/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130508.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 8, 2013, Vol. 17, No. 126 Headlines 1250 OCEANSIDE: Taps G. Rick Robinson as Restructuring Officer 1250 OCEANSIDE: Klevansky Piper Replaces Gelber as Gen. Counsel 23 SEAVIEW: Case Summary & 9 Unsecured Creditors 501 GRANT: Submits List of Top Unsecured Creditors AEROGROW INTERNATIONAL: SMG Growing Held 30.9% Stake at April 22 AHERN RENTALS: $495-Mil. Exit Financing Approval Sought ALCON ACTION AGENCY: 5th Bankruptcy Petition Dismissed ALLY FINANCIAL: Gets $865MM From Sale of ABA Seguros to ACE Group AMERICAN AIRLINES: Ex-Am West Pilots Want Seniority Row Kept Alive AMERICAN AXLE: Reports $7.3 Million Net Income in First Quarter AMERICAN CAPITAL: Fitch Hikes LT Issuer Default Rating to 'BB-' AMERICAN PETRO-HUNTER: Hanover to Sell 16.1-Mil. Common Shares APPLIANCE RECYCLING: Reports $0.2-Mil. Q1 Profit ATP OIL: NGP Gets $32.1MM Payments Under Disgorgement Deal AUGUSTA CENTER: Citizens' Objection to Cash Collateral Use Denied B+H OCEAN: Plan of Reorganization Declared Effective BEN ENNIS: To Present Plan for Confirmation on May 30 BERNARD L. MADOFF: Trustee, Schneiderman Agree to Stay on Appeal BG PETROLEUM: Involuntary Chapter 11 Case Summary BIRDSALL SERVICES: Trustee Convinces Judge to Consider Sale BLACK PRESS: Revenue Decline Prompts Moody's to Cut CFR to 'B3' BOOMERANG SYSTEMS: Cancels Joint Venture with Stokes Industries BRIGHTSTAR CORP: S&P Revises Outlook to Stable & Affirms 'BB-' CCR BRISTOW GROUP: S&P Lowers Senior Unsecured Notes Rating to 'BB-' BUILDERS FIRSTSOURCE: Files Form 10-Q, Had $11.8MM Net Loss in Q1 CARPE MINUTE: Voluntary Chapter 11 Case Summary CASPIAN SERVICES: Five Directors Elected at Annual Meeting CHAMPION INDUSTRIES: Defaults Under Fifth Third Credit Pacts CHINA BOTANIC: Gets NYSE MKT Delisting Notice After Noncompliance CIRCLE ENTERTAINMENT: To Restate 2012 Annual Report CITGO PETROLEUM: Fitch Affirms 'BB-' Issuer Default Ratings CLAIRE'S STORES: To Redeem 9.25% Senior Notes Due 2015 on June 3 CODA HOLDINGS: Coda Automotive Rejecting Former Calif. HQ Lease CODA HOLDINGS: Wins Approval to Pay Critical Vendors CODA HOLDINGS: Former Employee Commences Class Action Suit COLT DEFENSE: Moody's Keeps 'Caa1' CFR After New Sales Pact COMMERCIAL METALS: Moody's Rates Sr. Unsec. Notes Due 2023 'Ba2' COMMERCIAL METALS: S&P Assigns 'BB+' Rating to $300MM Sr. Notes COOPER STREET: Voluntary Chapter 11 Case Summary COPANO ENERGY: S&P Raises Corporate Credit Rating From 'B+' CROWN HOLDINGS: Fitch Affirms & Withdraws 'BB+' IDR DUNE ENERGY: Amends Credit Agreement with Bank of Montreal DYNASIL CORP: Alan Levine Elected to Board of Directors EAGLE RECYCLING: Hires CohnReznick as Financial Advisors EASTMAN KODAK: Terminates Purchase Agreement With Brother EDISON MISSION: Incurs $82-Million Net Loss in First Quarter EMMIS COMMUNICATIONS: To Repurchase $500,000 Preferred Stock ENERGY XXI: Moody's Changes Outlook on 'B2' CFR to Stable EURAMAX INTERNATIONAL: Seven Directors Re-Elected to Board FAIRWEST ENERGY: Alberta Regulator Issues Cease Trade Order FBLN INC: Case Summary & 20 Largest Unsecured Creditors FIRST INDUSTRIAL: Leasing Gains Cue Moody's to Upgrade Ratings GATEHOUSE MEDIA: Incurs $17.6 Million Net Loss in First Quarter GATZ PROPERTIES: Long Island Club to Have Sale Contract in 10 Days GENERAC POWER: Moody's Rates Proposed $1.15-Bil. Term Loan 'B2' GENERAL MOTORS: Fitch Expects to Rate Sr. Unsecured Notes 'BB' GENERAL MOTORS: S&P Affirms 'BB' ICR & Rates $2BB Notes 'BB-' GLOBAL TEL*LINK: S&P Revises Outlook & Affirms 'B' CCR GLOBALSTAR INC: Forbearance with Noteholders Extended to May 13 GMX RESOURCES: David Lucke Quits From Board GMX RESOURCES: NGP Writes Off $12.7MM in Subordinated Notes GRANITE DELLS: Ch. 11 Trustee Taps Steve Brown as Attorney GSW HOLDINGS: June 30 Plan Confirmation Hearing Set HALI LLC: Case Summary & 4 Unsecured Creditors HARRISBURG, PA: Settles SEC's Securities Fraud Suit HARVEST OPERATIONS: Moody's Keeps 'Ba2' CFR, Stable Outlook HARVEST OPERATIONS: S&P Assigns 'BB-' Corporate Credit Rating HEALTH NET: S&P Affirms 'BB' Rating & Revises Outlook to Stable HORIZON LINES: Incurs $20.3 Million Net Loss in First Quarter HOSTESS BRANDS: Judge OKs Pension Plan Settlements IDERA PHARMACEUTICALS: Pillar Waives Rights in Liquidation Event INERGY MIDSTREAM: S&P Affirms 'BB' CCR; Outlook Stable INFUSYSTEM HOLDINGS: Names Mike McReynolds Chief Info. Officer INSPIRATION BIOPHARMA: Plan Filing Date Extended to June 27 INTEGRATED HEALTHCARE: Gets Favorable Order in "Fitzgibbons" Suit INTERNATIONAL HOME: FirstBank Objects to Amended Disclosures IRACORE INTERNATIONAL: Moody's Rates New $110MM Notes 'B3' IRACORE INTERNATIONAL: S&P Assigns B- CCR & Rates $110MM Notes B IRWIN MORTGAGE: Can Hire Aon In Connection With IRC Stock Sale JAMES RIVER: Incurs $42.1 Million Net Loss in First Quarter K-V PHARMACEUTICAL: Conv. Noteholders to Get Shares Under New Plan KIK CUSTOM: S&P Affirms 'B-' CCR & Rates US$420MM Loan 'B-' LCI HOLDING: Seeks Authority to Obtain $230MM in Financing LEHMAN BROTHERS: Has Approval of LB Finance Settlement LEHMAN BROTHERS: Sues Intel to Recoup Collateral LEHMAN BROTHERS: Sues Syncora to Disallow Claims LEHMAN BROTHERS: Wins OK for Sale of LB Rose Properties LEHMAN BROTHERS: Weil Gotshal Files 41st Report on Settlements LLS AMERICA: Trustee Can File Amended Complaint v. Ken Phillips LPL HOLDINGS: S&P Assigns 'BB-' Rating to $1.084BB Secured Loan MAGNETATION LLC: Moody's Assigns B3 CFR & Rates $325MM Note B3 MASTRO'S RESTAURANTS: S&P Raises Corporate Credit Rating to 'B-' MAUI LAND: Incurs $1.81 Million Net Loss in First Quarter MEHENDI LLC: Case Summary & 4 Unsecured Creditors METALS USA: Moody's Withdraws Ratings After Facility Termination MISSION NEW ENERGY: Cash at A$113,000 as of March 31 MONTANA ELECTRIC: Trustee Asks Court to Value U.S. Bank's Claim MONTANA ELECTRIC: Trustee Wants Cash Collateral Use Extended MPM TECHNOLOGIES: Has $500,000 Purchase Agreement with Investors MUSCLEPHARM CORP: Richard Estalella Appointed as COO NECH LLC: US Trustee Balks at Plan Outline; Hearing Tomorrow NEW CENTURY TRS: Court Rejects Lamour's 2nd Disclosure Request NEWLAND INT'L: Taps Epiq as Claims and Balloting Agent NEWLAND INT'L: Final Cash Collateral Hearing on May 17 NEWLAND INT'L: Proposes Gapstone as Financial Advisor NEWLAND INT'L: Seeks OK for Gibson Dunn as Bankruptcy Counsel NEWLAND INT'L: Taps Adural as Panamanian Counsel NORTEL NETWORKS: Mergis to Provide Staff for Residual Operations NORTHLAKE FOODS: Can't Get Back Dividend, 11th Circ. Rules ORCHARD SUPPLY: Incurs $118.4 Million Net Loss in Fiscal 2012 ORECK CORP: Files for Chapter 11 With Plans to Sell ORECK CORP: Proposes BMC Group as Claims Agent OTELCO INC: Has Green Light to Exit Prepack Chapter 11 OTELCO INC: Posts $4.9MM Q1 Operating Income; Ch.11 Exit Looms PATRIOT COAL: Union Warns of Strike If Contract Voided PERFORMANCE FOOD: Moody's Gives 'B1' CFR & Rates $750MM Loan 'B3' PERFORMANCE FOOD: S&P Assigns 'B' CCR & Rates $750MM Loan 'CCC+' PHOENIX DEVELOPMENT: Files Chapter 11 Petition in Georgia PUTNAM STONE: Case Summary & 9 Unsecured Creditors PVR PARTNERS: Moody's Assigns 'B2' Rating to $300MM Senior Notes PVR PARTNERS: S&P Rates $300MM Senior Unsecured Notes 'B-' QBEX ELECTRONICS: Can Extend Plan Filing Deadline to June 13 RESIDENTIAL CAPITAL: Sues UMB, Wells Fargo Over Lien Value RODEO CREEK: Great Basin Units' Mines Sold to Waterton Global SEA TRAIL: Buyer Emerges for Golf Resort SBA TELECOMMUNICATIONS: S&P Retains 'B+' Sr. Unsec. Notes Rating SBM CERTIFICATE: Says Operations to Continue While in Ch. 11 SCOOTER STORE: Taps APS Services to Provide Management Services SCOOTER STORE: Engages Epiq as Administrative Advisor SCOOTER STORE: Wants Fulbright & Jaworski as Special Counsel SCOOTER STORE: Hires Morgan Joseph as Investment Banker SEARS HOLDINGS: Offering 5 Million Shares Under Stock Plan SEAWORLD PARKS: Moody's Rates $1.405-Bil. Senior Term Loan 'Ba3' SEAWORLD PARKS: S&P Rates $1.4 Billion Term Loan 'BB-' SEMINOLE HARD: S&P Assigns 'BB-' Rating to $350MM Senior Notes SENSUS USA: Profit Slide Prompts Moody's to Lower CFR to 'B3' SEVEN COUNTIES: U.S. Trustee Wants More Time to Object to Hiring SEVEN COUNTIES: Wants Patient Care Ombudsman Appointment Waived SIONIX CORP: Amends Current Report with SEC SKINNY NUTRITIONAL: Voluntary Chapter 11 Case Summary SONIC AUTOMOTIVE: Moody's Rates New $300MM Subordinated Notes B3 SONIC AUTOMOTIVE: S&P Raises Corp. Credit Rating to 'BB' SPECIAL ELECTRIC: Calif. Appeals Court Remands Melendrez PI Suit STAR NEWS: Loan Assignee Gets Favorable Ruling vs. Gerson Fox SUNTECH POWER: Reports $358 Million Revenue in Fourth Quarter THERAPEUTICSMD INC: Robert Smith Owned 9% Stake at April 30 TIMEGATE STUDIOS: Files for Bankruptcy, Looks for Buyer TRANS-LUX CORP: Maturity of People's United Loan on June 30 TRINSUM GROUP: Court Okays $2.5MM Settlement Resolving 20 Suits UNIGENE LABORATORIES: Richard Levy Had 65.4% Stake at April 25 UNIFIED 2020 REALTY: Files Bare-Bones Petition in Dallas UNITEK GLOBAL: Has Forbearance with Lenders Until May 30 VILLAGE AT LAKERIDGE: Insider Status Unchanged by Claim Assignment VPR OPERATING: Hires Patton Boggs as Counsel WARNER MUSIC: To Reprice $492 Million Secured Term Loan WCA WASTE: Moody's Affirms 'B2' CFR & Rates New $372MM Debt 'B1' WESTMORELAND COAL: J. Gendell Held 16.5% Stake as of April 29 YRC WORLDWIDE: Incurs $24.5 Million Net Loss in First Quarter ZOGENIX INC: Posts Positive Top-Line Results From Clinical Trial * Fitch Says U.S. Auto Lender Asset Quality to Further Weaken * Moody's Notes Divergence in European and US CDS Spreads * April Bankruptcy Filings Down 8% from Previous Year * Fed Governor Calling for Stronger Capital at Megabanks * Flagstar to Pay $110 Million to Settle MBIA Mortgage Lawsuit * Housing Crash Fades as Defaults Decline to 2007 Levels * JPMorgan Investors Urged to Split Chairman Role, Oust Directors * N.Y. Plans Homeowner Enforcement Against Financial Firms * New Problem Loan Rates Hit Six-Year Low, LPS March Report Shows * Senate Bill 404 Aims to Eliminate Abusive "Double Dip" Claims * Cadwalader's Rapisarsdi, Davis & Friedman Transfer to O'Melveny * Upcoming Meetings, Conferences and Seminars ********* 1250 OCEANSIDE: Taps G. Rick Robinson as Restructuring Officer -------------------------------------------------------------- 1250 Oceanside Partners, et al., seek authority from the U.S. Bankruptcy Court for the District of Hawaii to employ G. Rick Robinson as chief restructuring officer for a limited period of six months from and after an order approving the employment application. Mr. Robinson will be paid $15,000 per month, plus general excise tax, and will be reimbursed for all travel and other necessary expenses. In the event an order confirming the Debtors' reorganization plan is entered during the six-month period of Mr. Robinson's retention, he will be paid a bonus of $25,000. Mr. Robinson assures the Court that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. 1250 OCEANSIDE: Klevansky Piper Replaces Gelber as Gen. Counsel --------------------------------------------------------------- 1250 Oceanside Partners, et al., sought and obtained authority from Judge Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii to employ Klevansky Piper, LLP, as general counsel, replacing Gelber, Gelber & Ingersoll. In a separate request, the Debtors also seek authority from Judge Faris to employ Carlsmith Ball, LLP, as special real estate and development counsel. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. 23 SEAVIEW: Case Summary & 9 Unsecured Creditors ------------------------------------------------ Debtor: 23 Seaview Holdings, LLC dba Parkview Inn 23 Seaview Avenue Ocean Grove, NJ 07756 Bankruptcy Case No.: 13-19800 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Sam Della Fera, Esq. TRENK, DIPASQUALE ET AL. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Fax: (973) 243-8677 E-mail: sdellafera@trenklawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-19800.pdf The petition was signed by Marshall Koplitz, general operating manager. 501 GRANT: Submits List of Top Unsecured Creditors -------------------------------------------------- 501 Grant Street Partners LLC submitted a list that identifies its top 20 unsecured creditors. Creditors with the three largest claims are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robins, Kaplan, Miller & $80,914 Ceresi 2049 Centiry Park East Suite 3400 Los Angeles, CA 90067 Jones Lang LaSalle $69,531 c/o The Bank of New York Mellon P.O. Box 360757 Pittsburgh, PA 15251-6757 Duquesne Light Company $52,475 Payment Processing Center Pittsburgh, PA 15267-0001 A copy of the creditors' list is available for free at: http://bankrupt.com/misc/501_GRANT_creditors.pdf About 501 Grant An involuntary Chapter 11 bankruptcy petition was filed against 501 Grant Street Partners LLC, based in Woodland Hills, California (Bankr. C.D. Calif. Case No. 12-20066) on Nov. 14, 2012. 501 Grant Street Partners owns the Union Trust Building in downtown Pittsburgh, Pennsylvania. It sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 12-23890) on Aug. 3, 2012, to avert a sheriff sale of the building. The August petition estimated under $50,000 in both assets and debts. In November 2012, U.S. Bankruptcy Judge Judith K. Fitzgerald dismissed 501 Grant Street Partners' Chapter 11 petition, paving for the sheriff sale of the Union Trust Building on Jan. 7, 2013. SA Challenger Inc., which acquired interest in the building's mortgage by U.S. Bank, has sought to foreclose on the Debtor's property. SA Challenger is seeking to collect $41.4 million. Earlier in November, at the lender's request, Judge Ward appointed the real estate firm CBRE to serve as receiver for the building, overseeing its operation and management until the sheriff sale takes place. The bankruptcy judge approved an involuntary Chapter 11 petition for 501 Grant, entering an order for relief on Dec. 13, 2012. The petitioning creditors are Allied Barton Security Services LLC, owed $960 for security services; Cost Company LP, $5,900 owed for masonry work; and MSA Systems Integration Inc., owed $2,401 for unpaid invoice. Malhar S. Pagay, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the petitioning creditors. Attorneys at Levene, Neale, Bender, Yoo & Brill LLP represent the Debtor in the involuntary Chapter 11 proceeding. AEROGROW INTERNATIONAL: SMG Growing Held 30.9% Stake at April 22 ---------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, SMG Growing Media, Inc., and The Scotts Miracle-Gro Company disclosed that, as of April 22, 2013, they beneficially owned 2,649,007 shares of common stock of AeroGrow International, Inc., representing 30.97% of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/VQduOR About AeroGrow Boulder, Colo.-based AeroGrow International, Inc., is a developer, marketer, direct-seller, and wholesaler of advanced indoor garden systems designed for consumer use and priced to appeal to the gardening, cooking, and healthy eating, and home and office decor markets. The Company reported a net loss of $3.55 million for the year ended March 31, 2012, a net loss of $7.92 million for the year ended March 31, 2011, and a net loss of $6.33 million for the year ended March 31, 2010. The Company's balance sheet at Dec. 31, 2012, showed $4.13 million in total assets, $4.31 million in total liabilities and a $185,890 total stockholders' deficit. AHERN RENTALS: $495-Mil. Exit Financing Approval Sought ------------------------------------------------------- BankruptcyData reported that Ahern Rentals filed with the U.S. Bankruptcy Court a motion to enter into commitment letters, fee letters and a syndication letter to obtain exit financing from Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Jefferies Finance to fund Debtor's Chapter 11 Plan of Reorganization via a $350 million senior secured asset- based revolving credit facility. The report added that the Company also seeks Court approval of a $145 million senior secured first lien last out term loan exit facility from Husky Finance Holdings and Jefferies Finance. Ahern Rentals explains, "the Debtor has exercised sound business judgment in hiring the Lenders to perform the services described in the Exit Financing Letters, which is necessary to Debtor's efforts to obtain Exit Financing and pay off the DIP Loan and Term Loan, which will afford the Debtor the opportunity to confirm and effectuate its Plan, and thus emerge from Chapter 11. Furthermore, because the obligations incurred by Debtor under the Exit Financing Letters are fair, reasonable, and necessary to furthering the Exit Financing process, Debtor seeks authorization to incur and pay these obligations as administrative expenses," BData said, citing court documents. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Privately held Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver and DLA Piper LLP (US) serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In December 2012, the Court terminated Ahern's exclusive right to propose a plan, saying the company failed to negotiate in good faith after a year in Chapter 11. Certain holders of the Debtor's 9-1/4% senior secured second lien notes due 2013 proposed in February their own Plan to complete with Ahern's proposal. The Noteholder Group consists of Del Mar Master Fund Ltd.; Feingold O'Keeffe Capital, LLC; Nomura Corporate Research & Asset Management Inc.; Och-Ziff Capital Management Group; Sphere Capital, LLC - Series B; and Wazee Street Capital Management, LLC. They are represented by Laurel E. Davis, Esq., at Fennemore Craig Jones Vargas, Kurt A. Mayr, Esq., and Daniel S. Connolly, Esq., at Bracewell & Giuliani LLP. In March 2013, the Court approved disclosure materials explaining both plans. Ahern and the lenders both propose paying unsecured claims in full. The lenders' plan fully pays unsecured creditors when the plan is implemented. The Ahern plan pays them over a year, thus giving unsecured creditors the right to vote only on the Debtor's plan. Ahern's Plan offers the junior lenders $160 million cash and new debt if they accept the plan. Otherwise, they are slated to receive all new debt, for eventual full payment. The lenders' plan pays all creditors in full other than the $267.7 million in second-lien debt that converts to equity. Plan confirmation hearing has been set for June 3 to 5, 2013. A copy of the Court-approved scheduling order with respect to the Plan confirmation hearing is available at http://is.gd/DU27CF ALCON ACTION AGENCY: 5th Bankruptcy Petition Dismissed ------------------------------------------------------ A South Carolina bankruptcy court has dismissed with prejudice the case In re BUTCH JOHNSON dba Alcon Action Agency Realty, Case No. 13-01294-dd (Bankr. D.S.C.). Moreover, the debtor is barred from filing for relief under the Bankruptcy Code in any district for two years from the entry of the order. The current bankruptcy case, filed on March 4, 2013, is the Debtor's fifth filing since 2007. The motion to dismiss the case was brought by the U.S. Trustee. In an April 18, 2013 order, Bankruptcy Judge David R. Duncan opined that cause exists to dismiss the Debtor's case as the Debtor has to pay a required installment toward the filing fee for the case as ordered by the Court, and due to the evidence supporting the Debtor's bad faith in filing the case. The Court noted that the Debtor filed the present case to do nothing more than postpone the foreclosure sale of his property at 312 Oak Brook Drive, in Columbia, South Carolina; but he has no realistic chances of reorganizing as he has no regular or significant source of income from which to fund a plan or to pay for normal living expenses. A copy of the Bankruptcy Court's April 18, 2013 Order is available at http://is.gd/WCs4Brfrom Leagle.com. ALLY FINANCIAL: Gets $865MM From Sale of ABA Seguros to ACE Group ----------------------------------------------------------------- During the fourth quarter of 2012, Ally Financial Inc. announced its agreement to sell its Mexican insurance business, ABA Seguros, to the ACE Group. On May 2, 2013, Ally completed this sale. Ally received approximately $865 million in proceeds from the sale. Ally's Mexican Insurance Business was classified by Ally as discontinued operations as of Dec. 31, 2012, and its operating results were removed from Ally's continuing operations and were presented separately as discontinued operations, net of tax, in Ally's Consolidated Financial Statements, included in Ally's Annual Report on Form 10-K for the year ended Dec. 31, 2012, as well as Ally's Quarterly Report on Form 10-Q for the three-months ended March 31, 2013. About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. The Company's balance sheet at Dec. 31, 2012, showed $182.34 billion in total assets, $162.44 billion in total liabilities, and $19.89 billion in total equity. Ally Financial Inc. reported net income of $1.19 billion for the year ended Dec. 31, 2012, as compared with a net loss of $157 million during the prior year. * * * As reported by the TCR on Feb. 27, 2013, Moody's Investors Service confirmed the B1 corporate family and senior unsecured ratings of Ally Financial, Inc. and supported subsidiaries and assigned a positive rating outlook. In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. In the Feb. 13, 2013, edition of the TCR, Fitch Ratings has maintained the Rating Watch Negative on Ally Financial Inc. including the Long-term IDR 'BB-'. As reported by the Troubled Company Reporter on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long- term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012 edition of the TCR, DBRS, Inc., has placed the ratings of Ally and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital to file a pre-packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. AMERICAN AIRLINES: Ex-Am West Pilots Want Seniority Row Kept Alive ------------------------------------------------------------------ Matt Chiappardi of BankruptcyLaw360 reported that former America West Airlines Inc. pilots urged an Arizona federal judge Friday to keep alive its dispute over pilot seniority in a 2005 merger with U.S. Airways Group Inc., while denying claims that they were trying to derail U.S. Airways' $11 billion merger with American Airlines' bankrupt parent. According to the report, the U.S. Airline Pilots Association petitioned U.S. District Judge Roslyn O. Silver in April to dismiss the former Am West pilots' suit because the Ninth Circuit tossed a similar action over the same issue. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Reports $7.3 Million Net Income in First Quarter --------------------------------------------------------------- American Axle & Manufacturing Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $7.3 million on $755.6 million of net sales for the three months ended March 31, 2013, as compared with net income of $50.3 million on $751.5 million of net sales for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $3.02 billion in total assets, $3.13 billion in total liabilities and a $107.9 million total stockholders' deficit. "AAM's financial results in the first quarter of 2013 reflect our commitment to deliver improved profitability and launch performance globally," said AAM's President and Chief Executive Officer, David C. Dauch. "While we continue to take actions to improve our operating and financial performance, we remain focused on flawlessly launching several major programs in 2013. These include products supporting GM's next-generation full-size pickup truck and SUV program, the RAM Heavy Duty pickup truck program, as well as AAM's EcoTracTM Disconnecting All Wheel Drive system." The Company is targeting full year sales in 2013 to be approximately $3.25 billion. This sales projection is based on the anticipated launch schedule of programs in AAM's new and incremental business backlog and the assumption that the U.S. Seasonally Adjusted Annual Rate of sales increases from approximately 14.4 million vehicle units in 2012 to approximately 15 million vehicle units in 2013. A copy of the Form 10-Q is available for free at: http://is.gd/5DNX1D A copy of the Form 8-K is available for free at: http://is.gd/qc196d Annual Meeting Results American Axle held its annual meeting of stockholders on May 2, 2013. At that meeting, AAM's stockholders elected Elizabeth A. Chappell, Steven B. Hantler and John F. Smith as directors to serve for three-year terms expiring at the annual meeting of stockholders in 2016. AAM's stockholders voted to approve, on an advisory basis, the compensation of AAM's named executive officers and ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2013. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. * * * In September 2012, Moody's Investors Service affirmed the 'B1' Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of American Axle. American Axle carries a 'BB-' corporate credit rating from Standard & Poor's Ratings Services. "The 'BB-' corporate credit rating on American Axle reflects the company's 'weak' business risk profile and 'aggressive' financial risk profile, which incorporate substantial exposure to the highly cyclical light- vehicle market," S&P said, as reported by the TCR on Sept. 6, 2012. AMERICAN CAPITAL: Fitch Hikes LT Issuer Default Rating to 'BB-' --------------------------------------------------------------- Fitch Ratings has completed a peer review of seven rated Business Development Companies (BDCs) in concert with its publication of an industry report, titled 'Business Development Companies - A Comparative Analysis: 2012', which is available on Fitch's website. Based on this review, Fitch has upgraded the long-term Issuer Default Rating (IDR) of American Capital, Ltd. to 'BB-' from 'B+' and affirmed the long-term IDRs of Apollo Investment Corporation, Ares Capital Corporation, BlackRock Kelso Capital Corporation (BKCC), Fifth Street Finance Corp. (FSC), PennantPark Investment Corporation (PNNT), and Solar Capital, Ltd (Solar). The IDRs of the all of the affirmed BDCs are in the 'BBB' rating category. Concurrently, the Rating Outlook for Ares has been revised to Positive from Stable, and the Rating Outlook for Apollo has been revised to Stable from Negative. The Rating Outlooks for the remaining BDCs are Stable. Key Rating Drivers The upgrade of ACAS' ratings reflect its improved operating performance, driven by increased income from asset management strategies, reduced leverage, its ability to refinance the capital structure through the issuance of secured term debt, and the stronger liquidity profile, given the addition of bank revolver capacity. The rating affirmations of the six other BDCs reflect relative stability in core operating performance, stronger asset quality metrics, improved funding flexibility, and the maintenance of leverage levels at-or-below management's targeted range. Portfolio growth continues to slow as firms mature and gain scale and because refinancing activity has remained strong given the low interest rate environment. BDCs, in general, remain more focused on senior positions in the capital structure, particularly as competition has increased, underlying portfolio company leverage has ticked-up, and risk-adjusted returns have declined in certain parts of the market. Valuation volatility remains, but quarterly movements have been much more modest for the majority of the peer group, and most experienced unrealized appreciation in 2012. On average, investment portfolios were marked 2.2% below their cost basis at Dec. 31, 2012, compared to 7.5% below cost at Dec. 31, 2011. Net realized losses on portfolio investments have been meaningful since the start of the crisis, as BDCs dealt with non-accruals, recognized declines in value, participated in portfolio company recapitalizations, or exited underperforming investments in an effort to redeploy proceeds into higher-yielding securities. Portfolio losses did decline in 2012, but remained significant, aggregating to $422.3 million for the fiscal year. Over time, Fitch does not expect realized gains and losses to be a meaningful component of net income, given declines in portfolio equity holdings and improvements in asset quality. Funding flexibility improved significantly in recent quarters, with most BDCs accessing the unsecured debt markets via the issuance of convertible notes and/or retail notes. In 2012 and 1Q13, unsecured issuance amounted to $1.9 billion across six rated BDCs, compared to $545 million of unsecured issuance across three rated issuers in 2011. Fitch views an unsecured funding component favorably as it provides funding diversity, as well as flexibility to encumber assets if necessary for liquidity purposes. Debt maturity profiles have also improved, and ACAS is the only issuer with a maturity in 2013 or 2014, given the amortization of its secured term loan. Access to the public equity markets was also strong in 2012, as improved operating performance and valuation trends pushed share prices back above net asset values during the year. Issuance volume amounted to approximately $1.3 billion in 2012; up over 300% from the prior year. Growing equity bases have kept leverage levels below internal targets and have provided ample liquidity coffers for investment purposes. BDCs are expected to continue to access the markets opportunistically for growth capital. Average BDC leverage, as measured by par debt divided by equity, amounted to 0.50 times (x) at Dec. 31, 2012 compared to 0.56x the year before. Fitch believes leverage levels could rise modestly in 2013 as BDCs draw on revolver capacity for portfolio investment, but Fitch expects portfolio growth rates to decline this year as risk spreads tighten in an overheating market. Fitch believes many BDCs will be focused on refinancing, and potentially re-levering, existing portfolio companies which they know well, or looking for more complex transactions that involve specific industry knowledge, additional time to originate and/or unique structuring. Portfolio concentrations ticked-up modestly in 2012, despite declines in leverage, as some underperforming debt investments were restructured into equity positions. Top 10 investments averaged 64.5% of equity at Dec. 31, 2012, but would be 52.2% if Fitch were to adjust for ACAS' investment in American Capital Asset Management, LLC and European Capital Limited, Ares' investment in the Senior Secured Loan Fund LLC, and Solar's investment in Crystal Capital Financial Holdings LLC, each of which is itself a diversified portfolio of loans. Fitch believes portfolio diversity is critical, as the underperformance of one or more large investments can have an outsized impact on leverage. As a result, BDCs with higher concentrations as a percent of book equity are expected to manage leverage more conservatively, all else equal. Another point of focus for Fitch is net investment coverage of dividends, given the regulatory requirement that BDCs distribute 90% of taxable income on an annual basis. Dividend coverage improved modestly in 2012, given relatively stable dividends and stronger operating performance, however, cash income coverage remains somewhat weaker due to the accrual of paid-in-kind interest and non-cash dividends. Fitch would view core cash earnings coverage at or near 100% on a consistent basis favorably. Rating Sensitivities Fitch believes positive rating momentum for the industry is limited to the 'BBB' category given the relative illiquidity of portfolio investments, more limited funding flexibility than other investment grade rated issuers, an inability for BDCs to retain capital due to distribution requirements, and the impact that fair value accounting has on leverage. However, negative rating action for any one issuer could be driven by deterioration in asset quality or core operating performance, increases in portfolio concentrations or equity holdings without commensurate reductions in leverage, weakening cash income coverage of dividends, and/or the recognition of sizeable realized losses or unrealized portfolio depreciation which forces leverage above management targets for extended periods or reduces cushions on debt covenants. For Solar, in particular, a meaningful increase in leverage could result in negative rating action because its investment portfolio concentrations and equity exposures are higher than the peer average. Fitch believes these factors could contribute to more valuation volatility and an outsized impact on leverage, particularly at elevated levels. The Outlook revision for Apollo reflects its relatively stable core operating performance in the past year following changes in senior management that occurred in early 2012, as well as the corresponding shift in strategy from large mezzanine loans to more traditional middle market senior positions. As part of this change, the portfolio mix has shifted as the proportion of secured debt has increased over the last year, closer to a more equal weighting between secured and subordinated debt, at 40% and 48% of the portfolio, respectively, at Dec. 31, 2012. Apollo also sought to improve its funding flexibility in 2012 by issuing $150 million of unsecured retail notes, thus increasing its proportion of unsecured funding to 33.6% of total debt. The firm also received a $50 million equity investment from a subsidiary of affiliate Apollo Global Management, LLC, which Fitch believes demonstrates a strong commitment to the vehicle from the large asset manager, which serves as the BDC's investment advisor. The Positive Outlook assigned to Ares' ratings reflects peer- superior funding flexibility, operating consistency throughout the recent downturn, a strong liquidity profile, and conservative dividend strategy. At Dec. 31, 2012, 86.3% of the company's debt was considered unsecured, borrowing capacity on the revolving facilities was $1.6 billion, and net investment income coverage of the dividend was 104.7% for the year, when adjusting for $0.10 of special dividends paid per share and the accrual of part II incentive fees not currently payable in cash. Additionally, the firm has approximately $0.96 per share of spillover income, which Fitch believes will support dividend consistency in coming quarters. The rating could potentially be upgraded over the next 18-24 months provided the company demonstrates measured portfolio growth in the face of what Fitch believes is an overheating credit environment. This will be evaluated in the context of the stability and consistency of Ares' operating performance, asset quality, valuation, and underlying portfolio metrics, including leverage and interest coverage. Specifically, up-ticks in underlying portfolio leverage, and/or deterioration in portfolio company interest coverage or overall portfolio yields, could signal the potential for asset quality issues down the road, which would likely lead to an Outlook revision. Although additional upward rating momentum is not envisioned in the near to medium term, potential upward momentum for ACAS will be driven by its ability to improve funding flexibility, as it is the only rated BDC with a fully secured funding profile and it does not have ready access to the equity markets as its share price continues to trade at a discount to net asset value. Still, Fitch recognizes that ACAS has the ability to retain capital as it is not currently required to distribute taxable income since it converted to a C corporation. Positive rating action could also result from stronger asset quality trends and a decline in the proportion of equity investments in the portfolio, which yield more valuation volatility, particularly in periods of stress. That said, ACAS' leverage is currently well below the peer average, which does provide for some cushion against valuation declines. Lastly, Fitch will monitor ACAS' on-going movement towards increased management revenues as opposed to traditional balance sheet investments. Fitch has upgraded the following ratings: American Capital, Ltd. -- Long-term IDR to 'BB-' from 'B+'; -- Secured debt to 'BB+' from 'BB/RR1'. Fitch has affirmed the following ratings: Apollo Investment Corporation -- Long-term IDR at 'BBB'; -- Secured debt at 'BBB'; -- Unsecured debt at 'BBB-'. Ares Capital Corporation -- Long-term IDR at 'BBB'; -- Secured debt at 'BBB'; -- Unsecured debt at 'BBB'. Allied Capital Corporation -- Unsecured debt at 'BBB'. BlackRock Kelso Capital Corporation -- Long-term IDR at 'BBB-'; -- Secured debt at 'BBB-'; -- Unsecured debt at 'BBB-'. Fifth Street Finance Corp. -- Long-term IDR at 'BBB-'; -- Secured debt at 'BBB-'; -- Unsecured debt at 'BBB-'. PennantPark Investment Corporation -- Long-term IDR at 'BBB-'; -- Secured debt at 'BBB-'; -- Unsecured debt at 'BBB-'. Solar Capital, Ltd. -- Long-term IDR at 'BBB-'; -- Secured debt at 'BBB-'; -- Unsecured debt at 'BBB-'. The Rating Outlook for Ares is Positive. The Rating Outlooks for ACAS, Apollo, BKCC, FSC, PNNT, and Solar are Stable. AMERICAN PETRO-HUNTER: Hanover to Sell 16.1-Mil. Common Shares -------------------------------------------------------------- American Petro-Hunter filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale of up to an aggregate of 16,182,230 shares of the Company's common stock, par value $0.001 per share, by Hanover Holdings I, LLC, 14,417,524 of which are issuable to Hanover pursuant to the terms of the Common Stock Purchase Agreement, between the Company and Hanover, dated March 22, 2013, and 1,764,706 of which were issued to Hanover on March 22, 2013, in satisfaction of a $150,000 commitment fee paid to Hanover for entering into the Purchase Agreement, based upon a price per share equal to $0.085 per share. The Company is not selling any securities under this prospectus and will not receive any of the proceeds from the resale of shares of the Company's common stock by the selling stockholder under this prospectus, however, the Company may receive gross proceeds of up to $5,000,000 from sales of the Company's common stock to Hanover under the Purchase Agreement. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "AAPH". The shares of the Company's common stock registered are being offered for sale by Selling Stockholder at prices established on the OTC Bulletin Board during the term of this offering. On April 30, 2013, the closing bid price of the Company's common stock was $0.018 per share. These prices will fluctuate based on the demand for the Company's common stock. A copy of the Form S-1 is available for free at: http://is.gd/uyqLI0 About American Petro-Hunter Wichita, Kansas-based American Petro-Hunter, Inc., is an oil and natural gas exploration and production (E&P) company with current projects in Payne and Lincoln Counties in Oklahoma. American Petro-Hunter disclosed a net loss of $3.30 million on $308,770 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $2.73 million on $317,931 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.65 million in total assets, $1.64 million in total liabilities and $12,242 in total stockholders' equity. Weaver Martin & Samyn, LLC, in Kansas City, Missouri, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and is dependent upon the continued sale of its securities or obtaining debt financing for funds to meet its cash requirements. These factors raise substantial doubt about the Company's ability to continue as a going concern. APPLIANCE RECYCLING: Reports $0.2-Mil. Q1 Profit ------------------------------------------------ Appliance Recycling Centers of America, Inc. on May 6 reported operating results for the first quarter ended March 30, 2013. Total revenues increased 3.3% to $30.4 million versus $29.4 million for the first quarter of 2012. Overall, the Company reported consolidated net income of $0.2 million, or $0.03 per diluted share, compared with near-breakeven results in the first quarter of 2012. "These results -- including our return to profitability -- demonstrate solid progress executing the strategic initiatives we outlined earlier this year," said Edward R. (Jack) Cameron, president and chief executive officer of ARCA, Inc. "In particular, strong replacement program activity helped our recycling revenues increase 21 percent sequentially and 58 percent over the same period last year." Mr. Cameron added that the Company was pleased to modify its credit agreement with PNC Bank, National Association (PNC) during the quarter. The agreement signed on March 14, 2013, extended the Company's existing credit agreement with PNC two additional years until January 24, 2016. It also waived the previously reported default caused by being out of compliance with two financial covenants and reset the financial covenants. The modified terms did not change the maximum borrowing amount of $15 million under the revolving line of credit and require the Company to meet monthly minimum EBITDA targets through 2013. ApplianceSmart(R) same store sales for the first quarter of 2013 declined 7% compared with the same period of 2012. Factors included delayed 2012 tax refunds, negative impact of the Easter holiday shifting to the first quarter this year and a tight housing market that dampened relocation activity and related appliance purchasing. The National Association of Realtors reported a 17% decline in housing inventories in March 2013 from prior-year levels. The National Retail Federation blamed a sequential March decrease in electronics and appliance store sales on colder-than-normal weather and the payroll tax hike. In the first quarter, ApplianceSmart total retail revenues decreased 9% to $18.1 million compared with the same period of 2012, resulting primarily from the same store sales decrease and closure of two stores late in 2012. During the first quarter of 2013, ApplianceSmart stores generated an operating income before corporate overhead of $0.4 million, a $0.2 million decline compared with the same period in 2012. "Our retail operations showed quarterly sequential improvements, including per-store sales and gross margins," explained Brad Bremer, president of ApplianceSmart. "We're starting to see more out-of-carton product available, aided by favorable home- construction trends." The housing shortage and improving economy is spurring construction; new housing starts rose in March 2013 at the fastest seasonally adjusted annual rate in nearly five years. Recycling revenues, which are comprised of appliance recycling fees and appliance replacement program revenues, increased 58% to $8.3 million in the first quarter of 2013, from $5.3 million in the same period of 2012. The number of replacement programs remained unchanged, but related revenues increased $3.8 million while appliance recycling fees declined $0.8 million. The Company reported a 119% increase in replacement units and a 4% decline in overall recycling volumes. The increase in replacement program revenues was partially offset by lower appliance recycling revenues, resulting in a $0.7 million improvement in operating profit compared with the same period in 2012. Research by the Association of Home Appliance Manufacturers (AHAM) claims the next opportunities for increases in appliance efficiency will come from smart appliances and early retirement of existing appliances, such as the 42% of working refrigerators estimated to remain on the electrical grid after disposal through secondary use, sale or donation. A 2012 ENERGY STAR(R) summary of energy-efficiency programs includes more than 650 incentive and promotion programs submitted by over 200 program sponsors across the United States. New ENERGY STAR requirements take effect in 2014. The Company's byproduct revenues, excluding AAP, declined to $1.5 million compared with $1.7 million in the first quarter of 2012. The decrease was a direct result of the 4% reduction in overall recycling volumes cited earlier coupled with a 14% decrease in steel scrap prices compared with the first quarter of 2012. Scrap prices are expected to remain volatile for the balance of the year and into 2014. Revenues from the ARCA Advanced Processing (AAP) joint venture, reported in byproduct revenues, declined 5% to $2.6 million compared with $2.7 million in the first quarter of 2012. AAP's gross margin declined to 12.2% compared with 19.2% in the same period of 2012. AAP's operating loss for the first quarter was $53,000 compared with operating income of $65,000 during the same period of 2012. The decline in gross margin and operating income was primarily the result of lower prices for steel scrap and higher depreciation expense. Positive momentum continues in California's cap and trade program for carbon emissions. In mid-April, California's Air Resources Board approved linking with a similar program in Quebec, starting in 2014. The Company considers this an important step toward a more efficient, liquid and stable carbon emissions market, including possible future linkages to other domestic or global markets. As previously announced, both ARCA and AAP expect to create carbon offsets through the destruction of CFCs throughout 2013 and derive revenues through California's market in the second half of 2013. Overall gross profit as a percentage of total revenues decreased to 26% for the first quarter of 2013 compared with 27% during the same period of 2012. The decline in overall gross profit percentage resulted primarily from lower byproduct revenues and the decline in AAP's gross margin. These factors were partially offset by an 80 basis point improvement in ApplianceSmart's gross margin. "We're encouraged by a positive start to the year," Mr. Cameron noted. "Our banking agreement is solidified and we've moved ahead with a number of corporate actions that are bearing fruit." He concluded, "We're carefully managing all our operations and we're optimistic about our prospects as the economy gradually improves throughout 2013." Liquidity and Capital Resources Cash and cash equivalents as of March 30, 2013, were $3.9 million compared with $3.2 million as of December 29, 2012. As of March 30, 2013, the Company had $3.8 million of available borrowings under its revolving line of credit compared with $2.5 million as of December 29, 2012. Net working capital of $7.1 million decreased $0.5 million as of March 30, 2013, compared with $7.6 million as of December 29, 2012. The decline can be attributed to an increase in accrued liabilities and the net impact of lower appliance inventory and a reduced line of credit balance. Headquartered in Minneapolis, Minnesota, Appliance Recycling Centers of America is a provider of appliance retailing and recycling services. ATP OIL: NGP Gets $32.1MM Payments Under Disgorgement Deal ---------------------------------------------------------- NGP Capital Resources Company on May 7 disclosed that it has continued to receive its share of monthly production payments from ATP Oil & Gas Corporation, pursuant to its limited-term overriding royalty interests in ATP's Gomez and Telemark offshore oil and gas properties, pursuant to the Bankruptcy Court's order and subject to a Disgorgement Agreement executed in August 2012, shortly after ATP filed for Chapter 11 bankruptcy protection. As of March 31, 2013, the Company's unrecovered investment in the ORRIs was $32.1 million, and it had received aggregate production payments of $15.1 million subject to the Disgorgement Agreement, $6.2 million of which was received during the first quarter of 2013. On April 23, 2013, the Department of the Interior, on behalf of the Bureau of Safety and Environmental Enforcement, issued an order directing that the wells on the Gomez properties be shut in and that operations cease. Operations and production ceased on the Gomez properties on April 30, 2013. As a result of the shut- in of the Gomez wells, the Company's cash flows attributable to the ORRIs will be negatively affected, but it will continue to receive its share of monthly production payments attributable to the Telemark properties (and the Company's portion of the production payments attributable to the Gomez properties prior to April 30, 2013), subject to the Disgorgement Agreement referred to above. Of the $6.2 million of ORRI distribution the Company received in the first quarter of 2013, $2.8 million was attributable to Gomez production and $3.4 million was attributable to Telemark production. The disclosure was made in NGP Capital's earnings release for the first quarter of 2013, a copy of which is available for free at http://is.gd/kipqU5 About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. AUGUSTA CENTER: Citizens' Objection to Cash Collateral Use Denied ----------------------------------------------------------------- Bankruptcy Judge Susan D. Barrett overruled Citizens Trust Bank's objection to Augusta Center LLC's motion to use cash collateral. Augusta Center owns and operates a hotel at 103 Sherwood Drive, in Augusta, Georgia. It filed for bankruptcy on January 4, 2013, when it failed to pay amounts due to Citizens Trust Bank. The Debtor previously made loans from the Bank and in exchange, Augusta conveyed all its interest in leases, rent and revenues from the Hotel to the Bank pursuant to a security deed. Nevertheless, the Security Deed provides that the Bank grants the Debtor a revocable license to collect and receive rent and revenues. Citizens argued that it took all necessary steps to revoke the Debtor's license prepetition by sending a Revocation and Notice and attempting to enter the Hotel to take possession of the rents. As a result of taking these steps prepetition, Citizens argued the rents are not property of the bankruptcy estate and cannot be used by Debtor as cash collateral. Furthermore, Citizens argued that the Debtor waived its right of redemption under the terms of the Security Deed. Judge Barrett opined that the revocation of license may have given Citizens a choate interest in the rents at the time of the bankruptcy petition was filed, but it did not deprive the Debtor of its equitable interest in the Hotel and the rent derived from it. In this case, the Debtor would be unable to reorganized if deprived of the rent, the judge said. "For these reasons, the rents continue to be property of the bankruptcy estate." The Court scheduled a hearing on the matter for April 25, 2013. The case is In re AUGUSTA CENTER, LLC, Chapter 11, Debtor, Case No. 13-10026 (Bankr. S.D.Ga.). A copy of the Bankruptcy Court's April 17, 2013 Opinion and Order is available at http://is.gd/AkAk9xfrom Leagle.com. B+H OCEAN: Plan of Reorganization Declared Effective ---------------------------------------------------- BankruptcyData reported that B+H Ocean Carriers' Second Amended Joint Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. According to documents filed with the Court, "The Plan constitutes a joint plan of reorganization for the eleven Debtors. Although the Chapter 11 Cases are jointly administered pursuant to an order of the Bankruptcy Court, the Plan does not provide for the substantive consolidation of the Debtors' Estates, i.e., the integrity of the separate Debtor estates is being observed in all respects. The Plan's overall objective is to liquidate and Distribute all Assets of the Debtors to holders of Allowed Claims and Allowed Unclassified Claims in satisfaction of the Debtors' obligations, in accordance with the priorities established by the Bankruptcy Code, but taking into account the compromises and settlements by and among the Debtors, the Committee and Scotiabank, and the Debtors and Macquarie, and the Debtors' agreements to provide value to fund the payment of administrative, priority and general unsecured claims on the terms and conditions set forth in the Macquarie Plan Term Sheet, the Scotiabank Plan Term Sheet and the Plan with the following key features," BData said, citing court documents. The Court confirmed the Plan on February 1, 2013. About B+H Ocean Carriers B+H Ocean Carriers Ltd. is an international ship-owning and operating company that owns, through subsidiaries, a fleet of four product-suitable Panamax combination carriers capable of transporting both wet and dry bulk cargoes, along with a 50% interest in an additional combination carrier. B+H Ocean Carriers and its subsidiaries filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 12-12356) on May 30, 2012. The Debtors disclosed assets of US$4.52 million and liabilities of $46.09 million as of the Chapter 11 filing. John H. Hall, Jr., Esq., at Pryor & Mandelup, L.L.P., in New York, originally represented the Debtors as bankruptcy counsel. They were later replaced by Nicholas F. Kajon, Esq., John D. Demmy, Esq., and Constantine D. Pourakis, Esq., at Stevens & Lee, P.C. Counsel for the Creditors' Committee is Benjamin Blaustein, Esq., at Kelley Drye & Warren, LLP. Counsel for Macquarie Bank and Macquarie US is David Neier, Esq., at Winston & Strawn, LLP. The Bank of Nova Scotia Asia Limited is represented by Neil Quartaro, Esq., at Watson, Farley & Williams (New York), LLP. BEN ENNIS: To Present Plan for Confirmation on May 30 ----------------------------------------------------- Early last month, the U.S. Bankruptcy Court for the Eastern District of California entered an amended order approving the disclosure statement filed Dec. 14, 2012, as modified at the hearing on March 27, 2013, by Wells Fargo Bank, N.A., in support of its Plan of Liquidation for Debtor Ben Ennis. May 8, 2013, is fixed as the last day for submitting written acceptances or rejections of the plan, as well as the last day for filing with the Court and serving pursuant to Federal Rule of Bankruptcy Procedure 3020(b)(1) written objections to (1) confirmation of the plan and (2) the proposed Plan Administrator. May 15, 2013, is fixed as the last day for filing with the Court and serving, among others: (a) written responses to objections to confirmation of the plan; and b) a written tabulation of ballots and copies of all ballots. The hearing on confirmation of the plan will be held on May 30, 2013, commencing at 1:30 p.m. In the event that the Court determines that an evidentiary hearing is required, the hearing will be scheduled as soon as practicable thereafter. On April 12, 2013, Wells Fargo filed with the Bankruptcy Court a disclosure statement for the Plan of Liquidation of Ben Ennis dated Dec. 14, 2012. Under the Plan, a Plan Administrator will be appointed to collect all of Ennis's non-exempt assets acquired or earned before the Plan Effective Date and liquidate all of Estate's assets that can be productively liquidated. The Plan Administrator will take over management of the Estate on the date the Plan becomes effective. The maximum term of the Plan is six years, although Wells Fargo believe the Estate's assets will be liquidated and the case closed much sooner. To the extent the Plan Administrator reasonably determines one or a few of the real properties cannot be sold profitably, the Plan Administrator has the right to abandon the property to the secured lender of Ennis. Unsecured creditors will be paid pro rata from assets of the Estate remaining after payment of administrative, priority and secured claims and creation of reserves. Wells Fargo's secured claim (Class 2.3) with a current principal balance in the approximate amount of $2,840,198 is secured by a lien covering multiple parcels of real property, one of which is owned by ECP and the rest of which are owned by the Estate or Estate controlled company6ies. At this time, this Claim is not in default. The Plan does not modify or affect the rights of Wells Fargo. The Plan Administrator is authorized to pay all payments required under the loan underlying the Wells Fargo Claim, but will have the option of not paying any such payments. Wells Fargo believes the properties securing its Class 2.3 Claim can be profitably sold, and that the Plan Administrator will therefore pay all payments due on its Claim. Class 3 Unsecured claims, which total approximately $81 million, are subject to Plan Administrator's rights to file claim objections. Wells Fargo estimates that holders of allowed unsecured claims will receive a distribution in the range of 2.1% to 6.7% of their Allowed Claims. Holders of Allowed Class 3 Claims will be paid from Net Remaining Cash pro rata based on the final Allowed amount of their Class 3 Claims. Allowed Interests of Ennis against the Estate (Class 4) will not receive any distributions under the plan, except: (a) property abandoned to Ennis by the Plan Administrator; and (b) distributions on account of his exemptions, as more fully described on pages 22-23 of the disclosure statement. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/benennis.doc1092.pdf Plan Administrator On April 24, 2013, Wells Fargo nominated David Stapleton as Plan Administration under the Plan. Any objection to the appointment of Mr. Stapleton as Plan Administrator must be filed with the Bankruptcy Court by May 8, 2013. Mr. Stapleton is the President of the Stapleton Group. The Stapleton Group provides asset management, bankruptcy, receivership, work out and forensic accounting services. According to the Group's website, it specializes in the work out of distressed real estate assets and businesses on behalf of banks, law firms, investment groups and property owners. Mr. Stapleton and Stapleton Group's employees agreed billing rates are: Principal / Receiver $295 Managing Director $285 Director $265 Senior Accountant $200 Associate Director $175 Staff Accountant $150 Clerical $85 About Ben Ennis Porterville, California-based Ben Ennis, dba Ennis Homes, LLC, filed its Chapter 11 Petition on Oct. 25, 2010, with Bankruptcy Case No. 10-62315, before the U.S. Bankruptcy Court Eastern District of California (Fresno). Judge Frederick E. Clement oversees the case. Elizabeth E. Waldow, Esq., Riley C. Walter, Esq., and Michael L. Wilhelm, Esq., represent the Debtor as counsel. Justin D. Harris, Esq., represents Chapter 11 Trustee Terence J. Long as counsel. BERNARD L. MADOFF: Trustee, Schneiderman Agree to Stay on Appeal ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that New York Attorney General Eric Schneiderman agreed to hold up completing all but $15 million of a $410 million settlement with feeder fund manager J. Ezra Merkin while the trustee liquidating Bernard L. Madoff Investment Securities LLC takes an expedited appeal to the U.S. Court of Appeals. The report recounts that in mid-April U.S. District Judge Jed Rakoff threw out a lawsuit by Madoff trustee Irving Picard designed to halt settlement of the lawsuit the attorney general began against Mr. Merkin in state court in April 2009. Judge Rakoff found that Mr. Picard waited too long and had no right to halt the settlement because no property of the bankrupt estate was involved to invoke the so-called automatic stay. Last week Mr. Picard, the report discloses, filed an appeal to the Circuit Court of Appeals in Manhattan. Mr. Schneiderman agreed not to distribute the settlement funds to Mr. Merkin's investors except for $15 million. Parts of the settlement that can and can't be completed are unclear because the Merkin-Schneiderman settlement agreement has been kept secret. Mr. Picard's spokeswoman Amanda Remus said in an e-mailed statement that "only when the Attorney General publicly shares the terms of his settlement with the Merkin defendants can an accurate, full and fair discussion take place regarding benefits for customers." Mr. Picard and Mr. Schneiderman agreed to an expedited appeal where the trustee will file his papers in the appeals court by June 6, followed by the attorney general's on July 19, and the trustee's reply brief by Aug. 7. So long as oral argument has taken place in the appeals court by Dec. 31, the stay pending appeal will remain in place until seven days after the circuit court hands down a decision. Mr. Picard wants to stop the settlement from concern that if Mr. Merkin pays $410 million he won't have remaining assets to pay judgments in the trustee's own suit against the feeder-fund manager. Mr. Picard also argued, unsuccessfully, that the $410 million should go to him because it represents money stolen from Madoff customers. The dispute with Schneiderman in district Court is Picard v. Schneiderman, 12-cv-06733, U.S. District Court, Southern District of New York (Manhattan). The lawsuit with Schneiderman in bankruptcy court is Picard v. Schneiderman, 12-bk-01778, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). Mr. Picard has made three distributions, paying more than half of smaller claims in full and satisfying just over 50 percent of larger customer claims totaling more than $17 billion. BG PETROLEUM: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: BG Petroleum, LLC 121 Blackfoot Drive Arnold, MD 21012 Bankruptcy Case No.: 13-70334 Involuntary Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Johnstown) Petitioners' Counsel: James R. Walsh, Esq. SPENCE CUSTER SAYLOR WOLFE & ROSE 400 U.S. Bank Building P.O. Box 280 Johnstown, PA 15907 Tel: (814) 536-0735 Fax: (814) 539-1423 E-mail: jwalsh@spencecuster.com Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Nyle and Joan Mellott Debt upon Fuel $263,680 99 West Riverview Avenue Taxes Englewood, FL 34223 Thomas and Ladonna Waters Debt upon Fuel $263,680 742 Ritchie Road Taxes Everett, PA 15537 Clinton D. Simmons Debt upon Fuel $87,893 201 Cliffside Acres Road Taxes Everett, PA 15537 Simmons K. Robert Debt upon Fuel $87,893 1951 West Graceville Road Taxes Everett, PA 15537 Loretta M. Simmons Debt upon Fuel $87,893 2028 West Graceville Road Taxes Everett, PA 15537 BIRDSALL SERVICES: Trustee Convinces Judge to Consider Sale ----------------------------------------------------------- Ama Sarfo of BankruptcyLaw360 reported that a New Jersey bankruptcy judge ordered a hearing Monday to determine whether bankrupt engineering firm Birdsall Services Group Inc. should be sold, after its bankruptcy trustee on Friday said Birdsall's recent $3.6 million pay-to-play settlement and other events have been catastrophic for the company. According to the report, U.S. Bankruptcy Judge Michael B. Kaplan scheduled the hearing for May 15, in response to Trustee Edwin H. Stier's Friday motion asking that the court approve bidding procedures. About Birdsall Services Birdsall Services Group Inc., an engineering firm from Eatontown, New Jersey, filed for Chapter 11 protection (Bankr. D.N.J. Case No. 13-16743) on March 29, 2013, when the state attorney general indicted the business and obtained a court order seizing the assets. Birdsall was accused by the state of violating laws prohibiting so-called pay-to-play, where businesses make political contributions in return for government contracts. The state charged that the company arranged for individuals to make contributions and then reimbursed the employees. A company officer pleaded guilty last year to making political contributions disguised to appear as though made by individuals. The Chapter 11 petition filed in Trenton, New Jersey, disclosed assets of $41.6 million and liabilities totaling $27 million. Debt includes $3.6 million owing to a bank on a secured claim and $2.4 million in payables to trade suppliers. In April Birdsall reached a $3.6 million settlement that ended New Jersey's opposition to the company's bankruptcy and resolves the state's lawsuit aiming to seize Birdsall's assets. As part of the settlement, Edwin Stier, a member of Stier Anderson, was appointed as Chapter 11 trustee for Birdsall. BLACK PRESS: Revenue Decline Prompts Moody's to Cut CFR to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded Black Press Ltd.'s corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD, and affirmed the respective Ba3 and Caa1 ratings on the company's secured term loans and unsecured subordinated notes. Moody's also placed Black Press' ratings on review for downgrade. "The downgrade of Black Press' CFR to B3 reflects the prospect for continued organic revenue declines given negative industry trends as print advertising shifts to digital platforms," said Peter Adu, Moody's analyst. "The revenue decline will constrain financial flexibility and reduce the company's ability to repay debt from internally generated cash flow," Adu added. The review for downgrade is a function of near term refinancing risks facing the company as its CAD136 million of term loans mature in August 2013, and the higher interest rates that may apply to any refinancing will further constrain free cash flow generation. Ratings and Outlook Actions: Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Outlook: Changed to On Review for Downgrade from Negative CAD136 million Senior Secured Term Loans A & B due August 2013, Affirmed at Ba3 (LGD2, 23%) CAD110 million Unsecured Subordinated Notes due February 2014, Affirmed at Caa1 (LGD5, 77%) Ratings Rationale: Moody's review will focus on the sustainability of Black Press' capital structure and its ability to refinance both its term loans and unsecured subordinated notes within the next several weeks. Given the lack of visibility of future cash flows, it is not clear what, if any, implied equity cushion supports the company's debt. Should a refinancing not be completed by early June, it will be presumed that the company's capital structure is not viable and the rating will be downgraded, potentially by more than one notch. Should a refinance be completed, the amount, cost and structure of the debt, together with operational fundamentals, will be inputs to a comprehensive review of the company's ability to service its debt on a timely basis. The review is expected to be completed no later than mid-June. Black Press' B3 CFR reflects high business risk resulting from secular industry pressures and vulnerability to cyclical advertising spending, and the company's acquisitive growth orientation, which could cause its leverage to increase (adjusted Debt/EBITDA was 4.8x at fiscal yearend 2013). While the American newspaper operations have shown some improvement, the Canadian newspapers and commercial printing operations, which make up more than 70% and 80% of total revenue and EBITDA respectively, have recorded weaker results than anticipated driven by negative secular trends in the newspaper publishing industry and soft economic conditions. These trends are expected to continue as print advertising shifts to digital platforms. The rating benefits from the company's good market position in western Canada, positive free cash flow generation and continued focus on debt reduction. The rating also reflects the company's discipline around cost reduction which has helped to maintain adjusted EBITDA margins around 20%. Also, assets outside the restricted group that generate about $20 million of annual EBITDA could potentially be contributed to the company's lender group, leading to a modest reduction in leverage and adding a measure of diversity to Black Press' asset base. The principal methodology used in rating Black Press was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Black Press Ltd. is a privately-held community newspaper and printing company headquartered in British Columbia, Canada. The company publishes more than 150 daily and weekly newspapers in British Columbia, Alberta, Washington and Ohio. Black Press Ltd. is 80% owned by the David Black family and 20% by Torstar Corporation. BOOMERANG SYSTEMS: Cancels Joint Venture with Stokes Industries --------------------------------------------------------------- Boomerang MP Holdings Inc., a subsidiary of Boomerang Systems, Inc., terminated its joint venture agreement with Stokes Industries USA, LLC, on April 21, 2013. About Boomerang Systems Headquartered in Morristown, New Jersey, Boomerang Systems, Inc. (Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang Utah, is engaged in the design, development, and marketing of automated racking and retrieval systems for automobile parking and automated racking and retrieval of containerized self-storage units. Boomerang incurred a net loss of $17.42 million for the fiscal year ended Sept. 30, 2012, compared with a net loss of $19.10 million during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $7.32 million in total assets, $22.96 million in total liabilities and a $15.63 million total stockholders' deficit. Bankruptcy Warning "Our operations may not generate sufficient cash to enable us to service our debt. If we were to fail to make any required payment under the notes and agreements governing our indebtedness or fail to comply with the covenants contained in the notes and agreements, we would be in default. Our debt holders would have the ability to require that we immediately pay all outstanding indebtedness. If the debt holders were to require immediate payment, we might not have sufficient assets to satisfy our obligations under the notes or our other indebtedness. In such event, we could be forced to seek protection under bankruptcy laws, which could have a material adverse effect on our existing contracts and our ability to procure new contracts as well as our ability to recruit and/or retain employees. Accordingly, a default could have a significant adverse effect on the market value and marketability of our common stock," the Company said in its annual report for the year ended Sept. 30, 2012. BRIGHTSTAR CORP: S&P Revises Outlook to Stable & Affirms 'BB-' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Miami-based Brightstar Corp. to stable from negative. At the same time, S&P affirmed its 'BB-' corporate credit rating on the company. S&P also affirmed its 'BB-' issue-level rating with a recovery rating of '4', indicating its expectation for average (30%-50%) recovery for lenders in the event of a payment default. The outlook revision reflects the company's significant progress in resolving its internal control issues, as well as the recent improvement in its operations and financial profile. Standard & Poor's Ratings Services' rating expectations incorporate its assumption for high-single-digit to low-double- digit revenue growth in 2013 resulting from increasing global wireless penetration and new OEM (original equipment manufacturers) product launches. S&P expects the company's pursuit of higher-margin service-related businesses, such as handset protection & insurance or buy-back & trade-in solutions, will result in modest margin improvement in the next 12 months. The ratings and outlook on Brightstar reflect S&P's assessment of the company's "weak" business risk profile and "aggressive" financial risk profile. Brightstar's business risk profile reflects its narrow focus on wireless device services and a highly competitive industry environment. Brightstar competes with larger and more diversified companies that include electronics distributor incumbents, like Ingram Micro and Tech Data, and other providers of software and services to the wireless device industry, like IBM, Oracle, and Accenture. The company's expanding portfolio of services for the wireless industry, international market presence, and strong secular wireless device growth trends support our business evaluation. The stable outlook reflects S&P's expectation that Brightstar remedies its remaining internal control issues and generates modest EBITDA growth over the next year. S&P would lower the rating if Brightstar sustains leverage at or above 4.5x, either because of increased working capital-related borrowing to support less profitable growth, or a lack of EBITDA growth due to escalating margin pressure. S&P could raise the rating if consistent operating improvement results in FFO to adjusted debt approaching 20%, and sustained leverage below 3x. BRISTOW GROUP: S&P Lowers Senior Unsecured Notes Rating to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issue-level rating on Houston-based Bristow Group Inc.'s senior unsecured notes to 'BB-' (one notch below the corporate credit rating) from 'BB'. At the same time, S&P revised its recovery rating on these notes to '5', indicating its expectation of modest (10% to 30%) recovery in the event of a payment default, from '4'. The 'BBB-'senior secured debt rating remains unchanged. The recovery rating on this debt remains '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. S&P's 'BB' corporate credit rating and stable outlook are unchanged. "The downgrade on the senior unsecured notes and revision of the recovery rating reflects the lower recovery valuation following the recently announced amended and restated credit facility, which results in a $150 million increase in Bristow's credit facility to $350 million from $200 million," said Standard & Poor's credit analyst Marc Bromberg. RATING LIST Bristow Group Inc. Corporate credit rating BB/Stable/-- Downgraded/Recovery Rating Revised To From Sr unsecd nts 'BB-' 'BB' Recovery rating '5' '4' BUILDERS FIRSTSOURCE: Files Form 10-Q, Had $11.8MM Net Loss in Q1 ----------------------------------------------------------------- Builders Firstsource, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $11.80 million on $319.70 million of sales for the three months ended March 31, 2013, as compared with a net loss of $19.18 million on $219.38 million of sales for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $563.49 million in total assets, $526.43 million in total liabilities and $37.06 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/y1iy7C About Builders FirstSource Headquartered in Dallas, Texas, Builders FirstSource Inc. -- http://www.bldr.com/-- supplies and manufactures building products for residential new construction. The Company operates in 9 states, principally in the southern and eastern United States, and has 55 distribution centers and 51 manufacturing facilities, many of which are located on the same premises as its distribution facilities. Builders FirstSource reported a net loss of $56.85 million in 2012, a net loss of $64.99 million in 2011 and a $95.50 million in 2010. * * * In December 2012, Standard & Poor's Ratings Services revised its outlook on Dallas-based Builders FirstSource Inc. to negative from positive. "At the same time, we affirmed our 'CCC' corporate credit rating and affirmed our 'CC' issue rating on Builder FirstSource's $140 million second lien notes due 2016. The recovery rating is '6', which indicates our expectation for negligible (0% to 10%) recovery in the event of a default," S&P said. CARPE MINUTE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Carpe Minute, LLC 1609 Clearview Drive Brentwood, TN 37027 Bankruptcy Case No.: 13-03941 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Randal S. Mashburn Debtor's Counsel: Robert L. Scruggs, Esq. ROBERT L. SCRUGGS, ATTORNEY 2525 21st Avenue South Nashville, TN 37212 Tel: (615) 309-7090 Fax: (615) 309-7046 E-mail: bankruptcy@scruggslaw.com Scheduled Assets: $1,300,000 Scheduled Liabilities: $390,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Todd Jackson, manager. CASPIAN SERVICES: Five Directors Elected at Annual Meeting ---------------------------------------------------------- Caspian Services, Inc., held a special meeting in lieu of its 2013 annual meeting of shareholders on April 30, 2013. At that meeting, the shareholders: (1) elected Mirgali Kunayev, Alexey Kotov, Kerry Doyle, Valery Tolkachev, and Jeffrey Brimhall as directors to serve for one year, or until Company's 2014 Annual Meeting, and until their successors are duly elected and qualified, or until their death, resignation or retirement; (2) approved the adoption of an amendment to the Company's Articles of Incorporation to increase the authorized common stock of the Company, $0.001 par value, from 150,000,000 shares to 500,000,000 shares; (3) ratified the adoption by the board of directors of the Company's Bylaws; (4) ratified the adoption by the board of directors of the Caspian Services, Inc., 2008 Equity Compensation Plan; (5) approved, on an advisory basis, the compensation of the Company's named executive officers; (6) approved, on an advisory basis, to vote on the compensation of the Company's named executive officers every three years; and (7) ratified the appointment of Hansen, Barnett & Maxwell, P.C., as the Company's independent registered public accounting firm for the fiscal year ending Sept. 30, 2013. About Caspian Services Headquartered in Salt Lake City, Caspian Services, Inc., was incorporated under the laws of the state of Nevada on July 14, 1998. Since February 2002 the Company has concentrated its business efforts to provide diversified oilfield services to the oil and gas industry in western Kazakhstan and the Caspian Sea, including providing a fleet of vessels, onshore, transition zone and marine seismic data acquisition and processing services and a marine supply and support base in the port of Bautino, in Bautino Bay, Kazakhstan. At Dec. 31, 2012, the Company's balance sheet showed $86.1 million in total assets, $86.9 million in total liabilities, and a stockholders' deficit of $768,000. Going Concern Uncertainty Under the terms of the EBRD Loan Agreement, as amended, Balykshi LLP, the Company's majority owned subsidiary, is required to repay the loan principal and accrued interest in eight equal semi-annual installments commencing Nov. 20, 2011, and then occurring each May 20 and November 20 thereafter until fully repaid. The first three semi-annual repayment installments, due Nov. 20, 2011, May 20, 2012, and Nov. 20, 2012, were not made. Additionally, an event of default may trigger the acceleration clause in the Put Option Agreement with EBRD which would allow EBRD to put its $10,000,000 investment in Balykshi back to the Company. If EBRD were to accelerate its put right, the Company could be obligated to repay the initial investment plus a 20% annual rate of return. The balance of accelerated put option liability was $18,326,000 and $17,822,000 as of Dec. 31, 2012, and Sept. 30, 2012. EBRD also previously notified the Company that it believes the Company and Balykshi are in violation of certain other covenants of the EBRD financing agreements. As of Feb. 19, 2013, to the Company's knowledge, EBRD has not sought to accelerate repayment of the loan or the put option. Should EBRD determine to exercise its acceleration rights or should the Loan Restructuring Agreement with an otherwise unrelated individual (the "Investor") not close, the Company currently has insufficient funds to repay its obligations to Investor or EBRD individually or collectively and would be forced to seek other sources of funds to satisfy these obligations. Given the Company's current and near-term anticipated operating results, the difficult credit and equity markets and the Company's current financial condition, the Company believes it would be very difficult to obtain new funding to satisfy these obligations. If the Company is unable to obtain funding to meet these obligations, Investor and or EBRD could seek any legal remedies available to them to obtain repayment, including forcing the Company into bankruptcy, or in the case of the EBRD loan, which is collateralized by the assets, including the marine base, and bank accounts of Balykshi and Caspian Real Estate, Ltd, foreclosure by EBRD on such assets and bank accounts. "The ability of the Company to continue as a going concern is dependent upon, among other things, its ability to successfully negotiate and conclude restructured financing agreements with EBRD and the Investor and its ability to generate sufficient revenue from operations, or to identify a financing source that will provide the Company the ability to satisfy its repayment and guarantee obligations under the restructured financing agreements. Uncertainty as to the outcome of these factors raises substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended Dec. 31, 2012. CHAMPION INDUSTRIES: Defaults Under Fifth Third Credit Pacts ------------------------------------------------------------ Champion Industries, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission on May 3, 2013, that lenders under its credit agreements may declare immediately due and payable $34 million as a result of certain defaults. The Company's term loan facilities and $10,000,000 revolving credit facility with a syndicate of banks contain restrictive financial covenants requiring the Company to maintain certain financial ratios and to complete certain transactions. Fifth Third Bank, the administrative agent under the Restated Credit Agreement, sent the Company a Notice of Default on April 25, 2013, advising that Events of Default have occurred and continue to exist for the Company under Section 7.1(b) of the Credit Agreement by reason of: (a) Borrower's noncompliance with the minimum EBITDA covenant, set forth in Section 6.20(d) of the Credit Agreement, for the Test Period ended March 31, 2013, (October 2012 - March 2013) (a required minimum EBITDA covenant amount of $4,100,000 opposite a reported result of $3,316,177); and (b) the Company's failure to perform the covenant set forth in Section 6.31(d) of the Credit Agreement (failure to complete, no later than March 31, 2013, the Designated Transaction). Neither the Existing Defaults nor any other rights, remedies, claims and causes or action are being waived by the Lender Parties, and the Lender Parties have not determined what actions they will take with respect to the Existing Defaults. In connection with the Restated Credit Agreement, the Company and all of its subsidiaries entered into a security agreement and deeds of trust and mortgages in favor of the Administrative Agent for the various lenders from time to time parties to the Restated Credit Agreement, pursuant to which the Company and its subsidiaries encumbered substantially all their assets for the benefit of the secured parties, as collateral security for the payment and performance of their obligations under the Restated Credit Agreement. The encumbered assets include substantially all tangible and intangible assets of the Company and its subsidiaries including, without limitation, substantially all accounts receivable, inventory, equipment, real estate and stock of the subsidiaries. Regardless of the Company's inability to remain in compliance with certain financial covenants, the Company has made every scheduled payment of principal and interest. The principal payments made by the Company from the loan inception in September 2007 through April 30, 2013, aggregated approximately $52.1 million or 60.9 percent of the initial balance outstanding at September 2007 of approximately $85.5 million, during a significant economic and secular downturn within the economy. The Company has continued to work with the investment banking group of Raymond James & Associates, Inc., to assist it with a restructuring or refinancing of the existing debt and other potential transaction alternatives. The Company has also retained a Chief Restructuring Officer to assist the Company in dealing with its restructuring process. The Company continues to have ongoing dialogue with the Administrative Agent and the syndicate of banks with respect to its credit facilities regarding the Events of Default or an amendment/restructuring of the existing debt. About Champion Industries Champion Industries, Inc., is engaged in the commercial printing and office products and furniture supply business in regional markets east of the Mississippi River. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, West Virginia with a total daily and Sunday circulation of approximately 23,000 and 28,000. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Champion Industries' ability to continue as a going concern following the fiscal 2012 annual results. The independent auditors noted that the Company has suffered recurring losses from operations and has been unable to obtain a longer term financing solution with its lenders. The Company reported a net loss of $22.9 million in fiscal 2012, compared with a net loss of $4.0 million in fiscal 2011. The Company's balance sheet at Jan. 31, 2013, showed $43.81 million in total assets, $48.73 million in total liabilities, and a $4.91 million total shareholders' deficit. CHINA BOTANIC: Gets NYSE MKT Delisting Notice After Noncompliance ----------------------------------------------------------------- China Botanic Pharmaceutical Inc., formerly Renhuang Pharmaceuticals, Inc., on May 7 disclosed that on May 2, 2013, it received a notice from the NYSE MKT LLC indicating that based on the Company's noncompliance with its compliance plan previously submitted by the Company on February 7 to regain compliance with Sections 134 and 1101 of the NYSE MKT Company Guide by May 1, the Exchange has made a determination to delist the common stock of the Company from the Exchange. The Delisting Notice indicated that under Sections 1203 and 1009(d) of the Company Guide, the Company has a limited right to appeal the Exchange's determination by requesting an oral hearing or a hearing based on a written submission before the Exchange's Listing Qualifications Panel. In order to request a hearing, the Company must submit its appeal request and pay the required fee by May 9, 2013. If the Company does not elect to appeal the determination by May 9, the determination will be final and the Exchange will proceed to file an application with the Securities and Exchange Commission to delist the Company's common stock from the Exchange. On January 31, 2013, the Company received a notice of failure to satisfy a continued listing standard from the Exchange as a result of the Company's failure to timely file its Form 10-K for the fiscal year ended October 31, 2013. In response to the letter dated January 31, 2013, the Company submitted a plan of compliance on February 14, outlining the actions that the Company has taken and the Company's plans to bring it back into compliance by May 1. The Plan was accepted on March 1. On March 27, the Company received another notice of failure to satisfy a continued listing standard from the Exchange as a result of the Company's failure to timely file its Form 10-Q for the period ended January 31. Due to the similar nature of the deficiencies in the notices and the inclusion of the filing timeline of the Form 10-Q in the Plan, the Company was not required to submit another plan of compliance. The Company was advised that it was subject to the procedures and requirements of Section 1009 of the Company Guide as a result of the delinquent filings. In addition, it was advised that if the Company did not bring it back into compliance with all of the Exchange's continued listing standards within the timeframe provided or did not make progress consistent with the Plan during such plan period, the Exchange staff would initiate delisting proceedings as appropriate. The Company was unable to file its Form 10-K and Form 10-Q pursuant to the Plan. Due to new developments resulting in Company's failure to meet the milestones set in the Plan, on April 12, the Company submitted an amended compliance plan and requested an extension until June 15, 2013 to regain compliance. Subsequently on April 24, the Company requested an additional extension of its compliance end date to July 15. In light of the Company's failure to make progress consistent with the Plan and review of materials provided and discussions with the Company and its representatives, the request for an extension of its compliance end date to July 15 was denied. The Exchange indicated in the Delisting Notice that it did not believe the Company has provided a reasonable demonstration of its ability to regain compliance in such timeframe. The Company intends to appeal the Exchange's determination by requesting a hearing by written submission before the Panel, which request will stay the delisting determination until at least such time as the Panel renders a determination following the hearing. The Company anticipates that the hearing will take place in approximately six to eight weeks time. The Company is undertaking steps to address the deficiencies raised by the Exchange. However, there can be no assurance that the Company will be successful in its appeal and that the Company's request for continued listing will be granted. China Botanic Pharmaceutical Inc. -- http://www.renhuang.com-- a is engaged in the research, development, manufacturing, and distribution of botanical products, bio-pharmaceutical products, and traditional Chinese medicines ("TCM"), in the People's Republic of China. All of the Company's products are produced at its three GMP-certified production facilities in Ah City, Dongfanghong and Qingyang. The Company distributes its botanical anti-depression and nerve-regulation products, biopharmaceutical products, and botanical antibiotic and OTC TCMs through its network of over 3,000 distributors and over 70 sales centers across 24 provinces in China. CIRCLE ENTERTAINMENT: To Restate 2012 Annual Report --------------------------------------------------- The Audit Committee of the Board of Directors of Circle Entertainment Inc., based on consultation with management, concluded that the Company's audited consolidated financial statements for the fiscal year ended Dec. 31, 2012, included in the Company's annual report on Form 10-K for the fiscal year ended Dec. 31, 2012, as previously filed with the Securities and Exchange Commission, should no longer be relied upon as a correct statement of the Company's financial condition as of Dec. 31, 2012. The Company said it incorrectly classified and recorded the funds it received under the funding agreement from the Orlando transaction prior to Dec. 31, 2012, as debt on the 2012 Audited Consolidated Financial Statements. The funds received by the Company under the funding agreement prior to Dec. 31, 2012, should be classified and recorded on the 2012 Audited Consolidated Financial Statements as contributions of equity. The Company will restate the 2012 Audited Consolidated Financial Statements. The Company will file an amended Annual Report to include that restated 2012 Audited Consolidated Financial Statements with the SEC as soon as practicable. The estimated effect of the restatement is to reclassify the debt of $$3,981,616 as a like amount of contributions of equity. In addition to the financial statement impacts of the restatement, management acknowledges the implications of the restatement on the effectiveness of the Company's internal control over financial reporting as of Dec. 31, 2012. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Based on the definition of "material weakness" in the Public Company Accounting Oversight Board's Auditing Standard No. 5, "An Audit of Internal Control Over Financial Reporting That Is Integrated with an Audit of Financial Statements," the restatement of financial statements in prior filings with the SEC is a strong indicator of the existence of a "material weakness" in the design or operation of internal control over financial reporting. Accordingly, the Company has concluded that as of Dec. 31, 2012, a material weakness existed due to the fact that the Company did not maintain effective controls over its accounting for funds it received under the funding agreement. In addition, the Company has concluded that its disclosure controls and procedures were ineffective at Dec. 31, 2012, because of this material weakness. If not remediated, this material weakness could result in further misstatements of annual or interim consolidated financial statements. As a result of the decision to restate the 2012 Audited Consolidated Financial Statements, the Company was informed by L.L. Bradford & Company, LLC, in a letter dated May 2, 2013, that it was withdrawing its audit report on the 2012 Audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2012. That withdrawal is required by the standards of the Public Company Accounting Oversight Board (U.S.). About Circle Entertainment New York City-based Circle Entertainment Inc. has been pursuing the development and commercialization of its new location-based entertainment line of business since Sept. 10, 2010, which has and will continue to require significant capital and financing. The Company does not currently generate any revenues from this new line of business. The Company has no long-term financing in place or commitments for such financing to develop and commercialize its new location-based entertainment line of business. Circle Entertainment disclosed a net loss of $13.89 million on $0 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $5.27 million on $0 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.23 million in total assets, $20.31 million in total liabilities and a $19.08 million total stockholders' deficit. L.L. Bradford & Company, LLC, in Las Vegas, Nevada, issued a "going concern" qualification on the Company's consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has limited available cash, has a working capital deficiency and will need to rely on a funding agreement or secure new financing or additional capital in order to pay its obligations which conditions raise substantial doubt about the Company's ability to continue as a going concern. CITGO PETROLEUM: Fitch Affirms 'BB-' Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for CITGO Petroleum Corporation (CITGO) at 'BB-' and the company's senior secured ratings (including the revolver, term loans, and fixed-rate industrial revenue bonds [IRBs]) at 'BB+' and revised the Outlook to Positive from Stable. The rating action affects approximately $1.1 billion in balance sheet debt. Key Ratings Drivers: CITGO's ratings are supported by the scale and quality of the company's refining assets, with three high-complexity refineries consisting of approximately 749,000 barrels per day (bpd) of refining capacity on the Gulf Coast and Midcontinent; significant access to price-advantaged Canadian and U.S. shale crudes, resulting in strong financial performance and free cash flow (FCF); the company's export capability out of the Gulf that allows it to access higher growth markets abroad, especially distillates; the impact of recent reductions in balance sheet debt; and covenant protections in the senior indenture, which limit the ability of CITGO's parent to dilute CITGO's credit quality. Ratings Issues: These positives are balanced by CITGO's strong operational linkage to parent Petroleos de Venezuela (PDVSA), and indirectly to the Venezuelan sovereign (both rated 'B+'; Negative Outlook by Fitch) which is evidenced through CITGO's contracts to take approximately 250,000 bpd) of PDVSA crude at its Gulf coast refineries, frequent appointment of PDVSA personnel to CITGO executive and board positions, and procurement services agreements CITGO has with PDVSA. Other considerations include the historical volatility of refining; structural declines in the U.S. gasoline market, which has seen demand declines in 5 of the last 6 years and now stands at levels last seen in 1998; and the historical use of CITGO by its parent as a cash cow. Brent-WTI Spread: CITGO has benefited from discounts associated with landlocked WTI and other interior North American crudes, as embodied by the wide Brent-WTI gap (averaging $18.50 in the first quarter of 2013 versus historical spreads in the +/-$3/barrel range). This gap has been primarily driven by lack of pipeline options for fast- expanding Canadian heavy and interior U.S. shale crudes (Permian, Eagle Ford Bakken). While Fitch expects spreads will significantly decline as new infrastructure comes online, these price dislocations should continue to benefit CITGO into the medium term and beyond. CITGO can run up to 200,000 bpd of such discounted crudes in its Gulf Coast system, and approximately 100,000 bpd of Canadian heavy crudes at its 167,000 bpd Lemont, IL refinery. Improved Credit Metrics: CITGO's credit metrics have shown continued improvement. As calculated by Fitch, at Dec. 31, 2012, CITGO's total debt and capitalized lease obligations fell to $1.37 billion versus $1.48 billion the year prior and $2.2 billion in 2009. Debt reductions came from additional prepayments on Term Loan 'C', and scheduled amortizations on the company's other term loans as well as its capitalized hydrogen plant leases. The combination of debt reductions and higher EBITDA pushed debt/EBITDA leverage down to 0.8x and EBITDA/interest coverage up to 11.2x at year-end 2012. CITGO's latest 12 months (LTM) FCF was $249.7 million, net of cash dividends paid to PDVSA of $377.9 million. Looking forward, Fitch expects the company will continue to be FCF positive over the next two years as it continues to upstream dividends to its parent. Liquidity: CITGO's liquidity was ample at year-end 2012 and totaled $1.43 billion. This included $262 million in cash; $739 million available on its revolver; and $427 million in A/R Securitization availability. In addition, CITGO had $290 million in repurchased IRBs, which were held in Treasury and could be remarketed at the company's discretion. Additional liquidity could come from liquidation of inventory, or the sale of other assets. At year-end 2012 the market value of CITGO's inventories exceeded the recorded cost by $2.6 billion. Headroom on key financial covenants was good at year-end 2012 and included a debt-to-cap ratio of 33.6% (versus a 60% max), and interest coverage of 13.6x versus (versus a minimum of 3.0x). Near-term maturities are manageable and include amortizations of existing term loans and capital leases over the next three years. Other Liabilities: CITGO's other obligations are manageable. CITGO's pension was underfunded by $353.5 million versus $303.5 million the year prior, with the increase primarily driven by actuarial losses. CITGO's 2012 contributions to its pension plans are expected to be $59 million. Rental expense for operating leases declined to $126 million versus $142 million the year prior, and included product storage facilities, office space, computer equipment, and vessels. The company's Asset Retirement Obligation (ARO) was $18.75 million for and was primarily linked to asbestos remediation. Covenant Protections: It is important to note that there are relatively robust covenant protections in CITGO's secured debt which restrict the ability of its parent to dilute CITGO's credit quality. These include a debt/cap maximum of 60%, with a lower 55% test for purposes of making distribution to the parent; and a restricted payment basket which limits the ability of CITGO to make distributions to its parent. While the $300 million in 2017 11.5% notes contain 'fall- away' covenant provisions whicheliminate certain covenants in the event CITGO achieves Investment Grade status (including the restricted payment basket), it is important to note that CITGO's remaining balance sheet debt does not contain such provisions. The notching between the IDR and secured ratings reflects the strength of the underlying security package, which was expanded in 2010 to include the 167,000 bpd Lemont refinery, in addition to CITGO's Lake Charles and Corpus Christi refineries, and select petroleum inventories and accounts receivables. Ratings Sensitivities: Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Continued strong financial performance at CITGO centered on maintenance of low debt/EBITDA leverage ratios and continued positive FCF; -- Improved ratings at the parent level. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- A collapse in refining fundamentals or sustained operational problem at one or more refineries; -- Weakening or elimination of key covenant protections contained in the senior secured debt through refinancing or other means. Note that this last action in particular would weaken the notching rationale between parent and subsidiary, as the secured debt covenants offer substantial protections to all CITGO debtholders. Fitch has affirmed the following ratings for CITGO: -- IDR at 'BB-'; -- Senior secured credit facility at 'BB+'; -- Secured term loans at 'BB+'; -- Secured notes at 'BB+'; -- Fixed-rate IRBs at 'BB+'. CLAIRE'S STORES: To Redeem 9.25% Senior Notes Due 2015 on June 3 ---------------------------------------------------------------- Claire's Stores Inc. has instructed The Bank of New York Mellon Trust Company, N.A., as Trustee, under the indenture governing the Company's 9.25% Senior Notes due 2015, to notify the holders of the Notes that the Company will redeem $149,466,000 aggregate principal amount of the Notes on June 3, 2013. The redemption price will be 100% of the aggregate principal amount plus accrued but unpaid interest. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. Claire's Stores disclosed net income of $1.28 million on $1.55 billion of net sales for the fiscal year ended Feb. 2, 2013, as compared with net income of $11.63 million on $1.49 billion of net sales for the fiscal year ended Jan. 28, 2012. The Company's balance sheet at Feb. 2, 2013, showed $2.79 billion in total assets, $2.81 billion in total liabilities, and a $14.44 million stockholders' deficit. Bankruptcy Warning The Company said the following statement in its annual report for the fiscal year ended Feb. 2, 2013. "If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default: * the holders of such indebtedness may be able to cause all of our available cash flow to be used to pay such indebtedness and, in any event, could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest; * the lenders under our Credit Facility could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets; and * we could be forced into bankruptcy or liquidation," according to the Company's annual report for the fiscal year ended Feb. 2, 2013. * * * As reported by the TCR on Oct. 1, 2012, Moody's Investors Service upgraded Claire's Stores, Inc.'s Corporate Family and Probability of Default ratings to Caa1 from Caa2. The upgrade of Claire's Corporate Family Rating to Caa1 reflects its ability to address its substantial term loan maturity in 2014 by refinancing it with a $625 million add-on to its existing senior secured first lien notes due 2019. Claire's Stores, Inc., carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. CODA HOLDINGS: Coda Automotive Rejecting Former Calif. HQ Lease --------------------------------------------------------------- CODA Holdings, Inc., and its affiliates seek authority from the Bankruptcy Court to reject a lease for non-residential real property located at 820 Broadway, Santa Monica, California. Debtor Coda Automotive, Inc., as assignee of Miles Electric Vehicles, is party to an April 21, 2010 lease agreement with Tessler & Company. Automotive used both the first and second floors of the property, totaling 19,000 rentable square feet, for its headquarters. The lease expires Sept. 30, 2015, and costs the Debtor $68,400 in monthly base rent. The Debtor subleases portions of the property to Iconmobile LLC and Worksocial LLC and receives monthly payments of $30,000 each from Iconmobile and Worksocial. While Automotive formerly used the property for its headquarters, it has since vacated the property to obtain benefits of certain creditors. The property, therefore, is no longer necessary for the Debtors' business. The rent payments from the subleases do not cover the entire amount of rent payments due to the lessor. About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- manufactures energy products based on lithium-ion batteries, adaptive battery-management technology and scalable system architecture. CODA Energy's products feature a modular design that provides reliable, secure, cost-effective solutions for a wide range of energy and power needs, including peak shaving, load leveling, renewable energy integration, frequency regulation, voltage support, and transmission and distribution (T&D) upgrade deferral. CODA Holdings, Inc., Coda Energy LLC and three other affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-11153) on May 1, 2013, to enable the Company to complete a sale, confirm a plan, and emerge from bankruptcy in a stronger position to execute its new business plan. The Company expects the sale process to take 45 days to complete. FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide DIP financing to enable the Company's energy storage business to remain fully operational during the restructuring process. The consortium, or its designee, will also as stalking horse bidder to acquire the Company post-bankruptcy. In addition, the Company will seek to monetize value of its existing automotive business assets. CODA disclosed assets of $10 million to $50 million and liabilities of less than $100 million. The Debtors have incurred prepetition a significant amount of secured indebtedness: secured notes of with principal in the amount of $59.1 million; term loans in the principal amount of $12.6 million; and a bridge loan with $665,000 outstanding. FCO and other bridge loan lenders have "enhanced priority" over other secured noteholders that did not participate in the bridge loans, pursuant to the intercreditor agreement. CODA's legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its Chief Restructuring Officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC's legal advisor. CODA HOLDINGS: Wins Approval to Pay Critical Vendors ---------------------------------------------------- CODA Holdings, Inc., and its affiliates sought and obtained bankruptcy court approval to pay prepetition claims of critical vendors in the ordinary course of business. The order provides that payments to critical vendors will not exceed $65,000 in the aggregate, without prejudice to the Debtors' right to seek further relief increasing total payments to vendors. Because they do not have any viable alternatives to obtain substitute goods or services form other vendors or providers, the Debtors sought authority to satisfy prepetition claims of entities identified as "critical vendors" to ensure that the goods and services will continue to be available to the Debtors through the conclusion of the sales process without interruption. Aside from payments to critical vendors, Bankruptcy Judge Christopher S. Sontchi, following a hearing on May 3, approved other first day motions, including requests by the Debtors to continue using their bank accounts, prohibit utilities from discontinuing services, pay prepetition wages and benefits to employees, and maintain their insurance programs. About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- manufactures energy products based on lithium-ion batteries, adaptive battery-management technology and scalable system architecture. CODA Energy's products feature a modular design that provides reliable, secure, cost-effective solutions for a wide range of energy and power needs, including peak shaving, load leveling, renewable energy integration, frequency regulation, voltage support, and transmission and distribution (T&D) upgrade deferral. CODA Holdings, Inc., Coda Energy LLC and three other affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-11153) on May 1, 2013, to enable the Company to complete a sale, confirm a plan, and emerge from bankruptcy in a stronger position to execute its new business plan. The Company expects the sale process to take 45 days to complete. FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide DIP financing to enable the Company's energy storage business to remain fully operational during the restructuring process. The consortium, or its designee, will also as stalking horse bidder to acquire the Company post-bankruptcy. In addition, the Company will seek to monetize value of its existing automotive business assets. CODA disclosed assets of $10 million to $50 million and liabilities of less than $100 million. The Debtors have incurred prepetition a significant amount of secured indebtedness: secured notes of with principal in the amount of $59.1 million; term loans in the principal amount of $12.6 million; and a bridge loan with $665,000 outstanding. FCO and other bridge loan lenders have "enhanced priority" over other secured noteholders that did not participate in the bridge loans, pursuant to the intercreditor agreement. CODA's legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its Chief Restructuring Officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC's legal advisor. CODA HOLDINGS: Former Employee Commences Class Action Suit ---------------------------------------------------------- Tony Bulchack has commenced an adversary proceeding in Bankruptcy Court after CODA Holdings Inc. and its affiliates terminated 125 employees in December without advance notice. Mr. Bulchak seeks class action status. Mr. Bulchak was employed by the Debtors, and worked at the facility located at 2340 S. Fairfax Avenue, Los Angeles, California, until his termination on or about Dec. 14, 2012. He is pursuing a claim for relief for violation of 29 U.S.C. Sec. 2101 et seq. on his own behalf and on behalf of all other similarly situated former employees, pursuant to 29 U.S.C. Sec. 2104(a)(5) and Federal Rules of Civil Procedure, Rule 23(a) and (b), who worked at or reported to one of the Debtors' facilities and were terminated without cause in December, and within 30 days of that date, or were terminated without cause as the reasonably foreseeable consequence of the mass layoffs and/or plant closings by the Debtors in December, and who are affected employees, within the meaning of 29 U.S.C. Sec. 2101(a)(5). The plaintiff and the putative class are represented by: Frederick Rosner, Esq. Julia Klein, Esq. THE ROSNER LAW GROUP LLC 824 N. Market St., Suite 810 Wilmington, DE 19801 Telephone: (302) 777-1111 - and - Jack A. Raisner, Esq. Rene S. Roupinian, Esq. OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- manufactures energy products based on lithium-ion batteries, adaptive battery-management technology and scalable system architecture. CODA Energy's products feature a modular design that provides reliable, secure, cost-effective solutions for a wide range of energy and power needs, including peak shaving, load leveling, renewable energy integration, frequency regulation, voltage support, and transmission and distribution (T&D) upgrade deferral. CODA Holdings, Inc., Coda Energy LLC and three other affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-11153) on May 1, 2013, to enable the Company to complete a sale, confirm a plan, and emerge from bankruptcy in a stronger position to execute its new business plan. The Company expects the sale process to take 45 days to complete. FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide DIP financing to enable the Company's energy storage business to remain fully operational during the restructuring process. The consortium, or its designee, will also as stalking horse bidder to acquire the Company post-bankruptcy. In addition, the Company will seek to monetize value of its existing automotive business assets. CODA disclosed assets of $10 million to $50 million and liabilities of less than $100 million. The Debtors have incurred prepetition a significant amount of secured indebtedness: secured notes of with principal in the amount of $59.1 million; term loans in the principal amount of $12.6 million; and a bridge loan with $665,000 outstanding. FCO and other bridge loan lenders have "enhanced priority" over other secured noteholders that did not participate in the bridge loans, pursuant to the intercreditor agreement. CODA's legal advisor in connection with the restructuring is White & Case LLP. Emerald Capital Advisors serves as its Chief Restructuring Officer and restructuring advisor, and Houlihan Lokey serves as its investment banker for the restructuring. Sidley Austin LLP is serving as FCO MA CODA Holdings LLC's legal advisor. COLT DEFENSE: Moody's Keeps 'Caa1' CFR After New Sales Pact ----------------------------------------------------------- Moody's Investors Service said that Colt Defense LLC's April 2013 amendment to its commercial rifle memorandum of understanding with Colt's Manufacturing Company, Inc. to jointly coordinate the marketing and sales of rifles into the commercial market as a moderate credit positive for Colt Defense. Colt Defense's ratings remain unchanged including its Caa1 Corporate Family Rating and negative outlook. Colt Defense LLC, headquartered in West Hartford, CT, manufactures small arms weapons systems for individual soldiers and law enforcement personnel for the U.S. military, U.S. law enforcement agencies, and foreign militaries. The company also modifies its rifles and carbines for civilian use and sells them to its affiliate, Colt's Manufacturing, which resells them into the commercial market. Revenues for the last twelve months ended March 31, 2013 totaled $233 million. COMMERCIAL METALS: Moody's Rates Sr. Unsec. Notes Due 2023 'Ba2' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to senior unsecured notes due 2023 ("2023 Notes") being offered by Commercial Metals Company. The 2023 Notes will be issued under a "well-known seasoned issuer" shelf, which will be assigned a provisional (P)Ba2 senior unsecured rating. At the same time, Moody's affirmed the company's Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating and Ba2 rating on its senior unsecured debt. The SGL-2 Speculative Grade Liquidity Rating remains unchanged. The outlook is negative. CMC intends to use the net proceeds of the offering to tender for and redeem outstanding balances under its 5.625% senior unsecured notes due November 2013 ($200 million outstanding, "2013 Notes") and for general corporate purposes. The rating on the 2013 Notes will be withdrawn once the instruments have been fully redeemed. Assignments: Issuer: Commercial Metals Company Senior Unsecured Regular Bond/Debenture, Assigned Ba2, LGD4, 66% Affirmations: Issuer: Commercial Metals Company Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture Nov 15, 2013, Affirmed Ba2, LGD4, 66% Senior Unsecured Regular Bond/Debenture Jul 15, 2017, Affirmed Ba2, LGD4, 66% Senior Unsecured Regular Bond/Debenture Aug 15, 2018, Affirmed Ba2, LGD4, 66% Ratings Rationale: CMC's Ba1 Corporate Family Rating considers the improving trends in the company's financial results following the 2009 recession but reflects the fact that profit margins and other debt protection metrics remain weak relative to the rating with an EBIT margin of 3.6% (including Moody's standard accounting adjustments) for the twelve months ending February 28, 2013. The rating also reflects Moody's expectations that, despite the absence of the unprofitable CMC Sisak subsidiary in Croatia, and undertaking a number of other right sizing actions, including a focus on reducing costs and the closure of several rebar facilities domestically and internationally, further improvement in debt protection metrics will proceed at a slow pace. This principally reflects Moody's view that the steel industry in the U.S. still faces headwinds and that performance in CMC's Americas Fabrication segment will remain challenged. Although activity in the commercial construction industry is showing improving fundamentals, the rate of improvement remains slow and Moody's expects it will be 2014 before a more solid recovery emerges. In addition, the rating incorporates the company's vulnerability to the volatility in steel demand and prices. Given still-weak industry dynamics, particularly in non- residential construction which is a major end market for CMC's mills and fabrication facilities, Moody's believes that CMC's operating performance in 2013 will be flat to slightly down relative to 2012. Reflective of the still-challenging environment and normal seasonality in CMC's business, three of the company's five segments reported lower operating profits for the six months ending February 28, 2013 compared with the prior-year period. Results in the Americas Recycling, Americas Mills and International Mill segments continue to be affected by the slow economic recovery and import price competition in the U.S., and ongoing economic and sovereign crisis in Europe. Furthermore, profitability under the International Marketing and Distribution segment has contracted year-over-year during the second fiscal quarter of 2013 due to weaker than expected demand in Australia. While the Americas Fabrication has evidenced improving results in recent periods, the segment reported a loss during the second quarter 2013 as weak construction off-take persisted across the broader U.S. market. Therefore, Moody's does not anticipate that CMC's EBIT margin to exceed 4% in 2013. The SGL-2 speculative grade liquidity rating reflects Moody's expectation of good liquidity over the next four quarters, during which Moody's expects that CMC's free cash flow and cash balances ($170 million at February 28, 2013) will remain sufficient to fund all working capital and capital expenditure requirements. The company's external liquidity sources include a $300 million revolving credit facility expiring in December 2016 and $200 million accounts receivable securitization program expiring in December 2014. Although the revolver was undrawn at February 28, 2013, there could be some usage from time to time to support seasonal working capital requirements. Furthermore, should the proposed transaction be completed (including the full redemption of the 2013 Notes) under the terms and timing currently being contemplated, CMC will no longer be required to maintain a minimum liquidity of at least $150 million in excess of the outstanding principal under the 2013 Notes -- a requirement that was scheduled to commence on May 15, 2013. The Ba2 rating of the senior unsecured notes reflects the impact of the revolving credit facility (unrated by Moody's) and priority accounts payables on the liability waterfall in Moody's Loss Given Default (LGD) Methodology and the lower position of the senior unsecured debt in the capital structure. While the revolver currently is secured only by the pledge of stock of material domestic and certain foreign subsidiaries, it requires the pledge of receivables and inventory should the company's ratings be downgraded to levels as specified in the credit agreement. Therefore, under Moody's LGD Methodology, the revolver is treated as having an effectively senior position resulting in potential higher loss absorption for the unsecured debt. The negative outlook reflects Moody's view of the still- challenging environment facing the steel industry over the next 12 to 18 months as well as its expectations that the commercial construction industry will not show meaningful signs of strengthening until 2014. As a consequence, CMC's performance remains vulnerable to these market conditions. The outlook also reflects the volatility of the steel markets and of steel prices, which Moody's expects to continue to be a factor in calendar year 2013. CMC's rating could be downgraded if economic weakness and increased competition dampen sales growth, leading to a deterioration in operating performance and credit metrics. Quantitatively, the rating could be downgraded if the EBIT margin does not show improvement towards 4%, and debt-to-EBITDA and EBIT- to-interest expense are likely to be sustained above 4.0 times and below 2.5 times, respectively. The rating is unlikely to be upgraded in the near term, given the challenges facing CMC. The rating could be upgraded should economic fundamentals in the U.S. strengthen and evidence better sustainability than has been experienced in recent years. Quantitatively, the rating could be upgraded if the debt-to-EBITDA ratio is sustainable at or below 3.0 times, the EBIT-to-interest ratio above 4.0 times and the (operating cash flow less dividends)/debt ratio sustainable above 25%. The principal methodology used in this rating was the Global Steel Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Irving, Texas, Commercial Metals Company manufactures steel through its four minimills and one micromill in the United States. It also has a presence in Europe through its minimill in Poland after recently exiting and closing its operations in Croatia (CMC Sisak). Furthermore, CMC operates steel fabrication facilities, a copper tube mill, ferrous and nonferrous scrap metal recycling facilities, and is involved in the marketing and distribution of steel, other metals and industrial raw materials. CMC generated revenues of approximately $7.4 billion and shipped approximately 5 million tons of steel in the 12 months ending February 28, 2013. COMMERCIAL METALS: S&P Assigns 'BB+' Rating to $300MM Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB+' issue-level rating (the same as the corporate credit rating) to Commercial Metals Co.'s (CMC) proposed $300 million senior notes due 2023. The recovery rating on the notes is '3', indicating S&P's expectation for a meaningful (50% to 70%) recovery in the event of a payment default. The notes are being issued under the company's shelf registration for well-known and seasoned issuers filed May 6, 2013. The notes will be senior unsecured obligations and will rank equally with all of CMC's existing and future unsecured and unsubordinated indebtedness. The company intends to use the proceeds from this offering to repurchase its $200 million notes due 2013 and for general corporate purposes. The 'BB+' rating and stable outlook on Dallas-based CMC reflect the combination of what S&P considers to be the company's "fair" business risk and "significant" financial risk. S&P base these assessments on the competitive and highly cyclical nature of the steel industry in general, and CMC's sharply lower profitability during the recent downturn in particular. S&P believes that these factors will be somewhat offset over the longer term by the diversity of CMC's metals-related business mix, as well as management's ability to realign the company's cost structure with the current environment. "For our rating on CMC, we expect adjusted debt to EBITDA to be below 4x and funds from operations (FFO) to debt in excess of 20%. We estimate that these measures were about 3.5x and 23%, respectively, for the trailing 12 months ended Feb. 28, 2013. We expect fiscal 2013 adjusted EBITDA (CMC's fiscal year ends in August) will be between $350 million and $400 million, or flat to down compared with 2012 levels, owing to a still weak nonresidential construction market and softness in Europe. We anticipate a gradual improvement in volumes along with a pickup in the U.S. economy. This should result in better capacity utilization rates and a leaner cost structure, boosting the company's profitability in fiscal 2014. As a result, we expect adjusted debt to EBITDA of between 3x and 4x in fiscal 2013 and 2014, with FFO to debt of between 20% and 25%. We consider these measures to be in line with the current rating. In addition, the company's "strong" liquidity provides support for the rating," S&P noted. RATINGS LIST Commercial Metals Co. Corporate credit rating BB+/Stable/-- New Ratings $300 million senior notes BB+ Recovery rating 3 COOPER STREET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Cooper Street Holdings, Inc. dba Village Creek Self Storage 900 Thomas Crossing Burleson, TX 76028 Bankruptcy Case No.: 13-42013 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Behrooz P. Vida, Esq. THE VIDA LAW FIRM, PLLC 3000 Central Drive Bedford, TX 76021 Tel: (817) 358-9977 Fax: (817) 358-9988 E-mail: filings@vidalawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Jerry Cunningham, president. COPANO ENERGY: S&P Raises Corporate Credit Rating From 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on U.S. midstream energy company Copano Energy LLC to 'BBB-' from 'B+' and removed it from CreditWatch, where S&P placed it with positive implications on Jan. 30, 2013. S&P raised the rating on Copano's senior unsecured notes due 2018 to 'BBB-' from 'B'. S&P also raised the rating on Copano's senior unsecured notes due 2021 to 'BBB' from 'B' based on a guarantee provided by KMP. Copano's outlook is stable. Standard & Poor's corporate credit rating on Copano reflects its "fair" business risk profile and "significant" financial risk profile, as S&P's criteria define the terms. Copano's business risk profile improved to "fair" from "weak" as it is now wholly owned by an operationally stronger and more diverse company in KMP. Copano's financial risk profile also improved to "significant" from "aggressive" and is aligned with KMP's financial risk profile. S&P expects KMP to control Copano's financial policies. Copano is a wholly owned subsidiary of KMP, which is Kinder Morgan Inc.'s master limited partnership (MLP). As of Dec. 31, 2012, Copano had about $1 billion of reported debt. "We assess Copano's stand-alone credit quality at 'BB'. While we provide some degree of ratings uplift for Copano compared with KMP's rating, we do not fully align Copano's rating with that of KMP," said Standard & Poor's credit analyst William Ferara. This reflects S&P's view that Copano is not a core subsidiary of KMP mainly due to its small size relative to KMP's other businesses. However, S&P still views Copano to have a meaningful amount of strategic importance to KMP. KMP's strong support for Copano's debt obligations, as evidenced by the guarantee on the 2021 notes and using its revolving credit facility to fund its growth projects, are key considerations. CROWN HOLDINGS: Fitch Affirms & Withdraws 'BB+' IDR --------------------------------------------------- Fitch Ratings has affirmed and simultaneously withdrawn all of its ratings on Crown Holdings, Inc., and its subsidiaries Crown Cork & Seal Company, Inc. (CCS), Crown Americas, LLC. (CA), and Crown European Holdings, SA (CEH). Fitch simultaneously affirms and withdraws the following ratings: Crown: -- Issuer Default Rating (IDR) at 'BB+'; CCS: -- IDR at 'BB+'; -- Senior unsecured notes at 'BB'. CA: -- IDR at 'BB+'; -- Senior secured term facility at 'BBB-'; -- Senior secured revolving facility at 'BBB-'; -- Senior unsecured notes at 'BB+'. CEH: -- IDR at 'BB+'; -- Senior secured euro term facility at 'BBB-'; -- Senior secured euro revolving facility at 'BBB-'; -- Senior unsecured notes at 'BB+'. The Rating Outlook is Stable. Fitch has decided to discontinue the rating, which is uncompensated. DUNE ENERGY: Amends Credit Agreement with Bank of Montreal ---------------------------------------------------------- Dune Energy, Inc., entered into the Second Amendment to Amended and Restated Credit Agreement among the Company, certain of the lenders party to the Amended and Restated Credit Agreement dated as of Dec. 22, 2011, and Bank of Montreal as administrative agent for the lenders. Prior to the amendment, the Credit Agreement provided that the Company would not, as of the last day of any fiscal quarter, beginning on March 31, 2013, and thereafter, permit its ratio of Total Debt as of that day to EBITDAX for the immediately preceding four fiscal quarters ending on that day to be greater than 4.0 to 1.0. Among other items, the Amendment to the Credit Agreement provides that: (i) the Company will not, as of the last day of the fiscal quarter ending March 31, 2013, permit its ratio of Total Debt as of that day to EBITDAX for the immediately preceding four fiscal quarters ending on that day to be greater than 5.0 to 1.0; and (ii) the Company will not, as of the last day of the fiscal quarter ending June 30, 2013, permit its ratio of Total Debt as of that day to EBITDAX for the immediately preceding four fiscal quarters ending on that day to be greater than 4.5 to 1.0. On Sept. 30, 2013, and thereafter, the Company will not, as of the last day of the fiscal quarter, permit its ratio of Total Debt as of that day to EBITDAX for the immediately preceding four fiscal quarters ending on such day to be greater than 4.0 to 1.0. The Amendment to the Credit Agreement reaffirms that the Company's Borrowing Base is $50,000,000. A copy of the Amendment to the Credit Agreement available for free at http://is.gd/w9LzZN About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $60.41 million in 2011, compared with a net loss of $75.53 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $241.08 million in total assets, $118.88 million in total liabilities and $122.19 million in total stockholders' equity. DYNASIL CORP: Alan Levine Elected to Board of Directors ------------------------------------------------------- Alan B. Levine was elected to a newly-created seat on the Board of Directors Dynasil Corporation of America. Mr. Levine will serve as the chairman of the Audit Committee of the Board of Directors. Mr. Levine, 69, brings to Dynasil over 40 years of financial and leadership experience, including 13 years as a Chief Financial Officer for companies in the financial, educational and technology industries. His experience includes serving as a director on four different public company boards, including his current positions on the boards of Magnetek, Inc., and RBC Bearings Incorporated, where he also serves on the Audit Committees. "Alan's extensive financial experience significantly expands the Board's depth of expertise," said Dynasil Chairman Peter Sulick. "We are pleased to welcome him to the Dynasil board and to his role as chairman of the Audit Committee. We look forward to benefitting from his Audit Committee experience and strategic insights." Mr. Levine spent 24 years in public accounting with Ernst & Young LLP, where he became an Audit Partner. He earned his Master of Accountancy from the University of Arizona and a B.A. from the University of Vermont. Mr. Levine will be entitled to receive the same compensation for his service on the Board as the Company's other non- employee directors. About Dynasil Watertown, Mass.-based Dynasil Corporation of America (NASDAQ: DYSL) -- http://www.dynasil.com/-- develops and manufactures detection and analysis technology, precision instruments and optical components for the homeland security, medical and industrial markets. The Company reported a net loss of $4.30 million for the year ended Sept. 30, 2012, as compared with net income of $1.35 million during the prior fiscal year. Dynasil's balance sheet at Sept. 30, 2012, showed $37.46 million in total assets, $18.62 million in total liabilities and $18.84 million in total stockholders' equity. Going Concern Doubt McGladrey LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing default with the financial covenants under the Company's outstanding loan agreements and a loss from operations which factors raise substantial doubt about the Company's ability to continue as a going concern. Default The Company is in default of the financial covenants under the terms of its outstanding indebtedness with Sovereign Bank, N.A., and Massachusetts Capital Resource Company for its fiscal fourth quarter ended Sept. 30, 2012. These covenants require the Company to maintain specified ratios of earnings before interest, taxes, depreciation and amortization (EBITDA) to fixed charges and to total/senior debt. A default gives the lenders the right to accelerate the maturity of the indebtedness outstanding. Furthermore, Sovereign Bank, the Company's senior lender has an option option to impose a default interest rate with respect to the senior debt outstanding, which is 5% higher than the current rate. None of the lenders has has taken any actions as of January 15. The Company had approximately $9 million of indebtedness with Sovereign Bank and $3.0 million of indebtedness with Massachusetts Capital, which is subordinated to the Sovereign Bank loan, as of as of Sept. 30, 2012. The Company said it is current with all principal and interest payments due on all its outstanding indebtedness, through January 15. "If our lenders were to accelerate our debt payments, our assets may not be sufficient to fully repay the debt and we may not be able to obtain capital from other sources at favorable terms or at all. If additional funding is required, this funding may not be available on favorable terms, if at all, or without potentially very substantial dilution to our stockholders. If we do not raise the necessary funds, we may need to curtail or cease our operations, sell certain assets and/or file for bankruptcy, which would have a material adverse effect on our financial condition and results of operations," the Company said in the regulatory filing EAGLE RECYCLING: Hires CohnReznick as Financial Advisors -------------------------------------------------------- Eagle Recycling Systems, Inc., et al., ask the U.S. Bankruptcy Court for permission to employ CohnReznick LLP as financial advisors. The firm, will among other things, provide these services: a) gaining an understanding of the Debtors' corporate structure, related parties and status of books and records and reporting systems; b) assisting the Debtors in the preparation of short and long term projections (Balance Sheet, Profit and Loss and Cash Flows) through analysis of historical financial statements and financial information, inquiries to management and analysis of historical information including the reasonableness of projected margins, accounts payable and expense levels, if necessary; and c) assisting the Debtors in the preparation of a 13-week cash flow forecast and budget, and other similar financial documents or presentations as this case progresses. Lieze Associates, which does business as Eagle Recycling of New Jersey, filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in New Jersey, with combined assets of $10.5 million and liabilities of $13.6 million. EASTMAN KODAK: Terminates Purchase Agreement With Brother --------------------------------------------------------- Eastman Kodak Company, on behalf of itself and its bankruptcy estate, entered into an Asset Purchase Agreement with Brother Industries, Ltd., pursuant to which Brother would have acquired certain assets and would have assumed certain obligations primarily related to Kodak's Document Imaging business. On April 28, 2013, the Company delivered to Brother a notice of termination of the Brother Agreement, which termination became effective immediately. The Company terminated the Brother Agreement based on its decision to pursue a transaction with KPP Trustees Limited, the Company's largest creditor in the Company's bankruptcy proceedings. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. EDISON MISSION: Incurs $82-Million Net Loss in First Quarter ------------------------------------------------------------ Edison Mission Energy filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $82 million on $307 million of operating revenue for the three months ended March 31, 2013, as compared with a net loss of $82 million on $343 million of operating revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $7.54 billion in total assets, $6.80 billion in total liabilities and $740 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/EBYvv0 About Mission NewEnergy Based in Subiaco, Western Australia, Mission NewEnergy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred operating cash outflows of A$4.9 million during the year ended June 30, 2012, and, as of that date, the consolidated entity's total liabilities exceeded its total assets by A$24.4 million. The Company's consolidated balance sheet at Dec. 31, 2012, showed $7.05 million in total assets, $27.29 million in total liabilities and a $20.24 million net deficit. EMMIS COMMUNICATIONS: To Repurchase $500,000 Preferred Stock ------------------------------------------------------------ The Board of Directors of Emmis Communications Corporation approved a repurchase program for the Company's 6.25% Series A Non-Cumulative Convertible Preferred Stock under which the Company may repurchase up to $500,000 in aggregate purchase price of its Preferred Stock commencing May 9, 2013. The Company may repurchase its Preferred Stock from time to time in amounts and at prices the management of the Company deems appropriate, based on its evaluation of market conditions and other considerations. The Company's repurchase may be executed using a combination of open market purchases, privately negotiated agreements, written repurchase plans or other transactions. The repurchases will be funded from cash on hand or available borrowings. The Preferred Stock repurchase program may be modified, extended, suspended or discontinued at any time without prior notice. The Compensation Committee of Emmis Communications's Board of Directors adopted a new bonus plan for the fiscal year ending Feb. 28, 2014. Under the plan, bonuses paid to the Company's executive officers will be based entirely on the attainment of specified EBITDA goals. On May 2, 2013, the Board of the Company adopted an amendment to the Company's Second Amended and Restated Code of By-Laws, effective immediately. The amendment added a new Section 3.16 of the By-Laws to provide for the use of electronic signatures in connection with Board actions by written consent. A copy of the Form 8-K is available for free at: http://is.gd/IoecEZ About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. The Company's balance sheet at Aug. 31, 2012, showed $287.53 million in total assets, $258.60 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $17.94 million total deficit. ENERGY XXI: Moody's Changes Outlook on 'B2' CFR to Stable --------------------------------------------------------- Moody's Investors Service changed Energy XXI Gulf Coast, Inc.'s rating outlook to stable from positive and affirmed its B2 Corporate Family Rating, B2-PD Probability of Default Rating and B3 senior unsecured notes rating. The Speculative Grade Liquidity rating was changed to SGL-3 from SGL-2, reflecting adequate liquidity. The outlook was changed to stable from positive. "The change in outlook to stable reflects the announced debt- financed share buyback program, combined with slower than expected growth in reserves and production," said Saulat Sultan, Moody's Vice President -- Senior Analyst. "EXXI's focus on bringing spending more in line with cash flows is positive. However, its horizontal drilling program and less emphasis on ultra-deep efforts is a departure from prior strategy and add to uncertainty about its future direction." Affirmations: LT Corporate Family Rating of B2 Probability of Default Rating of B2 - PD Senior Unsecured Rating of B3 Downgrades: Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Outlook, Changed to Stable from Positive Ratings Rationale: The B2 CFR reflects EXXI's geographic concentration in the US Gulf of Mexico in light of unique challenges associated with operating there, relatively small scale, moderating production growth profile, and a delay in deleveraging driven by the announced debt- funded share buyback program. However, the company's "oily" asset profile, high exposure to Brent-like pricing and resulting solid cash margins, promising initial results from its horizontal drilling program, and a renewed emphasis on managing capital spending in line with cash flows are credit positive. Moody's notes that EXXI's focus on horizontal drilling and less emphasis on the non-operated ultra-deep program adds to uncertainty about future strategic direction. The company has not realized any benefit in terms of reserves or production from its significant investments totaling more than $250 million through June 30, 2012 in ultra-deep program in the GoM. The SGL-3 rating reflects Moody's view of adequate liquidity through early 2014. EXXI amended its revolving credit facility in April 2013 to increase the commitments under the facility to $1.7 billion, increase the borrowing base to $850 million and extend the maturity to April 2018. The facility was further amended in early May 2013 to modify the restricted payments basket to allow for the announced stock repurchase. The company had previously outspent cash flow on a consistent basis, but is expected to reduce capital spending to track cash flows going forward. However, revolver usage will still be very high going forward. This is driven by the existing March 31, 2013 balance of approximately $213 million, $225 million in letters of credit associated with the acquisition of certain ExxonMobil assets, and up to $250 million of announced share buyback to be financed with the revolver. The company is expected to be well within the maintenance covenants under the revolving credit facility and there are no significant maturities until 2017. All EXXI assets are encumbered; hence there are limited alternate sources of liquidity. EXXI's stable outlook reflects the expected steady growth in its reserve base and production profile. It also incorporates Moody's expectation that its horizontal drilling program achieves projected results and that no additional shareholder-friendly actions will be undertaken until leverage metrics improve. The rating could be downgraded if EXXI's debt / average daily production ratio remains above $38,000 / barrel of oil equivalent per day (boe/d) on a sustained basis or if its debt / proved developed reserves ratio remains at or above $15/boe range for an extended period of time. A rating upgrade could be considered if the average daily production approaches 70,000 boe/d while debt / proved reserves remains below $12/boe on a sustained basis. The B3 rating on the senior unsecured debt reflects both the overall probability of default of EXXI, to which Moody's assigns a PDR of B2-PD, and a Loss Given Default of LGD 5 (74%). The notes are subordinated to the senior secured credit facility's potential priority claim to the company's assets. The size of the potential senior secured claims relative to the senior unsecured notes results in the senior notes being rated one notch below the B2 CFR under Moody's Loss Given Default Methodology. The principal methodology used in this rating was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Energy XXI (Bermuda) Limited which is headquartered in Hamilton; Bermuda is engaged in the exploration and production of oil, natural gas liquids and natural gas. EURAMAX INTERNATIONAL: Seven Directors Re-Elected to Board ---------------------------------------------------------- In lieu of an annual meeting, Euramax Holdings, Inc., solicited written consents from stockholders of the Company for purposes of re-electing the Company's directors. James G. Bradley, Jeffrey A. Brodsky, Mitchell B. Lewis, Michael D. Lundin, Alvo M. Oddis, Trey B. Parker, III, and Brian T. Stewart were re-elected as directors to a term of one year expiring at the 2014 annual meeting of stockholders. About Euramax Based in Norcross, Georgia, Euramax International, Inc., is a leading international producer of aluminum, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors and home centers in North America and Western Europe. The Company was acquired for $1 billion in 2005 by management and Goldman Sachs Capital Partners. Euramax Int'l has subsidiaries in Canada (Euramax Canada, Inc.), United Kingdom (Ellbee Limited and Euramax Coated Products Limited), and The Netherlands (Euramax Coated Products B.V.), and France (Euramax Industries S.A.). The Company reported a net loss of $62.71 million in 2011, a net loss of $38.54 million in 2010, and a net loss of $85.62 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $636.72 million in total assets, $712.54 million in total liabilities and a $75.81 million total shareholders' deficit. * * * As reported by the TCR on Dec. 13, 2012, Moody's Investors Service downgraded Euramax International, Inc.'s corporate family rating and probability of default rating to Caa2 from Caa1. The downgrade reflects Moody's expectation that the turmoil in global financial markets and weakness in Europe will continue to hamper Euramax's revenues and operating margins as well as weaken key credit metrics. As reported by the TCR on July 30, 2009, Standard & Poor's Ratings Services raised its ratings on Norcross, Georgia-based Euramax International Inc., including the long-term corporate credit rating, to 'B-' from 'D'. "The ratings upgrade reflects the company's highly leveraged, although somewhat improved, financial risk profile following a recent out-of-court restructuring," said Standard & Poor's credit analyst Dan Picciotto. "As a result of the restructuring, Euramax's second-lien debtholders received equity and about half of its new $513 million of first-lien debt is pay-in-kind, providing some cash flow benefit," he continued. FAIRWEST ENERGY: Alberta Regulator Issues Cease Trade Order ----------------------------------------------------------- FairWest Energy Corporation on May 6 disclosed that, consistent with its announcement of April 29, 2013, FairWest did not file its annual financial statements and corresponding management discussion and analysis for the year ended December 31, 2012 under applicable securities laws. As a result of the filing defaults, a cease trade order was issued by the Alberta Securities Commission and on May 3, 2013, the TSX Venture Exchange suspended trading in the Company's securities. TSXV has advised the Company that failure to meet the continued listing requirements and satisfactorily comply with TSXV requirements will result in transfer of FairWest securities after August 1, 2013 to NEX, a trading forum for listed companies that have fallen below TSXV's ongoing listing standards. About FairWest Energy FairWest is a Calgary, Alberta based junior oil and gas company engaged in the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids in the provinces of Alberta and Saskatchewan. FairWest an Initial Order on Dec. 12, 2012 from the Court of Queen's Bench of Alberta granting relief to FairWest under the Companies' Creditors Arrangement Act ("CCAA") and appointing PricewaterhouseCoopers Inc. as the monitor. FBLN INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: FBLN, Inc. dba Pacific Aluminum Co PAC Glazing Solutions 7533 W. Bostian Road Woodinville, WA 98072 Bankruptcy Case No.: 13-14150 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Marc Barreca Debtor's Counsel: Larry B. Feinstein, Esq. VORTMAN & FEINSTEIN 500 Union Street, Suite 500 Seattle, WA 98101 Tel: (206) 223-9595 E-mail: feinstein2010@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb13-14150.pdf The petition was signed by Fred Baruch, president. FIRST INDUSTRIAL: Leasing Gains Cue Moody's to Upgrade Ratings -------------------------------------------------------------- Moody's Investors Service upgraded senior secured rating for First Industrial L.P. to Ba2 from Ba3 and raised preferred stock rating for First Industrial Realty Trust to B1 from B2. Moody's further maintained positive rating outlook for First Industrial. The following ratings were upgraded with a positive outlook: First Industrial Realty Trust, Inc. -- preferred stock at B1 First Industrial L.P. --senior unsecured debt at Ba2 Ratings Rationale: This rating action reflects First Industrial's progress in leasing up its portfolio as evidenced by increased occupancy rates to 89.6% for the quarter ended March 31, 2013 from 87.4% in the same quarter a year earlier. The upgrade also reflects significant deleveraging accomplished by First Industrial to 6.0x net debt/EBITDA for Q1'13 from 7.1x for Q1'12. The REIT's effective leverage (including debt and preferred stock) similarly declined to 43.3% at March 31, 2013 from 51.5% the year earlier. Also positively, First Industrial increased its fixed charge to 2.1x for Q1'13 from 1.86x for Q1'12 and maintained its secured debt at manageable levels (22.2% at March 31, 2013, expected to decline to under 20% by year-end). The REIT's liquidity has also been stable. First Industrial's development pipeline has increased slightly to 3.2% of gross assets or a little over $100 million. Moody's views development as a risk; however, at this level it does not perceive it to be material for the REIT and note that First Industrial has recently built and successfully leased a 300,000 SF warehouse in Inland Empire. The positive rating outlook reflects Moody's expectation that First Industrial will continue to benefit from favorable trends in the industrial sector. Moody's expects the REIT's leasing momentum to continue, and its occupancy and profitability to grow in the near term. An upgrade would depend on First Industrial further growing its occupancy closer to 92%, maintaining its fixed charge and net debt/EBITDA at a minimum at current levels (approximately 2.1x fixed charge coverage and 6.0x net debt/EBITDA for Q1'13), and its secured debt under 20%. Moody's would also expect the REIT to have ample liquidity at all times and do not anticipate material growth in either the development pipeline or the joint venture platform. Negative rating pressure will result from any leasing or operational challenges that would cause First Industrial's credit profile to deteriorate beyond current levels. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. First Industrial Realty Trust, Inc. (NYSE: FR) is REIT which owns, manages and has under development approximately 67.3 million square feet of industrial space including bulk and regional distribution centers, light industrial, and other industrial facility types. At March 31, 2013, the REIT had $2.6 billion in assets and $1.3 billion in equity. GATEHOUSE MEDIA: Incurs $17.6 Million Net Loss in First Quarter --------------------------------------------------------------- Gatehouse Media, Inc., reported a net loss of $17.62 million on $110.91 million of total revenues for the three months ended March 31, 2013, as compared with a net loss of $13.37 million on $117.97 million of total revenues for the three months ended April 1, 2012. The Company's balance sheet at March 31, 2013, showed $446.06 million in total assets, $1.29 billion in total liabilities and a $844.17 million total stockholders' deficit. Commenting on GateHouse Media's results, Michael E. Reed, chief executive officer of GateHouse Media, said, "We continue to make strides in our new growth initiatives, particularly in the roll out of Propel Marketing, our digital solutions company. While still a small part of GateHouse, Propel's new business pipeline is growing and revenues in the first quarter surpassed all of 2012 revenues, which contributed to our overall 14.9% digital growth. We are still making net investments in this initiative as we ramp up the business, which negatively impacted our year over year expense and profit comparisons in the quarter." A copy of the press release is available for free at: http://is.gd/2KbLsn About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. For the 12 months ended Dec. 30, 2012, the Company incurred a net loss of $30.33 million, as compared with a net loss of $22.22 million for the 12 months ended Jan. 1, 2012. Bankruptcy Warning "Our ability to make payments on our indebtedness as required depends on our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. "There can be no assurance that our business will generate cash flow from operations or that future borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Currently we do not have the ability to draw upon our revolving credit facility which limits our immediate and short-term access to funds. If we are unable to repay our indebtedness at maturity we may be forced to liquidate or reorganize our operations and business under the federal bankruptcy laws," the Company said in its annual report for the year ended Dec. 30, 2012. GATZ PROPERTIES: Long Island Club to Have Sale Contract in 10 Days ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the owner of the Long Island National Golf Course in Riverhead, New York, expects to sign a contract in the next ten days committing a so-called stalking horse buyer to submit the first bid at auction. The club said there are a "myriad" of interested buyers. According to the report, the disclosure was made in a motion filed last week for a 45-day expansion of the exclusive right to propose a Chapter 11 reorganization plan. If granted by the bankruptcy court at a May 20 hearing, the new deadline would be June 14. The public course is worth $7.7 million, according to a court filing when the Chapter 11 reorganization began in July. About Gatz Properties Gatz Properties LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74493) on July 20, 2012, in Central Islip, New York. The Company scheduled $7,877,511 in assets and $7,892,130 in liabilities. Bankruptcy Judge Alan S. Trust oversees the Debtor's case. Salvatore LaMonica, Esq., at LaMonica Herbst and Maniscalco, in Wantagh, New York, serves as counsel. GENERAC POWER: Moody's Rates Proposed $1.15-Bil. Term Loan 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 to Generac Power Systems, Inc. proposed $1.15 billion Senior Secured Term Loan, the proceeds of which will support a refinancing of Generac's existing term loan and fund a special dividend of approximately $340 million. Additionally, Moody's affirmed Generac's corporate family rating at B2, probability of default at B2-PD, and speculative grade liquidity at SGL2. The rating outlook was revised to Stable from Positive. These ratings are subject to change to the extent that the terms of the refinancing or legal structure are inconsistent with what has been previously communicated to Moody's. The rating on the company's existing Term Loan will be withdrawn subsequent to the refinancing. Ratings Rationale: Generac's B2 Corporate Family and Probability of Default Ratings incorporate the company's leverage and track record of a shareholder friendly financial policy, geographic concentration, and limited product offering. However, the ratings also recognize the company's well established market position, impressive brand recognition, and strong anticipated cash flow generation for the rating category. The ratings and outlook are also supported by Generac's good liquidity profile and the expectation that positive free cash flow should support deleveraging subsequent to the transaction. The following rating actions have been taken, subsequent to Moody's review of final documentation: Corporate Family Rating, affirmed at B2 Probability of Default, affirmed at B2-PD SGL, affirmed at SGL2 $1.15 billion Term Loan, assigned B2 LGD4 55% The following rating will be withdrawn after the transaction's close: $900 million Term Loan, previously B2 LGD4 55% The ratings outlook was revised to Stable from Positive The B2 rating on the proposed $1.15 billion Senior Secured Term Loan reflects its first priority lien on fixed assets and intangibles and through cross-collateralization with the new $150 million Senior Secured ABL (unrated), a second priority lien on all ABL collateral. The facilities are guaranteed by the company's wholly owned domestic restricted subsidiaries and on a senior basis by Generac Acquisition Corporation, which is a wholly-owned subsidiary of Generac Holdings Incorporated that is also a party to the Guarantee and Collateral Agreement as a guarantor. The proposed ABL has a first priority lien on ABL collateral (primarily inventory and accounts receivable). Generac's SGL-2 reflects that the company is anticipated to have a good liquidity profile over the near-term. The company's liquidity is supported by free cash flow to debt that is anticipated to be over 10% annually and full availability on its proposed $150 million revolving credit facility. The facility has a covenant -- lite structure and moreover, the company is not considered to have meaningful unencumbered assets that can be sold to generate liquidity without affecting its core operations. The stable outlook reflects a history of shareholder dividends, including a dividend in 2012 of over $400 million, the most recent of which is to significantly erode shareholder's equity. Shareholder equity as of December 31, 2012 was approximately $400 million versus a contemplated dividend of approximately $342 million. The outlook also reflects Moody's expectation of continued strong overall operating performance and healthy margins. The company's cash flow generation before dividends benefits from low capital expenditure requirements. In order for positive rating traction to occur, the company must have a clearer dividend policy that is meaningfully less taxing on its balance sheet than its past dividends. The rating or outlook could benefit if the company's leverage was below 4.0 times on a sustainable basis combined with EBITDA to interest coverage over 3.5 times. The rating or outlook could be downgraded if free cash flow to debt falls below 5% or if debt to EBITDA increases to 5.5 times or higher. A debt-financed acquisition or additional large dividend payments that further weaken the company's balance sheet could also result in negative rating action. The outlook could become negative if margins were to weaken as a result of factors like increased competition from low-cost foreign manufacturers or the company's inability to pass on rising steel costs to its customers. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Generac Power Systems, Inc. is a leading designer and manufacturer of a wide range of generators and other engine powered products in U.S., Canada, and Mexico. The company has approximately 3,000 employees and had approximately $1.2 billion in revenues for its fiscal year ended December 31, 2012. GENERAL MOTORS: Fitch Expects to Rate Sr. Unsecured Notes 'BB' -------------------------------------------------------------- Fitch Ratings has maintained the Rating Watch Positive on General Motors Financial (GMF). The ratings were placed on Rating Watch Positive on Nov. 28, 2012 following the announcement of GMF's plan to acquire Ally Financial Inc.'s international operations (IO) in Latin America, Europe, and China. Fitch also expects to rate GMF's senior unsecured notes 'BB' on Rating Watch Positive. Proceeds are expected to be used to fund a portion of the Ally IO acquisition, repay the inter-company loan, and for general corporate purposes. A full list of rating actions follows at the end of this press release. Key Rating Drivers The Rating Watch Positive reflects Fitch's view that following the successful close of remaining outstanding portions of the Ally acquisition, GMF will be a 'core' subsidiary to its parent, General Motors Company (GM), as defined in Fitch's criteria 'Rating FI Subsidiaries and Holding Companies,' published in August 2012. Fitch would expect to resolve the Rating Watch and align GMF's ratings with those of GM (long-term IDR 'BB+'/Outlook Stable), subject to regulatory approval and anticipated transaction closing, which is expected by year-end 2013. For more information on Fitch's rationale for placing GMF on Rating Watch, please see 'Fitch Places GM Financial on Watch Positive Upon Announced Acquisition of Ally's Intl Operations', dated Nov. 28, 2012. The expected unsecured debt rating is equalized with the ratings assigned to GMF's existing senior unsecured debt as the new notes will rank equally in the capital structure. The equalization also reflects Fitch's expectation that unsecured debt as a percentage of total debt will increase following the close of the IO acquisition, thus increasing the unencumbered asset base for unsecured note holders. Historically, GMF has had an articulated long-term leverage target, as defined as earning assets to tangible equity, of 6.0- 8.0x. GMF's calculated leverage was 4.1x as of Dec. 31, 2012. While the company has been operating below its target, Fitch believes leverage will remain within the articulated range following the debt issuance and closing of the acquisition, albeit with less cushion relative to the target. Fitch calculated leverage, as measured by debt to tangible equity, was 3.3x at Dec. 31, 2012. Fitch expects debt to tangible equity to increase to around 5.5x on a pro forma basis for the debt issuance. Rating Sensitivities On April 2, 2013, GMF announced it had completed the acquisition of Ally's operations in Germany, the U.K., Italy, Sweden, Switzerland, Austria, Belgium, The Netherlands, Chile, Columbia, and Mexico. GMF is still waiting to close on Ally's operations in France, Portugal, Brazil and China, pending regulatory and certain other approval. The company expects the final three to close by year-end 2013 or early 2014. Resolution of the Rating Watch Positive will be evaluated in the context of the success of the closing and integration of the remainder of the international assets. The ratings could be upgraded and equalized to those of its parent, based on Fitch's belief that the acquisition makes GMF a core subsidiary to GM. The equalization of the ratings would be supported by GM assets accounting for a larger portion of GMF's total portfolio, an increase in GM-related earnings at GMF, the $2 billion cash injection from the parent, of which $1.3 billion was contributed in April with the first closing, and GMF's ability to borrow on the new GM bank facility. The ratings could be affirmed in the event GMF is unable to successfully close and integrate the international assets, the parent does not provide additional equity to maintain adequate capitalization at GMF, and/or GMF is unable to tap the GM revolver for additional liquidity. Positive rating momentum will be limited by Fitch's view of GM's credit profile. Fitch cannot envision a scenario where the captive would be rated higher than its parent. Negative rating action could be driven by a change in the perceived relationship between the parent and subsidiary, such as if Fitch believed that GMF has become less core to the parent's strategic operations or adequate financial support was not provided in a time of crisis. Additionally, the recognition of consistent operating losses, a material increase in leverage beyond management's articulated range, and/or deterioration in the company's liquidity profile could also yield negative rating action. Fitch maintains the following GMF ratings on Rating Watch Positive: -- Long-term Issuer Default Rating (IDR) 'BB'; -- Senior Unsecured Debt 'BB'. Fitch expects to assign the following ratings: General Motors Financial -- New senior unsecured notes 'BB'; Rating Watch Positive. GENERAL MOTORS: S&P Affirms 'BB' ICR & Rates $2BB Notes 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed the 'BB' issuer credit rating on General Motors Financial Co. Inc. (GM Financial) and assigned 'BB-' ratings to the proposed senior unsecured notes of $2 billion. The outlook is stable. GM Financial announced that it will issue $2 billion of senior unsecured notes to partially fund its acquisition of certain international operations of Ally Financial Inc. GM Financial is acquiring Ally's operations in multiple geographies, and the acquisitions of operations in France, Portugal, Brazil, and China have not yet closed. The balance of the required funding will come from a $2.0 billion equity contribution from GM (of which $1.3 billon was contributed on April 1), unsecured debt and borrowings on the company's intercompany line of credit with GM, and GM Financial's excess liquidity. On a pro forma basis, the total acquisition will roughly double the company's balance sheet and will increase leverage (debt to equity) to more than 4.25x from about 2.5x. "The company had clearly communicated its acquisition funding plan to us earlier this year," said Standard & Poor's credit analyst Kevin Cole. "And our March 2013 analysis incorporated the strong likelihood that the company would raise significant unsecured debt and raise its leverage as it closed the first phase of the acquisition in the first half of 2013." "We consider GMF to be a strategically important subsidiary of General Motors Co. (GM), which boosts the long-term issuer credit rating of GM Financial by two notches to 'BB', above the 'b+' stand-alone credit profile (SACP). The international operations acquisitions will increase GM Financials GM-related assets to 70% of total assets, on a pro forma basis, from roughly 40% as of Dec. 31, 2012. Although we believe the acquisition will increase GM Financial's strategic importance to GM, we believe that GM Financial's domestic role would need to grow further to warrant a core designation. On a pro forma basis, GM Financial remains largely encumbered by credit facilities and securitization notes payables, and the company will finance the acquired international operations with existing financing platforms, using secured and unsecured funding. As a result of this de facto subordination, our rating on the senior unsecured debt is 'BB-', one notch lower than the issuer credit rating," S&P added. "The outlook is stable, reflecting our view that we are unlikely to rate GM Financial the same as GM during the next 12 months," said Mr. Cole. "The outlook on GM is also stable. Nevertheless, we believe that GM Financial's role within GM will become more important during the next few years as GM continues to build its domestic commercial business, begins to offer a prime retail loan product in North America in 2014, and integrates the acquired international operations. As such, we will continue to assess GM Financial's role based on the growing proportion of GM originations in GM Financial's receivables portfolio, especially in the U.S. This could result in GM Financial being designated as a core captive subsidiary. If this occurs, we could raise the rating on GM Financial so that it is equal to that on its parent. However, if GM Financial's performance were to suffer and we lowered our stand-alone assessment by multiple notches, we could lower the rating on the company". GLOBAL TEL*LINK: S&P Revises Outlook & Affirms 'B' CCR ------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Mobile, Ala.-based prison phone provider Global Tel*Link Corp. (GTL) to stable from positive. S&P affirmed its 'B' corporate credit rating on the company. At the same time, S&P assigned the company's new first-lien credit facilities a 'B' issue-level rating and a '3' recovery rating, and assigned the new second-lien term loan a 'CCC+' issue-level rating and '6' recovery rating. The '3' recovery rating assigned to the first-lien debt indicates S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The '6' recovery rating on the second-lien debt indicates S&P's expectation of negligible (0%-10%) recovery in the event of a default. The company will use proceeds from the new credit facilities to refinance the existing credit facilities, as well as pay a $275 million dividend to the equity owners. Pro forma for the planned dividend recapitalization, GTL's leverage will increase to more than 6x from about 4.4x for 2012. "Our outlook revision to stable from positive reflects our expectation that leverage will remain in the low-6x area over the next year, even with some expected discretionary debt repayment," said Standard & Poor's credit analyst Catherine Cosentino. In S&P's view, the higher leverage limits prospects for an upgrade over the next year, which would have required the company to maintain leverage of no higher than 4.5x on an ongoing basis. Also as a result of the heightened leverage from the transaction, S&P has revised the company's financial risk profile to "highly leveraged" from "aggressive". The ratings on GTL also take into account S&P's assessment of a "weak" business risk profile, which has not changed. Although GTL's call volume has recently improved, revenue per call has continued to decline due to a migration to cheaper alternatives (local calls versus long-distance calls). S&P expects this to contribute to a modest revenue contraction in 2013 and 2014 as the company is challenged to grow its top line. However, GTL has continued to reduce bad debt expense through the ongoing shift in revenue mix to prepaid calls, which now makes up over 90% of total revenue. S&P believes a further shift to prepaid, as well as an increased focus on the company's ancillary services, could contribute to some modest improvement in profitability. The rating outlook is stable. S&P expects leverage to remain in the low-6x area over the next year. Given the company's consistent pattern of leveraging its balance sheet to accommodate dividend recapitalizations and changes in ownership over the past several years, S&P is not likely to raise the rating even if leverage declines to around the 4.5x area, unless S&P believes that financial sponsors have materially changed their financial policy to incorporate a maximum ongoing leverage threshold. Conversely, S&P could lower the rating if weak inmate telecom demand, in conjunction with loss of key contracts or lower renewal rates, and a failure to improve margins contributes to EBITDA declines of more than 6% and results in sustained leverage exceeding 6.5x. A more aggressive financial policy, including debt-funded shareholder enhancement activity, could also prompt a downgrade if leverage were to approach 7x. GLOBALSTAR INC: Forbearance with Noteholders Extended to May 13 --------------------------------------------------------------- Globalstar, Inc. on May 6 disclosed that the forbearance agreement with respect to the Company's 5.75% Convertible Senior Notes due 2028 has been amended to extend the forbearance period through 11:59 pm (ET) on May 13, 2013 as negotiations with the forbearing note holders continue. In addition, the extension will allow additional time as the Company seeks to obtain the required consents from the Company's senior secured lenders with respect to an exchange transaction. To the extent this process is not complete by May 13, 2013, the forbearance agreement may be extended further by agreement of the parties; however, there is no assurance any further extension will be provided. Jay Monroe, Globalstar's Chairman and CEO, said, "This latest extension was necessary as we continue the process of seeking necessary approvals from the Company's secured lenders. We believe that we are in the final stages of negotiating the transaction and look forward to completing an exchange transaction that satisfies all participants." As described in the Company's Current Reports on Form 8-K filed on April 1, 2013 and April 23, 2013, pursuant to the forbearance agreement, the forbearing note holders have agreed, during the forbearance period, not to exercise any rights or remedies under the Existing Notes on account of the failure by the Company either to repurchase the Existing Notes upon the April 1, 2013 put date or to make its regularly scheduled April 1, 2013 interest payment, including without limitation, taking any action to accelerate the Existing Notes. The forbearing note holders have also directed the trustee not to take any action on account of the Specified Defaults. Any exchange arrangement for the Existing Notes is subject to final negotiation and execution of definitive agreements. Globalstar is seeking the consent of the lenders under its senior secured credit facility to the restructuring; however, there is no assurance such consent will be obtained. Until definitive agreements are negotiated in their entirety and executed, and the transactions contemplated thereby are consummated, there can be no assurance that any debt restructuring will be completed by the end of the forbearance period or at all. About Globalstar Covington, Louisiana-based Globalstar Inc. provides mobile satellite voice and data services. Globalstar offers these services to commercial and recreational users in more than 120 countries around the world. The Company's products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. GMX RESOURCES: David Lucke Quits From Board ------------------------------------------- David Lucke notified GMX Resources Inc. of his resignation from the Company's Board of Directors, effective as of May 2, 2013. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's balances sheet at Sept. 30, 2012, showed $343.14 million in total assets and $467.64 million in total liabilities. GMX Resources filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. As of the Petition Date, GMXR had long-term debt of approximately $427 million (outstanding principal amount): Outstanding Principal --------- Senior Secured Notes due December 2017 $324,340,000 Senior Secured Second-Priority Notes due 2018 $51,500,000 Convertible Senior Notes due May 2015 $48,296,000 Senior Notes due February 2019 $1,970,000 Joint Venture Financing $1,261,000 ------------ Total $427,367,000 The Debtors tapped Andrews Kurth, LLP, as bankruptcy counsel, Crowe & Dunlevy as conflicts counsel, Jefferies LLC as investment banker and Epiq Bankruptcy Solutions, LLC as claims and notice agent. GMX RESOURCES: NGP Writes Off $12.7MM in Subordinated Notes ----------------------------------------------------------- NGP Capital Resources Company on May 7 said it has written off its investment in GMX Resources' bonds following GMX's bankruptcy filing. In connection with the bankruptcy filing, GMX announced that it is pursuing an asset purchase agreement with certain senior first- lien creditors to acquire substantially all of GMX's operating assets and undeveloped acreage. Once the contemplated asset purchase agreement with such senior creditors is finalized, the sale would then be subject to a public auction, pursuant to procedures to be approved by the Bankruptcy Court. NGP Capital holds $12.7 million face amount of GMX's Senior Secured Second-Priority Notes due 2018, which are subordinate to the debt held by the senior creditors. As a result of the bankruptcy proceedings, NGP placed the investment on non-accrual status and reduced the estimated fair value of its investment in the GMX 2018 Notes to zero as of March 31, 2013, resulting in an unrealized loss of $7.4 million, or $0.35 per share, during the first quarter of 2013. The disclosure was made in NGP Capital's earnings release for the first quarter of 2013, a copy of which is available for free at http://is.gd/kipqU5 About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's balances sheet at Sept. 30, 2012, showed $343.14 million in total assets and $467.64 million in total liabilities. GMX Resources filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. As of the Petition Date, GMXR had long-term debt of approximately $427 million (outstanding principal amount): Outstanding Principal --------- Senior Secured Notes due December 2017 $324,340,000 Senior Secured Second-Priority Notes due 2018 $51,500,000 Convertible Senior Notes due May 2015 $48,296,000 Senior Notes due February 2019 $1,970,000 Joint Venture Financing $1,261,000 ------------ Total $427,367,000 The Debtors tapped Andrews Kurth, LLP, as bankruptcy counsel, Crowe & Dunlevy as conflicts counsel, Jefferies LLC as investment banker and Epiq Bankruptcy Solutions, LLC as claims and notice agent. GRANITE DELLS: Ch. 11 Trustee Taps Steve Brown as Attorney ---------------------------------------------------------- The Chapter 11 Trustee appointed in the bankruptcy cases of Granite Dells Ranch Holdings, LLC, and Cavan Management Services, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Arizona to employ Steve J. Brown, Esq., of the law firm Steve Brown & Associates, LLC, as counsel. The hourly billing rates charged to the estate will be $350 for Mr. Brown, $300 for Steven D. Nemecek, Esq., and $145 for legal assistant Karen Flaaen. About Granite Dells Ranch Holdings Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962) in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr. oversees the case. The Debtor is represented by Alan A. Meda, Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed $2.22 million in assets and $157 million in liabilities as of the Chapter 11 filing. Cavan Management Services, LLC is the Debtor's manager. David Cavan, member of the firm, signed the Chapter 11 petition. Arizona ECO Development LLC, which acquired a $83.2 million 2006 loan by the Debtor, is represented by Snell & Wilmer L.L.P. The resolution authorizing the Debtor's bankruptcy filing says the Company is commencing legal actions against Stuart Swanson, AED, and related entities relating to the purchase by Mr. Swanson of a promissory note payable by the Company to the parties that sold a certain property to the Company. According to Law 360, AED sued Granite Dells on March 6 asking the Arizona court to appoint a receiver. Arizona ECO is foreclosing on a secured loan backed by 15,000 acres of Arizona land. The United States Trustee said that an official committee has not been appointed in the bankruptcy case of Granite Dells because an insufficient number of unsecured creditors have expressed interest in serving on a committee. The Debtor's Plan provides for payment to unsecured creditors (including any unsecured claim of AED) in quarterly installments over eight years aggregating $5 million. However, the Plan provides that a holder of an investment promissory note (estimated to total $21 million) will be given the option of participating in the funding of the Reorganized Debtor. Tri-City Investment & Development, LLC, a 39.25% equity holder in the Debtor, also filed a Consolidated Supplemental Disclosure in support of Tri-City's Plan, as amended. Tri-City's consolidated Disclosure Statement incorporates and restates all material terms of the Tri-City's previous disclosure statements and incorporates the terms of the agreement that was reached at the Aug. 20, 2012, mediation. Judge Ballinger signed an order on March 27, 2013, confirming the Joint Plan of Reorganization proposed by the ad hoc committee of noteholders and Arizona Eco Development LLC for the Debtors. The Court confirmed the Plan after the Plan Proponents resolved the confirmation objections raised by the Unofficial Ad Hoc Committee of Equity Holders; GDRH; Granite Dells Units, LLC; Cavan Prescott Investors, LLC; Cavan Management Company, LLC, as an assignee of profit interests of CMS; and Major Cattle Company, LLC. GSW HOLDINGS: June 30 Plan Confirmation Hearing Set --------------------------------------------------- At the end of April the U.S. Bankruptcy Court for the Southern District of Mississippi approved the Amended Disclosure Statement filed by GSW Holdings, LLC, in support of the Debtor's Chapter 11 Plan of Reorganization filed on March 8, 2013. June 6, 2013, is fixed as the last day for filing written objections to confirmation of the Plan. June 13, 2013, is fixed as the last day for submitting ballots of acceptance or rejection of the Plan with the attorney for the Debtor. A hearing on confirmation of the Plan will be held on June 20, 2013, at 1:30 p.m. As reported in the TCR on April 30, 2013, the Plan will be implemented through a settlement between the Debtor and SPA Gulfport, LLC, which will result in a sale of the Kremer Marine Property to Wein-Air for the sum of $1,900,000 and the transfer of the Hunter's Chase Property on the Effective Date to SPA subject to whatever lien or liens exist on the property in favor of Hancock Bank. As part of the settlement out of the proceeds of the sale to Wein-Air, the Debtor will receive $150,000 to be distributed to the interest holders and sufficient sums to pay allowed professional fees of up to $88,000 and other administrative claims. Under the Plan, the Debtor will pay in full Allowed Administrative Expense Claims, Priority Tax Claims, Class 1 Central Progressive Bank and Trust/SPA Gulfport, LLC, Class 2 Hancock Bank, and Class 3 Unsecured Claims. Holders of interests (Class 4) will receive $150,000 and retain their interests. They will also receive ninety percent of the net proceeds of the BP Claim. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GSW_HOLDINGS_ds_amended.pdf About GSW Holdings LLC Gulfport, Mississippi-based GSW Holdings LLC filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 11-52338) on Oct. 11, 2011. Judge Katharine M. Samson presides over the case. Wheeler & Wheeler serves as its local bankruptcy counsel. The Debtor disclosed $22,225,500 in assets and $8,851,228 in liabilities. Douglas S. Draper, Esq., Leslie A. Collins, Esq., and Greta M. Brouphy, Esq., at Heller, Draper, Patrick & Horn, LLC., in New Orleans, La., represent the Debtor as counsel. HALI LLC: Case Summary & 4 Unsecured Creditors ---------------------------------------------- Debtor: Hali, LLC P.O. Box 2133 Sandy, UT 84091 Bankruptcy Case No.: 13-20244 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Southern District of West Virginia (Charleston) Judge: Ronald G. Pearson Debtor's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wvsb13-20244.pdf The petition was signed by Frank Lukacs, member. HARRISBURG, PA: Settles SEC's Securities Fraud Suit --------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that Harrisburg, the near-bankrupt capital of Pennsylvania, has agreed to settle a securities fraud suit brought by the U.S. Securities and Exchange Commission over misleading public statements it issued as the city's financial condition was tanking, the SEC said Monday. According to the report, the SEC said an investigation revealed that Harrisburg's misleading statements were made in the city's annual and midyear financial statements, its budget reports and in a state-of-the-city address. The report added that the city also made incomplete or outdated financial information available to investors holding hundreds of millions of dollars. About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. Harrisburg said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). Dismissal of the Chapter 9 petition was upheld in a U.S. District Court. That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. Mr. Unkovic resigned as receiver March 30, 2012. HARVEST OPERATIONS: Moody's Keeps 'Ba2' CFR, Stable Outlook ----------------------------------------------------------- Moody's Investors Service assigned an A1 rating to Harvest Operations Corp.'s proposed $600 million guaranteed senior unsecured notes, and downgraded the existing $500 million unguaranteed senior unsecured notes due 2017 to Ba3 from Ba2. The Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating were affirmed. Harvest's Speculative Grade Liquidity rating was downgraded to SGL-4 from SGL-3. The rating outlook for the A1 rated guaranteed bonds is stable. The rating outlook for the CFR, PDR and Ba3 rated unguaranteed bonds was changed to negative from stable. The proposed notes will be unconditionally guaranteed by Korea National Oil Corporation (KNOC, A1 stable) with the proceeds used to refinance Harvest's $400 million bridge loan. Moody's assumes the balance of the proceeds will ultimately be contributed to the redemption of Harvest's remaining subordinated convertible debentures. "The change in Harvest's outlook to negative reflects declining production, continued negative EBITDA contribution from its refinery and an expected increase in leverage as the company funds negative free cash flow with debt in 2013," said Terry Marshall, Moody's Senior Vice President. "We expect that Harvest will require an increase in its $800 million revolver or further cash injections from Korea National Oil Corporation in 2014." Downgrades: Issuer: Harvest Operations Corp. Senior Unsecured Regular Bond/Debenture Oct 1, 2017, Downgraded to Ba3 from Ba2 Senior Unsecured Regular Bond/Debenture Oct 1, 2017, Downgraded to LGD4, 64 % from LGD3, 49 % Assignments: Issuer: Harvest Operations Corp. Guaranteed Senior Unsecured Regular Bond/Debenture, Assigned A1; outlook stable on these notes only Outlook Actions: Issuer: Harvest Operations Corp. Outlook, Changed To Negative From Stable Affirmations: Issuer: Harvest Operations Corp. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Rating Rationale: Harvest's Ba2 CFR reflects its stand-alone credit profile of B1 and the strong support from its 100% parent, KNOC, for which Moody's attributes two notches of rating uplift. The B1 stand- alone credit profile is constrained by very high leverage on proved developed (PD) reserves, production and retained cash flow, considerable capital requirements to develop its oil sands reserves, and the high capital expenditure requirements and negative EBITDA contribution from its 115,000 barrels per day downstream refinery in Newfoundland. The rating favorably considers Harvest's 66% oil- and liquids-weighted production platform, and sizeable PD and total proved reserves base. The SGL-4 Speculative Grade Liquidity rating reflects weak liquidity. Moody's expects Harvest to consume negative free cash flow of about CAD250 million through the first quarter of 2014, which will completely use up the availability on its CAD800 million revolver due April, 2016. The company will need to access unidentified external liquidity to fund remaining 2014 negative free cash flow of about CAD200 million. Moody's expects Harvest to breach its total debt to EBITDA covenant (not greater than 3.75x on March 31, 2013 and 3.5x thereafter) in 2014, absent renegotiation. Harvest should remain in compliance with its other financial covenants. Harvest has some ability to sell assets to raise additional funds to support its liquidity. KNOC has provided significant financial support to Harvest since acquiring it in December 2009. While Moody's anticipates that KNOC will continue to support Harvest, this is not factored into the SGL rating, which it considers on a standalone basis. The proposed $600 million guaranteed senior unsecured notes are rated A1, reflecting the guarantee of KNOC. The existing unsecured notes are rated Ba3, reflecting the priority ranking of the company's secured CAD800 million revolving credit facility and limited cushion provided by the subordinated intercompany loan of about CAD170 million. The negative outlook reflects declining production and reserves, continued negative EBITDA contribution from the refinery, increasing debt and weak liquidity. The ratings could be downgraded if the refinery continues to consume cash and/or upstream production continues to decline, such that E&P debt to production does not appear to be sustainable below $40,000 per boe and E&P debt to proved developed reserves rises above $14 per boe. The non-guaranteed ratings could also be downgraded on a change in Moody's view of the support provided by KNOC. Restoration of the outlook to stable will be dependent upon a clear view that the refinery will not continue to consume cash and the Black Gold oil sands property is poised to produce as expected. The ratings could be upgraded if Harvest decreases its E&P debt to production below $27,000 per boe and E&P debt to proved developed reserves below $9 per boe through either an increase in its production and reserve profile or a reduction in debt. An upgrade would also be contingent on the refinery no longer consuming cash flow. The guaranteed ratings will move up or down in accordance with the ratings of KNOC. The principal methodology used in this rating was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Calgary, Alberta, Harvest is a wholly-owned subsidiary of Korea National Oil Company. Harvest produces about 50,000 barrels of oil equivalent per day, all in Canada, and has a proved reserve base of 218,000 Mboe (all reserves and production volumes are net of royalties unless noted otherwise). Harvest also owns a 115,000 bbl/day refinery in Come-By-Chance, Newfoundland. HARVEST OPERATIONS: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'A+' issue-level rating to Calgary, Alta.-based exploration and production company Harvest Operations Corp.'s (BB-/Negative/--) proposed senior unsecured 144A bond issue, with an expected issue size of up to US$650 million. Harvest's parent company, Korea National Oil Corp. (KNOC), is guaranteeing this bond issue, and in S&P's opinion, the guarantee's terms meet its criteria for credit substitution of the rating S&P has on the parent company's foreign-currency senior unsecured debt ('A+'). The guarantee from KNOC is expressed to be unconditional and irrevocable, with the promise of full and immediate payment of the required payments under this bond issue. Based on this analysis, S&P is not explicitly attributing any recovery prospects or assigning a recovery rating to the proposed bond issue, and it will be excluded from S&P's waterfall analysis when considering the recovery prospects for Harvest's existing and future debt that does not benefit from a parental guarantee. The ratings on Harvest reflect Standard & Poor's view of the company's below-average profitability, S&P's expectations of negative free cash flow generation during its 2013 forecast period, and the operational risks inherent in the company's strategy to transform its upstream portfolio from a largely mature conventional asset base to one focused on drill-bit-related reserves and production growth. In S&P's view, somewhat offsetting these weaknesses are Harvest's upstream full-cycle cost profile, which compares favorably with that of its rating category peers; and the medium- and long-term growth prospects inherent in its existing conventional and oil sands resources. RATINGS LIST Harvest Operations Corp. Corporate credit rating BB-/Negative/-- Rating Assigned Proposed senior unsecured bonds* A+ *Guarantor: Korea National Oil Corp. HEALTH NET: S&P Affirms 'BB' Rating & Revises Outlook to Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has affirmed its 'BB' long-term counterparty credit rating on Health Net Inc. and its 'BBB-' long-term counterparty credit and financial strength ratings on core subsidiaries Health Net of California Inc., Health Net Life Insurance Co., Health Net of Arizona Inc., and Health Net Health Plan of Oregon Inc. At the same time, S&P revised the outlook on HNT to stable from negative. "Health Net's business profile and financial profile is strengthening, and the company is well positioned to preserve its credit profile. We expect it to improve financial results in 2013 from 2012 levels. Although we expect EBIT return on revenue to diminish marginally from pre-2012 levels, this will be well within our expected range for the current ratings," said Standard & Poor's credit analyst Hema Singh. Health Net's overall earnings are likely to benefit from resigning some of its large commercial groups along with enhanced reimbursement rates under its new contract for its Medicaid business (Medi-Cal). S&P, therefore, do not expect these factors to affect Health Net's operating performance or ability to generate sufficient earnings to maintain its 'BBB' level capitalization and meet its debt-servicing obligations. Health Net's five-year adjusted EBIT ROR was 2.7% (1.5% in 2012). Given S&P's expectation for medical loss ratio improvement in both the commercial and Medicaid segments, it expects adjusted EBIT ROR of 2%-3% in the next 12 to 24 months. Prospective risks include significant funding cuts and continued pressure from lower reimbursement rates from Medi-Cal, which could erode earnings in the Medicaid segment. Benefits structure and eligibility have to be aligned with reimbursement levels for the company to maintain its very good operating performance. The stable outlook reflects S&P's expectation that Health Net's operating performance will improve, stabilize, and generate stable cash flow in the next 12 to 24 months to meet its debt-service requirements and pay for new business growth. S&P also expects debt leverage to remain at about 35%, EBITDA interest coverage to stay in the 6x-7x range, and statutory capitalization to be redundant at the 'BBB' level as per our model. "There is a potential for a one-notch upgrade if we expect Health Net's operating performance to stabilize with an adjusted EBIT ROR at the higher end of the 2%-3% range," Ms. Singh continued. "Although unlikely, we could lower the rating by one notch if the company's EBIT ROR were to decline to less than 1.5% for a sustained period." HORIZON LINES: Incurs $20.3 Million Net Loss in First Quarter ------------------------------------------------------------- Horizon Lines, Inc., reported a net loss of $20.35 million on $244.49 million of operating revenue for the quarter ended March 24, 2013, as compared with a net loss of $32.51 million on $263.35 million of operating revenue for the quarter ended March 25, 2012. The Company's balance sheet at March 24, 2013, showed $654.68 million in total assets, $690.23 million in total liabilities and a $35.55 million total stockholders' deficiency. "Horizon Lines first-quarter adjusted EBITDA increased 25.7% over the same period a year ago, driven largely by improved fuel recovery, reduced dry-dock transit and crew-related expenses, lower vessel charter expense, continued execution of the Puerto Rico business-improvement plan, and reduced overhead," said Sam Woodward, president and chief executive officer. "The positive factors resulting in adjusted EBITDA growth were partially offset by reduced container volume, higher stock-based compensation expense, mechanical issues on one of our vessels and increased vessel operating expenses." A copy of the press release is available for free at: http://is.gd/Bic1pC About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. For the year ended Dec. 23, 2012, the Company incurred a net loss of $94.69 million, as compared with a net loss of $229.41 million the year ended Dec. 25, 2011. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOSTESS BRANDS: Judge OKs Pension Plan Settlements -------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that the winding down Hostess Brands Inc. on Monday won New York bankruptcy court approval for a settlement with a slew of multiemployer pension plans, resolving disputes over contributions to the plans that became due after the company entered bankruptcy. According to the report, U.S. Bankruptcy Judge Robert D. Drain gave the go-ahead for the fallen snack icon, now referred to in court documents as Old HB Inc., to enter into a deal with eight multiemployer pension funds and two multiemployer annuity plans, bringing an end to litigation in Manhattan federal court. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. Hostess has received court approval for sales raising about $800 million. Apollo Global Management LLC and C. Dean Metropoulos & Co. are buying the snack cake business for $410 million. Flowers Foods Inc. is taking most of the bread business, including the Wonder bread brand for $360 million. Neither of the sales attracted competitive bidding. After an auction with competitive bidding, Mexican baker Grupo Bimbo SAB was given a green light to buy the Beefsteak rye bread business for $31.9 million. IDERA PHARMACEUTICALS: Pillar Waives Rights in Liquidation Event ---------------------------------------------------------------- Idera Pharmaceuticals, Inc., on April 30, 2013, entered into an agreement with Pillar Pharmaceuticals I, L.P., Pillar Pharmaceuticals II, L.P., and an entity affiliated with Pillar I and Pillar II. Under the Agreement, Pillar I, in its capacity as holder of 100% of the Company's Series D Convertible Preferred Stock, has irrevocably agreed to waive the right of the holders of the Series D Preferred Stock under Section 2.1 of the Certificate of Designations, Preferences and Rights of Series D Preferred Stock to receive, in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company an amount per share of Series D Preferred Stock equal to the original issue price of such share of Series D Preferred Stock plus any dividends accrued or declared but unpaid thereon to the extent that amount is greater than the amount that would have been payable with respect to such share had all shares of Series D Preferred Stock been converted into shares of the Company's Common Stock immediately prior to such Liquidation, and that upon a Liquidation the holders of the Series D Preferred Stock will receive an amount per share of Series D Preferred Stock equal to the amount that would be payable with respect to such share had all shares of Series D Preferred Stock been converted into shares of the Company's Common Stock immediately prior to that Liquidation. In addition, under the Agreement, Pillar II and the entity affiliated with Pillar II, together the holders of 100% of the Company's Series E Convertible Preferred Stock, have irrevocably agreed to waive the right of the holders of the Series E Preferred Stock under Section 2.1.1 of the Certificate of Designations, Preferences and Rights of Series E Preferred Stock to receive, in the event of a Liquidation, an amount per share of Series E Preferred Stock equal to the original issue price of that share of Series E Preferred Stock plus any dividends accrued or declared but unpaid thereon to the extent such amount is greater than the amount that would have been payable with respect to that share had all shares of Series E Preferred Stock been converted into shares of the Company's Common Stock immediately prior to that Liquidation, and that upon a Liquidation the holders of the Series E Preferred Stock will receive under Section 2.1 of the Series E Certificate of Designations an amount per share of Series E Preferred Stock equal to the amount that would be payable with respect to such share had all shares of Series E Preferred Stock been converted into shares of the Company's Common Stock immediately prior to such Liquidation. Under the Agreement, the Company has agreed to seek approval from its stockholders at its 2013 annual meeting of stockholders of amendments to the Series D Certificate of Designations and Series E Certificate of Designations to effect these changes to the liquidation provisions of the Series D Preferred Stock and Series E Preferred Stock, and each Pillar Entity has agreed: * to vote, and to cause its affiliates to vote, all shares of the Company's voting stock held by such Pillar Entity or its affiliates, and over which that Pillar Entity or its affiliates has the power to vote, in favor of such amendments; and * not to, and to cause its affiliates not to, sell or transfer any shares of Common Stock, Series D Preferred Stock or Series E Preferred Stock held by such Pillar Entity or its affiliates to any person, entity or group unless such proposed transferee agrees in a written instrument executed by that transferee, the applicable Pillar Entity and the Company to take and hold such securities subject to, among other things, the Agreement and to be bound by the terms of the Agreement, including the waiver of rights, voting agreements and restrictions on transfer set forth therein. In consideration of the agreements of the Pillar Entities under the Agreement and the delivery of the waivers by the Pillar Entities, and for no additional cash consideration, the Company has agreed to issue to the Pillar Entities warrants to purchase up to an aggregate of 1,000,000 shares of the Company's Common Stock. The Pillar Warrants will have an exercise price per share equal to the greater of (a) $0.79 and (b) to the extent that warrants to purchase shares of the Company's Common Stock are issued in a qualified financing, the per share exercise price of the warrants issued in that qualified financing, which would include the exercise price of any warrants issued in this offering to the extent that this offering is deemed to be a qualified financing. The Agreement, including the Company's obligations to issue the Pillar Warrants, will become effective upon the consummation of a qualified financing. The Agreement will terminate in the event that a qualified financing is not consummated by Oct. 1, 2013. Under the terms of the Agreement, a qualified financing is defined as the issuance and sale of the Company's equity securities from and after the date of the Agreement in one or more closings resulting in aggregate gross proceeds to the Company of at least $12.5 million. In addition, upon the Effective Date, the Company will enter into a Registration Rights Agreement with the Pillar Entities. Pursuant to the Registration Rights Agreement, the Company will agree to file a registration statement with the Securities and Exchange Commission regarding the resale of the shares of Common Stock issuable upon exercise of the Pillar Warrants. The Company will be subject to specified cash penalties if it fails to file and maintain an effective registration statement. Those penalties are limited to a cumulative maximum penalty equal to 10% of the aggregate exercise price of the Pillar Warrants then held by the Pillar Entities which are not able to be sold pursuant to a registration statement. The Company will be required to use its reasonable best efforts to maintain the registration statement's effectiveness until no shares of Common Stock issued or issuable upon exercise of the Pillar Warrants remain outstanding or issuable, as applicable. 17.5MM Shares Offering Idera Pharmaceuticals filed a free writing prospectus with the U.S. Securities and Exchange Commission relating to the offering of 17,500,000 shares of its common stock. Each share of common stock being sold together with a warrant to purchase one share of common stock. The Company estimates that it will receive net proceeds of approximately $14.7 million from the sale of the common stock, warrants and pre-funded warrants, after deducting the underwriting discounts and commissions and estimated offering costs payable by the Company and excluding the proceeds, if any, from the exercise of the pre-funded warrants and warrants issued pursuant to this offering. Pillar Pharmaceuticals I, L.P., and Pillar Pharmaceuticals II, L.P., each of which is a current stockholder, or certain of their affiliated funds, have indicated an interest in purchasing an aggregate of 5,000,000 shares of the Company's common stock and warrants to purchase up to 5,000,000 shares of the Company's common stock in this offering at the public offering price. Although the Company anticipates that these stockholders will purchase, and that the underwriter will sell to these stockholders, all of these shares of common stock and warrants, indications of interest are not binding agreements or commitments to purchase and those stockholders may determine to purchase fewer or no shares of common stock and warrants in this offering and the underwriter may determine to sell fewer or no shares of common stock and warrants in this offering to such stockholders. The shares of Common Stock are listed on the Nasdaq Capital Market under the symbol "IDRA." The Company does not intend to list the warrants or pre-funded warrants on the Nasdaq Capital Market, any other nationally recognized securities exchange or any other nationally recognized trading system. Piper Jaffray & Co. serves as the underwriter. A copy of the FWP is available for free at http://is.gd/nCuzjh About Idera Pharmaceuticals Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a clinical stage biotechnology company engaged in the discovery and development of novel synthetic DNA- and RNA-based drug candidates that are designed to modulate immune responses mediated through Toll-like Receptors, or TLRs. The Company has two drug candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a TLR7, TLR8, and TLR9 antagonist, in clinical development for the treatment of autoimmune and inflammatory diseases. In the auditors' report on the consolidated financial statements for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston, Mass., expressed substantial doubt about Idera's ability to continue as a going concern, citing recurring losses and negative cash flows from operations and the necessity to raise additional capital or alternative means of financial support, or both, prior to Dec. 31, 2013, in order to continue to fund its operations. The Company reported a net loss of $19.2 million on $51,000 of revenue in 2012, compared with a net loss of $23.8 million on $53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of reimbursement by licensees of costs associated with patent maintenance. The Company's balance sheet at Dec. 31, 2012, showed $10.8 million in total assets, $4.2 million in total liabilities, $5.9 million of Series D Redeembale Convertible Preferred Stock, and stockholders' equity of $706,000. INERGY MIDSTREAM: S&P Affirms 'BB' CCR; Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'BB' corporate credit rating on Inergy Midstream L.P. (NRGM). The outlook is stable. S&P also placed the 'B' corporate credit rating on Crestwood Midstream Partners L.P. (CMLP) and 'B-' corporate credit rating on Crestwood Holdings LLC on CreditWatch with positive implications. The recovery ratings for CMLP and Crestwood Holdings are unchanged. These actions follow NRGM's announcement that it will merge with CMLP. NRGM's credit profile will benefit from increased asset and geographic diversity and scale with only a modest increase in total consolidated leverage. For year-end 2013, S&P expects NRGM's consolidated debt/EBITDA to increase to about 4x versus S&P's previous expectations of 3.5x to 3.75x. S&P expects NRGM will assume CMLP's debt of about $710 million. As such, S&P expects NRGM to have about $1.4 billion of debt pro forma for the transaction. S&P views the gathering and processing business as somewhat credit dilutive to NRGM's existing transportation and storage businesses, which are supported by firm, take-or-pay contracts. However, pro forma for this transaction, S&P expects the new entity to have limited cash flow volatility because more than 80% of its 2013 total gross margin is under fixed-fee contracts, of which more than 50% is under firm, take-or pay contracts. The positive CreditWatch on CMLP reflects S&P's expectation that its ratings will be in line with those of NRGM. In 2013, S&P expects CMLP's stand-alone debt to EBITDA to be about 5.6x and EBITDA interest to be 3.2x. Although S&P expects CMLP's rich-gas (gas with a high concentration of natural gas liquids) volumes to consist of around 60% of total volumes in 2013, compared with 50% last year, the partnership's customer and geographic footprint remains concentrated. For example, nearly 75% of 2013 estimated volumes are coming from only two producers--Quicksilver in the Barnett region (35% of total volume) and Antero in the Marcellus shale region (40%). However, the 95% fee-based nature of CMLP's cash flow only partly offsets these risks, because lower production growth from producers will directly affect CMLP through lower gathering volumes. CMLP's operations are mainly located in Texas as well as the Marcellus shale. S&P expects to resolve the positive CreditWatch listing on CMLP's ratings when the transaction is complete in the third quarter of 2013. S&P expects to equate the corporate credit rating of CMLP with that of NRGM. S&P expects to resolve the positive CreditWatch listing on Crestwood Holdings' ratings when the transaction is complete in the third quarter of 2013. S&P expects to raise Crestwood Holding's corporate credit rating by one or two notches when the acquisition is complete. The stable outlook on NRGM reflects S&P's expectations that consolidated financial leverage will be about 4x in 2013, and that the partnership will successfully integrate the CMLP merger and Rangeland acquisition. Higher ratings are unlikely over the next 12 months, due to integration risk, as well as S&P's belief that natural gas storage cash flows could face recontracting risk during this period. S&P could raise the rating over time if the partnership continues to expand and diversify its midstream business while consistently maintaining consolidated total adjusted debt to EBITDA below 4x. S&P could lower the rating if the midstream expansion projects endure meaningful cost overruns or delays such that total adjusted debt to EBITDA approaches 5x. INFUSYSTEM HOLDINGS: Names Mike McReynolds Chief Info. Officer -------------------------------------------------------------- InfuSystem Holdings, Inc., has appointed Mike McReynolds as Chief Information Officer of the Company, effective April 29, 2013. Mr. McReynolds, 44, will be responsible for directing business improvement programs and enhancing the Company's overall use of digital connectivity and technology. Mr. McReynolds brings extensive management experience in IT integrations and operations, cross-functional leadership, and business development to his new position. Most recently, he served as President of OxiArmor, LLC, a national provider of solutions-based, anti-microbial services, where he created and implemented distributor, independent, and alliance models and contracts that generated major new sales increases. Prior to that, Mr. McReynolds served as the Chief Information Officer of RecoverCare, LLC, a leading provider of medical equipment, patient services, and clinical and financial supply chain solutions. There, he supported more than 800 employees at over 140 locations across the U.S., including multiple successful infrastructure consolidations and development of enterprise-wide web-based systems. "Mike McReynolds brings InfuSystem a notable record of healthcare- related IT successes," said InfuSystem chief executive officer Eric Steen. "Connectivity is, today, a critical component of our operations and supply-chain management. We are confident that his insights and skills will not only yield important productivity and efficiency gains but also spur long-term growth in both our existing and new markets." In connection with his appointment as InfuSystems' new Chief Information Officer, Mr. McReynolds will receive 100,000 inducement stock options outside of the Company's 2007 Stock Option Plan with an exercise price of $1.75. The options will be granted on April 29, 2013, and vest over a three-year period (33 1/3% on each anniversary of the grant date), expiring in seven years. Mr. McReynolds will receive an annual salary of $215,000. About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. Infusystem Holdings disclosed a net loss of $1.48 million in 2012, as compared with a net loss of $45.44 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $77.52 million in total assets, $37.51 million in total liabilities and $40.01 million in total stockholders' equity. INSPIRATION BIOPHARMA: Plan Filing Date Extended to June 27 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts (Eastern Division) further extended Inspiration Biopharmaceuticals, Inc.'s its exclusive period to file a plan until June 27, 2013, and its exclusive solicitation period until Aug. 26. The additional time, according to the Debtor, will be used to prepare its disclosure statement, complete its review of claims filed, and to formulate an appropriate mechanism to administer the estate's interest in the predetermined formula agreed to by the principal constituencies in the case called "Waterfall." The Court entered a separate order approving a stipulation among the Debtor, the Official Committee of Unsecured Creditors and Ipsen Pharma, S.A.S., authorizing the Debtor to use the cash collateral until May 6, 2013. About Inspiration Biopharmaceuticals Inspiration Biopharmaceuticals Inc. develops recombinant blood coagulation factor products for the treatment of hemophilia. Inspiration, based in Cambridge, Massachusetts, has two products in what the company calls "advanced clinical development." Two other products are in "pre-clinical development." None of the products can be marketed as yet. Inspiration filed for voluntary Chapter 11 reorganization (Bankr. D. Mass. Case No. 12-18687) on Oct. 30, 2012, in Boston. Bankruptcy Judge William C. Hillman oversees the case. Mark Weinstein and Michael Nolan, at FTI Consulting, Inc., serve as the Debtor's Chief Restructuring Officers. The Debtor is represented by Harold B. Murphy of Murphy & King. The petition shows assets and debt both exceed $100 million. Assets include patents, trademarks and the products in development. Liabilities include $195 million owing to Ipsen Pharma SAS, which is also a 15.5% shareholder. Ipsen -- http://www.ipsen.com/-- is also owed $19.4 million in unsecured debt. There is another $12 million in unsecured claims. Ipsen is pledged to provide $18.3 million in financing. The Debtor disclosed $20,383,300 in assets and $241,049,859 in liabilities. Ipsen is represented in the case by J. Eric Ivester, Esq., at Skadden Arps. The Official Committee of Unsecured Creditors tapped Jeffrey D. Sternklar and Duane Morris LLP as its counsel, and The Hawthorne Consulting Group, LLC as its financial advisor. INTEGRATED HEALTHCARE: Gets Favorable Order in "Fitzgibbons" Suit ----------------------------------------------------------------- Integrated Healthcare Holdings, Inc., previously disclosed it was the subject of a lawsuit filed in June 2008 by Michael W. Fitzgibbons, M.D., entitled "Michael W. Fitzgibbons, M.D. vs. Integrated Healthcare Holdings, Inc.", Superior Court of the State of California, County of Orange, Case No. 30-2008-00108081. At trial, three of Dr. Fitzgibbons' four original causes of action -- those alleging malicious prosecution, interference with prospective economic advantage and defamation -- were dismissed by the Court before the case was submitted to the jury. The jury returned a verdict in Dr. Fitzgibbons' favor on the sole remaining cause of action for intentional infliction of emotional distress. The jury's verdict awarded Dr. Fitzgibbons $5.2 million in consequential damages and $500,000 in punitive damages. The Company therefore reserved $5.2 million as a contingent loss in its financial statements as of Dec. 31, 2012, as reflected in the Company's Quarterly Report on Form 10-Q for the quarter ended Dec. 31, 2012. After the Court entered a $5.7 million judgment against the Company based on the jury's verdict, in March 2013 the Company timely filed a motion for judgment notwithstanding the verdict ("JNOV") and concurrent motion for a new trial. On April 30, 2013, the Court granted the Company's JNOV motion and provisionally granted the Company's motion for a new trial. Among other things, the Court found: * The jury's verdict was not supported by substantial evidence. * The jury's damage award was excessive and "completely out of line with ... other cases". According to the Court, "[t]here were no physical manifestations of injury [to Dr. Fitzgibbons]. While [Dr. Fitzgibbons] sustained embarrassment, the emotional distress was not of a substantial quality or duration. At worst, some other doctors poked fun at him." * "[I]t is more probable than not" the jury engaged in misconduct prejudicial to the Company. As a result of the Court's April 30, 2013, order: 1. The jury's $5.7 verdict for Dr. Fitzgibbons was set aside in its entirety and the Court's $5.7 million judgment against the Company based on the jury's verdict was vacated in its entirety. 2. As of April 30, 2013, a new and amended judgment in favor of the Company and against Dr. Fitzgibbons was entered by the Court. 3. The new and amended judgment specifies that Dr. Fitzgibbons shall take nothing from the Company and the Company may recover from Dr. Fitzgibbons the Company's cost of the litigation. 4. If for any reason the Company's JNOV motion is reversed on appeal, the Court provisionally granted the Company's request for a new trial on multiple grounds. Due to these favorable rulings, the Company reversed the $5.2 million contingent loss that was reserved on its financial statements as of Dec. 31, 2012. The reversal will be reflected in the Company's financial statements for the quarter ended March 31, 2013. About Integrated Healthcare Santa Ana, Calif.-based Integrated Healthcare Holdings, Inc., owns and operates four community-based hospitals located in southern California. The Company's balance sheet at Dec. 31, 2012, showed $164.0 million in total assets, $191.8 million in total liabilities, and a stockholders' deficit of $27.8 million. As of Dec. 31, 2012, the Company had total stockholders' deficiency of $28 million and a working capital deficit of $33 million. The Company did not meet the financial covenants for its revolving line of credit with MidCap, for the period ended Dec. 31, 2012. "Although the Company is not required to report compliance with the financial covenant for its revolving line of credit until 50 days after the fiscal quarter end, the Company is seeking the lenders' consent to a potential non-compliance with this financial covenant." the Company said in its quarterly report for the period ended Dec. 31, 2012. INTERNATIONAL HOME: FirstBank Objects to Amended Disclosures ------------------------------------------------------------ FirstBank-Puerto Rico, as secured creditor of debtors International Home Products, Inc., and Health Distillers International, Inc., have objected the Debtors' consolidated amended disclosure statement, filed March 20, 2013. The Bank relates that the Debtors continue to include inaccurate, incomplete and misleading statements and do not provide adequate information for the Bank or any other creditors to make an informed judgment of the Debtors' Amended Plan. In addition, the Bank says that the Amended Plan is not feasible for the following reasons: * There is lack of support for the projections; * Cash Sales & Collections have been consistently declining on a Monthly basis since the filing of the petition for bankruptcy. * The Debtors' projections' that Other Operating Expenses will be only $1,355,135 for the first year is "totally inconsistent" with the Debtors' past history. The Bank claims the Debtors have not provided any basis or explanation to sustain their claim that they are going to lower their biggest expense to only 22% of the annualized amount spent during the previous year. * The Debtors' projections do not include any amount for "Travel and Entertainment" expenses. * The Debtors' projections on income and expenses contrast dramatically with Debtors' auditors Aquino, De Cordova, Alfaro & Co., LLP's expectations of zero net income until the year 2020. The Bank further stated that the Liquidation and Property Analysis is inadequate, and that proposed treatment of the Bank's secured and unsecured claims is not acceptable. The Bank added that the Debtors also failed to include in Class (2) of creditors with superpriority rank, the Bank's cash collateral that was used by the Debtors from the date of the filing of the bankruptcy petitions until July 2, 2012. A copy of the Bank's Objections to the Debtors' Consolidated Amended Disclosure statement is available at: http://bankrupt.com/misc/internationalhome.doc439.pdf As reported in the TCR on April 9, 2013, the Debtors amended their disclosure statement and plan of reorganization to provide for these terms: * The secured claim of A. Bert Foti will be allowed in the amount of $500,000 and will be paid on the second year of the Plan. * First Bank's valid liens over the Debtor's properties arising from the $12.2 million prepetition term loan facility will be paid in monthly installments of $32,105 considering an amortization of 20 years and interest at the prime rate. First Bank's allowed secured claims arising from other prepetition lines of credit will be paid in the amount of $1.9 million with monthly installments of $8,328 considering an amortization of 20 years and interest at the prime rate. First Bank's unsecured claim, estimated in the amount of $6.6 million will receive 10% of its claim. * CRIM's secured claim in the amount of $30,539 will be paid in monthly installments within 60 months from the Petition Date, including interest at the prime rate. * The class that includes the secured portion of the claim filed by each of Preferred Credit Inc. and American Enterprises International Inc. will retain its liens and will be paid pursuant to the agreement that rules their relation with the Debtor. * General unsecured priority claims related to clients deposits will be paid on the effective date. Other general unsecured claims will be paid 10% of its claim in monthly installments within 60 months from the effective date. * Insiders and holders of equity interests will not receive anything under the Plan. A full-text copy of the Debtors' Consolidated Amended Disclosure Statement and Summary of Proposed Plan of Reorganization dated March 20, 2013, is available for free at: http://bankrupt.com/misc/INTLHOMEds0320.pdf About International Home Products International Home Products, Inc., is engaged in the sale, financing of "Lifetime" cookware and other kitchenware as well as sale of account receivables in the secondary market. It is the exclusive distributor of "Lifetime" products in Puerto Rico for over 40 years. The Company filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 12-02997) on April 19, 2012. Carmen D. Conde Torres, Esq., in San Juan, P.R., serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA, serves as its accountants. The Debtor disclosed $66,155,798 and $43,350,031 in liabilities as of the Chapter 11 filing. Secured lender First-Bank Puerto Rico is represented by Manuel Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro, Colon, Mullet, Rivera & Sifre, P.S.C. On May 7, 2012, International Home's affiliate, Health Distillers International, Inc., filed a separate Chapter 11 petition (Bankr. D.P.R. Case No. 12-03574. IRACORE INTERNATIONAL: Moody's Rates New $110MM Notes 'B3' ---------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Iracore International Holdings, Inc. consisting of a B3 corporate family rating, a B3-PD probability of default rating, a B3 senior secured rating to the company's $110 million proposed notes issue and an SGL-3 speculative grade liquidity rating (indicating adequate liquidity). The outlook is stable. Proceeds from the notes issue partially finances the acquisition of Iracore by Friedman, Fleischer & Lowe partners. Ratings Rationale: Iracore's B3 CFR primarily reflects the company's considerable product and customer concentration, the potential of technological change and small size, owing to its niche focus as a manufacturer of pipe-lining systems for mine operators in the Canadian oil sands. The rating also incorporates Moody's view that Iracore's primary product is likely to remain well positioned through the near term given its proven application in critical infrastructure, established relationships with blue-chip customers and steady market share gains. Moody's expects Iracore will continue to generate strong margins and maintain relatively low levels of financial leverage, which provides some capacity to absorb potential sales volatility resulting from the project nature of demand for its products. Iracore's SGL-3 liquidity rating is supported by Moody's view that the company will remain free cash flow positive given its high operating margin and low capital expenditure requirements coupled with a lack of near term debt maturities, almost full availability under its $15 million asset backed lending (ABL) facility and good headroom to springing financial covenants. The senior secured notes will rank behind the ABL, however given the modest size of the liquidity facility and other liabilities relative to the notes there are no notching implications for the notes relative to the CFR. The stable rating outlook reflects Moody's expectation that Iracore will continue to grow its market share while maintaining favorable levels of leverage through the next 12 to 18 months. The ratings are unlikely to be upgraded unless Iracore greatly improves customer and product diversity. The ratings could be lowered if the company experienced market share erosion or if Moody's expected Debt/ EBITDA to exceed 5x on a sustainable basis through either a reduction in earnings or implementation of a more aggressive financial policy. The principal methodology used in this rating was Global Oilfield Services published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Iracore International Holdings, Inc. primarily manufactures pipe- lining systems for the oil sands mining industry. Annual revenues total roughly $100 million. IRACORE INTERNATIONAL: S&P Assigns B- CCR & Rates $110MM Notes B ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Hibbing, Minnesota-based Iracore International Holdings Inc. The outlook is stable. S&P also assigned a 'B' issue-level rating (one notch above the corporate credit rating) to Iracore's proposed $110 million senior secured notes due 2018. S&P assigned the notes a '2' recovery rating, indicating its expectation of substantial (70% to 90%) recovery in the event of a payment default. "The ratings on Iracore reflect our view of the participation in the cyclical and competitive oilfield services industry, the company's small size and scale of operations, and the limited diversity of its customers and suppliers," said Standard & Poor's credit analyst Christine Besset. S&P's ratings also reflect Iracore's growing market share in lined-pipes used for the Canadian oil sands, its strong profitability, low capital spending requirements, and moderate debt leverage. The stable outlook reflects S&P's expectation that Iracore's credit measures will remain healthy for the rating for the next two years, while maintaining adequate liquidity. S&P could revise the outlook to negative if liquidity weakens to below $10 million with no near-term remedy. Such an event could be triggered by a more aggressive dividend policy, or sudden, unexpected swings in working capital requirements. A positive rating action is currently unlikely given the company's lack of scale and customer concentration. S&P would want to see at least one additional material product line in addition to the Iracore-pipes business and a more diverse customer base before considering a positive rating action. IRWIN MORTGAGE: Can Hire Aon In Connection With IRC Stock Sale -------------------------------------------------------------- Irwin Mortgage Corporation sought and obtained approval from the U.S. Bankruptcy Court to employ Aon in connection with the IRC Stock Sale. Upon the completion of the IRC Stock Sale, the Debtor may pay Aon, without further notice or order of the Court, the fees due Aon in accordance with the Aon Agreement; and (b) shall file a report within 30 days of the payment. About Irwin Mortgage For a number of years, Irwin Mortgage Corporation, based in Dublin, Ohio, originated, purchased, sold and serviced conventional and government agency backed residential mortgage loans throughout the United States. However, in 2006 and continuing into early 2007, IMC sold substantially all of its assets, including its mortgage origination business, its mortgage servicing business, and its mortgage servicing rights portfolio, to a number of third party purchasers. As a result of those sales, IMC terminated its operations and has been winding down since 2006. Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell presides over the case. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $50 million to $100 million. The petition was signed by Fred C. Caruso, president. In its schedules, the Debtor disclosed $25,661,329 in assets and $219,353,376 in liabilities. Nick V. Cavalieri, Esq., Matthew T. Schaeffer, Esq., and Robert B. Berner, Esq., at Bailey Cavalieri LLC, serve as the Debtor's counsel. Fred C. Caruso and Development Specialists Inc. provide wind-down management services to the Debtor. JAMES RIVER: Incurs $42.1 Million Net Loss in First Quarter ----------------------------------------------------------- James River Coal Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $42.11 million on $193.30 million of total revenue for the three months ended March 31, 2013, as compared with a net loss of $15.65 million on $301.98 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.16 billion in total assets, $944.75 million in total liabilities and $215.26 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/FwtpDN About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. James River reported a net loss of $138.90 million in 2012, as compared with a net loss of $39.08 million in 2011. * * * In the Dec. 6, 2012, edition of the TCR, Moody's Investors Service downgraded James River Coal Company's Corporate Family Rating ("CFR") and Probability of Default Rating ("PDR") to Caa1 from B3. The downgrades reflects weakening credit protection metrics as a result of a very difficult environment facing coal producers in Central Appalachia and Moody's view that the company's earnings and cash flow profile will remain challenged in the near-term. As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'CCC' from 'SD' (selective default). "We raised our rating on James River Coal because we understand that the company has stopped repurchasing its debt at deep discounts, for the time being," said credit analyst Megan Johnston. K-V PHARMACEUTICAL: Conv. Noteholders to Get Shares Under New Plan ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that K-V Pharmaceutical Co. is now slated for takeover under a new reorganization plan by convertible noteholders, previously said to be "out of the money" by holders of $225 million in senior secured notes who previously intended to become the owners after bankruptcy. The report recounts that under the Chapter 11 reorganization plan originally filed in January and modified since, first-lien noteholders would have received 97 percent of the stock along with a $50 million second-lien term loan. Holders of $200 million in convertible notes were in line for 3 percent of the new stock, while general unsecured creditors were offered $1.7 million to cover $18.8 million in claims, for a predicted 9.05 percent recovery. The report relates that the disclosure statement for approval of the senior noteholder-backed plan was to have been approved last week. The disclosure hearing was pushed back while the convertible noteholders worked on replacement financing and a new plan. As a result of the delay, the $85 million in financing for the reorganization provided by senior noteholders would be in default by May 10. A group of convertible noteholders is providing $85 million in replacement financing. The noteholder-lenders are Capital Ventures International; Greywolf Capital Overseas Master Fund and an affiliate, and Kingdon Capital Management LLC. Silver Point Finance LLC serves as agent for senior noteholders in their roles as so-called DIP lenders. Silver Point, Whitebox Advisors LLC and Pioneer Investment Management Inc. among themselves owned $152 million of the $225 million in senior secured notes, according to a court filing by their lawyers in September. There will be a hearing May 7 for approval of an interim advance of $67 million of the new financing. The new loan will pay off the existing loan from Silver Point as agent financing the Chapter 11 effort. K-V will be filing a new Chapter 11 reorganization plan. The new loan and the upcoming plan together provide that the lenders will buy 8.25 million shares of new stock for $165 million. They also agree to buy any stock not purchased by other convertible noteholders under an $85 million rights offering for 30 percent of the new stock at $20 a share. Convertible noteholders will also receive 6 percent of the new stock. Rather than about 9 percent under the prior plan, general unsecured creditors will receive the lesser of 50 percent in cash or sharing in $8.5 million cash. The investors will provide another $100 million loan when K-V exits Chapter 11. The new loan requires approval of the stock-purchase agreement by May 31, filing the new plan by May 24, approval of disclosure materials by July 8, and approval of the plan in a confirmation order by Aug. 23 The senior noteholders contended in recent court filings that the convertible noteholders were "out-of-the-money." About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five members to serve in the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, represent the Creditors Committee. Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group. KIK CUSTOM: S&P Affirms 'B-' CCR & Rates US$420MM Loan 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings on Concord, Ont.-based KIK Custom Products Inc., including its 'B-' long-term corporate credit rating. The outlook is stable. Standard & Poor's assigned its 'B-' issue-level rating and '3' recovery rating to KIK's proposed US$420 million senior secured first-lien term loan due 2019. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of default. In addition, Standard & Poor's assigned its 'CCC' issue- level rating and '6' recovery rating to KIK's proposed US$220 million senior secured second-lien term loan due 2019. The '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery in the event of default. S&P understands that proceeds of the new term loans will be used to refinance existing debt. The ratings on KIK reflect Standard & Poor's view of the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile. "We base our business risk assessment on the company's weak market position, customer concentration, and participation in the mature and highly competitive North American household products and personal care industries," said Standard & Poor's credit analyst Lori Harris. "We base our financial risk assessment on a very aggressive financial policy, including a highly leveraged capital structure," Ms. Harris added. KIK is the largest contract manufacturer of consumer products and the second-largest manufacturer of bleach in North America after Clorox Co. It acquired privately held Chem Lab Products Inc., a California-based manufacturer of pool and spa care products, in 2011. The acquisition gave the company immediate entrance into the U.S pool and spa products industry, while providing for some cost-saving opportunities. The company operates under two divisions: Classic--manufacturer of private label household products and pool additives; and Custom-- contract manufacturer of national brand personal care and household products. The segments in which KIK participates, North American household products and personal care, are very mature, resulting in slow growth and limited pricing power. The stable outlook reflects Standard & Poor's belief that KIK's performance will meet S&P's expectations this year, including maintaining its market position and generating positive free cash flow. Downward pressure on the ratings could result from deterioration in the company's operations or negative free cash flow or less than a 10% cushion within the fixed charge covenant should it apply. Given the company's very high leverage, Standard & Poor's is not contemplating raising the ratings in the next year. S&P could, however, upgrade KIK if the company demonstrates sustainable strengthening in its operating performance, which results in significantly improved credit measures, including maintaining adjusted debt to EBITDA below 5x. KIK is a private company and does not release financial information publicly. LCI HOLDING: Seeks Authority to Obtain $230MM in Financing ---------------------------------------------------------- LCI Holding Company, Inc., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to enter into: (i) an engagement letter with GE Capital Markets, Inc., and Hospital Acquisition LLC, as purchaser, in connection with the Hospital Acquisition Sub I LLC $30,000,000 Senior Secured First Lien Revolving Facility; and (ii) an engagement letter with Credit Suisse Securities (USA) LLC, GECM and the Purchaser, in connection with the Hospital Acquisition Sub I LLC $200,000,000 Senior Secured First Lien Term Facility. In addition, the Debtors seek court authority to perform their obligations under the Engagement Letters, including payment of certain expenses incurred in connection with the Credit Facilities and the negotiation and documentation of the Engagement Letters and the Credit Facilities as administrative expenses in the Chapter 11 cases, without the need to file any motion or proof of claim, payable immediately without further order of the Court. Funds from the proposed financing will be used to finance the Debtors' obligations after the closing of the sale of their assets. A hearing on the request will be held on May 22, 2013, at 11:00 a.m. (ET). Objections are due May 15. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LEHMAN BROTHERS: Has Approval of LB Finance Settlement ------------------------------------------------------ Lehman Brothers Holdings Inc. won a bankruptcy judge's approval to settle Lehman Brothers Finance AG's $15.4 billion claim. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York approved the agreement, which settles Lehman's last major dispute with its former Swiss derivatives unit. Under the deal, the Swiss company agreed to cut its claim against Lehman to $942 million from $15.4 billion. It will also assign to the holding company billions of dollars of claims that it asserted against certain Lehman affiliates. In return, Lehman agreed to cut its claim against the Swiss company to $8.75 billion from $14.2 billion. It also agreed to partially subordinate its claim against Lehman Brothers Finance to the claims of the Swiss company's third-party creditors. Last month, the bankruptcy judge approved an agreement, which settles Lehman's customer claim against its brokerage arm. The settlement reduced the company's customer claim from $19.9 billion to $2.3 billion. In return, Lehman will receive a $14 billion unsecured claim against the brokerage. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Sues Intel to Recoup Collateral ------------------------------------------------ Lehman Brothers Holdings Inc. has sued Intel Corp. to recover collateral allegedly seized by the chip maker in breach of a swap agreement. Under the swap deal, Intel gave $1 billion to Lehman Brothers OTC Derivatives Inc. in exchange for 50.5 million Intel shares, to be delivered on the settlement date of Sept. 29, 2008. The derivatives unit also posted $1 billion in cash collateral to Intel. Intel terminated the deal two weeks after Lehman filed for bankruptcy protection on Sept. 15, 2008, and seized the entire $1 billion in collateral, including $2 million in interest, according to a complaint filed in U.S. Bankruptcy Court in Manhattan. "By seizing LOTC's collateral in its entirety and by failing to return the portion of LOTC's collateral that is beyond Intel's reasonable losses, Intel breached the swap agreement," Lehman said in the complaint. The company said the chip maker's losses as a result of the termination were less than $1 billion. The case is Lehman Brothers Holdings Inc., et al. v. Intel Corp., 13-01340, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Sues Syncora to Disallow Claims ------------------------------------------------ Lehman Brothers Holdings Inc. filed a lawsuit against Syncora Guarantee Inc., seeking to disallow the contingent portions of, and subordinate the remainder of, the insurance firm's claim against the company. Syncora is an insurance firm that insured residential mortgage- backed securitization trusts, including the securitization transaction known as GreenPoint Mortgage Funding Trust 2006-HE1, Home Equity Loan Asset-Backed Notes, Series 2006-HE1, which is the subject of the claim. Syncora sold insurance to GreenPoint Mortgage Funding Trust 2006- HE1 and provided a guarantee of payments to certain investors. The trust, however, suffered a decline of cash flows, which caused shortfalls in its ability to make payments to investors. As a result, the trustee U.S. Bank N.A. submitted claims to Syncora under the insurance policy it issued to the bank for amounts equal to the shortfall in payments to the investors. Syncora filed the claim, seeking amounts that it has paid to the trust as well as amounts that it may pay in the future. Through the claim, the firm seeks to have the bankruptcy court treat its present and future reimbursement claims against Lehman pari passu with the claims of the investors. Lehman lawyer, Glenn Siegel, Esq., at Dechert LLP, in New York, said the insurance firm is "directly competing" with the investors, who are the beneficiaries of the policy, over the limited proceeds of Lehman's estate. "The portion of the claim that constitutes contingent amounts should be disallowed, and any portion of the claim that is allowed should be subordinated," Mr. Siegel said in a court filing. The case is Lehman Brothers Holdings Inc. v. Syncora Guarantee Inc., 13-01341, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Wins OK for Sale of LB Rose Properties ------------------------------------------------------- Lehman Brothers Holdings Inc. received the green light from the U.S. Bankruptcy Court in Manhattan to sell Debtor LB Rose Ranch LLC's interests in a property located in Glenwood Springs, Colorado. The property is a 225-acre unfinished resort community, which consists of a residential development, and recreation facilities including a golf course. LB Rose took ownership of the property before it filed for bankruptcy protection through the exercise of its remedies as a secured lender. The sale is part of Lehman's effort to raise cash, and begin distributions to LB Rose's creditors. The Lehman unit has only about $1 million in available cash as of April 9, according to court filings. Interested buyers are required to submit bids for the property to Lehman and Racebrook Marketing Concepts LLC. The winning bidder has 10 business days to execute a sale agreement and 30 days to close. Lehman will proceed with the next highest offer in case the winning bidder fails to close the deal. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Weil Gotshal Files 41st Report on Settlements -------------------------------------------------------------- Weil Gotshal & Manges LLP, Lehman Brothers' legal counsel, filed a status report on the settlement of claims it negotiated through the alternative dispute resolution process. The report noted that since the filing of the 40th status report, Lehman has served two additional ADR notices, bringing the total number of notices served to 285. The company also reached settlements with counterparties in 11 ADR matters, four as a result of mediation. Upon closing of those settlements, the company will recover a total of $1,496,783,442. Settlements have now been reached in 255 ADR matters involving 348 counterparties. As of April 24, 99 of the 104 ADR matters that reached the mediation stage and concluded were settled through mediation. Only five mediations were terminated without settlement. Eight more mediations are scheduled to be conducted for the period April 24 to June 5, 2013. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LLS AMERICA: Trustee Can File Amended Complaint v. Ken Phillips --------------------------------------------------------------- The bankruptcy court authorized Bruce P. Kreigman, as Chapter 11 trustee of LLS America LLC, to amend his complaint against Ken Phillips, Adv. Proc. No. 11-80127-PWC11 (Bankr. E.D.Wash.), a copy of which decision is available at http://is.gd/zh24iSfrom Leagle.com. The proposed amended complaint contains the same causes of action -- the recovery of transfers made by a debtor allegedly engaged in a Ponzi scheme from the initial transferee -- but seeks to add an additional party, Dr. Ken Phillips, Inc., a corporation which is in some unknown manner related to or associated with the existing defendant Dr. Ken Phillips. The basis for doing so is that the individual defendant now alleges that the transfers sought to be recovered by the plaintiff from the defendant were not in fact received by the defendant. Rather, they were received by the corporation. Additionally, the defendant alleges that the source of the funds initially transferred to the bankruptcy estate was the corporation rather than the defendant . The plaintiff in the proposed amended complaint not only adds the corporation as a party defendant, but further requests that the corporate form of the additional corporate defendant be disregarded for the purposes of the litigation. Bankruptcy Judge Patricia William however makes clear that the amendment is without prejudice to the defendant corporation or the individual defendant later seeking reconsideration of the order within 60 days. Any reconsideration should be based on whatever relevant evidence is elicited through discovery within the next 60 days. About Little Loan Shoppe LLS America LLC, doing business as Little Loan Shoppe, operated an online payday loan business. Affiliate Team Spirit America provided the manpower, management and equipment for Little Loan Shoppe. The companies are among a multitude of Canadian and American business entities owned and operated by Doris E. Nelson, a/k/a Dee Nelson, a/k/a Dee Foster. Investors claimed Ms. Nelson operated a Ponzi scheme. Ms. Nelson allegedly told investors they could earn as much as 60% on money her companies used to make payday loans to consumers. American and Canadian investors bought notes worth US$29 million and another C$26,000,000. However, the investors received no payments after March 2009. One investor group placed a related company, LLS-A LLC, into bankruptcy in July 10, 2009. LLS America LLC filed for bankruptcy (Bankr. D. Nev. Case No. 09-23021) on July 21, 2009, before Judge Linda B. Riegle. Gregory E. Garman, Esq., at Gordon Silver, served as the Debtor's counsel. In its petition, the Debtor disclosed $2,661,584 in assets and $24,013,837 in debts. The petition was signed by Ralph Gamble, CEO of the Company. The case was subsequently moved to Washington state (Bankr. E.D. Wash. Case No. 09-06194). Charles Hall was appointed as examiner in the case. LPL HOLDINGS: S&P Assigns 'BB-' Rating to $1.084BB Secured Loan --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' senior secured debt rating on LPL Holdings Inc.'s proposed $1.084 billion term loan B. At the same time, S&P affirmed all of its other ratings on LPL, including its 'BB-' long-term issuer credit rating. The rating outlook remains stable. "We affirmed the ratings on LPL because we believe its financial profile will remain supportive of the rating, despite the expectation that total debt will increase by $236 million after the prepayment of term loan A amortization," said Standard & Poor's credit analyst Robert Hoban. This is because S&P expects that by year-end 2013 the firm's debt-to-adjusted EBITDA ratio will be below 3.5x. S&P continues to consider debt to adjusted EBITDA above 3.5x indicative of negative ratings pressure. S&P also expects adjusted EBITDA to interest expense coverage will remain good for the rating at more than 7.5x. Underlying these expectations for leverage and coverage is S&P's base-case assumption that operating performance will support mid- to high- single-digit percentage growth in adjusted EBITDA over the next few years. The firm's debt service capacity will benefit from the planned prepayment of its term loan A's steep quarterly amortization, the elimination of which will offset most, if not all, of the increase in interest expense from the additional debt. "We view the reversal of the firm's previous debt reduction track record negatively because we believe it calls into question management's commitment to improving the financial profile. Further, because of management's recent shareholder spending and LPL's former private equity sponsor's large ownership stake, we expect that LPL will use at least some of the debt proceeds to fund additional stock buybacks or dividends. On the positive side, we believe that this funding should enable the firm to manage the additional shareholder spending without compromising its liquidity. Specifically, we expect management will maintain its goal of holding a minimum of $200 million of cash on the balance sheet." The stable outlook reflects S&P's expectation that LPL will at least modestly improve its operating performance and maintain adequate liquidity. S&P expects debt to interest expense coverage to remain in excess of 7.5x and leverage to improve with debt to adjusted EBITDA peaking around 3.5x and then declining steadily. The outlook incorporates S&P's expectation that the firm will remain very shareholder friendly as long as its former private equity sponsors continues to hold their large positions in the firm. S&P also expects the company to continue to operate with very modest credit and market risk exposure and to improve its risk-management infrastructure. S&P could lower its ratings on LPL if debt service coverage or debt to EBITDA remain outside its parameters at or after year-end 2013 or if on-balance-sheet cash falls significantly below $200 million. The firm's aggressive financial management, particularly high debt leverage, lack of tangible equity, and what S&P considers an excessive shareholder focus, limits the potential for an upgrade. MAGNETATION LLC: Moody's Assigns B3 CFR & Rates $325MM Note B3 -------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and B3-PD probability of default rating to Magnetation LLC. In addition, Moody's assigned a B3 rating to the company's proposed $325 million senior secured notes due 2020. The proceeds from the proposed note offering will be used to repay the company's outstanding $50 million term loan A, establish a $46 million interest reserve account; fund the development of an iron ore pellet plant and an iron reclamation plant. A stable rating outlook was assigned. The following ratings were assigned in this rating action: Corporate Family Rating B3; Probability of Default Rating B3-PD; $325 million senior secured notes B3 (LGD4, 53%); This is a newly initiated rating and is Moody's first press release on this issuer. Ratings Rationale: The B3 corporate family rating reflects Magnetation's weak pro forma credit metrics, short operating history, small scale and low level of revenue and EBITDA, the risks associated with a start-up operation based on a relatively new technology, lack of end-market diversification and high risk customer base. The company is expected to have only two customers and both are either financially weak (AK Steel - B2 Negative) or have significant unresolved financial obligations (AHMSA - NR). The company is also predominantly focused on the volatile and recently weak steel industry and has little exposure to other end-markets. Magnetation's ratings are supported by the company's strong profit margins, attractive off-take contracts, adequate pro forma liquidity profile and lack of near term debt maturities once the note offering and new credit facility are completed. The company plans to establish a $50 million senior secured revolving credit facility due 2018. Magnetation's pro forma credit metrics will be very weak since the company is mostly in a start-up phase and has limited revenue and EBITDA. The company generated revenue of only $70 million and adjusted EBITDA of just $33 million in the year ended December 31, 2012. The company is expected to generate similar results in 2013 since it can only produce limited quantities of iron concentrate until they construct a pellet plant and a third and more sizeable reclamation plant. Therefore, the company is expected to have an elevated pro forma leverage ratio of approximately 9.0x and a relatively weak interest coverage of ratio of about 1.2x after the issuance of the notes. In addition, the company is expected to have negative free cash flow until the pellet plant and reclamation plant projects are complete. The remaining cost of these two projects is estimated at approximately $450 million and is expected to be completed by the end of 2015. The company is targeting a minimum liquidity level of approximately $50 million throughout its construction life cycle. They expect the proceeds from the $325 million note offering, $150 million of additional equity investments by AK Steel, cash flow from operations and availability on the new revolver to enable it to maintain ample liquidity. They have no plans to draw on the revolver during the construction of the pellet and iron reclamation plants. The stable outlook presumes the company successfully completes the construction of the new iron ore pellet plant on time and within budget and that operating results are stable or modestly improved over the next 12 to 18 months. The ratings are unlikely to experience upward pressure in the short term since the company's revenue, EBITDA and credit metrics are not expected to significantly improve until 2015 when construction of the pellet plant is complete. However, an increase in the interest coverage ratio (EBIT/Interest) to more than 2.5x or a decline in the leverage ratio (Debt/EBITDA) below 5.0x could lead to an upgrade. Negative rating pressure could develop if operating results deteriorate, the timing of the start-up of the pellet plant is delayed or the construction runs well over budget resulting in weaker than expected credit metrics. This would include an interest coverage ratio (EBIT/Interest) below 1.0x and a leverage ratio above 8.0x. A significant reduction in borrowing availability or liquidity could also result in a downgrade. The principal methodology used in rating Magnetation LLC was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Grand Rapids, Minnesota, Magnetation LLC is a joint venture between Magnetation Inc. (50.1% ownership) and AK Steel Corporation (49.9% ownership) that reclaims iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins located on the Mesabi Iron Range. The joint venture currently owns and operates two reclamation plants located in Keewatin and Taconite, MN, which produce iron ore concentrate from iron ore tailings. The company expects to construct a 3 million metric ton per year iron ore pellet plant in Reynolds, Indiana and an additional concentrate reclamation plant located near Coleraine, MN. The joint venture has an off-take agreement with Altos Hornos de M�xico, S.A.B. de C.V. (AHMSA) to sell up to 637,000 dry metric tons of iron concentrate per annum and eventually plans to sell approximately 3 million tons of iron pellets to AK Steel Corporation. The company generated approximately $70 million in revenue for the trailing 12-month period ended December 31, 2012. MASTRO'S RESTAURANTS: S&P Raises Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Woodland Hills, California-based Mastro's Restaurants LLC to 'B-' from 'SD'. At the same time, S&P affirmed its 'B-' issue-level rating on the company's $102 million senior secured notes due 2017. The '4' recovery rating remains unchanged. The rating outlook is stable. "The rating action follows our review of Mastro's business and financial risk profiles after the company settled the pending lawsuits with the original seller of the company and completed the exchange of its approximately $42 million of seller notes for equity," said credit analyst Mariola Borysiak. "We assess the company's business risk profile as "vulnerable" and its financial risk profile as "highly leveraged". In addition, we now view Mastro's liquidity profile as "adequate". We believe these assessments will remain unchanged over the next year." The stable outlook reflects the company's improving profitability and S&P's expectations for modest revenue and EBITDA growth over the next 12 months. It also reflects S&P's expectations that Mastro's will maintain adequate liquidity and modestly improve its credit measures. S&P could lower its ratings if increasing competition, a weak economic recovery, and decreasing customer spending lead to restrained profitability, resulting in deterioration of liquidity such that the company's sources would not be sufficient to cover its uses for the next 12 months. Although unlikely in the next 12 months, S&P could upgrade Mastro's if leverage declines to less than 6x, which would result from significant EBITDA growth, as S&P do not expect any debt reduction in the near future. MAUI LAND: Incurs $1.81 Million Net Loss in First Quarter --------------------------------------------------------- Maui Land & Pineapple Company, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.81 million on $3.35 million of total operating revenues for the three months ended March 31, 2013, as compared with a net loss of $244,000 on $5.31 million of total operating revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $60.84 million in total assets, $96.68 million in total liabilities and a $35.84 million stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/frySSJ About Maui Land & Pineapple Co. Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. Maui Land incurred a net loss of $4.60 million in 2012, as compared with net income of $5.07 million in 2011. Deloitte & Touche LLP, in Honolulu, Hawaii, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring negative cash flows from operations and deficiency in stockholders' equity which raise substantial doubt about the Company's ability to continue as a going concern. MEHENDI LLC: Case Summary & 4 Unsecured Creditors ------------------------------------------------- Debtor: Mehendi, LLC fdba Baymont Inn & Suites dba Lake Charles Inn & Suites 109 E. Frontage Road Iowa, LA 70647 Bankruptcy Case No.: 13-20395 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Western District of Louisiana (Lake Charles) Judge: Robert Summerhays Debtor's Counsel: Wade N. Kelly, Esq. LAW OFFICE OF CHRISTIAN D. CHESSON 1777 Ryan Street P.O. Box 2065 Lake Charles, LA 70601 Tel: (337) 433-0234 Fax: (337) 433-1274 E-mail: wnkellylaw@yahoo.com Scheduled Assets: $1,100,000 Scheduled Liabilities: $2,269,170 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/lawb13-20395.pdf The petition was signed by Girish Patel, managing member. METALS USA: Moody's Withdraws Ratings After Facility Termination ---------------------------------------------------------------- Moody's Investors Service has withdrawn Metals USA Inc.'s B1 Corporate Family and B1-PD Probability of Default ratings. Moody's has withdrawn the ratings following the acquisition of Reliance Steel & Aluminum, which closed on April 15, 2013. The B2 rating on Metal USA's secured term loan facility has been withdrawn since the facility has been terminated. This concludes the review for upgrade commenced on February 6, 2013 when Reliance agreed to acquire Metals USA. The following ratings were withdrawn: Corporate Family Rating at B1; Probability of Default at B1-PD; $225 million term loan at B2 (LGD5, 73%); Speculative grade liquidity rating at SGL-3 The last rating action was implemented on February 6, 2013, when Moody's placed the B1 corporate family rating of Metals USA Inc. under review for possible upgrade, following the announcement of Reliance's agreement to acquire Metals USA for approximately $1.2 billion in cash. MISSION NEW ENERGY: Cash at A$113,000 as of March 31 ---------------------------------------------------- Mission New Energy Limited filed s quarterly report with the U.S. Securities and Exchange Commission disclosing that it had A$113,000 in cash at March 31, 2013. A copy of the report is available for free at http://is.gd/oOGQ4o About Mission NewEnergy Based in Subiaco, Western Australia, Mission New Energy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred operating cash outflows of A$4.9 million during the year ended June 30, 2012, and, as of that date, the consolidated entity's total liabilities exceeded its total assets by A$24.4 million. The Company's consolidated balance sheet at Dec. 31, 2012, showed $7.05 million in total assets, $27.29 million in total liabilities and a $20.24 million net deficit. MONTANA ELECTRIC: Trustee Asks Court to Value U.S. Bank's Claim --------------------------------------------------------------- Lee A. Freeman, the Chapter 11 trustee for debtor Southern Montana Electric Generation and Transmission Cooperative, Inc., asks the U.S. Bankruptcy Court for the District of Montana to determine the value of the a claim secured by a lien on property of the Debtor's estate. U.S. Bank National Association as Indenture Trustee, and certain holders consisting of Prudential Insurance Company of America, Universal Prudential Arizona Reinsurance Company, Prudential Investment Management as successor in interest to Forethought Life Insurance Company, and Modern Woodmen of America, filed a claim (Claim No. 69) allegedly secured by collateral valued at $5,600,000. In support of the value, the Trustee submitted the expert reports. In further support of the value, the Trustee relies on the case captioned Associates Commercial Corp. v. Rash, 520 U.S. 953, 960- 965 (1997). In Rash, the Supreme Court held that where a debtor intends to retain collateral rather than surrendering it to a secured creditor, for purposes of cram down, the value of the collateral is the replacement-value of the collateral, which the Court defined as "the price a willing buyer in the debtor's trade, business, or situation would pay to obtain like property from a willing seller of like age and condition." 520 U.S. at 959, n. 2; see also, 520 U.S. at 960. In other words, even though the "proposed disposition or use" of collateral under Section 506(a)(1) of the Bankruptcy Code may be its continued retention and use by the debtor, the concept of "replacement value" nonetheless posits an implied or hypothetical sale of the collateral. Indeed, the concept of value is meaningless outside the context of a real or hypothetical sale and purchase. Although Rash was a case under Chapter 13, its holding applies to cases under Chapter 11 as well. In re Hand, Case No. 08-61264-11, Bankr. D. Mont., May 5, 2009. Thus, with respect to the value of the Wholesale Power Contracts between the Debtor and its members, the relevant inquiry is: "What price would a willing buyer, such as another generation and transmission electric cooperative, pay to a willing seller to obtain contracts with like terms and conditions?" The Debtor's currently in force Wholesale Power Contracts, that is, the contracts that were executed in 2007, provide that the rates thereunder will provide the seller with "revenues which shall be sufficient, but only sufficient, with revenues of [the Debtor] from all other sources, to meet: the costs of operation and maintenance [of any plant and related facilities]; the cost of any electric energy and related services purchased for resale by [the Debtor]; the cost of transmission service; the payments on account of principal and interest on all indebtedness of [the Debtor]; and to provide for the establishment and maintenance of reasonable reserves." In other words, the Debtor cannot make a profit from the Wholesale Power Contracts with its members. Even the "reasonable reserves" allowed for under the contracts is not a profit, but remains the property of the members as a component of their "patronage capital." So, then, how much would another "G & T" cooperative, for example, Central Montana Electric Power Cooperative, pay for the Debtor's Wholesale Power Contracts? The answer is "nothing," the Chapter 11 Trustee tells the Court, because a buyer of the contracts cannot make a profit or margin off of them. The Chapter 11 Trustee says the answer would be the same if the would-be willing buyer were a for-profit electric utility, for example, NorthWestern Energy. Northwestern Energy could charge rates that were sufficient, but only sufficient, to perform the contracts and nothing more, the Chapter 11 notes. Under these circumstances, a for-profit electric utility would not pay a sou for any of the Debtor's Wholesale Power Contracts. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. MONTANA ELECTRIC: Trustee Wants Cash Collateral Use Extended ------------------------------------------------------------ Lee A. Freeman, the Chapter 11 trustee for Southern Montana Electric Generation and Transmission Cooperative, Inc., asks the U.S. Bankruptcy Court for the District of Montana to approve a stipulation entered into with U.S. Bank National Association agreeing to further extend the termination of the Final Cash Collateral Order until Aug. 31, 2013. The Chapter 11 Trustee says approval of the stipulation is necessary because he continues to have an immediate and critical need to use the Cash Collateral to operate the business and to effectuate a reorganization of the Debtor's business. Without the use of the Cash Collateral, the Chapter 11 Trustee will not have sufficient liquidity to be able to continue to operate the Debtor's business and pursue reorganization efforts. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. MPM TECHNOLOGIES: Has $500,000 Purchase Agreement with Investors --------------------------------------------------------------- MPM Technologies, Inc., entered into a purchase agreement with certain accredited investors to issue and sell convertible promissory notes to those accredited investors, representing an aggregate principal amount of up to $500,000. As of May 2, 2013, $100,000 in Notes have been purchased by investors. The closing of the initial $100,000 in Notes occurred on May 1, 2013. The principal balance of each Note is convertible into common stock of the Company, at the election of the Holder, beginning 24 months after the issuance of the Note. The conversion price under each note is equal to the market price multiplied by 75 percent. Each Note has a term of up to two years. The Company has the right to prepay the principal and interest, if any, under the Note without penalty. Interest on each Note accrues at a rate of 9 percent per annum. Each Note contains customary default provisions, including provisions for potential acceleration of the Note and automatic conversion of the principal amount and accrued interest, if any, of the Note into common stock of the Company at a Default Conversion Price. The Notes were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The offering was made to certain "accredited investors". Based upon the May 1, 2013, market price of $0.245 per share and the 25 percent discount, the maximum number of shares convertible under the Notes is approximately 2,721,089 shares, and the number of shares convertible under the $100,000 aggregate principal amount of Notes purchased by the Initial Investors is approximately 544,218 shares. About MPM Technologies Headquartered in Parsippany, N.J., MPM Technologies Inc. (OTC BB: MPML) -- http://www.mpmtech.com/-- operates through its three wholly owned subsidiaries: AirPol Inc., NuPower Inc. and MPM Mining Inc. During the year ended Dec. 31, 2007, AirPol was the only revenue generating entity. AirPol operates in the air pollution control industry. It sells air pollution control systems to companies in the United States and worldwide. The company through its wholly owned subsidiary NuPower is engaged in the development and commercialization of a waste-to-energy process known as Skygas. These efforts are through NuPower's participation in NuPower Partnership, in which MPM has a 58.21% partnership interest. NuPower Partnership owns 85% of the Skygas Venture. In addition to its partnership interest through NuPower Inc., MPM also owns 15% of the Venture. The Company's balance sheet at Sept. 30, 2010, showed $1.17 million in total assets, $15.32 million in total liabilities, all current, and a stockholders' deficit of $14.15 million. The Company recorded a net loss of $1.56 million for 2009 from a net loss of $1.72 million for 2008. The Company has not filed its periodic reports after the quarterly report ending Sept. 30, 2010. MUSCLEPHARM CORP: Richard Estalella Appointed as COO ---------------------------------------------------- The Board of Directors of MusclePharm Corporation appointed Mr. Richard Estalella as Chief Operating Officer. Mr. Estalella, 51, served as Senior Vice President of Operations at Arbonne International, LLC, since 2005. Mr. Estalella was instrumental in Arbonne's expansion operations and distribution upgrades and was responsible for all warehouse and distribution facilities, facilities maintenance departments and Customer Service. Previously, between 1998 and 2005, he owned a consulting business specializing in retail, operations, warehousing and distribution. Prior to that, Mr. Estalella served as Senior Vice President of Warehouse Operations for Office Depot between 1987 and 1998 and established many of its retail markets, along with its nationwide distribution center network also helped grow it into a $9 billion company. Pursuant to the offer letter extended to Mr. Estalella dated April 9, 2013, and amended on April 30, 2013, Mr. Estalella will serve as the Company's Chief Operating Officer for a term of three years. Mr. Estalella will be entitled to a base salary of $250,000 annually and a cash bonus of up to $250,000 for 2013 based on criteria and thresholds of EBITDA and other measures to be determined by the Board or the Compensation Committee of the Board in line with the Company's bonus structure for other executive officers. Mr. Estalella will also receive a grant of 50,000 shares of the Company's common stock or options to purchase 50,000 shares of the Company's common stock (subject to vesting) which plan is currently being reviewed by an independent third party to optimize both Mr. Estalella and the Company's tax and accounting position. In addition, Mr. Estalella will also be entitled to a relocation reimbursement of up to $50,000. There is no family relationship between Mr. Estalella and any of our other officers and directors. There are no understandings or arrangements between Mr. Estalella and any other person pursuant to which Mr. Estalella was selected as an officer. There has not been any transaction or currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which Mr. Estalella had or will have a direct or indirect material interest since the beginning of the Company's last fiscal year. About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. The Company reported a net loss of $23.28 million in 2011, compared with a net loss of $19.56 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $7.81 million in total assets, $15.10 million in total liabilities, and a $7.29 million total stockholders' deficit. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $23,280,950 and net cash used in operations of $5,801,761 for the year ended Dec. 31, 2011; and has a working capital deficit of $13,693,267, and a stockholders' deficit of $12,971,212 at Dec. 31, 2011. NECH LLC: US Trustee Balks at Plan Outline; Hearing Tomorrow ------------------------------------------------------------ The U.S. Trustee objects to the disclosure statement explaining Nech, LLC's proposed Chapter 11 Plan of Reorganization complaining that there is no adequate information relating to the Debtor's financial status, there are inaccurate or inconsistent information, and some provisions in the Disclosure Statement are not in the Plan. Specifically, the U.S. Trustee complains that the Debtor has not timely filed its monthly operating reports for the period ending March 2013. The U.S. Trustee asserts that without the monthly operating reports, it is impossible to determine whether the Debtor's cash projections stated in the Plan is correct. Judge Richard M. Neiter of the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, will convene a hearing to consider the adequacy of the Disclosure Statement on May 9, 2013, at 2:00 p.m. A status conference hearing will also be held on the same date. As previously reported by The Troubled Company Reporter, the Debtor's Plan restructures the Debtor's debt with its two secured creditors: Bank of America, N.A., and the Los Angeles County Treasurer and Tax Collector. The Debtor's loan with BofA will be paid fully within next 30 years with a 6% fixed interest rate. The Debtor will pay off its debt with the Los Angeles Treasurer and Tax Collector within the next 5 years with 6% interest. General unsecured creditors are classified into two: Class 6(a) and Class 6(b). Class 6(a) is a creditor whose allowed claim is $1,000 or less or who elects to reduce its allowed claim to $1,000, will receive a single payment equal to 100% of its allowed claim. Class 6(b) creditors are other general unsecured creditors who will be paid 0% of their allowed claims. About NECH LLC Baldwin Park, California-based NECH, LLC, filed its Chapter 11 petition on Aug. 12, 2012, in the U.S. Bankruptcy Court Central District of California (Los Angeles), with Case No. 12-39607, under Judge Richard M. Neiter. NECH disclosed $9,836,584 in assets and $286,628,147 in liabilities. Bank of America, N.A., which holds a $283,790,245 claim, is the largest unsecured creditor. NEW CENTURY TRS: Court Rejects Lamour's 2nd Disclosure Request -------------------------------------------------------------- In the chapter 11 case of New Century TRS Holdings, Inc., Bankruptcy Judge Kevin J. Carey denied Annette Lamour's "2nd Motion Demand for Validation of Subscribed Oaths of Office and Bonds for all Public and Private Officials (All Official Identifying Oaths and Bonds for Counselors, the Trustee and the Judge Carey) Per Title 28 U.S.C. Sec. 453, U.S.C. 5 Sec. 3331, The Delaware Constitution IV (to be Submitted with 3 days of Court Receipt 5PM; Challenge Jurisdiction of the Court (Federal Rules of Civil Procedure 60); Motion to Subpoena the Records, Contracts, Purchase and Sale of the Lamour Property; 2nd Motion to Invoke the Rule 2019". The Trustee for New Century Liquidating Trust objected to Ms. Lamour's Second Disclosure Motion. A copy of Judge Carey's April 30, 2013 Memorandum Order is available at http://is.gd/DykCitfrom Leagle.com. Ms. Lamour has initiated other contested matters before the Delaware bankruptcy court in the Debtors' case. The first matter involved her claim aginst Debtor New Century Mortgage Corporation. After the claim was disallowed due to her non-appearance at hearings, Ms. Lamour filed a first request for disclosure and a separate request for "bonds and oaths of office." The request was denied due to Ms. Lamour's lack of standing to pursue them. The second request for disclosure seeks the same relief as in the First Disclosure Motions, and adds an "objection to jurisdiction" and a "motion to subpoena" certain documents. In his April 30 decision, Judge Carey reiterates that Ms. Lamour is not a creditor of the Debtors and has no standing to pursue her second request for disclosure. The judge also notes that Ms. Lamour's discovery request is not related to any ongoing litigation as the Claim Litigation is complete. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- was a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company was among firms hit by the collapse of the subprime mortgage business industry in 2006. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they disclosed total assets of $36,276,815 and total debts of $102,503,950. The Company sold its assets in transactions approved by the Bankruptcy Court. The Bankruptcy Court confirmed the Second Amended Joint Chapter 11 Plan of Liquidation of the Debtors and the Official Committee of Unsecured Creditors on July 15, 2008, which became effective on Aug. 1, 2008. An appeal was taken and, on July 16, 2009, District Judge Sue Robinson issued a Memorandum Opinion reversing the Confirmation Order. On July 27, 2009, the Bankruptcy Court entered an Order Granting Motion of the Trustee for an Order Preserving the Status Quo Including Maintenance of Alan M. Jacobs as Liquidating Trustee, Plan Administrator and Sole Officer and Director of the Debtors, Pending Entry of a Final Order Consistent with the District Court's Memorandum Opinion. On Nov. 20, 2009, the Court entered an Order confirming the Modified Second Amended Joint Chapter 11 Plan of Liquidation. The Modified Plan adopted, ratified and confirmed the New Century Liquidating Trust Agreement, dated as of Aug. 1, 2008, which created the New Century Liquidating Trust and appointed Alan M. Jacobs as Liquidating Trustee of New Century Liquidating Trust and Plan Administrator of New Century Warehouse Corporation. NEWLAND INT'L: Taps Epiq as Claims and Balloting Agent ------------------------------------------------------ Newland International Properties Corp. sought and obtained approval from the Bankruptcy Court in Manhattan to hire Epiq Bankruptcy Solutions LLC. The Debtor has a pending application to also hire Epiq as voting and tabulation agent. The Debtor has not yet filed its schedules of assets and liabilities, and is seeking a waiver of such filing in the event that the Plan becomes effective within 62 days of the Petition Date. The Debtor anticipates that there will be in excess of 1,000 entities to be noticed, the majority of whom are located outside of the United States. In view of the number and location of anticipated claimants, the Debtor submits that the appointment of a claims and noticing agent is both necessary and in the best interests of both the Debtor's estate and its creditors. Prior to the Petition Date, the Debtor commenced the solicitation of votes with respect to the Prepackaged Plan of Reorganization for the Debtor under Chapter 11 of the Bankruptcy Code, dated March 29, 2013. Due to the administrative complexity of the voting process where, as here, votes on a plan of reorganization have been solicited from holders of public securities, the Debtor believes that it requires the assistance of Epiq to perform balloting and tabulation duties as well as other administrative duties. As claims agent, Epiq will charge the Debtors at these discounted rates: Position Hourly Rate -------- ----------- Clerical $30 to $45 Case Manager $60 to $95 IT/ Programming $70 to $135 Senior Case Manager / Consultant $100 to $140 Senior Consultant $160 to $195 For its noticing services, Epiq will charge $50 per 1,000 e-mails, and $0.10 per page for facsimile noticing. For database maintenance, the firm will charge $0.10 per record per month, with fees for the first three months waived. For online claim filing services, Epiq will charge $600 per 100 claims filed. For online claim filing, the firm will charge $300 per 100 claims filed. Epiq's call center operator will charge $75 per hour with the first $5,000 of charges waived and its communication counselor will charge $250 per hour. For its solicitation and balloting services, Epiq's executive vice president will charge $290 per hour, its vice president, director of solicitation will charge $250 per hour, and other associates will charge at standard hourly rates and noticing fees. About Newland International Newland International Properties Corp., a unit of Panama-based Ocean Point Development Corp. that developed luxury hotel and condominium known as the "Trump Ocean Club International Hotel & Tower," located in Panama City, Panama, has sought Chapter 11 protection in New York with a bankruptcy exit plan that would further restructure $220 million secured notes used to finance the project. Newland, which filed the bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11396) in Manhattan on April 30, 2012, said the Trump Ocean Club is a multi-use 69-floor luxury tower overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominium, a limited number of offices and premier leisure amenities. The Trump Ocean Club is located on the Punta Pacifica Peninsula -- one of the most exclusive neighborhoods in Panama City. Newland tapped Gibson, Dunn & Crutcher, LLP, as bankruptcy counsel; Adames, Duran, Alfaro & Lopez as Panamanian counsel; Epiq Bankruptcy Solutions, LLC, as claims and notice agent and tabulation agent; and Gapstone, LLC as financial advisor. The Debtor estimated assets and debts of $100 million to $500 million. NEWLAND INT'L: Final Cash Collateral Hearing on May 17 ------------------------------------------------------ Newland International Properties Corp. early this month obtained interim approval to use cash collateral from the Petition Date until May 17, 2013. The bankruptcy judge will convene a hearing on May 17 at 10:00 a.m. to consider entry of a final order with respect to the use of cash collateral. The Debtor's prepetition capital structure is comprised of senior secured notes relating to the financing and development of the Trump Ocean Club and certain other related obligations. On Nov. 7, 2007, the Debtor entered into that certain indenture, dated as of Nov. 7, 2007, as amended by and among the Debtor and HSBC Bank USA, N.A., as trustee and HSBC Investment Corporation (Panama) as co-trustee, providing for the issuance of $220,000,000 in Senior Secured Notes due 2014. Under the Debtor's prepackaged plan, the noteholders will receive new notes that reschedule the Debtor's principal payment obligations to more closely align such obligations with the cash flows expectations. The prepetition noteholders that overwhelming voted to accept the prepackaged plan has also expressly consented to the Debtor's use of cash collateral. The Debtor said it does not have sufficient available sources of working capital and financing to carry on the operation of its business without the use of the Cash Collateral. The Debtor seeks to operate its business for the benefit of all constituents solely with cash generated from its assets. For the Debtor to use the cash collateral, the U.S. Bankruptcy Code requires that it either receive consent to do so or, alternatively, provide prepetition lienholders holding an interest in the Cash Collateral with "adequate protection." The Debtor noted that Panamanian courts may not recognize any foreign orders that affect property located in Panama. The cash collateral is located in bank accounts maintained in New York and in Panama. While the Debtor is seeking to provide adequate protection to the prepetition noteholders in the form of replacement liens on all of the Debtor's assets, including assets located in Panama, such replacement liens may, therefore, not be enforceable in Panama as a practical matter. The Debtor has sought and obtained the consent of the prepetition noteholders holding greater than a majority of the outstanding principal amount of the prepetition notes to use cash collateral securing such notes without providing adequate protection with respect thereto other than the replacement liens and superpriority administrative expense claims pursuant to 11 U.S.C. Sec. 507(b) and cash payment for budgeted, reasonable fees and expenses of the trustee and its professionals on a monthly basis. The prepetition noteholders also have directed the trustees for the notes to (i) not object to (or support any objection to) the use of the cash collateral, and (ii) not independently file a motion or otherwise seek adequate protection with respect to the use of the cash collateral. About Newland International Newland International Properties Corp., a unit of Panama-based Ocean Point Development Corp. that developed luxury hotel and condominium known as the "Trump Ocean Club International Hotel & Tower," located in Panama City, Panama, has sought Chapter 11 protection in New York with a bankruptcy exit plan that would further restructure $220 million secured notes used to finance the project. Newland, which filed the bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11396) in Manhattan on April 30, 2012, said the Trump Ocean Club is a multi-use 69-floor luxury tower overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominium, a limited number of offices and premier leisure amenities. The Trump Ocean Club is located on the Punta Pacifica Peninsula -- one of the most exclusive neighborhoods in Panama City. Newland tapped Gibson, Dunn & Crutcher, LLP, as bankruptcy counsel; Adames, Duran, Alfaro & Lopez as Panamanian counsel; Epiq Bankruptcy Solutions, LLC, as claims and notice agent and tabulation agent; and Gapstone, LLC as financial advisor. The Debtor estimated assets and debts of $100 million to $500 million. NEWLAND INT'L: Proposes Gapstone as Financial Advisor ----------------------------------------------------- Newland International Properties Corp. seeks approval from a bankruptcy judge in New York to hire Gapstone LLC as financial advisor nunc pro tunc to the Petition Date. Founded in 2008, Gapstone has extensive experience in, and an excellent reputation for high-quality financial advisory and investment banking services to companies and large-scale projects in complex financing transactions. Gapstone will provide a broad range of necessary financial advisory services deemed appropriate and feasible in order to advise the Debtor in the course of the Chapter 11 case. Gapstone will be paid on a fixed success fee basis. The Engagement Agreement provides that upon consummation of the Debtor's prepackaged plan, Gapstone would earn a Debt Re- Acquisition Fee equal to 2.0% of the total face value of Client Debt that is subject to acquisition, exchange, rescheduling, or cancellation; provided that, in connection with any court ordered bankruptcy plan of reorganization including but not limited to a prepackaged or pre-negotiated plan, the lesser of (i) 2.0% of the total face value of Client Debt that is subject to acquisition, exchange, rescheduling, or cancellation and (ii) $4,000,000. Because the Debtor is seeking approval of the fee and expense structure under Section 328(a) of the Bankruptcy Code, the Debtor believes that Gapstone's compensation should not be subject to any additional standard of review under Section 330 of the Bankruptcy Code. A hearing on the application is slated for May 17. About Newland International Newland International Properties Corp., a unit of Panama-based Ocean Point Development Corp. that developed luxury hotel and condominium known as the "Trump Ocean Club International Hotel & Tower," located in Panama City, Panama, has sought Chapter 11 protection in New York with a bankruptcy exit plan that would further restructure $220 million secured notes used to finance the project. Newland, which filed the bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11396) in Manhattan on April 30, 2012, said the Trump Ocean Club is a multi-use 69-floor luxury tower overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominium, a limited number of offices and premier leisure amenities. The Trump Ocean Club is located on the Punta Pacifica Peninsula -- one of the most exclusive neighborhoods in Panama City. Newland tapped Gibson, Dunn & Crutcher, LLP, as bankruptcy counsel; Adames, Duran, Alfaro & Lopez as Panamanian counsel; Epiq Bankruptcy Solutions, LLC, as claims and notice agent and tabulation agent; and Gapstone, LLC as financial advisor. The Debtor estimated assets and debts of $100 million to $500 million. NEWLAND INT'L: Seeks OK for Gibson Dunn as Bankruptcy Counsel ------------------------------------------------------------- Newland International Properties Corp. seeks approval from a bankruptcy judge in New York to employ Gibson, Dunn & Crutcher, LLP as general bankruptcy and restructuring counsel nunc pro tunc to the Petition Date. Gibson Dunn has, for over six years, served as outside U.S. counsel to the Debtor in connection with the $220 million prepetition senior secured notes. In the 12 months prior to the filing of the Chapter 11 Case, Gibson Dunn billed, and received payments from, the Debtor in the aggregate amount of $3,060,630 for professional services rendered and expenses incurred. As Chapter 11 counsel, Gibson Dunn intends to apply to the U.S. Bankruptcy Court for payment of compensation and reimbursement of expenses in accordance with the procedures set forth in the applicable provisions of Section 330 of the Bankruptcy Code. The hourly rates of the firm's professionals are: Current Timekeeper Position Hourly Rate ---------- -------- ----------- Kevin W. Kelley Partner $1,070 J. Eric Wise Partner $960 Shira D. Weiner Associate $775 Vladimir W. Sentome Associate $755 Aileen Ma Associate $695 The Debtor believes that Gibson Dunn is a "disinterested person" pursuant to Sections 101(14) and 1107 of the Bankruptcy Code and as required by Section 327(a) of the Bankruptcy Code. A hearing on the application is slated for May 17. About Newland International Newland International Properties Corp., a unit of Panama-based Ocean Point Development Corp. that developed luxury hotel and condominium known as the "Trump Ocean Club International Hotel & Tower," located in Panama City, Panama, has sought Chapter 11 protection in New York with a bankruptcy exit plan that would further restructure $220 million secured notes used to finance the project. Newland, which filed the bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11396) in Manhattan on April 30, 2012, said the Trump Ocean Club is a multi-use 69-floor luxury tower overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominium, a limited number of offices and premier leisure amenities. The Trump Ocean Club is located on the Punta Pacifica Peninsula -- one of the most exclusive neighborhoods in Panama City. Newland tapped Gibson, Dunn & Crutcher, LLP, as bankruptcy counsel; Adames, Duran, Alfaro & Lopez as Panamanian counsel; Epiq Bankruptcy Solutions, LLC, as claims and notice agent and tabulation agent; and Gapstone, LLC as financial advisor. The Debtor estimated assets and debts of $100 million to $500 million. NEWLAND INT'L: Taps Adural as Panamanian Counsel ------------------------------------------------ Newland International Properties Corp. submitted with the U.S. Bankruptcy Court for the Southern District of New York an application to employ Adames, Duran, Alfaro & Lopez as Panamanian counsel nunc pro tunc to the Petition Date. Adural is a Panamanian law firm that maintains a broad, general practice in various areas of law, including but not limited to, corporate and securities law, mergers and acquisitions, real estate transactions, intellectual property, banking, international commerce, project development, immigration and relocation law and civil litigation. The firm maintains an office in Panama City, Panama. Adural has extensive expertise and experience in virtually all aspects of Panamanian law that may arise in the Chapter 11 Case. In particular, Adural has substantial bankruptcy and restructuring, corporate, employee benefits, environmental, finance, intellectual property, labor and employment, litigation, real estate, securities, and tax expertise. The Debtor has employed Adural as Panamanian counsel since May 2010. In the 12 months prior to the filing of the Chapter 11 case, Adural billed, and received payments from, the Debtor in the aggregate amount of US$79,936 for professional services rendered and expenses incurred. Postpetition, Adural intends to (a) continue to charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered, and (b) seek reimbursement of actual and necessary out- of-pocket expenses. The members of the Adural team who will be dedicated to assist Newland are: Current E-mail Name Position Hourly Rate Address ---- -------- ----------- ------- Nadiuska Lopez de Abood Leading Partner $225 nlabood@adural.com Ernesto Duran Partner $225 eduran@adural.com Beatriz Romero Consultant $200 blromero@adural.com Yarielka Melendez Legal Assistant $75 ymelendez@adural.com A hearing on the application is scheduled for May 17. About Newland International Newland International Properties Corp., a unit of Panama-based Ocean Point Development Corp. that developed luxury hotel and condominium known as the "Trump Ocean Club International Hotel & Tower," located in Panama City, Panama, has sought Chapter 11 protection in New York with a bankruptcy exit plan that would further restructure $220 million secured notes used to finance the project. Newland, which filed the bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11396) in Manhattan on April 30, 2012, said the Trump Ocean Club is a multi-use 69-floor luxury tower overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominium, a limited number of offices and premier leisure amenities. The Trump Ocean Club is located on the Punta Pacifica Peninsula -- one of the most exclusive neighborhoods in Panama City. Newland tapped Gibson, Dunn & Crutcher, LLP, as bankruptcy counsel; Adames, Duran, Alfaro & Lopez as Panamanian counsel; Epiq Bankruptcy Solutions, LLC, as claims and notice agent and tabulation agent; and Gapstone, LLC as financial advisor. The Debtor estimated assets and debts of $100 million to $500 million. NORTEL NETWORKS: Mergis to Provide Staff for Residual Operations ---------------------------------------------------------------- Nortel Networks, Inc., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ The Mergis Group, a division of Randstad Professionals US, LP, to support the residual operations of the Debtors. The firm will be employed pursuant to Section 363(B) of the Bankruptcy Code. Specifically, Mergis will provide the services of Timothy Ross to serve as chief financial officer and secretary of the Debtors, Allen Stout to serve as controller, and additional personnel to assist Messrs. Ross and Stout in the performance of their duties. Mergis will bill on an hourly basis based on the actual hours worked pursuant to a current blended hourly rate of $350. The personnel to be provided by Mergis are as follows: Name Description ---- ----------- Timothy Ross Chief Financial Officer and Secretary Allen Stout Controller David Cozart Associate Kim Ponder Associate Jessica Lloyd Associate Gary Storr Associate Jane Davison Associate Elizabeth Smith Associate Deborah Parker Associate As security for Mergis' services, the Debtors will pay Mergis a retainer in the amount of $1.5 million. The Retainer may be reduced periodically by Mergis for unpaid fees and expenses. Upon the termination of the Consulting Agreement and the provision of staffing services, any unused portion of the Retainer will be returned to the Debtors. A hearing on the motion will be held on May 21, 2013, at 10:00 a.m. (ET). Objections are due May 14. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTHLAKE FOODS: Can't Get Back Dividend, 11th Circ. Rules ---------------------------------------------------------- Ama Sarfo of BankruptcyLaw360 reported that the Eleventh Circuit on Monday affirmed a lower court ruling that Northlake Foods Inc., a bankrupt company that owned 150 Waffle House restaurants, can't recover a dividend it paid to a shareholder because Northlake received a reasonable exchange under its shareholder agreement. According to the report, Northlake's trustee, David Crumpton, said the company's $94,000 payment was a fraudulent transfer because the payout wasn't a reasonable exchange. But the 11th Circuit sided with a district court ruling that the payment was fair because Northlake was reimbursing a shareholder, the report said. The appellate case is, DAVID H. CRUMPTON, Plaintiff-Appellant, v. A. DOUGLAS MCGARRITY, Defendant-Appellee, No. 12-15604 (11th Cir.). Tampa, Florida-based Northlake Foods, Inc., is a "Subchapter S" Georgia corporation that owned roughly 150 Waffle House restaurants in Georgia, Florida, and Virginia. The company filed for Chapter 11 relief (Bankr. M. D. Fla. Case No. 08-14131) on Sept. 15, 2008. Lori V. Vaughan, Esq., Roberta A. Colton, Esq., and Stephanie C. Lieb, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Millis, P.A., represented the Debtor as counsel. In its schedules, the Debtor listed total assets of $8,449,885 and total debts of $9,370,829. On Jan. 28, 2009, in accordance with the Bankruptcy Court's order confirming the Debtor's Chapter 11 plan, the Bankruptcy Court approved the appointment of David H. Crumpton as Distribution Trustee for the Debtor's Distribution Trust. ORCHARD SUPPLY: Incurs $118.4 Million Net Loss in Fiscal 2012 ------------------------------------------------------------- Orchard Supply Hardware Stores Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $118.37 million on $657.31 million of net sales for the fiscal year ended Feb. 2, 2013, as compared with a net loss of $14.45 million on $660.47 million of net sales for the fiscal year ended Jan. 28, 2012. For the 14 weeks ended Feb. 2, 2013, the Company incurred a net loss of $33.57 million on $153.09 million of net sales, as compared with a net loss of $7.24 million on $141.57 million of net sales for the 13 weeks ended Jan. 28, 2012. The Company's balance sheet at Feb. 2, 2013, showed $407.41 million in total assets, $438.02 million in total liabilities and a $30.61 million total stockholders' deficit. "The past year was one of significant progress in our ongoing efforts to reposition the Orchard brand and execute our strategic priorities," said Mark Baker, president and chief executive officer. "We are continuing to work productively with our lenders to reach an agreement that will address our capital structure and allow us to build a stronger platform from which we can deliver improved results. We continue to expect comparable store sales growth of 9% to 11% in the first quarter, reflecting our team's focused efforts during the important spring selling season. Looking at the balance of the year, we hope to carry this momentum into the second quarter and deliver solid operating results for fiscal 2013." Deloitte & Touche LLP, in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended Feb. 2, 2013. The independent auditors noted that the Company was not in compliance with the leverage ratio covenant in its senior secured term loan as of Feb. 2, 2013. The Company's difficulties in meeting its loan agreement covenants and financing needs, its recurring losses from operations, and its negative working capital position as of Feb. 2, 2013, raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "[W]hile we anticipate continued compliance with the terms and conditions of the waiver while we address the terms of our restructuring, failure to comply with the terms and conditions of the waiver could cause the effectiveness of the waiver to terminate. In the event the waiver terminates, there would be a default under the Senior Secured Term Loan and, as a result, the lenders under the Senior Secured Term Loan could declare the outstanding indebtedness to be due and payable, in acceleration of the current maturity dates of December 21, 2013 and December 21, 2015. As a result of the cross-default provisions in our debt agreements, a default under the Senior Secured Term Loan could result in a default under, and the acceleration of, payments in the Senior Secured Credit Facility. If payments under our credit facilities were to be accelerated, we anticipate that we would seek protection under the Bankruptcy Code." A copy of the Form 10-K is available for free at: http://is.gd/I35lFE About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. As reported by the Troubled Company Reporter on March 8, 2013, Orchard Supply on Feb. 11, 2013, expanded its existing Senior Secured Credit Facility with Wells Fargo Capital Finance and Bank of America, N.A., increasing total borrowing capacity to $145 million through the addition of a $17.5 million last-in-last-out supplemental term loan tranche. On Feb. 14, the Company obtained a waiver from current Term Loan lenders related to compliance with the leverage ratio covenant for the fiscal quarter ended Feb. 2, 2013, and the fiscal quarter ending May 4, 2013, which means that the next applicable measurement date for the leverage covenant is Aug. 3, 2013, subject to the Company's continued compliance with the terms and conditions set forth in the waiver. The Company continues to work with Moelis & Co. toward the refinancing or modification of its Senior Secured Term Loan. The Company also continues to explore several actions designed to restructure its balance sheet for a sustainable capital structure, including seeking new long term debt or equity. The Wall Street Journal has reported that Orchard Supply also has hired restructuring lawyers at DLA Piper and financial adviser FTI Consulting, while people familiar with the matter said some lenders involved in restructuring talks have engaged Zolfo Cooper LLC and Dechert LLP. WSJ relates people familiar with the talks said Orchard Supply and its lenders are discussing an out-of-court restructuring or a so-called prepackaged bankruptcy filing. * * * As reported by the Troubled Company Reporter on Dec. 13, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Orchard Supply to 'CCC' from 'B-'. The outlook is negative. "We are also lowering our rating on the company's term loan to 'CCC' from 'B-' in conjunction with the downgrade. The recovery rating remains '4' recovery rating, indicating our expectation for average (30% to 50%) recovery in the event of a payment default," S&P said. "The ratings on Orchard Supply reflects Standard & Poor's Ratings Services' assessment of its financial risk profile as 'highly leveraged,' which incorporates near-term potential for noncompliance with financial covenants and significant debt refinancing risks. Our view of its business risk profile as 'vulnerable' considers the company's small size relative to the highly competitive home improvement segment of the retail industry and its exposure to housing market conditions in California," S&P said. ORECK CORP: Files for Chapter 11 With Plans to Sell --------------------------------------------------- Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee, on May 6, 2013, with plans to sell the business as a going concern. The Debtors said in court filings that they expect to reach agreement on a proposed stalking horse bid for substantially all of their assets in the next several days. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. Since 2010, Oreck's sales have declined due to increased competition in vacuum cleaner products, the decline of the specialty retail market for vacuum cleaners, and greater delay and costs than anticipated in converting Oreck's marketing and product strategy from direct to consumer advertising and sales to large retail store distribution. Oreck has run out of funding to support its operations during this transition, but strongly believes that it remains a viable business model for the long term. At this point, the only option for Oreck is to sell its assets under the temporary protection of the Bankruptcy Code. The Debtors have arranged $11 million of postpetition financing from lenders led by Black Diamond Commercial Finance, L.L.C., as agent. The financing, the Debtors say, will allow them to finance the Chapter 11 case pending completion of the going concern sale, thus avert a liquidation and wind down. The Debtors' assets are subject to a lien securing a line of credit dated Aug. 29, 2012, in the maximum amount of $20 million held by Wells Fargo Bank, National Association, as administrative agent. The assets are also subject to a second priority lien securing certain revolving line of credit in the amount of $5.47 million held by Broadpoint Products Corp., as administrative agent. The Debtors seek approval to access DIP financing and use cash collateral under these terms: * The $11 million senior secured superpriority DIP credit facility will be used to purchase the prepetition first lien lenders' debt and cover expenses set forth in the budget. * The DIP facility will mature nine months from the Petition Date. * All loans will bear interest of 12% per annum, the agent will receive a fee of $1 million, and the Debtors will pay an unused line fee for the unused portion of the total DIP facility. * There will be a carve-out for fees to be paid to the U.S. Trustee and, in an event of default, $400,000 for unpaid professional fees. * The collateral of the DIP lenders will include proceeds from avoidance actions pursued under, inter alia, Section 549 of the Bankruptcy Code. * The Debtors have agreed to waive their rights to seek, among other things, a surcharge pursuant to Sec. 506(c) of the Bankruptcy Code. * As adequate protection for the use of cash collateral, the first lien lenders will receive payment in full, in cash of the first lien credit obligations and the second lien lenders will receive a replacement security interest. Sale Milestones As a continuing condition to their use of the cash collateral and DIP facility, the Debtors will: (i) on or before the date that is five days following the Petition Date, file a motion under Section 363 seeking to sell substantially all of the Debtors' assets; (ii) on or before the date that is 15 days after the deadline to file the sale motion, obtain entry from the Bankruptcy Court of an order approving bid procedures, which order will authorize the solicitation of bids for the sale of the Debtors' assets and which shall set a deadline to receive bids related to such sale of no later than three 3 days prior to the auction; (iii) on or before the date that is 30 days after entry of the Bid procedures order, conduct an auction, if necessary; (iv) on or before the date that is 5 business days after the auction, obtain entry of an order of the Bankruptcy Court approving the sale in form and substance satisfactory to the agent in its sole discretion; and (v) on or before the date that is 15 days after entry of the Sale Order, close the sale. First Day Motions On the Petition Date, the Debtors also filed motions to provide adequate assurance to utilities, pay prepetition wages and benefits owed to employees, and retain their existing bank accounts. The Debtors are seeking an expedited hearing on the first day motions. The Debtors said they are in need of interim financing to make their payroll obligations that are need to be funded on Thursday, May 9, 2013, in order for the payroll agent to issue the payroll checks on the Friday payday. ORECK CORP: Proposes BMC Group as Claims Agent ---------------------------------------------- Oreck Corporation and its debtor-affiliates seek approval to employ BMC Group, Inc., as their claims and noticing agent. BMC will undertake the tasks associated with noticing the myriad of creditors of the Debtor and processing proofs of claim that may be filed. The Debtors said that the large number of creditors (approximately 1,600) and other parties-in-interest would almost certainly impose heavy administrative and other burdens upon the Court and the Clerk's Office absent a claims agent. BMC agrees to charge the Debtor at these rates: Case Management Average < $125 per hour --------------- Data Entry/Call Center/Admin. Support $25/$45 per hour Analysts $55 per hour Consultants $125 per hour Project Managers $175 per hour Principal/Directors $205 per hour Claims Management ----------------- Claim Receipt, Process & Docketing $250 per claim b-Linx Database and Systems Access $0.085 per month Detailed Claim Analysis and Reconciliation At Case Mgt. Rates Print Mail and Noticing Services -------------------------------- Copy/Print $0.08 per page Finishing $0.13 per standard Document Information Management ------------------------------- Document Imaging $0.12 per iage Live Operator Call Center $45 per hour Before the bankruptcy filing, BMC was paid a retainer of $20,000. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case NO. 13-04006) in Nashville, Tennessee on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. Bradley Arant Boult Cummings LLP serves as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. OTELCO INC: Has Green Light to Exit Prepack Chapter 11 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that for Otelco Inc., only one major hearing was required before the local exchange carrier in Oneonta, Alabama, received approval from the U.S. Bankruptcy Court in Delaware to exit Chapter 11 under the prepackaged reorganization voted on by creditors in advance of the March 24 Chapter 11 filing. The bankruptcy judge signed a confirmation order May 5 approving the plan that exchanges $107.7 million in senior subordinated notes for 92.5 percent of the new equity. The disclosure statement explaining the plan includes a projection where the recovery on the subordinated notes will be 40.5 percent. The $162 million secured term loan will be modified by extending maturity from 2013 to 2016. When the plan becomes effective, the lenders will receive no less than $20 million cash and 7.5 percent of the equity. Unsecured creditors will be paid in full. The plan reduces debt by about $135 million to $135 million. General Electric Capital Corp. is agent for the senior lenders. Before the March 24 bankruptcy filing, the plan had been accepted by all senior secured lenders and holders of 96 percent of the subordinated notes. About Otelco Inc. Otelco Inc. and 16 affiliated Debtors filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10593) on March 24, 2013. Otelco filed for chapter 11 in order to implement its "pre- packaged" financial restructuring plan -- a plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. Because of the overwhelming support Otelco's plan has received from both its secured and unsecured creditors (including holders of the Company's IDS units), Otelco anticipates that the Company will be able to complete its financial restructuring at the end of the second quarter of 2013. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Partners. The restructuring counsel for the administrative agent for the senior lenders is King & Spalding LLP and its financial advisor is FTI Consulting. Otelco Inc. is a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. OTELCO INC: Posts $4.9MM Q1 Operating Income; Ch.11 Exit Looms -------------------------------------------------------------- Otelco Inc. on May 7 reported results for its first quarter ended March 31, 2013. Key highlights for Otelco include: -- Total revenues of $21.0 million for first quarter 2013. -- Operating income of $4.9 million for first quarter 2013. -- Adjusted EBITDA of $8.8 million for first quarter 2013. "First quarter produced financial results that met our expectations," said Mike Weaver, President and Chief Executive Officer of Otelco. "We generated Adjusted EBITDA of $8.8 million, incurred and paid $1.4 million in restructuring expenses related to the bankruptcy filing and still increased our cash balance by $1.8 million. We invested $0.8 million in capital equipment in the first quarter and expect to increase our capital expenditures over the course of the year for a total investment of approximately $7.0 million for 2013. We ended the quarter with $34.3 million in cash on hand. "The restructuring process continues to proceed as planned," added Mr. Weaver. "We were pleased with the voting results of the solicitation, having received overwhelming support for our plan from both our senior lenders and our subordinated note holders. On May 6, the Bankruptcy Court entered an order to confirm our plan. Consistent with the terms of our plan of reorganization and a Court order we obtained in March 2013, our vendors and suppliers have been paid in full for all undisputed invoices. The next major steps in the process include completing the amendment and extension of our senior credit facility; obtaining FCC approval for licenses utilized by one of our subsidiaries; and the issuance of the new Class A common stock in exchange for the senior subordinated notes. In accordance with the plan, the existing Class A common stock will be extinguished. "Given the progress we have made on the balance sheet restructuring to date and the recent confirmation of our Plan, we expect to exit bankruptcy in the near future," Mr. Weaver concluded. Total revenues of $21.0 million decreased 17.3% in the three months ended March 31, 2013, when compared to the three months ended March 31, 2012. The expiration of the Time Warner Cable contract at the end of 2012 was the primary reason for the decrease in revenue in 2013. Operating expenses in the three months ended March 31, 2013, decreased 14.2% to $16.1 million from $18.8 million in the three months ended March 31, 2012. Cost of services and products decreased 14.1% to $9.5 million from $11.0 million for the three months ended March 31, 2012. Costs associated with TWC decreased $0.4 million and network efficiencies reflecting lower toll and employee expenses contributed to an additional reduction of $1.3 million. Interest expense decreased 4.8% to $5.6 million in the quarter ended March 31, 2013, from $5.8 million a year ago. The decrease in interest expense was primarily driven by the lower effective interest rate on the outstanding balance on our senior long-term notes payable upon expiration of our interest rate swaps on February 8, 2012. The Company spent approximately $1.4 million during the first quarter of 2013 associated with its balance sheet restructuring process with no comparable expenses in the same period of 2012. Adjusted EBITDA for the three months ended March 31, 2013, was $8.8 million compared to $11.5 million for the same period in 2012 and in the fourth quarter of 2012. As of March 31, 2013, the Company had cash and cash equivalents of $34.3 million compared to $32.5 million at the end of 2012. The Company's long-term notes payable of $271.1 million and the accumulated interest on those notes are shown as liabilities subject to compromise due to the March 24, 2013 bankruptcy filing. Dividends on our Class A stock were paid in first quarter 2012. No dividends were paid in 2013. Capital expenditures were $0.8 million for the quarter as the Company continues to invest in its infrastructure. The level of capital expenditure reflects a planned slower start than in previous years but is expected to lead to a similar level of investment in infrastructure for 2013 as was experienced in 2012. About Otelco Inc. Otelco Inc., a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia, and 16 affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10593) on March 24, 2013. Otelco filed for chapter 11 in order to implement its "pre- packaged" financial restructuring plan -- a plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. Because of the overwhelming support Otelco's plan has received from both its secured and unsecured creditors (including holders of the Company's IDS units), Otelco anticipates that the Company will be able to complete its financial restructuring at the end of the second quarter of 2013. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Partners. The restructuring counsel for the administrative agent for the senior lenders is King & Spalding LLP and its financial advisor is FTI Consulting. PATRIOT COAL: Union Warns of Strike If Contract Voided ------------------------------------------------------ Tim Bross, writing for Reuters, reported that a lawyer for the United Mine Workers of America on Friday told a bankruptcy judge it would be forced to strike if Patriot Coal Corp succeeds in voiding its contract with the union, as five days of contentious court hearings came to an end. According to the Reuters report, attorney Fred Perillo said the union would do everything in its power to reach a consensual agreement with Patriot, which is seeking to impose $150 million a year in labor cuts. But if Judge Kathy Surratt-States approves the proposal, which would end pension contributions, alter healthcare and lower pay rates, Perillo said a strike will follow. "No contract, no work," Perillo said during closing arguments to cap off the hearing in U.S. Bankruptcy Court in St. Louis, Reuters cited. Ben Hatfield, Patriot's chief executive, said later that Perillo's remarks were ill-conceived, Reuters related. "It's a poor time to be throwing out threats," Hatfield told Reuters in an interview outside the courtroom. "I think reasoned judgment will prevail when it comes to workers retaining their jobs in this environment." Hatfield said a UMWA strike would be a replay of what happened in the bankruptcy of Hostess Brands Inc, which last year liquidated after a union strike caused it to hemorrhage money. Judge Surratt-States has until May 29 to rule in the Patriot case. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PERFORMANCE FOOD: Moody's Gives 'B1' CFR & Rates $750MM Loan 'B3' ----------------------------------------------------------------- Moody's Investors Service assigned B1 Corporate Family and B1-PD Probability of Default ratings to Performance Food Group, Inc. as well as a B3 (LGD 5, 83%) rating to the company's proposed $750 million senior secured second lien term loan. The outlook is stable. Proceeds from the term loan will be utilized to repay $500 million in 11% mezzanine debt and pay a $220 million dividend to the owners, primarily affiliates of The Blackstone Group and Wellspring Capital Management. The ratings are subject to review of final documentation and terms and conditions. New Ratings Assigned: Corporate Family Rating at B1 Probability of Default Rating at B1-PD $750 million senior secured second lien term loan at B3 (LGD 5, 83%). Ratings Rationale: "The B1 Corporate Family and B1-PD Probability of Default ratings reflect PFG's aggressive financial policy. Given PFG is owned by financial sponsors (affiliates of The Blackstone Group and Wellspring Capital Management) Moody's expects that the company will be managed to a fairly high leverage metric going forward, with the possibility of future equity extractions," stated Moody's Senior Analyst Charlie O'Shea. PFG's debt/EBITDA for the latest 12-month period ended Dec. 31, 2012 was about 6.0 times, slightly lower on a pro forma basis at 5.6 times. This pro forma leverage includes Moody's estimates for a full year of EBITDA related to several of PFG's recent acquisitions. The B1 Corporate Family Rating also acknowledges that there are larger and financially stronger competitors in the market such as Sysco (A1, stable). At the same time, Moody's is of the opinion that PFG has done a good job differentiating itself from Sysco and other food service companies, particularly with respect to the vending business segment and the relatively higher margin "street" business catering to independent restaurants and small local and regional chains. The stable outlook reflects Moody's belief that despite some expected earnings growth and positive free cash flow, leverage and coverage are not likely to improve materially as the possibility exists that PFG will use its free cash flow -- about $100 million in each of the next two years -- along with its ABL facility to fund future acquisitions as opposed to absolute debt repayment. PFG has an unrated $1.4 billion ABL facility to support cash flows that can exhibit some seasonality, but these cash flows should remain sufficient to cover operating needs including capital expenditures. The B3 rating on the $750 million second lien term loan primarily recognizes its junior position in the capital structure to the company's $1.4 billion ABL facility. PFG's ratings could be upgraded if debt/EBITDA was maintained below 4.75 times and EBITA/interest was sustained above 2 times, which would reflect moderation of the existing financial policy. Ratings could be downgraded if operating performance were to weaken or if financial policy decisions, such as additional dividends, resulted in debt/EBITDA approaching 5.75 times or EBITA/interest falling below 1.5 times. The principal methodology used in this rating was Global Retail Industry Methodology published in June 2011 and Probability of Default Ratings and Loss Given Default Assessments published in June 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Richmond, Virginia, Performance Food Group is a food distributor with annual revenues of around $13 billion. PERFORMANCE FOOD: S&P Assigns 'B' CCR & Rates $750MM Loan 'CCC+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Richmond, Va.-based Performance Food Group Inc. (PFG). The outlook is stable. Concurrently, S&P assigned a 'CCC+' issue level rating (two notches below the corporate credit rating) to the proposed $750 million second-lien term loan due 2019, and a '6' recovery rating, indicating that lenders could expect negligible (0% to 10%) recovery in the event of a payment default. In addition, S&P assigned a 'BB-' issue-level rating (two notches above the corporate credit rating) to the existing $1.4 billion first-lien asset-based loan (ABL) revolving credit facility due 2017, and a '1' recovery rating, indicating that lenders could expect very high (90% to 100%) recovery in the event of a payment default. The ratings are subject to change and assume the transaction closes on substantially the terms presented to S&P. Pro forma for the proposed transaction, total debt outstanding is about $1.5 billion. Standard & Poor's ratings on PFG reflects S&P's assessment that the company will maintain a "highly leveraged" financial risk profile and a "fair" business risk profile. The financial risk assessment incorporates the company's ownership by two private equity firms that continue to demonstrate very aggressive financial policies. S&P's assessment that PFG's liquidity is "adequate" recognizes the company's low pro forma annual debt maturities over the next several years, and satisfactory availability under its ABL revolver. S&P also currently assumes that the pace of acquisitions will fall meaningfully compared to calendar year 2012, and that the company will begin repaying debt and strengthening credit measures. The "fair" business risk assessment incorporates PFG's participation in the intensely competitive foodservice distribution industry and its very low, albeit historically stable, profit margins. It also recognizes the company's satisfactory position as the third-largest foodservice distributor in the U.S., long relationships with several large restaurant chains, and sales growth over the last several years, which have generally exceeded industry averages and that of its peers. Key risk factors include the potential for a continuing deterioration in industry-wide restaurant traffic, which S&P believes occurred recently, and large swings in food and fuel costs. "We expect PFG will continue to generate modest free cash flow, maintain adequate liquidity, and slowly improve its pro forma credit ratios over the next year," said Standard & Poor's credit analyst Jerry Phelan. PHOENIX DEVELOPMENT: Files Chapter 11 Petition in Georgia --------------------------------------------------------- Phoenix Development and Land Investment, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Ga. Case No. 13-30596) in Athens, Georgia, on May 6. The Watkinsville, Georgia-based company disclosed total assets of $31.7 million and liabilities of $4.31 million in its schedules. The Debtor owns a 45-acre property on Milledge Avenue and Whitehall Road, in Athens, valued at $5.5 million and pledged as collateral to a $4 million debt to SCB&T, NA. The Debtor's declared assets include at least $22 million in claims against insurance companies and the Board of Regents of Georgia, which is a defendant in a suit filed in Superior Court of Athens-Clarke County. A copy of the schedules filed together with the petition is available at http://bankrupt.com/misc/gamb13-30596.pdf PUTNAM STONE: Case Summary & 9 Unsecured Creditors -------------------------------------------------- Debtor: Putnam Stone Corp. fka Taconic Stone, Inc. Putnam Stone & Mason Supply, Inc. 28 Bonniewood Drive Mahopac, NY 10541 Bankruptcy Case No.: 13-36040 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Thomas Genova, Esq. GENOVA & MALIN, ATTORNEYS Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590-4332 Tel: (845) 298-1600 Fax: (845) 298-1265 E-mail: genmallaw@optonline.net Scheduled Assets: $1,070,131 Scheduled Liabilities: $3,409,710 A copy of the Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb13-36040.pdf The petition was signed by William E. Dring, Jr., president. PVR PARTNERS: Moody's Assigns 'B2' Rating to $300MM Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to PVR Partners, L.P.'s proposed $300 million senior unsecured notes due 2021. PVR's other ratings and negative outlook remained unchanged. Net proceeds from the note offering will be used to reduce borrowings under the partnership's $1.0 billion senior secured revolving bank facility, which had $700 million outstanding as of March 31, 2013. Issuer: PVR Partners, L.P. $300M Senior Unsecured Regular Bond/Debenture, Assigned B2 $300M Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD5, 81 % Ratings Rationale: The proposed notes rank pari-passu with PVR's existing $900 million senior unsecured notes. PVR's senior notes are rated two notches below the Ba3 Corporate Family Rating given the size of the $1.0 billion secured revolving credit facility in PVR's capital structure, which has a first-lien claim to substantially all of the partnership's assets. The notes however, could move within one notch of the CFR if the relative proportion of unsecured debt continues to grow relative to secured debt. PVR's Ba3 CFR reflects the partnership's high leverage since the acquisition of Chief Gathering LLC's midstream assets; project execution, capital and throughput volume risks surrounding the expansion of pipeline capacity in the dry gas producing region of the Marcellus Shale; and its MLP legal structure that imposes high cash distribution burden. The rating is supported by PVR's substantial coal royalty business that has underperformed since 2011 because of weak coal prices, but generates high margins and has historically provided steady cash flows under long term contracts, growing fee-based gas gathering contracts and the solid growth prospects in its Pennsylvania midstream operations. The SGL-3 Speculative Grade Liquidity rating reflects PVR's adequate liquidity through mid-2014. The note issue should provide PVR sufficient borrowing capacity under the $1.0 billion revolver (proforma $585 million available at March 31, 2013) to cover the projected negative free cash flow (including distributions) well into 2014. However, additional external funding may be needed to free up revolver capacity in the second half of 2014 if the anticipated growth in EBITDA does not materialize and the high level of distributions and capex continues. The negative outlook reflects high leverage and volume risk in the Marcellus. The outlook could be revised to stable if PVR can substantially achieve its growth objectives, lower the debt/EBTIDA leverage near 4.5x while maintaining sufficient availability under the credit facility. The rating could be downgraded if it appears that leverage is unlikely to be reduced below 5x by the end of 2013. Moody's could consider an upgrade if PVR reduced leverage below 4x with current suite of assets while maintaining a distribution coverage above 1x on a fully diluted basis. The principal methodology used in this rating was Global Midstream Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PVR Partners, L.P. which is headquartered in Radnor, Pennsylvania, is principally engaged in the gathering and processing of natural gas and the management of coal and natural resource properties in the United States. PVR PARTNERS: S&P Rates $300MM Senior Unsecured Notes 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B-' issue-level rating to PVR Partners L.P.'s and Penn Virginia Resource Finance Corp. II's proposed $300 million senior unsecured notes due 2021. S&P also assigned its '6' recovery rating to the debt, indicating negligible (0% to 10%) recovery of principal. The partnership intends to use net proceeds to repay a portion of borrowings outstanding under its revolving credit facility. PVR is a midstream energy partnership that specializes in natural gas gathering and processing, and manages coal and natural resource properties. S&P's corporate credit rating on PVR is 'B+', and the outlook is negative. As of March 31, 2013, PVR had about $1.6 billion in debt. RATING LIST PVR Partners L.P. Corporate credit rating B+/Negative/-- New Ratings PVR Partners L.P. Penn Virginia Resource Finance Corp. II $300 mil senior unsecured notes B- Recovery rating 6 QBEX ELECTRONICS: Can Extend Plan Filing Deadline to June 13 ------------------------------------------------------------ At the behest of QBEX Electronics Corporation, Inc., the U.S. Bankruptcy Court extended until June 13, 2013, the Debtor's deadline to file its Chapter 11 plan and disclosure statement. The Debtor's solicitation period is extended to Aug. 12, 2013. QBEX Electronics Corporation, Inc., based in Miami, Florida, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-37551) on Nov. 15, 2012. Judge Robert A. Mark oversees the case. Robert A. Schatzman, Esq., and Steven J. Solomon, Esq., at GrayRobinson, P.A., serve as the Debtor's counsel. QBEX scheduled assets of $11,027,058 and liabilities of $8,246,385. The petitions were signed by Jorge E. Alfonso, president. Qbex Colombia, S.A., also sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-37558) on Nov. 15, listing $433,627 in assets and $5,792,217 in liabilities. RESIDENTIAL CAPITAL: Sues UMB, Wells Fargo Over Lien Value ---------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that Residential Capital LLC on Friday sued UMB Bank NA, Wells Fargo Bank NA and a group of junior secured noteholders holding $2 billion in claims against the estate over a dispute concerning the value of their liens securing certain bonds. According to the report, ResCap launched the adversary proceeding in an effort to obtain a ruling from a New York bankruptcy judge finding that the noteholders' contention that certain ResCap bonds, for which UMB serves as the indenture trustee and Wells Fargo as the collateral agent, are oversecured is untrue. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RODEO CREEK: Great Basin Units' Mines Sold to Waterton Global ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. subsidiaries of Canada's Great Basin Gold Ltd. received approval from the bankruptcy court on May 3 to sell the assets to Waterton Global Mining Co. LLC for $15 million cash and royalties. In addition to $15 million cash, Waterton will pay up to $90 million in 15 percent net-profit royalties over nine years. The buyer also pays up to $5 million to cure defaults on contracts. The properties being sold included the Hollister mine, a so-called trial mine, and the startup Burnstone mine in South Africa. There were seven bids by the deadline and four participants at the two-day auction in April. The second-place bidder was Hecla Nevada Gold LLC. Properties of parent Great Basin weren't sold. About Rodeo Creek and Great Basin Canada-based The Great Basin Gold Ltd and its subsidiaries are engaged in the exploration, development, and operation of high- quality gold properties. The GBG Group's primary projects are a trial mine and a recently constructed start-up mine, both of which are located in rich gold-producing regions: the Hollister trial mine in Nevada and the Burnstone start-up mine in South Africa. The GBG Group also holds interests in early-stage mineral prospects located in Canada and Mozambique. On Sept. 18, 2012, the GBG Group's primary South African operating subsidiary and owner of the Burnstone Start-up Mine, Southgold Exploration (Pty) Ltd., commenced business rescue proceedings under chapter 6 of the South African Companies Act, 2008. On Sept. 19, 2012, Great Basin Gold Ltd., the ultimate parent company, applied for protection from its creditors in Canada pursuant to the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 in the Supreme Court of British Columbia Vancouver Registry. GBG arranged -- and the U.S. debtors cross-guaranteed -- DIP financing from Credit Suisse and Standard Chartered Bank in the amount of $51 million, of which $10 million was made available to the U.S. subsidiaries and $25 million for South Africa. On Feb. 25, 2013, Rodeo Creek Gold Inc., which operates and owns the Hollister Trial-Mine, along with other U.S. subsidiaries of Great Basin, filed petitions for Chapter 11 protection (Bankr. D. Nev. Case No. 13-50301), in Reno, Nevada, as cash ran out before they could complete the sale of the mine. Rodeo Creek estimated assets worth less than $100 million and debt in excess of $100 million. Credit Suisse is the agent under the Debtors' secured prepetition credit facilities: (i) the Existing Hollister Credit Facility, under which the Debtors had $52.5 million outstanding at the end of 2012 and (ii) the Canadian DIP Facility, under which the Debtors had guaranteed $35 million outstanding as of the Petition Date. The Debtors also had $13.5 million in outstanding trade debt, in addition to certain intercompany obligations. SEA TRAIL: Buyer Emerges for Golf Resort ---------------------------------------- Alan Blondin, writing for The Sun News, reports that a prospective buyer has made a $1 million deposit and entered into a sales contract to buy the Sea Trail Golf Resort and Conference Center, according to an e-mail sent to property owners in the Sunset Beach, N.C., golf resort. The report notes Sea Trail has needed a buyer to complete a plan of reorganization to emerge from Chapter 11 bankruptcy protection. The report relates the proposed sale may be a final opportunity for Sea Trail to continue operating as it is, considering the case's bankruptcy administrator, Marjorie K. Lynch, filed a motion on April 24 to dismiss the case because of mounting administrative costs and Sea Trail's then-inability to locate a prospective buyer. According to the report, the April 25 e-mail was sent by Matt Smith, of The Finley Group corporate consultants based in Charlotte, N.C., the bankruptcy court-appointed chief restructuring officer who is working on behalf of Sea Trail under the supervision of the court. Mr. Smith's e-mail states that: -- Sea Trail officials had a conference on April 25 with the bankruptcy judge to update her on the status of the sale process. -- The deposit is non-refundable unless Sea Trail is unable to obtain bank and court approval, and resort officials expect the bank to approve the sale within a few weeks. -- Bid procedures and a sale date is expected to be set in mid-June and should be established at a hearing sometime in May. -- Upset bidders may surface and the highest bid on the sale date from qualified parties will be accepted. -- Upon the bankruptcy court's approval, the winning buyer will close on the sale in an expected 20 days or less. The report says a motion to sell identifying the buyer has yet to be filed with the bankruptcy court but is expected in the coming days. The report relates Robert Harper of Conway was identified as a partner in a group that was involved in discussions to take over the property, but said Monday he is not involved in the group that made the deposit. Mr. Harper is managing partner of Southern Dunes Inc, which operates the annual Golf Dimensions National Father & Son Team Classic and publishes Golfer's Guide magazine. According to the report, Marcus & Millichap Real Estate Investment Services, one of the country's leading golf course brokers, has assisted Mr. Smith in his search for a buyer. The report also notes a court filing by the bankruptcy administrator in late April confirmed Sea Trail is keeping up with payments to its vendors for current business, with the exception of attorney fees. A subsidiary of Charlestown Hotels, a hotel and resort management company, has been operating or assisting with Sea Trail's rental properties, golf packages and the convention center through the bankruptcy process. According to the report, Mr. Smith and other Sea Trail executives either declined comment on the potential sale or did not return messages Monday. About Sea Trail Corporation Sunset Beach, North Carolina-based Sea Trail Corporation owns and operates the Sea Trail Golf Resort and Conference Center. The Debtor's business operations are comprised of three operating divisions, including the golf division, the convention and resort division, and the real estate division. Sea Trail filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's PLLC is the Debtor's accountants. The Finley Group, Inc., is the Debtor's financial consultant. Sea Trail Corporation's official committee of unsecured creditors retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel. In October 2012, Bankruptcy Judge Stephani W. Humrickhouse confirmed the First Amended Plan of Reorganization that Sea Trail filed on Sept. 20, 2012. SBA TELECOMMUNICATIONS: S&P Retains 'B+' Sr. Unsec. Notes Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on SBA Telecommunications Inc.'s senior unsecured notes to '3' from '4'. The 'B+' issue-level rating on the notes remains unchanged. The '3' recovery rating indicates expectations of meaningful (50% to 70%) recovery in the event of a payment default. The revised recovery rating reflects S&P's assessment that there will be less senior secured debt outstanding at time of S&P's simulated bankruptcy, following the company's recently announced repayment of about $500 million of term loan borrowings. S&P's 'B+' corporate credit rating and stable outlook on parent SBA Communications Corp. remains unchanged. RATINGS LIST SBA Communications Corp. Corporate Credit Rating B+/Stable/-- Recovery Rating Revised; Issue-Level Rating Unchanged To From SBA Telecommunications Inc. Senior Unsecured Notes B+ B+ Recovery Rating 3 4 SBM CERTIFICATE: Says Operations to Continue While in Ch. 11 ------------------------------------------------------------- BankruptcyData quoted Eric M. Westbury, SBM Certificate's chairman and chief executive officer, as saying, "The past several years have been difficult for the SBM Investment Companies. After careful consideration of available alternatives, the Board of Directors determined that the chapter 11 filings were a necessary and prudent step, allowing the Companies to continue to operate while giving them the opportunity to reorganize with a stronger balance sheet and capital structure. Our goal is that, within the shortest time permitted by the Bankruptcy Code, SBM emerge from bankruptcy with maximum value and liquidity for our key constituencies, including our certificate holders," BData said, citing court documents. P. Brady Hayden, the Company's acting chief financial and accounting officer, was elected a director of SBM Certificate on the same day the company filed for bankruptcy, according to BankruptcyData. SBM Certificate Company filed a bare-bones Chapter 11 petition (Bankr. D. Md. Case No. 13-17282) in Greenbelt, Maryland, on April 26, 2013. Eric W. Westbury, Sr., signed the petition as director. Lawrence A. Katz, Esq., at Leach Travell Britt PC, in Tysons Corner, Virginia, serves as counsel to the Debtors. Silver Spring-based SBM disclosed $28.7 million in assets and $49.4 million in liabilities as of Dec. 31, 2012. SCOOTER STORE: Taps APS Services to Provide Management Services --------------------------------------------------------------- Scooter Store Holdings, Inc., et al., ask the U.S. Bankruptcy Court for permission to employ AP Services LLC to provide interim management and restructuring services and designation of Lawrence E. Young as Chief Restructuring Officer to the Debtors. APS has agreed to provide temporary staff to assist Mr. Young and the Debtors in their restructuring efforts. Mr. Young and the temporary staff will, among other things, provide these services: a. provide overall leadership to the restructuring process, including working with a wide range of stakeholder groups, together with the Debtors' senior management; b. work with the Debtors and their team to further identify and implement both short-term and long-term liquidity generating initiatives; and c. assist the Debtors' management in developing a restructuring strategy. The firm's rates are: Lawrence Young $960 Richard Abbey $745 Richard Whitlock $695 Michelle Ross $850 Michelle Repko $695 The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. The company is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SCOOTER STORE: Engages Epiq as Administrative Advisor ----------------------------------------------------- Scooter Store Holdings, Inc., et al., ask the U.S. Bankruptcy Court for permission to employ Epiq Bankruptcy Solutions, LLC as administrative advisor. Jennifer M. Meyerowitz, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm, among other things, will provide these services: a. assisting with solicitation, balloting, and tabulation and calculation of votes, as well as preparing any appropriate reports as required in furtherance of confirmation plan(s) of reorganization, b. generating an official ballot certification and testifying, if necessary, in support of the ballot tabulation results, and c. gathering data in conjunction with the preparation, and assist with the preparation, of the Debtors' schedules of assets and liabilities and statements of financial affairs. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. The company is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SCOOTER STORE: Wants Fulbright & Jaworski as Special Counsel ------------------------------------------------------------ Scooter Store Holdings, Inc., et al., ask the U.S. Bankruptcy Court for permission to employ Fulbright & Jaworski L.L.P. as special counsel. Frederick Robinson attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will provide these services: a. DOJ Investigation. Fulbright represents the Debtors in an investigation currently being conducted by the DOJ that is related to potential violations of federal healthcare laws. The discovery requests and inquiries from the DOJ as a consequence of this investigation are extensive and ongoing. b. Related Government Investigations. Fulbright represents the Debtors in other government investigations relevant to facts and circumstances similar to those at issue in the DOJ Investigation. c. Medicare/Regulatory Matters. Fulbright will continue to represent the Debtors with regarding to regulatory matters related to Medicare and Medicaid program, as well as other regulatory matters related to or impacted by the DOJ Investigation and Related Government Investigations. The firm's rates are: Professional Hourly Rate ------------ ----------- Partners $645 - $795 Associates $250 - $435 About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. The company is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SCOOTER STORE: Hires Morgan Joseph as Investment Banker ------------------------------------------------------- Scooter Store Holdings, Inc., et. al., asks the U.S. Bankruptcy Court for permission to employ Morgan Joseph TriArtisan LLC as investment banker. The firm, among other things, will provide these services: a. prepare with the assistance of the Debtors, an offering memorandum for distribution and presentation to prospective purchasers; b. solicit interest among prospective purchasers; and c. assist the Debtors in evaluating proposal received form prospective purchasers. On the closing of each Sale Transaction, Morgan Joseph shall earn and the Debtor shall immediately pay the firm in cash or directly from the proceeds thereof a Sale Transaction Fee equal to: a. 2.25% of the Aggregate Gross Consideration of such sale transaction up to and including $20,000,000 of AGC, plus b. 3.5% of the ACG of such sale transaction in excess of $20,000,000. Alex C. Fish attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. The company is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SEARS HOLDINGS: Offering 5 Million Shares Under Stock Plan ---------------------------------------------------------- Sears Holdings Corporation filed with the U.S. Securities and Exchange Commission a Form S-8 registration statement to register 5 million shares of common stock issuable under the Company's 2013 stock plan for a proposed maximum aggregate offering price of $254.5 million. A copy of the prospectus is available at: http://is.gd/nQG1h9 About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- operates full- line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. 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. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. 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. The Company's balance sheet at Oct. 27, 2012, showed $21.80 billion in total assets, $17.90 billion in total liabilities and $3.90 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. As reported by the TCR on Dec. 7, 2012, Fitch Ratings has affirmed its long-term Issuer Default Ratings (IDR) on Sears Holdings Corporation (Holdings) and its various subsidiary entities (collectively, Sears) at 'CCC' citing that The magnitude of Sears' decline in profitability and lack of visibility to turn operations around remains a major concern. SEAWORLD PARKS: Moody's Rates $1.405-Bil. Senior Term Loan 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to SeaWorld Parks and Entertainment, Inc.'s $1.405 billion senior secured tranche B- 2 term loan due 2020. SeaWorld will utilize the term loan along with approximately $11 million of cash to refinance all of its existing $1.26 billion term loan B and $152 million term loan A as part of a maturity extension and re-pricing that will favorably reduce annual cash interest expense. SeaWorld's B1 Corporate Family Rating, B1-PD Probability of Default Rating, Ba3 revolver rating and stable rating outlook are not affected. The reduction in cash interest as part of the refinancing favorably improves free cash flow, the proposed 2020 expiration improves the company's maturity profile, and the elimination of step-downs to SeaWorld's 5.75x total net leverage financial maintenance covenant benefits the company's liquidity position. Moody's expects Sea World will utilize the incremental cash flow for re-investment and cash distributions to shareholders and not for incremental debt reduction. The next scheduled step-down to the total net leverage financial maintenance covenant would have been to 5.25x in January 2014 under the existing credit agreement. SeaWorld's minimum interest coverage and maximum capital expenditures covenants are not changing. The absence of a springing maturity feature tied to SeaWorld's remaining $240 million 11% senior unsecured notes due December 2016 is a modest weakness, although Moody's does not expect the company will have difficulty refinancing the notes. This is in contrast to the revolver, whose April 2018 maturity springs to 91 days prior to the 11% notes maturity (December 2016) if more than $50 million of the notes remain outstanding at that time. The existing term loan B has a similar springing maturity feature tied to the 11% senior notes while the February 2016 maturity of the existing term loan A precedes the maturity of the 11% senior notes. Assignments: Issuer: SeaWorld Parks & Entertainment, Inc. Senior Secured Bank Credit Facility, Assigned Ba3, LGD3 - 41% Ratings Rationale: SeaWorld's B1 CFR reflects the strong brands and consumer appeal of its portfolio of 11 regional and destination amusement parks, tempered by exposure to cyclical discretionary consumer spending, high debt-to-EBITDA leverage (4.4x FY 2012 incorporating Moody's standard adjustments and pro forma for the April 2013 initial public offering), and ongoing risks related to cash distributions or leveraging actions by equity sponsor and 63% owner The Blackstone Group. The parks generate meaningful annual attendance (approximately 24.4 million FY 2012) and benefit from high entry barriers and distinct advantages due to the differentiated animal encounters, mix of entertainment and rides, and broad demographic appeal. Amusement parks are capital intensive but Moody's anticipates SeaWorld will continue its good track record of reinvesting in the parks to compete for consumers with a wide range of entertainment alternatives, maintain the attendance base and generate free cash flow. Attendance at the parks is seasonal and vulnerable to weather, changes in fuel prices, public health issues and other disruptions that are outside of the company's control. A good liquidity position and cash flow generation provide flexibility to fund a significant ongoing capital program, rollout of major new rides and attractions in 2013, and the $0.20 per share quarterly dividend (approximately $74 million annually) in conjunction with the IPO. The proposed term loan B is supported by a security pledge of substantially all the assets of the borrower and current and future domestic subsidiaries. The unrated 11% senior unsecured notes are effectively subordinate to the credit facility including the proposed term loan and the existing $192.5 million revolver. The credit facility and notes are guaranteed by SeaWorld Entertainment, Inc. (SEAS, SeaWorld's parent) and substantially all the domestic operating subsidiaries of the company. Moody's plans to withdrawal the Ba3 ratings on the existing term loans A and B once the proposed refinancing is completed. The stable rating outlook reflects Moody's expectation that SeaWorld will continue to generate meaningful free cash flow and maintain a good liquidity position to fund continued reinvestment in rides and attractions. Moody's expects debt-to-EBITDA leverage to be in a mid to low 4x range in 2013 based on modest projected EBITDA growth. Downward rating pressure could occur if cash distributions to shareholders, acquisitions or declines in attendance and earnings driven by competition, insufficient or ineffective investments or a prolonged economic downturn result in debt-to-EBITDA above 5.75x. More aggressive financial policies or a deterioration in liquidity could also result in a downgrade. Upward rating movement is constrained due to event risks related to equity sponsor control. However, Moody's could consider an upgrade if the sponsor ownership and control declines meaningfully and the company generates solid and growing EBITDA and cash flow, maintains good park re-investment, and demonstrates the willingness and ability to sustain debt-to-EBITDA leverage comfortably below 4.5x (after factoring in projected future shareholder distributions and other event risks). A good liquidity position would also be necessary for an upgrade. SeaWorld's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside SeaWorld's core industry and believes SeaWorld's ratings are comparable to those of other issuers with similar credit risk. Methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SeaWorld, headquartered in Orlando, Florida, owns and operates 11 amusement and water parks located in the U.S. Properties include SeaWorld (Orlando, San Diego and San Antonio), Busch Gardens (Tampa and Williamsburg) and Sesame Place (Langhorne, PA). The Blackstone Group (Blackstone) acquired SeaWorld in December 2009 in a $2.4 billion (including fees) leveraged buyout. SEAS completed an initial public offering in April 2013. SeaWorld's revenue for the fiscal year ended December 2012 was approximately $1.4 billion. SEAWORLD PARKS: S&P Rates $1.4 Billion Term Loan 'BB-' ------------------------------------------------------ Standard & Poor's Ratings Services assigned Orlando, Fla.-based SeaWorld Parks & Entertainment Inc.'s proposed $1.4 billion term loan B-2 due 2020 and the company's $192.5 million revolver due 2018 its 'BB-' issue-level rating (one notch higher than S&P's 'B+' corporate credit rating on the company), with a recovery rating of '2'. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The company plans to use the proceeds of the new term loan to refinance $152 million in its outstanding term loan A balance and $1.25 billion in its outstanding term loan B balance. The proposed term loan will push out maturities to 2020, compared with 2016 and 2017 under the existing term loan A and B, respectively. The $192.5 million revolver commitment due 2018 refinanced the company's previous revolver due 2016. The proposed term loan allows for the borrowing of an incremental $350 million term loan, provided SeaWorld is in compliance with certain leverage thresholds as measured under the credit agreement. In the event SeaWorld seeks incremental term borrowings, S&P could revise the recovery rating on the credit facility to '3', indicating its expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. In this event, the lower recovery prospects would reflect additional senior secured debt. On April 18, 2013, SeaWorld completed an IPO of its common stock, which generated $254 million of gross proceeds for the company. The company used proceeds to redeem $140 million of the company's $400 million 11% senior notes due 2016, repay $37 million of the company's tranche B term loan ($1.3 billion was outstanding at Dec. 31, 2012), pay a one-time termination fee of $47 million to an affiliate of The Blackstone Group L.P. related to an advisory agreement, and to pay for fees and expenses. S&P's 'B+' corporate credit rating on SeaWorld reflects S&P's assessment of the company's business risk profile as "fair" and S&P's assessment of the company's financial risk profile as "aggressive," according to S&P's criteria. S&P's assessment of SeaWorld's business risk profile as fair reflects the company's EBITDA concentration in a few of its parks, its reliance on consumer discretionary spending, the capital intensity of the theme park business, and vulnerability to adverse weather conditions--a risk that the seasonal nature of several of the company's parks exacerbate. The high barriers to entry in the theme park industry and S&P's belief that the company will maintain EBITDA margin in the high-20% area partially offset the negative factors. While this is somewhat below other rated theme parks, it compares favorably to many issuers in the leisure space. S&P's assessment of SeaWorld's financial risk profile as aggressive reflects S&P's belief that adjusted leverage could remain under 4.5x, and that adjusted funds from operations to debt will remain in the mid-teens percentage area. Adjusted leverage, pro forma for the reduction in debt with proceeds from the IPO, was 4.3x at Dec. 31, 2012 (the reduction in adjusted leverage from the IPO proceeds was about 0.4x). S&P currently forecasts modest EBITDA growth through 2014. While S&P believes adjusted leverage under 4.5x is in line with a one- notch higher rating on SeaWorld, the company's adjusted leverage would need to decline to about 4x or below for S&P to raise the rating by one notch. This level of leverage would provide a half- turn of cushion against underperformance of our operating expectations. Further, given Blackstone will continue to own the majority of SeaWorld's common stock (about 68%), at least through the 180-day restricted period, and control SeaWorld's Board of Directors, S&P would need to see Blackstone further execute its deleveraging plan for SeaWorld before raising the rating. RATINGS LIST SeaWorld Parks & Entertainment Inc. Corporate Credit Rating B+/Positive/-- New Ratings SeaWorld Parks & Entertainment Inc. $1.4B term loan B-2 due 2020 BB- Recovery Rating 2 $192.5M revolver due 2018 BB- Recovery Rating 2 SEMINOLE HARD: S&P Assigns 'BB-' Rating to $350MM Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned Hollywood, Fla.-based co-borrowers Seminole Hard Rock Entertainment Inc. and Seminole Hard Rock International LLC's proposed $350 million senior notes its 'BB-' issue-level rating, with a recovery rating of '5', indicating S&P's expectation for modest (10% to 30%) recovery for lenders in the event of a payment default. The company plans to use proceeds from the notes issuance, in conjunction with its proposed senior secured term loan, to refinance its existing $525 million senior secured floating rates notes; to pay accrued interest, fees, and expenses; and to fund investments or acquisitions or for general corporate purposes. On April 30, 2013, S&P assigned the proposed $240 million senior secured term loan its 'BBB-' issue-level rating, with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. The credit agreement will provide for incremental term loan facilities of up to $50 million. In the event the company were to increase the size of the term loan by $50 million, S&P would likely revise its recovery rating on the company's secured debt to '2' (70% to 90% recovery expectation) from '1', and lower of S&P's issue-level rating to 'BB+' (one notch higher than S&P's issuer credit rating) from 'BBB-', in accordance with its notching criteria. The recovery rating revision would reflect a greater amount of secured debt outstanding at default under S&P's simulated default scenario, which would lower the recovery prospects for the secured debt sufficiently enough to warrant the lower recovery rating. RATINGS LIST Seminole Hard Rock Entertainment Inc. Seminole Hard Rock International LLC Corporate Credit Rating BB/Stable/-- New Rating Seminole Hard Rock Entertainment Inc. Seminole Hard Rock International LLC $350M senior notes due 2021 BB- Recovery Rating 5 SENSUS USA: Profit Slide Prompts Moody's to Lower CFR to 'B3' ------------------------------------------------------------- Moody's Investors Service downgraded Sensus USA Inc.'s Corporate Family Rating to B3 from B2 and its Probability of Default Rating to B3-PD from B2-PD. Moody's also downgraded the company's first lien revolver and term loans to B1 from Ba3 and its second lien term loan to Caa2 from Caa1. Revenue and profitability deterioration and increased debt over the past twelve months coupled with the weakened outlook for the European economy drove the downgrades. The rating outlook is stable. Ratings: Sensus USA Inc. Corporate Family Rating: Lowered to B3 from B2 Probability of Default: Lowered to B3-PD from B2-PD $100 million First Lien Revolving Credit Facility: Lowered to B1/LGD3-33 from Ba3/LGD3-32 $425 million First Lien Term Loan: Lowered to B1/LGD3-33 from Ba3/LGD-32 $150 million Second Lien Term Loan: Lowered to Caa2/LGD5-81 from Caa1/LGD5-78 Outlook: Stable Sensus Metering Systems (Luxco 2) S.a.r.l. $25 million First Lien Revolving Credit Facility: Lowered to B1/LGD3-33 from Ba3/LGD3-32 Ratings Rationale: Sensus' B3 Corporate Family Rating is driven by high leverage (about 8x Moody's adjusted debt/EBITDA for twelve months ending December 2012), weak free cash flow (2% FCF/Debt), low margins (<10%) and revenue volatility caused by irregularity of meter deployment programs. The rating also reflects the company's geographic concentration (North America represents approximately 70% of revenues) and end market concentration primarily in residential water meters which is subject to utility commission budgeting and purchasing cycles. These challenges are offset by the company's strong global market position in all meters (mid single digit percent of water, electric, and natural gas meters sold globally excluding China, in 2012) and water meters in particular (mid teen percentage of all global water meters in 2011). The company has been active in the build out of Advanced Metering Infrastructure ("AMI") which involves two-way wireless communication between the utility selling the commodity and the meter measuring consumption; the company held a leading position in North American water AMI deployment in 2012. Though Moody's believes the water utility market may adopt this technology over time, over the next 1-2 years slow growth is expected due to pressure on utility regulators to limit utility bill inflation (meter replacement costs are typically recoverable through rates charged customers), especially in Europe. Moody's expects Sensus to generate low single digit percent revenue and EBITDA growth over the next 18 months. Electric meters, a smaller Sensus unit, could boost the company's revenue growth sizably if the company's consortium is selected by the UK regulator to supply the smart electric meter communication infrastructure build out for the country's approximate 30 million homes and small businesses. Moody's anticipates meaningful revenue recognition would start in calendar 2014. Further out, Moody's expects an increase in demand for smart meters in continental Europe in order to comply with the EU's 2009 mandate for 80% of homes to have smart meters by 2020; difficult economic conditions could cause late compliance. Sensus has adequate liquidity with modest free cash flow, about $50mm cash balance (albeit largely held offshore), and about $40 million of revolver availability at March 31, 2013. The company has no significant debt maturities until 2016 but constraints on cash could arise from weaker cash flow from operations than expected. The rating outlook is stable with expectations of the core water and other utility meter sales to stabilize from their recent mixed performance, resulting in both revenue and EBITDA growing modestly over the near-term. The outlook does not assume Sensus' consortium wins the UK bid given the number of bids submitted. A selection by the UK regulator and financial performance under that contract in line with Moody's expectation, combined with stable performance on the rest of the business lines could lead to the outlook changing to positive. Over time, leverage decreasing to 5.0x concurrent with free cash flow to debt increasing above 5%, if sustainable, could lead to a ratings upgrade. Leverage levels sustained above 6.0x, free cash flow turning negative or a weakening liquidity profile could result in an outlook or ratings downgrade. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sensus USA Inc., headquartered in Raleigh, North Carolina, is a provider of various products to water, electric and natural gas utility companies including communication, metering, measurement, control and analysis equipment. Revenue for the last twelve months ended December 31, 2012 were approximately $850 million of which approximately 70% was generated in North America with the remainder in Europe, Asia and South America. The company is owned by The Jordan Company and Goldman Sachs. SEVEN COUNTIES: U.S. Trustee Wants More Time to Object to Hiring ---------------------------------------------------------------- Samuel K. Crocker, the U.S. Trustee for Region 8, asks the U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, to enlarge the time within which he can object to Seven Counties Services, Inc.'s nunc pro tunc application to employ Seiller Waterman LLC as counsel. The U.S. Trustee relates that one of the papers the Debtor filed on the Petition Date listed the firm as an "unsecured creditor" that received payments totaling around $140,000. The U.S. Trustee says he has requested and received additional documentation to clarify the timing of, and reasons for, the payments. The U.S. Trustee asserts that he needs more time to review the additional information he has received. Cash Collateral In April, Judge Joan A. Lloyd of the U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, entered a second interim order granting Seven Counties' motion for authority to use cash collateral securing its indebtedness from Fifth Third Bank. The Debtor's use of the cash collateral as provided in the second interim order was slated to expire May 7, 2013, when Judge Lloyd was set to convene another hearing on the cash collateral motion. The interim order provides that Fifth Third will be granted adequate protection for the diminution of the value of the cash collateral in the form of valid and perfected liens and reimbursement for any interest drawings. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioural services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-bk-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SEVEN COUNTIES: Wants Patient Care Ombudsman Appointment Waived --------------------------------------------------------------- Seven Counties Services Inc., asks the U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, to waive the appointment of a patient care ombudsman saying a patient care ombudsman would represent an unnecessary additional administrative expense to the estate. The Debtor, a not-for-profit behavioural services provider, qualifies as a "health care business" as defined in Section 101(27A) of the Bankruptcy Code. Pursuant to Section 303(a)(1), in a case involving a health care business, the court will order an ombudsman to monitor the quality of patient care and to represent the interests of the patients of the health care business unless the court finds that the appointment of such ombudsman is not necessary for the protection of patients under the specific facts of the case. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioural services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-bk-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SIONIX CORP: Amends Current Report with SEC ------------------------------------------- Sionix Corporation has amended its current report on Form 8-K which was filed with the Securities and Exchange Commission on April 29, 2013, to correct the maturity dates of the January Convertible Notes and the March Convertible Notes described in that Report. January Convertible Notes On Jan. 25, 2013, Sionix Corporation entered into securities purchase agreements with two accredited investors for the purchase and sale of $140,000 of convertible notes convertible into shares of the Company's common stock, par value $0.001 per share, at a conversion price equal to 80% of the average of the three lowest closing prices for the Common Stock during the 10 consecutive trading days immediately preceding the conversion request, however the conversion price may not exceed $0.04 and may not be lower than $0.02 per share. The January 2013 Notes bear interest at the rate of 10 percent per annum and mature on Sept. 30, 2014. The January 2013 Notes are convertible at any time at the option of the January Holders. The Company may redeem the January 2013 Notes at any time prior to maturity with 20 days' prior notice to the January Holders and payment of a premium of 20 percent on the unpaid principal amount. In addition, the January 2013 Notes and January SPAs provide the January Holders with registration rights for the shares of Common Stock underlying the January 2013 Notes. If the Company fails to file a registration statement with the SEC covering those shares within 30 days from the date of the January Notes, the Company will pay to the January Holders an amount in cash, as partial liquidated damages, equal to 2 percent of the aggregate purchase price paid by the January Holders pursuant to the January SPAs until the first anniversary of the issue date and 1 percent of the same per month thereafter, not to exceed 10 percent of the principal amount in the aggregate. March Convertible Notes On March 13, 2013, the Company entered into securities purchase agreements with five accredited investors for the purchase and sale of $60,000 of convertible notes convertible into shares of the Company's Common Stock at a fixed conversion price of $0.02 per share. The March 2013 Notes bear interest at the rate of 10 percent per annum and mature on Sept. 30, 2014. The March 2013 Notes are convertible at any time at the option of the March Holders. The Company may redeem the March 2013 Notes at any time prior to maturity with 20 days' prior notice to the March Holders and payment of a premium of 20 percent on the unpaid principal amount. JMJ Financial Convertible Promissory Note On April 11, 2013, the Company issued a Convertible Promissory Note to JMJ Financial in the principal amount of $75,000, including a 10 percent original issue discount, at a conversion price equal to 60 percent of the three lowest closing price of the Company's common stock for a period of 20 trading days, but no lower than $0.03 per share. The JMJ Note matures on April 11, 2014. The Company has an optional right of redemption at any time before 90 days from the JMJ Effective Date, after which prepayment may not be made without prior approval from the lender and a one- time interest charge of 12 percent will be applied to the JMJ Principal Amount. The JMJ Note also provides for up to an additional $175,000 to be provided to the Company at the lender's sole discretion. The shares underlying conversion of the JMJ Note have piggyback registration rights and if the Company fails to register those shares in its next registration statement filed with the SEC a liquidated damage charge of 25 percent of the outstanding principal balance, but not less than $25,000, will be added to that outstanding balance. Tonaquint Convertible Promissory Note On April 19, 2013, pursuant to the terms and conditions of that certain securities purchase agreement, by and between the Company and Tonaquint, Inc., the Company issued to Tonaquint i) a convertible promissory note in the principal amount of $155,000, including a 10 percent original issue discount, maturing on Aug. 19, 2014, and ii) a five year warrant to purchase that number of shares of the Company's Common Stock equal to $62,000, convertible at a conversion price as set forth in the Tonaquint Note and exerciseable at $0.06 per share, as adjusted pursuant to the terms and conditions of the Tonaquint Warrant. The Company paid fees of $5,000 incurred by Tonaquint in connection with the funding of this loan. The Company has the optional right to prepay any portion of the Tonaquint Principal Amount upon providing Tonaquint with five days' notice of such prepayment, provided that the Company must pay Tonaquint 135 percent of the amount of the Tonaquint Principal Amount it elects to prepay. Interest on the Tonaquint Note will accrue at 8 percent per annum, provided that upon an Event of Default the interest rate shall increase to 18 percent. About Sionix Corp. Los Angeles, Calif.-based Sionix Corporation designs, develops, markets and sells cost-effective water management and treatment solutions intended for use in the oil and gas, agriculture, disaster relief, and municipal (both potable and wastewater) markets. Sionix incurred a net loss of $5.76 million for the year ended Sept. 30, 2012, compared with a net loss of $6.30 million during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $2.90 million in total assets, $4.02 million in total liabilities, all current, and a $1.11 million total stockholders' deficit. Kabani & Company, Inc., in Los Angeles, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred cumulative losses of $37,560,000. In addition, the company has had negative cash flow from operations for the years ended Sept. 30, 2012, of $2,568,383. These factors raise substantial doubt about the Company's ability to continue as a going concern. SKINNY NUTRITIONAL: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Skinny Nutritional Corp. 825 Lafayette Road Bryn Mawr, PA 19010 Bankruptcy Case No.: 13-13972 Chapter 11 Petition Date: May 3, 2013 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Jean K. FitzSimon Debtor's Counsel: Edmond M. George, Esq. OBERMAYER REBMANN MAXWELL & HIPPEL, LLP 1617 John F. Kennedy Boulevard One Penn Center, Suite 1900 Philadelphia, PA 19103 Tel: (215) 665-3140 E-mail: edmond.george@obermayer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Michael Salaman, chief executive officer. SONIC AUTOMOTIVE: Moody's Rates New $300MM Subordinated Notes B3 ---------------------------------------------------------------- Moody's Investor Service assigned a B3 rating to Sonic Automotive, Inc.'s proposed $300 million subordinated note offering. The company's B1 Corporate Family Rating was affirmed at B1. The outlook remains positive. Proceeds from the proposed note issue are intended to be used to redeem the company's existing $210 million 9% subordinated notes due 2018, including related premiums and expenses, and for general corporate purposes. The rating assigned to the proposed notes is subject to receipt and review of final documentation. The proposed transaction is positive for Sonic's credit profile, as it will lower the company's annualized interest expense, extend debt maturities, and provide additional balance sheet cash. These positive factors offset an increase in pro forma leverage to approximately 4.9x from 4.6x (based on the latest twelve months ended Dec. 31, 2012). The following rating was assigned: $300 million senior subordinated notes due 2023 at B3/(LGD6, 91%) The following ratings were affirmed: Corporate Family Rating at B1 Probability of Default Rating at B1-PD $200 million senior subordinated notes due 2022 at B3/(LGD6, 91%) The following rating was affirmed, and will be withdrawn upon redemption of substantially all the notes: $210M senior subordinated notes due 2018 at B3/(LGD6, 91%) Ratings Rationale: Sonic's B1 Corporate Family Rating continues to consider the company's weak, though improving, credit metrics, good liquidity benefitting from a balanced debt maturity profile, and its business model, with representative parts and service and finance and insurance segments, which reduce reliance on new car sales. Ratings also reflect the company's strong market position in the still very fragmented auto retailing segment, and Sonic's historically-favorable brand mix. The positive outlook reflects Moody's belief that Sonic's favorable brand mix will continue to resonate with consumers, and that it will continue to manage its expenses prudently, resulting in credit metrics that should continue to improve over the next few quarters. The positive outlook also recognizes that Sonic is in the process of remediating a material weakness as outlined in its most recent 10K. Ratings could be upgraded if Sonic continues to improve its operating performance and credit metrics, as well as maintain a balanced financial policy. Quantitatively, ratings could be upgraded if debt/EBITDA was sustained below 4.5 times and EBIT/Interest was sustained above 2.5 times. Ratings could be downgraded if Sonic's liquidity or operating performance were to weaken, or if financial policy were to become aggressive such that debt/EBITDA rose above 5.25 times or if EBIT/Interest approached 2 times. The principal methodology used in this rating was the Global Automotive Retailer Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Charlotte, North Carolina, Sonic Automotive is a leading retailer of automobiles. SONIC AUTOMOTIVE: S&P Raises Corp. Credit Rating to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Sonic Automotive Inc. to 'BB' from 'BB-'. The outlook is stable. At the same time, S&P raised its debt issue-level ratings on the company's 7% $200 million senior subordinated notes due 2022 to 'BB-' (one notch lower than the corporate credit rating) from B+. The '5' recovery rating on the subordinated notes remains unchanged and indicates S&P's expectation that lenders would receive modest (10% to 30%) recovery in the event of a payment default. S&P is also assigning its 'BB-' debt issue rating and '5' recovery rating to Sonic's proposed $300 million subordinated notes due 2023. S&P expects Sonic to use the net proceeds of the proposed notes to repay the $210 million face value of its 9.00% senior subordinated notes due in 2018. After the 9% notes have been redeemed, S&P plans to withdraw its rating on that debt. The ratings on Sonic reflect Standard & Poor's view of Sonic's business risk profile as "fair" and its financial risk profile as "significant." The fair business risk assessment reflects S&P's belief that the company's resilient business model--with its diverse revenue stream and variable cost structure--will support continued good profitability. "We have revised our financial risk assessment of Sonic to "significant" from "aggressive" based on the company's improved credit measures, which we believe are sustainable," said Standard & Poor's credit analyst Nancy Messer. "This revision incorporates our expectation that by year-end 2013 Sonic will resolve (or be on a clear path to resolution) its material weakness in internal control over financial reporting described in its 2012 10K. Sonic's debt leverage, by our calculation, declined to 3.6x at year-end 2012, and we expect the company will maintain leverage of 4.0x or less in 2013 because of EBITDA expansion. We do not expect any change in financial policy as a result of Heath Byrd assuming the position of CFO given the recent retirement of David Cosper. Sonic has dual-class common stock that places voting control with O. Bruton Smith and B. Scott Smith, the founders and holders of the class B common stock". S&P views Sonic's financial policy as aggressive because S&P expects the company to expand through acquired dealerships in 2013 and 2014. S&P expects free operating cash flow to remain positive, reaching at least $50 million in each of 2013 and 2014, and for funds from operations (FFO) to debt to remain at 20% or better during the next two years, which compares with 23% at year- end 2012. High-margin revenue generated by Sonic's parts and service (P&S) operations--46% of same-store gross profit in 2012-- is relatively stable compared with vehicle sales revenue, which can be volatile. The P&S business supported revenues and margins in the last recession, while same-store vehicle unit sales declined and showed margin pressure from weak pricing. S&P thinks the mix of revenues in the year ahead will remain fairly consistent with recent levels: new-vehicle retail sales (56%), used-vehicle sales (27%), P&S sales (14%), and finance and insurance (F&I, 3%). Although new-vehicle sales were only 23% of Sonic's same-store gross profit for 2012, new-vehicle sales drive dealership customer throughput and enhance parts and services (P&S) revenue potential. "Our rating outlook on Sonic is stable, reflecting our assumption that its improved performance through operating efficiencies, in combination with its diverse revenue stream and brand mix, will enable the company to generate free operating cash flow of at least $50 million in 2013 and again in 2014. We assume EBITDA will expand this year and in 2014, even if the U.S. economy has remains lackluster. We assume Sonic will pursue a financial policy that will balance business expansion and shareholder returns against the need to achieve and maintain leverage of between 3.5x and 4.0x or less, and FFO to total debt of 20% or better, for the rating," S&P noted. Alternatively, although not likely to occur in the year ahead, S&P could raise the rating if it believed Sonic could sustain its improved credit measures and successfully execute its acquisition strategy without increasing leverage. S&P would need to view Sonic's business profile as satisfactory, including the company's ability to sustain its profitability through cost-side initiatives even in an industry downturn. For an upgrade, S&P would also look for sustainable improved credit measures to include lease-adjusted total debt to EBITDA of 3x to 3.5x and consistent free operating cash flow of $100 million. S&P could lower the rating if aggressive financial policies lead to leverage exceeding 4.0x for an extended period or if S&P believes the company could not report consistent free operating cash flow of at least $25 million over any 12 month period. This could occur if aggressive debt-financed acquisitions or investment in dealer upgrades leads to higher debt and adjusted EBITDA declined to about $275 million. S&P could also lower the rating if the slow economic recovery reverses course and EBITDA declines because the company can't offset revenue declines with cost controls. SPECIAL ELECTRIC: Calif. Appeals Court Remands Melendrez PI Suit ---------------------------------------------------------------- Mary Melendrez, et al., on behalf of the estate of Lario David Melendrez brought a wrongful death action against numerous entities, including Special Electric Company, Inc., alleging that the decedent died of mesothelioma as the result of exposure to asbestos. SECO was alleged to be liable as a manufacturer and supplier of crocidolite mats, and as a supplier of raw crocidolite asbestos. SECO filed for bankruptcy protection in 2004. The company's Second Amended Plan of Reorganization, which reduced SECO to a shell for the sole purpose of processing asbestos lawsuits, was approved in 2006. Under the Plan, the insurers were required to defend and/or settle the asbestos claims. The Melendrez personal injury suit was thus passed to SECO's insurer for resolution. When discovery wals propounded to SECO, the company's attorney (who had been provided by the insurers) filed substantive responses to the discovery, but represented to the trial court that the responses could not be verified, as SECO had no officer, director, employee, or agent who could verify the discovery responses. The Melendrezes challenged the sufficiency of the discovery responses. The trial court agreed that, under the circumstances, no individual existed who could verify the responses, and, at SECO's request, simply deemed them verified. The Melendrezes thus filed a writ petition, challenging the trial court's order. On review, the Court of Appeals of California, Second District, noted that the law provides that an attorney can verify responses on behalf of a corporation, although such an act constitutes a limited waiver of the attorney-client and work product privileges with respect to the identity of the sources of the information contained in the response. In the current case, the attorney argued that she could not verify the discovery responses because SECO was the holder of the attorney-client privilege, but had no officer or director who could waive it. The Appeals Court concludes that the trial court could have directed that further effort be made to have a director elected or appointed on behalf of SECO. It may, however, be that the corporation no longer exists and no director can be elected or appointed. If that is the case, the Appeals Court believes that SECO's attorney-client privilege would be passed to its insurers, the de facto assignee of its policies and the claims against them. The Appeals Court thus grants the Melendrezes' petition for a writ of mandate and remand for further proceedings on the issue. The case is MARY MELENDREZ et al., Petitioners, v. SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, Respondent; SPECIAL ELECTRIC COMPANY, INC., Real Party in Interest, Case No. B243320 (Cal. App.). The appeals court's April 30, 2013 order is available at http://is.gd/xzv407from Leagle.com. Brian P. Barrow, Esq. -- bbarrow@sgpblaw.com -- and Nectaria Belantis, Esq. -- nbelantis@sgpblaw.com -- at SIMON GREENSTONE PANATIER BARTLETT, in Longbeach, California, represent Mary Melendrez, et al. Edward R. Hugo, Esq, -- ehugo@bhplaw.com -- Jeffrey Kaufman, Esq. -- jkaufman@bhplaw.com -- and Amber Lee Kelly, Esq. -- akelly@bhplaw.com -- at BRYDON HUGO & PARKER represent Special Electric Company, Inc. STAR NEWS: Loan Assignee Gets Favorable Ruling vs. Gerson Fox ------------------------------------------------------------- District Judge Manuel L. Real entered an order granting an assignee/plaintiff's motion for summary judgment against Gerson Fox in the action FALLEN STAR, LLC, Plaintiff v. STAR NEWS BUILDING, LP, et al., Defendants, Case No. CV 12-05738-R (PJWx) (C.D. Cal.). In 2008, Star News Building, L.P., borrowed $11.9 million from original lender Telesis Community Credit Union. Business Partners LLC was the servicer of the Loan. Gerson I. Fox and Michael J. Kamen executed written guaranties on the Loan. In May 2012, the Lender was placed into voluntary liquidation, and National Credit Union Administration Board was appointed as liquidating agent. By December 2012, the Liquidating Agent assigned and transferred rights under the Loan to Fallen Star LLC. Since 2009, Star News defaulted on the Loan when it (i) failed to pay property taxes on the real property collateral for the loan, (ii) failed to pay default interest, (iii) failed to make loan payments, and (iv) filed for bankruptcy on April 29, 2011 in California, among other things. In an April 18, 2013 order, the District Court held that the Plaintiff is entitled to rely on the same protection as its predecessor-in-interest, the Liquidating Agent. Pursuant to the Guaranty Agreements, the obligations of the Guarantors, which include Mr. Fox, constitute an unconditional guaranty of payment and not merely a guaranty of collection. The Guaranty also contains unconditional and valid waivers of defenses. A copy of the District Court's Order is available at http://is.gd/P0cP0Efrom Leagle.com. SUNTECH POWER: Reports $358 Million Revenue in Fourth Quarter ------------------------------------------------------------- Suntech Power Holdings Co., Ltd., announced preliminary financial results for the fourth quarter and full year ended Dec. 31, 2012. Preliminary results indicate that Suntech's shipments of photovoltaic (PV) products for the fourth quarter of 2012 declined by approximately 4 percent from the third quarter of 2012. Revenues in the fourth quarter of 2012 were approximately $358 million, a sequential decline of 8 percent. Approximately 91 percent of revenues were generated from the sale of PV modules, and 9 percent of revenues were generated from the sale of PV systems, cells, silicon wafers and production equipment. Gross margin in the fourth quarter of 2012 was approximately 0.4 percent. In the full year 2012, preliminary results indicate Suntech shipped approximately 1.8GW of PV products, in line with prior guidance. Revenues for the full year 2012 were approximately $1,625 million, a year-over-year decline of 48 percent. Approximately 92 percent of revenues were generated from the sale of PV modules, and 8 percent of revenues were generated from the sale of PV systems, cells, silicon wafers and production equipment. Gross margin for the full year 2012 was approximately negative 1.4 percent. "We are undertaking a number of restructuring initiatives to address Suntech's balance sheet and improve the Company's cost structure and operational efficiency. We are making progress and are evaluating solutions that will take into account the rights and interests of all of our stakeholders. In the meantime, we continue to manufacture and deliver high-quality solar products to our global customers," said David King, Suntech's CEO. Update on Restructuring Initiatives Wuxi Suntech, the Company's Chinese subsidiary, which is in the process of restructuring, continues to work with the court- appointed administrator and its stakeholders to improve its financial position and outlook. The administrator has scheduled a Wuxi Suntech creditors meeting in Wuxi on May 22, 2013, earlier than previously anticipated, to present and discuss potential solutions. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. As reported by the TCR on March 20, 2013, Suntech Power Holdings Co., Ltd., has received from the trustee of its 3% Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. THERAPEUTICSMD INC: Robert Smith Owned 9% Stake at April 30 ----------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Robert J. Smith and his affiliates disclosed that, as of April 30, 2013, they beneficially owned 13,054,426 shares of common stock of TherapeuticsMD, Inc., representing 9.66% of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/bRPcrc Boca Raton, Florida-based TherapeuticsMD, Inc. (OTC QB: TXMD) is a women's healthcare product company focused on creating and commercializing products targeted exclusively for women. The Company currently manufactures and distributes branded and generic prescription prenatal vitamins as well as over-the-counter vitamins and cosmetics. The Company is currently focused on conducting the clinical trials necessary for regulatory approval and commercialization of advanced hormone therapy pharmaceutical products designed to alleviate the symptoms of and reduce the health risks resulting from menopause-related hormone deficiencies. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2012, Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about TherapeuticsMD's ability to continue as a going concern, citing the Company's loss from operations of approximately $16 million and negative cash flow from operations of approximately $13 million. The Company reported a net loss of $35.1 million on $3.8 million of revenues in 2012, compared with a net loss of $12.9 million on $2.1 million of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed $5.8 million in total assets, $7.2 million in total liabilities, and a stockholders' deficit of $1.4 million. TIMEGATE STUDIOS: Files for Bankruptcy, Looks for Buyer ------------------------------------------------------- Patrick Fitzgerald, writing for The Wall Street Journal's Bankruptcy Beat, reported that TimeGate Studios Inc., a video game developer behind "Section 8" and "Aliens: Colonial Marines," has filed for bankruptcy and has put its business on the auction block after an appellate court reinstated a $9 million judgment against the company. According to the BankruptcyBeat report, TimeGate's lenders have agreed to serve as the stalking horse, or lead bidder, for an auction of the company's assets in a deal valued at $2.6 million. The purchase price, which must include at least $150,000 in cash, is subject to higher bids at a bankruptcy auction. Read the bid rules here. The videogame developer employs 33 people at its Sugar Land, Texas, headquarters, according to an affidavit filed by John Young, the company's chief restructuring officer, the report related. It listed assets of less than $10 million and debt of less than $50 million its bankruptcy petition filed Wednesday for Chapter 11 protection in U.S. Bankruptcy Court in Houston. The company filed for bankruptcy after the Fifth U.S. Circuit Court of Appeals reinstated a $9 million arbitration award for videogame publisher SouthPeak against TimeGate their dispute over Section 8, the report said. The two companies have been embroiled in litigation over the game since 2009. Young said TimeGate has a "critical need" to sell it assets outside of a Chapter 11 plan in order to successfully launch its latest shooter game, "Minimum," the report further related. That game is projected to generate sales of $30 million to $75 million in the next 3 1/2 years. TimeGate's biggest shareholders are Alan B. Chavelah and Morteza Baharloo, who each own 34.9% of the shares in the company, the report said. A TimeGate representative couldn't be reached for comment. TRANS-LUX CORP: Maturity of People's United Loan on June 30 ----------------------------------------------------------- Trans-Lux Corporation entered into amendment no. 23 to the Credit Agreement with People's United Bank, dated as of March 31, 2013. The Credit Agreement, as amended, provides for a reduction of the revolving loan commitment from $700,000 to: (i) $624,000 through May 9, 2013; (ii) $599,999 from May 10, 2013, through June 9, 2013; and (iii) $574,000 as of June 10, 2013. The Credit Agreement, as amended, also provides for an extension of the maturity of the Credit Agreement through June 30, 2013. As of April 29, 2013, the Company has drawn the full balance of $624,000 against the revolving loan facility. The Amendment also provided for the revision of the minimum tangible worth covenant contained in the Credit Agreement. A copy of the Amendment is available for free at http://is.gd/vh3Uia About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $23.62 million in total assets, $20.37 million in total liabilities, and $3.25 million in total stockholders' equity. TRINSUM GROUP: Court Okays $2.5MM Settlement Resolving 20 Suits --------------------------------------------------------------- The stage is set for Trinsum Group Inc. and Integrated Finance Ltd.'s joint plan of liquidation to be declared effective. On April 30, Marianne O'Toole, as distributing agent for the estates of Trinsum Group and Integrated Finance, won bankruptcy court approval of a $2.57 million global settlement resolving 20 adversary proceedings against various defendants. The Settlement is essential to the effectiveness of the confirmed plan in the Debtors' cases. A copy of Judge Glenn's April 30, 2013 Memorandum Opinion is available at http://is.gd/ncEBdgfrom Leagle.com. The adversary proceedings were brought by the Distributing Agent against the defendants, either on the basis of avoidance actions or director and officer liability. The defendants are: (i) The Estate of William Alberts, et al. (Adv. Proc. No. 10-03282); (ii) Eric Armour (Adv. Proc. No. 10-03299); (iii) The Estate of Craig Best, et al. (Adv. Proc. No. 10-03300); (iv) Dominic Dodd (Adv. Proc. No. 10-03301); (v) Paul F. Favaro (Adv. Proc. No. 10-03302); (vi) Michael Scott Gillis (Adv. Proc. No. 10-03303); (vii) Ramesh Karnani (Adv. Proc. No. 10-03304); (viii) The Estate of Peter W. Kontes, et al. (Adv. Proc. No. 10-03305); (ix) D. Stewart Lade (Adv. Proc. No. 10-03306); (x) Bruno Mathieu (Adv. Proc. No. 10-03307,); (xi) John McDermott (Adv. Proc. No. 10-03308); (xii) Leroy J. Mergy (Adv. Proc. No. 10-03310); (xiii) Robert S. Ruotolo (Adv. Proc. No. 10-03313); (xiv) Joseph Shalleck (Adv. Proc. No. 10-03314); (xv) Eugene Shanks; (xvi) Brian Burwell (Adv. Proc. No. 11-01291); (xvii) Ronald Langford (Adv. Proc. No. 11-01289); (xviii) Michael Popiel, (xix) The Estate of Simon Ozanne, et al., (xx) Kenneth R. Favaro, and (xxi) James McTaggart (Adv. Proc. No. 11-01292). The Settlement requires the dismissal of the Adversary Proceedings and the release of all defendants in the Proceedings in exchange for the payment by Illinois National Insurance Company, as insurer, of $2,575,000, and the issuance of a Bar Order and Injunction, enjoining the Distributing Agent and each of the defendants in the Adversary Proceedings from commencing or continuing any action against each other or the Insurer. More importantly the Bar Order would enjoin the "third-party beneficiary non-signatories" -- certain defendants in the D&O Adversary Proceedings who have elected not to join the Settlement, but who will receive the benefits of the agreement assuming the Bar Order is entered -- from pursing any claims related to the Adversary Proceedings against the Debtors' estate, the settling defendants, the Distributing Agent, her counsel, or the Insurer. The Insurer has also agreed to pay Defense Costs for all defendants in the Litigations, subject to billing issues that may arise, without diminishing the Settlement Sum. Judge Glenn overruled objections filed by directors Roberto G. Mendoza and David H. Deming against the Settlement. Nothing in the Settlement however limits the rights of Messrs. Mendoza or Deming (or any of the settling defendants) to obtain reimbursement from the Insurer for their defense costs. About Trinsum On July 3, 2008, an involuntary petition (Bankr. S.D.N.Y. Case No. 08-12547) was filed against Trinsum Group Inc., as successor in interest by merger of Marakon Associates, Inc., and Integrated Finance Limited, LLC. On Jan. 29, 2009, the Court converted the case to a case under chapter 11. On Nov. 10, 2010, an Order confirming the Debtors' First Modified Joint Plan of Liquidation was entered and Marianne T. O'Toole was appointed as the Distributing Agent. The Plan has not yet become effective. SilvermanAcampora LLP's Gerard R. Luckman, Esq., and Jay S. Hellman, Esq., represent the Distributing Agent. UNIGENE LABORATORIES: Richard Levy Had 65.4% Stake at April 25 -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Richard Levy and his affiliates disclosed that, as of April 25, 2013, they beneficially owned 164,072,618 shares of common stock of Unigene Laboratories, Inc., representing 65.4% of the shares outstanding. A copy of the regulatory filing, as amended, is available for free at http://is.gd/c6Kv61 About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene disclosed a net loss of $34.28 million on $9.43 million of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $7.09 million on $20.50 million of total revenue during the prior year. The Company incurred a $32.53 million net loss in 2010. The Company's balance sheet at Dec. 31, 2012, showed $11.31 million in total assets, $110.05 million in total liabilities and a $98.73 million total stockholders' deficit. Grant Thornton LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred a net loss of $34,286,000 during the year ended Dec. 31, 2012, and, as of that date, has an accumulated deficit of approximately $216,627,000 and the Company's total liabilities exceeded total assets by $98,740,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "We had cash flow deficits from operations of $3,177,000 for the year ended December 31, 2012, $6,766,000 for the year ended December 31, 2011 and $1,669,000 for the year ended December 31, 2010. Our cash and cash equivalents totaled approximately $3,813,000 on December 31, 2012. Based upon management's projections, we believe our current cash will only be sufficient to support our current operations through approximately March 31, 2013. Therefore, we need additional sources of cash in order to maintain all or a portion of our operations. We may be unable to raise, on acceptable terms, if at all, the substantial capital resources necessary to conduct our operations. If we are unable to raise the required capital, we may be forced to close our facilities and cease our operations. If we are unable to resolve outstanding creditor claims, we may have no other alternative than to seek protection under available bankruptcy laws. Even if we are able to raise additional capital, we will likely be required to limit some or all of our research and development programs and related operations, curtail development of our product candidates and our corporate function responsible for reviewing license opportunities for our technologies." UNIFIED 2020 REALTY: Files Bare-Bones Petition in Dallas -------------------------------------------------------- Unified 2020 Realty Partners, LP, filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-32425) in its home-town in Dallas on May 6. The Debtor disclosed $34 million in total assets and $21 million in liabilities. The Debtor says it owns and leases infrastructure critical to telecommunications companies and data center facilities. The Debtor is represented by Arthur I. Ungerman, Esq., in Dallas. UNITEK GLOBAL: Has Forbearance with Lenders Until May 30 -------------------------------------------------------- UniTek Global Services, Inc., on April 30, 2013, entered into forbearance agreements with the Company's lenders under its Term Credit Agreement and Revolving Credit Agreement: The "Term Credit Agreement" means that certain Credit Agreement, dated as of April 15, 2011, among the Company, the several banks and other financial institutions or entities from time to time parties thereto, and FBR Capital Markets LT, Inc., as documentation agent, syndication agent and administrative agent. The "Revolving Credit Agreement" means that certain Revolving Credit and Security Agreement, dated as of April 15, 2011, among the Company, certain subsidiaries thereof, the several banks and other financial institutions or entities from time to time parties thereto, and PNC Bank, National Association, as agent. The Forbearance Agreements describe certain Events of Default that have occurred or may occur in the future and provides that the parties to the Forbearance Agreements have agreed to a standstill period in respect of those Events of Default for a period during which, among other things, the Company will have the opportunity to deliver audited financial statements and related deliverables. That standstill period will terminate on the earlier of: (i) the earlier of (A) May 30, 2013, and (B) the delivery of the Company's audited financial statements for fiscal year 2012 to the Company by its auditors; or (ii) the occurence of certain events of defaults. Pursuant to the Term Forbearance Agreement, the Company will pay to the Term Lenders a forbearance fee equal to 0.50% of the principal amount of the outstanding Term Loans as of the effective date of the Term Forbearance Agreement, which fee will be added to the principal amount of the outstanding Term Loans as of that effective date. Pursuant to the Revolver Forbearance Agreement, the Company will pay to the Revolver Lenders a forbearance fee of $50,000. The Revolver Forbearance Agreement contains other covenants and restrictions customary to those agreements. Copies of the Forbearance Agreements are available for free at: http://is.gd/Z0OmcV http://is.gd/BkOqKa UniTek Global Services, Inc., based in Blue Bell, Pennsylvania, provides fulfillment and infrastructure services to media and telecommunication companies in the United States and Canada. As reported by the TCR on April 23, 2013, Moody's Investors Service lowered all of Unitek Global Services, Inc.'s credit ratings by two notches including its Corporate Family Rating to Caa1 from B2. These actions follow the company's announcement that as a result of revenue recognition issues at its Pinnacle Wireless division, Unitek's previously issued consolidated financial statements dating back to the interim period ended Oct. 1, 2011, should no longer be relied upon, including with regards to the effectiveness of internal control over financial reporting. In the April 19, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Blue Bell, Pa.-based UniTek Global Services Inc., to 'CCC' from 'B+'. "The rating actions follow UniTek's report that certain employees in its Pinnacle Wireless subsidiary engaged in fraud that resulted in improper revenue recognition," said Standard & Poor's credit analyst Michael Weinstein. VILLAGE AT LAKERIDGE: Insider Status Unchanged by Claim Assignment ------------------------------------------------------------------ The U.S. Bankruptcy Appellate Panel for the Ninth Circuit ruled in April that a bankruptcy court erred in determining that, by acquiring an insider claim, the buyer also automatically became a statutory insider of the debtor. According to the BAP, there is a logical and legal inconsistency in the bankruptcy court's reasoning that the assignment of a claim by itself may change the insider status of the claimant. If assignment of an insider claim to a non-insider alone changes the non-insider's status to insider, then it would follow that an assignment or purchase of a non-insider claim by an insider would change the insider into a non-insider. The BAP was ruling on an appeal by The Village at Lakeridge, LLC, a debtor that owned and operated a commercial real estate development in Reno, Nevada. Lakeridge purchased the Property in January 2004 and financed the purchase with a loan, evidenced by a promissory note, from Greenwich Financial Products, Inc. Apparently, USB now holds the fully secured claim for the balance due on this loan, which amounts to about $10 million; this is the only secured claim in the bankruptcy case. The sole member of Lakeridge is MBP Equity Partners 1, LLC. Kathie Bartlett is a member of the board of managers of MBP. The only unsecured claim listed in Lakeridge's bankruptcy schedules was one for $2,761,000 held by MBP. Bartlett signed the bankruptcy petition and all related documents on behalf of Lakeridge. Lakeridge filed a Disclosure Statement and Plan of Reorganization on September 14, 2011. That Plan was amended on November 4, 2011, and January 12, 2012. The only claims addressed in the Disclosure Statement and Plan were the fully secured claim of USB and the MBP Claim. On October 27, 2011, Dr. Robert Rabkin purchased the MBP Claim for $5,000. A Notice of Assignment of the MBP Claim to Rabkin was filed with the bankruptcy court on November 4, 2011. A hearing was held on the Disclosure Statement on November 7, 2011. It does not appear that the Rabkin assignment was discussed at the hearing. The bankruptcy court approved the Disclosure Statement by order on November 23, 2011. Bartlett was deposed by USB on February 9, 2012, in her capacity as a representative of Lakeridge. On June 7, 2012, Rabkin testified at a USB deposition. Early in his deposition, Rabkin testified that he had attended a meeting one hour before the deposition with his counsel and counsel for Lakeridge. When asked what he discussed with Lakeridge's counsel, Lakeridge's attorney objected, invoking the "common interest privilege." Rabkin's counsel joined in the objection and ultimately directed Rabkin not to answer the question. Rabkin testified to the following matters in that deposition: (1) that he had both a business and close personal relationship with Bartlett; (2) that he saw Bartlett regularly, including on the day of the deposition; and (3) that he purchased the MBP Claim for $5,000 as a business investment and expected to be paid a pro rata dividend of $30,000 under the Lakeridge plan. Near the end of the deposition, USB, through counsel, offered to purchase the MBP Claim from Rabkin for $50,000; when he declined, counsel increased the offer to $60,000. Rabkin did not accept the offer. Shortly after the Rabkin deposition, USB by letter requested that the bankruptcy court intervene in two discovery disputes in the bankruptcy case: (1) whether the common interest privilege applied so as to protect disclosure of communications between Rabkin and Lakeridge's counsel; and (2) to compel Bartlett to sit for a second deposition, this time in her individual capacity as opposed to her first deposition as representative of Lakeridge. The bankruptcy court held a hearing on June 21, 2012, on USB's Discovery Requests. After reviewing letter briefs from USB, Lakeridge and Rabkin, and hearing from their counsel, the court ruled on the record that the Ninth Circuit's decision in United States v. Gonzalez, 669 F.3d 974 (9th Cir. 2012) supported the application of the common interest privilege in this case and denied USB's request to compel Rabkin to disclose his communications with Lakeridge's attorneys. As to USB's request for a second deposition for Bartlett, the court ruled that she had been extensively examined already and the court would not require a second examination. On July 1, 2012, USB filed the Designation Motion. USB contended in that motion that Rabkin was a statutory insider by virtue of the assignment of the MBP insider claim to him, and that he was a non-statutory insider because of his relationship with Bartlett. USB also argued that the assignment of the claim to Rabkin was in bad faith. Lakeridge responded, arguing that Rabkin was neither a statutory nor a non-statutory insider, and that there was no bad faith involved in Rabkin's acquisition of the claim. Rabkin said he purchased the MBP Claim as a business investment with the expectation of receiving a $30,000 return through the Lakeridge plan on a $5,000 investment. USB contends that Rabkin was involved in a romantic relationship with Bartlett, a principal of Lakeridge, and conspired with her to acquire the MBP claim solely to accept Lakeridge's plan. USB insists that Rabkin did not act in accordance with his financial interests, and as evidence, it points to his deposition where counsel for USB offered Rabkin $50,000, and then $60,000, to acquire his claim, which would generate an immediate profit of $20,000-30,000 above what Rabkin expected to gain through the plan. According to USB, Rabkin's refusal to take the bait clearly demonstrated his motive in the case was something other than financial gain. The bankruptcy court held an evidentiary hearing on the Designation Motion on August 1, 2012. USB, Lakeridge, and Rabkin were represented by counsel, and Rabkin and Bartlett testified. Rabkin expressed outrage that he was pressured to make a deal in the context of a deposition hearing. The court agreed that USB's tactic was "appalling" and apologized "on behalf of the legal profession" for USB's counsel's behavior. The court characterized USB's ploy during the deposition as "offensive" and noted that Rabkin was under no obligation to accept the offer. The court also decided that Rabkin's purchase of a $2,671,000 unsecured claim under these circumstances for $5,000, with a $30,000 expected gain, was an example of a speculative investment and that no special due diligence was required by Rabkin. The court granted the Designation Motion in part and denied it in part. The court entered an order to memorialize its ruling on August 20, 2012. First, the Designation Order recited that "The court finds and concludes as a matter of law that Dr. Rabkin is not a non- statutory insider because, among other things: (a) Dr. Rabkin does not exercise control over the Debtor; (b) Dr. Rabkin does not cohabit with Ms. Bartlett and does not pay Ms. Bartlett's bills or living expenses; (c) Dr. Rabkin has never purchased expensive gifts for Ms. Bartlett." The bankruptcy court also concluded that the converse was true: that Bartlett exercised no such control or provided gifts to Rabkin. Next, the bankruptcy court decided that the MBP Claim "was not assigned to Dr. Rabkin in bad faith." It explained that Dr. Rabkin was not compelled to sell his claim to USB, his purchase of the MBP claim was a legitimate investment, and that Bartlett never asked him to vote in favor of the plan. However, the bankruptcy court reasoned, "Because [MBP] is a statutory insider, Dr. Rabkin, as the assignee of the claim, acquired the same status as a statutory insider when he purchased the claim." The court supported its conclusion with citation to several authorities. The Designation Order gave no other explanation for its ruling that Rabkin was a statutory insider. As a consequence, the court decided that "[b]ecause Dr. Rabkin's vote cannot be considered for voting purposes in order to confirm the Debtor's Plan, the Debtor does not have an impaired, assenting class of claims necessary to confirm his Plan." Lakeridge and Rabkin both filed timely appeals of the Designation Order. USB also filed a timely cross-appeal challenging the provision of the Designation Order that Rabkin was not a non- statutory insider, and also seeking review of the bankruptcy court's prior order denying the Discovery Requests. In its ruling, the BAP affirmed that part of the bankruptcy court's order denying the Discovery Requests that Bartlett need not submit to a second deposition. It vacated the part of that order that the common interest privilege applied to Rabkin's discussions with Lakeridge's attorney. As to the Designation Order, the BAP affirmed the bankruptcy court's decision that Rabkin is not a non-statutory insider, and affirmed its decision declining to designate that Rabkin's acceptance of the plan was not in good faith for purposes of 11 U.S.C. Sec. 1126(e). The BAP reversed the bankruptcy court's decision that Rabkin is a statutory insider, and reversed the decision excluding Rabkin's vote to accept the plan. The BAP vacated that part of the order deciding that the Debtor does not have an impaired, assenting class of claims necessary to confirm the plan, and the decision denying confirmation of the Lakeridge plan of reorganization. The BAP remanded the matters to the bankruptcy court for further proceedings consistent with the BAP's decision. The appellate case is, THE VILLAGE AT LAKERIDGE, LLC, fka Magnolia Village, LLC; ROBERT ALAN RABKIN, M.D., Appellants/ Cross- appellees, v. U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, N.A., AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE REGISTERED HOLDERS OF GREENWICH CAPITAL COMMERCIAL FUNDING CORP., COMMERCIAL MORTGAGE TRUST 2005-GG3, COMMERCIAL MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-GG3, BY AND THROUGH, CWCAPITAL ASSET MANAGEMENT LLC, SOLELY IN ITS CAPACITY AS SPECIAL SERVICER, Appellee/ Cross-appellant, BAP No. NV-12-1456-PaKiTa, No. NV-12- 1474-PaKiTa (Cross-appeals) (9th Cir. BAP). A copy of the Court's April 5, 2013 Memorandum is available at http://is.gd/sRdAPKfrom Leagle.com. The Village At Lakeridge LLC, fka Magnolia Village LLC, in Reno, Nevada, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-51994) on June 16, 2011. Judge Bruce T. Beesley oversaw the case. The Law Offices of Alan R. Smith, Esq. -- mail@asmithlaw.com -- served as the Debtor's counsel. In its petition, the Debtor scheduled $9,480,180 in assets and $18,957,268 in debts. A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-51994.pdf The petition was signed by Kathie Bartlett. VPR OPERATING: Hires Patton Boggs as Counsel -------------------------------------------- VPR Operating LLC asks the U.S. Bankruptcy Court for permission to employ Patton Boggs LLP as bankruptcy counsel. Robert W. Jones attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtors paid Patton Boggs a retainer in the amount of $150,000. Before the commencement of the Debtors' bankruptcy proceedings, Patton Boggs offset $63,092.50 of prepetition fees and expenses incurred during the course of assisting the Debtors with matters relating to the commencement of such proceedings. Patton Boggs intends to hold its $86,907.50 retainer balance as security throughout the Debtors' bankruptcy cases until the firm's fees and expenses are awarded by a final Court order. If any portion of the Retainer remains unearned at the conclusion of these cases, Patton Boggs will return the unearned portion of the Retainer to the Debtors, without interest. The firm can be reached at: Robert W. Jones Brent McIlwain 2000 McKinney Avenue, Suite 1700 Dallas, TX 75201 Tel: (214) 758-1500 Fax: (214) 758-1550 E-mail: rwjones@pattonboggs.com bmcilwain@pattonboggs.com About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. VPR estimated assets and debts of at least $50 million. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. WARNER MUSIC: To Reprice $492 Million Secured Term Loan ------------------------------------------------------- WMG Acquisition Corp. is seeking to reprice outstanding indebtedness under its existing senior secured term loan facility to reduce the interest rate on approximately $492 million of Outstanding Indebtedness. The repricing will replace the Outstanding Indebtedness with term loans that the Company currently expects to have the same terms as indebtedness to be incurred under the Company's proposed $820 million delayed draw senior secured term loan. The proposed repricing is subject to market and other conditions. About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. On July 20, 2011, the Company notified the New York Stock Exchange, Inc., of its intent to remove the Company's common stock from listing on the NYSE and requested that the NYSE file with the SEC an application on Form 25 to report the delisting of the Company's common stock from the NYSE. On July 21, 2011, in accordance with the Company's request, the NYSE filed the Form 25 with the SEC in order to provide notification of that delisting and to effect the deregistration of the Company's common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. On August 2, 2011, the Company filed a Form 15 with the SEC in order to provide notification of a suspension of its duty to file reports under Section 15(d) of the Exchange Act. The Company continues to file reports with the SEC pursuant to the Exchange Act in accordance with certain covenants contained in the instruments governing the Company's outstanding indebtedness. Warner Music incurred a net loss attributable to the Company of $112 million for the fiscal year ended Sept. 30, 2012, compared with a net loss attributable to the Company of $31 million for the period from July 20, 2011, through Sept. 30, 2011. The Company's balance sheet at Dec. 31, 2012, showed $5.19 billion in total assets, $4.33 billion in total liabilities and $864 million in total equity. * * * As reported by the TCR on Feb. 13, 2013, Standard & Poor's Ratings Services placed its ratings on New York City-based recorded music and music publishing company Warner Music Group (WMG) on CreditWatch with negative implications. This action follows the company's announcement that it has entered into a definitive agreement to acquire U.K.-based Parlophone Label Group for about $765 million in cash. WCA WASTE: Moody's Affirms 'B2' CFR & Rates New $372MM Debt 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to WCA Waste Corporation's $100 million revolving credit facility and $272 million term loan, which will replace facilities of the same size. Moody's also affirmed the company's B2 corporate family, B3-PD probability of default, and $3 million notes Caa2 ratings. The ratings on the outstanding revolver and term loan will be withdrawn upon closing of the new loans. The rating outlook is stable. Ratings: Corporate Family Rating: Affirmed B2 Probability of Default: Affirmed B3-PD $100 million revolving credit facility due March 2017: Assigned B1/LDG3-31 $272 million first lien term loan due March 2018: Assigned B1/LDG3-31 $3 million 7.50% notes due June 2019: affirmed Caa2/LGD5-84 Outlook: Stable Ratings Rationale: The B2 corporate family rating reflects WCA's small revenue base, limited interest coverage metrics, consistently low returns, and light free cash flow generation. The rating also contemplates that the operating environment should improve as U.S. solid waste volumes, which have declined for several years, begin growing in 2013. WCA's geographically southern U.S. focused portfolio of collection and disposal operations should benefit from a positive volume trend in this region. Versus peers, the company's revenue base is small and more heavily focused on disposal, rather than hauling, while its landfills are focused on construction and demolition waste streams. Construction and demolition waste volumes typically lag economic growth which may limit WCA's realization of better operating statistics until 2014. Indeed, 2012 performance fell short of Moody's expectation set at the time the company was taken private, though not enough to warrant a rating change. The rating considers that WCA will likely focus on growth spending and modest debt reduction. Moody's notes the replacement facility will have relaxed covenants, including maintenance of leverage and interest covenants at current levels (5.50x Debt/EBITDA and 2.50x, respectively) instead of tightening over time (to 4.75x and 2.75x), removal of the $150 million accordion limit, and a higher permitted leverage (4.75x) ratio for the increase in outstanding term loans. Moody's views the liquidity profile to be adequate. The replacement $100 million revolving credit expires in March 2017. $88 million of availability existed year end 2012, net of letter of credit utilization, a good amount for the company's size. The proposed credit facility features 5.5x maximum total leverage and 2.5x minimum interest coverage tests for the life of the loans. Moody's expects adequate covenant headroom in the near term and current maturities should be about $3 million. Moody's anticipates a fairly limited amount of free cash flow generation over the next twelve months that will likely be directed toward helping fund acquisition spending. There could be an interim need to fund working capital or capital expenditure through the revolving credit facility. The rating outlook is stable as Moody's expects the company's focus on expansion spending will likely continue, which will limit the degree of debt reduction possible from the better operating environment. Compared to peers, WCA's performance has been relatively volatile over the past few years given its greater exposure to construction and demolition markets, which make the earnings profile more economically sensitive. Strategic investments will likely be undertaken to raise the waste network's return profile and make earnings/cash flow more resilient. The loosening of bank covenants concurrent to the bank loan refinancing might signal an appetite for higher leverage than recently reported. Upward rating momentum would depend on EBIT to interest approaching 2x with free cash flow to debt in the mid-single digit percentage range. The company's small scale is a limiting factor to any upward rating momentum. Downward rating pressure would develop with EBIT to interest below 1x, continuation of negative free cash flow or a weakening liquidity profile. Of late, EBIT to interest has been below 1x, though the other measures have outperformed the downgrade threshold. The principal methodology used in this rating was the Solid Waste Management Industry Methodology published in February 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. WCA Waste Corporation, based in Houston, TX, is a provider of non- hazardous solid waste management services. Revenues in the twelve months ending March 31, 2013, were about $260 million. WCA has been owned by Macquarie Infrastructure Partners II, an infrastructure investment fund managed by Macquarie Group Limited, since March 2012. The company's operations cover 12 states, primarily in the south and southeastern U.S. states. WESTMORELAND COAL: J. Gendell Held 16.5% Stake as of April 29 ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Jeffrey L. Gendell and his affiliates disclosed that, as of April 29, 2013, they beneficially owned 2,387,456 shares of common stock of Westmoreland Coal Company representing 16.5% of the shares outstanding. Mr. Gendell previously reported beneficial ownership of 2,677,150 common shares or 18.9% equity stake as of Jan. 2, 2013. A copy of the amended regulatory filing is available at http://is.gd/wdmULX About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal incurred a net loss of $13.66 million in 2012, a net loss of $36.87 million in 2011, and a net loss of $3.17 million in 2010. The Company's balance sheet at March 31, 2013, showed $943.01 million in total assets, $1.22 billion in total liabilities and a $286.53 million total deficit. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." Westmoreland Coal carries a Caa1 corporate family rating from Moody's Investors Service. YRC WORLDWIDE: Incurs $24.5 Million Net Loss in First Quarter ------------------------------------------------------------- YRC Worldwide Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $24.5 million on $1.16 billion of operating revenue for the three months ended March 31, 2013, as compared with a net loss attributable to the Company of $85.5 million on $1.19 billion of operating revenue for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $2.20 billion in total assets, $2.84 billion in total liabilities and a $642.6 million total shareholders' deficit. "Despite more difficult winter weather conditions in the first quarter of 2013 as compared to an unusually mild winter in 2012, our year-over-year operating results continue to improve," stated James Welch, chief executive officer of YRC Worldwide. "As we have said previously, 2013 is a year of performance, and to that end, the year-over-year 500 basis point improvement in our operating ratio from 104.1 in 2012 to 99.1 in 2013 is evidence of such performance. These results are due to a rational pricing environment for both YRC Freight and the Regional segment, and the productivity improvements along with the customer mix management effort at YRC Freight specifically. We still have significant opportunity for further improvements, and as we move throughout 2013, we will continue to focus on providing premium services to both the regional and long-haul segments of the LTL market and growing the business, all while providing our customers the high- quality service they deserve," said Welch. A copy of the Form 10-Q is available for free at: http://is.gd/lWLhXm About YRC Worldwide Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ: YRCW) -- http://www.yrcw.com/-- is a holding company that offers its customers a wide range of transportation services. These services include global, national and regional transportation as well as logistics. After auditing the 2011 results, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. KPMG LLP, in Kansas City, Missouri, noted that the Company has experienced recurring net losses from continuing operations and operating cash flow deficits and forecasts that it will not be able to comply with certain debt covenants through 2012. For the year ended Dec. 31, 2012, the Company incurred a net loss of $136.5 million on $4.85 billion of operating revenue, as compared with a net loss of $354.4 million on $4.86 billion of operating revenue during the prior year. * * * As reported in the Aug. 2, 2011 edition of the TCR, Moody's Investors Service revised YRC Worldwide Inc.'s Probability of Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in recognition of the agreed debt restructuring which will result in losses for certain existing debt holders. In a related action Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca to reflect modest but critical improvements in the company's credit profile that should result from its recently-completed financial restructuring. The positioning of YRCW's PDR at Caa2\LD reflects the completion of an offer to exchange a substantial majority of the company's outstanding credit facility debt for new senior secured credit facilities, convertible unsecured notes, and preferred equity, which was completed on July 22, 2011. In August 2011, Standard & Poor's Ratings Services raised its corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD' (selective default), after YRC completed a financial restructuring. Outlook is stable. "The ratings on Overland Park, Kan.-based YRCW reflect its participation in the competitive, capital-intensive, and cyclical trucking industry," said Ms. Ogbara, "as well as its meaningful off-balance-sheet contingent obligations related to multiemployer pension plans." "YRCW's substantial market position in the less- than-truckload (LTL) sector, which has fairly high barriers to entry, partially offsets these risk factors. We categorize YRCW's business profile as vulnerable, financial profile as highly leveraged, and liquidity as less than adequate." ZOGENIX INC: Posts Positive Top-Line Results From Clinical Trial ---------------------------------------------------------------- Zogenix, Inc., announced positive top-line results from its extended Phase 1 clinical trial of ReldayTM, an investigational candidate of a proprietary, once-monthly subcutaneous formulation of risperidone for the treatment of schizophrenia. The Phase 1 clinical trial was conducted as a single-center, open-label, safety and pharmacokinetic trial of 40 patients with chronic, stable schizophrenia or schizoaffective disorder across a dose range of 25, 50 and 100 mg. Adverse events in the Phase 1 trial in patients diagnosed with schizophrenia were generally mild to moderate and consistent with other risperidone products. The extended Phase 1 clinical trial included a 100 mg dose of Relday, following previously reported positive results with 25 and 50 mg doses. The results for the extended Phase 1 clinical trial showed risperidone blood concentrations in the therapeutic range were achieved on the first day of dosing and maintained throughout the one-month period. In addition, dose proportionality has now been established across the full dose range that would be anticipated to be used in clinical practice (50 to 100 mg). The positive results from this study extension position Zogenix to begin a multi-dose clinical trial, which would provide the required steady-state PK and safety data prior to initiating Phase 3 development studies, subject to Zogenix securing a development and commercialization partner prior to initiation of the multi- dose trial. The development of Relday will first focus on its delivery by conventional needle and syringe in order to allow the administration of different volumes of the same formulation of Relday by a healthcare professional. Zogenix anticipates that the introduction of the DosePro needle-free technology for administration of Relday can occur later in development or as part of life cycle management after further work involving formulation development, technology enhancements, and applicable regulatory approvals. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Zogenix incurred a net loss of $47.38 million in 2012, as compared with a net loss of $83.90 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $80.68 million in total assets, $66.21 million in total liabilities and $14.47 million in total stockholders' equity. Ernst & Young LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses from operations and lack of sufficient working capital which raise substantial doubt about the Company's ability to continue as a going concern. * Fitch Says U.S. Auto Lender Asset Quality to Further Weaken ------------------------------------------------------------- U.S. auto lenders will likely report further weakening in asset quality metrics this year, driven mainly by lower used car values, a loosening of underwriting terms and further seasoning of loan portfolios, according to Fitch. Credit losses and delinquency rates increased on a year-over-year basis for all major auto lenders in the first quarter, and we expect that trend to continue as asset quality metrics retreat from historically strong levels reported in 2012. For Fitch-rated issuers, average credit losses increased 16 bps year-over-year in 1Q'13, and delinquencies were 67 bps higher than the year-earlier quarter. "We view double-digit increases in auto leasing volumes for some issuers with caution, particularly since used car values will likely return to more typical levels after recent rises. Used car values will come under pressure as secondary market supply grows in the wake of stronger new car sales and higher lease volumes. This supply pressure is likely to build late this year and into 2014," Fitch says. Record used car prices have already begun to moderate, and we expect residual values to come under heavier pressure as more vehicles come off lease. The moderating trend in residual values can be seen in Fitch's Auto Lease ABS Residual Value Index, which increased by 5.75% in 1Q'13, down from an increase of 11.11% in 4Q'12. Auto lessors typically set residual values conservatively when they underwrite leases. However, increasing competition may drive residual values higher as lessors look to attract consumers with lower monthly payments. The expected weakening in asset quality for auto lenders is occurring after a period of record-low losses and delinquencies, and we believe the weakening of metrics will remain within historical norms, supporting ratings. All Fitch-rated issuers have been prudent in increasing credit provisions to account for portfolio growth and moderating used car value trends. First quarter profitability remained solid for all issuers, backed by portfolio expansion, lower credit costs and cheaper funding. Credit provision increases and pricing and margin pressure due to competition will be a headwind facing issuers for the remainder of this year. Fitch-rated issuers that have reported 1Q'13 results include Ally Financial, Capital One, Ford Credit, GM Financial and JPMorgan. * Moody's Notes Divergence in European and US CDS Spreads --------------------------------------------------------- CDS five-year mid-spreads and CDS-implied ratings gaps for U.S. insurers have diverged from non-U.S. peers, says Moody's in its latest review of the Moody's Global Insurance CDS Index (MDYGIX, or the Index) performance during the first quarter of 2013, "Q1 2013 CDS Spreads: Focus on Insurers vs. Banks." This edition of the report has a special focus on the performance of U.S. banks against U.S life and multiline insurers as these two sectors of the five tracked by the Index are most comparable to banks, largely due to their high asset leverage and susceptibility to a low interest rate environment, says Moody's. The Index also tracks three other insurance sectors; U.S. P&C, global reinsurers and European insurers. "In line with the fixed income rally in financials, CDS spreads of U.S. banks and U.S. life and multiline insurers each tightened during Q1," said Scott Robinson, a Moody's Senior Vice President and an author of the report. "Over the past year, CDS-implied ratings gaps for banks have narrowed more than those for the two insurance sectors." Moody's says that it's likely that recent improvements in capital and asset quality at U.S. banks have helped drive this recovery in market sentiment relative to other financials. But that's not the case for European insurers, says Moody's. As measured by CDS spreads and CDS-implied ratings gaps, European insurers and global reinsurers performed significantly worse than U.S.-domiciled insurers. This difference in market sentiment may be attributable to investor belief that adverse impact from events in Europe will be confined to insurers in that region, says the rating agency. U.S. P&C is the only insurance sector in the Index that has a positive CDS-implied ratings gap (positive 1.8), meaning that the median CDS-implied rating for the sector is higher than the comparable Moody's rating. U.S. life insurance, once one of the most significant negative outliers, had the second best median CDS-implied ratings gap of the five insurance sectors in the Index at the end of Q1, said the rating agency. * April Bankruptcy Filings Down 8% from Previous Year ----------------------------------------------------- Total bankruptcy filings in the United States decreased 8 percent in April over last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 100,702 in April 2013, down from the April 2012 total of 108,996. Consumer filings declined 7 percent to 96,344 from the April 2012 consumer filing total of 103,798. Total commercial filings in April 2013 decreased to 4,358, representing a 16 percent decline from the 5,198 business filings recorded in April 2012. Conversely, total commercial chapter 11 filings increased 5 percent to 701 filings in April from the 666 commercial chapter 11 filings registered in April 2012. "Households and businesses continue to adjust their balance sheets in response to low interest rates, tighter lending standards and decreased consumer spending," said ABI Executive Director Samuel J. Gerdano. "These trends will continue to suppress bankruptcy filings this year." Total bankruptcy filings for the month of April represented a 2 percent decrease compared to the 102,653 total filings recorded in March 2013. Total noncommercial filings for April also represented a 2 percent decrease from the March 2013 noncommercial filing total of 98,558. However, April's commercial filing total represented a 6 percent increase from the March 2013 commercial filing total of 4,095. April commercial chapter 11 filings also increased, rising 17 percent when compared to the 597 filings registered the previous month. The average nationwide per capita bankruptcy-filing rate in April increased to 3.52 (total filings per 1,000 per population), an increase from the 3.40 rate registered in the first three months of the year. Average total filings per day in April were 3,357, an 8 percent decrease from the 3,633 total daily filings in April 2012. States with the highest per capita filing rate (total filings per 1,000 population) in April 2013 were: 1. Tennessee (6.76) 2. Georgia (5.76) 3. Alabama (5.75) 4. Illinois (5.59) 5. Nevada (5.27) ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Systems is a leading provider of managed technology for the global legal profession. For further information about the statistics or additional requests, please contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or jhartgen@abiworld.org. ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html. Epiq Systems is a leading provider of managed technology for the global legal profession. Epiq Systems offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds. Epiq System's clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq Systems, Inc., please visit http://www.epiqsystems.com/ * Fed Governor Calling for Stronger Capital at Megabanks -------------------------------------------------------- Danielle Douglas, writing for The Washington Post, reported that The Federal Reserve's point man on bank regulation, Daniel Tarullo, is calling for big banks who rely on the debt markets for financing to hold more capital, adding to the growing pressure to rein in megabanks. According to the Post report, Tarullo's proposal comes a week after Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.) introduced legislation to impose higher capital requirements on megabanks to make them safer and less dependent on government bailouts. The ultimate goal of both proposals is the same, but Tarullo is zeroing in on a niche segment of the industry and can move on his plan without congressional action, the Post said. Regulators grew concerned during the financial crisis about banks' dependence on "wholesale funding" -- debt used to purchase assets and manage operations, the Post added. The debt markets froze up during the 2008 financial crisis, forcing banks to sell off assets amid falling prices. In a speech at the Peterson Institute for International Economics on Friday, Tarullo said the financial system remains vulnerable to the risks of short-term funding shortfalls as megabanks continue to depend on the market, according to the Post. The prominent regulator said the more wholesale funding a bank uses, the more capital it should hold as a buffer against losses. "Where a firm has little need of short-term funding to maintain its ongoing business, it is less susceptible to runs," Tarullo said, the Post cited. "Where, on the other hand, a firm is significantly dependent on such funding, it may need considerable common equity capital to convince market actors that it is indeed solvent." * Flagstar to Pay $110 Million to Settle MBIA Mortgage Lawsuit -------------------------------------------------------------- Chris Dolmetsch, writing for Bloomberg News, reported that MBIA Inc (MBI) said Flagstar (FBC) Bancorp Inc. agreed to pay $110 million to settle a lawsuit accusing it of making misrepresentations to induce MBIA to insure mortgage- backed securitizations that defaulted. According to the Bloomberg report, MBIA, based in Armonk, New York, alleged that Troy, Michigan-based Flagstar sponsored two securitizations and avowed that it had originated or acquired all of the loans and each complied with underwriting guidelines, according to a complaint filed Jan. 11 in Manhattan federal court. The suit concerned about $1.1 billion of securitization transactions backed by second-lien mortgages insured by MBIA in 2006 and 2007, according to a statement issued by the company on May 3, the Bloomberg report related. Flagstar will pay $110 million in cash and other unspecified consideration, and MBIA will use the cash to repay a portion of its secured loan from National Public Finance Guarantee Corp., the company said. MBIA Chief Executive Officer Jay Brown called the settlement "consistent with our recovery expectations," Bloomberg related. "We will continue to focus on resolving our remaining litigation with other parties so that National Public Finance Guarantee Corp., our U.S. muni-only insurer, can resume its role as a leader in the U.S. public finance insurance market," he said in a statement, Bloomberg cited. The announcement is a "major milestone" in moving past the "legacy challenges" of Flagstar, Michael Tierney, the bank's CEO, said in a statement, Bloomberg further cited. Flagstar in February was ordered to pay Assured Guaranty Municipal Corp. $90.1 million the bond insurer paid when home-equity loans underlying two Flagstar mortgage-backed securities defaulted. "We can now focus more time and attention on our national mortgage business and our community banking operations in Michigan," Tierney said, according to Bloomberg. The case is MBIA Insurance Corp. v. Flagstar ABS LLC, 13- 0262, U.S. District Court, Southern District of New York (Manhattan). * Housing Crash Fades as Defaults Decline to 2007 Levels -------------------------------------------------------- John Gittelsohn, writing for Bloomberg News, reported that six years after the start of the foreclosure crisis, American homeowners are paying their mortgages like the housing crash never happened. According to the Bloomberg report, first-time delinquent home loans fell to 0.84 percent of the 50.2 million mortgages in March, the first month below 1 percent since 2007, before a wave of defaults led to the financial crisis, according to a report today by Lender Processing Services Inc. The rate of first-time defaults, defined as loans that went from performing to at least 60 days delinquent, peaked at 2.89 percent in January 2009. Bloomberg noted that the decline in new problem loans shows that the recovering U.S. economy, falling unemployment and rising home prices, combined with more than four years of banks' tightening lending standards, are propelling the worst real estate crash since the Great Depression into the rearview mirror. "Mortgage quality is improving rapidly," Mark Zandi, chief economist for Moody's Analytics Inc. told Bloomberg in a telephone interview from his office in West Chester, Pennsylvania. "Once we're able to work through this last bulge of foreclosed property, which I think we'll be able to do over the next 18 to 24 months, mortgage credit quality is going to look absolutely beautiful." Mortgages at least 30 days delinquent or in some stage of foreclosure fell to 5 million in March, down from a peak of 7.7 million in January 2010, according to Lender Processing Services, a real estate information service based in Jacksonville, Florida, Bloomberg cited. That's still more than double the 2.2 million non-current mortgages of January 2005, when the housing market was rising toward its peak. * JPMorgan Investors Urged to Split Chairman Role, Oust Directors ----------------------------------------------------------------- Dawn Kopecki, writing for Bloomberg News, reported that JPMorgan Chase & Co. (JPM) should name an independent chairman and oust three directors, a shareholder advisory firm said, boosting pressure on the bank to overhaul its corporate governance after a $6.2 billion trading loss. According to the Bloomberg report, stockholders should vote in favor of a proposal to split the roles of chairman and chief executive officer, both currently held by Jamie Dimon, at New York-based JPMorgan's annual meeting May 21, Institutional Shareholder Services said in a report. ISS, which advises investors on proxy voting and corporate governance, cited "failures of stewardship" in opposing the re-election of three risk-committee directors. Calls for Dimon, 57, to relinquish the chairmanship have mounted since last May when JPMorgan, the biggest U.S. bank by assets, disclosed risk-control lapses in its chief investment office on bets that fueled the trading loss and sparked regulatory probes, the Bloomberg report said. The May 3 ISS report could undermine the bank's efforts to persuade large investors to leave the leadership structure unchanged. ISS, which also endorsed a proposal for an independent chairman in 2012, added the call to replace directors this year, the report recalled. It cited "the governance failure in connection with the CIO incident, the size and complexity of JPM's business, and the continued challenges faced by the company." The bank's board urged investors in March to vote against naming a separate chairman, saying that Dimon's dual role remains the "most effective leadership model," Bloomberg said. He has since drawn public backing from billionaire investor Warren Buffett, who has said he personally holds stock in the bank, and Kenneth Langone, the billionaire founder of Home Depot Inc. * N.Y. Plans Homeowner Enforcement Against Financial Firms ---------------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that New York Attorney General Eric Schneiderman said he will announce new enforcement actions against major financial institutions as part of his effort to "protect New York homeowners" after calling the first such lawsuit last year a "template" for future litigation. According to the Bloomberg report, in October, Schneiderman sued JPMorgan Chase & Co., alleging that Bear Stearns, which JPMorgan took over in 2008, deceived mortgage-bond investors about defective loans backing securities they bought, leading to "monumental losses." He said the case would be a model for future actions against banks that issued mortgage bonds during the real estate boom. He sued Credit Suisse Group AG on similar grounds the next month. "We do expect this to be a matter of very significant liability, and there are others to come that will also reflect the same quantum of damages," Schneiderman said last year, Bloomberg recalled. "We're looking at tens of billions of dollars, not just by one institution, but by quite a few." New York was one of 49 states that reached a $25 billion settlement with five mortgage servicers, including Bank of America Corp. (BAC), Wells Fargo & Co., and JPMorgan, to end a probe of abusive foreclosure practices, Bloomberg said. Schneiderman's office had agreements with 12 financial institutions that preserved claims that might be filed against them, a person familiar with the matter said last year. The so-called tolling agreements prevented the statute of limitations, which bars litigation after a specific number of years have passed, from expiring. * New Problem Loan Rates Hit Six-Year Low, LPS March Report Shows ----------------------------------------------------------------- The March Mortgage Monitor report released by Lender Processing Services found that new problem loan rates (seriously delinquent mortgages that were current six months ago) have fallen below 1 percent for the first time since 2007. At 0.84 percent, the March new problem loan rate is approaching pre-crisis levels, and nearing the conditions of 2000-2004 when the rate averaged 0.55 percent. However, as LPS Applied Analytics Senior Vice President Herb Blecher explained, a borrower's equity position is still a key indicator of his or her propensity to default. "There has always been a clear correlation between higher levels of negative equity and new problem loan rates," Mr. Blecher said. "Looking at the March data, we see that borrowers with equity are actually outperforming the national average -- at 0.6 percent, this group is quite close to pre-crisis norms. The further underwater a borrower gets, the higher those problem rates rise. Borrowers with loan-to-value (LTV) ratios of just 100-110 percent are actually defaulting at more than twice the national average. For those 50 percent or more underwater, we see new problem rates of 4 percent. "Still, the overall equity trend has been a very positive one," Blecher continued. "LPS' latest data shows that the share of loans with LTVs greater than 100 percent has fallen 41 percent from a year ago. In total, there were approximately 9 million such loans, or about 18 percent of active mortgages. Some states, including the so-called 'sand states' (Arizona, Florida, Nevada and California), are still well above the national level, at an average 28 percent, but they, too, have seen improvement over the last year, with negative equity dropping over 40 percent across those four states since January 2012." The March data also showed that on the national level, foreclosure starts were down 8.2 percent month over month, while foreclosure sales rose 10.1 percent. LPS looked more specifically at that situation in California, where the recent passage of the Homeowner Bill of Rights (HBoR) appears to have slowed down the foreclosure sale process considerably. In Q1 2013, foreclosure sales nationally (excluding California) increased 13 percent from Q4 2012, whereas in California they fell 35 percent during that same period. However, the HBoR does not seem to have had a similar effect on the state's foreclosure starts which, while down significantly from 2012 levels, are in line with the rest of the nation's decline in referral activity following the attorneys general mortgage settlement and FHA modification initiatives. As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include: Total U.S. loan delinquency rate: 6.59% Month-over-month change in delinquency rate: -3.13% Total U.S. foreclosure presale inventory rate: 3.37% Month-over-month change in foreclosure pre-sale inventory rate: -0.41% States with highest percentage of non-current* loans: FL, NJ, MS, NV, NY States with the lowest percentage of non-current* loans: MT, AK, WY, SD, ND *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Totals are extrapolated based on LPS Applied Analytics' loan-level database of mortgage assets. About the Mortgage Monitor LPS manages the nation's leading repository of loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for LPS' monthly Mortgage Monitor Report. To review the full report, visit http://www.lpsvcs.com/LPSCorporateInformation/CommunicationCenter/ DataReports/Pages/Mortgage-Monitor.aspx About Lender Processing Services Lender Processing Services -- http://www.lpsvcs.com-- delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements, and mitigate risk. These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries. LPS is headquartered in Jacksonville, Fla., and employs approximately 8,000 professionals. The company is ranked on the Fortune 1000 as the 877th largest American company in 2012. * Senate Bill 404 Aims to Eliminate Abusive "Double Dip" Claims --------------------------------------------------------------- Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, made the following statement on May 7 applauding Oklahoma Governor Mary Fallin for signing into law Senate Bill 404, strong bipartisan legislation which will prevent abusive "double dip" claims against businesses and personal injury trust funds, including asbestos victims' compensation funds: "This law will go a long way toward eliminating fraud in litigation, discouraging improper 'double dipping' by plaintiffs' lawyers, and ensuring that companies and bankruptcy trusts both pay their fair share to claimants. It will also protect jobs by ensuring that Oklahoma companies are not unfairly bankrupted by fraudulent claims. "We hope Oklahoma's leadership will embolden elected officials in other states to pass similar laws to ensure that their states' tort systems work together, where needed, with personal injury trust funds to fairly compensate victims. "We commend Governor Fallin for swiftly signing this bill into law, and we also commend Senator Clark Jolley and Representative Fred Jordan, the co-authors of SB 404, for their leadership on this important issue." ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels. The U.S. Chamber of Commerce -- http://www.uschamber.com-- is the world's largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. * Cadwalader's Rapisarsdi, Davis & Friedman Transfer to O'Melveny ----------------------------------------------------------------- O'Melveny & Myers LLP on May 7 disclosed that John J. Rapisardi and George A. Davis, former co-chairs of Cadwalader's Global Financial Restructuring Department, and former Cadwalader partner Peter M. Friedman will be joining O'Melveny as partners in the Firm's Restructuring Practice. Widely recognized among the country's most respected restructuring lawyers, Messrs. Rapisardi, Davis, and Friedman have played key roles in some of the largest restructuring projects and most significant bankruptcies ever filed. Based in New York, Messrs. Rapisardi and Davis will become Global Co-Practice Group Leaders of O'Melveny's Restructuring Group, and Friedman will reside in the Firm's DC office. San Francisco-based O'Melveny partner Suzzanne Uhland will serve as US Practice Group Leader of the Restructuring Group. "We are thrilled to welcome this preeminent team to the Firm," said Firm Chair Bradley J. Butwin. "We have many clients in common, and John, George, and Peter's arrival will increase our ability to serve these clients in restructuring projects, bankruptcies, distressed transactions, and related litigation. By combining their acclaimed practice with our West Coast, Asia, and Europe capabilities, we will have one of the premier global Restructuring Practices." The group's arrival complements other key recent additions to O'Melveny's New York transactions practice including Capital Markets Co-Head Michael Schiavone and leading finance, M&A, energy, infrastructure, and tax partners Richard Shutran, Junaid H. Chida, Arthur V. Hazlitt, Mark Caterini, and Dev R. Sen. Messrs. Rapisardi, Davis, and Friedman have built a thriving practice representing debtors and creditors from an array of industries including energy, sports, manufacturing, transportation, and healthcare, among others. Their clients have included financial institutions, private equity funds, hedge funds, troubled companies, and the US government. In the past few years alone, they handled a series of high-profile engagements, including shepherding a multinational chemical company through bankruptcy, playing a lead role in the restructurings of the nation's largest energy companies, and representing the US Treasury Department and the Presidential Task Force in the Chrysler and General Motors bankruptcies. Collectively, they have received nearly every accolade in the bankruptcy area, including high marks from Chambers, Legal 500, and International Financial Law Review, and awards from publications including Corporate Counsel, Turnarounds & Workouts, and The Financial Times, among others. Mr. Rapisardi, who was a member of Cadwalader's Management Committee, has 30 years of domestic and international restructuring experience across a variety of industries. He recently was inducted into the American College of Bankruptcy, an honorary professional and educational association of tenured and highly regarded bankruptcy professionals. His work in the automotive sector advising the US government in the restructuring of General Motors and Chrysler and his work on the Chapter 11 proceedings of petrochemical giant LyondellBasell attracted widespread media attention. Mr. Rapisardi graduated with a B.S. from Fordham University in 1979. He earned a J.D. from Pace Law School in 1982 and received an LL.M. from New York University School of Law in 1985. Mr. Davis has established a reputation as a leading restructuring attorney, having been involved in high-profile restructurings for more than 20 years, most recently in the energy sector with restructurings that include Dynegy, Edison Mission Energy, and AES Eastern Energy. Davis's leadership of the Lyondell transaction resulted in many prestigious "deal of the year" distinctions. He also has been an adjunct professor at Georgetown University Law Center, teaching bankruptcy and creditors' rights. Davis graduated magna cum laude with a B.S. from State University of New York -- Binghamton in 1986. He earned a J.D. with distinction from Hofstra University School of Law in 1990. Mr. Friedman, a nationally recognized bankruptcy litigator, represents major parties in high-stakes, complex financial restructurings. He also was an integral member of the US Treasury Department and Presidential Auto Task Force and Lyondell teams, handling the litigation-related proceedings in these matters. Mr. Friedman, who is also an adjunct professor at Georgetown University Law Center, served as a law clerk to the Honorable Joel M. Flaum of the United States Court of Appeals for the Seventh Circuit and worked in the White House Counsel's Office and the White House Office of Legislative Affairs from 1994-1995. He received a B.A. with honors from Trinity College in 1994 and earned a J.D., cum laude, from Northwestern University School of Law in 1998. "We are excited about joining such a collaborative group of lawyers and contributing to the growth of O'Melveny's New York and global transactions capabilities," said Rapisardi. Added Mr. Davis: "With an excellent team spanning both coasts, Asia, and Europe, we will be able to provide seamless service to clients." Earlier this year, O'Melveny reported the best financial year in its history, with nearly a 20% increase in profits per equity partner for 2012 (to US$2.06 million per partner) and almost a 10% increase in revenue per lawyer (to over US$1.1 million per lawyer). About O'Melveny & Myers LLP With approximately 800 lawyers in 16 offices worldwide, O'Melveny & Myers LLP -- http://www.omm.com- helps industry leaders across a broad array of sectors manage the complex challenges of succeeding in the global economy. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 20th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ 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. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***