/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/160216.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 16, 2016, Vol. 20, No. 47 Headlines A.M. CASTLE: Moody's Lowers CFR to Ca, Outlook Stable ADVANTAGE AVIATION: Voluntary Chapter 11 Case Summary AFFIRMATIVE INSURANCE: Needs Until April 11 to File Plan ALPHA NATURAL: Steelhead et al. No Longer Hold Equity Stake ALTA MESA: S&P Lowers CCR to 'CC' on Potential Debt Exchange Offer AMERICAN APPAREL: Cancels Registration of Securities AMERICAN AXLE: Posts $236 Million Net Income for 2015 ANDALAY SOLAR: Southridge May Resell 250 Million Common Shares ARCH COAL: $5-Mil. Payment to Critical Vendors Approved ARCH COAL: Applies for Protections of Bankruptcy Code ARCH COAL: Schneider Capital No Longer Holds Equity Stake ASPEN GROUP: Sophrosyne Capital Reports 1.3% Stake as of Feb. 12 AVAYA INC: Moody's Lowers CFR to Caa1, Outlook Negative BERRY PLASTICS: Conference Call Held to Discuss Quarter Results BON-TON STORES: DW Partners Reports 2.9% Stake as of Dec. 31 CANADIAN OIL: Moody's Lowers Sr. Unsecured Rating to Ba3 CCNG ENERGY: Can Tap Graves Dougherty to Handle Corporate Matters CLEAR CREEK RETIREMENT: Case Summary & 20 Top Unsecured Creditors CTI BIOPHARMA: Baxalta Reports 14.8% Stake as of Dec. 31 CUMULUS MEDIA: Canyon Capital Reports 2.2% Stake as of Dec. 31 CURO HEALTH: Moody's Raises Sr. Secured Ratings to 'B1' DANDRIT BIOTECH: Reports $422,000 Net Loss for Second Quarter DESIGNLINE CORP: Eagle Claim Objection, Glosson Suit Consolidated DOW CORNING: Has $291M Reserve for Breast Implant Litigation DOW CORNING: Has Up to $341M Liability to Commercial Creditors EDWARD C. RICHERME: Bid to Dismiss EA's Suit Denied EXELIXIS INC: FMR LLC Reports 14.9% Stake as of Dec. 31 EXELIXIS INC: T. Rowe Price Reports 11% Stake as of Dec. 31 FORESIGHT ENERGY: Moody's Lowers CFR to Caa1, Outlook Negative FPMC SAN ANTONIO: Finds Buyer But Lender Declares Default FREEDOM COMMUNICATIONS: Wins Nod to Hold March 16 Auction FREEPORT-MCMORAN INC: S&P Lowers CCR to BB, Altered Outlook to Neg GOT ROCK: Voluntary Chapter 11 Case Summary GRASS VALLEY: Green Valley's Estimation Bid Remanded to Bankr. Ct. GT ADVANCED: Has Deal Reducing Manz Admin. Claim to $375K HAGGEN HOLDINGS: Auction for 'Core' Stores Moved to Feb. 22 HEALTHWAREHOUSE.COM: Karen Singer Reports 6.2% Stake as of Dec. 31 HECLA MINING: S&P Lowers Rating to 'B-' on Weaker Credit Measures HEPAR BIOSCIENCE: Amends Schedule of Secured Creditors HEXION INC: S&P Revises Outlook to Negative on Refinance Risk HORSEHEAD HOLDING: Court Recognizes Case as Foreign Proceeding HTH LEARNING: Fitch Affirms 'BB+' Rating on 2008A/B Revenue Bonds INTERPARK INVESTORS: Case Summary & 20 Top Unsecured Creditors JAMES RIVER COAL: BNP Paribas Unit Owns 6.4% Equity Stake JEVIC TRANSPORTATION: Truckers Tell High Court Case Has High Stakes KRONOS WORLDWIDE: S&P Lowers CCR to 'B', Outlook Stable LAZARD GROUP: Moody's Puts Ba1 CFR on Review for Upgrade LEVEL 3: Southeastern Asset Reports 9.2% Stake as of Feb. 12 LOUISIANA OILFIELD: Court Refuses to Lift Stay for Injured Workers LUIS BURGOS: Goldsmith, US Trustee Deadline to File Briefs Extended LUVU BRANDS: Posts $224,000 Net Income for Second Quarter LUZERNE COUNTY: S&P Affirms 'BB+' GO Debt Rating, Off CreditWatch MAGNUM HUNTER: Continuum Wants Plan Outline to Discuss Its Claims MAGNUM HUNTER: Disclosure Statement Hearing Adjourned to Feb. 19 MAGNUM HUNTER: Kanbar Wants Plan Outline to Discuss Joint Ventures MAGNUM HUNTER: Wins Nod to Assume Restructuring Support Agreement MALIBU LIGHTING: CGPC Buys NCOC Pet Bedding Business for $61MM MALIBU LIGHTING: Expeditors Asks for Relief From Stay MALIBU LIGHTING: Has Until May 4 to Decide on Unexpired Leases MARSHALL MEDICAL: Fitch Affirms 'BB+' Rating on $20MM 2004B Bonds MATADOR RESOURCES: S&P Raises Rating on Sr. Unsecured Debt to 'B' MERRIMACK PHARMACEUTICALS: Board OKs $546K Cash Bonus for Execs. MGM RESORTS: Capital World Holds 4.3% Stake as of Dec. 31 MID-STATES SUPPLY: Meeting of Creditors Set for March 18 MID-STATES SUPPLY: U.S. Trustee Forms Seven-Member Committee MORGANS HOTEL: Ameriprise Financial Holds 2.7% Stake as of Dec. 31 MORNINGSTAR MARKETPLACE: Plan Withdrawal Approved by Court MOTORS LIQUIDATION: Has $613-Mil. Net Assets in Liquidation MURRAY ENERGY: Moody's Lowers CFR to Ca, Outlook Stable NEW GULF RESOURCES: Can Hire Baker Botts as Bankruptcy Counsel NGL ENERGY: Moody's Withdraws B2 Rating on $300MM Sr. Unsec. Notes NPC INT'L: Moody's Alters Outlook to Stable & Affirms B2 CFR OFFSHORE DRILLING: Fitch Affirms 'B+' IDRs, Off Negative Watch OFFSHORE DRILLING: S&P Lowers CCR to 'B+', Outlook Stable OFFSHORE GROUP: Files Fourth Plan Supplement OFFSHORE GROUP: Prepackaged Plan Has Feb. 10 Effective Date OFFSHORE GROUP: Su & F3 Capital Appeal Plan Confirmation Order OKKO HOMES: Seeking Offer for Assets; March 14 Bid Deadline Set OUTER HARBOR: U.S. Trustee to Hold 341 Meeting on March 9 OUTER HARBOR: US Trustee Unable to Form Creditors' Committee OVERLAND PARK: Moody's Affirms Ba1 Rating on $41MM Revenue Bonds PARAGON OFFSHORE: Case Summary & 30 Largest Unsecured Creditors PARAGON OFFSHORE: Files for Chapter 11 With Plan PARAGON OFFSHORE: Files Pre-Arranged Reorganization Plan PARAGON OFFSHORE: S&P Lowers CCR to 'D' on Ch. 11 Filing Plan PARAGON OFFSHORE: Seeking Joint Administration of Cases PARAGON OFFSHORE: Targeting June 10 Confirmation of Plan PARAGON OFFSHORE: Wants to Use Secured Parties' Cash Collateral PARAMOUNT SCAFFOLD: Loses Summary Judgment Bid in ERISA Suit PAYLESS INC: Moody's Lowers CFR to B3, Outlook Altered to Negative PEABODY ENERGY: Environmental Groups Balk at Self-Bonding PEABODY ENERGY: Fitch Lowers LT IDR to CC & 2nd Lien Notes to C PICO HOLDINGS: Central Square Protests Director Replacements PITTSBURGH CORNING: Bankruptcy Plan to Take Effect in April PLENARY PROPERTIES: S&P Affirms 'BB' Subordinated Debt Rating PROSPECT HOLDING: Moody's Lowers CFR to Caa2, Outlook Stable PUERTO DEL REY: Court Sides with Marina PDR in Ex-Worker's Suit PYKKONEN CAPITAL: Files Chapter 11 to Avoid Foreclosure QUANTUM CORP: FMR LLC Reports 10% Stake as of Feb. 12 QUICKSILVER RESOURCES: Fortress, Mount Kellett No Longer Own Shares RADIOSHACK CORP: G1, Susquehanna No Longer Own Shares REX ENERGY: S&P Lowers CCR to CC on Potential Debt Exchange Offer SALON MEDIA: Incurs $251,000 Net Loss in Third Quarter SAPPHIRE DEVELOPMENT: Dismissal of Bankruptcy Case Affirmed SEAPORT AIRLINES: Files Chapter 11 Petition SHERIDAN FUND I: S&P Raises LT ICRs to CCC-, Outlook Negative SHERIDAN FUND II: S&P Raises LT ICRs to 'CCC-', Outlook Negative SHERIDAN I: Moody's Changes PDR to Caa3-PD/LD SHERSON GROUP: Court Approves Final Report, Closes Chapter 15 Case SOUTHERN MARINE: Involuntary Chapter 11 Case Summary STEPHEN D. MCCORMICK: 8th Cir. Dismisses Appeal from Atty Fee Order SUNDEVIL POWER: Gets Commitment for $45-Mil. DIP Facility SUNDEVIL POWER: Hires Garden City as Claims and Noticing Agent SUNDEVIL POWER: Proposes April 11, 2016 as General Claims Bar Date SUNDEVIL POWER: Seeks 16-Day Extension to File Schedules TAYLOR-WHARTON: $25M DIP Facility Has Final Approval TAYLOR-WHARTON: Domestic Assets Sold to Worthington for $33.3MM TAYLOR-WHARTON: Files Rule 2015.3 Report for Endurium, TWC TECK RESOURCES: S&P Lowers CCR to 'B+', Outlook Negative TERA GROUP: Auction of Assets Moved to March 3 THERAPEUTICSMD INC: FMR LLC Reports 14.9% Stake as of Dec. 31 THERAPEUTICSMD INC: T. Rowe Price Holds 5.8% Stake as of Dec. 31 TRANS ENERGY: Clarence Smith Reports 9.8% Stake as of Dec. 31 TRANSCONTINENTAL REFRIG: Pres. Properly Adjudicated as Ch 7 Debtor UNITED AMERICA: Owner Loses Summary Judgment Bid in Tax Suit VANGUARD NATURAL: Moody's Changes PDR to 'B3-PD/LD' VERMILLION INC: Adopts Restructuring Plan to Streamline Operations VERMILLION INC: Terminates Laura Miller as SVP - Sales VISUALANT INC: AWM Investment Holds 9.2% Stake as of Dec. 31 WALTER ENERGY: Entered Into $50,000,000 DIP Facility from Citibank WALTER ENERGY: G1, Susquehanna Report 0.7% Equity Stake WESTMORELAND COAL: Boston Partners Holds 7% Stake as of Dec. 31 WET SEAL: Hudson Bay Holds 9.45% of Common Shares WORCESTER RE INVESTMENTS: Voluntary Chapter 11 Case Summary ZLOOP INC: Chapter 11 Plan Proposes Sale of Assets [*] Moody's Takes Actions on $434.8MM Alt-A & Option ARM Loans [^] Large Companies with Insolvent Balance Sheet ********* A.M. CASTLE: Moody's Lowers CFR to Ca, Outlook Stable ----------------------------------------------------- Moody's Investors Service has downgraded A.M. Castle & Co.'s corporate family rating to Ca from Caa2, its probability of default rating to Ca-PD/LD from Caa2-PD and its existing senior secured notes to C from Caa2. The ratings downgrades reflect the company's very weak operating results and credit metrics and the completion of the exchange of its senior secured notes. The ratings outlook is stable. Downgrades: Issuer: A.M. Castle & Co. Probability of Default Rating, Downgraded to Ca-PD /LD from Caa2-PD Corporate Family Rating, Downgraded to Ca from Caa2 Senior Secured Regular Bond/Debenture, Downgraded to C (LGD5) from Caa2 (LGD4) Outlook Actions: Outlook, Changed To Stable From Negative RATINGS RATIONALE The LD designation reflects Moody's view that the recent note exchange constitutes a distressed exchange under Moody's definition of default. Moody's definition of default is intended to capture events whereby issuers fail to meet debt service obligations outlined in their original debt agreements. Moody's will remove the LD designation from the probability of default rating in three business days. At that time, Moody's will withdraw A.M. Castle's ratings since the existing senior secured notes are its only rated debt and almost all of the notes have been exchanged for new senior notes. On Jan. 15, 2016, Castle announced an offer to exchange its $210 million of 12.75% senior secured notes due Dec. 15, 2016, for an equal amount of 12.75% senior secured notes due Dec. 15, 2018. On Feb. 9, 2016, the company completed the exchange of $206.3 million of the notes. The existing $3.7 million of notes that have not been tendered for exchange have been stripped of substantially all restrictive covenants and all the collateral securing the notes. The existing notes have been downgraded to C from Caa2 to reflect Moody's expectation that the note holders are likely to receive little recovery in the event of a default. The maturity date on the new notes will be Dec. 15, 2018, if the company's completes its proposed convertible note exchange, or Sept. 14, 2017 if it fails to complete the exchange. The company has offered to exchange $57.5 million of existing 7.0% convertible notes due December 2017 with a conversion price of $10.28 per share for $40.25 million of 5.25% senior secured convertible notes due December 2019 with a conversion price of $2.25 per share. The convertible note exchange offer will reduce the company's debt by $17.5 million if successfully completed, but is not a sizeable enough debt reduction to impact the company's rating. The company hopes to achieve further debt reductions through the sale of underperforming and non-core assets, but is not likely to achieve substantially improved operating results and credit metrics in the near term. Moody's believes that Castle produced modestly negative adjusted EBITDA in 2015 and does not anticipate a material improvement in 2016 considering the lackluster demand in most of Castle's end markets. Castle's Ca corporate family rating reflects its very high leverage, negative interest coverage, recent operating losses, weak competitive position and relatively small size versus other rated steel distributors. Castle's rating is supported by its adequate liquidity level and its countercyclical cash flows, which provide some flexibility to pursue operating efficiency and sales improvement initiatives while contending with volatile steel and metals prices and uneven end market demand. Castle's SGL-3 speculative grade liquidity rating reflects Moody's view that the company will maintain an adequate, although somewhat weak liquidity profile over the next twelve months. Castle had $12.0 million of cash and $28.2 million of unrestricted borrowing capacity under its revolving credit facility as of Sept. 30, 2015. Moody's believes the company had a similar level of liquidity as of December 2015. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in December 2015. A.M. Castle & Co. is a global distributor of specialty grade, high performance steel, alloy and plastic products. The company sells alloy and stainless steels, nickel alloys, aluminum, carbon and titanium products in the form of bars, tubing, extrusions, plate and sheet. Castle also performs a broad array of processing services, such as cutting, grinding, shearing and heat treating to meet specific customer requirements. End markets include aerospace, oil and gas, heavy equipment and infrastructure. The company generated revenues of $838 million for the twelve month period ended Sept. 30, 2015. ADVANTAGE AVIATION: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Advantage Aviation Technologies, Inc. 201 Regal Row Dallas, TX 75247 Case No.: 16-30633 Chapter 11 Petition Date: February 12, 2016 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Harlin DeWayne Hale Debtor's Counsel: Rakhee V. Patel, Esq. SHACKELFORD, BOWEN, MCKINLEY & NORTON LLP 9201 N. Central Expressway, 4th Floor Dallas, TX 75231 Tel: 214-780-1400 Fax: 214-780-1401 Email: rpatel@shacklaw.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Debbie MacDonald, president. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. AFFIRMATIVE INSURANCE: Needs Until April 11 to File Plan -------------------------------------------------------- Affirmative Insurance Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the period by which they have the exclusive right to: (a) file a chapter 11 plan through and including April 11, 2016; and (b) solicit acceptances of a chapter 11 plan through and including June 10, 2016. In support of the extension request, the Debtors state: "The Chapter 11 Cases have been pending for approximately four months. Given that the Debtors have made substantial progress in these Chapter 11 Cases, and that the filing of a confirmable plan is on the horizon, the Debtors anticipate that the requested extension will provide them with sufficient time to propose and confirm a plan." The Debtors are represented by Christopher A. Ward, Esq., Shanti M. Katona, Esq., and Jarrett Vine, Esq., at Polsinelli PC, in Wilmington, Delaware; and TimothyW. Walsh, Esq., and Darren Azman, Esq., at McDermott Will & Emery LLP, in New York. About Affirmative Insurance Affirmative Insurance Holdings, Inc., Affirmative Management Services, Inc., Affirmative Services, Inc., Affirmative Underwriting Services, Inc., Affirmative Insurance Services, Inc., Affirmative General Agency, Inc., Affirmative Insurance Group, Inc. and Affirmative, L.L.C. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Proposed Lead Case No. 15-12136) on Oct. 14, 2015. The petition was signed by Michael J. McClure as chief executive officer. The Debtors have engaged McDermott Will & Emery LLP as general bankruptcy counsel, Polsinelli PC as local Delaware counsel, Faegre Baker Daniels LLP as special regulatory counsel, BDO USA LLP as financial consultant and Rust Consulting/Omni Bankruptcy as notice and claims agent. The Debtors disclosed total assets of $25.20 million and total debts of $91.26 million as of Aug. 31, 2015. Founded in June 1998, Affirmative provides non-standard personal automobile insurance policies for individual consumers in targeted geographic markets. NSPAI policies provide coverage to drivers who find it difficult to obtain insurance from standard automobile insurance companies due to their lack of prior insurance, age, driving record, limited financial resources, or other factors. On October 30, 2015, the Office of the U.S. Trustee appointed five creditors to the official committee of unsecured creditors. ALPHA NATURAL: Steelhead et al. No Longer Hold Equity Stake ----------------------------------------------------------- Steelhead Partners, LLC; James Michael Johnston; Brian Katz Klein; and Steelhead Navigator Master, L.P. disclosed in a Schedule 13G (Amendment No. 3) report with the Securities and Exchange Commission that they no longer hold shares of Alpha Natural Resources, Inc.'s Common Stock, $0.01 par value per share. "As of December 31, 2015, neither Steelhead nor Steelhead Navigator was the beneficial owner of any shares of the issuer's voting common stock," they said. Previously, shares of Alpha Natural Resources' voting common stock were held by and for the benefit of Steelhead Navigator and another client account. Steelhead, as the investment manager of Steelhead Navigator and the other client account, and as the sole member of Steelhead Navigator's general partner, and each of J. Michael Johnston and Brian K. Klein, as the member-managers of Steelhead, may have been deemed to beneficially own such shares of Alpha Natural Resources' voting common stock previously held by Steelhead Navigator and such other client accounts for the purposes of Rule 13d-3 under the Securities Exchange Act of 1934, insofar as they may have been deemed to have the power to direct the voting or disposition of those shares. Steelhead Partners, LLC et al may be reached at: Brent E. Binge, General Counsel STEELHEAD PARTNERS, LLC 333 108th Avenue NE, Suite 2010 Bellevue, WA 98004 Steelhead Navigator Master, L.P. may be reached at: Brent E. Binge, General Counsel STEELHEAD NAVIGATOR MASTER, L.P. c/o Maples Corporate Services Limited P.O. Box 309, Ugland House Grand Cayman, KY1-1104, Cayman Islands 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 case. 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 Inc. to serve on the official committee of unsecured creditors. Dennis F. Dunne, Esq., Evan R. Fleck, Esq., and Eric K. Stodola, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and William A. Gray, Esq., W. Ashley Burgess, Esq., and Roy M. Terry, Jr., Esq. at Sands Anderson PC, represent the Committee. ALTA MESA: S&P Lowers CCR to 'CC' on Potential Debt Exchange Offer ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Houston-based Alta Mesa Holdings L.P. to 'CC' from 'CCC+'. The outlook is negative. S&P also lowered the issue-level rating on the company's $450 million senior unsecured notes due October 2018 to 'CC' from 'CCC+'. The recovery rating on this debt remains '3', indicating S&P's expectation of meaningful (lower end of the 50%-70% range) recovery in the event of a default. "The downgrade follows Alta Mesa's announcement that it has launched an exchange offer to existing holders of its $450 million senior unsecured notes for a new issue of third-lien term loans due 2021," said Standard & Poor's credit analyst Daniel Krauss. The company is offering to exchange new third-lien term loans for any and all of its outstanding unsecured notes at 60% of par (assuming early participation premium). The closing date is expected to occur by mid-March 2016. S&P views the transaction as a distressed exchange because investors will receive less than what was promised on the original securities. Additionally, in S&P's view, the offer is distressed, rather than purely opportunistic, given the current challenging operating environment, the current market price of the notes, and meaningful upcoming debt maturities. The company's revolving credit facility matures in October 2017. The outlook is negative. Once the transaction has closed, S&P expects to lower the corporate credit rating to 'SD' (selective default) and the issue-level rating on the $450 million notes to 'D'. S&P would then review the ratings based on the new capital structure and consider an upgrade when there is more certainty that the company is no longer pursuing distressed exchanges. S&P also expects to rate the new third-lien term loans when there is more detailed information about the resulting capital structure. S&P could raise the ratings if the transaction does not close. AMERICAN APPAREL: Cancels Registration of Securities ---------------------------------------------------- The United States Bankruptcy Court of the District of Delaware on January 27, 2016, entered an order confirming American Apparel, Inc.'s First Amended Joint Plan of Reorganization, under which, on February 5, 2016, the Effective Date of the Plan, all shares of common stock and other equity interests in the Company were cancelled and terminated, and the Company was converted into a Delaware limited liability company with membership interests issued in accordance with the Plan. American Apparel, LLC -- formerly known as American Apparel, Inc. -- on Feb. 5 filed with the Securities and Exchange Commission 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." The LLC also filed several POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT. About American Apparel American Apparel, Inc., American Apparel (USA), LLC, American Apparel Retail, Inc., American Apparel Dyeing & Finishing, Inc., KCL Knitting, LLC and Fresh Air Freight, Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Proposed Lead Case No. 15-12055) on Oct. 5, 2015. The petition was signed by Hassan Natha as chief financial officer. The Debtors reported total assets of $199,360,934 and total liabilities of $397,576,744. The Debtors and their non-debtor affiliates operate a vertically integrated manufacturing, distribution, and retail business focused on branded fashion-basic apparel, employing approximately 8,500 employees across six manufacturing facilities and approximately 230 retail stores in the United States and 17 other countries worldwide. The Debtors have engaged Jones Day as restructuring counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, Moelis & Company as investment banker, FTI Consulting, Inc. as financial advisor, DJM Real Estate as real estate consultant and Garden City Group, LLC as claims and noticing agent. * * * The Debtors filed a proposed Joint Plan of Reorganization that contemplates converting more than $200 million of senior notes into equity interests of the reorganized American Apparel. On Nov. 20, 2015, the Court approved the Disclosure Statement and set a Jan. 7, 2016 voting deadline and a Jan. 20 plan confirmation hearing. On Jan. 10, the Debtors received a letter from former CEO Dov Charney disclosing a proposed $300 million alternative transaction that will be funded by Hagan Capital Group and Silver Creek Capital Partners but American Apparel rejected the proposal. On Jan. 25, 2016, the Court held a telephonic hearing, granting confirmation of the Debtors' First Amended Plan, provided certain revisions were made to the First Amended Plan and the proposed confirmation order. On Jan. 27, the Court entered an order confirming the Plan. AMERICAN AXLE: Posts $236 Million Net Income for 2015 ----------------------------------------------------- American Axle & Manufacturing Holdings, Inc. filed with the Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $235.6 million on $3.90 billion of net sales for the year ended Dec. 31, 2015, compared to net income of $143 million on $3.69 billion of net sales for the year ended Dec. 31, 2014. For the three months ended Dec. 31, 2015, the Company reported net income of $62.9 million on $958.4 million of net sales compared to net income of $13.2 million on $939.5 million of net sales for the same period in 2014. As of Dec. 31, 2015, the Company had $3.20 billion in total assets, $2.90 billion in total liabilities and $301.5 million in total stockholders' equity. "AAM had an outstanding year in 2015. On the strength of North American light vehicle production volumes and our solid operational performance, AAM achieved record sales and record gross profit for the year. We also made measurable progress in diversifying our business and improving our capital structure," said AAM's Chairman & Chief Executive Officer, David C. Dauch. "As we look ahead to 2016 and beyond, we remain focused on advancing our technology leadership in order to capitalize on major industry trends and drive profitable growth and business diversification." A full-text copy of the Form 10-K is available for free at: http://is.gd/6TjPI3 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. * * * 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. ANDALAY SOLAR: Southridge May Resell 250 Million Common Shares -------------------------------------------------------------- Andalay Solar Inc. filed with the Securities and Exchange Commission a Form S-1 registration statement relating to the offer and resale of up to 250,000,000 shares of the Company's common stock, par value $0.001 per share, by Southridge Partners II LP. All of those shares represent shares that Southridge has agreed to purchase if put to it by the Company pursuant to, and subject to the volume limitations and other limitation of, the terms of the Equity Purchase Agreement the Company entered into with them on Dec. 10, 2014. On Dec. 11, 2014, the Company filed a Registration Statement on Form S-1 to register 85,000,000 shares of common stock related to its December Equity Purchase Agreement with Southridge and on Jan. 16, 2015, the Securities and Exchange Commission declared the Registration Statement effective. On July 12, 2015, the COmpany filed a Registration Statement on Form S-1 to register 150,000,000 shares of common stock related to its December Equity Purchase Agreement with Southridge and on Aug. 12, 2015, the Securities and Exchange Commission declared the Registration Statement effective. To date, the Company has drawn down approximately $1,410,000 from the sale of 219,945,466 shares of common stock from the December Equity Agreement. Subject to the terms and conditions of the December Equity Purchase Agreement the Company has the right to "put," or sell, up to $5,000,000 worth of shares of our common stock to Southridge, and approximately $3,590,000 remains available for sale. The Company's common stock became eligible for trading on the OTCQB on Sept. 6, 2012. On May 15, 2015, the Company began trading on the OTCPink and then on July 20, 2015, its stock became eligible for trading on the OTCQB. The Company's common stock is quoted on the OTCQB under the symbol "WEST". The closing price of the Company's stock on Feb. 8, 2016, was $0.0008. A full-text copy of the Form S-1 prospectus is available at: http://is.gd/UciR4u About Andalay Solar Founded in 2001, Andalay Solar, Inc., formerly Westinghouse Solar, Inc., is a provider of innovative solar power systems. In 2007, the Company pioneered the concept of integrating the racking, wiring and grounding directly into the solar panel. This revolutionary solar panel, branded "Andalay", quickly won industry acclaim. In 2009, the Company again broke new ground with the first integrated AC solar panel, reducing the number of components for a rooftop solar installation by approximately 80 percent and lowering labor costs by approximately 50 percent. This AC panel, which won the 2009 Popular Mechanics Breakthrough Award, has become the industry's most widely installed AC solar panel. A new generation of products named "Instant Connect" was introduced in 2012 and is expected to achieve even greater market acceptance. Andalay Solar reported a net loss attributable to common stockholders of $1.87 million for the year ended Dec. 31, 2014, compared with a net loss attributable to common stockholders of $3.85 million for the year ended Dec. 31, 2013. As of Sept. 30, 2015, the Company had $826,350 in total assets, $3.31 million in total liabilities and a total stockholders' deficit of $2.49 million. Burr Pilger Mayer, Inc., in San Jose, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company's significant operating losses and negative cash flow from operations raise substantial doubt about its ability to continue as a going concern. ARCH COAL: $5-Mil. Payment to Critical Vendors Approved ------------------------------------------------------- Arch Coal, Inc., and its affiliated debtors sought and obtained from Judge Charles E. Rendlen, III of the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, authorization to make payments of up to $5 million for claims of critical vendors. The Debtors purchase goods and services from certain vendors and independent contractors that are unaffiliated with the Debtors and are, by and large, sole source or limited source suppliers or provide a material economic or operational advantage when compared to other available vendors; without them, the Debtors could not operate ("Critical Vendors"). The Debtors told the Court that in order to preserve and maximize the value of their estates, they must preserve key business relationships, an objective that the Debtors are especially mindful of as they transition into chapter 11. Except under extraordinary circumstances, payments of Critical Vendor Claims would be contingent on an agreement that the Critical Vendors continue to sell their goods or services to the Debtors on a going-forward basis on terms most favorable to the Debtors in the one-year period preceding the Petition Date. The Debtors estimated that the maximum amount needed to pay the prepetition claims of Critical Vendors is approximately $5 million ("Critical Vendor Claims Cap"). Arch Coal, Inc., and its affiliated debtors are represented by: Lloyd A. Palans, Esq. Brian C. Walsh, Esq. Cullen K. Kuhn, Esq. Laura Uberti Hughes, Esq. BRYAN CAVE LLP One Metropolitan Square 211 N. Broadway, Suite 3600 St. Louis, MO 63102 Telephone: (314)259-2000 Facsimile: (314)259-2020 E-mail: lapalans@bryancave.com brian.walsh@bryancave.com ckkuhn@bryancave.com laura.hughes@bryancave.com - and - Marshall S. Huebner, Esq. Brian M. Resnick, Esq. Michelle M. McGreal, Esq. Kevin J. Coco, Esq. DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, NY 10017 Telephone: (212)450-4000 Facsimile: (212)607-7983 E-mail: marshall.huebner@davispolk.com brian.resnick@davispolk.com michelle.mcgreal@davispolk.com kevin.coco@davispolk.com About Arch Coal, Inc. 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. ARCH COAL: Applies for Protections of Bankruptcy Code ----------------------------------------------------- A federal judge approved an application by Arch Coal Inc. for protections granted to a debtor under the Bankruptcy Code. The order, issued by U.S. Bankruptcy Judge Charles Rendlen III, confirmed that the coal producer is entitled to the protections described in sections 362, 365 and 525 of the Bankruptcy Code. The ruling would prevent or halt actions by anyone against Arch Coal, which include pursuing claims against the company, terminating their contracts, and denying or refusing to renew licenses as a result of its bankruptcy filing. Judge Rendlen also approved a process proposed by the company to adjudicate any violations of the provisions. 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. ARCH COAL: Schneider Capital No Longer Holds Equity Stake --------------------------------------------------------- Schneider Capital Management Corporation disclosed in a Schedule 13G (Amendment No. 2) filing with the Securities and Exchange Commission that it no longer holds Arch Coal, Inc.'s common stock, par value $0.01 per share, as of December 31, 2015. Schneider may be reached at: Michael C. Lesher, Vice President SCHNEIDER CAPITAL MANAGEMENT CORPORATION 460 E. Swedesford Rd., Suite 2000 Wayne, PA 19087 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. ASPEN GROUP: Sophrosyne Capital Reports 1.3% Stake as of Feb. 12 ---------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, Sophrosyne Capital, LLC disclosed that as of Feb. 12, 2016, it beneficially owns 1,690,490 shares of common stock of Aspen Group, Inc., representing 1.32 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/nHJYQ2 About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88 percent of the Company's degree-seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. Aspen Group reported a net loss of $4.2 million on $5.2 million of revenues for the year ended April 30, 2015, compared to a net loss of $5.3 million on $3.9 million of revenues for the year ended April 30, 2014. As of Oct. 31, 2015, the Company had $5.25 million in total assets, $3.93 million in total liabilities and $1.31 million in total stockholders' equity. AVAYA INC: Moody's Lowers CFR to Caa1, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded Avaya, Inc.'s corporate family rating to Caa1 from B3. Moody's also downgraded the company's probability of default rating to Caa1-PD from B3-PD, its first lien debt facilities to B2 from B1 and its second lien notes to Caa2 from Caa1. The downgrade was driven by continued declines in performance as well as concerns about the sustainability of the current capital structure including its ability to refinance $600 million of debt maturing in 2017. The ratings outlook is negative. Ratings Rationale The Caa1 corporate family rating reflects Avaya's very high leverage (greater than 8x as of Dec. 31, 2015) and concerns about the sustainability of the capital structure. The rating also reflects the company's very high debt service and other requirements at a time when the enterprise telephony market is evolving. Debt service, pension service and capital requirements of the business leave little cushion to support unforeseen operating challenges or to make material debt repayment or critical acquisitions. The rating acknowledges the company's industry leading position within the enterprise telephony market and related unified communications markets. At the same time the industry is evolving to include integrated communications offerings, with products offered as either on premise or hosted, managed service solutions. Avaya will need to constantly reinvest in new products and platforms to maintain its position against Cisco, its much larger and better capitalized primary competitor as well as smaller cloud based competitors. Although the company continues to make strides in reducing the cost structure of the business, revenues are expected to continue to decline and it will be challenging to materially improve EBITDA levels in the near term. The current capital structure is particularly problematic given the changes underway in the unified communications market. In addition to changes in the architectures of corporate communications systems, the increasing preference for subscription based pricing models hurts near term revenues, profitability and cash flow. Though the subscription model or managed service contracts can be beneficial in the long run, the near term hit to performance is particularly challenging when debt levels are high and liquidity is limited. Moody's continues to expect Avaya will be a key long term player in the industry and given sufficient time, with the appropriate capital structure, EBITDA levels will stabilize and potentially improve. While the company could likely limp along if all maturities were pushed out to 2020, the current capital structure is impractical and at worst, prevents some customers from choosing Avaya. Liquidity is adequate over the next twelve months but unlikely sufficient to address $600 million in maturities due in October 2017. Liquidity is supported by a $335 million domestic and $150 million foreign ABL lines ($196 million available as of December 31, 2015) as well as cash of $344 million. The company is expected to have modest but very limited free cash flow over the next eighteen months. The negative outlook reflects Moody's expectation for declining revenues and concern that the company may face challenges in refinancing 2017 and 2018 debt maturities. The ratings could be downgraded if leverage were to exceed 9x or free cash flow were negative on a sustained basis. The ratings could be upgraded if the company can stabilize revenues and EBITDA and address its capital structure, including pushing out maturities and improving leverage levels to under 7x. These ratings were affected: Downgrades: Issuer: Avaya, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured 1st Lien Bank Credit Facilities, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Secured 1st Lien Regular Bond/Debenture, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Secured 2nd lien Regular Bond/Debenture, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Avaya, Inc. Outlook, Negative The principal methodology used in these ratings was Diversified Technology Rating Methodology published in December 2015. Avaya is a global leader in enterprise telephony systems with $4.0 billion of revenues for the LTM period ended Dec. 31, 2015. BERRY PLASTICS: Conference Call Held to Discuss Quarter Results --------------------------------------------------------------- Members of Berry Plastics Group, Inc.'s management team held a conference call to discuss Berry's results for the quarter ended Jan. 2, 2016. Jonathan D. Rich, PhD, chairman & chief executive officer, said "[W]e had a very good start to our fiscal year. There was a significant amount of activity during the quarter, as we closed on the acquisition of AVINTIV on October 1 and embarked on the execution of integrating the business and achieving our synergy goals." Jonathan D. Rich, PhD, chairman & chief executive officer, related "[w]e continue to focus on our key strategic initiatives of reducing our debt-to-EBITDA ratio, driving organic growth, expanding internationally, and continuing to be disciplined while executing value-accretive acquisitions that have historically brought us success." A copy of the transcript of the conference is available for free at http://is.gd/CoUKQ7 About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P., and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100 percent of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a manufacturer of films and flexible packaging for food, personal care, medical, agricultural and industrial applications. As of Sept. 26, 2015, the Company had $5.02 billion in total assets, $5.08 billion in total liabilities and a $65 million total stockholders' deficit. * * * As reported by the TCR on Jan. 30, 2015, Moody's Investors Service upgraded the corporate family rating of Berry Plastics to 'B1' from 'B2'. The upgrade of the corporate family rating reflects the pro-forma benefits from the recent restructuring and acquisitions. The TCR reported on Sept. 11, 2015, that Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Evansville, Ind.-based Berry Plastics Group Inc. "The corporate credit rating affirmation reflects our view that the AVINTIV acquisition enhances Berry's operations enough to offset the additional debt incurred to fund the transaction, resulting in a neutral effect on credit quality," said Standard & Poor's credit analyst James Siahaan. BON-TON STORES: DW Partners Reports 2.9% Stake as of Dec. 31 ------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, DW Partners, LP and DW Investment Partners, LLC disclosed that as of Dec. 31, 2015, they beneficially own 525,000 shares of common stock of The Bon-Ton Stores, Inc., representing 2.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/PbJ1Af About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 270 stores, which includes nine furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. For further information, please visit the investor relations section of the Company's Web site at http://investors.bonton.com. Bon-Ton Stores reported a net loss of $6.97 million on $2.75 billion of net sales for the fiscal year ended Jan. 31, 2015, compared to a net loss of $3.55 million on $2.77 billion of net sales for the fiscal year ended Feb. 1, 2014. The Company reported a net loss of $21.6 million for the fiscal year ended Feb. 2, 2013. As of Oct. 31, 2015, the Company had $1.86 billion in total assets, $1.88 billion in total liabilities and a total shareholders' deficit of $17.79 million. * * * As reported in the TCR on Dec. 4, 2015, Moody's Investors Service downgraded Bon-Ton Stores's Corporate Family Rating to Caa1 from B3. The company's Speculative Grade Liquidity rating was affirmed at SGL-2. The rating outlook is stable. The downgrade considers the continuing and persistent negative pressure on Bon-Ton's revenue and EBITDA margins which has been accelerating during the course of fiscal 2015. Standard & Poor's Ratings Services in December 2015 lowered its corporate credit rating Bon-Ton Stores to 'CCC+' from 'B-'. The outlook is negative. S&P said the downgrade reflects both Bon-Ton's weakening performance and our forecast for an unsustainable capital structure and "less than adequate" liquidity. CANADIAN OIL: Moody's Lowers Sr. Unsecured Rating to Ba3 -------------------------------------------------------- Moody's Investors Service downgraded Canadian Oil Sands Limited's (COS) senior unsecured rating to Ba3 from Baa3 and the senior unsecured rating on its MTN program to (P)Ba3 from (P)Baa3. Moody's assigned COS a Ba3 Corporate Family Rating (CFR), a Ba3-PD Probability of Default Rating and a Speculative Grade Liquidity Rating of SGL-3. The rating outlook is stable. This action resolves the review for downgrade that was initiated on Dec. 16, 2015. "The downgrade of Canadian Oil Sands Limited reflects its very high cost base and Moody's expectation of very high leverage and weak interest coverage in 2016 and 2017 in the currently very weak oil price environment," said Terry Marshall, Moody's Senior Vice President. "COS's rating is supported by its long-lived, low-decline reserves and its ownership by Suncor Energy Inc." Ratings Downgrades: Issuer: Canadian Oil Sands Limited Senior Unsecured Medium-Term Note Program, to (P)Ba3 (LGD4) from (P)Baa3 Senior Unsecured Regular Bond/Debenture, to Ba3 (LGD4) from Baa3 Rating Assignments: Corporate Family Rating, Ba3 Probability of Default, Ba3-PD Speculative Grade Liquidity, SGL-3 Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE COS's Ba3 CFR reflects its stand-alone credit profile of B2 and implicit support from its parent, Suncor Energy Inc. for which Moody's attributes two notches of rating uplift. COS's B2 stand-alone credit profile is driven by its very high cost structure with all-in cash operating costs of C$55/bbl (US$38.50/bbl) with associated negative free cash flow, but supported by adequate liquidity and good asset value coverage. The cash operating costs include operating and interest expense and maintenance capex. Leverage and interest coverage will be very weak in 2016 and 2017 (debt to EBITDA of about 10x and EBITDA to interest of 2x in 2017) and COS will need to rely on its committed liquidity and voluntary support from Suncor to fund negative free cash flow of about $400 million through this period. COS has performed poorly in recent years, suffering numerous operating challenges that have hampered production and kept unit costs high. COS benefits from very long-lived mining oil sands reserves with no geologic or exploration risk, lower associated capex (about C$7/barrel) given that all major development costs are largely already spent and 100% synthetic crude oil production (SCO). The SGL-3 Speculative Grade Liquidity Rating reflects COS's adequate liquidity through 2016. At Sept. 30, 2015, COS had C$1.2 billion available on its C$1.5 billion revolving credit facility due June 2019, which is sufficient to fund negative free cash flow in 2016 of about C$300 million (and an estimated $100 million in 2017). However Moody's expects that this facility may be revised when Suncor completes the acquisition of 100% of COS, in which case Moody's assumes that COS will continue to have adequate liquidity. Moody's expects the COS to be in compliance with its single financial covenant under the credit facility and the 2021 senior notes through this period. COSL has no debt maturities until 2019. The stable outlook reflects improving metrics in 2017 based upon a slightly higher Moody's oil price estimate. The stand-alone credit profile could be upgraded from B2 if debt/EBITDA and EBITDA/interest appear likely to improve towards 5x and 2.5x, respectively and adequate liquidity is maintained. The assigned Ba3 CFR, incorporating our opinion of likely support from Suncor, could be upgraded if the stand-alone credit profile improves and we continue to believe Suncor will support COS. The stand-alone credit profile could be downgraded from B2 if EBITDA to interest appears unlikely to improve towards 1.5x or if liquidity is deemed weak. The assigned Ba3 CFR, incorporating our opinion of likely support from Suncor, could be downgraded should we adversely change our view of the support likely to be provided by Suncor. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Canadian Oil Sands Limited (COS) is a Calgary, Alberta-based subsidiary of Suncor Energy Inc. Suncor ownership stake is process to 100%. COS owns the largest working interest (36.74%) in the Syncrude Joint Venture (Syncrude), while Suncor directly owns another 12%. Syncrude, COS's sole asset, is a large oil sands mining and upgrading operation in the Fort McMurray area of northern Alberta, producing about 87,000 barrels/day (net of royalties) of synthetic crude oil in 2015. CCNG ENERGY: Can Tap Graves Dougherty to Handle Corporate Matters ----------------------------------------------------------------- The Hon. Ronald B. King of the Bankruptcy Court for the Western District of Texas authorized, on a final basis, CCNG Energy Partners, L.P., et al., to employ Graves Dougherty Hearon & Moody, P.C., as special counsel nunc pro tunc to the Petition Date. The Debtors represent that, although they have also sought approval of employment of Taube Summers Harrison Taylor Meinzer Brown LLP as bankruptcy counsel, the retention of Graves Dougherty as special counsel is necessary based on the particular expertise and experience that Graves Dougherty has with regard to the Debtors' corporate matters and litigation matters. Graves Dougherty is expected to: -- provide general corporate counsel to Debtors on an as-requested basis; -- advise and assist the Debtors on various matters related to governance issues and transactional matters, including necessary resolutions for asset purchase agreements or DIP lending agreements; -- advise and assist the Debtors on general commercial issues; -- advise the Debtors on employment law issues; -- advise and assist the Debtors and Debtors' bankruptcy counsel on other matters of corporate or commercial law on an as-requested basis, including but not limited to the sale of Debtor's assets or similar strategic transactions and the negotiations for and preparation of necessary transactional documents, including asset purchase agreements, due diligence inquiries, and DIP lending facility agreements; -- provide litigation counsel to Debtors with regards to non-bankruptcy litigation presently pending in the state courts of the State of Texas, including any presently pending litigation that is removed to bankruptcy court and made an adversary to Debtors' bankruptcy cases; and -- provide litigation counsel to Debtors with regards to such non-bankruptcy litigation as may arise during the pendency of the Debtors' bankruptcy cases, provided that nothing in this Order will require Debtors to employ Graves Dougherty with regards to such litigation. Subject to further order of the Court, Graves Dougherty is not authorized to perform these services for the Debtors: -- assist the Debtors with preparation of disclosures required by the Federal Rule of Bankruptcy Procedure; -- assist the Debtors with analysis of claims and objections to claims, except as necessary in presently pending litigation matters; -- challenge the extent, validity, or priority of liens; -- draft or negotiate a plan of reorganization or assist the Debtors with confirmation of a plan of reorganization; or -- analyze or prosecute any chapter 5 cause of action. The current preferred U.S. hourly rates charged by Graves Dougherty range from $300 to $550 for partners and other counsel and $200 to $300 for associates. The hourly rates for paralegals and clerks and other non-lawyer professionals range from $150 to $275. Graves Dougherty will employ attorneys and legal assistants with varying degrees of legal experience, as each matter may require. Graves Dougherty expects that the primary lawyers at Graves Dougherty who will be working on these matters will be Thomas Queen and Douglas Kilday, whose preferred hourly rates are $425 and $420, respectively. Prepetition, the Debtors paid Graves Dougherty approximately $1,912 for corporate services rendered, $7,182 for litigation services rendered, and $20 for costs associated with litigation services. As of the Petition Date, Graves Dougherty held $318,084 remaining in its trust account in the form of prepetition retainers paid to Graves Dougherty by the Debtors. As of the Petition Date, Graves Dougherty was over-secured in that its retainer was in an amount in excess of the fees and costs owing as of the Petition Date. Accordingly, Graves Dougherty will be, and hereby is, permitted to draw-down on the retainer held by it on the Debtors' accounts for pre-petition fees totaling $31,347 and expenses totaling $3,117. To the best of the Debtors' knowledge, Graves Dougherty represents no interest adverse to the Debtors' estates with respect to the matters upon which it is to be employed. The firm can be reached at: Thomas I. Queen, Jr., Esq. G. Douglas Kilday, Esq. GRAVES DOUGHERTY HEARON & MOODY, PC 401 Congress Avenue, Suite 2200 Austin, TX 78701 Tel: (512) 480-5600 Fax: (512) 478-1976 Email: tqueen@gdhm.com dkilday@gdhm.com About CCNG Energy CCNG Energy Partners, L.P. (the "Parent"), CCNG Energy Partners GP, L.L.C. ("CCNG GP"), Trinity Environmental SWD, L.L.C., Trinity Environmental Catarina SWD, L.L.C., Trinity Environmental Titan Trucking, L.L.C., Moss Bluff Property, L.L.C. and Trinity Environmental Services, L.L.C. (collectively, the "Operating Subsidiaries") filed Chapter 11 bankruptcy petitions (Bankr. W.D. Tex. Proposed Lead Case No. 15-70136) on Oct. 12, 2015. The petition was signed by Daniel B. Porter as CEO of General Partner. All of the Debtors' operations are performed by the Operating Subsidiaries. The Debtors estimated both assets and liabilities in the range of $100 million to $500 million. Taube Summers Harrison Taylor Meinzer Brown LLP serves as the Debtors' counsel. Judge Ronald B. King is assigned to the case. The Debtors are engaged in the disposal of produced saltwater and waste from the exploration and production of oil and gas. In 2015, the Office of the U.S. Trustee appointed six creditors to the official committee of unsecured creditors. The creditors are Sun Coast Resources Inc., KBK Industries, Sabine Storage & Operations Inc., Cambrian Management Ltd., WLP Oilfield Services, and Dolphin Services & Chemicals LLC. CLEAR CREEK RETIREMENT: Case Summary & 20 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: Clear Creek Retirement Plan II LLC PO Box 4082 Spanaway, WA 98387 Case No.: 16-40547 Chapter 11 Petition Date: February 12, 2016 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Hon. Brian D Lynch Debtor's Counsel: John R Rizzardi, Esq. CAIRNCROSS & HEMPELMANN, P.S. 524 2nd Ave Ste 500 Seattle, WA 98104-2323 Tel: 206-254-4444 Email: jrizzardi@cairncross.com Total Assets: $9.88 million Total Liabilities: $8.56 million The petition was signed by Rusty D. Fields, manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/wawb16-40547.pdf CTI BIOPHARMA: Baxalta Reports 14.8% Stake as of Dec. 31 -------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, Baxalta Incorporated and Baxalta GmbH disclosed that as of Dec. 31, 2015, they beneficially own 15,673,981 shares of common stock of CTI Biopharma Corp. representing 14.8 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/qicz69 About CTI BioPharma CTI BioPharma Corp. (NASDAQ and MTA: CTIC) -- http://www.ctibiopharma.com/-- formerly known as Cell Therapeutics, Inc., is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies covering a spectrum of blood-related cancers that offer a unique benefit to patients and healthcare providers. The Company has a commercial presence in Europe and a late-stage development pipeline, including pacritinib, CTI's lead product candidate that is currently being studied in a Phase 3 program for the treatment of patients with myelofibrosis. CTI BioPharma is headquartered in Seattle, Washington, with offices in London and Milan under the name CTI Life Sciences Limited. CTI Biopharma reported a net loss attributable to common shareholders of $96 million in 2014, compared with a net loss attributable to common shareholders of $49.6 million in 2013. As of Sept. 30, 2015, the Company had $63.1 million in total assets, $90.6 million in total liabilities and a $27.5 million total shareholders' deficit. CUMULUS MEDIA: Canyon Capital Reports 2.2% Stake as of Dec. 31 -------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, Canyon Capital Advisors LLC (CCA), Mitchell R. Julis and Joshua S. Friedman disclosed that as of Dec. 31, 2015, they beneficially own 5,055,143 shares of common stock of Cumulus Media Inc. representing 2.17 percent of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/ZNYTJ8 About Cumulus Media Cumulus Media Inc. (CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands in order to deliver premium choices for listeners, provide substantial reach for advertisers and create opportunities for shareholders. As the largest pure-play radio broadcaster in the United States, Cumulus provides exclusive content that is fully distributed through approximately 460 owned-and-operated stations in 90 U.S. media markets (including eight of the top 10), more than 10,000 broadcast radio affiliates and numerous digital channels. Cumulus is well-positioned in the widening digital audio space through a significant stake in the Rdio digital music service, featuring 30 million songs on-demand in addition to custom playlists and exclusive curated channels. Cumulus is also the leading provider of country music and lifestyle content through its NASH brand, which will serve country fans through radio programming, NASH magazine, concerts, licensed products and television/video. For more information, visit www.cumulus.com Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) in 2011 after struggling to pay off debts that topped $97 million as of June 30, 2011. As of Sept. 30, 2015, the Company had $3.12 billion in total assets, $3.10 billion in total liabilities and $19.6 million in total stockholders' equity. Bankruptcy Warning "The lenders under the Credit Agreement have taken security interests in substantially all of our consolidated assets, and we have pledged the stock of certain of our subsidiaries to secure the debt under the Credit Agreement. If the lenders accelerate the required repayment of borrowings, we may be forced to liquidate certain assets to repay all or part of such borrowings, and we cannot assure you that sufficient assets will remain after we have paid all of the borrowings under such Credit Agreement. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and we could be forced into bankruptcy or liquidation. Our ability to liquidate assets could also be affected by the regulatory restrictions associated with radio stations, including FCC licensing, which may make the market for these assets less liquid and increase the chances that these assets would be liquidated at a significant loss. Any requirement for us to liquidate assets would likely have a material adverse effect on our business," the Company said in its annual report for the year ended Dec. 31, 2014. * * * Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Atlanta-based radio broadcaster Cumulus Media Inc. to 'B-' from 'B', as reported by the TCR on Nov. 10, 2015. As reported by the TCR on Sept. 17, 2015, Moody's Investors Service downgraded Cumulus Media Inc.'s Corporate Family Rating to B3 from B2. Cumulus' B3 Corporate Family Rating reflects Moody's expectation that debt-to-EBITDA will remain elevated and in the mid to high 8x through FYE2015 (including Moody's standard adjustments) due to continued revenue declines in core ad sales and network revenue as well as the absence of political ad spending in 2015, an odd numbered year. CURO HEALTH: Moody's Raises Sr. Secured Ratings to 'B1' ------------------------------------------------------- Moody's Investors Service upgraded the ratings on Curo Health Services Holdings, Inc.'s existing senior secured credit facilities to B1 from B2. Concurrently, the B3 Corporate Family Rating and B3-PD Probability of Default Rating have been affirmed. In addition, Moody's also changed the rating outlook to positive from stable. On Jan. 19, 2016, Curo raised $95 million of incremental second lien term loans (not rated). The proceeds of the new debt was used in combination with cash-on-hand to acquire New Century Hospice, Inc., a regional hospice provider in the Southwest and Southern United States. Moody's raised its ratings on Curo's first lien senior secured credit facilities to reflect the change in the debt capital structure, namely the addition of $95 million of second lien debt. The second lien debt is junior to the first lien credit facilities and, therefore, would absorb losses ahead of the senior secured term loan. The positive outlook reflects Moody's expectation of improving credit metrics and free cash flow in 2016, as a result of strong year-over-year organic growth and EBITDA contributions from recent acquisitions. The positive outlook also reflects Moody's view that Curo will maintain a conservative financial policy over the near-term and that the company will de-lever to around 5.5x by the end of 2016. Following is a summary of Moody's rating actions: Ratings upgraded: $45 million senior secured revolver expiring 2019 to B1 (LGD 3) from B2 (LGD3) $380 million senior secured first lien credit facilities to B1 (LGD 3) from B2 (LGD3) Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD RATING RATIONALE The B3 Corporate Family Rating reflects risk associated with Curo's sole focus on the hospice industry and the company's very high financial leverage. The rating also reflects the company's small size, the presence of considerable competition in a fragmented industry and high revenue concentration from Medicare. Supporting the rating is Moody's expectation that the company's operating performance will result in declining financial leverage. The rating also reflects the company's position as the third largest for-profit hospice operator in the US. The positive outlook reflects Moody's expectation that credit metrics will continue to improve through earnings growth from existing businesses and new de novo expansions. Further, Moody's expects that the company will remain an active acquirer but acquisitions will be funded in a manner that does not raise leverage. Prior to a positive rating action, Moody's would need to gain comfort that any adverse reimbursement change will be manageable, without materially impairing operations or cash flow. In addition, Moody's could consider a rating upgrade if the company reduces and sustains debt to EBITDA below 5.5 times, while effectively managing its growth strategy. The ratings could be downgraded if liquidity deteriorates or free cash flow turns negative. The ratings could also be downgraded if debt to EBITDA is sustained above 6.5 times. Headquartered in Mooresville, NC, Curo Health Services Holdings, Inc. is a provider of hospice services in the Southeastern and Southwestern regions of the U.S. and operates 170 agencies in 18 states. The company recognized revenues of $377 million for the twelve months ended Sept. 30, 2015. Curo is owned by private equity firm Thomas H. Lee L.P. DANDRIT BIOTECH: Reports $422,000 Net Loss for Second Quarter ------------------------------------------------------------- DanDrit Biotech USA, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $421,776 on $42,525 of revenues for the three months ended Dec. 31, 2015, compared to a net loss of $953,131 on $0 of revenues for the same period in 2014. For the six months ended Dec. 31, 2015, the Company reported a net loss of $772,078 on $42,525 of revenues compared to a net loss of $1.48 million on $0 of revenues for the same period in 2014. As of Dec. 31, 2015, the Company had $1.33 million in total assets, $893,914 in total liabilities and $441,772 in total stockholders' equity. As of Dec. 31, 2015, the Company had $531,260 in cash and working capital of $328,129 as compared to June 30, 2015, when the Company had $1,474,134 in cash and cash held in escrow and working capital of $910,522. The decrease in cash and working capital is primarily due to the Company's efforts to secure financings through equity offering and expenses for research and development attributable to the Company engaging an entity to perform Phase IIb/III clinical trial of MelCancerVac. A full-text copy of the Form 10-Q is available for free at: http://is.gd/lRuvHS About DanDrit DanDrit Biotech USA, Inc., a biotechnology company, develops vaccine for the treatment of colorectal cancer primarily in the United States, Europe, and Asia. Its lead compound includes MelCancerVac(MCV), a cellular therapy, which is in a comparative Phase IIb/III clinical trial for advanced colorectal cancer. It also develops MelVaxin that is similar to the lysate component of MCV for injecting into the skin to promote natural dendritic cell responses that will attack the tumor expressing cancer/testis antigens. The company was founded in 2001 and is headquartered in Copenhagen, Denmark. For the year ended Dec. 31, 2014, the Company reported a net loss of $2.37 million on $0 of net sales compared to a net loss of $2.15 million on $32,768 of net sales for the year ended Dec. 31, 2013. DESIGNLINE CORP: Eagle Claim Objection, Glosson Suit Consolidated ----------------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina consolidated Designline Corporation, et al.'s objection to the claim filed by Eagle, Ltd., with the adversary proceeding commenced by Elaine T. Rudisill, as Liquidating Trustee, against Buster Glosson, et al. The claim objection and the Glosson Action are consolidated for all discovery, pre-trial matters, and trial. According to the Liquidating Trustee, consolidation of the Eagle Claim Objection with the Glosson Action is particularly appropriate because the actions do not merely involve "a common question of law or fact," but several common questions of law and numerous overlapping facts. After the Effective Date, the Liquidating Trustee commenced more than 100 adversary proceedings, including the Glosson proceeding against, among others, Eagle. The Glosson Action alleges ten claims or causes of action against Eagle. Eagle alleges that it is owed $7,385,621 as of the Petition Date by DesignLine Corporation for "[m]oney loaned." The liquidating trustee is represented by: Jennifer R. Hoover, Esq. Michael J. Barrie, Esq. Kevin M. Capuzzi, Esq. BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP 222 Delaware Avenue, Suite 801 Wilmington, DE 19801 Tel: (302) 442-7010 Fax: (302) 442-7012 E-mails: mbarrie@beneschlaw.com jhoover@beneschlaw.com kcapuzzi@beneschlaw.com -- and -- Travis W. Moon, Esq. Andrew Houston, Esq. MOON WRIGHT & HOUSTON, PLLC 227 W. Trade Street, Suite 1800 Charlotte, NC 28202 Tel: (704) 944-6560 Fax: (704) 944-0380 E-mails: tmoon@mwhattorneys.com ahouston@ mwhattorneys.com About DesignLine DesignLine Corporation manufactured coach, electric and range- extended electric (hybrid) buses. Founded in Ashburton, New Zealand in 1985, DesignLine was acquired by American interests in 2006, and DesignLine Corporations' headquarters was relocated to Charlotte, North Carolina. DesignLine Corporation is no longer affiliated with the DesignLine operations in New Zealand, which was placed in liquidation in 2011. DesignLine Corporation and DesignLine USA LLC originally sought Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware (Lead Case Nos. 13-12089 and 13-12090), on Aug. 15, 2013. Katie Goodman at GGG Partners LLC signed the petitions as chief restructuring officer. On Sept. 5, 2013, the case was transferred to the U.S. Bankruptcy Court for the Western District of North Carolina (Case Nos. 13-31943 and 13-31944). Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger, P.A.; and Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough, LLP, serve as the Debtors' bankruptcy counsel. GGG Partners also serves as the Debtors' financial advisors. A five-member unsecured creditors panel has been appointed in the Debtors' cases. Moon Wright & Houston PLLC and Benesch, Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee. The Committee retained CBIZ MHM, LLC as financial advisors. The Bankruptcy Judge has appointed Elaine T. Rudisill as the chapter 11 trustee for the Debtors. DOW CORNING: Has $291M Reserve for Breast Implant Litigation ------------------------------------------------------------ Dow Corning Corporation had recorded a reserve for breast implant litigation of $291 million as of December 31, 2015, according to Corning, Inc.'s Form 10-K report with the Securities and Exchange Commission for the fiscal year ended December 31, 2015. Corning Inc. and The Dow Chemical Company each own half of Dow Corning Corporation. In May 1995, Dow Corning filed for bankruptcy protection to address pending and claimed liabilities arising from many thousands of breast implant product lawsuits. On June 1, 2004, Dow Corning emerged from Chapter 11 with a Plan of Reorganization which provided for the settlement or other resolution of implant claims. The Plan also includes releases for Corning and Dow Chemical as shareholders in exchange for contributions to the Plan. Under the terms of the Plan, Dow Corning has established and is funding a Settlement Trust and a Litigation Facility to provide a means for tort claimants to settle or litigate their claims. Inclusive of insurance, Dow Corning has paid approximately $1.8 billion to the Settlement Trust. About Dow Corning Dow Corning Corp. -- http://www.dowcorning.com/-- produces and supplies more than 7,000 silicon-based products and services to more than 25,000 customers worldwide. Dow Corning is equally owned by The Dow Chemical Company and Corning Incorporated. The Company filed for Chapter 11 protection on May 15, 1995 (Bankr. E.D. Mich. Case No. 95-20512) to resolve silicone implant-related tort liability. The Company owed its commercial creditors more than $1 billion at that time. A consensual Joint Plan of Reorganization, amended on Feb. 4, 1999, offering to pay commercial creditors in full with post-petition interest, establish a multi-billion-dollar settlement trust for tort claims, and leave Dow Corning's shareholders unimpaired, took effect on June 30, 2004. DOW CORNING: Has Up to $341M Liability to Commercial Creditors -------------------------------------------------------------- Dow Corning Corp. is defending claims asserted by a number of commercial creditors who claim additional interest at default rates and enforcement costs, during the period from May 1995 through June 2004. As of December 31, 2015, Dow Corning has estimated the liability to commercial creditors to be within the range of $104 million to $341 million, according to Corning, Inc.'s Form 10-K report with the Securities and Exchange Commission for the fiscal year ended December 31, 2015. As Dow Corning management believes no single amount within the range appears to be a better estimate than any other amount within the range, Dow Corning has recorded the minimum liability within the range. Should Dow Corning not prevail in this matter, Corning Inc. said its equity earnings would be reduced by its 50% share of the amount in excess of $104 million, net of applicable tax benefits. There are a number of other claims in the bankruptcy proceedings against Dow Corning awaiting resolution by the U.S. District Court, and it is reasonably possible that Dow Corning may record bankruptcy-related charges in the future. The remaining tort claims against Dow Corning are expected to be channeled by the Plan into facilities established by the Plan or otherwise defended by the Litigation Facility. About Dow Corning Dow Corning Corp. -- http://www.dowcorning.com/-- produces and supplies more than 7,000 silicon-based products and services to more than 25,000 customers worldwide. Dow Corning is equally owned by The Dow Chemical Company and Corning Incorporated. The Company filed for Chapter 11 protection on May 15, 1995 (Bankr. E.D. Mich. Case No. 95-20512) to resolve silicone implant-related tort liability. The Company owed its commercial creditors more than $1 billion at that time. A consensual Joint Plan of Reorganization, amended on Feb. 4, 1999, offering to pay commercial creditors in full with post-petition interest, establish a multi-billion-dollar settlement trust for tort claims, and leave Dow Corning's shareholders unimpaired, took effect on June 30, 2004. EDWARD C. RICHERME: Bid to Dismiss EA's Suit Denied --------------------------------------------------- Judge Jack B. Schmetterer of the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, denied debtor Edward C. Richerme's motion to dismiss the adversary complaint filed by Engineered Abrasives, Inc. On March 18, 2015 the District Court for the Northern District of Illinois awarded EA judgment for a total of $719,814.04 in damages, attorney fees and costs in a case filed against Richerme, his father, and their company, American Machine Products & Services, Inc. ("AMPS") for trademark and copyright infringement, unfair competition, and deceptive trade practice arising from the Richermes' use of EA's business and proprietary information in connection with AMPS' business. EA filed an adversary complaint against Richerme to determine dischargeability of the debt owed to it by the latter pursuant to the said judgment, which EA alleges is nondischargeable under 11 U.S.C. Sections 523(a)(2)(A), (a)(4) and (a)(6). Richerme sought to dismiss the complaint for failure to state a claim. Count I of the complaint sought a declaration that relevant determinations giving rise to the judgment have preclusive effect in EA's nondischargeability claims, set forth in Counts II, III and IV. Richerme argued that collateral estoppel does not apply because the debt arose from entry of a default judgment on January 29, 2014. Judge Schmetterer, however, found that the judgment that was entered pursuant to the district court order incorporated findings and conclusions beyond those that were established by default. Accordingly, the judge denied Richerme's motion to dismiss the complaint on this basis. Richerme's motion to dismiss Count II was also denied. Judge Schmetterer found that the actions alleged in the complaint to have given rise to the judgment entered in the prior action could amount to false pretenses or misrepresentations for purposes of section 523(a)(2)(A), and that these allegations suffice at the pleading stage. Judge Schmetterer also denied the motion to dismiss Count III of the complaint. The judge found that the acts alleged in the complaint to have given rise to the judgment could plausibly support a denial of discharge of the judgment under Section 523(a)(4)(4). Finally, in denying the motion to dismiss Count IV of the complaint, Judge Schmetterer found that EA has sufficiently alleged the elements amounting to willful and malicious injury under Section 523(a)(6). The case is In re: Edward C. Richerme, Debtor. Engineered Abrasives, Inc., Chapter 11, Plaintiff, v. Edward C. Richerme, Defendant, Bankruptcy No. 15 B 16083, Adversary No. 15 A 00569 (Bankr. N.D. Ill.). A full-text copy of Judge Schmetterer's February 1, 2016 memorandum opinion is available at http://is.gd/jWPIdEfrom Leagle.com. EXELIXIS INC: FMR LLC Reports 14.9% Stake as of Dec. 31 ------------------------------------------------------- FMR LLC and Abigail P. Johnson disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission on Feb. 12, 2016, that they beneficially own 34,082,482 shares of common stock of Exelixis Inc. representing 14.999% of the shares outstanding. Fidelity Growth Company Fund also reported beneficial ownership of 14,514,689 common shares. A copy of the regulatory filing is available for free at http://is.gd/aCz3Xr About Exelixis Inc. Headquartered in South San Francisco, California, Exelixis, Inc., develops innovative therapies for cancer and other serious diseases. Through its drug discovery and development activities, Exelixis is building a portfolio of novel compounds that it believes has the potential to be high-quality, differentiated pharmaceutical products. Exelixis reported a net loss of $269 million on $25.1 million of total revenues for the year ended Dec. 31, 2014, compared with a net loss of $245 million on $31.3 million of total revenues in 2013. As of Sept. 30, 2015, the Company had $363.24 million in total assets, $437.46 million in total liabilities and a $74.22 million total stockholders' deficit. EXELIXIS INC: T. Rowe Price Reports 11% Stake as of Dec. 31 ----------------------------------------------------------- T. Rowe Price Associates, Inc. disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2015, it beneficially owns 25,038,170 shares of common stock of Exelixis Inc. representing 11 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/UAUHMz About Exelixis Inc. Headquartered in South San Francisco, California, Exelixis, Inc., develops innovative therapies for cancer and other serious diseases. Through its drug discovery and development activities, Exelixis is building a portfolio of novel compounds that it believes has the potential to be high-quality, differentiated pharmaceutical products. Exelixis reported a net loss of $269 million on $25.1 million of total revenues for the year ended Dec. 31, 2014, compared with a net loss of $245 million on $31.3 million of total revenues in 2013. As of Sept. 30, 2015, the Company had $363.24 million in total assets, $437.46 million in total liabilities and a $74.22 million total stockholders' deficit. FORESIGHT ENERGY: Moody's Lowers CFR to Caa1, Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded all ratings of Foresight Energy, LLC including the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD, senior unsecured rating to Caa3 from Caa2, and senior secured rating to B2 from B1. The speculative grade liquidity rating is unchanged at SGL-4. The outlook is negative. Issuer: Foresight Energy, LLC Downgrades: Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Unchanged: Speculative Grade Liquidity Rating, unchanged at SGL-4 Outlook Actions: Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE The downgrade reflects the continued headwinds in the coal sector and the recent deterioration in seaborne and domestic coal prices, which we expect to persist, putting pressure on average realizations over the next two years as higher priced contracts roll off. The downgrade also reflects the prolonged continued negotiation with the company's creditors associated with an ongoing litigation by trustee for the bondholders of the company's 2021 Senior Notes, alleging that a change of control event had occurred as a result of the Murray acquisition in 2015. In December 2015 the company received a notice from the administrative agent of its secured credit agreement that it was in default under the terms of the agreement as a result of the court opinion issued in the bondholder litigation. The company continues to negotiate with its lenders to cure the alleged default events, and the outcome is uncertain. As of Sept. 30, 2015, the company had $600 million of 2021 Senior Notes outstanding, and $673 million under its senior secured bank credit facility. The company does not have sufficient liquidity to repay its debt if it were to be accelerated. In May 2015 the trustee for the bondholders of the company's 2021 Senior Notes filed suit alleging that Murray Energy Corporation's acquisition of an interest in Foresight Energy GP LLC triggered a change of control of the unsecured 2021 Senior Notes. On Dec. 4, 2015, a Vice Chancellor of the Delaware Chancery Court issued his opinion, but not a judgment, stating that change of control had occurred and that the trustee was entitled to a company's offer to purchase the 2021 Senior Notes at 101% of the principal amount tendered, as required by the indenture. A judgment in the case has not yet been rendered. The company is involved in ongoing discussions with a majority of the unsecured holders of their 2021 Senior Notes and with certain lenders under their revolving credit facility, in an attempt to resolve these issues. The company also indicated that it is likely to suspend distributions on their common units, commencing with the quarter ending Dec. 31, 2015. The corporate family rating continues to reflect the company's position as the lowest cost underground producer in the Illinois Basin, ample reserves, multiple transportation options, and access to export markets. The CFR also captures the stable domestic customer base of large scrubbed coal plants and attractive contracted position through the end of 2016. The ratings are further supported by our view that Illinois Basin (ILB) remains the better positioned coal region in the US. The ratings are constrained by the company's geographical and operational concentration as an Illinois Basin producer with four underground mining complexes. The Speculative Grade Liquidity rating of SGL-4 reflects the receipt of default notice by the administrative agent of the company's secured credit agreement. At Sept. 30, 2015, prior to the default notice the company liquidity consisted of $25 million in cash and $166 million available under $550 million revolver maturing in August 2018. The company generated over $200 million in operating cash flows for the twelve months ended September 30, 2015, comfortably covering roughly $130 million in capital investments. The company had paid roughly $50 million per quarter in dividends over the past four quarters. Moody's expects fourth quarter 2015 cash outlay of roughly $8 million following the dividend cut announced in November 2015. Moody's believes that recent dividend reduction will result in positive free cash flows over the next twelve months. The principal methodology used in these ratings was Global Mining Industry published in August 2014. Foresight Energy, LLC is 100% owned by Foresight Energy L.P., which is a Master Limited Partnership (MLP). Foresight is a thermal coal producer operating in the Illinois Basin. Currently, the company has four operating mining complexes, with four longwall operations, one continuous miner operation, and over 3 billion tons of coal reserves. For the twelve months ended Sept. 30, 2015, the company generated $1,043 million in revenues. In 2015 Foresight's parent company sold 34% of its general partner interest and 50% of the limited partner interest to Murray Energy Corporation. Christopher Cline, the founder of Foresight, and his affiliates retained an approximately 66% general partner interest and an approximately 36% limited partner interest, with the balance of limited partner units publicly traded. FPMC SAN ANTONIO: Finds Buyer But Lender Declares Default --------------------------------------------------------- San Antonio Realty Partners, LP, owner of a property in San Antonio, Texas that housed a hospital, said in a filing Dec. 31, 2015, that it has found a buyer, which has agreed to purchase the hospital at a purchase price that would allow the Debtor to pay all creditors in full. On Nov. 6, 2015, the Debtor filed a motion to commence a sale process for substantially all assets. On Nov. 20, Judge Craig A. Gargotta approved the bidding procedures and set a Dec. 9 deadline for the Debtor to select a stalking horse, Dec. 18 bid deadline for competing bids, and a Jan. 4, 2016 sale hearing. The Debtor said in a filing that it received multiple bids for stalking horse status but declined to accept those offers for reasons including the conditions set forth in the LOI's. The Debtor proceeded with a written auction which resulted in multiple offers. The Debtor forwarded each of the offers to DIP lender Texas Capital Bank N.A. and its counsel on Dec. 18, 2015, and indicated its preference among the offers received. The buyer selected by the Debtor ("Buyer") submitted an offer which is considerably in excess of the indebtedness to the Lenders and would pay all creditors in full. On Dec. 30, 2015, counsel for TCB sent notice to the debtor of an alleged event of default under the DIP Loan Agreement. The Default Letter alleges that effective Jan. 4, 2016, the Debtor will have failed to meet the milestones requiring the Debtor to (i) select a strategic transaction on or before Dec. 20, 2015 that satisfied the requirements of the DIP Agreement, and (ii) obtain a Court order approving the sale on or before Jan. 4, 2016. The Debtor has filed a motion seeking a determination that it IS NOT IN DEFAULT under the DIP Loan Agreement. $5-Mil. DIP Loan FPMC San Antonio Realty Partners on Nov. 12, 2015, obtained from the U.S. Bankruptcy Court for the Western District of Texas final approval to access up to $5 million of financing from Texas Capital Bank N.A. and use the bank's cash collateral. TCB or its designee agreed to provide the Debtor a multiple-advance term loan made available to the Debtor in a principal amount of up to $5,000,000 with superpriority claims and first-priority liens senior to any prepetition or postpetition liens. All obligations under the DIP Facility were to terminate on Jan. 4, 2016. The DIP facility will have interest rate fixed at 10% per annum. The $400,000 of the DIP financing was made available upon interim approval of the DIP facility. As of the bankruptcy filing date, the Debtor already owes TCB, the administrative agent for the prepetition lenders, $64.3 million that was outstanding under a prepetition construction loan. An interim hearing on the Motion was held Oct. 23 and a final hearing was held Nov. 10. An interim order was entered Oct. 27 and a final order was entered Nov. 12. The DIP Loan Agreement identifies 34 specific events of default. Included as the last event of default is the "failure to satisfy any single Strategic Transaction Milestone", which includes: (a) An Order entered by the Bankruptcy Court approving Debtor-in-Possession's retention of a broker acceptable to Lender and on terms acceptable to Lenders, both in Lenders' sole and absolute discretion not later than 30 days after the Petition Date [November 5, 2015]. (b) An Order entered by the Bankruptcy Court approving the process for consummating a Strategic Transaction on terms acceptable to Lenders, in their sole and absolute discretion, not later than 30 days after the Petition Date [November 5, 2015]. (c) The Debtor-in-Possession has commenced the process of obtaining a Strategic Transaction on terms acceptable to Lenders, in their sole and absolute discretion, not later than 25 days after the Petition Date [October 31, 2015]. (d) The Debtor-in-Possession has received a letter of intent for a Strategic Transaction acceptable to Lender, in their sole and absolute discretion, not later than 60 days after the Petition Date [December 5, 2015]. (e) The Debtor-in-Possession has selected a Strategic Transaction that (i) proposes to repay in full in cash all credit extended under this Agreement; (ii) proposes to repay in full in cash all amounts due and owing to the Prepetition Lenders pursuant to the Prepetition Loan Documents; or (iii) is otherwise satisfactory to Lender, in its sole and absolute discretion, in each case not later than 75 days after the Petition Date [December 20, 2015]. (f) An Order entered by the Bankruptcy Court approving the Debtor-in-Possession to consummate a Strategic Transaction and execute all of the documents and agreements related to such Strategic Transaction not later than 90 days after the Petition Date, unless such date is extended by written agreement of Lenders and Debtor. (g) The Debtor-in-Possession has consummated a Strategic Transaction not later than 120 days after the Petition Date, unless such date is extended by written agreement of Lenders and Debtor [January 4, 2016]. (h) The employment of the Property Manager as the manager of the Debtor's real estate, including both the hospital facility and the medical office building, with Property Manager having sole and exclusive responsibility and authority for managing the Debtor's disbursements from its DIP accounts. (i) The employment of Raymond W. Battaglia of the Law Offices of Ray Battaglia, PLLC approved by an order of the Bankruptcy Court as the Debtor-in-Possession's restructuring counsel. The DIP Loan Agreement provides remedies available to TCB, including: "In addition to other remedies expressly set forth herein and those legal and equitable remedies available under applicable law, upon the occurrence of any Event of Default, Debtor's exclusive periods established under the Bankruptcy Code are terminated, and Lender and the Prepetition Lenders shall have immediate relief from the automatic stay and may foreclose on all or any portion of the Collateral, or otherwise exercise remedies against the Collateral permitted by applicable law. Before exercising any remedies against the Collateral, Lender must give five (5) days' advance written notice to Debtor, the Case Professionals, and the United States Trustee. During such five (5)-day notice period1, Debtor is entitled to an emergency hearing with the Bankruptcy Court for the sole purpose of contesting whether an Event of Default has occurred. Unless during such period the Bankruptcy Court determines that an Event of Default has not occurred and/or is not continuing, the automatic stay of Section 362(a) of the Bankruptcy Code, as to Lender, shall be automatically terminated at the end of such notice period and without further notice or order." A copy of the Final DIP Financing Order is available for free at: http://bankrupt.com/misc/FPMC_SA_64_Final_DIP_Order.pdf Debtor Denies Failure to Meet Sale Milestones On Dec. 31, 2015, the Debtor filed a motion seeking a determination that it IS NOT IN DEFAULT under the DIP Loan Agreement. The Debtor said it has complied with the DIP Loan Agreement and the Sale Procedure Order. The Debtor conducted an auction and forwarded each of the offers to TCB and its counsel on Dec. 18, 2015 and indicated its preference among the offers received. The Debtor sought TCB's approval of the sale to the high bidder as required under the DIP Loan Agreement and the Sale Procedures Order. TCB neither approved nor rejected the high bid. Rather, on Dec. 19, 2015, TCB responded with questions and concerns related to the offer of the highest bidder. The Debtor has endeavored to respond to TCB's concerns beginning on Dec. 22, 2015 during a conference call with TCB and its counsel. TCB wanted to conduct additional due diligence regarding the proposed transaction with the buyer. TCB requested an in person meeting with the buyer, which the Debtor arranged to be held on Dec. 23, 2015. On Dec. 28, 2015, TCB requested a meeting with the Debtor's broker and with counsel for the doctor group affiliated with the Debtor's Property. The Debtor arranged those meetings as well and they were held on Dec. 29. Whether the buyers' offer was satisfactory to the lenders was a mystery to the Debtor until receipt of the Default Letter on Dec. 30, 2015. TCB's assertion that the Debtor will anticipatorily breach its obligation to obtain an order of the Court approving the sale to the high bidder is a bit like the child who kills his parents and seeks mercy from the court because he is an orphan. The Debtor waited 12 days after Dec. 18, 2015 for the lenders to accept or reject the sale to the high bidder. The Debtor said it has complied with every request from TCB to assist it in the conduct its' due diligence concerning the buyer and the proposed transaction. According to the Debtor, failure to timely proceed with a motion to approve a sale to the buyer, is attributable to TCB delay in advising the Debtor of its acceptance or rejection of the Buyer's offer. The Debtor on Jan. 8, 2016, obtained an order from the Bankruptcy Court finding that the event of default alleged in the Default Letter has not occurred. The judge also ordered that the automatic stay as to TCB and the Prepetition Lenders will remain in full force and effect. However, a court filing indicates that that order has been withdrawn. A copy of the document is available for free at: http://bankrupt.com/misc/FPMC_90_Stay_Wirthdrawn.pdf About FPMC San Antonio FPMC San Antonio Realty Partners, LP's primary asset is a property commonly known as the Forest Park Medical Center Hospital and Medical Office Building located at 5510 Presidio Parkway in San Antonio, Texas. Forest Park Medical Center Hospital is a specialty surgical hospital and medical office building. The four-story, 150,000 square-foot hospital has 54 beds. The Property includes an adjacent 4-story, 84,000 square foot Medical Office Building, together with a parking garage. The Debtor did not operate the health care business conducted on its property and instead leased the surgical hospital to a third party. The hospital has ceased operations and furloughed its employees. FPMC San Antonio Realty Partners sought Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 15-52462) on Oct. 6, 2015 to pursue an 11 U.S.C. Sec. 363 sale of the assets. The Debtor was forced to file the Chapter 11 Case in order to stop an impending foreclosure on the Property. Judge Craig A. Gargotta is assigned to the case. FPMC reported $110.3 million in assets and $67.4 million in liabilities, according to San Antonio Express-News. The mortgage loan accounts for most of the debt. The Debtor tapped the Law Offices of Ray Battaglia, PLLC, as counsel. The Debtor also engaged CBRE, Inc., to market the property. CBRE can be reached at: CBRE, Inc. Attn: Scott Herbold, First Vice President 200 Concord Plaza, Suite 800 San Antonio, TX 78216 Tel: (210) 507-1120 E-mail: Scott.Herbold@cbre.com Attorneys for FPMC San Antonio Realty Partners: THE LAW OFFICES OF RAY BATTAGLIA,PLLC. Raymond W. Battaglia, Esq. 66 Granburg Circle San Antonio, Texas 78218 Telephone (210) 601-9405 E-mail: rbattaglialaw@outlook.com DIP Lender Texas Capital Bank is represented by: J. Mark Chevallier, Esq. MCGUIRE, CRADDOCK & STROTHER 2501 N. Harwood St., Ste 1800 Dallas, TX 75201 Tel: 214-954-6807 E-mail: mchevallier@mcslaw.com FREEDOM COMMUNICATIONS: Wins Nod to Hold March 16 Auction --------------------------------------------------------- Freedom Communications, Inc., on Feb. 5, 2016, received approval from the U.S. Bankruptcy Court for the Central District of California of bidding procedures in connection with the sale of substantially all of the Company's assets. Judge Mark S. Wallace agreed to this timeline: * The Debtors are authorized to enter into an asset purchase agreement with a stalking horse bidder by Feb. 12, 2016. * Competing bids are due March 11, 2016, at 5:00 p.m. (prevailing Pacific Time). * If multiple qualified bids are received, an auction will be conducted by the Debtors on March 16, 2016, at 10:00 a.m. (prevailing Pacific Time), at the offices of Lobel Weiland Golden Friedman LLP, 650 Town Center Drive, Suite 950, Costa Mesa, California 92626 * The sale hearing will be held on March 21, 2016, at 9:00 a.m. (prevailing Pacific Time), before the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, Ronald Reagan Federal Building and U.S. Courthouse, in Courtroom 6C, 411 West Fourth Street, Santa Ana, CA 92701. Any objections to the sale will be filed and served so as to be received no later than 9:00 a.m. (prevailing Pacific Time) on the date of the sale hearing. In connection with a Stalking Horse APA, the Debtors, with the consent of the Official Committee of Unsecured Creditors and in consultation with the DIP Agent, are authorized, but not required, to grant to a Stalking Horse Bidder a Break-Up Fee of up to 2.5% of the cash consideration offered by such Stalking Horse Bidder and/or an Expense Reimbursement in an amount not to exceed $200,000. Such Stalking Horse Protections, if any, would be paid in the event that the Stalking Horse Bidder is not approved by the Court as the purchaser of the Assets on which it bid. A copy of the Bidding Procedures Order is available for free at: http://bankrupt.com/misc/Freedom_C_371_Bidding_Ord.pdf Freedom Communications and certain of its affiliates filed Chapter 11 cases in order to maximize the value of the Debtors and their assets by selling their business operations as a going concern under the supervision of the Bankruptcy Court. Provided that the contemplated sale results in the payment in full of their respective claims, the sale is supported by the Debtors' two primary prepetition secured creditors, Silver Point Finance, LLC and the Pension Benefit Guaranty Corporation. In addition, the Debtors anticipate that the contemplated sale will have the support of the Official Committee of Unsecured Creditors, which will be actively involved in the sale process. The Debtors contemplate a robust sale process seeking to maximize the value of their Assets and, to this end, have engaged GlassRatner as their financial advisory firm, FTI as their investment banker, and Mosier & Company, Inc. as an independent sales representative to assist the Debtors in implementing the sale process. Mosier may be reached at: Robert P. Mosier MOSIER & COMPANY, INC 3151 Airway Avenue, Suite A-1 Costa Mesa, CA 92626 Tel: 714-432-0800 Fax: 714-432.7329 E-mail: rmosier@mosierco.com FTI Capital Advisors, LLC may be reached at: Christopher T. Nicholls Senior Managing Director FTI CONSULTING Three Times Square, 11th Floor New York, NY, 10036 Tel: 212 247 1010 Fax: 212 841 9350 E-mail: chris.nicholls@fticonsulting.com Attorneys for the Debtors: William N. Lobel, Esq. Alan J. Friedman, Esq. Beth E. Gaschen, Esq. Christopher J. Green, Esq. LOBEL WEILAND GOLDEN FRIEDMAN LLP 650 Town Center Drive, Suite 950 Costa Mesa, CA 92626 Telephone 714-966-1000 Facsimile 714-966-1002 E-mail: wlobel@lwgfllp.com afriedman@lwgfllp.com bgaschen@lwgfllp.com cgreen@lwgfllp.com About Freedom Communications Headquartered in Santa Ana, California, Freedom Communications, Inc., owns two daily newspapers -- The Press-Enterprise in Riverside, Calif. and The Orange County Register in Santa Ana, Calif. Freedom Communications and 24 of its affiliates sought Chapter 11 bankruptcy protection in California with the intention of selling their assets to a group of local investors led by Rich Mirman, Freedom's chief executive officer and publisher. Headquartered in Santa Ana, California, Freedom owns two daily newspapers -- The Press-Enterprise in Riverside, Calif. and The Orange County Register in Santa Ana, Calif. Freedom Communications, Inc., et al., filed Chapter 11 bankruptcy petitions (Bankr. C.D. Cal. Proposed Lead Case No. 15-15311) on Nov. 1, 2015. Richard E. Mirman signed the petition as chief executive officer. Lobel Weiland Golden Friedman LLP serves as the Debtors' counsel. Freedom Communications Holdings estimated both assets and liabilities in the range of $10 million to $50 million. The Official Committee of Unsecured Creditors tapped Robert J. Feinstein, Esq. (E-mail: rfeinstein@pszjlaw.com) and Jeffrey W. Dulberg, Esq. (E-mail: jdulberg@pszjlaw.com) at Pachulski Stang Ziehl & Jones LLP as attorneys. The Committee's financial advisor is Alvarez & Marsal (Attn: Brian Whittman, E-mail: BWhittman@alvarezandmarsal.com). Counsel to the DIP Agent is Munger, Tolles & Olson LLP (Attn: Seth Goldman, Esq., E-mail: seth.goldman@mto.com). FREEPORT-MCMORAN INC: S&P Lowers CCR to BB, Altered Outlook to Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its corporate credit rating on Phoenix-based Freeport-McMoRan Inc. to 'BB' from 'BBB-'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's senior unsecured debt to 'BB' from 'BBB-' and assigned it a '3' recovery rating, indicating S&P's expectation of meaningful (50% to 70%; lower half of the range) recovery in the event of a payment default. S&P also lowered its rating on the preferred stock to 'B+' from 'BB'. "We estimate Freeport closed 2015 with adjusted leverage above 6x. We anticipate this will fall to around 4.5x if our pricing assumptions hold and the company meets its 2016 targets," said Standard & Poor's credit analyst Chiza Vitta. "The company continues to refine its operating plan, which includes significant cost and capital spending reductions, as well as increases in copper, gold, and oil production. The rating is heavily dependent on strengthening credit measures over the next 12 months to avoid our downside triggers, and the negative outlook is an acknowledgement that the plan ahead is aggressive and could be derailed by commodity price volatility and delays." S&P could lower the ratings if the company is unable to meet the production increases, cost reductions or capital spending decreases inherent in the current mine plan. Specifically, S&P could lower the ratings if it thought debt to EBITDA was likely to remain above 5x beyond 2016. S&P could also lower the rating if it no longer considered the company's business risk profile to be satisfactory. This could be the case if adjusted EBITDA margins remain below 25%. S&P could revise the outlook to stable if adjusted debt to EBITDA was sustained below 5x. This would most likely be the result of successfully implementing recently announced cost-cutting and margin-enhancing initiatives, such that the company returns to positive free discretionary cash flow (operating cash flow less capital spending less dividends). In addition, asset sale-funded debt repayments could accelerate the pace at which credit measures recover. GOT ROCK: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Got Rock, Inc. fdba D &L Turpin Enterprises, Inc. d/b/a Dave's Trucking 718 Hwy 82 E. #301 Sherman, TX 75090 Case No.: 16-40263 Chapter 11 Petition Date: February 12, 2016 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Hon. Brenda T. Rhoades Debtor's Counsel: Bill F. Payne, Esq. THE MOORE LAW FIRM, L.L.P. 100 North Main Street Paris, TX 75460-4222 Tel: (903) 784-4393 ext. 40 Email: lgarner@moorefirm.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by David R. Turpin, director. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. GRASS VALLEY: Green Valley's Estimation Bid Remanded to Bankr. Ct. ------------------------------------------------------------------ Judge David Nuffer of the United States District Court for the District of Utah, Central Division, denied the motion to remand and motion for extension filed by Garth O. Green Enterprises, Inc., Michael Green, Garth Green, GW Green Family Limited Partnership and Wendy Green, and referred the Grass Valley's motion for estimation to Bankruptcy Judge R. Kimball Mosier. The three motions were pending in the bankruptcy case for which the automatic reference to the bankruptcy court has been withdrawn. Judge Nuffer found that remand is not appropriate because the reasons set forth by the Green Parties were insufficient to support a remand. On this motion, the judge held that: -- remand is not appropriate simply because the motion to remand was filed on time; -- the court does not lack subject matter jurisdiction under Section 1334; -- the district court is not required to abstain from the removed State Court Action under Section 1334(c)(2); and -- although Standard Plumbing initially failed to comply with Rule 9027, the errors were not fatal to jurisdiction, and in any event, were cured within a reasonable time. As to the Green Parties' motion to extend the time for filing their opposition memorandum to Grass Valley's motion for estimation until after the court rules on their pending motion to remand, Judge Nuffer held that the Green Parties are incorrect that the motion for estimation will be rendered moot if the case is remanded to state court. The judge explained that even if the case is remanded, federal courts will still have jurisdiction over the estimation request because it is a proceeding brought under title 11. Finally, Judge Nuffer referred back to the bankruptcy court Green Valley's motion for estimation. The judge found that referral of the said motion is appropriate because it is brought under title 11 and the bankruptcy court has jurisdiction to hear and issue a decision on the said motion. The case is GARTH O. GREEN ENTERPRISES, INC., a Utah corporation; GARTH O. GREEN, an individual; and MICHAEL GREEN, an individual, Plaintiffs, Counterclaim Defendants, v. RANDALL HARWARD, an individual; RICHARD HARWARD, an individual; HARWARD IRRIGATION SYSTEMS, INC., a Utah corporation; GRASS VALLEY HOLDINGS, L.P.; RICHARD N. REESE, an individual; STANDARD PLUMBING SUPPLY COMPANY, INC., a Utah corporation; DOES 1-10; and ROE CORPORATIONS 1-X; Defendants, Counterclaim Plaintiffs, Case No. 2:15-cv-00556-DN (D. Utah). A full-text copy of Judge Nuffer's February 1, 2016 memorandum decision and order is available at http://is.gd/Pkuvl7from Leagle.com. Garth O. Green Enterprises, Garth O. Green, Michael Green and Wendy Green are represented by: Adam C. Dunn, Esq. Clifford V. Dunn, Esq. 1001 N. Main St., Suite A Bloomington, IL 61701 Tel: (309)828-6241 Fax: (309)828-8321 DUNN LAW FIRM -- and -- Marcus R. Mumford, Esq. MUMFORD PC 405 South Main Street, Suite 975 Salt Lake City, UT 84111 US Tel: (801)428-2000 -- and -- Steven W. Call, Esq. RAY QUINNEY & NEBEKER 36 South State Street, Suite 1400 Salt Lake City, UT 84111 Tel: (801)532-1500 Fax: (801)532-7543 Email: scall@rqn.com GW Green Family Limited Partnership is represented by: Steven W. Call, Esq. Elaine A. Monson, Esq. RAY QUINNEY & NEBEKER 36 South State Street, Suite 1400 Salt Lake City, UT 84111 Tel: (801)532-1500 Fax: (801)532-7543 Email: scall@rqn.com emonson@rqn.com Standard Plumbing Supply is represented by: James T. Burton, Esq. Ryan R. Beckstrom, Esq. KIRTON MCCONKIE World Trade Center 1800 World Trade Center 60 East South Temple Salt Lake City, UT 84111 Tel: (801)328-3600 Fax: (801)321-4893 Email: jburton@kmclaw.com rbeckstrom@kmclaw.com -- and -- Adelaide Maudsley, Esq. KIRTON MCCONKIE Kirton McConkie Building 50 East South Temple, Suite 400 Salt Lake City, UT 84111 Tel: (801)328-3600 Fax: (801)328-3600 Email: amaudsley@kmclaw.com Richard Reese is represented by: Ryan R. Beckstrom, Esq. KIRTON MCCONKIE World Trade Center 1800 World Trade Center 60 East South Temple Salt Lake City, UT 84111 Tel: (801)328-3600 Fax: (801)321-4893 Email: rbeckstrom@kmclaw.com -- and -- Adelaide Maudsley, Esq. KIRTON MCCONKIE Kirton McConkie Building 50 East South Temple, Suite 400 Salt Lake City, UT 84111 Tel: (801)328-3600 Fax: (801)328-3600 Email: amaudsley@kmclaw.com Grass Valley Holdings, Randall Harward, Richard Harward and Harward Irrigation Systems are represented by: Evan A. Schmutz, Esq. Aaron R. Harris, Esq. Kimberly N. Barnes, Esq. DURHAM JONES PINEGAR PC 3301 N. Thanksgiving Way, Suite 400 Lehi, UT 84043 Tel: (801)375-6600 Fax: (801)375-3865 Email: eschmutz@djplaw.com aharris@djplaw.com kbarnes@djplaw.com About Grass Valley Holdings, L.P. Based in Springville, Utah, Grass Valley Holdings, L.P., is a holding company for real property located in Utah as well as an interest in real property located in Idaho Falls, Idaho. Grass Valley Holdings commenced a Chapter 11 bankruptcy case (Bankr. D. Utah Case No. 15-24513) in Salt Lake City, Utah, on May 15, 2015. The Debtor disclosed $21,478,874 in assets and $13,187,245 in liabilities as of the Chapter 11 filing. The case is assigned to Judge R. Kimball Mosier. The Debtor is represented by Gary E. Jubber, Esq., and Douglas J. Payne, Esq., at Fabian and Clendinin, in Salt Lake City. GT ADVANCED: Has Deal Reducing Manz Admin. Claim to $375K --------------------------------------------------------- GT Advanced Technologies Inc. and its affiliated debtors ask the United States Bankruptcy Court for the District of New Hampshire to approve a settlement with Manz China Suzhou Ltd., and Manz AG. Under the Stipulation, Manz agrees to reduce its administrative expense claims to $375,000. Manz China is permitted to exercise its set off rights with respect to the approximately $31 million it owes to GT Hong Kong, and that no payments or distributions will be made from the chapter 11 estates or the reorganized Debtors, as applicable, on account of any secured claim asserted by Manz China. In addition, Manz will receive general unsecured claims in an aggregate amount of $6 million. According to the Debtors, the reduction in administrative expense claims will substantially benefit the general unsecured creditors and the chapter 11 estates. Absent the Stipulation, the Debtors would have to reserve cash in the amount of approximately $6.25 million on account of Manz's administrative expense claims, with no assurance that these claims would be resolved on better terms in the future following costly and time-consuming litigation with Manz. Furthermore, the Debtors tell the Court that Manz has agreed to support the Debtors' Plan and to vote all of its general unsecured claims to accept the Plan, which is another important step forward in the Debtors' efforts to emerge from chapter 11. GT Advanced Technologies Inc. and its affiliated debtors as debtors in possession are represented by: Luc A. Despins, Esq. Andrew V. Tenzer, Esq. James T. Grogan, Esq. G. Alexander Bongartz, Esq. PAUL HASTINGS LLP Park Avenue Tower 75 East 55th Street, First Floor New York, New York 10022 Telephone: (212) 318-6000 Facsimile: (212) 319-4090 Email: lucdespins@paulhastings.com andrewtenzer@paulhastings.com jamesgrogan@paulhastings.com alexbongartz@paulhastings.com -- and -- Daniel W. Sklar, Esq. Holly J. Barcroft, Esq. NIXON PEABODY LLP 900 Elm Street Manchester, NH 03101-2031 Telephone: (603) 628-4000 Facsimile: (603) 628-4040 Email: dsklar@nixonpeabody.com hbarcroft@nixonpeabody.com About GT Advanced Headquartered in Merrimack, New Hampshire, GT Advanced Technologies Inc. -- http://www.gtat.com/-- produces materials and equipment for the electronics industry. On Nov. 4, 2013, GTAT announced a multi-year supply deal with Apple Inc. to produce sapphire glass material for use in consumer electronics products. Under the deal, Apple would provide GTAT with a prepayment of approximately $578 million paid in four installments and, starting in 2015, GTAT would reimburse Apple for the prepayment over a five-year period. GT is a publicly held corporation whose stock was traded on NASDAQ under the ticker symbol "GTAT." GTAT was de-listed from the NASDAQ stock exchange in October 2014. As of June 28, 2014, the GTAT Group's unaudited and consolidated financial statements reflected assets totaling $1.5 billion and liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had $85 million in cash, $84 million of which is unencumbered. On Oct. 6, 2014, GT Advanced Technologies and eight affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D.N.H. Lead Case No. 4-11916). GT says that it has sought bankruptcy protection due to a severe liquidity crisis brought about by its issues with Apple. The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as attorneys and Kurtzman Carson Consultants LLC as claims and noticing agent. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee' professionals are Kelley Drye as its bankruptcy counsel; Devine, Millimet & Branch, Professional Association as local counsel; EisnerAmper LLP as financial advisors; and Houlihan Lokey Capital, Inc. as investment banker. GTAT has reached a settlement with Apple. The settlement gives Apple an approved claim for $439 million secured by more than 2,000 sapphire furnaces that GT Advanced owns and has four years to sell, with proceeds going to Apple. In addition, Apple gets royalty-free, non-exclusive licenses for GTAT's technology. The bankruptcy case is assigned to Judge Henry J. Boroff. * * * Judge Henry J. Boroff of the U.S. Bankruptcy Court for the District of New Hampshire on Feb. 2, 2016, approved the disclosure statement explaining GT Advanced Technologies, Inc., et al.'s joint plan of reorganization and scheduled the hearing to consider confirmation of the plan for March 3, 2016, at 10:00 a.m. (prevailing Eastern Time). To be counted as a vote, all Ballots must be received by no later than Feb. 26. Objections or responses to confirmation of the Plan must be received no later than Feb. 26. The Debtors may file and serve replies to the objections and a memorandum in support of confirmation of the Plan on or before Feb. 29. In connection with the Plan, the Financing Support Parties have committed $80 million of Exit Financing that will fund, in part, the Debtors' obligations under the Plan. Prior to the Disclosure Statement hearing, the Debtors amended the Plan outline to correct typographical errors. A blacklined version of the Disclosure Statement dated Feb. 1, 2016, is available at http://bankrupt.com/misc/GTAds0201.pdf HAGGEN HOLDINGS: Auction for 'Core' Stores Moved to Feb. 22 ----------------------------------------------------------- The auction of Haggen Holdings LLC's 33 stores in Oregon and Washington was moved to Feb. 22 from Feb. 11, according to a filing it made in U.S. Bankruptcy Court in Delaware. Haggen also rescheduled the sale hearing to Feb. 29 from Feb. 17. The grocery chain did not give a reason for the delay. A bidding process, approved in December last year by the court, allows the grocery chain to enter into a deal with a buyer that will serve as the stalking horse bidder at the auction. The stalking horse bidder will receive a breakup fee and reimbursement for its expenses if another bidder wins the auction. PNC Bank National Association, which provided financing to get Haggen through bankruptcy, can take part at the auction should it decide to credit bid, according to the bidding rules. Haggen considers the stores in Oregon and Washington as its "core" stores as they are "relatively successful" and are located in strategic locations, according to its lawyer, Robert Poppiti Jr., Esq., at Young Conaway Stargatt & Taylor LLP. Non-Core Store Sales Prior to its Chapter 11 filing, Haggen had conducted closing sales at its "non-core" stores. The grocery chain was allowed to continue the closing sales at its 27 stores on an interim basis after it filed for bankruptcy protection in September last year. On Oct. 15, the court gave final approval to the closing sales. Haggen also entered into separate sale transactions for its remaining "non-core" stores and other assets. The grocery chain won court approval to sell 32 stores operated by its affiliates to Smart & Final Stores LLC, which made a $68 million cash offer. Meanwhile, Haggen received a $14 million offer from Albertson's LLC to buy back 30 of the 146 stores it originally sold to the grocery chain. Judge Kevin Gross approved the sale on Nov. 24. On Dec. 14, the bankruptcy judge approved another deal in which Albertson's offered $875,000 to buy two additional stores located in San Marcos and Santa Barbara, California. Haggen sold its other stores to Balboa Retail LLC, Carnival Supermarket Inc., Gelson's Markets, Good Food Holdings LLC, SFM LLC, Stater Bros. Markets, Tawa Inc., Trails Village Center Co. and Yoke's Foods Inc. The sale of the Haggen store, located along W. Washington Street, San Diego, California, to Good Food is being appealed by Antone Corp. The landlord questioned the assumption and assignment of its lease with the grocery chain to the buyer while prohibiting the enforceability of a profit-sharing provision of the lease, according to court filings. 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. HEALTHWAREHOUSE.COM: Karen Singer Reports 6.2% Stake as of Dec. 31 ------------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, Karen Singer disclosed that as of Dec. 31, 2015, she beneficially owns 2,475,024 shares of common stock of HealthWarehouse.com, Inc., representing 6.2 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/olrTnb About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e-commerce company that sells brand name and generic prescription drugs as well as over-the-counter medical products. Healthwarehouse.com reported a net loss attributable to common stockholders of $2.08 million on $6.12 million of net sales for the year ended Dec. 31, 2014, compared with a net loss attributable to common stockholders of $7.3 million on $10.23 million of net sales in 2013. Marcum LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2014, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. As of Sept. 30, 2015, the Company had $1.06 million in total assets, $4.78 million in total liabilities and total stockholders' deficiency of $3.71 million. Bankruptcy Warning "The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, attempt to negotiate the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue its operation and /or seek reorganization under the U.S. bankruptcy code," the Company states in the report for the period ended Sept. 30, 2015. HECLA MINING: S&P Lowers Rating to 'B-' on Weaker Credit Measures ----------------------------------------------------------------- Standard & Poor's Ratings Services said it downgraded Coeur d'Alene, Idaho-based silver and gold producer Hecla Mining Co. to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered its issue-level rating on the company's senior unsecured notes to 'B-' from 'B'. The '4' recovery rating on the debt is unchanged, indicating S&P's expectation of average (30%-50%; upper half of the range) recovery in the event of a payment default. "The stable outlook reflects our expectation that Hecla Mining Co.'s liquidity, including approximately $175 million in cash at the end of the third quarter, will remain adequate over the next 12 months," said Standard& Poor's credit analyst Ryan Gilmore. "We also expect that Hecla will maintain FFO to debt below 12% and adjusted debt leverage in the 6x-7x range over the next 12 months." S&P would consider a downgrade if it no longer deemed liquidity to be adequate, possibly as a result of continued weakness in metals prices coupled with ongoing high levels of capital spending, or diminished covenant headroom. A negative rating action could also occur if EBITDA interest coverage were sustained below 1x, which could occur if metals prices remained weak or declined from current levels and 2016 EBITDA fell below $60 million, all else being equal. S&P would consider an upgrade if the company maintains credit measures near current levels while enhancing the business to a level S&P feels is commensurate with a weak business risk profile assessment. This could occur if current expansion and production targets are continually achieved or if the company enhanced its geographic or operating diversity. Separately, S&P could raise the rating if the company achieved sustainable improvement in credit measures, with debt to EBITDA of less than 5x and FFO to debt more than 12%. Note: S&P's forecast cash flow and leverage measures incorporate Standard & Poor's expectation for lower metals prices over the next 24 months as reflected in the latest metals price deck. If metals prices were sustained at levels higher than currently forecast -- for example, the price of gold were sustained at above $1,250 and expected to remain at higher levels -- S&P could revisit its forecast accordingly. HEPAR BIOSCIENCE: Amends Schedule of Secured Creditors ------------------------------------------------------ Hepar Bioscience LLC, filed with the U.S. Bankruptcy Court for the District of South Dakota amendment to: 1. Schedules B & D; 2. Schedule D -- Creditors who have claims secured by property; and 3. Amended Schedule A/B -- Real and Personal Property. According to the Debtor, it filed amendments to Schedules B & D, and notice of amendments on Dec. 22, 2015; however, it did not attach the Amended Schedule B as an exhibit, or the certificate of service. As reported in the Troubled Company Reporter on March 17, 2015, the Debtor filed a summary of schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,350,000 B. Personal Property $8,637,018 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $19,268,387 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $2,974,763 ----------- ----------- TOTAL $11,987,018 $22,243,151 Copies of the amendments are available for free at: http://bankrupt.com/misc/HeparBio_350_ASALS_B_D.pdf http://bankrupt.com/misc/HeparBio_352_ASALS_B_EXH.pdf http://bankrupt.com/misc/HeparBio_354_ASALS_D_EXH.pdf About Hepar BioScience Jefferson, South Dakota-based Hepar BioScience LLC in the business of receiving porcine (pork) by-products (concentrated peptone, a functional pork protein and animal fat) and other meat by-products that are primarily used in the porcine animal nutrition feed industry (concentrated porcine peptone) and biodiesel or animal feed business (animal fat). The Company filed a Chapter 11 bankruptcy petition (Bankr. D. S.D. Case No. 15-40057) on Feb. 20, 2015. Bankruptcy Judge Charles L. Nail, Jr., presides over the case. Clair R. Gerry, Esq., at Gerry & Kulm Ask, Prof. LLC, represents the Debtor in its restructuring effort. The Debtor disclosed $11,987,018 in assets and $22,243,151 in liabilities as of the chapter 11 filing. The U.S. Trustee for Region 12 appointed a five-member Official Committee of Unsecured Creditors. The Committee tapped James S. Simko of Cadwell, Sanford, Deibert & Garry, LLP as its counsel, and Duff & Phelps Securities, LLC as its valuation advis HEXION INC: S&P Revises Outlook to Negative on Refinance Risk ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on Ohio-based Hexion Inc. and revised the rating outlook to negative from stable. At the same time, S&P affirmed its 'CCC+' first-lien issue rating on the company's senior secured notes and 'CCC' rating on the remainder of the company's debt issues. The recovery rating on the first-lien notes remains '3', indicating S&P's expectation of meaningful (lower half of the 50%-70% range) recovery in the event of a default scenario. The recovery rating on the remainder of the company's debt issues remains '5', indicating modest (lower half of the 10%-30% range) recovery in a default scenario. "The outlook revision reflects the risk related to a successful refinancing of Hexion's credit facility maturing in 2018, which could come due as early as December 2017 depending on the amount outstanding under the company's 8.875% senior notes due 2018," said Standard & Poor's credit analyst Allison L Schroeder. "Volatile oil prices and currency headwinds also continue to challenge the company's future operating performance," she added. S&P expects funds from operations (FFO) to debt to be the in low-single-digit range and debt to EBITDA to remain above 10x over the next year or so. S&P could lower the ratings during the next year if liquidity weakens from less than adequate, increasing the likelihood that Hexion might not meet its payment obligations. This could occur if macroeconomic or industry conditions worsen materially, raw material costs spike, and Hexion is unable to pass cost increases on to its customers, capital spending exceeds S&P's expectations, there are additional sizable acquisitions, or if the shared services agreement with MPM is terminated or significantly amended. S&P could also lower the ratings if it believes that a debt restructuring is likely. Although S&P do not view the company's third quarter debt repurchase as distressed, S&P could lower the rating if it views any subsequent buybacks as distressed exchanges. S&P could increase the rating on Hexion if improvement to operating performance causes operating cash flow to consistently remain positive and liquidity strengthens to adequate. Although unlikely in the within the next year, S&P could raise the ratings slightly if the foregoing comes to pass, Hexion achieves and maintains an adjusted debt to EBITDA ratio of about 6x, and the financial sponsor appears unlikely to relever the company. HORSEHEAD HOLDING: Court Recognizes Case as Foreign Proceeding -------------------------------------------------------------- The Ontario Superior Court of Justice issued an initial order and a supplemental order recognizing (i) the Chapter 11 cases of Horsehead Holding Corp. as a foreign proceeding, and (ii) Zochem Inc. as foreign Representative of the Debtors. Persons or entities who wish to receive a copy of the Recognition Orders or obtain any further information should contact the information officer at: Richter Advisory Group Inc. in its capacity as Information Officer of Horsehead Holding Corp. et al. 181 Bay Street, Suite 3320, Bay Wellington Tower Attention: Pritesh Patel Tel: 416-642-9421 Fax: 416-488-3765 Email: ppatel@richter.ca Zochem can be reached at: Zochem Inc. 1 Tilbury Court Brampton, ON L6T 3T4 Tel: 742.773.2270 Email: gwhitaker@horsehead.net Zochem retained as counsel: Aird & Berlis LLP Brookfield Place, 181 Bay Street, Suite 1800, Box 754 Toronto, ON M5J 2T9 Attention: Sam Babe Tel: 416-865-7718 Fax: 416-863-1515 Email: sbabe@airberlis.com About Horsehead Holding Horsehead Holding Corp. is the parent company of Horsehead Corporation, a U.S. producer of specialty zinc and zinc-based products and a leading recycler of electric arc furnace dust; The International Metals Reclamation Company, LLC ("INMETCO"), a leading recycler of metals-bearing wastes and a leading processor of nickel-cadmium (NiCd) batteries in North America; and Zochem Inc., a zinc oxide producer located in Brampton, Ontario. Horsehead, headquartered in Pittsburgh, Pa., has seven facilities throughout the U.S. and Canada. The Debtors currently employ approximately 730 full-time individuals. Horsehead Holding Corp., Horsehead Corporation, Horsehead Metal Products, LLC, The International Metals Reclamation Company, LLC, and Zochem Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10287 to 16-10291) on Feb. 2, 2016. The petition was signed by Robert D. Scherich as vice president and chief financial officer. Judge Christopher S. Sontchi is assigned to the case. The Debtors have engaged Kirkland & Ellis LLP as general counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, RAS Management Advisors, LLC as financial advisor, Lazard Middle Market LLC as investment banker, Epiq Bankruptcy Solutions, LLC as claims and noticing agent and Aird & Berlis LLP as Canadian counsel. The Debtors disclosed total assets of $1 billion and total liabilities of $544.6 million. As of the Petition Date, the Debtors' consolidated long-term debt obligations totaled approximately $420.7 million. HTH LEARNING: Fitch Affirms 'BB+' Rating on 2008A/B Revenue Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings for the series 2008A (Media Arts) and 2008B (Chula Vista) educational facility revenue bonds (together, the pledged schools) issued by the California Municipal Finance Authority on behalf of HTH Learning (HTHL) at 'BB+' and 'BB', respectively: -- $4,365,000 (High Tech High projects) series 2008A (Media Arts) at 'BB+'; -- $18,200,000 (High Tech High projects) series 2008B (Chula Vista) at 'BB'. The Rating Outlook is Stable for both. SECURITY Lease payments received by HTHL from High Tech High Media Arts (HTHMA) secure the series 2008A bonds. Lease payments received by HTHL from High Tech High Chula Vista (HTHCV) secure the series 2008B bonds. HTHCV's series 2008B bonds also have a subordinate pledge of up to $600,000 annually from revenues generated by certain other HTHL schools, as well as a mortgage lien on the Chula Vista facility. Both bond series have a cash-funded debt service reserve. KEY RATING DRIVERS SPECULATIVE-GRADE CHARACTERISTICS: The 'BB+' and 'BB' ratings, respectively, reflect HTHMA and HTHCV's speculative-grade financial attributes, including high debt burdens, low balance sheet ratios consistent with the rating categories, and positive but modest debt service coverage. SEPARATELY SECURED BONDS: The series 2008A and the 2008B bonds are separately secured, warranting the distinct ratings. Fitch views HTHCV's credit profile (high debt burden and a debt service subsidy) as weaker than HTHMA's, supporting the one-notch rating distinction. SOLID DEMAND: Both HTHMA and HTHCV have demonstrated solid demand, supported by a network of HTHL elementary and middle school campuses that feed into the two high schools. LIMITED FINANCIAL FLEXIBILITY: Despite solid academic performance and favorable enrollment trends, both HTHMA and HTHCV operate in improving but still constrained financial environments. HTHCV relies on a debt service subsidy, although that subsidy continues to decline. Both schools are heavily dependent on state per-pupil funding, and both have very limited balance sheets. RATING SENSITIVITIES OPERATING PERFORMANCE: Weakened debt service coverage or operating performance for either High Tech High Media Arts or High Tech High Chula Vista, which is not presently expected, could negatively stress the respective rating. ELIMINATION OF SUBSIDY PAYMENTS: An elimination of the need for a subsidy payment combined with stable-to -improving debt service coverage and balanced operations could lead to an upgrade at High Tech High Chula Vista. STANDARD CHARTER RENEWAL RISK: A limited financial cushion; substantial reliance on enrollment-driven, per-pupil funding; and charter renewal risk are credit concerns common among all charter school transactions that, if pressured, could negatively impact the ratings. CREDIT PROFILE HTHL is the non-profit parent of several affiliates, including HTH, which operates 12 charter schools. The various schools operate on three campuses, with each campus housing a complement of elementary, middle and high schools to provide academic services. HTHL owns the facilities leased to the respective charter schools, and provides supervision, oversight and coordination across its affiliated charter schools. The organization received a large gift in fiscal 2014, allowing it to purchase a former public school site for a prospective fourth campus housing K-12 students. At this time, management is projecting renovations will cost $13.5 million to $15.5 million and will be funded with a mix of loans, internal reserves and possibly some gifts. A partial opening in fall 2018 and full build-out by 2020-21 is expected. All affiliate charter schools operate in San Diego County, CA, and management expects that geographic focus to continue. All of HTHL's charter schools are authorized by either the San Diego Unified School District (SDUSD) or under a statewide benefit charter from the State Board of Education (SBE). HTHCV is one of the SBE-authorized schools and opened in fall 2007. It serves over 630 grade 9-12 students. The school operates under a five-year charter that extends through June 2017. Fitch was unable to speak with SBE prior to publication. However, given HTHCV's strong student demand and stable financial position, management is not anticipating any issues with its charter renewal. HTHMA serves about 400 grade 9-12 students at the HTH Village in San Diego, and is one of several HTH schools located on a campus on a former Navy base in Pt. Loma. It was founded in fall 2005, and operates under a SDUSD charter; the current five-year charter extends through 2019. SDUSD reports a positive working relationship with HTHMA with the school in full compliance with charter standards. PLEDGED SCHOOLS FINANCIALLY STABLE The pledged schools maintained breakeven-to-positive operating margins over the past few years, even in years with state per-pupil aid reductions. Per-pupil aid is the dominant funding source for the schools, as is typical in California and with charter schools in general. Modest state per-pupil funding increases began in fiscal 2013, and continued in 2014 (about 3%-5% depending on the school) with larger increases in 2015 (about 12%) and 2016 (11%-14.5%). Management estimates a 4.5% increase for fiscal 2017. Fitch views the improved per-pupil funding environment, combined with solid demand and stable enrollment, as supporting positive operating performance. HTHMA generated a break-even or modestly positive margins in each of the past five fiscal years. The fiscal 2015 results were positive ($114,000 or a margin of 2.9%). This compares favorably to fiscal 2014 results of negative 0.2%. Slimmer results in fiscal 2014 were due to a one-time purchase of computer equipment. Margins for fiscal 2016 are projected to be positive. Coverage in fiscal 2015 of $620,000 annual debt service (equivalent to maximum annual debt service [MADS] and the annual HTHL lease obligation) remains positive; fiscal 2015 coverage was 2.5x. HTHCV receives a subsidy from other HTHL schools (the various Point Loma facilities) to meet its annual transaction MADS obligation of $1.2 million. With that subsidy, operations are consistently close to break-even, and debt service coverage is positive (1.3x in fiscal 2015). In fiscals 2013 and 2014, the subsidy was lowered to $450,000 from the pledged $600,000 due to stronger operations at HTHCV, and further reduced to $217,139 in fiscal 2015. For fiscal 2016 management is projecting the subsidy at $195,000. Recently HTHCV was awarded a three-year Charter School Facilities Incentive Grant in the amount of $187,500 per year which will allow the subsidy to be further reduced. Management reports the Point Loma Facilities have ample capacity to continue the subsidy at the maximum $600,000 level if required, but there is no expectation that the full amount will be needed in the future. Fitch views the moderating level of subsidization favorably and upgrade potential for HTHCV exists if the subsidy is eliminated, debt service coverage remains stable to improving, and operations are balanced. SLIM BALANCE SHEETS The balance sheet cushions at each of the schools remain extremely narrow relative to the rating category. Liquidity remains a significant credit concern, as is the case for many other Fitch-rated charter schools. For HTHCV, available funds (AF; unrestricted cash and investments) on June 30, 2015 declined to $688,000 (from $858,000), equal to a slim 11.8% of expenses (15.5% in fiscal 2014) and 3.7% of debt (4.7% in fiscal 2014). For HTHMA, AF improved to $473,000, still a narrow 12.3% of expenses and 10.7% of debt. HTH management reports that liquidity is managed on a pooled basis at the HTHL and Affiliates level. At June 30, 2015, AF for HTH Learning and Affiliates was approximately $15 million, up from $12.6 million the prior year. AF in fiscal 2015 was equal to 30.4% of expenses and 20% of pro forma debt ($75 million, including the $22.6 million series 2008A and B bonds). Fitch included a $2 million bank line in the pro forma debt calculation. While HTHL and Affiliate's balance sheet is stronger than that of the pledged schools, not all is pledged or available for series 2008A or 2008B debt service. STRONG STUDENT DEMAND Strong student demand at the pledged schools supports operating performance. At HTHMA, enrollment for fall 2015 remained stable and consistent with budget, with 400 students. At HTHCV, enrollment increased to 639 in fall 2015 from 626 in fall 2014 and above the 618 budget. Management is trying to reduce enrollment to a more ideal 560-580, but has not been successful because prior year freshman classes were larger and had strong retention rates. Management expects enrollment will moderate at HTHCV within the next year or two. Both schools are routinely over-subscribed with 2-3 times the applications for every available seat. As such, they use lotteries to select students. MIXED DEBT BURDEN RATIOS HTHMA's debt burden is consistently high but has declined to a more manageable 15.6% of operating revenues from 18% in 2011. Fitch bases this calculation on the $620,000 annual lease payment due to HTHL. Actual series 2008A bond debt service is less. Transaction MADS debt burden remains high at 15.5% in fiscal 2015, but has moderated from 18.4% in fiscal 2010. In fiscal 2015, MADS was 5.8x net income available for debt service, a level more favorable than most Fitch-rated charter schools. HTHCV's ratios are substantially weaker, reflecting the younger age of the school, higher debt leverage, and reliance on a pledged debt service subsidy from other HTH charter schools at the Point Loma campus. TMADS represented 21% of fiscal 2015 operating revenues, slightly lower than the prior two years but one which Fitch considers still very high. Similarly, total debt represented a high 11.6x net available income. INTERPARK INVESTORS: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Interpark Investors, LLC 8608 W Catalpa Ave, Suite 806 Chicago, IL 60656 Case No.: 16-04404 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: February 12, 2016 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Carol A. Doyle Debtor's Counsel: Peter J Roberts, Esq. SHAW FISHMAN GLANTZ & TOWBIN LLC 321 North Clark St, Suite 800 Chicago, IL 60654 Tel: 312-276-1322 Fax: 312-980-3888 Email: proberts@shawfishman.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by John J Fitzmaurice, manager of Interpark Manager, LLC, the Debtor's manager. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alis & Co. Note/Interest $677,677 30 N. LaSalle Street Suite 1232 Chicago, IL 60602 Katten Muchin Legal Fees $619,080 Rosenman LLP David R. Shevitz 525 W Monroe Street Chicago, IL 60661 David R. Shevitz Notes/Interest $343,221 c/o Katten Muchin 525 W. Monroe Chicago, IL 60661 Mark Thomas Trust Notes/Interest $122,056 Michael Murphy Notes/Interest $121,931 McIntosh Limited Partnership Notes/Interest $115,549 Herbert S. Wander Revocable Trust Notes/Interest $99,360 Melvin E. Pearl Notes/Interest $97,608 Joseph & Delores Weber Notes/Interest $94,756 Thomas Tulley LTD Legal Fees $94,277 Howard M. Richard Notes/Interest $93,068 Entrust Group FBO Notes/Interest $81,287 Alan D. Croll Notes/Interest $81,287 Alan Croll Ttee for Notes/Interest $75,652 Robert F. Croll Alan Croll Ttee for Notes/Interest $75,652 Anthony F. Croll Alan Croll Ttee for Notes/Interest $75,652 Daniel V. Croll C&L Construction Services $59,486 Floyd A. Mandell Notes/Interest $56,901 Michael Hartz Notes/Interest $50,068 City of Chicago Department of $47,920 Revenue JAMES RIVER COAL: BNP Paribas Unit Owns 6.4% Equity Stake --------------------------------------------------------- BNP Paribas Arbitrage, SNC and BNP Paribas Securities Corp. filed with the Securities and Exchange Commission a SCHEDULE 13G (Amendment No. 6), disclosing their beneficial ownership of James River Coal Co. common stock. Specifically, BNP Paribas said they may be deemed to beneficially own 2,476,600 shares or roughly 6.4% of the Debtor's Common Stock. BNP Paribas may be reached at: Paul Drumm Managing Director BNP Paribas Securities Corp. 787 Seventh Ave. New York, NY 10019 Tel: (212) 841-2724 About James River Coal James River Coal Company is a producer and marketer of coal in the Central Appalachia ("CAPP") and the Midwest coal regions of the United States. James River's principal business is the mining, preparation and sale of metallurgical coal, thermal coal (which is also known as steam coal) and specialty coal. James River and 33 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in Richmond, Virginia, on April 7, 2014. The petitions were signed by Peter T. Socha as president and chief executive officer. Judge Kevin R. Huennekens oversees the Chapter 11 cases. On the petition date, James River Coal disclosed total assets of $1.06 billion and total liabilities of $818.6 million. The Debtors are represented by Tyler P. Brown, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq. at Hunton & Williams LLP of Richmond, VA and Marwill S. Huebner, Esq, Brian M. Resnick, Esq., and Michelle M. McGreal, Esq. at Davis Polk & Wardwell LLP of New York, NY. Kilpatrick Townsend & Stockton LLP serves as the Debtors' special counsel. Perella Weinberg Partners L.P. is the Debtors' financial advisor. Deutsche Bank Securities Inc. serves as the Debtors' investment banker and M&G advisor. Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice, claims and administrative agent. The U.S. Trustee for Region 4 has appointed five creditors to the Official Committee of Unsecured Creditors. Michael S. Stamer, Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq., Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at LeClairRyan. The Debtors, in August 2014, won authority to sell the Hampden Mining Complex (including the assets of Logan & Kanawha Coal Company, LLC), the Hazard Mining Complex (other than the assets of Laurel Mountain Resources LLC) and the Triad Mining Complex for $52 million plus the assumption of certain environmental and other liabilities, to a unit of Blackhawk Mining. The Buyer is represented by Mitchell A. Seider, Esq., and Charles E. Carpenter, Esq., at Latham & Watkins LLP. * * * James River Coal has filed a bankruptcy-exit Plan that contemplates the liquidation and dissolution of the Debtors and the resolution of all outstanding claims against, and interests in, the Debtors. A copy of the Disclosure Statement for the Liquidating Plan filed Dec. 22, 2015, is available for free at: http://bankrupt.com/misc/James_River_1565_DS_Liq_Plan.pdf The Bankruptcy Court has approved the adequacy of the disclosure statement describing the Chapter 11 plan, and set March 3, 2016, at 4:00 p.m. (prevailing Eastern Time) as deadline to vote on the Debtors' plan. A hearing is scheduled for March 10, 2016, at 1:00 p.m. (prevailing Eastern Time) to confirm the Debtors' plan. Objections to the confirmation of the Debtors' plan must be filed no later than 4:00 p.m. (prevailing Eastern Time) on March 3, 2016. JEVIC TRANSPORTATION: Truckers Tell High Court Case Has High Stakes ------------------------------------------------------------------- Patrick Boyle at Bankruptcy Law360 reported that some 1,200 truckers have shot back at their former company's argument that the U.S. Supreme Court shouldn't hear their challenge to a bankruptcy settlement that ignores their $12.4 million in claims, saying the deal upends federal law guiding which creditors take priority. The Third Circuit's dismissal of their suit last year conflicts with other circuit court rulings and is likely to affect more bankruptcy cases because it casts doubt on whether courts must follow the priority scheme dictated in federal bankruptcy law, the truckers said in a Feb. 2 response to Jevic Holding Corp.'s contention that the settlement involves a rare circumstance that is unlikely to apply elsewhere. The truckers are represented by Jack A. Raisner and Rene S. Roupinian of Outten & Golden LLP, Christopher D. Loizides of Loizides PA, and Craig Goldblatt, Danielle Spinelli and Matthew Guarnieri of WilmerHale. Jevic Holding Corp. is represented by Christopher Landau of Kirkland & Ellis LLP. The case is Casimir Czyzewski et al. v. Jevic Holding Corp. et al., case number 15-649, in the U.S. Supreme Court. About Jevic Transportation Based in Delanco, New Jersey, Jevic Transportation Inc. -- http://www.jevic.com/-- provided trucking services. Two affiliates -- Jevic Holding Corp. and Creek Road Properties -- have no assets or operations. Jevic et al. sought Chapter 11 protection (Bankr. D. Del. Case No. 08-11008) on May 20, 2008. Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers, in Wilmington, Del., represented the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Robert J. Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Before filing for bankruptcy, the Debtors initiated an orderly wind-down process. As a part of the wind-down process, the Debtors ceased substantially all of their business and terminated roughly 90% of their employees. The Debtors continue to manage the wind-down process in an attempt to deliver all freight in their system and to retrieve their assets. When the Debtors sought protection from their creditors, they estimated assets and debts between $50 million and $100 million. At Oct. 31, 2010, the Debtor had total assets of $425,000, total liabilities of $12.2 million, and a stockholders' deficit of $11.8 million. KRONOS WORLDWIDE: S&P Lowers CCR to 'B', Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Dallas-based Kronos Worldwide Inc.'s to 'B' from 'B+'. The outlook is stable. At the same time, S&P revised the recovery rating on the company's $350 million term loan B to '2' from '3'. The issue-level rating remains 'B+'. The '2' recovery rating indicates S&P's expectation of substantial (lower end of the 70% to 90% range) recovery in the event of a payment default. "The downgrade reflects our forecast for weaker-than-expected credit measures, with weighted-average debt to EBITDA of above 5x," said Standard & Poor's credit analyst Brian Garcia. "As a result, we have revised our assessment of the company's financial risk profile to highly leveraged from aggressive," he added. S&P's base case assumes a slower recovery in titanium dioxide (TiO2) industry conditions than previously expected. Despite the expectation for some modest improvement in prices from weak 2015 levels, S&P believes that the supply-demand imbalance in the TiO2 sector will persist and continue to depress earnings. The stable outlook on Kronos Worldwide Inc. reflects S&P's expectation that industry conditions will gradually improve from depressed 2015 levels, supporting adequate liquidity and an improvement in credit measures. S&P also expects that management will maintain a prudent approach to funding growth and returns to shareholders. Over the next year, S&P expects Kronos to maintain leverage measures appropriate for the rating, including debt to EBITDA between 5x and 6x on a weighted average sustainable basis. At the current rating S&P also expects the group credit profile to remain unchanged. S&P could lower the ratings in the next 12 months if it expects pressure from weak TiO2 prices to continue longer than expected, as well as weaker-than-expected end market demand. In this scenario, S&P would expect debt to EBITDA to remain above 7x, without near-term prospects for improvement. S&P could also lower the ratings if the company uses additional debt to fund growth plans or returns to shareholders. Additionally, to lower the ratings, S&P's downside scenario would have to lead to a weakening of the group credit profile. S&P could raise the ratings in the next 12 months if the TiO2 industry conditions and Kronos' operations stabilize to the point where S&P expects the company to maintain debt to EBITDA below 4x on a weighted average sustainable basis. For this to occur S&P would look for evidence of steadier end market demand and raw material input prices. To raise the ratings, the group credit profile would also need to strengthen as a result of more stabilized industry conditions in S&P's upside scenario. LAZARD GROUP: Moody's Puts Ba1 CFR on Review for Upgrade -------------------------------------------------------- Moody's Investors Service has placed the ratings of Lazard Group LLC on review for upgrade, including its Ba1 corporate family rating and Ba1 senior unsecured debt rating. Moody's has taken these rating actions: Corporate family rating, Ba1 on review for upgrade Senior unsecured debt rating, Ba1 on review for upgrade Senior unsecured shelf rating, (P)Ba1 on review for upgrade Subordinate shelf rating, (P)Ba2 on review for upgrade RATINGS RATIONALE Moody's said there is upward pressure on Lazard's ratings following its reported 2015 results that demonstrated a sustained level of discipline in its compensation practices. This cost discipline, and strong revenues driven by a buoyant M&A advisory environment, have improved Lazard's key credit metrics, said Moody's. Moody's said that Lazard's credit strengths include a strong brand and agency-based business model, a broadly diversified business and geographical mix, and a liquid balance sheet. In reviewing Lazard for upgrade, Moody's said it would focus on the resiliency of its business model should the M&A advisory market soften and Lazard's asset management activities become affected by a significant and prolonged market downturn. Moody's said Lazard's cash flow generating capacity would be pressured in such a scenario, although this would likely be mitigated to some extent by growth in Lazard's corporate restructuring advisory business under such adverse economic conditions. Moody's said management's ability to remain within its stated through-the-cycle cost control targets, without damaging its franchise value, would become a key factor in its ability to weather such a downturn and maintain a reasonable level of credit strength at the bottom of the cycle. In addition to reviewing Lazard's financial resiliency, Moody's said it would assess Lazard's capital allocation policies, and how these might develop in the future. What Could Change the Rating -- UP Lazard could be upgraded should Moody's conclude that its improved cost discipline is sufficiently rigorous to sustain a reasonable debt service capacity at the bottom of the economic cycle, and which would accelerate the company's improved results in a subsequent upturn. Moody's said an upgrade would also be dependent upon its assessment of how Lazard's capital allocation policies might evolve over time, particularly with respect to the balance between creditor and shareholder interests. What Could Change the Rating -- DOWN Moody's said downward rating pressure is unlikely to develop in the short term, given that Lazard's ratings are on review for upgrade. A significant and prolonged deterioration in debt leverage would be viewed negatively, as would a sharp escalation in compensation costs as a percentage of revenues, said Moody's. Moody's added that downward rating pressure could also develop if Lazard's significant balance sheet cash was materially reduced without a commensurate reduction in debt. The methodologies used in these ratings were Global Securities Industry Methodology published in May 2013 and Asset Managers: Traditional and Alternative published in December 2015. LEVEL 3: Southeastern Asset Reports 9.2% Stake as of Feb. 12 ------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission on Feb. 12, 2016, Southeastern Asset Management, Inc. disclosed that it beneficially owns 32,931,724 shares of common stock of Level 3 Communications, Inc., representing 9.2 perent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/L9WZJX About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. * * * In September 2015, Fitch Ratings has upgraded the Issuer Default Rating (IDR) assigned to Level 3 Communications, Inc. (LVLT) and its wholly owned subsidiary level 3 Financing, Inc. (Level 3 Financing) to 'BB-' from 'B+'. The rating action recognizes LVLT's strengthening financial and operating profile as the company completes the integration of tw telecom, Inc. In June 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Level 3 to 'B' from 'B-'. "The upgrade reflects improved debt leverage, initially from the acquisition of the lower-leveraged Global Crossing in October 2011, and subsequently from realization of the bulk of what the company expects to eventually be $300 million of annual operating synergies," said Standard & Poor's credit analyst Richard Siderman. As reported by the TCR on Aug. 17, 2015, Moody's Investors Service upgraded Level 3 Communications, Inc.'s corporate family rating (CFR) to Ba3 from B2. Level 3's Ba3 CFR is based on the company's solidifying business and financial profiles as it integrates the former tw telecom, inc., with Moody's anticipating continued margin improvement as synergies are realized, and as higher margin Internet Protocol-based services replace legacy services. LOUISIANA OILFIELD: Court Refuses to Lift Stay for Injured Workers ------------------------------------------------------------------ Judge Robert Summerhays of the United States Bankruptcy Court for the Western District of Louisiana, Lafayette Division, granted the motion filed by Louisiana Oilfield Contractors Association Insurance Fund with respect to non-employer direct claims by injured workers. The judge also granted in part and denied in part the motions for relief from automatic stay filed by Kelvin Hoyt, Richard Kozma, and Westley Bourg. Early in LOCA's chapter 11 bankruptcy case, the court entered an order extending the stay to all actions and proceedings against members of LOCA on the grounds that any such claims were property of the bankruptcy estate. Subsequently, the Movants sought relief from the stay to pursue claims against their employers who were members of LOCA. The Movants also sought to expand liability to LOCA member companies who did not employ them, solely by virtue of their membership in the fund. The Movants based their claim on LSA-R. S. 23:1196F which provides that the members of a group self-insurance fund, like LOCA, are "liable in solido for liabilities of the fund." LOCA then sought a ruling that these claims are property of the estate and that the Movants do not possess independent claims against LOCA members who did not employ them. Judge Summerhays found that LSA-R. S. 23:1196F does not support an independent private cause of action or the expansion of workers' compensation liability advocated by the Movants. The judge explained that the text of the said provision imposes in solido liability with respect to "liabilities of the fund," not with respect to individual workers' compensation claims. Accordingly, Judge Summerhays granted LOCA's motion requesting a ruling that the Movants do not have independent claims against the LOCA members who did not employ them and that they are barred by the automatic stay from pursuing any such claims. The judge also denied the Movants' motions for relief with respect to claims against these LOCA members. Judge Summerhays, however, granted the Movants' motion for relief from the stay to pursue claims against their employers because these claims arise out of the Louisiana Workers Compensation Law, and are not affected by LSA-R.S. Sections 1191 et seq. per section 1196E. The case is IN RE: LOUISIANA OILFIELD CONTRACTORS ASSOCIATION INSURANCE FUND, Chapter 7, Debtor, Case No. 14-51518 (Bankr. W.D. La.). A full-text copy of Judge Summerhays' January 27, 2016 reasons for decision is available at http://is.gd/Y05ODwfrom Leagle.com. Louisiana Oilfield Contractors Association Insurance Fund is represented by: H. Kent Aguillard H. KENT AGUILLARD P.O. Drawer 391 Eunice, LA 70535 Tel: (337) 457-9331 E-mail: kaguillard@yhalaw.com US Trustee is represented by: Gail Bowen McCulloch, Esq. OFFICE OF THE US TRUSTEE 300 Fannin St, Rm 3196 Shreveport, LA 71101-3079 Tel: (318)676-3550 LUIS BURGOS: Goldsmith, US Trustee Deadline to File Briefs Extended ------------------------------------------------------------------- Judge Jennifer A. Dorsey of the United States District Court for the District of Nevada granted the stipulation filed by Tracy Hope Davis, the United States Trustee for Region 17, and Jonathan B. Goldsmith for an extension of time to file their briefs. Goldsmith filed a notice of appeal of a bankruptcy order (1) granting the Trustee's motion for disgorgement of fees pursuant to 11 U.S.C. Section 329 that were paid to Goldsmith; and (2) denying Goldsmith's request for allowance of fees and expenses pursuant to 11 U.S.C. Section 330. The scheduling order provides that appellant Goldsmith's opening brief is due by January 29, 2016, that appellee Trustee's answering brief is due on February 15, 2016, and that a reply brief by the appellant is due on March 2, 2016. Goldsmith and the Trustee sought an extension in order to have an opportunity to engage in settlement discussions. Judge Dorsey granted the requested extension, which allows Goldsmith until February 29, 2016 to file an opening brief, and gives the Trustee 30 days after service of the appellant's opening brief to file a response brief. Any reply by the appellant is to be filed 14 days after service of the appellee's responsive brief. The case is In re: JONATHAN B. GOLDSMITH, Appellant, v. UNITED STATES TRUSTEE, Appellee, Case No. 2:15-cv-2473-JAD (D. Nev.). A full-text copy of Judge Dorsey's January 20, 2016 order is available at http://is.gd/oi9oaKfrom Leagle.com. Jonathan B. Goldsmith is represented by: Jonathan B. Goldsmith, Esq. 617 Hoover Ave Las Vegas, NV 89101 Tel: (702)818-4739 Email: jonathan@vegaslawsite.com United States Trustee is represented by: Brian E. Goldberg, Esq. Terri H. Didion, Esq. OFFICE OF THE UNITED STATES TRUSTEE 300 Las Vegas Boulevard South, Suite 4300 Las Vegas, NV 89101 Tel: (702)388-6600 Fax: (702)388-6658 LUVU BRANDS: Posts $224,000 Net Income for Second Quarter --------------------------------------------------------- Luvu Brands, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $224,392 on $4.88 million of net sales for the three months ended Dec. 31, 2015, compared to net income of $197,625 on $4.29 million of net sales for the same period in 2014. For the six months ended Dec. 31, 2015, the Company reported net income of $2,157 on $8.60 million of net sales compared to net income of $113,302 on $7.87 million of net sales for the six months ended Dec. 31, 2014. As of Dec. 31, 2015, the Company had $3.88 million in total assets, $6.11 million in total liabilities and a total stockholders' deficit of $2.22 million. As of Dec. 31, 2015, the Company has an accumulated deficit of $8,895,330 and a working capital deficit of $1,456,721. This, according to the Company, raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/4L5yJ0 About Luvu Brands Luvu Brands, Inc., formerly known as Liberator, Inc., is a U.S.-based manufacturer that has built several brands in the wellness, lifestyle and casual furniture and seating categories. Its brands are headquartered in Atlanta in a 140,000 square foot manufacturing facility. LUZERNE COUNTY: S&P Affirms 'BB+' GO Debt Rating, Off CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services has affirmed its 'BB+' long-term and underlying rating on Luzerne County, Pa.'s general obligation (GO) debt and removed it from CreditWatch. The outlook is negative. "The removal from CreditWatch reflects our opinion that the county has remedied our short-term concerns regarding debt repayment," said Standard & Poor's credit analyst Timothy Little, "while the negative outlook reflects our view of continued fiscal pressure given uncertainty around state funding and persistent structural budget imbalance that will require various fiscal adjustments in a timely manner to stabilize liquidity." The bonds are secured by the county's full faith, credit, and unlimited taxing power pledge. "The non-investment-grade rating and negative outlook reflect our very weak assessment of management conditions based on a structural imbalance and political instability and gridlock that have weakened the county's financial position and operations," said Mr. Little. The council's adopted 2016 budget was largely divergent from what was proposed by management and, in S&P's opinion, demonstrates a lack of willingness to meaningfully replenish its reserves. Furthermore, despite a change in management through the recent departure of its county manager and three new members of the county council, if the county does not enact significant structural reforms or a structurally sound 2017 budget, S&P's view of management conditions will likely remain very weak because the lack of reforms will place further pressure on the rating. "The rating is further constrained by the county's significantly negative reserve positon over the past three years that we do not expect to significantly improve in the near term," said Mr. Little, "and its current structural imbalance based on prior-year history." Other factors include its adopted 2016 budget's reliance on non-recurring revenues, and uncertainty regarding fiscal 2017's budget. These factors create uncertainty as to whether the county can address its significantly diminished reserve position and place downward pressure on the rating. "The negative outlook reflects our view that the county's credit rating could be lowered further if structural reforms are not implemented or liquidity worsens," added Mr. Little. "It also reflects the county's very weak flexibility that we do not expect to substantially improve in the near term and our very weak assessment of management. The fiscal position of the county remains tenuous as it continues to financially recover. In our opinion, the actions by the county over the last three months have been materially negative and are consistent with a non-investment-grade rating," S&P said. However, in S&P's opinion, the county has options to return to structural balance and improve its liquidity. Should it demonstrate a track record of fiscal adjustments that stabilize reserves and liquidity, S&P may revise the outlook to stable. MAGNUM HUNTER: Continuum Wants Plan Outline to Discuss Its Claims ----------------------------------------------------------------- Continuum Midstream, L.L.C., and Continuum Energy Services, L.L.C., object to the Disclosure Statement explaining Magnum Hunter Resources Corporation, et al.'s Chapter 11 plan. Continuum Energy, formerly known as Seminole Energy Services, L.L.C., et al., is an integrated energy products and services company with dual headquarter offices in Houston, Texas and Tulsa, Oklahoma. Natural gas production from the southern Appalachian Basin properties of Magnum Hunter Production, Inc. ("MHP"), one of the Debtors, is delivered and sold through gas gathering facilities owned by Continuum Energy and located in Southeastern Kentucky, northeastern Tennessee, and western Virginia -- Continuum Energy Gathering System. As of the Petition Date, Continuum Energy and affiliated companies were owed over $6 million in pre-petition claims arising under these Agreements, and were listed by the Debtors as the second largest unsecured creditor. Subsequent to the Petition Date, the parties have engaged in preliminary discussions to restructure certain of these Agreements. The parties so far have not reached agreement concerning restructuring of the Agreements or the treatment of Continuum Energy's pre-petition cure claims. "Discussion of the impact of the Debtors' business plan regarding the Agreements with Continuum Energy may be crucial to the distributions to the Debtors' creditors and to the feasibility of the Plan. Yet, the Disclosure Statement is devoid of any discussion of the Agreements, including a description of the Debtors' interests in and obligations under the Agreements and the impact that assumption or rejection of the Agreements will have on the Debtors' reorganization efforts and the Debtors' underlying acreage and production that are served by the Agreements. For instance, if the Debtors' reject the Agreements, they will not be able to provide natural gas service to some of their customers and the customers may not have any other source to obtain the natural gas. Further, the Continuum Energy Gathering System is the only known way for the Debtors to get the natural gas and NGLs to market so the Debtors may be forced to shut in the production and wells that feed into the gathering system. The economic impact on the Debtors of shutting in that production and cutting off some of the Debtors' customers has not been disclosed or discussed in the Disclosure Statement," Continuum said in its objection. "Additionally, assuming the Debtors elect to reject the Agreements, the Debtors have scheduled what they believe are the pre-petition amounts due to Continuum Energy under the Agreements at no less than $6,188,867, which Continuum believes may increase upon final reconciliation. If this claim is allowed, Continuum could be the largest unsecured creditor participating in distributions from the Unsecured Creditor Cash Pool reserved for allowed unsecured claims under the Plan and its claim will significantly dilute the monies available for distribution to general unsecured creditors in the cases." "The Disclosure Statement presently represents that general unsecured creditors will receive a distribution of approximately 52% (subject to adjustment for professional fees, claims objections, etc.), based upon the Debtors' estimate of unsecured claims and the amount to be set aside in the Unsecured Creditor Cash Pool. However, the impact of Continuum Energy's claims, as well as the claims of any other similarly situated contract parties (which may significantly reduce the proposed distribution) has not been adequately disclosed to creditors," Continuum avers. Continuum Energy joins in the objections to the Disclosure Statement raised by other parties-in-interest, to the extent applicable to its interests. Continuum Energy expressly reserves all objections to confirmation of the Debtors' Plan. Co-Counsel for Continuum Midstream, L.L.C. and Continuum Energy Services, L.L.C.: Natalie D. Ramsey, Esq. Laurie A. Krepto, Esq. Joseph O'Neil, Esq. MONTGOMERY MCCRACKEN WALKER & RHOADS, LLP 1105 North Market Street, Suite 1500 Wilmington, DE 19801 Telephone: (302) 504-7800 Facsimile: (302) 504-7820 E-mail: nramsey@mmwr.com lkrepto@mmwr.com joneil@mmwr.com - and - Steven W. Soule, Esq. John Richer, Esq. Hall Estill, Esq. 320 South Boston Avenue Tulsa, OK 74103-3706 Telephone: (918) 594-0466 Facsimile: (918) 594-0505 E-mail: ssoule@hallestill.com jricher@hallestill.com About Magnum Hunter Magnum Hunter Resources Corporation is an oil and gas company headquartered in Irving, Texas that primarily is engaged in the acquisition, development, and production of oil and natural gas reserves in the United States. MHRC and its affiliates own interests in approximately 431,643 net acres in total and have proved reserves with an industry value of approximately $234.5 million as of December 31, 2015. In the aggregate, MHRC generated approximately $391.5 million in revenue from their operations in 2014 and generated approximately $169.3 million in revenues from their operations for the ten months ended October 31, 2015. 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 petitions were signed by Gary C. Evans as chairman and chief executive officer. 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. As of Sept. 30, 2015, the Debtors reported approximately $1.1 billion in total liabilities, as well as $416.3 million in stated value of preferred stock. The Debtors' significant funded debt obligations include: (a) approximately $70 million in principal amount of obligations under the Debtors' Bridge Financing Facility; (b) approximately $336.6 million in principal amount of obligations under the Debtors' second lien credit agreement; (c) approximately $13.2 million in principal amount of Equipment and Real Estate Notes; and (d) approximately $600 million in principal amount of Notes. MAGNUM HUNTER: Disclosure Statement Hearing Adjourned to Feb. 19 ---------------------------------------------------------------- Counsel to Magnum Hunter Resources Corporation and its debtor-affiliates notified the U.S. Bankruptcy Court that the Feb. 11 hearing on the Disclosure Statement explaining their proposed bankruptcy-exit plan has been adjourned to Feb. 19, 2016, at 1:00 p.m., prevailing Eastern time. Objections to approval of the Disclosure Statement were filed by (a) Continuum Midstream, L.L.C., and Continuum Energy Services, L.L.C., and (b) Kanbar Spirits, Inc., and the Maurice S. Kanbar Revocable Trust under agreement dated June 7, 2001, with the objectors asking that their agreements with the Debtors included in the Disclosure Statement. Another objection was filed by Arjun S. Rautela, who is acting pro se, and wants an equity committee to evaluate the inconsistent asset values presented by the Debtors. The Debtors have proposed a voting record date of Feb. 11, 2016, a March 21 deadline to cast votes, and a March 28 plan confirmation hearing. Debt-for-Equity Plan As reported in the Jan. 22, 2016 edition of the TCR, Magnum Hunter Resources and its affiliated debtors filed a proposed Chapter 11 plan of reorganization that provides for the reorganization of the Debtors as a going concern through a debt-for-equity conversion of substantially all of the Debtors' remaining pre- and postpetition funded indebtedness. The key element of the Plan is the agreement of creditors to convert their pre- and postpetition funded debt claims, including the DIP facility claims of up to $200 million, second lien claims of $336.6 million, and note claims of $600 million, into new common equity. Specifically, the DIP Facility Lenders shall receive their pro rata share of 28.8 percent of the new common equity, the second lien lenders will receive their Pro Rata share of 36.87 percent of the New Common Equity, and the Noteholders shall receive their Pro Rata share of 31.33 percent of the New Common Equity (all of which is subject to dilution by the Management Incentive Plan). Moreover, the holders of the equipment and real estate notes with principal totaling $13.2 million will have their claims reinstated. The holders of general unsecured claims will receive their pro rata share of the unsecured creditor cash pool. It is currently intended that the unsecured creditor cash pool will be $20,000,000, which amount may be subject to the costs of any professional fees or other expenses incurred as part of the claims reconciliation process. The Disclosure Statement still has blanks as to the projected total amount of unsecured claims and the estimated percentage recovery by the class. The terms of the prearranged restructuring are set forth in a Restructuring Support Agreement, which was signed by parties holding in the aggregate of approximately 75 percent in principal amount of the Debtors' prepetition funded debt. Specifically, the Restructuring Support Agreement was executed by (a) holders of substantially all of the outstanding principal amount under the $70 million bridge financing facility, (b) holders of approximately 66.5 percent of the outstanding principal amount under the Second Lien Credit Agreement, and (c) holders of approximately 79 percent of the outstanding principal amount of the Notes. A copy of the Disclosure Statement and Plan filed Jan. 7, 2016, is available for free at: http://bankrupt.com/misc/Magnum_H_213_DS.pdf The Debtors' attorneys: Laura Davis Jones, Esq. Colin R. Robinson, Esq. Joseph M. Mulvihill, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 E-mail: ljones@pszjlaw.com crobinson@pszjlaw.com jmulvihill@pszjlaw.com - and - Edward O. Sassower, P.C. Brian E. Schartz, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 E-mail: edward.sassower@kirkland.com brian.schartz@kirkland.com - and - James H.M. Sprayregen, P.C. Justin R. Bernbrock, Esq. Alexandra Schwarzman, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 E-mail: james.sprayregen@kirkland.com justin.bernbrock@kirkland.com alexandra.schwarzman@kirkland.com About Magnum Hunter Magnum Hunter Resources Corporation is an oil and gas company headquartered in Irving, Texas that primarily is engaged in the acquisition, development, and production of oil and natural gas reserves in the United States. MHRC and its affiliates own interests in approximately 431,643 net acres in total and have proved reserves with an industry value of approximately $234.5 million as of December 31, 2015. In the aggregate, MHRC generated approximately $391.5 million in revenue from their operations in 2014 and generated approximately $169.3 million in revenues from their operations for the ten months ended October 31, 2015. 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 petitions were signed by Gary C. Evans as chairman and chief executive officer. 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. As of Sept. 30, 2015, the Debtors reported approximately $1.1 billion in total liabilities, as well as $416.3 million in stated value of preferred stock. The Debtors' significant funded debt obligations include: (a) approximately $70 million in principal amount of obligations under the Debtors' Bridge Financing Facility; (b) approximately $336.6 million in principal amount of obligations under the Debtors' second lien credit agreement; (c) approximately $13.2 million in principal amount of Equipment and Real Estate Notes; and (d) approximately $600 million in principal amount of Notes. MAGNUM HUNTER: Kanbar Wants Plan Outline to Discuss Joint Ventures ------------------------------------------------------------------ Kanbar Spirits, Inc., and the Maurice S. Kanbar Revocable Trust under agreement dated June 7, 2001, tell the Bankruptcy Court that approval of the Disclosure Statement explaining Magnum Hunter Resources Corporation, et al.'s Chapter 11 plan must be denied because the plan outline fails to provide "adequate information" that would allow parties to intelligently vote for the proposed plan, particularly with respect to the Debtors' proposed treatment of the partnerships and joint ventures in which Kanbar is partners and a joint venturer with one or more of the Debtors. Kanbar is involved in multiple partnerships and joint ventures in which one or more of the Debtors is also a partner or joint venturer. These partnerships include: (1) NGAS Partners 2004-2, Ltd., (2) NGAS Partners 2005-A, Ltd., (3) NGAS Partners 2005-B, Ltd., and (4) NGAS Partners 2005-C, Ltd. Under these partnerships, the parties agreed to develop and produce oil and gas from properties located primarily in Kentucky. These particular partnerships involve Daugherty Petroleum, Inc., predecessor of Magnum Hunter Resources Corporation and/or Magnum Hunter Production, Inc., two of the Debtors in the Chapter 11 proceedings. These partnerships and joint ventures were investment vehicles offered through the Debtors directly and marketed through brokers and were largely geared to retail investors, like Kanbar. Kanbar's investment in these partnerships and joint ventures exceeds $20 million. It is believed that there are hundreds of similar partnerships and joint ventures involving the Debtors and other retail investors. There is no mention of these partnerships and joint ventures in the Disclosure Statement; nor is there any mention of the Debtors intentions concerning its rights and interests in these partnerships and joint ventures. "As a fundamental and threshold matter, the Disclosure Statement wholly fails to advise creditors and equity holders about the Debtors' interests in these partnerships and joint ventures, the obligations of the Debtors as partners and joint venturers, and their effect on the reorganization efforts of the Debtors. The Disclosure Statement cannot be approved until there is full and complete disclosure of all such partnerships and their assets and liabilities and the Debtors' proportional interest in the same," Kanbar tells the Court. "Moreover, the Debtors must provide specific information concerning the effect of bankruptcy on these partnerships and joint ventures. For example, whether the Debtors are going to voluntarily seek dissolution of such partnerships and co-ventures under the operative agreements and distribute assets to the partners after payment of outstanding liabilities consistent with applicable state law; whether the bankruptcy itself acted to terminate these partnerships through the bankruptcy of one or more of the partners; and whether and to what extent the Debtors assert that the properties and other assets owned by these partnerships and joint ventures are estate property." Attorneys for Kanbar Spirits: MONZACK, MERSKY, MCLAUGHLIN & BROWDER, P.A. Rachel B. Mersky, Esq. 1201 N. Orange Street, Suite 400 Wilmington, DE 19801 Tel: (302) 656-8162 Fax: (302) 656-2769 E-mail: rmersky@monlaw.com - and - MCDONALD, MCCANN, METCALF & CARWILE, LLP Gary M. McDonald, Esq. Chad J. Kutmas, Esq. 15 E. Fifth Street, Suite 1400 Tulsa, OK 74103 Tel: (918) 430-3700 Fax: (918) 430-3770 E-mail: gmcdonald@mmmsk.com ckutmas@mmmsk.com About Magnum Hunter Magnum Hunter Resources Corporation is an oil and gas company headquartered in Irving, Texas that primarily is engaged in the acquisition, development, and production of oil and natural gas reserves in the United States. MHRC and its affiliates own interests in approximately 431,643 net acres in total and have proved reserves with an industry value of approximately $234.5 million as of December 31, 2015. In the aggregate, MHRC generated approximately $391.5 million in revenue from their operations in 2014 and generated approximately $169.3 million in revenues from their operations for the ten months ended October 31, 2015. 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 petitions were signed by Gary C. Evans as chairman and chief executive officer. 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. As of Sept. 30, 2015, the Debtors reported approximately $1.1 billion in total liabilities, as well as $416.3 million in stated value of preferred stock. The Debtors' significant funded debt obligations include: (a) approximately $70 million in principal amount of obligations under the Debtors' Bridge Financing Facility; (b) approximately $336.6 million in principal amount of obligations under the Debtors' second lien credit agreement; (c) approximately $13.2 million in principal amount of Equipment and Real Estate Notes; and (d) approximately $600 million in principal amount of Notes. MAGNUM HUNTER: Wins Nod to Assume Restructuring Support Agreement ----------------------------------------------------------------- Magnum Hunter Resources Corporation and its debtor-affiliates on Feb. 9, 2016, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to assume a restructuring support agreement with certain lenders. As reported in the Jan. 29, 2016 edition of the TCR, the Restructuring Support Agreement contemplates consummation of a chapter 11 plan of reorganization that provides for the conversion of substantially all of the Debtors' prepetition funded debt obligations into newly-issued common equity of reorganized MHRC, which eliminates virtually all future interest burden. Under the Restructuring Support Agreement, the DIP Facility will also convert into New Common Equity and general unsecured claimants are expected to receive a significant cash recovery. In addition, all of the existing equity interests in MHRC will be cancelled. The Term Sheet attached to the Restructuring Support Agreement contains the following material terms: * Certain Second Lien Lenders and Noteholders will backstop the DIP Facility, a $200 million multi-draw term-loan with the proceeds to be used for general corporate purposes, to fund administration of the Debtors' chapter 11 cases, and to repay the Bridge Financing Facility; * The Bridge Financing Lenders will receive payment in full from the proceeds of the DIP Facility (upon final approval of the DIP Facility); * The DIP Lenders will receive on account of their claims their pro rata share of 28.80% of the New Common Equity, subject to dilution on account of the Management Incentive Plan; * The Second Lien Lenders will receive on account of their claims their pro rata share of 36.87% of the New Common Equity subject to dilution on account of the Management Incentive Plan; * The Noteholders will receive on account of their claims their pro rata share of 31.33% of the New Common Equity subject to dilution on account of the Management Incentive Plan; * The Real Estate and Equipment Notes will be reinstated; * General Unsecured Creditors will receive a projected blended cash recovery of approximately 80% of the total amount of General Unsecured Claims; * All existing equity interests in MHRC, including the Preferred Equity, will be cancelled; * Certain issues among the Debtors, the Second Lien Lenders, and the Noteholders will be settled pursuant to the Plan; * The Plan will contain customary release and exculpation provisions, including releases of certain third parties; and * As a condition precedent to emergence, the Debtors will pay "[a]ll of the Backstoppers' reasonable and documented professional fees (including legal and financial and any other special advisors retained by the Ad Hoc Group of Second Lien Lenders and the Ad Hoc Group of Unsecured Noteholders either before or during the Chapter 11 Cases) and out-of-pocket expenses incurred in connection with the Restructuring or any other matter in connection thereto, including, without limitation, those fees and expenses incurred during the Chapter 11 Cases." The RSA intended to facilitate the expeditious resolution of the Chapter 11 cases and provides that the RSA Parties may terminate the RSA in the event that the Debtors do not meet the Milestones. The Milestones contemplate the following timeline: * no later than February 12, 2016, (i) the Court will have entered (x) an order approving the Disclosure Statement and (y) an order authorizing the assumption of the Restructuring Support Agreement; and (ii) no later than four days after entry of the order approving the Disclosure Statement, the Debtors will have commenced solicitation on the Plan; * no later than March 28, 2016, the Court will have commenced the Confirmation Hearing on the Plan; * no later than April 1, 2016, the Court will have entered an order confirming the Plan; and * no later than April 15, 2016, the Debtors will have consummated the transactions contemplated by the Plan. The RSA is supported by creditors holding substantially all of the Debtors' first lien debt, approximately 66.5% in principal amount of the Debtors' second lien debt, and approximately 79% in principal amount of the Debtors' senior unsecured notes. A copy of the Order and the Restructuring Support Agreement is available for free at: http://bankrupt.com/misc/Magnum_H_503_RSA_Order.pdf 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: CGPC Buys NCOC Pet Bedding Business for $61MM -------------------------------------------------------------- National Consumer Outdoors Corporation, formerly known as Dallas Manufacturing Company, Inc., a debtor-affiliate of Malibu Lighting Corporation, won approval from the Bankruptcy Court to sell its pet bedding and pet accessories business to Central Garden and Pet Company for $61 million in cash plus the assumption of liabilities. The Debtor on Oct. 27, 2015, won approval to commence a sale process for substantially all of its operating assets. DMC Acquisition Holdings, LLC, an affiliate of Summit Investment Management LLC, was the stalking horse bidder, signing an agreement to purchase the assets for $36,850,000, plus the assumption of $9,500,000 in liabilities, absent higher and better offers. At the behest of the Official Committee of Unsecured Creditors, the bidding procedures order provided among other things that the failure of the Committee to object to a credit bid put forth by Comerica Bank or the Court's approval of any such credit bid shall not (a) prejudice or impair the rights of the Committee to challenge the nature, extent, validity, priority, perfection or amount of Comerica's alleged liens, security interests and claims or (b) release Comerica from any causes of action which can be brought by or on behalf of the Debtor's estate. The Court-approved approved bid procedures set a Nov. 12 deadline for initial bids, a Nov. 17 auction and a Nov. 19 sale hearing. The approved bid procedures provided that the Summit unit will be entitled to a break-up fee in the amount of $942,500 and expense reimbursement of up to $400,000 if it is not the Successful Bidder at the auction. The parties originally requested that the break-up fee be set at $1,117,500 and the expense reimbursement be capped at $225,000. Nov. 17 Auction Upon conclusion of the auction, the Debtor determined that the highest or otherwise best bidder was Central Garden and Pet Company (the "Successful Bidder") and the second highest or otherwise best bidder was DMC Acquisition Co., LLC, an affiliate of OpenGate Capital Partners I, LP (the "Backup Bidder"). Following a sale hearing, the Court entered an order approving the sale of the assets to Central Garden for a purchase price of $61 million in cash plus the assumption of liabilities. A copy of the Sale Order is available at: http://bankrupt.com/misc/Malibu_L_270_Sale_Ord_CG.pdf Purchaser Central Garden and Pet Company can be reached at: CENTRAL GARDEN & PET COMPANY Office of the General Counsel 1340 Treat Blvd. Walnut Creek, CA 94597 Attn: George A. Yuhas E-mail: gyuhas@central.com Purchaser Central Garden and Pet Company's attorneys: ORRICK, HERRINGTON & SUTCLIFFE LLP The Orrick Building San Francisco, CA 94105 Attn: Frederick D. Holden, JR. E-mail: fholden@orrick.com 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 petitions were signed by David M. Baker as chief restructuring officer. Judge Kevin Gross is assigned to the cases. The Debtors estimated both assets and liabilities of $10 million to $50 million. 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 Debtors engaged Pachulski Stang Ziehl & Jones LLP as counsel, Piper Jaffray Co. as investment banker and Kurtzman Carson Consultants as claims and noticing agent. MALIBU LIGHTING: Expeditors Asks for Relief From Stay ----------------------------------------------------- In the Chapter 11 cases of Malibu Lighting Corporation, et al., Expeditors International of Washington, Inc. and its subsidiaries, including Expeditors Canada, Inc., filed a motion seeking relief from the automatic stay as to its liens and security interests. Expeditors is a non-vessel owned common carrier, freight forwarder, customs broker, warehouseman and provider of distribution and other logistics services. Before the Petition Date, Expeditors transported goods in international and domestic commerce for the Debtors. In the course of performing such services, Expeditors acquired possession, custody and control of, inter alia, goods belonging to the Debtors or in which the Debtors claim an interest and various commercial documents, including documents of title. Expeditors has possession, custody or control of certain goods of the Debtors -- Petition Date Cargo -- and related documents, having a declared value of approximately $4.9 million. On information and belief the Petition Date Cargo consists of lighting fixtures, parts and accessories. To the extent the Debtors abandon the Petition Date Cargo, Expeditors anticipates that the value of the Petition Date Cargo will decrease significantly. As of the Petition Date, MLC and Brinkman owe Expeditors $38,677 in the aggregate -- Expeditors' "Claims" -- for transportation, storage and preservation of goods and other property, including freight, storage, distribution, Customs duties and fees, demurrage, detention, and other charges, plus late charges on the foregoing at 18% per annum and attorneys' fees. All charges continue to accrue. Significantly, storage charges continue to accrue with respect to the Petition Date Cargo at a rate of approximately $2,720 per week for Brinkman related storage charges and $4,845 per week for MLC related storage charges. In the case at bar, the Debtors have represented to Expeditors that they are abandoning their interest in the Petition Date Cargo. Further, the Debtors have no equity in the Petition Date Cargo, Expeditors tells the Court. Therefore, Expeditors says it is entitled to relief from the automatic stay. However, storage charges are accruing at a substantial rate. Therefore, it is essential that the automatic stay be terminated quickly to mitigate potential loss and expense to Expeditors, Expeditors tells the Court. Expeditors' attorneys: Jason C. Powell FERRY JOSEPH & PEARCE, PA 824 N. Market Street, Suite 1000 Wilmington, DE 19801 Tel: (302) 575-1555 Fax: (302) 575-1714 - and - Lisa M. Kresge BRENNAN, RECUPERO, CASCIONE, SCUNGIO & MCALLISTER, LLP 362 Broadway Providence, RI 02909 Tel: (401) 453-2300 Fax: (401) 453-2345 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 petitions were signed by David M. Baker as chief restructuring officer. Judge Kevin Gross is assigned to the cases. The Debtors estimated both assets and liabilities of $10 million to $50 million. 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 Debtors engaged Pachulski Stang Ziehl & Jones LLP as counsel, Piper Jaffray Co. as investment banker and Kurtzman Carson Consultants as claims and noticing agent. MALIBU LIGHTING: Has Until May 4 to Decide on Unexpired Leases -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until May 4, 2016, Malibu Lighting Corporation, et al.'s time to assume or reject unexpired leases of nonresidential real property. Debtors Outdoor Direct Corporation and MLC are currently winding down their operations and liquidating their remaining assets -- a process that began prepetition. In this relation, they have not yet concluded the sale of ODC's and MLC's remaining assets and must continue to honor obligations under the asset purchase agreement with respect to leases and agreements covered under that agreement. The Debtors are current on their rental payments owed to the affected landlords to the unexpired leases. 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. Malibu Lighting disclosed total assets of $31,974,071 and total liabilities of $12,166,857 as of the Chapter 11 filing. 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. MARSHALL MEDICAL: Fitch Affirms 'BB+' Rating on $20MM 2004B Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on the following California Health Facilities Financing Authority bonds, issued on behalf of Marshall Medical Center (MMC): -- $20 million series 2004B auction rate (insured: Ambac Assurance Corporation). MMC has $13.7 million fixed rate series 2012A bonds and $26.7 million fixed rate 2015A bonds that are insured by Cal-Mortgage Loan Insurance Division. The series 2012A bonds have an insured only rating of 'A+'. Fitch was not asked to rate the series 2015A bonds. The Rating Outlook is revised to Positive from Stable. SECURITY Debt payments are secured by a pledge of the gross revenues of the obligated group and a mortgage lien. There is a debt service reserve fund. The consolidated financials include a subsidiary, a surgery center that is non-obligated. The obligated group accounted for 99.7% of total assets and 97.4% of total revenue of the consolidated entity in fiscal 2014 (Oct. 31 year end). Fitch's analysis is based on the consolidated entity. KEY RATING DRIVERS STRONG OPERATING PERFORMANCE: The Rating Outlook revision to Positive from Stable reflects MMC's very strong operating performance in fiscal 2015 that led to almost a doubling of its unrestricted cash and investments. An upgrade is precluded at this time given the uncertainty around both the permanence of the provider fee program that has greatly benefited MMC, and expected sizeable investments in an integrated electronic medical record. SIGNIFICANT POSITIVE IMPACT FROM PROVIDER FEE: California enacted a hospital provider fee in 2010 to draw down additional federal funds for Medi-Cal services, and the current program expires in December 2016. While MMC has significantly benefited from the provider fee program, its profitability has been volatile over the last several years due to the timing of recording the provider fee net income related to the significant lag in receiving the various approvals from the Centers for Medicare and Medicaid Services (CMS). Fiscal 2015 performance includes a portion of provider fee funds related to fiscal 2014. Provider fee funds (net of pledge payments) totaled $6.9 million in fiscal 2013, $1.3 million in fiscal 2014 and $18.4 million in fiscal 2015. GOOD DEBT SERVICE COVERAGE: With strong operating performance and a moderate debt burden, debt service coverage is very good for the rating level. Maximum annual debt service (MADS) coverage by EBITDA was 7.4x in fiscal 2015 compared to 3.2x in fiscal 2014 and 3.4x in fiscal 2013. ELEVATED CAPITAL SPENDING EXPECTED: After MMC opened a three-story hospital expansion in January 2013, capital needs have been manageable. However, higher capital spending is expected over the next two years due to the MMC's plan to implement an integrated electronic medical record. This project is expected to increase both capital and operating costs over the next two years. LIQUIDITY IMPROVEMENT: As of Oct. 31, 2015, MMC had $61.9 million of unrestricted cash and investments (114.7 days cash on hand [DCOH] and 90.8% cash to debt), compared to $33.4 million the prior year (62.2 DCOH and 47.2% cash to debt). Management has been committed to rebuilding liquidity since funding half of its expansion project from equity. The significant improvement in liquidity was driven by the receipt of the provider fee funds. MANAGEMENT ADDRESSING REDUCED REIMBUSEMENT ENVIRONMENT: MMC has been proactive in entering into alternative payer arrangements to gain experience as the reimbursement model shifts more to value based. MMC is participating in bundled payments, an accountable care organization, and a program to manage high utilizers of medical services. RATING SENSITIVITIES CLARITY ON PROVIDER FEE PROGRAM: Although the majority of MMC's ratios are currently in line with the 'BBB' category medians, its small revenue base subjects performance to volatility. Given the large impact of the provider fee program, upward movement of the rating will be dependent on ongoing funding after 2016. CREDIT PROFILE MMC is located in Placerville, CA approximately 45 miles east of Sacramento, and operates a 113 bed general acute-care community hospital and several clinics. MMC maintains a good market position in its service area, with competition mainly from Kaiser Permanente as well as other tertiary providers in the Sacramento area. In fiscal 2015 (interim financials), MMC generated $230.6 million in total operating revenue. Strong Profitability in Fiscal 2015 Operating income in fiscal 2015 was $21.5 million (9.3% operating margin), compared to 0.3% operating margin in fiscal 2014 and 2.6% in fiscal 2013. Fiscal 2015 performance was driven by good volume growth and $18.4 million of provider fee funds. The provider fee program has been in place since November 2009 (retroactive to April 2009) with various phases and sunset dates; the most recent phase (Phase 4) is running from Jan. 1, 2014 to Dec. 31, 2016. The funding from this program has been uneven given the timing of CMS approval. The fee for service portion of the Phase 4 program did not receive approval until December 2014. Therefore, the amounts related to calendar year 2014 were not booked until December 2014. MMC is not subject to the provider fee portion of the provider fee program due to its rural designation, but does make pledge payments, which are fairly minimal (less than $300,000). The financial benefit from the provider fee program has been $12.8 million in fiscal 2012, $6.9 million in fiscal 2013, $1.3 million in fiscal 2014, $18.4 million in fiscal 2015 and a projected $12 million in fiscal 2016. A November 2016 ballot initiative seeks to make the program permanent. If approved, management estimates the program would result in annual funding of $10 million-$13 million. Conservative Debt Profile Total par amount of debt outstanding as of Oct. 31, 2015 was $63.4 million and includes $26.9 million series 2015A fixed rate, $20 million series 2004B auction rate, $13.7 million series 2012A fixed rate and $2.8 million USDA loan and capital leases. All of the bonds are insured by Cal Mortgage, and MMC issued the series 2015A bonds to refinance the series 2004A bonds. Management stated that the auction rate bonds have been setting at less than 1%. MADS is calculated at $5.1 million, down from $5.8 million during last year's review. The debt burden is moderate and MADS accounted for 2.2% of total revenue in fiscal 2015, compared to the 'BBB' category of 3.6%. MATADOR RESOURCES: S&P Raises Rating on Sr. Unsecured Debt to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its issue-level rating on Dallas-based exploration and production (E&P) company Matador Resources Co.'s senior unsecured debt to 'B' (same level as the corporate credit rating) from 'B-'. At the same time, S&P removed the rating from CreditWatch where it placed it with negative implications on April 6, 2015. S&P simultaneously revised the recovery rating on this debt to '4', indicating its expectation of average (30% to 50%; higher end of range) recovery in the event of a payment default, from '5'. The corporate credit rating on Matador Resources remains 'B'. The outlook is stable. S&P revised its recovery rating and raised its issue-level rating on Matador's senior unsecured debt based on an increase in the PV-10 valuation of the company's reserves as of year-end 2015, resulting in higher recovery prospects for the senior unsecured debt. "The ratings on Matador Resources reflect our view of the company's vulnerable business risk and aggressive financial risk profiles," said Standard & Poor's credit analyst Christine Besset. S&P considers Matador Resources' financial risk profile to be aggressive. The stable outlook reflects S&P's view that Matador Resources will continue to grow its reserves and production while maintaining FFO/debt of about 20% and debt/EBITDA of 4x to 4.5x. S&P could lower the rating if S&P expected FFO/debt to fall below 12% or debt/EBITDA to exceed 5x with no near-term remedy, or if liquidity deteriorated. This would most likely occur if commodity prices were to significantly weaken further, the company did not meet our oil production growth expectations, or if capital spending exceeded cash flows by significantly more than currently contemplated. An upgrade would be possible if Matador Resources continues to improve is operational performance such that the scale of its reserves and production are more consistent with a weak business risk profile, while maintaining adequate liquidity and FFO/debt above 30%. MERRIMACK PHARMACEUTICALS: Board OKs $546K Cash Bonus for Execs. ---------------------------------------------------------------- The Organization and Compensation Committee of the Board of Directors of Merrimack Pharmaceuticals, Inc. took the following actions regarding the compensation of the executive officers of the Company listed below: 1. Approved 2015 annual cash bonus awards pursuant to the Company's annual cash bonus program: 2015 Base 2015 Actual Name Salary Cash Bonus ---- --------- ----------- Robert J. Mulroy $570,180 $176,756 President and Chief Executive Officer Yasir B. Al-Wakeel $370,000 $129,500 Chief Financial Officer and Head of Corporate Development Peter N. Laivins $314,815 $110,185 Head of Development William M. McClements $371,382 $129,984 Head of Corporate Operations In addition, the Committee awarded William A. Sullivan, the Company's principal accounting officer and treasurer, and former chief financial officer, a cash bonus of $108,643 for 2015. 2. Established 2016 base salaries, effective April 1, 2016: Name 2016 Base Salary ---- ---------------- Robert J. Mulroy $598,689 Yasir B. Al-Wakeel $370,000 Peter N. Laivins $333,704 William M. McClements $386,237 3. Approved the annual performance-based cash bonus program for 2016. The 2016 Bonus Program is comprised of the following three elements: (1) the achievement of specified annual corporate objectives; (2) the achievement of specified annual individual performance objectives; and (3) the support of the overall management of the Company and the creation of long-term value for the Company's stockholders, which are referred to as the general management contribution. The corporate objectives for 2016 generally focus on ensuring a successful launch of ONIVYDE, advancing the Company's clinical and preclinical pipeline and pursuing various corporate development opportunities. The individual performance objectives for 2016 generally relate to the following: * for Robert J. Mulroy, advancing the Company's corporate objectives, strengthening the Company's investor base and setting up the Company for growth as a commercial organization; * for Yasir B. Al-Wakeel, ensuring adequate funding for the Company, pursuing various corporate development opportunities and strengthening the Company's investor base; * for Peter N. Laivins, advancing the Company's last-stage clinical trials, including in additional indications for ONIVYDE; and * for William M. McClements, developing the organizational capabilities and infrastructure necessary to support the Company's continued growth as a commercial organization. The general management contribution of each executive officer will be evaluated retrospectively and will broadly focus on overall contributions during the year to the improvement of processes and efficiency, the development of human and scientific capacity and the development and management of stakeholders, including partners, collaborators, investigators, stockholders and licensees, rather than on specific, pre-determined criteria. Each executive officer is eligible to receive an annual cash bonus under the 2016 Bonus Program up to a fixed percentage of his base salary. For 2016, Mr. Mulroy is eligible to receive an annual cash bonus of up to 50% of his 2016 base salary and each of Dr. Al-Wakeel, Mr. Laivins and Mr. McClements is eligible to receive an annual cash bonus of up to 35% of his respective 2016 base salary. For Mr. Mulroy, the Committee will weigh each of the three foregoing elements equally when determining the percentage of the annual cash bonus that he will receive. For each of Dr. Al-Wakeel, Mr. Laivins and Mr. McClements, the Committee will look at the three foregoing elements as a whole. If the Committee determines that the executive officer has substantially satisfied the elements as a whole, then the executive officer will receive his full annual cash bonus. On the other hand, if the Committee determines that the executive officer has not substantially satisfied the elements as a whole, then the executive officer will not receive an annual cash bonus. About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. Merrimack reported a net loss of $83.6 million on $103 million of collaboration revenues for the year ended Dec. 31, 2014, compared with a net loss of $131 million on $47.8 million of collaboration revenues during the prior year. As of Sept. 30, 2015, the Company had $103 million in total assets, $243 million in total liabilities, $481,000 in non-controlling interest and a $141.14 million total stockholders' deficit. MGM RESORTS: Capital World Holds 4.3% Stake as of Dec. 31 --------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, Capital World Investors reported that as of Dec. 31, 2015, it beneficially owns 24,306,442 shares of common stock of MGM Resorts International representing 4.3 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/KhMfAa About MGM Resorts MGM Resorts International (NYSE: MGM) a global hospitality company, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The Company also owns 51% of MGM China Holdings Limited, which owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai, and 50% of CityCenter in Las Vegas, which features ARIA resort and casino. For more information about MGM Resorts International, visit the Company's Web site at www.mgmresorts.com. MGM Resorts reported a net loss attributable to the Company of $156.60 million in 2013 following a net loss attributable to the Company of $1.76 billion in 2012. As of June 30, 2015, the Company had $27.1 billion in total assets, $17.9 billion in total liabilities, $5 million in redeemable noncontrolling interest and $9.1 billion in total stockholders' equity. Bankruptcy Warning The Company stated in its 2013 Annual Report, "The agreements governing our senior secured credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. Covenants governing our senior secured credit facility and certain of our debt securities restrict, among other things, our ability to: * pay dividends or distributions, repurchase or issue equity, prepay certain debt or make certain investments; * incur additional debt; * incur liens on assets; * sell assets or consolidate with another company or sell all or substantially all assets; * enter into transactions with affiliates; * allow certain subsidiaries to transfer assets; and * enter into sale and lease-back transactions. Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our long-term indebtedness. Any default under our senior secured credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt, and could force us to seek protection under the bankruptcy laws." * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. As reported by the TCR on Sept. 29, 2014, Fitch Ratings has upgraded MGM Resorts International's (MGM) and MGM China Holdings Ltd's (MGM China) IDRs to 'B+' from 'B' and 'BB' from 'BB-', respectively. Fitch's upgrade of MGM's IDR to 'B+' and the Positive Outlook reflect the company's strong performance on the Las Vegas Strip and in Macau as well as Fitch's longer-term positive outlooks for these markets. MID-STATES SUPPLY: Meeting of Creditors Set for March 18 -------------------------------------------------------- The meeting of creditors of Mid−States Supply Company Inc. is set to be held on March 18, 2016, at 10:00 a.m., according to a filing with the U.S. Bankruptcy Court for the Western District of Missouri. The meeting will be held at U.S. Courthouse, Trustee Hearing Room 2110B, 400 East 9th Street, Kansas City, Missouri. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Mid-States Supply Founded and headquartered in Kansas City, Missouri, Mid-States Supply Company, Inc., supplier of pipes, valves and fittings to ethanol, pipeline and power industries in the United States, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Mo. Case No. 16-40271) on Feb. 7, 2016. The petition was signed by Stuart Noyes as chief restructuring officer. The Debtor estimated both assets and liabilities in the range of $50 million to $100 million. The Debtor has engaged Spencer Fane LLP as counsel, Winter Harbor LLC as financial advisor, SSG Advisors, LLC and Frontier Investment Banc Corporation as investment bankers, Tarsus CFO Services, LLC as chief financial officer services provider and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. MID-STATES SUPPLY: U.S. Trustee Forms Seven-Member Committee ------------------------------------------------------------ The Office of the U.S. Trustee appointed seven creditors of Mid−States Supply Company Inc. to serve on the official committee of unsecured creditors. The unsecured creditors are: (1) Giuseppe Biasco Cameron International Corporation, Inc. 1333 West Loop South, Suite 1700 Houston, TX 77027 (281) 261-3622 phone (281) 261-3681 fax Giuseppe.Biasco@c-a-m.com (2) Erick Johansson Flowserve US Inc. 5215 N. O’Conner Blvd. Suite, 2300 Irving, TX 75039 (972) 443-6688 phone (972) 443-6988 fax ejohansson@flowserve.com (3) Lyle Williams Forum US, Inc. 920 Memorial City Way, Suite 1000 Houston, TX 77024 (281) 949-2500 phone Lyle.williams@f-e-t.com (4) John T. Young, Jr. Texas Bolt and Nut Co. c/o Conway MacKenzie, Inc. 1301 McKinney, Ste 2025 Houston, TX 77010 (713) 650-0500 phone jyoung@conwaymackenzie.com (5) Carl Lenz Texas Pipe & Supply Company, Ltd. 2330 Holmes Road Houston, TX 77051 (713) 799-5724 phone (713) 799-5724 fax carll@texaspipe.com (6) Sonyia McNeill Global Stainless Supply and Global Pipe Supply 8900 Railwood Drive Houston, TX 77078 (713) 980-0747 phone (713) 631-1098 fax Sonyia.mcneill@globalgroup1.com (7) Andrew Hodges Lamons Gasket Company 7300 Airport Blvd. Houston, TX 77061 (248) 631-5465 phone (248) 631-5413 fax andrewhodges@trimascorp.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Mid-States Supply Founded and headquartered in Kansas City, Missouri, Mid-States Supply Company, Inc., supplier of pipes, valves and fittings to ethanol, pipeline and power industries in the United States, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Mo. Case No. 16-40271) on Feb. 7, 2016. The petition was signed by Stuart Noyes as chief restructuring officer. The Debtor estimated both assets and liabilities in the range of $50 million to $100 million. The Debtor has engaged Spencer Fane LLP as counsel, Winter Harbor LLC as financial advisor, SSG Advisors, LLC and Frontier Investment Banc Corporation as investment bankers, Tarsus CFO Services, LLC as chief financial officer services provider and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. MORGANS HOTEL: Ameriprise Financial Holds 2.7% Stake as of Dec. 31 ------------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, Ameriprise Financial, Inc. and Columbia Management Investment Advisers, LLC disclosed that as of Dec. 31, 2015, they beneficially own 950,632 shares of common stock of Morgans Hotel Group Co. representing 2.74 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/uxRtIb About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. Morgans Hotel reported a net loss attributable to common stockholders of $66.6 million on $235 million of total revenues for the year ended Dec. 31, 2014, compared with a net loss attributable to common stockholders of $58.5 million on $236 million of total revenues during the prior year. As of Sept. 30, 2015, the Company had $515 million in total assets, $774 million in total liabilities and a $259 million total deficit. MORNINGSTAR MARKETPLACE: Plan Withdrawal Approved by Court ---------------------------------------------------------- Morningstar Marketplace, LTD, by counsel, Adam G. Klein, Esq., at Smigel, Anderson & Sacks, LLP, obtained approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to withdraw its Plan and Disclosure Statement. On Sept. 29, 2015, Debtor filed a Disclosure Statement in support of a Plan of Reorganization together with a proposed Plan. The Plan offered to return 16 cents on the dollar to bondholders but let its owner retain control of the company in exchange for a contribution of $220,000 in cash plus other assets. The 680 bondholders who each issued $5,000 in bonds prior to the company's bankruptcy filing was to be paid at a rate of $800 per bond within 90 days of approval of the plan. PNC Bank, a secured creditor, will be paid at $23,459 per month in accordance with the terms of the original mortgage note until paid in full while general unsecured creditors will receive a premium of 10% of the accepted amounts of the claims. In its Motion to Withdraw, the Debtor noted that it has recently entered into a Fourth Amended Final Stipulated Order authorizing the use of cash collateral which Order, among other things, extends the use of cash collateral from Nov. 1, 2015, to March 31, 2016. Manufacturers & Traders Trust Company as trustee for certain bondholders has concurred with the entry of the Cash Collateral Order. A portion of the Order deals with the subject of Debtor's Plan of Reorganization stating in paragraph 8, page 9, the following: "Withdrawal of Plan. The Debtor's Plan of Reorganization dated September 29, 2015 [Docket 195] and Disclosure Statement in support of Debtor's Plan of Reorganization [Doc. 196] are hereby withdrawn without prejudice." The Debtor believes and avers that M&T concurs with the Motion to Withdraw. The Debtor's counsel: Adam G. Klein, Esq. SMIGEL, ANDERSON & SACKS, LLP 4431 North Front Street Harrisburg, PA 17110 Tel: 717-234-2401 Fax: 717-234-3611 E-mail: aklein@sasllp.com About Morningstar Marketplace Morningstar Marketplace, LTD, owns a flea market business located along Route 30 in Jackson Township, York County, Pennsylvania. Andrew W. Lentz created the Marketplace to serve farmers, antiquaries and vendors and the general consumer and collector population within the surrounding area. Built in 1999, the Marketplace site consists of 3 side-by-side buildings totaling 51,440 square feet, and two free standing pavilions measuring 30' by 50' and 50' by 50'. The site has 190 vendor spaces in its shed area and 200 outside vendor spaces in the upper parking lot. Andrew Lentz is the general partner of Morningstar Marketplace, LTD, and his wife owns the remaining 19%. Morningstar Marketplace, Inc., a related company owned by Mr. Lentz, is the operator of the site. Morningstar Marketplace LTD filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-00451) in Harrisburg on Feb. 3, 2014. The Debtor estimated $100 million to $500 million in assets and liabilities. Judge Mary D France presides over the case. Attorneys at Smigel, Anderson & Sacks, LLP serve as counsel to the Debtor. MOTORS LIQUIDATION: Has $613-Mil. Net Assets in Liquidation ----------------------------------------------------------- Motors Liquidation Company GUC Trust filed with the Securities and Exchange Commission its quarterly report disclosing $669.50 million in total assets, $56.40 million in total liabilities and $613.10 million in net assets in liquidation. The GUC Trust's sources of liquidity are principally the funds it holds for the payment of liquidation and administrative costs, and to a significantly lesser degree, the earnings on such funds invested by it. In addition, as a result of the liquidation of all the GUC Trust's holdings of New GM Securities during the quarter ended Sept. 30, 2015, the GUC Trust holds Distributable Cash for distribution to GUC Trust beneficiaries. The GUC Trust holds those funds as cash and cash equivalents and also invests such funds in certain marketable securities, primarily U.S. Treasury bills, as permitted by the Plan and the GUC Trust Agreement. During the nine months ended Dec. 31, 2015, the GUC Trust'’s holdings of cash and cash equivalents decreased approximately $13 million from approximately $37.5 million to approximately $24.5 million. The decrease was primarily due to cash paid for liquidation and administrative costs of $11 million and cash paid for Residual Wind-Down Claims of $6 million, offset in part by receipts of cash dividends on holdings of New GM Common Stock of $4.1 million. Cash distributions of approximately $130 million during the nine months ended Dec. 31, 2015, were funded from the proceeds of the liquidation of New GM Securities of $741.7 million, with the balance of such proceeds remaining largely invested in Marketable Securities. During the nine months ended Dec. 31, 2015, the funds invested by the GUC Trust in marketable securities increased approximately $612.3 million, from approximately $30.9 million to approximately $643.2 million. The increase was due primarily to the liquidation of all the GUC Trust's holdings of New GM Securities during the quarter ended Sept. 30, 2015. The GUC Trust earned approximately $0.4 million in interest income on such investments during the period. As of Dec. 31, 2015, the GUC Trust held approximately $667.6 million in cash and cash equivalents and marketable securities. Of such amount, approximately $620.9 million relates to Distributable Cash (including Dividend Cash), a portion of which the GUC Trust Administrator is permitted to set aside from distribution and to appropriate with the approval of the Bankruptcy Court or Trust Monitor, as applicable, in order to fund additional costs and income tax liabilities (including Dividend Taxes, Investment Income Taxes and Taxes on Distribution) as they become due. Included in Distributable Cash at Dec. 31, 2015, is approximately $17.3 million of Dividend Cash. Dividend Cash will be distributed to holders of subsequently Resolved Allowed Claims and GUC Trust Units in respect of Distributable Cash that they receive, unless such dividends are in respect of Distributable Cash that is appropriated by the GUC Trust in accordance with the GUC Trust Agreement to fund the GUC Trust's liquidation and administrative costs, income tax liabilities or shortfalls in Residual Wind-Down Assets. As of Dec. 31, 2015, Distributable Cash (including Dividend Cash) held by the GUC Trust was set aside as follows: (a) $4.6 million for liquidating distributions payable as of that date, (b) $46.6 million to fund projected liquidation and administrative costs, including Dividend Taxes and Investment Income Taxes, and (c) $109.7 million to fund potential Taxes on Distribution. In addition to Distributable Cash (including Dividend Cash), the GUC Trust held $46.7 million in cash and cash equivalents and marketable securities at Dec. 31, 2015, representing funds held for payment of costs of liquidation and administration. Of that amount, approximately $30.7 million (comprising approximately $22.2 million of the remaining Residual Wind-Down Assets, approximately $8.2 million of the remaining Administrative Fund and approximately $0.3 million in remaining funds designated for the Indenture Trustee / Fiscal and Paying Agent Costs), is required by the GUC Trust Agreement to be returned, upon the winding-up A full-text copy of the Form 10-Q is available for free at: http://is.gd/mPeMTR About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. As of June 30, 2015, Motors Liquidation had $860 million in total assets, $74 million in total liabilities and $786 million in net assets in liquidation. MURRAY ENERGY: Moody's Lowers CFR to Ca, Outlook Stable ------------------------------------------------------- Moody's Investors Service downgraded the ratings of Murray Energy Corporation, including its corporate family rating to Ca from Caa1, probability of default rating (PDR) to Ca-PD from Caa1-PD, first lien term loan rating to Caa2 from B2, and the rating on second lien senior secured notes to C from Caa2. The outlook is stable. Issuer: Murray Energy Corporation Downgrades: Probability of Default Rating, Downgraded to Ca-PD from Caa1-PD Corporate Family Rating, Downgraded to Ca from Caa1 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD2) from B2 (LGD2) Senior Secured Regular Bond/Debenture, Downgraded to C (LGD5) from Caa2 (LGD5) Outlook Actions: Outlook, Changed To Stable From Negative RATINGS RATIONALE The downgrade reflects Moody's expectation that the company's leverage metrics and cash flow generation will continue to be under stress due to the headwinds facing the coal industry as well as the issues facing its affiliate Foresight Energy GP LLC, in which Murray holds 50% of limited partner units. As of Sept. 30, 2015, Murray's Debt/ EBITDA, as adjusted, stood at 6.5x and Moody's expects it to drift above 7x over the next eighteen months, as EBITDA declines and the company generates negative free cash flows. In December 2015, Foresight announced that it was notified by the administrative agent of its secured credit agreement that it was in default under the terms of the agreement, as a result of the recent developments in the litigation by trustee for the bondholders of the company's 2021 Senior Notes. The company continues to negotiate with its lenders to cure the alleged default events, and the outcome is uncertain. As of Sept. 30, 2015, the company had $600 million of 2021 Senior Notes outstanding, and $673 million under its senior secured bank credit facility. The company does not have sufficient liquidity to repay its debt if it were to be accelerated. Earlier in the year and effective November 2015, Foresight cut its quarterly cash distribution to $0.17 per unit for common unitholders from $0.35-$0.38 over the previous four quarters, while suspending its distribution on all subordinated units, which are held by Murray. This dividend cut will result in Murray receiving no dividends for the quarter. If this dividend policy by Foresight remains in place, it would result in no annual distributions to Murray. The downgrade also reflects the recent deterioration in seaborne and domestic coal prices, which Moody's expects to persist, putting pressure on average realizations over the next two years as higher priced contracts roll off. Moody's expects that the company's production volumes will also be under pressure over the next two years, due to the challenging industry conditions. The ratings continue to also reflect market leadership in Northern Appalachia (NAPP), operational diversity, solid contract positions, low-cost longwall mines, and low-cost barge and truck transportation to power plants served. Longer-term challenges include managing what we continue to expect will be a difficult environment in the coal industry and avoiding unexpected cash outlays related to the legacy liabilities acquired from CONSOL. Moody's expects Murray's liquidity to come under pressure over the next twelve months, which at Sept. 30, 2015, included $282 million in cash, and a little over $100 million of availability on their $225 million ABL facility maturing in December 2018. Murray's nearest debt maturity is $244 million remaining under secured term loan due in April 2017. The principal methodology used in these ratings was Global Mining Industry published in August 2014. NEW GULF RESOURCES: Can Hire Baker Botts as Bankruptcy Counsel -------------------------------------------------------------- New Gulf Resources, LLC, et al., sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Baker Botts L.L.P. as bankruptcy counsel despite a formal objection raised by Andrew R. Vara, Acting U.S. Trustee for Region 3, and an informal comment filed by an Ad Hoc Committee. As bankruptcy counsel, Baker Botts is expected to, among other things: a. advising the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. advising and consulting on the conduct of the Chapter 11 Cases, including all of the legal and administrative requirements of operating in chapter 11; c. attending meetings and negotiating with representatives of creditors and other parties in interest; d. taking all necessary actions to protect and preserve the Debtors’ estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e. preparing pleadings in connection with the Chapter 11 Cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. representing the Debtors in connection with negotiation, documentation and obtaining authority to enter into financing arrangements as may be required, including but not limited to, cash collateral agreements or financing documents; g. advising the Debtors in connection with any potential sale of assets or strategic transaction involving the Debtors or their assets; h. appearing before the Court and any appellate courts to represent the interests of the Debtors' estates; i. advising the Debtors regarding tax matters; j. taking any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan; and k. performing all other necessary legal services for the Debtors in connection with the prosecution of the Chapter 11 Cases, including: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Baker Botts' standard hourly rates for 2016 range are: Billing Category Range ---------------- ----- Partners $800 - $1,300 Special Counsel $600 - $1,000 Associates $425 - $725 Paraprofessionals $165 - $325 Professionals expected to have primary responsibility, and their 2016 rates for the matter are: Professional Rate ------------ ---- Luckey McDowell (Restructuring) $775 Jim Prince (Restructuring) $875 Steve Marcus (Tax) $1,050 Andrew Thomison (Finance) $675 Bryan Henderson (Transactional) $550 Meggie Gilstrap (Restructuring) $550 As of the Petition Date, the Debtors did not owe Baker Botts any amounts for legal services rendered. C. Luckey McDowell, Esq., a partner at Baker Botts L.L.P., assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. McDowell, pursuant to the U.S. Trustee Guidelines, discloses that Baker Botts has not agreed to a variation of its standard or customary billing arrangements for its engagement, except with respect to a Premium. Mc. McDowell adds that none of the Firm's professionals included in the engagement have varied their rate based on the geographic location of the Chapter 11 Cases. Mr. McDowell further discloses that prior to the Petition Date Baker Botts charged the Debtors at a preferred billing rate that incorporated a discount of approximately 10-15% off of the firm's standard billing rates. Baker Botts will continue to charge the Debtors at the preferred rate post-petition, subject to application of a Fee Premium. Baker Botts has provided the Debtors with a prospective budget and staffing plan for the Firm's engagement for the postpetition period. Mr. McDowell adds that Baker Botts previously disclosed its representation of Schlumberger Technology Corporation, one of the Debtors' vendors, as a Firm client in unrelated matters. He relates that since the Petition Date, it has come to his attention that Schlumberger has acquired an interest in Vector Seismic Data Processing Inc., another of the Debtors' vendors. Baker Botts does not represent Vector, and the Firm's representation of Schlumberger continues to be unrelated to the Debtors, he says. Court Reserves Ruling on Fee Premium In accordance with guidance from the Supreme Court and the Fifth Circuit, Baker Botts has modified its postpetition fee structure to account for the payment uncertainty associated with representing a debtor in bankruptcy. Subject to certain conditions, Baker Botts' aggregate fees incurred during the bankruptcy will be increased by 10% (the "Fee Premium"), aligning its bankruptcy fees more closely to its standard billing rates. According to Baker Botts, there are two notable conditions to the Fee Premium: (1) First, although the Fee Premium will be earned as services are provided, no portion of the Fee Premium will be payable until and unless the Bankruptcy Court enters an order approving Baker Botts' final fee application; and (2) Second, Baker Botts will waive its right to the entire Fee Premium if, and only if, Baker Botts does not incur material fees and expenses defending against any objection with respect to an interim or final fee application. If Baker Botts incurs material fees or expenses, Baker Botts will not waive the Fee Premium regardless of the outcome of the objection, the firm said. The Bankruptcy Court will make the determination as to whether any those fees and expenses are in fact material for the purposes of the Fee Premium. The U.S. Trustee complained that Baker Botts seeks to be retained under Section 327(a) of the Bankruptcy Code and does not expressly rely on section 328(a) for pre-approval of its Fee Premium. Nevertheless, the premise of the Application seeks court approval now for a Fee Premium as a term and condition of the employment, which is necessarily subject to review under section 328, and section 328 requires that any term of employment must be reasonable to be approved, the U.S. Trustee further complained. The U.S. Trustee argued that the requested 10% Fee Premium is impermissible and unreasonable and should not be approved. The Supreme Court, in Baker Botts LLP v. ASARCO LLC, ___ U.S. ___, 135 S. Ct. 2158 (2015), recently held that section 330(a) does not authorize a court to approve a law firm's fee for litigating its fee application. The Firm, the U.S. Trustee further argued, cannot circumvent ASARCO by having defense fees -- simply renamed as a waivable "Fee Premium" -- approved under section 328 to offset the cost of potential fee litigation. Moreover, the U.S. Trustee asserted that bankruptcy compensation must be comparable to non-bankruptcy compensation, and premium compensation by definition is not comparable and, therefore, not reasonable. In a certification of counsel, Ryan M. Bartley, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, said the Court has advised the Debtors that it would defer consideration of approval of the Fee Premium until a later date. The Debtors have shared with the U.S. Trustee and the Ad Hoc Committee a form of order, which defers consideration of the Fee Premium and otherwise grants the Application, and those parties have consented to its entry. The Court held that "[c]onsideration, authorization and approval of the provisions authorizing the Fee Premium, if any, are subject in all respects to further order of the Court after notice and hearing, and all rights of the Ad Hoc Committee, the Debtors, the U.S. Trustee, and Baker Botts, with respect to the Fee -- whether in opposition to or support of -- on any grounds are fully reserved." The U.S. Trustee is represented by: Richard L. Schepacarter, Esq. Jane M. Leamy, Esq. David Gerardi, Esq. United States Department of Justice Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207, Lockbox 35 Wilmington, DE 19801 Tel: (302) 573-6491 Fax: (302) 573-6497 The Debtors are represented by: M. Blake Cleary, Esq. Ryan M. Bartley, Esq. Justin Duda, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 N. King Street Rodney Square Wilmington, DE 19801 Tel: (302) 571-6600 E-mails: mbcleary@ycst.com rbartley@ycst.com jduda@ycst.com -- and -- C. Luckey McDowell, Esq. Ian E. Roberts, Esq. Meggie S. Gilstrap, Esq. BAKER BOTTS L.L.P. 2001 Ross Avenue Dallas, TX 75201 Tel: (214) 953-6500 E-mail: luckey.mcdowell@bakerbotts.com ian.roberts@bakerbotts.com meggie.gilstrap@bakerbotts.com About New Gulf Resources New Gulf Resources, LLC, NGR Holding Company LLC, NGR Texas, LLC, and NGR Finance Corp. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12566) on Dec. 17, 2015. The petition was signed by Danni Morris as chief financial officer. Founded in 2011 and headquartered in Tulsa, Oklahoma, New Gulf is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties, focused primarily in the East Texas Basin. The Company currently employs 55 people. The Debtors have engaged Baker Botts L.L.P., as bankruptcy counsel, Young, Conaway, Stargatt & Taylor, LLP as co-counsel, Barclays Capital Inc., as investment banker, Zolfo Cooper, LLC as financial advisor, and Prime Clerk LLC as claims and notice agent. Judge Brendan Linehan Shannon has been assigned the case. * * * Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware on Feb. 4, 2016, approved the disclosure statement explaining New Gulf Resources, LLC, et al.'s First Amended Joint Plan of Reorganization and scheduled the confirmation hearing for April 11, 2016, at 10:00 a.m. (prevailing Eastern Time). The Plan Objection Deadline and Voting Deadline are established as March 24, 2016. Prior to the Disclosure Statement hearing, the Debtors amended the Plan outline to provide that holders of Class 6 - Subordinated PIK Notes Claims will be entitled to receive: (i) if Class 6 votes to accept the Plan, its Pro Rata share of 12.5% of the New Equity Interests that are issued and outstanding as of the Effective Date; or (ii) if Class 6 does not vote to accept the Plan, its Pro Rata share of 5% of the New Equity Interests that are issued and outstanding as of the Effective Date. NGL ENERGY: Moody's Withdraws B2 Rating on $300MM Sr. Unsec. Notes ------------------------------------------------------------------ Moody's Investors Service has withdrawn the B2 rating on NGL Energy Partners LP's previously proposed $300 million senior unsecured notes. The senior notes offering was launched in November 2015 but was not completed. Issuer: NGL Energy Partners LP Ratings withdrawn: US$300 Million Senior Unsecured Regular Bond/Debenture, Withdrawn B2, LGD5 Headquartered in Tulsa, Oklahoma, NGL Energy Partners LP is a publicly traded MLP with diversified midstream assets in several key oil and gas basins in North America. NPC INT'L: Moody's Alters Outlook to Stable & Affirms B2 CFR ------------------------------------------------------------ Moody's Investors Service changed the ratings outlook of NPC International, Inc. to stable from negative and raised the company's Speculative Grade Liquidity rating to SGL-2 from SGL-3. Concurrently, Moody's affirmed NPC's B2 Corporate Family Rating, B2-PD Probability of Default Rating (PDR), B1 senior secured bank ratings and Caa1 senior unsecured note rating. RATINGS RATIONALE "The change in outlook to stable reflects Moody's view that NPC's leverage will remain well below 6.0 times while maintaining good liquidity." stated Bill Fahy, Moody's Senior Credit Officer. "These improvements are driven in part by the earnings benefit of materially lower commodity costs that has helped to offset higher labor costs and more recently a modest deceleration in negative comparable sales trends at Pizza Hut and strong operating trends at Wendy's which we expect to continue over the near term." stated Fahy. For the LTM period ending Sept. 30, 2015, NPC's debt to EBITDA was about 5.7 times. The Speculative Grade Liquidity rating was raised to SGL-2 from SGL-3 and reflects NPC's relatively steady cash flow generation and material cash balances and improved external sources of liquidity. NPC amended its bank facility that provided additional room under covenants and extended the maturity of its revolver. Overall, the SGL-2 rating reflects the expectation for good liquidity, as covenant compliance remains likely and the company's cash balances, cash flow and revolver availability are expected to cover basic working capital needs, capital expenditures and mandatory debt amortization for the next twelve months. Ratings affirmed are: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2-PD -- First lien senior secured revolving credit facility due September 2018 at B1 (LGD3) -- First lien senior secured term loan due December 2018 at B1 (LGD3) -- Unsecured notes due 2020 at Caa1 (LGD5) Rating raised: -- Speculative Grade Liquidity Rating to SGL-2 from SGL-3 Outlook changed to Stable The B2 CFR reflects NPC's relatively high leverage and modest interest coverage driven by weak operating trends to date at Pizza Hut and cost inflation related to wages as well as commodities, which have since materially subsided. The rating also considered NPC's limited product offering, concentrated day-part in lunch and dinner and limited geographic diversity. Supporting the rating are NPC's multiple brands, meaningful scale within the Pizza Hut franchise system and good liquidity. Ratings could be downgraded if a deterioration in operating performance resulted in debt/EBITDA above 6.0 times on a sustained basis. Any deterioration in liquidity, could also result in a downgrade. The ratings could be upgraded in the event a sustained improvement in operating performance, driven by profitable same store sales and new unit growth resulted in stronger debt protection metrics and liquidity. Specifically, an upgrade would require debt/EBITDA declining near 4.5 times and EBITA/ interest exceeding 2.0 times on a sustained basis. The principal methodology used in these ratings was Restaurant Industry published in September 2015. NPC International, Inc. is the world's largest Pizza Hut franchisee, operating 1,263 Pizza Hut restaurants and delivery units in 28 states and 143 Wendy's units in three states. Annual revenues are approximately $1.2 billion. NPC is owned by Olympus Partners. OFFSHORE DRILLING: Fitch Affirms 'B+' IDRs, Off Negative Watch -------------------------------------------------------------- Fitch Ratings has affirmed Offshore Drilling Holding S.A.'s (ODH) long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+'. Simultaneously, Fitch has removed the ratings from Negative Watch and assigned a Stable Outlook. KEY RATING DRIVERS ODH's ratings are supported by the company's solid commercial relationship with Petroleos Mexicanos SA (Pemex, IDR 'BBB+'); its only customer, and its solid contractual position, evidenced by its recent extension of the Centenario and Bicentenario contracts, that contributes to the company's relatively stable and predictable cash flow generation. The ratings also reflect the company's moderately high leverage, partial structural subordination and decreasing but still existing contract roll-over risk. Fitch forecasts leverage metrics to remain between 4.0x - 4.5x, consistent with the assigned rating over the rating horizon. The Stable Rating Outlook reflects the decreased re-contracting risk during 2016 - 2017, given the company's contract extensions for Centenario and Bicentenario until 2017. This adds to the stability and predictability of the company's cashflow generation during the current significant weak market environment for offshore drillers. Following the downward revision of Fitch's oil & gas price assumptions, the agency expects recovery for the offshore rig industry to take longer than previous expectations with dayrates and utilization rates improving by 2018. SOLID RELATIONSHIP; STRONG OFFTAKER ODH's ratings reflect the strong commercial relationship of the company and its shareholder, Grupo R, and Pemex. ODH currently owns three ultra-deepwater (UDW) sixth-generation dynamic positioning semisubmersible drilling rigs, which are contracted with Pemex at day rates ranging between USD365,000/day and USD489,000/day. Additionally, ODH was able to obtain long-term contracts with Pemex for two of its jackups, under a pressured global market for jackups. Fitch views this positively and as further evidence of the company's solid relationship with Pemex. ROLL-OVER AND DAY RATES RISK ODH is exposed to contract renewal risk given that the contracts for the three UDW drilling rigs expire before the maturity of the notes. The contracts for Centenario and Bicentenario have recently been extended until December 2017 at a dayrate of USD365,000/day, providing more certainty to the company's cashflow generation during 2016 - 2017 that may allow ODH to navigate the downcycle. Fitch has pushed back its recovery inflection point estimate into 2H' 2018 with a risk for further inflection point revisions. The rating incorporates Fitch's expectation that Pemex will re-contract these drilling rigs shortly before the contracts expire. OIL PRICE PRESSURES Offshore drillers continue to face depressed market conditions due to lower demand and a significant oversupply of rigs. The severe decline in oil prices has compounded the effects of the offshore rig oversupply cycle resulting in continued global market dayrate deterioration. Fitch believes that medium-term demand will rebound and absorb the newer high-quality assets. Fitch believes that an uptick in demand could lag supportive oil & gas price levels (estimated at $65 - $70/barrel for deepwater) by at least six-12 months. Moreover, Pemex may favor continuity and fostering relationships with its existing drilling providers under the right conditions. PARTIAL STRUCTURAL SUBORDINATION ODH's senior secured notes are guaranteed by the unencumbered restricted subsidiaries that own the Centenario and Bicentenario drilling rigs. The notes are currently structurally subordinated to a project-finance bank loan of approximately USD320 million, related to the financing of La Muralla IV. This bank debt has certain cash-sweep provisions restricting cash flow distributions to ODH. The bank loan amortizes through 2018 and once it is repaid, La Muralla IV will become a co-guarantor for the notes. MODERATELY HIGH LEVERAGE Fitch expects consolidated leverage to range between 4.0x and 4.5x, with the exception of years when the company adds financial debt to fund acquisitions without reporting a full year of operational revenues for the new assets. During the LTM ended Sept. 30, 2015, ODH's consolidated leverage was 3.9x. As of Sept. 30, 2015, total debt was USD1.3 billion, slightly down from USD1.52 billion, as of year-end 2013, and LTM EBITDA, as of the end of June 2015, was USD331 million. Fitch expects leverage to sharply decline below 3.0x once the five jackups have reported a full year of operations. KEY ASSUMPTIONS Fitch's key assumptions within Fitch's rating cases for ODH include: Fitch Base Case: -- Brent oil price that trends up from $45/barrel in 2016 to a longer-term price of $65/barrel; -- Current contracted backlog is forecast to remain intact with no renegotiations contemplated for both the ultra-deepwater rigs and jackups; -- After expiration of the contracts for the semisubs, Centenario and Bicentenario are re-contracted in 2018 at the $365 thousand, considering the negotiated floor within the contracts; -- 2 Jackups start operations during the 1Q2016 at day rate of $130 thousand, the remaining 3 units start operations in 2016 at the same rate; -- Increased capital expenditures of approximately $1 billion during 2016 due to the financing of the Jack Ups; -- Regular maintenance capex of approximately $90 million during the next 5 years; -- No dividend payments forecasted. Fitch Stress Case makes the following key adjustments to the Fitch Base Case: -- Brent oil price that trends up from $35/barrel in 2016 to a longer-term price of $45/barrel; -- Starting in 2017, renegotiations are considered and market day rates are assumed to be $200,000 for higher specification ultra-deepwater rigs and $90,000 for the jackups; -- Rigs performance is assumed to deteriorate with declining uptime levels to 90% on average starting this year. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to a negative rating action include: -- Through-the-cycle consolidated debt/EBITDA of 5x or above on a sustained basis; -- Contracts are not rolled over within six months after expiration or contracted day rates experience further pressure and are significantly lower than current market dayrates; -- The company faces delays of six months or greater contracting new equipment after it is delivered. No positive rating actions are currently contemplated over the near-term given the weak offshore oilfield services outlook. Future developments that may, individually or collectively, lead to a positive rating action include: -- Through-the-cycle consolidated debt/EBITDA decreases below 4.0x on a sustained basis; -- The company contracts all its drilling equipment with very limited to none out-clauses and with improved fixed day rates suggesting strengthening market conditions. LIQUIDITY ODH's liquidity position is supported by the company's stable and predictable cash flow generation coupled with a lengthened debt maturity profile. ODH's liquidity position is further supported by its cash on hand, which as of Sept. 30, 2015, was approximately USD138.5 million. The company also maintains a one-year interest reserve account for the 2020 notes and La Muralla IV in an amount equal to USD106.2 million. This favourably compares with the company's short-term needs of USD80.8 million to repay short-term debt. Manageable amortizations of approximately $100 - $160 million per year are expected for the next four years which are expected to be covered with cash on hand and FCF. FULL LIST OF RATING ACTIONS Fitch has affirmed ODH's ratings as follows: -- LT Foreign and local currency IDRs at 'B+'; Stable Outlook -- Senior secured notes at 'BB-'; Recovery Rating 'RR3'. OFFSHORE DRILLING: S&P Lowers CCR to 'B+', Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Offshore Drilling Holding S.A. (ODH) to 'B+' from 'BB-'. The outlook is stable. The recovery rating on the issue-level rating remains unchanged at '3'. The downgrade reflects S&P's expectation that ODH will show weaker financial performance, given S&P's belief that day rates will remain at lower levels than those it previously expected. Day rates for two of the company's oil rigs--Centenario and Bicentenario— are at $365,000 and S&P expects them to remain at the contractual minimum for the next 12 months due to the continued low oil prices (compared to an average of $530,000 in 2014). These day rates will result in weaker interest coverage ratios and a slower cash build-up for the notes' bullet payment. Under S&P's revised base case scenario, the company's cash flow will only be able to cover around 50% of the $950 million principal payment due in 2020. As a consequence, the rating on the notes incorporates refinancing risk. As S&P expected, charter agreements with Petroleos Mexicanos (Pemex; BBB+/Stable/--), ODH's only client, now have a shorter term. Although this can result in a potential revision of day rates if oil prices rebound, it also leads to less cash flow predictability and higher recontracting risk. Under S&P's updated base-case assumptions, it expects ODH's annual revenue and EBITDA to fall to $285 million and $218 million, respectively, in 2016 from $421 million and $360 million in 2014. S&P expects the company will accumulate cash flow by 2020 that will account for about 50% of the $950 million bullet payment and that the remainder will be refinanced. S&P projects funds from operations (FFO) to interest of 2.3x in 2016 and 2.5x in 2017 and FFO to debt of 11% and 16% in the same years. These ratios are now in line with S&P's 'B+' rating and could worsen if the $365,000 day rates persist beyond 2018 or if ODH fails to renew its contracts until its debt matures in 2020. The 'B+' ratings also reflect ODH's somewhat uncertain quality of cash flow, high concentration and correlation of assets, and ability to service its financial obligations. This assessment incorporates refinancing risk and reflects the company's risk of recontracting the charter agreements when they expire. The rating also reflects ODH's prudent financial management and its exposure to a highly competitive and cyclical industry. However, the mitigating factor is the high likelihood that Pemex will recontract ODH's vessels, given its plans to continue investing in oil exploration and production (E&P) activities in the Gulf of Mexico. In S&P's view, ODH enjoys adequate contractual foundations thanks to the three charter agreements with Pemex Exploracion y Produccion (PEP; Pemex's exploration and production arm). S&P's analysis also incorporates ODH's more than 50 years of experience in Mexico's oil and gas industry through its parent Grupo R (Not rated), its solid business relationship with Pemex, and the strong collateral package, which benefits ODH's lenders. S&P believes ODH has the ability to absorb low probability adverse events in the next two years without incurring additional debt, thanks to its current cash balances and its manageable debt maturity schedule. However, S&P also considers that due to market conditions, ODH's access to capital markets could be restricted. ODH will continue to build up cash to cover its $950 million senior secured notes bullet payment in 2020. The stable outlook reflects S&P's expectation that current day rates of $365,000 for Centenario and Bicentario and $489,000 for La Muralla IV, would allow the company to maintain stable and relatively predictable cash flow generation and main credit metrics, such as FFO to interest ratio of around 2.5x and FFO to debt in the 15% range in the next 12 months. S&P could lower the rating on ODH if any of the platforms is unable to secure a contract after their respective maturity dates or if day rates fall to levels that lead to FFO to interest expense of less than 1.5x and FFO to debt of less than 12%. In addition, S&P could revise the ratings downward if any of the assets owned by ODH experience an operational issue that negatively affects the company´s cash flow generation. Although not likely in the short term, S&P could upgrade the ratings if it perceives a significant improvement in day rates that translates in stronger coverage ratios, with FFO to interest coverage above 2.7x and FFO to debt of more than 19%, and if S&P assess decreases in its exposure to refinancing risk. The recovery rating of '3' on the senior secured bonds indicates S&P's expectation for meaningful recovery (in the 70%-90% range) in a default scenario. S&P valued the company on a liquidated value basis, subject to the stresses incorporated in its simulated default scenario. S&P acknowledges that default modeling, valuation, and restructuring (whether as part of a formal bankruptcy proceeding or otherwise) are inherently dynamic and complex processes that don't lend themselves to precise or certain predictions. S&P's recovery ratings are intended to provide educated approximations of post-default recovery rates, rather than exact forecasts. OFFSHORE GROUP: Files Fourth Plan Supplement -------------------------------------------- Vantage Drilling International (f/k/a Offshore Group Investment Limited) and certain of its affiliates filed on Feb. 10, 2016, a fourth supplement to their confirmed Prepackaged Plan. Included in the Fourth Supplement is the Debtors' filing for the first time of their proposed Management Incentive Program. A copy of the document is available for free at: http://bankrupt.com/misc/OGIL_240_Mgt_Incentive_Plan.pdf The purpose of the OGIL 2016 Management Incentive Plan is to further align the interests of participants with those of the shareholders by providing incentive compensation opportunities tied to the performance of the common stock and stapled securities and by promoting increased ownership of the common stock and/or stapled securities by such individuals. The Fourth Supplement also contained updated filings of: A. Amended and Restated Credit Facility Agreement B. New Second Lien Notes Indenture C. New Second Lien Intercreditor Agreement D. New Secured Convertible PIK Notes Indenture E. New Third Lien Intercreditor Agreement F. Form of Stapled Units Updated H. New Shareholders Agreement I. Registration Rights Agreement with Holders J. Registration Rights Agreement with Vantage Parent K. Amended Organizational Documents M. Directors and Officers of Reorganized Debtors Updated Copies of the exhibits contained in this Plan Supplement may be obtained free of charge through the Web site of the Debtors' notice, claims, and solicitation agent at http://dm.epiq11.com/OGI About Offshore Group Offshore Group Investment Limited is an international offshore drilling company operating a fleet of modern, high-specification drilling units around the world. Its principal business is to contract their drilling units, related equipment, and work crews to drill underwater oil and natural gas wells for major, national, and independent oil and natural gas companies. Offshore Group Investment Limited and 23 other units of publicly traded Vantage Drilling Company filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-12421) on Dec. 3, 2015 to pursue a prepackaged restructuring backed by Vantage. Christopher G. DeClaire, the authorized officer, signed the petition. The Debtors have engaged Weil, Gotshal & Manges LLP as counsel; Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co. LLC as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. * * * Offshore Group on Feb. 10, 2016, disclosed that it has successfully completed its prepackaged restructuring and recapitalization and emerged from chapter 11 bankruptcy protection. The Debtors' prepackaged plan was confirmed by the bankruptcy judge Jan. 15, 2016. OFFSHORE GROUP: Prepackaged Plan Has Feb. 10 Effective Date ----------------------------------------------------------- Offshore Group Investment Limited, et al., said in a filing with the U.S. Bankruptcy Court for the District of Delaware that the Effective Date of their Prepackaged Plan occurred on February 10, 2016. On the Effective Date, Offshore Group Investment Limited changed its name to Vantage Drilling International. The Reorganized Debtors have filed a Certification of Counsel Regarding Order Authorizing Change to Case Caption as a Result of Name Change to change the consolidated caption of these cases from "In re Offshore Group Investment Limited, et al." to "In re Vantage Drilling International (f/k/a Offshore Group Investment Limited), et al." The Prepackaged Plan and the provisions thereof are binding on the Debtors, the Reorganized Debtors, any holder of a Claim against, or Interest in, the Debtors and such holder's respective successors and assigns, whether or not the Claim or Interest of such holder is impaired under the Prepackaged Plan and whether or not such holder or entity voted to accept the Prepackaged Plan. Plan Confirmation Order Judge Brendan L. Shannon on Jan. 15, 2016, entered Findings of Fact, Conclusions of Law and Order confirming Offshore Group Investment Limited, et al.'s Joint Prepackaged Plan and approved the Disclosure Statement. The Prepackaged Plan is supported by 98.88% of the Debtors' secured term loan and noteholders and 100% of the Debtors' secured revolving lenders. These are the only creditors entitled to vote on the Prepackaged Plan. Unsecured claims are unimpaired. The Debtors' restructuring will leave the Debtors' business intact under OGIL and will substantially de-lever it. The Debtors' balance sheet liabilities will be reduced from greater than $2.6 billion in secured debt to $969 million in secured debt or $219 million in secured debt once the New Secured Convertible PIK Notes are converted into New Common Shares. Under the terms of the Prepackaged Plan, holders of Allowed Administrative Expense Claims, Fee Claims, and Priority Tax Claims shall be paid in full in cash. Holders of Allowed Claims in Class 1 (Priority Non-Tax Claims), Class 2 (Other Secured Claims), Class 5 (General Unsecured Claims), and Class 6 (Intercompany Claims), will be left unimpaired. Holders of Allowed Claims in Class 7 (Subordinated Claims) and holders of Interests in Class 9 (Intercompany Interests) will receive no distribution and will be Impaired. A copy of the Amended Prepackaged Plan filed by the Debtors on Jan. 11, 2016, is available for free at: http://bankrupt.com/misc/Offshore_G_166_Am_Plan.pdf Attorneys for the Debtors: RICHARDS, LAYTON & FINGER, P.A. Mark D. Collins, Esq. Daniel J. DeFranceschi, Esq. Zachary I. Shapiro, Esq. One Rodney Square 920 North King Street Wilmington, DE 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 - and - WEIL, GOTSHAL & MANGES LLP Ray C. Schrock, P.C. Ronit J. Berkovich 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Nobu Su and F3 Capital's attorneys: MONZACK MERSKY MCLAUGHLIN AND BROWDER, P.A. Rachel B. Mersky, Esq. 1201 N. Orange Street, Suite 400 Wilmington, DE 19801 Telephone: (302) 656-8162 Facsimile: (302) 656-2769 E-mail: rmersky@monlaw.com - and - HOOVER SLOVACEK LLP Deirdre Carey Brown, Esq. Galleria Tower II 5051 Westheimer, Suite 1200 Houston, TX 77056 Telephone: 713-977-8686 Facsimile: 713-977-5395 E-mail: brown@hooversovacek.com About Offshore Group Offshore Group Investment Limited is an international offshore drilling company operating a fleet of modern, high-specification drilling units around the world. Its principal business is to contract their drilling units, related equipment, and work crews to drill underwater oil and natural gas wells for major, national, and independent oil and natural gas companies. Offshore Group Investment Limited and 23 other units of publicly traded Vantage Drilling Company filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-12421) on Dec. 3, 2015 to pursue a prepackaged restructuring backed by Vantage. Christopher G. DeClaire, the authorized officer, signed the petition. The Debtors have engaged Weil, Gotshal & Manges LLP as counsel; Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co. LLC as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. OFFSHORE GROUP: Su & F3 Capital Appeal Plan Confirmation Order -------------------------------------------------------------- Hsin Chi Su and F3 Capital have taken an appeal from the ruling of the United States Bankruptcy Court for the District of Delaware confirming Offshore Group Investment Limited, et al.'s Joint Prepackaged Plan. They ask the U.S. District Court for the District of Delaware to determine whether the Bankruptcy Court erred in granting confirmation of the Debtors' Plan. Mr. Su and F3 Capital also appeal from a ruling made by the bankruptcy judge on Jan. 14, 2016, denying them standing to appear in the Debtors' Chapter 11 cases. Hsin Chi Su a/k/a Nobu Su ("Nobu Su") was the lone remaining objector to the Debtors' Plan. As reported in the TCR, Mr. Su and F3 Capital said that the Debtors attempt to favor current management and favored creditors to the detriment of parties like Mr. Su, F3 Capital and the public shareholders and creditors of Vantage Drilling Company by taking actions to divest Vantage Drilling of assets without complying with Cayman Law. The Debtors suggest that unsecured creditors are unimpaired. However, they are impaired given there is a provision to deny post-petition interest, Mr. Su and F3 Capital argued. Furthermore, they noted that the universe of unsecured creditors is unknown. The Debtor's Plan and Disclosure Statement, they point out, also does not deal with the issue of potential maritime claims which would prime other claims and could arise after confirmation. The Debtors respond that Mr. Su has no legal rights against any Debtor in the Chapter 11 cases. Mr. Su is the shareholder of an entity (F3 Capital) that holds a disputed, unliquidated claim against and equity interest in Vantage Drilling Company ("Vantage Parent"), the nondebtor parent of OGIL. According to the Debtors, Mr. Su's rights against Vantage Parent will be addressed in the Cayman Islands' proceeding, along with the $1.5 billion deficiency claim of the Debtors' secured term loan lenders and noteholders that also exists in that proceeding. The Debtors also refute Mr. Su's contentions that shareholders are deprived of significant value in the Debtors' estates. They aver that Vantage Parent is "hopelessly out of the money." Attorneys for Hsin Chi Su and F3 Capital: MONZACK MERSKY MCLAUGHLIN AND BROWDER, P.A. Rachel B. Mersky 1201 N. Orange Street, Suite 400 Wilmington, DE 19801 Telephone: (302) 656-8162 Facsimile: (302) 656-2769 E-mail: rmersky@monlaw.com - and - HOOVER SLOVACEK LLP Deirdre Carey Brown Galleria Tower II 5051 Westheimer, Suite 1200 Houston, TX 77056 Telephone: 713-977-8686 Facsimile: 713-977-5395 E-mail: brown@hooversovacek.com About Offshore Group Offshore Group Investment Limited is an international offshore drilling company operating a fleet of modern, high-specification drilling units around the world. Its principal business is to contract their drilling units, related equipment, and work crews to drill underwater oil and natural gas wells for major, national, and independent oil and natural gas companies. Offshore Group Investment Limited and 23 other units of publicly traded Vantage Drilling Company filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-12421) on Dec. 3, 2015 to pursue a prepackaged restructuring backed by Vantage. Christopher G. DeClaire, the authorized officer, signed the petition. The Debtors have engaged Weil, Gotshal & Manges LLP as counsel; Richards, Layton & Finger, P.A. as co-counsel; Lazard Freres & Co. LLC as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. * * * Offshore Group on Feb. 10, 2016, disclosed that it has successfully completed its prepackaged restructuring and recapitalization and emerged from chapter 11 bankruptcy protection. The Debtors' prepackaged plan was confirmed by the bankruptcy judge Jan. 15, 2016. OKKO HOMES: Seeking Offer for Assets; March 14 Bid Deadline Set --------------------------------------------------------------- Hardie & Kelly Inc., in its capacity as court-appointed receiver of Okko Homes Inc. and Okko Communities, is accepting offers for Okko's right, title and interest in Sullivan Landing, inclusive of two duplex show homes, one of which has been furnished. Okko substantially completed a 55 lot serviced residential development located in the City of Kimberley, British Columbia known local as Sullivan Landing. The deadline for offer is 2:00 p.m. MST on March 14, 2016. Any sale will be subject to approval by the Court of the Queen's Bench of Alberta and the Supreme Court of British Columbia and the receiver reserves the right to enter into any sale prior to the deadline and is not obligated to accept the highest, or any offer. To obtain further information and to arrange for a viewing ok Okko's assets, please contact Joanne Kitt of RE/MAX Caldwell Agencies at 877 427-2221 or email at joanne@caldwellagencies.com. The firm can be reached at: Hardie & Kelly Inc. Trustee in Bankruptcy 110, 5800 - 2nd Street S.W. Calgary, Ab T2H 0H2 Tel: 403-777-9999 Fax: 403-640-0591 OUTER HARBOR: U.S. Trustee to Hold 341 Meeting on March 9 --------------------------------------------------------- Andrew Vara, acting U.S. trustee for Region 3, has requested the Clerk of Bankruptcy Court to schedule a meeting of creditors of Outer Harbor Terminal LLC on March 9, 2016, at 2:00 p.m. Mr. Vara plans to hold the meeting at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, 844 King Street, Wilmington, Delaware. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Outer Harbor Oakland, California-based port operator Outer Harbor Terminal, LLC, filed for Chapter 11 protection (Bankr. D. Del. Case No. 16-10283) on Feb. 1, 2016. The Hon. Laurie Selber Silverstein presides over the case. Milbank, Tweed, Hadley & Mccloy LLP is the Debtor's general counsel. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as its Delaware counsel. The Debtor estimated assets and debts at $100 million to $500 million. The petition was signed by Heather Stack, chief financial officer. OUTER HARBOR: US Trustee Unable to Form Creditors' Committee ------------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, said he wasn't able to form a committee of unsecured creditors in Outer Harbor Terminal LLC's Chapter 11 case due to "insufficient response" from creditors. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Outer Harbor Oakland, California-based port operator Outer Harbor Terminal, LLC, filed for Chapter 11 protection (Bankr. D. Del. Case No. 16-10283) on Feb. 1, 2016. The Hon. Laurie Selber Silverstein presides over the case. Milbank, Tweed, Hadley & Mccloy LLP is the Debtor's general counsel. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as its Delaware counsel. The Debtor estimated assets and debts at $100 million to $500 million. The petition was signed by Heather Stack, chief financial officer. OVERLAND PARK: Moody's Affirms Ba1 Rating on $41MM Revenue Bonds ---------------------------------------------------------------- Moody's Investor Service has affirmed the Ba1 underlying ratings on the Overland Park Development Corporation, KS's $41 million First Tier Refunding Revenue Bonds, Series 2007A (Overland Park Convention Center Hotel) and $62.5 million Second Tier Refunding Revenue Bonds, Series 2007B (Overland Park Convention Center Hotel). The outlook is stable. Summary Rating Rationale The Ba1 ratings reflect the hybrid bond security that includes the broader city-wide transient guest tax (TGT) revenues that are available on a rolling basis to help pay debt service if net hotel operating revenues are insufficient. The pledged TGT revenues improve the project's cash flow predictability as they provide needed support to offset volatile net hotel operating revenues that are highly sensitive to economic downturns. The project's use of TGT revenues has occurred since 2008 and Moody's expects this to continue until the debt is repaid given debt service costs annually rise by an average of 2.76% through the 2031 maturity date. The ratings also reflect the hotel's relatively sound market position as one of only a few higher-end hotels in the region and its favorable location adjacent to the Overland Park convention center that drives more predictable group bookings that comprised 48% of room nights and 44% of revenue in 2015. The hotel's location near a concentration of many regional office parks and business including, Sprint Corporation's (corporate family rating, B3 negative) headquarters, also supports transient business demand for the facility. The rating incorporates the hotel's improving operating performance with annually rising RevPAR since 2010 driven by higher average daily room rates in recent years as occupancy rates are near prerecession 2007 peak levels. The hotel operator has maintained the facility in good condition and the city remains committed to the facility and continues to promote its use to new businesses that locate in the city. The ratings incorporate the need for a room renovation plan over the next few years that will have unknown operating impacts and will take a few years to complete incrementally so the facility can remain open. The renovations are likely to be funded from the current Furniture, Fixtures, and Equipment (FFE) fund balances and from annual required deposits into the FFE fund. The first and second tier bonds are both rated Ba1. The second tier bonds benefit from a larger 4.5% share of the city-wide pledged hotel tax revenues while the first tier bonds only receive a 1.5% share. On balance, the higher amount of pledged hotel tax revenues for the second tier bonds balances the second tier's subordinate claim on net hotel operating revenues. Rating Outlook The stable outlook reflects Moody's expectation that there will be gradual improvements to both the net operating revenues of the hotel and the TGT revenues in line with rising operating and debt service costs. Factors that Could Lead to an Upgrade Sustained revenue growth that exceeds rising debt service and operating costs resulting in stronger financial metrics Factors that Could Lead to a Downgrade Total net hotel operating revenues and/or TGT revenues do not grow in step with rising debt service costs A decline in demand that reduces margins and requires more TGT revenues on a sustained basis. Legal Security The revenue bonds are special, limited obligations of the corporation, secured by the hotel's net operating revenues and monies held by the trustee. There is no cross default between the First and Second tier liens. The rate covenant requires net revenues from hotel operations alone, not including TGT revenues, to be at least 1.05 times the total debt service required on all outstanding bonds. In the event the corporation fails to meet the covenant, the corporation must engage a hotel consultant to recommend how to improve operations in order generate more revenues to meet future debt service requirements. The corporation has not meet this rate covenant since 2008, but the corporation is not only in technical default as it has complied with all required actions and has continued to make all payments on time and in full. The First tier bonds' additional bonds test requires debt service coverage on the First tier bonds to be at least 2.25 times and debt service coverage on all bonds to be at least 1.10 for the most recent calendar year and on a forward-looking basis through the final interest payment. The Second tier bonds' additional bonds test requires a total debt service coverage ratio of at least 1.10 times for the most recent calendar year and on a forward-looking basis through the final interest payment, along with a TGT coverage ratio of debt service by at least 1.00 times in the most recent year and on a forward-looking basis through the final interest payment. The bonds are further secured by a pledge on city-wide Transient Guest Tax (TGT) revenue. The city is obligated, under certain conditions, to make available its TGT revenue to help pay the debt service on the bonds according to the terms of a Debt Service Support Agreement. The TGT is a 6% tax levied on gross hotel, motel, or tourist accommodation revenues earned within the city, which has about 5,285 available rooms. The tax is collected by the state, and returned to the city (less a 2% administration fee) at least quarterly. The senior tier bonds receive 1.5% of the 6% TGT collections and the second tier bonds receive the remaining 4.5%. The relatively greater amount pledged to the second tier bonds accounts for the second tier's rating at the same level as the senior lien debt, despite the senior-subordinate relationship with respect to hotel net operating cash flows. Failure by the city to appropriate TGT revenues is an event of default under the lease between the corporation and the city and could result in a loss of rental payments to the city. The city may be released of its support obligations under the agreement if the corporation achieves debt service coverage ratios for three consecutive years of 2.75 times on the first tier and 2.25 times on the second tier. Additionally, the corporation must demonstrate that the Corporation Reserve Fund (the bottom fund in the corporation's flow of funds) contains an amount equal to maximum annual debt service on both the first and second tier bonds. If subsequent to the release of the city of its support obligations the corporation's debt service coverage falls below 2.25 times and 1.75 times on the first and second tier bonds, respectively, the agreement must be reinstated. Obligor Profile Overland Park Development Corporation is a not-for-profit corporation formed for the purpose of facilitating financing, construction, and ownership of the hotel. The 412-room hotel opened in December 2002 and is connected to the Overland Park Convention Center in Overland Park, Kansas, a Aaa rated suburb of Kansas City. The hotel is owned by the corporation, an instrumentality of the city. The corporation's sole purpose is to finance, build, and operate the hotel which is managed by the Sheraton Operating Corporation under a management agreement that will extend through 2022. The corporation has entered into a 60-year lease with the city for use of the land and makes annual lease payments to the city, which are subordinate to debt service. The city cannot terminate the lease for nonpayment of annual rent. PARAGON OFFSHORE: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Paragon Offshore Drilling LLC 16-10385 aka Noble Drilling Corporation 3151 Briarpark Drive, Suite 700 Houston, TX 77042 Paragon Offshore plc 16-10386 Paragon Drilling Services 7 LLC 16-10387 Paragon Offshore Finance Company 16-10388 Paragon Offshore Leasing (Switzerland) GmbH 16-10389 Paragon Offshore do Brasil Ltda. 16-10390 Paragon International Finance Company 16-10391 Paragon Asset (ME) Ltd. 16-10392 Paragon Offshore Holdings US Inc. 16-10393 Paragon Asset (UK) Ltd. 16-10394 Paragon FDR Holdings Ltd. 16-10395 Paragon Offshore International Ltd. 16-10396 Paragon Offshore (North Sea) Ltd. 16-10397 Paragon Duchess, Ltd. 16-10398 Paragon (Middle East) Limited 16-10399 Paragon Offshore (Luxembourg) S. r.l. 16-10400 Paragon Holding NCS 2 S.a.r.l. 16-10401 Paragon Leonard Jones LLC 16-10402 PGN Offshore Drilling (Malaysia) Sdn. Bhd. 16-10403 Paragon Offshore (Nederland) B.V. 16-10404 Paragon Offshore Contracting GmbH 16-10405 Paragon Offshore (Labuan) Pte. Ltd. 16-10406 Paragon Holding SCS 2 Ltd. 16-10407 Paragon Asset Company Ltd. 16-10408 Paragon Holding SCS 1 Ltd. 16-10409 Paragon Offshore Leasing (Luxembourg) S.a r.l. 16-10410 Type of Business: Drilling Rig Operator Chapter 11 Petition Date: February 14, 2016 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Christopher S. Sontchi Debtors' Gary T. Holtzer, Esq. General Stephen A. Youngman, Esq. Counsel: WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: gary.holtzer@weil.com stephen.youngman@weil.com Debtors' Local Mark D. Collins, Esq. Counsel: Amanda R. Steele, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: 302 651-7700 Fax: 302-651-7701 Email: collins@RLF.com Debtors' LAZARD FRERES & CO. LLC Financial Advisor: Debtors' ALIXPARTNERS, LLP Restructuring Advisor: Debtors' KURTZMAN CARSON CONSULTANTS Claims and Noticing Agent: Estimated Assets: $1 billion to $10 billion Estimated Debts: $1 billion to $10 billion The petition was signed by Randall D. Stilley, authorized representative. List of Paragon Offshore Drilling's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- -------------- Deutsche Bank Trust Bond Debt $1,012,035,280 Company Americas, AS Trustee, Under Senior Notes Indenture Dated July 18, 2014 60 Wall Street, 16th Floor Mail Stop: NYC60-1630 New York, NY 10005 Attn: Corporates Team Deal Manager - Paragon Offshore PLC National Oilwell Varco, Inc. Trade Debt $3,775,369 7909 Parkwood Circle Drive Houston, TX 77036-6565 Keppel Verolme BV Trade Debt $1,600,275 PO Box 1001 Rozenburg 12 3180 AA Netherlands Advanced Joining Trade Debt $455,000 Technologies, Inc. 945 Buker Hill Road, Ste 500 Houston, TX 77024 Now, Inc. (DBA DNow LLP) Trade Debt $441,908 7402 North Eldridge Parkway Houston, TX 77041 GE Power Conversion Do Brasil LTDA Trade Debt $336,566 AV. Alvarez Cabral 1345 MG 30170-001 Brazil Cameron France SAS Trade Debt $329,280 Plaine St Pierre - CS620 Beziers Cedex 75 34535 France Bentec GMBH Trade Debt $306,591 Deilmannstr 1 Bad Bentheim 11 48443 Germany AllRig, Inc. Trade Debt $280,746 1644 Coteau Road Houma, LA 70364 Chantier Naval Et Industriel Trade Debt $269,515 Du Cameroun SA Zone Amont Doula Doula 2389 Cameroon Rignet, Inc. Trade Debt $225,019 International SOS Professional $224,184 Services Control Union Testing and Trade Debt $213,982 Inspections BV Dynamic Drilling & Services Trade Debt $207,840 PVT Ltd. Gecko ME Trade Debt $206,956 Baker Manufacturing Company Trade Debt $189,393 Mammoet Nederland BV Trade Debt $183,648 Offshore Accomodation Contractors Trade Debt $173,660 Hydril USA Distribution LLC Trade Debt $162,467 De Nora Water Technologies Trade Debt $162,412 Teco Solutions AS Trade Debt $160,316 Crowner's Services BV Trade Debt $154,797 Spinneys ABU Dhabi LLC Trade Debt $147,485 Electro-Flow Controls Ltd. Trade Debt $140,450 Dunlop Oil & Marine Ltd. Trade Debt $134,515 Thrustmasters of Texas, Inc. Trade Debt $129,431 Deloitte Touche Tohmatsu Tax Trade Debt $127,762 Pon Power BV Trade Debt $113,606 Neptunus Power Plant Trade Debt $103,914 Highland Rope Access Inspection Ltd Trade Debt $90,769 PARAGON OFFSHORE: Files for Chapter 11 With Plan ------------------------------------------------ Paragon Offshore plc and 25 of its subsidiaries filed with the U.S. Bankruptcy Court for the District of Delaware separate Chapter 11 bankruptcy petitions on Feb. 14, 2016, with an accompanying joint Chapter 11 plan of reorganization. The Debtors reported total assets of $2.47 billion and total debts of $2.96 billion as of Sept. 30, 2015. The financial restructuring is expected to reduce Paragon's debt by more than $1 billion and allow existing equity holders to retain 65% equity in the reorganized Debtors. The consensual restructuring is also intended to eliminate the potential risk of costly multi-party litigation. Certain creditors holding approximately 95.62% of the Debtors' Revolving Credit Agreement Claims and approximately 76.88% of the Debtors' Senior Notes Claims entered into a plan support agreement. Under the terms of the Plan Support Agreement, the Consenting Creditors agreed to a deleveraging transaction that would restructure the existing debt obligations of the Debtors in chapter 11 through the Plan. The rights of holders of General Unsecured Claims will be left unaltered by the Plan, and the Debtors will continue to pay or dispute each General Unsecured Claim in the ordinary course of business. Paragon Offshore plc also entered into a binding term sheet with Noble Corporation plc, the Debtors' former parent, with respect to a definitive settlement agreement, under which Noble will provide direct bonding to satisfy requirements necessary to challenge certain tax assessments in Mexico relating to the Debtors' business. In connection with Paragon's spin-off on Aug. 1, 2014, Paragon gave Noble promissory notes totaling approximately $1.7 billion. As part of the Spin-Off, Paragon borrowed $650 million under the Secured Term Loan and issued approximately $1.03 billion under the Senior Notes Indenture. Proceeds of these borrowings were transferred to Noble in satisfaction of the promissory notes. James A. Mesterharm, managing director of AlixPartners, LLP, the Debtors' restructuring advisor, said that due to the amount of debt Paragon incurred in connection with the Spin-Off and the nature of the assets acquired, Paragon could not absorb the ongoing and precipitous decline in oil and gas prices and the corresponding decline in demand for their services. "Although Paragon does not face any maturities on material secured debt until 2019, the severity and duration of the market downturn has increased the risk that existing customer contracts, some of which are due to expire in the near term, will not be renewed or will be renewed at materially reduced prices," Mr. Mesterharm maintained. The Debtors are also dealing with the termination of longer-term contracts, including contracts with Pemex and Petrobras. Concurrently with the filing of the petitions, the Debtors filed first day motion seeking authority to, among other things, use existing cash management system, prohibit utility providers from discontinuing services, pay employee compensation, pay general unsecured creditors that provide goods or services (many of which are located in jurisdictions outside the United States), and use cash collateral. These motions will ensure that the company's vendors, as well as employees, will continue to be paid. Paragon expects to maintain sufficient liquidity throughout the restructuring process to maintain its business operations. Randall D. Stilley, President and Chief Executive Officer of Paragon, said, "Paragon has acted proactively to strengthen the company's balance sheet in this challenging environment. We look forward to moving as quickly as possible through this process while maintaining our focus on delivering safe, reliable, and efficient operations as the industry's High-Quality, Low-Cost drilling contractor. We are confident that Paragon will emerge as an even stronger company, better positioned for long-term growth and success." About Paragon Offshore Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a global provider of offshore drilling rigs. Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales and its ordinary shares have been trading on the over-the-counter markets under the trading symbol "PGNPF" since December 18, 2015. Paragon Offshore Plc, et al., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016, after reaching a deal with lenders on a reorganization plan that would eliminate $1.1 billion in debt. The petitions were signed by Randall D. Stilley as authorized representative. Judge Christopher S. Sontchi is assigned to the cases. The Debtors have engaged Weil, Gotshal & Manges LLP as general counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard Freres & Co. LLC as financial advisor, Alixpartners, LLP as restructuring advisor, and Kurtzman Carson Consultants as claims and noticing agent. Judge Christopher S. Sontchi is assigned to the cases. PARAGON OFFSHORE: Files Pre-Arranged Reorganization Plan -------------------------------------------------------- Paragon Offshore plc, et al., filed with their Chapter 11 bankruptcy petitions a proposed reorganization plan that lets holders of $1.02 billion in senior notes recover up to 72.6%, returns 100% cents on the dollar to general unsecured creditors, and lets existing shareholders retain 65% of the company. Holders of approximately 95.62% in outstanding principal amount of the revolving credit agreement claims entitled to vote on the Plan (the "Consenting Revolver Lenders") and holders of 76.88% in outstanding principal amount of the senior notes claims entitled to vote on the Plan have already agreed to vote in favor of the Plan. The restructuring will leave the Debtors' business intact under Paragon Offshore plc and substantially de-lever it, providing for the reduction of $1.1 billion of the Debtors' existing debt and $60 million of the Debtors' annual cash interest expense upon the completion of the Restructuring. This deleveraging will enhance the Debtors' long-term growth prospects and competitive position and allow the Debtors to emerge from their chapter 11 cases (the "Chapter 11 cases") as reorganized entities better positioned to withstand a depressed market for offshore contract drilling. In accordance with the Plan Support Agreement, the Debtors are obligated to proceed with the implementation of the Plan through the Chapter 11 Cases. Among the milestones contained in the Plan Support Agreement are the requirement that the Bankruptcy Court enter the order approving the Disclosure Statement and the solicitation procedures within 75 days after the Petition Date, enter an order confirming the Plan within 185 days after the Petition Date, and that the Plan must be consummated no later than 230 days after the Petition Date. Achieving the various milestones under the Plan Support Agreement is crucial to reorganizing the Debtors successfully. Prepetition Capital Structure The Debtors' significant prepetition indebtedness includes secured financing obligations in the amount of approximately $1,440,650,651 and unsecured financing obligations in the amount of approximately $983,582,000. Paragon Offshore plc and Paragon International Finance Company are borrowers and each of the other Debtors are guarantors under a Senior Secured Revolving Credit Agreement, dated as of June 17, 2014, with the lenders and issuing banks party thereto from time to time (the "Secured Revolver Lenders"), JPMorgan Chase Bank, N.A., as administrative agent (the "Secured Revolver Agent"). The Secured Revolving Credit Agreement provides for revolving credit commitments, including letter of credit commitments and swingline commitments, in an aggregate principal amount of $800 million. The Secured Revolving Credit Agreement matures in July 2019. As of the Petition Date, the aggregate principal amount outstanding under the Secured Revolving Credit Agreement is approximately $708.5 million in unpaid principal, plus any applicable interest, fees, and other expenses, in addition to approximately $87.4 million of letters of credit. Debtor Paragon Offshore Finance Company, as borrower, and Paragon Parent, along with each of the other Debtors, as guarantors, are parties to that certain Senior Secured Term Loan Agreement, dated as of July 18, 2014, with the lenders party thereto (the "Secured Term Loan Lenders"), and JPMorgan Chase Bank, N.A., as administrative agent (the "Secured Term Loan Agent"). The Secured Term Loan Agreement provides for a term loan in an aggregate principal amount of up to $645 million (the "Secured Term Loan"). The Secured Term Loan Agreement matures in July 2021. 12. As of the Petition Date, the aggregate principal amount outstanding under the Secured Term Loan Agreement is approximately $642 million in unpaid principal, plus any applicable interest, fees, and other expenses. Paragon Offshore plc is also an issuer under an Indenture, dated as of July 18, 2014, with each of the other Debtors as named guarantors therein, and Deutsche Bank Trust Company Americas, as indenture trustee (as amended, modified, or supplemented from time to time, the "Senior Notes Indenture"), pursuant to which Paragon Parent issued 6.75% Senior Notes due 2022 in the aggregate principal amount of $500,000,000 (the "6.75% Senior Notes") and 7.25% Senior Notes due 2024 in the aggregate principal amount of $580,000,000 (the "7.25% Senior Notes"). As of the Petition Date, the aggregate amount outstanding under the 6.75% Senior Notes is approximately $456.5 million, plus any applicable interest, fees, and other expenses, and the aggregate amount outstanding under the 7.25% Senior Notes is approximately $527 million, plus any applicable interest, fees, and other expenses. On Aug. 1, 2014, Noble Corporation plc ("Noble") completed a spin-off of Paragon by: (i) transferring to Paragon Parent the assets and liabilities constituting most of Noble's standard specification drilling business and (ii) making a pro rata distribution to Noble's shareholders of all of Paragon Parent's issued and outstanding ordinary shares (the "Spin-Off"). In connection with the Spin-Off, Paragon gave Noble promissory notes totaling approximately $1.7 billion. As part of the Spin-Off, Paragon borrowed $650 million under the Secured Term Loan and issued approximately $1.03 billion under the Senior Notes Indenture. Proceeds of these borrowings were transferred to Noble in satisfaction of the promissory notes. The rigs transferred to Paragon through the Spin-Off had an average age of 35 years. The Debtors estimate that, as of the Petition Date, they owe a total of approximately $41.5 million on account of undisputed trade claims. Terms of the Plan Under the Plan, holders of priority non-tax claims in Class 1 and Other Secured Claims in Class 2 are unimpaired. Recovery is 100%. Class 3, the Revolving Credit Agreement Claims, will be Allowed as Secured Claims with respect to funded loans and the face amount of undrawn letters of credit in an aggregate principal amount of not less than $795,600,000 plus any unpaid accrued interest, letter of credit fees, other fees, and unpaid reasonable fees and expenses as of the Effective Date. On the Effective Date, each holder of an Allowed Revolving Credit Agreement Claim will receive, in full satisfaction of and in exchange for such Allowed Secured Claim, its Pro Rata share of: (i) any accrued and unpaid interest from the Petition Date through the Effective Date as set forth in the Adequate Protection Order to the extent not previously paid pursuant to the Adequate Protection Order; (ii) $165,000,000 in Cash and a corresponding permanent commitment reduction; and (iii) the remaining outstanding loans under the Revolving Credit Agreement converted to a term loan. Recovery is 100%. The legal, equitable, and contractual rights of Class 4, the holders of Allowed Secured Term Loan Claims, are unaltered by the Plan and such claims will be allowed in an amount of $644,950,651. Recovery is 100%. The Senior Notes Claims will be allowed in the amount of $1,020,555,682. On the Effective Date, or as soon as practicable thereafter, each holder in Class 5, the Allowed Senior Notes Claims, will receive, in full satisfaction of and in exchange for its Allowed Claim, its Pro Rata share of: (i) that number of Parent Ordinary Shares which will in the aggregate comprise 35% of the total outstanding ordinary shares of Reorganized Paragon as of the Effective Date without regard to the Management Incentive Plan Securities; (ii) the right to receive the 2016 Deferred Cash Payment and the 2017 Deferred Cash Payment in accordance with the terms of the Plan; and (iii) $345,000,000 in Cash. Recovery is 57.1% to 72.6%. The rights of holders of General Unsecured Claims (Class 6) will be left unaltered by the Plan, and the Debtors will continue to pay or dispute each General Unsecured Claim in the ordinary course of business. On the Effective Date, the holders of Parent Interests (Class 8) will retain their Parent Interests, subject to dilution on account of the Parent Ordinary Shares to be issued in accordance with the Plan. After the issuance of the Parent Ordinary Shares, the Parent Interests will comprise in the aggregate 65% of the total outstanding ordinary shares of Reorganized Paragon without regard to the Management Incentive Plan Securities. Recovery is 100%. Holders of Claims and Interests in Classes 1, 2, 4, 6, 7, 8, and 9 are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Only holders of Allowed Claims in Classes 3 and 5 are entitled to vote to accept or reject the Plan. Intercompany Interests held by Paragon Parent or a direct or indirect subsidiary of Paragon Parent (Class 9) will be unaffected by the Plan and continue in place following the Effective Date. * * * Copies of the affidavits in support of the Ch. 11 petitions and the first day motions are available for free at: http://bankrupt.com/misc/Paragon_17_AL_1st_D_Affidavit.pdf http://bankrupt.com/misc/Paragon_18_JM_1st_D_Affidavit.pdf Copies of the Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Paragon_11_Ch11_Plan.pdf http://bankrupt.com/misc/Paragon_12_Disc_Statement.pdf Counsel to the Debtors: WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Attn: Gary T. Holtzer Stephen A. Youngman Telephone: (212) 310-8000 E-mail: gary.holtzer@weil.com stephen.youngman@weil.com Co-Counsel to the Debtors: RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Attn: Mark D. Collins Amanda R. Steele Telephone: (302) 651-7700 E-mail: collins@rlf.com steele@rlf.com Counsel to the Ad Hoc Committee of Senior Noteholders PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019 Attn: Andrew N. Rosenberg Elizabeth R. McColm Telephone: (212) 373-3000 E-mail: arosenberg@paulweiss.com emccolm@paulweiss.com Counsel to the Revolving Credit Facility Agent: SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue New York, NY 10017 Attn: Sandeep Qusba, Esq. Kathrine A. McLendon, Esq. Telephone: (212) 455-2000 E-mail: squsba@stblaw.com kmclendon@stblaw.com About Paragon Offshore Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a global provider of offshore drilling rigs. Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales and its ordinary shares have been trading on the over-the-counter markets under the trading symbol "PGNPF" since December 18, 2015. Paragon Offshore Plc, et al., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016, after reaching a deal with lenders on a reorganization plan that would eliminate $1.1 billion in debt. The petitions were signed by Randall D. Stilley as authorized representative. Judge Christopher S. Sontchi is assigned to the case. The Debtors reported total assets of $2.47 billion and total debts of $2.96 billion as of Sept. 30, 2015. The Debtors have engaged Weil, Gotshal & Manges LLP as general counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard Freres & Co. LLC as financial advisor, Alixpartners, LLP as restructuring advisor, and Kurtzman Carson Consultants as claims and noticing agent. Judge Christopher S. Sontchi is assigned to the cases. PARAGON OFFSHORE: S&P Lowers CCR to 'D' on Ch. 11 Filing Plan ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on offshore drilling company Paragon Offshore PLC to 'D' from 'CC'. At the same time, S&P revised its recovery rating on the company's unsecured debt to '4' from '6', indicating S&P's expectation of average recovery (30% to 50%, lower end of the range). The recovery rating on the company's term loan remains '2', indicating S&P's expectation of substantial recovery (70%-90%, lower end of the range). The 'D' ratings reflect Paragon's announcement that it will file for Chapter 11 under the U.S. Bankruptcy Code, where it will implement a negotiated settlement with bondholders and lenders. PARAGON OFFSHORE: Seeking Joint Administration of Cases ------------------------------------------------------- Paragon Offshore Plc and 25 of its affiliates ask the Bankruptcy Court to enter an order directing the consolidation of their Chapter 11 cases for procedural purposes only. The Debtors anticipate that there are more than 10,000 creditors and other parties-in-interest that are involved in their cases. They maintained that joint administration will allow for the efficient and convenient administration of their interrelated Chapter 11 cases. "Joint administration of these cases will save the Debtors and their estates substantial time and expense because it will remove the need to prepare, replicate, file, and serve duplicative notices, applications, and orders," said Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., counsel for the Debtors. "Further, joint administration will relieve the Court of entering duplicative orders and maintaining duplicative files and dockets," he added. About Paragon Offshore Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a global provider of offshore drilling rigs. Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales and its ordinary shares have been trading on the over-the-counter markets under the trading symbol "PGNPF" since December 18, 2015. Paragon Offshore Plc, et al., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016, after reaching a deal with lenders on a reorganization plan that would eliminate $1.1 billion in debt. The petitions were signed by Randall D. Stilley as authorized representative. Judge Christopher S. Sontchi is assigned to the cases. The Debtors reported total assets of $2.47 billion and total debts of $2.96 billion as of Sept. 30, 2015. The Debtors have engaged Weil, Gotshal & Manges LLP as general counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard Freres & Co. LLC as financial advisor, Alixpartners, LLP as restructuring advisor, and Kurtzman Carson Consultants as claims and noticing agent. PARAGON OFFSHORE: Targeting June 10 Confirmation of Plan -------------------------------------------------------- Paragon Offshore plc, et al., have sought bankruptcy protection in the United States with a proposed reorganization plan that will leave the Debtors' business intact and substantially de-lever it, providing for the reduction of $1.1 billion of the Debtors' existing debt and $60 million of the Debtors' annual cash interest expense upon the completion of the restructuring. The Debtors have filed with the U.S. Bankruptcy Court for the District of Delaware a motion seeking approval of (i) the Disclosure Statement explaining the Chapter 11 Plan, and the (ii) proposed solicitation procedures. The Debtors intend to seek confirmation of the Plan based on this timeline: Event Date/Deadline ---- ------------- Disclosure Statement Objection Deadline March 21, 2016 Deadline to Reply to Disclosure Statement March 24, 2016 Disclosure Statement Hearing March 30, 2016 Record Voting Date March 30, 2016 Solicitation Date April 6, 2016 Plan Supplement Filing Deadline May 10, 2016 Voting Deadline May 20, 2016 Voting Certification Deadline May 27, 2016 Plan Confirmation Objection Deadline May 20, 2016 Deadline to File Confirmation Brief June 7, 2016 Deadline to Reply to Plan Objection June 7, 2016 Confirmation Hearing June 10, 2016 Paragon negotiated terms of its restructuring with key constituencies prepetition. On Feb. 12, 2016, Paragon Offshore entered into a plan support agreement with respect to the terms of a chapter 11 plan of reorganization with holders representing an aggregate of 77% of the outstanding $457 million of the Company's 6.75% senior unsecured notes maturing July 2022 and the outstanding $527 million of the Company's 7.25% senior unsecured notes maturing August 2024 (together, the “Noteholders”) together with lenders representing an aggregate of 95.62% of the outstanding debt (including letters of credit) under the Company's Senior Secured Revolving Credit Agreement (the “Revolving Credit Agreement”). Only holders of the Revolving Credit Agreement Claims (Class 3); and holders of the Senior Notes Claims (Class 5) are entitled to vote on the Plan. Holders of Class 3 claims are slated to have a 100% recovery although they are still impaired under the Plan. Holders of Senior Notes Claims are slated to have a 57.1% to 72.6% recovery. Other classes of claims, including general unsecured claims, are unimpaired and will recover 100 cents on the dollar under the Plan. A copy of the Plan Support Agreement is available for free at: http://goo.gl/wRbO8g About Paragon Offshore Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a global provider of offshore drilling rigs. Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales and its ordinary shares have been trading on the over-the-counter markets under the trading symbol "PGNPF" since December 18, 2015. Paragon Offshore Plc, et al., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016, after reaching a deal with lenders on a reorganization plan that would eliminate $1.1 billion in debt. The petitions were signed by Randall D. Stilley as authorized representative. Judge Christopher S. Sontchi is assigned to the cases. The Debtors reported total assets of $2.47 billion and total debts of $2.96 billion as of Sept. 30, 2015. The Debtors have engaged Weil, Gotshal & Manges LLP as general counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard Freres & Co. LLC as financial advisor, Alixpartners, LLP as restructuring advisor, and Kurtzman Carson Consultants as claims and noticing agent. PARAGON OFFSHORE: Wants to Use Secured Parties' Cash Collateral --------------------------------------------------------------- Paragon Offshore plc and its affiliated debtors request authority from the Bankruptcy Court to use cash collateral of JPMorgan Chase Bank, N.A. and Cortland Capital Market Services LLC, to fund their payments to vendors and employees and to satisfy the other ordinary costs of operation, including rent, taxes, and insurance. JPMorgan serves as the administrative agent for the revolver lenders and collateral agent for the revolver lenders and term loan lenders. Cortland Capital Market Services L.L.C. acts as the proposed successor administrative agent for the term loan lenders. To protect the Prepetition Secured Parties to the extent of any aggregate diminution in value of the Prepetition Collateral resulting from the use of Cash Collateral, the Debtors propose to provide various forms of adequate protection. The proposed adequate protection includes a first priority lien on, and security interest in "Unencumbered Property," which includes approximately $332 million in a Goldman Sachs Bank Account owned by Paragon Offshore Group plc. "Absent authority to use Cash Collateral, even for a limited period of time, the continued operation of the Debtors' business would suffer, causing immediate and irreparable harm to the Debtors, their respective estates, and their creditors," said Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., counsel for the Debtors. About Paragon Offshore Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a global provider of offshore drilling rigs. Paragon's operated fleet includes 34 jackups, including two high specification heavy duty/harsh environment jackups, and six floaters (four drillships and two semisubmersibles). Paragon's primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world. Paragon's principal executive offices are located in Houston, Texas. Paragon is a public limited company registered in England and Wales and its ordinary shares have been trading on the over-the-counter markets under the trading symbol "PGNPF" since December 18, 2015. Paragon Offshore Plc, et al., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016, after reaching a deal with lenders on a reorganization plan that would eliminate $1.1 billion in debt. The petitions were signed by Randall D. Stilley as authorized representative. Judge Christopher S. Sontchi is assigned to the cases. The Debtors reported total assets of $2.47 billion and total debts of $2.96 billion as of Sept. 30, 2015. The Debtors have engaged Weil, Gotshal & Manges LLP as general counsel, Richards, Layton & Finger, P.A. as local counsel, Lazard Freres & Co. LLC as financial advisor, Alixpartners, LLP as restructuring advisor, and Kurtzman Carson Consultants as claims and noticing agent. PARAMOUNT SCAFFOLD: Loses Summary Judgment Bid in ERISA Suit ------------------------------------------------------------ In the case captioned CARPENTERS HEALTH AND SECURITY TRUST OF WESTERN WASHINGTON, et al., Plaintiffs, v. PARAMOUNT SCAFFOLD, INC., et al., Defendants, Case No. C12-1252RSM (W.D. Wash.), Judge Ricardo S. Martinez of the United States District Court for the Western District of Washington, Seattle, denied the defendants' motion for summary judgment and granted the plaintiffs' cross-motion for summary judgment. An Employee Retirement Income Security Act suit arose from the defendants' alleged failure to pay certain funds withheld from paychecks into required trust funds. Defendant Paramount Scaffold, Inc., is now a defunct entity and had sold all assets to defendant California Access Scaffold, Inc. The defendants sought summary judgment on two bases: (1) that the plaintiffs' failure to object to the bankruptcy sale of Paramount's assets estops the plaintiffs from bringing claims against defendant California Access now; and (2) that California Access is not a continuation or alter ego of Paramount. The plaintiffs opposed the motion and cross-moved for summary judgment, arguing that neither the bankruptcy sale nor their failure to object to the sale precludes their claims, and that California Access is merely the continuation of Paramount and is therefore liable for their claims. Judge Martinez agreed with the plaintiffs that California Access is the successor to Paramount, considering that the management of California Access remains largely the same as it was at Paramount. The judge also found that California Access now uses Paramount's Carson, California property as its corporate office and that there appears to be a significant crossover in the services formerly offered by Paramount and now offered by California Access. Judge Martinez further found no objection by California Access that it had pre-sale knowledge of the plaintiffs' ERISA claims. A full-text copy of the Judge Martinez's February 1, 2016 order is available at http://is.gd/nlATDYfrom Leagle.com. Carpenters Health & Security Trust of Western Washington, Carpenters Retirement Trust of Western Washington, Carpenters of Western Washington Individual Account Pension Trust, Carpenters-Employers Vacation Trust of Western Washington and Carpenters-Employers Apprenticeship and Training Trust of Western Washington are represented by: Jeffrey G Maxwell, Esq. EKMAN THULIN, P.S. Queen Anne Square 220 W. Mercer Street, Suite 400 Seattle, WA 98119-3966 Tel: (206)282-8221 Fax: (206)285-4587 Email: j.maxwell@ekmanthulin.com California Access Scaffold, LLC is represented by: Aldo E. Ibarra, Esq. Louis J. Cisz, III, Esq. NIXON PEABODY LLP One Embarcadero Center, Suite 1800 San Francisco, CA 94111-3600 Tel: (415)984-8200 Fax: (415)984-8300 Email: aibarra@nixonpeabody.com lcisz@nixonpeabody.com -- and -- Mary Quinn Oppenheim, Esq. SUMMIT LAW GROUP 315 Fifth Avenue South, Suite 1000 Seattle, WA 98104-2682 Tel: (206)676-7000 Fax: (206)676-7001 Email: quinno@summitlaw.com PAYLESS INC: Moody's Lowers CFR to B3, Outlook Altered to Negative ------------------------------------------------------------------ Moody's Investors Service downgraded Payless Inc.'s Corporate Family Rating to B3 from B2, and Probability of Default Rating to B3-PD from B2-PD. The company's $520 million 1st lien term loan due 2021 and $145 million 2nd lien term loan due 2022 were also downgraded to B2 and Caa1, respectively. The rating outlook is negative. The downgrades reflect weaker than anticipated operating performance and Moody's expectation that modest improvements to the company's operating performance over the next 12-24 months will be insufficient to return credit metrics back in line with the B2 rating category. Moody's projects free cash flow will be negative and EBIT/Interest coverage will remain weak at less than 1 time in the fiscal year ended January 2017 (fiscal 2016). Over the nine month period ending Oct. 31, 2015, revenue has remained relatively flat compared to the same period in fiscal 2014, but worsening gross margins and elevated borrowings on the company's unrated $300 million Asset Based Revolving Credit Facility have driven Moody's adjusted interest coverage (EBIT/Interest) below 1 time, debt-to-EBITDA leverage to the high 5 times range (incorporating Moody's standard adjustments), and funded-debt-to-EBITDA leverage closer to the low 8 times range. Moody's anticipates that the roll off of some one-time items such as the west coast port slowdown in early 2015 will support improvements to operating performance in fiscal 2016. However, many factors negatively impacting operating performance, such as foreign exchange and declining mall traffic trends, will constrain meaningful improvement. The negative outlook reflects Payless' weak liquidity and thin interest coverage. Moody's expects the company will be challenged to restore positive free cash flow over the next 12-24 months and anticipates interest coverage will improve only modestly to around 1 time. Moody's took these rating actions: Issuer: Payless Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD $520 million Sr. Secured 1st Lien Term Loan due 2021, Downgraded to B2 (LGD-3) from B1 (LGD-3) $145 million Sr. Secured 2nd Lien Term Loan due 2022, Downgraded to Caa1 (LGD-4) from B3( LGD-4) Outlook is Negative RATINGS RATIONALE Payless' B3 CFR reflects the company's high leverage, weak interest coverage and negative free cash flow resulting from weaker than anticipated operating performance combined with higher than anticipated borrowings on the company's revolving credit facility. Over the LTM period Moody's lease adjusted leverage has risen about a half turn, leverage for funded debt rose by over 2 turns, and interest coverage (EBIT/Interest) has fallen below 1 time. Also constraining the rating is the company's history of highly-aggressive financial policies and weak liquidity. Factors supporting the rating include the company's meaningful international presence and its solid brand equity and competitive position. Payless benefits from the value-orientation of the brand and its under-$30 price point which Moody's believes helped minimize some of the impact from the most recent downturn. However, Payless' core customer remains under economic pressure, which constrains meaningful growth. Payless' liquidity is weak, driven by Moody's expectation for negative free cash flow (CFO -- Capex) over the next 12-18 months combined with an already elevated estimated level of borrowings on the company's $300 million ABL revolving credit facility expiring in 2019. While Moody's anticipates some seasonal repayments and borrowings on the revolver to support working capital needs, the company will be challenged to meaningfully reduce outstanding borrowings from current levels. Further constraining availability will be the springing Fixed Charge Coverage test, which is triggered when availability is less than the greater of $20 million or 10% of the borrowing base. Moody's believes there is potential that Payless could trigger the covenant over the next 12-18 months, and projects the company would not comply with the covenant if it were tested. However, Payless may have the ability to pull back on some growth capex if it were in danger of triggering the test. The $520 million first lien term loan due 2021 and $145 million second lien term loan due 2022 do not contain any financial maintenance covenants. Supporting liquidity is approximately $55 million of cash on the balance sheet as of Oct. 31, 2015, and over $50 million of availability on the revolver according to Moody's estimate. The liquidity analysis is based on Moody's assumptions and estimates. However, there is some uncertainty about the company's liquidity given the absence of information available to Moody's such as the ABL borrowing base, availability, and the current fixed charge coverage calculation. In addition, working capital fluctuations could meaningfully impact free cash flow and the level of revolver borrowings, particularly as the company continues to right size its inventory, which was impacted by the port strike and an intentional build-up of inventory in 2015. Ratings could be upgraded if the company is able to reverse recent operating trends resulting in improved gross and EBITDA margins combined with consistent same store sales growth. Interest coverage (EBIT/interest expense) sustained above 1.2 times and an improved liquidity profile with meaningful repayments on the revolving credit facility could also lead to an upgrade. Given the company's history of shareholder friendly transactions, an upgrade would also require the expectation that the company will exercise prudent financial policies. Ratings could be downgraded if operating performance continues to weaken resulting in interest coverage (EBIT/Interest expense) sustained below 1.0 time, if the company is unable to restore positive free cash flow, or there is a further deterioration in liquidity. Additional future shareholder friendly transactions could also pressure the rating lower. The principal methodology used in these ratings was Retail Industry published in October 2015. Payless operates more than 4,500 family footwear stores (including joint-ventures and franchisees) in approximately 30 countries with LTM revenues as of October 31, 2015 of over $2.4 billion. The company is controlled by funds affiliated with Golden Gate Capital and Blum Capital. PEABODY ENERGY: Environmental Groups Balk at Self-Bonding --------------------------------------------------------- Alan Scher Zagier at the Associated Press reported that The Environmental Law and Policy Center in Chicago has asked state and federal regulators to stop allowing St. Louis-based Peabody Energy to use the process known as self-bonding instead of posting conventional bonds for mine remediation. The report noted that self-bonding allows Peabody to pledge that it has adequate assets to pay for the estimated $92 million needed to reclaim three southern Illinois mines once there's no coal left to extract, or if the company shuts down. Its remediation costs for six Indiana mines are estimated at $163 million. The alternative is purchasing surety bonds from private insurers -- an approach that the environmental group asked Illinois officials earlier this month to require of Peabody. AP says the formal complaint came one day after the company reported a $518 million loss in its fourth quarter of 2015 and annual losses of more than $2 billion. The report also pointed out that the environmental group WildEarth Guardians filed its own complaint in Wyoming challenging Peabody's self-bonding there and in other Rocky Mountain states. Peabody Energy Corp. is based in St. Louis, Missouri, and is the largest coal miner in the U.S. As reported by the Troubled Company Reporter on Jan. 20, 2016, Standard & Poor's Ratings Services said it lowered its corporate credit rating on St. Louis-based Peabody Energy Corp. to 'CCC+' from 'B'. The TCR, on Feb. 10, 2016, reported that participations in a syndicated loan under which Peabody Energy Power Corp is a borrower traded in the secondary market at 42.30 cents-on-the-dollar during the week ended Friday, Jan. 29, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 1.40 percentage points from the previous week. Peabody Energy pays 325 basis points above LIBOR to borrow under the $1.2 billion facility. The bank loan matures on Sept. 20, 2020 and carries Moody's B3 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Jan. 29. PEABODY ENERGY: Fitch Lowers LT IDR to CC & 2nd Lien Notes to C --------------------------------------------------------------- Fitch Ratings has downgraded Peabody Energy Corporation's (Peabody, NYSE: BTU) long-term Issuer Default Rating (IDR) to 'CC' from 'CCC'. Approximately $8.4 billion in face amount of obligations is affected by the rating actions. The downgrade of the IDR reflects Fitch's view that default of some kind appears probable following increased demands on liquidity, negotiations with creditors for a distressed debt exchange, continued competition in domestic markets from cheap natural gas and bankrupt coal producers, expectation of a delayed recovery in the seaborne metallurgical coal market from very low levels, and prospects for further weakness in the Asia Pacific steam coal markets. The downgrade of the second lien notes reflects their position in the capital structure after the $1.7 billion revolver, the $1.3 billion term loan, and letters of credit- secured by receivables as well as Fitch's assumptions for lower going concern EBITDA and lower enterprise value multiples. Please see the discussion on Recovery Analysis below. KEY RATING DRIVERS Liquidity: Fitch believes that the company has sufficient cash to support operations for roughly 18 months absent asset sales. On Feb. 9, 2016, Peabody drew the remaining availability under its $1.65 billion revolving credit facility resulting in cash balances of $778.5 million. Peabody reports that it has $123 million available under its accounts receivable securitization facility. Peabody reports that letters of credit were $823.7 million as of Feb. 9, 2016 up from $560 million at Sept. 30, 2015 of which $228.7 million was outstanding under the revolver and $120 million was outstanding under the A/R facility. Fitch expects cash burn in 2016 and 2017 aggregating $787 million using 2016 guidance on volumes, costs and capital expenditures. Scheduled maturities of long-term debt over the next five years are estimated to be $102 million in 2016, $13 million in 2017, $1.5 billion in 2018, $12 million in 2019 and $1.8 billion in 2020. Covenants: The revolver has a minimum interest coverage covenant of 1x through maturity and a net first lien leverage maximum of 4.5x. Fitch has forecast covenants in compliance using a $90 million add-back to EBITDA since the bank agreement adds non-cash share-based compensation ($40 million) and asset retirement obligation expenses ($52 million) together with other items. Maturity in 2018: $1.5 billion in senior unsecured notes are due in November of 2018 and Fitch believes these will need to be refinanced. In December 2015, Peabody disclosed that it was in discussions with the note holders on a distressed debt exchange. The discussions involve Peabody's potential interest in raising $150 million in debt financing secured by certain of its Australian assets and a $250 million secured letter of credit facility through subsidiaries that do not guarantee Peabody's debt. No update was provided on the Feb. 11, 2016 earnings call. Asset Sales: The company has agreements to sell assets in the first quarter of 2016 for net proceeds aggregating $415 million. This figure includes the sale of its New Mexico and Colorado assets to Bowie Resources currently in the term loan market to raise $650 million to finance the transaction. Fitch views access to the capital markets as extremely challenging for coal producers. In July 2015, Peabody announced the sale of its idled Wilkie Creek mine for up to $75 million including cash of up to $20 million and assumption of liabilities totalling $55 million. The transaction would also release certain guarantees in place for reclamation activities. Closing has been delayed as the buyer is having difficulty obtaining finance. Recovery Analysis: Fitch has dropped its going concern EBITDA from $980 million to $650 million to reflect long term lower volumes in the U.S., reduced overhead and break-even conditions in Australia. Peabody reported that Australian mining adjusted EBITDA was $175.4 million, before hedging activity, U.S. mining adjusted EBITDA was $937.2 million, and consolidated adjusted EBITDA was $434.6 million in 2015. Fitch has dropped its multiple assumption from 5.5x to 4.5x given how much of the industry is distressed and the need for asset valuations to incorporate assumption of asset retirement obligations. Fitch notes that using a 4x multiple results in an enterprise value that is close to a liquidation value. Fitch has assumed a concession allowance at 5% of enterprise value to be spread among the second lien, unsecured and junior subordinated notes. Capital Requirements to decline: The company's fifth annual and final $250 million federal coal lease payment is in 2016 its fourth annual and final Patriot Coal related VEBA payment in the amount of $70 million is in 2017. The company and the United Mine Workers of America agreed to a revision of this obligation, which if approved by the court, reduces Peabody's obligations by $70 million in 2017. In addition, the company's hedge position has limited its benefits from the weaker Australian dollar and lower fuel prices. Fitch notes that these hedges are at the parent company. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Peabody include: -- 2016 Benchmark hard coking coal and Newcastle prices of $85/t and, $50/t respectively; -- Production, dividends and capital spending at guidance; -- Asset sales that have been announced and not delayed are factored into the projections. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Failure to pay debt service within grace periods and or bankruptcy filing would result in a downgrade of the IDR to 'D'. -- Distressed Debt Exchange would result in a downgrade of the IDR to 'RD'. Positive: Future developments that may, individually or collectively, lead to negative rating action include: -- Expectation of positive free cash flow generation. -- Liquidity enhancing activity resulting in proceeds of $500 million in aggregate. FULL LIST OF RATING ACTIONS Peabody Energy Corporation -- Long-term IDR downgraded to 'CC' from 'CCC'; -- Senior secured revolving credit and terms loan downgraded to 'CCC/RR2' from 'B/RR1'; -- Senior second lien secured notes downgraded to 'C/RR6' from 'B-/RR2' -- Senior unsecured notes downgraded to 'C/RR6' from 'CCC-/RR5'; -- Convertible junior subordinated debentures downgraded to 'C/RR6' from 'CC/RR6'. PICO HOLDINGS: Central Square Protests Director Replacements ------------------------------------------------------------ By Geoffrey J. Bailey -- gjbaileypb@hotmail.com -- PICO Holdings, Inc. (Nasdaq:PICO), based in La Jolla, Calif., is a diversified holding company reporting recurring losses since 2008. PICO owns 57% of UCP, Inc. (NYSE:UCP), 100% of Vidler Water Company, Inc., a securities portfolio and various interests in small businesses. Central Square Management LLC and River Road Asset Management LLC collectively own more than 14% of PICO and have agitated for governance and financial changes. Sean Leder owns 1% of PICO shares and seeks shareholder authorization to call a Special Meeting to remove and replace five directors. Other activists at http://ReformPICONow.com/have taken to the Internet to advance the shareholder cause. On February 12, 2016, Kelly Cardwell at Central Square Management, LLC, filed a 13D with the Securities and Exchange Commission, in response to PICO Holdings' stunning news: Chair Kristina Leslie and Director Robert Deuster resigned and were replaced by Howard Brownstein and Raymond Marino. Mr. Cardwell begins, "As you know, over the past 16 months, we have persistently and repeatedly tried to engage in a constructive dialogue with the Board and PICO's management team to discuss our concerns regarding the Company's prolonged underperformance and poor governance in addition to several strategies, which, if implemented, we believe would materially improve the Company's performance for the benefit of all PICO shareholders. As part of these efforts, we recommended on numerous occasions the addition of three highly qualified individuals to the Board, including Anthony Bergamo, James Henderson and Daniel Silvers, and called on the Board to immediately engage with us to agree on a process for seating each of Messrs. Bergamo, Henderson and Silvers, but to no avail." Mr. Cardwell notes that he is a major shareholder, far larger than the shareholder referenced by PICO CEO John Hart in justifying the director appointments. He expresses displeasure that PICO expended shareholder funds through the retention of an executive search firm when his candidates were available without charge. "We believe it is highly inappropriate for the incumbent Board members and management team, which have overseen such dramatic destruction of shareholder value, to seemingly hand-pick these newly appointed directors under the illusion of change without being held accountable for the Company's poor performance. Shareholders require real and sweeping change on the Board, not just the appearance of change in reaction to the challenge of a publicly concerned and critical large shareholder." The activist bloggers at www.reformpiconow.com observe that 3 out of 7 PICO directors, including the Chair, have been replaced in the last 6 weeks. Mr. Hart and his PICO Board are making history of the ignominious sort: within the last year, three different institutional investors have filed adverse 13Ds. And these are intermediate-term holders, not "me-too" activists. The activist bloggers opine that, "PICO's appointment of two new directors was the equivalent of giving the middle finger to Central Square. The latter has had three qualified Director nominees in the public space for several months and during that time, 3 PICO Board seats became vacant -- and PICO filled them all arbitrarily. Such action is illustrative of this Board's pursuit of entrenchment and its disrespect for Central Square and all shareholders." PITTSBURGH CORNING: Bankruptcy Plan to Take Effect in April ----------------------------------------------------------- All pending appeals from the approval of Pittsburgh Corning Corporation's bankruptcy-exit Plan were withdrawn on January 6, 2016, and Corning, Inc., which owns 50% of the capital stock of PCC, expects that the Plan will become effective in April 2016. Over a period of more than two decades, PCC and several other defendants were named in numerous lawsuits involving claims alleging personal injury from exposure to asbestos. On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania. At the time PCC filed for bankruptcy protection, there were approximately 11,800 claims pending against Corning in state court lawsuits alleging various theories of liability based on exposure to PCC's asbestos products and typically requesting monetary damages in excess of one million dollars per claim. Corning has defended those claims on the basis of the separate corporate status of PCC and the absence of any facts supporting claims of direct liability arising from PCC's asbestos products. Corning, with other relevant parties, has been involved in ongoing efforts to develop a Plan of Reorganization that would resolve the concerns and objections of the relevant courts and parties. On November 12, 2013, the Bankruptcy Court issued a decision finally confirming an Amended PCC Plan of Reorganization. On September 30, 2014, the United States District Court for the Western District of Pennsylvania (affirmed the Bankruptcy Court's decision confirming the Amended PCC Plan. On October 30, 2014, one of the objectors to the Plan appealed the District Court's affirmation of the Plan to the United States Court of Appeals for the Third Circuit. On January 6, 2016, all pending appeals of the Plan were withdrawn and Corning expects that the Plan will become effective in April 2016. Under the Plan as affirmed by the Bankruptcy Court and affirmed by the District Court, Corning is required to contribute its equity interests in PCC and Pittsburgh Corning Europe N.V., a Belgian corporation, and to contribute $290 million in a fixed series of payments, recorded at present value. Corning will contribute its equity interest in PCC and PCE on the Plan's Funding Effective Date, which is expected to occur in June 2016. Corning has the option to use its common stock rather than cash to make these payments, but the liability is fixed by dollar value and not the number of shares. The Plan requires Corning to make: (1) one payment of $70 million one year from the date the Plan becomes effective and certain conditions are met; and (2) five additional payments of: $35 million, $50 million, $35 million, $50 million and $50 million, respectively, on each of the five subsequent anniversaries of the first payment, the final payment of which is subject to reduction based on the application of credits under certain circumstances. PPG Industries, Inc. owns the other 50% of the capital stock of PCC. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. Judge Thomas Agresti handles the bankruptcy case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The U.S. Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. The Asbestos Committee is presently represented by Douglas A. Campbell, Esq., and Philip E. Milch, Esq., at Campbell & Levine, LLC; and Peter Van N. Lockwood, Esq., Leslie M. Kelleher, Esq., and Jeffrey A. Liesemer, Esq., at Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP, as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. The FCR is presently represented by Joel M. Helmrich, Esq., at Dinsmore & Shohl LLP; and James L. Patton, Jr., Esq., Edwin J. Harron, Esq., and Sara Beth A.R. Kohut, Esq., at Young Conaway Stargatt & Taylor, LLP. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when It denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning, which is a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan. PCC's balance sheet at Sept. 30, 2012, showed $29.4 billion in total assets, $7.52 billion in total liabilities and $21.9 billion in total equity. PLENARY PROPERTIES: S&P Affirms 'BB' Subordinated Debt Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its CreditWatch Placement on Plenary Properties NDC GP's (NDC or ProjectCo) senior secured debt rating of 'BBB+' to positive from developing. At the same time Standard & Poor's affirmed its 'BB' subordinated debt rating on NDC and removed it from CreditWatch with developing implications, where it was placed June 19, 2015. The outlook on the subordinated debt rating is stable. "The CreditWatch revision follows a similar revision to Johnson Controls Inc.," said Standard & Poor's credit analyst Yousaf Siddique. Johnson Controls Inc. (JCI) provides a parental guarantee to the project service provider, Johnson Controls L.P. (JCLP), which we believe is irreplaceable at the current ratings to the project. S&P resolved the CreditWatch placement on the subordinated debt because any JCI upgrade would not affect the ratings on the subordinated debt. The subordinated operations phase SACP of 'bb' caps the debt rating at 'BB'. The CreditWatch positive placement on JCI followed the announcement that the company will merge with Tyco International PLC, a global fire and security solutions provider. The CreditWatch placement reflects Standard & Poor's expectation that the combined entity will create a more comprehensive global provider of building products and services in the area of controls; heating, ventilation, and air conditioning; energy storage; fire protection; and security. JCLP is responsible for facilities maintenance and lifecycle services, along with any performance-related deductions, under a fixed-price service contract to NDC. Given the tightly sculpted cash flows and low liquidity during operations, S&P considers JCLP as irreplaceable. As a result, the ratings on the company's guarantor, JCI, affects those on the project. NDC is a special-purpose vehicle that the Ontario government mandated in 2008 to design, construct, finance, and operate a data center for the Ministry of Government Services. The CreditWatch positive placement reflects that there is at least a 50% probability that S&P could raise the ratings on NDC's senior debt once the merger between JCI and Tyco is complete, because S&P expects the combined entity to have a stronger business risk profile than indicated by its current stand-alone operations. S&P expects to resolve the CreditWatch placement after it evaluates the combined entity's business risk and financial risk profile, and management's financial policies and capital structure. The company expects the transaction, which is subject to customary closing conditions and regulatory approvals, to close by Sept. 30, 2016. PROSPECT HOLDING: Moody's Lowers CFR to Caa2, Outlook Stable ------------------------------------------------------------ Moody's Investors Service downgraded Prospect Holding Company, LLC's corporate family and senior unsecured ratings to Caa2 from B2. The outlook is stable. RATINGS RATIONALE The downgrade follows Prospect's announcement of a tender offer to repurchase two third of its senior unsecured notes at a discount of almost 40%. Moody's views this transaction as a distressed exchange, which is a default under Moody's definitions. Prospect's leverage and interest expense should decline and its earnings should improve as a result of the transaction, depending upon the amount of notes actually tendered and repurchased, which is uncertain and reflected in the company's Caa2 corporate family rating and stable outlook. Prospect's ratings could be upgraded if the company successfully consummates the tender offer, meaningfully reducing the company's leverage and interest expenses. The ratings could be downgraded if its financial performance does not improve post tender offer. The principal methodology used in these ratings was Finance Companies published in October 2015. PUERTO DEL REY: Court Sides with Marina PDR in Ex-Worker's Suit --------------------------------------------------------------- Judge Jose Antonio Fuste of the United States District Court for the District of Puerto Rico granted Marina PDR Tallyman, LLC's request to reconsider its previous denial of Marina PDR's motion for summary judgment, but only to determine whether Marina PDR is a successor employer of Marina Puerto del Rey. On April 15, 2014, Esther Caraballo sued Marina PDR, alleging that Marina PDR committed employment discrimination and wrongful discharge in violation of Puerto Rico Law No. 80 when it terminated her employment before the expiration of her ninety-day probationary period. Caraballo began working for Marina Puerto del Rey on October 31, 2003. On May 31, 2013, after the sale of Marina Puerto del Rey to Marina PDR through bankruptcy proceedings, Caraballo executed an employment and confidentiality agreement which stated that her employment with Marina PDR began on May 31, 2013, and that she was subject to a ninety-day probationary period. Marina argued that it terminated Caraballo for "just cause" and that her damages, if any, are limited to the time period during which she worked for Marina PDR -- that is, from May 31, 2013, to August 19, 2013. Judge Fuste found that the damages for any successful claim for wrongful termination under Law 80 will be limited to the time Caraballo was employed by Marina PDR, in other words, from May 31, 2013, to August 19, 2013. The judge explained that the plain language of the Order Confirming Sale undoubtedly defeats Caraballo's claim that her time in service with Marina Puerto del Rey continued on to Marina PDR. Judge Fuste further explained that Caraballo's signed employment contract, which acknowledged that she was a new employee of Marina PDR as of May 31, 2013, cured any remaining concerns as to whether the time in grade of Marina Puerto del Rey's employees remained with them after its sale to Marina PDR. The case is ESTHER M. CARABALLO-CECILIO, Plaintiff, v. MARINA PDR TALLYMAN, LLC, Defendant, Civil No. 3:14-CV-01454 (JAF) (D.P.R.). A full-text copy of Judge Fuste's January 29, 2016 order is available at http://is.gd/7FUy1Ufrom Leagle.com. Esther M. Caraballo-Cecilio is represented by: Jessica A. Figueroa-Arce, Esq. Moraima S. Rios-Robles, Esq. ARROYO & RIOS LAW OFFICES, P.S.C. Maramar Plaza 101 San Patricio Ave. Guaynabo PR 00968 Email: jfigueroa@arroyorioslaw.com mrios@arroyorioslaw.com Marina PDR Tallyman, LLC is represented by: Roberto Abesada-Aguet, Esq. CORREA ACEVEDO & ABESADA LAW OFFICES, PSC Centro Internacional De Mercado Torre II, 90 Carr. Suite 407 Guaynabo, PR 00968 Tel: (787)273-8300 -- and -- Jaime E. Pico-Rodriguez, Esq. Carlos R. Paula, Esq. LABOR COUNSELS LLC Citibank Towers, Suite 500 252 Ponce de Leon Avenue San Juan, PR 00918 Tel: (787)758-1400 Fax: (787)758-1414 Email: paula@laborcounsels.com About Puerto del Rey Puerto del Rey, Inc., a/k/a Marina Puerto Del Rey, filed a petition for Chapter 11 protection (Bankr. D.P.R. Case No. 12-10295) on Dec. 28, 2012, in Old San Juan, Puerto Rico, owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. In its amended schedules, the Debtor disclosed $99.9 million in assets and $44.6 million in liabilities as of the Petition Date. The Charles A. Cuprill, PSC Law Offices, in San Juan, Puerto Rico, represents the Debtor as counsel. Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA 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-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. 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. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com PYKKONEN CAPITAL: Files Chapter 11 to Avoid Foreclosure ------------------------------------------------------- Gabrielle Porter, writing for Clear Creek Courant, reported that Nora Pykkonen, the owner of Echo Mountain Resort, has filed for Chapter 11 bankruptcy in a move she said will help her restructure debt but shouldn't immediately affect operations. "I only filed (for bankruptcy) since my secured lender was threatening to start foreclosure on my house and the ski area . . .," Ms. Pykkonen wrote in an e-mail to Clear Creek Courant, adding that she has paid the lender about $300,000 in interest over the past three years. "We are currently operating in the black and working through all of our possible options," she added. The secured creditor, she said, provided about $1 million in financing. She did not name that secured creditor. The report says Pykkonen is scheduled to appear before U.S. Bankruptcy Judge Joseph Rosania Jr. on March 15 to answer questions about the company's assets and liabilities, reasons for filing bankruptcy, and her plan for reorganization. Pykkonen Capital, LLC, dba Echo Mountain Resort and dba Front Range Ski Club, based in Evergreen, Colorado, filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 16-10897) on February 5, 2016. The Hon. Joseph G. Rosania Jr. presides over the case. Lee M. Kutner, Esq., at Kutner Brinen Garber, P.C, serves as the Debtor's bankruptcy counsel. Pykkonen Capital LLC bought the ski area in August 2012 for $1.53 million, according to county records. In its petition, Pykkonen Capital estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Nora Pykkonen, manager. A list of the Debtor's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/dcb16-10897.pdf QUANTUM CORP: FMR LLC Reports 10% Stake as of Feb. 12 ----------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission on Feb. 12, 2015, FMR LLC and Abigail P. Johnson disclosed that they beneficially own 27,162,995 shares of common stock of Quantum Corporation representing 10.292% of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/6T8jqK 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 Dec. 31, 2015, the Company had $278 million in total assets, $355 million in total liabilities and a $76.9 million total stockholders' deficit. QUICKSILVER RESOURCES: Fortress, Mount Kellett No Longer Own Shares ------------------------------------------------------------------- These entities no longer hold shares of Quicksilver Resources Inc.'s Common Stock, par value $0.01 per share as of Dec. 31, 2015: * Fortress MK Advisors LLC, * FIG LLC, * Fortress Operating Entity I LP, * FIG Corp., * Fortress Investment Group LLC, and * Mount Kellett Capital Management LP This Schedule 13G filing constitutes Amendment No. 1 to the Schedule 13G on behalf of Fortress MK Advisors LLC, FIG LLC, Fortress Operating Entity I LP, FIG Corp. and Fortress Investment Group LLC -- Fortress 13G -- and Amendment No. 3 to the Schedule 13G on behalf of Mount Kellett Capital Management LP -- Mount Kellett 13G. This Schedule 13G constitutes an amendment and restatement of the Fortress 13G and the Mount Kellett 13G in their entirety. About Quicksilver Resources Quicksilver Resources Inc. (OTCQB: KWKA) is an exploration and production company engaged in the development and production of long-lived natural gas and oil properties onshore North America. Based in Fort Worth, Texas, the company claims to be a leader in the development and production from unconventional reservoirs including shale gas, and coal bed methane. Following more than 30 years of operating as a private company, Quicksilver became public in 1999. The Company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig, Colorado and Cut Bank, Montana. The Company's Canadian subsidiary, Quicksilver Resources Canada Inc. is headquartered in Calgary, Alberta. On March 17, 2015, Quicksilver Resources Inc. and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of title 11 of the United States Code in Delaware. Quicksilver's Canadian subsidiaries were not included in the chapter 11 filing. The Company's legal advisors are Akin Gump Strauss Hauer & Feld LLP in the U.S. and Bennett Jones in Canada. Richards Layton & Finger, P.A., is legal co-counsel in the Chapter 11 cases. Houlihan Lokey Capital, Inc., is serving as financial advisor. Garden City Group Inc. is the claims and noticing agent. The Company's balance sheet at Dec. 31, 2014, showed $1.21 billion in total assets, $2.35 billion in total liabilities and total stockholders' deficit of $1.14 billion. The U.S. Trustee for Region 3 appointed five creditors of Quicksilver Resources Inc. to serve on the official committee of unsecured creditors. Quicksilver Resources Inc. and its U.S. subsidiaries on January 22, 2016, entered into an Asset Purchase Agreement with BlueStone Natural Resources II, LLC pursuant to which the Buyer agreed to purchase substantially all of the Sellers' U.S. oil and gas assets for a cash purchase price of $245.0 million. The consummation of the transactions contemplated by the Purchase Agreement is subject to customary closing conditions, and such transactions are expected to close on or before March 31, 2016. RADIOSHACK CORP: G1, Susquehanna No Longer Own Shares ----------------------------------------------------- G1 Execution Services, LLC and Susquehanna Securities no longer holds shares of RadioShack Corporation Common Stock, $1 par value per share, as of December 31, 2015, according to a Schedule 13G (Amendment No. 1) filed by G1 and Susquehanna with the Securities and Exchange Commission. G1 may be reached at: Brian Sopinsky, Secretary G1 EXECUTION SERVICES, LLC 440 S. LaSalle Street, Suite 3030 Chicago, IL 60605 Susquehanna may be reached at: Brian Sopinsky, Secretary SUSQUEHANNA SECURITIES 401 E. City Avenue, Suite 220 Bala Cynwyd, PA 19004 About RadioShack Corporation Headquartered in Fort Worth, Texas, RadioShack is a retailer of mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. RadioShack Corp. and affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015, disclosing total assets of $1.2 billion, versus total debt of $1.3 billion. David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki, Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M. Green, Esq., at Jones Day serve as the Debtors' bankruptcy counsel. David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H. Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel. Carlin Adrianopoli at FTI Consulting, Inc. is the Debtors' restructuring advisor. Maeva Group, LLC, is the Debtors' turnaround advisor. Lazard Freres & Co. LLC is the Debtors' investment banker. A&G Realty Partners is the Debtors' real estate advisor. Prime Clerk is the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors tapped Quinn Emanuel Urquhart & Sullivan, LLP and Cooley LLP as co-counsel, and Houlihan Lokey Capital, Inc., as financial advisor and investment banker. * * * After an auction in March 2015, the Debtors sold most of the assets to General Wireless, Inc., an entity formed by Standard General, L.P., for $150 million. The Debtors also sold Mexican assets to Office Depot de Mexico, S.A. de C.V., for $31.8 million plus the assumption of debt. Regal Forest Holding Co. Ltd. bought the Debtors' intellectual property assets in Latin America for a purchase price of $5,000,000. In June 2015, the Debtors changed their name to RS Legacy Corporation, et al., following the sale of the Company's brand name and customer data to General Wireless. The bankruptcy judge on Oct. 2, 2015, issued an order confirming the first amended joint plan of liquidation of the Debtors. The centerpiece of the Plan is the resolution of various disputes among the Debtors, the Creditors' Committee and the SCP Secured Parties. The Plan was declared effective on Oct. 7, 2015. REX ENERGY: S&P Lowers CCR to CC on Potential Debt Exchange Offer ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Rex Energy Corp. to 'CC' from 'CCC-'. The outlook is negative. S&P also lowered the issue-level rating on the company's senior unsecured notes to 'C' from 'CC'. The recovery rating is '5', indicating S&P's expectation of modest (10% to 30%, high end of the range) recovery in the event of a default. "The downgrade follows Rex's announcement that it has launched an exchange offer to existing holders of its 8.875% and 6.25% senior unsecured notes for shares of common equity and a new issue of 10% senior secured second-lien notes due 2020," said Standard & Poor's credit analyst Aaron McLean. The outlook is negative. Once the transaction has closed, S&P expects to lower the corporate credit rating to 'SD' (selective default) and the issue-level rating on the unsecured notes to 'D'. S&P would then review the ratings based on the new capital structure and considers an upgrade when there is more certainty that the company is no longer pursuing distressed exchanges. S&P also expects to rate the new second-lien notes when there is more detailed information about the resulting capital structure. S&P could raise the ratings if the transaction does not close. SALON MEDIA: Incurs $251,000 Net Loss in Third Quarter ------------------------------------------------------ Salon Media Group, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $251,000 on $1.95 million of net revenue for the three months ended Dec. 31, 2015, compared to a net loss of $803,000 on $1.47 million of net revenue for the same period in 2014. For the nine months ended Dec. 31, 2015, the Company reported a net loss of $1.39 million on $5.32 million of net revenue compared to a net loss of $2.88 million on $3.74 million of net revenue for the nine months ended Dec. 31, 2014. As of Dec. 31, 2015, the Company had $2.08 million in total assets, $9.83 million in total liabilities and a total stockholders' deficit of $7.75 million. "Our increased ad revenue speaks to how our continued investments in engaging new formats ranging from editorial video to our bespoke custom advertising solutions are being realized," said Salon Media Group CEO Cynthia Jeffers. "Coupling this with our enhanced mobile delivery of Salon's fearless journalism strengthens our relationship with both readers and brand advertisers." A full-text copy of the Form 10-Q is available for free at: http://is.gd/o7nMfj About Salon Media San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) -- http://www.Salon.com/-- is an online news and social networking company and an Internet publishing pioneer. Salon Media reported a net loss of $3.9 million on $4.9 million of net revenues for the year ended March 31, 2015, compared to a net loss of $2.2 million on $6 million of net revenues for the year ended March 31, 2014. Burr Pilger Mayer, Inc., in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2015, citing that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit of $122.6 million as of March 31, 2015. These conditions raise substantial doubt about its ability to continue as a going concern. SAPPHIRE DEVELOPMENT: Dismissal of Bankruptcy Case Affirmed ----------------------------------------------------------- Judge Michael P. Shea of the United States District Court for the District of Connecticut affirmed the bankruptcy court's order granting the motion to dismiss Sapphire Development, LLC's bankruptcy case. Robert McKay moved to dismiss Sapphire's Chapter 11 bankruptcy for "cause" under Section 1112(b)(1) of the Bankruptcy Code, arguing that it was filed in bad faith. Sapphire had filed for bankruptcy one business day before the start of trial in a state court lawsuit that sought to void the transfer to it of real estate, thus effectively staying the state court action. On appeal, Judge Shea held that the said court's dismissal for "cause" was supported by evidence that Sapphire's bankruptcy filing was a tactical litigation maneuver that would further no purpose of the bankruptcy laws. Judge Shea found that Sapphire had no need to file for bankruptcy to reorganize or secure a "fresh start" as a business because it conducted no business and had done nothing of significance in recent years other than hold the property on which its principal resides. The judge found only one explanation for Sapphire's bankruptcy filing: a trial in the state court action was about to begin in which the plaintiff sought a finding that Sapphire's principal, rather than Sapphire itself, actually owned the real estate. The case is Sapphire Development, LLC & Hudson City Savings Bank, No. Appellants, No. v. Robert J. McKay, Appellee, Nos. 3:15-cv-1570 (MPS), 3:15-cv-1097 (MPS) (D. Conn.). A full-text copy of the Judge Shea's February 1, 2016 opinion and order is available at http://is.gd/3bV0hcfrom Leagle.com. Hudson City Savings Bank is represented by: David K. Fiveson, Esq. BUTLER, FITZGERALD, FIVESON & MCCARTHY 9 E 45th St New York, NY 10017 Tel: (212) 615-2200 Fax: (212) 615-2215 E-mail: dfiveson@bffmlaw.com Robert McKay is represented by: James R. Fogarty, Esq. FOGARTY COHEN SELBY & NEMIROFF, LLC 1700 East Putnam Avenue, Suite 406 Old Greenwich, CT 06870 Tel: 203-661-1000 Fax: 203-629-7300 Sapphire Development, LLC is represented by: Randolph E. White, Esq. David Y. Wolnerman, Esq. WHITE & WOLNERMAN, PLLC 950 Third Avenue, 11th Floor New York, NY 10022 Tel: (212) 308-0667 Fax: (212) 308-7090 E-mail: rwhite@wwlawgroup.com dwolnerman@wwlawgroup.com -- and -- Ellery E. Plotkin, Esq. LAW OFFICES OF ELLERY E. PLOTKIN Stuart Longman is represented by: Gary S. Klein, Esq. CARMODY TORRANCE SANDAK & HENNESSEY LLP 707 Summer Street, Suite 300 Stamford, CT 06901 Tel: 203.252.2696 Fax: 203.325.8608 E-mail: gklein@carmodylaw.com SEAPORT AIRLINES: Files Chapter 11 Petition ------------------------------------------- SeaPort Airlines, Inc. filed a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Oregon on Feb. 5. After much consideration, the Board of Directors of the Oregon-based airline has determined that reorganization is the best path forward for SeaPort Airlines, allowing the company to achieve long-term viability while maintaining its ability to provide air service to customers and communities. The announcement comes after the airline took a number of necessary steps to reduce its route network as a result of a national pilot shortage. Normal, day-to-day operations will not be interrupted by the filing. During the Chapter 11 process, SeaPort Airlines will continue to provide safe and reliable service without interruption to the destinations it currently serves. More specifically, SeaPort Airlines expects to continue to: -- Provide employee wages, healthcare coverage, PTO, and travel benefits without interruption; -- Pay vendors for goods and services received during the reorganization process; -- Operate a full schedule of flights; -- Honor existing tickets and reservations and provide refunds and exchanges per our contract of carriage; and -- Maintain interline agreements with Alaska Airlines and Hawaiian Airlines. The company also announced that Rob McKinney has resigned as president and CEO. SeaPort's executive vice president, Timothy Sieber, is now president of the company. Tim joined the company in July 2011 and has over 25 years of experience in the airline industry. "The difficult decision to file for bankruptcy protection was necessary to preserve the future of our airline. I am confident we will come out the other side of reorganization with a financially stronger airline in a better position to handle the challenges of the industry and provide the quality service our customers, employees and partners deserve," said Tim Sieber, president of SeaPort Airlines. Under court supervision, SeaPort will propose a Plan of Reorganization that will allow the company to emerge a strong and viable airline positioned to meet the challenges not only of the pilot shortage, but of the highly competitive airline industry. "Our customers are first and foremost our top priority as we work towards our goals of building a better, more sustainable airline. We're moving forward, one flight at a time, by focusing on delivering on our core promise to each customer of getting them to their destination safely and on-time." said Sieber. Portland, Oregon-based SeaPort Airlines, Inc. -- fdba Wings of Alaska and fka Alaska Juneau Aeronautics, Inc. -- filed for Chapter 11 protection (Bankr. D. Ore. Case No. 16-30406) on February 5, 2016. The Hon. Randall L. Dunn presides over the case. Douglas R Ricks, Esq., and Robert J Vanden Bos, Esq. at Vanden Bos & Chapman, LLP, serve as counsel to the Debtor. In its petition, SeaPort estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Timothy F. Sieber, president. A list of its 20 largest unsecured creditors is available at http://bankrupt.com/misc/orb16-30406.pdf SHERIDAN FUND I: S&P Raises LT ICRs to CCC-, Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services, on Feb. 8, 2016, said it raised its long-term issuer credit ratings on Sheridan Production Partners I-A, Sheridan Investment Partners I, and Sheridan Production Partners I-M to 'CCC-' from 'SD'. The outlook is negative. At the same time, S&P affirmed its issue ratings on the term loans at 'D'. The ratings on the revolving credit facilities remain at 'CCC+' and continue to be on CreditWatch with negative implications. "The upgrade reflects our updated view following Sheridan Fund I's below-market prepayments," said Standard & Poor's credit analyst Trevor Martin. On Feb. 2, 2016, S&P downgraded the fund to 'SD' as a result of the transactions. Although the fund is still out of compliance with its asset coverage ratio (it has six months from the reassessment of the borrowing base to regain compliance), the prepayment brought the company within $25 million of the required $1.0 billion. According to S&P's criteria, it viewed the below-par repayment as distressed and, hence, a de facto restructuring and default on the company's obligations. S&P is raising the issuer credit rating to 'CCC-' based on its forward-looking opinion, which indicates that S&P believes further restructurings are likely in the next six months. For the same reason the ratings on the first-lien senior secured term loans will remain at 'D' until S&P believes that the prospect of additional prepayments is remote. The negative outlook reflects S&P's view that further reductions in the borrowing base are likely to strain what S&P already perceives to be a "weak" liquidity position. S&P also believes that additional below-par prepayments are likely in the next six months. S&P is unlikely to revise the outlook to stable unless oil and gas prices show growth and stability. SHERIDAN FUND II: S&P Raises LT ICRs to 'CCC-', Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services, on Feb. 8, 2016, said it raised its long-term issuer credit ratings on Sheridan Production Partners II-A, Sheridan Investment Partners II, and Sheridan Production Partners II-M (collectively referred to as "Sheridan Fund II") to 'CCC-' from 'SD'. The outlook is negative. At the same time, S&P affirmed its issue ratings on the term loans at 'D'. The ratings on the revolving credit facilities remain at 'CCC' and continue to be on CreditWatch with negative implications. The upgrade reflects S&P's updated view following Sheridan Fund II's below-market prepayments. On Feb. 2, 2016, S&P downgraded the fund to 'SD' as a result of the transactions. Although the fund is still out of compliance with its asset coverage ratio (it has six months from the reassessment of the borrowing base to regain compliance), the prepayment brought the company within $51 million of the required $1.2 billion. According to S&P's criteria, it viewed the below-par prepayment as distressed and, hence, a de facto restructuring and default on the company's obligations. "We are raising the issuer credit rating to 'CCC-' based on our forward-looking opinion, which indicates that we believe further restructurings are likely in the next six months," said Standard & Poor's credit analyst Trevor Martin. For the same reason the ratings on the first-lien senior secured term loans will remain at 'D' until S&P believes that the prospect of additional prepayments is remote. The negative outlook reflects S&P's view that further reductions in the borrowing base are likely to strain what S&P already perceives to be a "weak" liquidity position. S&P also believes that additional below-par prepayments are likely in the next six months. S&P is unlikely to revise the outlook to stable unless oil and gas prices show growth and stability. SHERIDAN I: Moody's Changes PDR to Caa3-PD/LD --------------------------------------------- Moody's Investors Service changed each of Sheridan Investment Partners I, LLC's (SIP I), Sheridan Production Partners I-A, L.P.'s (Fund I-A) and Sheridan Production Partners I-M, L.P.'s (Fund I-M), (collectively Sheridan I) Probability of Default Ratings (PDR) to Caa3-PD/LD from Caa3-PD. Concurrently, Moody's affirmed Sheridan I's Caa3 Corporate Family Ratings (CFR) and Caa3 senior secured term loans ratings at SIP I, Fund I-A and Fund I-M. The rating outlook remains negative. On Nov. 25, 2015, Sheridan I amended its senior secured term loan credit facilities to introduce a process for lenders to voluntarily tender their loans for prepayment. Post this transaction, through Feb. 1, 2016, Sheridan I prepaid $130 million principal amount of the term loans at a steep discount to the par value. Moody's considers Sheridan I's prepayment of term loans at a discount as a distressed exchange, which is an event of default under Moody's definition of default. As noted above, Moody's appended the Caa3-PD PDR with a "/LD" designation indicating limited default. The "/LD" designation will be removed three business days hereafter. A list of rating actions are: Changes: Issuer: Sheridan Investment Partners I, LLC Probability of Default Rating, Changed to Caa3-PD/LD from Caa3- PD Issuer: Sheridan Production Partners I-A, LP Probability of Default Rating, Changed to Caa3-PD/LD from Caa3- PD Issuer: Sheridan Production Partners I-M, LP Probability of Default Rating, Changed to Caa3-PD/LD from Caa3- PD Affirmations: Issuer: Sheridan Investment Partners I, LLC Corporate Family Rating, Affirmed Caa3 Senior Secured Term Loan, Affirmed Caa3 (LGD4) Issuer: Sheridan Production Partners I-A, LP Corporate Family Rating, Affirmed Caa3 Senior Secured Term Loan, Affirmed Caa3 (LGD4) Issuer: Sheridan Production Partners I-M, LP Corporate Family Rating, Affirmed Caa3 Senior Secured Term Loan, Affirmed Caa3 (LGD4) Outlook Actions: Issuer: Sheridan Investment Partners I, LLC Outlook remains Negative Issuer: Sheridan Production Partners I-A, LP Outlook remains Negative Issuer: Sheridan Production Partners I-M, LP Outlook remains Negative SIP I, Fund I-A, Fund I-B, and Fund I-M are a related group of private investment companies created to acquire and exploit mature producing oil and gas properties in the United States. SHERSON GROUP: Court Approves Final Report, Closes Chapter 15 Case ------------------------------------------------------------------ The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York (i) approved the final report of Richter Advisory Group Inc., in its capacity as court-appointed foreign representative of Sherson Group, Inc.; and (ii) closed the Chapter 15 case of the Debtor. Michael B. Schaedle, Esq., at Blank Rome LLP submitted a certificate of no objection to the final report. On Dec. 17, 2015, the foreign representative submitted that the Chapter 15 case has been fully administered because there were no outstanding motions, contested matters or adversary proceedings. Therefore, the requirements of Section 350(a) of the Bankruptcy Code have been met. The Foreign Representative is represented by: Michael B. Schaedle, Esq. Rick Antonoff, Esq. Gregory F. Vizza, Esq. BLANK ROME LLP 405 Lexington Avenue New York, NY 10174 Tel: (212) 885-5000 Fax: (212) 885-5001 Email: Schaedle@BlankRome.com RAntonoff@BlankRome.com Vizza@BlankRome.com About Sherson Group, Inc. Sherson Group Inc., distributor of the Nine West footwear in 48 retail locations, filed a Chapter 15 bankruptcy petition (Bankr. S.D.N.Y. Case No. 15-11765) on July 6, 2015, in Manhattan, to seek recognition of its Canadian proceedings. The U.S. case is assigned to Judge Sean H. Lane. Michael B. Schaedle, Esq., at Blank Rome LLP, in Philadelphia, serves as U.S. counsel to the Debtor. Aird & Berlis has been retained by Sherson Group to represent the Company as its primary counsel in its Canadian proceeding under the Canadian Bankruptcy & Insolvency Act, R.S.C., 1985, c. B-3. Richter Advisory Group Inc. was selected by the Company as trustee. Richter, as foreign representative, signed the Chapter 15 petition. Sherson Group is one of Canada's premier distributors and retailers of footwear and accessories. Its fashion portfolio features names such as Nine West, Bandolino, Enzo Angiolini, Anne Klein, Easy Spirit, Adrienne Vittadini, Adrianna Papell, Taryn Rose, Flogg, Charles David, Circa Joan and David, and Mootsies Tootsies. The Company's primary brand is Nine West and distribution occurs primarily through its 48 retail locations in Canada (although a substantial percentage of sales occur through wholesale and E-commerce channels). It employs in excess of 600 workers throughout Canada. The Company was established in 1984 as Sherson Marketing Inc., which later became Sherson Marketing Corp. and, subsequently amalgamated with another entity to become Sherson Group. It is organized under the laws of the Province of Ontario with a registered address 1446 Don Mills Road, Suite 100, Toronto, Ontario, Canada. SOUTHERN MARINE: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Involuntary Chapter 11 Petitions were filed on February 12, 2016, against these entities: Alleged Debtors Case No. --------------- -------- DJWV2, LLC 16-30062 1415 4th Avenue Huntington, WV 25717 Southern Marine Services 16-30063 Limited Liability Company 1316 Porter Road Catlettsburg, KY 41129 Southern Marine Terminal, LLC 16-30064 1316 Porter Road Catlettsburg, KY 41129 Court: United States Bankruptcy Court Southern District of West Virginia (Huntington) Judge: Frank W. Volk Petitioner's Counsel: Kirk B Burkley, Esq. BERNSTAINE-BURKLEY, P.C. 707 Grant St, Ste 2200 Pittsburgh, PA 15219 Tel: 412-456-8108 Fax: 412-456-8289 Email: kburkley@bernsteinlaw.com Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Peoples Bank, N.A. Loan/Guaranty $12,464,140 138 Putnam St. Marietta, OH 45750 STEPHEN D. MCCORMICK: 8th Cir. Dismisses Appeal from Atty Fee Order ------------------------------------------------------------------- The United States Court of Appeals for the Eight Circuit dismissed, for lack of jurisdiction, the appeal filed by Stephen and Karen McCormick from the ruling of the Eight Circuit Bankruptcy Appellate Panel, which held that Starion Financial is entitled to recover the attorney's fees it incurred while collecting on its secured debt in the course of the McCormick's bankruptcy proceedings. The BAP had reversed the ruling of the bankruptcy court and remanded to the latter for further proceedings to determine the reasonableness and the timeliness of Starion Financial's fee request. On appeal, the Eight Circuit held that because the resolution of the timeliness and reasonableness of the fee application affect the merits of the dispute over the fee request, the BAP's remand order leaves the bankruptcy court tasks, which are likely to "generate a new appeal or to affect the issue that the disappointed party wants to raise on appeal." The appeals case is Starion Financial, Appellee, v. Stephen D. McCormick; Karen A. McCormick, Appellants, No. 15-1160 (8th Cir.), relating to In re: Stephen D. McCormick, also known as Steve D. McCormick; Karen A. McCormick Debtors. A full-text copy of the Eight Circuit's February 1, 2016 opinion is available at http://is.gd/7Cfqtnfrom Leagle.com. SUNDEVIL POWER: Gets Commitment for $45-Mil. DIP Facility --------------------------------------------------------- Sundevil Power Holdings, LLC and SPH Holdco LLC seek the Bankruptcy Court's authority to enter into a debtor-in-possession facility with CLMG Corp., as administrative agent and as collateral agent, and the lenders led by Beal Bank USA. The Debtors said they were able to reach an agreement with Beal Bank, their prepetition lender, on the terms of a postpetition financing arrangement that addresses their liquidity needs during the proposed sale process, allowing the Debtors to continue to operate their businesses, pay insurance premiums, perform necessary maintenance on their power blocks, and otherwise fund the administrative costs of these Chapter 11 cases. The Lenders have agreed to provide the Debtors $45 million, of which $7.5 million will be available on an interim basis pending entry of the Final Order. The Eurodollar Rate Loans will will accrue interest at the Eurodollar Rate, plus 7.50% per annum. Base Rate Loans will accrue interest at the Base Rate, plus 6.50% per annum. During an Event of Default, interest will accrue on Base Rate Loans at the rate equal to the Base Rate, plus 8.50% per annum, and on Eurodollar Rate loans at the Eurodollar Rate, plus 9.50% per annum. The term of the DIP Facility will commence on the date of entry of the Interim Order and, prior to the entry of the Final Order, end on the earlier of (i) the date that is 35 days after the Petition Date, (ii) June 30, 2016, (iii) the termination of the DIP Facility by the DIP Lenders as a result of an Event of Default which is continuing, (iv) the closing of a 363 sale of substantially all of the Debtors' assets, and (v) the Interim Order ceasing to be in full force and effect for any reason. The Debtors propose to grant to the DIP Agent for the benefit of the DIP Lenders and the other secured parties under the DIP Loan Documents a superpriority administrative claim and first priority priming liens on and security interests in all assets and property of the Debtors. The Debtors also obtained permission from the Prepetition Lender to use cash collateral, subject to the Court's approval. About Sundevil Power Merchant power generators Sundevil Power Holdings, LLC and SPH Holdco LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 16-10369 and 16-10370, respectively), on Feb. 12, 2016. The petitions were signed by Blake M. Carlson as authorized signatory. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of at least $100 million. The Debtors have engaged Vinson & Elkins LLP as legal counsel, Drinker Biddle & Reath LLP as Delaware counsel, and Garden City Group as claims and noticing agent. Judge Kevin J. Carey is assigned to the case. SUNDEVIL POWER: Hires Garden City as Claims and Noticing Agent -------------------------------------------------------------- Sundevil Power Holdings, LLC and SPH Holdco LLC are seeking authority from the U.S. Bankruptcy Court for the District of Delaware to appoint Garden City Group, LLC as their claims and noticing agent to, among other things, (a) distribute required notices to parties-in-interest, (b) receive, maintain, docket, and otherwise administer the proofs of claim filed in these Chapter 11 cases; and (c) as necessary, provide other administrative services that would fall within the purview of services to be provided by the Office of the Clerk of the Bankruptcy Court. Although the Debtors have not yet filed their schedules of assets and liabilities, they anticipate that there may be in excess of 200 entities to be noticed, many of which are expected to file proofs of claim. The Debtors said they seek to employ GCG to, among other things, relieve the Court and the Clerk's Office of administrative burdens given the number of creditors and other parties in interest involved in these chapter 11 cases. GCG's hourly billing rates are: Title Standard Hourly Rates ----- --------------------- Administrative, Mailroom and $45-$55 Claims Control Project Administrators $70-$85 Project Supervisors $95-$110 Graphic Support & Technology Staff $100-$200 Project Managers and Senior Project $125-$175 Managers Directors and Asst. Vice Presidents $200-$295 Vice Presidents and above $295 In addition to the compensation, the Debtors have agreed to reimburse GCG for all out-of-pocket expenses. The Debtors request that the undisputed fees and expenses incurred by GCG in the performance of the services be treated as administrative expenses of their estates and be paid in the ordinary course of business without further application to or order of the Court. Prior to the Petition Date, the Debtors provided GCG a retainer in the amount of $25,000. On Feb. 9, 2016, the Debtors provided GCG with a retainer replenishment in the amount of $5,000. GCG seeks to apply the retainer to all prepetition invoices and thereafter hold the retainer under the Engagement Agreement during these Chapter 11 cases as security for the payment of postpetition fees and expenses incurred under the Engagement Agreement. The Debtors have agreed to indemnify, defend, and hold harmless GCG and its directors, officers, employees, affiliates, and agents under certain circumstances specified in the Engagement Agreement, except in circumstances resulting solely from GCG's gross negligence, fraud, or willful misconduct. GCG represented that it is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code with respect to the matters upon which it is engaged. About Sundevil Power Merchant power generators Sundevil Power Holdings, LLC and SPH Holdco LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 16-10369 and 16-10370, respectively), on Feb. 12, 2016. The petitions were signed by Blake M. Carlson as authorized signatory. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of at least $100 million. The Debtors have engaged Vinson & Elkins LLP as legal counsel, Drinker Biddle & Reath LLP as Delaware counsel, and Garden City Group as claims and noticing agent. Judge Kevin J. Carey is assigned to the case. SUNDEVIL POWER: Proposes April 11, 2016 as General Claims Bar Date ------------------------------------------------------------------ Sundevil Power Holdings, LLC and SPH Holdco LLC request that the U.S. Bankruptcy Court for the District of Delaware Court establish: (a) the deadline for holders of prepetition claims to file proofs of claim and proofs of interest as April 11, 2016, at 5:00 p.m. (EST), 60 days after the Petition Date; and (b) the deadline for governmental entities to file proofs of claim as Aug. 11, 2016, at 5:00 p.m. (EST), which is more than 180 days of the Petition Date. The Debtors propose that any entity holding an interest, which interest is based exclusively upon the ownership of: (a) a membership interest in a limited liability company; (b) common or preferred stock in a corporation; or (c) warrants or rights to purchase, sell or subscribe to such a security or interest, need not file a proof of interest on or before the General Bar Date; provided, however, Interest Holders who want to assert claims against the Debtors that arise out of or relate to the ownership or purchase of an Interest, including claims arising out of or relating to the sale, issuance or distribution of the Interest, must file a claim by the applicable Bar Dates. The Debtors propose that entities that fail to properly file a Proof of Claim Form by the applicable Bar Date be forever barred, estopped and enjoined from: (a) asserting any prepetition claim against the Debtors that such entity may possess and that (i) is in an amount that exceeds the amount, if any, that is identified in the Schedules on behalf of such entity as undisputed, noncontingent, and liquidated or (ii) is of a different nature, classification or priority than any claim identified in the Schedules on behalf of such entity; and (b) voting upon, or receiving distributions under, any Chapter 11 plan in these cases in respect of an Unscheduled Claim. All entities asserting claims against both Debtors must file a separate form with respect to each Debtor and identify on each form the particular Debtor against which those entities assert their respective claims. The Debtors intend to publish notice of the Bar Dates in the Wall Street Journal and certain additional local publications as may be deemed appropriate as a means to provide notice of the Bar Dates to unknown potential claimants. About Sundevil Power Merchant power generators Sundevil Power Holdings, LLC and SPH Holdco LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 16-10369 and 16-10370, respectively), on Feb. 12, 2016. The petitions were signed by Blake M. Carlson as authorized signatory. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of at least $100 million. The Debtors have engaged Vinson & Elkins LLP as legal counsel, Drinker Biddle & Reath LLP as Delaware counsel, and Garden City Group as claims and noticing agent. Judge Kevin J. Carey is assigned to the case. SUNDEVIL POWER: Seeks 16-Day Extension to File Schedules -------------------------------------------------------- Sundevil Power Holdings, LLC and SPH Holdco LLC ask the Bankruptcy Court to extend their 14-day deadline to file schedules of assets and liabilities for an additional 16 days. "Due to the Debtors limited resources and their prepetition focus on preparing for a smooth transition into chapter 11, the Debtors have not yet had a sufficient opportunity to complete the preparation of the Schedules and Statements and do not anticipate having the Schedules and Statements ready for filing within the 14-day period prescribed by Bankruptcy Rule 1007(c)," said Steven K. Kortanek, Esq., at Drinker Biddle & Reath LLP, counsel for the Debtors. The Debtors expect that it will take a total of 30 days from the Petition Date to complete, review, and file the Schedules and Statements with the Court. Meanwhile, the Debtors said they will continue to work diligently to cooperate with ongoing information requests from creditors, the UST, and other parties-in-interest. About Sundevil Power Merchant power generators Sundevil Power Holdings, LLC and SPH Holdco LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 16-10369 and 16-10370, respectively), on Feb. 12, 2016. The petitions were signed by Blake M. Carlson as authorized signatory. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of at least $100 million. The Debtors have engaged Vinson & Elkins LLP as legal counsel, Drinker Biddle & Reath LLP as Delaware counsel, and Garden City Group as claims and noticing agent. Judge Kevin J. Carey is assigned to the case. TAYLOR-WHARTON: $25M DIP Facility Has Final Approval ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered a final order authorizing debtors Taylor-Wharton International LLC, et al., to obtain postpetition financing and use cash collateral. The Court authorized Taylor-Wharton International LLC, Taylor-Wharton Cryogenics LLC, Sherwood Valve LLC, TW Express LLC ("Borrowers") to obtain senior secured priming and superpriority postpetition financing, which consists of a revolving credit facility for up to $13,250,000 ("DIP Revolver Facility"), including letter of credit sub-facilities for up to $7,250,000 ("DIP LC Sub-Facility"), and the Roll Up DIP Loans of $12,000,000. The amount of the DIP Revolver Facility and the DIP LC Sub-Facility will be reduced as provided in the DIP Credit Agreement, pursuant to the terms of (a) the Court's Final Order, (b) the Senior Secured Priming and Superpriority Credit Agreement dated Oct. 13, 2015 ("DIP Credit Agreement") and (c) any and all other Loan Documents, to: (1) fund, among other things, ongoing work capital, general corporate expenditures and other financing needs of the Debtors; (2) provide letters of credit for the account of any of the Debtors; (3) covert to DIP Obligations under the DIP Loan Documents $12,000,000 of the outstanding principal amount of the respective portions of the Term Loan A, Term Loan B and Revolving A Loan, held by DIP Revolving Lenders ratably in accordance with their respective shares of the DIP Revolver Facility; (4) pay certain adequate protection amounts to the Prepetition First Lien Secured Parties; (5) pay certain transaction fees and other costs and expenses of administration of the Cases; and (6) pay fees and expenses and interest owed to the DIP Secured Parties under the DIP Loan Documents. Prepetition, the Debtors entered into a First Lien Credit Agreement with financial institutions party thereto as "Lenders" and Antares Capital LP, as administrative agent and collateral agent ("Prepetition First Lien Secured Parties"). As of the Petition Date, the Borrowers owed the Prepetition First Lien Secured Parties an aggregate principal amount of not less than $7,604,839 with respect to the Letters of Obligations and not less than $4,452,737 with respect to Revolving A Loan, $29,384,686 with respect to Term Loan A, $11,137,467 with respect to Term Loan B and $16,886,122 with respect to Term Loan C, plus all accrued and accruing and unpaid interest thereon and any additional fees, expenses, and other amounts due under the Prepetition First Lien Loan Documents. Prepetition, the Debtors also entered into the a Second Lien Note Facility with other parties thereto that are designated as a "Credit Party", financial institutions party thereto as "Purchasers" and General Electric Capital Corporation, as administrative agent and collateral agent ("Prepetition Second Lien Secured Parties"). As of the Petition Date, the Borrowers owed the Prepetition Second Lien Secured Parties an aggregate principal amount of not less than $39,523,000, plus accrued and unpaid interest and any additional fees, expenses and other amounts due. A copy of the Final DIP Financing Order is available for free at: http://bankrupt.com/misc/Taylor-Wharton_168_Final_DIP_Ord.pdf An interim hearing on the Debtors' Motion was held Oct. 13 and a final hearing was held Oct. 28. The Court authorized the Debtors to obtain postpetition financing and use Cash Collateral despite the lengthy objection submitted the Official Committee of Unsecured Creditors. Judge Shannon entered a separate order approving a Stipulation executed by the Creditors Committee, the Prepetition First Lien Agent and Prepetition Second Lien Collateral Agent, extending the Committee Challenge Deadline from Dec. 23, 2015 through Jan. 25, 2016. The Creditors Committee is represented by: Mary E. Seymour, Esq. Wojceiech F. Jung, Esq. Cassandra Porter, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Telephone: (973)597-2500 Facsimile: (973)597-2400 E-mail: mseymour@lowenstein.com wjung@lowenstein.com cporter@lowenstein.com - and - Frederick B. Rosner, Esq. Julia B. Klein, Esq. 824 Market Street, Suite 810 Wilmington, DE 19801 Telephone: (302)777-1111 E-mail: rosner@teamrosner.com klein@teamrosner.com Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC are represented by: J. Cory Falgowski, Esq. REED SMITH LLP 1201 Market Street, Suite 1500 Wilmington, DE 19801 Telephone: (302)778-7500 Facsimile: (302)778-7575 E-mail: jfalgowski@reedsmith.com - and - Paul M. Singer, Esq. REED SMITH LLP 225 Fifth Avenue, Suite 1200 Pittsburgh, PA 15222 Telephone: (412)288-3131 Facsimile: (412)288-3063 E-mail: psinger@reedsmith.com - and - Derek J. Baker, Esq. 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215)851-8100 Facsimile: (215)851-1420 Email: dbaker@reedsmith.com Antares Capital LP is represented by: Mark D. Collins, Esq. Amanda R. Steele, Esq. RICHARDS LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Telephone: (302)651-7700 Facsimile: (302)651-7701 E-mail: collins@rlf.com steele@rlf.com - and - Richard A. Levy, Esq. Christopher Harris, Esq. Matthew L. Warren, Esq. Emily R. Goebel, Esq. LATHAM & WATKINS LLP 330 North Wabash Avenue, Suite 2800 Chicago, IL 60611 Telephone: (312)876-7700 Facsimile: (312)993-9767 E-mail: richard.levy@lw.com christopher.harris@lw.com matthew.warren@lw.com About Taylor-Wharton Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12075) on Oct. 7, 2015. The petition was signed by Thomas Doherty as chief restructuring officer. Cryogenics is a leading designer, engineer and manufacturer of cryogenic equipment designed to transport and store liquefied atmospheric and hydrocarbon gases. Cryogenics has a single United States operation in Theodore, Alabama. Cryogenics is the direct or indirect parent of several foreign non-debtor subsidiaries which have manufacturing operations in China, Malaysia, Slovakia, and warehousing operations in Germany and Australia. The Debtors have engaged Reed Smith LLP as general bankruptcy counsel, Argus Management Corporation as interim management services provider, Stifel, Nicolaus & Company, Incorporated and Miller Buckfire & Company LLC as investment banker and Logan & Company, Inc., as noticing and claims agent. The Debtors estimated both assets and liabilities of $100 million to $500 million. O'Neal Steel Inc. is listed as the largest unsecured creditor holding a trade claim of $788,815. Judge Brendan Linehan Shannon is assigned to the case. TAYLOR-WHARTON: Domestic Assets Sold to Worthington for $33.3MM --------------------------------------------------------------- Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC in November won approval from the Bankruptcy Court to sell substantially all their domestic assets, including its CryoScience business, to a unit of Worthington Industries, Inc. Pursuant to the Asset Purchase Agreement, Worthington has agreed to purchase the Debtors' domestic assets for $33,250,000 subject to post-closing adjustments. The Debtors filed the sale and bidding procedures motion on Oct. 7, 2015. On Oct. 29, the Court approved the bidding procedures, which set a Nov. 11 deadline for initial bids. An auction was held on Nov. 16. The Debtors selected Worthington Cylinder Corp. as successful bidder. The sale hearing was held Nov. 20. Haier Medical and Laboratory Products USA, Inc., as stalking horse bidder, was under contract to purchase the assets, absent higher and better offers. Haier Medical is entitled to a break-up fee of $875,000. Cryogenics is a designer, engineer and manufacturer of cryogenic equipment designed to transport and store liquefied atmospheric and hydrocarbon gases. Cryogenics has a single United States operation in Theodore, Alabama. Cryogenics is the direct or indirect parent of several foreign non-debtor subsidiaries which have manufacturing operations in China, Malaysia, Slovakia, and warehousing operations in Germany and Australia. A copy of the Sale Order filed Nov. 23, 2015, is available for free at: http://bankrupt.com/misc/Taylor-Wharton_267_CryoSc_Sale_Ord.pdf A copy of the final APA signed with Worthington is available at: http://bankrupt.com/misc/Taylor-Wharton_254_Worthington_APA_1.pdf Administrative Insolvency In documents filed prior to the sale hearing, the Official Committee of Unsecured Creditors pointed out that the sale consideration provided by Worthington for the U.S. assets is not sufficient to pay off the Debtors' prepetition secured lenders. The Committee is concerned that the Worthington sale, and any budgetary modifications that the secured lenders may impose as a result, will render the estates administratively insolvent. In connection with an order approving the Worthington sale, the Committee asserts that the Court should require a showing by the Debtors that the bankruptcy estates are solvent, and that the Debtors have adequate funds to cover all currently accrued and accruing (not only the budgeted) priority and administrative gexpense claims. In addition, the Committee pointed out that given that the non-U.S. assets appear to be the only tangible assets left for the estates (excluding estate causes of action and other claims), the Debtors should clarify their proposed course of action with respect to the Foreign Assets and these Chapter 11 Cases in general. Antares Capital LP, in its capacity as administrative agent and collateral agent under the DIP Facility and the Prepetition First Lien Credit Agreement, responded to the Committee's filings by pointing out that the Final DIP Order contains provisions specifically negotiated with the Committee that fully address their wholly speculative and groundless concern about the future administrative solvency of the Debtors. For example, the Approved Budget attached to the Final DIP Order has a line item that provides for the payment of all Section 503(b)(9) claims (up to a very generous limit (to which the Committee agreed) that exceeds any reasonable estimate of that category of administrative claims). The Final DIP Order also sets forth a procedure for the parties' negotiation of a Supplemental Approved Budget that will replace the current Approved Budget once the closing of the Worthington sale occurs. Post-closing, the Debtors’ operational expenses will be dramatically reduced, as the Debtors will no longer have any operating businesses or even any tangible assets other than the very modest amounts of non-CryoScience inventory and receivables that will be monetized in short order, and as a result, there will be little, if any, wind-down expenses. Moreover, the bulk of such operational wind-down expenses should be funded by the payments under the transition services agreement to be entered into with Worthington at closing. Antares Capital relates that as for the Foreign Assets, the costs of the sale process will be almost entirely borne by the foreign Non-Debtor Affiliates, which retained their own investment banker prior to the Petition Date. In short, it is virtually inconceivable that there are any administrative expenses that the Debtors may incur in the future that would not be covered by any Supplemental Approved Budget that is agreed upon, and the Committee certainly has not identified any such administrative expense. Limited objections to the sale motion were filed by Oracle America, Inc., Samuel Pressure Vessel Group, and other parties regarding the assumption of assignment of agreements. The Court ruled that the objections are moot as none of the agreements are listed on Schedule 1.1(b) of the Worthington APA as executory contracts to be assigned to the buyer. To address a limited objection filed by the ACE Companies, the Sale Order provides that the transferred assets will not include any insurance policies and any related agreements issued by ACE. Counsel to the Official Committee of Unsecured Creditors: LOWENSTEIN SANDLER LLP Mary E. Seymour, Esq. Wojciech F. Jung, Esq. Cassandra Porter, Esq. 65 Livingston Avenue Roseland, NJ 07068 Telephone: (973-597-2500 Facsimile: (973) 597-2400 Delaware Counsel to the Official Committee of Unsecured Creditors: THE ROSNER LAW GROUP LLC Frederick B. Rosner, Esq. Julia B. Klein, Esq. 824 Market Street, Suite 810 Wilmington, DE 19801 Tel: (302) 777-1111 Attorneys for the DIP Agent and Prepetition First Lien Agent: Mark D. Collins, Esq. Amanda Steele, Esq RICHARDS LAYTON & FINGER One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 - and - Richard A. Levy, Esq. Christopher Harris, Esq. Matthew L. Warren, Esq. Emily R. Goebel, Esq. LATHAM & WATKINS LLP 330 North Wabash Avenue, Suite 2800 Chicago, IL 60611 Tel: (312) 876-7700 Fax: (312) 993-9767 Attorneys for the ACE Companies: Richard W. Riley, Esq. DUANE MORRIS LLP 222 Delaware Avenue, Suite 1600 Wilmington, DE 19801-1659 Telephone: (302) 657-4900 Facsimile: (302) 657-4901 E-mail: rwriley@duanemorris.com - and - Wendy M. Simkulak, Esq. 30 South 17th Street Philadelphia, PA 19103-4196 Telephone: (215) 979-100 E-mail: wmsimkulak@duanemorris.com Attorneys for Oracle America, Inc.: MARGOLIS EDELSTEIN James E. Huggett, Esq. 300 Delaware Avenue, Suite 800 Wilmington, DE 19801 Telephone: (302) 888-1112 E-mail: jhuggett@margolisedelstein.com - and - Amish R. Doshi, Esq. MAGNOZZI & KYE, LLP 23 Green Street, Suite 302 Huntington, NY 11743 Telephone: (631) 923-2858 E-mail: adoshi@magnozzikye.com - and - Shawn M. Christianson, Esq. Valerie Bantner Peo, Esq. BUCHALTER NEMER P.C. 333 Market Street, 25th Floor San Francisco, CA 94105-2126 Telephone: (415) 227-0900 - and - Deborah Miller, Esq. Michael Czulada, Esq. ORACLE AMERICA, INC. 500 Oracle Parkway Redwood City, CA 94065 Telephone: (650) 506-5200 About Taylor-Wharton Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12075) on Oct. 7, 2015. The petition was signed by Thomas Doherty as chief restructuring officer. Cryogenics is a designer, engineer and manufacturer of cryogenic equipment designed to transport and store liquefied atmospheric and hydrocarbon gases. Cryogenics has a single United States operation in Theodore, Alabama. Cryogenics is the direct or indirect parent of several foreign non-debtor subsidiaries which have manufacturing operations in China, Malaysia, Slovakia, and warehousing operations in Germany and Australia. The Debtors have engaged Reed Smith LLP as general bankruptcy counsel, Argus Management Corporation as interim management services provider, Stifel, Nicolaus & Company, Incorporated and Miller Buckfire & Company LLC as investment banker and Logan & Company, Inc., as noticing and claims agent. The Debtors estimated both assets and liabilities of $100 million to $500 million. O'Neal Steel Inc. is listed as the largest unsecured creditor holding a trade claim of $788,815. Judge Brendan Linehan Shannon is assigned to the case. TAYLOR-WHARTON: Files Rule 2015.3 Report for Endurium, TWC ---------------------------------------------------------- Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC filed a report as of Oct. 7, 2015, on the value, operations and profitability of entities in which the estates hold a substantial or controlling interest, as required by Bankruptcy Rule 2015.3. The report covers foreign subsidiaries Endurium Holding Company and TWC Australia Pty Ltd. Endurium Holding is a Cyprian entity owned by Taylor-Wharton Cryogenics LLC. Endurium had $55.2 million in assets and $48.5 million in liabilities as of Oct. Oct. 7, 2015. It had net income of $183,000 of net sales of $41.7 million for the period ending Oct. 7, 2015. TWC Australia is an Australian entity owned by Taylor-Wharton Cryogenics. The Debtor had total assets of $1.11 million and total liabilities of $639,000 as of Oct. 7, 2015. The company had a loss of $75,000 on net sales of $1.64 million for the period ending Oct. 7, 2015. A copy of the Rule 2015.3 Report is available for free at: http://bankrupt.com/misc/Taylor-Wharton_226_2015.3_Report.pdf About Taylor-Wharton Taylor-Wharton International LLC and Taylor-Wharton Cryogenics LLC filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12075) on Oct. 7, 2015. The petition was signed by Thomas Doherty as chief restructuring officer. Cryogenics is a leading designer, engineer and manufacturer of cryogenic equipment designed to transport and store liquefied atmospheric and hydrocarbon gases. Cryogenics has a single United States operation in Theodore, Alabama. Cryogenics is the direct or indirect parent of several foreign non-debtor subsidiaries which have manufacturing operations in China, Malaysia, Slovakia, and warehousing operations in Germany and Australia. The Debtors have engaged Reed Smith LLP as general bankruptcy counsel, Argus Management Corporation as interim management services provider, Stifel, Nicolaus & Company, Incorporated and Miller Buckfire & Company LLC as investment banker and Logan & Company, Inc., as noticing and claims agent. The Debtors estimated both assets and liabilities of $100 million to $500 million. O'Neal Steel Inc. is listed as the largest unsecured creditor holding a trade claim of $788,815. Judge Brendan Linehan Shannon is assigned to the case. TECK RESOURCES: S&P Lowers CCR to 'B+', Outlook Negative -------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and issue-level ratings on Canada-based globally diversified mining company Teck Resources Ltd. to 'B+' from 'BB'. The outlook is negative. At the same time, Standard & Poor's lowered its issue-level rating on the company's senior unsecured notes to 'B+' from 'BB'. The '3' recovery rating on this debt, which corresponds with meaningful (50%-70%, at the upper half of the range) recovery in our simulated default scenario, is unchanged. "The downgrade on Teck primarily follows the significant downward revision to our price assumptions for the core commodities produced by the company, and corresponding reduction in our estimate of its prospective earnings and cash flow," said Standard & Poor's credit analyst Jarrett Bilous. The negative outlook primarily reflects the potential that depressed market conditions in Teck's core commodity segments, which include metallurgical coal, copper, and zinc, will persist or weaken further in 2016 and into 2017 and result in higher-than-expected leverage, heightened free cash flow deficits, and liquidity concerns. TERA GROUP: Auction of Assets Moved to March 3 ---------------------------------------------- The sale of collateral of Tera Group Inc., 110 Wall Street, 4th Floor in New York, New York, have been postponed as follows: Sale - Thursday, March 3, 2016 at 9:00 a.m. ET Place - Foley & Lardner LLP 90 Park Avenue New York, NY 10016 Interested bidders should contact J. Small of Foley & Lardner LLP at msmall@foley.com if you have questions about the bidding. As reported by the Troubled Company Reporter on Jan. 26, 2016, LeoGroup Private Debt Facility LP is seeking to sell all of the assets of Tera Group to the highest qualified bidder by public sale in accordance with 6 Del. 9-610. The sale was initially set for Feb. 11, 2016. The TCR said qualified bidders must wire a deposit of $25,000 along with a proof of financial wherewithal sufficient to subsequently wire transfer in immediately available funds in U.S. Dollars the amount of any successful bid on the date of the sale. The deposit is refundable. The deposit of the winning bidder will be applied to the purchase price. THERAPEUTICSMD INC: FMR LLC Reports 14.9% Stake as of Dec. 31 ------------------------------------------------------------- FMR LLC and Abigail P. Johnson disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission on Feb. 12, 2016, that they beneficially own 26,677,206 shares of common stock of TherapeutisMD, Inc., representing 14.999 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/U1o3lT 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. THERAPEUTICSMD INC: T. Rowe Price Holds 5.8% Stake as of Dec. 31 ---------------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, T. Rowe Price Associates, Inc. disclosed that as of Dec. 31, 2015, it beneficially owns 10,443,954 shares of common stock of TherapeuticsMD, Inc., representing 5.8 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/C7JpAU 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. TRANS ENERGY: Clarence Smith Reports 9.8% Stake as of Dec. 31 ------------------------------------------------------------- Clarence E. Smith disclosed in a Schedule 13G filed with the Securities and Exchange Commission that for calendar year 2015 he beneficially owned 1,483,797 shares of common stock of Trans Energy, Inc., representing 9.8 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/Ej15Wb About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. Trans Energy reported a net loss of $12.5 million on $27.2 million of total operating revenues for the year ended Dec. 31, 2014, compared with a net loss of $17.7 million on $18.4 million of total operating revenues for the year ended Dec. 31, 2013. As of Sept. 30, 2015, the Company had $101 million in total assets, $129 million in total liabilities, and a $28 million total stockholders' deficit. TRANSCONTINENTAL REFRIG: Pres. Properly Adjudicated as Ch 7 Debtor ------------------------------------------------------------------ Judge A. Richard Caputo of the United States District Court for the Middle District of Pennsylvania affirmed the bankruptcy court's order granting summary judgment in favor of Navistar Financial Corporation and Navistar Leasing Company and denied the motion filed by Stephen P. Hrobuchak, Jr., to stay the bankruptcy proceedings. Judge Caputo also denied Transcontinental Refrigerated Lines, Inc.'s motion to lift the stay as moot. On October 30, 2008, a default judgment was entered against Hrobuchak in favor of Navistar in the District Court of the Middle District of Pennsylvania. Currently, Navistar holds two judgments against Hrobuchak together totaling $7,642,521.15. On May 1, 2014, Navistar filed a Chapter 7 Involuntary Bankruptcy Petition in the Bankruptcy Court of the Middle District of Pennsylvania against Hrobuchak. On October 23, 2014, the bankruptcy court granted Navistar's motion for summary judgment and adjudicated Hrobuchak as a Chapter 7 Debtor pursuant to 11 U.S.C. Section 303. Hrobuchak sought reconsideration and filed a motion for stay which the bankruptcy court both denied. Hrobuchak appealed from the bankruptcy court's order. In addition to his appeal, Hrobuchak also filed with the district court a motion to stay the bankruptcy case and the order of the bankruptcy court. TRL, by Lawrence V. Young, acting in his capacity as a liquidating agent, filed a motion for relief from the automatic stay and a corresponding motion for an expedited hearing. Judge Caputo agreed with the bankruptcy court's decision that Hrobuchak was not entitled to judgment as a matter of law because Navistar complied with the rules when filing the Involuntary Petition without three creditors and Hrobuchak was properly adjudicated a Chapter 7 Debtor. Judge Caputo also found that the joinder of Orix Financial Services, Incorporated corrected any potential deficiency and that there was no evidence of bad faith on the part of Navistar in filing the involuntary petition. As to Hrobuchak's motion to stay, Judge Caputo did not find that Hrobuchak has presented a showing sufficient for entry of a stay on his behalf. The judge also lifted the automatic stay previously issued in the case. The case is STEPHEN P. HROBUCHAK, Jr., Appellant, v. NAVISTAR FINANCIAL CORPORATION and NAVISTAR LEASING COMPANY, Chapter 7, Appellees, Civil Action No. 3:15-CV-777, Bankruptcy No. 5:14-bk-02098-JJT (M.D. Pa.). A full-text copy of Judge Caputo's January 27, 2016 memorandum is available at http://is.gd/vLgHyhfrom Leagle.com. Stephen P. Hrobuchak, Jr. is represented by: Robert P. Sheils, III, Esq. SHEILS LAW ASSOCIATES, P.C. 108 North Abington Rd. Clarks Summit, PA 18411 Tel: (570)587-2600 Fax: (570)585-0313 Email: rsheilsIII@sheilslaw.com Transcontinental Refrigerated Lines, Inc., by Lawrence V. Young, Liquidating Agent, is represented by: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Tel: (717)848-4900 Fax: (717)843-9039 Email: lyoung@cgalaw.com Navistar Financial Corporation and Navistar Leasing Company are represented by: Beth L Slaby, Esq. Kyle P Kickert, Esq. CLARK HILL PLC One Oxford Centre 301 Grant St, 14th Floor Pittsburgh, PA 15219 Tel: (412)394-7711 Fax: (412)394-2555 Email: bslaby@clarkhill.com -- and -- William Kent Carter, Esq. CLARK HILL PLC 150 N. Michigan Ave, Suite 2700 Chicago, IL 60601 Tel: (312)985-5900 Fax: (312)985-5999 Email: wcarter@clarkhill.com John J. Martin, Trustee, is represented by: John J. Martin, Esq. LAW OFFICES OF JOHN J. MARTIN 1022 Court Street Honesdale, PA 18431 Tel: (570)253-6899 US Trustee, Trustee, is represented by: Anne K. Fiorenza, Esq. OFFICE OF THE UNITED STATES TRUSTEE 228 Walnut Street, Suite 1190 Harrisburg, PA 17101 Tel: (717)221-4515 Fax: (717)221-4554 Transcontinental Refrigerated Lines, Inc., sought chapter 11 protection (Bankr. M.D. Pa. Case No. 08-50578) in 2008. Lawrence V. Young, Esq., serves as the Liquidating Agent for the Debtor's Estate. Mr. Young is represented by Brent Diefenderfer, Esq., at CGA Law Firm, in York, Pennsylvania. UNITED AMERICA: Owner Loses Summary Judgment Bid in Tax Suit ------------------------------------------------------------ Judge Norman K. Moon of the United States District Court for the Western District of Virginia, Lynchburg Division, granted in part and denied in part the motion for summary judgment filed by the United States of America and denied William Wallis' motion for summary judgment. The Government sued Wallis pursuant to 26 U.S.C. Section 6672 for failing to pay trust fund taxes for three closely held companies that he allegedly owned and operated: United America Holdings, Inc., Boss Management Group, Inc., and Nitti Family Enterprises, Inc. ("Planet Pizza"). The Government also sought to impose personal income tax liability on Wallis for taxable years 1998, 1999, 2000 and 2002. Judge Moon found that the trust fund recovery penalties and the personal income tax assessments were not time-barred. The judge held that the Government timely filed suit after certain events tolled the limitation periods. Judge Moon also found that the Internal Revenue Service (the "Service") had given proper notice under 26 U.S.C. Section 6672(b)(1) by sending notice to the Wallis' "last known address." Judge Moon then held that there is no evidence that the Service's Section 6020(b) estimates were "utterly without foundation," while ample proof links Wallis to the tax-generating activity of the companies. Finally, Judge Moon concluded that the evidence proves that Wallis was a responsible person who willfully failed to pay taxes for United and Boss. However, the judge found that evidence is not as strong for Planet Pizza. Thus, Judge Moon held that there is a genuine dispute of material fact whether Wallis is a "responsible person" for Planet Pizza during the relevant timeframe. Judge Moon also granted the Government's motion as it concerns personal income tax liability. Wallis' motion for summary judgment was denied. The case is UNITED STATES OF AMERICA, Plaintiff, v. WILLIAM WALLIS, Defendant, Civil No. 6:14-CV-00005 (W.D. Va.). A full-text copy of Judge Moon's February 1, 2016 memorandum opinion is available at http://is.gd/CITwCIfrom Leagle.com. United States of America is represented by: Gerald Alan Role, Esq. U.S. DEPARTMENT OF JUSTICE William L. Wallis is represented by: Gary Michael Bowman, Esq. GARY MICHAEL BOWMAN Colonial Office Center 2728 Colonial Ave, Ste. 100 Roanoke VA 24015 Tel: (540)343-1173 Fax: (540)345-7473 Email: gary@garymbowman.com VANGUARD NATURAL: Moody's Changes PDR to 'B3-PD/LD' --------------------------------------------------- Moody's Investors Service changed Vanguard Natural Resources, LLC's Probability of Default Rating to B3-PD/LD from B3-PD. The company's ratings remain on review for downgrade, including the B3 Corporate Family Rating, B3-PD/LD Probability of Default Rating and the Caa2 rating on its senior unsecured notes. The Speculative Grade Liquidity Rating remains SGL-4. "Vanguard's debt exchange reduced overall debt a modest 9% and extended the maturity, but the company remains highly levered," commented James Wilkins, a Moody's Vice President-Senior Analyst. RATINGS RATIONALE Moody's considers Vanguard's retirement of $168 million of existing senior unsecured notes due 2020 in exchange for $75.6 million of new second lien notes due 2023 (which closed on February 10th) as a distressed exchange, which is an event of default under Moody's definition of default. Moody's has appended the PDR with an "/LD" designation indicating a limited default, which will be removed after three business days. The ongoing ratings review will consider the weak industry fundamentals that has pressured oil and gas producers' cash flows, as well as focus on Vanguard's operations, ability to generate free cash flow, financial position and liquidity. Oil prices have deteriorated substantially in 2016 and have reached nominal price lows not seen in more than a decade. Similarly, natural gas prices are also depressed as North American production levels remain high. Vanguard Natural Resources, LLC is an independent exploration and production company headquartered in Houston, Texas. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. VERMILLION INC: Adopts Restructuring Plan to Streamline Operations ------------------------------------------------------------------ Vermillion, Inc., disclosed in a Form 8-K filed with the Securities and Exchange Commission that it adopted a restructuring plan to streamline its organization. With approximately $24 million in cash as of Sept. 30, 2015, the Company is restructuring headcount and other expenses targeting an approximately 20% reduction in operating expenses in 2016, as compared to operating expenses in 2015. About Vermillion Vermillion, Inc., is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 09-11091) on March 30, 2009. Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion reported a net loss of $19.2 million in 2014, a net loss of $8.81 million in 2013 and a net loss of $7.14 million in 2012. As of Sept. 30, 2015, the Company had $25.38 million in total assets, $3.27 million in total liabilities and $22.11 million in total stockholders' equity. VERMILLION INC: Terminates Laura Miller as SVP - Sales ------------------------------------------------------ Vermillion, Inc., terminated Laura Miller as senior vice president, sales and customer experience, effective Feb. 19, 2016, as part of recent changes in the sales organization of the Company, according to a Form 8-K report filed with the Securities and Exchange Commission. Ms. Miller's termination was "without cause" and was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. About Vermillion Vermillion, Inc., is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 09-11091) on March 30, 2009. Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion reported a net loss of $19.2 million in 2014, a net loss of $8.81 million in 2013 and a net loss of $7.14 million in 2012. As of Sept. 30, 2015, the Company had $25.38 million in total assets, $3.27 million in total liabilities and $22.11 million in total stockholders' equity. VISUALANT INC: AWM Investment Holds 9.2% Stake as of Dec. 31 ------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, AWM Investment Company, Inc. disclosed that as of Dec. 31, 2015, it beneficially owns 106,005 shares of common stock of Visualant, Inc. representing 9.2 percent of the shares outstanding. AWM is the investment adviser to Special Situations Technology Fund, L.P. and Special Situations Technology Fund II, L.P. As the investment adviser to the Funds, AWM holds sole voting and investment power over 15,867 shares of Common Stock of the Issuer and 4,760,000 Warrants to purchase Shares held by TECH and 90,138 and 27,040,000 Warrants to purchase Shares held by TECH II. Austin W. Marxe, David M. Greenhouse and Adam C. Stettner previously reported the Shares held by the Funds on Schedule 13G. A copy of the regulatory filing is available for free at: http://is.gd/4EU71S About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.63 million on $6.29 million of revenue for the year ended Sept. 30, 2015, compared to a net loss of $1.01 million on $7.98 million of revenue for the year ended Sept. 30, 2014. As of Sept. 30, 2015, the Company had $2.46 million in total assets, $7.83 million in total liabilities, all current, and a $5.37 million total stockholders' deficit. PMB Helin Donovan, LLP, in Seattle, Washington, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2015, citing that Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. WALTER ENERGY: Entered Into $50,000,000 DIP Facility from Citibank ------------------------------------------------------------------ Walter Energy, Inc., as borrower, entered into a Senior Secured Superpriority Debtor-in Possession Credit Agreement dated February 8, 2016, with: -- each of its domestic subsidiaries, as guarantors, -- the lenders from time to time party thereto, and -- Citibank, N.A., as administrative agent and escrow agent for the lenders and collateral agent for the secured creditors. The DIP Credit Agreement provides for a new debtor-in-possession credit facility under Section 364 of the Bankruptcy Code, in an aggregate principal amount not to exceed $50,000,000. The Debtors will use the proceeds of the DIP Credit Agreement for working capital and general corporate purposes, including the payment of certain prepetition amounts and expenses in connection with the administration of the Chapter 11 Cases, subject to the terms and conditions of the DIP Credit Agreement and the Final DIP Order (as defined in the DIP Credit Agreement). The stated maturity of the DIP Credit Agreement is February 29, 2016, but is subject to extension and certain automatic extensions set forth therein relating to the closing of the Company’s proposed Bankruptcy Code Section 363 sale pursuant to the Asset Purchase Agreement (as defined in the DIP Credit Agreement). Borrowings under the DIP Credit Agreement will bear interest at a rate equal to 12% per annum payable in cash upon termination of the facility. Upon closing the Company paid: -- an upfront fee of $3,750,000, which represents 7.5% of the aggregate commitment under the facility, and -- a put option premium of 7.5% of the backstop commitment provided by certain Lenders under the facility. The Company will also pay a drawdown fee of 2.5% of amounts withdrawn. The obligations under the DIP Credit Agreements constitute, subject to carve-outs for certain fees and expenses, superpriority administrative expense claims in the Chapter 11 Cases, secured by senior priming perfected first priority security interests and liens on all present and after acquired property of the Debtors, which security interests and liens are subject only to the carve-out and certain other permitted priority and approved liens specified in the Final DIP Order. The DIP Credit Agreement provides that the Debtors must comply with operating and capital expenditure budgets approved by the lenders set forth therein. The DIP Credit Agreement also contains certain covenants which, among other things, and subject to certain exceptions, restrict the Debtors’ ability to incur additional debt or liens, pay dividends, repurchase its limited liability company interests, prepay certain other indebtedness, sell, transfer, lease, or dispose of assets, and make investments in or merge with another company. If the Debtors were to violate any of the covenants under the DIP Credit Agreement and were unable to obtain a waiver, it would be considered a default. If the Debtors were in default under the DIP Credit Agreement, no additional borrowings thereunder would be available until the default was waived or cured, and all obligations would become immediately due and payable. The DIP Credit Agreement provides for customary events of default, including a cross-event of default provision in respect of post-petition or unstayed indebtedness in excess of $500,000. The DIP Agent is represented by: Joseph Smolinsky, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Fax: (212) 310-8007 E-mail: joseph.smolinsky@weil.com The Commitment Parties are represented by: Ira Dizengoff, Esq. Kristine Manoukian, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, NY 10036 - and - James Savin, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Avenue, N.W. Washington, DC 20036 A copy of the Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated February 8, 2016, among Walter Energy, Inc., as borrower, each domestic subsidiary of Walter Energy, Inc., as guarantors, the lenders party thereto, and Citibank, N.A., as administrative agent, escrow agent and collateral agent, is available at http://is.gd/XjNDqi About Walter Energy Walter Energy -- http://www.walterenergy.com/-- is a publicly traded "pure-play" metallurgical coal producer for the global steel industry with strategic access to steel producers in Europe, Asia and South America. The Company also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas. Walter Energy employs approximately 2,700 employees, with operations in the United States, Canada and the United Kingdom. For the year ended Dec. 31, 2014, the Company reported a net loss of $471 million following a net loss of $359 million in 2013. Walter Energy, Inc., and its affiliates sought Chapter 11 protection (Bankr. N.D. Ala. Lead Case No. 15-02741) in Birmingham, Alabama on July 15, 2015, after signing a restructuring support agreement with first-lien lenders. Walter Energy disclosed total assets of $5.2 billion and total debt of $5 billion as of March 31, 2015. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison as counsel; Bradley Arant Boult Cummings LLP, as co-counsel; Ogletree Deakins LLP, as labor and employment counsel; Maynard, Cooper & Gale, P.C., as special counsel; Blackstone Advisory Services, L.P., as investment banker; AlixPartners, LLP, as financial advisor, and Kurtzman Carson Consultants LLC, as claims and noticing agent. The Bankruptcy Administrator for the Northern District of Alabama appointed an Official Committee of Unsecured Creditors and an Official Committee of Retirees. The Creditors Committee tapped Morrison & Foerster LLP and Christian & Small LLP as attorneys. The Retiree Committee retained Adams & Reese LLP and Jenner & Block LLP as attorneys. The informal group of certain unaffiliated First Lien Lenders and First Lien Noteholders (the "Steering Committee") retained Akin, Gump, Strauss, Hauer and Feld LLP as legal advisor, and Lazard Freres & Co. LLC as financial advisor. WALTER ENERGY: G1, Susquehanna Report 0.7% Equity Stake ------------------------------------------------------- G1 Execution Services, LLC; Susquehanna Fundamental Investments, LLC; Susquehanna Capital Group; and Susquehanna Securities filed a Schedule 13G (Amendment No. 1) with the Securities and Exchange Commission to disclose their ownership of shares of Walter Energy, Inc. Common Stock, $0.01 par value per share, as of Dec. 31, 2015. G1 Execution Services, LLC, Susquehanna Capital Group and Susquehanna Securities are affiliated independent broker-dealers which, together with Susquehanna Fundamental Investments, LLC, may be deemed a group. Specifically, G1 et al. disclosed that they may be deemed to beneficially own in the aggregate amount 593,880 shares or roughly 0.7% of the Common Stock. G1 may be reached at: Brian Sopinsky, Secretary G1 EXECUTION SERVICES, LLC 440 S. LaSalle Street, Suite 3030 Chicago, IL 60605 Susquehanna may be reached at: Brian Sopinsky, Secretary SUSQUEHANNA SECURITIES 401 E. City Avenue, Suite 220 Bala Cynwyd, PA 19004 About Walter Energy Walter Energy -- http://www.walterenergy.com/-- is a publicly traded "pure-play" metallurgical coal producer for the global steel industry with strategic access to steel producers in Europe, Asia and South America. The Company also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas. Walter Energy employs approximately 2,700 employees, with operations in the United States, Canada and the United Kingdom. For the year ended Dec. 31, 2014, the Company reported a net loss of $471 million following a net loss of $359 million in 2013. Walter Energy, Inc., and its affiliates sought Chapter 11 protection (Bankr. N.D. Ala. Lead Case No. 15-02741) in Birmingham, Alabama on July 15, 2015, after signing a restructuring support agreement with first-lien lenders. Walter Energy disclosed total assets of $5.2 billion and total debt of $5 billion as of March 31, 2015. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison as counsel; Bradley Arant Boult Cummings LLP, as co-counsel; Ogletree Deakins LLP, as labor and employment counsel; Maynard, Cooper & Gale, P.C., as special counsel; Blackstone Advisory Services, L.P., as investment banker; AlixPartners, LLP, as financial advisor, and Kurtzman Carson Consultants LLC, as claims and noticing agent. The Bankruptcy Administrator for the Northern District of Alabama appointed an Official Committee of Unsecured Creditors and an Official Committee of Retirees. The Creditors Committee tapped Morrison & Foerster LLP and Christian & Small LLP as attorneys. The Retiree Committee retained Adams & Reese LLP and Jenner & Block LLP as attorneys. The informal group of certain unaffiliated First Lien Lenders and First Lien Noteholders (the "Steering Committee") retained Akin, Gump, Strauss, Hauer and Feld LLP as legal advisor, and Lazard Freres & Co. LLC as financial advisor. Citibank, N.A., the administrative agent and escrow agent under a $50 million DIP facility entered into in February 2016, is represented by Joseph Smolinsky, Esq., at Weil, Gotshal & Manges LLP. The Commitment Parties are represented by Ira Dizengoff, Esq., Kristine Manoukian, Esq. and James Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. WESTMORELAND COAL: Boston Partners Holds 7% Stake as of Dec. 31 --------------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, Boston Partners reported that as of Dec. 31, 2015, it beneficially owns 1,270,558 shares of common stock of Westmoreland Coal Co. representing 7.03 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/x6Lj8r About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal Company reported a net loss applicable to common shareholders of $173 million in 2014, a net loss applicable to common shareholders of $6.05 million in 2013 and a net loss applicable to common shareholders of $8.58 million in 2012. As of Sept. 30, 2015, the Company had $1.72 billion in total assets, $2.21 billion in total liabilities and a $489 million total deficit. * * * As reported by the TCR on Nov. 20, 2014, Standard & Poor's Rating Services raised its corporate credit rating on Westmoreland Coal Co. one-notch to 'B' from 'B-'. "The stable outlook is supported by Westmoreland's committed sales position over the next year, which should result in stable cash flows," said Standard & Poor's credit analyst Chiza Vitta. Moody's upgraded the corporate family rating (CFR) of Westmoreland Coal Company to 'B3' from 'Caa1', and assigned 'Caa1' rating to the company's proposed new $300 million First Lien Term Loan, the TCR reported on Nov. 20, 2014. The upgrade of the CFR reflects the company's successful integration of the Canadian mines acquired in April 2014, and Moody's expectation that the company's Debt/ EBITDA will track at around 5x in 2015 and 2016 and that the company will be break-even to modestly free cash flow positive over the same time period. WET SEAL: Hudson Bay Holds 9.45% of Common Shares ------------------------------------------------- Hudson Bay Capital Management LP disclosed in its Schedule 13G/A (Amendment No. 1) filed with the Securities and Exchange Commission that it may be deemed to beneficially own 8,804,348 shares or roughly 9.45% of Seal123, Inc. (f/k/a The Wet Seal, Inc.) common stock as of Dec. 31, 2015. The shares are issuable upon exercise of warrants, Hudson Bay said. Hudson Bay may be reached at: Sander Gerber, Esq. HUDSON BAY CAPITAL MANAGEMENT LP 777 Third Avenue, 30th Floor New York, NY 10017 About Wet Seal The Wet Seal, Inc., and three affiliates, The Wet Seal Retail, Inc., Wet Seal Catalog, Inc., and Wet Seal GC, LLC, filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 15-10081 to 15-10084) on Jan. 15, 2015. The Debtors are a national multi-channel retailer selling fashion apparel and accessory items designed for female customers aged 13 to 24 years old. The Wet Seal, Inc., disclosed $215,254,952 in assets and $60,598,968 in liabilities as of the Chapter 11 filing. The Hon. Christopher S. Sontchi presides over the jointly administered cases. Maris J. Kandestin, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, LLP; Lee R. Bogdanoff, Esq., Michael L. Tuchin, Esq., David M. Guess, Esq., and Jonathan M. Weiss, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP; and Paul Hastings LLP, serve as the Debtors' Chapter 11 counsel. FTI Consulting serves as the Debtors' restructuring advisor. The Debtors' investment banker is Houlihan Lokey. The Debtors tapped Donlin, Recano & Co., Inc. as claims and noticing agent. The petitions were signed by Thomas R. Hillebrandt, interim chief financial officer. B. Riley, the original DIP lender and plan sponsor, is represented by Van C. Durrer, II, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP. Versa Capital Management, LLC, and its affiliate, Mador Lending, LLC, which was selected as the successful bidder at an auction, was advised by Greenberg Traurig LLP, Klehr Harrison Harvey Branzburg LLP, and KPMG LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors. The Committee retained Pachulski Stang Ziehl & Jones LLP as its counsel and Province Inc. as its financial advisor. The Wet Seal, Inc., changed its name to "Seal123, Inc." on April 17, 2015, in accordance with the Asset Purchase Agreement with Mador Lending, LLC, an affiliate of Versa Capital Management, LLC as buyer. On October 30, 2015, the Bankruptcy Court entered an order confirming the First Amended Joint Plan of Liquidation. The Plan was co-proposed by the Debtors and the Creditors Committee. The Plan was originally filed with the Bankruptcy Court on August 10, 2015 and subsequently amended on September 8, 2015. The Plan became effective on December 31, 2015. WORCESTER RE INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Worcester RE Investments LLC 250 Commercial Street, Ste 400 Worcester, MA 01608 Case No.: 16-40203 Chapter 11 Petition Date: February 12, 2016 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Hon. Melvin S. Hoffman Debtor's Counsel: James P. Ehrhard, Esq. EHRHARD & ASSOCIATES, P.C. 250 Commercial Street, Suite 410 Worcester, MA 01608 Tel: 508-791-8411 Email: ehrhard@ehrhardlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Felicio Lana, manager. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. ZLOOP INC: Chapter 11 Plan Proposes Sale of Assets -------------------------------------------------- Zloop, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Joint Chapter 11 Plan of Liquidation and accompanying disclosure statement, which contemplate the sale of substantially all of the Debtors's assets, before, on or following the Effective Date. Since November of 2015, the Debtors' Chief Restructuring Officer has been working to ready the Debtors and their assets for Sale as a going concern in order to maximize value for the Debtors' Estates. The Plan is in furtherance of the CRO's Sale process. The Debtors contemplate that substantially all of their assets located in Hickory, North Carolina, will be sold under the Plan, but the CRO, on behalf of the Debtors, reserves the right to file one or more motions to establish Sale procedures for an auction, to name a stalking horse and grant a stalking horse standard bidder protections and to seek the entry of an order approving a Sale other than the Confirmation Order. Further, the Plan contemplates that the Estates' Causes of Action will all be preserved and vest in a Liquidating Trust, except those that may be the subject of a judgment or release, approved by the Bankruptcy Court prior to the Effective Date. The Liquidating Trustee will continue to investigate the Causes of Action and prosecute the Estates' Causes of Action. The Debtors propose the following confirmation schedule: March 30, 2016: Disclosure Statement and Solicitation Procedures Motion March 30, 2016: Record date for determination of Claim or Interest Holder status April 4, 2016: Date by which service of the Solicitation Packages and notice of the Confirmation Hearing will commence April 27, 2016: Deadline for voting on Plan April 29, 2016: Deadline for submission of the tabulation report May 4, 2016: Deadline for filing objections to Plan confirmation May 13, 2016: Deadline for filing the Debtors' brief in support of the Plan and consolidated reply to any objections to the Plan May 20, 2016: Confirmation Hearing date A full-text copy of the Disclosure Statement dated Feb. 10, 2016, is available at http://bankrupt.com/misc/ZLOOPds0210.pdf The Debtors are represented by Stuart M. Brown, Esq., R. Craig Martin, Esq., Daniel N. Brogan, Esq., and Kaitlin M. Edelman, Esq., at DLA Piper LLP (US), in Wilmington, Delaware. About ZLOOP, Inc. ZLOOP, Inc., and two affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 15-11660) on Aug. 9, 2015. ZLOOP operates a proprietary, state of the art, 100% landfill free eWaste recycling company headquartered in Hickory, North Carolina. The Debtors tapped DLA Piper LLP as counsel. As of the Petition Date, the Debtors' unaudited consolidated balance sheet reflect total assets of approximately $25 million, including the land and improvements, but excluding certain commodity inventories that are the output of eWaste recycling, and total liabilities of approximately $32 million. On Sept. 2, 2015, the U.S. trustee overseeing the Debtors' Chapter 11 cases appointed Recycling Equipment Inc., E Recycling Systems LLC and Carolina Metals Group to serve on the official committee of unsecured creditors. The committee is represented by Cole Schotz P.C. [*] Moody's Takes Actions on $434.8MM Alt-A & Option ARM Loans -------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of nine tranches and downgraded the ratings of 14 tranches from seven transactions, backed by Alt-A and Option ARM RMBS loans, issued by multiple issuers. Complete rating actions are: Issuer: Citigroup Mortgage Loan Trust, Series 2004-HYB4 Cl. A-A, Downgraded to Ba2 (sf); previously on May 23, 2013, Downgraded to Ba1 (sf) Cl. A-X, Downgraded to Ba2 (sf); previously on May 23, 2013, Downgraded to Ba1 (sf) Issuer: CSAB Mortgage-Backed Trust Series 2007-1 Cl. 1-A-1A, Downgraded to Ca (sf); previously on Nov. 19, 2010, Downgraded to Caa3 (sf) Cl. 1-A-2, Downgraded to Ca (sf); previously on Nov. 19, 2010, Downgraded to Caa3 (sf) Cl. 1-A-3A, Downgraded to Ca (sf); previously on Nov. 19, 2010, Downgraded to Caa3 (sf) Cl. 1-A-6A, Downgraded to Ca (sf); previously on Nov. 19, 2010, Downgraded to Caa3 (sf) Issuer: MASTR Seasoned Securitization Trust 2005-2 Cl. 5-A-1, Downgraded to Caa1 (sf); previously on April 10, 2013, Affirmed B2 (sf) Issuer: Structured Asset Mortgage Investments II Trust 2004-AR8 Cl. A-1, Downgraded to Baa3 (sf); previously on Aug. 1, 2013, Downgraded to Baa1 (sf) Cl. A-2A, Downgraded to Baa3 (sf); previously on Aug. 1, 2013, Downgraded to Baa1 (sf) Cl. A-2B, Downgraded to Baa3 (sf); previously on Aug. 1, 2013, Downgraded to Baa1 (sf) Cl. M, Downgraded to Ba3 (sf); previously on July 5, 2012, Downgraded to Baa3 (sf) Cl. X-1, Downgraded to B3 (sf); previously on July 5, 2012, Downgraded to B2 (sf) Cl. X-2, Downgraded to Baa3 (sf); previously on Aug. 1, 2013, Downgraded to Baa1 (sf) Cl. B-1, Downgraded to Caa3 (sf); previously on July 5, 2012, Downgraded to Caa1 (sf) Issuer: Structured Asset Securities Corp Trust 2005-7XS Cl. 1-A3, Upgraded to Ba1 (sf); previously on June 26, 2014, Upgraded to Ba3 (sf) Underlying Rating: Upgraded to Ba1 (sf); previously on June 26, 2014 Upgraded to Ba3 (sf) Financial Guarantor: Ambac Assurance Corporation (Segregated Account - Unrated) Cl. 1-A4A, Upgraded to Baa3 (sf); previously on June 26, 2014, Upgraded to Ba2 (sf) Underlying Rating: Upgraded to Baa3 (sf); previously on June 26, 2014 Upgraded to Ba2 (sf) Financial Guarantor: Ambac Assurance Corporation (Segregated Account - Unrated) Cl. 1-A4B, Upgraded to Baa3 (sf); previously on June 26, 2014, Upgraded to Ba2 (sf) Cl. 2-A1A, Upgraded to B1 (sf); previously on Aug. 27, 2012, Upgraded to B3 (sf) Cl. 2-A1B, Upgraded to Caa1 (sf); previously on June 26, 2014, Upgraded to Caa3 (sf) Issuer: WaMu Mortgage Pass-Through Certificates, Series 2006-AR1 Cl. 2A-1B, Upgraded to B3 (sf); previously on June 20, 2014, Upgraded to Caa2 (sf) Issuer: WaMu Mortgage Pass-Through Certificates, Series 2006-AR9 Cl. 1X-PPP, Upgraded to Caa2 (sf); previously on March 13, 2015, Upgraded to Caa3 (sf) Cl. 2A, Upgraded to B1 (sf); previously on March 13, 2015, Upgraded to Caa1 (sf) Cl. 2X-PPP, Upgraded to Caa2 (sf); previously on March 13, 2015, Upgraded to Caa3 (sf) RATINGS RATIONALE The rating actions are a result of the recent performance of the underlying pools and reflect Moody's updated loss expectation on the pools. The rating upgrades are a result of the improving performance of the related pools and an increase in credit enhancement available to the bonds. The rating downgrades are due to the weaker performance of the underlying collateral and the erosion of enhancement available to the bonds. The principal methodology used in these ratings was "US RMBS Surveillance Methodology" published in November 2013. Factors that would lead to an upgrade or downgrade of the rating: Ratings in the US RMBS sector remain exposed to the high level of macroeconomic uncertainty, and in particular the unemployment rate. The unemployment rate fell to 4.9% in January 2016 from 5.7% in January 2015. Moody's forecasts an unemployment central range of 4.5% to 5.5% for the 2016 year. Deviations from this central scenario could lead to rating actions in the sector. House prices are another key driver of US RMBS performance. Moody's expects house prices to continue to rise in 2016. Lower increases than Moody's expects or decreases could lead to negative rating actions. Finally, performance of RMBS continues to remain highly dependent on servicer procedures. Any change resulting from servicing transfers or other policy or regulatory change can impact the performance of these transactions. [^] Large Companies with Insolvent Balance Sheet ------------------------------------------------ Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 108.3 (42.6) (41.9) ABSOLUTE SOFTWRE ALSWF US 108.3 (42.6) (41.9) ADV MICRO DEVICE AMD* MM 3,109.0 (412.0) 917.0 ADVENT SOFTWARE ADVS US 424.8 (50.1) (110.8) AEROJET ROCKETDY GCY TH 1,957.4 (107.2) 96.3 AEROJET ROCKETDY GCY GR 1,957.4 (107.2) 96.3 AEROJET ROCKETDY AJRD US 1,957.4 (107.2) 96.3 AIR CANADA AC CN 12,755.0 (51.0) 531.0 AIR CANADA ACDVF US 12,755.0 (51.0) 531.0 AIR CANADA ACEUR EU 12,755.0 (51.0) 531.0 AIR CANADA ADH2 TH 12,755.0 (51.0) 531.0 AIR CANADA ADH2 GR 12,755.0 (51.0) 531.0 AK STEEL HLDG AKS* MM 4,084.4 (599.7) 763.6 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ANGIE'S LIST INC ANGI US 173.2 (19.8) (33.1) ANGIE'S LIST INC 8AL GR 173.2 (19.8) (33.1) ANGIE'S LIST INC 8AL TH 173.2 (19.8) (33.1) ARCH COAL INC ACIIQ* MM 5,848.0 (605.4) 824.1 ARIAD PHARM ARIA SW 576.1 (49.7) 213.9 ARIAD PHARM APS GR 576.1 (49.7) 213.9 ARIAD PHARM APS TH 576.1 (49.7) 213.9 ARIAD PHARM ARIAEUR EU 576.1 (49.7) 213.9 ARIAD PHARM ARIA US 576.1 (49.7) 213.9 ARIAD PHARM ARIACHF EU 576.1 (49.7) 213.9 ASPEN TECHNOLOGY AZPN US 276.4 (22.2) (4.4) ASPEN TECHNOLOGY AST GR 276.4 (22.2) (4.4) AUTOZONE INC AZO US 8,217.5 (1,778.1) (721.4) AUTOZONE INC AZ5 QT 8,217.5 (1,778.1) (721.4) AUTOZONE INC AZ5 TH 8,217.5 (1,778.1) (721.4) AUTOZONE INC AZ5 GR 8,217.5 (1,778.1) (721.4) AUTOZONE INC AZOEUR EU 8,217.5 (1,778.1) (721.4) AVID TECHNOLOGY AVID US 264.2 (327.6) (158.4) AVID TECHNOLOGY AVD GR 264.2 (327.6) (158.4) AVINTIV SPECIALT POLGA US 1,991.4 (3.9) 322.1 AVON - BDR AVON34 BZ 3,879.5 (1,056.4) 146.0 AVON PRODUCTS AVP* MM 3,879.5 (1,056.4) 146.0 AVON PRODUCTS AVP US 3,879.5 (1,056.4) 146.0 AVON PRODUCTS AVP CI 3,879.5 (1,056.4) 146.0 BARRACUDA NETWOR 7BM GR 429.9 (30.5) (27.7) BARRACUDA NETWOR CUDAEUR EU 429.9 (30.5) (27.7) BARRACUDA NETWOR CUDA US 429.9 (30.5) (27.7) BENEFITFOCUS INC BTF GR 172.4 (8.7) 28.3 BENEFITFOCUS INC BNFT US 172.4 (8.7) 28.3 BERRY PLASTICS G BERY US 7,710.0 (67.0) 728.0 BERRY PLASTICS G BP0 GR 7,710.0 (67.0) 728.0 BLUE BIRD CORP 1291067D US 251.0 (121.5) 1.5 BLUE BIRD CORP BLBD US 251.0 (121.5) 1.5 BLUE BUFFALO PET B6B GR 479.1 (2.7) 290.6 BLUE BUFFALO PET B6B TH 479.1 (2.7) 290.6 BLUE BUFFALO PET BUFFEUR EU 479.1 (2.7) 290.6 BLUE BUFFALO PET BUFF US 479.1 (2.7) 290.6 BOMBARDIER INC-B BBDBN MM 23,863.0 (3,660.0) 1,076.0 BOMBARDIER-B OLD BBDYB BB 23,863.0 (3,660.0) 1,076.0 BOMBARDIER-B W/I BBD/W CN 23,863.0 (3,660.0) 1,076.0 BRINKER INTL EAT US 1,579.9 (164.9) (195.1) BRINKER INTL BKJ GR 1,579.9 (164.9) (195.1) BUFFALO COAL COR BUC SJ 54.9 (10.1) (4.5) BURLINGTON STORE BUI GR 2,805.3 (121.9) 112.6 BURLINGTON STORE BURL US 2,805.3 (121.9) 112.6 CABLEVISION SY-A CVC US 6,745.7 (4,957.7) 39.4 CABLEVISION SY-A CVY TH 6,745.7 (4,957.7) 39.4 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FREESCALE SEMICO FSLEUR EU 3,159.0 (3,079.0) 1,264.0 FREESCALE SEMICO 1FS QT 3,159.0 (3,079.0) 1,264.0 FREESCALE SEMICO FSL US 3,159.0 (3,079.0) 1,264.0 FREESCALE SEMICO 1FS TH 3,159.0 (3,079.0) 1,264.0 GAMING AND LEISU GLPI US 2,516.1 (236.6) (98.2) GAMING AND LEISU 2GL GR 2,516.1 (236.6) (98.2) GARDA WRLD -CL A GW CN 1,828.2 (378.3) 124.2 GARTNER INC GGRA GR 2,091.5 (159.6) (173.7) GARTNER INC IT US 2,091.5 (159.6) (173.7) GARTNER INC IT* MM 2,091.5 (159.6) (173.7) GCP APPLIED TECH 43G GR 961.6 (224.1) 217.6 GCP APPLIED TECH GCP US 961.6 (224.1) 217.6 GENTIVA HEALTH GTIV US 1,225.2 (285.2) 130.0 GENTIVA HEALTH GHT GR 1,225.2 (285.2) 130.0 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GDRZF US 15.0 (32.3) (42.5) GOLD RESERVE INC GRZ CN 15.0 (32.3) (42.5) GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 GYMBOREE CORP/TH GYMB US 1,242.0 (386.5) 30.8 H&R BLOCK INC HRB US 2,289.9 (27.2) 160.2 H&R BLOCK INC HRBEUR EU 2,289.9 (27.2) 160.2 H&R BLOCK INC HRB GR 2,289.9 (27.2) 160.2 H&R BLOCK INC HRB TH 2,289.9 (27.2) 160.2 HCA HOLDINGS INC 2BH TH 32,744.0 (6,046.0) 3,716.0 HCA HOLDINGS INC 2BH GR 32,744.0 (6,046.0) 3,716.0 HCA HOLDINGS INC HCAEUR EU 32,744.0 (6,046.0) 3,716.0 HCA HOLDINGS INC HCA US 32,744.0 (6,046.0) 3,716.0 HD SUPPLY HOLDIN 5HD GR 5,486.0 (126.0) 1,101.0 HD SUPPLY HOLDIN HDS US 5,486.0 (126.0) 1,101.0 HECKMANN CORP-U HEK/U US 582.6 (4.9) 50.0 HERBALIFE LTD HOO GR 2,421.5 (130.7) 461.6 HERBALIFE LTD HLFEUR EU 2,421.5 (130.7) 461.6 HERBALIFE LTD HLF US 2,421.5 (130.7) 461.6 HOVNANIAN-A-WI HOV-W US 2,602.3 (128.1) 1,612.1 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) IDEXX LABS IDXX US 1,475.0 (84.0) (35.1) IDEXX LABS IX1 TH 1,475.0 (84.0) (35.1) IDEXX LABS IX1 GR 1,475.0 (84.0) (35.1) IMMUNOGEN INC IMU TH 251.6 (16.7) 179.3 IMMUNOGEN INC IMU GR 251.6 (16.7) 179.3 IMMUNOGEN INC IMGN US 251.6 (16.7) 179.3 INFOR US INC LWSN US 6,778.1 (460.0) (305.9) INNOVIVA INC INVA US 424.1 (342.6) 201.7 INNOVIVA INC HVE GR 424.1 (342.6) 201.7 INSTRUCTURE INC 1IN GR 64.2 (15.3) (15.5) INSTRUCTURE INC INST US 64.2 (15.3) (15.5) INTERNATIONAL WI ITWG US 345.4 (9.7) 99.8 INVENTIV HEALTH VTIV US 2,205.7 (699.2) 112.4 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 J CREW GROUP INC JCG US 1,627.1 (759.0) 111.7 JUST ENERGY GROU JE CN 1,274.3 (673.6) (97.6) JUST ENERGY GROU 1JE GR 1,274.3 (673.6) (97.6) JUST ENERGY GROU JE US 1,274.3 (673.6) (97.6) KEMPHARM INC KMPH US 61.4 (5.7) 52.8 KEMPHARM INC 1GD GR 61.4 (5.7) 52.8 L BRANDS INC LTD GR 7,969.0 (657.0) 1,836.0 L BRANDS INC LTD TH 7,969.0 (657.0) 1,836.0 L BRANDS INC LB* MM 7,969.0 (657.0) 1,836.0 L BRANDS INC LBEUR EU 7,969.0 (657.0) 1,836.0 L BRANDS INC LB US 7,969.0 (657.0) 1,836.0 LEAP WIRELESS LWI GR 4,662.9 (125.1) 346.9 LEAP WIRELESS LWI TH 4,662.9 (125.1) 346.9 LEAP WIRELESS LEAP US 4,662.9 (125.1) 346.9 LORILLARD INC LLV GR 4,154.0 (2,134.0) 1,135.0 LORILLARD INC LO US 4,154.0 (2,134.0) 1,135.0 LORILLARD INC LLV TH 4,154.0 (2,134.0) 1,135.0 MADISON-A/NEW-WI MSGN-W US 911.0 (1,213.9) 103.4 MAJESCOR RESOURC MJXEUR EU 0.0 (0.1) (0.1) MALIBU BOATS-A MBUU US 199.9 (1.4) 13.7 MALIBU BOATS-A M05 GR 199.9 (1.4) 13.7 MANNKIND CORP MNKD IT 278.0 (124.6) (196.1) MARRIOTT INTL-A MAQ QT 6,153.0 (3,589.0) (1,786.0) MARRIOTT INTL-A MAR US 6,153.0 (3,589.0) (1,786.0) MARRIOTT INTL-A MAQ TH 6,153.0 (3,589.0) (1,786.0) MARRIOTT INTL-A MAQ GR 6,153.0 (3,589.0) (1,786.0) MDC COMM-W/I MDZ/W CN 1,617.2 (376.7) (326.5) MDC PARTNERS-A MDCA US 1,617.2 (376.7) (326.5) MDC PARTNERS-A MDZ/A CN 1,617.2 (376.7) (326.5) MDC PARTNERS-A MD7A GR 1,617.2 (376.7) (326.5) MDC PARTNERS-EXC MDZ/N CN 1,617.2 (376.7) (326.5) MEAD JOHNSON MJN US 3,998.1 (592.5) 1,349.1 MEAD JOHNSON 0MJA TH 3,998.1 (592.5) 1,349.1 MEAD JOHNSON 0MJA GR 3,998.1 (592.5) 1,349.1 MEAD JOHNSON MJNEUR EU 3,998.1 (592.5) 1,349.1 MERITOR INC AID1 GR 2,050.0 (653.0) 118.0 MERITOR INC MTOR US 2,050.0 (653.0) 118.0 MERRIMACK PHARMA MACK US 102.7 (140.7) (24.3) MERRIMACK PHARMA MP6 GR 102.7 (140.7) (24.3) MICHAELS COS INC MIK US 2,083.1 (1,909.9) 585.9 MICHAELS COS INC MIM GR 2,083.1 (1,909.9) 585.9 MIDSTATES PETROL MPO1EUR EU 1,298.1 (816.0) 96.2 MONEYGRAM INTERN MGI US 4,505.2 (222.8) (19.0) MOODY'S CORP MCO US 5,123.4 (333.0) 2,024.6 MOODY'S CORP DUT TH 5,123.4 (333.0) 2,024.6 MOODY'S CORP MCOEUR EU 5,123.4 (333.0) 2,024.6 MOODY'S CORP DUT GR 5,123.4 (333.0) 2,024.6 MOTOROLA SOLUTIO MTLA TH 8,086.0 (298.0) 2,758.0 MOTOROLA SOLUTIO MSI US 8,086.0 (298.0) 2,758.0 MOTOROLA SOLUTIO MTLA GR 8,086.0 (298.0) 2,758.0 MOTOROLA SOLUTIO MOT TE 8,086.0 (298.0) 2,758.0 MPG OFFICE TRUST 1052394D US 1,280.0 (437.3) - MSG NETWORKS- A 1M4 GR 911.0 (1,213.9) 103.4 MSG NETWORKS- A 1M4 TH 911.0 (1,213.9) 103.4 MSG NETWORKS- A MSGN US 911.0 (1,213.9) 103.4 NATHANS FAMOUS NFA GR 81.0 (65.2) 57.4 NATHANS FAMOUS NATH US 81.0 (65.2) 57.4 NATIONAL CINEMED NCMI US 1,006.2 (228.3) 65.4 NATIONAL CINEMED XWM GR 1,006.2 (228.3) 65.4 NAVIDEA BIOPHARM NAVB IT 17.5 (51.8) 8.7 NAVISTAR INTL IHR GR 6,692.0 (5,160.0) 834.0 NAVISTAR INTL IHR TH 6,692.0 (5,160.0) 834.0 NAVISTAR INTL NAV US 6,692.0 (5,160.0) 834.0 NEW ENG RLTY-LP NEN US 202.4 (30.1) - NTELOS HOLDINGS NTLS US 668.4 (22.1) 150.8 OMEROS CORP OMER US 41.4 (9.0) 17.2 OMEROS CORP OMEREUR EU 41.4 (9.0) 17.2 OMEROS CORP 3O8 TH 41.4 (9.0) 17.2 OMEROS CORP 3O8 GR 41.4 (9.0) 17.2 OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) OUTERWALL INC OUTR US 1,366.1 (22.1) 43.2 OUTERWALL INC CS5 GR 1,366.1 (22.1) 43.2 PALM INC PALM US 1,007.2 (6.2) 141.7 PBF LOGISTICS LP PBFX US 432.7 (191.5) 27.8 PBF LOGISTICS LP 11P GR 432.7 (191.5) 27.8 PHILIP MORRIS IN PMI1 IX 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PMI EB 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN 4I1 GR 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PM1 TE 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PM FP 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN 4I1 TH 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PM1CHF EU 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PMI SW 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PM1EUR EU 33,956.0 (11,476.0) 418.0 PHILIP MORRIS IN PM US 33,956.0 (11,476.0) 418.0 PLANET FITNESS-A PLNT US 701.1 (14.2) (1.2) PLANET FITNESS-A 3PL TH 701.1 (14.2) (1.2) PLANET FITNESS-A 3PL GR 701.1 (14.2) (1.2) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLY GEM HOLDINGS PG6 GR 1,311.1 (80.8) 264.6 PLY GEM HOLDINGS PGEM US 1,311.1 (80.8) 264.6 POLYMER GROUP-B POLGB US 1,991.4 (3.9) 322.1 PROTECTION ONE PONE US 562.9 (61.8) (7.6) PURETECH HEALTH PRTC LN - - - PURETECH HEALTH PRTCL IX - - - PURETECH HEALTH PRTCL PO - - - PURETECH HEALTH PRTCGBX EU - - - PURETECH HEALTH PRTCL B3 - - - PURETECH HEALTH PRTCL EB - - - QUALITY DISTRIBU QDZ GR 413.0 (22.9) 102.9 QUALITY DISTRIBU QLTY US 413.0 (22.9) 102.9 QUINTILES TRANSN QTS GR 3,926.3 (335.7) 817.8 QUINTILES TRANSN Q US 3,926.3 (335.7) 817.8 RAYONIER ADV RYAM US 1,288.0 (17.0) 195.0 RAYONIER ADV RYQ GR 1,288.0 (17.0) 195.0 REGAL ENTERTAI-A RGC US 2,409.1 (902.0) (133.8) REGAL ENTERTAI-A RGC* MM 2,409.1 (902.0) (133.8) REGAL ENTERTAI-A RETA GR 2,409.1 (902.0) (133.8) RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTECH NITROGEN RNF US 291.1 (138.0) 13.7 RENTECH NITROGEN 2RN GR 291.1 (138.0) 13.7 RENTPATH LLC PRM US 208.0 (91.7) 3.6 REVLON INC-A REV US 1,924.5 (623.3) 334.4 REVLON INC-A RVL1 GR 1,924.5 (623.3) 334.4 ROUNDY'S INC 4R1 GR 1,095.7 (92.7) 59.7 ROUNDY'S INC RNDY US 1,095.7 (92.7) 59.7 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL S7V GR 2,043.1 (321.7) 674.9 SALLY BEAUTY HOL SBH US 2,043.1 (321.7) 674.9 SANCHEZ ENERGY C SN* MM 1,532.2 (473.6) 171.9 SBA COMM CORP-A SBJ GR 7,396.8 (1,697.7) 46.6 SBA COMM CORP-A SBAC US 7,396.8 (1,697.7) 46.6 SBA COMM CORP-A SBJ TH 7,396.8 (1,697.7) 46.6 SBA COMM CORP-A SBACEUR EU 7,396.8 (1,697.7) 46.6 SCIENTIFIC GAM-A SGMS US 8,615.1 (980.8) 655.1 SCIENTIFIC GAM-A TJW GR 8,615.1 (980.8) 655.1 SEARS HOLDINGS SEE TH 12,769.0 (1,293.0) 701.0 SEARS HOLDINGS SEE GR 12,769.0 (1,293.0) 701.0 SEARS HOLDINGS SHLD US 12,769.0 (1,293.0) 701.0 SILVER SPRING NE SSNI US 529.8 (99.3) (31.1) SILVER SPRING NE 9SI GR 529.8 (99.3) (31.1) SILVER SPRING NE 9SI TH 529.8 (99.3) (31.1) SIRIUS XM CANADA XSR CN 311.1 (147.2) (189.0) SIRIUS XM HOLDIN SIRI US 8,046.7 (166.5) (1,934.6) SIRIUS XM HOLDIN RDO GR 8,046.7 (166.5) (1,934.6) SIRIUS XM HOLDIN RDO TH 8,046.7 (166.5) (1,934.6) SONIC CORP SONC US 616.1 (20.7) 7.4 SONIC CORP SO4 GR 616.1 (20.7) 7.4 SONIC CORP SONCEUR EU 616.1 (20.7) 7.4 SPORTSMAN'S WARE 06S GR 343.4 (14.0) 91.8 SPORTSMAN'S WARE SPWH US 343.4 (14.0) 91.8 SUN BIOPHARMA IN SNBP US - - - SUPERVALU INC SVU* MM 4,643.0 (444.0) 81.0 SUPERVALU INC SJ1 GR 4,643.0 (444.0) 81.0 SUPERVALU INC SJ1 TH 4,643.0 (444.0) 81.0 SUPERVALU INC SVU US 4,643.0 (444.0) 81.0 SYNERGY PHARMACE SGYPEUR EU 144.0 (27.1) 123.4 SYNERGY PHARMACE S90 GR 144.0 (27.1) 123.4 SYNERGY PHARMACE SGYP US 144.0 (27.1) 123.4 TRANSDIGM GROUP T7D GR 8,330.0 (964.3) 1,204.3 TRANSDIGM GROUP TDG US 8,330.0 (964.3) 1,204.3 TRANSDIGM GROUP TDGCHF EU 8,330.0 (964.3) 1,204.3 TRANSDIGM GROUP TDG SW 8,330.0 (964.3) 1,204.3 TRINET GROUP INC TNET US 1,609.6 (14.1) 54.4 TRINET GROUP INC TN3 TH 1,609.6 (14.1) 54.4 TRINET GROUP INC TNETEUR EU 1,609.6 (14.1) 54.4 TRINET GROUP INC TN3 GR 1,609.6 (14.1) 54.4 UNISYS CORP UIS1 SW 2,143.2 (1,378.6) 165.2 UNISYS CORP UISCHF EU 2,143.2 (1,378.6) 165.2 UNISYS CORP UIS US 2,143.2 (1,378.6) 165.2 UNISYS CORP USY1 GR 2,143.2 (1,378.6) 165.2 UNISYS CORP USY1 TH 2,143.2 (1,378.6) 165.2 UNISYS CORP UISEUR EU 2,143.2 (1,378.6) 165.2 VECTOR GROUP LTD VGR GR 1,398.8 (56.8) 457.4 VECTOR GROUP LTD VGR US 1,398.8 (56.8) 457.4 VENOCO INC VQ US 403.8 (354.3) 195.7 VERISIGN INC VRS GR 2,357.7 (1,070.4) 464.9 VERISIGN INC VRSN US 2,357.7 (1,070.4) 464.9 VERISIGN INC VRS TH 2,357.7 (1,070.4) 464.9 VERIZON TELEMATI HUTC US 110.2 (101.6) (113.8) VERSEON CORP VSN LN - - - VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) WEIGHT WATCHERS WW6 GR 1,395.2 (1,337.7) (193.6) WEIGHT WATCHERS WW6 QT 1,395.2 (1,337.7) (193.6) WEIGHT WATCHERS WTWEUR EU 1,395.2 (1,337.7) (193.6) WEIGHT WATCHERS WW6 TH 1,395.2 (1,337.7) (193.6) WEIGHT WATCHERS WTW US 1,395.2 (1,337.7) (193.6) WEST CORP WT2 GR 3,612.3 (552.1) 243.1 WEST CORP WSTC US 3,612.3 (552.1) 243.1 WESTERN REFINING WNRL US 412.0 (28.1) 66.3 WESTERN REFINING WR2 GR 412.0 (28.1) 66.3 WINGSTOP INC EWG GR 117.2 (14.3) 3.6 WINGSTOP INC WING US 117.2 (14.3) 3.6 WINMARK CORP WINA US 46.8 (36.0) 11.1 WINMARK CORP GBZ GR 46.8 (36.0) 11.1 WYNN RESORTS LTD WYR QT 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYNN* MM 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYNN SW 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYNNCHF EU 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYR GR 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYR TH 9,981.2 (60.8) 1,234.7 WYNN RESORTS LTD WYNN US 9,981.2 (60.8) 1,234.7 YRC WORLDWIDE IN YRCW US 1,894.6 (379.4) 160.9 YRC WORLDWIDE IN YRCWEUR EU 1,894.6 (379.4) 160.9 YRC WORLDWIDE IN YEL1 TH 1,894.6 (379.4) 160.9 YRC WORLDWIDE IN YEL1 GR 1,894.6 (379.4) 160.9 ********* 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 ***