/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150424.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 24, 2015, Vol. 19, No. 114 Headlines 21ST CENTURY ONCOLOGY: Unit is Offering $400 Million Sr. Notes 248 AVENUE X: Case Summary & 2 Largest Unsecured Creditors ACOSTA INC: S&P Assigns 'B' Rating on $2.06BB Term Loan B-1 ADVANCED MICRO: Fitch Affirms 'B-' IDR & Alters Outlook to Negative ADVANCED MICRO: Moody's Lowers CFR to 'B3' & Alters Outlook to Neg AGRITEK HOLDINGS: D. Brooks & Associates Has Going Concern Doubt AGUA CALIENTE: Fitch Corrects April 17 Ratings Release ALLIED NEVADA: Creditors' Panel Hires Zolfo Cooper as Consultant AMERICAN INT'L GROUP: Judge Questions 2008 Bailout's Tough Terms ANDALAY SOLAR: Annual Meeting Set for June 9 APOGEE WESTERN: Case Summary & 4 Largest Unsecured Creditors ART AND ARCHITECTURE: Court Okays Deal on Rule 2004 Examination ASPEN RIDGE SCHOOL: S&P Rates $11.01MM 2015A/B Revenue Bonds 'BB+' ATLANTIC CITY, NJ: State Appoints Mediator ATOSSA GENETICS: BDO USA Expresses Going Concern Doubt AVAYA INC: Moody's Assigns B1 Rating on Proposed Term Loan BE ACTIVE HOLDINGS: Has $12.6 Million Net Loss in 2014 BIOPHARMX CORP: Burr Pilger Mayer Expresses Going Concern Doubt BRASA HOLDINGS: S&P Puts 'B' Rating on CreditWatch Positive CATASYS INC: Obtains $2 Million From Securities Sale CCO HOLDINGS: Fitch Assigns 'BB-' Rating to $800MM Notes Due 2027 CHART INDUSTRIES: Moody's Withdraws All Ratings CHROMAFLO ACQUISITION: S&P Lowers CCR to 'B-'; Outlook Stable CINEMARK USA: S&P Retains 'BB+' Sr. Secured Debt Rating COATES INT'L: Cowan Gunteski Expresses Going Concern Doubt CONCENTRA INC: S&P Assigns 'B+' CCR; Outlook Negative CONNEAUT LAKE: Fails to Resolve Dispute on Insurance Settlement CONNEAUT LAKE: Needs $300,000 to Reopen Park on May 22 EDMENTUM INC: Moody's Affirms Caa1 Corp. Family Rating EDWIN RITTER JONAS: 9th Cir. Affirms Chapter 11 Case Dismissal EMMIS COMMUNICATION: S&P Affirms 'B' Corp. Credit Rating EMMIS OPERATING: Moody's Lowers Corporate Family Rating to B3 ENGLOBAL CORP: Board Approves Stock Repurchase Program ERESEARCH TECHNOLOGY: Moody's Affirms B2 Corporate Family Rating ERESEARCH TECHNOLOGY: S&P Affirms 'B' CCR, Outlook Stable ERF WIRELESS: Still Working to Complete Form 10-K ESSAR STEEL: S&P Lowers CCR to 'CCC+' on Weaker Liquidity EVERYWARE GLOBAL: Plan & Disclosure Statement Hearing on May 20 EVERYWARE GLOBAL: Reports $120-Mil. Net Loss in 2014 FAIRFAX FINANCIAL: Moody's Rates C$200MM M Shares 'Ba2(hyb)' FCC HOLDINGS: S&P Lowers ICR to 'CCC' on Announced Asset Sale FRESH PRODUCE: Court Issues Joint Administration Order FRESH PRODUCE: Seeks to Conduct Going-Out-of-Business Sales GENCORP INC: Moody's Affirms 'B1' Corp. Family Rating, Outlook Neg. GILLA INC: Auditor Expresses Going Concern Doubt GRIDWAY ENERGY: Plan Filing Date Extended to July 6 HALCON RESOURCES: Moody's Lowers Corp. Family Rating to Caa2 HALCON RESOURCES: Plans to Offer $500 Million Senior Notes HALCON RESOURCES: Preliminary Q1 2015 Production Results HALCON RESOURCES: S&P Assigns 'CCC' Rating on $500MM Sr. Notes HIPCRICKET INC: Ch. 11 Plan Goes to May 13 Confirmation Hearing IMRIS INC: Receives Nasdaq Bid Price Deficiency Notice INT'L MANUFACTURING: Withdraws Motion for Relief From Stay IT LLC: Case Summary & 20 Largest Unsecured Creditors J.C. PENNEY: S&P Revises Outlook to Pos. & Affirms 'CCC+' CCR JILL ACQUISITION: Moody's Assigns 'B2' CFR, Outlook Stable JILL HOLDINGS: S&P Affirms 'B' Corp. Credit Rating, Outlook Stable KARMALOOP INC: US Trustee to Continue Creditors Meeting on May 21 KNEL ACQUISITION: S&P Retains 'B' CCR Over $10MM Debt Add-On KU6 MEDIA: Corrects Outstanding Common Shares Figures LEGACY RESERVES: Moody's Alters Outlook to Stable & Affirms B2 CFR LEHMAN BROTHERS: Lawyers Says Ex-Top Trader Seeks "Double Recovery" LENNAR CORP: Fitch Assigns BB+ Rating on $400MM Sr. Notes Due 2025 LENNAR CORP: Moody's Rates New $400MM Sr. Unsecured Notes 'Ba3' LENNAR CORP: S&P Assigns 'BB' Rating on $400MM Sr. Unsecured Notes LEVI STRAUSS: Fitch Gives 'BB-' Rating to $475MM Unsecured Notes LOUISIANA STATE UNIVERSITY: Drafting "Academic Bankruptcy" Plan MCJUNKIN RED: S&P Lowers CCR to 'B+' on Higher Debt Leverage MIDWEST PROPERTIES: Case Summary & 9 Top Unsecured Creditors MINT LEASING: Jerry Parish Reports 48.3% Stake MT GOX: Kraken Accepts Creditor Claims Through Website MYMETICS CORP: Auditor Expresses Going Concern Doubt NATROL INC: Wants Plan Filing Exclusivity Until June 8 NEPHROS INC: Appoints President, CEO and Chairman NNN 3500: US Bank Asks Court to Allow Claim O&S TRUCKING: 8th Cir. BAP Tosses Appeal Over Daimler Claim OPTIM ENERGY: Disclosure Statement Hearing Adjourned to May 13 OPTIMUMBANK HOLDINGS: Gets Non-Compliance Notice From NASDAQ Anew PILOT TRAVEL: S&P Raises CCR to 'BB+' on Improving Performance PLASTIC2OIL INC: Amends 2014 Form 10-K POSTMEDIA NETWORK: Moody's Rates C$140MM First Lien Notes ''Ba3' POW! ENTERTAINMENT: Incurs $94.7K Net Loss for in 2014 PRINCE MINERAL: S&P Lowers CCR to 'B-', Outlook Stable PRISO ACQUISITION: Moody's Assigns B2 Corp. Family Rating PROJECT PORSCHE: S&P Lowers CCR to 'CC' on Recapitalization Plan PROLOGIS INC: Fitch Affirms 'BB+' Rating on $78.2MM Preferred Stock PRONERVE HOLDINGS: Creditors' Panel Hires Blank Rome as Counsel PRONERVE HOLDINGS: Creditors' Panel Hires Carl Marks as Advisors PRONERVE HOLDINGS: Panel Blocks Sale of Assets to SpecialtyCare PUTNAM ENERGY: Hires Heller Draper as Chapter 11 Counsel PUTNAM ENERGY: Names David Cohen as Local Counsel QUICKSILVER RESOURCES: S&P Withdraws 'D' CCR at Issuer's Request RITE AID: Amends By-Laws to Implement "Proxy Access" SABINE OIL: Elects to Exercise Right to 30-Day Grace Period SABINE OIL: S&P Lowers CCR to 'D' on Missed Interest Payment SCHOOL OF EXCELLENCE: S&P Lowers 2004A Bonds Rating to 'BB' SEALED AIR: Intellibot Robotics Deal No Impact on Moody's Ba3 CFR SEANERGY MARITIME: E&Y Expresses Going Concern Doubt SERVICE CORP: Moody's Hikes CFR to Ba2 & Sr. Unsec Ratings to Ba3 SEVEN GENERATIONS: S&P Rates Proposed $400MM Unsec. Notes CCC+' SPIRIT AEROSYSTEMS: S&P Raises Unsecured Debt Rating to 'BB' SUMMIT MATERIALS: LaFarge Acquisition No Impact on Moody's B3 CFR TLC HEALTH: Court Approves Steiger Realty as Real Estate Agent TRITON FOODS: Case Summary & 20 Largest Unsecured Creditors TRUMP ENTERTAINMENT: Exclusive Plan Filing Date Extended to Aug. 5 TRUMP ENTERTAINMENT: Gets Approval to Settle Thermal Energy Claims TTM TECHNOLOGIES: S&P Retains 'BB' CCR on CreditWatch Negative VENOCO INC: S&P Raises CCR to 'CCC+'; Outlook Negative VIRGIN ISLANDS: Fitch Affirms 'BB-' Rating on $103MM Revenue Bonds WARREN RESOURCES: S&P Lowers CCR to 'CCC+'; Outlook Negative WASH MULTIFAMILY: Moody's Assigns 'B3' CFR, Outlook Stable WASH MULTIFAMILY: S&P Assigns 'B' CCR, Outlook Stable WELBY TOD: Voluntary Chapter 11 Case Summary WET SEAL: Wants Deadline to Remove Suits Extended to July 14 WORLD SURVEILLANCE: Two Directors Quit XINERGY LTD: Court Issues Joint Administration Order XINERGY LTD: Has Interim OK to Borrow $7.5-Mil. in DIP Loan XINERY LTD: Has Until June 19 to File Schedules XRPRO SCIENCES: Registers 2.1 Million Common Shares for Resale [*] Fitch Affirms & Assigns Recovery Ratings to 7 US Telecom Cos. [*] State Courts Grow in Popularity as Forums for Liquidations [*] US Student Loan Prepayment May Mean FFELP Defaults, Fitch Says [^] BOOK REVIEW: The First Junk Bond ********* 21ST CENTURY ONCOLOGY: Unit is Offering $400 Million Sr. Notes -------------------------------------------------------------- 21st Century Oncology, Inc., a wholly owned subsidiary of 21st Century Oncology Holdings, Inc., launched an offering of $400 million aggregate principal amount of senior notes due 2023, according to a document filed with the Securities and Exchange Commission. In connection with the Offering, the Company provided potential investors with certain information about the Company. While complete financial information and operating data is not yet available, based on the information currently available, the Company's management preliminarily estimates that for the three months ended March 31, 2015, its total revenues will be between $265 million and $278 million, compared to revenue for the three months ended March 31, 2014 of $233.4 million. Recent Strategic Developments On Jan. 2, 2015, the Company entered into a joint venture with NWCC, pursuant to which we acquired an 80% interest in a radiation oncology practice in the Tri-Cities Market of Washington State. On Jan. 6, 2015, the Company acquired via one of its joint ventures Maddock, which is a single radiation oncology center located in Warwick, Rhode Island. This tuck-in acquisition expands the Company's footprint in this market providing another radiation oncology location near the Company's joint venture partner hospital and other locations. New Credit Facilities In connection with the Offering, the Company intends to enter into a new five-year revolving credit facility providing for up to $125 million of revolving extensions of credit outstanding at any time and a new seven-year first lien term loan facility with proceeds of $570 million. The Company expects that the New Credit Facilities will contain affirmative and negative covenants customary for this type of financing. The completion of the Offering is conditioned upon the Company's entering into the New Credit Facilities on the terms, and the Company's entry into the New Revolving Credit Facility is conditioned upon receiving proceeds from the New Term Loan and certain other financings of at least $570 million or otherwise refinancing the Company's existing term loan facility, the OnCure Notes and the Company's senior secured second lien notes in full. There are no assurances that the closing of the New Credit Facilities will occur on these terms or at all. Offer to Purchase and Consent Solicitation Substantially concurrently with the Offering, OnCure, a subsidiary of 21st Century Oncology, Inc., is offering to purchase and seeking consents from the holders of its $82.5 million aggregate principal amount outstanding 113/4% Senior Secured Notes due 2017 to acquire all of the outstanding OnCure Notes and eliminate substantially all restrictive covenants and certain events of default applicable to the OnCure Notes contained in the indenture relating to such notes and to amend the escrow agreement related to the OnCure Notes. The closing of the OnCure Tender Offer and Consent is conditioned upon our consummation of financing transactions that yield proceeds to the Company of at least $660 million, and the closing of the Offering is conditioned upon OnCure obtaining the requisite consents in connection with the OnCure Tender Offer and Consent. Repayment of Existing Term Loan and Redemption of Existing Notes The Company intends to use the proceeds of the Offering, borrowings under the Company's New Credit Facilities and cash on hand, in part, to repay the Company's $90 million term loan facility and to redeem our $380.1 million aggregate principal amount of 97/8% Senior Subordinated Notes due 2017 and the Company's $350 million aggregate principal amount of 87/8% Senior Secured Second Lien Notes due 2017. SFRO Contribution Substantially concurrently with the Offering, the Company plans to contribute all of its equity interests in South Florida Radiation Oncology, Inc. to 21st Century Oncology, Inc. and it is expected that our SFRO holding company will become a guarantor of the notes and the New Credit Facilities. In addition, the Company is currently in negotiations with SFRO's minority equityholders to purchase the remaining 35% interest in SFRO that the Company does not currently own with a target effective date in the second quarter or third quarter of 2015. About 21st Century 21st Century Oncology, Inc., formerly known as Radiation Therapy Services, Inc. ("RTS") owns and operates radiation treatment facilities in the US and Latin America. The Company's balance sheet at June 30, 2014, showed $1.11 billion in total assets, $1.38 billion in total liabilities, $46.65 million in noncontrolling interests-redeemable, and a $325.04 million total deficit. * * * As reported by the TCR on Feb. 27, 2015, Moody's Investors Service upgraded 21st Century Oncology, Inc.'s Corporate Family Rating and Probability of Default Rating to B3 and B3-PD, respectively. The upgrade of the Corporate Family Rating to B3 and SGL to SGL-2 reflects the receipt of a $325 million preferred equity investment from the Canada Pension Plan Investment Board and subsequent debt reduction. In the April 16, 2015, edition of the TCR, Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Fort Myers-based cancer care provider 21st Century Oncology Holdings Inc. 248 AVENUE X: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 248 Avenue X LLC 248 Avenue X Brooklyn, NY 11223 Case No.: 15-41797 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Ronald A Lenowitz, Esq. 7600 Jericho Turnpike, Suite 300 Woodbury, NY 11797 Tel: (516) 364-3080 Fax: (516) 364-3082 Email: rlenolaw@yahoo.com Total Assets: $400,000 Total Liabilities: $1.25 million The petition was signed by Aksana Strashnow, principal member. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/nyeb15-41797.pdf ACOSTA INC: S&P Assigns 'B' Rating on $2.06BB Term Loan B-1 ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '3' recovery rating on Jacksonville, Fla.-based Acosta Inc.'s new $2.06 billion term loan B-1. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%, on the low end of this range) in the event of payment default. The new term loan B-1 will replace the company's existing term loan B at a lower interest rate. The company also plans to reduce pricing on its revolver. Other than the proposed reduced pricing and a 12 month soft call extension, the terms of the new loan are substantially the same as the existing loan. The ratings are subject to change and assume the transaction is closed on substantially the terms presented to S&P. All of S&P's other ratings on the company, including the 'B' corporate credit rating, remain unchanged. S&P will withdraw its ratings on the existing term loan B once the facility is terminated. Pro forma for the proposed transaction, total debt outstanding is about $2.9 billion. S&P's ratings reflect Acosta's significant debt burden and financial sponsor ownership. S&P expects credit metrics will remain very weak and the company's financial policy will remain aggressive. Given Acosta's financial sponsor-ownership, S&P believes additional debt issuance for acquisitions or dividends will offset any significant credit metric improvement from sales and profit growth. S&P assumes leverage will remain above 7.0x for the next 12 to 24 months. "Our ratings also reflect Acosta's good market position in the sales and marketing services industry and its national scale. We expect Acosta to continue benefitting from consumer product companies outsourcing sales and marketing functions. While we believe industry growth is slowing, we view Acosta's and other industry participants' services as more cost-effective than retaining sales and marketing functions entirely in-house. These factors should continue to support moderate sales and profit growth. Acosta and Advantage Sales & Marketing (ASM) are the industry's two largest players with more than 20% share each. After CROSSMARK, the third largest player, the remainder of the industry is highly fragmented. We believe Acosta and ASM will be able to grow their share, as they have a competitive advantage over smaller competitors because many large retail and consumer product companies require a national sales force to service their accounts," S&P said. RATINGS LIST Acosta Inc. Corporate credit rating B/Stable/-- Ratings Assigned Acosta Inc. Senior secured $2.06 bil. term loan B-1 B Recovery rating 3L ADVANCED MICRO: Fitch Affirms 'B-' IDR & Alters Outlook to Negative ------------------------------------------------------------------- Fitch Ratings has affirmed the ratings for Advanced Micro Devices Inc. (NYSE: AMD), including the long-term Issuer Default Rating (IDR), at 'B-'. Fitch also revised the Rating Outlook to Negative from Stable. Fitch's actions affect $2.6 billion of total debt, including the asset backed credit facility (ABL). A full list of ratings follows at the end of this commentary. The ratings and Outlook reflect Fitch's expectations for a weaker than previously anticipated operating performance through at least the near term, which could result in incremental borrowing to support negative free cash flow (FCF). Persistently weak personal computer (PC) demand, excess channel inventory and foreign currency headwinds will drive substantial weakness in at least the first half of 2015. For the full year, Fitch forecasts negative 15%-20% revenue growth, despite expectations for solid Windows 10 adoption, strong seasonal gaming console demand, and rebalanced channel inventory in the back half of 2015. Fitch expects operating EBITDA margin will strengthen but remain in the mid-single digits, driven by sales mix, lower revenues and essentially fixed research and development (R&D) spending. Fitch believes profit margin contraction may be exacerbated in 2015 by aggressive pricing for discrete graphics processors to clear excess inventory. Cash usage continues and Fitch estimates negative FCF could exceed $200 million in 2015, driven by lower revenue and profitability. Given AMD reported negative $195 million of FCF in the quarter ended March 27, 2015, Fitch's estimate incorporates the company ramping up sales in the second half of the year and ending 2015 with flat inventory levels. RATINGS SENSITIVITIES Negative rating actions could result from Fitch's expectations for: -- Sustained negative revenue growth in the Enterprise, Embedded and Semi-Custom segment (EE&CS), indicating a diminished technology portfolio and undermining AMD's transformation away from legacy PC businesses; or -- Sustained FCF usage, resulting in cash balances declining toward the $600 million minimum level. Fitch believes this could be due to greater than expected average selling price (ASP) erosion for graphics APUs or stalled traction in semi- custom servers and non-legacy PC businesses. Incremental positive rating actions could result from enhanced revenue visibility and expectations for consistent FCF through the cycle, both the result of AMD's successful business transformation. Fitch believes an upgrade would be predicated on Fitch's expectations for total leverage to remain near or below 4.5x from structurally stronger operating EBITDA. Fitch expects continued revenue declines for the Computing and Graphics segment (C&G) through the intermediate term. In the near term, AMD may partially offset weak PC demand with share gains in discrete graphics processing units (GPUs). Of more concern is the potential for further revenue declines in EE&SC, which includes businesses critical to AMD's transformation away from legacy PC markets. The company should benefit from next-generation APU and GPU products shipping in the current quarter and semi-customer server ramps in the second half of 2016. Lower profitability and higher debt levels from ABL borrowings would weaken credit protection measures. Fitch expects total leverage (total debt-to-operating EBITDA) will spike to the mid-teens in 2015 and fall to the high single digits through the forecast period. Interest coverage (operating EBITDA-to-interest expense) should remain near 1x for 2015. Fitch estimates total leverage and interest coverage of 12x and 1.1x, respectively, for the latest 12 months (LTM) ended March 27, 2015. KEY RATING DRIVERS: Ratings are supported by AMD's: -- Solid intellectual property (IP) for APUs and GPUs, which underpin AMD's business transformation; -- Role as a credible alternative chip supplier for PCs, a large albeit shrinking market, particularly for consumer PCs; -- Fabless manufacturing model, relieving the need for significant investments in leading-edge manufacturing capabilities, and strengthening FCF. Ratings concerns include AMD's: -- Lack of revenue visibility, which should improve if the company's business transformation is successful; -- Challenges for foundry partners to keep pace with Intel's leading-edge manufacturing capabilities, potentially resulting in structural cost and performance disadvantages for future products; -- Volatile profitability and FCF, due to mostly short technology and product cycles and Intel-driven pricing pressures; -- Significantly less financial flexibility than that of key competitors, including Intel, NVIDIA and Qualcomm. Fitch believes liquidity was sufficient as of March 27, 2015, and consisted of: -- $677 million of cash and cash equivalents, around 90% of which was located in the U.S.; -- $229 million of marketable securities; -- A $500 million senior secured revolving credit facility (RCF) due 2019, of which $312 million was available at March 27, 2015. AMD's amended and restated credit agreement, which extends the facility's expiration to 2019 from 2018, reduces pricing and eliminates a minimum domestic cash covenant. Total debt was $2.2 billion at March 27, 2015 and consisted primarily of: -- $188 million outstanding on a $500 million senior secured RCF due 2019; -- $42 million of 6% senior unsecured convertible notes due 2015; -- $600 million of 6.75% senior notes due 2019; -- $450 million of 7.75% senior unsecured notes due 2020; -- $475 million of 7.5% senior unsecured notes due 2022; -- $500 million of 7% senior notes due 2024; -- $10 million of capital leases. AMD's Recovery Ratings (RRs) reflect Fitch's belief that the company would be reorganized rather than liquidated in a bankruptcy scenario. To arrive at a reorganization value, Fitch assumes a 5x reorganization multiple and applies it to its estimate for post-restructuring operating EBITDA of $300 million. This reflects Fitch's belief that AMD would shed exposure to legacy PC markets within the context of reorganization and focus on higher-growth client APUs, semi-custom servers, high-end graphics and gaming-related royalties. This results in an adjusted reorganization value of $1.5 billion after subtracting administrative claims, which exceeds a projected liquidation value of $784 million. Fitch estimates AMD's post-reorganization ABL would be fully drawn at reorganization, given still sizeable receivables, inventory and PP&E. The $500 million senior secured ABL would then recover 100%, resulting in an 'RR1' rating. Fitch estimates the approximately $2.1 billion of unsecured claims recover approximately 41%, resulting in an RR of 'RR4'. KEY ASSUMPTIONS: -- Negative 15%-20% revenue growth, driven by weak personal computer (PC) demand, excess channel inventory and foreign currency headwinds in at least the first half of 2015. -- Solid Windows 10 adoption, strong seasonal gaming console demand, and rebalanced channel inventory drive higher revenue growth in the second half of 2015. -- Operating EBITDA margin will remain in the mid-single digits, driven by sales mix, lower revenues and fixed R&D. -- Negative FCF of roughly $200 million in 2015, driven by lower revenue and profitability, which assumes the company clear excess inventory in the current year. -- Credit protection measures remain weak through the forecast period, driven by lower profitability and higher debt levels. Fitch has affirmed AMD's ratings as follows: -- Long-term IDR at 'B-'; -- Senior secured RCF at 'BB-/RR1'; -- Senior unsecured debt at 'B-/RR4'. ADVANCED MICRO: Moody's Lowers CFR to 'B3' & Alters Outlook to Neg ------------------------------------------------------------------ Moody's Investors Service lowered Advanced Micro Devices, Inc's corporate family rating to B3 from B2, and the ratings on the senior unsecured notes to Caa1 from B2. The speculative grade liquidity rating was affirmed at SGL-2. The outlook was changed to negative from stable. The downgrade of the corporate family rating to B3 reflects AMD's prospects for operating losses over the next year and negative free cash flow, in contrast to our previous expectations of modest profitability and positive free cash flow. Moody's performance outlook for AMD is driven by ongoing revenue declines and operating losses in its PC-related business (microprocessors and graphics chips) that will more than offset the expected profitability (albeit lower than last year) in the company's embedded and semi-custom chip business, which makes up roughly half of revenue. "Weak demand conditions in the personal computer space, particularly in the desktop and lower end segments, will persist over the next few quarters", said Moody's Richard Lane. Combined with efforts to reduce channel inventory ahead of Microsoft's launch of the Windows 10 operating system this summer, Moody's expects "AMD will continue to lose money in this shrinking part of the business", said Lane. The B3 corporate family rating reflect AMD's weaker operating performance prospects, high financial leverage, prospects for operating losses and an expectation for negative cash flow generation over the next year. Revenue declines (Moody's estimate 25% to 30%) and operating losses in the company's core microprocessor business as well as market share losses in its graphics business will result in segment operating losses throughout 2015, and in Moody's view, significantly diminished prospects for profitability going forward given its declining scale and share loss. Moody's expects AMD's embedded and semi-custom chip business will remain profitable, but insufficiently to offset losses in the rest of its business. While AMD has reported design wins, including two large (unnamed) wins in late 2014 that could have combined revenue in excess of $1 billion, the company recently noted that revenue is not likely to build until the second half of 2016. As a result of projected operating losses, credit metrics will be very weak, with adjusted debt to EBITDA over 10x over the during 2015, up from 6.1 times at December 2014. AMD reported $906 million of cash and marketable securities as of March 2015 (the vast majority of which is domestic), down from $1.04 billion at December 2014. The company is now targeting to maintain cash and marketable securities of between $600 million and $1 billion, down from previous targets of around $1 billion. AMD maintains a $500 million asset based revolving credit facility (ABL) under which $188 million was drawn as of March 2015. With cash balances, access to the ABL, and no material debt maturities until May 2019, near term liquidity is currently good. However, Moody's expect AMD will consume $100 million to $200 million of cash over the next year. As a result, Moody's expects AMD's 2015 year- end cash balances to approximate $700 million to $850 million. Ratings downgraded: -- Corporate family rating to B3 from B2 -- Probability of default rating to B3-PD from B2-PD -- $600 million senior unsecured notes due 2019 to Caa1 (LGD4- 62%) from B2 (LGD4-57%) -- $450 million senior unsecured notes due 2020 to Caa1 (LGD4- 62%) from B2 (LGD4-57%) -- $500 million senior unsecured notes due 2022 to Caa1 (LGD4- 62%) from B2 (LGD4-57%) -- $500 million senior unsecured notes due 2024 to Caa1 (LGD4- 62%) from B2 (LGD4-57%) Ratings affirmed -- Speculative grade liquidity rating at SGL-2 The negative outlook considers the execution challenges facing AMD, the likelihood of ongoing losses, and, while currently adequate, prospects for a weakening liquidity profile, although there are no debt maturities until 2019 (aside from $42 million of notes due this May). The rating could be lowered if AMD's cash and liquid investments are likely to drop below $750 million or if the company is unlikely to achieve breakeven operating profit over the next year and sustain modest profitability and positive free cash flow over the intermediate term. The rating is not likely to be raised over the near term. Longer term, the rating could be raised if AMD is able to sustain revenue growth with Moody's adjusted EBITDA margins above 8%, while maintaining cash and liquid investments in excess of $1 billion and achieving adjusted debt to EBITDA below 4 times. The principal methodology used in these ratings was Global Semiconductor Industry Methodology published in December 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. AGRITEK HOLDINGS: D. Brooks & Associates Has Going Concern Doubt ---------------------------------------------------------------- Agritek Holdings filed with the U.S. Securities and Exchange Commission on Apr. 14, 2015, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2014. D. Brooks & Associates CPA's P.A. expressed substantial doubt about the Company's ability to continue as a going concern citing that the Company has incurred operating losses, has incurred negative cash flows from operations and has a working capital deficit. The Company reported a net loss of $2.01 million on $47,300 in revenues for the year ended Dec. 31, 2014, compared to a net loss of $4.42 million on $144,000 of revenues in the same period last year. The Company's balance sheet at Dec. 31, 2014, showed $1.5 million in total assets, $1.73 million in total liabilities, and a stockholders' deficit of $237,000. A copy of the Form 10-K is available at: http://is.gd/e33nsa Agritek Holdings is engaged in the digitization of patient records and distribution of hemp based nutritional products to the medicinal marijuana sector in the United States. The company operates in two segments, Merchant Services and Wholesale Sales. Its products include data management system, a technology platform, which enables consumers to file, store, and retrieve original and authentic personal health documents through the Internet; and energy and hemp ice tea drink products. The company also provides a range of solutions for electronically processing merchant and patient transactions in the healthcare industry. In addition, it is involved in importing and distributing vaporizers and e-cigarettes under the Mont Blunt brand; and managing real property for fully-licensed and compliant growers, and dispensaries in regulated medicinal and recreational markets. The company was formerly known as MediSwipe, Inc. and changed its name to Agritek Holdings, Inc. in May 2014. Agritek Holdings, Inc. was incorporated in 1997 and is based in West Palm Beach, Florida. AGUA CALIENTE: Fitch Corrects April 17 Ratings Release ------------------------------------------------------ Fitch Ratings, on April 20, 2015, issued a correction of a release originally issued Friday April 17, 2015. It provides additional information regarding the assignment of recovery ratings (RRs) to gaming issuers with 'BB' category Issuer Default Ratings (IDRs). The corrected release notes that: Fitch Ratings has affirmed 21 U.S. Gaming, Lodging & Leisure companies' ratings. The worksheet 'Rating Actions' provides: -- A full list of ratings affirmed -- A hyperlink to each issuer's rating summary page at www.fitchratings.com -- Primary analyst and secondary analyst contact information Fitch Ratings has assigned the following recovery ratings (RRs) to gaming issuers with 'BB' category Issuer Default Ratings (IDRs): -- MGM China Holdings, Ltd (MGM Grand Paradise, S.A. as co- issuer) senior secured credit facility 'BBB-'/'RR1'; -- Agua Caliente Band of Cahuilla Indians senior secured notes 'BB+'/'RR2'. The assignment of the recovery ratings reflects 'Recovery Ratings and Notching Criteria for Non-Financial Corporates issuers' criteria dated Nov. 18, 2014, which allows for the assignment of recovery ratings for issuers with IDRs in the 'BB' category. A copy of the corrected ratings worksheet is available at http://is.gd/r0nJvH ALLIED NEVADA: Creditors' Panel Hires Zolfo Cooper as Consultant ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Allied Nevada Gold Corp., et al. seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Zolfo Cooper, LLC as bankruptcy consultant and financial advisors, nunc pro tunc to March 23, 2015. The Committee requires Zolfo Cooper to: (a) monitor the Debtors' cash flow and operating performance, including: - comparing actual financial and operating results to plans, - evaluating the adequacy of financial and operating controls, - tracking the status of the Debtors'/Debtors' professionals' progress relative to developing and implementing programs such as preparation of a business plan, identifying and disposing of non-productive assets, and other such activities, and - preparing periodic presentations to the Committee summarizing findings and observations resulting from Zolfo Cooper's monitoring activities; (b) analyze and comment on operating and cash flow projections, business plans, operating results, financial statements, other documents and information provided by the Debtors/Debtors' professionals, and other information and data pursuant to the Committee's request; (c) advise the Committee concerning interfacing with the Debtors, other constituencies and their respective professionals; (d) prepare for and attend meetings of the Committee; (e) analyze claims and perform investigations of potential preferential transfers, fraudulent conveyances, related- party transactions and such other transactions as may be requested by the Committee; (f) analyze and advise the Committee about the Debtors' proposed plan of reorganization, the underlying business plan, including the related assumptions and rationale, and the related disclosure statement; (g) prepare an expert report and provide testimony, as required; and (h) provide other services as requested by the Committee. Zolfo Cooper will be paid at these hourly rates: Managing Directors $775-$925 Professional Staff $265-$770 Support Personnel $60-$310 Zolfo Cooper will also be reimbursed for reasonable out-of-pocket expenses incurred. David MacGreevey, managing director of Zolfo Cooper, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Court for the District of Delaware will hold a hearing on the application on May 19, 2015, at 2:00 p.m. Objections, if any, are due April 28, 2015, 2015, at 4:00 p.m. Zolfo Cooper can be reached at: David MacGreevey ZOLFO COOPER, LLC Grace Building 1114 Avenue of the Americas 41st Floor New York, NY 10036 Tel: +1 (212) 561-4187 Fax: +1 (212) 213- 1749 E-mail: dmacgreevey@zolfocooper.com About Allied Nevada Allied Nevada Gold Corp. ("ANV"), a Delaware corporation, is a publicly traded U.S.-based gold and silver producer engaged in mining, developing and exploring properties in the State of Nevada. ANV's common stock trades on the NYSE and the TSX. ANV was spun off from Vista Gold Corp. in 2006 and began operations in May 2007. Nevada-based mining properties acquired from Vista include the Hycroft Mine, an open-pit heap leach operation located 54 miles west of Winnemucca, Nevada. ANV controls 75 exploration properties throughout Nevada as of Dec. 31, 2014. On March 10, 2015, ANV and 13 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Debtors have requested that their cases be jointly administered under Case No. 15-10503. The cases are assigned to Judge Mary F. Walrath. The Debtors have tapped Blank Rome LLP and Akin Gump Strauss Hauer & Feld LLP as attorneys; FTI Consulting Inc. as financial advisor; Moelis & Company as financial advisor; and Prime Clerk LLC as claims and noticing agent. ANV disclosed $941 million in total assets and $664 million in total debt as of Dec. 31, 2014. AMERICAN INT'L GROUP: Judge Questions 2008 Bailout's Tough Terms ---------------------------------------------------------------- Leslie Scism, writing for The Wall Street Journal, reported that U.S. Judge Thomas Wheeler of the U.S. Court of Federal Claims grilled a government lawyer over the 2008 rescue of American International Group Inc. as closing arguments wrapped up in a case that challenges whether the historic U.S. bailout was legal. According to the report, when the lawyer for the Justice Department defended the government's 79.9% equity stake acquired in exchange for an emergency loan of $85 billion, Judge Wheeler said "it doesn't seem far fetched" to question the deal's rigidity. As previously reported by The Troubled Company Reporter, David Boies, who represents former and longtime AIG Chief Executive Maurice "Hank" R. Greenberg's Starr International Co., has made the case that the Government cheated AIG shareholders of at least $25 billion partly for the benefit of an elite club of banks. Mr. Greenberg, who built AIG into a global financial-services powerhouse during nearly 40 years at its helm, is challenging the historic 2008 government bailout of the company and has asked a federal judge to rule that the government coerced AIG's board into harsh terms, allegedly cheating shareholders including Mr. Greenberg in the process. The case is Starr International Co. v. U.S., 11-cv-00779, U.S. Court of Federal Claims (Washington). 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. ANDALAY SOLAR: Annual Meeting Set for June 9 -------------------------------------------- Andalay Solar, Inc., announced that the annual meeting of stockholders will be held on June 9, 2015, at its principal corporate offices located at 48900 Milmont Drive, Fremont, California. The record date for the annual meeting is April 21, 2015. About Andalay Solar Founded in 2001, Andalay Solar, Inc., formerly Westinghouse Solar, Inc., is a provider of innovative solar power systems. In 2007, the Company pioneered the concept of integrating the racking, wiring and grounding directly into the solar panel. This revolutionary solar panel, branded "Andalay", quickly won industry acclaim. In 2009, the Company again broke new ground with the first integrated AC solar panel, reducing the number of components for a rooftop solar installation by approximately 80 percent and lowering labor costs by approximately 50 percent. This AC panel, which won the 2009 Popular Mechanics Breakthrough Award, has become the industry's most widely installed AC solar panel. A new generation of products named "Instant Connect" was introduced in 2012 and is expected to achieve even greater market acceptance. For the year ended Dec. 31, 2014, the Company incurred a net loss attributable to common stockholders of $1.87 million on $1.28 million of net revenue compared to a net loss attributable to common stockholders of $3.85 million on $1.12 million of net revenue in 2013. As of Dec. 31, 2014, the Company had $2.56 million in total assets, $5.51 million in total liabilities and a $2.95 million stockholders' deficit. Burr Pilger Mayer, Inc., in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company's significant operating losses and negative cash flow from operations raise substantial doubt about its ability to continue as a going concern. APOGEE WESTERN: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Apogee Western Inc 27300 Capricho Circle Temecula, CA 92590 Case No.: 15-14021 Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court Central District Of California (Riverside) Judge: Hon. Mark D. Houle Debtor's Counsel: Alan L Mohill 43015 Blackdeer Loop Suite 101 Temecula, CA 92590 Tel: 951-296-3307 Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth Hall, director. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-14021.pdf ART AND ARCHITECTURE: Court Okays Deal on Rule 2004 Examination --------------------------------------------------------------- U.S. Bankruptcy Judge Robert Kwan gave his stamp of approval on a "Stipulation Regarding Conduct of Rule 2004 Examination Including Production of Documents by Official Committee of Unsecured Creditors and Chapter 11 Debtor in Possession" in the bankruptcy case of Art and Architecture Books of the 21st Century. The Court said that, in the event the parties cannot agree during their conference on any issues with respect to the conduct by the Designated Representative of the tasks and obtaining of information provided for in this Stipulation, the Court will conduct a hearing with respect to the disagreements on May 1, 2015 at 11:00 a.m. in Courtroom 1675. A copy of the Court's April 21 order approving the Stipulation is available at http://is.gd/eWsVDFfrom Leagle.com. Attorneys for Official Committee of Unsecured Creditors: Victor A. Sahn, Esq. Daniel A. Lev, Esq. Asa S. Hami, Esq. SULMEYERKUPETZ A PROFESSIONAL CORPORATION Los Angeles, California E-mail: vsahn@sulmeyerlaw.com dlev@sulmeyerlaw.com ahami@sulmeyerlaw.com Art and Architecture Books of the 21st Century, dba Ace Gallery, filed for a voluntary Chapter 11 petition on Feb. 19, 2013, in the U.S. Bankruptcy Court for the Central District of California, Case No. 13-14135. The petition was signed by Douglas Chrismas, president. Judge Robert Kwan presides over the case. Joseph A. Eisenberg, Esq., at Jeffer Mangels Butler & Mitchell LLP, serves as counsel. The Debtor reported $1 million to $10 million in assets and $10 million to $50 million in debts. ASPEN RIDGE SCHOOL: S&P Rates $11.01MM 2015A/B Revenue Bonds 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' rating to the Colorado Educational and Cultural Facilities Authority's $11.01 million series 2015A and B fixed-rate charter school revenue bonds issued on behalf of Aspen Ridge Preparatory School. The outlook is stable. "While we believe Aspen Ridge is well positioned to grow into the debt," said Standard & Poor's credit analyst Luke Gildner, "the rating reflects the school's limited operating history, very high pro forma debt service burden, and slim historical debt service coverage." Supporting the rating is Aspen Ridge's history of strong academic performance supporting enrollment growth, strong liquidity, and history of operating surpluses. "The 'BB+' rating reflects our assessment of the school's very short operating history and slim pro forma maximum annual debt service (MADS) coverage of 0.96x in fiscal 2014," added Mr. Gildner. Other factors include: -- Its very limited revenue base with a high pro forma lease- adjusted MADS burden representing 39% of fiscal 2014 expenses; and -- The inherent risk associated with charter schools, including the possibility that the charter may be revoked. Partly offsetting credit factors include the school's: -- History of growing enrollment, bolstered by strong retention rates, an adequate waitlist, and a solid academic profile; -- Committed management team working to build on a growing headcount and financial profile; and, -- Solid unrestricted cash levels of $640,000 (equal to 152 days' cash on hand). Management plans to use the proceeds of the bonds to acquire the building the school currently occupies. Proceeds will also be used to purchase land adjacent to the campus and construct an additional educational facility to accommodate the school's upcoming expansion to middle school. A debt service reserve fund and costs associated with the issuance of the series 2015 bonds will also be funded by bond proceeds. "The stable outlook reflects our expectation that during the next year, management will meet enrollment projections and pro forma MADS coverage will show improvement from prior years," said Mr. Gildner. S&P also expects liquidity will remain relatively stable. S&P does not expect to take a positive rating action during the one-year outlook period, but it could take one if the charter school can consistently meet financial projections, resulting in MADS coverage in excess of 1.4x while maintaining liquidity levels. S&P could lower the rating if enrollment does not increase as projected, operations weaken, or the balance sheet deteriorates to less than 60 days' cash on hand. ATLANTIC CITY, NJ: State Appoints Mediator ------------------------------------------ Matt Jarzemsky and Josh Dawsey, writing for The Wall Street Journal, reported that New Jersey has tapped former bankruptcy judge Donald Steckroth to mediate talks between struggling Atlantic City and groups expected to play a major part in its looming restructuring, including casino operators and police and firefighters' unions. According to the Journal, the appointment reflects city and state officials' desire to keep the gambling destination out of bankruptcy as it works to fix its budget crisis. The Journal, citing people familiar with the situation, said Mr. Steckroth's role would involve serving as an arbiter during attempts at making deals between the city's turnaround team -- led by state-appointed emergency manager Kevin Lavin -- and business and union interests. * * * 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. ATOSSA GENETICS: BDO USA Expresses Going Concern Doubt ------------------------------------------------------ Atossa Genetics, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the year ended Dec. 31, 2014. BDO USA, 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 has an accumulated deficit. The Company reported a net loss of $14.7 million on $526,000 of total revenue for the year ended Dec. 31, 2014, compared with a net loss of $10.8 million on $633,000 of total revenue in 2013. The Company's balance sheet at Dec. 31, 2014, showed $11.8 million in total assets, $2.27 million in total liabilities, and total stockholders' equity of $9.5 million. A copy of the Form 10-K is available at: http://is.gd/Yyq3aM Atossa Genetics, Inc., is a Delaware corporation with principal executive offices located in Seattle, Washington. Atossa is a development-stage healthcare company. The Company is focused on the commercialization of cellular and molecular diagnostic risk assessment products and related services for the detection of pre- cancerous conditions that could lead to breast cancer, and on the development of second-generation products and services. The Company reported a net loss of $3.25 million on $3,426 of total revenue for the three months ended Sept. 30, 2014, compared with a net loss of $3.50 million on $76,600 of total revenue for the same period in 2013. The Company's balance sheet at Sept. 30, 2014, showed $16.8 million in total assets, $1.54 million in total liabilities, and stockholders' equity of $15.23 million. AVAYA INC: Moody's Assigns B1 Rating on Proposed Term Loan ---------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Avaya, Inc.'s proposed senior secured first lien term loan. Existing ratings including the company's B3 corporate family rating are not impacted. The ratings outlook remains negative. The new term loan (Term Loan B-7), which has a maturity date of 2020, will be used to refinance a portion of the $3.2 billion of existing term loans maturing in 2017 and 2018. The proposed term loan will be rated the same as the existing term loans. The B1 rating on the proposed senior secured term loan is determined in conjunction with Moody's Loss Given Default Methodology and reflects its senior position in the capital structure ahead of its second lien notes, pensions and a substantial portion of its payables. The B3 corporate family rating continues to reflect the very high leverage levels (in excess of 8x as of December 2014) and debt service and other requirements at Avaya at a time when the enterprise telephony market is evolving. Debt service, pension service and capital requirements of the business leave little cushion to support unforeseen operating challenges or to make material debt repayment or critical acquisitions. The rating acknowledges the company's industry leading position within the enterprise telephony market. At the same time the industry is evolving to include integrated communications offerings, with products offered as either on premise or hosted, managed service solutions. Avaya will need to constantly reinvest in new products and platforms to maintain its position against Cisco, its much larger and better capitalized primary competitor. Avaya's management team has made significant strides in improving operating margins, working capital turns and the supply chain since the going private transaction in 2007. The company has faced persistent sales declines however, and Moody's expect the management team to continue restructuring efforts into 2015 in order to adjust the cost structure to the reduction in revenues. Avaya has adequate liquidity driven by cash on hand and undrawn revolver commitments. Avaya had approximately $328 million of cash balances as well as access to senior secured revolving credit facilities (including a $200 million facility and a $335 million ABL facility each maturing October 2016) with approximately $226 million available on the two facilities as of December 31, 2014. The company has announced its intention, prior to June 30, 2015, to refinance the existing revolvers and push out maturities. The ratings could face downward pressure if the company does not refinance its revolvers well in advance of their October 2016 maturities. Avaya's ratings could also be downgraded if revenues were to decline materially or by a material loss of market share. The ratings could also face downward pressure if leverage is expected to remain above 8x or free cash flow is expected to remain negative for a prolonged period. The ratings could be upgraded if revenues stabilize and profit margins improve such that leverage trends toward 6.5x and sustainable free cash flow to debt (Moody's adjusted) improves towards 5%. Assignments: -- Senior Secured Bank Credit Facility (Local Currency), Assigned B1, LGD2 The principal methodology used in this rating was Global Communications Equipment Industry published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Avaya is a global leader in enterprise telephony systems with $4.3 billion of revenues for the LTM period ended Dec. 31, 2014. BE ACTIVE HOLDINGS: Has $12.6 Million Net Loss in 2014 ------------------------------------------------------ Be Active Holdings, Inc., reported a net loss of $12.6 million on $(129,000) of net sales for the year ended Dec. 31, 2014, compared with a net loss of $4.40 million on $117,000 of net sales in the prior year. Cornick, Garber & Sandler, LLP, expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations. The Company's balance sheet at Dec. 31, 2014, showed $1.43 million in total assets, $2.01 million in total liabilities and total stockholders' deficit of $579,000. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/IdHhGk Be Active Holdings, Inc., manufactures and sells low fat, low calorie, and natural probiotic frozen yogurt and ice cream products in the New York metropolitan area. The company offers its products under the Jala brand name. Be Active Holdings, Inc. sells its products primarily to supermarkets, as well as to convenience and other foods stores. The company was founded in 2009 and is based in Great Neck, New York. The Company reported a net income of $8.18 million on $7,920 of net sales for the three months ended June 30, 2014, compared with a net loss of $1.33 million on $1,094 of net sales for the same period last year. The Company's balance sheet at June 30 2014, showed $1.1 million in total assets, $395,086 in total liabilities, and stockholders' equity of $709,138. BIOPHARMX CORP: Burr Pilger Mayer Expresses Going Concern Doubt --------------------------------------------------------------- BioPharmX Corporation reported a net loss of $7.81 million for the year ended Dec. 31, 2014, compared with a net loss of $1.59 million in 2013. Burr Pilger Mayer, Inc., expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company's recurring losses from operations, available cash and accumulated deficit. The Company's balance sheet at Dec. 31, 2014, showed $2.99 million in total assets, $1.37 million in total liabilities, $6.73 million in convertible redeemable preferred stock and total stockholders' deficit of $5.11 million. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/leWufe BioPharmX Corp. engages in the development of novel delivery mechanisms and routes of administration for known drugs and tissues. The company was founded on August 30, 2010 and is headquartered in Menlo Park, CA. BRASA HOLDINGS: S&P Puts 'B' Rating on CreditWatch Positive ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Brasa Holdings Inc. on CreditWatch with positive implications, meaning S&P could raise its ratings following the completion of its review. The CreditWatch listing follows Brasa's S-1 filing for an IPO. The company indicated that it plans to use majority of the $75 million proposed offering to reduce outstanding debt balances. Pro forma for debt reduction, S&P anticipates debt leverage of about 4x at Dec. 28, 2014, and further improve thereafter as a result of profit growth. In addition, S&P believes the company's financial sponsor will reduce its ownership in the company following the completed IPO, hence S&P would assume that debt-financed dividends are less likely. S&P will resolve the CreditWatch listing when the IPO and its review is completed. The company's recent good performance trends is an additional factor that supports an upgrade. CATASYS INC: Obtains $2 Million From Securities Sale ---------------------------------------------------- Catasys, Inc., entered into a securities purchase agreement with several institutional accredited investors, pursuant to which the Company received an aggregate gross proceeds of $2 million from the Investors for the sale of approximately $2.12 million principal amount of 12% Original Issue Discount Convertible Debenture due Jan. 18, 2016, and five-year warrants to purchase an aggregate of 530,303 shares of the Company's common stock, par value $0.0001 per share, at an exercise price of $2.00 per share. The closing of the Purchase Agreement occurred on April 17, 2015. The conversion price of the Bridge Notes and the exercise price of the Warrants is $2.00 per share, subject to adjustments, including for issuances of common stock and common stock equivalents below the then current conversion or exercise price, as the case may be. The Bridge Notes are unsecured, bear interest at a rate of 12% per annum payable in cash or shares of Common Stock, subject to certain conditions, at the Company's option, and are subject to mandatory prepayment upon the consummation of certain future financings. Chardan Capital Markets, LLC acted as the sole placement agent for this transaction, in consideration for which it received $160,000 from the Company. The Company intends to use the net proceeds of this transaction of $1,815,000 for working capital and the re-payment of $560,000 of outstanding indebtedness incurred by way of short term, interest free loans over the past two months to an affiliate of Terren S. Peizer, the Company's chairman and chief executive officer. The investors will receive 200,000 additional shares of Common stock if the Company has not consummated a public offering of at least $5 million in gross proceeds by Sept. 30, 2015. In connection with the Purchase Agreement, the Investors have agreed, subject to certain exceptions for shares owned prior to this transaction or acquired in the open market subsequent to this transaction, not to sell or dispose of any shares prior to Oct. 15, 2015, subject to earlier termination of such lock-up if we have not filed a registration statement for a public offering by May 31, 2015. In addition, the Company's officers and directors also entered into lock-up agreements pursuant to which they agreed not to sell or dispose any securities of the Company beneficially owned by them until the Bridge Notes are no longer outstanding. The investors are also entitled, until April 17, 2016, to participate in certain future financings of the Company. About Catasys Inc. Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys, Inc., is a healthcare services management company, providing through its Catasys(R) subsidiary specialized behavioral health management services for substance abuse to health plans. Catasys reported a loss of $27.3 million on $2.03 million of healthcare services revenues for the 12 months ended Dec. 31, 2014, compared to a loss of $4.67 million on $754,000 of healthcare services revenues for the 12 months ended Dec. 31, 2013. As of Dec. 31, 2014, Catasys had $2.35 million in total assets, $43.57 million in total liabilities and a $41.22 million total stockholders' deficit. Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has continued to incur significant operating losses and negative cash flows from operations during the year ended Dec. 31, 2014. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning At Dec. 31, 2014, cash and cash equivalents was $708,000 and the Company had a working capital deficit of approximately $1.5 million. The Company has incurred significant operating losses and negative cash flows from operations since its inception. During the year ended Dec. 31, 2014, the Company's cash used in operating activities from continuing operations was $5.1 million. The Company anticipates continuing to incur negative cash flows and net losses for the next twelve months. "We expect our current cash resources to cover expenses into April 2015, however delays in cash collections, revenue, or unforeseen expenditures, could negatively impact our estimate. We are in need of additional capital, however, there is no assurance that additional capital can be timely raised in an amount which is sufficient for us or on terms favorable to us and our stockholders, if at all. If we do not obtain additional capital, there is a significant doubt as to whether we can continue to operate as a going concern and we will need to curtail or cease operations or seek bankruptcy relief. If we discontinue operations, we may not have sufficient funds to pay any amounts to stockholders," the Company said in the report. CCO HOLDINGS: Fitch Assigns 'BB-' Rating to $800MM Notes Due 2027 ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to CCO Holdings, LLC's (CCOH) $800 million issuance of senior unsecured notes due 2027. The ratings for CCOH remain on Rating Watch Positive. Proceeds from the offering are expected to be used for the partial redemption of CCOH's $1.4 billion of 7% senior notes due 2019. Outside of the extension of the company's maturity profile and an expected reduction of interest expense related to this transaction, CCOH's credit profile has not substantially changed. CCOH and Charter Communications Operating LLC (CCO) are indirect wholly owned subsidiaries of Charter Communications, Inc. (Charter). Approximately $14.1 billion of debt (principal value - excluding the debt issued by CCOH Safari, LLC and CCO Safari, LLC) was outstanding as of Dec. 31, 2014. Fitch placed the ratings of CCOH and CCO on Positive Watch following Charter's announcement that it has entered into definitive agreements to acquire Bright House from Advance/Newhouse Partnership (A/N) for $10.4 billion. Fitch believes that the proposed transaction will de-lever Charter's balance sheet after considering both the current transaction and the previously announced transactions with Comcast Corporation. KEY RATING DRIVERS -- Fitch believes the acquisition of Bright House will strengthen Charter's overall credit profile. Fitch anticipates that Charter's leverage, pro forma for the contemplated transactions will decline to approximately 4x; -- The proposed transaction will increase Charter's scale and improve operating efficiencies and subscriber clustering profile. Fitch estimates that Charter's leverage declines to approximately 4x on a pro forma basis as of the LTM period ended Dec. 31, 2014. Moreover the Bright House acquisition strengthens Charter's overall competitive position by increasing scale and improving its subscriber clustering profile, enabling greater operating efficiencies and creating a stronger platform for growth. The acquisition will be effected through a partnership of which Charter will control 73.7% ownership and A/N will retain 26.3% ownership. Total consideration to be paid to A/N by Charter includes $5.9 billion of common units, and $2.5 billion of convertible preferred units in the partnership, in addition to $2 billion of cash. Finally, Liberty Broadband Corporation has agreed to purchase $700 million of Charter common stock upon close of the transaction. The partnership units owned by A/N are exchangeable into Charter common stock. The transaction is subject to several conditions, including among others, Charter shareholder approval, the expiration of Time Warner Cable's right of first offer for Bright House, the close of Charter's previously announced transactions with Comcast, and regulatory approval. In total, Fitch views the acquisition of Bright House along with the previously announced transactions with Comcast positively. The combination creates the second largest cable MSO in the country (assuming Comcast's proposed merger with TWC closes) with 7.6 million video subscribers owned by Charter and 10.1 million video subscribers after considering the Greatland Connections assets managed by Charter. The transactions improve Charter's subscriber clustering, enabling greater operating efficiencies and creating a stronger platform for growth. The Bright House acquisition adds approximately two million video customers in markets largely contiguous with Charter's existing service footprint and adds attractive markets such as Orlando and Tampa Bay Florida. However, integration risks are elevated, and Charter's ability to manage the integration process and limit disruption to the company's overall operations is key to the success of the transactions. Charter's operating strategies are having a positive impact on the company's operating profile resulting in a strengthened competitive position. The market share-driven strategy, which is focused on enhancing the overall competitiveness of Charter's video service and leveraging its all-digital infrastructure, is improving subscriber metrics, growing revenue and ARPU trends, and stabilizing operating margins. Charter's leverage as of the LTM ended Dec. 31, 2014 was 4.4x excluding the debt issued by CCOH Safari, LLC and CCO Safari, LLC. Management's leverage target remains unchanged ranging between 4x and 4.5x. The pro forma leverage coupled with the improving operating profile is reflective of a 'BB' IDR. Fitch has previously indicated that positive rating actions would likely coincide with leverage expected to be sustained below 4.5x while demonstrating progress in closing gaps relative to its industry peers on service penetration rates and strategic bandwidth initiatives. The company's liquidity position is primarily supported by available borrowing capacity from its $1.3 billion revolver and anticipated free cash flow generation. Commitments under the company's revolver will expire on April 22, 2018. As of Dec. 31, 2014, approximately $817 million was available for borrowing. Near-term scheduled maturities consist of $65 million scheduled to mature during 2015 followed by $92 million during 2016. Following the April 2015 refinancing of CCOH's $1 billion of 7.25% senior notes due 2017, approximately $102 million of debt is scheduled to mature during 2017. Resolution of the Rating Watch will largely be based on Fitch's review of Charter's capital structure including assignment of potential equity credit to the convertible preferred partnership units and an assessment of the risks associated with Charter's ability to integrate cable systems acquired from Comcast and Bright House. RATING SENSITIVITIES -- Positive rating actions would be contemplated as leverage is expected to remain below 4.5x; -- If the company demonstrates progress in closing gaps relative to its industry peers on service penetration rates and strategic bandwidth initiatives; -- Operating profile strengthens as the company captures sustainable revenue and cash flow growth envisioned when implementing the current operating strategy; -- Fitch believes negative rating actions would likely coincide with a leveraging transaction or the adoption of a more aggressive financial strategy that increases leverage beyond 5.5x in the absence of a credible deleveraging plan; -- Adoption of a more aggressive financial strategy; -- A perceived weakening of Charter's competitive position or failure of the current operating strategy to produce sustainable revenue and cash flow growth along with strengthening operating margins. CHART INDUSTRIES: Moody's Withdraws All Ratings ----------------------------------------------- Moody's Investors Service has withdrawn all of its ratings on Chart Industries. Ratings Withdrawn: -- Corporate Family Rating, Withdrawn , previously rated Ba2 -- Probability of Default Rating, Withdrawn , previously rated Ba2-PD -- Speculative Grade Liquidity Rating, Withdrawn , previously rated SGL-2 Outlook Actions: -- Outlook, Changed To Rating Withdrawn From Stable Moody's has withdrawn the ratings due to the obligation being redeemed. Chart Industries, Inc. ("Chart") is a global manufacturer of products used for low temperature and cryogenic systems. Chart's products are used in a multitude of energy, industrial, commercial and scientific applications. It operates in three business segments: Distribution and Storage ("D&S") (49% of 2014 revenues); Energy and Chemicals ("E&C") (32%); and Biomedical (19%). Revenues for the last twelve months ended December 31, 2014 were approximately $1.2 billion. CHROMAFLO ACQUISITION: S&P Lowers CCR to 'B-'; Outlook Stable ------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on Chromaflo Acquisition Co. L.P. to 'B-' from 'B'. The outlook is stable. S&P also lowered its issue rating on the first-lien senior secured facility to 'B-' from 'B'. The recovery rating remains '3' indicating S&P's expectation of meaningful (50% to 70%; the upper half of the range) recovery in the event of payment default. The facility consists of a $40 million revolving credit facility due 2018 and a $330 million first-lien term loan due 2019. S&P lowered its issue rating on the $115 million second-lien term loan due 2020 to 'CCC+' from 'B-'. The '5' recovery rating on this debt remains unchanged and indicates S&P's expectation of modest (10% to 30%; upper half of the range) recovery in the event of payment default. "The stable outlook reflects our expectation that the company will achieve and maintain satisfactory operating profitability and generate sufficient free cash flow to support a financial profile consistent with its ratings," said Standard & Poor's credit analyst Sebastian Pinto-Thomaz. S&P expects the company will maintain its very aggressive financial policy and pursue modest-size acquisitions and shareholder rewards. S&P's expectations at the current rating include maintaining FFO to debt above 5%. Chromaflo Acquisition Co. L.P. has experienced a material decline in FFO/debt and increase in debt/EBITDA not anticipated in previous projections. Fiscal year 2014 adjusted debt/EBITDA and FFO/debt were 7.6x and 6.3%, respectively, for fiscal year 2014. Although the company is still generating ample cash flow and its liquidity is not under pressure, S&P do not anticipate that leverage measures will improve to levels appropriate for the 'B' rating. S&P based the ratings on its assessment of Chromaflo's financial risk as "highly leveraged" and its business risk profile as "weak." S&P considers Chromaflo's liquidity to be "adequate," and expect cash sources to exceed cash uses by at least 1.2x during the next 12 months. S&P could lower ratings if difficulties during the integration or operating challenges were to result in a strain to liquidity or cash flow turning negative. This could happen if EBITDA margins were to decline by more than 840 basis points from forecasts or if the company trips any covenants without access to its revolving credit facility. Given the company's very aggressive financial policy, S&P views an upgrade over the next year as unlikely. For an upgrade S&P believes the company, and its ownership needs to commit to maintaining credit measures in a range appropriate for an "aggressive" financial risk profile and demonstrate this commitment by creating a track record. However, S&P could raise the rating if FFO to debt were to increase above 10%, leverage fell to below 6x, and S&P believes the company will follow a financial policy that will support metrics at that level. CINEMARK USA: S&P Retains 'BB+' Sr. Secured Debt Rating ------------------------------------------------------- Standard & Poor's Ratings Services said its issue-level rating on Plano, Texas-based motion picture exhibition company Cinemark USA Inc.'s senior secured credit facility remains 'BB+' with a recovery rating of '1', following the company's announcement of its plan to extend the maturity date on its senior secured term loan B by three years to 2022. The '1' recovery rating indicates S&P's expectation for very high (90% to 100%) recovery of principal for debtholders in the event of a default. The issue-evel rating on the debt is two notches higher than S&P's 'BB-' corporate credit rating on the company and on its parent, Cinemark Holdings Inc. The transaction will not affect Cinemark's adjusted leverage ratio, which was 3.4x as of year-end 2014. RATINGS LIST Cinemark Holdings Inc. Cinemark USA Inc. Corporate Credit Rating BB- Cinemark USA Inc. Senior Secured BB+ Recovery Rating 1 COATES INT'L: Cowan Gunteski Expresses Going Concern Doubt ---------------------------------------------------------- Coates International, Ltd., reported a net loss of $12.8 million on $19,200 of total revenues for the year ended Dec. 31, 2014, compared with a net loss of $2.75 million on $19,200 of total revenues in the prior year. Cowan, Gunteski & Co., P.A., expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company continues to have negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency The Company's balance sheet at Dec. 31, 2014, showed $2.52 million in total assets, $7.95 million in total liabilities, and a stockholders' deficit of $5.43 million. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/r853kC Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. CONCENTRA INC: S&P Assigns 'B+' CCR; Outlook Negative ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to occupational health services provider Concentra Inc. The outlook is negative. At the same time, S&P assigned the company's proposed $500 million first-lien secured credit facility a 'BB-' issue-level rating (one notch above the corporate credit rating), with a recovery rating of '2'. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%, at the low end of the range) recovery for first-lien lenders in the event of a payment default. The facility consists of a $50 million revolving credit facility due 2020 (undrawn at closing) and a $450 million term loan due 2022. In addition, S&P assigned the company's proposed $200 million second-lien secured credit facilities a 'B-' issue-level rating (two notches below the corporate credit rating), with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery for second-lien lenders in the event of a payment default. Select and Welsh Carson will use the proceeds of the new debt along with contributed equity to purchase Concentra Inc. "The 'B+' corporate credit rating reflects the company's narrow focus in a highly fragmented and competitive industry of occupational-based health services, some integration risk related to the transaction, and cyclical demand dynamics," said Standard & Poor's credit analyst Tulip Lim. These risks are partially offset by the company's geographic diversity and relatively low exposure to government payors. The rating also reflects S&P's expectation that leverage, including synergies, will be in the mid-4x area. The outlook is negative. This reflects the negative rating outlook on parent Select, and S&P's belief that credit deterioration at the parent would prompt a downgrade on Concentra. "We could lower the rating if operating weakness at Select or at Concentra causes the combined entity's leverage to rise and remain above 5x. This could occur if Select's revenues decline by 5% and margins are compressed by 100 basis points (most likely due to revenue pressures following tightened payment eligibility criteria at its core long-term acute-care hospitals (LTACHs), and the company continues to allocate free cash flow primarily for shareholder returns. We could also lower our rating on Concentra if we see meaningful risk that its leverage will also remain above 5x for a sustained period. This could occur if the company does not make meaningful progress in reducing overhead costs or if its revenue declined and its EBITDA margin were 150 basis points lower than our expectations because of increasing competition, a cyclical downturn, or reimbursement pressure," S&P said. S&P could revise the outlook to stable if it gains confidence that the combined entity's leverage will remain below 5x on a sustained basis. This scenario would require Select to generate at least flat EBITDA at its core LTACHs either by offsetting revenue lost as a result of recent eligibility changes, managing its costs well enough to offset margin pressures, or prioritizing debt reduction. CONNEAUT LAKE: Fails to Resolve Dispute on Insurance Settlement --------------------------------------------------------------- Keith Gushard at The Meadville Tribune reports that the April 15 meeting of Trustees of Conneaut Lake Park, Park Restoration LLC and local taxing bodies in Crawford County did not result in a decision on who should receive a $611,000 insurance settlement from an August 2013 fire that destroyed the Beach Club night club. Norman Gilkey, Esq., a Pittsburgh attorney appointed by Chief U.S. Bankruptcy Judge Jeffrey Deller to mediate the dispute, met with all parties involved for six hours, The Meadville Tribune relates, citing Mark Turner, executive director of the Trustees. The Meadville Tribune states that the settlement money has been held in escrow because there is a legal battle over who should get the proceeds. According to the report, Park Restoration LLC operated and insured the Beach Club through a management agreement with the Trustees. The report says that local taxing bodies in Crawford County want the $611,000 for back taxes owned by the park. According to The Meadville Tribune, Mr. Turner said no more mediation sessions are scheduled and the insurance dispute will return to U.S. Bankruptcy Court. About Conneaut Lake Park Conneaut Lake Park is a summer amusement resort, located in Conneaut Lake, Pennsylvania. Trustees of Conneaut Lake Park, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 14-11277) in Erie, Pennsylvania, on Dec. 4, 2014. The case is assigned to Judge Thomas P. Agresti. The Debtor tapped George T. Snyder, Esq., at Stonecipher Law Firm, in Pittsburgh, as counsel. The Debtor estimated assets and debt of $1 million to $10 million. Trustees of Conneaut Lake Park filed for bankruptcy protection less than 20 hours before the Crawford County amusement park was cheduled to go to sheriff's sale for almost $930,000 in back taxes and related fees. CONNEAUT LAKE: Needs $300,000 to Reopen Park on May 22 ------------------------------------------------------ Conneaut Lake Park's managers say they want $300,000 in working capital to prepare the park to open, Keith Gushard at The Meadville Tribune reports. According to The Meadville Tribune, the Park doesn't have that amount, but Mark Turner, executive director of the Trustees of Conneaut Lake Park, says that the Park will open as planned on May 22. "I have $150,000, which would be sufficient to open the park. It's a low-interest loan from the Economic Progress Alliance of Crawford County, but the interest and principal would be deferred until there is a land sale (of excess park property)," the report quoted Mr. Turner as saying. The Meadville Tribune relates that the Trustees has also applied for a loan from the Northwest Regional Planning and Development Commission, a regional economic development agency, for the other $150,000 needed. The report quoted Mr. Turner as saying, "If that loan doesn't come through, we'll just have to operate with the $150,000 (from the Alliance). The court would have to approve the park taking on any additional debt, while the commission is expected to act on the Trustees' loan request at the commission's May meeting, The Meadville Tribune states, citing Mr. Turner. The Meadville Tribune quoted Trustees chairman William Bragg as saying, "We just won't be able to do as many improvements as we plan to do" if the commission loan doesn't come through. There is about $30,000 worth of deferred maintenance that must be done to get the park ready to open for the season, The Meadville Tribune reports, citing Mr. Turner. About Conneaut Lake Park Conneaut Lake Park is a summer amusement resort, located in Conneaut Lake, Pennsylvania. Trustees of Conneaut Lake Park, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 14-11277) in Erie, Pennsylvania, on Dec. 4, 2014. The case is assigned to Judge Thomas P. Agresti. The Debtor tapped George T. Snyder, Esq., at Stonecipher Law Firm, in Pittsburgh, as counsel. The Debtor estimated assets and debt of $1 million to $10 million. Trustees of Conneaut Lake Park filed for bankruptcy protection less than 20 hours before the Crawford County amusement park was scheduled to go to sheriff's sale for almost $930,000 in back taxes and related fees. EDMENTUM INC: Moody's Affirms Caa1 Corp. Family Rating ------------------------------------------------------ Moody's Investors Service affirmed Edmentum's Caa1 corporate family rating and B2 ratings on the company's senior secured credit facilities. Moody's downgraded Edmentum's probability of default rating to Ca-PD from Caa1-PD and second lien term loan rating to Ca from Caa3, reflecting the planned restructuring of the capital structure. The rating outlook is negative. On April 20, 2015, Edmentum announced it reached an agreement with its lenders to recapitalize its balance sheet and reduce debt. The proposed transaction calls for a paydown of a portion of the company's $231 million first lien debt, a substantial reduction in the company's $140 million of second lien debt, and $35 million of new capital from the company's second lien lenders. The second lien lenders will own substantially all of the equity in the reorganized company. Moody's will consider this debt for equity exchange as a distressed exchange. As a result, Moody's will append Edmentum's probability of default rating with an "/LD" designation at the close of the debt exchange indicating limited default, which will be removed after three business days. The restructuring of the balance sheet will provide the company with improvement in its liquidity profile and is expected to reduce debt levels. However, the ratings on the company's existing first lien credit facilities could be downgraded due to the loss of junior debt cushion upon recapitalization. The negative rating outlook reflects the company's planned restructuring of the balance sheet and debt for equity exchange. Moody's could downgrade the ratings if the proposed restructuring does not take place, operating environment continues to be challenging, revenue and EBITDA continue to decline, customer contract losses occur, and/or the company's liquidity profile weakens further. Moody's could upgrade the ratings if Edmentum improves its liquidity profile, organically grows its scale and improves profitability while generating positive free cash flow. Leverage under 6.5 times and EBITA to interest above 1.5 times would also need to be maintained. The following rating actions were taken: -- Probability of Default Rating, downgraded to Ca-PD from Caa1-PD; -- Corporate Family Rating, affirmed at Caa1; -- First lien senior secured revolving credit facility due 2017, affirmed at B2 (LGD3); -- First lien senior secured term loan due 2018, affirmed at B2 (LGD3); -- Second lien senior secured term loan due 2019, downgraded to Ca (LGD5) from Caa3 (LGD5); The principal methodology used in these ratings was Business and Consumer Service Industry published in December 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Bloomington, Minnesota, Edmentum, Inc. ("Edmentum") is a provider of online instruction, curriculum management, assessment, and related services to K-12 schools, community colleges, and other educational institutions. The company is privately owned by affiliates of Thoma Bravo. In May 2012, the company acquired Archipelago Learning, Inc. ("Archipelago"), a provider of online test preparation, formative assessment and supplemental instruction solutions. EDWIN RITTER JONAS: 9th Cir. Affirms Chapter 11 Case Dismissal -------------------------------------------------------------- The United States Court of Appeals, Ninth Circuit, upheld a district court order that affirmed the bankruptcy court's dismissal with prejudice of the Chapter 11 case of debtor Edwin Jonas. "The bankruptcy court acted within its discretion to dismiss the case for Debtor's failure to comply with the express terms of the stipulation he negotiated in order to reconvert his case to Chapter 11," the Ninth Circuit said. A copy of the Ninth Circuit's April 17 Memorandum is available at http://is.gd/gJ0VbOfrom Leagle.com. Edwin Ritter Jonas, III, in Rollins, Montana, filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 10-60248) on Feb. 19, 2010. Edward A. Murphy, Esq. -- murphylawoffices@yahoo.com -- and Murphy Law Offices, PLLC, serve as the Debtor's counsel. In his petition, the Debtor estimated $1 million to $10 million in assets and debts. A full-text copy of the Debtor's petition, including a list of its 18 largest unsecured creditors, is available for free at http://bankrupt.com/misc/mtb10-60248.pdf EMMIS COMMUNICATION: S&P Affirms 'B' Corp. Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Indianapolis-based radio broadcasting company Emmis Communication Corp. The outlook is stable. At the same time, S&P affirmed its 'B+' issue-level rating on the company's subsidiary Emmis Operating Co.'s $205 million senior secured credit facility. The recovery rating remains '2', indicating S&P's expectation for substantial (70% to 90%, higher end of the range) recovery of principal in the event of default. "The 'B' corporate credit rating on Emmis Communications reflects our assessment of the company's business risk profile as 'weak,' which considers its small scale; concentration of revenue from its stations in New York and Los Angeles, where Emmis competes with much larger players such as iHeartCommunications Inc. and Cumulus Media Inc. for both listeners and advertising revenue; and exposure to longer-term structural declines in radio," said Standard & Poor's credit analyst Heidi Zhang. The stable outlook reflects S&P's view that Emmis will be able to amend its credit agreement and maintain "adequate" liquidity over the next 12 to 18 months despite risks surrounding longer-term secular trends in radio. If the company is unable to amend its covenants, S&P could lower its rating. S&P could lower the rating if it becomes apparent that discretionary cash flow will decline below $10 million, covenant headroom will shrink to less than 15%, or if leverage increases above 6.5x on a sustained basis. This could occur as a result of large debt-financed acquisitions that contribute to tightening covenants or weak ad demand in its key markets, combined with continued secular pressure on radio advertising revenue from alternative media. S&P could raise its rating if Emmis increases its size through profitable acquisitions and we become convinced that it will maintain leverage below 5x on a sustained basis, with "adequate" liquidity and at least 15% EBITDA margin of compliance against its covenants. Upgrade potential would likely be linked to the radio industry stabilizing and returning to some modest pace of growth, as well as Emmis directing the majority of its discretionary cash flow to debt repayment, with a commitment to maintaining lower leverage over the long term. EMMIS OPERATING: Moody's Lowers Corporate Family Rating to B3 ------------------------------------------------------------- Moody's Investors Service downgraded Emmis Operating Company's corporate family rating to B3 from B2 due to the expected decline in revenue from the company's KPWR-FM station in Los Angeles as a result of a new direct competitor to this station and the loss of key talent to the competitor. Moody's also downgraded the senior secured credit facilities to B3 from B2, the probability of default rating to Caa1-PD from B3-PD, and the speculative grade liquidity rating to SGL-3 from SGL-2. The rating outlook is stable. On April 21, 2015, the company announced plans to amend its credit agreement to include the relaxation of its total leverage maintenance covenants through February 28, 2017 which will provide an acceptable EBITDA cushion over this period absent greater than expected revenue losses in Los Angeles or other key markets. Issuer: Emmis Operating Company Downgrades: -- Corporate Family Rating: Downgraded to B3 from B2 -- Probability of Default Rating: Downgraded to Caa1-PD from B3-PD -- $20mm Senior Secured 1st Lien Revolving Credit Facility due 2019 ($8 million outstanding): Downgraded to B3, LGD3 from B2, LGD3 -- Senior Secured 1st Lien Term Loan due 2021 ($185 million outstanding): Downgraded to B3, LGD3 from B2, LGD3 -- Speculative Grade Liquidity (SGL): Downgraded to SGL-3 from SGL-2 Outlook: -- Outlook is Stable Emmis Communications Corporation, parent company of Emmis Operating Company ("Emmis"), derives approximately 20% of its radio segment revenue from KPWR-FM (Power 106) station in Los Angeles. We expect cash flow for this station to decline more than 17% due to the loss of its successful morning talent, "Big Boy", to a recently-launched competing station in Los Angeles owned by iHeartCommunications, Inc. The expected revenue drop in Los Angeles and continued weakness in the New York market, which negatively impacts Emmis' New York stations, are estimated to result in debt-to-EBITDA increasing to roughly 6.3x (including Moody's standard adjustments) over the next 12 months and free cash flow-to-debt declining to less than 1%, both of which fall outside Moody's thresholds for a B2 rating. The proposed amendment relaxes the company total leverage test through February 28, 2017, after which financial covenants are unchanged. We will monitor the company's performance closely as there would be further downward pressure on debt ratings to the extent the company's overall performance falls below our revised expectations due to greater than expected revenue declines in Los Angeles or unexpected weakness in other key markets for Emmis. Liquidity is expected to be adequate with at least $10 million of revolver availability and improving free-cash flow-to-debt. The stable outlook reflects Moody's view that the downgrade of Emmis' corporate family rating to B3 adequately reflects the company's credit risk and our expectation that the company will track to its operating plan over the next 12-18 months with debt-to-EBITDA ratios improving from initial levels. We anticipate low-single digit revenue growth over the next 12-18 months and mid-single digit free cash flow-to-debt ratios (including Moody's standard adjustments). The outlook does not incorporate debt financed acquisitions or significant investments or shareholder distributions over the next 12 months. Ratings could be downgraded if debt-to-EBITDA is sustained above 6.75x (including Moody's standard adjustments) due to underperformance in one or more key radio markets as a result of heightened competition or economic weakness or due to unexpected losses in the publishing segment, debt financed acquisitions, or investments. Ratings could also be downgraded if liquidity were to deteriorate further resulting in free cash flow-to-debt being sustained in the low single digit percentage range (including Moody's standard adjustments), limited revolver availability, or deterioration in the EBITDA cushion to financial covenants after the amendment. Revenue concentration in two markets weighs on ratings; however, we could consider a rating upgrade if debt-to-EBITDA is sustained comfortably below 5.0x. Enhanced liquidity, including low double digit percentage free cash flow-to-debt, and increasing EBITDA cushion to financial maintenance covenants will also be required for an upgrade. 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. Headquartered in Indianapolis, IN, Emmis Operating Company owns or operates 19 FM and four AM radio stations, including one FM station under an LMA with ESPN/Disney, serving New York, Los Angeles, St. Louis, Austin (50.1% controlling interest), Indianapolis, and Terre Haute. The company also publishes six city and regional magazines. Jeffrey Smulyan, Chairman, CEO and President, owns roughly 16% of the economic interest in the company and controls approximately 61% of voting power through a dual class share structure. Emmis reported total net revenue of approximately $231 million for the 12 months ended November 2014. ENGLOBAL CORP: Board Approves Stock Repurchase Program ------------------------------------------------------ ENGlobal's Board of Directors has authorized the repurchase of up to $2 million of the Company's Common Stock. Shares may be repurchased through open market or privately negotiated transactions, based on prevailing market conditions. The buyback program will be executed with internally generated corporate funds and the shares acquired will be retired and returned to the status of authorized but unissued. On April 16, 2015, ENGlobal, ENGlobal U.S., Inc., a Texas corporation, ENGlobal Government Services, Inc., ENGlobal International, Inc., and ENGlobal Emerging Markets, Inc., entered into the First Amendment to the Loan and Security Agreement, which amends the Loan and Security Agreement dated as of Sept. 16, 2014, with Regions Bank, an Alabama bank. Pursuant to the First Amendment, the Lender agreed, among other things, to amend the following: (1) the repayment date for outstanding interest from the first day to the second day of each calendar month for the immediately preceding calendar month or portion thereof; (2) the disposition of assets restrictive covenant to allow the Loan Parties to sell, restructure or otherwise dispose of certain long-term notes receivable from a subsidiary of Furmanite Corporation in the same manner as permitted with respect to long-term notes receivable from Steele Land and Inspection, LLC and from Aspen Power, LLC and Aspen Pipeline, LP; and (3) the restricted payments restrictive covenant to permit the Company to repurchase up to $2 million of Equity Interests subject to other terms and conditions set out in the First Amendment. About ENGlobal Houston-based ENGlobal Corporation (Nasdaq: ENG) is a provider of engineering and related project services primarily to the energy sector throughout the United States and internationally. ENGlobal operates through two business segments: Automation and Engineering. ENGlobal's Automation segment provides services related to the design, fabrication and implementation of advanced automation, control, instrumentation and process analytical systems. The Engineering segment provides consulting services for the development, management and execution of projects requiring professional engineering, construction management, and related support services. ENGlobal reported net income of $6.03 million on $107.9 million of operating revenues for the year ended Dec. 27, 2014, compared with a net loss of $2.98 million on $169 million of operating revenues for the year ended Dec. 28, 2013. As of Dec. 27, 2014, the Company had $51.7 million in total assets, $22.6 million in total liabilities, and $29.03 million in total stockholders' equity. * * * This concludes the Troubled Company Reporter's coverage of ENGlobal Corporation until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. ERESEARCH TECHNOLOGY: Moody's Affirms B2 Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service, Inc. confirmed eResearch Technology, Inc.'s ("ERT") ratings, including the B2 Corporate Family rating, B2-PD Probability of Default rating, and B1 senior secured 1st lien bank debt ratings. Moody's also assigned B2 ratings to ERT's proposed senior secured revolving credit facility due 2021 and term loan due 2022. The rating outlook was revised to stable. These actions conclude the rating review initiated on March 3, 2015. On Feb. 27, 2015, ERT announced it plans to purchase PHT Corporation ("PHT"), a provider of technology solutions for clinical research programs. The proceeds of the proposed senior secured credit facilities and cash will be used to purchase PHT, refinance existing indebtedness and pay related fees and expenses. Ratings on the existing senior secured 1st lien revolving credit facility due 2017 and term loan due 2018 will be withdrawn when they are repaid. Issuer: eResearch Technology, Inc. Actions -- Corporate Family Rating, confirmed at B2 -- Probability of Default Rating, confirmed at B2-PD -- Senior Secured Bank Credit Facility due 2017 and 2018, confirmed at B1 (LGD3) -- Proposed Senior Secured Bank Credit Facility due 2021 and 2022, rated B2 (LGD3) Outlook: -- Outlook, Changed To Stable from Rating Under Review The B2 CFR reflects Moody's expectations for moderately high debt to EBITDA to decline towards below 5 times by the end of 2016 and free cash flow to debt to remain above 5%. Although the merger of ERT's electronic clinical outcome assessment ("eCOA") product offerings with those of PHT could result in one of the largest players in this niche market, overall revenue size remains small at just under $300 million expected in 2015. There is customer concentration with large pharmaceutical companies. Merger integration matters also increase near term business risk. Revenue growth could remain challenging in the cardiac safety and respiratory efficacy service lines, although Moody's expects steady demand for services to new drug trials. ERT's backlog has expanded in the last twelve months, providing support for Moody's 5% to 7% annual revenue growth expectations. Liquidity from the $45 million revolver, at least $10 million of free cash flow and $10 million in cash balances is considered adequate. All financial metrics reflect Moody's standard adjustments. The stable ratings outlook reflects Moody's anticipation of slow but steady financial leverage declines driven by mid single digit revenue and EBITDA growth and steady 23% EBITA margins. A downgrade could occur if 1) revenues do not grow; 2) profitability declines; 3) liquidity deteriorates or 4) Moody's expects shareholder friendly financial policies. The ratings could be upgraded if ERT can grow and diversify its revenue base while maintaining conservative financial policies. If Moody's expects debt to EBITDA to be maintained below 3.75 times and free cash flow to debt to remain in excess of 8%, the ratings could be raised. 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. ERT is a provider of cardiac safety, respiratory efficacy and eCOA solutions to pharmaceutical and healthcare organizations sponsoring or involved in the clinical trial of new drugs that is owned by affiliates of Genstar Capital. Moody's expects pro forma 2015 revenues including a full year of PHT to be nearly $300 million. ERESEARCH TECHNOLOGY: S&P Affirms 'B' CCR, Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on eResearch Technology Inc. The outlook is stable. At the same time, S&P assigned a 'B' issue-level rating and '3' recovery rating to ERT's $510 million senior secured credit facility that includes a $45 million revolver. The recovery rating of '3' indicates S&P's expectation of meaningful (50% to 70%; at the lower end of the range) recovery in the event of a payment default. S&P will withdraw the existing issue-level rating on ERT's current debt once it is repaid with the proceeds from the new facility. "Our rating on ERT continues to reflect the company's leverage in excess of 5x and its small scale and narrow range of services; however, these weaknesses are partially offset by ERT's leading market positions within each of its three niche business segments," said Standard & Poor's credit analyst Maryna Kandrukhin. S&P's assessment of ERT's business risk profile considers its narrow focus and small size. In addition, despite the company's leading positions within all three of its business segments, ERT operates in very niche markets. While S&P expects the acquisition of PHT to strengthen ERT's position within the eCOA space, it has a limited impact on S&P's assessment of the company's business risk profile as "weak" given PHT's relatively small size. Further supporting S&P's assessment is ERT's customer concentration. Its largest customer accounted for more than 15% of total revenues in 2014, and a loss of such a customer would have substantial adverse effects on the company's operations. At the same time, ERT benefits from favorable industry demand trends, especially in cardiac safety. Testing for cardiac safety is usually required as part of the drug approval process because issues with cardiac safety are the leading reason for drug recalls and biopharma customers are increasingly willing to outsource this type of work. S&P's assessment of ERT's financial risk is supported by S&P's expectations that adjusted leverage will be sustained above 5.0x and funds from operations (FFO) to total debt will remain in the low-teens in 2015-2016, consistent with a "highly leveraged" financial risk profile range. It also reflects S&P's expectation that the company will remain acquisitive over the next few years, and that it may use internally generated cash flow and debt capacity to fund dividends precluding any meaningful improvement in credit ratios. S&P's stable rating outlook on ERT reflects S&P's expectation that the company's stable revenue and EBITDA growth will result in ample discretionary cash flow. However, S&P expects the company will use internally generated cash and debt capacity to reward shareholders and to pursue acquisitions, maintaining a "highly leveraged" financial risk profile. S&P could consider a lower rating if the company experiences a sharp decrease in demand that results in a double-digit revenue decline and an EBITDA margin contraction in excess of 700 basis points. This would cause leverage to peak well above 6x and likely result in negative free operating cash flow. S&P could consider a higher rating if the company can reduce leverage to below 5x on a sustained basis, which would require a less aggressive financial policy than S&P currently expects. The improvement could be reached if the company achieves high-single-digit revenue growth coupled with a 300-basis-point EBITDA margin expansion in 2016. Under this scenario, S&P would also expect the company to continue to generate FFO to total debt in the midteens, and positive discretionary cash flow after accounting for capital expenditures. ERF WIRELESS: Still Working to Complete Form 10-K ------------------------------------------------- ERF Wireless, Inc. failed to complete and file on April 15, 2015, its Form 10-K for the fiscal Year ending Dec. 31, 2014, due to lack of adequate financial resources. "We will continue the work required to complete and file our Form 10-K for Fiscal Year 2014 and intend to file it as soon as practical after we have adequate financial resources to do so," the Company said. About ERF Wireless Based in League City, Texas, ERF Wireless, Inc., provides secure, high-capacity wireless products and services to a broad spectrum of customers in primarily underserved, rural and suburban parts of the United States. ERF Wireless reported a net loss attributable to the company of $7.26 million in 2013, a net loss of $4.81 million in 2012, and a net loss of $3.37 million in 2011. As of Sept. 30, 2014, the Company had $3.59 million in total assets, $10.4 million in liabilities, and a $6.84 million shareholders' deficit. ESSAR STEEL: S&P Lowers CCR to 'CCC+' on Weaker Liquidity --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Canada-based steel producer Essar Steel Algoma Inc. (ESA) to 'CCC+' from 'B-'. The outlook is negative. At the same time, Standard & Poor's lowered its issue-level rating on the company's senior secured asset-based revolving facility (ABL) and term loan to 'B' from 'B+'. The '1' recovery rating on the debt is unchanged, indicating an expectation of very high (90%-100%) recovery in a default scenario. In addition, Standard & Poor's lowered its issue-level rating on the company's senior secured notes to 'B-' from 'B+' and revised its recovery rating to '2' from '1'. A '2 recovery rating indicates an expectation of substantial (70%-90%; in the high end of the range) recovery. Finally, Standard & Poor's lowered its issue-level rating on ESA's junior secured notes to 'CCC-' from 'CCC+', and revised its recovery rating on the debt to '6' from '5'. A '6' recovery indicates an expectation of negligible (0%-10%) recovery in default. "Our downgrade of ESA follows the sharp deterioration in North American steel prices, which have declined by about 30% since late 2014," said Standard & Poor's credit analyst Jarrett Bilous. "Excess industry capacity, notably from high steel inventories and imports, soft demand, and relative U.S.-dollar strength are key contributors to the price weakness, which is showing no signs of abating in the near term," Mr. Bilous added. Based on the company's modest cash position and credit availability, S&P believes ESA will have limited flexibility to fund its operations (including working capital) over the next 12 months absent an improvement in steel prices from current depressed levels. As a result, S&P now assess the company's liquidity position as "less than adequate" -- S&P's previous downside rating trigger. S&P believes ESA is vulnerable and dependent on favorable business, financial, and economic conditions to meet its financial commitments over the next 12 months -- consistent with S&P's criteria for issuers it rates 'CCC+'. S&P expects steel price volatility will persist throughout 2015, and S&P's base-case scenario assumes average prices will increase above the current spot market level. In S&P's view, hot-rolled steel prices, which recently surpassed a five-year low, are not sustainable in the long term at the prevailing price mainly because of the domestic industry's cost structure. In addition, S&P expects ESA to benefit from a material improvement in operating costs, notably as it realizes lower raw material costs. That said, the timing of an eventual steel price rebound is unknown, and S&P believes further near-term price declines would significantly impair ESA's financial flexibility. S&P continues to view ESA's business risk profile as "vulnerable," based primarily on S&P's view of the company's high exposure to historically volatile steel industry conditions and limited operating diversity. ESA mainly manufactures flat-rolled carbon steel, which makes up about 80% of total shipments, and competes in cyclical and capital-intensive end markets. A large share of its steel production is commodity hot-rolled sheet, which limits differentiation from competitions. Nearly all of ESA's production is sold at spot prices or short-term contracts based on spot prices rather than at fixed prices. Based on the recent sharp decline in prices, S&P no longer expects ESA's profitability to improve over the coming year. S&P views the company's financial risk profile as "highly leveraged" based on ESA's high debt load and significant sensitivity to volatile steel prices. The negative outlook primarily reflects the potential for a downgrade if ESA's liquidity declines further in 2015. In S&P's view, weaker liquidity would likely result from steel prices remaining near or below currently depressed levels, regardless of an improvement in operating costs. S&P could lower the ratings on ESA if the company's liquidity deteriorates to the point where S&P believes the company may not be able to fund its financial commitments over the corresponding 12 months. In this scenario, S&P would expect steel prices to remain near or below current levels through much of 2015, leading to a fixed charge coverage ratio below 1x and a "weak" liquidity assessment. A positive rating action could result from an improvement in S&P's assessment of ESA's liquidity to "adequate," which S&P assumes would require a sustained increase in steel prices through 2015 alongside a reduction in production costs and stable or higher shipment levels. EVERYWARE GLOBAL: Plan & Disclosure Statement Hearing on May 20 --------------------------------------------------------------- Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware will convene a combined hearing on the adequacy of EveryWare Global, Inc., et al.'s Disclosure Statement and confirmation of the joint prepackaged Chapter 11 plan of reorganization on May 20, 2015, at 2:00 p.m., prevailing Eastern Time. Any objections to the Disclosure Statement or confirmation of the Plan must be filed by May 8 and any replies to the objections must be filed by May 13. The Plan provides that: -- Holders of administrative claims, professional claims and priority tax claims will be paid in full in cash. Recovery will be 100%. -- The entire $248.7 million Term Loan Facility will be converted for 96.0% of the Reorganized Debtors' new equity. Holders of these claims are projected to have a 44% recovery. -- Holders of allowed general unsecured claims estimated to total $87 million will be paid in full in cash. holders of these claims are to recover 100%. -- Holders of EveryWare preferred stock and common stock will receive an aggregate tip of 4.0% of the new common stock, provided equity holders continue to support the transaction. Christina Pullo, the senior director of solicitation at Prime Clerk LLC, filed an affidavit stating that 100% of the holders of term loan facility claims, which is the only class of claim allowed to vote on the Plan, voted to accept the Plan. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/EVERYWAREds0408.pdf A full-text copy of the Plan is available at http://bankrupt.com/misc/EVERYWAREplan0409.pdf About EveryWare Global Headquartered in Lancaster, Ohio, EveryWare (Nasdaq:EVRY) is a marketer of tabletop and food preparation products for the consumer and foodservice markets, with operations in the United States, Canada, Mexico and Asia. The company has more than 1,500 personnel throughout the United States. Sales and marketing functions are managed from executive offices in Lancaster, Ohio, with staff located in Melville, New York, New York City, and Oneida, New York. The primary operating subsidiaries, Oneida Ltd. and Anchor Hocking, LLC, were founded in 1848 and 1873, respectively. In 2011, investment funds affiliated with the Monomoy Capital Partners completed their acquisition of these companies and, in March 2012, integrated them under the EveryWare brand. In May 2013, a merger was completed where EveryWare became a wholly-owned subsidiary of ROI Acquisition Corp. ("ROI"), a special purpose acquisition company sponsored by affiliates of the Clinton Group, Inc., and ROI was renamed EveryWare Global Inc. As of Sept. 30, 2014, EveryWare reported assets of $238 million and liabilities of $380 million. EveryWare Global, Inc., commenced a Chapter 11 bankruptcy case to implement a prepackaged financial restructuring that converts $248 million of the long-term debt to 96% of the common stock of the company post-emergence. EveryWare Global filed its Chapter 11 petition (Bankr. D. Del.) on April 7, 2015, and 12 affiliated debtors filed petitions on April 8, 2015. The cases are pending before Judge Laurie Selber Silverstein, and the debtors are seeking joint administration under Case No. 15-10743. The Debtors tapped Kirkland & Ellis LLP, as general bankruptcy counsel; Pachulski Stang Ziehl & Jones LLP, as local bankruptcy counsel; Jefferies LLC, as financial advisor; Alvarez & Marsal North America, LLC, to provide a CRO and Interim VP of Finance; and Prime Clerk LLC as claims and noticing agent. EVERYWARE GLOBAL: Reports $120-Mil. Net Loss in 2014 ---------------------------------------------------- EveryWare Global, 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. The Company reported a net loss of $120 million on $354 million in revenues for the year ended Dec. 31, 2014, compared to a net loss of $17.4 million on $408 million of revenues in the same period last year. The Company's balance sheet at Dec. 31, 2014, showed $234 million in total assets, $391 million in total liabilities, and a stockholders' deficit of $180 million. Weinberg & Company P.A. expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-K is available at: http://is.gd/kL2R6z About EveryWare Global Headquartered in Lancaster, Ohio, EveryWare (Nasdaq:EVRY) is a marketer of tabletop and food preparation products for the consumer and foodservice markets, with operations in the United States, Canada, Mexico and Asia. The company has more than 1,500 personnel throughout the United States. Sales and marketing functions are managed from executive offices in Lancaster, Ohio, with staff located in Melville, New York, New York City, and Oneida, New York. The primary operating subsidiaries, Oneida Ltd. and Anchor Hocking, LLC, were founded in 1848 and 1873, respectively. In 2011, investment funds affiliated with the Monomoy Capital Partners completed their acquisition of these companies and, in March 2012, integrated them under the EveryWare brand. In May 2013, a merger was completed where EveryWare became a wholly-owned subsidiary of ROI Acquisition Corp. ("ROI"), a special purpose acquisition company sponsored by affiliates of the Clinton Group, Inc., and ROI was renamed EveryWare Global Inc. As of Sept. 30, 2014, EveryWare reported assets of $238 million and liabilities of $380 million. EveryWare Global, Inc., commenced a Chapter 11 bankruptcy case to implement a prepackaged financial restructuring that converts $248 million of the long-term debt to 96% of the common stock of the company post-emergence. EveryWare Global filed its Chapter 11 petition (Bankr. D. Del.) on April 7, 2015, and 12 affiliated debtors filed petitions on April 8, 2015. The cases are pending before Judge Laurie Selber Silverstein, and the debtors are seeking joint administration under Case No. 15-10743. The Debtors tapped Kirkland & Ellis LLP, as general bankruptcy counsel; Pachulski Stang Ziehl & Jones LLP, as local bankruptcy counsel; Jefferies LLC, as financial advisor; Alvarez & Marsal North America, LLC, to provide a CRO and Interim VP of Finance; and Prime Clerk LLC as claims and noticing agent. FAIRFAX FINANCIAL: Moody's Rates C$200MM M Shares 'Ba2(hyb)' ------------------------------------------------------------ Moody's Investors Services assigned a Baa3 rating to C$350 million of senior unsecured notes and a Ba2(hyb) rating to C$200 million of Series M preferred shares being issued by Fairfax Financial Holdings Limited (Fairfax; TSE: FFH). Proceeds from the senior notes offering and Series M preferred shares offering are expected to be used to partially fund the previously announced proposed acquisition of Brit plc. The rating outlook for Fairfax is stable. Fairfax's ratings reflects the group's diversified revenue stream by product and geography, a well established market position in reinsurance (via Odyssey Re Holdings Corp., Baa3 senior, stable), and a high level of cash and marketable investments at the parent-company level. Several credit challenges remain significant to the rating, including weak profitability, exposure to catastrophe risks, volatility associated with long-tail casualty business, a high level of common stock investments and risks associated with Fairfax's investment strategy. Key man risk and management succession is also a consideration given the instrumental role played by CEO Prem Watsa in Fairfax's strategic direction, investment philosophy and corporate culture. Factors that could lead to an upgrade of Fairfax's ratings: 1) adjusted financial leverage consistently less than 30% and earnings coverage consistently above 4x; 2) aggregate combined ratios consistently less than 100%; and 3) an upgrade of the standalone credit profile of the company's lead operating P&C and/or reinsurance companies. Factors that could lead to a downgrade of the ratings: 1) substantial reduction of holding company liquidity to less than $750 million (or less than 3x coverage of fixed charges); 2) adjusted financial leverage consistently above 35% and earnings coverage consistently less than 2x; 3) a return on capital in the low single digits range for a sustained period; 4) significant adverse reserve development (greater than 2% of net reserves); and/or 5) a downgrade of the standalone credit profile of the company's lead operating P&C and/or reinsurance companies. A material expansion of the group's investments in stressed or turnaround assets as a proportion of shareholder's equity could also lead to downward pressure on the rating. The following ratings have been assigned: -- Fairfax Financial Holdings Limited: senior unsecured regular bond/debenture at Baa3; cumulative preferred shares series M at Ba2(hyb). The following provisional ratings have been assigned: -- Fairfax Financial Holdings Limited: provisional senior unsecured at (P)Baa3; provisional subordinated debt at (P)Ba1; provisional cumulative preferred shares (P) Ba2; provisional non-cumulative preferred shares at (P)Ba2. Fairfax Financial Holdings Limited is headquartered in Toronto, Canada. For 2014, Fairfax reported net premiums written of $6.3 billion and net income of $1.7 billion. As of 31 December 2014, shareholders' equity was $9.7 billion. The methodologies used in these ratings were Global Property and Casualty Insurers published in August 2014, and Global Reinsurers published in October 2014. FCC HOLDINGS: S&P Lowers ICR to 'CCC' on Announced Asset Sale ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issuer credit and senior unsecured ratings on FCC Holdings LLC to 'CCC' from 'CCC+'. The outlook on the issuer credit rating is negative. The downgrade follows FCC Holdings' signing of a definitive agreement to sell its asset-based lending (ABL) portfolio to an affiliate of Ares Management L.P during the second quarter of 2015. "We believe the sale is a significant step in FCC's strategy to wind down its loan portfolio and repay its lenders," said Standard & Poor's credit analyst Igor Koyfman. "The ABL assets represent about three-quarters of the company's total assets and have been funded through two secured revolving credit lines and one term securitization, which we expect will largely be repaid concurrently with the transaction." After the transaction closes, S&P expects that FCC's loan portfolio will primarily consist of traditional factoring facilities and invoice purchasing loans. Assuming an orderly liquidation, S&P believes FCC will be able to pay down its high-yield senior unsecured debt, which has an outstanding balance of about $87 million. However, since these notes mature in December 2015, S&P believes the timing of loan sales and the repayment of debt introduces additional risk. The negative outlook reflects S&P's expectation that the company will seek to liquidate assets in order to repay its high-yield loan within the next 12 months. Liquidity could become an issue if the assets don't generate ample proceeds to repay the notes, which are due in December 2015. The outlook also incorporates the possibility that credit quality could deteriorate as the firm winds down its portfolio. S&P could downgrade FCC if the company experiences credit losses beyond S&P's expectations or if it is unable to refinance or repay its existing senior unsecured notes by December 2015. Given the current challenges FCC faces, S&P does not anticipate taking a positive rating action on the company in 2015. Still, S&P could raise its rating if the company gets new financing and resumes lending. FRESH PRODUCE: Court Issues Joint Administration Order ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado issued an order directing joint administration of the Chapter 11 cases of Fresh Produce Holdings, LLC, Fresh Produce Retail, LLC, Fresh Produce Sportswear, LLC, Fresh Produce of St. Armands, LLC, FP Brogan - Sanibel Island LLC, and Fresh Produce Coconut Point, LLC, under lead case no. 15-13485. About Fresh Produce Fresh Produce Holdings, LLC, commenced a Chapter 11 bankruptcy case (Bankr. D. Col. Case No. 15-13485) in Denver, Colorado, on April 4, 2015, without stating a reason. Boulder, Colorado-based Fresh Produce -- http://www.freshproduceclothes.com/-- designs, develops and markets women's apparel and accessories. The company says its collections of tops, pants, skirts and dresses feature a signature garment dye process with more than 80 percent produced right here in the USA. It says products are available in 26 company-owned boutiques located across the United States, as well as 400 independent retail locations. The Debtor estimated $10 million to $50 million in assets and debt in its Chapter 11 petition. The Debtor is represented by Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, in Denver. The case is assigned to Judge Sidney B. Brooks. The Debtor's subsidiary earlier commenced bankruptcy cases on April 2, 2015: FP Brogan-Sanibel Island, LLC (Case No. 15-13420), Fresh Produce Coconut Point, LLC (Case No. 15-13421), Fresh Produce of St. Armands, LLC (Case No. 15-13417), Fresh Produce Retail, LLC (15-13415), and Fresh Produce Sportswear, LLC (15-13416). FRESH PRODUCE: Seeks to Conduct Going-Out-of-Business Sales ----------------------------------------------------------- Fresh Produce Holdings, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Colorado to enter into an agency agreement for Yellen Partners, LLC, to conduct going-out-of-business sales. Under the agency agreement, Yellen will pay to the Debtor a guaranteed payment of 86% of the aggregate cost value of the merchandise being sold. The current expectation is that this will result in a guaranteed payment to the Debtor of approximately $5.6 million, based on projected inventory levels at closing. In the event that proceeds from the sale exceed the guaranteed payment plus expenses and a 6% sales commission to the stalking horse liquidator, the Debtor will receive 60% of any additional excess proceeds. In addition, the stalking horse liquidator will liquidate the Debtor's fixtures, furniture and equipment, as well as non-finished good and non-first quality inventory, for a 15% commission. In exchange for its willingness to serve as a stalking horse bidder, if another liquidator is chosen to conduct the GOB sales, Yellen will be entitled to a $70,000 break-up fee and an expense reimbursement of up to $20,000. Landlord Creditors CityPlace Retail L.L.C. and The Prudential Insurance Company of America filed a limited objection to the proposed GOB sales, complaining that the bid deadline and auction dates, which were not provided for in the motion, should be calendared to provide the landlords with sufficient time to address issues relating to the GOB sale guidelines with a liquidator and/or assess the adequate assurance of future performance information of a prospective assignee. The Landlord Creditors are represented by: Brian D. Huben, Esq. Dustin P. Branch, Esq. KATTEN MUCHIN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90067-3012 Tel: (310) 788-4400 Fax: (310) 788-4471 E-mail: brian.huben@kattenlaw.com dustin.branch@kattenlaw.com About Fresh Produce Fresh Produce Holdings, LLC, commenced a Chapter 11 bankruptcy case (Bankr. D. Col. Case No. 15-13485) in Denver, Colorado, on April 4, 2015, without stating a reason. Boulder, Colorado-based Fresh Produce -- http://www.freshproduceclothes.com/-- designs, develops and markets women's apparel and accessories. The company says its collections of tops, pants, skirts and dresses feature a signature garment dye process with more than 80 percent produced right here in the USA. It says products are available in 26 company-owned boutiques located across the United States, as well as 400 independent retail locations. The Debtor estimated $10 million to $50 million in assets and debt in its Chapter 11 petition. The Debtor is represented by Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, in Denver. The case is assigned to Judge Sidney B. Brooks. The Debtor's subsidiary earlier commenced bankruptcy cases on April 2, 2015: FP Brogan-Sanibel Island, LLC (Case No. 15-13420), Fresh Produce Coconut Point, LLC (Case No. 15-13421), Fresh Produce of St. Armands, LLC (Case No. 15-13417), Fresh Produce Retail, LLC (15-13415), and Fresh Produce Sportswear, LLC (15-13416). GENCORP INC: Moody's Affirms 'B1' Corp. Family Rating, Outlook Neg. ------------------------------------------------------------------- Moody's Investors Service raised the Speculative Grade Liquidity Rating of GenCorp, Inc. to SGL-2 from SGL-3. The other ratings, including the B1 Corporate Family Rating, have been affirmed, and the outlook remains negative. Issuer: GenCorp Inc. -- Speculative Grade Liquidity Rating, raised to SGL-2 from SGL-3 -- Probability of Default Rating, Affirmed B1-PD -- Corporate Family Rating, Affirmed B1 -- Subordinate Conv./Exch. Bond/Debenture, Affirmed B3 (LGD6) -- Senior Secured Regular Bond/Debenture, Affirmed Ba3 (LGD3) -- Outlook, Remains Negative The SGL-2 reflects a good, rather than an adequate liquidity profile as GenCorp's cash balance will likely remain above $200 million near-term, covenant headroom should remain good, and the RD Amross acquisition seems unlikely to proceed (and thereby consume cash) before the deal's June expiration date. GenCorp's alternate liquidity sources improved with the announced $57 million sale of 703 entitled acres, which is expected to generate $41 million of cash proceeds at closing. GenCorp's Easton Development Company, LLC, which has been re-zoning and entitling the land for development, will possess 5,300 entitled acres following the pending transaction. The negative rating outlook nonetheless continues because organic revenues have declined in the past year, debts have risen since the (June 2013) Rocketdyne acquisition, and competition is rising within the space launch business. Organic revenues declined 14% in the fiscal year ended November 30, 2014 and GenCorp has added debt to repurchase both its stock and (in-the-money) convertible notes. It is unclear whether or not GenCorp will reduce enough debt near-term to materially improve its credit metrics. Credit metrics and funds from operations are lackluster for the B1 CFR. Debt/EBITDA was 7.6x at 2/28/15 (about 6.0x excluding Moody's pension plan adjustment) with EBIT/Interest of 1.2x. GenCorp has derived about a quarter of its revenues from United Launch Alliance and competitive intensity within some of those programs appears to be rising with newcomers such as Space Exploration Technologies Corp and Blue Origin LLC. The B1 CFR benefits from backlog growth since the 2013 fiscal year, good liquidity, and the expectation that GenCorp will deploy its free cash flow for debt reduction rather than stock repurchases near-term. Likelihood of debt reduction from the Easton Development LLC land sale proceeds and excess cash on hand also supports the rating as does the gradually improving defense contracting environment where better budget visibility should help operators. The planned multi-year operational improvement plan that GenCorp recently announced will add restructuring costs, but should help GenCorp's competitiveness if well implemented. The CFR recognizes that GenCorp is the leading rocket propulsion company in the US and propulsion technologies represent a critical part of national defense and space systems. The company's content covers many space/national defense programs, including tactical and ballistic missile programs as well as launch vehicles. While competition is rising among military launch vehicles, the US government's aim to source domestically (rather than Russian) made propulsion systems does offer GenCorp an opportunity to expand its market share. The rating would likely be downgraded if a debt reduction of around $80 million to $100 million by mid-2016 seems unlikely, if revenues contract more than 5% year-over-year, if EBITDA margin (Moody's adjusted, including restructuring costs) declines below 10%, or if backlog materially weakens. Upward rating momentum, unanticipated at present, would depend on good liquidity, debt/EBITDA sustained at the low 4x level with free cash flow to debt above 10%. The principal methodology used in these ratings was Global Aerospace and Defense Industry published in April 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GenCorp Inc., produces propulsion systems for defense and space applications and armament systems for precision tactical and long range weapon systems. Revenues for the fiscal year ended Nov. 31, 2014 were $1.6 billion. GILLA INC: Auditor Expresses Going Concern Doubt ------------------------------------------------ Gilla Inc. reported a net loss of $3.1 million on $117,000 of net revenue for the year ended Dec. 31, 2014, compared with a net loss of $1.5 million on $15,400 of net revenue in the prior year. Schwartz, Levitsky, Feldman, LLP, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has limited revenues and expects to continue to incur significant expenses from operations. The Company's future success is dependent upon its ability to raise sufficient capital, not only to cover its operating expenses, but also to continue to develop and be able to profitably market its products. The Company's balance sheet at Dec. 31, 2014, showed $1.09 million in total assets, $2.64 million in total liabilities and total stockholders' deficit of $1.55 million. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/MACnV9 Carson City, Nev.-based Gilla Inc. is a mineral-property development company specializing in acquiring and consolidating mineral properties with production potential and future growth through exploration discoveries. Acquisition and development emphasis has been focused on properties containing gold and other strategic minerals that are located in Africa. The Company has 1 full time, and 2 part-time employees. GRIDWAY ENERGY: Plan Filing Date Extended to July 6 --------------------------------------------------- Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware further extended Gridway Energy Holdings, et al.'s exclusive plan filing period through and including July 6, 2015, and their exclusive solicitation period through and including Sept. 4, 2015. According to the Debtors’ counsel, Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, the Debtors need the additional time for the Court to conclude the hearing on the settlement agreement with Platinum Partners Value Arbitrage Fund LP, and its designee, Agera Energy LLC. Mr. Bowman related that the Debtors withdrew their motion to convert their bankruptcy cases to Chapter 7 following the settlement agreement with Platimum and Agera, which addressed the funding issues enabling the Debtors to continue in Chapter 11 and wind down the Debtors’ businesses through either conversion or dismissal of the Chapter 11 Cases. The Agera Settlement Motion is scheduled to be heard on April 15, 2015. About Gridway Energy Gridway Energy Holdings, Inc., and its affiliates, including Glacial Energy Holdings -- providers of electricity and natural gas in markets that have been restructured to permit retail competition -- sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10833) on April 10, 2014. The Debtors have 200,000 electric residential customers and 55,000 gash residential customers across the U.S. A large portion of the customers' energy consumption and revenue is generated in the northeast U.S., Ohio, Illinois and Texas (collectively accounting for 80% of revenue), with the remaining portion coming from California and other states. The Debtors blamed the bankruptcy due to lower revenue brought by increased market competition, which caused the Debtors to default on certain of their obligations. Gridway defaulted on $60 million of debt. Prepetition, the Debtors negotiated a stock purchase transaction with an interested buyer. But in March 2014, the purchaser withdrew from the transaction because of the large amount of debt that the purchaser would become liable through a stock transaction. The Debtors are represented by Michael R. Nestor, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP; and Alan M. Noskow, Esq., and Mark A. Salzberg, Esq., at Patton Boggs LLP. They employed Omni Management Group, LLC, as claims and notice agent. Gridway Energy estimated assets of $500 million to $1 billion and debt of more than $1 billion. The Creditors' Committee is represented by Sharon Levine, Esq., and Philip J. Gross, Esq., at Lowenstein Sandler LLP; and Frederick B. Rosner, Esq., and Julia B. Klein, Esq., at The Rosner Law Group LLC. Vantage is represented in the case by Ingrid Bagby, Esq., David E. Kronenberg, Esq., Kenneth Irvin, Esq., and Karen Dewis, Esq., at Cadwalader, Wickersham & Taft LLP, and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. HALCON RESOURCES: Moody's Lowers Corp. Family Rating to Caa2 ------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to Halcon Resources Corporation's proposed offering of $500 million senior secured second lien notes due 2020. Moody's downgraded Halcon's Corporate Family Rating (CFR) to Caa2 from Caa1 and the senior unsecured notes ratings to Caa3 from Caa2. Moody's also downgraded the Probability of Default Rating (PDR) to Ca-PD from Caa1-PD, reflecting the high probability of default in the near term in light of the company's announcement of another debt for equity exchange. Moody's raised Halcon's Speculative Grade Liquidity Rating to SGL-3 from SGL-4, due to its adequate liquidity pro forma for the second lien issuance and expected amendment to its credit facility. The ratings outlook was changed to negative from stable. The proceeds from the proposed second lien notes offering will be primarily used to repay drawings under Halcon's existing senior secured revolving facility and for general corporate purposes. Halcon's assigned ratings are contingent upon successfully raising the approximately $500 million of second lien notes proceeds. In addition, Moody's expects Halcon to amend its credit facility to replace its minimum EBITDA to interest coverage covenant with a maximum secured debt to EBITDA covenant, providing sufficient room for future compliance and to draw on its revolver. Moody's ratings are subject to review of all final documentation related to this transaction. Moody's considers Halcon's offer under the proposed $70.7 million debt for equity exchange plan announced on April 16, 2015, cumulative with the $116.5 million debt for equity exchange closed on April 13, 2015 as a distressed exchange for its senior unsecured debt, which is an event of default under Moody's definition of default. Moody's expects Halcon's CFR to remain at Caa2 and the PDR to be revised to Caa2-PD at the close of the debt for equity exchange announced on April 16, 2015. Moody's will also append this revised Caa2-PD PDR with an "/LD" designation indicating limited default at the close of the debt for equity exchange, which will be removed three business days thereafter. "The second lien notes offering, combined with the debt-for-equity exchange that the company recently entered into with certain bondholders and is likely to enter into in the near-term, modestly improves Halcon's liquidity and leverage metrics," said Amol Joshi, Moody's Vice President. "However, the additional secured debt further subordinates the company's unsecured debt and the Caa2 CFR reflects Halcon's high risk of further debt impairment due to its very high leverage, while the company faces an uphill battle in reaching an appropriate level of leverage during this downturn." Assignments: Issuer: Halcon Resources Corporation -- $500MM Senior Secured Second Lien Notes, Assigned B2 (LGD2) Rating Actions: -- Corporate Family Rating, Downgraded to Caa2 from Caa1 -- Probability of Default Rating, Downgraded to Ca-PD from Caa1-PD -- Speculative Grade Liquidity Rating, Raised to SGL-3 from SGL-4 -- $1,150 million 9.75% sr unsecured notes due 2020 downgraded to Caa3 (LGD4) from Caa2 (LGD4) -- $1,350 million 8.875% sr unsecured notes due 2021 downgraded to Caa3 (LGD4) from Caa2 (LGD4) -- $400 million 9.25% sr unsecured notes due 2022 downgraded to Caa3 (LGD4) from Caa2 (LGD4) Outlook Actions: -- Outlook revised to Negative from Stable Halcon's Caa2 CFR reflects growing risk for the company's business profile because of high leverage and limited financial flexibility. Moody's expects Halcon's debt-to-average daily production metric to exceed $90,000 per barrel of oil equivalent (boe) per day and debt-to-proved developed (PD) reserves figure to exceed $45 per boe over the next 12 months. These leverage metrics do not incorporate improvement from any further reduction in debt through future debt-for-equity exchanges. Halcon's rating also reflects the elevated risk that the company will find difficulty in growing out of its levered capital structure as the reduced roughly $400 million capital expenditures budgeted for 2015 will impact production and EBITDA. Halcon's SGL-3 Speculative Grade Liquidity Rating reflects its adequate liquidity profile over the next 12 months. Pro forma for the second lien notes issuance as of December 31, 2014, Halcon has over $800 million of liquidity including cash and availability under its revolving credit facility with an expected $900 million borrowing base. Halcon's unsecured notes are rated Caa3, which is one notch below the company's Caa2 CFR. This notching reflects the priority claim given to the senior secured revolving credit facility and the proposed second lien notes. The proposed second lien notes are rated B2, three notches above Halcon's CFR, reflecting its priority claim over the unsecured notes. However, the proposed second lien notes could get downgraded if the proportion of secured debt relative to unsecured debt in the capital structure is increased by a significant amount. The negative rating outlook reflects the company's potentially worsening leverage metrics and its challenges to maintain current production levels and replace reserves, given low oil prices and reduced capital expenditures. The outlook could return to stable if Halcon sufficiently improves its capital structure and leverage metrics through additional debt exchanges and equity raises. A downgrade is possible if liquidity falls below $200 million or if Halcon's production volumes were to decline more than anticipated. An upgrade will not be considered until the company achieves a substantial reduction in debt resulting in a more sustainable capital structure. Retained cash flow to debt sustained above 10% combined with adequate liquidity could result in a ratings upgrade. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Halcon Resources Corporation is an independent exploration and production (E&P) company focused on onshore oil and gas production in unconventional liquids-rich basins and fields. The company primarily operates in North Dakota and Texas and has its headquarters in Houston, Texas. HALCON RESOURCES: Plans to Offer $500 Million Senior Notes ---------------------------------------------------------- Halcon Resources Corporation announced that, subject to market conditions, it intends to offer $500 million in aggregate principal amount of senior secured notes due 2020. The Notes will be secured by second-priority liens on substantially all of Halcon's and its subsidiary guarantors' assets that secure the Company's senior secured revolving credit facility. Halcon intends to use the net proceeds from the offering to repay a portion of the outstanding borrowings under its senior secured revolving credit facility and for general corporate purposes. The offering will be made only as a private placement to qualified institutional buyers pursuant to Rule 144A and to certain persons in offshore transactions pursuant to Regulation S, each under the Securities Act of 1933, as amended. About Halcon Resources Halcon Resources Corporation acquires, produces, explores and develops onshore liquids-rich assets in the United States. This independent energy company operates in the Bakken/Three Forks, El Halcon and Tuscaloosa Marine Shale formations. As of Sept. 30, 2014, Halcon Resources had $5.93 billion in total assets, $3.59 billion in total liabilities, $111 million in redeemable noncontrolling interest, and $1.51 billion in total stockholders' equity. * * * As reported by the TCR on Jan. 27, 2015, Moody's Investors Service downgraded Halcon's Corporate Family Rating to 'Caa1' from 'B3' and the Probability of Default Rating to 'Caa1-PD' from 'B3-PD'. The downgrade reflects growing risk for Halcon's business profile because of high financial leverage and limited liquidity as its existing hedges roll-off and stop contributing to its borrowing base over the next 12-18 months. In April 2015, Standard & Poor's Ratings Services lowered its corporate credit rating on Halcon Resources Corp. to 'CCC+' from 'B'. "The downgrade follows Halcon's announcement that it has entered into an agreement with holders of a portion of its senior unsecured notes to exchange the notes for common stock," said Standard & Poor's credit analyst Ben Tsocanos. "We do not view the transaction as a distressed exchange because investors received stock valued at more than what was promised on the original securities," said Mr. Tsocanos. HALCON RESOURCES: Preliminary Q1 2015 Production Results -------------------------------------------------------- Halcon Resources Corporation announced preliminary first quarter 2015 production results and provided additional updates. Halcon expects to report production for the three months ended March 31, 2015, of 42,500 - 43,500 barrels of oil equivalent per day (Boe/d). First quarter production is estimated to be ~81% oil, ~8% NGLs and ~11% natural gas. The Company estimates that it will record a non-cash pre-tax full cost ceiling impairment charge of $450 - $650 million in the first quarter of 2015. Halcon expects the following modifications to be made to its senior secured revolving credit facility, subject to the satisfaction of certain terms and conditions: * Removal of the interest coverage ratio covenant with the institution of a total secured leverage ratio covenant of 2.75x * Reduction of the borrowing base to $900 million from $1.05 billion The Company is also seeking to extend the maturity of its senior secured revolving credit facility to Aug. 1, 2019; however, there is no assurance that the extension will be available to Halcón on acceptable terms. The Company is currently operating three rigs across its holdings and currently has 23 wells being completed or waiting on completion. Halcon continues to be focused on reducing costs in the current commodity price environment. A copy of the press release is available for free at: http://is.gd/5oZZJv About Halcon Resources Halcon Resources Corporation acquires, produces, explores and develops onshore liquids-rich assets in the United States. This independent energy company operates in the Bakken/Three Forks, El Halcon and Tuscaloosa Marine Shale formations. As of Sept. 30, 2014, Halcon Resources had $5.93 billion in total assets, $3.59 billion in total liabilities, $111 million in redeemable noncontrolling interest, and $1.51 billion in total stockholders' equity. * * * As reported by the TCR on Jan. 27, 2015, Moody's Investors Service downgraded Halcon's Corporate Family Rating to 'Caa1' from 'B3' and the Probability of Default Rating to 'Caa1-PD' from 'B3-PD'. The downgrade reflects growing risk for Halcon's business profile because of high financial leverage and limited liquidity as its existing hedges roll-off and stop contributing to its borrowing base over the next 12-18 months. In April 2015, Standard & Poor's Ratings Services lowered its corporate credit rating on Halcon Resources Corp. to 'CCC+' from 'B'. "The downgrade follows Halcon's announcement that it has entered into an agreement with holders of a portion of its senior unsecured notes to exchange the notes for common stock," said Standard & Poor's credit analyst Ben Tsocanos. "We do not view the transaction as a distressed exchange because investors received stock valued at more than what was promised on the original securities," said Mr. Tsocanos. HALCON RESOURCES: S&P Assigns 'CCC' Rating on $500MM Sr. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'CCC' issue-level rating and '5' recovery rating to Halcon Resources Corp.'s planned $500 million senior second-lien secured notes. The 'CCC+' corporate credit rating and negative outlook on Halcon remain unchanged. The '5' recovery rating indicates S&P's expectation for modest (10%-30%; high end of the range) recovery in the event of a payment default. S&P's ratings on Halcon reflect limited reserves and production, high operating costs, an aggressive growth strategy, and participation in the volatile and capital intensive nature of the oil and gas industry. These weaknesses are adequately offset at the rating level by an oil-weighted reserve profile, an experienced management team, and extensive acreage holdings in multiple onshore liquids-rich U.S. basins. S&P's ratings also reflect its view of the company's substantial indebtedness and risks regarding the level and source of capital required to develop this broad collection of properties. S&P characterizes Halcon's business risk as "weak", its financial risk as "highly leveraged", and its liquidity as "adequate." RATINGS LIST Halcon Resources Corp. Corp credit rating CCC+/Negative/-- New Rating Halcon Resources Corp. Proposed $500 mil sr 2nd-lien secd nts CCC Recovery rating 5H HIPCRICKET INC: Ch. 11 Plan Goes to May 13 Confirmation Hearing --------------------------------------------------------------- Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware conditionally approved the disclosure statement explaining Hipcricket, Inc.'s Chapter 11 plan of reorganization and scheduled a hearing to be held on May 13, 2015, at 11:00 a.m. (Eastern Time) to consider confirmation of the Plan and and the objections to both the confirmation of the Plan and the adequacy of the Disclosure Statement. Objections to the adequacy of the Disclosure Statement or confirmation of the Plan must be filed with the Court on or before May 6. Any party supporting the Plan may file a reply to any objection to confirmation of the Plan by May 11. The Plan voting certification must be filed by May 11. The Official Committee of Unsecured Creditors filed a proposed letter in support of the Debtor's Chapter 11 Plan. The Plan provides 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. A full-text copy of the Disclosure Statement dated March 31 is available at http://bankrupt.com/misc/HIPCRICKETds0331.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. IMRIS INC: Receives Nasdaq Bid Price Deficiency Notice ------------------------------------------------------ IMRIS Inc. on April 22 disclosed that the Company received a letter, dated April 20, 2015, from the NASDAQ Stock Market LLC stating that for the previous 30 consecutive business days the bid price of the Company's common stock closed below the minimum $1.00 per share required for continued listing under Nasdaq Listing Rule 5450(a)(1). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until October 19, 2015, to regain compliance with the minimum bid requirement. If at any time during the 180 calendar day grace period, the closing bid price per share of the Company's common stock is at or above $1.00 for a minimum of ten consecutive business days, the Company will regain compliance and the matter will be closed. In the event the Company does not regain compliance, the Company may be eligible for an additional period to regain compliance, subject to satisfying certain Nasdaq requirements. If it appears to the Nasdaq staff that the Company will not be able to cure the deficiency or if the Company is not otherwise eligible for the additional compliance period, the Company's common stock will be subject to delisting by Nasdaq. About IMRIS IMRIS (NASDAQ: IMRS; TSX: IM) -- http://www.imris.com/-- provides image guided therapy solutions through its VISIUS Surgical Theatre -- a revolutionary, multifunctional surgical environment that provides unmatched intraoperative vision to clinicians to assist in decision making and enhance precision in treatment. The multi-room suites incorporate diagnostic quality high-field MR, CT and angio modalities accessed effortlessly in the operating room setting. VISIUS Surgical Theatres serve the neurosurgical, cardiovascular, spinal and cerebrovascular markets and have been selected by leading medical institutions around the world. INT'L MANUFACTURING: Withdraws Motion for Relief From Stay ---------------------------------------------------------- Zions First National Bank has withdrawn its motion for relief from the automatic stay as to real property commonly known as 879 F. Street, West Sacramento, Yolo County, California in the Chapter 11 case of International Manufacturing Group Inc. The Property has been sold and Bank's claim has been paid in full. As reported by the Troubled Company Reporter on March 17, 2015, the Bank sought to lift the automatic stay to allow the Bank to exercise its rights in the Property. The Bank held a deed of trust on the Property, which secured a commercial loan to Wannas Enterprises LLC, an entity that was substantively consolidated into the Debtor. Wannas owed the Bank more than $1.697 million. About International Manufacturing Deepal Wannakuwatte, the mastermind of a $150 million Ponzi scheme, put himself and his company, International Manufacturing Group Inc., into Chapter 11 after he pleaded guilty to one count of wire fraud and agreed to a 20-year prison sentence. The bankruptcy filing was part of his plea bargain with federal prosecutors. Mr. Wannakuwatte is the former owner of the Sacramento Capitols tennis team. International Manufacturing sought Chapter 11 bankruptcy protection (Bankr. E.D. Cal. Case No. 14-25820) in Sacramento, on May 30, 2014. The case is assigned to Judge Robert S. Bardwil. The Debtor tapped Marc A. Caraska, in Sacramento, as counsel. In June 2014, Beverly N. McFarland was appointed as Chapter 11 trustee for the Debtor. She has tapped Felderstein Fitzgerald Willoughby & Pascuzzi LLP as her bankruptcy counsel; Diamond McCarthy LLP as her special litigation counsel; Gabrielson & Company as accountant; and Karen Rushing as bookkeeper outside the ordinary course of business. The U.S. Trustee for Region 7 appointed a three-member unsecured creditors panel comprising of Byron Younger, Janine Jones, and Steve Whitesides. IT LLC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------- Debtor: IT, LLC fka Meritage Management LLC 1400 E Patty Drive Wasilla, AK 99654 Case No.: 15-00107 Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court District of Alaska (Anchorage) Debtor's Counsel: Cabot C. Christianson, Esq. LAW OFFICES OF CABOT CHRISTIANSON, P.C. 911 W 8th Ave., Suite #201 Anchorage, AK 99501 Tel: (907) 258-6016 Fax: (907)258-2026 Email: cabot@cclawyers.net - and - Terry P. Draeger, Esq. BEATY & DRAEGER, LTD. 3900 Arctic Blvd #101 Anchorage, AK 99503 Tel: (907) 563-7889 Fax: (907)562-6936 Email: draeger@ak.net Total Assets: $7.2 million Total Liabilities: $8.56 million The petition was signed by Jack Barrett, manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/akb15-00107.pdf J.C. PENNEY: S&P Revises Outlook to Pos. & Affirms 'CCC+' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on J.C. Penney Co. Inc. (JCP) to positive from stable. At the same time, S&P affirmed all ratings, including the 'CCC+' corporate credit rating, on the company. "The outlook revision reflects our forecast for further modest gains over the next year. We think there is a one-third chance that adjusted EBITDA will approach around $1 billion, which is one indication that the company's capital structure would be sustainable," said credit analyst Robert Schulz. "Other metrics supporting an upgrade would include prospects for breakeven or better cash flow after capital spending of at least $250 million, prospects for further meaningful reductions in legacy selling, general, and administrative (SG&A) cost levels, and success in online initiatives and the home furnishings segment (both of which would be reflected in revenue growth)." The positive outlook reflects S&P's view that there is a one-third chance over the next year or so that further successful execution of the merchandising turnaround, reduced cash burn, and EBITDA growth will result in a sustainable capital structure, leading to an upgrade. S&P could consider lowering its rating if the company's performance gains reverse because of merchandise missteps or an unexpected erosion of consumer spending leading to a return to significant cash use. Under this scenario, S&P believes the company could likely default within a 12-month period. In such a scenario, the company is unable to stabilize operations, returning to cash burn in the range of around $750 million. Additional financing options would narrow and vendors would tighten turns leading to a substantial decline in cash on hand. S&P could raise the rating if adjusted EBITDA seems capable of reaching around $1 billion versus our base-case forecast of about $800 million in 2015. For example, S&P estimates sales growth of more than 2% and EBITDA margins in the high-7% area would generate EBITDA in that range. Other supporting metrics for an upgrade would include prospects for positive cash flow after capital spending, prospects for ongoing meaningful reductions in SG&A spending and success in online and the home furnishings segment (which would be reflected in sales growth). This scenario would likely necessitate overall revenue growth closer to the level of same-store sales of around 3% and reduction in the still high legacy levels of SG&A. Consideration for an upgrade would require prospects for sustained leverage below 7.0x along with interest coverage above 1.5x. Such improvements in sales growth and margins would also cause S&P to view the company's business risk more favorably. JILL ACQUISITION: Moody's Assigns 'B2' CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and B2-PD Probability of Default Rating to Jill Acquisition LLC (New) ("J. Jill"), as well as a B2 instrument rating on the company's proposed $250 million senior secured term loan due 2022. Proceeds of the transaction, along with contributed equity, will be used to fund the buyout of the company by Towerbrook Capital Partners L.P. ("Towerbrook"). The rating outlook is stable. Moody's estimates pro-forma debt-to-EBITDA leverage will be about a turn and a half above the company's pre-LBO leverage as a result of an additional $164 million of funded debt. However, the B2 rating incorporates Moody's view that the proposed transaction reflects a more sustainable long-term capital structure and addresses the uncertainty related to Arcapita, which is one of the company's prior private equity owners who emerged from bankruptcy in September 2013 with a plan to liquidate its assets. The company will repay its unrated 24% mezzanine debt (12% cash and 12% PIK), resulting in a reduction to total interest expense of approximately $2 million and a modest improvement to interest coverage (including PIK interest in the prior structure). Moody's assigned the following ratings to Jill Acquisition LLC (New): -- Corporate Family Rating, Assigned B2 -- Probability of Default Rating, Assigned B2-PD -- $250 million Senior Secured Term Loan due 2022, Assigned B2, LGD-3 -- Outlook, Stable The following existing ratings on the company are unaffected and will be withdrawn upon close of the proposed transaction: Issuer: Jill Acquisition LLC -- Corporate Family Rating, B3 (to be withdrawn upon close of proposed transaction) -- Probability of Default Rating, B3-PD (to be withdrawn upon close of proposed transaction) Issuer: JJ Lease Funding Corp. -- $120 million Sr. Secured Term Loan due 2017, B2, LGD-3 (to be withdrawn upon close of proposed transaction) J. Jill's B2 CFR reflects the company's modest scale and relatively high lease adjusted leverage of approximately 5.6x through January 31, 2015, pro-forma for the proposed transaction. The rating also reflects the company's niche product focus and narrow customer demographic, targeting women between the ages 40-65. At under $500 million of LTM revenue, the company competes against many larger specialty retailers and department stores, and is vulnerable to earnings volatility from fashion misses, and during cyclically weak periods when consumer spending is pressured. The B2 rating is supported by improvements in the company's operating performance over the last 2-3 years, the strength of its direct to consumer business that accounts for almost 40% of total revenue, positive projected free cash flow, and its good liquidity profile. Operational initiatives including a refocus on the company's product offerings and price points, improved inventory management and purchasing decisions, and an increase in full-price sales drove healthy revenue and EBITDA growth beginning in fiscal 2012. Moody's expects store count expansion and effective merchandising will support revenue growth in the mid-to-low single digit range along with modestly improving margins. Moody's projects the resulting EBITDA growth and only minimal required debt amortization will bring debt-to-EBITDA leverage to the mid-to-low 5x range over the next 12-18 months. J. Jill has a good liquidity profile, reflecting Moody's expectation that the company will continue to generate free cash flow despite elevated levels of capital spending to support new store openings and remodels, and systems enhancements in 2015. Additional cash uses include only modest amortization of approximately $2.5 million per year with an excess cash flow sweep not commencing until year end 2016. Pro-forma for the proposed transaction the company will have access to an unrated $40 million asset-based revolver (ABL) expiring in 2020 that Moody's expects will be used to cover modest seasonal working capital needs. The ABL is expected to contain a springing fixed charge coverage covenant test of 1.0x that would be triggered when availability is less than the greater of 10% of the borrowing base and $4 million. It is also expected to contain a cash dominion period that is triggered when excess availability is less than the greater of 12.5% of the borrowing base and $5 million. Moody's does not expect either to be triggered over the next 12-18 months. The term loan is expected to contain a total net leverage covenant that Moody's anticipates will be set at a sufficient cushion to management's forecast to allow for good headroom over the next 12-18 months. The B2 rating and LGD-3 assessment assigned to J. Jill's senior secured term loan is in line with the company's CFR and reflects its junior position in the capital structure relative to the company's $40 million ABL Revolver. The term loan has a first priority lien on essentially all assets of the company, with second lien on the ABL priority collateral that consists of cash, receivables, and inventory. The term loan's collateral position creates effective priority relative to the company's unsecured obligations including trade payables and lease rejection claims. The stable rating outlook reflects Moody's expectation that the company will experience revenue growth in the mid-to-low single digit range over the next 12-18 months driven by new store expansion and modest comparable store sales growth. Debt-to-EBITDA leverage should decline to the mid-to-low 5x range over the period with EBITDA margins slightly above current levels and a good liquidity profile. Given the company's modest scale and specialty retail concentration, a rating upgrade is not likely over the next 12-18 months. However, if J. Jill can drive revenue and EBITDA growth resulting in leverage (Debt/EBITDA) sustained meaningfully below 4.0x and interest coverage (EBITA/Interest) over 2.25x, the ratings could experience upward pressure. An upgrade would also require a strong liquidity profile and consistent free cash flow generation. The ratings could be downgraded if operating performance were to decline as a result of lower same store sales or weaker operating margins, resulting in debt-to-EBITDA leverage above 6x. A deterioration in liquidity or interest coverage (EBITA/Interest) approaching 1.5x could also pressure the rating. The principal methodology used in these ratings was Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Quincy, Massachusetts, J. Jill is a retailer of women's apparel, footwear and accessories though the internet, catalogs and 249 retail stores. LTM revenues through January 31, 2015 were around $483 million. JILL HOLDINGS: S&P Affirms 'B' Corp. Credit Rating, Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Quincy, Mass.-based Jill Holdings LLC. The outlook is stable. At the same time, S&P assigned its 'B' issue level rating to Jill's $250 million proposed term loan. The recovery rating is '3', indicating S&P's expectation for meaningful recovery (lower end of the 50% to 70% range) in a payment default scenario. Upon close of the transaction, S&P will withdraw ratings on Jill Holdings LLC's existing $120 million term loan due 2017. S&P expects it will be repaid in conjunction with the purchase of the company by financial sponsor, TowerBrook Capital Partners. "The affirmation reflects our view that the company's improved profitability and credit metrics are sustainable over the next 12 months," said credit analyst Anita Ogbara. "Following the TowerBrook purchase, we expect continued margin improvement to offset modest incremental leverage and result in credit measures that are at or near current levels with debt to EBITDA in the 5x area and funds from operations (FFO) to debt in the low-teens percent area." S&P's stable outlook reflects its expectation that credit protection measures will remain in line with current levels over the next 12 months. S&P anticipates the company will continue to maintain operating profitability and execute its full-price strategy, which will offset modest incremental leverage from the TowerBrook transaction. S&P could lower its ratings if operating performance deteriorates, leading to substantial margin deterioration. Under this scenario, EBITDA would decline by approximately 25% from forecasted levels, which would cause leverage to increase to the low-6x area (assuming debt levels remained constant). S&P could also lower the ratings if weaker-than-expected performance results in inadequate covenant headroom, leading to less-than-adequate liquidity. Any meaningful leveraged distribution to the company's financial sponsors could also negatively affect the rating. Although unlikely in the next year, S&P could raise its ratings if the company continues to improve margins, and successfully expand its top line through new store growth and positive same-store sales. S&P would also expect leverage to remain below 4x on a sustained basis. This includes S&P's view that the likelihood of leverage increasing above 5x is minimal. In that case, S&P could revise its assessment of the company's financial risk profile to "aggressive" from "highly leveraged", or revise its financial policy score to the more favorable financial sponsor-5 (FS-5) from financial sponsor-6 (FS-6). KARMALOOP INC: US Trustee to Continue Creditors Meeting on May 21 ----------------------------------------------------------------- The U.S. trustee overseeing the Chapter 11 case of Karmaloop Inc. will continue the meeting of creditors on May 21, at 10:00 a.m., according to a filing with the U.S. Bankruptcy Court in Delaware. The meeting will be held at J. Caleb Boggs Federal Building, Room 5209, 844 King Street, in Wilmington, Delaware. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About 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. The U.S. Trustee for Region 3 appointed five creditors of Karmaloop Inc. to serve on the official committee of unsecured creditors. KNEL ACQUISITION: S&P Retains 'B' CCR Over $10MM Debt Add-On ------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on KNEL Acquisition LLC (B/Stable/--) remain unchanged following the company's $10 million proposed increase to its previously announced $50 million add-on to its existing $125 million term loan A-1 due in 2021. The recovery rating remains '3', indicating S&P's expectations for meaningful (higher half of the 50% to 70% range) recovery in the event of a payment default. The company intends to use the proceeds, as well as cash on the balance sheet, to fund the acquisition of certain production assets, inventories, and contracts associated with NBTY Inc.'s nutritional bar and powder manufacturing operations. S&P's assessment of the business risk profile as "weak" reflects KNEL's customer concentration, participation in the fragmented co-manufacturing segment of the highly competitive North American packaged food industry, and narrow product focus. S&P believes leverage will remain above 6x during the next 12 months, but that credit protection measures will improve with excess cash flow applied to debt reduction. RATINGS LIST Ratings Unchanged KNEL Acquisition LLC Corporate Credit Rating B/Stable/-- Les Aliments Multibar Inc. Senior Secured $115 mil. A-2 1st lien term loan due 2021 B Recovery Rating 3H $35 mil. A-2 2nd lien term loan due 2022 CCC+ Recovery Rating 6 Nellson Nutraceutical, LLC Senior Secured $65 mil. 1st lien revolver due 2019 B Recovery Rating 3H $185 mil. A-1 1st lien term loan due 2021 B Recovery Rating 3H $38 mil. A-1 2nd lien term loan due 2022 CCC+ Recovery Rating 6 KU6 MEDIA: Corrects Outstanding Common Shares Figures ----------------------------------------------------- Ku6 Media Co., Ltd., announced that the number of its issued and outstanding shares as of Sept. 30, 2014, and Dec. 31, 2014, was 4,763,360,860 and 4,763,360,860, respectively, taking into account the exercise of share options by its employees during the third quarter of 2014. The previously reported number of outstanding shares in its unaudited financial results for the third quarter and the fourth quarter of fiscal year 2014, which were filed on Form 6-K on February 6 and March 9, 2015, respectively, was inaccurate. About Ku6 Media Ku6 Media Co., Ltd. -- http://ir.ku6.com/-- is an Internet video company in China focused on User-Generated Content. Through its premier online brand and online video website, www.ku6.com , Ku6 Media provides online video uploading and sharing service, video reports, information and entertainment in China. The Company reported a net loss of $10.72 million in 2014, a net loss of $34.4 million in 2013 and a net loss of $49.4 million in 2011. PricewaterhouseCoopers Zhong Tian LLP, in Shanghai, the People's Republic of China, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that facts and circumstances including recurring losses, negative working capital, net cash outflows, and uncertainties associated with significant changes planned to be made in respect of the Company's business model raise substantial doubt about the Company's ability to continue as a going concern. LEGACY RESERVES: Moody's Alters Outlook to Stable & Affirms B2 CFR ------------------------------------------------------------------ Moody's Investors Service changed Legacy Reserves LP's rating outlook to stable from positive. At the same time, Moody's affirmed Legacy's B2 Corporate Family Rating (CFR), SGL-3 Speculative Grade Liquidity Rating, and its Caa1 rated unsecured notes that are co-issued by Legacy Reserves Finance Corporation. "Legacy has taken positive actions in response to the commodity price downturn, including reducing distributions and capital spending levels. However, Legacy's change in outlook to stable reflects our expectation that credit accreting growth opportunities will be more limited through mid-2016 because of the weak commodity price outlook, with Legacy's sequential production to modestly decline in 2015, absent any acquisitions," commented Gretchen French, Moody's Vice President. Debt List: Legacy Reserves LP -- Outlook: Changed to Stable from Positive -- Senior unsecured notes, Affirmed at Caa1 (LGD 5) -- Corporate Family Rating, Affirmed at B2 -- Probability of Default Rating, Affirmed at B2-PD -- Speculative Grade Liquidity Rating, Affirmed at SGL-3 Legacy's B2 CFR reflects its long-lived, shallow decline, predominately proved developed reserve base. In addition, the company has balanced exposure to the Permian and Piceance Basins, and has grown via reasonably priced acquisitions, which have supported sound returns. The B2 CFR is restrained by Legacy's overall small production profile, which is expected to face modest sequential declines in 2015 due to reduced capital spending levels. The CFR also reflects the risks inherent in its acquisitive, high payout MLP corporate finance model. However, Moody's recognizes management's positive response to the current commodity price downturn, with the company reducing both capital spending levels and distributions, with any excess cash flow targeted for debt reduction. The rating incorporates the benefits of the company's consistent track record in issuing equity, its lack of incentive distribution rights at the general partner level, hedging program, and consideration of development capital requirements in calculating its distributable cash flow. Legacy's SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity through mid-2016. As of April 20, 2015, the company had about $130 million drawn under its $1.5 billion revolving credit facility due April 2019 (borrowing base size of $700 million). Moody's does not expect any additional drawings in 2015, with the company targeting excess cash flow to reduce revolver drawings, and the maintenance of adequate headroom under financial covenants through mid-2016. Legacy benefits from a favorable hedge position that reflects its historical hedging policies to hedge 85% of estimated production from proved developed producing reserves over an 18-24 month period on a rolling quarterly basis and to lock in acquisition economics with longer term three-to-five year hedges. However, given the current commodity price environment, Legacy has not entered into any new hedge positions to date in 2015, other than additional Midland-Cushing basis hedges and some limited crude oil hedges. The Caa1 ratings on Legacy's senior unsecured notes reflect both the overall probability of default of Legacy, to which Moody's assigns a PDR of B2-PD, and a loss given default of LGD 5. The senior notes are guaranteed by essentially all material domestic subsidiaries on a senior unsecured basis and, therefore, are subordinated to the senior secured credit facility's potential priority claim to the company's assets. The recent reduction in the borrowing base would suggest a B3 rating under Moody's Loss Given Default Methodology. However, given the present fundamental challenges from the very low commodity price environment and the potential that the borrowing base may eventually be increased as commodity prices partially recover through 2016, Moody's believes that the Caa1 rating on the unsecured notes is more appropriate and consequently the existing rating was affirmed. Moody's could downgrade Legacy's ratings if leverage increased (EBITDA/Interest declining towards 2.5x and debt/proved developed reserves rising above $12.00/boe for an extended period), if distribution coverage fell below 1.0x for a sustained period, or if the company's operational risk profile materially deteriorated. Moody's could upgrade the ratings if the company is able to return to at least modest production growth while maintaining debt/production of less than $30,000 boe/d and debt/proved developed reserves of less than $9.00/boe), while also maintaining distribution coverage above 1.0x and adequate liquidity. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Legacy Reserves LP is headquartered in Midland, Texas. LEHMAN BROTHERS: Lawyers Says Ex-Top Trader Seeks "Double Recovery" ------------------------------------------------------------------- Joseph Checkler, writing for The Wall Street Journal, reported that Lehman Brothers Holdings Inc. said former top trader Jonathan Hoffman is seeking "double recovery" on his bonus from 2008, in day one of a trial over whether Lehman owes Mr. Hoffman and three other employees millions in back bonuses. According to the report, Lehman says Mr. Hoffman, a former global rates trader who at the time of Lehman's collapse was the bank's third-highest paid rank-and-file employee, was paid an $84 million bonus by Barclays PLC, which bought Lehman's brokerage in the days after the investment bank filed for bankruptcy. The Journal related that a lawyer for Mr. Hoffman argued in court that it doesn't matter that Barclays paid him a bonus because the bonus agreement with Barclays was separate from his Lehman contract, thus the Lehman estate still owes him $84 million for his work for 2008. Daily Bankruptcy Review reported that Mr. Hoffman, testifying at trial, said he secretly recorded several conversations that he says proves Lehman owes him more than $83 million in bonuses for his work done mostly in 2008, even though he received a similar amount when Barclays bought Lehman. Mr. Hoffman said he taped the conversations as a note-taking method, without telling parties he was recording them, the DBR report related. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. As of Oct. 2, 2014, Lehman's total distributions to unsecured creditors have amounted to $92.0 billion. As of Sept. 30, 2014, the brokerage trustee has substantially completed customer claims distributions, distributing more than $106 billion to 111,000 customers. LENNAR CORP: Fitch Assigns BB+ Rating on $400MM Sr. Notes Due 2025 ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+' rating to Lennar Corporation's (NYSE: LEN and LEN.B) proposed offering of $400 million of senior notes due 2025. This issue will be ranked on a pari passu basis with all other senior unsecured debt. Net proceeds from the notes offering will be used for working capital and general corporate purposes. The Rating Outlook is Stable. KEY RATING DRIVERS The ratings and Outlook for Lennar reflect the company's strong liquidity position and continuing recovery of the housing sector in 2015 and 2016. The ratings also reflect Lennar's successful execution of its business model over many cycles, geographic and product line diversity, and much lessened joint venture exposure than was the case just a few years ago. The company did a good job in reducing its inventory exposure (especially early in the correction) and in generating positive operating cash flow during the past severe industry downturn. In addition, Lennar steadily, substantially reduced its number of joint ventures (JVs) over the last few years and, as a consequence, has very sharply lowered its JV recourse debt exposure (from $1.76 billion to $24.5 million as of Nov. 30, 2014). In contrast to almost all the other public homebuilders Lennar was profitable in fiscal 2010 and 2011 and was solidly profitable in fiscal 2012, 2013 and 2014. The company's gross margins are typically above its peers, and contributions from its Rialto Investment segment have added to corporate profits from 2010 through 2014. There are still some challenges facing the housing market that are likely to moderate the intermediate stages of this recovery. Nevertheless, Fitch believes Lennar has the financial flexibility to navigate through the sometimes challenging market conditions and continue to broaden its franchise and invest in land and other opportunities. THE INDUSTRY Housing metrics increased in 2014 due to more robust economic growth during the last three quarters of the year (prompted by improved household net worth, industrial production, and consumer spending), and consequently, acceleration in job growth (as unemployment rates decreased to 6.2% for 2014 from an average of 7.4% in 2013), despite modestly higher interest rates, as well as more measured home price inflation. A combination of tax increases and spending cuts in 2013 shaved about 1.5 percentage points (pp) off annual economic growth, according to the Congressional Budget Office. Many forecasters estimate the fiscal drag in 2014 was only about 0.25%. Single-family starts in 2014 improved 4.8% to 647,900 and multifamily volume grew 15.6% to 355,400. Thus, total starts in 2014 were 1.003 million. New-home sales were up 1.9% to 437,000, while existing home volume was off 2.9% to 4,940 million largely due to fewer distressed homes for sale and limited inventory. New-home price inflation moderated in 2014, at least partially because of higher interest rates and buyer resistance. Average new-home prices rose 5.7% in 2014, while median home prices advanced approximately 5.5%. Housing activity is likely to ratchet up more sharply in 2015 with the support of a steadily growing, relatively robust economy throughout the year. Considerably lower oil prices should restrain inflation and leave American consumers with more money to spend. The unemployment rate should continue to move lower (averaging 5.3% in 2015). Credit standards should steadily, moderately ease throughout 2015. Demographics should be more of a positive catalyst. More of those younger adults who have been living at home should find jobs and these 25-35-year olds should provide some incremental elevation to the rental and starter home markets. Single-family starts are forecast to rise 17.3% to 760,000 as multifamily volume expands 7.3% to 381,000. Total starts would be in excess of 1.1 million. New-home sales are projected to increase about 18% to 515,000. Existing home volume is expected to approximate 5.152 million, up 4.3%. New-home price inflation should further taper off with higher interest rates and the mix of sales shifting more to first-time homebuyer product. Challenges remain, including the potential for higher interest rates, and restrictive credit qualification standards. LIQUIDITY/DEBT The company's homebuilding operations ended the first quarter of 2015 with $583.75 million in unrestricted cash and equivalents. Debt totaled $5.13 billion as of Feb. 28, 2015, up from $4.69 billion at fiscal year-end 2014. At Nov. 30, 2014, Lennar had a $1.5 billion unsecured revolving credit facility (RCF) with certain financial institutions which includes a $248 million accordion feature that matures in June 2018, $125 million of letter of credit (LOC) facilities with a financial institution and a $140 million LOC facility with a different financial institution. The proceeds available under the credit facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The credit facility agreement also provides that up to $500 million in commitments may be used for LOCs. As of Nov. 30, 2014, there were no borrowings under the credit facility. On April 17, 2015, Lennar amended the RCF, to, among other things, increase the maximum borrowing from $1.5 billion to $1.6 billion, which includes a $263 million accordion feature. The amendment also extended the maturity of $1.18 billion of the credit facility from June 2018 to June 2019. Lennar's debt maturities are well-laddered, with about 33.6% of its senior notes (as of Feb. 28, 2015) maturing through 2017. Lennar's performance LOCs outstanding were $234.1 million as of Nov. 30, 2014. The company's financial LOCs outstanding were $190.4 million at the end of the fourth quarter. Performance LOCs are generally posted with regulatory bodies to guarantee its performance of certain development and construction activities. Financial LOCs are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. Debt leverage (debt/EBITDA) decreased to 4.0x as of Nov. 30, 2014, down from 4.9x at the end of 2013. EBITDA-to-interest expense rose from 3.2x at Nov. 30 2013 to 4.3x at the conclusion of 2014. HOMEBUILDING The company was the second largest homebuilder in 2013 and primarily focuses on entry-level and first-time move-up homebuyers. In 2013 and 2014, approximately one third of sales were to the first-time buyer, half to first-time move-up customers and the balance is a mix of second-time move-up, luxury and active adult. The company builds in 17 states with particular focus on markets in Florida, Texas and California. Lennar's significant ranking (within the top five or top 10) in many of its markets, its largely presale operating strategy, and a return on capital focus provide the framework to soften the impact on margins from declining market conditions. Fitch notes that in the past, acquisitions (in particular, strategic acquisitions) have played a significant role in Lennar's operating strategy. Compared to its peers, Lennar has had above-average exposure to JVs during this past housing cycle. Longer-dated land positions are controlled off balance sheet. The company's equity interests in its partnerships generally ranged from 10% to 50%. These JVs have a substantial business purpose and are governed by Lennar's conservative operating principles. They allow Lennar to strategically acquire land while mitigating land risks and reduce the supply of land owned by the company. They help Lennar to match financing to asset life. JVs facilitate just-in-time inventory management. Nonetheless, Lennar has substantially reduced its number of JVs over the last eight years (from 270 at the peak in 2006 to 35 as of Nov. 30, 2014). As a consequence, the company has very sharply lowered its JV recourse debt exposure from $1.76 billion to $24.5 million as of Nov. 30, 2014. In the future, management will still be involved with partnerships and JVs, but there will be fewer of them and they will be larger, on average, than in the past. The company did a good job in reducing its inventory exposure (especially early in the correction) and generating positive operating cash flow. In 2010, the company started to rebuild its lot position and increased land and development spending. Lennar spent about $600 million on new land purchases during 2011 and expended about $225 million on land development during the year. This compares to roughly $475 million of combined land and development spending during 2009 and about $704 million in 2010. During 2012, Lennar purchased approximately $1 billion of new land and spent roughly $302 million on development expenditures. Land spend totaled almost $1.9 billion in 2013, and development expenditures reached about $600 million, double the level of 2012. Approximately, $1.5 billion was expended on land and $1.1 billion on development in 2014. Fitch expects that total real estate spending in 2015 could be up moderately (perhaps $200 million-$300 million) with more expended on land than development activities. The company was slightly less cash flow negative in 2014 ($788.49 million) than in 2013 ($807.71 million). Lennar is likely to be much less cash flow negative in 2015, perhaps less than half as much as in 2014. The company could be cash flow positive in 2016. Fitch is comfortable with this real estate strategy given the company's cash position, debt maturity schedule, proven access to the capital markets and willingness to quickly put the brake on spending as conditions warrant. FINANCIAL SERVICES Lennar's financial services segment provides mortgage financing, title insurance and closing services for both buyers of its homes and others. Substantially all of the loans that the segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, Lennar retains potential liability for possible claims by purchasers that the company breached certain limited industry standard representations and warranties in the loan sale agreements. The company participates in mortgage refinance activity, which periodically is consequential business. During 2014, Lennar's financial services subsidiary provided loans to approximately 78% of its homebuyers who obtained mortgage financing in areas where Lennar offered services. During that same period, the company originated approximately 23,300 mortgage loans totaling $6 billion. (By loan count refinanced loans accounted for 9% of originations in 2014.) RIALTO Lennar's Rialto segment was formed to focus on acquisitions of distressed debt and other real estate assets utilizing Rialto's abilities to source, underwrite, price, turnaround and ultimately monetize such assets in markets across the U.S. Lennar had a similar operation in the 1980s, LNR Property Corporation, which was the vehicle used by the company to invest in and work out large portfolios of distressed real estate assets purchased from the government's Resolution Trust Corporation (RTC). This operation was subsequently spun-off as a separate publicly traded company and was later acquired by Cerberus Capital Management. Lennar's Rialto reportable segment is a commercial real estate investment, investment management, and finance company focused on raising, investing and managing third party capital, originating and securitizing commercial mortgage loans, as well as investing its own capital in real estate related mortgage loans, properties and related securities. Rialto utilizes its vertically-integrated investment and operating platform to underwrite, do the due diligence, acquire, manage, workout and add value to diverse portfolios of real estate loans, properties and securities, as well as providing strategic real estate capital. Rialto's primary focus is to manage third party capital and to originate and sell into securitizations commercial mortgage loans. Rialto has commenced the workout and/or oversight of billions of dollars of real estate assets across the U.S., including commercial and residential real estate loans and properties, as well as mortgage backed securities. To date, many of the investment and management opportunities have arisen from the dislocation in the U.S. real estate markets and the restructuring and recapitalization of those markets. In July 2013, RMF was formed to originate and sell into securitization five-, seven- and 10-year commercial first mortgage loans, generally with principal amounts between $2 million and $75 million, which are secured by income producing properties. This business is expected to be a significant contributor to Rialto revenues, at least in the near future. Rialto is the sponsor of and an investor in private equity vehicles that invest in and manage real estate related assets. This includes: -- Rialto Real Estate Fund, LP, formed in 2010 to which investors have committed and contributed a total of $700 million of equity (including $75 million by Lennar); -- Rialto Real Estate Fund II, LP, formed in 2012 with the objective to invest in distressed real estate assets and other related investments and that as of Nov. 30, 2014 had equity commitments of $1.3 billion (including $100 million by Lennar) and was closed to additional commitments; -- Rialto Mezzanine Partners Fund, formed in 2013 with a target of raising $300 million in capital (including $27 million committed by Lennar) to invest in performing mezzanine commercial loans that have expected durations of one to two years and are secured by equity interests in the borrowing entity owning the real estate assets. Rialto also earns fees for its role as a manager of these vehicles and for providing asset management and other services to those vehicles and other third parties. LENNAR MULTIFAMILY Since 2012, Lennar has become actively involved, primarily through unconsolidated entities, in the development of multifamily rental properties. This business segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. As of Nov. 30, 2014, Lennar's balance sheet had $268 million of assets related to the Lennar Multifamily segment, which includes investments in unconsolidated entities of $105.7 million. Lennar's net investment in the Lennar Multifamily segment, as of Nov. 30, 2014, was about $200 million. As of Nov. 30, 2014, the Lennar Multifamily segment had 24 communities under construction with development costs of approximately $1.6 billion. The Lennar Multifamily segment has a pipeline of future projects totaling $5.5 billion in assets (including the $1.6 billion in development) across a number of states that will be developed primarily by unconsolidated entities. FIVEPOINT COMMUNITIES FivePoint manages large, complex master planned communities in the Western U.S., typically in a JV structure. These include the former military installation El Toro, the former Newhall Land and Farming Company (just north of Los Angeles) and San Francisco's Hunters Point. These entities will not be generating meaningful home deliveries for another few years. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Industry single-family housing starts improve almost 17.5%, while new and existing home sales grow 18% and 4.3%, respectively, in 2015; -- Lennar's deliveries increase 12% and homebuilding gross margins decline more than a single pp to 24% this year; -- The company's debt/EBITDA approximates 3.4x-3.5x and interest coverage exceeds 4.5x by year-end 2015; -- Lennar spends at least $2.6 billion on land acquisitions and development activities this year; -- The company maintains a healthy liquidity position (well above $1 billion with a combination of unrestricted cash and revolver availability). RATING SENSITIVITIES Future ratings and Outlooks will be influenced by broad housing market trends as well as company-specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, free cash flow trends and uses, and the company's cash position. Fitch would consider taking positive rating action if the recovery in housing accelerates and Lennar shows steady improvement in credit metrics (such as debt-to-EBITDA leverage consistently less than 3x), while maintaining a healthy liquidity position (in excess of $1 billion in a combination of cash and revolver availability). Conversely, negative rating actions could occur if the recovery in housing dissipates and Lennar maintains an overly aggressive land and development spending program. This could lead to sharp declines in profitability, consistent and significant negative quarterly cash flow from operations, higher leverage and meaningfully diminished liquidity position (below $500 million). Fitch currently rates Lennar as: -- Issuer Default Rating 'BB+'; -- Senior unsecured debt 'BB+'. The Rating Outlook is Stable. LENNAR CORP: Moody's Rates New $400MM Sr. Unsecured Notes 'Ba3' --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Lennar Corporation's proposed new $400 million of 10 year senior unsecured notes, proceeds of which will be used in part to repay the $500 million of senior unsecured notes maturing on May 31, 2015. In the same rating action, Moody's affirmed Lennar's Ba3 Corporate Family Rating, Ba3-PD Probability of Default, and the Ba3 rating on the company's existing issues of senior unsecured and convertible senior notes due from 2015 to 2022. Moody's also affirmed Lennar's speculative grade liquidity rating at SGL-1. The rating outlook remains positive. The positive outlook reflects our expectation that Lennar's adjusted debt leverage will trend towards that of a Ba2-rated homebuilder within the next 12 to 18 months while its other key credit metrics, e.g., gross margins, interest coverage, and return on assets, will either continue to improve and/or continue to exceed Ba3 levels. The following rating actions were taken: -- Proposed new $400 million of senior unsecured notes due 2025, assigned Ba3, LGD4; -- Corporate Family Rating, affirmed Ba3; -- Probability of Default, affirmed at Ba3-PD; -- Existing senior unsecured notes, affirmed at Ba3, LGD4; -- Existing convertible senior notes, affirmed at Ba3, LGD4; -- Existing senior unsecured shelf registrations, affirmed at (P)Ba3; -- Speculative grade liquidity assessment, affirmed at SGL-1; -- Ratings outlook is positive. The Ba3 corporate family rating reflects the company's industry-leading gross margins among the pure homebuilders; its strong earnings performance; the near elimination of its formerly outsized recourse joint venture debt exposure; the substantial tangible equity base; and its ability to generate healthy order and backlog growth even when the macro statistics might suggest otherwise. In addition, the company has successfully managed its investments in new asset classes that are different from, albeit related to, more traditional homebuilding activities. At the same time, Lennar's ratings incorporate an adjusted pro forma homebuilding debt leverage of approximately 53% as of February 28, 2015 that is stretched for a Ba3; the expectation of negative cash flow from operations over the next 12 to 18 months as the company continues to grow its discretionary land spend; the moderately long land position; and its high proportion of speculative construction. In addition, Lennar's propensity to invest in different asset classes and structures compared to more traditional homebuilders adds an element of further risk to the company's credit profile. While these investments can and do generate solid returns and cash, especially during growth periods, they can also result in sizable write downs, considerable use of management time, and cash drains, as the joint venture operations did during the recent downturn. Lennar's liquidity is supported by its $484 million of unrestricted homebuilding cash at February 28, 2015 (pro forma for the repayment of $500 million of senior unsecured notes on May 31 and the issuance herein of $400 million of senior unsecured notes); by its $147 million of unrestricted cash at Rialto as of the same date; by the availability of about $1.07 billion under its $1.34 billion committed senior unsecured revolving credit facility due in June 2019 (that had $250 million drawn and $ 18 million of outstanding letters of credit at February 28, 2015), and substantial headroom under its financial maintenance covenants. The revolving credit facility requires the company to maintain compliance, as of February 28, 2015, with minimum tangible net worth of $ 2.3 billion, maximum net debt leverage of 65.0%, and either a minimum 1.0x liquidity coverage of last 12 months interest incurred or a trailing 12 months interest coverage of 1.5x. The ratings could benefit if the company continues to generate positive and growing net income, resumes growing its free cash flow, continues to strengthen its liquidity, and, most importantly, drives its adjusted debt leverage towards the 45% level. The outlook and/or ratings could come under pressure if the economic backdrop suddenly and significantly takes a turn for the worse; the company begins generating negative net income; impairments were again to rise materially; the company were to experience even sharper-than-expected reductions in its trailing 12-month free cash flow generation; and/or adjusted debt leverage were to exceed 60% on a sustained basis. The principal methodology used in these ratings was Global Homebuilding Industrypublished in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Founded in 1954 and headquartered in Miami, Florida, Lennar is one of the country's largest homebuilders. The company operates in 17 states and specializes in the sale of single-family homes for first-time, move-up, and active adult buyers under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance and closing services or both buyers of the company's homes and others. Lennar's Rialto segment is a vertically integrated asset management platform focused on investing throughout the commercial real estate capital structure. Lennar's Multifamily segment is a national developer of multifamily rental properties. Total homebuilding revenues for the twelve months ending February 28, 2015, were approximately $7.2 billion, and consolidated pretax income, including those of its Financial Services segment, was $1.0 billion. LENNAR CORP: S&P Assigns 'BB' Rating on $400MM Sr. Unsecured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it has assigned its 'BB' issue-level rating to Miami-based homebuilder Lennar Corp.'s proposed $400 million senior unsecured notes due 2025. The '3' recovery rating indicates S&P's expectation for meaningful recovery, at the upper half of the 50% to 70% range. Lennar will use proceeds for general corporate purposes, including the possible redemption of its 5.6% senior notes due 2015. S&P's corporate credit rating on Lennar reflects S&P's view of the company's business risk as "fair" and its financial risk as "significant." Lennar is one of the largest companies in the cyclical, albeit recovering, homebuilding industry. S&P expects leverage to be in the 3x to 4x EBITDA range in 2015. LEVI STRAUSS: Fitch Gives 'BB-' Rating to $475MM Unsecured Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to Levi Strauss & Co.'s (Levi) $475 million issue of senior unsecured notes. The proceeds from the issue, together with revolver borrowings, will be used to repay the company's $525 million of 7.625% senior notes due 2020. The Rating Outlook is Positive. KEY RATING DRIVERS The rating and Positive Outlook reflects Fitch's view that Levi will begin to generate EBITDA growth as the benefits from its global productivity initiative flow to the bottom line, particularly in fiscal 2016. In addition to taking significant costs out of the business, Levi's management is also committed to reducing debt levels and strengthening its balance sheet. These factors are expected by Fitch to drive adjusted leverage toward the low-3x range over the next two years from 3.6x currently. Fitch also expects FCF will be positive in the range of $200 million annually excluding restructuring costs. The rating continues to reflect Levi's well-known brands, strong market shares, and geographic diversity, as well as the challenging consumer environment pressuring top line performance. Levi's revenues declined 1.3% on a constant currency basis in the first quarter ended March 1 2015, following 2.6% constant currency growth in fiscal 2014 (ended November). This reflects sales declines in the Americas region (60% of 2014 revenues), due in part to a shift in the company's fiscal calendar partly offset by growth in Europe (24% of 2014 revenues) and Asia (16% of 2014 revenues). Fitch projects consolidated sales will be flat to up in the low single digit range over the next 24 months, and will continue to be constrained by the difficult consumer environment globally. Levi's EBITDA margin was 12.1% in the 12 months ended March 1, 2015 compared with 12.5% in 2014, due to increased investment in advertising, higher sourcing costs, and the promotional selling environment. In the beginning of 2014, Levi's rolled out a restructuring initiative where actions taken to date are expected to produce annual net savings of $125 million - $150 million. Fitch believes that EBITDA will continue to be constrained over the near term by the strong dollar and costs associated with the company's restructuring activities, but that it will move higher over the next 24 months to over $600 million from $564 million in the LTM ended March 1, 2015, as cost savings flow to the bottom line. Leverage (adjusted debt/EBITDAR) was 3.6x at March 2015 compared with 4.0x at fiscal year-end 2013, due to $420 million of debt reduction. Fitch expects management will continue to reduce debt levels with free cash flow in 2015-2016, and that leverage will improve toward the low-3x range over the next two years. Liquidity is supported by cash of $203 million and availability of $717 million on an $850 million credit facility that expires in March 2019. The facility is secured by North American inventories, receivables, and the U.S. Levi trademark, with a total borrowing base of $776 million. KEY ASSUMPTIONS -- Fitch expects consolidated sales to be flat to up in the low single digit range over the next 24 months, and will continue to be constrained by the difficult consumer environment globally. -- Fitch expects EBITDA to be constrained over the near term by the strong dollar and the company's ongoing restructuring activities, but that it will move higher over the next 24 months to over $600 million from $564 million in the LTM period ended March 1, 2015. -- Fitch expects FCF to be positive in the range of $200 million annually excluding restructuring costs. -- Fitch expects management will continue to reduce debt levels with free cash flow in 2015-2016, and that leverage will Factors that could individually or collectively lead to a positive rating action include: -- EBITDA margins begin a sustained recovery in 2015; -- FCF of $200 million plus annually, permitting ongoing debt reduction; -- Adjusted financial leverage improves sustainably to the low- 3x range. Factors that could individually or collectively lead to a negative rating action include: -- EBITDA margins remain under pressure longer-term; -- Sales trends remain soft; -- Adjusted financial leverage moves above the mid-4x range. Fitch currently rates Levi as follows: Levi Strauss & Co. -- IDR 'BB-'; -- $850 million secured revolving credit facility 'BB+'; -- Senior unsecured notes 'BB-'. The Rating Outlook is Positive. LOUISIANA STATE UNIVERSITY: Drafting "Academic Bankruptcy" Plan --------------------------------------------------------------- Julia O'Donoghue, writing for The Times-Picayune, reported that the Louisiana State University and many other public colleges in Louisiana might be forced to file for financial exigency, essentially academic bankruptcy, if state higher education funding doesn't soon take a turn for the better. According to the report, citing F. King Alexander, president and chancellor of LSU, Louisiana's flagship university began putting together the paperwork for declaring financial exigency when the Legislature appeared to make little progress on finding a state budget solution. Moody's Investors Service also announced that it was lowering LSU's credit outlook from positive to stable based on concerns about the university's overall financial support, the report said. MCJUNKIN RED: S&P Lowers CCR to 'B+' on Higher Debt Leverage ------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its corporate credit rating on McJunkin Red Man Corp. to 'B+' from 'BB-'. The outlook is stable. At the same time, S&P lowered its issue-level rating on the company's senior secured term loan to 'B+' from 'BB-'. The recovery rating is unchanged at '4', indicating S&P's expectation for average (lower half of the 30% to 50% range) recovery in the event of payment default. The downgrade reflects S&P's view that McJunkin's credit measures will remain more in line with expectations for a 'B+' rating rather than 'BB-'; therefore, S&P revised McJunkin's financial risk profile to "aggressive" from "significant," based on expected leverage and cash flow coverage ratios under S&P's base case forecast. "The stable rating outlook reflects our expectation that the company's large presence in the North American energy market and expanding international presence will generate enough cash flow to support, on a sustained basis, debt to EBITDA of between 4x and 5x debt and FFO to debt of 12% to 20%," said Standard & Poor's credit analyst Patricia Mendonca. S&P could lower the rating if a recovery in the domestic energy market does not materialize in 2015 and the outlook for 2016 does not improve as expected, leading to a significant and sustained decline in operating performance. This could result in continued weak credit measures and a meaningful deterioration of liquidity. S&P could also lower the rating if McJunkin made a large, debt-financed acquisition that resulted in leverage measures becoming highly leveraged and elevating debt to EBITDA on a sustained basis to more than 5x and lowering FFO to debt to less than 12%. An upgrade is unlikely over the next 12 months given S&P's view that the company's business risk profile is constrained by its dependence on domestic energy markets, the competitive nature of the distribution industry, and the expected curtailed spending in the oil and gas upstream sector. MIDWEST PROPERTIES: Case Summary & 9 Top Unsecured Creditors ------------------------------------------------------------ Debtor: Midwest Properties Illinois LLC aka Midwest Properties Illinois, LLC aka Midwest Properties Illinois, L.L.C. 1906 Tracy Drive LaCasa Pointe Bloomington, IL 61704 Case No.: 15-70643 Nature of Business: Residential Apartments Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court Central District of Illinois (Springfield) Judge: Hon. Mary P. Gorman Debtor's Counsel: Jonathan A Backman, Esq. LAW OFFICE OF JONATHAN A. BACKMAN 117 N Center St Bloomington, IL 61701 Tel: (309) 820-7420 Fax: (309) 820-7430 Email: jabackman@backlawoffice.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Karen Elias, manager. A list of the Debtor's nine largest unsecured creditors is available for free at http://bankrupt.com/misc/ilcb15-70643.pdf MINT LEASING: Jerry Parish Reports 48.3% Stake ---------------------------------------------- Jerry Parish disclosed in an amended Schedule 13D filed with the Securities and Exchange Commission that he beneficially owns a total of 135,375,931 voting shares which includes the following: (a) 42,763,128 shares of common stock beneficially owned by him; (b) 2,000,000 shares of the Company's Series B Preferred Stock, which are convertible into common stock at the rate of 10 shares of common stock for each Series B Preferred Stock converted, and which have the right to vote in aggregate the total number of voting shares of the Company plus 1 share (equal to 90,612,803 shares as of April 21, 2015); and (c) 2,000,000 shares issuable in connection with the exercise of outstanding options held by Mr. Parish, which total common stock represents 48.3% of the outstanding shares of common stock and assuming the exercise of the 2,000,000 Stock Options held by Mr. Parish, based on 90,612,802 shares of common stock issued and outstanding before such exercise, and which voting shares total 73.9% of the Company's total voting shares when including the voting rights associated with the Series B Preferred Stock and assuming the exercise of the 2,000,000 Stock Options held by Mr. Parish. A copy of the regulatory filing is available for free at: http://is.gd/e2FKUi About Mint Leasing Houston, Texas-based The Mint Leasing, Inc., is in the business of leasing automobiles and fleet vehicles throughout the United States. Mint Leasing reported a net loss of $3.08 million in 2014, following net income of $3.22 million in 2013. As of Dec. 31, 2014, the Company had $15.2 million in total assets, $13.7 million in total liabilities, and $1.56 million in total stockholders' equity. MT GOX: Kraken Accepts Creditor Claims Through Website ------------------------------------------------------ Kraken, a San Francisco-based Bitcoin exchange, is now accepting MtGox creditor claims and offering up to $1 million in free trade volume per creditor as a bonus for claiming funds through Kraken. The claim and payout service through Kraken is available in all areas of operation, including all US states. Kraken was selected by the MtGox trustee in November 2014 after extensive and objective review to assist MtGox creditors in investigating missing Bitcoin, filing claims, and distributing remaining assets. "Thanks to Kraken, filing of claims can be done through their system," said the MtGox trustee. "We expect this to enable smooth filing of bankruptcy claims and distributions." Creditors claiming funds with Kraken can expect the following benefits: -- 100,000 KFEE credits redeemable for up to $1 million in free trading volume at the lowest fee tier of 0.1% -- Creditor claim and payout support with live chat and email -- Option to receive funds in the form of bitcoin -- An easier and more convenient process from claim to payout MtGox creditors should file their claim as soon as possible in two steps: 1. Create an account at https://www.kraken.com/ 2. Click the "MtGox Claim" tab in your account and follow the instructions. "We see our involvement in this process as an opportunity to restore faith in the community by showing what we need more of in the Bitcoin space -- trusted leadership," said Kraken CEO Jesse Powell. "We're dedicated to delivering an exceptional experience. What is that? It's fast execution and reliable service -- all done over a secure platform. Whether you're a long-standing client or trying us for the first time, we're committed to putting your best interests first. That's our philosophy. It's simple. Put people first." To learn more about the KFEE restrictions and use: https://support.kraken.com/hc/en-us/articles/204802628 About Kraken Founded in 2011, San Francisco-based Kraken -- http://www.kraken.com--is the largest Bitcoin exchange in euro volume and liquidity and also trading US dollars, British pounds and Japanese yen. Kraken is consistently rated the best and most secure Bitcoin exchange by independent news media. Kraken was the first Bitcoin exchange listed on Bloomberg terminals, the first to pass a cryptographically verifiable proof-of-reserves audit, and is a partner in the first cryptocurrency bank. Kraken is trusted by hundreds of thousands of traders, the Tokyo government's court-appointed trustee, and Germany's BaFin regulated Fidor Bank. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at Baker & Mcckenzie LLP, in Dallas, Texas. The bankruptcy trustee and foreign representative of MtGox Co. Ltd. with respect to the Japan Bankruptcy Proceedings: MtGox Co., Ltd. Office of Bankruptcy Trustee Kojimachi 3 chome building #202 Kojimachi 3-4-1 Chiyoda-ku, Tokyo Tel: +81-3-4588-3922 Attn: Nobuaki Kobayashi The Ontario Superior Court of Justice (Commercial List) on Oct. 3, 2014, ordered, pursuant to Section 272 of the Bankruptcy and Insolvency Act, that the bankruptcy proceedings commenced with respect to MtGox Co., Ltd. -- aka Mt. Gox KK and dba MtGox -- be recognized as a "foreign main proceeding." The Canadian legal counsel to the bankruptcy trustee and foreign representative of MtGox Co., Ltd, are: MILLER THOMSON LLP Scotia Plaza 40 King Street West, Suite 5800 PO Box 1011 Toronto, ON Canada M5H 3S1 Tel: 416-595-8615/8577 Fax: 416-595-8695 Attn: Jeffrey Carhart/ Margaret Sims The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. MYMETICS CORP: Auditor Expresses Going Concern Doubt ---------------------------------------------------- Mymetics Corporation reported a net loss of EUR3.26 million on EUR2.4 million of revenues for the year ended Dec. 31, 2014, compared with a net income of EUR6 million on EUR4.38 million of revenues in 2013. Peterson Sullivan LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has not been able to generate significant revenue, which has resulted in significant losses since inception. Further, the Company's current liabilities exceed its current assets by EUR39,200 and there are limited resources to pay current liabilities. The Company's balance sheet at Dec. 31, 2014, showed EUR11.01 million in total assets, EUR41.1 million in total liabilities and total stockholders' deficit of EUR30.09 million. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/6JBQl3 Switzerland-based Mymetics Corporation is an early stage biotechnology company focused on the research and development of vaccines for infectious diseases. Mymetics currently has five vaccines in its pipeline: HIV-1/AIDS, intra nasal Influenza, Malaria, Herpes Simplex Virus and the RSV vaccine. NATROL INC: Wants Plan Filing Exclusivity Until June 8 ------------------------------------------------------ Leaf123, Inc., f/k/a Natrol, Inc., and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive period to file a plan through and including June 8, 2015, and their exclusive period to solicit acceptances of that plan through and including Aug. 6, 2015. According to the Debtors' counsel, Ian J. Bambrick, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, on March 20, 2015, the Debtors filed the latest iterations of the Plan and Disclosure Statement and on April 2, the Court approved the Disclosure Statement. The Confirmation Hearing is currently scheduled for May 8th. Mr. Bambrick adds that the Debtors reached settlements with (i) Intrepid Investment Bankers, LLC; (ii) Troy Eisner, on behalf of himself and similarly situated class members; (iii) Jessica Augustine, on behalf of herself and similarly situated class members; and (iv) Michael T. Psomas. These settlements, Mr. Bambrick says, resolve four of the few remaining unresolved claims against the Debtors. In addition, the Debtors are moving forward with their motion to estimate the claim of Nature's Products, Inc., which is currently scheduled to be heard by the Court on May 6th. Entering into and effectuating the settlements and resolving the NPI claim will pave the way for the successful implementation of the Plan, Mr. Bambrick tells the Court. Further extending the Exclusive Periods therefore will facilitate an orderly and cost-effective plan process for the benefit of all creditors by providing the Debtors with a meaningful opportunity to build on the progress that has been made in the Chapter 11 Cases without unnecessary interference from non-debtor parties, Mr. Bambrick asserts. Termination of the Exclusive Periods, on the other hand, would give rise to the threat of competing plans, resulting in increased administrative expenses that would diminish the value of the Debtors' estates to the detriment of creditors and equity holders, Mr. Bambrick further asserts. About Natrol, Inc. Headquartered in Chatsworth, Calif., Natrol, Inc., sold herbs and botanicals, multivitamins, specialty and sports nutrition supplements made to support health and wellness throughout all ages and stages of life. Natrol, Inc., was a wholly owned subsidiary of Plethico Pharmaceuticals Limited (BSE: 532739. BO: PLETHICO). Natrol, Inc., and its six affiliates sought bankruptcy protection (Bankr. D. Del. Case No. 14-11446) on June 11, 2014. The case is assigned to Judge Brendan Linehan Shannon. The Debtors are represented by Robert A. Klyman, Esq., and Samuel A. Newman, Esq., at Gibson, Dunn & Crutcher LLP, in Los Angeles, California; and Michael R. Nestor, Esq., Maris J. Kandestin, Esq., and Ian J. Bambrick, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. The Debtors' Claims and Noticing Agent is Epiq Systems INC. The Debtors requested that the Court approve the employment of (i) Jeffrey C. Perea of the firm Conway MacKenzie Management Services, LLC as chief financial officer and for CMS to provide temporary employees to assist Mr. Perea in carrying out his duties; (ii) Stephen P. Milner of the firm Squar, Milner, Peterson, Miranda & Williamson LLP as chief restructuring officer and for CMS to provide temporary employees to assist Mr. Milner in carrying out his duties; (iv) BDO USA, LLP as auditor; (v) TaxGroup Partners as tax services provider. The Official Committee Of Unsecured Creditors tapped Otterbourg P.C. as lead counsel; Pepper Hamilton LLP as Delaware counsel; and CMAG as financial advisors. On Nov. 10, 2014, the Debtors held an auction for the sale of the assets, and Aurobindo Pharma USA Inc. emerged as the successful bidder. The Court approved the sale and the sale closed on Dec. 4, 2014. The Debtors changed their names to Leaf123, Inc., following the sale. * * * The Troubled Company Reporter, on Feb. 23, 2015, reported that Leaf123, Inc., f/k/a Natrol Inc., and its debtor affiliates filed a Chapter 11 plan of liquidation, pursuant to which tax refunds and credits, all shares of capital stock or other Equity Interests in Natrol UK, all Avoidance Actions not otherwise purchased by the Buyer under the Purchase Agreement, the proceeds from prepetition litigation, the proceeds from the Sale Transaction, and certain other assets are being pooled and distributed to persons or entities holding allowed claims in accordance with the priorities of the Bankruptcy Code. The Debtors will present the explanatory Disclosure Statement for approval at a hearing on March 30, 2015, at 10:00 a.m. (prevailing Eastern Time). Objections, if any, must be submitted on or before March 18. The hearing to consider confirmation of the Plan is currently scheduled for May 6, 2015, at 10:00 a.m. (ET). NEPHROS INC: Appoints President, CEO and Chairman ------------------------------------------------- Daron Evans has been appointed president and chief executive officer of Nephros, Inc. Effective upon Mr. Evans's appointment, Dr. Paul Mieyal stepped down as acting CEO of Nephros and will remain as a member of the company's board of directors. Additionally, Lawrence Centella has been appointed Chairman of the Board of Directors. Mr. Evans will receive an initial annualized base salary of $240,000 and will be eligible to receive an annual performance bonus of up to 30% of his annualized base salary. In addition, Mr. Evans was granted a 10-year stock option to purchase an aggregate of 2,184,193 shares of the Company's common stock pursuant to the Company’s 2015 Equity Incentive Plan. "We appreciate Paul's leadership through this period of transition, especially in creating strong momentum for 2015 by capitalizing on the 510K clearance of our hospital ultrapure filters," said Mr. Centella. "We are pleased to have Daron join in a full-time operational role and are committed to growing our water filter business and to commercializing our hemodiafiltration business." "Nephros has a unique opportunity to impact patients' lives on two fronts. Our partnership with leaders in the hospital water treatment market will put our point-of-delivery ultrapure water filters on the front line of infection control," said Mr. Evans. "Separately, our hemodiafiltration technology and our ultrapure dialysis filters have the potential to improve the standard of care in certain patients with end stage kidney disease. I am excited to join the management team at Nephros to capitalize on our opportunity to both help patients and reward shareholders for their commitment." About Daron Evans Mr. Evans has served on Nephros' board of directors since 2013. He is a life sciences executive with over 20 years of financial leadership and operational experience. Mr. Evans was recently Managing Director of PoC Capital, LLC, and is a member of the board of Zumbro Discovery, Inc., an early stage company developing a novel therapy for resistant hypertension. From 2007 to 2013, Mr. Evans was chief financial officer of Nile Therapeutics, Inc., a development-stage cardiovascular company that merged with Capricor Therapeutics, Inc. (CAPR) in 2013. From 2004 to 2007, he held various project management and performance improvement roles at Vistakon Inc. and Scios, Inc., both divisions of Johnson & Johnson Corp. Mr. Evans was a co-founder of Applied Neuronal Network Dynamics, Inc. and served as its president from 2002 to 2004. From 1995 to 2002, Mr. Evans served in various roles at consulting firms Arthur D. Little and Booz Allen & Hamilton. Mr. Evans received his Bachelor of Science in Chemical Engineering from Rice University, his Master of Science in Biomedical Engineering from a joint program at the University of Texas at Arlington and Southwestern Medical School and his MBA from the Fuqua School of Business at Duke University. About Larry Centella Mr. Centella has served as a director of Nephros since January 2001. Mr. Centella served as president of Renal Patient Services, LLC, a company that owned and operated dialysis centers, and served in such capacity from June 1998 to 2014. From 1997 to 1998, Mr. Centella served as executive vice president and chief operating officer of Gambro Healthcare, Inc., an integrated dialysis company that manufactured dialysis equipment, supplied dialysis equipment and operated dialysis clinics. From 1993 to 1997, Mr. Centella served as president and chief executive officer of Gambro Healthcare Patient Services, Inc. (formerly REN Corporation). Prior to that, Mr. Centella served as President of COBE Renal Care, Inc., Gambro Hospal, Inc., LADA International, Inc. and Gambro, Inc. Mr. Centella is also the founder of LADA International, Inc. Mr. Centella received his B.S. from DePaul University. About Nephros River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which it calls ultrafilters, are primarily used in dialysis centers and healthcare facilities for the production of ultrapure water and bicarbonate. Nephros reported a net loss of $7.37 million on $1.74 million of total net revenues for the year ended Dec. 31, 2014, compared to net income of $1.32 million on $1.74 million of total net revenues for the year ended Dec. 31, 2013. As of Dec. 31, 2014, the Company had $3.36 million in total assets, $9.05 million in total liabilities and a $5.68 million stockholders' deficit. Withum Smith+Brown PC, in Morristown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has incurred negative cash flow from operations and recurring net losses since inception. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. NNN 3500: US Bank Asks Court to Allow Claim ------------------------------------------- U.S. Bank National Association, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C23, by and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer, asks the Bankruptcy Court for an order allowing the Trust's claim in its entirety and granting the Trust other and further relief as is appropriate under the circumstances of the bankruptcy cases of NNN 3500 Maple 26, LLC, et al. CWCapital Asset says in a court filing dated March 18, 2015, that the Trust is entitled to reimbursement of: (i) fees and costs incurred prior to Oct. 11, 2012, and (ii) fees and costs incurred in connection with the attempted termination of the property manager. CWCapital Asset claims that the Debtors' objections to pre-default attorneys' fees and costs and attorneys' fees and costs incurred in connection with the attempted termination of the property manager are contradicted by the controlling provisions of the loan documents and the facts of these Bankruptcy Cases. The deed of trust contains numerous provisions that broadly require the Debtors to pay all reasonable attorneys' fees and costs incurred by the Trust in connection with the debt, the deed of trust or the property, without reference to whether there is an existing default under the loan documents. Under the express terms of a prenegotiation agreement dated as of Jan. 25, 2012, the Debtors agreed to pay all expenses, including reasonable attorneys' fees and costs incurred in connection with negotiations between the Trust and the TIC Investors relating to the loan. CWCapital Asset claims that the attorneys' fees and costs incurred prior to Oct. 11, 2012, were all incurred in connection with the debt, the deed of trust, the property or the negotiations. According to CWCapital Asset, the Debtors suggested that the Trust's failure to ultimately terminate the property manager proves that the termination was unnecessary, or that the attempted termination was not an action to enforce or protect the Trust's security interest in the property. CWCapital Asset explains that the Trust was first granted stay relief on May 20, 2013, but, as a result of the Maple 263 motion to reimpose the automatic stay and the Debtors' serial bankruptcy filings, the automatic stay was reimposed and prevented the Trust from terminating the property manager until the Trust was granted in rem stay relief on April 14, 2014. The Trust foreclosed on the property approximately three weeks later, on May 6, 2014, thus, the Trust did not have time between being granted stay relief and the foreclosure to terminate and remove the property manager, CWCapital Asset says. CWCapital Asset is represented by: Gregory A. Cross, Esq. (pro hac vice) Christopher R. Mellott, Esq. (pro hac vice) Frederick W. H. Carter, Esq. Catherine Guastello Allen, Esq. (pro hac vice) Venable LLP 750 E. Pratt Street, Suite 900 Baltimore, Maryland 21202 Tel: (410) 244-7400 Fax: (410) 244-7742 E-mail: fwcarter@venable.com and Steven R. Smith, Esq. Perkins Coie LLP 2001 Ross Avenue, Suite 4225 Dallas, Texas 75201 Tel: (214) 965-7702 Fax: (214) 965-7752 E-mail: SteveSmith@perkinscoie.com About NNN 3500 Maple Entities NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presided over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. On Jan. 23, 2013, the California Bankruptcy Court entered an order transferring venue of the bankruptcy case to the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 13-30402). Judge Harlin DeWayne Hale in Dallas presides over the case. On Aug. 29, 2013, 26 other affiliates filed separate Chapter 11 petitions. These entities are: NNN 3500 Maple 1, LLC, NNN 3500 Maple 2, LLC, NNN 3500 Maple 3, LLC, NNN 3500 Maple 4, LLC, NNN 3500 Maple 5, LLC, NNN 3500 Maple 6, LLC, NNN 3500 Maple 7, LLC, NNN 3500 Maple 10, LLC, NNN 3500 Maple 12, LLC, NNN 3500 Maple 13, LLC, NNN 3500 Maple 14, LLC, NNN 3500 Maple 15, LLC, NNN 3500 Maple 16, LLC, NNN 3500 Maple 17, LLC, NNN 3500 Maple 18, LLC, NNN 3500 Maple 20, LLC, NNN 3500 Maple 22, LLC, NNN 3500 Maple 23, LLC, NNN 3500 Maple 24, LLC, NNN 3500 Maple 27, LLC, NNN 3500 Maple 28, LLC, NNN 3500 Maple 29, LLC, NNN 3500 Maple 30, LLC, NNN 3500 Maple 31, LLC, NNN 3500 Maple 32, LLC, and NNN 3500 Maple 34. Each Debtor holds an ownership interest as a tenant in common in an 18-story commercial office building commonly known as 3500 Maple Avenue, Dallas, Texas 75219. These TICs have not filed for bankruptcy: NNN 3500 Maple 0, LLC, NNN 3500 Maple 8, LLC, NNN 3500 Maple 9, LLC, NNN 3500 Maple 11, LLC, NNN 3500 Maple 25, LLC, and NNN 3500 Maple 35, LLC. Bankruptcy Judge Harlin DeWane Hale denied confirmation of two competing reorganization plans filed in the Chapter 11 cases of NNN 3500 Maple 26 LLC and its affiliated debtors. The Plan is to be funded by an $8.5 million "Cash Infusion" and "Additional Equity Contributions" of around $10 million. Under the Debtors' Plan, the building will undergo substantial rehabilitation. The Plan propose by Strategic Acquisition Partners, LLC, a party that acquired a claim in the case, similar to the Debtors', in an attempted cure and restatement, will replace the Borrower with NewCo under the Loan Documents. NewCo will be divided into Class A and Class B membership interests. An official creditors' committee has not been appointed in this case. Neither a trustee nor an examiner has been appointed. The Debtors are represented by Michelle V. Larson, Esq., at ANDREWS KURTH LLP, and Jeremy B. Reckmeyer, Esq., at ANDREWS KURTH LLP. Strategic Acquisition Partners LLC is represented by Joseph J. Wielebinski, Esq., Davor Rukavina, Esq., Zachery Z. Annable, Esq., and Thomas D. Berghman, Esq., at MUNSCH HARDT KOPF & HARR, P.C. William B. Finkelstein, Esq., Esq., and Jeffrey R. Fine, Esq., at DYKEMA GOSSETT PLLC serve as counsel to Maple Avenue Tower, LLC. As reported by the Troubled Company Reporter on Jan. 19, 2015, the Debtors notified the U.S. Bankruptcy Court that the Effective Date of the Joint Chapter 11 Plan occurred on Dec. 23, 2014, and, as a result, the Plan has been substantially consummated. The Court in November 2014 entered an order confirming the Debtors' Plan. O&S TRUCKING: 8th Cir. BAP Tosses Appeal Over Daimler Claim ----------------------------------------------------------- The Bankruptcy Appellate Panel of the Eighth Circuit dismissed the appeal taken by O&S Trucking, Inc. from three bankruptcy court orders related to a claim filed against it by Mercedes Benz Financial Services USA, doing business as Daimler Truck Financial. O&S Trucking leased trucks from Daimler. Daimler filed an amended proof of claim in the amount of $2,743,171.94. The debtor objected to the claim. On May 13, 2014, the court entered an order sustaining the debtor's objection, in part, and determining the status of the secured claim. The court found that as of May 5, 2014, all but 23 of the vehicles had been surrendered to Daimler. At that time, the debtor had made adequate protection payments in the amount of $1,577,488.01. The court credited those adequate protection payments toward the total amount of the debt owed, before any determination was made as to how much of that debt was secured. Ultimately, the court found that Daimler had an allowed secured claim in the amount of $1,425,309.40 and an unsecured claim in the amount of $819,183.48, less any proceeds received by Daimler from the sale of vehicles previously surrendered by the debtor. The court also determined that 25% of the debtor's operating fleet was comprised of Daimler's collateral. Therefore, Daimler was entitled to a security interest in 25% of the total amount of funds in the debtor's accounts, a sum of $51,909.40. On May 27, 2014, the debtor made a motion for reconsideration of the court's May 13 order. The debtor argued that the court's valuation of the trucks, which was lower than the parties' agreed valuation, was in error. As a result of the lower valuation, the debtor claimed it had paid an extra $25,980 in adequate protection payments because the payments were calculated using a percentage of the values of the trucks. If the values had been lower, as the court had determined they were, then the monthly payments would have necessarily been smaller. According to the debtor, the adequate protection payments were made to compensate the debtor for the eroding value of the trucks, therefore, the payments made in excess of the erosion value should be credited against the secured portion of Daimler's claim. On June 6, 2014, the court entered an order denying the debtor's motion for reconsideration. On June 19, 2014, the debtor filed a notice of appeal of the May 13 and June 6 orders. Both orders were interlocutory and the debtor did not request, nor did it meet the requirements, for a grant of leave to appeal. The Eighth Circuit BAP dismissed the appeal for lack of jurisdiction on September 15, 2014. Meanwhile, on June 20, 2014, the debtor proposed a third amended plan of reorganization. It provided treatment of Daimler's claim as follows: Subject to adjustments, the Class 3 Claimant shall be paid the total sum of values listed below on all equipment retained by Debtor as of the Effective Date with interest at the rate of 4.25% per annum over a term in accordance with the following schedule of equipment: "Type Year Value Term Freightliner Cascadia 2010 $62,100 36 months Freightliner Century 2007 $34,775 12 months Freightliner Columbia 2007 $34,525 12 months together with an additional amount of $51,909.40. The components of the Class 3 Secured Claim consisting of the foregoing equipment values and additional cash amounts are based on the rulings by the Bankruptcy Court as set forth in the Order Sustaining, in Part, Debtor's Objection to Claim of Mercedes Benz Financial Services USA, LLC d/b/a Daimler Truck Financial and Determining Secured Status of Daimler's Claim (the "Daimler Decision")." The total amount of the Class 3 Secured Claim is subject to adjustment based on the following: a) The final outcome of the pending appeal of the Daimler Decision by Debtor and any subsequent appeal; and b) Reduction of the Class 3 Secured Claim based on adequate protection payments to Daimler after issuance of the Daimler Decision. The plan was confirmed on October 2, 2014. On October 15, 2014, the debtor filed a notice of appeal. The notice indicates that the debtor was appealing from three orders: 1) Order Sustaining in part, Debtor's objection to Claim of Mercedes Benz Financial Services USA, LLC d/b/a Daimler Truck Financial and Determining Secured Status pf Daimler's Claim, dated May 13, 2014; 2) Order Denying Debtor's Motion for Reconsideration of the Order Sustaining in part, Debtor's objection to Claim of Mercedes Benz Financial Services USA, LLC d/b/a Daimler Truck Financial and Determining Secured Status pf Daimler's Claim, dated June 6, 2014; and 3) Order Confirming Final Approval of Third Amended Disclosure Statement and Confirming Third Amended Plan of Reorganization (As Modified), dated October 2, 2014. In an order dated April 7, 2015 penned by Bankruptcy Judge Robert J. Kressel and available at http://is.gd/49wK35from Leagle.com: -- the court found that the debtor is not an aggrieved party and does not have standing to appeal the order confirming its plan; and -- as to the debtor's argument alleging that the bankruptcy court's erroneous valuation of the trucks resulted in overpayment of adequate protection payments, the court found the alleged valuations are moot, if not irrelevant, because the debtor now possesses no trucks. The appellate case is captioned, O&S Trucking, Inc. Debtor-Appellant v. Mercedes Benz Financial Services USA, doing business as Daimler Truck Financial Claimant-Appellee, NO. 14-6036 (8th Cir. BAP). O&S Trucking, which provides brokerage and intermodal services located in Springfield, Missouri, filed for Chapter 11 bankruptcy protection on May 30, 2012 (Bankr. W.D. Mo., Case No. 12-61003). The case was assigned to Judge Arthur B. Federman. The Debtor's counsel was Jonathan A. Margolies, Esq., at MCDOWELL RICE SMITH & BUCHANAN, PC, in Kansas City, Missouri. OPTIM ENERGY: Disclosure Statement Hearing Adjourned to May 13 -------------------------------------------------------------- The hearing to consider the adequacy of the disclosure statement explaining Optim Energy, LLC, et al.'s joint plan of reorganization has been adjourned to and will continue on May 13, 2015, at 10:00 a.m. ET. Lyondell Chemical Company and Walnut Creek Mining Company, an indirect wholly owned subsidiary of Blackstone Energy Partners L.P., objected to the Disclosure Statement, complaining that the outline does not contain adequate information. Walnut Creek complains that not only does the Disclosure Statement fail in providing adequate information, none of the eight subplans are confirmable under Section 1129 of the Bankruptcy Code. Lyondell complained that the Disclosure Statement fails to provide adequate information regarding the Debtors' proposed assumption, assumption and assignment, or, alternatively, rejection, of the Debtors' executory contracts and unexpired lease of non-residential real property with Lyondell, which are inextricably integrated agreements. Moreover, Lyondell complains that the Disclosure Statement describes a plan of reorganization that fails to provide for a cure of Optima Altura's breach of the Steam and Electric Power Sales Agreement incident to assumption of that agreement. The Debtors, in response to the Disclosure Statement objections, assert that the objections should not prevent them from proceeding with solicitation of their Plan. With respect to Walnut Creek's objection, the Debtors argue that Walnut Creek's parent, Blackstone, has claims against only two of the liquidating debtors and thus it has no standing to object to the other six of the Debtors' subplans. The Debtors maintain that the Disclosure Statement should be approved. The Debtors filed an amended Disclosure Statement dated April 21, 2015, a blacklined version of which is available at http://bankrupt.com/misc/OPTIMds0421.pdfto address the objections raised by the objecting parties. A chart illustrating the Debtors' responses to objections to the Disclosure Statement is available at http://bankrupt.com/misc/OPTIMdsrespchart.pdf About Optim Energy Optim Energy, LLC, and its affiliates are power plant owners principally engaged in the production of energy in Texas's deregulated energy market. Optim owns and operates three power plants in eastern Texas: the Twin Oaks plant in Robertson County, Texas, the Altura Cogen plant in Harris County, Texas and the Cedar Bayou plant in Chambers County, Texas. The Altura and Cedar Bayou plants are fueled by natural gas, and the third is coal-fired. Optim Energy and its affiliates sought Chapter 11 protection from creditors (Bankr. D. Del. Lead Case No. 14-10262) on Feb. 12, 2014. The Debtors have tapped Bracewell & Giuliani LLP and Morris, Nichols, Arsht & Tunnell LLP as attorneys; Protiviti Inc. as restructuring advisors; and Prime Clerk LLC as claims agent. Optim Energy, LLC scheduled $6.95 million in assets and $717 million in liabilities. Optim Energy Cedar Bayou 4, LLC, disclosed $184 million in assets and $718 million in liabilities as of the Chapter 11 filing. The Debtors have $713 million of outstanding principal indebtedness. On Feb. 27, 2014, Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the Bankruptcy Court that she was unable to appoint an official committee of unsecured creditors in the Debtors' cases. The U.S. Trustee explained that there were insufficient responses to her communication/contact for service on the committee. OPTIMUMBANK HOLDINGS: Gets Non-Compliance Notice From NASDAQ Anew ----------------------------------------------------------------- Optimumbank Holdings, Inc. received on April 15, 2015, a letter from NASDAQ Stock Market indicating that the Company no longer complies with Rule 4350(d)(2)(A). Sam Borek, a member of the Company's Board of Directors and Audit Committee, passed away on Dec. 12, 2014. Mr. Borek's death reduced the number of members of the audit committee to two and thus caused the Company to become non-compliant with Rule 4350(d)(2)(A) of the Nasdaq Stock Market, which requires that every Nasdaq-listed company have an audit committee of at least three members. NASDAQ provided the Company with a cure period in order to regain compliance as follows: * until the earlier of the Company's next annual shareholders' meeting or Dec. 12, 2015; or * if the next annual shareholders' meeting is held before June 9, 2015, then the Company must evidence compliance no later than June 9, 2015. The Company intends to add at least one additional independent member to the Audit Committee by the date required by Nasdaq Listing Rule 5605. The Company is currently not in compliance with Listing Rule 5550(a)(2) because the closing bid price per share of its common stock has been below $1.00 per share. About OptimumBank Holdings OptimumBank Holdings, Inc., headquartered in Fort Lauderdale, Fla., is a one-bank holding company and owns 100 percent of OptimumBank, a state (Florida)-chartered commercial bank. The Company offers a wide array of lending and retail banking products to individuals and businesses in Broward, Miami-Dade and Palm Beach Counties through its executive offices and three branch offices in Broward County, Florida. Optimumbank reported net earnings of $1.6 million on $5.39 million of total interest income for the year ended Dec. 31, 2014, compared to a net loss of $7.07 million on $5.28 million of total interest income for the year ended Dec. 31, 2013. As of Dec. 31, 2014, the Company had $125 million in total assets, $122 million in total liabilities, and $2.97 million in total stockholders' equity. Hacker, Johnson & Smith PA, in Fort Lauderdale, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014. The independent auditors noted that the Company is in technical default with respect to its Junior Subordinated Debenture. The holders of the Debt Securities could demand immediate payment of the outstanding debt of $5,155,000 and accrued and unpaid interest, which raises substantial doubt about the Company's ability to continue as a going concern. Regulatory Matters Effective April 16, 2010, the Bank consented to the issuance of a consent order by the Federal Deposit Insurance Corporation and the Florida Office of Financial Regulation, also effective as of April 16, 2010. PILOT TRAVEL: S&P Raises CCR to 'BB+' on Improving Performance -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Knoxville, Tenn.-based Pilot Travel Centers LLC to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised its issue-level rating Pilot's $4.45 billion senior secured debt to 'BB+' from 'BB'. The recovery rating on the debt remains '3', indicating S&P's expectation for meaningful recovery (50% to 70%) of principal in the event of a payment default. S&P's recovery expectations are in the lower half of the 50% to 70% range. "The upgrade reflects the company's financial performance, which has exceeded our expectations, as a result of the improving U.S. economy and low gas prices. Although we believe growth could moderate this year, we continue to view the company favorably when compared with peers," said credit analyst Samantha Stone. "The business risk profile will sustain a position at the higher end of the "fair" category over the intermediate term given its solid competitive position. We believe the company's competitive position and prospective credit metrics support the 'BB+' rating." The stable outlook reflects S&P's expectation that Pilot will generate consistent profitability, continue to grow organically and through small-size acquisitions, while paying dividends, but maintain adjusted leverage in the 3x area over the next two years. S&P could lower the ratings credit protection measures weaken as a result of a more aggressive financial policy, such as higher-than-expected discretionary dividends, and a sharp decline in fuel margins and the inability to pass on cost increases. S&P would likely reassess financial risk to "aggressive" or view the company as in line with peers, if leverage rises to the mid-3x area and FFO to debt approaches 20%. An upgrade into the investment-grade category is unlikely over the intermediate term. To consider an upgrade, the company would need to significantly increase scale in the earnings base and further diversify to offset fuel volatility and increase EBITDA margins, in line with investment-grade retailers. In addition, an upgrade would be predicated on management's establishment of financial policies more consistent with an investment-grade corporate credit rating. PLASTIC2OIL INC: Amends 2014 Form 10-K -------------------------------------- Plastic2Oil, Inc., filed with the Securities and Exchange Commission an amended annual report for the year ended Dec. 31, 2014, for these purposes: * to provide the information required by Items 10, 11, 12, 13 and 14 of Part III of Form 10-K because a definitive proxy statement containing such information will not be filed by the Company within 120 days after the end of the fiscal year covered by the Original 10-K; * to provide the certifications required by Item 15 of Part IV of Form 10-K in connection with this Amended Report; and * to update the Table of Contents to reflect the above changes. A full-text copy of the Amended Report is avaiable for free at: http://is.gd/7hOoUL About Plastic2Oil Plastic2Oil, Inc., formerly JBI Inc., is a North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement. The Company's Plastic2Oil (P2O) is a process designed to provide immediate economic benefit for industry, communities and government organizations with waste plastic recycling challenges. It is also focused on the creation of green employment opportunities and a reduction in the cost of plastic recycling programs for municipalities and business. The Company's fuel products include No. 6 Fuel, No. 2 Fuel (diesel, petroleum distillate), Naphtha, Petcoke (carbon black) and Off-Gases. No. 6 Fuel is heavy fuel used in industrial boilers and ships. No. 2 Fuel is a mid-range fuel known as furnace oil or diesel. Naphtha is a light fuel that is used as a cut feedstock for ethanol or as white gasoline in high and regular grade road certified fuels. Plastic2Oil reported a net loss attributable to common shareholders of $8.51 million on $59,000 of sales for the year ended Dec. 31, 2014, compared to a net loss attributable to common shareholders of $16.8 million on $693,000 of sales for the year ended Dec. 31, 2013. As of Dec. 31, 2014, the Company had $6.98 million in total assets, $8.36 million in total liabilities and a $1.37 million total stockholders' deficit. MNP LLP, in Toronto, Canada, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has experienced negative cash flows from operations since inception and has accumulated a significant deficit which raises substantial doubt about its ability to continue as a going concern. POSTMEDIA NETWORK: Moody's Rates C$140MM First Lien Notes ''Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Postmedia Network Inc.'s C$140 million of first lien notes. Postmedia's B3 corporate family rating, B3-PD probability of default rating, Ba3 first lien notes rating, Caa1 second-lien notes rating, SGL-3 speculative grade liquidity rating, and stable ratings outlook remain unchanged. Postmedia's C$140 million first lien notes were converted from C$140 million of subscription receipts an existing note holder purchased when the company announced the acquisition of the Sun Media assets in October 2014. The acquisition closed on April 13, 2015. Rating Assigned: -- C$140M First Lien Notes due 2017, Ba3 (LGD2) Postmedia's B3 CFR primarily reflects continuing high single-digit revenue decline and slow progress in the transition to digital, mitigated by ongoing cost reductions, positive free cash flow generation which is being used to reduce debt and Moody's expectation that leverage will be maintained around 4x through the next 12 to 18 months (pro forma adjusted Debt/EBITDA is 3.8x). Although Postmedia has been transitioning to digital, the rating considers that digital's low entry barriers and non-existent geographic boundaries will limit its potential to compensate for the decline in print revenue. Postmedia has adequate liquidity (SGL-3). Postmedia's pro forma cash is around C$40 million and the company is expected to generate annual free cash flow around C$65 million. Moody's has not considered the impact of the company's C$20 million asset-backed revolver in the SGL rating as the facility matures in less than a year (July 2015). Postmedia has limited alternative liquidity generating potential as individual asset sale proceeds above C$10 million must be used to repay debt rather than to enhance liquidity. The outlook is stable and reflects Moody's expectation that the combined company's enhanced cash flow generating capacity will enable it to pay down debt and maintain leverage at a level which is supportive of the B3 rating through the next 12 to 18 months. A ratings upgrade will be considered if the company reverses the decline in revenue and EBITDA and sustains adjusted Debt/ EBITDA below 3.5x and EBITDA - Capex/ Interest above 2x. Postmedia's ratings will be downgraded if its liquidity deteriorates, likely due to continued negative free cash flow generation or if deterioration in revenue and earnings causes adjusted Debt/ EBITDA to be sustained above 6x. The principal methodology used in this rating was Global Publishing Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Postmedia Network Inc. is a publisher of one national newspaper, nine metropolitan daily newspapers and five non-daily community newspapers in Canada. Revenue for the last twelve months ended November 30, 2014 was C$650 million. The company is headquartered in Toronto, Ontario, Canada. POW! ENTERTAINMENT: Incurs $94.7K Net Loss for in 2014 ------------------------------------------------------ POW! Entertainment, Inc., reported a net loss of $94,700 on $2.39 million of revenues for the year ended Dec. 31, 2014, compared with a net loss of $393,000 on $2.38 million of revenues in the prior year. Rose, Snyder & Jacobs LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has incurred recurring net losses and has been reliant on the annual cash flows from its contract with Silver Creek Pictures, which expired in December 2014. The Company's balance sheet at Dec. 31, 2014, showed $1 million in total assets, $4.56 million in total liabilities, $1.23 million in long term deferred compensation, and a stockholders' deficit of $4.79 million. A copy of the Form 10-K filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/ryotyQ POW! Entertainment, Inc., a multimedia production and licensing company, creates and licenses animated and live-action fantasy and superhero entertainment content and merchandise. It develops originally created franchises for new media, such as online digital content and video games, as well as for traditional entertainment media, such as feature length films in live action and animation, DVD, live entertainment, television programming, merchandising, and related ancillary markets. The company was incorporated in 1998 and is based in Beverly Hills, California. PRINCE MINERAL: S&P Lowers CCR to 'B-', Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on New York-based Prince Mineral Holding Corp. to 'B-' from 'B'. The outlook is stable. S&P also lowered the issue-level rating on the company's 11.5% senior secured notes to 'B-' from 'B'. The recovery rating on the debt remains '3', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of payment default. "Our stable rating outlook on Prince Mineral Holding Corp. reflects our view that the company's operating performance will support credit measures that are in line with our expectations for the rating," said Standard & Poor's credit analyst Michael Maggi. "Specifically, we expect debt to EBITDA to be in the range of 5.5x to 6x at the end of 2015 depending on the level of acquisitions, with FFO to debt between 5% and 7% and EBITDA interest coverage between 1.25x and 1.75x." S&P could lower the rating if the company's liquidity deteriorated such that S&P viewed it to be "less than adequate" or if credit measures were to weaken further over a sustained period. This could occur if there were a major change in industry dynamics, revolving credit facility drawings increased meaningfully, or the company pursued significant debt-financed acquisitions or dividends such that EBITDA margins were pressured further, resulting in EBITDA interest coverage in the range of 1x to 1.25x and debt to EBITDA above 6x on a sustained basis. A higher rating is less likely within the next 12 months, given S&P's view of the company's vulnerable business risk profile and its acquisitive growth strategy. A positive rating action could occur, however, if Prince continued to grow by successfully integrating future acquisitions while maintaining or improving margins and credit measures. PRISO ACQUISITION: Moody's Assigns B2 Corp. Family Rating --------------------------------------------------------- Moody's Investors Service assigned a first-time B2 Corporate Family Rating and B2-PD Probability of Default Rating to PriSo Acquisition Corporation, the direct holding company of PrimeSource Building Products, Inc. (collectively "PrimeSource"), a North American wholesale distributor of building materials, following the leveraged buyout of PrimeSource by Platinum Equity. In a related rating action, Moody's assigned a B2 rating to the proposed $325 million senior secured term loan maturing 2022, and a Caa1 rating to the proposed $230 million senior unsecured notes due 2023. The rating outlook is stable. Platinum Equity, through its affiliates, is acquiring PrimeSource from ITOCHU Corp. for approximately $840 million, excluding transaction fees. PrimeSource's new capital structure will consist of a $300 million asset-based revolving credit facility expiring 2020 (unrated) of which $100 million will be used for the buyout, a $325 million senior secured term loan, and $230 million of senior unsecured notes. Platinum Equity's contribution is in the form of common equity. Moody's took the following rating actions on PriSo Acquisition Corporation: -- Corporate Family Rating assigned B2; -- Probability of Default Rating assigned B2-PD; -- Senior Secured term Loan maturing 2022 assigned B2 (LGD4); -- Senior Unsecured Notes due 2023 assigned Caa1 (LGD5). -- Rating Outlook is Stable PrimeSource's B2 Corporate Family Rating reflects the company's leveraged capital structure following the buyout of the company by affiliates of Platinum Equity from ITOCHU Corp. Balance sheet debt will approximate $655 million at closing, resulting in adjusted leverage of about 6.5x on a pro forma basis as of December 2014. With the prospects of some operating improvements and reduced borrowings under the company's revolving credit facility, Moody's projects adjusted debt-to-EBITDA will approach 5.5x near year-end 2016. Our calculations include Moody's standard lease adjustments and an add-back to account for the professional fees associated with the leveraged buyout. PrimeSource's Canadian operations are excluded from our analysis since management indicated that the Canadian operation will be distributed out from the borrower into a separate entity that is financed on its own, and not be part of the PrimeSource borrower going forward. A significant risk is that debt reduction from excess free cash flow does not materialize as this would slow the improvement in credit metrics. Offsetting PrimeSource's leveraged capital structure is Moody's expectation for gradual improvement in the EBITDA margin, approaching high single-digit levels, due to increased volumes and better pricing. Despite the large amount of pro forma balance sheet debt and related interest expense, Moody's expects interest coverage, measured as (EBITDA-CapEx)- to-interest expense, could exceed 2.0x over the next 12 to 18 months. PrimeSource is benefiting from the currently low interest rate environment for its debt. With better working capital management and low capital expenditure needs, Moody's estimates free cash flow--to-debt nearing 5.5% near the end of 2016. PrimeSource is also benefiting from strong repair and remodeling activity and solid new housing construction, the main drivers of the company's revenues. PrimeSource's extensive product sourcing capabilities, physical distribution network and long-standing customer relationships are the key factors supporting its market position since the company is not a product manufacturer. Revenue is exposed to highly cyclical end markets, which can weaken cash flow and debt-service capabilities in economic downturns. PrimeSource also has high customer concentration among its top two customers which includes large retailers that have alternative sourcing capabilities. Moody's believes this customer concentration weakens PrimeSource's negotiating leverage for sourcing, pricing, shelf space and marketing support; thus a potential shift in customer purchasing can negatively impact the company's revenue and cash flow. This risk may not be offset by long-tenured relationships. The company is also exposed to event risks such as leveraging shareholder distributions and acquisitions under private equity ownership. PrimeSource's good liquidity profile provides financial flexibility to meet potentially higher seasonal demand and to satisfy its debt service requirements over the next 12-15 months. PrimeSource's liquidity is supported by its ability to generate free cash flow throughout the year, ample revolver availability, the absence of any debt maturities beyond modest 1% required annual term loan amortization until the revolver matures in 2020, the absence of financial maintenance covenants on the term loan, and Moody's view that availability will not decline below the 10% level that would trigger the springing minimum fixed charge ratio in the revolver. The stable rating outlook reflects Moody's view that PrimeSource's operating performance will continue to improve and that free cash flow will be used for debt reduction, resulting in a reduction in debt-to-EBITDA leverage to a mid 5.5x range by year-end 2016. The B2 rating assigned to the senior secured term loan due 2022 is the same as the Corporate Family Rating, as it represents the preponderance of debt in the proposed capital structure. The term loan will be secured by a first lien on all of PrimeSource's assets not pledged to secure the asset-based revolving credit facility. It will also have a second lien on the assets securing the revolver on a first lien basis, consisting of cash, accounts receivable and inventory. The term loan will be guaranteed by PrimeSource's domestic subsidiaries including PrimeSource Building Products, Inc. The term loan also benefits from $230 million of junior unsecured capital, which would absorb the first losses in a recovery scenario. The Caa1 rating assigned to the senior unsecured notes due 2023 is two notches below the Corporate Family Rating, reflecting its position as the junior-most debt in the capital structure and the effective subordination to $625 million of senior secured committed credit facilities. The notes will be guaranteed also by PrimeSource's domestic subsidiaries including PrimeSource Building Products, Inc. Moody's does not expect to upgrade PrimeSource's ratings over the intermediate term, primarily due to the company's elevated debt leverage. However, if the company continues to benefit from operating efficiencies and growth in its end markets, resulting in Debt-to-EBITDA sustained near 4.0x and (EBITDA-CapEx)-to-interest approaches 2.5x (all ratios include Moody's standard adjustments), then an upgrade could ensue. A better liquidity profile, and permanent debt reduction may support upward rating pressures as well. A downgrade could occur if PrimeSource's operating performance falls below Moody's expectations such that debt-to-EBITDA is sustained above 6.0 times or (EBITDA-CapEx)-to-interest remains below 1.5 times (all ratios include Moody's standard adjustments). Excessive usage of the revolving credit facility for bolt-on acquisitions, large debt-financed acquisitions, or shareholder distributions, or a deterioration in the company's liquidity could pressure the ratings as well. PrimeSource Building Products, Inc., headquartered in Irving, TX, is a North American distributor of building materials. PrimeSource sells its products to building materials retailers and other distributors that support repair and remodeling activity and new housing construction. Following the completion of the acquisition, Platinum Equity, through its affiliates, will be the owner of PrimeSource. Revenues for the 12 months through March 28, 2015 are expected to total about $1.25 billion. 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. PROJECT PORSCHE: S&P Lowers CCR to 'CC' on Recapitalization Plan ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Bloomington, Minn.-based Project Porsche Holdings Corp. to 'CC' from 'CCC+'. The rating outlook is negative. At the same time, S&P lowered its issue-level rating on Project Porsche's wholly-owned subsidiary Edmentum Inc.'s $250 million senior secured first-lien credit facility, which consists of a $225 million first-lien term loan due May 2018 and a $25 million revolving credit facility due May 2017, to 'CCC-' from 'B-'. The recovery rating remains '2', indicating S&P's expectation for substantial (70% to 90%; higher half of the range) recovery in the event of payment default. S&P also lowered its issue-level rating on Edmentum's $140 million second-lien term loan due May 2019 to 'C' from 'CCC-'. The recovery rating remains '6', indicating S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. "The ratings actions follow Project Porsche's announcement that it has reached a recapitalization agreement with its lenders and financial sponsor," said Standard & Poor's credit analyst Tuan Duong. The rating downgrade reflects S&P's view that the debt exchange offer Project Porsche will undertake is distressed and not opportunistic, and that the proposed offer implies second-lien lenders will receive less value than the promised original amount of the $140 million second-lien loan," he added. The negative rating outlook reflects S&P's expectation that it will lower the corporate credit rating on the company to 'SD' when the distressed exchange offer, which S&P views as a default on some of its debt obligations, is consummated. PROLOGIS INC: Fitch Affirms 'BB+' Rating on $78.2MM Preferred Stock ------------------------------------------------------------------- -- $78.2 million preferred stock at 'BB+'. Fitch Ratings has affirmed at 'BBB' the ratings for Prologis, Inc. (NYSE: PLD) and certain rated subsidiaries (collectively, Prologis or the company) following the announcement that the company's 55-45 consolidated joint venture with Norges Bank Investment Management (NBIM), Prologis U.S. Logistics Venture, has agreed to acquire the real estate assets and operating platform of KTR Capital Partners (KTR) and its affiliates for a total purchase price of $5.9 billion including the assumption of debt. The Rating Outlook is Positive. KEY RATING DRIVERS The Positive Outlook reflects Fitch's expectation that the company's pro rata leverage will remain around 7.0x, initially pro forma for the KTR transaction. Fitch also expects leverage to trend in the 6.0x - 6.5x range over the next 12-to-24 months, which would be consistent with a 'BBB+' rating. Favorable credit elements of the KTR transaction include the acquisition of a high quality portfolio largely located near major ports in Southern California, New York-New Jersey, Chicago, San Francisco and Dallas (markets in which Prologis already has a significant presence) and a strong tenant roster with exposure to e-commerce tenants, a growing segment in the industrial real estate market. Prologis has indicated that it intends to fund the KTR transaction on a leverage-neutral basis; however, there are uncertainties surrounding the levels of proceeds from asset sales, equity, and corporate level debt that will ultimately be used to fund the transaction. Under the agency's base case, Fitch expects that $630 million of term loan borrowings, the issuance of $230 million of operating partnership units, the assumption of $385 million of pro rata mortgage debt, $500 million of asset sales and hedge settlement proceeds, and $1.5 billion of equity proceeds will comprise the consideration for Prologis' $3.2 billion share of the KTR transaction. A deviation from funding the transaction on a leverage neutral basis would slow the trajectory of the company's de-leveraging and could place pressure on the Positive Outlook. In addition, it is likely that Prologis' development pipeline on a pro rata basis will continue in the coming years since the KTR development portfolio includes 3.6 million square feet of properties under development and land holdings. PLD's pro rata cost to complete development compared to total asset value remains low when compared with the company's levels during the previous upcycle. High Leverage Expected to Decline The company's 6.9x pro rata debt-to-EBITDA ratio as of March 31, 2015 was appropriate for the 'BBB' rating. Fitch projects that pro rata leverage will be 6.9x initially pro forma for KTR, and trend in the 6.0x - 6.5x range over the next 12-to-24 months. Fitch's leverage threshold of 6.5x for a 'BBB+' rating for Prologis acknowledges the company's strong asset quality and lower portfolio yields. In a stress case whereby the company does not issue any equity and thus the only equity component of the transaction is the $230 million of operating partnership units, leverage would be 7.5x, which would be weak for the 'BBB' rating. Adequate Liquidity; No Corporate Debt Maturities Until 2017 Fitch expects the company will continue to maintain sufficient liquidity before considering proceeds from dispositions and contributions. While Fitch anticipates that the company will continue to match-fund its development expenditures with dispositions and contributions, maintaining sufficient liquidity before the match-funding reduces the risks to unsecured bondholders during periods of capital markets dislocation. The company's liquidity coverage ratio is 1.4x for the period April 1, 2015 to Dec. 31, 2016 pro forma for the KTR transaction. Fitch defines liquidity coverage as liquidity sources divided by uses. Liquidity sources include unrestricted cash, availability under revolving credit facilities pro forma, and projected retained cash flows from operating activities. Liquidity uses include pro rata debt maturities after extension options at PLD's option, projected recurring capital expenditures, and pro rata cost to complete development. Moreover, the company has no corporate maturities until 2017. Internally generated liquidity is moderate as the company's adjusted funds from operations (AFFO) payout ratio was 88.8% in 1Q'15 compared to 88.7% in 2014 and 95.4% in 2013. Based on the current payout ratio, the company would retain approximately $95 million in annual cash flow. Improving Fundamentals and Fixed-Charge Coverage Positive net absorption continues to benefit Prologis' portfolio while macro industrial indicators such as manufacturing levels, housing starts and homebuilder confidence indicate that demand may continue to outpace supply. The company's average net effective rent change on rollover was 9.7% in 1Q'15, up from 7.4% on average during 2014 and 4.5% on average in 2013. Occupancy was 95.9% as of March 31, 2015 compared to 96.1% as of Dec. 31, 2014, up from 95.0% as of Dec. 31, 2013 and cash same-store net operating income (NOI) grew by 3.9% in 1Q'15, 4.5% on average in 2014 and 1.8% on average in 2013. Pro rata fixed-charge coverage (FCC) is 2.8x in 1Q'15 pro forma for the KTR transaction, up from 2.7x in 1Q'15, 2.4x in 2014 and 1.8x in 2013. Fitch defines pro rata FCC as pro rata recurring operating EBITDA less pro rata recurring capital expenditures less straight-line rent adjustments divided by pro rata interest incurred and preferred stock dividends. Fitch projects that rental rate growth in the high single digits (since in-place rents over the next several years remain approximately 10% below market rents) will result in 3% - 4% same store NOI (SSNOI) growth over the next several years. This should result in FCC sustaining in the 2.5x to 3.0x range, which is strong for a 'BBB' rating. Under the Fitch stress case, FCC would remain around 2.5x, which is also strong for the rating. Pro Rata Treatment Fitch looks primarily at pro rata leverage (pro rata net debt-to-pro rata recurring operating EBITDA) rather than consolidated metrics given Fitch's expectation that PLD has and would in the future support or recapitalize unconsolidated entities, its agnostic view toward property management for consolidated and unconsolidated assets, and its focus on pro rata portfolio and debt metrics. As a supplementary measure, Fitch calculates consolidated leverage as consolidated net debt-to consolidated recurring operating EBITDA plus Fitch's estimate of recurring cash distributions from unconsolidated co-investment ventures, since these cash distributions benefit unsecured bondholders. However, this supplementary measure may understate leverage given the inclusion of cash distributions from joint ventures but exclusion of the corresponding non-recourse debt. Excellent Access to Capital The company issued $7.1 billion and EUR2.5 billion in unsecured bonds since 2009 (using the proceeds to refinance and repurchase bonds and for general corporate purposes) and $3.7 billion of follow-on common equity at a weighted average discount of 1.8% to consensus estimated net asset value. The company also has a $750 million at-the-market (ATM) equity offering program, and in December received proceeds of $353.9 million through the issuance of equity securities from the exercise of a warrant issued in connection with the formation of Prologis European Logistics Partners and through the ATM program. Strategic capital is another important source of funding for PLD, as evidenced by the KTR transaction being completed via a partnership with NBIM. The company rationalized and restructured certain of its investment ventures to increase the permanency of its capital (e.g., FIBRA Prologis and Nippon Prologis REIT) and reduce the inter-dependence over the past several years, which Fitch views favorably. Global Platform; KTR Transaction Improves Portfolio Quality Prologis had $52.6 billion of assets under management as of March 31, 2015 and the global platform limits the risk of over-exposure to any one region's fundamentals. PLD derived 83.2% of its 1Q'15 NOI from Prologis-defined global markets (59.3% in the Americas, 20.4% in Europe, and 3.5% in Asia), and the remaining 16.8% of 1Q'15 NOI was derived from regional and other markets. The KTR transaction will increase the company's exposure to major U.S. markets, including Southern California (21.9% of pro forma U.S. NOI), New York-New Jersey (10.1%), Chicago (9.8%), San Francisco Bay Area (7.0%) and Dallas (6.0%). The KTR transaction will also increase the company's exposure to e-commerce, a growing segment in the industrial real estate market, as evidenced by the increase in annualized base rent from Amazon.com to 2.4% pro forma, compared to 1.0% as of March 31, 2015. Other top tenants pro forma include DHL (1.8%), Kuehne & Nagel (1.3%), CEVA Logistics (1.3%), and Geodis (1.0%). Adequate Unencumbered Asset Coverage Prologis has adequate contingent liquidity with a stressed value of unencumbered assets (1Q'15 unencumbered NOI divided by a stressed 8% capitalization rate) to net unsecured debt of 2.2x. When applying a 50% haircut to the book value of land held and a 25% haircut to construction in progress, unencumbered asset coverage improves to 2.4x. Increasing Speculative Development PLD's strategy of developing industrial properties centers on value creation and complements the company's core business of collecting rent from owned assets. After construction and stabilization, the company either holds such assets on its balance sheet or contributes them to managed co-investment ventures. PLD endeavors to match-fund development expenditures and acquisitions with cash from dispositions or contributions of assets to the ventures. If the company does not anticipate disposition or contribution volumes, PLD management has stated that the company would scale back development starts and acquisitions accordingly, though the sector has a mixed track record of forecasting market cycles. Development is substantially smaller today than in the previous upcycle with costs to complete equal to 4.0% of undepreciated assets at March 31, 2015 (3.2% pro rata) compared with 14.1% at year-end 2007. However, speculative development increased over the past several years to 83.5% as of March 31, 2015 from 72.2% at Dec. 31, 2014 and 58.2% as of Dec. 31, 2013, which illustrates elevated lease-up risk. However, the company estimates that approximately 75% of its future development is comprised of speculative projects. The KTR development portfolio increases the likelihood that development will continue in the coming years. Preferred Stock Notching The two-notch differential between PLD's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB'. Based on Fitch research titled 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. Exchangeable Senior Notes Ratings Withdrawal Fitch has withdrawn the 'BBB' rating on Prologis, L.P.'s $460 million senior unsecured exchangeable notes. On March 16, 2015, the company announced the exchange of the exchangeable notes for a total of 11.9 million shares of the company's common stock. The ratings on the senior unsecured exchangeable notes are no longer relevant to the agency's coverage. KEY ASSUMPTIONS Fitch's key assumptions for Prologis in Fitch's base case include: -- The KTR transaction closes in 2Q'15 and is funded with the $630 million of term loan borrowings, the issuance of $230 million of operating partnership units, the assumption of $385 million of mortgage debt, $500 million of asset sales and hedge settlement proceeds, and $1.5 billion of common equity; -- 3% to 4% annual same-store NOI through 2017; -- G&A growth to maintain historical margins relative to total revenues initially but potentially be reduced over the next several years due to geographical overlap of the KTR portfolio; -- $2.0 billion annual development starts through 2017; -- $875 million annual building acquisitions through 2017; -- $1.1 billion annual contributions to co-investment ventures through 2017; -- $1.8 billion annual third-party dispositions through 2017; -- Debt repayment with the issuance of new unsecured bonds; -- AFFO payout ratio in the low 90% range. RATING SENSITIVITIES These factors may result in an upgrade to 'BBB+': -- Fitch's expectation of pro rata leverage sustaining below 6.5x is Fitch's primary rating sensitivity (pro rata leverage was 6.9x as of March 31, 2015 and is also 6.9x pro forma under Fitch's base case); -- Fitch's expectation of consolidated leverage sustaining below 6.0x (consolidated leverage was 6.2x as of March 31, 2015 and is 5.9x pro forma under Fitch's base case. Fitch defines consolidated leverage as net debt to recurring operating EBITDA including recurring cash distributions from unconsolidated entities to Prologis); -- Fitch's expectation of liquidity coverage sustaining above 1.25x (this ratio is 1.4x pro forma); -- Fitch's expectation of pro rata FCC sustaining above 2x (this ratio was 2.5x for the TTM ended March 31, 2015 and is 2.8x pro forma under Fitch's base case). These factors may result in negative action on the ratings and/or Rating Outlook: -- Fitch's expectation of pro rata leverage sustaining above 7.5x, which could be the result of the company not funding the KTR transaction on a leverage neutral basis and/or a deterioration in operating fundamentals; -- Fitch's expectation of consolidated leverage sustaining above 7.0x; -- Fitch's expectation of liquidity coverage sustaining below 1.0x; -- Fitch's expectation of FCC sustaining below 1.5x. Fitch has affirmed these ratings: Prologis, Inc. -- Issuer Default Rating (IDR) at 'BBB'; -- $78.2 million preferred stock at 'BB+'. Prologis, L.P. -- IDR at 'BBB'; -- $2.5 billion global senior credit facility at 'BBB'; -- $5.7 billion senior unsecured notes at 'BBB'; -- EUR500 million multi-currency senior unsecured term loan at 'BBB'; Prologis Tokyo Finance Investment Limited Partnership -- Senior unsecured guaranteed notes at 'BBB'; -- JPY45 billion senior unsecured revolving credit facility at 'BBB'; -- JPY40.9 billion senior unsecured term loan at 'BBB'. The Rating Outlook is Positive. PRONERVE HOLDINGS: Creditors' Panel Hires Blank Rome as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of ProNerve Holdings LLC, et al., seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Blank Rome LLP as counsel to the Committee, nunc pro tunc to March 9, 2015. The Committee seeks the employment of Blank Rome to represent it and perform services for the Committee in connection with carrying out its fiduciary duties and responsibilities under the Bankruptcy Code consistent with section 1103(c) and other provisions of the Bankruptcy Code. Blank Rome will be paid at these hourly rates: Michael B. Schaedle $665 Stanley B. Tarr $525 Josef W. Mintz $400 Partners and Counsel $335-$1,020 Associates $195-$590 Paralegals $115-$405 Blank Rome will also be reimbursed for reasonable out-of-pocket expenses incurred. Michael B. Schaedle, partner of Blank Rome, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Court for the District of Delaware will hold a hearing on the application on April 30, 2015, at 11:30 a.m. Objections were due April 23, 2015. Blank Rome can be reached at: Michael B. Schaedle, Esq. BLANK ROME LLP One Logan Square 130 North 18th Street Philadelphia, PA 19103-6998 Tel: +1 (215) 569-5762 Fax: +1 (215) 832-5762 E-mail: schaedle@blankrome.com About ProNerve Holdings Founded in 2008, ProNerve is headquartered in a suburb of Denver, Colorado. ProNerve and certain affiliated practice entities provide intraoperative neurophysiologic monitoring ("IOM") services to health systems, acute care hospitals, specialty hospitals, ambulatory surgical centers, surgeons, and physician groups in more than 25 states. ProNerve Holdings, LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 15-10373) on Feb. 24, 2015, with a deal to sell assets to SpecialtyCare IOM Services, LLC for a credit bid of $35 million. The cases are assigned to Judge Kevin J. Carey. The Debtor tapped Pepper Hamilton LLP as counsel, and The Garden City Group, Inc., as claims and noticing agent. PRONERVE HOLDINGS: Creditors' Panel Hires Carl Marks as Advisors ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of ProNerve Holdings LLC, et al., seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Carl Marks Advisory Group LLC as financial advisors to the Committee, nunc pro tunc to March 20, 2015. The Committee requires Carl Marks to: (a) identify strategic and financial buyers that should be contacted in conjunction with the Debtors asset sale; (b) diligence the mix of government receivables of the Debtors; (c) assist as required in Committee diligence as to the financial condition of the Debtors; (d) provide assistance with the review of the General Electric Capital Corporation credit line as appropriate; (e) attend and advise at meetings with the Committee, its counsel, other financial advisors and representatives of the Debtors; (f) monitor the ongoing sale process of the Debtors, keeping the Committee informed and represent the Committee's interest with the intention to maximize recovery for the unsecured creditors; and (g) perform other tasks and duties related to this engagement as are directed by the Committee and reasonably acceptable to Carl Marks. Carl Marks will seek compensation in the form of a monthly fee (a "Monthly Advisory Fee") at the rate of $55,000 for the first monthly period and $30,000 for each subsequent monthly period thereafter in which financial advisory services are provided. Carl Marks will also be due due a success fee, in the amount of $125,000 (the "Success Fee"), which shall be earned in full and due in the event that any party identified by Carl Marks, who was not previously identified by the Debtors, submits a qualifying overbid in conformity with the court approved bid procedures in conjunction with the sale of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code. Carl Marks will also be reimbursed for reasonable out-of-pocket expenses incurred. Christopher K. Wu, partner of Carl Marks, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Court for the District of Delaware will hold a hearing on the application on April 30, 2015, at 11:30 a.m. Objections were due April 23, 2015. Carl Marks can be reached at: Christopher K. Wu CARL MARKS ADVISORY GROUP LLC 900 Third Avenue, 33rd Floor New York, NY 10022-4775 Tel: 212-909-8400 E-mail: cwu@carlmarks.com About ProNerve Holdings Founded in 2008, ProNerve is headquartered in a suburb of Denver, Colorado. ProNerve and certain affiliated practice entities provide intraoperative neurophysiologic monitoring ("IOM") services to health systems, acute care hospitals, specialty hospitals, ambulatory surgical centers, surgeons, and physician groups in more than 25 states. ProNerve Holdings, LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 15-10373) on Feb. 24, 2015, with a deal to sell assets to SpecialtyCare IOM Services, LLC for a credit bid of $35 million. The cases are assigned to Judge Kevin J. Carey. The Debtor tapped Pepper Hamilton LLP as counsel, and The Garden City Group, Inc., as claims and noticing agent. PRONERVE HOLDINGS: Panel Blocks Sale of Assets to SpecialtyCare --------------------------------------------------------------- The Official Committee of Unsecured Creditors filed on April 10, 2015, an objection to ProNerve Holdings, LLC, et al.'s motion asking the U.S. Bankruptcy Court for the District of Delaware to approve the sale of all or substantially all of the Debtors' assets to SpecialtyCare IOM Services, LLC, free and clear of all liens, claims, and interests, and the stalking horse agreement. The Committee claims that because the Debtors and SpecialtyCare have orchestrated a sale process based upon an unsupported exigency for the sale's closing, and implementing procedures designed to favor SpecialtyCare and to preclude any truly competitive bidding for the Debtors' assets, no evidentiary basis exists to determine whether the SpecialtyCare credit bid represents fair value for the assets or whether it is in the best interests of the Debtors' estates and their creditors. A copy of the Committee's objection is available for free at: http://is.gd/xF9FOo The Court conducted a sale hearing on April 10, 2015, and objections were either overruled or were withdrawn as a result of an agreement between the objectors and the Debtors. SpecialtyCare has agreed that the Debtors' estates may retain cash in the amount of $1.690 million and that it will to reimburse the Debtors' professionals for reasonable fees and expenses incurred prior to the closing date in connection with the litigation commenced by the Debtors against Medsurant, LLC, and Jordan Klearand allowed by court order in an amount not to exceed $75,000. A copy of the April 10, 2015 findings of fact and conclusions of law and order authorizing the sale is available for free at http://is.gd/kNFPGH The Committee said in an objection filed on March 10, 2015, that the Bidding Procedures are fundamentally unfair to creditors, walling off prospective bidders from participating in the process, and tilting the playing field inappropriately to favor the proposed stalking horse bid proposed by SpecialtyCare. According to the Committee, the Bidding Procedures would chill bidding by limiting bidders' access to data, limiting the sale process both as to diligence and bid proposal to one week's time, while conducting that process in the shadow of an uninvestigated $43 million credit bid. Ronald M. Winters, ProNerve Holdings' vice chief restructuring officer, said in a court filing dated March 11, 2015, that the lifeblood of the Debtors' business are the technologists and the various healthcare providers to which the Debtors provide IOM services. Mr. Winters said that the longer it takes for a strategic buyer to acquire the Debtors' assets, the less time the buyer will have to establish strong business relationships with ProNerve customers before they make a decision whether to renew their contracts or not. On April 11, 2015, the Court approved the sale procedures and allowed the Debtors to enter into a stalking horse agreement with SpecialtyCare. An auction was scheduled for April 8, 2015, which was also the deadline for objections to the sale order. The deadline for bids from interested parties was April 6, 2015. The hearing for the approval of the sale was set for April 10, 2015. On April 8, 2015, PhysIOM Group, LLC, objected to the sale motion to the extent that it seeks authority for the Debtors to sell, transfer, or otherwise convey the receivables billed to Federal Health Care Programs as part of the contemplated sale. Pursuant to an asset purchase agreement dated Oct. 24, 2012, PhysIOM agreed to sell to ProNerve, LLC, substantially all of its assets, excluding the Receivables. The Debtors said in a court filing dated April 9, 2015, that the Debtors' exit strategy, which has been discussed at length with the Committee, contemplates a liquidating plan, which will be funded by excess funds remaining out of the $1.69 million in cash that the stalking horse bidder has agreed to leave behind, in addition to Chapter 5 avoidance actions. These terms, according to the Debtors, are in the stalking horse agreement. The Debtors said that its estimate that the general unsecured claims pool will be approximately $1 million (not $5.3 million, as the Committee alleges), after taking into account intercreditor claims, waived claims, and claims associated with contracts that have been or will be assumed and cured. As for the PhysIOM objection, the Debtors said that to the extent that the stalking horse bidder purchases and collects any identifiable government receivables that are property of PhysIOM, or is found to have purchased cash that belongs to PhysIOM, it will turn over those funds to PhysIOM. A copy of the Debtors' omnibus reply in support of the Debtors' sale motion is available for free at http://is.gd/ZbZ7Pz George D. Pillari, Chief Restructuring Officer of ProNerve Holdings, said in a declaration dated April 9, 2015, that in addition to permitting the Debtors to retain $1.69 million after the closing date, a portion of which will be used for wind-down costs, the buyer is not acquiring Chapter 5 avoidance action from the Debtors. The avoidance actions, as well as any amounts remaining after paying wind-down costs and professional fees from the $1.69 million, will be used to satisfy general unsecured claims. The buyer has agreed to subordinate any unsecured claims it has against the Debtors for the sole purpose of funding a distribution of excess cash from the $1.69 million. PhysIOM is represented by: Morris James LLP Eric J. Monzo, Esq. 500 Delaware Avenue, Suite 1500 P.O. Box 2306 Wilmington, DE 19899 Tel: (302) 888-6800 Fax: (302) 571-1750 E-mail: emonzo@morrisjames.com and Burr & Forman LLP Bryan T. Glover, Esq. 171 Seventeenth Street NW Suite 1100 Atlanta, GA 30363 Tel: (404) 815-3000 Fax: (404) 817-3244 E-mail: bglover@burr.com The Committee is represented by its proposed counsel: Blank Rome LLP Stanley Tarr, Esq. Josef W. Mintz, Esq. 1201 N. Market Street, Suite 800 Wilmington, DE 19801 Tel: (302) 425-6400 Fax: (302) 425-6464 and Thomas E. Biron, Esq. (admission pending) Michael B. Schaedle, Esq. One Logan Square 130 North 18th Street Philadelphia, PA 19103 Tel: (215) 569-5500 Fax: (215) 569-5555 About ProNerve Holdings Founded in 2008, ProNerve is headquartered in a suburb of Denver, Colorado. ProNerve and certain affiliated practice entities provide intraoperative neurophysiologic monitoring ("IOM") services to health systems, acute care hospitals, specialty hospitals, ambulatory surgical centers, surgeons, and physician groups in more than 25 states. ProNerve Holdings, LLC, and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 15-10373) on Feb. 24, 2015, with a deal to sell assets to SpecialtyCare IOM Services, LLC for a credit bid of $35 million. The cases are assigned to Judge Kevin J. Carey. The Debtor tapped Pepper Hamilton LLP as counsel, and The Garden City Group, Inc., as claims and noticing agent. PUTNAM ENERGY: Hires Heller Draper as Chapter 11 Counsel -------------------------------------------------------- Putnam Energy, L.L.C., seeks authorization from the Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois to employ Heller, Draper, Patrick, Horn & Dabney, L.L.C. as Chapter 11 counsel, as of the March 11, 2015 petition date. The Debtor requires Heller Draper to: (a) provide legal advice with respect to its powers and duties as debtor in possession in the continued management and operation of its business and property; (b) attend meetings with representatives of its creditors and other parties in interest; (c) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on its behalf, the defense of any action commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved, and objections to claims filed against the estate; (d) prepare on behalf of the Debtor motions, applications, answers, orders, reports, and papers necessary to the administration of the estate; (e) take any necessary action on behalf of the Debtor to obtain confirmation of its plan; (f) appear before this Court to protect the interests of the Debtor; (g) perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 Case; (h) represent the Debtor in connection with obtaining Post-petition financing, if any; (i) advise the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; (j) investigate the nature and validity of liens asserted against the property of the Debtor, and advising the Debtor concerning the enforceability of said liens; (k) investigate and advise the Debtor concerning, and taking such action as may be necessary to collect, income and assets in accordance with applicable law, and the recovery of property for the benefit of the estate of the Debtor; (l) advise and assist the Debtor in connection with any potential property dispositions; (m) advise the Debtor concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructuring and recharacterizations; (n) assist the Debtor in reviewing, estimating and resolving claims asserted against the estate; (o) commence and conduct litigation necessary and appropriate to assert rights held by the Debtor, protect assets of the Chapter 11 estate or otherwise further the goal of completing the successful reorganization of the Debtor; and (p) perform all other legal services for the Debtor which may be necessary and proper in this proceeding. Heller Draper will be paid at these hourly rates: Douglas S. Draper and Other Senior Partners $450 Partners $400 Associates $300 Paralegals $90 Heller Draper will also be reimbursed for reasonable out-of-pocket expenses incurred. On March 11, 2015, prior to the filing of the bankruptcy case, Heller Draper received a retainer in the sum of $25,000. The wire was sent by MLP Energy Advisors and booked as a loan to the Debtor to serve as security for and/or as payment for services rendered prepetition and the filing fees for the bankruptcy case in accordance with the Engagement Letter attached hereto as Exhibit B. This retainer was placed in the Firm’s trust account. On March 12, 2015, $7,500 was drawn from the trust account to cover fees incurred through March 12, 2015 and $2,500 was sent as a retainer to local counsel. Douglas S. Draper, member of Heller Draper, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Heller Draper can be reached at: Douglas S. Draper, Esq. HELLER, DRAPER, PATRICK, HORN & DABNEY, L.L.C. 650 Poydras Street, Ste 2500 New Orleans, LA 70130-6103 Tel: (504) 299-3333 Fax: (504) 299-3399 E-mail: ddraper@hellerdraper.com About Putnam Energy Putnam Energy, L.L.C., a company with power plant and pipeline assets, sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 15-08733) on March 11, 2015, in Chicago, Illinois, after it failed to reach a forbearance agreement with its lender. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debt. The case is assigned to Judge Carol A. Doyle. Terrence O'Malley, manager and CEO, signed the petition. The Debtor is represented by Douglas S Draper, Esq., at Heller, Draper, Patrick, Horn & Dabney, LLC, in New Orleans, as counsel. PUTNAM ENERGY: Names David Cohen as Local Counsel ------------------------------------------------- Putnam Energy, L.L.C., seeks authorization from the Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois to employ David E. Cohen as local counsel. The professional services that Mr. Cohen has rendered or may render include providing legal advice with respect to the powers and duties of the Debtor-in-Possession; preparation of necessary applications, legal papers and other needed reports, attend court proceedings and to perform any other legal services which may be necessary on behalf of the Debtor-in-Possession. The hourly rate of Mr. Cohen is $375 per hour. The Debtor paid to Mr. Cohen a $2,500 advance payment retainer. Mr. Cohen will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Cohen assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. David E. Cohen can be reached at: David E. Cohen, Esq. FISHER COHEN WALDMAN SHAPIRO, LLP 1247 Waukegan Road, Suite 100 Glenview, IL 60025 Tel: (312) 606-3451 Fax: (312) 606-0117 About Putnam Energy Putnam Energy, L.L.C., a company with power plant and pipeline assets, sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 15-08733) on March 11, 2015, in Chicago, Illinois, after it failed to reach a forbearance agreement with its lender. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debt. The case is assigned to Judge Carol A. Doyle. Terrence O'Malley, manager and CEO, signed the petition. The Debtor is represented by Douglas S Draper, Esq., at Heller, Draper, Patrick, Horn & Dabney, LLC, in New Orleans, as counsel. QUICKSILVER RESOURCES: S&P Withdraws 'D' CCR at Issuer's Request ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Ft. Worth, Tex.-based oil and gas exploration and production company Quicksilver Resources Inc., including its 'D' corporate credit rating and 'D' secured, senior unsecured, and subordinated debt ratings. All ratings were withdrawn at the issuer's request. S&P had lowered its corporate credit and issue-level ratings to 'D' on Feb. 19, 2015, following the company's failure to pay interest on its 9.125% senior unsecured notes due 2019. RITE AID: Amends By-Laws to Implement "Proxy Access" ---------------------------------------------------- The board of directors of Rite Aid Corporation amended and restated the Company's By-Laws to (1) implement "proxy access" (allowing eligible stockholders to include their own nominees for director in the Company's proxy materials along with the Board-nominated candidates), (2) make certain other conforming and related technical changes and (3) allow the Board to waive the requirement that a director has not reached the age of 72 to be eligible for election. The proxy access process will first be available to stockholders in connection with the Company's 2016 annual meeting of stockholders. The proxy access provisions of the By-Laws permit any stockholder or group of up to 20 stockholders who have maintained continuous qualifying ownership of 3% or more of the Company's outstanding common stock for at least the previous three years to include a specified number of director nominees in the Company's proxy materials for an annual meeting of stockholders. A nominating stockholder is considered to own only the shares for which the stockholder possesses the full voting and investment rights and the full economic interest. Under this provision, borrowed or hedged shares do not count as "owned" shares. If a group of stockholders is aggregating its shareholdings in order to meet the 3% ownership requirement, the ownership of the group will be determined by aggregating the lowest number of shares continuously owned by each member during the three-year holding period. The maximum number of stockholder nominees permitted under the proxy access provisions of the By-Laws is equal to 20% of the directors in office as of the last day a notice of nomination may be timely received. If the 20% calculation does not result in a whole number, the maximum number of stockholder nominees is the closest whole number below 20%. If one or more vacancies occurs for any reason after the nomination deadline and the Board decides to reduce the size of the Board in connection therewith, the 20% calculation will be applied to the reduced size of the Board, with the potential result that a stockholder nominee may be disqualified. Stockholder-nominated candidates whose nomination is withdrawn or whom the Board determines to include in the Company's proxy materials as Board-nominated candidates will be counted against the 20% maximum. In addition, any director in office as of the nomination deadline who was included in the Company's proxy materials as a stockholder nominee for either of the two preceding annual meetings and whom the Board decides to nominate for re-election to the Board also will be counted against the 20% maximum. Notice of a nomination pursuant to the proxy access provisions of the By-Laws must be received no earlier than 150 days and no later than 120 days before the anniversary of the date that the Company distributed its proxy statement for the previous year's annual meeting of stockholders. If a group of stockholders is making the nomination, such notice must designate one member of the group for purposes of receiving communications, notices and inquiries from the Company and otherwise authorize such member to act on behalf of each other member of the group with respect to the nomination. Each nominating stockholder must provide a list of its proposed nominees in rank order. If the number of stockholder nominees under the proxy access provisions of the By-Laws exceeds the 20% maximum, the highest ranking qualified individual from the list proposed by each nominating stockholder, beginning with the nominating stockholder with the largest qualifying ownership and proceeding through the list of nominating stockholders in descending order of qualifying ownership, will be selected for inclusion in the Company's proxy materials until the maximum number is reached. Each stockholder seeking to include a director nominee in the Company's proxy materials is required to provide certain information, including proof of qualifying stock ownership as of the date of the submission and the record date for determining the stockholders entitled to receive notice of the annual meeting of stockholders, the stockholder's notice on Schedule 14N as filed with the Securities and Exchange Commission, and the information and representations required by the advance notice provision of the By-Laws relating to nomination of directors (including the written consent of each stockholder nominee to being named in the proxy statement and serving as a director, if elected). Nominating stockholders are also required to make certain representations and agreements regarding their intent to maintain qualifying ownership through the meeting date, intentions with respect to maintaining qualifying ownership for one year after the meeting date, lack of intent to effect a change of control, only nominating the persons nominated pursuant to the proxy access provisions of the By-Laws, only participating in the solicitation of their nominee or Board nominees, only distributing the Company's form of proxy, complying with solicitation rules, providing accurate information, and assuming liabilities related to and indemnifying the Company against losses arising out of the nomination. The Company may also require each stockholder nominee to provide any additional information that may be reasonably requested to determine if such nominee is independent, that could be material to a reasonable stockholder's understanding of the nominee's independence or that may reasonably be required to determine the eligibility of such nominee to serve as a director of the Company. Nominating stockholders under the proxy access provisions of the By-Laws are permitted to include in the proxy materials a 500-word statement in support of their nominees. The Company may omit any information or statement that the Company, in good faith, believes would violate any applicable law or regulation. If any of the information provided by a nominating stockholder or its nominee ceases to be true and correct in all material respects, such stockholder or nominee must promptly notify the Company and correct the information. In addition, any person providing information pursuant to the proxy access provisions of the By-Laws must further update and supplement such information if necessary so that all such information will be true and correct as of the record date and as of the date that is ten business days prior to the annual meeting (or provide a written certification that no such updates are necessary and that the information previously provided remains true and correct as of the applicable date). Each stockholder nominee must provide a written representation and agreement that such nominee is not and has not become party to any agreement, arrangement or understanding or given a commitment or assurance relating to how such stockholder nominee, if elected, would act or vote on any issue or question not disclosed to the Company or, other than with the Company, any agreement, arrangement or understanding with respect to any compensation, reimbursement or indemnification in connection with service or action as a director not disclosed to the Company and that such nominee has read and will comply with the Company's corporate governance policies and will make the acknowledgments, enter into the agreements and provide the information required of all directors. A stockholder nominee will not be eligible for inclusion in the Company's proxy materials if any stockholder has nominated a person pursuant to the advance notice provision of the By-Laws, if the nominee would not be independent, if the nominee's election would cause the Company to violate its By-Laws, its Charter or any applicable listing standards, laws or regulations, if the nominee has been an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, within the past three years, if the nominee is a named subject of a pending criminal proceeding or has been convicted in a criminal proceeding within the past ten years, or if the nominee or the stockholder who nominated him or her has provided false and misleading information to the Company or otherwise breached any of its or their obligations, representations or agreements under the proxy access provisions of the By-Laws. Stockholder nominees who are included in the Company’s proxy materials but subsequently withdraw from or become ineligible for election at the meeting or do not receive at least 25% of the votes cast in the election will be ineligible for nomination under the proxy access provisions of the By-Laws for the next two years. A nomination made under the proxy access provisions of the By-Laws may be omitted from the Company's proxy materials, without including any successor or replacement nominee, and such nomination will be disregarded at the annual meeting and the named proxies will not vote any proxies received from stockholders with respect to such nominee if the nominee or the stockholder who nominated him or her breaches any of its or their obligations, agreements or representations or the nominee otherwise becomes ineligible for inclusion in the Company's proxy materials under the proxy access provisions of the By-Laws or dies, becomes disabled or is otherwise disqualified from being nominated for election or serving as a director of the Company, or if the nominating stockholder (or a representative thereof) does not appear at the annual meeting. About Rite Aid Corp. Rite Aid is a drugstore chain with 4,570 stores in 31 states and the District of Columbia and fiscal 2014 annual revenues of $25.5 billion. For the 52 weeks ended Feb. 28, 2015, Rite Aid reported net income of $2.1 billion on $26.5 billion of revenues compared with net income of $249 million on $25.5 billion of revenues for the 52 weeks ended March 1, 2014. As of Feb. 28, 2015, the Company had $8.86 billion in total assets, $8.8 billion in total liabilities and $57.05 million in total stockholders' equity. * * * In March 2015, Moody's Investor Service confirmed its 'B2' Corporate Family Rating of Rite Aid. The confirmation reflects Moody's expectation that Rite Aid will maintain debt to EBITDA below 7.0 times after closing the acquisition of Envision Pharmaceutical Holdings, Inc. As reported by the TCR on Oct. 2, 2013, Standard & Poor's Ratings Services said it raised its ratings on Rite Aid, including the corporate credit rating, which S&P raised to 'B' from 'B-'. In April 2014, Fitch Ratings upgraded its ratings on Rite Aid, including its Issuer Default Rating to 'B' from 'B-'. The upgrades reflect the material improvement in the company's operating performance, credit metrics and liquidity profile over the past 24 months. SABINE OIL: Elects to Exercise Right to 30-Day Grace Period ----------------------------------------------------------- Sabine Oil & Gas Corporation has elected to exercise its right to a grace period with respect to a $15.3 million interest payment under its Second Lien Credit Agreement dated as of Dec. 14, 2012, as amended, by and among the Company, Bank of America, N.A., as administrative agent, and the lenders. The interest payment is due April 21, 2015; however, the grace period permits the Company 30 days to make such interest payment before an event of default occurs. The Company believes it is in the best interests of its stakeholders to actively address its debt and capital structure and intends to continue discussions with its creditors and their respective professionals during the 30-day grace period. As of April 20, 2015, the Company had a cash balance of approximately $280 million, which provides substantial liquidity to fund its current operations. T he Company is continuing to pay suppliers and other trade creditors in the ordinary course. About Sabine Sabine Oil & Gas LLC, (formerly Forest Oil Corporation) is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States. Sabine's current operations are principally located in Cotton Valley Sand and Haynesville Shale in East Texas, the Eagle Ford Shale in South Texas, and the Granite Wash in the Texas Panhandle. See http://www.sabineoil.com/ Sabine Oil reported a net loss including non-controlling interests of $327 million in 2014, compared with net income including non-controlling interests of $10.6 million in 2013. As of Dec. 31, 2014, the Company had $2.43 billion in total assets, $2.5 billion in total liabilities and a $63.8 million total shareholders' deficit. Deloittee & Touche LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the uncertainty associated with the Company's ability to repay its outstanding debt obligations as they become due raises substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on April 6, 2015, Moody's Investors Service downgraded Sabine Oil & Gas Corporation's Corporate Family Rating to Caa3 from Caa1. The rating action was prompted by SOGC's disclosure on March 31, 2015, that it is in default under its revolving credit facility and second lien term loan as a result of a going concern qualification related to its Dec. 31, 2014, audited financial statements. The TCR reported in March 2015 that Standard & Poor's Ratings Services lowered its corporate credit rating on Sabine Oil & Gas Corp. to 'CCC' from 'B-'. "The downgrade reflects our view that Sabine may pursue capital restructuring over the next 12 months that could result in lower ratings on the company and its debt," said Standard & Poor's credit analyst Ben Tsocanos. SABINE OIL: S&P Lowers CCR to 'D' on Missed Interest Payment ------------------------------------------------------------ Standard & Poor's Ratings Services, on April 22, 2015, lowered its corporate credit on Sabine Oil & Gas Corp. to 'D' from 'CCC' and the issue-level ratings on the company's first-lien credit facility, second-lien debt, and unsecured notes to 'D' from 'B-','CCC-', and 'CC', respectively. The 'D' ratings reflect the missed interest payment on the company's second-lien term loan due 2018. The recovery rating on the company's first-lien credit facility and unsecured notes remain '1' and '6', respectively. The recovery rating on the second-lien debt is '5' (lower half of the range). "The downgrade reflects the company's decision not to pay approximately $15.3 million in interest that was due on April 21, 2015, on its second-lien term loan," said Standard & Poor's credit analyst Ben Tsocanos. The company has entered into a 30-day grace period during which it could make the interest payment. If the company does not make the interest payment before the end of the grace period, a default would occur. Sabine has retained financial advisors Lazard and legal advisors Kirkland & Ellis LLP to advise the company on strategic alternatives related to its capital structure. SCHOOL OF EXCELLENCE: S&P Lowers 2004A Bonds Rating to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term rating on the Texas Public Finance Authority Charter School Finance Corp.'s revenue bonds, series 2004A, issued for the School of Excellence in Education (SEE), to 'BB' from 'BB+'. The outlook is stable. "The downgrade reflects our assessment of the school's significant enrollment declines in the past two years due to increased competition," said Standard & Poor's credit analyst Laura Kuffler-Macdonald. The downgrade also reflects S&P's view of unrestricted operating deficits in recent years, resulting in insufficient lease adjusted debt service coverage (DSC) of 0.9x in fiscal 2014, according to S&P's calculations. However, school officials report SEE still complies with its bond covenants because the school has positive operations when temporarily restricted funds are also included. The 'BB' rating S&P's opinion of the school's weak demand profile and operating performance, which SEE's long operating history, low debt burden, and strong cash levels offset. Given the school's lack of waitlist, S&P expects enrollment stabilization, and resulting financial improvement, will take time. SEE, which primarily serves economically disadvantaged students, is an open-enrollment public charter school in north-central San Antonio. SEE operates seven schools on five campuses, one of which is leased. The stable outlook reflects S&P's view of the school's relatively strong cash position. S&P could lower the rating in the one-year outlook period should enrollment continue to decline, resulting in operating deficits that affect the liquidity position. S&P does not expect to raise the rating during the outlook period. Beyond then, S&P could consider a positive rating action should SEE's demand profile improve, or if operations improve such that the school generates at least 1x unrestricted lease-adjusted DSC. SEALED AIR: Intellibot Robotics Deal No Impact on Moody's Ba3 CFR ----------------------------------------------------------------- Moody's Investor Service said that Sealed Air Corp. announced its acquisition of Intellibot Robotics LLC on April 15, 2015 will not have an immediate impact on Sealed Air's Ba3 corporate family rating, but the transaction is credit positive for the company longer term. The acquisition includes certain intellectual property, the manufacturing and engineering operations in Richmond, Virginia, as well as sales. The business will be integrated into Sealed Air's Diversey Care division and its leading brand of TASKI floor cleaning machines. Headquartered in Charlotte, NC, Sealed Air is a global manufacturer of packaging products, performance-based materials and equipment systems for various food, industrial, medical and consumer applications. The company, through its Diversey Care segment, is also a leading global supplier of cleaning, hygiene, and sanitizing products, equipment and related services to the institutional and industrial cleaning and sanitation markets. The company had revenues of approximately $7.8 billion in 2014. SEANERGY MARITIME: E&Y Expresses Going Concern Doubt ---------------------------------------------------- Seanergy Maritime Holdings Corp. filed with the Securities and Exchange Commission its annual report on Form 20-F, disclosing that the Company has acquired one vessel after the Company disposed of its entire fleet of vessels to repay debt. Ernst & Young (Hellas) Certified Auditors-Accountants S.A., in Athens, Greece, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that following the disposal of the Company's entire fleet in early 2014 in the context of its restructuring plan, the Company was unable to generate sufficient cash flow to meet its obligations and sustain its continuing operations that raise substantial doubt about the Company's ability to continue as a going concern. The Company disclosed net income of $80.3 million on $2.01 million of net vessel revenue for the year ended Dec. 31, 2014, compared with net income of $10.9 million on $23.1 million of net vessel revenue for the year ended Dec. 31, 2013. Income reported during 2014 was mainly on account of an $85.6 million gain from the restructuring, while a $25.7 million gain on disposal of subsidiaries contributed to the income in 2013. Since August 2012, the Company has been engaged in restructuring discussions with lenders to finalize the satisfaction and release of its obligations under certain of the Company's loan facility agreements and the amendment of the terms of certain of its loan facility agreements. Since Jan. 1, 2012, the Company has sold all 20 of its vessels, in some cases by transferring ownership of certain of its vessel-owning subsidiaries to third parties nominated by its lenders in connection with the Company's restructuring. At present the Company owns one vessel, the M/V Leadership. On Nov. 9, 2012, the Company entered into an agreement with I.M.I. Holdings Corp., or IMI, a company controlled by members of the Restis family, to sell its 100% ownership interest in Bulk Energy Transport (Holdings) Limited ("BET"), for a nominal cash consideration of $1.00. In addition, the Company released BET from all of its obligations and liabilities towards the Company, which accrued to $3.5 million as of the date of sale. On January 29, 2013, the Company closed the sale of the four MCS subsidiaries which owned the vessels Fiesta, Pacific Fantasy, Pacific Fighter and Clipper Freeway, financed under the facility agreement with DVB, to a third party entity nominated by DVB. In exchange for the sale, $31.9 million of outstanding debt as of Dec. 31, 2012 and all the liabilities and obligations under its facility agreement with DVB were discharged and the guarantee provided by MCS was fully released. In connection with the sale of these subsidiaries, the board of directors obtained a fairness opinion from an independent third party. On July 19, 2013, MCS sold its 100% ownership interest in the three subsidiaries that owned the Handysize dry bulk carriers African Joy, African Glory and Asian Grace. The buyer was a third-party nominee of the lenders under the senior and the subordinated credit facility with United Overseas Bank Limited, or UOB. As of Dec. 31, 2014, the Company had $3.26 million in total assets, $592,000 in total liabilities, and $2.67 million in total stockholders' equity. On April 10, 2013, the Company sold the African Oryx. Gross proceeds amounted to $4.1 million and were used to repay debt. On Feb. 12, 2014, the Company entered into a delivery and settlement agreement with Piraeus Bank for the sale of the Company's four remaining vessels, to a nominee of the lender, in exchange for a nominal cash consideration and full satisfaction of the underlying loan. On March 6, 2014 the Company sold the Davakis G., on March 7, 2014 the Company sold the Hamburg Max, on March 10, 2014 the Company sold the Bremen Max and on March 11, 2014 we sold the Delos Ranger. On March 11, 2014, following the closing of the transaction, approximately $146 million of outstanding debt and accrued interest were discharged and the guarantee provided by the Company has been fully released. Furthermore, on March 5, 2014, the Company entered into an agreement with its technical management company, EST, and its commercial manager, Safbulk Pty, in exchange of a full and complete release of all their claims upon the completion of the delivery of the last four remaining vessels and settlement agreement with Piraeus Bank. The transaction was completed successfully on March 11, 2014 and total liabilities amounting to $9.8 million were released. On March 19, 2015, the Company acquired a 2001 Capesize, 171,199 DWT vessel, which was renamed M/V Leadership, from an unaffiliated third party. The acquisition of the vessel was financed by (i) a convertible promissory note dated March 12, 2015 of $4 million from an entity affiliated with one of the Company's major shareholders, Jelco, (ii) a loan agreement dated March 06, 2015 of $8.75 million with Alpha Bank A.E., or Alpha Bank, and (iii) a share purchase agreement dated March 12, 2015 of $4.5 million from Jelco in exchange for the issuance of 25,000,500 newly issuance shares of the Company's common stock. This acquisition was made pursuant to the terms and conditions of a memorandum of agreement among, Leader Shipping Co., or Leader, the Company's wholly owned subsidiary, and a third party seller, between the Company's vessel-owning subsidiary and the seller, dated December 23, 2014. On March 19, 2015, the Company took delivery of the M/V Leadership. A full-text copy of the Form 20-F is available for free at: http://is.gd/15Plfm About Seanergy Athens, Greece-based Seanergy Maritime Holdings Corp. is an international company providing worldwide seaborne transportation of dry bulk commodities. The Company owns and operates a fleet of seven dry bulk vessels that consists of three Handysize, two Supramax and two Panamax vessels. Its fleet carries a variety of dry bulk commodities, including coal, iron ore, and grains, as well as bauxite, phosphate, fertilizer and steel products. SERVICE CORP: Moody's Hikes CFR to Ba2 & Sr. Unsec Ratings to Ba3 ----------------------------------------------------------------- Moody's Investors Service upgraded certain of Service Corporation International's ratings. The Corporate Family rating was upgraded to Ba2 from Ba3, the Probability of Default rating ("PDR") was upgraded to Ba2-PD from Ba3-PD and the senior unsecured (unguaranteed) ratings were upgraded to Ba3 from B1. The senior unsecured (guaranteed) ratings and Speculative Grade Liquidity rating ("SGL") were affirmed at Baa3 and SGL-2, respectively. The rating outlook is stable. Issuer: Service Corporation International Upgrades: -- Corporate Family Rating, Upgraded to Ba2 from Ba3 -- Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD -- Senior Unsecured (unguaranteed) Bonds, Upgraded to Ba3 (LGD5) from B1 (LGD4) Affirmations: -- Senior Unsecured (guaranteed) Bank Credit Facility, Affirmed Baa3 (LGD2) -- Speculative Grade Liquidity Rating, Affirmed SGL-2 Outlook: -- Outlook, Remains Stable "The upgrade to Ba2 reflects SCI's success in integrating Stewart Enterprises and achieving significant cost synergies, steady deleveraging since the closing of the acquisition and Moody's expectations for continued, steady cash flow generation," said Edmond DeForest, Moody's Senior Credit Officer. The Ba2 rating reflects SCI's position as the leading death care provider in North America, supported by a broadly diversified portfolio of funeral service locations and cemetery properties, unique scale advantages and a $9 billion revenue backlog. Moody's expects SCI to maintain debt to EBITDA in a range of about 3.7 to 4.0 times, peaking perhaps above 4 when it makes acquisitions. Moody's anticipates modest 2% to 4% same-store revenue growth and free cash flow to debt of about 6% to 8%, pressured by customer shifts toward cremation and lower priced funeral services. Additional support comes from an aging baby boom population and assets including real estate holdings, investment trusts and insurance contracts that provide tangible coverage of debt and other liabilities. Moody's anticipates solid EBITA margins of over 20%, but for free cash flow available to reduce debt to be limited by the need to invest in infrastructure leading to over $150 million of annual capital expenditures, the regular quarterly dividend of about $80 million a year and Moody's expectations that SCI will be a full cash tax payer by 2016. The risk that shareholder desires for high cash returns from dividends and share repurchases could be satisfied through debt incurrence also weighs on the rating. All financial metrics reflect Moody's standard adjustments. The Speculative Grade Liquidity rating of SGL-2 reflects Moody's assessment of SCI's liquidity as good, driven by expectations for over $100 million of cash, about $250 million of free cash flow and at least $200 million of availability under its revolving credit facility expiring in 2018. The stable ratings outlook reflects Moody's expectations for limited debt reduction as most free cash flow will be applied toward acquisitions and shareholder returns. The ratings could be upgraded if profitable revenue growth can be maintained above 4% per year and Moody's expects sustained debt to EBITDA around 3 times and free cash flow to debt above 10%. Lower ratings are possible if Moody's expects 1) lower revenue growth; 2) profitability as measured by EBITA margins will remain below 17%; 3) shareholder friendly financial policies; or 4) less than good liquidity. If Moody's anticipates debt to EBITDA will be maintained above 4.5 times or free cash flow to debt will remain below 6%, lower ratings are possible. 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. SCI is North America's largest provider of funeral, cemetery and cremation products and services. The company operates an industry-leading network of 1,559 funeral service locations and 466 cemeteries, which includes 258 funeral service/cemetery combination locations. Moody's anticipates revenue of about $3 billion in 2015. SEVEN GENERATIONS: S&P Rates Proposed $400MM Unsec. Notes CCC+' --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'CCC+' issue-level rating to Calgary, Alta.-based, Seven Generations Energy Ltd.'s proposed US$400 million senior unsecured notes due 2023. At the same time, Standard & & Poor's assigned its '6' recovery rating to the debt, indicating its expectation of a negligible (0%-10%) recovery in a default scenario. Seven Generations intends to use the net proceeds for general corporate purposes and to fund the company's 2015-2016 capital expenditure program. Pro forma the proposed offering, S&P expects the company's three-year (2015-2017) weight-adjusted debt-to-EBITDA to be 2.0x-2.5x and adjusted funds from operations-to-debt to be 35%-40%. The ratings on Seven Generations reflect Standard & Poor's view of the considerable development risks associated with the company's current low proved developed reserves ratio, which was about 8% based on the company's Dec. 31, 2014, reported reserves; and the execution risk inherent in the rapid production growth forecast for the company. S&P believes Seven Generations' improved operating efficiency, strengthened financial risk profile, and balanced product mixpartially offset these weaknesses. RATINGS LIST Seven Generations Energy Ltd. Corporate credit rating B/Stable/-- Ratings Assigned Senior unsecured debt Proposed US$400 mil. notes due 2023 CCC+ Recovery rating 6 SPIRIT AEROSYSTEMS: S&P Raises Unsecured Debt Rating to 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its unsolicited 'BBB-' issue-level rating to Spirit AeroSystems Inc.'s $535 million term loan A due 2020 with an unsolicited recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery in a payment default scenario. At the same time, S&P raised its issue-level rating on the company's unsecured debt to 'BB' from 'BB-' and revised the recovery rating to '4' from '5', reflecting S&P's expectations of average recovery (30%-50%; at the high end of the range) in a payment default scenario. The issue-level and recovery ratings on Spirit's $650 million revolver are unchanged. The company used the proceeds from the new term loan A to pay off its existing term loan B. S&P do not believe that the proposed transaction would significantly alter the company's credit metrics and S&P's other ratings on the company remain unchanged. The upgrade of S&P's rating on Spirit's unsecured debt reflects the improved recovery prospects caused by the decline in the amount of secured debt the company would have at default due to the higher amortization on the new term loan A compared with the term loan B that was paid off. S&P's corporate credit rating on Spirit reflects the company's position as the largest independent supplier of aircraft structures, its improving profitability and cash flow, and the strong commercial aerospace market. However, the commercial aerospace market is competitive and cyclical and the company still needs to address key uncertainties including profitably increasing production on the Airbus A350 program and extending its pricing agreement with Boeing, its largest customer, past the end of 2015. S&P expects most of Spirit's 2015 credit measures to moderate somewhat from their very strong levels in 2014 but still remain solid, including a funds from operations-to-debt ratio above 60%. The positive outlook reflects the possibility that S&P could raise its rating on the company if it sustains the recent improvements in its earnings and cash flow, does not incur any further large charges, finalizes a reasonable extension of its pricing agreement extension with Boeing, and demonstrates a moderate financial policy. Recovery Analysis Simulated default assumptions (mil. $) -- Simulated year of default: 2020 -- EBITDA at Emergence: 250 -- EBITDA Multiple: 5.5x Simplified waterfall (mil. $) -- Net enterprise value (after 5% admin. costs): 1,306 -- Valuation split in % (Obligors/Non-obligors): 92/8 -- Priority claims: 13 -- Collateral value available to secured creditors: 1,247 -- Secured first-lien debt: 990 --Recovery expectations: 90%-100% -- Total value available to unsecured claims: 288 -- Senior unsecured debt and pari-passu claims: 705 --Recovery expectations: 30%-50% (high end) Note: All debt amounts include six months of prepetition interest. Collateral value equals asset pledge from obligors after priority claims plus equity pledge from non-obligors after non-obligor debt. RATINGS LIST Spirit AeroSystems Inc. Corporate credit rating BB/Positive/-- Ratings Assigned Senior secured $535 mil. term loan due 2020 BBB- (unsolicited) Recovery rating 1 (unsolicited) To From Upgraded Senior unsecured BB BB- Recovery rating 4H 5 SUMMIT MATERIALS: LaFarge Acquisition No Impact on Moody's B3 CFR ----------------------------------------------------------------- Moody's Investor Service said that Summit Materials, LLC agreement to acquire LaFarge's Davenport cement plant and distribution terminals is a credit positive. At this time, there is no impact on the B3 Corporate Family Rating. On April 17, 2015, Summit Materials, LLC ("Summit") announced that it entered a definitive agreement with Lafarge North America ("Lafarge NA") to purchase Lafarge NA's Davenport, Iowa cement plant and seven cement distribution terminals for a purchase price of $450 million plus Summit's Bettendorf, Iowa cement terminal. Summit Materials, LLC is a building materials company that primarily operates in Texas (representing 34% of revenue for year ended December 27th, 2014), Kansas (19%), Kentucky (11%), Missouri (10%) and Utah (9%).estate capital structure. Lennar's Multifamily segment is a national developer of multifamily rental properties. Total homebuilding revenues for the twelve months ending February 28, 2015, were approximately $7.2 billion, and consolidated pretax income, including those of its Financial Services segment ,was $1.0 billion. TLC HEALTH: Court Approves Steiger Realty as Real Estate Agent -------------------------------------------------------------- TLC Health Network sought and obtained permission from the Hon. Carl L. Bucki of the U.S. Bankruptcy Court for the Western District of New York to employ Steiger Realty as real estate agent, effective Oct. 20, 2014. The Debtor requires Steiger Realty to market and sell the Debtor’s real property located at 5719 US Route 62, Conewango, New York (the "Property"). The Debtor proposed to retain Steiger Realty on a standard commission of 6% of the sale price of the Property. Steiger Realty will also be reimbursed for reasonable out-of-pocket expenses incurred. Milton Steiger, associate of Steiger Realty, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Steiger Realty can be reached at: Milton Steiger STEIGER REALTY 836 King Rd. Forestville, NY 14062 Tel: (716) 679-8277 Fax: (716) 954-7137 E-Mail: Milt@SteigerRealty.com About TLC Health Network TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 13-13294) on Dec. 16, 2013. The petition was signed by Timothy Cooper as Chairman of the Board. The Debtor estimated assets of at least $10 million and debt of at least $1 million. Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., serves as the Debtor's counsel. Damon & Morey LLP is the Debtor's special health care law and corporate counsel. The Bonadio Group is the Debtor's accountants. Howard P. Schultz & Associates, LLC is the Debtor's appraiser. The case is assigned to the Hon. Carl L. Bucki. A three-member panel composed of Cannon Design, Chautauqua Opportunities, Inc., and Jamestown Rehab Services has been appointed as the official unsecured creditors committee. Bond, Schoeneck & King, PLLC is the counsel to the Committee. The Committee has tapped NextPoint LLC as financial advisor. Gleichenhaus, Marchese & Weishaar, PC is the general counsel for Linda Scharf, the Patient Care Ombudsman of TLC Health. TRITON FOODS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Triton Foods, Inc. 7744 Industry Avenue Pico Rivera, CA 90660 Case No.: 15-16359 Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Hon. Richard M Neiter Debtor's Counsel: Giovanni Orantes, Esq. THE ORANTES LAW FIRM PC 3435 Wilshire Blvd Ste 2920 Los Angeles, CA 90010 Tel: 888-619-8222 Fax: 877-789-5776 Email: go@gobklaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Juan Alfaro, president and CEO. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-16359.pdf TRUMP ENTERTAINMENT: Exclusive Plan Filing Date Extended to Aug. 5 ------------------------------------------------------------------ Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware further extended Trump Entertainment Resorts, Inc., et al.'s exclusive filing period through and including Aug. 5, 2015, and their exclusive solicitation period through and including Oct. 6, 2015. To recall, on March 12, 2015, the Court entered an order confirming the Debtors' Third Amended Joint Plan of Reorganization. The The Effective Date has not yet occurred, as certain conditions precedent to the occurrence of the Effective Date, including the CBA Order having become a Final Order, have not yet been met. Although the Debtors believe that these conditions precedent will ultimately be met, out of an abundance of caution, they seek an extension of their exclusive periods to file a Chapter 11 plan to allow them to maintain the Exclusive Periods in the unlikely event that the Plan does not become effective, the Debtors' counsel, Ian J. Bambrick, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to shutter its casinos. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, 2014, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware in March confirmed Trump Entertainment Resorts, Inc., et al.'s Third Amended Joint Plan of Reorganization and Disclosure Statement pursuant to Section 1129 of the Bankruptcy Code. TRUMP ENTERTAINMENT: Gets Approval to Settle Thermal Energy Claims ------------------------------------------------------------------ Trump Entertainment Resorts Inc. received court approval for a deal that would resolve the claims of Thermal Energy Limited Partnership I. The court order signed by U.S. Bankruptcy Judge Kevin Gross authorizes Thermal Energy to amend its claims against the gaming company's affiliates, allowing the supplier to recover a total of $44.2 million. Thermal Energy supplies steam and chilled water for Trump's casino hotels in Atlantic City under its thermal energy agreements with the gaming company. It asserts a general unsecured claim of $27.5 million against Trump Taj Mahal Associates LLC, and $16.67 million against Trump Plaza Associates LLC. Trump rejected the thermal energy agreements last month after getting the bankruptcy judge's approval. On March 31, Plaza Associates entered into a new contract with the supplier for the Trump Plaza Hotel and Casino, court filings show. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to shutter its casinos. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, 2014, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. TTM TECHNOLOGIES: S&P Retains 'BB' CCR on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Costa Mesa, Calif.-based TTM Technologies Inc. remain on CreditWatch, where S&P placed them with negative implications on Sept. 22, 2014. The ratings on CreditWatch include the 'BB' corporate credit rating and 'BB' issue-level rating on the company's senior unsecured debt. S&P expects to lower the corporate credit rating on TTM to 'B+' from 'BB' and remove it from CreditWatch after the company closes its acquisition of Viasystems Group Inc. S&P would also lower its issue-level rating on the company's senior unsecured convertible notes (which will remain part of the new capital structure) to 'B-' from 'BB' and revise the recovery rating to '6' from '4'. The '6' recovery rating would indicate S&P's expectation for negligible (0%-10%) recovery in the event of payment default. S&P's 'B+' issue-level rating and '3' recovery rating on TTM's proposed $775 million senior secured term loan due 2022 are unchanged. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; at the higher end of the range) recovery in the event of payment default. Also unchanged are S&P's 'B-' issue-level rating and '6' recovery rating on the company's proposed $175 million second-lien term loan due 2023. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of payment default. S&P expects the company to use the debt proceeds, along with a draw on its proposed U.S. asset-backed revolving credit facility (unrated) and balance sheet cash, to fund the cash portion of the purchase price, to refinance debt at both companies, and to pay fees related to the acquisition. S&P will monitor developments related to the proposed acquisition, including required regulatory approvals, and resolve the CreditWatch listing after the transaction closes. S&P will lower the rating to 'B+' from 'BB' if TTM completes the transaction and finances it as S&P expects. If TTM does not complete the acquisition, S&P will review our expectations for the company's operating performance and its financial risk profile before resolving the CreditWatch listing. VENOCO INC: S&P Raises CCR to 'CCC+'; Outlook Negative ------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Denver-based Venoco Inc. to 'CCC+' from 'SD'. The outlook is negative. At the same time, S&P raised the issue ratings on the company's senior unsecured notes to 'CCC-' from 'D'. The recovery rating on these notes remains '6' reflecting S&P's expectation of negligible (0%-10%) recovery in the event of a conventional default. S&P is affirming the rating on Venoco parent Denver Parent Corp., including its 'CCC+' corporate credit rating and 'CCC-' unsecured issue-rating, and removing them from CreditWatch where S&P placed them with negative implications on April 3, 2015. The rating outlook on the parent company was revised to negative from stable. "The upgrade follows our review of Venoco's credit profile in conjunction with the release of year-end 2014 financial results and the completion of the exchange of its senior unsecured notes, whereby existing investors received new second-lien notes at 77.5% of par value," said Standard & Poor's credit analyst Ben Tsocanos. S&P views the exchange as tantamount to default because investors received less than the promise of the original securities. Approximately 39% of the senior unsecured note holders participated in the exchange. Concurrent with the exchange, Venoco issued $175 million of first-lien notes and entered into $75 million of cash-secured senior term loans. The company's senior secured credit facility was subsequently terminated. The recovery rating of '6' on Venoco's senior unsecured notes incorporates the increase in secured debt ahead of the notes in the capital structure. With the issuance of the first-lien notes and cash-secured term loan, S&P views the company's improved liquidity as "adequate." It is S&P's expectation that sources will exceed uses by more than 1.2x at least over the next 12 months even if EBITDA declines by 15%. The outlook is negative, reflecting S&P's view that Venoco might pursue additional debt exchanges in which investors receive less than what was promised on the original securities. S&P could lower the rating further if Venoco enters into debt exchange transactions such that investors received less than what was promised on the original securities. S&P could raise the rating if Venoco were able to decrease financial leverage below 5x debt to EBITDA and raise FFO to debt above 12% while maintaining adequate liquidity. VIRGIN ISLANDS: Fitch Affirms 'BB-' Rating on $103MM Revenue Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed these ratings for the U.S. Virgin Islands (USVI) Water and Power Authority (WAPA): -- $134,860,000 electric system revenue bonds, series 2012A, 2010A, 2010B, 2010C, 2003 at 'BB'; -- $103,330,000 electric system subordinated revenue bonds, series 2007A, 2012B, 2012C at 'BB-'. The Rating Outlook is Stable. SECURITY The electric system revenue bonds are secured by a pledge of net electric revenues and certain other funds established under the bond resolution. The electric system subordinated revenue bonds are secured by a pledge of net revenues that are subordinate to the pledge securing the electric system revenue bonds. KEY RATING DRIVERS WEAK FINANCIAL PROFILE: WAPA remains challenged by extremely high retail rates ($0.39/kWh), a reliance on lines of credit for working capital needs and weak cash flow. Although lower fuel oil prices have reduced the cost of electricity from fiscal 2014 levels, multiple base-rate increases enacted in recent years have yet to yield sustained improvement in financial performance. POWER SUPPLY DIVERSIFICATION: Fitch views positively the authority's ongoing efforts to diversify its power supply by converting its oil-fired generating plants to tri-fueled capability with liquefied petroleum gas (LPG, or propane) as the primary fuel source initially. Recent project cost increases and delays in project completion are concerning, but Fitch believes the project should ultimately have a stabilizing impact on electric rates, accounts receivable and declining sales. INADEQUATE AND REGULATED COST-RECOVERY MECHANISMS: Electric rates are regulated by the Virgin Islands Public Service Commission (PSC), which has authorized cost recovery through both base rates and a levelized energy adjustment clause (LEAC) for fuel and other related costs. Delays inherent in both the regulatory process and the recovery mechanism impair liquidity and limit financial flexibility. CHALLENGED SERVICE AREA: The authority serves a geographically and economically challenged service territory largely dependent on tourism and government employment. Strains related to the USVI's narrow economy and fiscal challenges (implied general obligation [GO] rating, 'BB-' with a Negative Outlook) are compounded by the authority's high electric rates, declining sales and per capita personal income levels that approximate just half of the U.S. average. HIGH ACCOUNTS RECEIVABLES: Government receivables have continued to escalate, inhibiting WAPA's ability to collect needed revenue and offsetting positive headway made in reducing deferred fuel balances, customer receivables and reimbursable costs owed by the authority's water utility. RATING SENSITIVITIES DIMINISHED LIQUIDITY: WAPA's inability to maintain sufficient cash reserves and bank lines of credit would likely prompt a negative rating action. IMPLEMENTATION OF FUEL DIVERSITY: Positive rating consideration may be warranted as a result of the pending conversion to LPG and improved fuel diversity. However, positive rating action will depend on the extent to which fuel savings are used to bolster the authority's financial profile. RATING RELATIONSHIP TO GOVERNMENT: Continued deterioration in the USVI's fiscal condition and credit quality could ultimately have rating implications for WAPA's ratings given the authority's status as an instrumentality of the government, as well as the government's position as the authority's largest customer. CREDIT SUMMARY The USVI is an organized, unincorporated U.S. territory 40 miles east of the Commonwealth of Puerto Rico with a population of approximately 106,000. WAPA operates both a vertically integrated retail electric system and a water treatment and distribution system, both of which are independently financed with separate liens on net revenues securing the outstanding debt of each system. The customer base is almost evenly divided between the interconnected islands of St. Thomas and St. John, and St. Croix, and is largely composed of residential and small commercial users (98%). WAPA's remaining customers include its largest, the Virgin Islands government, as well as several large commercial users. Sales to the government and the 10 largest non-governmental users accounted for approximately 5% and 7.7%, respectively, of the authority's total revenue in fiscal 2013, exposing the authority to very little customer concentration. While no individual non-governmental customer accounts for more than 2% of total revenue, more than half of the largest users are tourism dependent hotels and resorts. ADEQUATE, BUT ISOLATED OPERATIONS WAPA owns and operates a total of seven generation facilities on the islands of St. Thomas and St. Croix, as well as limited backup generation on St. John (2.5 MW). The generation facilities on both St. Thomas and St. Croix are located at single sites but include several steam and combustion turbine units that largely mitigate operating risk and protect against unit outages. Total capacity available on each island is well in excess of peak demand. All of the authority's generating units are currently fueled by oil, although efforts to advance a number of alternative energy initiatives including LPG, wind, solar and waste to energy are ongoing. Importantly, the authority's plant conversions to LPG are underway pursuant to a master agreement (the agreement) WAPA signed with Vitol Virgin Islands Corp. (Vitol) in June 2013. The conversions were initially expected to be complete by the latter part of 2014, but delays in installing the necessary infrastructure have pushed the projected completion date back by almost one year, to the second half of 2015. The agreement obligates Vitol to initially fund all costs related to the installation of necessary infrastructure, as well as the physical conversion of eight generating units. Total infrastructure and conversion costs were initially estimated at $87 million, but project delays have led to a sizeable increase in the all-in projected cost, now estimated at $150 million. As a result, WAPA's obligation to repay VITOL for all related costs pursuant to the agreement was recently extended from seven to 10 years, albeit with a lower interest rate. WAPA officials continue to project the use of LPG will lower its energy costs by approximately 30%, although a detailed forecast demonstrating the cost savings has not been made available. WEAK FINANCIAL PROFILE The authority's financial profile weakened considerably between fiscals 2010-2013, reflecting the confluence of significantly higher fuel costs, inadequate cost recovery, rising annual debt service, declining sales and the continued financial strain attributable to the water system and overdue receivables from the government. Consequently, Fitch calculated debt service coverage of all obligations, including outstanding GO notes, averaged just 0.90x over that span before improving modestly to about 1.0x in fiscal 2013. For fiscal year-end 2014, debt service coverage declined to 0.83x, largely due to a 5.8% decrease in energy sales. With the inclusion of motor fuel tax revenues, which are dedicated to funding capital expenditures and debt service related to new generation projects, all-in coverage improves to just under 1.2x. Liquidity, not including lines of credit available for working capital, remained low with just 11 days cash on hand at the close of fiscal 2013. Including the available lines of credit, the authority maintained a more acceptable 30 days of liquidity on hand. Similar metrics at the close of fiscal 2014 were 13 days and 23 days, respectively. Recent funding of certain capital projects from existing reserves diminished WAPA's unrestricted cash position even further from $10.8 million at the close of the prior fiscal year to approximately $3 million as of Jan. 1, 2015, although officials expect to be reimbursed from proceeds from a pending RUS loan before the current fiscal year ends. HIGH RETAIL RATES WAPA's retail rates continue to rank significantly higher than the average for all U.S. States and other U.S. Territories, including the Guam Power Authority (GPA; rated 'BBB-' and 'BB+', respectively, with a Negative Rating Outlook) and Puerto Rico Electric Power Authority (PREPA; rated 'CC', Watch Negative). Fitch believes the authority's flexibility to raise rates will continue to be challenged as a result. Since 2010, WAPA has requested two base rate increases with both of them approved in 2012 and 2013,, providing roughly $15.7 million in additional recurring revenue. Positively, approved increases in the LEAC in recent years have reduced the authority's deferred fuel balance significantly, from a peak of $55 million in March 2013 to a more modest balance of $8.6 million. Considerably lower oil prices in the current fiscal year have allowed WAPA to reduce its LEAC by about one-half, from $0.41/kWh in January 2014 to $0.21/kWh in March 2015. While the lower rate provides a degree of rate relief for customers, WAPA's overall rate remains high at $0.39/kWh. WARREN RESOURCES: S&P Lowers CCR to 'CCC+'; Outlook Negative ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on New York-based exploration and production (E&P) company Warren Resources Inc. to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered its issue-level ratings on the company's senior unsecured debt to 'CCC-' from 'CCC+'. S&P revised the recovery rating to '6' from '5', indicating its expectation of negligible (0% to 10%) recovery for creditors if a payment default occurs. "The downgrade reflects our reduced oil and natural gas price assumptions, which we expect will likely lead to much weaker earnings and credit measures for Warren in 2015 and 2016," said Standard & Poor's credit analyst Daniel Krauss. "We now estimate Warren Resources' adjusted funds from operations to debt will drop to the low- to mid-single-digit percentage range in 2015," he added. Additionally, S&P believes that the company's borrowing base will be reduced as part of its upcoming redetermination at the end of April, given S&P's expectation that banks will be using a lower price deck and that the company was not adequately hedged for 2015. S&P expects that management will remain proactive in preserving its liquidity position, potentially through asset sales or other capital-raising measures. The ratings on Warren reflect S&P's view of the company's "vulnerable" business risk and "highly leveraged" financial risk. S&P views Warren's liquidity as "less than adequate," based on S&P's estimate that liquidity sources will be less than 1.2x liquidity uses over the next 12 to 18 months. The negative outlook reflects S&P's view that credit measures will weaken materially in 2015, approaching levels S&P would view as unsustainable. Additionally, S&P believes that liquidity could become pressured as a result of the upcoming re-determination of the company's borrowing base. S&P would expect that management's main focus would be to enhance the company's liquidity position, potentially through divestitures of noncore assets. S&P could lower the rating within the next few months if a significant drop in availability under the borrowing base prompted S&P to revise its liquidity assessment to "weak." S&P could also lower the ratings if it anticipated that a breach of Warren's financial covenants were imminent, and did not expect the company could successfully negotiate relief. S&P would consider revising the outlook to stable if Warren is able to reduce leverage from expected 2015 levels while improving its liquidity position. WASH MULTIFAMILY: Moody's Assigns 'B3' CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a B3-PD Probability of Default Rating for Wash Multifamily Laundry Systems, LLC (New) ("WASH"). This rating action comes after EQT Infrastructure II ("EQT") agreed to acquire WASH for a total enterprise value of $995 million. In a related rating action, Moody's assigned a first time rating of B2 to the Company's proposed 7-year $475 million 1st Lien Senior Secured Term Loan Facility and a Caa2 rating to the proposed 8-year $150 million 2nd Lien Term Loan Facility. The rating outlook is Stable. WASH has been providing coin operated laundry services since 1947. WASH is the largest Canadian provider and second largest U.S. provider of laundry for multifamily housing and colleges. The Company's markets include apartment buildings (87% of revenue), colleges (5%) and commercial laundry (8%). WASH has 900 employees with more than 70,000 locations (15 U.S. states and all of Canada). In 2014, WASH generated $426 million of revenue. WASH's new capital structure will consist of: - 7-year $475 million 1st Lien Senior Secured Term Loan Facility - 5-year $60 million Revolving Credit Facility - 8-year $150 million 2nd Lien Term Loan Facility - Common Equity contribution from EQT (~40% pro forma capitalization) WASH will have a U.S. Borrower and a Canadian Borrower for each of these facilities. The U.S. Borrower will be a wholly owned subsidiary of the U.S. Parent while the Canadian Borrower is anticipated to be Coinamatic Canada, Inc. The following ratings will be affected by this action: -- Corporate Family Rating assigned B3; -- Probability of Default Rating assigned B3-PD; -- 7-year $475 million 1st Lien Senior Secured Term Loan Facility assigned B2 (LGD3) -- 8-year $150 million 2nd Lien Term Loan Facility assigned Caa2 (LGD6) WASH's B3 Corporate Family Rating ("CFR") is determined by WASH's elevated leverage following the buyout by EQT. Pro forma leverage (Debt/Adj. EBITDA) increased to 6.4x at closing. This represents a deterioration of the Company's leverage levels and WASH's capital structure is high compared to Moody's Business and Consumer Services methodology employed for this rating. The B3 CFR incorporates Moody's positive view of WASH's strong positioning (largest in Canada and second largest in the U.S.) in its markets as well as the Company's visible and relatively stable revenue stream. Moody's maintain a Stable outlook on the Company given WASH's relatively downturn-resilient revenues and the inelastic nature of demand for its services. Moody's also anticipate the Company to be able to execute on its business plan since it has shown an improved ability to grow organically and implement operating upgrades to enhance its margins. The B2 rating for WASH's 7-year $475 million 1st Lien Senior Secured Term Loan Facility reflects Moody's view that this debt instrument is backed by a strong collateral package, including a first priority security interest in substantially all assets of the U.S. Parent, the U.S. Borrower and the U.S. Subsidiaries. The Canadian Borrower for this 1st Lien facility will also assign a first priority security interest in substantially all of its assets and Canadian Subsidiaries. Conversely, the Caa2 rating for the 8-year $150 million 2nd Lien Term Loan Facility is determined by the relatively weaker position of this debt instrument as it is backed by a second priority security interest in substantially all assets of U.S. Parent, U.S. Borrower and U.S. Subsidiaries (as well as Canadian assets for the Canadian Borrower). If WASH is successful at implementing the strategic operating changes outlined by EQT, which include 1) organic growth through new market entry, 2) continued leadership in its current markets, and 3) enhanced pricing methodologies without negatively impacting demand, WASH should be able to lower its Debt-to-EBITDA to 5.5x by FYE 2017. Moody's expects Interest coverage (measured as (EBITDA -- CAPEX) / Interest Expense) to be at 1.3 - 1.4x levels over the next 12 to 18 months. In terms of liquidity profile, WASH should be able to maintain sufficient liquidity in the coming 12-18 months. WASH should have enough financial flexibility to meet its debt service requirements with Free Cash Flow around $15 million by FYE 2015. Moody's expect WASH's cash & equivalents to be at $8 million by FYE 2015. WASH will also have access to a 5-year $60 million revolver. Moody's anticipate this revolver facility should provide for enough liquidity for the Company in the next 12-18 months, but do not eliminate the possibility of WASH drawing upon its revolver for further acquisitions. Further draws upon its revolver could potentially weaken WASH's liquidity profile. Although Moody's does not anticipate any positive rating actions in the near term for WASH given its recent increase in leverage levels, an upgrade would be possible Adj. Debt/EBITDA decreased consistently to 5.5x and if EBITA / Interest Expense improves consistently above 2x. Improvement in WASH's liquidity profile would also support positive rating actions. Further deterioration in WASH's leverage levels (above 7x) and weakened adjusted interest coverage at levels of 1.0x could potentially trigger a downgrade for WASH. Additionally, debt-financed acquisitions or special dividends to EQT that would increase WASH's debt levels or damage its liquidity profile could certainly place downward pressure on the rating. 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. WASH MULTIFAMILY: S&P Assigns 'B' CCR, Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to El Segundo, Calif.-based WASH Multifamily Acquisition Inc. The outlook is stable. At the same time, S&P assigned its issue-level rating of 'B' (the same level as the corporate credit rating) to WASH's new $60 million senior secured revolving credit facility and $475 million senior secured first-lien term loan. The recovery rating is '3', reflecting S&P's expectation of meaningful (50%-70%, on the high end of the range) recovery for lenders in case of a payment default. S&P also assigned its 'CCC+' issue-level rating (two notches lower than the corporate credit rating) to the company's new $150 million senior secured second-lien term loan. The recovery rating on this term loan is '6', reflecting S&P's expectation of negligible (0-10%) recovery for lenders in the case of a payment default. S&P's ratings assume the transaction closes on substantially the terms presented to S&P, and are subject to change. Pro forma debt outstanding is about $625 million. S&P expects to withdraw all of its ratings on WASH Multifamily Laundry Systems, including its 'B-' corporate credit rating, once its credit facilities have been repaid. "Our ratings on WASH reflect the company's narrow business focus and distant number two position in the highly competitive and fragmented outsourced laundry facilities management services industry," said Standard & Poor's credit analyst Brennan Clark. "The outsourced laundry services market is fragmented in both Canada and the U.S., with about 40% controlled by WASH and Spin. The remainder of the market is composed of smaller regional operators and in-house owner-operators. We believe WASH has the ability to gain share from smaller operators, given its good route density and technology platforms, which translate to fast service response times." The stable outlook reflects Standard & Poor's expectation that credit ratios will modestly improve after the transaction as WASH realizes synergies from prior acquisitions and leverages its information technology platform, in conjunction with modest organic growth. S&P expects liquidity will remain adequate and that financial policy will remain aggressive given financial sponsor ownership. WELBY TOD: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Welby TOD, LLC 1140 US Hwy 287 Num 400-125 Broomfield, CO 80020 Case No.: 15-14302 Chapter 11 Petition Date: April 22, 2015 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Hon. Thomas B. McNamara Debtor's Counsel: Thomas F. Quinn, Esq. 303 E. 17th Ave., Ste. 800 Denver, CO 80203 Tel: 303-832-4355 Fax: 720-554-8033 Email: tquinn@tfqlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by James R. Merlino, manager of Hunterdon, LLC. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. WET SEAL: Wants Deadline to Remove Suits Extended to July 14 ------------------------------------------------------------ The Wet Seal Inc. has filed a motion seeking additional time to remove lawsuits involving the company and its affiliates. In its motion, the company asked the U.S. Bankruptcy Court in Delaware to move the deadline for filing notices of removal of the lawsuits to July 14, 2015. The extension, if granted, would allow the company to make "more fully informed decisions" concerning the removal of the lawsuits, according to its lawyer, Travis Buchanan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. The motion is on Judge Christopher Sontchi's calendar for May 26. About Wet Seal The Wet Seal, Inc., and three affiliates -- The Wet Seal Retail, Inc., Wet Seal Catalog, Inc., and Wet Seal GC, LLC -- filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 15-10081 to 15-10084) on Jan. 15, 2015. The Debtors are a national multi-channel retailer selling fashion apparel and accessory items designed for female customers aged 13 to 24 years old. The Wet Seal, Inc., disclosed $215,254,952 in assets and $60,598,968 in liabilities as of the Chapter 11 filing. The Hon. Christopher S. Sontchi presides over the jointly administered cases. Maris J. Kandestin, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, LLP; Lee R. Bogdanoff, Esq., Michael L. Tuchin, Esq., David M. Guess, Esq., and Jonathan M. Weiss, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP; and Paul Hastings LLP, serve as the Debtors' Chapter 11 counsel. FTI Consulting serves as the Debtors' restructuring advisor. The Debtors' investment banker is Houlihan Lokey. The Debtors tapped Donlin, Recano & Co., Inc. as claims and noticing agent. The petitions were signed by Thomas R. Hillebrandt, interim chief financial officer. B. Riley, the original DIP lender and plan sponsor, is represented by Van C. Durrer, II, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP. Versa Capital Management, LLC, and its affiliate, Mador Lending, LLC, which was selected as the successful bidder at an auction, is being advised by Greenberg Traurig LLP, Klehr Harrison Harvey Branzburg LLP, and KPMG LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors. WORLD SURVEILLANCE: Two Directors Quit -------------------------------------- Anita Hulo resigned from the Board of Directors of World Surveillance Group Inc. effective April 18, 2015, according to a document filed with the Securities and Exchange Commission. Kevin Pruett also resigned from the Board of Directors of the Company and as Audit Committee Chairman effective April 19, 2015. About World Surveillance World Surveillance Group Inc. designs, develops, markets and sells autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs) capable of carrying payloads that provide persistent security and/or wireless communication from air to ground solutions at low, mid and high altitudes. The Company's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. The Company is headquartered at the Kennedy Space Center, in Florida. World Surveillance reported a net loss of $3.41 million on $559,000 of net revenues for the year ended Dec. 31, 2013, as compared with a net loss of $3.36 million on $272,000 of net revenues for the year ended Dec. 31, 2012. Rosen Seymour Shapss Martin & Company LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. These conditions raise substantial doubt about its ability to continue as a going concern. As of Sept. 30, 2014, the Company had $6.14 million in total assets, $17.3 million in total liabilities, all current, and a $11.1 million total stockholders' deficit. Bankruptcy Warning "We have incurred substantial indebtedness and may be unable to service our debt. "Our total indebtedness at September 30, 2014 was $17,292,275. A portion of such indebtedness reflects judicial judgments against us that could result in liens being placed on our bank accounts or assets. We are continuing to review our ability to reduce this debt level due to the age and/or settlement of certain payables but we may not be able to do so. This level of indebtedness could, among other things: * make it difficult for us to make payments on this debt and other obligations; * make it difficult for us to obtain future financing; * require us to redirect significant amounts of cash from operations to servicing the debt; * require us to take measures such as the reduction in scale of our operations that might hurt our future performance in order to satisfy our debt obligations; and * make us more vulnerable to bankruptcy or an unwanted acquisition on terms unsatisfactory to us," the Company stated in its quarterly report for the period ended Sept. 30, 2014. XINERGY LTD: Court Issues Joint Administration Order ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia, Roanoke Division, signed an order directing joint administration of the Chapter 11 cases of Xinery Ltd. and its debtor affiliates under lead case no. 15-70444. About Xinergy Ltd. Xinergy is a U.S. producer of metallurgical and thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of West Virginia and Virginia. Xinergy's operations principally include two active mining complexes known as South Fork and Raven Crest located in Greenbrier and Boone Counties, West Virginia. Xinergy also leases or owns the mineral rights to properties located in Fayette, Nicholas and Greenbrier Counties, West Virginia and Wise County, Virginia. Collectively, Xinergy leases or owns mineral rights to approximately 72,000 acres with proven and probable coal reserves of approximately 77 million tons and additional estimated reserves of 40 million tons. Xinergy Ltd. and 25 subsidiaries commenced Chapter 11 bankruptcy cases (Bankr. W.D. Va. Lead Case No. 15-70444) in Roanoke, Virginia, on April 6, 2015. The cases have been assigned to Judge Paul M. Black. The cases are being jointly administered for procedural purposes. The Debtors tapped Hunton & Williams LLP as attorneys; Global Hunter Securities, as financial advisor, and American Legal Claims Services, LLC as claims, noticing and balloting agent. XINERGY LTD: Has Interim OK to Borrow $7.5-Mil. in DIP Loan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia gave Xinergy Ltd., et al., interim authority to borrow up to an aggregate principal amount of $7.5 million from affiliates of Whitebox Advisors LLC and Highbridge Capital Management, LLC, and use cash collateral securing their prepetition indebtedness. The final hearing is scheduled for May 5, 2015, at 10:00 a.m. (EST). Any party-in-interest objecting to the proposed financing must file their objections no later than April 28. At the final hearing, the Debtors will seek authority to obtain from affiliates of Whitebox and Highbridge an aggregate $40 million postpetition facility on a superpriority, administrative claim and first-priority priming lien basis. Interest on the loans will accrue and be payable monthly in arrears at a rate per annum equal to 14%, with 10% being payable in cash and the balance in-kind. Following an event of default, interest will accrue at an additional 2% per annum. About Xinergy Ltd. Xinergy is a U.S. producer of metallurgical and thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of West Virginia and Virginia. Xinergy's operations principally include two active mining complexes known as South Fork and Raven Crest located in Greenbrier and Boone Counties, West Virginia. Xinergy also leases or owns the mineral rights to properties located in Fayette, Nicholas and Greenbrier Counties, West Virginia and Wise County, Virginia. Collectively, Xinergy leases or owns mineral rights to approximately 72,000 acres with proven and probable coal reserves of approximately 77 million tons and additional estimated reserves of 40 million tons. Xinergy Ltd. and 25 subsidiaries commenced Chapter 11 bankruptcy cases (Bankr. W.D. Va. Lead Case No. 15-70444) in Roanoke, Virginia, on April 6, 2015. The cases have been assigned to Judge Paul M. Black. The cases are being jointly administered for procedural purposes. The Debtors tapped Hunton & Williams LLP as attorneys; Global Hunter Securities, as financial advisor, and American Legal Claims Services, LLC as claims, noticing and balloting agent. XINERY LTD: Has Until June 19 to File Schedules ----------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia, Roanoke Division, extended the time in which Xinergy Ltd., et al., must file their schedules of assets and liabilities through and including June 19, 2015. The U.S. Trustee is authorized to schedule the meeting of creditors required by Section 341 of the Bankruptcy Code on a date that is more than 40 days after the Petition Date. About Xinergy Ltd. Xinergy is a U.S. producer of metallurgical and thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of West Virginia and Virginia. Xinergy's operations principally include two active mining complexes known as South Fork and Raven Crest located in Greenbrier and Boone Counties, West Virginia. Xinergy also leases or owns the mineral rights to properties located in Fayette, Nicholas and Greenbrier Counties, West Virginia and Wise County, Virginia. Collectively, Xinergy leases or owns mineral rights to approximately 72,000 acres with proven and probable coal reserves of approximately 77 million tons and additional estimated reserves of 40 million tons. Xinergy Ltd. and 25 subsidiaries commenced Chapter 11 bankruptcy cases (Bankr. W.D. Va. Lead Case No. 15-70444) in Roanoke, Virginia, on April 6, 2015. The cases have been assigned to Judge Paul M. Black. The cases are being jointly administered for procedural purposes. The Debtors tapped Hunton & Williams LLP as attorneys; Global Hunter Securities, as financial advisor, and American Legal Claims Services, LLC as claims, noticing and balloting agent. XRPRO SCIENCES: Registers 2.1 Million Common Shares for Resale -------------------------------------------------------------- Xrpro Sciences, Inc. filed with the Securities and Exchange Commission a Form S-1 registration statement relating to the resale by certain investors of up to 2,069,525 shares of the Company's common stock, of which 1,555,602 shares of common stock are currently outstanding shares of the Company's common stock, $0.001 par value, 388,923 shares are shares of Common Stock issuable upon exercise of warrants issued in the Company's private placement and 125,000 shares are issuable upon exercise of warrants and options issued to consultants for consulting services. The Common Shares and Private Placement Warrants were acquired by the Selling Stockholders in connection with a private placement offering that was completed in December 2014 and January 2015. The Consultant Warrants and Options were issued as compensation to consultants. The Company is registering the resale of the Shares as required by contractual obligations that it has with each of the Selling Stockholders. The Company is in the process of applying to have its Common Stock quoted on the OTCQB. The Company will not receive any of the proceeds from the Shares sold by the Selling Stockholders. However, the Company will receive net proceeds of any warrants or options exercised (unless the warrants or options are exercised on a cashless basis.) A copy of the Form S-1 is available for free at: http://is.gd/qsgLa3 About XRpro Sciences, Inc. XRpro Sciences, Inc., formerly known as Caldera Pharmaceuticals Inc. -- http://www.xrpro.com/-- provides a unique platform for drug discovery and development services featuring high throughput screening of ion channel assays for the pharmaceutical industry. The Company's proprietary advances in X-ray fluorescence provide measurements that would otherwise be difficult or impossible applying other readily available technologies. XRpro technology directly measures the activity of a drug target, without the need for costly and artifact-causing chemical dyes or radiolabels. XRPro Sciences reported a net loss applicable to common stock of $569,000 in 2014 following a net loss applicable to common stock of $5.88 million in 2013. As of Dec. 31, 2014, XRPro had $7.63 million in total assets, $2.49 million in total liabilities, $133,000 in convertible redeemable preferred stock, and $5 million in total stockholders' equity. [*] Fitch Affirms & Assigns Recovery Ratings to 7 US Telecom Cos. ----------------------------------------------------------------- Fitch Ratings, on April 21, 2015, affirmed and assigned these recovery ratings (RRs) to U.S. Telecom and Technology issuers with 'BB' category Issuer Default Ratings (IDRs): Anixter International Inc. -- IDR at 'BB+'; Anixter Inc. -- IDR at 'BB+'; -- Senior unsecured bank credit facility 'BB+'/'RR4'; -- Senior unsecured notes 'BB+'/'RR4'; The Rating Outlook is Stable. CC Holdings GS V LLC -- IDR at 'BB'; -- Senior secured notes at 'BBB-'/'RR1'; Crown Castle International Corp. -- IDR at 'BB'; -- Senior unsecured debt 'BB-'/'RR5'; Crown Castle Operating Company -- IDR at 'BB'; -- Senior secured credit facility at 'BB+'/'RR2';\ The Rating Outlook is Positive. Dell Inc. -- IDR at 'BB'; -- Senior unsecured debt 'BB'/'RR4'; Dell International LLC -- IDR at 'BB'; -- Senior secured debt 'BBB-'/'RR1'. The Rating Outlook is Positive. The assignment of the recovery ratings reflects 'Recovery Ratings and Notching Criteria for Non-Financial Corporates issuers' criteria dated Nov. 18, 2014, which allows for the assignment of recovery ratings for issuers with IDRs in the 'BB' category. [*] State Courts Grow in Popularity as Forums for Liquidations -------------------------------------------------------------- Kirk O'Neil, writing for The Wall Street Journal, reported that sales under Article 9 of the Uniform Commercial Code, or the prospect of them, have proliferated in recent months and are more are likely, bankruptcy professionals said, as small and middle-market companies seek to avoid the high cost of Section 363 sales in Chapter 11 proceedings. According to The Deal, the bankruptcy professionals said sales of debtor assets in state courts under Article 9 can save debtors and creditors significant time and money when compared to Section 363 transactions. "Article 9 sales are becoming more frequent as an alternative to bankruptcy or receivership," according to a lawyer who has worked on some, Scott Opincar, Esq. -- sopincar@mcdonaldhopkins.com -- of McDonald Hopkins LLC (21 active cases in the first quarter of 2015, placing the firm 50th by number among law firms in The Deal's Bankruptcy League Tables). [*] US Student Loan Prepayment May Mean FFELP Defaults, Fitch Says ------------------------------------------------------------------ The decline in voluntary prepayments has increased extension risk for Federal Family Education Loan Program (FFELP) student loan ABS transactions, Fitch Ratings says. Unless prepayment picks up or issuers come to the rescue, some FFELP transactions could miss their legal final maturities, resulting in technical defaults. The main driver of the extension risk is that actual prepayment rates are lower than initial expectations. Fitch will address this issue on a case-by-case basis. In the event of technical default, Fitch would expect ultimate repayment of full principal and interest afterward. Some issuers are addressing the problem by writing in amendments to allow for more discretion in the optional call. For example, in January, servicing agreement amendments allowed Navient Solutions to make optional purchases of up to 10% of the initial pool balance. If exercised, this would lower the extension risk and help those tranches meet their maturity dates. This risk could also be mitigated by improvement in labor market and expansion of debt consolidation programs. The recent rise in private student loan consolidations, if expanded to more mainstream borrowers, could increase prepayment speed for FFELP ABS transactions. The decline in prepayment rates has followed the slow recovery in the job market for recent graduates. A Federal Reserve Bank of San Francisco study found that recent college graduate wages rose by 6% between 2007 and 2014, compared with a 15% increase for all full-time workers. The growth of student loan payment plans, including the Income-Based Repayment Plan, the Pay As You Earn Repayment Plan and the Income-Contingent Repayment Plan, among others, has also pushed down prepayment rates. [^] BOOK REVIEW: The First Junk Bond ------------------------------------ Author: Harlan D. Platt Publisher: Beard Books Softcover: 236 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today and one for a colleague at http://www.beardbooks.com/beardbooks/the_first_junk_bond.html Only one in ten failed businesses is equal to the task of reorganizing itself and satisfying its prior debts in some fashion. This engrossing book follows the extraordinary journey of Texas International, Inc (known by its New York Stock Exchange stock symbol, TEI), through its corporate growth and decline, debt exchange offers, and corporate renaissance as Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI "flourished for a brief luminous moment but then crashed to earth and was consumed." TEI's story features attention-grabbing characters, petroleum exploration innovations, financial innovations, and lots of risk taking. The First Junk Bond was originally published in 1994 and received solidly favorable reviews. The then-managing director of High Yield Securities Research and Economics for Merrill Lynch said that the book "is a richly detailed case study. Platt integrates corporate history, industry fundamentals, financial analysis and bankruptcy law on a scale that has rarely, if ever, been attempted." A retired U.S. Bankruptcy Court judge noted, "(i)t should appeal as supplementary reading to students in both business schools and law schools. Even those who practice.in the areas of business law, accounting and investments can obtain a greater understanding and perspective of their professional expertise." "TEI's saga is noteworthy because of the company's resilience and ingenuity in coping with the changing environment of the 1980s, its execution of innovative corporate strategies that were widely imitated and its extraordinary trading history," says the author. TEI issued the first junk bond. In 1986 it achieved the largest percentage gain on the NYSE, and in 1987 suffered the largest percentage loss. It issued one of the first bonds secured by a physical commodity and then later issued one of the first PIK (payment in kind) bonds. It was one of the first vulture investors, to be targeted by vulture investors later on. Its president was involved in an insider trading scandal. It innovated strip financing. It engaged in several workouts to sell off operations and raise cash to reduce debt. It completed three exchange offers that converted debt in to equity. In 1977, TEI, primarily an oil production outfit, had had a reprieve from bankruptcy through Michael Milken's first ever junk bond. The fresh capital had allowed TEI to acquire a controlling interest of Phoenix Resources Company, a part of King Resources Company. TEI purchased creditors' claims against King that were subsequently converted into stock under the terms of King's reorganization plan. Only two years later, cash deficiencies forced Phoenix to sell off its nonenergy businesses. Vulture investors tried to buy up outstanding TEI stock. TEI sold off its own nonenergy businesses, and focused on oil and gas exploration. An enormous oil discovery in Egypt made the future look grand. The value of TEI stock soared. Somehow, however, less than two years later, TEI was in bankruptcy. What a ride! All told, the book has 63 tables and 32 figures on all aspects of TEI's rise, fall, and renaissance. Businesspeople will find especially absorbing the details of how the company's bankruptcy filing affected various stakeholders, the bankruptcy negotiation process, and the alternative post-bankruptcy financial structures that were considered. Those interested in the oil and gas industry will find the book a primer on the subject, with an appendix devoted to exploration and drilling, and another on oil and gas accounting. Harlan Platt is professor of Finance at Northeastern University. He is president of 911RISK, Inc., which specializes in developing analytical models to predict corporate distress. ********* 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 ***