/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150703.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, July 3, 2015, Vol. 19, No. 184 Headlines ABTS HOLDINGS: Suit v. Synovus Bank to Remain in Bankruptcy Court AFFIRMATIVE INSURANCE: Closes Sale of MGA Business for $95-Mil. AFREN PLC: Chapter 15 Case Summary AFREN PLC: London-Based Oil Company Files for Chapter 15 ALROSE ALLEGRIA: Case Summary & 20 Largest Unsecured Creditors ALROSE ALLEGRIA: Chapter 11 Plan Due October 30 ALTEGRITY INC: Exclusive Solicitation Period Extended to Nov. 5 AMERICAN MEDIA: Needs More Time to File Fiscal 2015 Form 10-K AMERICAN PIPING: S&P Affirms Then Withdraws 'B-' CCR BABCOCK & WILCOX: Moody's Withdraws 'Ba1' Corporate Family Rating BAHA MAR: Wins Interim Access to $30-Mil. Bankruptcy Loan BEAUMONT GROUP: Case Summary & 5 Largest Unsecured Creditors BOOMERANG TUBE: Files Debt-for-Equity Ch. 11 Plan BOOMERANG TUBE: Meeting of Creditors Set for July 17 BOOMERANG TUBE: US Trustee Forms Five-Member Creditors' Committee CAL DIVE: $7,000 in Claims Transferred Between April 1 & May 7 COLT DEFENSE: Noteholders Oppose DIP Financing CONAGRA FOODS: Fitch Affirms 'BB+' Rating on Subordinated Notes COOPER GAY: Moody's Rates First Lien Loans 'B2' CORINTHIAN COLLEGES: Creditors' Panel Hires Rosner Law as Counsel CORINTHIAN COLLEGES: Hires PricewaterhouseCoopers as Tax Advisor CORINTHIAN COLLEGES: Panel Hires Brown Rudnick as Co-counsel CORINTHIAN COLLEGES: Panel Taps Gavin/Solmonese as Advisor CROWN CASTLE: Fitch Raises Issuer Default Rating From 'BB' CROWN MEDIA: S&P Raises CCR to 'BB-', Outlook Stable CTI BIOPHARMA: Estimates $9.8M Net Financial Standing at May 31 DORAL FINANCIAL: Seeks More Time to Control Bankruptcy Case EFT HOLDINGS: Delays Fiscal 2015 Annual Report EMPIRE LATH: Case Summary & 20 Largest Unsecured Creditors FILTRATION GROUP: Moody's Affirms 'B2' Corporate Family Rating FILTRATION GROUP: S&P Affirms 'B' Rating on 1st Lien Loans FINANCIAL HOLDINGS: Wilmington Trust Objects to Quick Sale FREESEAS INC: Cambria Capital Reports 6.6% Stake as of May 31 FTI CONSULTING: Possible Notes Refinancing No Impact on Moody's CFR FTI CONSULTING: S&P Revises Outlook to Positive & Affirms 'BB' CCR GRADY COUNTY: S&P Puts 'BB+' Revenue Debt Rating on Watch Negative GRAHAM HOLDINGS: S&P Lowers CCR to 'BB+', Outlook Stable GUIDED THERAPEUTICS: Announces $4 Million Private Placement INTEGRATED FREIGHT: Needs More Time to File Fiscal 2015 Form 10-K JCBG INCORPORATED: Case Summary & 20 Largest Unsecured Creditors JW RESOURCES: Files for Chapter 11 to Conduct Open Auction JW RESOURCES: Wants Motions Heard in Lexington Division KAR AUCTION: S&P Raises CCR to 'BB-', Outlook Stable KATE SPADE: Moody's Raises Corporate Family Rating to 'Ba3' KONSTAN REALTY: Case Summary & Largest Unsecured Creditor LAUREATE EDUCATION: Moody's Lowers Corporate Family Rating to 'B3' LINEAR ELECTRIC: Case Summary & 20 Largest Unsecured Creditors LOCAL CORPORATION: Can Use Cash Collateral Until July 9 MIDWAY GOLD: Court Issues Joint Administration Order MOLYCORP INC: Switches to Oaktree for Bankruptcy Financing MURPHY USA: S&P Raises CCR to 'BB+', Outlook Stable NATURAL MOLECULAR: East Valley Gets $80,730 Admin Expense Claim NEOMEDIA TECHNOLOGIES: George O'Leary Quits as Director OXANE MATERIALS: Meeting of Creditors Set for July 13 P.F. CHANG'S: S&P Affirms 'B-' Corp. Credit Rating, Outlook Stable PARFUMS ACQUISITION: Moody's Assigns 'B2' Corporate Family Rating PATRIOT COAL: Auction Slated for Sept. 9; Bids Due Sept. 4 PDC ENERGY: Moody's Hikes Probability of Default Rating to 'B1' PVH CORP: Moody's Raises Corporate Family Rating to 'Ba1' QUEST SOLUTION: Amends Credit Agreement with Wells Fargo RCS CAPITAL: Moody's Affirms B3 Rating on First Lien Loans REFCO INC: NJ Ct. Denies Bid to Exclude Testimonies in SPhinX Suit RICEBRAN TECHNOLOGIES: Stockholders Elect Seven Directors RYNARD PROPERTIES: Fannie Mae Balks at Marston's Compensation SANUWAVE HEALTH: Provides Update on dermaPACE Clinical Trial SEARS HOLDINGS: S&P Affirms 'CCC+' CCR, Outlook Remains Negative SIGA TECHNOLOGIES: Defends Bid to Disband Creditors Committee SIGA TECHNOLOGIES: Susman and Ressler Okayed as Panel Co-Counsel SOURCEHOV LLC: S&P Revises Outlook to Negative & Affirms 'B' CCR SPORTS AUTHORITY: Moody's Affirms 'Caa1' Corporate Family Rating TOLEDO-LUCAS COUNTY: Fitch Affirms BB Rating on 2003 Revenue Bonds TROCOM CONSTRUCTION: Court Denied SSI's Bid for Relief of Stay TROCOM CONSTRUCTION: Okayed to Pay Prepetition Employee Obligations ULTRA PETROLEUM: Moody's Affirms Ba3 CFR & Alters Outlook to Stable UTSTARCOM HOLDINGS: Files Annual Report of iTV Media VERSO PAPER: S&P Raises Corp. Credit Rating to 'B-', Outlook Stable VICTORY ENERGY: Settles with Lucas, Louise Rogers and Earthstone VIGGLE INC: Appoints General Manager & Product Development Head VIGGLE INC: Closes $4.2 Million Underwritten Sale of Common Stock WAYNE COUNTY, MI: State Finds Probable Financial Stress WET SEAL: Court Waives Requirement Relating to Fee Examiner WHATSWHAT INC: Files for Bankruptcy; First Creditors Meeting July 7 WPCS INTERNATIONAL: Issues 157,202 Common Shares WPCS INTERNATIONAL: Settles New York Securities Lawsuit [^] BOOK REVIEW: Risk, Uncertainty and Profit ********* ABTS HOLDINGS: Suit v. Synovus Bank to Remain in Bankruptcy Court ----------------------------------------------------------------- Judge Susan C. Bucklew denied the plaintiff's motions to withdraw the bankruptcy court reference in the case captioned In re: ABLE BODY TEMPORARY SERVICES, INC., Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: YJNK XI CA, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: ROTRPICK, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: ABTS HOLDINGS, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: PREFERABLE HQ, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: CECIL B. DEBOONE, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: TRAINING U, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: USL&H STAFFING, LLC, Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant. In re: YJNK VIII, Inc., Debtor. CHRISTINE L. HERENDEEN, Plaintiff, v. SYNOVUS BANK, Defendant, LEAD CASE NO: 8:15-CV-644-T-24, MEMBER CASE NO: 8:15-CV-645-T-24, MEMBER CASE NO: 8:15-CV-646-T-24, MEMBER CASE NO: 8:15-CV-647-T-24, MEMBER CASE NO: 8:15-CV-648-T-24, MEMBER CASE NO: 8:15-CV-649-T-24, MEMBER CASE NO: 8:15-CV-650-T-24, MEMBER CASE NO: 8:15-CV-651-T-24, MEMBER CASE NO: 8:15-CV-652-T-24 (M.D. Fla., Tampa Div.). On January 30, 2015, Christine Herendeen filed complaints in bankruptcy court on behalf of several bankrupt entities, including the debtors, owned by Frank Mongelluzzi against Synovus Bank. The complaints all sought to determine the extent, validity, or priority of lien and avoidance of lien pursuant to 11 U.S.C. Section 544(a) and assert claims against Synovus Bank for aiding and abetting breach of fiduciary duty. Herendeen moved for the entry of an order withdrawing the reference, contending these reasons: (1) the complaints' claims are non-core; (2) withdrawing the reference would promote the efficient use of economic and judicial resources; and (3) withdrawing of the reference would facilitate consistent rulings. Herendeen also demanded a jury trial which she contended is another factor in support of withdrawal. In denying Herendeen's motion to withdraw the reference, Judge Bucklew determined it is appropriate for the reference to remain with the bankruptcy court, and for non-bankruptcy court to address all matters at this time. A copy of the May 29, 2015 order is available at http://is.gd/K0oqRKfrom Leagle.com. Christine Herendeen, as Chapter 7 Trustee of ABTS Holdings, LLC, Plaintiff, represented by James D. Gassenheimer -- JGassenheimer@bergersingerman.com -- Berger Singerman, LLP. Synovus Bank, formerly known as Columbus Bank and Trust Company, Defendant, represented by Charles Franklin Ketchey, Jr., Trenam Kemker & William Albert McBride -- wmcbride@trenam.com -- Trenam Kemker. Angela Welch, Trustee, Pro Se. According to prior reports by the Troubled Company Reporter, ABTS Holdings, LLC, based in Somerset, New Jersey, filed for Chapter 11 bankruptcy (Bankr. D.N.J. Case No. 10-39287) on September 22, 2010. Judge Kathryn C. Ferguson presides over the case. Lawrence Morrison, Esq., served as Chapter 11 counsel to the debtor. In its petition, ABTS listed under $50,000 in assets, and $1 million to $10 million in debts. A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb10-39287.pdf The petition was signed by Frank Mongelluzi, president. AFFIRMATIVE INSURANCE: Closes Sale of MGA Business for $95-Mil. --------------------------------------------------------------- Affirmative Insurance Holdings, Inc., completed on June 30, 2015, its sale of the MGA Business pursuant to the Stock and Asset Purchase Agreement with Confie Seguros Holding II Co. and Confie Insurance Group Holdings, Inc., dated June 12, 2015, for an aggregate purchase price of up to $95 million. The purchase price may be subject to a further post-closing adjustment for working capital to be determined 90 days after the closing date. The Company received a total of $65 million in cash at closing, in addition to the $5 million payment received when the Purchase Agreement was signed on June 12, 2015. A deferred amount of $15 million is secured by a letter of credit held in escrow and is payable either to the Company's wholly-owned insurance subsidiary to the extent necessary to maintain minimum quarterly risk-based capital ratios, or to the Company on Dec. 31, 2017. An additional deferred contingent amount of up to $10 million is payable depending upon the achievement of certain conditions in 2017 and 2018. Managing General Agency Agreements Two of the Company's wholly-owned insurance subsidiaries entered into managing general agency agreements with the managing general agent entity sold by the Company. Under those agreements, the MGA will continue to produce insurance business for the Company's insurance subsidiaries. The term of the MGA Agreements is expected to continue through at least Dec. 31, 2019. As consideration for the production of business under the MGA Agreements, the MGA will receive a commission that is subject to adjustment based on the loss ratio results of the Company's insurance subsidiaries beginning in 2017. The MGA Agreements also include certain terms designed to preserve the continuity of operations for both the MGA and the Company, including certain obligations with respect to pricing and the conduct of the MGA Business. The MGA Agreements also authorize the MGA to handle claims arising out of the business written by the MGA. The MGA Agreements specify certain minimum standards for claims handling. The MGA will receive a fee as compensation for providing these claims handling services. Third Party Claims Administration Agreement One of the Company's insurance subsidiaries and the MGA entered into a Third Party Claims Administration Agreement pursuant to which the MGA will administer claims arising out of or in connection with policies issued by the Company's insurance subsidiary in the State of California. The MGA will receive a fee as compensation for providing these claims handling services. The Company paid off and terminated that certain $40 million senior secured credit facility dated Sept. 30, 2013, by and between the Company and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent. About Affirmative Insurance Addison, Tex.-based Affirmative Insurance Holdings, Inc., is a distributor and producer of non-standard personal automobile insurance policies for individual consumers in targeted geographic markets. Non-standard personal automobile insurance policies provide coverage to drivers who find it difficult to obtain insurance from standard automobile insurance companies due to their lack of prior insurance, age, driving record, limited financial resources or other factors. Non-standard personal automobile insurance policies generally require higher premiums than standard automobile insurance policies for comparable coverage. Affirmative Insurance reported a net loss of $32.2 million in 2014, compared to net income of $30.7 million in 2013. As of March 31, 2015, the Company had $312 million in total assets, $448 million in total liabilities and a $136 million total stockholders' deficit. KPMG LLP, in Dallas, Texas, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended Dec. 31, 2014. The accounting firm noted that the Company's recent history of recurring losses from operations, its failure to comply with certain financial covenants in the senior secured and subordinated credit facilities, its need to meet debt repayment requirements and its failure to comply with the Illinois Department of Insurance minimum risk-based capital requirements raise substantial doubt about its ability to continue as a going concern. AFREN PLC: Chapter 15 Case Summary ---------------------------------- Chapter 15 Debtor: Afren plc Kinnard House 1 Pall Mall East United Kingdom Chapter 15 Case No.: 15-11452 Chapter 15 Petition Date: July 2, 2015 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin Gross Chapter 15 Petitioner's Counsel: John L. Bird, Esq. FOX ROTHSCHILD LLP 919 North Market St., Suite 300 Wilmington, DE 19801 Tel: 302-622-4263 Fax: 302-656-8920 Email: jbird@foxrothschild.com - and - Jeffrey M. Schlerf, Esq. FOX ROTHSCHILD LLP Citizens Bank Center, Suite 300 919 North Market Street Tel: P.O. Box 2323 Wilmington, DE 19899-2323 Tel: 302-654-7444 Fax: 302-656-8920 Email: jschlerf@foxrothschild.com Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion AFREN PLC: London-Based Oil Company Files for Chapter 15 -------------------------------------------------------- Afren plc filed a Chapter 15 bankruptcy petition (Bankr. D. Del. Case No. 15-11452) on July 2, 2015, in the United States, to seek recognition of its restructuring proceedings in England. Afren (LSE: AFR) is a London-based company specializing in oil and gas exploration and production. The company is listed on the Main Market of the London Stock Exchange. Judge Kevin Gross presides over the U.S. case. L. John Bird, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as counsel to the Debtor in the U.S. case. Alfren's operations are focused in Africa, primarily in Nigeria. Since its IPO in March 2005, Afren has rapidly expanded its portfolio across six countries: Nigeria, Sao Tome & Principe JDZ, Gabon, Republic of the Congo, Côte d'Ivoire, Ghana and Iraqi Kurdistan. In March 2015, Afren reported lenders approved a three month payment deferral for a $300 million debt facility. Afren said it won a payment deferral for a $50 million amortization payment for a $300 million Ebok debt facility that was due January 31. On March 4, 2015, Afren defaulted on its 2016 bonds after refusing to make a $15 million interest payment in order to preserve cash for an ongoing capital structure review. On March 12, 2015, Afren inked a recapitalization plan with its lenders to secure $300 million in funding. They entered the deal with noteholders under its 2016, 2019 and 2020 notes and a majority of the lenders under its existing $300 million Ebok credit facility. The agreement provides $300 million of net total funding before the end of June 2015. On June 30, 2015, the High Court of Justice in England and Wales issued an order granting the Company certain directions in relation to a scheme of arrangement under Part 26 of the UK Companies Act 2006. The proposed scheme of arrangement relates to the proposed financial restructuring of the Company's (a) 11.5% senior secured notes due Feb. 1, 2016; (b) 10.25% senior secured notes due April 8, 2019; and (c) 6.625% senior secured notes due Dec. 9, 2020. The Court's directions include permission to convene a single meeting for Scheme Creditors for the purpose of considering and, if thought fit, approving the scheme of arrangement. The Scheme Meeting will be held on July 29, 2015. Alan Linn was recently named as the Company's CEO. Chairman Statement at Annual Meeting Egbert Imomoh, the chairman of the Board, opened the June 25, 2015, annual general meeting with this statement: "Just over a year ago when I spoke at the last AGM, little was I aware that of what the year held in stock for us. The events that have radically changed our Company commenced when the Board discovered that our former CEO, Osman Shahenshah, and our former COO Shahid Ullah had received payments undisclosed and unknown to the Board. They were immediately suspended and following a very thorough investigation of the situation their contracts with the Company were terminated. This necessitated Toby Hayward stepping in as the interim CEO and me as executive chairman whilst we commenced the search for a new CEO." "Events following their dismissal, including the Company's inability to complete the planned refinancing of its debt obligations in the second half of 2014, and the sharp decline in oil prices from over US$100/bbl in August 2014 to under US$50 per barrel in January 2015, placed significant pressure on the Group's liquidity position, resulting in the Group having net current liabilities of US$459 million as at 31 December 2014. Early this year, we reviewed our strategic options in respect of the Barda Rash field in the Kurdistan region of Iraq after disappointing operational results (early water breakthrough and production of hydrogen sulphide) at the field and a significant reserves and resources downgrade. This eliminated gross 2P reserves whilst gross 2C resources fell from 1,243 mmbbls to around 250 mmbbls. This movement in reserves in the field led to a material impairment charge in the year ended 31 December 2014 of US$933 million, which contributed to the unprecedented pre-tax loss of US$1,955 million last year. "Average net production for year ended 31 December 2014 was 31,819 bopd (excluding Barda Rash), a decrease of 32% from 47,112 bopd for the year ended 31 December 2013, this was due to achieving cost recovery on Ebok in the first quarter of 2014, and delays in achieving production rampup across Afren's producing asset base in Nigeria. There was also a 42% decrease in revenue from US$1,644 million for the year ended 31 December 2013 to US$946 million in the year ended 31 December 2014 reflecting lower production volumes and share of production, and the impact of lower realized oil prices during the second half of 2014. "The Company recorded a loss after tax of US$1,651 million in the year ended 31 December 2014, mainly due to a reduction in revenue given the fall in oil prices, a material impairment charge of US$1,112 million in respect of the carrying value of the Company's production and development assets and the impact of the curtailment of future capital expenditure on our exploration. "In response to the very adverse situation that developed, the interim management took decisive action in reviewing our capital structure and operating/capital expenditure. We took the strategic decision to concentrate on the lower cost production capacity in our Nigerian portfolio. We are focused on delivering on this strategy, and have therefore lowered our full 2015 capital expenditure to US$0.4 billion. We are confident that, in conjunction with our proven operational capabilities, the strategy will create value for all our stakeholders in the near future. "In March, we announced the terms of a financial restructuring which had been agreed with our creditors, and which provided essential additional funding to the Group -- without this funding, I can genuinely say that we would not be here today. Last week, we published the full prospectus explaining the terms of the restructuring and how shareholders can participate in this for the benefit of your Company. I strongly encourage you all to read the document that has been sent to you, which explains why your Board believes that this is the only viable option to secure Afren's future and to provide an opportunity for shareholders to realise value in their investment in the Company. Your Board also unanimously recommends that you vote in favour of the restructuring at the extraordinary general meeting to be held on 24 July, because a "No Vote" will mean shareholders will receive no return at all. "In the first quarter of this year Afren achieved an average net production of 36,035 bopd, which is above our guidance range of 23,000 - 32,000 bopd for 2015. The Company delivered revenue of US$130 million and operating cash flows before movements in working capital of US$59 million, down from US$269 million and US$169 million respectively in Q1 2014. The fall in revenue was due to a lower realised oil prices and production liftings from Ebok utilised to settle a net profit interest (NPI) liability which is part of the agreement. "As we have moved forward, a key requisite has been renewing the management team. I am therefore delighted to welcome Alan Linn as the new Chief Executive Officer. His proven turnaround experience and excellent grasp of operational matters will be invaluable. He has a firm vision of where he wishes to take the Company. We have also recently appointed Dave Thomas as our COO and proposed new executive director, who has significant executive and operational experience in the international oil and gas industry. I would also like to thank Toby Hayward for his steady leadership in adverse circumstances. "On behalf of the Board, I would like to re-iterate my thanks to Darra Comyn, Peter Bingham, John St John and Ennio Sganzerla, who have all stepped down as Executive and Non-Executive Directors since the last AGM. They all have made considerable contributions to Afren and its development. "Additionally, I shall be stepping down as Chairman with effect from the close of this Annual General Meeting, together with Iain McLaren, Toby Hayward, Patrick Obath and Sheree Bryant as Non-Executive Directors. My thanks also go out to each of Iain, Toby, Patrick and Sheree. David Frauman, an experienced restructuring lawyer and director, will become nonexecutive chairman with immediate effect from the close of this meeting. As previously announced, the Company has commenced the search for a Chief Financial Officer and is also seeking to appoint additional non-executive directors to the Board. "The internal changes go beyond the Board movements. All of our internal processes have been reviewed and amended where necessary to ensure compliance with corporate governance best practice. We have run comprehensive training for our employees and contractors in anti-bribery and corruption laws, and are confident that we now have a robust infrastructure in place to avoid the failures of the past. "I would also like to say a few words about our corporate responsibility activities. In 2014 the Board identified CSR as one of the five key strategic priorities needed to fulfil our vision, and the Board of Directors adopted a new CSR strategy. Our approach was generated by taking as the framework industry guidance on sustainability produced by IPIECA and identifying where current performance did not meet stakeholder expectations. The strategy design process identified a series of high priority issues and recommendations to address these gaps. These are reflected in our targets and aims for 2014 and 2015. More detail can be found in our annual report. "In summary, the last 12 months have been far from what we planned and results have been disappointing and have led to a very sharp drop in our share price and a loss of confidence by stakeholders. However I believe the Company can face the future with confidence given the quality of our assets, the good relationship with our partners, the injection of capital and the attraction of very competent people into the Company. I want to thank our shareholders, bondholders, partners, staff and all other stakeholders for their patience and forbearance in what has been a very difficult period for the Company. I would like to end by re-iterating the new Board's commitment and determination to regain the confidence of all our stakeholders, and set Afren back on the course to value growth once more and where it truly belongs." ALROSE ALLEGRIA: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Alrose Allegria LLC 30 East 39th Street New York, NY 10016 Case No.: 15-11760 Chapter 11 Petition Date: July 2, 2015 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Richard J. Bernard, Esq. FOLEY & LARDNER LLP 90 Park Avenue New York, NY 10016 Tel: 212-338-3586 Fax: 212-687-2329 Email: rbernard@foley.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Allen Rosenberg, designated officer. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New York State Department of Taxes $6,042,083 Taxation and Finance A. Patel and W. Jefferson Tel: (631) 595-4030 LaMonica Herbst & Maniscalco, LLP Professional $239,999 Hodgson Russ LLP Professional $146,306 City of Long Beach Water Fund Trade $141,828 Alpha 1 Security Trade $60,546 PSEG Long Island Trade $57,089 Elite In-Flite Services, LLC Trade $56,832 Crowne Plaza JFK Airport $36,676 New York City National Grid Trade $34,864 Cintas Corporation- Professional $33,774 Irwin R Meyers, Esq. Forte Security Group Trade $31,827 Hotel Pennsylvania Trade $29,894 NYS Unemployment Insurance Labor $28,892 Hotel Connections $26,814 Hilton New York JFK Airport $23,682 Elegant II Valet $21,962 Parking Services Treasure Isle Foods Inc. $20,700 Cintas Corporation #780 $19,033 Bank Direct Capital Finance $18,826 Internal Revenue Service Trade Unknown ALROSE ALLEGRIA: Chapter 11 Plan Due October 30 ----------------------------------------------- Alrose Allegria LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-11760) in Manhattan on July 2, 2015, without stating a reason. According to the docket, the Debtor's Chapter 11 plan and disclosure statement are due Oct. 30, 2015. The initial case conference is due by Aug. 3, 2015. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debt. Allen Rosenberg, managing member of Alrose Allegria and president of the Alrose Group, signed the bankruptcy petition. The Debtor tapped Richard J. Bernard, Esq., at Foley & Lardner LLP, in New York, as counsel. In July 2011, another unit of the Alrose Group, Alrose King David LLC filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn. Alrose King David LLC was a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David won approval of its reorganization plan in March 2012. ALTEGRITY INC: Exclusive Solicitation Period Extended to Nov. 5 --------------------------------------------------------------- Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware extended to Sept. 6, 2015, the period by which Altegrity, Inc., et al., has exclusive right to file a plan and to Nov. 5, 2015, the period by which the Debtors have exclusive right to solicit acceptances of that plan. A hearing to consider confirmation of the Debtors' Proposed Plan commence on July 1. In an abundance of caution and in order to preserve the Debtors' exclusivity through confirmation and effectiveness and to maximize the likehood of emergence in the near term with minimal distractions, the Debtors seek further extension of their exclusive periods. About Altegrity Inc. Altegrity Inc. provides background investigations for the U.S. government; employment background and mortgage screening for commercial customers; technology-driven legal services and software for data management; and investigative, analytic, consulting, due diligence, and security services. Altegrity is principally owned by investment funds affiliated with Providence Equity Partners. Altegrity Inc. and 37 of its affiliates filed Chapter 11 Bankruptcy petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015. Jeffrey S. Campbell signed the petitions as president and chief financial officer. The Debtors disclosed total assets of $1.7 billion and total liabilities of $2.1 billion as of June 30, 2014. M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens, Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel. Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the Debtors' Delaware and conflicts counsel. Stephen Goldstein and Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment bankers. Kevin M. McShea and Carrianne J. M. Basler, at Alixpartners LLP serve as the Debtors' restructuring advisors. Prime Clerk LLC is the Debtors' claims and noticing agent. PricewaterhouseCoopers LLP serves as the Debtors' independent auditors. The Bankruptcy Court has scheduled for May 5, 2015, the hearing to consider the approval of the disclosure statement explaining the Debtor's plan, which proposes to liquidate the US Investigations Services. Land Line relates that USIS lost key federal background check contracts. The U.S. Trustee for Region 3 appointed six creditors to serve on the official committee of unsecured creditors. The Creditors' Committee retained Wilmer Cutler Pickering Hale & Dorr LLP, as lead counsel, and Bayard, P.A., as Delaware co-counsel. * * * Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware on May 15, 2015, approved the disclosure statement explaining Altegrity, Inc., et al.'s Joint Chapter 11 Plan and scheduled the confirmation hearing for July 1, 2015, at 10:00 a.m. (prevailing Eastern time). As reported in the April 1, 2015 edition of the Troubled Company Reporter, the Debtors filed a Joint Chapter 11 Plan and accompanying disclosure statement that will delever the Company by approximately $700 million, or 40% of the Debtors' outstanding debt. The Plan provides for a 2.2% estimated recovery of allowed general unsecured claims, which total approximately $82,510,532. Holders of Secured Third Lien Notes Claims are poised to recover 7.7% of their estimated $66,304,133 total amount of claims. Holders of Secured Second Lien Notes Claims are poised to recover 48.4% of their estimated $519,265,011 total amount of claims. A full-text copy of the Disclosure Statement dated May 16, 2015, is available at http://bankrupt.com/misc/ALTEGRITYds0516.pdf AMERICAN MEDIA: Needs More Time to File Fiscal 2015 Form 10-K ------------------------------------------------------------- American Media, Inc., notified the Securities and Exchange Commission it could not complete the filing of its annual report on Form 10-K for the fiscal year ended March 31, 2015, within the prescribed time period due to a delay in obtaining and compiling information required to be included therein, which delay could not be eliminated by the Company without unreasonable effort and expense. The Company plans to file that Annual Report no later than July 14, 2015. The Company expects to report total operating revenues of $245.2 million and operating loss of $5.8 million for the fiscal year ended March 31, 2015, compared to total operating revenues of $287.3 million and operating income $33.8 million for the fiscal year ended March 31, 2014. The decline in operating revenues and operating income were due to (i) the industry wide disruption in the Company's wholesaler channels due to the shutdown and bankruptcy of one of the Company's major wholesalers, (ii) the decline in the celebrity magazine market, (iii) the overall decline in the consumer advertising market and (iv) the divestiture of the distribution and merchandising business, included in the prior year period with no comparable revenue in the current year period. The decline in operating income was also impacted by the increase in impairment charges for goodwill and tradenames during the current year period which were previously reported in the quarter ended Sept. 30, 2014. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., an in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media reported a net loss of $54.3 million on $344 million of total operating revenues for the fiscal year ended March 31, 2014, following a net loss of $56.2 million on $349 million of total operating revenues for the year ended March 31, 2013. As of Dec. 31, 2014, American Media had $529.37 million in total assets, $568 million in total liabilities, $3 million in redeemable non-controlling interests and a $41.8 million total stockholders' deficit. * * * As reported in the Jan. 9, 2015 edition of the TCR, American Media carries a 'Caa1' corporate family rating from Moody's. American Media's Caa1 CFR reflects the company's elevated total debt to EBITDA leverage that Moody's expect will rise to the 8-9x range (Moody's adjusted) over the rating horizon from about 7x as of Sept. 30, 2014 as a result of lower EBITDA performance that stems from a reduction in circulation sales associated with the bankruptcy filing of AMI's second largest publications wholesaler, Source Interlink Distribution ("Source"). The rating also captures AMI's weak liquidity profile and deteriorating EBITDA cushion under the revolver's first-lien leverage covenant resulting from the lower circulation revenue aggravated by the Source bankruptcy, which required temporary covenant relief through an amendment to the credit facility. As reported in the Jan. 14, 2015 edition of the TCR, Standard & Poor's Ratings Services said that its ratings on U.S. magazine publisher American Media Inc., including the 'CCC' corporate credit rating, are not affected by the company's announcement that it is exchanging $32 million of its first-lien 11.5% notes due 2017 for $39 million in new second-lien 7% notes due 2020. The negative rating outlook remains unchanged. AMERICAN PIPING: S&P Affirms Then Withdraws 'B-' CCR ----------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' corporate credit rating on U.S.-based steel distributor American Piping Products Inc. S&P subsequently withdrew all of its ratings, at the company's request, following the repayment of its senior secured notes. BABCOCK & WILCOX: Moody's Withdraws 'Ba1' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings for The Babcock & Wilcox Company including its Ba1 corporate family rating, Ba2-PD probability of default rating, Baa3 senior secured bank credit facility rating and the SGL-1 Speculative Grade Liquidity Rating. The company recently terminated its bank credit facility following the spin-off of its Power Generation business. RATINGS RATIONALE Headquartered in Charlotte, North Carolina, The Babcock & Wilcox Company (B&W) was an energy-focused engineering and construction company with a sizeable government business prior to the spin-off of its Power Generation business on June 30, 2015. The company has been renamed BWX Technologies and consists of three of the company's prior segments including: 1) Nuclear Operations - produces naval nuclear components and reactors for the US Department of Energy (DOE)/ National Nuclear Security Administration (NNSA), 2) Nuclear Energy - provides commercial nuclear services and manufactures components for utilities, 3) Technical Services - together with its various joint venture partners, operates facilities for the DOE/ NNSA and other US government agencies. BWX Technologies pro forma revenue for the year ended December 31, 2014 was about $1.5 billion. BAHA MAR: Wins Interim Access to $30-Mil. Bankruptcy Loan --------------------------------------------------------- Stephanie Gleason, writing for The Wall Street Journal, reported that Baha Mar Ltd., the developer of a yet-to-open $3.5 billion Bahamian resort, received approval to begin tapping $80 million in fresh financing that keeps the resort on track to eventually open its doors to guests. According to the Journal, Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del., signed off on the company's bid to access $30 million of the financing on an interim basis during a hearing on July 1, noting that it was the first time in a long time he'd seen a bankruptcy loan with so few strings attached. The financing is being provided by Baha Mar chairman Sarkis Izmirlian, a Bahamian businessman who began work on the project in 2009, the Journal related. About Baha Mar Orlando, Florida-based Northshore Mainland Services Inc., Baha Mar Enterprises Ltd., and their affiliates sought protection under Chapter 11 of the Bankruptcy Code on June 29, 2015 (Bankr. D.Del., Case No. 15-11402). Baha Mar owns, and is in the final stages of developing, a 3.3 million square foot resort complex located in Cable Beach, Nassau, The Bahamas. The case is assigned to Judge Kevin J. Carey. The Debtors are represented by Paul S. Aronzon, Esq., and Mark Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California; and Gerard Uzzi, Esq., Thomas J. Matz, Esq., and Steven Z. Szanzer, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. The Debtors' Delaware counsel are Laura Davis Jones, Esq., James E. O'Neill, Esq., Colin R. Robinson, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. The Debtors' Bahamian counsel is Glinton Sweeting O'Brien. The Debtors' special litigation counsel is Kobre & Kim LLP. The Debtors' construction counsel is Glaser Weil Fink Howard Avchen & Shapiro LLP. The Debtors' investment banker and financial advisor is Moelis Company LLC. The Debtors' claims and noticing agent is Prime Clerk LLC. BEAUMONT GROUP: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Beaumont Group LLC dba First Street Storage a California limited liability company PO Box 1267 Anaheim, CA 92815 Case No.: 15-13344 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: July 1, 2015 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Hon. Scott C Clarkson Debtor's Counsel: Robert E Opera, Esq. WINTHROP COUCHOT PC 660 Newport Center Dr Ste 400 Newport Beach, CA 92660 Tel: 949-720-4100 Email: ropera@winthropcouchot.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by I.B. Nanda, member. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-13344.pdf BOOMERANG TUBE: Files Debt-for-Equity Ch. 11 Plan ------------------------------------------------- Boomerang Tube, LLC, et al., filed with the U.S. Bankruptcy Court for the District of Delaware Chapter 11 plan that has been prearranged before the Petition Date and a disclosure statement explaining the Plan. The Plan reduces the Debtors' funded debt obligations by converting approximately $214 million in outstanding principal of Term Loan Facility obligations into (i) 100% of the New Holdco Common Stock (subject to dilution for (1) the payment of the Exit Term Facility Backstop Fee and the Exit Term Facility Closing Fee in the aggregate equal to collectively 20% of the New Holdco Common Stock as of the closing date of the Exit Term Facility and (2) issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of New Holdco); and (ii) $55 million of subordinated secured notes issued by New Opco. The Plan provides that New Holdco will hold 100% of the New Opco Common Units. Pursuant to the DIP Term Facility Loan Agreement, dated as of June 11, 2015, the Term Loan Lenders provided the $60 million DIP Term Facility, which will be paid in cash on the Effective Date with the proceeds of the Exit Term Facility. Pursuant to an Exit Commitment Letter, dated as of June 8, 2015, the DIP Term Facility Lenders have committed to provide the Exit Term Facility. Pursuant to the DIP ABL Facility Loan Agreement, dated as of June 11, 2015, the ABL Facility Lenders provided the $85 million DIP ABL Facility, which will refinanced by the Exit ABL Facility. Pursuant to an Exit Commitment Letter, dated as of June 8, 2015, the DIP ABL Facility Lenders have committed to provide the Exit ABL Facility. The Debtors intend to present the Disclosure Statement, and any changes or modifications thereto, for approval at a hearing on Aug. 11, 2015, at 2:00 p.m. (prevailing Eastern Time). Objections, if any, to the approval of the Disclosure Statement must be served on or before July 30. A full-text copy of the Disclosure Statement dated June 30, 2015, is available at http://bankrupt.com/misc/BOOMERANGds0630.pdf About Boomerang Tube Boomerang Tube, LLC, is a manufacturer of welded Oil Country Tubular Goods ("OCTG") in the United States. OCTG are used by drillers in exploration and production of oil and natural gas and consist of drill pipe, casing and tubing. Boomerang has corporate offices in Chesterfield, Missouri and manufacturing facilities in Liberty, Texas, strategically located near major steel production centers and end-user markets. With a 487,000 square foot plant that houses two mills and heat treat lines and a contingent 119 acres, these facilities constitute the second largest alloy OCTG mill in North America. Access Tubulars, LLC, owns 81% of the equity interests in Boomerang. Boomerang Tube and its subsidiaries BTCSP LLC and BT Financing sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-11247) on June 9, 2015, with a deal with lenders on a balance sheet restructuring that would convert $214 million of debt to 100% of the common stock of the reorganized company. The cases are assigned to Judge Mary F. Walrath. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as attorneys; Lazard Freres & Co. LLC, as financial advisor; and Donlin, Recano & Co., Inc., as claims and noticing agent. BOOMERANG TUBE: Meeting of Creditors Set for July 17 ---------------------------------------------------- The meeting of creditors of Boomerang Tube LLC is set to be held on July 17, 2015, at 10:00 a.m. (ET), according to a filing with the U.S. Bankruptcy Court in Delaware. The meeting will take place at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, 844 North 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 Boomerang Tube Boomerang Tube, LLC, is a manufacturer of welded Oil Country Tubular Goods ("OCTG") in the United States. OCTG are used by drillers in exploration and production of oil and natural gas and consist of drill pipe, casing and tubing. Boomerang has corporate offices in Chesterfield, Missouri and manufacturing facilities in Liberty, Texas, strategically located near major steel production centers and end-user markets. With a 487,000 square foot plant that houses two mills and heat treat lines and a contingent 119 acres, these facilities constitute the second largest alloy OCTG mill in North America. Access Tubulars, LLC, owns 81% of the equity interests in Boomerang. Boomerang Tube and its subsidiaries BTCSP LLC and BT Financing sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-11247) on June 9, 2015, with a deal with lenders on a balance sheet restructuring that would convert $214 million of debt to 100% of the common stock of the reorganized company. The cases are assigned to Judge Mary F. Walrath. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as attorneys; Lazard Freres & Co. LLC, as financial advisor; and Donlin, Recano & Co., Inc., as claims and noticing agent. BOOMERANG TUBE: US Trustee Forms Five-Member Creditors' Committee ----------------------------------------------------------------- The U.S. trustee overseeing the Chapter 11 case of Boomerang Tube LLC appointed five creditors to serve on an official committee of unsecured creditors: (1) Nucor Steel Attn: Mark DiGirolamo P.O. Box 30 Armorel, AR 72310 Phone: (870) 838-2303 Fax: (870) 762-2108 (2) Daewoo International Corp. Attn: Jinyong Kwon 165, Convensia-daero, Yeonsu-gu Incheon 406-840, Korea Phone: 82-2-759-3456 Fax: 82-2-2076-2411 (3) Cudd Pressure Control Inc. d/b/a Patterson Tubular Services P.O. Box 117 539 S. Sheldon Channelview, TX 77530 Phone: (800) 452-5443 Fax: (281) 452-7410 (4) Harry Johnson Welding 10191 Hwy 90 East Liberty, TX 77575 Phone: (936) 334-1818 Fax: (936) 334-1821 (5) J.B. Fabricating LLC P.O. Box 750243 Houston, TX 77275 Phone: (713) 705-7053 Fax: (281) 485-8498 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Boomerang Tube Boomerang Tube, LLC, is a manufacturer of welded Oil Country Tubular Goods ("OCTG") in the United States. OCTG are used by drillers in exploration and production of oil and natural gas and consist of drill pipe, casing and tubing. Boomerang has corporate offices in Chesterfield, Missouri and manufacturing facilities in Liberty, Texas, strategically located near major steel production centers and end-user markets. With a 487,000 square foot plant that houses two mills and heat treat lines and a contingent 119 acres, these facilities constitute the second largest alloy OCTG mill in North America. Access Tubulars, LLC, owns 81% of the equity interests in Boomerang. Boomerang Tube and its subsidiaries BTCSP LLC and BT Financing sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-11247) on June 9, 2015, with a deal with lenders on a balance sheet restructuring that would convert $214 million of debt to 100% of the common stock of the reorganized company. The cases are assigned to Judge Mary F. Walrath. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as attorneys; Lazard Freres & Co. LLC, as financial advisor; and Donlin, Recano & Co., Inc., as claims and noticing agent. CAL DIVE: $7,000 in Claims Transferred Between April 1 & May 7 -------------------------------------------------------------- In the Chapter 11 cases of Cal Dive International, Inc., et al., two claims switched hands between April 1, 2015, and May 7, 2015: Transferee Transferor Claim Amount ---------- ---------- ------------ Sierra Liquidity Fund, LLC Power Specialties, $2,492.95 LLC Sierra Liquidity Fund, LLC Veriforce $4,517.50 About Cal Dive International Houston, Texas-based marine contractor Cal Dive International, Inc., provides manned diving, pipelay and pipe burial, platform installation and salvage, and light well intervention services to the offshore oil and natural gas industry on the Gulf of Mexico OCS, Northeastern U.S., Latin America, Southeast Asia, China, Australia, West Africa, the Middle East, and Europe. Cal Dive and its U.S. subsidiaries filed simultaneous voluntary petitions (Bankr. D. Del. Lead Case No. 15-10458) on March 3, 2015. Through the Chapter 11 process, the Company intends to sell non-core assets and intends to reorganize or sell as a going concern its core subsea contracting business. Cal Dive disclosed total assets of $571 million and total debt of $411 million as of Sept. 30, 2015. The Debtors tapped Richards, Layton & Finger, P.A., as counsel, O'Melveny & Myers LLP, as co-counsel; Jones Walker Jones Walker LLP as corporate counsel; and Kurtzman Carson Consultants, LLC, as claims and noticing agent. The Debtors also tapped Carl Marks Advisory Group LLC as crisis managers and appoint F. Duffield Meyercord as chief restructuring officer. The U.S. Trustee for Region 3 formed a five-member committee of unsecured creditors in the case. The Committee retained Akin Gump Strauss Hauer & Feld LLP and Pepper Hamilton LLP as co-counsel; and Guggenheim Securities, LLC as exclusive investment banker. Cal Dive Offshore Contractors, Inc., disclosed total assets of $233,273,806 and $311,339,932 in liabilities as of the Chapter 11 filing. COLT DEFENSE: Noteholders Oppose DIP Financing ---------------------------------------------- U.S. Bankruptcy Judge Laurie Selber Silverstein has authorized Colt Defense LLC access to its proposed $20 million of DIP Financing on an interim basis. The DIP Loan consists of (i) a $6,666,667 DIP Facility from Cortland Capital Market Services, LLC, as agent for a consortium of lenders; and (ii) a $13,333,333 DIP Facility from Wilmington Savings Fund Society, FSB, as agent for a consortium of lenders. The DIP Facilities accrue interest at 12.5% per annum. An initial draw of $6 million will be available on the execution date, and a $4 million is available after entry of a second interim order. An additional draw of $10 million is available upon entry of a final DIP order. Noteholders Object In its supplemental objection, the Ad Hoc Consortium of Holders of the 8.75% Senior Notes says the Debtors' proposed DIP Loan compels a particular case outcome: A Section 363 sale in about one month, presumptively to Colt's equity sponsor (Sciens Capital Management). This is proper, say the Debtors, because: (1) their pre-petition bondholders are now locked in a stand-off with Sciens; (2) the Debtors are too fragile to withstand the resulting business pressures; and (3) the lease for their primary manufacturing facility (controlled by Sciens) is about to expire. The Debtors further contend that, given present circumstances, no alternative financing is available or appropriate. Moreover, and of critical importance, the Debtors assure the Court that it can place confidence in the Debtors' business judgment, including their decision to enter into the DIP Loan, because it all has been carefully vetted by an Independent Committee of the Governing Board. Contrary to the Debtors' narrative presentation, the Consortium submits that Sciens is not a white knight savior; rather, it has long run Colt for cash, taking for itself all available cash flow and tax benefits and depriving the business of necessary R&D and CapEx funding. The company does not have a reliable governance structure; Sciens controls corporate decision-making, including matters purportedly vested with the Independent Committee, and specifically waived (at a critical strategic moment) all fiduciary obligations it otherwise owed the company, its Members, and any other Person. The Consortium states that there is no stand-off with bondholders; Sciens has rebuffed the Consortium's numerous offers of support, including offers to provide less expensive financing. Sciens instead had Colt launch two expensive exchange/pre-pack offers that called for bondholders to take 70% or 55% discounts on their claims, while equity was left unimpaired. When the bondholders did not readily accept proposals so contrary to the absolute priority rule, Sciens threatened to evict the Debtors from their primary manufacturing facility (a threat that will not withstand legal scrutiny). When the Consortium pleaded with Sciens for a more business-like approach, the Consortium became aware of Sciens fall-back scheme: File Colt for Chapter 11 relief; claim false emergency to compel a quick Section 363 sale; ensure no competitive bidding; and then reclaim the company by bidding a peppercorn above the secured debt. The DIP Loan is the means to that end. Appreciating that the Debtors still require liquidity, the Consortium has advanced its own offer for post-petition financing. The Consortium’s DIP Loan: (i) provides the same liquidity amount for working capital ($20 million); (ii) is substantially less expensive; (iii) does not prime any secured lender's liens; (iv) has a more extended (6 month) term; (v) does not contain any milestones, case controls or otherwise dictate case outcome; (vi) does not default if the Court perceives that, on these facts, a Chapter 11 trustee is warranted; and (vii) is a true defensive loan, offered by the fulcrum creditors to maximize (not excessively usurp) estate value. The Consortium respectfully submits that, on these facts, this is a far more appropriate way to launch these Chapter 11 cases. The Consortium is represented by: ASHBY & GEDDES P.A. William P. Bowden, Esq. Karen B. Skomorucha Owens, Esq. 500 Delaware Ave., 8th Floor P.O. Box 1150 Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-1888 Sciens Capital Responds Sciens Capital Management LLC has replied to the objection filed by the Ad Hoc Consortium of Holders of the 8.75% Senior Notes to the DIP motion. Sciens and Colt have implemented a sales process, governed by independent board members, designed to ensure a price for Colt's assets that meets the entire fairness standard and that will maximize value for all stakeholders. In order to afford stability to this process, Sciens, a long-time owner of Colt, is prepared to serve as buyer if no one else emerges. Colt's independent board members decided to pursue this approach because of the ill-considered, pre-petition efforts of the Consortium to burden Colt with more debt than it can handle, and to arrogate value to the Consortium's institutional members to the exclusion of several thousand small, retailer holders of the Senior Notes who collectively hold tens of millions of dollars of these obligations. An independent sales process, conducted under the watchful eye of this Court, eliminates the potential for further games by the Consortium: if its members want to own Colt, they need to bid for it. The Consortium's financial advisor admitted in his deposition that the Consortium's proposed DIP financing is intended to derail this process. Without a sales process, Colt will be in a free-fall chapter 11. But Colt cannot survive a free-fall chapter 11. It derives almost half of its revenue from U.S. and allied governments. There is a substantial risk that Colt will lose its contracts with these critical customers in a protracted chapter 11, as they cannot rely on a bankrupt company with an uncertain future to provide them with vital military equipment. This is why the independent committee authorized a sales process with a committed, experienced, back-stop bidder. This Court should not countenance the enormous risk of value destruction engendered by the Consortium's approach. It should instead defer to the judgment of Colt's independent committee members regarding the DIP Motion. That committee has been vested with exclusive authority to determine which financing option is best for Colt; Sciens and its board designees have no vote on the matter. The Consortium's objections therefore are without merit and should be overruled. Sciens Capital is represented by: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Anthony W. Clark, Esq. Jason M. Liberi, Esq. One Rodney Square, P.O. Box 636 Wilmington, Delaware 19899-0636 Tel: (302) 651-3000 Fax: (302) 651-3001 About Colt Colt Defense LLC is one of the world's oldest and most iconic designers, developers, and manufacturers of firearms for military, law enforcement, personal defense, and recreational purposes and was founded over 175 years ago by Samuel Colt, who patented the first commercial successful revolving cylinder firearm in 1836 and began supplying U.S. and international military customers with firearms in 1847. Colt is incorporated in Delaware and headquartered in West Hartford, Connecticut. In 1992, Colt Manufacturing Company, then the principal operating subsidiary, filed chapter 11 petitions in the U.S. Bankruptcy Court for the District of Connecticut. An investment by Zilkha & Co. allowed CMC to confirm a chapter 11 plan and emerge from bankruptcy in 1994. Sometime after 1994, majority ownership of the Company transitioned from Zilkha & Co. to Sciens Capital Management. On June 12, 2015, Colt's previously announced exchange offer, consent solicitation and solicitation of acceptances of a prepackaged plan of reorganization, dated April 14, 2015, as supplemented, with respect to its $250 million in 8.75% Senior Notes due 2017 expired. The conditions to the exchange offer, the consent solicitation and the prepackaged plan of reorganization were not satisfied, and those conditions were not waived by Colt. Colt's restructuring support agreement with Marblegate Special Opportunities Master Fund, L.P. and Morgan Stanley Senior Funding, Inc., the Company's senior secured term loan lenders, requires it to file for Chapter 11 bankruptcy. Accordingly, Colt Holding Company LLC and nine affiliates, including Colt Defense LLC, on June 14, 2015, filed voluntary petitions (Bankr. D. Del. Lead Case No. 15-11296) for relief under Chapter 11 of the Bankruptcy Code to pursue a sale of the assets as a going concern. Colt Defense estimated $100 million to $500 million in assets and debt. The Debtors tapped Richards, Layton & Finger, P.A., and O'Melveny & Myers LLP, as attorneys, and Kurtzman Carson Consultants LLC as claims and noticing agent. Perella Weinberg Partners L.P. is acting as financial advisor of the Company, and Mackinac Partners LLC is acting as its restructuring advisor. Wilmington Savings Fund Society, FSB, as agent under the $13.33 million Term DIP Loan Agreement, is represented by Pryor Cashman LLP's Eric M. Hellige, Esq.; and Willkie Farr & Gallagher LLP's Leonard Klingbaum, Esq. Cortland Capital Market Services LLC, as agent under the $6.67 million Senior DIP Credit Agreement, is represented by Holland & Knight LLP's Joshua M. Spencer, Esq.; Stroock & Stroock & Lavan LLP's Brett Lawrence, Esq.; and Osler, Hoskin & Harcourt LLP's Richard Borins, Esq., and Tracy Sandler, Esq. * * * Colt's equity sponsor, Sciens Capital Management, has agreed to act as a stalking horse bidder in the proposed asset sale. Details of the deal were not provided in Colt's news statement announcing the Chapter 11 filing. Colt, however, said it would be soliciting competing bids and has appointed an independent committee of its board of managers to manage the process and evaluate bids. Colt expects to complete the entire Chapter 11 process in 60-90 days. CONAGRA FOODS: Fitch Affirms 'BB+' Rating on Subordinated Notes --------------------------------------------------------------- Fitch Ratings has affirmed the Long-term Issuer Default Ratings for ConAgra Foods, Inc. and its subsidiary, Ralcorp Holdings, Inc. at 'BBB-' and has affirmed ConAgra's Short-term IDR at 'F3'. The Rating Outlook is Negative. Fitch views ConAgra's announcement that it will exit the Private Brands operation and essentially unwind the Ralcorp acquisition (completed just two years ago) as a credit positive, and the company could use potential proceeds to pay down debt to bring leverage down to the low 3.0x range in the near term. However, ConAgra continues to face headwinds in its remaining branded business. ConAgra would have to demonstrate a meaningful track record in stabilizing its volumes and market share in the remaining branded and commercial businesses and a commitment to a conservative financial policy, particularly in the face of activist interest, to maintain its investment grade rating. KEY RATING DRIVERS ConAgra announced plans to exit its Private Brands operations, essentially unwinding its $6.8 billion acquisition (or 13.2x EV/EBITDA multiple) of RalCorp in January 2013. Profitability in the company's private brands business has been weak. A highly competitive bidding environment, combined with recent service-related issues and execution shortfalls, have negatively impacted results and expectations for volume, pricing and margins in that business. The Private Brands segment generated roughly $4.1 billion in annual net sales and adjusted EBITDA of approximately $350 million in the fiscal year ended May 31, 2015, accounting for approximately 26% of total revenue and 16% of EBITDA. Based on recent packaged foods trading and transaction multiples, Fitch anticipates ConAgra could receive proceeds of $3.2 billion to $4.2 billion based on a 9x to 12x multiple. The ongoing business, consisting of Consumer and Commercial operations, currently generates $11.8 billion annual net sales and $1.7 billion operating EBITDA. Considering fiscal 2015 year-end total debt of $7.9 billion, ConAgra would have to pay down approximately $2.3 to $2.6 billion in debt to return gross leverage to the 3.0-3.2x range. However, activist investor Jana Partners, which has disclosed a 7% equity stake, could also push for accelerated change that could result in higher leverage if proceeds are primarily used for shareholder friendly activities. In addition, should ConAgra even pay down significant debt to bring leverage to the low 3.0x range given its current comments about maintaining a balanced capital allocation that includes a leverage target in the two to three times range, there are significant headwinds in the remaining business. Volumes in its consumer foods business, which accounts for 46% of revenue and approximately 55% of EBITDA, have been in the negative 1% to 3% range for the last five years, offset by only a modest improvement in pricing/mix effect in the 1% range. The company will need to drive productivity improvements in sg&a, supply chain and trade spending to support future investments in marketing, infrastructure, innovation, and acquisitions. In addition, similar to its industry peers, the company will have to reposition its branded portfolio over the next few years to exit low to negative growth brands and invest in health and wellness brands given shifting consumer preferences. ConAgra plans to outline its long-term financial strategy at an investor event in the fall of 2015, and Fitch will continue to evaluate the impact of its various restructuring activities, use of proceeds from the sale of private brand, and any change in financial strategies that may result from activist actions. KEY ASSUMPTIONS -- Potential proceeds of $3.2 billion to $4.2 billion for the private brands business, based on EBITDA multiples in the 9- 12x range on adjusted EBITDA of approximately $350 million. -- Post the sale of the private brand business, ConAgra would have to pay down approximately $2.3 to $2.6 billion in debt to return gross leverage to the 3.0-3.2x range. -- Remaining Consumer and Commercial businesses currently generates approximately $11.8 billion net sales and $1.7 billion EBITDA. Assuming above mentioned debt paydown, the company will have to drive operating improvements in its ongoing business to maintain or improve EBITDA from current levels. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to a negative rating action include: -- If weak top line and operating trends continue and gross leverage (total debt-to-operating EBITDA) remains at or above the mid-3.0x range. Deteriorating FCF or a sizeable leveraged transaction would also support a downgrade. Future developments that may, individually or collectively, lead to a positive rating action include: -- The Outlook could be revised to Stable if there is a sustained operational improvement in fiscal 2016 and beyond, including stable volumes and market shares in its ongoing businesses, in addition to demonstrating a financial commitment to maintain leverage in the low 3.0x range. -- In the long term, a positive rating action could be supported by consistent positive volume and market share growth due to an improved brand portfolio, strong FCF generation, along with a commitment to maintain leverage in the mid-2x range. This is not anticipated in the intermediate term. LIQUIDITY Ample Liquidity, Manageable Maturities: ConAgra maintains an undrawn $1.5 billion revolving credit facility expiring Sept. 14, 2018 that provides backup to its commercial paper (CP) program. The company had $183 million cash, which was mainly outside the U.S., at fiscal 2015 year end. The revolving credit facility contains covenants that consolidated debt must not exceed 65%, and the company's fixed charge coverage ratio must be greater than 1.75x on a rolling four quarter basis. ConAgra's long-term debt maturities primarily consist of $1 billion due in fiscal 2016 and approximately $550 million due in fiscal 2017. FULL LIST OF RATING ACTIONS Fitch has affirmed these ratings: ConAgra Foods, Inc. -- Long-term IDR at 'BBB-'; -- Senior unsecured notes at 'BBB-'; -- Bank credit facility at 'BBB-'; -- Subordinated notes at 'BB+'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'. Ralcorp Holdings, Inc. -- Long-term IDR at 'BBB-'; -- Senior unsecured notes at 'BBB-'. The Rating Outlook is Negative. COOPER GAY: Moody's Rates First Lien Loans 'B2' ----------------------------------------------- Moody's Investors Service has placed the ratings of Cooper Gay Swett & Crawford Ltd. (CGSC corporate family rating B3, probability of default rating B3-PD) on review for downgrade given deterioration in EBITDA, financial leverage and interest coverage metrics. Moody's also placed the B2 rating on CGSC's revolving credit facility and first-lien term loan and Caa2 rating on its second-lien term loan on review for downgrade. RATINGS RATIONALE According to Moody's, the review will focus on the timing and magnitude of the company's strategic initiatives to restore revenue and EBITDA growth, the impact of expense reduction and other restructuring initiatives, as well as prospective interest coverage and free cash flow generation to service debt. For the 12 months ended March 31, 2015, the company reported a decline in the EBITDA margin to about 13% as a result of weak organic growth in the group's international operations, particularly in London and Europe, which was mitigated by good performance in its North America segment. The company's debt-to-EBITDA ratio has risen to over 10x on a Moody's adjusted basis with a weakening of EBITDA interest coverage to about 1x for the 12 months ended March 2015. The rating agency added the company has $36 million of unrestricted cash on its balance sheet as of March 31, 2015. CGSC has a good market presence as a wholesale and reinsurance broker and is well diversified across geographic regions and business lines. Declines in revenue and earnings in part reflect negative pricing and volume trends related to its January 1 reinsurance renewals, where changes in buying trends and significant competition from alternative capital has pressured the traditional reinsurance market. The rating agency said that the following factors could lead to a downgrade: (i) debt-to-EBITDA ratio remaining above 8x on a sustained basis, (ii) (EBITDA-capex) coverage of interest remaining below 1.2x, and/or (iii) free-cash-flow to debt ratio consistently less than 2%. Conversely, the ratings could be confirmed in the event of: (i) successful execution of management actions to restore revenue and EBITDA, (ii) debt-to-EBITDA ratio trending towards 8x or below, (iii) (EBITDA-capex) coverage of interest of exceeding 1.2x, and/or (iv)) free-cash-flow to debt ratio consistently exceeding 2%. Moody's has placed the following ratings on review for downgrade (and revised the loss given default (LGD) assessments as of March 31, 2015): CGSC corporate family rating B3; CGSC probability of default rating B3-PD; CGSC of Delaware Holdings Corporation $75 million revolving credit facility expiring April 2018, rated B2 (to LGD3, 33% from LGD3, 35%); CGSC of Delaware Holdings Corporation $305 million first-lien term loan due April 2020, rated B2 (to LGD3, 33% from LGD3, 35%); CGSC of Delaware Holdings Corporation $120 million second-lien term loan due October 2020, rated Caa2 (to LGD5, 84% from LGD5, 86%). Based in London, England, CGSC is a leading independent wholesale, underwriting management and reinsurance broker, placing about $5 billion of premiums annually in the London, US, and international insurance markets. For the 12 months ending March 2015, the company generated revenue of $375 million. CORINTHIAN COLLEGES: Creditors' Panel Hires Rosner Law as Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Corinthian Colleges, Inc., et al., seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Rosner Law Group LLC as Delaware counsel to the Committee, nunc pro tunc to May 13, 2015. The Committee requires Rosner Law to: (a) provide legal advice regarding local rules, practices, and procedures and provide substantive and strategic advice on how to accomplish the Committee's goals in connection with the prosecution of these cases, bearing in mind that the Court relies on Delaware counsel such as RLG to be involved in all aspects of these bankruptcy cases; (b) review, comment upon and/or prepare drafts of documents to be filed with the Court as Delaware counsel to the Committee; (c) appear in Court and at any meeting with the U.S. Trustee and any meeting of creditors at any given time on behalf of the Committee as its Delaware counsel; (d) perform various services in connection with the administration of these cases including, without limitation, (i) preparing certificates of no objection, certifications of counsel, notices of fee applications and hearings, and hearing binders of documents and pleadings, (ii) monitoring the docket for filings and coordinating with Brown Rudnick on pending matters that need responses, (iii) preparing and maintaining critical dates memoranda to monitor pending applications, motions, hearing dates and other matters and the deadlines associated with the same, and (iv) handling inquiries and calls from creditors and counsel to interested parties regarding pending matters and the general status of these cases and coordinating with Brown Rudnick on any necessary responses; and (e) perform all other services assigned by the Committee, in consultation with Brown Rudnick, to RLG as Delaware counsel to the Committee. Rosner Law will be paid at these hourly rates: Frederick B. Rosner $275 Scott Leonhardt $275 Julia Klein $275 Frederick Sassier (paralegal) $150 Law Clerk $75 Rosner Law will also be reimbursed for reasonable out-of-pocket expenses incurred. Frederick B. Rosner, member of Rosner Law, 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. Consistent with the United State Trustees' Appendix B - Guidelines for U.S.C. section 330 by Attorneys in Larger Chapter 11 Cases (the "U.S. Trustee Guidelines"), effective Nov. 1, 2013, Rosner Law stated: -- Except for discounting its rates, Rosner Law has not agreed to a variation of its standard of customary billing arrangements for the Engagement; -- None of Rosner Law's professionals included in the Engagement have varied their rate based on the geographic location of these Chapter 11 Cases; -- The Committee has approved a prospective budget and staffing plan for Rosner Law's Engagement for the post-petition period as appropriate. In accordance with the U.S. Trustee Guidelines, the budget may be amended as necessary to reflect changed or unanticipated developments in these Chapter 11 Cases. Rosner Law can be reached at: Frederick B. Rosner, Esq. THE ROSNER LAW GROUP LLC 824 Market Street, Suite 810 Wilmington, DE 19801 Tel: (302) 777-1111 E-mail: rosner@teamrosner.com About Corinthian Colleges Corinthian Colleges, Inc., Pegasus Education, Inc., and 23 affiliated entities filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly wind down of its operations. The cases are jointly administered Case No. 15-10952. Judge Kevin J. Carey presides over the case. Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts; FTI Consulting, Inc., serves as restructuring advisors; and Rust Consulting/Omni Bankruptcy serves as claims and noticing agent. Corinthian Colleges, Inc., disclosed $721,596,789 in assets and $2,929,448,278 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. CORINTHIAN COLLEGES: Hires PricewaterhouseCoopers as Tax Advisor ---------------------------------------------------------------- Corinthian Colleges, Inc. and its debtor-affiliates seek authorization from the U.S. Bankruptcy Court for the District of Delaware to assume employment agreements with PricewaterhouseCoopers, LLP and employ the firm as tax advisor, nunc pro tunc to the May 4, 2015 petition date. The Debtors seek to retain PwC, pursuant to section 327(a) of the Bankruptcy Code, to continue providing the Sales/Use Tax Refund Services, the Income Tax Refund Services and the CA FTB Audit Support Services on a post-petition basis. PwC will provide advice and assistance with respect to matters relating to the California Franchise Tax Board's ("FTB") examination of your California corporate income tax returns for fiscal years ending June 30, 2009 through June 30, 2012. All services unrelated to the incremental increase of the California Enterprise Zone Hiring Credit are not included in the scope as previously defined in the Engagement Letter dated March 7, 2014 and are considered out of scope services to be covered under this agreement. The following illustrates the nature of the services intended to be covered by this agreement: -- review of the appropriate income tax return(s) and other support documentation; -- review of all audit materials and communication issued by the FTB; -- development of the audit defense strategies; -- direct communications with the FTB audit as appropriate and needed; Under the terms of the Engagement Agreement, PwC's compensation for the Sales/Use Tax Refund Services and the Income Tax Refund Services is based on a contingency fee arrangement. Indeed, PwC is entitled to 25% of any refund or credit received by the Debtors PwC's current hourly rates for matters related to these chapter 11 cases are expected to be within the following ranges: Partners $719 Director $488 Manager $389 Senior Associates $289 Associates and other staff $158-$215 The principal professionals designated to assist the Debtors and their current positions within the organization are as follows: Chris Whitney Partner George Yashou Director Nicole Rayhan Senior Associate PwC will also be reimbursed for reasonable out-of-pocket expenses incurred. Chris Whitney, partner of PwC, 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. PwC can be reached at: Chris Whitney PRICEWATERHOUSECOOPERS, LLP 601 S. Figueroa Street Los Angeles CA 90017 Tel: (213) 356-6007 Fax: (813) 741-5167 E-mail: chris.whitney@us.pwc.com About Corinthian Colleges Corinthian Colleges, Inc., Pegasus Education, Inc., and 23 affiliated entities filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly wind down of its operations. The cases are jointly administered Case No. 15-10952. Judge Kevin J. Carey presides over the case. Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts; FTI Consulting, Inc., serves as restructuring advisors; and Rust Consulting/Omni Bankruptcy serves as claims and noticing agent. Corinthian Colleges, Inc., disclosed $721,596,789 in assets and $2,929,448,278 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. CORINTHIAN COLLEGES: Panel Hires Brown Rudnick as Co-counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Corinthian Colleges, Inc., et al., asks for permission from the U.S. Bankruptcy Court for the District of Delaware to retain Brown Rudnick LLP as co-counsel, nunc pro tunc to May 13, 2015. The Committee requires Brown Rudnick to: (a) assist and advise the Committee in its discussions with the Debtors and other parties in interest regarding the overall administration of these cases; (b) represent the Committee at hearings to be held before this Court and communicating with the Committee regarding the matters heard and the issues raised as well as the decisions and considerations of this Court; (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; (d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with the Court by interested parties in these cases; advise the Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consenting or objecting to pleadings or orders on behalf of the Committee, as appropriate; (e) assist the Committee in preparing such applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Committee, including all trial preparation as may be necessary; (f) confer with the professionals retained by the Debtors and other parties in interests, as well as with such other professionals as may be selected and employed by the Committee; (g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as such information as may be received from professionals engaged by the Committee or other parties-in- interest in these cases; (h) participate in such examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors' assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates; (i) negotiate and formulate a plan of reorganization for the Debtors; and (j) assist the Committee generally in performing such other services as may be desirable or required for the discharge of the Committee's duties pursuant to section 1103 of the Bankruptcy Code. Brown Rudnick will be paid at these hourly rates: H. Jeffrey Schwartz $1,235 Bennett S. Silverbag $885 Lauren Curry $730 Jacob T. Beiswenger $570 Attorneys $415-$1,240 Paraprofessionals $285-$345 Brown Rudnick will also be reimbursed for reasonable out-of-pocket expenses incurred. H. Jeffrey Schwartz, member of Brown Rudnick, 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. Brown Rudnick can be reached at: H. Jeffrey Schwartz, Esq. BROWN RUDNICK LLP Seven Times Square New York, NY 10036 Tel: (212) 209-4800 E-mail: jschwartz@brownrudnick.com About Corinthian Colleges Corinthian Colleges, Inc., Pegasus Education, Inc., and 23 affiliated entities filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly wind down of its operations. The cases are jointly administered Case No. 15-10952. Judge Kevin J. Carey presides over the case. Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts; FTI Consulting, Inc., serves as restructuring advisors; and Rust Consulting/Omni Bankruptcy serves as claims and noticing agent. Corinthian Colleges, Inc., disclosed $721,596,789 in assets and $2,929,448,278 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. CORINTHIAN COLLEGES: Panel Taps Gavin/Solmonese as Advisor ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Corinthian Colleges, Inc., et al., asks for permission from the U.S. Bankruptcy Court for the District of Delaware to retain Gavin/Solmonese LLC as financial advisor to the Committee, nunc pro tunc to May 13, 2015. The Committee requires Gavin/Solmonese to: (a) review and analyze the businesses, management, operations, properties, financial condition and prospects of the Debtors; (b) review and analyze historical financial performance, and transactions between and among the Debtors, their creditors, affiliates and other entities; (c) review the assumptions underlying the business plans and cash flow projections for the assets involved in any potential asset sale or plan of reorganization; (d) determine the reasonableness of the projected performance of the Debtors, both historically and future; (e) monitor, evaluate and report to the Committee with respect to the Debtors' near-term liquidity needs, material operational changes and related financial and operational issues; (f) review and analyze all material contracts and/or agreements; (g) assist in the procurement of and assembling any necessary validations of asset values; (h) provide ongoing assistance to the Committee and the Committee's legal counsel; (i) evaluate the Debtors' capital structure and making recommendations to the Committee with respect to the Debtors' efforts to reorganize their business operations and/or confirm a restructuring or liquidating plan; (j) assist the Committee in preparing documentation required in connection with creating, supporting or opposing a plan and participating in negotiations on behalf of the Committee with the Debtors or any groups affected by a plan; (k) assist the Committee in marketing the Debtors' assets with the intent of maximizing the value received for any such assets from any such sale; (1) provide ongoing analysis of the Debtors' financial condition, business plans, capital spending budgets, operating forecasts, management and the prospects for their future performance; and (m) such other tasks as the Committee or its counsel may reasonably request in the course of exercise of the Committee's duties in these cases. Gavin/Solmonese will be paid at these hourly rates: Edward T. Gavin $625 Wayne P. Weitz $525 Kathryn McGlynn $400 Charles F. Lewis $295 Professionals $250-$650 Gavin/Solmonese will also be reimbursed for reasonable out-of-pocket expenses incurred. Wayne P. Weitz, managing director of Gavin/Solmonese, 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. Gavin/Solmonese can be reached at: Wayne P. Weitz GAVIN/SOLMONESE LLC 919 N. Market Street, Suite 600 Wilmington, DE 19801 Tel: (302) 655-8997 ext. 152 E-mail: wayne.weitz@gavinsolmonese.com About Corinthian Colleges Corinthian Colleges, Inc., Pegasus Education, Inc., and 23 affiliated entities filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly wind down of its operations. The cases are jointly administered Case No. 15-10952. Judge Kevin J. Carey presides over the case. Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts; FTI Consulting, Inc., serves as restructuring advisors; and Rust Consulting/Omni Bankruptcy serves as claims and noticing agent. Corinthian Colleges, Inc., disclosed $721,596,789 in assets and $2,929,448,278 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. CROWN CASTLE: Fitch Raises Issuer Default Rating From 'BB' ---------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Ratings of Crown Castle International Corp. and its subsidiaries to 'BBB-' from 'BB'. In addition, Fitch has upgraded the long-term debt ratings of Crown and its subsidiaries. The Outlook is Stable, resolving the previous Positive Outlook. KEY RATING DRIVERS Crown's ratings reflect the strong recurring cash flows generated from its leasing operations, the robust EBITDA margins and the scale of its tower portfolio. A focus on the U.S. market reduces operating risk. These factors lend considerable stability to cash flows and lead to a lower business risk profile than most typical corporate credits. Delevering Progress: Crown has made progress on delevering following two major acquisitions of towers, or rights to towers, since the end of 2012. These transactions include the $2.5 billion T-Mobile transaction in 2012, which was largely debt financed, and the $4.8 billion AT&T Inc. transaction in 2013, which was primarily financed with equity. Fitch expects Crown's 2016 gross leverage to reach 5.2x on a run-rate basis at the end of the year, which is within Fitch's expectations for leverage for a 'BBB-' rating for a tower company with Crown's business and financial risk profile. Higher Distributions: In December 2014, Crown began paying out a higher proportion of cash flow to its shareholders as it increased its distribution to $3.28 per share, or approximately $1.1 billion annually, from $1.40 per share, or approximately $470 million annually. The payout represents an acceleration of the level of payout relative to previous expectations, but slows future distribution growth. In addition, the change reduces the rate at which net operating loss carryforwards are used to manage required real estate investment trust (REIT) distributions. Portfolio Expansion: In December 2013, Crown acquired exclusive rights to lease and operate towers from AT&T, Inc. for $4.83 billion. The rights are for a weighted average lease term of approximately 28 years, and Crown has the option to purchase the towers at the end of the respective lease term for aggregate payments of approximately $4.2 billion. The leased towers, plus a small number acquired outright, comprise approximately 24% of Crown's domestic towers. Equity Financing: Approximately $3.95 billion of the AT&T transaction was funded by proceeds from October 2013 common and preferred equity offerings, with the remainder funded by cash on hand and revolver borrowings (later partly repaid by incremental term loans totalling $700 million). Wireless Broadband Growth: A key factor in future revenue and cash flow growth for Crown and its industry peers is the growth in wireless network capacity needed to meet demand for mobile broadband services. Growth in 4G data services will drive amendment activity and new lease-up revenues from the major operators, leading to at least mid-single-digit growth prospects for the next couple of years. Crown has also deployed distributed antenna systems, which should allow it to capture additional share in the small-cell infrastructure required for scaling 4G networks. Sunesys Acquisition: Crown will acquire Sunesys (a wholly owned subsidiary of Quanta Services, Inc.), a fiber services provider that owns or has rights to nearly 10,000 miles of fiber in major metropolitan areas, for $1 billion in a transaction expected to close by the end of the year. Strategically, the acquisition complements Crown's rapidly growing small-cell network business, which Fitch believes is a positive. Crown will fund the transaction in a leverage-neutral manner through the sale of its Australian subsidiary. Australian Subsidiary: Crown Castle sold its 77.6% interest in its Australian subsidiary (CCAL) in May 2015 to a consortium of investors led by Macquarie Infrastructure and Real Assets for approximately $1.6 billion. After accounting for its ownership interest, the repayment of intercompany debt and transaction costs, Crown realized about $1.3 billion in net proceeds and disclosed that the primary use of cash would be to finance the Sunesys transaction. The sale was prompted by the receipt of unsolicited offers. CCAL was expected to contribute approximately $100 million to 2015 adjusted EBITDA. Maturity Profile: Crown's maturity profile is manageable, with legal maturities for 2015 of $83 million and 2016 of $125 million, respectively. In May 2015, the company issued $1 billion of securitized tower revenue notes and used part of the proceeds for anticipated repayments of previously issued $250 million of tower revenue notes. The remainder was used for the repayment of other debt. REIT Conversion: Crown converted to a REIT for tax purposes on Jan. 1, 2014. The company was not required to make an accumulated earnings and profits distribution in order to convert to a REIT. The company's total cash distribution in 2015 will approximate $1.1 billion. Fitch believes the company will have flexibility to manage its leverage as a REIT on a business as usual basis, since the contractual revenues with escalators provide for natural delevering over time. KEY ASSUMPTIONS -- Fitch assumes organic site rental revenue growth will be in the low single digits (on a GAAP basis) in 2015, with potential improvements resulting from lower churn in the future. Over the next two to three years, EBITDA margins will remain relatively stable in the mid- to high-50% range. -- Fitch anticipates moderate deleveraging will produce gross debt/EBITDA (last 12-months EBITDA) in the range of 5.2x to 5.4x (as calculated by Fitch) at the end of 2016. RATING SENSITIVITIES Positive Rating Action: An upgrade is not likely within a rating horizon extending to the end of 2016. Negative Rating Action: Developments potentially leading to a negative rating action include an increase in leverage above 5.5x for a protracted period of time due to an acquisition funded mostly by debt, or a change in financial policy targeting higher leverage. LIQUIDITY Strong Liquidity: Crown has meaningful cash generation, balance sheet cash, revolving credit facility availability and a favorable maturity schedule relative to available liquidity. Cash, excluding restricted cash, was $240 million as of March 31, 2015. For the LTM ended March 31, 2015, FCF was approximately $98 million. Capital expenditures were $842 million on capital expenditures during this period, of which approximately $90 million were sustaining capital expenditures, with the balance discretionary in nature. CCOC had drawn $860 million on its $2.23 billion senior secured RCF as of March 31, 2014. The RCF matures in November 2018. The financial covenants within the credit agreement include a total net leverage ratio of 5.5x, and consolidated interest coverage of 2.5x. Debt Maturities: Crown's maturity profile is manageable, with no significant legal maturities for 2015 or 2016. In 2015, anticipated repayments for securitized debt are expected under the terms of $250 million of tower revenue notes and WCP securitized notes with a current face value of $259 million. FULL LIST OF RATING ACTIONS Crown Castle International Corp. (CCIC) -- IDR upgraded to 'BBB-' from 'BB'; -- Senior unsecured debt upgraded to 'BBB-' from 'BB-/RR5'. Crown Castle Operating Company (CCOC) -- IDR upgraded to 'BBB-' from 'BB'; -- Senior secured credit facility upgraded to 'BBB' from 'BB+/RR2'. CC Holdings GS V LLC (GS V) -- IDR upgraded to 'BBB' from 'BB'; -- Senior secured notes upgraded to 'BBB' from 'BBB-/RR1'. The Rating Outlook has been revised to Stable from Positive. CROWN MEDIA: S&P Raises CCR to 'BB-', Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Crown Media Holdings Inc. to 'BB-' from 'B+'. The rating outlook is stable. At the same time, S&P assigned its 'BB+' issue-level rating and '1' recovery rating to the company's senior secured credit facility. The credit facility consists of a $100 million revolving credit facility and a $325 million term loan A, both maturing in June 2020. The '1' recovery rating indicates S&P's expectations for very high recovery (90%-100%) of principal in the event of a payment default. The company used $80 million of proceeds to pay off the existing term loan due 2018 ($98.3 million outstanding) on June 25, 2015. S&P has withdrawn its ratings on the term loan and revolver. The company plans to use the remaining proceeds to redeem the 10.5% senior notes due 2019 ($271.5 million outstanding as of March 31, 2015). S&P will withdraw its ratings on the 2019 notes when that transaction closes. "The upgrade reflects Crown Media's improved financial risk profile," said Standard & Poor's credit analyst Naveen Sarma. "Over the past three years, the company's adjusted leverage improved to 1.9x, pro forma for the refinancing, from above 4x." S&P expects the company to maintain adjusted leverage below the mid-2x area. The upgrade also incorporates the potential for the company to modestly raise leverage to pay a special dividend to shareholders. The stable rating outlook reflects S&P's expectation that Crown Media's leverage will remain below the mid-2x area. S&P believes a downgrade is more likely during the next two to three years. S&P could lower the rating on the company over the next two to three years if its revenue and EBITDA growth flatten or falls. This could result from unfavorable pricing terms with distributors, a decrease in its total subscriber base, or a decline in advertising revenue. Additionally, S&P could lower the rating if the company's financial policy becomes more aggressive, such that adjusted leverage increases above 3x with no prospect of declining. Although unlikely, S&P would consider raising the rating over the next two to three years if Crown Media improves its business risk profile. S&P would need to be convinced that the company has a "must-have" competitive position in a "skinny" TV bundle. This could include broadening its business portfolio and strengthening the position of its cable networks, including subscriber penetration, audience ratings (particularly outside of the holiday season), and affiliate fees. Increased transparency, which indicates minimal risk associated with shareholder return and acquisition strategies, could also increase the potential for an upgrade. CTI BIOPHARMA: Estimates $9.8M Net Financial Standing at May 31 --------------------------------------------------------------- CTI BioPharma Corp. provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Italian Legislative Decree no. 58/98, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's financial situation. CTI BioPharma Corp. estimated net financial standing of $9.8 million as of May 31, 2015. The total estimated and unaudited net financial standing of CTI Consolidated Group as of May 31, 2015, was $10.4 million. CTI Parent Company trade payables outstanding for greater than 30 days were approximately $8.2 million as of May 31, 2015. CTI Consolidated Group trade payables outstanding for greater than 30 days were approximately $10.9 million as of May 31, 2015. During May 2015, there were solicitations for payment only within the ordinary course of business and there were no injunctions or suspensions of supply relationships that affected the course of normal business. A full-text copy of the press release is available at: http://is.gd/kP66ZB About CTI BioPharma CTI BioPharma Corp. (NASDAQ and MTA: CTIC) -- http://www.ctibiopharma.com/-- formerly known as Cell Therapeutics, Inc., is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies covering a spectrum of blood-related cancers that offer a unique benefit to patients and healthcare providers. The Company has a commercial presence in Europe and a late-stage development pipeline, including pacritinib, CTI's lead product candidate that is currently being studied in a Phase 3 program for the treatment of patients with myelofibrosis. CTI BioPharma is headquartered in Seattle, Washington, with offices in London and Milan under the name CTI Life Sciences Limited. CTI Biopharma reported a net loss attributable to common shareholders of $96 million in 2014, compared with a net loss attributable to common shareholders of $49.6 million in 2013. As of March 31, 2015, the Company had $63.1 million in total assets, $48.7 million in total liabilities, $240,000 in common stock purchase warrants, $14.1 million in total shareholders' equity. DORAL FINANCIAL: Seeks More Time to Control Bankruptcy Case ----------------------------------------------------------- Joseph Checkler, writing for The Wall Street Journal, reported that the bankrupt parent of Puerto Rico's failed Doral Bank wants three more months to control its chapter 11 case without the threat of rival proposals as it looks to sell off more assets. According to the Journal, in a June 29 filing with U.S. Bankruptcy Court in Manhattan, Doral Financial Corp. said that while it has "achieved a number of important tasks" in its Chapter 11 case so far, including selling its insurance unit, it needs until Oct. 7 to file a viable reorganization plan and until Jan. 5, 2016, to solicit votes on that plan. Without the approval of Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan, those periods would expire after July 9 and Sept. 7, respectively, the Journal noted. About Doral Financial Doral Financial Corporation is a holding company whose primary operating asset was equity in Doral Bank. DFC maintains offices in New York City, Coral Gables, Florida and San Juan, Puerto Rico. DFC has three wholly-owned subsidiaries: (i) Doral Properties, Inc., (ii) Doral Insurance Agency, LLC ("Doral Insurance"), and (iii) Doral Recovery, Inc. On Feb. 27, 2015, regulators placed Doral Bank into receivership and named the Federal Deposit Insurance Corp. as receiver. Doral Bank served customers through 26 branches located in New York, Florida, and Puerto Rico. DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10573) in Manhattan on March 11, 2015. The case is assigned to Judge Shelley C. Chapman. DFC estimated $50 million to $100 million in assets and $100 million to $500 million in debt as of the bankruptcy filing. The Debtor tapped Ropes & Gray LLP as counsel. The Debtor's Chapter 11 plan and Disclosure Statement are due July 9, 2015. The initial case conference is set for April 10, 2015. The U.S. trustee overseeing the Chapter 11 case of Doral Financial Corp. appointed five creditors of the company to serve on the official committee of unsecured creditors. EFT HOLDINGS: Delays Fiscal 2015 Annual Report ---------------------------------------------- EFT Holdings, Inc., filed with the U.S. Securities and Exchange Commission a Notification of Late Filing on Form 12b-25 with respect to its annual report on Form 10-K for the period ended March 31, 2015. The Company said the compilation, dissemination and review of the information required to be presented in the Annual Report on the Form 10-K for the relevant period has imposed time constraints that have rendered timely filing of the Form 10-K impracticable without undue hardship and expense. The Company undertakes the responsibility to file that report no later than the 15th day after its original prescribed due date. About EFT Holding EFT Holdings, Inc., is an Industry, California-based company whose products are sold directly to customers through its Web site. The Company sells 27 nutritional products, consisting of oral sprays, personal care products, a house cleaner, and a portable drinking container. For the nine months ended Dec. 31, 2014, the Company reported a net loss of $4.36 million on $800,040 of net total revenues compared to a net loss of $12.1 million on $1.58 million of net total revenues for the same period during the prior year. As of Dec. 31, 2014, the Company had $8.21 million in total assets, $14.7 million in total liabilities, and a $6.52 million total deficiency. "The Company has negative working capital of $7.82 million and an accumulated deficit of $59.3 million as of Dec. 31, 2014 and has reported net losses for the past two fiscal years. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital from external sources such as bank borrowings or capital issuances in order to continue the long-term efforts contemplated under its current business plan. Management is also considering different marketing strategies to generate more revenues and plans to continue to reduce certain operating expenses going forward. In addition, the Company is seeking to recover $21 million through the U.S. federal courts, but there can be no assurance that it will be successful in doing so. These circumstances, among others, raise substantial doubt about the Company's ability to continue as a going concern," according to the 10-Q report for the quarter ended Dec. 31, 2014. EMPIRE LATH: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Empire Lath & Plaster, Inc. fdba Empire Lathing & Plastering Co P.O. BOX 21346 Billings, MT 59104 Case No.: 15-60603 Chapter 11 Petition Date: July 1, 2015 Court: United States Bankruptcy Court District of Montana (Butte) Judge: Hon. Ralph B. Kirscher Debtor's Counsel: James A Patten, Esq. PATTEN PETERMAN BEKKEDAHL & GREEN Ste 300, The Fratt Bldg 2817 2nd Ave N Billings, MT 59101 Tel: (406) 252-8500 Fax: (406) 294-9500 Email: japatten@ppbglaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Sandra L. Tilzey, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mtb15-60603.pdf FILTRATION GROUP: Moody's Affirms 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed Filtration Group Corporation's B2 Corporate Family Rating (CFR) and B2-PD Probability of Default rating following the company's announced acquisitions of Purafil, Inc. and Kaydon Custom Filtration for approximately $90 million, to be funded with an add-on to its existing first-lien term loan. Moody's also downgraded the rating of the company's first-lien credit facility -- term loan and revolving credit facility -- from B1 to B2. The credit facility downgrade reflects a shift in the proportional mix of the company's debt structure with first-lien secured debt increasing due to the acquisition funding and junior debt declining due to scheduled maturities of subordinated notes (not rated). Moody's affirmed the Caa1 rating on the company's second-lien term loan. The rating outlook is stable. Ratings affirmed: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Second lien term loan at Caa1 (LGD rating changed to LGD6 from LGD5) Ratings changed: First lien revolving facility to B2 (LGD3) from B1 (LGD3) First lien term loan to B2 (LGD3) from B1 (LGD3) RATINGS RATIONALE The B2 Corporate Family Rating reflects Filtration Group's elevated leverage (Moody's forecasts year-end 2015 adjusted debt-to-EBITDA at approximately 6.5x) after giving pro forma effect for both the Purafil and Kaydon acquisitions and the scheduled maturities of outstanding seller notes in the second half of 2015. The B2 rating also considers the company's modest scale and the potential for larger competitors to enter its niche markets. The company has pursued a fairly aggressive acquisition strategy, completing more than 10 acquisitions since 2010. Ratings are supported by the company's broad collection of brands that command leading market positions in their niche sectors and products that serve a diverse range of industries and filtration applications. The revenue base is well diversified geographically with over 40% of sales generated outside the US. The estimated 80%+ of revenues considered replacement demand or recurring results in a resilient operating model that enabled the company to perform relatively well during the last recession. The addition of Purafil's highly technical and customizable air filtration business fits well into Filtration Group's overall portfolio of niche and proprietary products and services. The smaller Kaydon modestly extends the company's offering of fluid filters and builds its presence with power generation customers. The ratings could be upgraded if the company exhibits stronger than expected organic top-line growth in conjunction with periodic, quickly accretive acquisitions. Better than expected margin expansion and significantly stronger free cash flow that translates into accelerated debt repayment such that debt-to-EBITDA approaching 4x and funds from operations-to-debt near 15%, on a sustained basis, could lead to upward rating pressure. The ratings could be downgraded if there is a material decline in revenues potentially driven by increased competition from larger competitors, substantially weaker free cash flow or a deterioration in liquidity. Downward rating pressure could result from debt-to-EBITDA remaining at or above 6.5x, free cash flow-to-debt below 5% by the end of 2015 or if EBITDA margins fell to the low-teens percent. Filtration Group Corporation is a diverse filtration company with manufacturing and marketing operations on five continents, excluding South America. The company is an affiliate of Madison Industries. Revenues for the twelve months ending March 31, 2015 were $759 million. FILTRATION GROUP: S&P Affirms 'B' Rating on 1st Lien Loans ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' issue-level rating on Filtration Group Corp.'s first-lien senior secured credit facility, which consists of a $75 million revolving credit facility due 2018 and a proposed $93 million incremental term loan resulting in a nearly $840 million first-lien term loan due 2020. The recovery rating remains '3', indicating S&P's expectation of meaningful (50% to 70%; lower half of the range) recovery in the event of a payment default. In addition, S&P affirmed its 'B-' issue-level rating on the company's second-lien credit facility due 2021. The recovery rating on this debt remains '5', indicating S&P's expectation of modest (10% to 30%; lower half of the range) recovery in the event of a payment default. The 'B' corporate credit rating and stable outlook on Chicago-based Filtration Group Corp. are unaffected. The company will use the proceeds to repay drawings under its revolver and a bridge loan provided by an affiliate of Madison Industries to acquire Purafil, a global provider of gas phase air filtration systems and engineered solutions, and Kaydon Custom Filtration, a provider of fluid filtration solutions including coalescing, fuel, lube and oil filtration systems. RATINGS LIST Filtration Group Corp. Corporate credit rating B/Stable/-- Issue-Level Rating Affirmed; Recovery Rating Unchanged Filtration Group Corp. First-lien term loan due 2020 B Recovery rating 3L Second-lien credit facility due 2021 B- Recovery rating 5L FINANCIAL HOLDINGS: Wilmington Trust Objects to Quick Sale ---------------------------------------------------------- Wilmington Trust Company objects to the proposed quick sale of all or substantially all of the assets of Financial Holdings, Inc., complaining that the proposed timeline leaves minimal time for input, investigation, and objection by creditors and other stakeholders. Wilmington argues that if granted, the Motion, which proposes a sale hearing on or before July 31, will propel the bankruptcy case down an irreversible course and will restrict the Debtor to a sale process that allows insufficient time for obtaining higher and better bids and thereby precludes any hope of a return to unsecured creditors. Accordingly, Wilmington asks the U.S. Bankruptcy Court for the Eastern District of Kentucky, Lexington Division, to deny the bidding procedures motion unless the Sale Schedule and the Bidding Procedures are extended. Wilmington is represented by: Todd C. Meyers, Esq. KILPATRICK TOWNSEND & STOCKTON LLP 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 Tel: (404) 815-6500 Fax: (404) 815-6555 Email: tmeyers@kilpatricktownsend.com -- and -- Shane G. Ramsey, Esq. KILPATRICK TOWNSEND & STOCKTON LLP 1114 Avenue of the Americas New York, NY 10036-7703 Tel: (212) 775-8767 Fax: (212) 775-8704 Email: sramsey@kilpatricktownsend.com -- and -- Laura Day DelCotto, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper Street Lexington, KY 40507 Tel: (859) 231-5800 Fax: (859) 281-1179 Email: ldelcotto@dlgfirm.com About Financial Holdings Financial Holdings, Inc., is a bank holding company, organized under the laws of the Commonwealth of Kentucky, that owns 100% of the common stock of two subsidiaries: (i) American Founders Bank, Inc. and (ii) American Founders Statutory Trust I. The Bank, in turn, owns 100% of the voting common stock of American Founders Loan Corporation. Financial Holdings sought Chapter 11 protection (Bankr. E.D. Ky. Case No. 15-51187) on June 16, 2015, in Lexington, Kentucky. The Bank, Statutory Trust, and AFLC, are not debtors in the Chapter 11 case. The Debtor disclosed total assets of $11.9 million and total liabilities of $40.6 million. The case is assigned to Judge Gregory R. Schaaf. The Debtor tapped Stoll Keenon Ogden, PLLC, as counsel, and Austin Associates, LLC, as financial advisors. Counsel to the proposed purchaser, WPB-AFB, LLC, are Michael G. Dailey, Esq., Uday Gorrepati, Esq., and Susan Zaunbrecher, Esq., at Dinsmore & Shohl, LLP, in Cincinnati, Ohio. FREESEAS INC: Cambria Capital Reports 6.6% Stake as of May 31 ------------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, Cambria Capital, LLC disclosed that as of June 24, 2015, it beneficially owned 102,000 shares of common stock of Freeseas Inc., which represents 6.6 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/bZYzfK About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas reported a net loss of $12.7 million in 2014, a net loss of $48.7 million in 2013 and a net loss of $30.9 million in 2012. As of Dec. 31, 2014, the Company had $64.25 million in total assets, $39.2 million in total liabilities and $25 million total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. Also, the Company has disclosed alternative methods of testing the carrying value of its vessels for purposes of testing for impairment during the year ended December 31, 2014. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. FTI CONSULTING: Possible Notes Refinancing No Impact on Moody's CFR ------------------------------------------------------------------- Moody's Investors Service said that if FTI Consulting, Inc.'s Ba2 Corporate Family Rating and its Ba2-PD Probability of Default Rating will not be affected by the potential refinancing of senior unsecured notes using the proceeds of the new senior secured revolving credit facility and cash on hand. The company announced that it has entered into a new credit agreement which provides for a new 5-year, $550 million revolving line of credit and replaces its existing $350 million revolving credit facility. There were no borrowings outstanding under the existing revolving credit facility. The company said it could redeem its $400 million of 6.75% senior unsecured notes due 2020, on or before October 1, 2015, subject to approval by its Board of Directors, market conditions and other factors. Moody's does not rate FTI's existing revolving credit facility. At the same time, if a substantial portion of FTI's senior unsecured notes is refinanced with borrowings under the senior secured credit facility as currently contemplated, Moody's expects to lower the Ba2 rating for FTI's senior unsecured notes, in accordance with Moody's Loss Given Default Methodology. FTI CONSULTING: S&P Revises Outlook to Positive & Affirms 'BB' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its rating outlook on Baltimore-based consulting firm FTI Consulting Inc. to positive from stable. At the same time, S&P affirmed its 'BB' corporate credit rating on the company. S&P also revised its recovery rating on FTI Consulting's senior unsecured notes to '3' from '4' and affirmed the 'BB' issue-level rating on the debt. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; low end of the range) of principal in the event of a default. "The positive rating outlook is based on FTI Consulting's more conservative financial policy," said Standard & Poor's credit analyst Andy Liu. Historically, the company has been fairly aggressive in pursuing acquisitions, several of which led to EBITDA declines due to cash restructuring charges and debt leverage exceeding 3x. The management team has moved to significantly curtail acquisitions and plans to reduce total debt outstanding. FTI Consulting is amending and extending its revolving credit facility to $550 million from $350 million, and extending the maturity date to 2020 from 2017. The company plans to partially draw on its amended and extended revolving credit facility and cash on hand to call its $400 million 6.75% notes due 2020. As a result, S&P expects that adjusted debt leverage will likely decline to around 2.5x by the end of 2015 from about 2.7x as of March 31, 2015. The positive rating outlook reflects the possibility of a rating upgrade over the next 12 months. The outlook revision is based on FTI Consulting's reduced debt leverage and move toward a more conservative financial policy. In the long term, S&P expects that the company's debt leverage will likely to around 2.5x or below. S&P would raise the rating on FTI Consulting one notch to 'BB+' if the company maintains positive top-line growth, demonstrates commitment to its more conservative financial policy well into 2016, and minimizes restructuring expenses while keeping debt leverage below 2.75x. S&P could revise the outlook to stable if the company's top-line performance deteriorates or if it resumes its aggressive acquisition policy, thereby pushing debt leverage to above 2.75x. A large and unexpected restructuring charge that reduces EBITDA could also lead S&P to revise the rating outlook to stable. GRADY COUNTY: S&P Puts 'BB+' Revenue Debt Rating on Watch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it placed its 'BB+' long-term rating on the Grady County Criminal Justice Authority, Okla.'s previously rated federally secured correction revenue debt on CreditWatch with negative implications. "This action follows our repeated attempts to obtain timely information of satisfactory quality to maintain our rating on the securities in accordance with our applicable criteria and policies," said Standard & Poor's credit analyst Edward McGlade. Failure to receive the requested information by July 14, 2015 will likely result in S&P's withdrawal of the affected rating, preceded, in accordance with its policies, by any change to the rating that S&P considers appropriate given available information. GRAHAM HOLDINGS: S&P Lowers CCR to 'BB+', Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Arlington, Va.-based Graham Holdings Co. to 'BB+' from 'BBB' and its short-term rating to 'B' from 'A-2'. S&P removed the ratings from CreditWatch, where it had placed them with negative implications on Nov. 18, 2014. The outlook is stable. At the same time, S&P lowered its issue-level rating on GHC's senior unsecured notes to 'BB+' from 'BBB'. S&P assigned a recovery rating of '3', indicating its expectation for meaningful (50%-70%; higher end of the range) recovery of principal for lenders in the event of a payment default. "The downgrade reflects our view that Graham's overall business risk profile is weaker following the spin-off its cable segment," said Standard & Poor's credit analyst Eric Nietsch. While the cable unit accounted for only 20%-25% of revenue, it contributed about 40%-50% of consolidated EBITDA. Although the spin-off transaction resulted in a payment of $450 million to GHC, S&P do not expect the company to use the proceeds for debt reduction. As such, pro forma leverage is around 1.6x. Moreover, S&P believes that the company will use its cash balance, which is about $1.3 billion on a pro forma basis, for acquisitions, rather than debt repayment. The stable outlook reflects S&P's expectation that the company will pursue strategic acquisitions to diversify its base of business or shareholder-friendly initiatives although S&P believes that leverage will remain below 2.5x and that it will continue to maintain a strong liquidity position. Although unlikely in the near term, S&P could lower the rating if the company experienced significant deterioration in operating and financial performance in the education segment or pursued a material debt-financed acquisition such that leverage rises above 2.5x. The potential for an upgrade would require a revision of S&P's business risk assessment to "fair," which would likely be based on an acquisition that improved GHC's overall business risk profile. This could include a diversifying acquisition that is deleveraging and improves consolidated EBITDA margins above 15%. GUIDED THERAPEUTICS: Announces $4 Million Private Placement ----------------------------------------------------------- Guided Therapeutics, Inc. announced that it has entered into a securities purchase agreement with certain accredited investors for the private placement of its convertible preferred stock and warrants to purchase shares of its common stock. Gross cash proceeds to the Company are expected to be approximately $4 million, prior to the payment of placement agent fees and expenses. In advance of the private placement, the Company negotiated various agreements with existing security holders to effectively eliminate certain price- and share-reset provisions in those securities, allowing the Company to complete the private placement without the additional dilution of its common stock that otherwise would occur upon trigger of those provisions. The Company also negotiated a 14-month extension of its secured promissory note. Net proceeds from the private placement are intended to be used to support manufacturing and marketing of the Guided Therapeutics LuViva Advanced Cervical Scan. The Company also intends to use a portion of the proceeds to repay its outstanding senior convertible note, in order to avoid further dilution of its common stock. Gene Cartwright, CEO of Guided Therapeutics, stated, "This significant restructuring of the Company's securities combined with the additional $4 million in cash from the private placement is a major milestone for the Company and will allow us to focus on filling the significant purchase orders that have been signed or are in the works." Pursuant to the purchase agreement, dated June 29, 2015, the Company has agreed to issue an aggregate of up to 6,737 shares of preferred stock, which are convertible by the holders at any time into an aggregate of up to approximately 70.9 million shares of common stock at a conversion price of $0.095 per share. Holders of the preferred stock will be entitled to quarterly cumulative dividends at an annual rate of 12.0%, beginning Oct. 1, 2015, and ending 42 months after the original issuance date, in each case payable in cash or common stock. The Company has further agreed to issue five-year warrants exercisable for an aggregate of approximately 106.4 million shares of common stock, at an exercise price of $0.095 per share. The private placement will be consummated in two closings, with the first expected to close on June 30, 2015, resulting in gross cash proceeds of approximately $2.5 million of the $4 million total. At the second closing, the Company expects to receive the remaining approximately $1.5 million in cash, and certain additional investors are expected to exchange their outstanding shares of the Company's Series B convertible preferred stock in lieu of a cash payment for their investment. Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc., acted as exclusive placement agent for this transaction. Additional information is available for free at: http://is.gd/yoSE9L About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. For the year ended Dec. 31, 2014, the Company reported a net loss attributable to common stockholders of $10.03 million on $65,000 of contract and grant revenue compared to a net loss attributable to common stockholders of $10.39 million on $820,000 of contract and grant revenue in 2013. As of March 31, 2015, the Company had $2.56 million in total assets, $7.57 million in total liabilities and $5.01 million total stockholders' deficit. INTEGRATED FREIGHT: Needs More Time to File Fiscal 2015 Form 10-K ----------------------------------------------------------------- Integrated Freight Corporation filed with the U.S. Securities and Exchange Commission a Notification of Late Filing on Form 12b-25 with respect to its annual report on Form 10-K for the period ended March 31, 2015. The Company said the compilation, dissemination and review of the information required to be presented in the Form 10-K could not be completed and filed without undue hardship and expense. The Company anticipates that it will file that report within the "grace" period provided by Securities Exchange Act Rule 12b-25. About Integrated Freight Integrated Freight Corporation, formerly PlanGraphics, Inc., (OTC BB: IFCR) -- http://www.integrated-freight.com/-- is a Sarasota, Florida headquartered motor freight company providing long-haul, regional and local service to its customers. The Company specializes in dry freight, refrigerated freight and haz-waste truckload services, operating primarily in well-established traffic lanes in the upper mid-West, Texas, California and the Atlantic seaboard. IFCR was formed for the purpose of acquiring and consolidating operating motor freight companies. Integrated Freight reported a net loss of $1.43 million on $20.2 million of revenue for the year ended March 31, 2014, compared with net income of $4.81 million on $20.1 million of revenue for the year ended March 31, 2013. As of Dec. 31, 2014, the Company had $4.30 million in total assets, $16.7 million in total liabilities, and a $12.4 million total stockholders' deficit. DKM Certified Public Accountants, in Clearwater, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014, citing that the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. JCBG INCORPORATED: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: JCBG Incorporated aka Coastline Restaurant aka Coastline Bar and Grill 1240 Brace Road Cherry Hill, NJ 08002 Case No.: 15-22426 Chapter 11 Petition Date: July 1, 2015 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Hon. Andrew B. Altenburg Jr. Debtor's Counsel: Dino S. Mantzas, Esq. LAW OFFICE OF DINO S. MANTZAS 10000 Lincoln Drive West, Suite 1 Marlton, NJ 08053 Tel: (856) 988-0033 Fax: (856) 988-9799 Email: dmantzas@aol.com Total Assets: $3.7 million Total Liabilities: $4.7 million The petition was signed by Dawn Mourtos, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb15-22426.pdf JW RESOURCES: Files for Chapter 11 to Conduct Open Auction ---------------------------------------------------------- JW Resources Inc., which acquired the thermal coal mining operations of Xinergy in eastern Kentucky for $47.2 million in 2013, has sought bankruptcy protection to pursue an open auction for the assets. Following the transaction with Xinergy in February 2013, there has been a decrease in the demand for coal and a dramatic increase in the cost of mining and processing coal, due in part to burdensome governmental regulations, with the spot price of coal per ton decreasing by 26% through April 2015. These factors have contributed to the Debtors' inability to service its secured debt and to sustain its business operations outside of the protections of the Chapter 11 cases. The Debtors have been unable to obtain needed additional funding from their existing secured lenders, equity holders or other third-parties. In order to maximize the value of the Debtors' assets for the benefit of all stakeholders, the Debtors retained Energy Ventures Analysis, Inc., as their investment bankers to pursue a sale of substantially all of the assets of the Debtors as part of the Chapter 11 cases. Accordingly, the Debtors are filing a motion seeking to sell substantially all of their assets through an open auction process under Section 363 of the Bankruptcy Code. First Day Motions The Debtors on the Petition Date filed motions to: -- jointly administer their Chapter 11 cases; -- maintain their existing cash management system; -- pay prepetition tax obligations; -- continue insurance coverage; -- renew their surety bond programs; -- prohibit utilities from discontinuing service; and -- pay prepetition wages and benefits. About JW Resources JW Resources Inc. and its subsidiaries are U.S. producers of thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of Kentucky. The business operations comprise what is known as the "Straight Creek" operations located in Bell, Leslie and Harlan Counties, Kentucky, and the "Red Bird" operations located in Bell, Leslie, Knox, and Clay Counties, Kentucky. JW Resources is the parent and sole shareholder of SCRB Properties, Inc., Straight Creek Coal Mining, Inc. and SCRB Processing, Inc. JW Resources and its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London, Kentucky on June 30, 2015. The Debtors tapped Frost Brown Todd LLC as counsel, and Energy Ventures Analysis, Inc., as sale advisor. JW Resources estimated $1 million to $10 million in assets and $50 million to $100 million in debt. Straight Creek estimated $10 million to $50 million in assets and $50 million to $100 million in debt. JW RESOURCES: Wants Motions Heard in Lexington Division ------------------------------------------------------- JW Resources Inc. and its affiliated debtors are asking the U.S. Bankruptcy Court for the Eastern District of Kentucky to enter an order (i) allowing the Debtors to notice the first day motions in the Chapter 11 cases to be heard in the Lexington Division as opposed to the London Division, and (ii) scheduling a final hearing to consider allowing all subsequent motions to be heard in the Lexington Division. The Debtors have sought to retain Frost Brown Todd LLC as their counsel in the Chapter 11 Cases. Frost Brown Todd LLC maintains an office in Lexington, Kentucky, which will allow the Debtors to maintain costs more efficiently if hearings are held in the Lexington Division. Furthermore, upon information and belief, many of the Debtors' creditors have or will retain counsel in Lexington, Kentucky. By holding all conferences and hearings in the Chapter 11 Cases, whether those on the first day motions or all subsequent motions and matters, in the Lexington Division, the Debtors believe that a majority of their creditors and other parties in interest, including, but not limited to, the United States Trustee, will be able to attend hearings in a more efficient and cost-effective manner. About JW Resources JW Resources Inc. and its subsidiaries are U.S. producers of thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of Kentucky. JW acquired the thermal coal mining operations of Xinergy in eastern Kentucky for $47.2 million in February 2013. JW's business operations comprise what is known as the "Straight Creek" operations located in Bell, Leslie and Harlan Counties, Kentucky, and the "Red Bird" operations located in Bell, Leslie, Knox, and Clay Counties, Kentucky. JW Resources is the parent and sole shareholder of SCRB Properties, Inc., Straight Creek Coal Mining, Inc. and SCRB Processing, Inc. JW Resources and its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. E.D. Ky. Lead Case No. 15-60831) in London, Kentucky on June 30, 2015. The Debtors tapped Frost Brown Todd LLC as counsel, and Energy Ventures Analysis, Inc., as sale advisor. JW Resources estimated $1 million to $10 million in assets and $50 million to $100 million in debt. Straight Creek estimated $10 million to $50 million in assets and $50 million to $100 million in debt. KAR AUCTION: S&P Raises CCR to 'BB-', Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on Indiana-based KAR Auction Services Inc. to 'BB-' from 'B+'. The outlook is stable. At the same time, S&P is raising its issue-level rating on KAR's senior secured term debt to 'BB' from 'BB-'. The '2' recovery rating indicates S&P's expectation for substantial recovery (70%-90%, at the high end of the range) in the event of a default. "KAR continues to show high levels of profitability and steady cash flow generation," said Standard & Poor's credit analyst Larry Orlowski. "Moreover, since a group of private equity sponsors sold their ownership stake in the company in late 2013, we have come to believe KAR's management depth is sufficient to execute its business strategy and that financial policy will balance the requirements of shareholders and creditors. As a result, we have revised our management and governance score to 'fair' from 'weak', thereby removing the negative one-notch impact on the corporate credit rating." KAR has an established position in the competitive whole-car and salvage auction markets, is somewhat resilient to economic weakness, and has strong EBITDA margins. The scope of the company's business activities remains concentrated in North America The stable rating outlook reflects S&P's opinion that KAR can generate earnings and free cash flow appropriate for the rating during the year ahead through its relatively consistent revenue base and tight financial controls. S&P also assumes KAR's competitive position will benefit from evolving dynamics in the physical and online whole-car and salvage auction markets, which will provide an opportunity for business expansion because the company has product offerings in both types of auctions. KATE SPADE: Moody's Raises Corporate Family Rating to 'Ba3' ----------------------------------------------------------- Moody's Investors Service upgraded Kate Spade & Company's Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD and senior secured term loan rating to Ba3 from B1. These actions conclude the review for upgrade initiated on June 16, 2015 upon the adoption of Moody's updated approach for standard adjustments for operating leases, which is explained in the cross-sector rating methodology Financial Statement Adjustments in the Analysis of Non-Financial Corporations, published on June 15, 2015. Moody's affirmed the company's SGL-1 Speculative Grade Liquidity rating. The rating outlook is stable. The upgrade reflects Kate Spade's approximately 1.2 times decline in lease-adjusted debt/EBITDA from 5.1 times to 3.9 times (as of April 4, 2015) due to changes in Moody's approach for capitalizing operating leases. Moody's expects that the company will be able to maintain solid credit metrics as it pursues its strategy to expand product categories and geographic presence, and repays debt over time. Moody's took the following rating actions on Kate Spade & Company: -- Corporate Family Rating, upgraded to Ba3 from B1 -- Probability of Default Rating, upgraded to Ba3-PD from B1-PD -- $400 million Senior Secured Term Loan due 2021, upgraded to Ba3 (LGD 3) from B1 (LGD 3) -- Speculative Grade Liquidity, affirmed at SGL-1 -- Stable outlook RATINGS RATIONALE Kate Spade's Ba3 Corporate Family Rating reflects the company's strong organic growth as a stand-alone brand, as well as credible opportunities for continued product and geographic expansion. Moody's expects Kate Spade's lease-adjusted debt/EBITDA to improve to the mid-3 times range and EBITA/interest expense to remain in the high-2 range times in the next 12-18 months. Moody's also has a positive view of the company's financial strategies, including a stated long-term target of debt reduction, and emphasis on investment in the business over acquisitions and capital return to shareholders. Kate Spade's very good liquidity profile, primarily driven by high cash balances derived from recent asset sales, and access to a substantially undrawn asset-based revolver, also supports the rating. These factors are mitigated by the high fashion risk and vulnerability to changes in consumer sentiment inherent in the luxury goods industry. Further, the company is essentially a mono-brand player that relies on the handbag and small leather goods category for the majority of its earnings. The stable rating outlook reflects Moody's expectation for continued near-term earnings growth, driven by mid- to high-single-digit revenue growth and margin expansion, and very good liquidity. The ratings could be upgraded if the company meaningfully expands its scale, sustains EBITDA margins and further broadens its product range and geographic presence, while maintaining a very good overall liquidity profile and conservative financial policies. Quantitatively, an upgrade would require debt/EBITDA sustained below 2.5 times and EBITA/interest expense above 3.5 times. The ratings could be downgraded if revenue growth stalls and operating margins decline, indicating the brand is losing resonance with its core customer. Quantitatively, the ratings could be downgraded if debt/EBITDA is sustained above 4.25 times or interest coverage is below 2.75 times. Headquartered in New York, NY, Kate Spade & Company is a designer and marketer of luxury handbags, accessories and other products. The company sells its products through specialty stores, premium department stores, outlets, concessions and websites in the US, Asia and Europe. Revenues for the twelve months ended April 4, 2015 were approximately $1.2 billion. KONSTAN REALTY: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Konstan Realty LLC 575-80th Street Brooklyn, NY 11201 Case No.: 15-43085 Chapter 11 Petition Date: July 1, 2015 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Scott R Schneider, Esq. LAW OFFICES OF SCOTT R SCHNEIDER 117 Broadway Hicksville, NY 11801 Tel: (516) 433-1555 Fax: (516) 433-1511 Email: scottsch@optonline.net Total Assets: $3.1 million Total Liabilities: $1.7 million The petition was signed by Irini Laskaratos, sole member. The Debtor listed NYC Water Board as its largest unsecured creditor holding a claim of $5,713. A copy of the petition is available for free at: http://bankrupt.com/misc/nyeb15-43085.pdf LAUREATE EDUCATION: Moody's Lowers Corporate Family Rating to 'B3' ------------------------------------------------------------------ Moody's Investors Service downgraded the Corporate Family Rating for Laureate Education, Inc. to B3 from B2 and its Probability of Default Rating to B3-PD from B2-PD. At the same time, Moody's lowered the ratings of Laureate's senior secured credit facilities to B3 from B2, as well as the company's senior notes due 2019, to Caa2 from Caa1, and assigned a B3 rating to the company's amended senior secured revolving credit facility due 2018. The rating outlook was changed to stable from negative. According to Moody's analyst David Berge, "Laureate's aggressive growth has created persistently-high leverage and has strained the company's liquidity." Downgrades: Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Bank Credit Facility Jun 16, 2018, Downgraded to B3 (LGD3) from B2 (LGD4) Senior Unsecured Regular Bond/Debenture Sep 1, 2019, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Assignments: Senior Secured Bank Credit Facility Mar 08, 2018, Assigned at B3 (LGD3) Outlook Actions: Outlook, Changed To Stable from Negative RATINGS RATIONALE The downgrade reflects implementation of Laureate's aggressive debt-financed growth plans that have increased the company's leverage to levels no longer supportive of a B2 rating, while weakening the company's liquidity profile due to increased reliance on its revolving credit facility. On June 30, 2015, the company announced that it had entered into an agreement with lenders to amend its revolving credit agreement, which would have terminated in June 2016, to extend the maturity to March 8, 2018. By extending the maturity, Laureate has been able to avert significant refinancing risk over the near term as nearly $300 million of the $350 million facility was drawn as of March 31, 2015. However, the amendment will increase the amount of debt maturing in 2018 (over $2 billion of term loan and revolver) that presents a sizeable refinancing challenge. Since March 31, 2014, Laureate has invested approximately $677 million in acquisitions and capital spending (gross, before proceeds from sale of assets) to support its growth plans, while total student enrollment has grown by nearly 20%. While enrollment growth is a positive, it has constrained the company's liquidity as evidenced by revolver borrowings that are well above recent historical averages with nearly $108 million in incremental borrowings year over year and average availability below 20% during the last four quarters. Laureate's total debt (including Moody's standard adjustments) now stands at approximately $5.9 billion as of March 31, 2015, and leverage, as measured by debt to EBITDA, is estimated at 6.3 times (including pro forma results for acquisitions) for the March 2015 LTM period. Other credit metrics are similarly more in line with a B3 rating: pro forma EBITA to interest is estimated at 1.1 times, while retained cash flow to debt is below 10%. The company has a history of generating earnings from growth investments to stabilize and modestly reduce leverage, but it will be a challenge to reduce leverage materially over the near term due to the scale of current growth plans and risks inherent in the company's wide range of operations internationally. Moreover, because of the company's global breadth, Laureate's earnings are subject to substantial foreign exchange exposure. However, the rating is supported by the company's prominent market position in the international for-profit, post-secondary education space, substantial diversity due to the broad geographic scope of service offerings worldwide, favorable industry fundamentals, and generally supportive educational policies in countries in which Laureate operates, which should support positive enrollment trends. In addition, because the company operates primarily outside of the US, it does not face the same regulatory pressures relating to Title IV funding that negatively affects many US-based for-profit education providers. Nonetheless, Moody's believes the company faces substantial political risk on campuses outside of the US, as any changes in policies promulgated by authorities overseeing post-secondary education could have a material impact on the company's operations. Moody's assesses Laureate's liquidity condition as adequate. The company carries substantial cash balances ($430 million as of March 31, 2015), although only $83 million is held in the US. This amount reflects seasonal working capital swings, and is expected to increase over the course of the year, approaching levels reported at year-end 2014 (approximately $200 million), which is important considering the company's substantial US dollar debt service requirements. Because of high levels of investments, free cash flow is expected to be negative through 2015, as it was in 2014, which could pressure cash reserves. To some extent the company can rely on the sale of unencumbered assets, such as real estate, as an alternative source of liquidity that mitigates the substantially negative free cash flow. Laureate maintains a $350 million revolving credit facility which is being amended to extend its maturity until March 2018. However, with the significant portion of this facility drawn as of March 31, 2015, only approximately $57.5 million was available to the company as a secondary source of liquidity. The company also maintains credit facilities outside of the US, aggregating approximately $100 million, which is used to cover working capital requirements in many of their non-US operations. The stable ratings outlook reflects Moody's expectations that the company will continue to invest to support expansion in its network of universities, which will inhibit rapid deleveraging or a return to a stronger liquidity profile over the near term. Moody's also expects that the company will maintain its current liquidity condition, with strong cash balances that provide support to seasonal cash flow needs or a modest deterioration in operating performance. The ratings could be lowered if the company experienced a weakening in enrollments, or if the company cannot successfully implement integration plans under its current growth strategy, possibly resulting in weaker liquidity or further increases in debt to support operations. Specifically, a downgrade could be warranted if debt to EBITDA exceeds 7.5 times for a prolonged period, if EBITA to interest is sustained below 1 time, or if total cash balance fall below $200 million without significant improvement in committed revolver availability. Ratings could be raised if the company's earnings and cash generated from operations allow for substantial debt reduction and improvement in liquidity. Specifically, the company would need to substantially restore revolver availability while generating positive free cash flow (before consideration of proceeds from asset sales). Credit metrics sustained at the following levels would support higher rating consideration: debt to EBITDA sustained below 6.0 times, EBITA to interest in excess of 1 times, and retained cash flow to debt above 10%. Laureate is based in Baltimore, Maryland, and operates a leading international network of accredited campus-based and online universities with 89 institutions in 29 countries, offering academic programs to approximately 1,037,000 students through over 200 campuses and online delivery. Laureate had revenues of approximately $4.4 billion for the LTM period ended March 31, 2015. LINEAR ELECTRIC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Linear Electric Co., Inc. 428 Route 46 Rockaway, NJ 07866 Case No.: 15-22493 Chapter 11 Petition Date: July 1, 2015 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Leonard C. Walczyk, Esq. WASSERMAN, JURISTA & STOLZ, P.C. 110 Allen Road, Suite 304 Basking Ridge, NJ 07920 Tel: (973) 467-2700 Email: lwalczyk@wjslaw.com Total Assets: $3 million Total Liabilities: $4.5 million The petition was signed by Lewis Weinstock, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb15-22493.pdf LOCAL CORPORATION: Can Use Cash Collateral Until July 9 ------------------------------------------------------- Judge Scott C. Clarkson of the U.S. Bankruptcy Court Central District of California - Santa Ana Division gave Local Corporation interim authority to use through July 9, 2015, cash collateral securing its prepetition indebtedness in an amount not to exceed $1.0 million in aggregate. Secured party Fast Pay Partners, LLC, objects to the cash collateral motion saying the motion does not adequately address the limitations or the mandate to provide certain information imposed by the Court. According to Fast Pay, the cas collateral is security for the approximately $3.165 million gross balance the Debtor owes to Fast Pay. A final hearing on the Motion will be held on July 9, 2015, at 11:00 a.m. The Debtor will file with the Court and serve supplemental papers in further support of the continued use of cash collateral by July 6. Any supplemental responses must be filed and served by July 8. Fast Pay is represented by: Scott H. Siegel, Esq. Lori E. Eropkin, Esq. LEVINSON ARSHONSKY & KURTZ, LLP 15303 Ventura Blvd., Suite 1650 Sherman Oaks, CA 91403 Tel: (818) 382-3434 Fax: (818) 382-3433 E-Mail: ssiegel@laklawyers.com leropkin@laklawyers.com About Local Corporation Local Corporation, a publicly traded Delaware corporation (NASDAQ symbol LOCM), is in the business of providing search results to consumers who are searching online for local businesses, products and services. Founded in 1999, the Irvine, California-based company went public in 2004 and has been one of the fastest growing online local media businesses for a number of years, and for the past four years it has been listed by Deloitte on its Technology Fast 500. The Company's search results are provided through the Company's flagship Local.com Web site and through other proprietary Web sites, and they are also delivered to a network of over 1,600 other Web sites that rely on search syndication services to provide local search results to their own users. The Company generates revenue from ad units placed alongside its search results, which include pay-per-click, pay-per-call, and display ad units. The Company reported a net loss of $5.50 million on $83.1 million of revenue for the year ended Dec. 31, 2014, compared with a net loss of $10.4 million on $94.4 million of revenue in the prior year. The Company's balance sheet at March 31, 2015, showed $36.8 million in total assets, $25.7 million in total liabilities, and stockholders' equity of $11.2 million. Local Corp. filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 15-13153) in Santa Ana, California, on June 23, 2015. The case is assigned to Judge Scott C Clarkson. The Debtor tapped Winthrop Couchot as counsel. The official schedules of assets and liabilities and statement of financial affairs are due July 7, 2015. MIDWAY GOLD: Court Issues Joint Administration Order ---------------------------------------------------- Judge Michael E. Romero of the U.S. Bankruptcy Court for the District of Colorado signed off an order granting the motions for joint administration of the Chapter 11 cases of Midway Gold US, Inc., and its debtor affiliates under Case No. 15-16835. About Midway Gold Midway Gold Corp., incorporated on May 14, 1996 under the laws of the Province of British Columbia, Canada, is engaged in the acquisition, exploration and development of mineral properties located in the state of Nevada and Washington. Midway Gold operates primarily through its wholly-owned subsidiary located in the United States, Midway Gold US Inc. The executive offices are in Englewood, Colorado. Midway US currently has one gold producing property: the Pan gold mine located in White Pine County, Nevada. Midway also has gold properties which are exploratory stage projects where gold mineralization has been identified, such as the Tonopah project in Nye County, Nevada, the Gold Rock project in White Pine County, Nevada, and the Golden Eagle project in Ferry County, Washington. Out of these projects, a permitting process has been undertaken only for the Gold Rock project. Finally, Midway's Spring Valley property, another gold property located in Pershing County, Nevada, is subject to a joint venture with Barrick Gold Exploration Inc. On June 22, 2015, Midway Gold US Inc. and 12 related entities, including parent Midway Gold Corp. each filed a petition in the U.S. Bankruptcy Court for the District of Colorado seeking relief under Chapter 11 of the U.S. Bankruptcy Code. The Debtors' cases have been assigned to Judge Michael E. Romero. The Debtors sought to have their cases jointly administered for procedural purposes, with all pleadings will be maintained on the case docket for Midway Gold US Inc.; Case No. 15-16835. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Sender Wasserman Wadsworth, P.C., as special bankruptcy and restructuring counsel; DLA Piper (Canada) LLP, as Canadian bankruptcy counsel; Ernst & Young Inc., as information officer of Canadian court; RBC Capital Markets, as investment banker; FTI Consulting as financial advisor; and Epiq Solutions, as claims and noticing agent. Midway Gold disclosed $184 million in assets and $62.4 million in liabilities as of March 31, 2015. MOLYCORP INC: Switches to Oaktree for Bankruptcy Financing ---------------------------------------------------------- Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reported that in an about-face, Molycorp Inc. has chosen bankruptcy financing from top-ranking lender Oaktree Capital Group LLC over a competing offer from secured bondholders, setting off a new round of court fights. According to the report, Oaktree's proposed loan is linked to the proposed sale of Molycorp's most valuable business, the moneymaking Neo Material Technologies Inc. operations. Bondholders say Molycorp needs to hang onto Neo to remain viable over the long haul, the report related. As reported in the June 30, 2015 edition of the TCR, a unit of by Oaktree Capital Management, L.P. submitted to the U.S. Bankruptcy Court for the District of Delaware an objection to Molycorp, Inc.'s motion to obtain postpetition financing, consisting of up to $225 million in gross proceeds provided by certain holders of the prepetition 10% senior secured notes. Molycorp had obtained commitments from a group of its 10% senior secured noteholders, led by JHL Capital Group, JMB Capital Partners and QVT Financial LP, for up to $225 million in gross proceeds of debtor-in-possession (DIP) financing, subject to Court approval, which will be used to support operations during the Chapter 11 period. About Molycorp Molycorp Inc. -- http://www.molycorp.com/-- is a global rare earths and rare metals producer. Molycorp owns several prominent rare earth processing facilities around the world. It has a workforce of 2,530 employees at locations on three continents. Molycorp's Mountain Pass Rare Earth Facility in San Bernadino County, California, is home to one of the world's largest and richest deposits of rare earths. Molycorp has corporate offices in the United States, Canada and China. CEO Geoffrey R. Bedford, and other senior management members are located in Molycorp's corporate offices in Toronto, Canada. Other senior manageemnt members are located at its U.S. corporate headquarters in Greendwood Village, Colorado. Molycorp reported a net loss of $623 million in 2014, a net loss of $377 million in 2013 and a net loss of $475 million in 2012. As of March 31, 2015, the Company had $2.49 billion in total assets, $1.78 billion in total liabilities and $709 million in total stockholders' equity. Molycorp and its North American subsidiaries, together with certain of its non-operating subsidiaries outside of North America, filed Chapter 11 voluntary petitions in Delaware (Bankr. D. Del. Lead Case No. 15-11357) on June 25, 2015, after reaching agreement with a group of lenders on a financial restructuring. The Chapter 11 cases of Molycorp and 20 affiliated debts are pending before Judge Christopher S. Sontchi. The agreement provides for a financial restructuring of the Company's $1.7 billion in debt and provides up to $225 million in gross proceeds in new financing to support operations while the Company completes negotiations with creditors. The Company's operations outside of North America, with the exception of non-operating companies in Luxembourg and Barbados, are excluded from the filings. Molycorp Rare Metals (Oklahoma), LLC, with operations in Quapaw, Oklahoma, also is excluded from the filings as it is not 100% owned by the Company. Molycorp is being advised by the investment banking firm of Miller Buckfire & Co. and is receiving financial advice from AlixPartners, LLP. Jones Day and Young, Conaway, Stargatt & Taylor LLP act as legal counsel to the Company in this process. Prime Clerk serves as claims and noticing agent. MURPHY USA: S&P Raises CCR to 'BB+', Outlook Stable --------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on El Dorado, Ark.-based convenience store operator Murphy USA Inc. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised its issue-level ratings on the company's $500 million unsecured notes to 'BB+' from 'BB' in conjunction with the higher corporate credit rating. S&P's recovery rating remains '3', indicating its expectation of meaningful (50% to 70%, in the higher half of the range) recovery in the event of a default. "The upgrade reflects the company's good financial performance that has exceeded our expectations. Upon separation from its parent Murphy Oil Corp. in 2013, Murphy USA focused on a leverage target of below 2.5x. The company used proceeds from assets sales and cash flows to reduce debt, and leverage has remained below 1.5x for five consecutive quarters," said credit analyst Andy Sookram. "We expect credit metrics will remain commensurate with ratings over the next two years. Our base-case forecast shows leverage of 1.5x, which represents an increase from 1.2x at March 31, 2015, because of our expectations for fuel margin declines. We also think earnings contribution from internally-funded new store openings could allow the company to sustain leverage in line with our expectations." The stable rating outlook on Murphy reflects S&P's expectation that leverage will be around 1.5x in the next year. S&P forecasts fuel margins of around 14 cents a gallon and some modest improvement in merchandise margins. While S&P thinks EBITDA could decline year over year because of fuel price swings inherent the convenience-store business, it thinks the company could generate some profit gains from new store openings and in-store initiatives. S&P do not anticipate any additional funded debt as it believes the company will use generated funds and cash balances to support its growth program. S&P could lower the rating if operating performance weakens on persistently rising fuel prices that squeeze earnings and cash flows or intensified competitive pressures. Under this scenario, fuel margins could decline to about 10 cents or lower and leverage is maintained above 2.0x. In the latter situation, S&P would most likely revise its financial risk assessment to "intermediate". S&P could also take a negative rating action if the company pursues large debt-financed shareholder initiatives or acquisitions or, although unlikely, if a change in incentives causes Murphy's agreement with Wal-Mart to end. S&P do not anticipate a positive rating action in the next year, given its views on the business risk profile, including high dependence on volatile fuel profits. Still, an upgrade could occur if S&P revises the business risk profile to "fair" on meaningful merchandise margin improvement because of improved product assortment, and leverage is sustained around 1x despite oil price fluctuations. NATURAL MOLECULAR: East Valley Gets $80,730 Admin Expense Claim --------------------------------------------------------------- East Valley Petula LLC will get an administrative expense claim of $80,730 on account of unpaid rent owed by Natural Molecular Testing Corp., according to court filings. Judge Marc Barreca signed off on an order granting the landlord an administrative expense claim of $15,164, which is in addition to the $65,566 that the bankruptcy judge previously approved. East Valley originally asked for an administrative expense claim in the amount of $82,557, consisting of $65,566 that Judge Barreca approved in October last year, and an additional $16,990 for the period Oct. 1 to Dec. 30, 2014. Natural Molecular's bankruptcy trustee earlier opposed the claim asserted by the landlord, saying it suffered damages after it was told to vacate the leased properties immediately. "The landlord created a false sense of urgency and crisis through its misrepresentations to the court regarding having a replacement tenant signed for the premises," Mark Calvert, the Chapter 11 trustee, said in a court filing. According to the trustee, the company "has suffered damages exceeding the amount of administrative claim" sought by the landlord. In response, East Valley said the statements made by the trustee are merely speculations. "Nothing in the trustee's objection or supporting papers supports the factual allegations upon which his objection is based," East Valley argued. About Natural Molecular Natural Molecular Testing Corp., which provides molecular diagnostic-testing services, including testing for sexually transmitted diseases and screening and counseling about cystic fibrosis, filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-19298) on Oct. 21, 2013, in Seattle. Hacker & Willig, Inc., P.S., serves as its bankruptcy counsel. The closely held company said assets are worth more than $100 million while debt is less than $50 million. Gail Brehm Geiger, Acting U.S. Trustee for Region 18, appointed a five-member Committee of Unsecured Creditors. Foster Pepper's Jane Pearson, Esq.; Christopher M. Alston, Esq., and Terrance Keenan, Esq., serve as the Committee's attorneys. NEOMEDIA TECHNOLOGIES: George O'Leary Quits as Director ------------------------------------------------------- George O'Leary, a director since 2006, resigned as a member of the Board of Directors of NeoMedia Technologies, Inc., on June 30, 2015, according to a document filed with the Securities and Exchange Commission. Mr. O'Leary also served as chairman of the Company's Audit Committee. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. NeoMedia reported a net loss of $2.46 million on $3.51 million of revenues for the year ended Dec. 31, 2014, compared to net income of $28.46 million on $4.29 million of revenues in 2013. As of March 31, 2015, the Company had $1.18 million in total assets, $40.7 million in total liabilities, all current, $4.31 million in series C convertible preferred stock, $348,000 in series D convertible preferred stock and a $44.2 million total shareholders' deficit. StarkSchenkein, LLP, in Denver, CO, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014. The independent auditors noted that the Company has suffered recurring losses from operations, has significant working capital and shareholder deficits and may have ongoing requirements for additional capital investment. These factors, the auditors noted, raise substantial doubt about the Company's ability to continue as a going concern. OXANE MATERIALS: Meeting of Creditors Set for July 13 ----------------------------------------------------- The meeting of creditors of Oxane Materials Inc. is set to be held on July 13, 2015, at 1:30 p.m., according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas. The meeting will take place at Suite 3401, 515 Rusk Avenue, in Houston, Texas. 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 Oxane Materials Oxane Materials, Inc., a developer of nanotechnologies based in Houston, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex., Case No. 15-32940), on May 31, 2015. The case is assigned to Judge Jeff Bohm. The Debtor's counsel is Morris Dean Weiss, Esq., at Taube Summers Harrison Taylor Meinzer Brown LLP, in Austin, Texas. P.F. CHANG'S: S&P Affirms 'B-' Corp. Credit Rating, Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Scottsdale, Ariz.-based P.F. Chang's China Bistro Inc. The outlook is stable. At the same time, S&P affirmed its 'B' issue-level rating and 'CCC' issue-level ratings on the company's secured credit facility and unsecured notes, respectively. "Our rating affirmation reflects our expectation that the company's liquidity will remain adequate with modestly positive free operating cash flow and adequate covenant headroom in the next 12 months," said credit analyst Mathew Christy. "We revised our assessment of P.F. Chang's business risk based on the decline in adjusted EBITDA margins compared with the year ago period. The revision has no effect on the corporate credit or issue-level ratings." The stable outlook reflects S&P's expectation that improved menu offerings and promotional strategies at P.F. Chang's will provide only limited traffic and operational upside in 2015. In S&P's base-case forecast, it also expects the company will maintain adequate liquidity and remain in compliance with covenants in the next 12 months. S&P could consider a negative rating action if weaker-than-expected performance or aggressive growth activities result in less than adequate liquidity and S&P believes the capital structure is unsustainable. This could happen if weak same-restaurant sales trends and margin erosion seem cause gross margin to fall about 50 bps or sales to decline in the low-single-digit range, resulting in an EBITDA decline of more than 20% in fiscal 2015. In this scenario, interest coverage would approach 1.0x and liquidity would erode because of increased cash burn. S&P could also lower its rating if the covenant headroom falls below 15% on a sustained basis, especially after the expected net senior secured lease adjusted leverage covenant step down in June 2016. Although unlikely, S&P could raise its rating if P.F. Chang's improves gross margin more than 200 bps above S&P's expectations or sales increase 10% in the coming year, resulting in a low-teens percent increase in EBITDA and leverage below 5.0x. However, given S&P's expected credit measures for the company, it do not expect to raise its rating in the coming year. PARFUMS ACQUISITION: Moody's Assigns 'B2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Parfums Acquisition Company, Inc. ("Parfums") and a B2 rating on its proposed senior secured credit facilities. Parfums plans to utilize the net proceeds along with excess cash to complete the acquisition of Cantu and Bodycology and to refinance its existing bank debt. The rating outlook is stable. The following ratings were assigned: Parfums Acquisition Company, Inc.: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Parfums de Coeur, Ltd. (d/b/a PDC Brands): $20 Million Senior Secured Bank Credit Revolver at B2 (LGD4) $260 Milllion Senior Secured Bank Term Loan at B2 (LGD4) The rating outlook is stable. All ratings assigned are subject to Moody's review of final closing documents. RATINGS RATIONALE Parfums' B2 CFR reflects its small scale, high customer concentration, strong competition, relatively weak market share, and high financial leverage. Parfums products are also vulnerable to shifts in consumer preferences, retailers' shelf space allocation and marketing support. The mass fragrances market is also highly competitive and Parfums faces steep competition from branded product companies that are significantly larger, more diverse, financially stronger, and which have much greater investment capacity. These factors are counterbalanced by the company's diverse portfolio and positive projected free cash flow. Parfums also has a good relationship with retailers and has been able to successfully target specific demographic segments through effective marketing and packaging. Parfums' stable rating outlook reflects Moody's view that the company will remain a relatively small, leveraged company for the for the foreseeable future. Customer or competitor actions that pressure Parfums' revenue and EBITDA through a deterioration in market share, retail distribution or pricing could result in a downgrade. Acquisitions, shareholder distributions or other actions that result in a sustained debt-to-EBITDA above 5.0x, or a deterioration in liquidity could also result in a downgrade. An upgrade could be considered if Parfums increases its scale and demonstrates a longer-term track record of profitable growth. Parfums would also need to maintain conservative financial policies including debt-to-EBITDA below 3.0x and maintain good liquidity to be considered for an upgrade. The principal methodology used in these ratings was Global Packaged Goods published in June 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies. Parfums, headquartered in Stamford, CT, develops, markets and sells fragrance, bath care and specialty bath and hair care products to mass market consumers. Key brands include Dr. Teal's, Body Fantasies, Calgon, Designer Imposters and BODman. Parfums acquired the Cantu and Bodycology brands in June 2015. Parfums is majority-owned by Yellow Wood Partners. Pro forma revenues are approximately $230 million. PATRIOT COAL: Auction Slated for Sept. 9; Bids Due Sept. 4 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia approved the bidding procedures for the sale of assets of Patriot Coal Corporation et al. free and clear of liens, claims, encumbrances, and interests. Deadline to file bids for the Debtors' assets is Sept. 4, 2015, at 5:00 p.m. (prevailing Eastern time). An auction will take place on Sept. 9, 2015, at 10:00 a.m. (prevailing Eastern Time), in Richmond, Virginia. About Patriot Coal Patriot Coal Corporation is a producer and marketer of coal in the United States. Patriot and its subsidiaries control 1.4 billion tons of proven and probable coal reserves -- including owned and leased assets in the Central Appalachia basin (in West Virginia and Ohio) and Southern Illinois basin (in Kentucky and Illinois) and their operations consist of eight active mining complexes in West Virginia. Patriot Coal first sought Chapter 11 protection on July 9, 2012, and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan from the U.S. Bankruptcy Court for the Eastern District of Missouri. The plan turned over most of the ownership of the company to bondholders that include New York hedge fund Knighthead Capital Management LLC. The linchpins of the plan were a global settlement among the Debtors, the United Mine Workers of America, and two third parties -- Peabody Energy Corporation and Arch Coal, Inc. -- and a commitment by a consortium of creditors, led by Knighthead, to backstop two rights offerings that funded the plan. Patriot Coal Corporation and its subsidiaries commenced new Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond, Virginia, on May 12, 2015. The cases are assigned to Judge Keith L. Phillips. The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock L.L.P., as co-counsel; Centerview Partners LLC as investment bankers; Alvarez & Marsal North America, LLC, as restructuring advisors; and Prime Clerk LLC, as claims and administrative agent. The U.S. trustee overseeing the Chapter 11 case of Patriot Coal Corp. appointed seven creditors of the company to serve on the official committee of unsecured creditors. Patriot Coal estimated more than $1 billion in assets and debt. * * * Patriot Coal on June 3 disclosed that it has filed with the Bankruptcy Court a letter of intent for a proposed sale of a substantial majority of its operating assets to Blackhawk Mining, LLC, as well as a motion outlining bidding procedures. The contemplated transaction would be consummated pursuant to a chapter 11 plan and is subject to documentation of a definitive asset purchase agreement, bankruptcy court approval of the sale, confirmation of a chapter 11 plan, and other customary conditions. Patriot's mining operations and customer shipments will continue in the ordinary course during the sale process. Under the terms of the letter of intent, Blackhawk would issue to Patriot's secured lenders new debt securities totaling approximately $643 million plus Class B Units providing them an ownership stake in Blackhawk. In addition, Blackhawk would assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets. PDC ENERGY: Moody's Hikes Probability of Default Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service upgraded PDC Energy's (PDC) Corporate Family Rating and Probability of Default Rating to B1 and B1-PD from B2 and B2-PD, respectively. In a related action, Moody's upgraded PDC's senior unsecured notes due 2022 to B2 from B3. The outlook was changed to stable from positive. The Speculative Grade Liquidity Rating was upgraded to SGL-2 from SGL-3. "PDC Energy's upgrade reflects the continued expected increase in production in 2015 and 2016 primarily from its core Wattenberg Field assets despite a challenging commodity price environment," stated Arvinder Saluja, Moody's Vice President. "A strong balance sheet and good hedges through 2016 provide additional support to PDC's credit profile." Ratings upgraded: Issuer: PDC Energy Corporate Family Rating, B1 from B2 Probability of Default Rating, B1-PD from B2-PD $500 million Senior Unsecured Notes, B2 (LGD5) from B3 (LGD5) Speculative Grade Liquidity Rating, SGL-2 from SGL-3 Outlook action: Issuer: PDC Energy Outlook changed to stable from positive RATINGS RATIONALE PDC's B1 CFR recognizes the company's improvement in scale with production expected to exceed 35 mboe/day in 2015 and to additionally increase materially in 2016; strong balance sheet; and good liquidity, which will comfortably cover the anticipated capex outspend of cash flow. PDC expects to continue a 5 rig program in its core Wattenberg acreage despite having few drilling requirements and low sustaining capex. Beyond a good hedging profile in 2015-16, this also signifies good drilling economics in Wattenberg for PDC. The CFR also reflects its moderate finding and development (F&D) costs, good returns, a large drilling inventory, considerable flexibility with the size of its capital expenditure program, and the growth in its liquids production, with total production consisting of 45% crude oil, 20% natural gas liquids, and 35% natural gas. PDC's rating is constrained by its moderate production scale and its primary concentration in one basin, the Wattenberg field of the Rocky Mountain region. Even though its expansion into the liquid-rich window of Utica Shale could over time improve diversification and increase liquids production, PDC has suspended its drilling activity in the region temporarily due to weak NGL prices. PDC's SGL-2 rating reflects good liquidity. In March 2015, PDC issued equity in the secondary market and received net proceeds of $203 million. As of March 31, 2015, the company had $438.3 million available under its secured borrowing base revolving credit facility and approximately $67 million of cash on the balance sheet. PDC's commitment level under its revolver due May 2018 is $450 million, which is lower than the current borrowing base of $700 million. There are $11.7 million of letters of credit outstanding. We expect the company's capex to exceed cash flow in both 2015 and 2016. There are no debt maturities until May 2016 when the 3.25% convertible senior notes mature. We expect a portion of the 3.25% convertible notes to be converted to common equity at maturity if they are in the money (exchange rate of $42.40 per share of common stock). Revolver covenants include a current ratio of at least 1.0x and a debt / EBITDAX ratio of no more than 4.25x. We expect the company to maintain comfortable cushion to comply with the covenants over the next 12-18 months. Substantially all of PDC's assets are pledged as security under the credit facility, but Moody's believes the company could sell some assets to raise cash for additional liquidity if needed. The $500 million 7.75% Senior Unsecured Notes due 2022 is rated B2, one notch below the CFR, reflecting the effective subordination to the $450 million secured revolving credit facility due 2018 (unrated). The senior secured revolver is secured by a pledge of substantially all assets of the company and ranks ahead of the senior notes. The $115 million 3.25% convertible senior notes due May 2016 (unrated) rank equal in right of payment to the 7.75% senior notes. The stable outlook reflects our expectation that PDC will be able to continue production growth into 2016 while maintaining a favorable finding and development cost and return profile. The ratings could be upgraded if average daily production exceeded 60 mboe/day while maintaining debt to average daily production below $20,000 per BOE and RCF/debt above 30%, assuming returns and the company's business risk profile do not deteriorate as a result of further expansion and development. The ratings could be downgraded if debt to average daily production increases above $30,000 per BOE for a sustained period or if RCF / debt decreases to below 20%. PDC Energy is an independent exploration and production company headquartered in Denver, Colorado. PVH CORP: Moody's Raises Corporate Family Rating to 'Ba1' --------------------------------------------------------- Moody's Investors Service upgraded PVH Corp.'s Corporate Family Rating to Ba1 and Probability of Default Rating to Ba1-PD. In conjunction with the rating action, the senior secured debt (which includes the bank facilities and secured bonds) and senior unsecured notes were raised a notch to Baa3 and Ba2, respectively. Moody's also affirmed the SGL-1 Speculative Grade Liquidity Rating. The rating action concludes the review for upgrade initiated on June 16, 2015. The rating outlook is stable. "The upgrade reflects the reduction in adjusted debt due to changes in Moody's approach for capitalizing operating leases" said Moody's Vice President Scott Tuhy. The updated approach for standard adjustments for operating leases is explained in the cross-sector rating methodology Financial Statement Adjustments in the Analysis of Non-Financial Corporations, published on June 15, 2015. Tuhy added "The upgrade considers that notwithstanding expected pressure on results in the near term from the strengthening USD we expect PVH to maintain leverage in the low 3x range and consistent sales performance at its leading global brands Calvin Klein and Tommy Hilfiger." The following ratings were upgraded: Corporate Family Rating to Ba1 from Ba2 Probability of Default Rating from Ba1-PD from Ba2-PD $750 million four-year secured revolving credit facilities to Baa3, LGD3 from Ba1, LGD3 $1.88 billion five-year secured term loan A to Baa3, LGD3 from Ba1, LGD3 $808 million five- year secured term loan B to Baa3, LGD3 from Ba1, LGD3 $100 million senior secured bonds due 2023 to Baa3, LGD3 from Ba1, LGD3 $700 million senior unsecured notes due 2022 to Ba2, LGD5 from Ba3, LGD5 The following ratings were affirmed: Speculative Grade Liquidity Rating: SGL-1 Outlook: Stable RATINGS RATIONALE PVH's Ba1 CFR reflects the company's strong market position and ownership of two multibillion dollar lifestyle fashion brands with global presence and broad lifestyle appeal - Tommy Hilfiger and Calvin Klein. The rating reflects the company's consistent performance as evidenced by continued strong operating margins despite currency fluctuations and softness in some product categories (such as women's denim). The company's heritage businesses in the men's sportswear, swimwear, and intimate apparel categories are in mature categories however they are cash generated with strong and consistent returns on capital. The rating reflects the company's moderate debt burden with debt/EBITDA expected to be below 3.5 times by the end of the current fiscal year. Ratings are constrained by the company's aggressive financial policies which include meaningful debt financed acquisitions. The stable rating outlook reflects Moody's view the company will maintain leverage in the low 3x over the next 12-18 months as it anticipates that absent additional acquisition activity, it expects the company will increasingly use its strong free cash flow to repurchase shares over time. The rating outlook encompasses expectations PVH will acquire licensed product categories and territories over time. Despite negative pressure on fiscal 2015 reported revenue due to currency headwinds, Moody's expects the company to maintain positive constant-currency sales growth for its portfolio of brands as a whole and maintain its high operating margins. Ratings could be upgraded if the company continues reduce absolute debt levels and demonstrates continued stability in operating performance. Quantitatively ratings could be upgraded if debt/EBITDA was expected to be below 3x and interest coverage exceeded 4.5x. The company would also need to meaningfully reduce its reliance on secured debt for an upgrade into investment grade. Ratings could be lowered if the company's financial policies were to become more aggressive or operating performance began to falter. Quantitatively, ratings could be lowered if debt/EBITDA was sustained above 3.75x. Headquartered in New York, NY, PVH Corp. ("PVH") is one of the world's largest apparel companies, owns and markets the Calvin Klein and Tommy Hilfiger brands worldwide. It is the world's largest shirt and neckwear company and markets a variety of goods under its own brands including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Warner's and Olga, and its licensed brands, including Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, MICHAEL Michael Kors, Sean John, Chaps, Donald J. Trump Signature Collection, and Ike Behar. Revenues for the twelve month period ending May 3, 2015 were around $8.2 billion. QUEST SOLUTION: Amends Credit Agreement with Wells Fargo -------------------------------------------------------- Quest Solution, Inc., and each of its wholly-owned subsidiaries, Quest Marketing, Inc., and Bar Code Specialties, Inc., amended their existing credit agreement dated as of Dec. 31, 2014, with Wells Fargo Bank, National Association. The First Amendment provides for the following: * an amendment to Section 4.3 of the Credit Agreement, inserting a new clause (c) to Section 4.3, which states that the Loan Parties' shall maintain a Free Cash Flow measured monthly as of the last day of each month, on a year-to-year- date basis, in an amount no greater than the amounts set forth in the table to the agreement; * a one-time extension for delivery of the Loan Parties' April 2015 and May 2015 financial statements until no later than June 26, 2015; and * Lender's consent to a one-time payment to certain subordinated debt holders. Promissory Notes In connection with the First Amendment on June 24, 2015, Quest issued subordinated promissory notes to three investors (who are also Quest employees) in the aggregate principal amount of $400,000 in exchange for an aggregate 170,000 shares of Quest's restricted common stock, par value $0.001 per share. The Promissory Notes accrue interest at six percent per annum and are payable in 12 equal, monthly installments. The Promissory Notes are due on July 31, 2016. The Promissory Notes are debt obligations arising other than in the ordinary course of business, which constitute direct financial obligations of Quest. Security Purchase Agreement On May 19, 2015, Quest entered into a Security Purchase Agreement with an accredited investor, who is also a subordinated debt holder and an employee of Quest, pursuant to which Quest issued 667,000 shares of Common Stock in exchange for $200,000. About Quest Solution Quest Solution (formerly known as Amerigo Energy, Inc.) is a national mobility systems integrator with a focus on design, delivery, deployment and support of fully integrated mobile solutions. The Company takes a consultative approach by offering end to end solutions that include hardware, software, communications and full lifecycle management services. The highly tenured team of professionals simplifies the integration process and delivers proven problem solving solutions backed by numerous customer references. Motorola, Intermec, Honeywell, Panasonic, AirWatch, Wavelink, SOTI and Zebra are major suppliers which Quest Solution uses in its systems. Quest Solution reported net income of $302,000 on $37.3 million of total revenues for the year ended Dec. 31, 2014, compared with a net loss of $1.12 million on $4,070 of total revenues for the year ended Dec. 31, 2013. As of March 31, 2015, the Company had $33.4 million in total assets, $32.6 million in total liabilities and $791,000 in total stockholders' equity. RCS CAPITAL: Moody's Affirms B3 Rating on First Lien Loans ---------------------------------------------------------- Moody's Investors Service affirmed RCS Capital Corporation's (RCS) B3 first lien and Caa2 second lien ratings, and maintained a negative outlook, following the company's announcement that it had successfully amended its credit agreements to loosen leverage ratio requirements. Moody's has taken the following rating actions: -- Corporate family rating, affirmed at B3 -- $575 million senior secured first lien term loan, affirmed at B3 -- $25 million senior secured first lien revolving credit facility, affirmed at B3 -- $150 million senior secured second lien term loan, affirmed at Caa2 -- Outlook, remains negative RATINGS RATIONALE Moody's said the credit agreement modifications reduce the likelihood that RCS will breach its financial covenants in forthcoming reporting periods, which, combined with ample liquidity, affords the company some time and flexibility as it strives to improve results in wholesale distribution and capital markets advisory activities. Nonetheless, said Moody's, RCS still has a significant confidence-sensitive concentration risk in its transactions with affiliates in these businesses. Moody's said there remains a heightened level of uncertainty about its ability to generate substantially more wholesale distribution revenue, and to develop and sustain regular, large quarterly cash inflows from its capital markets business. The negative outlook on RCS' ratings is likely to remain in place until there is more clarity on these matters, said Moody's. Moody's said RCS' independent retail advisory business has a comparatively more enduring earnings capacity than its other activities. However, it is still in the midst of a substantial transitional period (having been assembled via multiple acquisitions during 2014 and 2015) and will require organic revenue growth and the substantial realization of synergies and cost savings in 2015 in order to fulfil its potential, said Moody's. Moody's added that RCS faces potentially stiff regulatory headwinds from the Department of Labor's proposal to adopt a fiduciary standard for retirement advisory activities. The implementation of such a rule could prove complex and costly to implement and comply with, and could result in lost revenue in some activities that could be challenging to replace. What Could Change the Rating -- Up A strong demonstration of the successful integration of acquired independent retail advisory companies, evidenced by continuing and substantial achievement of planned synergies and improved operating results, could result in upward rating pressure. A definitive trend towards substantially reduced reliance on transactions with affiliates would also be viewed positively. What Could Change the Rating -- Down A prolonged downturn in retail financial advisory earnings or advisor losses would be viewed negatively. A failure to successfully re-invigorate the wholesale distribution business or a developing trend of muted capital market revenues would add to such downward rating pressure. The emergence of regulatory or compliance matters that could result in significant financial penalties or loss of business could also lead to a downgrade. REFCO INC: NJ Ct. Denies Bid to Exclude Testimonies in SPhinX Suit ------------------------------------------------------------------ Chief Judge Jerome B. Simandle of the United States District Court for New Jersey granted in part and denied in part the parties motion to exclude experts' testimonies in the case captioned KENNETH M. KRYS, MARGOT MACiNNIS, and THE HARBOUR TRUST CO. LTD., Plaintiffs, v. ROBERT AARON, DERIVATIVE PORTFOLIO MANAGEMENT LLC, DPM-MELLON, LLC, DERIVATIVE PORTFOLIO MANAGEMENT, LTD., DPM-MELLON, LTD, and BANK OF NEW YORK MELLON CORPORATION, Defendants, Civil Action No.: 14-2098 (JBS/AMD), (D.N.J.). The case arises from the complex financial and brokerage relationships between, and ultimate dissolutions of, three entities: PlusFunds Group, Inc., SPhinX Funds, and Refco, Inc. Plaintiffs Kenneth M. Krys and Margot Macinnis, the Joint Official Liquidators of the SPhinX Trust, and The Harbour Trust Co. Ltd., the Trustee of the SPhinX Trust, allege that the Defendants, all SPhinX Funds' and PlusFunds' agents and fiduciaries, allowed and/or facilitated the unauthorized diversion of SMFF's excess cash from protected, customer-segregated accounts to non-regulated and unsegregated offshore accounts with Refco and failed to take certain corrective steps in the face of Refco's potential insolvency. The parties filed a motion to exclude in whole or in part of the experts' testimonies. Judge Simandle denied the exclusion of the testimony of Michael Greenberger, the Plaintiffs' expert on Commodity Futures Trading Commission issues, after finding that Mr. Greenberger provides background testimony relevant to the futures' industry, and specifically concerning the customs and business practices with regard to issues of segregation and/or sweeps of customer funds. With regard to the testimony of Anthony J. Leitner, the Court will not exclude provide background testimony relevant to the futures' industry, and specifically concerning the customs and business practices with regard to issues of segregation. Further, The Court has little doubt that the testimony of Anthony J. Leitner, the Defendants' expert on segregation issues under the CEA and the CFTC, on industry customs and practices with respect to segregation and cash sweeps will prove helpful to the jury under Rule 702 of the Federal Rules of Evidence. Indeed, Judge Simandle found that Mr. Leitner's testimony on these issues will allow the jury to contextualize the transactions at issue in this litigation, and will further provide helpful comparative information concerning industry standards relevant to this litigation. Judge Simandle denied the Defendants' motion to exclude the testimony of Joan A. Lipton on admissibility grounds under Rule 702, after finding that the Defendants' challenges to the underlying bases for Dr. Lipton's Report go to weight, not admissibility, and therefore constitute challenges properly presented through cross-examination, and not through exclusion of her otherwise reliable and relevant valuation work. The factual narrative that underpins her conclusions is based on evidence that is disputed but provable at trial, as outlined at length by the Plaintiffs' counsel at oral argument. Whether the evidence is adopted by the jury is not determined in the Daubert motion. It suffices that Lipton propounds a reasonable factual basis that resonates with Plaintiffs' view of the evidence, Judge Simandale said. As to the testimony of Avram S. Tucker, the Court denied the Plaintiffs' motion to exclude Mr. Tucker, as narrowed by the Defendants' concessions. Judge Simandale said the Court need not belabor the Plaintiffs' position, because Mr. Tucker's assumptions primarily concern basic issues regarding the filing and allowance of bankruptcy claims and his conclusions largely recapitulate assumptions relied upon and supported by the Plaintiffs' own experts. As to the testimony of Peter U. Viniella, Judge Simandle granted the Defendants' motion to the extent it seeks to exclude Mr. Vinella's testimony concerning Defendants' state of mind and to the extent his testimony constitutes a legal opinion, but denied to the extent it seeks to bar Mr. Vinella's testimony in its entirety. Judge Simandle directed the Plaintiffs to make redactions to Mr. Vinella's proposed Report consistent with the Opinion and counsel's concessions. As to the testimony of Raymond O'Neill, the Court denied the Plaintiffs' motion as to Mr. O'Neil without prejudice to the Plaintiffs' right to voice any objections at the time of trial in the event Mr. O'Neill's actual testimony reflects an impermissible legal conclusion. Moreover, to the extent the Plaintiffs have a basis at trial to challenge Mr. O'Neill's underlying factual assumptions, the Plaintiffs, of course, retain the right to cross-examine him on this and any related issues. The Court cannot conclude that Mr. O'Neill's Report exceeds "the purview of experts." Rather, the report, when viewed as a whole, bears adequate indicia of reliability for purposes of admissibility. As to R. David Wallace, CPA, CFF's testimony, the Defendants' motion to exclude Mr. Wallace, as narrowed by the Plaintiffs' concessions, will be granted with respect to Mr. Wallace's anticipated testimony on SMFF's 2002 financial statements, but denied with respect to testimony concerning SMFF's 2003 and 2004 financial statements. In sum, the Court's decision on the parties' various motions to exclude, the expert reports will require revisions consistent with the Opinion and the parties' various concessions concerning the scope of each expert's testimony. Therefore, the Court will direct counsel to revise the proposed expert reports and to provide copies to the adversaries' counsel by no later than June 19, 2015. The Court further reminds counsel that, as discussed at oral argument, the revised reports provide only the outline and scope of the anticipated expert testimony, but are not themselves admissible, nor will they be shown directly to the jury. It is, of course, the duty of counsel to clearly advise their experts of any limitations placed on their testimony. A full-text copy of Judge Simandle's Opinion dated June 12, 2015, is available at http://is.gd/PyXqUGfrom Leagle.com. David J. Molton, Esq. – dmolton@brownrudnick.com -- Mason C. Simpson, Esq. – msimpson@brownrudnick.com of BROWN RUDNICK LLP -- Leo R. Beus, Esq. -- L. Richard Williams, Esq. -- Thomas A. Gilson, Esq. -- and Lee M. Andelin, Esq. -- of BEUS GILBERT PLLC serve as counsel for Plaintiffs. B. John Pendleton, Jr., Esq. – john.pendleton@dlapiper.com -- Andrew O. Bunn, Esq. – andrew.bunn@dlapiper.com -- Kristin A. Pacio, Esq. – kristin.pacio@dlapiper.com -- and Gina Trimarco, Esq. – gina.trimarco@dlapiper.com of DLA PIPER LLP (US) serve as counsel for Defendants. RICEBRAN TECHNOLOGIES: Stockholders Elect Seven Directors --------------------------------------------------------- The annual meeting of shareholders of RiceBran Technologies was held on June 24, 2015, at which the shareholders elected John Short, Marco V. Galante, David Goldman, Baruch Halpern, Henk W. Hoogenkamp, Robert C. Schweitzer and Peter A. Woog as directors. The shareholders also approved, on a nonbinding advisory basis, the compensation of the Company's named executive officers and ratified the appointment of Marcum, LLP as the Company's independent registered public accounting firm for the for the year ending Dec. 31, 2015. About RiceBran Scottsdale, Ariz.-based RiceBran Technologies, a California corporation, is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. Ricebran incurred a net loss of $26.6 million in 2014 following a net loss of $17.6 million in 2013. As of March 31, 2015, the Company had $39.7 million in total assets, $26.3 million in total liabilities, $1.37 million in temporary equity, and $12 million in total equity. Marcum, LLP, in New York, NY, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has suffered recurring losses from operations resulting in an accumulated deficit of $242.5 million at Dec. 31, 2014. This factor among other things, raises substantial doubt about its ability to continue as a going concern. RYNARD PROPERTIES: Fannie Mae Balks at Marston's Compensation ------------------------------------------------------------- Primary lender Fannie Mae objected to Rynard Properties Ridgecrest LP's application to employ Jimmy Dickey, Terry Johnson and The Marston Group PLC as accountants. The Debtor is indebted to Fannie Mae in the amount of $5,000,000, which is secured by a first priority Deed of Trust encumbering the Ridgecrest Apartment Complex operated by Debtor as well as related collateral. According to Fannie Mae, the application stated that the Debtor will pay Marston an initial retainer of $5,000 with a base fee of $1,000 per month for accounting services provided to produce the monthly reports and further fees in the amount of $375 per hour to Jimmy Dickey and $125 per hour to professional staff. Fannie Mae noted that the Debtor has not consulted with Fannie Mae concerning the retention of Marston or requested that Fannie Mae consent to the use of cash collateral for the payment of Marston's fees. However, if the Debtor can demonstrate that it has a viable source of payment to Marston other than Fannie Mae's cash collateral, Fannie Mae has no objection to the retention of Marston. The Debtor, in its motion, stated that Marston Group will assist them in general accounting and tax related matters, including preparation of monthly financial reports, and payment and verification of bills, preparation of compilation reports and federal and state tax returns and/or other accounting needs for the operation of the business of the Debtor in the matters. Mr. Dickey who is a member of this firm will be the primary partner in charge. To the best of the Debtor's knowledge, Marston Group has no adverse interest to the Debtor, creditors or other interested parties in the case. Fannie Mae is represented by: Geoffrey Treece, Esq. QUATTLEBAUM, GROOMS & TULL PLLC 111 Center Street, Suite 1900 Little Rock, AR 72201 Tel: (501) 379-1735 Fax: (501) 379-3835 E-mail: gtreece@qgtlaw.com About Rynard Properties Ridgecrest Rynard Properties Ridgecrest LP is a Tennessee limited partnership. Its principal place of business is 2881 Rangeline Road, Memphis, TN 38127, and the Debtor operates a 256 unit multifamily apartment complex of Section 8 housing named Ridgecrest Apartments and currently has TESCO operating the complex as leasing agent. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 14-22674) on March 13, 2014. John Bartle signed the petition as secretary/treasurer of Ridgecrest LLC, general partner of the Debtor. In its schedules, the Debtor disclosed $16.2 million in total assets and $8.73 million in total liabilities. Toni Campbell Parker serves as the Debtor's counsel. Judge Jennie D. Latta oversees the case. The U.S. Trustee for Region 8 has notified the Bankruptcy Court that it was unable to appoint an official committee of unsecured creditors. SANUWAVE HEALTH: Provides Update on dermaPACE Clinical Trial ------------------------------------------------------------ SANUWAVE Health, Inc., announced the plan for completing the Company's Phase III supplemental clinical trial that used the dermaPACE for treating diabetic foot ulcers. SANUWAVE and its regulatory advisors, Musculoskeletal Clinical Regulatory Advisers, LLC, held an in-person meeting with the U.S. Food and Drug Administration in June 2015. In this meeting, it was determined that the best path to success would be for the Company to retain the original analysis plan. In addition, the FDA noted the totality of the data from the clinical study, such as additional endpoints and a favorable risk/benefit profile, will play an important role in the FDA's review of the Company's Premarket Approval submission. The Company completed enrollment in the clinical study in November 2014 and all 130 patients have now completed the full 24-week follow-up. The Company and its CRO are in the process of completing the auditing of the clinical documentation at each clinical site to be followed by site close-out, a final review, and then locking of the clinical study database. After the database is locked, the Company will be unblinded to the data, conduct statistical analyses, announce the top-line results publicly in Q3-2015, and draft the clinical study report. Assuming positive clinical results, this work will culminate in submission of the PMA to the FDA in Q4-2015/Q1-2016. Kevin A. Richardson II, Chairman of the board of directors of SANUWAVE, commented, "We are very pleased to have reached this major milestone in the supplemental clinical trial of dermaPACE to treat diabetic foot ulcers. The positive feedback from the FDA at our meeting to discuss the dermaPACE clinical study gives us the confidence to stop further enrollment in the study and move towards final data review and PMA submission to the FDA." "With the recent positive feedback from the FDA, we have now begun discussions with various strategic parties about partnering on the commercialization of the product. The dermaPACE, with its novel biologic regenerative effects, holds promise to heal diabetic foot ulcers and increase limb preservation, thus improving quality of life for these patients and their families and significantly easing the economic burden on an overwhelmed healthcare system that cares for these patients. We are moving quickly toward our ultimate goal of obtaining FDA approval for dermaPACE and commercializing the technology in the U.S. where millions of people suffer from costly and debilitating diabetic foot ulcers," concluded Mr. Richardson. About SANUWAVE Health Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. SANUWAVE Health reported a net loss of $5.97 million on $847,000 of revenues for the year ended Dec. 31, 2014, compared with a net loss of $11.3 million on $800,000 of revenues in 2013. As of March 31, 2015, the Company had $3.49 million in total assets, $6.18 million in total liabilities, and a $2.69 million total stockholders' deficit. SEARS HOLDINGS: S&P Affirms 'CCC+' CCR, Outlook Remains Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on Sears Holdings Corp. The outlook remains negative. S&P is raising the issue-level ratings on the $1.25 billion second-lien notes to 'B' from 'B-', and revising the recovery rating revised to '1' from '2'. The '1' recovery rating reflects S&P's expectation for very high (90% to 100%) recovery in the event of default. S&P also raised the issue-level rating on Sears Roebuck Acceptance Corp.'s (SRAC's) $327 million outstanding senior notes to 'B-' from 'CCC+' and revised the recovery rating to '2' from '4'. The '2' recovery rating reflects S&P's expectation for substantial (lower half of the 70% to 90%) recovery. These instruments have stronger recovery prospects than S&P had previously projected, stemming primarily from an increase in S&P's valuation of Sears' real estate portfolio (the stores that Sears will continue to own after the REIT transaction closes) and S&P's inclusion of the Kenmore, Craftsman, and Diehard brands as additional sources of recovery value for Sears' creditors. "The rating affirmation reflects our expectation that the company maintains sufficient liquidity to fund cash losses from the retail business into at least late 2016, taking into account the proceeds Sears expects to realize from the pending REIT transaction," said credit analyst Robert Schulz. "Because of the very high leverage from ongoing negative EBITDA versus existing debt balances, we continue to view the capital structure as unsustainable under our criteria, although we do not envision a near term credit or payment crisis. We believe the still-substantial unencumbered assets have value, potentially independent of Sears' current business struggles. We believe Sears could use these assets to generate liquidity, but progress in stabilizing sales and improving earnings and cash flow are important to avoid an eventual restructuring." "Our negative outlook on Sears reflects our view that weak operating performance will persist during 2015 and a turnaround depends on the company's progress with its integrated retail strategy to reverse the lack of profitability and substantial cash use. We believe Sears retains significant unencumbered real estate it can use to generate liquidity, but progress in stabilizing sales and improving earnings and cash flow are just as critical to avoid an eventual restructuring. We currently expect Sears will close the REIT transaction with Seritage Growth Properties and also extend a majority of its ABL facility until 2020, the combination of which will represent a significant boost to liquidity," S&P said. S&P would lower the rating if it seems unlikely that the company will complete the transactions. If the company raises liquidity, as S&P currently assumes, the outlook would remain negative since it considers the capital structure to be unstable longer term at the current level of retail losses, negative EBITDA, and cash burn. S&P could lower the rating if retail cash usage did not show signs of abating into late 2016 and this leads S&P to envision a subsequent specific default scenario. S&P could consider revising the outlook to stable if there were indications that the company's main retail segment is recovering, including prospects for a return to positive EBITDA and if liquidity seems sufficient for 2017 and beyond. As S&P evaluates the benefits from the REIT transaction over the next year, key considerations will include the company's use of proceeds, how fast incremental rent obligations may be reduced by landlord space recapture, and prospects for Sears to turnaround its retail operations. S&P views an upgrade as less likely at this time because of its expectations for continued challenges in the retail segment. SIGA TECHNOLOGIES: Defends Bid to Disband Creditors Committee ------------------------------------------------------------- SIGA Technologies, Inc., responded to the objections of (i) William K. Harrington, the U.S. Trustee for Region 2; and (ii) the Statutory Creditors' Committee to the motion to disband the Statutory Creditors' Committee. The objections asserted that (a) there is no authority for the Court to disband the Committee; (b) the Committee no longer is a committee of one because of the recent appointment of Patheon Manufacturing Services, LLC; and (c) a committee is necessary to monitor and supervise the Debtor, to engage in plan negotiations with the Debtor, and to expedite the Debtor's prompt emergence from chapter 11. The Debtor had sought to disband the Committee, citing that there is only one eligible member of the Committee -- PharmAthene, Inc., the Debtor's long-time litigation adversary -- and under these circumstances, the continued existence of the Committee, with all of the attendant costs and expenses, is neither appropriate nor warranted. Despite the appointment of Patheon, the Debtor insists on the disbandment of the Committee for these reasons: -- Patheon is not and cannot be a prepetition creditor of SIGA, and is not eligible to sit on the Committee; -- PharmAthene, which has controlled the Committee from its inception, has demonstrated that it is more than capable of monitoring the Debtor and the administration of the case; and -- the Committee's concern over its right to appeal a disbandment order can be addressed at the appropriate time. About SIGA Technologies Publicly held SIGA Technologies, Inc., with headquarters in Madison Avenue, New York, is a biotech/pharmaceutical company that specializes in the development and commercialization of solutions for serious unmet medical needs and biothreats. SIGA's lead product is Tecovirimat, also known as ST-246, an orally administered antiviral drug that targets orthopoxviruses. SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 14-12623) on Sept. 16, 2014, in Manhattan. The case is assigned to Judge Sean H. Lane. The Debtor has tapped Weil, Gotshal & Manges LLP, as counsel, and Prime Clerk LLC as claims agent. The Debtor's Chapter 11 plan and disclosure statement are due May 14, 2015. The Debtor disclosed total assets of $131,669,746 and $7,954,645 in liabilities as of the Chapter 11 filing. The Statutory Creditors' Committee is represented by Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Ehud Barak, Esq., at PROSKAUER ROSE LLP. The Committee tapped to retain Guggenheim Securities, LLC, as its financial advisor and investment banker. SIGA TECHNOLOGIES: Susman and Ressler Okayed as Panel Co-Counsel ---------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York authorized the Statutory Creditors' Committee of SIGA Technologies, Inc., to retain Susman Godfrey L.L.P. and Ressler & Ressler as special litigation co-counsel, nunc pro tunc to May 13, 2015. The joint venture will to pursue the discovery and potential litigation against a host of parties, as set forth in the 2004 motion. All objections to the application are overruled. On May 11, 2015, the Committee, filed an omnibus reply to the (i) objection of the Debtor to the Committee's motion for order pursuant to Bankruptcy Rule 2004 authorizing discovery from the Debtor and certain third parties; (ii) objection of MacAndrews & Forbes Incorporated, MacAndrews & Forbes Group LLC, and MacAndrews & Forbes LLC to motion of authorizing discovery; and (iii) objection of the Debtor to application of the Committee consistent with its motion to disband the Committee, opposition to the Committee investigation motions continues to expose its strategy for the case. According to the Committee, the Debtor's objection to the Committee's application to retain special counsel is without merit. Contrary to the Debtor's distortion of reality, the Committee has engaged special counsel that will conduct an efficient and cost-effective investigation at 20% discounted rates. Special counsel will also pursue litigation on a noncontroversial contingency fee basis. The Debtor, in its objection, requested that the Court deny the application to retain Susman and Ressler. The Debtor said that the retention application is just one more step designed to promote PharmAthene Inc.'s parochial interests at the estate's expense. The Committee is represented by: Martin J. Bienenstock, Esq. Scott K. Rutsky, Esq. Ehud Barak, Esq. PROSKAUER ROSE LLP Eleven Times Square New York, NY 10036 Tel: (212) 969-3000 Fax: (212) 969-2900 About SIGA Technologies Publicly held SIGA Technologies, Inc., with headquarters in Madison Avenue, New York, is a biotech/pharmaceutical company that specializes in the development and commercialization of solutions for serious unmet medical needs and biothreats. SIGA's lead product is Tecovirimat, also known as ST-246, an orally administered antiviral drug that targets orthopoxviruses. SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 14-12623) on Sept. 16, 2014, in Manhattan. The case is assigned to Judge Sean H. Lane. The Debtor has tapped Weil, Gotshal & Manges LLP, as counsel, and Prime Clerk LLC as claims agent. The Debtor's Chapter 11 plan and disclosure statement are due May 14, 2015. The Debtor disclosed total assets of $131,669,746 and $7,954,645 in liabilities as of the Chapter 11 filing. The Statutory Creditors' Committee is represented by Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Ehud Barak, Esq., at Proskauer Rose LLP. The Committee tapped to retain Guggenheim Securities, LLC, as its financial advisor and investment banker. SOURCEHOV LLC: S&P Revises Outlook to Negative & Affirms 'B' CCR ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to negative from stable and affirmed its 'B' corporate credit rating on Coppell, Texas-based SourceHOV LLC. At the same time, S&P is affirming its 'B' issue-level rating, with a recovery rating of '3', on the company's $780 million first-lien senior secured term loan due 2020 and $75 million revolving credit facility due 2019, indicating S&P's expectation for meaningful (50% to 70%, in the upper half of the range) recovery in the event of payment default. In addition, S&P is affirming its 'CCC+' issue-level rating, with a recovery rating of '6', on the company's $250 million second-lien term loan due 2021, indicating S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. "The outlook revision reflects our view that covenant cushion could remain below 10% over the next 12 months if operating performance is below our expectations," said Standard & Poor's credit analyst Minesh Shilotri. SPORTS AUTHORITY: Moody's Affirms 'Caa1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed The Sports Authority Inc.'s ratings, including its Caa1 Corporate Family Rating, Caa1-PD Probability of Default Rating and Caa1 on the company's $300 million senior secured term loan. Concurrently, Moody's changed the company's ratings outlook to stable from negative reflecting improved liquidity due to the maturity extension of its subordinated notes to February 19, 2018 from May 3, 2016. As a result of the maturity extension, the maturity dates for Sports Authority's ABL revolver and senior secured term loan will remain May, 17, 2017 and November 16, 2017, respectively, and will not accelerate to February 2, 2016. Ratings affirmed: -- Corporate Family Rating at Caa1; -- Probability of Default Rating at Caa1-PD; -- $300 million senior secured term loan due 2017 at Caa1 (LGD 3) The ratings outlook was revised to stable from negative RATINGS RATIONALE The Sports Authority's Caa1 Corporate Family Rating reflects the company's high debt and leverage, niche product focus and continued weak operating performance. Lease-adjusted debt/EBITDAR (using a 5x multiple of rent) stood at 6.3x for the latest twelve month period ended May 2, 2015, and EBITA/Interest was well below 1.0x. The rating is supported by the company's well-recognized brand name, national footprint, and management initiatives to reduce costs and improve store efficiencies. Liquidity is expected to be adequate over the next twelve months, as balance sheet cash, cash flow and revolver availability are expected to be sufficient to cover cash flow needs during this timeframe. Management continues to implement its operational improvement plan, which includes cost savings initiatives and investments in the customer shopping experience through improved product merchandising and stock levels, more strategic store remodel/relocation and marketing plans, and e-commerce initiatives. However, when considering margin pressures stemming from a highly promotional retail environment and increased shipping costs related to higher e-commerce sales, these investments have exacerbated EBITDA declines. We expect EBITDA and debt leverage to modestly improve, but remain weak, over the next 12 months as the company anniversaries 2014's investment spending and begins to see some benefit from these initiatives. Should these initiatives not bear fruit over the next 12-18 months, refinancing its capital structure could be challenging. The Caa1 rating on the senior secured term loan reflects its junior position to the $650 million ABL, which has a first lien on the company's more liquid assets. The rating is also supported by the cushion provided by more junior claims in the capital structure, including $343 million of subordinated notes. The stable outlook reflects Moody's expectation that the company will continue to implement its operational improvement plans and cost control initiatives, and that reduced capital spending and disciplined inventory management will minimize cash burn in order to maintain adequate liquidity over the next twelve months. The ratings could be downgraded if the company does not make substantive progress in improving operating performance over the next twelve months, or if liquidity weakens for any reason. An inability to refinance its debt well ahead of maturities beginning in May 2017 could also lead to a ratings downgrade. Given the company's high balance sheet leverage and inconsistent track record of same store sales growth, an upgrade is unlikely in the near term. However, over the longer term, sustained revenue growth, profit improvement and de-leveraging along with maintaining adequate liquidity, successful refinancing of its full capital structure in particular, could lead to a ratings upgrade. Specifically, ratings could be upgraded if debt/EBITDA is sustained below 7x and EBITA/interest expense is sustained above 1.0x. The Sports Authority, Inc. is a full-line sporting goods retailer operating 470 stores in 41 states and Puerto Rico. Revenues approached $2.7 billion for the twelve months ended May 2, 2015. The company is owned by private equity firm Leonard Green & Partners, L.P. TOLEDO-LUCAS COUNTY: Fitch Affirms BB Rating on 2003 Revenue Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB' rating on the $64.735 million Toledo-Lucas County Port Authority, OH (Crocker Park Public Improvement Project) special assessment revenue bonds series 2003. The Rating Outlook is Stable. SECURITY The bonds are special limited obligations payable by the issuer from special assessments levied on the assessment property by the city of Westlake. A debt service reserve fund equal to maximum annual debt service (excluding the final maturity) is fully funded through a guaranteed investment contract. KEY RATING DRIVERS SINGLE-PAYOR RISK: Pledged special assessments are payable from a single payor on property comprising a small, highly concentrated geographic area. PROJECT CASH FLOWS STILL WEAK: Despite high occupancy rates, the project does not generate cash flow sufficient to cover mortgage payments. After a substantial improvement from 0.57x coverage in 2011 to 0.89x in 2012, coverage has declined to 0.8x in 2013 and 0.63x in 2014. PROJECT OBLIGATIONS CURRENT: The project generates enough revenue to cover property taxes and special assessments, although coverage of mortgage payments is insufficient. LIEN SUPERIOR TO MORTGAGE OBLIGATION: Special assessment payments, equal to at least annual debt service through final bond maturity regardless of the assessed value of property, are on parity with property taxes and are senior to the sizable mortgage payments. HIGH LEVERAGE: Fitch-estimated loan-to-value is a very high 1.71:1. This combined with the cash-flow shortfall underscores Fitch's concerns about the developer's continued willingness and ability to continue to make special assessment payments, although Fitch notes that coverage trends are generally positive. RATING SENSITIVITIES FAILURE TO PAY PROPERTY OBLIGATIONS: Failure to pay special assessments or the subordinate mortgage payments on time would cause a downgrade. CONTINUED COVERAGE EROSION: Continued lack of sum sufficient cash-flow coverage of mortgage payments could put further downward pressure on the rating. MORTGAGE WITH SPECIAL SERVICER: Placement of the mortgage with a special servicer would indicate severe stress, but could, ultimately, be a stabilizing factor at a lower rating level. LACK OF SUFFICIENT OR TIMELY INFORMATION: The inability to receive information pertinent to the rating of these obligations by Fitch on a timely basis could result in a change or withdrawal of the rating. CREDIT PROFILE SINGLE PAYOR RISK The bonds are secured by special assessments payable by a single payor, Crocker Park, LLC (the developer/owner), an affiliate of Robert L. Stark Enterprises. The special assessment property is within an established retail area, Crocker Park, in affluent Westlake, Ohio (rated 'AAA' by Fitch). The area has complementary retailers, office and residential units and retains a competitive position in the region. The assessment property is composed of the retail portion of Crocker Park with over 630,000 square feet of retail space anchored by several major retailers, in addition to office space and residential properties. MATURE PROJECT WITH HIGH OCCUPANCY RATES All phases of the development anticipated at the time of the bond financing have been completed. Occupancy rates recently have been quite strong, ranging from 92% to 100%. Development continues in areas adjacent to the assessment property. Construction of a new headquarters for American Greetings scheduled to open in 2016 is expected to result in the addition of 1,500 jobs and should further strengthen consumer demand at the mall. The development generates cash flow insufficient to support large mortgage payments, after payment of special assessments, despite the high occupancy rates. Mortgage coverage improved to 0.89x in 2012 and 0.8x in 2013 after sinking to 0.57x in 2011 from 0.75x in 2010; it declined back to 0.63x in 2014. However, the developer is current on mortgage payments. LIEN SUPERIOR TO MORTGAGE OBLIGATION The special assessments are on parity with real estate taxes and are senior to an outstanding mortgage on the property. Special assessments were authorized in aggregate maximum annual installments of $6 million for the term of the bonds and are levied annually in an amount sufficient to pay annual debt service. Fitch remains concerned about the current or any future owner's incentive to continue to make special assessment payments, given the high overall loan-to-value ratio of 1.71:1, using Fitch's conservative stressed value of the entire development. STRUCTURAL PROTECTIONS Fitch derives some comfort from the superiority of the lien to those of larger obligations; however, the weak coverage of the mortgage obligation introduces risk of payment disruption should the loan go into foreclosure. Fitch believes the presence of a master servicer (and the addition of a special servicer, if necessary), as part of the mortgage trust securitization may prove to be a stabilizing factor, should the trust have sufficient resources and choose to provide liquidity to bridge any payment interruption during a work-out. The 'BB' rating does not assume any such external support from the trust. TROCOM CONSTRUCTION: Court Denied SSI's Bid for Relief of Stay -------------------------------------------------------------- The Hon. Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York denied Soil Solutions, Inc.'s motion to vacate the automatic stay in the Chapter 11 cases of Trocom Construction Corp. SSI, a creditor, stated its motion must be granted because it has established cause for lifting the automatic stay and the Debtor's opposition is replete of factual inaccuracies and a misunderstanding of surety payment bond law. The Debtor, in its objection to the SSI motion, said the relief from stay is not warranted at this time, and SSI misstated the facts. As reported in the TCR on May 27, 2015, SSI requested for a relief from the automatic stay to continue to prosecute the state court actions it commenced against the Debtor. On Feb. 5, 2015, SSI commenced an action in the Supreme Court of the State of New York, County of New York, identified by index number 151215/2015, against the Debtor alleging a cause of action sounding in foreclosure of mechanic's lien and payment bond claims. Soil Solutions seeks an amount to be determined at trial, but believed to be in excess of $193,038. On Feb. 6, 2015, SSI commenced an action in the Supreme Court of the State of New York, County of New York, identified by index number 151285/2015, against the Debtor, alleging a cause of action sounding in foreclosure of mechanic's lien and payment bond claims. SSI seeks an amount to be determined at trial, but believed to be in excess of $322,816. According to SSI' counsel, Henry C. Chan, Esq., at Wilson & Chan, LLP, in New York, the amount of SSI' claims against the Debtor will be determined in the pending state court actions, allowing for a quicker resolution of the bankruptcy proceeding. About Trocom Construction Trocom Construction Corp. formed in 1969 by Salvatore Trovato. Trocom is in the heavy construction business. Its primary customer is the City of New York through its various agencies. The company has 75 employees, the majority of whom are members of various unions. Joseph Trovato is presently the president and holder of 100% of the voting shares of Trocom. Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case No. 15-42145) on May 7, 2015, in Brooklyn. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Cullen & Dykman, LLP, as its general bankruptcy counsel. The Debtor estimated $10 million to $50 million in assets and less than $10 million in debt. According to the docket, the Chapter 11 plan and disclosure statement are due Sept. 4, 2015. TROCOM CONSTRUCTION: Okayed to Pay Prepetition Employee Obligations ------------------------------------------------------------------- The Hon. Nancy Hershey Lord of the Bankruptcy Court for the Eastern District of New York authorized Trocom Construction Corp. (i) to pay certain prepetition employee obligations, and prepetition withholding obligations; and (ii) to continue performing under the collective bargaining agreements with the unions to ensure that the employee benefit programs are honored. Specifically, the Debtor is authorized to: 1. pay prepetition obligations relating to its employees including, but not limited to, the wages, to the extent such wages do not exceed $12,475 per employee, and to remit all withholding obligations and payroll taxes to the appropriate third parties as and when such obligations come due; 2. withhold Union dues from the employees' paychecks and remit same to the unions in the ordinary course of business; and 3. remit monthly payment of the Union Fringes to the unions under the terms of the CBAs in the ordinary course of business. About Trocom Construction Trocom Construction Corp. formed in 1969 by Salvatore Trovato. Trocom is in the heavy construction business. Its primary customer is the City of New York through its various agencies. The company has 75 employees, the majority of whom are members of various unions. Joseph Trovato is presently the president and holder of 100% of the voting shares of Trocom. Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case No. 15-42145) on May 7, 2015, in Brooklyn. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Cullen & Dykman, LLP, as its general bankruptcy counsel. The Debtor estimated $10 million to $50 million in assets and less than $10 million in debt. According to the docket, the Chapter 11 plan and disclosure statement are due Sept. 4, 2015. ULTRA PETROLEUM: Moody's Affirms Ba3 CFR & Alters Outlook to Stable ------------------------------------------------------------------- Moody's Investors Service changed Ultra Petroleum Corporation's outlook to stable from positive and affirmed Ultra's Ba3 Corporate Family Rating (CFR) and the B2 ratings on its two public notes issues. The move to a stable outlook reflects Moody's expectations that a continuation of low natural gas prices will limit the improvements in cash margins and retained cash flow contemplated when Ultra acquired its Pinedale Field assets. The following summarizes the ratings: Ultra Petroleum Corporation Ratings affirmed Corporate Family Rating -- Ba3 Probability of Default Rating -- Ba3-PD $450 million sr unsec notes due 2018 -- B2 $850 million sr unsec notes due 2024 -- B2 Speculative Grade Liquidity Rating -- SGL-3 Outlook, changed to Stable from Positive RATINGS RATIONALE The stable outlook reflects Moody's expectation the company will grow its natural gas production in 2015, but will not meaningfully improve its cash flow and leverage metrics to a level supportive of a higher rating. Natural gas prices have remained lower than Ultra anticipated when it debt-financed the acquisition of Pinedale Field assets in September 2014, leaving the company with higher than anticipated leverage and lower margins and cash flow. Ultra has indicated it is considering small asset sales that would modestly improve its metrics, but Moody's does not expect its credit metrics to support a higher CFR in the near-term. The 2013 acreage acquisition in the oil-rich area of the Uinta Basin and the add-on extensions of natural gas-dominated properties in the Pinedale Anticline complemented Ultra's experience and expertise in developing its properties in the Green River Basin, as the two areas are geologically similar. The repositioning of Ultra's portfolio to higher-returning assets in the Pinedale Anticline over its lower-returning assets in the Marcellus Shale should improve the company's cash margins and the ability to generate cash flow as these properties are further developed. Ultra's Ba3 CFR is supported by its long-term track record of production and PD reserves growth on a competitive cost basis and through moderate financial policies. Ultra has strong reserve and production scale for a Ba3-rated company. The company is an experienced operator with a highly competitive cost structure. The rating is restrained by Ultra's high natural gas concentration in its properties (over 90% of 2014 production was natural gas) resulting in weak cash margins in a low natural gas price environment and its high leverage metrics stemming from debt-funded acquisitions of properties in the Uinta and Green River Basins. The ratings could be upgraded if Ultra improved its cash margins while maintaining its competitive cost structure such that retained cash flow to debt approached 25% and debt to PD reserves remained below $8.00/BOE. A ratings downgrade could be triggered if Ultra were to significantly increase its leverage metrics through more debt-funded acquisitions or through a more aggressive capital spending program. Retained cash flow to debt sustained below 15% and debt to PD rising above $12.00/BOE could pressure the ratings. Ultra Petroleum Corporation is a publicly traded independent exploration and production company headquartered in Houston, Texas, engaged in domestic natural gas and crude oil exploration, development and production. Over 90% of the company's 2014 production consisted of natural gas. Its operations focus on developing natural gas assets in the Green River basin of Wyoming (Pinedale Anticline and Jonah Field), but it also has a drilling program in the Uinta Basin where it owns crude oil assets. UTSTARCOM HOLDINGS: Files Annual Report of iTV Media ---------------------------------------------------- UTStarcom Holdings Corp. has amended its annual report on Form 20-F for the fiscal year ended Dec. 31, 2014, to include the consolidated financial statements of iTV Media Inc. for the fiscal year ended Dec. 31, 2014, and 2013. iTV Media reported a net loss of RMB 95.1 million on RMB 45.8 million of revenues for the year ended Dec. 31, 2014, compared to a net loss of RMB 112.6 million on RMB 12.3 million of revenues for the year ended Dec. 31, 2013. As of Dec. 31, 2014, iTV Media had RMB 90.4 million in total assets, RMB 295.5 million in total liabilities, RMB 156.5 million in total mandatorily redeemable convertible preferred shares and a RMB 361.6 million total shareholders' deficit. A full-text copy of the ITV Media's Annual Report is available at: http://is.gd/heyqDh About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. UTStarcom reported a net loss of $30.3 million in 2014, a net loss of $22.7 million in 2013 and a net loss of $34.4 million in 2012. VERSO PAPER: S&P Raises Corp. Credit Rating to 'B-', Outlook Stable ------------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Verso Paper Holdings LLC and its parent Verso Paper Finance Holdings LLC to 'B-' from 'SD'. At the same time, S&P raised its ratings on Verso's debt obligations as: -- S&P upgraded Verso's asset based lending facility to 'B+' from 'CCC'. The '1' recovery rating reflects S&P's expectation for very high (90% to 100%) recovery in the event of a payment default. -- S&P upgraded Verso's senior secured debt to 'B-' from 'CC'. The '4' recovery rating reflects S&P's expectation for average (30% to 50%, lower half of the range) recovery. -- S&P upgraded Verso's junior debt securities to 'CCC' from 'D'. The '6' recovery rating reflects S&P's expectation for negligible (0% to 10%) recovery. S&P also lowered its corporate credit rating on subsidiary NewPage Corp. (now known as NewPage Holdings LLC) to 'B-' from 'B+' and subsequently withdrew the corporate credit rating on this core subsidiary. At the same time S&P lowered its issue-level rating on the NewPage senior secured term loan to 'B-' from 'B+'. The '3' recovery rating reflects S&P's expectation for meaningful recovery (50% to 70%, at the upper end of the range) in the event of a payment default. "The stable outlook reflects our view that Verso will remain highly leveraged over the next 12 months, with leverage at or above 8x EBITDA," said Standard & Poor's credit analyst Jim Fielding. "The stable outlook also assumes that the integration of the NewPage acquisition proceeds relatively smoothly, with no significant unplanned plant outages or other disruptions that could negatively affect cash flows." S&P would raise its ratings on Verso if the company realizes management's expectation for $175 million in synergies more quickly than S&P currently anticipates, causing leverage to drop below 8x EBITDA. An upgrade would also be predicated on consistently positive discretionary cash flow and improved liquidity, including at the parent level. S&P would lower its rating if significant cash flow deficits occur over the next year, causing S&P to view liquidity to be "less than adequate." This could occur as the result of a lengthy unplanned plant outage or if the U.S. economy slips into recession. The latter scenario would likely cause demand for Verso's coated papers to drop as customers in the publishing, advertising, and other sectors contract. VICTORY ENERGY: Settles with Lucas, Louise Rogers and Earthstone ---------------------------------------------------------------- Victory Energy Corporation separately entered into settlement agreement with Lucas Energy, Inc.; Louise H. Rogers; and Earthstone Operating, LLC, Earthstone Energy, Inc., Oak Valley Resources, LLC, Oak Valley Operating LLC and Sabine River Energy, LLC. The material terms of the Lucas Settlement Agreement include the following: * Lucas Energy transferred to Victory certain proved producing and proved undeveloped properties in the Eagle Ford area of south Texas, including a 3.27581% working interest in the Dingo Unit and a 1.481330% working interest in the Platypus Unit operated by Penn Virginia; * Victory retained its interest in the five Penn Virginia well bores previously assigned by Lucas Energy to Victory, including the rights to the cumulative net revenues since all wells started producing; * Lucas is required to issue to Victory approximately 1.1 million shares of its common stock; * Victory assigned to Earthstone Energy/Oak Valley Resources or its affiliate two Karnes County well-bores (the Boggs Unit No. 1H and the Boggs Unit No. 2H); * Victory forgave the $600,000 of debt currently owned to Victory by Lucas Energy. * Oak Valley is obligated to return a net aggregate of $54,020 in pre-drilling costs previously paid to Oak Valley to Lucas Energy; * Lucas Energy and Victory released each other from all claims that each party had against the other (except for claims arising under the Settlement Agreement itself) and simultaneously also entered into mutual releases with Oak Valley and Lucas Energy's senior lender; and * Victory is obligated to pay Mr. Rogers, Lucas Energy's senior lender, $253,750 on or before July 15, 2015, and the assignment relating to the Additional Property and the Lucas Common Shares are being held in escrow until such payment is made in full. "The conclusion of these settlement agreements effectively return to Victory a near equivalent value of real property and stock in exchange for the capital that had been invested into the proposed business combination. We are satisfied this settlement provides an adequate trade for the benefit of our shareholders. We will be adding the near $1.7 million dollars of PDP and PUD reserves (June NYMEX Strip), associated with the Penn Virginia operated wells, to our mid-year company reserve report. We wish the Lucas Energy team all the best with their future endeavors, as we continue to move forward with our producing property acquisition strategy," said Kenny Hill, chief executive officer of Victory Energy. About Victory Energy Austin, Texas-based Victory Energy Corporation is engaged in the exploration, acquisition, development and exploitation of domestic oil and gas properties. Current operations are primarily located onshore in Texas, New Mexico and Oklahoma. Victory Energy reported a net loss of $4.22 million in 2014 following a net loss of $2.11 million in 2013. As of March 31, 2015, Victory Energy had $2.40 million in total assets, $3.50 million in total liabilities and a $1.1 million total stockholders' deficit. Weaver and Tidwell, L.L.P., in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has experienced recurring losses since its inception and has an accumulated deficit, which raise substantial doubt regarding the Company's ability to continue as a going concern. VIGGLE INC: Appoints General Manager & Product Development Head --------------------------------------------------------------- Viggle Inc. has appointed Kyle Brink, former SVP product development, as general manager and Mario Cruz, co-founder of Viggle's Choose Digital, as head of product development. Along with CEO and Board Chairman Robert F.X. Sillerman, the Company is completing the transition put in place in January 2015 after expanding the roles of John Small, CFO and Kyle Brink, former SVP of Product Development. Viggle also announced the resignation of Greg Consiglio as president and COO, effective close of business on June 30. The Nominating Committee of the Company's Board of Directors intends to nominate Mr. Consiglio to become a member of the Board at the Company's next annual stockholders meeting. About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. Viggle reported a net loss of $68.4 million on $18 million of revenues for the year ended June 30, 2014, compared with a net loss of $91.4 million on $13.9 million of revenues for the year ended June 30, 2013. The Company's balance sheet at March 31, 2015, showed $70.9 million in total assets, $54.6 million in total liabilities, $11.4 million in series C convertible redeemable preferred stock, and stockholders' equity of $4.88 million. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2014. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2014, has a deficiency in working capital that raises substantial doubt about its ability to continue as a going concern. VIGGLE INC: Closes $4.2 Million Underwritten Sale of Common Stock ----------------------------------------------------------------- Viggle Inc. has closed an underwritten sale of 2,048,780 shares of its common stock at $2.05 per share to Wolverine Asset Management. Gross proceeds from the sale are approximately $4.2 million. Viggle intends to use the proceeds from the offering to fund general corporate purposes. Robert F.X. Sillerman, the Company's executive chairman and chief executive officer, commented on the transaction, "We are very excited to have completed this financing with one of the preeminent small-cap investors in the market today." Ladenburg Thalmann & Co. Inc. a subsidiary of Ladenburg Thalmann Financial Services Inc. acted as the sole bookrunner in connection with the offering. H.C. Wainwright & Co. and Chardan Capital Markets, LLC, acted as co-managers for the offering. About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. Viggle reported a net loss of $68.4 million on $18 million of revenues for the year ended June 30, 2014, compared with a net loss of $91.4 million on $13.9 million of revenues for the year ended June 30, 2013. The Company's balance sheet at March 31, 2015, showed $70.9 million in total assets, $54.6 million in total liabilities, $11.4 million in series C convertible redeemable preferred stock, and stockholders' equity of $4.88 million. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2014. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2014, has a deficiency in working capital that raises substantial doubt about its ability to continue as a going concern. WAYNE COUNTY, MI: State Finds Probable Financial Stress ------------------------------------------------------- The Associated Press reported that a state board that examined a preliminary review of Wayne County's finances said the entity is operating under probable financial stress. According to the AP report, the state's most populous county is the latest government entity whose fiscal future could be determined by the state, as Gov. Rick Snyder is mandated by law to appoint a review team to go over the county's finances. * * * The Troubled Company Reporter, on June 26, 2015, reported that Moody's Investors Services has affirmed the Ba3 rating on the general obligation limited tax (GOLT) debt of Wayne County, MI. The county has a total of $654 million of long-term GOLT debt outstanding, of which $336 million is rated by Moody's. An additional $144 million of short-term GOLT delinquent tax anticipation notes (DTANs) are outstanding, with a sale for an additional $186.9 million of short-term DTANs. The TCR, on March 16, 2015, reported that Fitch Ratings has downgraded the ratings for the following Wayne County, Michigan bonds: -- $186.3 million limited tax general obligation (LTGO) bonds issued by Wayne County to 'B' from 'BB-'; -- $51.3 million building authority (stadium) refunding bonds, series 2012 (Wayne County LTGO) issued by Detroit/Wayne County Stadium Authority to 'B' from 'BB-'; -- $203.5 million building authority bonds issued by Wayne County Building Authority to 'B' from 'BB-'; -- Wayne County unlimited tax general obligation (ULTGO) (implied) to 'B' from 'BB'. On Feb. 10, 2015, the TCR reported that Moody's Investors Services has downgraded to Ba3 from Baa3 the rating on the general obligation limited tax (GOLT) debt of Wayne County, MI. The county has a total of $695 million of long-term GOLT debt outstanding, of which $336 million is rated by Moody's. An additional $302 million of short-term GOLT delinquent tax anticipation notes are outstanding. The outlook remains negative. The TCR, on Feb. 9, 2015, also reported that Fitch Ratings has placed the following Wayne County ratings on Rating Watch Negative: -- $190.9 million limited tax general obligation (LTGO) bonds issued by Wayne County 'BB-'; -- $54.9 million building authority (stadium) refunding bonds, series 2012 (Wayne County LTGO) issued by Detroit/Wayne County Stadium Authority 'BB-'; -- $207.2 million building authority bonds issued by Wayne County Building Authority 'BB-'; -- Wayne County unlimited tax general obligation (ULTGO) (implied) 'BB'. WET SEAL: Court Waives Requirement Relating to Fee Examiner ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware waived the requirements of fee examiner order in the Chapter 11 cases of Seal123, Inc., et al. The Debtors requested that the Court waive requirements of the general order regarding fee examiners in Chapter 11 cases with combined assets and liabilities in excess of $100,000. About Wet Seal The Wet Seal, Inc., et al., are retailers selling fashion apparel and accessory items designed for female customers aged 13 to 24 years old. The Company, and three affiliates -- The Wet Seal Retail, Inc., Wet Seal Catalog, Inc., and Wet Seal GC, LLC -- filed for separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 15-10081 to 15-10084) on Jan. 15, 2015. 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. The Committee retained Pachulski Stang Ziehl & Jones LLP as its counsel and Province Inc. as its financial advisor. The Wet Seal, Inc., changed its name to "Seal123, Inc." on April 17, 2015, in accordance with the asset purchase agreement with Mador Lending, LLC, an affiliate of Versa Capital Management, LLC, as buyer. WHATSWHAT INC: Files for Bankruptcy; First Creditors Meeting July 7 ------------------------------------------------------------------- A bankruptcy order was made against Whatswhat Inc. on June 16, 2015, by the Superior Court of Justice and that the first meeting of creditors will be held on July 7, 2015, at 11:00 a.m., at the office of the Trustee; 4646 Dufferin st., Suite 6 in Toronto, Ontario, and that to be eligible to vote, creditors must file with the Trustee, prior to the meeting, proofs of claim and, where necessary, proxies. The trustee can be reached at: Dodick Landau 4646 Dufferin St., Suite 6 Toronto, On M3H 5S4 Tel: 416-645-0542 Fax: 416-649-7725 Email: stephanie@dodicklandau.ca WPCS INTERNATIONAL: Issues 157,202 Common Shares ------------------------------------------------ WPCS International Incorporated issued 157,202 shares of its common stock, par value $0.0001 per share from June 23, 2015, through June 30, 2015, according to a document filed with the Securities and Exchange Commission. The issuances on June 25, 2015, resulted in an increase in the number of shares of Common Stock outstanding by more than 5% compared to the number of shares of Common Stock reported outstanding in the Current Report on Form 8-K filed by the Company with the SEC on June 23, 2015. The Company has issued a total of 776,471 shares of Common Stock to holders of its Series F and F-1 and Series G-1 Convertible Preferred Stock upon the conversion of shares of Series F and F-1 and Series G-1Convertible Preferred Stock. The shares of Common Stock issued upon the conversion of shares of Series F and F-1 and Series G-1 Convertible Preferred Stock were issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act of 1933. As of June 30, 2015, the Company has 1,408,887 shares of Common Stock outstanding. About WPCS International Incorporated WPCS -- http://www.wpcs.com/-- operates in two business segments including: (1) providing communications infrastructure contracting services to the public services, healthcare, energy and corporate enterprise markets worldwide; and (2) developing a Bitcoin trading platform. WPCS International incurred a net loss attributable to common shareholders of $11.2 million for the year ended April 30, 2014, as compared with a net loss attributable to common shareholders of $6.91 million for the year ended April 30, 2013. As of Jan. 31, 2015, the Company had $14.8 million in total assets, $14.8 million in total liabilities and a $36,000 total deficit. Marcum LLP, in New York, NY, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2014. The independent auditing firm noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. WPCS INTERNATIONAL: Settles New York Securities Lawsuit ------------------------------------------------------- WPCS International Incorporated and a shareholder plaintiff entered into a settlement with the two remaining defendants in a case pending in the United States District Court for the Southern District of New York to resolve claims under Section 16 of the Securities Exchange Act of 1934. Under the terms of the Settlement, the Defendants have agreed to the following: (1) payment of $315,000 for the plaintiff's attorney's fees; (2) forgiveness of $400,000 of principal amount of debt owed by the Company to the Defendants; (3) an exchange of the remaining $405,000 of debt owed by the Company to the Defendants into shares of a yet to be designated Series H Convertible Preferred Stock, par value $0.0001 per share, of the Company; (4) waiver of certain conditions preventing the Company from paying accrued dividends on its Series F-1 Convertible Preferred Stock and Series G-1 Convertible Preferred Stock in shares of the Company's common stock; and (5) relinquishment of all voting rights the Defendants have in all shares of the Company's preferred stock now held or hereinafter acquired. The Settlement was entered into solely by way of compromise and settlement and is not in any way an admission of liability by the Defendants. About WPCS International Incorporated WPCS -- http://www.wpcs.com/-- operates in two business segments including: (1) providing communications infrastructure contracting services to the public services, healthcare, energy and corporate enterprise markets worldwide; and (2) developing a Bitcoin trading platform. WPCS International incurred a net loss attributable to common shareholders of $11.2 million for the year ended April 30, 2014, as compared with a net loss attributable to common shareholders of $6.91 million for the year ended April 30, 2013. As of Jan. 31, 2015, the Company had $14.8 million in total assets, $14.8 million in total liabilities and a $36,000 total deficit. Marcum LLP, in New York, NY, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2014. The independent auditing firm noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. [^] BOOK REVIEW: Risk, Uncertainty and Profit --------------------------------------------- Author: Frank H. Knight Publisher: Beard Books Softcover: 381 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981262/internetbankrupt The tenets Frank H. Knight sets out in this, his first book, have become an integral part of modern economic theory. Still readable today, it was included as a classic in the 1998 Forbes reading list. The book grew out of Knight's 1917 Cornell University doctoral thesis, which took second prize in an essay contest that year sponsored by Hart, Schaffner and Marx. In it, he examined the relationship between knowledge on the part of entrepreneurs and changes in the economy. He, quite famously, distinguished between two types of change, risk and uncertainty, defining risk as randomness with knowable probabilities and uncertainty as randomness with unknowable probabilities. Risk, he said, arises from repeated changes for which probabilities can be calculated and insured against, such as the risk of fire. Uncertainty arises from unpredictable changes in an economy, such as resources, preferences, and knowledge, changes that cannot be insured against. Uncertainty, he said "is one of the fundamental facts of life." One of the larger issues of Knight's time was how the entrepreneur, the central figure in a free enterprise system, earns profits in the face of competition. It was thought that competition would reduce profits to zero across a sector because any profits would attract more entrepreneurs into the sector and increase supply, which would drive prices down, resulting in competitive equilibrium and zero profit. Knight argued that uncertainty itself may allow some entrepreneurs to earn profits despite this equilibrium. Entrepreneurs, he said, are forced to guess at their expected total receipts. They cannot foresee the number of products they will sell because of the unpredictability of consumer preferences. Still, they must purchase product inputs, so they base these purchases on the number of products they guess they will sell. Finally, they have to guess the price at which their products will sell. These factors are all uncertain and impossible to know. Profits are earned when uncertainty yields higher total receipts than forecasted total receipts. Thus, Knight postulated, profits are merely due to luck. Such entrepreneurs who "get lucky" will try to reproduce their success, but will be unable to because their luck will eventually turn. At the time, some theorists were saying that when this luck runs out, entrepreneurs will then rely on and substitute improved decision making and management for their original entrepreneurship, and the profits will return. Knight saw entrepreneurs as poor managers, however, who will in time fail against new and lucky entrepreneurs. He concluded that economic change is a result of this constant interplay between new entrepreneurial action and existing businesses hedging against uncertainty by improving their internal organization. Frank H. Knight has been called "among the most broad-ranging and influential economists of the twentieth century" and "one of the most eclectic economists and perhaps the deepest thinker and scholar American economics has produced." He stands among the giants of American economists that include Schumpeter and Viner. His students included Nobel Laureates Milton Friedman, George Stigler and James Buchanan, as well as Paul Samuelson. At the University of Chicago, Knight specialized in the history of economic thought. He revolutionized the economics department there, becoming one the leaders of what has become known as the Chicago School of Economics. Under his tutelage and guidance, the University of Chicago became the bulwark against the more interventionist and anti-market approaches followed elsewhere in American economic thought. He died in 1972. ********* 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 ***