/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150401.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, April 1, 2015, Vol. 19, No. 91 Headlines 440 WEST 164TH STREET: Case Summary & 2 Top Unsecured Creditors ACADEMY HOLDINGS: Files for Chapter 11; Columbus Academy Closes ADELPHIA COMMUNICATIONS: Creditors Lose 2nd Bid at $149M Clawback ALLEN SYSTEMS: Court Signs Ch. 11 Plan Confirmation Order ALTEGRITY INC: Gets Court Approval to Assume RSA With Lenders ALTEGRITY INC: Unsecured Creditors to Recover 2.2% Under Plan AMERICAN BUILDERS: S&P Affirms 'BB-' Corporate Credit Rating AMERICAN INT'L: To Pay Nearly $1-Bil. to Settle Class Suit ARCHDIOCESE OF ST. PAUL: Seeks More Time to File Plan ATLANTIC CITY, NJ: Moody's Says Default Still Possible ATLS ACQUISITION: Proposes April 28 Disclosure Statement Hearing ATRINEA HOLDINGS: Case Summary & 20 Largest Unsecured Creditors AUTOPARTS HOLDINGS: Moody's Lowers Corp. Family Rating to 'Caa1' AWAL FINANCE: Court Issues Joint Administration Order BLUEHIPPO FUNDING: Former CEO to Rebut Contempt Damages BRAGG COMMUNICATIONS: S&P Alters Outlook to Stable, Affirms BB- CCR BRG SPORTS: S&P Raises Rating on $175MM Sr. Term Loan to 'B' CAESARS ENTERTAINMENT: Bond Trustee Sues to Enforce $750M Guarantee CAESARS ENTERTAINMENT: Customer Loyalty Program Valued at $1-Bil. CAESARS ENTERTAINMENT: Kirkland Denies Conflicts in Employment CAMBIUM LEARNING: Moody's Alters Outlook to Stable & Affirms CFR CATAMARAN CORP: Moody's Reviews 'Ba2' CFR for Upgrade CATAMARAN CORP: S&P Puts 'BB+' CCR on CreditWatch Positive CENTURYLINK INC: Fitch Affirms 'BB+' Issuer Default Ratings CLOUDEEVA INC: Bankruptcy Trustee Proposes Sale of IT Firm CONNACHER OIL: Sued by Credit Suisse Over $128-Mil. Loan Default CONSTAR INTERNATIONAL: Seeks More Time to Remove Suits D/K MECHANICAL: Order Setting Aside Default Judgment Affirmed DEERFIELD RANCH: Seeks 'Adequate Protection' for Grape Growers DEERFIELD RANCH: US Trustee Appoints Creditors' Committee DEWEY & LEBOEUF: Former COO Claims No Knowledge of Illegal Finances DIABETES AMERICA: 5th Cir. Revives WWI Claim Against Infopia DOLAN COMPANY: Former Executives Sidestep Class Action Over BofA DVORKIN HOLDINGS: Allowed to Enter Into FirstMerit Agreements DVORKIN HOLDINGS: Can Use Estate Funds to Buy Lombard Property EH MITCHELL: Hearing on Bid for Case Conversion Reset to June 23 ENERGY FUTURE: Bond Trustee Sues to Control Interest Payouts ENERGY FUTURE: Judge Rules Against Bondholders in Make-Whole Suit ENERGY FUTURE: Wants Creditors Blocked From Targeting LBO Debt EXIDE TECHNOLOGIES: Faces $2.4MM in Penalties; Meeting on April 15 F&H ACQUISITION: Deadline to Remove Suits Extended to June 10 FIRSTPLUS FINANCIAL: NJ Judge Shoots Down Recusal Request FLORIDA ENGINEERED: Shareholders on Hook for IRS Debts FREEDOM INDUSTRIES: Pleads Guilty to Pollution Charges FRESH & EASY: Closes 50 Stores in Calif., Ariz., Nev. GGW BRANDS: Suit Accuses Joe Francis of Illegally Spending Money GRAPHIC PACKAGING: S&P Revises Outlook to Stable & Affirms BB+ CCR GT ADVANCED: Bondholders Top TPG in Ch. 11 Loan Competition HAIMIL REALTY: No Quick Ruling on Dispute With Lender HALLMARK COLLECTION: Mid-Continent Says Magistrate Erred in Fight HELLAS TELECOM: Liquidators Want Foreign Laws in Clawback Suit HIPCRICKET INC: Unsecured Creditors Has 17.% Recovery Under Plan HOP 1 ENTERPRISES: Case Summary & 14 Largest Unsecured Creditors HUTCHESON MEDICAL: Has Access to Cash Collateral Until April 6 JOHN LE TUNG: Arbitration Award in Favor of Cal. Mortgage Upheld JOHN PATRICK STOKES: Mont. Supreme Court Affirms Summary Judgment KARMALOOP INC: Can Employ Rust Omni as Claims & Noticing Agent KRISHNA INVESTMENTS: Case Summary & 3 Top Unsecured Creditors LAKESHORE ENGINEERING: Sues DOD Over Afghan Contract Changes LIFE PARTNERS: Judge Orders Appointment of Chap. 11 Trustee LIGHTSQUARED INC: Claims Gutted in Harbinger Investor Row MACKEYSER HOLDINGS: Only Mackeyser Holdings Remains in Chapter 11 MAJESCO ENTERTAINMENT: Losses Raise Going Concern Doubt MBAC FERTILIZER: Delays Filing of Annual Financial Statements MEDICAL CAPITAL: Sedgwick Settles $210-Mil. Legal Malpractice Case MEDICAL CARD: S&P Affirms 'B-' Counterparty Credit Rating MEN'S WEARHOUSE: S&P Affirms 'B+' CCR; Outlook Stable MF GLOBAL: Commerzbank Unit Pays Nearly $1MM to Exit Case MF GLOBAL: Trustee Seeks to Pay $461-Mil. to Unsecured Creditors MGP INVESTMENTS: Case Summary & 6 Top Unsecured Creditors MITEL NETWORKS: S&P Rates Proposed $650MM Term Loan 'B+' MONTREAL MAINE: Civil Proceedings Stayed Pending Appeal MORRIS BROWN: Court Approves Plan MORRIS BROWN: Exits Chapter 11 Bankruptcy Protection NATEL ENGINEERING: Moody's Assigns First Time B2 Corp Family Rating NATEL ENGINEERING: S&P Assigns Prelim. 'B+' CCR; Outlook Stable NEW ENGLAND COMPOUNDING: Liberty Has Deals to Exit Meningitis Row NII HOLDINGS: Court Approves Share Pledge Deal with HSBC OAK ROCK: Israeli's $90M Lien Survives Creditor Attack OMNICARE INC: High Ct. Clarifies Litigation Path for Sec. Statement PARKERVISION INC: PwC Expresses Going Concern Doubt PETTERS GROUP: JPMorgan Wins Referral of Suit to Bankruptcy Court PITTSBURGH CORNING: Insurer Claims Asbestos Fraud Tainted Ch. 11 POLYMEDIX INC: Attys Want 33% Slice of $1-Mil. Pie in Stock Suit RADIO ONE: Moody's Affirms B3 CFR & Rates New $350MM Term Loan B3 RADIO ONE: S&P Affirms 'B-' CCR on Proposed TV One Buyout RADIOSHACK CORP: Grupo Gigante to Buy Mexican Business for $31.8MM RADIOSHACK CORP: Salus Changes Mind About Making Better Bid RADIOSHACK CORP: West Virginia Objects to Sale of Client Info RADNOR HOLDINGS: Former CEO Can't Sue Skadden Until Appeal Over RAY MARSHALL: Colorado Springs Developer Files for Bankruptcy REVEL AC: Files Amended Motion to Sell Assets to Polo North REVEL AC: Multiple Parties Object to Wells Fargo Settlement ROTHSTEIN ROSENFELDT: TD Bank Ordered to Pay $67-Mil. to Victims SABRE HOLDINGS: Moody's Raises CFR to Ba3 & Rates $530MM Notes Ba3 SALADWORKS LLC: Receives Auction Approvals Over Objections SAXBY'S COFFEE: Court Rejects Bid to Extend Time to File Appeal SIGNAL INT'L: Bankruptcy Likely Before Next Trafficking Trial STOCKTON, CA: Franklin Templeton Files Opening Brief in Plan Appeal TENNECO INC: Fitch Affirms 'BB+' Issuer Default Rating TOWNSQUARE MEDIA: S&P Keeps B- Unsec. Notes Rating After Downsize TRANSTAR HOLDING: S&P Alters Outlook to Stable on ETX Holdings Deal TRI-VALLEY CORP: K&L Gates Wants Out of Securities Action UNIT CORP: Fitch Affirms 'BB' Issuer Default Rating, Outlook Stable UNIVERSAL HEALTH: Settles WARN Act Claims US CAPITAL: Duane Morris Dodges Sanctions VENEZUELA: Gold Reserve Enters Default in ICSID Arbitration WINDSTREAM SERVICES: Fitch Affirms 'BB' IDR; Outlook Stable YELLOWSTONE MOUNTAIN: Founder on Hook for $56-Mil. in Back Taxes [*] Fitch: E&P Firms in Focus as US High Energy Default Rate Rises ********* 440 WEST 164TH STREET: Case Summary & 2 Top Unsecured Creditors --------------------------------------------------------------- Debtor: 440 West 164th Street Housing Development Fund Corporation 440 West 164th Street, Apt 44 New York, NY 10032 Case No.: 15-10817 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: March 31, 2015 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Mark A. Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 800 Third Avenue, 11th Floor New York, NY 10022 Tel: (212) 593-1100 Fax: (212) 644-0544 Email: mfrankel@bfklaw.com Total Assets: $3.5 million Total Liabilities: $1.7 million The petition was signed by Mark Schwartz, officer. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/nysb15-10817.pdf ACADEMY HOLDINGS: Files for Chapter 11; Columbus Academy Closes --------------------------------------------------------------- Martha Woodall, writing for Philly.com, reports that Academy Holdings Corp. filed for Chapter 11 bankruptcy protection on March 25, 2015, and closed its Columbus Academy the next day. According to Philly.com, the school enrolled 35 middle and high school students in 2013 to 2014, but a spokesperson for the state Department of Education said the enrollment in grades 9-12 dropped to 27 students this academic year. Columbus Academy had not told the State Board of Private Academic Schools it ceased operations, the report states, citing the spokesperson. Philly.com relates that the Company's former chief operating officer Chaka "Chip" Fattah Jr., son of Rep. Chaka Fattah, is facing federal charges of bank fraud, tax evasion, and stealing government funds. Mr. Fattah had a hand in bilking the Philadelphia School District of money by inflating salaries, making up benefit costs, and reporting nonexistent employees, while working with the Company's owner and Bala Cynwyd lawyer, David T. Shulick, Esq., Philly.com states, citing federal prosecutors. According to the report, Mr. Shulick's company held contracts with the Philadelphia School District to operate a disciplinary school in East Falls and an accelerated high school program in Southwest Philadelphia to help dropouts obtain diplomas. Mr. Fattah, the report states, has denied all the charges and said his case is a misguided attempt to strike a blow against his father. Academy Holdings Corp. is the parent company and successor of a series of firms that have run alternative schools under contracts with school districts. ADELPHIA COMMUNICATIONS: Creditors Lose 2nd Bid at $149M Clawback ----------------------------------------------------------------- Law360 reported that a New York federal judge has affirmed a bankruptcy court ruling that defunct Adelphia Communications Corp. was solvent at the time of a 1999 stock buyback from energy holdings firm FPL Group Inc. and creditors therefore cannot claw back $149 million from the transaction. According to the report, U.S. District Judge Valerie Caproni denied an appeal by the Adelphia Recovery Trust to recover $149 million from the stock buyback on grounds the company was insolvent at the time of the transaction. The case is Adelphia Communications Corporation et al v. FPL Group, Inc. et al., Case No. 1:14-cv-05532 (S.D.N.Y.). About Adelphia Communications Based in Coudersport, Pennsylvania, Adelphia Communications Corporation was once the fifth-biggest cable company. Adelphia served customers in 30 states and Puerto Rico, and offered analog and digital video services, Internet access and other advanced services over its broadband networks. Adelphia collapsed in 2002 after disclosing that founder John Rigas and his family owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company. Mr. Rigas was sentenced to 12 years in prison, while son Timothy 15 years. Adelphia Communications and its more than 200 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 02-41729) on June 25, 2002. Willkie Farr & Gallagher represented the Debtors in their restructuring effort. PricewaterhouseCoopers served as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman LLP and Klee, Tuchin, Bogdanoff & Stern LLP represented the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas-Managed Entities, were entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642) on March 31, 2006. Their cases were jointly administered under Adelphia Communications and its debtor-affiliates' Chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. The Plan became effective on Feb. 13, 2007. The Adelphia Recovery Trust, a Delaware Statutory Trust, was formed pursuant to the Plan. The Trust holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of Trust interests. Lawyers at Kasowitz, Benson, Torres & Friedman, LLP (NYC), represent the Adelphia Recovery Trust. ALLEN SYSTEMS: Court Signs Ch. 11 Plan Confirmation Order --------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware signed a findings of fact, conclusions of law, and order confirming the Chapter 11 plan of reorganization of Allen Systems Group, Inc., et al., and approving the plan's explanatory statement. The Plan, which pays general unsecured creditors in full, is supported by 100% of the Debtors' first lien lenders and has garnered 100% acceptance from the only class of creditors entitled to vote on the Plan -- junior secured noteholders -- and is even supported by the only known member of either of the two classes deemed to reject the Plan -- the Debtors' sole shareholder. According to a declaration filed prior to the confirmation hearing, the final voting results were overwhelmingly in favor of the Debtors' restructuring and more than sufficient for Plan approval under the Bankruptcy Code. Of the 49 ballots received, 48 accepted the Plan (representing $258,980,000 in claims), none rejected and only one abstained from voting and elected to opt out of the Third Party Release (representing $550,000 in claims). A full-text copy of Judge Carey's Confirmation Order dated March 27, 2015, is available at http://bankrupt.com/misc/ALLENplanord0327.pdf About Allen Systems Allen Systems Group, Inc., and two affiliates provide mission-critical enterprise information technology ("IT") management software solutions to large enterprises and small and medium-sized businesses. Founded in 1986 by Arthur L. Allen in Naples, Florida, ASG has more than 100 offices worldwide, primarily in the United States and Europe. As of Feb. 17, 2015, ASG had 1,054 employees in 114 locations in 25 countries. Allen Systems and two affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 15-10332) in Delaware on Feb. 18, 2015. The case is assigned to Judge Kevin J. Carey. The Debtor tapped Pachulski Stang Ziehl & Jones LLP as counsel; Latham & Watkins LLP as special counsel; and Epiq Bankruptcy Solutions as claims and noticing agent. Allen Systems estimated $100 million to $500 million in assets and $500 million to $1 billion in debt. ALTEGRITY INC: Gets Court Approval to Assume RSA With Lenders ------------------------------------------------------------- Altegrity Inc. received court approval to assume a restructuring support agreement with holders of more than $1.3 billion of secured debt. The restructuring deal, which is backed by the majority of Altegrity's lenders, and the proceeds from the sale of its two businesses are expected to reduce the company's debt by about $700 million or 40 percent. Some of Altegrity's lenders have committed to provide $90 million in debtor-in-possession financing as part of the deal. It will be converted into second lien notes at the conclusion of the company's bankruptcy case rather than paid in cash. The restructuring deal previously drew flak from Altegrity's official committee of unsecured creditors. The group argued the terms of the agreement have prevented Altegrity from seeking out alternative proposals. Altegrity and a group of bondholders defended the deal, arguing the company is free to pursue an alternative proposal but assuming the restructuring support agreement now will help the company secure the support of its lenders to a bankruptcy plan. The committee's objection had already been resolved, according to court filings. About Altegrity Inc. Altegrity Inc. 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. Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015. Jeffrey S. Campbell signed the petitions as president and chief financial officer. The Debtors disclosed total assets of $1.7 billion and total liabilities of $2.1 billion as of June 30, 2014. M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens, Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel. Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the Debtors' Delaware and conflicts counsel. Stephen Goldstein and Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment bankers. Kevin M. McShea and Carrianne J. M. Basler, at Alixpartners LLP serve as the Debtors' restructuring advisors. Prime Clerk LLC is the Debtors' claims and noticing agent. PricewaterhouseCoopers LLP serves as the Debtors' independent auditors. The U.S. Trustee for Region 3 appointed six creditors to serve on the official committee of unsecured creditors. ALTEGRITY INC: Unsecured Creditors to Recover 2.2% Under Plan ------------------------------------------------------------- Altegrity Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Joint Chapter 11 Plan and accompanying disclosure statement that will delever the Company by approximately $700 million, or 40% of the Debtors' outstanding debt. The Plan provides for a 2.2% estimated recovery of allowed general unsecured claims, which total approximately $82,510,532. Holders of Secured Third Lien Notes Claims are poised to recover 7.7% of their estimated $66,304,133 total amount of claims. Holders of Secured Second Lien Notes Claims are poised to recover 48.4% of their estimated $519,265,011 total amount of claims. To evidence their support of the Debtors' restructuring plan, holders of approximately 78% of the Debtors' first lien debt and approximately 95% of the Debtors' second and third lien debt have executed the Restructuring Support Agreement. The transactions contemplated by the Restructuring Support Agreement (a) address certain existing defaults under the First Lien Indebtedness, modify change-of-control covenants, and reset financial covenants to levels that are consistent with the Debtors' revised business plan, (b) reduce outstanding debt by 40% and (c) provide the Debtors with a new-money junior lien investment of $90 million to fund these Chapter 11 Cases and post-emergence ongoing business operations. Under the RSA, which was negotiated prepetition, the Company would hand over control to second- and third-lien bondholders, while senior creditors would loosen the terms of a $275 million first-lien credit facility and have their $850 million in bond debt paid down with $100 million of the $150 million in proceeds from Altegrity's recent sale of two divisions of its beleaguered U.S. Investigative Services, Law360 reported. The Debtors intend to present the Disclosure Statement, and any amendments, supplements, changes, or modifications thereto, for approval at a hearing before the Honorable Laurie Selber Silverstein on May 5, 2015, at 10:00 a.m. (prevailing Eastern Time). Objections, if any, to the approval of the Disclosure Statement must be submitted on or before April 28. A full-text copy of the Disclosure Statement dated March 30, 2015, is available at http://bankrupt.com/misc/ALTEGRITYds0330.pdf About Altegrity Inc. Altegrity Inc. 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. Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015. Jeffrey S. Campbell signed the petitions as president and chief financial officer. The Debtors disclosed total assets of $1.7 billion and total liabilities of $2.1 billion as of June 30, 2014. M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens, Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel. Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the Debtors' Delaware and conflicts counsel. Stephen Goldstein and Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment bankers. Kevin M. McShea and Carrianne J. M. Basler, at Alixpartners LLP serve as the Debtors' restructuring advisors. Prime Clerk LLC is the Debtors' claims and noticing agent. PricewaterhouseCoopers LLP serves as the Debtors' independent auditors. The U.S. Trustee for Region 3 appointed six creditors to serve on the official committee of unsecured creditors. AMERICAN BUILDERS: S&P Affirms 'BB-' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Beloit, Wis.-based American Builders & Contractors Supply Co. Inc. The outlook is stable. At the same time, S&P affirmed its 'BB+' (two notches higher than the corporate credit rating) issue-level rating on ABC Supply Co.'s $1.25 billion senior secured bank term loan B due 2020. The recovery rating is '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders under S&P's default scenario. In addition, S&P raised its issue-level rating on ABC Supply Co.'s $500 million senior unsecured notes due 2021 to 'B+' from 'B' (one notch lower than the corporate credit rating). S&P revised the recovery rating to '5' from '6', indicating its expectation of modest (10% to 30%), recovery for noteholders under its default scenario. S&P's recovery expectations are in the lower half of the 10% to 30% range. The recovery revision is due to a change in S&P's borrowing assumption for the asset-based lending (ABL) facility that improves the recovery prospects for the unsecured notes. The ABL is not rated. The affirmation reflects S&P's expectation that ABC Supply Co. will maintain leverage in a range that is commensurate with an aggressive financial risk profile, despite improving operating performance from a combination of product penetration and the expectation of higher commercial construction spending. "The stable rating outlook reflects our expectation that the company will continue to generate positive free cash flow and maintain strong liquidity while maintaining total leverage (including lease obligations) of less than 5x and funds from operations to debt of more than 12%, commensurate with an aggressive financial risk profile," said Standard & Poor's credit analyst Maurice Austin. A downgrade is less likely in the next 12 months, given S&P's favorable outlook for home construction and remodeling spending. However, S&P could take such an action if the U.S. housing recovery stalls and EBITDA falls in excess of 20% below its 2015 forecast, causing leverage to increase above 5x. This could also occur in a recessionary environment with at least a 100 basis point decline in gross margins. However, S&P's economists only place a 10% to 15% probability on a new recession S&P could raise the rating if the increase in new home construction and repair and remodeling spending is much greater than expected, causing current leverage to improve and be sustained below 4x and funds from operations to debt to increase above 20%, in line with a "significant" financial risk profile. AMERICAN INT'L: To Pay Nearly $1-Bil. to Settle Class Suit ---------------------------------------------------------- Reuters reported that shareholders of the insurance giant American International Group have won approval of a $970.5 million settlement resolving claims that they were misled about its subprime mortgage exposure, leading to a liquidity crisis and $182.3 billion in federal bailouts. According to the report, Judge Laura Taylor Swain of Federal District Court granted final approval at a hearing in Manhattan for what lawyers for the investors called one of the largest class-action settlements to come out of the 2008 financial crisis. It is the largest shareholder class-action settlement in a case in which no criminal or regulatory enforcement actions were ever pursued, the plaintiffs' lawyers have said, Reuters related. About AIG With corporate headquarters in New York, American International Group, Inc., is an international insurance company, serving customers in more than 130 countries. AIG companies serve commercial, institutional and individual customers through property-casualty networks of any insurer. In addition, AIG companies are providers of life insurance and retirement services. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. ARCHDIOCESE OF ST. PAUL: Seeks More Time to File Plan ----------------------------------------------------- Jean Hopfensperger, writing for Star Tribune, reported that the Archdiocese of St. Paul and Minneapolis has asked a federal bankruptcy court to extend its deadline for filing a reorganization plan to Nov. 30. According to the report, the archdiocese argued that it needed more time to work with insurance carriers to determine liability. “There are a number of difficult issues to be resolved before completion of the mediation process,” the report said, citing a notice filed in court. "In particular, it is imperative that the Archdiocese and the Committee have sufficient time to negotiate with the liability insurance carriers for contribution toward a comprehensive and global settlement and consensual plan of reorganization. About Archdiocese of St. Paul The Archdiocese of Saint Paul and Minneapolis was originally established by the Vatican in 1850 and serves a geographical area consisting of 12 greater Twin Cities metro-area counties in Minnesota, including Ramsey, Hennepin, Anoka, Carver, Chisago, Dakota, Goodhue, Le Sueur, Rice, Scott, Washington, and Wright counties. There are 187 parishes and approximately 825,000 Catholic individuals in the region. These individuals and parishes are served by 3999 priests and 173 deacons. The Archdiocese of St. Paul and Minneapolis filed for Chapter 11 protection (Bankr. D. Minn. Case No. 15-30125) in Minnesota on Jan. 16, 2015, saying it has large and growing liabilities related to child sexual abuse and that its pension obligations are underfunded. The Debtor disclosed $45,203,010 in assets and $15,890,460 in liabilities as of the Chapter 11 filing. The Debtor has tapped Briggs and Morgan, P.A., as Chapter 11 counsel; BGA Management LLC d/b/a Alliance Management as financial advisor; Lindquist & Vennum LLP as attorney. Eleven other dioceses have commenced Chapter 11 bankruptcy cases in the United States to settle claims from current and former parishioners who say they were sexually molested by priests. * * * According to the Court's docket, the Debtor's exclusivity period for filing a Chapter 11 plan and disclosure statement ends on May 18, 2015. Governmental proofs of claims are due July 15, 2015. ATLANTIC CITY, NJ: Moody's Says Default Still Possible ------------------------------------------------------ Law360 reported that in light of a recent state-sponsored report outlining Atlantic City, New Jersey's troubled financial condition, credit rating agency Moody's Investor Services Inc. issued comments saying it believes the proposals made for recovery are credit negative because they leave open the possibility of a default. According to Law360, the reaction from Moody's comes as a response to a report from a state-appointed emergency manager for the city -- which is facing a $101 million budget deficit because of its shrunken tax base -- who floated $129 million in potential cuts, revenue increases and delayed payments, but did not mention bankruptcy. * * * The Troubled Company Reporter, on Jan. 23, 2015, citing the Associated Press reported that New Jersey Gov. Chris Christie named an emergency manager for Atlantic City, leaving the door open for the seaside gambling resort to file for bankruptcy if it can't get its finances under control. The Republican governor and likely presidential candidate appointed a corporate turnaround specialist as the city's emergency manager, and tabbed the man who led Detroit through its municipal bankruptcy as his assistant, the AP said. On Jan. 29, the TCR reported that Standard & Poor's Ratings Services has lowered its general obligation rating on Atlantic City, N.J., four notches to 'BB' from 'BBB+' and placed it on CreditWatch with negative implications. The day before, the TCR reported that Moody's Investors Service has downgraded Atlantic City's GO debt to Caa1 with a negative outlook from Ba1, and on Jan. 27, the TCR said Moody's has downgraded Atlantic City Municipal Utilities Authority's (NJ) water revenue debt to B2 from Ba1, and assigned a negative outlook. ATLS ACQUISITION: Proposes April 28 Disclosure Statement Hearing ---------------------------------------------------------------- ATLS Acquisition, LLC, et al., amended their joint Chapter 11 plan of liquidation to provide that the Debtors are continuing their negotiations with Medco and five individual who served as directors and officers of the Debtors, and to propose an April 28, 2015, hearing on the adequacy of the disclosure statement explaining the Plan. The Plan Proponents anticipate that the Plan will provide for a 100% recovery to Holders of all Allowed Claims in the Chapter 11 Cases other than the Medco Claims. According to the Amended Plan, in addition to the negotiations with Medco, the Official Committee of Unsecured Creditors has been engaged in extensive negotiations with the Individual Parties, who are five individuals that served as directors and officers of the Debtors, and who comprise all of the shareholders of the Debtors. Embodied in the Amended Plan are the terms of the Individual Party Settlement, which provides for an aggregate $2 million Distribution in full and final satisfaction of all of the Individual Party Claims and the exchange of full mutual releases between the Individual Parties and the Debtors' Estates. The Debtors, however, note that as of March 27, the Individual Parties have not accepted the Individual Party Settlement. The Debtors also propose the following solicitation and confirmation schedule: Disclosure Statement Hearing April 28 Voting Record Date April 28 Solicitation Commencement Date May 4 Voting Deadline for the Plan June 2 Plan Objection Deadline June 2 Deadline to File Confirmation Brief June 8 Deadline to Respond to Plan Objections June 8 Deadline to File Voting Tabulations Affidavit June 8 Confirmation Hearing June 12 A full-text copy of the Amended Disclosure Statement, dated March 27, 2015, is available at http://bankrupt.com/misc/ATLSds0327.pdf About Liberty Medical Entities that own diabetics supply provider Liberty Medical led by ATLS Acquisition, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10262) on Feb. 15, 2013, just less than three months after a management buy-out and amid a notice by the lender who financed the transaction that it's exercising an option to acquire the business. Liberty has been in business for 22 years serving the needs of both type 1 and type 2 diabetic patients. Liberty is a mail order provider of diabetes testing supplies. In addition to diabetes testing supplies, the Debtors also sell insulin pumps and insulin pump supplies, ostomy, catheter and CPAP supplies and operate a large mail order pharmacy. Liberty operates in seven different locations and has 1,684 employees. Dennis A. Meloro, Esq., at Greenberg Traurig, LLP, serves as the Debtor's counsel; Ernst & Young LLP to provide investment banking advice; and Epiq Bankruptcy Solutions, LLC, as claims and noticing agent for the Clerk of the Bankruptcy Court. An official committee of unsecured creditors has been appointed in the case and consists of LifeScan, Inc., Abbott Laboratories, and Teva Pharmaceuticals USA, Inc. They are represented by Joseph H. Huston Jr., Esq., Maria Aprile Sawczuk, Esq., and Camille C. Bent, Esq., of Stevens & Lee P.C. as well as Bruce Buechler, Esq., S. Jason Teele, Esq., and Nicole Stefanelli, Esq. of Lowenstein Sandler LLP. The Committee has tapped Mesirow Financial Consulting, LLC, as financial advisors. * * * In November 2014, the Debtor received the green light from the Bankruptcy Court for its $68.5 million sale to an investment group led by private equity firm Palm Beach Capital. The auction for the assets boosted the purchase price by more than $20 million. ATRINEA HOLDINGS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atrinea Holdings, LLC 20 First Plaza NW, Ste. 500 7601 Jefferson St. NE, #340 Albuquerque, NM 87102 Case No.: 15-10813 Nature of Business: Health Care Chapter 11 Petition Date: March 30, 2015 Court: United States Bankruptcy Court New Mexico (Albuquerque) Debtor's Counsel: Steven Tal Young, Esq. 20 First Plaza, NW, Suite 500 Albuquerque, NM 87102 Tel: 505-247-0007 Fax: 505-764-6099 Email: talyoung@yahoo.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Philip Briggs, managing member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nmb15-10813.pdf AUTOPARTS HOLDINGS: Moody's Lowers Corp. Family Rating to 'Caa1' ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Autoparts Holdings Limited - Corporate Family and Probability of Default Ratings, to Caa1 and Caa1-PD, from B3 and B3-PD, respectively. In a related action Moody's downgraded the rating of the company's senior secured first lien bank credit facilities to B3 from B2, and the rating of the senior secured second lien term loan to Caa3 from Caa2. The rating outlook remains negative. The following ratings were lowered: Autoparts Holdings Limited: -- Corporate Family Rating, to Caa1 from B3; -- Probability of Default Rating, to Caa1-PD from B3-PD; Fram Group Holdings Inc./Prestone Holdings Inc./Fram Group (Canada) Inc., as co-borrowers: -- $50MM Senior Secured First Lien revolving credit facility due July 2016, to B3 (LGD3) from B2(LGD3); -- $508MM (remaining amount) Senior Secured First Lien Term Loan due July 2017, to B3 (LGD3) from B2 (LGD3); -- $105MM (remaining amount) Senior Secured Second Lien Term Loan due January 2018, to Caa3 (LGD5) from Caa2 (LGD5) The downgrade of Autoparts' Corporate Family Rating to Caa1 reflects the ongoing industry pressures in the automotive aftermarkets experienced by the company, including longer servicing intervals, fewer engine cylinders in automobiles, improved automobile reliability, and increasing vehicle technology which has shifted consumer purchases from Do-It-Yourself (DIY) to Do-It-For-Me (DIFM) outlets. In addition, Autoparts' recent performance has been adversely impacted by lower customer volumes and competitive pressures in the company's Autolite and Prestone segments. As a result, Moody's believes the company's 2015 results will underperform prior-year results, reversing Autoparts' gradual improvement in operating performance over the past several quarters. Autoparts is likely to experience some recovery in certain of its product lines along with additional cost savings to support improving profit levels by year-end 2015. However, Moody's believes the results will remain below prior-year levels. Positively, Autoparts has received support from its equity sponsor, the Rank Group, including approximately $25 million of additional equity in June 2014 which provided operating flexibility and debt paydowns. As of September 30, 2014, the company benefited from favorable credit metrics with Debt/EBITDA of 6.5x, and excluding factored receivables, 5.3x. EBITA/Interest approximated 1.7x. The negative outlook reflects Moody's expectation that Autoparts' year-over-year performance will decline in 2015. The rating and outlook also incorporates the risks around the unresolved strategic review of the ownership of the businesses operated by Autoparts announced in August 2014. The resolution of this review may be challenged by cost sharing and manufacturing arrangements with UCI International, Inc.(a subsidiary of UCI Holdings Ltd, also owned by an affiliate of the Rank Group). Autoparts' liquidity profile is expected to remain weak over the near-term driven by the looming maturity of the $50 million revolving credit facility in July 2016 and the uncertainty of the resolution of the company's strategic business review. As of September 30, 2014, availability under the $50 million senior secured revolving credit facility was about $45.1 million after $1.9 million of letters of credit outstanding and $3 million of borrowings. Cash and cash equivalents were approximately $68.6 million. Autoparts' free cash flow generation in 2015 is likely to be only moderately positive as result expected weaker year-over year performance. Alternative liquidity is limited as essentially all of the company's domestic assets secure the bank credit facilities. An important aspect of Autopart's liquidity profile is its ability to factor receivables. If receivables had not been factored, $153.3 million of additional receivables would have been outstanding at September 30, 2014. While Moody's recognize this is a common practice among automotive aftermarket parts retailers and their suppliers, Moody's also consider this amount as a potential short-term funding risk if markets are not available to enter into further factoring arrangements. Future events that could drive Autoparts' ratings lower include: market share losses or raw material cost pressures not offset by operating efficiencies resulting in further deterioration in profit margins, EBITA/interest approaching 1x, or the inability to resolve the strategic business review following the termination date of the revolving credit facility becoming a current maturity. Future events that could potentially improve the company's ratings include: improvement the company's revenue and profit trends combined with a favorable resolution of the company's strategic business review, and an extension in the maturities of the company's first lien bank credit facilities. The principal methodology used in these ratings was Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Autoparts Holdings Limited, headquartered in Lake Forest, IL, is a leading manufacturer of high quality, non-discretionary products for the automotive and heavy-duty aftermarket. The company's brands include FRAM®, Prestone® and Autolite. For the LTM period ending September 30, 2014, the Autoparts had sales of approximately $881 million. The company is owned by an affiliate of Rank Group Ltd, a New Zealand based private equity firm. AWAL FINANCE: Court Issues Joint Administration Order ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York signed an order directing joint administration of cases 15-10652, 15-10653, 15-10654, 15-10655, 15-10656, 15-10657 and 15-10658 under case 15-10652 (Awal Finance Company (No. 5) Limited, et al.). About Awal SPVs Awal Finance Company (No. 5) Limited et al., are special purpose investment vehicle established by Awal Bank to hold specific investment securities. Awal Finance and other SPVs on Nov. 16, 2009, commenced insolvency proceedings, under Cayman Islands law, currently pending before the Grand Court of the Cayman Islands, Financial Services Division. The SPVs filed Chapter 15 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 15-10652) in Manhattan on March 19, 2015 to seek U.S. recognition of the Cayman proceedings. Christopher Dorrien Johnson, Russell Homer, Bruce Alexander Mackay, and Geoffrey Lambert Carton-Kelly, in their capacity as the Joint Official Liquidators, signed the Ch. 15 petitions. The JOLs are represented in the U.S. cases by David Molton, Esq., at Brown Rudnick LLP, in New York. About Awal Bank Awal Bank BSC is a Bahrain lender owned by Saudi Arabian Saad Group. Awal Bank was principally an investment company that provides wholesale banking services in Bahrain including the acceptance of deposits and the making of loans. Awal Bank was taken into administration by the Central Bank of Bahrain on July 30, 2009, after defaulting on loans. Stewart Hey, Esq., at Charles Russell LLP, as external administrator of Awal Bank, made a voluntary petition under Chapter 15 of the U.S. Bankruptcy Code for the bank (Bankr. S.D.N.Y. Case No. 09-15923) on Sept. 30, 2009, following the administration proceedings. In 2010, the bank began experiencing a liquidity squeeze brought, in part, by the global economic crisis. The bank ceased to operate as a going concern since it was place into administration. Awal Bank filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-15518) in Manhattan on Oct. 21, 2010. Awal Bank exited U.S. bankruptcy protection in 2012. Awal Bank was represented in the U.S. proceedings by lawyers at Brown Rudnick LLP. BLUEHIPPO FUNDING: Former CEO to Rebut Contempt Damages ------------------------------------------------------- Law360 reported that warning it would be an uphill fight, a Manhattan federal judge gave former BlueHippo Funding LLC CEO Joseph Rensin a chance to rebut Second Circuit guidance suggesting he and the bankrupt retail credit concern are liable to consumers for $14 million after a contempt finding in a deceptive practices case. According to the report, U.S. District Judge Paul A. Crotty set a 30-day briefing schedule that will allow Rensin to contest the appellate court's finding that some 55,000 customers can be presumed to have relied upon BlueHippo misrepresentations. BlueHippo Funding LLC is a direct marketer of computers to consumers with poor credit records. The company generated $33.1 million in sales during 2008 and $21.5 million through September this year. NetDockets says BlueHippo described itself as offering customers with poor credit "an effective alternative way . . . to purchase computers and other electronic equipment." However, its business practices had been the subject of class action lawsuits and legal action by the Federal Trade Commission. The net loss this year is $1.8 million. BlueHippo is owned by Joseph K. Rensin. BlueHippo Funding LLC and several affiliates filed for Chapter 11 on November 23, 2009. The case is In re Distinctive Call Response LLC, 09-14154, U.S. Bankruptcy Court, District of Delaware (Wilmington). Eric Michael Sutty, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, represents the Debtors. BlueHippo said it has assets of $10 million while debt is $12.1 million. The Bankruptcy Court has converted the Chapter 11 reorganization case of BlueHippo Funding LLC to a liquidation under Chapter 7. BRAGG COMMUNICATIONS: S&P Alters Outlook to Stable, Affirms BB- CCR ------------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Halifax-based cable TV services provider Bragg Communications Inc. to stable from positive, and affirmed its 'BB-' long-term corporate credit rating on the company. At the same time, Standard & Poor affirmed its 'BB+' issue-level rating on Bragg's senior secured bank facilities. The '1' recovery rating is unchanged, reflecting very high (90%-100%) recovery in a default scenario. "The outlook revision reflects our view that increasing competitive pressure has contributed to a larger decline in core cable subscribers than we expected, negating the positive credit momentum of improving credit ratios from debt reduction," said Standard & Poor's credit analyst Donald Marleau. The ratings on Bragg benefit from what S&P sees as the company's "fair" business risk profile, supported by its healthy market position as the incumbent provider of cable television and related services in Atlantic Canada, industry-leading penetration of revenue generating units (RGUs); and the company's demonstrated ability to sustain its industry-leading profit margins. S&P believes that RGU erosion in 2014, however, highlights stiff triple-play competition from large telecom rivals (principally, Bell Aliant Inc.), ongoing competition from direct-to-home satellite television providers, increasing market saturation for Bragg's current offerings, the inherent risks from technological substitution for cable TV and fixed-line voice services, and the potential for execution challenges with respect to new initiatives. Moreover, S&P's view of the company's business risk profile incorporates its small size, operations in smaller markets with less attractive household densities, and somewhat high geographic concentration of cash flow. Privately held Bragg is the smallest of the five large cable operators in Canada. Based in Halifax, N.S., the company provides analog and digital cable television, high-speed Internet, and telephone services to its customers primarily under the EastLink brand. Bragg operates in seven Canadian provinces, with about half of its subscriber base in Atlantic Canada and the remainder spread out over Ontario and western Canada. The stable outlook reflects S&P's expectation that Bragg's credit measures will be strong for the rating, offsetting persistent subscriber attrition amid increasingly competitive market conditions that will constrain earnings growth over the next several years. S&P believes that Bragg's credit quality is well insulated from competitive pressures, as steady free cash flow and continued debt reduction contribute to modestly stronger credit measures over the next two years. S&P could lower the ratings on Bragg if subscriber losses combined with margin pressure in its core cable operations, such that adjusted debt-to-EBITDA approaches 4x. S&P believes that such a scenario could arise from increased triple-play competition from telecom rivals, and could indicate a deteriorating competitive position. Although less likely in the next two years, S&P also expects that increased debt for additional shareholder distributions could contribute to our lowering the rating. S&P could raise the rating on Bragg if subscriber attrition stabilizes, providing a path to stronger revenue and earnings growth with sustained average revenue per unit increases, while maintaining leverage below 3x. S&P believes that such a scenario would be consistent with a steady or improving competitive position and continued free cash flow available for debt reduction or important strategic investments. BRG SPORTS: S&P Raises Rating on $175MM Sr. Term Loan to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its issue-level ratings on BRG Sports Inc.'s $175 million senior term loan due 2021 to 'B' from 'B-'. S&P revised its recovery rating on the term loan to '2', indicating its expectations for substantial recovery (70% to 90%, at the low end of the range) in the event of a payment default, from '3'. The revised recovery rating reflects the company's prepayment of its term loan by roughly $8 million and S&P's assumption that the company's revolver usage at default would be lower than S&P's prior expectations. The issue-level ratings on the company's second lien term loan due 2022 remain 'CCC'. The recovery rating remains '6', indicating S&P's expectation for negligible recovery (0% to 10%) in the event of a payment default. The 'B-' corporate credit rating and stable outlook on BRG Sports Inc. remains unchanged. The rating reflects the company's participation in the highly fragmented and competitive performance sports equipment industry, narrow business focus, limited geographic diversity, sensitivity to cyclical demand conditions, and exposure to product liability. S&P also recognizes the strength of its brands and good market position within segments of the industry. The rating also reflects S&P's estimate that debt to EBITDA for the fiscal year ended Dec. 31, 2014, was roughly 15.1x (8.2x excluding S&P's preferred stock adjustment), and funds from operations (FFO) to debt was roughly negative 5% (4.2% excluding our preferred stock adjustment). S&P expects the company to maintain leverage between 9x and 10x (4x and 5x without the preferred stock adjustment) and FFO to debt between 0% and negative 5% (10% and 15% excluding S&P's preferred stock adjustment) during fiscal 2015. RATINGS LIST Ratings Unchanged BRG Sports Inc. Corporate credit rating B-/Stable/-- $105 mil. second lien term loan due 2022 CCC Recovery rating 6 Ratings Raised To From $175 mil. sr. term loan due 2021 B B+ Recovery rating 2L 3 CAESARS ENTERTAINMENT: Bond Trustee Sues to Enforce $750M Guarantee ------------------------------------------------------------------- Law360 reported that BOKF NA, a bond trustee, accused Caesars Entertainment Corp. of illegally repudiating $750 million in junior debt to ease the restructuring of its bankrupt operating unit by filing a lawsuit in New York that strikes at the heart of a carefully constructed $10 billion deleveraging strategy. According to the report, BOKF, the trustee for 12.75 percent second-lien notes issued by Caesars Entertainment Operating Co., sued in New York federal court to reinstate a corporate guarantee that CEOC's non-bankrupt parent company says is no longer in effect. The parent guarantee would otherwise obligate Caesars to make investors whole should CEOC default, the report related. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., 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. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., 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% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (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. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. 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. The U.S. Trustee has appointed seven noteholders to serve in the Official Committee of Second Priority Noteholders and nine members to serve in the Official Unsecured Creditors' Committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. CAESARS ENTERTAINMENT: Customer Loyalty Program Valued at $1-Bil. ----------------------------------------------------------------- Kate O'Keeffe, writing for Daily Bankruptcy Review, reported that the most valuable asset in the bitter bankruptcy feud at Caesars Entertainment Corp. isn't the casino operator's opulent Roman-themed resort at the heart of the Las Vegas Strip. It's the company's big-data customer loyalty program, valued at $1 billion by creditors. According to the report, Caesars chief executive Gary Loveman, a former Harvard Business School professor, said he devised the Total Rewards program in 1998 as a way to attract customers to the company's casinos without breaking the bank to upgrade them. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., 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. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., 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% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (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. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. 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. The U.S. Trustee has appointed seven noteholders to serve in the Official Committee of Second Priority Noteholders and nine members to serve in the Official Unsecured Creditors' Committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. CAESARS ENTERTAINMENT: Kirkland Denies Conflicts in Employment -------------------------------------------------------------- Law360 reported that Kirkland & Ellis LLP bankruptcy attorneys fought back against a bid to disqualify them from representing Caesars Entertainment Operating Co., denying that the firm owes any loyalty to the private equity shareholders accused of looting the largest U.S. gaming company. According to the report, in a court filing, Kirkland said that it stood ready to sue Apollo Global Management LLC and TPG Capital if necessary and panned the suggestion by CEOC creditors that it would shy away from pursuing the private equity firms, which are being eyed as potential litigation targets over their ownership roles. "Speculative conflicts are no basis for disqualification," Kirkland said, the report related. "The second lien committee's casual assertions that Kirkland attorneys would refuse to take positions adverse to Apollo or TPG, abandon their duties as estate fiduciaries, and thwart this restructuring process should not be dignified by the court." As previously reported by The Troubled Company Reporter, the Official Committee of Second Priority Noteholders filed an objection to the Application, stating that K&E does not meet the standard for disinterestedness applicable to Debtors' counsel under Section 327(a) of the Bankruptcy Code. The Statutory Unsecured Claimholders' Committee said it does not object to the Debtors' employment of Kirkland & Ellis, but argues that to the extent any disputes arise among the Debtors' estates at any time during the chapter 11 cases, the UCC may request an order granting it derivative standing so that one side of the dispute can be handled by the UCC. A joinder to the Claimholders' Committee's response was filed by Wilmington Trust, National Association, as Successor Indenture Trustee for the 10.75% Senior Unsecured Notes issued by Caesars Entertainment Operating Company, Inc., and guaranteed by certain wholly-owned domestic subsidiaries of CEOC, under that certain indenture dated Feb. 1, 2008. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., 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. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., 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% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (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. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. 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. The U.S. Trustee has appointed seven noteholders to serve in the Official Committee of Second Priority Noteholders and nine members to serve in the Official Unsecured Creditors' Committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. CAMBIUM LEARNING: Moody's Alters Outlook to Stable & Affirms CFR ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Cambium Learning Group, Inc. to Stable from Negative reflecting recent debt repayments combined with improved EBITDA margins as a result of cost cutting efforts. The Caa1 Corporate Family Rating, Caa1-PD Probability of Default Rating, SGL-2 Speculative Liquidity Rating, and debt instrument ratings were affirmed as summarized below. Issuer: Cambium Learning Group, Inc. Outlook Actions: -- Outlook, Changed To Stable from Negative Affirmations: -- Corporate Family Rating: Affirmed Caa1 -- Probability of Default Rating: Affirmed Caa1-PD -- Speculative Grade Liquidity Rating: Affirmed SGL-2 -- $140 Million Senior Secured Notes maturing Feb 2017: Affirmed Caa1, LGD3 Cambium's Caa1 corporate family rating reflects high leverage with debt-to-EBITDA of 5.5x (including Moody's standard adjustments, cash pre-publication costs as a reduction in EBITDA, changes in deferred revenue) for FYE2014. Moody's believes the company faces challenges in growing overall revenue due to weakness from legacy print-based product sales at Voyager Sopris Leaning ("VSL") and competition from free or lower-priced products impacting sales of text-to-speech products for Kurzweil Education. Cambium's largest segment, VSL, focuses on serving at-risk and special education student populations and competes against larger education companies with deep financial pockets, a wide array of products, and greater ability to invest in developing digital offerings. Revenue in the company's intervention segments has continued to decline in the past year; however, the decline is partially offset by growth in mainstream education products. In addition, Cambium has actively managed its cost base to deliver stable results. Over the next 12 months, Moody's expect the company to focus on stemming top line declines by growing revenue at Learning A-Z and ExploreLearning while supporting underperforming segments by migrating to newer digital offerings. Leverage remains high which is partially offset by the company's ability to generate good free cash flow reflecting improved overall EBITDA margins despite the company's need to invest in new technology to support sales. The company has maintained good liquidity with meaningful cash balances and positive free cash flow generation. The absence of financial maintenance covenants and no significant debt maturities until 2017 when the 9.75% notes mature provides some time to stabilize the VSL business, grow cash flow generated from newer offerings, and improve leverage to facilitate refinancing. The stable outlook incorporates the challenges that the VSL and Kurzweil Education segments face and the potential for further revenue and EBITDA declines due to the uncertain environment in the U.S. for educational providers and the continuation of weak performance within those segments. Moody's expect revenue growth for Learning A-Z and ExploreLearning segments to partially offset declines in the other segments, and Moody's believe the company will be able to manage its leverage and other credit metrics within the Caa1 rating as free cash flow is applied to reduce debt balances. Debt-to-EBITDA will remain high making the company vulnerable to an economic downturn, further tightening of funds to school districts from state and local governments, or heightened competition. The outlook also assumes the company will be able to refinance the notes due 2017. Ratings could be downgraded if revenue and EBITDA deteriorate resulting in debt-to-EBITDA being sustained above 6.0x (including Moody's standard adjustments, cash pre-publication costs as a reduction in EBITDA, changes in deferred revenue). Given the absence of a committed revolver, ratings could also be downgraded if the company's liquidity deteriorates reflected by lower cash balances or declining free cash flow-to-debt ratios. Moody's could consider an upgrade of ratings if continued revenue and EBITDA growth results in leverage being sustained comfortably below 5.0x (including Moody's standard adjustments, cash pre-publication costs as a reduction in EBITDA, changes in deferred revenue) and the company maintains good liquidity, including free cash flow-to-debt ratios in the low double digit percentage range or better. Moody's would also need to be assured that the company will successfully execute on its strategy of reducing the rate of revenue decline in its weaker performing VSL and Kurzweil Education segments while maintaining sale growth in Learning A-Z and ExploreLearning segments. The principal methodology used in these ratings was Global Publishing Industry Methodology 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 Dallas, TX, Cambium Learning Group, Inc. provides evidence-based educational solutions and professional services focused on helping all students reach their full potential. The company is comprised of Voyager Sopris Learning (50% of FY2014 revenue), Learning A-Z (31%), ExploreLearning (13%) and Kurzweil Education (6%). Voyager Sopris Learning is a provider of technology blended research and evidence based education solutions and online learning tools for students, teachers and local school leaders. Learning A-Z is a preK-6 educational resource company specializing in online delivery of leveled readers and other supplementary curriculum. Veronis Suhler Stevenson, a private investment firm owns approximately 71% of the company common shares. Reported net revenue for the 12 months ended December 31, 2014 totaled $142 million. CATAMARAN CORP: Moody's Reviews 'Ba2' CFR for Upgrade ----------------------------------------------------- Moody's Investors Service placed Catamaran Corporation's ratings, including its Ba2 Corporate Family Rating, on review for upgrade. The action follows the announcement that OptumRx, UnitedHealth Group Incorporated's independent pharmacy benefit manager (PBM), plans to acquire Catamaran, which will involve UnitedHealth issuing up to $13 billion of new debt. In addition, UnitedHealth will assume the senior unsecured notes of Catamaran. Moody's affirmed UnitedHealth's A3 debt rating but changed the outlook to negative. Ratings placed on review for upgrade: Catamaran Corp.: -- Corporate Family Rating at Ba2 -- Probability of Default at Ba2-PD -- Senior unsecured notes at Ba3 (LGD5) -- Senior secured bank facility at Ba1 (LGD3) Moody's rating review of Catamaran will consider: (1) the benefits of being part of a larger and more diversified entity; (2) where Catamaran's debt is ultimately held within UnitedHealth's capital structure; and (3) what, if any, support mechanisms, including guarantees, are provided to Catamaran's bondholders. At this time, Moody's understands that UnitedHealth plans to guarantee Catamaran's unsecured notes. If this occurs, Moody's would likely assign an A3 rating to Catamaran's notes upon closing, expected in the fourth quarter of 2015. Moody's believes that Catamaran's bank debt will be repaid and its revolver will be terminated due to change of control provisions. Catamaran's current Ba2 CFR reflects its position as a mid-market PBM company that has gained scale following its 2012 merger with Catalyst and subsequent acquisitions. But, it competes with much larger players including Express Scripts and CVS Health, which dominate the PBM landscape. Catamaran's mail order and specialty drug service offerings, though growing, are still substantially smaller than those of its large competitors. Its move into the large customer market increased its customer concentration risk, as highlighted by its 2013 contract with CIGNA. Catamaran's roll-up strategy involves acquisitions of mid-sized PBMs that are using its information technology platforms. The principal methodology used in these ratings was Global Distribution & Supply Chain Services published in November 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. Catamaran Corporation, headquartered in Lisle, Illinois, is a provider of pharmacy benefit management services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. CATAMARAN CORP: S&P Puts 'BB+' CCR on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services placed all of its ratings, including the 'BB+' corporate credit rating, on Catamaran Corp. on CreditWatch with positive implications. "The CreditWatch placement follows United HealthCare Insurance Co.'s [UHC] announcement that it intends to acquire Catamaran in a $12.8 billion deal funded by a mix of cash and new debt," said Standard & Poor's credit analyst Shannan Murphy. Pro forma the acquisition and the combination of Catamaran with UHC's captive pharmacy benefit manager, Optum Rx, the combined entity will be the third-largest U.S. pharmacy benefit manager, behind CVS/Caremark and Express Scripts. Earlier, S&P affirmed its 'A+' rating on United HealthCare and revised the rating outlook to negative from stable on news of the acquisition. S&P will resolve its CreditWatch listing on Catamaran when the acquisition closes, pending additional information on UHC's acquisition integration plans and on the ultimate capital structure of the combined entity. CENTURYLINK INC: Fitch Affirms 'BB+' Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of CenturyLink, Inc. (CenturyLink) and its subsidiaries at 'BB+'. The issue ratings of CenturyLink's $8 billion of outstanding senior unsecured notes (pro forma for first-quarter 2015 refinancing) and revolving credit facility (RCF) have been affirmed at 'BB+'. The ratings on the outstanding $10.1 billion aggregate amount of senior unsecured debt of Qwest Corporation (QC) and Embarq Corporation (Embarq, including certain subsidiaries) have been affirmed at 'BBB-'. The Rating Outlook is Stable. KEY RATING DRIVERS The following factors support CenturyLink's ratings: -- Fitch's ratings are based on the expectation that CenturyLink will demonstrate steady improvement in its revenue profile over the next couple of years given that rates of decline have moderated to nominal levels and could be flat in 2015; -- Near-term consolidated free cash flows (FCFs) have strengthened and are expected to be relatively healthy in 2015; -- Liquidity is expected to remain relatively strong over the rating horizon. The following factors are embedded in CenturyLink's ratings: -- CenturyLink's financial policy, which incorporates a net leverage target of up to 3x; -- High-margin voice revenues continue to decline but are largely being replaced by broadband and business services revenues. The latter sources have lower margins. CenturyLink's consolidated revenues continue to show signs of reaching stability, declining by a modest 0.4% in 2014, after recording a 1.5% decline in 2013. Fitch continues to expect revenue growth from strategic areas, including high-speed data, Prism, advanced business services, as well as in managed hosting and cloud computing services, to contribute to longer-term revenue stability. In May 2014, a 24-month, $1 billion share repurchase program became effective upon the completion of the previous $2 billion repurchase program and by the end of 2014, $200 million of shares were repurchased. Share repurchases are being funded primarily out of FCF. Fitch does not expect CenturyLink to issue debt for future share repurchases. On a gross debt basis, CenturyLink's leverage at year-end 2014 was approximately 2.95x. Leverage has risen from the 2.84x posted in 2013 given slight pressure on EBITDA as service revenues continue to shift to lower-margin, but strategic, broadband and business service revenue from higher-margin legacy voice revenues. Fitch believes leverage will remain around 3x over the next couple of years, in part due to a stabilization of EBITDA in 2016 or 2017, as newer strategic services achieve greater scale. CenturyLink's total debt was $20.7 billion at Dec. 31, 2014. Financial flexibility is provided through a $2 billion RCF, which matures in December 2019. As of Dec. 31, 2014, approximately $1.275 billion was available on the facility. CenturyLink also has a $160 million uncommitted revolving letter of credit facility. In 2015, Fitch expects CenturyLink's FCF (defined as cash flow from operations less capital spending and dividends) to be substantially similar to the $913 million generated in 2014. Expected FCF levels reflect capital spending within the company's guidance of approximately $3 billion for 2015. Within the capital budget, areas of focus for investment include continued spending on data center/hosting, broadband expansion and enhancement, as well as spending on IPTV, the company's facilities-based video program. Fitch believes CenturyLink has the financial flexibility to manage upcoming maturities due to its FCF and credit facilities. Maturing debt in 2015 totals $550 million, of which $350 million was repaid in February 2015. In 2016, maturities amount to approximately $1.5 billion. The principal financial covenants in the $2 billion RCF limit CenturyLink's debt-to-EBITDA for the past four quarters to no more than 4x and EBITDA-to-interest plus preferred dividends (with the terms as defined in the agreement) to no less than 1.5x. QC has a maintenance covenant of 2.85x and an incurrence covenant of 2.35x. The facility is guaranteed by certain material subsidiaries of CenturyLink. Going forward, Fitch expects CenturyLink and QC will be CenturyLink's only issuing entities. CenturyLink has a universal shelf registration available for the issuance of debt and equity securities. KEY ASSUMPTIONS -- Fitch assumes revenues will be flat in 2015, and will grow in the low single digits beginning in 2016. EBITDA margins in 2015 and 2016 are expected to decline slightly from the 38.8% recorded in 2014 as higher margin legacy revenues continue to decline. -- In 2015, Fitch expects consolidated capital spending to approximate $3 billion, similar to the amount spent in 2014. The company's $1 billion share repurchase program, which became effective in May 2014, is expected to be completed over an 18-to-24 month period. RATING SENSITIVITIES Fitch does not expect a positive rating action over the next several years based on its assessment of the competitive risks faced by CenturyLink and expectations for leverage. A negative rating action could occur if: -- Consolidated leverage through, but not limited to, operational performance, acquisitions, or debt-funded stock repurchases, is expected to be 3.5x or higher; -- A reduction in capital spending that, in Fitch's evaluation, affects future revenue growth. The ratings have been affirmed as follows: CenturyLink -- Long-term IDR at 'BB+'; -- Senior unsecured $2 billion RCF at 'BB+'; -- Senior unsecured debt at 'BB+'. Embarq Corp. -- IDR at 'BB+'; -- Senior unsecured notes at 'BBB-'. Embarq Florida, Inc. (EFL) -- IDR at 'BB+'; -- First mortgage bonds at 'BBB-'. Qwest Communications International, Inc. (QCII) -- IDR at 'BB+'. Qwest Corporation (QC) -- IDR at 'BB+'; -- Senior unsecured notes at 'BBB-'. Qwest Services Corporation (QSC) -- IDR at 'BB+'. Qwest Capital Funding (QCF) -- Senior unsecured notes at 'BB+'. CLOUDEEVA INC: Bankruptcy Trustee Proposes Sale of IT Firm ---------------------------------------------------------- Katy Stech, writing for Daily Bankruptcy Review, reported that bankruptcy lawyers in charge of information technology staffing firm Cloudeeva Inc. are proposing to sell the New Jersey company at an April auction. According to the report, citing a court filing, Cloudeeva officials said that staffing competitor First Tek Inc. has already offered $5.6 million for the struggling company, whose roughly 350 full-time and contracted workers are hired as tech support by corporations and governments. About Cloudeeva, Inc. Cloudeeva, Inc., a public company previously known as Systems America, Inc., is a global cloud services and technology solutions company specializing in cloud, big data and mobility solutions and services. The company provides information technology staffing services to major clients and third party vendors in the United States and India. The company headquarters are in East Windsor, New Jersey, with regional offices in California, Illinois and international offices in India. Cloudeeva, Inc., and its affiliates sought Chapter 11 bankruptcy 32 protection (Bankr. D.N.J. Lead Case No. 14-24874) in Trenton, New Jersey, on July 21, 2014. The cases are assigned to Judge Kathryn C. Ferguson. Cloudeeva disclosed $4,989,375 in assets and $6,528,910 in liabilities as of the Chapter 11 filing. The company said only $209,000 is owing to its lender Prestige Capital Corp. and more than $5.2 million is owed for trade vendor payables. The Debtors originally tapped Lowenstein Sandler LLP as counsel. However, they later sought approval to tap Trenk, DiPasquale, Della Fera & Sodono, P.C., to replace Lowenstein Sandler, who retention was not formally approved by order of the Court. The Debtors also tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as appellate counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. * * * On Aug. 22, 2014, Judge Ferguson entered an order dismissing the Debtors' Chapter 11 cases at the behest of Bartronics Asia PTE Ltd. BAPL asserted that the cases were not filed in good faith. The Debtors subsequently filed an appeal challenging the dismissal of their cases. Since then, District Judge Joel A. Pisano for the District of New Jersey entered an order staying the Case Dismissal Order pending further proceedings. Simultaneously, Judge Pisano reinstated the Debtors' bankruptcy cases and authorized the Debtors to be in possession of their assets and the management of their business as debtors-in-possession, subject to the continuing jurisdiction of the Bankruptcy Court and any further orders of the Bankruptcy Court or the District Court. The Debtor filed a Plan of Reorganization and Disclosure Statement on Oct. 7, 2014. The Plan will be funded by cash on-hand on the Effective Date, cash revenues derived from the Debtors' continued operations, and investment of $1.15 million from Cloudeeva India Private Limited or their designee, along with their guarantee of all payments to be made under Plan, in exchange for the equity of the Reorganized Debtors, as agreed in the parties' Plan Support Agreement. The Court approved the appointment of Stephen Gray as Chapter 11 trustee for the Debtors' estate. The trustee was represented by Saul Ewing LLP. Richard B. Honig was later appointed as the Chapter 11 successor trustee for Cloudeeva Inc. CONNACHER OIL: Sued by Credit Suisse Over $128-Mil. Loan Default ---------------------------------------------------------------- Law360 reported that Calgary-based Connacher Oil and Gas Ltd. was hit with a lawsuit in New York state court by a Credit Suisse Group unit that claims the energy exploration company has defaulted on a $128 million loan. About Connacher Connacher is a small exploration & production company that operates two steam assisted gravity drainage oil sands projects in Alberta, currently producing about 13,400 barrels per day net of royalties. * * * The Troubled Company Reporter, on March 10, 2015, reported that Moody's Investors Service downgraded Connacher's Probability of Default Rating to 'C-PD/LD' from 'Ca-PD' and its Corporate Family Rating to 'C' from 'Ca'. Moody's appended the limited default or "LD" designation to Connacher's PDR to reflect the company's failure to make the interest payments with respect to its second lien notes within the 30 day grace period under the indentures, from Feb. 2, 2015, when the interest became payable. Moody's also affirmed the second lien notes rating of 'Ca'. The Speculative Grade Liquidity Rating of SGL-4 remains unchanged. The outlook remains negative. The TCR, on Feb. 4, 2015, reported that Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating and debt issue ratings on Connacher 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. CONSTAR INTERNATIONAL: Seeks More Time to Remove Suits ------------------------------------------------------ Capsule International Holdings LLC has filed a motion seeking additional time to remove lawsuits involving the company and its affiliates. In its motion, Capsule International, formerly known as Constar International Holdings LLC, asked the U.S. Bankruptcy Court in Delaware to move the deadline for filing notices of removal of the lawsuits to May 12, 2015. Evan Miller, Esq., at Bayard P.A., in Wilmington, Delaware, said the extension, if granted, would give the company more time to consider removal of the lawsuits and ensure that its decisions are "fully informed." The motion is on Judge Christopher Sontchi's calendar for April 28, 2015. About Constar International Privately held Constar International Holdings and nine affiliated debtors (nka Capsule International Holdings, et al.) filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13281) on Dec. 19, 2013. Constar, which manufactures plastic containers, is represented by Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert, Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the Debtors' claims and noticing agent, and administrative advisor. Lincoln Partners Advisors LLC serves as the Debtors' financial advisor. Judge Christopher S. Sontchi oversees the 2013 case. This is Constar International's third bankruptcy. Constar first filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan and emerged from bankruptcy in May 2009. Constar and its affiliates returned to Chapter 11 protection (Bankr. D. Del. Case No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11 plan and emerged from bankruptcy in June 2011. The new petition listed assets worth less than $100 million against $123 million on three layers of secured debt. Attorneys at Brown Rudnick LLP represent the official committee of unsecured creditors. The Committee retained Alvarez & Marsal North America LLC as its financial advisor. Counsel to Wells Fargo Capital Finance, LLC, the revolving loan agent, is Andrew M. Kramer, Esq., at Otterbourg P.C. On Feb. 10, 2014, the Bankruptcy Court authorized Constar to sell certain assets to Plastipak Packaging, Inc., a global manufacturer of rigid plastic packaging. The Court determined that Plastipak's $102,450,000 offer for the Debtors' U.S. assets bested the offers from Amcor Rigid Plastics USA, Inc., and Envases Universales De Mexico S.A.P.I. De C.V. during a Feb. 6 auction. Separately, the Court authorized Constar to sell a facility in Havre de Grace, Maryland, to Smucker Natural Foods, Inc., for $3 million. There was no other bidder for the Maryland facility. The sole director of debtor Constar International U.K. Limited has appointed Daniel Francis Butters and Nicolas Guy Edwards of Deloitte LLP as administrators. The U.K. Administration Proceeding follows the closing of the sale of the U.K. assets to Sherburn Acquisition Limited. The Delaware Bankruptcy Judge authorized the U.S. Debtors to sell the U.K. Assets to Sherburn for GBP3,512,727, (or US$7,046,000), less the deposit in the sum of US$1,250,000. Secured lender Black Diamond Commercial Finance, LLC, as DIP note agent, and Wells Fargo Capital Finance, LLC, as DIP revolving agent and agent under the revolving loan facility, consented to the administration of Constar U.K. and the appointment of the Joint Administrators. In view of the asset sales in the U.S. and the U.K., the Debtors changed their corporate trade names -- and with the Bankruptcy Court's consent, their bankruptcy case caption -- to Capsule Group Holdings, Inc.; Capsule Intermediate Holdings, Inc.; Capsule Group, Inc.; Capsule International LLC; Capsule DE I, Inc.; Capsule DE II, Inc.; Capsule PA, Inc.; Capsule Foreign Holdings, Inc.; and Capsule International U.K. Limited (Foreign). D/K MECHANICAL: Order Setting Aside Default Judgment Affirmed ------------------------------------------------------------- The Court of Appeals of California, Fourth District, Division Three, affirmed a lower court order that allowed Michael Jay Berger to set aside a default and a $10 million default judgment obtained by D/K Mechanical Contractors, Inc. (D/K), DGB Contractor Services, Inc. (DGB), and BGD Enterprises, Inc. (BGD) against Berger. D/K et al. appealed, arguing that Berger did not show a meritorious defense or the required elements for equitable relief. D/K et al. were related companies in the construction industry. D/K and DGB were mechanical contractors and BGD owned title to some of the vehicles the others used. In October 2011, D/K or DGB or both were parties to about 50 contracts with a contract value over $100 million. All their vendor invoices were paid current and they were not in default on any of their contracts. D/K's line of credit had just recently been increased from $3.5 to $4.4 million. At that time, because of a short term cash flow problem, D/K et al. were concerned about whether they could meet a $500,000 obligation to labor unions which was due in the next several weeks. Therefore they consulted with Berger, a certified bankruptcy specialist, as to whether bankruptcy would solve the problem. Berger represented to D/K et al. he had experience handling construction companies, and their relationships with unions and bonding companies, and that he understood the consequences of D/K et al. filing bankruptcy. After being retained by D/K et al., Berger filed chapter 11 petitions for D/K and DGB and a chapter 7 petition for BGD. Five days thereafter, D/K et al. substituted in their current counsel -- Shulman Hodges & Bastian's Ronald S. Hodges, Esq., and J. Ronald Ignatuk, Esq. -- who filed motions to dismiss the bankruptcies. D/K et al. state they were severely damaged by the bankruptcy filings. Almost all the contracts to which they were parties, including loan agreements and surety bonds, went into default as a result. Payments under contract began being paid to the surety company, and all parties with whom D/K et al. had contracts had the right to terminate. Two multimillion dollar contracts for which D/K et al. had successfully bid were not consummated because D/K et al. could not obtain a surety bond. D/K et al. claimed additional damages. In October 2012, D/K et al. filed suit alleging causes of action for breach of contract, legal malpractice, and fraud, seeking damages in excess of $10 million and restitution of payments to Berger. Berger never filed his answer. On February 15, 2013, D/K et al. filed their documents to prove up the default judgment. After an evidentiary hearing in June, in July the court entered a default judgment in favor of D/K for just over $4 million, in favor of DGB for just over $6 million, and in favor of BGD for $410 (collectively $10 million judgment). Berger filed a motion to set aside the default and judgment. He declared he had "good defenses" to the complaint, stating he had performed everything required of him under the fee agreements and believed filing the bankruptcy had been in D/K et al.'s best interest. He stated that he decided not to file a motion to set aside the default but wait until a judgment was entered. He pointed out D/K et al. had delayed seeking the $10 million judgment. The lower court ultimately determined trial on the merits was warranted and exercised its discretion to set aside the default and the $10 million judgment. The case is, D/K MECHANICAL CONTRACTORS, INC., et al., Plaintiffs and Appellants, v. MICHAEL JAY BERGER, Defendant and Respondent, No. G049340 (Cal. Ct. App.). A copy of the Court's March 24, 2015 Opinion is available at http://is.gd/VJ1qIffrom Leagle.com. D/K Mechanical Contractors, Inc., based in Anaheim, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 11-24055) on October 7, 2011. Judge Robert N. Kwan oversees the case. The Debtor estimated $0 to $50,000 in assets and $1 million to $10 million in debts. A list of the Company's 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb11-24055.pdf The petition was signed by Gary Brubaker, president. DEERFIELD RANCH: Seeks 'Adequate Protection' for Grape Growers -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California is set to hold a hearing on April 17 to consider the request of Deerfield Ranch Winery LLC for "uniform adequate protection" of liens held by grape growers. The request, if granted by the court, would protect the liens of grape growers on the wine produced by the company. One form of adequate protection proposed by the company is prohibiting the sale of wine that is subject to a lien without consent from or payment of the grape grower. In connection with selling wine in which a grape grower has a lien, Deerfield proposed that the grape grower be paid up to the full amount of its secured claim on condition that the company receives consent from lender Rabobank prior to any such payment. To the extent any unpaid grower's product is sold and it is not paid in full, Deerfield proposed that the grape grower be granted a lien in the proceeds of the sale. "It is Deerfield's goal to ensure that its growers are all treated fairly and that their lien rights are recognized and protected," Robert Rex, managing member of Deerfield, said in a declaration. About Deerfield Ranch Winery Deerfield Ranch Winery, LLC, is an award-winning winery located in the heart of the Sonoma Valley, founded in 1982 by Robert and PJ Rex. The Deerfield estate is approximately 47 acres, located in Kenwood, California, and was acquired in 2000. Annual production totals approximately 30,000 cases annually, including both Deerfield brands and the winery's substantial custom-crush business, which includes 12 small family-owned wineries. The winery LLC is owned by 87 members, who have contributed more than $15 million to the business. Deerfield Ranch Winery filed a Chapter 11 bankruptcy petition (Bank. N.D. Cal. Case No. 15-10150) on Feb. 13, 2015. The Debtor disclosed $25,197,611 in assets and $12,041,939 in liabilities as of the Chapter 11 filing. Scott H. McNutt, Esq., and Shane J. Moses, Esq., at McNutt Law Group LLP serve as the Debtor's counsel. Jigsaw Advisors LLC acts as the Debtor's restructuring financial advisor. Judge Alan Jaroslovsky is assigned to the case. DEERFIELD RANCH: US Trustee Appoints Creditors' Committee --------------------------------------------------------- The United States Trustee for Region 17 appointed three creditors of Deerfield Ranch Winery LLC to serve on the official committee of unsecured creditors. The unsecured creditors' committee is composed of: (1) Tonnellerie de Jarnac USA Inc. P.O. Box 659 Napa, CA 94559 Attn: Yannick Rousseau Telephone: (707) 332-4524 E-mail: yannickrousseau@sbcglobal.net (2) Topolos Vineyards LLC P.O. Box 33 Glen Ellen, CA 95442 Attn: Michael Topolos Telephone: (707) 529-3931 E-mail: michaeltopolos@gmail.com (3) Wood Valley Road LLC 715 Scott St San Francisco, CA 94117 Attn: David Estes Telephone: (415) 350-3967 E-mail: destes@montgomeryadvisors.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Deerfield Ranch Winery Deerfield Ranch Winery, LLC, is an award-winning winery located in the heart of the Sonoma Valley, founded in 1982 by Robert and PJ Rex. The Deerfield estate is approximately 47 acres, located in Kenwood, California, and was acquired in 2000. Annual production totals approximately 30,000 cases annually, including both Deerfield brands and the winery's substantial custom-crush business, which includes 12 small family-owned wineries. The winery LLC is owned by 87 members, who have contributed more than $15 million to the business. Deerfield Ranch Winery filed a Chapter 11 bankruptcy petition (Bank. N.D. Cal. Case No. 15-10150) on Feb. 13, 2015. The Debtor disclosed $25,197,611 in assets and $12,041,939 in liabilities as of the Chapter 11 filing. Scott H. McNutt, Esq., and Shane J. Moses, Esq., at McNutt Law Group LLP serve as the Debtor's counsel. Jigsaw Advisors LLC acts as the Debtor's restructuring financial advisor. Judge Alan Jaroslovsky is assigned to the case. DEWEY & LEBOEUF: Former COO Claims No Knowledge of Illegal Finances ------------------------------------------------------------------- Christine Simmons, writing for New York Law Journal, reported that the former chief operating officer of Dewey & LeBoeuf, Dennis D'Alessandro, told prosecutors he was unaware of inappropriate accounting at the firm and did not believe his colleagues were doing anything illegal. According to the report, the disclosure of Mr. D'Alessandro's statements turned over to the defense by the Manhattan District Attorney's office comes less than two months before trial is set to begin against three former Dewey leaders: ex-chairman Steven Davis, former executive director Stephen DiCarmine and chief financial officer Joel Sanders. Defense attorneys said Mr. D'Alessandro's statements will be "very helpful" in establishing their clients' innocence, the report related. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DIABETES AMERICA: 5th Cir. Revives WWI Claim Against Infopia ------------------------------------------------------------ The U.S. Court of Appeals for the Fifth Circuit revived Wellness Wireless Incorporated's contract claim against Infopia America L.L.C. Wellness Wireless challenged the district court's dismissal of its contract claim for lack of jurisdiction, or, alternatively, dismissal under Federal Rule of Civil Procedure 19 for inability to join a necessary and indispensable party. The case originates from a dispute between two companies that are not parties to this case: Diabetes Center of America and HealthPia America. In 2006, Diabetes America sued HealthPia and its CEO because of a business dispute. In the hope of establishing a business relationship with HealthPia, Infopia agreed to pay Diabetes America $800,000 on behalf of HealthPia as part of a settlement agreement dismissing the suit. Pursuant to the 2008 Settlement, Infopia made a $500,000 lump-sum payment to Diabetes America, and agreed to execute a $300,000 promissory note payable in installments to Diabetes America. In exchange, Diabetes America agreed to release all claims against HealthPia. Infopia defaulted on the promissory note following the first payment. This breached the 2008 Settlement and nullified the conditional release of claims against HealthPia. In late 2008, a default judgment was entered for Diabetes America. Later that same year, Diabetes America allegedly assigned Wellness Wireless all of Diabetes America's rights under the promissory note. Subsequently, in 2010, Infopia and Diabetes America signed a settlement agreement for unpaid obligations under the 2008 promissory note. Under the 2010 Settlement, Infopia paid $300,000 to be released from all claims of Diabetes America. Shortly thereafter, Diabetes America declared bankruptcy. Diabetes America did not include a right to recovery against Infopia on its schedules of assets, nor has it pursued any claim against Infopia during its Chapter 11 case. Wellness Wireless then began to attempt to collect money from Infopia under the promissory note. First, it filed a state court suit on the promissory note, which was dismissed for lack of jurisdiction. Second, Wellness Wireless unsuccessfully sought to collect on the default judgment in the original underlying case between HealthPia and Diabetes America. On this third try, Wellness Wireless filed suit against Infopia. The district court dismissed the case, however, concluding that it lacked subject matter jurisdiction because the case belonged in the bankruptcy court where Diabetes America was a current debtor. Alternatively, the district court held that Diabetes America, as the alleged assignor of the 2008 promissory note, was an indispensable party, requiring dismissal of the case pursuant to Fed. R. Civ. P. 19. Wellness Wireless appealed. The Fifth Circuit noted that the district court's ruling implied its concern that failure to join Diabetes America could subject Infopia to the risk of multiple or inconsistent liabilities. The undisputed facts, however, establish that Diabetes America has no further claim based upon the promissory note, the Fifth Circuit said. It pointed out that after receiving the $300,000 settlement payment in 2010 from Infopia, Diabetes America neither listed such a claim on its bankruptcy schedules nor retained any claim to recovery on the promissory note in its reorganization plan. Further, when asked explicitly by the district court in late 2013 whether the debtor's estate retained any right to collect under the promissory note, the representative of the bankruptcy plan's agent stated to the district court that he did not believe the debtor had any rights under the promissory note. Diabetes America has no interest in the promissory note, and Infopia cannot be subject to additional liability to Diabetes America or the purchaser of its assets, the Fifth Circuit added. The appellate case is, WELLNESS WIRELESS, INCORPORATED, Plaintiff-Appellant, v. INFOPIA AMERICA, L.L.C., Defendant-Appellee, No. 14-20024 (5th Cir.). A copy of the Fifth Circuit's March 24 per curiam decision is available at http://is.gd/y49lgZfrom Leagle.com. About Diabetes America Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers of America, Inc., operated a network of 17 centrally managed medical clinics that provide comprehensive outpatient medical care, primarily to patients with Type 1, Type 2 and Gestational Diabetes. The company's clinics were located in Texas and Houston and generate 51,000 patient visits per year. Diabetes America filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. H. Joseph Acosta, Esq., and Micheal W. Bishop, Esq., at Looper Reed & McGraw, P.C., in Dallas; and Joshua Walton Wolfshohl, Esq., at Porter Hedges, L.L.P., in Houston, represent the Debtor as bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. Judy A. Robbins, the U.S. Trustee for Region 7, appointed three members to the Official Committee of Unsecured Creditors in Diabetes America's Chapter 11 case. The Committee has tapped Butler, Snow, O'Mara, Stevens & Cannada, PLLC, as its counsel. * * * Diabetes America notified the U.S. Bankruptcy Court for the Southern District of Texas that the Effective Date of its Second Amended Chapter 11 Plan of Liquidation occurred on March 2, 2012. The Court entered an order confirming the Debtor's Plan on Dec. 5, 2011. The Plan is based on the Debtor's sale of substantially all of its operating assets to EDG Partners Fund II, L.P. for $3,575,000. The "Cash Purchase Price" as set forth in the EDG Asset Purchase Agreement was originally $4,750,000, but adjusted downward, upon the parties' agreement. DOLAN COMPANY: Former Executives Sidestep Class Action Over BofA ---------------------------------------------------------------- Law360 reported that a Minnesota federal judge dismissed a proposed class action against former executives of business information provider Dolan Co. accusing them of misleading investors over the company's deteriorating relationship with one of its largest customers, Bank of America Corp., ahead of its March 2014 bankruptcy. According to the report, U.S. District Judge Paul A. Magnuson approved the defendant's motion to dismiss the amended complaint, saying plaintiffs failed to establish scienter on the only two "plausibly pled misleadingly false statements." The case is Rand-Heart of New York, Inc., et al v. Dolan et al., Case No. 0:14-cv-03011 (D. Minn.). About The Dolan Company Minneapolis, Minn.-based The Dolan Company (OTC:DOLN) and its subsidiaries provide professional services and business information to the legal, financial and real estate sectors. The Dolan Company and several affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 14-10614 to 14-10637) on March 23, 2014. The Company has said it expects to emerge from bankruptcy within two months. Judge Brendan L. Shannon oversees the cases. Marc Kieselstein, P.C., Jeffrey D. Pawlitz, Esq., and Joseph M. Graham, Esq., at Kirkland & Ellis LLP, serve as the Debtors' counsel. Timothy P. Cairns, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Kevin Nystrom serves as the Company's chief restructuring officer. Faegre Baker Daniels LLP serves as the Debtors' special counsel; Peter J. Solomon Company serves as financial advisors; and Kurtzman Carson Consultants, LLC, serves s noticing and balloting agent. Deloitte Tax LLP serves as tax advisors. Zolfo Cooper LLC also serves as advisors. Dolan listed $236.2 million in total assets and $185.9 million in total debts at Sept. 30, 2013. The petitions were signed by Vicki J. Duncomb, authorized signatory. Global investment management firm T. Rowe Price Associates, Inc., owns nearly 10% of the company's stock, while James Dolan owns 6.8%. Dolan's e-discovery business, DiscoverReady LLC, did not file a chapter 11 petition and its operations will not be affected by the chapter 11 process. On March 18, 2014, Dolan and its lenders and certain of its swap counterparties executed a restructuring support agreement that sets forth the material terms of the chapter 11 restructuring and secures the support of the secured creditors for that process. In accordance with the RSA, the Company commenced solicitation for votes on the chapter 11 plan from secured creditors, the only parties entitled to vote under the plan of reorganization. The chapter 11 plan contemplates that the secured lenders will become the owner of DiscoverReady and The Dolan Company upon the completion of the restructuring process and each business will be operated as separate and distinct entities. Investment funds managed by Bayside Capital, Inc. will become the majority owner of DiscoverReady and The Dolan Company. Bayside Capital is an affiliate of H.I.G. Capital, a global private investment firm with more than $15 billion of equity capital under management. The chapter 11 plan process will allow the filing subsidiaries of the Company to deleverage its capital structure by reducing its projected secured debt obligations from approximately $170 million to approximately $50 million. The RSA also secures support from the lenders to refinance DiscoverReady's capital structure with a $10 million unfunded secured revolving facility. The existing preferred and common shares will be cancelled and will not receive a recovery in the chapter 11 plan. After emergence from bankruptcy, both The Dolan Company and DiscoverReady LLC will be privately held companies. The lenders are to provide a $10 million DIP loan to fund the cash needs of the Company and DiscoverReady through the reorganization process. Bayside Capital is represented in the case by Akin Gump Strauss Hauer & Feld LLP's Michael S. Stamer, Esq., and Sarah Link Schultz, Esq. An Official Committee of Equity Security Holders is represented by Neil B. Glassman, Esq., GianClaudio Finizio, Esq., and Justin R. Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware; Robert J. Stark, Esq., at Brown Rudnick LLP, in New York; and Steven B. Levine, Esq., at Brown Rudnick LLP, in Boston, Massachusetts. The Debtors have filed a request to disband the Equity Committee, given the "hopeless insolvency" of their estates. Dolan Company and its subsidiaries on June 12 disclosed that they have emerged from chapter 11 only 81 days after voluntarily filing for bankruptcy protection. As previously announced, the United States Bankruptcy Court for the District of Delaware confirmed the Company's plan of reorganization on June 9, 2014. DVORKIN HOLDINGS: Allowed to Enter Into FirstMerit Agreements ------------------------------------------------------------- Dvorkin Holdings LLC's bankruptcy trustee received court approval to enter into two separate sale agreements with FirstMerit Bank N.A. The first agreement provides for the sale of a property, which includes a commercial building and 30,640-square-foot of land area located in West Chicago, Illinois. Property owner 920 Roosevelt (West Chicago) LLC will sell it to the bank for $700,000. Meanwhile, the other agreement provides for the sale of a property owned by 975 Nerge (Roselle) LLC. FirstMerit offered $868,500 for the property, which includes a commercial building and 18,405 square feet of land area located in Roselle, Illinois. Dvorkin owns membership interests in both sellers and also serves as their manager, according to court filings. FirstMerit asserts a $15.69 million claim against Dvorkin. Pursuant to the agreements, the bank's claim will be reduced by the total amount of money it will receive from the sales. About Dvorkin Holdings Dvorkin Holdings, LLC, is a real estate holding company that possesses or possessed ownership interests in 70 real properties, either directly or indirectly through limited liability companies or land trusts. Dvorkin Holdings has interests in 40 non-debtor entities. Dvorkin Holdings filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor disclosed $69.9 million in assets and $9.30 million in liabilities as of the Chapter 11 filing. Michael J. Davis, Esq., at Archer Bay, P.A., in Lisle, Ill., serves as counsel to the Debtor. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. The Bankruptcy Court in October 2012 granted the request of Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois, to appoint Gus Paloian as the Chapter 11 Trustee. Seyfarth Shaw, LLP, represents the Chapter 11 Trustee as counsel. Carpenter Lipps & Leland LLP represents the Chapter 11 Trustee as conflicts counsel. On March 16, 2015, the Clerk of the Court reassigned the case to U.S. Bankruptcy Judge Jacqueline P. Cox. DVORKIN HOLDINGS: Can Use Estate Funds to Buy Lombard Property -------------------------------------------------------------- The Chapter 11 trustee of Dvorkin Holdings LLC received approval from a federal judge to use funds of the bankruptcy estate to purchase a property in Lombard, Illinois. U.S. Bankruptcy Judge Jacqueline Cox on March 25 approved the use of funds to buy the property pursuant to the terms of sale agreement between the trustee and Chicago Title Land Trust Company. The trustee will buy the property for $1.7 million from a trust administered by Chicago Title that holds title to the property. Dvorkin holds 50 percent of the beneficial interests in the trust. The transaction is necessary to effectuate a 2014 settlement between the trustee and Colfin Bulls Funding A, LLC. The settlement terminates automatically on April 12, 2015, if the Lombard property is not sold by that date, according to court filings. So far, no third party has made an offer to purchase the property. Dvorkin must either buy it or allow the settlement agreement to terminate, which won't be beneficial to the company, court filings show. Colfin holds a $3.5 million claim against Dvorkin, which would be reduced by more than $1.75 million if the settlement pushed through. Moreover, Dvorkin would acquire the property "free and clear" of mortgages, which is estimated to be worth $1.3 million, according to the trustee. Colfin previously filed an objection to the request in which it asked Judge Cox to issue an opinion about its possible defenses to future enforcement of the settlement in case it breaches the deal. In response, the trustee's lawyer argued that the objection doesn't contest the trustee's business judgment and, therefore, doesn't provide cause to deny his request to use the estate's funds. About Dvorkin Holdings Dvorkin Holdings, LLC, is a real estate holding company that possesses or possessed ownership interests in 70 real properties, either directly or indirectly through limited liability companies or land trusts. Dvorkin Holdings has interests in 40 non-debtor entities. Dvorkin Holdings filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor disclosed $69.9 million in assets and $9.30 million in liabilities as of the Chapter 11 filing. Michael J. Davis, Esq., at Archer Bay, P.A., in Lisle, Ill., serves as counsel to the Debtor. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. The Bankruptcy Court in October 2012 granted the request of Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois, to appoint Gus Paloian as the Chapter 11 Trustee. Seyfarth Shaw, LLP, represents the Chapter 11 Trustee as counsel. Carpenter Lipps & Leland LLP represents the Chapter 11 Trustee as conflicts counsel. On March 16, 2015, the Clerk of the Court reassigned the case to U.S. Bankruptcy Judge Jacqueline P. Cox. EH MITCHELL: Hearing on Bid for Case Conversion Reset to June 23 ---------------------------------------------------------------- The U.S. Bankruptcy Court rescheduled for June 23, 2015, at 10:00 a.m., the hearing to consider: 1. the motion to convert the case of E. H. Mitchell & Company LLC from Chapter 11 to Chapter 7 filed by U.S. Trustee; 2. support memorandum, objection and responses to the motion to dismiss the case filed by creditor Reginald James Laurent; 3. objection to the confirmation of the Debtor's Chapter 11 Plan. The Jan. 13 hearing for these matters was canceled. As reported in the Troubled Company Reporter on Sept. 12, 2014, in a supplemental memorandum, Mr. Laurent stated that since the motion to convert/dismiss was filed, additional statutory grounds to convert the case have been discovered, including: 1) substantial or continuing loss to or diminution; 2) failure to produce CMC's financial records; 3) misrepresentation and gross mismanagement of the estate; 4) unauthorized use of cash collateral; 5) failure to file timely reports; and 6) failure to confirm. Mr. Laurent pointed out that since May 2014, the Debtor, in its disclosure statements, has expressed the preference to be dismissed rather than converted. This change in tack demonstrates deception and the delay tactics, according to Mr. Laurent. Mr. Laurent asks the Court to grant the U.S. Trustee's motion to convert the case because dismissal will only cause delay and further prejudice him. About E. H. Mitchell & Company LLC E. H. Mitchell & Company LLC sought protection under Chapter 11 of the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr. E.D. La.). The case is assigned to Judge Jerry A. Brown. The Debtor is represented by Robert L. Marrero, Esq., at Robert Marrero, LLC, in New Orleans, Louisiana. The Debtor disclosed $300,027,297 in assets and $1,281,148 in liabilities. The petition was signed by Michael Furr, secretary/member. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed three members to the official committee of unsecured creditors. ENERGY FUTURE: Bond Trustee Sues to Control Interest Payouts ------------------------------------------------------------ Law360 reported that a trustee for senior Energy Future Holdings Corp. bondholders brought a lawsuit in New York state court in a bid to dictate the allocation of the bankrupt power giant's postpetition interest payments among certain first-lien creditors. According to the report, the lawsuit filed by Delaware Trust Co., the indenture trustee for a $1.75 billion issuance of senior secured notes, asked for a judge to decide an allocation dispute between fellow top creditors that got put on the backburner in EFH's Delaware bankruptcy proceeding. Delaware Trust's suit names The Bank of New York Mellon Trust Co., the designated escrow agent, and Wilmington Trust NA, the first-lien collateral agent, and brings a claim for specific performance against each. The case is Delaware Trust Co. v. Wilmington Trust NA et al., case number 650792/2015, in the Supreme Court of the State of New York, County of New York. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in book value and liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. ENERGY FUTURE: Judge Rules Against Bondholders in Make-Whole Suit ----------------------------------------------------------------- Law360 reported that bankrupt Texas power giant Energy Futures Holdings Corp. is not liable for a penalty of two-thirds of a billion dollars for early repayment of $4 billion in senior bonds, a judge ruled. According to the report, EFH and the senior bondholders had long clashed in Delaware federal court over whether the company's decision to repay $4 billion in senior bonds entitled those investors to sizable make-whole premiums. U.S. Bankruptcy Judge Christopher Sontchi said that his reading of the contract didn't require them, Law360 said. "The plain language of the indenture does not require payment of an applicable premium upon a repayment of the notes, following an acceleration ... arising from a default for the commencement of 'proceeding to be adjudicated bankrupt or insolvent,'" the report said, citing Judge Sontchi as saying, clarifying that the bankruptcy "was not an intentional default." Law360 also pointed out that deep within Judge Sontchi's refusal to award EFH bondholders the lost interest payments from a $4 billion refinancing lies a stark lesson on why lenders' inattention can neuter their ability to collect make-whole premiums in bankruptcy. While declining to grant a bond trustee's demand for sizable damages from a debt refinancing transaction, Judge Sontchi honed in on loan documents issued in 2010 to decide if creditors that had already recovered 100 percent of their principal debts should receive additional payment, the report noted. The adversary suit is CSC Trust Co. of Delaware v. Energy Future Intermediate Holdings LLC et al., case number 1:14-ap-50363, in the same venue. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in book value and liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. ENERGY FUTURE: Wants Creditors Blocked From Targeting LBO Debt -------------------------------------------------------------- Law360 reported that Energy Future Holdings Corp. resisted a request by the Official Committee of Unsecured Creditors for authority to sue holders of $24.8 billion in first-lien debt used to finance the bankrupt energy giant's boom-era buyout, citing the potential disruption to restructuring negotiations. According to the report, EFH said opening up senior creditors to avoidance litigation from lower-ranking stakeholders would reverse the strides made to date toward a broadly consensual Chapter 11 plan at a critical moment in the 10-month-old bankruptcy. As previously reported by The Troubled Company Reporter, the UCC of Energy Future Holdings Corporation and its affiliates wants standing to pursue lawsuits that collectively may yield over $2 billion in recoveries and over $24 billion in avoided liens for the benefit of unsecured creditors. The EFH Committee is asking asks the Bankruptcy Court to grant the Committee exclusive derivative standing to assert, prosecute, litigate, negotiate and, if appropriate and upon Court approval, settle claims and/or causes of action against the TCEH LBO Creditors on behalf of and for the benefit of the estates of Luminant Generation Company LLC and its debtor subsidiaries that are Subsidiary Guarantors. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The Debtors are seeking to have their cases jointly administered for procedural purposes. As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in book value and liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. EXIDE TECHNOLOGIES: Faces $2.4MM in Penalties; Meeting on April 15 ------------------------------------------------------------------ Valerie Wigglesworth at The Dallas Morning News reports that Exide Technologies faces more than $2.45 million in penalties over breaches at its closed Frisco plant, which are included in a proposal that will be considered at the April 15 meeting of the Texas Commission on Environmental Quality. The Dallas Morning News recalls that violations were issued in 2013 relating to the Company's handling and storage of hazardous waste at its site along Fifth Street. The report says that the state's proposed agreed order is the latest step in the cleanup process in Frisco, where extensive contamination exists from the plant's decades of operations. The proposed order, the report states, calls for keeping the hazardous waste in the Class 2 landfill on site for long-term monitoring. The other option is digging up the waste and transporting it to another permitted facility, but it is impractical and carries a risk to people and the environment, the report adds, citing state regulators. Jim Christie at Reuters reports that U.S. Bankruptcy Judge Kevin Carey signed off on an agreement requiring the Company to pay up to $133 million in cleanup costs to avoid criminal prosecution. About Exide Technologies Headquartered in Milton, Ga., Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002, and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. Exide disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. Schnader Harrison Segal & Lewis LLP was tapped as special counsel. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. Geosyntec Consultants was tapped as environmental consultants to the Committee. Robert J. Keach of the law firm Bernstein Shur as fee examiner has been appointed as fee examiner. He has hired his own firm as counsel. * * * In November 2014, the Bankruptcy Court terminated Exide's exclusive period to propose a Chapter 11 plan. The Court ordered that any party-in-interest, including the Official Committee of Unsecured creditors may file and solicit acceptance of a Chapter 11 Plan. Exide already has a plan of reorganization in place. Reorganized Exide's debt at emergence will comprise: (i) an estimated $225 million Exit ABL Revolver Facility; (ii) $264 million of New First Lien High Yield Notes; (iii) $284 million of New Second Lien Convertible Notes. The Debtor's non-debtor European subsidiaries are also expected to have approximately $23 million; (b) The New Second Lien Convertible Notes will be convertible into 80% of the New Exide Common Stock on a fully diluted basis; and (c) New Exide Common Stock would be allocated as follows: 15.0% to Holders of Senior Secured Note Claims after conversion of the New Second Lien Convertible Notes into New Exide Common Stock; 3.0% on account of the DIP/Second Lien Conversion Funding Fee; and 2.0% on account of the DIP/Second Lien Backstop Commitment Fee. In December 2014, Judge Kevin Carey denied the request of Exide shareholders for appointment of an official equity holders' committee. The shareholders objected to the Plan. Judge Carey, on March 27, 2015, signed an order confirming Exide's Fourth Amended Plan of Reorganization. F&H ACQUISITION: Deadline to Remove Suits Extended to June 10 ------------------------------------------------------------- U.S. Bankruptcy Judge Kevin Gross has given F&H Acquisition Corp. until June 10, 2015, to file notices of removal of lawsuits involving the company and its affiliates. About F & H Acquisition Corp. Wichita, Kansas-based F & H Acquisition Corp., et al., owners of the Fox & Hound, Champps, and Bailey's Sports Grille casual dining restaurants, filed sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13220) on Dec. 16, 2013, to quickly sell their assets. As of the bankruptcy filing, the Debtors had 101 restaurants located in 27 states and 6,000 employees. F & H disclosed $122 million in assets and $123 million in liabilities as of the Chapter 11 filing. The Debtors are represented by Robert S. Brady, Esq., Robert F. Poppiti, Jr., Esq., and Rodney Square, Esq., at Young, Conaway, Stargatt & Taylor, LLP of Wilmington, DE; and Adam H. Friedman, Esq., Jordana L. Nadritch, Esq., and Jonathan T. Koevary, Esq. at Olshan Frome Wolosky, LLP of New York, NY. Imperial Capital LLC as financial advisor; and Epiq Bankruptcy Solutions as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington; and Jeffrey N. Pomerantz, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Los Angeles, California. By order dated Feb. 28, 2014, the Court approved the sale of substantially all of the assets pursuant to an Asset Purchase Agreement, dated as of Feb. 7, 2014, by and among the Debtors and Cerberus Business Finance, LLC, as buyer. The sale closed on March 12, 2014. FIRSTPLUS FINANCIAL: NJ Judge Shoots Down Recusal Request --------------------------------------------------------- Law360 reported that a New Jersey federal judge refused to recuse himself from sentencing a reputed associate of the Lucchese crime family convicted in the $12 million looting of a mortgage lender, rejecting claims that his comments in another case gave the appearance of partiality. According to the report, Salvatore Pelullo, convicted on fraud and conspiracy charges, had requested that U.S. District Judge Robert B. Kugler recuse himself because the judge wryly suggested last year during an unrelated criminal hearing against Andrew Clarke that Pelullo provided legal advice to Clarke. Law360 also reported that prosecutors fought back against efforts by Mr. Pelullo to have a judge recused from his sentencing in New Jersey federal court over the $12 million looting of a publicly traded mortgage lender, calling the claim meritless. The prosecutors said the recusal request is untimely. The case is USA v. SCARFO et al., Case No. 1:11-cr-00740 (D.N.J.). About FirstPlus Financial Based in Beaumont, Texas, FirstPlus Financial Group, Inc. (Pink Sheets: FPFX) -- http://www.firstplusgroup.com/-- was a diversified company that provided commercial loan, consumer lending, residential and commercial restoration, facility (janitorial and maintenance) services, insurance adjusting services, construction management services and a facilities and restoration franchise business. The Company had three direct subsidiaries, Rutgers Investment Group, Inc., FirstPlus Development Company and FirstPlus Enterprises, Inc. In turn, FirstPlus Enterprises, Inc., had three of its own direct subsidiaries, FirstPlus Restoration Co., LLC, FirstPlus Facility Services Co., LLC and The Premier Group, LLC. FirstPlus Restoration and FirstPlus Facility jointly owned FirstPlus Restoration & Facility Services Company. Additionally, FirstPlus Development had one direct subsidiary FirstPlus Acquisitions-1, Inc. A subsidiary of FirstPlus Financial Group -- FirstPlus Financial Inc. -- filed for Chapter 11 bankruptcy in March 1999 before the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, amid turmoil in the asset-backed securitization markets and the lack of a reliable, committed secondary take-out source for high LTV loans. A modified third amended reorganization plan was confirmed in that case in April 2000. FirstPLUS Financial Group filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 09-33918) on June 23, 2009. Aaron Michael Kaufman, Esq., and George H. Tarpley, Esq., at Cox Smith Matthews Incorporated, served as counsel. The Debtor had total assets of $15,503,125 and total debts of $4,539,063 as of June 30, 2008. FirstPLUS Financial Group disclosed $1,264,637 in assets and $10,347,448 in liabilities as of the Chapter 11 filing. Matthew D. Orwig was appointed as the Chapter 11 trustee in the Debtor's cases. He is represented by Peter A. Franklin, Esq., and Erin K. Lovall, Esq., at Franklin Skierski Lovall Hayward LLP. Franklin Skierski was elevated to lead counsel from local counsel in the stead of Jo Christine Reed and SNR Denton US LLP, due to the maternity leave of Ms. Reed. Kurtzman Carson Consultants served as notice and balloting agent. FLORIDA ENGINEERED: Shareholders on Hook for IRS Debts ------------------------------------------------------ Law360 reported that the U.S. Tax Court ruled that minority shareholders in a defunct construction company are partially responsible for paying $5 million the company owes the Internal Revenue Service since they improperly received money from the business. According to the report, defunct Florida Engineered Construction Products Corp. owes more than $120 million in IRS deficiencies, penalties and interest, but the company cannot pay it and the agency is seeking $5 million of that amount from two minority shareholders based on money they received between 2003 and 2007. FREEDOM INDUSTRIES: Pleads Guilty to Pollution Charges ------------------------------------------------------ John Raby, writing for The Associated Press, reported that now-bankrupt chemical company Freedom Industries pleaded guilty to three pollution charges related to last year's spill that contaminated a West Virginia river. According to the report, Mark Welch, chief restructuring officer of Freedom Industries, entered the plea on behalf of the company in federal court to negligent discharge of a pollutant and unlawful discharge of refuse matter, both misdemeanors, and violating a permit condition under the Clean Water Act, a felony. About Freedom Industries Freedom Industries Inc. is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, 2014, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. FRESH & EASY: Closes 50 Stores in Calif., Ariz., Nev. ----------------------------------------------------- The Associated Press reported that Fresh & Easy is closing about 50 stores in California, Arizona and Nevada as the grocery chain pursues a new business model. According to the report, the company said that by selling the stores, it can invest in new fresh food convenience stores. About Fresh & Easy Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy owes $738 million to Cheshunt, England-based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Committee. FTI Consulting, Inc. serves as its financial advisor. The Debtors closed, on or about Nov. 26, 2013, the sale of about 150 supermarkets plus a production facility in Riverside, California, to Ron Buckle's Yucaipa Cos. Pursuant to the sale terms, the bankruptcy company changed its name, and the name of the case, to Old FENM Inc. Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware on July 2, 2014, issued an order confirming Old FENM, Inc., et al.'s second amended joint Chapter 11 plan of reorganization. GGW BRANDS: Suit Accuses Joe Francis of Illegally Spending Money ---------------------------------------------------------------- Katy Stech, writing for The Wall Street Journal, reported that lawyers who sold the Girls Gone Wild porn empire out of bankruptcy are accusing founder Joe Francis of illegally spending the company's cash on the palatial estate he built near Puerto Vallarta, Mexico. According to the report, in a recent lawsuit, lawyers who are trying to pay Girls Gone Wild's older debts are trying to get back more than $2.2 million that was spent on the upkeep of the Casa Aramara estate, where the Kardashians have been photographed bobbing in the ocean waves off Mexico's Pacific coast. The 47-page lawsuit filed in U.S. Bankruptcy Court in Los Angeles doesn't directly ask for the Casa Aramara property to be turned over to Girls Gone Wild's bankruptcy estate but lawyers planted wording in the document that could force the property to be sold if their collection efforts don't go well, the report said. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. GGW Marketing, LLC, another affiliate, filed a voluntary Chapter 11 petition on May 22, 2013, before the Bankruptcy Court for the Central District of California (Los Angeles). The case is assigned Case No. 13-23452. Martin R. Barash, Esq., and Matthew Heyn, Esq., at Klee, Tuchin, Bogdanoff and Stern, LLP, in Los Angeles, California, represent GGW Marketing. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. He is represented by David M Stern, Esq., Jonathan Mark Weiss, Esq., and Robert J Pfister, Esq., at Klee Tuchin Bogdonaff and Stern LLP. In April 2014, the Chapter 11 Trustee sold the "Girls Gone Wild" video franchise and its assets for $1.83 million. An auction set earlier that month was canceled because there were no bids to compete with the so-called stalking horse, who isn't affiliated with founder Joe Francis. U.S. Bankruptcy Judge Sandra Klein in California in March has approved the Chapter 11 plan of liquidation proposed by trustee R. Todd Neilson for GGW Brands, creator of the "Girls Gone Wild" franchise. GRAPHIC PACKAGING: S&P Revises Outlook to Stable & Affirms BB+ CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its rating outlook on Atlanta, Ga.-based Graphic Packaging International Inc. to stable from positive. At the same time, S&P affirmed its ratings, including its 'BB+' corporate credit rating, on the company. The issue ratings and recovery ratings on the company's secured bank debt and senior notes are unchanged. S&P's ratings affirmation and outlook revision to stable reflect its view that Graphic Packaging will maintain credit measures over the next 12 to 24 months at the stronger end of a "significant" financial risk profile, with debt to EBITDA in the low 3x range and funds from operations (FFO) to debt of about 25% to 30%. S&P believes these credit measures are adequate for the 'BB+' rating. S&P's estimates incorporate its adjustments for pension and operating lease obligations. The stable outlook reflects Standard & Poor's view that credit measures will remain in a relatively narrow range of about 3x debt leverage and 25% to 30% of funds from operations to debt), both at the stronger end of the "significant" range. "We expect Graphic Packaging will seek to continue to grow via acquisitions (either fully or partially debt-financed) over the next few years, which could result in debt leverage remaining in the significant range (3x to 4x) after adjusting for pension and lease obligations," said Standard & Poor's credit analyst Thomas Nadramia. "Still, we see cushion at the current rating level even if debt leverage pro-forma for an acquisition reached 4x, assuming the company planned to rapidly reduce debt leverage from free cash flow." S&P could raise its ratings if Graphic Packaging commits to and demonstrates an ability to maintain a financial risk profile consistent with an investment grade rating, specifically keeping debt to EBITDA below 3x and FFO to debt greater than 30%. In addition, a widening of the company's product or geographic focus could enhance its business risk profile, serving as secondary considerations for an upgrade. Given the stability of Graphic Packaging's end markets and cash flows, S&P views a downgrade to be unlikely over the next 12 months. However, one could occur if the company adopted a more aggressive financial policy wherein debt-financed share repurchases or acquisitions caused debt leverage to exceed 4x or FFO to debt under 20% on a sustained basis with little prospect of near-term improvement. GT ADVANCED: Bondholders Top TPG in Ch. 11 Loan Competition ----------------------------------------------------------- Law360 reported that a group of GT Advanced Technologies Inc. bondholders that initially lost out on funding the company's restructuring has convinced it to accept a sweetened $95 million financing offer over a rival lending package from TPG Capital. According to the report, two weeks after selecting a $100 million bankruptcy loan from TPG's specialty lending unit, GT did an about-face and accepted a competing loan offer from unsecured convertible bondholders that its lawyers said "provides better economic and non-economic terms than the TPG commitment." The Troubled Company Reporter previously reported that U.S. Bankruptcy Judge Henry J. Boroff in New Hampshire declined to quickly rule on GT's request for approval of a $100 million loan commitment, instead requiring the Debtors to file revised papers if the lender consents to a hearing schedule and required creditor objections. 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. HAIMIL REALTY: No Quick Ruling on Dispute With Lender ----------------------------------------------------- Bankruptcy Judge Michael E. Wiles denied the motion for summary judgment filed by Haimil Realty Corp., which seeks a determination that, based upon the undisputed facts, (i) the Debtor does not owe any sums to Dominion Financial Corporation, with respect to an installment promissory note in the amount of $3.4 million executed by the Debtor in favor of Dominion in December 2004, and (ii) the amended complaint to foreclose on the mortgage that served as security for the $3.4 million note should be dismissed. The Debtor obtained financing from Dominion in connection with a plan to convert a building it owned in New York City into condominium units. In December 2004, the Debtor executed a $3.4 million note at 12% interest in favor of Dominion, secured by a mortgage on the Property. Starting in 2006, Dominion made additional loans to Haimil. A $4 million note evidencing the additional debt was executed in March of 2008 but was back-dated to November 15, 2006. On August 29, 2012, Dominion commenced a foreclosure action against the Debtor in New York Supreme Court, alleging that the Debtor had ceased making installment payments under the $3.4 million note in May 2010 and had failed to pay real estate taxes. On May 1, 2014, the state court ordered that a receiver be appointed for the penthouse residential unit at the Property. In addition, the parties entered into a stipulation requiring any rents collected with respect to the commercial unit be applied first to real estate taxes, with any balance segregated until the conclusion of the case. On June 11, 2014, Haimil filed a chapter 11 petition and, thereafter, the state court foreclosure action was removed to the Bankruptcy Court. Haimil filed the Summary Judgment Motion as well as leave to file an amendment to assert the statute of limitations as an affirmative defense. Dominion opposed the request for summary judgment. The case is, DOMINION FINANCIAL CORPORATION, Plaintiff, v. HAIMIL REALTY CORP., NYC DEPARTMENT OF FINANCE, NYS DEPARTMENT OF TAXATION AND FINANCE, and "JOHN DOE(S) AND JANE DOE(S)," the names being fictitious and unknown to Plaintiffs, the persons or parties intended being the tenants, occupants, persons or entities, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendants, Adv. Pro. No. 14-02052 (MEW)(S.D.N.Y.). A copy of the Court's March 24, 2015 Memorandum Decision is available at http://is.gd/HQ4rG8from Leagle.com. Counsel to the Debtor: Eric C. Zabicki, Esq. PICK & ZABICKI LLP 369 Lexington Avenue, 12th Floor New York, NY 10017 Special Counsel to the Debtor: Glenn Backer, Esq. GLENN BACKER, ESQ. 280 Madison Avenue, Suite 300 New York, NY 10016 Counsel to Dominion Financial Corporation: Allan B. Mendelsohn, Esq. ALLAN B. MENDELSOHN, ESQ. 38 New Street Huntington, NY 11743 Haimil Realty Corp., based in New York, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 14-11779) on June 11, 2014, in Manhattan. Douglas J. Pick, Esq., at Pick & Zabicki LLP, serves as the Debtor's counsel. In its schedules, the Debtor listed total assets of $5.57 million and total liabilities of $332,847. The petition was signed by Menachem Haimovich, president. HALLMARK COLLECTION: Mid-Continent Says Magistrate Erred in Fight ----------------------------------------------------------------- Law360 reported that Mid-Continent Casualty Co. urged a Texas federal court to reject a magistrate judge's recommendation and grant its bid to dismiss a suit claiming it must pay part of a $63 million judgment an architectural firm won after suing defunct homebuilder Hallmark Collection of Homes LLC for using its designs without permission. According to the report, the insurer argued in a brief that U.S. Magistrate Judge Mary Milloy erred in concluding that its motion to dismiss Kipp Flores Architects LLC's suit for lack of subject matter jurisdiction should be denied. The Texas magistrate judge recommended denying Mid-Continent's bid to dismiss the lawsuit, reversing course from an earlier recommendation, Law360 said. In January, the magistrate had found that Mid-Continent's motion to dismiss for lack of subject matter jurisdiction should be granted because its insured, Hallmark Collection, hadn't complied with a notice-of-suit provision. The Fifth Circuit earlier rejected Mid-Continent's bid to certify legal questions to the Texas Supreme Court and vacate a ruling that the insurer must pay "advertising injury" damages in a suit brought by the architectural firm against Hallmark Collection, Law360 reported. In a brief order, a panel of the appellate court denied Mid-Continent's motion to certify questions to the Texas high court regarding the scope of coverage for an advertising injury based on copyright infringement, the report said. The case is Kipp Flores Architects LLC v. Mid-Continent Casualty Co., Case Number 4:14-cv-02702 (S.D. Tex.). HELLAS TELECOM: Liquidators Want Foreign Laws in Clawback Suit -------------------------------------------------------------- Law360 reported that liquidators for Hellas Telecommunications II SCA have asked a New York bankruptcy judge for permission to add English and Luxembourgish fraudulent conveyance charges to their $1.1 billion suit against TPG Capital and Apax Partners LLP. As previously reported by The Troubled Company Reporter, the New York bankruptcy judge has once again ruled that TPG and Apax must face allegations they plundered $1.1 billion from Hellas, rejecting the private equity giants' claims that new appellate authority protected them from clawback liability. U.S. Bankruptcy Judge Martin Glenn denied the companies' motion to dismiss an unjust enrichment claim against them from Hellas' liquidators, finding that the recent expansion of the U.S. Bankruptcy Code's safe-harbor protections for securities transactions still had certain exceptions. The New York bankruptcy judge previously trimmed the lawsuit, limiting potential clawback liability to the firms' U.S.-based investment funds. In a lengthy opinion, Judge Glenn barred the foreign liquidators charged with digging up funds for Hellas creditors from suing the private equity giants under New York state law for taking EUR973.7 million ($1.1 billion) out of the Greek telecom in an allegedly fraudulent transaction. TPG and Apax have said that the lawsuit cannot stand in light of new appellate authority protecting a wider universe of prebankruptcy payments from clawback liability. The private equity giants said in a reply brief that a recent expansion of the U.S. Bankruptcy Code's safe-harbor protections for securities transactions was fatal to a lawsuit demanding they disgorge payments received from Hellas before its 2009 collapse. The case is In re: Hellas Telecommunications (Luxembourg) II SCA, case number 1:12-bk-10631, in the U.S. Bankruptcy Court for the Southern District of New York. About Hellas Telecommunications In February 2007, Hellas Telecommunications was purchased from TPG Capital LP and Apax Partners by the Italian telecommunications giant Weather Group. The Company later suffered liquidity problems and commenced administration proceedings in the U.K. in November 2009. The administrators sold 100% of the shares of Wind Hellas to the existing owners, the Weather Group. An order placing the Company into liquidation was entered on Dec. 1, 2011. Andrew Lawrence Hosking and Carl Jackson, as Joint Liquidators petitioned for the Chapter 15 protection for the Company (Bankr. S.D.N.Y. Case No. 12-10631) on Feb. 16, 2012. Mr. Jackson was later succeeded by Simon James Bonney, and then recently by Bruce Mackay. Bankruptcy Judge Martin Glenn presides over the Chapter 15 case. The Debtor estimated assets and debts of more than $100,000,000. The Debtor did not file a list of creditors together with its petition. The Foreign Representatives commenced the lawsuit against various entities, captioned as, Hosking v. TPG Capital Management, L.P., et al., No. 14-01848 (MG) (Bankr. S.D.N.Y. March 13, 2014). TPG is represented by Paul M. O'Connor, III, Esq., and Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres, & Friedman, LLP of New York, NY. APAX is represented by Robert S. Fischler, Esq., and Stephen Moeller-Sally, Esq., at Ropes & Gray LLP of New York, NY. TCW is presented by Wayne S. Flick, Esq., and Amy C. Quartarolo, Esq., at Latham & Watkins LLP of Los Angeles, CA. Nikesh Aurora is represented by William F. Gray, Jr., Esq., and Alison D. Bauer, Esq., at Torys LLP of New York, NY and Michael A. Sherman, Esq., at Stubbs Alderton & Markiles, LLP of Sherman Oaks, CA. U.S. counsel to the Foreign Representatives as against all Defendants except Deutsch Bank AG and Nikesh Arora are Howard Seife, Esq., Thomas J. McCormack, Esq., Andrew Rosenblatt, Esq., and Marc D. Ashley, Esq., at CHADBOURNE & PARKE LLP. U.S. counsel to the Foreign Representatives as against Deutsch Bank AG and Nikesh Arora are Alexander H. Schmidt, Esq., Alan McDowell, Esq., and Jeremy Cohen, Esq., at WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP. HIPCRICKET INC: Unsecured Creditors Has 17.% Recovery Under Plan ---------------------------------------------------------------- Hipcricket, Inc., amended the disclosure statement explaining its plan of reorganization to provide that holders of general unsecured claims are expected to recover 17.6% to 21.4% of their total allowed claim amount. Pursuant to the ESW Bid, ESW Capital has agreed to sponsor a plan of reorganization, in which it will receive the Reorganized Debtor's new equity in exchange for: (i) $4.5 million in cash, plus (ii) an amount equal to the cure amounts up to $500,000, plus (iii) amounts approved by the Court with respect to the Debtor's key employee incentive plan up to $255,000, plus (iv) bid protections in the amount of $325,000, plus (v) an overbid in the amount of $3,170,000, minus (vi) the net amount of the replacement debtor in possession financing facility outstanding as of the closing date (which is expected to be less than $4.5 million). The Debtor projects that, following payment of senior claims pursuant to the Plan and Plan implementation costs, approximately $1,990,000 will be available for distribution to holders of Allowed General Unsecured Claims pursuant to the terms of the Plan. As a result, the Debtor projects that holders of Allowed General Unsecured Claims will receive a recovery ranging from approximately 17.6% to 21.4% of the face value of their claims. Andrew R. Vara, the Acting United States Trustee for Region 3, objected to the Debtor's motion seeking a combined hearing on the Disclosure Statement and Plan, complaining that the Disclosure does not contain adequate information to allow a creditor to make an informed judgment regarding whether to vote in favor of the plan. In addition, at the confirmation stage, the U.S. Trustee anticipates raising certain inappropriate provisions currently set forth in the Plan, which may render the Plan unconfirmable as drafted. A blacklined version of the Amended Disclosure Statement dated March 27, 2015, is available at http://bankrupt.com/misc/HIPCRICKETds0327.pdf About Hipcricket Inc. 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 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. The Debtor filed plan of reorganization sponsored by ESW Capital, LLC. The Debtor and ESW Capital negotiated a replacement postpetition financing facility, providing up to $4.5 million in financing, on substantially similar terms as the DIP Facility provided by SITO Mobile. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Committee retained Cooley LLP as lead counsel, Pepper Hamilton LLP as Delaware counsel, and Getzler Henrich & Associates, LLC, as financial advisor. HOP 1 ENTERPRISES: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: HOP 1 Enterprises, Inc. 70 E. Kaahumanu Ave. Kahului, HI 96732 Case No.: 15-00397 Chapter 11 Petition Date: March 30, 2015 Court: United States Bankruptcy Court District of Hawaii (Honolulu) Judge: Hon. Robert J. Faris Debtor's Counsel: Christopher J. Muzzi, Esq. TSUGAWA BIEHL LAU & MUZZI, LLLC 1132 Bishop Street, Ste. 2400 Honolulu, HI 96813 Tel: 808.531.0490 Fax: 808.534.0202 Email: cmuzzi@hilaw.us Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Ernesto Abarro, president. A list of the Debtor's 14 largest unsecured creditors is available for free at http://bankrupt.com/misc/hib15-00397.pdf HUTCHESON MEDICAL: Has Access to Cash Collateral Until April 6 -------------------------------------------------------------- U.S. Bankruptcy Judge Paul W. Bonapfel, in a fourth interim order, authorized Hutcheson Medical Center, Inc., et al., to use cash collateral of Regions Bank and U.S. Foods, Inc. The Debtors are authorized to use cash collateral to pay the actual expenses incurred for utility deposits, Court-approved fees and expenses of the ombudsman and fees of the Office of the U.S. Trustee until April 6, 2015. The Court overruled all objections to the entry of the Fourth Interim Order. As adequate protection from any diminution in value of the lender's collateral, the Debtors will grant the secured parties replacement lien, supplemental lien, subject to carve out on certain expenses. The challenge period for the Official Committee of Unsecured Creditors was set for March 25, after which time any such challenges will be deemed finally and conclusively barred. The final hearing on the matter will be held on April 1, at 9:25 a.m. Objections, if any, were due March 30. About Hutcheson Medical Center Hutcheson Medical Center, Inc., operates the 179-bed hospital and related ancillary facilities, including, without limitation, a skilled nursing home and an ambulatory surgery center, located in Ft. Oglethorpe, Georgia, known as Hutcheson Medical Center. HMC leases the land and buildings that comprise the Medical Center from The Hospital Authority of Walker, Dade and Catoosa Counties. HMC and Hutcheson Medical Division, Inc., sought Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Case No. 14-42863 and 14-42864) in Rome, Georgia, on Nov. 20, 2014. The cases are jointly administered under Case No. 14-42863. The cases have been assigned to the Honorable Paul W. Bonapfel. The Debtors are represented by Ashley Reynolds Ray, Esq., and J. Robert Williamson, Esq., at Scroggins and Williamson, in Atlanta, Georgia. The Debtors' Chapter 11 Plan and Disclosure Statement are due March 20, 2015. HMC disclosed $32.8 million in assets and $52.9 million in liabilities as of the Chapter 11 filing. No request has been made for the appointment of a trustee or examiner. JOHN LE TUNG: Arbitration Award in Favor of Cal. Mortgage Upheld ---------------------------------------------------------------- The Court of Appeals of California, First District, Division Four, tossed an appeal by John Le Tung from a judgment confirming an arbitration award in favor of California Mortgage and Realty, Inc. The arbitrator denied Tung relief on his claims against California Mortgage arising out of a 2005 construction loan. Tung contends the judgment must be reversed because (1) the trial court erred by compelling him to submit his claims against respondent to arbitration; and (2) the arbitrator committed misconduct. In 2001, Tung commenced a development project at commercial property he owned on 12th Street in Oakland, California. He obtained financing for his project from Roger and Loretta Woo. In the fall of 2005, Tung needed a new source of funding to complete his construction project and employed a mortgage broker, Executive Mortgage, to help him secure that funding. Acting on the advice of his broker, Tung transferred his 12th Street property to Saigon Plaza Associates, LLC, a limited liability corporation of which he became a member and manager. Shortly thereafter, Saigon obtained a $5.75 million construction loan from CMR Mortgage Fund, LLC. California Mortgage was the Lender's broker for the 2005 loan. The parties involved in the 2005 loan transaction also entered into a stand-alone "Arbitration Agreement." This agreement provided that, the Borrower (Saigon), the Company (California Mortgage) and the Lender (CMR) all agreed that "any Dispute involving the Loan, including, but not limited to claims arising from the origination, documentation, disclosure, servicing, collection or any other aspect of the Loan transaction or the coverage or enforceability of this Agreement, shall be resolved exclusively by binding arbitration under the terms of this Agreement. This Agreement shall also be binding on the agents, successors and assigns of the parties and the Loan." The arbitration agreement was signed by Tung as the managing member of Saigon and by representatives of CMR and California Mortgage. In August 2006, California Mortgage recorded a notice of default and election to sell the 12th Street property. The following month, Tung on behalf of Saigon and California Mortgage on behalf of the beneficiaries of the 2005 loan entered into a "Forbearance Agreement and Release," which temporarily resumed construction funding and forestalled the foreclosure proceedings. However, California Mortgage recorded another notice of trustee's sale in December 2006. Saigon filed for bankruptcy to prevent completion of the foreclosure, and all of the guarantors of the 2005 loan, including Tung, also filed personal bankruptcy cases. California Mortgage obtained relief from the automatic stay in Saigon's bankruptcy case and completed the foreclosure sale of the 12th Street property in 2009. In January 2010, California Mortgage, Saigon and the guarantors of the 2005 loan other than Tung executed a "Compromise Agreement and Release" of all claims arising out of the 2005 loan. This January 2010 settlement agreement provided, among other things, that the guarantors would pay respondent $1.25 million. The parties also executed general releases, with Saigon acting on its own behalf and on behalf of its "members." However, California Mortgage and the guarantors reserved their right to assert claims against Tung personally who elected not to participate in the settlement. Tung's Chapter 11 case was dismissed on February 24, 2010. In March 2010, Tung initiated an action against several defendants who were allegedly liable to him for damages resulting from the failed development project at the 12th Street property. Tung also alleged his claims arising out of the 2005 loan were timely because they were stayed during the pendency of his bankruptcy case and that they were not barred by the 2010 settlement agreement among California Mortgage, Saigon and the other guarantors of the 2005 loan because he was specifically excepted from that agreement. In his prayer for relief against California Mortgage, Tung sought rescission of a provision in the 2005 loan which allegedly granted California Mortgage a security interest in Tung's Masonic Avenue property, avoidance of liens claimed by California Mortgage against that property, and compensatory and punitive damages. Tung filed a demand for arbitration with the American Arbitration Association. In June 2013, the arbitrator made a "final and binding Award" that Tung take nothing from California Mortgage and that each party was to bear its own attorneys fees and costs of suit. Tung then filed a petition to vacate the arbitration award on the grounds that he was "entitled to judicial review in circumstances involving serious problems with the award itself, or with the fairness of the arbitration process. California Mortgage requested the trial court to affirm the arbitration award. The trial court ultimately confirmed the arbitration award. Tung timely appealed. The case is, JOHN LE TUNG, Plaintiff and Appellant, v. CALIFORNIA MORTGAGE AND REALTY, INC., Defendant and Respondent, No. A140659 (Cal. Ct. App.). A copy of the Appeals Court's March 30, 2015 decision is available at http://is.gd/CJvNf8from Leagle.com. John Le Tung filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-46203) on June 7, 2011. JOHN PATRICK STOKES: Mont. Supreme Court Affirms Summary Judgment ----------------------------------------------------------------- A divided Supreme Court of Montana upheld a district court order dated July 23, 2014, granting summary judgment to Greg Duncan and Kathleen Glover, and against John Stokes. Stokes sued Duncan and his paralegal Kathleen Glover, seeking damages for legal malpractice, breach of contract and breach of fiduciary duty. Stokes retained Duncan as attorney to advise him on how to maintain his appeal of the judgment in a defamation case. Stokes said Duncan has failed to advise him that the defamation judgment would not be discharged by filing bankruptcy, and that he would lose control over the appeal of that case. The bankruptcy Trustee moved to intervene in this action as the real party in interest, claiming the malpractice action as an asset of the bankruptcy estate. In May 2012 the District Court granted the Trustee's motion to stay all proceedings in the malpractice action. In 2008, a jury in the defamation case in Flathead County returned a verdict against Stokes for approximately $4 million. Stokes said Duncan had advised him that he could discharge the judgment in bankruptcy and maintain his appeal. In March 2009, Duncan filed a Chapter 11 bankruptcy petition on Stokes' behalf in the United States Bankruptcy Court for the District of Montana. After a meeting of creditors in April 2009, Duncan moved to withdraw as Stokes' attorney in the bankruptcy because of disagreements with Stokes over who was responsible for Stokes' incomplete disclosure of assets. In June 2009, the Bankruptcy Court granted Duncan's motion to withdraw and Stokes proceeded with the bankruptcy proceeding. In September 2009, the Bankruptcy Court granted the motion of the United States Bankruptcy Trustee, converting Stokes' proceeding from a Chapter 11 to Chapter 7 bankruptcy and appointing a Trustee. In the bankruptcy action, the Trustee proposed to sell the bankruptcy estate's interest in Stokes' state court action against Duncan and Glover. The Bankruptcy Court approved the sale of the action at auction. Duncan outbid Stokes and in September 2012 purchased the bankruptcy estate's interest in the action for $12,000. The Trustee sold the bankruptcy estate's interest in the malpractice action to Duncan "as is" with no warranty of title. The Bankruptcy Court approved the sale to Duncan and no party challenged the transaction. In October 2012, Duncan and Glover petitioned the Bankruptcy Court for an order declaring that the malpractice claim was the property of the bankruptcy estate and that it had been sold to Duncan. Stokes' Chapter 7 bankruptcy proceeding was discharged in January 2013, and in February 2013 the Bankruptcy Court granted Duncan and Glovers' motion for summary judgment on their petition. The Bankruptcy Court reviewed the law governing the determination of when a cause of action becomes an asset of the bankruptcy estate, and considered Stokes' argument that the suit against Duncan and Glover did not accrue prior to bankruptcy because he was not damaged until his bankruptcy was converted to a Chapter 7 proceeding. The Bankruptcy Court examined Stokes' complaint in the malpractice action and determined that "[m]uch of this alleged malpractice took place prior to the filing of [Stokes'] Chapter 11 petition." The Court explained: "A fair reading of the complaint in [the malpractice action] shows clearly that the malpractice in the form of advice and preparation of Stokes' schedules occurred prior to the filing of the Chapter 11 petition, with further malpractice after the petition." Given the "broad scope" of Federal bankruptcy law in 11 USC Sec. 541, the Bankruptcy Court concluded that Stokes' claims against Duncan and Glover in State court were property of the bankruptcy estate that had been purchased by Duncan. Stokes appealed to the United States Bankruptcy Appellate Panel of the Ninth Circuit. In September 2013, the Appellate Panel vacated the Bankruptcy Court judgment, holding that the Court lacked subject matter jurisdiction to determine ownership of the malpractice action against Duncan and Glover because it had been sold and was no longer part of the estate. In October 2013, Duncan and Glover appeared in the State District Court malpractice action and moved to lift the stay and for summary judgment. In July 2014, the District Court lifted the stay and granted Duncan and Glover's motion for summary judgment, holding that Stokes' claims against them were property of the bankruptcy estate and had been purchased by Duncan. Stokes filed this appeal. Chief Justice Mike McGrath of the Supreme Court of Montana delivered the Opinion of the Court. Justices Michael E Wheat, Beth Baker, and James Jeremiah Shea concurred. Justice Michael Cotter dissented. "The question of when Stokes' claims against Duncan and Glover accrued requires resolution of factual issues and thus is not amenable to summary judgment," he said. A copy of the Supreme Court's March 24, 2015 decision is available at http://is.gd/wbQQ41from Leagle.com. The case is, JOHN PATRICK STOKES, Plaintiff and Appellant, v. GREG W. DUNCAN and KATHLEEN M. GLOVER, Defendants and Appellees, No. DA 14-0483 (Mont.). KARMALOOP INC: Can Employ Rust Omni as Claims & Noticing Agent -------------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Karmaloop, Inc. and KarmaloopTV, Inc., to employ Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., as claims and noticing agent in the Chapter 11 cases. Rust Omni will assume full responsibility for the distribution of notices and maintenance, processing, and docketing proofs of claim filed in the Chapter 11 cases. About Karmaloop Inc. Karmaloop, Inc., founded in 1999 by Gregory Selkoe, is a cross-platform digital commerce and media property company that specializes in the sale of global streetwear fashion and culture. Karmaloop specializes in the sale of over 400 brands of apparel, shoes and accessories via an e-commerce business model, primarily using the Web site http://wwww.karmaloop.com/ The company has nearly 5 million monthly unique visitors, 2.2 million Facebook followers and 800,000 Twitter followers. On March 23, 2015, Karmaloop, Inc. and KarmaloopTV, Inc. filed voluntary Chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 15-10635). The cases are assigned to Judge Kevin J. Carey. The Debtors tapped Burns & Levinson LLP and Womble Carlyle Sandridge & Rice, LLP as attorneys; CRS Capstone Partners LLC as financial advisor and Capstone's Brian L. Davies, Jr., as restructuring officer; and Omni Management Group, LLC as claims and noticing agent. KRISHNA INVESTMENTS: Case Summary & 3 Top Unsecured Creditors ------------------------------------------------------------- Debtor: Krishna Investments, LLC, a Limited Liability Company 1110 N. 7 Highway Blue Springs, MO 64014 Case No.: 15-40882 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: March 30, 2015 Court: United States Bankruptcy Court Western District of Missouri (Kansas City) Judge: Hon. Arthur B. Federman Debtor's Counsel: Joanne B. Stutz, Esq. EVANS & MULLINIX, P.A. Suite 200, 7225 Renner Road Shawnee, KS 66217 Tel: 913-962-8700 Fax: 913-962-8701 Email: jstutz@emlawkc.com Total Assets: $1 million Total Liabilities: $2.85 million The petition was signed by Girish Patel, member. A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/mowb15-40882.pdf LAKESHORE ENGINEERING: Sues DOD Over Afghan Contract Changes ------------------------------------------------------------ Law360 reported that the trustee for bankrupt contractor Lakeshore Engineering Services Inc. hit the U.S. Department of Defense with a $2.9 million suit in the Court of Federal Claims, arguing it had wrongly been denied its claim for additional costs incurred on an Afghanistan construction contract due to unnecessary changes. LIFE PARTNERS: Judge Orders Appointment of Chap. 11 Trustee ----------------------------------------------------------- Bill Rochelle, a bankruptcy columnist for Bloomberg News, reported that U.S. Bankruptcy Judge Russell Nelsm in Fort Worth, Texas, directed the appointment of a Chapter 11 trustee in the Chapter 11 case of Life Partners Holdings, approving the request from the U.S. Securities and Exchange Commission and the U.S. Trustee. According to the report, the SEC said that the bankrupt life-settlement firm's management "lacks the judgment necessary to guide the company through the Chapter 11 process." About Life Partners Holdings, Inc. Headquartered in Waco, Texas, Life Partners Holdings, Inc. -- http://www.lphi.com/-- is a financial services company engaged in the secondary market for life insurance known as life settlements. Life Partners Holdings, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Jan. 20, 2015 (Bankr. N.D. Tex., Case No. 15-40289). The case is assigned to Judge Russell F. Nelms. The U.S. Trustee for Region 6 appointed three creditors of Life Partners Holdings, Inc. to serve on the official committee of unsecured creditors. Tracy A. Bolt of BDO USA, LLP, was named as examiner in the Debtor's case. LIGHTSQUARED INC: Claims Gutted in Harbinger Investor Row --------------------------------------------------------- Law360 reported that a New York federal judge mostly ended an investor class action against Harbinger Capital Partners LLC over its $3 billion investment in doomed startup LightSquared Inc., saying various claims were either precluded by federal law or insufficiently pled. According to the report, state fraud claims that Harbinger made misrepresentations about LightSquared when it was a privately held uncovered security were still precluded under the Securities Litigation Uniform Standards Act because the claims stemmed from the fund's original purchase of LightSquared's predecessor, publicly traded SkyTerra Communications Inc., the federal judge said. The case is In Re: Harbinger Capital Partners Funds Investor Litigation, Case No. 1:12-cv-01244 (S.D.N.Y.). About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. * * * Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York on Jan. 20, 2015, approved the Second amended specific disclosure statement explaining Lightsquared Inc., et al.'s second amended joint plan, after determining that the disclosures contain adequate information within the meaning of Section 1125(a) of the Bankruptcy Code. As previously reported by The Troubled Company Reporter, the Debtors, in December, filed a joint plan and disclosure statement, which contemplate, among other things, (A) new money investments by the New Investors in exchange for a combination of preferred and common equity, (B) the conversion of the Prepetition LP Facility Claims into new second lien debt obligations, (C) the repayment in full, in cash, of the Inc. Facility Prepetition Inc. Facility NonSubordinated Claims immediately following confirmation of the Plan, (D) the payment in full, in cash, of LightSquared's general unsecured claims, (E) the provision of $1.25 billion in new money working capital for the Reorganized Debtors, (F) the assumption of certain liabilities, (G) the resolution of all inter-Estate disputes, and (H) the contribution by Harbinger of the Harbinger Litigations. Judge Chapman commenced a hearing on March 9, 2015, to consider confirmation of the amended joint plan filed by Lightsquared Inc. and its debtor-affiliates together with Fortress Credit Opportunities Advisor LLC, Harbinger Capital Partners LLC, and Centerbridge Partners LP. Judge Chapman, in later March, approved LightSquared Inc.'s Chapter 11 reorganization plan, capping a bankruptcy odyssey for Philip Falcone's ambitious wireless venture that filed for bankruptcy nearly three years ago. MACKEYSER HOLDINGS: Only Mackeyser Holdings Remains in Chapter 11 ----------------------------------------------------------------- The Bankruptcy Court entered a final decree closing the Chapter 11 cases of the affiliates of Mackeyser Holdings, LLC. The Court also ordered that the remaining case -- Mackeyser Holdings -- will remain open and entry of a final decree in the remaining case will be delayed until further order of the Court. As reported in the TCR on March 23, 2015, the Debtors notified the Bankruptcy Court that the effective date of the First Amended Joint Plan of Liquidation occurred on Feb. 27, 2015. The Court confirmed on Feb. 2, 2015, the Amended Plan proposed by the Debtors and the Official Committee of Unsecured Creditors. The Court also ordered that the final request for payment of professional fee claims must be filed no later April 13, 2015. 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. Thomas J. Allison was appointed as liquidating trustee as of the effective date of the Joint Plan of Liquidation proposed by Mackeyser Holdings, et al., and the Official Committee of Unsecured Creditors. MAJESCO ENTERTAINMENT: Losses Raise Going Concern Doubt ------------------------------------------------------- Majesco Entertainment Co. filed its quarterly report on Form 10-Q, disclosing a net loss of $1.16 million on $3.47 million of revenue for the three months ended Jan. 31, 2015, compared with a net loss of $4.51 million on $21.9 million of revenue for the same period last year. The Company's balance sheet at Jan. 31, 2015, showed $12.2 million in total assets, $7.28 million in total liabilities, and stockholders' equity of $4.93 million. The Company has suffered losses that raise substantial doubt about its ability to continue as a going concern. As of Jan. 31, 2015, management believes that there may not be sufficient capital resources from operations and existing financing arrangements in order to meet operating expenses and working capital requirements for the next twelve months. A copy of the Form 10-Q is available at: http://is.gd/IO7ydf Majesco Entertainment Co. -- http://www.majescoentertainment.com/ -- is a provider of video games for the mass market. Building on 20 years of operating history, Majesco is focused on developing and publishing a wide range of casual and family oriented video games on leading console and portable systems. Product highlights include Cooking Mama TM and Cake Mania(R)2 for Nintendo DS TM and Cooking Mama World Kitchen and Jillian Michaels' Fitness Ultimatum 2009 for Wii TM Majesco's shares are traded on the Nasdaq Stock Market under the symbol: COOL. Majesco is headquartered in Edison, NJ and has an international office in Bristol, UK. The Company reported a net loss of $2.73 million on $2.91 million of net revenues for the three months ended July 31, 2014, compared with a net loss of $3.64 million on $3.99 million of net revenues for the same period last year. The Company's balance sheet at July 31, 2014, showed $18.08 million in total assets, $7.82 million in total liabilities and stockholders' equity of $10.3 million. MBAC FERTILIZER: Delays Filing of Annual Financial Statements ------------------------------------------------------------- MBAC Fertilizer Corp. on March 30 disclosed that it expects that the Ontario Securities Commission will note the Company in default of its continuous disclosure obligations under Ontario securities laws due to the Company not being in a position to file its annual audited financial statements, related management discussion and analysis and annual information form for the year ended December 31, 2014 by the March 31, 2015 regulatory deadline. Due to the Company's previously announced liquidity and working capital difficulties, the Company was delayed in engaging its advisors, including its auditors to complete the audit of the Company's annual financial statements, until it was certain it would have sufficient resources to complete the audit and other year-end work. As a result, there will be a delay in the filing of the Annual Financial Filings. The Company intends to work diligently to obtain additional funds in order to make payments to its advisors in connection with the completion of the required year-end work, including the completion of the Company's audit, in order to file the Annual Financial Filings as soon as possible. The Annual Financial Filings are anticipated to be filed by April 30, 2015. The Company expects that the OSC will note that the Company will remain in default until it files its Annual Financial Filings. In the meantime, the Company has submitted an application to the Canadian securities regulatory authorities pursuant to National Policy 12-203 -- Cease Trade Orders for Continuous Disclosure Defaults requesting that a management cease trade order be imposed upon the Chief Executive Officer and the Chief Financial Officer of the Company in lieu of a general cease trade order in respect of the Company's continuous disclosure default. In the event the MCTO is granted by the securities regulators, the Company intends to satisfy the alternative information guidelines prescribed by the Policy by issuing bi-weekly default status reports in the form of news releases so long as its remains in default of continuous disclosure requirements. About MBAC MBAC -- http://www.mbacfert.com-- is an integrated producer of phosphate fertilizers and related products in the Brazilian market. MEDICAL CAPITAL: Sedgwick Settles $210-Mil. Legal Malpractice Case ------------------------------------------------------------------ Amanda Bronstad, writing for The National Law Journal, reported that Sedgwick has reached a tentative settlement to resolve a lawsuit over its role in a $1 billion Ponzi scheme in California. According to the Law Journal, a spokesman for the San Francisco law firm, which put off a March 3 trial to begin settlement discussions, confirmed that an agreement had been reached although details of the settlement were not disclosed. The litigation is among many in which law firms have been sued over Ponzi scheme losses, the Law Journal said. Law360 reported that U.S. District Judge David O. Carter held several days of hearings in January on Sedgwick's motion for summary judgment, which rebutted claims it owed MedCap receiver Thomas Seaman more than $200 million in damages. In late January, both sides asked the judge to hold off on his decision while they went to mediation and tried to reach a settlement, Law360 said. Seaman accused Sedgwick almost four years ago of failing to advise the financing company about loan limitations in private placement memoranda that prevented MedCap from spending too much money on non-approved investments, the Law360 report related. Seaman also claimed that Sedgwick improperly represented MedCap and its affiliates with conflicting interests, the Law360 report added. The case is Thomas A. Seaman v. Sedgwick LLP, case number 8:11-cv-00664, in the U.S. District Court for the Central District of California. In Aug. 2009, Medical Capital Holdings' officers asked Judge Carter to let the Company file for Chapter 11 bankruptcy protection and operate as a debtor-in-possession. Judge Carter declined that invitation to release the company from Mr. Seaman's oversight and control. The SEC's lawsuit against Medical Capital, filed in July 2008, alleged that the Company defrauded investors of at least $18.5 million. MEDICAL CARD: S&P Affirms 'B-' Counterparty Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' counterparty credit ratings on Medical Card System Inc. (MCS) and its 'B+' counterparty and financial strength ratings on MCS' operating companies (MCS Advantage Inc. and MCS Life Insurance Co.), and removed all the ratings from CreditWatch with negative implications where S&P placed them on March 13, 2015. S&P also affirmed its 'B-' issue-level ratings on the company's senior secured notes. The outlook is negative. Subsequently, S&P withdrew all its ratings at the issuer's request. "We view MCS's business profile as fair. The company is one of the three largest players in the Medicare Advantage market in Puerto Rico," said Standard & Poor's credit analyst Deep Banerjee. "Somewhat offsetting its favorable market position is its volatility in operating performance, and product and geographic concentrations." "We view MCS' financial risk profile as extremely weak based on weakness in capitalization and high financial leverage. On a statutory accounting basis, the company reported consolidated operating company capital of $45 million as of Sept. 30, 2014, compared with $85 million at year-end 2013. We believe it's likely that MCS will not meet the 200% risk-based capital requirement for the full-year 2014. If MCS is unable to meet these regulatory requirements, it will have to file a plan for restoration of capital with regulators. At this time, since the company has yet to file its year-end financials, we are unable to forecast any regulatory decisions that may be taken by the Dept. of Insurance in Puerto Rico," S&P added. "The negative outlook reflected the possibility that MCS may see further deterioration in its capital and earnings over the next 12 months, uncertainty in regulatory action over its weak regulatory capital, and potential continued weakness in its debt leverage and fixed-charge coverage," Mr. Banerjee added. MEN'S WEARHOUSE: S&P Affirms 'B+' CCR; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Texas-based men's suiting and apparel retailer Men's Wearhouse Inc. The outlook is stable. At the same time, S&P affirmed the 'BB-' issue-level rating on the company's term loan and 'B-' issue-level rating on the unsecured notes. The '2' recovery rating on the term loan remains unchanged and indicates S&P's expectation of substantial recovery on the low end of the 70% to 90% range. The '6' recovery rating on the unsecured notes is also unchanged and indicates S&P's expectations for negligible recovery (0% to 10%). "Our ratings on Men's Wearhouse reflect its participation in the highly competitive and widely fragmented men's specialty apparel retail segment," said credit analyst Helena Song. "We believe the company enjoys good brand recognition through its two flagship brands—The Men's Wearhouse and Jos. A. Bank. Although the company is sizable when compared with other rated specialty apparel retailers, it is much smaller than its primary competitors, which include moderate department stores such as Macy's, Kohl's, and J.C. Penney. Our assessment of business risk also incorporates our view that the company, especially its legacy brands, has a track record of relatively stable performance and a healthy store fleet. Although operating performance has been below our expectations due to weaker sales at Jos. A. Bank and more pronounced margin contraction, we expect profitability to improve modestly over the next 12 months as the company introduces new merchandise at its Jos. A. Bank stores, and the company continues to realize synergies." "The stable outlook reflects our view that performance will remain good at the legacy brands, and will begin to improve at Jos. A. Bank in the second half of 2015. We project EBITDA margin expansion over the next 12 months as the company continues sales growth and realizes meaningful cost synergies. We also expect the company will use the bulk of its cash flow generation to reduce funded debt. Although we forecast improvement in the company's credit protection measures, we believe they will remain commensurate with an "aggressive" financial risk profile over the next year. While we note that the company has successfully integrated other businesses historically, Jos. A. Bank is much larger than prior acquisitions," S&P said. S&P could lower the rating if the company's operating performance, especially its profit growth, is meaningfully weaker than S&P's projection, which could result from acquisition integration issues and/or ineffectiveness of the new merchandising strategy at Jos. A. Bank. Under this scenario, revenues would grow in the mid- to high-single digits (decline in the low-single digits on a pro forma basis) and EBITDA margins would decrease 100 basis points. At that time, leverage would be in the low-6.0x area and S&P could reassess the company's financial risk profile down one category to "highly leveraged" from "aggressive". S&P could also lower the ratings if the company does not meet its debt reduction target, resulting in sustained higher leverage in the low-6x area. Although unlikely, S&P could raise the rating if the company integrates Jos. A. Bank without substantial issues and improves operating performance meaningfully higher than S&P's expectations. Under this scenario, revenue growth would be in the mid-double digits and margins would expand by an additional 200 basis points. At that time, leverage would be in the low-4.0x area, and S&P could consider revising its assessment of the business higher as a result of considerable margin expansion. MF GLOBAL: Commerzbank Unit Pays Nearly $1MM to Exit Case --------------------------------------------------------- Law360 reported that a Commerzbank AG subsidiary that helped underwrite an MF Global Holdings Ltd. stock offering in 2011 has agreed to pay nearly $1 million to settle a class action filed by the defunct brokerage firm's investors, according to a filing in New York federal court. The report related that attorneys for a group of investors who took part in the stock deal asked a judge to approve a $932,828 settlement with Commerz Markets LLC. Commerz was named as a defendant in the class action along with MF Global, its top executives, its former auditor PricewaterhouseCoopers LLP, and other major banks that served as underwriters on stock and debt offerings, the report said. The case is In Re: MF Global Holdings Ltd. Securities Litigation, case number 1:11-cv-07866, in the U.S. District Court for the Southern District of New York. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41 million in total assets and $39.7 million in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MF GLOBAL: Trustee Seeks to Pay $461-Mil. to Unsecured Creditors ---------------------------------------------------------------- Nick Brown, writing for Reuters, reported that James Giddens, the trustee winding down MF Global Holdings' brokerage unit, has filed papers asking a New York bankruptcy judge's approval of a $461 million payout to unsecured creditors. According to the report, the payout raises recoveries to 72% of claims lodged when the brokerage unit collapsed in 2011. Unsecured creditors received an initial $519 million distribution last year, while customers of the broker-dealer and other classes of creditors have received full payback of about $6.7 billion, the report related. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41 million in total assets and $39.7 million in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MGP INVESTMENTS: Case Summary & 6 Top Unsecured Creditors --------------------------------------------------------- Debtor: MGP Investments, LLC, a Limited Liability Company 1110 N 7 Highway Blue Springs, MO 64014 Case No.: 15-40885 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: March 30, 2015 Court: United States Bankruptcy Court Western District of Missouri (Kansas City) Judge: Hon. Dennis R. Dow Debtor's Counsel: Joanne B. Stutz, Esq. EVANS & MULLINIX, P.A. Suite 200, 7225 Renner Road Shawnee, KS 66217 Tel: 913-962-8700 Fax: 913-962-8701 Email: jstutz@emlawkc.com Total Assets: $2.1 million Total Liabilities: $2.9 million The petition was signed by Girish Patel, member. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/mowb15-40885.pdf MITEL NETWORKS: S&P Rates Proposed $650MM Term Loan 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' issue-level rating and '3' recovery rating to Ottawa-based software and hardware telephony provider Mitel Networks Corp.'s proposed US$650 million first-lien term loan B due 2022. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a default. S&P expects recovery to be on the high end of the meaningful category. Proceeds of the term loan, which will be issued by Mitel U.S. Holdings Inc. (a wholly owned subsidiary of Mitel), will be used to fund the acquisition of Mavenir Systems Inc. and refinance Mitel's existing debt. The company is also entering into a new US$50 million revolver, which will rank pari passu with the term loan. S&P will withdraw its ratings on Mitel's existing term loan after the company completes the transaction, which S&P expects will occur in the second quarter of 2015. S&P's 'B+' long-term corporate credit rating and stable outlook on Mitel are unchanged. The ratings on Mitel are based on S&P's "weak" business risk profile and "significant" financial risk profile assessments on the company, as well as S&P's use of the comparable rating analysis modifier to reduce the rating by one notch below the 'bb-' anchor. RATINGS LIST Ratings Assigned Mitel US Holdings Inc Senior Secured US$650 mil 1.00% first lien bank ln due 12/31/2022[1] Local Currency B+ Recovery Rating 3H [1] Dependent Participant(s): Bank of America N.A. MONTREAL MAINE: Civil Proceedings Stayed Pending Appeal ------------------------------------------------------- Chief District Judge Nancy Torresen of the District of Maine granted the request filed by Annick Roy (o/b/o Jean-Guy Veilleux), Marie-Josee Grimard (o/b/o Henriette Latulippe) and Robert Keach, the chapter 11 trustee of Montreal Maine & Atlantic Railway, Ltd., in case 1:13-mc-00184-NT, seeking entry of an order modifying the "Consent Order Staying Proceedings Pending Appeal in 1:13-mc-00184-NT. Judge Torresen ruled that all of the civil actions transferred to the Maine District Court pursuant to the Court's Order on Motions to Transfer Cases and Motion to Strike -- Section 157(b)(5) Transfer Order -- and all proceedings therein, are stayed against all defendants. A copy of the Maine Court's March 23, 2015 Order is available at http://is.gd/o6huWUfrom Leagle.com. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. As reported by the TCR in January 2015, the Debtor and other defendants have agreed to pay $200 million to compensate victims, including 48 people who died. The settlement was announced on Jan. 9, 2015. Amanda Bronstad, writing for The National Law Journal, reported that the settlement amount could grow to as much as $500 million if additional defendants come on board. MORRIS BROWN: Court Approves Plan --------------------------------- AJC.com reported that the U.S. Bankruptcy Judge Barbara Ellis-Monro in Georgia has approved a plan that will let financially-strapped Morris Brown College emerge from bankruptcy. According to the report, in a statement, board Chairman Preston Williams said the action, confirmed by a signed order by Judge Ellis-Monro, "will allow the college to exit bankruptcy and move forward to regain its accreditation." The college spelled out a plan to resolve several remaining minor claims, including debts to ADT Security Service, the Robert W. Woodruff Library, a consulting firm and two individuals, the report related. Mr. Williams said that as part of the bankruptcy proceedings, the college sold 26 acres of property and buildings to InVest Atlanta and Friendship Baptist Church for $14.7 million, but retains ownership of the school's administration building, Griffin Hightower Classroom building and Fountain Hall, the report further related. About Morris Brown College Morris Brown College, a black college founded in 1881, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Case No. 12-71188) on Aug. 25, 2012, in Atlanta to stop foreclosure on a $13 million mortgage. Morris Brown was denied accreditation from the Commission on Colleges of the Southern Association of Colleges and Schools in December 2002. Without its accreditation, Morris Brown College didn't qualify for federal funding. The Debtor estimated assets and liabilities of $10 million to $50 million as of the Chapter 11 filing. Morris Brown filed applications to employ Dilworth Paxson LLP as lead counsel; The Moore Law Group, LLC, as local counsel; and BDO USA, LLP as auditors. MORRIS BROWN: Exits Chapter 11 Bankruptcy Protection ---------------------------------------------------- Judge Barbara Ellis-Monro has signed an order allowing Morris Brown College to exit bankruptcy and move forward to regain its accreditation, Curtis Bunn at AtlantaBlackStar.com reports. According to AtlantaBlackStar.com, the School has "victoriously emerged from bankruptcy" and will graduate 21 students on May 16, 2015. The report says that the School has only 35 students enrolled. AtlantaBlackStar.com quoted Rev. Dr. Preston W. Williams II, Board of Trustee chairperson as saying, "We had to sell property that had historical significance to so many people . . . . We emerge from bankruptcy fully functional and current with all of our debt obligations." AtlantaBlackStar.com relates that the School sold 26 acres of property and buildings to InVest Atlanta and Friendship Baptist for $14.7 million, but retains ownership of the school's administration building, Griffin Hightower Classroom building and Fountain Hall. The School has remained in operation throughout the Chapter 11 reorganization process, and received financial support from alumni, the African Methodist Episcopal Church, trustees, staff and faculty, AtlantaBlackStar.com states, citing Mr. Williams. About Morris Brown College Morris Brown College, a black college founded in 1881, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Case No. 12-71188) on Aug. 25, 2012, in Atlanta to stop foreclosure on a $13 million mortgage. Morris Brown was denied accreditation from the Commission on Colleges of the Southern Association of Colleges and Schools in December 2002. Without its accreditation, Morris Brown College didn't qualify for federal funding. The Debtor estimated assets and liabilities of $10 million to $50 million as of the Chapter 11 filing. Morris Brown filed applications to employ Dilworth Paxson LLP as lead counsel; The Moore Law Group, LLC, as local counsel; and BDO USA, LLP, as auditors. NATEL ENGINEERING: Moody's Assigns First Time B2 Corp Family Rating ------------------------------------------------------------------- Moody's Investors Service assigned a first time B2 corporate family rating (CFR) and a B2-PD probability of default rating to Natel Engineering Company, Inc. Moody's also assigned a B1, LGD3 rating to the company's $280 million senior secured term loan. The term loan, in conjunction with a $60 million seller note from Charlesbank Capital will be used to fund the roughly $275 million acquisition of OnCore (at about a 7.5 times multiple) and refinance Natel's existing debt. OnCore marks the largest in a series of acquisitions throughout Natel's history and stands to enhance Natel's market position as a leading provider of high-mix, low-to-mid volume assembly services in the electronics manufacturing services ("EMS") industry for customers in the defense, aerospace, industrial, and medical markets. The outlook is stable. The B2 CFR reflects Natel's elevated financial leverage (Moody's adjusted total debt to EBITDA approaching 5.0 times at closing of the OnCore acquisition) and the near-term challenges the company will face in integrating the OnCore operations, which stand to double the company's pro-forma revenues to about $770 million in FY 2015. Moody's believes that the synergies from the merger are achievable, as Natel has a good track record of meeting synergy targets. Yet, integrating the cultures of the two organizations could be more challenging given the differences in how the two companies approach the market - Natel has deep operating efficiency roots, while OnCore's strength lies in engineering, sales and marketing ability. The ratings also take into account Natel's high customer concentration, as the company' largest client comprises 13% of proforma sales and it has been a customer for less than five years. Natel's top ten customers represent over 50% of proforma revenues. Natel, and its acquired units have a history of sales volatility, that are common across the EMS sector, which Moody's expects to continue as a normal course of the company's business given the regular fluctuations in the timing of customer orders, the lifecycles of programs and defense budget appropriations. The ratings are supported by the company's increased scale and the specialty nature of Natel's high-mix, low-to-mid volume assembly services for more complex products for its customers. This niche focus has allowed Natel to form long-term, strategic relationships with its core customers that, on average span 5-10 years, with the majority of sales (at the product level) are sole- or dual-sourced in nature. As a result, the company has consistently generated adjusted EBITDA margins that are well in excess of its peers in the EMS sector. Moody's also expects a gradual improvement in profitability following the OnCore acquisition, as Natel embarks on identified synergies. The resulting gains in EBITDA, coupled with positive free cash flow generation, are expected to facilitate a decline in debt to EBITDA leverage. Moody's expects Natel to maintain adequate liquidity over the next year, with minimal projected cash balances and modest free cash flow generation as it lays out resources to integrate OnCore. For external liquidity, Natel will have a $50 million senior secured ABL revolver, which is not expected to be utilized over the next twelve months. The ABL credit facility will have a springing covenant, which is not expected to be in effect over the next 12-18 months, as excess availability should remain above the minimum levels. The term loan will have two maintenance financial covenants. The ratings assigned to the individual instruments are based on the probability of default of the company, which is B2-PD, as well as an average family recovery. The $280 million senior secured term loan, rated B1 LGD3, receives a rating lift from the CFR from the junior seller note. The term loan has an asset pledge from the company's domestic subsidiaries, but ranks below the collateral backing the ABL. The stable rating outlook reflects Moody's expectation that Natel will make steady progress in integrating OnCore's operations and will achieve the targeted cost synergies. What Could Change the Rating - Up Given the increased debt taken on with the acquisition and time required to successfully integrate OnCore, a rating upgrade is unlikely over the next 12 months. Ratings could be upgraded as a result of significant revenue and EBITDA expansion which leads to adjusted leverage approaching 4.0 times and resumption of good free cash flow generation. What Could Change the Rating - Down Ratings could be downgraded if Natel's integration of OnCore results in deteriorating financial performance, revenue growth does not materialize, or if the company experiences market share loss or operational missteps. Ratings may also be downgraded if margins erode as a result of pricing pressures or higher operating costs. Inability to reduce financial leverage below 5.0 times or persistent negative free cash flow would also pressure ratings. Rating Assignments: Issuer: Natel Engineering Company, Inc. -- Corporate Family Rating, Assigned B2 -- Probability of Default Rating, Assigned B2-PD -- Senior Secured Term Loan B due 2020, Assigned B1 (LGD3) Outlook Actions: -- Outlook, Assigned as Stable Headquartered in Chatsworth, CA, Natel is an electronics manufacturing services provider of high-reliability, high-quality manufacturing solutions to customers in the industrial, medical, aerospace & defense and building industries. Proforma revenue for the OnCore acquisition for the twelve months ended January 31, 2015 was about $770 million. The principal methodology used in these ratings was Global Distribution & Supply Chain Services published in November 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. NATEL ENGINEERING: S&P Assigns Prelim. 'B+' CCR; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a preliminary 'B+' corporate credit rating to Chatsworth, Calif.-based Natel Engineering Co. Inc. The outlook is stable. At the same time, S&P assigned a preliminary 'BB-' issue-level rating and preliminary '2' recovery rating to the company's $280 million senior secured term loan due 2020. The preliminary '2' recovery rating indicates S&P's expectation for substantial recovery (70% to 90%; at the lower end of the range) in the event of payment default. The company will also issue a $50 million asset-backed revolving credit facility due 2020 and a $60 million paid-in-kind seller note due 2020, six months after the term loan. Both facilities are unrated. S&P expects Natel to use the proceeds to finance the acquisition, repay existing debt, and pay transaction fees. S&P will finalize its ratings after the transaction closes, assuming the terms are consistent with our expectations. "The preliminary rating on Natel reflects our adjusted leverage, which we expect will fall to less than 4x during the next 12 to 18 months as the company realizes cost savings in the OnCore business, as well as the company's small scale, meaningful customer concentration, and fragmented, competitive, and cyclical operating environment," said Standard & Poor's credit analyst Christian Frank. The acquisition will improve the company's manufacturing footprint with limited customer overlap and improve end-market diversity. The stable outlook reflects S&P's expectation that consistent end market demand and cost saving opportunities are likely to result in leverage falling to less than 4x during the next 12 to 18 months. S&P would consider a lower rating in case of Natel's unsuccessful integration of OnCore's business, end market demand weakness, loss of a large customer, or debt-financed acquisitions, such that adjusted leverage exceeds 5x or covenant cushion falls to less than 15% on a sustained basis. Although S&P' do not expect to do so over the next 12 months, it would consider a higher rating if Natel can reduce leverage through EBITDA growth and debt repayment, and establish a financial policy such that it can pursue its growth objectives while maintaining leverage of less than 2x. NEW ENGLAND COMPOUNDING: Liberty Has Deals to Exit Meningitis Row ----------------------------------------------------------------- Law360 reported that Liberty Industries Inc., which provided containment facilities for New England Compounding Pharmacy Inc. prior to a deadly October 2012 meningitis outbreak, has agreed to settle with its insurer, NECC's bankruptcy trustee and victims of the outbreak, according to documents filed in Connecticut federal court. The report related that U.S. District Judge Vanessa L. Bryant granted a motion for stay by Liberty, which provided "cleanrooms" for NECC, after Liberty told the court that Great American E&S Insurance Co. had agreed in principle to a settlement in its suit. The case is Great American E&S Insurance Company v. Liberty Industries, Inc., Case No. 3:14-cv-00499 (D. Conn.). About New England Compounding Pharmacy New England Compounding Pharmacy Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012, after a meningitis outbreak linked to an injectable steroid, methylprednisolone acetate ("MPA"), manufactured by NECC, killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts. The Debtor owns and operates the New England Compounding Center is located in Framingham, Mass. In October 2012, the company recalled all its products, not just those associated with the outbreak. Paul D. Moore, Esq., at Duane Morris LLP, in Boston, has been appointed as Chapter 11 Trustee of NECC. He is represented by Jeffrey D. Sternklar, Esq., at DUANE MORRIS LLP. An Official Committee of Unsecured Creditors appointed in the case has been represented by BROWN RUDNICK LLP's William R. Baldiga, Esq., Rebecca L. Fordon, Esq., Jessica L. Conte, Esq., and David J. Molton, Esq. NII HOLDINGS: Court Approves Share Pledge Deal with HSBC -------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved NII Holdings' motion for an order (a) approving and authorizing (I) Debtor Nextel International (Uruguay) LLC's entry into a share pledge agreement with HSBC Mexico, (II) Debtor NII International Telecom S.C.A.'s delivery of notice of subordination and (b) granting certain related relief. According to BData, NII Mexico also entered into loan agreements with China Development Bank Corporation, which provides for an aggregate loan commitment of up to $375 million to be used to finance infrastructure equipment and certain other costs related to the deployment of NII Mexico's 3G network. About NII Holdings NII Holdings Inc. through its subsidiaries provides wireless communication services for businesses and consumers in Brazil, Mexico and Argentina. NII Holdings has the exclusive right to use the Nextel brand in its markets pursuant to a trademark license agreement with Sprint Corporation and offers unique push-to-talk ("PTT") services associated with the Nextel brand in Latin America. NII Holdings' shares of common stock, par value $0.001, are publicly traded under the symbol NIHD on the NASDAQ Global Select Market. NII Holdings and its affiliated debtors sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-12611) in Manhattan on Sept. 15, 2014. The Debtors' cases are jointly administered and are assigned to Judge Shelley C. Chapman. The Debtors have tapped Scott J. Greenberg, Esq., and Michael J. Cohen, Esq., of 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. The Committee is represented by Kenneth H. Eckstein, Esq., and Adam C. Rogoff, Esq., at KRAMER LEVIN NAFTALIS & FRANKEL LLP. Capital Group, one of the Backstop Parties, is represented by Andrew N. Rosenberg, Esq., Elizabeth R. McColm, Esq., and Lawrence G. Wee, Esq., at PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP. Aurelius, one of the Backstop Parties, is represented by Daniel H. Golden, Esq., David H. Botter, Esq., and Brad M. Kahn, Esq., at AKIN GUMP STRAUSS HAUER & FELD LLP. * * * The Plan and Disclosure Statement, filed on Dec. 22, 2014, allow the Debtors to strengthen their balance sheet by converting $4.35 billion of prepetition notes into new stock and provide the Debtors with $500 million of new capital. The Plan also permits the Debtors to avoid the incurrence of significant litigation costs and delays in connection with potential litigation claims and exit bankruptcy protection expeditiously and with sufficient liquidity to execute their business plan. OAK ROCK: Israeli's $90M Lien Survives Creditor Attack ------------------------------------------------------ Law360 reported that a New York bankruptcy judge upheld Israel Discount Bank of New York's $90 million lien against failed specialty lending firm Oak Rock Financial LLC, finding that modifications to IDB's credit line in 2006 did not nullify its security interest. Two competing creditors failed to show that IDB’s lien as the administrative agent for Oak Rock's bank lenders should be invalidated in favor of their own interests against the debtor, according to a written opinion issued by U.S. Bankruptcy Judge Robert E. Grossman, the report related. Two investors in Oak Rock asked a New York state judge to disqualify Sidley Austin LLP from representing an auditor of the bankrupt lending company in a suit over its alleged failure to detect a $100 million fraud, citing its prior representation of the other side, Law360 reported. The bid to disqualify Sidley Austin comes in the midst of Prime Plus Acquisition Corp. and Oasis Oak Rock Investors LLC's lawsuit claiming that EisnerAmper LLP failed in its duties as independent auditor, the report related. OMNICARE INC: High Ct. Clarifies Litigation Path for Sec. Statement ------------------------------------------------------------------- Hazel Bradford, writing for Pensions and Investments, reported that the U.S. Supreme Court has vacated the decision in the case, Omnicare Inc. vs. Laborers District Council Construction Industry Pension Fund et al., which case was closely watched by scores of U.S. and foreign pension funds that filed an amicus brief seeking to overturn a District Court's dismissal of the lawsuit. According to the report, the Supreme Court remanded the case back to the 6th U.S. Circuit Court of Appeals in Cincinnati, which allowed the case to continue, ruling that the pension funds had a cause of action. In the opinion, Justice Elena Kagan wrote that under Section 11 of the Securities Act of 1933, which governs registration statements, a statement of opinion may be incorrect but not constitute an untrue statement, the report related. The decision provides "important guidance on a frequently litigated issue that had divided lower courts," Josh Yount, a partner in the law firm Mayer Brown, told the news agency. "Omnicare will deter Section 11 opinion claims that cannot be supported with specific factual allegations." Omnicare, Inc., headquartered in Cincinnati, Ohio, is the leading provider of institutional pharmacy services to the long term care sector (LTC), mainly serving skilled nursing facilities (SNFs) and assisted living facilities. The company also has a specialty pharmacy business that provides specialty pharmacy and commercialization services for the biopharmaceutical industry. During the twelve months ended September 30, 2014, Omnicare's revenues approximated $6.3 billion. * * * The Troubled Company Reporter, on Dec. 29, 2014, reported that Moody's Investors Service said that the Department of Justice's (DOJ) kickback lawsuit against Omnicare Inc. is credit negative as it raises legal and regulatory risks and increases uncertainties around Omnicare's future financial and liquidity position. However, there is no immediate impact on Omnicare's ratings, including its Ba3 Corporate Family Rating, and stable rating outlook. PARKERVISION INC: PwC Expresses Going Concern Doubt --------------------------------------------------- ParkerVision, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended Dec. 31, 2014. PricewaterhouseCoopers LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has suffered recurring losses from operations and negative cash flows The Company reported a net loss of $23.6 million on $nil in revenue for the year ended Dec. 31, 2014, compared to a net loss of $27.9 million on $nil of revenues in the same period last year. The Company's balance sheet at Dec. 31, 2014, showed $20.7 million in total assets, $2.1 million in total liabilities, and stockholders' equity of $18.6 million. A copy of the Form 10-K is available at: http://is.gd/wvo2pa Jacksonville, Florida-based ParkerVision, Inc., designs, develops and markets its proprietary radio frequency ("RF") technologies and products for use in semiconductor circuits for wireless communication products. PETTERS GROUP: JPMorgan Wins Referral of Suit to Bankruptcy Court ----------------------------------------------------------------- Law360 reported that a Minnesota federal judge moved to bankruptcy court a hedge fund's suit against JPMorgan Chase & Co. alleging it aided businessman Thomas Petters' $3.7 billion Ponzi scheme, granting JPMorgan's request. According to the report, U.S. District Judge Donovan Frank moved suit, brought by Ritchie Capital Management LLC, but gave no reasoning for his decision at this time. In its complaint, Ritchie claimed JPMorgan and Richter Consulting Inc. agreed to create blocked accounts for European subsidiaries of both JPMorgan and Polaroid Corp., in which Petters owned a controlling interest, the report said. The case is Ritchie Capital Management, L.L.C. et al v. JPMorgan Chase & Co. et al., Case No. 0:14-cv-04786 (D. Minn.). About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Douglas Kelley, the Chapter 11 Trustee of Petters Company, Inc., et al., is represented by James A. Lodoen, Esq., at Lindquist & Vennum LLP, in Minneapolis, Minn. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PITTSBURGH CORNING: Insurer Claims Asbestos Fraud Tainted Ch. 11 ---------------------------------------------------------------- Daniel Fisher, writing for Forbes, reported that an insurer that was required to help fund the $3 billion bankruptcy of Pittsburgh Corning has filed court papers seeking the case to be reopened, saying "pervasive fraudulent conduct" by asbestos plaintiff lawyers tainted the proceedings. According to the report, the filing by Everest Re and its Mt. McKinley Insurance unit follows the opening of millions of pages of documents in the Garlock Sealing Technologies bankruptcy, which revealed how lawyers representing asbestos plaintiffs deliberately delayed filing claims against bankrupt companies until they had completed cases against solvent ones, in order to avoid cluttering the record with potential evidence of exposure to other firms' products. Everest, the report said, is among the insurers ordered to pay $1.7 billion into the bankruptcy trust formed to settle claims against Pittsburgh Corning, a joint venture of PPG Industries and Corning that made asbestos insulation widely used in ships, refineries and other industrial settings. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. Judge Thomas Agresti handles the bankruptcy case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP, as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning, which is a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. PCC's balance sheet at Sept. 30, 2012, showed $29.41 billion in total assets, $7.52 billion in total liabilities and $21.88 billion in total equity. POLYMEDIX INC: Attys Want 33% Slice of $1-Mil. Pie in Stock Suit ---------------------------------------------------------------- Law360 reported that the lead plaintiff in an investor class action against now-bankrupt experimental drug company PolyMedix Inc. asked a Pennsylvania federal judge to approve a $1.15 million settlement with nearly $400,000 in attorneys' fees. According to the report, Graham Anderson and his attorneys said that the $383,333 in fees -- one-third of the settlement -- was an acceptable figure for the work of litigating claims that PolyMedix misled the public about a flawed anti-stroke treatment to generate buzz for a $20 million stock offering. The case is ANDERSON v. POLYMEDIX, INC. et al., Case No. 2:12-cv-03721 (E.D. Pa.). Bankruptcy As reported by the Troubled Company Reporter on September 10, 2013, PolyMedix filed for Chapter 7 bankruptcy protection on April 1, 2013. Following a due diligence process, Cellceutix submitted a "stalking horse" bid for the PolyMedix assets in August. On Wednesday, September 4, the Bankruptcy Court for the District of Delaware approved the asset purchase agreement. In the transaction, Cellceutix assumes none of the debt associated with PolyMedix. The purchase price was $2.1 million in cash and 1.4 million shares of CTIX stock. About PolyMedix Headquartered in Radnor, Pennsylvania, PolyMedix, Inc. -- http://www.polymedix.com-- is a clinical-stage biotechnology company. PolyMedix is engaged in developing small-molecule drugs for the treatment of serious acute care conditions. The Company has created defensin mimetic antibiotic compounds, heparin antagonist compounds, and other drug compounds intended for human therapeutic. The Company has internally created a pipeline of infectious disease, cancer supportive care and cardiovascular product candidates. The Company's product includes PMX-30063 and PMX-60056 and other PMX defensin-mimetics. In February 2011, the Company completed and announced positive results from a randomized, double-blind, placebo-controlled Phase I exposure- escalation clinical study where it evaluated the safety and pharmacokinetics of PMX-30063 in once-daily dosing up to 14 days. Cellceutix Corporation on Sept. 16, 2013, provided shareholders an update regarding the Company's recent acquisition of the assets of PolyMedix. In the acquisition announced September 9, 2013, Cellceutix acquired substantially all of the assets of PolyMedix, including multiple compounds, two of which were in clinical trials, equipment assets at the former PolyMedix headquarters, as well as the Intellectual Property relating to drugs in the pipeline. RADIO ONE: Moody's Affirms B3 CFR & Rates New $350MM Term Loan B3 ----------------------------------------------------------------- Moody's Investors Service assigned B2-LGD3 to Radio One, Inc.'s proposed $350 million Sr Secured Term Loan and $350 million Sr Secured Notes. Proceeds from the new debt instruments and from a $12 million of seller note (unrated) plus a portion of excess cash will be used to fund the purchase of Comcast's 47.5% stake of TV One, refinance Radio One's existing term loan and TV One's existing sr secured notes, and pay related transaction costs. Moody's affirmed Radio One's B3 Corporate Family Rating, B3-PD Probability of Default Rating, and SGL - 3 Speculative Grade Liquidity (SGL) Rating. The outlook is stable. The assigned ratings are subject to review of final documentation and no meaningful change in conditions of the transaction as advised to Moody's. Assigned: Issuer: Radio One, Inc. -- NEW $350 million Sr Secured 1st Lien Term Loan: Assigned B2, LGD3 -- NEW $350 million 1st Lien Sr Secured Notes: Assigned B2, LGD3 Affirmed: Issuer: Radio One, Inc. -- Corporate Family Rating: Affirmed B3 -- Probability of Default Rating: Affirmed B3-PD -- $335 million Senior Subordinated Notes: Affirmed Caa2, LGD5 -- Speculative Grade Liquidity (SGL) Rating: Affirmed SGL - 3 Outlook Actions: Issuer: Radio One, Inc. -- Outlook, remains Stable To be withdrawn: Issuer: Radio One, Inc. -- $386 million sr secured 1st lien term loan: B1, LGD2 to be withdrawn upon completion of transaction -- $25 million sr secured 1st lien revolving credit facility due March 31, 2015: Ba3, LGD1 to be withdrawn at March 31, 2015 expiry Over the past four years, Radio One completed a series of debt financed transactions to increase ownership in partially owned investments including Reach Media and TV One. Moody's believes the proposed purchase of Comcast's 47.5% interest in TV One represents the company's final step in the transition from a pure play radio operator to a diversified media company targeting African Americans, and management is committed to reducing leverage in the near term to enhance financial flexibility and facilitate the refinancing of the new $350 million term loan by its December 2018 maturity. Radio One's B3 Corporate Family Rating is forward looking and reflects high debt-to-EBITDA of 7.2x at the end of 2015 (including Moody's standard adjustments, pro forma for the transaction which consolidates TV One results) which weakly positions the company in its B3 rating. Moody's expect the company will track Moody's base case scenario reflecting at least high-single digit percentage growth in TV One's revenue and EBITDA, due largely to contractual increases in carriage fees which will more than offset potential weakness in radio operating performance. Management's actions to turn around radio station performance in Houston combined with significant contractual cost reductions for Reach Media will support consolidated EBITDA growth and improvement in credit metrics. Although the proposed transaction results in the company's leverage exceeding the 7.0x total leverage incurrence test (as defined) of the 9.25% senior sub notes issued in February 2014, the company obtained a consent from noteholders. Ratings incorporate ongoing media fragmentation and the cyclical nature of radio advertising demand evidenced by the revenue declines suffered by radio broadcasters during the past recession and the sluggish growth following the downturn. Ratings are supported by the company's radio presence in attractive large markets and likely revenue growth for TV One given carriage fee increases and subscriber additions. Moody's expect the company will maintain at least 20% EBITDA cushion to financial covenants over the next 12 months. Assuming the company raises a $25 million revolver facility, as planned, Moody's expect liquidity to be adequate with cash balances of a minimum $15 million over the next 12 months, greater than 90% revolver availability, and no significant debt maturities until December 2018. The stable outlook incorporates good growth in TV One revenue due to contractual increases in carriage fees and incremental advertising revenue from a growing subscriber base. The outlook also reflects our belief that radio operations will benefit from sustained advertising demand in key markets, Reach Media will markedly increase its EBITDA contribution given significant contractual expense reductions, and Interactive One will generate positive EBITDA over the next 12 months. Moody's expect leverage ratios will improve reflecting consolidated EBITDA growth combined with some debt reduction and liquidity will remain adequate with positive free cash flow as well as good EBITDA cushion to financial covenants. The stable outlook does not incorporate leverage being sustained above current levels nor debt financed acquisitions or distributions. Ratings could be upgraded if debt-to-EBITDA leverage ratios are sustained below 6.0x (incorporating Moody's standard adjustments) supported by good advertising demand for radio and cable network operations and a supportive economic environment in key markets. Enhanced liquidity including mid single digit percentage free cash flow-to-debt and good EBITDA cushion to financial maintenance covenants will also be required for an upgrade. Ratings could be downgraded if economic weakness or increased competition in one or more key markets results in Moody's belief that debt-to-EBITDA will not improve from initial levels. Increased debt levels to fund discretionary items including investments or share repurchases could negatively impact ratings, particularly if these actions impair liquidity. The principal methodology used in these ratings was Global Broadcast and Advertising Related Industries published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Radio One Inc., headquartered in Silver Spring, MD, is an urban oriented multi-media company that operates or owns interests in radio broadcasting stations (48% of revenue as of LTM December 2014 generated by 54 stations in 16 markets), a 99.6% ownership in TV One pro forma for the transaction, a cable television network (35% of revenue), an 80% ownership in Reach Media featuring the Tom Joyner Morning Show (12% of revenue), and ownership of Interactive One as well as other internet based properties (5% of revenue), largely targeting the African-American audience. The Chairperson, Catherine L. Hughes, and President, Alfred C. Liggins III (Chairperson's son), hold roughly 94% of the outstanding voting power and 46% of economic interest of the common stock. The company reported consolidated revenue of $441 million for the 12 months ended December 31, 2014. RADIO ONE: S&P Affirms 'B-' CCR on Proposed TV One Buyout --------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B-' corporate credit rating on Silver Spring, Md.–based radio broadcaster and cable television operator Radio One Inc. The rating outlook remains stable. S&P also affirmed its 'CCC' issue-level rating and '6' recovery rating on the company's existing senior subordinated notes. The '6' recovery rating indicates S&P's expectation for negligible recovery (0%-10%) of principal for lenders in the event of a payment default. The issue-level rating is two notches lower than S&P's corporate credit rating on Radio One. At the same time, S&P assigned its 'B' issue-level and '2' recovery ratings to Radio One's proposed $350 million term loan due 2018 and $350 million senior secured notes due 2022. The '2' recovery rating indicates S&P's expectation for substantial recovery (70%-90%; high end of the range) of principal for lenders in the event of a payment default. The rating on the proposed debt is one notch higher than the corporate credit rating on the company. S&P also revised its liquidity assessment on the company to "adequate" from "less than adequate." S&P expects that the company will successfully complete the proposed refinancing under the proposed terms and that this will improve its liquidity and restore a greater-than-15% margin of compliance against its financial covenants over the next 12 months. The company will use the proceeds from the proposed debt issuances, in addition to an unrated $25 million asset-backed credit facility and $12 million Comcast senior subordinated notes due 2019, to repay its existing $119 million TV One senior secured notes and $369 million term loan (including related fees, expenses, and call premium), as well as to fund the $227 million purchase of Comcast's 47.5% interest in TV One, bringing its ownership level to 99.6% in this entity. S&P will withdraw its issue-level ratings on the existing $369 million term loan and $25 million revolving credit facility when the proposed financing is complete and the notes are repaid in full. The 'B-' corporate credit rating on Radio One reflects S&P's assessment of the company's business risk profile as "weak" and its financial risk profile as "highly leveraged." "The stable rating outlook on Radio One reflects our expectation that the refinancing will be completed under the proposed terms," said Standard & Poor's credit analyst Heidi Zhang. "We believe this would enable the company to improve liquidity and maintain a greater-than-15% EBITDA cushion of compliance against its financial covenants over the next 12 months, while continuing to reverse the declining revenue trend in some of its key radio markets." S&P could consider lowering the rating if the proposed refinancing is not successful, given significant near-term maturities of the company's existing debt, including a revolver maturing in March 2015. S&P could also lower the rating if EBITDA declines at a low-single-digit percentage rate with no prospect of a turnaround, causing discretionary cash flow to turn negative and draining liquidity. This scenario could occur if the company's reformatting changes in the Houston and Washington D.C. markets cannot reverse the recent losses in these key markets. S&P regards an upgrade as unlikely during the next 12 months. However, this could occur if performance is better than S&P expects, allowing the company to generate substantial discretionary cash flow and reduce adjusted leverage to below 6x on a sustained basis, while maintaining adequate liquidity. RADIOSHACK CORP: Grupo Gigante to Buy Mexican Business for $31.8MM ------------------------------------------------------------------ Anthony Harrup, writing for The Wall Street Journal, reported that retailer Grupo Gigante said that it has agreed to buy RadioShack Corp.'s Mexican business for $31.8 million, which it plans to revamp and expand. According to the Journal, Gigante said in a filing with the Mexican stock exchange that it will buy RadioShack de Mexico, including 251 stores, brands and trademarks, via unit Office Depot de Mexico. 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 Corporation and affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015. The petitions were signed by Joseph C. Maggnacca, chief executive officer. Judge Kevin J. Carey presides over the case. David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki, Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M. Green, Esq., at Jones Day serve as the Debtors' bankruptcy counsel. David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H. Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel. Carlin Adrianopoli at FTI Consulting, Inc., is the Debtors' restructuring advisor. Maeva Group, LLC, is the Debtors' turnaround advisor. Lazard Freres & Co. LLC is the Debtors' investment banker. A&G Realty Partners is the Debtors' real estate advisor. Prime Clerk is the Debtors' claims and noticing agent. The Debtors disclosed total assets of $1.2 billion, versus total debt of $1.3 billion. 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. The U.S. Trustee has appointed seven members to the Official Committee of Unsecured Creditors. RADIOSHACK CORP: Salus Changes Mind About Making Better Bid ----------------------------------------------------------- Peg Brickley, writing for The Wall Street Journal, reported that Salus Capital Partners, the hedge fund trying to gain control of RadioShack Corp., has changed its mind about increasing its offer for the battered retail operation and said it is sticking with its original bid. According to the report, in court, Salus' lawyer said the company suspects one of RadioShack's senior lenders has engaged in bond trading that would position it to block potential lawsuits growing out of financing maneuvers last year. Alleged "machinations and manipulation" have so clouded the picture that Salus decided not to increase its investment in the form of an improved bid, the lawyer said, the Journal related. 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 Corporation and affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015. The petitions were signed by Joseph C. Maggnacca, chief executive officer. Judge Kevin J. Carey presides over the case. David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki, Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M. Green, Esq., at Jones Day serve as the Debtors' bankruptcy counsel. David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H. Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel. Carlin Adrianopoli at FTI Consulting, Inc., is the Debtors' restructuring advisor. Maeva Group, LLC, is the Debtors' turnaround advisor. Lazard Freres & Co. LLC is the Debtors' investment banker. A&G Realty Partners is the Debtors' real estate advisor. Prime Clerk is the Debtors' claims and noticing agent. The Debtors disclosed total assets of $1.2 billion, versus total debt of $1.3 billion. 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. The U.S. Trustee has appointed seven members to the Official Committee of Unsecured Creditors. RADIOSHACK CORP: West Virginia Objects to Sale of Client Info ------------------------------------------------------------- Matthew Baumgarten, writing for WDTV.com, reports that West Virginia Attorney General Patrick Morrisey has joined 32 other states and the District of Columbia in trying to stop RadioShack Corp. from selling private information of the Company's 117 million clients to a third party. According to WDTV.com, Mr. Morrisey sent a letter to the Texas Attorney General's Office in support of their formal objection filed on March 20, 2015. Dawn McCarthy and Steven Church at Bloomberg News relates that Salus Capital Partners has teamed up with liquidators to close the Company down. U.S. Bankruptcy Judge Brendan Shannon is yet to decide on the approval of the proposed sale of the Company's 1,700 stores to Standard General, as the judge extended the hearing after listening to arguments from plan supporters and opponents, Bloomberg News says. According to the report, Judge Shannon said that even if he eventually gives Standard General permission to acquire the Company, the sale may not close because of continuing disputes among the lenders. Bloomberg News says that thousands of workers would be laid if if the Standard General deal falls through. 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 Corporation and affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015. The petitions were signed by Joseph C. Maggnacca, chief executive officer. Judge Kevin J. Carey presides over the case. David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki, Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M. Green, Esq., at Jones Day serve as the Debtors' bankruptcy counsel. David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H. Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel. Carlin Adrianopoli at FTI Consulting, Inc., is the Debtors' restructuring advisor. Maeva Group, LLC, is the Debtors' turnaround advisor. Lazard Freres & Co. LLC is the Debtors' investment banker. A&G Realty Partners is the Debtors' real estate advisor. Prime Clerk is the Debtors' claims and noticing agent. The Debtors disclosed total assets of $1.2 billion, versus total debt of $1.3 billion. 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. The U.S. Trustee has appointed seven members to the Official Committee of Unsecured Creditors. The Committee has retained Cooley LLP as co-counsel. RADNOR HOLDINGS: Former CEO Can't Sue Skadden Until Appeal Over --------------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge barred the founder of defunct packaging company Radnor Holdings Corp. from filing any more litigation in bankruptcy court related to his already rejected allegations of misconduct by Skadden Arps Slate Meagher & Flom LLP and a fund manager until his appeal of its $4 million fee order concludes. About Radnor Holdings Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed disposable food service products in the United States, and specialty chemicals worldwide. Radnor and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 06-10894) on Aug. 21, 2006. When the Debtors filed for protection from their creditors, they disclosed total assets of $361,454,000 and debt of $325,300,000. Gregg M. Galardi, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Wilmington, Del.; and Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher &Flom, LLP, in Chicago, Ill., served as the Debtors' bankruptcy counsel. RAY MARSHALL: Colorado Springs Developer Files for Bankruptcy ------------------------------------------------------------- The Associated Press reported that Ray Marshall, a Colorado Springs developer who was involved in the relocation project for the U.S. Olympic Committee headquarters, and more than 80 partnerships and limited liability companies have filed for bankruptcy protection, citing $3.9 million in debts stemming from his developments. According to the report, Marshall still faces six theft and racketeering charges in connection with allegations that he diverted $1 million in grants and city funds from a $42.3 million deal to keep the USOC headquarters in Colorado Springs. Marshall said in the filing that he has $265,000 in assets, most of it from a 2005 loan on a four-bedroom home in northwest Colorado Springs that was sold in July, the report related. REVEL AC: Files Amended Motion to Sell Assets to Polo North ----------------------------------------------------------- Revel AC, Inc., and its affiliated debtors, filed with the U.S. Bankruptcy Court for the District of New Jersey an emergency motion seeking authority to sell its assets to Glenn Straub's Polo North Country Club, Inc., for $82.0 million in cash payable, plus the assumption of the Assumed Liabilities. Like the Original Polo North APA, the Debtors are required to use commercially reasonable efforts to obtain entry of the Sale Order that provides for the sale free and clear of leasehold interests. The holders of those leasehold interests (the Amenity Tenants, IDEA Boardwalk, and ACR Energy Partners) are expected to object to the Motion again and have their objections heard by the Court at the hearing on the Motion. Law360 reported that the Official Committee of Unsecured Creditors has urged the bankruptcy judge to proceed slowly with the casino's renewed push for a sale to Polo North, saying newly interested suitors should be given as much time as possible to develop competing offers. According to Law360, the Committee argued that granting Revel's request for an expedited sale hearing on the Straub deal is unwarranted in light the of recent upsurge of interest in the Atlantic City casino. According to the Debtors, the Polo North APA remains the highest and best -- and only -- definitive purchase agreement available to them after an exhaustive and costly 9-month sale process conducted during these Chapter 11 Cases. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19, 2014, to pursue a quick sale of the assets. The Chapter 11 cases are assigned to Judge Gloria M. Burns. The Debtors' Chapter 11 cases are jointly consolidated for procedural purposes. Revel AC estimated assets ranging from $500 million to $1 billion, and the same amount of liabilities. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' Counsel, and Moelis & Company, LLC, is the investment banker. The Debtors' solicitation and claims agent is Alixpartners, LLP. The prepetition first lenders are represented by Cadwalader, Wickersham & Taft LLP. The prepetition second lien lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP. This is Revel AC's second trip to bankruptcy. The company first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, with a prepackaged plan that reduced debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. REVEL AC: Multiple Parties Object to Wells Fargo Settlement ----------------------------------------------------------- BankruptcyData reported that multiple parties -- including ACR Energy Partners, Idea Boardwalk, IGT and the Bank of New York Mellon -- filed separate objections to Revel AC's request for approval of a settlement with the Official Committee of Unsecured Creditors and Wells Fargo, and the joint stipulation among the Debtors, the Committee, and the D.I.P. secured parties amending the final D.I.P. order. According to BData, ACR Energy Partners states, "Indeed, the Settlement offers no purported benefit for the estates other than a $1.35 million fund that could only be distributed to general unsecured creditors upon the effectiveness a chapter 11 plan. There is no hope that such a plan will be filed in the foreseeable future, and based upon the tenets of the absolute priority and other requirements of the Bankruptcy Code, the likelihood of any such plan being confirmed is remote. Nonetheless, even if the plan does fail, the DIP Secured Parties would still receive all benefits contemplated by the Settlement, including an order providing them all sale proceeds, with limited carve outs, and protection from its statutory obligations to pay administrative creditors for the cost of maintaining its collateral. Indeed, approval of the Settlement Motion and limiting the DIP Secured Parties' contribution to the amount set forth in the artificially constructed DIP budget and $1.35 million of sale proceeds ensures that the estates will be administratively insolvent and general unsecured creditors will receive nothing at all. In fact, together with the entry of the Final DIP Order, this Settlement is yet another attempt to cure the deficient record the Debtors presented at the hearing on what has become known as the CUP Motion, render the CUP Motion moot and foreclose all possibilities that ACR will recover anything on account of its accruing administrative expense claim, all the while continuing to support the administration of these cases by providing necessary utility and energy services to the DIP Secured Parties' collateral." BData added that IGT's objection explains, "IGT objects to the Debtors' above referenced motion (the 'Motion'), because it does not clearly provide for adequate protection of IGT's secured claim in this case. In addition, the proposed Order granting the Motion approves a Settlement Agreement among the Debtors, the Committee, and Wells Fargo, but no Settlement Agreement has been filed with this court or served on parties in interest. IGT is a creditor in this bankruptcy case, holding a perfected first priority purchase money security interest in certain gaming equipment ('IGT Collateral'). IGT filed a proof of claim in this case asserting a secured claim in the amount of $5,570,873.43, which claim has been paid down to less than one million dollars during the course of the case." About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19, 2014, to pursue a quick sale of the assets. The Chapter 11 cases are assigned to Judge Gloria M. Burns. The Debtors' Chapter 11 cases are jointly consolidated for procedural purposes. Revel AC estimated assets ranging from $500 million to $1 billion, and the same amount of liabilities. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' Counsel, and Moelis & Company, LLC, is the investment banker. The Debtors' solicitation and claims agent is Alixpartners, LLP. The prepetition first lenders are represented by Cadwalader, Wickersham & Taft LLP. The prepetition second lien lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP. This is Revel AC's second trip to bankruptcy. The company first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, with a prepackaged plan that reduced debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. ROTHSTEIN ROSENFELDT: TD Bank Ordered to Pay $67-Mil. to Victims ---------------------------------------------------------------- Carlos Harrison, writing for Daily Business Review, reported that U.S. District Judge Marcia G. Cooke in Miami has ordered TD Bank to pay $67 million to a group of investors in disbarred attorney Scott Rothstein's failed $1.2 billion Ponzi scheme. According to the Business Review, Judge Cooke's order could finally bring an end to a three-year battle over the $32 million in compensatory damages and $35 million in punitive damages awarded by a jury to Texas-based Coquina Investments LLC. TD Bank's motion asking the U.S. Court of Appeals for the Eleventh Circuit to stay Judge Cooke's order was denied by a three-judge panel, the Business Review said. Law360 reported that the trustee overseeing the bankruptcy of a hedge fund that fed into Mr. Rothstein's $1.2 billion Ponzi scheme settled claims from six of eight insurers who said $70 million worth of policies issued to the fund were obtained through deception. According to the report, just before a summary judgment hearing, Banyon Income Fund LP Chapter 7 trustee Robert C. Furr notified the Southern District of Florida that he had settled the dispute with six insurers -- RLI Insurance Co., Columbia Casualty Co., Westchester Fire Insurance Co., Ironshore Indemnity Co., Zurich American Insurance Co. and National Union Fire Insurance Company of Pittsburgh PA -- and asked for a stay of proceedings while the bankruptcy court reviews the deal. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. RRA won approval of an amended liquidating Chapter 11 plan pursuant to the Court's July 17, 2013 confirmation order. The revised plan, filed in May, is centered around a $72.4 million settlement payment from TD Bank NA. SABRE HOLDINGS: Moody's Raises CFR to Ba3 & Rates $530MM Notes Ba3 ------------------------------------------------------------------ Moody's Investors Service upgraded Sabre Holdings Corporation's Corporate Family Rating to Ba3, from B1, and its Probability of Default rating to Ba3-PD, from B1-PD. Moody's assigned a Ba3 rating to the proposed $530 million of senior secured notes (to be issued by Sabre's wholly-owned subsidiary, Sabre GLBL Inc.), and affirmed the Ba3 rating for the company's existing senior secured credit facilities. Moody's also upgraded the rating for Sabre's senior unsecured notes to B2, from B3. Sabre's SGL-2 speculative grade liquidity rating was also affirmed. The ratings have a stable outlook. The company will use the net proceeds from the new notes offering primarily to redeem $480 million of senior secured notes and pay premiums. Moody's analyst Raj Joshi said, "The upgrade reflects our view that Sabre's credit metrics will progressively strengthen from organic earnings growth and its financial profile will significantly benefit from the recently completed sale of the cash-absorptive Travelocity and lastminute.com businesses. The divestitures will allow management to focus on the remaining businesses that have good growth prospects and operating profit margins." He added, "Although Sabre's litigation risk has moderated it continues to remain high. The company's improved financial profile can better accommodate litigation-related costs and expenses and potential adverse outcomes from its pending legal proceedings." The Ba3 CFR reflects Moody's expectation that Sabre's total debt to EBITDA (Moody's adjusted) will progressively decline to 3.5x by mid 2016, from about 4.0x, pro forma for the proposed refinancing. Moody's expects Sabre's EBITDA growth to exceed its revenue growth of about 5%, and Sabre should generate free cash flow of approximately 5% and 8% of total debt in FY 2015 and FY 2016, respectively. Moody's anticipates only a modest increase in leverage from a possible acquisition for approximately $500 million that Sabre has indicated it could consummate in its Travel Network segment. Sabre is one of the largest Global Distribution Systems (GDS) providers globally and is the leader in the North American market. Sabre's technology infrastructure and its existing relationships with travel suppliers and buyers enable the company to provide valuable content and services to its customers. The Ba3 CFR is also supported by Sabre's recurring, transaction-based revenues and strong growth prospects for its Airline and Hospitality Solutions segment that will improve Sabre's earnings diversity. However, Sabre operates in a highly competitive market and travel suppliers have increasingly used a direct distribution model to maintain control or negotiate better pricing for GDS services. The company also has high revenue exposure to the cyclical airline industry and there is some customer revenue concentration. Additionally, the rating is constrained by the financial sponsors' large controlling interest in the company and their significant influence on the company's financial policies. Sabre's senior secured debt represents approximately 85% of the total funded debt. As a result, the senior secured debt is rated at the same level with Sabre's Ba3 CFR. The SGL-2 liquidity rating reflects Sabre's good liquidity comprising cash balances, availability under revolving credit facilities and free cash flow. Moody's could upgrade Sabre's ratings if the financial sponsors substantially reduce their equity interest and the company maintains good earnings growth such that total debt to EBITDA is sustained below 3x (incorporating Moody's standard analytical adjustments) and free cash flow in the high single digit percentages of total debt. Moody's could downgrade Sabre's ratings if the loss of a significant customer or unfavorable changes in pricing or the distribution of travel supply cause total debt to EBITDA to increase to over 4x, and free cash flow declines to the low single digit percentages for an extended period of time. The ratings could additionally come under pressure if adverse outcomes in legal proceedings have a meaningful financial impact on Sabre or increase its business risks. Moody's has taken the following ratings actions: Issuer: Sabre Holdings Corporation -- Corporate Family Rating, Upgraded to Ba3 from B1 -- Probability of Default Rating, Upgraded to Ba3-PD from B1-PD -- Speculative Grade Liquidity Rating, Affirmed, SGL-2 -- $400 million Senior Unsecured Bonds, Upgraded to B2 (LGD6) from B3 (LGD6) Issuer: Sabre GLBL Inc. -- $425 million Senior Secured Term Loan C due 2018, Affirmed, Ba3 (LGD3) -- $35 million Senior Secured Revolving Credit Facility due 2018, Affirmed, Ba3 (LGD3) -- $370 million Senior Secured Revolving Credit Facility due 2019, Affirmed, Ba3 (LGD3) -- $1,775 million Senior Secured Term Loan B due 2019, Affirmed, Ba3 (LGD3) -- $350 million Senior Secured Incremental Term Loan Facility due 2019, Affirmed, Ba3 (LGD3) -- $800 million Senior Secured Notes due 2019, to be withdrawn at the closing of the new senior secured notes -- New Senior Secured Notes, Assigned, Ba3 (LGD3) Outlook Actions: Issuer: Sabre Holdings Corporation -- Outlook, Stable Sabre is a leading technology solutions provider to the global travel and tourism industry with $2.6 billion in annual revenues. Funds affiliated to TPG Partners, Silver Lake Partners and other co-investors own a majority equity interest in Sabre. 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. SALADWORKS LLC: Receives Auction Approvals Over Objections ---------------------------------------------------------- Stephanie Gleason, writing for Daily Bankruptcy Review, reported that Judge Laurie Selber Silverstein granted a number of requests from fresh salad franchiser Saladworks LLC, siding with the company and its majority owner and warning the feuding parties to keep their rhetoric in check. "The rhetoric in the filings is unhelpful," Judge Silverstein, who was appointed to the U.S. Bankruptcy Court in Wilmington, Del., last October, said, the DBR report cited. "I don't want to read through 10 pages of why the other guy is wrong -- not wrong, but bad -- and all the things that have happened before I get to the substance of the dispute." Law360 reported that a major creditor and an equity holder of Saladworks took aim at the casual restaurant chain's sale plans and protested the Debtor's bid to have the bankruptcy shield its CEO from breach-of-contract claims in Delaware Chancery Court or attempts to collect on loans he purportedly guaranteed. According to Law360, in objections filed with the Delaware bankruptcy court, WS Finance LLC, owed on $2.5 million in unsecured loan obligations, and JVSW LLC, which owns a 30 percent stake in Saladworks, called the restaurant chain's proposed sale plan an "expensive subterfuge" by CEO John Scardapane that takes the place of a Chapter 11 plan and locks the minority equity holder out of the process. About Saladworks, LLC Developed in 1986, Saladworks, LLC, is the first and largest fresh-salad franchise concept in the United States. From its beginning in the Cherry Hill Mall, Saladworks quickly expanded to 12 additional locations in area malls and soon thereafter began franchising. The company has franchise agreements with 162 different franchisees. The equity owners are J Scar Holdings, Inc., (70%) and JVSW LLC (30%). Saladworks, LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 15-10327) on Feb. 17, 2015. The case assigned to Judge Laurie Selber Silverstein. The Debtor has tapped Landis Rath & Cobb LLP as counsel; SSG Advisors, LLC, as investment banker; EisnerAmper LLP, as financial advisor; and Upshot Services LLC, as claims and noticing agent. The Debtor estimated $10 million to $50 million in assets and debt. The U.S. trustee overseeing the Chapter 11 case of Saladworks LLC appointed three creditors of the company to serve on the official committee of unsecured creditors. SAXBY'S COFFEE: Court Rejects Bid to Extend Time to File Appeal --------------------------------------------------------------- Chief Bankruptcy Judge Eric L. Frank of the Eastern District of Pennsylvania denied the request of John Larson and Greg Bayer for extension of time to file a notice of appeal. Judge Frank said Larson and G. Bayer have not proven by a preponderance of the evidence that the missed appeal deadline was the product of "excusable neglect" as is their burden under Fed. R. Bankr. P.8002(d)(1)(B). Larson and G. Bayer initially sought a determination that their pre-petition claims against debtor Nicholas Bayer are excepted from discharge under 11 U.S.C. Sec. 523(a). By order dated December 2, 2015 and entered on December 3, 2014, the court entered judgment against the Plaintiffs and in favor of N. Bayer. The 14-day appeal period passed without an appeal. For more than five years, in the chapter 11 case of Saxby's Coffee Worldwide, LLC, Bky. No. 09-0340 as well as in the three individual bankruptcy cases of its principals, Larson and G. Bayer have maintained that they were wronged by N. Bayer and by the asset sale transaction that underlies their claim against him. The adversary case is, JOHN LARSON and GREG BAYER, Plaintiffs, v. NICHOLAS BAYER, Defendant, Adv. No. 12-0379 ELF (Bankr. E.D. Pa.). The bankruptcy case is, IN RE: NICHOLAS BAYER, Chapter 7, Debtor, Bky. No. 12-11083 ELF (Bankr. E.D. Pa.). A copy of Judge Frank's March 23, 2015 Opinion is available at http://is.gd/CJvvLHfrom Leagle.com. Conshohocken, Pennsylvania-based Saxby's Coffee Worldwide LLC is a 37-store chain that operates 14 stores in Pennsylvania, where it acquired parts of the former Bucks County Coffee Co. in 2008, along with others scattered from Washington and Atlanta to California. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 09-15898) on Aug. 5, 2009. Paul J. Winterhalter, Esq., serves as the Debtor's counsel. The Company estimated up to $50,000 in assets and $1 million to $10 million in debts when it filed for bankruptcy. By Order dated May 4, 2011, as modified by Order dated Dec. 8, 2011, the Court confirmed the Debtor's Fifth Amended Plan of Reorganization. SIGNAL INT'L: Bankruptcy Likely Before Next Trafficking Trial ------------------------------------------------------------- Law360 reported that a Texas federal judge has denied Signal International LLC's bid to delay an April human trafficking trial, despite the shipbuilder telling the court it is a virtual certainty that it will file for bankruptcy before the trial ends. According to Law360, seeking to push back proceedings until at least August, the beleaguered company said that declining revenues and compounding legal fees have forced it to consider its restructuring options. It said it expects to file for Chapter 11 bankruptcy immediately before, or shortly after, it begins trial, the report said. STOCKTON, CA: Franklin Templeton Files Opening Brief in Plan Appeal ------------------------------------------------------------------- Reuters reported that the holdout creditor in Stockton, California's bankruptcy case filed its opening brief in an appeal of the city's reorganization plan, claiming "no bondholder has ever received so little in the history of municipal bankruptcy." According to the report, the creditor, two funds managed by Franklin Templeton Investments, said Stockton's plan to exit Chapter 9 bankruptcy was discriminatory and punitive. Franklin said it would receive less than 1 percent of its $30.5 million unsecured claim in the case, now before the U.S. Bankruptcy Appellate Panel of the Ninth Circuit, the report related. The brief claimed that by confirming a plan providing such a small distribution, compared with recoveries of 52 percent to 100 percent for other unsecured claims, U.S. Bankruptcy Judge Christopher Klein erred in backing Stockton's exit plan, the report further related. About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. Judge Klein, in late October 2014, confirmed the debt-adjustment plan by the city of Stockton, rejecting arguments that it unfairly discriminated among creditors by chopping a mutual fund's recovery to near zero while shielding city retirees from any impairment at all. Stockton, California city manager Kurt Wilson said the city's First Amended Plan of Adjustment, as Modified, became effective; and the Company emerged from Chapter 9 protection, following the U.S. Bankruptcy Court's confirmation of the plan on Feb. 4, 2015. * * * The Troubled Company Reporter, on Sep. 26, 2014, reported that Moody's Investors Service has affirmed the long-term ratings of the city of Stockton's (CA) water and sewer enterprises' debts at Ba1. Moody's have also changed the outlook on the city's water bond rating to developing from stable, while the developing outlook on the sewer system's rating remains the same. The TCR, on Nov. 10, 2014, reported that Moody's Investors Service has upgraded to Ba3 from Caa3 the City of Stockton's (CA) series 2006 lease revenue bonds and affirmed the city's 2007 pension obligation at Ca. Moody's have removed the developing outlook from the Series 2006 bonds and Moody's have removed the negative outlook from the Series 2007 bonds. The TCR, on Nov. 14, 2014, reported that Standard & Poor's Ratings Services raised its long-term rating and underlying rating (SPUR) to 'B-' from 'CCC' on the Stockton Public Financing Authority, Calif.'s series 2003A and 2003B certificates of participation (COPs) and its SPUR to 'B-' from 'CCC' on the authority's series 2006A lease revenue refunding bonds. Standard & Poor's also affirmed its 'CC' SPUR on Stockton Redevelopment Agency's series 2004 (arena project) revenue bonds. All series are appropriation obligations of Stockton. The outlook on the series 2003A and 2003B COP long-term rating and SPUR and on the 2006A lease revenue refunding bond SPUR is stable, and the outlook on the series 2004 revenue bond rating (arena project) is negative. TENNECO INC: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed the Issuer Default Rating (IDR) for Tenneco Inc. (TEN) at 'BB+'. In addition, Fitch has affirmed TEN's secured revolving credit facility and secured Term Loan A ratings at 'BBB-' and assigned both a recovery rating of 'RR1'. Fitch has also upgraded TEN's senior unsecured notes rating to 'BB+' from 'BB' and assigned the notes a recovery rating of 'RR4'. The Rating Outlook is Stable. TEN's ratings apply to a $1.2 billion secured revolving credit facility, a $300 million secured Term Loan A and $725 million in senior unsecured notes. KEY RATING DRIVERS TEN's ratings continue to be supported by the company's market position as a top global supplier of emission control and vehicle suspension components, with a strong presence in both the original equipment and aftermarket segments. In addition, tightening regulations governing commercial truck and off-highway vehicle emissions in a number of global jurisdictions have led to increased growth opportunities and higher profitability for the company. TEN's credit profile is characterized by slowly declining, but somewhat variable, leverage and adequate liquidity. However, free cash flow margins are relatively low. Primary risks to the company's credit profile include industry cyclicality, volatile raw material costs and variability in fuel prices. Cyclical risk is mitigated somewhat by the increasing diversification of the company's customer base and improving cost structure, as well as ever-tightening global emissions regulations, which will drive growth in the market for emission control products independent of global economic conditions. Also mitigating risk and supporting near-term liquidity is a lack of material debt maturities until 2019. Volatile fuel prices present a risk because TEN's equipment on smaller and more fuel efficient vehicles tends to be less profitable. As with other auto suppliers, TEN seeks to minimize the effect of volatility in raw material prices by passing along a substantial portion of the change in its material costs to its original equipment customers. Another meaningful risk is the potential for an adverse outcome in the ongoing antitrust investigation of TEN being conducted by the European Commission (EC) and the U.S. Department of Justice (DOJ). Details of the investigation, the potential timing of any resolution and the ultimate exposure to TEN are currently unknown, but the DOJ's willingness to grant the company conditional leniency through the Antitrust Division's Corporate Leniency Policy is encouraging. The Leniency Policy limits TEN's exposure as long as the company self- reports matters to the DOJ and continues to cooperate with the DOJ's investigation. Nonetheless, a particularly adverse outcome from the investigation by either the EC or the DOJ could lead to a negative rating action. TEN's secured revolver and secured Term Loan A both have a recovery rating of 'RR1' and are rated one-notch above the company's IDR, reflecting their substantial collateral coverage, which includes virtually all of the company's U.S. assets and up to 66% of the stock of its first-tier foreign subsidiaries. Based on Fitch's recovery rating criteria, 'BBB-' is the highest issue rating that may be assigned to an issuer with an IDR of 'BB+' or lower. Fitch has assigned a recovery rating of 'RR4' to TEN's senior unsecured notes, reflecting Fitch's revised expectations for an average recovery in a distressed scenario. The assignment of an 'RR4' recovery rating has led to an upgrade of the rating on TEN's senior unsecured notes to 'BB+'. Fitch expects demand for TEN's Clean Air products to remain relatively strong over the intermediate term as global emissions requirements continue to tighten. In particular, increasingly strict regulations for commercial trucks and off-road equipment, as well as for locomotives and water-borne vessels, will contribute to revenue growth that outpaces the growth of global light vehicle production. Fitch also expects TEN's revenue stream to become increasingly diversified over the next several years as the company's product penetration in non-traditional segments increases. New technologies in the company's Ride Performance division, including active and semi-active suspension systems, will also contribute to growth in revenue and profitability, although Fitch continues to expect emissions control products to be the larger contributor to TEN's sales growth over the intermediate term. Despite these improvements, in the near term, sales are likely to be negatively affected by foreign exchange translation as a result of the strong U.S. dollar, which will mask much of the growth associated with higher business levels. Fitch expects the higher margins generated by TEN's commercial and off-highway business to combine with improvements in the company's cost structure to support further margin growth over the intermediate term. Fitch's calculated EBITDA margin was 8.6% in 2014, but excluding substrate sales (which are largely passed through to the company's customers with little markup), the EBITDA margin would have been a relatively strong 11.1% for the year. In 2014, substrate pass-through revenue totaled $1.9 billion, or 23%, of the company's $8.4 billion in total revenue. Since larger engines require more substrates in their emissions control systems, substrate pass-through revenue is likely to increase as a percentage of the company's overall revenue over the intermediate term. This could result in some overall margin dilution that could offset a portion of the higher profitability associated with emissions control products for larger engines. Fitch expects TEN's credit profile to strengthen modestly over the intermediate term on a combination of higher business levels and continued discipline on controllable costs. EBITDA gross leverage will likely decline modestly during 2015, potentially to below 1.5x by year end, and it is likely to decline further over the next couple of years. However, Fitch expects leverage to fluctuate through the year as the company uses its revolver and other short-term borrowings to offset typical seasonal swings in its cash flows. Debt levels will decline somewhat as the company makes normal amortization payments on its Term Loan A, but with net leverage near the company's target at year-end 2014, further debt reduction is likely to be a low priority. TEN ended 2014 with net leverage, according to its own calculation, of 1.1x, versus its target of 1.0x. This suggests that the company will deploy free cash flow primarily toward shareholder-friendly activities going forward, such as the $350 million share repurchase program announced in February 2015. TEN's free cash flow was ($17) million in 2014, primarily due to increased capital spending to support the company's growth initiatives. However, in 2013 the company produced positive free cash flow of $220 million, the strongest level of free cash flow in years. In 2015, Fitch expects free cash flow to turn positive again, but it is likely to remain under pressure from relatively high capital spending. The company also has fully utilized it U.S. tax NOLs, which led to higher cash tax payments in 2014 and will continue to pressure free cash flow going forward. Over the past several years (with the exception of 2014), TEN's free cash flow margins have generally been in the low-single digit range, even after adjusting for substrate revenue, and Fitch expects the company to continue producing low-single-digit free cash flow margins over the intermediate term. These low free cash flow margins are a significant factor weighing on TEN's IDR and are well below those of higher-rated auto suppliers. Despite the negative free cash flow, TEN's overall liquidity position remained adequate at year-end 2014. The company ended the year with $282 million in cash and cash equivalents, augmented by nearly full availability on its $1.2 billion secured revolver. (The company had $34 million in letters of credit backed by the revolver at year-end 2014.) However, most of TEN's cash was located outside the U.S. at year-end 2014. Going forward, Fitch expects cash liquidity to remain near the current level, with any excess cash targeted toward the company's recently announced $350 million three-year share repurchase program. Although TEN is likely to maintain only modest cash balances in the U.S., the company does repatriate cash when needed to fund certain U.S. activities. TEN has not been an acquisitive company in recent times, but Fitch expects the company would dial back on share repurchases to support its liquidity position in the event that it undertook an acquisition. TEN's credit profile strengthened modestly in 2014 on continued improvements in the company's operating performance, which offset a slight increase in debt. Revenue increased 5.7% to $8.4 billion as the effect of higher business levels was partially offset by negative foreign exchange translation. Fitch's calculated EBITDA margin was 8.6% in 2014, up from 8.1% in 2013. As of year-end 2014, TEN's EBITDA leverage (debt/Fitch-calculated EBITDA) was 1.6x, down from 1.7x at year-end 2013, while debt rose to $1.13 billion from $1.10 billion. Lease-adjusted leverage (lease-adjusted debt/ EBITDAR) was 2.3x at year-end 2014. Fitch's calculation of lease adjusted leverage includes the impact of operating leases as well as $153 million in off-balance sheet borrowings on the company's European accounts receivable securitization facilities. FFO adjusted leverage at year-end 2014 rose slightly to 3.3x from 3.1x at year-end 2013, while FFO fixed charge coverage declined to 3.4x from 3.8x. The funded status of TEN's global pension plans declined in 2014, falling to 78% at year-end 2014 from 84% a year earlier. In the U.S., the funded status declined to 75% from 82% at the end of 2013. As with many corporate plans, the year-over-year decline in the funded status was primarily due to a combination of lower long-term interest rates and revised mortality assumptions. TEN used a 4.1% discount rate to value its U.S. projected benefit obligation in 2014, down from 4.8% in 2013. On a dollar basis, TEN's global plans were underfunded by only $205 million ($115 million in the U.S.), which Fitch views as manageable given the company's liquidity position and free cash flow prospects. TEN has estimated that required cash contributions to its global pension plans will be $31 million in 2015, down from actual contributions of $46 million in 2014. KEY ASSUMPTIONS -- Global economic conditions continue to improve at a modest pace, leading to low-single digit growth in global auto production. -- In addition to increased auto production, TEN's revenue benefits from higher commercial vehicle and off-road equipment demand as emissions regulations in these segments continue to tighten many global markets. -- With the improving vehicle production volumes and increased penetration, TEN's revenue and profitability grow, but negative foreign exchange masks much of the near-term revenue improvement. -- Capital spending remains elevated by historical standards over the intermediate term to support new product wins and growth in the company's manufacturing footprint. -- Debt maturities are refinanced through over the next several years. -- Share repurchases total of $350 million over the next three years, and the company continues with share buybacks following the expiration of the current program. -- The company's cash remains near the year-end 2014 level though the intermediate term. RATING SENSITIVITIES Positive: Further developments that may, individually or collectively, lead to a positive rating action include: -- An Increase in TEN's value-added free cash flow margin to about 3% on a consistent basis; -- A decline in FFO adjusted leverage to 2.5x or lower; -- An increase in FFO fixed charge coverage to 5x or higher. Negative: Further developments that may, individually or collectively, lead to a negative rating action include: -- A severe decline in global vehicle production that leads to reduced demand for TEN's products; -- A decline in TEN's value-added free cash flow margin to below 1% for an extended period; -- An increase in FFO adjusted leverage to 4x or higher; -- A decline in FFO fixed charge coverage to 3x or lower; -- An adverse outcome from the antitrust investigation that lead to a significant decline in liquidity or an increase in leverage. Fitch has taken these rating actions on TEN with a Stable Rating Outlook: -- IDR affirmed at 'BB+'; -- Secured revolving credit facility rating affirmed at 'BBB-' and assigned a recovery rating of 'RR1'; -- Secured Term Loan A rating affirmed at 'BBB-' and assigned a recovery rating of 'RR1'; -- Senior unsecured notes rating upgraded to 'BB+/RR4' from 'BB'. TOWNSQUARE MEDIA: S&P Keeps B- Unsec. Notes Rating After Downsize ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its issue-level and recovery ratings on U.S.–based radio broadcaster and event production company Townsquare Media Inc.'s proposed senior unsecured notes and senior secured credit facility are not affected by the company's proposed $20 million shift from the senior unsecured notes to the term loan. Specifically, S&P's 'B-' issue-level rating and '5' recovery rating on Townsquare's proposed senior unsecured notes remain unchanged after the company downsized the originally proposed amount from $320 million to $300 million with a 6.5% coupon. The '5' recovery rating indicates S&P's expectation for modest recovery (10%-30%; low end of the range) of principal for debtholders in the event of a payment default. S&P's 'BB-' issue-level and '1' recovery ratings on the company's proposed senior secured credit facility remain unchanged after Townsquare subsequently upsized the originally proposed $255 million term loan by $20 million to $275 million. The total senior secured credit facility, including the unchanged $50 million revolving credit facility, is now $325 million. The '1' recovery rating indicates S&P's expectation for very high recovery (90%-100%) of principal for debtholders in the event of payment default. The company will use the proceeds from the refinancing to repay the existing senior secured credit facility and the 9% senior notes issued by its subsidiary, Townsquare Radio LLC. RATINGS LIST Townsquare Media Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged Townsquare Media Inc. Senior secured credit facility BB- Recovery Rating 1 Senior unsecured notes B- Recovery Rating 5L TRANSTAR HOLDING: S&P Alters Outlook to Stable on ETX Holdings Deal ------------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Cleveland-based transmission parts distributor Transtar Holding Co. and revised the rating outlook to stable from negative. At the same time, S&P affirmed its 'B+' rating on Transtar's first-lien revolver and term loan B. The '2' recovery rating on this debt remains unchanged, indicating S&P's expectation for substantial (70%-90%) recovery for lenders in the event of a payment default, at the high end of the range. S&P also affirmed its 'CCC+' rating on Transtar's second-lien term loan B. The '6' recovery rating on this debt remains unchanged, indicating S&P's expectation for negligible (0%-10%) recovery for lenders in the event of a payment default. "The outlook revision reflects our view that the company appears to be on track with its integration of ETX Holdings Inc., which the greater-than-anticipated cost synergies as a result of footprint consolidation, store and route optimization, layoffs, and other operational efficiencies demonstrate," said Standard & Poor's credit analyst Naomi Dsouza. Two industry-specific factors -- miles driven and vehicle age -- remain somewhat weak. Miles driven have increased since 2008, but they remain less than the 2007 peak. In addition, the average age of vehicles on the road has risen in recent years because of newer vehicles' higher quality and durability. The stable rating outlook reflects S&P's view that the company can maintain its above-average EBITDA margins and positive free operating cash flow, with a modest decline in leverage over the next 12 months. Transtar appears to be on track with its integration of the 2014 ETX acquisition, which S&P expects will result in some margin expansion as a result of cost savings from footprint consolidation efforts. S&P could lower the rating if the company's free cash flow generation turns negative. This could occur if gross margins decline significantly, perhaps as a result of significantly weaker-than-expected end-market demand, or unforeseen acquisition integration issues, while working capital needs increase. S&P considers an upgrade unlikely during the next 12 months because it believes Transtar'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. TRI-VALLEY CORP: K&L Gates Wants Out of Securities Action --------------------------------------------------------- Law360 reported that K&L Gates LLP asked a California federal court to cut legal malpractice claims from a securities class action against its clients, former directors of oil and gas company Tri-Valley Corp., saying the law firm never owed the investors of its clients any fiduciary duty and the claims are barred by an automatic stay in bankruptcy court anyway. K&L Gates was hired in August 2012 to represent Tri-Valley Corp. and two of its subsidiaries as it entered Chapter 11 bankruptcy, the report said. The case is Siegal et al v. Gamble et al., Case No. 3:13-cv-03570 (N.D. Cal.). About Tri-Valley Corp. Bakersfield, California-based Tri-Valley Corporation (OTQCB: TVLY) -- http://www.tri-valleycorp.com/-- explored for and produced oil and natural gas in California and has two exploration-stage gold properties in Alaska. It had 21 wells in California and exploration rights in Alaska. Tri-Valley and three affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-12291) on Aug. 7, 2012, with funding from lenders that require a prompt sale of the business. The affiliates are Tri-Valley Oil & Gas Co., TVC Opus I Drilling Program, L.P., and Select Resources Corporation, Inc. K&L Gates LLP serves as bankruptcy counsel. Attorneys at Landis Rath & Cobb LLP serve as Delaware and conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the claims agent. The Debtor disclosed assets of $17.6 million and liabilities totaling $14.1 million. Former Chairman G. Thomas Gamble, who is financing the bankruptcy case, is owed $7.2 million on several secured notes. There is an unsecured note for $528,000 and $9.4 million in unsecured debt owing to suppliers. An official committee of unsecured creditors has been appointed in the case. The Tri-Valley case was converted to Chapter 7 according to a March 25, 2013 order. Charles A. Stanziale, Jr., was appointed as chapter 7 trustee. UNIT CORP: Fitch Affirms 'BB' Issuer Default Rating, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed all ratings for Unit Corporation (Unit; NYSE: UNT) with a Stable Rating Outlook. Approximately $812 million of debt is affected by the rating action. KEY RATING DRIVERS Unit's ratings reflect the company's increasing exposure to liquids, strong reserve replacement history, modestly diversified business mix (with about 30% of EBITDA coming from non- exploration & production [E&P] segments), rig fleet rationalization and repositioning efforts, midstream footprint with an increasingly fee-based contract mix, and manageable leverage levels. These considerations are offset by the relatively small size of its proved reserve base and production profile, continued risk of obsolescence within its onshore rig fleet, and impact of significantly weaker oil prices on cash flows. The E&P segment (about 70% of EBITDA) reported net proved reserves (1p) of 179 million barrels of oil equivalent (MMboe; 76% developed) for the year-ended 2014 and production of 50.1 thousand boe per day (Mboepd; 46.3% liquids mix), a 9% year-over-year increase, as of Dec. 31, 2014. This results in a reserve life of nearly 10 years. One-year organic reserve replacement was strong at 210%, relative to a three-year average of 174% and management's target of 150%, with an associated Fitch-calculated finding and development (F&D) cost of just $17.81/boe. The company's operational metrics highlight its shift to unconventional drilling, benefits of shale-linked efficiency gains, and improving liquids mix. The contract drilling segment (nearly 25% of EBITDA) reported a modest reduction in revenue per day to $17,318, excluding intercompany revenue (roughly 10%-15% of drilling activities), but the Fitch-calculated rig day margin, excluding intercompany operations, improved by 4% to $7,328 mainly due to the placement of higher margin, new BOSS rigs into service during the second half of 2014. Utilization rates in 2014 increased to 63% benefiting from the increase in U.S. onshore activity, as well as the sale of four larger, idle rigs in the first quarter and removal of 31 older, non-core rigs from service in late December. The rapid decline in the average number of active Unit rigs from 80.9 during the fourth quarter of 2014 to 37 rigs as of March 24, 2015 illustrates the rapid industry-wide release of U.S. onshore rigs. Fitch believes that Unit's asset quality and mix issues may compound the effects of the downcycle with some offset provided by the four working and an additional four to be delivered BOSS rigs. Credit metrics remained strong for the year ended 2014. The Fitch-calculated debt/EBITDA, debt/proved developed reserves (PD), and debt/flowing barrel were approximately 1.1x, $5.95/boe, and $16,200, respectively. The upstream credit metrics allocate all outstanding debt to the E&P segment. Fitch expects these metrics to erode over the next few years as the impact of lower oil prices takes hold. Fitch's base case, assuming a West Texas Intermediate (WTI) price of $50, forecasts debt/EBITDA of less than 2.1x in 2015. However, these remain consistent with or better than similarly rated North American (N.A.) E&P peers. SHIFTING FROM GROWTH TO RETURNS IN WEAK PRICE ENVIRONMENT Unit, consistent with other N.A. independent E&P peers, has shifted its focus from production growth to improving efficiencies and maintaining activity at its most promising, higher return acreage in its Wilcox and Southern Oklahoma Hoxbar Oil Trend (SOHOT) plays. The E&P capital program has been scaled back 60% year-over-year with management expecting the number of wells participated in to reduce to 70 (gross) using two to four rigs from 186 (gross; 121 net) using an average of 12.2 rigs in 2014. Production is anticipated to grow 2%-4% with the liquids mix continuing to improve in 2015 benefiting from completion activity. DOWNCYCLE HEIGHTENS RIG OBSOLESCENCE RISK The company has been actively repositioning its drilling fleet through asset divestitures, retrofits/upgrades, and new-builds to better align with E&P demand for efficient, horizontal/directional drilling rigs in the 1,500hp range. Management seems to have recognized that the downcycle has heighten obsolescence risk for certain rigs and proactively removed 31 older, non-core rigs from service with most anticipated to be sold for parts. The new BOSS drilling rig is designed for efficient horizontal/directional drilling and has had favorable operating results, but the downcycle is likely to be a newbuild headwind. Unit has major components ordered for three additional BOSS rigs but plans to delay construction, as well as associated capital spending, until the market improves and contracts are secured. LEVERAGE LEVEL HELPS MODERATE CREDIT RISKS Management's current leverage levels, in conjunction with its sizing of the capital budget to be substantially in line with anticipated cash flows, provide sufficient financial flexibility to manage near-term credit risks. Fitch's base case, assuming a WTI price of $50, projects that Unit will be about $90 million free cash flow (FCF) negative in 2015 with the shortfall funded with credit facility borrowings. The Fitch base case results in debt/EBITDA under 2.1x in 2015. Debt/PD and debt per flowing barrel metrics are forecast to increase to approximately $6.45/boe, subject to any revisions, and $17,450, respectively. Fitch's base case WTI price forecast assumption of $60 in 2016 and $75 long-term suggests that the company may selectively increase drilling activity in 2016. The Fitch base case considers that the company will outspend operating cash flow generally consistent with historical levels in 2016 given supportive pricing signals resulting in a debt/EBITDA of 1.8x. Unit utilizes a combination of swap and collared hedges to manage cash flows and support development funding. As of Dec. 31, 2014, the company's 2015 oil and gas hedges accounted for less than 10% and 45%, respectively, of its 2014 production. ADEQUATE LIQUIDITY POSITION UNT has historically maintained a nominal cash balance and had approximately $1 million of cash-on-hand as of Dec. 31, 2014. The company's primary source of liquidity is its $500 million senior unsecured credit facility ($334 million available capacity at year-end 2014) due Sept. 2016. The capacity of the revolver may be increased or decreased subject to the company's borrowing base ($900 million as of Dec. 31, 2014). The borrowing base is re-determined semi-annually based on the present value of oil and gas reserves and midstream cash flows with the next redetermination date scheduled for April 1st. Fitch believes that the difference ($400 million; about 45%) in the current borrowing base and elected commitment under the credit facility helps mitigate near-term redetermination-related liquidity concerns. Financial covenants, as defined in the credit facility agreement, require Unit to maintain a current ratio above 1x and debt/EBITDA below 4x. Other covenants across UNT's debt instruments consist of dividend restrictions (less than 30% of the preceding year's consolidated net income), additional debt (springing covenant of EBITDA/interest above 2.25x, subject to an investment-grade rating of the notes by any one rating agency) and lien limitations, transaction restrictions, and change in control provisions. As of Dec. 31, 2014, Unit was in compliance with all of its covenants. LIMITED OTHER LIABILITIES Unit does not have a defined benefit pension plan. Asset retirement obligations (AROs) were $101 million, as of Dec. 31, 2014, which is lower than the $134 million reported at year-end 2013. This is mainly due to a favorable revision of cost estimates associated with plugging wells based on actual costs over the preceding year. The company does not have any material additional liabilities. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- WTI oil that trends up from $50/barrel in 2015 to $60/barrel in 2016 and a long-term price of $75/barrel; -- Henry Hub gas that trends up from $3.00/mcf in 2015 to $3.25/mcf in 2016 and a long-term price of $4.50/mcf; -- Production growth of about 3% in 2015 with increased, market price-driven activity providing mid-single digit growth in 2016 with a more robust growth profile thereafter; -- Liquids mix improves from 46% in 2014 to 47% in 2015 followed by incremental improvements thereafter; -- Drilling segment EBITDA is forecast to decline by over 50% in 2015 due to lower U.S. onshore activity with some BOSS rig newbuild offset; -- Midstream EBITDA shows more resiliency through downturn, but volumetric and commodity pricing exposure pressures margins; -- Capital spending is forecast to be $477 million in 2015, consistent with guidance, followed by an operating cash flow outspend generally consistent with historical levels given supportive pricing signals; -- No asset divestiture proceeds are forecast given the challenged onshore drilling conditions - the focus of Unit's 'non-core' assets. RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Increased size, scale, and diversification of Unit's E&P operations with some combination of the following metrics; -- Mid-cycle debt/EBITDA below 1.25x on a sustained basis; -- Mid-cycle debt/PD of $6.00-$6.50/boe and/or debt/flowing barrel below $15,000 on a sustained basis; -- Favorable oil & gas services outlook and heightened rig utilization and day rates signaling an improvement in asset quality and mix. Future positive rating actions are unlikely without a material increase to the company's reserve base and production profile, in conjunction with strong leverage metrics. Fitch does not anticipate E&P operations to grow sufficiently over the near term to help facilitate a positive rating action given the current weak pricing environment. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- Mid-cycle debt/EBITDA above 1.75x-2.0x on a sustained basis; -- Mid-cycle debt/PD of $7.00-$7.50/boe and/or debt/flowing barrel approaching $20,000 on a sustained basis; -- A persistently weak oil & gas pricing environment without a corresponding reduction to capex; -- Prolonged period of weak rig dayrates and/or depressed activity levels that suggest a unfavorable oil & gas services outlook and asset quality and mix; -- Acquisitions and/or shareholder-friendly actions inconsistent with the expected cash flow and leverage profile. Future negative rating actions remain a possibility and will be closely linked to the company's ability to retain financial flexibility through the downcycle. Fitch understands, however, that the company's midstream assets, if sold or dropped down into an MLP, could generate considerable liquidity. These types of asset sales due to their valuation resiliency and marketability have been executed by peers to improve financial flexibility. While a midstream asset sale is not contemplated in the rating, Fitch recognizes that embedded liquidity option value is present. Fitch has affirmed these ratings and assigned Recovery Ratings as: -- Long-term Issuer Default Rating at 'BB'; -- Bank revolver at 'BB/RR4'; -- Senior subordinated notes at 'BB-/RR5'. The Rating Outlook is Stable. UNIVERSAL HEALTH: Settles WARN Act Claims ----------------------------------------- Law360 reported that Universal Health Care Group Inc. asked a bankruptcy court to approve a proposed settlement, including a $7 million priority claim, for a class action brought by former employees of the troubled Florida-based health care company claiming violations of the Worker Adjustment and Retraining Notification Act. The settlement, was reached after a March 16 mediation, between the plaintiffs, the Chapter 11 trustee and BankUnited NA, according to the motion filed by the trustee, Soneet R. Kapila, the report related. About Universal Health Care Group Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. Soneet R. Kapila has been appointed the Chapter 11 Trustee in the Debtor's case. He is represented by Roberta A. Colton, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA. Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special conflicts counsel and E-Hounds, Inc., serves as a forensic imaging consultant to the Chapter 11 trustee. US CAPITAL: Duane Morris Dodges Sanctions ----------------------------------------- Law360 reported that a Florida bankruptcy judge relieved Duane Morris LLP from the possibility of sanctions for allegedly flubbing a filing in the bankruptcy of a Plantation shopping mall, but not without first reportedly delivering some harsh words about the firm's "self-satisfied smugness." According to Law360, citing a report in the Daily Business Review, U.S. Bankruptcy Judge John K. Olson dismissed orders to show cause why Duane Morris partner Kevin Vance and the firm should not be sanctioned, but only after he verbally lashed the firm in court. About US Capital Holdings US Capital/Fashion Mall is the owner of the former "Fashion Mall at Plantation", now vacant, located at 321 N. University Drive, in Plantation, Florida. US Capital Holdings is the 100% owner of US Capital/Fashion Mall. The mall -- http://www.321north.com/-- is presently dormant, in part, as a result of a redevelopment plan for the mall of a project called 321 North, which is intended to be a major, retail, office and residential project. The mall suffered extensive hurricane damage from Hurricane Wilma. US Capital Holdings, LLC, and an affiliate, US Capital/Fashion Mall, LLC, filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 12-14517 and 12-14519) in Forth Lauderdale, Florida, on Feb. 24, 2012. The Debtor listed assets of $11,496 and liabilities of $22,777,428. Judge John K. Olson presides over the case. On Oct. 14, 2014, US Capital/Fashion Mall, LLC, filed for Chapter 7 liquidation (Bankr. S.D. Fla. Case No. 14-32819). Judge John K. Olson presides over the case. The Debtor is represented by: Thomas M. Messana, Esq. Messana P.A. Las Olas City Centre, Suite 1400 401 East Las Olas Boulevard Fort Lauderdale, FL 33301 Tel: (954)712-7415 E-mail: tmessana@messana-law.com As reported by the the Troubled Company Reporter on Oct. 16, 2014, Brian Bandell, Senior Reporter at the South Florida Business Journal, said US Capital listed both its assets and debts between $10 million and $50 million each. Business Journal added that parent company Mapuche LLC also filed for Chapter 7 in the same month. Business Journal stated that Wei Chen -- the manager of Mapuche LLC, the entity that controls the Debtor -- signed the Chapter 7 liquidation petition on behalf of Mapuche, the Debtor and U.S. Capital/Fashion Mall. VENEZUELA: Gold Reserve Enters Default in ICSID Arbitration ----------------------------------------------------------- Gold Reserve Inc. on March 30 provided an update on developments in the proceedings instituted in the U.S. District Court for the District of Columbia to confirm the US $740 million arbitral award dated September 22, 2014, rendered against the Bolivarian Republic of Venezuela. On March 27, 2015, the Court entered a default against Venezuela following its failure to file an appearance within the prescribed deadlines in the proceedings instituted by the Company. Legal History Leading up to the Default On November 26, 2014, the Company filed in the District Court for the District of Columbia a petition to confirm the Award that had been rendered by a tribunal constituted under the Additional Facility Rules of the International Center for the Settlement of Investment Disputes ("ICSID") of the World Bank. Once the Award is confirmed, it will be enforceable in the United States as a judgment of the court. The initial step for the proceeding was to serve Venezuela with the petition and other related documents. Once served, Venezuela had 60 days to respond with any arguments it believes it has against the petition to confirm. Since the inception of these proceedings, Venezuela has been willfully avoiding service, refusing, among other things, to authorize its U.S. counsel to accept service. As a result of that refusal to accept service, on December 31, 2014, the Company initiated service in accordance with the statutory provision of the United States Code, and the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Receipt of the documents on January 8, 2015, was acknowledged by letter from the Venezuelan Foreign Ministry dated January 26, 2015, but only received by the Company's process server on March 2, 2015. In this letter, however, Venezuela contested the validity of the service, raising non-meritorious and irrelevant objections to service. Therefore, the Company believes Venezuela was properly served on January 8, 2015. As a result, and at the expiry of the 60-day period following the service of the documents, the Company, on March 26, 2015, requested the Clerk of the District Court for the District of Columbia to enter default against Venezuela, on the basis that, as the letter from the Venezuelan Foreign Ministry clearly showed, the documents had been duly received by the proper recipient of the service process. The Clerk agreed with the position of the Company and entered default on March 27, 2015. The consequence of the default being entered against Venezuela in respect of appearance is that a default judgment may now be entered against Venezuela upon motion by the Company. After close of business on March 27, 2015, the same day that the default was entered, U.S. counsel appointed by Venezuela (the same counsel in the ICSID arbitration) entered an appearance for the purpose of opposing the entry of default and requesting that it be set aside. The Company has responded to Venezuela's opposition on March 30, 2015, and the matter will be decided by a judge in the near future. The Company remains firmly committed to the enforcement and collection of the Award, including interest and costs, in full, and will continue to vigorously pursue all available remedies. The Award, now amounting to approximately US $750 million, continues to accrue interest at the rate of Libor plus 2% per annum. Gold Reserve's President, Doug Belanger, stated, "This is another example of Venezuela being dilatory in its actions regarding the payment of the Award. The Company will continue to pursue the collection of our Award in a systematic and methodical way until Venezuela realizes that its needs to stop avoiding its international obligations and pay the Award, sooner rather than later. The Company continues to have communications with designated representatives from the Venezuelan government." WINDSTREAM SERVICES: Fitch Affirms 'BB' IDR; Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) of Windstream Services, LLC (Windstream) -- formerly known as Windstream Corporation -- and its subsidiaries at 'BB'. Windstream is a wholly-owned subsidiary of Windstream Holdings, Inc. (NASDAQ: WIN). The Rating Outlook is Stable. KEY RATING DRIVERS Revenue Mix Changes: Windstream derives more than 70% of revenue from business services (including carrier services) and consumer broadband services. These revenues have growing/stable prospects. At the same time, pressure remains on legacy voice and regulatory-derived revenues (switched access and universal service funding). As the legacy revenues dwindle in the mix, there will be less pressure on revenues going forward. The company has positioned its business service offerings to target mid-sized businesses. For a pure wireline operator, Windstream's revenues are somewhat more diversified than other wireline operators as acquisitions have brought additional business and data services revenue. Near-Term Pressures: Windstream experienced a nominal 0.2% decline in business service revenue in 2014. Fitch has expected business service revenue growth to offset pressures elsewhere, but business voice service revenues continue to decline. There is pressure in the fiber to the tower (FTTT) business that will subside and this arises from the migration to fiber circuits from copper circuits. Fiber provides greater capacity to customers at a lower cost than copper but wireless customers' capacity needs should grow longer term generating revenue growth. This pressure should dwindle in 2015, and there will be modest competitive pressure owing to the five to seven year nature of contracts. REIT Formation: Upon the formation and spin-off of Communications Sales & Leasing, Inc. (CS&L) into a newly formed REIT, Windstream is expected to initially reduce debt by approximately $3.4 billion. In return, Windstream will lease from CS&L the spun-off fiber and copper assets for an initial payment of $650 million annually. Windstream will also reduce its dividend by 90%, with CS&L, in turn, focusing on high dividend distributions as required by the REIT tax election. Leverage: Windstream's gross leverage for 2014, excluding non-cash actuarial losses on its pension plans and other nonrecurring charges (merger and integration charges), was 4.05x. Due to the reduction in debt following the REIT spin-off, Fitch expects Windstream's gross debt leverage to be in the mid 3x range in 2015, treating the lease as an operating lease. Total adjusted debt to Operating EBITDAR is projected to approximate 4.9x, with the lease being in place for part of the year, and 5.4x in 2016. This adjusted leverage metric is above the median for other 'BB' companies, and other telecom companies in the broader 'BB' range. Offsetting factors to the higher lease adjusted leverage include the reduction of outstanding senior secured and unsecured debt, and the cash flow benefits arising from the reduction in interest expense and common dividend. Windstream also has a moderately less competitive footprint than its peers. Free Cash Flow (FCF): FCF improved in 2014 on slightly lower capital spending and as Windstream benefited from lower cash interest expense. Fitch estimates 2015 post-dividend FCF will be negative, in a range from $(200) million to $(250) million, as the reduced dividend level is only in place for half the year, and due to fees associated with the early extinguishment of debt and formation of the REIT. In 2016, FCF is expected to be in the $75 million to $100 million range. Liquidity: At Dec. 31, 2014, $625 million (prior to letters of credit) was available on a $1.25 billion revolving credit facility. Year-end cash totaled $28 million. Principal financial covenants in Windstream's secured credit facilities require a minimum interest coverage ratio of 2.75x and a maximum leverage ratio of 4.5x. The dividend is limited to the sum of excess FCF and net cash equity issuance proceeds subject to pro forma leverage of 4.5x or less. No Material Near-Term Maturities: There are no senior unsecured notes maturing in 2015, with debt maturities consisting of bank debt amortization as well as the maturity of the revolver in December 2015. In 2016, the term loan A3 matures. Currently, there is $344 million currently outstanding on the A3 tranche of the term loan and it will be repaid prior to maturity through the transactions related to the REIT spin-off. Fitch expects Windstream will extend its revolver prior to the December 2015 maturity concurrent with the REIT transaction. KEY ASSUMPTIONS -- Fitch assumes the CS&L spin-off takes place in April 2015, and planned debt reductions take place. -- For 2015, Fitch assumes Windstream's revenues will register a slight decline, in the 1% to 2% range. Thereafter, Fitch expects revenues to return to modest growth in 2017. -- The operating EBITDAR margin is expected to range between 36% and 37% over the next few years. -- Capital spending in 2015 ranges from $825 million to $875 million, compared with $786 million in 2014. Cash taxes are expected to be approximately $20 million. RATING SENSITIVITIES Positive Action: A positive action could occur if: -- Revenues and EBITDA stabilize or demonstrate a return to growth on a sustained basis; -- Total adjusted debt/EBITDAR, which will be used as the primary metric, is sustainable under 4.75x. Negative Action: A negative rating action could occur if: -- Competitive and business conditions are such that the company no longer makes progress toward revenue and EBITDA stability; -- Total adjusted debt/EBITDAR is 5.5x or higher on a sustained. Fitch has taken these actions, including assigning recovery ratings as follows. The Rating Outlook for all ratings should remain Stable. Windstream Services, LLC -- Long-term Issuer Default Rating (IDR) at 'BB'; -- $1.25 billion senior secured revolving credit facility due 2015 at 'BBB-/RR1'; -- $344 million senior secured credit facility, Tranche A3 due 2016 at 'BBB-/RR1'; -- $255 million senior secured credit facility, Tranche A4 due 2017 at 'BBB-/RR1'; -- $584 million senior secured credit facility, Tranche B5 due 2019 at 'BBB-/RR1'; -- $1.318 billion senior secured credit facility, Tranche B4 due 2020 at 'BBB-/RR1'; and -- Senior unsecured notes at 'BB/RR4'. Windstream Holdings of the Midwest -- IDR at 'BB'; -- $100 million secured notes due 2028 at 'BB/RR4'. PAETEC Holding Corp. (PAETEC) -- IDR at 'BB'; -- $450 million senior unsecured notes due 2018 at 'BB/RR4'. YELLOWSTONE MOUNTAIN: Founder on Hook for $56-Mil. in Back Taxes ---------------------------------------------------------------- Law360 reported that the co-founder of bankrupt private resort Yellowstone Mountain Club LLC must pay more than $56 million in back taxes on hundreds of millions of dollars that he allegedly siphoned from the ski club for personal use, Montana tax officials said. According to the report, the Montana Department of Revenue hit Timothy L. Blixseth with back taxes after finding that he failed to report various pieces of pass-through income from his businesses and investments, and misappropriated more than $270 million from Yellowstone, a luxury development. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10, 2008. The Company's owner affiliate, Edra D. Blixseth, filed a separate Chapter 11 petition on March 27, 2009 (Case No. 09-60452). Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented Yellowstone. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners LLC acquired equity ownership in the reorganized Club for $115 million. Marc S. Kirschner, Esq., was appointed the Trustee of the Yellowstone Club Liquidating Trust created under the Plan. [*] Fitch: E&P Firms in Focus as US High Energy Default Rate Rises ------------------------------------------------------------------ The trailing 12-month (TTM) U.S. high yield default rates for the exploration and production (E&P) and energy sectors will both increase in March as oil-related bankruptcy filings take their toll, according to Fitch Ratings. At end-February 2015, the TTM default rate for both sectors stood at 0.5%. However, bankruptcy filings for Dune Energy and Quicksilver Resources, along with American Eagle Energy's missed payment will push the E&P default rate back toward its historic average of 1.9%. As a result, the broader energy sector default rate will also increase to 1%. Fitch expects the energy sector default rate to remain above its historic average, as the shale revolution has allowed the entry of many new highly levered names over the last couple of years, prior to recent oil price plunge. 'The economics of shale are changing,' says Eric Rosenthal, Senior Director of Leveraged Finance. 'Without a clear trajectory for oil supplies and prices amid varying company liquidity profiles, the energy default rate through the end of this year remains uncertain. However, it is more likely that we will see a more broad-based acceleration of the energy default rate in 2016-2017.' A study of 74 high yield energy companies in Fitch's portfolio shows that the sector's financials weakened. Fourth quarter 2014 (4Q'14) leverage increased to 3.7x from 3.4x in the third quarter while interest coverage shrunk to 5.1x from 5.4x. Fitch expects further weakening for much of the year, at least until the anniversary of the oil price decline. At the same time, Fitch believes energy companies will take steps to preserve liquidity and attempt to minimize cash drain. In the fourth quarter, energy companies reduced capital expenditure by 9% sequentially and 3% year-over-year while cash balances fell 29% from 3Q'14 and 23% from 4Q'13. Across all sectors, the TTM high yield default rate remained at 3.4% at end-February, unchanged from the month prior. Removing Energy Future Holdings and Caesars Entertainment Operating Co., the default rate drops to 1.3%. ********* 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 ***