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/raid1/www/Hosts/bankrupt/TCR_Public/171102.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 2, 2017, Vol. 21, No. 305 Headlines 8281 MERRILL ROAD: Needs More Time to Assess Restructuring Options A & B ASSOCIATES: January 10 Disclosure Statement Hearing ACOSTA INC: Bank Debt Trades at 12.80% Off AMBOY GROUP: Nov. 14 Meeting Set to Form Creditors' Panel ANTHONY LAWRENCE: Seeks Feb. 15 Exclusive Plan Filing Extension APEX PROPERTIES: November 6 Disclosure Statement Hearing ARCH COAL: Court Affirms Order Disallowing W. English Claim ARMSTRONG ENERGY: Files for Chapter 11 With Knight Hawk Deal AVAYA INC: Moody's Assigns Prov. B2 Corporate Family Rating B E R PRECISION: Creditors to Get Full Payment Over 60 Months BEARCAT ENERGY: Argo Partners Appointed as New Committee Member BELK INC: Bank Debt Trades at 16.78% Off BISHOP GORMAN: Given Until Jan. 8 to File Reorganization Plan BREITBURN ENERGY: US Trustee Discloses Current Committee Members BROTHERS MATERIALS: District Court Affirms Ch. 11 Plan Confirmation CAMBER ENERGY: Reports Results of Well Recompletions & Future Plans CANNABIS SCIENCE: Files Lawsuit Over Hemp Harvest Raid CAPSTONE PEDIATRICS: December 19 Plan Confirmation Hearing CAROLINA MOLD: Bankr. Administrator Seeks Chapter 11 Trustee CATALYST LIFESTYLES: Case Summary & 16 Unsecured Creditors CENTURYLINK INC: Moody's Lowers CFR to Ba3; Outlook Negative CHARLES K. BRELAND: Bid to Limit Authority of Ch. 11 Trustee Nixed CHELSEA CRAFT: DOJ Watchdog Directed to Appoint Chapter 11 Trustee CONTINENTAL CASUALTY: Moody's Affirms (P)Ba1 Pref. Shelf Rating CUZCO DEVELOPMENT: Court Allows Yedang USA's Unsecured Claim DAVE 60 NYC: Seeks February 19 Plan Filing Exclusivity Extension DPL INC: Moody's Affirms Ba3 Senior Unsecured Debt Rating ELLINGTON TRUCKING: November 15 Plan Confirmation Hearing EMMANUEL'S AUTO SALES: Seeks to Hire Ordinary Course Professionals FAUSER OIL: Has Until November 22 to File Reorganization Plan FREEDOM MORTGAGE: Moody's Assigns B2 Senior Unsec. Bonds Rating FRONTIER COMMUNICATIONS: Bank Debt Trades at 4.99% Off GABRIELLE LAVERNE BROWN: PCO Files 4th Report GENERAL NUTRITION: Bank Debt Trades at 5.44% Off GETTY IMAGES: Bank Debt Trades at 12.67% Off GOLDEN MARINA: Court Confirms Third Amended Plan of Reorganization GULFMARK OFFSHORE: Incurs $24.6 Million Net Loss in Third Quarter INFINITE HOLDINGS: Taps Selwyn D. Whitehead as Legal Counsel INTREPID POTASH: Reports Third Quarter Net Loss of $1.9 Million IREP MONTGOMERY-MRF: Needs More Time to Close Asset Sale, File Plan JACKSONVILLE BEAUTY: U.S. Trustee Unable to Appoint Committee JC PENNEY: Bank Debt Trades at 4.70% Off KENTISH TRANS: Plan Payments to be Funded by Continued Operations KHAWAJA PARTNERS: Taps Nima Taherian as Legal Counsel LSB INDUSTRIES: Amends Board Representation and Standtill Pact LSB INDUSTRIES: Incurs $24.7 Million Net Loss in Third Quarter LSB INDUSTRIES: Two Directors Resign From Board M&G CHEMICALS: Files for Chapter 11 with Plans to Sell U.S. Assets MAC ACQUISITION: U.S. Trustee Forms 7-Member Committee MAYFAIR-CORCORAN LLC: Webb Ventures Buying DC Property for $2.1M MONTCO OFFSHORE: Seeks to Hire Drinker Biddle as Lead Counsel MSR RESORT: District Court Rejects Conlon's Fees Opinion Appeal NC DEVELOPMENT: November 11 Disclosure Statement Hearing NEIMAN MARCUS: Bank Debt Trades at 20.35% Off OAKRIDGE HOLDINGS: DIP Maturity Date, Milestones Extended 120 Days OMAR A. DUWAIK: Loses 2nd Bid for Restraining Order, Injunction OMNI LION'S RUN: Plan Filing Exclusivity Extended Until Dec. 4 ORANGE ACRES: Needs Additional Time to Continue Plan Discussions ORBITE TECHNOLOGIES: Stay Period Extended Until January 2018 P3 FOODS: Deadline to File Disclosure Statement Moved to Jan. 16 PAROLE BESTGATE: November 7 Plan Objection Deadline PERFORMANCE SPORTS: Debtor Wins OK of Plan Disclosures PETCO ANIMAL: Bank Debt Trades at 17.60% Off PRIME METALS: Unsecureds to Get $175,000 Under Plan PROFLO INDUSTRIES: Taps Patricia A. Kovacs as Legal Counsel PUERTO RICO ELECTRIC: Committee to Probe $300-Mil. Whitefish Deal PUERTO RICO ELECTRIC: Oversight Board Proposes New PREPA Chief PUERTO RICO: COFINA Senior Bondholders' Coalition Update Holdings PUERTO RICO: FGIC Bid for 90-Day Stay of Suits Facing Objections PUERTO RICO: Revises Plan to End Debt Crisis After Hurricanes QUOTIENT LIMITED: Galen Entities Own 16% of Shares as of Oct. 26 QUOTIENT LIMITED: Reports $21.7-Mil. Second Quarter Net Loss QUOTIENT LIMITED: Shareholders Re-Elect Eight Directors REDIGI INC: Court Says 'No' to Plan Solicitation Period Extension RENNOVA HEALTH: Signs Exchange Agreement with Debenture Holders REPLOGLE HARDWOOD: U.S. Trustee Unable to Appoint Committee RICHARDSON INVESTMENTS: Case Summary & 5 Unsecured Creditors RIVERBED TECHNOLOGY: Bank Debt Trades at 2.71% Off ROSETTA GENOMICS: Receives Noncompliance Notice from NASDAQ ROYAL T ENERGY: Case Summary & 20 Largest Unsecured Creditors S & H ENTERPRISE: Case Summary & 8 Unsecured Creditors SAGE AUTOMOTIVE: Moody's Affirms B2 CFR Following Dividend SAMUEL EVANS WYLY: Sale of Dallas Property for $9.4M Approved SEARS HOLDINGS: Draws Down Remaining $60M Under JPP Facility STAGEARTZ LIMITED: November 2 Plan Confirmation Hearing TEXAS FLUORESCENCE: Exclusive Plan Filing Deadline Moved to Nov. 29 TROVERCO INC: Exclusive Plan Filing Period Extended Thru Feb. 27 ULTRA PETROLEUM: Appeal from Make-whole Order Sent to 5th Circuit UTZ QUALITY: Moody's Assigns B2 CFR; Outlook Stable VASARI LLC: Expects to File Plan, Keep 45 Dairy Queen Stores WALTER INVESTMENT: Moody's Affirms Caa3 CFR; Outlook Negative WARWICK YARD: DLA Seeks Appointment of Chapter 11 Trustee WESTINGHOUSE ELECTRIC: Toshiba Must Modify Confidentiality Order XFS INVESTMENTS: Case Summary & Unsecured Creditor Y&K SUN: Jeffrey Weinman Appointed as Chapter 11 Trustee [*] Fischer Enterprises Expands Investment Opportunities [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 8281 MERRILL ROAD: Needs More Time to Assess Restructuring Options ------------------------------------------------------------------ 8281 Merrill Road A, LLC, and 8281 Merrill Road C, LLC filed a second motion asking the U.S. Bankruptcy Court for the Southern District of Florida to extend the Debtors' Exclusivity Periods to file a plan of reorganization and seek acceptances for an additional period of not less than 30 days, or until November 29, 2017 and January 28, 2018 respectively. The Court previously extended the time prescribed for the Debtors' exclusive right to file a plan of reorganization and seek acceptances thereof for a period of 30 days or until October 30, 2017 and December 29, 2017 respectively. The Debtors own contiguous parcels of real property located at 8281 Merrill Road, Jacksonville, FL 32277. The Merrill Property was most recently used as a car dealership and could be reasonably outfitted to accommodate a tenant operating same. In August 2015, the Debtors leased the Merrill Property to 2014 Management Company LLC. In October 2015, the Property Tenant ceased making rent payments to the Debtors. As a result, the Debtors no longer possessed the income required to pay Debtors' debts as they came due. The Debtors' primary financing source is Roger 14, LLC, which alleges that it holds a note in the current outstanding amount exceeding $800,000, asserts that the Note is secured by a first position mortgage on the Merrill Property. Now, the Debtors continue to advance restructuring of its debt or facilitating a controlled and adequately marketed sale or lease of the Merrill Property while negotiating with its creditors. Moreover, the Debtors noted that the deadline for creditors other than governmental units to file a proof of claim was October 10. About 8281 Merrill Road A, LLC 8281 Merrill Road A, LLC, is a manager-managed limited liability company with manager, Jacksonville Merrill Dealership, LLC, which is itself managed by Daniel Rusche. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 17-17027) on June 2, 2017. The Hon. Raymond B. Ray presides over the case. Messana, PA, represents the Debtor as 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 Tim O'Brien, who, according to court documents, is the manager of manager. A & B ASSOCIATES: January 10 Disclosure Statement Hearing --------------------------------------------------------- The Hon. Edward J. Coleman III of the U.S. Bankruptcy Court for the Southern District of Georgia will hold hearing on January 10, 2018 at 10:00 a.m. to consider approval of the disclosure statement filed by A & B Associates, L.P. in connection with its Plan of Reorganization filed on September 29. Any written objections to the disclosure statement, including objections to the Debtor's valuation of assets of the estate must be filed by November 6, 2017. About A & B Associates, L.P. A & B Associates, L.P., filed a Chapter 11 petition (Bankr. S.D. Ga. Case No. 17-40185) on Feb. 3, 2017. Christopher L. Kettles, managing general partner, signed the petition. The case is assigned to Judge Edward J. Coleman III. The Debtor is represented by C. James McCallar, Jr., Esq., at the McCallar Law Firm. At the time of filing, the Debtor had $5.48 million in assets and $3.93 million in liabilities. ACOSTA INC: Bank Debt Trades at 12.80% Off ------------------------------------------ Participations in a syndicated loan under Acosta Inc. is a borrower traded in the secondary market at 87.20 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.18 percentage points from the previous week. Acosta Inc. pays 325 basis points above LIBOR to borrow under the $2.06 billion facility. The bank loan matures on Sept. 26, 2021 and carries Moody's B3 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. AMBOY GROUP: Nov. 14 Meeting Set to Form Creditors' Panel --------------------------------------------------------- Andy Vara, Acting United States Trustee for Region 3, will hold an organizational meeting on Nov. 14, 2017, at 10:00 a.m. in the bankruptcy case of Amboy Group, LLC dba Tommy Moloney's dba Agnelli's Gourmet dba Amboy Cold Storage. The meeting will be held at: United States Bankruptcy Court 402 East State Street, Room 129 Trenton, New Jersey 08608 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 Amboy Group Amboy Group is a provider of food products and temperature controlled warehouses. Its food processing and cold storage facility serve as a manufacturer/distributor of authentic Irish and Italian meat products in America. Amboy Group's facility is USDA, FDA and SQF 2000 certified. CLU Amboy, LLC is the fee simple owner of a real property located at 1 Amboy Avenue Woodbridge, NJ 07095 with an appraised value of $13 million. CLU Amboy reported gross revenue of $624,444 in 2016 and gross revenue of $644,066 in 2015. Amboy Group holds a 51% interest in an American entity known as Parmacotta-Amboy NA, LLC, that distributes Italian meats. The remaining 49% is owned by an American entity known as Parmacotto America . Parmacotto America is owned by Paramcotto sPa. Parmacotto sPa has been subject to insolvency proceedings in Italy for approximately two and half years, during which time, no revenue has flowed from Parmacotto sPa to Amboy Group. Amboy Group's gross revenue amounted to $10.01 million in 2016 and $6.26 million in 2015. Amboy Group LLC dba Tommy Moloney's dba Agnelli's Gourmet dba Amboy Cold Storage and its affiliate CLU Amboy, LLC dba Amboy Cold Storage filed separate Chapter 11 petitions (Bankr. D. N.J. Case Nos. 17-31653 and 17-31647, respectively), on October 25, 2017. Joint administration of the cases is currently pending. At the time of filing, the Amboy Group, LLC had $1.48 million in assets and $7.11 million in liabilities, while CLU Amboy, LLC had $13.34 million in assets and $10.78 million in liabilities. The Hon. Christine M. Gravelle presides over the case. The Debtors are represented by Anthony Sodono, III, Esq. and Sari Blair Placona, Esq. of Trenk, DiPasquale, Della Fera & Sodono, P.C. ANTHONY LAWRENCE: Seeks Feb. 15 Exclusive Plan Filing Extension --------------------------------------------------------------- Anthony Lawrence of New York Inc. requests the U.S. Bankruptcy Court for the Eastern District of New York for further extension of the time within which only the Debtor may file a plan of reorganization and solicit acceptances of such plan to February 15, 2018 and April 14, 2018, respectively. Without the requested extension, the time within the Debtor may file and solicit acceptances to a plan of reorganization is scheduled to expire on November 16, 2017 and January 16, 2018, respectively. The Debtor relates that it has spent significant amount of its time focusing on its litigation with its former counsel in the pending adversary proceeding, which has taken a significant amount of time away from moving forward with confirming a chapter 11 plan. While the matter has been settled in principle, the Debtor claims that since the last hearing, the parties have spent their time hammering out a Stipulation of Settlement, which has just been finalized and must be approved by the Court. While the Debtor's business has been doing well enough to fund a plan of reorganization, the Debtor submits that it could use those funds to pay certain claims which are required to be paid immediately upon confirmation of the Debtor's plan and to make its Chapter 11 plan feasible. The Debtor avers that it has also been focusing on its operations. The Debtor claims that further work is also required to complete a financial analysis, post-petition business plan and final determination of certain alleged unsecured creditors. In addition, the Debtor plans to object to two claims filed by governmental units. The Debtor submits that it would be prejudicial and detrimental to the Debtor, its estate and its creditor if the Debtor will not be given additional time to complete its business plan, analysis, review and negotiations with its creditors -- all of which are absolutely essential to the successful outcome of the Debtor's Chapter 11 case. A hearing will be held on November 14, 2017 at 10:00 a.m. during which time the Court will consider the Debtor's request to further extend the Exclusive Periods. Objections to the Debtor's request are due no later than seven days prior to the hearing date. About Anthony Lawrence of New York, Inc. Headquartered in Long Island City, New Yok, Anthony Lawrence of New York, Inc., filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 15-44702) on Oct. 15, 2015, estimating its assets at up to $50,000 and its liabilities at between $1 million and $10 million. The petition was signed by Joseph J. Calagna, president. Judge Elizabeth S. Stong presides over the case. The Debtor is engaged in the business of custom manufacturing of furniture and window treatments for the wholesale market only. James P Pagano, Esq., was formerly tapped to serve as the Debtor's bankruptcy counsel. The Law Office of Rachel S. Blumenfeld PLLC now represents the Debtor. No trustee or examiner has been appointed in this Chapter 11 case. No Committee of Unsecured Creditors has been appointed in this case. APEX PROPERTIES: November 6 Disclosure Statement Hearing -------------------------------------------------------- Judge Paul M. Black of the U.S. Bankruptcy Court for the Western District of Virginia will convene on November 6, 2017 at 2:00 p.m. to consider approval of the Disclosure Statement filed by Apex Properties LLC on September 29, 2017. October 30, 2017, is fixed as the last date for filing and serving written objections to the Disclosure Statement in accordance with Rule 3017(a). Counsel for Apex Properties LLC: Andrew S. Goldstein, Esq. Magee, Goldstein Lasky & Sayers PC PO Box 4004 Roanoke, VA 24003 About Apex Properties Apex Properties LLC, based in Salem, Virginia, is a privately held company and an operator of a non-residential building. Apex filed for Chapter 11 bankruptcy (Bankr. W.D. Va. Case No. 17-70501) on April 14, 2017, listing between $1 million and $10 million in both assets and liabilities. The Hon. Paul M. Black presides over the case. Andrew S Goldstein, Esq., at Magee Goldstein Lasky & Sayers, P.C., serves as Chapter 11 counsel. The petition was signed by Al Cooper, managing member. ARCH COAL: Court Affirms Order Disallowing W. English Claim ----------------------------------------------------------- In the appeals case captioned WAYNE ENGLISH, Appellant, v. ARCH COAL, INC., Appellee, Case No. 4:17cv9 RLW (E.D. Mo.), District Judge Ronnie L. White affirms the Bankruptcy Court's decision disallowing English's claim and denies English's appeal. English held $140,000 the principal amount of 9.875% Senior Notes Due 2019 issued by Arch Coal, and he filed two proofs of claim in Arch Coal's Chapter 11 bankruptcy case. The Claims present similar issues and do not include any reference to fraud or misrepresentation. The Bankruptcy Court entered an order that authorized the indenture trustees for Arch Coal's debt instruments to file master proofs of claim against Arch Coal and its debtor subsidiaries. UMB Bank, National Association, filed a master proof of claim in the amount of $375 million in principal, plus more than $21 million in accrued and unpaid interest, on behalf of itself and the noteholders. Arch Coal and its debt subsidiaries proposed a plan of reorganization that provided for noteholders to receive a combination of cash and securities on account of their claims. This distribution was to be made to noteholders via the Indenture Trustee. The Bankruptcy Court entered an order confirming the Plan on Sept. 15, 2016, and the Plan became effective on Oct. 5, 2016. English received the distribution provided to his class of noteholders under the Plan. After the Plan was confirmed, Arch Coal objected to English's claims, and many others, as duplicative of the master claim filed by the Indenture Trustee. English provided a response that was rejected by the clerk of the Bankruptcy Court because it was not signed. English later submitted his response with a signature and requested that the Bankruptcy consider his response timely. The Bankruptcy Court sustained the objection and disallowed English's claim as duplicative. English argues that the Bankruptcy Court erred in disallowing his claim for prepetition interest in the amount of $14,847 in violation of 11 U.S.C. section 502. English claims that the Bankruptcy Court did not provide any exceptions to English's prepetition interest claim and, therefore, his claim for prepetition interest should be allowed. Based upon the record, English's assertion is inaccurate. The Indenture Trustee's proof of claim included more than $21 million in accrued and unpaid interest. The Plan failed to disallow claims for accrued, pre-bankruptcy interest owed to noteholders. Neither Arch Coal nor any other party in interest objected to the Indenture Trustee's claim. The claim was allowed in the full amount asserted. Thus, the Court holds that English and the other noteholders have received the full recovery provided by the Plan and he is not entitled to recover more. English also claims that he was defrauded and that his claim was not discharged upon the confirmation of Arch Coal's Plan. The Court denies English's claim because he is not entitled to recovery under this theory. First, neither of English's claims included a claim for misrepresentation or fraud. Rather, English's claim was for principal and interest owed on the notes. The deadline to file any proof of claim was May 27, 2016. Thus, even if this Court construed English's filings in connection with the claim objection as proofs of claim, they were filed after the bar date and are disallowed for that reason. A full-text copy of Judge White's Memorandum and Order dated Oct. 20, 2017, is available at https://is.gd/Q8fS6L from Leagle.com. Wayne English, Appellant, Pro Se. Arch Coal, Inc., Appellee, represented by Brian C. Walsh -- brian.walsh@bryancave.com -- BRYAN CAVE LLP, Cullen K. Kuhn -- ckkuhn@bryancave.com -- BRYAN CAVE LLP, Laura U. Hughes -- laura.hughes@bryancave.com -- BRYAN CAVE LLP & Lloyd A. Palans -- lapalans@bryancave.com -- BRYAN CAVE LLP. About Arch Coal Founded in 1969, Arch Coal, Inc., is a producer and marketer of coal in the United States, with operations and coal reserves in each of the major coal-producing regions of the Country. As of January 2016, it was the second-largest holder of coal reserves in the United States, owning or controlling over five billion tons of proven and probable reserves. Arch Coal, Inc., and 71 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Mo. Case Nos. 16-40120 to 16-40191) on Jan. 11, 2016. The petition was signed by Robert G. Jones as senior vice president-law, general counsel and secretary. The Debtors disclosed total assets of $5.84 billion and total debt of $6.45 billion at the time of the bankruptcy filing. Judge Charles E. Rendlen III has been assigned the case. The Debtors engaged Davis Polk & Wardwell LLP as counsel, Bryan Cave LLP as local counsel, FTI Consulting, Inc. as restructuring advisor, PJT Partners as investment banker, and Prime Clerk LLC as notice, claims and solicitation agent. An Official Committee of Unsecured Creditors was appointed in the case. The Committee retained Kramer Levin Naftalis & Frankel LLP as counsel; Spencer Fane LLP as local counsel; Berkeley Research Group, LLC as financial advisor; Jefferies LLC as investment banker; and Blackacre LLC as coal consultant. * * * The Bankruptcy Court for the Eastern District of Missouri on September 13, 2016, entered an order confirming the Debtors' Fourth Amended Joint Plan dated as of September 11, 2016. The Plan was amended on September 15. On October 5, 2016, Arch Coal consummated the transactions contemplated by the Plan, which became effective on that date. ARMSTRONG ENERGY: Files for Chapter 11 With Knight Hawk Deal ------------------------------------------------------------ Armstrong Energy, Inc., a producer and marketer of thermal coal in the Illinois Basin, and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Eastern District of Missouri. The Company took this action in order to consummate the transfer of substantially all of its assets (the "Transaction") to a new entity to be jointly owned by Knight Hawk Holdings, LLC ("Knight Hawk") and the Company's secured noteholders. Armstrong expects its mining operations and customer shipments to continue in the ordinary course throughout the chapter 11 process. "We remain firmly committed to serving our customers and to being a good employer by maintaining safe, productive operations as we undertake this process," said Armstrong Executive Chairman, J. Hord Armstrong, III. "We are confident that this court-supervised process is the best way to close the Transaction expeditiously," added Mr. Armstrong. Upon the close of the proposed Transaction, Knight Hawk will take control of Armstrong's ongoing operations. The Company filed various motions with the Bankruptcy Court, requesting authorization to continue paying employee wages and providing health care and other benefits. Armstrong has also asked for authority to continue existing customer programs and intends to pay suppliers in full under normal terms for goods and services provided after the filing date of November 1, 2017. Additional information is available on Armstrong's Web site at www.armstrongenergyinc.com or by calling Armstrong's Restructuring Hotline, toll-free in the U.S., at (866) 416-0556. Also, court filings and other documents related to the reorganization proceedings are available on a separate website administered by Armstrong's claims agent, Donlin Recano & Company, Inc., at http://www.donlinrecano.com/armstrong. Kirkland & Ellis, LLP is serving as legal advisor, MAEVA Group LLC is serving as financial advisor, and FTI Consulting, Inc. ("FTI") is providing interim management services to Armstrong in connection with the Transaction. Alan Boyko, a Senior Managing Director of FTI, has been named Chief Restructuring Officer of Armstrong. About Armstrong Armstrong Energy, Inc. -- http://www.armstrongenergyinc.com/-- is a diversified producer of low chlorine, high sulfur thermal coal from the Illinois Basin, with both surface and underground mines. The Company markets its coal primarily to proximate and investment grade electric utility companies as fuel for their steam-powered generators. Armstrong reported a net loss of $58.83 million in 2016, a net loss of $162.14 million in 2015 and a net loss of $28.83 million in 2014. As of June 30, 2017, Armstrong Energy had $308.95 million in total assets, $435.3 million in total liabilities and a total stockholders' deficit of $126.3 million. Ernst & Young LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company incurred a substantial loss from operations and has a net capital deficit as of and for the year ended Dec. 31, 2016. The Company's operating plan indicates that it will continue to incur losses from operations, and generate negative cash flows from operating activities during the year ended Dec. 31, 2017. The auditors said these projections and certain liquidity risks raise substantial doubt about the Company's ability to meet its obligations as they become due within one year after March 31, 2017, and continue as a going concern. * * * In July 2017, S&P Global Ratings lowered its corporate credit and issue-level ratings on Armstrong Energy to 'D' from 'CC' and removed the ratings from CreditWatch, where it placed them with negative implications on June 16, 2017. S&P said, "The downgrade reflects Armstrong's failure to make an $11.75 million interest payment on the 11.75% senior secured notes within the 30-day grace period that expired on July 17, 2017. The interest payment on the notes was originally due on June 15, 2017, after which the company exercised its 30-day grace period." Also in July 2017, Moody's Investors Service downgraded the ratings of Armstrong Energy, Inc., including its corporate family rating (CFR) to 'Ca' from 'Caa1', probability of default rating (PDR) to 'D-PD' from Caa1-PD, and the rating on the senior secured notes to 'Ca' from 'Caa2'. The outlook is negative. The action follows the company's July 17, 2017 announcement that the company entered into a Forbearance Agreement with the holders of approximately $158 million in aggregate principal amount (representing approximately 79% of the outstanding principal amount) of the Company's Senior Secured Notes due 2019. AVAYA INC: Moody's Assigns Prov. B2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a provisional (P)B2 Corporate Family Rating to Avaya, Inc. upon its pending emergence from bankruptcy proceedings. Moody's also assigned a provisional (P)B1 rating to the company's proposed $2.4 billion first lien term facility and a provisional (P)Caa1 to the proposed $500 million second lien notes. The company is planning to emerge with the proposed loans and an unrated $300 million ABL revolving credit facility. The ratings outlook is stable. Upon Avaya's emergence from bankruptcy proceedings and the closing of the credit facilities, Moody's expects to convert the provisional ratings to definitive ratings. RATINGS RATIONALE The provisional (P)B2 Corporate Family Rating reflects the relatively high leverage at closing and declining performance trends offset to some degree by the company's scale and leading positions in the unified communications (UC) and contact center (CC) industries. The UC and CC industries have been evolving rapidly and though Avaya has likely lost significant market share over the last few years, it remains one of the largest players in its core segments. Avaya's contact center business is expected to remain stable but its unified communications business is expected to continue to decline, possibly at double digit rates driven by competitive pressures and winding down of its legacy hardware business. Senior Credit Officer Matthew Jones noted, "though declining, the company still remains a leading provider of voice applications, and likely has one of the largest installed bases of enterprise telephony systems." Jones also added, "the company will reduce its debt load and pension burden significantly through the bankruptcy process but debt and pension levels will remain high and flexibility limited given the evolving industry environment and competitive landscape." Pro forma leverage at closing is estimated at just under 5x excluding bankruptcy and related expenses and charges. Given the declining trends, the company is weakly positioned in the B2 category. Avaya has to play catch up after years of constrained ability to invest in its business both internally and through acquisitions. Customer concerns should be reduced but not completely eliminated by the improved capital structure. Moody's believe the company's recent performance was significantly impacted by customer concerns over LBO debt loads and the recent Chapter 11 proceedings. The unified communications and contact center industries have been evolving to include integrated communications offerings, with products offered as either on premise, hosted or managed service solutions. Avaya's revenue declines also reflect the shift from higher price legacy hardware systems to lower price but higher margin software solutions. Liquidity is good driven by an undrawn $300 million ABL revolving credit facility, approximately $350 million of cash at emergence and positive free cash flow over the next year. The stable outlook reflects Moody's expectation for continued declines in revenue as Avaya's legacy business runs off but stabilizing EBITDA levels as margins improve and significant improvements in free cash flow. The ratings could be downgraded if EBITDA levels do not stabilize, leverage exceeds 5.5x on other than a temporary basis or free cash flow after pension contributions is not on track to exceed $200 million. The ratings could be upgraded if performance improves, leverage falls below 4x and free cash flow to debt exceeds 10%. The following ratings were assigned: Assignments: Issuer: Avaya Inc -- Probability of Default Rating, Assigned B2-PD -- Corporate Family Rating, Assigned (P)B2 -- Senior Secured 1st lien Bank Credit Facility, Assigned (P)B1 (LGD3) -- Senior Secured 2nd lien Regular Bond/Debenture, Assigned (P)Caa1 (LGD5) Outlook Actions: Issuer: Avaya Inc -- Outlook, Assigned Stable The principal methodology used in these ratings was Diversified Technology Rating Methodology published in December 2015. Avaya Inc. is a global leader in enterprise telephony systems with $3.4 billion of revenues for the twelve months ended June 30, 2017. B E R PRECISION: Creditors to Get Full Payment Over 60 Months ------------------------------------------------------------- B E R Precision, Inc., and Thomas Edward Berry filed with the U.S. Bankruptcy Court for the Southern District of Texas an amended combined disclosure statement and plan of reorganization on October 3, 2017. Class 3A consists of the claim held by the Debtors' largest secured creditor, American Business Lending, Inc., which holds a valid and perfected first lien covering real property known as 1100 N. Washington Avenue, Cleveland, Texas, and other business personal property as provided in the Promissory Note, and other loan documents, and as further set forth in the Stipulation and Order for Use of Cash Collateral entered December 6, 2016. The Plan constitutes a ratification, renewal and reinstatement, as applicable, of the Note and related loan documents. The Plan provides that the Reorganized Debtor will continue to make the payments required by the terms of the ABL Note and the related loan documents for the monthly payments of principal and interest which accrue on a monthly basis. The pre-petition liens of ABL in and to the collateral as provided in the Note and related loan documents, as continued as post-petition replacement liens pursuant to the Cash Collateral Order, and as renewed and extended pursuant to the Plan, are valid and duly existing and will have the priority as existed prepetition, without the necessity of additional recordation of such liens. Class 3B consists of the claim held by the Debtors' next largest secured debt is in the amount of $23,482.11, which is owed to First Bank & Trust East Texas. The debt is fully secured by two mills that are currently not in use. Under the Plan, the Debtor will pay the claim of First Bank in full on or before 90 days from the effective date of the plan, and First Bank will retain all rights, remedies, interests, liens, and lien position with respects to its Note and Security Agreement as to the Debtors and the collateral. Since the Debtors have been served with motions to modify the automatic stay by First Bank, and which the Debtors do not oppose the motions, the Debtors will release the possession of the mills to First Bank upon order of the Court granting permission thereof. As such, the Plan provides that the automatic stay will terminated upon the Effective Date and the Debtors will, at all times, maintain, and provide First Bank with proof of, current and effective full coverage insurance in accordance with the terms of the Contract insuring the interest of First Bank in the collateral. Class 4 lists the following unsecured creditors and their respective claim amounts that the Debtors propose to pay in full pursuant to the Plan: (1) Discover Bank -- $1,223.61 (2) Leaf Capital Funding, LLC -- $55,717.35 (3) Leaf Capital Funding, LLC -- $61,690.38 (4) Scottrade Bank Equipment Finance -- $ 64,258.25 The general unsecured claims that are not disputed will receive pro-rata distributions before the expiration of 60 months, but not before all claims of Classes 1 and 2 are satisfied. The Debtor estimates that the amount of the dividends paid to this class will total $182,889.59. It is estimated that the Class 4 claimants will receive dividends equal to 100 % of each claim. The Plan is based upon the distribution to the creditors from the sale of the ten lots containing approximately 80 contiguous acres of undeveloped property on or before December 31, 2018. The Debtors' real estate broker, Phillip Cameron of Cameron Real Estate has successfully marketed two lots next to BER's machine shop and closed the sale on July 28, 2017. Payments to creditors provided by the Plan will be made from the sales proceeds of the real property. If the sale of Debtors’ real estate fails to provide sufficient income to fund the Plan on or before December 31, 2018, the Debtors will fund the Plan with monthly payments from the gross income of BER Precision, Inc. Thereafter, distribution of the payments will be made by Thomas Edward Berry beginning on January 10, 2019 until the allowed claim is satisfied. A full-text copy of the Amended Combined Disclosure Statement and Plan of Reorganization is available for free at http://tinyurl.com/ycupq4dy About Thomas Edward Berry and B E R Precision Thomas Edward Berry is an individual residing at 10111 Aves Street, Houston, Texas 77034. BER Precision, Inc. is a corporation whose main offices and machine shop is located at 1100 N. Washington Avenue, Cleveland Texas 77327. B E R Precision, Inc. filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 17-34371), on July 19, 2017. The Petition was signed by Thomas Edward Berry, managing member. At the time of filing, the Debtor estimated assets and liabilities at $100,000 to $500,000 each. Thomas Edward Berry filed his petition for bankruptcy under Chapter 11 (Bankr. S.D. Tex. Case No. 16-35232), on October 18, 2016. By order of the Court on July 26, 2017 the cases are jointly administered. The Debtors are represented by Larry A. Vick, Esq. at the Law Offices of Larry A. Vick. BEARCAT ENERGY: Argo Partners Appointed as New Committee Member --------------------------------------------------------------- The Office of the U.S. Trustee on Oct. 30 appointed Argo Partners as new member of Bearcat Energy LLC's official committee of unsecured creditors. Argo Partners can be reached through: Matthew V. Binstock Argo Partners 12 West 37th Street, 9th Floor New York, NY 10018 Phone: (212) 643-5446 Fax: (212-643-6401 Email: Mattb@argopartners.net The two other members of the committee are Lost Cabin Gas, LLC and Magna Energy Services, LLC. About Bearcat Energy Bearcat Energy LLC, owner of coal bed methane wells, equipment and related fixtures located in the State of Wyoming, filed a Chapter 11 petition (Bankr. D. Colo. Case No. 17-12011) on March 14, 2017. The petition was signed by Keith J. Edwards, CEO. The Debtor estimated $0 to $50,000 in assets and $1 million to $10 million in liabilities as of the bankruptcy filing. The Hon. Elizabeth E. Brown presides over the case. Kenneth J. Buechler, Esq., at Buechler & Garber, LLC, serves as bankruptcy counsel. On April 20, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. BELK INC: Bank Debt Trades at 16.78% Off ---------------------------------------- Participations in a syndicated loan under BELK, Inc. is a borrower traded in the secondary market at 83.22 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.41 percentage points from the previous week. Petco Animal Supplies pays 450 basis points above LIBOR to borrow under the $1.5 billion facility. The bank loan matures on 2022 and carries Moody's B2 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. BISHOP GORMAN: Given Until Jan. 8 to File Reorganization Plan ------------------------------------------------------------- The Hon. August B. Landis of the U.S. Bankruptcy Court for the District of Nevada extended the exclusive periods during which only Bishop Gorman Development Corporation may file a Chapter 11 plan and solicit acceptances of the plan until January 8, 2018 and March 9, 2018, respectively. As reported by the Troubled Company Reporter on August 21, 2017, the Debtor sought for an extension of the Exclusive Periods to the earlier of 60 days after the Court enters a final court order adjudicating the claims raised in the adversary case involving J.A. Tiberti Construction, Inc. ("JATCO") or Oct. 17, 2018, and an extension of the Exclusive Solicitation Period to the earlier of 120 days after the Court enters a final order adjudicating the claims raised in the JATCO Adversary or Dec. 17, 2018. An opposition to the Debtor's Exclusivity Motion was filed by counsel for JATCO. The Debtor said that JATCO's stated opposition to the Debtor's request for an extension of exclusivity amounts to nothing more than impermissible bootstrapping, pure and simple. JATCO's refusal to relinquish its alleged judgment liens obtained during the 90-day period immediately preceding the Debtor's bankruptcy case that are subject to avoidance in the JATCO Adversary. The Debtor said that the requested extension has been narrowly tailored in that, in the first instance, it is linked expressly to the resolution of the JATCO Adversary. Issues of claims allowance and distribution priority as to JATCO's claims are squarely raised in the JATCO Adversary and must be resolved prior to the Debtor being in a position to propose and file a plan that meets all of the requirements for plan confirmation. According to the Debtor, resolution of the JATCO Adversary in favor of the Debtor and its estate will clear the path to the Debtor proposing and filing a confirmable Chapter 11 plan. As JATCO itself has observed, the Debtor needs to address JATCO's claim. The Debtor has started the process of doing so through the JATCO Adversary. According to the Debtor, tabling the issue of allowance of JATCO's claims for a moment, resolution of the distribution priority to which JATCO's claims would otherwise be entitled would be essential, therefore, to the Debtor's ability to satisfy the requirements of, among other confirmation requirements, 11 U.S.C. Sections 1122 and 1129(a)(1). Because this status, among other issues involving JATCO's claim, remains to be determined in the JATCO Adversary, the Debtor says it has been hamstrung in its efforts to propose and file a plan that meets all of the requirements Section 1129(a). The Debtor said that until the Bankruptcy Court determines the matters presented for adjudication as part of the JATCO Adversary, the Debtor will not be in a position to propose and file a plan of reorganization that meets all of the requirements of Section 1129(a). As alleged by the Debtor in the JATCO Adversary, the results of JATCO's race to the courthouse are avoidable under, among other provisions of the U.S. Bankruptcy Code, Sections 547 and 549, and JATCO's refusal to relinquish its avoidable transfers renders JATCO's claims in the Chapter 11 case subject to disallowance in their entirety by operation of Section 502(d). Either reclassification of JATCO's claims as general unsecured claims or the outright disallowance of JATCO's claims in their entirety by operation of Section 502(d) would clear the path for Debtor to propose a confirmable Chapter 11 plan of reorganization. About Bishop Gorman Development Corporation Bishop Gorman Development Corporation is a charitable organization with its principal assets located at 5959 S. Hualapai Way, Las Vegas, Nevada. Bishop Gorman Development filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 17-11942) on April 17, 2017, estimating assets and liabilities between $100 million and $500 million each. Deacon Aruna Silva, executive director, signed the petition. Judge August B. Landis presides over the case. Brett A. Axelrod, Esq., at Fox Rothschild LLP serves as the Debtor's bankruptcy counsel. The Debtor hired Greenberg Traurig, LLP, as its special litigation counsel, and Wallace Neumann & Verville, LLP, as its accountant. BREITBURN ENERGY: US Trustee Discloses Current Committee Members ---------------------------------------------------------------- The U.S. trustee for Region 2 disclosed in an Oct. 30 filing the current members of the official committee of unsecured creditors in the Chapter 11 cases of Breitburn Energy Partners, L.P. and its affiliates. The committee members are: (1) Transpecto Transport Co. 625 Market Street, Suite 200 Shreveport, LA 71101 Attn: Wallace L. Stanberry, President Tel: (318) 221-3957 Email: wls@stanberry-transpecto.com (2) Wilmington Trust Company 50 South Sixth Street, Suite 1290 Minneapolis, MN 55402 Attn: Peter F. Finkel, Vice President Tel: (612) 217-5629 Email: pfinkel@wilmingtontrust.com (3) Ronald Jay Lichtman 155 East 55th Street New York, NY 10022 Tel: (845) 292-8083 Email: rjlesq@mindspring.com The U.S. Trustee originally appointed Ares Special Situations Fund IV, L.P. C/O Ares Management LLC; BPC UKI LP C/O Beach Point Capital Management; and Wexford Spectrum Investors, LLC, as members of the Creditors' Committee. The U.S. Trustee then also appointed Transpecto Transport Co. and Wilmington Trust Company as Committee members. About Breitburn Energy Breitburn Energy Partners LP is engaged in the acquisition, exploitation and development of oil and natural gas properties, Midstream Assets, and a combination of ethane, propane, butane and natural gasoline that when removed from natural gas become liquid under various levels of higher pressure and lower temperature, in the United States. Operations are conducted through Breitburn Parent's wholly-owned subsidiary, Breitburn Operating LP, and BOLP's general partner, Breitburn Operating GP LLC. Breitburn Energy Partners LP and 21 of its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11390) on May 15, 2016, listing assets of $4.71 billion and liabilities of $3.41 billion. The petitions were signed by James G. Jackson, executive vice president and chief financial officer. The Debtors tapped Ray C Schrock, Esq., and Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, as bankruptcy counsel. The Debtors hired Steven J. Reisman, Esq., and Cindi M. Giglio, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP as their conflicts counsel. The Debtors tapped Alvarez & Marsal North America, LLC, as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk LLC as claims and noticing agent. An Official Committee of Unsecured Creditors been formed in the case. The Creditors Committee retained Milbank, Tweed, Hadley & McCloy LLP as counsel. A Statutory Committee of Equity Security Holders was also formed in the case. The Equity Committee is currently composed of seven individual holders. The Equity Committee retained Proskauer Rose LLP as counsel. BROTHERS MATERIALS: District Court Affirms Ch. 11 Plan Confirmation ------------------------------------------------------------------- Judge Marina Garcia Marmolejo of the U.S. District Court for the Southern District of Texas affirms the Bankruptcy Court's order confirming Brothers Materials Ltd.'s Chapter 11 Bankruptcy Plan and denies the Internal Revenue Service's appeal not to enforce the Plan. The thrust of the IRS's appeal is couched in jurisdictional terms. It argues that the Bankruptcy Court did not have subject-matter jurisdiction to enforce the Plan provisions allowing proceeds from the Property's sale to be used to pay administrative expenses before paying the IRS's claim. As a direct attack on the Bankruptcy Court's subject-matter jurisdiction to enforce the Plan, the IRS's argument must fail because the "Bankruptcy Court plainly ha[s] jurisdiction to interpret and enforce its own prior orders." In truth, the IRS must be arguing that the Plan cannot be enforced because the Bankruptcy Court exceeded its jurisdiction when it originally confirmed the Plan. In the IRS's view, the Plan should not have been confirmed because the Bankruptcy Court lacked subject-matter jurisdiction over the Property, which is a non-estate asset owned by non-debtors, or alternatively because it lacked jurisdiction to strip away the IRS's secured interest in the Property. The IRS, however, did not appeal the confirmation order on this ground (or any grounds for that matter) and allowed it to become final. As a final judgment, it is res judicata, and the IRS has failed to explain why the Court should not give it the preclusive effect that confirmation orders are normally entitled to. The incontrovertible truth of this case is that the IRS did not object to the Plan or directly appeal the confirmation order. Yet when the Debtor filed a motion to enforce an unambiguous Plan provision in the Bankruptcy Court, the IRS changed course, asserting for the first time the Court's alleged lack of jurisdiction to confirm the Plan. Thus, the Court agrees with the Bankruptcy Court's holding that the time to make such a challenge has long since passed and that its confirmation order was res judicata. The case is captioned BROTHERS MATERIALS LTD., A TEXAS LIMITED PARTNERSHIP, Debtor, UNITED STATES OF AMERICA, Appellant, v. BROTHERS MATERIALS LTD., A TEXAS LIMITED PARTNERSHIP, Appellee, Civil Action No. 5:17-CV-0020 (S.D. Tex.). A full-text copy of Judge Marmolejo's Memorandum and Order dated Oct. 20, 2017, is available at https://is.gd/qLGWqH from Leagle.com. Brothers Material, Ltd., A Texas Limited Partnership, represented by Carl Michael Barto. UNITED STATES OF AMERICA, Appellant, represented by Thomas M. Herrin, Department of Justice. About Brothers Materials, Ltd. Brothers Materials, Ltd., based in Laredo, TX, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 14-50121) on June 3, 2014. The Hon. David R Jones presides over the case. Carl Michael Barto, Esq., at the Law Office of Carl M. Barto is bankruptcy counsel. In its petition, the Debtor estimated $4.66 million in assets and $4.40 million in liabilities. The petition was signed by Rogelio Solis Jr., manager. CAMBER ENERGY: Reports Results of Well Recompletions & Future Plans ------------------------------------------------------------------- Camber Energy, Inc., announced that the recompletion of the 5th well, in a six well recompletion program in the Coyle Field, located in Payne County, Oklahoma, was completed on the 23rd of October. To date, actual recompletion costs are approximately 45% below estimates, while production levels are significantly above projections. The 6th, and final well in the field, should be completed within the next few days, commencing production by end of month. "Camber is currently negotiating a renewal of a long term purchase agreement with its midstream buyer for all of the Coyle Field production. The contract is expected to include a stair step incentive to the Company for higher volumes. The Company anticipates realizing a meaningful increase in revenues in the coming weeks and months once the NGL dominate production in this field is produced and sold downstream" stated Richard N. Azar II, the interim CEO of Camber. "The contract renewal should enhance the Company's ability to maximize revenues and incentivizes to actively move forward with a geologically sound drilling program." The Coyle field is a Hunton formation de-watering program that produces light oil, natural gas and abundant natural gas liquids. Dewatering operations in the Coyle Field began in 1999. According to published reports, remaining gross Proved Developing Producing (PDP) reserves are estimated to be approximately: 23,550 thousand barrels of oil, 3,500 million cubic feet (MMcf) of gas and 813,710 barrels of Natural Gas Liquids (NGLs). The wells in this field are at an average depth of 4,500 feet, and vary with single and dual laterals per well. Sustained average total wellhead production levels are expected to range from 2.3 to 3 million cubic feet per day (MMcfd) with 1,525 average British Thermal Unit (BTU) gas. About Camber Energy Based in San Antonio, Texas, Camber Energy, Inc. (NYSE American: CEI) -- http://www.camber.energy.com/-- is a growth-oriented, independent oil and gas company engaged in the development of crude oil, natural gas and natural gas liquids in the Hunton formation in Central Oklahoma in addition to anticipated project development in the San Andres formation in the Permian Basin. Lucas Energy changed its name to Camber Energy, Inc., effective Jan. 5, 2017, to more accurately reflect the Company's strategic shift from its Austin Chalk and Eagleford roots to an expanding addition of shallow oil and gas reserves with longer-lived, lower-risk production profiles. Camber reported a net loss of $89.12 million on $5.30 million of total net operating revenues for the year ended March 31, 2017, compared to a net loss of $25.44 million on $968,146 of total net operating revenues for the year ended March 31, 2016. As of March 31, 2017, Camber Energy had $39.85 million in total assets, $50.42 million in total liabilities and a total stockholders' deficit of $10.56 million. GBH CPAs, PC -- http://www.gbhcpas.com/-- in Houston, Texas, issued a "going concern" opinion on the consolidated financial statements for the year ended March 31, 2017, citing that the Company has incurred significant losses from operations and had a working capital deficit at March 31, 2017. These factors raise substantial doubt about the Company's ability to continue as a going concern, the auditors said. CANNABIS SCIENCE: Files Lawsuit Over Hemp Harvest Raid ------------------------------------------------------ Cannabis Science, Inc., along with its partners Winnemucca Shosoni, MBS, American States University, Free Spirit Organics and HRM Farms, filed a complaint in the U.S. District Court for the Eastern District of California against San Joaquin County Board of Supervisors; San Joaquin County Counsel; Erin Hiroko Sakata; Miguel Villapudua; Katherine Miller; Tom Patti; Bob Elliott; Chuck Winn; San Joaquin County District Attorney; San Joaquin County Sheriff; Drug Enforcement Administration and Does 1-50. The Complaint was filed in response to defendants entering onto the Plaintiffs' property and seizing their industrial hemp harvest and alleges: (1) Violation of Supremacy Clause/Preemption [U.S. Const. art. VI, cl. 2]; (2) Unconstitutional Vagueness [U.S. Const. am. 5, 14]; (3) Unlawful Bill of Attainder/Ex Post Facto [U.S. Const. art. I, Section 9, cl. 3]; (4) Violation of Fifth Amendment - Procedural Due Process; and, (5) Violation of Fourth Amendment - Unlawful Seizure [42 U.S.C. Section 1983]. The Complaint requests for the following: - Temporary Restraining Order/Immediate Stay of Enforcement; - Return of Property Seized; - Preliminary Injunction; - Permanent Injunction; - Declaration re: Ordinance Is Void; - Declaration re: Search Warrant Is Void; - Declaration re: Seizure Was Unlawful; - Compensatory Damages; and - Punitive Damages. The Complaint alleges that the Defendants: (a) drafted San Joaquin County Ordinance 4497 specifically to criminalize the Plaintiffs existing industrial hemp harvest; (b) determined the Plaintiffs violated the Ordinance; and, (c) enforced it by seizing the Plaintiffs' grow, with an estimated value of US $77 Million, without affording them an opportunity to meaningfully present their arguments to a judge or other neutral fact finder. The Plaintiffs further contend that the Defendants committed this violation of the separation of powers in the form of an emergency ordinance so the Plaintiffs would not have enough notice or opportunity to become compliant and based on a multitude of inaccurate facts. The Plaintiffs contend that they have all of the required permits, exemptions, approvals and authorizations necessary, but, regardless, these actions are unconstitutional. The Company will provide further updates once available. About Cannabis Science Cannabis Science, Inc., was incorporated under the laws of the State of Colorado, on Feb. 29, 1996, as Patriot Holdings, Inc. Cannabis is at the forefront of medical marijuana research and development. The Company works with world authorities on phytocannabinoid science targeting critical illnesses, and adheres to scientific methodologies to develop, produce, and commercialize phytocannabinoid-based pharmaceutical products. Cannabis reported a net loss of $10.19 million on $9,263 of revenue for the year ended Dec 31, 2016, compared with a net loss of $19.14 million on $44,227 revenue for the year ended Dec. 31, 2015. As of June 30, 2017, Cannabis had $2.69 million in total assets, $5.22 million in total liabilities and a $2.53 million total stockholders' deficit. Turner, Stone & Company, L.L.P., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016. The auditors noted that the Company has suffered recurring losses from operations since inception, has a working capital deficiency and will need to raise additional capital to fund its business operations and plans. Furthermore, there is no assurance that any capital raise will be sufficient to complete the Company's business plans. These conditions raise substantial doubt about the Company's ability to continue as a going concern. CAPSTONE PEDIATRICS: December 19 Plan Confirmation Hearing ---------------------------------------------------------- On May 2, 2017, Capstone Pediatrics, PLLC filed its First Amended Plan of Reorganization and Amended Disclosure Statement. Dr. Eddie Hamilton, a creditor in this case, filed an objection to the Debtor's Disclosure Statement On September 27, 2017, the Debtor and Dr. Hamilton submitted a Notice of Resolution of Objection to Disclosure Statement. On the same date, the Debtor also submitted a Revised First Amended Plan of Reorganization, which reflected changes from the Debtor's Omnibus Amended Disclosure Statement. Accordingly, Judge Randal S. Mashburn of the U.S. Bankruptcy Court for Middle District of Tennessee approved the Disclosure Statement and scheduled a hearing on confirmation of the Plan to be held on December 19, 2017 at 9:00 a.m. The last day for filing written acceptances or rejections of the Plan will be on December 8, 2017. December 8, 2017 is also fixed as the last day for filing and serving written objections to confirmation of the Plan. Counsel for the Debtor: R. Alex Payne, Esq. Griffin S. Dunham, Esq. DUNHAM HILDEBRAND, PLLC 1704 Charlotte Avenue, Suite 105 Nashville, Tennessee 37203 Telephone: 629.777.6529 Email: alex@dhnashville.com About Capstone Pediatrics Capstone Pediatrics, PLLC, aka Centennial Pediatrics, is a physician-owned pediatric practice headquartered in Nashville, Tennessee. The Company was formerly known as Centennial Pediatrics. It was acquired by Dr. Gary Griffieth and his sister, Winnie Toler, in late 2013 from Dr. Edward Hamilton, who was convicted on a misdemeanor fraud. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No. 15-09031) on Dec. 18, 2015, estimating its assets at between $1 million and $10 million and liabilities at between $10 million and $50 million. The petition was signed by Gary G. Griffieth, chief executive officer. Judge Randal S. Mashburn presides over the case. Griffin S Dunham, Esq., at Emerge Law PLC serves as the Debtor's bankruptcy counsel. CAROLINA MOLD: Bankr. Administrator Seeks Chapter 11 Trustee ------------------------------------------------------------ The U.S. Bankruptcy Administrator filed a motion asking the U.S. Bankruptcy Court for the Middle District of North Carolina for an appointment of a Chapter 11 trustee in the case of Carolina Mold & Machining, Inc. The BA contends that the best way to sell the assets of the Debtor may be as a going concern. The appointment of a trustee would allow an independent assessment of the Debtor's assets and value as a going concern while allowing the Debtor to continue to operate in the ordinary course of its business. Such an appointment would be in the interests of creditors, any equity security holders, and other interests of the estate, without regard to the number of holders of securities of the Debtor or the amount of assets or liabilities of the Debtor. Further, in the process of winding up the affairs of the Debtors, a period of limited operations under the supervision of a trustee may be advantageous. Thus, cause exists to appoint a Chapter 11 trustee in this case and such an appointment would facilitate a trustee negotiating and recommending a possible sale of the Debtor as a going concern or a conversion or dismissal of the case. US Bankruptcy Administrator: William P. Miller, State Bar No. 9364 101 S. Edgeworth Street Greensboro, NC 27401 (336) 358-4170 About Carolina Mold Carolina Mold and Machining, Inc., was founded in 1994 by Rodney Marion and James Hoague. Originally Carolina Mold was a mold manufacturer, mold repair and mold modification facility. As the industry changed, most new molds are being built offshore. As such the business has changed to mostly service repairs and engineering changes, while still manufacturing some new molds. The company's financial situation stems from Rodney Marion turning over the day to day operations of the business to his son. This has caused the Company to fall significantly behind on taxes due to the Internal Revenue Service. Rodney Marion is currently in charge of all operations and as such the business is improving to the point necessary to be profitable. Carolina Mold & Machining, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 17-10001) on Jan. 1, 2017. Rodney Marion, president, signed the petition. The Debtor disclosed $660,978 in assets and $1.48 million in liabilities. The Debtor is represented by Dirk W. Siegmund, Esq., at Ivey, McClellan, Gatton & Siegmund, LLP. No official committee of unsecured creditors has been appointed in the case. CATALYST LIFESTYLES: Case Summary & 16 Unsecured Creditors ---------------------------------------------------------- Debtor: Catalyst Lifestyles Sport Resort, LLC 6089 S Dune Harbor Dr Portage, IN 46368 Type of Business: Catalyst Lifestyles Sport Resort is a private development group behind the proposed development of a sport resort in Portage, Indiana. The company owns in fee simple interest approximately 170 acres of undeveloped ground located at Stagecoach Road and Marine Dr, Portage, IN 464368, valued at $17 million. Chapter 11 Petition Date: October 31, 2017 Case No.: 17-23131 Court: United States Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: Hon. James R. Ahler Debtor's Counsel: KC Cohen, Esq. KC COHEN, LAWYER, PC 151 N. Delaware Street, Ste 1106 Indianapolis, IN 46204-2573 Tel: (317) 715-1845 Email: kc@esoft-legal.com kc@smallbusiness11.com Debtor's Chief Restructuring Officer: Clifford T. Fleming President of Tara Development Corporation Total Assets: $17.0 million Total Debts: $6.67 million The petition was signed by Clifford T. Fleming, chief restructuring officer. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/innb17-23131.pdf Debtor's List of 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Abonmarche Services on Account $21,382 Bernadette Folke Convertible Note $100,000 BLK Investment Convertible Note $200,000 Management LLC Bradley J. Whitmore Convertible Note $100,000 Bruce Dawson Convertible Note $100,000 Derek M. & Shannon Lee Convertible Note $100,000 Diana J. Karnia Convertible Note $75,000 Hoeppner Wagner & Evans LLP Services on Account $27,567 Ice Miller LLP Services on Account $31,544 Jane Maxwell Convertible Note $100,000 John Reid Jr. Living Convertible Note $150,000 Trust 9-12-2005 Linnea J. Bensz Convertible Note $100,000 Samuel E. & Susan A. Tipton Convertible Note $550,000 4433 E 83rd Avenue Merrillville, IN 46410 Tanzillo Stassin & Babcock P.C. Services on Account $11,795 Thomas O. & Lisa O. Noak Convertible Note $100,000 William & Theresa McGarry Unsecured Note $100,000 CENTURYLINK INC: Moody's Lowers CFR to Ba3; Outlook Negative ------------------------------------------------------------ Moody's Investors Service has downgraded CenturyLink, Inc.'s corporate family rating (CFR) to Ba3 from Ba2, downgraded its senior unsecured rating to B2 from Ba3, and confirmed its senior secured rating at Ba3. The downgrade reflects CenturyLink's higher leverage related to its imminent acquisition of Level 3 Communications, Inc. (Level 3). Moody's projects that CenturyLink's leverage will rise to 4.6x (pro forma, Moody's adjusted) following the deal close and remain high for several years due to debt incurred to finance the acquisition of Level 3 and CenturyLink's deteriorating operating performance. CenturyLink's declining revenues and margin pressure will be a headwind to EBITDA growth and its high capital intensity and high dividend payout will consume most of its cash flow. The combination with Level 3 will improve CenturyLink's scale, market position and benefit its growth profile. But, these benefits are outweighed by the deterioration in credit metrics and CenturyLink's weak operating trends. The senior unsecured ratings of Qwest Corporation and Embarq Corporation were downgraded to Ba2 from Ba1. The senior unsecured rating of Centel Capital Corp was downgraded to Ba2 from Ba1 and the first mortgage bonds of Embarq Florida were confirmed at Baa3. Moody's also raised CenturyLink's Speculative Grade Liquidity (SGL) rating to SGL-2 from SGL-3 reflecting good liquidity supported by modest free cash flow and no meaningful debt maturities over the next 12 months. As part of this action, Moody's has upgraded the senior unsecured rating of Level 3 Communications, Inc. to B1 from B2, upgraded Level 3 Financing, Inc.'s senior unsecured rating to Ba3 from B1 and affirmed its senior secured rating at Ba1. Upon completion of the acquisition, Moody's will withdraw the CFR, probability of default rating and SGL rating of Level 3 Communications, Inc. This concludes the review initiated on October 31, 2016. The outlook for all ratings is negative, reflecting the accelerated revenue decline of CenturyLink's core strategic and legacy segments, which has experienced margin compression and top line weakness due to heightened competition from wireline and cable peers. Moody's expects the current competitive environment to persist and believes that merger synergies may not fully offset the company's weak fundamental trends. Downgrades: Issuer: Centel Capital Corp. -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD 3) from Ba1 (LGD 3) Issuer: CenturyLink, Inc. -- Probability of Default Rating, Downgraded to Ba3-PD from Ba2- PD -- Corporate Family Rating, Downgraded to Ba3 from Ba2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD 5) from Ba3 (LGD 5) Issuer: Embarq Corporation -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD 3) from Ba1(LGD 3) Issuer: Mountain States Telephone and Telegraph Co. -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1 Issuer: Northwestern Bell Telephone Company -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1 Issuer: Qwest Corporation -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD 3) from Ba1 (LGD 3) -- Senior Unsecured Shelf, Downgraded to (P)Ba2 from (P)Ba1 Upgrades: Issuer: CenturyLink, Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Issuer: Level 3 Communications, Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 (LGD 5) from B2 (LGD 6) Issuer: Level 3 Escrow II, Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD 4) from B1 (LGD 5) Issuer: Level 3 Financing, Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD 4) from B1 (LGD 5) Confirmations: Issuer: CenturyLink, Inc. -- Senior Secured Bank Credit Facility, Confirmed at Ba3 (LGD 4) Issuer: Embarq Florida, Inc. -- Senior Secured First Mortgage Bonds, Confirmed at Baa3 (LGD 2) Affirmations: Issuer: Level 3 Financing, Inc. -- Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2) Outlook Actions: Issuer: Centel Capital Corp. -- Outlook, Changed To Negative From Rating Under Review Issuer: CenturyLink, Inc. -- Outlook, Changed To Negative From Rating Under Review Issuer: Embarq Corporation -- Outlook, Changed To Negative From Rating Under Review Issuer: Embarq Florida, Inc. -- Outlook, Changed To Negative From Rating Under Review Issuer: Level 3 Communications, Inc. -- Outlook, Changed To Negative From Stable Issuer: Level 3 Financing, Inc. -- Outlook, Changed To Negative From Stable Issuer: Mountain States Telephone and Telegraph Co. -- Outlook, Changed To Negative From Rating Under Review Issuer: Northwestern Bell Telephone Company -- Outlook, Changed To Negative From Rating Under Review Issuer: Qwest Corporation -- Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE CenturyLink's Ba3 CFR reflects its predictable cash flows, its broad base of operations and strong market position further enhanced by its acquisition of Level 3. In addition, CenturyLink has consistently invested into its network at a level above its peer group average, which demonstrates a commitment to its long term competitive position. These positives are offset by high leverage, weak revenue and EBITDA trends exacerbated by a highly competitive environment and secular industry challenges and a high dividend payout that consumes the majority of excess cash flow. Management's growing tolerance for higher leverage as evidenced by debt-financed M&A also weighs on the rating. Moody's expects CenturyLink's leverage (Moody's adjusted) to remain above 4x for several years due to modest revenue declines, continued margin pressure despite synergies that will be realized from integrating Level 3, large dividends and high capital intensity. Pro-forma for the transaction, Moody's projects leverage (Moody's adjusted) to increase from 3.8x as of June 30, 2017 (excluding $6 billion of term loan debt held in escrow) to 4.6x (Moody's adjusted) pro forma but excluding synergies. Management's planned $850 million of cost synergies would result in 0.35x of leverage improvement as they are realized, and the company expects to achieve 80% of this amount over a three year period. However, CenturyLink's recent results have been weak and suggest that the forecasted synergies may be partially offset by declining revenues such that leverage may not fall as expected. The negative outlook reflects the recent acceleration of revenue decline within CenturyLink's core strategic and legacy segments. Moody's expects the current competitive environment to persist, which could prevent CenturyLink from returning to growth and improving leverage. Moody's could downgrade CenturyLink's corporate family rating to B1 if leverage (Moody's adjusted) remains above 4.25x or free cash flow turns negative, or if capital investment is reduced to levels that could weaken the company's competitive position. Moody's could upgrade CenturyLink's corporate family rating to Ba2 if leverage (Moody's adjusted) can be sustained below 3.75x and free cash flow to debt was in the high single digit percentage range. Moody's expects CenturyLink to have a good liquidity profile over the next twelve months, reflected by its SGL-2 rating and supported by $250 million to $300 million of after dividend free cash flow and no material near term debt maturities. At the end of 2Q'17, CenturyLink had $342 million in cash, a $2 billion credit facility, and $6 billion in restricted cash related to the Level 3 financing transaction. CenturyLink's new $2.0 billion senior secured revolving credit facility expires in June 2022. With respect to the term loan A facilities and the revolver, the credit agreement requires CenturyLink to maintain a total leverage ratio of not more than 5x between the closing date of the Level 3 acquisition and two years thereof and 4.75x thereafter and a minimum consolidated interest coverage ratio of at least 2x. The term loan B facility is not subject to the leverage maintenance or interest coverage covenant. Moody's estimate CenturyLink will remain comfortably in compliance with the total leverage ratio and interest coverage ratio for the next 12 to 18 months. Moody's expects CenturyLink to maintain at least $1.5 billion of availability under its revolver over the next twelve to eighteen months. The ratings for the debt instruments comprise both the overall probability of default of CenturyLink, to which Moody's maintain a PDR of Ba3-PD, the average family loss given default assessment and the composition of the debt instruments in the capital structure. CenturyLink's corporate structure will increase in complexity following the deal close, with two layers of debt (secured/unsecured) at the holding company (CenturyLink, Inc.) level and three main operating company credit pools (Qwest, Embarq and Level 3) with multiple classes of debt within each. At the holding company level, Moody's rates the company's secured credit facility Ba3 and unsecured notes B2. CenturyLink's senior secured credit facilities, including its revolver and term loans, are rated Ba3 (LGD4), reflecting their senior position ahead of CenturyLink's unsecured debt. The senior secured credit facilities are guaranteed by the new holding company of Level 3, Qwest Communications International Inc. (QCII), Qwest Services Corp. (QSC), Qwest Capital Funding, Inc. (QCF) and Embarq Corp. (Embarq). The credit facility also benefits from a pledge of stock of Level 3 Communications Inc., QCF and QSC. The B2 (LGD5) senior unsecured rating of CenturyLink Inc. reflects its junior position in the capital structure and the significant amount of senior debt, including CenturyLink's $10 billion secured credit facility, $10.5 billion of debt at Level 3, $7.4 billion of debt at Qwest Corp. (QC), $1 billion of debt at QCF, and $1.8b of debt at Embarq and its subsidiaries. The senior unsecured debt of QC, the company's largest operating subsidiary, is rated Ba2 (LGD3) based on its structural seniority and relatively low leverage of around 2x (Moody's adjusted) as of June 30, 2017. Moody's note that CenturyLink has historically refinanced maturing debt at QC at this entity. Consequently, leverage at QC could increase over the next few years, since Moody's expect its EBITDA to face pressure. The $1 billion of senior unsecured debt of QCF, which is guaranteed by QCII, is unrated due to the lack of QCII audited financial statements and no guarantees provided by CenturyLink. QCF has an intermediate position in the capital structure between QC and CenturyLink, Inc. The senior unsecured notes of Level 3 Communications, Inc. are rated B1 (LGD5) reflecting their junior position in the Level 3 credit pool. The senior unsecured notes of Level 3 Financing, Inc. (LFI) are rated Ba3 (LGD4), reflecting their structural seniority to Level 3 Communications, Inc., and junior position relative to LFI's senior secured bank credit facility that is rated Ba1 (LGD2). Leverage within the Level 3 credit pool was around 4x (Moody's adjusted) as of June 30, 2017. The senior unsecured debt of Embarq is rated Ba2 (LGD3), reflecting a structurally senior (relative to CenturyLink) claim on the assets of Embarq, which had leverage of around 1x as of June 30, 2017. The senior secured debt of Embarq's operating subsidiary, Embarq Florida, Inc., is rated Baa3 (LGD2). The senior unsecured debt of Centel Capital Corporation is rated Ba2 (LGD3), in line with the unsecured debt at its guarantor, Embarq Corp. The principal methodology used in these ratings was Telecommunications Service Providers published in January 2017. CHARLES K. BRELAND: Bid to Limit Authority of Ch. 11 Trustee Nixed ------------------------------------------------------------------ Judge Jerry C. Oldshue of the U.S. Bankruptcy Court for the Southern District of Alabama entered an order denying Charles K. Breland's motion for entry of a stay limiting the authority of the Chapter 11 trustee pending appeal. On July 5, 2017, the Debtor appealed the Court's order appointing a Chapter 11 trustee on the grounds that doing so in an individual Chapter 11 case violates the Thirteenth Amendment of the United States Constitution. The Debtor requests this stay on the grounds that appellate reversal of this Court's order of appointment of a Chapter 11 trustee will result in the trustee never having had authority to enter into estate transactions as a trustee in the Debtor's case. Because of this potential reversal of authority, Debtor requests that the trustee be prohibited from entering into "any transactions regarding settlements with creditors in the case or with respect to sales of significant assets without the prior written consent of the Debtor." The granting of a motion to stay pending appeal is an "exceptional response granted only upon a showing of four factors: (1) that the movant is likely to prevail on the merits on appeal; (2) that absent a stay the movant will suffer irreparable damage; (3) that the adverse party will suffer no substantial harm from the issuance of the stay; and (4) that the public interest will be served by issuing the stay." With no legal or factual support sufficient to demonstrate that Debtor has a substantial likelihood of success on the merits on appeal, and given Debtor's own admission that a liquidation plan is most likely to be proposed, the Court finds that Debtor has failed to carry his burden on the first factor. The Debtor has also failed to prove how he will be irreparably harmed by the Trustee's actions when Congressional and constitutional due process safeguards are in place through the Bankruptcy Code and United States Constitution to protect him from any such alleged abuse of authority. Because Debtor has asserted from the inception of this case that his estate is solvent but illiquid and that a liquidation plan would eventually be proposed to pay all creditors in full, the Court finds that halting the administration of Debtor's estate pending appeal would harm adverse parties. A full-text copy of Judge Oldshue's Order dated Oct. 25, 2017, is available at: http://bankrupt.com/misc/alsb16-02272-769.pdf About Charles Breland Jr. Charles K. Breland filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ala. Case No. 16-02272) on July 8, 2016, and is represented by Eric Slocum Sparks, Esq. of Eric Slocum Sparks PC. A. Richard Maples, Jr. was appointed as Chapter 11 trustee for the Debtor. CHELSEA CRAFT: DOJ Watchdog Directed to Appoint Chapter 11 Trustee ------------------------------------------------------------------ Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York grants the motion of the General Partners of Chelsea Craft Brewing Company, LLC to appoint a chapter 11 operating trustee in the case of Chelsea Craft. The U.S. Trustee is directed to appoint a Chapter 11 trustee, with all of the rights, powers, and duties authorized under 11 U.S.C. sections 1104 and 1106. About Chelsea Craft Brewing Company Chelsea Craft Brewing Company, LLC operates a craft brewery and taproom located at 463 East 173rd Street, Bronx, New York. It is approximately 10,000 square feet in size and the existing lease has seven years remaining on its terms with a right to renew for an additional five years. An involuntary Chapter 7 bankruptcy petition was filed against the Debtor (Bankr. S.D.N.Y. Case No. 17-11459) on May 25, 2017. The petitioning creditors Valerie Alexander, Bart Alexander, Joanne Perona and Barbara A. Phelps are represented by Michael T. Sucher, Esq. Judge Sean H. Lane, who presides over the case, entered an order for relief on July 28, 2017. The court also entered an order converting the case to Chapter 11. The Debtor hired Morrison Tenenbaum, PLLC as its bankruptcy counsel and Pick & Zabicki LLP as its special transactions counsel. CONTINENTAL CASUALTY: Moody's Affirms (P)Ba1 Pref. Shelf Rating --------------------------------------------------------------- Moody's Investors Service has upgraded the insurance financial strength (IFS) ratings of Continental Casualty Company and members of its intercompany pool to A2 from A3. In the same action, Moody's has affirmed the debt ratings of CNA Financial Corporation (NYSE: CNA; senior unsecured at Baa2). The outlook for the ratings is stable. RATINGS RATIONALE According to Moody's, the upgrade of Continental Casualty Company and its property/casualty insurance affiliates reflects profitability improvement, particularly in its core commercial insurance operations coupled with strong capital adequacy, which can withstand significant stress scenarios. Moody's further noted that CNA's specialty insurance operations continue to perform well, and remain the group's most significant contributor to earnings and internal capital generation. CNA has strengthened its underwriting profitability in the group's commercial segment - including reducing claim volatility and shedding less profitable accounts in order to improve price-adequacy and claim-handling efficiency. The underlying combined ratio for the segment, excluding catastrophes and reserve development, has improved meaningfully to 96.3% in 2017 year-to-date from 98.5% for the same period in 2016, from above 100% in some prior years. Although catastrophe losses from Hurricanes Harvey and Irma contributed to an overall property/casualty underwriting loss for CNA's third quarter, net income for the quarter was positive and year-to-date underwriting results remained profitable through September. CNA's discontinued long term care insurance operations will remain a significant component of the group's balance sheet and risk profile, and Moody's noted that this long duration portfolio, with its attendant sensitivity to interest rates, inflation, morbidity, mortality and persistency assumptions, will remain capital intensive. CNA continues to file for and obtain rate increases, which have generally kept pace with recent loss trends but claim trends can be highly sensitive to the changing costs of care and utilization dynamics, and future rate increases may or may not be sufficient to keep pace. However, the rating agency believes that CNA's capitalization and enhanced operational processes, as it has taken the claims processing in-house, will help absorb long-term volatility from this line of business. The affirmation of CNA Financial's senior Baa2 debt rating primarily reflects structural subordination of the holding company's creditors relative to the policyholder obligations of Continental Casualty Company and its affiliated insurers, as well as the application of standard notching between the subsidiaries' IFS ratings and the parent's senior debt rating. Although Moody's views Loews Corporation (senior debt at A3 stable) as being a supportive parent company for CNA, the proximity of the two holding companies' ratings, together with the fact that CNA Financial itself is a significant source of credit strength for Loews, mitigates potential further benefit for CNA Financial's debt-holders, in Moody's view. The A2 IFS ratings of Continental Casualty Company and its affiliated are based on the company's major presence in US commercial and specialty insurance, its profitable specialty insurance operations and improving core commercial business, good risk-adjusted capitalization, sound liquidity and dividend capacity, and the historically stable and supportive parentage in Loews Corporation. These credit strengths are tempered in part by stiff competitive conditions in the group's commercial insurance segments -- in part given the group's higher cost structure relative to some of its industry peers, by intrinsic earnings volatility within the company's runoff lines of business (primarily long term care), including exposures to continued low interest rates, mortality, morbidity and long term policyholder lapse behavior, and by intrinsic claim reserve volatility associated with long-term casualty business. The ratings also consider CNA's underwriting exposures to natural and man-made catastrophes, though lower than more property-focused insurers. Factors that could lead to an upgrade include the following: 1) sustained improved underwriting performance (e.g. combined ratios in the low 90% range or below) in commercial insurance, together with continued strong profitability in the group's specialty insurance segment; 2) consolidated earnings coverage above 7x; and 3) significant de-risking or diminished size of long term care portfolio. Conversely, factors that could lead to an downgrade include the following: 1) a non-temporary decline in shareholders' equity of 10% or more (with adjustments for variability in unrealized investment gains/losses); 2) overall combined ratio consistently above 100%, and/or sustained earnings coverage below 4x; 3) adjusted financial leverage in excess of 30%; 4) annual adverse reserve development in excess of 3% of total reserves; or 5) a downgrade of Loews Corporation by more than one notch, or dividend payments by CNA's insurance subsidiaries to CNA Financial Corporation significantly in excess of the insurer's run-rate earnings. The following insurance financial strength ratings have been upgraded: American Casualty Company of Reading, Pennsylvania - to A2 from A3; Columbia Casualty Company - to A2 from A3; Continental Casualty Company - to A2 from A3; Continental Insurance Company - to A2 from A3; Continental Insurance Company of New Jersey - to A2 from A3; National Fire Insurance Company of Hartford - to A2 from A3; Transportation Insurance Company - to A2 from A3; Valley Forge Insurance Company - to A2 from A3. The following debt and shelf ratings have been affirmed: CNA Financial Corporation - senior unsecured at Baa2; senior unsecured shelf at (P)Baa2; subordinated shelf at (P)Baa3; junior subordinated shelf at (P)Baa3; preferred shelf at (P)Ba1. The outlook for the ratings is stable. CNA Financial Corporation is an insurance holding company that is principally engaged in providing domestic and international P&C insurance and ranks among the 15 largest P&C insurers in the US. CNA Financial Corporation is approximately 90% owned by Loews Corporation. For the first nine months of 2017, CNA Financial Corporation reported net income of $676 million and total revenues of $7.1 billion. As of September 30, 2017, the company reported total invested assets of $46.7 billion and shareholders' equity of $12.2 billion. The principal methodology used in these ratings was Global Property and Casualty Insurers published in May 2017. CUZCO DEVELOPMENT: Court Allows Yedang USA's Unsecured Claim ------------------------------------------------------------ On Sept. 19-22, 2017, the trial for the adversary proceeding captioned CUZCO DEVELOPMENT U.S.A., LLC, Plaintiff, v. YEDANG ENTERTAINMENT USA, INC., Defendant, Adv. Pro. No. 16-90032 (Bankr. D. Haw.), and an evidentiary hearing on the plaintiff's objection to the defendant's proof of claim in the main bankruptcy case was conducted. Cuzco USA commenced the adversary proceeding on July 19, 2016, to avoid the Yedang USA leases. Yedang USA filed an answer on August 19, 2016, and a counterclaim for breach of the leases, breach of the implied covenant of good faith and fair dealing, trespass, fraud, unjust enrichment, conversion, interference with prospective economic advantage, and for declaratory and injunctive relief. Yedang USA also filed, in the main bankruptcy case, a proof of claim asserting claims of (a) $2,700,000 for the Supermarket Lease, (b) $525,000 for early termination of the Retail Shops Lease, and (c) $1,184,2405 for money lent to Cuzco USA plus $328,861.83 of prepetition interest. The trial included Yedang USA's counterclaim in this adversary proceeding and Cuzco USA's objection to Yedang USA's proof of claim filed in the main case. Yedang USA asserts an unsecured claim in the amount of $1,393,705, based on its advances to Cuzco USA. Cuzco USA does not deny that it received this amount of money from Yedang USA. Cuzco USA offered no legal argument for the proposition that the loans can or should be recharacterized as capital contributions. Similarly, Cuzco USA offered no legal argument for the proposition that the Yedang USA loans should be subordinated to other claims. Because Cuzco USA has argued in the main case that it has sufficient assets to pay all claims in full, subordination of the Yedang USA claims would serve no purpose since they would be paid in full in any event. The portion of Yedang USA's claim based on the loans is an allowed unsecured claim. Regarding the other claims, the Court holds that Yedang USA's wrongful termination damages claim under the Supermarket Lease should be disallowed. Yedang USA is also not entitled to recover the lease premium under the Retail Shops Lease, and its claim for that amount should be disallowed. Further, Yedang USA failed to prove its claim for punitive damages. That portion of the claim should be also be disallowed. The bankruptcy case is in re: CUZCO DEVELOPMENT U.S.A., LLC, Chapter 11, Debtor, Case No. 16-00636 (Bankr. D. Haw.). A full-text copy of Judge Faris' Decision dated Oct. 20, 2017, is available at https://is.gd/deJt5c from Leagle.com. Cuzco Development U.S.A., LLC, Debtor, represented by Chuck C. Choi, CHOI & ITO -- cchoi@hibklaw.com -- and Allison A. Ito -- aito@hibklaw.com -- CHOI & ITO. Office of the U.S. Trustee, U.S. Trustee, represented by Curtis B. Ching, Office of The United States Trustee. About Cuzco Development Cuzco Development U.S.A., LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Hawaii Case No. 16-00636) on June 20, 2016. The petition was signed by Kay Nakano, responsible individual. The case is assigned to Judge Robert J. Faris. At the time of the filing, the Debtor estimated its assets and liabilities at $10 million to $50 million. The confirmation hearing on the Debtor's plan of reorganization is on Feb. 13, 2017. The TCR reported on Dec. 23, 2016, that Judge Faris approved the Debtor's first amended disclosure statement for its Chapter 11 plan of reorganization, dated Dec. 5, 2016, which proposed that the holder of an allowed general unsecured claims receive on account of its claim in full and complete satisfaction, discharge and release thereof: 100% of their allowed claims with post-petition interest at 3% simple interest per annum paid in full within 30 days after the Refinance deadline. DAVE 60 NYC: Seeks February 19 Plan Filing Exclusivity Extension ---------------------------------------------------------------- Dave 60 NYC Inc. requests the U.S. Bankruptcy Court for the Southern District of New York to extend the time within which (a) the Debtor has the exclusive right to file a plan of reorganization by 90 days through February 19, 2018; and (b) the Debtor must file its plan and disclosure statement (if any) by 90 days through and including February 19, 2018. The current Exclusivity Period expires on November 20, 2017. This is the Debtor's fourth request for an extension of the Exclusivity Period. The Debtor seeks the requested extension to ensure that the Court, the Debtor and other parties in interest are not distracted by the filing of any competing or premature plans. The Debtor believes that the requested extension will promote the orderly reorganization of the Debtor without the need to devote unnecessary time, money and energy to defending against or responding to a competing plan or filing a plan before it is ready. Since the Debtor's previous motion to extend the Exclusivity Period, the Debtor tells the Court that it continues to wait for the District Court to approve a settlement resolving its prepetition class action lawsuit based on wage claims from certain prepetition claims. While the Bankruptcy Court has approved the settlement, the District Court denied approval of the settlement, because of certain issues with respect to the releases for the named plaintiffs. The Debtor has moved for reconsideration and that motion is still pending. Additionally, the Debtor continues to engage the City of New York in discussions to resolve an outstanding prepetition tax liability, a determination of which, will determine the Debtor's exit strategy. Upon reconsideration and then approval of the class action litigation in the District Court as well as a resolution of the Debtor's outstanding tax liability with the City of New York, the Debtor avers that it will then be able to determine an appropriate exit strategy. While the Debtor is resolving its last remaining claims, the Debtor believes that it needs to maintain its Exclusivity Period and extend the Plan Filing Deadline, to avoid the possibility that a third-party may file a competing plan, while the Debtor is trying to resolve its remaining issues. About Dave 60 NYC Dave 60 NYC Inc. operates a holding company, which holds a non-managing 59.05% interest in an entity which operates a restaurant in Manhattan, Philippe by Philippe Chow. Dave 60 NYC Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 16-12146) on July 27, 2016. Judge Michael E Wiles presides over the case. The Debtor has employed Robinson Brog Leinwand Greene Genovese & Gluck P.C. as its counsel and Kenny Nachwalter, P.A. as its Florida special litigation counsel. No trustee, examiner or committee has been appointed in Debtor's Chapter 11 case. DPL INC: Moody's Affirms Ba3 Senior Unsecured Debt Rating --------------------------------------------------------- Moody's Investors Service Moody's Investors Service affirmed the Ba3 senior unsecured debt rating of DPL Inc (DPL) and Dolphin Sub II, Inc (assumed by DPL). Moody's also affirmed the ratings of The Dayton Power & Light Company (DP&L) including its Baa3 Issuer Rating and its Baa2 senior secured rating. The rating outlook of DPL and DP&L were changed to positive from negative. RATINGS RATIONALE The rating action reflects DPL's plans to progressively exit the coal-fired merchant generation business and the credit supportiveness of the Ohio regulatory environment. The affirmation factors in PUCO's recent authorization of DP&L's third Electric Security Plan (ESP-III) for the 2017-2023 period and the adoption of the key terms of the Amended Settlement Agreement executed in March 2017. On October 1, 2017, DP&L became a pure transmission and distribution (T&D) utility, while parent company DPL expects to complete the sale of its merchant coal-fired plants (2,000MW) by year-end 2018. DPL is also considering strategic alternatives for its merchant peaking units (1,000MW). These initiatives are lowering the group's business risk profile, and leading us to assess the financial performance of both companies using the guidelines and financial metrics provided under the low business grid in Moody's Regulated Electric and Gas Utilities Rating Methodology. DP&L's Baa3 Issuer Rating and positive outlook factor in Moody's expectation that the utility will be able to generate key credit metrics that remain robust for the Baa-rating category. Specifically, Moody's anticipate that its CFO pre-Working Capital (CFO pre-W/C) to debt will exceed 19% for the next several years. The key terms of the utility's recently authorized ESP-III and the Amended Settlement Agreement drive this expectation. DPL will use amounts collected under the Distribution Modernization Rider (DMR) of $105 million p.a. for at least three years (subject to an extension for additional two years) largely to deleverage the group's capital structure. The material amount of holding company debt, currently equivalent to around 60% of total debt, further limits the financial flexibility of both DPL and DP&L, and tempers the ratings. This debt also explains the material difference between the utility's relatively strong and the weaker consolidated credit metrics, including the elevated debt to total capitalization in excess of 140%. DPL's positive outlook anticipates a slow but steady improvement in the consolidated CFO pre-W/C to debt, after it dropped to around 8% at year-end 2016, so that it eventually becomes better positioned within the Ba-rating category. Liquidity The February 2017 amendment of DP&L's financial documentation, including its revolving credit agreement, excluded non-cash charges directly related to impairments of the company's coal-fired generation assets from the total debt to total capitalization covenant (June 2017: 52%) through 31 March 2018. Importantly, the amendment also extended the period during which compliance with the Total Capitalization covenant will remain suspended to October 2018, after the utility completes the generation separation because DP&L's long-term debt indebtedness does not exceed $750 million. DPL has its own separate $205 million committed credit facility in place that expires in 2020 (and can be increased by additional $95 million). Borrowings under this facility are subject to conditionality including a material adverse change clause. DPL's positive outlook also anticipates that the improvement in DPL's financial performance will allow it to comply more comfortably with the two financial covenants embedded in its financial documentation, including its committed credit facility, namely maximum total debt to EBITDA of 7.5x (June 2017: 7.0x) and EBITDA to Interest of at least 2.1x (June 2017: 2.5x). FACTORS THAT COULD LEAD TO AN UPGRADE An upgrade of the ratings of DPL and DP&L could occur following DPL's successful exit of its coal-fired merchant operations. An upgrade could also be considered if the company makes a strategic decision regarding the peaking units and there is a credit supportive outcome of DP&L's pending rate case. Specifically, if DPL is able to generate consolidated CFO pre-W/C to debt in excess of 9%, and DP&L progressively improves its regulatory capital structure and debt to book capitalization such that it will approximate 60% by 2019. FACTORS THAT COULD LEAD TO A DOWNGRADE Given the positive outlooks on DPL and DP&L, there are limited prospects for a downgrade. However, an adverse outcome of DP&L's rate case and/or an unexpected material deterioration of the credit metrics of the utility and/or DPL would likely trigger negative rating momentum. Specifically, if DPL's consolidated CFO pre-W/C to debt falls below 5% and/or if DP&L's debt to book capitalization continues to exceed 65%, a downgrade could be considered The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in June 2017. Headquartered in Dayton, Ohio, DPL Inc. (DPL) is a holding parent company that wholly-owns the pure T&D, The Dayton Power and Light Company (DP&L). The group also includes AES Ohio Generation LLC (unrated) that owns the group's generation assets including DP&L's coal-fired facilities transferred on October 1, 2017 as well as the captive insurance company Miami Valley Insurance Company. DPL is a subsidiary of The AES Corporation (AES: Ba2 Corporate Family Rating, stable), a globally diversified power holding company. ELLINGTON TRUCKING: November 15 Plan Confirmation Hearing --------------------------------------------------------- Judge Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana conditionally approved the disclosure statement filed by Ellington Trucking LLC on October 2, 2017. A hearing to consider confirmation of the plan and any objection or modification to the plan will be held on November 15, 2017 at 10:00 a.m. Any objection to the disclosure statement, as well as to the confirmation of the plan must be filed and served on or before November 1. Any ballot accepting or rejecting the plan must be delivered to the plan proponent on or before November 1, 2017. The plan proponent must tabulate the ballots, certify the ballot report, and file both the ballot report and the certification no later than 3 days before the confirmation hearing. Any proof of claim or interest pursuant to Fed.R.Bankr.P. 3003(c)(3), must be filed on or before November 1, 2017. About Ellington Trucking LLC Ellington Trucking LLC filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 17-00781), on Feb. 15, 2017. The Petition was signed by its authorized representative, Sharon E. Harris. The Debtor is represented by David R. Krebs, Esq., at Hester Baker Krebs LLC. At the time of filing, the Debtor had $0 to $50,000 in estimated assets and $100,000 to $500,000 in estimated liabilities. EMMANUEL'S AUTO SALES: Seeks to Hire Ordinary Course Professionals ------------------------------------------------------------------ Emmanuel's Auto Sales and Service Inc. has filed a motion seeking approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire professionals used in the ordinary course of business. The request, if granted, would allow the Debtor to hire "ordinary course professionals" without filing separate employment applications. The Debtor's current OCPs are: Name of OCPs Services Avg. Monthly Invoice ------------ -------- -------------------- Law Office of Attorney used in $2,500 Naureen Charania the regular course of business Samuel Appiah PC Accountant $350 In the same filing, the Debtor also seeks approval to pay, without formal application to the court, 100% of the interim fees and disbursements to each OCP so long as they do not exceed $2,500 per month per OCP and do not exceed $25,000 per OCP for the duration of the case. About Emmanuel's Auto Sales and Service Emmanuel's Auto Sales and Service Inc. is a used car sales and automotive services company. It was incorporated in 2004 and is authorized to do business in Texas. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-33209) on August 23, 2017. Emmanuel Osei Mainoo, its director, signed the petition. At the time of the filing, the Debtor disclosed that it had estimated assets and liabilities of less than $500,000. Judge Harlin D. Hale presides over the case. M. Tayari Garrett, Esq., at Tayari Law PLLC, is the Debtor's bankruptcy counsel. The Debtor's real property located at 2546 Beltline Road, Grand Prairie, Texas, is allegedly encumbered by a deed of trust, which it seeks to resolve through this bankruptcy. FAUSER OIL: Has Until November 22 to File Reorganization Plan ------------------------------------------------------------- Judge Thad J. Collins of the U.S. Bankruptcy Court for the Northern District of Iowa has extended the deadlines for Fauser Oil Co., Inc. and its affiliates to file a Chapter 11 plan to November 22, 2017 and to solicit acceptances of such plan to January 22, 2018. The Court also ruled that if the Debtor files by November 15 a third motion to extend the deadlines, then the deadlines will automatically be extended until the Court acts on the third motion, without the necessity for the entry of a bridge order. The Troubled Company Reporter has previously reported that the Debtors asked the court to further extend the exclusivity periods for filing a Chapter 11 Plan of Reorganization and for soliciting acceptances of the filed plan to December 21, 2017 and February 21, 2018, respectively. The Debtors claimed that the complexity of these cases, the number of related debtors, the number and amount of the various claims filed, and the adjustment to operating the remaining core business, all constitute good cause for the Debtors' request for further extension. The Debtors told the Court that since the date of filing the First Exclusivity Extension Motion, they have successfully negotiated the sale of substantially all of the assets of Debtors Fauser Oil Co. and Ron's L.P. The sale received Court approval by Order dated September 19, and the sale itself closed on September 29. The Debtors anticipated that the majority of their creditors' claims will be paid from the proceeds of sale. Further, the Debtors intended to take action to pay creditors a portion of their allowed claims through an interim distribution before the end of the year. The Debtors also said they needed more time to complete their claims analysis and determine the disposition of the remaining assets of their estates. Accordingly, the requested extension will allow the Debtors the time to quantify allowed claims and to provide the process to pay their creditors in full, which are necessary to formulate a confirmable chapter 11 plan in an orderly manner which will be of substantial benefit to the estate and the Debtors' creditors. About Fauser Oil Co. Elgin, Iowa-based Fauser Energy Resources, Inc. -- http://www.fauserenergy.com/-- supplies and delivers propane and fuel products to residential and commercial customers throughout the Midwest region of the U.S. Fauser Oil Co. Inc., Fauser Energy Resources Inc., Fauser Transport Inc. and Ron's L.P. Gas Service LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Iowa Lead Case No. 17-00466) on April 24, 2017. Paul Fauser, president, signed the petition. On July 7, 2017, the Court entered an order jointly administering all of the Debtors' Cases. At the time of the filing, Fauser Energy estimated its assets and debt at $1 million to $10 million. Judge Thad J. Collins presides over the case. Sweet DeMarb LLC serves as counsel to the Debtors, with the engagement led by James D. Sweet, Esq., and Rebecca R. DeMarb, Esq. Yara El-Farhan Halloush, Esq., of Halloush Law Office, P.C., is the Debtors' local co-counsel. Ravinia Capital LLC is the Debtor's investment banker and financial advisor. On May 12, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors for Fauser Oil. No creditors' committee has been appointed for the other Debtors. The Fauser Oil Committee retained Pepper Hamilton as legal counsel and Cutler Law Firm, P.C., as associate counsel. FREEDOM MORTGAGE: Moody's Assigns B2 Senior Unsec. Bonds Rating --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Freedom Mortgage Corporation's senior unsecured bond and affirmed the company's B1 senior secured and corporate family ratings. The outlook on all ratings is stable. Assignments: Issuer: Freedom Mortgage Corporation -- Senior Unsecured Regular Bond/Debenture, Assigned B2, stable Affirmations: Issuer: Freedom Mortgage Corporation -- Corporate Family Rating, Affirmed B1, stable -- Senior Secured Bank Credit Facility, Affirmed B1, stable Outlook Actions: Issuer: Freedom Mortgage Corporation -- Outlook, Remains Stable RATINGS RATIONALE On October 31, 2017, the company announced it would issue $400 million of senior unsecured debt. The B2 senior unsecured bond rating reflects the subordination of the company's senior unsecured bond to the firm's secured indebtedness. The ratings reflect the company's strong profitability with net income to assets above 4% per annum over the last several years and solid capital level with tangible common equity (TCE) to tangible managed assets (TMA) of 18.7% as of Q2 2017; pro-forma including the senior unsecured debt, TCE to TMA falls to just over 17.5%. Risk factors offsetting these positive attributes include Freedom's rapidly growing servicing portfolio and key man risk with respect to its President and CEO Stanley Middleman. The company expects to almost double its servicing portfolio in 2017 to just under $200 billion from approximately $100 billion as of year-end 2016, resulting in increased economies of scale. However, such rapid growth can lead to operational deficiencies negatively impacting financial performance. The stable outlook reflects Moody's expectation that the company will be able to maintain its strong profitability and solid capital level. Positive ratings pressure would occur over the next 24 months if Freedom can maintain its strong profitability and solid capital levels with net income to managed assets above 5% and tangible common equity to assets above 20%, as aggregate US mortgage origination volumes decline and purchase mortgages comprise a larger percentage of the market in connection with rising interest rates. In addition, positive ratings pressure would also occur if Freedom extended the maturity of its 364 day warehouse facilities as well as continued to diversify its funding. The ratings could be downgraded if financial performance deteriorates - for example, if net income to managed assets falls consistently below 3.5%, if leverage increases such that the company's tangible common equity to tangible managed assets falls below 15%, or in the event of material negative regulatory actions or disclosure of a material operating weakness. The principal methodology used in these ratings was Finance Companies published in December 2016. FRONTIER COMMUNICATIONS: Bank Debt Trades at 4.99% Off ------------------------------------------------------ Participations in a syndicated loan under Frontier Communications is a borrower traded in the secondary market at 95.01 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.18 percentage points from the previous week. Frontier Communications pays 375 basis points above LIBOR to borrow under the $1.5 billion facility. The bank loan matures on June 1, 2024 and carries Moody's B1 rating and Standard & Poor's BB- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. GABRIELLE LAVERNE BROWN: PCO Files 4th Report --------------------------------------------- Joseph Rodrigues, the Patient Care Ombudsman appointed for Gabrielle Laverne Brown, dba Sonoma Serenity Home, filed a fourth report with the U.S. Bankruptcy Court for the Northern District of California. Based upon the events reported in the PCO's second report to the court dated July 7, 2017, the California Department of Social Services, Community Care Licensing obtained a Temporary Suspension Order on Friday, July 7, 2017. This TSO necessitated that all residents leave the facility and relocate to other facilities. This TSO also removed the ability of the facility to legally have any new residents in the home receiving care. Since that date, no residents have been in care at the facility. CCL conducted a follow-up Legal/Non-Compliance Case Management visit on Sept. 26, 2017. There were no residents in care. The licensee is scheduled for an Administrative Hearing in November 2017. As no residents are in care, the Patient Care Ombudsman has no recommendations for the court at this time. A full-text copy of the Fourth PCO Report dated Oct. 24, 2017, is available at: http://bankrupt.com/misc/canb17-10255-81.pdf About Gabrielle Laverne Brown Gabrielle Laverne Brown filed a pro se Chapter 11 petition (Bankr. N.D. Cal. Case No. 17-10255) on April 6, 2017. Pursuant to the order directing the appointment of a Patient Care Ombudsman entered by this court on April 7, 2017, Tracy Hope Davis, the United States Trustee, duly appointed Joseph Rodrigues as the Patient Care Ombudsman in this case. GENERAL NUTRITION: Bank Debt Trades at 5.44% Off ------------------------------------------------ Participations in a syndicated loan under Acosta Inc. is a borrower traded in the secondary market at 94.56 cents-on-the-dollar during the week ended Friday, October 20, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.44 percentage points from the previous week. General Nutrition pays 250 basis points above LIBOR to borrow under the $1.35 billion facility. The bank loan matures on Mar. 2, 2019 and carries Moody's Ba3 rating and Standard & Poor's BB- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 20. GETTY IMAGES: Bank Debt Trades at 12.67% Off -------------------------------------------- Participations in a syndicated loan under Getty Images Inc is a borrower traded in the secondary market at 87.33 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 2.25 percentage points from the previous week. Getty Images Inc pays 350 basis points above LIBOR to borrow under the $1.900 billion facility. The bank loan matures on Oct. 14, 2019 and carries Moody's B3 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. GOLDEN MARINA: Court Confirms Third Amended Plan of Reorganization ------------------------------------------------------------------ The Hon. Donald S. Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois confirmed Golden Marina Causeway, LLC's Third Amended Plan of Reorganization, as amended on May 12, 2017. Cliff's Mining has withdrawn its objection to the Plan and the Disclosure Statement, and thus there are no objections to the confirmation of the plan or the approval of the disclosure statement. On May 26, 2017, Cliff's Mining filed against East Greenfield Investors LLC an involuntary petition for relief under Chapter 7 of the Bankruptcy Code (Case No. 17-16364). The Debtor filed a motion to Approve Settlement Agreement Related to East Greenfield Investors, which included a copy of a document termed the Bankruptcy Settlement Agreement, on August 31, 2017. The Debtor is required to disburse $200,000 of the proceeds of the sale of the Golden Marina Property to the Escrow Account within the later of 3 days after: (a) the Effective Date of the Plan; (b) the entry of an order that has become final dismissing the Involuntary Petition with prejudice; and (c) the entry of an order that has become final approving the Settlement, and prior to making the distribution under the Plan on account of the Barry Trust Secure Claim as classified in Class 2. The Plan has been further amended to incorporate the other portions of Section 4 of the Bankruptcy Settlement Agreement memorializing the Settlement, including those relating to the obligations of the Debtors with respect to funds remaining in the Escrow Account upon the termination of the Escrow Agreement. The case will be set for a post-confirmation status on November 28, 2017 at 10:00 a.m. William J. Factor, Esq. Jeffrey K. OPaulsen, Esq. FACTOR LAW 105 W. Madison, Suite 1500 Chicago, IL 60602 Tel: (847) 239-7248 Fax: (847) 574-8233 Email: wfactor@wfactorlaw.com jpaulsen@wfactorlaw.com About Golden Marina Causeway, LLC Golden Marina Causeway LLC owns two parcels of real estate, located at 302 and 311 East Greenfield Avenue in Milwaukee, Wisconsin. The parcel at 311 E. Greenfield consists of 47 acres and the smaller parcel at 302 E. Greenfield is approximately 1 acre. Golden Marina Causeway, LLC, based in Downers Grove, Illinois, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 16-03587) on Feb. 5, 2016. The petition was signed by Lawrence D. Fromelius, manager. The Debtor is represented by Jeffrey K. Paulsen, Esq., at The Law Office of William J. Factor, Ltd. The Debtor also hired Nijman Franzetti LLP as special counsel. Golden Marina's case was assigned to Judge Carol A. Doyle, and later transferred to the chambers of Judge Donald R. Cassling. Golden Marina estimated assets and liabilities at $1 million to $10 million at the time of the filing. Lawrence D. Fromelius filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 15-22373) on June 29, 2015. On July 2, 2015, L. Fromelius Investment Properties LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code under Case No. 15-22943. Mr. Fromelius is the sole member of Investment Properties. He is also the sole member of East Greenfield Investors LLC, which in turn is the sole member of Golden Marina Causeway LLC. GULFMARK OFFSHORE: Incurs $24.6 Million Net Loss in Third Quarter ----------------------------------------------------------------- Gulfmark Offshore, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $24.64 million on $25.80 million of revenue for the three months ended Sept. 30, 2017, compared to a net loss of $24.72 million on $27.82 million of revenue for the three months ended Sept. 30, 2016. For the nine months ended Sept. 30, 2017, Gulfmark reported a net loss of $190 million on $74.80 million of revenue compared to a net loss of $163.49 million on $97.10 million of revenue for the same period during the prior year. As of Sept. 30, 2017, Gulfmark had $1.07 billion in total assets, $173.80 million in total liabilities (current), $448.12 million in liabilities subject to compromise and $309.29 million in total stockholders' equity. According to the Company, "Our ongoing liquidity requirements are generally associated with our need to service debt, fund working capital, maintain our fleet, and, when market conditions are favorable, finance the construction of new vessels and acquire or improve equipment or vessels. Bank financing, proceeds from the issuance of debt and equity, and internally generated funds have historically provided funding for these activities. Internally generated funds are directly related to fleet activity and vessel day rates, which are generally dependent upon the demand for our vessels which is ultimately determined primarily by the supply and demand for offshore drilling for crude oil and natural gas." "Delays in any Chapter 11 proceedings increase the risks of our inability to reorganize our business and emerge from bankruptcy and may increase our costs associated with the bankruptcy process. "These risks and uncertainties could affect our business and operations in various ways. For example, negative publicity associated with any Chapter 11 proceedings could adversely affect our relationships with our vendors, suppliers, service providers, customers, employees and other third parties, which in turn could adversely affect our operations and financial condition. In particular, critical suppliers, vendors and customers may determine not to do business with us due to any Chapter 11 proceedings. In addition, certain transactions may also require the consent of lenders under a debtor-in-possession financing. Also, during the pendency of any Chapter 11 proceedings, we will need the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. Additionally, losses of key personnel or erosion of employee morale could have a material adverse effect on our ability to meet customer expectations, thereby adversely affecting our business and results of operations. The failure to retain or attract and maintain members of our management team and other key personnel could impair our ability to execute our strategy and implement operational initiatives, thereby having a material adverse effect on our financial condition and results of operations. Because of the risks and uncertainties associated with a voluntary filing for relief under Chapter 11 of the Bankruptcy Code and the related proceedings, we cannot accurately predict or quantify the ultimate impact that events that occur during our Chapter 11 proceedings may have on our business, financial condition and results of operations, and there is no certainty as to our ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: https://is.gd/Zps5kJ About Gulfmark Offshore GulfMark Offshore, Inc., a Delaware corporation, was incorporated in 1996. The Company provides offshore marine support and transportation services primarily to companies involved in the offshore exploration and production of oil and natural gas. The Company's vessels transport materials, supplies and personnel to offshore facilities, and also move and position drilling and production facilities. The majority of the Company's operations are conducted in the North Sea, offshore Southeast Asia and offshore the Americas. The Company currently operates a fleet of 73 owned or managed offshore supply vessels, or OSVs, in the following regions: 30 vessels in the North Sea, 13 vessels offshore Southeast Asia, and 30 vessels offshore the Americas. GulfMark Offshore, Inc., filed for bankruptcy protection (Bankr. D. Del., Case No. 17-11125) on May 17, 2017. Quintin V. Kneen, president and chief executive officer, signed the petition. The Company reported total assets of $1.07 billion and total debt of $737.1 million as of March 31, 2017. Mark D. Collins, Esq., Zachary I. Shapiro, Esq., Brett M. Haywood, Esq. and Christopher M. De Lillo, Esq., of Richards, Layton & Finger, P.A., as well as Gary T. Holtzer, Esq., Ronit J. Berkovish, Esq., and Debora A. Hoehne, Esq., of Weil Gotshal & Manges LLP serve as counsel to the Debtor. The Debtor has also tapped Blank Rome LLP as corporate counsel; Alvarez & Marsal North America, LLC as financial advisor; Evercore Group L.L.C. as investment banker; Ernst & Young LLP as restructuring consultant; KPMG US LLP as auditor and tax consultant; and Prime Clerk LLC as claims and noticing agent. INFINITE HOLDINGS: Taps Selwyn D. Whitehead as Legal Counsel ------------------------------------------------------------ Infinite Holdings, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire the Law Offices of Selwyn D. Whitehead as its legal counsel. Whitehead will, among other things, advise the Debtor regarding its duties under the Bankruptcy Code; assist in the negotiation of financing agreements; give legal advice regarding any potential property disposition; and prepare a Chapter 11 plan of reorganization. The firm's hourly rates are: Selwyn Whitehead, Esq. $400 Paralegal $125 Bookkeeper/Accountant $80 The firm received a retainer from the Debtor in the amount of $20,000, plus $1,717 for the filing fees. Selwyn Whitehead, Esq., disclosed in a court filing that she does not hold any interest adverse to the interest of the Debtor's estate, creditors or equity security holders. The firm can be reached through: Selwyn D. Whitehead, Esq. Law Offices of Selwyn D. Whitehead 4650 Scotia Avenue Oakland, CA 94605 Phone: 510-632-7444 Fax: 510-856-5180 Email: selwynwhitehead@yahoo.com About Infinite Holdings Inc. Infinite Holdings, Inc. owns condominium units located at 2421 Telegraph Avenue, Oakland, California, valued at $1.34 million. The Telegraph Retail Condos total 3,370 square feet and are comprised of three individual commercial condominiums, each unit is currently occupied. Its gross revenue amounted to $95,612 in 2016 and $78,668 in 2015. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 17-42625) on October 18, 2017. Steven K. Peterson, its president and CEO, signed the petition. At the time of the filing, the Debtor disclosed $1.35 million in assets and $1.14 million in liabilities. Judge Charles Novack presides over the case. INTREPID POTASH: Reports Third Quarter Net Loss of $1.9 Million --------------------------------------------------------------- Intrepid Potash, Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.90 million on $32.06 million of sales for the three months ended Sept. 30, 2017, compared to a net loss of $18.24 million on $43.64 million of sales for the three months ended Sept. 30, 2016. For the nine months ended Sept. 30, 2017, the Company reported a net loss of $21.52 million on $124.30 million of sales compared to a net loss of $50.06 million on $168.76 million of sales for the same period during the prior year. Intrepid reported a net loss of $66.63 million for the year ended Dec. 31, 2016, following a net loss of $524.8 million for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Intrepid had $507.82 million in total assets, $104.32 million in total liabilities and $403.50 million in total stockholders' equity. "We continue to successfully execute on our strategy to diversify our income streams, improve our potash margins, and grow our Trio sales volumes," said Bob Jornayvaz, Intrepid's executive chairman, president and CEO. "By focusing on what we can control through a challenging part of the cycle, we have made improvements in potash profitability and increased Trio sales both domestically and abroad. We also doubled our water sales for the second consecutive quarter. As a result of our disciplined approach, we have greatly reduced our outstanding debt levels and improved our performance such that going forward we will pay the lowest interest rates provided under our senior notes." Jornayvaz continued, "Looking ahead, we continue to focus on growing water and by-product sales and remain on track to meet our goal of at least $20 million to $30 million in water sales during 2018. Building upon our success in driving more stable cash flow streams through diversification, we continue to explore additional opportunities for growth." During the third quarter and first nine months of 2017, the potash segment generated gross margins of $5.0 million and $11.4 million, respectively, an increase of $12.3 million and $35.9 million compared with the same periods in 2016, respectively. These improvements were the result of the transition to lower-cost solar-only production and an increase in average net realized sales price per ton. During the quarter, Intrepid continued its strategy of selectively selling to higher-margin sales locations and customers. This, combined with increases in the market price for potash, increased average potash net realized prices per ton by 30% and 19% for the third quarter and first nine months of 2017, respectively, compared with the same periods in 2016. Potash production increased 8% compared to the third quarter of 2016 as earlier start-up of the solar production facilities offset the idling of the West facility in July 2016. Potash production for the first nine months of 2017 decreased 38% compared to prior year, primarily due to the idling of the West facility and the transition to Trio-only production at the East facility. The reduced potash production profile decreased sales volumes in the third quarter and first nine months of 2017 by 52% and 49%, respectively, compared to the year-ago comparable periods. Cash balance was $1.7 million as of Sept. 30, 2017. Cash provided by operations activities increased to $2.5 million and $14.1 million for the third quarter and first nine months of 2017, respectively, compared to prior year periods. During the third quarter, Intrepid repaid $6.0 million in outstanding senior note principal, bringing total senior note repayments to $75 million since December 31, 2016. No further repayments are required under the note agreement for the remainder of 2017. As of Sept. 30, 2017, Intrepid had $60 million outstanding under its senior notes and $22.5 million available for borrowing under its asset-backed credit facility. Intrepid issued 0.5 million shares of common stock under its at-the-market offering program during the third quarter and first nine months of 2017, generating net cash proceeds of $1.9 million which were used for general corporate purposes. A full-text copy of the Form 10-Q is available for free at: https://is.gd/5GucCw About Intrepid Intrepid Potash (NYSE:IPI) -- http://www.intrepidpotash.com/-- is the only U.S. producer of muriate of potash. Potash is applied as an essential nutrient for healthy crop development, utilized in several industrial applications and used as an ingredient in animal feed. Intrepid also produces a specialty fertilizer, Trio, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. Intrepid also sells water and by-products such as salt, magnesium chloride, and brine. Intrepid serves diverse customers in markets where a logistical advantage exists; and is a leader in the utilization of solar evaporation production, one of the lowest cost, environmentally friendly production methods for potash. Intrepid's production comes from three solar solution potash facilities and one conventional underground Trio mine. IREP MONTGOMERY-MRF: Needs More Time to Close Asset Sale, File Plan ------------------------------------------------------------------- IREP Montgomery-MRF LLC requests the U.S. Bankruptcy Court for the Middle District of Alabama to extend by 90 days the exclusive period to file a Chapter 11-exit plan, as well as the period in which the Debtor has to gain acceptance of the plan by 90 days. The Debtor relates that, prior to filing the case, it has negotiated an asset purchase agreement with the City of Montgomery and the Municipal Solid Waste Disposal Authority, as the Debtor intends to sell its assets under 11 U.S.C. Section 363 utilizing the City and the Authority as a "stalking horse bidder" under the APA. The Debtor asserts that prior to the commencement of this case, some 20 different companies had expressed an interest in operating or purchasing the Facility -- a mixed materials recovery facility. Accordingly, the Debtor contends that given the number of parties already interested in the Facility, the parties envisioned that the 363 motion would be filed quickly after the commencement of the case and the Debtor would be able to assess fairly whether a plan might be beneficial. Since the bankruptcy filing, the Debtor tells the Court, the Tien Trust has taken an active role in the case in hopes of generating further interest in the Facility. The Tien Trust has hired a consulting firm to examine the Facility and to try and generate further interest. Moreover, the Debtor relates that its representatives and the City have met with the representatives of the Tien Trust, have produced documents requested, and are producing further documents. Moreover, the Tien Trust commenced on adversary proceeding in which it sought to subordinate the claim of the Tien Trust to all unsecured creditors. The trial for the 363 Motion and related matters was set for October 25-27, 2017. The Tien Trust and the City have settled, and the Court has continued the hearing on the 363 Motion. Accordingly, the Debtor submits that it is appropriate for the Court to extend the exclusivity period beyond the anticipated next setting for the 363 Motion. About IREP Montgomery-MRF Based in Montgomery, Alabama, IREP Montgomery-MRF, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ala. Case No. 16-32279) on Aug. 20, 2016. The petition was signed by Kyle Mowitz, manager. The case is assigned to Judge Dwight H. Williams Jr. At the time of the filing, the Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. The Debtor is represented by Clyde Ellis Brazeal, III, Esq., at Jones Walker LLP. JACKSONVILLE BEAUTY: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case of Jacksonville Beauty Institute, Inc. as of Oct. 30, according to a court docket. About Jacksonville Beauty Institute Jacksonville Beauty Institute Inc. has operated as a cosmetology school providing education and training for students seeking to become state board certified cosmetologists in the areas of hair, skin care and nail care since 1997. As of the Petition Date the Debtor leased and operates in two commercial locations, with the Debtor's administrative offices and headquarters being located at the Jacksonville, Florida location: (a) 5045 Soutel Drive, Suite 80, Jacksonville, Florida 32208; and (b) 5014 E. Busch Boulevard, Unit 103, Tampa, Florida 33617. Prior to the Petition Date, the Debtor operated at 6801 A&B W. Colonial Drive, Orlando, Florida 32818, however, has already moved out of that location. Jacksonville Beauty Institute sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 17-03022) on Aug. 17, 2017, estimating assets of less than $100,000 and liabilities of less than $1 million. Judge Jerry A. Funk presides over the case. Kevin B. Paysinger, Esq., and William B. McDaniel, Esq., at Lansing Roy P.A., serve as the Debtor's bankruptcy counsel. No trustee or examiner has been appointed in the Debtor's case. JC PENNEY: Bank Debt Trades at 4.70% Off ---------------------------------------- Participations in a syndicated loan under JC Penney is a borrower traded in the secondary market at 95.30 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 1.03 percentage points from the previous week. JC Penney pays 425 basis points above LIBOR to borrow under the $1.688 billion facility. The bank loan matures on June 15, 2023 and Moody's Ba2 rating and Standard & Poor's BB- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. KENTISH TRANS: Plan Payments to be Funded by Continued Operations ----------------------------------------------------------------- Kentish Transportation, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Alabama a Second Amended Chapter 11 Plan of Reorganization dated October 3, 2017. Under the Plan, Class 1 consists of these allowed secured claims: (a) Claim No. 3 of Ford Motor Credit Company, LLC, in the amount of $15,691.24, which will be amortized over 60 months and will accrue interest at 5.25%; (b) Claim No. 5 of Ford Motor Credit Company, LLC, in the amount of 48,696.33, which the Debtor seeks to reduce the interest rate from 6.89% to 5.25%, per annum and will be amortized over 60 months; (c) Claim No. 8 of Ford Motor Credit Company, LLC, in the amount of 51,877.41, which the Debtor seeks to reduce the interest rate from 6.89% to 5.25%, per annum, and will 60 months; (d) Claim No. 20 of BancorpSouth Bank in the amount of $47,000, which will be amortized over 60 months and accrue interest at 5.25%; (e) Claim No. 21 of BancorpSouth Bank in the amount of $15,600, which will be amortized over 60 months and will accrue interest at 4.75%; (f) Claim of Premium Assignment Corporation in the amount of $41,252, which amount includes $5,697.60 of PAC's reasonable attorneys' fees pursuant to Section 506(b) of the Bankruptcy Code. The Debtor will pay this claim, in part, through the payment of PAC's super-priority administrative expense claim; and (g) Claim of Progress Bank & Trust in the amount of $49,171.98, which will be amortized over sixty months and will accrue interest at 5.25%. Class 2 consists of the allowed unsecured claims. Holders of the allowed unsecured claim will be paid from 50% of the Net Plan Profits of the Debtor for five years or until paid in full. However, if unsecured debts are not paid in full by the end of year five, any remaining balance will balloon at the end of year six and be due and payable by the Debtor at that time. The Plan will be funded by the operations of the Debtor. The changes implemented by the Debtor in reducing its fleet and creating a more efficient delivery system should provide ample revenue to support the expenses contemplated going forward. A full-text copy of the Second Amended Chapter 11 Plan of Reorganization dated October 3, 2017, is available for free at http://tinyurl.com/yc98pcdw Attorney for the Debtor: Stuart M. Maples, Esq. MAPLES LAW FIRM, PC 200 Clinton Avenue West, Suite 1000 Huntsville, Alabama 35801 Telephone: (256) 489-9779 Facsimile: (256) 489-9720 Email: smaples@mapleslawfirmpc.com About Kentish Transportation Kentish Transportation, Inc., formerly known as KTI Express Courier, based in Huntsville, Alabama, is a transportation and logistics company that specializes in on demand and routed type services. The Debtor's area of service is concentrated in Alabama but can go as far out as 150 to 300 miles outside state lines. The Debtor delivers anything from an envelope to large boxes and pallets. Its services are in demand from companies that need delivery and do not want the costs associated with hiring and maintaining employees and equipment. The Debtor filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 17-80242) on Jan. 25, 2017. The Hon. Clifton R. Jessup, Jr., presides over the case. Stuart M Maples, Esq., at Maples Law Firm, PC, serves as bankruptcy counsel to the Debtor. In its petition, the Debtor declared $99,948 in total assets and $1.11 million intotal liabilities. The petition was signed by Cecilio Kentish, Jr., president/CEO. KHAWAJA PARTNERS: Taps Nima Taherian as Legal Counsel ----------------------------------------------------- Khawaja Partners, Ltd. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire the Law Office of Nima Taherian as its legal counsel. The Debtor requires the firm to "prosecute and defend its interests in regards to the property of the estate." Nima Taherian, Esq., the attorney who will be handling the Debtor's Chapter 11 case, will charge an hourly fee of $400. The attorney received a retainer in the sum of $1,000. In a court filing, Mr. Taherian disclosed that his firm does not hold any interest adverse to the Debtor's estate, creditors or equity security holders; and that it is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Nima Taherian, Esq. Law Office of Nima Taherian 701 N. Post Oak Rd, Ste 216 Houston, TX 77024 Tel: 713-540-3830 Fax: 713-862-6405 About Khawaja Partners Ltd. Khawaja Partners, Ltd. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 13-35654) on September 10, 2013. At the time of the filing, the Debtor disclosed that it had estimated assets of less than $1 million and liabilities of less than $100,000. Judge Karen K. Brown presides over the case. At the time of the 2013 filing, the Debtor hired Thomas W. Graves, Esq., at Adair & Myers PLLC, as its bankruptcy counsel. The Debtor previously filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 11-34884) on June 6, 2011. It was represented by Joan Kehlhof, Esq., at Wist Holland & Kehlhof, in the 2011 proceedings. LSB INDUSTRIES: Amends Board Representation and Standtill Pact -------------------------------------------------------------- LSB Industries, Inc., entered into an amendment to the Board Representation and Standstill Agreement, dated Dec. 4, 2015, with LSB Funding LLC (the "Purchaser"), Security Benefit Corporation, Todd Boehly, Jack E Golsen, Steven J. Golsen, Barry H. Golsen, Linda Golsen Rappaport, Golsen Family LLC, SBL LLC and Golsen Petroleum Corp. The Board Representation and Standstill Agreement, as amended, provides that: "For so long as the board of directors of the Company consists of nine or fewer directors, until the first date on which the Purchaser and its affiliates, collectively, no longer beneficially own at least 10% of the common stock, par value $0.10, of the Company issuable upon exercise of the warrants issued in connection with that certain Securities Purchase Agreement, dated Dec. 4, 2015, by and among the Company, the Purchaser and Security Benefit Corporation (whether owned following exercise of the Warrants or as a right to acquire such Common Stock upon exercise of the Warrants), the Purchaser will be entitled to designate up to two directors; provided, however, that, from and after the redemption in full of all of the Series E cumulative redeemable Class C preferred stock of the Company held by the Purchaser, so long as the Purchaser and its affiliates, collectively, continue to beneficially own at least 10% (but less than 25%) of the shares of the Common Stock issuable upon exercise of the Warrants (whether owned following exercise of the Warrants or as a right to acquire such shares of Common Stock upon exercise of the Warrants), the Purchaser will only be entitled to designate one director. "For so long as the Board consists of 10 or more directors, until the Board Designation Termination, the Purchaser will be entitled to designate three directors. For so long as (i) the Purchaser and its affiliates, collectively, continue to beneficially own at least 25% of the shares of Common Stock issuable upon exercise of the Warrants (whether owned following exercise of the Warrants or as a right to acquire such shares of Common Stock upon exercise of the Warrants), the Purchaser will only be entitled to designate up to two directors and (ii) the Purchaser and its affiliates, collectively, continue to beneficially own at least 10% (but not greater than 24.99%) of the shares of Common Stock issuable upon exercise of the Warrants (whether owned following exercise of the Warrants or as a right to acquire such shares of Common Stock upon exercise of the Warrants), the Purchaser will only be entitled to designate one director." About LSB Industries Headquartered in Oklahoma City, Oklahoma, LSB Industries, Inc. -- http://www.lsbindustries.com/-- manufactures and sells chemical products for the agricultural, mining, and industrial markets. The Company owns and operates facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma, and operates a facility for a global chemical company in Baytown, Texas. LSB's products are sold through distributors and directly to end customers throughout the United States. LSB reported net income attributable to common stockholders of $64.76 million for the year ended Dec. 31, 2016, compared to a net loss attributable to common stockholders of $38.03 million in 2015. As of Sept. 30, 2017, LSB Industries had $1.19 billion in total assets, $582.54 million in total liabilities, $167.12 million in redeemable preferred stocks and $445.21 milion in ttoal stockholders' equity. * * * In October 2016, S&P Global Ratings lowered its rating on LSB Industries to 'CCC' from 'B-'. "Despite using the climate control business sale proceeds to repay some debt, the company's metrics have weakened due to plant operational issues and a depressed pricing environment, which have led to depressed EBITDA expectations," said S&P Global Ratings credit analyst Allison Schroeder. In November 2016, Moody's Investors Service downgraded LSB's corporate family rating (CFR) to 'Caa1' from 'B3', its probability of default rating to 'Caa1-PD' from 'B3-PD', and the $375 million guaranteed senior secured notes to 'Caa1' from 'B3'. LSB's 'Caa1' CFR rating reflects Moody's expectations that the combined uncertainty over operational reliability and the compressed margins, resulting from the low nitrogen fertilizer pricing environment, could result in continued weak financial metrics for a protracted period. LSB INDUSTRIES: Incurs $24.7 Million Net Loss in Third Quarter -------------------------------------------------------------- LSB Industries, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss attributable to common stockholders of $24.74 million on $92.39 million of net sales for the three months ended Sept. 30, 2017, compared to net income attributable to common stockholders of $112.04 million on $80.26 million of net sales for the three months ended Sept. 30, 2016. For the nine months ended Sept. 30, 2017, LSB Industries reported a net loss attributable to common stockholders of $52.45 million on $338.58 million of net sales compared to net income attributable to common stockholders of $92.78 million on $289.21 million of net sales for the same period during the prior year. LSB reported net income attributable to common stockholders of $64.76 million for the year ended Dec. 31, 2016, compared to a net loss attributable to common stockholders of $38.03 million in 2015. As of Sept. 30, 2017, LSB Industries had $1.19 billion in total assets, $582.54 million in total liabilities, $167.12 million in redeemable preferred stocks and $445.21 million in total stockholders' equity. Net cash provided by continuing operating activities was $19.3 million as the result of a net loss of $30.1 million plus an adjustment of $50.3 million relating to depreciation, depletion and amortization of PP&E less other adjustments of $0.9 million. Net cash used by continuing investing activities was $2.2 million primarily relating to expenditures for PP&E of $25.2 million partially offset by net proceeds of $22.6 million from the sale of our former working interests in certain natural gas properties and other property and equipment and including an advance payment on the sale of the Company's engineered products business. Net cash used by continuing financing activities was $21.7 million primarily for payments on long-term debt and short-term financing. "We currently have a revolving credit facility, our Working Capital Revolver Loan, with a borrowing base of $50 million. As of September 30, 2017, our Working Capital Revolver Loan was undrawn and had approximately $38.6 million of availability," said the Company in the Report. "We have planned capital additions of approximately $10 million for the fourth quarter of 2017 which, if spent, would bring our full year 2017 total capital additions to approximately $35 million, which excludes the impact of the $8.1 million incentive tax credit recognized during the third quarter of 2017." A full-text copy of the Form 10-Q is available for free at: https://is.gd/7rbjVG About LSB Industries Headquartered in Oklahoma City, Oklahoma, LSB Industries, Inc. -- http://www.lsbindustries.com/-- manufactures and sells chemical products for the agricultural, mining, and industrial markets. The Company owns and operates facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma, and operates a facility for a global chemical company in Baytown, Texas. LSB's products are sold through distributors and directly to end customers throughout the United States. * * * In October 2016, S&P Global Ratings lowered its rating on LSB Industries to 'CCC' from 'B-'. "Despite using the climate control business sale proceeds to repay some debt, the company's metrics have weakened due to plant operational issues and a depressed pricing environment, which have led to depressed EBITDA expectations," said S&P Global Ratings credit analyst Allison Schroeder. In November 2016, Moody's Investors Service downgraded LSB's corporate family rating (CFR) to 'Caa1' from 'B3', its probability of default rating to 'Caa1-PD' from 'B3-PD', and the $375 million guaranteed senior secured notes to 'Caa1' from 'B3'. LSB's 'Caa1' CFR rating reflects Moody's expectations that the combined uncertainty over operational reliability and the compressed margins, resulting from the low nitrogen fertilizer pricing environment, could result in continued weak financial metrics for a protracted period. LSB INDUSTRIES: Two Directors Resign From Board ----------------------------------------------- LSB Industries, Inc., announced the resignation of Bill Murdy and Jonathan Bobb from its Board of Directors, effective Oct. 26, 2017. With the departure of these directors, the size of LSB's Board will be nine directors, of which six are independent. Richard Roedel, who has served on the Company's Board since April 2015 and as chairman of the audit committee since September 2015, replaces Mr. Murdy as LSB's lead independent director. In connection with Mr. Murdy's resignation and retirement from the Board, the Company and Mr. Murdy entered into a resignation and release agreement on Oct. 26, 2017, pursuant to which, among other things, the Company has agreed to pay Mr. Murdy the following payments and benefits in exchange for Mr. Murdy's execution of a release of claims in favor of the Company and its affiliates: (i) within 30 days following Mr. Murdy's execution of the Release Agreement, (x) a lump sum cash payment equal to the $51,250, (y) subject to approval by the Board, a fully vested grant of shares of the Company's Common Stock with a grant date fair market value equal to $31,250, subject to the conditions in the Release Agreement, and (z) full vesting of any outstanding and unvested equity awards granted to Mr. Murdy prior to the Resignation Date; and (ii) on Jan. 15, 2018, subject to approval by the Board, a fully vested grant of shares of the Company's Common Stock with a grant date fair market value equal to $82,500. Additionally, as previously announced, Jack E. Golsen, founder and former chief executive officer of LSB, will step down as the Company's executive chairman effective Dec. 31, 2017, but will remain a member the Board in the role of Chairman Emeritus. Daniel D. Greenwell, LSB's CEO since December 2015, will succeed Mr. Golsen as Board chairman and Richard Roedel will continue as the Company's lead independent director. LSB's President and CEO, Daniel Greenwell, stated, "The Board would like to thank Jack Golsen for his years of leadership as our Board Chairman. Since founding LSB in 1969, he has been a driving force behind our Company's emergence as a leading U.S. chemical manufacturer. Jack's experience and knowledge are invaluable to LSB, and we look forward to continuing to work with him as a member of our Board." Mr. Greenwell continued, "I, along with my fellow directors, would also like to thank Messrs. Murdy and Bobb for their service to our Board and the contributions they've made to our progress in improving our Company's strategy, operations and liquidity position. While we will miss the benefit of their insights, the reduction in the size of our Board is consistent with our efforts to enhance shareholder value through the continued reduction of our administrative costs. We thank Bill and Jonathan for their service, and wish them all the best in their future endeavors." About LSB Industries, Inc. LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, manufactures and sells chemical products for the agricultural, mining, and industrial markets. The Company owns and operates facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor, Oklahoma, and operates a facility for a global chemical company in Baytown, Texas. LSB's products are sold through distributors and directly to end customers throughout the United States. Additional information about the Company can be found on its Web site at www.lsbindustries.com. LSB reported net income attributable to common stockholders of $64.76 million for the year ended Dec. 31, 2016, compared to a net loss attributable to common stockholders of $38.03 million in 2015. As of Sept. 30, 2017, LSB Industries had $1.19 billion in total assets, $582.54 million in total liabilities, $167.12 million in redeemable preferred stocks and $445.21 milion in ttoal stockholders' equity. * * * In October 2016, S&P Global Ratings lowered its rating on LSB Industries to 'CCC' from 'B-'. "Despite using the climate control business sale proceeds to repay some debt, the company's metrics have weakened due to plant operational issues and a depressed pricing environment, which have led to depressed EBITDA expectations," said S&P Global Ratings credit analyst Allison Schroeder. In November 2016, Moody's Investors Service downgraded LSB's corporate family rating (CFR) to 'Caa1' from 'B3', its probability of default rating to 'Caa1-PD' from 'B3-PD', and the $375 million guaranteed senior secured notes to 'Caa1' from 'B3'. LSB's 'Caa1' CFR rating reflects Moody's expectations that the combined uncertainty over operational reliability and the compressed margins, resulting from the low nitrogen fertilizer pricing environment, could result in continued weak financial metrics for a protracted period. M&G CHEMICALS: Files for Chapter 11 with Plans to Sell U.S. Assets ------------------------------------------------------------------ M&G Chemicals S.A., a unit of Italian chemical company Mossi & Ghisolfi S.p.A., has sought Chapter 11 bankruptcy protection in Delaware, in the United States, to pursue a sale process for a still-to-be-completed plant in Corpus Christi, Texas, and other assets in the U.S. The M&G Group, through its chemicals division, is one of the largest producers of polyethylene terephthalate ("PET") resin for packaging applications in the world. PET is a plastic polymer produced principally from purified terephthalic acid ("PTA") and monoethylene glycol, and is used to manufacture plastic bottles and other packaging for the beverage, food and personal care industries. Dennis Stogsdill, Chief Restructuring Officer of M&G Chemicals, recounts that in April 2013, M&G Chemicals began construction on a vertically integrated PTA/PET plant in Corpus Christi, Texas. When completed, the Corpus Christi Plant will be the largest vertically integrated single line PTA/PET production facility in the world and the largest PTA plant in the Americas. The facility's PET line will have a nominal production capacity of 1.1 million tons per year, while the integrated PTA line will have a nominal production capacity of 1.3 million tons per year. According to Mr. Stogsdill, construction of the Corpus Christi Plant initially was expected to be completed in December 2015. However, as a result of (a) construction costs far in excess of what was initially projected, (b) disputes with their prior engineering, procurement and construction firm resulting in the filing of purported mechanics' liens against the property in excess of $196 million, and (c) most recently, construction and supply disruptions caused by Hurricane Harvey, completion of the Corpus Christi Plant has been significantly delayed and the facility remains less than 85% complete. The CRO said the delays and rising costs at the Corpus Christi Plant forced the Company to incur significant additional debt in an attempt to complete the project. At the same time, the plant's inoperability made it impossible for the Debtors and their affiliates to meet their obligations to future customers of the Corpus Christi Plant and service their existing debt, which depended, at least in part, on the revenue that was expected to be generated by the Corpus Christi Plant's operations. As a result, the Company has been operating under severe liquidity constraints over the past several months, forcing the Debtors to significantly scale back construction and development at the Corpus Christi Plant and cease operations at certain of their other facilities prior to the Polymers Petition Date. After exhaustively searching for funding from many potential sources, it became apparent that additional financing would not be available to the Debtors outside of a chapter 11 proceeding. Accordingly, the Debtors commenced Chapter 11 cases to access the $100 million debtor in possession financing. The DIP Financing will, among other things, fund the working capital needs of the Debtors' remaining operations and a sale process for the Corpus Christi Plant and certain of the Debtors' other U.S. assets. Debtors' Business The M&G Group, founded in 1953, has been engaged in the plastic processing industry for over 60 years. In addition to operating business lines related to the production of biofuels and polyester fiber, through the Debtors and other members of the M&G Chemicals Group, the M&G Group is engaged in the production of PET resin and engineering relating to PET plants. Prior to the Polymers Petition Date, the M&G Chemicals Group employed over 950 people in 14 locations in six countries around the world. The Company is headquartered in Luxembourg and has manufacturing locations in Brazil, Mexico and the United States. Its plants in Suape, Brazil and Altamira, Mexico are the two largest single line and most efficient PET producing plants (measured in terms of operating costs per metric ton) in the world. In 2016, the M&G Chemicals Group's revenues reached $1.6 billion. Its customers are major plastic packaging companies, including Amcor Limited, Coca-Cola Cross Enterprise Procurement Group, Graham Packaging Company LP and the Pepsi-Cola Company. Historically, the M&G Chemicals Group has been successful in competing in the PET industry by being able to position its cost curve substantially below the industry average by leveraging proprietary engineering and technology, which has enabled the Company to build much larger and more efficient plants. Additionally, the Company operates an engineering, procurement and construction business that specializes in the provision of services and solutions to the petrochemical, polymer, fiber, energy, biofuels and environmental technology sectors, through Debtor Chemtex International Inc. and its Debtor and non-Debtor subsidiaries. The Chemtex Group has operations in the United States, China and India and provides engineering services and solutions to independent customers as well as internal projects undertaken by members of the M&G Group. In 2013, Sinopec Engineering (Group) Co., Ltd., the general contractor for the Corpus Christi Plant, subcontracted all activities related to project management and procurement for the project to Chemtex. Debtors' Prepetition Indebtedness As of the Petition Date, the Debtors had outstanding debt in the aggregate principal amount of nearly $1.7 billion under 11 financing arrangements: (USD millions) Lender Amount Outstanding ------ ------------------ Sculptor Investments IV S.a r.l. $37.5 million Banco Inbursa, S.A., Institucion de Banca Multiple, Grupo Financiero Inbursa $120.0 million Sculptor Investments IV S.a r.l. $72.5 million Delta Lloyd Levensverzekering N.V. and Delta Lloyd Life N.V. $83.3 million Banco Inbursa, S.A., Institucion de Banca Multiple, Grupo Financiero Inbursa $436.0 million Industrial and Commercial $350.0 million Bank of China Ltd Banco do Brasil S.A., New York Branch $35.0 million Macquarie Investments US Inc. $55.5 million DAK Americas, LLC $435.0 million Comerica Bank M&G Polymers USA, LLC $50.0 million Banca Monte dei Paschi di Siena S.p.A, New York Branch $10.0 million --------------- Total $1,684.8 million In addition to the funded debt obligations, due to the severe liquidity constraints the Debtors were experiencing prior to the filing of these Cases, the Debtors owe significant amounts to their raw materials suppliers. As of the Petition Date, the Debtors estimate that they owe approximately $250 million in past due amounts to their suppliers. Events Leading to Chapter 11 The delays and cost overruns at the Corpus Christ Plant are the primary cause of the Company's liquidity crisis that led to the filing of the Chapter 11 cases. Mechanical completion of the Corpus Christi Plant was originally projected to occur in December 2015 at a cost of $1.1 billion. As construction progressed, however, the Company was repeatedly required to adjust the planned schedule and budget to account for (a) changes in the overall approach to construction of the plant due to design and technical problems, (b) delays due to the weather, (c) subcontractors failing to meet deadlines and cost projections, (d) engineering audits and (e) delays in equipment delivery. To date, the Company has spent $1.86 billion on construction of the Corpus Christi Plant and it is estimated that a further $505 million is required to complete construction and render the facility fully operational. Liquidity constraints forced the Company to scale back construction and further development of the Corpus Christi Plant site prior to the filing of the Cases. By far the most significant factor contributing to the cost overruns and delays at the Corpus Christi Plant is higher than expected construction costs. Although equipment costs remained within budget for the project, labor costs far exceeded expectations. Specifically, labor costs for construction of the Corpus Christi Plan have averaged about $104 per hour, compared with the $55 to $60 per hour that was budgeted, due to market forces and low productivity. Delays and costs related to labor further increased last December, when one of the Debtors' major subcontractors declared it was stopping work and walked off the job without proper justification. These escalating cost overruns forced the Company to incur greater debt in the months leading up to the filing of these Cases in an effort to complete the Corpus Christi Plant and commence operations at that facility. Specifically, the Debtors engaged in additional borrowings under the U.S. Inbursa Facility, sold additional incremental future capacity to DAK under the Capacity Reservation Agreement and issued the 2019 Bonds and 2023 Bonds with the expectation that the funds generated would be sufficient to fund working capital expenditures and completion of construction of the Corpus Christi Plant. The Debtors also sought to raise capital by other means, including by, among other things, engaging in pre-buy contracts with their customers, whereby customers agreed to pay upfront for PET to be delivered in the future. Ultimately, however, these measures were insufficient. Rising construction costs not only increased the cost to complete the Corpus Christi Plant, but the attendant delays in completion of the facility meant that the Debtors were unable to generate revenue from the sale of PET resin that they expected to be able to produce in 2016 and 2017. These circumstances, when coupled with other market forces—including (a) higher raw material costs due to supply shortages, (b) a recent wave of competing low-priced imports that flooded the U.S. market and (c) discounts the Company was forced to offer to certain customers in response to a competitor slashing prices as it exited the marketplace— placed the Company in a precarious liquidity position. Recognizing these liquidity constraints and the need to finish construction of the Corpus Christi Plant as quickly as possible, the Company, with the assistance of its investment banker, Rothschild, Inc., pursued a variety of potential capital-raising efforts throughout this past summer and, in fact, the Debtors anticipated closing on a new source of capital that would have largely alleviated their liquidity concerns in July of 2017. As August progressed, however, it became clear that this new capital source was not going to close in the near term. Further, during the course of the summer, the Company had been forced to delay payments to its raw materials suppliers due to its liquidity constraints and, as the weeks and months progressed and past due balances grew, those suppliers became increasingly less willing to accept delayed payment terms from the Debtors. Many of the suppliers threatened to withhold or delay raw material shipments to the Company, and those vendors that remained willing to ship goods demanded cash on delivery. With the need for liquidity becoming critical, on August 21, 2017, the Debtors engaged Jones Day as restructuring counsel. Shortly thereafter, in the first week of September, the Company engaged with its key stakeholders in order to seek access to additional liquidity. These discussions eventually led to an agreement by Inbursa, DAK and one of M&G Chemicals' equity holders, Magnate S.a r.l., to provide the Company with emergency financing to pay necessary expenses and prepare for a potential chapter 11 filing. Accordingly, on Sept. 12, 2017, M&G Resins and Inbursa entered into an amendment to the U.S. Inbursa Facility pursuant to which Inbursa agreed to advance a total of $6 million in additional funds to the Company (the "September Advance"), with DAK and Magnate each participating in the amount of $2 million. While its discussions with its key stakeholders remained ongoing, the Company endeavored to find other ways to maintain its supply chain, including by continuing to negotiate further extended payment terms with its key suppliers. Ultimately, however, these efforts were unsuccessful and, on September 5, 2017, the Company was forced to shut down operations at its PET manufacturing facility in Altamira, Mexico because it lacked the necessary raw materials to continue production. This shut down negatively affected the remainder of the M&G Chemicals Group, including, in particular, Debtor M&G Polymers' operations at the Apple Grove Plant, which derived nearly 50% of its sales from PET resin produced by the Altamira plant. While the Debtors were able to maintain manufacturing operations at the Apple Grove Plant for several weeks following the shut down at the Altamira plant, a lack of liquidity to purchase necessary raw materials eventually forced the Debtors to cease production at the Apple Grove Plant on October 22, 2017. Despite the Debtors' best efforts, the September Advance and the Company's discussions with its key stakeholders did not lead to the provision of sufficient liquidity to avoid a chapter 11 filing; however, with the cooperation of DAK and Magnate, an affiliate of Inbursa did offer the DIP Financing, which will allow the Debtors funding necessary to pursue an organized and orderly sale of the Corpus Christi Plant and certain other assets. Sale Milestones The Debtors have filed Chapter 11 cases, in part, to access financing that will allow them to maintain a minimum level of operations and fulfill obligations to certain of their key creditor constituencies while they conduct a sale of certain of their U.S. assets. The Debtors have secured a $100 million senior secured term loan debtor-in-possession credit facility from Control Empresarial de Capitales, S.A. De C.V., an affiliate of Inbursa. The Debtors' obligations under the DIP Credit Facility will be secured by liens on the majority of the Debtors' assets that are senior to all existing liens on the Debtors' property except: (a) any liens existing as of the Petition Date or subsequently perfected pursuant to section 546(b) of the Bankruptcy Code that are senior to any portion of the liens securing the U.S. Inbursa Facility (the "Senior Prior Liens") and (b) any liens securing the portion of the U.S. Inbursa Facility that is senior to the Senior Prior Liens. The DIP Credit Facility will permit the Debtors to run a controlled and orderly sale process and fulfill their obligations to certain key creditor constituencies. Without the DIP Financing, the Debtors will experience an immediate liquidity shortfall and will be unable to conduct a sale process in a way that preserves value for its creditors. Specifically, the DIP Credit Facility will ensure that the Debtors are able to maintain the level of operations at the Corpus Christi Plant necessary to secure the safety and preservation of the facility and avoid the incurrence of additional liabilities that could result from an immediate and uncontrolled cessation of operations. The principal terms of the DIP Credit Facility are: * Debtor M&G Resins is the borrower under the DIP Credit Facility and the other Debtors, other than M&G Polymers M&G Chemicals, M&G International and M&G Capital, are guarantors. * Trimont Real Estate Advisors, LLC has been designated to serve as administrative and collateral agent. * The maturity of the DIP Credit Facility is the earlier of: (a) 6 months after the Petition Date; (b) 183 days after the closing of the DIP Credit Facility, (c) the date of a sale of all or substantially all of the assets pledged as collateral for the DIP Credit Facility or (d) upon acceleration of the obligations following an event of default under the DIP Credit Facility. * The interest rate payable by the Debtors under the DIP Credit Facility is LIBOR + 9.5% and is payable monthly in arrears. * The DIP Lender will be authorized to fund a loan under the DIP Credit Facility in an amount sufficient to repay the September Advance and M&G Resins shall be authorized to draw and shall be deemed to have drawn on the DIP Credit Facility in order to effectuate this roll-up. Additionally, the DIP Credit Facility sets forth a series of milestones that the Debtors must adhere to in order to avoid an event of default. These milestones include: -- Entry of an order approving the Debtors' entry into the DIP Credit Facility on an interim basis within three days of the date hereof; -- Entry of an order approving the Debtors' entry into the DIP Credit Facility on a final basis within 30 days of the date hereof; -- The Debtors' delivery of a business plan to the DIP Lender, including a comprehensive cost-to-complete assessment for the Corpus Christi Plant within 60 days of the date hereof; -- The Debtors' filing of a motion seeking approval of bidding procedures and authority to sell substantially all of Debtors' assets (the "Sale Motion"), including the Corpus Christi Plant, within 15 days of the date hereof; -- Entry of an order approving the bidding procedures set forth in the Sale Motion no later than 25 days after the filing of the Sale Motion; -- A deadline for bids for the purchase of the Debtors' assets of no later than 75 days after entry of the Bidding Procedures Order; -- An auction for the sale of the Debtors' assets no later than three business days after the Bid Deadline; -- Entry of a order approving a sale of the Debtors' assets no later than 10 business days after the Bid Deadline; and -- The closing of any sale and distribution of sale proceeds within the later of (a) 25 days after the Bid Deadline or (b) five days following the receipt of necessary regulatory approvals. About M&G Chemicals Founded in 1953, M&G Group is a privately owned chemical company in Italy and is controlled through the holding company M&G Finanziaria S.p.A. The M&G Group -- specifically, its chemicals division, which includes M&G Chemicals S.A. -- is a producer of polyethylene terephthalate resin for packaging applications. PET is a plastic polymer produced principally from purified terephthalic acid and monoethylene glycol, and is used to manufacture plastic bottles and other packaging for the beverage, food and personal care industries. M & G USA Corporation, parent M&G Chemicals S.A. and 9 of its direct and indirect subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12307) on Oct. 30, 2017. The Hon. Brendan L. Shannon is the case judge. The Debtors tapped Jones Day and Pachulski Stang Ziehl & Jones LLP as restructuring counsel; Alvarez & Marsal North America, LLC, as restructuring adviser; Rothschild Inc. as investment banker; and Prime Clerk, LLC, as claims and noticing agent. M & G USA estimated assets and debt of $1 billion to $10 billion. MAC ACQUISITION: U.S. Trustee Forms 7-Member Committee ------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, on Oct. 30 appointed seven creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of Mac Acquisition, LLC, and its affiliates. The committee members are: (1) Aramark Uniform & Career Apparel, LLC Attn: Ed Friedler 115 North First Street Burbank, CA 91502 Phone: 818-953-4504 Fax: 818-973-3793 (2) Chas P. Young Company, an RR Donnelley Company Attn: Robert Larsen 4101 Winfield Road Warrenville, IL 60555 Phone: 630-322-6006 Fax: 630-322-6893 (3) Darrell Evans Attn: Michael Lingle, Esq. Thomas & Solomon 693 East Avenue Rochester, NY 14607 Phone: 516-272-0540 Fax: 516-272-0574 (4) J. Nazzaro Partnership LP Attn: James Nazzaro 8 Saxon Avenue, Suite C Bay Shore, NY 11706 Phone: 631-650-7836 Fax: 631-650-7952 (5) Casual Dining Cool Springs, LLC Attn: Val Nasano 26 Knights Court Upper Saddle River, NJ 07458 Phone: 201-832-0293 Fax: 845-429-4538 (6) Simon Property Group, Inc. Attn: Ronald Tucker 225 W. Washington Street Indianapolis, IN 46204 Phone: 317-263-2346 Fax: 317-263-7901 (7) NCR Corporation Attn: Robert Waddell, Jr. 3097 Satellite Blvd., Bldg. 700 Duluth, GA 30096 Phone: 678-808-7168 Fax: 404-487-4989 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Mac Acquisition LLC Mac Acquisition LLC, et al. -- https://www.macaronigrill.com/ -- operate full-service casual dining restaurants under the trade name, "Romano's Macaroni Grill." As of Oct. 18, 2017, the company operates 93 company-owned restaurants located in 23 states, with a workforce of approximately 4,600 employees. Non-debtor affiliate RMG Development franchises an additional 23 restaurants in Florida, Hawaii, Illinois, Texas, Puerto Rico, Mexico, Bahrain, Egypt, Oman, the United Arab Emirates, Qatar, Germany, and Saudi Arabia. During 2016, Mac Acquisition and RMG generated gross revenues through restaurant sales and franchisee payments of approximately $230 million. On Oct. 18, 2017, Mac Acquisition LLC, and eight affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12224). Mac Acquisition's estimated assets of $10 million to $50 million and debt at $50 million to $100 million. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as Delaware bankruptcy counsel; Gibson, Dunn & Crutcher LLP, as general bankruptcy counsel; Mackinac Partners, LLC, and financial advisor. Donlin, Recano & Company, Inc., is the claims agent. MAYFAIR-CORCORAN LLC: Webb Ventures Buying DC Property for $2.1M ---------------------------------------------------------------- Mayfair-Corcoran, LLC, asks the U.S. Bankruptcy Court for the District of Columbia to authorize the sale of the real property located at 1720-1721 Corcoran Street NE, Washington, DC, together with related personal and intangible property located thereon, to Webb Ventures, LLC and/or Assigns for $2,128,000. The Property is improved by two residential apartment buildings with a total of 19 apartment units, known as the Corcoran House Apartments. The Debtor owns the Corcoran House Apartments on the Property, although the project is currently being managed by a receiver pursuant to a Consent Order entered by the Superior Court of the District of Columbia in its Case No. 2017 C.A. 003403 R (RP), and an order of the Bankruptcy Court entered in the case on Sept. 26, 2017. It purchased the Property from Carroll Associates, LLC and Laurence H. Lipnick, Robert N. Lipnick, and William C. Lipnick on Aug. 15, 2011. Two consensual liens encumber the Property: (i) a first-priority deed of trust securing a promissory note dated as of July 31, 2013, in the original principal amount of $1,175,000, assigned to Federal National Mortgage Association ("Fannie Mae"); and (ii) a second-priority deed of trust securing a promissory note dated as of Oct. 16, 2015, in the original principal amount of $316,000 also assigned to Fannie Mae. In addition, the District of Columbia recorded eight Litter Control Administration Act liens against the Property in February 2017. The Debtor's schedules, as filed with the Court on Oct. 11, 2017, reflect that as of the Petition Date there were unsecured priority claims against its estate of approximately $2,251, and unsecured non-priority, non-insider claims against its estate of approximately $34,287, for total non-insider unsecured claims of approximately $36,538. While it is possible that additional prepetition claims against it may be identified or asserted, the Debtor is unaware of any such claims. Since acquiring the Property, the Debtor has used its revenues to pay for quality services to its residents and to maintain and improve the Property's physical condition and systems. Nonetheless, the Property has not generated sufficient cash flow to permit the Debtor to satisfy all of its loan and operational obligations as they have come due. In light of its limited financial success and Fannie Mae's efforts to take control, and conduct a foreclosure sale of, the Property, the Debtor determined that it was in its best interests, and that of its residents and creditors, to sell the Property to an independent third party at a price that would allow the Debtor to satisfy the Notes and the Debtor's other financial obligations. The Purchaser initiated the sale process by contacting the Debtor to express interest in the Property. The parties were familiar with each other because the Purchaser's principal, Cameron Webb, is a real estate broker who sells multi-family residential properties in the DC metropolitan area, who has acted as broker for properties owned by entities affiliated with Sanford Capital, LLC, which holds a majority of the membership interests in the Debtor. Following Purchaser's initial expression of interest, the Debtor and Purchaser engaged in arm's-length negotiations which resulted in the Purchase and Sale Agreement, dated as of July 6, 2017, for the sale of the Property to Purchaser for the cash price of $2,128,000, free and clear of all liens and interests. Pursuant to the Purchase Agreement, the Purchaser has lodged an earnest money deposit of $50,000 with Premium Title & Escrow, which will be applied against the purchase price at closing. A copy of the Purchase Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/Mayfair-Corcoran_LLC_52_Sales.pdf The Debtor intends to pay any and all unpaid real estate taxes and charges for utilities relating to the Property from the proceeds of sale at closing. The sale will be subject to all existing tenant leases for apartment units at the Property. Once creditors are paid in full, the members of the Debtor will be entitled to the remaining sale proceeds. Because the members will receive the proceeds of sale, net of creditor claims, the members alone have an interest in the adequacy of the sale price under the Purchase Agreement. Members of the Debtor support the Purchase Agreement. Accordingly, because creditors will be paid in full and the members are satisfied with the sale price, the Debtor submits that no further marketing of the Property is necessary. The Purchaser: Cameron Webb WEBB VENTURES, LLC 7200 Wisconsin Ave. Suite 1101 Bethesda, MD 20814 Telephone: (202) 536-3725 Counsel for the Debtor: Stephen E. Leach, Esq. Kristen E. Burgers, Esq. HIRSCHLER FLEISCHER PC 8270 Greensboro Drive, Suite 700 Tysons, Virginia 22102 Telephone: (703) 584-8900 Facsimile: (703) 584-8901 E-mail: sleach@hf-law.com kburgers@hf-law.com Mayfair-Corcoran, LLC, sought Chapter 11 protection (Bankr. D.D.C. Case No. 17-00513-SMT) on Sept. 13, 2017. MONTCO OFFSHORE: Seeks to Hire Drinker Biddle as Lead Counsel ------------------------------------------------------------- Montco Offshore, Inc. has filed an amended application seeking approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Drinker Biddle & Reath LLP as counsel in the Chapter 11 cases of the company and its affiliates. The company had previously requested to employ the firm as special counsel to provide legal advice on any restructuring issue related to the confirmation of a bankruptcy plan and any sale of assets of the company and its affiliates. Montco anticipates that Drinker Biddle will serve as lead restructuring counsel, in consultation with DLA Piper LLP, another firm hired by Montco to be its legal counsel. Specifically, the firm will render these services: (a) providing legal advice regarding the Debtors' powers and duties; (b) attending meetings and negotiating with representatives of creditors and other parties, and advising and consulting on the conduct of the bankruptcy cases, including the legal and administrative requirements of operating in Chapter 11; (c) taking necessary action to protect and preserve the Debtors' estates, including the prosecution of actions commenced under the Bankruptcy Code on their behalf and objections to claims filed against the estate; (d) preparing and prosecuting on behalf of the Debtors court documents necessary to the administration of the estates; (e) appearing in court and protecting the interests of the Debtors before the court. The attorneys and paralegal expected to provide the services and their hourly rates are: Vincent Slusher Partner $835 Stacy Lutkus Senior Attorney $515 Daniel Northrop Paralegal $345 Vincent Slusher, Esq., disclosed in a court filing that his firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Slusher disclosed that the firm's hourly rates for its employment with the Debtors are consistent with those rates that it charges other comparable Chapter 11 clients. Mr. Slusher also disclosed that the firm did not represent the Debtors in the 12 months prior to their bankruptcy filing and that it expects to develop a prospective budget and staffing plan. Drinker Biddle can be reached through: Vincent P. Slusher, Esq. Drinker Biddle & Reath LLP 1717 Main St., Suite 5400 Dallas, TX 75201-7367 Phone: (469) 357-2500 Fax: (469) 327-0860 About Montco Offshore Based in Galliano, Louisiana, Montco Offshore, Inc. -- http://www.montco.com/mo-- was founded by the Orgeron family in 1948. Over its 60+ years, the Company has served the offshore energy industries with crew boats, ocean-going tugs, deck barges, supply boats, and liftboats. Currently, Montco specializes in liftboats ranging in size from 235 feet to 335 feet which provide the best quality and safety of service for customers requiring versatile elevated vessels/work-platforms. Montco has total fleet of six vessels includes (a) two 335' class liftboats, known as (i) "Robert," which was unveiled in the first quarter of 2012, and (ii) "Jill," which was completed in 2014; (b) two 245' class liftboats, known as (i) "Kayd," which was completed in 2006, and (ii) "Myrtle;" which was completed in 2002; and (c) two 235' class liftboats, each completed in 2009, known as (i) "Paul," and (ii) "Caitlin." Montco Offshore, Inc., and its affiliate Montco Oilfield Contractors, LLC, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No. 17-31646) on March 17, 2017. The petitions were signed by Derek C. Boudreaux, the CFO. As of the Petition Date, on a book basis, Montco Offshore had an aggregate of approximately $265 million in total assets and approximately $136 million in total liabilities. MO Contractors had approximately $84 million in total assets (which are mostly made up of receivables) and approximately $126 million in total liabilities. As of the Petition Date, the Debtors estimated that $5.3 million was due and owing to holders of prepetition trade claims against MO Contractors, and $75 million was due and owing to holders of prepetition trade claims against MO Contractors, not including the intercompany obligations. The cases are assigned to Judge Marvin Isgur. DLA Piper LLP (US) is serving as the Debtors' bankruptcy counsel, with the engagement led by Vincent P. Slusher, Esq., David E. Avraham, Esq., and Adam C. Lanza, Esq. Blackhill Partners, LLC, is the Debtors' financial advisor and investment broker, with Joe Stone, Todd Heinz, and Tripp Ballard leading the engagement. BMC Group, Inc., is the claims and noticing agent. On March 29, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. Porter Hedges LLP is serving as counsel to the Creditors Committee, with the engagement led by John F Higgins, IV, Joshua W. Wolfshohl, and Eric Michael English. MSR RESORT: District Court Rejects Conlon's Fees Opinion Appeal --------------------------------------------------------------- Judge Vernon S. Broderick of the U.S. District Court for the Southern District of New York granted MSR Liquidating Trustee, LLC's motion to dismiss with prejudice the appeals case captioned CONLON GROUP ARIZONA, LLC Appellant, v. MSR LIQUIDATING TRUSTEE, LLC, as Liquidating Trustee of MSR Liquidation Trust, Appellee, Nos. 17-CV-996 (VSB), 17-CV-1015 (VSB) (S.D.N.Y.). Conlon filed its notice of appeal of the Merits Opinion on Oct. 6, 2016, and its notice of appeal of the Fees Opinion on Dec. 1, 2016. Conlon filed its designation of items to be included in the record on appeal and a statement of the issues to be presented ("Designation and Statement") for both appeals on Feb. 10, 2017. In its motion to dismiss, MSR argues that Conlon's appeal must be dismissed under FRBP 8009 because Conlon failed to timely file its Designation and Statement on appeal. In opposing, Conlon "recognizes and acknowledges the seriousness of its failure to comply with [FRBP] 8009(a)(1)," but asks that Judge Broderick exercise his discretion and finds under the circumstances presented here that there was excusable neglect. Here, Conlon's only justification for its failure to file a timely Designation and Statement is its inability to retain counsel "willing to take any step in the appellate process beyond filing notices of appeal," largely because of a lack of funds. Conlon contends that, given that corporations may not proceed pro se, it was not possible for it to comply with FRBP 8009 until counsel was retained. In its opposition and accompanying declarations, Conlon unequivocally acknowledges that it was fully aware of the deadline for filing its Designation and Statement, and simply chose to "flout" it. Judge Broderick opines that he does not consider Conlon's inability to retain counsel in these circumstances to be the result of inadvertence, miscalculation, or neglect, nor was it the result of intervening circumstances beyond Conlon's control. As a result, Conlon's failure to follow FRBP 8009 was not the result of "excusable neglect," and the appeal is dismissed with prejudice. A full-text copy of Judge Broderick's Memorandum and Opinion dated Oct. 20, 2017, is available at https://is.gd/WDYu5v from Leagle.com. Conlon Group Arizona, LLC, Appellant, represented by Michael A. Gross, Michael Gross Law Office, pro hac vice. MS Resorts Liquidating Trustee, LLC, Appellee, represented by Chad John Husnick -- chad.husnick@kirkland.com -- Kirkland & Ellis LLP, Christian Robert Reigstad -- christian.reigstad@kirkland.com -- Kirkland & Ellis LLP, Douglas B. Rosner -- drosner@goulstonstorrs.com -- Goulston & Storrs, P.C., pro hac vice, Eric Foster Leon, Latham & Watkins LLP, James H.M. Sprayregen -- james.sprayregen@kirkland.com -- Kirkland & Ellis LLP, Paul Basta -- paul.basta@kirkland.com -- Kirkland & Ellis LLP & Peter D. Bilowz -- pbilowz@goulstonstorrs.com -- Goulston & Storrs, P.C., pro hac vice. About MSR Hotels MSR Hotels & Resorts, Inc., returned to Chapter 11 by filing a voluntary bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11512) on May 8, 2013 in Manhattan, to thwart a lawsuit by lender Five Mile Capital Partners, which claims it is owed tens of millions of dollars related to the sale of several luxury resorts in a prior bankruptcy. MSR Hotels also seeks to sell its remaining assets and wind down. Paul M. Basta, Esq., at Kirkland & Ellis, LLP, represents the 2013 Debtor. MSR Hotels owned a portfolio of eight luxury hotels with over 5,500 guest rooms. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the January 2011 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. Then known as MSR Resort Golf Course LLC, the company and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the 2011 filings were Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. In the 2011 petitions, the five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010. In its 2011 schedules, MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. In the 2011 bankruptcy, James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, served as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., acted as the Debtors' financial advisor. Kurtzman Carson Consultants LLC acted as the Debtors' claims agent. The Official Committee of Unsecured Creditors in the 2011 case was represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. In March 2012, the Debtors won Court approval to sell the Doral Golf Resort to Trump Endeavor 12 LLC, an affiliate of Donald Trump's Trump Organization LLC, for $150 million. An auction was held in February that year but no other bids were received. The 2011 Debtors won approval of a bankruptcy-exit plan that was predicated on the sale of the remaining four resorts by the Government of Singapore Investment Corp. -- the world's eighth-largest sovereign wealth fund, according to the Sovereign Wealth Fund Institute -- for $1.5 billion. U.S. Bankruptcy Judge Sean Lane, who oversaw the 2011 cases, overruled Plan objections by the U.S. Internal Revenue Service and investor Five Mile. The IRS and Five Mile alleged that the sale created a tax liability of as much as $331 million that may not be paid. That Plan was declared effective on Feb. 28, 2013. On April 9, 2013, Five Mile sued Paulson & Co. executives and MSR Hotels in New York state court, alleging they (i) mishandled the company's intellectual property and other assets in a bankruptcy sale, and failed to get the best price for the assets, and (ii) owe Five Mile $58.7 million on a loan. According to a Reuters report, Five Mile seeks $58.7 million representing sums owed, including interest and costs, plus at least $100 million for breach of fiduciary duty, gross negligence and corporate waste. The 2013 Debtor has two critical court dates: a Jan. 30, 2014 auction to locate the best bid for trademarks not sold in the prior bankruptcy; and a Feb. 6 hearing to approval a Chapter 11 plan. In the 2013 case, MSR Hotels originally listed assets of $785,000 and liabilities totaling $59.2 million. Debt at that time included $59.1 million owing to Midland, a secured creditor in the five resorts' bankruptcy. Midland has a lien on the three resorts' trademarks. Other than the trademarks, MSR Hotels' other assets were listed as being $150,000 in unrestricted cash. The company has no operations. Revenue in 2012 was $32,500, according to a court filing. NC DEVELOPMENT: November 11 Disclosure Statement Hearing -------------------------------------------------------- The Hon. Rebecca B. Connelly of the U.S. Bankruptcy Court for the Western District of Virginia will hold a hearing to consider approval of the Disclosure Statement filed by NC Development, L.L.C. on November 11, 2017 at 11:00 a.m. November 8, 2017, is fixed as the last date for filing and serving written objections to the Disclosure Statement in accordance with Rule 3017(a). October 31, 2017 is fixed as the last date for the filing of proof of claims, pursuant to Rule 3003(c)(3). Hannah White Hutman, Esq. Hoover Penrod, PLC 342 South Main Street Harrisonburg, VA 22801 About NC Development LLC NC Development, LLC listed its business as a single asset real estate (as defined in 11 U.S.C. Section 101(51B)) whose principal assets are located at 320 Hope Drive, Winchester, Virginia. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 17-50630) on June 29, 2017. Matthew Carroll, managing member, 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. Judge Rebecca B. Connelly presides over the case. Hoover Penrod PLC is the Debtor's bankruptcy counsel. The Debtor taps Oak Crest Commercial Real Estate as real estate broker. The Debtor previously filed a Chapter 11 petition (Bankr. D. Md. Case No. 11-13720). The petition was filed on February 25, 2011. NEIMAN MARCUS: Bank Debt Trades at 20.35% Off --------------------------------------------- Participations in a syndicated loan under Neiman Marcus Group Inc is a borrower traded in the secondary market at 79.65 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 1.00 percentage points from the previous week. Neiman Marcus Group Inc pays 300 basis points above LIBOR to borrow under the $2.9 billion facility. The bank loan matures on October 16, 2020 and Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. OAKRIDGE HOLDINGS: DIP Maturity Date, Milestones Extended 120 Days ------------------------------------------------------------------ Oakridge Holdings Inc. said that the maturity date of DIP loan agreement and dates of certain "milestones" contained in DIP loan agreement have been extended by 120 days. Oakridge Holdings, Inc., and its operating subsidiary, Stinar HG, Inc., are parties to a Debtor-In-Possession Loan Agreement, dated as of May 22, 2017, by and among Debtors and Krukeberg Industries, LLC, pursuant to which the Krukeberg Industries, LLC has agreed to loan certain amounts to Stinar HG, Inc. By order of the Bankruptcy Court, dated Oct. 25, 2017 and with the consent of the parties to the DIP Loan Agreement, the Maturity Date of the DIP Loan Agreement and the dates of certain other "Milestones" contained in the DIP Loan Agreement have been extended by 120 days, as follows: * The Maturity date of the DIP Loan Agreement has been extended by 120 days to the earliest to occur of (a) 45 calendar days after the Petition Date, if the Bankruptcy Court has not entered a final borrowing order on or before that date (b) January 17, 2018 -- 240 calendar days after the Petition Date; (c) the date on which a plan of reorganization for Debtors, in a form and substance satisfactory to the DIP Lender, in its sole and absolute discretion, becomes effective; and (d) the occurrence and continuation of certain other customary events of default, including the failure of certain customary milestone events identified in the DIP Loan Agreement. * The Milestone date by which the Bankruptcy court will have entered an order confirming a plan of reorganization for Stinar HG has been extended by 120 days to Dec. 30, 2017. * The Milestone date by which the a plan of reorganization for Stinar HG will have become effective has been extended by 120 days to Feb. 3, 2018. About Stinar HG & Oakridge Stinar HG, Inc., d/b/a The Stinar Corporation, is a Minnesota-based company that manufactures ground support equipment for the aviation industry. The late Frank Stinar founded Stinar Corp. in 1946. Stinar's products are used to load, service, and maintain all types of aircraft for both government and commercial applications. The company's corporate headquarters and its 40,000-square foot manufacturing facility are in Eagan, Minnesota. On June 29, 1998, Oakridge Holdings, Inc. (OTCMKTS:OKRGQ), a publicly held Minnesota-based company, became the new owner of Stinar. Currently, Stinar is the only asset of Oakridge Holdings. The largest shareholder of Oakridge Holdings is Robert Harvey who holds approximately 21% of the outstanding shares. Oakridge Holdings and operating unit Stinar HG filed bankruptcy Chapter 11 petitions (Bankr. D. Minn. Case Nos. 17-31669 and 17-31670, respectively) on May 22, 2017. Robert C. Harvey, CEO and president, signed the petitions. On May 26, 2017, the Court entered an Order allowing the joint administration of the Chapter 11 cases under Bankr. D. Minn. Case No. 17-31670. At the time of filing, debtor Oakridge Holdings disclosed total assets of $990,237 and total liabilities of $2.17 million, while debtor Stinar HG disclosed total assets of $8.22 million and total liabilities of $2.91 million. The cases are assigned to Judge Kathleen H Sanberg. The Debtors are represented by Kenneth Edstrom, Esq., at Sapientia Law Group. OMAR A. DUWAIK: Loses 2nd Bid for Restraining Order, Injunction --------------------------------------------------------------- In the appeals case captioned OMAR A. DUWAIK, Appellant, v. JP MORGAN CHASE BANK, N.A., Successor in Interest by purchase from the FDIC as Receiver of Washington Mutual Bank f/k/a Washington Mutual Bank FA, Appellee, Civil Action No. 17-cv-00142-MSK (D. Col.), Duwaik appeals from the Jan. 3, 2017 Order of the United States Bankruptcy Court that denied his motion to set aside a prior order granting relief from the automatic stay. Also at issue is Mr. Duwaik's petition for a restraining order and temporary and permanent injunction. Upon review, Chief District Judge Marcia S. Krieger of the U.S. District Court for the District of Colorado affirms the Bankruptcy Court's order denying motion to set aside judgment and denies Mr. Duwaik's petition for a restraining order and temporary and permanent injunction. In July 2005, Mr. Duwaik executed a promissory note in the amount of $1,500,000 in favor of Washington Mutual Bank, FA. The Note was secured by a Deed of Trust on four parcels of vacant land and a house. WAMU failed, and its assets were placed into a receivership administered by the Federal Deposit Insurance Corporation, from whom Chase claims to have purchased the Note and Deed of Trust at issue here. Until 2010, Mr. Duwaik made payments to Chase but eventually fell into delinquency. In 2012, Chase initiated foreclosure proceedings against the House. During those proceedings, Mr. Duwaik challenged whether Chase possessed the original Note that he executed in favor of WAMU. In December 2012, Mr. Duwaik filed a voluntary Chapter 11 bankruptcy petition. In the bankruptcy case, Chase filed a Proof of Claim to which it attached a copy of the Note and Deed of Trust. Mr. Duwaik never contested the claim nor sought a determination as to the nature, extent, or priority of the lien claimed by Chase. He proposed a plan of reorganization that provided for payment to Chase. The Plan was confirmed on Jan. 10, 2014. On August 2, 2016, Chase moved for relief from the automatic stay pursuant to 11 U.S.C. Section 362(d)(1) and (2) in order to foreclose its lien against the House. Following a preliminary hearing, the Bankruptcy Court issued a written order in which it found that Chase had established "cause" for relief from stay. Mr. Duwaik's argument both before the Bankruptcy Court and this Court is straight-forward and simple. He concedes that he is indebted under the Note, but he contends that Chase is not entitled to relief from stay because his signature on the Note that Chase holds was forged. Judge Krieger finds no legal error or abuse of discretion by the Bankruptcy Court. The automatic stay created by 11 U.S.C. section 362(a) enjoins acts to collect on pre-petition debts, including the foreclosure on pre-petitions liens. Its purpose is to allow a debtor like Mr. Duwaik a breathing spell in order to reorganize or to allow a trustee to marshal assets for an orderly distribution to creditors. However, the automatic stay is not intended to last forever. It may be lifted upon a showing of "cause", including that property in which a party in interest has an interest is not "adequately protected" or that a debtor has no equity in the property and the property is not necessary to an effective reorganization. The Bankruptcy Court also did not err in denying Mr. Duwaik's Rule 60(b) motion. Whether the signature of Chase's proffered Note was authentic or not was not a matter for the Bankruptcy Court to resolve in stay proceedings; it was a matter that would be resolved in more complete litigation later. Thus, Mr. Duwaik's "newly-discovered evidence" that purportedly established his allegations of forgery was immaterial to the issue of stay relief. Mr. Duwaik's request for injunctive relief is also denied because the motion was not properly brought and it is now moot. Now that the Bankruptcy Court's order is affirmed, Mr. Duwaik's request for injunctive relief pending resolution of his appeal is moot. A full-text copy of Judge Krieger's Decision dated Oct. 20, 2017, is available at https://is.gd/Fwtr72 from Leagle.com. Omar A. Duwaik, Appellant, Pro Se. JP Morgan Chase Bank N.A., Appellee, represented by Holly R. Shilliday, McCarthy & Holthus, LLP & Cynthia Dawn Lowery-Graber -- cynthia.lowery-graber@bryancave.com -- Bryan Cave LLP. OMNI LION'S RUN: Plan Filing Exclusivity Extended Until Dec. 4 -------------------------------------------------------------- Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas, at the behest of Omni Lion's Run L.P. and Omni Lookout Ridge, L.P., has extended the Debtors' exclusive time to file a plan of reorganization to December 4, 2017, as well as the period for obtaining plan confirmation to February 5, 2018. As reported by the Troubled Company Reporter on October 11, 2017, the Debtors filed their second motion requesting the Court for an additional extension of the Exclusive Plan Filing Period and the Plan Solicitation Period. The Debtors told the Court that ample cause exists for granting an extension of their exclusivity period to file and confirm a plan, considering that: (a) Only a short period of time has elapsed since the commencement of the case; (b) There will be prompt resolution/trial of the Stay Motions; (c) The Debtors continue to pay their post-petition obligations as they become due and remain in compliance with their duties as debtors-in-possession; (d) The Debtors are making monthly adequate protection payments to their secured lenders; (e) The Debtors have, in good faith, made progress towards reorganization by timely filing a plan and disclosure statement and generating additional monthly income since the case was filed; (f) The Debtors cannot confirm a plan absent resolution of the Stay Motions -- the hearing on this motion is set to occur after the expiration of the Debtors' Exclusivity Period to file a plan; and (g) The Debtors are not seeking an extension to pressure creditors into accepting their reorganization demands. The Debtors previously asked the Court for an extension to unify the Filing and Solicitation Periods across the Omni Lion's Run and Omni Lookout Ridge cases to October 4, 2017, and December 4, 2017, respectively. The Debtors filed their joint plan in June 2017, however consideration of the plan and disclosure statement has been delayed due to contested matters, including motions for relief from stay. The hearings are continued to October 17, and it is unclear whether they will be concluded on that date and whether approval of the Debtors' Amended Disclosure Statement can be taken up. About Omni Lion's Run Omni Lion's Run, L.P., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 17-60329) on May 2, 2017. Drew G. Hall, its manager, signed the petition. Judge Ronald B. King presides over the case. At the time of the filing, the Debtor estimated assets and liabilities of less than $50,000. Omni Lookout Ridge L.P. commenced its Chapter 11 case. (Bankr. W.D. Tex. Case No. 17-60447) on June 6, 2017. Hajjar Peters LLP serves as counsel to the Debtors. ORANGE ACRES: Needs Additional Time to Continue Plan Discussions ---------------------------------------------------------------- Orange Acres Ranch Homeowners Association, Inc. requests the U.S. Bankruptcy Court for the Middle District of Florida to further extend: (a) the 120-day time period during which the Debtor has the exclusive right to propose and file a plan of reorganization through December 29, 2017; (b) the 180-day period during which the Debtor has the exclusive right to solicit acceptances of a plan through February 27, 2018; and (c) the deadline for the Debtor to file its plan and disclosure statement through December 29, 2017. As extended by prior order of the Court, the exclusive period during which the Debtor has to file a plan would expire on October 30, 2017, and the period during which the Debtor has to solicit acceptances of a plan would expire on December 29. The Debtor tells the Court that it needs additional time to complete its discussions with third parties as to various aspects of the plan. About Orange Acres Ranch Homeowners Orange Acres Ranch Homeowners Association, Inc., is listed as a Florida Not For Profit Corporation, which owns and operates a mobile home park known as Orange Acres Ranch. The Park consists of 210 lots, including 73 unimproved lots. The Park amenities include a clubhouse and swimming pool. Orange Acres Ranch Homeowners Association filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 17-04326) on May 18, 2017. The petition was signed by Brent Geary, president. At the time of filing, the Debtor estimated assets and liabilities of $1 million to $10 million. The case is assigned to Judge Michael G. Williamson. The Debtor is represented by Scott A. Stichter, Esq., at Stichter Riedel Blain & Postler, P.A. ORBITE TECHNOLOGIES: Stay Period Extended Until January 2018 ------------------------------------------------------------ Orbite Technologies Inc. on Oct. 31, 2017, said that as part of its continuing efforts to emerge from insolvency protection for the benefit all of its stakeholders, it obtained an extension from the Canadian court of the stay period, and won approval of the release of the remaining $2 million of the DIP Financing. As announced on August 2, 2017, the Superior Court of Quebec (the "CCAA Court") issued a second amended and restated initial order pursuant to the Companies' Creditors Arrangement Act ("CCAA") providing for a stay of all proceedings until October 31, 2017 (the "Stay Period"). On Oct. 30, the CCAA Court granted a motion filed by the Company and issued the following orders: -- extending the Stay Period until January 31, 2018; -- relieving Orbite from its obligation to call the annual meeting of shareholders on or before January 31, 2018 and directing Orbite to call such annual meeting, as the case may be, by April 27, 2018; -- establishing a claims procedure for claims against the Company; and -- directing PricewaterhouseCoopers, to release the balance of the Debtor in Possession ("DIP") financing representing an amount of $2,037,666, to be used by the Company in accordance with the terms and conditions of the DIP financing and the August 1, 2017 court order. Based on the cashflow projections filed by Orbite with the CCAA Court, the Company expects to have liquidities until the week of April 22, 2018 taking into account the released balance. Accordingly, the Company believes that such orders will be beneficial to all stakeholders by giving it the required time and resources to emerge from CCAA protection. There can be no guarantees that the Company will be successful in its restructuring efforts or will emerge from CCAA protection. Update on the Calcination Equipment Orbite and the calcination equipment supplier's technical teams continued to work very closely to resolve the issues with the calcination equipment. -- An extensive root causes analysis was conducted and is now complete. The different causes contributing to the failures of the electric heating system have been identified and confirmed; -- The solution to the heating system failure issues has been indentified, modeled, and evaluated and is now entering the detailed engineering phase, by the equipment supplier; -- Solutions to the other issues identified are mostly finalized and are into the detailed engineering phase, also carried out by the equipment supplier. The initial diagnostic phase carried out by the equipment supplier took longer than it originally planed, consequently, production activities are expected to commence in the latter part of Q1 2018, subject to raising adequate financing and implementing the contemplated supplier-related solutions. The Company will provide further updates as developments occur. About Orbite Orbite Technologies Inc. (nex:ORT.H) is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Quebec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallee deposit. The Company's portfolio contains 15 intellectual property families, including 45 patents and 48 pending patent applications in 11 different countries and regions. The first intellectual property family is patented in Canada, USA, Australia, Japan and Russia. The Company also operates a state of the art technology development center in Laval, Quebec, where its technologies are developed and validated. Orbite Technologies in April 2017 filed a petition for continuance of the Bankruptcy and Insolvency Act proceedings under the Companies' Creditors Arrangement Act The Superior Court of Quebec granted the petition and issued an initial order pursuant to the CCAA on April 28, 2017. PricewaterhouseCoopers Inc. has been appointed as Monitor. P3 FOODS: Deadline to File Disclosure Statement Moved to Jan. 16 ---------------------------------------------------------------- Judge Donald R. Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois, upon the motion of P3 Foods, LLC for an extension of time to file its Plan and Disclosure Statement, has continued the deadline for filing of the Plan and Disclosure Statement to January 16, 2018. About P3 Foods, LLC P3 Foods, LLC, which operates nine Burger King franchises in Minneapolis, Minnesota, filed a chapter 11 petition (Bankr. N.D. Ill. Case No. 16-32021) on Oct. 6, 2016. The case is assigned to Judge Donald Cassling. The Debtor tapped Richard L. Hirsh, Esq., at Richard L. Hirsh, P.C., as counsel. The Debtor also engaged Aldridge Chasewater LLC as accountant. An official committee of unsecured creditors has not been appointed in the case. PAROLE BESTGATE: November 7 Plan Objection Deadline --------------------------------------------------- A Plan of Reorganization and a Disclosure Statement were filed by Parole Bestgate LLC on September 11, 2017. The Hon. David E. Rice of the U.S. Bankruptcy Court for the District of Maryland will hold a hearing to consider the approval of the Disclosure Statement, combined with the hearing of confirmation of the Debtor's Plan of Reorganization on November 15, 2017 at 10:00 a.m. The last day for filing and serving written objections pursuant to Federal Bankruptcy Rules 3017(a) and for filing and serving written objections to confirmation of the Plan will be on November 7, 2017. The last day for filing written acceptances or rejections of the Plan is fixed on November 7, 2017. Attorney for Plan Sponsor: Michael J. Lichtenstein, Esq. Shulman Rogers Gandal Pordy & Ecker, PA 12505 Park Potomac Avenue, 6th Floor Potomac, MD 20854 About Parole Bestgate LLC Parole Bestgate LLC owns and operates a commercial office building located in Annapolis, Maryland. James Joseph Sokolis filed an involuntary Chapter 11 petition for Parole Bestgate LLC (Bankr. D. Md. Case No. 16-11840) on Feb. 17, 2016. The case is assigned to Judge David E. Rice. On March 29, 2016, the Court entered an order for relief in the Chapter 11 case. The Debtor is represented by Michael J. Lichtenstein, Esq. and Megan A. Raker, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., of Potomac, Maryland. PERFORMANCE SPORTS: Debtor Wins OK of Plan Disclosures ------------------------------------------------------ Old PSG Wind-down Ltd., formerly, Performance Sports Group Ltd., on Nov. 1, 2017, disclosed that the United States Bankruptcy Court for the District of Delaware has approved the disclosure statement (the "Disclosure Statement") with respect to the first amended joint Chapter 11 plan of liquidation (the "Plan") in the Debtors' jointly administered Chapter 11 cases pending in the Bankruptcy Court filed by the Company and its affiliated debtors (collectively, the "Debtors"). The Bankruptcy Court also approved the related solicitation procedures and materials and authorized the Debtors to commence soliciting creditors and holders of equity interests entitled to vote to accept or reject the Plan. The Company had previously obtained authorization from the Ontario Superior Court of Justice (Commercial List) (the "Canadian Court") to solicit votes and elections by holders of claims and equity interests with respect to the treatment of their claims and equity interests through the Plan in accordance with, and pursuant to, the process approved by the Bankruptcy Court. The Bankruptcy Court and Canadian Court are jointly overseeing the Debtors' restructuring proceedings. The Plan is based on a global settlement among the Debtors and their stakeholders that, among other things, is intended to provide for payment to the Debtors' creditors in the full amount of their allowed claims and the potential distribution of the Debtors' remaining assets to the Company's shareholders of an as yet indeterminate amount. The Plan also incorporates a settlement that provides for distributions to the Plumbers & Pipefitters National Pension Fund, in its capacity as court-appointed lead plaintiff (the "Lead Plaintiff") in the securities class action litigation styled as Nieves v. Performance Sports Group Ltd., et al., Case No. 1:16-CV-3591-GHW (S.D.N.Y.) on behalf of the Lead Plaintiff and a putative class and resolves certain disputes regarding confirmation of the Plan. The Debtors intend to proceed expeditiously to commence the mailing of ballots and other solicitation materials concerning the Plan in connection with the solicitation of votes to accept or reject the Plan. If the Plan is accepted by the necessary number and amount of the Debtors' stakeholders entitled to vote, the Debtors will seek confirmation of the Plan by the Bankruptcy Court and a companion distribution and approval order (the "CCAA Approval Order") from the Canadian Court, under the Companies' Creditors Arrangement Act, to effectuate the Plan in the United States and Canada, respectively. A joint hearing before the Bankruptcy Court and the Canadian Court to confirm the Plan and obtain the CCAA Approval Order is currently scheduled to be heard on or about December 20, 2017. The Plan and the Disclosure Statement are available on https://cases.primeclerk.com/PSG and www.ey.com/ca/psg. About Performance Sports Exeter, N.H.-based Performance Sports Group Ltd. -- http://www.PerformanceSportsGroup.com/-- is a developer and manufacturer of ice hockey, roller hockey, lacrosse, baseball and softball sports equipment, as well as related apparel and soccer apparel. On Oct. 31, 2016, Performance Sports Group Ltd. and certain of its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the District of Delaware and commenced proceedings under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice. The U.S. Debtors are: BPS US Holdings Inc.; Bauer Hockey, Inc.; Easton Baseball/Softball Inc.; Bauer Hockey Retail Inc.; Bauer Performance Sports Uniforms Inc.; Performance Lacrosse Group Inc.; BPS Diamond Sports Inc.; and PSG Innovation Inc. The Canadian Debtors are: Performance Sports Group Ltd.; KBAU Holdings Canada, Inc.; Bauer Hockey Retail Corp.; Easton Baseball/Softball Corp.; PSG Innovation Corp. Bauer Hockey Corp.; BPS Canada Intermediate Corp.; BPS Diamond Sports Corp.; Bauer Performance Sports Uniforms Corp.; and Performance Lacrosse Group Corp. The Debtors hired Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; Stikeman Elliott LLP as Canadian legal counsel; Centerview LLP as investment banker to the special committee; Alvarez & Marsal North America, LLC, as restructuring advisor; Joele Frank, Wilkinson, Brimmer, Katcher as communications & relations advisor; KPMG LLP as auditors; and Prime Clerk LLC as notice, claims, solicitation and balloting agent. Ernst & Young LLP is the monitor in the CCAA cases. The Monitor tapped Thornton Grout Finnigan LLP, Allen & Overy LLP, and Buchanan Ingersoll & Rooney PC as attorneys. Andrew R. Vara, Acting U.S. Trustee for Region 3, on Nov. 10, 2016, appointed three creditors of BPS US Holdings, Inc., parent of Performance Sports, to serve on the official committee of unsecured creditors. The Creditors' Committee retained by Blank Rome LLP as counsel, Cassels Brock & Blackwell LLP as Canadian co-counsel, and Province Inc. as financial advisor. The U.S. Trustee appointed a committee of equity security holders. The equity committee is represented by Natalie D. Ramsey, Esq., and Mark A. Fink, Esq., at Montgomery, McCracken, Walker & Rhoads, LLP; and Robert J. Stark, Esq., Steven B. Levine, Esq., James W. Stoll, Esq., and Andrew M. Carty, Esq., at Brown Rudnick LLP. The U.S. Court appointed M.J. Renick & Associates LLC as the fee examiner. * * * As reported by the Troubled Company Reporter, effective as of Feb. 27, 2017, the Company consummated the sale of substantially all of the assets of the Company and its North American subsidiaries, including its European and global operations, pursuant to an asset purchase agreement, dated as of Oct. 31, 2016, as amended, by and among the Sellers, 9938982 Canada Inc., an acquisition vehicle co-owned by affiliates of Sagard Holdings Inc. and Fairfax Financial Holdings Limited, and the designated purchasers party thereto, for a base purchase price of US$575 million in aggregate, subject to certain adjustments, and the assumption of related operating liabilities. The transaction was the culmination of the process commenced by the Sellers pursuant to creditor protection proceedings launched on Oct. 31, 2016, in the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act, and in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the Bankruptcy Code, as amended. The Company conducted a court-supervised sale and auction process as part of its Canadian and U.S. court proceedings. The bid made by the Purchaser served as the "stalking horse" bid for purposes of the process and was ultimately determined to be the successful bid in accordance with the related court approved bidding procedures. In accordance with, and pursuant to, the terms and conditions of the Agreement, the Company has changed its name to "Old PSG Wind-down Ltd." from "Performance Sports Group Ltd." effective as of March 20, 2017. BPS US Holdings Inc. changed its name to Old BPSUSH Inc. On Aug. 25, 2017, the Debtors filed their Plan of Liquidation and related Disclosure Statement. On Oct. 19, 2017, the Debtors filed their modified Plan of Liquidation and modified Disclosure Statement. PETCO ANIMAL: Bank Debt Trades at 17.60% Off -------------------------------------------- Participations in a syndicated loan under Petco Animal Supplies is a borrower traded in the secondary market at 82.40 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.25 percentage points from the previous week. Petco Animal Supplies pays 325 basis points above LIBOR to borrow under the $2.506 billion facility. The bank loan matures on Jan. 26, 2023 and Moody's did not give any rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. PRIME METALS: Unsecureds to Get $175,000 Under Plan --------------------------------------------------- Prime Metals & Alloys, Inc., filed with the U.S. Bankruptcy Court for the Western District of Pennsylvania a disclosure statement to accompany the plan dated October 3, 2017. The hearing to consider the approval of the disclosure statement will be held November 2, 2017 at 10:00 a.m. The last day for filing and serving objections to the disclosure statement, as well as for filing a request for payment of administrative expense, pursuant to 11 U.S.C. Section 503, will be on October 26, 2017. On August 18, 2017, the Debtor and the Buyer consummated the sale of substantially all of the Debtor's assets. From the Purchase Price, the Debtor is holding $742,500 in escrow, which is designated for allowed administrative claims and general unsecured claims. Class 1 secured claim of S&T Bank received a distribution from the sale at closing, as previously agreed to by the Debtor, Buyer, and S&T Bank, and approved by the Court in the Sale Order. The Priority Claims under Class 2 were also paid at the time of closing. The Debtor has estimated allowable unsecured claims in the aggregate sum of $7,624,390.55. Each Class 3 general unsecured creditors will receive their pro rata share of the unsecured creditor carve-out, in the amount of $175,000, reserved from the Purchase Price and currently held in escrow by the Debtor's Counsel. In the event that the Allowed 503(b)(9) Claims and Class 2 Priority Claims are not paid in full through the disbursement of net recoveries, the Unsecured Creditor Carve-Out will first be used to pay any remaining Allowed 503(b)(9) Claims then Class 2 Priority Claims in full, with the remainder of the Unsecured Creditor Carve-Out to be used to pay the Allowed Class 3 General Unsecured Claims. The Plan is funded by the amount held in escrow by the Debtor's Counsel, carved-out from the Sale of the Debtor's Assets, plus Net Recoveries on Recovery Actions pursued by the Debtor and Plan Administrator. A full-text copy of the Disclosure Statement, dated October 3, 2017, is available for free at http://tinyurl.com/yb2n8jxg About Prime Metals & Alloys Prime Metals & Alloys, Inc., began as a scrap-trading company and has grown to manufacturing and providing alloys, ingots, specialty scrap materials and customized scrap blends. Prime Metals & Alloys sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 17-70164) on March 2, 2017, estimating assets of $1 million to $10 million and $10 million to $50 million in debt. The petition was signed by Richard Knupp, president. Judge Jeffery A. Deller is assigned to the case. The Debtor tapped Kirk B. Burkley, Esq., Allison L. Carr, Esq., and Daniel R. Schimizzi, Esq., at Bernstein-Burkley, P.C., as counsel. H2R CPA LLC serves as the Debtor's accountant. The Debtor employed Strategic Advisors, Inc., to market its assets. Andrew Vara, acting U.S. trustee for Region 3, on March 22 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Prime Metals & Alloys, Inc. The Troubled Company Reporter has reported on August 28, 2017 that Resco Products, Inc., has left the C0ommittee, and the remaining committee members now include: (1) Anderson Electric; (2) Exelos Computer Services; (3) Wack Manufacturing; and (4) Custom Alloy Corporation. The official committee of unsecured creditors retained Fox Rothschild LLP as legal counsel. PROFLO INDUSTRIES: Taps Patricia A. Kovacs as Legal Counsel ----------------------------------------------------------- ProFlo Industries, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire Patricia A. Kovacs Attorney as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist in any potential sale of its assets; negotiate with creditors; prepare a plan of reorganization; and provide other legal services related to its Chapter 11 case. The firm's hourly rates are: Patricia Kovacs, Esq. $250 Associate Attorneys $150 Legal Assistant $100 Kovacs received an advance retainer of $30,000, less the filing fee of $1,717. The firm does not have any connection with the Debtor's creditors or any other "party-in-interest," according to court filings. The firm can be reached through: Patricia A. Kovacs, Esq. Patricia A. Kovacs Attorney P.O. Box 257 Curtice, OH 43412 Phone: (419) 270-3649 Fax: (866) 812-2199 Email: patricia.a.kovacs@gmail.com About ProFlo Industries Headquartered in Alvada, Ohio, ProFlo Industries, LLC, is an Ohio Limited Liability Company engaged in the airline refueling business. The principal customers of the business are multi-national companies providing goods, services and advice in the global aviation industry. ProFlo consists of one shareholder: Terry N. Bosserman who owns 100% of the shares. ProFlo Industries filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 17-33184) on Oct. 8, 2017, estimating its assets at between $500,001 and $1 million and liabilities between $100,001 and $500,000. The petition was signed by Terry N. Bosserman, president. The Debtor is represented by Patricia A. Kovacs, Attorney, as counsel. PUERTO RICO ELECTRIC: Committee to Probe $300-Mil. Whitefish Deal ----------------------------------------------------------------- Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Official Committee of Unsecured Creditors of the Commonwealth of Puerto Rico, et al., requests Court authority to pursue discovery with respect to the bidding, negotiation, and engagement process used by the Puerto Rico Electric Power Authority ("PREPA") to identify contractors for the repair of Puerto Rico's utility system -- in particular, its engagement of Whitefish Energy Holdings, LLC -- beginning with targeted document requests to PREPA and Whitefish and depositions of relevant individuals as may be identified. In a motion filed with the U.S. District Court for the District of Puerto Rico on Oct. 31, 2017, the Creditors Committee seeks authority to investigate these issues: * The process by which PREPA identified potential contracting parties for utility construction and repair work in Puerto Rico; * The efforts PREPA made to evaluate the party or parties best suited to the utility construction and repair work contemplated; * The process used to evaluate Whitefish and any other potential contractors for the work contemplated; * The negotiation of the terms, conditions, and economic provisions of the Whitefish Contract; * Any connections between Whitefish and government officials or others or any potential lobbying efforts which may have influenced the selection of Whitefish as a contractor or other conflict of interest issues which may have affected the selection of Whitefish and/or the negotiation of the Whitefish Contract; * Any evidence of Whitefish's actual incurred costs or cost estimates bearing on the reasonableness of the services provided by Whitefish; * Whether Whitefish was properly determined to be both qualified to, and capable of, performing under the Whitefish Contract; * Any discussions between PREPA, Whitefish, and other government agencies (including but not limited to FEMA) and the Oversight Board related to the execution of the Whitefish Contract. Counsel to the Committee, Luc A. Despins, Esq., at Paul Hastings LLP, explains that as is well-known, the devastation caused by Hurricanes Irma and Maria resulted in a natural disaster of vast scale. The hurricanes swept through Puerto Rico in a span of roughly two weeks, leaving thousands of families displaced and crippling key infrastructure. As of Oct. 30, 2017, Puerto Rico's power authority, PREPA, remains essentially offline -- with 73.8% of electricity customers without power. The situation entirely hobbles recovery efforts as the ability to generate and deliver electricity is crucial to Puerto Rico's economy and to its ability to recover economically and repay creditors. Every day that passes without a coordinated and efficient response to this power generation and distribution crisis inhibits the ability of Puerto Rico's economy to rebound. As a result of this devastation, and in order to speed up the island's recovery, the President of the United States issued emergency declarations pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as Amended (the "Stafford Act"), Title 42 U.S.C. Sec. 5170, 5170a, & 5170b, and Congress is currently in the process of authorizing funding packages for the President's signature. A significant portion of that funding will likely be dedicated to the repair of PREPA's electrical grid. As the Oversight Board noted in a recent filing, PREPA generates, transmits, and distributes substantially all of the electric power used in the Commonwealth, and ranks first in the United States among municipal utilities in number of clients and revenues. Therefore, PREPA's reconstruction and ability to provide reliable power distribution at reasonable rates is essential not only to PREPA's recovery, but also to the recovery of the Commonwealth and its instrumentalities. According to Mr. Despins, it is imperative for Puerto Rico's residents and its creditors that this money is spent wisely and in a manner that quickly and efficiently promotes the recovery on the island. Nature of Whitefish's Selection Mr. Despins relates that, given the centrality of PREPA to Puerto Rico's recovery, the Committee is concerned about PREPA's recent actions and the public controversy those actions have created. As has been widely reported, on Oct. 17, 2017, PREPA's Executive Director Ricardo Luis Ramos Rodriguez signed a $300 million contract with Whitefish making Whitefish a central party to the repair and upgrade of the Commonwealth's utility grid. Unfortunately, the process behind the selection of Whitefish appears to carry the risk that the natural disasters that befell the Puerto Rico electrical grid will be followed by a man-made disaster. Public reports and a review of the Whitefish Contract suggest that: -- Whitefish lacked the qualifications and experience to perform the tasks PREPA has assigned it; -- The Whitefish Contract contained numerous suspicious provisions that do not work to PREPA's benefit, including what appear to be grossly excessive fees (e.g., hourly rates that appear to be multiples of prevailing market costs); -- PREPA represented, apparently incorrectly, that the Oversight Board and the Federal Emergency Management Agency ("FEMA") approved the Whitefish Contract; and -- The selection of Whitefish may have been the result of political favoritism rather than a choice of the best available contractor. In a news conference on Oct. 29, as a result of these concerns, Governor Ricardo Rossello called for the Whitefish Contract to be canceled "immediately." Later that day, PREPA's Executive Director Ricardo Ramos announced that the agreement would be terminated once Whitefish completes all of its outstanding work. According to Mr. Ramos, the process of hiring (and then replacing) Whitefish will likely have delayed work by 10 to 12 weeks, and PREPA has already committed itself to pay Whitefish $21 million for the work to date on top of at least $11 million to cancel the agreement. These serious questions around the Whitefish Contract highlight the risk that PREPA may squander or otherwise compromise any entitlement to much-needed federal funding, a result that would be disastrous for PREPA, the Commonwealth, and its creditors. These questions also raise serious concerns around PREPA's core ability to manage the critical tasks it must undertake. The discovery sought is, Mr. Despins argues, warranted both to evaluate the propriety of the original engagement of Whitefish and PREPA's ongoing ability to execute its responsibilities. Even though PREPA apparently plans to cancel the Whitefish Contract, discovery remains essential to understand the extent of any potential gaps in procedures or controls that may have allowed the Whitefish Contract to be signed, and to ensure the stakeholders in these Title III Cases that such missteps have not already occurred with other contracts and, at a minimum, will not be repeated. Qualifications of Whitefish According to the Committee, PREPA does not appear to have undertaken any sort of open and competitive bidding process related to the selection of Whitefish, nor does Whitefish appear to have the background or experience required to helm the rebuilding of the Commonwealth's electric utility infrastructure. The Committee notes, among other things, that: * It appears that, at the time Hurricane Maria hit, Whitefish had only two employees and was operated out of a one-story wooden house in Whitefish, Montana. * Whitefish's only prior federal experience related to "two small federal contracts in Arizona with the Department of Energy: a $172,000 deal to replace metal poles and install 3 miles of wiring, and a $1.3 million contract to revamp sections of a 4.8-mile transmission line." The Committee also points out PREPA has failed to offer any convincing justification for flatly refusing "mutual aid" offers from the American Public Power Association ("APPA"), of which PREPA is a member. Those mutual aid arrangements, which were utilized in Texas and Florida following Hurricanes Harvey and Irma, were established in order to organize a network of state and regional public power utilities to restore electricity quickly in the event of emergencies like Hurricane Maria. In fact, in Florida, just one day after Hurricane Irma's departure from that state, Florida Power & Light said that it had more than 20,000 workers from 30 states -- and even Canada -- deployed to restore power. Following its own recovery, Florida Power & Light further stated that it had teams assembled as early as October 1, 2017 "ready to help Puerto Rico." According to the Washington Post, Florida Power & Light never received a response from PREPA's management to the offer of assistance. Provisions in Whitefish Contract According to the Committee, the Whitefish Contract contains numerous troubling provisions that call into question whether it reflected a vigorous arms-length transaction. Among other things, the Contract: * sets forth eye-popping reimbursement rates of up to $330 per hour for a site supervisor -- climbing to $462 for supervisors hired by subcontractors, who will presumably make up much of Whitefish's workforce. * provides that Whitefish would be paid $319.04 per hour worked by a journeyman lineman, which is "almost 10 times the average rate for a journeyman line worker in the United States, according to the website Payscale.com." Whether these rates reflect prevailing market conditions is open to question given PREPA's failure to pursue competitive bidding of any sort. Even more troubling is the fact that PREPA apparently negotiated away audit rights -- for itself and others -- to evaluate these economic terms in the future. The Whitefish Contract provides that no agency or entity would ever be able to audit these exorbitant charges: "[i]n no event shall PREPA, the Commonwealth of Puerto Rico, the FEMA Administrator, the Comptroller General of the United States [GAO], or any of their authorized representatives have the right to audit or review the cost and profit elements of the labor rates specified herein." In other words, PREPA surrendered the right to audit one of the most significant cost components Whitefish is likely to charge. Potential Political Influence as to Choice of Whitefish Given the various issues surrounding the Whitefish Contract, it is not surprising that reports have surfaced suggesting the Whitefish Contract was awarded not on the basis of merit but instead on the basis of political favoritism. While the Committee has no present ability to validate the troubling news stories available, it notes with concern reports that: -- Whitefish CEO Andy Techmanski was from the same small town (Whitefish, Montana) as Interior Secretary Ryan Zinke and further that Messrs. Techmanski and Zinke are friends and that Mr. Zinke's son worked with Whitefish this past summer. Mr. Zinke has denied that had he had any involvement in the selection of Whitefish; -- Elias Sanchez Sifonte, formerly the Governor's representative to the Oversight Board and rumored to be a close personal friend of the Governor, lobbied PREPA to hire Whitefish, perhaps to benefit himself. In fact, former Puerto Rico Governor Anabel Acevedo Vila recently stated on a radio program that, "instead of becoming a bona fide advisor to the Governor . . . [Sanchez] saw it as a business opportunity"; and -- According to Eduardo Bhatia, the former president of the Puerto Rico Senate and sitting Senate minority leader, both Whitefish and the Office of the First Lady share the same director of Public Relations. Replacement of Whitefish In a news conference on October 29, Governor Ricardo Rossello announced he would seek the immediate cancellation of the Whitefish Contract and had discussed the use of mutual aid agreements with the governors of New York and Florida. Just a few hours later, PREPA director Ricardo Ramos announced that the contract would be canceled once Whitefish had completed its current work -- which would delay the repair of Puerto Rico's electrical grid by 10 to 12 weeks. According to the Committee, the situation remains fluid at the moment, but one thing is clear: there is a need to ensure that PREPA's bidding process is conducted transparently and that any contractors selected by PREPA -- both now and in the future -- do not put the Commonwealth or its instrumentalities at risk of losing FEMA funds. * * * Judge Laura Taylor Swain, who presides over the Title III cases, on Oct. 30, 2017, entered an order directing that the urgent motion of the Committee be referred to Magistrate Judge Judith Dein pursuant to 28 U.S.C. Sec. 636(b). 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, 2017. 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 on-board 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 ELECTRIC: Oversight Board Proposes New PREPA Chief -------------------------------------------------------------- The Financial Oversight and Management Board for Puerto Rico, as the representative of the Puerto Rico Electric Power Authority ("PREPA") in the Title III case pursuant to section 315(b) of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"), submitted on Oct. 26, 2017, to the U.S. District Court for the District of Puerto Rico an urgent motion seeking entry of an order confirming Noel Zamot as PREPA's Chief Transformation Officer with all powers of a chief executive officer reporting to the Oversight Board. Martin J. Bienenstock, Esq., at Proskauer Rose LLP, lead counsel to the Oversight Board, explains that even prior to Hurricane Maria, the reliability and cost of power was the dominant determinant of the Commonwealth of Puerto Rico's ability to halt its negative economic growth and to attain a sustainable economy. The cost of power is a major cost of doing business and of living in the Commonwealth. To carry out its statutory missions of returning the Commonwealth to fiscal responsibility and access to the capital markets, the Oversight Board is determined to do everything within its power to solve the current, prolonged power outage, and to establish a modern, economically effective power generation and transmission facility for the good of the Commonwealth and all its stakeholders. One month has passed since Hurricane Maria made landfall, yet approximately 80% of PREPA's customers lack access to the electric power grid. Without electricity to power businesses on the island, economic activity in numerous sectors has ground to a halt. Similarly, many schools have yet to reopen. The situation is dire, and a concerted and coordinated effort is needed on all fronts to make the right investments and to prevent missteps at this critical juncture. Ensuring that recovery efforts at PREPA are conducted efficiently, with all requisite expertise, and in accordance with best practices, will lay the groundwork for the island's post-hurricane economic recovery and revitalization under any fiscal plan. Existing PREPA management has taken certain independent steps in response to the destruction and devastation of PREPA's power grid, particularly its transmission and distribution systems. Unfortunately, despite PREPA management's efforts, restoring electricity efficiently and quickly to the island has not been achieved. Moreover, an emergency infusion of substantial capital is required to fund these recovery efforts. At least initially, a significant portion of those funds will be provided by the federal government, which makes active and effective coordination with the appropriate federal agencies all the more important. The appointment of a CTO, according to the Oversight Board, will enable a coordinated strategy for contracting recovery projects and streamlining funding under the direction of a seasoned professional with expertise in disaster response and recovery. The Oversight Board, as the sole representative and trustee of PREPA, seeks to have the Court confirm its appointment of Noel Zamot as PREPA's CTO, having the powers of a chief executive officer and reporting to the Oversight Board. Among other things, the CTO will be charged by the Oversight Board with developing a comprehensive and properly sequenced power restoration plan, and will direct disaster recovery and rebuilding efforts in conjunction with federal government agencies (including FEMA, the Department of Homeland Security, the Department of Housing and Urban Development, and the Army Corps of Engineers) and place PREPA on the path towards transformation. The CTO will also ensure PREPA is run in a manner compatible with the overall recovery for Puerto Rico and will communicate to the Oversight Board and the Government on behalf of management. The CTO will be ultimately responsible for implementing PREPA's long and short term plans in a manner consistent with the PREPA's certified fiscal plan (as will be amended when the Oversight Board has better visibility into PREPA's future). A protocol requiring the CTO to report directly to the Oversight Board will further enhance access to funds by alleviating concerns within the federal government regarding the direction of PREPA's recovery and use of federal money. Qualifications of Noel Zamot as CTO Mr. Zamot is a retired Air Force colonel who was born and raised in Puerto Rico. According to the Oversight Board, Mr. Zamot is eminently qualified to lead the transformation of PREPA to a more modern, efficient, and resilient power utility having served for 25 years in active duty with the U.S. Air Force, where, among other things, he managed energy and infrastructure projects. As a private sector executive, he provided engineering expertise to the Department of Defense, and launched and managed a successful business. Most recently, the Oversight Board, in consultation with Governor Rossello, designated Mr. Zamot to serve as the Revitalization Coordinator to the Oversight Board. He is a graduate of the University of Michigan and MIT. The Oversight Board will provide Mr. Zamot to serve as PREPA's CTO pursuant to a secondment, whereby the Oversight Board will continue to compensate Mr. Zamot. He shall not receive additional compensation from PREPA. 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, 2017. 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 on-board 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: COFINA Senior Bondholders' Coalition Update Holdings ----------------------------------------------------------------- The COFINA Senior Bondholders' Coalition, consisting of certain individual members and certain institutions that hold and/or manage funds, entities and/or accounts holding approximately 33% of all senior bonds (the "Senior Bonds") issued by the Puerto Rico Sales Tax Financing Corporation ("COFINA"), on Oct. 26, 2017, submitted a second supplemental verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, to update the disclosable economic interests currently held by the Coalition. Certain members of the COFINA Senior Bondholders' Coalition initially retained Quinn Emanuel Urquhart & Sullivan, LLP ("Quinn Emanuel") in June 2015. In August 2015, the COFINA Senior Bondholders' Coalition retained Reichard & Escalera LLC (with Quinn Emanuel, "Counsel"). From time to time thereafter, certain additional holders of COFINA Senior Bonds have joined the COFINA Senior Bondholders' Coalition. Counsel appears in the Case on behalf of the COFINA Senior Bondholders' Coalition. On July 25, 2017, Counsel submitted the Verified Statement of the COFINA Senior Bondholders' Coalition Pursuant to Federal Rule of Bankruptcy Procedure 2019. On August 18, 2017, Counsel submitted the First Supplemental Verified Statement. Counsel submitted the Second Supplemental Statement to update the disclosable economic interests currently held by the COFINA Senior Bondholders' Coalition. The members of the COFINA Senior Bondholders' Coalition hold disclosable economic interests, or act as investment advisors or managers to funds, entities and/or accounts or their respective affiliates that hold disclosable economic interests in relation to COFINA. The members of COFINA Senior Bondholders' Coalition hold, or are the investment advisors or managers to funds, entities and/or accounts that hold, approximately $2,585,880,950 in aggregate amount of COFINA Senior Bonds (based on their accreted value as of October 16, 2017) and approximately $708,744,510 in aggregate amount of COFINA subordinate bonds (based on their accreted value as of October 16, 2017): 1. Jose F. Rodriguez PO Box 8848, San Juan, PR 00910 * $250,000 Uninsured COFINA Senior Bonds 2. Fideicomiso Plaza 131 Dorado Beach East, Dorado PR 00646 * $1,210,000 Uninsured COFINA Senior Bonds 3. Decagon Holdings 1, L.L.C. 800 Boylston Street, Boston, MA 02199 * $3,275,195 Insured COFINA Senior Bonds * $26,110,399 Uninsured COFINA Senior Bonds * $27,599,409 Uninsured COFINA Subordinate Bonds 4. Decagon Holdings 2, L.L.C. 800 Boylston Street, Boston, MA 02199 * $4,321,078 Insured COFINA Senior Bonds * $33,980,291 Uninsured COFINA Senior Bonds * $35,002,710 Uninsured COFINA Subordinate Bonds 5. Decagon Holdings 3, L.L.C. 800 Boylston Street, Boston, MA 02199 * $1,750,967 Insured COFINA Senior Bonds * $13,887,336 Uninsured COFINA Senior Bonds * $14,704,241 Uninsured COFINA Subordinate Bonds 6. Decagon Holdings 4, L.L.C. 800 Boylston Street, Boston, MA 02199 * $17,152,073 Insured COFINA Senior Bonds * $141,074,331 Uninsured COFINA Senior Bonds * $146,170,718 Uninsured COFINA Subordinate Bonds 7. Decagon Holdings 5, L.L.C. 800 Boylston Street, Boston, MA 02199 * $5,278,618 Insured COFINA Senior Bonds * $42,075,985 Uninsured COFINA Senior Bonds * $44,624,498 Uninsured COFINA Subordinate Bonds 8. Decagon Holdings 6, L.L.C. 800 Boylston Street, Boston, MA 02199 * $1,999,395 Insured COFINA Senior Bonds * $15,890,556 Uninsured COFINA Senior Bonds * $16,113,852 Uninsured COFINA Subordinate Bonds 9. Decagon Holdings 7, L.L.C. 800 Boylston Street, Boston, MA 02199 * $11,539,381 Insured COFINA Senior Bonds * $93,377,700 Uninsured COFINA Senior Bonds * $106,128,149 Uninsured COFINA Subordinate Bonds 10. Decagon Holdings 8, L.L.C. 800 Boylston Street, Boston, MA 02199 * $3,251,234 Insured COFINA Senior Bonds * $27,764,920 Uninsured COFINA Senior Bonds * $30,046,076 Uninsured COFINA Subordinate Bonds 11. Decagon Holdings 9, L.L.C. 800 Boylston Street, Boston, MA 02199 * $2,078,748 Insured COFINA Senior Bonds * $16,345,007 Uninsured COFINA Senior Bonds * $17,796,793 Uninsured COFINA Subordinate Bonds 12. Decagon Holdings 10, L.L.C. 800 Boylston Street, Boston, MA 02199 * $1,497,379 Insured COFINA Senior Bonds * $11,751,906 Uninsured COFINA Senior Bonds * $12,783,735 Uninsured COFINA Subordinate Bonds 13. Tilden Park Capital Management LP (on behalf of its participating clients) 452 5th Ave, 28th Floor New York, NY 10018 * $13,215,300 Insured COFINA Senior Bonds * $478,854,444 Uninsured COFINA Senior Bonds * $9,223,136 Uninsured COFINA Subordinate Bonds 14. GoldenTree Asset Management LP (on behalf of its participating clients) 300 Park Avenue 20th Floor New York, NY 10022 * $153,121,027 Insured COFINA Senior Bonds * $466,427,273 Uninsured COFINA Senior Bonds * $233,030,249 Uninsured COFINA Subordinate Bonds 15. Canyon Capital Advisors LLC (on behalf of its participating clients) 2000 Avenue of the Stars 11th Floor Los Angeles, CA 90067 * $301,655,000 Uninsured COFINA Senior Bonds 16. Old Bellows Partners LP (on behalf of its participating clients) 660 Madison Ave, #20 New York, NY 10065 * $216,134,665 Uninsured COFINA Senior Bonds 17. Scoggin Management LP (on behalf of its participating clients) 660 Madison Ave, #20 New York, NY 10065 * $62,716,100 Uninsured COFINA Senior Bonds 18. Whitebox Advisors LLC (on behalf of its participating clients) 3033 Excelsior Boulevard, Suite 300 Minneapolis, MN 55416 * $97,196,735 Uninsured COFINA Senior Bonds * $2,863,709 Uninsured COFINA Subordinate Bonds 19. Taconic Capital Advisors L.P. (on behalf of funds under management) 280 Park Avenue, 5th Floor New York, NY 10017 * $108,225,797 Insured COFINA Senior Bonds * $11,850,000 Uninsured COFINA Senior Bonds * $8,222,234 Uninsured COFINA Subordinate Bonds 20. Cyrus Capital Partners, L.P. (on behalf of its participating clients) 399 Park Avenue 39th Floor New York, NY 10022 * $94,157,137 Insured COFINA Senior Bonds 21. Aristeia Capital, L.L.C. (on behalf of its participating clients) One Greenwich Plaza 3rd Floor Greenwich, CT 06830 * $107,925,000 Uninsured COFINA Senior Bonds * $4,435,000 Uninsured COFINA Subordinate Bonds 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, 2017. 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 on-board 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 Law offices of Andres W. Lopez, P.S.C., is co-attorney to the AAFAF. 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: FGIC Bid for 90-Day Stay of Suits Facing Objections ---------------------------------------------------------------- The Financial Oversight and Management Board for Puerto Rico, as well as other parties, on Oct. 31, 2017, filed objections to the urgent motion of Financial Guaranty Insurance Company regarding a proposed 90-day stay of all litigation to facilitate the recovery from hurricanes Irma and Maria. Counsel to the Oversight Board, Martin J. Bienenstock, Esq., at Proskauer Rose LLP, tells the U.S. District Court for the District of Puerto Rico that over a month after Hurricane Maria, FGIC propounds an urgent motion about the hurricane, attempting to stall litigation in which it is not even a party. The Oversight Board opposes FGIC's requested "90-day stay of all pending litigation in these Title III cases and all related adversary proceedings." The Board believes that such a stay would be detrimental to Puerto Rico's recovery. Mr. Bienenstock notes that the government has filed pleadings urging the prompt continuation of all litigation because it raises threshold issues requiring resolution before any restructuring can be finalized. A stay, he says, would hinder the Debtors' ongoing efforts to formulate plans of adjustment ("Plans"). The Oversight Board, the Debtors, the Puerto Rico Fiscal Agency and Financial Advisory Authority ("AAFAF"), and many others are working tirelessly to resolve threshold legal disputes, rebuild the island's infrastructure after the devastation wrought by Hurricanes Irma and Maria, and expeditiously set Puerto Rico back on a prosperous path that is fiscally responsible with capital market access. "Delaying such progress by calling for an unnecessary "timeout" will only retard the recovery and yield zero benefits. We understand some creditors desire to delay resolutions of the treatment of existing debt for as long as possible," says Mr. Biennestock. The Official Committee of Retired Employees of the Commonwealth of Puerto Rico also raised an objection to the FGIC's motion. "Movant stylizes its Motion and its request for a sweeping stay as a chance to give "the government and the people of Puerto Rico ...time to recover from the impact of [Hurricane Irma and Hurricane Maria]." That proffered justification, however, is little more than a smoke screen for the Movant's true purpose-to stop these Title III Cases in their tracks except for the Appointments Clause challenge to the constitutionality of PROMESA," says Robert Gordon, Esq., at Jenner & Block LLP, counsel to the Retired Employees Committee. The Puerto Rico Fiscal Agency and Financial Advisory Authority ("AAFAF"), as the entity authorized to act on behalf of the Debtor entities under its authority under the Enabling Act of the Fiscal Agency and Financial Advisory Authority, Act 2-201, objects to any blanket stay of the Title III cases and related litigation. AAFAF desires to move forward with the Title III cases and related litigation with minimal disruption. While AAFAF appreciates FGIC's expressed concern for Puerto Rico's recovery, the democratically elected Government of Puerto Rico has determined that it is in the best interest of the people of Puerto Rico that these Title III cases continue as expeditiously as possible. On Oct. 24, 2017, Financial Guaranty Insurance Company ("FGIC") had filed the Motion requesting a 90-day stay of the Title III cases and all related litigation. In justifying the motion, the FGIC pointed out that roughly four weeks after Hurricane Maria made landfall, approximately 80 percent of the Commonwealth is still without electricity, with some residents having no power for the roughly 45 days since Hurricane Irma skirted north of the island. Governor Rossello optimistically estimates power production will not be restored until mid-December. In addition, about 1 million residents are still without running water. "As a practical matter, prosecuting these Title III Litigations in a vacuum-removed from any commercial considerations-is counterproductive. U.S. Representative Rob Bishop, Chairman of the House Natural Resources Committee, recently acknowledged the Commonwealth's fiscal plan will have to be completely overhauled: "They have to start over again," Bishop said. "This changes the dynamics of that plan. So they're gonna have to redo the overall funding plan again," Martin A. Sosland, Esq., at Butler Snow LLP, counsel to the FGIC, explains. "Litigating based on facts and positions that existed as of May 3, 2017, when the first Title III case was commenced, would be nonsensical on the part of the parties in interest and wasteful of the Court's time and resources. Indeed, as this Court has already seen, certain pending actions challenging the current fiscal plan have or will be dismissed by those parties. Other legal issues may similarly become moot upon the certification of a new fiscal plan that takes into account the post-Hurricanes Irma and Maria landscape in the Commonwealth." Attorneys for Financial Guaranty Insurance Company: Maria E. Pico, Esq. REXACH & PICO, CSP 802 Ave. Fernandez Juncos San Juan PR 00907-4315 Telephone: (787) 723-8520 Facsimile: (787) 724-7844 E-mail: mpico@rexachpico.com - and - Martin A. Sosland, Esq. BUTLER SNOW LLP 5430 LBJ Freeway, Suite 1200 Dallas, TX 75240 Telephone: (469) 680-5502 Facsimile: (469) 680-5501 E-mail: martin.sosland@butlersnow.com - and - Stanford G. Ladner, Esq. BUTLER SNOW LLP 1700 Broadway, 41st Floor New York, NY 10019 Telephone: (646) 606-3996 Facsimile: (646) 606-3995 E-mail: stan.ladner@butlersnow.com - and - Christopher R. Maddux, Esq. J. Mitchell Carrington, Esq. BUTLER SNOW LLP 1020 Highland Colony Parkway, Suite 1400 Ridgeland, MS 39157 Telephone: (601) 985-2200 Facsimile: (601) 985-4500 E-mail: chris.maddux@butlersnow.com mitch.carrington@butlersnow.com - and - Jason W. Callen, Esq. BUTLER SNOW LLP 150 3rd Avenue, South, Suite 1600 Nashville, TN 37201 Telephone: (615) 651-6774 Facsimile: (615) 651-6701 E-mail: jason.callen@butlersnow.com Attorneys for the he Puerto Rico Fiscal Agency and Financial Advisory Authority: John J. Rapisardi, Esq. Suzzanne Uhland, Esq. O'MELVENY & MYERS LLP 7 Times Square New York, NY 10036 Tel: (212) 326-2000 Fax: (212) 326-2061 - and - Peter Friedman, Esq. O'MELVENY & MYERS LLP 1625 Eye Street, NW Washington, DC 20006 Tel: (202) 383-5300 Fax: (202) 383-5414 - and - Andres W. Lopez, Esq. THE LAW OFFICES OF ANDRES W. LOPEZ, P.S.C. 902 Fernandez Juncos Ave. San Juan, PR 00907 Tel: (787) 294-9508 Fax: (787) 294-9519 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, 2017. 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 on-board 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 Law offices of Andres W. Lopez, P.S.C., is co-attorney to the AAFAF. 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: Revises Plan to End Debt Crisis After Hurricanes ------------------------------------------------------------- The Financial Oversight and Management Board for Puerto Rico, created by Congress under the bipartisan Puerto Rico Oversight, Management and Economic Stability Act ("PROMESA"), on Oct. 31, 2017, announced the process toward a revised Fiscal Plan for Puerto Rico, and its intent to certify the plan by Feb. 2, 2018. In its 10th public Board meeting, Executive Director Natalie Jaresko outlined the process for certifying a revised Fiscal Plan with the Government. Several activities -- including an assessment of the damages caused by Hurricane Maria, and renewed plans for fiscal and structural reforms -- will inform the development of a revised Commonwealth Fiscal Plan. The Board will conduct listening sessions through December with stakeholders. Its review of the revised Fiscal Plan will occur during the month of January. The certification is expected on Feb. 2. In addition to the Commonwealth, timelines were established for PREPA, PRASA, HTA, UPR and COSSEC to submit revised fiscal plans for certification by the Board. "The fiscal and structural reforms approved by the Board in the Fiscal Plan certified March 13 were ambitious and would have required unprecedented levels of effort by the Commonwealth, but would have enabled Puerto Rico to achieve fiscal responsibility and renewed access to capital markets," said Jaresko. "Hurricanes Maria and Irma have fundamentally changed Puerto Rico's reality and the revised Fiscal Plan must take that new reality into account. The Board is fully aware that Puerto Rico's precarious fiscal situation will mean a long road to recovery, and its commitment to helping Puerto Rico during these difficult times is stronger than ever." Pursuant to Section 204(b) of PROMESA, the Board also adopted a new government contract approval policy to ensure that Government contracts "promote market competition" and "are not inconsistent with the approved Fiscal Plan." "The policy presented today is designed to safeguard these principles for the benefit of the people of Puerto Rico and to maintain our focus on assuring fiscal responsibility," added Jaresko. "As we have said from the beginning, transparency is an intrinsic component of PROMESA and a guiding principle for the Board's efforts towards Puerto Rico's revitalization." The Board meeting also included an update on the Special Committee's independent investigation into Puerto Rico's debt, and remarks by Noel Zamot, whose appointment as Chief Transformation Officer for PREPA has been submitted to the court. The Board remains committed to Puerto Rico's long-term recovery and ensuring the Commonwealth has the resources needed. "Recognizing the current and future challenges ahead, the Board will continue working with Congress and the Trump Administration," said Jaresko. "We will continue to work in support of the Government to rebuild the Island's infrastructure, and lay an orderly path forward with the goal of rebuilding Puerto Rico as quickly as possible." All relevant material of public interest will be posted on the Oversight Board's website at the conclusion of the meeting. 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, 2017. 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 on-board 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. QUOTIENT LIMITED: Galen Entities Own 16% of Shares as of Oct. 26 ---------------------------------------------------------------- In a Schedule 13D/A filed with the Securities and Exchange Commission, these reporting persons disclosed beneficial ownership of ordinary shares, no par value, of Quotient Limited as of Oct. 26, 2017: Shares Percentage Beneficially of Reporting Person Owned Shares ---------------- ------------ ---------- Galen Partners V LP 6,613,590 14.4% Galen Partners International V LP 564,780 1.2% Galen Management LLC 150,704 0.3% Galen Partners V, L.L.C. 7,178,370 15.6% Zubeen Shroff 7,349,629 16.0% L. John Wilkerson 7,348,129 16.0% David Jahns 7,329,074 15.6% Galen Partners V, L.L.C. is the general partner of Galen LP and Galen International and the Listed Persons are the managing directors of Galen. Galen LP, Galen International, Management, Galen and the Listed Persons expressly disclaim status as a "group" for purposes of this Schedule 13D. The percentage is based upon 45,542,808 Ordinary Shares outstanding, which is the sum of (i) 37,688,125 Ordinary Shares outstanding as of Aug. 4, 2017, as reported in the Issuer's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 filed with the Securities and Exchange Commission on Aug. 8, 2017, and (ii) 7,874,683 shares of Ordinary Shares issued by the Issuer pursuant to the private placement. On Oct. 24, 2017, Quotient Limited entered into Subscription Agreements with the Galen parties for the private placement of (i) 7,874,683 newly issued ordinary shares, of nil par value, of the Issuer at a subscription price of $4.64 per share, which is equal to the closing bid price of the ordinary shares on NASDAQ on Oct. 24, 2017, (ii) newly issued warrants of the Issuer, at a purchase price of $0.125 per underlying warrant share, exercisable for up to 8,414,683 ordinary shares at an exercise price of $5.80 per ordinary share, and (iii) newly issued pre-funded warrants of the Issuer at a purchase price of $4.755 per underlying pre-funded warrant share, exercisable for up to 550,000 ordinary shares at an exercise price of $0.01 per ordinary share. Galen LP and Galen International purchased 386,695 and 33,033 Ordinary Shares and 386,695 and 33,033 New Warrants, respectively. The source of funds for such purchase was the working capital of Galen LP and Galen International and capital contributions made to Galen LP and Galen International by their partners. Registration Rights Agreement In connection with the Private Placement, the Issuer also entered into a Registration Rights Agreement, dated Oct. 24, 2017, with the Subscribers pursuant to which it has agreed to file, within 15 days of the closing of the Private Placement, a registration statement with the Securities and Exchange Commission to register the Shares and the New Warrants for resale, which registration statement is required to become effective within 45 days following the closing. The Issuer will be required to pay certain cash amounts as liquidated damages of one percent of the aggregate purchase price of the New Ordinary Shares and Warrants that are registrable securities per month (up to a cap of 10% of the aggregate subscription price of the New Ordinary Shares and Warrants) if it does not meet certain of its obligations under the Registration Rights Agreement with respect to the registration of the Shares and the New Warrants. Lock-up Agreement Galen LP, Galen International, Management, Galen, Zubeen Shroff and L. John Wilkerson have agreed with Perceptive Advisors LLC and Highbridge Capital Management, LLC, affiliates of the lead investors in the Private Placement, that, for a period beginning on Oct. 24, 2017, and ending on Jan. 28, 2018, that they will not, without the prior written consent of each of Perceptive Advisors LLC and Highbridge Capital Management, LLC, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any Ordinary Shares or any other securities of the Issuer that are substantially similar to Ordinary Shares, or any other securities of the Issuer that are substantially similar to Ordinary Shares, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to acquire, the foregoing, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Ordinary Shares or any other securities of the Issuer that are substantially similar to Ordinary Shares, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to acquire, the foregoing, whether any such transaction is to be settled by delivery of Ordinary Shares or such other securities, in cash or otherwise or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii). A full-text copy of the regulatory filing is available at: https://is.gd/OsXZBZ About Quotient Limited Penicuik, United Kingdom-based Quotient Limited -- http://www.quotientbd.com/-- develops, manufactures and sells products for the global transfusion diagnostics market. Products manufactured by the Group are sold to hospitals, blood banking operations and other diagnostics companies worldwide. Quotient Limited completed an initial public offering for its ordinary shares on April 30, 2014 pursuant to which it issued 5,000,000 units each consisting of one ordinary share, no par value and one warrant to purchase 0.8 of one ordinary share at an exercise price of $8.80 per whole ordinary share, raising $40 million of new equity share capital before issuing expenses. Quotient Limited reported a net loss of US$85.06 million on US$22.22 million of total revenue for the year ended March 31, 2017, compared to a net loss of US$33.87 million on US$18.52 million of total revenue for the year ended March 31, 2016. As of Sept. 30, 2017, Quotient Limited had US$122.21 million in total assets, $138.59 million in total liabilities and a total shareholders' deficit of US$16.37 million. Ernst & Young LLP, in Belfast, United Kingdom, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended March 31, 2017, citing that the Company has recurring losses from operations and planned expenditure exceeding available funding that raise substantial doubt about its ability to continue as a going concern. QUOTIENT LIMITED: Reports $21.7-Mil. Second Quarter Net Loss ------------------------------------------------------------ Quotient Limited filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of US$21.69 million on US$5.91 million of total revenue for the quarter ended Sept. 30, 2017, compared to a net loss of US$17.35 million on US$6.14 million of total revenue for the quarter ended Sept. 30, 2016. For the six months ended Sept. 30, 2017, Quotient Limited reported a net loss of US$41.92 million on US$12.73 million of total revenue compared to a net loss of US$33.59 million on US$11.86 million of total revenue for the same period during the prior year. As of Sept. 30, 2017, Quotient Limited had US$122.21 million in total assets, $138.59 million in total liabilities and a total shareholders' deficit of US$16.37 million. "I am pleased to report that we have made great progress in both proving and derisking the MosaiQ project. The positive V&V concordance data for the initial blood grouping microarray, a critical milestone in advance of commencing field trials, proves that MosaiQ works under conditions similar to a full field trial." said Paul Cowan, chairman and chief executive officer of Quotient. He added, "with this milestone behind us we chose to raise up to $89 million of new equity, with $40 million available immediately and another $49 million expected upon the exercise of warrants by mid 2018. We believe this infusion of capital, combined with existing cash resources and debt facilities available to be drawn upon successful field trial data, will provide sufficient funding through to the commercialization of MosaiQ." "Our conventional reagent business achieved product sales growth of 22% in the fiscal 2018 second quarter ("2QFY18") and 15% year to date, while also delivering seven new reagent products licensed for sale in the U.S. by the FDA," said Paul Cowan. "Strong top line performance in the quarter was due to 23% growth in sales to OEM customers, and to a lesser extent by 6% growth in our U.S. direct business. Our focus on growing these more profitable revenue lines has shown positive results, with continued strong gross margin improvement in the quarter." Capital expenditures totaled $12.3 million in 2QFY18, compared with $9.4 million in the fiscal 2017 second quarter, largely reflecting ongoing investment related to the construction of the Company's new conventional reagent manufacturing facility near Edinburgh, Scotland. Quotient ended 2QFY18 with $19.8 million in cash and other short-term investments and $78.6 million of term debt, net of $5.0 million in an offsetting long-term cash reserve account. On Oct. 24, 2017, the Company entered into subscription agreements for the private placement of (i) 7,864,683 ordinary shares at $4.64 per share; (ii) 550,000 pre-funded warrants at $4.755 per underlying pre-funded warrant exercisable for up to 550,000 ordinary shares at $0.01 per ordinary share; and (iii) 8,414,683 warrants at $0.125 per underlying warrant share exercisable for up to 8,414,683 ordinary shares at $5.80 per ordinary share. The initial sale of ordinary shares and warrants generated proceeds of approximately $40 million. The recently issued warrants will also provide up to $49 million of additional funding in 2018, assuming full exercise. The company's near term funding plans also include the sale and lease back of its recently completed BioCampus facility and the issuance of an additional $36 million of its senior secured notes upon achieving and publishing the targeted concordance levels for the MosaiQ blood grouping microarray in its upcoming European field trial. Outlook for the Fiscal Year Ending March 31, 2018 Total revenue is expected to be in the range of $25 million to $27 million, including other revenue (product development fees) of approximately $2 million. Forecasted other revenue assumes the receipt of milestone payments contingent upon achievement of regulatory approval for certain products under development. The current expectation with respect to the receipt of the milestone payment related to CE mark approval of the MosaiQ IH microarray is in the second half of calendar year 2018. The receipt of development milestone payments involves risks and uncertainties. Product sales expectations are increased to be in the range of $23 to $25 million. Operating loss is now expected to be in the range of $70 to $75 million, including depreciation, amortization and share-based compensation of $14.5 to $15 million. Capital expenditures are still expected to be in the range of $25 to $30 million. Product sales in the third quarter of fiscal 2018 are expected to be in the range of $5.1 million to $5.4 million, compared with $4.8 million for the third quarter of fiscal 2017. Quarterly product sales can fluctuate depending upon the shipment cycles for red blood cell based products, which account for approximately two-thirds of current product sales. These products typically experience 13 shipment cycles per year, equating to three shipments of each product per quarter, except for one quarter per year when four shipments occur. The timing of shipment of bulk antisera products to OEM customers may also move revenues from quarter to quarter. Some seasonality in demand is also experienced around holiday periods in both Europe and the United States. As a result of these factors, Quotient expects to continue to see seasonality and quarter-to-quarter variations in product sales. The timing of product development fees included in other revenues is mostly dependent upon the achievement of pre-negotiated project milestones. A full-text copy of the Form 10-Q is available for free at: https://is.gd/zP3A6O About Quotient Limited Penicuik, United Kingdom-based Quotient Limited -- http://www.quotientbd.com/-- develops, manufactures and sells products for the global transfusion diagnostics market. Products manufactured by the Group are sold to hospitals, blood banking operations and other diagnostics companies worldwide. Quotient Limited completed an initial public offering for its ordinary shares on April 30, 2014 pursuant to which it issued 5,000,000 units each consisting of one ordinary share, no par value and one warrant to purchase 0.8 of one ordinary share at an exercise price of $8.80 per whole ordinary share, raising $40 million of new equity share capital before issuing expenses. Quotient Limited reported a net loss of US$85.06 million on US$22.22 million of total revenue for the year ended March 31, 2017, compared to a net loss of US$33.87 million on US$18.52 million of total revenue for the year ended March 31, 2016. Ernst & Young LLP, in Belfast, United Kingdom, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended March 31, 2017, citing that the Company has recurring losses from operations and planned expenditure exceeding available funding that raise substantial doubt about its ability to continue as a going concern. QUOTIENT LIMITED: Shareholders Re-Elect Eight Directors ------------------------------------------------------- At the annual shareholder meeting of Quotient Limited which was held on Oct. 27, 2017, the shareholders re-elected Paul Cowan, Thomas Bologna, Frederick Hallsworth, Brian McDonough, Sarah O'Connor, Heino von Prondzynski, Zubeen Shroff and John Wilkerson as directors, and (ii) approved the re-appointment of Ernst & Young LLP as auditors from the conclusion of the Annual Meeting until the next annual shareholder meeting to be held in 2018 and to authorize the directors to determine the fees to be paid to the auditors. About Quotient Limited Penicuik, United Kingdom-based Quotient Limited -- http://www.quotientbd.com/-- develops, manufactures and sells products for the global transfusion diagnostics market. Products manufactured by the Group are sold to hospitals, blood banking operations and other diagnostics companies worldwide. Quotient Limited completed an initial public offering for its ordinary shares on April 30, 2014 pursuant to which it issued 5,000,000 units each consisting of one ordinary share, no par value and one warrant to purchase 0.8 of one ordinary share at an exercise price of $8.80 per whole ordinary share, raising $40 million of new equity share capital before issuing expenses. Quotient Limited reported a net loss of US$85.06 million on US$22.22 million of total revenue for the year ended March 31, 2017, compared to a net loss of US$33.87 million on US$18.52 million of total revenue for the year ended March 31, 2016. As of Sept. 30, 2017, Quotient Limited had US$122.21 million in total assets, $138.6 million in total liabilities and a total shareholders' deficit of US$16.37 million. Ernst & Young LLP, in Belfast, United Kingdom, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended March 31, 2017, citing that the Company has recurring losses from operations and planned expenditure exceeding available funding that raise substantial doubt about its ability to continue as a going concern. REDIGI INC: Court Says 'No' to Plan Solicitation Period Extension ----------------------------------------------------------------- Judge Paul G. Hyman, Jr. of the U.S. Bankruptcy Court for the Southern District of Florida has entered an order denying ReDigi, Inc.'s Renewed Motion to Extend the Exclusive Plan Solicitation Period. The Debtor previously asked the Court to extend the exclusive plan solicitation period through Oct. 17, 2017. The Debtor's plan of reorganization is on file. As reported by the Troubled Company Reporter on June 8, 2017, the Debtor filed with the Court the Disclosure Statement, which states that Class 3 general unsecured claimants will be paid 25% of net revenue at the end of each calendar year starting as of Dec. 31, 2018, until all allowed unsecured claims are paid in full without interest. The Debtor's exclusive plan solicitation period runs through Sept. 12, 2017. Sept. 11, the date prior to the expiration of the Exclusive Solicitation Period, was the date scheduled for an evidentiary hearing on motions seeking dismissal of this case, conversion to Chapter 7, and the appointment of a trustee. However, due to Hurricane Irma, the Sept. 11 evidentiary hearing was rescheduled to Oct. 16. The Court previously extended the Exclusive Solicitation Period so that it expired one day after the evidentiary hearing on the motions to dismiss, convert, or appoint trustee. As reported by the TCR on March 15, 2017, the exclusive plan filing period was extended through June 28, 2017, and the exclusive right to solicit votes on a plan of reorganization through Aug. 28, 2017. About ReDigi Inc. ReDigi Inc. filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 16-20809) on Aug. 3, 2016, and is represented by Craig I Kelley, Esq., of Kelley & Fulton, PL, in West Palm Beach, Florida. The petition was signed by John Mark Ossenmacher, CEO. At the time of the filing, the Debtor had $250 in total assets and $6,590,000 in total liabilities. The Debtor employed Baker & Hostetler LLP as special counsel. An official committee of unsecured creditors has not been appointed in the Debtor's Chapter 11 case. RENNOVA HEALTH: Signs Exchange Agreement with Debenture Holders --------------------------------------------------------------- On Sept. 19, 2017, Rennova Health, Inc., closed offerings of an aggregate of $9,016,136 principal amount of Senior Secured Original Issue Discount Convertible Debentures due Sept. 19, 2019, and warrants to purchase shares of the Company's common stock. On Oct. 30, 2017, the Company entered into Exchange Agreements with the holders of the Debentures. The Exchange Agreements provide that the holders may, from time to time, exchange their Debentures for shares of a newly-authorized Series I-2 Convertible Preferred Stock of the Company. The Exchange Agreements permit the holders of the Debentures to exchange specified principal amounts of the Debentures on various closing dates from Dec. 2, 2017, through March 1, 2018. Any exchange is at the option of the holders. Each holder may reduce the principal amount of Debentures exchanged on any particular closing date, or elect not to exchange any Debentures at all on a closing date. If a holder does choose to exchange less principal amount of Debentures, or no Debentures at all, it can carry forward such lesser amount to a future closing date and then exchange more than the originally specified principal amount for that later closing date. For each $0.80 of principal amount of Debenture surrendered to the Company at any closing date, the Company will issue the holder a share of Preferred Stock with a stated value of $1.00. The following is a summary of certain terms and provisions of the Preferred Stock: * General. The Company's board of directors has designated up to 12,000 shares of the 5,000,000 authorized shares of preferred stock as the Preferred Stock. Each share of Preferred Stock has a stated value of $1,000. * Rank. The Preferred Stock is senior in right of payment, including dividend rights and liquidation preference, to the Company's Series G Convertible Preferred Stock and Series H Convertible Preferred Stock. * Conversion. Each share of Preferred Stock is convertible into shares of the Company's common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to "full ratchet" and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Preferred Stock. Holders of the Preferred Stock are prohibited from converting Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% (or, upon election of holder, 9.99%) of the total number of shares of common stock then issued and outstanding. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage will not be effective until 61 days after notice to the Company. * Liquidation Preference. Upon any liquidation, dissolution or winding-up of the Company, the holders of Preferred Stock will be entitled to receive an amount equal to the stated value of the Preferred Stock, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing for each share of Preferred Stock, before any distribution or payment shall be made on any junior securities. * Voting Rights. Shares of Preferred Stock generally have no voting rights, except as required by law and except that the affirmative vote of the holders of a majority of the then outstanding shares of Preferred Stock is required to (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation of the Preferred Stock, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon liquidation senior to, or otherwise pari passu with, the Preferred Stock, (c) amend the Company's certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (d) increase the number of authorized shares of Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. * Dividends. Holders of Preferred Stock shall be entitled to receive dividends on shares of Preferred Stock equal (on an as-converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if dividends are paid on shares of common stock. No other dividends will be paid on shares of Preferred Stock. * Redemption. Upon the occurrence of certain Triggering Events (as defined in the Certificate of Designation of the Preferred Stock), the holder will, in addition to any other right it may have, have the right, at its option, to require the Company to either redeem the Preferred Stock in cash or in certain circumstance in shares of common stock at the redemption prices set forth in the Certificate of Designation. * Negative Covenants. As long as at least a specified number of shares of Preferred Stock are outstanding, unless the holders of 67% of the then outstanding shares of Preferred Stock will have given prior written consent, the Company and its subsidiaries are, with certain exceptions, limited from (a) incurring indebtedness, (b) creating liens, (c) amending its charter documents, (d) repurchasing or acquiring shares of common stock or common stock equivalents, (e) paying cash dividends on junior securities, (f) entering into transactions with affiliates, or (g) entering into any agreement with respect to the foregoing. The shares of Preferred Stock will be issued in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act of 1933, as amended. About Rennova Health Based in West Palm Beach, Florida, Rennova Health, Inc. (NASDAQ:RNVA) -- http://www.rennovahealth.com/-- provides health care services for healthcare providers, their patients and individuals. Historically, the Company has operated its business under one management team, but beginning in 2017, the Company intends to operate in four synergistic divisions with specialized management: (1) Clinical diagnostics through its clinical laboratories; (2) supportive software solutions to healthcare providers including Electronic Health Records, Laboratory Information Systems and Medical Billing services; (3) Decision support and interpretation of cancer and genomic diagnostics; and (4) the recent addition of a hospital in Tennessee. Rennova Health reported a net loss attributable to common stockholders of $32.61 million on $5.24 million of net revenues for the year ended Dec. 31, 2016, compared with a net loss attributable to common stockholders of $37.58 million on $18.39 million of net revenues for the year ended Dec. 31, 2015. As of June 30, 2017, Rennova Health had $5.68 million in total assets, $23.20 million in total liabilities, and a total stockholders' deficit of $17.51 million. Green & Company, CPAs, in Temple Terrace, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. REPLOGLE HARDWOOD: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------------- An official committee of unsecured creditors has not yet been appointed in the Chapter 11 cases of Replogle Hardwood Flooring Company, LLC and Replogle Enterprises, G.P. as of Oct. 30, according to a court docket. About Replogle Hardwood Replogle Hardwood Flooring LLC sells a wide variety of unfinished hardwood flooring that comes straight from its sawmill to its showroom. The Company is also a distributor of Turman, Somerset, RealWood Floors, and WoodHouse prefinished and engineered flooring as well as CoreTec engineered vinyl and Quick-Step laminate flooring. Based in Henry, Tennessee, Replogle Hardwood Flooring and its affiliate, Replogle Enterprises, G.P., filed Chapter 11 petitions (Bankr. W.D. Tenn. Case Nos. 17-12172 and 17-12173) on Sept. 29, 2017. The petitions were signed by Nathan Replogle, authorized representative of the Debtors. At the time of filing, Replogle Hardwood disclosed $2,190,000 in assets and $4,790,000 in liabilities, and Replogle Enterprises disclosed $806,667 in assets and $5,110,000 in liabilities. Judge Jimmy L Croom presides over the cases. Phillip G. Young, Jr., of Thompson Burton, PLLC, serves as counsel to the Debtors. RICHARDSON INVESTMENTS: Case Summary & 5 Unsecured Creditors ------------------------------------------------------------ Debtor: Richardson Investments LLC of Nashville 5428 Clarksville Highway Whites Creek, TN 37189 Type of Business: Richardson Investments LLC, a small business debtor as defined in 11 U.S.C. Section 101(51D), is the fee simple owner of a commercial strip center located at 5428 Clarksville Highway, Whites Creek, Tennessee, valued by the company at $1.1 million. The company reported gross revenue of $55,800 in 2016 and gross revenue of $55,800 in 2015. Chapter 11 Petition Date: October 31, 2017 Case No.: 17-07377 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Hon. Randal S Mashburn Debtor's Counsel: Steven L. Lefkovitz, Esq. LEFKOVITZ & LEFKOVITZ 618 Church St Ste #410 Nashville, TN 37219 Tel: 615 256-8300 Fax: 615 255-4516 E-mail: slefkovitz@lefkovitz.com Total Assets: $1.21 million Total Liabilities: $920,556 The petition was signed by Gregory Richardson, chief manager. A full-text copy of the petition, along with a list of five unsecured creditors, is available for free at http://bankrupt.com/misc/tnmb17-07377.pdf RIVERBED TECHNOLOGY: Bank Debt Trades at 2.71% Off -------------------------------------------------- Participations in a syndicated loan under Riverbed Technology Inc is a borrower traded in the secondary market at 97.29 cents-on-the-dollar during the week ended Friday, October 27, 2017, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.36 percentage points from the previous week. Riverbed Technology Inc pays 325 basis points above LIBOR to borrow under the $1.585 billion facility. The bank loan matures on April 24, 2022 and Moody's B1 rating and Standard & Poor's B+ rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended October 27. ROSETTA GENOMICS: Receives Noncompliance Notice from NASDAQ ----------------------------------------------------------- Rosetta Genomics Ltd. received a notification letter from the NASDAQ Stock Market on Oct. 24, 2017, indicating that the Company's stockholders' equity as reported in the Company's Report on Form 6-K as filed with the Securities and Exchange Commission on Oct. 10, 2017, no longer meets the minimum amount of $2,500,000 required for continued inclusion on The NASDAQ Capital Market pursuant to NASDAQ Listing Rule 5550(b)(1). The Company has 45 calendar days to submit a specific plan to NASDAQ to attempt to achieve and regain compliance with the minimum stockholders' equity requirement. The Company plans to submit such a plan to NASDAQ. There is no assurance that NASDAQ will accept the Company's plan to satisfy the stockholders' equity requirement. If the plan is accepted, NASDAQ may provide the Company up to 180 calendar days from the date of the notification for the Company to regain compliance. If, after the completion of its review, NASDAQ determines that the Company has not presented a plan that adequately addresses the stockholders' equity issue, NASDAQ will provide written notice that the Company's securities will be subject to delisting from The NASDAQ Capital Market. In that event, the Company may appeal the decision to a NASDAQ Hearings Panel. In the event of an appeal, the Company's securities would remain listed on The NASDAQ Capital Market pending a decision by the Hearings Panel following the hearing. Although the Company plans to submit a compliance plan to NASDAQ and, if accepted, will seek to demonstrate compliance within the required time period, there is no assurance that NASDAQ will accept the Company's compliance plan, nor that the Company could achieve compliance with its proposed plan in the required time. About Rosetta Genomics Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA-certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. Rosetta Genomics reported a net loss of US$16.23 million on US$9.23 million of total revenues for the year ended Dec. 31, 2016, compared to a net loss of US$17.34 million on US$8.26 million of total revenues for the year ended Dec. 31, 2015. As of June 30, 2017, Rosetta had US$6.20 million in total assets, US$5.11 million in total liabilities and US$1.09 million in total shareholders' equity. Kost Forer Gabby & Kasierer, a member of Ernst & Young Global, in Tel-Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has recurring losses from operations and has limited liquidity resources that raise substantial doubt about its ability to continue as a going concern. ROYAL T ENERGY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Royal T Energy, LLC 1704 Carriage Estates Road Sherman, TX 75092 Type of Business: Royal T Energy, LLC is a privately owned company that provides petroleum haulage services. Chapter 11 Petition Date: November 1, 2017 Case No.: 17-42386 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Hon. Brenda T. Rhoades Debtor's Counsel: Nathan M Johnson, Esq. SPECTOR & JOHNSON, PLLC 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: 972-239-4260 Fax: 214-237-3380 Email: njohnson@spectorjohnson.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by James Alexander, member-manager. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txeb17-42386_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/txeb17-42386.pdf S & H ENTERPRISE: Case Summary & 8 Unsecured Creditors ------------------------------------------------------ Debtor: S & H Enterprise, LLC 3310 Vine Hays, KS 67601 Type of Business: S & H Enterprise, LLC, is a privately held company in Hays, Kansas that owns in fee simple interest a real property located at 3310 Vine Street Hays Kansas 67601 valued by the company at $1.48 million. The company's gross revenue from rental income amounted to $93,475 in 2016 and $137,181 in 2015. Chapter 11 Petition Date: October 31, 2017 Case No.: 17-12150 Court: United States Bankruptcy Court District of Kansas (Wichita) Judge: Hon. Robert E. Nugent Debtor's Counsel: Edward J. Nazar, Esq. HINKLE LAW FIRM, LLC 1617 North Waterfront Parkway, Suite 400 Wichita, KS 67206-6639 Tel: 316.267.2000 Fax: 316.264.1518 E-mail: ebn1@hinklaw.com Total Assets: $1.50 million Total Liabilities: $1.61 million The petition was signed by Stephen D. Weilert, owner. A full-text copy of the petition, along with a list of eight unsecured creditors, is available for free at http://bankrupt.com/misc/ksb17-12150.pdf SAGE AUTOMOTIVE: Moody's Affirms B2 CFR Following Dividend ---------------------------------------------------------- Moody's Investors Service affirmed the rating of Sage Automotive Interiors, Inc.'s upsized first lien term loan at B2. In a related action, Moody's affirmed Sage's Corporate Family Rating (CFR) and Probability of Default Rating at B2 and B2-PD, respectively. The rating outlook is stable. Sage intends to utilize the $85 million incremental term loan under the upsized $392.7 million first lien term loan along with cash to pay an approximate $100 million special distribution to Sage's shareholders, a private investment fund managed by Clearlake Capital Group, and pay related fees and expenses. The following ratings were affirmed: Sage Automotive Interiors, Inc. Corporate Family Rating, at B2; Probability of Default Rating, at B2-PD; Upsized $392.7 million 1st lien senior secured term loan due 2022 (includes $85 million add-on), at B2 (LGD4). Rating outlook remains Stable The $40 million asset based revolving credit facility is not rated by Moody's. RATINGS RATIONALE The affirmation of Sage's B2 CFR reflects the high pro forma leverage following the announced special dividend balanced by the company's demonstrated strong top line growth supported by organic growth and strategic acquisitions over the years. Pro forma for the special dividend, Sage's Debt/EBITDA (including Moody's standard adjustments) approximates 3.9x for the LTM period ending June 30, 2017. Yet, organic growth, and the acquisition of Apollo S.r.l. in October 2016, drove Debt/EBITDA (pre dividend) to about 3x for the LTM period. The ratings also incorporate Sage's small scale, and North American concentration within a cyclical industry. The transaction is credit negative as it increases debt, leverage and cash interest expense to fund a distribution to shareholders. The transaction follows a similar $96 million special dividend executed in October 2016. Moody's expects U.S. automotive sales to nominally decline about 0.6% in 2018. Yet, Sage's booked business in 2018 should continue to support EBITA/Interest above 2x and the company's long-standing customer relationships should support additional opportunities for wins of re-bids on existing business over the next several years. However, event risk is high under private equity ownership and additional re-leveraging transactions supporting further special dividends are likely to create negative rating pressure. The stable rating outlook reflects Moody's expectation that Sage will continue to generate in excess of $30 million of free cash flow (excluding debt-funded dividends) and that modest growth in volume over the next 12 to 18 months as global automotive demand plateaus will lead to slight gains in revenue and EBITDA. While there is potential risk of strategic acquisitions and shareholder distributions, Sage has some capacity within the metrics expected for the rating to accommodate modestly sized transactions assuming continued revenue and earnings growth. Sage is expected to maintain a good liquidity profile over the next 12-15 months supported by cash on hand, positive free cash flow generation and availability under its recently upsized $40 million ABL revolving credit facility which matures in 2021. As of June 30, 2017, the company maintained about $35 million of cash on hand. Moody's expects free cash flow generation in the next 12-15 months to moderate to the low teens as percentage of debt as demand ebbs in the company's North American market, somewhat mitigated by new business wins. The revolving credit facility was undrawn as of June 30, 2017 with borrowing base availability for the vast majority of the commitment amount. The facility is anticipated to remain unfunded over the next 12-15 months. There is nominal 1% required annual amortization under the term loan, which also contains a maximum secured net leverage ratio. The covenant is being amended to accommodate the additional debt for the proposed dividend and Moody's expects ample covenant cushion. The ABL revolver contains a springing fixed charge coverage ratio of 1.0x when excess availability is less than 12.5% of the facility. Moody's does not anticipate the revolver covenant will be triggered over the next 12 months and expects good EBITDA cushion within the covenant level. The company's relatively small scale and narrow product mix are challenges that constrain the ratings. The ratings could improve if the company's profit levels continue to support current EBITA margins, EBITA/interest above 3.25x, and Debt/EBITDA below 3.5x, while meaningfully increasing scale. The rating could be lowered if North American automobile production levels deteriorate resulting in weakening profitability or if consumer preferences move away from the company's product offerings or the platforms on which it has content. A lower rating could also arise if the EBITA margin deteriorates, EBITA/interest declines to 2x times, or if debt/ EBITDA were to approach 5x. A deterioration in liquidity, sizable acquisitions or increasingly aggressive financial policy could also lower the company's rating. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Sage Automotive Interiors, Inc. (Sage) is a designer and manufacturer of seat and other interior fabrics for the automotive industry. Revenue for the LTM period ending June 30, 2017 was approximately $454 million. Sage is majority owned by Clearlake Capital Group. SAMUEL EVANS WYLY: Sale of Dallas Property for $9.4M Approved ------------------------------------------------------------- Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern District of Texas authorized Samuel Evans Wyly's private sale of his residential property located at 3905 Beverly Drive, Dallas, Texas to Casa B 3905, LLC, $9,400,000. The sale is free and clear of all liens, claims, and interests of any kind or nature whatsoever. The net proceeds of the sale (after deduction of brokerage commissions, closing costs, any other customary costs, and the proration of property taxes) will be deposited into the segregated Debtor-in-Possession account created prior to the sale of the Homestead under the jurisdiction of the Court, subject to the rights and claims of all parties. The amounts on deposit in the segregated DIP account will not be used to pay monthly expenses as the account was created solely for the deposit of the net proceeds of the sale while the parties continue settlement discussions, unless ordered otherwise by the Court. All amounts ultimately owed to Dallas County for year 2017 ad valorem property taxes will be paid in full at the sale closing. Following closing of the sale, the Debtor will file a statement of sale with the Court disclosing the material details of the sale of the Homestead in accordance with Bankruptcy Rule 6004(f)(1). The stay under Bankruptcy Rule 6004(h) is waived; accordingly, the terms of the Order will take effect and be enforceable immediately. About Sam Wyly Sam Wyly is a lifelong entrepreneur and author. His first book, 1,000 Dollars & An Idea, is a biography that tells his story of creating and building companies, including University Computing, Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse. His second book, Texas Got It Right!, co-authored with his son, Andrew, was gifted to roughly 450,000 students and teachers, thought leaders, and readers, and continues to be a best-seller in its Amazon category. Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge ordered him to pay several hundred million dollars in a civil fraud case. In September 2014, a federal judge ordered Mr. Wyly and the estate of his deceased brother to pay more than $300 million in sanctions after they were found guilty of committing civil fraud to hide stock sales and nab millions of dollars in profits. SEARS HOLDINGS: Draws Down Remaining $60M Under JPP Facility ------------------------------------------------------------ Sears Holdings Corporation, through Sears, Roebuck and Co., Kmart Stores of Illinois LLC, Kmart of Washington LLC, Kmart Corporation, SHC Desert Springs, LLC, Innovel Solutions, Inc., Sears Holdings Management Corporation, Maxserv, Inc., Troy Coolidge No. 13, LLC, Sears Development Co. and Big Beaver of Florida Development, LLC (collectively, "Borrowers"), entities wholly-owned and controlled, directly or indirectly by the Company, entered into an amendment to the Second Amended and Restated Loan Agreement with JPP, LLC and JPP II, LLC as lenders, pursuant to which the Borrowers drew the remaining $60 million under the Credit Facility. On Oct. 4, 2017, pursuant to the Amended and Restated Loan Agreement, the Borrowers borrowed $100 million from the Lenders. The Amended and Restated Loan Agreement also provided that, subject to the satisfaction of certain conditions, up to an additional $100 million could be drawn by the Borrowers prior to Dec. 1, 2017. On Oct. 18, 2017, pursuant to the Second Amended and Restated Loan Agreement, the Borrowers drew $40 million of such additional $100 million from the Lenders. The $200 million aggregate loan made under the Second Amended and Restated Loan Agreement in October 2017 matures on the later of (1) April 23, 2018 and (2) the earlier of (x) the date the loans under the JPP/Cascade Loan Agreement are repaid in full and (y) the maturity date of the loans under the JPP/Cascade Loan Agreement (including any extensions thereof in accordance with the JPP/Cascade Loan Agreement). All other loans under the Second Amended and Restated Loan Agreement continue to mature on July 20, 2020. After giving effect to the $200 million loan, the aggregate principal amount outstanding under the Second Amended and Restated Loan Agreement was $569.5 million. The $200 million loan has an annual interest rate of 11%, with accrued interest payable monthly, and no upfront or funding fees were paid. All of the loans under the Second Amended and Restated Loan Agreement are guaranteed by the Company and secured by a first lien on 76 real properties. The $200 million loan is also secured by a second lien on 16 real properties owned by the Borrowers. In connection with the $60 million draw, certain of the Borrowers entered into a Second Amendment, dated as of Oct. 25, 2017, to the Amended and Restated Loan Agreement, dated as of May 22, 2017, with JPP, LLC, JPP II, LLC and Cascade Investments, L.L.C., to add a cross-default provision and make certain other changes. Mr. Edward S. Lampert, the Company's chief executive officer and chairman, is the sole stockholder, chief executive officer and director of ESL Investments, Inc., which controls JPP, LLC and JPP II, LLC. A full-text copy of the Second Amendment to Amended and Restated Loan Agreement is available for free at https://is.gd/XYHVxr About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- is an integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve members. Sears Holdings is home to Shop Your Waytm, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with more than 2,000 full-line and specialty retail stores in the United States and Canada. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. Skadden, Arps, Slate, Meagher & Flom, LLP, represented Kmart in its restructuring efforts. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Sears Holdings reported a net loss of $2.22 billion on $22.13 billion of revenues for the fiscal year 2016, compared to a net loss of $1.12 billion on $25.14 billion of revenues for the fiscal year 2015. As of July 29, 2017, Sears Holdings had $8.35 billion in total assets, $12 billion in total liabilities and a total deficit of $3.65 billion. * * * In January 2017, Fitch Ratings affirmed the Long-term Issuer Default Ratings (IDR) on Sears Holdings and its various subsidiary entities (collectively, Sears) at 'CC'. In December 2016, that S&P Global Ratings affirmed its ratings, including the 'CCC+' corporate credit rating, on Sears Holdings Corp. "We revised our assessment of Sears' liquidity to less than adequate from adequate based on the impact of continued and meaningful cash use and constraints on contractually committed liquidity from cash use and incremental secured funded borrowings," said credit analyst Robert Schulz. "We do not incorporate any significant prospective asset sales or execution of strategic alternatives for legacy hardline brands into our assessment of committed liquidity." In January 2017, Moody's Investors Service downgraded Sears Holdings' corporate family rating to 'Caa2' from 'Caa1'. Moody's said Sears' 'Caa2' rating reflects the company's sizable operating losses - Domestic Adjusted EBITDA was a loss of $884 million in the latest 12 month period. STAGEARTZ LIMITED: November 2 Plan Confirmation Hearing ------------------------------------------------------- The Hon. Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania conditionally approved StageArtz Limited's disclosure statement with respect to its Amended Small Business Combined Plan of Reorganization. The Court, however, reserves its right to rule on the adequacy on the Debtor's proposed voting procedures and proposed voting materials at the plan confirmation hearing, which will be held on November 2, 2017, at 9:00 a.m. The deadline by which ballots must be received in order to be considered as acceptances or rejections of the Plan is fixed on October 26, 2017, at 5:00 p.m., and the Debtor is required to file the Report of Plan Voting on October 27. The Court fixed November 1, 2017 as the deadline for filing and serving written objections to the confirmation of the Plan. About StageArtz Limited StageArtz Limited is a performing arts institution which offers private music lessons in a variety of instruments, group classes, child development programs, and summer camps with a focus on musical, theatrical, and performing arts. The Debtor also hosts musical birthday parties, team-building activities, and other activities to entertain families, children and small groups. The Debtor currently employs 17 employees, including the two owners/officers, all of whom work out of the Debtor's leased premises located at 6 Airport Square, North Wales, Pennsylvania 19454. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 17-13694) on May 26, 2017, estimating assets and liabilities of less than $1 million. Judge Eric L. Frank presides over the case. David B. Smith, Esq., at Smith Kane Holman, LLC, serves as the Debtor's legal counsel. TEXAS FLUORESCENCE: Exclusive Plan Filing Deadline Moved to Nov. 29 ------------------------------------------------------------------- Judge Tony M. Davis of the U.S. Bankruptcy Court for the Western District of Texas extended the exclusive period during which only Texas Fluorescence Laboratories, Inc. may file a plan to and including November 29, 2017. The Troubled Company Reporter has previously reported that the Debtor asked the Court to extend the Exclusive Period and to prohibit any other party in interest from filing a plan, unless it has not filed a plan by November 29. The Debtor told the Court that its management and its legal counsel have been working diligently to formulate a plan and file a plan prior to the expiration of its Exclusive Period. While the Debtor's counsel have almost completed the drafting of a plan of liquidation with disclosures, based on an offer received from Francisco Conti -- one of the Debtor's shareholders -- to purchase substantially all of the Debtor's assets. It has recently become apparent, however, that the Debtor's current two-member board of directors is not in agreement regarding several important provisions of the plan. The Debtor's counsel still expect to resolve such issues but doing so will likely delay filing the plan for as much as 30 days after the expiration of the Exclusive Period. About Texas Fluorescence Laboratories, Inc. Texas Fluorescence Laboratories, Inc., a small business debtor as defined in 11 U.S.C. Section 101(51D), develops products for designing fluorescent and molecular probes. It develops ion indicators, ionophores, PKC indicators, general fluorophores, and surfactants for cell biology, biochemistry, biomolecular screening, molecular biology, microbiology, and neuroscience. The company also provides probes for electrophysiology, live-cell function, receptors and ion channels, in situ hybridization, signal transduction, and ribonucleic acid and deoxyribonucleic acid; and pH indicators; as well as membrane potential; flow cytometry; and custom synthesis products. TEF Labs, Inc., is based in Austin, Texas. Texas Fluorescence Laboratories filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 17-10517) on May 1, 2017. The Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Akwasi Minta, director and officer. The Hon. Tony M. Davis presides over the case. B. Weldon Ponder, Jr., Esq., at B. Weldon Ponder, Jr., Attorney at Law, serves as bankruptcy counsel to the Debtor. TROVERCO INC: Exclusive Plan Filing Period Extended Thru Feb. 27 ---------------------------------------------------------------- The Hon. Charles E. Rendlen, III of the U.S. Bankruptcy Court for the Eastern District of Missouri, at the behest of Troverco, Inc., has extended the period during which the Debtor has the exclusive right to file a plan of reorganization through February 27, 2018, as well as the period during which the Debtor has the exclusive right to solicit acceptances a filed plan through April 27, 2018. As reported by the Troubled Company Reporter on October 11, 2017, the Debtor asked the Court for an extension of the Exclusive Periods in order to give it sufficient time to establish financial stability. Prior to 2015, Troverco was an integrated manufacturer and distributor. The Debtor manufactured Landshire branded sandwiches that it delivered through its direct store delivery ("DSD") network. In January 2015, the Debtor sold the Landshire manufacturing operation, including all of Landshire's production assets, sales resources, customer relationships, and all trade names and intellectual property associated with the sandwich-making operations to AdvancePierre Foods, Inc. The DSD operation was renamed Troverco, Inc. In connection with the AdvancePierre transaction, Troverco entered into two separate agreements with AdvancePierre under which Troverco agreed to continue purchasing the products it had previously manufactured from AdvancePierre at a set price -- a supply agreement and an earn-out agreement. Importantly, as part of the AdvancePierre transaction, Troverco was prohibited from selling items in certain product categories sourced from companies other than AdvancePierre. To date, the Debtor and AdvancePierre reached an agreement, entered as part of an order in this case, by which AdvancePierre released the restriction on the Debtor from sourcing product from other suppliers. Consequently, the Debtor anticipated that sourcing products from other suppliers will lead to meaningful increases in its profit margins on sales, making a successful turnaround of the company likely. Most recently, an affiliate of the Debtor has taken steps to enter the sandwich manufacturing market space, consistent with the Debtor's profitable operations under the Landshire name. Commencing in January 2018, the Debtor anticipated that it will enjoy an added margin of 20 to 25 cents per sandwich sold on the present volume of more than 600,00 sandwiches sold per month. The Debtor expected that coupled with its cost reductions, this initiative will return the Debtor to cash-flow positive operations. The Debtor also has obtained interim post-petition debtor-in-possession financing that permits it to keep current on its obligations to vendors, and navigate this case. The DIP Financing comes from insiders of the Debtor, indicating that those with deep knowledge of both the company and the industry believe in the long-term success of the Debtor. The Debtor said that it is currently in negotiations with appropriate parties in interest, including the Committee, to obtain consent to a final order permitting post-petition financing. About Troverco Inc. Based in Saint Louis, Missouri, Troverco Inc. -- http://www.troverco.com/-- is in the food industry specializing in freshly prepared sandwiches and snacks for delivery to businesses. Troverco began as a franchise in 1959 under the name Lakeshire Sandwiches. Troverco filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 17-44474) on June 29, 2017, estimating its assets and liabilities at between $1 million and $10 million. The petition was signed by Joseph E. Trover, Jr., the CEO. Judge Charles E. Rendlen III presides over the case. Spencer Fane LLP and Cullen and Dykman LLP represent the Debtor as legal counsel. The Debtor hired Three Twenty-One Capital Partners, LLC as financial advisor and investment banker. On July 18, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee hired Goldstein & McClintock LLLP as bankruptcy counsel and Protiviti Inc. as financial advisor. No trustee or examiner has been appointed in this chapter 11 case. ULTRA PETROLEUM: Appeal from Make-whole Order Sent to 5th Circuit ----------------------------------------------------------------- Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas issued a memorandum opinion in support of a certification of a direct appeal to the U.S. Court of Appeals for the Fifth Circuit. Ultra Petroleum Cop., et al., seek reversal of the Court's Sept. 21, 2017, Order, and, if necessary, remand of the case for further proceedings in accordance with governing law. On its Sept. 21, 2017 order, the Court found that that the Debtors failed to rebut the Noteholders' claim for post-petition interest at the rate listed in the Note Agreement because those claims are treated as unimpaired under the Debtors' chapter 11 plan. Paying interest on the Make-Whole Amount at the federal judgment rate would cause the Noteholders to be impaired. Additionally, the Court found that section 726(a)(5) is not applicable to the Noteholders' post-petition claims because its only application in a chapter 11 case--11 U.S.C. section ll29(a)(7)--limits only impaired claims, not unimpaired ones. Federal Rule of Bankruptcy Procedure 8006(f)(2)(D) requires an examination of the relevant factors set forth in 28 U.S.C. section 158(d)(2)(A)(i)--(iii) to illustrate the reasons why a direct appeal from the bankruptcy court to the Fifth Circuit should be allowed. The issue under section 158(d)(2)(A)(i) is whether this Court's Order involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States, or whether the order involves a matter of public importance. In order to determine whether the principal issues raised by the Appellant justify relief by the Fifth Circuit, the legal question regarding claimants' rights must be resolved. Fifth Circuit law is unambiguous in holding that even a slight deterioration in the rights of a claimant leaves the claimant impaired. However, the Fifth Circuit has not addressed the issue of whether impairment should be measured against the non-bankruptcy state law claim or against the claim allowed under section 502. Because that issue of law is fundamental to the appeal, it constitutes a matter on which there is no controlling precedent within this Circuit or the Supreme Court. Accordingly, certification is appropriate under this subsection. Although the parties have briefed and argued other reasons for certification of a direct appeal under 28 U.S.C. section 158(d), the Court sees no need to address those reasons. Section 158(d) is disjunctive. Because a direct appeal should be authorized based on the absence of controlling authority, the Court sees no need for further analysis. A full-text copy of Judge Isgur's Memorandum Opinion dated Oct. 26, 2017, is available at: http://bankrupt.com/misc/txsb16-32202-1665.pdf About Ultra Petroleum Houston, Texas-based Ultra Petroleum Corp. is an independent oil and gas company engaged in the development, production, operation, exploration, and acquisition of oil and natural gas properties. On April 29, 2016, Ultra Petroleum Corp. and seven subsidiary companies filed petitions (Bankr. S.D. Tex.) seeking relief under Chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Judge Marvin Isgur. These cases are being jointly administered for procedural purposes, with all pleadings filed in these cases will be maintained on the case docket for Ultra Petroleum Corp. Case No. 16-32202. Ultra Petroleum disclosed total assets of $1.28 billion and total liabilities of $3.91 billion as of March 31, 2016. James H.M. Sprayregen, P.C., David R. Seligman, P.C., Michael B. Slade, Esq., Christopher T. Greco, Esq., and Gregory F. Pesce, Esq., at Kirkland & Ellis LLP; and Patricia B. Tomasco, Esq., Matthew D. Cavenaugh, Esq., and Jennifer F. Wertz, Esq., at Jackson Walker, L.L.P., serve as co-counsel to the Debtors. Rothschild Inc. serves as the Debtors' investment banker; Petrie Partners serves as their investment banker; and Epiq Bankruptcy Solutions, LLC, serves as claims and noticing agent. On May 5, 2016, the United States Trustee for the Southern District of Texas appointed an official committee for unsecured creditors of all of the Debtors. On September 26, 2016, the United States Trustee for the Southern District of Texas filed a Notice of Reconstitution of the UCC. The Committee tapped Weil, Gotshal & Manges LLP as its legal counsel; Opportune LLP as advisor; and PJT Partners LP as its financial advisor. Certain other stakeholders have organized for purposes of participating in the Debtors' chapter 11 cases: (i) on June 8, 2016, an informal ad hoc committee of unsecured creditors of subsidiary, Ultra Resources, notified the Bankruptcy Court it had formed and identified its members, most of which are distressed debt investors and/or hedge funds; (ii) on June 13, 2016, an informal ad hoc committee of the holders of senior notes issued by the Company notified the Bankruptcy Court it had formed and identified its members; (iii) on July 20, 2016, an informal ad hoc committee of shareholders of the Company notified the Bankruptcy Court it had formed and identified its members; and (iv) on January 6, 2017, an informal ad hoc committee of unsecured creditors of subsidiary, Ultra Resources, notified the Bankruptcy Court it had formed and identified its members, most of which are insurance companies. In April 2017, Ultra Petroleum successfully completed its Chapter 11 restructuring. UTZ QUALITY: Moody's Assigns B2 CFR; Outlook Stable --------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating to Utz Quality Foods, LLC. Moody's also assigned a B2 (LGD 3) rating to the company's proposed $535 million first lien term loan and a Caa1 (LGD 6) rating to the proposed $125 million second lien term loan. The rating outlook is stable. Proceeds from the facilities will be used to repay existing indebtedness, fund the buyout of Utz's minority equity partner, and fund the acquisition of Inventure Foods, Inc. Inventure produces potato chips, potato skins, and other snacks. Utz expects the transactions to close in the fourth quarter of 2017. Post buyout, Utz will be wholly owned by the Rice and Lissette families. Moody's assigned the following ratings: - Corporate Family Rating at B2 - Probability of Default Rating at B2-PD - $535 million senior secured first lien term loan due 2024 at B2 (LGD 3) - $125 million senior secured second lien term loan due 2025 at Caa1 (LGD 6) The rating outlook is stable. RATINGS RATIONALE Utz's B2 Corporate Family Rating reflects its relatively small share of the salty snack market and high financial leverage. It also reflects limited geographic and segment diversification. Over 80% of sales are to the eastern portion of the United States with about 50% of sales derived from its potato chip business. The rating also reflects the company's participation in the snacking category, which has good overall growth prospects as consumers continue to shift towards greater snacking throughout the day. The B2 first lien term loan rating is the same as the B2 Corporate Family Rating because the first lien term loan makes up the preponderance of debt in the capital structure. The first lien term loan is secured by a first lien on non-current assets, excluding real estate. It has a second lien on current assets. The $100 million asset based revolving credit facility has a first lien on current assets. The Caa1 second lien term loan rating is two notches below the B2 Corporate Family Rating because of the substantial amount of higher priority debt. The second lien term loan is secured by a second lien on non-current assets, excluding real estate. It has a third lien on current assets. The ratings outlook is stable reflecting Moody's expectation that Utz will maintain its small share of the salty snack market, that segment diversification will remain limited, and that financial leverage will decline but remain high. Ratings could be downgrade if the company experiences a deterioration in operating performance, or if the company experiences integration issues. Additionally, a downgrade could occur if debt to EBITDA is sustained above 6.0 times, or free cash flow turns negative. Ratings could be upgraded if operating performance improves, debt to EBITDA approaches 5.0 times, and the company successfully integrates Inventure. Utz Quality Foods, LLC, headquartered in Hanover, PA, is a branded salty snack producer and marketer. Key products include potato chips, pretzels, and cheese curls. Pro forma annual revenue is over $800 million. The principal methodology used in these ratings was that for the "Global Packaged Goods" industry published in January 2017. VASARI LLC: Expects to File Plan, Keep 45 Dairy Queen Stores ------------------------------------------------------------ Vasari, LLC, a franchise owner of Dairy Queens in Texas, New Mexico and Oklahoma, has filed for Chapter 11 bankruptcy, after recently shutting 9 stores Texas and Oklahoma and anticipating to shut 20 more locations during the case. Vasari, the nation's second largest franchise operator of Dairy Queen ("DQ") brand restaurants, said its difficulties can largely be traced to the decline in oil prices. Many of the Debtor's DQ locations sit in "oil country" and have been severely impacted by the decline in oil prices due in large part to the loss of oil-related jobs and the resulting mass exodus of residents from areas in which the DQ locations sit. In the bankruptcy case, the Debtor intends to quickly close certain unprofitable DQ locations and file a plan of reorganization that will provide for the most recovery to the Debtor's creditors. In addition, the Debtor intends to market certain DQ locations for sale to other franchises and consummate sales, if sale prices are sufficient. The Debtor believes its bankruptcy case will avoid further deterioration of the Debtor's business, preserve employee jobs, and achieve maximum values for all creditors. The Debtor owns and operates 70 Dairy Queen ("DQ") restaurants located in Texas, New Mexico, and Oklahoma, employing 900 non-insiders, not including 20 corporate employees. Average daily performance across the Debtor's DQ restaurants is $136,299 in net sales and 15,500 transactions. The Debtor is 100% owned by EMP Vasari Holding LLC, a Georgia limited liability company. No Rent Concessions The Debtor leases the real property on which all of the DQ locations operate as well as their corporate location from 60 landlords pursuant to several different lease agreements. The Leases vary in term and rental payment amounts. As of the Petition Date, the Debtor's total payment due under the Leases on a monthly basis is approximately $500,000. Prepetition, the Debtor made two separate attempts to obtain rent concessions and/or contributions toward deferred maintenance from certain of its landlords. The first attempt by Restaurant Retail Group in October 2015 consisted of approaching 9 landlords and resulted in 4 completed transactions. In addition, in 2017, Mastodon Ventures, Inc., sought similar relief from approximately 42 landlords. Those efforts were unsuccessful. Accordingly, prior to the Petition Date, the Debtor was unable to make rental payments under all of the Leases. Store Closings The Debtor recently closed 9 stores Texas and Oklahoma and anticipates to shut 20 more locations during the case. The Debtor will use the breathing spell provided by the filing of this Bankruptcy Case to continue to analyze those stores, their profitability, and potential remedies for their underperformance. The closing stores are: 1. Hobbs 220 West Bender Boulevard Hobbs, New Mexico 88240 2. Raton 1630 Cedar Street Raton, New Mexico 87740 3. Clinton 720 West Gary Boulevard Clinton, Oklahoma 73601 4. Admiral 7819 East Admiral Place Admiral, Oklahoma 74115 5. Owasso 9495 North Owasso Expressway Owasso,, Oklahoma 74055 6. Crosbyton 303 West Main Street Crosbyton Texas 79322 7. Denver City 500 West Broadway Denver City, Texas 79323 8. Idalou 108 West 1st Street Idalou, Texas 79329 9. Lockney 217 So uth Main Street, Lockney, TX 79241 10. Merkel 1107 North 7th Street, Merkel, Texas 79536 11. Post 601 North Broadway Post, Texas 79356 12. Seagraves 1005 Railroad, Seagraves, Texas 79359 13. Clarendon 603 West 2nd Street, Clarendon, Texas 79226 14. Claude 298 West 1st Street, Claude, Texas 79017 15. Coleman 2000 South Commercial Avenue Coleman Texas 76834 16. Perryton 1014 South Main Street Perryton Texas 79070 17. Shamrock 1243 North Main Street Shamrock Texas 79079 18. Wellington 1010 Houston Street Wellington Texas 79095 19. Dalhart 215 Oak Avenue Dalhart Texas 79022 20. Dumas 224 S. Dumas Avenue Dumas Texas 79029 21. Gruver 200 Main Street Gruver Texas 79039 22. Haskell 211 North 1st St., Haskell, TX 23. Stratford 502 East Texas Avenue Stratford Texas 79084 24. Cedar Hill 303 West Copper Street Cedar Hill Texas 75104 25. Carrollton 3488 East Rosemead Parkway Carrollton Texas 75007 26. Waco 125 LaSalle Waco Texas 76706 27. San Augustine 1010 Nacogdoches Highway San Augustine Texas 28. Conroe 1612 North Frazier Street Conroe Texas 77301 29. Giddings 977 East Austin Street Giddings Texas 78942 The Debtor hopes filing for chapter 11 bankruptcy will help protect more than 700 jobs at the 45 restaurants that will remain open. Second Bankruptcy This is the second time the business has sought bankruptcy protection. Roundtable Corporation, Food Service Holdings, Ltd. ("FSH"), and Concert Management, Ltd., the Debtor's predecessors-in-interest to several of the DQ locations, sought bankruptcy protection (Bankr. E.D. Tex. Lead Case NO. 12-40510) in March 2012. In June 28, 2012, Vasari at the time owned by other individuals and entities unrelated to the current owner, acquired the assets of Roundtable, et al., including 71 DQ franchises, in exchange for $10,500,000. After operating Vasari for approximately 18 months, EMP Vasari Holding, LLC entered into that certain membership Interests Purchase Agreement dated December 2015, purchasing 100% of the equity of Vasari from the prior owners. Since that date, Vasari sold 4, closed 5, relocated 1, and opened 6 stores. First Day Motions To minimize the adverse effects on the business as a result of the commencement of the bankruptcy case, the Debtor requests various types of relief in certain "first-day" applications and motions. The First-Day Motions seek authorization to (a) use cash collateral and postpetition financing necessary for continued funding of the Debtor's operations; (b) pay amounts needed to satisfy wages and benefits owed to employees working at the DQ locations and at Vasari's headquarters; (c) maintain prepetition cash management systems necessary to ensure proper cash controls; (d) employ Donlin, Recano & Company, Inc., as claims, noticing, and solicitation agent for the Debtor; (e) extend the deadlines for filing the bankruptcy schedules and statement of financial affairs; (f) limit notice to certain entities on the Debtor's master service list; and (g) employ TAGeX SALES, INC. ("TAG") to market, advertise, auction, and sell certain furniture, fixtures, and equipment of the Debtor. A copy of the affidavit in support of the first-day motions is available at: http://bankrupt.com/misc/Vasari_27_1st_Day_Affidavit1.pdf About Vasari, LLC Fort Worth, Texas-based Vasari, LLC -- http://www.vasarillc.com/-- is a franchisee of the Dairy Queen restaurant with 70 locations in Texas, Oklahoma, and New Mexico. The Dairy Queen restaurants serve a normal fast-food menu featuring burgers, French fries, salads and grilled and crispy chicken in addition to frozen treats and hot dogs. Vasari, LLC, sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 17-44346) on Oct. 30, 2017, with plans to close 29 locations. The Hon. Mark X. Mullin is the case judge. Husch Blackwell LLP is the Debtor's counsel. The Advantage Group Enterprise, Inc., is the auctioneer. Donlin, Recano & Company, Inc., is the claims agent. The Debtor estimated assets and debt of $10 million to $50 million. WALTER INVESTMENT: Moody's Affirms Caa3 CFR; Outlook Negative ------------------------------------------------------------- Moody's Investors Service has affirmed Walter Investment Management Corp's (Walter) rating. The outlook is negative. The following ratings were affirmed: * Corporate Family Rating at Caa3; negative outlook * Senior Unsecured Rating at Ca; negative outlook * Senior Secured Bank Credit Facility Rating at Caa2; negative outlook RATINGS RATIONALE On October 25, 2017, Walter disclosed that it had reached an agreement with more than two-thirds of its secured term lenders and more than two-thirds of its senior unsecured bond creditors to pursue a pre-packaged bankruptcy. The company has not yet reached an agreement with its convertible note holders as originally contemplated under the out-of-court restructuring the company announced it was pursuing in August. At that time, Moody's downgraded Walter's ratings to reflect the expected loss of the proposed restructuring. The affirmation of Walter's ratings reflects the similar terms and loss content of the pre-packaged bankruptcy with the out-of-court restructuring. The pre-packaged agreement requires that only the holding company file for bankruptcy, and not the operating subsidiaries, a credit positive as the impact of the filing on day-to-day operations will be more limited. The senior unsecured debt holders will receive a $250 million secured second lien note, modestly more than the $200 million contemplated in the out-of-court restructuring proposal, along with $100 million convertible preferred notes mandatorily convertible into 73% of Walter's common stock. Finally convertible bond holders will receive a small portion of the equity in the proposed pre-packaged bankruptcy. The company must commence the Chapter 11 bankruptcy by November 30, 2017 per the agreement. The company has made progress in its restructuring negotiations. However, the negative outlook reflects the lack of an agreement with the convertible bondholders as well as a small percent of secured term lenders and senior unsecured bondholders. In addition, the negative outlook reflects the uncertainty around a bankruptcy filing including that the bankruptcy might be extended or that the operating companies might also file for bankruptcy. The Caa2 rating of the senior secured bank credit facility and the Ca rating of the senior unsecured debt reflects Moody's notching analysis which incorporates their priority of claim and strength of asset coverage. An upgrade is unlikely until restructuring negotiations are completed. Upon completion, Walter's Corporate Family could be upgraded if the restructuring, including any bankruptcy filing, is completed quickly and follows or is better than the contours of the current restructuring proposal. Assuming the senior unsecured bondholders receive a newly issued secured second lien note as proposed, the ratings on the existing senior unsecured notes will be withdrawn. It is unlikely that Walter's senior secured term loan ratings will be upgraded until the company is able to achieve sustainable profitability along with improved leverage metrics. The ratings could be downgraded if the terms of the restructuring are revised in a way that worsens senior secured and senior unsecured lenders' expected loss. In addition, the ratings could be downgraded if the operating subsidiaries file for bankruptcy, if the bankruptcy proceedings last for an extended period of time or if the company's financial performance worsens over the next 12-18 months. The principal methodology used in these ratings was Finance Companies published in December 2016. WARWICK YARD: DLA Seeks Appointment of Chapter 11 Trustee --------------------------------------------------------- Warwick Valley DLA, L.L.C. filed with the U.S. Bankruptcy Court for the Southern District of New York a cross-motion for an entry of an order appointing a chapter 11 trustee in the chapter 11 bankruptcy case of The Warwick Yard LLC. On or about Oct. 2, 2017, the Debtor filed Debtor's Motion for the Appointment of an Examiner. The Examiner Motion seeks appointment of an examiner to investigate and report on the actions of MAAA LLC, a member of Ocyard, LLC, and Anthony Abbatine, a member of MAAA. Ocyard is the Debtor's sole member. The Examiner Motion alleges that MAAA and Mr. Abbatine have breached fiduciary duties to the Debtor and breached the Debtor and Ocyard's operating agreements, and requests appointment of an examiner to, inter alia, "discover causes of action [against MAAA and Mr. Abbatine] for fraud, theft, embezzlement or other acts of self-dealing and breaches of fiduciary duties owed to the Debtor." The section 341 meeting of creditors was held on Oct. 3, 2017 at 1:30 p.m. at the Office of the United States Trustee. During the 341 Meeting, Mark Goldstein and Oliver Papraniku -- the members of DEMS Partners, LLC, majority member of the Debtor -- each testified on behalf of the Debtor. Messrs. Goldstein and Papraniku testified to the general chaos in the Debtor's operations. DLA seeks the appointment of a chapter 11 trustee because it is clear that the Debtor lacks control over its own books and records. Mr. Goldstein testified at the 341 Meeting that, notwithstanding the allegations of fraud, mismanagement and embezzlement against Mr. Abbatine, he and Mr. Papraniku have no ability to limit Mr. Abbatine's access to the Debtors books and records and/or bank accounts and Mr. Abbatine has full access to the Debtor's operating funds. In addition, Mr. Goldstein testified that Mr. Abbatine has not properly accounted for tournament revenue, suggesting theft of those funds. Compounding this problem is the claim that the Debtor does not have access to its own books and records, and have therefore not prepared monthly operating reports. Testimony of the Debtor's representative at the 341 Meeting also makes clear that the Debtor is mismanaged, and Mr. Goldstein has repeatedly made allegations of dishonesty, theft, and embezzlement by Mr. Abbatine. Messrs. Goldstein and Papraniku have now conceded an inability to control Mr. Abbatine and/or restrict access to the Debtor's books and records and/or resources, and Mr. Abbatine -- the alleged wrongdoer -- has unfettered access to all of the Debtor's revenue. For these reasons alone, there are grave doubts about whether the Debtor is being properly managed in the interests of the Debtor's creditors, appointment of a chapter 11 trustee is appropriate "for cause" pursuant to section 1104(a) of the Bankruptcy Code. The admissions of self-interest by the Debtor's majority holders likewise justify appointment of a chapter 11 trustee. Mr. Papraniku stated they are considering only those restructuring options that preserve their investment in the real property and their equity in the Debtor's business. Thus, to date, the Debtor has not developed any real process for reorganization and it is unlikely that offers like those attached to the Velocci Certification as Exhibit A will be seriously considered by the Debtor because it results in an outright sale. This blatant self-interest offers the Court an independent basis for appointment of a chapter 11 trustee under section 1104(a) of the Bankruptcy Code. A full-text copy of DLA's Cross-Motion is available at: http://bankrupt.com/misc/nysb17-36103-47.pdf Counsel for Warwick Valley DLA, L.L.C.: Frank F. Velocci DRINKER BIDDLE & REATH LLP 1177 Avenue of the Americas 41st Floor New York, New York 10036-2714 Telephone: (212) 248-3140 Facsimile: (212) 248-3141 About The Warwick Yard The Warwick Yard is a New York limited liability company that operates a sports complex, which has open fields and covered dome field for rent to sports teams, and charges on a per use basis. Warwick Yard's only asset is the real property located at 120 State School Road, Warwick, New York 10990, which has been valued at approximately $5 million. The Warwick Yard filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 17-36103) on June 28, 2017. The petition was signed by Mark Goldstein, its member and manager. The case is assigned to Judge Cecelia G. Morris. Brian K. Condon, Esq. at Condon & Associates, PLLC represents the Debtor. The Debtor estimates $1 million to $10 million in assets and liabilities. No official committee of unsecured creditors has been appointed. WESTINGHOUSE ELECTRIC: Toshiba Must Modify Confidentiality Order ---------------------------------------------------------------- On August 8, 2017, Judge Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York entered a Consent Order, in a form and substance agreed to by Toshiba Corporation, the Statutory Unsecured Claimholders' Committee and other parties, that authorized the UCC to issue deposition and document subpoenas to Toshiba and its affiliates, present and former directors, officers, employees and professionals pursuant to Rule 2004. By a further consent motion, Toshiba and the UCC now seek the entry of a Confidentiality Order that will govern documents and information that Toshiba produces to the UCC during the course of the agreed-upon Rule 2004 discovery. The proposed Confidentiality Order contains certain familiar provisions regarding the treatment of information designated as "Confidential" or as "Advisors' Eyes Only," along with procedures that allow the UCC to challenge such designations. At a hearing on Oct. 18, 2017, the Court asked for further clarification as to what the parties intend. The parties informed the Court that they did not intend to modify the standards that would apply in the event a governmental entity were to seek access to materials provided by Toshiba to the UCC, and that they were not asking the Court to "prejudge" the question of whether a governmental entity would have access to such materials. However, the parties have made clear that they do intend that any request for modification of the Confidentiality Order to obtain materials for use in other proceedings be subject to the ordinary standard applied in this Circuit, which is that a party seeking such a modification must show "extraordinary circumstance or special need." It is important that the UCC have access to documents and other information from Toshiba in connection with the tasks the UCC must perform in these cases. Agreements that limit the use of such materials to these bankruptcy cases are ordinary and proper, and Toshiba is entitled to such assurances. However, the Court will not pre-judge possible future requests for access to such materials and will not foreclose parties from making requests to modify the Confidentiality Order in accordance with applicable Second Circuit standards. The proposed Confidentiality Order will be modified to make that clear. A full-text copy of Judge Wiles Decision dated Oct. 27, 2017, is available at: http://bankrupt.com/misc/nysb17-10751-1639.pdf About Westinghouse Electric Westinghouse Electric Company LLC -- http://www.westinghousenuclear.com/-- is a U.S. based nuclear power company founded in 1999 that provides design work and start-up help for new nuclear power plants and makes many of the components. Westinghouse manufactures and supplies the commercial fuel products needed to run the plants, and it offers training, engineering, maintenance, and quality management services. Almost 50% of nuclear power plants around the world and about 60% of U.S. plants are based on Westinghouse's technology. Westinghouse's world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania. On Oct. 16, 2006, Westinghouse Electric was sold for $5.4 billion to a group comprising of Toshiba (77% share), partners The Shaw Group (20% share), and Ishikawajima-Harima Heavy Industries Co. Ltd. (3% share). After purchasing part of Shaw's stake in 2013, Japan-based conglomerate Toshiba obtained ownership of 87% of Westinghouse. Amid cost overruns at U.S. nuclear reactors it was building, Westinghouse Electric Company LLC, along with 29 affiliates, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-10751) on March 29, 2017. The petitions were signed by AlixPartners' Lisa J. Donahue, chief transition and development officer. The Debtors disclosed total assets of $4.32 billion and total liabilities of $9.39 billion as of Feb. 28, 2017. The Hon. Michael E. Wiles presides over the cases. Weil, Gotshal & Manges LLP serves as counsel to the Debtors. The Debtors hired AlixPartners LLP as financial advisor; PJT Partners Inc. as investment banker; Kurtzman Carson Consultants LLC as claims and noticing agent; K&L Gates as special counsel; and KPMG LLP as tax consultant and accounting and financial reporting advisor. Toshiba Nuclear Energy Holdings (UK) Ltd. is represented by Albert Togut, Esq., Brian F. Moore, Esq., and Kyle J. Ortiz, Esq., at Togut, Segal & Segal LLP. On April 7, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. Proskauer Rose LLP is the committee's bankruptcy counsel, and Houlihan Lokey Capital, Inc. serves as its investment banker. The Board of Directors of Westinghouse appointed a special panel called the U.S. AP1000 Committee to oversee the company's activities related to certain AP1000 nuclear plants located in Georgia and South Carolina. XFS INVESTMENTS: Case Summary & Unsecured Creditor -------------------------------------------------- Debtor: XFS Investments, LLC 13389 Folsom Blvd., Suite 300-172 Folsom, CA 95630 Chapter 11 Petition Date: October 31, 2017 Case No.: 17-27184 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Hon. Christopher D. Jaime Debtor's Counsel: Steven W. Shumway, Esq. LAW OFFICE OF W. STEVEN SHUMWAY 3400 Douglas Blvd., Suite 250 Roseville, CA 95661 Tel: 916-789-8821 Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by David Gruebele, manager. The Debtor lists Ocwen Loan Servicing as its sole unsecured creditor holding a claim of $1.32 million. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/caeb17-27184.pdf Y&K SUN: Jeffrey Weinman Appointed as Chapter 11 Trustee -------------------------------------------------------- Judge Michael E. Romero of the U.S. Bankruptcy Court for the District of Colorado approved the appointment of Jeffrey A. Weinman as Chapter 11 Trustee in the case of Y&K Sun, Inc. About Y&K Sun Y&K Sun, Inc., sought Chapter 11 protection (Bankr. D. Colo. Case No. 16-14761) on May 12, 2016. The case judge is Hon. Howard R. Tallman. The Debtor is represented by Andrew D. Johnson, Esq., at Oonsager Guyerson Fletcher Johnson. The Debtor estimated $1 million to $10 million in assets and debt. [*] Fischer Enterprises Expands Investment Opportunities -------------------------------------------------------- After successful acquisitions of Dippin' Dots and Doc Popcorn, Fischer Enterprises, L.L.C. is planning to broaden its portfolio, honing in on food segment opportunities. In addition to overseeing Fischer Enterprises L.L.C., Scott Fischer, also serves as the CEO for Dippin' Dots and Doc Popcorn. Fischer acquired Dippin' Dots in May 2012 after its high-profile bankruptcy and has since guided the leader of flash-frozen beaded ice cream and frozen treats to achieve the highest sales volume in its nearly 30-year history. The brand has also experienced double-digit growth for the past three years by focusing on account development and retention, strong franchise sales and expanded distribution to entertainment venues and third-party retail outlets. In 2014, Fischer Enterprises acquired Doc Popcorn, the largest popcorn franchise in the U.S., which bolstered its portfolio of food and snack brands. Since then, Doc Popcorn expanded internationally into Chile and Oman and opened more than 40 individual Doc Popcorn and Dippin' Dots and Doc Popcorn co-branded locations. "After realizing the rapid uptick in gross annual retail sales through Dippin' Dots, we were eager to take on additional opportunities that allowed us to expand," said Fischer. "Seeing the synergy and prosperity Doc Popcorn has had through our procurement, we are continuing to look for opportunities for capital infusions in new market segments to further our growth. We have our sights set on strategic opportunities in the food segment specifically due to the upward growth trends in the category." Fischer adds, "We are seeing the dust settle across the U.S. following the 2008 economic downturn. This has opened interesting and attractive opportunities in the A&D segment for deliberate investments and acquisitions that are culturally supportive to the sustainability of our goals at Fischer Enterprises." Fischer Enterprises is exploring investment opportunities with brands in the food segment that range in annual revenue between $5 million and $50 million. About Fischer Enterprises, L.L.C. Fischer Enterprises, L.L.C. is a privately held investment firm that works as an investment vehicle into financial institutions and other private companies. Founded in 2006 in Oklahoma City, its broad ranging investments include real estate development and several gourmet food companies such as Dippin' Dots, the original beaded ice cream; and Doc Popcorn, the largest popcorn franchise in the U.S. Fischer Enterprises is actively exploring investment opportunities to fund in the food segment. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Donald Bryce Evans Bankr. S.D. Ala. Case No. 17-04010 Chapter 11 Petition filed October 20, 2017 represented by: Robert M. Galloway, Esq. GALLOWAY WETTERMARK EVEREST & RUTENS, LLP E-mail: bgalloway@gallowayllp.com In re David W. Nyberg Bankr. D. Conn. Case No. 17-31599 Chapter 11 Petition filed October 20, 2017 represented by: Joseph J. D'Agostino, Jr., Esq. E-mail: joseph@lawjjd.com In re David Alan Newton and JoniAnn Marie Newton Bankr. M.D. Fla. Case No. 17-08866 Chapter 11 Petition filed October 20, 2017 represented by: Sheila D Norman, Esq. LAW OFFICES OF NORMAN AND BULLINGTON E-mail: sheila@normanandbullington.com In re Charles W. Fuqua, II and Ruth A. Fuqua Bankr. C.D. Ill. Case No. 17-91140 Chapter 11 Petition filed October 20, 2017 represented by: Roy Jackson Dent, Esq. DENT LAW OFFICE, LTD. E-mail: roy.jackson.dent@gmail.com In re Marie's Family Healthcare & Sitter Services, Inc. Bankr. W.D. La. Case No. 17-31785 Chapter 11 Petition filed October 20, 2017 See http://bankrupt.com/misc/lawb17-31785.pdf represented by: J. Garland Smith, Esq. J. GARLAND SMITH & ASSOCIATES E-mail: jgarlandsmith@yahoo.com In re Shah Deen Bankr. D.N.J. Case No. 17-31314 Chapter 11 Petition filed October 20, 2017 represented by: David L. Stevens, Esq. SCURA, WIGFIELD, HEYER & STEVENS E-mail: dstevens@scuramealey.com In re Clarence L. Gibbs, Jr. Bankr. E.D.N.C. Case No. 17-05163 Chapter 11 Petition filed October 21, 2017 represented by: Danny Bradford, Esq. PAUL D. BRADFORD, PLLC E-mail: dbradford@bradford-law.com In re William Tuma Bankr. S.D. Cal. Case No. 17-06388 Chapter 11 Petition filed October 22, 2017 represented by: Vikrant Chaudhry, Esq. VC LAW GROUP, LLP E-mail: vik@thevclawgroup.com In re Blackcreek Farm LLC Bankr. N.D.N.Y. Case No. 17-31422 Chapter 11 Petition filed October 22, 2017 See http://bankrupt.com/misc/nynb17-31422.pdf represented by: Mary Lannon Fangio, Esq. WHITELAW & FANGIO E-mail: mary@fangiolaw.com In re Red Booth, Inc. Bankr. C.D. Cal. Case No. 17-22975 Chapter 11 Petition filed October 23, 2017 See http://bankrupt.com/misc/cacb17-22975.pdf represented by: Sandford L. Frey, Esq. LEECH TISHMAN FUSCALDO & LAMPL, INC. E-mail: sfrey@leechtishman.com In re Cascade Foods LLC Bankr. N.D. Ga. Case No. 17-68487 Chapter 11 Petition filed October 23, 2017 See http://bankrupt.com/misc/ganb17-68487.pdf represented by: Kenneth Mitchell, Esq. GIDDENS, MITCHELL & ASSOCIATES, P.C. E-mail: gmapclaw1@gmail.com In re A Taste Of Mao Inc. Bankr. E.D.N.Y. Case No. 17-45496 Chapter 11 Petition filed October 23, 2017 See http://bankrupt.com/misc/nyeb17-45496.pdf represented by: Lawrence Morrison, Esq. MORRISON TENENBAUM PLLC E-mail: lmorrison@m-t-law.com In re Jasvinder Kaur Bankr. E.D.N.Y. Case No. 17-45498 Chapter 11 Petition filed October 23, 2017 represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. E-mail: alla@kachanlaw.com In re JM Doucette LLC Bankr. W.D.N.Y. Case No. 17-12286 Chapter 11 Petition filed October 23, 2017 See http://bankrupt.com/misc/nywb17-12286.pdf represented by: Matthew Allen Lazroe, Esq. LAW OFFICE OF MATTHEW A. LAZROE E-mail: lazroebankruptcy@gmail.com In re Jobs for Babcock I, LLC Bankr. W.D.N.Y. Case No. 17-12293 Chapter 11 Petition filed October 23, 2017 See http://bankrupt.com/misc/nywb17-12293.pdf represented by: James M. Joyce, Esq. E-mail: jmjoyce@lawyer.com In re William E Robinson Bankr. M.D. Pa. Case No. 17-04408 Chapter 11 Petition filed October 23, 2017 represented by: Robert E. Chernicoff, Esq. CUNNINGHAM AND CHERNICOFF PC E-mail: rec@cclawpc.com In re Luis Felipe Hernandez Santana and Nora Ivette Lopez Rodriguez Bankr. D.P.R. Case No. 17-06569 Chapter 11 Petition filed October 23, 2017 represented by: Gloria Justiniano Irizarry, Esq. JUSTINIANO'S LAW OFFICE E-mail: justinianolaw@gmail.com In re Jobs for Babcock II, LLC Bankr. W.D.N.Y. Case No. 17-12296 Chapter 11 Petition filed October 24, 2017 See http://bankrupt.com/misc/nywb17-12296.pdf represented by: James M. Joyce, Esq. E-mail: jmjoyce@lawyer.com In re Two Bar O Country Store, Inc. Bankr. D. Ariz. Case No. 17-12618 Chapter 11 Petition filed October 24, 2017 represented by: Charles R. Hyde, Esq. LAW OFFICES OF C.R. HYDE E-mail: crhyde@gmail.com In re Blossom Park Condominium Association, Inc. Bankr. M.D. Fla. Case No. 17-06803 Chapter 11 Petition filed October 24, 2017 represented by: Roman V Hammes, Esq. ROMAN V. HAMMES, P.L E-mail: roman@romanvhammes.com In re Lesel Love, Jr. Bankr. S.D. Fla. Case No. 17-22850 Chapter 11 Petition filed October 24, 2017 represented by: David C. Rubin, Esq. E-mail: david3051@aol.com In re Bella Rose Skin Care PLLC Bankr. E.D. Mich. Case No. 17-22144 Chapter 11 Petition filed October 24, 2017 See http://bankrupt.com/misc/mieb17-22144.pdf represented by: Adam Daniel Bruski, Esq. WARNER NORCROSS & JUDD LLP E-mail: abruski@wnj.com In re Armand M. Kranick and Anne G. Kranick Bankr. E.D.N.C. Case No. 17-05215 Chapter 11 Petition filed October 24, 2017 represented by: Danny Bradford, Esq. PAUL D. BRADFORD, PLLC E-mail: dbradford@bradford-law.com In re Gen-Kal Pipe & Steel Corp Bankr. D.N.J. Case No. 17-31527 Chapter 11 Petition filed October 24, 2017 See http://bankrupt.com/misc/njb17-31527.pdf represented by: Lee Martin Perlman, Esq. LEE M. PERLMAN E-mail: ecf@newjerseybankruptcy.com In re Brisco Properties LLC Bankr. E.D.N.Y. Case No. 17-76547 Chapter 11 Petition filed October 24, 2017 See http://bankrupt.com/misc/nyeb17-76547.pdf Filed Pro Se In re Jing Yao and Shuang Chen Bankr. E.D. Va. Case No. 17-13609 Chapter 11 Petition filed October 24, 2017 represented by: Craig M. Palik, Esq. MCNAMEE, HOSEA, JERNIGAN, KIM, & ET AL E-mail: cpalik@mhlawyers.com In re 4720 E Burning Tree LLC Bankr. D. Ariz. Case No. 17-12722 Chapter 11 Petition filed October 25, 2017 See http://bankrupt.com/misc/azb17-12722.pdf represented by: Bryan Wayne Goodman, Esq. GOODMAN & GOODMAN, PLC E-mail: bwg@goodmanadvisor.com In re Crepes Du Monde Inc. Bankr. N.D. Cal. Case No. 17-31075 Chapter 11 Petition filed October 25, 2017 See http://bankrupt.com/misc/canb17-31075.pdf represented by: Marc Voisenat, Esq. LAW OFFICES OF MARC VOISENAT E-mail: voisenatecf@gmail.com In re Lawrence E. Crovo Bankr. D. Mass. Case No. 17-13987 Chapter 11 Petition filed October 25, 2017 represented by: Thomas W. Fothergill, Esq. LAW OFFICES OF THOMAS W. FOTHERGILL E-mail: ThomasFothergill@msn.com In re Donald Andrew Driggs Bankr. D. Minn. Case No. 17-43213 Chapter 11 Petition filed October 25, 2017 represented by: Joseph W. Dicker, Esq. JOSEPH W. DICKER PA E-mail: joe@joedickerlaw.com In re Richard Young Bankr. N.D. Miss. Case No. 17-14065 Chapter 11 Petition filed October 25, 2017 represented by: Craig M. Geno, Esq. LAW OFFICES OF CRAIG M. GENO, PLLC E-mail: cmgeno@cmgenolaw.com In re Yehia Osman Bankr. S.D. Miss. Case No. 17-52099 Chapter 11 Petition filed October 25, 2017 represented by: William J. Little, Jr., Esq. LENTZ & LITTLE, P.A. E-mail: ecf@lentzlittle.com In re JKI IV, Inc. Bankr. D.N.J. Case No. 17-31642 Chapter 11 Petition filed October 25, 2017 See http://bankrupt.com/misc/njb17-31642.pdf represented by: Nella M. Bloom, Esq. BIELLI & KLAUDER LLC E-mail: nbloom@bk-legal.com In re ONE 21 Street Corporation Bankr. E.D.N.Y. Case No. 17-45520 Chapter 11 Petition filed October 25, 2017 See http://bankrupt.com/misc/nyeb17-45520.pdf represented by: Randall S. D. Jacobs, Esq. RANDALL S. D. JACOBS, PLLC E-mail: rsdjacobs@chapter11esq.com ********* 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. 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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. 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