves to Delist Company RED ROCK: District Court Affirms $934K Award in Suit vs. Suffolk ROBIN GRATHWOL: North Carolina Judge Won't Revive 3 Lawsuits ROUNDY'S SUPERMARKETS: Moody's Cuts Corporate Family Rating to B3 SABINE OIL: S&P Raises CCR to 'B' & Removes From Watch Positive SARATOGA RESOURCES: Enters Into Forbearance Agreement with Lenders SEARS METHODIST: Four Homes Sold to Evergreen for $79.1 Million SERVICEMASTER COMPANY: Moody's Hikes Corp. Family Rating to B2 SK HOLDCO: S&P Retains 'B+' Rating Over $100MM Notes Add-On SLC INN: Wins Confirmation of Bankruptcy Exit Plan SOLYNDRA LLC: June 25 Discovery Cut-Off in Suit v. Suntech et al. SONDE RESOURCES: Files for Bankruptcy; Appoints FTI as Trustee STATE FISH: Court Issues Joint Administration Order SUNTECH POWER: June 25 Discovery Cut-Off in Solyndra Suit SWEPORTS LTD: Ill. Court Throws Out Suit Against Appraisal Firm TARGUS GROUP: Moody's Lowers Corporate Family Rating to Caa2 TKS LEASING: Case Summary & 4 Largest Unsecured Creditors TRUMP ENTERTAINMENT: Icahn Responds to Picketing Taj Mahal Workers TS EMPLOYMENT: Enter Ch. 11 Amid $100M Debt to IRS TS EMPLOYMENT: Realization Services' Kasoff to Serve as CRO USA BABY: Labor Dept. Wins Summary Judgment in ERISA Suit VERESEN MIDSTREAM: Moody's Assigns Ba3 Corporate Family Rating VESTCOM INT'L: Foxfire Deal No Impact on Moody's B2 CFR WESTERN REFINING: Moody's Assigns B3 Rating on $300MM Sr. Notes WESTERN REFINING: S&P Assigns 'B' CCR & Rates $300MM Sr. Notes 'B' WHITEHALL AVENUE: Ramada Worldwide Guaranty Suit Goes to Trial WPCS INTERNATIONAL: Settles New York Lawsuit for $1.2 Million [*] Activist Insight, Schulte Roth Release Investing Annual Review [*] S&P Inks $1.37-Bil. Settlement with Prosecutors [*] The Deal Announces Results of Q4 2014 Bankruptcy League Tables [*] U.S. Bankruptcy Judge Donald H. Steckroth to Join Cole Schotz ********* 400 WALNUT: Rift With 4th Walnut Assoc. Stays in Bankr. Court ------------------------------------------------------------- The U.S. District Court for the Eastern District of Pennsylvania declined to hear an adversary proceeding filed by debtor 400 Walnut Associates, L.P., et al., against 4th Walnut Associates, L.P., et al., over its collapse. District Judge Gerald Austin McHugh denied the motion of defendants 4th Walnut, Ivy Realty LII, LLC, and Ivy Realty Services, LLC for withdrawal of the bankruptcy reference in the adversary proceeding pursuant to 28 U.S.C. Sec. 157(d) and Rule 5011(a) of the Federal Rules of Bankruptcy Procedure, saying the Bankruptcy Court should continue to hear the case. "Having reviewed the extensive history of core and non-core proceedings adjudicated by Bankruptcy Judge Stephen Raslavich and upon consideration of the relevant factors recognized in this Circuit, I conclude that Defendants have not met their burden for establishing cause to withdraw the underlying bankruptcy proceedings to district court. Accordingly, I will deny the Motion," Judge McHugh said. 400 Walnut sought Chapter 11 protection in 2010. Its main asset involved was a building located at 4th and Walnut Street in Philadelphia. 4th Walnut filed a proof of claim against the Debtor's bankruptcy estate on October 15, 2010. Judge Raslavich has presided over this case since its inception in Bankruptcy Court, including administering Debtor's bankruptcy case, confirming its Chapter 11 Plan, and issuing five substantive written opinions from 2011 to 2014. The parties agree that the adversary proceeding is still in its early stages of litigation, as discovery has yet to be completed. The Debtor maintains that considerable pretrial work will need to be undertaken, which the Bankruptcy Court "is more than capable of overseeing." The Debtor and John Turchi as Plaintiffs, seek more than $6.8 million from 4th Walnut and Ivy Services as defendants, and Sovereign Bank, 4th Walnut's predecessor-in-interest. The Plaintiffs allege that the Defendants and Sovereign engaged in tortious conduct and repudiated a forbearance agreement that was reached between the Debtor and Sovereign on January 29, 2010. The Plaintiffs further claim that Sovereign "fraudulently induced Plaintiffs to enter into the Forbearance Agreement, in reliance upon which Plaintiffs performed for more than five months, materially changing their business operations and banking relationships, and delaying filing for bankruptcy for the Bank's benefit." The adversary proceeding commenced in late 2010. The Debtor originally filed an eight count complaint, which was largely dismissed by the Bankruptcy Court for failure to state a claim. However, the Bankruptcy Court later sanctioned Sovereign for discovery misconduct, as it wrongfully withheld key documents in response to the Debtor's subpoenas, which were belatedly produced via Court Order. The Plaintiffs filed an Amended Complaint against the Defendants and Sovereign, asserting eight causes of action, predominantly consisting of state law claims, including breach of contract, conspiracy, tortious interference with contractual relations, fraudulent and negligent misrepresentation, aiding and abetting fraud, as well as an objection to the 4th Walnut Claim in the bankruptcy case. The Defendants and Sovereign initially responded to the Amended Complaint by filing motions to dismiss in Bankruptcy Court. On March 12, 2014, Judge Raslavich denied both motions in a comprehensive opinion. The Defendants have not demanded a jury trial. A copy of the District Court's January 28, 2015 Memorandum is available at http://is.gd/oT2Lsjfrom Leagle.com. 400 Walnut Associates, L.P., are represented by: Steven M. Coren, Esq. David M. Devito, Esq. KAUFMAN COREN & RESS PC Two Commerce Square, Suite 3900 2001 Market Street Philadelphia, PA 19103 Tel: 215 735 8700 Fax: 215 735 5170 E-mail: scoren@kcr-law.com ddevito@kcr-law.com 4th Walnut Associates, L.P., et al. are represented by: A. Grant Phelan, Esq. Rona J. Rosen, Esq. KLEHR HARRISON HARVEY BRANZBURG & ELLERS, LLP 1835 Market Street - Suite 1400 Philadelphia, PA 19103 Tel: 215-569-4145 Fax: 215-568-6603 E-mail: gphelan@klehr.com rrosen@klehr.com About 400 Walnut 400 Walnut Associates, L.P., owns the Green Tree Apartment Building, a 67-unit luxury apartment building with one commercial unit located on a 0.23-acre site at 400-414 Walnut Street, Philadelphia. 400 Walnut filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-16094) on July 23, 2010. Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer Karalis P.C., represent the Debtor. In its schedules, the Debtor disclosed $3,971,481 in assets and $17,530,958 in liabilities. Affiliates 23S23 Construction, Inc. (Bankr. E.D. Pa. Case No. 09-12652) and Carriage House Condominiums, LP (Case No. 09-12647) filed separate Chapter 11 petitions in April 2009. 5454 SOUTH EVERETT: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 5454 South Everett L.L.C 5454 South Everett Chicago, Il 60615 Case No.: 15-03376 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Jack B. Schmetterer Debtor's Counsel: William L Needler, Esq. WILLIAM L. NEEDLER AND ASSOCIATES 555 Skokie Blvd Ste 500 Northbrook, IL 60062 Tel: 847 559-8330 Fax: 847 559-8331 Email: williamlneedler@aol.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Daniel Crisan, manager. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb15-03376.pdf ADVANCED MICRO: Fitch Affirms 'B-' LT Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) for Advanced Micro Devices Inc. (NYSE: AMD) at 'B-'. The Rating Outlook is Stable. Fitch's actions affect approximately $2.6 billion of total debt, including the undrawn portion of the company's revolving credit facility (RCF). A full list of ratings follows the end of this commentary. The ratings and Outlook reflect Fitch's expectations that despite intermediate-term product momentum and the company's ongoing business transformation, revenue visibility remains limited and annual free cash flow (FCF) generation will be volatile. However, AMD's recent refinancing and restructuring provides headroom for modest operational shortfalls. Fitch believes AMD will benefit from improving economic conditions and a stabilizing overall PC market, although Intel's latest offerings will continue to dominate the premium and ultra-mobile categories. In the near term, Fitch expects AMD will face low double-digit revenue decline, driven by weaker GPU sales through its Add-in-Board channel. Over the intermediate-to-long term, Fitch believes new product launches, particularly in the emerging ARM-based semiconductor market, will support low- to mid-single-digit revenue growth. Over the intermediate term, Fitch expects operating EBITDA margins will remain in the high single-digit range, benefitting from lower fixed costs and the resumption of low single-digit growth following an initial decline in 2015. Fitch believes longer-term profitability will remain volatile, but incremental restructuring is likely should the company's business transformation lag targets. AMD's recent restructuring efforts have pared down over $200 million in quarterly operating expenses. With restructuring largely complete, Fitch expects further margin appreciation would be predicated on improving revenue growth and positive operating leverage. Fitch expects mostly flat FCF in 2015 after making a $212 million payment to GLOBALFOUNDRIES (GF) in the first quarter of 2015 for its take-or-pay wafer supply agreement (WSA). Fitch believes AMD's FCF will remain lumpy through the intermediate term, due to revenue volatility and ongoing payments related to the WSA with GF. Fitch projects AMD will exit 2015 with cash just above its $1 billion target level. Fitch believes AMD may likely use excess cash above its target $1 billion level for tuck-in acquisitions to accelerate its penetration into target markets. AMD lowered its minimum cash requirement to $600 million from $700 million in 2013, due to the company's expectations for enhanced revenue visibility. Credit protection measures should remain volatile with leverage (total debt-to-operating EBITDA) and interest coverage (operating EBITDA-to-gross interest expense) ranging from low- to mid-single-digits over the next few years. Fitch estimates leverage and interest coverage were 5.1x and 2.5x for the latest 12 months (LTM) ended Dec. 27, 2014, respectively, versus 5.0x and 2.3x for the comparable prior year period. RATINGS SENSITIVITIES Negative rating actions could result from: -- Substantial FCF usage, resulting in cash balances declining toward the $600 million minimum level. Fitch believes this could be due to greater than expected average selling price (ASP) erosion for graphics APUs or stalled traction in semi-custom servers and non-legacy PC businesses. -- Fitch's expectations for EBITDA margins declining to near or below 7% on a sustained basis, driven by increased competition in new and traditional markets, and leading to fewer design wins and forced price cuts. Fitch believes incremental positive rating actions could result from enhanced revenue visibility and expectations for consistent FCF through the cycle, both the result of AMD's successful business transformation. Fitch believes a shift in AMD's business mix toward 50% or more in new market exposure while maintaining stability (or achieving growth) in the company's legacy markets would be a credit positive. In addition, Fitch believes an upgrade would be predicated on: -- Expectations for total leverage to remain near or below 4.5x; -- Fitch's expectations for sustained operating EBITDA margins above 10%, likely as a result of increased penetration into new markets. RATINGS DRIVERS: Ratings are supported by AMD's: -- Role as a credible alternative volume chip supplier for PCs, a large albeit shrinking market, particularly for consumer PCs; -- Significant intellectual property (IP) for APUs and GPUs, which underpin AMD's business transformation; -- Outsourced manufacturing model, relieving the company from significant investments in leading edge manufacturing capabilities and strengthening FCF. Ratings concerns include AMD's: -- Lack of revenue visibility, which should improve if the company's business transformation is successful; -- Challenges for foundry partners to keep pace with Intel's leading edge manufacturing capabilities, potentially resulting in structural cost and performance disadvantages for future products; -- Volatile profitability and FCF, due to mostly short technology and product cycles and Intel-driven pricing pressures; -- Significantly less financial flexibility than that of key competitors, including Intel, NVIDIA and Qualcomm. Fitch believes liquidity was sufficient as of Dec. 27, 2014, and consisted of: -- $805 million of cash and cash equivalents, around 90% of which was located in the U.S.; -- $235 million of marketable securities; -- A $500 million senior secured RCF due 2018, of which $370 million was available at Dec. 27, 2014. Total debt was $2.2 billion at Dec. 27, 2014 and consisted primarily of: -- $130 million outstanding on a $500 million senior secured RCF due 2018; -- $42 million of 6% senior unsecured convertible notes due 2015; -- $600 million of 6.75% senior notes due 2019; -- $450 million of 7.75% senior unsecured notes due 2020; -- $475 million of 7.5% senior unsecured notes due 2022; and -- $500 million of private placement senior notes due 2024. AMD's Recovery Ratings (RRs) reflect Fitch's belief that the company would be reorganized as a going concern rather than liquidated in a bankruptcy scenario. To arrive at a going concern value, Fitch believes AMD would: i) reorganize businesses serving target markets (Enterprise, Embedded, and Semi-Custom, graphics chips, and APUs), and ii) wind down the legacy PC business. To reorganize the business, Fitch starts with a $306 million post-restructuring operating EBITDA and applies a 4x multiple to arrive at a going concern value of $1.22 billion. Fitch assumes value for the legacy-PC business is de minimis, given expectations that AMD would contribute key IP to the graphics business. Fitch believes the AMD's post-reorganization RCF would be roughly half of current levels, given Fitch's expectations that a reorganized AMD would be meaningfully smaller in size. The $250 million senior secured RCF would then recover 100%, resulting in an 'RR1' rating. Fitch estimates the approximately $2.1 billion of unsecured claims recover approximately 41%, resulting in recovery ratings of 'RR4'. Fitch affirmed AMD's ratings as follows: -- Long-term IDR at 'B-'; -- Senior secured RCF at 'BB-/RR1'; -- Senior unsecured debt at 'B-/RR4'. AIR CANADA: S&P Raises CCR to 'B+'; Outlook Stable -------------------------------------------------- Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on Montreal-based Air Canada to 'B+' from 'B'. The outlook is stable. "We base the upgrade on our expectation of continued improvement in Air Canada's credit measures, despite heavy capital expenditures," said Standard & Poor's credit analyst Jamie Koutsoukis. At the same time, Standard & Poor's raised its ratings on the company's first-lien secured debt to 'BB' from 'BB-', as well as its rating on the company's unsecured debt to 'B' from 'B-'. The recovery ratings on the first-lien secured debt are unchanged at '1' and on the unsecured debt are unchanged at '5' The recovery rating on the company's second-lien bonds has been revised to a '1' from a '5' largely based on increased valuations of the Air Canada routes to Japan, Korea, and China, and pledged airport slots. As a result, S&P raised its issue-level rating on the second-lien bonds to 'BB' from 'B-'. The ratings on the series 2013-1 class B enhanced equipment trust certificates (EETCs) have also been raised by one notch to 'BBB-' from 'BB+' and on the series 2012-1 class C EETCs to 'BB-' from 'B+'. Finally, Standard & Poor's affirmed its 'A' issue-level rating on the series 2013-1 class A EETC as per S&P's criteria as its rating on the liquidity provider constrains its rating on the certificates. Air Canada reported strong earnings in the first three quarters of 2014, and S&P expects this trend will continue in 2015. The company is benefiting from generally positive revenue conditions in the North American airline industry, as well as execution of its cost-cutting initiatives. Air Canada is Canada's largest domestic and international full-service airline. The company is also the 15th largest commercial airline in the world, serving more than 35 million customers annually. As of Sept. 30, 2014, Air Canada operated a mainline fleet of 171 aircraft. In addition, it has capacity purchase agreements with regional airlines that operate under Air Canada Express, and in 2013 it launched Air Canada Rouge, a leisure carrier and a wholly owned subsidiary of Air Canada. The stable outlook reflects S&P's expectation that, although Air Canada will likely increase debt in 2015 as it finances it new aircraft purchases, it will continue to benefit from cost cutting and the airline industry's generally favorable revenue environment, and that its credit ratios will remain in the aggressive risk financial profile, namely funds from operations (FFO) to debt to remain above 12%. S&P could lower the ratings if the company's operating performance deteriorates, resulting in FFO to debt falling to near or below 12%. This could result from weaker demand, or an increase in operating costs that reduce profitability. Although S&P considers an upgrade unlikely in the near term, it could raise the ratings if debt reduction and rising cash flow result in FFO to debt exceeding 25% and free operating cash flow to debt exceeding 10%, and S&P believes the ratios will remain at those levels. Alternatively, S&P could raise the rating if it reassess its view of Air Canada's business risk profile, based on consistent and improved margins, to "fair" from the current "weak" assessment. AL-HAFIZ LLC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Al-Hafiz, LLC 4640 Nutmeg Ypsilanti, MI 48197 Case No.: 15-41324 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Hon. Phillip J Shefferly Debtor's Counsel: David I. Goldstein, Esq. WASHTENAW LEGAL CENTER, PC 4930 Washtenaw Ann Arbor, MI 48108 Tel: 734-528-9886 Fax: 734-528-9887 Email: dstinger2684@sbcglobal.net Total Assets: $2 million Total Liabilities: $164,054 The petition was signed by Sadia Zafar, manager. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. ALASKA COMMUNICATIONS: S&P Raises Rating on Sr. Sec. Debt to 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its issue-level rating on Anchorage, Alaska-based integrated communications services provider Alaska Communications Systems Group Inc.'s (ACS) senior secured debt (issued by Alaska Communications Systems Holdings Inc.) to 'BB' from 'BB-' and revised the recovery rating on this debt to '1' from '2'. The '1' recovery rating indicates S&P's expectation for very high (90% to 100%) recovery for secured lenders in the event of payment default. S&P expects the company will use net proceeds from the divestiture of its remaining one-third interest in Alaska Wireless Network LLC (AWN) to repay existing secured debt. S&P's 'B+' corporate credit rating and stable outlook on ACS remain unchanged. As a result of the transaction, S&P estimates that adjusted pro forma 2015 leverage will be in the low-4x area, somewhat lower than S&P's base-case forecast of about 5x. Despite the reduction in leverage, S&P is not changing its "aggressive" financial risk profile assessment, especially since it expects substantially lower levels of free operating cash flow over the next two years, partly due to the elimination of the company's preferred distribution it would receive from the joint venture. RATINGS LIST Alaska Communications Systems Group Inc. Corporate Credit Rating B+/Stable/-- Upgraded; Recovery Rating Revised To From Alaska Communications Systems Holdings Inc. Senior Secured BB BB- Recovery Rating 1 2 ALTEGRITY INC: Finalizes Terms of Restructuring Support Agreement ----------------------------------------------------------------- Altegrity, Inc. on Feb. 3 disclosed that, after weeks of constructive discussions with its secured lenders, the Company has finalized the terms of a restructuring support agreement ("RSA") with holders of more than $1.3 billion of secured debt, consisting of over 70 percent of the Company's first lien secured debt and approximately 95 percent of the Company's second and third lien secured debt. Implementation of the transactions described in the RSA will significantly deleverage the Company's balance sheet and improve its capital structure. As part of the restructuring described in the RSA, the Company's second and third lien noteholders will convert their debt into equity, becoming the new majority owners of Altegrity, while the Company's first lien debt will be amended to facilitate the restructuring and otherwise remain in place. Certain second and third lien noteholders, including funds managed by Third Avenue Management, Litespeed Management LLC and Mudrick Capital Management LP, have also committed substantial new capital to fund the Company's operations and support the business throughout the restructuring process. In addition, the Company recently consummated sales of its Factual Data business, which provides mortgage and verification services, and the Global Security and Solutions division of USIS. The majority of the proceeds from these sales will be offered to pay down existing first lien debt at the conclusion of the restructuring. The planned financial restructuring, combined with proceeds from the recent asset sales, are expected to reduce the Company's debt by approximately $700 million, or 40 percent. "[Tues]day's announcement is the culmination of extensive discussions between Altegrity and our secured lenders to reach an agreement that will provide an expedited path to significantly enhance the Company's balance sheet and improve its financial flexibility," said Jeffrey Campbell, Altegrity's President and Chief Financial Officer. "After the unanticipated decision by the U.S. Government in September 2014 to end two substantial contracts of the USIS business, the Company reevaluated its capital structure and determined that a comprehensive financial restructuring is in the best interests of all stakeholders. We believe the planned financial restructuring, in conjunction with proceeds from our recent divestitures, will strengthen the Company's financial foundation and facilitate the growth and success of our HireRight and Kroll business segments for the benefit of our valued clients, employees and investors." Mr. Campbell concluded, "We want to thank our lender groups for their cooperation throughout this process -- their decision to contribute new capital underscores their confidence in the future of HireRight and Kroll. We will continue to operate our businesses as usual and ensure that our clients receive the same outstanding service they have come to expect from HireRight and Kroll. We are focused on moving forward as a stronger company with a sustainable capital structure." In order to implement the pre-negotiated restructuring, as part of the RSA, the Company expects to voluntarily file for reorganization under Chapter 11 of the United States Bankruptcy Code. Altegrity's operations at HireRight and Kroll will continue without interruption throughout the process. Debevoise & Plimpton LLP is serving as the Company's legal advisor, AlixPartners LLP is serving as its restructuring advisor and Evercore LLC is serving as its financial advisor. Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Houlihan Lokey are advising the ad hoc committee of unaffiliated holders of the Company's second and third lien debt. Kirkland & Ellis LLP and Moelis & Company LLC are advising the ad hoc committee of unaffiliated holders of the Company's first lien debt. About Altegrity Inc. Altegrity provides background investigations for the U.S. government; employment background and mortgage screening for commercial customers; technology-driven legal services and software for data management; and investigative, analytic, consulting, due diligence, and security services. Altegrity is principally owned by investment funds affiliated with Providence Equity Partners. Annual revenues are approximately $1.5 billion. * * * The Troubled Company Reporter, on Sept. 23, 2014, reported that Standard & Poor's Ratings Services lowered its corporate credit rating on Falls Church, Va.-based Altegrity Inc. to 'CCC-' from 'CCC+'. At the same time, S&P lowered its rating on the senior secured asset-backed revolver (ABL) and first-lien debt to 'CCC' from 'B-'. The recovery ratings on the ABL and first-lien debt are '2', indicating that lenders could expect substantial (70% to 90%) recovery in the event of a payment default. On Sept. 16, 2014, the TCR reported that Moody's Investors Service downgraded Altegrity's corporate family rating (CFR) to Caa3, from Caa2, its probability of default rating to Caa3-PD, from Caa2-PD, and changed the outlook for Altegrity's ratings to negative, from stable. ALTEGRITY INC: To File Bankruptcy with Debt-for-Equity Swap ----------------------------------------------------------- Sara Randazzo, writing for Daily Bankruptcy Review, reported that Altegrity Inc. expects to file for Chapter 11 bankruptcy after reaching the terms of a restructuring agreement with bondholders owed $1.3 billion. According to the report, the company, which gained attention after vetting former National Security Agency contractor Edward Snowden, said it finalized an agreement with holders of more than 70% of its senior bonds and approximately 95% of its junior bonds. About Altegrity Inc. Altegrity provides background investigations for the U.S. government; employment background and mortgage screening for commercial customers; technology-driven legal services and software for data management; and investigative, analytic, consulting, due diligence, and security services. Altegrity is principally owned by investment funds affiliated with Providence Equity Partners. Annual revenues are approximately $1.5 billion. * * * The Troubled Company Reporter, on Sept. 23, 2014, reported that Standard & Poor's Ratings Services lowered its corporate credit rating on Falls Church, Va.-based Altegrity Inc. to 'CCC-' from 'CCC+'. At the same time, S&P lowered its rating on the senior secured asset-backed revolver (ABL) and first-lien debt to 'CCC' from 'B-'. The recovery ratings on the ABL and first-lien debt are '2', indicating that lenders could expect substantial (70% to 90%) recovery in the event of a payment default. On Sept. 16, 2014, the TCR reported that Moody's Investors Service downgraded Altegrity's corporate family rating (CFR) to Caa3, from Caa2, its probability of default rating to Caa3-PD, from Caa2-PD, and changed the outlook for Altegrity's ratings to negative, from stable. AMARILLO BIOSCIENCES: Completes Reorganization, Exits Chapter 11 ---------------------------------------------------------------- Amarillo Biosciences, Inc. on Feb. 2 disclosed that the Company has completely reorganized and emerged from the voluntary Chapter 11 Bankruptcy declared fifteen months ago. The Order and Final Decree closing the case was signed by Judge Robert L. Jones of the Northern District of Texas, on Jan. 23, 2015. The reorganization process was led by Company Chairman, CEO, and President, Dr. Stephen T. Chen. The reorganization virtually eliminated the company's previous debt of $4.787 million and provided a number of valuable assets, including a solid portfolio of intellectual property (patents, a trademark, and a pending patent), a library of almost thirty years of scientific and clinical data on the application and use of low dose oral interferon, and a Net Operating Loss carry forward of approximately $18 million. Dr. Chen stated that the mission of the newly reorganized ABI is to become an integrated healthcare enterprise of global distinction committed to amassing a cadre of innovative and state-of-the-art technologies, products, and services in the biotechnology, pharmaceutical, medical, and life sciences fields. Additionally, ABI will remain a public reporting company committed to leveraging its core technology, low dose of oral interferon, and capitalizing on thirty years of proprietary knowledge to build long-term associations with licensing partners. Dr. Chen also explained that the Company's operating strategy is to create a world-wide network of strategic alliances capitalizing on advanced and emerging technologies in order to: a) engineer a diversified enterprise having a major impact on every aspect of the healthcare and life sciences industries; and b) assemble an exhaustive pipeline of technologically-advanced, cutting edge products and services with which to capture the American and Asian markets. About Amarillo Biosciences Amarillo Biosciences, Inc., a developer of biologics for the treatment of human and animal diseases, filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 13-20393) on Oct. 31, 2013. Amarillo disclosed assets of $132,000 against $4.8 million in liabilities as of the bankruptcy filing. It is represented by Roger S. Cox, Esq., at Underwood Law Firm. AMERICAN AIRLINES: Former Employee's $16.4MM Claim Disallowed ------------------------------------------------------------- Bankruptcy Judge Sean H. Lane sustained the objection of reorganized AMR Corporation to the proof of claim filed by Stephen C. Davidson, a former employee of American Airline. Mr. Davidson filed a claim for $16,466,000 in damages arising out of his employment. The Debtors argue that Mr. Davidson's proof of claim is barred by res judicata. The Court said Mr. Davidson's claims are disallowed and expunged. A copy of Judge Lane's January 28, 2015 Memorandum Decision and Order is available at http://bit.ly/1HQjsrh from Leagle.com. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. * * * The Troubled Company Reporter, on Sep. 2, 2014, reported that Standard & Poor's Ratings Services revised its rating outlooks on American Airlines Group Inc. (AAG) and its subsidiaries American Airlines Inc. and US Airways Inc. to positive from stable. At the same time, S&P affirmed its ratings on the companies, including the 'B' corporate credit ratings. The TCR, on Sept. 22, 2014, reported that Standard & Poor's Ratings Services assigned its 'A (sf)' issue rating to American Airlines Inc.'s series 2014-1 class A pass-through certificates, which have an expected maturity of Oct. 1, 2026. At the same time, S&P assigned its 'BBB- (sf)' issue rating to the company's series 2014-1 class B pass-through certificates, which have an expected maturity of Oct. 1, 2022. The final legal maturity dates will be 18 months after the expected maturity dates. American Airlines is issuing the certificates under a Rule 415 shelf registration. The TCR, on the same day, reported that Moody's Investors Service assigned a B3 (LGD5) rating to the $500 million of new five year unsecured notes that American Airlines Group Inc. ("AAG") offered for sale earlier. Its subsidiaries, American Airlines, Inc. ("AA"), US Airways Group, Inc. and US Airways, Inc. will guarantee AAG's payment obligations under the indenture on a joint and several basis. Moody's Corporate Family rating of AAG is B1 with a stable outlook. The TCR also reported that Fitch Ratings has assigned a rating of 'B+/RR4' to the $500 million unsecured notes to be issued by American Airlines Group Inc. The Issuer Default Ratings (IDR) for American Airlines Group Inc., American Airlines, Inc., US Airways Group, Inc., and US Airways, Inc. remain unchanged at 'B+' with a Stable Outlook. The TCR, on Oct. 16, 2014, reported that Moody's upgraded its ratings assigned to the Series 2001-1 Enhanced Equipment Trust Certificate ("2001 EETCs") of American Airlines, Inc.: A-tranche to B2 from Caa1, B-tranche to Caa3 from Ca and C-tranche to Caa3 from Ca. Moody's also affirmed all of its other ratings assigned to American Airlines Group Inc. ("AAG"), including the B1 Corporate Family and B1-PD Probability of Default ratings, and of American Airlines, Inc. ("AA") and US Airways Group, Inc. and its subsidiaries, US Airways, Inc. and America West Airlines, Inc. The outlook is stable and the Speculative Grade Liquidity Rating of SGL-1 is unchanged. American Airlines Group Inc. guarantees American Airlines obligations of the 2001 EETCs. ANNA SANDERS: Court Awards Fees and Costs to Two Talarchyk Firms ---------------------------------------------------------------- Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida awarded fees and costs to two firms in the dismissed bankruptcy case of Anna Marie Sanders: (a) Talarchyk Merrill, LLC -- $4,877 in fees and $440 in costs; and (b) Talarchyk Newburgh, LLC -- $7,520 in fees. Tina M. Talarchyk, Talarchyk Merrill, LLC, Talarchyk Newburgh, LLC, and The Talarchyk Firm are each directed to file and serve a complete accounting of all deposits into, and all disbursements from, the Talarchyk Merrill trust account and any subsequent trust account(s), including those of Talarchyk Newburgh and The Talarchyk Firm, which relate in any way to the Debtor or the Debtor's Chapter 11 case. A full-text copy of the December 8, 2014 Order is available at http://bit.ly/1tHVMPAfrom Leagle.com. Anna Sanders filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 13-11065) on January 17, 2013. In the petition, the Debtor listed $4.5 million in debt and $1.5 million in assets. Subsequently, the Debtor's Plan went nowhere, the assets were sold, and the case was dismissed. ARCH COAL: Moody's Lowers Corporate Family Rating to Caa1 --------------------------------------------------------- Moody's Investors Service downgraded the ratings of Arch Coal, Inc., including the Corporate Family Rating (CFR) to Caa1 from B3, probability of default rating (PDR) to Caa1-PD from B3-PD, senior unsecured ratings to Caa2 from Caa1, rating on second lien notes to Caa1 from B3, and the senior secured credit facility rating to B2 from B1. At the same time, Moody's lowered the Speculative Grade Liquidity (SGL) rating to SGL-3 from SGL-2. The outlook is negative. Downgrades: Issuer: Arch Coal, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Speculative Grade Liquidity Rating, Lowered to SGL-3 from SGL-2 Corporate Family Rating (Local Currency), Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility (Local Currency), Downgraded to B2 from B1 Senior Secured Regular Bond/Debenture (Local Currency), Downgraded to Caa1 from B3 Senior Unsecured Regular Bond/Debenture (Local Currency), Downgraded to Caa2 from Caa1 Outlook Actions: Issuer: Arch Coal, Inc. Outlook, Remains Negative Ratings Rationale The downgrade reflects the weak debt protection metrics and high leverage (23x as measured by the debt/EBITDA ratio for the twelve months through September 30, 2014), which Moody's expect to continue to deteriorate given weak metallurgical coal market conditions. Moody's believe that metallurgical coal prices are unlikely to recover within the next eighteen months to a level that would contribute to a meaningful turnaround in performance. Consequently, leverage is anticipated to become more elevated and further strain the capital structure. At the same time, the thermal coal business is challenged by weak natural gas prices and the implementation of Federal Mercury and Air Toxic Standards (MATS) during the next 12 months. Henry Hub natural gas prices were below $3.00 per million British thermal units (MMBtu) as recently as January and, absent a rapid recovery, will likely drive some coal-to-gas switching in the next several months. The change to a SGL-3 rating reflects expectations for the company to continue to be cash consumptive. As of September 30, 2014, Arch's liquidity position predominantly consisted of just over $1 billion in cash and short-term investments. The company has no meaningful maturities of debt until 2018, and they have suspended or eliminated most financial maintenance covenants that pertain only to their $250 million revolver until June of 2015, when a relaxed, senior secured leverage ratio covenant becomes effective. Until then, only a minimum liquidity covenant of $550 million remains in place. The revolver expires in June 2016. Arch's Caa1 CFR reflects its geographic and operating diversity, low level of legacy liabilities, extensive high quality and low-cost reserves, and access to multiple transportation options. Factors that constrain the rating also include cost inflation, regulatory pressures on coal and the inherent geological and operating risk associated with mining. The negative outlook reflects Moody's expectation that market conditions, particularly for met coal, will remain depressed into 2016 and that Arch's performance will continue to be pressured by the weak fundamentals. While the potential for an upgrade is limited at this time, the ratings or outlook could be favorably impacted should metallurgical and/or thermal coal prices recover, such that the company's leverage, as adjusted, is expected to approach 6x and free cash flow is expected to approach break even. A downgrade would result should liquidity continue to deteriorate. The principal methodology used in these ratings was Global Mining Industry published in August 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. ARCHDIOCESE OF MILWAUKEE: Abuse Victims Oppose $10.3M Settlement ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the official creditors' committee representing sexual-abuse claimants object to the $10.3 million settlement inked by the Archdiocese of Milwaukee and its insurers. As previously reported by The Troubled Company Reporter, the insurance carriers have agreed to turn over $10.3 million to help the Archdiocese, which is at the center of the longest running and most contentious diocesan bankruptcy to date, settle allegations of clergy sexual abuse. The settlement, if approved by a bankruptcy judge, could more than double the compensation available to individuals who claim they were sexually abused by the archdiocese's priests. According to the Bloomberg report, the abuse victims' lawyers said the bankruptcy court has no power to override Wisconsin state law that prohibits blocking so-called direct action suits where an injured person has the right to sue the insurance company even if the perpetrator is off the hook. The committee argued that the federal McCarran-Ferguson Act grants "reverse pre-emption" allowing a state statute to override federal law like the Bankruptcy Code, the report related. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11- 20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. ARVE ENG: Loses Appeal in Suit Over Convenience Store Purchase -------------------------------------------------------------- Chief District Judge James C. Dever, III, of the Eastern District of North Carolina affirms a bankruptcy court's summary judgment ruling in the lawsuit commenced by debtor Arve Angell Eng against Jody Tingen and Prime Properties of Greenville, Inc. d/b/a Prudential Prime Properties. Eng contends that the bankruptcy court erred in granting summary judgment to Tingen and Prime Properties, and that the bankruptcy court misapplied the summary-judgment standard, misunderstood the standard that applied to Eng's negligence claim, and improperly limited discovery. In 2010, Eng purchased two convenience stores for approximately $2,600,000. Eng made a down payment of $696,000 and executed a promissory note secured by a deed of trust on the properties for $1,948,000. Tingen earned a $94,000 commission on the sale. On August 8, 2012, after becoming disappointed in the investment's performance, Eng sued Tingen and Prudential in Pitt County Superior Court concerning the sale. Tingen and Prudential filed an answer and third-party complaint for indemnity and contribution against Adam, N.C., Inc., Michael Elwan, Petromax Retail NC, Inc., and Petromax, NC, LLC. Those parties were the entities who sold the convenience store to Eng, and Eng also sued them in Pitt County Superior Court. On April 4, 2013, Eng filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 13-02195), and the state-court action against Tingen and Prudential was removed in June 2013. On January 30, 2014, Tingen and Prudential filed a motion for summary judgment on the five state-law claims. On August 21, 2014, the bankruptcy court entered a comprehensive order granting defendants' motion for summary judgment on Eng's five state-law claims against Tingen and Prudential. The case before the District Court is, ARVE ANGELL ENG, Appellant, v. JODY TINGEN, et al., Appellees, No. 4:14-CV-198-D (E.D.N.C.). A copy of Judge Dever's January 15, 2015 Order is available at http://is.gd/XXz6YNfrom Leagle.com. ASARCO LLC: Law Professors Stingy on Fees for Professionals ----------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that seven professors filed a friend-of-the-court brief with the U.S. Supreme Court explaining to the justices why the "plain meaning" of the bankruptcy statute doesn't permit paying compensation for defending a bonus award. According to the report, in the case involving ASARCO LLC, the professors point to Section 330 of the Bankruptcy Code, which says lawyers get paid for work that benefits the estate. Because defense of a fee request benefits only the lawyer, not the bankrupt estate, defense costs are disallowed by definition, the professors contend, the report related. The case in the Supreme Court is Baker Botts LLP v. Asarco LLC, 14-103, U.S. Supreme Court (Washington). The case in the appeals Court is Asarco LLC v. Jordan Hayden Womble Culbreth & Holzer PC (In re Asarco LLC), 12-40997, U.S. Court of Appeals for the Fifth Circuit (New Orleans). About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. BAYOU SHORES: Judge Says State Can Close Nursing Home ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Michael Williamson in Florida said bankruptcy law does not prohibit state regulators from exercising regulatory powers by revoking a nursing home's license or refusing to renew it despite previously saving the same nurshing home from being closed by the federal Medicare and Medicaid programs. According to the report, Judge Williamson explained the diverging results, saying the federal regulators were only trying to stop funding. The state, by terminating the license, intends to exercise regulatory powers, the report related, citing the judge. Judge Williamson has allowed the Florida nursing home to implement its reorganization plan unless a federal district judge intercedes on behalf of the federal Medicare and Medicaid programs. Medicare and Medicaid appealed plan approval, on top of a pending appeal from an order compelling continuation of funding. About Bayou Shores Bayou Shores SNF LLC, c/o Rehabilitation Center of St. Petersburg, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 14-09521) on Aug. 15, 2014, in Tampa. Elizabeth A Green, Esq., at Baker & Hostetler LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated assets and liabilities of $1 million to $10 million. The petition was signed by Tzvi Bogomilsky, managing member. The Troubled Company Reporter, on Jan. 13, 2015, reported that the Rehabilitation Center of St. Petersburg nursing home has emerged from bankruptcy -- despite protests from Medicare officials -- after a bankruptcy judge agreed it fixed record-keeping and patient care problems. BELLVIEW ENERGY: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bellview Energy, L. L. C. P. O. Box 36967 Shreveport, LA 71133-6967 Case No.: 15-60057 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Eastern District of Texas (Tyler) Judge: Hon. Bill Parker Debtor's Counsel: Curt Magee, Esq. 2225 W. Southlake Blvd., Ste. 423 Southlake, TX 76092 Tel: 817-239-9582 Fax: 817-488-9293 Email: curtmageeattorney@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Paul E. Graugnard, manager. A list of the Debtor's 9 largest unsecured creditors is available for free at http://bankrupt.com/misc/txeb15-60057.pdf BENJAMIN MASON: Parents' Transfer of Biz Constructively Fraudulent ------------------------------------------------------------------ Bankruptcy Judge Marcia Phillips Parsons in Tennessee ruled that the transfer by Gregory and Deborah Mason of the assets of the business, Collectors Cove, to their son Benjamin Colt Mason, a Chapter 11 debtor, was not made with actual fraud under Tenn. Code Ann. Sec. 66-3-305(a)(1), but it was constructively fraudulent under Tenn. Code Ann. Sec. 66-3-306(a). Judge Parsons awarded judgment to First Bank and Trust Company in the amount of $59,026.12. As set forth in his schedules and statements, the Debtor does business as Collectors Cove, a sole proprietorship that operates a retail store selling gifts and collectibles, including coins, jewelry, and sport and movie memorabilia. Prior to the bankruptcy filing, the Bank filed a fraudulent conveyance action against the Debtor, his wife Norma and the Masons in state court, alleging that the parents' sale of the business and its assets to their son was fraudulent, but seeking only to set aside the real property conveyed in connection with the sale or a money judgment. After filing his bankruptcy case, the Debtor removed the state court action to the bankruptcy court, thereby initiating an adversary proceeding. The case is, THE FIRST BANK AND TRUST COMPANY, Plaintiff, v. GREGORY K. MASON, BENJAMIN C. MASON, NORMA J. MASON, DEBORAH L. MASON, JEFFERSON FEDERAL BANK f/k/a State of Franklin Savings Bank, and FREDRICK BRANDT, Trustee, Defendants, Adv. Proc. No. 13-5026 (Bankr. E.D. Tenn.). A copy of Judge Parsons' Jan. 30, 2015 Memorandum is available at http://is.gd/OH2GHXfrom Leagle.com. The Bank is represented by: Rick J. Bearfield, Esq. Post Office Box 4210 CRS Johnson City, TN 37602 Counsel to the Masons are: Dean Greer, Esq. Post Office Box 3708 Kingsport, TN 37664 Benjamin Colt Mason filed a voluntary Chapter 11 bankruptcy petition (Bankr. E.D. Tenn. Case No. 13-50470) on March 15, 2013. BLOOM LAKE: Has Initial CCAA Protection; FTI Named as Monitor ------------------------------------------------------------- Bloom Lake General Partner Limited et al. on Jan. 27, 2015, sought and obtained from the Superior Court of Quebec at Montreal an initial order under the Companies' Creditors Arrangement Act, as amended, under the court file number 500-11-048114-157 pursuant to the initial order. FTI Consulting Canada Inc. has been appointed as monitor. The firm can be reached at: FTI Consulting Canada Inc. Monitor of Bloom Lake TD Waterhouse Tower 79 Wellington Street West Suite 2010, P.O. Box 104 Toronto, Ontario M5K 1G8 Tel: 416-649-8126 Tell Free: 1-844-669-6338 Email: bloomblake@fticonsulting.com BRANDYWINE REALTY: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed its 'BB+' Issuer Default Rating (IDR) for Brandywine Realty Trust and its operating partnership Brandywine Operating Partnership, L.P. (together Brandywine or the company). The Rating Outlook is Positive. KEY RATING DRIVERS The affirmation of Brandywine's ratings is driven by projected leverage and unencumbered asset coverage of unsecured debt that are consistent with a 'BB+' IDR. Fitch expects leverage and unencumbered asset coverage of unsecured debt (UA/UD) to sustain slightly below 7x and 2x, respectively, absent equity offerings to reduce indebtedness and fund development costs. The company's portfolio of CBD and suburban office properties has continued to improve, as highlighted by higher occupancy and improved leasing that has strengthened growth in same-store net operating income (SSNOI). These credit strengths are mitigated by leverage that remains elevated for the rating, weak UA/UD coverage and somewhat weak fixed-charge coverage relative to peers, and ongoing development risk stemming from Brandywine's large unfunded development pipeline (6.7% of gross assets). The Positive Outlook reflects Fitch's expectations of further equity offerings which should reduce leverage and improve fixed-charge and UA/UD coverage. Primary upgrade drivers to a 'BBB-' IDR are future equity issuance and retained cash flows from operations that reduce leverage below 6.8x and improve unencumbered asset coverage of unsecured debt to above 2x on a sustained basis. Fitch expects to resolve the Positive Outlook after the company reports second quarter 2015 (2Q'15) earnings. Absent the company delevering below 6.8x, Fitch is likely to maintain the rating at 'BB+' with a Stable Outlook. Equity Offering Temporarily Reduced Leverage Fitch expects leverage to decline slightly below 7x over the next 12-24 months - absent equity raises - as the company deploys this equity capital to fund development and other corporate uses. Brandywine raised $334 million of common equity in July 2014 via a follow-on offering, reducing leverage to 7.1x as of Sept. 30, 2014, when assuming $400 million of balance sheet cash will be used to fund development. Fitch previously noted that leverage sustaining below 6.8x would be one driver for positive rating momentum. Fitch calculates leverage as total debt less readily available cash to reduce debt-to-recurring operating EBITDA, excluding stock-based compensation. Modest Base Case Liquidity Shortfall Sources of liquidity cover uses by 1.7x, pro forma for bond tenders that occurred post-Sept. 30, 2014 for the period from Oct. 1, 2014 to Dec. 31, 2016. However, when incorporating the company's development pipeline, liquidity coverage falls to 0.9x, absent access to external capital sources. A mitigant to this coverage is the company's access to the common equity, secured and unsecured bond markets to address capital uses. Liquidity coverage would be 1.3x under a scenario where 80% of secured debt is refinanced. Fitch defines liquidity coverage as sources (freely available cash, availability under the company's unsecured revolving credit facility and retained cash flows after dividends) divided by uses (pro rata debt maturities, recurring capital expenditures and estimated development costs). The company's adjusted funds from operations (AFFO) payout ratio has been between 75%-82% over the last three years, resulting in the company retaining over $20 million annually in organic liquidity. Unencumbered Asset Coverage Appropriate for Rating Brandywine has adequate contingent liquidity via its portfolio, with unencumbered asset coverage, based on pro forma 3Q'14 annualized unencumbered NOI and a stressed 9.0% capitalization rate, of unsecured debt (net of freely available cash) of 1.8x at 4Q'14. Fitch generally views UA/UD above 2x as consistent with an investment-grade profile. Further deleveraging and development deliveries should migrate the company's ratio closer to 2x. Mid-Atlantic Portfolio Focus Brandywine's office portfolio is focused in the Mid-Atlantic U.S., with Pennsylvania and greater Washington DC generating 82% of year-to-date net operating income (NOI). The Pennsylvania portfolio is well-diversified across various submarkets, with the Philadelphia central business district representing the largest submarket at 34% of NOI. Fitch expects the company to continue growing its footprint in the CBD and metro regions over the medium term while reducing exposure to slower growth suburban properties in New Jersey, Delaware, and Richmond. Strong Tenant Diversification The GSA is BDN's largest tenant and contributes 7.2% of annual base rent (ABR). Excluding the GSA, the remaining top 10 tenants generate only 15.7% of total base rent, with no tenant representing greater than 2.5% of ABR. The tenant base is also of strong credit quality with 7 of the 20 largest tenants rated investment grade by Fitch (Fitch does not rate the other 13). Solid Portfolio Fundamentals; Leasing Conditions Improving Operating fundamentals have begun to improve, with cash SSNOI growth of 1% during the first nine months of 2014. Fitch forecasts growth to advance into the low single digits towards the end of 2016, driven by stronger leasing and same-store core occupancy exceeding 90% from 89% as of Sept. 30, 2014. Tenant allowances and leasing commissions per square foot have also moderated as the leasing environment in BDN's core markets continues its recovery. Limited Lease Rollover Brandywine has a well-laddered lease maturity schedule with limited near-term rollover; 16.3% of base rent expires through 2016. Management has been proactive in renewing leases well in advance of expiration, which has contributed to higher than expected leasing-related capital expenditures. In accordance with Fitch's updated Recovery Rating (RR) methodology, Fitch is now providing RRs for issuers with IDRs in the 'BB' category. The 'RR4' for Brandywine's senior unsecured debt supports a rating of 'BB+', the same as BDN's IDR, and reflects average recovery prospects in a distressed scenario. The RR6' for Brandywine's preferred stock supports a rating of 'BB-', two notches below BDN's IDR, and reflects weak recovery prospects in a distressed scenario. RATING SENSITIVITIES The following factors may have a positive impact on Brandywine's ratings being upgraded to investment-grade: -- Fitch's expectation of leverage sustaining below 6.8x (leverage at Sept. 30, 2014 was 7.1x); -- Fitch's expectation of fixed-charge coverage sustaining above 2x (coverage for the TTM ended Sept. 30, 2014 was 1.8x); -- Unencumbered asset coverage of unsecured debt (based on a stressed 9% cap rate) maintaining above 2x (asset coverage was 1.6x as of Sept. 30, 2014). The following factors may have a negative impact on the company's ratings and/or Outlook: -- Fitch's expectation of leverage sustaining above 8x; -- Fitch's expectation of fixed-charge coverage sustaining below 1.5x. Fitch has affirmed Brandywine's ratings and assigned Recovery Ratings as follows: Brandywine Realty Trust -- Issuer Default Rating (IDR) at 'BB+'; -- Preferred stock at 'BB-'/'RR6'. Brandywine Operating Partnership, L.P. -- IDR at 'BB+'; -- Senior unsecured lines of credit at 'BB+'/'RR4'; -- Senior unsecured term loans at 'BB+'/'RR4'; -- Senior unsecured notes at 'BB+'/'RR4'. The Rating Outlook is Positive. BRIGHTER CHOICE: Fitch Cuts NY's $17MM Rev. Bonds Ratings to 'B+' ----------------------------------------------------------------- Fitch Ratings downgrades to 'B+' from 'BB+' approximately $16.9 million in civic facility revenue bonds, series 2007A, issued by the City of Albany Industrial Development Agency, NY on behalf of the Brighter Choice Charter School for Boys and Brighter Choice Charter School for Girls (BCCS). In addition, Fitch places the bonds on Rating Watch Negative. SECURITY The bonds are a general obligation of BCCS and are payable from gross revenues comprised mainly of state mandated school district per-pupil aid payments. Bondholders benefit from a cash funded reserve equal to maximum annual debt service (MADS), other reserve funds under the indenture and a first mortgage lien on the two school facilities. KEY RATING DRIVERS WEAK FINANCIALS DRIVE DOWNGRADE: Weaker than expected financial results drive the downgrade. Operations were expected to improve in fiscal 2014 but the operating margin declined to -3%, worse than the -1.2% margin in fiscal 2013. Annual debt service coverage fell below 1x as a result of weaker operations. The schools have very narrow financial flexibility based on minimal balance sheet resources and very limited capacity to raise per pupil revenues by increasing enrollment. TECHNICAL DEFAULT DRIVES WATCH: The Negative Watch reflects Fitch's view that coverage below 1x in fiscal 2014 constitutes an event of default under the bond documents, as well as continuing to violate the 1.1x covenant. No notice of an event of default has been posted on EMMA. Fitch considers acceleration or foreclosure unlikely, but exercise of those remedies could cause an immediate payment default or impair the schools' ability to pay debt service in full. ACADEMICS IMPROVE: Academic results based on state test scores improved in the 2013-2014 academic year, which was the second year of state testing to Common Cores standards. Fitch notes positively that the schools outperformed the Albany district overall, which should help support its application for a full five-year charter renewal when the current charter expires in June 2015. RATING SENSITIVITIES SUFFICIENT DEBT SERVICE COVERAGE: Generation of at least 1x debt service coverage from improved fiscal 2015 operations is necessary to maintain the current rating level. Failure to meet debt service obligations from operations is not sustainable due to the schools' limited financial cushion and would result in further negative rating action. RATING WATCH CONCERNS: Fitch would expect to remove the Rating Watch in the event of a formal waiver of fiscal 2014 violations by bondholders or evidence of debt service coverage above 1x in fiscal 2015. Alternatively, exercise of remedies such as acceleration or foreclosure would cause further negative rating action. CHARTER SCHOOL SECTOR RISKS: A limited financial cushion; substantial reliance on enrollment-driven, per pupil funding; and charter renewal risk are credit concerns common among all charter school transactions that, if pressured, could negatively affect the rating. CREDIT PROFILE BCCS opened in 2002 with a stated mission to provide a public school alternative for students from economically disadvantaged families. The schools, which are authorized by the New York State Board of Regents, have received two renewals after the initial charter. BCCS continues to benefit from a strong relationship with the Albany Charter School Network (network), which is increasing its level of academic support and financial oversight over the schools. The schools remain fully enrolled, slightly above their chartered enrollment of 270 students each. WEAKER FINANCIALS; COVERAGE DECLINES BCCS' operating margin declined to -3% in fiscal 2014 from -1.2% in fiscal 2013. Weaker operating results fell well short of management's and Fitch's expectations of a small operating surplus. Slightly lower enrollment in the Boys school and expense pressures related to compensation drove the worse performance, exacerbated by lacking expense monitoring procedures. Coverage of debt service declined to 0.9x as a result. Fitch considers failure to cover debt service obligations from operations to be unsustainable in light of the school's limited balance sheet resources. Available funds (cash and investments less restricted net assets) of $265,000 as of June 30, 2014 are very low relative to operating expenses (2.9%) and debt (1.6%), providing minimal cushion to cover debt service, operating losses, or unanticipated expenses. Management expects improvement in fiscal 2015 based on slightly higher enrollment, which should generate additional per-pupil revenues; budgeted expenditure reductions; and enhanced financial and operational oversight from the network. The schools are following the recommendations of a consultant, as required by bond documents due to 1x debt service coverage in fiscal 2013, in violation of the 1.1x covenant. As of Sept. 30, 2014, fiscal 2015 operations remained on track to achieve a budgeted surplus and coverage in excess of the 1.1x covenant. TECHNICAL DEFAULT INCREASES RISK Fitch is concerned that fiscal 2014 debt service coverage below 1x constitutes an event of default under the bond documents. While fiscal 2013 debt service coverage did not meet the covenanted 1.1x, there was no event of default because the schools retained and followed the recommendations of a consultant. In Fitch's view, the documents state that debt service coverage below 1x constitutes an event of default despite retaining a consultant. Fitch estimates fiscal 2014 coverage at 0.9x based on audited financial statements, as no covenant calculations have been provided. An event of default under the documents could entitle bondholders to pursue acceleration, foreclosure, or other remedies which could cause an immediate payment default or impair the schools' ability to pay debt service in full. Fitch considers acceleration unlikely, but in Fitch's opinion the magnitude of the downside risk warrants the Rating Watch. A waiver or evidence of sufficient (at least 1x) coverage in fiscal 2015 would alleviate Fitch's immediate concerns reflected in the Watch. Exercise of bondholder remedies would lead to negative rating action. IMPROVED ACADEMICS Academic results for both schools in the 2013-2014 school year improved based on state test results. In addition, scores exceeded district averages by notable margins in both ELA in mathematics. Fitch notes this development positively given mild concern about results in 2012-2013, the first year of state tests aligned to Common Core standards. Fitch believes improved academic results and favorable performance versus the district will help the schools' bids for renewal. The schools have applied for full five-year renewals when their charters expire in June 2015. The Brighter Choice Middle Schools (bonds rated 'B+' on Rating Watch Negative by Fitch) are currently engaged in the renewal process and may face challenges based on academic performance. The middle schools and BCCS are both affiliated with the network but maintain separate charters and finances. It is unclear what impact nonrenewal would have on BCCS. BUMI INVESTMENT: U.S. Recognizes Singapore Proceedings ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bumi Investment Pte Ltd and two other units of PT Bumi Resources, one of the world's largest thermal coal exporters, can enforce decisions in the U.S. made in bankruptcy proceedings in Singapore after a bankruptcy judge in New York concluded that Singapore is home to the principal bankruptcy and that country's law pass muster by U.S. standards. According to the report, the New York judge permanently halted creditor actions in the U.S. and said decisions by the court in Singapore could be enforced in the U.S. There was no objection to the U.S. proceedings, the report noted. About Bumi Investment Bumi Investment Pte Ltd, Bumi Capital Pte Ltd and Enercoal Resources Pte Ltd are incorporated under the laws of Singapore and are wholly-owned subsidiaries of PT Bumi Resources Tbk, a public company incorporated under the laws of Indonesia. They were incorporated as special purpose vehicles to raise funds for and on behalf of Bumi Resources. Bumi Resources is in the business of mining and export of thermal coal and is one of the largest exporters of thermal coal in the world. In recent years, the financial condition of Bumi Resources has deteriorated. This is directly attributable to the decrease in the global demand for coal, which resulted in a drop in coal prices. On Nov. 24, 2014, Bumi Investment, Bumi Capital and Enercoal initiated proceedings in the High Court of the Republic of Singapore pursuant to Section 210(10) of the Companies Act (Cap. 50) for an order imposing a moratorium on collection activity against them and Bumi Resources. The Singapore Court promptly entered orders prohibiting for a period of six months the commencement or continuation of any action by any creditors. On Dec. 1, 2014, Bumi Investment and its two affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 14-13296) in Manhattan, in the U.S. on Dec. 1, 2014, to seek recognition of the Singaporean proceedings. The U.S. case is assigned to Judge Robert E. Gerber. Andrew Christopher Beckham, the foreign repersentative, signed the petitions. The Debtors have tapped Kenneth R. Puhala, Esq., at Schnader Harrison Segal & Lewis LLP, as counsel. C. WONDER: Marotta Gund to Provide Crisis Management Services ------------------------------------------------------------- C. Wonder LLC, et al., filed a motion to engage Marotta, Gund, Budd & Dzera, LLC, to provide crisis management services including the appointment of a chief restructuring officer, Stephen Marotta, an assistant chief restructuring officer, B. Lee Fletcher and additional personnel. Mr. Marotta is a founding principal and senior managing director of MGBD. He has more than 30 years of providing professional accounting and consulting services to major corporations and businesses. Marotta has served as the chief restructuring officer in dozens of companies throughout his career. Mr. Fletcher is a managing director of MGBD. Fletcher joined MGBD shortly after the firm was founded in 2001. Fletcher has served primarily in management and advisory roles in bankruptcy and out-of-court restructurings, including reorganizations and liquidations. The firm's compensation will be a continuation of the compensation previously agreed to by the parties. The firm's fees for the services will continue to be fixed at a monthly rate of $75,000 for the first two months which commenced on Dec. 19, 2014, and $50,000 per month thereafter. Mr. Marotta attests that MGBD is a "disinterested person" as that term is defined by Section 101(14) of the Bankruptcy Code. The firm can be reached at: MAROTTA GUND BUDD & DZERA, LLC One Grand Central Place 60 East 42nd Street #50, New York, NY Tel: (212) 818-1555 http://www.mgbd.com/ Stephen Marotta (212) 818-1118 E-mail: smarotta@mgbd.com About C. Wonder Founded by J. Christopher Burch in 2010, C. Wonder is a specialty retailer with retail stores in the United States. With headquarters in New York, the company sells women's clothing, jewelry, shoes, handbags and other accessories as well as select home goods under the C. Wonder brand. The Company maintains two distribution centers in New Jersey. The Company opened its first retail store in New York in 2011. By 2014, the Company had expanded its operations to include 29 locations across 13 states including its flagship location in Soho, New York. Amid mounting losses, C. Wonder closed 16 of its retail stores by the end of 2014. C. Wonder closed 9 additional stores in January 2015. As of the bankruptcy filing, C. Wonder had four retail stores in the U.S. (Soho, Flat Iron, Time Warner Center and Manhasset). C. Wonder LLC and its affiliates sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Lead Case No. 15-11127) in Trenton, New Jersey on Jan. 22, 2015. The cases are assigned to Judge Michael B. Kaplan. The Debtors have tapped Cole, Schotz, Meisel, Forman & Leonard, P.A., as counsel, and Marotta, Gund, Budd & Dzera, LLC, as crisis management services provider. As of the Filing Date, the Debtors had assets with a book value of $43.7 million and liabilities of $61.0 million. C. WONDER: Wins Nod to Reject 21 Dark Store Leases -------------------------------------------------- C. Wonder LLC, et al., sought and obtained approval from the Bankruptcy Court to reject certain unexpired nonresidential real property leases and abandonment of personal property nunc pro tunc to the Petition Date. As of the bankruptcy filing date, the Debtors were tenants under 25 leases across several states. The Debtors began the process of reviewing and analyzing all of their contractual obligations so as to identify the contracts and leases that are burdensome to the estates and may be rejected pursuant to Section 365 of the Bankruptcy Code. Before the Petition Date, the Debtors exited all but four of their retail locations. The Debtors have identified 21 "dark store" leases where they have ceased ongoing operations and believe the leases have no value. Before the Petition Date, the Debtors retained A&G Realty Partners to value the Dark Store Leases. A&G concluded that these leases represent an unnecessary expense and contribute no value to the Debtors' estates. In most if not all instances, the Debtors have physically vacated the properties and surrendered the keys to the applicable landlords. The Debtors obtained approval to reject the leases with respect to these properties: Property Landlord -------- -------- Southampton Southampton, NY Southhampton Main St Realty Co Fashion Island Newport Beach, CA The Irvine Company LLC King Street Charleston, SC 285 King Street Company, LLC East Hampton ET 48 Main Stret LLC, Eli Tahari East Hampton, NY Avalon Shopping Center AvalonNorth LLC Alpharetta, GA Atlanta Outlet Shoppes Atlanta Outlet Shoppes, LLC Woodstock, GA Fashion Centre at Pentagon City Fashion Centre Mall, LLC Arlington, VA Fashion Mall at Keystone SDG Fashion Mall LP Indianapolis, IN Fashion Valley Mall Fashion Valley Mall, LLC San Diego, CA King of Prussia Mall King of Prussia Associates King of Prussia, PA Lenox Square The Retail Property Trust Atlanta, GA Philadelphia Premium Outlets Chelsea Limerick Holdings, LLC Limerick, PA Roosevelt Field The Retail Property Trust Garden City, NY Santana Row FRIT San Jose Town and San Jose, CA Country Village The Westchester Westchester Mall, LLC White Plains, NY Walt Whitman Shops Walt Whitman Mall, LLC Huntington, NY The Village at Corte Madera Corte Madera Village, LLC Corte Madera, CA Tysons Corner Center Tysons Corner Holdings, LLC McLean, VA Easton Town Center Easton Town Center II, LLC Columbus, OH Garden State Plaza Westland Garden State Plaza Paramus, NJ The Summit Bayer Retail Properties IV, LLC Birmingham, AL About C. Wonder Founded by J. Christopher Burch in 2010, C. Wonder is a specialty retailer with retail stores in the United States. With headquarters in New York, the company sells women's clothing, jewelry, shoes, handbags and other accessories as well as select home goods under the C. Wonder brand. The Company maintains two distribution centers in New Jersey. The Company opened its first retail store in New York in 2011. By 2014, the Company had expanded its operations to include 29 locations across 13 states including its flagship location in Soho, New York. Amid mounting losses, C. Wonder closed 16 of its retail stores by the end of 2014. C. Wonder closed 9 additional stores in January 2015. As of the bankruptcy filing, C. Wonder had four retail stores in the U.S. (Soho, Flat Iron, Time Warner Center and Manhasset). C. Wonder LLC and its affiliates sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Lead Case No. 15-11127) in Trenton, New Jersey on Jan. 22, 2015. The cases are assigned to Judge Michael B. Kaplan. The Debtors have tapped Cole, Schotz, Meisel, Forman & Leonard, P.A., as counsel, and Marotta, Gund, Budd & Dzera, LLC, as crisis management services provider. As of the Filing Date, the Debtors had assets with a book value of $43.7 million and liabilities of $61.0 million. CACHE INC: Operating Losses Sending Retailer to Chapter 11 ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, citing people with knowledge of the situation, reported that Cache Inc., a women's wear retailer, is preparing for bankruptcy after reporting a $29.8 million operating loss over the first three quarters of 2014 on net sales of $147.6 million. The stock closed on Jan. 22 below 10 cents a share, down about 50 percent on the day's trading in New York, the Bloomberg report said. About Cache, Inc. Cache, Inc., operates 236 women's apparel specialty stores under the trade name "Cache." On Dec. 4, 2014, New York-based Cache announced that it has received an inquiry from a third party regarding a potential sale of the Company. Cache reported a net loss of $34.4 million for the 52 weeks ended Dec. 28, 2013, following a net loss of $12.07 million for the 52 weeks ended Dec. 29, 2012. CAESARS ENTERTAINMENT: Del. Judge Sends Bankr. Cases to Chicago --------------------------------------------------------------- The bankruptcy proceedings of Caesars Entertainment Operating Company, Inc. shall proceed in the U.S. Bankruptcy Court for the Northern District of Illinois, Delaware Bankruptcy Judge Kevin Gross ruled. "The Court acknowledges that the Petitioning Creditors filed first in this District and that they are strongly supported in their choice of forum by the First Lien Bank Lenders and other junior creditors. But to the extent some form of the first-filed rules applies to parallel bankruptcy proceedings at all, the Involuntary Case was clearly an anticipatory filing," Judge Gross explained in a decision issued on Monday. He noted that the Petitioning Creditors were aware prior to the Petition Date that the Debtor was planning an imminent voluntary filing in the Illinois Court and with that knowledge made sure to win the race to the courthouse. "The Court recognizes that rewarding the Petitioning Creditors' preemptive filing in another forum would set a bad precedent for future bankruptcy cases and limit the ability of future debtors to openly negotiate with creditors prior to filing a voluntary bankruptcy petition. It is contrary to the interest of justice to favor the Petitioning Creditors in such a scenario," he said. On January 7, 2015, certain news outlets reported that CEOC would possibly file its voluntary bankruptcy petition in the Illinois Court. On January 12, 2015, Appaloosa Investment Limited Partnership I, OCM Opportunities Fund VI, LP, and Special Value Expansion Fund, LLC initiated an involuntary proceeding in bankruptcy court in Delaware, where CEOC is incorporated. The Petitioning Creditors are among CEOC's Second Lien Noteholders. On January 14, the Petitioning Creditors filed a motion, asking the Delaware judge for determination pursuant to Fed.R.Bankr.Proc. Rule 1014(b) that all CEOC bankruptcy proceedings proceed before the Delaware Court, stating their belief that CEOC intended to initiate a voluntary bankruptcy proceeding before the Illinois Court on or after January 15. The Delaware Court denied the Venue Motion without prejudice, pending the actual filing of CEOC's voluntary petition in the Illinois Court. On January 15, CEOC and 172 of its direct or indirect subsidiaries filed voluntary Chapter 11 petitions in the Illinois Court. On the same day, the Petitioning Creditors renewed their Venue Motion. CEOC objected, and wants the cases to proceed before the Illinois Court. On January 23, the Debtor and Petitioning Creditors filed their briefs arguing that the Debtor's case should proceed in their chosen forum. The First Lien Bondholders filed a joinder to the Debtor's brief, arguing that the cases should proceed in the Illinois Court while creditors representing portions of the rest of the Debtor's capital structure and a substantial majority of the Debtor's total debt filed joinders to the Venue Motion and Petitioning Creditors' brief, arguing that the cases should proceed before the Delaware Court. A two-day evidentiary hearing on the Venue Motion was conducted on January 26 and 27. According to Judge Gross, CEOC demonstrated that its decision to file in the Illinois Court rather than in Delaware was premised on their analysis of different applications of the law in the judicial circuits in which the Delaware Court and the Illinois Court operate and that those differences could benefit the Debtor's reorganization efforts. Whether the Debtor is correct in its analysis remains to be seen, but the Debtor did provide sufficient justification for its choice of forum. "The Court is simply not able, based on the limited record before it, to evaluate the fairness of the Debtor's decision-making process, even though the Debtor's pre-petition behavior would seem to indicate that the decision to file the Voluntary Case in the Illinois Court was made for the benefit of non-debtor insiders. But, importantly, the Illinois Court and the learned Judge assigned to the case are certainly no less capable and no less available to restrain the Debtor from breaching its duties and preventing fraud," Judge Gross said. Judge Gross also noted that CEOC's conduct leading up to the filing of the Voluntary Case is, on its face, suspect. He said there are serious allegations, raised both by the Petitioning Creditors in their involuntary petition and the plaintiffs in pre-petition lawsuits, that the so-called Sponsors -- namely, Apollo Global Management, TPG Capital, and certain of their affiliates and co-investors, which acquired Caesars, then known as "Harrah's Entertainment, Inc." in a $30.7 billion leveraged buyout in 2008 -- engaged in a series of self-dealing transactions resulting in the fraudulent transfer of very substantial assets out of the reach of the Debtor's creditors. Judge Gross, in his decision, pointed to a recent ruling by the U.S. District Court for the Southern District of New York in the case, Meehancombs Global Credit Opportunities Funds, LP v. Caesars Entertainment Corp., No. 14-cv-7091, 2015 WL 221055, at *8 (S.D.N.Y. Jan. 15, 2015). The plaintiffs in the Meehancombs litigation alleged that in a transaction completed in August 2014, CEOC stripped the plaintiffs, holders of notes issued by the Debtor and guaranteed by CEC, of their guarantees through payment to certain favored noteholders in violation of the Trust Indenture Act of 1939, as amended. The Southern District of New York held that the plaintiffs stated a claim sufficient to survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The Meehancombs court also found that the plaintiffs stated a claim sufficient to survive a Rule 12(b)(6) motion to dismiss that Caesar's Entertainment Corp. was effectuating an out-of-court debt restructuring of exactly the kind the Trust Indenture Act is designed to prevent. "The Debtor is now engaged in a restructuring based, in part, on the August 2014 transaction that was the subject of the Meehancombs decision. The Court is confident that the Illinois Court will, every bit as much as this Court would, view the allegations of the Debtor's pre-petition conduct with care and concern and afford the Petitioning Creditors every opportunity to bring to light the facts surrounding the Disputed Transactions," Judge Gross said. "The Court is also confident that its decision that the Debtor's bankruptcy cases should proceed before the Illinois Court in no way reduces the opportunity for the Petitioning Creditors and other junior creditors to obtain appropriate relief. The Illinois Court is, of course, fully capable of recognizing, to the extent they exist, breaches of fiduciary duty and fraudulent activity." Judge Gross said CEOC's choice of forum is entitled to just enough deference to support a finding that, in the interest of justice, the Voluntary and Involuntary Cases should proceed before the Illinois Court. The decision, he added, in no way affects the Petitioning Creditors substantive rights with respect to the continued prosecution of the Involuntary Case in the Illinois Court. A copy of Judge Gross' Feb. 2 decision is available at http://is.gd/sT0um4from Leagle.com. 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 January 2015, Caesars Entertainment and subsidiary CEOC announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, The RSA became effective pursuant to its terms as of Jan. 9, 2015. Appaloosa Investment Limited, et al., owed $41 million on account of 10 percent second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against Caesars Entertainment Operating Company, Inc. (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders are represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is the Debtors' restructuring advisors. Prime Clerk LLC acts as the Debtors' notice and claims agent. Judge Benjamin Goldgar presides over the cases. CAESARS ENTERTAINMENT: Welcomes Call for Independent Examiner ------------------------------------------------------------- Joseph Checkler, writing for Daily Bankruptcy Review, reported that Caesars Entertainment Corp. says it welcomes the appointment of an independent investigator to look into its prebankruptcy asset transfers, insisting the transactions were appropriate and helped improve the company's balance sheet. According to the report, in a Sunday filing with U.S. Bankruptcy Court in Chicago, the company said it is fine with a demand by David Tepper's Appaloosa Management for an examiner in the case, as long as it is a "focused" and "expeditious" probe. 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. Appaloosa Investment Limited, et al., owed $41 million on account of 10 percent second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against Caesars Entertainment Operating Company, Inc. (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders are represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP. In January 2015, Caesars Entertainment and subsidiary CEOC announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, the RSA became effective pursuant to its terms as of Jan. 9, 2015. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is the Debtors' restructuring advisors. Prime Clerk LLC acts as the Debtors' notice and claims agent. Judge Benjamin Goldgar presides over the cases. CAPITOL BANCORP: Denial of Restructuring Fee Claims Affirmed ------------------------------------------------------------ Judge Sean F. Cox of the U.S. District Court for the Eastern District of Michigan affirms the Bankruptcy Court's order disallowing the claims filed by Appellants Vikaran Ghei and Michael Zaitzeff in the bankruptcy case of Capitol Bancorp, Ltd., et al. The bankruptcy appeal case is Vikaran Ghei and Michael Zaitzeff v. Capitol Bancorp, Ltd. and Financial Commerce Corporation, Case No. 14-12874. The Appellants appealed the Bankruptcy Court's "Order Disallowing Proof of Claim No. 899-1 Filed On Behalf of Michael Zaitzeff and Proof of Claim No. 900-1 Filed on Behalf of Vikaran Ghei [Docket Entry No. 847]." On June 28, 2012, Capitol Bancorp entered into written "Short-Term Employment Agreements" with the Appellants-Claimants Michael Zaitzeff and Vikaren Ghei. The Employment Agreements provided that each of the Claimants would be paid pursuant to these terms: 1) they would each receive "an amount in cash equal to the sum of: (a) $325,000 as a corporate restructuring fee; and (b) $425,000 as a capital restructuring fee; and 2) an amount equal to 1.5% of any new money raised by the company or raised by the company's subsidiaries." On March 19, 2014, the Appellants-Claimants each filed a claim for $750,000, sought as an administrative expense claim. The Debtor filed objections to both claims. Bankruptcy Judge McIvor subsequently disallowed the claims and the Appellants-Claimants appealed. A full-text copy of the December 8, 2014 Opinion & Order is available at http://bit.ly/1uhqrUofrom Leagle.com. The Appellants-Claimants are represented by: Anthony J. Kochis, Esq. Scott A. Wolfson, Esq. WOLFSON BOLTON PLLC 3150 Livernois, Suite 275 Troy, MI 48083 Telephone: (248) 247-7100 Facsimile: (248) 247-7099 E-mail: akochis@wolfsonbolton.com swolfson@wolfsonbolton.com - and - Seth B. McCormick, Esq. BROWN LEGAL ADVISORS LLC 4851 N. Winchester Avenue, Third Floor Chicago, IL 60640 Telephone: (773) 527-0585 The Debtors-Appellees are represented by: Edward T. Sable, Esq. Joseph R. Sgroi, Esq. HONIGMAN MILLER SCHWARTZ AND COHN LLP 2290 First National Building 660 Woodward Avenue Detroit, MI 48226 Telephone: (313) 465-7548 Facsimile: (313) 465-7549 E-mail: tsable@honigman.com jsgroi@honigman.com About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP, represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. CHARLES ARNOLD: Court Vacates $15.15MM Judgment for PulseWave ------------------------------------------------------------- Judge Marcia S. Krieger of the U.S. District Court for the District of Colorado affirms, in part, and reverses and vacates, in part, the Bankruptcy Court's April 3, 2013 Order and Judgment in the appellate case captioned Charles Allen Arnold Pulsewave LLC, Plaintiff/Appellee v. Charles A. Arnold, Defendant/Appellant, Case No. 13-CV-01036-MSK. The Bankruptcy Court's April 3 Order and Judgment awarded damages and entered judgment in favor of the Plaintiff PulseWave LLC. The Bankruptcy Court determined that the Debtor Charles A. Arnold is not entitled to discharge pursuant to Section 727(a)(4) of the Bankruptcy Code and that the damage award in favor of Pulsewave LLC is nondischargeable pursuant to Sections 523(a)(4) and (6) of the Bankruptcy Code. In reviewing the matter, the District Court has considered the designated record and written arguments of the parties, including the Debtor's Opening Brief, PulseWave's Response Brief and the Debtor's Reply Brief. Accordingly, Judge Krieger vacated the money judgment of $15,150,000 in favor of PulseWave. Judge Krieger, however, expresses no opinion on the propriety of the Bankruptcy Court's award of attorney fees. After filing for bankruptcy protection, Charles A. Arnold and a company in which he was the majority owner, Quantic Research Systems, Inc., initiated an adversary proceeding against PulseWave and others, seeking a declaratory judgment that Quantic was the legal owner of five patents. PulseWave filed a counterclaim for a declaratory judgment that it was the equitable owner of the patents. Following the conversion of the Debtor's case to one under Chapter 7, PulseWave, John Arnold (the Debtor's brother), and Soil Enhancement Technologies initiated an adversary proceeding against the Debtor challenging his right to obtain a discharge. PulseWave brought two claims. After a bench trial, the Bankruptcy Court found in favor of PulseWave on both the denial of discharge and exception from discharge claims. The Bankruptcy Court determined that the Debtor was not entitled to a discharge pursuant to Section 727(a)(4)(A) because he failed to disclose his business dealings with the Bear Mountain Company in response to Question 18 of his Statement of Financial Affairs. The Bankruptcy Court quantified the loss at $5,050,000, then trebled it and added attorney fees pursuant to Colorado's Civil Theft Statute, which resulted in a money judgment in favor of PulseWave and against the Debtor in the amount of $15,150,000. Appellant Charles Allen Arnold is represented by: John Henry Schlie, Esq. LAW OFFICE OF JOHN HENRY SCHLIE, P.C. 7100 E Belleview Ave, Suite G11 Englewood, CO 80111 Facsimile: (303) 860-1297 Appellees John R. Arnold, Pulsewave, LLC and Soil Enhancement Technologies, LLC, are represented by: Jeffrey A. Weinman, Esq. WEINMAN & ASSOCIATES, PC 730 17th Street, Suite 240 Denver, CO, 80202 -3506 Telephone: (303) 572-1010 - and - Thomas R. Rice, Esq. RICE LLC Appellee Pulsewave, LLC is also represented by: Dean Elliot Richardson, Esq. MOYE WHITE, LLP 16 Market Square, 6th Floor 1400 16th Street Denver, CO 80202-1486 Telephone: (303) 292-2900 Facsimile: (303) 292-4510 E-mail: dean.richardson@moyewhite.com A full-text copy of the Opinion and Order dated December 3, 2014, is available at http://bit.ly/18CGMJAfrom Leagle.com. Charles A. Arnold and a company in which he was the majority owner, Quantic Research Systems, Inc., filed for bankruptcy protection under Chapter 11 (Bankr. D. Colo. Case No. 07-18751) on August 9, 2007. Subsequently, the Debtor's bankruptcy case was converted to one under Chapter 7. CHINA RECYCLING: Receives NASDAQ Bid Price Deficiency Notice ------------------------------------------------------------ China Recycling Energy Corp., an industrial waste-to-energy solution provider in China, on Feb. 2 disclosed that it received notice from Nasdaq's Listing Qualifications Department indicating that the closing bid price of the Company's common stock was below the minimum requirement of US$1.00 per share for 30 consecutive business days and the Company was therefore not in compliance with NASDAQ listing rule 5450(a)(1). Pursuant to listing rule 5810(c)(3)(A), the Company has 180 calendar days, or until July 27, 2015, to regain compliance with the minimum bid price rule. If, at any time during the 180-day period the closing bid price per share of the Company's common stock is US$1.00 or above for a minimum of ten consecutive business days, the Nasdaq staff will provide written confirmation of compliance and this matter will be closed. The Company is currently looking into various options available with respect to regaining such compliance. The notification letter has no effect at this time on the listing of the Company's common stock on The NASDAQ Global Market. CREG's common stock will continue to trade on The NASDAQ Global Market under the symbol "CREG". About China Recycling Energy Corp. Based in Xi'an, China, China Recycling Energy Corp. (NASDAQ:CREG) -- http://www.creg-cn.com-- provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. CHRYSLER LLC: Qui Tam Suit Over Vehicle Warranties Dismissed ------------------------------------------------------------ Chrysler Group, LLC, won dismissal of a qui tam False Claims Act complaint filed individually and on behalf of the United States, alleging that New Chrysler (or, assumedly, its purported predecessors) made false statements to the United States regarding the warranties on certain vehicles that Old Chrysler sold to the United States in 2004 and 2005. District Judge Robert M. Dow, Jr., granted the Defendant's motion to dismiss without prejudice, but gave the plaintiff 60 days to file a second amended complaint, should he so choose. If Plaintiff does not file a second amended complaint within 60 days, the Court will dismiss the case with prejudice. The case is, UNITED STATES OF AMERICA ex rel. WILLIAM CEAS JR. and WILLIAM CEAS JR., individually; Plaintiffs, v. CHRYSLER GROUP LLC; Defendant, Case No. 12-CV-2870 (N.D. Ill.). A copy of Judge Dow's January 28, 2015 Memorandum Opinion and Order is available at http://is.gd/x9Rl3Afrom Leagle.com. Chrysler Group, LLC, Defendant, is represented by: Brian William Bell, Esq. Anthony Joseph Monaco, Esq. Julie D Miller, Esq. SWANSON, MARTIN & BELL LLP 330 North Wabash Avenue #3300 Chicago, IL 60611 Tel: (312) 321-9100 E-mail: bbell@smbtrials.com amonaco@smbtrials.com jmiller@smbtrials.com About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. CMR MORTGAGE: Court Allows MLG's 4th Fee Application for $194,805 ----------------------------------------------------------------- Judge Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern District of California ruled the fourth interim and final fee application of the McNutt Law Group should be allowed in full, because the voluntary reduction in fees more than offsets any unnecessary use of multiple attorneys. MLG is the counsel for the Official Committee of Equity Security Holders in the bankruptcy cases of CMR Mortgage Fund, LLC, CMR Mortgage Fund II, LLC, CMR Mortgage Fund III, LLC. MLG's fourth fee application seeks fees of $194,805 for services performed from March 2013 to September 2014. MLG has represented the Committee since October 2009. The Court has approved three prior fee applications, allowing fees on an interim basis in the amount of $1,383,105. In that fourth application, the Office of the United States Trustee has identified time entries representing participation of multiple attorneys at hearings and intra-office conferences in the amount of $23,423. MLG voluntarily reduced its fees by $15,000 in this application. The voluntary reduction of $15,000 is equal to 64% of the combined services performed where multiple attorneys participated. "My review indicates that a minimum of $7,580 of the attorney time in question was spent at hearings and meetings at which at least one attorney had to participate. That essential participation by at least one attorney and the voluntary reduction of fees account for more than 96 percent of the fees challenged by the UST. The difficulty of the issues in the case (especially the negotiations involving the insurance carriers and the district attorney) reasonably required participation by multiple attorneys in a sufficient number of discussions and hearings to justify the remainder of the fees in question," Judge Carlson wrote on his memorandum. "I determine that the three prior interim awards should not be modified, because no one objected to MLG's use of multiple professionals when those prior applications came before the court, and because there have been no other developments in the case that justify modification of prior fee awards. The absence of a prior objection is relevant in two respects: it denied MLG the opportunity to adjust its staffing behavior in response to such an objection; and the passage of time makes it more difficult for MLG to explain why multiple attorneys were needed in a particular instance," Judge Carlson continued. He added that the court very much appreciates the diligence of the UST, and has attempted to take very seriously the UST's objection to the fourth interim application. He explained that that objection may have been sustained in substantial measure had MLG not voluntarily reduced its fees by a significant amount. A full-text copy of the December 5, 2014 Memorandum is available at http://bit.ly/1DzAKmMfrom Leagle.com. About CMR Mortgage San Francisco, California-based CMR Mortgage Fund II, LLC, is a limited liability company organized for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The Company previously funded lending activities through loan pay downs or pay offs, as well as by selling its membership interests, and by selling all or a portion of interests in the loans to individual investors. The Company commenced operations in February 2004. The Company ceased accepting new members in the third quarter of 2006. The Company and CMR Mortgage Fund III, LLC, filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09-30788 and 09-30802). Robert G. Harris, Esq., at the Law Offices of Binder and Malter, represents the Debtor as counsel. The Debtor listed between $10 million and $50 million each in assets and debts. CMR Mortgage Fund, LLC (Bankr. N. D. Calif. Case No. 08-32220 TEC) filed for bankruptcy protection in N.D. California in 2008. CONNACHER OIL: S&P Lowers CCR to 'D' After Recapitalization Plan ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating and debt issue ratings on Calgary, Alta.-based Connacher Oil and Gas Ltd. to 'D' from 'CC', following the company's announcement of its proposed recapitalization, in which the company intends to exchange its existing C$350 million and US$550 million senior secured second-lien debt (plus accrued interest) for equity. The dramatic reduction in crude oil prices since June 2014 caused a rapid deterioration in Connacher's liquidity position, such that the company will be unable to fund both its debt servicing obligations and minimum maintenance capital spending requirements. "Our decision to lower the ratings to 'D' is consistent with our criteria, which view the proposed recapitalization that will exchange the company's existing C$350 million and US$550 million second-lien debt and accrued interest to Feb. 1, 2015 into equity, as an event of default," said Standard & Poor's credit analyst Michelle Dathorne. COYOTES HOCKEY: NHL Mostly Fails in Suing Former Owner ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports tht U.S. Bankruptcy Judge Redfield T. Baum in Phoenix issued an interim ruling recommending that the district court should deny recovery of unsecured creditors' claims and most of the National Hockey League attorney's fees in the bankruptcy case of the Phoenix Coyotes. According to the report, Judge Baum said Jerry Moyes, the former owner of the team, isn't liable to the league for the unsecured debts the league paid. Under a doctrine known as judicial estoppel, Judge Baum said the NHL isn't entitled to reimbursement because it took inconsistent positions, the report further related. Dewey Ranch Hockey LLC and its three affiliates sought protection under Chapter 11 of the Bankruptcy Code on May 5, 2009 (Bankr. D. Ariz., Case No. 09-09488). The Debtors' counsel is Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP. The bankruptcy was converted to a Chapter 7 liquidation in December 2010. CREDIT-BASED ASSET: Court Won't Allow Nelsons to File Late Claims ----------------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York denied James Nelson and Bryce Nelson's motion to file a late proof of claim in the bankruptcy cases of Credit-Based Asset Servicing and Securitization LLC, et al. The Debtor filed a Chapter 11 petition on November 12, 2010, and in December 2010, the Bankruptcy Court entered an order setting January 31, 2011, as the deadline for filing proofs of claim. The Debtor's Plan was confirmed on April 25, 2011, and became effective on the 29th of that same month. On September 20, 2005, the Claimants took out a loan and gave a mortgage on their home in Pennsylvania in the amount of $264,675. In May 2009, the Debtor was assigned the mortgage. After an alleged default, the Debtor commenced foreclosure proceedings against the Claimants on June 5, 2009. The Nelson mortgage was later assigned to Waterfall Victoria Master Fund Ltd. After the assignment, the mortgage may have been assigned again, but there is no dispute that the foreclosure ended by a judgment in favor of the mortgagee and that the Nelsons' home was sold at a foreclosure sale. Their efforts to obtain relief against the foreclosure before the courts in Pennsylvania have been unsuccessful. On August 20, 2014, over three and a half years after the Bar Date, the Claimants moved for leave to file a late proof of claim against the Debtor for the amount of the mortgage. They claim that the failure to timely file a proof of claim was due to "excusable neglect," as they did not receive notice of the Bar Date. They assert they have claims against the Debtor for having engaged in improper activities, including robo-signing documents. The Court in its discretion may allow a late filing, if such late filing was the result of "excusable neglect." Judge Gropper, however, opined that the Nelsons have not shown excusable neglect. Judge Gropper said their motion was filed over three and one-half years after the Bar Date, and three years after the confirmation of the Debtor's plan of reorganization. "Since the Debtor's plan, establishing a Liquidating Trust, became effective, almost all distributions have been made and most of the assets have been liquidated. Allowing the Claimants to file a proof of claim over three and a half years after the Bar Date would be clearly prejudicial to the Debtor," Judge Gropper said. Judge Gropper added that the Claimants have not shown that they even have a claim against the Debtor. He explained that they charge the Debtor with wrongdoing but the Pennsylvania courts have upheld the foreclosure, precluding the Bankruptcy Court from granting relief on grounds of improper assignment. A full-text copy of the December 9, 2014 Decision and Order is available at http://bit.ly/1yWmrnzfrom Leagle.com. About Credit-Based Asset Servicing Credit-Based Asset Servicing and Securitization LLC was a subprime mortgage investor based in New York City. C-Bass was a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and seven affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16040) on Nov. 12, 2010. C-Bass disclosed $23.7 million in assets and $2.16 billion in liabilities in its Schedules of Assets and Liabilities. The Debtors' liabilities include $195.8 million of secured debt. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, Esq., at Hunton & Williams LLP, represent the Debtors. Donlin, Recano & Company is the claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in C-BASS' chapter 11 cases and that committee is represented by Mark T. Power, Esq., and Jeffrey Zawadzki, Esq., at Hahn & Hessen LLP in New York. The affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CROWNROCK LP: Moody's Rates $300MM Senior Notes 'Caa1' ------------------------------------------------------ Moody's Investors Service rated CrownRock, L.P.'s $300 million notes due 2023 Caa1, LGD4 rating on the Senior Unsecured notes. All other ratings of CrownRock remain unchanged. The rating outlook is stable. "This senior notes offering will allow CrownRock to term out its revolver borrowings, put cash on the balance sheet to fund 2015 capex, and improve liquidity" said Arvinder Saluja, Moody's Vice President. Assignments: Issuer: CrownRock, L.P. $300 million Senior Unsecured Regular Bond/Debenture due 2023 Assigned Caa1, LGD4 Adjustments: Issuer: CrownRock, L.P. $400 million Senior Unsecured Regular Bond/Debenture due 2021, Adjusted to LGD4 from LGD5 Ratings Rationale The B3 Corporate Family Rating (CFR) reflects CrownRock's modest but improving scale, large percentage of oil production, good margins given a generally favorable hedging profile, and management's track record of growing reserves and production in the Permian Basin. The company's vertical drilling activities in the Permian, a well-known, long-lived oil field, entail lower operating risk as compared to similarly rated peers. CrownRock has a high concentration in the Permian, accounting for nearly all its proved reserves and its PV-10 value. CrownRock's B3 CFR also considers its somewhat high leverage, especially debt to average daily production at $35,000/boe. Moody's expect an improvement in leverage as CrownRock continues to grow its scale. CrownRock's primary operating strategy is to drill conventional vertical wells to plumb deeper than historical depths through 10 to 11 fracturing stages. Such operations involve less technical complexity and lower oilfield services costs than those that employ horizontal drilling. CrownRock could be considered for an upgrade if rising production lowers debt-to-average daily production to below $30,000/boe with an average daily production of over 25 mboe. CrownRock could be downgraded if the company falls short on its drilling program so that its debt-to-average daily production increases sustainably to around $50,000/boe, or if liquidity deteriorates. A negative rating action could also result if CrownRock makes sizeable distributions to its owners that hamper the company's ability to grow as planned. The principal methodology used in this rating was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Midland, Texas, CrownRock, L.P. is a privately held limited partnership that engages in the exploration and production of crude oil and natural gas in Texas, New Mexico, and Utah. It is owned by Lime Rock Partners, a private equity firm (roughly 60% ownership), and management (40%). DCP MIDSTREAM: Fitch Cuts Junior Subordinated Rating to 'BB' ------------------------------------------------------------ Fitch Ratings has downgraded DCP Midstream LLC's Issuer Default Rating (IDR) and senior unsecured ratings to 'BBB-' from 'BBB' and its Short-term IDR and commercial paper rating to 'F3' from 'F2' and junior subordinated rating to 'BB' from 'BB+'. Fitch has also affirmed DCP Midstream Partners, LP (DPM) IDR and Sr. Unsecured ratings at 'BBB-' and short-term IDR at 'F3'. The Rating Outlook for both DCP and DPM has been revised to Negative from Stable. A full list of ratings actions follows at the end of this release. The ratings action reflects the negative impact that the severe downturn in commodity prices is having and is expected to have on DCP enterprise's profitability and credit metrics. DCP, in particular, retains a significant amount of commodity exposure and the recent declines in natural gas liquids (NGLs), crude oil, and natural gas prices is expected to stress profitability at the assets remaining in DCP and push the company's credit metrics well above and beyond levels previously projected by Fitch and historically targeted by management. DPM is expected to better withstand price weakness in the near term. DPM's fixed fee profile is much stronger with roughly 90% of 2015 gross margin either fixed-fee or hedged, though a significant portion of the hedges are with DCP. Historically, DCP has targeted between 2.5x to 3.5x debt/EBITDA (on a standalone basis) at the LLC level to offset the high commodity price exposure DCP maintained at the DCP level. Prior to the most recent downturn in commodity prices Fitch was forecasting 2015 DCP standalone (inclusive of distributions from DPM) debt/EBITDA of roughly 3.0x to 3.5x in 2015 and 2016 based on an assumed composite NGL barrel of roughly $0.80/gallon. Fitch's expectations have deteriorated along with commodity prices and now expects leverage to be roughly 7.5x - 8.5x for 2015 and 2016 on a standalone basis based on current forward commodity prices. Fitch believes DCP will look to pursue several options in order to protect its investment grade rating. These options include cutting distributions to its owners, Spectra Energy Corp (SE; Fitch rates operating subsidiary Spectra Energy Capital BBB/Stable Outlook) and Phillips 66 (PSX), selling assets, dropping down assets into its master limited partnership, DPM, cutting costs and decreasing discretionary capital spending. An inability to address DCP's significantly increased leverage in the next 6 to 8 months could lead to a downgrade. On Friday January 30th, 2015 DCP announced a large scale corporate restructuring which will see a large reduction in workforce. This step should generate significant cost savings but is not enough to fully offset commodity price declines. Fitch believes that DCP continues to own and operate 'must run' type assets with significant scale and decent geographic diversity. DCP is the largest stand-alone natural gas processor in the United States, and it has a robust presence in all of the key production regions within the country. DCP owns or operates gathering & processing systems in Permian, Eagle Ford, Rockies, Mid-Continent, East Texas-North Louisiana, South Texas, Central Texas, as well as, the Piceance and Barnett Shale basins. The size and breadth of DCP's operations allow it to offer its customers end-to-end gathering, processing, storage and transportation solutions giving DCP a competitive advantage within the regions where they have significant scale. The Negative Outlook for DPM reflects parent subsidiary ratings linkage. Historically, Fitch has limited DPM to a one notch separation between DCP and DPM, given the strong operational and financial linkage DPM has with DCP and indirectly with DCP's owners, SE and PSX. DCP's ownership of DPM's GP interest gives DCP significant control over DPM's operations, including major strategic decisions such as dropdown opportunities, investment plans, distributions, and management of operations, as well as centralized treasury functions. DCP has also historically provided significant support for DPM including a demonstrated willingness to take back units as equity contributions for dropdown transactions, as well as, providing hedges and fixed demand charges and throughput fees for dropped down processing plants. Meanwhile, DPM provides DCP a low cost source of financing and access to equity markets. DPM remains significantly hedged keeping near term commodity price exposure low with 90% of gross margin either fee-based or hedged for 2015 and over 70% of gross margin fee-based or hedged for 2016 providing some comfort around the stability of DPM's earnings and cash flows even in this lower commodity price environment, though Fitch recognizes much of these hedges are with DCP. Fitch expects DCP, SE, and PSX to continue to support DPM's credit quality including maintaining a capital structure, fixed-fee profile and business risk profile in line with other investment grade MLPs and maintaining a solid distribution coverage ratio. Fitch would likely move DPM below investment grade if there were a significant change in support from its sponsors resulting in a move away from its current focus on maintaining its fixed-fee or hedged revenue profile or there were expectations that leverage was going to remain above 4.5x on a sustained basis. Significant growth in commodity exposed earnings without an appropriate, significant adjustment in capital structure, specifically a reduction in leverage would result in a downgrade. Fitch typically targets at minimum a 70% fixed fee revenue profile (in addition to other factors particularly leverage below 4.5x) as being reflective of investment grade for credit quality for master limited partnerships. KEY RATINGS DRIVERS DCP Scale & Scope of Operations: DCP is the largest stand-alone natural gas processor in the United States, and it has a robust presence in all of the key production regions within the country. Additionally, the company's large asset base provides a platform for growth opportunities across its footprint. DCP has a particular focus on the Eagle Ford shale, the Rockies and the Permian Basin, all areas in need of gathering and processing infrastructure as production in the liquids rich regions of these plays is increasing. Commodity Price & Volumetric Exposure: DCP does not hedge its commodity risk directly. Instead, it tries to balance its contract mix to help reduce exposure to commodity price volatility while still providing upside should commodity prices strengthen. Additionally, DCP, like every processor, has volume exposure; however, production in DCP's liquids rich regions continues to be a focus for producers. DCP has seen volume growth even as prices have dramatically declined. Deteriorating Credit Metrics: DCP's management has typically targeted between 2.5x - 3.5x debt-to-EBITDA throughout the commodity price cycle and greater than 5.0x EBITDA interest coverage (excluding EBITDA of its master limited partnership [MLP] subsidiary DPM and non-recourse debt). Prior to the most recent capital spending cycle DCP consistently met these targets even in low commodity price environments. The recent fall in commodity prices will push leverage metrics well outside of these bounds. Fitch has listed sustained standalone leverage above 4.5x as a downgrade trigger and believes that leverage will remain well above these bounds over the next two years, provided there are no steps taken by management or sponsors to significantly reduce leverage and get DCP on a path towards the 4.5x. Liquidity is adequate currently; however, DCP is expected to need covenant relief in the next several quarters. Fitch expects DCP would be able to receive relief; however, if it did not, a negative rating action would be likely. Supportive Ownership: DCP's owners have in the past exhibited a willingness to forgo dividends, provide capital support in the form of co-investment on growth projects and a willingness to allow DCP to operate within its operating cash generation as capital market access tightened and commodity prices fell during the 2008/2009 down cycle. Fitch expects DCP's owners to continue to provide similar support to DCP. Fitch would likely take further negative ratings actions should SE or PSX be reticent or show an unwillingness to provide support in the form of distribution cuts, or capital injections if and as needed over the next 6 to 12 months. DPM Sponsor Relationship: DCP's ownership of DPM's GP interest gives DCP significant control over DPM's operations, including major strategic decisions such as dropdown opportunities, investment plans, distributions, and management of operations, as well as centralized treasury functions. DCP has also historically provided significant support for DPM including a demonstrated willingness to take back units as equity contributions for dropdown transactions, as well as, providing fixed demand charges and throughput fees for dropped down processing plants. Meanwhile, DPM provides DCP a low cost source of financing and access to equity markets. Fitch would likely not rate DPM higher than DCP based on the financial, strategic and operational relationship between the entities, but does not currently believe DPM should move to below investment grade, given the cash flow stability, structural superiority and reasonable credit metrics at the partnership. Fitch expects DCP, SE, and PSX to continue to support DPM's credit quality including maintaining a capital structure and business risk profile in line with other investment grade MLPs and maintaining a solid distribution coverage ratio. Cash Flow Stability: DPM possesses relatively predictable cash flows that are supported by the partnership's portfolio of fee-based assets and an active hedging program that helps moderate commodity price exposure. Near-term commodity price exposure is low with roughly 90% of gross margin either fee-based or hedged for 2015 and roughly 70% for 2016 (with 60% beyond 2016). DPM actively manages the majority of its commodity exposure through a hedging program, with shorter tenor direct hedges on NGLs and longer dated swap positions on natural gas and crude oil as a proxy for NGLs. Natural Gas and NGL hedges have typically been provided by DCP. Strategic Location of Assets: DPM benefits from the strategic location of its midstream assets, which touch several core U.S. natural gas producing basins and are often integrated with assets owned by DCP, and the strategic location of DPM's wholesale propane terminals which serve high-volume retailers in Northeast markets. As such, DPM achieves steady demand from its core customers as well as good growth opportunities for organic investments. Volume Sensitivity: While taking significant steps to mitigate the volatility of prices, DPM has exposure to throughput volumes on its assets. DPM has some take-or-pay agreements that eliminate volumetric risk. Lower volumes can be driven by many factors including: lower throughput on the partnership's gathering and processing assets due to reduced production from upstream producers, lower throughput due to lower upstream production or due to bypassing NGL processing facilities when natural gas prices are very high and lower propane volumes delivered through its terminals due to warm weather, conservation and fuel switching. Should volumes significantly decline Fitch would likely take negative ratings actions. RATINGS SENSITIVITIES DCP Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Inability or unwillingness to address current challenging operating environment and high leverage, through some combination of reductions in capital spending, distributions to owners, and/or operating costs or equity injection, could lead to a further downgrade. Fitch would expect a plan to get DCP on a path towards sustainable leverage at 4.5x or below in order to maintain current rating. Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Improvement of stand-alone DCP LLC leverage of between 4.0x to 4.5 on a sustained basis would likely lead to a revision of the Negative Outlook. Significant reduction in commodity price exposure to 30% of gross margin or below at DCP could lead to a positive rating action. DPM Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- DPM leverage above 4.5x on a sustained basis would likely result in at least a one notch downgrade; -- A significant change in the support structure from DCP Midstream, particularly with regard to helping mitigate DPM commodity price exposure, without increasing DPM's liquidity or an appropriate change to the hedging strategy to mitigate price exposure at a reasonable cost; -- Significant growth in commodity exposed earnings not hedged or fixed fee to more than 30% of gross margin exposed without an appropriate, significant adjustment in capital structure, specifically a reduction in leverage to below 3.5x would likely lead to at least a one notch downgrade; -- Acceleration of dropdowns funded by more than 50% debt or which results in significantly increased commodity price exposure at DPM. Aggressive funding of growth capital spending with debt at levels above 50%/50% debt/equity could lead to a negative ratings action; -- A downgrade at DCP could lead to a downgrade at DPM if it results in increased commodity price risk at DPM. Positive -- A revision of the Negative Outlook for DCP could lead to a positive rating action at DPM; -- Increase in third party hedging and price support at DPM could lead to a positive rating action. Fitch downgrades DCP's ratings as follows: -- IDR to 'BBB-' from 'BBB'; -- Senior unsecured to 'BBB-' from 'BBB'; -- Short-term IDR to 'F3' from 'F2' -- Jr. Subordinated to 'BB' from 'BB+'. Fitch affirms DPM as follows: -- IDR at 'BBB-'; -- Senior unsecured rating at 'BBB-'; -- Short-term IDR and commercial paper rating at 'F3'. The Ratings Outlook for both DCP and DPM has been revised to Negative from Stable. DELIAS INC: DLA Piper Approved as Bankruptcy Counsel ---------------------------------------------------- Bankruptcy Judge Robert D. Drain authorized dELiA*s, Inc., et al., to employ DLA Piper LLP (US) as bankruptcy counsel, effective as of the Petition Date. The Court also ordered that to the extent that the reconciliation of the amount of the prepetition invoices is less than the amount advanced by the Debtors and held by DLA as of the Petition Date, DLA is authorized to hold an amount no greater than $75,000 as a postpetition retainer, to be applied against any amounts approved by the Court in connection with any final fee application in the Chapter 11 cases, and will refund to the Debtors any amount in excess of $75,000. As reported in the Troubled Company Reporter on Jan. 30, 2015, the Debtors and DLA entered into an engagement agreement effective as of Nov. 6, 2014, pursuant to which the Debtors retained DLA to provide legal services to the Debtors in connection with general restructuring issues and in connection with a potential bankruptcy filing by the Debtors. DLA bills the Debtors at these hourly rates: $410 to $1,325 for partners; $110 to $1190 for counsel; and $335 to $800 for associates. The restructuring attorney leading the DLA engagement in the Chapter 11 cases is Gregg M. Galardi whose present hourly rate is $995. In accordance with the engagement agreement, DLA will assign work to lawyers, paralegals and other staff who can provide the necessary services to the Debtors in the most efficient and cost-effective manner. In addition, DLA will apply to the Court for allowance of compensation for professional services rendered and reimbursement of expenses incurred in the Chapter 11 cases DLA currently holds a retainer in the amount of $360,000. Mr. Galardi attests that the partners, counsel, and associates of DLA are "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code. About DELIA*S INC. Launched in 1993, dELiA*s Inc., is a retailer which sells apparel, accessories, footwear, and cosmetics marketed primarily to teenage girls and young women. The dELiA*s brand products are sold through the Company's mall-based retail stores, direct mail catalogs and e-commerce Web sites. On Dec. 7, 2014, dELiA*s and eight of its subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y.). The Debtors have requested that their cases be jointly administered under Case No. 14-23678. As of the bankruptcy filing, dELiA*s owns and operates 92 stores in 29 states. The Debtors have tapped Piper LLP (US) as counsel, Clear Thinking Group LLC, as restructuring advisor, Janney Montgomery Scott LLC, as investment banker, and Prime Clerk LLC as claims agent. As of the Petition Date, the Debtors had $47.0 million in total assets and $50.5 million in liabilities. The Debtors have sought court approval of a deal for Gordon Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC, to launch going-out-of-business sales. The Official Committee of Unsecured Creditors tapped to retain Kelley Drye & Warren LLP as its counsel, and Capstone Advisory Group, LLC, and Capstone Valuation Services, LLC, as financial advisors. DENDREON CORP: Asks Court to Extend Deadline to Remove Suits ------------------------------------------------------------ Dendreon Corp. has filed a motion seeking additional time to remove lawsuits involving the company and its affiliates. In its motion, Dendreon asked the U.S. Bankruptcy Court in Delaware to move the deadline for filing notices of removal of the lawsuits to July 9 from Feb. 9. Some of the lawsuits involving the companies are subject to removal pursuant to Section 1452 of the U.S. Bankruptcy Code, which applies to claims related to bankruptcy cases, according to the court filing. A court hearing to consider the motion is scheduled for Feb. 5. About Dendreon Corp With corporate headquarters in Seattle, Washington, Dendreon Corporation -- http://www.dendreon.com/-- a biotechnology company focused on the development of novel cellular immunotherapies to significantly improve treatment options for cancer patients. Dendreon's first product, PROVENGE (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) and became commercially available for the treatment of men with asymptomatic or minimally symptomatic castrate-resistant (hormone-refractory) prostate cancer in April 2010. Dendreon is traded on the NASDAQ Global Market under the symbol DNDN. Dendreon and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. D. Del.) on Nov. 10, 2014. The Debtors have requested that their cases be jointly administered under Case No. 14-12515. The petitions were signed by Gregory R. Cox, interim chief financial officer and treasurer. Dendreon sought bankruptcy protection after it reached agreements on the terms of a financial restructuring with certain holders of the Company's 2.875% Convertible Senior Notes due 2016 representing 84% of the $620 million aggregate principal amount of the 2016 Notes. The financial restructuring may take the form of a stand-alone recapitalization or a sale of the Company or its assets. The Debtors have engaged Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Lazard Freres & Co. LLC, as investment banker; AlixPartners, as restructuring advisors; and Prime Clerk LLC as claims and noticing agent. The Debtors disclosed $365 million in total assets and $664 million in total liabilities as of June 30, 2014. The U.S. Trustee for Region 3 appointed five members to the Official Committee of Unsecured Creditors. DENDREON CORP: Files Schedules of Assets and Liabilities -------------------------------------------------------- Dendreon Corporation filed with the U.S. Bankruptcy Court its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $320,697,757 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-Priority Claims $624,050,463 ----------- ----------- Total $320,697,757 $624,050,463 A copy of the schedules is available for free at http://bankrupt.com/misc/DENDREONCORP_246_sal.pdf About Dendreon Corp With corporate headquarters in Seattle, Washington, Dendreon Corporation -- http://www.dendreon.com/-- a biotechnology company focused on the development of novel cellular immunotherapies to significantly improve treatment options for cancer patients. Dendreon's first product, PROVENGE (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) and became commercially available for the treatment of men with asymptomatic or minimally symptomatic castrate-resistant (hormone-refractory) prostate cancer in April 2010. Dendreon is traded on the NASDAQ Global Market under the symbol DNDN. Dendreon and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. D. Del.) on Nov. 10, 2014. The Debtors have requested that their cases be jointly administered under Case No. 14-12515. The petitions were signed by Gregory R. Cox, interim chief financial officer and treasurer. Dendreon sought bankruptcy protection after it reached agreements on the terms of a financial restructuring with certain holders of the Company's 2.875% Convertible Senior Notes due 2016 representing 84% of the $620 million aggregate principal amount of the 2016 Notes. The financial restructuring may take the form of a stand-alone recapitalization or a sale of the Company or its assets. The Debtors have engaged Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Lazard Freres & Co. LLC, as investment banker; AlixPartners, as restructuring advisors; and Prime Clerk LLC as claims and noticing agent. The Debtors disclosed $365 million in total assets and $664 million in total liabilities as of June 30, 2014. The U.S. Trustee for Region 3 appointed five members to the Official Committee of Unsecured Creditors. DISH NETWORK: Auction Win May Negatively Impact Moody's Ba3 CFR --------------------------------------------------------------- Moody's Investors Service said that DISH Network Corporation's (Ba3 CFR, negative outlook) recent significant win of wireless broadband frequencies in the AWS-3 auction conducted by the Federal Communications Commission (FCC) may negatively impact it's DISH DBS Corporation ("DISH DBS") subsidiary's Ba3 Corporate Family rating (CFR) and SGL-1 speculative grade liquidity rating. The impact on the company's ratings will depend upon the amount of DISH's obligation, how it is financed and if there is any support that will be needed going forward from DISH DBS to fund or service any additional debt for spectrum assets that bondholders may have no direct asset recourse to as part of the DISH DBS credit. Based on a public notice issued by the FCC, two companies that DISH is an investor through subsidiaries named SNR Wireless LicenseCo, LLC and Northstar Wireless, LLC, won $13.3 billion of licenses across the US, but due to small business eligible 25% discounts, they will pay $10 billion for the licenses assuming that the discounts are approved. Over the past several years, DISH has been pursuing large scaled expansion in the wireless space by aggressively purchasing wireless spectrum and by attempting though failing to merge with Sprint as well as to acquire outstanding shares of Clearwire not already owned by Sprint. While Moody's is aware of the significant asset value associated with DISH's amassed terrestrial spectrum, it remains unclear at this stage how will the company use its valuable spectrum portfolio going forward. The combined winning bids from SNR Wireless and Northstar were second only to the $18 billion winning bids by AT&T Wireless. The AWS-3 spectrum and the spectrum holdings that DISH has already secured make DISH a very prominent holder of US spectrum, and all of it is virgin spectrum as it remains completely un-deployed. DISH has not yet announced its obligations under the auction nor how it plans to fund them as it is still bound by anti-collusion rules for the next 10 business days following the end of the auction, and therefore prevented from commenting about anything related to the auction, including funding plans. Moody's anticipate that when the rules expire, the company will announce its obligations and funding intentions which could impact the DISH DBS credit. The company is also required to build out some portions of its spectrum holdings in coming years which could also impact the credit."The company could move forward with a number of options, including selling or licensing the spectrum, independently launching its own wireless service and competing as the nation's fifth major player in the wireless telecommunications space or partnering with or acquiring or merging with another wireless carrier like T-Mobile," stated Neil Begley, a Moody's Senior Vice President. Management dispensed with the notion that DISH might launch its own wireless service, as it does not currently have the infrastructure needed to commercialize the spectrum it owns and building a network from scratch would entail significant cash capex investments needed for R&D, build out, wireless testing, marketing, handset subsidies, etc. "In Moody's view, a tie-up with an existing wireless carrier or a company with significant capital resources is the only possible strategy that could give DISH a chance of success in the wireless arena, and management has publicly stated its desire to do so," added Begley. In Moody's opinion, a wireless service offering could potentially fuel future longer-term growth for the company by counteracting the saturation and fierce competition in the U.S. pay-TV industry which is increasing its reliance on broadband capabilities. The addition of a broadband offering to the company's existing TV package would enhance its competitive position and subscriber retention in the long run, and allow it to effectively compete with cable rivals. This may depend upon whether it focuses on the in or out of home market and its competitiveness in delivering price competitive data speeds. However, Moody's remains cautious about execution risks and significant cash outlays needed to build a wireless network even via a partnership with an existing carrier. "T-Mobile is likely the last great opportunity for DISH to control an important US wireless company as well," stated Begley. "The biggest constraint for such a deal is both the weak balance sheet for both companies as well as the capital investment needed just to keep pace with AT&T Inc. and Verizon Communications, Inc., never mind closing the gap," added Begley. As Moody's have stated in Moody's previous announcements, risks associated with the company's wireless strategy are only partially tempered by the potential to improve DISH's business profile as Moody's remain concerned over the legal credit structure supporting DISH DBS bonds, which possess only minimal protections against leverage and up-streaming cash to its parent, DISH. Further, the company's creditors have no recourse to assets held outside of DISH DBS. If DISH funds their portion of $10 billion AWS-3 spectrum purchase with cash on hand, which along with marketable securities is roughly $10 billion, uncertainty surrounding strategic plans and future impact on its balance sheet will continue to weigh on DISH's credit ratings as it pursues a potentially transformative entry into the wireless market. Excluding any additional financing, DISH DBS's gross debt-to-EBITDA leverage, was 4.7x as of 9/30/2014 (incorporating Moody's standard adjustments). The company has no bank revolver, so its cash balance and free cash flow generation are its sources for liquidity. The company's ratings would come under pressure if it engages in acquisitions and investments such that gross leverage is sustained over 5.5x or if it is expected to continuously up-stream cash and some or all of its free cash flow from DISH DBS to support the growth of a business to which DISH DBS's creditors have no recourse and leverage is sustained above 4.5x. DISH is the third largest pay television provider in the United States, operating satellite services with approximately 14 million subscribers. Revenues for LTM ended 9/30/14 were $14.5 billion. DISH NETWORK: S&P Puts 'BB-' CCR on CreditWatch Negative -------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on Englewood, Colo.-based DISH Network Corp., including its 'BB-' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement follows the conclusion of the AWS-3 auction, in which designated entities of DISH placed winning bids of $13.3 billion ($10 billion net of discount) for licenses in key markets such as New York, Los Angeles, Chicago, and Washington, D.C.," said Standard & Poor's credit analyst Michael Altberg. Based on auction rules, winning bidders have 10 days to place a 20% deposit, with another 10 days to make final payments. S&P expects that DISH will use a combination of cash and debt to fund the spectrum purchases, although the exact funding mix is still uncertain. S&P also do not know if DISH will obtain any partner funding for the spectrum. As of Sept. 30, 2014, the company had $9.3 billion of cash and marketable securities (prior to its $2 billion November 2014 debt issuance). S&P believes the company will most likely look to maintain healthy cash balances following the spectrum purchases in order to provide ongoing flexibility and optionality around future plans. As a result, S&P believes it is likely that DISH will fund a material portion of spectrum purchases with debt. Under a scenario where 50% of spectrum purchases are funded with debt, S&P estimates that gross adjusted leverage could increase to the mid-6x area in 2015, while net adjusted leverage (net of surplus cash) would be around 4.8x. Based on a sensitivity of funding scenarios, S&P estimates that gross adjusted leverage could range from 5x (all cash) to 8.3x (all debt), assuming DISH funds the full $10 billion in spectrum purchases. S&P views the company's gross adjusted leverage as more reflective of its credit profile, since excess cash balances will most likely be spent on wireless initiatives as opposed to debt repayment. In addition, while the company's sizeable wireless spectrum assets provide a degree of financial flexibility and could lead to a longer-term improvement in the company's business risk profile, DISH's ultimate wireless strategy remains uncertain, and could require additional investments. S&P could lower the rating if debt funding for the spectrum purchases pushes gross adjusted leverage materially above 5x, with no clear path for improvement. S&P currently believes any downgrade of the company would be limited to one notch. S&P plans to resolve the CreditWatch listing over the next month as it gains more clarity around the company's funding plans. ELLIOTT MANUFACTURING: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Elliott Manufacturing Company, Inc. P.O. Box 11277 Fresno, CA 93772 Case No.: 15-10366 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Eastern District of California (Fresno) Judge: Hon. Fredrick E. Clement Debtor's Counsel: Peter L. Fear, Esq. FEAR LAW GROUP, P.C. 7750 N Fresno St #101 Fresno, CA 93720-1145 Tel: (559) 436-6575 Email: pfear@fearlaw.com Total Assets: $1.6 million Total Liabilities: $1.9 million The petition was signed by Thomas E. Cole, CEO. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/caeb15-10366.pdf FEDERAL RESOURCES: Meeting of Creditors Set for Feb. 5 ------------------------------------------------------ The meeting of creditors of Federal Resources Corp. is set to be held on Feb. 5, at 1:30 p.m., according to a filing with the U.S. Bankruptcy Court for the District of Utah. The meeting will be held at Suite 250, 405 South Main Street, in Salt Lake City, Utah. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Federal Resources 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. FFS DATA: 11th Circ. Splits from 5th on Confirmation Res Judicata ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Eleventh Circuit Court of Appeals in Atlanta split from its sister Fifth Circuit in New Orleans by saying there is no tougher res judicata test for confirmation orders. According to the report, in a 19-page opinion by Circuit Judge Jill Pryor, the Eleventh Circuit also politely said the three earlier Fifth Circuit cases were overruled by a 2009 decision from the U.S. Supreme Court, named Travelers Indemnity Co. v. Bailey, which says that the same res judicata rules apply to confirmation orders and Chapter 11 plans they implement. As previously reported by The Troubled Company Reporter, citing Law360, IberiaBank Corp. asked the Eleventh Circuit to reinstate its suit over a $10 million real estate loan against the owner of formerly bankrupt FFS Data Inc., arguing that the releases in the company's reorganization plan do not extend to the owner's personal guaranty of the loan. Mark Roher of Jones Walker LLP, who argued for IberiaBank before an Eleventh Circuit panel, said the bankruptcy court should not have ruled that the releases for FFS Data owner Brad Geisen in the company's confirmed plan eclipsed the bank's $5.3 million suit for the deficiency between what was owed on the loan and what was recouped in a short sale of the mortgaged property. The case is Iberiabank v. Geisen (In re FFS Data Inc.), 14-11473, U.S. Eleventh Circuit Court of Appeals (Atlanta). Based in Boca Raton, Florida, FFS DATA Inc. aka Foreclosure.com filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 09-38395) on Dec. 23, 2009. Judge Erik P. Kimball presides over the case. Bradley S. Shraiberg, Esq., represents the Debtor. In its petition, the Debtor estimated assets between $1 million and $10 million, and debts between $10 million and $50 million. FLINTKOTE COMPANY: Ruling Against Frederick Place Claim Affirmed ---------------------------------------------------------------- District Judge Leonard P. Stark upheld the bankruptcy court's order that tossed 8 E. Frederick Place, LLC's environmental claims against Flintkote Co., and denied its request for relief from the automatic stay in Flintkote's Chapter 11 case. Frederick Place filed claim number 2242 for an "unknown" amount of damages due to alleged "site contamination." The Claim represents an underlying dispute over responsibility for pollution on a 6.5 acre parcel of land in Cedar Knolls, New Jersey, that Frederick Place has owned since 1984. From 1945 to 1972, Debtors owned and operated a rubber manufacturing facility on the Property. The case before the District Court is,IN RE THE FLINTKOTE COMPANY, et al. 8 E. FREDERICK PLACE, LLC, Appellant, v. THE FLINTKOTE COMPANY and FLINTKOTE MINES LIMITED, Appellees, CIV. NO. 12-1176-LPS (D. Del.). A copy of Judge Stark's January 16, 2015 Memorandum is available at http://is.gd/d2hbvJfrom Leagle.com. 8 E. Frederick Place LLC, is represented by Learon John Nelson Bird, Esq., at Fox Rothschild LLP. About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. James J. McMonagle, is the legal representative for future claimants. The FCR has retained Dr. Timothy Wyant as claims evaluation consultant. The FCR is represented by James L. Patton, Jr., Esq., and Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor, LLP; and Reginald W. Jackson, Esq., at Vorys, Sater, Seymour & Pease LLP. When Flintkote filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. The Debtors' Chapter 11 cases have been re-assigned to Judge Mary F. Walrath in line with the retirement of former Bankruptcy Judge Judith Fitzgerald. FURNITURE BRANDS: "Carter" Shareholder Class Suit Dismissed ----------------------------------------------------------- District Judge Henry Edward Autrey granted the Defendants' Motion to Dismiss Plaintiffs' Consolidated Amended Complaint in the case captioned, KEITH CARTER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. FURNITURE BRANDS INTERNATIONAL, INC., RALPH P. SCOZZAFAVA and VANCE C. JOHNSTON, Defendants. United States District Court, E.D. Missouri, Eastern Division, No. 4:13CV1600 HEA (E.D. Mo.). A copy of the Court's January 27, 2015 Opinion, Memorandum and Order is available at http://bit.ly/1uSQThH from Leagle.com. Plaintiffs, who purchased shares of the common stock of Furniture Brands, Inc. during the alleged class period, filed this Consolidated Amended Complaint against Ralph Scozzafava, the former Chief Executive Officer and Chairman of the Board of Directors of Furniture Brands, and Vance Johnston, the former Chief Financial Officer of Furniture Brands, for violations of sections 10(b) and 20(a) of the Exchange Act, and U.S. Securities and Exchange Commission Rule 10b-5. About Furniture Brands Furniture Brands International (NYSE:FBN) -- http://www.furniturebrands.com-- engaged in the designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/ independent retailers and mass merchant stores. Its brands include Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. The balance sheet at June 29, 2013, showed $546.73 million in total assets against $550.13 million in total liabilities. On Sept. 9, 2013, Furniture Brands International, Inc. and 18 affiliated companies sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12329). Attorneys at Paul Hastings LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal North America, LLC, is the restructuring advisors. Miller Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc. dba Epiq Bankruptcy Solutions is the claims and notice agent. The official creditor's committee is comprised of the Pension Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers. The Committee tapped Blank Rome LLP as co-counsel, Hahn & Hessen LLP as lead counsel, BDO Consulting as financial advisor, and Houlihan Lokey Capital, Inc., as investment banker. In November 2013, Furniture Brands won bankruptcy court approval to sell the business to KPS Capital Partners LP for $280 million. Private-equity investor KPS formed a new company named Heritage Home Group LLC to operate the business. Furniture Brands changed its name to FBI Wind Down, Inc., following the sale. The Debtors on July 14, 2014, won confirmation of their Second Amended Joint Plan of Liquidation as filed on July 9, 2014. GENERAL MOTORS: Compensation Fund Receives 4,180 Claims ------------------------------------------------------- Jeff Bennett, writing for The Wall Street Journal, reported that the total number of claims filed with the General Motors Co. ignition switch compensation fund climbed to 4,180 as potential victims rushed to submit their paper work before the deadline. According to the report, fund administrator Camille Biros, working alongside Kenneth Feinberg to determine payout eligibility, said the total will increase somewhat since some people may have mailed their claims rather than submit them electronically. Ms. Biros also confirmed the death toll increased by one person to 51 while the number of seriously injured rose by two to 77, the Journal related. About General Motors General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. * * * The Troubled Company Reporter, on Sep. 29, 2014, reported that Standard & Poor's Ratings Services raised its corporate credit rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from 'BB+', and revised the outlook to stable from positive. At the same time, S&P raised its issue-level rating on GM's unsecured debt to 'BBB-' from 'BB+' and simultaneously withdrew its '4' recovery rating on that debt, because S&P do not assign recovery ratings to the issues of investment-grade companies. On Oct. 21, 2014, the TCR reported that Fitch Ratings has assigned a rating of 'BB+' to GM's amended unsecured credit facilities. Fitch currently rates GM's Issuer Default Rating (IDR) 'BB+'. The Rating Outlook is Positive. Fitch has also affirmed and withdrawn the 'BB+' IDR of GM's General Motors Holdings LLC (GM Holdings) subsidiary, as there is no longer any rated debt at the subsidiary, and Fitch does not expect the subsidiary to be an active issuer going forward. Fitch has also withdrawn GM Holdings' unsecured credit facility rating of 'BB+' as the subsidiary is no longer a borrower on the facilities. The TCR, on Nov. 6, 2014, reported that Fitch Ratings has assigned a rating of 'BB+' to GM's proposed issuance of senior unsecured notes. The existing Issuer Default Rating (IDR) for GM is 'BB+' and the Rating Outlook is Positive. GREEN FLEET: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Green Fleet Systems, LLC 20500 Alameda St. Carson, CA 90810 Case No.: 15-11542 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Hon. Barry Russell Debtor's Counsel: David L. Neale, Esq. LEVENE NEALE BENDER RANKIN & BRILL LLP 10250 Constellation Blvd Ste 1700 Los Angeles, CA 90067 Tel: 310-229-1234 Fax: 310-229-1244 Email: dln@lnbrb.com Total Assets: $7.1 million Total Liabilities: $10.2 million The petition was signed by Gary Mooney, president and chief executive officer. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-11542.pdf GT ADVANCED: Apple to Build Data Command Center in Mesa, Ariz. -------------------------------------------------------------- Daisuke Wakabayashi, writing for The Wall Street Journal, reported that Apple Inc. plans to invest $2 billion to build a data center in Arizona in the location where its failed sapphire manufacturing facility exists. According to the report, Apple said it expects to start construction in 2016 after GT Advanced Technologies Inc., the company's sapphire manufacturing partner, clears out of the 1.3 million square foot site. The Journal noted that the investment comes a few months after GTAT filed for bankruptcy protection in October, citing problems with the Arizona facility. Shortly after its bankruptcy filing, GTAT said it planned to lay off more than 700 employees in Arizona, the report noted. About GT Advanced Technologies 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. GT ADVANCED: Wants Plan Filing Deadline Moved to June 30 -------------------------------------------------------- GT Advanced Technologies Inc. and its affiliated debtors ask the Bankruptcy Court to enter an order extending: (a) their exclusive period under Section 1121(c)(2) of the Bankruptcy Code to file a Chapter 11 plan through June 30, 2015, and (b) their exclusive period under Section 1121(c)(3) of the Bankruptcy Code to solicit acceptances of its Chapter 11 plan through August 31, 2015. James T. Grogan, Esq., at Paul Hastings LLP, relates that less than four months ago, GTAT filed the Chapter 11 cases -- the second largest chapter 11 cases to ever file in the District of New Hampshire -- in the midst of an acute operational and liquidity crisis with less than three weeks of preparation. After the petition date, he notes, GTAT's management and advisors worked around the clock to stabilize the business and develop an operational framework upon which an emergency strategy could be created in order to maximize enterprise value. Most importantly, GTAT determined that, to preserve the value of its estates, it should extract itself from the relationship with its largest creditor and customer, Apple Inc., and wind down its sapphire growth operations while returning to its legacy business, namely selling sapphire growth furnaces, solar equipment, as well as developing and selling other new technologies, including the Merlin and Hyperion products. According to Mr. Grogan, since the filing of the Chapter 11 cases, GTAT has made substantial progress along this path-reaching a consensual resolution with Apple with respect to the amicable separation of their respective businesses and winding down the sapphire growth operations at its facilities in Mesa, Arizona, and Salem, Massachusetts. In addition, Mr. Grogan says, GTAT has recently developed a business plan pursuant to which it will transition to "new GTAT" with a renewed focus on selling sapphire growth furnaces and legacy solar equipment, while investing in and commercializing the Merlin and Hyperion growth technologies. Notwithstanding the substantial progress made by GTAT to date, terminating exclusivity at this early stage would be premature, Mr. Grogan maintains. He points out that as the Court recently recognized at the Jan. 26 hearing when ruling on the motion for appointment of an equity committee, the Chapter 11 cases are in their early stages and GTAT's business is in the process of evolving. Consequently, Mr. Grogan avers, GTAT must undertake a number of important steps before it can successfully emerge from chapter 11. Among other things, GTAT hopes to promptly seek Court approval of debtor-in-possession financing, a critical step in its reorganizational efforts. Furthermore, because the deadline for creditors to file proofs of claims occurred recently on Jan. 26, 2015, the claims reconciliation process, which will involve thousands of claims, has not yet begun. GTAT has not had an opportunity to analyze and formulate a chapter 11 plan for resolving the myriad of liabilities that necessitated the filing of these chapter 11 cases, Mr. Grogan says. Moreover, Mr. Grogan relates, in light of the crisis mode under which GTAT has been operating since the petition date, GTAT is only now turning to other critical issues, including intercompany claims, analysis of issues related to substantive consolidation, and the sale of non-core assets. Finally, GTAT will need to operate its business for a period of time to validate the assumptions underlying its new business plan before being able to move these cases forward, he avers. Mr. Grogan tells that Court that the five-month extension of exclusivity is not only necessary to address the outstanding issues, but also mandated by the reality of the situation in which GTAT finds itself: GTAT is a "re-start up" which needs to be "battle-tested" before creditors can make an informed decision on a plan of reorganization. About GT Advanced Technologies 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. GT ADVANCED: Wants to Have Until May 4 to Decide on Leases ---------------------------------------------------------- GT Advanced Technologies Inc. and its affiliated debtors ask the Bankruptcy Court to extend until May 4, 2015, the time by which it must decide on whether to assume or reject unexpired non-residential real property leases. Under Section 365(d)(4)(A) of the Bankruptcy Code, all of GTAT's unexpired non-residential real property leases that have not yet been rejected, assumed, or assumed and assigned, will be deemed rejected by Feb. 3, 2015 -- the date that is 120 days after the Petition Date -- unless GTAT assumes the Unexpired Leases by that date. At the outset of the Chapter 11 cases, GTAT was a party to nearly 40 non-residential real property leases. During the initial 120 days of these cases, GTAT has already rejected 22 real property leases. Nevertheless, GTAT says it has not had sufficient time to evaluate all of its Unexpired Leases and make a reasoned determination about how the Unexpired Leases will be utilized by the "new GTAT". GTAT is party to 15 Unexpired Leases that have not been rejected during the Chapter 11 cases. These Unexpired Leases primarily comprise leases for office space or industrial space to house equipment and machinery in connection with GTAT's ongoing businesses. The Unexpired Leases may be critical to the operation of the "new GTAT," and reviewing those Unexpired Leases is an integral part of GTAT's exit strategy for the Chapter 11 cases. About GT Advanced Technologies 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. HIGHLAND COMMUNITY: Second Bank Failure in 2015 ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Highland Community Bank from Chicago became the second bank failure in 2015 when it was taken over by regulators on Jan. 23. As previously reported by The Troubled Company Reporter, to protect the depositors, the Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with United Fidelity Bank, fsb, Evansville, Indiana, to assume all of the deposits of Highland Community Bank. The two branches of Highland Community Bank will reopen as branches of United Fidelity Bank, fsb during their normal business hours. Depositors of Highland Community Bank will automatically become depositors of United Fidelity Bank, fsb. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Bloomberg related that in 2014, there were 18 bank failures, down 25 percent from 2013 when there were 24. The 2013 failures were about half those in 2012, the report said. HIGHWAY TECHNOLOGIES: Wynne Systems to Get $160,000 Admin Claim --------------------------------------------------------------- Bankruptcy Judge Kevin J. Carey granted, in part, and denied, in part, the Motion of Wynne Systems, Inc. for an Order (i) compelling payment of all outstanding postpetition fees and charges due under a master agreement pursuant to 11 U.S.C. Section 503(b)(1)(A), and (ii) compelling payment of attorneys' fees, filed in the Chapter 7 case of Highway Technologies Inc. Wynne seeks allowance and payment of an administrative expense claim based upon the Debtors' post-petition use of Wynne's software systems, and the legal fees incurred by Wynne to obtain payment of its post-petition claim. The Debtors filed an objection to Wynne's Motion, disputing the amount that should be paid to Wynne as an administrative expense claim under Bankruptcy Code Sec. 503(b)(1)(A), and contesting the Debtors' obligation to pay legal fees. Wynne argues that three monthly payments of $160,766.00 each are due for post-petition services in May, June and July 2013. After applying a credit for the July Payment, Wynne seeks an administrative expense claim in the amount of two monthly payments ($321,532.00), plus attorney fees. The Debtors dispute the amount of Wynne's administrative expense claim, arguing that it exceeds the value of the Debtors' actual post-petition use of the software. Judge Carey said the Motion is granted, in part, to allow Wynne a chapter 11 administrative expense claim in the amount of $160,766. Wynne has already received payment of this amount post-petition and, therefore, no further payment is due to Wynne based on its Sec. 503(b)(1) administrative expense claim. The Motion is denied, in part, with respect to Wynne's request for payment of attorneys' fees. A copy of the Court's January 30, 2015 Memorandum is available at http://is.gd/pf6aPofrom Leagle.com. About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case Nos. 13-11325 to 13-11326) on May 22, 2013, to conduct an orderly liquidation. Richard M. Pachuiski, Esq., Debra I. Grassgreen, Esq., Bruce Grohsgal, Esq., Maria A. Bove, Esq., and John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, Esq., at Schulte Roth & Zabel, in New York. The Company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. In its amended schedules, Highway Technologies disclosed $41,350,616 in assets and $91,780,181 in liabilities. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. Gavin/Solmonese LLC serves as the Committee's financial advisor. At the behest of the Debtors, the Court converted the Chapter 11 cases to liquidation under Chapter 7 of the Bankruptcy Code on Dec. 20, 2013. Judge Kevin J. Carey authorized Charles A. Stanziale, Jr., the Chapter 7 trustee, to employ McCarter & English, LLP as his counsel. HIPCRICKET INC: Proposes Canaccord as Investment Banker ------------------------------------------------------- Hipcricket, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Canaccord Genuity Inc. as investment banker, nunc pro tunc to the Petition Date. Canaccord is an independent and full-service global investment banking firm offering investment banking, equity research, wealth management, institutional and private brokerage, and private capital solutions to individual and institutional clients. Canaccord employs over 2,000 individuals and has 20 locations in 11 countries worldwide. As a result of rendering prepetition services to the Debtor, Canaccord is intimately familiar with the Debtor's corporate and capital structure, management, operations, and various other aspects of its business. Pursuant to an Engagement Letter dated as of Jan. 20, 2014, as amended on Dec. 14, 2014, Canaccord will be compensated based on these fee structure: -- Monthly Fees. The Debtor will pay Canaccord a fee due, earned and fully payable in the amount of $35,000 on Feb. 2, 2015, and on the first business day of each month thereafter, a fee in the amount of $35,000 will be paid and earned upon Canaccord's receipt thereof in consideration of Canaccord accepting the engagement. -- M&A Fee. Upon the closing of a transaction other than a financing transaction, a fee equal to the greater of (i) $500,000 and (ii) 5 percent of the aggregate consideration up to and including $15 million, plus 4 percent of the aggregate consideration over $15 million up to and including $20 million, plus 3 percent of the aggregate consideration over $20 million. -- Success Fee. Upon the closing of a financing transaction consisting of a financing for any portion of the Debtor, whether in the form of secured, unsecured, subordinated or senior debt or equity equivalents, the Debtor will pay Canaccord a success fee equal to 3 percent of the gross proceeds received by the Debtor in the financing transaction, provided that if a proposed buyer provides debtor-in-possession financing as part of a contemplated sale transaction, and the sale transaction is consummated with the proposed buyer, then Canaccord will earn only the M&A Fee and not any Success Fee on account of a financing transaction. -- Expenses. The Debtor will, upon Canaccord's request, reimburse Canaccord for its reasonable out-of-pocket expenses incurred from time to time, provided that the expenses will not exceed $50,000 in the aggregate. Canaccord will notify the Debtor once expenses exceed $25,000. About Hipcricket Headquartered in Bellevue, Washington, Hipcricket, Inc., formerly known as Augme Technologies, is a publicly held Delaware corporation. Hipcricket is in the business of providing end-to-end, data-driven mobile advertising and marketing solutions through its proprietary AD LIFE software-as-a service platform -- a proprietary, mobile engagement platform for businesses to communicate with customers through cellphones, tablets and other mobile devices. The Company had 77 full-time employees as of the bankruptcy filing. Hipcricket sought Chapter 11 protection (Bankr. D. Del. Case No. 15-10104) on Jan. 20, 2015, with a deal to sell its assets. The Debtor has tapped Pachulski Stang Ziehl & Jones LLP as counsel, Canaccord Genuity Inc. as investment banker, Perkins Coie LLP as special corporate counsel, and Omni Management Group, LLC, as claims and noticing agent. As of Jan. 20, 2015, the Company had total assets of $16.8 million and liabilities of $12.06 million. HIPCRICKET INC: Proposes Pachulski as Counsel --------------------------------------------- Hipcricket, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as counsel, nunc pro tunc to the Petition Date. Subject to Court approval in accordance with Section 330(a) of the Bankruptcy Code, compensation will be payable to PSZ&J on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by PSZ&J. The principal attorneys and paralegals presently designated to represent the Debtor and their hourly rates are: a. Ira D. Kharasch $950 b. Linda F. Cantor $850 c. James O'Neill $725 d. Felice Harrison (paralegal) $295 PSZ&J has received payments from the Debtor during the year prior to the Petition Date in the amount of $255,000 in connection with its prepetition representation of the Debtor. To the beset of the Debtor's knowledge, PSZ&J does not hold or represent any interest adverse to the Debtor's estate, PSZ&J is a "disinterested person" as that phrase is defined in 11 U.S.C. Sec. 101(14), and PSZ&J's employment is necessary and in the best interests of the Debtor and its estate. About Hipcricket Headquartered in Bellevue, Washington, Hipcricket, Inc., formerly known as Augme Technologies, is a publicly held Delaware corporation. Hipcricket is in the business of providing end-to-end, data-driven mobile advertising and marketing solutions through its proprietary AD LIFE software-as-a service platform -- a proprietary, mobile engagement platform for businesses to communicate with customers through cellphones, tablets and other mobile devices. The Company had 77 full-time employees as of the bankruptcy filing. Hipcricket sought Chapter 11 protection (Bankr. D. Del. Case No. 15-10104) on Jan. 20, 2015, with a deal to sell its assets. The Debtor has tapped Pachulski Stang Ziehl & Jones LLP as counsel, Canaccord Genuity Inc. as investment banker, Perkins Coie LLP as special corporate counsel, and Omni Management Group, LLC, as claims and noticing agent. As of Jan. 20, 2015, the Company had total assets of $16.8 million and liabilities of $12.06 million. HUGH BLACK-ST. MARY: Blomfield & Weaver to Face Value Place Suit ---------------------------------------------------------------- Kansas District Judge Daniel D. Crabtree will not dismiss the lawsuit, VALUE PLACE FRANCHISE SERVICES, LLC, Plaintiff, v. HUGH BLACK-ST. MARY ENTERPRISES, INC., ET AL., Defendants, Case No. 14-1152-DDC-KGS (D. Kan.), as against defendants John Blomfeld and Shelby Weaver, after the plaintiff managed to reply to the Court's December 17, 2014 Order to Show Cause, and show "good cause" why the Court should not dismiss the Complaint. On Dec. 17, 2014, Judge K. Gary Sebelius entered an order directing plaintiff to show cause why the Court should not dismiss its Complaint against Blomfeld1 for failing to serve him and its Complaint against Weaver for failing to prosecute its action against her. A copy of Judge Crabtree's Jan. 16 Memorandum and Order is available at http://is.gd/j3D6T6from Leagle.com. Value Place Franchise Services LLC, is represented by: Todd N. Tedesco, Esq. Gary L. Ayers, Esq. FOULSTON SIEFKIN LLP 1551 N. Waterfront Parkway, Suite 100 Wichita, KS 67206-4466 Tel: 316-291-9776 Fax: 866-347-5138 E-mail: ttedesco@foulston.com gayers@foulston.com Defendants Blomfield and Weaver appeared Pro Se. About Couture Hotel Couture Hotel Corporation, fka Hugh Black-St Mary Enterprises, Inc., owns and operates four hotels: a Wyndham Garden Inn in Dallas, Texas, consisting of 356 rooms and remodeled in 2013; a Howard Johnson in Corpus Christi, Texas, consisting of 140 rooms and remodeled in 2012; a Howard Johnson in Las Vegas, Nevada, consisting of 110 rooms and remodeled in 2012; and an independent hotel in Las Vegas, Nevada (formerly branded as a Value Place), consisting of 121 rooms and also remodeled in 2012. The Las Vegas hotels are located at one of the entrances to Nellis Air Force base in North Las Vegas. The Debtor owns the real property and improvements, as well as the franchise rights to the hotels (except for Las Vegas Value Place). The Company sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 14-34874) in Dallas, Texas, on Oct. 7, 2014. The case is assigned to Judge Barbara J. Houser. The Debtor has tapped Mark Sean Toronjo, Esq., at Toronjo & Prosser Law, as counsel. The Debtor, in an amended schedules, disclosed $20.8 million in assets and $27.8 million in liabilities as of the Chapter 11 filing. No creditors' committee or other official committee been appointed in the case. IASIS HEALTHCARE: S-1 Filing No Impact on Moody's 'B2' CFR ---------------------------------------------------------- Moody's Investors Service commented that the filing of a registration statement for a proposed initial public offering on Form S-1 by IASIS Healthcare Corporation, the parent company of IASIS Healthcare LLC, is credit positive. However, the news has no impact on the ratings of IASIS Healthcare LLC, including its B2 Corporate Family Rating and B2-PD Probability of Default Rating. The stable rating outlook is also unchanged. While Moody's expects that a portion of the proceeds will be used to repay debt and reduce leverage, the extent of the positive impact will depend on the amount of equity raised and debt repaid. The number of shares to be offered and the price range for the proposed offering have not yet been determined. IASIS Healthcare LLC, a wholly owned subsidiary of IASIS Healthcare Corporation (collectively IASIS) is an owner operator of acute care hospitals in high growth urban and suburban markets. Headquartered in Franklin, Tennessee, IASIS operates 15 acute care hospitals and one behavioral health hospital across six states. IASIS also owns and operates Health Choice, a managed care operation that includes health plans, third party management and administrative services (MSO) and accountable care network development and management. IASIS generated approximately $2.5 billion in revenue in the fiscal year ended September 30, 2014. IHEARTCOMMUNICATIONS INC: Fitch Affirms 'CCC' IDR ------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) of iHeartCommunications, Inc. (iHeart) at 'CCC' and the IDR of Clear Channel Worldwide Holdings, Inc. (CCWW) at 'B'. CCWW is an indirect, wholly-owned subsidiary of Clear Channel Outdoor Holdings, Inc. (CCOH) and iHeart's 89% owned outdoor advertising subsidiary. iHeart's Rating Outlook remains Negative, while CCWW's remains Stable. Approximately $20.7 billion of debt outstanding as of Sept. 30, 2014, including $4.9 billion issued by CCWW is affected by Fitch's action. KEY RATING DRIVERS 123456789012345678901234567890123456789012345678901234567890123456 -- The ratings reflect iHeart's highly leveraged capital structure. Fitch estimates current total and secured leverage of 11.7x and 7.2x, respectively as of the LTM period ended Sept. 30, 2014. Total leverage exceeds levels at the leveraged buyout, as a weak operating profile has limited EBITDA growth and free cash flow (FCF) generation. EBITDA has not returned to pre-downturn levels. -- The ratings and Negative Outlook reflect the limited tolerance for further erosion of iHeart's operating profile and precarious liquidity position. -- Fitch recognizes that the company completed a series of capital market transactions which have extended a material amount of its secured maturities to 2019 and beyond providing much needed financial flexibility. -- Fitch expects iHeart's FCF to be negative over the next two years reflecting the interest burden associated with the company's capital structure and operating profile. -- 2016 Maturities totalling approximately $1.2 billion elevate the refinancing risk attributable to iHeart's credit profile. Overall Fitch's ratings reflect the company's highly leveraged capital structure, tenuous liquidity position with significant scheduled maturities in 2016 and Fitch's expectation that the company's considerable and growing interest burden will hinder near-term FCF generation. Additionally the company's operating profile is subject to ongoing technological threats and secular pressures in radio broadcasting and exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. iHeart is strongly positioned within a secularly challenged radio sector. Fitch believe that iHeart's scale, dominant market presence, especially in desirable DMAs, and established content and strong on-air personality roster shields iHeart in the short-term from recent declines experienced by other radio broadcasters. iHeart is shifting towards a media centric and multi-distribution platform strategy to address the on-going fragmentation in the radio space. However, its limited financial flexibility may deter or delay these efforts and jeopardize operations in the digital era. Fitch does not expect a material amount of improvement of iHeart's credit profile or absolute debt reduction over the next several years, given the expected negative FCF. Fitch estimates current total and secured leverage of 11.7x and 7.2x, respectively as of the LTM period ended Sept. 30, 2014. The company's FCF deficit amounted to approximately $261.2 million during the LTM period ended Sept. 30, 2014. Fitch anticipates that the company will report similar FCF deficits during the current rating horizon further pressuring the company's liquidity position. Scheduled maturities during 2016 total approximately $1.2 billion and pose significant refinancing risk within iHeart's credit profile. Fitch expects iHeart will continue to explore asset sales (including monetization of repurchased and outstanding notes) and debt-funded dividends from Clear Channel Worldwide Holdings, Inc. (CCWH) to support iHeart's liquidity. Fitch estimates that CCWH could issue approximately $400 million-$450 million in order to fund a dividend to its equity holders. Fitch's estimates are based on CCWH's consolidated leverage ratio of 6.4x as of Sept. 30, 2014 and maximizing CCWH's 7.0x incurrence limitation. Net proceeds to iHeart would be approximately $356 million-$401 million. iHeart's previous announcement that its subsidiaries entered into an agreement to sell 411 of broadcast communication tower sites and related assets for up to $400 million to Vertical Bridge is in line with Fitch's expectation that the company will consider asset sales to support its liquidity position. Fitch recognizes that the towers are non-core assets within iHeart's business model and believes that the transaction does not affect iHeart's operational profile materially. As of Sept. 30, 2014, iHeart had approximately $318 million of cash, excluding $204 million of cash held at CCOH. Backup liquidity consists of an undrawn $535 million ABL facility (subject to an undisclosed borrowing base) that matures in December 2017 and is subject to springing maturities. Security and Guarantees The bank debt and PGNs are secured by the capital stock of iHeart, iHeart's non-broadcasting assets (non-principal property), and a second priority lien on the broadcasting receivables that securitize the ABL facility. The bank debt and secured notes are guaranteed on a senior basis by iHeartMedia Capital I, Inc. (holding company of iHeart), and by iHeart's wholly owned domestic subsidiaries. The senior guarantee notes due 2021 benefit from a guarantee from the same entities, although it is contractually subordinated to the secured debt guarantees. There is no guarantee from Clear Channel Outdoor Holdings, Inc (CCOH) or its subsidiaries. The legacy notes and the new 10% notes receive no guarantees. Recovery Ratings iHeart's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch employs a 6x distressed enterprise value multiple reflecting the value of the company's radio broadcasting licenses in top U.S. markets. Fitch assumes going concern EBITDA at $860 million and that iHeart has maximized the debt-funded dividends from CCOH and used the proceeds to repay bank debt. Additionally, Fitch assumes that iHeart would receive 89% of the value of a sale of CCOH after the CCOH creditors had been repaid. Fitch estimates the adjusted distressed enterprise valuation in restructuring to be approximately $7 billion. The 'CCC/RR4' rating for the bank debt and secured notes reflect Fitch's estimate for a recovery range of 31%-50%. Fitch expects no recovery for the senior unsecured legacy notes, the new 10% senior notes, and senior guarantee notes due to their position below the secured debt in the capital structure, and they are assigned 'RR6'. However, Fitch rates the senior guaranteed notes 'CC' given the subordinated guarantee. CCOH's Recovery Ratings also reflect Fitch's expectation that enterprise value would be maximized as a going concern. Fitch stresses outdoor EBITDA by 15%, and applies a 7x valuation multiple. Fitch estimates the enterprise value would be $4 billion. This indicates 100% recovery for the unsecured senior notes. However, Fitch notches the debt up only two notches from the IDR given the unsecured nature of the debt. In Fitch's analysis, the subordinated notes recover in the 31% to 50% 'RR4' range, leading to no notching from the IDR. RATING SENSITIVITIES Negative: An inability to extend maturities would result in a downgrade. This inability may derive from a prolonged consolidated cash burn, whether driven by cyclical or secular pressures, reducing iHeart's ability to fund debt service and near-term maturities. Additionally, cyclical or secular pressures on operating results that further weaken credit metrics could result in negative rating pressure. Lastly, indications that a DDE is probable in the near term would also drive a downgrade. Positive: The current Rating Outlook is Negative. As a result, Fitch's sensitivities do not currently anticipate a rating upgrade. As of Sept. 30, 2014, iHeart had approximately $20.7 billion in consolidated debt. Debt held at iHeart was $15.8 billion and consisted of: -- $7.2 billion secured term loans ($931 million in 2016 and $6.3 billion in 2019); -- $5.3 billion secured PGNs, maturing 2019-2022; -- $1.7 billion in senior unsecured 12% cash pay / 2% PIK notes maturing in February 2021; -- $850 million senior unsecured 10% notes due 2018; -- $725 million senior unsecured legacy notes, with maturities of 2016-2027. Debt held at Clear Channel Worldwide Holdings, Inc. (CCWH) was $4.9 billion and consisted of: -- $2.7 billion in senior unsecured 6.5% notes due in 2022; -- $2.2 billion in subordinated 7.625% notes due 2020. Fitch has affirmed the following ratings: iHeartCommunications, Inc. -- Long-term IDR at 'CCC'; -- Senior secured term loans at 'CCC/RR4'; -- Senior secured priority guarantee notes at 'CCC/RR4'; -- Senior unsecured guarantee notes due 2021 at 'CC/RR6'; -- Senior unsecured legacy notes at 'C/RR6'. The Rating Outlook for iHeart is Negative. Clear Channel Worldwide Holdings, Inc. -- Long-term IDR at 'B'; -- Senior unsecured notes at 'BB-/RR2'; -- Senior subordinated notes at 'B/RR4'. The Rating Outlook for Clear Channel Worldwide Holdings, Inc. is Stable. INTERGEN N.V.: S&P Affirms 'B+' CCR & Sr. Debt Rating ----------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on InterGen N.V. The outlook is stable. At the same time, S&P affirmed the 'B+' rating on InterGen's senior secured debt. The recovery rating is '3', indicating S&P's expectation that lenders could expect meaningful (50% to 70%) recovery if a payment default occurs. S&P's recovery expectations are in the lower half of the 50% to 70% range. S&P also revised its assessment of the company's management and governance to 'fair' from 'weak'. "The stable outlook reflects our expectation that contracted cash flows will be sufficient over the next few years to meet debt service obligations," said Standard & Poor's credit analyst Stephen Coscia. "We expect contracted and total DSCRs through 2016 to be at least 1.4x and 1.6x, respectively. We expect POCF-to-interest and POCF-to-debt to range from about 1.6x to 1.7x, and 12% to 14%, respectively, over the next few years." S&P would consider lowering the rating if there are operational problems at the underlying assets or if financial performance falls below S&P's expectations, such that projected POCF-to-interest falls below 1.5x. Strained merchant energy margins over the next few years could limit the potential for a higher rating, but S&P would likely consider an upgrade if it sees the U.K. markets rebounding and S&P expects POCF-to-interest to reach at least 2.3x. IPC CORP: S&P Retains 'B' CCR Over $40MM Loan Upsize ---------------------------------------------------- Standard & Poor's Ratings Services said that its corporate credit rating on IPC Corp. (B/Stable) remains unchanged following the $40 million upsizing of the company's proposed first-lien senior secured term loan to $595 million from $555 million and the concurrent offsetting $40 million reduction of the proposed second-lien senior secured term loan to $305 million from $345 million. The issue-level rating on the first-lien term loan remains 'B' with a recovery rating of '3' indicating S&P's expectation for meaningful recovery (50% to 70%; low end of the range) in the event of payment default. Similarly, the issue-level rating on the second-lien term loan remains 'B-' with a recovery rating of '5' indicating S&P's expectation for modest recovery (10% to 30%; low end of the range) in the event of payment default. RATINGS LIST IPC Corp. Corporate Credit Rating B/Stable/-- $595 mil. first-lien term loan Senior Secured B Recovery Rating 3 $305 mil. second-lien term loan Senior Secured B- Recovery Rating 5 JAMES HARDIE: Moody's Assigns 'Ba2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 Corporate Family Rating to James Hardie International Finance Limited and Ba2-PD Probability of Default Rating. Concurrently, Moody's assigned a Ba2 rating to the proposed $325 million Senior Unsecured Notes due 2023 and Speculative-Grade Liquidity (SGL) Rating of SGL-2. The rating outlook is stable. The proceeds from the proposed $325 million Senior Unsecured Notes are anticipated to go toward repaying outstanding borrowings under the company's $590 million bilateral credit facilities with current outstandings of about $380 million. The following rating actions were taken: Corporate Family Rating, assigned Ba2; Probability of Default Rating, assigned Ba2-PD; Proposed $325 million Senior Unsecured Notes due 2023, assigned Ba2 (LGD4); Speculative-Grade Liquidity Rating, assigned at SGL-2; Outlook is stable. Ratings Rationale The Ba2 Corporate Family Rating benefits from the continued improvement in the company's already strong credit metrics over the next 12-18 months. James Hardie's conservative balance sheet management and deep-rooted industry expertise combined with solid operating strategy eases Moody's concerns over the increase in debt leverage due to the current debt issuance. The company's financial policy sets a maximum of 2x net leverage ratio, Moody's believes that there will be times when James Hardie will be higher than 2x net leverage ratio but not for a significant period of time and ultimately will adhere to its goal of 2x net leverage ratio. In addition, the reputation and conservative operating strategy that both have allowed James Hardie to grow into one of the largest fiber cement producers in the world, makes Moody's comfortable in the company's ability to manage its asbestos related liabilities on an ongoing basis However, the company's shareholder friendly activities place a significant weight on the rating. For FY 2015 ending 3/31/2015, James Hardie is anticipated to pay around $400 million in dividends and special dividends to shareholders that are primarily related to FY 2014 returns. This amount compares to the company's expected cash flow from operations of $240 million resulting in the need for additional capital. In September of 2014 (part of fiscal 2015), James Hardie already drew $380 million from its $590 million bank credit facilities (facilities' size subsequent to September 30, 2014) to fund capital expenditures, dividend payments, and the AIFC contribution payment. Moreover, company's strong credit metrics, including debt to EBITDA of below 1.5x with an assumed $325 million of additional unsecured debt are overshadowed by the net asbestos liability that on an undiscounted basis amounts to $1.29 billion as of 9/30/2014. Moody's consider the asbestos liability to be mitigated by the terms of Amended & Restated Final Funding Agreement ("AFFA"). However, a certain percentage of its operating cash flows must be put toward the asbestos fund thereby limiting the cash flow available for the company's core business. Further, the asbestos liability combined with dividend distributions and share repurchases has lead to negative tangible net worth and negative free cash flow generation. These metrics place a significant burden on the rating. The stable outlook reflects Moody's view that the company's financial performance continues to improve. The ratings could be upgraded if the company consistently demonstrates positive free cash flow and tangible net worth as well as show growth in revenue base. Additionally, elimination of the asbestos liability could also result in a ratings upgrade. The ratings could be downgraded if the company continues its aggressive dividend policy and finances it with debt. Further, any change in asbestos funding obligation, could result in a downgrade. Also, EBIT/interest expense of less than 4.5x on a sustained basis would be considered a trigger for downgrade. The principal methodology used in this rating was Global Manufacturing Companies published in July 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. James Hardie International Finance Limited is a wholly-owned subsidiary of James Hardie Industries plc, domiciled in Ireland, is a global manufacturer of fiber-cement products and systems for internal and external building construction applications primarily sold in the United States, Australia, New Zealand and the Philippines. The company's revenues for the last twelve months ended September 30, 2014 was $1.234 billion. JAMES HARDIE: S&P Assigns 'BB-' CCR; Outlook Stable --------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' corporate credit rating to James Hardie International Group Ltd. The outlook is stable. At the same time, S&P assigned its 'BB-' issue-level rating (same as the corporate credit rating) and '3' recovery rating to borrower James Hardie International Finance Ltd.'s $325 million senior unsecured notes. James Hardie International Finance Ltd. is a wholly owned subsidiary of James Hardie Industries plc. The '3' recovery rating on the notes indicate S&P's expectation for meaningful (50% to 70%) recovery in the event of payment default. "The stable rating outlook reflects our expectation that the company will maintain total leverage (including asbestos liabilities, which we view as akin to debt) at a level commensurate with an "aggressive" financial risk profile despite our expectation that the company will need higher debt levels to fund growth," said Standard & Poor's credit analyst Maurice Austin. S&P views a downgrade as highly unlikely within the next 12 months, given its favorable outlook for home construction and remodeling spending. However, S&P could take such an action if the company encounters difficulties in executing its capital management plan or financial policy decisions cause a higher-than-expected increase in debt such that leverage increases above 5x and FFO to debt declines to below 12%, in line with a "highly leveraged" financial risk assessment. An upgrade is unlikely within the next 12 months because S&P expects the company will need to finance its expansion plans during the next three years, resulting in debt leverage remaining below 5x, in line with S&P's assessment of financial risk as "aggressive." KALSON MARKETING: In Bankruptcy; Creditors' Meeting on Feb. 11 -------------------------------------------------------------- Kalson Marketing Ltd., located at 5101 Orbitor Drive in City of Mississauga, Municipality of Peel, Ontario, filed for bankruptcy and the first meeting of creditors will be held on Feb. 11, 2015, at 11:00 a.m. at the office of: Robert Charles trustee in bankruptcy 606 365 Evans Avenue Toronto, ON M8Z 1K2 Tel: (416) 486-9660 Fax: (416) 486-8024 Email: info@robertcharlesbankruptcy.com KIRK-HUGHES: Creditor Loses Appeal Over Claim Priority ------------------------------------------------------ The Supreme Court of Idaho, Boise, affirmed in all respects a lower court ruling in the case over a dispute between two creditors as to whose claim against their debtor's property has priority. The respondents, Alan and Marilyn Golub, recorded a judgment in the amount of $941,000 against their judgment debtor, Kirk-Hughes Development, LLC, giving the Golubs a judgment lien on property owned by KHD in Kootenai County. KHD now claims to have executed a deed of trust on the property in question several years before the Golubs acquired their lien. The beneficiary of the deed of trust is another defendant, Kirk-Scott, Ltd. The district court granted summary judgment to the Golubs, finding that Golubs' duly recorded judgment lien had priority over KS' prior, unrecorded deed of trust. KS timely appealed. KHD filed for Chapter 11 bankruptcy on April 6, 2009. The case is, ALAN GOLUB and MARILYN GOLUB, husband and wife, Plaintiffs-Respondents, v. KIRK-SCOTT, LTD., a Texas corporation, Defendant-Appellant, and KIRK-HUGHES DEVELOPMENT, LLC, a Delaware limited liability company; INTERNAL REVENUE SERVICE; TOMLINSON NORTH IDAHO, INC., an Idaho corporation; GERALDINE KIRK-HUGHES and PETER SAMPSON, husband and wife; KIRK-HUGHES & ASSOCIATES, INC., a Nevada corporation; KELLY POLATIS, an individual; DELANO D. and LENORE J. PETERSON, husband and wife, Defendants, Docket No. 41505, 2015 Opinion No. 12. A copy of the Supreme Court's January 30, 2015 decision is available at http://is.gd/VGDH4nfrom Leagle.com. Matthew Z. Crotty, Esq. -- matt@crottyandson.com -- at Crotty & Son, PLLC, in Spokane, Washington, argues for Kirk-Scott, Ltd. The respondents are represented by: Michael T. Howard, Esq. WINSTON & CASHATT 250 Northwest Boulevard, Suite 206 Coeur d'Alene, ID 83814 Tel: (208) 667-2103 Fax: (208) 765-2121 LEHMAN BROTHERS: Raises Estimate of Cash for Creditors to $90.6-Bil ------------------------------------------------------------------- Stephanie Gleason, writing for Daily Bankruptcy Review, reported that the team unwinding Lehman Brothers Holdings Inc. boosted its estimate of how much cash it expects to bring in for creditors to $90.6 billion, buoyed primarily by a settlement with Lehman Brothers Bankhaus A.G., the German arm of Lehman's investment-banking operation. According to the report, the new projection represents a $1.8 billion increase over an estimate late last summer of $88.8 billion, according to the company's most recent cash flow estimates, filed with the U.S. Bankruptcy Court in Manhattan. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. As of Oct. 2, 2014, Lehman's total distributions to unsecured creditors have amounted to $92.0 billion. As of Sept. 30, 2014, the brokerage trustee has substantially completed customer claims distributions, distributing more than $106 billion to 111,000 customers. LEHMAN BROTHERS: Trustee Gets Approval of Pimco Settlement ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that James W. Giddens, the trustee for Lehman Brothers Inc., the liquidating broker, got court permission for a settlement with Pacific Investment Management Co. LLC. As previously reported by The Troubled Company Reporter, citing The Wall Street Journal, the agreement would settle more than $187 million in claims against the brokerage at a fraction of their asserted value. The deal addresses 81 claims and would leave Pimco, a unit of German insurer Allianz SE, with an outstanding $147 million general unsecured claim against the brokerage. Some Pimco clients also would receive a total of $25.6 million in returned collateral. The settlement has the customers dropping their claims and receiving approved unsecured claims for $146.6 million, resulting in the release of $30.6 million in collateral held by a third party, the Bloomberg report related. Pimco's customers and the Lehman parent will share collateral released by the third party, Bloomberg further related. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. As of Oct. 2, 2014, Lehman's total distributions to unsecured creditors have amounted to $92.0 billion. As of Sept. 30, 2014, the brokerage trustee has substantially completed customer claims distributions, distributing more than $106 billion to 111,000 customers. LIBERTY TOWERS: US Trustee to Continue Creditors' Meeting Feb. 13 ----------------------------------------------------------------- The U.S. Trustee for Region 2 will continue the meeting of unsecured creditors of Liberty Towers Realty LLC on Feb. 13, at 10:30 a.m., according to a filing with the U.S. Bankruptcy Court for the Eastern District of New York. About Liberty Towers Liberty Towers Realty LLC sought bankruptcy protection in Brooklyn, New York (Bankr. E.D.N.Y. Case No. 14-45187) on Oct. 15, 2014, just three years after the dismissal of its previous Chapter 11 case. The petition was signed by Toby Luria as member. The Debtor estimated assets and debts of $10 million to $50 million. The Carlebach Law Group serves as the Debtor's counsel. Liberty Towers' case was initially assigned to Judge Carla E. Craig but has been reassigned to Judge Elizabeth S. Stong due to Liberty's previous bankruptcy case (Case 11-42589). The previous case was dismissed July 27, 2011. Related entity Liberty Towers Realty I, LLC, also sought bankruptcy protection (Case No. 14-45189) on Oct. 15, 2014. LIFE UNIFORM: Seeks Dismissal of Ch. 11 Case -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Life Uniform, at one time a retailer of hospital uniforms and accessories with 205 stores, has asked the bankruptcy court in Delaware to dismiss its Chapter 11 case because it won't be able to propose a Chapter 11 plan. According to the report, if the judge agrees at a March 27 hearing, some $1.2 million of expenses of the Chapter 11 case other than professionals will be paid in full. Professionals will share about $750,000 on account of fees totaling some $1.1 million, while nothing will be left for unsecured creditors, the report said. About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. Life Uniform Holding disclosed $10,695,870 in assets and $36,821,034 in liabilities as of the Chapter 11 filing. Life Uniform and Uniform City received court authority on July 26 to sell the business for $22.6 million to Scrubs & Beyond LLC. There were no competing bids, so an auction wasn't held. First lien lender CapitalSource Finance LLC is owed on a $11.5 million revolver and $26 million term loan. CapitalSource is represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' administrative agent, and claims and noticing agent. he Debtors' financial advisor is Capstone Advisory Group, LLC. rowe Horwath LLP serves as tax accountants and Brown Smith Wallace LLC as wind-down tax accountants. Richard Stern, Esq., at Luskin Stern & Eisler LLP, was appointed independent fee examiner in the case. Luskin, Stern & Eisler LLP serves as his counsel and The Rosner Law Group LLC, serves as his Delaware counsel. The Official Committee of Unsecured Creditors is represented by Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq., at Cousins Chipman & Brown, LLP as counsel. The U.S Trustee for Region 3 appointed Boris Segalis of InfoLawGroup LLP as consumer privacy ombudsman in the case. LLS AMERICA: Trustee Wins C$228,900 Judgment Against Bjarnasons --------------------------------------------------------------- Chief District Judge Rosanna Malouf Peterson of the Eastern District of Washington ruled that Bruce P. Kriegman, solely in his capacity as court-appointed Chapter 11 Trustee for debtor LLS America, LLC, is awarded Judgment against defendants Rory and Cathy Bjarnason, jointly and severally, as follows: a. Judgment C$228,900; b. Plus prejudgment interest of C$5,903.80 from July 21, 2009 to January 14, 2015, and continuing thereafter until entry of the judgment, at the federal rate of 0.47% per annum; and c. Plus taxable costs in the amount to be determined by the Court d. Plus post-judgment interest from the date of Judgment until fully paid at the federal rate of 0.23% per annum (28 U.S.C. Sec. 1961). All proofs of claim filed by Defendants in the bankruptcy proceedings or any claims that may arise are disallowed pursuant to 11 U.S.C. Sec. 502(d) unless and until the avoided transfers are returned to the Trustee-Plaintiff. A copy of the Court's Jan. 15 Judgment is available at http://is.gd/CrrHvZfrom Leagle.com. About Little Loan Shoppe LLS America LLC, doing business as Little Loan Shoppe, operated an online payday loan business. Affiliate Team Spirit America provided the manpower, management and equipment for Little Loan Shoppe. The companies are among a multitude of Canadian and American business entities owned and operated by Doris E. Nelson, a/k/a Dee Nelson, a/k/a Dee Foster. Investors claimed Ms. Nelson operated a Ponzi scheme. Ms. Nelson allegedly told investors they could earn as much as 60% on money her companies used to make payday loans to consumers. American and Canadian investors bought notes worth US$29 million and another C$26,000,000. However, the investors received no payments after March 2009. One investor group placed a related company, LLS-A LLC, into bankruptcy in July 10, 2009. LLS America LLC filed for bankruptcy (Bankr. D. Nev. Case No. 09-23021) on July 21, 2009, before Judge Linda B. Riegle. Gregory E. Garman, Esq., at Gordon Silver, served as the Debtor's counsel. In its petition, the Debtor disclosed $2,661,584 in assets and $24,013,837 in debts. The petition was signed by Ralph Gamble, CEO of the Company. The case was subsequently moved to Washington state (Bankr. E.D. Wash. Case No. 09-06194). Charles Hall was appointed as examiner in the case. LLS AMERICA: Trustee Wins C$388,219 Judgment Against Toews ---------------------------------------------------------- Chief District Judge Rosanna Malouf Peterson of the U.S. District Court for the Eastern District of Washington ruled that Bruce P. Kriegman, solely in his capacity as court-appointed Chapter 11 Trustee for debtor LLS America, LLC, is awarded Judgment against defendants Rory and Cathy Bjarnason, jointly and severally, as follows: Ruled that Bruce P. Kriegman, solely in his capacity as court-appointed Chapter 11 Trustee for debtor LLS America, LLC, is awarded Judgment against defendant Geoff Toews, as follows: a. Judgment of C$388,219.39; b. Plus prejudgment interest of C$10,012.98 from July 21, 2009 to January 14, 2015, and continuing thereafter until entry of this judgment at the federal rate of 0.47% per annum; c. Plus taxable costs in the amount to be determined by the Court; and d. Plus post-judgment interest from the date of Judgment until fully paid at the federal rate of 0.23% per annum (28 U.S.C. Sec. 1961). All proofs of claim filed by Defendant in the Debtor's Bankruptcy proceedings or any claims that may arise are disallowed pursuant to 11 U.S.C. Sec. 502(d) unless and until the avoided transfers are returned to the Trustee-Plaintiff. A copy of the Court's Jan. 15 Judgment is available at http://is.gd/XjtVN0from Leagle.com. About Little Loan Shoppe LLS America LLC, doing business as Little Loan Shoppe, operated an online payday loan business. Affiliate Team Spirit America provided the manpower, management and equipment for Little Loan Shoppe. The companies are among a multitude of Canadian and American business entities owned and operated by Doris E. Nelson, a/k/a Dee Nelson, a/k/a Dee Foster. Investors claimed Ms. Nelson operated a Ponzi scheme. Ms. Nelson allegedly told investors they could earn as much as 60% on money her companies used to make payday loans to consumers. American and Canadian investors bought notes worth US$29 million and another C$26,000,000. However, the investors received no payments after March 2009. One investor group placed a related company, LLS-A LLC, into bankruptcy in July 10, 2009. LLS America LLC filed for bankruptcy (Bankr. D. Nev. Case No. 09-23021) on July 21, 2009, before Judge Linda B. Riegle. Gregory E. Garman, Esq., at Gordon Silver, served as the Debtor's counsel. In its petition, the Debtor disclosed $2,661,584 in assets and $24,013,837 in debts. The petition was signed by Ralph Gamble, CEO of the Company. The case was subsequently moved to Washington state (Bankr. E.D. Wash. Case No. 09-06194). Charles Hall was appointed as examiner in the case. MACKEYSER HOLDINGS: Court Confirms Ch. 11 Liquidating Plan ---------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware on Feb. 2, 2015, signed a findings of fact, conclusions of law, and order confirming the first amended joint plan of liquidation proposed by Mackeyser Holdings, LLC, et al., and the Official Committee of Unsecured Creditors. As previously reported by the TCR, distributions under the Plan, which is co-proposed by the Official Committee of Unsecured Creditors, is premised under a "Liquidating Trust Waterfall," which will be as follows: (i) first, Allowed Administrative Claims, to the extent that these claims have not been satisfied from the Administrative Claims Reserve; (ii) second, to the repayment of the Initial Liquidating Trust Funding Amount to Health Evolution Partners Fund I (AIVI), f/k/a Health Evolution Partners Growth (AIV I), LP, which will satisfy in part the Allowed DIP Facility Claim; (iii) third, until the Liquidating Trust Budget Amount is paid in full, 50% to pay the Allowed DIP Facility Claim and 50% to pay the Liquidating Trust Budget Amount; (iv) fourth, until the Allowed DIP Facility Claim is paid in full, 80% to pay the Allowed DIP Facility Claim and 20% to pay Allowed Priority Claims; (v) fifth, until HEP has received $500,000 on account of the Allowed HEP Prepetition Secured Claim, 65% to pay the Allowed HEP Prepetition Secured Claim and 35% to pay Allowed Priority Claims; (vi) sixth, until HEP has received $1,000,000 on account of the Allowed HEP Prepetition Secured Claim, 50% to pay the Allowed HEP Prepetition Secured Claim and 50% to pay Allowed Priority Claims; (vii) seventh, until the Allowed HEP Prepetition Secured Claim is paid in full, 35% to pay the Allowed HEP Prepetition Secured Claim and 65% to pay Allowed Priority Claims; and (viii) eighth, after the Allowed HEP Prepetition Secured Claim is paid in full, 100% to pay Allowed Priority Claims. The plan was made possible by a court-approved settlement with Health Evolution Partners Inc. under which the majority owner and lender agreed to subordinate a portion of its bankruptcy financing claim and compromise its pre-bankruptcy secured claim through a 35% reduction and partial subordination, according to the disclosure statement. Recoveries under the proposed plan for general unsecured creditors and HEP on its pre-bankruptcy secured claim are "unknown," Bloomberg News reported. On or prior to the effective date, the Debtors will transfer to the Meyers Family Agreement of Trust payment in the full amount of $145,000 and, upon receipt of the payment: (i) Claim Nos. 1371, 1373 and 1374 will be deemed to be disallowed; (ii) on account of its Claim No. 1375, Meyers will be deemed to have an Allowed Class 1 - Miscellaneous Secured Claim in the amount of $145,000, which claim will be deemed satisfied in full by the payment of the settlement payment; (iii) on account of its Claim No 1372, Meyers will be deemed to have an Allowed Class 4 - General Unsecured Claim in the amount of $215,000; (iv) all motions filed in Adv. P. No. 14-50699 are deemed withdrawn with prejudice; (v) the complaint will be dismissed with prejudice and discontinued; and (vi) all other claims or causes of action between Meyers and the Debtors are deemed to be released and forever waived and discharged. The Plan Order provides that none of the directors and officers of any of the Debtors are exculpated or otherwise released under the Plan for any acts or omissions prior to the commencement of the Chapter 11 cases, and the Debtors' transfer of any causes of action to the Liquidating Trust will not impair or preclude Dr. Joseph Kurstin and Jukor Acquisition, Inc., from prosecuting any direct suit, action or other proceeding of any kind against any entities or persons not expressly exculpated or otherwise released by the Plan. About MacKeyser Holdings MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The Official Committee of Unsecured Creditors retained Cooley LLP as lead counsel; Klehr Harrison Harvey Branzburg LLP as co-counsel; and Giuliano, Miller & Company, LLC as financial advisor. MANAGED STORAGE: Dist. Judge Reinstates Clawback Suit v. Avnet -------------------------------------------------------------- District Judge Leonard P. Stark breathed life back into an avoidance lawsuit launched by Jeoffrey L. Burtch, chapter trustee of ManagedStorage International, Inc. and its related affiliates. Judge Stark reversed and remanded the order of the bankruptcy court dated November 26, 2012, that dismissed the lawsuit. Burtch sued Avnet in 2012 to avoid and recover from preferential transfers of property made for or on account of antecedent debt in the 90 days prior to the filing of the Debtors' bankruptcy petition. Avnet moved to dismiss the Preference Claims, asserting that the Trustee's claims against Avnet had been released by the its Stipulation and Release with the Debtors. Managed Storage International, Inc. and its affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Case No. 09-10368) on Feb. 4, 2009. On that same day the Debtors filed a motion for approval of bid procedures and a motion to sell all their assets free and clear of liens to Laurus Master Fund, Ltd., or to a higher and better bidder. As reported by the Troubled Company Reporter, the Bankruptcy Court on April 2, 2009, approved the sale to Laurus. At that time, Avnet, the Debtors and the Official Unsecured Creditors' Committee entered into a stipulation providing for the segregation of the proceeds of the Avnet collateral. The Court approved the stipulation on April 14, 2009. Notwithstanding the stipulation, the Debtors did not segregate the proceeds of the Avnet collateral. As a result, Avnet filed a Motion on Feb. 24, 2010, seeking a turnover of its collateral from Laurus. The hearing on the Avnet motion was continued several times and, ultimately, a further stipulation was executed by Avnet, the Debtors, and Laurus whereby Laurus paid Avnet $975,000 and the parties exchanged certain releases. The Stipulation provided for a release of the Debtors by Avnet and a release of Avnet and its predecessors successes, and assigns by the Debtors and their predecessors, successors and assigns from any and all claims relating to the Debtors and their chapter 11 cases. The Stipulation was submitted under certification of counsel and the Court approved it on May 19, 2010. The Bankruptcy Court converted the Debtors' cases to chapter 7 on Nov. 3, 2010, and appointed Jeoffrey L. Burtch as chapter 7 trustee. Around that time, Avnet acquired Bell as evidenced by a Certificate of Merger filed in New York on Dec. 22, 2010. The Chapter 7 Trustee sued Avnet to avoid and recover $5,444,541 as an alleged preference. The case before the District Court is, JEOFFREY L. BURTCH, Appellant, v. AVNET, INC., Appellee, C.A. NO. 13-060-LPS (D. Del.). A copy of Judge Stark's January 16, 2015 Memorandum Order is available at http://is.gd/mifbNDfrom Leagle.com. Trustee Jeoffrey L. Burtch is represented by: Susan E. Kaufman, Esq. Robert Grant Dick, IV, Esq. COOCH & TAYLOR The Brandywine Building 1000 West St., 10th Floor Wilmington, DE 19801 Tel: 302-984-3800 E-mail: skaufman@coochtaylor.com gdick@coochtaylor.com Avnet Inc., is represented by: Dennis Anthony Meloro, Esq. GREENBERG TRAURIG, LLP The Nemours Building 1007 North Orange Street, Suite 1200 Wilmington, DE 19801 Tel: 302-661-7395 E-mail: melorod@gtlaw.com - and - Annapoorni Sankaran, Esq. GREENBERG TRAURIG, LLP 1000 Louisiana Street, Suite 1700 Houston, TX 77002 Tel: 713-374-3658 Fax: 713-754-6608 E-mail: sankarana@gtlaw.com MANITOWOC CO: S&P Revises Outlook to Negative & Affirms 'BB-' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Wisconsin-based crane and food service equipment manufacturer Manitowoc Co. Inc. to negative from stable. At the same time, S&P affirmed its 'BB-' corporate credit rating and issue ratings on the company. "The outlook revision on Manitowoc Corp. follows its announcement that it intends to spin off its food service equipment business and form two stand-alone companies, one focused on cranes and the other on food equipment," said Standard & Poor's credit analyst Jaissy Lorenzo. The company expects to complete the spin-off in the first quarter of 2016. At this time, S&P believes there is some risk that Manitowoc post spin-off will not have the business risk profile and capital structure that can support S&P's 'BB-' rating. The food service business previously helped offset some of the cyclicality inherent in the cranes segment and provided some diversification benefit to the company. Manitowoc expects credit metrics to be consistent with or better than current measures post the spin-off. However, it is unclear what the specific capital structure will be after the spin-off. The outlook is negative. S&P could lower the rating if Manitowoc's post spin-off business risk profile or capital structure does not support S&P's 'BB-' corporate credit rating given the highly cyclical nature of the crane business and uncertainty regarding the planned financing of the spin-off. S&P could revise the outlook to stable if the revised capital structure results in credit metrics that support the current rating even if S&P was to take a dimmer view of the stand-alone crane company's business risk profile. MATTESON, IL: Moody's Withdraws B1 GOULT & B3 GOLT Ratings ---------------------------------------------------------- Moody's Investors Service has withdrawn the Village of Matteson IL's B1 general obligation unlimited tax (GOULT) rating and B3 general obligation limited tax (GOLT) rating. The B1 rating applied to $22.0 million of GOULT debt, and the B3 rating applied to $25.3 million of GOLT debt. The withdrawal reflects the lack of sufficient information needed to maintain the ratings. Village officials failed to provide necessary and pertinent information on finances and debt. For example, officials failed to provide information on projected financial results for fiscal 2015, which concludes on April 30; anticipated budget plans for fiscal 2016; plans to address an increase in annual pension costs in fiscal 2017; and plans to address a significant increase in annual debt service payments on the Series 2010 GOLT Debt Certificates in 2018. Moody's have determined that Moody's are no longer able to maintain the ratings without these pieces of forward-looking information. This action concludes a review for possible withdrawal that Moody's initiated on December 15, 2014. Summary Rating Rationale Moody's has withdrawn the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. METAVATION LLC: GM Allowed $13.2MM Claim, But Can't Collect Now --------------------------------------------------------------- General Motors LLC seeks to compel immediate payment of GM's First Priority Secured Claim from the bankruptcy estate of TPOP, LLC f/k/a Metavation, LLC. GM claims entitlement to $13,295,175 currently held in escrow following the sale of TPOP. Metavation's assets have been sold and funds sufficient to pay GM are currently available, if GM's claim is allowed. The Debtor opposes the Motion on numerous grounds. Bankruptcy Judge Brendan Linehan Shannon finds that GM is contractually entitled to repayment of the amount sought, subject to further proceedings to determine whether the Debtor has any valid affirmative defenses, set-offs, or counterclaims that may serve to reduce GM's claim. The Court further determines that GM has not carried its burden to show that immediate payment of its claim is warranted. Accordingly, while GM's claim will be allowed in the amount of $13,295,175, the Court will not direct immediate payment. The Court also directs the parties to meet and confer on a scheduling order for the Court's consideration of the Debtor's affirmative defenses, set-offs, or counterclaims. Metavation was a Michigan-based manufacturer of precision machined components and assemblies, including dampers, engine components, knuckles, and driveline products for the automotive industry. Formed in 2008 through the acquisition of multiple predecessor companies, Metavation used advanced engineering and manufacturing capabilities to become a leading supplier of engine and transmission dampers. GM was one of the company's major customers. Metavation filed a Chapter 11 petition on July 22, 2013, four days after the Debtor, Revstone Industries, LLC, certain affiliates, and the Debtor's major customers entered into an Automotive Sale Transactions Support Agreement. The Sale Support Agreement provided that Metavation and a number of related businesses would be sold while GM and Chrysler Group, LLC as supporting customers would provide financing to support operations until all sales closed. If the Debtor complied with its obligations under the Sale Support Agreement, GM agreed to forgo repayment of its loans. GM contends, and the Debtor does not dispute, that $6,302,129 of GM's total claim constitutes Retained Participations that are not subject to the forgiveness provisions in the Sale Support Agreement. Only $6,933,046 of GM's claim is thus directly at issue in this action. The parties stipulated that the Court would first resolve the contractual issues underlying this dispute. Judge Shannon finds that the Debtor's default relieves GM of its loan forgiveness obligations, and said phase two of this litigation will focus on whether the Debtor has any affirmative defenses, set-offs, counterclaims that may reduce the amount of GM's claim. Judge Shannon also said a second issue raised by the parties will also be addressed during phase two. This issue relates to a $3.8 million Sale Support Payment that the Debtor argues GM is contractually obligated to pay. GM contends that because there has been an event of default under the Sale Support Agreement, it is relieved of its obligation to make this payment. The Debtor briefly touched on this issue in its papers and at oral argument. The Court views this issue as more appropriately dealt with during the next stage of litigation as the record on this issue has not been sufficiently developed. A copy of the Court's January 30, 2015 Opinion is available at http://is.gd/32Q7uVfrom Leagle.com. Counsel to TPOP: Alan J. Kornfeld, Esq. Colin R. Robinson, Esq. PACHULSKI STANG ZIEHL & JONES, LLP 919 North Market Street, 17th Floor Wilmington, DE 19801 Tel: 302-652-4100 Fax: 302-652-4400 E-mail: akornfeld@pszjlaw.com crobinson@pszjlaw.com GM is represented by: Jeffrey R. Waxman, Esq. MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801-1494 Tel: (302) 888-6800 E-mail: jwaxman@morrisjames.com - and - Lawrence J. Murphy, Esq. Scott B. Kitei, Esq. HONIGMAN MILLER SCHWARTZ AND COHN LLP 2290 First National Building 660 Woodward Avenue Detroit, MI 48226 Tel: (313) 465-7560 Fax: (313) 465-7561 E-mail: lmurphy@honigman.com About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Colin Robinson, Esq., at Pachulski Stang Ziehl & Jones LLP represent Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 (Bankr. D. Del. Case No. 13-11831) on July 22, 2013, to sell the bulk of its assets to industry rival Dayco for $25 million. Following the sale, Metavation changed its name to TPOP LLC. Metavation tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., Ericka Fredricks Johnson, Esq., Steven K. Kortanek, Esq., and Matthew P. Ward, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent the Official Committee of Unsecured Creditors in Revstone's case. Boston Finance Group, LLC, a committee member, also has hired as counsel Gregg M. Galardi, Esq., and Sarah E. Castle, Esq., at DLA Piper LLP. * * * Revstone Industries, LLC, Spara, LLC, Greenwood Forgings, LLC, and US Tool & Engineering, LLC, on Dec. 10, 2014, filed with the Bankruptcy Court a joint Chapter 11 plan and disclosure statement, which incorporate the Bankruptcy Court-approved settlement between the Debtors and each of their respective debtor and non-debtor subsidiaries, except TPOP LLC fka Metavation, the Pension Benefit Guaranty Corporation, the Official Committee of Unsecured Creditors, and Boston Finance Group, LLC, and a separate intercompany settlement among Revstone and Spara and each of their respective debtor and non-debtor subsidiaries. Under the Plan, Revstone's unsecured creditors with claims ranging from $24.5 million to $41.5 million, the projected recovery is 7.2% to 12.2%. For unsecured creditors of affiliate Spara LLC, the predicted recovery is about 4.2% to creditors with some $13 million in claims, while unsecured creditors of Greenwood Forgings LLC and US Tool & Engineering LLC don't get anything. The PBGC is projected for recovery of $77 million, although not less than $75 million, after giving credit to money earmarked for unsecured creditors. Judge Shannon on Jan. 15, 2015, approved the disclosure statement explaining the Chapter 11 Plan and scheduled the confirmation hearing to commence on March 5, 2015, at 10:00 a.m. (prevailing Eastern time). Plan votes are due Feb. 20. Objections are also due Feb. 20. Blacklined versions of the Plan and Disclosure statement are available at http://bankrupt.com/misc/REVSTONEplan0114.pdf MICHAEL J. 662: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Michael J. 662 Cattle Dr. LLC 1901 Pecan Lane Lake Jackson, TX 77566 Case No.: 15-50308 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Hon. Craig A. Gargotta Debtor's Counsel: Heidi McLeod, Esq. HEIDI MCLEOD LAW OFFICE PLLC 3201 Cherry Ridge, Suite C-300 San Antonio, TX 78230 Tel: (210) 853-0092 Email: heidimcleodlaw@gmail.com Total Assets: $3.4 million Total Liabilities: $2.1 million The petition was signed by Michael J. Badgett, manager. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb15-50308.pdf MIDAS INTERMEDIATE: New $100MM Notes No Impact on Moody's B2 CFR ---------------------------------------------------------------- Moody's Investors Service stated that the proposed $100 million add-on to Midas Intermediate Holdco II, LLC's (funding vehicle for SK Holdco, LLC -- "Service King") existing $200 million senior unsecured notes would have no impact on ratings. The B2 Corporate Family rating is unaffected, and the stable outlook continues. Midas Intermediate Holdco II, LLC (funding vehicle for SK Holdco, LLC and Service King, Inc.) Existing ratings include: Corporate family rating of B2 Probability of default rating at B2-PD $100 million senior secured revolving credit facility at Ba3(LGD2) $355 million senior secured term loan B at Ba3(LGD2) $40 million senior secured delayed drawdown term loan B at Ba3(LGD2) $300 million senior unsecured notes at Caa1(LGD5) Ratings Rationale "The new $100 million being raised will pay off $50 million in revolving credit facility borrowings that have financed the most recent spate of acquisitions, with the remainder net of fees to fund future acquisitions," stated Moody's Vice President Charlie O'Shea. "Built into Moody's B2 rating and stable outlook is the understanding that Service King will grow rapidly via acquisition as the vehicle repair and collision segment continues to consolidate." The B2 corporate family rating reflects the company's weak credit metrics, led by pro forma debt/EBITDA of around 6.5 times, reasonable interest coverage of around 2 times, and its formidable market position and relationships with a large number of prominent insurance carriers throughout its network. The stable outlook reflects Moody's expectation for reductions in leverage over the next 12-18 months, with an acquisition strategy that will serve to extend the company geographically and deepen its insurance carrier relationships. Ratings could be upgraded if debt/EBITDA was sustained below 5.75 times and EBITA/interest was sustained above 2 times. Ratings could be downgraded if operating performance were to deteriorate or financial policy decisions resulted in debt/EBITDA not improving such that it began to trend towards 6.5 times over the next 12-18 months. It is important to note that key to Moody's calculations will be the inclusion of acquired EBITDA (subject to reasonable adjustments) funded by debt. The Ba3 ratings assigned to the $100 million secured revolver, $355 million senior secured term loan, and $40 million senior secured term loan reflect their senior position in the capital structure, as well as the cushion provided by the now-$300 million senior unsecured notes, which are rated Caa1. The ratings also reflect the application of Moody's Loss Given Default methodology. Headquartered in Richardson, Texas, Service King is a leading provider of vehicle body repair services, with around 220 locations in 20 states in the US. Annual revenues of around $700 million are expected for FYE 2014. The principal methodology used in these ratings was the Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MINERAL PARK: Gets Approval to Sell Mine to Origin for $10-Mil. --------------------------------------------------------------- Mineral Park, Inc. and Bluefish Energy Corp. received court approval to sell their assets to Origin Mining Company, LLC. Origin has offered to pay $10 million for the assets, which include Mineral Park's mining operations and Bluefish Energy's generator that supplied power to the company's Arizona mine. The private sale approved by U.S. Bankruptcy Judge Kevin Carey also sees Origin assume environmental liabilities and frees up $3.5 million in cash collateral for Mineral Park. The bankruptcy judge overruled objections from creditors who argued that auctioning the assets separately would bring greater returns than a private deal. In his 30-page decision, Judge Carey said that Origin's offer for the assets was the "highest and best offer" received by the companies. Trafigura AG, a secured creditor of Bluefish, previously submitted a credit bid of $11.4 million for the generator, saying the consideration to be paid by Origin for the assets of both companies "is less than the value of the Bluefish assets alone." Mineral Park defended the private sale, saying Trafigura owed them more than $4.5 million, which makes its offer smaller than it seemed. The company also argued that the assets should be sold together, pointing out that the mine can't operate without the generator and that the latter can't be sold without the mine. Meanwhile, Mineral Park's official committee of unsecured called for the sale of the assets at a public auction with Origin serving as the stalking horse bidder. The group dropped its opposition at the sale hearing. The private sale also drew flak from Mohave State Bank. Mohave complained the terms of the sale do not provide the bank with "adequate protection" of its security interests in the assets. About Mineral Park Mineral Park, Inc., Bluefish Energy Corp. and two affiliates commenced proceedings under Chapter 11 of the Bankruptcy Code in Delaware on Aug. 25, 2014. The cases are pending before the Honorable Kevin J. Carey and are jointly administered under Case No. 14-11996. Mineral Park and its affiliated debtors are subsidiaries of Mercator Minerals Ltd. ("MML"), a mineral resource company engaged through various subsidiaries in the mining, exploration, development and operation of its mineral properties in Mohave County, Arizona, and Sonora, Mexico. Mineral Park's principal asset is the Mineral Park Mine, a producing copper-molybdenum mine located near Kingman, Arizona. Bluefish is the owner and operator of the industrial gas turbine power generator at the Mine. British Columbia, Canada-based MML, which has shares trading on the Toronto Stock Exchange under the trading symbol "ML", is not included in the bankruptcy filing. The Debtors have tapped Pachulski Stang Ziehl & Jones LLP as counsel, Evercore Group LLC as investment banker, FTI Consulting, Inc., as financial advisor, FTI's David J. Beckman as CRO, and FTI's Paul Hansen as assistant CRO. Prime Clerk LLC is the claims and noticing agent. The U.S. Trustee for Region 3 appointed three creditors of Mineral Park, Inc. and its affiliates to serve on the official committee of unsecured creditors. The Committee selected Stinson Leonard Street LLP and Hiller & Arban LLC as its counsel. Mineral Park reported $286,362,131 in total assets and $266,035,508 in total liabilities. MONEY TREE: Innovate Loan Fails to Dismiss Plan Committee's Suit ---------------------------------------------------------------- District Judge W. Louis Sands, Sr., in Albany, Georgia, denied defendant Innovate Loan Servicing Corp.'s Motion for Judgment on the Pleadings in the lawsuit, POST-CONFIRMATION COMMITTEE FOR SMALL LOANS, INC., Plaintiff, v. INNOVATE LOAN SERVICING CORPORATION, et al., Defendants, Case No. 1:13-CV-191 (WLS)(M.D. Ga.). Debtors The Money Tree of Georgia, Inc., Small Loans, Inc., The Money Tree, Inc., The Money Tree of Florida, Inc., and The Money Tree of Louisiana, Inc., were engaged in the consumer finance business in Georgia, Alabama, Florida, and Louisiana, respectively. The Debtors, who were insolvent since at least 2009, filed voluntary Chapter 11 petitions on December 16, 2011, in the Bankruptcy Court for the Middle District of Alabama. The Debtors' creditors are primarily individual investors in Georgia. The Post-Confirmation Committee for Small Loans, Inc., was formed pursuant to an Amended Joint Plan of Liquidation, and has standing to bring any claims and causes of action held by the Debtors' estates. The Plan expressly preserved claims against Innovate Loan Servicing Corp. Another defendant, Best Buy Autos of Bainbridge, Inc., a Georgia corporation and subsidiary of TMG, was in the business of selling and financing automobiles to subprime borrowers. Best Buy generated accounts receivable when it financed the purchase of automobiles by consumers, typically held the promissory notes, and collected the accounts in the ordinary course of its business. Best Buy financed its operations by borrowing cash from TMG, and owes TMG at least $16.97 million. Best Buy and Innovate entered into a Purchase and Sale Agreement of Contracts, dated June 23, 2010, pursuant to which Best Buy assigned accounts with a face value of at least $880,000 in exchange for $749,236 in cash. The actual value of the assigned accounts was substantially higher than either of those figures because the accounts bore an average interest rate above 21%. The contract required Best Buy to repurchase unpaid accounts. Best Buy's management did not understand the import of the repurchase obligations when the 2010 Agreement was signed and, although management was advised against entering the 2010 Agreement by at least one third party, they would not have entered into that Agreement if they had understood the terms. Best Buy and Innovate entered into a second agreement dated December 14, 2011, pursuant to which Best Buy assigned accounts receivable with a face value of at least $5,210,339.97 in exchange for $4,428,788.98 in cash. The 2011 Agreement was executed two days prior to the Debtors' bankruptcy filing. As with the 2010 Agreement, the actual value was significantly higher than the face value or amount paid because the accounts bore an average interest rate above 19%. Under the 2011 Agreement, Best Buy assumed the same repurchase obligations contained in the 2010 Agreement. Innovate conducted extensive due diligence and purchased the highest quality accounts owned by Best Buy. Those accounts were also secured by the vehicles' titles. These actions by Innovate eliminated most of the risk associated with purchasing the referenced accounts. Pursuant to the 2010 Agreement, Best Buy guaranteed nine monthly payments to Innovate by the account debtors. If any of those payments were not made on a particular account, Innovate could require Best Buy to repurchase that account. Pursuant to the terms of the 2011 Agreement, Best Buy guaranteed three monthly payments or six biweekly payments to Innovate by the account debtors. If any of those payments were not made, Innovate could require Best Buy to repurchase that account. As a result of the repurchase obligations, Best Buy was required to pay Innovate more than $1 million to repurchase accounts. The Committee's Amended Complaint, which was filed on February 26, 2014, seeks to set aside the 2010 and 2011 Agreements and the repurchase obligations contained in those Agreements as fraudulent transfers under Georgia's Fraudulent Transfer Act. Innovate moves to dismiss the Complaint for failing to state causes of action for constructive or actual fraud. Judge Sands, however, stated that the Committee has sufficiently stated claims for actual and constructive fraud. A copy of Judge Sands' Jan. 30 Order is available at http://is.gd/LmhTR5from Leagle.com. About Money Tree Headquartered in Bainbridge, Georgia, The Money Tree Inc. -- http://www.moneytreeinc.com/-- operates a network of lending branches across the Southeast, concentrated in Georgia, Florida and Alabama. The Company and four affiliates filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc., The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc., and The Money Tree of Georgia Inc. Judge William R. Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr. Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow, P.C., serves as the Debtors' counsel. The Debtors hired Warren, Averett, Kimbrough & Marino, LLC, as restructuring advisors. The Money Tree Inc. disclosed $73,413,612 in assets and $73,050,785 in liabilities as of the Chapter 11 filing. The petitions were signed by Biladley D. Bellville, president. The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is not a party to the bankruptcy filing and intends to operate its business in the ordinary course. On Jan. 10, 2012, the Court appointed two separate Official Unsecured Creditors' Committees in The Money Tree Inc. case and The Money Tree of Georgia Inc. case. On Jan. 13, 2012, the Committees moved the Court to consolidate the two into one Omnibus Official Committee of Unsecured Creditors in the Chapter 11 cases, which motion was granted on Feb. 28, 2012. Greenberg Traurig LLP represents the Committee. The Committee tapped HGH Associates LLC as its accountants and financial advisors. On April 16, 2012, the Debtors filed a Plan of Reorganization and Disclosure Statement. Holders of General Unsecured Claims of The Money Tree, estimated total $586,676, were to receive 95% of their allowed claims. The Debtors, however, failed to move forward with their Plan as the Court stripped the Company's management of control and appointed S. Gregory Hays as Chapter 11 Trustee. Daniel D. Sparks, Esq., and Bradley R. Hightower, Esq., at Christian & Small LLP, in Birmingham, Alabama, represent the Chapter 11 Bankruptcy Trustee. In 2013, the Court approved a joint plan of liquidation proposed by the Omnibus Official Committee of Unsecured Creditors and the Chapter 11 trustee. The Plan was declared effective May 22, 2013. The Plan is based on extensive arm's-length negotiations among the Committee, the Chapter 11 trustee and representatives of the major creditors. John D. Elrod, Esq., and R. Kyle Woods, Esq., at Greenberg Traurig, LLP, in Atlanta, Georgia, represent the Committee as counsel. NEENAH FOUNDRY: Wis. Appeals Court Affirms Order in LIRC Dispute ---------------------------------------------------------------- Neenah Foundry Co. appeals a Wisconsin circuit court order upholding a Labor and Industry Review Commission (LIRC) decision. After Neenah Foundry emerged from Chapter 11 reorganization in federal bankruptcy court, LIRC denied Neenah Foundry's request to be treated as a new employer for purposes of Wisconsin's unemployment insurance law. The effect of LIRC's decision is that, over a seven-year period, Neenah Foundry will pay between $393,216 and $564,780 more into the unemployment insurance system than it would have paid as a new employer. Neenah Foundry argues that LIRC erred in interpreting the applicable statute, WIS. STAT. Sec. 108.16(8) (2011-12). Neenah Foundry argues that, contrary to LIRC's interpretation, Neenah Foundry is eligible to be treated as a new employer because: (1) the Chapter 11 reorganization proceedings resulted in the "transfer" of Neenah Foundry's business, as that term is used in Sec. 108.16(8)(a), and (2) Neenah Foundry is not a "mandatory successor" under Sec. 108.16(8)(e). Neenah Foundry argues in the alternative that federal bankruptcy law preempts LIRC's determination that Neenah Foundry is a mandatory successor. LIRC and the Department of Workforce Development are respondents. They argue that LIRC's decision is entitled to great weight deference and should be upheld. "We assume, without deciding, that Neenah Foundry's Chapter 11 reorganization resulted in a 'transfer' under WIS. STAT. Sec. 108.16(8)(a). However, even assuming there was a transfer, Neenah Foundry loses on the mandatory successor issue. More specifically, we conclude that LIRC is entitled to great weight deference on the mandatory successor issue, and that LIRC reasonably interpreted Sec. 108.16(8)(e) to determine that Neenah Foundry is a mandatory successor. We reject Neenah Foundry's federal preemption argument. Accordingly, we affirm," the Court of Appeals of Wisconsin, District II, said in a January 29, 2015 decision available at http://bit.ly/1zwRF8yfrom Leagle.com. About Neenah Enterprises Headquartered in Neenah, Wisconsin, Neenah Enterprises, Inc. -- http://www.nfco.com/-- is the indirect parent holding company of Neenah Foundry Company. Neenah Foundry Company and its subsidiaries manufacture and market a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. Neenah is one of the largest independent foundry companies in the United States, with substantial market share in the municipal and various industrial markets for gray and ductile iron castings and forged steel products. The Company filed for Chapter 11 bankruptcy protection on February 3, 2010 (Bankr. D. Del. Case No. 10-10360). Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., assist the Company in its restructuring effort. The Company had $286,611,000 in total assets against total liabilities of $449,435,000, resulting in stockholder's deficit of $162,824,000. The Company's affiliates -- NFC Castings, Inc.; Neenah Foundry Company; Cast Alloys, Inc.; Neenah Transport, Inc.; Advanced Cast Products, Inc.; Gregg Industries, Inc.; Mercer Forge Corporation; Deeter Foundry, Inc.; and Dalton Corporation -- filed separate Chapter 11 petitions. NETFLIX INC: Moody's Assigns B1 Rating on New Sr. Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 -- LGD4 rating to Netflix Inc.'s new senior unsecured notes of benchmark size. Proceeds from the issuance will be used for general corporate purposes and to finance the company's business plan, including increasing investments in original programming and accelerated expansion in new international territories. The new senior unsecured notes will rank pari passu with the company's existing $500 million 5.375% senior unsecured notes due 2021, $400 million 5.75% senior unsecured notes due 2024 and other unsecured non debt obligations at Netflix's operating subsidiaries. Moody's estimates that pro forma for the new notes issuance, debt-to-EBITDA (incorporating Moody's standard adjustments) as of 12/31/2014 will be lower than Moody's 6.0x sustained leverage ceiling for the B1 rating. However, based on Moody's expectations for weaker operating results in 2015 and an increase in absolute debt levels, Moody's anticipate that for 2015, leverage will likely exceed levels appropriate for the B1 rating, particularly if the company issues more than $1 billion of new debt this year, which may be needed to sustain ample liquidity through 2017, and which could result in gross debt-to-EBITDA leverage as high as 8.0x. The company's B1 CFR and stable outlook are supported by our expectation that its operating results will improve and leverage will decline through EBITDA and cash flow growth starting in 2016, but particularly in 2017, at which point Netflix could be well-positioned in its rating category. Netflix's B1 Corporate Family Rating (CFR), Ba3-PD Probability of Default Rating and SGL-1 Speculative Grade Liquidity rating remain unchanged. The outlook remains stable. Assignments: Issuer: Netflix, Inc. Senior Unsecured Regular Bond/Debenture (Local Currency), Assigned B1, LGD4 Ratings Rationale Netflix's B1 CFR is supported by the company's position as the largest content streaming subscription service in the world, with a sizeable subscriber base and a market leading streaming product offering. The rating also reflects expectations for higher leverage and negative free cash flow generation resulting from significant cash outlays for content costs and more rapid expansion. The rating incorporates key business risks, which include business concentration, and risks associated with low barriers to entry and the potential for disintermediation from competitors in the distribution of content. The company's past predisposition for share repurchases (having repurchased almost $1 billion from 2007 to 2011), significant subscriber churn and relatively low EBITDA margins compared to traditional media companies continue to weigh on its credit profile, though Moody's do not anticipate that the company will pay any dividends to shareholders or buy back shares over the intermediate-term. Netflix has successfully developed a digital business model and has evolved into the dominant online content streaming company in the US and some international territories from a pure physical DVD rental subscription service, as evidenced by strong double digit top-line growth in total revenues over the last eight quarters. However, Netflix's business continues to be in transition with the next few years being crucial to its developing a profitable streaming business across various international territories that can balance potential saturation in the domestic segment and fully offset the declining profits from the high margin US DVD business. Its B1 CFR reflects the execution risk associated with this transition, especially in the context of a broad range of emerging disruptive competitors with low entry barriers, and the evolving digital content distribution landscape that may hamper the subscriber growth it needs in order to successfully build and sustain a streaming business model, strong enough to withstand competitive pressures, and balance significant investment demands. Rating Outlook The stable outlook reflects our expectation that Netflix's operating results will improve and the company will de-lever following hitting peak leverage in 2015 through EBITDA and cash flow growth in 2017, recognizing that over the near-term, debt to EBITDA will likely exceed levels typical for the B1 rating. What Could Change the Rating - Up Given the material increase in permanent debt and change in fiscal policies by the company's management, an upgrade is unlikely in the near term. However, ratings could be upgraded if Netflix's mature markets can fund new market launches and increases in content spend such that it can maintain a significant lead on its content offering relative to competitors, while sustaining leverage below 4.0x. A strong commitment from management to a higher rating will be necessary for an upgrade. What Could Change the Rating - Down Ratings could be downgraded if leverage is sustained above 6.0x for an extended time frame (beyond 2016). The company's rating may face downward pressure if it experiences domestic streaming subscriber growth of under 4 million per year until it reaches above 40 million US subscribers, and is unable to maintain domestic and equally mature markets' margins above 12%. Expectations for deterioration in long-term growth due to competitive pressures or operational setbacks and liquidity constrains could also lead to a downgrade. Netflix Inc., with its headquarters in Los Gatos, California, is the world's leading subscription video on demand internet television network with three operating segments: Domestic streaming, International streaming and Domestic DVD. Domestic and International streaming segments derive revenues from monthly subscription services consisting of streaming content over the internet, and the Domestic DVD division derives revenues from monthly subscription services consisting solely of DVD-by-mail. Consolidated revenues for fiscal year 2014 were $5.5 billion. The principal methodology used in this rating was Business and Consumer Service Industry published in December 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NETFLIX INC: S&P Lowers CCR to 'B+'; Outlook Negative ----------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Los Gatos, Calif.-based online video service provider Netflix Inc. to 'B+' from 'BB-'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's existing senior unsecured notes to 'B+' from 'BB-'. The '3' recovery rating remains unchanged, indicating S&P's expectation for meaningful recovery (at about the middle of the 50%-70% range) of principal for the noteholders in the event of a payment default. S&P also assigned its 'B+' issue-level and '3' recovery ratings to Netflix's proposed $1 billion senior unsecured notes offering. The '3' recovery rating indicates S&P's expectation for meaningful recovery (at about the middle of the 50%-70% range) of principal for the noteholders in the event of a payment default. The downgrade and negative outlook reflects S&P's expectation that Netflix will incur significant discretionary cash flow deficits over the next several years and that debt leverage will be high during that time. The proposed financing represents a significant departure from Netflix's existing debt leverage, which had supported the 'BB-' rating. Under the proposed financing plan, Netflix's debt leverage will increase to about 5x by the end of 2015 (up from 1.9x as of year-end 2014), and the company will likely incur significant discretionary cash flow deficits through 2017 due to step-up investments in original programming and international expansion. The proceeds from the proposed transaction will likely provide sufficient liquidity for the next 24 months. However, it is possible that Netflix could seek additional financing in 2016 or 2017. S&P views Netflix's business risk profile as "fair," reflecting the company's leading position in the increasingly competitive and rapidly evolving online video service and its large subscriber base. However, Netflix remains dependent on movie and TV studios for content, and S&P expects the company to increase its investments in original programming for which success is unpredictable. There are also risks associated with the company launching its service in new international markets, as well as technology and content risks associated with delivering video movies and streaming content to homes. S&P expects Netflix to continue to enter new markets in 2015 and 2016, and that it will possibly complete its global rollout by 2017. The company announced that it will enter Australia and New Zealand in 2015, with other markets to come. Netflix will also need to enter into additional content commitments to serve existing and new markets. The company's streaming content commitment was $9.5 billion as of Dec. 31, 2014, up from $7.3 billion a year earlier. S&P expects that streaming content commitments will continue to increase and that Netflix's pursuit of more original programming with global rights will increase its cash flow deficits. Additionally, the competitive environment for online video services is in flux. DISH, CBS Corp., and several other companies have announced potentially competing over-the-top video services. This is in addition to existing competitors such as Amazon Prime and Hulu. Although S&P views new entrants as providing a complementary service to Netflix's, based on the type of content and service available, it is possible their services could change over time and become direct competition to the company. "We revised our assessment of Netflix's financial risk to "highly leverage" from "modest," based on our expectation for significant cash flow deficits and high debt leverage over the next several years. We expect that Netflix's debt leverage will increase to about 5x by year-2015 from 1.9x a year earlier. The increase in debt leverage will result from a combination of higher debt balance and start-up costs associated with new market entries. Given our expectation for Netflix to invest very aggressively in its growth, we no longer net cash out of our cash flow/leverage measurements. Entering new markets requires upfront investments and it can take several years to reach breakeven EBITDA. Depending on the level of investments in original programming, it is possible that Netflix could seek additional debt funding in 2016 and cause debt leverage to increase. Therefore, debt leverage could remain elevated before decreasing somewhat by the end of 2016 or early 2017, as international operation losses subside," S&P said. The combination of a "fair" business risk profile and a "highly leveraged" financial risk assessment results in an initial rating outcome ("anchor") of 'b'. S&P applied a positive analytical modifier for comparable rating analysis, based on S&P's view that Netflix's business profile is at the higher end of S&P's "fair" assessment relative to its peers. This reflects Netflix's market-leading position in many of its markets and its sizable and growing international presence. Netflix has achieved critical mass in several markets, and it is by far the market leader in the important U.S. market. S&P's base case assumes these: -- U.S. GDP growth of 3.3% in 2015 and 2.9% in 2016; -- Eurozone GDP growth of 1% in 2015 and 1.4% in 2015; -- Revenue growth exceeding 20% in 2015 and 2016; -- EBITDA margin deterioration in 2015 and then modest expansion in 2016; and -- Capital expenditures of $170 million-$200 million in 2015 and 2016. Based on these assumptions, S&P arrives at these credit measures: -- Adjusted debt to EBITDA of about 5x at the end of 2015 and then declining to about 4x by year-end 2016, absent any new debt issuances in 2016; and -- Significant discretionary cash flow deficits in 2015 and 2016. The negative outlook reflects S&P's expectation that Netflix will have significant discretionary cash flow deficits and high debt leverage over the next three years. In order to fund those discretionary cash flow deficits, S&P believes Netflix will have to maintain a very healthy subscriber growth rate to maintain continual access to capital markets. S&P could lower the rating if it believes Netflix is unlikely to grow its subscriber base and expand its EBITDA, such that debt leverage decreases meaningfully by the end of 2016 from S&P's expected peak of above 5x in 2015. If Netflix is unable to deleverage as S&P expects, it believes this could reflect lower-than-expected subscriber growth, which could limit its access to capital markets and pressure its liquidity. Additionally, under those circumstances, any incremental debt Netflix raises to fund programming investments and market expansion would likely increase the company's debt leverage above S&P's projected 2015 peak. S&P could revise the outlook to stable if Netflix can achieve its projected subscriber growth rates in 2015 and show good momentum for 2016 subscriber growth, which S&P believes should enable the company to maintain access to the capital markets. Under this scenario, S&P believes that Netflix will likely be able to fund its programming investments and international expansions through the capital markets, while modestly reducing debt leverage. NEW YORK CITY OPERA: Picks Lower Bid, Sale Hearing Postponed ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that New York City Opera selected a $1.25 million bid from NYCO Renaissance Ltd. as the best offer for its remaining assets, despite a higher $1.5 million offer from Gene Kaufman. According to the report, the hearing for the bankruptcy judge to choose between the two buyers is postponed at an indefinite date, an e-mailed statement from Ken Rosen of Lowenstein Sandler PC, lawyers for the non-operating opera company, said. About New York City Opera New York City Opera, Inc., sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 13-13240) on Oct. 3, 2013. Created 70 years ago, the company was once dubbed "the people's opera" by Mayor Fiorello LaGuardia, and was a breeding ground for young talent that included Beverly Sills and Placido Domingo. The Opera estimated between $1 million and $10 million in both assets and debt. The petition was signed by George Steel, general manager and artistic director. Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, serves as the opera's counsel. Ewenstein Young & Roth LLP serves as special counsel. NII HOLDINGS: Wants NIU Ch. 11 Case Jointly Administered -------------------------------------------------------- NII Holdings, Inc., et al., as well as NIU Holdings LLC, ask the U.S. Bankruptcy Court for the Southern District of New York to issue an order directing the joint administration of NIU Chapter 11 case with the Current Debtors' Chapter 11 cases under Case No. 14-12611. The Debtors also ask that the Court issue an order providing that certain orders entered in NII Holdings' Chapter 11 case be made applicable to NIU's Chapter 11 case. About NII Holdings NII Holdings Inc. through its subsidiaries provides wireless communication services for businesses and consumers in Brazil, Mexico and Argentina. NII Holdings has the exclusive right to use the Nextel brand in its markets pursuant to a trademark license agreement with Sprint Corporation and offers unique push-to-talk ("PTT") services associated with the Nextel brand in Latin America. NII Holdings' shares of common stock, par value $0.001, were publicly traded under the symbol NIHD on the NASDAQ Global Select Market. NII Holdings and 12 wholly owned subsidiaries sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-12611) in Manhattan on Sept. 15, 2014. The Debtors' cases are jointly administered and are assigned to Judge Shelley C. Chapman. The Debtors have tapped Jones Day as counsel and Prime Clerk LLC as claims and noticing agent. NII Holdings disclosed $1.22 billion in assets and $3.068 billion in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 2 appointed five creditors of NII Holdings to serve on the official committee of unsecured creditors. NIU Holdings LLC, holder of 100% of the equity of Nextel International (Uruguay), LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 15-10155) on Jan. 25, 2015. NIU Holdings is a direct subsidiary of Netherlands-based NIHD Telecom Holdings, B.V., and affiliated with debtors NII Holdings, Inc., et al. NIU Holdings' principal asset is its equity interests in Nextel Uruguay. The Debtor estimated its assets at $500 million to $1 billion and debt at $0 to $50,000. NISKA GAS: Moody's Lowers Corporate Family Rating to Caa1 --------------------------------------------------------- Moody's Investors Service downgraded Niska Gas Storage Partners LLC's Corporate Family Rating (CFR) to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's downgraded Niska Gas Storage Canada ULC's senior unsecured notes rating to Caa2 from Caa1. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. Moody's also changed the rating outlook to negative from stable. "The downgrade reflects declining EBITDA and related increase in debt to EBITDA above 11x for fiscal year 2016 that results from a challenging natural gas storage operating environment," said Paresh Chari, Moody's Analyst. "Although the suspension of the distributions is credit positive, Moody's believe there is still little possibility of debt reduction and leverage will remain elevated as the company awaits an improvement in storage spreads." Downgrades: Issuer: Niska Gas Storage Canada ULC Senior Unsecured Regular Bond/Debenture, Apr 1, 2019, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Issuer: Niska Gas Storage Partners LLC Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Speculative Grade Liquidity Rating, Lowered to SGL-4 from SGL-3 Outlook Actions: Issuer: Niska Gas Storage Canada ULC Outlook, Changed To Negative From Stable Issuer: Niska Gas Storage Partners LLC Outlook, Changed To Negative From Stable Ratings Rationale Niska's Caa1 Corporate Family Rating (CFR) is driven by very high leverage, cash flow volatility from its natural gas arbitrage business, a very weak natural gas spread environment, and a limited and decreasing amount of revenue coming from fee-based contracts. The SGL-4 Speculative Grade Liquidity Rating reflects weak liquidity. At December 31, 2014, Niska had minimal cash and $85 million available, after $20 million in letters of credit, under its $345 million senior secured borrowing base revolver ($400 million committed maximum borrowing capacity), which matures in June 2016. The revolver is available in the amount of $200 million each to AECO Gas Storage Partnership and Niska Gas Storage US, LLC, subject to the periodic borrowing base calculation. Moody's expect $10 million of negative free cash flow for calendar year 2015. Moody's expect Niska's fixed charge coverage ratio to fall below the 1.1x covenant through this period, which will limit the ability to draw more than 85% of the revolver borrowing base. The company has no major debt maturities until 2019. Niska has little in the way of non-core assets that could be sold. In accordance with Moody's Loss Given Default methodology, the $575 million senior unsecured notes are rated Caa2, one notch below the Caa1 CFR, because of the existence of the priority ranking $400 million senior secured revolver. The negative outlook reflects Moody's view that the capital structure is unsustainable increasing the likelihood of a restructuring. A change in outlook to stable would be considered if Moody's viewed the capital structure as sustainable, which would only occur with significant permanent EBITDA growth. The rating could be downgraded if Niska's adjusted EBITDA declined below $60 million, or if liquidity weakens further with the borrowing base declining below $345 million or if there was less than $25 million available under the revolver. The rating could be upgraded if Niska can increase its fee-based EBITDA to about 60% of total EBITDA while reducing leverage below 6.5x. Niska is a Calgary, Alberta-based, Radnor, Pennsylvania-headquartered natural gas storage master limited partnership, which owns approximately 242 billion cubic feet (Bcf) of storage capacity in depleted natural gas reservoirs. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NISKA GAS: S&P Lowers Rating to 'B-'; Outlook Negative ------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its ratings on Houston-based natural gas storage company Niska Gas Storage Partners LLC to 'B-' from 'B+'. At the same time, Standard & Poor's lowered its issue-level rating on the senior unsecured debt at subsidiaries Niska Gas Storage US and Niska Gas Storage Canada ULC to 'CCC+' from 'B'. The outlook is negative. The '5' recovery rating on the senior unsecured debt is unchanged. The downgrade reflects S&P's expectation that seasonal natural gas storage spreads will continue to be weak in fiscal 2016, further squeezing credit metrics. S&P expects the low gas price environment and narrow seasonal gas spreads to cause the company's business risk profile to deteriorate. "The downgrade reflects our expectation that seasonal natural gas storage spreads will continue to be weak in fiscal 2016, further squeezing credit metrics," said Standard & Poor's credit analyst Gerry Hannochko. S&P expects the low gas price environment and narrow seasonal gas spreads to cause the company's business risk profile to deteriorate. The ratings on Niska reflect Standard & Poor's assessment of the company's leveraged balance sheet, exposure to contract renewal risk and market pricing risk, and the potential large working capital and liquidity requirements of its optimization program. Niska owns and operates the largest independent natural gas storage business in North America. The company's quarter ended Dec. 31, 2014 results were weak and highlighted declining profitability due to low seasonal storage spreads, and dependence on weather for optimization revenue. The company announced the suspension of distributions to unitholders due to weak financial results and lack of visibility for improving market conditions. In S&P's view, the company's "weak" business risk profile reflects its exposure to the heightened volatility inherent in natural gas market fundamentals, dependence on natural gas price spreads for profitability, and exposure to contract renewal risk. Continued declines in seasonal storage spreads that affect profitability and reliance on weather to drive optimization inventory revenue have led to our revision of the business risk profile assessment to weak from fair. S&P views the financial risk profile as "highly leveraged" and S&P expects cash flow strength to remain in this category during its forecast horizon. This, combined with the company's business risk profile, contributes to the final rating, which is the lower of a split score outcome from our business and financial risk matrix. S&P has assessed the anchor score to be 'b-' due to the very weak forecast financials in 2015. Niska's contracts and optimization inventory depend heavily on the seasonal spread in natural gas prices. These typically see winter prices higher than the summer prices, generating margin for companies that store gas in the summer for later sale at a higher price in the winter. Prices for natural gas as a whole have been falling and have remained low since the beginning of July 2014, and spreads continue to be soft relative to historical levels. S&P forecasts fiscal 2015 adjusted-funds from operations (AFFO)-to-debt will be approximately 4% and debt-to-EBITDA will be approximately 10x. The negative outlook reflects Standard & Poor's expectation that Niska's credit metrics will continue to be weak during the low gas price environment, which in turn weakens the business risk profile due to the highly volatile nature of cash flows. S&P expects seasonal storage spreads will continue to tighten in its forecast horizon, which may further weaken credit metrics. S&P believes returning to a stable outlook during its year-long horizon would require a demonstrated improvement in Niska's financial risk profile, such that S&P would expect AFFO-to-debt to strengthen and stay within the 12%-15% range and debt-to-EBITDA at 4x in S&P's base-case scenario. S&P could lower the ratings if metrics weaken within the highly leveraged category to 3%-4%, which could result from further tightening in seasonal storage spreads or lower volatility that affects Niska's ability to earn from optimization inventory. Deterioration in Niska's EBITDA-to-interest coverage ratio falling to less than 1.2x could also lead to a downgrade. NRG ENERGY: Moody's Affirms Ba3 CFR & B1 Unsecured Notes Rating --------------------------------------------------------------- Moody's Investors Service, assigned a Baa3 rating to the reoffering of NRG Energy, Inc.'s (NRG) $42 million City of Texas City Industrial Development Revenue Bonds due 2045. Concurrent with this rating assignment, Moody's affirmed NRG's Ba3 Corporate Family Rating (CFR) and Ba3-PD Probability of Default Rating, along with the Baa3 rating on the company's senior secured revolver and term loans and B1 rating on the unsecured notes. The outlook is stable. Moody's apply Moody's Loss Given Default (LGD) methodology to guide our decision regarding the ratings for NRG's individual securities. Based upon NRG's Ba3 CFR and Ba3-PD Probability of Default Rating, the LGD methodology suggests a Baa3 rating for NRG's senior secured term loan, secured revolver, and other senior secured obligations such as the City of Texas Industrial Development Bonds. Importantly, Moody's observes that changes to the capital structure at NRG which increases the relative amount of secured debt while decreasing the relative amount of unsecured debt could result in a lower instrument rating for the secured instruments, including the City of Texas bonds, even if NRG's fundamental credit quality remains unchanged. Ratings Rationale NRG's Ba3 corporate family rating primarily reflects its position as the largest independent power producer in the U.S. in terms of generating capacity. The rating also incorporates the company's significant debt leverage and the current weak market conditions for U.S. merchant companies. These market conditions have been heavily driven by low natural gas prices, for which Moody's do not foresee a meaningful recovery in the next few years due to the glut of natural gas reserves created by continued shale gas development. Surplus generating capacity has been an important contributing factor for the current weak market conditions as well, but it appears that the US merchant power markets have bottomed out, with some markets showing potential for capacity market improvements. As the incumbent, NRG's retail operation in Texas also provides sizeable, stable cash flow. Moody's view NRG's plans to expand its distributed generation business as a viable source of growth with an acceptable level of negative free cash flow over the next two years. NRG's corporate family rating of Ba3 is rated three notches higher than the corporate family rating of B3 for its GenOn subsidiary, reflecting NRG's limited support to GenOn and its subsidiaries. Liquidity NRG's speculative grade liquidity rating is SGL-2. The company continues to possess good liquidity with $1.9 billion of unrestricted cash on hand and $1.3 billion of unused capacity at the end of third quarter 2014 on its revolving credit facility. Excluding non-recourse maturities, NRG does not have any major debt maturities until 2018. NRG's $2.5 billion revolving credit facility also expires in 2018. The company expects to generate $1.2 to $1.3 billion of free cash flow before growth capital expenditures for 2015. Committed growth capital expenditures of $900 million for 2015 is significantly higher than the levels experienced in the recent past but should be manageable. Dividends, based on the current quarterly rate of $0.145/share and 338 million of common shares outstanding at the end of third quarter 2014, should require annual funding of about $196 million. Rating Outlook The stable outlook reflects NRG's solid cash flow generation capabilities in the midst of a protracted downturn for the merchant sector. While NRG has been active with shareholder friendly initiatives such as raising dividends and forming NRG Yield Co, these initiatives to date have not created negative rating implications given the potential effect on parent leverage and cash flow; however, future YieldCo transactions will continue to warrant a review that would incorporate any mitigating factors and consider the facts and circumstances at the time to determine if a negative rating action would be necessary. What Could Change the Rating - Up A fundamental improvement in the merchant power market or a moderation in NRG's current debt leverage to facilitate a 12% or above CFO-pre-working-capital/debt ratio on a sustained basis could result in upward rating pressure. What Could Change the Rating - Down Moody's may take a negative rating action should cash flow leverage deteriorate significantly to 7% CFO-pre-working-capital to debt without incorporating the effects of GenOn's financial position. Corporate Profile Headquartered in Princeton, New Jersey, NRG Energy, Inc. (NRG) owns and operates a large portfolio of unregulated generating facilities mainly in the US. As of September 30, 2014, the company had 53 GW of generation capacity. NRG's unregulated retail energy business which includes Reliant Energy, Green Mountain Energy, Energy Plus Holdings and Cirro Energy serve more than 3 million residential, business, commercial and industrial customers in Texas and, increasingly, in certain markets in the Northeastern US. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in Octoboer 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. Assignments: Issuer: Texas City Industrial Development Corp., TX Senior Secured Revenue Bonds, Assigned Baa3(LGD2) Outlook Actions: Issuer: NRG Energy, Inc. Outlook, Remains Stable Affirmations: Issuer: Chautauqua (Cnty of) NY, Ind. Dev. Agency Senior Secured Revenue Bonds, Affirmed Baa3(LGD2) Issuer: Delaware Economic Development Authority Senior Secured Revenue Bonds, Affirmed Baa3(LGD2) Issuer: Fort Bend County Industrial Development Corp Senior Secured Revenue Bonds, Affirmed Baa3(LGD2) Issuer: NRG Energy, Inc. Probability of Default Rating, Affirmed Ba3-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Corporate Family Rating, Affirmed Ba3 Senior Secured Bank Credit Facility, Affirmed Baa3(LGD2) Senior Unsecured Regular Bond/Debenture, Affirmed B1(LGD4) Issuer: Sussex (County of) DE Senior Secured Revenue Bonds, Affirmed Baa3(LGD2) OAK KNOLL: Court Rejects Harris' Bid for Sale Commission -------------------------------------------------------- Maine Bankruptcy Judge Peter G. Cary said Robert Harris is not entitled to allowance of his administrative expense claim in the Chapter 11 case of Oak Knoll Associates, L.P. Harris seeks payment of a commission for the work he performed in connection with the sale of the real estate owned by Oak Knoll in Connecticut. The listing agreement required the Debtor to pay Harris a commission of 4.8% of the sale price if the Debtor's property is sold within six months of May 17, 2011. Harris's efforts produced a potential buyer. On October 11, 2011, Navarino Capital Management, LLC and Oak Knoll signed a purchase and sale agreement for the Property, and Navarino delivered an earnest money deposit to an escrow agent. The deal, however, unraveled after Navarino wrote to Oak Knoll seeking different terms for the sale and a further extension of the inspection period. After Oak Knoll filed for bankruptcy in March 2013, Navarino and Oak Knoll resumed talks and in mid-October of 2013, they executed a purchase and sale contract for the Property. On November 25, 2013, Oak Knoll filed a plan of reorganization premised upon the 2013 P&S. Connecticut Housing Finance Authority, a pre-bankruptcy lender to Oak Knoll, objected to the plan and moved to dismiss the case or, alternatively, to transfer venue of the case to Connecticut. Ultimately, Oak Knoll resolved CHFA's objections to the sale of the Property and an amended plan was filed on March 31, 2014. That plan was confirmed and a sale of the Property to Navarino closed on or about July 3, 2014. A copy of Judge Cary's Feb. 2 Memorandum Decision is available at http://is.gd/f47voEfrom Leagle.com. Oak Knoll Associates, L.P., in Portland, Maine, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 13-20205) on March 18, 2013. Richard P. Olson, Esq., at Perkins Olson, P.A., serves as counsel. The Debtor scheduled assets of $6,700,000 and liabilities of $3,529,350. ONE FOR THE MONEY: Section 341(a) Meeting Set for Feb. 26 --------------------------------------------------------- A meeting of creditors in the bankruptcy case of One For The Money, LLC, will be held on Feb. 26, 2015, 2:30 p.m. at 80 Broad St., 4th Floor, USTM. 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. One For The Money, LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 15-10188) in Manhattan on Jan. 28, 2015, without stating a reason. The petition was signed by Anthony M. Marano as managing member. The Debtor estimated assets and liabilities of $10 million to $50 million. Jonathan S. Pasternak and the law firm of DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, New York, has been tapped as counsel. The Debtor's schedules of assets and liabilities and statement of financial affairs are due Feb. 11, 2015. The Debtor's Chapter 11 plan is due by Nov. 24, 2015. The Debtor is owned by the Maranos and the Galassos. The largest shareholder is Anthony C. Marano, who owns 42 percent. PACKAGING DYNAMICS: S&P Affirms 'B' CCR & Revises Outlook --------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Packaging Dynamics Corp. and revised its outlook to stable from negative. S&P subsequently withdrew all of its ratings on the company at the company's request, following its acquisition by Novolex Holdings Inc. and the placement of cash with the notes' trustee sufficient to repay its rated debt. PARADISE FARMS: Ga. Court Throws Out Harrell Appeal --------------------------------------------------- Lister W. Harrell appeals the decision of the United States Bankruptcy Court, Southern District of Georgia, to dismiss an adversary proceeding which was filed by Mr. Harrell and purportedly two entities of which he is a principal, Saraland, LLLP and Paradise Farms, Inc. The bankruptcy case is a Chapter 7 proceeding involving Paradise Farms, Inc. -- Bankruptcy Case No. 12-30111 (S.D. Ga. Mar. 29, 2012). The Bankruptcy Court dismissed the adversary proceeding on September 5, 2014, upon Mr. Harrell's failure to pay the required filing fee and his failure to substantially conform to the applicable rules and forms for filing an adversary proceeding. On September 24, 2014, Mr. Harrell filed a notice of appeal, but he did not pay the appellate filing fee. On December 9, 2014, the District Court adopted the Report and Recommendation of the Bankruptcy Court denying Mr. Harrell in forma pauperis status. The District Court gave Mr. Harrell 10 days to file the required filing fee or face dismissal of the appeal. On December 19, 2014, Mr. Harrell filed a Notice of Appeal to the Eleventh Circuit Court of Appeals, appealing the December 9 Order directing the payment of the filing fee. The Notice of Appeal was accompanied by a motion for leave to appeal in forma pauperis and motion to appoint counsel. Because a final judgment or order had not been entered in this case at that point, Mr. Harrell's notice of appeal is premature and improper, District Judge Dudley H. Bowen said. Nevertheless, it is clear from this case and the multitude of other appeals filed by Mr. Harrell in the District Court that he does not plan to pay the filing fee. Accordingly, the appeal is dismissed. A copy of the District Court's January 26, 2015 Order is available at http://tinyurl.com/opu3hkvfrom Leagle.com. Paradise Farms, Inc., dba Lister Outdoor World, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No.: 12-30111) on March 29, 2012. Jon A. Levis, Esq., at MERRILL & STONE, LLC, serves as the Debtor's counsel. Paradise Farms scheduled assets of $1,000 and liabilities of $3,834,874. A list of the three largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/gasb12-30111.pdf The petition was signed by Lister Harrell, president. PLC CAPITAL: Fitch Raises 2034 Stock Rating From 'BB+' ------------------------------------------------------ Fitch Ratings has upgraded the ratings of Protective Life Corp.'s (NYSE: PL) Issuer Default Rating (IDR) to 'A-' from 'BBB+' and its senior debt ratings to 'BBB+' from 'BBB'. At the same time, Fitch has upgraded PL's primary life insurance subsidiaries' Insurer Financial Strength (IFS) to 'A+' from 'A'. Fitch has also placed the ratings on Rating Watch Negative. KEY RATING DRIVERS On Feb. 1, 2015, Protective Life Corporation (PL) was acquired by Japan-based Dai-ichi Life Insurance Company, Ltd. (Dai-ichi Life). PL's ratings were upgraded and the Rating Watch was established to be aligned with the ratings and Rating Watch status of Dai-ichi Life based on Fitch's criteria. Dai-ichi Life is the second largest life insurance company in Japan and ranks as one of the largest life insurers globally. The transaction reflects a broader strategic initiative by Dai-ichi Life to expand its life insurance business outside of Japan. The acquisition of PL represents Dai-ichi Life's first acquisition in the U.S. life insurance market. Fitch anticipates relatively low integration risk, as PL's existing management team and operating strategy will largely remain in place. The Rating Watch Negative status reflects Dai-ichi Life's exposure to Japan sovereign risk (see 'Fitch Places Japan's 'A+' IDRs on Rating Watch Negative' dated Dec. 9, 2014 at www.fitchratings.com). Fitch expects to resolve the Rating Watch Negative on Japan during the first half of 2015. PL's ratings continue to reflect its strong operating performance, improving debt service capability and low investment risk. While PL's risk-adjusted capitalization remains in line with rating expectations, its ratings also reflect the company's relatively high total leverage driven by reserve funding arrangements. Fitch's standalone assessment of PL's operations is an 'A' IFS rating and its strategic importance within the Dai-chi Life enterprise is considered 'Very Important.' The strategic category reflects Dai-ichi Life's initiative to expand into the U.S. life insurance market. PL's ratings benefit from greater resources and the stronger credit profile of Dai-ichi Life. As such, the PL entities receive a one-notch uplift and have been assigned the group rating. RATING SENSITIVITIES With PL currently rated at Japan's Long-Term Local-Currency IDR, an upgrade is unlikely in the near future. Conversely, if the rating on Japan were lowered, PL's ratings will also likely be lowered in conjunction with its parent. Fitch has upgraded the following ratings and revised the Rating Watch to Negative from Positive: Protective Life Corporation -- IDR to 'A-' from 'BBB+'; -- $150 million of 6.40% senior notes due 2018 to 'BBB+' from 'BBB'; -- $400 million of 7.38% senior notes due 2019 to 'BBB+' from 'BBB'; -- $300 million of 8.45% senior notes due 2039 to 'BBB+' from 'BBB'; -- $288 million of 6.25% subordinated debt due 2042 to 'BBB-' from 'BB+'; -- $150 million of 6.00% subordinated debt due 2042 to 'BBB-' from 'BB+'. PLC Capital Trust V -- $103 million of 6.13% trust-preferred stock due 2034 to 'BBB-' from 'BB+'. Protective Life Insurance Company Protective Life and Annuity Insurance Company West Coast Life Insurance Company MONY Life Insurance Co. -- IFS to 'A+' from 'A'. PRESIDIO HOLDINGS: Moody's Assigns Caa1 Rating on $150MM Notes -------------------------------------------------------------- Moody's Investors Service assigned a Caa1 (LGD6) rating to Presidio Holdings Inc.'s proposed $150 million subordinated notes, and upgraded the previously rated senior unsecured notes to B3 (LGD5) from Caa1 (LGD5), on the downsizing of these notes to $250 million from $400 million. The new ratings reflect the change in the financing structure of the company's buyout by affiliates of Apollo management. All other ratings, including the B2 corporate family rating are unchanged. The outlook remains stable. Ratings Rationale Presidio's B2 corporate family rating reflects the company's significantly increased financial risk, as Moody's estimates Presidio's adjusted debt to EBITDA leverage will be in the mid 6 times range at closing of the leveraged buyout. However, Presidio's near-national geographic footprint, enhanced positioning and specialized capabilities across product categories in the data center, virtualization, networking and security deployments are supportive of the ratings. The company's increasing diversification into high-end products enhance its prospects to sell technology solutions to small and medium sized businesses and provide good long term growth opportunities. Although one OEM vendor (Cisco) accounts for the majority of its revenue, the company has been expanding its partnerships with other leading technology vendors such as EMC, VMware, Oracle and IBM. The ratings for Presidio's debt instruments reflect both the overall probability of default of the company, to which Moody's has assigned a PDR of B2-PD, and an average recovery expectation at default. The senior unsecured notes are rated B3-LGD5, reflecting both the notes' junior position in the capital structure and the support provided by the issuance of the new subordinated notes, rated at Caa1-LGD6. As the company is increasing its financial leverage to fund the leveraged buyout, a rating upgrade is unlikely over the next 12-18 months. The rating could be upgraded if the company executes in its strategy and pays down debt leading to sustainably lower levels of adjusted debt to EBITDA below 4.5 times (after Moody's standard adjustments) while achieving organic revenue growth consistent with industry levels and without pressuring operating margins. The ratings could be downgraded if the company does not achieve expected revenue and EBITDA growth levels, from factors that might include weak economic conditions, increased customer churn, poor execution, or heightened competition. In addition, negative rating pressure could arise if adjusted to EBITDA remains above 6.0x or, liquidity weakens which could arise from operating losses, dividend payments, or cash acquisitions without a proportionate increase in EBITDA. A deteriorating relationship with key suppliers, Cisco and EMC especially, could also place downward pressure on the rating. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Rating actions: Presidio Holdings Inc. $150 million Subordinated Notes -- Assigned Caa1, LGD6 $250 million Senior Unsecured Notes -- Upgraded to B3, LGD5 from Caa1, LGD5 Outlook is stable The principal methodology used in this rating was Business and Consumer Service Industry published in December 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Greenbelt, MD, Presidio, Inc. is a provider of information technology (IT) infrastructure and services focused on data center, virtualization, network communications, security, mobility and contact centers for commercial and government clients within the U.S. The company is in the process of being acquired by Apollo Global Management. PRESIDIO INC: S&P Retains 'B' CCR After Changes to LBO Financing ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Presidio Inc., including the 'B' corporate credit rating, remain unchanged following changes to the company's financing for its leveraged buyout by Apollo Global Management. The company will reduce the principal amount of its planned unsecured notes to $250 million from $400 million and it will issue a new tranche of $150 million subordinated notes that Apollo will hold. S&P's 'CCC+' issue-level rating and '6' recovery rating on the unsecured notes remain unchanged. S&P is assigning a 'CCC+' issue-level rating and a '6' recovery rating to the subordinated notes; the '6' recovery rating indicates our expectation for negligible recovery (0% to 10%) in the event of payment default. Although the changes result in an increase in interest expense of roughly $15 million more than what S&P originally expected, credit metrics remain in line with the 'B' rating, including pro forma leverage in the low-6x area and expected annual free operating cash flow in the $30 million to $60 million range. RATINGS LIST Presidio Inc. Corporate Credit Rating B/Stable/-- Presidio Holdings Inc. $250 mil. notes Senior Secured CCC+ Recovery Rating 6 New Rating Presidio Holdings Inc. $150 mil. subordinated notes Senior Secured CCC+ Recovery Rating 6 PRINCETON OFFICE: Plymouth Loses District Court Appeal ------------------------------------------------------ New Jersey District Judge Michael A. Shipp affirmed the Bankruptcy Court's decision finding that Plymouth Park Tax Services LLC knowingly charged debtor Princeton Office Park, L.P. improper amounts by way of Plymouth's Proofs of Claim in contravention of N.J.S.A. 54:5-63.1. The District Court also upheld the Bankruptcy Court's order that the tax sale certificate held by Plymouth was subject to forfeiture, and its lien on the Debtor's property was void pursuant to 11 U.S.C. Sec. 506(d). In 2007 Plymouth filed a foreclosure complaint against the Debtor on the Property arising from the Certificate, and in response, the Debtor filed for relief under Chapter 11 of the Bankruptcy Code. Thereafter, Plymouth filed the first proof of claim in the amount of $1,775,791.33, which included a $600,100 premium. The case is, PLYMOUTH PARK TAX SERVICES LLC, Appellant, v. PRINCETON OFFICE PARK, LLC, Appellee, Civil Action No. 14-2125 (MAS)(D.N.J.). A copy of the Court's January 30, 2015 Memorandum Opinion is available at http://is.gd/A9CdOufrom Leagle.com. Plymouth Park Tax Services LLC, Appellant, is represented by: Stephen B. McNally, Esq. McNALLY & BUSCHE, LLC 93 Main Street #201 Newton, NJ 07860 Tel: (973) 300-4260 Princeton Office Park, LLC, Appellee, is represented by: Morris S. Bauer, Esq. NORRIS McLAUGHLIN & MARCUS 721 Route 202/206, Suite 200 P.O. Box 5933 Bridgewater, NJ 08807-5933 Tel: (908) 722-0700 E-mail: msbauer@nmmlaw.com About Princeton Office Park Headquartered in Morristown, New Jersey, Princeton Office Park, LP, is a New Jersey limited partnership whose primary asset is a vacant industrial building complex in Lawrence Township, New Jersey. Plymouth is a company that was formed for the purpose of investing in tax sale certificates in New Jersey, as well as other states. Princeton Office Park GP, L.P. holds a 50% equity interest in the Debtor. Princeton GP's general partner is United States Land Resources, L.P., a New Jersey limited partnership, whose general partner is United States Realty Resources, Inc., a New Jersey corporation. Lawrence S. Berger is the president of USRR. The Debtor's limited partners is Success Truehand GmbH, which holds a 31.67% equity interest in the Debtor. The Company filed for Chapter 11 protection on September 9, 2008 (Bankr. D. N.J. Case No. 08-27149). Melissa A. Pena, Esq., at Norris, McLauglin & Marcus, in New York, and Morris S. Bauer, Esq., at Norris McLaughlin & Marcus PA, in Bridgewater, New Jersey, represent the Debtor as counsel. In its schedules, the Debtor disclosed total assets of $25,000,000 and total debts of $2,517,370. PROSPECT PARK: Seeks April 6 Extension of Solicitation Period ------------------------------------------------------------- Prospect Park Networks, LLC, filed a fourth motion asking the U.S. Bankruptcy Court for the District of Delaware to further extend its exclusive period to solicit acceptances of its Chapter 11 plan through and including April 6, 2015. The Third Exclusivity Order enlarged the Debtor's exclusive solicitation period through and including Feb. 3. By agreement between the Debtor and the Official Committee of Unsecured Creditors, the enlargement of the exclusivity period granted in the Third Exclusivity Order was made inapplicable as to the Committee. Because the Debtor's exclusive solicitation period expired on Feb. 3, the Debtor asks that the exclusive solicitation period be extended through and including April 5. The Debtor's Amended Plan of Liquidation contemplates the appointment of an independent fiduciary, James S. Feltman, who will oversee the liquidation of the Debtor's assets, including its substantial litigation claims against American Broadcasting Company, Inc. To represent the Debtor in the pending litigation against ABC, the Debtor has obtained the Court's authority to retain Jones Day on a contingency basis, effective upon the Debtor's payment of a $400,000 cost reserve to Jones Day. The Debtor tell the Court that they would not have sufficient cash on hand to pay the litigation cost reserve to Jones Day absent received anticipated funds from the net proceeds of a tax credit sale. The Debtor relates that since the filing of the Third Exclusivity Motion, the Debtor has received the proceeds of the tax credit sale, but those proceeds were significantly less than the Debtor had estimated. This is due to delays beyond what had been reasonably predicted by the Debtor, resulting in increased default interest charges by the secured creditor. Moreover, the secured creditor charged attorneys' fees against the tax credit sale net proceeds far in excess of what the Debtor had anticipated. The Debtor is exploring all available remedies in respect of the improper charging of default interest and other charges against the tax credit so as to ensure that the estate receives all of the funds to which it is entitled. The Debtor adds that it has also engaged with the Committee in soliciting financing offers from various lenders and investors. The Debtor says it has been in contact with five potential lenders or investors in an effort to obtain the funds necessary to finalize the retention of Jones Day and confirm a plan. Those efforts, according to the Debtor, remain ongoing, and the Debtor says it is hopeful that it will be able to consummate an investment or loan transaction in the near future which will enable it accomplish its goals. Meanwhile, the Debtor has received comments to its Amended Plan and Disclosure Statement from the Creditors' Committee and the U.S. Trustee. The Debtor believes that it will be able to file a further amended plan and disclosure statement, which will fully address these concerns, particularly when the Debtor has finalized an agreement with a funding source. A hearing on the extension request is scheduled for March 19, 2015, at 11:30 a.m. (ET). Objections are due March 12. About Prospect Park Networks Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent and management company, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-10520) in Wilmington, on March 10, 2014, estimating $50 million to $100 million in assets, and $10 million to $50 million in debts. The petition was signed by Jeffrey Kwatinetz, president. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H. Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon, Esq., at Genovese Joblove & Battista, P.A., serve as the Debtor's bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an ordinary course professional. The U.S. Trustee for Region 3 selected three creditors to serve on the Official Committee of Unsecured Creditors. Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Committee's counsel. PROVINCE GRANDE: $300,000 PEM Contribution Is Equity Infusion ------------------------------------------------------------- Judge Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina granted the Plaintiffs' motion for summary judgment requesting that the $300,000 PEM contribution be recharacterized as an equity contribution by Stanley Jacobson, Richard B. Conaty, and AIHL. The Plaintiffs in the adversary proceeding captioned Eric M. Levin; and Howard Shareff v. Province Grande Olde Liberty, LLC; and PEM Entities, LLC, Case No. 13-00122-8-RDD, filed the Motion and supporting documents on September 15, 2014. PEM and the Debtor filed their responses opposing the Motion on October 9, 2014. In their adversary complaint, the Plaintiffs asserted claims of equitable subordination and recharacterization of the claim of PEM. The Complaint also includes a cause of action for avoidance and recovery of alleged fraudulent transfer. Judge Doub also entered these decisions: * As to the Plaintiffs' claim that the PEM Contribution should be equitably subordinated to that of the Plaintiffs, the Court holds that there was not sufficient evidence of misconduct or inequitable conduct on the part of the Defendants, as a matter of law. Therefore, summary judgment is denied for the Plaintiffs but granted for the Defendants. Further, the Plaintiffs' claim with regard to equitable subordination is dismissed with prejudice; * As to Plaintiffs' claim for relief to recover for the alleged fraudulent transfers made by the Debtor for the benefit of PEM, the Plaintiffs do not have standing to bring an action for fraudulent transfers under Sections 544 and 548 of the Bankruptcy Code. Therefore, summary judgment is denied and the Plaintiffs' claim for relief is dismissed with prejudice; * As to Plaintiffs' request that the Court set aside the Paragon First Deed of Trust and the Deglomini-Simone Deed of Trust, the Court holds that the deeds of trust are valid deeds of trust. Further, Paragon Commercial Bank, Joseph Deglomini and Joseph Simone are not party defendants to the action. Therefore, summary judgment is denied and the Plaintiffs' claim for relief is dismissed with prejudice; and * As to the Plaintiffs' prayer for relief that the Court award the Plaintiffs' their costs and reasonable attorneys' fees, the Court finds no basis for such an award. The Plaintiffs and the Defendant will each be taxed with their respective fees and costs. A full-text copy of the December 5, 2014 Order is available at http://bit.ly/1BRGusPfrom Leagle.com. About Province Grande Province Grande Olde Liberty, LLC, filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-01563) on March 11, 2013. As of the date of the petition, the Debtor's principal asset consisted of developed and undeveloped land, divided into lots, in the Olde Liberty Golf and Country Club, a golf and single-family home development project in Franklin County, North Carolina. RADIOSHACK CORP: NYSE Moves to Delist Company --------------------------------------------- Tess Stynes, writing for The Wall Street Journal, reported that the New York Stock Exchange said it is moving to delist the stock of RadioShack Corp. and will immediately suspend trading in the struggling consumer-electronics retailer's shares. The NYSE said in a press release dated Feb. 2 the decision to delist RadioShack's stock was made because the retailer doesn't intend to submit a plan to regain compliance with the stock exchange's listing requirements, which include an average market capitalization of at least $50 million over 30 consecutive trading days, or stockholders' equity of at least that amount, the Journal related. Meanwhile, Katie Benner, Jodi Xu Klein, and Lauren Coleman-Lochner, writing for Bloomberg News, reported that Amazon.com Inc., aiming to bolster its brick-and-mortar operations, has discussed acquiring some RadioShack locations after the electronics chain files for bankruptcy, two people with knowledge of the matter said. Amazon has considered using the RadioShack stores as showcases for the Seattle-based company's hardware, as well as potential pickup and drop-off centers for online customers, said one of the people, who asked not to be named because the deliberations are private, the Bloomberg report related. Bloomberg notes that Amazon joins other potential bidders, including Sprint Corp. and the investment group behind Brookstone, in evaluating RadioShack stores, people familiar with the situation said. Richard Collings, writing for The Deal, reported that RadioShack said in a regulatory filing on Feb. 2 it had received a second default notice from Salus Capital Partners LLC, the administrator for the retailer's $250 million term loan facility. According to The Deal, RadioShack said that if it is determined an event of default has occurred, it would create a domino effect, where its $585 million asset-based loan, for which Cantor Fitzgerald is the administrative agent, and its $325 million in 6.75% senior notes, with Wells Fargo Bank NA as the trustee, would both come due. About Radioshack Corporation Fort Worth, Texas-based RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com/-- is a retailer of mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack reported a net loss of $400.2 million in 2013, a net loss of $139 million in 2012, and net income of $72.2 million in 2011. The Company's balance sheet at Aug. 2, 2014, showed $1.14 billion in total assets, $1.21 billion in total liabilities and a $63 million total shareholders' deficit. * * * As reported by the TCR on Sept. 15, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on RadioShack Corp. to 'CCC-' from 'CCC'. "The downgrade comes as the company announced it will seek capital, and that such a transaction could include a debt restructuring in addition to store closures and other measures," said Standard & Poor's credit analyst Charles Pinson-Rose. In the Sept. 16, 2014, edition of the TCR, the TCR reported that Fitch Ratings had downgraded the Long-term Issuer Default Rating (IDR) for RadioShack to 'C' from 'CC'. The downgrade reflects the high likelihood that RadioShack will need to restructure its debt in the next couple of months. The TCR reported on March 13, 2014, that Moody's Investors Service downgraded RadioShack's corporate family rating to 'Caa2' from 'Caa1'. "The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Mickey Chadha, Senior Analyst at Moody's said. RED ROCK: District Court Affirms $934K Award in Suit vs. Suffolk ---------------------------------------------------------------- Judge Eduardo C. Robreno of the U.S. District Court for the Eastern District of Pennsylvania affirms in toto the decision of the Bankruptcy Court in favor of the subcontractor (and Debtor) Red Rock Services Co., LLC in the appellate case captioned Robert H. Holber, Chapter 7 Trustee, of Red Rock Services Co., Inc., Plaintiff-Appellee, v. Suffolk Construction Company, Inc., Defendant-Appellant, Case No. 13-784. Suffolk appealed the Bankruptcy Court's final judgment in the amount of $934,458 (including the initial net award of $799,006 plus the $135,452 adjustment) in favor of Red Rock. Red Rock was a demolitions subcontractor. Suffolk is a construction general contractor. In 2006, Red Rock entered into two subcontracts with Suffolk; these related to two separate projects for which Suffolk was the general contractor. The case arose from a dispute between a general contractor and a subcontractor concerning the subcontractor's performance at two separate construction projects. Because during the course of the dispute -- which has generated myriad factual and legal issues -- Red Rock filed for bankruptcy, the matter was tried before the Bankruptcy Court. On July 24, 2006, Red Rock and Suffolk entered into a subcontract -- Silo Point subcontract -- under which Red Rock would perform demolition work on a construction project located in Baltimore, Maryland -- Silo Point project. The project entailed converting an old grain silo into condominiums. Suffolk, as general contractor, was under contract with the site's owner, Silo Point II, LLC. In July 2007, Red Rock submitted Change Order No. 3, encompassing and superseding the previous two change orders and requesting a contract price increase. Suffolk forwarded Change Order No. 3 on to Owner, who rejected it for its untimeliness and for other reasons. Red Rock filed for bankruptcy on September 13, 2007. On March 18, 2008, Suffolk filed a proof of claim, alleging it was owed substantial damages arising from alleged breach of the two subcontracts. On May 18, 2009, Red Rock then initiated an adversary proceeding against Suffolk, alleging it was owed money by Suffolk for work performed in the two subcontracts. In August 2012, the Bankruptcy Court issued an opinion (1) awarding damages to Red Rock for Suffolk's breach of the Silo Point subcontract, (2) awarding damages to Suffolk for Red Rock's breach of the McCormack subcontract, and (3) allowing General to offset its award against Red Rock's, which resulted in a net recovery to Red Rock. In January 2013, the Bankruptcy Court resolved the attorneys' fees and costs issue, granting a net award to Red Rock in the amount of $799,006 (including $304,707 net damages and $494,299 net attorneys' fees and costs) and entering final judgment. The Bankruptcy Court also granted Red Rock's motion to increase its award on the Silo Point subcontract by $135,452 on the basis of an inadvertent calculation error. The Bankruptcy Court denied Suffolk's motion to subtract overhead and profit from Red Rock's Silo Point subcontract recovery because Suffolk failed to raise the issue prior to judgment and, in the alternative, on the merits. A full-text copy of the Memorandum dated December 8, 2014, is available at http://bit.ly/15q9MCafrom Leagle.com. The Plaintiff-Appellee is represented by: David R. King, Esq. HERRICK FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Telephone: (212) 592-1400 Facsimile: (212) 592-1500 - and - Howard Gershman, Esq. GERSHMAN LAW OFFICES PC Gershman Law Offices, PC 610 York Road, Suite 200 Jenkintown, PA 19046 Telephone: (215) 886-1120 Facsimile: (215) 886-1118 Appellant-Defendant Suffolk Construction Company, Inc., is represented by: John W. DiNicola, II, Esq. DINICOLA SELIGSON & UPTON LLP 185 Devonshire Street, Suite 902 Boston, MA 02110 Telephone: (617) 279-2592 Facsimile: (617) 426-0587 E-mail: Jack.DiNicola@dsu-law.com - and - Scott Aaron Levin, Esq. MCELROY DEUTSCH MULVANEY & CARPENTER LLP 1 Penn Cntr. -Suburban Station 1617 JFK Blvd., Suite 1500 Philadelphia, PA 19103-1815 Telephone: (215) 557-2900 Facsimile: (215) 557-2990/2991 E-mail: slevin@mdmc-law.com Red Rock Services Co., LLC filed a Chapter 7 bankruptcy petition (Bankr. E.D. Pa. Case No. 13-784) on September 13, 2007. Prior to its bankruptcy filing, the Debtor was a demolitions subcontractor. ROBIN GRATHWOL: North Carolina Judge Won't Revive 3 Lawsuits ------------------------------------------------------------ Senior District Judge James C. Fox affirmed the orders dated February 18, 2014, of the U.S. Bankruptcy Court of the Eastern District of North Carolina dismissing three lawsuits commenced by debtor Robin Dale Grathwol. As reported by the Troubled Company Reporter on Feb. 24, 2014, Bankruptcy Judge Stephani W. Humrickhouse dismissed these adversary proceedings filed by, or on behalf of, Grathwol: 1. 13-00023-8-SWH, Robin Dale Grathwol, shareholder of Coastal Carolina Developers, Inc. ("CCD") v. CCD; B. Leon Skinner; BLS Lands, LLC; Walter T. Wilson and Coswald, LLC -- a shareholder derivative action brought by the debtor as one-third owner of CCD to collect damages for malfeasance and breach of fiduciary duty by the remaining shareholders/directors (the "shareholder derivative action" or "AP-23"); 2. 13-00024-8-SWH, Robin Dale Grathwol and Ann F. Grathwol Living Trust v. CCD; Hanover Land, LLC; W and B Investment Co., Inc.; Coswald, LLC; B. Leon Skinner and BLS Lands, LLC, and Walter T. Wilson -- an action for judicial dissolution of certain entities due to malfeasance and wasting of assets by other members (the "dissolution action" or "AP-24"); and 3. 13-00025-8-SWH, Legacy Group of NC, Inc. v. CCD -- an action by the debtor's wholly owned development company to recover for breach of contract to provide certain development entitlements (the "breach of contract action" or "AP-25"). The defendants sought dismissal, asserting a lack of subject matter jurisdiction. A copy of the Bankruptcy Court's Feb. 18, 2014 Order is available at http://is.gd/jMSorXfrom Leagle.com. A copy of the District Court's Jan. 15, 2015 Order is available at http://is.gd/9153tdfrom Leagle.com. Robin Dale Grathwol is as a shareholder of Coastal Carolina Developers, Inc. Grathwol filed a chapter 11 petition (Bankr. E.D.N.C. Case No. 12-00294) on Jan. 13, 2012, and the debtor's plan of reorganization was confirmed on Nov. 26, 2012. ROUNDY'S SUPERMARKETS: Moody's Cuts Corporate Family Rating to B3 ----------------------------------------------------------------- Moody's Investors Service downgraded Roundy's Corporate Family Rating and Probability of Default Rating to B3 from B2 and B3-PD from B2-PD respectively. The ratings outlook was changed to stable from negative. Additionally, Moody's downgraded the rating of the company's $460 million term loan to B2 from B1 and downgraded the rating of the company's $200 million second lien notes to Caa1 from B3. Moody's also assigned Roundy's a speculative grade liquidity rating of SGL-2. "We expect increasing competition in Roundy's core markets to continue to pressure its top line and margins in the next 12 months. This could cause further deterioration in the company's credit metrics which are already weak," Moody's Senior Analyst Mickey Chadha stated. Ratings Rationale The company's B3 Corporate Family Rating reflects its high leverage, small size, geographic concentration, and increasing competition from alternative food retailers which continues to pressure revenue growth and margins. In light of the stiff competition and underperformance of its 27 Rainbow banner stores the company exited the Minneapolis/ St. Paul market in 2014. Roundy's continues to face challenges in its core markets and its same store sales growth continues to lag its peers. Third quarter 2014 same store sales declined 2.7% primarily due to a decline in the number of customer transactions. Moody's expect that continuing competition, sub-par economic growth, and skittish consumers will continue to pressure Roundy's top line and margins in the near to medium term. However, Moody's anticipate the company's expansion into the Chicago market and the closing of some of its underperforming stores coupled with price investments could improve its operating performance in the longer term. Positive rating factors include the company's good regional market identity and increasing presence in the Chicago market with the expansion of the Mariano's banner, as well as the company's good liquidity. The following ratings are downgraded: Corporate Family Rating at B3 from B2 Probability of Default Rating at B3-PD form B2-PD $460 million first lien term loan maturing 2021 at B2 (LGD3) from B1 (LGD3) $200 million Second Lien Notes maturing 2020 at Caa1 (LGD 5) from B3 (LGD5) The following ratings are assigned: Speculative Grade Liquidity Rating at SGL-2 The stable outlook incorporates Moody's expectation that increasing competition in Roundy's core markets could continue to pressure its top line and margins in the next 12 months which could cause further deterioration in the company's credit metrics in the near term. However, Moody' s expects the company's liquidity will remain good, and operating performance including same store sales growth, margins and credit metrics will not deteriorate substantially and will eventually demonstrate measured but sustained improvement in the longer term as the company expands its Mariano's banner and optimizes its store base The ratings could be downgraded if Roundy's liquidity weakens or the company fails to stabilize or improve same store sales and operating performance in the next 12-18 months such that debt/EBITDA does not demonstrate meaningful progress towards 7.0 times (as adjusted by Moody's). Ratings could also be downgraded if EBITA/interest expense is sustained below 1.0 times for an extended period of time. A shift towards an aggressive financial policy could also pressure ratings. While an upgrade in the near to medium term is unlikely, over time the company's ratings could be upgraded if same store sales are positive on a sustained basis, operating margins and credit metrics demonstrate improving trends while it generates positive free cash flow and maintains good liquidity. Quantitatively, an upgrade would require debt/EBITDA to be sustained below 7.0 times and EBITA/interest is sustained above 1.25 times. The principal methodology used in this rating was the Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Roundy's Supermarkets, Inc., headquartered in Milwaukee, Wisconsin, operates 149 retail grocery stores in Wisconsin and Illinois primarily under the Pick 'n Save, Copps, Mariano's, and Metro Market banners. Revenues from continuing operation for the nine months ending September 27, 2014 were $2.8 billion. SABINE OIL: S&P Raises CCR to 'B' & Removes From Watch Positive --------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Sabine Oil & Gas Corp. (formerly known as Forest Oil Corp.) to 'B' (same as the former Sabine LLC) from 'B-' and removed the ratings from CreditWatch, where S&P placed them with positive implications on May 8, 2014, following Sabine LLC's announcement that it would acquire Forest. Sabine LLC's former subsidiaries guarantee Sabine Corp.'s debt. The outlook is negative. In addition, S&P raised its issue rating on Sabine Corp.'s senior secured debt to 'BB-' from 'B+' and on its senior unsecured debt to 'CCC+' (same as Sabine LLC) from 'CCC' and removed them from CreditWatch, where S&P placed them with positive implications on May 8, 2014. The recovery rating on the senior secured debt remains '1' and the recovery rating on the senior unsecured debt remains '6'. S&P is also assigning its 'BB-' senior secured debt rating and '1' recovery rating to Sabine Corp.'s $2 billion secured revolving credit facility with a $1 billion borrowing base. "The upgrade reflects the merger with Sabine LLC and our view that the combined company has an improved business risk due to increased scale," said Standard & Poor's credit analyst Ben Tsocanos. "We assess its business risk as "weak" and its financial risk as "highly leveraged." Sabine Corp. assumed Sabine LLC's debt and its former subsidiaries provide guarantees of Sabine Corp.'s debt." The negative rating outlook reflects Standard & Poor's expectation that Sabine Corp.'s leverage will rise above 5x debt to EBITDA and in 2016, which S&P views as high for the rating. S&P projects that leverage will begin to decline in 2017, reflecting a higher oil price assumption. S&P would consider a downgrade if the company faced material liquidity issues that limited its access to its credit facility or if S&P do not expect leverage to decline after peaking next year. S&P would consider revising the outlook to stable if Sabine Corp. can reduce financial leverage to below 5x debt to EBITDA and above 12% FFO to debt while maintaining adequate liquidity. SARATOGA RESOURCES: Enters Into Forbearance Agreement with Lenders ------------------------------------------------------------------ Saratoga Resources, Inc. on Feb. 2 disclosed that it has entered into (i) a forbearance agreement (the "First Lien Forbearance Agreement") with all of the holders of notes (the "First Lien Notes") in the amount of $54.6 million issued under that certain Indenture dated as of November 22, 2013 (the "First Lien Indenture"), by and among the Company and its subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee (the "First Lien Trustee"); and (ii) a forbearance agreement (the "Second Lien Forbearance Agreement") with 75% or more of the holders of notes (the "Second Lien Notes") in the amount of $125.2 million issued under that certain Indenture dated as of July 12, 2011, as supplemented or amended (the "Second Lien Indenture"), by and among the Company and its subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Second Lien Trustee"). Pursuant to the terms of the First Lien Forbearance Agreement, the holders of the First Lien Notes (the "First Lien Lenders") will forbear from exercising any rights or remedies that the First Lien Lenders or the First Lien Trustee may have against the Company under the First Lien Indenture until the earlier of March 16, 2015 or the occurrence of an event of default within the meaning of the First Lien Forbearance Agreement (the "Forbearance Period"). Under the terms of the First Lien Forbearance Agreement, Saratoga will pay, by February 2, 2015, the accrued and unpaid interest, with interest at the default rate, originally scheduled to be paid on December 31, 2014. The Second Lien Forbearance Agreement is substantially identical to the First Lien Forbearance Agreement except that Saratoga is not required under the Second Lien Forbearance Agreement to pay, during the Forbearance Period, the scheduled January 1, 2015 interest payment. Under the Second Lien Indenture, action by holders of at least 25% in aggregate principal amount of the Second Lien Notes is required to declare the notes due and payable under the Second Lien Indenture. The Second Lien Forbearance Agreement has been executed by holders of more than 75% in principal amount of the Second Lien Notes. Those holders have agreed that they will not take any steps to enforce any rights of the Second Lien Trustee or the Second Lien Lenders during the Forbearance Period. As previously disclosed, the interest payments scheduled to be made on December 31, 2014, with respect to the First Lien Notes, and January 1, 2015, with respect to the Second Lien Notes, were not made on those dates. However, the interest payments are not in default under the applicable indentures until 30 days after the scheduled payment dates. With the steep drop in oil prices over recent months, Saratoga is focused on implementing substantial cost reductions to support operations pending a rebound in prices. Significant cost savings have already been realized through such efforts with further cuts targeted. The Company is focused on working with its lenders to address operational and liquidity concerns with a view to improving profitability and ultimately repaying its outstanding notes. About Saratoga Resources Saratoga Resources -- http://www.saratogaresources.com-- is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover approximately 52,000 gross/net acres, mostly held by production, located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana and in the shallow Gulf of Mexico Shelf. Most of the company's large drilling inventory has multiple pay objectives that range from as shallow as 1,000 feet to the ultra-deep prospects below 20,000 feet in water depths ranging from less than 10 feet to a maximum of approximately 80 feet. SEARS METHODIST: Four Homes Sold to Evergreen for $79.1 Million --------------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that Sears Methodist Retirement System Inc., a nonprofit operator of senior living homes in Texas, got court approval to sell four of its facilities to affiliates of Evergreen Senior Living Properties LLC for a total of $79.1 million. According to the report, at the conclusion of a Jan. 21 auction, Evergreen was deemed the successful bidder for the Wesley Court Methodist Retirement Community in Abilene, Parks Methodist Retirement Community in Odessa, and Craig Retirement Community in Amarillo, by offering to pay $59.1 million for the three facilities. Evergreen was also the successful bidder for the Meadow Lake Retirement Community in Tyler, at $20 million, the report related. About Sears Methodist Sears Methodist Retirement System Inc. provides luxurious residency to seniors. The system includes: (i) eight senior living communities located in Abilene, Amarillo, Lubbock, Odessa and Tyler, Texas; (ii) three veterans homes located in El Paso, McAllen and Big Spring, Texas, managed by Senior Dimensions, Inc., pursuant to contracts between SDI and the Veterans Land Board of Texas; and (iii) Texas Senior Management, Inc. ("TSM"), Senior Living Assurance, Inc. ("SLA") and Southwest Assurance Company, Ltd. ("SWAC"), which provide, as applicable, management and insurance services to the System. Sears Methodist Senior Housing, LLC, is the general partner of, and controls .01% of the interests in, Canyons Senior Living, L.P. ("CSL"). Sears Methodist and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 14-32821) on June 10, 2014. The cases are assigned to Judge Stacey G. Jernigan. The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The Debtors' financial advisor is Alvarez & Marsal Healthcare Industry Group, LLC, while the Debtors' investment banker is Cain Brothers & Company, LLC. The Debtors' notice, claims and solicitation agent is GCG Inc. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Official Committee of Unsecured Creditors is represented by Clifton R. Jessup, Jr., Esq., and Bryan L. Elwood, Esq., at Greenberg Traurig, LLP, in Dallas, Texas. SERVICEMASTER COMPANY: Moody's Hikes Corp. Family Rating to B2 -------------------------------------------------------------- Moody's Investors Service upgraded all of The Servicemaster Company, LLC's credit ratings. The Corporate Family rating ("CFR") was raised to B2 from B3, Probability of Default rating ("PDR") to B2-PD from B3-PD, the senior secured to B1 from B2, the senior unsecured (guaranteed) to B3 from Caa1 and the senior unsecured (not guaranteed) to Caa1 from Caa2. The SGL-2 Speculative Grade Liquidity rating ("SGL") was affirmed. The ratings outlook was revised to positive from stable. On January 16, 2015, ServiceMaster called about $190 million principal amount of its 8% Senior Unsecured Notes due 2020. The source of funds for the repayment, which should occur in February, as well as to pay associated call premiums, fees and expenses, is cash. Upgrades: Issuer: ServiceMaster Company, LLC (The) Corporate Family Rating (Local Currency), Upgraded to B2 from B3 Probability of Default Rating, Upgraded to B2-PD from B3-PD Senior Secured Upgraded to B1 (LGD3) from B2 (LGD3) Senior Unsecured Upgraded to B3 (LGD4) from Caa1 (LGD4) Issuer: ServiceMaster Company (The) (Old) Senior Unsecured Upgraded to Caa1 (LGD6) from Caa2 (LGD6) Issuer: ServiceMaster Company LimitedPartnership(The) Senior Unsecured Upgraded to Caa1 (LGD6) from Caa2 (LGD6) Affirmations: Issuer: ServiceMaster Company, LLC (The) Speculative Grade Liquidity Rating, Affirmed SGL-2 Outlook Revisions: Issuer: ServiceMaster Company, LLC (The) Issuer: ServiceMaster Company (The) (Old) Issuer: ServiceMaster Company LimitedPartnership(The) Outlook, Changed To Positive From Stable Ratings Rationale "New services at Terminix, new customers at AHS and price increases at both should drive sustainable revenue and profit growth and further debt reduction at ServiceMaster, leading to the ratings upgrade and positive ratings outlook," noted Edmond DeForest, Moody's Senior Credit Officer. The upgrade of the CFR to B2 reflects Moody's expectations for at least 5% revenue growth and expanding EBITA margins above 20% that enable leverage reduction through EBITDA growth and debt repayment from about $200 million free cash flow. Moody's anticipates debt to EBITDA will decline below 5 times by the end of 2015. EBITA margins have increased several percent since 2013, driven mostly by price increases that also led to steady mid-single digit revenue growth. The improving business performance provides support for Moody's expectation for revenue growth and profitability expansion to be sustainable. Acquisitions could be about $100 million a year and will compete with debt reduction as a use of free cash flow. Moody's does not expect ServiceMaster to pay dividends or to repurchase its shares. Liquidity from about $150 million of cash (after the announced debt repayment), around $200 million of anticipated free cash flow and about $150 million of revolver availablity is considered good. The positive ratings outlook reflects Moody's expectations for at least 5% revenue growth driven by new products and price increases and about $200 million of free cash flow. The ratings could be lowered if revenue declines due to customer losses or less pricing flexibility at Terminix or AHS, leading Moody's to anticipate debt to EBITDA to remain above 5.5 times, free cash flow below $100 million and diminished liquidity. Shareholder friendly financial policies that lead to increasing financial leverage could also result in a downgrade. The ratings could be raised if revenue and profitability growth continue and the company repays debt such that debt to EBITDA is expected to be sustained below 5 times and retained cash flow to debt will remain above 10%. 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. ServiceMaster is a national provider of termite and pest control, home service contracts, cleaning and disaster restoration, house cleaning, furniture repair and home inspection products and services through company-owned operations and franchise licenses. Brands include: Terminix, American Home Shield (AHS), ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The company is controlled by affiliates of Clayton, Dublier & Rice ("CD&R"), but Moody's anticipates CD&R may sell shares in 2015, thereby leading to public shareholder control. Moody's expects 2015 revenues of about $2.6 billion. SK HOLDCO: S&P Retains 'B+' Rating Over $100MM Notes Add-On ----------------------------------------------------------- Standard & Poor's Ratings Services said its 'B+' issue-level and '2' recovery ratings on U.S.-based SK HoldCo LLC's first-lien revolver due 2019 and first-lien term loan due 2021 and the 'CCC+' issue-level and '6' recovery ratings on the senior unsecured notes due 2022 are unchanged following the company's proposed $100 million add-on to the senior unsecured notes. The company is raising the proposed add-on under the existing indenture. The borrower under the credit facilities and the issuer of the notes is Midas Intermediate Holdco II LLC. The co-issuer of the notes is Midas Intermediate Holdco II Finance Inc. The company plans to use proceeds to repay borrowings under its revolver and add cash to the balance sheet. The 'B' corporate credit rating and stable outlook on SK HoldCo LLC remain unchanged. S&P's 'B' corporate credit rating on SK HoldCo LLC (operating under the brand name Service King Collision Repair Centers) reflects the company's economically resilient business model. However, its aggressive expansion strategy, which entails some integration risk (reflecting consolidation in the market) and its relatively narrow scope, scale, and diversity (the company conducts business only in certain locales in the U.S. and it consists only of collision repair services) work against this resilience somewhat. S&P still believes that the company's track record of integrating acquired repair centers during the past several years demonstrates its ability to move forward with its market consolidation strategy; however, S&P will continue to monitor the consolidated enterprise's performance--particularly with respect to maintaining or improving current gross margins as well as generating positive free operating cash flow (FOCF). S&P's financial risk profile assessment reflects its expectation for leverage to remain over 7x over the next two years, partly offset by the company's favorable working capital position, which enables positive free operating cash flow generation. The stable outlook reflects S&P's view that SK HoldCo will continue to operate at recent gross margin levels or better, allowing the company to generate a small amount of positive FOCF and maintain sufficient liquidity despite its business strategy of growth through acquisitions. S&P could lower the rating within the next 12 months if the company's operating prospects reverse, potentially resulting from integration risks associated with its strategy of growth through debt-funded acquisitions. For instance, S&P could downgrade SK HoldCo if the company is not able to generate positive free cash flow consistently for multiple quarters, thereby adversely affecting liquidity, or if its debt leverage stays over 7.5x. S&P considers an upgrade unlikely during the next 12 months because it believes SK HoldCo's financial risk profile will remain "highly leveraged" under its financial sponsor, based on its large debt burden relative to its size and S&P's general view of the financial sponsors' tolerance for financial risk. RECOVERY ANALYSIS Key analytical factors -- S&P previously completed a recovery analysis and assigned issue-level and recovery ratings on SK Holdco LLC's existing first-lien revolver and term loan and senior unsecured notes. The existing issue-level and recovery ratings remain unchanged following the proposed add-on to the senior unsecured notes. S&P's simulated default scenario envisions a payment default in 2018 as a result of a combination of the following: inability to successfully integrate acquisitions; operational missteps that weaken the company's relationships with key insurance carriers such that it loses its status in the direct repair programs; increased pressure from insurance companies to further reduce the prices of aftermarket and replacement parts; and new regulatory or legal requirements (for example, the National Stolen Passenger Motor Vehicle Information System) that result in increased compliance costs or decreased product demand. -- Other key assumptions include: an increase in LIBOR to 250 bps; a fully drawn $100 million revolving credit facility at default to reflect the possibility of drawdowns for ongoing acquisitions (consistent with historical usage under the revolver); a 100-bps increase in the margin as a result of credit deterioration; and all debt outstanding at default includes six months of accrued interest. Simulated default assumptions -- Year of default: 2018 -- EBITDA at emergence: $80 million -- Implied enterprise value (EV) multiple: 6.0x Simplified waterfall -- Net enterprise value (EV) at emergence: $456 million -- Valuation split in % (obligors/nonobligors): 100%/0% -- Priority claims: $12 million -------------------------------------------- -- Collateral value available to secured creditors: $444 million -- Secured first-lien claims: $501 million -- Recovery expectations: 70%-90% (upper half of range) -- Unsecured claims: $312 million -- Recovery expectations: 0%-10% RATINGS LIST SK HoldCo LLC Corporate Credit Rating B/Stable/-- First-lien term loan and revolver B+ Recovery Rating 2 Senior unsecured notes CCC+ Recovery Rating 6 SLC INN: Wins Confirmation of Bankruptcy Exit Plan -------------------------------------------------- SLC Inn LLC won confirmation of its Plan of Reorganization, dated Dec. 11, 2014. A copy of Bankruptcy Judge William T. Thurman's Findings of Fact and Conclusions of Law dated Jan. 30, 2015, is available at http://is.gd/Eijsx6from Leagle.com. The confirmation hearing was held Jan. 29, 2015 at 2:00 p.m. Blake D. Miller, Esq. -- miller@millertoone.com -- at Miller Toone, P.C. appeared on behalf of the Debtor. David H. Leigh, Esq. -- dleigh@rqn.com -- at Ray Quinney & Nebeker appeared on behalf of Wells Street Capital VII LLC; P. Matthew Cox, Esq. -- pmc@scmlaw.com -- at Snow, Christensen & Martineau, appeared on behalf of Ford Motor Credit Co. LLC; Peter H. Kuhn appeared on behalf of the United States Trustee. No other plans were filed in the case. SLC Inn, LLC, based in Salt Lake City, Utah, filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 14-30634) on Oct. 7, 2014. Hon. William T. Thurman presides over the case. SLC Inn estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Wolter Mehring, authorized representative. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/utb14-30634.pdf SOLYNDRA LLC: June 25 Discovery Cut-Off in Suit v. Suntech et al. ----------------------------------------------------------------- District Judge Saundra Brown Armstrong in Oakland, Calif., signed off on a stipulation and pre-trial order in the lawsuit, THE SOLYNDRA RESIDUAL TRUST, BY AND THROUGH ITS LIQUIDATING TRUSTEE, R. TODD NEILSON, Plaintiff, v. SUNTECH POWER HOLDINGS CO., LTD. ET AL., Defendants, Case No. 12-CV-5272 (SBA) (EDL)(N.D. Cal.). The lawsuit alleges price-fixing of solar panels by a trio of Chinese solar-panel companies. The Solyndra Residual Trust, by and through its Liquidating Trustee, R. Todd Neilson, filed an Amended Complaint on February 14, 2013. The Court issued an Order Denying Defendants' Joint Motion to Dismiss Plaintiff's First Amended Complaint on March 31, 2014. The Court issued its Order for Pretrial Preparation on April 29, 2014, which set deadlines for pretrial discovery in the Solyndra Litigation. Defendant Suntech Power Holdings Co., Ltd. filed a Chapter 15 petition on February 21, 2014, and a recognition order was entered on November 17, 2014, thereby triggering an automatic stay from discovery in the Solyndra Litigation pending resolution of bankruptcy proceedings in the Southern District of New York. In re Suntech Power Holdings Co., Ltd., Case No. 14-10383 (Bankr. S.D.N.Y. 2014). Defendant Suntech America, Inc. filed a petition seeking Chapter 11 relief on January 12, 2015 in Bankruptcy Court for the District of Delaware, thereby staying it from discovery in the Solyndra Litigation. In re Suntech America, Inc., Case No. 15-10054 (Bankr. D. Del. 2015). Solyndra intends to file motions seeking relief from the stays in the Suntech Bankruptcy Proceedings. The Parties, through their counsel, have conferred and agreed to modestly extend the deadlines for pretrial discovery as set out in Judge Armstrong's Pretrial Order. Trina Solar Limited, Trina Solar (U.S.), Inc., Yingli Green Energy Holding Company, Yingli Green Energy Americas, Inc. and Solyndra stipulate and agree that the remaining discovery deadlines in the Solyndra Litigation are: a. Discovery Cut-Off, Except Expert Discovery: 6/25/2015; b. Plaintiff's and Defendant's Expert Designations: 4/30/2015; c. Plaintiff's and Defendant's Expert Rebuttal Disclosures: 5/28/2015; d. Expert Discovery Cut-Off: 6/25/2015; e. Hearing on All Dispositive Motions: on or before August 28, 2015, subject to the Court's availability; f. Mandatory Settlement Conferences: 9/29 -- 10/15/2015; g. Pretrial Conference: December 18, 2015, subject to the Court's availability; h. Pretrial Preparation Due: October 23, 2015; i. Motions in Limine and Objections to Evidence: October 30, 2015; j. Opposition: November 13, 2015; k. Reply: November 20, 2015; and l. Trial: February 5, 2016, subject to the Court's availability. A copy of the Stipulation dated January 21, 2015 is available at http://is.gd/hKXCZwfrom Leagle.com. Attorneys for Solyndra Residual Trust: W. Gordon Dobie, Esq. William C. O'Neil, Esq. Kathryn Wendel Bayer, Esq. WINSTON & STRAWN LLP 35 W. Wacker Drive Chicago, IL 60601-9703 Tel: (312) 558-5600 Fax: (312) 558-5700 E-mail: wdobie@winston.com woneil@winston.com kbayer@winston.com - and - Robert B. Pringle, Esq. Eric E. Sagerman, Esq. WINSTON & STRAWN LLP 101 California Street San Francisco, CA 94111-5840 Tel: (415) 591-1000 Fax: (415) 591-1400 E-mail: rpringle@winston.com esagerman@winston.com About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. The TCR reported on Nov. 12, 2012, Bloomberg News said Solyndra LLC gave formal notice that its reorganization plan was confirmed and substantially consummated. The amended joint Chapter 11 plan became effective Nov. 7, according to a court filing that fixed Jan. 13 as the professional fee bar date and Dec. 7 as the bar for administrative claims. About Suntech Suntech Power Holdings Co., Ltd. (OTC: STPFQ) produces solar products for residential, commercial, industrial, and utility applications. Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. Suntech Power Holdings Co., Ltd., received from the trustee of its 3 percent Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. Suntech Power had involuntary Chapter 7 bankruptcy proceedings initiated against it on Oct. 14, 2013, in U.S. Bankruptcy Court in White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by holders of more than $1.5 million of defaulted securities under a 2008 $575 million indenture. The Chapter 7 Petitioners are Trondheim Capital Partners, L.P., Michael Meixler, Longball Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented by Jay Teitelbaum, Esq., at Teitelbaum & Baskin LLP, in White Plains, New York. Suntech Power on Jan. 31, 2014, disclosed that it has signed a Restructuring Support Agreement relating to the petition for involuntary bankruptcy filed against it under chapter 7 of the U.S. Bankruptcy Code. Under the RSA, the parties agreed that chapter 7 proceedings will be dismissed following recognition of the provisional liquidation proceeding previously filed by the Company in the Cayman Islands under chapter 15 of the U.S. Bankruptcy Code. On Feb. 21, 2014, David Walker and Ian Stokoe, the joint provisional liquidators of Suntech Power Holdings Co., Ltd., appointed by the Grand Court of the Cayman Islands, commenced a Chapter 15 proceeding (Bankr. S.D.N.Y. Case No. 14-10383). The Chapter 15 Petitioners are represented by Jennifer Taylor, Esq., and Diana Perez, Esq., at O'Melveny & Myers LLP. According to the Chapter 15 petition, Suntech has more than $1 billion in both assets and debts. In November 2014, Judge Bernstein issued Findings of Fact and Conclusions of Law granting the petition for Chapter 15 recognition of Suntech Power Holdings's provisional liquidation in the Cayman Islands as a foreign main proceeding. SONDE RESOURCES: Files for Bankruptcy; Appoints FTI as Trustee -------------------------------------------------------------- Sonde Resources Corp. on Feb. 2 disclosed that it has filed a voluntary assignment in bankruptcy pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada). In conjunction with this filing, FTI Consulting Canada Inc. has been appointed as Trustee in Bankruptcy. Since 2012, Sonde has been pursuing alternatives for the Joint Oil Block. Most recently, in March of 2014, Sonde disclosed that it had engaged Taylor-DeJongh, Inc. ("Taylor-DeJongh") to initiate a process to explore and evaluate potential strategic alternatives to enhance shareholder value with regard to the Joint Oil Block. Sonde's Management and Taylor-DeJongh have actively pursued all prospects and options available to the Company to complete a transaction that would satisfy Sonde's significant financial commitments under the Exploration and Production Sharing Agreement ("EPSA") covering the Joint Oil Block but have been unable to secure and consummate such a transaction. Potential investors advised the Company and Taylor-DeJongh that the complexity of the Zarat development, the high inert gas content, the extensive capital needed to advance the Company's development plans and the lack of progress on Tunisian government approval of the Unitization and Unit Plan of Development of the Zarat Field (after over three years of negotiations), coupled with the three exploratory well obligations, were the key deterrents to proceeding with such a transaction. On December 15, 2014 Sonde disclosed that it had executed an Exclusivity and Sale and Purchase Agreement with an arm's length party (the "Exclusivity Agreement"), providing for a 90-day period of exclusivity during which the parties would negotiate in good faith the terms of definitive documentation (Sale and Purchase Agreement and ancillary agreements) to complete the sale of the shares of Sonde North Africa B.V. ("Sonde BV"), the Company's wholly owned subsidiary that is the party to the EPSA (the "Acquisition"). Under the terms of the Exclusivity Agreement the Company was to receive US$2 million (the "Prepayment") of the US$8 million purchase price in two instalments: US$1 million upon the satisfaction of certain conditions relating to transfer of certain assets held by Sonde BV to the purchaser and US$1 million on January 31, 2015. The Company required the Prepayment to fund its expenses in connection with the negotiation of the definitive documentation relating to the Acquisition and for working capital. However, due to objections from Joint Oil, to date, the initial payment of US$1 million of the Prepayment has not been received and the Company has exhausted substantially all of its working capital. In addition, Joint Oil has rejected the request by Sonde to defer the remaining two commitment wells, one of the conditions precedent for the Exclusivity Agreement, and demanded the payment of US$15 million pursuant to the corporate guarantee issued by Sonde in support of the second well commitment under the EPSA. Toufic Nassif, Chief Executive Officer of the Company, stated that "We at Sonde are extremely disappointed that this latest rejection by Joint Oil, under the watch of the Tunisian authorities, was apparently done with total disregard to the critical importance of the US$ 1.6 billion Zarat Development to the Tunisian economy and to satisfying the immediate natural gas needs of Tunisia. Furthermore, we believe this rejection was made with the full knowledge of Joint Oil and the Tunisian authorities that it would lead to the insolvency of Sonde, despite the extensive investments made by Sonde over the past five years. These investments include the drilling of the Zarat North - 1 well, two alternative pre-front-end engineering design development plans for the Zarat Field, the acquisition, processing and the evaluation of more than 900 sq. km. of 3D seismic in both Tunisian and Libyan waters and the well planning and purchase of long lead materials for the Fisal exploratory well. All of these investments clearly demonstrated Sonde's dedication and commitment to the natural resource sector in Tunisia and the entire Joint Oil Block. Since January 2012, Sonde has actively sought partners that could meet the substantial financial and technical commitments of the Joint Oil Block. On more than one occasion we have presented potential transaction partners (including one with whom we signed a farmout letter of intent in May 2014) only to be frustrated by Joint Oil." As a consequence of these circumstances, the Board of Directors of Sonde authorized the bankruptcy filing as Sonde is unable to meet its financial commitments under the EPSA and otherwise, and it has now exhausted substantially all of its working capital. The Company also disclosed that all of the officers and directors of the Company have resigned and that the Company will remain suspended from trading pursuant to the policies of the TSX Venture Exchange. Any inquiries with respect to the Company or its assets can be made to FTI Consulting Canada Inc., Attention: Brett Wilson, direct: +1 403.470.4054 email: Brett.Wilson@fticonsulting.com Sonde Resources Corp. -- http://www.sonderesources.com/-- is a Canada-based energy company engaged in the exploration and production of oil and natural gas. The Company has operations in North Africa and Western Canada. Sonde is actively engaged in exploration and development of oil and gas resources throughout the Joint Oil Block in offshore Tunisia and Libya. The Company's key activities include development of the Zarat Field, a three-well exploration program, and a large3D seismic acquisition and processing program. On December 31, 2013 the Company completed the disposition of substantially all of its Western Canadian assets to Marquee Energy Ltd., including all of Sonde's reserves. STATE FISH: Court Issues Joint Administration Order --------------------------------------------------- Judge Sandra R. Klein of the U.S. Bankruptcy Court Central District of California, Los Angeles Division, issued an order directing the joint administration of the Chapter 11 cases of State Fish Co., Inc., and Calpack Foods, LLC, under the lead case no. 15-11084. State Fish Co., Inc., and Calpack Foods, LLC, filed voluntary Chapter 11 bankruptcy petitions (C.D. Cal. Lead Case No. 15-11084) on Jan. 26, 2015. The petitions were signed by George P. Blanco as authorized representative. The Hon. Sandra R. Klein presides over the jointly administered cases. Amir Gamliel, Esq., and Alan D Smith, Esq., at Perkins Coie LLP, serve as the Debtors' counsel. George Blanco, at Avant Advisory Group, acts as chief restructuring officer. State Fish estimated assets and liabilities of $10 million to $50 million. State Fish, founded in 1932, formed Calpack in April 2012 to produce food and beverage products. Calpack operates in conjunction with State Fish's High Pressure Pasteurization Food Service division. SUNTECH POWER: June 25 Discovery Cut-Off in Solyndra Suit --------------------------------------------------------- District Judge Saundra Brown Armstrong in Oakland, Calif., signed off on a stipulation and pre-trial order in the lawsuit, THE SOLYNDRA RESIDUAL TRUST, BY AND THROUGH ITS LIQUIDATING TRUSTEE, R. TODD NEILSON, Plaintiff, v. SUNTECH POWER HOLDINGS CO., LTD. ET AL., Defendants, Case No. 12-CV-5272 (SBA) (EDL)(N.D. Cal.). The lawsuit alleges price-fixing of solar panels by a trio of Chinese solar-panel companies. The Solyndra Residual Trust, by and through its Liquidating Trustee, R. Todd Neilson, filed an Amended Complaint on February 14, 2013. The Court issued an Order Denying Defendants' Joint Motion to Dismiss Plaintiff's First Amended Complaint on March 31, 2014. The Court issued its Order for Pretrial Preparation on April 29, 2014, which set deadlines for pretrial discovery in the Solyndra Litigation. Defendant Suntech Power Holdings Co., Ltd. filed a Chapter 15 petition on Feb. 21, 2014, and a recognition order was entered on Nov. 17, 2014, thereby triggering an automatic stay from discovery in the Solyndra Litigation pending resolution of bankruptcy proceedings in the Southern District of New York. In re Suntech Power Holdings Co., Ltd., Case No. 14-10383 (Bankr. S.D.N.Y. 2014). Defendant Suntech America, Inc. filed a petition seeking Chapter 11 relief on January 12, 2015 in Bankruptcy Court for the District of Delaware, thereby staying it from discovery in the Solyndra Litigation. In re Suntech America, Inc., Case No. 15-10054 (Bankr. D. Del. 2015). Solyndra intends to file motions seeking relief from the stays in the Suntech Bankruptcy Proceedings. The Parties, through their counsel, have conferred and agreed to modestly extend the deadlines for pretrial discovery as set out in Judge Armstrong's Pretrial Order. Trina Solar Limited, Trina Solar (U.S.), Inc., Yingli Green Energy Holding Company, Yingli Green Energy Americas, Inc. and Solyndra stipulate and agree that the remaining discovery deadlines in the Solyndra Litigation are: a. Discovery Cut-Off, Except Expert Discovery: 6/25/2015; b. Plaintiff's and Defendant's Expert Designations: 4/30/2015; c. Plaintiff's and Defendant's Expert Rebuttal Disclosures: 5/28/2015; d. Expert Discovery Cut-Off: 6/25/2015; e. Hearing on All Dispositive Motions: on or before August 28, 2015, subject to the Court's availability; f. Mandatory Settlement Conferences: 9/29 -- 10/15/2015; g. Pretrial Conference: December 18, 2015, subject to the Court's availability; h. Pretrial Preparation Due: October 23, 2015; i. Motions in Limine and Objections to Evidence: October 30, 2015; j. Opposition: November 13, 2015; k. Reply: November 20, 2015; and l. Trial: February 5, 2016, subject to the Court's availability. A copy of the Stipulation dated January 21, 2015 is available at http://is.gd/hKXCZwfrom Leagle.com. Attorneys for Solyndra Residual Trust: W. Gordon Dobie, Esq. William C. O'Neil, Esq. Kathryn Wendel Bayer, Esq. WINSTON & STRAWN LLP 35 W. Wacker Drive Chicago, IL 60601-9703 Tel: (312) 558-5600 Fax: (312) 558-5700 E-mail: wdobie@winston.com woneil@winston.com kbayer@winston.com - and - Robert B. Pringle, Esq. Eric E. Sagerman, Esq. WINSTON & STRAWN LLP 101 California Street San Francisco, CA 94111-5840 Tel: (415) 591-1000 Fax: (415) 591-1400 E-mail: rpringle@winston.com esagerman@winston.com About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. The TCR reported on Nov. 12, 2012, Bloomberg News said Solyndra LLC gave formal notice that its reorganization plan was confirmed and substantially consummated. The amended joint Chapter 11 plan became effective Nov. 7, according to a court filing that fixed Jan. 13 as the professional fee bar date and Dec. 7 as the bar for administrative claims. About Suntech Suntech Power Holdings Co., Ltd. (OTC: STPFQ) produces solar products for residential, commercial, industrial, and utility applications. Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. Suntech Power Holdings Co., Ltd., received from the trustee of its 3 percent Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. Suntech Power had involuntary Chapter 7 bankruptcy proceedings initiated against it on Oct. 14, 2013, in U.S. Bankruptcy Court in White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by holders of more than $1.5 million of defaulted securities under a 2008 $575 million indenture. The Chapter 7 Petitioners are Trondheim Capital Partners, L.P., Michael Meixler, Longball Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented by Jay Teitelbaum, Esq., at Teitelbaum & Baskin LLP, in White Plains, New York. Suntech Power on Jan. 31, 2014, disclosed that it has signed a Restructuring Support Agreement relating to the petition for involuntary bankruptcy filed against it under chapter 7 of the U.S. Bankruptcy Code. Under the RSA, the parties agreed that chapter 7 proceedings will be dismissed following recognition of the provisional liquidation proceeding previously filed by the Company in the Cayman Islands under chapter 15 of the U.S. Bankruptcy Code. On Feb. 21, 2014, David Walker and Ian Stokoe, the joint provisional liquidators of Suntech Power Holdings Co., Ltd., appointed by the Grand Court of the Cayman Islands, commenced a Chapter 15 proceeding (Bankr. S.D.N.Y. Case No. 14-10383). The Chapter 15 Petitioners are represented by Jennifer Taylor, Esq., and Diana Perez, Esq., at O'Melveny & Myers LLP. According to the Chapter 15 petition, Suntech has more than $1 billion in both assets and debts. In November 2014, Judge Bernstein issued Findings of Fact and Conclusions of Law granting the petition for Chapter 15 recognition of Suntech Power Holdings's provisional liquidation in the Cayman Islands as a foreign main proceeding. SWEPORTS LTD: Ill. Court Throws Out Suit Against Appraisal Firm --------------------------------------------------------------- District Judge Sharon Johnson Coleman in Chicago dismissed a lawsuit filed by UMF Corporation and its majority owner Sweports, Ltd, against an independent appraisal company, AccuVal Associates, Inc., and Cameron Cook, the firm's senior manager. The lawsuit is ancillary to a prolonged legal dispute between UMF and Sweports, on one side, and a group of aggrieved shareholders and financers, on the other side. UMF manufactures cleaning products, and Sweports owns a majority of the company's stock and various patents licensed to UMF. In 2006, the UMF companies brokered a complex financing deal with a group of outside investors. As part of the deal, Sweports issued stock to the investors, and two of the investors joined Sweports's board. The deal, however, went awry, and Sweports terminated the investors' stock. This dispute has resulted in prolonged and ongoing litigation between the UMF companies and the investors. In the course of this dispute, the UMF companies retained AccuVal to provide independent valuation of UMF. Under the terms of the agreement, UMF would provide AccuVal with financial data and AccuVal would base its valuation on this data without verifying the accuracy of it. In October 2007, AccuVal delivered its appraisal report to UMF, valuing the company at $103,800,000. The UMF companies acknowledge that "AccuVal fully performed its engagement." In 2007, the investors sued Sweports in state court over the termination of their stock. The trial court entered summary judgment for the investors, and the case proceeded to a jury trial on damages only. The investors subpoenaed AccuVal and ultimately Cook testified about AccuVal's work for UMF, and the UMF companies maintain that he did so voluntarily and over their objections. A jury awarded $1.265 million for the investors. On April 28, 2014, the Illinois Appellate Court reversed the judgment in part and remanded for a new trial on the issue of liability. In October 2013, prior to the Illinois Appellate Court reversal of the judgment, UMF sued the defendants in state court alleging that AccuVal and Cook breached their fiduciary duty to UMF and conspired with the investors. The UMF companies allege that AccuVal and Cook are liable based on Cook's in-court testimony. The defendants removed the case to federal court, and the court granted Sweports's motion to intervene. The UMF companies' amended complaint raises claims against each defendant for breach of fiduciary duty, indemnification, and conspiracy. The defendants moved to dismiss the case. According to Judge Coleman, the UMF companies' claims against AccuVal and Cook fail on multiple grounds. UMF CORPORATION and SWEPORTS, LTD., Plaintiffs, v. ACCUVAL ASSOCIATES, INC., and CAMERON COOK, Senior Manager of AccuVal Associates, Inc., Defendants, No. 13-CV-8994 (N.D. Ill.). A copy of Judge Coleman's January 20, 2015 Memorandum Opinion and Order is available at http://is.gd/t4ioThfrom Leagle.com. UMF and Sweports are represented by: Robert W. Queeney, Esq. 131 South Dearborn Street, 30th Floor Chicago, IL 60603 Tel: 312-263-3600 AccuVal and Cook are represented by: Mark Dennis Malloy, Esq. MEISSNER TIERNEY FISHER & NICHOLS, S.C. 111 East Kilbourn Avenue, 19th Floor Milwaukee, WI 53202 Tel: 414-273-1300 Fax: 414-273-5840 E-mail: mdm@mtfn.com About Sweports Sweports, Ltd., owns patents and a subsidiary called UMF Corporation that manufactures antimicrobial cleaning products; UMF apparently is Sweports' principal asset. An involuntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-14254) was filed against Sweports, Ltd., based in Skokie, Illinois, on April 9, 2012. Sweports, Ltd., is represented by Ariel Weissberg at Weissberg & Associates, Ltd. The creditors who signed the involuntary petition are Michael J. O'Rourke, Michael C. Moody and John A. Dore, judgment creditors who assert they are each owed $345,000. Neal L. Wolf, Esq., at Neal Wolf & Associates, LLC, represents the petitioning creditors. On Nov. 21, 2012, the Court entered an Order for Relief in the case. Since then, Sweports has been managing its assets as a debtor-in- possession. Judge A. Benjamin Goldgar is presiding over the case. On Dec. 12, 2012, the Office of the United States Trustee for the Northern District of Illinois appointed these creditors to serve on the Committee: Lee N. Abrams, John A. Dore, Michael C. Moody, Michael O'Rourke and Perkaus & Farley, LLC. Mr. Moody is the Chairperson. The Committee retained Neal Wolf & Associates, LLC, as counsel. Both Sweports and the Official Committee filed plans of reorganization. The bankruptcy judge rejected both plans. The U.S. Trustee then moved that Sweports' bankruptcy either be converted from Chapter 11 to Chapter 7 (liquidation) or dismissed. Neither Sweports nor the creditors favored conversion, and so the bankruptcy judge dismissed the bankruptcy on April 30, 2014. TARGUS GROUP: Moody's Lowers Corporate Family Rating to Caa2 ------------------------------------------------------------ Moody's Investors Service downgraded Targus Group International, Inc.'s Corporate Family and Probability of Default ratings (CFR and PDR respectively) to Caa2 and Caa2-PD, respectively, from Caa1 and Caa1-PD. Moody's also downgraded the company's secured term loan rating to Caa2 from Caa1. The outlook was changed to negative. Subsequent to these rating actions, Moody's will withdraw all ratings because it believes it has insufficient information to support the maintenance of the ratings. Moody's has not received Targus' audited financial statements for fiscal year ending September 30, 2014, and does not expect to receive financial information from the company going forward. The downgrade reflects Targus' approaching maturities and heightened probability of near-term debt restructuring. Moody's believes the company has an unsustainable capital structure with leverage in the high-7 times range as of June 30, 2014 (inclusive of PIK notes, or 6 times through the ABL and term loan) in the context of continued EBITDA declines, secular challenges in the core laptop case business and intense competition in the tablet case segment. This leverage estimate adds back items that Moody's considers non-recurring but does not include Moody's lease adjustment. Furthermore, Targus faces near term debt maturities - its ABL and term loan are due in February and May 2016, respectively - and may also violate term loan covenants in the coming quarters considering its less than 10% cushion currently and contractual covenant tightening. The company generates modestly positive free cash flow after mandatory term loan amortization, and had less than $15 million of cash balances as of June 30, 2014, the majority of which is in foreign jurisdictions and not readily accessible. In the event of a restructuring, Moody's expects greater than 50% recovery on the term loan, as the PIK HoldCo holders will bear some of the impairment. Moody's also notes that the majority of the estimated $55 million PIK HoldCo notes is held by shareholders. In August 2013, Targus amended its term loan covenants in exchange for 1% PIK interest and higher mandatory prepayments. The company previously restructured its balance sheet in 2009 by converting its former second lien term loan and Holdco debt (a combined $125 million amount) into equity and new HoldCo PIK notes. Rating actions: Issuer: Targus Group International, Inc. Corporate Family Rating, downgraded to Caa2 from Caa1 Probability of Default Rating, downgraded to Caa2-PD from Caa1-PD $185 million senior secured term loan due May 2016, downgraded to Caa2 (LGD4) from Caa1 (LGD4) Negative outlook Ratings Rationale The Caa2 Corporate Family Rating reflects the heightened probability of near-term debt restructuring, given Targus' leverage of high-7 times debt/EBITDA as of June 30, 2014 (inclusive of PIK notes), secular changes to its business model, and weak overall liquidity profile, including approaching 2016 maturities, likely covenant violations, and limited revolver availability. The negative outlook reflects the company's approaching maturities and Moody's expectations for continued weak performance. The principal methodology used in these ratings was Consumer Durables Industry published in September 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. Targus Group International, Inc., based in Anaheim, California, designs, develops, and sells cases and accessories for mobile electronic devices, including laptop computers, tablets and smart phones. The company sells its products to original equipment manufacturers, third-party distributors, and retailers in over 100 countries. Revenues were about $466 million for the twelve months ended June 30, 2014. Targus is privately owned by a syndicate of financial institutions. TKS LEASING: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------- Debtor: TKS Leasing, LLC 20500 Alameda St. Carson, CA 90810 Case No.: 15-11544 Chapter 11 Petition Date: February 2, 2015 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: David L. Neale, Esq. LEVENE NEALE BENDER RANKIN & BRILL LLP 10250 Constellation Blvd Ste 1700 Los Angeles, CA 90067 Tel: 310-229-1234 Fax: 310-229-1244 Email: dln@lnbrb.com Total Assets: $1.2 million Total Liabilities: $7.1 million The petition was signed by Gary Mooney, president and chief executive officer. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-11544.pdf TRUMP ENTERTAINMENT: Icahn Responds to Picketing Taj Mahal Workers ------------------------------------------------------------------ Sara Randazzo, writing for The Wall Street Journal, reported that in a letter posted to his Web site, Carl Icahn argues that he's "not fighting against the employees" of the Taj Mahal, who had their medical and pension benefits cut as part of the beleaguered casino's bankruptcy. Instead, Mr. Icahn says, "I am fighting for those employees -- fighting to save their jobs in the midst of a wholly unstable crisis," the report related. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to shutter its casinos. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, 2014, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $286 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 Official Committee of Unsecured Creditors 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. TS EMPLOYMENT: Enter Ch. 11 Amid $100M Debt to IRS -------------------------------------------------- Payroll services provider TS Employment, Inc., entered bankruptcy protection although it says it intends to continue operations and propose a reorganization plan. Robert Cassera, president of the Debtor, explains that recently, it was discovered that the Debtor failed to make certain payroll tax deposits to the Internal Revenue Service. The precise amount of unpaid withholding tax deposits is still being determined but could be as high as $100 million. This chapter 11 case was filed for the primary purpose of stabilizing the Debtor's business operations, so that its becoming aware of this potential significant tax liability does not jeopardize its ability to perform its PEO services to Corporate Resource Services, Inc. ("CRS"). Also further to that goal, the Debtor after consultation with CRS' senior management and its lender has selected Barry Kasoff as a chief restructuring officer. Separate applications to retain Mr. Kasoff's firm, Realization Services Inc., as a consultant, and Barry Kasoff, as a chief restructuring officer, will be filed with the Bankruptcy Court. The Debtor has unpaid prepetition payroll obligations in the sum of approximately $14 million. The Debtor's assets consist primarily of cash and accounts receivable. During the next 30 days the Debtor expects to receive $60 million from CRS, which will be utilized to meet its accrued and on-going payroll obligations (including wages and corresponding tax amounts). CRS has demanded, and the Debtor intends to provide, a detailed accounting of all amounts paid by CRS to the Debtor for payroll obligations and of all amounts paid by the Debtor to satisfy those payroll obligations, to ensure CRS, its lender, and its customers that the PEO services provided by the Debtor will continue uninterrupted in the ordinary course of business. The Debtor intends to continue in the operation of its business in the ordinary course, and to propose a plan of reorganization which treats all creditors in a fair and equitable manner consistent with the provisions of the Bankruptcy Code. The Debtor on the Petition Date filed motions to: -- pay prepetition wages and salaries; -- use its existing bank accounts; and -- enter into an agreement with Realization Services, Inc., as consultant. About TS Employment Based in New York, TS Employment Inc. is a professional employer organization (a "PEO") that provides payroll-related services. Its only customer is publicly held Corporate Resource Services, Inc., a diversified technology, staffing, recruiting, and consulting services firm. TS processes payroll of up to 30,000 employees. TS Employment sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10243) in Manhattan on Feb. 2, 2015. Judge Martin Glenn is assigned to the case. The Debtor estimated at least $100 million in assets and debt. The Debtor tapped Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York, as counsel. The Debtor's Chapter 11 plan and disclosure statement are due June 2, 2015. The initial case conference is due by March 4, 2015. TS EMPLOYMENT: Realization Services' Kasoff to Serve as CRO ----------------------------------------------------------- TS Employment, Inc., asks the Bankruptcy Court to enter an order approving effective as of Jan. 31, 2015, (i) a consulting agreement under which Realization Services, Inc., has agreed to provide certain services, and (ii) the retention of Realization's Barry Kasoff to serve as chief restructuring officer. As of the Petition Date, the Debtor had no chief financial officer, among other important officer positions. The Debtor has determined, in the exercise of its business judgment that it needs a consultant and CRO at this time with specific experience in distressed business, especially professional employer organizations and the staffing industry. The Debtor has agreed to compensate Realization for Kasoff's professional services at the rate of $35,000 per week, plus reimbursement of normal, reasonable out-of-pocket operating and travel expenses. Under the Consulting Agreement, the Debtor was required to pay a retainer in the amount of $150,000. Aside from Kasoff's weekly fees, any other professional of Realization providing services to the Debtor on a full time basis will require a $25,000 payment per week per person. To the best of the Debtor's knowledge, Realization and Mr. Kasoff are each a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm may be reached at: Barry L Kasoff, CTP President Realization Services Inc 124 Davids Hill Rd Bedford Hills, NY 10507-2522 USA Tel: (914) 234-6155 Fax: (914) 234-6424 E-mail: moc.secivresnoitazilaer@ffosakb About TS Employment Based in New York, TS Employment Inc. is a professional employer organization -- PEO -- that provides payroll-related services. Its only customer is publicly held Corporate Resource Services, Inc., a diversified technology, staffing, recruiting, and consulting services firm. TS processes payroll of up to 30,000 employees. TS Employment sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10243) in Manhattan on Feb. 2, 2015. Judge Martin Glenn is assigned to the case. The Debtor estimated at least $100 million in assets and debt. The Debtor tapped Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York, as counsel. The Debtor's Chapter 11 plan and disclosure statement are due June 2, 2015. The initial case conference is due by March 4, 2015. USA BABY: Labor Dept. Wins Summary Judgment in ERISA Suit --------------------------------------------------------- The Secretary of the U.S. Department of Labor sued Scott Wallis, Ronald Eriksen, USA Baby, Inc., USA Baby, Inc. 401(k) Plan, and USA Baby, Inc. Health Plan for violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001 et seq. In a December 30, 2014 Memorandum Opinion and Order available at http://is.gd/4R3Xdlfrom Leagle.com, Chief District Judge Ruben Castillo granted the Secretary's separate motions seeking summary judgment against Wallis and Eriksen. In its summary judgment motion, the Secretary seeks a permanent injunction preventing the Defendants from serving as fiduciaries to any ERISA-covered employee benefit plan now or in the future. The Secretary also seeks monetary damages from Defendants representing losses to the benefit plans. The Defendants opposed. The case is, THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. SCOTT WALLIS, et al., Defendants, NO. 11 C 3019 (N.D. Ill.). About USA Baby Based in Lombard, Illinois, USA Baby Inc. sold infant and children's furniture. USA Baby was formed in 2003 to franchise stores selling furniture and other products for babies and children. It operated no stores of its own. On Sept. 5, 2008, three creditors, Wallis Kraham of Binghamton, N.Y., Jack B. Whisler of Arlington Heights, Ill., and Leslie Ruess of San Diego, filed an involuntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 08-23564), claiming breach of subscription agreement and seeking $122,875 in the aggregate. Abraham Brustein, Esq., at Dimonte & Lizak, LLC, represented Wallis Kraham, one of the petitioning creditors. The bankruptcy court entered an order for relief, leaving USA Baby in possession of the bankruptcy estate, but the corporation did not file the required bankruptcy schedules or statements. A group of franchisees, citing that failure and alleging a history of prepetition mismanagement by Scott Wallis, the company's president and a 5% stockholder, asked the bankruptcy court to appoint a trustee and convert the case to Chapter 7. While those motions were pending, the company filed a statement of affairs and the required schedules. The bankruptcy court appointed Barry Chatz as trustee but denied the franchisees' motion for conversion to Chapter 7. Days later, though, Mr. Chatz filed his own motion for conversion, citing lack of funding. The bankruptcy court converted the case but also allowed Mr. Chatz to continue operations for a limited time. In May 2009, Commerce Capital LP was granted relief from the automatic bankruptcy stay to foreclose on a lien against USA Baby's assets. On July 6, 2009, Commerce Capital conducted a foreclosure sale of the assets, which included USA Baby's trademarks and franchise agreements, and through credit bidding, purchased the assets itself for $1 million. On Nov. 18, 2009, Commerce Capital brought a claim against a franchisee group, the United Storeowners Association of Baby Stores, LLC, for unauthorized use of intellectual property formerly belonging to USA Baby and currently belonging to Commerce Capital. Commerce Capital subsequently settled a number of claims against the franchisees regarding the trademarks and franchise agreements. VERESEN MIDSTREAM: Moody's Assigns Ba3 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service, assigned a Ba3 Corporate Family Rating (CFR) and a B1-PD Probability of Default Rating to Veresen Midstream Limited Partnership (VMLP). Moody's also assigned a Ba3 rating to its proposed US$600 million senior secured term loan B, C$75 senior secured revolving credit facility and C$1.3 billion senior secured bank loan expansion facility. Moody's also gave VMLP a SGL-3 Speculative Grade Liquidity Rating. The rating outlook is stable. This is the first time that Moody's has rated VMLP. The proceeds of the US$600 million term loan will be used to partially finance the C$720 million acquisition of the Dawson assets from Encana Corporation (Encana, Baa2 stable). The C$1.3 billion expansion facility will be used to fund growth capital expenditures. Assignments: Issuer: Veresen Midstream Limited Partnership Probability of Default Rating, Assigned B1-PD Speculative Grade Liquidity Rating, SGL-3 Corporate Family Rating, Assigned Ba3 Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3) Ratings Rationale VMLP's Ba3 corporate family rating primarily reflects natural gas throughput volume risk on a key contract (Dawson), lack of operating history for VMLP, high leverage (9x) which could increase with cost overruns on the construction of Dawson assets, and the complexity of its contracts, somewhat offset by the close involvement of Encana in all aspects of VMLP's business. Moody's believe the Cutbank Ridge Partnership (CRP, a joint venture partnership between Encana and Mitsubishi Corporation (Mitsubishi, A1 negative)) is likely to continue developing resources to be processed by VMLP, as Mitsubishi is carrying Encana's development costs until approximately 2019. In the event the Dawson asset is not sufficiently used, CRP does provide strong contractual protection mitigating this risk. As well, VMLP's 17 year contract with Encana on Hythe/Steeprock has no volume or price risk, and CRP will construct the Dawson assets and operate most of VMLP's assets in the Dawson area. The SGL-3 reflects adequate liquidity through 2015. Pro forma for the January 2015 US$600 million term loan, VMLP will have negligible cash and full availability under both its C$1.3 billion senior secured expansion credit facility and its C$75 million senior secured revolving credit facility. Moody's expect negative free cash flow of about C$800 million for 2015 to be funded with equity from its two owners and drawings on the expansion facility. Moody's expect VMLP to be in compliance with its two financial covenants through this period. VMLP has no alternate sources of liquidity as it has pledged all of its assets to the secured lenders under the term loan, revolver, and expansion facility. Under Moody's Loss Given Default (LGD) Methodology, the pari-passu US$600 million term loan B, C$75 revolving credit facility and C$1.3 billion expansion facility are rated Ba3, same as the CFR as all pieces of debt have a first priority lien over all assets under one agreement. The outlook is stable based on the expected sustainability of VMLP's cash flow stream through the take-or-pay contract and Moody's expectation that leverage will decrease once the Dawson assets are constructed and operating. The rating could be upgraded if VMLP can increase it size and scale while decreasing leverage towards 6x as EBITDA is generated from the Dawson growth capex spend. The ratings for VMLP could be downgraded if the debt service coverage ratio falls below 1.25x, or if there are material construction cost overruns leading to debt to EBITDA above 10x. VMLP is a newly formed private midstream energy company. VMLP is 50%-owned by Veresen Inc. (Veresen, unrated) and Kohlberg Kravis Roberts & Co. L.P.(KKR), a private equity firm. VMLP will be engaged in natural gas gathering, field compression and processing in the central Montney in British Columbia. The principal methodology used in these ratings was Global Midstream Energy published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. VESTCOM INT'L: Foxfire Deal No Impact on Moody's B2 CFR ------------------------------------------------------- Moody's Investors Service says the announced plan of Vestcom International, Inc. (Vestcom) to acquire FoxFire Printing and Packaging, Inc. (Foxfire) does not impact Vestcom's B2 Corporate Family Rating (CFR), the B1 rating on its first lien credit facility, or the Caa1 rating on its second lien term loan. Vestcom provides shelf-edge communications and specialized marketing services to the retail industry. It maintains headquarters in Little Rock, Arkansas. Court Square Capital Partners acquired the company from the Stephens Group and Lake Capital in December 2012. Foxfire provides integrated business-to-business solutions in the areas of printing, shelf-edge marketing, data management and fulfillment to retailers, manufacturers and direct. Its headquarters are in Newark, Delaware. WESTERN REFINING: Moody's Assigns B3 Rating on $300MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Western Refining Logistics, LP (WNRL), including a B1 Corporate Family Rating (CFR), a B3 rating to its proposed offering of $300 million senior unsecured notes due 2023 and a SGL-3 Speculative Grade Liquidity Rating. These notes are co-issued by WNRL Finance Corp. The proceeds from the proposed notes offering will be primarily used to repay borrowings under its revolving credit facility, which was drawn last October to fund a drop-down acquisition of the Wholesale Fuels and Crude Trucking businesses from its parent company, Western Refining, Inc. (WNR, B1 stable). The rating outlook is stable. "Western Refining Logistics' ratings reflect its strategic importance to its parent company and general partner (GP) interest owner, Western Refining, as well as its contracted, fee-based revenues with WNR supported by minimum volume commitments over a long-term time horizon," commented Amol Joshi, Moody's Vice President. "Despite its small scale, Western Refining Logistics has foreseeable growth plans through future drop-downs of logistics assets owned by its parent." Rating Assignments: $300 Million Senior Unsecured Notes due 2023, Rated B3 (LGD 5) Corporate Family Rating of B1 Probability of Default Rating of B1-PD Speculative Grade Liquidity rating of SGL-3 Ratings Rationale Moody's views WNRL's stand-alone credit profile as more consistent with a B2 CFR, reflecting its stable cash flows from long-term, fee-based contracts with minimum volume commitments, and its potential growth trajectory, but restrained by its small scale of operations with limited third-party revenue, short track record as an MLP with its portfolio of assets, and high distributions associated with its MLP structure. The assigned B1 CFR reflects a one-notch uplift due to its strategic importance to WNR, as the MLP will provide WNR with critical infrastructure and a coordinated growth strategy. Additionally, WNR's support is reflected in its 66% ownership stake and the indirectly held non-economic general partner (GP) interest, in WNRL. The B3 rating assigned to the proposed senior unsecured notes reflects both the overall probability of default of the company, to which Moody's assigns a Probability of Default Rating of B1-PD, and a loss given default of LGD5. The proposed notes are rated two notches below the B1 CFR, reflecting the contractual subordination of the notes to WNRL's $300 million revolving credit facility. The credit facility is secured by substantially all of WNRL's assets. WNR currently owns other logistics assets in its portfolio that could eventually be dropped down into the MLP going forward. These drop-downs would increase the diversity and scale of WNRL's midstream asset portfolio. However, any future rating action would consider how these drop-down or third-party acquisitions are financed, as well as how affiliate and third-party revenue contracts are structured. WNRL's SGL-3 liquidity rating reflects the expectation for adequate liquidity through 2015. Pro forma for the proposed notes offering and the drop-down acquisition as of September 30, 2014, the company will have full availability under its undrawn $300 million revolving bank credit facility and a cash balance of roughly $53 million. The revolving credit facility matures in October 2018 and is secured by substantially all of WNRL's assets. It includes covenants of EBITDA / Interest Charges of no less than 2.5x, Total Debt / EBITDA of no greater than 4.5x, and Secured Debt / EBITDA of no greater than 3.5x. Pro forma for the notes offering, Moody's estimates sufficient EBITDA headroom to maintain covenant compliance at current debt levels. However, the funding of future acquisitions will require capital market access and could result in tightened covenant headroom. Moody's believes that the company will need to finance its future acquisitions with a commensurate portion of equity. The stable rating outlook assumes that WNRL will finance future material acquisitions with a meaningful portion of equity, maintain adequate distribution coverage (over 1.1x) and leverage under 4x. WNRL's ratings could be upgraded if the company is able to increase in size and scale while maintaining reasonable leverage (EBITDA exceeding $200 million, debt/EBITDA below 4x and plant property & equipment exceeding $500 million on a sustained basis). However, if third-party EBITDA remains limited, WNRL's rating will be capped by WNR's rating. WNRL's ratings could be downgraded if debt / EBITDA were to be sustained above 5x due to a leveraging acquisition, or if the company acquired a significant amount of new assets with a weak business risk profile. If WNR's credit quality were to materially decline resulting in a CFR of B2 or below, this would also pressure WNRL's ratings. The principal methodology used in this rating was Global Midstream Energy published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Western Refining Logistics, LP is a master limited partnership headquartered in El Paso, Texas. WESTERN REFINING: S&P Assigns 'B' CCR & Rates $300MM Sr. Notes 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating on El Paso-based Western Refining Logistics L.P. (WNRL). The outlook is stable. The stand-alone credit profile (SACP) is also 'b', and S&P views the partnership as moderately strategic to its general partner and parent, Western Refining Inc. At the same time, S&P assigned its 'B' issue rating and '4' recovery rating to WNRL and WNRL Finance Corp.'s proposed $300 million senior unsecured note offering due 2023, indicating that creditors can expect average (30% to 50%) recovery in the event of a payment default. S&P's recovery expectations are in the upper half of the 30% to 50% range. "The outlook on WNRL is stable and reflects our belief that the partnership will maintain relatively conservative financial measures, with debt to EBITDA in the low 3x area, and adequate liquidity as it integrates the wholesale business and grows organically during the next 12 months," said Standard & Poor's credit analyst Michael Grande. The most likely downside scenario would stem from a downgrade of WNR, which would likely result in a WNRL downgrade. S&P could lower the ratings on WNR if the company's liquidity becomes constrained or there is a considerable decline in operational performance throughout the refining cycle, such that debt to EBITDA increases and S&P believes will be sustained above 2.5x. The most likely upside scenario would stem from an upgrade of WNR, which would likely result in a WNRL upgrade. An upgrade for WNR is possible over time as the company's strategy related to its future organizational and capital structure evolves, which may result in an improved consolidated credit profile. S&P could also raise WNR's rating if the company increases its scale and diversifies its refining capacity into a region that benefits from price-advantaged crude oil. WHITEHALL AVENUE: Ramada Worldwide Guaranty Suit Goes to Trial -------------------------------------------------------------- Ramada Worldwide Inc. sued to enforce a personal guaranty against defendant Zulfikar Jafri. Jafri and three other individuals were the owners and principal shareholders of Whitehall Avenue, LLC. In September 2009, RWI and Whitehall entered into a franchise agreement that permitted Whitehall to operate a Ramada hotel in Connecticut. Jafri had three partners: his brothers, Askari Jafri and Wajih Jafri, and Steven Weil. Jafri and his three partners purportedly executed a personal guaranty in connection with the franchise agreement, in which they promised to satisfy Whitehall's obligations in the event of default. Whitehall defaulted and filed for bankruptcy in January 2011. RWI then filed this action to enforce the guaranty. Jafri and his partners filed a counterclaim alleging breach of contract and fraud. RWI and Jafri's partners reached a settlement, leaving Jafri as the sole defendant. The parties filed before the Court cross-motions for summary judgment. Jafri, while admitting that he signed the guaranty, contends that his co-guarantors' signatures were forged, relieving him of liability. New Jersey District Judge Kevin McNulty said Jafri's defense does raise genuine, material issues, both as to the fact of forgery and RWI's knowledge of or involvement in the alleged forgery. Accordingly, the judge said both sides' summary judgment motions are denied. The case is RAMADA WORLDWIDE INC., a Delaware Corporation Plaintiff, v. ZULFIKAR JAFRI, an individual, ASKARI JAFRI, an individual, WAJIH JAFRI, an individual, and STEVEN WElL, an individual, Defendants, Civ. No. 12-CV-5301 (KM)(D. N.J.). A copy of the Court's January 29, 2015 Opinion is available at http://is.gd/UbK20mfrom Leagle.com. Ramada Worldwide Inc., represented by: Bryan Paul Couch, Esq. Kelly Ann Krug, Esq. LeCLAIR RYAN One Riverfront Plaza 1037 Raymond Boulevard, Sixteenth Floor Newark, NJ 07102 Tel: 973-491-3582 Mobile Phone: 845-893-6051 Fax: 973-491-3632 E-mail: bryan.couch@leclairryan.com Zulfikar Jafri is represented by Michael A. Orozco, Esq. -- morozco@pricemeese.com -- at Price, Meese, Shulman & D'Arminio. Wajih Jafri is also represented by Price, Meese, Shulman & D'Arminio. About Whitehall Avenue Whitehall Avenue, LLC, dba Quality Inn Mystic, based in Mystic, Connecticut, filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case No. 12-21184) on May 13, 2012. Bankruptcy Judge Albert S. Dabrowski presided over the case. Ellery E. Plotkin, Esq., at Law Offices of Ellery E. Plotkin, LLC, served as the Debtor's counsel. In its petition, Whitehall Avenue estimated $1 million to $10 million in both assets and liabilities. A list of the Company's 34 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb12-21184.pdf The petition was signed by Zulfikar Jafri, chief operating officer. According to reporting by the Troubled Company Reporter, Whitehall Avenue also filed for Chapter 11 bankruptcy protection on Jan. 24, 2011 (Bankr. D. Conn. Case No. 11-50100). Judge Alan H.W. Shiff presided over the 2011 case. Peter L. Ressler, Esq., at Groob Ressler & Mulqueen, represented the Debtor in the first case. The Debtor estimated assets of less than $50,000, and debts of between $1 million and $10 million. WPCS INTERNATIONAL: Settles New York Lawsuit for $1.2 Million ------------------------------------------------------------- WPCS International Incorporated and the shareholder plaintiff entered into a settlement with a defendant in a case pending in the United States District Court for the Southern District of New York to resolve claims under Section 16 of the Securities Exchange Act of 1934. Under the terms of the Settlement, the Company will receive $1.2 million from the Defendant, consisting of $600,000 in cash and the forgiveness of $600,000 of the principal amount of debt owed by the Company to the Defendant as reflected in unsecured notes issued by the Company to the Defendant, which mature in October 2015. The Company will pay the Plaintiff's counsel $300,000 in legal fees. In addition, the Company and the Plaintiff have agreed to release and discharge the asserted claims against the Defendant. The Settlement was entered into solely by way of compromise and settlement and is not in any way an admission of liability by the Defendant, according to a regulatory filing with the U.S. Securities and Exchange Commission. About WPCS International Incorporated WPCS -- http://www.wpcs.com-- operates in two business segments including: (1) providing communications infrastructure contracting services to the public services, healthcare, energy and corporate enterprise markets worldwide; and (2) developing a Bitcoin trading platform. As reported by the TCR on Feb. 7, 2014, WPCS appointed Marcum LLP as its new independent registered public accounting firm. CohnReznick LLP resigned on Dec. 20, 2013. WPCS International incurred a net loss attributable to common shareholders of $11.16 million for the year ended April 30, 2014, as compared with a net loss attributable to common shareholders of $6.91 million for the year ended April 30, 2013. As of Oct. 31, 2014, the Company had $17.73 million in total assets, $17.34 million in total liabilities and $396,635 in total equity. Marcum LLP, in New York, NY, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2014. The independent auditing firm noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. [*] Activist Insight, Schulte Roth Release Investing Annual Review ------------------------------------------------------------------ Shareholder activism grew significantly in 2014, with the number of companies targeted worldwide reaching 344, compared to 291 in 2013, according to The Activist Investing Annual Review 2015, published by Activist Insight, in association with SRZ. Released on Jan. 30, the review spotlights major trends in the past year, offers predictions for the year ahead, features interviews with key players in the activism market and analyzes statistics on global activist campaigns. Marc Weingarten and David E. Rosewater, SRZ M&A partners and co-heads of the firm's global shareholder activism practice, contributed expert analyses to the review. They predict a continued boom in the number of activism campaigns in the U.S., along with a steadily increasing number in the U.K. and continental Europe. In addition, the review features the annual "Activist Top Ten," with Starboard Value LP topping this year's list for its work on a number of high-profile campaigns, especially in winning shareholder support to replace the entire board at Darden Restaurants Inc. -- owner and operator of more than 1,500 restaurants that generate approximately $6.3 billion in annual sales. Activist Insight selected the 2014 list based on the number of campaigns, average size of targets, new investments and an annualized return formula. Last year, Carl Icahn took the top spot. The "Activist Top Ten 2014" are: 1. Starboard Value LP 2. Third Point LLC 3. JANA Partners LLC 4. Icahn Enterprises LP 5. GAMCO Investors Inc. 6. Elliot Management 7. Pershing Square Capital Management LP 8. Trian Partners 9. ValueAct Captial 10. Corvex Management LP Josh Black, editor of the review commented, "Activist funds proved more numerous and more successful than ever in 2014. The continued growth in activist assets and in campaigns at U.S. companies, in particular, suggests that they are far from reaching the limits of their impact." In the foreword to the review, Mr. Weingarten and Mr. Rosewater commented, "Thanks in part to the marked upswing in the number of activism campaigns in 2014, there is no reason to expect activism to slow in the year ahead. In fact, the area continues to grow and, bolstered by a steadily increasing flow of capital, is expected to intensify." The pair were named "Dealmakers of the Year 2014" by The American Lawyer magazine, which highlighted their work on the "fiercest shareholder activism campaigns and proxy contests in the market." Indeed, SRZ clients continue to grab headlines. JANA Partners LLC successfully campaigned for PetSmart Inc. to sell itself, resulting in the chain being acquired by BC Partners for $8.3 billion. Clinton Group Inc. and Casablanca Capital LP won a majority of the seats on the boards at ValueVision Media Inc. (now, EVINE Live Inc.) and Cliffs Natural Resources Inc., respectively, both of which subsequently replaced their CEOs. Sandell Asset Management Corp. secured four board seats at Bob Evans Farms Inc., where the CEO also resigned, and, most recently, Trian Partners won a board seat at PepsiCo Inc. "Schulte Roth & Zabel maintains an unrivaled understanding of shareholder activism. The firm regularly leads clients to success drawing on a great depth of market knowledge and a sophisticated understanding of the drivers behind activism," commented Alan S. Waldenberg, chair of the firm's Executive Committee and chair of the Tax Group. Additional highlights from the review: Shareholder activists were more active than ever in 2014, based on the number of companies targeted and number of activists active. In fact, the number of targeted companies with no prior run-ins with activists over the last five years also increased, from 210 to 249. The number of activists running a public campaign, such as a demand for board representation or strategic alternatives, rose for its fifth consecutive year in 2014, to 203. In 2013, 160 activists ran a public campaign, up from 150 in 2012. Activists increasingly sought to push companies into M&A activity. Proactive M&A campaigns, where activists seek to push companies to acquire other firms or sell themselves, nearly doubled from 36 to 68 instances between 2013 and 2014. Reactive M&A, typified by opposition to deals or their terms, more than halved from 26 to 12 over the same period. [*] S&P Inks $1.37-Bil. Settlement with Prosecutors --------------------------------------------------- Ben Protess, writing for The New York Times' DealBook, reported that Standard & Poor's announced that it had agreed to pay $1.37 billion to settle civil charges from the Justice Department and from 19 state attorneys general and the District of Columbia. According to the DealBook, the settlement, which does not require judicial approval, signals that the investigation of crisis-era misdeeds has entered a final stage. A separate DealBook report related that the payout, which will settle an array of government lawsuits that accused S.&P. of inflating the ratings of subprime mortgage investments, does not represent closure for the broader ratings business. "The $1.37 billion fine shows that the current system does not work," the DealBook said, citing Representative Brad Sherman, a California Democrat who has co-written legislation to crack down on rating agencies. [*] The Deal Announces Results of Q4 2014 Bankruptcy League Tables ------------------------------------------------------------------ The Deal, TheStreet's institutional business, announced the results of its quarterly rankings of the top firms and professionals involved in active bankruptcy cases for the fourth quarter of 2014. Data collected captures only active bankruptcy work on ongoing U.S. and Canadian cases. "The bankruptcy space has definitely seen a slowdown in activity due to companies choosing other avenues for restructuring. These include out-of-court restructurings, assignments for the benefit of creditors and other remedies, which these advisers expect to continue to gain popularity in 2015," said Kelsey Butler, senior bankruptcy reporter at The Deal. "A continuing downturn in bankruptcy work due to factors including low interest rates, a stronger economy and the cost of the Chapter 11 process itself may result in shrinking bankruptcy practices at law firms." League Table highlights: * Saul Ewing LLP held onto its ranking from Q2 2014 as the top law firm by volume with $1,091.9 billion in liabilities; Akin Gump Strauss Hauer & Feld LLP was ranked second, with $1073.1 billion in liabilities, followed by Vedder Price PC, with $1061.0 billion liabilities. Duane Morris LLP was ranked fourth, down two spots from second in Q3 2014, with $951.3 billion in liabilities. * Amongst lawyers by volume, Michael Schein (Vedder Price PC) held on to his top ranking from last quarter, followed by Douglas Rosner (Goulston & Storrs PC), Richard Hahn (Debevoise & Plimpton LLP), Scott Davidson (King & Spalding LLP) and Daniel Golden (Akin Gump Strauss Hauer & Feld LLP). * For investment banks by volume, the top four banks held on to their rankings since Q2 2014. Blackstone Group LP maintained its lead with $810.2 billion in liabilities, followed by Miller Buckfire & Co. LLC in second place with $702.9 billion in liabilities, Jefferies LLC in third place with $98.8 billion in liabilities, Centerview Partners LLC in fourth place with $65.0 billion in liabilities. Peter J. Solomon Co. ranked fifth with $50.4 billion in liabilities. * The top four investment bankers held onto their rankings from Q2 by volume with Timothy Coleman (Blackstone Group LP) in the lead, followed by Stuart Erickson (Miller Buckfire & Co. LLC), Leon Szlezinger (Jefferies LLC) and Steven Zelin (Blackstone Group LP). The full suite of rankings is available now on The Deal, the transaction information service powered by The Deal's newsroom and the full report is also available online at: http://thedeal.com/pdf/Q42014BLT.pdf About The Deal's Bankruptcy League Tables The Deal's Bankruptcy League Tables are the industry's only league tables focused solely on active bankruptcy cases. The Bankruptcy League Tables by volume involve only active U.S. bankruptcy cases of debtors with liabilities of $10 million or more. The rankings are based on the aggregation of those liability values. The table reflects the number of active cases fitting that criteria and may not characterize the total number of active cases. Firms and professionals only get one credit for each active case, not each active assignment. The Bankruptcy League Tables by number involve U.S. and Canadian bankruptcy cases irrespective of debtor asset size. Professionals receive credit for multiple assignments on one case. About The Deal The Deal -- http://www.thedeal.com/-- is a media and relationship capital company providing over 100,000 users with business opportunities sourced from proprietary deal news and a relationship discovery tool. Law firms, investment banks, private equity and hedge funds use The Deal's insight and analysis about potential and announced transactions to find their next deal and BoardEx's service and database for building relationships. The Deal is the institutional arm of TheStreet, Inc. and has offices in New York, London, Washington, D.C., Petaluma, CA and Chennai, India. [*] U.S. Bankruptcy Judge Donald H. Steckroth to Join Cole Schotz ----------------------------------------------------------------- Cole Schotz P.C. announces on Feb. 2 that retiring U.S. Bankruptcy Judge Donald H. Steckroth is joining the firm as member, effective March 1. Judge Steckroth, who retired as U.S. Bankruptcy Judge for the District of New Jersey on Feb. 1, will be based in Cole Schotz's New York and New Jersey offices. During his 14-year tenure, Judge Steckroth presided over bankruptcy proceedings and related litigation that have drawn national attention across many industries. In the past year alone he presided over some of the largest Chapter 11 proceedings in the metropolitan area in the areas of healthcare, retail, real estate, chemical, medical equipment and insurance industries. "Judge Steckroth was the quintessential bankruptcy judge who dispensed justice fairly before all that appeared before him. His superior intellect, even temperament and respect for attorneys added luster to the United States Bankruptcy Court and federal court system," said Michael D. Sirota, co-managing shareholder of the firm and co-chair of the firm’s Bankruptcy & Corporate Restructuring group. "We are honored that Judge Steckroth elected to join our firm which will allow our attorneys and clients to benefit from his exceptional experience and unparalleled knowledge." Judge Steckroth joins Cole Schotz's Bankruptcy & Corporate Restructuring practice, bolstering the already robust team. The nationally renowned, full-service group delivers innovative strategies and winning solutions for complex in and out-of-court corporate restructurings, state and federal insolvency proceedings and high stakes bankruptcy litigation. "Cole Schotz has earned a reputation for professionalism, technical prowess and efficiency in the bankruptcy field both inside and outside the courtroom," said Judge Steckroth. "I look forward to beginning the next chapter of my career in the company of attorneys who set the bar in the practice of bankruptcy law." Prior to his appointment to the bench, Judge Steckroth was an attorney at Gibbons P.C. for 28 years. He graduated cum laude from Seton Hall University School of Law. About Cole Schotz Cole Schotz serves clients nationally throughout the United States with offices in New York, New Jersey, Delaware, Maryland and Texas. The firm represents private equity firms and hedge funds, as well as hundreds of closely-held businesses and individuals -- many for decades -- as well as Fortune 500 companies. Founded in 1928, the firm has grown to over 120 attorneys who work in eleven primary areas of practice: Bankruptcy & Corporate Restructuring; Construction Services; Corporate, Finance & Business Transactions; Employment Law; Environmental Law; Intellectual Property, Litigation; Real Estate; Real Estate Special Opportunities Group; Tax, Trusts & Estates and White Collar Defense & Investigations. ********* 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 ***