/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/160205.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, February 5, 2016, Vol. 20, No. 36 Headlines 88 HAMILTON AVENUE: Case Summary & 30 Largest Unsecured Creditors ACADIA HEALTHCARE: S&P Assigns 'B' Rating on Proposed $390MM Notes ACCIPITER COMMUNICATIONS: Disclosures Hearing Slated for Feb. 9 ACCIPITER COMMUNICATIONS: U.S. Opposes Plan Disclosures ALERE INC: S&P Puts 'B' CCR on CreditWatch Positive ALLIANCE ONE: Axar Capital, et al., Report 9.9% Stake ALLIED NEVADA: Order Denying Brian Tuttle's Appeal Vacated ALLY FINANCIAL: Reports $1.3 Billion Net Income for 2015 ALPHA NATURAL: Court OKs Key Employee Incentive Plan for 2016 AMBAC FINANCIAL: JPM to Pay $995M to Settle RMBS-Related Claims AMERICAN AXLE: Barrow Hanley Files Schedule 13G with SEC AMERICAN NATURAL ENERGY: Chapter 11 Plan Gives Control to Hillair AMERICAN NATURAL ENERGY: Committee Balks at Disclosure Statement AMERICAN NATURAL ENERGY: Must Submit Amended Disclosures by Feb. 15 ARCH COAL: Creditors Committee Taps Kramer Levin as Counsel ARMSTRONG WORLD: Moody's Affirms 'B1' Corporate Family Rating ARMSTRONG WORLD: S&P Affirms 'BB' Rating, Outlook Stable AROWANA INC: Going Concern Doubt amid Need to Raise More Capital ATLANTIC CITY: Emergency Manager Defects for Consulting Job AXION INT'L: Asks Court to Allow Kronstadt to Credit Bid AXION INT'L: Community Bank Seeks Adequate Protection Payments AXION INT'L: Proposes March 14 Bid Deadline, March 18 Auction AXION INT'L: To Halt Filing of Periodic Reports to SEC AXION INT'L: Unsecured Creditors Challenge Kronstadt Lien BAYTEX ENERGY: Moody's Cuts CFR to Caa1, Outlook Neg. BELLATRIX EXPLORATION: Moody's Cuts Corp. Family Rating to Caa1 BERNARD L. MADOFF: Court Says HSBC Off Hook in Asset Freeze Bout BLACK ELK ENERGY: Files Decommissioning Plan C & A INVESTMENTS: Case Summary & 14 Largest Unsecured Creditors CALIFORNIA HISPANIC: Case Summary & 20 Top Unsecured Creditors CANTOR COMMERCIAL 2016-C3: Fitch Rates Cl. E Certificate BB+ CD COMMERCIAL 2007-CD4: Fitch Lowers Rating on 10 Certs to 'Dsf' CENTRIC HEALTH: S&P Affirms 'B-' CCR, Outlook Stable CIRCUIT CITY: Settles with Technicolor and Others in CRT MDL CLIFFS NATURAL: Depository Shares Delisted From NYSE CLIFFS NATURAL: Moody's Cuts Corporate Family Rating to 'Ca' COLT DEFENSE: Terminates Registration of Securities With SEC CONSTELLATION ENTERPRISES: S&P Lowers Corp. Credit Rating to 'SD' CONSTELLATION ENTERPRISES: S&P Raises CCR to 'CCC-', Outlook Dev. CONTINENTAL CASUALTY: Metal Co. Says $33M Row Best Left for Jury CROWN HOLDINGS: Moody's Affirms Ba2 Corporate Family Rating CST BRANDS: S&P Puts 'BB' CCR on CreditWatch Negative DANIER LEATHER: Files Notice of Intention Under BIA DENBURY RESOURCES: Moody's Cuts Corporate Family Rating to Caa2 DIFFERENTIAL BRANDS: Peter Kim Reports 7.9% Stake as of Jan. 28 DONMETZ HOME: Case Summary & 11 Largest Unsecured Creditors EDENOR SA: ENRE Ordered to Perform Tariff Schedules Adjustment EGPI FIRECREEK: Suspending Filing of Reports with SEC EMKEY COMPANIES: Case Summary & 20 Largest Unsecured Creditors ENABLE MIDSTREAM: S&P Lowers CCR to 'BB+', Outlook Negative ENERGY SERVICES: S&P Lowers CCR to 'B-', Outlook Stable EP ENERGY: Moody's Cuts CFR to 'B3', Negative Outlook EXCITE MEDICAL: Court Denies Bid to Freeze Musallam, et al. Assets FELD LIMITED: Case Summary & 20 Largest Unsecured Creditors FOURTH QUARTER: MetLife Opposes Confirmation of Sale-Based Plan FOURTH QUARTER: Plan Confirmation Underway; DIP Facility Extended FOURTH QUARTER: Plan Has Requisite Acceptances to Be Confirmed GREEN MOUNTAIN: Crimson Allowed to Pursue Charging Order HAGGEN HOLDINGS: Seeks Approval of Albertson's Settlement HAGGEN HOLDINGS: Seeks to Sell Puyallup Store Pharmaceutical Assets HORSEHEAD HOLDING: S&P Lowers CCR to 'D' on Ch. 11 Filing IMH FINANCIAL: To Continue Selling Non-Performing Assets IMMACULATA UNIVERSITY: S&P Affirms 'BB+' Rating, Outlook Negative INC RESEARCH: S&P Assigns 'BB' Corp. Credit Rating IPC CORP: S&P Assigns 'B' Rating on $125MM 1st Lien Notes JHK INVESTMENTS: Has to Obtain Plan Confirmation by March 31 KALOBIOS PHARMACEUTICALS: Assures Bonuses Won't Go to Shkreli KEMET CORP: Incurs $8.60 Million Net Loss in Third Quarter KU6 MEDIA: Shanda Interactive Holds 69.9% of Ordinary Shares KU6 MEDIA: To Consider "Going Private" Proposal LAGO RESORT: S&P Assigns 'B-' CCR, Outlook Stable LAS AMERICAS: Plan Disclosures Hearing Continued to May 20 MAGNUM HUNTER: Files Amended Bankruptcy Rule 2015.3 Report MALIBU LIGHTING: Deadline to Remove Suits Extended to May 4, 2016 MASSILLON, OH: Moody’s Affirms 'Ba1' GOLT Debt Rating MAYHEW & ASSOCIATES: In Bankruptcy; Creditors Meeting Feb. 12 MEG ENERGY: Moody's Cuts Corporate Family Rating to Caa2 MIDSTATES PETROLEUM: R/C IV Eagle Reports 21.1% Equity Stake NATROL INC: Release of $20-Mil. Plan Reserves Approved NEW GOLD: S&P Lowers CCR to 'B+' on Weak Cash Flow Outlook NEWBURY COMMON: 9 Additional Affiliates' Case Summary NEWSTAR FINANCIAL: S&P Revises Outlook to Neg. & Affirms 'BB-' ICR NNN MET CENTER: Court OKs Glast Phillips as Transactional Counsel NORTHERN BLIZZARD: Moody's Cuts Corporate Family Rating to B2 OAKS OF PRAIRIE: Case Summary & 18 Largest Unsecured Creditors OSAGE EXPLORATION: Case Summary & 20 Largest Unsecured Creditors OSAGE EXPLORATION: Files Voluntary Chapter 11 Bankruptcy Petition PARAMOUNT RESOURCES: Moody's Cuts Corporate Family Rating to Caa2 PATERSON CHARTER: S&P Affirms BB+ Rating on Bonds, Outlook Neg. PEREGRINE MIDSTREAM: Files Voluntary Ch.11 Bankruptcy Petition PREMIER BANK: Atty Pleads Not Guilty to Embezzlement as Trustee PRODUCTION RESOURCE: S&P Lowers CCR to 'CCC-', Outlook Negative QUANTUM CORP: Eric Singer Reports 9.9% Stake as of Jan. 29 QUANTUM FUEL: $471,410 Interest Payment to Samsung Heavy Deferred RAIN CII: Moody's Cuts Corporate Family Rating to 'B3' RCS CAPITAL: Files Joint Plan of Reorganization RCS CAPITAL: Obtains Commitment for $100-Mil. DIP Financing RCS CAPITAL: Seeks Leave to File Plan Without Disclosure Statement RCS CAPITAL: Seeks to Assume Restructuring Support Agreement RELATIVITY FASHION: Hires Houlihan Lokey as Financial Advisor RETROPHIN INC: Judge Says Shkreli Emails to Atty. Not Privileged ROBIN GRATHWOL: 4th Cir. Affirms Dismissal of 3 Suits RONA INC: S&P Puts 'BB+' CCR on CreditWatch Positive SAMUEL E. WYLY: Denies Fraud as $2.2B Tax Trial Comes to a Close SAWYER WOOD: Case Summary & 20 Largest Unsecured Creditors SEABOARD REALTY: Looks for Six-Month Timeout With Creditors SEVEN GENERATIONS: Moody's Confirms B1 Corporate Family Rating SFX ENTERTAINMENT: Moody’s Affirms Ca Corporate Family Rating SFX ENTERTAINMENT: S&P Lowers CCR to 'D' on Ch. 11 Filing SIGA TECHNOLOGIES: Shareholder Blasts Plan Over Creditor Treatment SOUTHERN REGIONAL HEALTH: $13.6-Mil. Borrowing Increase Approved SPRINT CORP: S&P Lowers CCR to 'B' on Cash Flow Challenges SUN BANCORP: Reports Fourth Quarter Net Income of $1.45 Million SUNCOKE ENERGY: Moody's Cuts Corporate Family Rating to 'B2' TCF FINANCIAL: Fitch Affirms 'B' Preferred Stock Rating THERAPEUTICSMD INC: BNY Mellon Reports 6.5% Stake as of Dec. 31 THINKSTREAM INC: SSG Acted as Investment Adviser in Asset Sale TITAN GROUP: Ontario Court Sets April 15 Claims Bar Date TORQUED UP: Cougar-Led Sale Process Approved TORQUED-UP ENERGY: Seeks to Grant Replacement Liens to Amegy Bank TORQUED-UP ENERGY: Seyfarth Okayed to Negotiate Sale Transactions TREND COMPANIES: Case Summary & 20 Largest Unsecured Creditors TRI STATE TRUCKING: Adds IRS and CAT Financial to Creditors List TRI STATE TRUCKING: Can Employ Guthrie and Co. as Accountants TRI STATE TRUCKING: Panel Okayed to Retain Cole Shotz as Counsel TRUMP ENTERTAINMENT: Experts Say CBA Ruling Is a Blow to Labor VERSO CORP: Gets Nod to Tap $550 Million in Bankruptcy Financing VIGGLE INC: Secures $1.5 Million Financing From Sillerman VIVID SEATS: Moody's Assigns 'B3' Corporate Family Rating XINERGY LTD: Chapter 11 Plan Confirmed by Judge ZEST HOLDINGS: S&P Assigns 'B' Rating on $50MM 1st Lien Loan [*] 4th Circuit Says Legal Fees Trumped by $1 Million Tax Claim [*] 9th Circ. Says Absolute Priority Applies to All Chapter 11s [*] Bankruptcy Filings Drop 10% in Calendar Year 2015 [*] Fitch: Stronger Recoveries Amid Industrial Bankruptcies [*] Hon. D. Michael Lynn Joins Shannon Gracey as Senior Counsel [*] LSI Increases to 7.9% in January 2016, Moody's Says [*] S&P Takes Actions on 20 Investment-Grade Exploration Companies [^] BOOK REVIEW: Landmarks in Medicine - Laity Lectures ********* 88 HAMILTON AVENUE: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: 88 Hamilton Avenue Associates, LLC 1 Atlantic St. Stamford, CT 06901 Related Case: The Debtor is an affiliate of Newbury Common Associates, LLC which filed for bankruptcy protection on Dec. 13, 2015, Case No. 15-12507. Case No.: 16-10330 Chapter 11 Petition Date: February 4, 2016 Court: United States Bankruptcy Court District of Delaware (Delaware) Debtor's Counsel: Robert S. Brady, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax: 302-571-1253 Email: rbrady@ycst.com Debtor's BEILINSON ADVISORY GROUP Restructuring Attn: Marc Beilinson, Managing Partner Advisor: 11111 Santa Monica Los Angeles, CA 90025 Tel: (310) 990-2990 E-mail: mbeilinson@beilinsonadvisorygroup.com Debtor's ANCHIN, BLOCK & ANCHIN LLP Forensic Accounting Services Provider: Independent SMITH, KATZENSTEIN & JENKINS LLP Directors' Counsel: Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The petition was signed by Marc Beilinson, chief restructuring officer. List of Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SSC, Inc. Trade Debts $250,518 P.O. Box 135 Battleboro, VT 05302 SPAGS NE LLC dba Trade Debts $147,389 Lionheart Maintenance Tri-Star Services Inc. Trade Debts $133,790 Berkowitz, Trager & Trager, LLC Professional $126,633 services Propark Inc. Trade Debts $94,008 IMCS, LLC Professional $93,000 services CBRE, Inc. Professional $56,231 services Diserio, Martin, O'Connor Professional $36,730 & Castiglioni LLP services Jonathan Nehmer + Assoc., Inc. Professional $30,931 services Drivers Unlimited Inc. Trade Debts $29,954 City of Stamford Taxes $28,985 Stamford WPCA Trade Debts $29,733 Kencal Maintenance Corporation Trade Debts $27,961 Kravet Realty, LLC Professional $26,126 services Karps True Value Hardware Trade Debts $23,125 Redniss & Mead, Inc. Professional $22,353 services ASD Construction, LLC Trade Debts $22,328 My Slidelines, LLC Trade Debts $20,757 Carpet City Trade Debts $20,707 Heller And Johnsen Professional $19,709 services One Solution Services, LLC Trade Debts $19,091 Great Northern Elevator Co. LLC Trade Debts $16,803 City Carting & Recycling Trade Debts $16,391 American Furniture Rental Trade Debts $11,626 Connecticut Materials Trade Debts $11,224 Testing Lab, Inc. Sky View Buildings, LLC Trade Vendors $11,176 Pelliccione & Assoc., LLC Professional $9,985 services Grosso Custom Builders Trade Vendors $9,622 KM Communications Services Trade Vendors $9,267 Carmody Torrance Sandak Professional $9,033 Hennessey services ACADIA HEALTHCARE: S&P Assigns 'B' Rating on Proposed $390MM Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level and '5' recovery (10% to 30%, at the lower end of the range) ratings to U.S.-based behavioral health provider Acadia Healthcare Co. Inc.'s proposed $390 million senior unsecured notes due 2024. The company plans to use the proceeds, in addition to the proceeds of new equity issuance, and new term loan B to help finance the acquisition of U.K.-based behavioral health provider Priory Group No. 1 Ltd. The '5' recovery rating indicates expectations for modest (10% to 30%, at the lower end of the range) recovery in a default. S&P's 'BB-' issue-level and '2' recovery (70% to 90%, at the lower end of the range) ratings on the existing revolving credit and term loan facilities are unchanged. S&P's corporate credit rating on Acadia is 'B+' and the outlook is stable. While this transaction will prevent pro forma adjusted debt leverage from decreasing to S&P's earlier expected level below 5x in 2016, it does not change S&P's view of financial risk. The company has a track record of using equity to help fund prior acquisitions to limit leverage spikes. Similar to prior acquisitions, S&P expects pro forma leverage to fall to its estimated range between 4x and 5x, aided by synergies of the transaction as well as growth from current operations. S&P's assessment of Acadia's business risk profile as weak is based on its narrow focus on behavioral health, despite substantial scale in this fragmented sector; exposure to reimbursement risk, especially from government payors (which represent about 60% of revenues); and solid growth prospects with behavioral health demand that S&P expects to continue to grow at a mid- to high-single-digit pace. S&P also incorporates its view that the company is acquisitive with ongoing risks relating to integrating acquired facilities. RATINGS LIST Acadia Healthcare Co. Inc. Corporate Credit Rating B+/Stable/-- New rRting Acadia Healthcare Co. Inc. $390 Mil. Senior Unsecured Notes Due 2024 B Recovery Rating 5L ACCIPITER COMMUNICATIONS: Disclosures Hearing Slated for Feb. 9 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona held an initial hearing on the motion for approval of the Disclosure Statement explaining the Second Amended Plan of Reorganization proposed by Accipiter Communications, Inc. and its Official Committee of Unsecured Creditors. On Dec. 29, 2015, the Court entered an order continuing the hearing to Feb. 9, 2016, at 9:30 a.m. The hearing on the Disclosure Statement have previously been postponed by the parties to give parties time to resolve objections by the U.S. Rural Utilities Service, and to give way for the solicitation of offers for the Debtor's assets. At a Chapter 11 status hearing in July 2015, respective counsel for the Debtor, RUS, and the Committee all reported to the Court that those parties were cooperatively exploring the possibility of identifying one or more potential purchasers for substantially all the Debtor's assets as a means to bringing about a resolution of the Chapter 11 case. The Chapter 11 Plan Accipiter Communications and its Official Committee of Unsecured Creditors have proposed a Chapter 11 Plan designed to effect a reorganization of the Debtor's business operations and a restructuring of the Debtor's obligations to its Creditors. The Plan provides that: * Allowed administrative claims and allowed priority tax claims will be paid in full in cash. * Priority claims (Class 1), miscellaneous secured claims (Class 2) are unimpaired and each claim holder will receive Cash in an amount equal to its allowed claim. * The Rural Utilities Service (RUS) A Loan Claim (Class 3A) is allowed as a secured claim of $2,147,311 and will be satisfied with the issuance of a New RUS Note payable to RUS. The New RUS Note A, in the principal amount of $2,147,311, bears simple interest at 5.00% per year, for a term of 240 months. * The Rural Utilities Service (RUS) B Loan Claim (Class 3B) is allowed as a secured claim of $4,456,707 and will be satisfied with the issuance of a New RUS Note payable to RUS. The New RUS Note B, in the principal amount of $4,456,707, bears simple interest at 5.00% per year, for a term of 240 months. * The Rural Utilities Service (RUS) C Loan Claim (Class 3C) is allowed in the amount of $14,124,196 and will be satisfied when Reorganized Accipiter makes the New RUS Note C payable to RUS as of the Effective Date in the in the principal amount of $2,824,839 (that is, 20% of the Allowed amount of the RUS C Loan Claim). The New RUS Note C is unsecured and bears no interest. * Each holder of an allowed general unsecured claim (Class 4) will receive nine equal monthly installment payments of cash totaling the amount of its allowed general unsecured claim beginning on the first Business Day of each full calendar month after the Effective Date. The Debtor believes that allowed general unsecured claims will total approximately $600,000. * All equity interests and equity related claims are extinguished, and holders do not receive or retain any rights or distributions on account of their equity interests or equity related claims. The Second Amended Plan was filed with the Bankruptcy Court on May 15, 2015, superseding previous plans of reorganization filed on Aug. 27, 2014, and Dec. 16, 2014. A copy of the Second Amended Plan is available for free at: http://bankrupt.com/misc/Accipiter_C_149_DS_2nd_Am_Plan.pdf The original iteration of the Plan provided that holders of equity interests will retain their equity interests in the Debtors. About Accipiter Communications Accipiter Communications, Inc., a Phoenix-based company that provides telecommunications services to unserved or underserved, mostly rurally-situated residences and businesses in central Arizona, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-04372) in its hometown on March 28, 2014. Accipiter provides telecommunications services to 1,409 residential subscribers and 231 business subscribers, including an elementary school, an enforcement agency, a fire station, two municipal water supply facilities, and a bank. The Debtor is able to provide telecommunications services to rural customers only by participating in two federal programs: revenue subsidies from the federal Universal Service Fund, which is administered under the authority of the Federal Communications Commission, and capital debt financing provided under a rural telecommunications loan program administered by the Rural Utilities Service, an agency of the U.S. Department of Agriculture. As of the Petition Date, the Debtor owed $20.8 million in aggregate principal to the RUS. The Debtor believes there is approximately $414,000 in prepetition general unsecured claims held by trade vendors or other parties against the Debtor. The Debtor is a privately held company, with 55.4% of the stock held by Lewis van Amerongen. In its schedules, the Debtor listed $31.3 million in assets and $21.6 million in liabilities. The bankruptcy case is assigned to Judge George B. Nielsen Jr. The Debtor has tapped Perkins Coie LLP as counsel. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed these three creditors to serve in the Official Committee of Unsecured Creditors. The Committee retained Stinson Leonard Street LLP as counsel. ACCIPITER COMMUNICATIONS: U.S. Opposes Plan Disclosures ------------------------------------------------------- The United States said in a filing that the May 15, 2015 proposed Disclosure Statement should not be approved, and the motion seeking approval of the Disclosure Statement should be denied, because the Second Amended Plan of Reorganization proposed by Accipiter Communications, Inc. and its Official Committee of Unsecured Creditors cannot be confirmed and the Disclosure Statement fails to provide adequate information. The United States, acting through the Rural Utilities Service of the United States Department of Agriculture, is the Debtor's largest creditor. As of March 28, 2014, the Debtor owed RUS $20,897,044.07 -- proof of claim (No. 29-1) -- on a series of loans to the Debtor by RUS or its predecessor the Rural Telephone Bank. The RUS Claim represents 93% of the claims (totaling $22,379,957) currently appearing on Debtor's claims register. The Plan is not acceptable to RUS and if the Court were to find balloting necessary to gauge whether the Plan should be confirmed, RUS expects to vote against it. The U.S. avers that the Disclosure Statement should be rejected because the Plan is not confirmable. It points out that: * The Plan discriminates unfairly against RUS's Class 3C Under-secured Claim by placing it in a class separate from, and treating it much worse than, claims of other unsecured creditors. The Plan proposes to pay general unsecured creditors (Class 4) in full within nine months. By contrast, on the RUS Claim in Class 3C, Debtor would pay just 20%, and would do so over twenty years (and without interest). * In direct contravention of this well-accepted principle, the Plan gerrymanders claims with a view toward creating an accepting class. The Proponents' only apparent purpose in classifying unsecured claims into two classes, 3C and 4, is to create an impaired class that the Proponents hope will vote in favor of the Plan. * The Plan's interest rate for the proposed forced loans to repay the Class 3A and 3B claims is below both the risk- adjusted prime rate and the 20-year rate for far less risky bonds. That is so in part because under the Plan, for these loans, Debtor would pay only 5% simple interest. * The Plan's 20-year repayment period -- particularly for the proposed Class 3B loan on which payments would not be made until the end -- is unreasonably long. The U.S. also asserts that the Disclosure Statement should not be approved because it does not provide adequate information. The U.S. notes, among other things, that the Proposed Disclosure Statement omits financial details necessary to gauge the reorganized Debtor's ability to make future payments, especially to RUS. Attorneys for the United States: BENJAMIN C. MIZER Principal Deputy Assistant Attorney General JOHN S. LEONARDO United States Attorney RUTH A. HARVEY KIRK T. MANHARDT LLOYD H. RANDOLPH JESSICA S. WANG United States Department of Justice Commercial Litigation Branch P.O. Box 875, Ben Franklin Station Washington, DC 20044 Voice: (202) 307-0356 Fax: (202) 514-9163 E-mail: lloyd.randolph@usdoj.gov The Chapter 11 Plan Accipiter Communications and its Unsecured Creditors Committee have proposed a Chapter 11 Plan designed to effect a reorganization of the Debtor's business operations and a restructuring of the Debtor's obligations to its Creditors. The Plan provides that: * Allowed administrative claims and allowed priority tax claims will be paid in full in cash. * Priority claims (Class 1), miscellaneous secured claims (Class 2) are unimpaired and each claim holder will receive Cash in an amount equal to its allowed claim. * The Rural Utilities Service (RUS) A Loan Claim (Class 3A) is allowed as a secured claim of $2,147,311 and will be satisfied with the issuance of a New RUS Note payable to RUS. The New RUS Note A, in the principal amount of $2,147,311, bears simple interest at 5.00% per year, for a term of 240 months. * The Rural Utilities Service (RUS) B Loan Claim (Class 3B) is allowed as a secured claim of $4,456,707 and will be satisfied with the issuance of a New RUS Note payable to RUS. The New RUS Note B, in the principal amount of $4,456,707, bears simple interest at 5.00% per year, for a term of 240 months. * The Rural Utilities Service (RUS) C Loan Claim (Class 3C) is allowed in the amount of $14,124,196 and will be satisfied when Reorganized Accipiter makes the New RUS Note C payable to RUS as of the Effective Date in the in the principal amount of $2,824,839 (that is, 20% of the Allowed amount of the RUS C Loan Claim). The New RUS Note C is unsecured and bears no interest. * Each holder of an allowed general unsecured claim (Class 4) will receive nine equal monthly installment payments of cash totaling the amount of its allowed general unsecured claim beginning on the first Business Day of each full calendar month after the Effective Date. The Debtor believes that allowed general unsecured claims will total approximately $600,000. * All equity interests and equity related claims are extinguished, and holders do not receive or retain any rights or distributions on account of their equity interests or equity related claims. The Second Amended Plan was filed with the Bankruptcy Court on May 15, 2015, superseding previous plans of reorganization filed on Aug. 27, 2014, and Dec. 16, 2014. A copy of the Second Amended Plan is available for free at: http://bankrupt.com/misc/Accipiter_C_149_DS_2nd_Am_Plan.pdf The original iteration of the Plan provided that holders of equity interests will retain their equity interests in the Debtors. About Accipiter Communications Accipiter Communications, Inc., a Phoenix-based company that provides telecommunications services to unserved or underserved, mostly rurally-situated residences and businesses in central Arizona, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-04372) in its hometown on March 28, 2014. Accipiter provides telecommunications services to 1,409 residential subscribers and 231 business subscribers, including an elementary school, an enforcement agency, a fire station, two municipal water supply facilities, and a bank. The Debtor is able to provide telecommunications services to rural customers only by participating in two federal programs: revenue subsidies from the federal Universal Service Fund, which is administered under the authority of the Federal Communications Commission, and capital debt financing provided under a rural telecommunications loan program administered by the Rural Utilities Service, an agency of the U.S. Department of Agriculture. As of the Petition Date, the Debtor owed $20.8 million in aggregate principal to the RUS. The Debtor believes there is approximately $414,000 in prepetition general unsecured claims held by trade vendors or other parties against the Debtor. The Debtor is a privately held company, with 55.4% of the stock held by Lewis van Amerongen. In its schedules, the Debtor listed $31.3 million in assets and $21.6 million in liabilities. The bankruptcy case is assigned to Judge George B. Nielsen Jr. The Debtor has tapped Perkins Coie LLP as counsel. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed these three creditors to serve in the Official Committee of Unsecured Creditors. The Committee retained Stinson Leonard Street LLP as counsel. ALERE INC: S&P Puts 'B' CCR on CreditWatch Positive --------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'B' corporate credit rating on Alere Inc., and all existing issue-level ratings on the company's debt, on CreditWatch with positive implications. "The rating action is in response to the announcement that the company has accepted an acquisition offer by Abbott Laboratories for $5.8 billion. We expect Abbott to fund the transaction with debt and to assume or refinance Alere's debt upon completion of the deal," said Standard & Poor's credit analyst Maryna Kandrukhin. The rating action reflects Alere's potential for higher issuer- and issue-level ratings as a part of the consolidated entity once the acquisition is completed. While the 'A+' corporate credit rating on Abbott has been placed on CreditWatch with negative implications, mainly due to the significant amount of debt to be incurred in its proposed acquisition of Alere, S&P still believes there is the potential for meaningfully higher ratings for Alere after the acquisition closes. Upon the completion of the transaction, S&P expects to resolve the CreditWatch listings to reflect the final ratings on the consolidated entity, the status of Alere relative to the consolidated whole, and the status of the debt. ALLIANCE ONE: Axar Capital, et al., Report 9.9% Stake ----------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, Axar Capital Management, LP, Axar GP, LLC and Andrew Axelrod disclosed that as of Dec. 31, 2015, they beneficially own 879,440 [shares of Common Stock held for the account of Axar Master Fund, Ltd.] representing 9.9 percent of the shares outstanding (based on 8,883,238 shares of Common Stock reported as outstanding as of July 31, 2015, according to the Issuer's quarterly report on Form 10-Q, filed Aug. 6, 2015). A copy of the regulatory filing is available for free at http://is.gd/miviMv About Alliance One Alliance One International is a leading global independent leaf merchant. Visit the Company's Web site at http://www.aointl.com/ Alliance One reported a net loss of $15.6 million on $2.10 billion of sales and other operating revenues for the year ended March 31, 2015, compared to a net loss of $87 million on $2.3 billion of sales and other operating revenues for the year ended March 31, 2014. * * * As reported by the TCR on Feb. 12, 2015, Moody's Investor Service downgraded the Corporate Family Rating of Alliance One International, Inc. (AOI) to Caa1 from B3. The downgrade of AOI's CFR to Caa1 reflects Moody's expectation that credit metrics will remain weak over the next 12 - 18 months. The TCR reported on April 13, 2015, that Standard & Poor's Ratings Services lowered its corporate credit rating on Morrisville, N.C.-based Alliance One International Inc. to 'CCC+' from 'B-'. ALLIED NEVADA: Order Denying Brian Tuttle's Appeal Vacated ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware vacated the Jan. 4, 2016 order and reopened the Chapter 11 case of Allied Nevada Gold Corp. The Court also ordered that appellant Brian Tuttle timely pay the filing fee owed. On Jan. 4, 2016, the Court said that appellant filed the appeal without prepayment of the filing fee or an application to proceed without prepayment of fees. In this relation, the appeal is dismissed and the case is closed for the appellant's failure to pay the required filing fee. On Oct. 21, 2015, Mr. Tuttle, pro se, appealed Hon. Mary F. Walrath's Sept. 15 order denying his motion to appoint an examiner with access to and authority to disclose previledge materials. About Allied Nevada Allied Nevada Gold Corp. ("ANV"), a Delaware corporation, is a publicly traded U.S.-based gold and silver producer engaged in mining, developing and exploring properties in the State of Nevada. ANV was spun off from Vista Gold Corp. in 2006 and began Operations in May 2007. Nevada-based mining properties acquired from Vista include the Hycroft Mine, an open-pit heap leach operation located 54 miles west of Winnemucca, Nevada. ANV controls 75 exploration properties throughout Nevada as of Dec. 31, 2014. On March 10, 2015, ANV and 13 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The cases are jointly administered under Lead Case No. 15-10503. The cases are assigned to Judge Mary F. Walrath. The Debtors have tapped Blank Rome LLP and Akin Gump Strauss Hauer & Feld LLP as attorneys; FTI Consulting Inc. as financial advisor; Moelis & Company as financial advisor; and Prime Clerk LLC as claims and noticing agent. ANV disclosed $941 million in total assets and $664 million in total debt as of Dec. 31, 2014. BankruptcyData reported that Allied Nevada Gold's Amended Joint Chapter 11 Plan of Reorganization became effective and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on Oct. 8, 2015. Highlights of the Plan include the following: As a result of the financial restructuring, the Company eliminated approximately $447.7 million of debt and related interest payments from its balance sheet. The Company closed two financings: a $126.7 million first lien term loan credit agreement and $95 million of second lien convertible notes. The credit agreement proceeds were used to repay the Company's outstanding loan obligations related to its revolving credit agreement and the amounts owed under the Company's diesel and cross-currency swap arrangements. ALLY FINANCIAL: Reports $1.3 Billion Net Income for 2015 -------------------------------------------------------- Ally Financial Inc. reported net income of $1.3 billion for full year 2015 and $263 million for the fourth quarter. This compares to net income of $268 million in the prior quarter and $177 million for the fourth quarter of 2014, an increase of 49 percent over the prior year period. For the full year 2015, net income increased 12 percent from $1.2 billion in 2014. Core pre-tax income in 2015, excluding repositioning items, improved 11 percent to $1.8 billion, compared to $1.6 billion in the prior year. For full year 2015, Ally reported adjusted earnings per diluted common share of $2.00, increasing 19 percent from $1.68 in 2014, excluding the impact of the redemption of Series G and repurchase of Series A preferred securities during 2015. Including the redemption of these securities, the company reported a generally accepted accounting principles (GAAP) loss of $2.66 per common share for the year. The redemption of these preferred securities were planned actions to normalize Ally's capital structure, drive improved financial performance in the future, and to support the objective of initiating a common dividend and share repurchase program in 2016. The company reported core pre-tax income of $446 million, excluding repositioning items, in the fourth quarter of 2015, increasing 4 percent from $431 million in the third quarter and up 13 percent from $396 million in the fourth quarter 2014. Adjusted earnings per diluted common share for the quarter were $0.52, compared to $0.51 in the previous quarter and $0.40 in the prior year period. The company reported a GAAP loss of $1.97 per common share in the fourth quarter of 2015, primarily driven by the redemption of $1.3 billion of Series G preferred securities during the quarter. As a result of the redemption, Ally's preferred dividend burden has been significantly reduced. "Ally's performance in 2015 reflected the fundamental strength and adaptability of our operations and the successful execution of the multi-year plan to improve profitability," stated Ally chief executive officer Jeffrey Brown. "We exceeded our operational targets for retail deposit growth and auto originations, and we achieved a sustainable return on tangible common equity of more than 9 percent." Brown continued, "Importantly, the steps we have taken in 2015 position us well for the future. The redemption of the Series G preferred securities paved the way to pursue share repurchases and shareholder dividends. The growth in retail deposits drives greater funding efficiency and stability, and an expanding customer base provides opportunity for broader and deeper relationships. Our auto finance business is more diversified than ever, and our leading presence in the industry enabled us to shift capital from incentivized business toward retail auto contracts and post $41 billion in auto originations last year, which will be a significant contributor toward a consistent earnings stream in the future." "Looking to 2016, we are well-positioned to thoughtfully pursue customer expansion opportunities, participate in the ongoing shift toward digital financial services, maintain a keen focus on risk management, and deliver an estimated earnings per share growth target of 15 percent." He concluded, "Ally's Board and management teams remain squarely focused on creating and building shareholder value, and we consider all options through that lens. We believe in the underlying strength of our businesses, value in the company and ability to drive returns for shareholders." Ally's total equity was $13.4 billion at Dec. 31, 2015, down from $14.6 billion at the end of the prior quarter as the result of redeeming the remaining $1.3 billion of Series G preferred securities in the quarter. Ally's preliminary fourth quarter 2015 Basel III Common Equity Tier 1 capital ratio was 8.7 percent on a fully phased-in basis, and Ally's preliminary Tier 1 capital ratio was 11.1 percent on a fully phased-in basis, both down as a result of the Series G redemption, but partially offset by net income in the quarter. Ally's consolidated cash and cash equivalents increased to $6.4 billion as of Dec. 31, 2015, from $5.2 billion at Sept. 30, 2015, driven by an increase in deposits. Included in this quarter's cash balance are $3.5 billion at Ally Bank and $1.3 billion at the insurance subsidiary. Ally continued to execute a diverse funding strategy during the fourth quarter of 2015. This strategy included strong growth in deposits, which represent approximately 47 percent of Ally's funding portfolio, completion of new term U.S. auto securitizations, which totaled approximately $1.0 billion for the quarter, and a new off-balance sheet credit facility for approximately $500 million. For the year, the company completed more than $10.8 billion in new term auto securitizations, auto loan sales and an off-balance sheet credit facility. The company also issued $1.5 billion of unsecured debt during the quarter for a total of $5.4 billion in the year. A full-text copy of the press release is available for free at: http://is.gd/VtNL6L About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. As of Sept. 30, 2015, the Company had $156 billion in total assets, $142 billion in total liabilities, and $14.6 billion in total equity. * * * As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings Services said it raised its issuer credit rating on Ally Financial Inc. to 'BB' from 'B+'. "The upgrade reflects the company's release from potential legal and financial liabilities stemming from its ownership of ResCap," said Standard & Poor's credit analyst Tom Connell. In the April 3, 2014, edition of the TCR, Fitch Ratings has upgraded Ally Financial Inc.'s long-term Issuer Default Rating (IDR) and senior unsecured debt rating to 'BB+' from 'BB'. The rating upgrade reflects increased clarity around Ally's ownership structure given Ally's recent announcement that it has launched an initial public offering those shares of its common stock held by the U.S. Treasury (the Treasury). As reported by the TCR on July 16, 2014, Moody's Investors Service affirmed the 'Ba3' corporate family and 'B1' senior unsecured ratings of Ally Financial, Inc. and revised the outlook for the ratings to positive from stable. Moody's affirmed Ally's ratings and revised its rating outlook to positive based on the company's progress toward sustained improvements in profitability and repayment of government assistance received during the financial crisis. ALPHA NATURAL: Court OKs Key Employee Incentive Plan for 2016 ------------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Alpha Natural Resources' motion for an order authorizing payments under its 2015 annual incentive bonus plan and approving key employee incentive plan (KEIP) for certain insider employees for 2016. As previously reported, "The Debtors designed the KEIP to intent senior management employees to meet and exceed certain operational goals that will be critical to the success of the Debtors' restructuring....The KEIP is comprised of two consecutive three-month performance periods, with the first performance period starting on Jan. 1, 2016. Each KEIP Participant is assigned a target incentive opportunity expressed as a percentage of such KEIP Participant's base salary. If target performance goals are achieved across all performance metrics for a performance period, then each KEIP Participant will earn a target payout for that performance period. The KEIP also provides for lesser payouts if threshold performance goals are achieved and greater payouts if maximum performance goals are achieved....The performance goals under the KEIP relate to the following three performance metrics: (a) an annualized savings metric (the 'Value Enhancement Plan'); (b) a liquidity metric (the 'Liquidity Metric'); and (c) a safety and environmental compliance metric (the 'Safety/Environmental Metric')....The KEIP constitutes each of the KEIP Participants' sole incentive program for the 2016 calendar year. Performances under the KEIP will be measured as of the end of each of the first two calendar quarters of 2016, and any award payments will be made in up to three instalments....The aggregate cost (i.e., $7.4 million) of the KEIP if target performance goals are achieved represents 0.073% of the book value of the Debtors' assets, which is approximately equal to the median cost of comparable plans approved in other bankruptcy cases." The Court also approved Alpha Natural Resources' motion to seal certain KEIP program-related exhibits. About Alpha Natural Alpha Natural -- http://www.alphanr.com/-- is a coal supplier, ranked second largest among publicly traded U.S. coal producers as measured by 2014 consolidated revenues of $4.3 billion. Alpha Natural Resources, Inc. (Bankr. E.D. Va. Case No. 15-33896) and its affiliates filed separate Chapter 11 bankruptcy petitions on Aug. 3, 2015, listing $9.9 billion in total assets as of June 30, 2015, and $7.3 billion in total liabilities as of June 30, 2015. The petition was signed by Richard H. Verheij, executive vice president, general counsel and corporate secretary. Judge Kevin R. Huennekens presides over the cases. David G. Heiman, Esq., Carl E. Black, Esq., and Thomas A. Wilson, Esq., at Jones Day serve as the Debtors' general counsel. Tyler P. Brown, Esq., J.R. Smith, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq., serve as the Debtors' local counsel. Rothschild Group is the Debtors' financial advisor. Alvarez & Marshal Holdings, LLC, is the Debtors' investment banker. Kurtzman Carson Consultants, LLC, is the Debtors' claims and noticing agent. The U.S. Trustee for Region 4 appointed seven creditors of Alpha Natural Resources to serve on an official committee of unsecured creditors. AMBAC FINANCIAL: JPM to Pay $995M to Settle RMBS-Related Claims --------------------------------------------------------------- Sudarshan Varadhan at Reuters reported that bond insurer Ambac Financial Group Inc. said JPMorgan Chase & Co. will pay $995 million to settle disputes related to residential mortgage-backed securities. The settlement will have a positive impact on Ambac's fourth-quarter operating results and its claims paying resources, Chief Executive Nader Tavakoli said in a statement. The settlement comes two weeks after Reuters reported that three of Ambac's top 10 shareholders were calling on Tavakoli to step down, claiming that he was slow to settle $4 billion in insurance claims and lawsuits against JPMorgan, Countrywide Home Loans Inc and Bank of America Corp. Ambac has publicly resisted calls to speed up its payment of insurance claims, citing concerns that it wouldn't be able to meet its liabilities that extend out to 2054. The company has said that any change in the payouts schedule is solely at the discretion of its regulator, the commissioner of insurance of State of Wisconsin. Ambac said the settlement also provides for the withdrawal of its objection to JPMorgan's $4.5 billion RMBS settlement with RMBS trustees. JPMorgan said the agreement would not have a material effect on its first-quarter earnings. The settlement underscores how Wall Street is still shaking off the legacy of the U.S. subprime crisis, during which mortgages were sold to people who could not afford them and then repackaged for investors without an adequate explanation of how risky they were. Ambac sued Bank of America in 2014 to recoup hundreds of millions of dollars of losses from insuring securities backed at least in part by risky mortgages from the bank's Countrywide Home Loans unit. Goldman Sachs Group Inc said earlier this month that it would pay regulators over $5 billion to settle claims that it misled mortgage bond investors during the financial crisis. About Ambac Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Assurance Corp. is Ambac's bond insurance unit domiciled in Wisconsin. Ambac reported net income of $282 million on $231 million of total revenue for the three months ended June 30, 2015, compared with a net loss of $208 million on $57.3 million of total revenue for the same period in 2014. The Company's balance sheet at June 30, 2015, showed $25.5 billion in total assets, $23.5 billion in total liabilities, and total stockholders' equity of $2.05 billion. As a result of uncertainties associated with the oversight by the Rehabilitator of the Segregated Account, management has concluded that there is substantial doubt about Ambac's ability to continue as a going concern. AMERICAN AXLE: Barrow Hanley Files Schedule 13G with SEC -------------------------------------------------------- Barrow, Hanley, Mewhinney & Strauss, LLC filed a Schedule 13G with the Securities and Exchange Commission on Feb. 2, 2016, disclosing ownership of five percent or less of American Axle & Manufacturing Holdings, Inc.'s outstanding common stock. A copy of the regulatory filing is available for free at http://is.gd/N0LkWw About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. As of Sept. 30, 2015, the Company had $3.39 billion in total assets, $3.17 billion in total liabilities, and $227 million in total stockholders' equity. * * * In September 2012, Moody's Investors Service affirmed the 'B1' Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of American Axle. American Axle carries a 'BB-' corporate credit rating from Standard & Poor's Ratings Services. "The 'BB-' corporate credit rating on American Axle reflects the company's 'weak' business risk profile and 'aggressive' financial risk profile, which incorporate substantial exposure to the highly cyclical light- vehicle market," S&P said, as reported by the TCR on Sept. 6, 2012. As reported by the TCR on Sept. 1, 2014, Fitch Ratings had upgraded the Issuer Default Ratings (IDRs) of American Axle & Manufacturing Holdings, Inc. (AXL) and its American Axle & Manufacturing, Inc. (AAM) subsidiary to 'BB-' from 'B+'. The upgrade of the IDRs for AXL and AAM is supported by the fundamental improvement in the drivetrain and driveline supplier's credit profile over the past several years. AMERICAN NATURAL ENERGY: Chapter 11 Plan Gives Control to Hillair ----------------------------------------------------------------- Debtor American Natural Energy Corporation, and its largest secured creditor, Hillair Capital Investments, L.P., have proposed a reorganization plan that would give 92.5% of the stock of the reorganized company to Hillair and the remaining shares to unsecured creditors. Based on the Debtor's efforts to market the Debtor's property, Hillair's willingness to continue to invest in the property and the value of the potential to develop the oil and gas reserves, the Debtor asserts that the enterprise value of the Debtor is $4.85 million. Of that value, the plan proponents assert that the collateral held by Hillair is worth at least $2,920,000. The Plan distributes that Enterprise Value to the holders of Claims. Except Hillair, those parties who hold Priority Claims and have first call on the unsecured assets of the Debtor; receive Cash under the Joint Plan. Hillair, on account of its DIP loan and satisfaction of other cash obligations necessary to substantially consummate the Joint Plan, will receive preferred stock. As to the Secured Claim of Hillair and its Gap Claim, under the Joint Plan, Hillair agrees to take Common Stock on account of those claims. As a result, although Hillair asserts a security interest in the entirety of the Enterprise Value, its treatment under the Joint Plan effectively recognizes the prepetition Secured Claim as secured at $2,920,000. The Disclosure Statement provides that: * Administrative claims estimated at $25,000 will be paid in full in cash. * The Priority Claims (Class 1), to the extent they represented wages, salaries, and commissions Claims, have been paid pursuant to a court order. The balance of the priority claims will be paid in full. * Hillair asserts that it holds a secured claim for $4,091,000 (Class 2). Confirmation of the Plan will constitute approval of a settlement whereby Hillair and the Debtor agree that these claims will be reduced to $3.1 million. The claims will be satisfied in full by issuance of 92.5% of the new common stock of the reorganized Company. * Lien claims (Class 3), if any, will be paid in full without interest. The Debtor believes that no lien claims exist. * The Debtor estimates that unsecured claims (Class 4) total approximately $9,489,992. Unsecured claimants will receive a pro rata interest in the liquidating trust which will hold 7.5% of the new common stock. The 7.5% calculation for the Class 4 Claims is based on the Enterprise Value of $4,850,000. In addition, to the extent that the Unsecured Creditors Committee requests to preserve Causes of Action, these will be assigned to the Liquidating Trustee to pursue for the Trust's beneficiaries. * The Debtor's affiliate, Gothic Natural Resources, Inc., asserts an unsecured claim against the Debtor (Class 5). Gothic's claim will be subordinated, and Gothic will receive nothing on account of its Claim. * The current ownership interests of the stock in the Debtor (Class 6) will be extinguished upon confirmation of the Joint Plan and will receive nothing on account of these interests. On Nov. 20, 2015, Hillair filed a Complaint (Adversary Case 15-01078), wherein Hillair asked the Bankruptcy Court to determine the validity, rank and priority of liens and judgments against the Bayou Couba lease. Hillair takes the position that it outranks all of these claimants. The Debtor and Hillair contend all such claimants are properly classified in Class 4 and thus General Unsecured Claims. The Plan does provide that in the event a final non-appealable judgment declaring one or more defendants have Secured Claims outranking Hillair that they will be classified and treated in Class 3. On Jan. 15, 2016, the clerk of court entered 16 preliminary defaults against certain defendants who failed to file responsive pleadings during the time allowed by applicable law. On Jan. 20, 2016, Hillair filed its motion for default judgment against these sixteen defendants and the hearing has been scheduled for Jan. 29, 2016. It is anticipated that Hillair will be filing a motion for partial summary judgment against the remaining six defendants who filed responsive pleadings with a target hearing date of Feb. 16, 2016. The Debtor and Hillair submitted a proposed Chapter 11 Plan and Disclosure Statement on Dec. 30, 2015. On Jan. 20, 2015, the parties submitted the First Amended Plan and Disclosure Statement. A copy of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/Amer_Natural_159_1st_Am_DS.pdf About American Natural American Natural Energy Corporation is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. ANEC is engaged in the acquisition, development, exploitation and production of oil and natural gas. ANEC holds mineral interests in approximately 1,320 acres of land in St. Charles Parish, Louisiana. ANEC's wholly owned subsidiary, Gothic Resources Inc., is a corporation organized under the Canada Business Corporation Act. American Natural was subject to an involuntary Chapter 11 petition on Aug. 31, 2015 (Bankr. E.D. La., Case No. 15-122290), by Reamco, Inc., C&M Contractors, Inc., Bayou Fuel Marine & Hardware Supplies, Inc., and Hillair Capital Investments, L.P. ANEC consented to entry of an Order for Relief on October 2, 2015, and an Order for Relief was entered by the Court on the same date. The Petitioners are represented by Philip Kirkpatrick Jones, Jr., Esq., at Liskow & Lewis, in New Orleans, Louisiana; and Michael A. Crawford, Esq., at Taylor, Porter, Brooks & Phillips LLP, in Baton Rouge, Louisiana. The Debtor tapped (i) Baker Donelson Bearman Caldwell & Berkowitz, PC as attorneys and (ii) Northpoint Energy Partners, LLC, to provide Andrew Reckles and James Schroeder as CRO. The U.S. trustee overseeing the Debtor's case appointed three creditors to the official committee of unsecured creditors. The creditors are Baker Hughes Oilfield Operations Inc., PAR III Inc., and Summa Engineering Inc. The committee is represented by Lugenbuhl Wheaton Peck Rankin & Hubbard. * * * By final order entered on Oct. 30, 2015, the Court authorized the Debtor to obtain DIP financing from its existing primary secured creditor, Hillair, of up to $1,000,000. Subsequently on December 11, 2015 the Debtor requested and later obtained approval to raise the maximum to be borrowed under that facility to $1,360,000. On Dec. 21, 2015, the Court entered an order granting the Debtor's bar date motion, and set non-government proofs of claim for Feb. 15, 2016, and governmental proofs of claim for March 31, 2016. AMERICAN NATURAL ENERGY: Committee Balks at Disclosure Statement ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of American Natural Energy Corporation is opposing approval of the First Amended Joint Disclosure Statement submitted by the Debtor and its largest secured creditor, Hillair Capital Investments, L.P. The Committee said the Debtor's Amended Disclosure Statement should not be approved because it does not contain adequate information as required by Section 1125 of the Title 11 of the United States Code. Specifically, according to the Committee, the Amended Disclosure Statement contains inadequate information regarding the valuation of the Debtor's assets and the Debtor's enterprise, inadequate information regarding the proposed plan process, inadequate information regarding the post-confirmation control and corporate governance of the Reorganized Debtor; and inadequate information regarding other key factors relating to the Debtor's business operations. Without adequate information regarding these issues, the Committee said that creditors cannot make an informed decision about the Debtor's First Amended Joint Chapter 11 Plan of Reorganization. The Committee cites, among other things: * No calculation is presented to allow a party in interest to understand how the Debtor and Hillair Capital Investments, Inc. arrived at their arbitrary enterprise value of $4.85 million. * Inadequate and inconsistent information is provided as to the alleged secured claim of Hillair, which will have an allowed claim of $3.1 million under the Plan. While the Amended Disclosure Statement was submitted jointly, no stipulation or order approving a compromise has been entered in this case on the amount of Hillair's allowed secured claim. * The Debtor should provide further information on the potential insider status of certain claimants and the impact on ballot tabulation. Palo Alto, a creditor in Class 4, is or may be an insider of the Debtor. * The Amended Disclosure Statement provides that the duty is on the Committee to provide notice of intent to pursue potential "Causes of Action." But the procedure as to the identification and pursuit of Causes of Action is deficient insofar as the Plan and Amended Disclosure Statement contain inconsistent dates as to the deadline by which the Committee is to file a notice of intent to pursue such claims. * The Amended Disclosure Statement should also provide further information on the anticipated sources of payment that will be necessary to consummate the Plan. This information could have an impact on feasibility and should be disclosed. * The Committee strongly believes that the issuance of 7.5% of the Common Stock of the Reorganized Debtor is not acceptable, especially in light of Hillair's dubious secured status under 11 U.S.C. Sec. 506. Nevertheless, the definition of Common Stock should be clarified so as to provide that Class 4 creditors receive an interest in the Liquidating Trust that receives 7.5% of the Common Stock. Counsel for the Official Committee of Unsecured Creditors: LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD Stewart F. Peck, Esq. Christopher T. Caplinger, Esq. Joseph P. Briggett, Esq. Erin R. Rosenberg, Esq. 601 Poydras Street, Suite 2775 New Orleans, LA 70130 Telephone: (504) 568-1990 Facsimile: (504) 310-9195 E-mail: speck@lawla.com ccaplinger@lawla.com jbriggett@lawla.com erosenberg@lawla.com About American Natural American Natural Energy Corporation is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. ANEC is engaged in the acquisition, development, exploitation and production of oil and natural gas. ANEC holds mineral interests in approximately 1,320 acres of land in St. Charles Parish, Louisiana. ANEC's wholly owned subsidiary, Gothic Resources Inc., is a corporation organized under the Canada Business Corporation Act. American Natural was subject to an involuntary Chapter 11 petition on Aug. 31, 2015 (Bankr. E.D. La., Case No. 15-122290), by Reamco, Inc., C&M Contractors, Inc., Bayou Fuel Marine & Hardware Supplies, Inc., and Hillair Capital Investments, L.P. ANEC consented to entry of an Order for Relief on October 2, 2015, and an Order for Relief was entered by the Court on the same date. The Petitioners are represented by Philip Kirkpatrick Jones, Jr., Esq., at Liskow & Lewis, in New Orleans, Louisiana; and Michael A. Crawford, Esq., at Taylor, Porter, Brooks & Phillips LLP, in Baton Rouge, Louisiana. The Debtor tapped (i) Baker Donelson Bearman Caldwell & Berkowitz, PC as attorneys and (ii) Northpoint Energy Partners, LLC, to provide Andrew Reckles and James Schroeder as CRO. The U.S. trustee overseeing the Debtor's case appointed three creditors to the official committee of unsecured creditors. The creditors are Baker Hughes Oilfield Operations Inc., PAR III Inc., and Summa Engineering Inc. The committee is represented by Lugenbuhl Wheaton Peck Rankin & Hubbard. * * * By final order entered on Oct. 30, 2015, the Court authorized the Debtor to obtain DIP financing from its existing primary secured creditor, Hillair, of up to $1,000,000. Subsequently on December 11, 2015 the Debtor requested and later obtained approval to raise the maximum to be borrowed under that facility to $1,360,000. On Dec. 21, 2015, the Court entered an order granting the Debtor's bar date motion, and set non-government proofs of claim for Feb. 15, 2016, and governmental proofs of claim for March 31, 2016. AMERICAN NATURAL ENERGY: Must Submit Amended Disclosures by Feb. 15 ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana held a hearing on Jan. 29, 2016, to consider approval of the Joint Amended Disclosure Statement filed by debtor American Natural Energy Corporation, and Hillair Capital Investments, L.P. At the hearing, appearances were made by: * Jan Hayden and Patrick Willis, counsel for Debtor * Michael Crawford, counsel for Hillair Capital Investments * Amanda George, counsel for the U.S. Trustee * Stewart Peck and Christopher Caplinger, counsel for the Committee of Unsecured Creditors Judge Elizabeth W. Magner has ordered that: (1) a Joint Second Amended Disclosure Statement, which includes the changes discussed in open court, will be filed by the close of business on Feb. 15, 2016. (2) Objections will be filed by 12:00 (noon) on Feb. 17, 2016. (3) A hearing on the Joint Second Amended Disclosure Statement will be held on February 18, 2016 at 10:30 a.m. (4) A confirmation hearing is tentatively set for March 15, 2016 at 10:30 a.m. (5) Pursuant to Debtor's oral motion, that the Ex Parte Motion for an Order Authorizing the Employment and Retention of PLS, Inc. as Sales Agent for Debtor is withdrawn. About American Natural Energy American Natural Energy Corporation is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. ANEC is engaged in the acquisition, development, exploitation and production of oil and natural gas. ANEC holds mineral interests in approximately 1,320 acres of land in St. Charles Parish, Louisiana. ANEC's wholly owned subsidiary, Gothic Resources Inc., is a corporation organized under the Canada Business Corporation Act. American Natural was subject to an involuntary Chapter 11 petition on Aug. 31, 2015 (Bankr. E.D. La., Case No. 15-122290), by Reamco, Inc., C&M Contractors, Inc., Bayou Fuel Marine & Hardware Supplies, Inc., and Hillair Capital Investments, L.P. ANEC consented to entry of an Order for Relief on October 2, 2015, and an Order for Relief was entered by the Court on the same date. The Petitioners are represented by Philip Kirkpatrick Jones, Jr., Esq., at Liskow & Lewis, in New Orleans, Louisiana; and Michael A. Crawford, Esq., at Taylor, Porter, Brooks & Phillips LLP, in Baton Rouge, Louisiana. The Debtor tapped (i) Baker Donelson Bearman Caldwell & Berkowitz, PC as attorneys and (ii) Northpoint Energy Partners, LLC, to provide Andrew Reckles and James Schroeder as CRO. The U.S. trustee overseeing the Debtor's case appointed three creditors to the official committee of unsecured creditors. The creditors are Baker Hughes Oilfield Operations Inc., PAR III Inc., and Summa Engineering Inc. The committee is represented by Lugenbuhl Wheaton Peck Rankin & Hubbard. * * * By final order entered on Oct. 30, 2015, the Court authorized the Debtor to obtain DIP financing from its existing primary secured creditor, Hillair, of up to $1,000,000. Subsequently on December 11, 2015 the Debtor requested and later obtained approval to raise the maximum to be borrowed under that facility to $1,360,000. On Dec. 21, 2015, the Court entered an order granting the Debtor's bar date motion, and set non-government proofs of claim for Feb. 15, 2016, and governmental proofs of claim for March 31, 2016. ARCH COAL: Creditors Committee Taps Kramer Levin as Counsel ----------------------------------------------------------- Emily Field at Bankruptcy Law360 reported that Kramer Levin on Jan. 28, 2016, said that it has been chosen to serve as counsel to the official committee of unsecured creditors of Arch Coal Inc. About Arch Coal Founded in 1969, Arch Coal, Inc., is a producer and marketer of coal in the United States, with operations and coal reserves in each of the major coal-producing regions of the Country. As of January 2016, it was the second-largest holder of coal reserves in the United States, owning or controlling over five billion tons of proven and probable reserves. As of the Petition Date, Arch employed approximately 4,600 full- and part-time employees. Arch Coal, Inc. and 71 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Mo. Case Nos. 16-40120 to 16-40191) on Jan. 11, 2016. The petition was signed by Robert G. Jones as senior vice president-law, general counsel and secretary. The Debtors disclosed total assets of $5.84 billion and total debts of $6.45 billion. Judge Charles E. Rendlen III has been assigned the case. The Debtors have engaged Davis Polk & Wardwell LLP as counsel, Bryan Cave LLP as local counsel, FTI Consulting, Inc. as restructuring advisor, PJT Partners as investment banker, and Prime Clerk LLC as notice, claims and solicitation agent. ARMSTRONG WORLD: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Armstrong World Industries, Inc.'s B1 Corporate Family Rating and B1-PD Probability of Default Rating, and changed its rating outlook to stable from negative as the company completes its tax-free spinoff of its flooring business to shareholders, in order to focus on ceiling and related products. In related rating actions, Moody's assigned a B1 rating to the company's senior secured bank credit facility. Proceeds from the proposed bank credit facility, cash on hand, and a $50 million dividend from Armstrong Flooring Inc. will be used to replace Armstrong's existing bank credit facility, at which time the ratings under this facility will be withdrawn. Armstrong's proposed bank credit facility will consist of a $200 million senior secured revolving credit facility expiring 2021, a $600 million senior secured Term Loan A maturing 2021, and a $250 million senior secured Term Loan B maturing 2023. The company's capital structure also has a $50 million accounts receivable securitization facility (unrated) and about $35 million of industrial revenue bonds. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B1; Probability of Default Rating affirmed at B1-PD; Senior Secured Revolving Credit Facility due 2021 assigned B1 (LGD3); Senior Secured Term Loan A due 2021 assigned B1 (LGD3); Senior Secured Term Loan B due 2023 assigned B1 (LGD3); Speculative Grade Liquidity Rating affirmed at SGL-2. RATINGS RATIONALE Armstrong's B1 Corporate Family Rating incorporates its mixed operating performance due to a lack of earnings from overseas operations. The company has invested about $160 million in facilities in China and Russia, which are both undergoing contraction. Moody's anticipates time spent by Armstrong righting its overseas operations will be substantial and could result in additional expenditures for cost reduction, idling excess capacity, or write-downs for past investments that are underperforming. Non-residential construction, Armstrong's primary end market, has shown some growth in recent months but it remains sluggish relative to domestic new housing construction. Armstrong will not be a substantial beneficiary from the higher expected growth in US new housing, since the market only represents about 5% of the company's total sales. Providing an offset to Armstrong's credit challenges are debt credit metrics that are solid relative to the B1 Corporate Family Rating. Following the tax-free spinoff of the flooring business to shareholders, scheduled for April 1, 2016, Armstrong will generate lower levels of absolute earnings but will do so with robust operating margins. Moody's projects modest organic growth in Armstrong's domestic business, the only driver of earnings at this time, resulting in EBITA margins nearing 16.5% over the next 12-18 months. Further, Moody's estimates interest coverage (measured as EBITA-to-interest expense) of about 5.0x and debt leverage nearing 3.25x over the same timeframe (all ratios incorporate Moody's standard adjustments), incorporating better operating performance and about $100 million in lower balance sheet debt. The WAVE JV will remain a critical earnings and cash contributor for Armstrong. Armstrong's good liquidity profile is supported by the company's ability to generate positive free cash flow throughout the year as well as maintain good availability under its revolving credit facility. Moody's anticipates the company will have ample financial flexibility to meet its basic cash requirements as well as support higher levels of working capital and capital expenditure needs as its business grows. The change in rating outlook to stable from negative reflects the certainty now in Armstrong's debt capital structure, and our expectations that the company will continue to post solid debt credit metrics relative to the B1 Corporate Family Rating over the next 12-18 months. Good liquidity gives Armstrong the ability to contend with its overseas operations and lackluster results. The B1 rating assigned to the $1.05 billion senior secured bank credit facility, the same rating as the Corporate Family Rating, results from it being the preponderance of debt in Armstrong's capital structure. The revolving credit facility and term loans are pari passu to each other in a recovery scenario. Positive rating actions could ensue if Armstrong benefits from an improved end market and successful progress in its overseas operations, resulting in operating performance that exceeds Moody's forecasts. A better liquidity profile or the following credit metric could support positive actions (ratios include Moody's standard adjustments): -- Free cash flow-debt sustained near 7.5% (6.0% for LTM 3Q15) Negative rating actions could occur if Armstrong's operating performance falls below our expectations, resulting in the following credit metrics (ratios include Moody's standard adjustments) and characteristics: -- EBITA-to-interest expense sustained near 3.0x -- Debt-to-EBITDA remaining above 4.5x -- Deterioration in the company's liquidity profile Armstrong World Industries, Inc., headquartered in Lancaster, PA, is a North American manufacturer and distributor of ceiling systems for use primarily in the construction and renovation of commercial and institutional buildings. ValueAct Group is the majority shareholder of Armstrong, owning about 17% of the company's stock. Revenues for the 12 months through December 30, 2015 totaled approximately $1.3 billion on a pro forma basis following the spin-off of its flooring business. ARMSTRONG WORLD: S&P Affirms 'BB' Rating, Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB' rating on Lancaster, Pa.-based Armstrong World Industries Inc. The outlook is stable. At the same time, S&P assigned its 'BB+' issue-level ratings to the company's proposed senior secured debt, including its $200 million revolving credit facility, $600 million term loan A, and $250 million term loan B. S&P also assigned its '2' recovery rating to the facilities, indicating its expectation for substantial (70% to 90%; higher end of the range) recovery in the event of a payment default. "Our stable outlook reflects our view that while the separation of Armstrong's flooring unit will significantly reduce the company's revenues and limit product diversity, it will significantly improve the company's profitability at the same time. We expect that Armstrong's credit measures will be about 2.1x and 28% in 2016 and will improve in 2017 as the company is able to improve its cash flow generation," said Standard & Poor's credit analyst Pablo Garces. "The outlook also reflects our view that the U.S. construction market will grow moderately in 2016 and 2017 but may encounter headwinds in some of its international markets. We expect Armstrong to keep total liquidity, including cash and a new revolving credit facility availability, in excess of $350 million." Although S&P expects the construction markets in which Armstrong operates to show improvement over the next 12 months, S&P views pockets of vulnerability in some other construction markets in which the company does business, namely Europe and Asia, which represent a combined 40% of global sales. S&P could lower its rating on Armstrong if the geographic or end markets tied to its ceilings business experience deterioration to the point that the company's profitability suffered and brought debt-to-EBITDA leverage above 4x or FFO to debt below 20%. Such an occurrence would lead S&P to view Armstrong's credit measures as more indicative of an aggressive financial risk profile. S&P could upgrade Armstrong if debt to EBITDA remained below 3x and FFO to debt improved to over 30% on a sustained basis, levels consistent with an intermediate financial risk profile. Other credit measures S&P would consider for an upgrade would be EBITDA interest coverage of more than 6x. These measures could be achieved if the company were able to continue to build on its earning base without incurring additional debt. Finally, S&P could upgrade Armstrong if it materially expanded its business and diversified its product offerings and end market users significantly, in addition to expanding its revenue base. Such events could cause us to view the company's business risk as satisfactory. AROWANA INC: Going Concern Doubt amid Need to Raise More Capital ---------------------------------------------------------------- Arowana Inc. will need to raise additional capital and cannot provide assurance that new financing will be available, raising substantial doubt about its ability to continue as a going concern, according to Kevin Tser Fah Chin, executive chairman of the board and chief executive officer, and Gary San Hui, chief financial officer, chief investment officer and director of the company in a regulatory filing with the U.S. Securities and Exchange Commission on January 19, 2016. As of November 30, 2015, the company had working capital of $51,895, cash of $44,171 in its operating bank accounts and $84,438,202 in marketable securities held in the trust account to be used for an initial Business Combination or to convert its ordinary shares. As of November 30, 2015, none of the amount on deposit in the Trust Account was available to be withdrawn. Messrs. Chin and Hui elaborated: "Until consummation of its initial Business Combination, the company will be using the funds not held in the Trust Account, plus the interest earned on the Trust Account balance (net of income, and other tax obligations) that may be released to the Company to fund its working capital requirements, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. "We anticipate that we will need to raise additional capital through loans or additional investments from its shareholders, officers, directors, or third parties to allow us to operate until our liquidation date, November 6, 2015. None of the shareholders, officers or directors are under any obligation to advance funds to, or to invest in, the company. Accordingly, the company may not be able to obtain additional financing. If the company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. "These conditions raise substantial doubt about the company's ability to continue as a going concern. "Until our liquidation date, November 6, 2016, we will be using our existing funds as well as additional capital for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. Through date of liquidation or an initial business combination, we anticipate that we will incur approximately: * $125,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating of a business combination; * $25,000 of expenses for the due diligence and investigation of a target business by our officers, directors and initial shareholders; * $130,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; * $120,000 for the administrative fee payable to Arowana International Ltd. ($10,000 per month until liquidation or an initial business combination is consummated); and * $80,000 for general working capital that will be used for miscellaneous expenses, including director and officer liability insurance premiums. "The amounts may vary depending upon the timing and work involved in assessing any initial business combination and are the best estimates determined by management." At November 30, 2015, the company had total assets of $84,535,061 and total shareholders' equity of $5,000,005. For the three months ended November 30, 2015, the company reported a net loss of $132,678 as compared with a net loss of $5,673 for the period from October 1, 2014 (inception) through November 30, 2014. A full-text copy of the company's quarterly report is available for free at: http://tinyurl.com/h7ma2ha North Sydney, Australia-based Arowana Inc. (NASDAQ: ARWAU) is a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a Business Combination). At November 30, 2015, the company had not yet commenced any operations. ATLANTIC CITY: Emergency Manager Defects for Consulting Job ----------------------------------------------------------- Jeannie O'Sullivan at Bankruptcy Law360 reported that Atlantic City's emergency manager, a restructuring executive whom New Jersey Gov. Chris Christie appointed to rescue the resort town's finances from a brutal downturn in gaming tax revenues, has left his post to take a position with Ankura Consulting Group, the firm said on Jan. 28, 2016. The departure of Kevin Lavin comes two days after elected officials and Christie agreed to stave off a potential bankruptcy through greater state involvement in the town's finances, and a few weeks after Lavin issued a dire report predicting the municipality's deficit. AXION INT'L: Asks Court to Allow Kronstadt to Credit Bid -------------------------------------------------------- Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated ask the U.S. Bankruptcy Court for the District of Delaware to: -- approve revised proposed bidding procedures for the sale of substantially all of the Debtors' assets; -- determine that Allen Kronstadt can credit bid the full amount of his secured claim on his collateral at the auction of those assets; -- approve the form and manner of the notice regarding the Sale and related Sale Hearing and the Cure Notice; -- approve the procedures for assumption and assignment of certain of the Debtors' prepetition executory contracts and leases of nonresidential real property; -- set the time, date and place of a later hearing to consider the Sale; and -- authorize and approve (a) the Sale of the Purchased Assets free and clear of any charge, claim, condition, equitable interest, lien, and (b) the assumption and assignment of certain contracts and leases. The Debtors first sought approval of bidding procedures in December. The Original Bidding Procedures Motion sought Court authority to sell all or substantially all of their assets to Kronstadt (or his designee) that contemplated a minimum credit bid by secured creditor Kronstadt of $3.2 million (together with other consideration), with the potential for an increase by Kronstadt of up to a total credit bid of $5.2 million, reflecting prepetition loans from Kronstadt, as well as the potential for a credit bid by Plastic Ties of the debtor-in-possession loan approved by the Court pursuant to an Interim DIP Order. On December 29, 2015 and January 4, 2016, the Delaware Court heard evidence on the Debtor's request for approval of the Original Bidding Procedures and the objections thereto by various parties, including the Official Committee of Unsecured Creditors. At the conclusion of the hearings, on January 4, 2016, the Court did not approve the Original Bidding Procedures Motion. The Court noted that there are numerous problems with the Bidding procedures. "The primary one is that the debtors are asking for a highly expedited sales process without hiring or having an experienced professional in place to run that process, based on the fact that a prepetition process was run," the Hon. Christopher S. Sontchi said. The Court indicated that it would approve bidding procedures that contemplated credit bidding by secured creditors against the assets in which they hold security interests. Subsequent to the January 4, 2016 hearing, the Debtors interviewed a number of potential investment bankers. On January 18, 2016, the Board of Directors for the Debtors approved in principle re-engagement of Gordian Group, LLC. The Debtors engaged Gordian prior to the bankruptcy filing to undertake substantial efforts to raise capital for the Debtors and sell the Debtors as a going concern. A hearing on the Revised Bidding Procedures is set for February 24, 2016, at 10:00 a.m. Objections to the Bidding Procedures are due February 17, 2016 at 4:00 p.m. The Sale Hearing Date and Sale Objection deadline are to be determined. Kronstadt's Holdings Commencing in August, 2012, Kronstadt, along with two other individuals and/or their affiliates, began to actively invest in the Debtors through the purchase of 8% secured convertible notes for which they were also issued warrants. On September 11, 2012, Kronstadt was elected to the Debtors' board of directors. Through December 31, 2014, Kronstadt purchased $5.2 million of the 8% notes. In addition to these notes, Kronstadt purchased $666,667 of a different series of 8% convertible notes, $333,333 of 12% convertible notes and entered into a 12% $3,000,000 Secured Note of which approximately $2.4 million has been advanced, which $3M Note was secured by a pledge of Holdings' equity interest in Axion Recycling and Axion International. Kronstadt never converted any of the Secured Notes. On June 9, 2015, Kronstadt resigned from the Debtors' board of directors. When the Debtors, in anticipation of an up-listing to a national exchange in April 2015, initiated a tender offer to acquire their outstanding warrants in exchange for the issuance of shares, Kronstadt tendered his warrants and obtained 10.9 million shares of the Debtors' common stock. Kronstadt was also issued approximately 1.6 million shares of common stock as interest on his convertible notes. On November 24, 2015, Kronstadt tendered to the Debtors in exchange for $2.00 the Additional Kronstadt Indebtedness. He also tendered back to the Debtors in exchange for $2.00 all shares of common stock, stock options and warrants registered in his individual name. As of the February 3, 2016, 224,803 shares of common stock are held by a tax-exempt foundation established by Kronstadt and trusts established for the benefit of Kronstadt's direct descendants. Kronstadt no longer holds shares of the Debtors in his individual name. As a result, as of the Petition Date, the total principal sum owed to Kronstadt by the Debtors pursuant to the Secured Notes (excluding legal fees, accrued interest and other charges) is approximately $5.2 million. The Kronstadt Secured Notes are secured by a first priority perfected security interest in all of the other assets of the Debtors other than the State of Ohio Collateral, Community Bank Collateral and the assets of Axion Recycling. Kronstadt has filed proofs of claims in Axion Holdings' and Axion International's bankruptcy cases on account of his prepetition claims against the Debtors. Other Secured Creditors and their Collateral Aside from Kronstadt, the Debtors have three secured creditors: (1) Community Bank of Ohio Community Bank is secured by a first-priority security interest in certain equipment owned by (A) Axion International and (B) Axion Recyclin. (2) the State of Ohio The State of Ohio is secured by a first-priority security interest in certain equipment owned by Axion Recycling. (3) Plastic Ties Financing LLC, and Plastic Ties is secured by a first-priority security interest in all of the Sale Assets except that Plastic Ties (a) holds a second-priority security interest in the Community Bank Collateral and the State of Ohio Collateral, and (b) is not secured by the Bankruptcy Causes of Action. EagleBank Debt During 2014, the Debtors borrowed $4,000,000 from EagleBank pursuant to the terms of a promissory note and loan agreement. Interest accrues on the outstanding principal at a fixed interest rate of 5% per annum and is payable monthly. All outstanding principal and accrued but unpaid interest is due on September 18, 2017. The EagleBank Debt is one-third guaranteed by Kronstadt, but is not secured by any of the Debtors' assets. The EagleBank Debt has been paid in full by the Guarantors. About Axion Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated manufacture, market and sell structural products and building materials, with an emphasis on railroad ties and construction mats. Using patented technology and proprietary know-how, they transform post-consumer and post-industrial recycled plastics, such as high-density polyethylene and glass-filled polypropylene, into products that are ideal replacements for similar products made from traditional materials such as wood, steel or concrete. Their manufacturing facilities (both of which are leased) are located in Zanesville, Ohio and Waco, Texas. Axion International, Inc., Axion International Holdings, Inc. and Axion Recycled Plastics Incorporated filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12415) on Dec. 2, 2015. The petition was signed by Donald W. Fallon as chief financial officer and treasurer. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Bayard, P.A. represents and Debtors as counsel. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims and noticing agent. Judge Christopher S. Sontchi has been assigned the case. An official committee of unsecured creditors has been appointed in the case. AXION INT'L: Community Bank Seeks Adequate Protection Payments -------------------------------------------------------------- The Community Bank, one of the secured creditors of Axion International, Inc., and its affiliated debtors, asks the U.S. Bankruptcy Court to allow it to enforce its rights against collateral, or, in the alternative, to compel adequate protection payments. The Debtors continue to use the assets and equipment that serve as collateral to the debt owed to Community Bank in their normal operations. "Ostensibly, given the Debtors' ongoing use of cash collateral, such operations generate income for the Debtors without any protection or benefit inuring to Community Bank," the Bank said. However, both counsel to the Debtors and counsel to Allen Kronstadt, an investor of the Debtors, have repeatedly stated that the Community Bank Collateral is easily replaceable for a fraction of the amount due under the Debtors' Notes. The Bank says the Debtors have not made any payments to it since October 14, 2015. The Debtors are in default of the Notes, and according to the budget presented with the Debtors' motion for debtor-in-possession financing, the Debtors have no plans to pay Community Bank any amounts during these cases. It is also not even clear that the Debtors are protecting or insuring the Community Bank Collateral during this case. There is no final Order granting debtor-in-possession financing, no Court-approved budget providing adequate protection to Community Bank, no plan of reorganization, and no sale process planned by the Debtors. The chapter 11 case appears to be in freefall. Community Bank says the Debtors' Debt to the Bank now exceeds $4,471,136.77. While Community Bank believes that its Collateral is worth significantly more than the amounts claimed by the Debtors, Community Bank agrees for purposes of this motion that the Community Bank Collateral is worth less than the Community Bank Debt, and has diminished in value since the Notes were entered into, and since the Petition Date, and is likely worth an amount less than the amount currently due under the Notes. Community Bank relates that by the Debtors' Bid Procedures Motion, an entity controlled by Krondstadt, as stalking horse bidder, sought to convert Mr. Krondstadt's loans to equity and buy collateral securing an obligation to the State of Ohio and the Community Bank Collateral for $500,000 -- significantly less than the amount owed to Community Bank and significantly less than the value of the Community Bank collateral alone. The Court conducted an evidentiary hearing on the Bid Procedures Motion, which covered two days. Significant evidence was presented by the Debtors and parties objecting to the Bid Procedures Motion. Following that hearing, for the reasons set forth on the record, the Court denied the Bid Procedures Motion. To be clear, Community Bank said, it never consented, under any circumstance, to satisfaction of its claims or liens or sale of the Community Bank Collateral for an amount less than the full amount of the Community Bank Debt. Prior to the hearing on the Bid Procedures Motion, in an effort to resolve Community Bank's objection to the Bid Procedure Motion, the Debtors conceded and agreed to Community Bank's right to credit bid the full amount of its claims at an auction for the Community Bank Collateral. At the hearing to consider the Bid Procedures Motion, the Debtors presented their proposed stalking horse bid, which claimed the Community Bank Collateral and the collateral of another secured creditor could be purchased for $500,000. The Debtors presented other subjective evidence of valuation of their assets, including what they characterized as value of the Community Bank Collateral. The Bank is represented by: CROSS & SIMON, LLC Christopher P. Simon, Esq. Kevin S. Mann, Esq. 1105 N. Market St., Suite 901 Wilmington, DE 19801 Tel: (302) 777-4200 Fax: (302) 777-4224 E-mail: csimon@crosslaw.com kmann@crosslaw.com About Axion Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated manufacture, market and sell structural products and building materials, with an emphasis on railroad ties and construction mats. Using patented technology and proprietary know-how, they transform post-consumer and post-industrial recycled plastics, such as high-density polyethylene and glass-filled polypropylene, into products that are ideal replacements for similar products made from traditional materials such as wood, steel or concrete. Their manufacturing facilities (both of which are leased) are located in Zanesville, Ohio and Waco, Texas. Axion International, Inc., Axion International Holdings, Inc. and Axion Recycled Plastics Incorporated filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12415) on Dec. 2, 2015. The petition was signed by Donald W. Fallon as chief financial officer and treasurer. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Bayard, P.A. represents and Debtors as counsel. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims and noticing agent. Judge Christopher S. Sontchi has been assigned the case. An official committee of unsecured creditors has been appointed in the case. The Law Offices of Sandra Mayerson and Morris James LLP's Eric J. Monzo, Esq. represent the Committee. The Debtors are seeking to sell their assets at an auction in March 2016. Washington Amigos, Plastic Ties and Allen Kronstadt, a former director, have offered to acquire certain of the assets. They are represented by Pillsbury Winthrop Shaw Pittman LLP's Patrick Potter, Esq.; and Stein Sperling Bennett De Jong Driscoll PC's Don Sperling, Esq. Gordian Group, LLC, is assisting the Debtors with respect to the sale. AXION INT'L: Proposes March 14 Bid Deadline, March 18 Auction ------------------------------------------------------------- Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated, which are seeking to sell their assets, said Potential Bidders must submit their offer to: (i) counsel to the Debtors Bayard, P.A. 222 Delaware Avenue, Suite 900 Wilmington, DE 19801 Attn: Scott D. Cousins, Esq. Justin R. Alberto, Esq. E-mail: scousins@bayardlaw.com jalberto@bayardlaw.com (ii) counsel to the Committee Law Offices of Sandra Mayerson 136 E. 64th Street, Suite 11E New York, NY 10065 Attn: Sandra Mayerson, Esq. E-mail: sandy@sandymayersonlaw.com (iii) counsel to Washington Amigos, Plastic Ties and Kronstadt -- the purchasers Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street, NW Washington, DC 20036 Attn: Patrick Potter, Esq. E-mail: patrick.potter@pillsburylaw.com - and - Stein Sperling Bennett De Jong Driscoll PC 25 West Middle Lane Rockville, MD 20850 Attn: Don Sperling, Esq. E-mail: dsperling@steinsperling.com (iv) Gordian Group, LLC 950 Third Avenue, 17th Floor New York, NY 10022 Attn: Mr. Damian Britt (v) counsel to the Office of the United States Trustee 844 King Street, Suite 2207 Wilmington, DE 19801 Attn: Natalie Cox, Esq. Bids must be submitted not later than March 14, 2016, at 5:00 p.m. (prevailing Eastern time). Debtors propose that no later than March 16, 2016 at 4:00 p.m. (prevailing Eastern time), the Debtors will notify all Qualified Bidders of (i) the highest or otherwise best Qualified Bid for the Acquired Assets or any portion(s) thereof and (ii) the time and place of the Auction. The Debtors propose that the Auction shall commence at 10:00 a.m. (prevailing Eastern time) on March 18, 2016 at the offices of Bayard, P.A. The Debtors propose that the Sale Hearing be conducted by the Bankruptcy Court on or before March 24, 2016. The Debtors and Gordian Group will market, offer for sale and if there are competing bidders, auction the Debtors' Assets in accordance with these "Lots": 1. Lot 1: Lot 1 is comprised of all Sale Assets except (and therefore expressly excludes) the Community Bank Collateral and the State of Ohio Collateral. 2. Lot 2: Lot 2 is comprised of the Bankruptcy Causes of Action (which by definition and for the sake of clarity are included in Lot 1). 3. Lot 3: Lot 3 is comprised of the General Causes of Action (which by definition and for the sake of clarity are included in Lot 1). 4. Lot 4: Lot 4 is comprised of the Community Bank Collateral (but excluding the State of Ohio Collateral) (which by definition and for the sake of clarity is excluded from Lot 1). 5. Lot 5: Lot 5 is comprised of the State of Ohio Collateral (which by definition and for the sake of clarity is excluded from Lot 1). 6. Lot 6: Lot 6 is comprised of the Debtors' "mat" business and any associated intellectual property (which by definition and for the sake of clarity is included from Lot 1). 7. Lot 7: Lot 7 is comprised of the Debtors' "rail-ties" business and any associated intellectual property (which by definition and for the sake of clarity is included from Lot 1). 8. Lot 8: Lot 8 is comprised of the common equipment associated with the Debtors' "mat" business and "rail- ties" business and any associated intellectual property (which by definition and for the sake of clarity is included from Lot 1). The Debtors have solicited pre-auction bids from Plastic Ties, their DIP lender; and Kronstadt. Plastic Ties and Kronstadt have made a first offer -- Offer Number 1 -- wherein they will credit bid their secured claims in connection with a transaction pursuant to which, after court approval and upon satisfaction or waiver of any conditions to closing, an entity called Washington Amigos LLC, would take title to the assets comprising Lot 1. For purposes of bidders competing against (and for substantially the same set of Sale Assets comprising) Offer Number 1, with respect to Lot 1, Plastic Ties will credit bid the actual and full amount of the DIP Loan Balance, which is estimated to be in the range of $2 million as of closing (together with the Plastic Ties, Kronstadt and/or Washington Amigos' cash bids for Lots 4 and 5. In advance of the Bid Deadline, Qualified Bidders may contact the Debtor or Gordian to determine the then outstanding DIP Loan Balance for purposes of making a competitive bid against Offer Number 1. The DIP Loan Balance as of the Auction will be announced at the commencement of the Auction. In the event of a competing cash bid for Lot 1, Kronstadt may credit bid up to the full amount of his secured claim; provided, however, that Kronstadt has agreed to cap and otherwise limit his credit bid with respect to Lot 1, such that when combined with the then-outstanding DIP Loan Balance, Plastic Ties and Kronstadt's bid for Lot 1 will equal (and be capped at) $7.5 million. If no entity or person submits a bid for Lot 1 in excess of the credit bids of Plastic Ties and Kronstadt, and the transaction contemplated by Offer Number 1 is approved by the Bankruptcy Court, then Plastic Ties and Kronstadt shall be entitled to allocate as much or as little of their credit bids to the purchase price as they deem appropriate in their sole and absolute discretion (and Washington Amigos may assume as much or as little of Plastic Ties' and Kronstadt's debts as agreed upon among the three parties in their sole and absolute discretion), so long as the Debtors and their bankruptcy estates are no longer liable for any of such indebtedness. With respect to Offer Number 1 (and subject to the acquisition by Washington Amigos of Lot 1): (1) Plastic Ties, Kronstadt and/or Washington Amigos will start the Revised Bidding for Lot 4 by offering to pay (or cause to be paid) the sum of $550,000 in cash conditioned on a closing by them on Lot 1. (2) Plastic Ties, Kronstadt and/or Washington Amigos will start the Revised Bidding for Lot 5 by offering to pay (or cause to be paid) the sum of $50,000 in cash conditioned on a closing by them on Lot 1. (3) Plastic Ties, Kronstadt and/or Washington Amigos will pay (or cause to be paid) the cure costs of any executory contracts or unexpired leases assumed and assigned to Washington Amigos in connection with the Sale. The payments shall be made simultaneous with their closing on Lot 1. An alternative offer -- Offer Number 2 -- has been made Plastic Ties and Kronstadt. Plastic Ties and Kronstadt will credit bid their secured claims in connection with a transaction pursuant to which, after court approval and upon satisfaction or waiver of any conditions to closing, Washington Amigos would take title to the Sale Assets comprising Lot 1. For purposes of bidders competing against (and for substantially the same set of Sale Assets comprising) Offer Number 2, with respect to Lot 1 Plastic Ties may credit bid the actual and full amount of the DIP Loan Balance (estimated to be in the range of $2 million as of closing). In the event of a competing cash bid for Lot 2, Kronstadt has agreed to cap and otherwise limit his credit bid with respect to Lot 2 in the amount of [$7.5 million]; and provided further that Kronstadt has agreed to allocate his credit bid between Lot 1, Lot 2 and Lot 3 for any increase in bids in order to allow the Debtors to compare bids. With respect to Offer Number 2 (and subject to the acquisition by Washington Amigos of Lot 1): (1) Plastic Ties will start its credit bidding on the Sale Assets comprising Lot 1, but excluding the assets comprising Lots 2 and 3, at $1 million. (2) Kronstadt will start his credit bidding on the Sale Assets comprising Lot 2 at $50,000. (3) Plastic Ties will start its credit bidding on the Sale Asset comprising Lot 3 at $50,000. If no entity or person submits a bid for Lots 1 through 3 in excess of the credit bids of Plastic Ties and Kronstadt, and the transaction contemplated by Offer Number 2 is approved by the Bankruptcy Court, then Plastic Ties and Kronstadt shall be entitled to allocate as much or as little of their credit bids to the purchase price as they deem appropriate in their sole and absolute discretion (and Washington Amigos may assume as much or as little of Plastic Ties' and Kronstadt's debts as agreed upon among the three parties in their sole and absolute discretion), so long as the Debtors and their bankruptcy estates are no longer liable for any of such indebtedness. Plastic Ties, Kronstadt and/or Washington Amigos will pay (or cause to be paid) the sum of $550,000 in cash at closing for Lot 4 (and subject to the acquisition by Plastic Ties of Lot 1). Plastic Ties, Kronstadt and/or Washington Amigos will pay (or cause to be paid) the sum of $50,000 in cash at closing for Lot 5 (and subject to the acquisition by Plastic Ties of Lot 1). Plastic Ties, Kronstadt and/or Washington Amigos will pay (or cause to be paid) the cure costs of any executory contracts or unexpired leases assumed and assigned to Washington Amigos in connection with the Sale. About Axion Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated manufacture, market and sell structural products and building materials, with an emphasis on railroad ties and construction mats. Using patented technology and proprietary know-how, they transform post-consumer and post-industrial recycled plastics, such as high-density polyethylene and glass-filled polypropylene, into products that are ideal replacements for similar products made from traditional materials such as wood, steel or concrete. Their manufacturing facilities (both of which are leased) are located in Zanesville, Ohio and Waco, Texas. Axion International, Inc., Axion International Holdings, Inc. and Axion Recycled Plastics Incorporated filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12415) on Dec. 2, 2015. The petition was signed by Donald W. Fallon as chief financial officer and treasurer. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Bayard, P.A. represents and Debtors as counsel. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims and noticing agent. Judge Christopher S. Sontchi has been assigned the case. An official committee of unsecured creditors has been appointed in the case. AXION INT'L: To Halt Filing of Periodic Reports to SEC ------------------------------------------------------ Axion International Holdings, Inc., said in a Form 8-K filing with the Securities and Exchange Commission that as a result of its Chapter 11 proceeding, the Company will no longer file periodic reports under the Securities Exchange Act of 1934 and its shares will no longer be eligible for legend removal under Rule 144 for failure to continue to meet the current reporting requirement under Rule 144. In an email dated December 7, 2015, the Financial Industry Regulatory Authority notified the Company that it would be moved from OTCQB to OTC Pink Current Information as a result of the Company's inability to comply with the standards found in Section 2 of the OTCQB Eligibility Standards. The Company's non-compliance with such standards was a result of its Bankruptcy Filing. About Axion Axion International, Inc., Axion International Holdings, Inc. and Axion Recycled Plastics Incorporated filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12415) on Dec. 2, 2015. The petition was signed by Donald W. Fallon as chief financial officer and treasurer. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Bayard, P.A. represents and Debtors as counsel. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims and noticing agent. Judge Christopher S. Sontchi has been assigned the case. AXION INT'L: Unsecured Creditors Challenge Kronstadt Lien --------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated ask the Delaware Bankruptcy Court for leave, standing and authority to commence, prosecute, settle and recover certain causes of action on behalf of the Debtors' estates in order to challenge, recharacterize and subordinate alleged liens and payments made. The purpose of the Standing Motion, the Committee explains, is to challenge certain liens alleged to be held by Allen Kronstadt and/or his affiliated entities, and to recharacterize certain payments made by the Debtors to the DIP Lender, Plastic Ties Financing LLC, as improper payments on a pre-petition debt, as well as to recharacterize and/or equitably subordinate the claims of Kronstadt. The Committee disagrees with the Debtors' claim that Kronstadt has valid, perfected and enforceable liens against all of the assets of all three Debtors, subordinate only to the liens of The Community Bank and the State of Ohio. The Committee will also attempt to recharacterize a $350,000 payment made by the Debtors from their first borrowing under the DIP Loan to repay the DIP Lender, Plastic Ties, for pre-petition monies advanced as an improper payment of a pre-petition debt, which the Committee seeks to have disgorged to the Debtors. Under the Order authorizing the Debtors to tap into the Plastic Ties DIP Facility, the Committee was given until February 1, 2016, to mount a Lien Challenge. The Committee seeks to extend that date. The Committee recounts that the DIP Loan was negotiated by Kronstadt and his counsel, and Kronstadt appears to control the DIP Lender. They -- together with the initial stalking horse purchaser, Washington Amigos, LLC -- share the same counsel. As part of the sale and bidding procedures, it was proposed that Kronstadt would credit bid some or all of his putative $5.2 million lien to buy all of the assets of the three Debtors, leaving the Debtors with no cash and no assets. The Committee objected on the ground, inter alia, that Kronstadt could not credit bid for all the assets, as he did not have a lien on all the assets. Kronstadt, and the Debtors, have maintained that Kronstadt has a second lien on the collateral of The Community Bank. This is a false claim, the Committee said. The Committee believes it has a strong case to recharacterize some or all of Kronstadt's debt as equity. The Committee also contends Kronstadt has misused his insider position both before and during this case to influence the Debtors to take actions which have gravely harmed creditors and provided him with undue advantages. The Court set February 8, 2016 at 11:00 a.m. as the deadline to respond to the Committee's Motion; and scheduled the hearing on the Motion for February 10, 2016 at 12:30 p.m. Andrew R. Vara, the Acting United States Trustee, Region 3, appointed these entities to the Committee of Unsecured Creditors in connection with the case: 1. Addax Trading LLC Attn: Jose de Jesus Cuellar Esparza 1127 Eldridge Pkwy., Ste. 300 #214 Houston, TX 77077 Tel: 281-407-0916 Fax: 281-407-0916 2. Coyote Logistics Attn: Scotty McAliley 960 North Point Pkwy., Ste. 150. Alpharetta, GA 30005 Tel: 44-208-123-6685 Fax: 44-800-066-4854 3. Sicut Enterprises Ltd. Attn: Anil Aggarwal Kemp House, 152-160 City Rd. London, EUV 2DW, UK Tel: 650-367-0854 Fax: 650-367-0858 Proposed Counsel for the Official Committee of Unsecured Creditors: MORRIS JAMES LLP Eric J. Monzo, Esq. 500 Delaware Avenue, Suite 1500 P.O. Box 2306 Wilmington, DE 19899-2306 Telephone: (302) 888-6800 Facsimile: (302) 571-1750 E-mail: emonzo@morrisjames.com - and - Sandra E. Mayerson, Esq. LAW OFFICES OF SANDRA MAYERSON 136 E. 64th Street, Suite 11E New York, NY 10065 Telephone: (917) 446-6884 Facsimile: (212) 750-1906 About Axion Axion International, Inc., Axion International Holdings, Inc., and Axion Recycled Plastics Incorporated manufacture, market and sell structural products and building materials, with an emphasis on railroad ties and construction mats. Using patented technology and proprietary know-how, they transform post-consumer and post-industrial recycled plastics, such as high-density polyethylene and glass-filled polypropylene, into products that are ideal replacements for similar products made from traditional materials such as wood, steel or concrete. Their manufacturing facilities (both of which are leased) are located in Zanesville, Ohio and Waco, Texas. Axion International, Inc., Axion International Holdings, Inc. and Axion Recycled Plastics Incorporated filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12415) on Dec. 2, 2015. The petition was signed by Donald W. Fallon as chief financial officer and treasurer. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Bayard, P.A. represents and Debtors as counsel. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims and noticing agent. Judge Christopher S. Sontchi has been assigned the case. An official committee of unsecured creditors has been appointed in the case. The Law Offices of Sandra Mayerson represents the Committee. The Debtors are seeking to sell their assets at an auction in March 2016. Washington Amigos, Plastic Ties and Allen Kronstadt, a former director, have offered to acquire certain of the assets. They are represented by Pillsbury Winthrop Shaw Pittman LLP's Patrick Potter, Esq.; and Stein Sperling Bennett De Jong Driscoll PC's Don Sperling, Esq. Gordian Group, LLC, is assisting the Debtors with respect to the sale. BAYTEX ENERGY: Moody's Cuts CFR to Caa1, Outlook Neg. ----------------------------------------------------- Moody's Investors Service downgraded Baytex Energy Corp.'s Corporate Family Rating (CFR) to Caa1 from Ba3, Probability of Default Rating to Caa1-PD from Ba3-PD and senior unsecured notes rating to Caa1 from Ba3. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. The rating outlook is negative. This action resolves the review for downgrade that was initiated on December 16, 2015. "The downgrade reflects the material decline in Baytex's cash flow we expect in 2016 and 2017, which will result in weak cash flow-based leverage metrics," said Paresh Chari, Moody's Analyst. "Baytex will also breach financial covenants in 2016 and will need to get relief from its banks." Downgrades: Issuer: Baytex Energy Corp. -- Probability of Default Rating, Downgraded to Caa1-PD from Ba3- PD -- Corporate Family Rating, Downgraded to Caa1 from Ba3 -- Senior Unsecured Shelf, Downgraded to (P)Caa1 from (P)Ba3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1(LGD4) from Ba3(LGD4) Ratings Lowered: Speculative Grade Liquidity Rating, Lowered to SGL-4 from SGL-3 Outlook Actions: Issuer: Baytex Energy Corp. -- Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE Baytex's Caa1 Corporate Family Rating (CFR) reflects expected high leverage in 2017 (debt to EBITDA of 9x; retained cash flow/debt of 5%) weak liquidity (SGL-4) and a weak leveraged full-cycle ratio (LFCR near zero). As well, Moody's expects production and reserves to decline in 2016 and 2017, with total production falling 10% year over year, mostly coming from Canadian heavy oil. The rating is supported by the company's sizeable production and reserves base, evident with expected EBITDA of about C$200 million in 2017. The SGL-4 Speculative Grade Liquidity Rating reflects Baytex's weak liquidity through 2016. As of September 30, 2015 and pro forma the revolver reduction in December 2015, Baytex had negligible cash and roughly C$850 million available under C$1.1 billion of credit facility due in June 2019, which is unsecured and not subject to borrowing base redeterminations. Moody's expects Baytex to fund 2016 negative free cash flow of about C$50 million through the revolver. Baytex has no material debt maturities until 2021. Moody's expects Baytex to breach the total debt and senior debt to EBITDA covenants in the second half of 2016 (Total Debt to EBITDA less than 5.25x, Senior Debt to EBITDA less than 5.25x, Senior Debt to Capitalization less than 65%, Fixed Charge coverage greater than 2.5x) and it will need to renegotiate with its lenders in 2016 to get relief. Baytex may also gain liquidity from asset dispositions without necessarily using the proceeds towards debt repayment due to its fully unsecured capital structure. In accordance with Moody's Loss Given Default (LGD) Methodology, the senior unsecured notes are rated Caa1, at the CFR, as all the debt in the capital structure is unsecured. If the revolving credit facility becomes secured, the notes would likely be notched lower than the CFR. The negative outlook reflects Moody's view that Baytex's liquidity could worsen as it funds negative free cash flow with revolver drawings, and while Moody's expects the company to negotiate covenant relief with its bankers, revolver availability may be reduced. The rating could be upgraded to B3 if retained cash flow to debt is likely to trend towards 10%, EBITDA to interest is above 2x and liquidity is adequate. The rating could be downgraded to Caa2 if EBITDA to interest falls below 1.5x or if liquidity worsens. Baytex Energy Corp. is a Calgary, Alberta-based independent exploration and production company that has average daily production of approximately 65,000 boe/d net of royalties (barrel of oil equivalent). BELLATRIX EXPLORATION: Moody's Cuts Corp. Family Rating to Caa1 --------------------------------------------------------------- Moody's Investors Service downgraded Bellatrix Exploration Ltd.'s Corporate Family Rating (CFR) to Caa1 from B1, Probability of Default Rating to Caa1-PD from B1-PD and senior unsecured notes rating to Caa2 from B3. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-2. The rating outlook is negative. This action resolves the review for downgrade that was initiated on January 21, 2016. "The downgrade reflects the material decline in Bellatrix's cash flow expected in 2016 and 2017, which will result in weak leverage metrics," said Paresh Chari, Moody's Analyst. "Bellatrix will also be tight on its sole financial covenant, in 2016 limiting its ability to draw under the revolver." Downgrades: Issuer: Bellatrix Exploration Ltd. -- Probability of Default Rating, Downgraded to Caa1-PD from B1- PD -- Corporate Family Rating, Downgraded to Caa1 from B1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2(LGD5) from B3(LGD5) Ratings Lowered: -- Speculative Grade Liquidity Rating, Lowered to SGL-4 from SGL- 2 Outlook Actions: Issuer: Bellatrix Exploration Ltd. -- Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE Bellatrix's Caa1 Corporate Family Rating (CFR) reflects weak liquidity in 2016 (SGL-4), high expected leverage (debt to EBITDA around 6.5x, retained cash flow to debt 10%) in 2016 and 2017, EBITDA/interest coverage of 2x, concentration in the Deep Basin play in western Alberta and a weak leveraged full-cycle ratio (LFCR approaching 0x). While the company produces almost 35,000 boe/d it will produce modestly negative free cash flow over the next few years. The SGL-4 Speculative Grade Liquidity Rating reflects weak liquidity through 2016. At September 30, 2015 and pro forma for the December 2015 borrowing base reduction, Bellatrix had no cash and C$193 million available under its C$540 million borrowing base revolver maturing May 2017. Moody's expects modest negative free cash flow through 2016. Bellatrix will likely remain in compliance with its sole financial covenant (Senior Debt to EBITDA less than 3.5x) through this period, although it is less certain. Bellatrix has the flexibility to raise funds by selling its midstream assets. In accordance with Moody's Loss Given Default (LGD) Methodology, Bellatrix's US$250 million unsecured notes are rated Caa2, one notch below the Caa1 CFR, reflecting the priority ranking of the senior secured credit facilities relative to the unsecured notes. The negative outlook reflects Moody's view that Bellatrix's liquidity will remain weak in 2016. The rating could be upgraded to B3 if retained cash flow to debt is likely to trend towards 10%, EBITDA to interest is above 2x, and if adequate liquidity is likely. The rating could be downgraded to Caa2 if EBITDA to interest falls below 1.5x or if liquidity worsens. Bellatrix Exploration Ltd. is a Calgary, Alberta-based independent exploration and production (E&P) company with operations in the Deep Basin play in west central Alberta producing about 35,000 boe/d net of royalties (barrel of oil equivalent). BERNARD L. MADOFF: Court Says HSBC Off Hook in Asset Freeze Bout ---------------------------------------------------------------- Y. Peter Kang at Bankruptcy Law360 reported that a New York appeals court on Jan. 28, 2016, tossed a suit filed by investors in Bernie Madoff's doomed Ponzi scheme who claimed HSBC had no right to freeze their assets, finding that the account agreements signed by the investors explicitly authorized the bank to do so. A five-judge panel with the New York Supreme Court's Appellate Division upheld a lower court's dismissal of a breach of fiduciary duty claim in the suit filed by ANR Investment Co. Ltd. and others against HSBC Private Bank. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has commenced distributions to victims. As of the end of May 2015, the SIPA Trustee has recovered more than $10.699 billion and has distributed approximately $7.576 billion. When additional settlements awaiting distribution are taken into account, the recovery in the Madoff liquidation proceeding totals $10.734 billion. BLACK ELK ENERGY: Files Decommissioning Plan -------------------------------------------- Black Elk Energy Offshore Operations, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a copy of its Decommissioning Plan that was prepared by Blackhill Partners, LLC, and Baker Hostetler LLP. The Debtor's professionals have spent considerable time and resources analyzing Black Elk's decommissioning obligations, and the summary conclusions are as follows: -- Black Elk does not have sufficient collateral or other funds to cover the entirety of its Plugging and Abandonment obligations. -- Black Elk has not received a bid that covers all P&A obligations. -- Black Elk does not have funds or cash to start P&A, and will be reliant on other financing. -- Many of the bids submitted had conditions requiring that the contractor receive a full package of work (not just selected low cost bids). Accordingly, Black Elk does not have any way to mix and match bids to solve for the absolute lowest cost for each property. -- All parties in the case will have to work cooperatively and make certain concessions in order to limit exposure. -- There are certain properties with such large underfunded liability that, if decommissioned, would be prohibitive to the entire P&A plan; any P&A plan must not only resolve as much P&A as feasible but must also generate value to the estate to viable. Notwithstanding those factors, the Debtor's P&A plan would provide a substantial reduction in P&A liability exposure for all parties (and in turn administrative claims to the estate) and still provide for a return of certain excess collateral to the estate. A copy of the Decommissioning Plan is available for free at: http://bankrupt.com/misc/Black_Elk_554_Decommiss_Plan.pdf The Debtor's attorneys: BAKER & HOSTETLER LLP Pamela Gale Johnson, Esq. 811 Main Street, Suite 1100 Houston, TX 77002-6111 Tel: (713) 751-1600 Fax: (713) 751-1717 E-mail: pjohnson@bakerlaw.com - and - BAKER & HOSTETLER LLP Elizabeth A. Green, Esq. Jimmy D. Parrish, Esq. 200 South Orange Ave. SunTrust Center, Suite 2300 Orlando, FL 32801-3432 Tel: (407) 649-4000 Fax: (407) 841-0168 E-mail: egreen@bakerlaw.com jparrish@bakerlaw.com About Black Elk Black Elk Energy Offshore Operations, LLC, is a Houston, Texas based privately held limited liability company engaged in the acquisition, exploitation, development and production of oil and natural gas properties primarily in the shallow waters of the Gulf of Mexico near the coast of Louisiana and Texas. Black Elk had total assets of $339.7 million and total debt of $432.3 million as of Sept. 30, 2014. Judge Letitia Z. Paul of the U.S. Bankruptcy Court in the Southern District of Texas placed Black Elk under Chapter 11 bankruptcy protection on Sept. 1, 2015, converting an involuntary Chapter 7 bankruptcy petition by its creditors. Thereafter, the Company filed with the Court a voluntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 15-34287) on Sept. 10, 2015. Judge Paul later recused herself from the case and the matter was given to Judge Marvin Isgur, according to information posted on the case docket on Sept. 14. The Debtor is represented by Elizabeth E. Green of Baker & Hostetler. Blackhill Partners' Jeff Jones is the Debtor's Chief Restructuring Officer. C & A INVESTMENTS: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: C & A Investments II, Inc. P.O. Box 1246 Jena, LA 71342 Case No.: 16-80111 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Western District of Louisiana (Alexandria) Judge: Hon. John W. Kolwe Debtor's Counsel: Bradley L. Drell, Esq. GOLD, WEEMS, BRUSER, SUES & RUNDELL POB 6118 Alexandria, LA 71307-6118 Tel: (318) 445-6471 Email: bdrell@goldweems.com Total Assets: $1.59 million Total Liabilities: $1.73 million The petition was signed by Jessica McDougald, president. A list of the Debtor's 14 largest unsecured creditors is available for free at http://bankrupt.com/misc/lawb16-80111.pdf CALIFORNIA HISPANIC: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: California Hispanic Commission on Drug and Alcohol Abuse aka CHCADA 1419 21st St Sacramento, CA 92511 Case No.: 16-10424 Chapter 11 Petition Date: February 2, 2016 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Hon. Scott C Clarkson Debtor's Counsel: Michael R Totaro, Esq. TOTARO & SHANAHAN POB 789 Pacific Palisades, CA 90272 Tel: 310-573-0276 Fax: 310-496-1260 Email: Ocbkatty@aol.com Total Assets: $5.80 million Total Liabilities: $3.61 million The petition was signed by James Hernandez, director. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb16-10424.pdf CANTOR COMMERCIAL 2016-C3: Fitch Rates Cl. E Certificate BB+ ------------------------------------------------------------ Fitch Ratings has assigned these ratings and Rating Outlooks to Cantor Commercial Real Estate CFCRE 2016-C3 Mortgage Trust commercial mortgage pass-through certificates: -- $29,088,000 class A-1 'AAAsf'; Outlook Stable; -- $40,514,000 class A-SB 'AAAsf'; Outlook Stable; -- $200,000,000 class A-2 'AAAsf'; Outlook Stable; -- $222,884,000 class A-3 'AAAsf'; Outlook Stable; -- $528,543,000b class X-A 'AAAsf'; Outlook Stable; -- $36,057,000 class A-M 'AAAsf'; Outlook Stable; -- $37,815,000 class B 'AA-sf'; Outlook Stable; -- $37,815,000b class X-B 'AA-sf'; Outlook Stable; -- $37,816,000 class C 'A-sf'; Outlook Stable; -- $37,816,000b class X-C 'A-sf'; Outlook Stable; -- $41,334,000a class D 'BBB-sf'; Outlook Stable; -- $41,334,000ab class X-D 'BBB-sf'; Outlook Stable; -- $10,553,000a class E 'BB+sf'; Outlook Stable; -- $10,553,000ab class X-E 'BB+sf'; Outlook Stable; -- $8,795,000a class F 'BB-sf'; Outlook Stable; -- $8,795,000ab class X-F 'BB-sf'; Outlook Stable; -- $7,915,000a class G 'B-sf'; Outlook Stable; -- $7,915,000ab class X-G 'B-sf'; Outlook Stable. (a) Privately placed and pursuant to Rule 144A. (b) Notional amount and interest-only. Fitch does not rate the $30,780,602 class H certificates or the $30,780,602 class X-H certificates. The certificates represent the beneficial ownership interest in the trust, primary assets of which are 38 loans secured by 67 commercial properties having an aggregate principal balance of approximately $703.6 million as of the cut-off date. The loans were contributed to the trust by Cantor Commercial Real Estate Lending, L.P., Societe Generale, and Liberty Island Group I LLC. Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 85.4% of the properties by balance, cash flow analysis of 85.8%, and asset summary reviews on 85.8% of the pool. KEY RATING DRIVERS High Fitch Leverage: The pool has higher leverage statistics than other recent Fitch-rated fixed-rate multiborrower transactions. The pool's Fitch debt service coverage ratio (DSCR) of 1.12x is lower than the 2015 and 2014 averages of 1.18x and 1.19x, respectively. The pool's Fitch loan-to-value (LTV) of 109.5% is higher than the 2015 and 2014 averages of 109.3% and 106.2%, respectively. Below-Average Amortization: Twelve loans (36.1% of the pool) are full-term interest-only, and nine loans representing 23.9% of the pool are partial interest only. The pool is scheduled to amortize by 10.5% over the term of the loans, lower than the 2014 and 2015 averages of 12.0% and 11.7%, respectively. Low Hospitality Exposure: Only three loans that make up 5.1% of the total pool are collateralized by hotel assets, which is much lower than the average hotel exposure of 17.0% in 2015. The pool is concentrated in retail with 34.3% exposure compared to the 2015 average of 27.0% retail exposure. RATING SENSITIVITIES For this transaction, Fitch's net cash flow (NCF) was 6.6% below the most recent net operating income (NOI; for properties for which a recent NOI was provided, excluding properties that were stabilizing during this period). Unanticipated further declines in property-level NCF could result in higher defaults and loss severities on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to CFCRE 2016-C3 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A-sf' could result. In a more severe scenario, in which NCF declined a further 30% from Fitch's NCF, a downgrade of the senior 'AAAsf' certificates to 'BBBsf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 11 - 12 DUE DILIGENCE USAGE Fitch was provided with due diligence information from KPMG. The due diligence focused on a comparison and re-computation of certain characteristics with respect to each of the 38 mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on its analysis. CD COMMERCIAL 2007-CD4: Fitch Lowers Rating on 10 Certs to 'Dsf' ---------------------------------------------------------------- Fitch Ratings has downgraded 10, upgraded two, and affirmed nine classes of CD Commercial Mortgage Trust commercial mortgage pass-through certificates series (2007-CD4). KEY RATING DRIVERS The upgrades are the result of increased credit enhancement due to additional defeasance and paydown since Fitch's last rating action. The downgrades reflect the realized losses incurred on loans recently liquidated. Fitch modeled losses of 4% of the remaining pool; expected losses on the original pool balance total 4.3%, including $155.5 million (2.3% of the original pool balance) in realized losses to date. Fitch has designated 26 loans (6.8%) as Fitch Loans of Concern, which includes five specially serviced assets (1.4%). As of the January 2016 distribution date, the pool's aggregate principal balance has been reduced by 52.1% to $3.18 billion from $6.64 billion at issuance. Per the servicer reporting, 36 loans (28.8% of the pool) are defeased. Interest shortfalls are currently affecting classes J through S. The largest contributor to expected losses is the specially-serviced Lake Center V loan (0.5% of the pool), which is secured by an 88,785 square foot (sf) office property located in Marlton, NJ. The largest tenants include Virtua Health Inc. (65%), expiration May 31, 2015; and Paychex North America, Inc. (24%), March 31, 2017. The loan was transferred to special servicing in February 2015 due to imminent default. Virtua Health, Inc., whose lease expired in May 2015, is expected to vacate after a period of holdover. Once Virtua vacates, the property's occupancy will decrease to 26%. The special servicer was unable to confirm at this time if Virtua has vacated and has contacted the borrower for an update. As of December 2015, the property was 92% occupied with average rent $39 per sf. Per REIS as of third quarter (3Q15), the Burlington office submarket vacancy is 18.3% with asking rent $21.50 per sf. The next largest contributor to expected losses is the 2500 Building loan (0.4%), a 97,476 sf office building that was built in 1982 and is located in Doral, FL. The largest tenants are Student Aid Center (20%), expiration Oct. 31, 2019; and Recovera, Inc. (6%), Oct. 31, 2019. The property has suffered fluctuations in occupancy since 2007; the largest tenant downsized their space 7% from 27,623 sf to 19,334 sf. Per the Sept. 30, 2015 rent roll, the property is 69% occupied with average rent $17.57 per sf. Two new leases totaling 2% were signed in 4Q15, which brings occupancy to 70%. Per REIS as of 3Q15, the Miami metro office vacancy is 15.2% with average asking rent $32.25 per sf. The most recently reported debt service coverage ratio as of Sept. 30, 2015, was 0.20x, up from the prior year's 0.01x. The third largest contributor to expected losses is the The Shoppes at South Bay (Walmart) loan (1.1%), which is secured by a 196,912 sf retail center located in Los Angeles, CA. The largest tenants are Wal-Mart (75%), expiration June 14, 2025; Dollar Tree (5%), March 31, 2018; and Lumber Liquidators (3%), Feb. 29, 2020. The decline in performance is due to low occupancy and declining rental rates. Additionally, there are three tenants whose leases expired who are currently paying month-to-month rent and negotiations continue for lease renewals/extensions. As of the Sept. 30, 2015, rent roll, the property's occupancy has declined to 77% from 95% with average rent $15.54 per sf. Per REIS as of 3Q15, the South Bay/Torrance retail submarket vacancy is 4.2% with average asking rent of $31 per sf. RATING SENSITIVITIES Rating Outlooks on classes A-4, A-1A, A-MFX, A-MFL, WFC-1, WFC-2, WFC-3, and WFC-X remain Stable due to increasing credit enhancement and continued paydown. Further upgrades to classes A-MX and A_MFL are not likely due to increasing concentration and adverse selection; conversely, downgrades to these classes are not likely due to the large balance of the already distressed class A-J, which is sufficient to absorb future losses. DUE DILIGENCE USAGE No third-party due diligence was provided or reviewed in relation to this rating action. Fitch upgraded these ratings: -- $595 million class A-MFX to 'Asf' from 'BBsf'; Outlook Stable; -- $65 million class A-MFL to 'Asf' from 'BBsf'; Outlook Stable. Fitch downgraded these ratings: -- $544.5 million class A-J to 'Dsf' from 'Csf'; RE 0%; -- $0 class B to 'Dsf' from 'Csf'; RE 0%; -- $0 class C to 'Dsf' from 'Csf'; RE 0%; -- $0 class D to 'Dsf' from 'Csf'; RE 0%; -- $0 class E to 'Dsf' from 'Csf'; RE 0%; -- $0 class F to 'Dsf' from 'Csf'; RE 0%; -- $0 class G to 'Dsf' from 'Csf'; RE 0%; -- $0 class H to 'Dsf' from 'Csf'; RE 0%; -- $0 class J to 'Dsf' from 'Csf'; RE 0%; -- $0 class K to 'Dsf' from 'Csf'; RE 0%. Fitch affirmed these ratings: -- $1.3 billion class A-4 at 'AAAsf'; Outlook Stable; -- $591.1 million class A-1A at 'AAAsf'; Outlook Stable; -- $0 class L at 'Dsf'; RE 0%; -- $0 class M at 'Dsf'; RE 0%; -- $0 class N at 'Dsf'; RE 0%; -- Interest-only class WFC-X at 'BBB+sf'; Outlook Stable; -- $7.7 million class WFC-1 at 'BBB+sf'; Outlook Stable; -- $8.7 million class WFC-2 at 'BBBsf'; Outlook Stable; -- $24.1 million class WFC-3 at 'BBB-sf'; Outlook Stable. Classes A-1, A-2A, A-2B, and A-3 are paid in full. Fitch does not rate the class O, P, Q and S certificates. Fitch previously withdrew the ratings on the interest-only class XP, XC and XW certificates. CENTRIC HEALTH: S&P Affirms 'B-' CCR, Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Centric Health Corp., including the 'B-' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications on Nov. 11, 2015. The outlook is stable. "Our rating on Centric Health reflects our assessments of a weak business risk profile and highly leveraged financial risk profile," said Standard & Poor's credit analyst Arthur Wong. The company recently closed the sale of its physiotherapy, rehabilitation, and medical assessments segment for net proceeds of about C$232 million. The divested businesses accounted for more than half of Centric's 2015 revenue and EBITDA base. The remaining company is now primarily focused on specialty pharma distribution--a segment that Centric bolstered last year with the acquisition of Pharmacare. Though Centric has seen slight margin improvement through 2015, the divestiture of such a large segment has a negative impact on the diversity and scale of its services and raises questions about the company's future health. The stable outlook on Centric Health Corp. reflects Standard & Poor's Ratings Services' expectation that the company will utilize its proceeds from the divestiture of its physiotherapy, rehabilitation, and assessments businesses to significantly de-lever. While Centric will still remain highly leveraged, the improved leverage and liquidity lessens pressure on the company's operations. S&P believes that the company's remaining specialty pharmacy and surgical center businesses will generate solid organic sales growth and be cash flow generative. S&P could revise the outlook to negative if the company experiences operational difficulties in its specialty pharmacy and surgical center businesses, resulting in a drop in EBITDA and a return to leverage levels that may be deem unsustainable. S&P may also revise its outlook to negative if there is a significant drop in margins and free cash flow generation that lead to increased liquidity issues. S&P does not believe an upgrade is likely within the next year given Centric's limited track record of significant positive free cash flow generation and that despite the prospective de-levering, will remain highly leveraged. A longer track record of consistent, positive free cash flows; steadily improving credit measures, with leverage in the under 5x and FFO to debt in the low teens range, along with expectations of continued organic growth in its remaining businesses would be prerequisites for an upgrade. CIRCUIT CITY: Settles with Technicolor and Others in CRT MDL ------------------------------------------------------------ Kelly Knaub at Bankruptcy Law360 reported that the bankruptcy trustee of Circuit City Stores Inc. has agreed to settle its claims accusing Technicolor, TDA and LG of fixing the price of cathode ray tubes in long-running multidistrict litigation in California, telling a Virginia bankruptcy court on Jan. 26, 2016, that the agreements will allow it to avoid lengthy and expensive litigation. In a motion filed with the bankruptcy court for Virginia's Eastern District, liquidation trustee Alfred H. Siegel said Circuit City had reached settlement agreements with Technicolor SA, formerly known as Thomson SA. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008. InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, acted as the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC served as the Debtors' claims and voting agent. Circuit City opted to liquidate its 721 stores and obtained the Bankruptcy Court's approval to pursue going-out-of-business sales, and sell its store leases in January 2009. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. On Sept. 14, 2010, the Court entered an order confirming the Debtors' Plan of Liquidation, which created the Circuit City Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as Trustee. The Plan became effective Nov. 1, 2010. CLIFFS NATURAL: Depository Shares Delisted From NYSE ---------------------------------------------------- The New York Stock Exchange LLC filed a Form 25 with the Securities and Exchange Commission to remove from listing Cliffs Natural Resources Inc.'s depositary shares, each representing a 1/40th ownership interest in a share of 7.00% Series A Mandatory Convertible Preferred Stock, Class A. About Cliffs Natural Resources Cliffs Natural Resources Inc. -- http://www.cliffsnaturalresources.com/-- is a mining and natural resources company. The Company is a major supplier of iron ore pellets to the U.S. steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also produces low-volatile metallurgical coal in the U.S. from its mines located in West Virginia and Alabama. Additionally, Cliffs operates an iron ore mining complex in Western Australia and owns two non-operating iron ore mines in Eastern Canada. Driven by the core values of social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. On Jan. 27, 2015, Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC commenced restructuring proceedings in Montreal, Quebec, under the Companies' Creditors Arrangement Act (Canada). The initial CCAA order will address the Bloom Lake Group's immediate liquidity issues and permit the Bloom Lake Group to preserve and protect its assets for the benefit of all stakeholders while restructuring and sale options are explored. The Company reported a net loss of $8.31 billion in 2014 following net income of $362 million in 2013. As of Dec. 31, 2015, the Company had $2.13 billion in total assets, $3.94 billion in total liabilities and a total deficit of $1.81 billion. * * * As reported by the TCR on Feb. 1, 2016, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Cleveland-based iron ore producer Cliffs Natural Resources Inc. to 'CC' from 'B'. The rating action reflects Cliffs' Jan. 27, 2016, announcement of a private debt exchange offer for its second-lien and senior unsecured debt. The TCR reported on Jan. 8, 2016, that Moody's Investors Service downgrade Cliffs Natural Resources Inc. Corporate Family Rating and Probability of Default Rating to Caa1 and Caa1-PD from B1 and B1-PD respectively. The downgrade reflects the deterioration in the company's debt protection metrics and increase in leverage as a result of continued downward movement in iron ore prices and weak fundamentals in the US steel industry, which are resulting in lower shipment levels. CLIFFS NATURAL: Moody's Cuts Corporate Family Rating to 'Ca' ------------------------------------------------------------ Moody's Investors Service downgraded the corporate family rating (CFR) of Cliffs Natural Resources Inc's to Ca from Caa1 and the probability of default rating (PDR) to Ca-PD from Caa1-PD. At the same time, Moody's downgraded the senior secured 1st lien notes to Caa1 from B1, the senior secured 2nd lien notes to Caa3 from B3 and the senior unsecured notes to C from Caa2. The rating for senior unsecured debt issuances under the company's shelf registration was downgraded to (P) C from (P)Caa2. The speculative grade liquidity rating was affirmed at SGL-3. The outlook is negative. Downgrades: -- Probability of Default Rating, Downgraded to Ca-PD from Caa1- PD -- Corporate Family Rating, Downgraded to Ca from Caa1 -- Multiple Seniority Shelf, Downgraded to (P)C from (P)Caa2 -- Senior Secured Second Lien Regular Bond/Debenture, Downgraded to Caa3 from B3 -- Senior Secured First Lien Regular Bond/Debenture, Downgraded to Caa1 from B1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C from Caa2 Outlook Actions: -- Outlook, Remains Negative Affirmations: -- Speculative Grade Liquidity Rating, Affirmed SGL-3 RATINGS RATIONALE The downgrade incorporates expectations for continued weakening in debt protection metrics and high leverage. We estimate leverage, as measured by the debt/EBITDA ratio of approximately 12x at year-end 2015. The downgrade also acknowledges the company's announcement of an offer to exchange up to $710 million of new 1.5 lien senior secured notes due 2020 for existing senior and second lien notes at a significant discount to par. Moody's views this as a distressed exchange and at closing of the exchange will append an LD designation to Cliffs' PDR, reflecting the view that the debt repurchases qualify as a limited default under Moody's definition of default, which captures events whereby issuers fail to meet debt service obligations outlined in their original debt agreements. The company's performance deteriorated over the course of 2015 due to weakness in the iron ore markets and the US steel industry, notwithstanding the contract nature of the US iron ore business. Moody's does not expect material improvement in 2016. The negative outlook incorporates the challenges that continue to face the company in light of weaker iron ore prices and steel industry conditions. The outlook also reflects the need to renegotiate material offtake contracts expiring in December 2016 and January 2017. The Speculative Grade Liquidity rating of SGL-3 continues to reflect Moody's expectation for adequate liquidity despite increased cash consumption on lower earnings and cash flow generation, as well as higher seasonal working capital requirements in the first several months of 2016. Headquartered in Cleveland, Ohio, Cliffs is the largest iron ore producer in North America with approximately 25.5 million equity tons of annual capacity. In addition, the company participates in the international seaborne iron ore markets through its subsidiary in Australia. Cliffs' operations at Bloom Lake are being restructured under the Canadian Companies' Creditors Arrangement Act CCAA) and in May 2015, its Wabush iron ore operations in Canada, which had been permanently closed, were included in the CCAA filing. For the twelve months ended September 30, 2015, the company had revenues of $2.4 billion (which includes revenues in the fourth quarter of 2014 from the Canadian and Coal segments, subsequently classified as discontinued operations). In December 2015, Cliffs' remaining coal operations - the Pinnacle Mine and the Oak Grove Mine were sold to Seneca Coal Resources, LLC. The transaction was valued at roughly $268 million based upon the assumption of all liabilities by Seneca Coal. Cliffs' revenues for the fiscal year ended December 31, 2015 were approximately $2 billion. COLT DEFENSE: Terminates Registration of Securities With SEC ------------------------------------------------------------ Colt Defense LLC and Colt Finance Corp. have filed a Form 15 "CERTIFICATION AND NOTICE OF TERMINATION OF REGISTRATION UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR SUSPENSION OF DUTY TO FILE REPORTS UNDER SECTIONS 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934" with respect to their 8.75% Senior Notes due 2017. Colt Defense's Modified Second Amended Joint Plan of Reorganization was declared effective, and the Company emerged from Chapter 11 protection in January. The Plan was confirmed on Dec. 16, 2015, and the Court approved modifications to the confirmed Plan on Jan. 12, 2016. According to a BankruptcyData report, the confirmation order states, "If the Sciens Group does not fund $15 million in the aggregate on Feb. 8, 2016, in accordance with the Commitment Term Sheet and Sections 5.4 (a) of the Plan, each holder of an allowed claim in class 4-A (Senior notes claims of participating holders), and Class 6 (General Unsecured claims), other than the Plan Support Parties, will not be deemed to have granted releases in favor of the Sciens Group in accordance with section 10.4 (b) of the Plan regardless of whether such Holder failed to opt-out of the releases granted therein on its ballot to vote on the Plan. If the Sciens Group funds $15 million in the aggregate by such date and time, each holder of an allowed claim in Class 4-A, Class 4-B, and Class 6 who did not opt-out of granting releases in accordance with the Plan shall be deemed to grant releases in favor of the Sciens Group, among others, in accordance with Section 10.4 (b) of the Plan." Under the Plan, Colt Defense reduced its debt by approximately $200 million, after giving effect to $50 million of new capital raised through the restructuring process. In addition, the Company has executed a long-term lease for its West Hartford Facility and has entered into a memorandum of understanding with the United Auto Workers. Dennis Veilleux, president and C.E.O. of Colt Defense, comments, "It is with profound appreciation to all of our key stakeholders that we share that we have completed the restructuring process and are emerging from Chapter 11 with a solid capital structure, significantly less debt, and much greater financial flexibility." About Colt Defense 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 (Bankr. D. Conn.). 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. 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. On June 16, 2015, the Court directed the joined administration of the assets. 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 $13.3 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. The U.S. Trustee for Region 3 appointed five creditors of Colt Defense Inc. and its affiliates to serve on the official committee of unsecured creditors. MagPul Industries Corp. has resigned from the committee leaving only four Committee members. Sciens Capital is represented by Skadden, Arps, Slate, Meagher & Flom LLP's Anthony W. Clark, Esq., and Jason M. Liberi, Esq. CONSTELLATION ENTERPRISES: S&P Lowers Corp. Credit Rating to 'SD' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its corporate credit rating on U.S.-based Constellation Enterprises LLC to 'SD' from 'CCC-'. At the same time, S&P lowered its issue-level rating on the company's $130 million 10.625% senior secured notes to 'D' from 'CCC-'. The '4' recovery rating is unchanged, indicating S&P's expectation for average recovery (30%-50%; upper half of the range) for noteholders in the event of a payment default. "We downgraded Constellation to 'SD' to reflect our view that the company's extension of the mandatory redemption date under its senior secured notes constitutes a default under our criteria given that the payment date has been extended beyond the original payment date, which--in our view--means that investors will receive less than they were promised under the original security," said Standard & Poor's credit analyst Nadine Totri. "However, it is our understanding that this extension was made pursuant to an amendment agreed to by 99.7% of the bondholders, therefore we do not believe it constitutes a contractual default." S&P expects to raise its ratings on Constellation in the coming days to reflect S&P's forward-looking opinion of the company's creditworthiness. CONSTELLATION ENTERPRISES: S&P Raises CCR to 'CCC-', Outlook Dev. ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it has raised its corporate credit rating on U.S.-based Constellation Enterprises LLC to 'CCC-' from 'SD'. The outlook is developing. At the same time, S&P raised its issue-level rating on the company's $130 million senior secured notes to 'CCC-' from 'D'. The '4' recovery rating is unchanged, indicating S&P's expectation of average recovery (30%-50%; upper half of the range) for noteholders in the event of a payment default. The upgrade follows the company's recent extension of the mandatory redemption date under its senior secured notes to Feb. 1, 2018, from Feb. 1, 2016. The company also recently extended the maturity date of its unrated ABL revolving credit facility to July 28, 2016, from Jan. 28, 2016. Additionally, the company recently obtained a $30 million equity infusion and a $13 million unrated delayed draw term loan that matures Jan. 28, 2018. Given Constellation's weak operating performance and negative free cash flow, the company may be unable to meet its future debt service requirements because its ABL revolver matures within the next six months. The company's next interest payment on its secured notes, roughly $7 million, is due on Aug. 1, 2016. S&P notes that the company is working to refinance its revolver and has continued to pursue an asset sale. "The developing outlook reflects the potential that we could raise or lower our ratings on Constellation based on its ability to successfully refinance the near-term maturity of its revolving ABL credit facility," said Standard & Poor's credit analyst Nadine Totri. The developing outlook reflects the potential that S&P could raise or lower its ratings on Constellation based on the company's ability to successfully refinance the near-term maturity of its revolving ABL credit facility. S&P could lower its rating on Constellation if the company fails to address the maturity of its ABL revolver or if its liquidity deteriorates further. S&P could consider raising its ratings on Constellation if the company successfully refinances its ABL revolver and its operating cash flow improves. The magnitude of any positive rating action will depend on S&P's assessment of the company's post-refinancing business prospects, credit measures, and liquidity. CONTINENTAL CASUALTY: Metal Co. Says $33M Row Best Left for Jury ---------------------------------------------------------------- Steven Trader at Bankruptcy Law360 reported that a metal company suing Continental Casualty Co. for allegedly not delivering on $33 million in coverage for damages after a 2007 plant explosion, which subsequently put it out of business, told an Indiana federal judge on Jan. 27, 2016, too many unanswered questions remained about those claims to decide the case early. In an opposition brief to Continental's motion for summary judgment, G&S Metal Consultants Inc. said its insurer is flat out wrong to claim there's no payment for lost business income. CROWN HOLDINGS: Moody's Affirms Ba2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed the Ba2 corporate family rating and the Ba2-PD probability of default rating of Crown Holdings, Inc. ("Crown") after $250 million was added onto the existing term loan A due December 2018. The rating on the term loan was affirmed at the Baa3 level. All other instrument ratings are detailed below. The company will use the proceeds from the new debt raised, $48 million of revolver borrowings and cash on hand to pay down the $700 million 6.25% notes due February 2021 and to pay the fees and expenses associated with the transaction. The rating outlook is stable. Moody's took the following actions: Crown Holdings, Inc. -- Affirmed Ba2 corporate family rating -- Affirmed Ba2-PD probability of default rating Speculative Grade Liquidity Rating, affirmed at SGL-2 Crown Americas LLC -- Affirmed $450 million senior secured US Revolving Credit Facility due December 2018, Baa3 (LGD 2) -- Affirmed $1,125 million senior secured Term Loan A (including add-on of $250 million) due December 2018, Baa3 (LGD 2) -- Affirmed $362 million senior secured Farm Credit Term Loan due December 2019, Baa3 (LGD 2) -- Affirmed $700 million 6.25% senior unsecured notes due February 2021, Ba3 (LGD 5), to be withdrawn at closing -- Affirmed $1,000 million 4.50% senior unsecured notes due January 2023, Ba3 (LGD 5) Crown Cork & Seal Company, Inc. -- Affirmed $63.5 million 7.50% senior unsecured notes due December 2096, B1 (LGD 6) -- Affirmed $350 million 7.375% senior unsecured notes due December 2026, B1 (LGD 6) Crown European Holdings S.A. -- Affirmed $700 million European revolving credit facility due December 2018, Baa3 (LGD 2) -- Affirmed €700 million senior secured Term Loan A due December 2018, Baa3 (LGD 2) -- Affirmed €650 million 4.0% senior unsecured notes due July 2022, Ba2 (LGD 3) -- Affirmed €600 million 3.375% senior unsecured notes due May 2025, Ba2 (LGD 3) Crown Metal Packaging Canada LP -- Affirmed $50 million Canadian revolving credit facility due December 2018, Baa3 (LGD 2) The ratings outlook is stable. The ratings are subject to the receipt and review of final documentation. RATINGS RATIONALE The affirmation of the Ba2 corporate family rating continues to reflect the expectation that all free cash flow will be dedicated to debt reduction as indicated at the time of the downgrade of the rating in October 2014 in anticipation of the EMPAQUES acquisition (closed 1Q15). Crown's credit metrics were stretched following the acquisition and the debt reduction is expected to improve credit metrics to a level more commensurate with the rating category over the next 12 months. Crown's Ba2 Corporate Family Rating reflects the company's position in an oligopolistic industry, relatively stable end markets and improved profitability. The rating is also supported by the high percentage of business under contract with strong raw material cost pass-through provisions, higher margin growth projects in emerging markets and good liquidity profile. Crown's broad geographic exposure, including a high percentage of sales from faster growing emerging markets, is both a benefit and a source of some potential volatility. The rating is constrained by the company's concentration of sales, exposure to some weak international markets, especially Europe, and risks inherent in its strategy to grow in emerging markets. The rating is also constrained by the ongoing asbestos liability and the integration risk inherent from two recent, sizeable acquisitions. The company has exposure to segments which can be affected by weather and crop harvests and to mature industry sectors like carbonated soft drinks. Pro forma for the Empaque acquisition, approximately 59% of sales come from the sale of beverage cans in 2015. All of Crown's sales are from metal packaging, which may be subject to substitution with other substrates in certain markets depending on relative pricing and new technologies. The ratings outlook is stable. The stable outlook reflects an expectation that Crown will continue to benefit from the EMPAQUE acquisition and various productivity and expansion initiatives and dedicate free cash flow to debt reduction. The ratings could be downgraded if Crown fails to improve credit metrics over the intermediate term, there is a deterioration in the cushion under existing financial covenants, and/or a deterioration in the competitive or operating environment. Additionally, a significant acquisition or change in the asbestos liability could also trigger a downgrade. Specifically, the rating could be downgraded if adjusted debt-to-EBITDA remained above 4.5 times, EBITDA interest coverage remained below 4.5 times and/or funds from operations to debt remained below 14%. The ratings could be upgraded if Crown achieves a sustainable improvement in credit metrics within the context of a stable operating and competitive environment and maintains good liquidity including sufficient cushion under existing covenants. Specifically, the ratings could be upgraded if adjusted debt-to-EBITDA declines to below 4 times, EBITDA interest coverage improves to over 5.5 times, the EBIT margin remains in the double digits, and funds from operations to total debt improves to over 17% Crown Holdings, Inc., headquartered in Philadelphia, Pennsylvania, is a global manufacturer of steel and aluminum containers for food, beverage, and consumer products. Revenues for the twelve months ended September 30, 2015 were approximately $8.9 billion. CST BRANDS: S&P Puts 'BB' CCR on CreditWatch Negative ----------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on CST Brands Inc., including its 'BB' corporate credit rating, on CreditWatch with negative implications, following increased debt levels and potential for debt leverage to remain elevated for a prolonged period. "We believe the acquisition of Flash Foods will augment CST's geographic presence through entrance into the U.S. southeast retail market and provide opportunities for new store growth by leveraging the acquired company's distribution capabilities. However, the acquisition increases debt at a time when there are uncertainties regarding oil prices, which are currently at recent historical lows," said credit analyst Andy Sookram. "If oil prices rise steadily above current levels, fuel margins could quickly tighten and drive leverage above our 3x rating threshold for a sustained period. We factored into our ratings assumptions for CST that swings in oil prices could temporarily lead to leverage above our threshold, but only for one or two quarters." The CreditWatch placement reflects S&P's view that additional debt and potential oil price swings could lead to leverage above S&P's ratings threshold for a prolonged period. S&P aims to resolve the CreditWatch once it gains insight into the company's asset sale initiatives, real estate initiatives such as sale/leaseback, as well as its capital structure and financial policy plans. DANIER LEATHER: Files Notice of Intention Under BIA --------------------------------------------------- Danier Leather Inc. on Feb. 4 disclosed that, with the authorization and approval of its board of directors, it has commenced insolvency proceedings by filing a Notice of Intention to Make a Proposal ("NOI") pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada) ("BIA"). The principal purpose of the NOI filing is to create a stabilized environment for the Company and its financial advisors to run an orderly and flexible sale and investor process ("SISP") with the goal of identifying one or more interested parties that wish to acquire or make an investment in the Company's business or all or some of its assets or to liquidate the Company's assets. KSV Kofman Inc. has been appointed as the trustee under the NOI (the "Proposal Trustee"). In connection with the SISP, the Company has entered into an agency agreement with GA Retail Canada, ULC ("GA Retail") to act as the stalking horse bid (the "Stalking Horse Bid"). The Stalking Horse Bid includes an agreement by GA Retail or an affiliate thereof, to liquidate the Company's inventory and store furniture, equipment and fixtures if no superior offer emerges from the SISP. The Stalking Horse Bid effectively acts as a reserve bid and establishes a floor price against which other interested parties may submit competing offers for the Company's business or some or all of its assets. In the coming days, the Company intends to seek an order from the Ontario Superior Court of Justice (the "Court") approving the terms of the SISP and approving and accepting the Stalking Horse Bid for the purpose of conducting the SISP. The agency agreement with GA Retail is conditional on the Company receiving Court approval of the SISP and the Stalking Horse Bid. The Company's objective is to complete the SISP by the end of February or early March 2016. It is important to note that the Company is not bankrupt. The Company has sufficient resources to fund its operations during the SISP and its stores will remain open for business during that time, subject to any restructuring steps that the Company may take during the process. Pursuant to the BIA, upon filing the NOI, there is an automatic stay of proceedings in respect of all creditor claims and actions against the Company that will protect the Company and its assets from the claims of creditors and others during the pendency of the proposal proceedings. The decision to file the NOI was made by the Board in consultation with the Company's legal and financial advisors as a result of the Company's ongoing financial difficulties after extensively exploring its restructuring and strategic alternatives. As previously disclosed, the Company has experienced significant net losses in each of its two most recently completed fiscal years and since that time the Company has continued to experience a consistent decline in its financial performance. Despite its cost reduction initiatives and efforts to effect an operational turnaround plan, the Company continues to face declining financial performance and anticipates further operating losses in its current fiscal year. There can be no assurance that the Company will be successful in its efforts under the SISP or that the Court will approve the SISP, the Stalking Horse Bid or any competing bid that may emerge from the SISP. About Danier Leather Danier Leather Inc. (CA:DLSV) -- http://www.danier.com-- is a designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories. The Company's merchandise is marketed exclusively under the Danier brand name and is available at its shopping mall, street-front and outlet stores as well as the online store. DENBURY RESOURCES: Moody's Cuts Corporate Family Rating to Caa2 --------------------------------------------------------------- Moody's Investors Service downgraded Denbury Resources Inc.'s (Denbury) Corporate Family Rating to Caa2 from Ba3 and ratings on its senior subordinated notes to Caa3 from B1. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. This action resolves the review for downgrade that was initiated on 16 December 2015. The outlook is negative. "Denbury's leverage and coverage metrics will deteriorate significantly in the second half of 2016, after the last of its existing crude oil price hedges roll off," said James Wilkins, a Moody's Vice President -- Senior Analyst. "We do not expect the company to generate sufficient EBITDA to meet its financial covenants in 2016." The following summarizes the ratings. Ratings downgraded: Denbury Resources Inc. -- Corporate Family Rating -- Caa2 from Ba3 -- Probability of Default Rating -- Caa2-PD from Ba3-PD -- Senior Subordinated Notes due 2021 -- Caa3 (LGD5) from B1 (LGD4) -- Senior Subordinated Notes due 2022 - Caa3 (LGD5) from B1 (LGD4) -- Senior Subordinated Notes due 2023 - Caa3 (LGD5) from B1 (LGD4) Ratings lowered: -- Speculative Grade Liquidity Rating - SGL-4 from SGL-3 Outlook: Outlook - Negative RATINGS RATIONALE The Caa2 CFR reflects Moody's expectation that Denbury will generate negative free cash flow in 2016, once its hedges roll off in the third quarter 2016 (assuming WTI crude oil prices are $33/bbl). The company's credit metrics deteriorate significantly in 2017 without the hedge benefit. Denbury has hedges on one-half of estimated crude oil production for the first half 2016 at prices ranging from $66/bbl to $92/bbl, that will provide a significant boost to profitability. However, the operating costs of its enhanced oil recovery operations, which are higher than many primary oil sources, will make it difficult to generate meaningful retained cash flow in the current crude oil price environment, even if the company is successful implementing additional cost cutting measures. The SGL-4 Speculative Grade Liquidity Rating reflects Moody's expectation that the company's cash flow from operations will be weak and it will not generate sufficient EBITDA to meet its interest coverage covenant under its revolving credit facility in the second half 2016. The company's high cost of production per barrel and the lack of meaningful hedges will result in negative funds from operations in the second half of 2016 at a WTI crude oil price of $33 per barrel. The company's liquidity will be primarily supported by availability under its $1.6 billion revolving credit facility due 2019. The reserve based borrowing base will decline significantly from the current $2.6 billion borrowing base after the May 2016 redetermination to reflect lower oil prices, lower hedge volumes and changes in reserves, but may remain of sufficient size to meet Denbury's 2016 borrowing needs. The ratings could be downgraded if Denbury's liquidity deteriorates. A ratings upgrade could be considered if Denbury maintains adequate liquidity and interest coverage (EBITDA/interest expense) above 1.5x on a sustained basis. Denbury Resources Inc., headquartered in Plano, Texas, is an independent oil and gas company with operations in the Gulf Coast and Rocky Mountain regions. The company has a significant emphasis on carbon dioxide enhanced oil recovery (CO2 EOR) operations used to recover oil from mature fields. DIFFERENTIAL BRANDS: Peter Kim Reports 7.9% Stake as of Jan. 28 --------------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, Peter Kim disclosed that as of Jan. 28, 2016, he beneficially owns 1,021,492 shares of common stock of Differential Brands Group Inc. representing 7.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/G2qTx1 About Differential Brands As of Jan. 28, 2016, Differential Brands Group Inc. was acquired by Robert Graham Designs, LLC, in a reverse merger transaction. Differential Brands Group Inc., together with its subsidiaries, designs, develops, and markets apparel products under the Hudson name in the United States. The company operates through two segments, Wholesale and Retail. Its Hudson product line includes women's, men's, and children's denim jeans, related casual wear, and accessories; and pants, jackets, and other bottoms. The company engages in the wholesale of its Hudson products to retailers, specialty stores, and international distributors. As of Aug. 31, 2015, Joe's Jeans had $172 million in total assets, $149 million in total liabilities and $22.6 million in total stockholders' equity. The Company reported a net loss of $27.7 million on $189 million of net sales for the fiscal year ended Nov. 30, 2014, compared with a net loss of $7.31 million on $140 million of net sales in 2013. In its audit report on the consolidated financial statements for the year ended Nov. 30, 2014, Moss Adams LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has a net working capital deficiency due to debt covenant violations and has suffered recurring losses from operations. DONMETZ HOME: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Donmetz Home LLC 21781 Ventura Blvd., Suite 650 Woodland Hills, CA 91364-1835 Case No.: 16-10317 Chapter 11 Petition Date: February 2, 2016 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Victoria S. Kaufman Debtor's Counsel: Jonathan Hayes, Esq. SIMON RESNIK HAYES LLP 15233 Ventura Blvd., Suite 250 Sherman Oaks, CA 91403 Tel: (818) 783-6251 Fax: (818) 827-4919 Email: jhayes@srhlawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million A list of the Debtor's 11 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb16-10317.pdf EDENOR SA: ENRE Ordered to Perform Tariff Schedules Adjustment -------------------------------------------------------------- EDENOR disclosed in a Form 6-K filed with the Securities and Exchange Commission that on Jan. 31, 2016, Resolution Number 7th of the Ministry of Energy and Mines was published in the Official Journal which instructed the Argentine Electricity Agency (ENRE) to perform as part of the Integral Tariff Review (RTI) an adjustment of the Value-Added for Distribution to the tariff schedules and carry out all the required actions to achieve the RTI before Dec. 31, 2016. The mentioned resolution decided to: (i) render the Rational Use of Energy Program (PUREE) ineffective; (ii) revoke the Resolution 32/2015 of the Secretariat of Energy as from the effective date of the ENRE Resolution implementing the tariff schedule; (iii) cancel, until further instructions, all the effects derived from mutual agreements entered into the Distributors and CAMMESA; and (iv) carry out all required actions in order to terminate the Trusts created pursuant to ENRE 347/2012 Resolution. The Company is waiting for the instrumentation of the measures stipulated by said resolution in order to assess the impact. About Edenor SA Headquartered in Buenos Aires, Argentina, Edenor S.A. (NYSE: EDN; Buenos Aires Stock Exchange: EDN) is the largest electricity distribution company in Argentina in terms of number of customers and electricity sold (both in GWh and Pesos). Through a concession, Edenor distributes electricity exclusively to the northwestern zone of the greater Buenos Aires metropolitan area and the northern part of the city of Buenos Aires. Edenor SA reported a loss of ARS780 million on ARS3.59 billion of revenue for the year ended Dec. 31, 2014, compared with profit of ARS773 million on ARS3.44 billion of revenue for the year ended Dec. 31, 2013. As of June 30, 2015, Edenor had ARS 10.74 billion in total assets, ARS 9.63 billion in total liabilities and ARS 1.11 billion in total equity. EGPI FIRECREEK: Suspending Filing of Reports with SEC ----------------------------------------------------- EGPI Firecreek, Inc., filed a Form 15 with the Securities and Exchange Commission to terminate the registration of its common stock, $0.001 par value. There were 338 holders of records of common stock as of Feb. 2, 2016. As a result of the filing, the Company is not anymore obligated to file periodic reports with the SEC. About EGPI Firecreek Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was formerly known as Energy Producers, Inc., an oil and gas production company focusing on the recovery and development of oil and natural gas. The Company has been focused on oil and gas activities for development of interests held that were acquired in Texas and Wyoming for the production of oil and natural gas through Dec. 2, 2008. Historically in its 2005 fiscal year, the Company initiated a program to review domestic oil and gas prospects and targets. As a result, EGPI acquired non-operating oil and gas interests in a project titled Ten Mile Draw located in Sweetwater County, Wyoming for the development and production of natural gas. In July 2007, the Company acquired and began production of oil at the 2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was followed by the acquisition and commencement in March 2008 of oil and gas production at the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field in Ward County, Texas. EGPI Firecreek disclosed a net loss of $6.08 million on $124,157 of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $4.97 million on $293,712 of total revenue for the year ended Dec. 31, 2011. The Company's balance sheet at March 31, 2013, showed $1.31 million in total assets, $6.92 million in total liabilities, all current, $1.86 million in series D preferred stock, and a $7.48 million total shareholders' deficit. M&K CPAS, PLLC, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that he Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. EMKEY COMPANIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- EmKey Companies, LLC 16-30548 12221 Merit Drive, Suite 625 Dallas, TX 75251 EmKey Resources, LLC 16-30549 12221 Merit Drive, Suite 625 Dallas, TX 75251 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Stacey G. Jernigan [16-30548] Hon. Harlin DeWayne Hale [16-30549] Debtors' Counsel: Meritt Crosby, Esq. KILMER CROSBY & WALKER PLLC 3102 Maple Ave., Suite 240 Dallas, TX 75201 Tel: 214.731.3111 Fax: 214.731.3117 Email: mcrosby@kcw-lawfirm.com Estimated Estimated Assets Liabilities ---------- ----------- EmKey Companies, LLC $1MM-$10MM $1MM-$10MM EmKey Resources, LLC $1MM-$10MM $10MM-$50MM The petition was signed by Worth Snyder, president. A list of EmKey Companies' 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb16-30548.pdf A list of EmKey Resources' 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb16-30549.pdf ENABLE MIDSTREAM: S&P Lowers CCR to 'BB+', Outlook Negative ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Enable Midstream Partners L.P. (Enable) to 'BB+' from 'BBB-' and lowered the short-term rating to 'B' from 'A-3'. The outlook is negative. At the same time, S&P lowered its issue-level rating on Enable's senior unsecured notes to 'BB+' from 'BBB-'. S&P is assigning a '3' recovery rating to the senior unsecured bank debt and senior unsecured notes, indicating its expectation for meaningful (50% to 70%, in the upper half of the range) recovery if a payment default occurs. "The rating action follows Centerpoint's announcement that it is evaluating strategic alternatives for the company's investment in Enable Midstream Partners, including a sale or spin-off," said Standard & Poor's credit analyst Mike Llanos. The announcement reflects Centerpoint's efforts to unlock value for its shareholders. With the announcement, S&P believes Enable could be sold over the next few months and, as such, S&P no longer views Enable as a moderately strategic investment to Centerpoint. As a result, S&P lowered its ratings on Enable by one notch. The 'BB+' issuer credit rating reflects Enable's stand-alone credit profile without any uplift related to sponsor support. The negative outlook reflects S&P's view that continued hydrocarbon pricing pressure could further erode Enable's cash flow gross margins and gathering volumes, resulting in reduced cash flow to the partnership. In addition, S&P recognizes that Enable's low unit price makes it challenging to raise equity and fund its 2016 capital spending program in a balanced manner. While roughly 55% of projected gross margin comes from firm take-or-pay cash flow or is underpinned by minimum volume commitments, roughly 30% is fee-based with volumetric risk and about 10% is unhedged and exposed to weak commodity prices. Continued weak commodity prices could lead to volumetric declines, resulting in adjusted debt to EBITDA remaining above our downgrade trigger of 4x for an extended period. The negative outlook reflects S&P's expectation that Enable's credit measures could weaken further from lower volumes and low commodity prices, such that debt to EBITDA remains above 4x in 2016. S&P could lower the ratings if cash flow declines due to lower volumes or weak commodity prices, such that debt to EBITDA remains in the mid-4x area for a sustained period. S&P could also lower the rating if Enable's commodity exposure increases, the partnership encounters operational setbacks, or cost overruns related to growth capital projects cause financial leverage to increase above S&P's downgrade trigger. S&P could revise the outlook to stable if it believes that the partnership can maintain debt to EBITDA below 4x in the face of lower commodity prices and heightened volume risk. ENERGY SERVICES: S&P Lowers CCR to 'B-', Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its corporate credit rating on Covington, La.-based Energy Services Holdings LLC to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered its issue-level ratings on the company's $30 million revolver due 2019 and $125 million term loan due 2020 to 'B' from 'B+'. The '2' recovery rating remains unchanged, indicating S&P's expectation for substantial (70%-90%; upper half of the range) recovery in the event of a payment default. "The downgrade reflects our view that low oil prices have negatively affected Energy Services Holdings LLC's operating performance by more than we had previously expected, causing the company's adjusted debt-to-EBITDA ratio to increase above 5.0x," said Standard & Poor's credit analyst Noel Mangan. "In addition to lower overall sales, ESH's contracts have shifted from the more profitable upstream market to lower margin downstream work." Based on S&P's oil and natural gas price assumptions, it expects that ESH will face a challenging operating environment as its customers delay their maintenance work and pursue pricing concessions in an attempt to reduce costs. S&P believes that the company will maintain adjusted EBITDA margins in the 6.0%-8.0% range while generating positive FOCF. S&P views ESH's liquidity as less than adequate, which primarily reflects the imminent risk that the company could violate its covenants if it is not granted an amendment. The stable outlook on ESH reflects S&P's assumption that the company will successfully address its narrow covenant headroom in 2016, restoring the headroom under its covenants to at least 10%. S&P believes that the company's weaker-than-expected EBITDA margins will likely increase its adjusted debt-to-EBITDA metric toward 6.0x while it generates positive FOCF. S&P could lower its ratings on ESH if it appears likely that the company's free cash flow will turn negative over the next 12 months because of pressure on its EBITDA margins from potential execution risk on its job contracts. S&P could also lower the rating if ESH does not address its narrow covenant headroom, negatively impacting the company's access to liquidity. Although unlikely over the next 12 months, S&P could raise its ratings on ESH if the company successfully increases its covenant headroom and S&P assess its liquidity as adequate. The company would also need to improve its operating performance, despite weak oil prices, with a FOCF-to-debt ratio of 5% or higher and leverage of 5x or less on a sustained basis. EP ENERGY: Moody's Cuts CFR to 'B3', Negative Outlook ----------------------------------------------------- Moody's Investors Service downgraded EP Energy LLC's Corporate Family Rating (CFR) to B3 from Ba3, the ratings on its unsecured notes to Caa1 from B1 and the secured term loan rating to B2 from Ba2. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-2. This action resolves the review for downgrade that was initiated on 16 December 2015. The rating outlook is negative. "EP Energy's B3 Corporate Family Rating reflects its high leverage and our expectation that its cash flow metrics will deteriorate substantially in 2017, when it will have less than one-quarter of its oil & gas production hedged," commented James Wilkins, a Moody's Vice President. The following summarizes the rating actions. Issuer: EP Energy LLC Ratings Downgraded: -- Corporate Family Rating -- B3 from Ba3, on review for downgrade -- Probability of Default Rating -- B3-PD from Ba3-PD, on review for downgrade -- Senior secured second lien term loan due 2018 -- B2 (LGD3) from Ba2 (LGD3), on review for downgrade -- Senior secured second lien term loan due 2019 - B2 (LGD3) from Ba2 (LGD3), on review for downgrade -- Senior unsecured notes due 2020 - Caa1 (LGD5) from B1 (LGD5), on review for downgrade -- Senior unsecured notes due 2022 - Caa1 (LGD5) from B1 (LGD5), on review for downgrade -- Senior unsecured notes due 2023 - Caa1 (LGD5) from B1 (LGD5), on review for downgrade Ratings Lowered: -- Speculative Grade Liquidity Rating - SGL-4 from SGL-2 Outlook action: -- Outlook -- Negative RATINGS RATIONALE EPE's B3 CFR reflects the company's high leverage, weak cash flow metrics and Moody's expectation that the company's credit metrics will worsen significantly in 2017 when its hedged production volumes decline. EPE had approximately $4.9 billion of balance sheet debt as of 30 September 2015, which requires about $330 million in annual cash interest expense payments and added $8.54 per boe to its cost structure in the third quarter 2015. The company's favorable hedge portfolio buffered it from the full effect of low commodity prices in 2015 and will continue to significantly add to cash flows in 2016. Moody's expects that EPE's hedges for 2016 will cover almost 90 percent of its production. However, EPE's hedges will cover only one-quarter of estimated production volumes in 2017, so the company's cash flows will decline steeply. Moody's expects EPE will generate RCF to debt of around 5% and its interest coverage will decrease to less than 2x, using Moody's price deck (WTI crude oil at $38/bbl in 2017) and assumptions. EPE will require asset sales at favorable valuations in order to materially reduce its debt such that it can comfortably generate credit metrics supportive of the B3 CFR. The SGL-4 Speculative Grade Liquidity Rating reflects the company's weak liquidity and the likelihood it will be required to amend the leverage covenant under the revolving credit facility. EPE's liquidity is supported by its cash flow from operations, although the company will generate negative free cash flow. The $2.75 billion reserve based credit agreement due 2019 is subject to a borrowing base that is re-determined every April and October. Moody's expects the availability will decline substantially after the spring 2016 borrowing base re-determination, but will remain adequate to sustain ongoing operations until the next borrowing base redetermination in October 2016. The revolver requires the company to maintain a ratio of debt to EBITDAX below 4.5x, which it will not meet in the first quarter 2017 when lower volumes are hedged. The next debt maturity is in 2018 when the term loan ($496 million balance as of 30 September 2015) matures. The rating outlook is negative, reflecting the difficult operating environment with low commodity prices. The ratings could be downgraded if liquidity deteriorates (if unused availability under the revolver declines substantially or any needed covenant waivers/amendments are not obtained) or retained cash flow to debt is expected to remain below 5% for a sustained period. An upgrade would be considered if the company reduces its debt and maintains RCF to debt above 15% while growing production or keeping production relatively flat. EP Energy LLC is an independent exploration & production company based in Houston, Texas. EXCITE MEDICAL: Court Denies Bid to Freeze Musallam, et al. Assets ------------------------------------------------------------------- In a Report and Recommendation dated December 8, 2015, which is available at http://is.gd/vOC1sffrom Leagle.com, Judge Thomas B. McCOUN, III, of the United States District Court for the Middle District of Florida, Tampa Division, denied the motion of Plaintiff Axiom Worldwide's for Preliminary Injunction to Freeze Assets of Defendant Musallam, Excite Medical of Tampa Bay, LLC, ElTech USA, and its Principal Mr. Ilya Marder, and ElTech Capital, LLC. By its motion, Axiom seeks a post-judgment preliminary injunction and the freezing of assets of Defendants Saleem Musallam and Eltech USA, LLC, as well as non-parties Excite Medical of Tampa Bay, LLC, Eltech Capital, LLC, and Ilya Marder. Axiom argues that these individuals and entities are committing illegal operations in violation of the permanent injunction, are secreting assets, and hindering and defeating Axiom's collections activities. The case is AXIOM WORLDWIDE, INC., Plaintiff, v. HTRD GROUP HONG KONG LIMITED, et al., Defendants, Case No. 8:11-cv-1468-T-33TBM (M.D. Fla.). Axiom Worldwide, Inc., a Florida corporation, Plaintiff, is represented by Amy J. Winarsky, Esq. -- Marcadis & Associates, PA. Excite Medical Corp., Defendant, is represented by Kenneth S. Siegel, Esq. -- Kenneth S. Siegel, PA & Kevin L. Dees, Esq. -- Schaps & Dees, P.A.. Excite Diagnostics, LLC, Defendant, is represented by Dennis Allen Meyers, Esq. -- dennis@tampabaybusinesslaw.com -- Tampa Bay Business Law, LLP. Eltech USA, LLC, c/o Ilya Marder, President 2124 84th Street, Suite 3 Brooklyn, NY 11214, Defendant, is represented by Ian Thomas Holmes, Esq. -- Holmes Kurnik, PA. Saleem N. Musallam, Defendant, is represented by Kenneth S. Siegel, Kenneth S. Siegel, PA & Kevin L. Dees, Schaps & Dees, P.A.. Excite Medical Corp. sought protection under Chapter 11 of the Bankruptcy Code on Aug. 26, 2014 (Bankr. M.D. Fla., Case No. 14-09906). The Debtor's counsel is Suzy Tate, Esq., at Suzy Tate, P.A., in Tampa, Florida. The petition was signed by Saleem Musallam, president. FELD LIMITED: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Feld Limited Partnership PO Box 728 Green Bay, WI 54305 Case No.: 16-20826 Type of Business: The Debtor is in the business of leasing and managing real properties in the Madison and Green Bay areas. Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Paul G. Swanson, Esq. STEINHIBLER, SWANSON, MARES, MARONE & MCDERMOTT 107 Church Avenue P.O. Box 617 Oshkosh, WI 54903-0617 Tel: 920-426-0456 Email: pswanson@oshkoshlawyers.com Total Assets: $15.17 million Total Debts: $7.50 million The petition was signed by Dennis J. Feld, general partner. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AMA Heating & Air Conditioning goods and/or $373 services Anthem Blue Cross Blue Shield Insurance $6,199 Payments Associated Bank Checking $7,057,817 200 N. Adams Street Associated P.O. Box 19006 Bank Green Bay, WI 54307-9006 Attorney Jon Anderson Legal $8,000 Services Brown County Treasurer Taxes $268,125 P.O. Box 23600 Green Bay, WI 54305 Chase Cardmember Service Credit $3,478 Card Charges DL Couch goods and/or $902 services Green Bay Water Utility Utilities $949 Internal Revenue Services Federal $1,846 Payroll Taxes LaPlant Architecture, LLC goods and/or $1,504 services Larry W. Kemp Wages $1,891 Midwest Moulding & Door goods and/or $1,802 services Otis Elevator Company goods and/or $835 services Schenck & Associates services $6,500 Sharon L. Jonet Wages $305 Sign Solutions goods and/or $382 services Thomas A. Klatt Wages $327 VL roofing & Sheet Metal Inc. goods and/or $325 services Wisconsin Department of Revenue Taxes $1,361 Wisconsin Public Service goods and/or $1,324 services FOURTH QUARTER: MetLife Opposes Confirmation of Sale-Based Plan --------------------------------------------------------------- MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC (collectively "MetLife") object to the confirmation of the Amended Liquidating Plan of Reorganization of Fourth Quarter Properties 86, LLC dated December 23, 2015. MetLife, which has an allowed fully secured claim in the stipulated amount of $26,817,816, objects to Plan due to various reasons, including: * MetLife objects to the Amended Plan as it was not filed in good faith as required by 11 U.S.C. Sec. 1129(a)(3). The timing of the filing of Debtor's case is indicative of Debtor's lack of good faith. The petition allowed Debtor to evade the order of the Wyoming court scheduling a sale of the Property, the petition was filed on the eve of foreclosure, the Property is the major asset of Debtor, there is no possibility of reorganization, Debtor does not generate sufficient operating income each month to cover its monthly operating expenses, let alone debt service, the case is a two-party dispute between Debtor and MetLife, and Debtor filed bankruptcy solely to seek the protection of the automatic stay and prevent foreclosure. * The sales procedure contained in the Amended Plan also evidences Debtor's lack of good faith. Pursuant to Section 3.2.3 of the Amended Plan, Debtor will maintain control of the Property, while marketing and attempting to sell it, until Oct. 31, 2016. If the Property is not sold on or before Oct. 31, 2016, Debtor may surrender the Property in full and final satisfaction of the MLIC Claim. MetLife objects to the proposed sale procedure for three obvious reasons: (1) the procedure is completely void of any marketing, reporting or selling parameters that Debtor must comply with from the Confirmation Date through October 31, 2016; (2) MetLife is strictly prohibited from participating in the sale process in any manner; and (3) the procedure renders the Class 2 credit bid rights illusory as it fails to provide MetLife with notice and an opportunity to exercise its credit bid rights. * MetLife objects to confirmation of the Amended Plan because the channeling injunction violates the provisions of 11 U.S.C. Sec. 524(e). Consequently, Section 1129(a)(1) is not satisfied and the Amended Plan cannot be confirmed. The Amended Plan contains a channeling injunction in favor of Thomas and Debtor's affiliated entities prohibiting further litigation or collection activities from the Effective Date until the date of the sale of the Property The Amended Plan also provides for a release of all liens, claims, and interests against Debtor and Thomas as the return of the Property or application of sales proceeds, in whatever amount, is proposed in full satisfaction of MetLife's claim. The Amended Plan's non-consensual release of a non-debtor party (i.e., Thomas) violates 11 U.S.C. Sec. 524(e) and is prohibited by controlling Eleventh Circuit case law. * MetLife objects to the Amended Plan as it requires MetLife to release its lien on the Property upon receipt of sales proceeds in an unknown amount. MetLife should not be required to release its lien, or otherwise comply with 11 U.S.C. Sec. 1142(b), except upon payment in full of the MLIC Claim on or before October 31, 2016. Counsel for MetLife: BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. Gary A. Barnes, Esq. Ron C. Bingham, II, Esq. Madeleine G. Kvalheim, Esq. Monarch Plaza, Suite 1600 3414 Peachtree Road, N.E. Atlanta, GA 30326 Tel: 404.577.6000 Fax: 404.221.6501 E-mail: gbarnes@bakerdonelson.com rbingham@bakerdonelson.com mkvalheim@bakerdonelson.com The Liquidating Plan The Debtor's Plan proposes a liquidation under Chapter 11 of the Bankruptcy Code. The funds required for implementation of the Plan and repayment of the DIP financing will be generated from operating the cattle ranch and proceeds of the sale of personal property, and funds required for the distributions will be provided from the proceeds of the sale of the Real Property and Personal Property of the Debtor. According to the Disclosure Statement, the Plan provides that: * The allowed secured claims of governmental units (Class 1), are unimpaired. There are no known claims in this class. * The allowed secured claims of MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC (Class 2) in the stipulated amount of $26,817,816 as of the Petition Date, plus interest at the non-default rate of 5% per annum accrued from the Petition Date to the Closing Date, plus postpetition reasonable attorney's fees and costs, and less adequate protection payments will be paid in full on the Effective Date from the net proceeds from the sale of the Debtor's real property. If the Property is not sold on or before Oct. 31, 2016, the Debtor may surrender the Property in full and final satisfaction of the MLIC Claim. * The allowed secured claim of John d. Phillips (Class 3), in the stipulated Allowed Amount of $28,015,077, will be paid on the Effective Date from the Net Proceeds of the sale of the Real Property. Claims in this class are not designated to be paid in full under this Plan. To the extent net proceeds from the sale of the real property are insufficient to pay the Class 3 claim in full, any deficiency will be treated as a Class 5 Claim. In the event of Surrender, the claim will only be entitled to distribution pursuant to Class 5. * Non-tax priority claims (Class 4) are impaired and will be paid in full, together with plan interest, on the effective date from the net proceeds from the sale of Personal Property. * General unsecured claims (Class 5) will receive, pro rata, the net proceeds of the sale of Personal Property of the Debtor, following payment of Unclassified and Class 4 Claims in full. * Subordinated claims (Class 6) will be paid on a pro rata basis, the remaining net proceeds from the sale of the Real Property and Personal Property to the extent Net Proceeds are available after distributions to allowed unclassified, and Class 1 – 5 Claims. * Equity interest holders of the Debtor (Class 7) will not retain or receive any property under the Plan. The Debtor filed its Plan and Disclosure Statement on Aug. 28, 2015. On Dec. 23, 2015, the Debtor filed an Amended Disclosure Statement. A copy of the Amended Disclosure statement is available for free at: http://bankrupt.com/misc/Fourth_Q_140_Am_DS.pdf About Fourth Quarter Fourth Quarter Properties 86, LLC, owns and operates the Little Jennie Ranch. The Ranch was created when several homesteads along Dell Creek were combined, and now comprises of 3,011 acres just north of the tiny community of Bondurant, Wyoming. The Ranch is a working cattle ranch and seeped in a rich history and has been in operation since the 1950s and considered by many to be the crown jewel of working cattle ranches in Wyoming. Black Angus cattle thrive on the property, which with its meadowlands and grazing leases can provide sufficient forage for 1,100 to 1,400 head. As of Fourth Quarter's bankruptcy filing, the Ranch was home to and continues to be home to livestock, comprising of approximately 468 commercial cattle, 11 horses, 13 heifer calves, and 2 steer calves. The Ranch's complex cattle operations are run by Mr. Dick Beck, one of the premier ranch managers in the United States, with Three Trees Ranch, Inc., one of the largest purebred Angus operations in the nation. Little Suwanee Holdings, LLC, owns 95 percent of the membership interests in the Debtor while J. Bruce Williams, Jr., holds the remaining 5 percent. Due to notices of foreclosure by MetLife, Fourth Quarter Properties 86 sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 15-10135) in Newnan, Georgia, on Jan. 22, 2015. The Debtor tapped Stone & Baxter LLP, in Macon, Georgia, as bankruptcy counsel. The Debtor also received approval to hire Thomas A. Ogle to appraise its real property. The Debtor disclosed $49,124,608 in assets and $75,377,946 in liabilities in its schedules. Debtor attended the Sec. 341 meeting of creditors on March 11, 2015. No creditor's committee has been appointed in the Bankruptcy Case. * * * The Debtor obtained approval to obtain a credit facility from Fourth Quarter Properties 100, LLC in the maximum amount of $500,000. On Feb. 3, 2016, the Debtor obtained approval to extend the term of the DIP financing to Oct. 31, 2016, and raise the maximum amount to $1,750,000. FOURTH QUARTER: Plan Confirmation Underway; DIP Facility Extended ----------------------------------------------------------------- Judge W. Homer Drake in early January entered an order approving the Amended Disclosure Statement for Fourth Quarter Properties 86, LLC's Plan of Liquidation dated Dec. 23, 2015. A hearing to consider confirmation of the Amended Plan and any objections to confirmation of the Plan was scheduled for Feb. 2, 2016 at 10:00 a.m. As of Feb. 5, the Court has not yet entered on the case docket a written ruling on the Debtor's Plan. However, on Feb. 3, 2016, the Debtor obtained approval to extend the term of the DIP financing from Fourth Quarter Properties 100, LLC to Oct. 31, 2016, and raise the maximum amount to $1,750,000. The Debtor's Plan provides that funds required for payment to creditors will be generated from operating the cattle ranch and proceeds from the sale of real property which will occur no later than Oct. 31, 2016. To continue the operations of the cattle ranch until the sale, the Debtor will continue to require funds from its DIP Lender through Oct. 31, 2016. At the Disclosure Statement hearing, the judge held that the Plan outline, as amended, contains adequate information to enable creditors and other parties-in-interest to make an informed judgment about the Plan. The judge ordered that: * On or before Jan. 5, 2016, counsel for the Debtor will transmit the Plan Package to creditors, equity security holders, and other parties; * Ballots accepting or rejecting the Plan are due Jan. 26, 2016; * Any objection to confirmation of the Plan will be filed with the Court on or before Jan. 26, 2016. * A hearing to consider confirmation of the Amended Plan and any objection to confirmation of the Plan will be held on Feb. 2, 2016 at 10:00 a.m. MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC, have asked the Court to deny confirmation of the Amended Plan on various grounds. According to the balloting report from the Debtor's counsel, the Debtor's Plan received the requisite acceptances to be confirmed. Attorneys for the Debtor: STONE & BAXTER, LLP Ward Stone, Jr., Esq. Matthew S. Cathey, Esq. Fickling & Company Building, Suite 800 577 Mulberry Street Macon, GA 31201 Tel: (478) 750-9898 Fax: (478) 750-9899 The Liquidating Plan The Debtor's Plan proposes a liquidation under Chapter 11 of the Bankruptcy Code. The funds required for implementation of the Plan and repayment of the DIP financing will be generated from operating the cattle ranch and proceeds of the sale of personal property, and funds required for the distributions will be provided from the proceeds of the sale of the Real Property and Personal Property of the Debtor. According to the Disclosure Statement, the Plan provides that: * The allowed secured claims of governmental units (Class 1), are unimpaired. There are no known claims in this class. * The allowed secured claims of MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC (Class 2) in the stipulated amount of $26,817,816 as of the Petition Date, plus interest at the non-default rate of 5% per annum accrued from the Petition Date to the Closing Date, plus postpetition reasonable attorney's fees and costs, and less adequate protection payments will be paid in full on the Effective Date from the net proceeds from the sale of the Debtor's real property. If the Property is not sold on or before Oct. 31, 2016, the Debtor may surrender the Property in full and final satisfaction of the MLIC Claim. * The allowed secured claim of John d. Phillips (Class 3), in the stipulated Allowed Amount of $28,015,077, will be paid on the Effective Date from the Net Proceeds of the sale of the Real Property. Claims in this class are not designated to be paid in full under this Plan. To the extent net proceeds from the sale of the real property are insufficient to pay the Class 3 claim in full, any deficiency will be treated as a Class 5 Claim. In the event of Surrender, the claim will only be entitled to distribution pursuant to Class 5. * Non-tax priority claims (Class 4) are impaired and will be paid in full, together with plan interest, on the effective date from the net proceeds from the sale of Personal Property. * General unsecured claims (Class 5) will receive, pro rata, the net proceeds of the sale of Personal Property of the Debtor, following payment of Unclassified and Class 4 Claims in full. * Subordinated claims (Class 6) will be paid on a pro rata basis, the remaining net proceeds from the sale of the Real Property and Personal Property to the extent Net Proceeds are available after distributions to allowed unclassified, and Class 1 – 5 Claims. * Equity interest holders of the Debtor (Class 7) will not retain or receive any property under the Plan. The Debtor filed its Plan and Disclosure Statement on Aug. 28, 2015. On Dec. 23, 2015, the Debtor filed an Amended Disclosure Statement. A copy of the Amended Disclosure statement is available for free at: http://bankrupt.com/misc/Fourth_Q_140_Am_DS.pdf About Fourth Quarter Fourth Quarter Properties 86, LLC, owns and operates the Little Jennie Ranch. The Ranch was created when several homesteads along Dell Creek were combined, and now comprises of 3,011 acres just north of the tiny community of Bondurant, Wyoming. The Ranch is a working cattle ranch and seeped in a rich history and has been in operation since the 1950s and considered by many to be the crown jewel of working cattle ranches in Wyoming. Black Angus cattle thrive on the property, which with its meadowlands and grazing leases can provide sufficient forage for 1,100 to 1,400 head. As of Fourth Quarter's bankruptcy filing, the Ranch was home to and continues to be home to livestock, comprising of approximately 468 commercial cattle, 11 horses, 13 heifer calves, and 2 steer calves. The Ranch's complex cattle operations are run by Mr. Dick Beck, one of the premier ranch managers in the United States, with Three Trees Ranch, Inc., one of the largest purebred Angus operations in the nation. Little Suwanee Holdings, LLC, owns 95 percent of the membership interests in the Debtor while J. Bruce Williams, Jr., holds the remaining 5 percent. Due to notices of foreclosure by MetLife, Fourth Quarter Properties 86 sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 15-10135) in Newnan, Georgia, on Jan. 22, 2015. The Debtor tapped Stone & Baxter LLP, in Macon, Georgia, as bankruptcy counsel. The Debtor also received approval to hire Thomas A. Ogle to appraise its real property. The Debtor disclosed $49,124,608 in assets and $75,377,946 in liabilities in its schedules. Debtor attended the Sec. 341 meeting of creditors on March 11, 2015. No creditor's committee has been appointed in the Bankruptcy Case. * * * On the Debtor's motion, the Bankruptcy Court set Aug. 14, 2015 as the bar date for filing of proofs of claim for any person or entity. The Debtor obtained approval to obtain a credit facility from Fourth Quarter Properties 100, LLC in the maximum amount of $500,000. On Feb. 3, 2016, the Debtor obtained approval to extend the term of the DIP financing to Oct. 31, 2016, and raise the maximum amount to $1,750,000. FOURTH QUARTER: Plan Has Requisite Acceptances to Be Confirmed -------------------------------------------------------------- According to the balloting report from debtor Fourth Quarter Properties 86, LLC's counsel, the Debtor's Plan of Liquidation received the requisite acceptances to be confirmed: * Sublette County treasurer, with an $8,217 claim (Class 1), voted to accept the Plan. * MLIC, with a $26.8 million claim (Class 2), rejected the Plan. * John D. Phillips, with a $28.05 million claim (Class 3) accepted the Plan. * No ballots were received from non-tax priority claimants (Class 4). * Cushing, Morris, Armbuster & Montgomery, LLP, with a $2,797 claim (Class 5), voted to accept the Plan. * Fourth Quarter Property 100, LLC, and 3 other claimants, with total claims of $19 million (Class 6), all voted to accept the Plan. A copy of the Balloting Report is available for free at: http://bankrupt.com/misc/Fourth_Q_163_Ballot_Report.pdf The Liquidating Plan The Debtor's Plan proposes a liquidation under Chapter 11 of the Bankruptcy Code. The funds required for implementation of the Plan and repayment of the DIP financing will be generated from operating the cattle ranch and proceeds of the sale of personal property, and funds required for the distributions will be provided from the proceeds of the sale of the Real Property and Personal Property of the Debtor. According to the Disclosure Statement, the Plan provides that: * The allowed secured claims of governmental units (Class 1), are unimpaired. There are no known claims in this class. * The allowed secured claims of MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC (Class 2) in the stipulated amount of $26,817,816 as of the Petition Date, plus interest at the non-default rate of 5% per annum accrued from the Petition Date to the Closing Date, plus postpetition reasonable attorney's fees and costs, and less adequate protection payments will be paid in full on the Effective Date from the net proceeds from the sale of the Debtor's real property. If the Property is not sold on or before Oct. 31, 2016, the Debtor may surrender the Property in full and final satisfaction of the MLIC Claim. * The allowed secured claim of John d. Phillips (Class 3), in the stipulated Allowed Amount of $28,015,077, will be paid on the Effective Date from the Net Proceeds of the sale of the Real Property. Claims in this class are not designated to be paid in full under this Plan. To the extent net proceeds from the sale of the real property are insufficient to pay the Class 3 claim in full, any deficiency will be treated as a Class 5 Claim. In the event of Surrender, the claim will only be entitled to distribution pursuant to Class 5. * Non-tax priority claims (Class 4) are impaired and will be paid in full, together with plan interest, on the effective date from the net proceeds from the sale of Personal Property. * General unsecured claims (Class 5) will receive, pro rata, the net proceeds of the sale of Personal Property of the Debtor, following payment of Unclassified and Class 4 Claims in full. * Subordinated claims (Class 6) will be paid on a pro rata basis, the remaining net proceeds from the sale of the Real Property and Personal Property to the extent Net Proceeds are available after distributions to allowed unclassified, and Class 1 to 5 Claims. * Equity interest holders of the Debtor (Class 7) will not retain or receive any property under the Plan. The Debtor filed its Plan and Disclosure Statement on Aug. 28, 2015. On Dec. 23, 2015, the Debtor filed an Amended Disclosure Statement. A copy of the Amended Disclosure statement is available for free at: http://bankrupt.com/misc/Fourth_Q_140_Am_DS.pdf About Fourth Quarter Fourth Quarter Properties 86, LLC, owns and operates the Little Jennie Ranch. The Ranch was created when several homesteads along Dell Creek were combined, and now comprises of 3,011 acres just north of the tiny community of Bondurant, Wyoming. The Ranch is a working cattle ranch and seeped in a rich history and has been in operation since the 1950s and considered by many to be the crown jewel of working cattle ranches in Wyoming. Black Angus cattle thrive on the property, which with its meadowlands and grazing leases can provide sufficient forage for 1,100 to 1,400 head. As of Fourth Quarter's bankruptcy filing, the Ranch was home to and continues to be home to livestock, comprising of approximately 468 commercial cattle, 11 horses, 13 heifer calves, and 2 steer calves. The Ranch's complex cattle operations are run by Mr. Dick Beck, one of the premier ranch managers in the United States, with Three Trees Ranch, Inc., one of the largest purebred Angus operations in the nation. Little Suwanee Holdings, LLC, owns 95 percent of the membership interests in the Debtor while J. Bruce Williams, Jr., holds the remaining 5 percent. Due to notices of foreclosure by MetLife, Fourth Quarter Properties 86 sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 15-10135) in Newnan, Georgia, on Jan. 22, 2015. The Debtor tapped Stone & Baxter LLP, in Macon, Georgia, as bankruptcy counsel. The Debtor also received approval to hire Thomas A. Ogle to appraise its real property. The Debtor disclosed $49,124,608 in assets and $75,377,946 in liabilities in its schedules. Debtor attended the Sec. 341 meeting of creditors on March 11, 2015. No creditor's committee has been appointed in the Bankruptcy Case. * * * The Debtor obtained approval to obtain a credit facility from Fourth Quarter Properties 100, LLC in the maximum amount of $500,000. On Feb. 3, 2016, the Debtor obtained approval to extend the term of the DIP financing to Oct. 31, 2016, and raise the maximum amount to $1,750,000. GREEN MOUNTAIN: Crimson Allowed to Pursue Charging Order -------------------------------------------------------- A bankruptcy judge has lifted the automatic stay to allow Crimson Peachtree Holdings LLC to pursue a charging order against the membership interests of Daniel Cowart in Georgia Flattop Partners LLC. In a Feb. 2 ruling, Judge Barbara Ellis-Monro allowed the stay to be lifted in the Chapter 11 case of Georgia Flattop, the parent company of Green Mountain Management LLC. The automatic stay is an injunction that halts actions by creditors against a company in bankruptcy protection. Mr. Cowart owns 100% of the membership interests of Georgia Flattop, which was listed as a defendant in a petition for charging order filed by Crimson in the Superior Court of Gwinnett, County Georgia. Separately, Judge Ellis-Monro approved a settlement between Georgia Flattop and UMB Bank, which holds liens on the remaining assets of the company and its subsidiary that include cash and the right to proceeds of accounts receivable. The agreement required the companies to pay $185,000 to UMB, and another $300,000 for its fees and expenses. Meanwhile, the companies will retain $372,000 "free of any claims of UMB" for the benefit of the firms they hired in connection with their bankruptcy. In August last year, the companies sold most of their assets to Big Sky Environmental LLC, which made a $2.4 million cash offer. The buyer also offered to assume some of the companies' liabilities. The assets were supposed to be sold at an auction, with Big Sky as the stalking horse bidder. The auction was canceled after it failed to draw competing bids, according to court filings. The sale had drawn flak from various groups, most of which opposed the sale of their collateral and the assumption by the buyer of their contracts with the companies. Mr. Cowart had also objected to the sale, arguing that Lee Katz, Green Mountain's manager, lacks authority to sell the assets, Big Sky was not a "good faith" purchaser and that the sale would only benefit the buyer. On August 28 last year, Mr. Cowart asked the bankruptcy judge to reconsider her August 17 ruling that approved the sale and to put on hold the closing of the sale. Judge Ellis-Monro denied the requests. About Green Mountain Green Mountain Management, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014. The petition was signed by Daniel B. Cowart, sole member of Georgia Flattop Partners, LLC, and chairman of Green Mountain Management, LLC. The Debtor estimated $10 million to $50 million in assets and debt. Georgia Flattop Partners, LLC is the managing member and holders of 93% of the stock. The case is assigned to Judge Barbara Ellis-Monro. No official committee of unsecured creditors has been appointed, and UMB Bank, n.a.'s request for the appointment of a trustee was resolved consensually pursuant to this Court's order entered on Nov. 20, 2014. On May 29, 2015, the Debtor filed an application to employ Nelson Mullins Riley & Scarborough LLP as its bankruptcy counsel. The filing came after the Debtor notified Alston & Bird LLP that Green Mountain Aggregates LLC, Dan Cowart, Dan Cowart Inc. and the Debtor intended to pursue claims against the law firm. Alston & Bird was hired by the Debtor in 2014 to be its bankruptcy counsel. On June 1, 2015, the firm withdrew as its counsel. On June 2, 2015, Judge Ellis-Monro authorized the Debtor to hire Atlanta-based Nelson Mullins to be its new bankruptcy counsel. The Court established Oct. 9, 2015, as the deadline for file proofs of claim against the Debtors. HAGGEN HOLDINGS: Seeks Approval of Albertson's Settlement --------------------------------------------------------- Haggen Holdings, LLC, et al. and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court to approve their settlement agreement with Albertson's LLC, Cerberus Capital Management, L.P., et al., and Comvest Investment Partners IV, LP, et al. The Debtors and the Official Committee relate that AB Acquisition LLC, and certain affiliates of AB Acquisition LLC, and Safeway Inc. entered into an agreement whereby AB Acquisition LLC agreed to acquire all of the outstanding shares of Safeway ("Merger"). They further relate that in conjunction with the Merger, the Federal Trade Commission initiated an investigation of the Merger and ordered Albertson's and Safeway to divest 168 stores. The Debtors and the Official Committee added that Albertson's sold, and Haggen acquired, 146 stores ("Divested Stores"), pursuant to an Asset Purchase Agreement dated Dec. 10, 2014 ("2014 APA"). The Debtors and the Official Committee tell the Court that Albertson's commenced an action against Haggen Holdings in the Superior Court of the State of Delaware in and for New Castle County, seeking payment for inventory sold and other related charges and damages of at least $41,104,056 related to the 2014 APA, and asserting claims for breach of contract, anticipatory breach of contract, fraud, and breach of the implied covenant of good faith and fair dealing. They further tell the Court that as a result of the commencement of the Cases, the State Court Action was stayed. The Debtors and the Official Committee relate that Haggen Holdings commenced an action against Albertson's in the United States District Court for the District of Delaware, seeking damages in excess of $1 billion for claims under Section 7 of the Clayton Act, Section 2 of the Sherman Act, breach of contract, indemnification, breach of the implied covenant of good faith and fair dealing, fraud, unfair competition, misappropriation of trade secrets under several state laws, conversion, and Washington's Consumer Protection Act. The Debtors and the Official Committee contend Albertson's denied any liability for the claims asserted against it in the District Court Action and asserted counter-claims ("Counter-Claims") seeking approximately $100 million in damages against Haggen for claims including breach of contract, fraud, breach of implied covenant of good faith and fair dealing, recovery of attorneys' fees, and recoupment. They further contend that the Parties have engaged in extensive negotiations in an effort to enter into the Settlement Agreement, thereby avoiding the burden and expense of proceeding to trial as well as minimizing the scope of, risks and costs associated with complex litigation. The Debtors and the Official Committee believe that the Settlement Agreement will help preserve the value of the Debtors' estates and contribute to maximizing the recoveries of creditors in the Chapter 11 cases. The Settlement Agreement contains, among others, these key terms: (a) Cash Payment: Within 3 business days after the occurrence of the Effective Date, Albertson's shall pay $5,750,000 in cash to a trust to be formed by the Committee ("Creditor Trust") for the exclusive benefit of the unsecured creditors of the Debtors, other than Haggen Holdings. (b) Allowed Claim: Upon the occurrence of the Effective Date, Albertson's shall be deemed to have an allowed general unsecured claim in the amount of $8,250,000 solely against the estate of Haggen Holdings ("Holdco Claim"), provided, however, that Albertson's will, upon the Effective Date, irrevocably and unconditionally transfer the Holdco Claim, including all voting and distribution rights with respect thereto, to the Creditor Trust. (c) Dismissal of Pending Litigation: Within 3 business days after the Final Order Date, Haggen will file a stipulation dismissing with prejudice the District Court Action, and Albertson's will file a stipulation dismissing with prejudice the State Court Action. (d) Releases: Upon the occurrence of the Effective Date, the Haggen/Comvest Releasors will release the Albertson's/Cerberus Releasees, and the Albertson's/Cerberus Releasors will release the Haggen/Comvest Releasees from any and all claims, demands, causes of action or sums owed, foreseeable or unforeseeable, which have accrued at any time before the signing of the Settlement Agreement, including both known and Unknown Claims, in any way relating to Haggen, the State Court Action, the District Court Action, the 2014 APA, the Counter-Claims, the operation of Haggen's business, or these Cases, including any and all causes of action arising under chapter 5 of the Bankruptcy Code. The Motion is scheduled for hearing on Feb. 17, 2016 at 2:00 p.m. The deadline for the filing of objections to the Motion is set on Feb. 10, 2016 at 4:00 p.m. Haggen Holdings is represented by: Matthew B. Lunn, Esq. Robert F. Poppiti, Jr., Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302)571-6600 Facsimile: (302)571-1256 E-mail: mlunn@ycst.com rpoppiti@ycst.com - and - Frank A. Merola, Esq. Sayan Bhattacharyya, Esq. Elizabeth Taveras, Esq. STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038 Telephone: (212)806-5400 Facsimile: (212)806-6006 E-mail: fmerola@stroock.com sbhattacharyya@stroock.com etaveras@stroock.com The Official Committee of Unsecured Creditors is represented by: Bradford J. Sandler, Esq. Robert J. Feinstein, Esq. Peter J. Keane, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor Wilmington, Delaware 19801 Telephone: (302)652-4100 Facsimile: (302)652-4400 E-mail: bsandler@pszjlaw.com rfeinstein@pszjlaw.com pkeane@pszjlaw.com About Haggen Holdings Headquartered in Bellingham, Washington, Haggen was founded in 1933 as a single grocery store. From 1933 to 2014, Haggen grew into a 30-store family-run grocery chain, with stores located in the northwestern United States. From 2011 to 2014, Haggen reduced its store base to 18, including a stand-alone pharmacy location. Haggen rapidly expanded in 2014 and 2015, and, as of the Petition Date, Haggen owned and operated 164 stores through three operating companies: Haggen, Inc., Haggen Opco North, LLC and Haggen Opco South, LLC. Haggen Holdings, LLC, and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-11874 to 15-11879) on Sept. 8, 2015, with the intention of reorganizing, or selling as a going concern, their stores for the benefit of their creditors. The petitions were signed by Blake Barnett, the chief financial officer. The Debtors estimated assets of $50 million to $100 million and estimated liabilities of $10 million to $50 million. Young, Conaway, Stargatt & Taylor, LLP, is serving as the Debtors' local counsel. Stroock & Stroock & Lavan LLP serves as the Debtors' general counsel. Alvarez & Marsal North America, LLC, acts as the Debtors' financial advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. In September 2015, T. Patrick Tinker, assistant U.S. trustee for Region 3, appointed seven creditors to the official committee of unsecured creditors. Haggen Holdings, LLC, and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware for authorization to sell certain assets of Haggen OpCo North, LLC, free and clear of liens, claims, interests and encumbrances to Albertson's LLC. The assets which the Debtors seek to sell consist of certain pharmaceutical assets of Haggen OpCo North, LLC ("Operating Debtor") held at its store located at 11012 Canyon Rd. East in Puyallup, Washington ("Puyallup Store"). The Debtors contend that Albertson's is the highest and best bidder for such pharmaceutical assets. The Debtors further contend that the approval of the Purchase Agreement will generate cash proceeds for the Debtors' estates. The Purchase Agreement contains, among others, the following relevant terms: (a) Purchase Price: The purchase price for the Assets is the aggregate amount equal to (i) $1,025,000 collectively for the Records and Goodwill, plus (ii) the cost of the Inventory determined in accordance with the Purchase Agreement, subject to a cap of $350,000. (b) Closing Date: The closing of the transaction shall take place on the Transfer Date. The Transfer Date shall be March 9, 2016. (c) Assets: consist of the following: (i) All original and all copies of any and all prescription records, customer records, lists and medication profiles, and all other written or recorded information in any form relating to the operation of the Pharmacy including, without limitation, prescription refill logs, signature logs, prescription hard copies, a computer backup tape and if requested by the Buyer, a paper record of all patient profiles ("Records"). (ii) The goodwill of the Pharmacy, which shall exclude, for the avoidance of doubt, any trademarks, trade names, service marks, logos or other intellectual property of Seller, any proprietary technology of Seller and any rights or claims of Seller related to ongoing litigation or similar matters, including any claims against Buyer or its parents, subsidiaries or affiliates ("Goodwill"). (iii) Seller's entire inventory of Prescription Drugs located at the Pharmacy on the Transfer Date ("Inventory"). The Motion is supported by a declaration of Jonathan P. Goulding, the Managing Director of Alvarez & Marsal North America, LLC ("A&M"). A&M was engaged by the Debtors to provide general restructuring and financial advice. Haggen Holdings is represented by: Matthew B. Lunn, Esq. Robert F. Poppiti, Jr., Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302)571-6600 Facsimile: (302)571-1256 E-mail: mlunn@ycst.com rpoppiti@ycst.com - and - Frank A. Merola, Esq. Sayan Bhattacharyya, Esq. Elizabeth Taveras, Esq. STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038 Telephone: (212)806-5400 Facsimile: (212)806-6006 E-mail: fmerola@stroock.com sbhattacharyya@stroock.com etaveras@stroock.com About Haggen Holdings Headquartered in Bellingham, Washington, Haggen was founded in 1933 as a single grocery store. From 1933 to 2014, Haggen grew into a 30 store family-run grocery chain, with stores located in the northwestern United States. From 2011 to 2014, Haggen reduced its store base to 18, including a stand-alone pharmacy location. Haggen rapidly expanded in 2014 and 2015, and, as of the Petition Date, Haggen owned and operated 164 stores through three operating companies: Haggen, Inc., Haggen Opco North, LLC and Haggen Opco South, LLC. Haggen Holdings, LLC, and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-11874 to 15-11879) on Sept. 8, 2015, with the intention of reorganizing, or selling as a going concern, their stores for the benefit of their creditors. The petitions were signed by Blake Barnett, the chief financial officer. The Debtors estimated assets of $50 million to $100 million and estimated liabilities of $10 million to $50 million. Young, Conaway, Stargatt & Taylor, LLP, is serving as the Debtors' local counsel. Stroock & Stroock & Lavan LLP serves as the Debtors' general counsel. Alvarez & Marsal North America, LLC, acts as the Debtors' financial advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. In September 2015, T. Patrick Tinker, assistant U.S. trustee for Region 3, appointed seven creditors to the official committee of unsecured creditors. HAGGEN HOLDINGS: Seeks to Sell Puyallup Store Pharmaceutical Assets ------------------------------------------------------------------- Haggen Holdings, LLC, and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware for authorization to sell certain assets of Haggen OpCo North, LLC, free and clear of liens, claims, interests and encumbrances to Albertson's LLC. The assets which the Debtors seek to sell consist of certain pharmaceutical assets of Haggen OpCo North, LLC ("Operating Debtor") held at its store located at 11012 Canyon Rd. East in Puyallup, Washington ("Puyallup Store"). The Debtors contend that Albertson's is the highest and best bidder for such pharmaceutical assets. The Debtors further contend that the approval of the Purchase Agreement will generate cash proceeds for the Debtors' estates. The Purchase Agreement contains, among others, the following relevant terms: (a) Purchase Price: The purchase price for the Assets is the aggregate amount equal to (i) $1,025,000 collectively for the Records and Goodwill, plus (ii) the cost of the Inventory determined in accordance with the Purchase Agreement, subject to a cap of $350,000. (b) Closing Date: The closing of the transaction shall take place on the Transfer Date. The Transfer Date shall be March 9, 2016. (c) Assets: consist of the following: (i) All original and all copies of any and all prescription records, customer records, lists and medication profiles, and all other written or recorded information in any form relating to the operation of the Pharmacy including, without limitation, prescription refill logs, signature logs, prescription hard copies, a computer backup tape and if requested by the Buyer, a paper record of all patient profiles ("Records"). (ii) The goodwill of the Pharmacy, which shall exclude, for the avoidance of doubt, any trademarks, trade names, service marks, logos or other intellectual property of Seller, any proprietary technology of Seller and any rights or claims of Seller related to ongoing litigation or similar matters, including any claims against Buyer or its parents, subsidiaries or affiliates ("Goodwill"). (iii) Seller's entire inventory of Prescription Drugs located at the Pharmacy on the Transfer Date ("Inventory"). The Motion is supported by a declaration of Jonathan P. Goulding, the Managing Director of Alvarez & Marsal North America, LLC ("A&M"). A&M was engaged by the Debtors to provide general restructuring and financial advice. Haggen Holdings is represented by: Matthew B. Lunn, Esq. Robert F. Poppiti, Jr., Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302)571-6600 Facsimile: (302)571-1256 E-mail: mlunn@ycst.com rpoppiti@ycst.com - and - Frank A. Merola, Esq. Sayan Bhattacharyya, Esq. Elizabeth Taveras, Esq. STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038 Telephone: (212)806-5400 Facsimile: (212)806-6006 E-mail: fmerola@stroock.com sbhattacharyya@stroock.com etaveras@stroock.com About Haggen Holdings Headquartered in Bellingham, Washington, Haggen was founded in 1933 as a single grocery store. From 1933 to 2014, Haggen grew into a 30 store family-run grocery chain, with stores located in the northwestern United States. From 2011 to 2014, Haggen reduced its store base to 18, including a stand-alone pharmacy location. Haggen rapidly expanded in 2014 and 2015, and, as of the Petition Date, Haggen owned and operated 164 stores through three operating companies: Haggen, Inc., Haggen Opco North, LLC and Haggen Opco South, LLC. Haggen Holdings, LLC, and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-11874 to 15-11879) on Sept. 8, 2015, with the intention of reorganizing, or selling as a going concern, their stores for the benefit of their creditors. The petitions were signed by Blake Barnett, the chief financial officer. The Debtors estimated assets of $50 million to $100 million and estimated liabilities of $10 million to $50 million. Young, Conaway, Stargatt & Taylor, LLP, is serving as the Debtors' local counsel. Stroock & Stroock & Lavan LLP serves as the Debtors' general counsel. Alvarez & Marsal North America, LLC, acts as the Debtors' financial advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. In September 2015, T. Patrick Tinker, assistant U.S. trustee for Region 3, appointed seven creditors to the official committee of unsecured creditors. HORSEHEAD HOLDING: S&P Lowers CCR to 'D' on Ch. 11 Filing --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Pittsburgh-based zinc producer Horsehead Holding Corp. to 'D' from 'SD'. S&P also lowered its issue-level ratings on the company's senior secured notes to 'D' from 'CCC'. The rating action follows Horsehead's announcement that it has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Horsehead is seeking court and secured noteholder approval for a 12-month debtor-in-possession (DIP) facility totaling $90 million provided by a group of lenders holding in excess of 80% of the company's 10.5% secured notes. S&P will reassess its recovery ratings on Horsehead's prepetition debt in light of the bankruptcy filing, including the potential impact of the proposed DIP financing. IMH FINANCIAL: To Continue Selling Non-Performing Assets -------------------------------------------------------- IMH Financial Corporation issued a letter to the Company's shareholders on Jan. 26, 2016, disclosing information regarding recent retirement of debt, hotel renovations, and certain of the Company's initiatives being undertaken. According to the Company, it has fully retired the Five Mile Capital loan of $36 million and the Karlin Capital REO loan of $28.8 million. The Company has also substantially completed the renewal project at its hotel assets in Sedona. The Company further said that it plans to continue selling its non-performing assets in 2016. "Our plan was to have all of these assets sold by the end of the first quarter of 2016, but the complex nature of our remaining assets makes this task more challenging than we initially anticipated. We will continue to work diligently to sell these assets, and have pushed our planned liquidation to late 2016/early 2017," Lawrence D. Bain, chairman and chief executive officer, said. "IMH will focus on expanding its recurring income portfolio in the upcoming year. We are looking for assets that will not only bring us growing income annually, but growth in equity as well. We are looking at unique, boutique hotel assets that we can acquire or build under the L'Auberge brand. We hope to have some announcements in the near future." A copy of the Letter is available for free at: http://is.gd/yp6Q9R About IMH Financial Scottsdale, Ariz.-based IMH Financial Corporation was formed from the conversion of IMH Secured Loan Fund, LLC, or the Fund, a Delaware limited liability company, on June 18, 2010. The conversion was effected following a consent solicitation process pursuant to which approval was obtained from a majority of the members of the Fund to effect the Conversion Transactions and involved (i) the conversion of the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation, and (ii) the acquisition by the Company of all of the outstanding shares of the manager of the Fund Investors Mortgage Holdings Inc., or the Manager, as well as all of the outstanding membership interests of a related entity, IMH Holdings LLC, or Holdings on June 18, 2010. IMH Financial reported a net loss attributable to common shareholders of $39.5 million in 2014, a net loss attributable to common shareholders of $26.2 million in 2013 and a net loss attributable to common shareholders of $32.2 million in 2012. As of Sept. 30, 2015, the Company had $208.56 million in total assets, $121.78 million in total liabilities, $29.04 million in redeemable convertible preferred stock, and $57.73 million in total stockholders' equity. IMMACULATA UNIVERSITY: S&P Affirms 'BB+' Rating, Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to negative from stable on the Chester County Health & Education Facilities Authority, Pa.'s series 2013 MM2 fixed-rate revenue bonds and series 2013 S3 variable-rate demand bonds, issued for Immaculata University. At the same time, Standard & Poor's affirmed its 'BB+' long-term rating and underlying rating (SPUR) on the authority's bonds for Immaculata. In addition, Standard & Poor's affirmed its 'AA-/A-1' rating on the series 2013 S3 revenue bonds. The 'AA-' rating reflects S&P's application of the joint-support criteria (medium correlation) between Immaculata University and Manufacturers & Traders Trust Co., the letter of credit (LOC) provider. The 'A-1' short-term component of the rating reflects the LOC provider's current short-term rating. "The negative outlook reflects our opinion of the university's continued enrollment decline that has produced a full-accrual operating deficit in fiscal 2015," said Standard & Poor's credit analyst Charlene Butterfield, "and will likely pressure results into fiscal 2016." Management expects that enrollment will increase for fall 2016 as to date, preliminary demand metrics are ahead of those for the prior year. Though rising enrollment could lead to revenue growth and stronger operating performance, a trend of improvement could take time to emerge. S&P assessed Immaculata's enterprise profile as strong, characterized by enrollment that we expect to improve in fall 2016 and beyond following several years of steady declines, a solid retention rate compared with category medians, and solid financial management practices. S&P assessed its financial profile as vulnerable, with low available resources ratios compared with debt and expenses and consistent with category medians and a trend of steadily decreasing operating performance culminating in a full-accrual deficit for fiscal 2015. Combined, S&P believes these credit factors lead to an indicative stand-alone credit profile of 'bb+' and a final rating of 'BB+'. "The 'BB+' rating reflects our assessment of Immaculata's decreasing enrollment over the past five years," said Ms. Butterfield, "and very high dependence on tuition and other student-generated revenue." Other weaknesses include: -- Low available resources ratios, and -- Limited endowment. Securing the bonds is a general obligation of the university. The Sisters, Servants of the Immaculate Heart of Mary founded Immaculata University in Malvern sits on 165 acres approximately 20 miles west of Philadelphia. "The negative outlook reflects our expectation that enrollment declines are likely to pressure operating results through fiscal 2016," added Ms. Butterfield. S&P expects that enrollment will stabilize in fall 2016 and lead to revenue growth and stronger operating performance during the next year. S&P also expects that available resources ratios will remain at or near current levels during the next one-to-two years. S&P could consider a return to a stable outlook during the next year if enrollment improves substantially for fall 2016, allowing for greater-than-expected revenue growth and a return to at least break-even full-accrual operating performance for fiscal 2017, all while available resources ratios remain at or near current levels. Conversely, S&P could consider a lower rating, potentially by more than one notch, during the next year if incoming freshmen enrollment continues to decline in fall 2016, if full-accrual operating deficits fail to diminish from current levels, or if available resources ratios deteriorate. INC RESEARCH: S&P Assigns 'BB' Corp. Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' corporate credit rating on Raleigh, N.C.-based INC Research Holdings Inc. The outlook is positive. At the same time, S&P withdrew its 'BB' corporate credit rating on INC Research LLC. INC Research Holdings, Inc. is the parent entity of INC Research LLC, which S&P views as a core subsidiary. At the same time, S&P affirmed the 'BB' rating on INC Research LLC's senior secured first-lien credit facility, The recovery rating on this debt is '3', indicating S&P's expectation for meaningful (50% to 70%; at the low end of the range) recovery in the event of payment default. "INC Research's strong operating performance over the past several quarters, highlighted by double-digit revenue growth and adjusted EBITDA margins that are exceeding 24%, have enabled the company to rapidly deleverage to the 2x to 3x range by the end of 2015," said Standard & Poor's credit analyst Arthur Wong. While S&P projects some slowdown in revenue growth and a slight moderation of EBITDA margins, S&P expects the company's leverage to remain under 3x over the next two years. INC Research is one of the larger players in the CRO industry, which S&P projects to grow in the mid-single-digit range, benefiting from increasing R&D activity among the midsize pharmaceutical and biotech participants as well as increased rates of outsourcing among Big Pharma. S&P expects both the large pharmaceutical companies and their smaller biotechnology counterparts to continue outsourcing a growing portion of their development efforts because of internal cost pressures, a focus on core competencies, the lack of infrastructure to perform functions in-house, and the increasing complexity of U.S. Food and Drug Administration (FDA) requirements and protocols. S&P's positive rating outlook reflects its view that INC Research's financial policies should remain supportive of leverage in the upward to the low-3x range, and that at current book-to-bill and backlog levels, should support at least high-single-digit revenue growth over the next year. The likely pathway to a higher rating for INC Research is the continued successful execution of the company's growth plans, including maintaining book-to-bill ratios of greater than 1.2x, growing revenues beyond $1 billion, continuing to add new clients, especially larger pharmaceutical companies, at the same time it maintains leverage under 3x and FFO to debt of greater than 30%. INC Research is one of the larger players in the industry and its margins are on the higher side. However, the company has yet to develop a significant presence among the larger pharmaceutical companies. Alternatively, should INC Research's credit measures further improve to where leverage is under 2x long term and FFO to debt exceeds 45%, S&P would consider an upgrade. However, S&P believes that scenario is unlikely, given that the company is likely to be acquisitive as the CRO industry consolidates. INC Research is also likely to be opportunistic on the share repurchase front, as its private equity sponsor continues to divest its ownership shares. S&P could lower the rating if the company suffers an unexpected operational setback that results in an exodus of clients or adopts financial policies that are more aggressive than what S&P is incorporating into the rating. Specifically, should leverage climb to more than 3.5x over the longer term, due to share repurchase or acquisition activity, S&P would consider lowering the rating. S&P estimates that this translates into roughly $250 million to $300 million of capacity, assuming no additional acquired EBITDA. IPC CORP: S&P Assigns 'B' Rating on $125MM 1st Lien Notes --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' issue-level rating to $125 million of first-lien multi-currency notes issued by Jersey City, N.J.-based IPC Corp. The rating outlook is stable. S&P also affirmed both its 'B' corporate credit rating and 'B' issue-level rating on the company's senior secured first-lien term loan following the announcement that the company had issued $125 million of first-lien notes for private placement. The recovery rating on this debt remains '3', indicating S&P's expectation for meaningful recovery (50%-70%; upper half of the range) for the lenders in the event of a payment default. In addition, S&P affirmed its 'B-' issue-level rating on the company's senior secured second-lien term loan. The recovery rating on this debt remains '5', indicating S&P's expectation for modest recovery (10%-30%; lower half of the range) for the lenders in the event of a payment default. The ratings affirmation reflects S&P's expectation that pro forma for the transaction and forecasted synergies, adjusted leverage improves to about 5.7x for 2016, down from 6x in 2015. This includes a debt adjustment for the present value of the company's operating leases as well as synergies that are achieved over a 12-24 month period. In addition, S&P expects leverage to continue to gradually improve, driven by low single-digit percent revenue growth and stable EBITDA margins over the next 12-18 months. Under S&P's base-case scenario, the company will improve leverage to the mid-5x area by fiscal year-end 2016 while continuing to generate positive free operating cash flow. "We believe that the company can achieve a high percentage of its projected cost synergies by year-end 2017, driven mainly by a reduction in SG&A and network optimization. In addition, in our view, Etrali's compliance and voice recording business should complement IPC's compliance business. In addition, increased economies of scale, as a result of the acquisition, should further support projected synergies," said Standard & Poor's credit analyst William Savage. IPC has been the global market segment leader, based on installed turret positions and network communication services for traders. With the acquisition of Etrali, IPC will control a significant portion of the global trading communication systems and dealer voice market. The company's long-standing relationships with its clients should help it to continue to capitalize on the market need for state-of-the art communication technology and services for traders. Nevertheless, despite the company's leading market position, IPC has historically been susceptible to volatility in demand for trading systems. Also, IPC has a concentrated product line, which focuses primarily on the financial services sector. Given the uncertainty in the global economy, any unexpected drop in trading volume could lead to financial institutions scaling back their capital markets platforms or delaying upgrades. In addition, although enhanced voice services and data revenue is helping to offset top-line pressure on voice services, the overall revenue contribution from these products are still modest. As a result, S&P continues to assess the company's business risk profile as weak. S&P's outlook on the company is stable. Over the next 12 months, S&P expects low-single digit percent revenue growth and modest deleveraging as IPC continues to benefit from the recurring revenue associated with its long-term contracts, with free operating cash flow remaining stable, and liquidity remaining adequate. JHK INVESTMENTS: Has to Obtain Plan Confirmation by March 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Connecticut ordered that that if JHK Investments, LLC's case remains pending after Dec. 1, 2015, it will have to obtain confirmation of a Plan of Reorganization by March 31, 2016. On Nov. 30, 2015, the Court entered an order extending the Debtor's timetable for the filing and confirmation of a plan or, in the alternative, convert the case to Chapter 7 or dismiss the case. In this relation, the Court held that if the Debtor fails to meet the deadline, the U.S. Trustee may file with the Court a declaration certifying such non-compliance with service to the Debtor and its counsel. If the Debtor contradicts, the Court will hold a hearing strictly limited to the issue of compliance and the Court will determine whether the penalty for non-compliance is an order converting the case to a case under chapter 7 or an order dismissing the case. Previously, the Debtor made several requests for an extension of its deadline to file a plan of reorganization or motion to dismiss Chapter 11 proceedings, or, in the alternative, converting the case to Chapter 7 or dismiss the Debtor's case. According to the Debtor, it needed more time to finalize the plan support agreement which will provide the basis of a consensual plan, and draft a plan and disclosure statement. Senior secured lender Bay City Capital Fund V., L.P., and Bay City Capital Fund V. Co., Investment Fund L.P. did not object to the request. About JHK Investments JHK Investments, LLC, filed a Chapter 11 petition (Bankr. D. Conn. Case No. 12-51608) in Bridgeport, Conn., on Aug. 29, 2012, estimating under $100 million in assets and more than $10 million in liabilities. Bankruptcy Judge Alan H. Shiff presides over the case. James Berman, Esq., Lawrence S. Grossman, Esq., Craig I. Lifland, Esq., and Aaron Romney, Esq., at Zeisler & Zeisler, P.C., represent the Debtor. Westport, Connecticut-based JHK is an investment company founded by the former senior management team of United States Surgical Corporation. Founded by Leon C. Hirsch in 1963, USSC became a global medical device manufacturer with sales exceeding $1.2 billion and employing $4,000 Connecticut residents. The Debtor disclosed $38,690,639 in assets and $32,127,278 in liabilities as of the Chapter 11 filing. Following the success of USSC, Mr. Hirsch and two other senior USSC executives created JHK in order to produce and develop new markets and penetrate established markets throughout the world for high-tech medical devices. JHK owns equity in several start-up medical subsidiaries. The start-ups include Interventional Therapies, LLC, Auditory Licensing Company, LLC, Biowave Corporation, Gorham Enterprises, LLC, and American Bicycle Group, LLC. Bay City claims to be owed $31 million for funding provided to the Debtor since January 2011. The principals at JHK -- Mr. Hirsch, Turi Josefsen, and Robert A. Knarr -- guaranteed JHK's obligations, pledged the property in Wilton, Connecticut to secure obligations under the guaranty, and pledged all equity interests of JHK. In March 2012, Eleuthera, in its capacity as administrative agent for Bay City, declared an event of default as a result of the passage of the maturity date and the failure to pay the entire amount outstanding. On Aug. 28, 2012, Bay City and Eleuthera purported to exercise the pledge agreements insofar as they purported to register the Principals' interest in JHK in the name of Eleuthera, as nominee for Bay City, and purported to reserve their right to exercise voting rights in JHK. KALOBIOS PHARMACEUTICALS: Assures Bonuses Won't Go to Shkreli ------------------------------------------------------------- Jonathan Randles at Bankruptcy Law360 reported that beleaguered drugmaker KaloBios floated a plan on Jan. 27, 2016, in Delaware bankruptcy court to pay bonuses to its eight-person staff, saying it risks losing its employees after the arrest of its ousted CEO Martin Shkreli and assured the judge that none of the money will go to the former chief executive. KaloBios is seeking court permission to pay out $378,000 in bonuses to its employees over the next year, the bulk of which would be doled out before March 31. About KaloBios Pharmaceuticals Based in South San Francisco, Calif., KaloBios Pharmaceuticals, Inc., is a company biopharmaceutical company focused on the development of monoclonal antibody therapeutics. The Company's balance sheet at March 31, 2015, showed $32.0 million in total assets, $15.9 million in total liabilities, and a stockholders' deficit of $16.1 million. KaloBios Pharmaceuticals (Nasdaq: KBIO) on Dec. 29, 2015, filed a voluntary petition for bankruptcy protection under Chapter 11 of Title 11 of the United States Bankruptcy Code. The filing was made in the U.S. Bankruptcy Court for the District of Delaware (Case No. 15-12628). The Company is represented by Eric D. Schwartz of Morris, Nichols, Arsht & Tunnell. KEMET CORP: Incurs $8.60 Million Net Loss in Third Quarter ---------------------------------------------------------- Kemet Corporation filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.60 million on $177 million of net sales for the quarter ended Dec. 31, 2015, compared to net income of $2.91 million on $201 million of net sales for the same period in 2014. For the nine months ended Dec. 31, 2015, the Company reported a net loss of $38.5 million on $551 million of net sales compared to net income of $5.70 million on $629 million of net sales for the nine months ended Dec. 31, 2014. As of Dec. 31, 2015, the Company had $707 million in total assets, $583 million in total liabilities and $124.41 million in total stockholders' equity. Unrestricted cash and cash equivalents as of Dec. 31, 2015, of $43.2 million decreased $13.2 million from $56.4 million as of March 31, 2015. The Company's net working capital (current assets less current liabilities) as of Dec. 31, 2015, was $234 million compared to $239 million as of March 31, 2015. Cash and cash equivalents held by the Company's foreign subsidiaries totaled $23.9 million and $22.6 million at Dec. 31, 2015, and March 31, 2015, respectively. A full-text copy of the Form 10-Q is available for free at: http://is.gd/0aA85n About KEMET KEMET, based in Greenville, South Carolina, is a manufacturer and supplier of passive electronic components, specializing in tantalum, multilayer ceramic, film, solid aluminum, electrolytic, and paper capacitors. KEMET's common stock is listed on the NYSE under the symbol "KEM." * * * As reported by the TCR on March 26, 2013, Moody's Investors Service downgraded KEMET Corp.'s Corporate Family Rating to 'Caa1' from 'B2' and the Probability of Default Rating to 'Caa1-PD' from 'B2- PD' based on Moody's expectation that KEMET's liquidity will be pressured by maturing liabilities and negative free cash flow due to the interest burden and continued operating losses at the Film and Electrolytic segment. As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on KEMET to 'B-' from 'B+'. "The downgrade is based on continued top-line and margin pressures and lagging results from the restructuring of the Film & Electrolytic [F&E] business, which combined with cyclical weak end-market demand, has resulted in sustained, elevated leverage well in excess of 5x, persistent negative FOCF, and diminishing liquidity," said Standard & Poor's credit analyst Alfred Bonfantini. The TCR reported in August 2014 that S&P revised its outlook on KEMET to 'stable' from 'negative'. S&P affirmed the ratings, including the 'B-' corporate credit rating. KU6 MEDIA: Shanda Interactive Holds 69.9% of Ordinary Shares ------------------------------------------------------------ In an amended Schedule 13D filed with the Securities and Exchange Commission, Shanda Interactive Entertainment Limited, et al., disclosed that as of Feb. 1, 2016, they beneficially own 3,334,694,602 ordinary shares, Par Value $0.00005 Per Ordinary Share, and American Depositary Shares, Each Representing 100 Ordinary Shares, of KU6 Media representing 69.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/KIm9fg About Ku6 Media Ku6 Media Co., Ltd. -- http://ir.ku6.com/-- is an Internet video company in China focused on User-Generated Content. Through its premier online brand and online video Web site -- http://www.ku6.com/-- Ku6 Media provides online video uploading and sharing service, video reports, information and entertainment in China. As of Dec. 31, 2015, the Company had $9.01 million in total assets, $14.31 million in total liabilities and a $5.29 million total shareholders' deficit. PricewaterhouseCoopers Zhong Tian LLP, in Shanghai, the People's Republic of China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company's recurring losses, negative working capital, net cash outflows, and uncertainties associated with significant changes made, or planned to be made, in respect of the Company's business model, raise substantial doubt about the Company's ability to continue as a going concern. KU6 MEDIA: To Consider "Going Private" Proposal ----------------------------------------------- Ku6 Media Co., Ltd. announced that in response to the preliminary non-binding proposal letter dated Feb. 1, 2016, received by the Company's Board of Directors from Shanda Interactive Entertainment Limited, the controlling shareholder of the Company, to acquire the Company in a "going private" transaction, the Board has formed a special committee of independent directors who are not affiliated to any member of the Proposing Buyer consisting of Mr. Qingmin Dai, Mr. Yong Gui and Ms. Jun Deng to evaluate the Proposal. The Special Committee intends to retain its own independent financial advisor and legal counsel to assist it in its evaluation. The Company cautions its shareholders and others considering trading its securities that neither the Board nor the Special Committee has made any decision with respect to the Company's response to the Proposal. There can be no assurance that any definitive offer will be made by the Proposing Buyer or any other person, that any definitive agreement will be executed relating to the proposed transaction, or that the proposed transaction or any other transaction will be approved or consummated. About Ku6 Media Ku6 Media Co., Ltd. -- http://ir.ku6.com/-- is an Internet video company in China focused on User-Generated Content. Through its premier online brand and online video Web site -- http://www.ku6.com/-- Ku6 Media provides online video uploading and sharing service, video reports, information and entertainment in China. As of Dec. 31, 2015, the Company had $9.01 million in total assets, $14.31 million in total liabilities and a $5.29 million total shareholders' deficit. PricewaterhouseCoopers Zhong Tian LLP, in Shanghai, the People's Republic of China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company's recurring losses, negative working capital, net cash outflows, and uncertainties associated with significant changes made, or planned to be made, in respect of the Company's business model, raise substantial doubt about the Company's ability to continue as a going concern. LAGO RESORT: S&P Assigns 'B-' CCR, Outlook Stable ------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Tyre, N.Y.-based Lago Resort & Casino. The rating outlook is stable. At the same time, S&P assigned its 'B+' issue-level rating and '1' recovery rating to Lago's proposed $15 million first-out revolving credit facility and $240 million senior secured first-lien term loan facility due 2022. The '1' recovery rating indicates S&P's expectation for very high (90% to 100%) recovery of principal in the event of a payment default. S&P also assigned its 'CCC+' issue-level rating and '5' recovery rating to Lago's proposed $85 million senior secured second-lien term loan facility due 2022. The '5' recovery rating indicates S&P's expectation for modest (10% to 30%; upper half of the range) recovery of principal in the event of a payment default. Lago plans to use proceeds from the proposed transaction, along with about $100 million of equity financing from the company's owners, a $15 million vendor financing facility, and $10 million of operating cash flow to: -- Fund the development and construction of the Lago Resort & Casino; -- Fund the license and construction cost deposit payable to the State of New York; -- Establish an interest reserve to fund debt service through the construction period and the first three months following the opening of the casino; and -- Fund transaction fees and expenses. "The 'B-' corporate credit rating reflects the challenge of opening a new gaming project during a time of year when there is the potential for significant disruption from severe weather conditions, coupled with a thin interest reserve cushion (three months) that provides little margin for error if the opening of the casino is delayed or if the ramp up in operations is weaker than anticipated," said Standard & Poor's credit analyst Stephen Pagano. New gaming projects are often vulnerable to uncertain demand and difficulties managing initial costs, which can lead to poor profitability during the first several months of operations and difficulties ramping up cash flow quickly enough to satisfy fixed charges. The stable rating outlook reflects S&P's belief that Lago will have adequate funding in place to complete construction and that, despite substantial debt funding, the property will ramp up steadily to generate sufficient cash to service the capital structure and maintain adequate liquidity. In the first year of operations, S&P is anticipating adjusted leverage to be in the mid-5x area and for interest coverage to be in the mid-1x area, which would be in line with S&P's highly leveraged financial risk profile assessment. S&P could lower the rating if construction or legal challenges delay the project or cost overruns signal a potential liquidity shortfall, particularly given a relatively thin interest reserve. Additionally, S&P could lower the rating if operating results upon opening are weaker than we expect, as this could lead to a potential liquidity shortfall. S&P is unlikely to consider a higher rating until the casino is open and it can observe operating performance. Ratings upside would be contingent upon a successful opening and the company generating enough cash flow to facilitate deleveraging, such that S&P expects debt to EBITDA to track below 5x and EBITDA coverage of interest expense above 2x. Additionally, S&P could consider a higher rating if the property opens and ramps up successfully and Lago is able to sustain EBITDA margins in excess of 30%. LAS AMERICAS: Plan Disclosures Hearing Continued to May 20 ---------------------------------------------------------- Following a hearing on the disclosure statement explaining Las Americas 74-75, Inc.'s Chapter 11 plan on Jan. 29, 2016, Judge Edward A. Godoy in Puerto Rico ruled that: -- the debtor is to amend the disclosure statement and chapter 11 plan by Feb. 29, 2016; -- the hearing on disclosure statement is continued to May 20, 2016 at 9:30 a.m. at Courtroom #3 in Old San Juan; and -- the debtor is to notify all creditors of the hearing date when it files its amended disclosure statement and chapter 11 plan and file a certificate of service with the court. The judge also ordered that a non-evidentiary hearing on the jurisdictional issue as to the Debtor's motion for sanctions for violation of the automatic stay and request for damages, as supplemented is also scheduled for May 20, 2016, at 09:30 a.m. The hearing on the Disclosure Statement has been adjourned several times. Secured creditor ALD Acquisitions, LLC, opposes the approval of the Disclosure Statement, citing that the Disclosure Statement contains misleading and false financial information. The Chapter 11 Plan According to the Disclosure Statement, the Debtor has filed a Chapter 11 plan that proposes a 100% payment to creditors. The Debtor says that through its bankruptcy proceeding, it will be able to maximize the return of its assets while providing distribution to all creditors, including payment to its secured creditor ALD Acquisition, LLC. ALD's claim secured with a first rank lien in the amount of $4,380,000 over Lot No. 74 will be paid in full within 90 days from the Effective Date. ALD's allowed claim secured with a second rank note in the amount of $3,250,000 over Lot No. 74 will be paid within 90 days from the Effective Date. General unsecured claims of the Debtor will be paid in full within 24 months from the Effective Date. Holders of equity interests will not receive distribution under the Plan until all senior classes are paid in full. The Debtor filed its plan of reorganization and its disclosure statement on July 13, 2015. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Las_Americas_55_DS.pdf A copy of the first supplement to the Disclosure Statement filed on August 11, 2015, is available for free at: http://bankrupt.com/misc/Las_Americas_72_DS_Supplement.pdf About Las Americas 74-75 Las Americas 74-75, Inc., was incorporate in 2004 by Porfirio Guzman and Maria M. Benitez, and is the owner of certain real estate property located at the Hato Rey Ward, in San Juan, Puerto Rico, right next to the reorganized area of Plaza Las Americas. Las Americas 74-75, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 15-01527) on March 2, 2015. The petition was signed by Omar Guzman Benitez, vice president. The case is assigned to Judge Edward Godoy. Las Americas 74-75 tapped Carmen Conde Torres, Esq., at C. Conde & Associates, in San Juan, Puerto Rico, as counsel; and Albert Tamarez Vasquez as accountant. Las Americas disclosed total assets estimated at $21.2 million and total debt estimated at $18.7 million. MAGNUM HUNTER: Files Amended Bankruptcy Rule 2015.3 Report ---------------------------------------------------------- Magnum Hunter Resource Corp. and its affiliates filed an amended report with the U.S. Bankruptcy Court in Delaware, disclosing that they hold 44.53% stake in Eureka Hunter Holdings LLC as of Jan. 20, 2016. The companies earlier reported that they hold 45.53%. The amended report is available without charge at http://is.gd/MGbZYU About Magnum Hunter Resources Irving, Texas-based Magnum Hunter Resources Corporation, an oil and gas company that primarily engaged, through its subsidiaries, in the acquisition, development, and production of oil and natural gas reserves in the United States, said these macroeconomic factors, coupled with the their substantial debt obligations and natural gas gathering and transportation costs, strained their ability to sustain the weight of their capital structure and devote the capital necessary to maintain and grow their businesses. MHRC's total number of drilling rigs in operation in the United States is just 38 percent of the number of rigs that were in operation just one year ago. Magnum Hunter Resources Corporation and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12533) on Dec. 15, 2015. The petition was signed by Gary C. Evans, the chairman and CEO. The Debtors have engaged Kirkland & Ellis, LLP as their general counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, PJT Partners, LP as investment banker, Alvarez & Marsal North America, LLC, as restructuring advisor, and Prime Clerk, LLC as notice, claims and balloting agent. MALIBU LIGHTING: Deadline to Remove Suits Extended to May 4, 2016 ----------------------------------------------------------------- U.S. Bankruptcy Judge Kevin Gross has given Malibu Lighting Corp. until May 4, 2016, to file notices of removal of lawsuits involving the company and its affiliates. About Malibu Lighting Malibu Lighting Corporation, Outdoor Direct Corporation, National Consumer Outdoors Corporation, Beam Corporation, Smoke 'N Pit Corporation, Treasure Sensor Corporation and Stubbs Collections Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-12080) on Oct. 8, 2015. The petition was signed by David M. Baker as chief restructuring officer. Judge Kevin Gross is assigned to the case. The Debtors estimated both assets and liabilities of $10 million to $50 million. The Debtors have engaged Pachulski Stang Ziehl & Jones LLP as counsel, Piper Jaffray Co. as investment banker and Kurtzman Carson Consultants as claims and noticing agent. MLC was a manufacturer and supplier of outdoor and landscape lighting products, such as solar and low voltage lights and home security lights, including the parts and accessories associated with these products. ODC was a manufacturer and supplier of a variety of consumer goods, including (a) outdoor cooking products, such as outdoor gas grills, charcoal grills, smokers and fryers, (b) hand held lighting products, such as flashlights and spotlights, (c) landscape lighting products, and (d) parts and accessories associated with the foregoing products. MLC and ODC are currently winding down operations as a result of the termination of a business relationship with principal customer, Home Depot. NCOC is a manufacturer and supplier of both branded and private label pet bedding and pet accessory products. NCOC manufactures beds, accessories, and deodorizers for dogs as well as beds, scratching posts, and toys for cats. In addition, NCOC markets and sells boat covers manufactured primarily from Chinese suppliers. The Office of the U.S. Trustee appointed five creditors to the official committee of unsecured creditors. The committee is represented by Lowenstein Sandler PC. MASSILLON, OH: Moody’s Affirms 'Ba1' GOLT Debt Rating ------------------------------------------------------- Moody's Investors Service has affirmed the underlying rating on Massillon, OH's general obligation limited tax (GOLT) debt at Ba1. Concurrently, Moody's has revised the outlook to positive from stable. The Ba1 rating reflects the city's improved general fund position following the designation of fiscal emergency by the state and partial progress on implementation of the city's financial recovery plan. The rating additionally reflects the city's moderately-sized tax base; below average socioeconomic profile; modest debt burden; and above average exposure to unfunded pension liabilities. Rating Outlook Positive outlook reflects our expectation that the city's financial position will continue to improve given additional revenue enhancements and expenditure reductions available through a potential income tax increase and elimination of minimum staffing provisions. Factors that Could Lead to an Upgrade Improvement of socioeconomic indices Demonstrated trend of balanced operations Substantial increases in General Fund reserves Factors that Could Lead to a Downgrade Significant declines in the local economy and tax base resulting in decreased income tax revenues Return to imbalanced operations and General Fund balance deficits Failure to pay contractually required payments such debt service, pension, and payroll Legal Security Debt service on the city's GOLT debt is secured by the city's general revenues and taxing authority, subject to Ohio's statutory 10-mill limitation. Use of Proceeds. Not applicable. Obligor Profile The City of Massillon is located 25 miles south of Akron covering 19.4 square miles. The city's population is 32,149. MAYHEW & ASSOCIATES: In Bankruptcy; Creditors Meeting Feb. 12 ------------------------------------------------------------- The bankruptcy of Mayhew & Associates Inc. occurred on Jan. 21, 2016, and the first meeting of creditors will be held on Feb. 12, 2016, at 10:00 a.m., at the offices of Fasken Martineau DuMoulin LLP, 333 Bay St., Suite 2400 in Toronto, Ontario. KSV Kofman Inc. Licensed Trustee in Insolvency and Restructuring 150 King Street West, Suite 2308 Toronto, Ontario M5H 1J9 MEG ENERGY: Moody's Cuts Corporate Family Rating to Caa2 -------------------------------------------------------- Moody's Investors Service downgraded MEG Energy Corp.'s Corporate Family Rating (CFR) to Caa2 from B1, Probability of Default Rating to Caa2-PD from B1-PD, secured bank credit facility rating to B3 from Ba2 and senior unsecured notes rating to Caa3 from B2. The Speculative Grade Liquidity Rating was lowered to SGL-2 from SGL-1. The rating outlook is negative. This action resolves the review for downgrade that was initiated on January 21, 2016. "The downgrade reflects the material decline in MEG's cash flows expected in 2016 and 2017, which will result in very weak leverage and coverage metrics," said Paresh Chari, Moody's Analyst. Downgrades: Issuer: MEG Energy Corp. -- Probability of Default Rating, Downgraded to Caa2-PD from B1- PD -- Corporate Family Rating, Downgraded to Caa2 from B1 -- Senior Secured Bank Credit Facility, Downgraded to B3(LGD2) from Ba2(LGD2) -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3(LGD5) from B2(LGD5) Outlook Actions: Issuer: MEG Energy Corp. -- Outlook, Changed To Negative From Rating Under Review Ratings Lowered: -- Speculative Grade Liquidity Rating, Lowered to SGL-2 from SGL- 1 RATINGS RATIONALE MEG's Caa2 Corporate Family Rating (CFR) reflects very weak expected leverage metrics (debt to EBITDA exceeding 20x in 2016 and 2017, negative retained cash flow/debt) and EBITDA/interest coverage (well below 1x). While MEG has substantial reserves in key productive areas of the Athabasca oil sands region, it is uneconomic at the current oil price. The rating favorably recognizes MEG's good liquidity position for 2016. The SGL-2 Speculative Grade Liquidity Rating reflects MEG's good liquidity through 2016. As of September 30, 2015 and pro forma the December asset sale MEG had C$461 million of cash. Combined with an undrawn US$2.5 billion revolving credit facility, which matures in 2019, MEG will have ample liquidity to cover Moody's expected negative free cash flow of about C$325 million through 2016. MEG has no financial covenants and good sources of alternate liquidity through its ability to monetize its 50% ownership in the Access pipeline or other midstream assets. In accordance with Moody's Loss Given Default (LGD) Methodology, the US$1.3 billion secured term loan, is rated B3, two notches above the Caa2 CFR, reflecting the loss absorption cushion provided by the lower ranking unsecured notes. The US$750 million, US$800 million and the US$1 billion senior unsecured notes are rated Caa3, one notch below the CFR. The negative outlook reflects Moody's view that MEG's capital structure is untenable and will remain so for the next few years. The rating could be upgraded to Caa1 if EBITDA to interest is above 1.5x and liquidity is adequate. The rating could be downgraded to Caa3 if liquidity is likely to weaken. MEG is a publicly-listed Calgary, Alberta based steam-assisted-gravity-drainage oil sands developer and operator that produces over 80,000 bbls/day of bitumen. MIDSTATES PETROLEUM: R/C IV Eagle Reports 21.1% Equity Stake ------------------------------------------------------------ R/C IV Eagle Holdings, L.P., Riverstone/Carlyle Energy Partners IV, L.P., R/C Energy GP IV, LLC, disclosed that as of Jan. 29, 2016, they beneficially own 2,286,039 shares of common stock of Midstates Petroleum Company, Inc., representing 21.1 percent of the shares outstanding. On Jan. 25, 2016, Eagle Holdings sold an aggregate of 11,422 shares of Common Stock at a weighted average price of $0.72 pursuant to Rule 144. On Jan. 26, 2016, Eagle Holdings sold an aggregate of 15,962 shares of Common Stock at a weighted average price of $0.67 pursuant to Rule 144. On Jan. 27, 2016, Eagle Holdings sold an aggregate of 31,769 shares of Common Stock at a weighted average price of $0.70 pursuant to Rule 144. On Jan. 28, 2016, Eagle Holdings sold an aggregate of 36,667 shares of Common Stock at a weighted average price of $0.83 pursuant to Rule 144. On Jan. 29, 2016, Eagle Holdings sold an aggregate of 206,502 shares of Common Stock at a weighted average price of $1.06 pursuant to Rule 144. On Feb. 1, 2016, Eagle Holdings sold an aggregate of 38,325 shares of Common Stock at a weighted average price of $0.89 pursuant to Rule 144. A copy of the regulatory filing is available for free at http://is.gd/D6oSlH About Midstates Petroleum Company Midstates Petroleum Company, Inc. -- http://www.midstatespetroleum.com/-- is an independent exploration and production company focused on the application of modern drilling and completion techniques in oil and liquids-rich basins in the onshore U.S. Midstates' drilling and completion efforts are currently focused in the Mississippian Lime oil play in Oklahoma and Anadarko Basin in Texas and Oklahoma. The Company's operations also include the upper Gulf Coast tertiary trend in central Louisiana. Midstates reported net income of $117 million on $794 million of total revenues for the year ended Dec. 31, 2014, compared to a net loss of $344 million on $470 million of total revenues for the year ended Dec. 31, 2013. As of Dec. 31, 2014, the Company had $2.47 billion in total assets, $2 billion in total liabilities and $466 million in total stockholders' equity. The Company's independent auditor, Deloittee & Touche LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that Midstates' projected debt covenant violation and resulting lack of liquidity raise substantial doubt about its ability to continue as a going concern. * * * Midstates Petroleum carries a 'B' corporate credit rating from Standard & Poor's Ratings Services. As reported by the TCR on April 8, 2013, Moody's Investors Service affirmed Midstates Petroleum's 'B3' Corporate Family Rating. NATROL INC: Release of $20-Mil. Plan Reserves Approved ------------------------------------------------------ Judge Brendan Linehan Shannon on Jan. 28, 2016, granted a motion by Leaf123, Inc., formerly known as Natrol, Inc., et al. ("Reorganized Debtors") for entry of an order, in aid of implementation of their confirmed Chapter 11 plan: -- approving the release of certain reserves established under the Plan; and -- finding that the Debtors' tax liabilities for the tax year, ended Dec. 31, 2014. At the behest of the Reorganized Debtors, Judge Shannon ordered that: * The Federal Section 505 Request and the State Section 505 Requests constitute good and sufficient notice of the Reorganized Debtors' request for prompt determination under section 505 of the Bankruptcy Code. * With the exception of the State of California, the Debtors' federal and state tax liabilities for the tax year ended Dec. 31, 2014 have been discharged pursuant to Section 505 of the Bankruptcy Code. * Upon submission of a declaration indicating that the California Franchise Tax Board (the "FTB") has confirmed that (a) the FTB has completed its examination, and (b) the Debtors' have no outstanding tax liabilities to the State of California, the Debtors' state tax liabilities for the tax year ended December 31, 2014 with respect to the State of California will be deemed discharged pursuant to Section 505 of the Bankruptcy Code. Pending the submission of such declaration, the Reorganized Debtors are authorized and directed to maintain no reserve with respect to any potential 2014 tax liability to the State of California. * The Reorganized Debtors are authorized and directed to release in full any and all amounts remaining in the Tax Liability Reserve, the Fee Claim Reserve, the General Unsecured Claims Reserve, the GUC Representative Reserve, the Alleged Class Action Claims Reserve, and the Administrative Expense Claims Reserve. * The Reorganized Debtors are authorized and directed to make the Approved Distributions in the following amounts: a. New Natrol: $16,595,715; b. Mesrop Khoudagoulian: $2,706,542; and c. Plethico Professionals: $848,580. * In addition, the Reorganized Debtors are authorized and directed to pay the Plethico Professional Gross Up Funds, as well as any additional funds necessary to fully gross up the Plethico Professionals in light of payments received as Approved Distributions -- Gross Up Payments -- all consistent with the terms of the Plan and the New Natrol Settlement Agreement, as follows: a. Stibbe Law Firm: $16,663; b. Szecskay Attorneys at Law: $2,731; c. UCMS Group Hungary Kft.: $2,858; d. Connolly Gallagher, LLP: $4,636; and e. Miller, Canfield, Paddock and Stone, P.L.C.: $140,406. * At this time, New Natrol is not required to a letter of credit, security or other guarantee of payment as a condition to the Reorganized Debtors' reduction of the Tax Liability Reserve. * Neither the Wind-Down Committee, the Reorganized Debtors, nor any of their representatives, members, officers, directors, employees, agents, counsel, or other advisors or professionals shall have or incur any liability as a result of making the Approved Distributions or the payment of the Gross Up Payments contemplated herein based on the proposed reduction and distribution of the Reserves. Distribution of Released Funds The following Reserves were established under the Plan: a. Alleged Class Action Claims Reserve - $5.1 million; b. Disputed Liabilities Reserve - $1.702 million; c. General Unsecured Claims Reserve – $1.812 million; d. Administrative Expense Claims Reserve - $280,000; e. Fee Claim Reserve - $4 million; f. GUC Representative Reserve - $125,000; g. Wind-Down Expense Reserve - $3.93 million; and h. Tax Liability Reserve - $20.1 million; In seeking to release funds from the Reserves, the Debtors explained that: * $18,001,644 remains in the Tax Liability Reserve. The Reorganized Debtors have been discharged from their federal and state tax liabilities relating to the tax year ended December 31, 2014 (other than with respect to California). Further, all Priority Tax Claims were either (i) assumed by New Natrol as Disputed Liabilities under the New Natrol Settlement Agreement, (ii) otherwise asserted no liabilities against the Debtors, or (iii) are barred by virtue of the Governmental Bar Date, and thus, do not represent ongoing obligations of the Reorganized Debtors. * $1,598,142 remains in the Fee Claim Reserve. As the Fee Claim Bar Date has passed and the Final Fee Order is final and non-appealable, there are no additional Fee Claims that would be paid from the Fee Claim Reserve. As such, there is no longer a need to maintain the Fee Claim Reserve. * $140,959 remains in the General Unsecured Claims Reserve. All Allowed General Unsecured Claims have been satisfied and paid in full, with Interest, and accordingly, there are no outstanding, unresolved General Unsecured Claims against the estates. As such, there is no longer a need to maintain the General Unsecured Claims Reserve. * Funds currently in the GUC Representative Reserve total $84,769. All outstanding invoices of the GUC Representative and/or any professionals retained by the GUC Representative, have been paid in full and no amounts are due or outstanding. As such, there is no longer a need to maintain the GUC Representative Reserve. * $45,412 remains in the Alleged Class Action Reserve, which represents funds in excess of the amounts of all Allowed Alleged Class Action Claims. All of the Alleged Class Action Claims have been expunged and/or settled and paid, pursuant to orders of this Court. As such, there is no longer a need to maintain this Reserve. * Funds currently in the Administrative Expense Claims Reserve total $279,910. The Administrative Expense Claim Bar Date passed on Aug. 20, 2015. No Administrative Expense Claims were filed by the Administrative Expense Claim Bar Date. As such, there is no longer a need to maintain this Reserve Among many other features, the Plan authorized, approved, and incorporated by reference a settlement agreement -- New Natrol Settlement Agreement -- by and among the Debtors, on the one hand, and the Aurobindo Parties on the other, which fully resolved, among other things, the issues raised in the Complaint filed by New Natrol against Plethico Netherlands, Plethico Hungary, and Plethico India -- Plethico Parties -- and the Debtors (Adv. Pr. No. 15-50258 (BLS), alleging, among other things, various fraud-based causes of action stemming from the $132.5 million sale of the Debtors' assets to Aurobindo. Consistent with the terms of the Plan and the New Natrol Settlement Agreement, the Debtors sought to make the following Distributions from the funds released from the Reserves to these parties: Recipient Gross Amounts Source of Funding -------- ------------- ----------------- New Natrol $16,595,715 Non-Tax Reserves And TLR Funds Mr. Khoudagoulian $2,706,542 Non-Tax Reserves and TLR Funds Plethico Professionals $848,580 Non-Tax Reserves And TLR Funds -------------- TOTAL APPROVED DISTRIBUTIONS $20,150,836 These Approved Distributions are based on the following pro rata allocation established by the New Natrol Settlement Agreement and calculated by the Wind- Down Committee: 82.03% to New Natrol (up to $23.3 million, inclusive of funds already received), 13.38% to Mr. Khoudagoulian (up to $3.8 million, inclusive of funds already received), and 4.59% to the Plethico Professionals (up to $1.5 million, less the funds remitted to the U.S. Plethico Counsel). Sec. 505 Requests The Reorganized Debtors also sought a finding that their tax liabilities for the tax year ended December 31, 2014 have been discharged, pursuant to applicable law, including section 505(b)(2) of the Bankruptcy Code. Pursuant to section 505(b)(2), a debtor is discharged from its tax liability after a section 505 request is made if the governmental unit to which the 505 request was directed "does not notify the trustee, within 60 days after such request, that such return has been selected for examination." 11 U.S.C. Sec. 505(b)(2)(A)(i). With the exception of the states of Oklahoma and California, the Reorganized Debtors have not received any such notifications and the 60-day deadline for any taxing authority to select the 2014 Returns for examination has expired, and as noted, the Reorganized Debtors received correspondence from the IRS providing that their 2014 Federal Return had not been selected for examination. On Nov. 10, 2015, the Oklahoma Tax Commission notified the Reorganized Debtors that their Oklahoma state return had been selected for examination, thereby triggering the 180-day examination period prescribed by Section 505(b)(2)(A). However, on Nov. 19, 2015, the Oklahoma Tax Commission further notified the Reorganized Debtors that its examination of the Oklahoma 2014 State Return had been completed and there were no tax liabilities due and owing for 2014. On Dec. 18, 2015, the State of California Franchise Tax Board informed the Reorganized Debtors that their 2014 State Return had been selected for examination, pursuant to Section 505(b). The Reorganized Debtors' 2014 State Return for California reflects that a refund in excess of $1.2 million (after applying credits to satisfy the Reorganized Debtors' 2015 tax liability) is owed to the Reorganized Debtors and that no amounts are or could be due and owing by the Reorganized Debtors for 2014. For this reason, the Reorganized Debtors submit that is it not necessary to reserve any funds in the Tax Liability Reserve on account of the examination of the 2014 State Return by the California Franchise Tax Board. With the exception of California, any additional 2014 federal and state tax liabilities have been discharged by operation of Section 505(b)(2) of the Bankruptcy Code, the Debtors told the Court. A full-text copy of the Motion is available for free at: http://bankrupt.com/misc/Natrol_1386_M_Plan_Imp.pdf * * * As set forth in the Motion, payment of the Approved Distributions was contingent upon the dismissal of the Hungarian Proceedings with respect to Plethico Hungary. On Jan. 25, 2016, the Hungarian Court entered an order dismissing the Hungarian Proceedings. On Jan. 27, 2016, the Reorganized Debtors filed a Notice of Dismissal of Hungarian Proceedings with the Court. As set forth in Motion, whether the Plethico Professional Gross Up Fund payments were to be made to the Plethico Professionals remained unresolved as of the date of the filing of the Motion, and was to be the subject of an agreement among the parties or a subsequent order of this Court. Subsequent to the filing of the Motion, New Natrol, the Reorganized Debtors, and Miller, Canfield, Paddock & Stone, P.L.C (the lead Plethico Professional) came to an agreement with respect to this issue and the Revised Proposed Order reflects that the Plethico Professional Gross Up Fund payments shall be made in the amounts set forth therein. The Reorganized Debtors received no formal objections to the Motion prior to the Objection Deadline. The Reorganized Debtors received informal comments from the California Franchise Tax Board (the "FTB") which comments have been incorporated into a revised proposed form of order (the "Revised Proposed Order") submitted the Court for approval. A copy of the Jan. 28 Order, which was based from the Revised Proposed Order submitted by the Reorganized Debtors, is available for free at: http://bankrupt.com/misc/Natrol_1395_Plan_Imp_Ord.pdf About Natrol, Inc. Headquartered in Chatsworth, Calif., Natrol, Inc., sold herbs and botanicals, multivitamins, specialty and sports nutrition supplements made to support health and wellness throughout all ages and stages of life. Natrol, Inc., was a wholly owned subsidiary of Plethico Pharmaceuticals Limited (BSE: 532739. BO: PLETHICO). Natrol, Inc., and its six affiliates sought bankruptcy protection (Bankr. D. Del. Case No. 14-11446) on June 11, 2014. The case is assigned to Judge Brendan Linehan Shannon. The Debtors are represented by Robert A. Klyman, Esq., and Samuel A. Newman, Esq., at Gibson, Dunn & Crutcher LLP, in Los Angeles, California; and Michael R. Nestor, Esq., Maris J. Kandestin, Esq., and Ian J. Bambrick, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. The Debtors' Claims and Noticing Agent is Epiq Systems INC. The Debtors requested that the Court approve the employment of (i) Jeffrey C. Perea of the firm Conway MacKenzie Management Services, LLC as chief financial officer and for CMS to provide temporary employees to assist Mr. Perea in carrying out his duties; (ii) Stephen P. Milner of the firm Squar, Milner, Peterson, Miranda & Williamson LLP as chief restructuring officer and for CMS to provide temporary employees to assist Mr. Milner in carrying out his duties; (iv) BDO USA, LLP as auditor; (v) TaxGroup Partners as tax services provider. The Official Committee of Unsecured Creditors tapped Otterbourg P.C. as lead counsel; Pepper Hamilton LLP as Delaware counsel; and CMAG as financial advisors. * * * On Nov. 10, 2014, the Debtors held an auction for the sale of the assets, and Aurobindo Pharma USA Inc. emerged as the successful bidder. The Court approved the sale and the sale closed on Dec. 4, 2014. The Debtors changed their names to Leaf123, Inc., following the sale. The Debtors filed a Chapter 11 plan of liquidation, pursuant to which tax refunds and credits, all shares of capital stock or other equity interests in Natrol UK, all avoidance actions not otherwise purchased by the Buyer under the Purchase Agreement, the proceeds from prepetition litigation, the proceeds from the sale transaction, and certain other assets are being pooled and distributed to persons or entities holding allowed claims in accordance with the priorities of the Bankruptcy Code. On May 22, 2015, the U.S. Bankruptcy Court for the District of Delaware entered an order confirming the Liquidating Plan dated as of May 22, 2015. Leaf123, Inc., formerly known as Natrol, Inc., et al., notified that on June 17, 2015, the effective date occurred with respect to their Second Amended Joint Liquidating Plan. NEW GOLD: S&P Lowers CCR to 'B+' on Weak Cash Flow Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Toronto-based gold producer New Gold Inc. to 'B+' from 'BB-'. The outlook is stable. At the same time, Standard & Poor's revised its anchor on the company to 'b' from 'b+', following its revision of New Gold's financial risk profile to highly leveraged from aggressive. S&P continues to view the company's liquidity as strong, which also contributes to the one-notch uplift to the anchor score and 'B+' corporate credit rating. Standard & Poor's also lowered its issue-level rating on the company's senior unsecured notes to 'B+' from 'BB-'. The '3' recovery rating on the notes is unchanged and corresponds with meaningful (50%-70%, at the higher end of the range) recovery in a simulated default scenario. "The downgrade primarily reflects our expectation that the company will generate lower-than-expected earnings and cash flow over the next two years, resulting in weaker core credit ratios," said Standard & Poor's credit analyst Jarrett Bilous. The change in S&P's estimates mainly reflects the downward revision to its gold and copper price assumption for 2016 and 2017, and updated cost guidance provided by the company. As a result, S&P now expects the company to generate a weighted-average, adjusted debt-to-EBITDA ratio of close to 5x and funds from operations (FFO)-to-debt of about 12% over the next two years, which breach S&P's previous downside rating triggers. S&P revised its financial risk assessment on New Gold to highly leveraged from aggressive based on S&P's estimate of the company's prospective core credit ratios, as well as the heightened risk associated with continuing free cash flow deficits. S&P has not changed its weak business risk assessment, which results in a 'b/b-' anchor score. S&P selects the higher of the two scores based on the comparative strength of the company's core credit ratios. The stable outlook on New Gold reflects Standard & Poor's view that the company will generate adjusted debt-to-EBITDA of close to 5x in 2016. In addition, S&P expects the company to maintain strong liquidity over this period despite expected free operating cash flow deficits notably related to high discretionary capital expenditures for its Rainy River project. S&P could lower the rating if it revises New Gold's liquidity assessment to adequate, which, in S&P's view, could result from higher-than-expected free cash flow deficits over the next 12 months. S&P would also consider a downgrade if the company's adjusted debt-to-EBITDA ratio increases well beyond 6x this year, with reduced prospects for deleveraging in line with S&P's expectations beyond 2016. S&P could consider a positive rating action if it expects New Gold to generate an adjusted debt-to-EBITDA ratio below 4x and adjusted FFO-to-debt above 20% on a sustainable basis, while maintaining strong liquidity. In this scenario, S&P would expect to increase its price assumptions for gold and copper and lower its cash cost assumptions, with no change in the company's estimated gold output. NEWBURY COMMON: 9 Additional Affiliates' Case Summary ----------------------------------------------------- Affiliates of Newbury Common Associates, LLC filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Newbury Common Member Associates, LLC 16-10320 1 Atlantic St. Stamford, CT 06901 Century Plaza Investor Associates, LLC 16-10321 Seaboard Hotel Associates, LLC 16-10322 Seaboard Hotel LTS Associates, LLC 16-10323 Park Square West Associates, LLC 16-10324 Clocktower Close Associates, LLC 16-10325 One Atlantic Investor Associates, LLC 16-10326 220 Elm Street I, LLC 16-10327 300 Main Street Associates, LLC 16-10328 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court District of Delaware (Delaware) Debtors' Counsel: Robert S. Brady, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax: 302-571-1253 Email: rbrady@ycst.com Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The petition was signed by Marc Beilinson, chief restructuring officer. Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SSC, Inc. Trade Debts $250,518 P.O. Box 135 Battleboro, VT 05302 SPAGS NE LLC dba Trade Debts $147,389 Lionheart Maintenance Tri-Star Services Inc. Trade Debts $133,790 Berkowitz, Trager & Professional $126,633 Trager, LLC services Propark Inc. Trade Debts $94,008 IMCS, LLC Professional $93,000 services CBRE, Inc. Professional $56,231 services Diserio, Martin, O'Connor Professional $36,730 & Castiglioni LLP services Jonathan Nehmer + Assoc., Inc. Professional $30,931 services Drivers Unlimited Inc. Trade Debts $29,954 City of Stamford Taxes $29,895 Stamford WPCA Trade Debts $29,733 Kencal Maintenance Corporation Trade Debts $27,961 Kravet Realty, LLC Professional $26,126 services Karps True Value Hardware Trade Debts $23,125 Redniss & Mead, Inc. Professional $22,353 services ASD Construction, LLC Trade Debts $22,328 My Slidelines, LLC Trade Debts $20,757 Carpet City Trade Debts $20,707 Heller And Johnsen Professional $19,709 services One Solution Services, LLC Trade Debts $19,091 Great Northern Elevator Co. LLC Trade Debts $16,803 City Carting & Recycling Trade Debts $16,391 American Furniture Rental Trade Debts $11,626 Connecticut Materials Trade Debts $11,224 Testing Lab, Inc. Sky View Buildings, LLC Trade Vendors $11,176 Pelliccione & Assoc., LLC Professional $9,985 services Grosso Custom Builders Trade Vendors $9,622 KM Communications Services Trade Vendors $9,267 Carmody Torrance Sandak Professional $9,033 services NEWSTAR FINANCIAL: S&P Revises Outlook to Neg. & Affirms 'BB-' ICR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised the outlook on NewStar Financial Inc. to negative from stable. At the same time, S&P affirmed its 'BB-' long-term issuer credit rating on NewStar. "The outlook revision reflects NewStar's rising leverage relative to our tolerance for the rating," said Standard & Poor's credit analyst Matthew Carroll. Debt to adjusted total equity increased to 4.5x as of Sept. 30, 2015, from 3.2x as of Dec. 31, 2014, and S&P believes NewStar's leverage may further increase in 2016. NewStar's strategic relationship with GSO Capital has benefited the company's business position, in our view, by expanding its lending opportunities, which contributed to a 36% increase in NewStar's loans and leases, net (including loans held-for-sale) to $3.4 billion as of Sept. 30, 2015, from $2.5 billion as of Dec. 31, 2014. However, leverage has increased with the growth in assets. The negative outlook reflects NewStar's rising leverage, as measured by debt to adjusted total equity. S&P expects the company's strategic relationship with GSO and Franklin Square will continue to generate lending opportunities for NewStar, and the company will continue to make predominantly senior loans. S&P expects earnings to gradually increase, as a result of growth in its loan portfolio, assets under management, and higher balance sheet leverage. S&P could lower the rating if leverage rises above about 5x. S&P could also lower the rating if it believes that NewStar's rapid growth is leading to deterioration in its credit standards, or if more challenging market conditions lead to a weaker funding and liquidity profile, in S&P's view. S&P could revise the outlook to stable if NewStar maintains leverage below 4.5x while maintaining its lending and underwriting standards with good credit performance and improving profitability. NNN MET CENTER: Court OKs Glast Phillips as Transactional Counsel ----------------------------------------------------------------- NNN Met Center 15 39, LLC and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Northern District of California to employ Kenneth R. Stein, Esq., of Glast, Phillips & Murray, P.C., as its special transactional counsel, effective as of the July 31, 2015 petition date. Glast Phillips was engaged under a July 24, 2015 letter agreement with the Debtors to assist them in organizing a new company, terminating the tenant-in-common (TIC) structure, closing the restructuring transaction, and negotiating and closing new financing for the project, all within the context of a contemplated court-approved Chapter 11 plan of reorganization. A limited amount of those services has been provided since the Petition Date. No retainer was required under Letter Agreement. Glast Phillips and Mr. Stein provided services to the Debtors prior to the Petition Date. Glast Phillips received $10,000 from the Debtors on July 29, 2015, which was applied to outstanding prepetition invoices of Glast Phillips, leaving a balance due of $82,343.57 as of the petition date, which counsel understands will be treated as a general unsecured claim in these cases. Glast Phillips will also be reimbursed for reasonable out-of-pocket expenses incurred. Kenneth R. Stein 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. Glast Phillips can be reached at: Kenneth R. Stein, Esq. GLAST, PHILLIPS & MURRAY, P.C. 14801 Quorum Drive, Suite 500 Dallas, TX 75254 Tel: (972) 419-7119 Fax: (972) 419-8329 E-mail: kstein@gpm-law.com About NNN Met Center 15 39 NNN Met Center 15 39 and 32 entities are each the owners of varying, undivided tenancy-in-common ("TIC") interests in a commercial real property commonly known as "Met Center 15", situated at 7301 Metro Center Dr., Austin, Texas. The property consists of a commercial building, containing 257,600 square feet of rentable area, on 26.83 acres of land. NN Met Center 15 39 and 32, et al., filed Chapter 11 bankruptcy petitions (Bankr. N.D. Cal. Lead Case No. 15-42359) on July 31, 2015. Alan Sparks, as manager and responsible individual, signed the petitions. NNN Met Center 15 39, LLC, disclosed total assets of $32,003,866 and total liabilities of $28,143,523 as of the Petition Date. Judge William J. Lafferty presides over the cases. The Debtors tapped The Law Offices of Darvy Mack Cohan as counsel, and Elkington Shepherd LLP as their local counsel. On Aug. 12, 2015, the Court entered an amended order approving the joint administration of the cases. The claims bar date expired on Oct. 30, 2015. NORTHERN BLIZZARD: Moody's Cuts Corporate Family Rating to B2 ------------------------------------------------------------- Moody's Investors Service downgraded Northern Blizzard Resources Inc.'s Corporate Family Rating (CFR) to B2 from B1, Probability of Default Rating to B2-PD from B1-PD and confirmed the senior unsecured notes rating at B3. The Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-2. The rating outlook is negative. This action resolves the review for downgrade that was initiated on January 21, 2016. "The downgrade reflects the decline in Northern Blizzard's cash flows expected in 2016 and 2017, which will result in weaker cash flow based leverage metrics," said Paresh Chari, Moody's Analyst. Downgrades: Issuer: Northern Blizzard Resources Inc. -- Probability of Default Rating, Downgraded to B2-PD from B1-PD -- Corporate Family Rating, Downgraded to B2 from B1 Outlook Actions: Issuer: Northern Blizzard Resources Inc. -- Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Northern Blizzard Resources Inc. -- Senior Unsecured Regular Bond/Debenture, Confirmed at B3(LGD5) Ratings Lowered: Issuer: Northern Blizzard Resources Inc. -- Speculative Grade Liquidity Rating to SGL-3 from SGL-2 RATINGS RATIONALE Northern Blizzard's B2 Corporate Family Rating (CFR) reflects the high leverage (debt to EBITDA 5x; retained cash flow/debt of 12%) expected in 2017, which will still benefit somewhat from oil hedges. The rating also reflects Northern Blizzard's concentration in heavy oil coming from mature fields in western Saskatchewan that mostly require enhanced oil recovery (EOR) in order to increase production. The EOR developments include water flooding, polymer flooding and thermal projects that require a significant amount of development capital and entail higher operating expenses than conventional primary production. Moody's expects production will likely decline by roughly 10% in 2016 and 2017. The rating is also supported by Northern Blizzard's adequate liquidity position. Northern Blizzard 's SGL-3 rating reflects adequate liquidity through 2016. As of September 30, 2015 Northern Blizzard had minimal cash and C$463 million available (after LCs) under its C$475 million borrowing base revolving credit facility, which will term out in July 2016 and mature one year later. Moody's expects positive free cash flow of about C$60 million in 2016. Moody's expects Northern Blizzard will be well within compliance with its two financial covenants through this period. There are no other debt maturities in the next two years. Alternate liquidity is limited given that substantially all of the company's assets are pledged under the revolver. In accordance with Moody's Loss Given Default (LGD) Methodology, the senior unsecured notes are rated B3, one notch below the CFR, reflecting the priority ranking of the C$475 million borrowing base revolving credit facility in the capital structure. The negative outlook reflects Moody's expectation that Northern Blizzard's EBITDA and leverage will continue to worsen beyond 2017 without an improvement in realized prices. The rating could be upgraded to B1 if retained cash flow to debt was likely to remain above 20% and if EBITDA to interest was above 4x. The rating could be downgraded to B3 if retained cash flow to debt was likely to fall below 10%, EBITDA to interest was likely to decline towards 2x or if liquidity worsened. Northern Blizzard is a Calgary, Alberta-based exploration and production company that produces roughly 20,000 boe/day of which about 90% is heavy oil. OAKS OF PRAIRIE: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Oaks of Prairie Point Condominium c/o Howes Property Management 129 E. Calhoun Street Woodstock, IL 60098 Case No.: 16-80238 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Northern District of Illinois (Rockford) Judge: Hon. Thomas M. Lynch Debtor's Counsel: Thomas W. Goedert, Esq. CRANE, HEYMAN, SIMON, WELCH & CLAR 135 S. LaSalle St., Suite 3705 Chicago, IL 60603 Tel: 312-641-6777 Fax: 312-641-7114 Email: tgoedert@craneheyman.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Donna Smith, property manager. A list of the Debtor's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb16-80238.pdf OSAGE EXPLORATION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Osage Exploration and Development, Inc. 2445 Fifth Avenue, Suite 310 San Diego, CA 92101 Case No.: 16-10308 Type of Business: Exploration and production company with interests in oil and gas wells Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Hon. Sarah A. Hall Debtor's Counsel: Mark A. Craige, Esq. CROWE & DUNLEVY 500 Kennedy Building 321 S. Boston Tulsa, OK 74103 Tel: (918) 592-9878 Fax: (918) 599-6318 Email: mark.craige@crowedunlevy.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Kim Bradford, president, CEO and Chairman. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AAA Fiberglass Repair LLC $91,083 APSS Inc. $78,828 Bull Directional $83,798 Drilling Specialits Ltd DRI Oilfield Services LLC $151,392 Elynx Technologies LLC $61,403 Flint Energy Services Inc. $206,310 Horizon Mud Company $88,168 Jackson Electrical Construction LLC $85,479 L. Jackson Construction Services $65,896 Lane's Motor Freight Lines Inc. $92,500 Manhattan Pipeline LLC $244,641 MidCentral Completion Services LLC $66,022 Mike Jordan Company, LLC $77,261 Multilift Wellbore Technology Ltd. $68,425 Peak Oilfield Services LLC $175,588 Propetro $338,764 PO Box 204464 Dallas, TX 75320-4464 Shebester-Bechtel, Inc. $177,655 Sundance Energy Inc. $1,784,691 13524 Railway Dr. Oklahoma City, OK 73114 The Commissioners of the Land $69,014 Office Vinson & Elkins LLP $65,041 OSAGE EXPLORATION: Files Voluntary Chapter 11 Bankruptcy Petition ----------------------------------------------------------------- Osage Exploration and Development, Inc., an independent exploration and production company focused on the Horizontal Mississippian and Woodford plays in Oklahoma, disclosed that on Tuesday, February 3, 2016, it filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of Oklahoma in Case No. 16-10308-SAH. About Osage Exploration Based in San Diego, California with production offices in Oklahoma City, Oklahoma, and executive offices in Bogota, Colombia, Osage Exploration and Development, Inc. (OTC BB: OEDV) -- http://www.osageexploration.com/-- is an independent exploration and production company with interests in oil and gas wells and prospects in the US and Colombia. The Company incurred a net loss of $34.5 million on $12.7 million of total operating revenues for the year ended Dec. 31, 2014, compared with net income of $3.85 million on $8.02 million of total operating revenues for the year ended Dec. 31, 2013. Mayer Hoffman McCann P.C., in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has incurred recurring losses from operations and, as of Dec. 31, 2014, has current liabilities significantly in excess of current assets. These conditions, among others, raise substantial doubt about its ability to continue as a going concern, the auditors said. As of June 30, 2015, the Company had $25.07 million in total assets, $39.72 million in total liabilities and a stockholders' deficit of $14.64 million. Bankruptcy Warning "The Company's operating plans require additional funds which may take the form of debt or equity financings. The Company's ability to continue as a going concern is dependent upon achieving profitable operations and obtaining additional financing. Our cash flows and results of operations depend to a great extent on the prevailing prices for oil and gas. Prolonged or substantial declines in oil / and/or gas prices may materially and adversely affect our liquidity, the amount of cash flows we have available for our capital expenditures and other operating expenses, our ability to access credit and capital markets and our results of operations. There is no assurance additional funds will be available on acceptable terms or at all. In the event the Company is unable to continue as a going concern, management may elect or be required to seek protection from creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy," the Company said in its quarterly report for the period ended June 30, 2015. PARAMOUNT RESOURCES: Moody's Cuts Corporate Family Rating to Caa2 ----------------------------------------------------------------- Moody's Investors Service downgraded Paramount Resources Ltd.'s Corporate Family Rating (CFR) to Caa2 from B1, Probability of Default Rating to Caa2-PD from B1-PD and senior unsecured notes rating to Caa3 from B3. The Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. The rating outlook is negative. This action resolves the review for downgrade that was initiated on January 21, 2016. "The downgrade reflects the material decline in Paramount's cash flow expected in 2016 and 2017, which will result in weak leverage and coverage metrics," said Paresh Chari, Moody's Analyst. "We also expect that Paramount will likely see a reduction in its borrowing base in 2016, potentially leaving it with inadequate liquidity." Downgrades: Issuer: Paramount Resources Ltd. -- Probability of Default Rating, Downgraded to Caa2-PD from B1- PD -- Corporate Family Rating, Downgraded to Caa2 from B1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3(LGD5) from B3(LGD5) -- Senior Unsecured Shelf, Downgraded to (P)Caa3 from (P)B3 Ratings Lowered: -- Speculative Grade Liquidity Rating, Lowered to SGL-4 from SGL- 3 Outlook Actions: Issuer: Paramount Resources Ltd. -- Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE Paramount's Caa2 Corporate Family Rating (CFR) primarily reflects weak liquidity (SGL-4), including a likely borrowing base short-fall in spring 2016, high expected leverage (2017 debt/EBITDA around 12x), and weak interest coverage (2017 EBITDA/interest near 1.2x). Paramount's concentration in the Montney play in western Alberta exposed the company to numerous midstream outages in 2015 which prevented the company from reaching production of 60,000 boe/d in the second half of 2015. Moody's expects production to be below 47,500 boe/d in 2016, down significantly from Moody's prior expectations. The SGL-4 Speculative Grade Liquidity Rating reflects Paramount's weak liquidity through 2016. At September 30, 2015, Paramount had C$21 million of cash and about C$140 million available under Tranche A of the borrowing base credit facility that terms out in May 2016 and matures one year later. Moody's expectation is that Paramount will not have enough revolver availability to fund expected negative free cash flow of C$130 million in 2016, factoring in an expected reduction in the company's borrowing base which will be re-determined in spring 2016. Paramount has some flexibility to raise funds from midstream sales and/or by selling shares from its equity investments (January 2016 market value of about C$90 million) or other non-core assets. Paramount has no maintenance financial covenants and no upcoming maturities until December 2019. In accordance with Moody's Loss Given Default (LGD) Methodology, the notching of the senior unsecured notes at Caa3, one notch below the Caa2 CFR, reflects priority ranking debt in the form of the C$900 million secured revolving credit facility relative to the unsecured notes. The negative outlook reflects Moody's view that Paramount's liquidity, leverage and interest coverage will deteriorate in 2017. The rating could be upgraded to Caa1 if liquidity becomes adequate, which is possible if the midstream assets are sold, and if EBITDA to interest was likely to rise above 1.5x. The rating could be downgraded to Caa3 if liquidity weakens further. Paramount is a Calgary, Alberta-based exploration and production (E&P) company focused in the Montney formation in Alberta, with production of about 47,500 boe per day net of royalties (barrel of oil equivalent) (50% natural gas and 50% liquids). PATERSON CHARTER: S&P Affirms BB+ Rating on Bonds, Outlook Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to negative from stable and affirmed its 'BB+' rating on Paterson Charter School for Science & Technology (PCSST), charter school revenue bonds issued by the New Jersey Economic Development Authority. "The negative outlook reflects our view of the decline in liquidity as a result of the one-time spend on technology and capital investments, which, although expected, was substantial, and a violation of the 1.1x coverage covenant based on audited fiscal 2015 governmental fund statements, which was not an event of default but required the retention of a management consultant," said Standard & Poor's credit analyst Stephanie Wang. The weaknesses are partially offset by S&P's view of strong enrollment and demand coupled with strong academic performance and adequate coverage for the rating based on our calculations using entity wide financials. The school also expressed possible expansion plans for the high school, which may involve leasing additional space or issuing additional debt, although nothing has been finalized. The details of the expansion are not part of this analysis. The rating on the bonds is solely based on Paterson Charter School's credit quality after determining the bankruptcy remoteness of Railway Ave Properties LLC based on a true sale. Railway Avenue Properties is a wholly owned subsidiary of Apple Educational Services (Apple), PCSST's 501(c)(3) educational service provider. The negative outlook reflects S&P's view of the weakened liquidity levels, which are no longer commensurate with rating medians and a violation of the coverage covenant, which required the retention of a management consultant. A negative rating action is possible should the school continue to violate covenants with no improvement plan, cash levels decline further from current levels, and operations deteriorate as a result of declining enrollment or poor expense management. The potential expansion of the high school and addition of debt without commensurate growth in the financials would also be viewed negatively. A revision to stable is possible should the school be in compliance with all financial covenants, cash improves from current levels, coverage remains consistent with the rating medians, and enrollment and demand remain strong. PEREGRINE MIDSTREAM: Files Voluntary Ch.11 Bankruptcy Petition -------------------------------------------------------------- Peregrine Midstream Partners LLC, and its affiliates Peregrine Rocky Mountains LLC, Ryckman Creek Resources Holding Company LLC, and Ryckman Creek Resources LLC (the "Companies") filed for voluntary bankruptcy under chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware (the "Court") on February 2, 2016. The Companies disclosed that on February 3, 2016 they completed a successful "First Day Hearing" before the Court, allowing them to access interim debtor-in-possession financing. The Court provided interim approval for the Companies' debtor-in-possession bridge facility, providing the Companies with adequate liquidity to continue operations during the chapter 11 process, and continue ongoing discussions with their lenders to restructure the Companies' capital structure. The Companies' operations at the Ryckman Creek Natural Gas Storage Facility in Uinta County, Wyoming continue, and the facility will continue to operate during the chapter 11 process. Rob Foss, Chief Executive Officer, said, "Filing for chapter 11 was a difficult decision for the company and our stakeholders; however, given the significant liquidity challenges facing the company we had no alternative available. [Tues]day's hearing and approval of our debtor-in-possession financing, on an interim basis, will provide us the ability to finalize discussions with our lenders on a restructuring plan that maximizes value for all constituents. We appreciate the continuing support of our vendors, customers, and employees as we work through the restructuring process. Throughout this process we will continue to serve our current and future customers through our strategically located storage facility in Wyoming." About Ryckman Ryckman Creek Resources, LLC, Ryckman Creek Resources Holdings LLC, Peregrine Rocky Mountains LLC and Peregrine Midstream Partners LLC filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10292 to 16-10295) on Feb. 2, 2016. The petitions were signed by Robert Foss as chief executive officer. Kevin J. Carey has been assigned the case. The Debtors have engaged Skadden, Arps, Slate, Meagher & Flom LLP as counsel, AP Services, LLC as management provider, Evercore Group LLC as investment banker, and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors estimated both assets and liabilities in the range of $100 million to $500 million. As of the Petition Date, Ryckman had approximately $333 million of prepetition bank debt. PREMIER BANK: Atty Pleads Not Guilty to Embezzlement as Trustee --------------------------------------------------------------- Jacob Fischler at Bankruptcy Law360 reported that a suspended Florida lawyer indicted on federal embezzlement charges has pled not guilty to stealing funds from Premier Bank Holding Co.'s estate while serving as the Debtor's Chapter 7 trustee. In a four-minute arraignment before U.S. Magistrate Judge Monte C. Richardson on Jan. 6, 2016, attorney William Reid Penuel pled not guilty to one count of embezzlement by a trustee and one count of making a false statement, according to court records. Judge Richardson set a Feb. 2 deadline for discovery motions. PRODUCTION RESOURCE: S&P Lowers CCR to 'CCC-', Outlook Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on New York-based Production Resource Group Inc. (PRG) to 'CCC-' from 'CCC+'. The outlook remains negative. At the same time, S&P lowered its issue-level rating on the company's $250 million asset-based lending (ABL) revolving credit facility due April 2016 to 'CCC+' from 'B'. The recovery rating remains at '1', indicating S&P's expectation for very high recovery (90%-100%) of principal in the event of a payment default. S&P also lowered its rating on PRG's $150 million second-lien term loan due 2019 to 'CCC-' from 'CCC+'. The recovery rating remains at '4', indicating S&P's expectation for average recovery (30%-50%; upper half of the range) in the event of a payment default. In addition, S&P lowered its issue-level rating on the company's $400 million 8.875% senior unsecured notes due 2019 to 'CC' from 'CCC-'. The recovery rating remains '6', indicating S&P's expectation for negligible recovery (0%-10%) of principal in the event of a payment default. "The downgrades reflect the risk that PRG may not be able to refinance its ABL due April 15, 2016," said Standard & Poor's credit analyst Dylan Singh. "The company does not have sufficient liquidity, in our view, to repay the outstanding balance on its $250 million ABL revolver due April 15, 2016 ($184 million outstanding as Sept. 30, 2015)." The negative rating outlook reflects S&P's view that PRG could face a default in April 2016 when its ABL revolver matures. S&P believes the company will not have sufficient liquidity to repay the outstanding balance if the revolver's maturity date is not extended. S&P could lower its corporate credit rating on PRG if the company is unable to extend the maturity date of its ABL revolver due April 2016. S&P could revise the outlook to stable or raise the rating if PRG is able to extend or refinance its ABL revolver before it matures in April 2016. QUANTUM CORP: Eric Singer Reports 9.9% Stake as of Jan. 29 ---------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, Eric Singer disclosed that as of Jan. 29, 2016, he beneficially owns 26,241,996 shares of common stock of Quantum Corporation representing 9.9 percent of the shares outstanding. The aggregate percentage of Shares reported by the Reporting Person is based upon 263,919,475 Shares outstanding, which is the total number of Shares outstanding as of Oct. 30, 2015, as reported in the Issuer's quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on Nov. 6, 2015. Mr. Singer is the managing member of VIEX GP and VIEX Capital. A copy of the regulatory filing is available for free at: http://is.gd/x5XZJO About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. Quantum reported net income of $16.7 million on $553 million of total revenue for the year ended March 31, 2015, compared to a net loss of $21.5 million on $553 million of total revenue for the year ended March 31, 2014. As of Sept. 30, 2015, the Company had $305 million in total assets, $384 million in total liabilities and a $78.5 million total stockholders' deficit. QUANTUM FUEL: $471,410 Interest Payment to Samsung Heavy Deferred ----------------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc.'s wholly-owned subsidiary, Schneider Power Inc. and its indirect wholly-owned subsidiary, Zephyr Farms Limited entered into a Second Amendment to Master Amendment Agreement with Samsung Heavy Industries Co. Ltd. pursuant to which the parties agreed to defer until July 31, 2016, approximately $471,410 of interest owed by Zephyr to Samsung under the Master Amendment Agreement, as amended, that was originally scheduled to be paid on Jan. 31, 2016. A copy of the Second Amendment to Master Amendment Agreement is available for free at http://is.gd/ZGDFTk About Quantum Fuel Lake Forest, Cal.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. Quantum Fuel reported a net loss of $14.9 million in 2014, a net loss attributable to stockholders of $23.0 million in 2013, a net loss attributable to stockholders of $30.9 million in 2012 and a net loss attributable to common stockholders of $38.5 million in 2011. As of Sept. 30, 2015, the Company had $67.5 million in total assets, $45.5 million in total liabilities and $22.0 million in total stockholders' equity. RAIN CII: Moody's Cuts Corporate Family Rating to 'B3' ------------------------------------------------------ Moody's Investors Service downgraded the ratings of Rain CII Carbon LLC, including the corporate family rating (CFR) to B3 from B2, probability of default rating (PDR) to B3-PD from B2-PD, and senior secured ratings to B3 from B2. The outlook is negative. Downgrades: Issuer: Rain CII Carbon LLC -- Probability of Default Rating, Downgraded to B3-PD from B2-PD -- Corporate Family Rating, Downgraded to B3 from B2 -- Backed Senior Secured Regular Bond/Debenture, Downgraded to B3 (LGD3) from B2 (LGD3) -- Issuer: Rain Escrow Corporation -- Backed Senior Secured Regular Bond/Debenture, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: Rain CII Carbon LLC -- Outlook, Changed To Negative From Stable RATINGS RATIONALE The downgrade reflects the company's persistently weak debt protection metrics, with Debt/ EBITDA, as adjusted by Moody's, tracking at levels that exceed those normally appropriate for a B rating, following the increase in debt to fund the early 2013 acquisition of Ruetgers. Due to the challenging industry conditions, we expect no material improvement over the next 12-18 months. A significant proportion of revenue is derived from sales of CPC and CTP to the aluminum industry, which continues to face headwinds and will continue to pressure performance, even though the company has been able to maintain the spread between the CPC selling prices and input costs by relaxing quality specifications. We acknowledge that the company's new coal tar distillation plant developed by a joint venture with its Russian partner PAO Severstal (Ba1, stable), commenced operations in December 2015, and will increase the company's coal tar distillation capacity going forward. We expect that improved performance at Ruetgers and increased geographic reach will help offset the continued pressure on the company's domestic CPC and CTP sales. We believe that the company will maintain adequate liquidity over the next four quarters, supported by roughly neutral free cash flows and its cash position. Liquidity is further enhanced by a $100 million asset-based revolver (ABL) that expires in 2020. We expect the company to maintain sufficient availability under the ABL over the next four quarters. The negative outlook reflects our expectation that the company's leverage will continue to be excessive for the rating category over the next 12-18 months. The ratings could experience downward pressure if the fundamentals of its business were to further dramatically deteriorate or key suppliers or off-takers were to move their business or curtail operations. In addition, the rating could be negatively impacted if leverage, as measured by the debt/EBITDA ratio, continues to be sustained around current levels or if liquidity deteriorates. Given the relatively modest size of the company, its exposure to commodity-like products, dependency on the aluminum industry as an end market, and weak performance, upward rating movement is unlikely over the next 12 to 18 months. However, the rating or outlook could be favorably impacted should the company show sustained improvement in operating performance. Specifically, the ability to sustain leverage (as measured by debt/EBITDA) of less than 5.0 times could lead to a positive rating action. Rain CII Carbon LLC (RCC) is a wholly owned subsidiary of Rain Carbon Holdings LLC which is an indirect wholly owned subsidiary of Rain Industries Limited (RIL), an Indian domiciled company. RCC and its sister subsidiary Rain CII Carbon (Vizag) Limited (RCCVL), an Indian domiciled calcining company, are among the top calciners globally. RCC sells calcined petroleum coke (CPC) for two principal end uses: the production of aluminum and the production of titanium dioxide, although the aluminum industry remains the company's most significant end market. RCC also sells steam and electricity from waste heat generated during the calcining process. Through its Ruetgers N.V. (Ruetgers) subsidiary, the company also engages in coal tar distilling and the production of coal tar pitch (CTP), along with co-products such as naphthalene oil, aromatic oils and other carbon chemicals. For the twelve months ending September 30, 2015, RCC generated approximately $1.3 billion of revenues. RCS CAPITAL: Files Joint Plan of Reorganization ----------------------------------------------- RCS Capital Corporation, et. al., filed with the U.S. Bankruptcy Court for the District of Delaware their Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. Under the Plan, claims against the Debtors are classified into 10 categories. Only three classes are entitled to vote, namely: (1) First Lien Claims, (2) Second Lien Claims, and (3) General Unsecured Claims. The First Lien Claims will be Allowed in the aggregate amount of $556 million. On the Effective Date, (i) in exchange for and in full satisfaction, settlement, release, and discharge of its pro rata share of $50 million of the aggregate amount of Allowed First Lien Claims, each holder of an Allowed First Lien Claim will receive its Pro Rata Share of 38.75% of the Reorganized Holdings Equity Interests, and (ii) in exchange for and in full satisfaction, settlement, release, and discharge of its Pro Rata share of $500 million of the aggregate amount of Allowed First Lien Claims, each holder of an Allowed First Lien Claim will receive its Pro Rata share of the New Second Lien Facility. The Second Lien Claims will be Allowed in the aggregate amount of $153.2 million, with $50 million of those Allowed Claims to be treated as Secured Second Lien Claims and $103.2 million to be treated as Second Lien Deficiency Claims. On the Effective Date: (i) in exchange for and in full satisfaction, settlement, release, and discharge of its Pro Rata share of the aggregate Allowed Secured Second Lien Claims, each holder of an Allowed Second Lien Claim will receive its Pro Rata Share of 38.75% of the Reorganized Holdings Equity Interests; and (ii) in exchange for and in full satisfaction, settlement, release, and discharge of its Pro Rata share of the aggregate Allowed Second Lien Deficiency Claims, each holder of an Allowed Second Lien Claim will receive its Pro Rata share of Class Units, entitling the holders thereof to receive a share of the distributions of the Litigation Asset Proceeds allocated to the holders of Class B Units pursuant to a creditor trust distribution schedule. On the Effective Date, each holder of an Allowed General Unsecured Claim, in exchange for and in full satisfaction, settlement, release, and discharge of such Allowed General Unsecured Claim, will receive its Pro Rata share of Class A Units, entitling the holders thereof to receive its share of the Creditor Trust Assets allocated to holders of General Unsecured Claims in accordance with the Creditor Trust Distribution Schedule. All funds necessary to make distributions pursuant to the Plan will be obtained from the cash balances of the Debtors or the Reorganized Debtors on the Effective Date or such subsequent dates on which Distributions are payable and loan proceeds from an exit facility. On the Effective Date, 5.0% of the Reorganized Holdings Equity Interests will be reserved for distribution to members of management of Reorganized RCS in accordance with the Management Incentive Plan, the terms of which will be developed by the Board of Reorganized RCS. Any Reorganized Holdings Equity Interests provided to management in excess of the reserved 5.0% will dilute all holders of Reorganized Holdings Equity Interests pro rata. On the Effective Date, the term of each member of the current board of directors of each Debtor will automatically expire. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/14_RCSCAPITAL_Plan.pdf About RCS Capital New York-based RCS Capital Corporation -- http://www.rcscapital.com/-- is a full-service investment firm focused on the individual retail investor. With operating subsidiaries primarily focused on retail advice and until the completion of recently announced pending sales and divestiture of its wholesale distribution and investment banking, the company's business aims to capitalize, grow and maximize value for the investment programs its distributes and the independent advisors and clients it serves. RCS Capital Corporation and 11 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to 16-10234) on Jan. 31, 2016. The petitions were signed by David Orlofsky as chief restructuring officer. The Debtors disclosed total assets of $1.97 billion and total debts of $1.39 billion. The Debtors have engaged Dechert LLP as general counsel, Young Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper Management, LLC as restructuring advisor, Lazard Freres & Co. LLC as investment banker and Prime Clerk LLC as administrative advisor and claims and noticing agent. RCS CAPITAL: Obtains Commitment for $100-Mil. DIP Financing ----------------------------------------------------------- RCS Capital Corporation, et al., are asking permission from the Bankruptcy Court to obtain postpetition financing and use cash collateral. The Debtors had entered into a Superpriority Secured Debtor-in-Possession Term Loan Agreement among RCS Capital, as borrower, the guarantors party thereto from time to time, Barclays Bank PLC, as administrative agent, collateral agent, sole lead arranger, sole bookrunner and sole syndication agent, and the DIP Lenders. Certain prepetition lenders under the Prepetition Secured Facilities will act as lenders under the DIP Facility. "Based on the Debtors' financial analysis and projections, absent approval of the DIP Facility and the Debtors' access to Cash Collateral, to which the Prepetition Agents have consented, the Debtors will not have sufficient cash to, among other things, continue operating their businesses, maintain business relationships with their vendors and suppliers, pay employee wages in the ordinary course, make necessary capital expenditures and capital lease payments, or satisfy other working capital and operational needs, provide funding to each non-Debtor broker-dealer subsidiary of the Borrower as required to maintain sufficient capital and liquidity to permit continued operation of such broker-dealer subsidiary, including as may be required under applicable laws, regulations and supervisory requirements during the pendency of the Bankruptcy Cases," according to Robert F. Poppiti, Jr., Esq., Young Conaway Stargatt & Taylor, LLP. The DIP Facility provides an aggregate principal amount of $100 million, $25 million of which will be available following entry of an interim order by the Court. Borrowings under the Credit Facility bear a non-default interest of per annum rate equal to 8.00%, payable monthly in cash. In an event of default, the interest rate is per annum rate equal to 10.00%, payable on demand. The Debtors propose to grant liens and super-priority claims to the lenders providing the DIP Facility. About RCS Capital New York-based RCS Capital Corporation -- http://www.rcscapital.com/-- is a full-service investment firm focused on the individual retail investor. With operating subsidiaries primarily focused on retail advice and until the completion of recently announced pending sales and divestiture of its wholesale distribution and investment banking, the company's business aims to capitalize, grow and maximize value for the investment programs its distributes and the independent advisors and clients it serves. RCS Capital Corporation and 11 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to 16-10234) on Jan. 31, 2016. The petitions were signed by David Orlofsky as chief restructuring officer. The Debtors disclosed total assets of $1.97 billion and total debts of $1.39 billion. The Debtors have engaged Dechert LLP as general counsel, Young Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper Management, LLC as restructuring advisor, Lazard Freres & Co. LLC as investment banker and Prime Clerk LLC as administrative advisor and claims and noticing agent. RCS CAPITAL: Seeks Leave to File Plan Without Disclosure Statement ------------------------------------------------------------------ RCS Capital Corporation, et al., filed a motion with the Bankruptcy Court seeking leave to file their Joint Plan of Reorganization without concurrently filing an accompanying disclosure statement for the Plan. The Debtors intend to file the Disclosure Statement within five days of the Petition Date. The Debtors said they have been unable to complete the Disclosure Statement and all of its requisite parts and afford the Plan support parties a sufficient opportunity to review the document in its entirety prior to being filed. According to the Debtors, a substantial amount of their time were spent in negotiating and executing a restructuring support agreement, which is the lynchpin of the Company's consensual restructuring and provides the roadmap to the Debtors' successful emergence from Chapter 11. In addition, the Debtors have devoted significant efforts to, among other things, negotiating and documenting the Plan, the Debtors' proposed post-petition financing facility and the accompanying documents, carefully preparing their first-day pleadings to ensure a smooth transition into Chapter 11, and coordinating the logistics of filing these Chapter 11 cases. About RCS Capital New York-based RCS Capital Corporation -- http://www.rcscapital.com/-- is a full-service investment firm focused on the individual retail investor. With operating subsidiaries primarily focused on retail advice and until the completion of recently announced pending sales and divestiture of its wholesale distribution and investment banking, the company's business aims to capitalize, grow and maximize value for the investment programs its distributes and the independent advisors and clients it serves. RCS Capital Corporation and 11 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to 16-10234) on Jan. 31, 2016. The petitions were signed by David Orlofsky as chief restructuring officer. The Debtors disclosed total assets of $1.97 billion and total debts of $1.39 billion. The Debtors have engaged Dechert LLP as general counsel, Young Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper Management, LLC as restructuring advisor, Lazard Freres & Co. LLC as investment banker and Prime Clerk LLC as administrative advisor and claims and noticing agent. RCS CAPITAL: Seeks to Assume Restructuring Support Agreement ------------------------------------------------------------ RCS Capital Corporation, et al., seek permission from the U.S. Bankruptcy Court for the District of Delaware to assume a restructuring support agreement by and among the Debtors and certain of their key stakeholders, dated as of Jan. 29, 2016, to ensure that their restructuring will proceed as planned. The Restructuring is supported by overwhelming majorities of the lenders under the First Lien Facility and the Second Lien Facility, and by Luxor Capital Group L.P. and its affiliates, which hold the majority of the Debtors' unsecured debt. As part of this global compromise, Luxor agreed to support a Chapter 11 plan that provides significant recoveries to all unsecured creditors equally. The Debtors believe that, absent the global compromise embodied in the RSA, recoveries by unsecured creditors would fall significantly below what the agreed Restructuring contemplates. The Restructuring Support Agreement provides for, among other things, (a) an agreement among the Company and constituencies that include holders of approximately 92.5% in principal face amount in amount of the Company's first lien secured credit facility and approximately 87.6% in principle face amount of the Company's second lien secured credit facility and Luxor, which holds the majority of the unsecured claims against the Debtors, to support the proposed Restructuring, (b) $150 million of new-money financing through a new DIP Facility and Exit Facility provided by the Supporting Parties and other lenders under the First Lien Facility and Second Lien Facility to fund the administration of the Bankruptcy Cases and the operations of the Company, including, importantly, the non-debtor entities that make up the Retail Business, (c) an aggressive retention program for the Independent Financial Advisors that generate the Retail Business's sales to their customer base, (d) equitization of $50 million in face amount of the First Lien Facility and equitization of the Second Lien Facility in its entirety, (e) conversion of the Company's remaining obligations under the First Lien Facility into obligations under a New Second Lien Facility that will have a lower interest rate and longer tenor than the existing First Lien Facility, (f) the funding of a trust for the benefit of unsecured creditors with a combination of $12 million cash, warrants and certain claims and causes of action to be distributed ratably among the Debtors' unsecured Creditors, (g) the agreement to cap deficiency claims under the Second Lien Facility at $105 million and forgo distributions on account of such deficiency claims from the first $30 million of the Creditor Trust's litigation assets and all of its non-litigation assets and (h) the financial and operational restructuring of the Company into a going concern focused on its core Retail Business. The Restructuring Support Agreement also contemplates a carefully orchestrated implementation of the Restructuring that includes first, the filing of these pre-negotiated Bankruptcy Cases for RCS Capital Corporation and the other Debtors not directly involved in the operation of the Retail Business, second, the forbearance of the Supporting Parties and eventual release of obligations with respect to the Retail Business's Regulated Entities that guaranteed the Secured Facilities in order to insulate such Regulated Entities from Chapter 11 entirely and third, the filing of chapter 11 cases for the BD HoldCos only on a delayed, prepackaged basis impairing only the claims under the Secured Facilities. The Debtors believe that proposing this pre-arranged Restructuring with overwhelming support from major secured and unsecured creditor constituencies at the outset of the Bankruptcy Cases will allow the Company to minimize negative consequences to the Retail Business. Plan Treatment The Restructuring Support Agreement specifies the treatment of prepetition claims of the Debtors, including the following: a. In exchange for and in satisfaction of (i) $50 million of the First Lien Credit Agreement Claims, each existing First Lien Lender will receive its pro rata share of 38.75% of the New Common Stock outstanding on the Effective Date and (ii) the remainder of the First Lien Credit Agreement Claims, the existing First Lien Lenders will receive $500 million in principal amount of the New Second Lien Facility. b. In exchange for and in satisfaction of (i) $50 million of the Second Lien Credit Agreement Claims representing the secured portion of the Second Lien Credit Agreement Claims, each existing Second Lien Lender shall receive its pro rata share of 38.75% of the New Common Stock outstanding on the Effective Date. In exchange for and in satisfaction of their remaining allowed claims of $105 million, the Second Lien Lenders will receive their pro rata share of the treatment for general unsecured creditors below, provided, however, that the Second Lien Lenders will waive and will not receive on account of the unsecured portion of their claims any distributions from (a) the Creditor Assets, or (b) the first $30 million in proceeds received by the Creditor Trust from the prosecution of causes of action, which will be distributed in accordance with the Trust Waterfall. c. On the Effective Date of the Plan, the Debtors and Non-RCS Debtors will transfer to the Creditor Trust: (i) all Creditor Assets, consisting of $12 million in Cash and the New Warrants to purchase up to 10% of the new equity issued by the reorganized company on the terms set forth in the RSA, (ii) the Litigation Assets, consisting of certain claims and causes of action held by the RCS Debtors, Non-RCS Debtors, the Registered Investment Advisors or their respective estates transferred to the Creditor Trust; (iii) the right to prosecute the causes of action transferred to the Creditor Trust; and the right to prosecute, object to, settle, or otherwise resolve all general unsecured claims, which general unsecured claims shall be channeled to the creditor trust pursuant to the plan. d. Each holder of an Allowed General Unsecured Claim (including a Convertible Note Claim and Senior Unsecured Notes Claim), will receive in full and final satisfaction and in exchange for such claim, its pro rata share of the Unsecured Claims Distribution. e. The RCS Preferred Equity and RCS Common Equity will be canceled. Case Milestones The Restructuring Support Agreement sets forth a timeline by which the Debtors must reach certain case milestones, which reflect the desire of both the Debtors and the Supporting Parties to advance the Bankruptcy Cases as quickly and efficiently as practicable, given the nature of the Retail Business and the Company's heightened sensitivity to operating it while the Debtors are in chapter 11. Such milestones include the following: a. The Bankruptcy Court shall have entered an order approving the DIP Facility on an interim basis on or before the date that is two business days following the Petition Date, and on a final basis on or before the date that is thirty-five (35) days following the Petition Date; b. The RSA shall have been assumed by the debtors within 35 days of the Petition Date, pursuant to an order from the Bankruptcy Court in form and substance reasonably satisfactory to the Company, the Proponents and the First Lien Agent and the Second Lien Agent; c. The Bankruptcy Court shall have entered the Disclosure Statement Order, which shall be in form and substance reasonably satisfactory to the Company, the Participating First Lien Lenders, the Participating Second Lien Lenders and, to the extent set forth in the RSA, Luxor, on or before the date that is 40 days after the Petition Date; d. The Bankruptcy Court shall have entered the Confirmation Order, which shall be in form and substance reasonably satisfactory to the Company, the Participating First Lien Lenders, the Participating Second Lien Lenders and, to the extent set forth in the RSA, the First Lien Agent, Second Lien Agent and Luxor, on or before May 1, 2016; e. The Effective Date shall have occurred on or before May 15, 2016. About RCS Capital New York-based RCS Capital Corporation -- http://www.rcscapital.com/-- is a full-service investment firm focused on the individual retail investor. With operating subsidiaries primarily focused on retail advice and until the completion of recently announced pending sales and divestiture of its wholesale distribution and investment banking, the company's business aims to capitalize, grow and maximize value for the investment programs its distributes and the independent advisors and clients it serves. RCS Capital Corporation and 11 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10223 to 16-10234) on Jan. 31, 2016. The petitions were signed by David Orlofsky as chief restructuring officer. The Debtors disclosed total assets of $1.97 billion and total debts of $1.39 billion. The Debtors have engaged Dechert LLP as general counsel, Young Conaway Stargatt & Taylor, LLP as Delaware counsel, Zolfo Cooper Management, LLC as restructuring advisor, Lazard Freres & Co. LLC as investment banker and Prime Clerk LLC as administrative advisor and claims and noticing agent. RELATIVITY FASHION: Hires Houlihan Lokey as Financial Advisor ------------------------------------------------------------- Relativity Fashion, LLC and its debtor-affiliates seek authorization from the U.S. Bankruptcy Court for the Southern District of New York to employ Houlihan Lokey Capital, Inc. as financial advisor and investment banker, nunc pro tunc to November 25, 2015. The Debtors seek to retain Houlihan Lokey to provide, among other things, these financial advisory and investment banking services: (a) evaluate, monitor and report on the Debtors' financial condition and business; (b) assess and present the Debtors' financial projections and liquidity reporting requirements; (c) assist in the development of financial data and presentations to stakeholders and other counterparty due diligence; (d) evaluate the Debtors' debt capacity post-emergence; (e) prepare feasibility analyses for purposes of a plan of reorganization; (f) prepare valuation and liquidation analyses in conjunction with the disclosure statement and plan of reorganization; (g) prepare financial models of plan of reorganization structures and implied recoveries associated therewith; (h) assist with the development of substantive consolidation analyses; (i) assist in the development of claims pool analyses; (j) advise with respect to resolution of secured claims; (k) advise with respect to resolution of guild claims; (l) assist in ongoing and future negotiations with the Committee and other stakeholders; (m) evaluate the Company's contract cure exposure and participate in negotiations with contract counterparties; (n) identify and contact potential investors and arranging financing for the Debtors during and subsequent to the chapter 11 cases; (o) provide expert advice and testimony on financial and process matters relative to the matters set forth in the Engagement Agreement; (p) in conjunction with any Transaction: (i) assist the Debtors in structuring potential Transactions, (b) assist the Debtors in soliciting, coordinating and evaluating indications of interest and proposals regarding a Transaction; (c) assist the Debtors in negotiating financial aspects of any Transaction; (q) provide such other financial advisory and investment banking services as may be agreed upon by Houlihan Lokey and the Debtors; and (r) assist the Debtors, if necessary and required, in the preparation of a Private Placement Memorandum or similar document describing the Debtors. Subject to the Court's approval, Houlihan Lokey will be entitled, pursuant to the terms of the Engagement Agreement, to the following consideration for the Services: -- Retainer Fees. Houlihan Lokey will be paid a non-refundable cash fee of $200,000 for the first month, commencing on the Effective Date of the Engagement Agreement, and $200,000 for each month thereafter commencing one month from the Effective Date until the Engagement Agreement expires or is terminated. The first payment shall be made upon approval by the Bankruptcy Court of Houlihan Lokey's retention as described in the Engagement Agreement. The Retainer Fees are payable in advance without notice or invoice. -- Restructuring Transaction Fee. In addition to the other fees provided for in the Engagement Agreement, Houlihan Lokey will be paid a cash fee of $5 million, which shall be a cost of any Restructuring Transaction and funded upon the date of confirmation of a plan under the Bankruptcy Code or the closing of a sale of the Debtors' assets pursuant to an order of the Bankruptcy Court. -- Financing Transaction Fee. In addition to the other fees provided for in the Engagement Agreement, Houlihan Lokey will be paid a cash fee upon the first closing of a Financing Transaction equal to (i) 2% of the aggregate principal amount of all senior notes and bank debt raised or committed, (ii) 4% of the aggregate principal amount of all unsecured, non-senior and subordinated debt securities raised or committed, and (iii) 6% of the aggregate amount of all equity and equity-linked securities placed or committed. Houlihan Lokey will also be reimbursed for reasonable out-of-pocket expenses incurred. The Debtors agreed to provide Houlihan Lokey with the Post-Petition Retainer in the amount of $575,000, which is calculated as follows: (i) $150,000 consisting of the current balance due on the initial installment of Houlihan Lokey's Retainer Fees; (ii) $200,000 for the second installment of Retainer Fees due on December 25, 2015; (iii) $200,000 for the third installment of Retainer Fees due January 25, 2016; and (vi) $25,000.00 to cover pending unreimbursed out of pocket expenses incurred to date under the Engagement Agreement. Michael Krakovsky, director of Houlihan Lokey, 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. William K. Harrington, the U.S. Trustee for Region 2 of the Debtors filed an objection to the Debtors hiring of Houlihan Lokey as financial advisor and investment banker. CIT Bank, N.A., the administrative agent, and CIT Bank, N.A., successor-in-interest to OneWest Bank N.A. also filed an objection to Houlihan Lokey's employment. The United States Trustee objects to the retention of Houlihan as the Debtors' investment banker and financial advisor because the Debtors have not demonstrated that it is a "disinterested person" within the meaning of the Bankruptcy Code, as is shown below. There appears to be a shifting of Mr. Kavanaugh's personal obligations to compensate Houlihan to the Debtors. Houlihan Lokey can be reached at: Michael Krakovsky HOULIHAN LOKEY CAPITAL, INC. 10250 Constellation Blvd., 5th Floor Los Angeles, CA 90067 Tel: (310) 553-8871 Fax: (310) 553-2173 The U.S. Trustee is represented by: Serene K. Nakano, Esq. U.S. Federal Office Building 201 Varick St., Room 1006 New York, NY 10014 Tel: (212) 510-0500 CIT Bank is represented by: Glenn E. Siegel, Esq. MORGAN, LEWIS & BOCKIUS, LLP 101 Park Avenue New York, NY 10178-0600 Tel: (212) 309-6780 Fax: (212) 309-6001 RETROPHIN INC: Judge Says Shkreli Emails to Atty. Not Privileged ---------------------------------------------------------------- Kat Greene at Bankruptcy Law360 reported that a New York federal judge has ruled that emails between former fund manager and pharmaceutical CEO Martin Shkreli and a Kaye Scholer LLP partner weren't protected by attorney-client privilege in a securities fraud case against the pair, according to an order unsealed on Jan. 26, 2016. Shkreli and Kaye Scholer partner Evan Greebel were hit with criminal charges for allegedly funneling cash from biopharmaceutical company Retrophin Inc. to hedge fund investors. About Retrophin Retrophin, Inc., develops, acquires and commercializes therapies for the treatment of serious, catastrophic or rare diseases. The Company offers Chenodal(R), a treatment for gallstones; Vecamyl(R), a treatment for moderately severe to severe essential hypertension and uncomplicated cases of malignant hypertension; and Thiola, for the prevention of kidney stone formation in patients with severe homozygous cystinuria. Retrophin reported a net loss of $111 million in 2014 following a net loss of $34.6 million in 2013. As of Sept. 30, 2015, the Company had $512 million in total assets, $221 million in total liabilities, and $291 million in total stockholders' equity. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014. The accounting firm noted that the Company has suffered recurring losses from operations, used significant amounts of cash in its operations, and expects continuing future losses. In addition, at Dec. 31, 2014, the Company had deficiencies in working capital and net assets of $70.2 million and $37.3 million, respectively. Finally, while the Company was in compliance with its debt covenants at Dec. 31, 2014, it expects to not be in compliance with these covenants in 2015. These matters raise substantial doubt about the Company's ability to continue as a going concern, the auditors said. ROBIN GRATHWOL: 4th Cir. Affirms Dismissal of 3 Suits ----------------------------------------------------- In an Opinion dated January 11, 2016, which is available at http://is.gd/EMWJcufrom Leagle.com, the United States Court of Appeals for the Fourth Circuit affirmed the district court's orders affirming the bankruptcy court's orders dismissing each of the three adversary proceedings for lack of subject matter jurisdiction. Because the Fourth Circuit finds that the proceedings were not "related to" the Chapter 11 bankruptcy case in which they were filed, see Valley Historic Ltd. P'ship v. Bank of N.Y., 486 F.3d 831, 835 (4th Cir. 2007), the Court affirms for the reasons stated by the district court. The Fourth Circuit dispenses with oral argument because the facts and legal contentions are adequately addressed in the materials before the court and argument would not aid the decisional process. The appeals cases are In Re: ROBIN DALE GRATHWOL, a/k/a Robin Grathwol Tinney, a/k/a Robin Grathwol Randall, Debtor. ROBIN DALE GRATHWOL, Plaintiff-Appellant, v. COASTAL CAROLINA DEVELOPERS, INCORPORATED; B. LEON SKINNER; BLS LANDS, LLC; WALTER T. WILSON; COSWALD, LLC, Defendants-Appellees. ANN F. GRATHWOL LIVING TRUST; ROBIN DALE GRATHWOL, Plaintiffs-Appellants, v. COASTAL CAROLINA DEVELOPERS, INCORPORATED; COSWALD, LLC; B. LEON SKINNER; WALTER T. WILSON; HANOVER LAND, LLC.; W AND B INVESTMENT COMPANY, INCORPORATED, Defendants-Appellees. LEGACY GROUP OF NC, INC., Plaintiff-Appellant, v. COASTAL CAROLINA DEVELOPERS, INCORPORATED, Defendant-Appellee, Nos. 15-1233, 15-1236, 15-1237. George Mason Oliver, Esq. -- george@olivercheek.com -- LAW OFFICE OF OLIVER & CHEEK, PLLC, New Bern, North Carolina, for Appellants. David James Haidt, Esq. -- ayershaidt@embarqmail.com -- AYERS & HAIDT, P.A., New Bern, North Carolina, for Appellees. Robin Grathwol filed a chapter 11 petition (Bankr. E.D.N.C. Case No. 12-00294) on Jan. 13, 2012, and the debtor's plan of reorganization was confirmed on Nov. 26, 2012. RONA INC: S&P Puts 'BB+' CCR on CreditWatch Positive ---------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on RONA Inc., including its 'BB+' long-term corporate credit rating on the company, on CreditWatch with positive implications. The CreditWatch placement follows Lowe's Cos. Inc.'s and RONA Inc.'s announcement that they have entered into a definitive agreement under which Lowe's is expected to acquire RONA for about C$3.2 billion. As part of the transaction, S&P expects Lowe's to purchase all of the issued and outstanding preferred shares of RONA for C$20 per share in cash and assume its C$116.6 million of unsecured notes that mature in 2016. "The positive CreditWatch placement reflects our view of the potential uplift for RONA creditors from the possible acquisition of the company by the higher-rated Lowe's," said Standard & Poor's credit analyst Alessio Di Francesco. In July 2012, Lowe's placed a C$1.8 billion unsolicited bid to acquire RONA that was later rejected by RONA's board of directors. Although S&P recognizes there is a possibility that the transaction announced today could be rejected if it fails to receive regulatory or investor approval, S&P believes there is a greater likelihood that the transaction will be completed this time as it has been unanimously approved by both companies' boards and has management support on both sides. The transaction includes a strong premium for RONA's shares, along with other commitments aimed at ensuring stakeholder support and regulatory approval. S&P intends to resolve the CreditWatch placement on the acquisition's closing, which S&P assumes will occur by the third quarter of 2016. At that time, S&P would likely equalize its long-term corporate credit rating on RONA with that on Lowe's, based on S&P's view that RONA will be of high strategic importance to Lowe's. SAMUEL E. WYLY: Denies Fraud as $2.2B Tax Trial Comes to a Close ---------------------------------------------------------------- Jess Davis at Bankruptcy Law360 reported that in closing arguments on Jan. 27, 2016, business tycoon Sam Wyly and his sister-in-law Dee Wyly told a Texas bankruptcy judge that the Internal Revenue Service failed to prove in a three-week trial that they had committed tax fraud amounting to $2.2 billion. Special tax counsel for the Wylys, Don Lan of Lan Smith Sosolik PLLC, said the U.S. Department of Justice had tried to prove fraud mainly by arguing that the family’s offshore trust system was complex and that the Wylys had tried to conceal it. About Sam Wyly Sam Wyly is a lifelong entrepreneur and author. His first book, 1,000 Dollars & An Idea, is a biography that tells his story of creating and building companies, including University Computing, Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse. His second book, Texas Got It Right!, co-authored with his son, Andrew, was gifted to roughly 450,000 students and teachers, thought leaders, and readers, and continues to be a best-seller in its Amazon category. Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge ordered him to pay several hundred million dollars in a civil fraud case. In September 2014, a federal judge ordered Mr. Wyly and the estate of his deceased brother to pay more than $300 million in sanctions after they were found guilty of committing civil fraud to hide stock sales and nab millions of dollars in profits. About Caroline Wyly Caroline Wyly is the widow of business tycoon Charles Wyly. She and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy protection as leverage to settle a looming tax bill and a $329 million claim from the Securities and Exchange Commission. Her bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy Court, Northern District Texas (Dallas). SAWYER WOOD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Sawyer Wood Products, Inc. aka Sawyer Paddles & Oars POB 389 Gold Hill, OR 97525-0389 Case No.: 16-60250 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court District of Oregon Judge: Hon. Frank R Alley III Debtor's Counsel: Keith Y Boyd, Esq. THE LAW OFFICES OF KEITH Y. BOYD 724 S Central Ave #106 Medford, OR 97501 Tel: (541) 973-2422 Email: ecf@boydlegal.net Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Peter Newport, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/orb16-60250.pdf SEABOARD REALTY: Looks for Six-Month Timeout With Creditors ----------------------------------------------------------- Jeff Montgomery at Bankruptcy Law360 reported that a Connecticut-based real estate conglomerate asked a Delaware bankruptcy court on Jan. 28, 2016, to approve a six-month bar on creditor action against its affiliated, non-debtor properties, saying the companies now in Chapter 11 need time to reconstruct finances, protect assets and investigate evidence of fraud. Financial restructuring consultant Marc Beilinson said during a hearing on the proposed preliminary injunction that Seaboard Realty LLC and 14 associated companies need the six-month injunction to prevent lenders from continuing efforts to attach assets and freeze non-debtor funds. About Seaboard Realty Seaboard Realty LLC and certain of its affiliates on Dec. 13, 2015, filed petitions with the United States Bankruptcy Court for the District of Delaware seeking protection under Chapter 11 of the United States Bankruptcy Code. Seaboard and its affiliates own a portfolio of first class commercial real estate in Stamford, Connecticut, including office, residential and hotel properties. All operations are expected to continue as normal throughout this process. The Chapter 11 filing includes Seaboard Realty LLC and a number of affiliates it manages, which own the equity of subsidiaries that directly own the properties, but does not include the property-owning subsidiaries themselves. Seaboard Realty LLC is owned by John DiMenna, Thomas Kelly and William Merritt. Mr. DiMenna actively managed the Seaboard operations as the managing member of Seaboard Realty LLC, and managed the properties owned by its affiliates through a property-management company owned solely by Mr. DiMenna. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases, with all further pleadings or other papers to be filed in the case of Newbury Common Associates, LLC, Case No. 15-12507 (LSS). The Debtors tapped Dechert LLP as counsel and directing the accounting firm of Anchin, Block and Anchin as forensic accountant. SEVEN GENERATIONS: Moody's Confirms B1 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed Seven Generations Energy Ltd.'s (7G) Corporate Family Rating (CFR) at B1, Probability of Default Rating at B1-PD and senior unsecured notes rating at B2. The Speculative Grade Liquidity Rating remains SGL-2. The rating outlook is positive. This action resolves the review for downgrade that was initiated on January 21, 2016. "The confirmation reflects that 7G's leverage and coverage metrics will remain strong in 2016 and 2017 despite the dramatic fall in commodity prices," said Paresh Chari, Moody's Analyst. "7G's cash flow and production will increase through 2016 and 2017, improving these metrics." Outlook Actions: Issuer: Seven Generations Energy Ltd. -- Outlook, Changed To Positive From Rating Under Review Confirmations: Issuer: Seven Generations Energy Ltd. -- Probability of Default Rating, Confirmed at B1-PD -- Corporate Family Rating, Confirmed at B1 -- Senior Unsecured Regular Bond/Debenture, Confirmed at B2(LGD4) RATINGS RATIONALE 7G's B1 Corporate Family Rating (CFR) primarily reflects low leverage (2017 debt/EBITDA around 2x; retained cash flow/debt around 40%), strong coverage (2017 EBITDA/interest near 6x) and good liquidity (SGL-2). 7G is expected to double production in 2016 to 100,000 boe/d from its still-economic liquids-rich Montney acreage. 7G's concentration in a single field and a single formation, decline rates that require a significant capex program to maintain production and a large growth capex program to increase production and develop its large proved undeveloped reserve base, which entails execution risk. The SGL-2 Speculative Grade Liquidity Rating reflects 7G's good liquidity. At September 30, 2015, 7G had C$651 million of cash and a fully available C$850 million borrowing base revolving credit facility (May 2018 maturity). Moody's expects negative free cash flow of about C$450 million in 2016, which will be funded from cash and revolver drawings. There are no debt maturities until 2020. Alternate liquidity is limited given that substantially all of the company's assets are pledged. In accordance with Moody's Loss Given Default (LGD) methodology, the US$700 million and U$425 million senior unsecured notes are rated B2, one notch below the B1 CFR because of the existence of the priority ranking C$850 million secured revolver. The positive outlook reflects Moody's expectation that 7G's leverage metrics will improve from strong levels in 2017, despite the stressed commodity price environment and high capital spend in 2016. The rating could be upgraded to Ba3 if 7G can execute on its growth program leading to retained cash flow to debt above 30% and sustain expected production. The rating could be downgraded to B2 if retained cash flow to debt falls towards 15%, production and reserves decline, or if liquidity worsens. Seven Generations Energy Ltd. is a Calgary, Alberta-based exploration and production company which produced roughly 50,000 boe/d in 2015, consisting of roughly 40% natural gas, 40% condensate and 20% other natural gas liquids (NGLs). SFX ENTERTAINMENT: Moody’s Affirms Ca Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service downgraded SFX Entertainment, Inc.'s (SFXE) probability of default rating (PDR) to D-PD from Ca-PD and affirmed SFXE's corporate family rating (CFR) at Ca and the rating of the company's senior secured notes at Ca (LGD3). The rating outlook was changed to stable from negative. The company's speculative grade liquidity rating remains unchanged at SGL-4 (weak). Subsequent to the actions, all of SFXE's ratings will be withdrawn as the company has entered bankruptcy proceedings. The following summarizes Moody's ratings and today's rating actions for SFXE: Issuer: SFX Entertainment, Inc. Probability of Default Rating: Downgraded to D-PD from Ca-PD Corporate Family Rating: Affirmed at Ca Second Lien Senior Secured Notes: Affirmed at Ca (LGD3) Outlook: Changed to Stable from Negative Speculative Grade Liquidity Rating: Unchanged at SGL-4 RATINGS RATIONALE The downgrade of SFXE's PDR follows today's announcement that the company and its U.S. subsidiaries commenced voluntary petitions under Chapter 11 of the United States Bankruptcy Code. SFX Entertainment's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside SFX Entertainment's core industry and believes SFX Entertainment's ratings are comparable to those of other issuers with similar credit risk. Corporate Profile Headquartered in New York, New York, SFX Entertainment, Inc., (SFXE), is a leading producer of live events and media and entertainment content focused exclusively on electronic music culture (EMC). SFX ENTERTAINMENT: S&P Lowers CCR to 'D' on Ch. 11 Filing --------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on U.S. live entertainment company SFX Entertainment Inc. to 'D' (default) from 'CC'. At the same time, S&P lowered its issue-level rating on the company's senior secured second-lien loan to 'D' from 'CC'. The recovery rating remains '4', indicating S&P's expectation for average recovery (30%-50%; lower half of the range) of principal the event of a payment default. "The rating actions follow SFX's announcement that it has filed voluntary petitions for restructuring under Chapter 11 of the U.S. Bankruptcy Code," said Standard & Poor's credit analyst Khaled Lahlo. SFX also announced that it has entered into a restructuring support agreement with an "ad hoc group of bondholders" to "convert the majority of the bondholder group debt into equity in a newly strengthened private company." The restructuring support agreement provides for debtor-in-possession financing in the form of a $115 million financing that will be backstopped by lenders who are parties to the agreement. The restructuring agreement contemplates the debt-to-equity conversion of most of the company's debt upon emergence from the Chapter 11 bankruptcy process. The company has disclosed that it "anticipates moving expeditiously through this process." SIGA TECHNOLOGIES: Shareholder Blasts Plan Over Creditor Treatment ------------------------------------------------------------------ Michael Macagnone at Bankruptcy Law360 reported that one of SIGA Technologies' hedge-fund shareholders blasted the company's proposed reorganization plan on Jan. 27, 2016, telling a New York bankruptcy court it made a "mockery" of the bankruptcy process by allowing the government contractor sole discretion on how to treat a major creditor, PharmAthene. Esopus Creek Value Series Fund LP criticized a disclosure statement SIGA proposed to U.S. Bankruptcy Judge Sean Lane, saying it provided inadequate protection for shareholders and created incentives to hand over the company's equity to PharmAthene. 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. SOUTHERN REGIONAL HEALTH: $13.6-Mil. Borrowing Increase Approved ---------------------------------------------------------------- Southern Regional Health System, Inc., d/b/a Southern Regional Medical Center, and its affiliated debtors sought and obtained from Judge Wendy L. Hagenau of the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, authorization to extend and increase their current postpetition financing facility from Prime Healthcare Foundation, Inc ("DIP Lender"). The Debtors requested authority to extend the DIP Facility to Feb. 1, 2016, and to increase the borrowing limit thereunder to $13,600,000, and thereby incur postpetition financing allowable as an administrative expense, having priority over other administrative expenses, and secured by a senior lien on substantially all of the property of the Debtors' estates, on otherwise substantially the same terms and conditions as previously approved by the Court by the Final Order. The Debtors contended that they need cash to meet ongoing obligations necessary to operate their businesses, administer their Chapter 11 estates and maintain the going concern value of their businesses as they conclude an asset sale or reorganize so as to achieve the highest values possible for their creditors. The Debtors further contended that they need to use their cash receipts and the proceeds of the DIP Facility to pay insurance, payroll, payroll expenses, rent, utility charges, professionals and general overhead, to purchase necessary materials, and otherwise continue their businesses and operations. The Debtors believed that the DIP Facility will provide funds sufficient to permit them to operate their businesses pending the sales and reorganization efforts. As of Dec. 22, 2015, the Debtors were indebted to the DIP Lender on the DIP Facility in the principal amount of $7,250,000. The DIP Facility originally was set to mature on Dec. 15, 2015. The DIP Loan Agreement was later amended by agreement of the parties to extend the Maturity Date to Dec. 31, 2015. The material terms, among others, under the Second Amendment are as follows: (a) Summary of Rates, Fees and Charges for DIP Facility: The rates, fees and charges for the DIP Facility would remain unchanged under the Second Amendment. The only additional fee would be a one-time DIP Facility commitment fee of 2% of the committed loan amount $13,600,000, minus the commitment fee already accrued on the original committed amount of $9,200,000, which shall be fully earned upon the closing date of the DIP Facility and payable upon the maturity date of the DIP Facility. (b) Maturity Date: The DIP Facility would now mature on the earlier to occur of a Termination Event, as set forth in Paragraph 11 of the Final Order, Feb. 1, 2016, as opposed to Dec. 31, 2015, the date the Debtors enter into a definitive agreement to sell their assets to a party other than the DIP Lender, and the date that the DIP Lender accelerates the obligations under the DIP Facility as a result of an Event of Default. (c) Borrowing Limits: Subject to the limits in the DIP Loan Agreement, and the limits set forth in the budget attached to the Second Amendment, the maximum loan limit under the DIP Facility would increase to $13,600,000. (d) Borrowing Conditions: The borrowing conditions would remain unchanged from the original DIP Loan Agreement, saving only that the Debtors would not be able to draw more than $9,200,000 under the DIP Facility until approval of the Second Amendment by the Court. Judge Hagenau granted the Debtors' Motion despite the objection filed by the Official Committee of Unsecured Creditors. Southern Regional Health System is represented by: J. Robert Williamson, Esq. Ashley Reynolds Ray, Esq. Matthew W. Levin, Esq. SCROGGINS & WILLIAMSON, P.C. 1500 Candler Building 127 Peachtree Street, NE Atlanta, Georgia 30303 Telephone: (404)893-3880 Facsimile: (404)893-3886 E-mail: rwilliamson@swlawfirm.com aray@swlawfirm.com mlevin@swlawfirm.com About Southern Regional Health Southern Regional Health System, Inc., owns the Southern Regional Medical Center, a 331-licensed bed full-service hospital located in Riverdale, Georgia. Managed by Emory Healthcare, Inc., the hospital serves residents throughout the region south of Atlanta. As a leader in neurologic, heart & vascular, bariatric, and women's healthcare services, Southern Regional's medical staff is comprise of more than 480 physicians that blend their passion for healing with advanced technology to offer the latest procedures and treatments. Southern Regional and its subsidiaries sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 15-64266) on July 30, 2015, in Atlanta, Georgia. The cases are assigned to Judge Wendy L. Hagenau. Southern Regional Health System, Inc. disclosed total assets of $41,996,075 and total liabilities of $42,884,499. The Debtors' secured creditors are Gemino Healthcare Finance, LLC, and U.S. Foods, Inc. Gemino claims to be owed in excess of $10 million, while U.S. Foods has a $60,000 claim. The Debtors tapped Scroggins & Williamson, P.C., as bankruptcy attorneys, Nelson Mulins Riley & Scarborough LLP, as outside general counsel, and Kurtzman Carson Consultants LLC as claims and balloting agent. GGG Partners, LLC serves as financial advisors to the Debtors. The Official Committee of Unsecured Creditors tapped Lamberth, ifelli, Ellis & Nason, P.A., and Pepper Hamilton, LLP, as attorneys. PricewaterhouseCoopers LLP serves as its financial advisors. * * * Prime Healthcare has submitted a letter of intent to purchase most of Southern Regional's assets, and would operate the hospital after the proposed sale. Prime has agreed to provide the Debtors with $9.2 million of DIP financing. SPRINT CORP: S&P Lowers CCR to 'B' on Cash Flow Challenges ---------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit ratings on Overland Park, Kan.-based wireless carrier Sprint Corp. and its subsidiaries to 'B' from 'B+'. The outlook is stable. At the same time, S&P lowered the issue-level rating on Sprint's unsecured notes with subsidiary guarantees, the revolving credit facility due 2018, and the debt at the wholly-owned Clearwire Corp. subsidiary to 'BB-' (two notches above the corporate credit rating) from 'BB'. The recovery rating on these debt issues remains '1', indicating our expectation for very high (90%-100%) recovery in the event of payment default. S&P also lowered its issue-level ratings on Sprint's senior unsecured debt issues that are not guaranteed by its subsidiaries to 'B' from 'B+' and revised the recovery rating to '4' from '3'. The '4' recovery rating indicates S&P's expectation for average (30%-50%; lower end of the range) recovery in the event of payment default. "The downgrade reflects our view that Sprint will be challenged to profitability grow its subscriber base and reverse negative FOCF trends sufficiently to improve its longer-term liquidity position in the face of intense competition and mature market conditions in the U.S. wireless industry," said Standard & Poor's credit analyst Allyn Arden. Despite some positive developments, including improving post-paid subscriber trends (366,000 post-paid phone net additions in the third quarter of 2015 compared with a loss in the prior-year period), and the establishment of a new handset leasing company, we believe that a combination of pricing pressure and a shift to installment and leasing plans will make it challenging for Sprint to grow into its capital structure longer term, although the leasing company does partially mitigate working capital pressures in the near-term. S&P expects that adjusted debt to EBITDA will be in the high-5x area over the next couple of years as modest EBITDA growth offsets higher levels of debt to fund FOCF deficits. Still, S&P believes the adjusted leverage is increasingly becoming a less reliable measure of Sprint's credit quality given the inflationary effects of lease accounting. S&P expects that customers on leasing plans will become a significantly larger portion of its customer base over time. As such, S&P's view of Sprint's financial risk profile is primarily based on its negative FOCF. The outlook is stable. S&P believes that a combination of aggressive cost reduction initiatives, network enhancements, and the likelihood of additional funding sources over the next year provide stability for the rating over the next 12 months, despite significant competitive pressures and ongoing FOCF deficits. S&P could lower the ratings on Sprint if the company experiences higher churn and margin degradation or ARPU declines more than expected, which ultimately results in higher levels of FOCF deficits and liquidity stress. S&P could also lower the ratings on Sprint if S&P come to the conclusion that the company's capital structure may be unsustainable longer term, depending on any mitigating actions that its parent, SoftBank, takes to bolster its liquidity position. Another factor that could prompt a lower rating would be if S&P took away the notch of support from SoftBank, which S&P believes is unlikely in the near term. While unlikely in the near term, S&P could raise the ratings if Sprint is successful in its turnaround plans, including network improvements that provide it with some competitive advantage over the other carriers, lower churn, and ARPU stabilization, such that the company is able to profitably grow its subscriber base. More specifically, an upgrade would entail Sprint approaching FOCF breakeven, which S&P believes would require modest revenue growth, a reduction in working capital deficits (or sufficient net receipts from the handset leasing facility), and margin expansion to the low- to mid-30% area. SUN BANCORP: Reports Fourth Quarter Net Income of $1.45 Million --------------------------------------------------------------- Sun Bancorp, Inc., reported net income available to common shareholders of $1.45 million on $17.2 million of total interest income for the three months ended Dec. 31, 2015, compared to a net loss available to common shareholders of $2.82 million on $19.8 million of total interest income for the same period in 2014. For the year ended Dec. 31, 2015, the Company reported net income available to common shareholders of $10.2 million on $70.2 million of total interest income compared to a net loss available to common shareholders of $29.8 million on $90.2 million of total interest income for the same period in 2014. As of Dec. 31, 2015, Sun Bancorp had $2.20 billion in total assets, $1.95 billion in total liabilities and $256.38 million in total shareholders' equity. "The fourth quarter and full year 2015 results clearly demonstrate that the successful execution of the strategic restructuring undertaken in the last 18 months has led to substantial progress, including reporting profitable operating results in each quarter of 2015," said Thomas M. O'Brien, president and CEO. "We have been relentless in our efforts to address and remediate the legacy regulatory, operating and financial problems at the Company. As a result of these successful efforts, our long-standing formal written agreement with the Office of the Comptroller of the Currency has recently been terminated. Our goal remains focused on building a franchise that operates in full regulatory compliance while delivering value for our investors." "We now have several quarters of successful originations from our new commercial lending platform which provided an increase in commercial loan originations for the first time in many years," said O'Brien. "Despite a very competitive commercial loan market, with our highly experienced commercial lending teams firmly in place, we continue to see quality relationship opportunities. While the bulk of our originations were in commercial real estate, we have enhanced several commercial & industrial loan relationships, and it is our desire to grow in this segment. Strategically, we continued to reduce our consumer, residential and investment portfolios in 2015 and reinvest the proceeds into commercial loans." A copy of the press release is available for free at: http://is.gd/kchEhQ About Sun Bancorp. Inc. Sun Bancorp, Inc. is a bank holding company headquartered in Mount Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a community bank serving customers throughout New Jersey. Sun National Bank -- http://www.sunnationalbank.com/-- is an Equal Housing Lender and its deposits are insured up to the legal maximum by the Federal Deposit Insurance Corporation (FDIC). Sun Bancorp reported a net loss available to common shareholders of $29.8 million in 2014, a net loss available to common shareholders of $9.94 million in 2013, and a net loss available to common shareholders of $50.49 million in 2012. SUNCOKE ENERGY: Moody's Cuts Corporate Family Rating to 'B2' ------------------------------------------------------------ Moody's downgraded the corporate family rating (CFR) of SunCoke Energy, Inc. (SXC) to B2 from Ba3, the probability of default rating (PDR) to B2-PD from Ba3-PD, the ratings on the SXC secured credit facility to B3 from Ba1, the ratings on SXC senior unsecured notes due 2019 to Caa1 from B1, and the ratings on senior unsecured notes of SunCoke Energy Partners, L.P. (SXCP) to B3 from B1. The Speculative Grade Liquidity rating was changed to SGL-3 from SGL-2. The outlook is stable. At the same time, Moody's withdrew the CFR, PDR and SGL at SXCP, due to the substantial majority of operating assets having been dropped down to SXCP level, with only a small proportion of debt still outstanding at SXC level. The two entities are now assessed on a consolidated basis, with SXCP's senior unsecured notes rated as noted above. Downgrades: Issuer: SunCoke Energy, Inc. -- Probability of Default Rating, Downgraded to B2-PD from Ba3-PD -- Speculative Grade Liquidity Rating, Changed to SGL-3 from SGL- 2 -- Corporate Family Rating, Downgraded to B2 from Ba3 -- Senior Secured Bank Credit Facility, Downgraded to B3 (LGD4) from Ba1 (LGD2) -- Senior Unsecured Regular Bond/Debenture , Downgraded to Caa1 (LGD6) from B1 (LGD4) Downgrades: Issuer: SunCoke Energy Partners, L.P. -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD4) from B1 (LGD4) Withdrawals: Issuer: SunCoke Energy Partners, L.P. -- Probability of Default Rating, Withdrawn , previously rated Ba3-PD -- Speculative Grade Liquidity Rating, Withdrawn , previously rated SGL-2 -- Corporate Family Rating, Withdrawn , previously rated Ba3 Outlook Actions: Issuer: SunCoke Energy, Inc. -- Outlook, Remains Stable Issuer: SunCoke Energy Partners, L.P. -- Outlook, Remains Stable RATINGS RATIONALE The downgrade reflects the continuing headwinds in the company's end markets, as steel makers continue to idle operations and cut back production. The company's EBITDA declined in 2015 on the back of declining sales in the spot market and above contract maximums, as well as operating issues at Indiana Harbor and the reorganization of Haverhill Chemicals LLC facility, which more than offset the $21 million contribution from the Convent Marine Terminal (CMT) acquired in August of 2015. At December 31, 2015, Debt/ EBITDA, as adjusted by Moody's, exceeded 5.0x for SXC and 4.5x for SXCP (including only a partial year contribution from CMT since acquisition date). We expect the leverage to decline below 4.5x on a consolidated basis in 2016, as the company enjoys full year contribution from CMT and free cash flows are directed towards debt repayment. Nevertheless, the B2 rating reflects the increased event risk of contract restructuring or reorganization by one of the company's key customers. The ratings continue to reflect the stable business model of the company's coke making operations, which supply coke to the integrated steelmakers, including ArcelorMittal, AK Steel and US Steel under long-term take-or-pay contracts with cost pass-through provisions. We expect the company's cokemaking operations to show steady earnings generation in 2016, as the company's customers continue to honor their take-or-pay obligations. The ratings also reflect the company's recent decision to eliminate the dividend at SXC and direct cash flows towards deleveraging. We expect that in the event performance is weaker than anticipated, SXCP distributions would be reduced as needed to maintain leverage metrics within acceptable range. The ratings further reflect adequate liquidity, as reflected in the SGL-3 rating. SXC liquidity is supported by $123 million in cash at December 31, 2015 (including $49 million at SXCP), roughly $90 million of availability under SXC's $150 million revolver due 2018, and $65 million available under SXCP's $185 million revolver due 2019. We expect SXCP to be in compliance with the restrictive financial covenants under their credit agreements. The five notch downgrade of SXC's secured revolver reflects Moody's expectation that almost all of consolidated EBITDA is now being generated at SXCP, which effectively places the revolver in a subordinated position relative to SXCP's debt. The B3 rating on SXCP's senior unsecured notes, one notch below the CFR, reflect their relative position in the capital structure with respect to claim on collateral behind SXCP's secured revolver. The B3 rating on SXC's secured credit facility and Caa1 rating on SXC's unsecured notes reflect their effective subordination to SXCP's debt with respect to claim on SXCP's assets. The stable outlook reflects Moody's expectation that the company will maintain Debt/ EBITDA, as adjusted at or below 4.5x by directing free cash flow towards debt repayment. The ratings could be downgraded if liquidity were to deteriorate or if Debt/ EBITDA, as adjusted, were expected to exceed 5.5x. An upgrade would be considered should the company's end markets stabilize and Debt/ EBITDA, as adjusted, were expected to be maintained below 4.0x. TCF FINANCIAL: Fitch Affirms 'B' Preferred Stock Rating ------------------------------------------------------- Fitch Ratings has affirmed TCF Financial Corp.'s (TCB) ratings at 'BBB-/F3'. The Rating Outlook remains Stable. The rating action follows a periodic review of the midtier regional banking group, which includes BankUnited Inc. (BKU), BOK Financial Corp. (BOKF), Cathay General Bancorp (CATY), East West Bancorp (EWBC), First Republic Bank (FRC), First Horizon National Corp. (FHN), First National of Nebraska Inc. (FNNI), Fulton Financial Corp. (FULT), Hilltop Holdings, Inc. (HTH), Synovus Financial Corp. (SNV), TCF Financial Corp. (TCB), Trustmark Corp. (TRMK), UMB Financial Corp. (UMBF) and Wintrust Financial Corp. (WTFC). Company-specific rating rationales for the other banks are published separately, and for further discussion of the midtier regional bank sector in general, refer to the special report titled 'U.S. Banks: Midtier Regional Bank Periodic Review,' to be published shortly. KEY RATING DRIVERS IDRs, VRs, AND SENIOR DEBT The action primarily reflects TCB's steady operating performance, stable asset quality and continued capital build. Fitch notes that TCB's ratings remain toward the bottom of its peer group and are likely constrained, due to its relatively higher risk profile across various financial metrics as well as a larger risk appetite as reflected in continued outsized loan growth. Moreover, Fitch views TCB's relatively high level of nonperforming assets (NPAs) as well as the potential financial impact from a recent Consumer Financial Protection Bureau (CFPB) regarding past practices as a rating constraint over the near to medium term. As expected, TCB continues to put focus on growth in its national lending loan portfolio in order to diversify its balance sheet and revenue mix. Growth has continued to be aggressive in the indirect auto space which TCB entered in 2011. This space is unique for the peer group. Auto loans on balance sheet have grown 39% from third quarter 2014 (3Q14) to 3Q15 and now make up around 14% of the company's loan book, up from 11% a year prior. This growth rate in auto has outpaced nearly all competitors that lend in the indirect auto space. While losses relating to TCB's auto book have been in line with industry standards over recent periods, in Fitch's view, the portfolio still has yet to go through a full credit cycle. Furthermore, Fitch notes that growth in the portfolio is likely depressing loss ratios from quarter to quarter. Positively, TCB has shown the ability to manage growth and concentrations in its auto portfolio through the use of securitization. The company has now completed three auto securitizations over the last six quarters totalling $881 million and recognizing gains of $22 million. In Fitch's view, the securitization transactions primarily reflect substantial appetite for auto-related paper by investors. Still, the transaction also points toward the increased credibility of TCF and its management team that heads the unit within the indirect auto lending space. Fitch also believes the transactions show the infrastructure and risk management systems TCB has built over the past few years in order to gather and store the data necessary to execute on securitizations. Also mitigating some of Fitch's loan growth concerns is the company's ability to generate and maintain a reasonable level of capital. Although TCB recently raised its dividend, it has not performed any material share repurchases like some banks have. Instead, management has chosen to use capital generation as a way to support growth. Therefore, the company's Total Risk Based capital ratio has increased 20 basis points (bps) year-over-year to 13.84%. Its common equity tier 1 (CET1) ratio is up nearly 40bps since 1Q15 to 10.04%. This type of capital retention that builds capital is expected by Fitch and has been incorporated into the bank's current rating and the outlook. NPAs and credit costs remain elevated compared to higher rated institutions but are within expectations. TCB's level of NPAs to total loans and other real estate owned (ORE) was 2.4% compared to the peer average of around 1.6%. TCB still has $150 million in accruing TDRs, which make up more than a third of its NPAs. Most of them are consumer-related which tend to be much stickier than commercial-related TDRs. Fitch expects TCB to maintain a reserve against the remaining accruing TDRs in line with past practices at close to 20% of unpaid balances, a level Fitch believes is reasonable when considering marks taken on past bulk loan sales and those announced around the banking industry. These expectations are incorporated in the current rating of 'BBB-' and today's affirmation. Fitch notes that earnings have historically been supported by a low-cost deposit base which generated a relatively higher level of noninterest income than peers. While deposit pricing through the industry has converged to historic lows bringing TCB's cost of deposits in-line with peer averages, Fitch would expect the company's earnings to benefit relatively more in a rising rate scenario given the likely sticky nature of its low-balance, high volume deposit base. Over 90% of the bank's total deposits are FDIC insured, a level relatively greater than peers. As noted above, TCB's deposit base has historically generated a higher level of fee income when compared to peers and the industry. Some of this fee income has been reduced due to consumer behavior and the Durbin Amendment. However, Fitch notes that the level is still outsized relative to most. Fitch believes that this is likely a cause of the CFPB's recent letter to TCB indicating that its enforcement office is considering recommending that the CFPB take legal action against TCF related to compliance with laws relating to unfair, deceptive and abusive acts and practices in connection with some deposit product administration. The outcome and timing of any potential legal action against TCB is presently unclear and thus not explicitly incorporated in TCB's ratings. However, the presence of potential legal action does constrain TCB's rating from upward rating movement in the near to medium term. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES TCB's subordinated debt is notched one level below its Viability Rating (VR) of 'bbb-' for loss severity. TCB's preferred stock is notched five levels below its VR of 'bbb-', two times for loss severity and three times for non-performance. These ratings are in accordance with Fitch's criteria and assessment of the instruments non-performance and loss severity risk profiles and have thus been affirmed due to the affirmation of the VR. LONG- AND SHORT-TERM DEPOSIT RATINGS The uninsured deposit ratings of TCB are rated one notch higher than TCB's Issuer Default Rating (IDR) and senior unsecured debt because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. HOLDING COMPANY TCB's Issuer Default Rating (IDR) and VR are equalized with those TCF National Bank, reflecting its role as the bank holding company, which is mandated in the U.S. to act as a source of strength for its bank subsidiaries. Ratings are also equalized reflecting the very close correlation between holding company and subsidiary failure and default probabilities. SUPPORT RATING AND SUPPORT RATING FLOOR TCB has a Support Rating of '5' and Support Rating Floor of 'NF'. In Fitch's view, TCB is not systemically important and therefore, the probability of support is unlikely. IDRs and VRs do not incorporate any support. RATING SENSITIVITIES VR, IDRs, AND SENIOR DEBT Fitch will continue to monitor credit risk and risk appetite in TCB's growing national lending platform in relation to those that contend in similar lending spaces. If Fitch observes a relative divergence of credit costs in these portfolios that point toward lax underwriting or monitoring and lead to earnings performance deterioration negative rating action is possible. Over the rating horizon, Fitch expects TCB's absolute and relative auto loan production to continue to slow given the level of growth the asset class has experienced since TCB got into the space at the end of 2011. However, should auto growth continue to outpace the industry by multiples and the book near 20% of TCB's loan portfolio, adverse rating action could ensue as Fitch would view the exposure as significantly outsized compared to similarly rated institutions and outside of Fitch's expectations. As mentioned above, TCB will likely be subject to some sort of regulatory action from the CFPB related to its past deposit practices. While the ultimate outcome of said regulatory action is not incorporated into TCB's rating, the company could see pressure on its ratings should the action place strain on the company's ability to generate a reasonable ROA or maintain adequate capital. Fitch considers TCB's current operating performance as reasonable and its current capital levels as adequate relative to its risk profile. As noted above, Fitch believes TCB's ratings are constrained from upward movement in the near term given its current business strategies, relative asset quality and potential legal action against it. Over the long term, if asset quality converges with higher rated peers, credit quality in the national lending portfolio remains in line with industry, leading to operating result more in line with higher rated peers while maintaining capital levels at or above current levels, TCB's ratings or Outlook could be positively impacted. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES The ratings for TCB's and its operating companies' subordinated debt and preferred stock are sensitive to any change to TCB's VR. LONG- AND SHORT-TERM DEPOSIT RATINGS The long- and short-term deposit ratings are sensitive to any change to TCB's long- and short-term IDR. HOLDING COMPANY Should TCB's holding company begin to exhibit signs of weakness, demonstrate trouble accessing the capital markets, or have inadequate cash flow coverage to meet near-term obligations, there is the potential that Fitch could notch the holding company IDR and VR from the ratings of the operating companies. RATING SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY As the IDRs and VRs of the subsidiaries are equalized with those of TCB to reflect support from their ultimate parent, they are sensitive to changes in the parent's propensity to provide support, which Fitch currently does not expect, or from changes in TCB's IDRs. SUPPORT RATING AND SUPPORT RATING FLOOR Since TCB's Support and Support Rating Floors are '5' and 'NF', respectively, there is limited likelihood that these ratings will change over the foreseeable future. Fitch has affirmed these ratings with a Stable Outlook: TCF Financial Corp. -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Preferred stock at 'B'; -- Short-term IDR at 'F3'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. TCF National Bank -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Long-term deposits at 'BBB'; -- Subordinated Debt at 'BB+'; -- Short-term IDR at 'F3'; -- Short-term Deposits at 'F3'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. THERAPEUTICSMD INC: BNY Mellon Reports 6.5% Stake as of Dec. 31 --------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, The Bank of New York Mellon Corporation disclosed that as of Dec. 31, 2015, it beneficially owns 11,609,160 shares of common stock of TherapeuticsMD, Inc., representing 6.53 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/8jcOzl About TherapeuticsMD Boca Raton, Florida-based TherapeuticsMD, Inc. (OTC QB: TXMD) is a women's healthcare product company focused on creating and commercializing products targeted exclusively for women. The Company currently manufactures and distributes branded and generic prescription prenatal vitamins as well as over-the-counter vitamins and cosmetics. The Company is currently focused on conducting the clinical trials necessary for regulatory approval and commercialization of advanced hormone therapy pharmaceutical products designed to alleviate the symptoms of and reduce the health risks resulting from menopause-related hormone deficiencies. TherapeuticsMD reported a net loss of $54.2 million on $15.02 million of net revenues for the year ended Dec. 31, 2014, compared with a net loss of $28.4 million on $8.77 million of net revenues for the year ended Dec. 31, 2013. As of Sept. 30, 2015, the Company had $90.5 million in total assets, $12.9 million in total liabilities and $77.6 million in total stockholders' equity. THINKSTREAM INC: SSG Acted as Investment Adviser in Asset Sale -------------------------------------------------------------- SSG Capital Advisors, LLC acted as the investment banker to Thinkstream, Inc. in the sale of substantially all of its assets to Thinkstream Acquisition, LLC ("TAL"), an investor group consisting of the Company's largest creditor and two technology entrepreneurs. The sale was effectuated through a Chapter 11 Section 363 process in the U.S. Bankruptcy Court for the Middle District of Louisiana. The transaction closed in December 2015. Thinkstream is a software and systems firm that develops distributed information networks to meet the communication and interoperability demands of public safety and criminal justice markets. The Company has one of the only technologies on the market that can integrate public safety networks on a state, multi-state or nationwide level. Networks powered by the Thinkstream platform are capable of scaling to encompass thousands of information systems. SSG was originally retained as investment banker in November 2014 and conducted a comprehensive marketing process to sell the business. However, the process ceased when the Company lost a key contract bid and subsequently came under substantial pressure from creditors. As the result of the dispute regarding its significant debt burden, an involuntary petition was filed against Thinkstream by several petitioning creditors in May 2015. In July 2015, the U.S. Bankruptcy Court entered an order for relief under Chapter 11 of the U.S. Bankruptcy Code. A Trustee was appointed to operate Thinkstream and pursued a sale strategy to avoid further deterioration of the business. The Trustee reengaged SSG to solicit offers to purchase the Company. TAL's offer was ultimately the highest and best price for substantially all of the assets of Thinkstream. SSG's experience identifying alternative solutions and its understanding of the Chapter 11 sales process enabled key stakeholders to maximize the value of the Company. Other professionals who worked on the transaction include: * David S. Rubin of Kantrow Spaht Weaver and Blitzer, Chapter 11 Trustee to Thinkstream, Inc.; * Julie M. McCall of Kantrow Spaht Weaver and Blitzer, counsel to the Chapter 11 Trustee; * Barry H. Grodsky and Donald J. Miester, Jr. of Taggart Morton, LLC, counsel to Thinkstream, Inc.; * Gregory J. St. Angelo of La Nasa, St. Angelo & La Nasa, LLC, counsel to the senior lender; * Brandon A. Brown, Erin Wilder-Doomes and Ryan J. Richmond of Stewart Robbins & Brown, LLC, counsel to the largest petitioning creditor; and * Jan M. Hayden, Phyllis G. Cancienne, David C. Rieveschl, Warner J. Delaune and Matthew C. Usdin, counsel to Thinkstream Acquisition, LLC. About SSG Capital Advisors, LLC SSG Capital Advisors is an independent boutique investment bank that assists middle-market companies and their stakeholders in completing special situation transactions. It provides its clients with investment banking services in the areas of mergers and acquisitions, private placements, financial restructurings, valuations, litigation and strategic advisory. SSG Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker dealer of SSG Holdings, LLC. SSG is a registered trademark for SSG Capital Advisors, LLC. SSG provides investment banking, restructuring advisory, merger, acquisition and divestiture services, private placement services and valuation opinions. About Thinkstream Inc. Thinkstream Incorporated of Delaware, fka Thinkstream Incorporated of Colorado, is a technology company that engages in developing and expanding standard and Web-based distributed information networks to meet the communication and interoperability demands of public safety and criminal justice markets. The company serves federal agencies, departments, and municipalities in California, Florida, Texas, Louisiana, Mississippi, and Georgia. On Sept. 19, 2014, petitioning creditors led by TSB Ventures, LLC, asserting $9.33 million in total claims on account of debentures and promissory notes allegedly issued by Thinkstream Incorporated of Delaware or its predecessor, filed an involuntary Chapter 11 petition for Thinkstream in Baton Rouge (Bankr. M.D. La. Case No. 14-11204). In November 2014, Judge Douglas D. Dodd dismissed the bankruptcy case after the Debtor and the petitioning creditors announced a settlement. TSB Ventures, which is owed $9.09 million, and other alleged creditors again filed an involuntary Chapter 11 petition (Bankr. M.D. La. Case No. 15-10553) for Thinkstream on May 11, 2015, in Baton Rouge, Louisiana. TSB is represented by Brandon A. Brown, Esq., and Ryan James, Esq., Stewart Robbins, in Baton Rouge, Louisiana. Other petitioning creditors, namely, Rainbow Investments, Kevin Kling GST Trust, Tim O'Leary and John Zapalac, are represented by J. Eric Lockridge, Esq. -- eric.lockridge@keanmiller.com -- of Kean Miller. TITAN GROUP: Ontario Court Sets April 15 Claims Bar Date -------------------------------------------------------- The Hon. Justice Conway of the Ontario Superior Court of Justice set April 15, 2016, at 5:00 p.m. (Eastern Standard Time) as the last day for any person who believes that it has a claim against any Titan Group entity to send a proof of claim to the court-appointed receiver, Grant Thornton Limited. Claimants who require a proof of claim form should contact: Jennifer Kwon Grant Thornton Limited Tel: 416-360-4167 Email: kwon@ca.gt.com Additional proof of claim forms can be found on the receiver's website at http://www.grantthornton.ca/titan The Titan Group includes Lance Kotton Titan Equity Group Ltd., Executive Leasing Capital Corp., Executive Leasing Inc., Titan 230 Major Mack Inc., Titan 10703 Bathrust Inc., Shan-Kael Group Inc., Tread Finance Corp., 230 Major Mack Holdings Inc., Titan 10703 Bathurst Holdings Inc., Titan Real Estate Acquisition & Development Corp., Titan Real Estate Equities Inc., 2302604 Ontario Inc., and 2216296 Ontario Inc. TORQUED UP: Cougar-Led Sale Process Approved -------------------------------------------- U.S. Bankruptcy Judge Bill Parker set the auction for substantially all of Torqued-Up Energy Services, Inc.’s assets on Feb. 3, 2016. Cougar Pressure Control, LLC, an affiliate of Commander Energy Services, Inc., is approved as the designated Stalking Horse bidder pursuant to the Motion. The Bankruptcy Court also approved the bidding procedures in connection with the sale. As part of the requirements to become a Qualified Bidder, all bidders must tender a deposit in the amount of $100,000 along with their written opening bid. Cougar has made such a deposit. The Lenders support the Sale Procedures provided that (i) the Debtors only file, support, or prosecute a motion that seeks a sale of substantially all of the Debtors’ assets that provides for the distribution to the Administrative Agent (on behalf of the Lenders) at the closing of any such sale, at least the greater of 85% of gross sale proceeds or $8,000,000, and (ii) any proposed sale order or any order entered by the Court provides for the distribution to the Administrative Agent (on behalf of the lenders) at the closing of any such sale, at least the greater of 85% gross sale proceeds or $8,000,000. The Definitive Purchase Agreement provides that Cougar be granted a “breakup fee” of $250,000, in connection with being the stalking horse bidder in the event Cougar is not the successful holder of the Prevailing Bid and the Debtors close a sale of the Assets with a third party. The proposed procedures for the sale and the assumption and assignment of executory contracts are reasonable, appropriate, and within the Debtors’ sound business judgment under the circumstances because they will serve to maximize the value that the Debtors will recover on account of the sale of the Assets. The value of the Assets will be determined at the Auction to be conducted under the Sale Procedures, and the Sale Procedures are designed to ensure a competitive and fair bidding process under the circumstances. About Torqued-Up Energy Torqued-Up Energy Services, Inc., Arctic Acquisition Corporation and Torqued-up Enterprises, LLC filed Chapter 11 bankruptcy petitions (Bankr. E.D. Tex. Case Nos. 15-60796, 15-60798, and 15-60799, respectively) on Nov. 24, 2015. The petition was signed by Kelly W. Prentiss as CEO. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Ireland, Carroll, & Kelley and Searcy & Searcy, P.C. serve as the Debtors' counsel. Judge Bill Parker has been assigned the case. Arctic and Enterprises, while non-operating, are guarantors on debt to the senior secured lenders and have pledged assets to secure that debt. As of Oct. 9, 2015, the Company had on hand the sum of approximately $1.2 million in cash. The Debtor also owns approximately $3 million in outstanding accounts receivables of which approximately $1.5 million is collectible. The Company's other non-insider, third-party debt is approximately $1.5 million as of Oct. 9, 2015, consisting largely of approximately 41 capital leases. The Company has unsecured subordinated debt which has been advanced by one or more equity owners over time. That sub-debt is contractually subordinated to the secured debt of the Banks and as of Oct. 9, 2015, totals in the amount of $32.5 million. No interest or other payments have been made on the sub-debt. TORQUED-UP ENERGY: Seeks to Grant Replacement Liens to Amegy Bank ----------------------------------------------------------------- Torqued-Up Energy Services, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Eastern District of Texas to execute documents required to perfect a lien and security interest in favor of Amegy Bank against CP 504 concurrently with the execution by Amegy Bank of a release of its lien against CP 505. The Debtors seek authority to correct the clerical mistake and to grant Amegy Bank a replacement lien on CP 504, which was mistakenly released, and, in return, to obtain from Amegy Bank a release of CP 505 in accordance with the sale to Krawford, Inc. According to the Debtors, the clerical error resulted in the Debtors transferring the wrong title to Krawford and instructing Amegy Bank to release the lien for the wrong equipment since the only difference in the VIN identifiers is a single digit at the end of the lengthy number. Amegy Bank holds the title to CP-505 and asserts a security interest in that property. CP 504 is the same type and style of equipment as CP-505. About Torqued-Up Energy Torqued-Up Energy Services, Inc., Arctic Acquisition Corporation and Torqued-up Enterprises, LLC filed Chapter 11 bankruptcy petitions (Bankr. E.D. Tex. Case Nos. 15-60796, 15-60798, and 15-60799, respectively) on Nov. 24, 2015. The petition was signed by Kelly W. Prentiss as CEO. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Ireland, Carroll, & Kelley and Searcy & Searcy, P.C. serve as the Debtors' counsel. Judge Bill Parker has been assigned the case. Arctic and Enterprises, while non-operating, are guarantors on TUES debt to the senior secured lenders and have pledged assets to secure that debt. As of Oct. 9, 2015, the Company had on hand the sum of approximately $1.2 million in cash. The Debtor also owns approximately $3 million in outstanding accounts receivables of which approximately $1.5 million is collectible. The Company's other non-insider, third-party debt is approximately $1.5 million as of Oct. 9, 2015, consisting largely of approximately 41 capital leases. The Company has unsecured subordinated debt which has been advanced by one or more equity owners over time. That sub-debt is contractually subordinated to the secured debt of the Banks and as of Oct. 9, 2015, totals in the amount of $32.5 million. No interest or other payments have been made on the sub-debt. TORQUED-UP ENERGY: Seyfarth Okayed to Negotiate Sale Transactions ----------------------------------------------------------------- The Hon. Bill Parker of the U.S. Bankruptcy Court for the Eastern District of Texas authorized Torqued-Up Energy Services, Inc., et al., to employ Seyfarth Shaw, LLP, as special counsel to represent the Debtors in negotiating sale transactions and to draft and close the sales of assets. The normal hourly billing rates of Seyfarth Shaw are: Paul Pryzant, Esq. $525 Jason DeJonker, Esq. $545 Seyfarth Shaw assures the Court that it does not hold or represent any interest adverse to that of the Debtors' estates with respect to the matter for which their employment is sought. The firm can be reached at: Seyfarth Shaw, LLP c/o Paul Pryzant 700 Milam Street, Suite 1400 Houston, TX 77002-2812 Tel: (713) 238-1887 E-mail: Ppryzant@seyfarth.com The Debtors are represented by: Joshua P. Searcy, Esq. Jason R. Searcy, Esq. Callan C. Searcy, Esq. SEARCY & SEARCY, P.C. P.O. Box 3929 Longview, TX 75606 Tel: (903) 757 3399 Fax: (903) 757 9559 E-mails: joshsearcy@jrsearcylaw.com jsearcy@jrsearcylaw.com ccsearcy@jrsearcylaw.com About Torqued-Up Energy Torqued-Up Energy Services, Inc., Arctic Acquisition Corporation and Torqued-up Enterprises, LLC filed Chapter 11 bankruptcy petitions (Bankr. E.D. Tex. Case Nos. 15-60796, 15-60798, and 15-60799, respectively) on Nov. 24, 2015. The petition was signed by Kelly W. Prentiss as CEO. The Debtors estimated both assets and liabilities in the range of $10 million to $50 million. Ireland, Carroll, & Kelley and Searcy & Searcy, P.C. serve as the Debtors' counsel. Judge Bill Parker has been assigned the case. Arctic and Enterprises, while non-operating, are guarantors on debt to the senior secured lenders and have pledged assets to secure that debt. As of Oct. 9, 2015, the Company had on hand the sum of approximately $1.2 million in cash. The Debtor also owns approximately $3 million in outstanding accounts receivables of which approximately $1.5 million is collectible. The Company's other non-insider, third-party debt is approximately $1.5 million as of Oct. 9, 2015, consisting largely of approximately 41 capital leases. The Company has unsecured subordinated debt which has been advanced by one or more equity owners over time. That sub-debt is contractually subordinated to the secured debt of the Banks and as of Oct. 9, 2015, totals in the amount of $32.5 million. No interest or other payments have been made on the sub-debt. TREND COMPANIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Trend Companies of Kentucky, Inc. 11216 Decimal Drive Louisville, KY 40299 Case No.: 16-30258 Chapter 11 Petition Date: February 3, 2016 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Judge: Hon. Alan C. Stout Debtor's Counsel: Neil Charles Bordy, Esq. SEILLER WATERMAN LLC 2200 Meidinger Tower 462 S 4th Street Louisville, KY 40202 Tel: 584-7400 Email: bordy@derbycitylaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Dumstorf, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/kywb16-30258.pdf TRI STATE TRUCKING: Adds IRS and CAT Financial to Creditors List ---------------------------------------------------------------- Tri State Trucking Company filed with the U.S. Bankruptcy Court for the Middle District of Pennsylvania amended list of creditors holding 20 largest unsecured claims to reflect the addition of Cat Financial and Internal Revenue Service and omission of Somerset Regional Water Resource to the list. The amended list also reflected the decrease in the claim amount of National Oilwell Varco. The amended list discloses: Name of Creditor Nature of Claim Amount of Claim --------------- --------------- --------------- AJ's Trade Vendor $73,025 American Truck Stop Trade Vendor $485,696 2720 South Main Street Mansfield, PA 16933 Axion International Inc. Trade Vendor $52,200 B&K Equipment, LLC Trade Vendor $54,799 Blue Cross - First Priority Life Trade Vendor $69,153 CAT Financial Caterpillar Truck $296,842 P.O. Box 340001 2120 West End Ave. Nashville, TN 37203 Cleveland Brothers Trade Vendor $250,866 P.O. Box 417094 Boston, MA 02241 FleetMatics USA, LLC Trade Vendor $249,119 Grant Smith Trucking Trade Vendor $30,000 Great Plains Oilfield Rental Trade Vendor $44,941 Hertz Equipment Rental Trade Vendor $95,405 Internal Revenue Service $368,837 P/O/ Box 7346 Philadelphia, PA 19101-0424 Ironent, LLC Trade Vendor $106,954 Jack Doheny Companies Trade Vendor $171,541 JJ Powell Fuel Management Trade Vendor $246,668 Mansfield Crane Service Corp. Reserve Account $209,665 Napa-Rakoski Automotive Trade Vendor $25,908 National Oilwell Varco Trade Vendor $38,301 Parentebeard, LLC Trade Vendor $31,852 Western AG Enterprises Inc. Trade Vendor $49,409 A copy of the schedules is available for free at http://bankrupt.com/misc/TriStateTrucking_65_Nov17SALs.pdf William E. Robinson, president of the Debtor declared that the filing is true and correct. About Tri State Trucking Tri State Trucking Company filed Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 15-04444) on Oct. 13, 2015. William E. Robinson signed the petition as president. The Debtor disclosed assets of $8,373,299 and liabilities of $5,522,039. Mette, Evans, & Woodside represents the Debtor as counsel. Judge John J Thomas is assigned to the case. Tri State operates an over the road logistics company hauling various freight of its customers. The Debtor employs approximately 50 people and operates from its headquarters located at 16064 Route 6, Mansfield, Pennsylvania 16933. TRI STATE TRUCKING: Can Employ Guthrie and Co. as Accountants ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized Tri State Trucking Company to employ Guthrie and Co., P.C., and Lisa Guthrie, CPA, as accountants. According to the Debtor, the firm has performed services for it prepetition. However, all prepetition sums were either paid in full in the oridinary course of business or written off to the extent unpaid as of the date of Petition. The Debtor has agreed to a $8,000 retainer prior to the performance of service. To the best of the Debtor's knowledge, Ms. Guthrie, and the firm are "disinterested persons" as that term is defined under Section 101(14) of the Bankruptcy Code. About Tri State Trucking Tri State Trucking Company filed Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 15-04444) on Oct. 13, 2015. William E. Robinson signed the petition as president. The Debtor estimated assets in the range of $10 million to $50 million and liabilities of at least $1 million. Mette, Evans, & Woodside represents the Debtor as counsel. Judge John J Thomas is assigned to the case. Tri State operates an over the road logistics company hauling various freight of its customers. The Debtor employs approximately 50 people and operates from its headquarters located at 16064 Route 6, Mansfield, Pennsylvania 16933. TRI STATE TRUCKING: Panel Okayed to Retain Cole Shotz as Counsel ---------------------------------------------------------------- The Hon. John J. Thomas of the U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Tri State Trucking Company to retain Cole Shotz P.C. as its counsel. Cole Shotz will, among other things: (1) advise the Committee with respect to its rights, duties and powers in the Chapter 11 case; (2) assist and advise the Comittee in the consultations with the Debtor relative to the administration of the Chapter 11 case; and (3) assist the Committee in analyzing the claims of the Debtor's creditors and the Debtor's capital structure and in negotiating with holders of claims and equity interests. The Committee agreed to compensate Cole Shotz on an hourly basis, plus reimbursement of actual, necessary expenses incurred by the law firm. The hourly rates of firm's personnel are: Gary H. Leibowitz, Esq. $510 Jonathan A. Grasso, Esq. $290 Other attorneys and paralegals may from time to time serve the Committee in connection with the matters. Their hourly rates are: Partners and special counsel $410 - $825 Associates $160 - $420 Paralegals $165 - $270 Litigation Support Specialists $275 - $375 Project Assistants $75 - $200 Cole Shotz assures the Court that it is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm may be reached at: Gary H. Leibowitz, Esq. Jonathan A. Grasso, Esq. COLE SHOTZ P.C. 300 East Lombard Street, Suite 1450 Baltimore, MD 21202 Tel: (410) 230-0660 Fax: (410) 230-0667 Email: gleibowitz@coleschotz.com jgrasso@coleschotz.com About Tri State Trucking Tri State Trucking Company filed Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 15-04444) on Oct. 13, 2015. William E. Robinson signed the petition as president. The Debtor estimated assets in the range of $10 million to $50 million and liabilities of at least $1 million. Mette, Evans, & Woodside represents the Debtor as counsel. Judge John J Thomas is assigned to the case. Tri State operates an over the road logistics company hauling various freight of its customers. The Debtor employs approximately 50 people and operates from its headquarters located at 16064 Route 6, Mansfield, Pennsylvania 16933. TRUMP ENTERTAINMENT: Experts Say CBA Ruling Is a Blow to Labor -------------------------------------------------------------- Jonathan Randles at Bankruptcy Law360 reported that the Third Circuit has made it easier for companies to shirk costly labor contracts through bankruptcy after ruling the owner of the Trump Taj Mahal can reject an expired collective bargaining agreement, a matter of first impression that may now tilt the balance of prepetition labor negotiations, experts say. The federal appeals court ruled last week that the Bankruptcy Code allows Trump Entertainment Resorts Inc., currently reorganizing its debt in Chapter 11, to reject the continuing terms and conditions of an expired CBA with 1,136 employees. About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 protection on Feb. 17, 2009 (Bankr. D. N.J. Lead Case No. 09-13654). The Company tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP served as the Company's auditor and accountant and Lazard Freres & Co. LLC was the financial advisor. Garden City Group was the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of Dec. 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D.N.J. Case No. 04-46898 through 04-46925). Trump Hotels obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. VERSO CORP: Gets Nod to Tap $550 Million in Bankruptcy Financing ---------------------------------------------------------------- Matt Chiappardi at Bankruptcy Law360 reported that a Delaware bankruptcy judge gave paper maker Verso Corp. the go-ahead on Jan. 27, 2016, to access roughly $550 million of its up to $775 million postpetition financing package as the company aims to restructure in about six months with a $2.4 billion debt-for-equity swap with creditors. During a hearing in Wilmington, U.S. Bankruptcy Judge Kevin Gross gave interim approval for a debtor-in-possession financing package put up by series of creditors and administered by several entities including Barclays Bank PLC, BMO Harris Bank NA and Citibank NA. About Verso Corporation Verso Corporation and 26 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10163 to 16-10189, respectively) on Jan. 26, 2016. The petitions were signed by David Paterson as president and chief executive officer. Verso Corporation claims to be the leading North American producer of coated papers, which are used primarily in magazines, catalogs, high-end advertising brochures and annual reports, among other media and marketing publications. The Debtors employ approximately 5,200 personnel. The Debtors disclosed total assets of $2.9 billion and total debts of $3.87 million. The Debtors have engaged O'Melveny & Myers LLP as general counsel, Paul, Weiss, Rifkind, Wharton & Garrison LLP as corporate counsel, Richards, Layton & Finger, P.A. as Delaware counsel, PJT Partners L.P. as investment banker, Alvarez & Marsal North America, LLC as financial advisor and Prime Clerk LLC as claims and noticing agent. VIGGLE INC: Secures $1.5 Million Financing From Sillerman --------------------------------------------------------- Sillerman Investment Company VI LLC, an affiliate of Robert F.X. Sillerman, the executive chairman and chief executive officer of Viggle Inc., on Jan. 27, 2016, entered into a secured revolving loan agreement with the Company and its subsidiaries, wetpaint.com, Inc. and Choose Digital Inc., pursuant to which the Company can borrow up to $1,500,000 (of which $450,000 has been advanced) . The Secured Revolving Loan bears interest at the rate of 12% per annum. In connection with the Secured Revolving Loan, the Company and the Subsidiaries have entered into a Security Agreement with SIC VI, under which the Company and the Subsidiaries have granted SIC VI a continuing security interest in all assets of the Company and the Subsidiaries, with the exception of the Company's interest in DraftDay Gaming Group, Inc. The Company intends to use the proceeds from the Secured Revolving Loan to fund working capital requirements and for general corporate purposes in accordance with a budget to be agreed upon by SIC VI and the Company. Because Mr. Sillerman is a director, executive officer and greater than 10% stockholder of the Company, a majority of the Company's independent directors approved the transaction. 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 attributable to common stockholders of $78.9 million on $25.5 million of revenue for the year ended June 30, 2015, compared to a net loss attributable to common stockholders of $68.1 million on $18.0 million of revenues for the year ended June 30, 2014. As of Sept. 30, 2015, the Company had $74.0 million in total assets, $59.8 million in total liabilities, $12.04 million in series C convertible preferred stock and $2.10 million in total stockholders' equity. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2015, citing that the Company has suffered recurring losses from operations and at June 30, 2015, has a deficiency in working capital that raise substantial doubt about its ability to continue as a going concern. VIVID SEATS: Moody's Assigns 'B3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned first-time corporate family and probability of default ratings ("CFR" and "PDR", respectively) of B3 and B3-PD, respectively, to Vivid Seats Ltd. Moody's also assigned B2 ratings to the proposed $20 million revolver and $240 million first lien term loan. The rating outlook is stable. The proceeds from the financing will be used by Vista Equity Partners Management LLC to help acquire 70% of Vivid Seats. RATINGS RATIONALE The B3 CFR reflects Vivid Seats' concentrated business profile, small scale relative to larger online ticket sellers with greater financial resources, and limited operating track record following several years of accelerated revenue and profit growth. In addition, Vivid Seats operates in an evolving online ticket exchange industry facing regulatory scrutiny (e.g., anti-scalping measures or price caps) and the potential that primary ticket issuers (e.g., artists, sports teams, and venues) may increasingly seek to capture a higher portion of the secondary market availability or the final ticket price, which could curb the volume of resale tickets. The rating is supported by Moody's expectation that Vivid Seats' initial leverage will be mid 5 times adjusted debt to EBITDA upon closing (and about 5x by the end of 2016), which is moderate for the B3 rating category. Moody's also expects Vivid Seats to generate about $30 million of free cash flow per year, some of which will be used to pay down debt with the rest used to invest in organic growth. The rating also considers Vivid Seats' solid market position in the online secondary ticket market, operating as the number three player behind, StubHub, owned by eBay, Inc., and Ticketmaster, owned by Live Nation Entertainment, Inc. Vivid Seats benefits from a diverse base of sellers, including season ticket holders and professional brokers who purchase tickets in bulk from primary issuers, and then use Vivid Seats' marketplace platform to resell tickets to consumers. While Vivid Seats' market share continues to grow rapidly, its competitors' greater financial resources, which includes the ability to subsidize pricing with other lines of business, or the entry of other large e-commerce providers could pressure pricing or increase marketing costs. The stable outlook reflects Moody's expectation that Vivid Seats will generate at least mid-single digit annual revenue and profit growth, decreasing leverage to below 5 times by the end of 2017. Growth should be supported by mid-single digit growth of the secondary ticketing industry. The ratings could be upgraded if the company continues to gain market share and grow profitability, concerns over adverse regulatory actions that could impact the resale of tickets diminish, and the company sustains free cash flow to debt of over 12%, and debt to EBITDA of about 4 times. Downward rating pressure could arise if adjusted debt to EBITDA exceeds 6.5 times, financial policies become more aggressive to fund dividend payments or acquisitions, liquidity deteriorates, (e.g. negative cash flow or decreasing covenant cushion), or adjusted operating margins decline to below 15%. The following first-time ratings/assessments were assigned: Corporate Family Rating -- B3 Probability of Default Rating -- B3-PD Senior Secured Revolving Credit Facility -- B2 (LGD3) Senior Secured First Lien Term Loan -- B2 (LGD3) The rating outlook is stable. XINERGY LTD: Chapter 11 Plan Confirmed by Judge ----------------------------------------------- Judge Paul M. Black has entered an order confirming the Amended Joint Chapter 11 Plan of Xinergy Ltd. and its subsidiaries. In seeking confirmation of the Plan, Xinergy averred that there is no doubt that the Plan is feasible, and noted that the Plan has not drawn any feasibility objections. The Plan restructures the Debtors' outstanding debt obligations and, through the exit facility provides the Debtors with the liquidity necessary to satisfy the conditions precedent to the Effective Date, fund distributions to creditors, and provide the Debtors with sufficient working capital to fund their ongoing operations. "The Plan satisfies the requirements for confirmation set forth in section 1129(a) of the Bankruptcy Code other than subsection (a)(8) with respect to Class 6," the judge held. The judge held that the Plan may be confirmed notwithstanding the Debtors' failure to satisfy Section 1129(a)(8) in connection with Class 6 as the Plan does not discriminate unfairly and is fair and equitable, as the Plan does not discriminate unfairly and is fair and equitable. Jeffrey L. Pirrung -- jeff.pirrung@americanlegalclaims.com -- managing director of American Legal Claim Services, LLC, the balloting agent, said in a declaration that all classes receiving distributions under the Plan have voted to accept the Plan. The 40 holders of senior secured note claims with total claims of $65.3 million (100% in amount and number) in Class 3, and 31 holders of general unsecured claims with total claims of $2.23 million (100% in amount and number) in Class 4 all voted in favor of the Plan. Under the Plan, holders of equity interests (Class 6) won't receive any distributions and were deemed to reject the Plan. Objections to Third Party Releases The United States Trustee has objected to the consensual "opt-out" mechanism for third party releases under the Plan, arguing that the Debtors have not yet demonstrated that the factors set forth in Behrmann v. National Heritage Foundation, 663 F.3d 704, 712–13 (4th Cir. 2011) have been satisfied. The Debtors submit that it is unnecessary to satisfy the Behrmann factors, but that that there is ample support for the Third Party Releases, including facts that satisfy a number of the Behrmann factors. As set forth in the Debtors' Plan, each holder of an impaired claim, regardless of whether such holder votes to accept or reject the Plan or does not vote at all, may elect to opt-out of the Third Party Releases. Among other reasons that justify the consensual third party releases in these circumstances, each of the released parties have provided substantial contributions to the Chapter 11 Cases and the Debtors' restructuring, without which a successful restructuring would not be possible. The Debtors noted that a similar provision was recently approved by Judge Phillips in the Patriot Coal bankruptcy case. See In re Patriot Coal Corp., No. 15-32450-KLP, Doc. Nos. 1579, 1615 (Bankr. E.D. Va. Oct. 7, 2015, Oct. 9, 2015). The Debtors also noted that no party that is actually subject to the consensual third party releases has objected to the Plan. Jon Nix, a Holder of Interests in Xinergy Ltd., joined in the Objection filed by the United States Trustee. The Debtors asked the Court to overrule the objection, noting that Mr. Nix is not a creditor, thus was not entitled to vote on the Plan, and is not subject to the Consensual Third Party Releases. Other Objections Sabra Investments, LP, has filed two objections: (x) the first raises objections related to the amount of property taxes owed by the Debtors under the mineral lease and the surface lease, and (y) the second appears to be asserting an application for an alleged administrative expense claim. The Debtors submit that they have no obligation under the Leases to pay the 2014 Taxes. The Debtors have an obligation under the Mineral Lease to pay to first-half 2015 Taxes, and the Debtors will pay the second-half 2015 Taxes as they become due in the ordinary course. The Debtors also have an obligation under the Surface Lease to pay the first-half 2015 Taxes. However, based on the termination and rejection of the Surface Lease, the Debtors have no obligation to pay the second-half 2015 Taxes. As to the second objection, the Debtors note that Article II of the Plan provides a process for resolving applications for administrative expenses claims. While the Debtors believe that Sabra's application is without merit, they will respond to this application in due course, in accordance with the process set forth in Article II of the Plan. The Internal Revenue Service filed an objection to the Plan but later obtained approval to withdraw its objection. A copy of the Debtors' Memorandum of Law in support of confirmation of the Plan is available for free at: http://bankrupt.com/misc/Xinergy_661_Memo_Plan_Conf.pdf A copy of the Findings of Fact, Conclusions of Law and Order Confirming the Debtors' Amended Joint Chapter 11 Plan is available for free at: http://bankrupt.com/misc/Xinergy_678_Plan_Conf_Order.pdf The Chapter 11 Plan The Debtors' Plan contemplates emergence from Chapter 11 with the businesses to continue to operate in virtually the same manner they operated prior to the Petition Date but with the debt scheme restructured and contemplates the parent corporation Xinergy Corp. will be reorganized into New Holdco and all equities, securities in Xinergy, Ltd., will be cancelled. The common stock in New Holdco will be distributed to holders of general unsecured claims, and holders of equity-based awards issued under the management incentive plan. A copy of the Amended Disclosure Statement filed Oct. 1, 2015, is available for free at: http://bankrupt.com/misc/Xinergy_454_1st_Am_DS.pdf A copy of the Plan Supplement filed Jan. 14, 2016, is available for free at: http://bankrupt.com/misc/Xinergy_628_Plan_Supplement.pdf Counsel to the Debtors: Tyler P. Brown, Esq. Henry P. (Toby) Long, III, Esq. Justin F. Paget, Esq. HUNTON & WILLIAMS LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 Telephone: (804) 788-8200 Facsimile: (804) 788-8218 E-mail: tpbrown@hunton.com hlong@hunton.com jpaget@hunton.com About Xinergy Ltd. Xinergy is a U.S. producer of metallurgical and thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of West Virginia and Virginia. Xinergy's operations principally include two active mining complexes known as South Fork and Raven Crest located in Greenbrier and Boone Counties, West Virginia. Xinergy also leases or owns the mineral rights to properties located in Fayette, Nicholas and Greenbrier Counties, West Virginia and Wise County, Virginia. Collectively, Xinergy leases or owns mineral rights to approximately 72,000 acres with proven and probable coal reserves of approximately 77 million tons and additional estimated reserves of 40 million tons. Xinergy Ltd. and 25 subsidiaries commenced Chapter 11 bankruptcy cases (Bankr. W.D. Va. Lead Case No. 15-70444) on April 6, 2015. The cases have been assigned to Judge Paul M. Black. The cases are being jointly administered for procedural purposes. Xinergy Ltd. disclosed $36,968,445 in assets and $215,000,000 in liabilities as of the Chapter 11 filing. The Debtors tapped Hunton & Williams LLP as attorneys; Global Hunter Securities, as financial advisor, and American Legal Claims Services, LLC as claims, noticing and balloting agent. The U.S. Trustee appointed a two-member official committee of unsecured creditors. The Committee tapped to retain McGuireWoods LLP as lead counsel, and Whiteford, Taylor & Preston, LLP as its local counsel. The Informal Prepetition Noteholder Committee and DIP Lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison. ZEST HOLDINGS: S&P Assigns 'B' Rating on $50MM 1st Lien Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level ratings to Zest Holdings LLC's proposed issuance of $50 million first-lien loan. S&P assigned a recovery rating of '3' to these notes, indicating our expectation for meaningful recovery (50% to 70%; high end of the range) on these obligations in the event of a payment default. S&P expects the company to use proceeds to acquire Danville Materials LLC and to cover associated fees. S&P's 'B' corporate credit rating on Zest reflects S&P's assessment of the company's business risk as weak and the financial risk profile as highly leveraged. The outlook is stable. The assessment of a weak business risk profile reflects significant product concentration (namely, its Locator product offering), which has a patent expiring in 2018, the elective nature of procedures incorporating the Locator product, and a relatively small addressable market. S&P's business risk assessment also incorporates the company's leading position in removable overdenture attachment systems, high loyalty among dental practitioners, low manufacturing costs, and the low percentage of overall cost in the dental procedure, all leading to very strong EBITDA margins. The highly leveraged financial risk profile reflects adjusted debt leverage of about 5.5x to 6.0x pro forma for the acquisition. RATINGS LIST Zest Holdings LLC Corporate Credit Rating B/Stable/-- New Rating Zest Holdings LLC Senior Secured $50 Mil. First-Lien B Recovery Rating 3H [*] 4th Circuit Says Legal Fees Trumped by $1 Million Tax Claim --------------------------------------------------------------- Hannah Sheehan at Bankruptcy Law360 reported that the Fourth Circuit on Jan. 26, 2016, denied a law firm's bid for fees it charged for managing a North Carolina man's bankruptcy, saying that current tax law doesn't permit its $200,000 bill to take precedence over a $1 million tax claim from the Internal Revenue Service. A three-judge panel rejected Stubbs & Perdue PA's arguments that a prior version the Bankruptcy Code, which predates the Bankruptcy Technical Corrections Act of 2010, should govern the law firm's suit over fees it billed for managing the estate of Henry. [*] 9th Circ. Says Absolute Priority Applies to All Chapter 11s --------------------------------------------------------------- Carmen Germaine at Bankruptcy Law360 reported that in an "arcane but important question of first impression," the Ninth Circuit ruled on Jan. 28, 2016, that the absolute priority rule still applies to individual Chapter 11 reorganizations after the Bankruptcy Code was amended in 2005, overruling a previous decision from the circuit's Bankruptcy Appellate Panel. A three-judge panel affirmed that the absolute priority rule, which requires the Debtors to pay dissenting creditors in full before retaining any property, still applies to individual Chapter 11 reorganizations after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. [*] Bankruptcy Filings Drop 10% in Calendar Year 2015 ----------------------------------------------------- During the 12-month period ending December 31, 2015, 844,495 bankruptcy cases were filed in federal bankruptcy courts, down from the 936,795 bankruptcy cases filed in calendar year 2014 -- a 9.9% drop in filings. This is the lowest number of bankruptcy filings for any 12-month period since 2007, and the fifth consecutive calendar year that filings have fallen. According to data from the Administrative Office of the U.S. Courts, there were 7,241 Chapter 11 filings for 2015, slightly up from 7,234 for 2014; but down from 8,980 for 2013; 10,361 in 2012; and 11,529 in 2011. Business bankruptcies were down 24,735 in 2015 from 26,983 in 2014; 33,212 in 2013; 40,075 in 2012; and 47,806 in 2011. [*] Fitch: Stronger Recoveries Amid Industrial Bankruptcies ----------------------------------------------------------- Industrial- and manufacturing-sector bankruptcies are characterized by high valuation multiples relative to the cross-sector corporate average, according to Fitch Ratings' latest bankruptcy enterprise valuation and recovery case study report. The median multiple of reorganization enterprise value/forward EBITDA forecast for industrial and manufacturing companies was 6.3x, modestly higher than the 6.0x cross-sector corporate average. Among Fitch's sample, 39% of industrial/manufacturing cases reorganized at a multiple above 7x. First-lien recoveries among industrial/manufacturing bankruptcies were also significant, averaging 82% of par value. In addition, 68% of first-lien debt claims received distributions of 91% or more of par value. "The industrial and manufacturing sector is generally comprised of a diverse set of companies with a variety of business risks and commodity exposures that led to bankruptcies for idiosyncratic reasons," said Sharon Bonelli, Senior Director, Leveraged Finance. Prominent bankruptcy drivers in Fitch's sample included flawed business models, production problems, accounting issues, high-cost raw material, market access issues, and downturn-induced declines in demand. More than 50% of Fitch's sample defaulted during the recessionary period 2008-2010. Many (85%) of these cases had assets of $1 billion or less and were unable to access new capital to sustain their highly leveraged capital structures during the downturn. [*] Hon. D. Michael Lynn Joins Shannon Gracey as Senior Counsel --------------------------------------------------------------- The Hon. D. Michael Lynn has joined Shannon, Gracey, Ratliff & Miller, LLP as senior counsel, after presiding over the U.S. Bankruptcy Court for the Northern District of Texas in Fort Worth for the past 14 years. "I've had Shannon Gracey attorneys in my courtroom for many years and I consider it a privilege to be associated with attorneys who are of the highest caliber and integrity," explained Judge Lynn. "I look forward to making a meaningful contribution to the firm." During his tenure on the bench, Judge Lynn oversaw the Chapter 11 cases of Mirant Corp., Pilgrim's Pride Corp. and the Texas Rangers, among many others. Prior to serving on the bench, Judge Lynn practiced as a bankruptcy attorney in the Dallas/Fort Worth area for nearly 30 years. He is the editor-in-chief of Bloomberg Law: Bankruptcy Treatise, has been a contributing author for Collier's various bankruptcy publications and a former columnist for Bloomberg Law. "Judge Lynn offers extensive expertise in bankruptcy law and tremendous judicial insight to our attorneys and clients" says Rich Lowe, Shannon Gracey's managing partner. "His reputation, immense integrity, compassion and strong dedication to justice, support the founding principles of Shannon Gracey. Judge Lynn will work closely with the members of our Bankruptcy Group and develop the firm's bankruptcy mediation practice." [*] LSI Increases to 7.9% in January 2016, Moody's Says ------------------------------------------------------- Moody's Liquidity Stress Index jumped to 7.9% in January 2016 from 6.8% in December 2015, reaching the index's highest level since December 2009 and marking the largest one-month gain since March 2009, as weakness persists in energy and spread modestly beyond commodity-based sectors, the rating agency says in its most recent edition of SGL Monitor Flash. While the energy sector continues to be the main driver of liquidity weakness, some companies in other sectors are beginning to facing liquidity challenges. The LSI excluding the oil and gas sector jumped to 4.5% in January, the highest since November 2010 and the latest sign that liquidity weakness is spreading modestly outside energy-related sectors. Six of the 10 downgrades to SGL-4 were outside of energy, although two affected suppliers to commodity companies, with GrafTech International Ltd. (B3 negative) and Fairmount Santrol (Caa1 negative) both lowered because of their exposure to the steel and oil and gas sectors, respectively. "Operating weakness and maturities coming due in early 2017 are straining the liquidity of companies of some low-rated companies," said John Puchalla, a Moody's Senior Vice President. "As borrowing rates rise and credit markets tighten, companies closer to the margin will find it challenging to cost-effectively refinance their upcoming debt maturities." The LSI for oil and gas increased to 21.4% in January from 19.6% in December, just slightly below its 24.5% recessionary peak in March 2009. Out of the four oil and gas companies lowered to SGL-4, Stone Energy Corp. (B3 review for downgrade) represented the biggest downgrade of two notches. Moody's forecasts the US speculative-grade default rate will climb to 4.4% in December this year from 3.2% in December 2015. [*] S&P Takes Actions on 20 Investment-Grade Exploration Companies ------------------------------------------------------------------ Standard & Poor's Ratings Services, on Feb. 2, 2016, said that it has taken rating actions on 20 investment-grade U.S. oil and gas exploration and production (E&P) companies after completing a review. The review followed the recent revision of S&P's hydrocarbon price. While oil prices deteriorated over the past 15 months, the U.S.-based investment-grade companies S&P rates had been largely immune to downgrades. However, given the magnitude of the recent reductions in S&P's price deck, most of the investment-grade companies were affected during this review. S&P expects that many of these companies will continue to lower capital spending and focus on efficiencies and drilling core properties. However, these actions, for the most part, are insufficient to stem the meaningful deterioration expected in credit measures over the next few years. DOWNGRADES Chevron Corp. Corporate Credit Rating Lowered To AA-/Stable/A-1+ From AA/Negative/A-1+ The downgrade reflects S&P's expectation that in the context of lower oil and gas prices and refining margins, the company's credit measures will be below S&P's expectations for the 'AA' rating over the next two years. S&P anticipates Chevron will significantly outspend internally generated cash flow to fund major project capital spending and dividends this year and generate little cash available for debt reduction over the following two years. S&P notes that the company has significantly more debt than in the last cyclical downturn while oil and gas production are at similar levels. The stable outlook reflects S&P's expectation that credit measures will improve over the next three years assuming lower capital spending and higher commodity prices. EOG Resources Inc.: Corporate Credit Rating Lowered To BBB+/Stable/A-2 From A-/Stable/A-2 The downgrade reflects increased leverage following the reduction in S&P's oil and natural gas price assumptions, along with lower capital spending and a slight production decline in 2016. S&P now expects funds from operations (FFO)/debt to fall and remain below 45% over the next two years, which S&P views as too low for an 'A-' rating, given the company's strong business risk profile. The stable outlook reflects S&P's estimate that FFO/debt will approach 30% in 2016 and improve thereafter as commodity prices rise under S&P's price deck assumptions. S&P applies a one-notch uplift to the anchor for comparable rating analysis, given that EOG's leverage is lower than many of its 'BBB' rated peers. Apache Corp.: Corporate Credit Rating Lowered To BBB/Stable/A-2 From BBB+/Stable/A-2 The downgrade reflects increased leverage following the reduction in S&P's oil and natural gas price assumptions, along with lower capital expenditures and a modest year-over-year production decline in 2016. S&P now expects FFO/debt to fall and remain below 30% over the next two years, levels S&P views as too low for a 'BBB+' rating, given the company's strong business risk profile. The stable outlook reflects S&P's estimate that FFO/debt will approach 20% in 2016 and improve thereafter as commodity prices rise under S&P's price deck assumptions. Devon Energy Corp.: Corporate Credit Rating Lowered To BBB/Stable/A-2 From BBB+/Negative/A-2 The downgrade reflects S&P's expectation that in the context of lower oil and gas prices, the company's credit measures will be below S&P's expectations for the 'BBB' rating through 2018. Devon outlined steps to reduce debt following acquisitions announced in December 2015, including selling assets. However, S&P anticipates that the company will outspend internally generated cash flow over the next two years without further limiting capital spending or reducing dividends. The stable outlook reflects S&P's expectation that Devon's credit measures will improve over the next three years under our rising commodity price assumptions. Hess Corp.: Corporate Credit Rating Lowered To BBB-/Stable/-- From BBB/Stable/-- The downgrade reflects S&P's expectation that in the context of lower oil and gas prices, the company's credit measures will be below S&P's expectations for the 'BBB' rating over the next two years. Hess enters 2016 with ample liquidity, including $2.7 billion in cash and has sharply curtailed capital spending. However, S&P forecasts that the company will outspend internally generated cash flow to fund capital spending and dividends through 2018. The stable outlook reflects S&P's expectation that credit measures will improve over the forecast period. S&P notes that proceeds from assets sales, operating cost reductions, or other sources of funding could provide an opportunity to improve the company's balance sheet. Marathon Oil Corp. Corporate Credit Rating Lowered To BBB-/Stable/A-3 From BBB/Stable/A-2 The downgrade reflects S&P's expectation that in the context of lower oil and gas prices, Marathon's credit measures will be consistently below S&P's expectations for the 'BBB' rating. Marathon enters 2016 with ample liquidity, including $1.2 billion in cash and has substantially reduced capital spending and dividends. S&P estimates that the company will outspend generated cash flow to fund capital spending and dividends this year and that cash flow coverage of debt has declined meaningfully. The stable outlook reflects S&P's projections that credit measures will improve over the next two years. S&P notes that proceeds from assets sales or other external sources of funding could provide an opportunity to improve the company's balance sheet. Murphy Oil Corp.: Corporate Credit Rating Lowered To BBB-/Stable /-- From BBB/Negative/-- The downgrade reflects S&P's expectation of increased leverage and worsening credit measures following the reduction in its oil and natural gas price deck assumptions. Despite the company's recent reduction in planned capital spending for 2016, S&P expects debt to EBITDAX to remain above 2x and FFO to debt below 30%, which S&P views as too high for a 'BBB' rating, given the company's satisfactory business risk profile. The stable outlook reflects S&P's expectation that debt to EBITDAX will remain below 4x under its base case assumptions. Continental Resources Inc.: Corporate Credit Rating Lowered To BB+/Stable/-- From BBB-/Stable/--; Recovery Rating '3' (high end of the range) assigned. The downgrade reflects S&P's expectation of increased leverage and worsening credit measures following the reduction in S&P's oil and natural gas price deck assumptions. Despite Continental's reduction in capital spending for 2016, S&P expects FFO to debt to fall below 20% and debt to EBITDAX to exceed 4x over the next two years. S&P views these credit measures as too high for a 'BBB-' rating, given what S&P views the company's business risk profile as satisfactory. S&P now views Continental Resources' financial profile as aggressive. S&P also assigned a '3' (high end of the range) recovery rating to the company's senior unsecured notes. Hunt Oil Co.: Corporate Credit Rating Lowered To BB+/Negative/-- From BBB-/Negative/-- The downgrade reflects S&P's expectation that in the context of lower oil and gas prices, Hunt Oil's credit measures will be below S&P's expectations for the 'BBB-' rating over the next two years. In addition, the company is challenged by continued suspension of liquefied natural gas (LNG) shipments from Yemen due to ongoing fighting in the country. Hunt has an interest in the Yemen gas liquefaction plant and receives substantial distributions when the project is operating. The negative outlook reflects the likelihood that S&P will lower the rating if it do not expect LNG shipments from Yemen to resume by end of third quarter of 2016, or other factors occur that result in weaker than currently anticipated credit measures. Southwestern Energy Co.: Corporate Credit Rating Lowered To BB+/Negative/B From BBB-/Stable/A-3; Recovery Rating '3' (low end of the range) assigned. The downgrade reflects S&P's expectation of increased leverage and worsening credit measures following the reduction in S&P's oil and natural gas price deck assumptions, and incorporates S&P's assumption of significantly reduced capital spending and a moderate production decline in 2016. S&P now expects FFO to debt to fall and remain below 20% over the next two years, which S&P views as too low for a 'BBB-' rating, given that S&P views the company's business risk profile as satisfactory. S&P now views Southwestern Energy's financial profile as aggressive. S&P also assigned a '3' (low end of the range) recovery rating to the company's senior unsecured debt. The negative outlook reflects the potential for a downgrade if S&P no longer expects FFO/debt to improve to above 20% in 2018. LONG-TERM CORPORATE CREDIT RATING PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS; SHORT-TERM RATING AFFIRMED Exxon Mobil Corp.: 'AAA' Corporate Credit Rating Placed On CreditWatch With Negative Implications; 'A-1+' Short-Term Rating Affirmed The CreditWatch placement reflects the expectation that credit measures will be weak for the ratings through 2018 under S&P's price assumptions. S& will assess management's financial policies and strategies for mitigating the potential impact of the downturn, as well as review the company's 2015 financial results and the implications for credit quality. S&P currently expects to resolve its review within 90 days. S&P currently anticipates that if it lowers ratings, it would not lower them by more than one notch. RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS ConocoPhillips: 'A' Long-Term And 'A-1' Short-Term Corporate Credit Ratings Placed On CreditWatch With Negative Implications The negative CreditWatch placement reflects the potential that S&P could lower ratings over the next 90 days pending a review of expected 2016-2018 financial results, and ConocoPhillips' ability to fund expected negative free cash flow without materially increasing debt leverage. S&P currently expects to resolve its review within 90 days. S&P intends to review the company's ability to achieve expected cost savings and substantial asset sales and its ability to lower capital spending without significantly affecting production levels. Newfield Exploration Co.: 'BBB-' Corporate Credit Rating Placed On CreditWatch With Negative Implications The CreditWatch placement reflects S&P's expectation that credit measures will be weak for the current rating over the next one to two years. S&P will assess management's financial policies and strategies for mitigating the potential impact of lower commodity prices over the next several weeks, as well as review the company's 2015 financial results and the implications for credit quality. S&P expects to resolve the CreditWatch placement within 90 days. S&P currently anticipates that if it lowers the ratings, S&P would not lower them by more than one notch. RATINGS AFFIRMED; OUTLOOK REVISED Anadarko Petroleum Corp.: 'BBB' Corporate Credit And 'A-2' Short-Term Ratings Affirmed; Outlook Revised To Negative From Stable; The outlook revision reflects increased leverage following the reduction in S&P's oil and natural gas price assumptions, along with lower capital spending and a modest year-over-year production decline in 2016. The negative outlook reflects S&P's estimate that FFO/debt could fall below 20% and debt/EBITDAX could exceed 4x for a sustained period if the company does not complete additional noncore assets sales, as S&P currently anticipates. National Fuel Gas Co. (NFG): 'BBB' Corporate Credit Rating And 'A-2' Short-Term Ratings Affirmed; Outlook Revised to Negative From Stable. The negative outlook reflects S&P's expectation that the company's credit measures will be weak for the ratings over the next two years because of lower oil and gas prices. NFG has curtailed E&P spending, but S&P expects spending and dividends to exceeds internally generated cash flow over the next two years, in part, due to investment in a pipeline expansion. S&P forecasts that the company's credit measures will return to acceptable levels for the rating in 2018 due to higher expected commodity prices, increased E&P production, and lower capital spending. Noble Energy Inc.: 'BBB' Corporate Credit Rating Affirmed; Outlook Revised To Negative From Stable S&P revised its rating outlook to negative from stable, reflecting its expectation that credit measures will remain weak for the ratings over the next one to two years. Although S&P expects the company to remain cash flow neutral for the year under its revised price assumptions, S&P expects FFO/debt to remain below 30% in 2016 and 2017, and adjusted debt/EBITDA to rise slightly above 3x in 2017, but S&P believes both measures will improve in 2018. S&P could lower the rating if it projects that the company will sustain adjusted debt/EBITDA above 3x for a prolonged period. RATINGS AFFIRMED Occidental Petroleum Corp.: 'A' Corporate Credit Rating And 'A-1' Short-Term Rating Affirmed; Outlook Stable S&P has affirmed the ratings on Occidental, reflecting its expectation that the company will continue to maintain conservative financial policies such that FFO/debt will average above 60% through 2018, albeit modestly below 60% in 2016. S&P's expectations include the receipt of about $1 billion from Ecuador in 2016 for the recent settlement awarded by the International Centre for Settlement of Investment Disputes, which is a key support underlying S&P's expectations. Cash flows are supported by the start of the Al Hosn gas project in the United Arab Emirates and the low decline rate of the company's Permian enhanced oil recovery operations. EQT Corp.: 'BBB' Corporate Credit Rating Affirmed; Outlook Stable S&P has affirmed the ratings on EQT, reflecting S&P's expectation that it will continue to maintain conservative financial policies, such that FFO/debt will not fall below 45% for a sustained period. EQT should continue to benefit from its midstream operations that allow it to capture more favorable pricing to help buffer the negative price differentials typical of Marcellus shale producers. Cimarex Energy Co.: 'BBB-' Corporate Credit Rating Affirmed; Outlook Stable Although credit measures should weaken for Cimarex Energy Co. in 2016 under S&P's revised price assumptions, it expects them to remain adequate for the rating. S&P projects FFO/debt above 40% in 2016 and commit the majority of its capital in the Permian and the Mid-Continent region, albeit at reduced levels in response to the current hydrocarbon prices. The stable outlook reflects S&P's view that the company's leverage will improve in 2017 and liquidity will remain strong. Pioneer Natural Resources Co.: 'BBB-' Corporate Credit Rating Affirmed; Outlook Stable The affirmation reflects S&P's view that Pioneer will maintain FFO/debt above 45% over the next two years, as it continues to invest and grow production in the Permian Basin. S&P's estimates incorporate the reduction in our oil and natural gas price assumptions, a modest year-over-year increase in capital spending, about 10% production growth in 2016, and the company's recent $1.4 billion equity offering. RATINGS LIST Downgraded; Outlook Action To From Chevron Corp. Corporate credit rating AA-/Stable/A-1+ AA/Negative/A-1+ EOG Resources Inc. Corporate credit rating BBB+/Stable/A-2 A-/Stable/A-2 Apache Corp. Corporate credit rating BBB/Stable/A-2 BBB+/Stable/A-2 Devon Energy Corp. Corporate credit rating BBB/Stable/A-2 BBB+/Negative/A-2 Hess Corp. Corporate credit rating BBB-/Stable/-- BBB/Stable/-- Marathon Oil Corp. Corporate credit rating BBB-/Stable/A-3 BBB/Stable/A-2 Murphy Oil Corp. Corporate credit rating BBB-/Stable/-- BBB/Negative/-- Continental Resources Inc. Corporate credit rating BB+/Stable/-- BBB-/Stable/-- Hunt Oil Co. Corporate credit rating BB+/Negative/-- BBB-/Negative/-- Southwestern Energy Co. Corporate credit rating BB+/Negative/B BBB-/Stable/A-3 Long-Term Corporate Credit Rating Placed On CreditWatch With Negative Implications; Short-Term Rating Affirmed To From Exxon Mobil Corp. Corporate credit rating AAA/Watch Neg/A-1+ AAA/Negative/A-1+ Ratings Placed On CreditWatch With Negative Implications To From ConocoPhillips Corporate Credit Rating A/Watch Neg/A-1 A/Negative/A-1 Newfield Exploration Co. Corporate credit rating BBB-/Watch Neg/-- BBB-/Stable/-- Ratings Affirmed; Outlook Revised To From Anadarko Petroleum Corp. Corporate credit rating BBB/Negative/A-2 BBB/Stable/A-2 National Fuel Gas Co. Corporate credit rating BBB/Negative/A-2 BBB/Stable/A-2 Noble Energy Inc. Corporate credit rating BBB/Negative/-- BBB/Stable/-- Ratings Affirmed; Outlook Unchanged Occidental Petroleum Corp. Corporate credit rating A/Stable/A-1 EQT Corp. Corporate credit rating BBB/Stable/-- Cimarex Energy Co. Corporate credit rating BBB-/Stable/-- Pioneer Natural Resources Co. Corporate credit rating BBB-/Stable/-- [^] BOOK REVIEW: Landmarks in Medicine - Laity Lectures ------------------------------------------------------- Introduction by James Alexander Miller, M.D. Publisher: Beard Books Softcover: 355 pages List Price: $34.95 Review by Henry Berry Order your own personal copy today at http://bit.ly/1sTKOm6 As the subtitle points out, the seven lectures reproduced in this collection are meant especially for general readers with an interest in medicine, including its history and the cultural context it works within. James Miller, president of the New York Academy of Medicine which sponsored the lectures, states in his brief "Introduction" that this leading medical organization "has long recognized as an obligation the interpretation of the progress of medical knowledge to the public." The lectures collected here succeed admirably in fulfilling this obligation. The authors are all doctors, most specialists in different areas of medicine. Lewis Gregory Cole, whose lecture is "X-ray Within the Memory of Man," is a consulting roentgenologist at New York's Fifth Avenue Hospital. Harrison Stanford Martland is a professor of forensic medicine at New York University College of Medicine. Many readers will undoubtedly find his lecture titled "Dr. Watson and Mr. Sherlock Holmes" the most engrossing one. Other doctor- authors are more involved in academic areas of medicine and teaching. Reginald Burbank is the chairman of the Section of Historical and Cultural Medicine at the New York Academy of Medicine. He lectured on "Medicine and the Progress of Civilization." Raymond Pearl, whose selection is "The Search for Longevity," is a professor of biology at Johns Hopkins University. The authors' high professional standing and involvement in specialized areas do not get in the way of their aim to speak to a general audience. They are all skilled writers and effective communicators. As the titles of some of the lectures noted in the previous paragraph indicate, the seven selections of "Landmarks in Medicine" focus on the human-interest side of medicine rather than the scientific or technological. Even the two with titles which seem to suggest concern with technical aspects of medicine show when read to take up the human-interest nature of these topics. "The Meaning of Medical Research", by Dr. Alfred E. Cohn of the Rockefeller Institute for Medical Research, is not so much about methods, techniques, and equipment of medical research, but is mostly about the interinvolvement of medical research, the perennial concern of individuals with keeping and recovering good health, and social concerns and pressures of the day. "The meaning of medical research must regard these various social and personal aspects," Cohn writes. In this essay, the doctor does answer the questions of what is studied in medical research and how it is studied. And he answers the related question of who does the research. But his discussion of these questions leads to the final and most significant question "for what reason does the study take place?" His answer is "to understand the mechanisms at play and to be concerned with their alleviation and cure." By "mechanisms," Cohn means the natural--i. e., biological--causes of disease and illness. The lay person may take it for granted that medical research is always principally concerned with finding cures for medical problems. But as Cohn goes into in part of his lecture, competition for government grants or professional or public notoriety, the lure of novel experimentation, or research mainly to justify a university or government agency can, and often do, distract medical researchers and their associates from what Cohn specifies should be the constant purpose of medical research. Such purpose gives medicine meaning to humankind. The second lecture with a title sounding as if it might be about a technical feature of medicine, "X-ray Within the Memory of Man," is a historical perspective on the beginnings of the use of x-ray in medicine. Its author Lewis Cole was a pioneer in the development of x-rays in the late 1800s and early1900s. He mostly talks about the development of x-ray within his memory. In doing so, he also covers the work of other pioneers, notably William Konrad Roentgen and Thomas Edison. Roentgen was a "pure scientist" who discovered x-rays almost by accident and at first resented the application of his discovery to practical uses such as medical diagnosis. Edison, the prodigious inventor who was interested only in the practical application of scientific discoveries, and his co-worker Clarence Dally enthusiastically investigated the practical possibilities of the discoveries in the new field of radiation. Dally became so committed to his work in this field that he shortly developed an illness and died. At the time, no on knew about the dangers of prolonged exposure to x-rays. But sensing some connection between his co-worker's untimely death and his work with x-rays, Edison stopped his own investigations. Cole himself became involved in work with x-rays during his internship at Roosevelt Hospital in New York City in 1898 and 1899. His contribution to this important field was in the area of interpretation of what were at the time primitive x-rays and diagnosis of ailments such as tuberculosis and kidney stones. Cole writes in such a way that the reader feels she or he is right with him in the steps he makes in improving the use of x-rays. He adds drama and human interest to the origins of this important medical technology. The lecture "Dr. Watson and Mr. Sherlock Holmes" uses the popular mystery stories of Arthur Conan Doyle to explore the role of medicine in solving crimes, particularly murder. In some cases, medical tests are required to figure out if a crime was even committed. This lecture in particular demonstrates the fundamental role played by medicine in nearly all major areas of society throughout history. The seven collected lectures have broad appeal. All of them are informative and educational in an engaging way. Each is on an always interesting topic taken up by a professional in the field of medicine obviously skilled in communicating to the general reader. The authors seem almost mind readers in picking out the most fascinating aspects of their subjects which will appeal to the lay readers who are their intended audience. While meant mainly for lay persons, the lectures will appeal as well to doctors, nurses, and other professionals in the field of medicine for putting their work in a broader social context and bringing more clearly to mind the interests, as well as the stake, of the public in medicine. ********* 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 2016. 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 ***