/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/170809.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 9, 2017, Vol. 21, No. 220 Headlines 500 NORTH AVENUE: May Use Cash Collateral Through Oct. 31 69 NORTH FRANKLIN: Must be Represented by Licensed Legal Counsel 8 WEST 58TH: Court Approves Funding Agreement with 14 East ACADANIA MANAGEMENT: S. Goodman Appointed as PCO ADEPTUS HEALTH: 2nd Amended Plan Filed, Plan Disclosures Approved ADVANCED MICRO DEVICES: Mubadala Unloads 40M Shares for $525.6M AVAYA INC: Expects to Report $802M to $804M in Q3 Revenue AVAYA: Enters Into Plan Support Agreement, Seeks Chapter 11 Exit BANK OF ANGUILLA: Claims Not Barred by SC Statute of Limitations BEAR FIGUEROA: Wants to Access $2.17 Million of DIP Financing BLANN FARMS: Case Summary & 20 Largest Unsecured Creditors CAESARS ENTERTAINMENT: Reports $1.4B Net Loss in 2nd Quarter CALIFORNIA RESOURCES: OOGC Exec Powers Added to Board CLUBCORP CLUB: S&P Lowers CCR to 'B' on Leveraged Buyout COMMUNITY HEALTH: S&P Lowers CCR to 'B-', Outlook Stable CURTIS C. MAGLEBY: C. Magleby Denied Payment of Admin. Claims CYRUSONE INC: S&P Raises Corp Credit Rating to BB, Outlook Stable DIGICERT INC: S&P Puts 'B-' Issue Rating on CreditWatch Positive DRAGON JADE: Centurion ZD CPA Ltd. Casts Going Concern Doubt EARTH PRIDE: Aug. 14 Meeting Set to Form Creditors' Panel EDKEY INC: S&P Affirms 'BB' Ratings on 3 Bond Tranches ELECTRONIC SERVICE: Wants to Use Cash Collateral Until Sept. 20 ENGINEERED WELL SERVICE: Court Dismisses Appeal as Moot ERATH IRON: Cash Motion Denied for Want of Prosecution FACTORY SALES: Hires Stone Pigman as Counsel FAMOUS KOKO: Names Joyce Lindauer as Counsel FINTON CONSTRUCTION: Unsecureds to Recoup 100% Over 72 Months FIRST UNION BAPTIST: TD Stipulation Unenforceable Under NY Law GAINESVILLE HOSPITAL: Aug. 21 Hearing in Bond Validation Action GARRETSON TILE: Hires Lawrence Frank as Receivables Counsel GFI CONSULTANTS: Chapter 15 Case Summary GFI CONSULTANTS: Liquidator Seeks U.S. Recognition of UK Case GLOBAL PAYMENTS: Active Network Deal No Impact on Moody's Ba2 CFR GOODMAN AND DOMINGUEZ: Panel Taps KapilaMukamal as Advisors GREEN TERRACE: Hires Fowler White as Bankruptcy Counsel HARVEST CCP: Unsecureds to Recover 100% from Sale Proceeds HELICRAFT HOLDINGS: Gets Approval for Liquidating Plan HOWARD KERRY GARNER: Dist. Ct. Lacks Subject Matter Jurisdiction IHEARTCOMMUNICATIONS INC: Incurs $174M Net Loss in Second Quarter INFINITI HOMES: To Pay Wayne County in Full in 7 Years INSTITUCION SANTA ELENA: Hires ATM Accounting as Accountant INSTITUCION SANTA ELENA: Names Nydia Gonzalez Ortiz as Attorney INTERNET BRANDS: Moody's Cuts CFR to B3; Outlook Stable JZ SPORTS BAR: Hires Genova & Malin as Attorney KB HOME: S&P Raises CCR to 'B+' on Strong Financial Results KEELER'S MEDICAL: U.S. Trustee Directed to Appoint Ombudsman KNIGHT ENERGY: Files for Chapter 11 After Reaching Plan Deal KNIGHT ENERGY: Proposes Sept. 29 Claims Bar Date KNIGHT ENERGY: Proposes to Continue Payments to Insiders KNIGHT ENERGY: Proposes to Pay $1.41M to Critical Vendors MCCLATCHY CO: Posts $225.1 Million Revenues in Second Quarter MCK MILLENNIUM: A. Landis Not Disqualified as Tsakiris' Counsel MESOBLAST LIMITED: Ends Second Quarter With $45.7M in Cash MICRO HOLDING: S&P Affirms 'B' CCR on WebMD Deal, Outlook Stable MOLINA HEALTHCARE: Moody's Cuts Senior Unsecured Debt Rating to B2 MOLINA HEALTHCARE: S&P Alters Outlook to Neg. & Affirms 'BB' CCR MOUNTAIN THUNDER: Kona's Best Committed Breach of Contract MT. OLIVE BAPTIST: Hires Petrie & Pettit as Counsel NEOVASC INC: Will Host Q2 Conference Call on Aug. 10 NORTH AMERICAN GROUP: Has Until Oct. 16 to File Plan, Disclosures NORTHERN OIL: Bahram Akradi Has 9.81% Equity Stake as of July 21 NOVITEX ACQUISITION: S&P Affirms Then Withdraws 'B' CCR OAKFABCO INC: Court Approves Settlement Agreement with NERC OCEANFRONT HOSPITALITY: Case Summary & 20 Top Unsecured Creditors OIL PATCH TRANSPORTATION: Taps Hess Hopkins as Accountant OPT CO: U.S. Trustee Unable to Appoint Committee P.F. CHANG'S: S&P Affirms B- Corp Credit Rating, Outlook Negative PACIFIC DRILLING: Incurs $138.1 Million Net Loss in Second Quarter PALMDALE HILLS: Ct. Narrows Claims in Trustee's Suit v. SunCal Mngt PALMDALE HILLS: SCM Wins Partial Summary Judgment in Clawback Suit PETERSBURG, VA: S&P Revises Outlook on GO Bonds to Stable PF CHANG'S: Moody's Rates Proposed $325MM Senior Term Loan Ba3 PHIBRO ANIMAL: S&P Affirms Then Withdraws 'B+' Corp Credit Rating PHOTOMEDEX INC: Inks Two-Year Employment Agreement with CFO PLAIN LEASING: Wants to Continue Using Cash Until Oct. 31 PROJECT SILVERBACK: Moody's Assigns B3 Corporate Family Rating PROJECT SILVERBACK: S&P Gives B- CCR, Rates $265MM 1st Lien Debt B- PUERTO RICO: Committee Tasked to Conduct Debt Probe Appointed PUERTO RICO: Gibson Dunn Files Challenge to Oversight Board QUIZHPI CAB: Case Summary & Unsecured Creditor RAUL POSADA: Summary Judgment Bid in Clawback Suit Denied RESOLUTE ENERGY: Appoints Two New Directors to Board RESOLUTE ENERGY: Will Hold 'Say-on-Pay' Votes Annually ROBERT T WINZINGER: Case Summary & 20 Largest Unsecured Creditors RXI PHARMACEUTICALS: Has Until Jan 2018 to Regain Nasdaq Compliance SABBATICAL INC: U.S. Trustee Allowed to Appoint Chapter 11 Trustee SCRANTON, PA: S&P Hikes GO Debt Rating to BB+ on Improved Liquidity SHORB DCE: Wants to Obtain $1.7 Million in DIP Financing SIERRA HAMILTON: Moody's Withdraws 'C' Corporate Family Rating SOOUM CORP: Hall & Company Raises Going Concern Doubt SOURCEHOV LLC: S&P Raises Then Withdraws CCR Amid Exela Deal SUAREZ CORPORATION: Case Summary & Largest Unsecured Creditors SUAREZ CORPORATION: Files for Chapter 11 to Sell Assets TERRAVIA HOLDINGS: Ashby, Brown Rudnick Represent Noteholders TIFARO GROUP: EC Mansfield Wants to Use Capital One Cash Collateral UCP INC: S&P Raises Then Withdraws 'B' CCR Amid Century Deal VANGUARD NATURAL: Emerged From Bankruptcy Protection on Aug. 1 VITARGO GLOBAL: Wants to Use Cash Collateral Through Oct. 31 WALTER INVESTMENT: Moody's Cuts CFR to Caa3 on Restructuring Deal WESTMORELAND RESOURCE: Appoints Principal Accounting Officer WESTMORELAND RESOURCE: Chairman & 2 Directors Quit from Board [*] Moody's: Q2 US Speculative-Grade Default Rate on Downward Trend ********* 500 NORTH AVENUE: May Use Cash Collateral Through Oct. 31 --------------------------------------------------------- The Hon. Ann M. Nevins of the U.S. Bankruptcy Court for the District of Connecticut has entered a 19th interim order authorizing 500 North Avenue, LLC, to use cash collateral of Manual Moutinho, Trustee for Mark IV Construction Co Inc. 401(k) Savings Plan from Aug. 1, 2017, through Oct. 31, 2017. A further hearing on the Motion has been scheduled for Oct. 25, 2017, at 10:00 a.m. The Debtor may use cash collateral, including rental proceeds, which cash collateral may be subject to the liens of the Secured Creditor. In exchange for the preliminary use of cash collateral by the Debtor, and as adequate protection for the Secured Creditor's interests therein, the Secured Creditor is granted replacement and substitute liens in post-petition cash collateral, and the replacement liens will have the same validity, extent, and priority that the Secured Creditor possessed as to the liens on the Petition Date. It is the purpose and intent of the court order to allow the Debtor to use rents which may constitute cash collateral of the Secured Creditor and to provide the Secured Creditor with liens upon post-petition assets to the extent the Secured Creditor held valid liens as of the Petition Date, so that its interests therein will not be diminished during the pendency of the Chapter 11 case. The secured position of the Secured Creditor that existed on the Petition Date may not improve by virtue of the granting of the replacement liens. A copy of the 9th Interim Order is available at: http://bankrupt.com/misc/ctb14-31094-500.pdf About 500 North Avenue 500 North Avenue, LLC, and Long Brook Station, LLC, filed Chapter 11 petitions (Bankr. D. Conn. Case Nos. 14-31094 and 14-31095) on June 6, 2014. The petitions were signed by Joseph Regensburger, member. At the time of filing, 500 North Avenue estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities; and Long Brook Station estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The cases are assigned to Judge Julie A. Manning. The Debtors are represented by Douglas S. Skalka, Esq., at Neubert, Pepe, and Monteith, P.C. 69 NORTH FRANKLIN: Must be Represented by Licensed Legal Counsel ---------------------------------------------------------------- Debtor 69 North Franklin Turnpike, LLC, appeals from the District Court's dismissal of its pro se Notice of Appeal from two decisions of the Bankruptcy Court. The District Court concluded that the LLC could not proceed on its appeal because it was not represented by licensed legal counsel. The U.S. Court of Appeals, Third Circuit affirms the District Court's decision. On appeal, the LLC argues that the District Court erred in dismissing the appeal and not giving it an opportunity to cure the deficiency. The Third Circuit disagrees. The District Court concluded that dismissal was appropriate because the Notice of Appeal was filed by Grace S. Wong, a non-attorney. It is well established that a corporate entity such as a limited liability company may not proceed pro se and must be represented by legal counsel. The LLC does not escape this rule merely because Wong is its managing member. The LLC next argues that it was entitled to an opportunity to cure the deficiency. Several Circuit Courts of Appeals have observed that a pro se notice of appeal may proceed where the corporate entity immediately retains counsel who promptly enters an appearance and undertakes the representation. This case is plainly distinguishable, however, as Wong evinced a "clear[ ] intent[ion]" to proceed pro se. Despite multiple warnings about representing the company or filing on its behalf, Wong purported to represent the LLC both before the District Court and continued to do so before the Third Circuit. In such circumstances, permitting the LLC an opportunity to cure "would eviscerate the requirement that corporations and other entities be represented by counsel." The District Court, therefore, did not err in dismissing the Notice of Appeal without an opportunity to cure. The appeals case is 69 NORTH FRANKLIN TURNPIKE, LLC GRACE S. WONG, Member-69 North Franklin Turnpike, LLC, Appellant, No. 16-1383 (3rd. Cir.). A full-text copy of the Third Circuit's Opinion dated August 1, 2017, is available at https://is.gd/0Q6vCZ from Leagle.com. 8 WEST 58TH: Court Approves Funding Agreement with 14 East ---------------------------------------------------------- Debtor 8 West 58th Street Hospitality, LLC, filed a motion to approve a funding agreement between the Debtor and 14 East 58th LLC pursuant to Sections 363 and 364 of the Bankruptcy Code. If approved, the Agreement will provide funding for the Debtor's exit from Chapter 11 after more than three tumultuous years. The Motion is opposed by Be My Guest, LLC. A hearing to consider the Motion was held on July 11, 2017. Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York approved the motion. The Court finds that entering into the Agreement is well within the Debtor's business judgment. The benefits of the Agreement are numerous. First and foremost, it adds significant value to the Debtor’s estate with a guaranteed monetary value of $1,000,000 for the estate. Second, it offers an indemnification provision, under which the Landlord indemnifies the Debtor and Max Burgio, the Debtor's principal, from any claims asserted by BMG or its principals in connection with the litigation. Specifically, the Landlord agrees to "indemnify the Debtor, the Debtor's estate, and Burgio, from any and all claims, demands, suits or causes of action, asserted by BMG and/or the BMG Principals, against the Debtor, the Debtor’s estate, or Burgio, arising out of, or in connection, with the Litigation." Even if the Debtor is unsuccessful in its litigation against BMG, therefore, the Debtor still has a guaranteed recovery of $1,000,000 in consideration for the "sale and transfer of all right, title and interest of Debtor and/or Burgio in and to all claims against BMG and the BMG Principals, including the filed Proof of Claim plus continuing contempt penalties." BMG raises several objections to the Motion. None have merit. First, BMG questions the benefits to the Debtor under the Agreement as compared with offers made by BMG to the Debtor. But the Landlord's deal is simply better than what BMG has to offer. At the July 11th Hearing, BMG stated it could pay $800,000 to the Debtor. Thus, the Agreement is more valuable by at the least $200,000. Under the Agreement, the floor for recovery by the Debtor is $1,000,000, with the possibility of receiving $1,250,000. BMG also complains that the Agreement will not end the Debtor's involvement in litigation. But the Court notes that the Debtor's litigation against BMG only became necessary because of BMG's failure to honor its obligations. BMG cannot now leverage this litigation to its benefit. BMG entered into an agreement to fund the Debtor's plan and it failed to honor its obligations thereby forcing the Debtor to seek alternatives. Now, BMG is essentially seeking veto power over any other source of funding by virtue of its earlier (unfulfilled) commitment to pay the Debtor for the Lease. The Court will not condone BMG's gamesmanship or reward its contempt. BMG also insists the Agreement is a financing transaction subject to Section 364 of the Bankruptcy Code. Admittedly, the Debtor moved for approval of the agreement under both Sections 363 and 364, but stated that it did so under Section 364 out of an abundance of caution. As explained by the Debtor and made clear from the terms of the Agreement, the funding is not a loan. The Agreement does not provide an applicable interest rate, terms of repayment, or events of default. Rather, it is an agreement for the Landlord to serve as the source of funds for the Debtor's exit from bankruptcy. Indeed, it is not all that different in many ways from the agreement the Debtor originally reached with BMG; both essentially seek to convey the Lease to a non-debtor third party in exchange for a payment that will be used to pay creditors. For all the said reasons, the Court approves the Motion. The Debtor shall submit a proposed order on three days' notice. The proposed order shall reflect the modifications to the Agreement that were discussed at the July 11th Hearing to clarify the Court's questions relating to the Debtor's ability to reach a settlement with BMG and/or BMG's principals without the Landlord's consent. A full-text copy of Judge Lane's Memorandum of Decision dated August 4, 2017, is available at: http://bankrupt.com/misc/nysb14-11524-209.pdf Counsel to 8 West 58th Street Hospitality, LLC: Kevin J. Nash, Esq. J. Ted Donovan, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, New York 10036 KNash@gwfglaw.com Counsel to 14 East 58th LLC: Brett D. Goodman, Esq. TROUTMAN SANDERS LLP 875 Third Avenue New York, New York 10022 brett.goodman@troutmansanders.com Counsel to Be My Guest, LLC: Douglas J. Pick, Esq. Eric C. Zabicki, Esq. PICK & ZABICKI LLP 369 Lexington Avenue, 12th Floor New York, New York 10017 dpick@picklaw.net ezabicki@picklaw.net Counsel to Nello Balan and Lucy Balan: Lawrence M. Gordon, Esq. LAW OFFICES OF LAWRENCE M. GORDON 300 Garden City Plaza, Suite 450 Garden City, New York 11530 8 West 58th Street Hospitality, LLC, in New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 14-11524) on May 20, 2014. It listed $2.23 million in assets and $1.36 million in liabilities. The petition was signed by Max Burgio, managing member. ACADANIA MANAGEMENT: S. Goodman Appointed as PCO ------------------------------------------------ Judge Robert Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana approved the U.S. Trustee's appointment of Susan Goodman as the Patient Care Ombudsman in the Chapter 11 cases of Acadiana Management Group, LLC, and its debtor affiliates. Pursuant to the Order entered on July 28, 2017, the U.S. Trustee was directed to appoint a Patient Care Ombudsman. Accordingly, Henry G. Hobbs, Jr., Acting U.S. Trustee for Region 5 has selected, Susan Goodman as the Patient Care Ombudsman for the Debtors' patients. About Acadiana Management Acadiana Management and several affiliates sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Lead Case No. 17-50799) on June 23, 2017. The petitions were signed by August J. Rantz, IV, president. Judge Robert Summerhays presides over the cases. Bradley L. Drell, Esq., Heather M. Mathews, Esq., and Gene B. Taylor, III, Esq., at Gold, Weems, Bruser, Sues & Rundell serves as the Debtors' bankruptcy counsel. Acadiana Management estimated assets of less than $50,000 and debt at $50 million and $100 million. The Office of the U.S. Trustee on July 28 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of Acadiana Management Group, LLC, and its affiliates. The committee members are: (1) Medline Industries, Inc.; (2) Accountable Healthcare Staffing; (3) CHCT Louisiana, LLC; (4) Rehabilitation Hospital of Acadiana LLC; and (5) Stability Biologics LLC. ADEPTUS HEALTH: 2nd Amended Plan Filed, Plan Disclosures Approved ----------------------------------------------------------------- BankruptcyData.com reported that Adeptus Health filed with the U.S. Bankruptcy Court a Second Amended Joint Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan incorporates extensive negotiations among the Debtors, Deerfield, the Debtors' joint venture partners, MPT, the Creditors' Committee, and other parties. . . . The Debtors will establish a Litigation Trust to investigate and pursue Causes of Action transferred to the Litigation Trust and to distribute the proceeds of any recovery thereupon. The structure of the Litigation Trust (including the funding that will be provided by the Deerfield and the fact that Deerfield will subordinate claims that it would otherwise be entitled to assert) will allow for a more favorable recovery than what would otherwise occur under a chapter 7 liquidation, and therefore, the Plan is in the best interests of all creditors and equity interest holders. The Litigation Trust shall be funded (the 'Litigation Trust Initial Funding') by the Ohio Real Estate Proceeds, and, next, solely if necessary to satisfy fees and expenses of the Litigation Trust (as determined by the Litigation Trust Trustee), a $1,000,000 loan contributed by the Deerfield Parties. To the extent the loan is extended by the Deerfield Parties, such loan shall be repaid to the Deerfield Parties from proceeds of the Litigation Trust and shall bear interest at the rate of 10 percent (10%) per annum. Proceeds of the Litigation Trust shall be distributed in accordance with the Litigation Trust Waterfall." The Court subsequently approved the Disclosure Statement and scheduled a September 13, 2017 hearing to consider the Plan, with objections due by September 5, 2017, according to the report. About ADPT DFW Holdings LLC Adeptus Health LLC -- http://www.adpt.com/-- through its subsidiaries, owns and operates hospitals and free standing emergency rooms in partnership with various healthcare providers. Adeptus Health Inc. is a holding company whose sole material asset is a controlling equity interest in Adeptus Health LLC. Lewisville, Texas-based ADPT DFW Holdings LLC and its affiliates, including Adeptus Health, Inc., and Adeptus Health LLC, each filed Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Lead Case No. 17-31432) on April 19, 2017, listing $798.7 million in total assets and $453.48 million in total debt as of Sept. 30, 2016. Andrew Hinkelman, their chief restructuring officer, signed the petitions. Judge Stacey G. Jernigan presides over the cases. Elizabeth Nicolle Boydston, Esq., Kristian W. Gluck, Esq., John N. Schwartz, Esq., Timothy S. Springer, Esq., and Louis R. Strubeck, Jr., Esq., at Norton Rose Fulbright US LLP serve as the Debtors' bankruptcy counsel. The Debtors tapped DLA Piper LLP (US) as special counsel; FTI Consulting, Inc., as chief restructuring officer; Houlihan Lokey, Inc., as investment banker; and Epiq Systems as claims and noticing agent. On May 1, 2017, a nine-member official unsecured creditors committee was formed in the case. The committee tapped Akin Gump Strauss Hauer & Feld LLP as counsel. The Committee retained CohnReznick as financial advisors. On June 19, 2017, the U.S. Trustee appointed an official committee of equity security holders. The equity committee hired Winstead P.C. as legal counsel. Daniel T. McMurray has been named as Patient Care Ombudsman in the Debtors' cases. The PCO tapped Focus Management Group USA, Inc., as medical operations advisor. ADVANCED MICRO DEVICES: Mubadala Unloads 40M Shares for $525.6M --------------------------------------------------------------- Mubadala Investment Company PJSC, Mubadala Development Company PJSC, West Coast Hitech L.P. and West Coast Hitech G.P., Ltd. disclosed in a regulatory filing with the Securities and Exchange Commission that as of Aug. 4, 2017, they beneficially own 131,906,166 shares of common stock of Advanced Micro Devices, Inc. representing 12.9% of the shares outstanding. On Aug. 4, 2017, Mubadala, et al., sold an aggregate of 40,000,000 shares of Common Stock to Morgan Stanley & Co. LLC at a price of $13.14 per share, for a total purchase price of $525,600,000, in a block trade transaction pursuant to an exemption from the registration requirements under the Securities Act of 1933. In connection with that sale, West Coast Hitech L.P., as holder, and Morgan Stanley entered into a Lock Up Agreement, dated Aug. 4, 2017, pursuant to which the Holder agreed that it will not, subject to certain exceptions, for a period of 60 days after the date of the Lock Up Agreement, without the prior written consent of the Buyer, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of, contract to dispose of, or enter into any transaction having the economic consequences of a disposition, (i) Common Stock of the Issuer or (ii) any securities convertible into or exercisable or exchangeable for such Common Stock, or publicly announce an intention to effect any such transaction. In connection with that sale, the Holder and Buyer also entered into a Side Letter Agreement, dated Aug. 4, 2017, pursuant to which Buyer agreed that it would not resell the Block Trade Shares in a manner inconsistent with the provisos to Section 9.06 of the Agreement, as amended by Agreement Amendment No. 2. A full-text copy of the Schedule 13D/A is available for free at: goo.gl/FSqqaS About Advanced Micro Devices Sunnyvale, California-based Advanced Micro Devices, Inc., (NASDAQ:AMD) is a global semiconductor company. AMD -- http://www.amd.com/-- offers x86 microprocessors, as a standalone central processing unit (CPU) or as incorporated into an accelerated processing unit (APU), chipsets, and discrete graphics processing units (GPUs) for the consumer, commercial and professional graphics markets, and server and embedded CPUs, GPUs and APUs, and semi-custom System-on-Chip (SoC) products and technology for game consoles. AMD incurred a net loss of $497 million for the year ended Dec. 31, 2016, a net loss of $660 million for the year ended Dec. 26, 2015, and a net loss of $403 million for the year ended Dec. 27, 2014. * * * In March 2017, S&P Global Ratings said it raised its corporate credit rating on Sunnyvale, Calif.-based Advanced Micro Devices to 'B-' from 'CCC+'. The outlook is stable. "Our upgrade reflects our view of the Company's capital structure as sustainable following a series of deleveraging transactions, a return to revenue growth, and improving, if still weak, profitability," said S&P Global Ratings credit analyst James Thomas. As reported by the TCR on Feb. 9, 2017, Moody's Investors Service upgraded Advanced Micro Devices, Inc.'s corporate family rating to B3, senior unsecured rating to Caa1, and speculative grade liquidity rating to SGL-1. The outlook is stable. The upgrade of the corporate family rating to B3 reflects AMD's improved performance outlook, driven by design wins, modest market share gains, and an expanded set of product offerings. AVAYA INC: Expects to Report $802M to $804M in Q3 Revenue --------------------------------------------------------- Avaya on Aug. 7, 2017, announced preliminary unaudited financial results for the third fiscal quarter ended June 30, 2017. Third fiscal quarter 2017 revenue is expected to be in the range of $802 to $804 million dollars, approximately flat sequentially and a decline of 9% from the third quarter of the prior year. Adjusted EBITDA is expected to be in the range of $202 million to $206 million, or 25.1% to 25.7% of revenue. The cash balance is expected to be approximately $729 million, reflecting positive operating cash flow offset primarily by payments to first lien debtholders. In addition, the third fiscal quarter 2017 cash balance does not include the initial cash proceeds of approximately $70 million received upon closing of the sale of the Networking assets on July 14. The company noted that these financial results for the third fiscal quarter ended June 30, 2017 are preliminary and subject to the completion of financial closing and review procedures performed by its independent auditors. There can be no assurance that the company's final results will not differ from these preliminary estimates as a result of quarter-end closing, review procedures, or review adjustments, and any such changes could be material. Avaya expects to report third fiscal quarter results the week of August 14. Links to the financial results press release and accompanying slides will be available on the investor page of Avaya's website (www.avaya.com/investors). The company will not hold a conference call or webcast to discuss results. Along with announcing its preliminary earnings, Avaya also announced the filing of an amended Plan of Reorganization in its chapter 11 cases and the support of the amended Plan by a majority of holders of its first lien debt. "[Mon]day's filings pave the way for Avaya's near term exit from chapter 11 and our return as a publicly traded technology company," said Kevin Kennedy, president and CEO. "The company will exit this process with an industry leading financial model preserved throughout the restructuring process, reduced complexity following the divestiture of our Networking business, strong innovation across our portfolio and commercial execution that exceeded the Avaya Business Plan." Avaya also announced a CEO succession plan. Effective October 1, Mr. Kennedy will retire as CEO and be succeeded by Jim Chirico, who is currently Chief Operating Officer and Global Sales Leader. Mr. Kennedy will also retire from the Board of Directors but he will continue as an advisor to the company. Mr. Chirico will join the Board effective October 1. About Avaya Inc. Avaya Inc., together with its affiliates, is a multinational company that provides communications products and services, including, telephone communications, internet telephony, wireless data communications, real-time video collaboration, contact centers, and customer relationship software to companies of various sizes. The Avaya Enterprise serves over 200,000 customers, consisting of multinational enterprises, small- and medium-sized businesses, and 911 services as well as government organizations operating in a diverse range of industries. It has approximately 9,700 employees worldwide as of Dec. 31, 2016. Avaya Inc. and 17 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 17-10089) on Jan. 19, 2017. The petitions were signed by Eric S. Koza, CFA, chief restructuring officer. Judge Stuart M. Bernstein presides over the cases. The Debtors have hired Kirkland & Ellis LLP as legal counsel; Centerview Partners LLC as investment banker; Zolfo Cooper LLC as restructuring advisor; PricewaterhouseCoopers LLP as auditor; KPMG LLP as tax and accountancy advisor; and The Siegfried Group, LLP as financial services consultant. Prime Clerk LLC is their claims and noticing agent. On Jan. 31, 2017, the U.S. Trustee for Region 2, appointed an official committee of unsecured creditors. Morrison & Foerster is the creditors committee's counsel. Stroock & Stroock & Lavan LLP and Rothschild, Inc., serve as advisors to an ad hoc group -- Ad Hoc Crossholder Group -- comprised of holders of the Company's (i) 33.98% of the $3.235 billion total amount outstanding under loans issued pursuant to a Third Amended and Restated Credit Agreement, amended and restated as of December 12, 2012 (the "Prepetition Cash Flow Term Loans"); (ii) 28.38% of the $1.009 billion total principal amount outstanding under notes issued pursuant to an indenture for the 7.00% Senior Secured Notes Due 2019 (the "7.00% First Lien Notes"); (iii) 12.82% of the $290 million total principal amount outstanding under notes issued pursuant to an indenture for 9.00% Senior Secured Notes Due 2019 (the "9.00% First Lien Notes"); (iv) 83.70% of the $1.384 billion total amount outstanding under notes issued pursuant to an indenture for 10.5% Senior Secured Notes Due 2021 (the "Second Lien Notes"); and (v) 24% of the $725 million outstanding under loans issued under the Debtors' debtor-in-possession financing (the "DIP Facility") pursuant to a Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of Jan. 24, 2017. AVAYA: Enters Into Plan Support Agreement, Seeks Chapter 11 Exit ---------------------------------------------------------------- Avaya on Aug. 7, 2017, disclosed that it has entered into a Plan Support Agreement (the "PSA") with holders of over 50% of its first lien debt, including certain members of the Ad Hoc Group of First Lien Creditors (the "Ad Hoc First Lien Group"). In addition, the company has reached agreement with U.S. Pension Benefit Guaranty Corporation ("PBGC") to provide for the termination of the company's obligations under the Avaya Pension Plan for Salaried Employees ("APPSE") and the related transfer of those obligations to PBGC, with the support of the Ad Hoc First Lien Group. Avaya has filed an amended plan of reorganization (the "Amended Plan") and disclosure statement reflecting the terms of these agreements. The PSA results from extensive negotiations among Avaya and members of the Ad Hoc First Lien Group. The Holder Parties (as defined in the PSA) who executed the PSA collectively hold over 50% of Avaya's first lien indebtedness. These parties have agreed, among other things, to support the restructuring transactions contemplated by the Amended Plan, vote in favor of the Amended Plan when solicited in accordance with applicable law and not take any action inconsistent with the PSA or the transactions contemplated thereby. As a result, once the company has received approval from the Court to solicit creditor votes and receives the requisite votes, the Amended Plan is confirmable. Key terms of the Amended Plan include: -- The reduction of Avaya's debt by more than $3 billion from pre-filing levels; -- The settlement and transfer to PBGC of Avaya's obligations under the APPSE; -- Avaya's continued support of its obligations under the Avaya Pension Plan ("APP"); and -- Initiation of steps to enable Avaya to emerge from chapter 11 as a public company. "We are very pleased to have reached these agreements with these key stakeholders in our restructuring process, the Ad Hoc First Lien Group and PBGC," said Kevin Kennedy, President and Chief Executive Officer of Avaya. "This is an important milestone in the chapter 11 process and marks Avaya's progress toward our goal of emerging a stronger, more competitive company. Further, we believe this is a positive and beneficial outcome for our stakeholders. With a creditor-supported and confirmable Plan of Reorganization in place, we now have a clear and viable path to emerge from chapter 11 in the near term." Avaya will continue to work to build consensus and gain the support of other stakeholders. Avaya will seek approval of its revised disclosure statement and the PSA at its scheduled court hearing on August 23, 2017. Centerview Partners LLC and Zolfo Cooper Management, LLC are Avaya's financial and restructuring advisors and Kirkland & Ellis LLP is the company's restructuring counsel. The Ad Hoc First Lien Group is represented by Akin Gump Strauss Hauer & Feld LLP and PJT Partners, as legal and financial advisors, respectively. About Avaya Inc. Avaya Inc., together with its affiliates, is a multinational company that provides communications products and services, including, telephone communications, internet telephony, wireless data communications, real-time video collaboration, contact centers, and customer relationship software to companies of various sizes. The Avaya Enterprise serves over 200,000 customers, consisting of multinational enterprises, small- and medium-sized businesses, and 911 services as well as government organizations operating in a diverse range of industries. It has approximately 9,700 employees worldwide as of Dec. 31, 2016. Avaya Inc. and 17 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 17-10089) on Jan. 19, 2017. The petitions were signed by Eric S. Koza, CFA, chief restructuring officer. Judge Stuart M. Bernstein presides over the cases. The Debtors have hired Kirkland & Ellis LLP as legal counsel; Centerview Partners LLC as investment banker; Zolfo Cooper LLC as restructuring advisor; PricewaterhouseCoopers LLP as auditor; KPMG LLP as tax and accountancy advisor; and The Siegfried Group, LLP as financial services consultant. Prime Clerk LLC is their claims and noticing agent. On Jan. 31, 2017, the U.S. Trustee for Region 2, appointed an official committee of unsecured creditors. Morrison & Foerster is the creditors committee's counsel. Stroock & Stroock & Lavan LLP and Rothschild, Inc., serve as advisors to an ad hoc group -- Ad Hoc Crossholder Group -- comprised of holders of the Company's (i) 33.98% of the $3.235 billion total amount outstanding under loans issued pursuant to a Third Amended and Restated Credit Agreement, amended and restated as of December 12, 2012 (the "Prepetition Cash Flow Term Loans"); (ii) 28.38% of the $1.009 billion total principal amount outstanding under notes issued pursuant to an indenture for the 7.00% Senior Secured Notes Due 2019 (the "7.00% First Lien Notes"); (iii) 12.82% of the $290 million total principal amount outstanding under notes issued pursuant to an indenture for 9.00% Senior Secured Notes Due 2019 (the "9.00% First Lien Notes"); (iv) 83.70% of the $1.384 billion total amount outstanding under notes issued pursuant to an indenture for 10.5% Senior Secured Notes Due 2021 (the "Second Lien Notes"); and (v) 24% of the $725 million outstanding under loans issued under the Debtors' debtor-in-possession financing (the "DIP Facility") pursuant to a Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of Jan. 24, 2017. BANK OF ANGUILLA: Claims Not Barred by SC Statute of Limitations ---------------------------------------------------------------- The case captioned National Bank of Anguilla (Private Banking and Trust) Ltd., Plaintiff, v. Robert Considine and Anne Considine, Defendants, C.A. No. 9:17-cv-653-PMD (D.S.C.) arises out of the Considines' acquisition of property on Anguilla. To finance the property, the Considines entered into a loan agreement with Plaintiff National Bank of Anguilla (Private Bank and Trust) Ltd. on March 2, 2007. National Bank alleges that the Considines defaulted on the loan agreement by failing to make the required payments and still owe almost $200,000 under its terms. The Considines also entered into an overdraft agreement with National Bank on Feb. 26, 2010. Under the terms of the overdraft agreement, National Bank would continue to honor charges against the Considines' account up to $50,000. National Bank claims that the Considines also defaulted on the overdraft agreement and owe almost $60,000 in principal and interest under the terms of that agreement. Accordingly, National Bank brings the instant action to recover the money the Considines purportedly owe. The Considines filed a motion to dismiss on May 1, National Bank responded on May 19, and the Considines replied on May 26. Judge Patrick Michael Duffy of the U.S. District Court for the District of South Carolina denied the Considines' motion. The Considines argue that National Bank's claims are barred by South Carolina's statute of limitations. Most breach of contract actions in South Carolina are subject to a three-year statute of limitations. They contend that South Carolina's three-year statute of limitations applies. They claim that because the defaults on the loan agreement and the overdraft agreement occurred more than three years before National Bank commenced this action, those claims are barred. Unsurprisingly, National Bank disagrees and argues that Anguilla's twelve-year statute of limitations applies. Judge Duffy finds that National Bank's claims are not barred because either Anguilla's twelve-year statute of limitations or South Carolina's twenty-year statute of limitations applies. The Court need not undertake a choice of law analysis at this time because National Bank's claims are timely under either a twelve or a twenty-year statute of limitations. The Considines also argue that National Bank is judicially estopped from bringing these claims because it did not include them in the schedule of assets and liabilities it filed with the U.S. Bankruptcy Court for the Southern District of New York in connection with its Chapter 11 bankruptcy proceeding. Here, Judge Duffy finds that judicial estoppel cannot apply because National Bank has not succeeded in maintaining the inconsistent position in bankruptcy court. To the contrary, National Bank's bankruptcy proceedings are ongoing, and the bankruptcy court has not yet confirmed a plan. Therefore, judicial estoppel cannot apply. The Considines further argue that National Bank cannot bring suit in South Carolina because it has no authority to transact business in South Carolina. Assuming that statute applies, the Considines have failed to establish the necessary prerequisite that National Bank is transacting business in South Carolina. Subsection 33-15-101(b)(1) clearly states that maintaining, defending, or settling a proceeding does not constitute transacting business in South Carolina. Thus, the fact that National Bank sued the Considines in the state where they reside is not sufficient to constitute transacting business for the purposes of section 33-15-102. As for the underlying basis of this action, the Considines appear to have reached into Anguilla to obtain the loan at issue, rather than National Bank reaching into South Carolina. Accordingly, viewing the allegations in the light most favorable to the plaintiff, the Court concludes that National Bank was not transacting business in South Carolina. Finally, the Considines claim that this action should be dismissed under the doctrine of forum non conveniens. The Court disagrees. "The forum non conveniens doctrine is a common law doctrine now largely limited in federal court to cases where the alternative forum for litigating the dispute is outside of the United States." For these reasons, Judge Duffy issues an order denying the Considines' motion to dismiss. A full-text copy of Judge Duffy’s Order dated August 1, 2017, is available at https://is.gd/8KWr85 from Leagle.com. National Bank of Anguilla (Private Banking and Trust) Ltd, Plaintiff, represented by Elliot Darren Schuler, Schuler Zarin PLLC, pro hac vice. National Bank of Anguilla (Private Banking and Trust) Ltd, Plaintiff, represented by Prina Chandrakant Maines, The Law Office of Prina C Maines PC. Robert Considine, Defendant, represented by Michael A. Scardato -- mscardato@mcnair.net -- McNair Law Firm. Anne Considine, Defendant, represented by Michael A. Scardato, McNair Law Firm. About National Bank of Anguilla The National Bank of Anguilla was formed in 1984 and started operating in 1985, when it acquired the Anguilla branch of the Bank of America National Trust & Savings Association, according to its website. The private-banking unit provides financial services to offshore clients around the world and is wholly owned by its parent, Bloomberg News notes. The parent ceased banking operations on April 22, 2016. It started liquidating in an Anguillan court the following month. On May 26, it petitioned for bankruptcy court protection from U.S. creditors. Banking operations were transferred to the National Commercial Bank of Anguilla, which is wholly owned by the government. The private bank's case is In re National Bank of Anguilla (Private Banking & Trust Ltd.) Case No. 16-11806 (Bankr. S.D.N.Y.). The parent's case is Case No. 16-11529 in the same bankruptcy court. BEAR FIGUEROA: Wants to Access $2.17 Million of DIP Financing ------------------------------------------------------------- Bear Figueroa LLC seeks permission from the U.S. Bankruptcy Court for the Central District of California to enter into negotiations to refinance the loans secured by existing liens on its property located at 10520 South Figueroa Blvd., Los Angeles, California 90003. A hearing to consider the Debtor's request will be held on Aug. 31, 2017, at 9:30 a.m. The Debtor seeks approval of a refinancing loan secured by the Property. The total loan amount of approximately from $2,015,000 to $2,170,000. The current liens on the Property in favor of Evergreen Advantage LLC and the Los Angeles County Tax Collector will be paid in full. The Debtor anticipates filing a proposed Chapter 11 plan which will include this post-petition refinancing if approved. In exchange for payment within the next 60 days, the secured creditors, Evergreen Advantage LLC and the Los Angeles County Tax Collector will release their liens. There are currently three notices of interest the Debtor is taking under consideration: 1) Notice of Interest -- Private Source Capital, LLC a) The loan will be for a total of $2,170,000 with a first priority deed of trust in favor of Private Source Capital, LLC, at the interest rate of 10.99% secured by an insured mortgage on the real property located at 10520 Figueroa Street, Los Angeles, California 90003, and 10601 Crenshaw Boulevard, Inglewood, California 90303; 2) Notice of Interest -- Agoura Hills Financial a) The loan will be for a total of $2,015,000 with first priority deed of trust in favor of Agoura Hills Financial at the interest rate of 10.00%; and 3) Notice of Interest -- FK Capital Fund, Inc. a) The loan will be for a total of $2,170,000 with first priority deed of trust in favor of FK Capital Fund, Inc., at the interest rate of 11%. The additional collateral for the property is located at 10601 Crenshaw Boulevard, Inglewood, California 90303 and 2218 Imperial Highway, Hawthorne, California 90250. A copy of the Debtor's Motion is available at: http://bankrupt.com/misc/cacb17-14249-38.pdf About Bear Figueroa Headquartered in Culver City, California, Bear Figueroa LLC owns a property located at 10520 South Figueroa Boulevard, Los Angeles, California 90003, valued at $2.9 million. For 2016, it recorded gross revenue of $265,000 compared to gross revenue of $250,000 during the prior year. Bear Figueroa filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 17-14249) on April 6, 2017, listing $2.9 million in total assets and $1.93 million in total liabilities. The petition was signed by Denise Johnson, managing member. Judge Vincent P. Zurzolo presides over the case. Lionel E Giron, Esq., at the Law Offices of Lionel E. Giron, serves as the Debtor's bankruptcy counsel. No creditors' committee has been appointed by the United States Trustee. BLANN FARMS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Blann Farms, Inc. dba Blann Berries 12570 N. Texas Gas Road Oaktown, IN 47561 Type of Business: Blann Farms, Inc. owns the Blann Berries, a strawberry farm located less than 45 minutes South of Terre Haute in the heart of Southern Indiana's melon country. Selling to the public since 2002, its operation has grown from an original 7-acre strawberry patch to 30 acres of strawberries. Web site: http://blannberries.com/ Chapter 11 Petition Date: August 7, 2017 Case No.: 17-80514 Court: United States Bankruptcy Court Southern District of Indiana (Terre Haute) Judge: Hon. Jeffrey J. Graham Debtor's Counsel: David R. Krebs, Esq. HESTER BAKER KREBS LLC One Indiana Square, Suite 1600 211 N. Pennsylvania Street Indianapolis, IN 46204 Tel: 317-833-3030 Fax: 317-833-3031 E-mail: dkrebs@hbkfirm.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jeffrey B. Blann, president, who also sought bankruptcy protection on August 7 (Bankr. S.D. Ind. Case No. 17-80515). The Debtor's list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/insb17-80514.pdf CAESARS ENTERTAINMENT: Reports $1.4B Net Loss in 2nd Quarter ------------------------------------------------------------ Caesars Entertainment Corporation ("CEC") on Aug. 3, 2017, reported its second quarter of 2017 results: -- Net revenues for CEC increased 1.0% year-over-year to $1.0 billion, mainly due to higher volumes across most properties, strong hotel performance in Las Vegas and incremental revenues from operational initiatives. -- Net loss for CEC, before including the effect of noncontrolling interest, was $1.4 billion, reflecting a $617 million improvement compared to the second quarter of 2016, primarily attributable to lower adjustments related to the restructuring of Caesars Entertainment Operating Company, Inc. ("CEOC"). -- Adjusted EBITDA for CEC was flat year-over-year at $289 million. -- Despite softness in Las Vegas and ongoing construction disruption year-over-year, continuing CEC occupancy improved 1.4%, and lodging revenues increased 1.3%. -- Received stockholder approval for the merger of CEC and Caesars Acquisition Company ("CAC") and continued to make progress with regulators in jurisdictions where approvals are required for CEOC's restructuring and emergence from bankruptcy, with approvals from Nevada, Missouri, and Louisiana still pending. "In the second quarter, stronger gaming fundamentals across most of our properties were offset by expected unfavorable year-over-year hold, primarily in baccarat, and the impact of more hotel rooms off the market for renovation," said Mark Frissora, President and Chief Executive Officer. "Despite these second-quarter headwinds, we have seen improved performance in the third quarter and believe we are on track to surpass our initially disclosed 2017 full-year EBITDAR projections by at least $40 million before the anticipated deconsolidation of Horseshoe Baltimore. We currently expect to complete the restructuring of CEOC and the merger of Caesars Entertainment and Caesars Acquisition in the first week of October, which will allow us increased flexibility to prudently invest in growth." Summary Financial Data The results of CEOC and its subsidiaries are no longer consolidated with Caesars subsequent to CEOC and certain of its United States subsidiaries (the "Debtors") voluntarily filing for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") on January 15, 2015. In January 2017, the U.S. Bankruptcy Court for the Northern District of Illinois approved CEOC's Plan of Reorganization. Supplemental materials have been posted on the Caesars Entertainment Investor Relations website at http://investor.caesars.com/financials.cfm. Second Quarter of 2017 Financial Results CEC views each casino property as an operating segment and currently aggregate all such casino properties into two reportable segments, which aligns with their ownership and underlying credit structures: Caesars Entertainment Resort Properties ("CERP") and Caesars Growth Partners, LLC ("CGP"). On September 23, 2016, CIE sold its social and mobile games business ("SMG Business") while retaining its World Series of Poker ("WSOP") and regulated online real money gaming businesses. The SMG Business represented the majority of CIE's operations and is being classified as a discontinued operation for all periods presented. Segment results in this release are presented consistently with the way Caesars management assesses these results and allocates resources, which is a consolidated view that adjusts for the impact of certain transactions between reportable segments within Caesars, as described below. Accordingly, the results of certain reportable segments presented in this filing differ from the financial statement information presented in their stand-alone filings. "Other" includes parent, consolidating, and other adjustments to reconcile to consolidated Caesars results. All comparisons are to the same period of the previous year. CEC Net revenues increased 1.0% year-over-year to $1.0 billion primarily attributable to improved volumes across most properties, strong hotel performance in Las Vegas and incremental revenues from our operational initiatives. This revenue growth was partially offset by the results of our Baltimore facility, which reflect the presence of a new competitor this year. Income from operations increased $46 million to $157 million in the second quarter of 2017. Net loss, before including the effect of non-controlling interest, was $1.4 billion compared with a net loss of $2.0 billion in the second quarter of 2016 mainly due to a lower accrual related to CEC's estimate of the amount it will pay to support the restructuring of CEOC. Property EBITDA increased 2.3% to $311 million in the second quarter of 2017 and adjusted EBITDA remained relatively unchanged in the second quarter of 2017 as higher revenues were offset by higher operating expenses. CERP CERP owns six casinos in the United States and The LINQ promenade, along with leasing Octavius Tower at Caesars Palace Las Vegas to CEOC and gaming space at The LINQ promenade to CGP. Net revenues for the second quarter of 2017 was $570 million, up 1.4% primarily due to increased revenues associated with operational initiatives, higher gaming volumes and increased hotel cash revenues. Rooms revenues rose 2.8% in the quarter to $148 million mainly due to higher hotel rates, improved hotel yield, and resort fees. Hotel performance benefited as room nights off the market in the second quarter of 2017 dropped to 2,000 compared with 10,000 off the market in the second quarter of 2016. Casino revenues was relatively unchanged from the prior year with higher gaming volumes offset by unfavorable year-over-year hold. Income from operations increased $7 million to $118 million, net income increased to $15 million from $8 million in the second quarter of 2016. Adjusted EBITDA remained relatively unchanged at $178 million, mainly due to higher revenues offset by an increase in operating expenses. Hold was estimated to have an unfavorable effect on operating income in the quarter relative to expected hold and an unfavorable effect of between zero and $5 million when compared with the prior year period. CGP CGP owns six casinos in the United States, primarily in Las Vegas, as well as CIE. CIE owns and operates regulated online real money gaming and the WSOP tournaments and brand. Net revenues for the second quarter of 2017 was $435 million, relatively unchanged year-over-year. CGP gross gaming revenues decreased primarily due to weaker gaming volumes in Baltimore, despite favorable hold in New Orleans. Rooms revenues declined 1.1% as a result of the impact of rooms off the market. Planet Hollywood was impacted by 25,000 room nights off the market during the quarter related to renovations versus none in the year ago quarter. Food and beverage revenues was $64 million, down 4.5% versus the second quarter of 2016. Income from operations increased $27 million to $63 million mainly due to a 6.8% reduction in operating expenses. Net income increased from $16 million to $21 million primarily attributable to higher interest income on CIE restricted cash and lower interest expense supported by our debt repricing actions. Adjusted EBITDA increased 3.4% to $120 million due to favorable year-over-year hold, which was partially offset by weakness in Baltimore. Hold was estimated to have a favorable effect on operating income relative to expected hold and a favorable effect of between zero and $5 million when compared with the prior year period. CES Caesars Enterprise Services ("CES") is a joint venture among CERP, CEOC, and a subsidiary of CGP. CES provides certain corporate and administrative services to their casino properties. In addition, effective October 2014, most of the properties owned by CERP and CGP are managed by CES. Cash and Available Revolver Capacity CEC is primarily a holding company with no independent operations, employees, or material debt issuances of its own. CEC's primary assets as of June 30, 2017, consist of $125 million in cash and cash equivalents and its ownership interests in CEOC, CERP and CGP. CEC's cash includes $93 million held by insurance captives. Each of the subsidiary entities comprising Caesars Entertainment's consolidated financial statements have separate debt agreements with restrictions on usage of the respective entity's capital resources. CGP is a variable interest entity that is consolidated by Caesars Entertainment, but is controlled by its sole voting member, CAC. CAC is a managing member of CGP and therefore controls all decisions regarding liquidity and capital resources of CGP. CEC has limited unrestricted cash available to meet its financial commitments, primarily resulting from significant expenditures made to defend against litigation related to the CEOC restructuring and to support a plan of reorganization for CEOC. The completion of the merger with CAC is expected to allow CEC to fulfill its financial commitments in support of the restructuring, both under the terms of the restructuring and commitments entered into prior thereto. CEC is permitted to use a portion of the proceeds from the sale of CIE's SMG Business to fund certain expenses incurred related to the restructuring. If CEC is unable to obtain additional sources of cash when needed, in the event of a material adverse ruling on one or all of our ongoing litigation matters, or if CEOC does not emerge from bankruptcy on a timely basis on terms and under circumstances satisfactory to CEC, it is likely that CEC would seek reorganization under Chapter 11 of the Bankruptcy Code. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, The RSA became effective pursuant to its terms as of Jan. 9, 2015. Appaloosa Investment Limited, et al., owed $41 million on account of 10% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders are represented By Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. Judge Benjamin Goldgar presides over the cases. Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is the Debtors' restructuring advisors. Prime Clerk LLC acts as the Debtors' notice and claims agent. The U.S. Trustee has appointed an official committee of second priority noteholders and an official unsecured creditors' committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. The examiner retained Winston & Strawn LLP, as his counsel; Alvarez & Marsal Global Forensic and Dispute Services, LLC, as financial advisor; and Luskin, Stern & Eisler LLP, as special conflicts counsel. * * * On Jan. 17, 2017, the U.S. Bankruptcy Court for the Northern District of Illinois confirmed the Third Amended Joint Plan of Reorganization of Caesars Entertainment Operating Company, Inc. and its affiliated debtors. CALIFORNIA RESOURCES: OOGC Exec Powers Added to Board ----------------------------------------------------- California Resources Corporation's Board voted to increase the size of the Board to 10 members and elected Ms. Anita M. Powers to fill the resulting vacancy. Prior to her appointment, Ms. Powers most recently served as executive vice president of Worldwide Exploration for Occidental Oil and Gas Corporation and as vice president of parent Occidental Petroleum Corporation. Ms. Powers brings over 36 years of experience in the oil and gas industry to CRC's Board. Her expertise as a senior geoscientist working in hydrocarbon provinces around the world and, in particular, her knowledge of California's geology will greatly benefit CRC's Board. Ms. Powers is expected to serve on CRC's Health, Safety and Environmental Committee of the Board. Ms. Powers holds a Bachelor of Science degree in Geology with high honors from Texas A&M University. There are no arrangements or understandings between Ms. Powers and any other persons under which she was selected as a director. Ms. Powers will receive the same director compensation as is paid to the other non-employee directors under CRC's compensation program for non-employee directors. About California Resources California Resources Corporation is an independent oil and natural gas exploration and production company operating properties exclusively within the State of California. The Company was incorporated in Delaware as a wholly-owned subsidiary of Occidental on April 23, 2014, and remained a wholly-owned subsidiary of Occidental until if was spun off. On Nov. 30, 2014, Occidental distributed shares of the Company's common stock on a pro rata basis to Occidental stockholders and the Company became an independent, publicly traded company, referred to in the annual report as the Spin-off. Occidental retained approximately 18.5% of the Company's outstanding shares of common stock which it has stated it intends to divest on March 24, 2016. California Resources reported net income of $279 million on $1.54 billion of total revenues for the year ended Dec. 31, 2016, compared to a net loss of $3.55 billion on $2.40 billion of total revenue for the year ended Dec. 31, 2015. As of June 30, 2017, California Resources had $6.15 billion in total assets, $6.64 billion in total liabilities and $491 million total deficit. * * * In September 2016, S&P Global Ratings raised its corporate credit rating on California Resources to 'CCC+' from 'SD'. "We raised the corporate credit rating on CRC to reflect our reassessment of its credit profile following the tender for its senior unsecured notes," said S&P Global Ratings credit analyst Paul Harvey. "The rating reflects our expectation that debt leverage will remain at what we consider unsustainable levels over the next 24 months despite the net-debt reduction of about $625 million from the tender," he added. In August 2016, Moody's Investors Service downgraded California Resources' Corporate Family Rating to 'Caa2' from 'Caa1' and Probability of Default Rating to 'Caa2-PD' from 'Caa1-PD'. CLUBCORP CLUB: S&P Lowers CCR to 'B' on Leveraged Buyout -------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Dallas-based ClubCorp Club Operations Inc. to 'B' from 'B+'. The rating outlook is stable. S&P said, "We also assigned our 'B' corporate credit rating to ClubCorp Holdings Inc., which will be the surviving borrower following the merger." S&P said, "We removed all ratings from CreditWatch, where we had placed them with negative implications on July 11, 2017. The CreditWatch placement followed ClubCorp's announcement it had entered into an agreement with Apollo to be acquired for $2.2 billion including debt. We expect ClubCorp to repay its existing senior secured credit facility and senior unsecured notes upon the close of the transaction. "We assigned our 'B+' issue-level rating and '2' recovery rating to the proposed senior secured credit facility, which consists of a $1.125 billion term loan B due 2024 and a $175 million revolving credit facility due 2022. The '2' recovery rating reflects our expectation for substantial recovery (70% to 90%; rounded estimate: 70%) for lenders in the event of payment default. We also assigned our 'CCC+' issue-level rating and '6' recovery rating to the proposed $475 million senior unsecured notes due 2025. The '6' recovery rating reflects our expectation for negligible recovery (0% to 10%; rounded estimate: 0%) for lenders in the event of payment default. "The downgrade reflects substantially higher leverage due to the acquisition by Apollo, which will result in additional debt in the capital structure and lease-adjusted debt to EBITDA in the high-7x area in 2017. While we expect the company to use free cash flow to reduce debt over the next few years, the downgrade also reflects the risk that over time financial sponsor Apollo could use any future leverage capacity to fund distributions. Our base-case forecast anticipates adjusted leverage to improve to the low-7x area in 2018 and to the mid-6x area in 2019. We expect EBITDA coverage of interest expense will be good in the mid-2x area through 2018. "The stable outlook reflects our expectation that despite a significant spike in leverage following the transaction, the company will use excess cash flow to pay down debt, resulting in adjusted debt to EBITDA sustained below 7.75x. "We could lower the rating if operating performance is materially worse than our expectations. We could also lower the rating if the company pursues a financial policy that increases lease-adjusted debt to EBITDA above 7.75x or EBITDA coverage of interest expense below 1.5x on a sustained basis, such as through leveraging acquisitions or dividends to shareholders. "We could consider higher ratings if we are confident ClubCorp can sustain our measure of lease-adjusted debt to EBITDA under 6x on a sustained basis, incorporating capital expenditures, potential dividends to shareholders, and debt-financed acquisitions." COMMUNITY HEALTH: S&P Lowers CCR to 'B-', Outlook Stable -------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Community Health Services Inc. to 'B-' from 'B'. The outlook is stable. S&P said, "At the same time, we lowered our issue-level rating on senior secured debt to 'B+' from 'BB-'. The recovery rating on this debt remains '1', indicating our expectations for very high (90%-100%; rounded estimate: 90%) recovery in the event of payment default. "In addition, we lowered our issue-level rating on the company's unsecured debt to 'CCC' from 'CCC+'. The recovery rating on this debt remains '6', reflecting our expectation for minimal (0%-10%; rounded estimate: 0%) recovery in the event of payment default. "Our downgrade on Community Health follows another poor quarter of operating results, highlighted by a 2.5% decline in same-facility adjusted admissions and higher expenses for medical specialists, resulting in further EBITDA margin deterioration from already weak levels. Although the company continues to make progress in its asset sale program, selling 20 hospitals (with 10 additional property sales expected to close by the end of the third quarter) and generating over $1 billion in proceeds to repay debt, the company's core business remains challenged, even after excluding facilities being held for sale. Consistent with many competitors, Community has experienced weaker demand over the past several quarters; however, the magnitude of the slowdown has been more pronounced for Community, and the company has struggled to reduce expenses in line with slowing demand. "Our stable rating outlook reflects our expectation that Community will be able to generate at least slightly positive free cash flow over the next two years, notwithstanding leverage that we expect to remain above 6.5x. "We could lower the rating if the company experiences further margin declines, resulting in persistent cash flow deficits. In our view, this could happen if the company experiences accelerating demand erosion and an incremental 100 to 200 basis points of EBITDA margin erosion from current levels. Under this scenario, we would likely view the company's capital structure as unsustainable over the long term, despite currently ample liquidity and the lack of near-term debt maturities. "We could raise the rating if we become more certain that Community can generate about $100 million to $200 million in positive, recurring discretionary free cash flow. In our view, this could happen if the company is able to generate and sustain about 100 to 150 basis points of margin improvement, which we think will likely require the company to make some progress in stabilizing margins at hospitals that it intends to retain." CURTIS C. MAGLEBY: C. Magleby Denied Payment of Admin. Claims -------------------------------------------------------------- Judge Robert Kwan of the U.S. Bankruptcy Court for the Central District of California issued an order denying the motion of creditor Cindy S. Magleby mandating and directing payment of administrative support claims. Judge Kwan disagrees with movant that her claim is postpetition in that she obtained an order post-petition from the family law court that she has a right to payment from an asset, the bonus earned for debtor's post-separation, prepetition services in 2015, making it a prepetition asset, in which she apparently has a prepetition claim awarded by the family law court, though it appears that it is in the nature of support since it is intended to pay for attorneys' fees incurred to obtain support, but the court need not determine the specific character of the claim, except as to its prepetition status. The claim would not be a post-petition administrative expense claim under 11 U.S.C. 503(b) since there is no showing that such claim is for post-petition expenses actually and necessarily benefitting the estate. As to movant's argument that the court has authority to make distributions in a Chapter 11 case outside a plan pursuant to 11 U.S.C. 105(a), "[t]he general rule is that distribution on pre-petition debt should not take place except pursuant to a confirmed plan of reorganization, absent extraordinary circumstances." The bankruptcy case is In re: CURTIS C. MAGLEBY, Chapter 11, Debtor, Case No. 2:16-bk-15322-RK (Bankr. C.D. Cal.). A full-text copy of Judge Kwan's Order dated August 2, 2017, is available at https://is.gd/GRHAMg from Leagle.com. Curtis C. Magleby, Debtor, represented by Illyssa I. Fogel. United States Trustee (LA), U.S. Trustee, represented by Kenneth G. Lau -- kenneth.g.lau@usdoj.gov -- Office of the United States Trustee. Curtis C. Magleby filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 16-15322) on April 24, 2016. CYRUSONE INC: S&P Raises Corp Credit Rating to BB, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings said it raised its corporate credit rating on Dallas, Texas-based CyrusOne Inc. to 'BB' from 'BB-'. The outlook is stable. S&P said, "At the same time, we raised our issue-level rating on the company's senior unsecured credit facility and senior unsecured notes to 'BB+' from 'BB'. The recovery rating remains '2', indicating our expectation for substantial (70%-90%; rounded estimate: 85%) recovery for lenders in the event of a payment default. "The upgrade reflects our view that the company will continue to use a healthy amount of equity to fund expansion plans, such that it will operate within its 4x-5x leverage target. If management chooses to operate at the upper end of its 4x-5x leverage target, S&P Global Ratings-adjusted leverage would likely be in the mid-5x area. We believe the company could temporarily increase leverage above this level to fund expansion depending on the timing and amount of capital expenditures and size and purchase multiples of potential acquisitions. However, we expect the company would bring leverage back within the bounds of its leverage target within a relatively short time frame through additional equity issuance and EBITDA growth. "The stable outlook reflects our expectation that the company will have adequate liquidity to fund growth initiatives that yield negative discretionary cash flow over the next few years, as it continues to invest in additional data center capacity. "While unlikely over the next 12 months, we could lower the rating if operating performance weakens due to competitive pressures or overexpansion of data center capacity, causing pricing pressure, a decline in utilization, or elevated churn, which results in margin compression and a sustained increase in adjusted net debt to EBITDA above 5.5x. "While unlikely over the next 12 months, we could raise the rating if adjusted net debt to EBITDA improves below 4x on a sustained basis. Alternatively, we could raise the rating over the longer term if the company continues to successfully increase its scale and further diversify its geographic and customer base while managing churn and utilization near current levels." DIGICERT INC: S&P Puts 'B-' Issue Rating on CreditWatch Positive ---------------------------------------------------------------- S&P Global Ratings placed its 'B-' rating on Lehi, Utah-based DigiCert Inc., as well as the ratings on the company's first-lien and second-lien debt, on CreditWatch with positive implications. S&P said, "We also placed on CreditWatch with positive implications our 'B' issue rating on DigiCert's $15 million revolving credit facility and $220 million first-lien debt and our 'CCC+' issue-level rating on DigiCert's $110 million second-lien debt. The recovery rating on the revolving facility and first-lien debt is unchanged at '2', indicating our expectation for high (70%-90%; rounded estimate 70%) recovery in the event of a payment default. The recovery rating on the second-lien debt is unchanged at '5', indicating our expectation for negligible (10%-30%; rounded estimate 10%) recovery in the event of a payment default." "The CreditWatch placement follows the announcement that DigiCert Inc. is under agreement to acquire Symantec's website security and related PKI solutions, in line with DigiCert's core competency as a provider of SSL encryption technologies," said S&P Global Ratings credit analyst Minesh Shilotri. Under the terms of the agreement, Symantec will receive approximately $950 million in upfront cash proceeds and approximately a 30% stake in the common stock equity of the DigiCert business at the closing of the transaction. We expect DigiCert to issue debt to fund the transaction, but the capital structure for the pro forma company is currently unknown. As part of this deal, all existing debt is expected to be refinanced. DRAGON JADE: Centurion ZD CPA Ltd. Casts Going Concern Doubt ------------------------------------------------------------ Dragon Jade International Limited filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F, disclosing a net loss of $1.98 million on $224,920 of revenue for the year ended March 31, 2017, compared with net income of $292,647 on $336,906 of revenue for the year ended March 31, 2016. The Company's independent accountants Centurion ZD CPA Limited, in Hong Kong, China, states that the Company has suffered losses from operations and has a significant accumulated deficit. In addition, the Company comes to have insufficient cash flows from operations and for development. These factors raise substantial doubt about the Company's ability to continue as a going concern. At March 31, 2017, the Company had total assets of $12,526,391, total liabilities of $382,798, all current, non-controlling interest of $28,811, and $12,172,404 in total stockholders' equity. A full-text copy of the Form 20-F is available for free at: http://bit.ly/2vIuj6N About Dragon Jade International Dragon Jade International Limited through its subsidiaries, Alpha Ultimate Ltd. ("AUL") and United Asia Medical Network Company Limited ("UAM"), sells health supplement products. UAM is a company incorporated in Hong Kong with a business network across Asia, including Hong Kong, mainland China, Taiwan, Japan, Korea, Singapore, Malaysia, and Thailand. UAM operations include the unique combined use of traditional Chinese medicine and modern western medicine in treatment. EARTH PRIDE: Aug. 14 Meeting Set to Form Creditors' Panel --------------------------------------------------------- Andy Vara, Acting United States Trustee for Region 3, will hold an organizational meeting on Aug. 14, 2017, at 1:00 p.m. in the bankruptcy cases of Earth Pride Organics, LLC., and Lancaster Fine Foods, Inc. The meeting will be held at: Office of the U.S. Trustee 833 Chestnut Street, Suite 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Earth Pride Organics, LLC Earth Pride Organics, LLC -- http://earthprideorganics.com/-- is a family owned holding company that includes American Specialty Foods, Lancaster Fine Foods, EPX Trucking and C.O. Nolt's Bakery Supply. Headquartered in Lancaster, Pennsylvania, each EPO subsidiary shares the commonality of specialty food and creates a vertically integrated organization. Lancaster Fine Foods, Inc. --http://www.lancasterfinefoods.com-- manufactures and sells food, offering barbecue sauces, mustards, salsas, marinades, hot sauces, chutneys, cheese spreads, and other common condiments. Earth Pride and Lancaster Fine Foods sought Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case Nos. 17-13816 and 17-13819) on May 31, 2017, each estimating assets and liabilities between $1 million and $10 million. The petitions were signed by Michael S. Thompson, managing member. Judge Eric L. Frank presides over the bankruptcy cases. Paul Brinton Mashchmeyer, Esq., at Maschmeyer Karalis P.C., serves as the Debtors' bankruptcy counsel. EDKEY INC: S&P Affirms 'BB' Ratings on 3 Bond Tranches ------------------------------------------------------ S&P Global Ratings revised its outlook to stable from negative and affirmed its 'BB' long-term rating on the Pima County Industrial Development Authority, Ariz.'s series 2013, series 2014A, and series 2016 education facility revenue and refunding bonds issued on behalf of multiple separate limited liability companies (LLCs), of which the sole member of each is Edkey Inc. (Charter School Operator) (Edkey). "The outlook revision to stable reflects our expectation of an improvement in Edkey's operating performance in fiscal 2017 from recent year results per information provided by management," said S&P Global Ratings credit analyst Ying Huang. In addition, managements expects the operations in fiscal 2018 to be close to breakeven on a full-accrual basis based on year-to-date fall 2017 enrollment statistics that are projected to exceed the budgeted number. We understand that management has worked on reorganization and various cost-containment initiatives, which is expected to contribute to the improved operations, and there is limited financing or capital plans in the next two years according to management. However, given Edkey's historical operating deficits and weak liquidity for the rating category, we will closely monitor its operating performance and liquidity position during the outlook period. S&P said, "The stable outlook reflects our expectation for improved full-accrual financial operations in fiscal 2017 and 2018 that are expected to be better than the results of the past three years. We also expect incremental growth in Edkey's liquidity position as its operations improve. However, given Edkey's historical operating deficits and weak liquidity for the rating category, we will closely monitor its operating performance and liquidity position during the outlook period. "We could lower the rating in the outlook period if demand weakens and pressures the operating performance, or operating performance and liquidity fail to improve to meet or exceed management projections. "Given the weak liquidity level and negative operating performance, a positive rating change in the one-year outlook period is unlikely. However, beyond the outlook period, we would view it favorably if the school sustains its enrollment growth, the expense saving translates into positive operating results, and days' cash on hand improves to be commensurate with the median of a higher rating level." ELECTRONIC SERVICE: Wants to Use Cash Collateral Until Sept. 20 --------------------------------------------------------------- The Hon. Ann M. Nevins of the U.S. Bankruptcy Court for the District of Connecticut authorized Electronic Service Products Corporation to continue using until Sept. 20, 2017, cash collateral in which PNL Asset Management LP and CTCIC may assert or have lien. As reported by the Troubled Company Reporter on July 3, 2017, the Court previously authorized the Debtor to use up to $33,977 of cash collateral in accordance with a monthly operating budget until July 12, 2017. The Court will schedule a hearing prior to the expiration of this court order to allow the Debtor to petition the Court for a permanent or additional interim Order for the ongoing use of cash collateral. The Court allows the Debtor to use cash and other rental proceeds which constitute cash collateral of the Secured Creditor on a revolving basis and to provide the Secured Creditor with a lien upon the prepetition and postpetition assets so that its interests therein will not be diminished during the pendency of these Chapter 11 proceedings. In addition, any priority to which the Secured Creditor may be entitled or become entitled under Section 507(b) of the U.S. Bankruptcy Code will be subject and subordinate to a carve-out of the liens for amounts payable by the Debtor under Section 1930(a)(6) of Title 28 of the Code, for the Debtor's post-petition wages and employment taxes, and approved fees and expenses of the Debtor's and any appointed Official Committee of Unsecured Creditors' professionals. As adequate protection to Secured Creditor for the Debtor's use of cash collateral and for any diminution in the collateral, the Secured Creditor is granted, nunc pro tunc to the Petition Date: a. a continuing post-petition lien and security interest in all pre-petition property of the Debtor as it existed on the Petition Date, of the same type against which Secured Creditor held validly protected liens and security interests as of the Petition Date; and b. a continuing post-petition lien in all property acquired by the Debtor after the Petition Date. The replacement liens will maintain the same priority, validity and enforceability as Secured Creditor's liens on the initial collateral and will be recognized only to the extent of any diminution in the value of the collateral resulting from the use of cash collateral pursuant to the court order. The validity, enforceability, perfection and priority of the replacement liens will not be subject to the equities of the case exception to Section 552(b) of the Code and will not depend upon filing, recordation, or any other act required under applicable state or federal law, rule or regulation. To the extent the Replacement Liens granted to the Secured Creditor are insufficient to compensate the Secured Creditor for any diminution in value of the collateral, the Secured Creditor will be entitled to a super-priority administrative claim pursuant to 11 U.S.C. Section 503(b) of the Code, and Secured Creditor will be entitled to the protections of and the priority set forth in 11 U.S.C. Section 507(b). A copy of the Order is available at: http://bankrupt.com/misc/ctb17-30704-53.pdf About Electronic Service Products Founded in 1992, Electronic Service Products Corporation is engaged in the wholesale distribution of electronic parts and electronic communications equipment. Electronic Service Products filed a Chapter 11 petition (Bankr. D. Conn. Case No. 17-30704) on May 12, 2017. William Hrubiec, its president, signed the petition. The Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Ann M. Nevins. The Debtor is represented by William E. Carter, Esq., at the Law Office of William E. Carter, LLC. ENGINEERED WELL SERVICE: Court Dismisses Appeal as Moot ------------------------------------------------------- Judge Royce C. Lamberth of the U.S. District Court for the Western District of Texas issued an order dismissing Debtor and appellant Engineered Well Service International, LLC's appeal. The Debtor filed for Chapter 11 bankruptcy on June 23, 2016. The case was before Bankruptcy Judge Craig A. Gargotta. During the proceedings at bankruptcy, Judge Gargotta issued an order granting creditors' motion for relief from an automatic stay. On Oct. 4, 2016, the debtor filed a notice of appeal, which was initially assigned to Chief Judge Orlando Garcia. On Jan. 9, 2017, Judge Garcia ordered the case reassigned to Judge Lamberth. Based on the representations of appellant's attorney, the underlying bankruptcy case was previously dismissed on Nov. 17, 2016. It, therefore, appears that the appeal is moot. The appeals case is Engineered Well Service International, LLC., Debtor-Appellant, v. Sturgeon Services International, Inc., et al., Appellees, Civil Case No. 16-cv-1072-RCL (W.D. Tex.). A copy of Judge Lamberth's Order dated August 1, 2017, is available at https://is.gd/9nJOOp from Leagle.com. Engineered Well Service International, LLC, Appellant, represented by James Samuel Wilkins, Willis & Wilkins, LLP. Sturgeon Services International, Inc., Appellee, represented by David S. Gragg -- dgragg@langleybanack.com -- Langley & Banack, Inc.. Engineered Wells Service International, Inc., Appellee, represented by David S. Gragg, Langley & Banack, Inc. Engineered Well Service International, LLC filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 16-51402) on June 23, 2016. ERATH IRON: Cash Motion Denied for Want of Prosecution ------------------------------------------------------ The Hon. Mark X. Mullin of the U.S. Bankruptcy Court for the Northern District of Texas has entered an order denying Erath Iron & Metal, Inc.'s cash collateral motion for want of prosecution. On May 18, 2017, the Debtor filed a motion to use cash collateral. The Court held a hearing on May 19, 2017, at which time counsel announced that an order disposing of the motion would be submitted. The Court further finds that insufficient action has been taken to obtain the relief sought. The Court denies the motion without prejudice to refiling. A copy of the Order is available at: http://bankrupt.com/misc/txnb17-40693-279.pdf About Erath Iron and Metal Based in Stephenville, Texas, Erath Iron and Metal, Inc., buys and sells metal recyclable material in Erath Bosque, Eastland, Johnson, Stephens and Howard Counties, Texas. Erath Iron and Metal, Inc., and related entity Erath Iron and Metal, RE LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 17-40693) on Feb. 22, 2017. Nicolle Boyd, president, signed the petitions. At the time of the filing, the Debtor disclosed $21.87 million in assets and $4.73 million in liabilities. Judge Mark X. Mullin is the case judge. The Debtor is represented by Russell W. King, Esq., and Tracy L. King, Esq., at King Law Offices, P.C. No trustee, examiner or creditors' committee has been appointed in the case. FACTORY SALES: Hires Stone Pigman as Counsel -------------------------------------------- Factory Sales and Engineering, Inc. seeks authorization from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Stone Pigman Walther Wittman LLC as counsel. The Debtor requires Stone Pigman to: (a) advise the Debtor with respect to its rights, powers and duties as a debtor and debtor-in-possession in the continued operation and management of its business and property; (b) prepare and pursue confirmation of a liquidating plan; (c) prepare on behalf of the Debtor all necessary applications, motions, answers, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed; (d) advise the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed by other parties herein; (e) appear in Court to protect the Debtor's interests before this Court; (f) represent the Debtor in connection with use of cash collateral and/or obtaining post-petition financing; (g) advise the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; (h) investigate the nature and validity of liens asserted against the Debtor's property, and advise the Debtor concerning the enforceability of said liens; (i) investigate and advise the Debtor concerning, and take action as may be necessary to collect, income and assets in accordance with applicable law, and the recovery of property for the benefit of Debtor's estate; (j) advise and assist the Debtor in connection with any potential property dispositions; (k) advise the Debtor concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructuring, and re-characterizations; (l) assist the Debtor in reviewing, estimating and resolving claims asserted against its estate; (m) commence and conduct litigation necessary and appropriate to assert the Debtor's rights, protect estate assets or otherwise further Debtor's interests; and (n) perform all other legal services for the Debtor which may be necessary and proper in this case. Stone Pigman will be paid at these hourly rates: John M. Landis $425 Andrew D. Mendez $350 Associates $230-$270 Paralegals $100 Stone Pigman will also be reimbursed for reasonable out-of-pocket expenses incurred. Stone Pigman has $12,281.02 remaining in its trust account from the $25,000 retainer provided to the firm on July 10, 2017 in connection with the bankruptcy case. John M. Landis, member of Stone Pigman, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Stone Pigman can be reached at: John M. Landis STONE PIGMAN WALTHER WITTMANN LLC 546 Carondelet Street New Orleans, LA 70130 Tel: (504) 581-3200 Fax: (504) 581-3361 E-mail: jlandis@stonepigman.com About Factory Sales and Engineering An involuntary Chapter 7 petition was filed against Factory Sales and Engineering, Inc. (Bankr. E.D. La. Case No. 17-11446) on June 6, 2017. The involuntary petition was served on Debtor on Sunday, June 18. On July 10, the Debtor filed its ex parte motion to convert to Chapter 11, in which it sought to exercise its right, pursuant to Bankruptcy Code section 706(a), to convert this case to a Chapter 11 reorganization. On July 17, 2017, the Court entered an Order granting the Debtor's Motion to Convert to Chapter 11. Judge Jerry A Brown presides over the case. The Petitioning Creditors are Iberdrola Energy Projects Canada Corporation, represented by Richard A. Aguilar, Esq., at Mcglinchey Stafford; Maxim Crane Works, L.P., represented by John T. Andrishok, Esq., at Breazeale, Sachse & Wilson; and Precision Bearing & Machine, Inc., represented by A. Todd Darwin, Esq. FAMOUS KOKO: Names Joyce Lindauer as Counsel -------------------------------------------- Famous Koko Inc. seeks authorization from the U.S. Bankruptcy Court for the Northern District of Texas to employ Joyce W. Lindauer Attorney PLLC as counsel. The Debtor requires the law firm to effectuate a reorganization, propose a Plan of Reorganization and effectively move forward in its bankruptcy proceeding. The firm will be paid at these hourly rates: Joyce W. Lindauer $395 Sarah M. Cox, Associate $225 Jamie N. Kirk, Associate $195 Jeffery M. Veteto, Associate $185 Dian Gwinnup, Paralegal $125 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Lindauer PLLC received a retainer of $6,717 which included the filing fee of $1,717 in connection with this proceeding, and which was paid by Korea Texas Daily 3717. Joyce W. Lindauer, owner of the law firm, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Lindauer PLLC can be reached at: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY PLLC 12720 Hillcrest Road, Suite 625, Dallas, TX 75230, Tel: (972) 503-4033 Fax: (972) 503-4034 About Famous Koko Inc. Famous KoKo, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-32473) on June 27, 2017, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Joyce W. Lindauer, Esq. FINTON CONSTRUCTION: Unsecureds to Recoup 100% Over 72 Months ------------------------------------------------------------- Finton Construction, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a disclosure statement dated July 31, 2017, referring to the Debtor's plan of reorganization dated July 31, 2017. Class 3 General Unsecured Claims Including Settleed Claims are impaired by the Plan. On the Effective Date, holder of a Class 3 Claim will be paid 100% of their claim. Class 3 Claims total $3,414,539.82 (after the projected objections analysis and results), which will be paid a total of $3,414,539.82 payable $21,000 monthly beginning in month 1 through Month 72 of the Plan except as provided for in two stipulated settlement agreements and for which the approved stipulated settlement agreements will control. The Debtor has resolved Claim 13-2 as to Michael Reeves in the claimed amount of $5,177,094 for $2.4 million (payable in the amount of $2 million if satisfied early by the terms of the stipulated agreement). The hearing to approve this resolution is currently pending, but payments to this creditor are expected to be $12,000 per month. The second claim resolved by the Debtor is Claim 12-1 as to Michel Harouche, which has reduced said claim from $4.6 Million to $1 million as set forth in the court order granting amended motion to approve settlement agreement providing a monthly payment of $6,000. The two claims as fully settled during the pendency of this case, are deemed unimpaired and therefore not entitled to vote to accept or reject the Plan due to the fact that they are resolved on their face and current under the agreements at this time with payments to be made in accordance with their terms. The balance of claims is anticipated to be $500,000. These claims will receive a pro rata share of $2,000 monthly starting upon the Effective date and payable on the first of each month thereafter for 72 month with a balloon payment in month 61 of $270,539.82. Funds to be used to make cash payments under the Plan shall derive from income of the Debtor and the Debtor's President, John Finton. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/flsb16-19221-227.pdf About Finton Construction Finton Construction, Inc., is a construction company, claiming to build "finest homes" in the United States and overseas. Primary operations are on Star Island in Miami-Dade County, Florida. Finton Construction sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 16-19221) on June 30, 2016. The petition was signed by John Finton, president. The case is assigned to Judge Laurel M. Isicoff. At the time of the filing, the Debtor estimated its assets at $0 to $50,000 and debt at $1 million to $10 million. David L. Merrill, Esq., at Merrill PA, is serving as bankruptcy counsel to the Debtor. Andrew C. Callari, Esq., at Callari & Summers, A Law Partnership, is serving as special counsel in connection with its civil case. Kenneth J. Mueller, CPA, Cr., FA, has been tapped as accountant. No official committee of unsecured creditors has been appointed in the Chapter 11 case. FIRST UNION BAPTIST: TD Stipulation Unenforceable Under NY Law -------------------------------------------------------------- First Union Baptist Church of the Bronx filed a complaint against TD Capital Group LLC and 2064 Grand Concourse LLC. Judge Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York ruled in favor of First Union with regard to the claims that the provisions of the Stipulation that authorized TD Capital to record the deed are unenforceable under New York law, and that the recording of the deed was void and needs to be undone. However, the Court finds in favor of TD Capital with respect to the alternative motion under Rule 9006 seeking additional time for the May payment to be made. The complaint in the adversary proceeding sets forth four claims. Count I contends that under New York law First Union retained a right of redemption that could not be extinguished except through the completion of a foreclosure sale, and that the provisions of the Stipulation that permitted TD Capital to record the deed and to transfer title to the Property without a foreclosure sale were void and unenforceable as a matter of New York law. First Union, therefore, seeks a declaratory judgment that the purported transfer of the title to the Property is null and void and that the Property still belongs to First Union. Count II alleges that the provisions of the Stipulation that granted the First Union the choice of either proceeding with a foreclosure sale or recording the deed and taking ownership of the Property operated as an impermissible penalty and are void and unenforceable. It seeks a declaratory judgment that the purported transfer of the deed is null and void and that the Property still belongs to First Union. Counts III and IV allege that the transfer of the deed gave rise to a fraudulent transfer. Those claims were not pursued at trial and are deemed to have been abandoned. First Union also has made a motion in the underlying bankruptcy case to have the recording of the deed set aside. It argues that this Court should excuse the late delivery of the May payment on grounds of "excusable neglect" pursuant to Rule 9006 of the Federal Rules of Bankruptcy Procedure. TD Capital does not contest the general principles of New York law, and it does not argue that there was an outright conveyance of the Property when the deed was delivered. TD Capital nevertheless has disputed whether the ordinary New York rule should be applied in the circumstances of this case. TD Capital argues that a different rule should apply when an agreement to place a deed in escrow has been incorporated into a court-approved stipulation. However, no New York state court decision has been cited for this proposition. In fact, New York court decisions have repeatedly made clear a mortgagor's right of redemption is not waivable even pursuant to in court stipulations that purport to grant deeds in lieu of foreclosure, where the delivery of the deed is intended to provide security and not to constitute an outright conveyance. TD Capital has argued that a different rule should be applied in these cases because TD Capital already held a security interest in the Property and did not need any additional security to be granted. However, there is nothing in the New York case law that says that the rules described above apply only when "new" or "additional" security is being provided. If that were the case, then under New York law it would be permissible to waive a right of redemption whenever a mortgage is amended, so long as the amendment does not provide any new or additional security. But at least two of the decisions cited above have involved the delivery of deeds in connection with amendments to existing mortgages, and the courts in those cases held that the right of redemption could not be waived. TD Capital has also implied that the Court approval of the Stipulation should be treated as a prior determination by the Court that the deed-recording provisions are valid and are in compliance with New York law. But the only issue presented to the Court, when the parties sought approval of the Stipulation, was whether First Union could enter into it. The motion papers and the record of the proceedings do not include any request for a ruling as to the enforceability of any of the terms of the Stipulation. There was no mention of the principles of New York law that are set forth above, and certainly there was no request that the Court approves and gives force to an arrangement that would be contrary to what New York law otherwise would have provided. TD Capital did not seek a ruling on the issue; instead, it took its chances as to whether the terms were enforceable. A full-text copy of Judge Wiles' Memorandum Opinion dated August 4, 20171, is available at: http://bankrupt.com/misc/nysb12-14099-119.pdf Co-Counsel for First Union Baptist Church of the Bronx: David J. Abrams Andrew H. Elkin Isaac S. Sasson Emily L. Kuznick Andrew R. Kurland KASOWITZ BENSON TORRES LLP. New York, New York dabrams@kasowitz.com aelkin@kasowitz.com isasson@kasowitz.com ekuznick@kasowitz.com akurland@kasowitz.com Co-Counsel for First Union Baptist Church of the Bronx: Seymour James Susan H. Chase THE LEGAL AID SOCIETY New York, New York Co-Counsel for Defendants: Gary O. Ravert RAVERT PLLC New York, New York gravert@ravertpllc.com Co-Counsel for Defendants: Laleh Hawa LAW OFFICES OF LALEH HAWA Great Neck, New York First Union filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14099) on Oct. 1, 2012. Vincent Cuocci, Esq., at Law Office of Vincent Cuocci, P.C., in Sayville, New York. The Debtor disclosed $1,379,600 in assets and $1,245,920 in liabilities. GAINESVILLE HOSPITAL: Aug. 21 Hearing in Bond Validation Action --------------------------------------------------------------- Gainesville Hospital District d/b/a North Texas Medical Center, will appear before the U.S. Bankruptcy Court in Plano, Texas, at 10:00 a.m. on August 21, 2017, for a hearing on its adversary complaint. Gainesville Hospital filed an Original Complaint/Petition for Expedited Declaratory Judgment (Ex Parte Adversary No. 17-04072) on July 28, 2017, pursuant to Chapter 1205 of the Texas Government Code. The case is an in rem and class action proceeding brought by the Gainesville Hospital District in connection with the restructuring and refunding of various expenses and liabilities and anticipated expenses and liabilities to be incurred by the District in an amount not to exceed $34,750,000. Gainesville Hospital has notified all Interested Parties and the Honorable Ken Paxton, in his official capacity as Attorney General of the Slate of Texas, of their right to appear at the hearing. At the hearing, they may show cause why the Hospital District's Original Petition should not be granted by the Court's signing of a Declaratory Judgment ordering the public securities or the public security authorizations be validated and confirmed. The proceeding was instituted in the Bankruptcy Court for the Eastern District of Texas, Sherman Division, which the District concluded has jurisdiction and is a proper venue. In the proceeding, the Hospital District seeks to obtain a declaratory judgment to conclusively establish: (a) the District's authority to issue its limited tax general obligation refunding bonds (the "Bonds"), from time to time in one or more series as may be necessary, pursuant to Chapter 1207 of the Texas Government Code ("Chapter 1207") to restructure and refinance each of the District's general or special obligations established in the Original Petition without an election in connection with the issuance thereof; (b) the District's authority to levy ad valorem taxes in an amount not to exceed 75 cents on the $100 valuation of all taxable property within the physical boundaries of the District, in order to provide indigent medical care to residents within the District and to pay the Bonds (of which not more than 65 cents on the $100 valuation may be imposed to pay principal of and interest on the Bonds in any given year); (c) the District's authority to incur the Obligations in order to operate and maintain the North Texas Medical Center (the "Hospital") and provide indigent care poor to and during its bankruptcy proceeding; (d) the validity and legality of the District's liabilities for the payment of the Obligations, associated with the continued operation and maintenance of the Hospital and the provision of indigent care by the District: (e) the classification of each such liability arid each such related Obligation, in not-to-exceed amounts provided in the Original Petition, as "other general or special obligations" pursuant to Chapter 1207; and (f) the validity and legality of the proposed orders, elections, judgments, agreements, certificates and contracts described in the Original Petition, including the statutory authority of the District to adopt, execute or enter into such orders, elections, judgments, agreements, certificates and contracts, all of which relate to the issuance of the Bonds and the expenditure of Bond proceeds for the payment in full of the Obligations, for the continued operation and maintenance of the Hospital and the provision of indigent care by the District. The Original Petition, which more fully describes the Obligations the Bonds, and the related agreements, is on file with the court and is available (or review" by an persons, including those who: (1) reside in the territory of the District; (2) own property located within the boundaries of the District; (3) are taxpayers of the District; (4) have or claim a right, title, or interest in any property or money to be affected by a public security authorization or the issuance of the public securities by the District, including those who are creditors in the captioned bankruptcy proceeding (such persons constitute "Interested Parties") Interested Parties may become a named party to the bond validation action by filing an answer with the Court at or before the time set for trial, or by intervening, but only with leave of court, after the trial date. The Court has ordered this deadline notwithstanding other deadlines under the Federal Rules of Civil Procedure or The Federal Rule of Bankruptcy Procedure. Additional information is available at http://www.ntmconline.net/ The case is before the Hon. Bankruptcy Judge Brenda T. Rhoades. About Gainesville Hospital District Gainesville Hospital District filed a Chapter 9 petition (Bankr. E. D. Tex. Case No. 17-40101) on January 17, 2017. The petition was signed by Ramin Roufeh, chief executive officer. At the time of the filing, the Debtor estimated its assets and liabilities at $10 million to $50 million. The Debtor is represented by: William R. Greendyke, Esq. Julie Goodrich Harrison, Esq. NORTON ROSE FULBRIGHT US LLP 1301 McKinney Street, Suite 5100 Houston, Texas 77010-3095 Tel: 713-651-5151 Fax: 713-651-5246 - and - Ryan E. Manns, Esq. NORTON ROSE FULBRIGHT US LLP 2200 Ross Avenue, Suite 3600 Dallas, TX 75201-7932 Tel: 214-855-8000 Fax: 214-855-8200 The U.S. trustee for Region 6 on Feb. 1 appointed five creditors of Gainesville Hospital District to serve on the official committee of unsecured creditors. The Committee consists of creditors AmerisourceBergen Drug Corp.; Medtronic; Morrison Management Specialists, Inc.; NorthStar Anesthesia, P.A.; and Voice Products Service, LLC. At a meeting held February 7, 2017, the Committee selected as its counsel: Andrew H. Sherman, Esq. Boris I. Mankovetskiy, Esq. Lucas F. Hammonds, Esq. Sills Cummis & Gross P.C. The Legal Center One Riverfront Plaza Newark, NJ 07102 E-mail: asherman@sillscummis.com bmankovetskiy@sillscummis.com lhammonds@sillscummis.com - and - Joseph J. Wielebinski, Esq. Kevin M. Lippman, Esq. Thomas Berghman, Esq. Munsch Hardt Kopf & Harr, P.C. 500 North Akard Street, Suite 3800 Dallas, TX 75201-6659 Telephone (214) 855-7500 Facsimile (214) 978-4375 E-mail: JWielebinski@munsch.com KLippman@munsch.com TBerghman@munsch.com The Debtor's DIP Lender is Universal Health Services, Inc. Susan Goodman has been appointed Patient Care Ombudsman. She may be reached at: Susan Goodman MESCH CLARK ROTHSCHILD 259 N. Meyer Avenue Tucson, AZ 85701-1090 Tel: 520-624-8886 Fax: 520-798-1037 GARRETSON TILE: Hires Lawrence Frank as Receivables Counsel ----------------------------------------------------------- Garretson Tile Company Inc. seeks authorization from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Lawrence G. Frank as attorney to pursue collection of accounts receivable for Adams County National Bank and the bankruptcy estate on a contingency basis. The proposed arrangement for compensation, subject to Court approval, will be 25% of the gross amount of each collected receivable plus reimbursement of out of the pocket expenses. In the event that the out of pocket expense will exceed $250 per account, prior approval of Adams County National Bank will be required. For the accounts in which up to $250 of expenses have been advanced by Mr. Frank, or more than $250 with prior approval of Adams County National Bank, and no money is collected, then Adams County National Bank agrees to reimburse Mr. Frank for costs advanced in those matters. Mr. Frank assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Mr. Frank can be reached at: Lawrence G. Frank, Esq. LAW OFFICE OF LAWRENCE G. FRANK 100 Aspen Drive Dillsburg, PA 17019 Tel: (717) 234-7455 Fax: (717) 432-9065 Email: lawrencegfrank@gmail.com About Garretson Tile Company Gettysburg, Pennsylvania-based Garretson Tile Company, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 17-01051) on March 19, 2017. The petition was signed by Gregory A. King, president. The case is assigned to Judge Robert N. Opel II. At the time of the filing, the Debtor disclosed $1.65 million in assets and $2.26 million in liabilities. GFI CONSULTANTS: Chapter 15 Case Summary ---------------------------------------- Chapter 15 Debtor: GFI Consultants Limited c/o Sequor Law, P.A. 1001 Brickell Bay Drive 9th Floor Miami, FL 33131 Type of Business: GFI Consultants was formed on 2010 by Junie Conrad Omari Bowers ("Bowers") and Andrew Nathaniel Skeene ("Skeene") as an investment scheme involving the sale of teak plantation plots in Belem, a city in northern Brazil. GFI Consultants was just one of several Ponzi scheme vehicles set up by Bowers and Skeene to defraud investors around the world. Currently, the Serious Fraud Office, a specialist prosecuting authority tackling complex fraud in the UK, is investigating the Debtor, Bowers, Skeene and related entities for fraud and other financial crimes. Foreign Proceeding in which Appointment of Foreign Representative Occurred: High Court of Justice Birmingham Chancery Div., Insolvency No. 6647 of 2013 United Kingdom Chapter 15 Case No.: 17-20003 Chapter 15 Petition Date: August 7, 2017 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Hon. Jay A. Cristol Foreign Representative: Stephen Richard Penn Judicial Administrator 1st Floor, Block A Loversall Court Clayfields, Tickhill Road Doncaster, DN4 8QG England Foreign Representative's Counsel: Gregory S Grossman, Esq. SEQUOR LAW, P.A. 1001 Brickell Bay Drive 9th Floor Miami, FL 33131 Tel: (305) 372-8282 E-mail: ggrossman@sequorlaw.com Estimated Assets: Not Indicated Estimated Debts: Not Indicated A full-text copy of the petition is available for free at: http://bankrupt.com/misc/flsb17-20003.pdf GFI CONSULTANTS: Liquidator Seeks U.S. Recognition of UK Case ------------------------------------------------------------- The liquidator appointed in the United Kingdom for GFI Consultants Limited, an entity accused of running a Ponzi scheme, has filed a Chapter 15 petition in Miami, Florida, in the United States, to seek recognition of the company's liquidation proceedings in the United Kingdom. Stephen Richard Penn, the duly appointed judicial administrator of GFI Consultants Limited, has filed in U.S. Bankruptcy Court a verified petition for an order granting recognition of the Debtor's court-approved liquidation pending before the High Court of Justice, Chancery Division, Birmingham District Registry (the "UK Court") as Insolvency No. 6647 of 2013. GFI Consultants was formed on 2010 by Junie Conrad Omari Bowers ("Bowers") and Andrew Nathaniel Skeene ("Skeene") as an investment scheme involving the sale of teak plantation plots in Belem, a city in northern Brazil. GFI Consultants was just one of several Ponzi scheme vehicles set up by Bowers and Skeene to defraud investors around the world. Currently, the Serious Fraud Office, a specialist prosecuting authority tackling complex fraud in the UK, is investigating the Debtor, Bowers, Skeene and related entities for fraud and other financial crimes. Bowers and Skeene operated Ponzi schemes throughout the world and targeted predominantly UK pension holders and investors. Bowers and Skeene filed for bankruptcy proceedings in England on July 29, 2014. In their bankruptcy cases, Bowers and Skeene disclosed unsecured debts totaling GBP 5.2 million and GBP 3.3 million respectively. However, they both disclose minor assets, worth GBP 100,000 and GBP 30,000, respectively, with which to satisfy their creditor claims. Further, they each listed monthly incomes of GBP 10,000 per month prior to the deductions for monthly expenses. Consequently, Bowers and Skeene were discharged from bankruptcy on January 4, 2016. Investigations of Business During his investigations of the business and affairs of GFI Consultants, the Liquidator uncovered that the Debtor received at least GBP 27.4million from investors. Of those investment funds, at least GBP 13.6 million was transferred to personal accounts of Bowers and Skeene, including GBP 1.47 million sent to bank accounts believed to be controlled by Bowers and Skeene in Dubai. Bowers and Skeene also directed approximately GBP 9 million to other UK companies referred to as "Escrow Agents" for the alleged purpose of repaying investors of other fraudulent schemes. The Liquidator's investigations have also unveiled other transactions involving the Debtor or assets of the Debtor as well as payments made to individuals or companies in the United States involving assets of the Debtor. A hearing on the petition is scheduled for Aug. 23, 2017, at 10:30 a.m. at C. Clyde Atkins U.S. Courthouse, 301 N Miami Ave Courtroom 7 (AJC), Miami, FL. About GFI Consultants GFI Consultants was formed on 2010 by Junie Conrad Omari Bowers and Andrew Nathaniel Skeene as an investment scheme involving the sale of teak plantation plots in Belem, a city in northern Brazil. GFI Consultants was just one of several Ponzi scheme vehicles set up by Bowers and Skeene to defraud investors around the world. On Dec. 12, 2013, a petition was filed in the High Court of Justice, Chancery Division, Birmingham District Registry (the "UK Court"), on behalf of GFI Consultants Limited, under Insolvency No. 6647 of 2013 (the "UK Proceeding"). On March 3, 2014, the UK Court ordered the commencement of the bankruptcy proceeding of the Debtor. On March 13, 2014, Stephen Richard Penn was appointed as liquidator of GFI Consultants. Mr. Penn, as foreign representative, on Aug. 7, 2017, filed a Chapter 15 petition for GFI Consultants (Bankr. S.D. Fla. Case No. 17-20003) to seek U.S. recognition of the UK proceedings. The Hon. Jay A. Cristol is overseeing the Chapter 15 case. Gregory S Grossman, Esq., Sequor Law, P.A., is U.S. counsel to the foreign representative. GLOBAL PAYMENTS: Active Network Deal No Impact on Moody's Ba2 CFR ----------------------------------------------------------------- Moody's Investors Service says Global Payments Inc.'s proposed acquisition of ACTIVE Network LLC's communities and sports divisions from Vista Equity Partners for approximately $1.2 billion is credit negative but Global Payments' Ba2 Corporate Family Rating, the Ba2 rating for its senior secured credit facilities and the SGL-1 Speculative Grade Liquidity rating are not affected. The ratings have a stable outlook. GOODMAN AND DOMINGUEZ: Panel Taps KapilaMukamal as Advisors ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Goodman and Dominguez, Inc., dba Traffic and Traffic Shoes, Traffic, Inc., Traffic Las Plazas, Inc., and Traffic Plaza del Norte, Inc. seeks authorization from the U.S. Bankruptcy Court for the Southern District of Florida to retain KapilaMukamal as financial advisors to the Committee, nunc pro tunc to July 14, 2017. The Committee requires KapilaMukamal to: (a) review the financial and operational information furnished by the Debtors to the Committee; (b) assist the Committee in its evaluation of the Debtors' post-petition cash flow and/or other projections and budgets prepared by the Debtors or their financial advisor; (c) monitor the Debtors' activities regarding their financial condition and general business operations subsequent to the filing of the petitions under chapter 11; (d) assist the Committee in its review of monthly operating reports submitted by the Debtors or their financial advisor; (e) manage or assist with any investigation into the pre- petition acts, conduct, transfers of property, liabilities and financial condition of the Debtors, their management, affiliated entities or creditors, including the operation of the Debtors' businesses; (f) provide financial analyses related to the Debtors use of unencumbered cash, cash collateral and proposed DIP financing, if applicable, including advising the Committee concerning such matters; (g) analyze transactions with vendors, insiders, related and/or affiliated entities subsequent and prior to the date of the filing of the chapter 11 petitions; (h) assist the Committee or its counsel in any litigation proceedings against insiders, affiliated entities, and other potential adversaries; (i) assist the Committee in its review of the financial or operational aspects of any proposed sale of the Debtors' assets, evaluating any plan of reorganization/liquidation, or any other exit strategy proposed by the Debtors. If applicable, assist the Committee in negotiating, evaluating and quantifying any competing offers; (j) attend meetings with representatives of the Committee and its counsel. Upon request, prepare presentations to the Committee that provide analyses of issues that may arise in these chapter 11 cases; (k) assist the Committee in executing its duties under section 1103 of the Bankruptcy Code; and (l) perform any other services that may be necessary in our role as financial advisor to the Committee or that may be requested by Committee counsel or the Committee. KapilaMukamal will be paid at these hourly rates: Soneet Kapila $550 Melissa Davis $420 Joseph Gillis $370 Kevin McCoy $340 Melanie Kring $310 KapilaMukamal has agreed with the Committee that it will apply a discount to any Court-approved fees so that KapilaMukamal will be engaged based upon a fixed flat hourly rate of $305 per hour for each staff person. KapilaMukamal will also be reimbursed for reasonable out-of-pocket expenses incurred. Soneet Kapila, a partner at KapilaMukamal, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. KapilaMukamal can be reached at: Soneet Kapila KAPILAMUKAMAL 1000 South Federal Highway Suite 200, Fort Lauderdale, FL 33316 Tel: (954) 761-1011 E-mail: km@kapilamukamal.com About Goodman and Dominguez Goodwin and Dominguez, Inc. and its affiliated entities own and operate a closely-held business in the retail shoe industry and on-line sales via e-commerce at http://www.trafficshoe.com/ The business, which started in Miami in 1989 with just one store, strives to provide the hottest footwear to a fashion forward, budget conscious consumer. On Jan. 4, 2016, Goodwin and Dominguez and its affiliates co-debtors Traffic, Inc., Traffic Las Plazas, Inc., and Traffic Plaza Del Norte, Inc., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code and those cases remain pending and are jointly administered under Case No. 16-10056. When they sought bankruptcy protection in 2016, the Debtors operated 83 mall-based stores located in 9 states within the U.S. and Puerto Rico and employed 608 employees. Upon the effective date of the reorganization plan confirmed December 2016, the Debtors expected to continue operating 62 mall-based stores with 477 employees. The Official Committee of Unsecured Creditors formed in the original cases tapped Christopher A. Jarvinen and the Law Firm of Berger Singerman LLP as counsel and KapilaMukamal as financial advisor. On June 9, 2017, Goodwin and Dominguez and its affiliated debtors commenced new Chapter 11 cases (Bankr. S.D. Fla. Lead Case No. 17-17237). Goodwin and Dominguez estimated $1 million to $10 million in assets and liabilities. The Hon. Robert A Mark is the case judge. Meland Russin & Budwick, P.A., is serving as counsel to the Debtors. It also served as counsel to the Debtors in the original cases. Christopher A. Jarvinen, Esq. at Berger Singerman LLP serves as counsel to the Debtors' Official Committee of Unsecured Creditors. GREEN TERRACE: Hires Fowler White as Bankruptcy Counsel ------------------------------------------------------- Green Terrace Condominium Association, Inc. seeks authorization from the U.S. Bankruptcy Court for the Southern District of Florida to employ Eric A. Rosen and the law firm of Fowler White Burnett, PA as its bankruptcy counsel, nunc pro tunc to the July 21, 2017 petition date. The Debtor requires Fowler White to: (a) provide advice to the Debtor with respect to its powers and duties as a debtor-in-possession and the continued management of its financial affairs; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and the rules of this Court; (c) prepare motions, pleadings, orders, applications, adversary proceedings and other legal documents as may be necessary in the administration of this case; (d) represent the Debtor in negotiation with creditors in the preparation and confirmation of a plan of reorganization; and (e) protect the interests of the Debtor in all matters reasonably pending before this Court. Fowler White will be paid at these hourly rates: Eric A. Rosen $350 Shareholders $300 Associate Attorneys $200 Paralegals and Legal Assistants $100 Fowler White will also be reimbursed for reasonable out-of-pocket expenses incurred. The Debtor provided Fowler White with a $50,000 general retainer. Eric A. Rosen, a shareholder of Fowler White, assured the Court the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Fowler White can be reached at: Eric A. Rosen, Esq. FOWLER WHITE BURNETT PA 515 N. Flagler Drive, Suite 2100 West Palm Beach, FL 33401 Tel: (561) 802-9044 Fax: (561) 802-9976 Email: erosen@fowler-white.com About Green Terrace Condominium Green Terrace Condominium Association, Inc., based in West Palm Beach, Fla., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 17-19188) on July 21, 2017. The Hon. Paul G. Hyman, Jr. presides over the case. Eric A Rosen, Esq., at Fowler White Burnett, P.A., serves as bankruptcy counsel. In its petition, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Kolman Kenigsberg as receiver for the Debtor. The Debtor's list of 16 unsecured creditors is available for free at http://bankrupt.com/misc/flsb17-19188.pdf HARVEST CCP: Unsecureds to Recover 100% from Sale Proceeds ---------------------------------------------------------- Harvest CCP, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a combined disclosure statement and plan of liquidation dated July 31, 2017. Class II General Unsecured Claims are impaired by the Plan. Holders will be paid 100% of their claims from the proceeds of sale of the Island Pt Rd. Funds for payments under the Plan will be generated from sale of assets. A full-text copy of the Combined Disclosure Statement and Plan is available at: http://bankrupt.com/misc/mieb17-46596-55.pdf About Harvest CCP, LLC Harvest CCP, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Mich. Case No. 17-46596) on May 1, 2017. Scott M. Kwiatkowski, Esq., at Goldstein Bershad & Fried, PC, serves as the Debtor's counsel. The Debtor's assets and liabilities are both below $1 million. HELICRAFT HOLDINGS: Gets Approval for Liquidating Plan ------------------------------------------------------ A U.S. bankruptcy judge confirmed the Chapter 11 plan of liquidation proposed by Helicraft Holdings LLC. Judge Benjamin Hursh of the U.S. Bankruptcy Court for the District of Montana gave the thumbs-up to the plan after finding that it satisfies the requirements for confirmation under the Bankruptcy Code. The plan is also "sufficiently funded" to pay creditors, the bankruptcy judge said in his order. In the same filing, Judge Hursh also approved the disclosure statement which explains the company's liquidating plan, saying it provides "adequate information." A copy of the court order is available without charge at https://is.gd/WUXztj About Helicraft Holdings Helicraft Holdings, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mont. Case No. 17-60120) on Feb. 28, 2017. At the time of the filing, the Debtor estimated assets and liabilities of less than $1 million. Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., serves as the Debtor's legal counsel. The Debtor hired Paul Petit, Esq., as special counsel. HOWARD KERRY GARNER: Dist. Ct. Lacks Subject Matter Jurisdiction ---------------------------------------------------------------- Debtor Howard Kerry Garner appeals three separate orders of the Bankruptcy Court regarding his bankruptcy case. Garner appeals the following Orders of the Bankruptcy Court: (1) Order denying Debtor's Emergency Motion for Entry of an Order Authorizing Debtor to Execute Addendum to Contribution Agreement; (2) Order denying Debtor's Motion to Reconsider Order Denying Debtor's Emergency Motion for Entry of an Order Authorizing Debtor to Execute Addendum to Contribution Agreement; and (3) Order denying Debtor's Emergency Motion for Entry of an Order Authorizing Correction Agreement. Judge Royce C. Lamberth of the U.S. District Court for the Western District of Texas dismissed the appeals. Because each motion is an attempt to seek collateral review of the Bankruptcy Court's Remand Order, the Court finds that it lacks subject matter jurisdiction under 28 U.S.C. 1447(d). Consequently, the Court finds it is unnecessary to address whether the Bankruptcy Court erred in denying each of the orders on appeal. The Debtor's Addendum Motion, Reconsideration Motion, and the Correction Motion all seek to establish that debtor reserved his interests in all causes of action in the Weeks Litigation, which would effectively cure the Bankruptcy Court's lack of subject matter jurisdiction. However, the Bankruptcy Court had already remanded the Weeks Litigation to state court given that it lacked subject matter jurisdiction over those proceedings pursuant to 28 U.S.C. section 1447(c). Therefore, if this Court were to reverse the Bankruptcy Court's findings regarding any of the three orders on appeal it would be directly challenging the Bankruptcy Court's underlying rationale for the Remand Order. Judge Lamberth finds that attacking the underlying rationale of the Remand Order constitutes a creative attempt to by-pass the plain meaning of section 1447(d). Because the orders on appeal are effectively a collateral attack on the Remand Order, this Court finds that it lacks subject matter jurisdiction over the issues on appeal. The appeals case is HOWARD KERRY GARNER, Appellant, v. MIKE WEEKS, ET. AL., Appellee, Case No. 5:17-cv-00036 (RCL) (W.D. Tex.). A full-text copy of Judge Lamberth's Memorandum Opinion dated August 1, 2017, is available at https://is.gd/ROIcio from Leagle.com. Howard Kerry Garner, Appellant, represented by Craig M. Sico, Sico Hoelscher Harris & Braugh LLP. Howard Kerry Garner, Appellant, represented by Nathaniel Peter Holzer -- pholzer@jhwclaw.com -- Jordan, Hyden, Womble, Culbreth & Holzer, PC & Shelby A. Jordan -- sjordan@jhwclaw.com -- Jordan Hyden Womble, Culberth & Holzer, P.C.. Mike Weeks, Appellee, represented by Natalie Friend Wilson -- nwilson@langleybanack.com -- Langley & Banack, Inc, R. Glen Ayers, Jr. -- gayers@langleybanack.com -- Langley & Banack & Sylvia Ann Cardona -- scardona@langleybanack.com -- Langley & Banack, Inc.. Linda Weeks, Appellee, represented by Natalie Friend Wilson, Langley & Banack, Inc, R. Glen Ayers, Jr., Langley & Banack & Sylvia Ann Cardona, Langley & Banack, Inc.. Weeks Environmental, LLC, Appellee, represented by Natalie Friend Wilson, Langley & Banack, Inc, R. Glen Ayers, Jr., Langley & Banack & Sylvia Ann Cardona, Langley & Banack, Inc. Howard Kerry Garner filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 16-51707) on July 31, 2016, and is represented by Nathaniel Peter Holzer of Jordan, Hyden, Womble, Culbreth & Holzer, PC. IHEARTCOMMUNICATIONS INC: Incurs $174M Net Loss in Second Quarter ----------------------------------------------------------------- iHeartCommunications, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $174.03 million on $1.59 billion of revenue for the three months ended June 30, 2017, compared to a net loss attributable to the Company of $278.90 million on $1.61 billion of revenue for the same period during the prior year. For the six months ended June 30, 2017, the Company reported a net loss attributable to the Company of $562.3 million on $2.91 billion of revenue compared to a net loss attributable to the Company of $367.4 million on $2.97 billion of revenue for the six months ended June 30, 2016. As of June 30, 2017, iHeartCommunications had $12.30 billion in total assets, $23.74 billion in total liabilities and a total stockholders' deficit of $11.44 million. Cash used for investing activities of $81.3 million during the six months ended June 30, 2017, reflected $136.6 million used for capital expenditures, partially offset by net cash proceeds from the sale of assets of $60.3 million, which included net cash proceeds from the sale of the Company's outdoor Indianapolis market of $43.1 million. The Company spent $30.3 million for capital expenditures in its iHM segment primarily related to IT infrastructure, $41.0 million in its Americas outdoor segment primarily related to the construction of new advertising structures, such as digital displays, $57.7 million in our International outdoor segment primarily related to street furniture and transit advertising structures, $0.4 million in our Other category and $7.2 million in Corporate primarily related to equipment and software purchases. Cash provided by investing activities of $436.9 million during the six months ended June 30, 2016, reflected net cash proceeds from the sale of nine non-strategic outdoor markets including Cleveland and Columbus, Ohio, Des Moines, Iowa, Ft. Smith, Arkansas, Memphis, Tennessee, Portland, Oregon, Reno, Nevada, Seattle, Washington and Wichita, Kansas of $592.3 million in cash and certain advertising assets in Florida. Those sale proceeds were partially offset by $123.7 million used for capital expenditures. We spent $23.1 million for capital expenditures in our iHM segment primarily related to leasehold improvements and IT infrastructure, $28.7 million in the Company's Americas outdoor segment primarily related to the construction of new advertising structures, such as digital displays, $66.7 million in our International outdoor segment primarily related to billboard and street furniture advertising structures, $1.2 million in our Other category and $4.0 million in Corporate primarily related to equipment and software purchases. Cash used for financing activities of $55.6 million during the six months ended June 30, 2017, primarily resulted from dividends paid to non-controlling interests, which represents the portion of the dividends paid by CCOH in February 2017 to parties other than our subsidiaries that own CCOH stock, and a payment under our receivables based credit facility. Cash used for financing activities of $76.3 million during the six months ended June 30, 2016, primarily resulted from dividends paid to non-controlling interests, which represents the portion of the dividends paid by CCOH in January 2016 and February 2016 to parties other than the Company's subsidiaries that own CCOH common stock. "We continue to build out our unique digital capabilities as a true multi-platform, 21st-century media company fueled by our unique data, with iHeartMedia's unparalleled U.S. reach and the extensive global footprint of our Outdoor businesses," said Bob Pittman, chairman and chief executive officer of iHeartMedia, Inc. "At our iHeartMedia segment, for example, we are expanding our SmartAudio suite of advertising products to create Smart A/V Audiences, which combines data from both iHeartMedia and Fox Networks Group to transform how our advertising partners reach their target audiences. And Americas outdoor and International outdoor are maximizing the value of our expanding digital inventory with innovative data analytics and automated ad-buying offerings." Rich Bressler, president, chief operating officer and chief financial officer said: "In the second quarter, our consolidated revenues declined, while operating income increased. However, adjusting for the impact of certain businesses we sold in 2016 and foreign exchange, consolidated revenues grew, with increases at our iHeartMedia and International outdoor segments. To date, the iHeartMedia segment has delivered seventeen consecutive quarters of year-over-year revenue growth. We remain committed to balancing financial discipline with investments to grow our businesses while continuing to work on our capital structure." A full-text copy of the Form 10-Q is available for free at: goo.gl/NmBC8q About iHeartCommunications iHeartCommunications, Inc., formerly known as Clear Channel Communications, Inc., is a global media and entertainment company. The Company specializes in radio, digital, outdoor, mobile, social, live events, on-demand entertainment and information services for local communities, and uses its unparalleled national reach to target both nationally and locally on behalf of its advertising partners. The Company is dedicated to using the latest technology solutions to transform the company's products and services for the benefit of its consumers, communities, partners and advertisers, and its outdoor business reaches over 40 countries across five continents, connecting people to brands using innovative new technology. iHeartCommunications reported a net loss attributable to the Company of $296.31 million on $6.27 billion of revenue for the year ended Dec. 31, 2016, compared to a net loss attributable to the Company of $754.62 million on $6.24 billion of revenue for the year ended Dec. 31, 2015. * * * In March 2017, Fitch Ratings downgraded iHeartCommunications, Inc.'s Long-Term Issuer Default Rating (IDR) to 'C' from 'CC'. The downgrades reflect iHeart's announcement on March 15, 2017, that the company has commenced a global restructuring effort targeting approximately $14.6 billion in debt including all of the outstanding Term Loans and PGNs as well as the senior notes due 2021. Also in March 2017, S&P Global Ratings lowered its corporate credit rating on Texas-based media company iHeartMedia Inc. and its subsidiary iHeartCommunications Inc. to 'CC' from 'CCC'. The rating outlook is negative. The downgrade follows iHeartCommunications' announcement that it has offered to exchange five series of priority-guarantee notes, its senior notes due 2021, and its term loan D and E for longer-dated debt; and, in certain scenarios, stock and warrants, or contingent value rights. "Under all but one scenario, there would be a reduction in the principal amount of debt outstanding and an extension of the debt maturity by two years for exchanged debt," said S&P Global Ratings' credit analyst Jeanne Shoesmith. "The company's debt is trading at significant discounts to par of 20%-60%, and we believe its capital structure is unsustainable." INFINITI HOMES: To Pay Wayne County in Full in 7 Years ------------------------------------------------------ Infiniti Homes International, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a combined disclosure statement and plan of reorganization dated July 31, 2017. The Debtor has no unsecured claims. The Class I will consist of all claims of the Wayne County Treasurer. The claims of Wayne County Treasurer are secured by property owned by the Debtor and are not entitled to priority under the U.S. Bankruptcy Code. Total secured claims in this class are estimated to be approximately $1,800,000. There are no unsecured claims as the Debtor seeks to retain the collateral and pay the claim of Wayne County Treasurer in full. Class I is impaired. Class I will be paid $10,000 on the Effective Date. The Wayne County Treasurer will be paid $100,000 within 16 months after the Effective Date. This payment is separate and distinct from the monthly payment. Monthly payments to the Wayne County Treasurer will be $7,500 per month starting 30 days after the Effective Date this monthly payment includes interest and will continue for 84 months from the Effective date. The Debtor will maintain current on all post petition tax claims. The Wayne County Treasurer will be paid in full within 7 years of the Effective Date. The Wayne County Treasurer will receive interest at 18% per annum for the forfeited tax years and 12% per-annum on the delinquent tax years on each parcel until the amounts are paid. In order to fund the plan the Debtor anticipates the sale of properties. All funds realized from the sale of the real estate will be used to pay the claim of the Wayne County Treasurer. The Wayne County Treasurer agrees to waive penalties and interest on the properties to be sold. The Debtor agrees that any funds generated from the sale of the properties on which the penalties and interest were waived will be applied to the claim of the Wayne County Treasurer. The projected funds below are the sales proceeds from the properties. The Debtor's principle, Derek Washam, based on his knowledge of the Detroit real estate market estimated the appreciation of the properties based on current real estate market conditions. The sale of real estate owned by the Debtor in 2018, 2019, 2020 with all proceeds being paid to the Wayne County Treasurer in the approximate amount of $705,000, plus waiver of penalties and interest in the amount of approximately $400,000, $630,000 in monthly payments as required under the Plan, and the separate payment of $100,000 within 16 months of the effective will allow the Debtor to pay the Wayne County Treasurer in full with interest within 7 years of the Effective Date. If necessary the Debtor will liquidate further properties to insure full payment within 7 years. The Class II Interest of the Equity Security Holder will be unaltered and he will retain his shares of stock in the reorganized debtor. Funds for payments under the Plan will be generated from (i) future income of the Debtor, (ii) funds on hand post-confirmation as of the confirmation and Effective Dates; (iii) funds loaned to the Debtor by the Debtor's principals or family members; (iv) sale of assets; and (v) to the extent that funds are available and that it is necessary to do so, funds from outside sources. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/mieb17-44832-23.pdf About Infiniti Homes International, Inc. Infiniti Homes International, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Mich. Case No. 17-44832) on March 31, 2017. The Hon. Thomas J. Tucker presides over the case. Goldstein Bershad & Fried, PC, represents the Debtor as counsel. In its petition, the Debtor estimated $1 million toÂ $10 million in both assets and liabilities. The petition was signed by Derek Washam, president and 100% owner. INSTITUCION SANTA ELENA: Hires ATM Accounting as Accountant ----------------------------------------------------------- Institucion Santa Elena Del Monte, Inc. seeks authorization from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Angel J. Torres Mercado and ATM Accounting Services as accountant. The Debtor requires ATM Accounting to prepare the monthly operating reports, assess the sales projections and provide the filing of all tax returns with the respective authorities in this proceeding. ATM Accounting will bill at the rate of $50 per hour and will also bill for work performed by its associates. ATM Accounting will also be reimbursed for reasonable out-of-pocket expenses incurred. Angel L. Torres Mercado assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. ATM Accounting can be reached at: Angel J. Torres Mercado ATM ACCOUNTING SERVICES P.O. Box 131 Penuelas, PR 00624 Tel: (787)836-5001 E-mail: eagleacc@yahoo.com About Institucion Sanata Elena Institucion Santa Elena Del Monte, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-04793) on July 5, 2017, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Nydia Gonzalez Ortiz, Esq., at the Law Offices of Santiago & Gonzalez Law LLC. INSTITUCION SANTA ELENA: Names Nydia Gonzalez Ortiz as Attorney --------------------------------------------------------------- Institucion Santa Elena Del Monte, Inc. seeks authorization from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Nydia Gonzalez Ortiz, Esq. and the Law Offices of Santiago & Gonzalez Law LLC as attorney. Santiago & Gonzalez will be paid on these hourly rates: Nydia Gonzalez Ortiz $250 Associates $150 Paralegals $50 Santiago & Gonzalez will also be reimbursed for reasonable out-of-pocket expenses incurred. Santiago & Gonzalez received a $3,000 retainer from the Debtor. Nydia Gonzalez Ortiz, associate of Santiago & Gonzalez, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Santiago & Gonzalez can be reached at: Nydia Gonzalez Ortiz, Esq. SANTIAGO & GONZALEZ LAW LLC 11 Betances Street Yauco, PR 00698 Tel: (787) 267-2205 E-mail: bufetesg@gmail.com About Institucion Sanata Elena Institucion Santa Elena Del Monte, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-04793) on July 5, 2017, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Nydia Gonzalez Ortiz, Esq., at the Law Offices of Santiago & Gonzalez Law LLC. INTERNET BRANDS: Moody's Cuts CFR to B3; Outlook Stable ------------------------------------------------------- Moody's Investors Service downgraded Internet Brands, Inc. Corporate Family Rating (CFR) to B3 from B2, Probability of Default Rating (PDR) to B3-PD from B2-PD and the company's existing debt ratings by one notch (first-lien credit facilities to B2 from B1 and second lien-lien term loan facility to Caa2 from Caa1). In connection with this rating action, Moody's assigned a B2 rating to the new incremental revolving credit facility and incremental first-lien term loan, and a Caa2 rating to the new second-lien term loan facility. The rating outlook is revised to stable. This confirms the ratings review that commenced on July 25, 2017. Proceeds from the new credit facilities plus new equity totaling approximately $1.1 billion and $315 million of balance sheet cash will be used to: (i) fund the WebMD acquisition plus fees and expenses ($2.8 billion); (ii) repay the existing second-lien term loan ($170 million); and (iii) repay a portion of the existing first-lien term loan ($50 million). As part of this transaction, Internet Brands will extend the maturities of its existing first-lien credit facilities to match the maturities of the new incremental facilities. Prior to transaction closing, the company will separate its Autodata subsidiary and remove it from the restricted group by spinning it out to existing shareholders. The following rating actions were taken: Ratings Downgraded: Issuer: Internet Brands, Inc. -- Corporate Family Rating to B3 from B2 -- Probability of Default Rating to B3-PD from B2-PD Issuers: Micro Holding Corp. (Co-Borrower MH Sub I, LLC) $75 Million BACKED Revolving Credit Facility due 2019 to B2 (LGD-3) from B1 (LGD-3) (To be withdrawn at close) $1,184 Million ($1,058 Million currently outstanding; $460 Million original issue) BACKED First-Lien Term Loan due 2021 to B2 (LGD-3) from B1 (LGD-3) (To be withdrawn at close) $170 Million BACKED Senior Secured Second-Lien Senior Term Loan due 2022 to Caa2 (LGD-6) from Caa1 (LGD-6) (To be withdrawn at close) Ratings Assigned: Issuers: Micro Holding Corp. (Co-Borrower MH Sub I, LLC) $150 Million Incremental Revolving Credit Facility due 2022 -- B2 (LGD-3) $1,040 Million Incremental First-Lien Term Loan due 2024 -- B2 (LGD-3) $650 Million Second-Lien Senior Term Loan due 2025 -- Caa2 (LGD-6) Outlook Actions: Issuer: Micro Holding Corp. -- Outlook, Changed to Stable from Rating Under Review -- Issuer: Internet Brands, Inc. -- Outlook, Changed to Stable from Rating Under Review Ratings are subject to review of final documentation and no material change to the terms and conditions of the transaction as advised to Moody's. Moody's will withdraws the ratings on the existing $170 million second-lien term loan upon extinguishment at closing. RATINGS RATIONALE The downgrade reflects Moody's expectation that Internet Brands will: (i) delay deleveraging and operate with higher-than-expected financial leverage over the rating horizon; (ii) meaningfully transform the business model by increasing exposure to cyclical advertising revenue after previously transitioning to a mostly subscription-based SaaS revenue model; and (iii) engage in bigger debt-funded M&A targets. On February 23, 2017, Moody's affirmed Internet Brands' B2 CFR when the company upsized its first-lien term to fund several acquisitions. Despite the elevated leverage, Moody's communicated that the affirmation was premised on the following expectations: (i) "While pro forma GAAP leverage [7.2x] is higher than the 5.6x median for B2-rated cross-industry peers, given the transition of the business to a subscription-based cloud services model, Moody's believes Internet Brands can accommodate a more leveraged capital structure;" (ii) "Barring future debt-financed acquisitions, Moody's anticipates organic/inorganic EBITDA growth combined with scheduled debt reduction will reduce Moody's adjusted leverage on a GAAP basis to around 6.0x by year end 2017 and 5.0x by 2018." On March 2, 2017, after the company announced a $40 million increase to the first-lien term loan add-on, Moody's stated in an Issuer Comment: "To the extent Internet Brands delays deleveraging or incurs additional debt such that Moody's expects total debt to GAAP EBITDA will be sustained above 7x (Moody's adjusted), ratings would likely experience downward pressure." As a result of the WebMD purchase, the company will more than double its gross debt (currently $1.2 billion) resulting in pro forma financial leverage increasing to over 7x total debt to EBITDA (Moody's adjusted as of June 30, 2017 on a combined company basis inclusive of Moody's estimates for net cost synergies in year one and LTM EBITDA of acquisitions; excluding Autodata EBITDA and one-time and non-recurring charges). This would delay Moody's previous expectations for deleveraging to the 6.0x area by the end of 2017 and 5.0x by 2018. Moody's projects Internet Brands will reduce leverage to around 7.6x by year end 2017 and 7.4x by 2018, which is more consistent with the 6.5x median for B3-rated global-industry peers. Though Moody's expects the company to generate good free cash flow with free cash flow to adjusted debt in the 5-8% range (after cost synergies are realized), Moody's projects a de minimis portion will be applied towards debt reduction above and beyond the mandatory debt payments since there is no historical track record of voluntarily reducing debt and Moody's foresees a growing appetite to use cash for acquisitive purposes. WebMD relies primarily on an advertising revenue model whereas Internet Brands is chiefly a subscription-based revenue model after it consciously shifted away from media advertising over the last four years. On a combined basis, however, Moody's estimates Internet Brands' advertising revenue will increase to close to 70% of total revenue. Because ad spend is highly correlated with economic and business cycle conditions, Internet Brands' revenue will be more dependent upon clients' advertising and marketing service spending, which can be cyclical. WebMD's sponsorship and brand advertising revenue experienced a 90+% annual recurring rate over the 2012-2016 period, helping to mitigate this risk. In addition, end market diversification will be reduced with the Health segment accounting for roughly 80% of pro forma combined revenue. WebMD will more than double Internet Brands' annual revenue to just over $1 billlion and marks its largest acquisition to date. The move reinforces Moody's previously expressed concerns that management will increasingly focus on bigger M&A targets with higher EV/EBITDA multiples. The WebMD transaction also signals a greater aspiration to build out Internet Brands' healthcare vertical on a global basis given the equity sponsor's belief that healthcare's use of digital media is in its early stages of development. Historically, the company has been a serial acquirer that pursued small to mid-sized website and cloud-based properties. This shift in acquisition strategy increases business risk, in Moody's opinions. Larger acquisitions take longer to integrate because they typically require rationalization to increase their margins to the corporate average and occasionally need additional investment to expand product mix and grow revenue. Moody's acknowledge management's solid track record for integrating small- scale acquisitions and expect them to eliminate costs to improve WebMD's EBITDA margins (currently sub-30%) to the company's margin level (roughly 40% or higher). Most of the benefit from cost reductions will likely be realized in the first 18 months with the bulk of the cumulative annual run-rate expected in the first quarter of 2019. Moody's projects margins will return to Internet Brands' historical level in 2019/2020. Moody's expects the company to maintain a very good liquidity profile with access to $225 million revolving credit facilities, solid free cash flow generation and at least $50 million of balance sheet cash. An upgrade is unlikely over the rating horizon given Moody's expectations for continued growth via debt-financed acquisitions resulting in a highly levered capital structure. Over the long-term, ratings could be upgraded if Internet Brands were to maintain its leading market position, demonstrate organic revenue/earnings growth and continue to successfully integrate acquisitions. An upgrade would also be considered if the company were to expand the subscription-based services to at least 50% of total revenue, improve end market diversification and sustain financial leverage below 6.5x total debt to GAAP EBITDA (Moody's adjusted). Ratings may be downgraded if Internet Brands' competitive position weakens (as measured by market share), recurring/reoccurring revenue and/or performance--based ad revenue declines from current levels, acquisitions exhibit underperformance or marketing and development costs increase (as measured by operating margin performance). Ratings could also experience downward pressure if total debt to GAAP EBITDA is sustained above 8x (Moody's adjusted). The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Los Angeles, CA, Internet Brands, Inc. is an internet media company that owns more than 250 branded websites across four verticals (Automotive; Legal; Health; and Home, Travel and Other) characterized by high consumer activity and good advertising spend. The company licenses and delivers its content and internet technology products and services to small and medium-sized businesses (SMBs), major corporations and individual website owners primarily via two revenue models: (i) a subscription-based Software-as-a-Service (SaaS) platform; and (ii) performance-based advertising. Revenue for the twelve months ended June 30, 2017 was approximately $506 million. JZ SPORTS BAR: Hires Genova & Malin as Attorney ----------------------------------------------- JZ Sports Bar & Lounge Inc. seeks authorization from the U.S. Bankruptcy Court for the Southern District of New York to employ Genova & Malin as attorney. The Debtor requires Genova & Malin to: (a) give the Debtor legal advice with respect to its powers and duties in its financial situation and management of the property of the Debtor; (b) take necessary action to void liens against the Debtor's property; (c) prepare, on behalf of the Debtor, necessary petitions, schedules, orders, pleadings and other legal papers; and (d) perform all other legal services for the Debtor as necessary. Genova & Malin will be reimbursed for reasonable out-of-pocket expenses incurred. Michelle L. Trier, partner of Genova & Malin, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. The Court will hold a hearing on the application on August 21, 2017, at 12:00 p.m. Genova & Malin can be reached at: Michelle L. Trier, Esq. GENOVA & MALIN 1136 Route 9 Suite 1 Wappingers Falls, NY 12590 Tel: (845) 298-1600 Fax: (845) 298-1265 About JZ Sports Bar & Lounge JZ Sports Bar & Lounge Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-36251) on July 24, 2017, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Michelle L. Trier, Esq., at Genova & Malin as counsel. KB HOME: S&P Raises CCR to 'B+' on Strong Financial Results ----------------------------------------------------------- S&P Global Ratings raised its corporate credit rating on KB Home and its issue-level ratings on the company's senior unsecured notes to 'B+' from 'B'. The recovery rating on the unsecured debt is unchanged at '3', reflecting S&P's expectation for meaningful (50%-70%; rounded estimate: 65%) recovery to debtholders in the event of default. The outlook is positive. S&P said, "We believe KBH will continue to achieve significant revenue and earnings growth through 2018, following better-than-expected financial and operating results in the first half of 2017. We expect KB Home to build on the momentum from the first half of the year to achieve 10%-11% growth in home deliveries and an average closing price between $390,000 and $400,000 by year end, further complemented by continued strong absorption, particularly for its California portfolio. These positive market and operational dynamics, combined with our expectation for KBH to pay off the remainder of its 9.1% senior unsecured notes in September, should cause credit measures to continue to improve over the next year. "We expect debt leverage to fall below 5x by the end of the fiscal year compared with 5.6x for the 12 months ended May 31, 2017, and 6.2x at year-end 2016. In addition, we expect EBITDA interest coverage to improve toward 3x and adjusted debt to capital to fall to 54% by the end of the fiscal year, compared with 2x and 57%, respectively, in the previous period. "The positive outlook on KB Home reflects our forecast for stronger EBITDA driven by continued home closing volume growth and higher EBITDA margins, causing leverage to improve to the mid-4x area as the company increases its home sale volume over the next 12 months. "In the event that KBH achieves EBITDA growth more rapidly than our projections such that interest is sustained above 3x and are confident debt leverage will be maintained around 4x, we may reassess our view of the company's relative placement among corporate peers and raise the rating to BB-. "Although we view it as unlikely over the next 12 months, we could return the outlook to stable if forecast EBITDA growth stalls and fails to materialize, which we believe could result from a demand slowdown in KBH's key markets or greater-than-expected cost increases for land, labor, or materials causing adjusted gross margins to fall toward 19%." KEELER'S MEDICAL: U.S. Trustee Directed to Appoint Ombudsman ------------------------------------------------------------ Judge Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington entered an Order directing the U.S. Trustee to appoint a consumer privacy ombudsman/examiner in connection with Keeler's Medical Supply, Inc.'s Motion to Sell substantially all of its assets. The U.S. Trustee is ordered to appoint a consumer privacy ombudsman to review the Debtor's Motion to Sell, including the proposed purchase and sale agreement, and report to the Court at or before the hearing on the Motion to Sell (currently set for August 28, 2017 at 10:00 a.m.) as to whether the Agreement would be allowable and consistent with any privacy policy of the Debtor in effect on the date this case was commenced. The Order also provides that the Debtor may utilize cash collateral currently held by the Estate in order to compensate the Ombudsman subject to any provisions of the Bankruptcy Code requiring approval of the ombudsman's fees and costs. About Keeler's Medical Supply Keeler's Medical Supply, Inc., is a Washington corporation engaged in the business of selling and leasing medical supplies and equipment as well as providing services related to such medical supplies and equipment. Keeler's headquarters and principal plase of business are located at 2001 West Lincoln Avenue in Yakima, Washington. Keeler's was formed in 1971. The common stock of Keeler's is owned as follows: (a) 91.35% by the Estate of Sharon Vetsch; (b) 6.51% by Charles E. Vetsch, Jr. (the President and Chief Executive of Keeler's); and (c) 2.14% by Clinton T. Vetsch. Keeler's Medical Supply filed a Chapter 11 petition (Bankr. E.D. Wash. Case No. 17-01849) on June 15, 2017, estimating assets of less than $50,000 and liabilities of $1 million to $10 million. The petition was signed by Charles Vetsch, president. Roger William Bailey, Esq., at Bailey & Busey PLLC serves as the Debtor's legal counsel. The Office of the U.S. Trustee on July 17 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Keeler's Medical Supply, Inc. KNIGHT ENERGY: Files for Chapter 11 After Reaching Plan Deal ------------------------------------------------------------ Knight Energy Holdings, LLC and its operating affiliates disclosed that they have signed a Restructuring Support Agreement ("RSA") with certain debt holders representing over 87% of the Company's Senior Secured Credit Facility due 2018 in conjunction with its voluntary filing of a pre-negotiated Chapter 11 petition on Aug. 8 in the U.S. Bankruptcy Court for the Western District of Louisiana, Lafayette Division ("Court"). The Company intends to move expeditiously to present its plan of reorganization to the Court and seek confirmation of the same. The RSA provides for a substantial deleveraging transaction pursuant to which Knight will meaningfully improve its balance sheet by equitizing over $175 million of its existing secured obligations and will substantially bolster its liquidity position through an exit financing facility. Knight is one of the largest, privately-owned oilfield rental tool companies in the world. It supplies a wide offering of rental equipment and services for drilling, completion and well control activities -- serving a diverse base of oil and natural gas E&P operators. The Company was founded in 1972 by Eddy Knight, and is owned today by second-generation family members. The Knight family remarked: "Like many leading oil and gas companies, we have been affected by the ongoing downturn in the market. The Company has spent considerable time since then focusing on how to best serve our customers, employees, and to maintain strong relations with our vendors and employees. In order to best position our Company for the future, we felt that a financial restructuring was necessary and worked with our stakeholders to achieve a consensual plan to deleverage the Company and position Knight and our employees for success. Together we have developed a long term strategic plan that will allow Knight to continue to be a market leader." The Company will continue to operate in the ordinary course of business during the proceeding and has filed various "first day" motions seeking approval of relief so as to operate with minimal impact or interruption to Knight's valued employees, customers, vendors and other important parties. Knight intends to continue to pay employee wages, salaries and benefits and will work to ensure that all customer programs will remain unchanged. The Company is also seeking approval of a $14.5 million DIP financing facility. The "first day" motions are scheduled to be heard by the Bankruptcy Court on the afternoon of Wednesday, August 9, 2017. The Company anticipates the relief requested being granted. As such, Knight will have ample liquidity to support the business during the Chapter 11 proceeding. Heller Draper is acting as lead restructuring counsel, a representative from Opportune is serving as the Company's Chief Restructuring Officer, and Farlie Turner has served as the Company's financial advisor. About Knight Energy Based in Lafayette, Louisiana, Knight Energy Holdings, LLC, operates as a holding company. Privately-held Knight Energy, through its subsidiaries, provides manufacturing packages, drilling jars, inspection, hardbanding, and safety training services to the oil and gas industry. Knight Energy's chief operating affiliate is Knight Oil Tools, which originated as Knight Specialties in Morgan City, Louisiana, out of the trunk of founder Eddy Knight's car. Since then, Knight Oil Tools -- http://www.knightoiltools.com/-- has evolved into a company that provides complete rental, fishing, manufacturing packages, drilling jars, inspection, hardbanding and safety training to the oil and gas industry in selected markets throughout the U.S. Knight Oil Tools' long term vision is to continue to build upon its strong commitment to provide quality equipment and outstanding service to customers in each product line it serves. Knight Energy and certain affiliates sought Chapter 11 protection (Bankr. W.D. La. Case No. 17-51014) on Aug. 8, 2017. Knight Energy estimated $50 million to $100 million in assets and at least $100 million in debt. Judge Robert Summerhays is the case judge. Heller, Draper, Patrick, Horn & Dabney, LLC, is serving as counsel to the Debtor, with the engagement led by William H. Patrick, III. Opportune, LLP, is the Debtors' crisis managers and is providing Gary L. Pittman as Chief Restructuring Officer. Donlin, Recano & Company, Inc. is the Claims, Noticing and Solicitation Agent. KNIGHT ENERGY: Proposes Sept. 29 Claims Bar Date ------------------------------------------------ Knight Energy Holdings, LLC, and its affiliated debtors filed with the Bankruptcy Court a motion for an order (a) establishing a deadline of Sept. 29, 2017 at 4:30 prevailing Central Time, for the filing of proofs of claim by all persons, corporations, partnerships, limited liability companies and all other entities in these cases, (b) establishing Feb. 5, 2018 at 4:30 p.m. prevailing Central Time for the filing of proofs of claim by governmental units in the Chapter 11 cases. Proofs of Claim must be filed with the Clerk of the United States Bankruptcy Court for the Western District of Louisiana, Lafayette Division, 214 Jefferson Street, Suite 100, Lafayette, Louisiana 70501. About Knight Energy Based in Lafayette, Louisiana, Knight Energy Holdings, LLC, operates as a holding company. Privately-held Knight Energy, through its subsidiaries, provides manufacturing packages, drilling jars, inspection, hardbanding, and safety training services to the oil and gas industry. Knight Energy's chief operating affiliate is Knight Oil Tools, which originated as Knight Specialties in Morgan City, Louisiana, out of the trunk of founder Eddy Knight's car. Since then, Knight Oil Tools -- http://www.knightoiltools.com/-- has evolved into a company that provides complete rental, fishing, manufacturing packages, drilling jars, inspection, hardbanding and safety training to the oil and gas industry in selected markets throughout the U.S. Knight Oil Tools' long term vision is to continue to build upon its strong commitment to provide quality equipment and outstanding service to customers in each product line it serves. Knight Energy and certain affiliates sought Chapter 11 protection (Bankr. W.D. La. Case No. 17-51014) on Aug. 8, 2017. Knight Energy estimated $50 million to $100 million in assets and at least $100 million in debt. Judge Robert Summerhays is the case judge. Heller, Draper, Patrick, Horn & Dabney, LLC, is serving as counsel to the Debtor, with the engagement led by William H. Patrick, III. Opportune, LLP, is the Debtors' crisis managers and is providing Gary L. Pittman as Chief Restructuring Officer. Donlin, Recano & Company, Inc., is the claims, noticing and solicitation agent. KNIGHT ENERGY: Proposes to Continue Payments to Insiders -------------------------------------------------------- Knight Energy Holdings, LLC, and its affiliated debtors filed with the Bankruptcy Court a motion for an order authorizing payments to insiders, namely: (1) Kelley Knight Sobiesk - Director and equity holder; (2) Bryan Knight - Director and equity holder; (3) Jeff Elmore - President; and (4) Mark Comeaux – Chief Financial Officer. The Debtors say that the services of all of the identified insiders are vital for the Debtors to continue their operations and necessary for the Debtors to have the chance to successfully reorganize. As of the filing of the bankruptcy cases, the identified insiders receive the following as salary for services performed: (1) Kelley Knight Sobiesk $5,465 per month (2) Bryan Knight $5,408 per month (3) Jeff Elmore $20,000 per month (4) Mark Comeaux $17,000 per month The Debtors filed a separate motion to continue payment of wages and benefits to their employees. As of the Petition Date, the Debtors employ 146 salaried employees, 183 hourly employees and have three independent contractors. The Debtors' aggregate gross monthly payroll is approximately $2,287,022 for wages and benefits for all of the employees. About Knight Energy Based in Lafayette, Louisiana, Knight Energy Holdings, LLC, operates as a holding company. Privately-held Knight Energy, through its subsidiaries, provides manufacturing packages, drilling jars, inspection, hardbanding, and safety training services to the oil and gas industry. Knight Energy's chief operating affiliate is Knight Oil Tools, which originated as Knight Specialties in Morgan City, Louisiana, out of the trunk of founder Eddy Knight's car. Since then, Knight Oil Tools -- http://www.knightoiltools.com/-- has evolved into a company that provides complete rental, fishing, manufacturing packages, drilling jars, inspection, hardbanding and safety training to the oil and gas industry in selected markets throughout the U.S. Knight Oil Tools' long term vision is to continue to build upon its strong commitment to provide quality equipment and outstanding service to customers in each product line it serves. Knight Energy and certain affiliates sought Chapter 11 protection (Bankr. W.D. La. Case No. 17-51014) on Aug. 8, 2017. Knight Energy estimated $50 million to $100 million in assets and at least $100 million in debt. Judge Robert Summerhays is the case judge. Heller, Draper, Patrick, Horn & Dabney, LLC, is serving as counsel to the Debtor, with the engagement led by William H. Patrick, III. Opportune, LLP, is the Debtors' crisis managers and is providing Gary L. Pittman as Chief Restructuring Officer. Donlin, Recano & Company, Inc., is the claims, noticing and solicitation agent. KNIGHT ENERGY: Proposes to Pay $1.41M to Critical Vendors --------------------------------------------------------- Knight Energy Holdings, LLC, and its affiliated debtors seek permission from the Bankruptcy Court to pay, in the reasonable exercise of their business judgment, certain prepetition amounts owed to certain vendors that are critical to the Debtors' business operations in an amount not to exceed $1,409,000. The Debtors, in consultation with their professional advisors, meticulously reviewed a list of approximately 2,272 vendors to determine which vendors were absolutely critical to their business operations. The Debtors seek authority to pay only those vendors that they have determined in their business judgment to be truly critical to their production operations in the Debtors' accounts payable system. About Knight Energy Based in Lafayette, Louisiana, Knight Energy Holdings, LLC, operates as a holding company. Privately-held Knight Energy, through its subsidiaries, provides manufacturing packages, drilling jars, inspection, hardbanding, and safety training services to the oil and gas industry. Knight Energy's chief operating affiliate is Knight Oil Tools, which originated as Knight Specialties in Morgan City, Louisiana, out of the trunk of founder Eddy Knight's car. Since then, Knight Oil Tools -- http://www.knightoiltools.com/-- has evolved into a company that provides complete rental, fishing, manufacturing packages, drilling jars, inspection, hardbanding and safety training to the oil and gas industry in selected markets throughout the U.S. Knight Oil Tools' long term vision is to continue to build upon its strong commitment to provide quality equipment and outstanding service to customers in each product line it serves. Knight Energy and certain affiliates sought Chapter 11 protection (Bankr. W.D. La. Case No. 17-51014) on Aug. 8, 2017. Knight Energy estimated $50 million to $100 million in assets and at least $100 million in debt. Judge Robert Summerhays is the case judge. Heller, Draper, Patrick, Horn & Dabney, LLC, is serving as counsel to the Debtor, with the engagement led by William H. Patrick, III. Opportune, LLP, is the Debtors' crisis managers and is providing Gary L. Pittman as Chief Restructuring Officer. Donlin, Recano & Company, Inc., is the claims, noticing and solicitation agent. MCCLATCHY CO: Posts $225.1 Million Revenues in Second Quarter ------------------------------------------------------------- The McClatchy Company filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $37.44 million on $225.12 million of net revenues for the quarter ended June 25, 2017, compared to a net loss of $14.73 million on $242.2 million of net revenues for the quarter ended June 26, 2016. For the six months ended June 25, 2017, McClatchy Co reported a net loss of $133.02 million on $446.3 million of net revenues compared to a net loss of $27.45 million on $480.2 million of net revenues for the six months ended June 26, 2016. As of June 25, 2017, the Company had $1.68 billion in total assets, $1.68 billion in total liabilities, and a $8.74 million stockholders' deficit. The Company's cash and cash equivalents were $8.4 million as of June 25, 2017, compared to $15.9 million and $5.3 million as of June 26, 2016, and Dec. 25, 2016, respectively. "We expect that most of our cash and cash equivalents, and our cash generated from operations, for the foreseeable future will be used to repay or repurchase debt, pay income taxes, fund our capital expenditures, invest in new revenue initiatives, digital investments and enterprise-wide operating systems, make required contributions to the Pension Plan, repurchase stock, and for other corporate uses as determined by management and our Board of Directors. As of June 25, 2017, we had approximately $858.7 million in total aggregate principal amounts of debt outstanding, consisting of $16.9 million of our 5.750% notes due in 2017 (also see Note 4), all of which becomes due on September 1, 2017, $476.4 million of our 9.00% Notes due 2022 and $365.4 million of our notes maturing in 2027 and 2029. We expect to continue to opportunistically repurchase our debt from time to time if market conditions are favorable, and we also expect that we will refinance a significant portion of this debt prior to the scheduled maturity of such debt. However, we may not be able to do so on terms favorable to us or at all. We may also be required to use cash on hand or cash from operations to meet these obligations. We believe that our cash from operations is sufficient to satisfy our liquidity needs over the next 12 months, while maintaining adequate cash and cash equivalents." A full-text copy of the Form 10-Q is available for free at: https://is.gd/Tctd0E About McClatchy The McClatchy Company -- http://www.mcclatchy.com/-- is publisher of iconic brands such as the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the (Fort Worth) Star-Telegram. McClatchy operates 30 media companies in 29 U.S. markets in 14 states, providing each of its communities with high-quality news and advertising services in a wide array of digital and print formats. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange under the symbol MNI. McClatchy reported a net loss of $34.19 million for the year ended Dec. 25, 2016, compared to a net loss of $300.16 million for the year ended Dec. 27, 2015. As of March 26, 2017, McClatchy had $1.74 billion in total assets, $1.72 billion in total liabilities and $21.72 million in total stockholders' equity. * * * McClatchy continues to hold Moody's Investors Service's "Caa1" corporate family rating. In December 2015, Moody's affirmed the "Caa1" corporate family rating rating and changed the rating outlook to stable from positive due to continued weakness in the print advertising market and the ongoing pressure on the company's operating cashflow. McClatchy continues to hold Standard & Poor's "B-" corporate credit rating (outlook stable). As reported by the TCR on April 2, 2014, S&P affirmed all ratings on McClatchy including the 'B-' corporate credit rating, and revised the rating outlook to stable from positive. The outlook revision to stable reflected S&P's expectation that the time-frame for a potential upgrade lies beyond the next 12 months, and could also depend on the company realizing value from its digital minority interests. MCK MILLENNIUM: A. Landis Not Disqualified as Tsakiris' Counsel --------------------------------------------------------------- By motion, Defendant and Debtor MCK Millennium Retail Centre Retail, LLC, moved to disqualify attorney Arnold Landis as Counsel to Paul Tsakiris. Judge Jack B. Schmetterer of the U.S. Bankruptcy Court for the District of Illinois denied the Debtor's motion. Tsakiris filed a proof of claim for breach of contract against the Debtor. Landis now represents Claimant Tsakiris in regards to Claim # 4 as part of this bankruptcy proceeding. The issue to decide on is whether Landis' previous representation of the Debtor warrants disqualification of his current representation of Tsakiris in the claim objection dispute. The issues relating to Landis' representation of the Debtor in the mortgage foreclosure proceeding involved: "(1) whether there was a valid mortgage between [the Debtor] and its lender,(2) whether [the Debtor] defaulted on the mortgage and (3) whether the lender was entitled to the appointment of a receiver." First, the prior legal representation of Landis for the Debtor must be recreated based on the facts. The factual reconstruction of the scope of the prior legal representation shows that Landis' work only dealt with the Debtor's mortgage foreclosure case, which lasted about half a year. The Debtor fails to give evidence or state facts to show that Landis' representation of the Debtor expanded anything beyond that. The Debtor further argues that Landis' representation of the Debtor in the foreclosure case did in fact involve subject matter of the Tsakiris disputed claim. The Debtor asserts that subject matter knowledge was sufficient to establish a "substantial relationship." However, the evidence presented by movant establishes that Landis' scope of representation for the Debtor only dealt with the mortgage foreclosure. The Debtor contends that Landis' listing of opposing counsel in the mortgage foreclosure case as a witness in the contested claim proceeding creates or constitutes a "substantial relationship." Using opposing counsel of the mortgage foreclosure case as a witness in the pending contested claim proceeding is not of consequence in the application of the substantially related test. Debtor does not show that Landis received specific privileged information unrelated to the mortgage foreclosure proceeding. The Debtor also argues that the appearance of impropriety should be sufficient to merit disqualification, but that is too low a standard to set when weighing it against the importance of right to choose counsel. Considering all the arguments, Judge Schmetterer finds that Debtor's burden of proof has not been met because the Debtor did not present sufficient evidence to establish that a substantial relationship exists that would merit disqualification. For these reasons, Movant's Motion to Disqualify Attorney Arnold Landis as Counsel for Claimant Paul Tsakiris is denied by separate Order. A full-text copy of Judge Schmetterer's Memorandum Opinion dated August 4, 2017, is available at: http://bankrupt.com/misc/ilnb16-06369-323.pdf About MCK Millennium Centre Retail MCK Millennium Centre Realty, LLC, operates condominium retail space located at 33 W. Ontario Street, Chicago, Illinois. MCK Millennium Centre Realty filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 16-06369) on Feb. 25, 2016, and disclosed $16.2 million in assets and $9.50 million in liabilities as of the Petition Date. Jonathan D. Golding, Esq., and Richard N. Golding, Esq., at The Golding Law Offices, P.C., are serving as bankruptcy counsel to the Debtor. Kraft Law Office is the Debtor's special real estate counsel. Leslie A. Bayles, Esq., and Donald A. Cole, Esq., at Bryan Cave LLP, are representing lender MLMT 2005 MKB2 Millennium CentreRetail LLC. MESOBLAST LIMITED: Ends Second Quarter With $45.7M in Cash ---------------------------------------------------------- Mesoblast Limited filed with the Securities and Exchange Commission its quarterly report for entities subject to Listing Rule 4.7B for the quarter ended June 30, 2017. At the beginning of the quarter, Mesoblast had US$69.12 million in cash and cash equivalents. Net cash used in operating activities was US$23.43 million. Net cash from financing activities was US$105,000. At June 30, 2017, the Company had US$45.76 million in cash and cash equivalents. Mesoblast is in advanced negotiations with selected pharmaceutical companies with respect to potential partnering of certain Tier 1 product candidates. If Mesoblast enters into a binding transaction in the next quarter, Mesoblast expects that one effect of the transaction is that its cash reserves are likely to increase. Mesoblast does not make any representation or give any assurance that such a binding transaction will be concluded. In addition, Mesoblast expects its cash reserves to increase in the next quarter as we expect to receive the following income: -- royalty income earned on sales of TEMCELL HS Inj. in Japan, and -- interest income. Mesoblast has established an equity facility for up to A$120 million/US$90 million over the next two years, to be used at its discretion to provide additional funds as required. A full-text copy of the Quarterly Report is available for free at: https://is.gd/lJ7IvQ About Mesoblast Ltd. Melbourne, Australia-based Mesoblast Limited (ASX:MSB; Nasdaq:MESO) develops cell-based medicines. The Company has leveraged its proprietary technology platform, which is based on specialized cells known as mesenchymal lineage adult stem cells, to establish a broad portfolio of late-stage product candidates. Mesoblast's allogeneic, 'off-the-shelf' cell product candidates target advanced stages of diseases with high, unmet medical needs including cardiovascular diseases, immune-mediated and inflammatory disorders, orthopedic disorders, and oncologic/hematologic conditions. Mesoblast reported a loss before income tax of $90.82 million for the year ended June 30, 2016, compared to a loss before income tax of $96.24 million for the year ended June 30, 2015. As of Dec. 31, 2016, Mesoblast had $660.9 million in total assets, $150.4 million in total liabilities, and $510.51 million in total equity. PricewaterhouseCoopers, in Melbourne, Australia, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2016, citing that the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. MICRO HOLDING: S&P Affirms 'B' CCR on WebMD Deal, Outlook Stable ---------------------------------------------------------------- U.S. online advertising and software services company Micro Holding Corp. (operating as Internet Brands) recently announced its pending acquisition of U.S.-based digital health care information company WebMD Health Corp. for $2.7 billion plus associated fees. It will be primarily funded with proceeds from debt issuance and about $1.1 billion common equity contribution from its sponsor. S&P Global Ratings affirmed its ratings, including, the 'B' corporate credit rating, on U.S. online advertising and software services company Micro Holding Corp. (operating as Internet Brands). The rating outlook is stable. S&P said, "At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed $150 million incremental revolving credit facility due 2022. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) of principal in the event of a payment default. "We also assigned our 'CCC+' issue-level rating and '6' recovery rating to the company's $650 million senior secured second-lien term loan due 2025. The '6' recovery rating indicates our expectation for negligible recovery (0%-10%; rounded estimate: 0%) of principal for debtholders in the event of a payment default. "We expect to withdraw our ratings on the existing senior secured second-lien term loan once it has been repaid. "Our stable outlook on Internet Brands reflects our expectations for a successful integration of WebMD, continued topline growth in the mid-single-digit percentage area and continued strong cash flow generation metrics. While we expect the company's pro forma debt to EBITDA to increase above 7x (including our standard adjustments to debt and EBITDA and WebMD EBITDA, but excluding run-rate synergies and the Autodata segment) once the acquisition closes, we expect the company to continue to generate free operating cash flow (FOCF) to debt in excess of 5% over the next two years. We expect the acquisition to close in the fourth quarter of 2017. "The stable rating outlook reflects our expectation that Internet Brands will successfully integrate WebMD to fully realize its expected synergies while generating strong, mid- to high-single-digit percentage, organic growth in its health and legal segments and strong cash flow. We also expect pro forma leverage to increase above 7x upon transaction's closing and FOCF to debt in excess of 5%, which, coupled with the company's growth profile, should reduce leverage to below 6.5x over the next 18-24 months. "We could lower the corporate credit rating if competitive pressures in the legacy Internet Brands segments cause organic growth in its legal and health segments (excluding WebMD) to slow to the low-single-digit percentage area from the from the high-single-digits or if the company is unable to successfully integrate the WebMD acquisition and fails to realize the significant synergies it has identified. We could also lower the rating if we expect FOCF to debt to diminish from current levels to below 5% on a sustained basis. "Although unlikely, we could raise the rating if we expect the company will pursue a less aggressive financial policy such that it reduces leverage to below 5x on a sustained basis, with a commitment to a less aggressive financial policy; or if it successfully increases diversification from the existing businesses through an acquisition, while maintaining healthy cash flow generation at about 10% of debt." MOLINA HEALTHCARE: Moody's Cuts Senior Unsecured Debt Rating to B2 ------------------------------------------------------------------ Moody's Investors Service has downgraded the senior unsecured debt ratings of Molina Healthcare, Inc. to B2 from Ba3 and the insurance financial strength (IFS) ratings of six of Molina's regulated operating subsidiaries to Ba1 from Baa3. The outlook on Molina and its rated operating subsidiaries remains negative. These actions reflect Moody's assessment of a broadly weaker credit profile at Molina based on poor financial results, as well as the potential for operational challenges as the company undertakes a company-wide restructuring and expense-cutting program. RATINGS RATIONALE For Q2 2017, Molina reported a $230 million after-tax net loss reflecting widespread operational challenges. The net after-tax loss was driven by prior-year development in Medicaid ($85 million pre-tax); ACA marketplace losses ($122m pre-tax) reflecting unfavorable re-estimates of premium deficiency reserves, risk-transfer payments and cost-sharing subsidies; goodwill impairments and other losses in the company's Pathways behavioral health unit ($80 million pre-tax); and employment separation costs ($43 million pre-tax). Moody's downgrades with a continued negative outlook on Molina and its rated operating subsidiaries reflects the company's constrained financial flexibility as well as uncertainty regarding the execution of its restructuring and profit improvement plan. The company's restructuring plan is wide-ranging and includes a review of its contract design and payment processes for providers, medical utilization management, and information technology. To help fund its restructuring plan, the company has indicated that it intends to draw down $300 million on its revolving credit facility, which would increase leverage to nearly 63% on a pro forma basis. Molina expects to realize run-rate expense savings of about $200 million by year-end 2017, with additional savings projected in 2018. To date, the company has realized $55 million in run-rate cost savings. Given the broad scope of these remediation efforts, however, Moody's views their success as uncertain. The rating action resulted in a four-notch differential between the Ba1 IFS and B2 senior unsecured debt, which is greater than Moody's standard three-notch differential for insurance groups. The wider notching represents the increased potential for loss to debt holders relative to policyholders for issuers with below investment grade IFS ratings. Moody's Ba1 IFS rating of Molina's operating subsidiaries and B2 senior unsecured debt rating of Molina are based primarily on the company's concentration in the Medicaid market, operational risk associated with its recent rapid growth, low margins, and high financial leverage compared to peers (adjusted debt to capital 59.6% at June 30, 2017). In Q1 2017 the company announced a material weakness over financial reporting as of December 31, 2016 related to a CA Medicaid expansion contract which led the company to understate after-tax earnings by about $44 million. These negatives are partially offset by the company's multi-state presence and a non-regulated management information systems business. Furthermore, Moody's recognizes that the new management team has been proactive in undertaking restructuring and remediation efforts to address its underlying operational issues. Molina offers government sponsored health care products for low-income families and individuals, and to state agencies to assist in their administration of the Medicaid program. At year-end 2016, Molina served approximately 4.2 million members. RATINGS DRIVERS Factors that could lead to an affirmation of the ratings with a stable outlook include: successful implementation of restructuring plan as measured through improved operating margins; remediation of the material weakness; maintenance of stable earnings including marketplace results; Factors that could lead to ratings downgrade include: Further deterioration of operating processes and/or financial flexibility; loss or impairment of a major Medicaid contract. The following ratings were downgraded: Issuer: Molina Healthcare, Inc. -- Senior Unsecured Regular Bond/Debenture, to B2 from Ba3 Issuer: Molina Healthcare of California -- Insurance Financial Strength, to Ba1 from Baa3 Issuer: Molina Healthcare of Michigan, Inc -- Insurance Financial Strength, to Ba1 from Baa3 Issuer: Molina Healthcare of New Mexico, Inc -- Insurance Financial Strength, to Ba1 from Baa3 Issuer: Molina Healthcare of Ohio, Inc -- Insurance Financial Strength, to Ba1 from Baa3 Issuer: Molina Healthcare of Texas, Inc. -- Insurance Financial Strength, to Ba1 from Baa3 Issuer: Molina Healthcare of Washington Inc -- Insurance Financial Strength, to Ba1 from Baa3 Outlook Actions Issuer: Molina Healthcare, Inc. Issuer: Molina Healthcare of California Issuer: Molina Healthcare of Michigan, Inc Issuer: Molina Healthcare of New Mexico, Inc Issuer: Molina Healthcare of Ohio, Inc Issuer: Molina Healthcare of Texas, Inc. Issuer: Molina Healthcare of Washington Inc -- Outlook, Remain Negative Molina Healthcare, Inc. is headquartered in Long Beach, California. For the six months ended June 30, 2017 total revenue (including investment income) was $9.9 billion with a net loss of $153 million. Medical membership as of June 30, 2017 was approximately 4.7 million members. As of June 30, 2017 the company reported total equity of $1.5 billion. The principal methodology used in these ratings was U.S. Health Insurance Companies published in May 2016. MOLINA HEALTHCARE: S&P Alters Outlook to Neg. & Affirms 'BB' CCR ---------------------------------------------------------------- S&P Global Ratings said it affirmed its 'BB' long-term counterparty credit and senior unsecured debt ratings on Molina Healthcare Inc. S&P revised the outlook to negative from stable. S&P said, "The outlook revision is based on our view that Molina will significantly underperform in full-year 2017 compared with our original expectations. The company is experiencing multiple issues, including previous management's strategic missteps, Affordable Care Act (ACA) exchange business underperformance, core operating process inefficiencies and Pathways subsidiary underperformance (resulting in an impairment charge). We are revising our assessment of the company's management and governance to fair from satisfactory to reflect these issues. The company's new management has outlined a clear turnaround strategy, which we view positively. However, we are uncertain about the ultimate pace and execution of this strategy in 2017-2018. The company also faces other risks such as upcoming contract renewals and continued payment of the ACA cost-sharing subsidies. "We believe the company could improve its operating performance, which has suffered from the ACA exchange business' higher-than-expected medical loss ratios and inaccurate forecasting of risk adjustment and cost-sharing liabilities. The company's Medicaid business remains sound overall and will continue to provide a good avenue for revenue growth and earnings stabilization (to offset ACA exchange underperformance). Molina plans to improve ACA exchange performance through premium rate increases, select market exits, and provider network/contract changes. In addition, anticipated regulatory changes may help. In 2018, the U.S. Dept. of Health and Human Services will reduce the state-wide average premium risk-adjustment transfer by 14% to account for administrative costs that do not vary with claims. The revised formula will use 86% of state-wide average premiums instead of total state-wide premiums. We expect this revision to lessen some of the future potentially unfavorable ACA risk-adjustment transfers for Molina. "We are revising our earnings and credit metric expectations. We now forecast EBIT return on revenues (ROR) of negative 0.5% to 0.5% for 2017 (compared with 1.5% previously) and 3% for 2018. We expect leverage to remain above 50% in 2017-2018 but are revising our adjusted EBITDA interest coverage expectation to 2x-3x for 2017 and 4x-6x for 2018. "The negative outlook indicates that we could lower the rating by one notch during the next two years if the company is unable to strengthen its management team, improve its core operations, and turn around its earnings trajectory. The company still has some key senior management positions to fill (including the CEO), and other personnel turnover (based on workforce downsizing) could affect operations. Regarding the company's earnings trajectory, we could downgrade the company if it is unable to improve its ROR to closer to 2% on a consistent basis. We believe the company may face more challenges containing its medical costs than its operating costs. In addition, it still needs to retain its upcoming Medicaid contract renewals. "We could affirm the current ratings during the next 12 months if it appears that the company is executing on its turnaround strategy. We would expect Molina to demonstrate a higher commitment and ability to generate an EBIT ROR above 2% consistently, which would be more in line with similarly rated managed-care peers. In addition, we would expect gradual improvement in leverage and adjusted EBITDA interest coverage above 4x." MOUNTAIN THUNDER: Kona's Best Committed Breach of Contract ---------------------------------------------------------- The appeals case captioned KONA'S BEST NATURAL COFFEE LLC, a Hawaii limited liability company, Plaintiff/Counterclaim-Defendant/Appellant/Cross-Appellee, v. MOUNTAIN THUNDER COFFEE PLANTATION INT'L, INC., a Hawaii corporation, TRENT BATEMAN and LISA BATEMAN, Defendants/Counterclaimants/Appellees/Cross-Appellants, and NATURESCAPE HOLDINGS GROUP INT'L, INC., Defendant/Appellee/Cross-Appellant, and JOHN DOES 1-10, JANE DOES 1-10, DOE PARTNERSHIPS 1-10, DOE CORPORATIONS 1-50, DOE ENTITIES 1-50, Defendants. MOUNTAIN THUNDER COFFEE PLANTATION INT'L INC., a Hawaii corporation, TRENT BATEMAN; LISA BATEMAN, Third-Party Plaintiffs/Appellees/Cross-Appellees, v. MICHAEL ROBERTS and BRENT HIGHT, Third-Party Defendants/Appellants/Cross-Appellees, and MARIN ARTUKOVICH, KOA COFFEE COMPANY, LLC; JOHN DOES 1-10; JANE DOES 1-10; DOE CORPORATIONS 1-50; DOE ENTITIES 1-50, Third-Party Defendants, No. CAAP-12-0000593 (Haw. App.), arises out of the breakdown and eventual termination of negotiations between Kona coffee businesses regarding a potential asset purchase agreement. Kona's Best Natural Coffee LLC was involved in negotiations with Mountain Thunder Coffee Plantation Int'l, Inc. to purchase the assets of Mountain Thunder. Michael Roberts held an ownership interest in Kona's Best and Brent Hight was the general manager of Kona's Best. Trent Bateman and Lisa Bateman were the owners of Mountain Thunder. After the negotiations regarding the asset purchase were terminated, Mountain Thunder transferred assets to Naturescape Holdings Group Int'l Inc., a company owned by the Batemans' daughter, Brooke Decker. With respect to Kona's Best's appeal, The Intermediate Court of Appeals of Hawaii conclude that: (1) the Circuit Court erred in denying Kona's Best's motion for judgment as a matter of law on the Mountain Thunder Defendants' claim for tortious interference with prospective business advantage; and (2) the Circuit Court did not err in denying Kona's Best motion for judgment as a matter of law on the Mountain Thunder Defendants' claims for breach of contract. With respect to the Mountain Thunder Defendants' cross-appeal, the Court affirms the Circuit Court on all claims of error challenging: (1) the entry of judgment in favor of Kona's Best on claims raised in the Mountain Thunder Defendants' First Amended Counterclaim; (2) the entry of judgment in favor of Roberts and Hight on claims raised in the First Amended Third-Party Complaint; (3) the entry of judgment in favor of Kona's Best and against the Batemans on claims raised in Kona's Best's First Amended Complaint; and (4) the award of attorney's fees in favor of Kona's Best and against the Batemans. In one of its arguments the Mountain Thunder Defendants contend that Kona's Best was not protected by the competitor's privilege because it "acted in bad faith in obtaining Hawaii Coffee Company as its client." They assert that Kona's Best only learned of Hawaii Coffee from the Batemans after entering into confidentiality agreements with the Batemans; that Kona's Best used the information provided by the Batemans; that Kona's Best directed Artukovich to tell Wayman that Kona's Best would not agree to purchase and process coffee for Hawaii Coffee if Hawaii Coffee did business with Mountain Thunder; and that Hawaii Coffee ceased doing business with Mountain Thunder after entering into a purchase and processing agreement with Kona's Best. The Court concludes that Kona's Best was protected by the competitor's privilege in that Kona's Best's alleged actions in interfering with Mountain Thunder's prospective business advantage with Hawaii Coffee did not constitute improper interference through the employment of wrongful means. The Court also rejects the Mountain Thunder Defendants' contention that Kona's Best employed improper means because it only learned of Hawaii Coffee and obtained other information through breaches of its confidentiality agreements with the Batemans. The court notes that the initial confidentiality agreement which the Batemans' allege that Trent signed at a March 2007 meeting only protected information provided by the Batemans that was "non-public, confidential or proprietary in nature," and the parties' obligations under the agreement terminated in one year. Kona's Best contends that the Circuit Court erred in denying its motion for judgment as a matter of law on the Mountain Thunder Defendants' Breach of Contract Claims. The Court disagrees. The Mountain Thunder Defendants presented evidence that while the negotiations for Kona's Best to purchase Mountain Thunder's assets were ongoing, the parties entered into an oral agreement to have Mountain Thunder purchase coffee and process it to green coffee for Kona's Best. According to the Batemans, when negotiations broke down, Kona's Best demanded that Mountain Thunder immediately return all the coffee it had purchased for Kona's Best. The Batemans presented evidence that Kona's Best owed Mountain Thunder money for agreed upon services. The Batemans testified that included in the amounts owed was an administrative fee of $.50 per pound on the 308,000 pounds of coffee that Mountain Thunder delivered to Kona's Best. The Court is not persuaded by Kona's Best's contention that it was unfairly surprised by the Batemans' testimony regarding the administrative fee. The Mountain Thunder Defendants' First Amended Counterclaim sought damages for breach of contract that included amounts owed by Kona's Best for Mountain Thunder's services; the Mountain Thunder Defendants introduced invoices at trial reflecting the $.50 administrative fee; and Kona's Best did not object to the Batemans' testimony regarding the administrative fee at trial or the Mountain Thunder Defendants' closing argument seeking recovery of the administrative fee as part of their damages. The Court concludes that Kona's Best's claim of unfair surprise regarding the administrative fee is without merit. After analyzing all the arguments and evidence presented in each complaint, the Court reverses the Amended Judgment to the extent that it entered judgment in favor of the Mountain Thunder Defendants and against Kona's Best on Count IX of the Mountain Thunder Defendants' First Amended Counterclaim for tortious interference with prospective business advantage; the Court affirms the Amended Judgment with respect to its entry of judgment on all other Counts asserted by the Mountain Thunder Defendants in their First Amended Counterclaim and its entry of judgment on all Counts asserted by the Mountain Thunder Defendants in their First Amended Third-Party Complaint; the Court affirms the Amended Judgment with respect to its entry of judgment as between Kona's Best and the Batemans on Counts asserted by Kona's Best in its First Amended Complaint; and the Court affirms the Amended Judgment to the extent that it awarded attorney's fees to Kona's Best and against the Batemans. A full-text copy of the Court's Memorandum Opinion dated August 2, 2017, is available at https://is.gd/na1qry from Leagle.com. Joseph Fagundes, III, (AAL, ALC), George W. Playdon, Jr. -- gwp@opgilaw.com --Kelvin H. Kaneshiro -- khk@opgilaw.com --(O'Connor Playdon & Guben LLP), for Plaintiff/Counterclaim-Defendant/Appellant/Cross-Appellee and Third-Party Defendants/Appellants/Cross-Appellees. Grant K. Kidani -- grant@aausportshawaii.org -- (Kidani Law Center), for Defendants/Counterclaimants/Appellees/Cross-Appellants and Third-Party Plaintiffs/Appellees/Cross-Appellees. About Mountain Thunder On Sept. 16, 2016, an involuntary Chapter 11 bankruptcy petition was filed against Mountain Thunder Coffee Plantation Int'l Inc. (Bankr. D. Hawaii Case No. 16-00984). Hagadone Hawaii, Inc. and three other alleged creditors signed the petition and were represented by Case Lombardi & Pettit. On Sept. 16, 2016, an involuntary Chapter 11 bankruptcy petition was filed against Naturescape Holding Group International, Inc. (Case No. 16-00982). GemCap Lending I, LLC and two other alleged creditors signed the petition and are represented by Alston Hunt Floyd & Ing and Case Lombardi & Pettit. On Nov. 16, 2016, the Court entered an order approving the appointment of Elizabeth A. Kane as the bankruptcy trustee of the estate of Mountain Thunder. On Dec. 21, 2016, the Court entered an order approving the appointment of Ms. Kane as the bankruptcy trustee of the estate of Naturescape. The Trustee's attorneys are Simon Klevansky, Esq., and Alika L. Piper, Esq., at Klevansky Piper, LLP, in Honolulu, Hawaii. Both cases are assigned to Judge Robert J. Faris. Upon the appointment of the trustee, the Debtors' exclusive right to file a bankruptcy plan was terminated. On December 20, 2016, GemCap Lending filed its joint Chapter 11 plan of reorganization for the Debtors. No official committee of unsecured creditors has been appointed in the Debtors' cases. MT. OLIVE BAPTIST: Hires Petrie & Pettit as Counsel --------------------------------------------------- Mt. Olive Baptist Church, Inc., seeks authorization from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to employ Petrie & Pettit as general counsel. The Debtor requires Petrie & Pettit to: a. advise and assist the Debtor with respect to its duties and powers under the Bankruptcy Code; b. advise the Debtor on the conduct of this chapter 11 case, including the legal and administrative requirements of operating in chapter 11; c. attend meetings and negotiate with representatives of the creditors and other parties in interest; d. prosecute actions on the behalf of the Debtor, defend actions commenced against the Debtor, and represent the Debtor's interests in negotiations concerning litigation in which the Debtor is involved, including objections to claims filed against the Debtor’s estate; e. prepare pleadings in connection with this chapter 11 case, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtor's estate; f. advise the Debtor in connection with any potential sale of assets; g. appear before the Court to represent the interests of the Debtor’s estate; h. assist the Debtor in preparing, negotiating and implementing a plan, and advise it with respect to any rejection of a plan and reformulation of a plan, if necessary; and i. perform all other necessary or appropriate legal services for the Debtor in connection with the prosecution of this chapter 11 case, including (i) analyzing the Debtor's leases and contracts and the assumption and assignment or rejection thereof, (ii) analyzing the validity of liens against the Debtor, and (iii) advising the Debtor on transactional and litigation matters. Petrie & Pettit will be paid at these hourly rates: David J. Espin $325 Other Associate Attorneys $255-$295 Non-Attorney Paraprofessionals $75-$125 The Debtor paid Petrie & Pettit $5,044.50 on June 13, 2017, and $16,384.50 on July 13, 2017. After paying pre-petition fees and filing fees, Petrie & Pettit is holding a total of $18,615.50 in its client trust account as security for services and expenses incurred during the chapter 11 case for the Debtor. Petrie & Pettit will also be reimbursed for reasonable out-of-pocket expenses incurred. David J. Espin, Esq., attorney in the law firm of Petrie & Pettit, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Petrie & Pettit may be reached at: David J. Espin, Esq. Petrie & Pettit 250 E. Wisconsin Ave., Suite 1000 Milwaukee, WI 53202-9885 Phone: 414.276.2850 Fax: 414.276.0731 Email: despin@petriepettit.com About Mt. Olive Baptist Church, Inc. Mt. Olive Baptist Church, Inc., owns a Baptist church in Milwaukee, Wisconsin. Mt. Olive Baptist Church filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 17-26930) on July 14, 2017, disclosing $584,548 in total assets as of March 31, 2017, and $1.12 million in total liabilities as of March 31, 2017. The petition was signed by Nita F. Farrow, leader of trustee ministry. Judge Michael G. Halfenger presides over the case. David J. Espin, Esq., at Petrie & Pettit, serves as the Debtor's bankruptcy counsel. NEOVASC INC: Will Host Q2 Conference Call on Aug. 10 ---------------------------------------------------- Neovasc Inc. will release its financial results for the second quarter 2017 on Thursday, Aug. 10, 2017, after markets close. The Company will subsequently hold a conference call that same day, Thursday, Aug. 10, 2017, 2017, at 4:30 p.m. Eastern Time hosted by Mr. Alexei Marko, chief executive officer, and Mr. Chris Clark, chief financial officer. A question and answer session will follow the corporate update. Conference Call Details DATE: Thursday, August 10, 2017 TIME: 4:30 pm ET DIAL-IN NUMBER: 888 390 0546 or 416 764 8688 A link to the live audio webcast of the conference call will also be available on the Presentations and Events page of the Investors section of Neovasc's website at www.neovasc.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to hear the webcast. A recording of the call will be available for 72 hours by calling 888 390 0541 or 416 764 8677 and using passcode 773413#. About Neovasc Inc. Neovasc Inc. -- http://www.neovasc.com/-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina which is not currently available in the United States and has been available in Europe since 2015 and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under investigation in the United States, Canada and Europe. The Company also sells a line of advanced biological tissue products that are used as key components in third-party medical products including transcatheter heart valves. Neovasc reported a net loss of US$86.49 million for the year ended Dec. 31, 2016, following a net loss of US$26.73 million for the year ended Dec. 31, 2015. As of Dec. 31, 2016, Neovasc had US$98.81 million in total assets, US$114.27 million in total liabilities and a US$15.46 million total deficit. Grant Thornton LLP, in Vancouver, Canada, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, emphasizing that the Company was named in a litigation and that the court awarded $112 million in damages against it. This condition, along with other matters, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern, the auditors said. NORTH AMERICAN GROUP: Has Until Oct. 16 to File Plan, Disclosures ----------------------------------------------------------------- The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida has given North American Group, Inc., until Oct. 16, 2017, to file a plan of reorganization and disclosure statement. About North American Group Inc. North American Group, Inc., is a business management consultant in the Fort Myers Shores, Florida. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 17-05271) on June 16, 2017. Matthew Franklin Klein, vice-president of operations, signed the petition. At the time of the filing, the Debtor disclosed that it had estimated assets and liabilities of $1 million to $10 million. Michael R. Dal Lago, Esq., at Dal Lago Law serves as the Debtor's bankruptcy counsel. Judge Caryl E. Delano presides over the case. An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case of North American Group, Inc. as of July 28, according to a court docket. NORTHERN OIL: Bahram Akradi Has 9.81% Equity Stake as of July 21 ---------------------------------------------------------------- Bahram Akradi reported in a Schedule 13D/A filed with the Securities and Exchange Commission that as of July 21, 2017, he beneficially owns 6,210,000 shares of common stock, $0.001 par value, of Northern Oil and Gas, Inc., representing 9.81 percent based on 63,327,589 shares of Common Stock issued and outstanding as of May 1, 2017, as reported in the Issuer's quarterly report on Form 10-Q filed on May 8, 2017 for the quarterly period ended March 31, 2017. Mr. Akradi is chairman of the Board, president and chief executive officer of Life Time Fitness, Inc. Life Time is a privately held, comprehensive health and lifestyle company that offers a personalized and scientific approach to long-term health and wellness through its portfolio of distinctive resort-like destinations, athletic events and health services. Life Time, known as the "Healthy Way of Life Company," helps members achieve their goals with the support of a team of dedicated professionals and an array of proprietary health assessments. The address of Life Time's corporate offices is 2902 Corporate Place, Chanhassen, MN 55317. Mr. Akradi has purchased the Subject Shares for aggregate consideration (including brokerage commissions) of $20,686,139. He also has sold shares of Common Stock for aggregate consideration (including brokerage commissions) of $2,209,269. On July 21, 2017, Mr. Akradi entered into a letter agreement (the with Northern Oil under which Northern Oil agreed, among other things, to increase the size of its Board of Directors from seven to eight directors and to appoint Mr. Akradi to the Board. Pursuant to the Letter Agreement, Mr. Akradi is subject to provisions restricting him from engaging in certain shareholder activist conduct. These provisions remain in effect until the Issuer's 2018 annual meeting of shareholders, unless, in the case of certain provisions, Mr. Akradi is no longer a member of the Board. These provisions restrict the Reporting Person's ability to engage in certain proxy solicitations (including solicitations regarding representation on the Board or any other proposal brought by the Issuer's shareholders), form a group, call meetings of shareholders, deposit shares into a voting trust or make any public request to amend the terms of the Letter Agreement. The Letter Agreement further provides that, at the 2018 Annual Meeting, Mr. Akradi will vote all shares of Common Stock that he is entitled to vote in accordance with the Board's recommendation with respect to any (i) proposal requesting ratification of the Company's independent accounting firm, (ii) say-on-pay proposal and (iii) shareholder proposal. A full-text copy of the regulatory filing is available at: https://is.gd/Ni90fG About Northern Oil Northern Oil and Gas, Inc. -- http://www.NorthernOil.com/-- is an exploration and production company with a core area of focus in the Williston Basin Bakken and Three Forks play in North Dakota and Montana. Northern Oil reported a net loss of $293.5 million on $144.9 million of total revenues for the year ended Dec. 31, 2016, compared to a net loss of $975.4 million on $275.05 million of total revenues for the year ended Dec. 31, 2015. As of March 31, 2017, Northern Oil had $449.24 million in total assets, $919.3 million in total liabilities and a total stockholders' deficit of $470.09 million. * * * As reported by the TCR on March 24, 2017, Moody's Investors Service affirmed Northern Oil and Gas' (NOG) 'Caa2' Corporate Family Rating (CFR), the 'Caa2-PD' Probability of Default Rating (PDR), the 'Caa3' senior unsecured notes rating, and the SGL-4 Speculative Grade Liquidity (SGL) rating. The ratings outlook is negative. "The affirmation reflects Moody's expectations that Northern Oil & Gas will continue to have elevated leverage as it increases capital spending in 2017 to keep production volumes flat," commented James Wilkins, Moody's Vice President-Senior Analyst. "The negative outlook reflects the likelihood that the company's earnings will not recover sufficiently to meet its financial covenants in the second quarter 2018." Northern Oil and Gas carries a 'CCC' corporate credit rating, with negative outlook, from S&P Global Ratings. NOVITEX ACQUISITION: S&P Affirms Then Withdraws 'B' CCR ------------------------------------------------------- S&P Global Ratings affirmed its 'B' corporate credit rating on Novitex Acquisition LLC Inc. and removed the rating from CreditWatch, where it had been placed with positive implications on Feb. 23, 2017. S&P said, "We then withdrew our ratings on Novitex's debt and subsequently withdrew our corporate credit rating on Novitex. At the time of rating withdrawal, the outlook was stable." The rating withdrawal follows the closing of Stamford, Conn.-based Novitex's merger with Irving, Texas-based Source HOV LLC. "Novitex's operations will be absorbed into the newly formed entity, Exela Technologies, and accordingly we have affirmed our corporate credit ratings on Novitex at 'B', the same rating as on Exela Technologies," said S&P Global Ratings credit analyst Geoffrey Wilson. "In addition, due to a change-of-control provision in Novitex's credit agreement, all existing Novitex debt was repaid. Therefore, we are withdrawing all ratings on Novitex," Mr. Wilson added. OAKFABCO INC: Court Approves Settlement Agreement with NERC ----------------------------------------------------------- Oakfabco, Inc., moved for approval of a settlement with New England Reinsurance Company, which was objected to by the Asbestos Claimants' Committee. New England and the Debtor filed responses in favor of the settlement. The Debtor's motion was amended to offer $4.5 million. Judge Jack B. Schmetterer of the U.S. Bankruptcy Court for the District of Illinois granted the Debtor's motion. The ACC objects to approval of the Settlement Agreement for two reasons: (1) the Debtor's business justifications for approval of the Settlement Agreement are not valid and (2) the Settlement Agreement improperly includes third-party releases, injunctions, and indemnification obligations that are neither narrowly tailored nor essential to a reorganization. The ACC believes that the Debtor's justifications are not valid and should not be subject to deference. These arguments, however, are not enough to overcome the Debtor's decision to settle. First, the ACC objects to the Settlement Agreement, because it believes the Debtor lacked both knowledge and the necessary funds to resolve the coverage issue with New England. The ACC alleges New England was able to manipulate the Debtor's position because of its "compromised financial condition." Also, during the pendency of the bankruptcy and after negotiations of the Settlement Agreement, the Binder for the 1983 Policy appeared. The ACC believes that the Binder warrants an additional $1 million to the 1983 Policy. Because of this, the Settlement Agreement is said to be undervalued and the Debtor should withdraw from the Settlement Agreement to resume negotiations. Judge Schmetterer finds that the discovery of the Binder does not affect the Settlement Agreement. Although the Binder presented new information regarding the 1983 Policy, it appears to lack any significant effect on the 1983 Policy. It was plausible for the Debtor to believe the Renewal Certificate would be found to supersede the Binder and it was not worth withdrawing from the Settlement Agreement. However, it appears from the increased settlement offer that Debtor continued negotiations with some success. Circumstances here continue to support Debtor's justification for settling. The ACC's next major objection is the amount of the Settlement Agreement. The ACC argues that the Settlement Agreement is too low, because the Debtor has a strong likelihood of success in litigation, and therefore Settlement Agreement should be rejected. According to the ACC, the Settlement Agreement should be much larger because of two documents in relation to the 1983 Policy: the Binder and Renewal Certificate. Together, these documents are said to warrant an additional $20 million of coverage in the I983 Policy. The ACC's arguments in this regard, however, do not receive strong support from current Illinois precedent. Judge Schmetterer asserts that the ACC's arguments do not establish that the Debtor failed to exercise a sound business decision when entering into the Settlement Agreement. Even if the arguments put forth by the ACC showed a greater chance of success in litigation than the Debtor believed, all other factors suggest that settling was the proper action. The last issue to address is the objection from the ACC asserting that the Settlement Agreement imposes unreasonable burdens on nonparty asbestos claimants. The ACC specifically takes issue with the indemnification obligations, third-party injunctions, and releases that "provide [New England] with blanket immunity." The ACC cited a series of other cases in which third-party releases were stricken because the chapter 11 plan was a liquidating plan or the releases were too broad. However, none of the cited cases involved approving a settlement agreement, but rather were in cases confirming a chapter 11 plan. At this point, the releases created by approval of the Settlement Agreement are only between the Debtor and New England. The Settlement Agreement itself does not create third-party releases but rather makes the Debtor responsible for including such releases in confirmation plan that would do so. The arguments here are thus more appropriate for objection to the Debtor’s forthcoming chapter 11 plan. ACC has filed such Objection. Finally, New England and the Debtor removed a provision in the proposed Settlement Agreement Order, which would require "each holder of an Asbestos Claim. Therefore, the Settlement Agreement itself does not grant New England a release by asbestos claimants or impose any obligations on the asbestos claimants. Accordingly, the ACC's objections are overruled, and the Settlement Agreement will be approved by separate order. A full-text copy of Judge Schmetterer's Opinion dated August 4, 2017, is available at: http://bankrupt.com/misc/ilnb15-27062-518.pdf About Oakfabco, Inc. Oakfabco, Inc, formerly known as Kewanee Boiler Corporation, has not manufactured boilers since 1988 when it sold its Kewanee boiler business in an 11 U.S.C. Section 363 sale to Coppus Engineering Corporation. In early 2009, it sold all of its remaining assets. The Debtor has no employees, and, Frederick W. Stein is the Debtor's sole officer and director. The Debtor's sole remaining asset is its insurance, and it has no known liabilities other than asbestos claims. In January 1970, Kewanee Boiler Corp, then a newly-formed Illinois Corporation, acquired the assets and debt of American Standard, Inc.'s commercial boiler manufacturing division known as "Kewanee Boiler." The boilers manufactured and sold by Kewanee Boiler were insulated with asbestos. Oakfabco sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 16-27062) on Aug. 7, 2015, to resolve its remaining asbestos claims. The petition was signed by Frederick W. Stein, president. Stephen T. Bobo, Esq., Aaron B. Chapin, Esq., Paul M. Singer, Esq., Luke A. Sizemore, Esq., and Joseph D. Filloy, Esq., at Reed Smith LLP, serves as counsel to the Debtor. The Debtor estimated $10 million to $50 million in assets and debt. The U.S. Trustee for Region 11 appointed four members to the Asbestos Claimants' Committee in the Chapter 11 bankruptcy case of Oakfabco Inc.: Vince Holajn, William E. Gallet, Kristin Leigh Hart, and Michael Batchelor. The Asbestos Claimants' Committee is represented by Frances Gecker, Esq., at FrankGecker LLP. The Debtor tapped Logan & Company, Inc. as its claims and noticing agent, and Alan D. Lasko and Associates, P.C. as its tax accountant. The Asbestos Claimants' Committee retained Henry Booth and Colin Gray to provide insurance professional services. OCEANFRONT HOSPITALITY: Case Summary & 20 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: Oceanfront Hospitality Group Inc. dba Oceanfront Hospitality Inc. dba Rosa Mejicano PO Box 16684 San Juan, PR 00908 Business Description: Oceanfront Hospitality's principal assets are located at 270 Ave. Munoz Rivera Local 1-E, Cond. Paseo Caribe San Juan, PR. Chapter 11 Petition Date: August 7, 2017 Case No.: 17-05539 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Hon. Mildred Caban Flores Debtor's Counsel: Paul James Hammer, Esq. ESTRELLA LLC PO Box 9023596 San Juan, PR 00902 Tel: 787-977-5050 Fax: 787-977-5090 E-mail: phammer@estrellallc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Julio Canales Figueroa, president. The Debtor's list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb17-05539.pdf OIL PATCH TRANSPORTATION: Taps Hess Hopkins as Accountant --------------------------------------------------------- Oil Patch Transportation Inc. seeks authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Hess Hopkins Alexander LLP as accountant. The Debtor requires Hess Hopkins to prepare its June 30, 2017 federal income tax return. Hess Hopkins will charge a flat fee of $3,000. Hess Hopkins will be reimbursed for reasonable out-of-pocket expenses incurred. Fran Hess, manager of Hess Hopkins, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Hess Hopkins can be reached at: Fran Hess HESS HOPKINS ALEXANDER LLP 2211 Norfolk Street, Suite 700 Houston, TX 77098 Tel: (713) 520-1181 Fax: (713) 520-1180 E-mail: fhess@hess-cpa.com About Oil Patch Transportation Oil Patch Transportation filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 17-80152) on May 16, 2017. The Company says it is a small business debtor as defined in 11 U.S.C. Section 101(51D). It was founded in 2006 and is engaged in the business of arranging transportation of freight and cargo. The Debtor serves the oil and gas industry in Brazoria County, Texas and the surrounding counties. The Debtor operates on a fiscal year of July through June. Gross income for fiscal year 2015 was $9,609,160, and for 2016, it was $4,998,418. Robert Smith, president, signed the petition. At the time of filing, the Debtor disclosed $2.87 million in total assets and $2.48 million in total liabilities. The case is assigned to Judge Marvin Isgur. OPT CO: U.S. Trustee Unable to Appoint Committee ------------------------------------------------ The Office of the U.S. Trustee on Aug. 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 cases of Opt Co, et al. About Opt Co Opt Co. operates as a painting contractor. It offers exterior, interior, custom homes, garage epoxy, and fences painting and coating services. It serves industrial, commercial, and residential customers in the State of New York. Most of the principal assets of Opt Co. and its affiliates are located at 5136 S. Desert View Apache Junction, Arizona. Opt Co. and eight of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case Nos. 17-06091 to 17-06098, and 17-06100) on May 31, 2017. Joseph Cook, personal representative of estate of Allan Kauffman, signed the petitions. Debtors Opt Co, 4K Builders, Inc., Blu Enterprises, Inc., Vintage Millworks, Inc., Southwest Renewable Resources, LLC, Optco Residential Painting, LLC, Arizona Natural Resources Products, LLC, and Arizona Steel Finishing, LLC, each listed under $50,000 in assets and $1 million to $10 million in liabilities. Debtor 4K Properties, Ltd, listed under $50,000 in assets and $10 million to $50 million in liabilities. Judge Brenda Moody Whinery presides over the cases. The Debtors hired Davis Miles McGuire Gardner, PLLC, as counsel. P.F. CHANG'S: S&P Affirms B- Corp Credit Rating, Outlook Negative ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' corporate credit rating on P.F. Chang's China Bistro Inc. The rating outlook is negative. S&P said, "At the same time, we assigned a 'B-' issue-level rating and '3' recovery rating to the company's proposed $380 million senior secured credit facility, which includes a $55 million senior secured revolver and a $325 million first-lien term loan maturing in 2022. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of bankruptcy or payment default. "We also affirmed our 'CCC' issue-level on the company's $300 million senior unsecured notes. The '6' recovery rating is unchanged, indicating our expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default or bankruptcy. "We will withdraw our ratings on the refinanced senior secured first-lien term loan once the transaction closes. "The affirmation reflects our expectation that P.F. Chang's operations, especially at the Pei Wei, will remain challenged in the current difficult operating environment for restaurants, though we have a more favorable view of it liquidity following the covenant revisions. "The negative outlook reflects P.F. Chang's small operating scale, exposure to declining mall traffic, and our expectation for weakness in the restaurant industry, including lower customer traffic and spending, which we believe will lead to negative comparable sales over the next 12 months. The outlook also incorporates our expectation that the company's capital structure will remain highly leveraged, based on our forecast that adjusted leverage will remain in the high-5x to low-6x range for the next 12-18 months. "We could consider a negative rating action if we believed the company's liquidity profile deteriorates or if underperformance leads us to conclude that its capital structure is unsustainable in the long run. This could occur if the company's operating initiatives fail to reduce costs or resonate with customers, resulting in a persistent decline in same-restaurant sales at a mid-single-digit percentage rate or higher and EBITDA margins declining 100 basis points to 12% or less. Under this scenario, adjusted leverage would likely be more 6.5x and interest coverage would approach 2x. In addition, we would expect the company's liquidity profile to erode under such a scenario because of increased cash burn. "We could consider revising the outlook to stable if we believed the company would achieve a sustained improvement in its operating results such that both the P.F. Chang's and Pei Wei brands post positive comparable sales growth and improved operating margins. Under such a scenario, the company's menu and other initiatives would, for example, result in increased customer traffic and sale leverage. We would expect adjusted leverage to approach the mid-5x range in this scenario." PACIFIC DRILLING: Incurs $138.1 Million Net Loss in Second Quarter ------------------------------------------------------------------ Pacific Drilling S.A. announced a net loss for second-quarter 2017 of $138.1 million or $6.48 per diluted share, on $67.07 million of revenues compared to a net loss of $99.8 million or $4.69 per diluted share for first-quarter 2017, and net income of $8.2 million or $0.39 per diluted share for second-quarter 2016. For the six months ended June 30, 2017, the Company reported a net loss of $237.91 million on $172.58 million of revenues compared to net income of $5.72 million on $409.08 million of revenues for the six months ended June 30, 2016. As of June 30, 2017, Pacific Drilling had $5.60 billion in total assets, $3.17 billion in total liabilities and $2.43 billion in total shareholders' equity. CEO Paul Reese said, "Despite a very challenging market which has significantly impacted our revenues, we achieved solid operational performance with a second-quarter revenue efficiency of 95.5% and continued strong cost control. Lately, we have received an increase in market inquiries for projects in several deepwater regions of the world starting sometime in 2018, which is promising." Mr. Reese continued, "On behalf of the entire Company, I would like to personally thank Chris Beckett, my predecessor as CEO, under whose leadership Pacific Drilling has grown into a highly respected and established offshore drilling contractor." Contract drilling revenue for second-quarter 2017 was $67.1 million, which included $5.1 million of deferred revenue amortization, compared to first-quarter 2017 contract drilling revenue of $105.5 million, which included $31.1 million of deferred revenue amortization. The decrease in revenues resulted primarily from the Pacific Santa Ana completing its contract in January 2017 compared to being offhire throughout the second-quarter 2017, partially offset by the Pacific Scirocco starting its contract with Hyperdynamics in second-quarter 2017 compared to being offhire throughout the first-quarter 2017. During second-quarter 2017, the Company's operating fleet achieved average revenue efficiency of 95.5%. Operating expenses for second-quarter 2017 were $65.0 million as compared to $60.4 million for first-quarter 2017. Operating expenses for second-quarter 2017 included $2.6 million in amortization of deferred costs, $1.1 million in reimbursable expenses, and $5.9 million in shore-based and other support costs. General and administrative expenses for second-quarter 2017 were $20.1 million, compared to $22.5 million for first-quarter 2017. Excluding certain legal and financial advisory fees of $6.4 million in second-quarter 2017 and $6.1 million in first-quarter 2017, our corporate overhead expenses(b) for second-quarter 2017 were $13.7 million, compared to $16.4 million for first-quarter 2017. EBITDA(c) for second-quarter 2017 was $(17.6) million, compared to EBITDA of $21.9 million in the first-quarter 2017. For second-quarter 2017, cash flow from operations was $(73.5) million. Cash balances, including $8.5 million in restricted cash, totaled $415.6 million as of June 30, 2017, and total outstanding debt was $3.0 billion. On July 5, 2017, the Company announced the launch of a private consent solicitation pursuant to which it solicited the consent of the holders of the 2017 Senior Secured Notes to an extension of the maturity date of the notes to June 1, 2018, in order to give us more time to negotiate a refinancing transaction or undertake a holistic restructuring with all of our creditors. The solicitation expired in accordance with its terms on Aug. 2, 2017, without receiving sufficient consents to approve the maturity extension. In light of the results of the solicitation and to ensure the Company has sufficient liquidity in light of current market conditions and its debt obligations, the Company is considering various means to increase its available liquidity, including potentially seeking to raise additional debt financing. The Company is also reviewing various ways to further reduce costs. If the Company is unable to complete a restructuring, or refinance or extend the maturity of the 2017 Senior Secured Notes prior to their maturity in December 2017, the Company may be unable to repay the Notes at maturity, which would trigger cross-default provisions in the Company's other debt instruments. In addition, as previously disclosed, the Company expects that it will be in violation of the maximum leverage ratio covenant in its 2013 Revolving Credit Facility and its Senior Secured Credit Facility for the fiscal quarter ending on Sept. 30, 2017. If the Company is unable to obtain waivers of such covenants or amendments to the debt agreements, such covenant default would entitle the lenders under such facilities to declare all outstanding amounts under such debt agreements to be immediately due and payable. Such acceleration would also trigger the cross-default provisions in the Company's other debt instruments. The Company is evaluating various alternatives to address its liquidity and capital structure, which may include a private restructuring or a negotiated restructuring of its debt under the protection of Chapter 11 of the U.S. Bankruptcy Code. CFO John Boots commented, "We continue to engage in discussions with our shareholders, the bank lenders and the ad hoc group of holders of our public debt on the terms of a restructuring, although there is currently no consensus as to the form or structure of any restructuring." The Company will not be holding an earnings conference call this quarter. A full-text copy of the press release is available for free at: https://is.gd/T2jd2R About Pacific Drilling Based in Luxembourg, Pacific Drilling S.A. (NYSE:PACD) is an international offshore drilling contractor. The Company's primary business is to contract its high-specification rigs, related equipment and work crews, primarily on a day rate basis, to drill wells for its clients. The Company's contract drillships operate in the deepwater regions of the United States, Gulf of Mexico and Nigeria. Pacific Drilling reported a net loss of $37.15 million on $769.5 million of revenues for the year ended Dec. 31, 2016, as compared with net income of $126.2 million on $1.08 billion of revenues for the year ended Dec. 31, 2015. As of March 31, 2017, Pacific Drilling had $5.75 billion in total assets, $3.18 billion in total liabilities and $2.57 billion in total shareholders' equity. The Company's independent auditors KPMG LLP, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern in their report on the consolidated financial statements for the year ended Dec. 31, 2016. KPMG noted that the Company expects to be in violation of certain of its financial covenants in the next 12 months. * * * In October 2016, Moody's Investors Service downgraded Pacific Drilling's Corporate Family Rating to 'Caa3' from 'Caa2' and Probability of Default Rating (PDR) to 'Caa3-PD' from 'Caa2-PD'. "PacDrilling's ratings downgrade reflects our extremely negative view of the offshore drilling sector with no near term signs of improvement. Depressed prices for the offshore drillships offers weak asset coverage for PacDrilling's overall debt. With no material signs of improving contract coverage or utilization for PacDrilling's drillships, cashflow through 2017 will be severely impacted resulting in an unsustainable capital structure," said Sreedhar Kona, Moody's senior analyst. In February 2017, S&P Global Ratings affirmed its ratings on Pacific Drilling S.A., including its 'CCC-' corporate credit rating. S&P subsequently withdrew all ratings on the company at its request. PALMDALE HILLS: Ct. Narrows Claims in Trustee's Suit v. SunCal Mngt ------------------------------------------------------------------- Plaintiff Stephen M. Speier, as chapter 11 trustee for debtor SunCal Marblehead, LLC, has brought a motion for partial summary adjudication of his restitution and/or unjust enrichment claim for relief against defendant SunCal Management, LLC and with Argent Management, Inc. Judge Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California granted in part and denied in part the trustee's motion. In May 2012, the Trustee filed 12 subject complaints (which were twice subsequently amended) against the Defendants seeking to recover substantial payments for management fees and expenses made by the 12 relevant SunCal Debtors to SCM during the four-year period prior to each SunCal Debtor's bankruptcy, by asserting claims for breach of contract, restitution/unjust enrichment, fraudulent transfer, and preferential transfer. In this adversary proceeding, these management fees and expenses were invoiced by SCM pursuant to a Development Management Agreement dated June 10, 2005, between SCM and SCC JV Ventures, LLC. In this motion, the Trustee is seeking adjudication of his unjust enrichment/restitution claim against SCM seeking the return of $9,163,489 paid by the Debtor to SCM between June 10, 2005, and the Debtor's November 2008 petition date. Although the parties' legal arguments are varied and complex, the Trustee is essentially arguing that the Debtor has no legal responsibility for these fees: the DMA is the exclusive document governing the fees and the DMA provides for the payment of the fees by SCC JV Ventures, not the Debtor. SCM is essentially arguing that the management fees were for developing the Marblehead Project, which was the Debtor's property, so these fees were the Debtor's responsibility and the parties' course of dealing and other contracts support this understanding. Although the Trustee has established the elements of unjust enrichment, the Defendants have raised five legal doctrines that arguably prevent SCM's receipt and retention of the Management Fee payments from constituting actionable unjust enrichment under California law. Three of these doctrines are not applicable, as a matter of undisputed fact, but the applicability of the final two doctrines raises genuine issues of fact that prevent this Court from granting summary judgment to the Trustee. Three of the Defendants' cited legal doctrines -- the existence of a contract covering the same subject matter, the Debtor receiving the exchange it expected, and principles of equity from fraudulent transfer law -- are not applicable to this case. The Defendants offered two more legal doctrines that, if applicable, would prevent SCM's receipt and retention of the Management Fees payments from being actionable unjust enrichment: the "voluntary payment" and "incidental benefit" doctrines. The Defendants argue that the voluntary payment doctrine precludes the Debtor's payment of management fees from being an unjust enrichment of SCM. The voluntary payment doctrine applies under California law: The voluntary payment doctrine bars the recovery of money that was voluntarily paid with full knowledge of the facts. But it is elementary that an excessive payment made in ignorance of the fact that it is excessive is recoverable. The Trustee argues that, given that the Debtor had no employees and was managed by SCM, it cannot be said that payments were truly voluntary and the Debtor received the exchange that it expected. However, the Court cannot accept this "no employees, no intent" argument. Otherwise, the Debtor would lack responsibility for any action and would effectively cease to be a legal entity. Similarly, the Defendants argue that benefitting another in the performance of one's own duties or in the improvement of one's property is not unjust enrichment, but merely an incidental benefit, citing Durell v. Sharp Healthcare. There are genuine issues of material fact as to whether one or both of these legal doctrines -- the voluntary payment doctrine and the incidental benefit doctrine -- are applicable to this case. The potential applicability of these doctrines prevents the Court from granting summary judgment to the Trustee. The Defendants argue that the statute of limitations, equitable estoppel, laches, and res judicata bar the Trustee's unjust enrichment/restitution claim. These are all affirmative defenses and the Defendants, as the parties asserting the defense, accordingly carry the burden of proof for each of these defenses. The defenses of equitable estoppel and res judicata do not, however, as a matter of undisputed fact, bar the Trustee's unjust enrichment claim. However, it remains an issue of disputed fact whether the affirmative defenses of statute of limitations or laches bars the Trustee's unjust enrichment claim. As genuine issues of fact remain as to the applicability of both laches and the statute of limitations, each of these affirmative defenses prevents the Court from granting summary judgment to the Trustee on his unjust enrichment claim. Thus, Judge Mund granted the motion in part and denied it in part. The Court cannot grant summary judgment to the Trustee on his unjust enrichment/restitution claim but can grant summary adjudication that: * The Trustee has established a claim for unjust enrichment/restitution for the Management Fees paid by the Debtor to SCM, except for the following issues: * Voluntary Payment Doctrine: Whether the Debtor's payments of Management Fees to SCM were made voluntarily and with the knowledge that the Debtor had no legal obligation to pay the Management Fees to SCM. * Incidental Benefit Doctrine: Whether the Debtor had legal obligations to pay Management Fees or whether these fees were paid to protect or improve the Debtor's property. * The Defendants have failed to establish any defenses to the unjust enrichment/restitution claim, except for Laches and Statute of Limitations, which the Defendants may continue to assert. The bankruptcy case is In re: Palmdale Hills Property, LLC, and related, CHAPTER 11, Debtors, Debtor(s). Steven M Speier, Plaintiff(s), v. Argent Management, LLC, SunCal Management LLC, Defendant(s), Case No. 08-bk-17206-ESb (Bankr.C.D. Cal.). The adversary proceeding is Steven M Speier, Plaintiff(s), v. Argent Management, LLC, SunCal Management LLC, Defendant(s), Adv No. 1:16-ap-01120-GM (Bankr.C.D. Cal.). A full-text copy of Judge Mund's Memorandum Decision dated August 2, 2017, is available at https://is.gd/QnZuWN from Leagle.com. Steven M Speier, Plaintiff, represented by Heather B. Dillion, Shulman Hodges & Bastian LLP, Mike D. Neue, Dynamic Law Group, P.C. & Gary A. Pemberton, Shulman Hodges & Bastian LLP. SunCal Management LLC, Defendant, represented by Craig H. Averch -- caverch@whitecase.com -- & Doah Kim -- doah.kim@whitecase.com -- White & Case LLP. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- had more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Gramercy Warehouse Funding LLC and several creditors filed involuntary petitions each against LBREP/L-SunCal Master I LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11, 2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and 08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender, Rankin & Brill represents the petitioners. SunCal affiliates led by Palmdale Hills Property, LLC, filed voluntary Chapter 11 petitions (Bankr. C. D. Calif. Case No. 08-17206) on Nov. 6, 2008. Affiliates that also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. SunCal Companies is not in bankruptcy. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. PALMDALE HILLS: SCM Wins Partial Summary Judgment in Clawback Suit ------------------------------------------------------------------ Defendants SunCal Management, LLC, and Argent Management, Inc., bring a motion for summary judgment on the first claim for relief (Breach of Contract) and the second claim for relief (Unjust Enrichment and/or Restitution) by plaintiff Stephen M. Speier, as chapter 11 trustee and liquidating trustee for debtor SunCal Oak, LLC, or, in the alternative, for partial summary adjudication. Judge Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California granted the defendants' motion in part with regard to the first claim but will continue hearing on the second claim. This motion is made in one of 12 related adversary proceedings now before this Court. The 12 debtors involved in these adversary proceedings are in turn part of a larger related group of 26 debtors that were formed to develop residential real estate projects in the Western United States. The Debtor's project was located in Oakland and is known as Oak Knoll. The Trustee had been appointed the chapter 11 trustee for each of the involuntary SunCal Debtors and -- through two plans of reorganization governing various SunCal Debtors, which were each confirmed in January 2012 -- was appointed the liquidating trustee of most of the SunCal Debtors, including the Debtor. The SunCal Debtors' Projects were also transferred to Lehman on an "as is" basis pursuant to the Plans and related confirmation orders. In May 2012, the Trustee filed the twelve subject complaints (which were twice subsequently amended) against the Defendants, each complaint seeking to recover substantial payments for management fees and expenses made by the relevant SunCal Debtor to SCM during the four-year period prior to the SunCal Debtors' bankruptcies. These complaints asserted claims for breach of contract, restitution/unjust enrichment, fraudulent transfer, and preferential transfer. The Trustee's arguments that SCM breached the Development Management Agreement prior to the Debtor's failure to fund the Project do not withstand scrutiny. Any breach based on SCM's failure to repay overpaid Management Fees would only have occurred in 2012. The overpayment alleged by the Trustee could only become evident upon the sale of the Project -- which occurred in 2012. As the Trustee states in the Opposition: "no one could have discovered that SCM received excess Management Fees until the conveyance of the Project to Lehman in March 2012." Furthermore, in the absence of fraud, misrepresentation, or an act of bad faith, a "Default" by SCM under the DMA requires written notice by the Debtor and an opportunity to cure. Perhaps tellingly, there is no evidence that the Debtor gave SCM written notice of breach -- for either overpayment of management fees or takeover of control by Lehman -- prior to the time it ceased funding the Project in late 2008. Accordingly, summary judgment must be granted to the Defendants on this claim. A claim based on unjust enrichment -- whether titled unjust enrichment or restitution -- may be brought under California law. An unjust enrichment claim under California law requires "receipt of a benefit and unjust retention of the benefit at the expense of another." It is undisputed that the Debtor conferred a benefit of $4 million of payments for management fees and $3 million of payments for expenses. Under California law, the Trustee has a claim for unjust enrichment (or restitution) unless the damages to SCM exceeded this $7 million benefit conferred on SCM. So, if the Defendants could establish as a matter of undisputed fact that SCM's damages exceeded the approximately $7 million paid by the Debtor, the Defendants would be entitled to summary judgment on this unjust enrichment claim. The Court does not know whether SCM could establish that its damages exceeded $7 million. The amount of SCM's damages from the Debtor/Trustee's breach of the DMA was not originally at issue in this MSJ, so the parties have neither briefed nor submitted evidence regarding the amount of such damages. The Court will continue this MSJ for the purpose of allowing the parties to provide evidence of the amount of SCM's damages. In conclusion, Judge Mund grants the MSJ in part: judgment is granted to the Defendants on the first claim for breach of contract. As to the second claim for restitution and/or unjust enrichment, the MSJ will be continued until Sept. 12, 2017, at 10:00 a.m., in order to give the parties an opportunity to present evidence on the issue of whether SCM's damages arising from the Debtor/Trustee's breach of the DMA exceeded the payments by the Debtor to SCM. No later than Sept. 6, 2017, the Defendants shall file either (i) their evidence of the amount of such damages or (ii) a statement that they do not wish to go forward on this issue (in which case the Court will deny summary judgment to the Defendants on this second claim for unjust enrichment and/or restitution). The Court will set a schedule for the remaining briefing on this issue at the Sept. 12, 2017 hearing. Finally, at the hearing on this MSJ, the Defendants' counsel clarified that they were not asking for a final ruling, but merely a recommendation of ruling to the District Court. As the Court is not aware of any ruling on whether these claims are core proceedings and the Court's resulting ability (or inability) to issue final rulings, it will reserve the issue. As the parties' numerous motions for summary judgment are not being sent piecemeal to the District Court for interlocutory review, there is no need to resolve at this time whether this Court will be issuing final rulings or proposed findings of fact and conclusions of law. The bankruptcy case is In re: Palmdale Hills Property, Inc. and related Debtors, Chapter 11, Debtor(s). Steven M Speier Plaintiff(s), v. Argent Management, LLC, SunCal Management LLC Defendant(s), Case No. 8:08:bk-17206-ES (Bankr. C.D. Cal.). The adversary proceeding is Palmdale Hills Property, Inc. and related Debtors, Chapter 11, Debtor(s). Steven M Speier Plaintiff(s), v. Argent Management, LLC, SunCal Management LLC Defendant(s), Adv No. 1:16-ap-01125-GM (Bankr. C.D. Cal.). A full-text copy of Judge Mund's Memorandum Decision dated August 2, 2017, is available at https://is.gd/cN2V3B from Leagle.com. Steven M Speier, Plaintiff, represented by Mike D. Neue, Dynamic Law Group, P.C. & Gary A. Pemberton, Shulman Hodges & Bastian LLP. SunCal Management LLC, Defendant, represented by Craig H. Averch -- caverch@whitecase.com. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- had more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Gramercy Warehouse Funding LLC and several creditors filed involuntary petitions each against LBREP/L-SunCal Master I LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11, 2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and 08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender, Rankin & Brill represents the petitioners. SunCal affiliates led by Palmdale Hills Property, LLC, filed voluntary Chapter 11 petitions (Bankr. C. D. Calif. Case No. 08-17206) on Nov. 6, 2008. Affiliates that also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. SunCal Companies is not in bankruptcy. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. PETERSBURG, VA: S&P Revises Outlook on GO Bonds to Stable --------------------------------------------------------- S&P Global Ratings has revised its outlook on Petersburg, Va.'s general obligation (GO) bonds outstanding to stable from negative, and affirmed its 'BB' underlying rating on the bonds. "The outlook revision reflects our view of the city's commitment to restoring financial stability following years of fiscal imbalance," said S&P Global Ratings credit analyst Timothy Barrett. The city has taken a number of key steps toward financial recovery, including repaying a portion of past due obligations in addition to creating a viable plan to strengthening budgetary flexibility and liquidity, supported by some recently adopted financial policies. S&P said, "The stable outlook further reflects our expectation that Petersburg will make full and timely payment on its current debt obligations and that the city will have continued market access within the next few months when it comes time to securing a short-term note for liquidity purposes. "At the same time, S&P Global Ratings assigned its 'A' long-term rating, and stable outlook, to Petersburg's GO and refunding bonds, series 2017A (tax-exempt), and GO refunding bonds, series 2017B (taxable), based on our assessment of the city's eligibility for, and participation in, the Virginia State Aid Intercept program. The strength and availability of the city's state aid to intercept support program credit characteristics." The series 2017 bonds and the city's GO bonds outstanding are secured by the city's full faith and credit pledge. The city will levy without limitation as to rate or an amount, an ad valorem tax on all taxable property within its jurisdiction to pay principal and interest on its GO bonds. Series 2017A and 2017B bond proceeds will be used to refund and restructure previously issued GO and revenue bond debt in the amount of $21.3 million in addition to providing about $3.0 million in new money for essential equipment needs. S&P said, "At the same time, due to the city's participation in governmental agreements to provide for debt service payments, we affirmed our 'BB' underlying rating on the Stafford County & Staunton Industrial Development Authority's Municipal League-Virginia Association of Counties Finance Recovery Act Bond Pool II (of which Petersburg is a participant) under our multiple revenue stream criteria. Each participant's obligation to pay loans is several and not joint. In the absence of a step-up provision, the rating reflects the credit quality of the pool's weakest participant, which we believe is Petersburg. "The stable outlook on the Virginia state aid intercept rating reflects our opinion of the strength of the intercept structure. We do not expect the Virginia state aid intercept rating to change within the two-year outlook horizon. "The stable outlook on the underlying rating reflects Petersburg's commitment to restoring balanced financial operations following years of imbalance. In our view, the city has taken significant steps toward identifying problems with its internal controls and the resulting accumulated deficit position, in addition to forming a plan to improve reserves and maintain structural balance. "Although we believe there are still significant risks associated with the city's finances, we believe the city is on a new trajectory aimed at restoring a healthier financial position. "The ability of Petersburg's new management team to demonstrate improved internal controls and structural financial balance, while fully repaying prior obligations, could lead to us to raise the rating, potentially by multiple notches. "If the city's liquidity position were to worsen as a result of a failure to implement the proposed financial recovery plan, the city's ability or willingness to repay its debt obligations came into question, or the city were unable to successfully secure short-term liquidity, we could lower the rating." PF CHANG'S: Moody's Rates Proposed $325MM Senior Term Loan Ba3 -------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to P.F. Chang's China Bistro, Inc.'s (P.F. Chang's) proposed $325 million senior secured term loan and $55 million senior secured revolving credit facility. Moody's also affirmed the company's existing B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating (PDR) and Caa1 senior unsecured note rating. The rating on the existing senior secured bank facility is Ba3. In addition, the outlook was changed to stable from negative. RATINGS RATIONALE "The change in outlook to stable from negative reflects the benefits the proposed refinancing provides by adding additional cash, extending its debt maturity profile and providing ample room under its revised covenants all of which should give management more time to focus on its brands." Stated Bill Fahy, Moody's Senior Credit Officer. "The outlook also reflects Moody's views that credit metrics should gradually improve as management focuses on improving same store sales at PF Chang China Bistro (Bistro) as well as stabilizing operating trends at Pei Wei" stated Fahy. The affirmation of P.F. Chang's B3 CFR reflects the company's high leverage and modest coverage, very weak operating trends at Pei Wei and a challenging operating environment that will continue to pressure same store sales, earnings and debt protection metrics. The ratings are supported by the company's high level of brand awareness, reasonable scale, a more strategic focus on driving traffic, cost saving initiatives, and adequate liquidity. Assignments: Issuer: P.F. Chang's China Bistro, Inc. -- Senior Secured Bank Credit Facility, Assigned Ba3(LGD2) Outlook Actions: Issuer: P.F. Chang's China Bistro, Inc. -- Outlook, Changed To Stable From Negative Affirmations: Issuer: P.F. Chang's China Bistro, Inc. -- Probability of Default Rating, Affirmed B3-PD -- Corporate Family Rating, Affirmed B3 -- Senior Unsecured Regular Bond/Debenture, Affirmed Caa1(LGD5) To be Withdrawn: Issuer: P.F. Chang's China Bistro, Inc. -- Senior Secured Bank Credit Facility, currently Ba3(LGD2) Factors that could result in an upgrade include a sustained improvement in earnings driven by positive operating trends, particularly a stabilization of traffic, and lower costs. Specifically, an upgrade would require EBIT coverage of interest expense above 1.75 times and debt to EBITDA of under 5.5 times on a sustained basis. A higher rating would also require PF Chang to maintain good liquidity. Factors that could result in a downgrade include an inability to stabilize same store sales--particularly, weak traffic trends--or a failure to improve financial performance such that credit metrics remain weak. Specifically, a downgrade could occur if debt to EBITDA remains above 7.0 times or EBITDA less Capex to interest remained below 1.0 times on a sustained basis. The ratings could also be downgraded if liquidity were to deteriorate for any reason. An inability to successfully execute the refinancing of its credit facility as currently planned could also result in a negative rating action. P.F. Chang's China Bistro, Inc. (P.F. Chang's) operates restaurants under the brand names P.F. Chang's China Bistro (Bistro) and Pei Wei Asian Diner (Pei Wei) in the casual and fast casual dining segments of the restaurant industry. Annual revenue is approximately $1.3 billion. P.F. Chang's is owned by Centerbridge Capital Partners II, L.P. The principal methodology used in these ratings was Restaurant Industry published in September 2015. PHIBRO ANIMAL: S&P Affirms Then Withdraws 'B+' Corp Credit Rating ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' corporate credit rating on Phibro Animal Health Corp. following the redemption of the company's outstanding debt. The outlook is stable. S&P subsequently withdrew all ratings at the company's request, including the 'B+' issue-level rating on the now-redeemed first-lien senior secured term loan ('3' recovery rating; rounded estimate: 50%). PHOTOMEDEX INC: Inks Two-Year Employment Agreement with CFO ----------------------------------------------------------- PhotoMedex, Inc., entered into an employment agreement with Stephen Johnson, under which Mr. Johnson will serve as chief financial officer of the Company. The term of the Johnson Agreement is for a period commencing on May 17, 2017, and ending on the second anniversary of the Effective Date. The Term will be renewed automatically for additional one year period unless terminated by either the Company or Mr. Johnson in writing delivered no less than 90 days prior to the expiration of the then-applicable Term. Mr. Johnson will be entitled to a base salary of $300,000 per annum, payable in accordance with the Company's normal payroll practices. Increases in the Base Salary during the Term will be determined from time to time in the sole discretion of the Board. Mr. Johnson will also be entitled to a bonus of not less than 35% of his Base Salary, subject to achieving certain milestones to be set by the Company's compensation committee within 30 days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company's chief executive officer. In addition, Mr. Johnson will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company's compensation committee within 30 days after receipt of the business plan. Mr. Johnson and his family will be eligible to participate in the Company's healthcare, welfare benefit, life insurance, fringe benefit and any qualified or non-qualified retirement plans in effect at the Company on the same basis as those benefits are made available to the other senior executives of the Company. If the Company does provide a health insurance plan for which Mr. Johnson is eligible, he will be reimbursed by the Company for the cost of the health insurance paid by him for himself and his family. If the Company does not provide a health insurance plan for which he is eligible, Mr. Johnson will be reimbursed by the Company for the cost of health insurance paid by him for himself and his family, grossed-up to cover any taxes Mr. Johnson would be required to pay for that reimbursement. Additionally, Mr. Johnson will receive such perquisites as are or have previously been made available to other senior executives of the Company, as well as four weeks paid vacation per year, and will be paid annually in cash for vacation days not taken by him so long as no more than four weeks of vacation are accrued each year for purposes of cash payments. Mr. Johnson's employment may be terminated by the Company for Cause, as defined in the Agreement, upon delivery of a Notice of Termination by the Company to him, except where he is entitled to a cure period, in which case the Date of Termination will be upon the expiration of the cure period if the matter constituting Cause was not cured. His employment will terminate automatically upon his resignation (other than for Good Reason or due to the Executive's death or Disability). If Mr. Johnson's employment is terminated by the Company for Cause, or if he resigns other than for Good Reason, he is entitled to receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation days, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, (b) reimbursement for any unreimbursed business expenses incurred by him in accordance with the Company's policy prior to the Date of Termination, and (c) such Employee Benefits, if any, to which he may be entitled upon termination of employment under the terms of the plan documents and applicable law (including under the applicable provisions of Consolidated Omnibus Budget Reconciliation Act of 1985, as amended). If Mr. Johnson's employment is terminated by the Company other than for Cause, immediately upon delivery of a Notice of Termination by the Company to him, or if it terminates automatically and immediately upon his resignation for Good Reason at the end of any applicable cure period (if the circumstances giving rise to Good Reason are not cured), then Mr. Johnson will receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, plus an additional 12 months of Annual Compensation, together in a lump sum payment; (b) acceleration of any then-unvested stock options, restricted stock grants or other equity awards; (c) payment or reimbursement, as applicable, of the full health insurance costs for Mr. Johnson and his family under a Company-provided group health plan or otherwise for 24 months, in compliance with the provisions regarding deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, if applicable; (d) if any bonus or other form of additional compensation was paid to any other executives of the Company for the fiscal year during which Mr. Johnson's employment ceased pursuant to this Section 5(c), a cash amount equal to the largest bonus or other form of additional compensation payment made by the Company to any other executive of the Company during that fiscal year; (e) reimbursement for any accrued but unused vacation days and/or unreimbursed business expenses incurred by Mr. Johnson in accordance with the Company's policy prior to the Date of Termination; and (f) other Employee Benefits, if any, as to which he may be entitled upon termination of employment. Moreover, If Mr. Johnson resigns for Good Reason due to a Change of Control, as defined in the Johnson Agreement, then he will be entitled to payment of an additional 18 months of Annual Compensation, not 12 months as provided in the previous paragraph, along with payment of the other amounts and benefits as provided in that paragraph. Finally, Mr. Johnson's employment terminates upon his death and may be terminated by the Company, within 10 days after the delivery of a Notice of Termination by the Company to Mr. Johnson (or his legal representative) in the event of his disability. In such instances, Mr. Johnson will receive the same payments and other items as he would be entitled to receive if his employment was terminated for other than Cause, or if he resigned for Good Cause, except that he (in case of disability) or his estate (in the event of death) will have the right to exercise any unexercised and vested options for a period of 90 days, and, in addition, to receive payment for accrued but unpaid vacation time, if any. The Agreement is governed by the laws of the State of New York and contains customary general contract provisions. Singal Agreement Additionally, the Company has amended the Employment Agreement of Suneet Singal, entered into on May 17, 2017, to provide that Mr. Singal's annual compensation will be set initially at $250,000; that amount will be adjusted going forward as Mr. Singal transitions to the provision of services to the Company on a full-time basis. Mr. Singal will also be entitled to a bonus, amount to be determined and subject to achieving certain milestones, to be set by the Company's compensation committee within 30 days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company's chief executive officer, and he will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company's compensation committee within 30 days after receipt of the business plan. First Amendment to the Interest Contribution Agreement On Aug0 3, 2017, the Company entered into a First Amendment to the Interest Contribution Agreement, dated March 31, 2017, by and among First Capital Real Estate Operating Partnership, L.P., First Capital Real Estate Trust Incorporated, FC Global Realty Operating Partnership, LLC and PhotoMedex, Inc., as modified by the Agreement to Waive First Closing Deliverables, dated May 17, 2017, and the Agreement to Waive Second Closing Deliverables, dated July 3, 2017. Under the First Amendment, the Contributor Parties irrevocably waived any conditions to the closings set under the Contribution Agreement, including those conditions contained in Section 7 of the Contribution Agreement that require the Company to maintain its listing and active trading of its securities on any of the NASDAQ markets. The Contributor Parties also reaffirmed their obligation to use their best efforts to satisfy the Mandatory Contribution Conditions and contribute the Mandatory Entity Interests, both as defined in the Contribution Agreement, on or before Dec. 31, 2017. Additionally, the Acquiror Parties confirmed the Contributor Parties' understanding that the failure of the Contributor Parties to satisfy the Mandatory Contribution Conditions after using commercially reasonable efforts to do so does not give rise to a unilateral right of the Acquiror Parties to terminate the Contribution Agreement pursuant to Article 10 of the Contribution Agreement. The First Amendment contains customary representations and warranties and general contract terms. About PhotoMedex PhotoMedex, Inc., is a global health products and services company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians, ophthalmologists, optometrists, consumers and patients. The Company provides proprietary products and services that address skin conditions including psoriasis, vitiligo, acne, actinic keratosis, photo damage and unwanted hair, as well as fixed-site laser vision correction services at its LasikPlus(R) vision centers. As of March 31, 2017, Photomedex had $14.05 million in total assets, $13.38 million in total liabilities and $677,000 in total stockholders' equity. Photomedex reported a loss of $13.26 million for the year ended Dec. 31, 2016, compared to a loss of $34.55 million for the year ended Dec. 31, 2015. Fahn Kanne & Co. Grant Thornton Israel, in Tel-Aviv, Israel, issued a "going concern" opinion on the consolidated financial statements for the year ended Dec. 31, 2016, citing that as of Dec. 31, 2016, the Company had an accumulated deficit of $115.6 million and shareholders' deficit of $1.408 million. Also, during the most recent periods the Company has incurred losses and negative cash flows from continuing operations and was forced to sell certain assets and business units to obtain additional liquidity resources to support its operations. In addition, on Jan. 23, 2017, the Company completed the sale of its consumer products division which represented the sale of substantially all of the remaining operations and assets of the Company. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. PLAIN LEASING: Wants to Continue Using Cash Until Oct. 31 --------------------------------------------------------- Plain Leasing Inc. asks the U.S. Bankruptcy Court for the Central District of California to approve the Debtor's second stipulation with Bank of Hope for use of cash collateral through Oct. 31, 2017. A hearing on the Debtor's request is scheduled for Aug. 23, 2017, at 11:00 a.m. As reported by the Troubled Company Reporter on July 17, 2017, the Court approved a stipulation authorizing the Debtor to use cash collateral. The Bank was entitled to adequate protection of its interests as set forth in the stipulation. The TCR reported on June 5, 2017, that the Debtor sought court permission to use of the Bank's cash collateral through July 31, 2017, pursuant to the terms of a stipulation with the Bank. The Debtor and the Bank have now entered into a second stipulation for use of cash collateral. As set forth in the Second Stipulation, the Bank has a blanket lien on all of the Debtor's assets, including cash. The Debtor is in the business of renting out trucks and chassis and Debtor's assets consist of trucks and chassis, which the Debtor rents out to third parties through rental and lease agreements. Rental and lease income is the sole source of the Debtor's income. Prepetition, the Debtor's loan from the Bank had a balance of no less than $1,328,149. That balance is secured by all of the Debtor's assets, including trucks, chassis and rental and lease income. Under the loan with the Bank, the Debtor is required to make the regular monthly payments in the aggregate amount of not less than $30,366.14. the Debtor was current on loan payments as of the 26 Petition Date and has remained current post petition. The Debtor has sufficient income to continue making loan payments to the Bank and intends to remain current on loan payments. The Second Stipulation is for a limited interim period, which expires on Oct. 31, 2017. The Debtor requests that the Court approve the Second Stipulation so that Debtor can continued to use the Bank's cash collateral to continue operating its business, paying ordinary business expenses and continue to make loan payments to the Bank. The Bank and the Debtor agree to extend the expiration date of the Second Stipulation, in writing, without the need for a further hearing. The Bank and the Debtor request that the Court allow the Bank and the Debtor to submit a subsequent written stipulation to extend the expiration date of the Second Stipulation for Court approval, without the need for a further hearing on the matter. As for adequate protection, the Debtor will make the regular monthly payments in the aggregate amount of not less than $30,366.14 as they come due under the lease documents. As further adequate protection, the Bank is granted a replacement lien on the rents, proceeds and profits of the prepetition collateral, with the replacement Lien being a perfected security interest in and to the post-petition collateral having the same extent, validity and priority Bank had in the prepetition collateral on the Petition Date. A copy of the Debtor's request is available at: http://bankrupt.com/misc/cacb17-12539-69.pdf About Plain Leasing Plain Leasing, Inc., in the business of renting out trucks and chassis, filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 17-12539) on March 2, 2017, estimating under $1 million in both assets and liabilities. The Debtor's counsel is Joon M. Khang, Esq., at Khang & Khang LLP. PROJECT SILVERBACK: Moody's Assigns B3 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating to first time issuer Project Silverback Holding Corp, the parent company of software provider, Sparta Systems Inc. Moody's also assigned B2 ratings to the company's proposed first lien debt facilities. The first lien debt along with an unrated second lien term loan and new equity is being used to finance the acquisition of Sparta by private equity firm New Mountain Capital. The ratings outlook is stable. RATINGS RATIONALE The company's B3 Corporate Family Rating is driven by the very high closing leverage, modest free cash flow and limited scale. The ratings also consider the company's leading niche position in the quality management systems (QMS) software market for pharmaceutical and medical device providers and expectation of continued mid-single digit growth. Run rate leverage based on trailing March 2017 results is estimated in the high 7's and free cash flow to debt at 3-4% pro forma for the new debt, in line with metrics at other B3 rated software companies. Though the company is small (annual revenues of approximately $113 million) relative to other rated private equity owned software companies, its integrated systems to track quality issues through the supply and distribution chain are critical to pharmaceutical and medical device makers. Sparta is estimated to be the largest provider of QMS software to the major players in the pharmaceutical industry. The stable outlook reflect Moody's expectations of continued moderate growth and moderate acquisition activity. In the absence of acquisitions, leverage should trend to well under 7x (under 6x on a cash EBITDA basis) and free cash flow to debt should trend above 5% over the next two years. The ratings could be downgraded if performance declines, leverage is sustained above 8x or free cash flow is negative. The ratings could be upgraded if leverage trends below 6.5x (5.5x on a cash EBITDA basis) and free cash flow to debt trends above 7%. Liquidity is adequate based on an undrawn $25 million revolver, limited cash and modest but positive free cash flow over the next year. Assignments: Issuer: Project Silverback Holding Corp. -- Probability of Default Rating, Assigned B3-PD -- Speculative Grade Liquidity Rating, Assigned SGL-3 -- Corporate Family Rating, Assigned B3 -- Senior Secured First Lien Bank Term Loan, Assigned B2 (LGD3) -- Senior Secured First Lien Bank Revolving Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: Project Silverback Holding Corp. -- Outlook, Assigned Stable The principal methodology used in these ratings was Software Industry published in December 2015. Sparta Systems, Inc. is a provider of quality management software systems to the pharmaceutical and medical device industries. The company, headquartered in Hamilton Township, NJ had revenues of approximately $113 million for the twelve months ended March 2017. PROJECT SILVERBACK: S&P Gives B- CCR, Rates $265MM 1st Lien Debt B- ------------------------------------------------------------------- S&P Global Ratings assigned its 'B-' corporate credit rating to Project Silverback Holdings Corp., the parent company of Hamilton, N.J.-based Sparta Systems Inc. The outlook is stable. S&P said, "At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the company's $265 million first-lien credit facility, consisting of a $25 million revolving credit facility due 2022 and a $240 million first-lien term loan due 2024. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate 60%) recovery in the event of a default. In addition, we assigned our 'CCC' issue-level rating and '6' recovery rating to the company's $75 million second-lien term loan due 2025. The '6' recovery rating indicates our expectation of negligible (0%-10%; rounded estimate 5%) recovery in the event of a default." "The rating on Project Silverback reflects our view of Sparta Systems' limited scale focusing on the highly fragmented quality management systems (QMS) market and its biopharma industry concentration, partly offset by its high customer retention rates and above-average adjusted EBITDA margins," said S&P Global Ratings credit analyst Geoffrey Wilson. The stable outlook reflects S&P's expectation that the company will maintain its good market position and strong retention rates in the highly fragmented QMS industry. PUERTO RICO: Committee Tasked to Conduct Debt Probe Appointed ------------------------------------------------------------- The Financial Oversight and Management Board for Puerto Rico, created by Congress under the bipartisan Puerto Rico Oversight, Management and Economic Stability Act ("PROMESA" or the "Act"), announced on Aug. 2, 2017, its intention to conduct a comprehensive investigation of Puerto Rico's debt and its relationship to the fiscal crisis and to form a special committee of the Oversight Board to carry out such investigation, including through the appointment by the special committee of an independent investigator. On Aug. 8, the Oversight Board said it has appointed to the Special Investigation Committee Board members Jose B. Carrion, Arthur J. Gonzalez, Ana J. Matosantos and David A. Skeel, Jr. The Oversight Board is delegating to the Special Committee its authority to "investigate the disclosure and selling practices in connection with the purchase of bonds issued by a covered territory for or on behalf of any retail investors including any underrepresentation of risk for such investors and any relationships or conflicts of interest maintained by such broker, dealer, or investment adviser . . . as provided in applicable laws and regulations." About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are onboard as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at: https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., Franklin Advisers, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $3.5 billion in COFINA Bonds and over $2.9 billion in other bonds issued by Puerto Rico and other instrumentalities, including over $1.8 billion of Puerto Rico general obligation bonds ("GO Bonds"). White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual Advisers LLC, Monarch Alternative Capital LP, Senator Investment Group LP, and Stone Lion Capital Partners L.P. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed a nine-member Official Committee of Retirees and a seven-member Official Committee of Unsecured Creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. PUERTO RICO: Gibson Dunn Files Challenge to Oversight Board ----------------------------------------------------------- Gibson Dunn on Aug. 7, 2017, filed a constitutional challenge to the Puerto Rico oversight board, suggesting the Board is acting without transparency, accountability, or oversight, which could impact all of those different kinds of holders of PR debt. On behalf of funds managed by Aurelius Capital ("Aurelius"), Gibson Dunn filed the objection and motion to dismiss the Commonwealth's Title III proceeding on the ground that the appointments of the members of the Puerto Rico Oversight Board violate the Appointments Clause of the United States Constitution. Theodore B. Olson will serve as Aurelius's lead counsel in this matter. He will be assisted by his partners Matthew D. McGill and Helgi Walker. Mr. McGill previously represented creditors of Puerto Rico before the Supreme Court in their successful challenge to Puerto Rico's "Recovery Act," which attempted to set up a bankruptcy regime for Puerto Rico under Puerto Rican law. Ms. Walker leads, along with Mr. Olson, a pending and historic separation of powers challenge to the Consumer Financial Protection Board, in which they prevailed before a panel of the D.C. Circuit. Aurelius also has filed a motion for relief from the automatic stay imposed by PROMESA so that Aurelius may seek in district court declaratory and injunctive relief that would prohibit the Board from operating until it is reconstituted in compliance with the Appointments Clause. The following quote may be attributed to Theodore B. Olson of Gibson, Dunn & Crutcher LLP: "The members of the Oversight Board were appointed in blatant violation of the Appointments Clause of the Constitution. This constitutional problem with the Board has been obvious ever since the legislation creating it was debated in Congress, with at least one Senator openly warning of the defect -- so this suit comes as no surprise. Whether or not one agrees with the policy positions of the Board, foundational legal principles require that it be constituted in compliance with the Constitution." A copy of the Objection and Motion of Aurelius to Dismiss Title III Petition is available for free at: http://bankrupt.com/misc/ObjectionandMotiontoDismiss.pdf A copy of the Motion of Aurelius for Relief from Automatic Stay is available for free at: http://bankrupt.com/misc/LiftStayMotion.pdf About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are onboard as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at: https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., Franklin Advisers, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $3.5 billion in COFINA Bonds and over $2.9 billion in other bonds issued by Puerto Rico and other instrumentalities, including over $1.8 billion of Puerto Rico general obligation bonds ("GO Bonds"). White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual Advisers LLC, Monarch Alternative Capital LP, Senator Investment Group LP, and Stone Lion Capital Partners L.P. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed a nine-member Official Committee of Retirees and a seven-member Official Committee of Unsecured Creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. QUIZHPI CAB: Case Summary & Unsecured Creditor ---------------------------------------------- Debtor: Quizhpi Cab Corp. 23-31 30th Drive, First Floor Astoria, NY 11102 Type of Business: Quizhpi Cab Corp. is located in Astoria, New York and is listed as an active domestic business corporation. Founded in 2009, Quizhpi Cab Taxi provides taxi and limousine services. It is a small business Debtor as defined in 11 U.S.C. Section 101(51D). Chapter 11 Petition Date: August 7, 2017 Case No.: 17-44085 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Carla E. Craig Debtor's Counsel: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 3099 Coney Island Avenue, 3rd Floor Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 E-mail: alla@kachanlaw.com Total Assets: $10,010 Total Liabilities: $1.23 million The petition was signed by Nelly Lucero, president. The Debtor's list of 20 largest unsecured claims has a single entry: Melrose Credit Union, with an unknown amount of unsecured claim. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/nyeb17-44085.pdf RAUL POSADA: Summary Judgment Bid in Clawback Suit Denied --------------------------------------------------------- Judge Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico denies the Motion for Summary Judgment filed by Raul Andres Benavides-Posada and Leticia Angela, as well as Banco Popular de Puerto Rico's Opposition to Plaintiff's Motion for Summary Judgment and Cross Motion for Summary Judgment because of evidentiary insufficiency. Accordingly, Judge Tester has directed the Clerk to schedule a final pre-trial hearing with the joint pre-trial report due by the parties seven days prior to the hearing. On December 31, 2007, the Debtors obtained a mortgage loan and signed mortgage deed number 1478 over their real property. The mortgage deed was originally filed with the Registry of Property of Puerto Rico on January 17, 2008, and on May 24, 2012, the Registry notified certain defects which prevented its recordation. Subsequently, on August 17, 2016, Banco Popular de Puerto Rico filed with the Registry mortgage deed number 1478, dated December 31, 2007, over the Debtors' property. On December 12, 2016, after their bankruptcy filing, the Debtors also filed a Complaint to Avoid and Recover Preferential Transfers, to recover property of the estate pursuant to the Bankruptcy Code, and filed a Motion for Summary Judgment on January 2, 2017. Responding to the Debtors' request, Banco Popular presented an opposition to the summary judgment and cross-motion requesting summary judgment. Under Puerto Rico law, a mortgage is validly constituted only if it is "stipulated in a deed" that is "recorded in the Property Registry." Without the recording, "a creditor only has an unsecured personal obligation regarding the underlying debt." Section 547 of the Bankruptcy Code governs the avoidance of preferential transfers and requires that five factors be established in order to successfully sustain a preference action. Section 547(b) states, in pertinent part, that: the trustee may avoid any transfer of an interest of the debtor in property -- (1) to or for the benefit of a creditor; (2) for or on account of an antecedent debt owed by the debtor before such transfer was made; (3) made while the debtor was insolvent; (4) made . . . (A) on or within 90 days before the date of the filing of the petition; or (B) between 90 days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and (5) that enables such creditor to receive more than such creditor would receive if -- (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. The Court cites that U.S. Supreme Court articulated the purpose of section 547 to be twofold: (1) to provide protection to the debtor's assets by discouraging creditors from running to the courthouse to force collection as the debtor slides into bankruptcy; and, (2) to insure that the policy behind the Code requiring that all creditors be treated fairly and equally, is not violated as a result thereby. The Court finds the following undisputed facts: (1) The deed presentation in the Registry of Property by Banco Popular on the date of August 17, 2016, constitutes a transfer of an in interest of the Debtors in property to or for the benefit of a creditor. (2) Such transfer of property was for or on account of an antecedent debt owed by the Debtors before such transfer was made -- the deed presented in the Registry of Property by the Defendant on August 17, 2016, constitutes the attempt of recordation of a lien on Debtors' property, regarding a loan incurred by the Debtors in 2007 with such creditor. (3) At the time the transaction was effectuated, the Debtors were insolvent -- the deed presentation in the Registry of Property occurred on August 17, 2016, and the Debtors' petition for relief was filed on September 16, 2016. Therefore, the transaction occurred within 90 days pre petition in which time the Debtors are presumed to be insolvent under section 547(f) and so the insolvency requirement is met. (4) The transfer of interest in property was "made on or within 90 days before the date of filling of the petition." In the case at bar, if the recordation of the deed were granted in the foreseeable future by the Registry of Property under the August 16, 2016 presentation, such transfer in interest in property, backdates to the date of presentation for recordation. This means, that the time in which the transaction was perfected falls within the "reach-back" of the 90 days pre-petition under Section 547. Accordingly, the Court concludes that the five requirements under section 547 are not established by undisputed evidence. Particularly, because one remaining requirement under section 547, which was not addressed, is "whether that transaction enabled such creditor to receive more than such creditor would receive if the case were a case under chapter 7 of this title, and such transaction was not made." From the motions and documents presented by the Plaintiffs and Defendant, such material fact was not established. Therefore, because of this evidentiary insufficiency, the Court is unable to dispose of the controversy at hand via summary judgment, pursuant to Federal Rules of Civil Procedure, Rule 56(c). A full-text copy of the Opinion and Order dated July 27, 2017, is available at https://is.gd/5k9l10 from Leagle.com. Raul Andres Benavides-Posada and Leticia Angela Mendez-Gonzalez filed their voluntary petition under Chapter 11 (Bankr. D.P.R. Case No. 16-07417) on September 16, 2016. The Debtors are represented by: Wanda I. Luna Martinez, Esq. Banco Popular de Puerto Rico is represented by Eyck O. Lugo Rivera, Esq. at Edge Legal Strategies PSC & Sergio A. Ramirez de Arellano. RESOLUTE ENERGY: Appoints Two New Directors to Board ---------------------------------------------------- The Board of Directors of Resolute Energy Corporation appointed Tod C. Benton as a Class II director of the Company and Janet W. Pasque as a Class III director of the Company. Tod Benton served as a vice chair for the Energy Group of BMO Capital Markets in the U.S. from February 2014 through July 2017. As a Vice Chair, Mr. Benton served primarily as a senior relationship contact for key relationships. Mr. Benton retired from BMO Capital Markets effective July 31, 2017. From February 2007 through January 2014, Mr. Benton was the Head of Energy Investment Banking in the U.S. for BMO Capital Markets. Mr. Benton managed the Energy Investment Banking team with coverage of approximately 100 energy clients. During that time, Mr. Benton was involved in numerous M&A, A&D, equity and debt capital markets transactions. From July 2004 through January 2007, Mr. Benton was the Head of Corporate Banking for Energy, Utilities and Chemicals at Deutsche Bank. As Head of the group, Mr. Benton managed a team of corporate bankers with a focus on the energy sector. Mr. Benton was a managing director at JP Morgan and predecessor companies from November 1987 through July 2004. During that time, Mr. Benton worked predominately with oil and gas companies as an advisor and capital raising partner. As a senior member of the leveraged finance group, Mr. Benton was involved in acquisition finance and general capital-raising for small to large cap energy companies. Mr. Benton holds a B.S. in Civil Engineering from Youngstown State University and an M.B.A. in Finance from the University of Houston. Janet Pasque has been involved in various consulting activities related to the energy industry since January 2011. From the Company's inception in 2004 to December 2010, Ms. Pasque was an officer of Resolute and its predecessor entities in charge of the land and business development functions. From 2003 until the founding of the Resolute's predecessor entity in 2004, Ms. Pasque served as a land consultant to multiple oil and gas companies. From 1993 until the acquisition of the company in 2001, Ms. Pasque was a vice president of HS Resources where she had responsibility for the land department and joint responsibility for the company's exploration activities. Following the acquisition of HS Resources by Kerr-McGee in 2001 until 2003, Ms. Pasque managed the land functions at Kerr-McGee Rocky Mountain Corp. From 1989 until joining HS Resources in 1993, Ms. Pasque was a consultant to a privately funded drilling venture focused on exploration in the Rocky Mountain region. Ms. Pasque also worked for Champlin Petroleum Company from 1982 to 1989 and for Texaco Inc. from 1980 until 1982, focused on land acquisitions and drilling agreements in California, Alaska and the Rocky Mountain region. Ms. Pasque received a B.S. in Business Administration with a concentration in Finance and Real Estate from Colorado State University. In conjunction with their appointments to the Board, Mr. Benton has been designated to serve on the Audit Committee and the Compensation Committee and Ms. Pasque has been designated to serve on the Compensation Committee and the Corporate Governance / Nominating Committee. There is no arrangement or understanding (i) between Mr. Benton and any other person pursuant to which he was selected to serve as a director or (ii) between Ms. Pasque and any other person pursuant to which she was selected to serve as a director. Additionally, there are no transactions involving the Company and either Mr. Benton or Ms. Pasque that the Company would be required to report pursuant to Item 404(a) of Regulation S-K. Mr. Benton and Ms. Pasque will receive pro rated equity and cash compensation for 2017 in accordance with the Company's standard director compensation arrangements as described in its Proxy Statement. About Resolute Energy Resolute Energy Corp. -- http://www.resoluteenergy.com/-- is an independent oil and gas company focused on the acquisition, exploration, exploitation and development of oil and gas properties, with a particular emphasis on liquids focused, long-lived onshore U.S. opportunities. Resolute's properties are located in the Paradox Basin in Utah and the Permian Basin in Texas and New Mexico. Resolute reported a net loss of $161.7 million in 2016 following a net loss of $742.27 million in 2015. As of March 31, 2017, Resolute Energy had $489.6 million in total assets, $565.5 million in total liabilities, and a total stockholders' deficit of $75.93 million. * * * As reported by the TCR on Feb. 27, 2017, Moody's Investors Service upgraded Resolute Energy Corporation's Corporate Family Rating (CFR) to 'B3' from 'Caa2', the Probability of Default Rating to 'B3-PD' from 'Caa2-PD' and its senior unsecured notes rating to 'Caa1' from 'Caa3'. The Speculative Grade Liquidity rating was affirmed at SGL-3. The rating outlook was changed to stable. "The upgrade to B3 reflects Resolute's improved capital structure, continued strong drilling results and improved production and drilling economics, which provide good visibility to continued growth in a mid $40s oil price environment without increasing debt leverage," noted John Thieroff, Moody's VP-Senior Analyst. "We expect moderation in the company's reserve- and production-based debt metrics from significant production growth at very competitive drillbit costs." The TCR reported on May 15, 2017, that S&P Global Ratings assigned its 'B-' corporate credit rating to Resolute Energy Corp. (REN). The rating outlook is stable. "The corporate credit rating reflects our assessment of REN's business risk profile as vulnerable, its financial risk profile as aggressive, and its liquidity as less than adequate, said S&P Global Ratings credit analyst, David Lagasse. RESOLUTE ENERGY: Will Hold 'Say-on-Pay' Votes Annually ------------------------------------------------------ Resolute Energy Corporation filed an amendment to the Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission on May 12, 2017. The sole purpose of the Amendment No. 1 is to disclose, as required by SEC regulations, the Company's determination of the frequency of future stockholder advisory votes regarding the compensation of the Company's named executive officers. No other changes have been made to the Original Filing. As reported by the Company in the Original 8-K Filing, at the Company's 2017 Annual Meeting of Stockholders held on May 12, 2017, a plurality of the Company's stockholders approved, on an advisory basis, holding future Say-on-Pay Votes on an annual basis. After considering the outcome of such advisory stockholder vote, the Company's Board of Directors determined on Aug. 1, 2017, that the Company will continue to hold a Say-on-Pay Vote every year, with the next Say-on-Pay Vote to be held at the Company's 2018 Annual Meeting of Stockholders. The next advisory stockholder vote on the frequency of future Say-on-Pay votes will be held no later than at the Company's 2023 Annual Meeting of Stockholders. About Resolute Energy Resolute Energy Corp. -- http://www.resoluteenergy.com/-- is an independent oil and gas company focused on the acquisition, exploration, exploitation and development of oil and gas properties, with a particular emphasis on liquids focused, long-lived onshore U.S. opportunities. Resolute's properties are located in the Paradox Basin in Utah and the Permian Basin in Texas and New Mexico. Resolute reported a net loss of $161.7 million in 2016 following a net loss of $742.3 million in 2015. As of March 31, 2017, Resolute Energy had $489.6 million in total assets, $565.5 million in total liabilities, and a total stockholders' deficit of $75.93 million. * * * As reported by the TCR on Feb. 27, 2017, Moody's Investors Service upgraded Resolute Energy Corporation's Corporate Family Rating (CFR) to 'B3' from 'Caa2', the Probability of Default Rating to 'B3-PD' from 'Caa2-PD' and its senior unsecured notes rating to 'Caa1' from 'Caa3'. The Speculative Grade Liquidity rating was affirmed at SGL-3. The rating outlook was changed to stable. "The upgrade to B3 reflects Resolute's improved capital structure, continued strong drilling results and improved production and drilling economics, which provide good visibility to continued growth in a mid $40s oil price environment without increasing debt leverage," noted John Thieroff, Moody's VP-Senior Analyst. "We expect moderation in the company's reserve- and production-based debt metrics from significant production growth at very competitive drillbit costs." The TCR reported on May 15, 2017, that S&P Global Ratings assigned its 'B-' corporate credit rating to Resolute. The rating outlook is stable. "The corporate credit rating reflects our assessment of REN's business risk profile as vulnerable, its financial risk profile as aggressive, and its liquidity as less than adequate, said S&P Global Ratings credit analyst, David Lagasse. ROBERT T WINZINGER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Robert T. Winzinger, Inc. P.O. Box 537 Hainesport, NJ 08036 Type of Business: Founded in 1960, Winzinger is a full-service contractor for roads, excavation, land development and demolition, utility and marine construction, and recycling technologies. Winzinger is certified as a: W.B.E. with the NJ Dept. of Treasury - Division of Property Management & Construction; Licensed Contractor with City of Philadelphia; Small Business Enterprise with the City of Philadelphia; Small Business Enterprise with the State of New Jersey; Public Works Contractor with the State of New Jersey; Home Improvement Contractor with the State of New Jersey Division of Consumer Affairs; and Maintains a Certificate of Employee Report with the State of New Jersey. Web site: http://winzinger.com/ Chapter 11 Petition Date: August 7, 2017 Case No.: 17-25972 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: David A. Kasen, Esq. KASEN & KASEN 1874 East Route 70, Suite 3 Cherry Hill, NJ 08003 Tel: (856) 424-4144 E-mail: dkasen@kasenlaw.com Estimated Assets: $10 million to $50 million Estimated Debt: $1 million to $10 million The petition was signed by Audrey Winzinger, vice president, secretary, and treasurer. A full-text copy of the petition is available for free at http://bankrupt.com/misc/njb17-25972.pdf Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ballard Spahr LLP Legal Services $161,704 CAT Financial Lease of CAT $203,855 972M Wheel Loader City of Philadelphia Transport $141,409 Deere Credit, Inc. Lease of Deere $229,609 844K Loader Denis Germano Legal Services $26,784 Galloway Township Block 1104, Lot 1 $20,594 Tax Collector Jimmie Leeds Rd., Galloway, Twp., NJ IUOE of E.P.A. & Union Benefits $67,114 DE. Benefit Pension Fund Kemper Equipment Inc. Equipment Parts $17,713 Majestic Oil Company Fuel $82,407 NJ Building Construction $86,041 BJ Building Laborers $52,921 Benefit Funds Local 332 Old Public Construction Insurance $119,960 Program GRP Audit Operating Engineers Local 825 $170,830 Orthodox Street Properties, LLC Terminated $54,998 Lease Peoples United Equipment Late Fees $17,893 Finance Corp Promac Mid Atlantic Inc. Misc. Parts for $33,079 equipment RMCB Ezpass $112,119 Signature Financial 14 Sandvik $118,881 Qi-341 Impactor T&M Associates Environmental $19,281 testing Teamsters Local 676 and $27,291 Employer Annuity Fund and Teamsters Local 676 and Employers Vacation Fund RXI PHARMACEUTICALS: Has Until Jan 2018 to Regain Nasdaq Compliance ------------------------------------------------------------------- On Feb. 2, 2017, RXi Pharmaceuticals Corporation received written notice from the Nasdaq Stock Market notifying the Company that it was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market, because the bid price of the Company's common stock had closed below the minimum $1.00 per share for the 30 consecutive business days prior to the date of the Notification Letter. In accordance with Nasdaq listing rules, the Company was afforded 180 calendar days, or until Aug. 1, 2017, to regain compliance with Nasdaq Listing Rule 5550(a)(2). The Company was unable to regain compliance with the bid price requirement by Aug. 1, 2017. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(ii), on Aug. 2, 2017, Nasdaq granted the Company an additional 180 calendar days, or until Jan. 29, 2018, to regain compliance with the bid price requirement. The Nasdaq determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. To regain compliance, the bid price of the Company's common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days at any time during the second 180-day compliance period. The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options, including a reverse stock split, to regain compliance with the minimum bid price requirement under the Nasdaq listing rules. About RXi RXi Pharmaceuticals Corporation -- http://www.rxipharma.com/-- is a biotechnology company focusing on discovering and developing therapies primarily in the areas of dermatology and ophthalmology. The Company develops therapies based on siRNA technology and immunotherapy agents. Its clinical development programs include RXI-109, a self-delivering RNAi compound, which is in Phase IIa clinical trial that is used to prevent or reduce dermal scarring following surgery or trauma, as well as for the management of hypertrophic scars and keloids; and Samcyprone, an immunomodulation agent, which is in Phase IIa clinical trial for the treatment of various disorders, such as alopecia areata, warts, and cutaneous metastases of melanoma. The Company's preclinical program includes the development of products for ocular indications with RXI-109, including retinal and corneal scarring. Its discovery stage development programs include a dermatology franchise for the discovery of collagenase and tyrosinase targets for its RNAi platform; and ophthalmology franchise, a program for the discovery of sd-rxRNA compounds for oncology indications, including retinoblastoma. The company was incorporated in 2011 and is headquartered in Marlborough, Mass. RXi reported a net loss applicable to common stockholders of $11.06 million for the year ended Dec. 31, 2016, a net loss applicable to common stockholders of $10.43 million for the year ended Dec. 31, 2015, and a net loss applicable to common stockholders of $12.93 million for the year ended Dec. 31, 2014. As of March 31, 2017, RXi had $10.51 million in total assets, $2.26 million in total liabilities, all current, and $8.24 million in total stockholders' equity. SABBATICAL INC: U.S. Trustee Allowed to Appoint Chapter 11 Trustee ------------------------------------------------------------------ Judge Frank W. Volk of the U.S. Bankruptcy Court for the Southern District of West Virginia denied Sabbatical's Motion to Reconsider Order Granting U.S. Trustee['s] Motion to Appoint Chapter 11 Trustee. The Court granted the U.S. Trustee's Motion to Appoint Chapter 11 Trustee on March 24, 2017, following a hearing held over two days in November 2016. Sabbatical seeks reconsideration pursuant to Federal Rule of Civil Procedure 59(e). Sabbatical asserts several putative errors in the Trustee Order. Judge Volk, however, finds that the putative errors identified by Sabbatical are errant and fall well short of satisfying the demanding burden imposed by Rule 59. Sabbatical asserts, at best, a different interpretation of the evidence. In the final analysis, the Court was free to weigh the admissible evidence, draw reasonable inferences therefrom, and appropriately categorize the disquieting practice of frequent and sometimes unexplained transfers throughout the coal enterprise. At bottom, the management concerns advanced by Peoples Bank and, importantly, the UST, are well-founded and warrant the redress sought. Judge Volk, thus, denies Sabbatical's motion and directs the Clerk's Office to transmit a copy of this written opinion and order to all persons entitled to notice and to reflect the same on the Sabbatical, Inc., and jointly administered Dennis Johnson dockets. A full-text copy of Judge Volk's Memorandum Opinion and Order dated August 2, 2017, is available at: http://bankrupt.com/misc/wvsb3-16-30227-670.pdf About Sabbatical Inc. Sabbatical, Inc., sought protection under Chapter 11 of the Bankruptcy Code in the Southern District of West Virginia (Huntington) (Case No. 16-30247) on May 18, 2016. The petition was signed by Dennis Johnson, president. The case is assigned to Judge Frank W. Volk. The Debtor estimated both assets and liabilities in the range of $1 million to $10 million. Sabbatical, Inc.'s Chapter 11 case is jointly administered with the other Dennis Johnson cases, with the lead case captioned at 3:16-bk-30227. An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case of Sabbatical, Inc., as of Dec. 2, according to a court docket. SCRANTON, PA: S&P Hikes GO Debt Rating to BB+ on Improved Liquidity ------------------------------------------------------------------- S&P Global Ratings raised its rating on Scranton, Pa.'s general obligation (GO) debt one notch to 'BB+' from 'BB' and assigned its 'BB+' rating to the city's series 2017 GO bonds. The outlook is stable. The rating action reflects S&P Global Ratings' opinion of the city's improved budgetary flexibility and liquidity, bolstered in large part by proceeds from the sale of its sewer system. Over the past year, the city successfully sold its sewer system and used a majority of sale proceeds to retire more than $40 million in outstanding high-coupon debt. In addition, the city successfully suspended its cost-of-living-adjustments and intends to apply a portion of sewer system sale proceeds to pension funding. While these actions are expected to significantly lower the city's annual retirement and debt costs over the near term, S&P Global Ratings believes the city still lacks a realistic long-term plan to address its severely underfunded pensions. Without a credible plan, S&P Global Ratings is not certain the city will be able to address any significant contribution increases adequately over the long term. Therefore, S&P Global Ratings' assessment of management conditions is likely to remain weak. "We could raise the rating if liquidity were to improve and if management were to address fixed costs. In addition, while budgetary performance should improve in fiscal years 2017 and 2018, the city will need to sustain these results to demonstrate structural balance and continue to strengthen budgetary flexibility," said S&P Global Ratings credit analyst Linda Yip. "If the city cannot adequately address fixed costs, creating further budgetary pressure that results in weaker budgetary performance, flexibility, or liquidity, we could lower the rating." The stable outlook reflects S&P Global Ratings' opinion that the city will likely maintain, at least, adequate budget flexibility over the next two fiscal years. However, Scranton still faces substantial fixed costs associated with its pension and debt-service obligations. While the city's annual debt-service costs should decrease due to recent refundings, the city still lacks a credible plan to address its low-funded pensions, which will continue to pressure the budget. S&P Global Ratings understands officials intend to use series 2017 bond proceeds to current refund the city's series 2003B GO bonds for a net present value savings of about $1.4 million, shortening the overall maturity by two years; the series 2017 bonds mature in 2029. SHORB DCE: Wants to Obtain $1.7 Million in DIP Financing -------------------------------------------------------- Shorb DCE, LLC, asks for authorization from the U.S. Bankruptcy Court for the Central District of California to enter into negotiations to refinance the loans secured by existing liens on its property located at 910-912 Shorb Street, Alhambra, California 91803. A hearing to consider the Debtor's request will be held on Aug. 22, 2017, at 2:00 p.m. The Debtor seeks financing that will be used to pay off the all lienholders on the Property. The refinancing will allow Debtor to payoff the outstanding amounts owed to East West Bank, William B. Wright, and James Wang; and obtain a new loan in the amount of $1,700,000. The Debtor therefore believes that the refinancing is in the best interest of the Estate because all secured creditors will be paid in full. At the hearing held on June 27, 2017, the Court ordered that creditor Mr. Wright's motion to convert this Chapter 11 case was to be continued to Aug. 22, 2017, at 2:00 p.m. The Court noted that if the Debtor did not sell its property and provided payment of its creditors and the creditors of Las Tunas by Aug. 22, the Court would proceed with the hearing on the motion to convert. In a good faith effort to sell the Property, the Debtor was able to find few potential buyers. The purchase offer the Debtor received was in the amount of $2,250,000, but subject to a carry back amount of at least $200,000. Given that the amount owed under the first and second mortgage is at least $1,259,000, and after an estimated $867,000 due in capital gains taxes (federal and state) from the resulting sale, the Debtor could not complete the sale. The result of the sale would be that the Property sold for an amount substantially lower than fair market value, and would not tender enough proceeds to pay the Debtor's secured or unsecured creditors in full. The Debtor felt it was not in its best interests, or the creditors' interests. As an alternative, the Debtor is proposing a refinancing loan at the rate of 10.00% and which provides for eighteen months of interest only payments. A copy of the Debtor's request is available at: http://bankrupt.com/misc/cacb17-14240-77.pdf About Shorb DCE Shorb DCE, LLC, owns an 11-unit apartment building located at at 910-912 W. Shorb Street, Alhambra, California 91803 with a valuation of $2.6 million. Shorb DCE, LLC, is California Limited Liability Company owned by David Kwok and Curt Wang. Shorb DCE, LLC, is an affiliate of Las Tunas DCE, LLC, which sought bankruptcy protection on April 6, 2017 (Bankr. C.D. Cal. Case No. 17-14239). Shorb DCE filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 17-14240) on April 6, 2017. David Kwok, co-manager, signed the petition. At the time of filing, the Debtor disclosed $2.6 million in assets and $1.22 million in liabilities. The case is assigned to Judge Julia W. Brand. The Debtor is represented by Kevin Tang, Esq., at Tang & Associates. SIERRA HAMILTON: Moody's Withdraws 'C' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn all assigned ratings for Sierra Hamilton LLC (Sierra Hamilton) including the C Corporate Family Rating and the C senior secured rating on Sierra Hamilton's secured notes following the company's announcement it issued equity to its creditors in exchange for all of its outstanding rated debt. Issuer: Sierra Hamilton, LLC Ratings Withdrawn: -- Corporate Family Rating, Withdrawn, previously rated C -- Probability of Default Rating, Withdrawn , previously rated C-PD -- Senior Secured Notes Rating, Withdrawn, previously rated C (LGD5) Outlook Actions: -- Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE The company announced on July 31 that it had extinguished its rated debt through an agreement with its lenders to exchange its $110 million in senior secured notes for equity. This extinguishment of debt is the resolution of Sierra Hamilton's December 15, 2016 missed interest payment on the notes. Sierra Hamilton primarily provides on-site supervision personnel to oil & gas companies engaged in exploration, drilling, completion and production. SOOUM CORP: Hall & Company Raises Going Concern Doubt ----------------------------------------------------- SoOum Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2016. Hall & Company Certified Public Accountants and Consultants in Irvine, Calif., have expressed "substantial doubt" about the Company's ability to continue as a going concern stating that although the Company has established a source of revenues to cover certain of its operating costs, it incurred a loss in 2016 and cannot support a salary for its chief executive officer. For the three months ended December 31, 2016, SoOum listed a net loss of $346,857 on $638,660 of net revenues. At December 31, 2016, SoOum had total assets of $3.85 million, total liabilities of $9.94 million, and $6.10 million in total stockholders' deficit. A copy of the Form 10-K is available at: http://bit.ly/2vImLRt New York-based SoOum Corp., formerly Swordfish Financial Inc., is a commodity trading arbitrage firm. The Company uses its own technology to identify and exploit arbitrage opportunities. SoOum also plans to distribute trade intelligence to global subscribers in order to solve supply shortages and bring new business to local manufacturers. SOURCEHOV LLC: S&P Raises Then Withdraws CCR Amid Exela Deal ------------------------------------------------------------ S&P Global Ratings raised its corporate credit rating on SourceHOV LLC to 'B' from 'CCC+' and removed the rating from CreditWatch, where it had been placed with positive implications on Feb. 23, 2017. S&P said, "We then withdrew our ratings on SourceHOV's debt and subsequently withdrew our corporate credit rating on SourceHOV. At the time of the rating withdrawal, the outlook was stable." The rating withdrawal follows the closing of Irving, Texas-based Source HOV LLC's merger with Stamford, Conn.-based Novitex, with the creation of a new entity named Exela Technologies. "SourceHOV's operations will be absorbed into the newly formed entity, Exela Technologies, and accordingly we have raised our corporate credit rating on SourceHOV to 'B', the same rating as on Exela Technologies," said S&P Global Ratings credit analyst Minesh Shilotri. "In addition, all existing SourceHOV debt was repaid, so we are withdrawing all ratings on SourceHOV," Mr. Shilotri added. SUAREZ CORPORATION: Case Summary & Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: SCI Direct LLC dba BargMax LLC dba Biotech Research dba Chef Jon Molnar Specialty Foods dba Edenpure dba Fit One LLC dba International Home Shopping dba International Telecommunications dba Lindenwold Fine Jewelers dba Namath Products dba SCI Pinnacle dba Sports Innovations dba Stark Journal dba Steps2Invent LLC dba Suarez Enterprises IC-DISC Inc. dba Suarez Manufacturing Industries dba Success Products Industry dba The Hanford Press dba United States Commemorative Gallery dba US Commemorative Gallery 7800 Whipple Ave NW North Canton, OH 44720 Type of Business: SCI -- http://www.suarez.com-- is a direct marketing company currently offering hundreds of diversified products around the world. From heaters, food services, jewelry, body and skin care, collectible coins, and health products, SCI continues to lead the way through product innovation and multi-channel marketing. The Company offers services through mail, phone and internet, television, newspaper, and magazines. The Company started in business in 1968 when Benjamin Suarez started a small business from his home which eventually became Suarez Corporation Industries. Web site: http://www.suarez.com/ Chapter 11 Petition Date: August 7, 2017 Affiliated debtors that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- SCI Direct LLC 17-61735 Suarez Corporation Industries 17-61736 Retail Partner Enterprises LLC 17-61737 Media Service Corporation 17-61738 Court: United States Bankruptcy Court Northern District of Ohio (Canton) Judge: Hon. Russ Kendig Debtors' Counsel: Anthony J. DeGirolamo ANTHONY J. DEGIROLAMO, ATTORNEY AT LAW 3930 Fulton Drive NW, Suite 100B Canton, OH 44718 Tel: 330-305-9700 Fax: 330-305-9713 E-mail: ajdlaw@sbcglobal.net Debtors' Accountant: THE PHILLIPS ORGANIZATION Debtors' Special Counsel: Craig T. Conley, Esq. Debtors' Notice, Balloting, Agent & Claims Agent: KURTZMAN CARSON CONSULTANTS LLC Web site: http://www.kccllc.net/sci Suarez Corporation's Estimated Assets: $500,000 to $1 million. Suarez Corporation's Estimated Debt: $10 million to $50 million SCI Direct's Estimated Assets: $0 to $50,000 SCI Direct's Estimated Debt: $10 million to $50 million The petitions were signed by Benjamin D. Suarez, CEO. A full-text copy of SCI Direct's petition is available for free at: http://bankrupt.com/misc/ohnb17-61735.pdf SCI Direct's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Restless Noggins Trade Debt $5,304,113 Manufacturing LLC 334 Orchard Ave NE North Canton, OH 44720-2556 Weigi International Trade Debt $1,380,631 RM 816 Hollywood Plz 610 Nathan Rd Kowloon Hong Kong Quad Graphics Trade Debt $395,752 N61W23044 Harrys Way Sussex, WI 53089-3995 Walgreens Inc Trade Debt $376,115 1901 E Voorhees Mail Stop 745 Danville, IL 61832 Progressive Trade Debt $290,000 Machine Die Inc. 8406 Bavaria Dr E Macedonia, OH 44056-2275 Highland Computer Forms Trade Debt $252,995 1025 Main St Cincinnati, OH 45202-1205 Osram Sylvania Trade Debt $228,298 Products Inc Design Molded Plastics Trade Debt $225,000 Namanco Productions Inc Trade Debt $204,720 TLM International Inc Trade Debt $197,500 Printing Resources Trade Debt $196,053 Hartville Coin Exchange Trade Debt $170,512 Action Mailing Trade Debt $141,044 National Football Trade Debt $112,500 Museum Inc. McQuate Brokerage Svc Trade Debt $115,594 Seven Ranges Trade Debt $86,679 Manufacturing Corp Yoder Graphic Systems Trade Debt $75,819 Housewares America Inc Trade Debt $75,098 Beckett Air Trade Debt $72,787 Demunno & Associates Trade Debt $71,143 Suarez Corp.'s List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Restless Noggins Manufacturing LLC 334 Orchard Ave NE North Canton, OH Trade debt $5,304,114 Gano Properties LLC 6490 Friarsgate Dr NW Canton, OH Trade debt $3,588,724 Maple Street Commerce LLC c/o Charles P. Royer, Esq. 101 W Prospect Ave, Ste 1800 Cleveland, OH Trade debt $1,838,883 Wesbanco c/o Mark W Bernlohr, Esq 50 S Main St Ste 201 Akron, OH Trade debt $1,725,000 Walgreens Inc Trade debt $376,116 Cisco Systems Capital Corp Trade debt $194,181 Coface North America Ins Co Trade debt $189,554 UPS Trade debt $181,934 Hewlett-Packard Co Trade debt $169,347 Buckingham Doolittle & Burroughs Trade debt $160,695 Blue Technologies Trade debt $150,806 Cisco Trade debt $136,223 Taylor Hayes Inc. Trade debt $131,138 Cremer Spina Shaughnessy Jansen Siegert Trade debt $109,933 Levin Swedler Kennedy Trade debt $84,010 Womble Carlyle Sandridge Trade debt $81,552 PC Richard & Son Long Island Corp Trade debt $62,641 Spend Management Experts Trade debt $58,789 Yellowstone Capital LLC $57,600 Wise Co Inc Trade debt $50,000 SUAREZ CORPORATION: Files for Chapter 11 to Sell Assets ------------------------------------------------------- Direct marketing companies founded by northeast Ohio multi-millionaire Benjamin Suarez, have sought bankruptcy protection to pursue a sale of the assets. In 1968, Benjamin Suarez started a small business from his home which eventually became Suarez Corporation Industries ("SCI"), a large and formerly very successful direct marketing company. Following many failures and limited successes, SCI became profitable in 1973 and experienced major growth during the 1990s and 2000s when SCI's annual sales went from approximately $16 million to over $200 million, reaching a high of over $400 million in 2008. Then, like many American businesses, SCI's business suffered because of the 2008-2009 Great Recession. As it started to recover, in 2011, the federal government initiated an extensive investigation of alleged federal campaign finance law violations, which resulted in indictments in 2013 against SCI, Mr. Suarez, and SCI's chief financial officer, Michael Giorgio. Following a month-long trial in 2014, Mr. Suarez was convicted on one count of attempted witness tampering and in January 2015 he began serving a fifteen-month sentence at a federal facility in West Virginia. Mr. Suarez was released in early 2016. SCI, already "wounded" by the nationwide economic downturn in 2008-2009, simply has not been able to financially recover from the significant expense and major distraction of the federal investigation and indictments, compounded by Mr. Suarez's lengthy absence from the business during his incarceration, unfortunately leaving it and its related entities insolvent and with no option other than bankruptcy to preserve its business and assets. To finance their prepetition operations, debtors Suarez Corporation Industries and SCI Direct entered into a Demand Promissory Note dated July 19, 2013, which note was amended and restated on or about April 15, 2015. The Notes were secured by substantially all of the assets of Suarez Corporation Industries and SCI Direct, LLC as provided in the security agreement executed by Suarez Corporation Industries and SCI Direct on or about April 15, 2016. Finally, the lender, Nancy Suarez, perfected her security interest in the collateral pursuant to the financing statement filed with the Ohio Secretary of State on April 15, 2016. Access to Cash and Financing The Debtors have filed a motion seeking to access cash collateral and obtain DIP financing to pay their regular daily expenses, including employees' wages, utilities, and other costs of doing business. The Debtors stated that to operate their business without interruption, it is essential that they be permitted to continue to borrow operating funds under the DIP Facility pending a closing of the sale of their assets. The DIP Facility will be provided by the prepetition lender, Nancy Suarez, pursuant to the DIP Agreement by and among the Debtors and the DIP Lender. The DIP Facility provides up to approximately $250,000 in credit to the Debtors. Payment of Prepetition Claims The Debtors on the Petition Date also filed motions to: -- pay prepetition employee wages, salaries, and related items; -- pay prepetition trust fund taxes; and -- confirm the administrative expense priority status of the Debtor's undisputed obligations to suppliers for the postpetition delivery of goods and provision of services and to pay prepetition administrative claims Pursuant to 11 U.S.C. Sec. 503(B)(9). SCI avers that the payment of the prepetition claims as requested in the first day motions is critical to the Debtor's survival in the immediate postpetition period and to its ability to reorganize successfully. "The payment of prepetition employee claims, including wages, benefits, and workers' compensation premiums, will preserve employee morale and support, which is essential to the ongoing operation of the Debtor's business. Furthermore, payment of these prepetition employee claims will help ensure that the Debtor's business will benefit from the continued hard work and dedication of its employees. If the Debtor is unable to pay these prepetition employee claims, it faces the very real prospect of losing its dedicated employees at a time when support from its workforce is critical to its survival," Anthony J. DeGirolamo, counsel to the Debtors, explains. "With respect to prepetition trust fund taxes, such taxes are not assets of the Debtor's estate. Rather, as funds held in trust, they belong either to the payors or the intended payees – the relevant taxing authorities. Litigation over these funds would be costly, distracting and pointless. In addition, many taxing authorities impose personal liability on the officers and directors of collecting entities for trust fund taxes collected by those entities that are not paid to such taxing authorities. Thus, to the extent that any prepetition trust fund taxes remain unpaid, the Debtor's officers and directors may be subject to lawsuits or even criminal prosecution on account of such nonpayment during the pendency of this chapter 11 case. Such lawsuits or proceedings obviously would constitute a significant distraction for such officers and directors at a time when they should be focused on the Debtor's efforts to stabilize its postpetition business operations and to develop and implement a successful reorganization strategy." About Suarez Corporation SCI -- http://www.suarez.com/-- is a direct marketing company currently offering hundreds of diversified products around the world. From heaters, food services, jewelry, body and skin care, collectible coins, and health products, SCI continues to lead the way through product innovation and multi-channel marketing. The Company offers services through mail, phone and internet, television, newspaper, and magazines. The company started in business in 1968 when Benjamin Suarez started a small business from his home which eventually became Suarez Corporation Industries. Suarez Corporation Industries is an operating entity involved in direct marketing products to consumers, and Retail Partner Enterprises, LLC, markets the same products on a wholesale basis to retail stores. SCI Direct, LLC, holds certain patents, trademarks, and other intellectual property used by Suarez Corporation Industries, and Retail Partner Enterprises, LLC. The entities are owned by Suarez Enterprises Holding Company. Each of SCI Direct LLC, Suarez Corporation Industries, and two affiliates filed separate voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Case Nos. 17-61735 to 17-61738) on Aug. 7, 2017. The cases are jointly administered before the Honorable Russ Kendig under SCI Direct's Case No. 17-61735. Anthony J. DeGirolamo serves as the Debtors' bankruptcy counsel. The Phillips Organization is the Debtors' accountant. Craig T. Conley, Esq., is special counsel. Kurtzman Carson Consultants LLC is the claims and noticing agent. TERRAVIA HOLDINGS: Ashby, Brown Rudnick Represent Noteholders ------------------------------------------------------------- Ashby & Geddes, P.A., and Brown Rudnick LLP filed with the U.S. Bankruptcy Court for the District of Delaware a verified statement pursuant to Federal Rule of Bankruptcy Procedure 2019 with respect to their representation of the Ad Hoc Consortium of Holders of TerraVia Holdings, Inc. Convertible Senior Subordinated Notes in the Chapter 11 cases of TerraVia Holdings, Inc., and its affiliated debtors. The Consortium initially engaged Brown Rudnick on or about April 1, 2017, with respect to the (x) 6.00% Convertible Senior Subordinated Notes due 2018 issued by Debtor TerraVia Holdings, Inc., under that certain Indenture, dated as of Jan. 24, 2013, and (y) 5.00% Convertible Senior Subordinated Notes due 2019 issued by TerraVia Holdings under that certain indenture, dated as of April 1, 2014. Subsequent to its initial engagement, Brown Rudnick started advising the Consortium with respect to a proposed senior secured debtor in possession financing facility to be made available to the Debtors upon the commencement of these cases. On July 12, 2017, the Consortium engaged Ashby & Geddes as their Delaware co-counsel in anticipation of the commencement of these cases. On Aug. 1, 2017, Ashby & Geddes and Brown Rudnick were engaged by Wilmington Savings Fund Society, FSB, in its capacity as administrative and collateral agent for the proposed DIP Financing. Ashby & Geddes and Brown Rudnick do not represent or claim to represent any other entity with respect to the Debtors' cases, and do not hold any claim against or interest in the Debtors, except to the extent they may hold claims against the Debtors for services rendered in connection with their representations of the Consortium and DIP Agent. No member of the Consortium represents or claims to represent any other entity with respect to the Debtors' cases, other than (as to each member) those investment funds and accounts managed or advised by it, as applicable. The names and addresses of, and "nature and amount of all disclosable economic interests" held by, the members of the Consortium, as of Aug. 1, 2017, are: a. Gilead Capital LP 157 Columbus Avenue, Street 403 New York, NY 10023 2018 Notes: None 2019 Notes: $18,850,000 DIP Financing Commitments: $1,740,567.69 Common Stock: 100 b. Higher Ground SICAV plc – Core Wealth Fund 171 Old Bakery Street Valletta, VLT 1455, Malta 2018 Notes: None 2019 Notes: $2,835,000 DIP Financing Commitments: $261,777.69 Common Stock: None c. Lazard Asset Management LLC 30 Rockefeller Plaza New York, NY 10112-6300 2018 Notes: None 2019 Notes: $17,707,000 DIP Financing Commitments: $1,635,025.58 Common Stock: 2,121,609 (Short Position) d. Passport Capital, LLC One Market Street, Suite 2200 San Francisco, CA 94105 2018 Notes: None 2019 Notes: $32,250,000 DIP Financing Commitments: $2,977,894.33 Common Stock: None e. Wolverine Asset Management, LLC 175 W. Jackson Boulevard, Suite 340 Chicago, IL 60604 2018 Notes: $5,645,000 2019 Notes: $9,241,000 DIP Financing Commitments: $1,374,540.62 Common Stock: 3,012,127 (Short Position) f. Zazove Associates, LLC 1001 Tahoe Boulevard Incline Village, NV 89451 2018 Notes: $7,160,000 2019 Notes: $14,610,000 DIP Financing Commitments: $2,010,194.09 Common Stock: None The Counsel can be reached at: William P. Bowden, Esq. Gregory A. Taylor, Esq. ASHBY & GEDDES, P.A. 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, Delaware 19899-1150 Tel: (302) 654-1888 Fax: (302) 654-2067 E-mail: wbowden@ashbygeddes.com gtaylor@ashbygeddes.com -- and -- Robert J. Stark, Esq. BROWN RUDNICK LLP Seven Times Square New York, New York 10036 Tel: (212) 209-4800 Fax: (212) 209-4801 E-mail: rstark@brownrudnick.com -- and -- Steven B. Levine, Esq. Brian T. Rice, Esq. Kellie W. Fisher, Esq. BROWN RUDNICK LLP One Financial Center Boston, Massachusetts 02111 Tel: (617) 856-8200 Fax: (617) 856-8201 E-mail: slevine@brownrudnick.com brice@brownrudnick.com kwfisher@brownrudnick.com About TerraVia Headquartered in South San Francisco, California, TerraVia Holdings, Inc. (NASDAQ:TVIA) -- http://www.terravia.com-- is a plant-based food, nutrition and specialty ingredients company that harnesses the power of algae, the mother of all plants and earth's original superfood. With a portfolio of breakthrough ingredients and manufacturing, TerraVia is well positioned to help meet the growing need of consumer packaged goods and established and emerging food manufacturers to improve the nutritional profile of foods without sacrificing taste, and to develop select consumer brands. TerraVia also manufactures a range of specialty personal care ingredients for key strategic partners. Headquartered in South San Francisco, TerraVia's mission is to create products that are truly better for people and better for the planet. On Aug. 2, 2017, TerraVia Holdings, Inc., and its wholly owned U.S. subsidiaries filed voluntary petitions under chapter 11 of title 11 of the United States Code (Bankr. D. Del. Lead Case No. 17-11655). The Debtors filed a motion with the Court seeking to administer all of the Chapter 11 cases jointly under Lead Case No. 17-11655). The subsidiary debtors in the Chapter 11 cases are Solazyme Brazil LLC and Solazyme Manufacturing 1, LLC. The Debtors sought bankruptcy protection after reaching a deal to sell the assets to Corbion N.V. for $20 million in cash plus the assumption of liabilities. Davis Polk & Wardwell LLP is acting as restructuring and corporate counsel to TerraVia. Rothschild Inc. is acting as TerraVia's financial advisor and investment banker to lead the sales process Kurtzman Carson Consultants LLC is the claims agent, maintaining the case Web site http://www.kccllc.net/TerraVia TIFARO GROUP: EC Mansfield Wants to Use Capital One Cash Collateral ------------------------------------------------------------------- EC Mansfield LLC asks for permission from the U.S. Bankruptcy Court for the Southern District of Texas to use cash collateral of Capital One Bank in order to allow the Debtor to pay fees (i) related to collection of accounts receivable and (ii) needed to restore utility services in order to preserve equipment that is stored in its former location. The aggregate balance owed with respect to the Secured Lender is approximately $700,000. If the Debtor is denied of authorization to use cash collateral, the Debtor would suffer immediate and irreparable harm because collections would cease and the Debtor's equipment could deteriorate in value. The only viable source of funding for post-petition operations is cash collateral made available to the Debtor. EC Mansfield has reached an agreement with the Secured Lender on the interim use of cash collateral. Prior to the Petition Date, EC Mansfield entered into the Capital One Loans whereby a first lien and security interest in substantially all of the Debtor's assets, including accounts receivable and cash were granted to the Secured Lender. The Secured Lender has agreed to the Debtor's use of cash collateral and the Debtor expects that an agreed order will include, among others, the following: A. the Debtor may use cash collateral pursuant to an approved budget, with a 10% variance per line item and the ability to apply any un-used budgeted funds at its discretion; and B. Secured Lender's prepetition liens will be adequately protected by replacement liens to the same extent and priority as their respective prepetition liens. According to the Debtor's 14-day cash collateral budget, expenses will total $10,920, which will include: Credit Card Processing Fees $60 CMS Billing Service Fees $60 Copier Shipping fees $800 TXU - Electricity $10,000 A copy of the Debtor's Motion is available at: http://bankrupt.com/misc/txsb17-80171-46.pdf About The Tifaro Group Ltd. The Tifaro Group, Ltd., is a Texas limited partnership organized as an investment vehicle for the purpose of owning interest in various healthcare-related entities. The Tifaro Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 17-80171) on June 2, 2017. The petition was signed by J. Patrick Magill, president of Magill, P.C., which is the financial agent of The Tifaro Group Management Company LLC. TGMC is the Debtor's general partner. At the time of the filing, the Debtor estimated its assets and debt at $10 million to $50 million. Judge David R. Jones presides over the case. Melissa A. Haselden, Esq., and Edward L. Rothberg, Esq., at Hoover Slovacek LLP, serve as the Debtor's legal counsel. About EC Mansfield LLC Headquartered in Houston, Texas, EC Mansfield LLC -- d/b/a Elitecare Emergency Room, Elitecare 24 Hour Emergency Room Manfield, Elitecare 24 Hour Emergency Room, Elitecare 24 Hour Emergency Center, Elitecare Emergency Center, Elitecare Emergency Room -- owns an emergency care ambulatory facility located in Mansfield, Texas. The Debtor is an affiliate of The Tifaro Group, Ltd., that sought bankruptcy protection on June 2, 2017 (Bankr. S.D. Tex. Case No. 17-80171). The Debtor filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 17-34452) on July 25, 2017, estimating its assets and liabilities at between $1 million and $10 million each. The petition was signed by Patrick J. Magill, president of Magill, PC, financial agent of the Debtor. Judge Marvin Isgur presides over the case. Melissa Anne Haselden, Esq., at Hoover Slovacek LLP, serves as the Debtor's bankruptcy counsel. UCP INC: S&P Raises Then Withdraws 'B' CCR Amid Century Deal ------------------------------------------------------------ S&P Global Ratings raised its corporate credit rating on UCP Inc. to 'B' from 'B-' after the company was acquired by Century Communities and removed the ratings from CreditWatch, where S&P placed them with positive implications on April 11, 2017. The outlook is positive. S&P subsequently withdrew the corporate credit rating following the closing of the transaction. VANGUARD NATURAL: Emerged From Bankruptcy Protection on Aug. 1 -------------------------------------------------------------- Vanguard Natural Resources, LLC, successfully completed its financial restructuring and emerged from Chapter 11 as a new corporation under the name of Vanguard Natural Resources, Inc., on August 1, 2017. In a press release, the Company related that through its financial restructuring and the sale of non-core assets while in Chapter 11, the Company eliminated approximately $820 million of secured and unsecured debt from its balance sheet and significantly enhanced its financial flexibility. At its emergence, the Company is entering into an amended and restated $850 million reserve-based revolving credit facility and a term loan facility of $125 million. The initial borrowing base under the revolving credit facility shall be $850 million, with the first scheduled redetermination of the revolving credit facility borrowing base in August 2018. Also, with total debt outstanding of $936 million and cash on hand of approximately $17 million, total liquidity will be approximately $137 million. Mr. Scott W. Smith, President and CEO, commented, "We are very pleased to have completed this reorganization and look forward to working with our new equity holders and Board members in charting a new course for the Company. I want to thank all of the parties with whom we worked to craft a restructuring plan that, upon exit, has the Company on a sound financial footing. I want to also add a special thanks to all of our employees whose dedication and hard work managing and administering our assets has been exceptional during this process and whose efforts going forward will be critical to the Company's future success." The new Board of Directors collectively echoed Mr. Smith's comments stating, "Vanguard's high quality asset portfolio offers many avenues for future value creation. We look forward to working closely with management to conduct a thorough strategic review of the Company’s asset base and development plan in order to maximize long-term shareholder value." The following are highlights of the Company's asset position as of June 30, 2017: * Total estimated proved reserves of 1,390 Bcfe, of which approximately 66% were natural gas reserves, 18% were oil reserves and 16% were NGLs reserves. 100% of the Company's estimated reserves would be classified as proved developed properties under the rules and regulations of the Securities and Exchange Commission; * Total estimated reserve PV-10 value of $1,498 million (81% proved developed and 19% undeveloped, including technical PUDs) using June 30, 2017 strip commodity pricing; * Average net production for the six months ended June 30, 2017 and the year ended December 31, 2016 of 381 MMcfe/d and 433 MMcfe/d, respectively, from working interests in 11,930 gross (4,337 net) productive wells with operated wells accounting for approximately 61% of total estimated proved reserves; * Significant inventory of high quality growth opportunities across the Company's approximately 677,869 gross acres (168,410 net acres) in multiple plays, including in the Pinedale, Piceance, Arkoma, Gulf Coast, and Permian Basins; and an expectation to focus the remainder of the Company's 2017 capital spending in the Pinedale and East Haynesville fields. The Company also announced its new Board of Directors, comprised of the following individuals, including members of management and direct or appointed representatives of the Company's largest shareholders, whose appointments are effective as of Aug. 1, 2017: * Scott W. Smith, President and Chief Executive Officer of the Company * Richard A. Robert, Executive Vice President and Chief Financial Officer of the Company * Michael Alexander, Managing Director at Marathon Asset Management * Joseph Citarrella, Principal at Monarch Alternative Capital, LP * Graham Morris, Distressed Equity Strategy Head for Contrarian Capital Management * R. Scott Sloan, former Senior Vice President, Strategy, Commercial, and Global New Business Development at Hess Corporation Joseph Citarrella will serve as the chair of the new Board of Directors. In connection with the Company's new reserve-based revolving credit facility, the Company has implemented a hedging program for approximately 80%, 72%, 57% and 51% of its anticipated crude oil production in 2017, 2018, 2019 and 2020, respectively, with 100% in the form of fixed-price swaps in 2017 and approximately 74%, 66%, 51% and 49% of its anticipated natural gas production in 2017, 2018, 2019 and 2020, respectively, with 100% in form of fixed-price swaps in 2017. NGL production was under fixed-price swaps for approximately 43% and 37% of anticipated production in 2017 and 2018, respectively. The Company believes its hedging program will provide substantial near-term cash flow visibility regardless of the volatility in commodity prices as management and the Board of Directors explore options for maximizing shareholder value. Following the completion of the financial restructuring, the Company will have 20.1 million shares of its common stock outstanding. The Company expects that its shares of common stock and warrants will be traded and quoted on the OTCQX market (which is operated by OTC Markets Group, Inc.). The OTCQX market is an interdealer quotation system providing real time quotation services, each of which the Company believes constitutes an "established securities market" within the meaning of the Foreign Investment in Real Property Tax Act of 1980. The Company expects the new listing to go effective during the third quarter of 2017. Additionally, the Company is moving forward as a corporation for U.S. federal income tax purposes. Evercore Partners Inc. served as financial advisor to the Company, Paul Hastings LLP served as the Company's legal counsel and Opportune LLP served as the restructuring advisors to the Company. PJT Partners, Inc. served as financial advisor, and Milbank, Tweed, Hadley & McCloy LLP served as legal counsel, to an ad hoc group of the holders of the senior unsecured notes of Vanguard Natural Resources, LLC. RPA Advisors, LLC served as financial advisor, and Weil, Gotshal & Manges LLP served as legal counsel, to the administrative agent under the Company's pre- and post-petition credit facilities. Centerview Partners LLC served as financial advisor, and Morrison & Foerster LLP served as legal counsel, to an ad hoc group of the holders of the second lien notes of Vanguard Natural Resources, LLC. About Vanguard Natural Resources Vanguard Natural Resources, LLC (OTC: VNRSQ) -- http://www.vnrllc.com/-- is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. Vanguard's assets consist primarily of producing and non-producing oil and natural gas reserves located in the Green River Basin in Wyoming, the Permian Basin in West Texas and New Mexico, the Gulf Coast Basin in Texas, Louisiana, Mississippi and Alabama, the Anadarko Basin in Oklahoma and North Texas, the Piceance Basin in Colorado, the Big Horn Basin in Wyoming and Montana, the Arkoma Basin in Arkansas and Oklahoma, the Williston Basin in North Dakota and Montana, the Wind River Basin in Wyoming, and the Powder River Basin in Wyoming. Vanguard Natural Resources, LLC, and certain subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 17-30560) on Feb. 2, 2017. The Chapter 11 cases are assigned to the Hon. Judge Marvin Isgur. The Debtors listed total assets of $1.54 billion and total debt of $2.3 billion as of Feb. 1, 2017. Paul Hastings LLP is serving as legal counsel and Evercore Partners is acting as financial advisor to Vanguard. Opportune LLP is the Company's restructuring advisor. Prime Clerk LLC is serving as claims and noticing agent. Judy R. Robbins, the U.S. Trustee for Region 7, on Feb. 14, 2017, appointed three creditors to serve on the official committee of unsecured creditors appointed in the Debtor's case. The Committee hired Akin Gump Strauss Hauer & Feld LLP as counsel and FTI Consulting, Inc., as financial advisor. The Company on March 16, 2017, filed a motion with the Bankruptcy Court disclosing a Stipulation and Agreed Order entered into on March 15, 2017, by and between the Debtors and certain Unaffiliated holders of its Preferred Units and common units pursuant to which the Debtors and the Ad Hoc Equity Committee agreed, among other things, that professionals for the Ad Hoc Equity Committee would be funded by the Debtors' estates for services performed within a defined scope and subject to agreed caps on fees and expenses as described in the Stipulation and Agreed Order. Counsel to the Ad Hoc Equity Committee are Sharon M. Beausoleil, Esq., Alexander Chae, Esq., and Holland N. O'Neil, Esq., at Gardere Wynne Sewell LLP. Attorneys for Citibank, N.A, as administrative agent under the Third Amended and Restated Credit Agreement, dated as of Sept. 30, 2011, are Chris Lopez, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil Gotshal & Manges LLP. VITARGO GLOBAL: Wants to Use Cash Collateral Through Oct. 31 ------------------------------------------------------------ Richard J. Laski, the Chapter 11 Trustee for Vitargo Global Sciences, Inc., seeks authorization from the U.S. Bankruptcy Court for the Central District of California to continue using cash collateral of Fisher Capital Investments, LLC, On Deck Capital, Lila Ekonomistyrning, AB, and Swecarb AB, through Oct. 31, 2017. The Chapter 11 Trustee requires use of the cash collateral to pay the costs and expenses associated with operating the Debtor's business. The primary expenses going forward relate to paying wages as well as funding a settlement and purchase agreement with the Debtor's sole supplier of raw goods that will allow the Debtor to continue to manufacture and Ship the Debtor's nutritional supplement product. Additional funds will be required to pay for general overhead, maintain current insurance, and pay the quarterly fees due to the Office of the U.S. Trustee. The Chapter 11 Trustee will use the cash collateral through and including Oct. 31, 2017, in an amount not to exceed 115% of the aggregate amounts contained in the budget, with all budget savings carried over and used by the Chapter 11 Trustee in subsequent months. Secured Creditors will receive replacements liens in the post-petition cash and accounts receivables and the proceeds thereof, to the same extent, validity, and priority as any lien held by the secured creditor as of the Petition Date, to the extent cash collateral is actually used by the Chapter 11 Trustee. Additionally, the Chapter 11 Trustee will pay Fisher Capital Investments, LLC, monthly interest payments of $6,600 through Oct. 31 as additional adequate protection and will make the settlement payments to Lila Ekonomistyrning, AB in August and September. A copy of the Chapter 11 Trustee's request is available at: http://bankrupt.com/misc/cacb17-10988-209.pdf As reported by the Troubled Company Reporter on May 9, 2017, the Court previously authorized Vitargo Global Sciences to use cash collateral on a continued interim basis, to and through July 31, 2017, pursuant to a budget. About Vitargo Global Sciences Vitargo Global Sciences, Inc., was initially formed as Vitargo Global Sciences, LLC, in June 2013, a follow-along entity of GENr8, Inc., a predecessor business to the Debtor. Conversion from LLC to Inc. took place on September 2015. The Company's line of business includes manufacturing dry, condensed, and evaporated dairy products. Vitargo Global Sciences previously filed a Chapter 12 bankruptcy petition in in Texas Northern Bankruptcy Court on May 5, 1992 (N.D. Tex. Case No. 92-42174). Vitargo Global Sciences, based in Irvine, California, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 17-10988) on March 15, 2017. The petition was signed by Anthony Almada, chief executive officer. The Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Theodor Albert presides over the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, is serving as the Debtor's bankruptcy counsel. Damian Moos, Esq., at Kang Spanos & Moos LLP, is the litigation counsel. Jeffrey Bolender, Esq., at Bolender Law Firm PC, serves as the Debtor's state court insurance coverage counsel. On April 4, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Marshack Hays LLP, as general counsel. WALTER INVESTMENT: Moody's Cuts CFR to Caa3 on Restructuring Deal ----------------------------------------------------------------- Moody's Investors Service has taken the following rating actions with respect to Walter Investment Management Corp. (Walter): -- Corporate Family Rating downgraded to Caa3 from Caa2; negative outlook -- Senior Unsecured Rating downgraded to Ca from Caa3; negative outlook -- Senior Secured Bank Credit Facility Rating downgraded to Caa2 from Caa1; negative outlook -- Issuer outlook, Negative RATINGS RATIONALE The rating action follows the company's announcement that it has entered into a restructuring support agreement with more than 50% of senior term loan lenders. The company's actions increase creditors' probability of loss and potential loss severity. Uncertainty regarding the outcome of the restructuring proposal and the increased risk of a bankruptcy filing should it not succeed further impairs the company's franchise and prospects for achieving sustained profitability. To complete the proposed out-of-court restructuring, the company must obtain agreement of at least 95% of term lenders, 95% of senior unsecured noteholders, and 95% of convertible notes holders (Minimum Participation Threshold). As of March 31, 2017, $1,395 million was owed on the senior secured term loan which matures December 2020, $539 million on the unsecured notes which mature December 2021 and $242 million on the convertible notes which mature November 2019. The out-of-bankruptcy-court restructuring proposes the following: 1) The senior secured term loan will be paid down by $300 million and its maturity extended to June 2022 2) The unsecured notes will be exchanged for $200 million of second lien notes with the unsecured noteholders also receiving a to-be-determined amount of common equity 3) The convertible notes will be tendered for an amount no greater than $40 million. The contemplated timeline is: a) execute a restructuring agreement with 66 2/3 % of the unsecured noteholders by August 31, 2017, b) commence the solicitation of the unsecured notes and convertible notes by October 1, 2017, c) if the Minimum Participation Threshold has been satisfied, consummate the out-of-court restructuring by November 1, 2017. In the event that the company's attempt for an out-of-bankruptcy-court restructuring is unsuccessful, the company and the senior term loan lenders that entered into the restructuring support agreement may pursue an in-court restructuring. The Caa2 senior secured rating reflects a loss expectation of 10% to 20% and the Ca unsecured note rating of 35% to 65%. The negative outlook is due to the uncertain outcome of the restructuring proposal and the increased risk of a bankruptcy filing. Given the negative outlook, it is unlikely that the company's ratings will be upgraded. The outlook could return to stable if the company is able to complete the restructuring on terms generally consistent with the current proposal. An upgrade is unlikely until the company is able to demonstrate its ability to operate profitably. The ratings could be downgraded if the terms of the restructuring are revised in a way that worsens senior secured and unsecured lenders' expected loss. The principal methodology used in these ratings was Finance Companies published in December 2016. WESTMORELAND RESOURCE: Appoints Principal Accounting Officer ------------------------------------------------------------ Westmoreland Resource Partners, LP, appointed Scott Henry as controller and principal accounting officer on July 28, 2017. Mr. Henry, 43, is currently the senior director of accounting at Westmoreland Coal Company and has been in that role since November of 2016. He will continue to serve Westmoreland Coal Company in that role while taking over the Company's principal accounting officer responsibilities from the Englewood, Colorado, office. Prior to joining Westmoreland Coal Company, Mr. Henry served as Vice President of Finance for Right Start, formerly a wholly-owned subsidiary of Liberty Interactive Corp., for seven years. Mr. Henry has also held senior leadership positions within DIRECTV and KB Home after beginning his career as a financial auditor with PricewaterhouseCoopers. Mr. Henry is a Certified Public Accountant and holds a Master of Accounting and a Bachelor of Science in Accountancy from the University of Denver. There are no agreements, arrangements, relationships or transactions between the Partnership and Mr. Henry required to be disclosed under Items 401 or 404(a) of Regulation S-K. About Westmoreland Resource Oxford Resource Partners, LP, now known as Westmoreland Resource Partners, LP -- http://www.westmorelandMLP.com/-- is a producer of high value steam coal, and is the largest producer of surface mined coal in Ohio. Westmoreland Resource reported a net loss of $31.58 million on $349.3 million of total revenues for the year ended Dec. 31, 2016, compared to a net loss of $33.68 million on $384.7 million of total revenues for the year ended Dec. 31, 2015. As of June 30, 2017, Westmoreland Resource had $370.9 million in total assets, $411.8 million in total liabilities, and a total deficit of $40.85 million. WESTMORELAND RESOURCE: Chairman & 2 Directors Quit from Board ------------------------------------------------------------- Kevin Paprzycki provided notice of his resignation from his directorship and position as Chairman of the Board of Directors of Westmoreland Resources GP, LLC, general partner of Westmoreland Resource Partners, LP, effective Aug. 2, 2017. Mr. Paprzycki will remain as chief executive officer of the Company. On Aug. 2, 2017, Jennifer Grafton provided notice of her resignation from her directorship on the Board of Directors of the Company, general partner of the Partnership, effective immediately. At the same time, Ms. Grafton, who is also a named executive officer of the Company, notified the Company of her resignation from her position as chief legal officer effective immediately. According to the Company, the resignations of Mr. Paprzycki and Ms. Grafton were not due to any dispute or disagreement with the Company on any matter relating to the Partnership's operations, policies or practices. The resignations have been effected as part of an internal reporting realignment between the Company and Westmoreland Coal Company as the Company and the Partnership explore alternatives with respect to the 2018 maturity of the term loan under the Financing Agreement, dated as of Dec. 31, 2014, by and among Oxford Mining Company, LLC, Westmoreland Resource Partners, LP and each of its subsidiaries, the lenders party thereto and U.S. Bank National Association, as Collateral Agent. Separately, on July 28, 2017, Michael Meyer resigned from his position as controller and principal accounting officer of the Company effective on that date. Mr. Meyer's resignation was the result of Westmoreland's consolidated accounting centralization effort that required the position to maintain an office in Englewood, Colorado. About Westmoreland Resource Oxford Resource Partners, LP, now known as Westmoreland Resource Partners, LP -- http://www.westmorelandMLP.com/-- is a producer of high value steam coal, and is the largest producer of surface mined coal in Ohio. Westmoreland Resource reported a net loss of $31.58 million on $349.34 million of total revenues for the year ended Dec. 31, 2016, compared to a net loss of $33.68 million on $384.70 million of total revenues for the year ended Dec. 31, 2015. As of June 30, 2017, Westmoreland Resource had $370.93 million in total assets, $411.79 million in total liabilities and a total deficit of $40.85 million. [*] Moody's: Q2 US Speculative-Grade Default Rate on Downward Trend ------------------------------------------------------------------- The trailing 12-month default rate for US speculative-grade companies continued its downward trend in the second quarter of this year, coming in at 3.8% against 4.7% the prior quarter, Moody's Investors Service says in its Q2 2017 corporate default monitor. Although the number of US non-financial defaults rose to 18 in the second quarter from 11 in the first, this was still fewer than the 28 recorded for the second quarter of 2016. "Moody's see a combination of cash flow that is bolstered by economic growth, good intrinsic company liquidity and fewer commodity sector strains fueling a further drop in the US speculative-grade corporate default rate to 2.8% a year from now," noted Moody's Senior Vice President John Puchalla. Nevertheless, even as strains in the commodities sector continue to ease, that sector still accounts for the highest number of defaults, Puchalla says. The retail sector, meanwhile, is receiving a lot of attention in the press and defaults in the sector are indeed rising as companies wrestle with consumers' changing shopping habits. Even so, a higher percentage of speculative-grade companies in the energy sector, transportation services and media industries had probability of default ratings of Caa2 or lower at the end of the second quarter. "The decline in brick & mortar store traffic, in conjunction with the shift in consumer spending to digital channels, is contributing to retail earnings weakness and increased credit strains this year," said Puchalla. "Even so, retail defaults are not making up for the decline in commodity defaults, as the retail & apparel default rate -- at 4.4% in the second quarter -- remains well below the default rate for commodity sectors." In a further favorable sign for a continued reduction in the default rate over the next year, Moody's Liquidity Stress Index (LSI) dropped to 3.5% at the end of June from 5.3% at the end of March. Earnings growth and still-favorable conditions for refinancing and raising investment funds continue to bolster speculative-grade liquidity and reduce the risk of default as the LSI closes in on its record low of 2.8%. But while an 18% decline in the number of US companies rated Caa2-PD or lower supports fewer defaults in the year ahead, a large number of low-rated firms are managing to live with weak balance sheets, Moody's warns. If the economy were to deteriorate, geopolitical issues were to disrupt trade flows or capital market access became more difficult, defaults would go up. The rating distribution based on the dollar amount of debt outstanding, which is less concentrated among low-rated firms, offers some solace. This would dampen aggregate credit losses even if, as expected, average family recovery rates are below average during the next wave of defaults. ********* 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. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* 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 2017. 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 ***